New Japanese Consumption Tax Laws - any ideas?
DigiChain
Member, PRO Posts: 1,288
Hi, does anyone have an understanding of what the new Japanese Consumption Tax laws (brought in Oct 1st) mean to us?
I'm gathering that if we are selling apps to customers in Japan we now have to register, collect and pay 8% tax to the Japanese tax authority as it doesn't seem the app stores are doing this on our behalf as they do elsewhere... but I can't seem to find any definitive info on this. Any ideas anybody?
Comments
I think this is the relevant bit
https://www.taxamo.com/japanese-ecommerce-eservices-tax/
"Just like the recent EU legislation on the cross-border supply of digital services, the new JCT only affects B2C supplies."
It's weird if Apple and Google aren't doing it at all on their end. But, as publishers, our transactions are business-to-business and should be exempt. Apple and Google run the storefronts which have to deal with business-to-customer transactions where the consumption tax applies. Possibly/likely they're registerd in some legal loophole way to count as native to Japan and not need to collect the tax.
Agree with Moik here. Canada has a GST (national sales tax) but Do you collect GST from canadian purchases. No.
Cheers guys. Yeah that would seem to make sense.
As always I've read conflicting stuff on this... I'll perhaps look into it a bit more, but as you say we're B2B so would make sense that this doesn't directly affect us.
Update:
Ok I've just found a copy of an email Google Play sent to developers about a month ago. The other app stores sent out something similar too:
Hello Google Play Developer,
This is a friendly notice only.
A recent change to Japan Consumption Tax (JCT) regulations will impact your Google Play account. Beginning October 1, 2015, you will be responsible for determining and charging JCT for Google Play app sales to customers in Japan.
The current JCT rate is 8%. You will also be responsible for remitting and reporting on any JCT amount to the Japan Tax Office. This applies to all paid apps and in-app products sold to customers in Japan, even if your business is not located there.
Please consult with a professional tax advisor if you have any questions about your obligation regarding JCT.
Thanks for your continued support of Google Play.
Regards,
The Google Play Team
This would therefore indicate that we are responsible for reporting and paying this tax.
Well then. That's enough hassle to make me reconsider releasing in Japan.
Localizing the text and fitting things to buttons at a legible size is rough enough. Needing to add exceptions and calculations to the IAP and registering for things overseas pretty much pushes the potential return on investment way too low.
I definitely wouldn't release any games in Japan if I have to deal with tax personally. Unless the game is a hit, and making enough money to hire an accountant, it's just not worth the hassle.
Contact me for custom work - Expert GS developer with 15 years of GS experience - Skype: armelline.support
Yeah, looking at some dev forums it seems quite a few people are just pulling there games from sale in Japan. I think I'm about to do the same.
Yep, sounds like the sensible thing to do for most people is to simply avoid the Japanese market.
Got this from another forum.
http://www.mof.go.jp/english/tax_policy/tax_reform/fy2015/fy2015ct_00.pdf
bottom of pdf.
But then again.
http://www.eubusinessinjapan.eu/issues/financial-issues/taxes-accounting/consumption-taxes
I was planning to make 11 million Yen
I think the problem with this is that you'll still need to account for your Japanenese earnings so as to demonstrate that your earnings are below the threshold, and you are therefore exempt from paying Consumption Tax.
Yea that's way I said then again, and link.
I guess I am lucky, my games don't sell so I don't have to worry about this.