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Foreign online service providers cannot get away from VAT
10.10.2023
The Ministry of Economy, Trade and Industry of Japan has proposed new rules on the collection of value added tax for online platforms in order to equalize the rights of domestic and foreign online service providers.
According to the current rules, foreign service providers themselves are responsible for paying VAT when the platform acts as an intermediary, which is an administrative problem from the point of view of law enforcement due to difficulties in identifying and collecting taxes from foreign suppliers who do not have a representative office in Japan.
According to the proposal, the operators of online platforms will act as tax agents of VAT due for services rendered by foreign service providers through their platforms.
This proposal should be included in the list of tax reforms for 2024 and, if approved, will begin to be applied as early as April 1, 2024.
Link to source: https://orbitax.com/news/archive.php/Japan-Considering-New-VAT-Requ-53888
According to the current rules, foreign service providers themselves are responsible for paying VAT when the platform acts as an intermediary, which is an administrative problem from the point of view of law enforcement due to difficulties in identifying and collecting taxes from foreign suppliers who do not have a representative office in Japan.
According to the proposal, the operators of online platforms will act as tax agents of VAT due for services rendered by foreign service providers through their platforms.
This proposal should be included in the list of tax reforms for 2024 and, if approved, will begin to be applied as early as April 1, 2024.
Link to source: https://orbitax.com/news/archive.php/Japan-Considering-New-VAT-Requ-53888
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