Consumption Tax Overview - Japan
In Japan, consumption tax is a nationwide tax levied on the sale and lease of domestic goods and services, and on foreign goods collected from bonded areas. Japanese businesses are responsible for collecting this tax from companies and consumers that purchase their goods and services.
Consumption tax is not collected on non-taxable, tax-free, and tax-exempt transactions such as foreign transactions, donations, investments, welfare-related transactions, exports, international transportation, and services to foreign companies.
Starting October 1, 2019, the standard tax rate is 10% and the reduced tax rate is 8%.See Managing Tax Rate Changes.
Starting October 1, 2019, a new required tax form is implemented by the Japan Tax Agency. Using NetSuite with the Japan Localization SuiteApp, you can accomplish and generate the Japan Consumption Tax Form along with its required appendices. For more information, see Japan Consumption Tax Form.
The consumption tax period for individuals is the calendar year from January 1 to December 31. For companies, the tax period matches the fiscal year.
Please see your tax consultant for details and advice.
The Japan Consumption Tax Form replaces two tax forms that are no longer supported for accounts without SuiteTax. Support for Japan Tax Report (from Reports > VAT/GST > Tax Form) ceased in NetSuite 2019.2, while support for Deductible Tax & Sales Ratio Calculation Form (from Reports > Financial > Deductible Tax & Taxable Sales Ratio Calculation Form) ceased in NetSuite 2020.1.
Related Topics
- Setting Up Consumption Tax - Japan
- Setting Tax Rounding Methods - Japan
- Selecting Precision Settings - Japan
- Setting Tax Rounding Preferences for a Customer or Vendor - Japan
- Japan Consumption Tax Form
- Deductible Purchase Tax for Japan
- Japan Consumption Tax Reports
- Tax Accounting Overview
- Enabling and Setting Up Taxation Features
- Advanced Taxes