Category: news


Consumption Tax Japan



Japanese Consumption Tax is tricky, especially when you want to choose between the tax filer status to get a refund, and the default, non-filer status.

Here are the 5 most important rules that you should know.


  • For SMEs and individuals with capital under 10 million yen, for the first 2 years can be exempt from Japanese consumption tax.


  • If sales are more than 10 million yen in the year before last, you will automatically be a consumption tax filer. In other words, you cannot have a choice.


  • Once you choose to be a consumption tax filer, you will have to stay as one for at least 2 years. If you buy a fixed asset of more than 1 million yen, you will have to stay as a filer If you purchase a fixed asset for the next 2 years from the end of the year when the fixed asset was bought. That means you will have to stay as a consumption tax filer for at least 3 years if you purchase one in the first year. of more than 10 million yen while you are a tax filer and using Standard Method (I will explain that later), you will stay as a consumption tax filer for 3 years include the year that the asset was bought.


  • If both salary and taxable sales (domestic sales and exports) in the first 6 months of a fiscal year are more than 10 million yen, you will automatically be consumption taxpayer. Similarly, if your capital is increased over 10 million by the start of the second year, you will also automatically be a consumption tax payer.


  • Simplified Method. You can choose Simplified Method (explanation for Simplified Method coming in a post soon) if the sales in the year before last were under 50 million yen. Once you choose it, you will have to use the Simplified Method for the next 2 years. (Does this follow the extension rules for fixed assets?)


This list in not conclusive, and there are a few exceptions. So please contact us if you would like to explore more options regarding your consumption tax filer choices! Send us a message, email us at, or head on over to our website


Gift tax is very expensive in Japan. You can see the tax rates as follows. It can even be prohibitive.

Net taxable gift after base deduction Under 2M JPY Under 3M JPY Under 4M JPY Under 6M JPY Under 10M JPY Under 15M JPY Under 30M JPY Over 30M JPY
Tax Rates 10% 15% 20% 30% 40% 45% 50% 55%
Deduction -0.1M -0.25M/td> -0.65M -1.25M -1.75M -2.5M 1.0M

Your parents may want to give their estate before they pass away and when you are still young to spend on something (e.g. children’s education, business investment, etc). But the gift tax is so expensive. What to do?

One solution is Early Inheritance (相続時精算課税).

You can choose to file your gift tax in future as Early Inheritance. The tax is free upto the first 25MM yen. Any gift after 25MM yen will be subject to 20% advance tax. If the total money you have received as an early inheritance is 50MM yen, the advance tax will be 5MM yen ((50M-25M) * 20%). Then, you will calculate your inheritance by the normal method and pay the difference if the actual tax is higher than the advance tax or you will receive a refund if the advance tax is higher.

The homepage was renewed. I look forward to working with you.