Consumption tax refund by a Representative Office in Japan
Japanese consumption tax refund by a Representative Office in Japan
Under the Japanese Consumption Tax Law, both a domestic corporation and
a foreign corporation are "Business Entrepreneur" and they can
register as "a tax payer" of the consumption tax.
Consumption tax payable is calculated "Output consumption tax - Input
In case the calculation figure is minus, overpaid consumption would be
You might have an experience in your travel to Europe that you tried to refunded European VAT (Value Add Tax) at the airport.
This is a refund procedure in the airport not to bear VAT from respect
of the shifting and incidence of tax to the nonresident consequentially.
It can be said that a consumption tax refund procedure by a Japan representative
office is the same procedure as European VAT above.
Like VAT refund procedures, a preparation of documents work is troublesomely
time consuming things, though it is possible to pay back for a Japan representative
office of foreign company, if conditions are met.
1. Consumption tax refund procedure of representative office
Necessary requirements by the Japanese consumption tax law should be satisfied.
e.g. Accounting book for the Japanese consumption tax purposes and record
of invoices etc. should be fulfilled.
2. Why not try to refund!
If your Japanese representative office pays lots of consumption tax, why
not try to refund it!
Office rent: JPY 1.2M /month, Outsourcing admin staff: JPY 1.0M /month,
Domestic travelling expenses: JPY 800K/month, Domestic entertainment costs:
JPY 800K/month and Miscellaneous expense JPY 200K /month. 5% of consumption
tax payments would be JPY 2.4M in total per annual.
Even though you pay a tax accountant fee for refund in total around JPY 1.0M (JPY 50K/month for an accounting book + JPY 200K for a tax return), why not try to refund it!
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