Overview

Taxable individual business owners must file and pay consumption tax (消費税) and local consumption tax (地方消費税) returns for the prior calendar year. Both the return and tax payment are due by the deadline. Three calculation methods are available: general taxation, simplified taxation, and the 20% special provision.

Schedule

Applicability

• Applicable to: Individual
• Requires consumption tax applicability

Only individual business owners who qualify as taxable business operators (課税事業者) are required to file. You are a taxable business operator if any of the following apply: • Your taxable sales in the base period (基準期間, the year two years prior) exceeded ¥10 million • Your taxable sales in the specified period (特定期間, January 1 – June 30 of the prior year) exceeded ¥10 million (you may use total salary/wages paid instead of taxable sales for this test) • You are registered as a Qualified Invoice Issuer (適格請求書発行事業者) — registration makes you taxable regardless of sales thresholds • You 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) 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. 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 return is submitted to your local tax office (所轄税務署). Filing options include e-Tax (electronic filing), the NTA's online return preparation tool (確定申告書等作成コーナー), mail, or in-person submission at the tax office.

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