Article 4Subject of Taxation

①Consumption tax is imposed under this Act on transfers, etc. of assets conducted by business operators in Japan (excluding those that fall under specified transfers, etc. of assets; the same applies in paragraph (3)) and on specified purchases (meaning specified transfers, etc. of assets received from another person as a business; the same applies hereafter in this Chapter).

②Consumption tax is imposed under this Act on foreign goods taken out of a bonded area.

③Whether a transfer, etc. of assets was conducted in Japan is to be determined by whether the place specified in the relevant one of the following items, according to the category of cases set forth in those items, is in Japan; provided, however, that in the case set forth in item (iii), if there is no place specified in that item, that transfer, etc. of assets is to be regarded as having been conducted outside Japan.

④Whether a specified purchase was conducted in Japan is to be determined by whether the place specified in item (ii) or (iii) of the preceding paragraph, with respect to the provision of services received from another person as that specified purchase, is in Japan, from the standpoint of the business operator that made that specified purchase; provided, however, that, of the specified purchases that a foreign business operator makes at a permanent establishment (meaning a permanent establishment prescribed in Article 2, paragraph (1), item (viii)-4 (Definitions) of the Income Tax Act or Article 2, item (xii)-19 (Definitions) of the Corporation Tax Act) (limited to those that fall under the provision of telecommunications services for businesses received from another person; the same applies in this paragraph), those required for transfers, etc. of assets conducted in Japan are deemed to have been conducted in Japan, and, of the specified purchases that a business operator (excluding a foreign business operator) makes at a foreign office or similar establishment (meaning a foreign office or similar establishment prescribed in Article 95, paragraph (4), item (i) (Foreign Tax Credit) of the Income Tax Act or Article 69, paragraph (4), item (i) (Foreign Tax Credit) of the Corporation Tax Act), those required only for transfers, etc. of assets conducted outside Japan are deemed to have been conducted outside Japan.

⑥Where foreign goods have been consumed or used in a bonded area, the person who consumed or used them is deemed to take those foreign goods out of that bonded area at the time of that consumption or use; provided, however, that this does not apply where those foreign goods have been consumed or used as raw materials or materials for taxable goods, or in any other case specified by Cabinet Order.

⑦In addition to what is provided for in paragraph (3) through the preceding paragraph, necessary matters concerning the details of the subject of taxation are specified by Cabinet Order.