Article 30Deduction of Consumption Tax on Purchases

①With respect to a taxable purchase that a business operator (excluding a business operator exempted from the obligation to pay consumption tax under the main clause of Article 9, paragraph (1)) makes in Japan (excluding one that falls under a specified taxable purchase; the same applies hereinafter in this Article and in Articles 32 through 36) or a specified taxable purchase, or taxable goods that it takes out of a bonded area, there is deducted from the amount of consumption tax set forth in Article 45, paragraph (1), item (ii) (hereinafter in this Chapter referred to as "consumption tax on the tax base amount") for the taxable period that includes the day specified in each of the following items according to the category of case set forth in that item the total of the amount of consumption tax on taxable purchases made in Japan during that taxable period (meaning an amount calculated on the basis of the matters stated in the qualified invoice (meaning a qualified invoice prescribed in Article 57-4, paragraph (1); the same applies in paragraph (9)) or qualified simplified invoice (meaning a qualified simplified invoice prescribed in Article 57-4, paragraph (2); the same applies in paragraph (9)) relating to that taxable purchase, or any other amount calculated as provided by Cabinet Order; the same applies hereinafter in this Chapter), the amount of consumption tax on specified taxable purchases made in Japan during that taxable period (meaning an amount calculated by multiplying the amount of consideration paid for that specified taxable purchase by 7.8 percent; the same applies hereinafter in this Chapter), and the amount of consumption tax imposed or to be imposed on taxable goods relating to the taking out of a bonded area in that taxable period (excluding goods exempted from consumption tax under the provisions of other laws or treaties; the same applies hereinafter in this Chapter) (excluding an amount equivalent to the amount of accessory tax; the same applies in the following paragraph).

②In 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.

③In 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.

④A 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).

⑤In 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.

⑥The 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.

⑧The books prescribed in the preceding paragraph means the following books.

⑨The 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)).

⑩The 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.

⑪Where 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.

⑫The 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).

⑬Special 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.