Consumption tax rate (VAT, GST ) in Japan

Consumption tax, also called VAT or GST in some other countries, is levied on the domestic and import transactions, except for certain transactions deemed non-taxable. The consumption tax rate is 8% (national consumption tax rate of 6.3% and local consumption tax rate of 1.7%). The rate is planning to be raised to 10% from April 1, 2017.



Scope of transactions

The following transactions are subject to consumption tax.


(A)Domestic transactions: the transfer or rental/lease of assets or services rendered as a business in Japan by an enterprise for consideration.

(B)Import transactions: cargo retrieved from a bonded zone.


Similar to most of other countries, capital transactions, financial transactions, and certain transactions in the areas of medical care, welfare and education are deemed non-taxable. Export transactions and export deemed transactions such as international transport and international communication are not subject consumption tax.