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Japan Consumption Tax Guide (消費税)

Japan's Consumption Tax (消費税) is a national VAT administered by the NTA. The standard rate is 10%, with a reduced 8% rate for takeaway food and subscription newspapers. An invoice system (適格請求書/インボイス制度) launched in October 2023. Businesses with taxable turnover under JPY 10M may be exempt from registration.

Japan's 消費税 (Consumption Tax) is a national value-added tax. For related guidance, see our Corporate Tax Guide → and Personal Tax Guide →.

Standard and Reduced Rates

  • Standard rate: 10% (national consumption tax 7.8% + local consumption tax 2.2%) — applies to most goods and services.
  • Reduced rate (軽減税率): 8% — applies to takeaway food and beverages (excluding alcohol and dine-in) and subscription newspapers published at least twice per week.
  • The reduced rate was introduced in October 2019 alongside the standard rate increase from 8% to 10%. Dine-in restaurant meals are taxed at 10%.

Invoice System (適格請求書 / インボイス制度)

  • Effective from 1 October 2023. Businesses must issue qualified invoices (適格請求書) for buyers to claim full input tax credits.
  • Sellers must register as a qualified invoice issuer (適格請求書発行事業者) with their local tax office to issue compliant invoices.
  • Each invoice must show the issuer's registration number, the applicable tax rate (8% or 10%), the tax amount, and the consideration.
  • For unregistered businesses, buyers can only deduct 80% of input tax for 2023–2026 (transitional relief) and 50% for 2027–2029, with no deduction from October 2029 onwards.

Registration Threshold

  • JPY 10,000,000 in taxable turnover during the base period (two years prior).
  • Businesses below this threshold are generally exempt from charging consumption tax, unless they voluntarily register (e.g., to claim input credits or deal with corporate customers).
  • Newly incorporated companies are exempt for the first two years if capital is under JPY 10M (with some exceptions for service businesses).

Filing and Payment

  • Filing frequency: Annual, with semi-annual or quarterly interim payments for larger businesses.
  • Deadline: Within 2 months after the end of the fiscal year (e.g., 31 May for a 31 March year-end).
  • Returns are filed electronically via the e-Tax (e-Tax) system. Paper filing is possible but requires attachment of detailed schedules.
  • Tax base: Output tax (consumption tax collected from customers) minus input tax (consumption tax paid on purchases).

Exempt and Zero-Rated Supplies

  • Exempt: Land transfers, certain financial services (interest, insurance), school fees, medical services under public insurance, and international passenger transport.
  • Zero-rated (export): Export of goods and certain cross-border services qualify for a 0% rate, allowing input tax refunds.