VAT coming to Amazon Japan

Yesterday, Amazon Japan issued an important notice, saying that from October 1 next year, the Japanese consumption tax compliance invoice deposit system (JCT) issued by the Japanese government is officially effective, and sellers selling on Amazon Japan must register their tax numbers and upload them to the back office in accordance with the regulations.

The JCT policy requires sellers on e-commerce platforms to provide the corresponding JCT tax ID. Consumers can use the seller’s JCT tax ID to apply for tax deduction after purchasing products. Currently, Amazon’s requirement for sellers is to upload before October 1 next year. Good tax ID. As for the invoice, Amazon can automatically generate it for consumers to download by themselves, similar to the VCS service in Europe.

Unlike VAT, the tax levied by JCT is consumption tax. We mentioned before when we talked about the Japanese station that the Japanese station currently defaults to 10% consumption tax, which means that when the seller sets the price, the Japanese station will directly identify it. The price includes tax, and the corresponding tax will be automatically deducted when calculating the income after the transaction, so the seller does not need to pass the consumption tax number to sell the goods. Anyway, 10% is deducted.

In fact, this Japanese tax reform is to enforce the retention of invoices, so that buyers who have tax deduction needs can use invoices to deduct their own taxes. It is generally used for corporate and sole proprietorship customers to use this deduction item, which has little to do with ordinary consumers. Therefore, the more significance of the JCT tax reform in Japan is to carry out tax compliance similar to VAT.

Like VAT, the Japanese tax reform is also divided into eligible sellers who need to upload their JCT tax numbers.

Japan consumption tax JCT tax number registration scope

The JCT tax number is the tax number issued by the Japanese tax agency to the applicant company. When any of the following conditions are met, the seller needs to become a JCT tax entity, and is obliged to register a tax number and pay taxes as required:

●Seller’s taxable sales during the base period exceeded 10 million yen.

●The seller’s taxable sales in the current base period did not exceed 10 million yen, but the taxable sales in the first half of the previous base year exceeded 10 million yen.

●The registered capital of the seller’s company is more than 10 million yen.

There is a clearer picture that you can look at to understand which situations need to be registered with JCT.