What is platform consumption tax?

When an overseas business sells apps, electronic books, etc. to consumers in Japan via app stores or online shopping,

the transaction by the overseas business is subject to consumption tax.
(If certain requirements are met, the obligation to report and pay consumption tax arises.)

However,

if an overseas business provides telecommunications services to consumers in Japan
(such as app distribution, e-books, and music distribution)

through a specific digital platform operator on or after April 1, 2025,

the corporation that operates the specific digital platform will be deemed to have conducted the taxable transaction, rather than the overseas business.

Target companies

The specific digital platform operators are as follows.
(As of December 6, 2024)

・App Store, Apple Books, Apple Podcasts (iTunes Inc.)

・AWS Marketplace (Amazon Web Services Japan, LLC)

・Google Play (Google Asia Pacific Private Limited)

・Nintendo eShop (Nintendo Co., Ltd.)

Points to note

In order to claim the consumption tax input credit, invoices must be kept.

For transactions that meet the above requirements,

• Overseas businesses are not required to issue invoices
• Specific digital platform businesses must issue invoices.

In addition, this system applies to the provision of telecommunications services to consumers in Japan by overseas businesses.

For example,

• Provision of telecommunications services to consumers in Japan by domestic businesses
• Sale of goods and provision of services that do not fall under the provision of telecommunications services to consumers in Japan by overseas businesses

are not subject to this system, even if they are transactions conducted via a specific digital platform.

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都築太郎税理士事務所/Tsuzuki Taro Tax Accountant Office

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