Consumption Tax (CT) is Japan’s largest and most valuable indirect tax, generating over YEN 21 trillion ($180 billion) in 2021. Any business with turnover that exceeds YEN 10 million is required to register for CT. This figure is taken from the base year of two years prior to the tax year. It was originally introduced in the country in 1989 and is its most frequently used indirect tax; applied to the majority of goods and services traded. Japan’s CT regime shares many core similarities with the European Union’s VAT system, such as requiring re-calculation and payments to be made to the relevant tax authority at each transaction point throughout a sales chain.
Source Innovate tax
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