Overview of depreciable assets tax

• Who needs to file a depreciable assets tax return?

Individuals and corporations that possess depreciable assets every 1st January.

• What are depreciable assets?

Assets such as PCs, computer servers, desks, chairs, sofas, air conditioners, and refrigerators are depreciable assets. But some of the depreciable assets are not required to be included in the depreciable assets tax return. For example, buildings (taxed separately), land (not depreciated and taxed separately), vehicles subject to automobile tax, and intangible assets (e.g. software, intellectual property, etc.) are not included in the return.

Also, below depreciable assets are excluded from the depreciable assets tax return

Depreciable assets costing less than JPY 100,000

Depreciable assets whose cost is less than JPY 200,000 and a depreciation method is selected as ‘lump-sum depreciation’ (allocated to depreciation expense over 3 years)

In addition, below is a special rule for small and medium-sized enterprises.

Assets costing less than JPY 300,000 can be depreciated in the year these were acquired. But they need to be included in a depreciable assets return even though they are not listed on the balance sheet.

• What is the tax rate?

1.4%

• When should the return be filed?

By every 31st January

You can see our depreciable assets tax return preparation service.