- Law No 68 (24 August 2013).
- The Mirrlees Review (Dimensions of the Tax Design, 2010) refers to this earmarking at 304–5. The review points out that earmarking has political advantages but less flexibility in the use of funds.
- See ‘The Business Federation Opposes a Reduced Tax Rate’, Nikkei, 3 July 2014.
- The threshold is 10 million JPY. Where the amount of taxable sales of an enterprise in the base period is not more than 10 million JPY, it is exempt from the tax during the taxable year (Law§9 1). ‘Base period’ means the year two years prior to the current year for an individual enterprise, and the business year two years prior to the current years for a corporation (Law 2*). The English translation of the legal text is taken from Go Kawada, Guide to Japanese Taxes (Zaikei Shoho Sha, 2013). Such an enterprise opts to become a taxable person by filing an application to become a taxable person (Law 9 1).
- In the context of the JCT, ‘SME’ means enterprises whose taxable sales are less than 50 million JPY.
- ‘62% of SMEs Can Shift Full Amounts of the Consumption Tax’, Nikkei, July 2014.
- The Daiwa Institute of Research Group estimated these amounts.
- For more detailed information and analysis, see Lena Hiort af Ornäs Leijon and Eleonor Kristoffersson, ‘The OECD International VAT/GST Guidelines on Place of Supply of B2B Services and Intangibles' (2014) 3(1) World Journal of VAT/GST Law 32.
- The Guidelines can be found at www.oecd.org/ctp/consumption/international-vat-gst-guidelines.pdf.
- The Guidelines regard the present situation of non-taxation as ‘unintended, not as an intended (or malicious) tax scheme.
- See the guidebook published by the European Commission, Guide to the Mini One Stop Shop, 23 October 2013.
- The Ministry of Finance has not published an official document yet. See ‘The Proposal from the Ministry of Finance: The Consumption Tax on Digital Services from Overseas', Nikkei, 26 June 2014.
- As mentioned above, the VAT threshold in Japan is 10 million JPY.
- According to the present provision, such services are taxable in the place of the office of the person supplying the services through which the service is provided.
- In Japan, the Convention on Mutual Administrative Assistance in Tax Matters came into effect in October 2013.
- The reverse charge mechanism in the EU refers to reversing of liability to pay tax (Art 196 VAT Directive 2006/112); however the Japanese government is now planning to introduce a tax-obligation-reversing-type mechanism, such as that used in Germany (§13b UStG).
- On the JCT from global perspectives see Alan Schenk and Oliver Oldman, Value Added Tax: A Comparative Approach (Cambridge University Press, 2007) 19, 21, 67–69, 177–8.
World Journal of VAT/GST Law
Volume 3, 2014 - Issue 2
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