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Japanese Consumption Tax Refunds on Export Sales & Services to Non- Residents

accounting analytics balance black and white 209224 - Japanese Consumption Tax Refunds on Export Sales & Services to Non- Residents

Japanese Small Medium Enterprises (SMEs) are exempt from charging and collecting consumption tax during their first two years of operation. In Japan an SME is defined as a company with paid-in capital of less than 10 million yen. 

Most companies that qualify should choose this default for their consumption tax status. 

However, if your business is primarily focused on buying products in Japan for export to overseas customers, or is mainly related to providing services for non-resident customers, you might want choose to be a consumption tax filer. 

When you file your consumption tax return you will be able to claim all of your domestic expenses and be eligible for refunds on the consumption tax included in those expenses.

To become a consumption tax filer, you have to submit an application form to choose the status. Otherwise, you will be exempt of the consumption tax by default.