Japan

The Japanese tax, known as “consumption tax”, was introduced and made pertinent to digital business owners on 1st October 2015. The annual threshold for this tax is JPY 10 million.

Here’s what you need to know:

- The consumption tax rate is 8%.
- It is to be charged on all B2C e-commerce transactions delivered by foreign businesses to Japanese consumers. (Japanese businesses were already paying this and the idea is to level the playing field).
- Foreign companies must register and designate a tax agent for themselves in Japan.
- B2B transactions apply a “reverse charge” mechanism like other countries, where the recipient deals with the tax, not the seller.

Like other countries, the definitions of which electronic products and services are included in JCT (Japan Consumption Tax) are fairly broad. Digital services such as ebooks and courses do count under this law. You can check out an English version of their policy changes here though.

A business whose taxable turnover in Japan (2013FY) is equal or less than 10 million JPY is exempt from tax filing on Japanese Consumption Tax (2015FY).