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Tax Reform Proposal: Deemed Supplier Liability for Foreign Digital Platforms in Japan

  • Japanese authorities propose significant changes in tax reform bill for non-resident digital platforms
  • Foreign digital service providers must register and charge consumption tax when threshold is reached
  • Challenges in enforcing consumption tax mandates on foreign suppliers due to lack of physical presence
  • Proposed tax reform introduces deemed supplier statute for foreign digital platforms
  • Effective date of proposed bill is April 1, 2025 with a one-year grace period
  • Digital platform operators will be liable for charging, collecting, and remitting JCT for sales to Japanese customers
  • Platform operators will bear sole responsibility for indirect taxes, leading to reorganization in operations
  • Proposed bill aims to tackle consumption tax gap in digital economy by shifting tax reporting liabilities to platform operators.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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