Consumption Tax Act

This Act is to prescribe, with regard to consumption tax, the subject of taxation, taxpayers, the method of calculating the amount of tax, and the procedures for filing returns, payment and refund, as well as the matters necessary to ensure the proper performance of the tax liability.

The revenue from consumption tax is to be used, in addition to as provided for in the Local Allocation Tax Act (Act No. 211 of 1950), each fiscal year to cover the expenses required for social security benefits for pensions, medical care and long-term care that have been established as systems, and for measures to address the declining birthrate.

In this Act, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

Japan: the place where this Act is enforced;

bonded area: a bonded area prescribed in Article 29 (Types of Bonded Areas) of the Customs Act (Act No. 61 of 1954);

individual business operator: an individual who carries on a business;

business operator: an individual business operator and a corporation;

foreign business operator: an individual business operator who is a non-resident prescribed in Article 2, paragraph (1), item (v) (Definitions) of the Income Tax Act (Act No. 33 of 1965), and a foreign corporation prescribed in Article 2, item (iv) (Definitions) of the Corporation Tax Act (Act No. 34 of 1965);

merging corporation: a corporation that continues to exist after a merger, or a corporation established by a merger;

merged corporation: a corporation that has ceased to exist through a merger;

splitting corporation: a corporation that has effected a corporate split;

successor corporation in a company split: a corporation that has succeeded to the business of a splitting corporation through a corporate split;

association or foundation without legal personality: an association or foundation that is not a corporation and that provides for a representative or administrator;

qualified invoice issuer: a business operator that has received registration under Article 57-2, paragraph (1);

transfer, etc. of assets: the transfer and lending of assets and the provision of services conducted for consideration as a business (including the transfer of assets in lieu of performance of an obligation and other acts specified by Cabinet Order as being similar to the transfer or lending of assets or the provision of services conducted for consideration);

specified transfer, etc. of assets: provision of telecommunications services for businesses and provision of specified services;

supply of telecommunications services: among transfers, etc. of assets, the provision of copyrighted works conducted via a telecommunications line (meaning works prescribed in Article 2, paragraph (1), item (i) (Definitions) of the Copyright Act (Act No. 48 of 1970); including transactions pertaining to permission to use those works) and any other provision of services conducted via a telecommunications line (excluding the provision of services that mediate the communications of others by means of telephone, telegraph or other communications facilities), other than the provision of services conducted incidentally to another transfer, etc. of assets, such as notification of the result of another transfer, etc. of assets;

provision of telecommunications services for businesses: among the supply of telecommunications services conducted by a foreign business operator, that for which the persons receiving the provision of services are ordinarily limited to business operators, judging from the nature of the services pertaining to that supply of telecommunications services or the terms and conditions of the transaction pertaining to that provision of services;

provision of specified services: among transfers, etc. of assets, the provision of services specified by Cabinet Order, such as theatrical services, that is conducted by a foreign business operator (excluding that which falls under the supply of telecommunications services);

taxable transfer, etc. of assets: transfers, etc. of assets other than those on which consumption tax is not to be imposed under Article 6, paragraph (1);

taxable transfer, etc. of assets subject to the reduced rate: among taxable transfers, etc. of assets, those set forth in Appended Table 1;

foreign goods: foreign goods prescribed in Article 2, paragraph (1), item (iii) (Definitions) of the Customs Act (including goods deemed to have been permitted for export under Article 73-2 (Goods Deemed to Have Been Permitted for Export) of that Act);

taxable goods: among foreign goods taken out of a bonded area (excluding correspondence prescribed in Article 3 (Objects of Taxation) of the Customs Act; the same applies in Article 4), those other than goods on which consumption tax is not to be imposed under Article 6, paragraph (2);

taxable goods subject to the reduced rate: among taxable goods, those set forth in Appended Table 1-2;

taxable purchase: for a business operator, to acquire or borrow assets from another person, or to receive the provision of services from another person (excluding the provision of services for which salary, etc. prescribed in Article 28, paragraph (1) (Salary Income) of the Income Tax Act is the consideration), as a business (limited to those that would fall under a taxable transfer, etc. of assets if that other person were to transfer or lend those assets, or provide those services, as a business, other than those that fall under a transfer, etc. of assets set forth in the items of Article 7, paragraph (1) and those for which consumption tax is exempted under Article 8, paragraph (1) or any other provision of an Act or treaty);

business year: a business year prescribed in Articles 13 and 14 (Business Year) of the Corporation Tax Act (for the national government, local governments and other corporations to which the provisions of those Articles do not apply, a fixed period specified by Cabinet Order);

base period: for an individual business operator, the year before the previous year, and for a corporation, the second business year preceding its business year (for a corporation for which that second preceding business year is less than one year, the period combining each business year that began during the period from the day before the day two years before the first day of its business year until the day on which one year has elapsed from that day).

inventory: goods, products, semi-finished products, work in process, raw materials and other assets specified by Cabinet Order;

adjustment-target fixed asset: buildings, structures, machinery and equipment, ships, aircraft, vehicles and transport equipment, tools, fixtures and fittings, mining rights and other assets specified by Cabinet Order as those whose value is not small;

final return, etc.: a return under Article 45, paragraph (1) (including 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 (Act No. 66 of 1962) that pertains to that return) and a return under Article 46, paragraph (1);

special return: a return under Article 47, paragraph (1) (limited to the case of paragraph (3) of that Article, and including a return filed after the due date prescribed in Article 18, paragraph (2) of the Act on General Rules for National Taxes that pertains to that return);

accessory tax: an accessory tax as prescribed in Article 2, item (iv) (Definitions) of the Act on General Rules for National Taxes;

interim payment: the amount of consumption tax to be paid pursuant to Article 48 (where, with respect to that amount, an amended return prescribed in Article 19, paragraph (3) (Amended Return) of the Act on General Rules for National Taxes has been submitted, or a reassessment has been made under Article 24 (Reassessment) or Article 26 (Reassessment of Previous Reassessment) of that Act, the amount of consumption tax after that return or reassessment).

In this Act, "lending of assets" includes the creation of rights pertaining to assets and all other acts of causing another person to use assets (excluding those acts that fall under the supply of telecommunications services).

In this Act, "borrowing of assets" includes the creation of rights pertaining to assets and all other acts of using the assets of another person (excluding those acts that fall under the supply of telecommunications services received from another person).

In this Act, "inheritance" includes a universal bequest, "heir" includes a universal legatee, and "decedent" includes a person who has made a universal bequest.

An association or foundation without legal personality is deemed to be a corporation, and the provisions of this Act (excluding Articles 12-2 and 46-2 and Appended Table 3) apply to it.