Yes, even if your company isn’t based in Japan, VAT could still apply to your business activities if you are selling goods or services to Japanese customers or have a significant business presence in the country.
- Registration:
If your business meets the required turnover threshold or provides digital services to Japanese consumers, you may need to register for VAT with the Japanese tax authorities. - Collection:
Once registered, you must charge VAT on applicable sales and services to your Japanese customers. - Reporting:
Your business needs to file regular VAT returns to declare the VAT collected from customers and remit the appropriate amount to the authorities. - Input VAT Reclamation:
You can usually reclaim VAT paid on your own business purchases in Japan, reducing your overall tax burden. - Special Rules for Digital Services:
Digital service providers may need to follow specific rules, such as applying the “reverse charge” mechanism or simplified VAT registration.
A Japanese tax professional can help identify whether your business has VAT obligations and assist with the registration, compliance, and reporting processes to ensure you meet all regulatory requirements.
The information provided here is based on legislation as it stands on the date of publication and may not reflect subsequent changes. We advise clients to seek tailored professional advice before making any decisions based on this information.