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  • Property Onboarding form

  • Contact Information

  • Type of Inquiry

  • First Time Purchase

  • Consumption Tax 

  • Consumption Tax Continued..

     

    It is only Possible to Claim if you property is in the Rental pool


    Consumption Tax is similar to GST or VAT in other countries. In theory it is meant to be an end Consumer tax. The business operator has an obligation to collect C- tax from customers and Pay to the tax agency.


    However it is possible to offset  your payable with consumption tax paid in Purchases  (purchases need to be attributable to the income)


    If your Tax credits exceed your tax debits, It is possible to get a refund. (Yes, in cash)


    This can be pretty significant for buyers who purchase a rental property as they can potentially claim back 10% of the building price of sale. 

     

    Important points 

     


    Businesses are exempt from Registering for consumption until their Top line revenue Reaches 10m yen. 


    The system is "opt in", not automatic


    Deadline are super important in Japan and can be the difference between being able to claim and not being able to claim tax credits 


    This needs to be done before the end of your first financial year . Note your first financial year in Japan will probably be Partial. Financial year for Individual is deemed to be Calendar

     

    Considerations


    It is important to note though, once you register for Consumption tax, you need to stay registered for a minimum of 3 years. This has a couple of implications.


     The consumption tax return is separate from income tax return and has extra charges/ Accounting fees
    Generally speaking , while owners can expect to get a hefty refund from Year 1, (due to build Costs), Year 2 & 3 would see  a Tax obligation. (assuming that your Revenue is higher than Expenses)
    If you sell your property while still being registered for Consumption tax.. Similarly to when you purchased .. There is assumed to be consumption tax in the building component of the sale price.. So you would end up paying Consumption tax. The Consumption tax on sale price maybe higher than the consumption tax in Purchase. 

    If your revenue stays under 10m, then it is usually possible to de-register for consumption tax in year 3 to take affect in Year 4.

     

     

  •  Warning

     

    We Noticed that you Selected that you would like a consumption tax Refund & that the property is for "personal Use" only.... Under these conditions you are not eligible to receive refund

    • Historic Filing  
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    • E Tax Credentials

      In order to submit your taxes on line, you or your tax accountant would have needed to register and account with the Tax office. 

      If you know the Details, please let us know what they are.

      if you are not sure what they are, it is possible for us to create a new account for you. 

       

    • Suggested Email to Previous Accountant if you dont have 
    • Dear XXX

       

      Appreciate if you can send me the follow 

      - Last 2 years of Tax returns

      - E-Tax Credentials

      - Any Tax notifications submitted 

       

      Much appreciated 

      XXX

    • HIstorical Catch up 
  • Ownership Details

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    • Owner 1 details 
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    • Owner 2 details  
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    • Owner 3 details 
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  • Property Details

    • Property Purchase details  
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    • Costs Attribuble to Purchase

      Cost related to purchase can be added to the cost based, there decreaing over overall profit on eventual sale

      Example of these: 

      • Lawyers fees
      • Realestate agent comission
      • Travel costs in connection with purchase
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    • Property - Sale 
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    • Costs Attribuble to Sale 

      Cost related to sale can be deducted from overall profit from Sale 

      Example of these: 

      • Lawyers fees
      • Realestate agent comission
      • Travel costs in connection with Sale
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    • Deedtitle 
    •  

      This is an official/ publically available document that notes some particulars about the property including ownership

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    • Image-177
    • SME Japan staff can get from local ward office. This occurs a admin fee of 3,000 yen 

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