(Income Tax Act, Article 27, paragraph 1. The quotation is in the original Japanese.)［1］
> 事業所得の金額は、その年中の事業所得に係る総収入金額から必要経費を控除した金額とする。 [［1］](#ref-1)(Income Tax Act, Article 27, paragraph 2. The quotation is in the original Japanese.)［1］
Put plainly, business income is "a year's total revenue minus necessary expenses." The words "notice of business commencement" do not appear here. Whether you filed a notice does not change the formula. ## The article on necessary expenses has no filing condition either Next, let us look at the article that defines necessary expenses. This is the heart of the matter. > その年分の不動産所得の金額、事業所得の金額又は雑所得の金額（事業所得の金額及び雑所得の金額のうち山林の伐採又は譲渡に係るもの並びに雑所得の金額のうち第三十五条第三項（公的年金等の定義）に規定する公的年金等に係るものを除く。）の計算上必要経費に算入すべき金額は、別段の定めがあるものを除き、これらの所得の総収入金額に係る売上原価その他当該総収入金額を得るため直接に要した費用の額及びその年における販売費、一般管理費その他これらの所得を生ずべき業務について生じた費用（償却費以外の費用でその年において債務の確定しないものを除く。）の額とする。 [［2］](#ref-2)(Income Tax Act, Article 37, paragraph 1. The quotation is in the original Japanese.)［2］
The article sets two conditions: "costs directly required to earn that revenue" and "costs incurred in that line of business." It says nothing about whether a notice of business commencement was filed. There is one more point not to miss. This article covers three kinds of income: real estate income, business income and miscellaneous income. Employment income is not included. Put the other way around, even if your income is not recognized as business income and is calculated as miscellaneous income, necessary expenses can still be subtracted in that calculation. Even if the income category changes, the way to subtract expenses remains. The National Tax Agency (NTA) also explains the scope of necessary expenses in the same way. > （1）総収入金額に対応する売上原価その他その総収入金額を得るために直接要した費用の額 [［7］](#ref-7)(NTA Tax Answer "No.2210 Basics of necessary expenses." The quotation is in the original Japanese.)［7］
Here too, there is nothing about filing a notice. ## What the notice of business commencement is for So what is the notice of business commencement for? Let us look at the statute. > その旨その他必要な事項を記載した届出書を、その事実があつた日の属する年分の所得税に係る確定申告期限までに、税務署長に提出しなければならない。 [［3］](#ref-3)(Income Tax Act, Article 229, paragraph 1. The quotation is in the original Japanese.)［3］
The notice of business commencement tells the tax office that you have started a business and gives an outline of it. Filing it is an obligation, but it was not put in place as a condition for subtracting expenses. The purpose of the article is different. Note, however, that the wording "by the final tax return deadline" applies to events occurring on or after January 1, 2026. Before the amendment, the article read as follows. > その事実があつた日から一月以内に、税務署長に提出しなければならない。 [［4］](#ref-4)(Income Tax Act, Article 229, paragraph 1, as it stood on December 31, 2025. The quotation is in the original Japanese.)［4］
This amendment came from the fiscal 2023 tax reform (the Act for Partial Amendment of the Income Tax Act, etc., Act No. 3 of 2023) and took effect on January 1, 2026. Article 1, item 6(a) of the supplementary provisions of that Act sets January 1, 2026 as the effective date of the amendment to Article 229. Article 10 of the supplementary provisions sets out which rule applies to which case. [［15］](#ref-15) > 新所得税法第二百二十九条又は第二百三十条の規定は、それぞれ令和八年一月一日以後に生ずる新所得税法第二百二十九条に規定する事実又は新所得税法第二百三十条に規定する事実について適用し、同日前に生じた旧所得税法第二百二十九条に規定する事実及び旧所得税法第二百三十条に規定する事実については、なお従前の例による。 [［15］](#ref-15)(Income Tax Act, supplementary provisions (Act No. 3 of March 31, 2023), Article 10. The quotation is in the original Japanese.)［15］
You can confirm the switchover from the statute itself by specifying a point in time in e-Gov's statute search. Article 229 as of December 31, 2025 said "within one month," and the same article as of January 1, 2026 said "by the final tax return deadline." [［3］](#ref-3) In short, a person who started a business on or after January 1, 2026 has until the final tax return deadline, and a person who started before that date falls under the old rule of within one month. The NTA's procedure guide also follows the current wording. > 事業の開始等の事実があった日の属する年分の確定申告期限までに提出してください。 [［9］](#ref-9)(NTA "A1-5 Procedures for notification of opening or closing of an individual business." The quotation is in the original Japanese.)［9］
For example, for a person who started a business in May 2026, the deadline is the final tax return deadline for the 2026 tax year. Article 120 of the Income Tax Act provides that the return for a year is filed during the "third period," from February 16 to March 15 of the following year. > 第三期（その年の翌年二月十六日から三月十五日までの期間をいう。以下この節において同じ。） [［12］](#ref-12)(Income Tax Act, Article 120. The quotation is in the original Japanese.)［12］
So the deadline is March 15 of the following year (for the 2026 tax year, Monday, March 15, 2027). The NTA page "Notifications when starting a new business" also states that the deadline for the notice of business commencement is "by the final tax return deadline for the year that includes the day the business was started." [［11］](#ref-11) The common explanation that "the notice of business commencement is due within two months" mixes up deadlines. The two-month deadline applies to the application for approval of the blue tax return, and only when the business started on or after January 16 (the article is quoted in a later section). The deadline for the notice of business commencement was within one month before the amendment and is now the final tax return deadline for that year. In addition, Article 229 has no penalty for failing to file, and the penalty chapter (Articles 238 to 243) has no provision punishing a failure to file under Article 229. Penalties apply to cases such as failing to file a tax return. > その提出期限までに提出しなかつた者は、一年以下の拘禁刑又は五十万円以下の罰金に処する。ただし、情状により、その刑を免除することができる。 [［14］](#ref-14)(Income Tax Act, Article 241. The quotation is in the original Japanese.)［14］
## The document you will regret forgetting, separate from the notice Expenses can be subtracted. The trouble comes when you forget to file the application for approval of the blue tax return. The blue tax return is not something you can choose automatically just by filing a notice. You need approval from the tax office. > 納税地の所轄税務署長の承認を受けた場合には、確定申告書及び当該申告書に係る修正申告書を青色の申告書により提出することができる。 [［5］](#ref-5)(Income Tax Act, Article 143, paragraph 1. The quotation is in the original Japanese.)［5］
To be approved, you file an application. There is a deadline for it as well. > その年三月十五日まで（その年一月十六日以後新たに同条に規定する業務を開始した場合には、その業務を開始した日から二月以内）に、当該業務に係る所得の種類その他財務省令で定める事項を記載した申請書を納税地の所轄税務署長に提出しなければならない。 [［5］](#ref-5)(Income Tax Act, Article 144. The quotation is in the original Japanese.)［5］
This is where people get confused. The notice of business commencement and the application for approval of the blue tax return are separate documents. Article 144 requires the application, but it does not make filing the notice of business commencement a requirement. Filing the notice alone does not make your return a blue tax return, and conversely, no article directly blocks approval of the blue tax return because the notice was not filed. The NTA's procedure guide also presents the two as separate procedures. Their deadlines are different too, so be careful. The notice of business commencement is due by the final tax return deadline for that year. The application for approval of the blue tax return is due within two months of the start date if the business started on or after January 16. Let us also look at the article on the benefit. It states clearly who can take the deduction. > 青色申告書を提出することにつき税務署長の承認を受けている個人のその承認を受けている年分（第三項の規定の適用を受ける年分を除く。）の不動産所得の金額、事業所得の金額又は山林所得の金額は、所得税法第二十六条第二項、第二十七条第二項又は第三十二条第三項の規定により計算した不動産所得の金額、事業所得の金額又は山林所得の金額から次に掲げる金額のうちいずれか低い金額を控除した金額とする。 [［13］](#ref-13)(Act on Special Measures Concerning Taxation, Article 25-2, paragraph 1. The quotation is in the original Japanese.)［13］
It says "an individual who has received approval." It does not say "a person who filed a notice of business commencement." In money terms, the difference is large. > 原則としてこれらの所得を通じて最高55万円（令和元年以前は最高65万円）を控除することとされています。 [［8］](#ref-8)(NTA Tax Answer "No.2070 Blue tax return system." The quotation is in the original Japanese.)［8］
> 電子帳簿保存（※）またはe-Taxによる電子申告を行っている場合は、最高65万円の青色申告特別控除が受けられます。 [［8］](#ref-8)(NTA Tax Answer "No.2070 Blue tax return system." The quotation is in the original Japanese.)［8］
The ceiling rises from the 2027 tax year (Reiwa 9). The NTA explains that, for the final return for the 2027 tax year, a person who keeps high-quality electronic books or stores transaction data digitally without gaps can receive a deduction of up to ¥750,000. [［20］](#ref-20) > 前項第一号中「六十五万円」とあるのは、「七十五万円」として、同項の規定を適用することができる。 [［19］](#ref-19)(Special Measures Concerning Taxation Act, Article 25-2, paragraph 5, as in force on January 1, 2027. The quotation is in the original Japanese.)［19］
The new rule applies from the 2027 tax year (Reiwa 9). The supplementary provision keeps earlier years under the old rule: > 新租税特別措置法第二十五条の二の規定は、令和九年分以後の所得税について適用し、令和八年分以前の所得税については、なお従前の例による。 [［19］](#ref-19)(Act No. 12 of 2026, Supplementary Provision, Article 33. The quotation is in the original Japanese.)［19］
The amount and the requirements change as follows. | Period | Deduction | Main requirements | | --- | --- | --- | | Up to the 2026 tax year | ¥100,000, ¥550,000 or ¥650,000 | ¥550,000 and ¥650,000 require double-entry bookkeeping and filing by the deadline. The ¥550,000 deduction is available even on a paper return; ¥650,000 requires e-Tax, or high-quality electronic books (a notification is required) | | From the 2027 tax year | ¥100,000, ¥650,000 or ¥750,000 | ¥100,000 is available with simple bookkeeping (not available if business revenue two years earlier exceeded ¥10,000,000). ¥650,000 requires double-entry bookkeeping plus e-Tax (filed by the deadline); ¥750,000 also requires high-quality electronic books or gap-free digital storage, and a notification filed by the final tax return deadline for that year |(NTA "No.2070" and NTA leaflet "The ¥750,000 blue tax return special deduction")［8］［20］
Be careful about the timing. The ¥750,000 deduction applies from the return for the 2027 tax year, which is filed between February 16 and March 15, 2028. Until then the figures are ¥100,000, ¥550,000 and ¥650,000. If you remember only the headline "up to ¥750,000," you will take the wrong amount on this year's return. From the 2027 tax year, a paper return lowers the ceiling to ¥100,000, and ¥650,000 and ¥750,000 require filing through e-Tax. But the ¥100,000 deduction also has a condition. If you do not qualify for ¥650,000 or ¥750,000 and the revenue from your business two years earlier exceeded ¥10,000,000, you cannot take the ¥100,000 deduction either. Carrying losses forward also depends on the blue tax return. > その年の前年以前三年内の各年（その年分の所得税につき青色申告書を提出している年に限る。）において生じた純損失の金額 [［6］](#ref-6)(Income Tax Act, Article 70, paragraph 1. The quotation is in the original Japanese.)［6］
In the period after starting a business when losses continue for a while, whether you can use this three-year carryforward makes a big difference. If you miss it, even when you make a profit the next year, you cannot offset it against the previous year's loss. To sum up: | Document | Deadline | What happens if you do not file | | --- | --- | --- | | Notice of business commencement (Article 229) | By the final tax return deadline for the year that includes the start date | Expenses can still be subtracted. The tax office remains uninformed that the business has started | | Application for approval of the blue tax return (Article 144) | In principle by March 15. If the business started on or after January 16, within two months of the start date | You cannot receive the blue tax return special deduction (¥100,000, ¥550,000 or ¥650,000 today; ¥100,000, ¥650,000 or ¥750,000 from the 2027 tax year) or the three-year carryforward of business losses (net losses) (losses on business assets damaged by disasters and similar losses are treated separately) | | Statement of income and expenses (white tax return) | Attached to the final tax return | You cannot show the breakdown of revenue and expenses in your return (attaching it to the final tax return is required; NTA No.2080) |(Income Tax Act, Articles 229 and 144; NTA "No.2070" and "No.2080")［3］［5］［8］［10］
## Expenses can be subtracted on a white tax return too You often see the explanation that "if you don't file a blue tax return, you can't subtract expenses." This is also false. A white tax return is a return filed without approval for the blue tax return. The income itself is calculated under the same Article 37. The NTA asks white tax return filers too to keep books and retain documents, and guides them to attach a breakdown of expenses to their return. > また、確定申告書を提出する場合には、総収入金額や必要経費の内容を記載した書類（収支内訳書など）の添付が必要になります。 [［10］](#ref-10)(NTA Tax Answer "No.2080 Bookkeeping and record-keeping system for white tax return filers." The quotation is in the original Japanese.)［10］
> 白色申告者に対しても、記帳制度や記録保存制度が設けられています。 [［10］](#ref-10)(NTA Tax Answer "No.2080 Bookkeeping and record-keeping system for white tax return filers." The quotation is in the original Japanese.)［10］
On a white tax return as well, you keep books, collect your expenses and enter them in the statement of income and expenses. The difference from the blue tax return is whether you can receive benefits such as the deduction and the carryforward. It is not whether you can subtract expenses. ## Whether it is a business depends on the facts Let us look at everything so far from the other direction. If you have not filed a notice of business commencement and try to subtract expenses as business income, where do you stumble? You do not stumble on the amount of expenses. You stumble on whether there is a real business. This is the part of the rules that says what a "business" is. > 前各号に掲げるもののほか、対価を得て継続的に行なう事業 [［17］](#ref-17)(Order for Enforcement of the Income Tax Act, Article 63, item 12. The quotation is in the original Japanese.)［17］
What matters is whether you carry on the activity for consideration and on a continuing basis. Whether you filed a notice is not the test. For costs that mix household and business use, only the portion separated out becomes an expense. > この家事関連費のうち必要経費になるのは、取引の記録などに基づいて、業務遂行上直接必要であったことが明らかに区分できる場合のその区分できる金額に限られます。 [［7］](#ref-7)(NTA Tax Answer "No.2210 Basics of necessary expenses." The quotation is in the original Japanese.)［7］
However, this separation differs between white and blue tax returns. Article 96 of the Order for Enforcement of the Income Tax Act lists two kinds of mixed household-related costs that can be treated as expenses. Item 1 applies to all filers, and item 2 applies to people who have received approval for the blue tax return. > 家事上の経費に関連する経費の主たる部分が不動産所得、事業所得、山林所得又は雑所得を生ずべき業務の遂行上必要であり、かつ、その必要である部分を明らかに区分することができる場合における当該部分に相当する経費 [［16］](#ref-16)(Order for Enforcement of the Income Tax Act, Article 96, item 1. The quotation is in the original Japanese.)［16］
> 前号に掲げるもののほか、青色申告書を提出することにつき税務署長の承認を受けている居住者に係る家事上の経費に関連する経費のうち、取引の記録等に基づいて、不動産所得、事業所得又は山林所得を生ずべき業務の遂行上直接必要であつたことが明らかにされる部分の金額に相当する経費 [［16］](#ref-16)(Order for Enforcement of the Income Tax Act, Article 96, item 2. The quotation is in the original Japanese.)［16］
How far does "the main part is necessary for carrying on the business" in item 1 reach? Basic Circular on the Income Tax Act 45-2 sets out how to judge it. It is judged by whether the part needed for the business exceeds half of the spending, but even if it is half or less, that part can be treated as an expense if it can be clearly separated. > 令第96条第1号に規定する「主たる部分が不動産所得、事業所得、山林所得又は雑所得を生ずべき業務の遂行上必要」であるかどうかは、その支出する金額のうち当該業務の遂行上必要な部分が50％を超えるかどうかにより判定するものとする。ただし、当該必要な部分の金額が50%以下であっても、その必要である部分を明らかに区分することができる場合には、当該必要である部分に相当する金額を必要経費に算入して差し支えない。 [［18］](#ref-18)(Basic Circular on the Income Tax Act 45-2. The quotation is in the original Japanese.)［18］
Item 2 is a rule added only for people who have received approval for the blue tax return. If records of transactions show that a portion was directly necessary for the business, that portion can be treated as an expense. This is where the allocation of household-related costs differs. Rent and electricity for a home that doubles as an office are examples. Instead of treating the full amount as an expense, you separate out only the proportion used for the business. This separation cannot be done without records. Having records matters more than having filed a notice of business commencement. ## Three common misunderstandings The first is the misunderstanding that "if you file a notice of business commencement, your expenses are automatically allowed." That is not so. Even after you file the notice, spending unrelated to the business does not become an expense. Private meals and family trips do not become expenses even if a notice has been filed. The second is the misunderstanding that "filing a notice of business commencement makes your tax higher." If your income rises, your tax rises, but that is the result of your sales and expenses. The notice itself does not decide the amount of tax. The third is the misunderstanding that "the notice of business commencement is due within two months." As we saw in an earlier section, the two-month deadline belongs to the application for approval of the blue tax return. Always check deadlines in the statute or in the NTA's procedure guide. ## What to do 1. When you start a business, file a notice of business commencement (the deadline is the final tax return deadline for that year) 2. If you want to use the blue tax return, also file the application for approval (within two months of the start date if you started on or after January 16) 3. Keep books and retain receipts for your expenses (the same applies on a white tax return) 4. For costs that mix household and business use, record the proportion used for the business and separate it 5. If you are aiming for the ¥750,000 deduction, meet the requirements for high-quality electronic bookkeeping or digital seamless storage from the start of the 2027 tax year 6. Decide whether your income is business income or miscellaneous income based on the facts. If you are unsure, consult the tax office or a licensed Japanese tax accountant (zeirishi) In terms of order, records come first. What decides whether expenses are allowed is your records and the real state of your business. The notice is a procedure that lets the tax office know about the business. ## Summary "Without filing a notice of business commencement, expenses are not allowed" is false. Business income is calculated by subtracting necessary expenses from total revenue (Income Tax Act, Article 27, paragraph 2), and the article on necessary expenses (Article 37, paragraph 1 of the same Act) has no condition about whether a notice was filed. Even if your income is not recognized as business income and becomes miscellaneous income, expenses can be subtracted in that calculation. The notice of business commencement is a filing that informs the tax office that a business has started (Article 229 of the same Act). For businesses started on or after January 1, 2026, its deadline is the final tax return deadline for that year. There is no route in the statutes by which expenses are denied because no notice was filed. If, along with the notice of business commencement, you do not file the application for approval of the blue tax return by its deadline, you cannot receive the blue tax return special deduction (¥100,000, ¥550,000 or ¥650,000 today; ¥100,000, ¥650,000 or ¥750,000 from the 2027 tax year if the requirements are met) or the three-year carryforward of business losses (Article 144 and Article 70 of the same Act; NTA No.2070). What you need in order to subtract expenses is a real business and records. Please also take care of the notice as the procedure that tells the tax office about your business. ## 出典 - ［1］[所得税法第27条（事業所得）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/27) 確認日：2026-10-27 - ［2］[所得税法第37条（必要経費）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/37) 確認日：2026-10-27 - ［3］[所得税法第229条（開業等の届出）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/229) 確認日：2026-10-27 - ［4］[所得税法第229条（2025年12月31日時点の条文。e-Gov 法令API の時点指定）— e-Gov法令検索](https://laws.e-gov.go.jp/api/2/law_data/340AC0000000033?asof=2025-12-31) 確認日：2026-10-27 - ［5］[所得税法第143条（青色申告）・第144条（青色申告の承認の申請）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/143) 確認日：2026-10-27 - ［6］[所得税法第70条（純損失の繰越控除）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/70) 確認日：2026-10-27 - ［7］[No.2210 必要経費の知識— 国税庁](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2210.htm) 確認日：2026-10-27 - ［8］[No.2070 青色申告制度— 国税庁](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2070.htm) 確認日：2026-10-27 - ［9］[A1-5 個人事業の開業届出・廃業届出等手続— 国税庁](https://www.nta.go.jp/taxes/tetsuzuki/shinsei/annai/shinkoku/annai/04.htm) 確認日：2026-10-27 - ［10］[No.2080 白色申告者の記帳・帳簿等保存制度— 国税庁](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2080.htm) 確認日：2026-10-27 - ［11］[No.2090 新たに事業を始めたときの届出など— 国税庁](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2090.htm) 確認日：2026-10-27 - ［12］[所得税法第120条（確定所得申告）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/120) 確認日：2026-10-27 - ［13］[租税特別措置法第25条の2（青色申告特別控除）— e-Gov法令検索](https://laws.e-gov.go.jp/law/332AC0000000026/ARTICLE/25_2) 確認日：2026-10-27 - ［14］[所得税法第241条（無申告の罪）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340AC0000000033/ARTICLE/241) 確認日：2026-10-27 - ［15］[所得税法 附則（令和5年3月31日法律第3号）第1条・第10条— e-Gov法令検索](https://laws.e-gov.go.jp/api/2/law_data/340AC0000000033?asof=2026-10-27) 確認日：2026-10-27 - ［16］[所得税法施行令第96条（家事関連費）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340CO0000000096/ARTICLE/96) 確認日：2026-10-27 - ［17］[所得税法施行令第63条（事業所得の範囲）— e-Gov法令検索](https://laws.e-gov.go.jp/law/340CO0000000096/ARTICLE/63) 確認日：2026-10-27 - ［18］[所得税基本通達45−2（家事関連費の判定）— 国税庁](https://www.nta.go.jp/law/tsutatsu/kihon/shotoku/07/01.htm) 確認日：2026-10-27 - ［19］[Special Measures Concerning Taxation Act, Article 25-2 (blue tax return special deduction; text and supplementary provisions in force on January 1, 2027) — e-Gov](https://laws.e-gov.go.jp/api/2/law_data/332AC0000000026?asof=2027-01-01) Checked: 2026-10-27 - ［20］["Receive a ¥750,000 blue tax return special deduction by keeping high-quality electronic books or storing data digitally without gaps" (August 2026) — NTA](https://www.nta.go.jp/taxes/shiraberu/shinkoku/kojin_jigyo/0026007-003_02.pdf) Checked: 2026-10-27 Note: This article is based on laws and official information as of October 27, 2026. It is a translation of the Japanese original; if the two differ, the Japanese version prevails. Quotations from laws and official sources are given in the original Japanese. Sources are based on laws (e-Gov) and official materials of the NTA, all in Japanese. If a correction is needed after publication, a correction record will be added at the end of this article ([Correction policy](/en/methodology/)).