Japan’s National Tax Agency (NTA) has issued new rules for the collection of consumption tax by online platform operators, which will apply from 1 April 2025.
Businesses who provide electronic services such as application distribution for the consumers in Japan (excluding provision of B2B (business-to-business) electronic services are required to file and pay the consumption tax on such services, regardless of whether such businesses are domestic or foreign businesses.
According to the partial revision of the Consumption Tax Act, etc on and after 1 April 2025, if a foreign business provides B2C electronic services via a digital platform and receives the compensation for the provision of such services via a specified platform business, such services shall be deemed as such specified platform business provides the services and the specified platform business is required to file and pay the consumption tax.
The NTA has also provided an English-language guidance page with a general overview of the new rules. The NTA’s website contains comprehensive information on Japan’s consumption tax system, including Q&As and details on exemptions and filing requirements.
