Consumption/VAT/Sales Tax in Japan
- Nature of the Tax
- Japanese Consumption Tax (JCT).
- Standard Rate
National consumption tax :4%
Calculated on the total amount of sales (excluding sales not subject to tax) and once the total amount of purchases subject to tax has been deducted.
Local consumption tax : 1%
Calculated on the total amount of consumption tax due.
- Reduced Tax Rate
- Exclusion From Taxation
Land transfer or lease, Housing lease, Finance or Insurance, Medical care, Education, Welfare, etc.
Export transactions, international communication, international transport are also considered as tax-exempt sales.
- Method of Calculation, Declaration and Settlement
Under 10 million JPY per year the payment of consumption tax is not required.
You can download a document explaining the method of calculation and the means of declaration and payment. A simplified declaration is possible when the total amount of sales subject to tax is less than 50 million JPY. The consumption tax of a financial year is payable at the latest during April of the year n+2. It can be settled by automatic transfer.
- Other Consumption Taxes
- Other consumption taxes are levied at the national level and the local level: liquor tax, tobacco tax, gasoline tax, aviation fuel tax, liquefied petroleum gas tax, petroleum tax, motor vehicle tax, etc.
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