• Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 7/8/2014

Japan - Proposed changes to consumption taxation of cross-border services 

July 8:  Proposals to revise the consumption tax treatment of cross-border supplies of services are being considered in Japan, and could possibly be included in the 2015 tax reform.


Under the current Japanese consumption tax law, the place of taxation for cross-border supplies of services is determined by the place of the office of the service supplier if the place where the services are provided is not clear.

Thus, supplies of digital content (e.g., e-books and music) or internet advertising by foreign suppliers are not subject to consumption tax, while such supplies by domestic suppliers are subject to consumption tax.


A report on the consumption tax treatment of cross-border supplies of services and intangibles was submitted by the Ministry of Finance to the Tax Commission in November 2013.

In late June 2014, a proposed framework for the consumption tax treatment of cross-border supplies of services was discussed at a meeting of the International Taxation Discussion Group of the Tax Commission and was reported to the full Tax Commission on 27 June.

It is anticipated that amendments to the tax law in line with the proposed framework could affect:

  • Rules for the place of taxation
  • The definition of “B2B supplies” and “B2C supplies”
  • Compliance rules – “B2B supplies”
  • Compliance rules – “B2C supplies”

Read a July 2014 report prepared by the KPMG member firm in Japan: Consumption Tax Treatment of Cross-Border Supplies of Services

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