Yes, non-Japanese companies can voluntarily register for VAT in Japan even if they don’t meet the mandatory registration thresholds. Here’s why this might be beneficial:
- Reclaim Input VAT:
Voluntary registration allows a business to reclaim VAT paid on its own purchases of goods and services in Japan, reducing overall tax liability. - Compliance and Transparency:
Voluntarily registering demonstrates a commitment to compliance and can strengthen business relationships by ensuring that customers receive proper tax invoices. - Future Growth Planning:
If a business anticipates reaching the mandatory registration threshold soon, voluntary registration can streamline the transition and ensure readiness.
Consulting a Japanese tax professional will help assess the benefits of voluntary VAT registration and guide non-Japanese companies through the application process.
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.