Please find this month’s topics below. We hope they will be useful to you.
▼Taxation
Consumption Tax on Services Related to Real Estate Located in Japan
The 2026 Tax Reform introduced the following amendment to the Japanese consumption tax rules.
Under the amendment, services relating to real estate located in Japan that are provided to non-residents will be treated as taxable transactions for Japanese consumption tax purposes. This amendment takes into account the treatment adopted in other jurisdictions, and is based on the view that the benefits of such services are attributable to the real estate located in Japan.
Services for the management of real property located in Japan have already been subject to Japanese consumption tax. In addition, brokerage or agency services relating to the sale, exchange, or lease of real property located in Japan will also become subject to Japanese consumption tax.
This amendment applies to services provided on or after October 1, 2026. However, it does not apply to services provided under contracts entered into on or before March 31, 2026.
▼Labor Management
Pension System Reform: Expansion of Coverage to Part-Time Workers
Under the Pension System Reform Act, the scope of social insurance coverage for part-time workers will be expanded in stages.
One of the eligibility requirements-the company size criterion (number of employees)- currently applies to companies with 51 or more employees; however, this threshold is scheduled to be gradually lowered between October 2027 and October 2035, and will ultimately be abolished. In addition, wage requirements will be revised, and coverage will be expanded to include sole proprietorships regardless of industry. As a result, part-time workers who meet certain requirements will be eligible for social insurance coverage, regardless of company size or industry. It is important for each business to confirm the effective date for their company and the actual working conditions of their employees, and to proceed with preparations that take into account the impact on employment management and administrative procedures.
Source: Ministry of Health, Labor and Welfare, “Expansion of Eligibility for Pension and Social Insurance Enrollment”