1. Introduction
Foreign companies, whether or not they have a domicile or a residence in Japan, have to file a consumption tax return for the transfer or rental/lease of assets or provision of services as a business in Japan or foreign cargo taken over from a bonded area. Also, the existence of branches in Japan is not a criteria for determining the foreign company’s consumption taxpayer status. In this News, we will mention some major issues about consumption tax filing requirements for foreign companies.
2. Consumption Tax Filing Requirements for Foreign Companies (In principle)
Under the Japanese Consumption Tax Law, companies include not only domestic companies but also foreign companies. That is, the consumption tax treatment for foreign companies is the same as domestic companies.
Where the taxable sales of the base period (two years before the current fiscal year) exceeds JPY10 million, the company is required to file a consumption tax return.
3. Startup foreign companies
For startup companies, there are some exceptional rules. A startup company with no base period is in principle exempt from filing a consumption tax return. However, if the company’s paid in capital is JPY10 million or more or it is classified as a specified newly established company, it becomes a mandatory taxpayer for consumption tax purpose.
4. Conclusion
In this News, we mentioned “Consumption Tax Filing Requirements for Foreign Companies.” 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)
Japanese Consumption Tax Law Article 9 (1) (2)
Japanese Consumption Tax Law Article 9-2
Japanese Consumption Tax Law Article 12-2
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