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Japan Consumption Tax cut for COVID-19

  • Mar 12, 2021 | Richard Asquith

12 March - Japan has moved the deadline on individuals' Consumption Tax return deadline from 31 March to 15 April 2021

12 Dec - Japan's Parliament is considering a reduction in the reduced Consumption Tax rate from 8% to 5% until the end of 2022. A return to 8% would then be phased back over two years.

21 July - Consumption Tax payments since 1 February may be delayed until 1 February 2021

16 April update - businesses which have suffered a larger than 50% drop in revenues since 1 February 2020 as a result of the coronavirus crisis may apply for exempt Consumption Tax status.

10 April update - as part of wide-ranging tax reliefs businesses are to be offered Consumption Tax payment delays without penalties or interest. Businesses must show at least 20% decline in revenues since 1 February to qualify for a 1-year postponement of Consumption Tax, corporation and income taxes.

23 March - Japan is not going ahead with a halving of the main Consumption Tax rate to 5% to help businesses struggling with the Covid-19 pandemic. Instead, it is opting for filing and payment delays.

Japan has already delayed filing deadlines and payments for individuals by two months until May. Japanese Consumption Tax was raised from 8% to 10% in October 2019 to help fund the growing social costs of and aging population.

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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 won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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