Order for Enforcement of the Consumption Tax Act

The amount calculated as provided by Cabinet Order as prescribed in Article 30, paragraph (1) of the Act is the amount obtained by multiplying by 78/100 the total of the amounts specified in each of the following items according to the category of taxable purchases listed in that item (excluding those that fall under specified taxable purchases; the same applies hereinafter in this Chapter):

a taxable purchase for which a qualified invoice (meaning a qualified invoice prescribed in Article 57-4, paragraph (1) of the Act; the same applies hereinafter) has been delivered: the portion of the amount of consumption tax, etc. listed in item (v) of that paragraph stated in that qualified invoice that pertains to that taxable purchase;

a taxable purchase for which a qualified simplified invoice (meaning a qualified simplified invoice prescribed in Article 57-4, paragraph (2) of the Act; the same applies hereinafter) has been delivered: the portion pertaining to that taxable purchase of the amount of consumption tax, etc. listed in item (v) of that paragraph stated in that qualified simplified invoice (where that amount of consumption tax, etc. is not stated in that qualified simplified invoice, the amount calculated as that amount of consumption tax, etc. by a method conforming to the method prescribed in Article 70-10);

a taxable purchase for which an electronic or magnetic record listed in Article 30, paragraph (9), item (ii) of the Act (meaning an electronic or magnetic record prescribed in that paragraph; the same applies hereinafter in this paragraph, Article 49 and Article 50) has been provided: the portion pertaining to that taxable purchase of the amount of consumption tax, etc. listed in Article 57-4, paragraph (1), item (v) or paragraph (2), item (v) of the Act recorded in that electronic or magnetic record;

a taxable purchase for which a document listed in Article 30, paragraph (9), item (iii) of the Act, or an electronic or magnetic record pertaining to the matters to be stated in that document, has been prepared: the portion pertaining to that taxable purchase of the amount of consumption tax, etc. listed in Article 49, paragraph (4), item (vi) stated in that document or recorded in that electronic or magnetic record;

a taxable purchase for which delivery of a document listed in Article 30, paragraph (9), item (iv) of the Act, or provision of an electronic or magnetic record pertaining to the matters to be stated in that document, has been received: the portion pertaining to that taxable purchase of the amount of consumption tax, etc. listed in Article 49, paragraph (6), item (v) stated in that document or recorded in that electronic or magnetic record;

a taxable purchase listed in Article 49, paragraph (1), item (i), (a) through (d): the amount calculated by multiplying the amount of consideration paid for taxable purchases (meaning the amount of consideration paid for taxable purchases prescribed in Article 30, paragraph (8), item (i), (d) of the Act; the same applies hereinafter in this Chapter) by 10/110 (8/108 where that taxable purchase pertains to a taxable transfer, etc. of assets subject to the reduced rate received from another person) (where a fraction of less than one yen arises in that amount, the amount after rounding down or rounding off that fraction).

Where a business operator, with respect to the taxable purchases listed in the items of the preceding paragraph for its taxable period, has stated in the books prescribed in Article 30, paragraph (7) of the Act, each time it makes a taxable purchase, the amount calculated by multiplying the amount of consideration paid for taxable purchases by 10/110 (8/108 where that taxable purchase pertains to a taxable transfer, etc. of assets subject to the reduced rate received from another person) (where a fraction of less than one yen arises in that amount, the amount after rounding down or rounding off that fraction), then, notwithstanding the preceding paragraph, it may treat the amount calculated by multiplying the total of those amounts by 78/100 as the consumption tax on taxable purchases prescribed in Article 30, paragraph (1) of the Act.

With regard to the calculation of the consumption tax on the tax base amount classified by each different tax rate listed in Article 45, paragraph (1), item (ii) of the Act for its taxable period, a business operator to which paragraph (5) of that Article does not apply may, notwithstanding paragraph (1), except where it is subject to the preceding paragraph, treat as the consumption tax on taxable purchases prescribed in Article 30, paragraph (1) of the Act the total of the amounts calculated by multiplying the total, classified by each different tax rate, of the amounts of consideration paid for taxable purchases pertaining to those among the taxable purchases made in Japan during that taxable period that are listed in the items of paragraph (1), by 7.8/110 for the portion pertaining to taxable transfers, etc. of assets (excluding those that fall under specified transfers, etc. of assets and taxable transfers, etc. of assets subject to the reduced rate) and by 6.24/108 for the portion pertaining to taxable transfers, etc. of assets subject to the reduced rate, respectively.

The provisions of the preceding paragraph apply mutatis mutandis to the amount of consumption tax pertaining to the taking out of a postal item, where a business operator that is the addressee of the postal item under Article 7, paragraph (1) (Payment, etc. of National Consumption Tax on Postal Items) of the Act on Collection, etc. of National Consumption Tax Imposed on Imported Goods (Act No. 37 of 1955) is subject to the application of Article 77, paragraph (6) (Payment, etc. of Customs Duty on Postal Items) of the Customs Act as applied mutatis mutandis pursuant to Article 7, paragraph (10) of the Act on Collection, etc. of National Consumption Tax Imposed on Imported Goods.

A business operator seeking to obtain the approval prescribed in Article 30, paragraph (3), item (ii) of the Act must submit to the district director having jurisdiction over its place for tax payment a written application stating the details of the method of calculating the ratio equivalent to the taxable sales ratio prescribed in that paragraph that it intends to use (referred to as the "ratio equivalent to the taxable sales ratio" in paragraphs (2), (3) and (6)) and other matters specified by Ministry of Finance Order.

Where a written application under the preceding paragraph is submitted, the district director is to examine it without delay and either approve the calculation of the amount listed in Article 30, paragraph (2), item (i), (b) of the Act (referred to as "deductible tax on common purchases" in paragraphs (3), (5) and (6)) using the ratio equivalent to the taxable sales ratio pertaining to the application, or, where the district director finds that the ratio equivalent to the taxable sales ratio pertaining to the application has not been reasonably calculated, reject the application.

Where, after giving the approval under the preceding paragraph, the district director finds that special circumstances have arisen that make it inappropriate to calculate deductible tax on common purchases using the ratio equivalent to the taxable sales ratio pertaining to that approval, the district director may rescind that approval.

When the district director makes a disposition under the preceding two paragraphs, the district director is to notify the business operator pertaining to the disposition to that effect in writing.

Where a disposition under paragraph (3) has been made, the effect of that disposition arises with respect to the calculation of deductible tax on common purchases for each taxable period on or after the taxable period that includes the day on which the disposition was made.

Where a written application under paragraph (1) is submitted by the last day of a taxable period for which it is intended to calculate deductible tax on common purchases using the ratio equivalent to the taxable sales ratio, and the approval under paragraph (2) is given during the period from the day following that day until the day on which one month has elapsed from that day, Article 30, paragraph (3) of the Act applies on the basis that the approval is deemed to have been given on the last day of that taxable period.

The provisions of Article 19 apply mutatis mutandis to the calculation of the amount of refund, etc. of consideration for sales prescribed in Article 30, paragraph (6) of the Act. In this case, the phrase ", in the base period" in Article 19 is deemed to be replaced with ", in the taxable period prescribed in Article 30, paragraph (2) of the Act", the phrase "this Article, Article 22, Article 23 and Article 25-4, paragraph (1)" with "this Article", the phrase "the amount listed in Article 9, paragraph (2), item (i), (a) of the Act" with "the amount of refund, etc. of consideration for sales prescribed in Article 30, paragraph (6) of the Act", and the phrase "during that base period" with "during that taxable period".