The Consumption tax is categorized as an indirect tax in which almost every domestic transaction and every transactin for the import of for foreign goods, except for financial transactions, medical, welfare and educational services, will be subject to taxation at the rate of 10%.
Consumption tax is the most complicated in Japanese tax system.
The basic formula for calculationg tax is as follow;
Total amount pf consumption tax on sales - Total amount of consumption tax on purchases
- Allowing for Tax-exempt enterprises
- An enterprise whose taxable sales amount is less than 10,000,000JPY for the base
- period(2 fiscal years prior to the current fiscal year for the entity) can be a tax-exempted enterprise. But the enterprise could choose te be a taxable entity, in case that they got some equipment, macinery and so on, so that they could get consumption tax refund.
- ·An enterprise could elect to be a taxable entity, by declareing it by themselves before the fiscal year started. So you have to think about it in advance.