Green Circle Talks about Cross-border】Japan JCT Compliance New Policy: Simple Declaration will no longer be Applicable

Outline of the New JCT Compliance Policy in Japan

The Cabinet Council Meeting of Japan has formally approved the "Outline of Corrections to the Tax System for Fiscal Years Order and 6" and has made a number of key adjustments to the Japanese Consumption Tax (JCT) policy, the most important of which is the elimination of the JCT simplified filing system. From October 1, 2024, the simplified tax filing system will no longer apply to foreign business operators without permanent establishments, and the transitional measures for small business operators will no longer apply.

Specific changes

1. Abolition of the simplified declaration system::

• The simplified reporting system is no longer applicable to foreign businessmen without permanent facilities.

1. Standard Reporting Methods::

• Cross-border sellers are required to use the standard filing method, i.e., 10% of taxable sales, minus consumption tax on imported or locally sourced goods, minus Amazon FBA fee tax (Amazon commissions and advertising fees tax are not deductible).

Compliance Recommendations

1. Use ACP mode + JCT tax code::

• Use the ACP model and JCT tax code to maintain compliance and effective customs clearance and avoid the problem of not being able to deduct import excise duty.

1. Import Consumption Tax Payment::

• Sellers are required to pay the import excise duty with their own business number and keep a record of the payment at the Customs and Excise Department.

These adjustments are designed to help sellers better understand and comply with the new tax policies and ensure that their operations in the Japanese market are compliant. It is important for cross-border sellers to pay close attention to and adapt to these changes.