1. Introduction
Starting from October 1, 2019, the Japanese consumption tax rate will be raised from 8% to 10%, and the reduced tax rate system will be introduced for “foods and drinks excluding alcoholic drinks and eating-out services” and “newspapers published twice or more a week.”
In this News, we will mention the application of old and new tax rates for transactions taking place around October 1, 2019.
2. Application of old and new consumption tax rates
In principle, the applicable tax rate is determined on the actual date when the taxable transaction has taken place.
Therefore, even if the date of receiving money for assets or services is on or after October 1, 2019, any taxable transactions occurring by September 30, 2019 is subject to consumption tax at the rate of 8%.
3. Transitional measures
The consumption tax rate of 8% will be applied to particular conditions of the following taxable transactions occurring on or after October 1, 2019 as transitional measures:
① Freight charges, admission fees, etc.
② Utilities such as electricity, gas, and water supply
③ Leasing of assets under certain conditions
④ Rendering of designated services
⑤ Subscription for periodicals under certain contracts
⑥ Specified newspapers
⑦ Mail-order shopping, etc.
⑧ Private nursing home
⑨ Product recycling under the Home Appliance Recycling Law
4. Conclusion
In this News, we have mentioned “Consumption Tax – Introduction of Reduced Tax Rate System.”
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
(Reference)
Tatsuya Ota, “Reduced Tax Rate and Invoicing System”, (2019) Zeimu Kenkyukai,Inc.
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