Consumption Tax Act

Where any of the transfers of assets set forth in the following items is conducted via a digital platform, and the consideration for it is received via a platform operator that provides that digital platform and that has been designated by the Commissioner of the National Tax Agency pursuant to the provisions of the following paragraph (hereinafter in this Article referred to as a "Type 2 platform operator"), the provisions of this Act apply deeming that the Type 2 platform operator has made that transfer of assets:

a transfer of assets conducted in Japan by a foreign business operator (including transfers, etc. of assets conducted incidentally thereto, and excluding those that fall under a transfer of specified low-value assets);

a transfer of specified low-value assets made by a business operator.

The Commissioner of the National Tax Agency is to designate a platform operator, as a business operator deemed under the preceding paragraph to have made the transfers of assets set forth in the items of that paragraph, if, in the taxable period of the platform operator, the total of the amounts of consideration for the transfers of assets set forth in the items of the preceding paragraph that are conducted via the digital platform it provides, 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 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 Type 2 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 the taxable period prescribed 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 Type 2 platform operator on the last day of that taxable period.

When the Commissioner of the National Tax Agency has designated a Type 2 platform operator under paragraph (2), the Commissioner is to notify that Type 2 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 Type 2 platform operator and other matters specified by Cabinet Order.

A Type 2 platform operator that has received the notice under the preceding paragraph is to promptly notify the business operator pertaining to the transfers of assets set forth in the items of paragraph (1) to which the provisions of that paragraph are to apply that the provisions of that paragraph are to apply, and the date thereof.

A Type 2 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 Type 2 platform operator may, where the total of the amounts of consideration for the transfers of assets set forth in the items of paragraph (1) to which the provisions of that paragraph apply 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.

When there has been an application under the preceding paragraph, the Commissioner of the National Tax Agency is to examine it without delay and lift the designation pertaining to the application, or, where the Commissioner finds that the case does not fall under the case set forth in that paragraph, dismiss the application.

A business operator whose designation as a Type 2 platform operator has been lifted pursuant to the preceding paragraph is deemed to continue to be a Type 2 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 Type 2 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 Type 2 platform operator under paragraph (2) if the Commissioner finds that the Type 2 platform operator falls under any of the following facts:

it is found that the business pertaining to a digital platform to which paragraph (1) applies has been discontinued;

in the case where no return filed by the due date prescribed in Article 17, paragraph (2) (Filing of a Return by the Due Date) of the Act on General Rules for National Taxes has been submitted with respect to consumption tax, it is found that there is no justifiable reason for the non-submission;

it currently has arrears of national taxes and the collection of the amount of taxes in arrears is extremely difficult;

beyond what is set forth in the preceding three items, it is found that there is an obstacle to ensuring the collection of consumption tax.

When the Commissioner of the National Tax Agency has lifted the designation of a Type 2 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 Type 2 platform operator is to promptly notify the business operator pertaining to the transfers of assets set forth in the items of paragraph (1) to which the provisions of that paragraph 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 Type 2 platform operator to which paragraph (1) applies, in Article 9, paragraph (1), the phrase "and a seller of specified low-value assets" is deemed to be replaced with ", a seller of specified low-value assets and a Type 2 platform operator prescribed in Article 15-3, 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 Type 2 platform operator prescribed in Article 15-3, paragraph (1) to which that paragraph applies".

A Type 2 platform operator to which paragraph (1) applies may, after obtaining in advance the consent of the foreign business operator referred to in item (i) of that paragraph, apply the provisions of Article 30 by deeming that, of the taxable purchases made in Japan by that foreign business operator and the taking of taxable goods out of a bonded area made by that foreign business operator, those required solely for the transfers of assets set forth in that item that are deemed under the provisions of that paragraph to have been made by the Type 2 platform operator were made by that Type 2 platform operator.

A Type 2 platform operator must attach to the return under Article 45, paragraph (1) for its taxable period 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 Type 2 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.