An overview by Nagashima Ohno & Tsunematsu
On 2 February 2024, the government of Japan proposed new tax laws that would require certain online platform companies to pay Japanese consumption tax (JCT) as if they were the actual sellers of digital services that are provided from outside of Japan.
These rules would apply to platform operators that have sales of more than 5 billion Japanese yen from digital services in Japan. If adopted, companies will need to start keeping track of and potentially paying JCT starting from 1 April 2025.
Under these new rules, these platform operators are treated as if they are the ones providing the services for the purpose of JCT, although there are some exceptions for digital services aimed at businesses. It is expected that the major platform operators will be identified by 31 December 2024, and they will need to set up systems to calculate and collect JCT on the digital services that are subject to this tax.
Takashi Saida from Nagashima Ohno & Tsunematsu provides an overview and analysis of this new requirement in further detail here.
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