Handling consumption tax after the Japanese tax system revision (October 1, 2019): Overview

On October 1, 2019, the Japanese tax system will change in three ways: (1) The consumption tax rate will be raised from 8% to 10%; (2) A reduced tax rate will be introduced; and (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. Amazon will respond to these revisions to the tax system as described below.

Response to increase in consumption tax rate

1. Price updates

   Following the consumption tax rate increase on October 1, 2019 (Japan time), Amazon.co.jp will continue to display prices as it currently does, with consumption tax included. Both tax exclusive and tax inclusive prices will be displayed for Business customers. Amazon will not update prices on behalf of sellers, therefore, please be sure to update the sale prices of your products to reflect the new tax rates (standard rate: 10%, reduced rate: 8%).

   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.

2. When the new tax rate will be applied

   For seller-fulfilled orders, the new tax rates (standard rate: 10%, reduced rate: 8%) will be reflected to orders that changed from “Pending” to “Unshipped” on or after October 1, 2019 on Amazon system. For more information about “Pending” orders, visit our help page. For FBA orders, the new tax rates will be reflected to orders that shipping preparation is started at Amazon Fulfillment Center on or after October 1, 2019. Please plan the timing of price changes carefully especially in the cases below. In addition, please check tax amount on order or settlement reports for actual tax rate that is applied to orders.

   
   
   1. Pre-orders of products scheduled to go on sale on or after October 1, 2019

      An order for pre-ordered items change from “Pending” to “Unshipped” at the moment they go on sale minus the seller’s shipping lead time.

   2. Orders placed before the increase in Consumption Tax Rate with Convenience Store Payment

      It will take up to six days until customers finish payment after an order is placed. During the six days, the order stays as “Pending”. Please refer to our help page about Convenience Store Payment.

   3. Orders placed just before the tax rate increase (September 29th ~ 30th)

      For seller-fulfilled orders, there can be a time lag between orders being received from buyers and those orders changing from “Pending” to “Unshipped”. For FBA orders, it will take up to 48 hours for shipping preparation after customers’ payment.

   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)
3. Effect on fees

   The fees reflecting new tax rate you are charged will be adjusted as of October 1, 2019 0:00to reflect new tax rate as per the following:

   Please note that there can be a time lag until new fees are fully reflected on the systems.

   
   
   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. 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.

Response to introduction of reduced tax rate

Sellers whose products are eligible for the reduced tax rate can specify this by setting the appropriate “product tax code”. “Product tax code” can be set from the Manage Your Inventory at Seller Central, or through feed files such as Custom Templates, Inventory Loader files, etc, or APIs. Currently, any product with no “product tax code” set is treated as a taxable product, and a “product tax code” for normal tax rate is applied automatically. For information about setting product tax codes, please see our help page.

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)

Response to introduction of invoice-based method, requiring the total amount for each tax category to be shown on invoices and other documents

In accordance with the new requirements to show the total amount for each tax classification on invoices and other documents, receipts issued to customers/buyers by Amazon will indicate the tax rate and tax amount for each item purchased, as well as the total amount paid under each tax rate. As a result, Amazon will begin adding together the amount of tax paid on all products from all sellers, including sellers with no tax obligations in Japan (sellers who currently have Consumption tax settings set to “No”).

As a result, reports related to settlement and orders and APIs will change for sellers who currently select “No” for “Consumption tax settings”.　Until now, reports and API output related to settlement and orders only displayed prices inclusive of tax. After the change, they will display the pre-tax price and tax amount separately. For sellers using private systems, or connecting to our system through developer packages, system updates may be required. Please take action as necessary. You can check whether action is necessary and view the system update guidelines here. Frequently asked questions can be found in our help page.

Note also that, for products shipped overseas, buyers will be charged the pre-tax price, exclusive of consumption tax. Order Reports and the Order API will show the pre-tax price and a tax amount of 0. However, when listing products, the price must still be entered with tax included. As a result, no additional action will be required in this respect.

This document describes our response policy as it currently exists. This policy may be altered or extended in future.

Related Help pages

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

Changes if “Consumption tax settings” are set to “No” when the Japanese tax system revision takes effect (October 1, 2019)

Consumption tax settings

Consumption Tax Indication

Product Tax Code Setting