Friday, May 29, 2015

Japanese tax amendments to impact B2B online transactions

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.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

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