Japan Consumption Tax on foreign e-services to consumers
- 29 January 2015 | Richard Asquith
Japan has published new details on its plans to subject the supply by foreign providers (e.g. Amazon, Google and Apple) of electronic services to its consumers to 8% Consumption Tax. This should come into place from 1 October 2015.
The details include:
- A change from the origin to the destination principle for B2C e-services. This means that the provision by non-resident providers of such services now becomes liable to Consumption Tax for the first time. So foreign providers will have to register for Japanese Consumption Tax and charge 8% tax like resident Japanese providers
- Provision of the reverse charge for such services where the customer is a Japanese tax registered business
- Facility for the registration as non-resident tax payers (‘offshore business person’) by foreign e-service providers
- A tax registration threshold, working on an annual basis, which will exempt smaller providers from having to register for Consumption Tax
- Electronic services liable to the indirect tax will include charges for: e-books; apps; streaming or downloadable music, games or videos; subscriptions to membership or dating websites; and automated automated artwork or similar designs.