Japan has become renowned for its lucrative business landscape, compelling many foreign companies to travel to Japan for business purposes or one-off events. Although this doesn’t necessarily involve making sales, it still includes a plethora of business-related expenses. Where does VAT come into the picture? Well, before we get started, we need to switch up the language. In Japan, the equivalent of VAT (value-added tax) or GST (goods and services tax) is called Japanese Consumption Tax (JCT).
JCT is a tax levied on most goods and services in Japan, generally at a rate of 10%. How is this relevant to your business? In Japan, non-resident businesses may be able to recover JCT from the Japan Tax Office on expenses incurred in Japan for business purposes. However, unlike the foreign VAT refund processes available in the the European Union, a simple JCT registration is required in order for a non-resident company to be able to recover JCT spent.
In this piece, we’re exploring the JCT registration process, how your business can benefit from the Japanese reclaim opportunity, and everything you need to know about staying compliant with the latest Japanese regulations while maximizing your reclaim yield.
Source: vatit.com
