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This article applies to selling in: Japan

Handling consumption tax after the Japanese tax system revision (October 1, 2019): Frequently Asked Questions

1. What is going to happen on 10/1/19?

There are mainly 3 changes:

  1. The consumption tax rate will be raised from 8% to 10%.
  2. A reduced tax rate will be introduced and tax rate for food and non-alcoholic beverages remains 8%.
  3. An invoice-based method of calculating tax paid will be introduced, requiring the total amount for each tax category to be shown on invoices and similar documents.
For more information, please refer to website of National Tax Agency. https://www.nta.go.jp/english/taxes/consumption_tax/index.htm

2. What actions are required from me to adjust changes happening on 10/1?

Conditions of target sellers Actions sellers may want to take
Sellers who sell products that are subject to reduced tax rate (e.g. grocery, non-alcoholic beverages) Assign the correct Product Tax Code (PTC) to your offers via Seller Central UI(1x1), Feed Files (e.g. Inventory File, Listing Loader) and MWS APIs. Please visit our help page to learn how to set product tax code.
Sellers who select "No" for tax obligation status in consumption tax setting on seller central and use order/settlement reports or related APIs Values displayed on settlement/order reports and related APIs will change. Until now, reports and API output related to settlement and orders only display tax inclusive price. After the change, tax inclusive price and tax amount will be displayed on order related reports and APIs and tax exclusive price and tax amount will be displayed on settlement related reports and APIs. If you are using an in-house system or developer packages, system updates may be required. In this case, please either contact to your tool provider or take the necessary actions internally. You can check whether action is necessary and view the system update guidelines here. (Seller Central login required.) For more frequently asked questions about this topic, see the Help page. In addition, Sellers are responsible to decide when to update prices, however, please be informed that many price updates are expected around 10/1 and it may take more time than usual for updated price to be reflected on Amazon.co.jp.
Sellers who are tax obligated in Japan Update price taking new tax rate (standard tax rate: 10%, reduced tax rate: 8%) into account, if necessary. Whether to update price and when to update is up to sellers. Amazon provided sellers with “Price Scheduling File” and “Price Update File for Tax Reform” to support sellers’ price update during tax reform and stopped support for these files on October 16, 2019. Please use Prince and Quantity File, Inventory File or other files to update prices.

3. Does 10/1 tax reform have impact on sellers who are not tax obligated in Japan?

Yes, all transaction happened in Japan (purchase by customers living in Japan) is subject to Japanese tax system Therefore, sellers will need to set the right tax rate to their offers based on Japanese tax system, regardless of their tax obligation in Japan.

4. After the consumption tax increase on October 1, 2019, will prices be displayed inclusive or exclusive of tax?

After the consumption tax increase on October 1, 2019, Amazon.co.jp will continue to display total prices, including consumption tax, as before. At Amazon Business, too, both tax-inclusive and tax-exclusive prices will continue to be displayed.

5. How can I display tax-exclusive prices, instead of tax-inclusive prices?

Tax-exclusive prices cannot be displayed at Amazon.co.jp. This will not change with the consumption tax increase on October 1, 2019. Prices will continue to be displayed inclusive of tax.

6. Can I display prices as a combination of product price + tax?

Prices cannot be displayed as a combination of product price + tax at Amazon.co.jp. This will not change with the consumption tax increase on October 1, 2019. Prices will continue to be displayed inclusive of tax.

7. I received an order with an order price that mistakenly included consumption tax at 8%. How can I change the price to include consumption tax at 10% instead?

At Amazon.co.jp, prices are set when orders are confirmed, and cannot be changed later. Please fill the order at the order price that was set when the order was received. If you intend to cancel the order, note that you must contact the buyer and receive their approval to do so in advance.

8. I am already accepting pre-orders for a product to go on sale in or after October 2019. Can I include consumption tax of 10% in the price display starting now?

If you are accepting pre-orders for a product scheduled to go on sale in or after October 2019, it is fine to set a price reflecting the updated tax rates that will apply then (standard rate: 10%, reduced rate: 8%). Please note that all sellers are responsible for setting and updating their own prices.

9. When new tax rate is applied to product prices?

For seller-fulfilled orders, the new tax rate will be applied to all orders when the order status changes from “Pending” to “Unshipped” on or after October 1, 2019. Please visit our help page on Pending Orders for details about order status. For FBA orders, the new tax rates will be applied to orders that shipping preparation is started at Amazon Fulfillment Center on or after October 1, 2019. Please be diligent when to make your pricing decisions in particular in the following 3 cases, and make necessary update on prices. Please be informed that Amazon asks sellers to set tax inclusive prices for their offers and does not update prices on behalf of sellers.

  1. Pre-order products with release date after October 1, 2019.

    For pre-order products, an order status is changed from “Pending” to “Unshipped” on release date minus sellers’ lead-time to ship.

  2. Orders placed before October 1, 2019 with Convenience Store Payment

    It may take up to six days from order placement to payment completion for Convenience Store Payment method. During these six days, the order stays in “Pending” status. Please refer to our help page on Convenience Store Payment Settings for more information.

  3. Orders placed right before the Consumption Tax rate change (e.g. September 30, 2019)

    Due to a time lag in order status change, new tax rate might apply to orders placed on September 30, 2019, if their order status changes from “Pending” to “Unshipped” after 10/1/2019.

10. If an order is received on September 30 and shipped on or after October 1, 2019, which tax rate applies?

At Amazon.co.jp, the tax rate is decided when an order changes from “Pending” to “Unshipped.” Accordingly, for orders that change from “Pending” to "Unshipped” on or after October 1, 2019, the new tax rates apply (standard rate: 10%, reduced rate: 8%). However, please note that the order price is fixed when the order is confirmed (when the buyer places the order), and cannot be changed afterward. For more information about “Pending” orders, see the Help page

11. Will there be any change in fees?

New tax rate will be applied to fees you are charged on October 1, 2019, 0:00 JST.

  1. The Tax rate applied to our Selling Fees (displayed as tax exclusive) will change from 8% to 10%. For details on Selling Fees, visit our help page.
  2. The Tax rate included in Fulfillment by Amazon Fees (displayed as tax inclusive) will change from 8% to 10%.
  3. The Tax rate included in the Shipping Charge for Individual Sellers (displayed as tax inclusive) will change from 8% to 10%. For details of new shipping charge, visit here .
  4. Tax rate included in Cash on Delivery (COD) Fee (displayed as tax inclusive) will change from 8% to 10%. (Now: \324, after October 1: \330)

12. Will seller fees still be based on tax-inclusive product prices after the consumption tax increase? If so, wouldn’t this effectively be a price increase, since they would reflect the 2% increase in the tax rate?

The method for calculating seller fees will not be changed. We apologize for the inconvenience, but please note that seller fees are also subject to the consumption tax increase, because they are charged in exchange for providing a service. Although seller fees will reflect the 2% increase in the consumption tax rate, please note that this does not represent an increase in our fees, only an increase in the amount of consumption tax we collect.

13. Do I need to update prices?

No, it is up to you whether to update price or not taking new tax rates (Standard Tax Rate: 10%, Reduced Tax Rate: 8%) into consideration.

14. Will prices at Amazon.co.jp be updated automatically in accordance with the tax increase?

No. There are no plans to update prices at Amazon.co.jp automatically. Sellers are responsible for updating the prices of their products to take into account the new tax rates (standard rate: 10%, reduced rate: 8%). Sellers are also responsible for determining when to update their prices.

15. Is there a way to update prices in bulk?

Amazon provided sellers with “Price Scheduling File” and “Price Update File for Tax Reform” to support sellers’ price update during tax reform and stopped support for these files on October 16, 2019. Please use Prince and Quantity File, Inventory File or other files to update prices.

16. When should I update prices?

It is up to you, however, please understand that it may take long time until updated prices are reflected on Amazon website around 10/1, as we expect many price update from many sellers around 10/1. In addition, we highly recommend sellers with professional selling plan to use a price update scheduling file. This excel based file not only enables sellers to schedule price update in advance, but also reduces stress on our systems on the day of price update. We will inform sellers of details of this file in August.

17. I sell products that are eligible for the reduced tax rate. How do I set this tax rate?

You can set the reduced tax rate for a product by changing its product tax code to A_GEN_REDUCED. For more information about product tax codes, see our help page: Product Tax Code Setting.

18. What are product tax codes?

Product tax codes are used to set the tax rates applicable to individual products. You can edit product tax codes from the Inventory tab at the top of Seller Central, by clicking Manage Inventory > Details, or by using an Inventory file. Three product tax codes are available: A_GEN_STANDARD, A_GEN_NOTAX_, and A_GEN_REDUCED. These can already be set for products. From October 1, tax rates will be applied to products based on product tax codes: 10% for A_GEN_STANDARD, 0% for A_GEN_NOTAX, and 8% for A_GEN_REDUCED. For more information about product tax codes, see our help page: Product Tax Code Setting.

19. Can I set product tax codes before October 1, 2019?

Yes, you can. For products with product tax codes set to A_GEN_STANDARD or A_GEN_REDUCED on or before September 30, the tax rate of 8% will be applied through September 30. From October 1, the tax rate of 10% will automatically be applied to products set to A_GEN_STANDARD (only). (The 8% tax rate will continue to be applied to products set to A_GEN_REDUCED.) Products with product tax codes set to A_GEN_NOTAX will have a 0% tax rate applied both before and after October 1. For more information about product tax codes, see our help page: Product Tax Code Setting.

20. What tax rate is applied if I do not set a product tax code?

If a product tax code is not set for a product, the standard tax rate (currently 8%, rising to 10% from October 1, 2019) is applied to that product automatically.

21. What tax rate will apply to shipping fees for products eligible for the reduced tax rate?

The 10% tax rate will apply to all shipping fees, regardless of the product.

22. What tax rate will apply to fulfillment fees for products eligible for the reduced tax rate?

The 10% tax rate will apply to all fulfillment fees, regardless of the product.

23. What tax rate will apply to gift wrapping fees for products eligible for the reduced tax rate?

The 10% tax rate will apply to all gift wrapping fees, regardless of the product.

24. Is there a way to determine whether a product is eligible for the reduced tax rate or not?

At Amazon.co.jp, the seller bears responsibility for sales. If it is unclear whether a product is eligible for the reduced tax rate, please contact the National Tax Agency.

About the reduced tax rate system for consumption tax (National Tax Agency) [External link for reference purposes; in Japanese]

https://www.nta.go.jp/taxes/shiraberu/zeimokubetsu/shohi/keigenzeiritsu/index.htm

Reduced consumption tax rate telephone counseling center (reduced tax call center)

https://www.nta.go.jp/taxes/shiraberu/zeimokubetsu/shohi/keigenzeiritsu/04-1.htm

25. I sell products that package multiple items together as a set. Some of those items are food items. What tax rate should I use?

Sets packaging food and other products together are referred to as “combined products.” Combined products with a price of 10,000 JPY or less (excluding tax) per set, of which 2/3 or more relates to food, are eligible for the reduced tax rate. For more information, see the National Tax Agency homepage.

26. Can I check the tax rate currently applied to my products, such as from the Inventory Management screen?

You can check the product tax codes set for your products. However, note that product tax codes must be changed by sellers. Amazon does not change product tax codes to match products.

27. Will the price tables on the Payments screen and Manage Inventory screen change?

There are no plans to change them.

28. What tax amounts will be displayed on reports related to payments and orders?

The tax amounts displayed on reports related to payments and orders will be calculated based on tax-inclusive prices, set by sellers, and tax rates, set using product tax codes.

29. Will there be any changes to reports as a result of this revision to the tax system?

For sellers who currently have “Consumption tax settings” set to “No” (check your consumption tax settings here), values displayed on settlement/order reports and related APIs will change. Until now, reports and API output related to settlement and orders only display tax inclusive price. After the change, tax inclusive price and tax amount will be displayed on order related reports and APIs and tax exclusive price and tax amount will be displayed on settlement related reports and APIs. If you are using an in-house system or developer packages, system updates may be required. In this case, please either contact to your tool provider or take the necessary actions internally. You can check whether action is necessary and view the system update guidelines here. (Seller Central login required.) For more frequently asked questions about this topic, see the Help page.

30. I would like the tax rate to be displayed on Order Reports and Settlement Reports. Are there plans to make this possible?

Our apologies, but Amazon’s systems make it impossible to display the tax rate on Order Reports and Settlement Reports.

31. I use advertisements with a set daily budget. Is this calculated exclusive of tax? For example, if I use my maximum budget, will I be billed for that amount + tax?

Yes. Daily budgets are calculated exclusive of tax. Accordingly, you would be billed for that amount + tax.

32. What tax rate will be applied to return fee if a product placed before 10/1 is returned after 10/1?

New tax rate of 10% will be applied to return fee.

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