Business Japan to require foreign businesses to collect 8% consumption tax.

[Barry-xlovecam]

Just like I said, the digital tax wars have started. Countries (other than the EU) claiming foreign jurisdiction to grab tax revenue.

Japanese eCommerce is set for a revamp with government plans to require foreign businesses supplying eServices to Japanese consumers to account for the current 8% consumption tax. The bill amending the Japanese Consumption Tax (JCT) was passed on March 31. more detail https://www.taxamo.com/japanese-ecom...eservices-tax/

You must now collect Japanese taxes and remit to Japan to be 100% legal

Don't be surprised when the US Congress to gets in on the show and enacts an internet sales tax along with revenue sharing with the 49? states that have a sales tax -- it is coming.

[_Richard_]

Originally Posted by Barry-xlovecam

Just like I said, the digital tax wars have started. Countries (other than the EU) claiming foreign jurisdiction to grab tax revenue.

Japanese eCommerce is set for a revamp with government plans to require foreign businesses supplying eServices to Japanese consumers to account for the current 8% consumption tax. The bill amending the Japanese Consumption Tax (JCT) was passed on March 31. more detail https://www.taxamo.com/japanese-ecom...eservices-tax/

You must now collect Japanese taxes and remit to Japan to be 100% legal

Don't be surprised when the US Congress to gets in on the show and enacts an internet sales tax along with revenue sharing with the 49? states that have a sales tax -- it is coming.

with the current amount of tax law in the states, do you have any idea why it hasn't come yet?

[Barry-xlovecam]

Originally Posted by _Richard_

with the current amount of tax law in the states, do you have any idea why it hasn't come yet?

The USA hates big government and new taxes How is the GST handled. That is both a Canadian federal and provincial consumption tax isn't it?

I know (at least for them moment) foreign business selling digital goods are not subject to demand of becoming the nation of Canada's tax collector ( unlike the EU and now Japan).

On inter-provincial sales is the buyer's GST rate collected and remitted on digital sales in general (all)?

[Sly]

States have already been trying it and several have systems in place.

When I did my taxes last year, I had to tell my accountant which state each company was from. That was a pain in the ass.

[ravo]

Originally Posted by Barry-xlovecam

The USA hates big government and new taxes How is the GST handled. That is both a Canadian federal and provincial consumption tax isn't it?

I know (at least for them moment) foreign business selling digital goods are not subject to demand of becoming the nation of Canada's tax collector ( unlike the EU and now Japan).

On inter-provincial sales is the buyer's GST rate collected and remitted on digital sales in general (all)?

The GST is a federal only 5% value added tax (VAT). Most provinces also have a sales (consumption) tax. But, many provinces have merged their taxes with the federal one, creating a HST (Harmonized Sales Tax), which is a VAT-style tax.

Foreign entities selling to Canadian ones are not obligated to collect the tax. Neither is a Canadian company selling to a foreign one. Those are both "tax free".

Transactions between Canadian entities are taxed at the appropriate tax (either GST or HST) based on the province of the buyer.

[Barry-xlovecam]

Originally Posted by Sly

States have already been trying it and several have systems in place.

When I did my taxes last year, I had to tell my accountant which state each company was from. That was a pain in the ass.

For what? You were the end seller?

I read amazon settled with the state of Texas the other day but that was maybe to do with nexus for tax purposes ...

I pay the use tax where applicable for interstate purchase.

Show me the US Federal tax code or you state's tax code (if was it reported as a SALE on you state tax return -- a corresponding agreement between states perhaps in your locale?) where it is stated otherwise?

[Barry-xlovecam]

@ravo HST good answer
I thought it worked like that just was not familiar with the acronym.

If they did that here in the USA there would be acrimony. Can't do that == yadda yadda.

[Mr Pheer]

Too bad. I'm not going to be Japan's tax collector.

[Paul Markham]

Raising debt or raising taxes.

[_Richard_]

Originally Posted by ravo

The GST is a federal only 5% value added tax (VAT). Most provinces also have a sales (consumption) tax. But, many provinces have merged their taxes with the federal one, creating a HST (Harmonized Sales Tax), which is a VAT-style tax.

Foreign entities selling to Canadian ones are not obligated to collect the tax. Neither is a Canadian company selling to a foreign one. Those are both "tax free".

Transactions between Canadian entities are taxed at the appropriate tax (either GST or HST) based on the province of the buyer.

some provinces got rid of the HST, and went back to PST/GST.. long story short the HST was applied to a lot more items than the original taxes were, and pissed off a lot of people

also, isn't canadian companies required to collect GST if they are doing business over a certain amount? i know a business over 30k needs to charge GST and will owe it in taxes?

[Barry-xlovecam]

Originally Posted by _Richard_

also, isn't canadian companies required to collect GST if they are doing business over a certain amount? i know a business over 30k needs to charge GST and will owe it in taxes?

Interesting the there would be any exempt minimum ...

@Mr Pheer: Japan says you MUST -- or else what? LOL!

We Americans started the extraterritorial law horseshit and the USA may be the next to level a newly created federal sales tax on the digital economy -- the fasted growing segment of commerce these days.

[ravo]

Originally Posted by _Richard_

also, isn't canadian companies required to collect GST if they are doing business over a certain amount? i know a business over 30k needs to charge GST and will owe it in taxes?

*ALL* Canadian companies are required to register for and collect the GST/HST. The minimum of $30K applies to INDIVIDUALS operating as a sole proprietorship.

[Barry-xlovecam]

Originally Posted by ravo

*ALL* Canadian companies are required to register for and collect the GST/HST. The minimum of $30K applies to INDIVIDUALS operating as a sole proprietorship.

So, they admit that their tax schema is burdensome ...

Any business seller of goods, casual sales by consumers are exempt (garage sales and such) the exception being titled vehicles or vessels title transfers, are taxable from dollar 1 in my state. (All states in the USA?) require sales tax collection and report filing quarterly (at the minimum amounts of sales) and the taxes collected to be remitted electronically (ACH) these days.

Taxes - Common Sales and Use Tax Exemptions and Requirements

Now in theory I would have to deal with Japanese tax laws?

You, the business, pay the compliance cost -- it is tax deductible from your income

[_Richard_]

Originally Posted by ravo

*ALL* Canadian companies are required to register for and collect the GST/HST. The minimum of $30K applies to INDIVIDUALS operating as a sole proprietorship.

err yep, sorry the sole proprietorship up to 30k

i am curious if foreign companies are able to submit for gst/hst rebate on this paid? and if so, why we even collect it in the first place lol

[ravo]

Originally Posted by _Richard_

i am curious if foreign companies are able to submit for gst/hst rebate on this paid? and if so, why we even collect it in the first place lol

Foreign entities buying from Canadians do NOT pay the HST/GST, so there's no rebate to get...

[ravo]

Originally Posted by Barry-xlovecam

So, they admit that their tax schema is burdensome ...

Isn't ANY tax burdensome on the business that collects it? Be it either, income tax, consumption/sales/VAT tax, payroll tax, health tax, etc, etc, etc.

It's simply a cost of doing business in that particular jurisdiction.

[Barry-xlovecam]

Originally Posted by ravo

Isn't ANY tax burdensome on the business that collects it? Be it either, income tax, consumption/sales/VAT tax, payroll tax, health tax, etc, etc, etc.

It's simply a cost of doing business in that particular jurisdiction.

Fine but this may be the beginning of the end of the WTO agreements. Instead of tariffs governments may (will?) enact new categorized consumption taxes. Same thing but can they get away with that ...

[C]onsumers suffer a loss in surplus because the price they pay rises by the amount of the consumption tax.

Producers gain in terms of producer surplus. The production subsidy raises the price producers receive by the amount of the subsidy, which in turn stimulates an increase in output.

The government receives tax revenue from the consumption tax but must pay for the production subsidy. However, since the subsidy and tax rates are assumed to be identical and since consumption exceeds production (because the country is an importer of the product), the revenue inflow exceeds the outflow. Thus the net effect is a gain in revenue for the government.

In the end, the cost to consumers exceeds the sum of the benefits accruing to producers and the government; thus the net national welfare effect of the two policies is negative. ...
... This section demonstrates that if the consumption tax and production subsidy happened to be set on an imported product at equal values and at the same rate as the tariff reduction, then the two domestic policies would combine to fully duplicate the tariff’s effects. In this case, trade liberalization would have no effect.

The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) agreements have always been cognizant of this particular possibility. The original text says that if after trade liberalization a country takes domestic actions nullifying the benefit that should accrue to the foreign export firms, then a country would be in violation of its GATT (or now WTO) commitments. In other words, it is a GATT/WTO violation to directly substitute domestic policies that duplicate the original effects of the tariff. ...

Equivalence of an Import Tariff with a Domestic (Consumption Tax plus Production Subsidy)

This is clearly a self defeating government policy, and possibly, with a tax taking the place of tarrif (since the goods are virtual not physical) there is no ''port of entry control'', then this would be a GATT/WTO ''breach of agreements'' i.e.; a violation.

The EU and now Japan would have opened a legal can of worms for themselves, in their greed of increased rates of consumption taxes by the class of goods, should this occur; The EU and now Japan will be setting off a trade war that will hurt their economies worse that these taxes will effect the foreign seller.

The foreign seller may either abandon their market and their domestic suppliers will squeeze the domestic consumers markets freely.