Japan ‘deemed reseller’ for digital platforms April 2024

2024 Tax Reform Package: Consumption Tax calculation and collection obligations for online platforms

Japan has become the latest country to impose the obligations for online digital platforms to charge and remit Consumption Tax for transactions by non-resident providers on their marketplaces. In the government’s 2024 Tax Reform Package, the Ministry of Finance has proposed imposing the deemed supplier obligation on marketplaces for non-resident merchants selling to Japanese consumers.

This follows Australia, New Zealandand the EU deemed supplier regime.

The Deemed Reseller regime would switch the obligation to determine and charge Japanese Consumption Tax on sales by marketplace traders to local consumers. This would include registering for tax in the case of non-resident platforms. Presently, Consumption Tax registration obligations lie with the non-resident seller, which presents a challenge for the tax authorities to monitor. It also gives non-compliant off-shore sellers a potential tax advantage through evasion.

Japan’s Consumption Tax on electronically supplied services was introduce in 2015.

If passed, the measure is could come into effect from 1 April 2024.

Tracking and reporting Japanese Consumption Tax – or other international indirect taxes – is a complex exercise. VAT Calc’s single platform VAT Filer can accurately complete any country filings with verified transactional data from our VAT Calculator or VAT Auditor integrated tools.

Asia Pacific VAT on digital services