Japan Consumption Tax compliance and rates

Consumption tax compliance

Once a company becomes a taxable business, it is required to file periodic CT returns. The frequency of these depends on the trader’s turnover. The tax filing lists all of the company’s transactions related to the supply of the relevant goods or services.

Any CT due should be paid simultaneously with the filing of the tax return. The tax authorities will require payments of CT liabilities to be made in Japan at an authorised bank or post office.

In the case of a tax credit (where the CT incurred by the company exceeds the CT charged on its sales in the reporting period), documentary proof related to the transactions is often requested by the tax office.

Japan consumption tax recovery

There is provision in Japan for VAT reclaims, along the lines of the European Union’s 8th & 13th VAT Directives.  There are however strict time limits, and a local tax representative must be appointed to liaise with the Japanese authorities.

Japan consumption tax rates

The Japanese CT rate is currently 8%:  7% national levy; 1% regional levy.

Japanese Consumption tax Rates

Rate Type Which goods or services
8% Standard Consumption tax (since 1 April 2014). Rate set to increase to 10% from October 1, 2019.
0% Zero Exports and some services provided to non-residents.
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