Consumption Tax Act

Where the supply of telecommunications services conducted in Japan by a foreign business operator (excluding that which falls under the provision of telecommunications services for businesses; the same applies hereafter in this Article) is conducted via a digital platform (meaning a venue constructed through information processing using computers that is intended for use by an unspecified and large number of persons, and that is ordinarily provided via a telecommunications line to an unspecified and large number of persons for displaying information on the supplytransfers, etc. of telecommunications servicesassets so that persons other than the person providing the venue can supply telecommunications services conduct transfers, etc. of assets via the venue; the same applies hereafter in this Article and the following Article), and the consideration for it is received via a specified Type 1 platform operator (meaning, among business operators that provide that digital platform (referred to as "platform operators" in the following paragraph and the following Article), one that has been designated by the Commissioner of the National Tax Agency pursuant to the provisions of that paragraph; hereinafter in this Article), the provisions of this Act apply deeming that the specifiedType 1 platform operator has supplied those telecommunications services.

The Commissioner of the National Tax Agency is to designate a platform operator as a business operator deemed under the preceding paragraph to have supplied telecommunications services if, in the taxable period of the platform operator, the total of the amounts of consideration for the supply of telecommunications services conducted in Japan by foreign business operators via the digital platform it provides (meaning the amount of all money, or anything other than money, or rights or other economic benefits received or to be received as consideration, and including, where there is an amount equivalent to the amount of consumption tax to be imposed on that supply of telecommunications servicesa transfer, etc. of assets and to the amount of local consumption tax to be imposed with that amount of consumption tax as the tax base (excluding an amount equivalent to the amount of accessory taxes on those amounts of tax), that equivalent amount; the same applies in paragraph (7) and the following Article) that is received via that platform operator (or, where that taxable period is less than one year, the amount calculated by dividing that total by the number of months in that taxable period (calculated according to the calendar, with a fraction of less than one month counted as one month; the same applies in that paragraph and the following Article) and multiplying the result by 12) exceeds 5 billion yen. In this case, the designation takes effect on the first day of the month following the month that includes the day on which six months have elapsed from the deadline for filing of the written notification under the following paragraph (or, where the written notification has not been submitted by that deadline, from the day on which the notice under paragraph (4) pertaining to the designation was issued).

A person that is to be designated as a specified Type 1 platform operator under the preceding paragraph must submit to the Commissioner of the National Tax Agency, via the district director having jurisdiction over its place for tax payment, a written notification stating that fact and other matters specified by Ministry of Finance Order, by the deadline for filing of the return under Article 45, paragraph (1) for itsthe taxable period referred to in the preceding paragraph (or, where it has no obligation to file a return under that paragraph, the deadline for filing of the return under that paragraph that would apply if it had that obligation); provided, however, that this does not apply to a person that is a specifiedType 1 platform operator on the last day of that taxable period.

When the Commissioner of the National Tax Agency has designated a specified Type 1 platform operator under paragraph (2), the Commissioner is to notify that specified Type 1 platform operator to that effect in writing. In this case, the Commissioner of the National Tax Agency must promptly publish, as provided by Cabinet Order, the name of the digital platform pertaining to that specifiedType 1 platform operator and other matters specified by Cabinet Order.

A specifiedType 1 platform operator that has received the notice under the preceding paragraph is to promptly notify the foreign business operator pertaining to the supply of telecommunications services to which the provisions of paragraph (1) are to apply that the provisions of that paragraph are to apply, and the date thereof.

A specifiedType 1 platform operator must, when there has been a change in the matters published pursuant to paragraph (4), promptly submit a written notification to that effect to the Commissioner of the National Tax Agency via the district director having jurisdiction over its place for tax payment. In this case, the Commissioner of the National Tax Agency must promptly publish the matters that have changed, as provided by Cabinet Order.

A specifiedType 1 platform operator may, where the total of the amounts of consideration for the supply of telecommunications services to which paragraph (1) applies is 5 billion yen or less in every taxable period from its taxable period through the taxable period that includes the day on which three years have elapsed from the first day of that taxable period (hereinafter in this paragraph referred to as the "third-year taxable period") (or, where any of those taxable periods is less than one year, the amount calculated by dividing that total by the number of months in that taxable period and multiplying the result by 12), apply to have the designation under paragraph (2) lifted, by submitting to the Commissioner of the National Tax Agency via the district director having jurisdiction over its place for tax payment, by the deadline for filing of the return under Article 45, paragraph (1) for the third-year taxable period, a document stating that fact and other matters specified by Ministry of Finance Order.

A business operator whose designation as a specified Type 1 platform operator has been lifted pursuant to the preceding paragraph is deemed to continue to be a specifiedType 1 platform operator, and paragraph (1) applies, during the period from the day following the day on which the Commissioner of the National Tax Agency issued the notice under paragraph (12) until the last day of the month that includes the day on which six months have elapsed from that following day.

A specifiedType 1 platform operator must, when it has discontinued the business pertaining to a digital platform to which paragraph (1) applies, promptly submit a written notification to that effect to the Commissioner of the National Tax Agency via the district director having jurisdiction over its place for tax payment.

The Commissioner of the National Tax Agency may lift the designation of a specified Type 1 platform operator under paragraph (2) if the Commissioner finds that the specifiedType 1 platform operator falls under any of the following facts:

When the Commissioner of the National Tax Agency has lifted the designation of a specifiedType 1 platform operator pursuant to paragraph (8) or the preceding paragraph, or has dismissed an application pursuant to paragraph (8), the Commissioner is to notify the business operator subject to those dispositions to that effect in writing. In this case, when the Commissioner of the National Tax Agency has given the notice pertaining to the lifting of a designation, the Commissioner must promptly publish, as provided by Cabinet Order, the fact that the designation has been lifted and the date on which paragraph (1) ceases to apply.

A business operator that has received the notice under the preceding paragraph pertaining to the lifting of the designation of a specifiedType 1 platform operator is to promptly notify the foreign business operator pertaining to the supply of telecommunications services to which paragraph (1) will cease to apply that the provisions of that paragraph will cease to apply, and the date thereof.

For the application of Article 9, paragraph (1) and Article 37, paragraph (1) to a specified Type 1 platform operator to which paragraph (1) applies, in Article 9, paragraph (1), the phrase "excludingand a qualified invoice issuerseller of specified low-value assets" is deemed to be replaced with "excluding, a qualified invoice issuer seller of specified low-value assets and a specified Type 1 platform operator prescribed in Article 15-2, paragraph (1) to which that paragraph applies", and in Article 37, paragraph (1), the phrase "and a foreign business operator" is deemed to be replaced with ", a foreign business operator and a specifiedType 1 platform operator prescribed in Article 15-2, paragraph (1) to which that paragraph applies".

A specified Type 1 platform operator must attach to the return under Article 45, paragraph (1) for its taxable period (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 that pertains to that return; the same applies in paragraph (16) of the following Article) a detailed statement stating the amount to which paragraph (1) applies and other matters specified by Ministry of Finance Order.

In addition to what is provided for in the preceding paragraphs, the procedures in the case where a business operator succeeds, by merger or split, to the business pertaining to the digital platform of a specifiedType 1 platform operator, or acquires that business by transfer, and other matters necessary for the application of the provisions of this Article, are specified by Cabinet Order.