JCT Registration for Merchants Selling on Amazon Japan
When selling goods directly to customers in Japan through platforms like Amazon, JCT obligations depend on a few factors:
Mandatory Registration:
You are not automatically required to register for JCT just because you are selling in Japan. However, if your annual sales in Japan exceed the threshold of 10 million JPY in year N-2 (2 years prior), you should register.
Amazon’s Requirements:
Even if you do not meet the mandatory threshold, Amazon Japan may require you to either:
Register for JCT (and provide your JCT number), or
Declare that you are exempt because your sales are below the threshold.
Benefits of Voluntary Registration
If you decide to register voluntarily, there are potential advantages:
Customer Request:
Your customers may need qualified invoices to claim JCT on their tax refund. Therefore, they may request that you provide them with qualified invoices, which you can only do if you are JCT registered.
Input Tax Credit:
You can claim back JCT paid on imports (import taxes) or expenses related to your business in Japan, such as FBA (Fulfillment by Amazon), shipping, storage, or professional costs.
Credibility:
Having a JCT number can enhance your standing with Amazon Japan and Japanese customers, as it signals compliance with local tax laws.
However, this also means you must file periodic JCT tax returns, even if you are below the mandatory JCT filing threshold (i.e. 10 million JPY).
Non-Resident Seller Considerations
As a foreign business without a physical presence in Japan, you will need to appoint a tax agent (which could be us). Additionally, because you will be importing goods into Japan, in order to claim back import taxes, you will need to appoint an Attorney for Customs Procedure (ACP).
We can introduce you to an ACP within our network.
Next Steps
If you’re still wondering whether to JCT register, here’s what I recommend:
Confirm Amazon’s Requirements:
If Amazon requires a JCT number or exemption declaration, you’ll need to comply to avoid disruptions to your sales.
Evaluate Sales Volume:
Consider whether your sales have exceeded the 10 million JPY threshold or if voluntary registration is beneficial for your business.
Consider Whether to Appoint an ACP:
Determine how much import tax you will be paying and weigh that against the ACP cost.
Seek Tax Agent Support:
If you decide to register, we can guide you through the process.
Reach Out to Us for JCT Registration Related Inquiries
If you have any questions regarding JCT registration and Japan tax matters, reach out to us using the contact form below.
If you’re in the search for an ACP, we can introduce you to our affiliated ACP.
We’re here to help ensure your entry into the Japanese market is smooth and successful.
