Changes for Consumption Tax Output (November 1, 2018) – Frequently asked questions

1. Changes for Consumption Tax Output

Why is Amazon making these changes?

In preparation for the 2019 Japan Tax Reform and to meet the needs of our business customers, Amazon is introducing this new functionality to impute consumption tax for the purpose of displaying at the time of checkout as well as on customer Invoices. Please see the changes to the reports in the following tables.

Before the changes

After the changes

Do I need to provide Tax Exclusive Prices to Amazon?

No. You should continue to provide Tax Inclusive Prices for your listings on Amazon from Manage Inventory in Seller Central or inventory files. Amazon will impute the tax amount from these prices based on your Tax Obligation Status, Product Tax Code and Shipping Destination. For more information, please see the Tax Calculation Methodology from the following links:

• Tax Calculation Methodology (Japanese)
• Tax Calculation Methodology (English)

Can I opt out of this tax calculation system?

No. This change will be applied to all tax obligated sellers on Amazon. For tax obligation settings, please check here.

I have questions regarding my tax obligation status and my own tax calculation methodology.

Amazon cannot provide tax guidance on questions regarding your tax obligation status or your own tax calculation methodology. Please consult with your tax adviser.

Will Amazon ever charge less than the price I entered for an exported item?

In case of exports, we will collect only the tax exclusive amount after imputing the tax component from the price you entered. In this case, tax field will not be shown in the Settlement Report and MWS Finance API while tax amount with ¥0 will be shown in the Order Report and MWS Order API. For more information, You may enable or disable exports by editing the Shipping Settings.

Will Amazon file consumption taxes on my behalf to the government?

No. Amazon will only impute consumption taxes for the purpose of displaying on customer invoices and at the time of checkout. You can continue filing consumption tax to the government as per your current process.

When do I need to implement the changes necessary in my system?

Amazon plans to launch the new tax calculation system at 00:00 on November 1, 2018. We strongly recommend reviewing your current system and processes to identify any impact and make appropriate changes as soon as possible.

Will these changes impact orders placed prior to the launch?

Past orders that are already shipped or available to ship prior to the launch will not be impacted by these changes. Any new orders or orders that were still in pending state at the time of launch will get processed under the new tax calculation system. Please be noted that the data for pre-implementation acquired after the implementation of the change will remain as tax exclusive data.

How can I differential between before and after orders on Reports and APIs?

We recommend to you confirm the date of this change and tax calculation. The only exception is if you have any tax exempt products where Product Tax Code (PTC) has been set as “Tax exempt” (A_GEN_NOTAX). In the case of these products, the orders will have no impact from the tax calculation.

Reference

Consumption Tax Settings

Tax reform on October 1, 2019 – Overview

Consumption Tax Indication

Product Tax Code Setting