Consumption Tax Act

In the case where a business operator that operates a tax-free shop has made, to a person eligible for tax-free purchase (meaning a non-resident prescribed in Article 6, paragraph (1), item (vi) (Definitions) of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949) who stays in Japan with the landing permission prescribed in Articles 14 through 18 (Permission for Landing) of the Immigration Control and Refugee Recognition Act (Cabinet Order No. 319 of 1951), who stays in Japan with the status of residence of "Diplomat" or "Official" in Appended Table I (1) of that Act or the status of residence of "Temporary Visitor" in Appended Table I (3) of that Act, or any other person specified by Cabinet Order; the same applies hereafter in this Article), a transfer (excluding a transfer on which consumption tax is not to be imposed under Article 6, paragraph (1)) ofof goods that are purchased by the method specified by Cabinet Order for the purpose of export (excluding goods specified by Cabinet Ministry of Finance Order that are as goods highly likely to be purchased by the method specified by Cabinet Order for for an unlawful purpose concerning consumption tax, and those purchased goods in the purpose case where the transfer of export (the purchased goods is one on which consumption tax is not to be imposed under Article 6, paragraph (1); hereinafter in a case specified by Cabinet Order, this Article referred to as "tax-exempt goods") (limited to the case where the total amount of consideration prescribed in Article 28, paragraph (1) pertaining to the transfer of those goods tax-exempt goods transferred to that person eligible for tax-free purchase at the same tax-free shop on the same day is equal to or more than the amount specified by Cabinet Order), and that person eligible for tax-free purchase has obtained, as provided by Cabinet Order, the confirmation of the director-general of a customs house as to the export of those tax-exempt goods (limited to where the confirmation is obtained within 90 days from the day of purchase), consumption tax is exempted for the transfer of those tax-exempt goods.

The provisions of the preceding paragraph do not apply where theA business operator that operates the tax-free shop that made the transfer referred to in that the preceding paragraph does not retain documents or must, as provided by Cabinet Order, provide to the Commissioner of the National Tax Agency without delay the electronic or magnetic records record pertaining to that transfer (meaning an electronic or magnetic recordsrecord prescribed in Article 2, item (iii) (Definitions) of the Act on Special Provisions concerning Preservation Methods for Books and Documents Related to National Tax Prepared by Means of Computers (Act No. 25 of 1998)) proving that; the goods were purchased by a person eligible for tax-free purchasesame applies in the following paragraph) that is specified by the method prescribedCabinet Order (hereinafter in that paragraph; provided, however, that this does not apply where consumption tax has already been collected through the application ofArticle referred to as "purchase record information"). In this case, the main clauseCommissioner of the following paragraph or the main clause of paragraph (5) (including as applied mutatis mutandis pursuantNational Tax Agency who has been provided with the purchase record information is to paragraph (6)), or where that business operator has proved, as provided by Cabinet Order, provide that it was unablepurchase record information to retain those documents or electronic or magnetic records due tothe director-general of a disaster or other unavoidable circumstancescustoms house without delay.

Where a person eligible for tax-free purchase who purchasedthe director-general of a customs house has made the goods prescribed confirmation referred to in paragraph (1) at a tax-free shop bybased on the method prescribed in that paragraph does not export those goods bypurchase record information provided under the dayprovisions of departure from Japan (or, where that person ceasesthe preceding paragraph, the director-general is to be a person eligible for tax-free purchase, by the day on which that person ceases, as provided by Cabinet Order, provide to be so), the director-generalCommissioner of the customs house having jurisdiction over the portNational Tax Agency, for each piece of departure (or, where that person ceases to be a person eligible for tax-free purchase, the district director having jurisdiction overpurchase record information and without delay, an electronic or magnetic record recording a statement to the place ofeffect that person's address or residence at the time of ceasing to be so; the same applies hereafterdirector-general has made that confirmation (hereinafter referred to in this paragraph) is to immediately collect from that person consumption tax equivalent to and the amount of consumption tax exempted under paragraph (1) forfollowing paragraph as "customs confirmation information"). In this case, the transferCommissioner of those goods, except where that personthe National Tax Agency who has obtainedreceived the approval of that director-generalprovision of the customs house for not exporting the goods because they were lost dueconfirmation information is to a disaster or other unavoidable circumstances; provided, however,, as provided by Cabinet Order, provide that this does not apply where a fact falling undercustoms confirmation information without delay to the case prescribed in the main clause ofbusiness operator that operates the preceding paragraph has already arisen, or where consumption tax has been collected through the application oftax-free shop that provided the main clause of paragraph (5) (including as applied mutatis mutandis pursuant to paragraph (6))purchase record information pertaining to that customs confirmation information.

Goods prescribed inThe provisions of paragraph (1) that a person eligible for tax-free purchase has purchased at ado not apply where the business operator that operates the tax-free shop by that made the method prescribed transfer referred to in that paragraph mustdoes not be transferred or acquired in Japan (including, upon being commissioned to carry out such transfer or acquisition or forretain, as provided by Cabinet Order, the purchase record information that it provided under the purposeprovisions of mediating it, possessing those goods, or causing a person commissionedthe first sentence of paragraph (2) with regard to carry out thethat transfer or a person who mediates it to possess them forand the customs confirmation information provided under the purposeprovisions of transfer; the same applies hereafter through paragraph (6))second sentence of the preceding paragraph; provided, however, that this does not apply where, in a case in which there are unavoidable circumstances for the transfer or acquisition of those goods, the approval of the district director having jurisdiction over the place where those goods are located has been obtained that business operator has proved that it was unable to retain that purchase record information and that customs confirmation information due to a disaster or other unavoidable circumstances.

When goods prescribed in the preceding paragraph have been transferred or acquired in Japan,A person eligible for tax-free purchase who has obtained the district director is to immediately collect consumption tax equivalent toconfirmation of the director-general of the amount of consumption tax exempted undercustoms house referred to in paragraph (1) for the transfer of those goods, from the(including a person who obtained the approval under the provisohas ceased to the preceding paragraph if there is suchfall under the category of a person, or, where the transfer or acquisition was made without obtaining that approval, from eligible for tax-free purchase after making a purchase at a tax-free shop by the person who transferred those goods (including a person who caused them to be possessed asmethod specified by Cabinet Order prescribed in the main clause of the precedingthat paragraph; the same applies in the following paragraph); provided, however, that this does not apply where a fact falling under the case prescribed in must, without delay, export the main clause of paragraph (2) has already arisen, or where consumption taxtax-exempt goods for which that confirmation has been collected through the application of the main clause of paragraph (3)obtained.

Where goods prescribed in paragraph (4) have been transferred or acquired in Japan withouttax-exempt goods for which the confirmation of the director-general of the approval under the provisocustoms house referred to in paragraph (4), the person who acquired those goods (including a person who possessed them as prescribed in1) has been obtained are no longer to be exported, the main clausedirector-general of that paragraph) is jointly and severally liable withthe customs house is to immediately collect, from the person who transferred those goods to pay eligible for tax-free purchase who obtained that confirmation, consumption tax equivalent to the amount of consumption tax exempted under paragraph (1) for the transfer of those goods. In this case, the provisions of the precedingthat paragraph apply mutatis mutandis tofor the collectiontransfer of the consumption taxthose tax-exempt goods.

A tax-free shop prescribed in paragraphs (1) through (45) is a sales outlet operated by a business operator that satisfies all of the following requirements (excluding a business operator exempted from the obligation to pay consumption tax under the main clause of paragraph (1) of the following Article) (excluding a temporary sales outlet prescribed in paragraph (9)), for which permission has been obtained , as provided by Cabinet Order, from the district director having jurisdiction over the business operator's place for tax payment as a sales outlet capable of transferring to persons eligible for tax-free purchase goods prescribed in paragraph (1)tax-exempt goods that are purchased by the method specified by Cabinet Order prescribed in that paragraph (1):

the business operator is not a person whose permission for a tax-free shop has been revoked pursuant to the following paragraph (excluding the part pertaining to item (iii)) and for whom three years have not elapsed from the day of the revocation, and there are no other circumstances by which the business operator is found to be particularly unsuitable as a business operator that operates a tax-free shop.

The district director may revoke the permission under the preceding paragraph for a tax-free shop if the business operator that operates the tax-free shop prescribed in that paragraph has violated the provisionsfalls under any of laws and regulations concerning consumption tax, or if its facilities and other conditions are found to be particularly unsuitable for a tax-free shop prescribedthe cases set forth in that paragraphthe following items.

where the provisions of laws and regulations concerning consumption tax have been violated;

where the procedures and other conditions for transferring tax-exempt goods at that tax-free shop are found to be particularly inappropriate;

where it is found that there is an impediment to the confirmation of the director-general of the customs house referred to in paragraph (1) due to deficiencies in or false records in the purchase record information provided under the provisions of the first sentence of paragraph (2), or other circumstances.

Where a business operator that intends to establish a temporary sales outlet (meaning a sales outlet established for a period fixed at seven months or less for the purpose of transferring goods prescribed in paragraph (1)tax-exempt goods to persons eligible for tax-free purchase) (limited to a business operator that operates a tax-free shop prescribed in paragraph (7)) and that has obtained the approval under the following paragraph submits, by the day before the day of establishing that temporary sales outlet, to the district director having jurisdiction over its place for tax payment a written notification stating the period during which it intends to establish that temporary sales outlet and other matters specified by Ministry of Finance Order, with the documents specified by Ministry of Finance Order attached, the provisions of paragraphs (1) through (45) apply, only for that period, deeming that temporary sales outlet to be a tax-free shop prescribed in paragraph (7).

The director-general of a customs house may, as provided by Cabinet Order, delegate part of the authority pertaining to the approval and collection under the main clauseprovisions of paragraph (36), and of the authority based on the provisions of laws and regulations concerning the consumption tax to be immediately collected pursuantthat is to the main clause of that paragraphbe collected, to the head of a branch office of the customs house or other customs house office.

Matters concerning permission for tax-free shops prescribedIn addition to what is provided for in paragraph (7), and otherthe preceding paragraphs, matters necessary for the application of the preceding paragraphs,provisions of this Article are specified by Cabinet Order.

Place for Tax Payment in Cases Such as Transfer Where Tax-Exempt Goods Confirmed by the Director-General of Goods Purchased at a Tax-Free Shopthe Customs House Are Not Exported

The place for tax payment of consumption tax on a transfer of tax-exempt goods prescribed in Article 8, paragraph (1) that falls under Article 8, paragraph (6) is the main clause place where the confirmation of the director-general of the customs house referred to in Article 8, paragraph (3) is 1) was obtained (or, in the port of departure case where the person eligible for tax-free purchase prescribed in that paragraph, or Article 8, paragraph (6) leaves Japan from a place other than the location of place where that confirmation was obtained, the domicile or residenceport of departure).

The place for tax payment of consumption tax on a transfer of goods that falls under the main clause of Article 8, paragraph (5) or paragraph (6) of that Article is the location of the goods concerned in the transfer or acquisition, or in the approval, at the time of the transfer or acquisition prescribed in those provisions (or, where the approval under the proviso to paragraph (4) of that Article has been given, at the time the approval was given).

In the case where, with respect to matters recorded in an electronic or magnetic record retained by a business operator (meaning the electronic or magneticpurchase record information prescribed in Article 8, paragraph (2) and other records specified by Cabinet Order; the same applies hereinafter in this paragraph), a return filed after the due date prescribed in Article 18, paragraph (2) (Filing of a Return after the Due Date) of the Act on General Rules for National Taxes or an amended return prescribed in Article 19, paragraph (3) (Amended Return) of that Act is filed for consumption tax, a reassessment is made under the provisions of Article 24 (Reassessment) or Article 26 (Reassessment of Previous Reassessment) of that Act, or a determination is made under the provisions of Article 25 (Determination) of that Act (hereinafter in this paragraph referred to as "return filed after the due date, etc."), and the case falls under Article 68, paragraph (1) or (2) (Heavy Penalty Tax) of that Act, the amount of heavy penalty tax under paragraphs (1) and (2) of that Article is, notwithstanding those provisions, the amount obtained by adding to the amount calculated under those provisions the amount calculated by multiplying the amount of tax that is to be the basis prescribed in those provisions (if there are facts that are to be the basis for calculating that tax other than the facts relating to matters recorded in that electronic or magnetic record that give rise to that return filed after the due date, etc. (limited to those concerning facts that were concealed or disguised; hereinafter in this paragraph referred to as "fact relating to matters recorded in an electronic or magnetic record"), limited to the amount calculated, as provided by Cabinet Order, as the amount of tax based on the facts relating to matters recorded in an electronic or magnetic record) by 10 percent.

when a person, in violation of the provisions without justifiable grounds and in violation of the main clauseprovisions of Article 8, paragraph (45), has transferred or receivedfailed to export the tax-exempt goods set outreferred to in that paragraph without obtaining the approval under the proviso to that paragraph (including holding the goods in order to be entrusted with, or to broker, the transfer or receipt, or having a person entrusted with the transfer or a person brokering it hold the goods for the purpose of transfer);.