Overview

If you own depreciable business assets (machinery, equipment, tools, etc.), you must declare assets held as of January 1 to the municipal office. Filing is required even if the total assessed value is below the 1.5 million yen exemption threshold (免税点). Land and buildings are taxed automatically based on registration records and do not require this declaration.

Schedule

Applicability

• Applicable to: Kabushiki Kaisha (KK), Godo Kaisha (GK), Individual

The standard tax rate is 1.4% of assessed value (municipalities may increase up to 2.1%). No tax is levied if the total assessed value is below ¥1,500,000 (免税点), but the filing obligation remains. Assets expensed under the SME immediate write-off provision (少額減価償却資産の特例) — where small and medium enterprises (capital ¥100 million or less) expense assets under ¥300,000 — ARE subject to depreciable asset tax, unlike assets using the 3-year lump-sum depreciation method (一括償却資産). Idle or unused assets (遊休資産・未稼働資産) that could still be put to use must be declared. Assets under construction (建設仮勘定) are not subject to declaration until placed in service. Municipalities typically send declaration forms in December, but the filing obligation exists even if forms are not received.

Authority

Filing Methods

Additional Details

Depreciable assets (償却資産) are tangible business-use fixed assets other than land and buildings that are subject to depreciation under the Corporate Tax Act or Income Tax Act. Owners must annually declare depreciable assets held as of January 1 to the municipality where the assets are located. The six asset categories are: (1) structures (構築物) such as paved surfaces, fences, signs, and interior modifications; (2) machinery and equipment (機械及び装置); (3) vessels (船舶); (4) aircraft (航空機); (5) vehicles and transport equipment (車両及び運搬具) such as large special automobiles and in-plant transport vehicles; (6) tools, equipment, and fixtures (工具・器具及び備品) such as PCs, servers, desks, air conditioners, and medical equipment. Excluded: vehicles subject to automobile tax (自動車税) or light vehicle tax (軽自動車税), intangible fixed assets (software, patents, etc.), assets under ¥100,000 that were immediately expensed, and assets in the ¥100,000–¥200,000 range depreciated using the 3-year lump-sum method (一括償却資産). Filing uses Form No. 26 (第二十六号様式) — the main declaration form — plus Schedule 1 (種類別明細書 for additions/all assets) and Schedule 2 (for disposals). First-time filers report all assets; subsequent years report only changes.

Penalties for Non-Compliance

Failure to file without justifiable reason may result in a fine (過料) of up to ¥100,000 under Local Tax Law Article 386. Filing a false declaration is subject to imprisonment of up to 1 year or a fine of up to ¥500,000 under Article 385. Additionally, if no declaration is filed or the filing is deficient, the municipality may independently determine the asset value (認定決定), which may result in a higher assessed value than actual.

Legal Basis