GUIDE · SIMPLE TAX
Simplified consumption tax
消費税の簡易課税制度Kani kazei — tax from sales, without counting every purchase
If your sales are modest, you can calculate consumption tax from sales alone — much less paperwork, and sometimes less tax.
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Who
≤ ¥50M
Taxable sales in the base period
File
Before
The day before the period starts
Stay
2 years
Minimum once chosen
How
Deemed rate
Set by type of business
How it works
Normally, a taxable business pays consumption tax on sales minus the tax it paid on purchases, which needs records of every purchase. Under the simplified method, the tax paid on purchases is deemed to be a set percentage of the tax on sales, depending on your type of business.
Who can use it and when to file
- Taxable businesses whose taxable sales in the base period (two years earlier) were ¥50 million or less
- File the election form with your tax office by the day before the tax period you want it for
- Once chosen, you must keep it for at least 2 years (except if you close the business)
- Businesses that become taxable by registering for the invoice system can elect it during that period, under a transition rule until September 30, 2029
A new company with ¥10 million or more in capital has no base period yet — ask your tax accountant whether it can elect the method in its first years.
Is it worth it?
Often helps
- Service businesses with few purchases
- Owners who want less bookkeeping
- Small businesses newly registered for invoices
Think twice
- Big equipment purchases coming up (no refund under this method)
- Low-margin trading or retail
- Sales likely to exceed ¥50 million soon
See also Japan’s invoice system and Taxes for new companies.
FAQ
Who can use simplified consumption tax in Japan?
Taxable businesses whose taxable sales in the base period (two years earlier) were ¥50 million or less, after filing the election form in time.
When must I file for simplified consumption tax?
By the day before the tax period you want to use it for. Some invoice-registered businesses can file during the period under a transition rule.
Can I switch back from simplified consumption tax?
Only after using it for at least two years, unless you close the business.
Sources
This page is a plain-English summary, not legal advice. The official Japanese guidelines always take priority.
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USEFUL TOOLS
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