Depreciating equipment, software, and other assets

Equipment, machinery and vehicles are deducted as long-term items through depreciation rather than all at once; the typical depreciation period for a vehicle is about 4 years. Outsourced software development can be recorded as an asset and depreciated over 5 years as profit comes in — not fully confirmed officially in the chat; service costs such as SMM, ad targeting, content, and remote outsourcing abroad are deducted as long as there is an invoice and a contract. Software depreciation thresholds: software is not treated as a "depreciable asset" (償却資産) for Fixed Asset Tax purposes and is not listed on the depreciable-asset declaration. For corporate/income tax purposes, software costing 300,000 yen or more must be depreciated (over a standard useful life of 5 or 3 years); software under 200,000 yen can be depreciated evenly over 3 years as a "lump-sum depreciable asset" (exempt from Fixed Asset Tax); software under 100,000 yen can be written off entirely in one year. For SMEs on the blue declaration, software under 300,000 yen can be written off in full in the year of acquisition as a "minor depreciable asset," up to a combined 3 million yen per fiscal year; this breakdown came from an AI assistant (Gemini) and, while detailed and plausible, has not been independently verified. Separately, the annual depreciable-asset declaration (償却資産税) is filed with the municipality — in Tokyo the deadline usually falls in early February (e.g., February 2, 2026); if the combined value of company assets is under 1.5 million yen, no tax is owed, but the declaration must still be filed empty, marked 該当資産なし. As a rule of thumb, assets over 200,000 yen must be declared, with the 100,000-200,000 yen range depending on the details; small items like printers or chargers are usually not depreciated, with an informal cutoff around 100,000 yen. Deposits and prepaid office expenses are often recorded as "long-term prepaid expenses," which is effectively another form of depreciation; intangible assets such as software are depreciated separately, with dedicated accounting categories in Freee. Finally, when assembling a PC from separate components, the components can be summed to the price of a finished PC for simpler depreciation accounting — confirmed by one participant through a tax office consultation. Source: https://www.tax.metro.tokyo.lg.jp/documents/d/tax/R5_shinkokutebiki_1_1 — Official Tokyo Metropolitan instructions for the depreciable-asset declaration..