- The Japanese consumption tax (CT) is a sales-based indirect tax similar to VAT/GST, applied to goods, services, and digital services supplied in Japan.
- Taxable transactions include sales/leases of assets, services, digital services to Japanese residents/companies, and imports; certain transactions like land sales, securities, loans, medical treatments, tuition, and residential rent are exempt.
- Export transactions and most services to non-residents are export exempt (0% tax rate).
- Digital services from foreign suppliers are taxed: B2B services use a reverse charge mechanism; B2C services require the foreign supplier to file/pay tax, with new platform taxation rules for large digital platforms effective April 2025.
- A business is a taxable person if its taxable sales (including export exempt sales) exceeded JPY10 million in the base period (two years prior).
Source: kpmg.com
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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