Japanese consumption tax may be similar with VAT of some other country. But it may be so difficult to be understood for foreigner. So I would like to explain the outline of the tax.
【Determined if taxable or tax-exempt 】
First please check the definition of “base period”!!
Base period means a tax years 2years prior to this
If taxable sales in the base period exceed 10M\
You have tax liability in this year.
And if you set up company with capital more than 10M.
you have to be taxable during two business terms from first business term.
【What is the taxable sales for consumption tax?】
4condition of taxable sales
②For business purposes
③For getting paid
④By handing over , leasing or by the provision of services
Tax exemption sales
②Services provided to non-resident except following;
・Transportation serviced in Japan
・Drinking and eating in Japan
・Other services that non residence consume in Japan
③International transportation and communications
between Japan and overseas
Sales and lease of land
Sales of stock and monetary assets
Transfer of money
Medical services and social welfare
Funeral and Birthing
Others(No Consumption tax)
Sales outside Japan
If you are exporter you had better submit “Application for Choosing Consumption Tax Payer after setting up your company.
You can be tax-payer form first year after establishment by the application.
You can receive the returned consumption tax of the purchase and any expense from first year after establishment.