Nagamine & Mishima Consulting

Accounting practice since 1989

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Consumption Tax in Japan

Consumption Tax in Japan
_How to prepare for consumption tax audit

When reviewing if your consumption tax is properly handled or not, there are 2 questions you will need to ask yourself.

  1. Is your exempt transaction on sales correctly declared?
  2. Is your credit for taxable purchases correctly declared?

Whether or not your exempt transaction on sales is correctly handled will depend on how it is treated in the initial startup of your business or at the time new transaction comes into place. Careful confirmation on tax circumstance is critical in the beginning stage so as not to accumulate falsely handled transactions.

On the other hand, credit for taxable purchases will be reliant on how accurately your accountant is processing them regularly. In the past, we have seen cases when we succeed from other accounting offices which do not specialize in foreign companies mishandle fees such as oversea business trip expenses, telecommunication expenses and allocation expenses from related parties. Accountants whose experience is concentrated on Japanese domestic companies may not be able to foresee transactions, ultimately overstating total credit for taxable purchases. Below you will be able to see some examples of accounts you will need to look out for when dealing with consumption tax in Japan.

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People are Talking

  • “We are Japanese company that imports and sells ice cream of Glacio, Belgium Company. We already have a ten-years of relationship with N & M.

    We are helped a lot not just for their daily accurate accounting, but for their fast and exact response to our company in Japan that is also extended to local office in Belgium.

    In addition to that, as their staffs always handle and consult our accounting or legal matters positively, N & M is a very reliable accounting office.”

    Ryuji Nozaki

    Glacio Ice Cream Japan K.K.