[responsive_menu_pro]

VAT Rates in Japan

Updated Japanese VAT rate tables

Japan has a unique approach to value-added taxation, referred to as a consumption tax, which serves an equivalent function to the VAT systems found in other countries. The Japanese consumption tax applies to most goods and services, providing a crucial revenue stream for the government. This tax is bifurcated into standard and reduced rates, each tailored to different categories of products. Below, you can explore detailed information about the VAT rates in Japan, including the current standard rate and the specific reduced rates, along with a comprehensive list of products subject to these rates.

The standard consumption tax rate in Japan stands at 10%, while a reduced rate of 8% is applied to certain essential items, including food and non-alcoholic beverages, as well as newspaper subscriptions published more than twice a week.

 

Global VAT Compliance

 

Standard VAT rate (consumption rate equivalent to VAT)
The standard VAT rate is the primary rate of VAT applied to goods and services within a country, covering most items except for certain specific goods and services that may qualify for a reduced rate. Some exceptions include essential items or goods and services that meet certain criteria outlined below. Japan applies a standard consumption rate (equivalent to VAT) of 10% (the sum of local and national consumption tax of 1.76% and 6.24% )
Reduced Consumption rate
Japan has a reduced rate of 8%.
Below are some goods and services eligible for a reduced consumption rate:
Rate Good or Services
8%
  • Takeaway food & drinks
  • Printed newspapers
Exempt From VAT
  • Transfer of securities, including national government bonds, corporate bonds, or stock (excluding membership shares in a golf club), as well as currency transfers and money-changing services.
  • Transfer or lease of land, except for certain short-term rentals.
  • Leasing or rental of buildings for residential use (e.g., houses or apartments).
  • Interest on loans and deposit receivables, guarantee fees, trust income from jointly-managed trusts or bond investment trusts, insurance premiums, and similar fees.
  • Transfer of postage stamps, revenue stamps, and merchandise coupons.
  • Provision of public services and international postal money orders.
  • Medical services related to various types of social insurance provided by law.
  • Services related to childbirth, burial, home help, and welfare centers for the aged and handicapped persons.
  • Social welfare activities.
  • Sales of virtual currency.
  • School tuition and examination services for schools that fall under the “school” category in the School Education Act, and other schools with instruction periods greater than one year, requiring at least 680 school hours per year.
Zero rated

(In Japan, the concept of “exempt with credit” transactions refers to certain transactions that are not subject to consumption tax and also allow for a credit on the related input tax. This means that while these transactions do not incur consumption tax, businesses can still claim a credit for the consumption tax they paid on their inputs related to these transactions. This is similar to zero-rated supplies in other countries.)

  • Export transactions and export-related transactions
  • International transportation and telecommunications services
  • International transportation of passengers and freight
  • International communications
  • Transfer or rental of property for export
  • Transfer or rental of foreign goods
  • Transfer or charter of vessels, aircraft, and containers for international transport
  • Handling, transportation, storage, inspection, and survey of foreign freight
  • Harbor transportation and customs procedures
  • Transfer or licensing of intangible property rights to nonresidents
  • Repairs and piloting services for vessels and aircraft
  • Services for nonresidents (excluding transportation and storage of property, meals, and lodging in Japan)

Additionally, businesses exceeding a specific revenue threshold must register for and remit consumption tax, though certain small businesses may qualify for exemption under Japan’s tax system. In fiscal year 2022, Japan’s consumption tax revenue amounted to approximately 23.1 trillion Japanese yen, accounting for 32.4% of the government’s general account revenue.

There are many more aspects to Japan’s “VAT” rates and system that require a deeper analysis and understading. If you wish to get informed on how these rates affect your international business please send us an email or schedule a call with one of our experts.

 

If you wish to get quickly informed about all basic and reduced VAT rates in Europe or VAT rates in the World you can view our dedicated page by clicking on the respective title.

 

 

Last Updated: 05/02/2025

Disclaimer

The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax

Selling in Japan?

We offer an end to end VAT Compliance package

Contact GVC for your VAT Compliance in Japan

SUBSCRIBE TO GLOBAL VAT NEWSLETTER

Get the latest VAT information directly in your inbox and stay up to date with all VAT developments around the world.

You have Successfully Subscribed!