Overview

Notification for tax-exempt businesses to voluntarily elect taxable status. If you incurred significant startup costs (equipment, renovation, software) in your first year, you may qualify for a consumption tax refund. Must be filed by the last day of the current fiscal year to take effect from the next year. New companies (新設法人) may apply it to the current first fiscal year if filed by the last day of that year. A 2-year minimum lock-in applies once filed.

Schedule

Day after fiscal year-end (or next business day)

Applicability

• Applicable to: Kabushiki Kaisha (KK), Godo Kaisha (GK)

• Corporations established with capital of ¥10 million or more are automatically taxable from inception — this form is not needed. • Registration as a Qualified Invoice Issuer (適格請求書発行事業者) also automatically confers taxable status. • If you elect the Simplified Taxation System (簡易課税) alongside this election, you cannot receive a refund — refunds are only available under General Taxation (原則課税). • If the deadline is missed, you may still file for the following fiscal year.

Authority

Filing Methods

Additional Details

The Consumption Tax Taxable Business Operator Election Form (消費税課税事業者選択届出書) is filed pursuant to Article 9(4) of the Consumption Tax Act by businesses that would normally be exempt (免税事業者) to voluntarily elect taxable operator status (課税事業者). [How New Companies Receive a Refund] In the early stages of operation, sales (and thus consumption tax collected) are often low, while startup expenses (equipment, fixtures, office renovation, software) may be substantial. As a taxable entity, you can claim input tax credits (仕入税額控除). When input tax exceeds output tax, the difference is refunded by the tax authority. [When the Election Takes Effect] Generally, the election takes effect from the fiscal year FOLLOWING the one in which the notification is filed. However, for newly established companies (新設法人), if the notification is filed by the last day of the first fiscal year, the election applies retroactively from the beginning of that first year. [2-Year Lock-In Rule] Under Article 9(6) of the Consumption Tax Act, once the election is made, you cannot revert to exempt status for at least 2 full fiscal years. Even if revenue increases significantly in Year 2, you will remain subject to consumption tax filing and payment obligations. For a detailed guide including a refund estimator calculator, see: /guides/consumption-tax-refund

Legal Basis