Do Japanese-Resident Businesses Need to Pay Consumption Tax to The Japanese Tax Office When Providing Consulting Services to A Foreign Company?

【Koshida Accounting Firm Column Date:

Hi, my name is Taisei Koshida, and I am a certified public accountant and tax accountant.


I aim to assist non-Japanese business owners who need help with reading or writing in Japanese. If you find the Japanese tax return system challenging, I can help you with your tax filings.


If you are unclear about consumption tax in Japan, you might find this blog helpful.




If All The Following Conditions Are Met, There Is No Eeed to Pay The Consumption tax

・The service is provided directly to the foreign company’s headquarters
Even if the foreign company has branches in Japan, they must not be directly or indirectly involved in this transaction.

・The operations of the foreign company’s branches in Japan must not be of the same type or related to this transaction


However, It Is Regarded as A Taxable Transaction With A Zero Tax Rate

It is not regarded as a non-taxable transaction, but as a taxable transaction with a zero tax rate of export transactions. In other words, it is included in the taxable annual sales, which is an important factor in determining whether it will be taxable in the future.



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