Japan plans to hold digital platform operators accountable for collecting Japanese VAT on cross-border supply of digital content and services. This proposed reform aims to improve VAT enforcement on cross-border transactions and eliminate Japanese VAT leakage, estimated at 23.1 billion Japanese yen per year. The new system will apply to major digital platforms with reliable tax compliance and administrative capabilities, with a threshold of 5 billion Japanese yen per taxable year for relevant supplies of digital content or services.
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