News this week: According to media reports, Japanese
lawmakers are edging closer to amending the nation’s Consumption Tax Act, which
taxes the majority of imported goods and domestic transactions. Currently, e-commerce
transactions originating from companies registered outside of Japan are not subjected to this tax.
Lawmakers are seeking
amendments to include cross-border transactions and have reportedly been passed
by Japan’s National Diet. The legislation will come into effect on 1st
October this year. While there will be no levy imposed on the service provider,
the buyer will instead be taxed by the National Tax Agency (NTA) – but commercial
buyers will be eligible to obtain a tax credit for the fee paid.
The amended law will
require e-commerce operators based outside of Japan to collect a tax from
Japanese buyers on behalf of the NTA. E-commerce businesses will be required to
register as an offshore service provider by July 2015 and indicate their
operating capacity as either B2B or a mix of B2B and B2C similar to current
regulations of the European Union.
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