The following domestic and import transactions, except for certain transactions deemed non-taxable, are subject to consumption tax. The consumption tax rate is 10% in principal (inclusive of local consumption tax rate of 2.2%) from October 1, 2019. A reduced consumption tax rate will also be introduced at the same time. The reduced tax rate of 8% (inclusive of local consumption tax rate of 1.76%) will be applied to food and beverages, except for alcoholic drinks and dining out, and newspapers published more than twice a week (based on a subscription contract).
Overview of consumption tax
1.
Domestic transactions: the transfer or rental/lease of assets or the provision of services as a business in Japan by an enterprise for consideration.
2.
Import transactions: cargo retrieved from a bonded zone.
Financial transactions, capital transactions, and certain transactions in the areas of medical care, welfare and education are deemed non-taxable. Export transactions and export-like transactions such as international communications and international transport are exempt from consumption tax.