Small Asset Depreciation Checker (Japan Tax Rules)

Enter the acquisition cost of an asset and whether your business qualifies as a small/medium blue-return filer to instantly check which Japanese depreciation category applies: immediate expensing, lump-sum depreciation, the special provision, or regular depreciation.

What Is the Small Asset Depreciation Checker?

When a business buys a fixed asset, it normally spreads the cost over the asset's useful life through depreciation. However, Japanese tax law provides simplified treatment for assets below certain cost thresholds to reduce administrative burden. This tool takes the acquisition cost and your blue-return SME status and instantly determines which category applies: immediate expensing, lump-sum depreciation (3-year straight-line), the special provision (immediate expensing up to a JPY 3,000,000 annual cap), or regular depreciation.

Because the applicable rule depends on the exact cost band and some categories are optional, this is an area where mistakes are common in practice. Knowing the correct category in advance makes tax filing and year-end closing much smoother.

How to Use

Enter the acquisition cost Enter the acquisition cost of a single item (excluding tax, if you use tax-exclusive accounting).
Select blue-return SME status Choose whether your business qualifies as a blue-return SME.
Enter the amount already used this year If you have already applied the special provision to other assets this year, enter that total (leave it at 0 otherwise).
Check the result The applicable category is displayed along with the reasoning behind the determination.

Tips for getting more out of it

The special provision (JPY 200,000–300,000) is only available to qualifying blue-return SMEs (businesses with 500 or fewer regular employees, among other conditions). White-return sole proprietors and large corporations cannot use it, so check your eligibility first.
Lump-sum depreciation assets (JPY 100,000–200,000) can optionally use regular depreciation instead. If an asset's actual useful life is shorter than 3 years, regular depreciation may let you expense it faster.
The special provision has an annual cap of JPY 3,000,000 in total. Assets that push the cumulative total past this cap cannot use the special provision, so check the running total before a year-end buying spree.
This tool is a simplified checker based on acquisition cost and blue-return SME status only. Actual filings depend on additional factors such as the asset's intended use and the date it was put into service, so consult a tax accountant for official filings.

Use Cases

Checking laptops and tablets

Laptops and tablets often cost in the upper JPY 100,000s, so you can quickly check whether they fall under lump-sum depreciation, the special provision, or regular depreciation.

Checking the annual cap before a year-end buying spree

Before purchasing several small assets at once near fiscal year-end, check how much room remains under the JPY 3,000,000 annual cap for the special provision.

Organizing expense categories before filing

Sole proprietors can pre-sort equipment purchased during the year into the correct expense category (immediate expensing vs. depreciation) before filing their tax return.

Glossary

Small asset: A depreciable asset with an acquisition cost under JPY 100,000, which can be expensed in full in the year it is put into business use.
Lump-sum depreciation asset: An asset costing JPY 100,000–199,999 that can be depreciated evenly over 3 years regardless of its actual useful life.
Special provision: A rule allowing qualifying blue-return SMEs to immediately expense assets costing JPY 200,000–299,999, up to a total of JPY 3,000,000 per year.
Qualifying blue-return SME: A small or medium business (generally 500 or fewer regular employees) that files blue-return tax returns, making it eligible for several tax incentives including the special provision.
Acquisition cost: The total amount paid to acquire an asset, including incidental costs such as installation and delivery, used to determine which depreciation category applies.

Frequently Asked Questions

The special provision (JPY 200,000–300,000) lets you expense the full amount immediately in one year, giving a larger upfront tax benefit than lump-sum depreciation, which is spread evenly over 3 years. However, the special provision requires blue-return SME status and is capped at JPY 3,000,000 per year, so if you don't qualify, you would use regular depreciation or lump-sum depreciation instead.

Generally, a business with 500 or fewer regular employees that files blue-return tax returns. The National Tax Agency's page on the special provision for small assets acquired by SMEs has the detailed eligibility requirements.

As a rule, items that are normally used and traded as a set (for example, a table and chairs sold together) are judged as a single acquisition cost, even if the components were purchased separately, as long as they function as one unit.

This tool is a simplified checker based only on acquisition cost and blue-return SME status. Actual treatment can vary depending on factors such as the date the asset was put into service, so please confirm with a tax accountant before filing.

Side Note — Why the JPY 100,000 and JPY 300,000 lines exist

Japan's tax code sets multiple thresholds for depreciable assets for two main reasons: reducing administrative burden and supporting small business investment. Forcing businesses to track depreciation schedules for every inexpensive item under JPY 100,000 would create bookkeeping overhead disproportionate to the amounts involved, so the immediate-expensing rule lets any taxpayer write these off right away.

Lump-sum depreciation assets (JPY 100,000–200,000) follow the same logic: instead of tracking the specific useful life of each individual item, businesses are allowed to use a simple flat 3-year schedule. This works particularly well for items like computers and office equipment that get replaced frequently.

The special provision (JPY 200,000–300,000) is restricted to blue-return SMEs because it was introduced specifically to encourage capital investment among small and medium businesses. Blue-return filing itself is a preferential status granted to businesses that maintain proper books, and this provision extends that same policy logic.

The JPY 3,000,000 annual cap exists because the special provision is an exception to the normal depreciation rules. Without a cap, even large-scale capital investments could be expensed immediately, creating an outsized impact on tax revenue — so the cap keeps the benefit focused on the ordinary scale of small business investment.

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