Japan to Expand Tax Incentive for Firms Moving Out of Tokyo

Tokyo, Dec. 2 (Jiji Press)–The Japanese government and the ruling bloc are considering expanding the deductible amount under a corporate tax break program designed to encourage more firms to relocate their headquarters functions from Tokyo’s 23 special wards to regional areas, it was learned Tuesday. The deadline for the program, currently set at the end of March 2026, is likely to be extended, informed sources said. The details will be decided through further discussions. The government aims to include the expansion in its tax system reform package for fiscal 2026, which starts next April. Under the program, companies that relocate their headquarters functions from Tokyo’s 23 special wards to regional areas can receive a tax cut equivalent to 7 pct of the cost of obtaining an office building. If a company expands its existing headquarters functions outside Tokyo, it can receive a tax break equivalent to 4 pct of the cost of acquiring a building. Amid accelerating overconcentration in Tokyo, the government compiled a Regional Revitalization 2.0 policy in June this year, setting a target of creating some 10,000 jobs in regional areas over the three years through fiscal 2027, mainly by encouraging companies to relocate their headquarters functions from the Japanese capital. END [Copyright The Jiji Press, Ltd.]