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Japan Consumption Tax on foreign e-services to consumers

  • VAT
  • 29 January 2015 | Richard Asquith

Japan Consumption Tax on foreign e-services to consumers

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.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.