1. Country-Specific Features
  2. Japan Help Topics
  3. Japan Tax Topics
  4. Setting Up Consumption Tax - Japan

Setting Up Consumption Tax - Japan

You can select company-wide rounding settings, rounding methods, and precision settings for consumption tax. For more information, see Selecting Precision Settings - Japan and Setting Tax Rounding Methods - Japan.

A new installation of the Japan Localization SuiteApp will automatically provide the following tax records:

Note:

If your account already has the Japan Localization SuiteApp installed, you must manually create the new tax codes that become effective on October 1, 2019. The new tax codes should be set up using the correct tax classification. Tax category mapped to main tax category must be set on purchase transactions.

Roles for Setting Up Japan Consumption Tax

The following roles have permission to set up Japan consumption tax:

To grant permission to a Custom Accountant:

  1. Go to Customization > Scripting > Script Deployment.

  2. Edit the following script deployments:

    • Japan Sales Purchase Report Suitelet

    • Japan Deductible Tax Form Print RS

  3. On the Audience subtab, add the custom role to the Roles field.

  4. Save the script deployments.

Setting Up Provisioned Tax Records

Provisioned tax records in a new installation of the Japan Localization SuiteApp must be set up according to the following specifications and format.

Tax Code

Description

English Description

Rate

Subsidiaries

Tax Agency

Tax Type

Purchase Tax Account

Sales Tax Account

Available On

Tax Classification

未定義

未定義

Undefined

0%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

消費税(2019/9まで)

消費税(2019/9まで)

Consumption tax(-2019/9)

8%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

不課税

不課税

Non-taxable

0%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

免税

免税

Tax exemption

0%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

非課税

非課税

Non-taxable

0%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

消費税(標準税率)

消費税(標準税率)

Consumption Tax (10%)

10%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

消費税(軽減税率)

消費税(軽減税率)

Consumption Tax (8%)

8%

Parent Company (Includes children)

デフォルト税務署

消費税

仮払消費税

仮受消費税

both

blank

Tax Preferences for Japan

Perform the following steps to set up taxes in your account.

To set company-wide consumption tax preferences:

  1. Go to Setup > Accounting > Taxes > Set Up Taxes.

  2. If you have more than one tax nexus, click the Japan subtab.

  3. Enable Tax Lookup on Sales and Purchases – This box is checked by default to enable NetSuite to determine appropriate tax codes to use on sales and purchases. Clear this box if you do not want NetSuite to determine the correct tax code based on the shipping address of the customer or vendor. If you use SuiteScript to query third party tax services, clear this box.

  4. Print Tax Code Summary on Sales Forms – Check this box if you want to include a summary of the taxes paid per tax code on printed transaction forms such as estimates, sales orders, and sales invoices. The tax code summary is shown only if two or more tax codes are used on the transaction.

    If you check this box, make sure that you choose your preferred PDF layout for transaction type forms.

    To set your transaction form PDF layout preferences, go to Customization > Forms > Transaction Form PDF Layouts.

    If the Preferred box for Transaction Layout with Tax Summary is checked, NetSuite shows the tax summary as a separate element at the bottom of the form, above the totals. If you choose any of the standard or classic transaction type layouts, NetSuite shows the tax summary in the main body of the form as part of the columns element. For more information about transaction form PDF layouts, see Customizing Transaction Form PDF Layouts.

  5. Foreign Trade – Check this box if your company conducts trade with foreign companies or individuals.

  6. Tax Reporting Cash Basis – Check this box if your company reports its tax liability on a cash basis rather than an accrual basis.

  7. Display Tax Registration Number Field in Web Store – The label for this field varies depending on the specific name of a country's business tax identification number. Check this box to enable customers to enter their tax identification numbers when checking out of your web store.

  8. Tax Rounding Level – Specify the tax rounding level for this nexus:

    • If you select Item Line Level, tax is rounded per line.

    • If you select Transaction Level, the rounding is applied at the tax total level, using this formula: round (Subtotal x Tax Rate) = Tax Total.

    For more information about tax rounding level, see Setting Tax Rounding Levels, Methods, and Precision Settings.

  9. Tax Code for International Sale – Choose the default tax code for orders placed by international customers.

  10. Default Tax Code – Choose the default tax code the system will use in your transactions if no tax code has been predefined for the customer or items.

    Important:

    The Default Tax Code field is required. NetSuite OneWorld prevents you from saving the Set Up Taxes page if a nexus does not have a value in the Default Tax Code field. Look for the nexus with the missing information by clicking each country nexus subtab. Select the default tax code for the nexus, and click Save.

    Warning:

    Tax codes associated with inactive tax control accounts are not available for selection when you create or edit a transaction record. Therefore, existing default tax codes associated with the inactive tax control account will no longer be valid. When you inactivate a tax control account, be sure to change the default tax codes on the affected nexuses, item records, customer records, and vendor records. Alternatively, you can reactivate the tax control account. For more information, see Tax Control Accounts Overview.

  11. Tax Code Lists Include – Select the tax codes to appear on transactions. The Tax Code Lists Include preference does not apply to journals.

    Warning:

    It is critical to specify the rounding precision and rounding method for tax values based on the requirements of your tax authority. Failure to do so can result in incorrect tax amounts being reported.

    Important:

    Currently, it is not possible to specify the rounding precision or rounding method using CSV import, web service, or mass update. You must either specify these values on the Setup > Accounting > Setup Taxes page under the subtab for the country, or check the Allow override rounding setting per Entity box to specify rounding settings for each customer and vendor.

  12. In the Tax Rounding Precision field, select from the following values:

    • 1 and Below (default)

    • 10 and Below

    • 100 and Below

  13. In the Tax Rounding Method field, select from the following values:

    • Round Down (default)

    • Round Off

    • Round Up

  14. To apply rounding precision to the Japanese Yen, check the Apply rounding precision setting if currency precision is not 0 box. This setting also applies to other currencies that do not use decimal fractions.

    If the Apply rounding precision setting if currency precision is not 0 box is checked, NetSuite will round every value in the specified currency, which means this preference overrides all other rounding preferences. The following scenarios illustrate this behavior:

    • If the Apply rounding precision setting if currency precision is not 0 box is checked, and the Tax Rounding Level field is set to Transaction Level, the system ignores the transaction level rounding because the amount is already rounded based on the currency.

    • If the Apply rounding precision setting if currency precision is not 0 box is checked, and the Allow override rounding setting per Entity box is checked, the system ignores the rounding setting specified on the entity record.

  15. In the Preferred Tax Agency field, select the tax agency to which you pay tax.

If you have the Advanced Taxes feature enabled in your account, the Preferred Tax Agency field is shown on the Tax subtab. You can also use the Field Naming subtab to edit the field names displayed on forms, and in columns on search results, lists, and reports. See Customizing Tax Fields on Transaction Forms.

Tax Control Accounts for Japan

The following table contain the accounts that track consumption tax by default.

Name

Description

English Description

Tax Account Type

仮受消費税

仮受消費税

Suspense received consumption tax

消費税 Sale

仮払消費税

仮払消費税

Suspense paid consumption tax

消費税 Purchase

未払消費税

未払消費税

Consumption tax payable

消費税 Sale

Tax Codes for Japan

The following tax codes are set up by default, and are required for generating consumption tax reports:

For more information, see Creating Tax Codes - Other Nexuses.

Specifying Deductible Rate on Tax Code Records

On Tax Code records (Setup > Accounting > Taxes >Tax Codes), you can specify the deductible rate in the Tax Deductible field, where you can select either 100%, 80%, or 50% deductible rate. When you use or apply the tax code to a transaction, the deductible rate you selected will be the percentage of tax exempt that your company can claim.

For example, on a vendor bill and vendor credit with the following details:

Gross Amount: ¥10,000

Applied Tax Code: Standard Rate 10%

Selected Deductible Rate on Tax Code: 100%

The tax is computed as follows:

(10,000/110%) x 10% x 100% = 909, this is the tax amount, to be deducted from the gross amount,

10,000 – 909 = 9091, this is the item amount.

Tax Classifications for Japan

The tax classifications must be manually set for the provisioned tax codes so that transaction amounts will be set in the correct boxes on the Japan Consumption Tax Form.

The following are the tax classifications for Japan:

Using Custom Tax Categories

The Administrator role can rename predefined categories, or create custom tax categories.

Purchases with custom tax categories are not included in the generated Deductible Tax & Taxable Sales Ratio Calculation Form. To get the tax amounts of those transactions, run the Purchase Tax by Tax Category report, which displays the tax amounts for each tax category. Then, modify the values on the Deductible Tax & Taxable Sales Ratio Calculation Form to include the tax amounts from the custom tax categories.

To create a tax category:

  1. Go to Customization > Lists, Records, & Fields > Record Types.

  2. Click New Record on the Tax Category row.

  3. On the New Tax Category page:

    1. Enter a name for the tax category.

    2. Select a main tax category.

    3. Select a purchase type.

    4. Click the Refund box if this tax category is for refunds.

  4. Click Save.

To edit a tax category:

  1. Go to Customization > Lists, Records, & Fields > Record Types.

  2. Click List on the Tax Category row.

  3. Click the Edit link of the tax category.

  4. Make your changes on the Edit Tax Category page.

  5. Click Save.

Related Topics

General Notices