Overview

Taxable corporations must file and pay consumption tax (消費税) and local consumption tax (地方消費税) returns. There are three calculation methods — general taxation, simplified taxation, and the 20% special provision — depending on business size and prior elections. Corporations with an extended corporate tax deadline may also extend consumption tax filing.

Schedule

Applicability

• Applicable to: Kabushiki Kaisha (KK), Godo Kaisha (GK)
• Requires consumption tax applicability

Only corporations that qualify as taxable business operators (課税事業者) are required to file. Your corporation is a taxable business operator if any of the following apply: • Taxable sales in the base period (基準期間, generally the fiscal year two years prior) exceeded ¥10 million • Taxable sales in the specified period (特定期間, the first half of the prior fiscal year) exceeded ¥10 million (you may use total salary/wages paid instead of taxable sales for this test) • Registered as a Qualified Invoice Issuer (適格請求書発行事業者) — registration makes you taxable regardless of sales thresholds • Voluntarily elected taxable status by filing a Taxable Business Operator Election Form (消費税課税事業者選択届出書) • Newly established corporation with capital of ¥10 million or more (taxable for the first and second fiscal years) If none of the above apply, you are an exempt business operator (免税事業者) and do not need to file a consumption tax return.

Authority

Filing Methods

Additional Details

There are three calculation methods for consumption tax. (1) General taxation (原則課税): Tax liability is calculated by deducting input tax from output tax. Under the Invoice System (インボイス制度), qualified invoices (適格請求書) must be retained to claim input tax credits. (2) Simplified taxation (簡易課税): Available to businesses with base period taxable sales of ¥50 million or less (the base period (基準期間) is generally the fiscal year two years prior). Input tax is calculated using deemed purchase ratios (40–90% depending on business type). (3) 20% special provision (2割特例): Available to small-scale businesses that became taxable due to Invoice System registration. Tax liability equals 20% of output tax. This applies to taxable periods that include any day from October 1, 2023 through September 30, 2026. The filing period runs from the day after fiscal year-end through 2 months after. However, corporations that have obtained a corporate tax deadline extension may also extend the consumption tax deadline by 1 additional month (total 3 months) by filing the Consumption Tax Deadline Extension Notification (消費税申告期限延長届出書) with their local tax office. The notification must be submitted by the last day of the fiscal year for which the extension applies. Interest tax (利子税) is charged during the extension period. The return is submitted to your local tax office (所轄税務署). Filing options include e-Tax (electronic filing), mail, or in-person submission at the tax office. Corporations with capital exceeding ¥100 million are required to file electronically via e-Tax.

Penalties for Non-Compliance

Failure to file by the deadline may result in the following penalties: • Failure-to-file penalty (無申告加算税, Art. 66): 15% of tax due (20% on amounts over ¥500,000, 30% on amounts over ¥3 million). Reduced to 5% if filed voluntarily before audit notice. • Delinquent tax (延滞税, Art. 60): 2.4%/year for the first 2 months, 8.7%/year thereafter (Reiwa 7 special rates). • Heavy additional tax (重加算税, Art. 68): 40% if concealment or falsification is found (50% for repeat offenses within 5 years).

Legal Basis