Consumption Tax Act

in the case where a taxable purchase is made in Japan: the day on which that taxable purchase was made;

in the case where a specified taxable purchase is made in Japan: the day on which that specified taxable purchase was made;

in the case where a return under Article 47, paragraph (1) (excluding the case under paragraph (3) of that Article) or a return under paragraph (2) of that Article has been submitted for taxable goods taken out of a bonded area: the day on which the taxable goods relating to that return (referred to in paragraph (6) as "taxable goods under a general return") were taken;

in the case where a special return has been submitted for taxable goods taken out of a bonded area (including the case where a determination (meaning a determination under Article 25 (Determination) of the Act on General Rules for National Taxes; the same applies hereinafter in this item) has been made with respect to the amount set forth in Article 47, paragraph (1), item (i) or (ii) that is to be stated in that special return; the same applies hereinafter): the day on which that special return was submitted or the day on which notice was received of the determination relating to that return (hereinafter referred to as a "determination on a special return").

In the case referred to in the preceding paragraph, where the taxable sales in the taxable period prescribed in that paragraph exceed 500 million yen, or where the taxable sales ratio in that taxable period is less than 95 percent, the total of the amount of consumption tax on taxable purchases, the amount of consumption tax on specified taxable purchases, and the amount of consumption tax imposed or to be imposed on taxable goods relating to the taking out of a bonded area prescribed in that paragraph, which are deducted under the provisions of that paragraph (hereinafter in this Chapter referred to as the "amount of tax on taxable purchases, etc."), is, notwithstanding the provisions of that paragraph, the amount calculated by the method specified in each of the following items according to the category of case set forth in that item.

in the case where, with respect to taxable purchases and specified taxable purchases made in Japan during that taxable period and taxable goods relating to the taking out of a bonded area prescribed in the preceding paragraph in that taxable period, it is clear which are required solely for taxable transfers, etc. of assets, which are required solely for transfers, etc. of assets other than taxable transfers, etc. of assets (referred to in this item as "other transfers, etc. of assets"), and which are required commonly for taxable transfers, etc. of assets and other transfers, etc. of assets: the method of adding the amount set forth in (b) to the amount set forth in (a):

the total amount of the amount of tax on taxable purchases, etc. relating to taxable purchases, specified taxable purchases and taxable goods required solely for taxable transfers, etc. of assets;

the amount calculated by multiplying the total amount of the amount of tax on taxable purchases, etc. relating to taxable purchases, specified taxable purchases and taxable goods required commonly for taxable transfers, etc. of assets and other transfers, etc. of assets by the taxable sales ratio;

in cases other than the case set forth in the preceding item: the method of calculating by multiplying the total amount of the amount of tax on taxable purchases, etc. in that taxable period by the taxable sales ratio.

In the case set forth in item (i) of the preceding paragraph, where there is a ratio equivalent to the taxable sales ratio prescribed in (b) of that item, which is the basis for calculating the amount set forth in (b) of that item (where that ratio is calculated separately for each different type of business conducted by the business operator or for each different type of selling expenses, general and administrative expenses or other expenses relating to that business, each ratio so calculated separately; the same applies hereinafter in this paragraph) that meets all of the following requirements, then for the taxable periods on or after the taxable period that includes the day on which the business operator received the approval prescribed in item (ii), the amount set forth in (b) of that item is, notwithstanding the provisions of item (i) of the preceding paragraph, the amount calculated using that ratio in place of that taxable sales ratio; provided, however, that this does not apply to taxable periods on or after the taxable period that includes the day on which a written notification stating the intention to discontinue calculating using that ratio is submitted.

that the ratio is reasonably calculated in accordance with the type of business conducted by the business operator or the type of selling expenses, general and administrative expenses or other expenses relating to that business;

that the business operator has received the approval of the district director having jurisdiction over its place for tax payment for calculating the amount set forth in item (i), (b) of the preceding paragraph using that ratio.

A business operator that falls under the case set forth in paragraph (2), item (i) may, notwithstanding the provisions of that paragraph, with respect to taxable purchases and specified taxable purchases made in Japan during that taxable period and taxable goods relating to the taking out of a bonded area prescribed in paragraph (1) in that taxable period, calculate the total amount of the amount of tax on taxable purchases, etc. deducted under the provisions of paragraph (1), in place of the method specified in that item, by the method specified in paragraph (2), item (ii).

In the case referred to in paragraph (2) or the preceding paragraph, a business operator that has decided to calculate by the method specified in paragraph (2), item (ii) may not calculate by the method specified in item (i) of that paragraph unless it is a taxable period after that method has been continuously applied in each taxable period that begins during the period from the first day of the taxable period for which it decided to calculate by that method to the day on which two years have elapsed from that same day.

The amount of consideration paid for a specified taxable purchase prescribed in paragraph (1) means the amount of consideration for the specified taxable purchase (meaning the amount of all money or anything other than money, or rights or other economic benefits, paid or to be paid as consideration); the taxable goods relating to the taking out of a bonded area prescribed in that paragraph means taxable goods under a general return taken out of a bonded area, or taxable goods relating to the submission of a special return or to a determination on a special return; the taxable sales in the taxable period prescribed in paragraph (2) means the remainder after deducting, from the total amount of consideration for taxable transfers, etc. of assets made by the business operator in Japan during that taxable period (meaning the amount of consideration prescribed in Article 28, paragraph (1); the same applies hereinafter in this paragraph), the total of the amounts of tax-exclusive refunds, etc. of consideration for sales in that taxable period (meaning the amount obtained by deducting, from the amount of refund, etc. of consideration for sales prescribed in Article 38, paragraph (1) made during that taxable period, the amount calculated by multiplying the amount of consumption tax relating to the amount of refund, etc. of consideration for sales prescribed in that paragraph by 100/78) (where that taxable period is less than one year, the amount calculated by dividing that remainder by the number of months in that taxable period (calculated according to the calendar, with any fraction of less than one month counted as one month) and multiplying the result by twelve); and the taxable sales ratio prescribed in paragraph (2) means the ratio calculated as provided by Cabinet Order as the proportion that the total amount of consideration for taxable transfers, etc. of assets made by the business operator in Japan during that taxable period accounts for in the total amount of consideration for transfers, etc. of assets (excluding those that fall under specified transfers, etc. of assets) made by the business operator in Japan during that taxable period.

The provisions of paragraph (1) do not apply to the amount of tax on taxable purchases, etc. relating to a taxable purchase, specified taxable purchase or taxable goods for which the business operator does not preserve the books and invoices, etc. relating to the deduction of the amount of tax on taxable purchases, etc. for the taxable period (books only, as to the amount of tax on taxable purchases, etc. in a case specified by Cabinet Order, such as where it is difficult to receive delivery of invoices, etc. or where it relates to a specified taxable purchase); provided, however, that this does not apply where the business operator proves that it was unable to preserve them due to a disaster or other unavoidable circumstances.

The books prescribed in the preceding paragraph means the following books.

where the amount of tax on taxable purchases, etc. relates to a taxable purchase, books in which the following matters are stated:

the name of the counterparty to the taxable purchase;

the date on which the taxable purchase was made;

the details of the asset or services relating to the taxable purchase (where the taxable purchase relates to a taxable transfer, etc. of assets subject to the reduced rate received from another person, the details of the asset and the fact that it relates to a taxable transfer, etc. of assets subject to the reduced rate);

the amount of consideration paid for the taxable purchase (meaning the amount of all money or anything other than money, or rights or other economic benefits, paid or to be paid as consideration for that taxable purchase, and, where there is an amount equivalent to the amount of consumption tax to be imposed on the business operator that transfers or lends the asset relating to that taxable purchase or provides the services relating to that taxable purchase and the amount of local consumption tax to be imposed with that amount of consumption tax as its tax base (excluding the amount equivalent to the amount of accessory tax on these tax amounts), including that equivalent amount; the same applies in Article 32, paragraph (1));

where the amount of tax on taxable purchases, etc. relates to a specified taxable purchase, books in which the following matters are stated:

the name of the counterparty to the specified taxable purchase;

the date on which the specified taxable purchase was made;

the details of the specified taxable purchase;

the amount of consideration paid for the specified taxable purchase prescribed in paragraph (1);

the fact that it relates to a specified taxable purchase;

where the amount of tax on taxable purchases, etc. relates to taxable goods relating to the taking out of a bonded area prescribed in paragraph (1), books in which the following matters are stated:

the date on which the taxable goods were taken out of a bonded area (where a special return has been submitted for the taxable goods, the date on which they were taken out of the bonded area and the date on which the special return was submitted or the date on which notice was received of the determination on a special return);

the details of the taxable goods;

the amount of consumption tax and the amount of local consumption tax relating to the taking out of the taxable goods (excluding the amount equivalent to the amount of accessory tax on these tax amounts; the same applies in item (v) of the following paragraph) or the total of these amounts.

The invoice, etc. prescribed in paragraph (7) means the following documents and electronic or magnetic records (meaning an electronic or magnetic record 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; the same applies in item (ii)).

a qualified invoice or qualified simplified invoice that another business operator (limited to a qualified invoice issuer; the same applies in the following item and item (iii)) that conducts a taxable transfer, etc. of assets with respect to the business operator (excluding a transfer, etc. of assets for which consumption tax is exempted under the provisions of Article 7, paragraph (1), Article 8, paragraph (1), or any other Act or treaty; the same applies in the following item and item (iii)) delivers to that business operator for that taxable transfer, etc. of assets;

an electronic or magnetic record that another business operator that conducts a taxable transfer, etc. of assets with respect to the business operator provides, under the provisions of Article 57-4, paragraph (5), in place of the qualified invoice or qualified simplified invoice that it should deliver to that business operator for that taxable transfer, etc. of assets;

a detailed statement of purchases, statement of purchase calculations, or other similar document that a business operator prepares for a taxable purchase it has made (limited to one that falls under a taxable transfer, etc. of assets conducted by another business operator, and excluding, among those taxable transfers, etc. of assets, any to which the proviso to Article 57-4, paragraph (1) or the main clause of Article 57-6, paragraph (1) applies), in which the name of the counterparty to the taxable purchase and other matters specified by Cabinet Order are stated (limited to a document in which the matters stated have been confirmed by the counterparty to the taxable purchase);

an invoice, delivery slip, or other similar document in which matters specified by Cabinet Order are stated, that a business operator receives, from a person who conducts the business of intermediation or agency, for a taxable purchase it has made (limited to a taxable purchase specified by Cabinet Order as one made through a person who conducts the business of intermediation or agency, such as one made by auction or tender at a wholesale market);

a document specified by Cabinet Order, such as a document certifying that import permission (meaning import permission prescribed in Article 67 (Permission for Export or Import) of the Customs Act) has been granted for taxable goods, that a business operator that takes the taxable goods out of a bonded area receives from the director-general of a customs house, in which the following matters are stated:

the director-general of the customs house having jurisdiction over the place for tax payment;

the date on which it became possible to take the taxable goods out of a bonded area (where a special return has been submitted for the taxable goods, the date on which it became possible to take them out of the bonded area and the date on which the special return was submitted or the date on which notice was received of the determination on a special return);

the details of the taxable goods;

the amount of the tax base for consumption tax on the taxable goods, and the amount of consumption tax and the amount of local consumption tax relating to the taking out of the taxable goods;

the name of the business operator that receives the document.

The provisions of paragraph (1) do not apply to the amount of tax on taxable purchases, etc. relating to a building (limited to one that falls under a high-value specified asset prescribed in Article 12-4, paragraph (1) or an adjustment-target self-constructed high-value asset prescribed in paragraph (2) of that Article; referred to as a "residential rental building" in Article 35-2), other than a building (including its accessory facilities; the same applies hereinafter in this paragraph) that is clearly not to be used for the lending of housing listed in Appended Table 2, item (xiii) that the business operator conducts in Japan.

Where a business operator does not preserve an identity verification document (meaning a copy of a resident record or any other document specified by Ministry of Finance Order) of the counterparty to a taxable purchase (limited to a taxable purchase for which the asset is gold or platinum bullion), the provisions of paragraph (1) do not apply to the amount of consumption tax on the taxable purchase for which there is no such preservation; provided, however, that this does not apply where the business operator proves that it was unable to preserve the document due to a disaster or other unavoidable circumstances.

The provisions of paragraph (1) do not apply to the amount of consumption tax on a taxable purchase where, at the time of the taxable purchase, the asset relating to the taxable purchase is taxable goods taken out of a bonded area without payment of the consumption tax that should have been paid, or goods for which consumption tax was exempted under the provisions of Article 8, paragraph (1) (limited to the case where the business operator making the taxable purchase knew that the consumption tax had not been paid or that it was exempted).

Special provisions on the matters to be stated in the books prescribed in paragraph (7), matters concerning the preservation of those books and the invoices, etc. prescribed in that paragraph, and other matters necessary for the application of the provisions of the preceding paragraphs are specified by Cabinet Order.