On 24 September 2026, the National Tax Agency (NTA) published the comprehensive Year-End Adjustment Guide for 2026, serving as the primary procedural manual for employers conducting the annual salary income tax reconciliation. This guide operationalizes the FY2026 tax reforms, detailing the calculation logic for the revised Basic Exemption, Spouse Exemption, and Income Adjustment Deduction. It provides step-by-step instructions for the Year-End Adjustment Deduction Declaration Form and clarifies the treatment of non-resident dependents and the newly expanded scope of the Special Exemption for Spouses. The guide is essential for payroll compliance ahead of the January 2027 filing deadline.
Key Takeaways
- Revised Deduction Thresholds: Details the phase-out thresholds for the increased Basic Exemption (starting at 24 million yen total income) and the expanded Spouse Special Exemption (up to 1.33 million yen spouse income), requiring precise income aggregation.
- Digital Declaration Forms: Promotes the use of the smartphone-compatible Year-End Adjustment Deduction Declaration Form Creation Software linked to My Number Portal, enabling paperless submission by employees to employers.
- Handling of Foreign Workers: Updated criteria for determining dependent eligibility for non-resident family members, aligning with tightened documentation requirements (remittance proof, relationship certificates) introduced in recent tax reforms.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement