What are taxable sales?
Under the Japan consumption tax rule, sales can be classified into several categories as follows. And you need to correctly record accounting transactions based on those. You may also have to change settings in your accounting software.
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Taxable sales
Providing your products or services in Japan are basically taxable sales unless it is non-taxable sales or tax exempt sales.
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Non-taxable sales
Below sales are non-taxable sales because it is considered inappropriate for taxation.
| Non-taxable sales | Remarks |
|---|---|
| Land leasing and land sales | Except leasing of land for less than one month |
| Selling of securities and monetary instruments | |
| Interest and insurance premiums | |
| Selling of postage stamps and revenue stamps | |
| Services provided by the government and foreign exchange services | |
| Medical services under the laws | |
| Social welfare services under the laws | |
| Midwifery services | |
| Burial services | |
| Selling of equipments for the disabled | Wheelchairs, etc |
| School tuitions and other fees | |
| Selling of authorised textbooks under the school law | |
| Renting a house | Except hotels, renting it for less than one month, renting it for business purposes, etc |
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Tax exempt sales
| Tax exempt sales | Remarks |
| Export from Japan | |
| Selling ‘foreign goods’ in Japan | ‘Foreign goods’ are goods that are permitted to export them to foreign countries, and goods that are not yet permitted to import them from foreign countries. |
| International transportation | Passengers and cargo transportation |
| Selling and leasing of ships and aircraft for international transportation | Passengers and cargo transportation |
| Repairing ships and aircraft for international transportation | |
| Leasing of containers for international transportation | |
| Providing services for shipping companies | Port of entry assistance, etc |
| Providing services for ‘foreign goods’ | Storage, inspection, etc |
| International communication and mail | |
| Selling and leasing of intellectual property rights to non-residents | Copyright, etc |
| Providing services to non-residents | Except services such as transport, storage, foods, hotels, provided in Japan. |
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None of the above
Example: Selling goods in foreign countries, receiving donation, etc