Japanese consumption tax may be similar with VAT of some other country. But it may be so difficult to be understood for forigner. 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
Business year.
If taxable sales in the base period exceed 10M\
Your 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 will be the taxable sales?】
Taxable sales
4condition
Conducted
①In Japan
②For business purposes
③For compensation
④By the transfer or lease or by the provision of services

Tax exemption sales
①Export
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

Non-taxable sales
Sales and lease of land
Sales of stock and monetary assets
Transfer of money
Interest
Medical services and social welfare
Funeral and Birthing
School education
Home rent
Others(No Consumption tax)
Donation
Sales outside Japan
Dividend
Investment
Salary
Insurance

【For exporter】
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 purchase from first year after establishment.