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Japan ‘deemed reseller’ for digital platforms April 2024

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

Japan is to 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

Comments (click for details) Rate Date Threshold Comments
Australia 10% Jul 2017 AUD $75,000
Azerbaijan 12% Jan 2017
Armenia 20% Jan 2022 AMD 115million
Bangladesh 5% - 15% Jul 2019 B2B and B2C
Bhutan 7% Jul 2021 Nu 5million
Cambodia 10% Mar 2022 KHR 250m
China 6%-13% N/a Nil Withholding VAT; B2B and B2C
Fiji 9% TBC FJD 300,000
India 18% Jul 2017 -
Indonesia 11% Aug 2020 IDR600m or 12k customers
Japan 10% Oct 2015 JPY 10 million
Kazakhstan 12% Jan 2022 Nil
Kyrgyzstan 12% Jan 2022 Nil
Laos 10% Feb 2022 LAK 400m
Malaysia 6% Jan 2020 RM500,000
Nepal 13% Jul 2022 Rupees 2m Also 2% DST
New Zealand 15% Oct 2016 NZD 60,000
Pakistan 2% Sep 2021 Nil Marketplace Withholding VAT
Palau 10% Jan 2023 $300,000
Philippines 12% Jan 2024 ? P 3million
Singapore 9% Jan 2020 S$ 100,000
South Korea 10% Jul 2015 Nil
Sri Lanka 18% 2025? LKR 60m Proposals only
Taiwan 5% May 2017 NTD 480,000
Tajikistan 14% Jan 2021
Thailand 7% Sep 2021 1.8m Baht
Uzbekistan 12% Jan 2020 Nil
Vietnam 10% Dec 2020

 

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