Japan Tax Agency Clarifies Changes to Individual Income Tax Deductions Under 2025 Tax Reform

The Japanese National Tax Agency April 29 clarified changes to individual income tax deductions under the fiscal year 2025 tax reform. The clarification includes: 1) revisions to the basic deduction, ranging from 950,000 Japanese yen (US$6,683) for low-income earners to 580,000 yen (US$4,080) for incomes up to approximately 25.4 million yen (US$178,673); 2) an increase in the minimum guaranteed amount of the employment income deduction, to 650,000 yen (US$4,572) from 550,000 yen (US$3,862); 3) a new special deduction for residents with specific relatives aged 19 to 23 in the same household with incomes between 580,000 yen and approximately 1.2 million ...