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JCT Tax Follow

Overview

Beginning on or shortly after April 16, 2020, Zoom will begin collecting JCT for Japan. 

Frequently Asked Questions – Japanese Consumption Tax (JCT)

What is JCT?

JCT is the abbreviation of Japanese Consumption Tax which is a value-added tax levied at a rate of 10% on most goods and services bought and sold for use or consumption in Japan.  It is generally due when goods and/or services are sold. It is a consumption tax because it is borne ultimately by the final consumer.

Who has to pay JCT?

Generally, JCT is payable by the supplier who is selling goods or services to its customers. The JCT is invoiced by the supplier and collected from the customer, and subsequently, the supplier remits the collected JCT to the government.

Note: JCT will generally not be charged on resellers. However, these customers might be required to self-account for JCT under a "reverse charge rule. " In these circumstances, the customer reports JCT in its JCT return and will need to assess its entitlement to claim any portion of the JCT as input tax credit.

Where does JCT apply?

JCT generally applies to all transactions for consumption in Japan.

How is Zoom determining which customers JCT applies to?

Zoom will apply JCT if the location of the contact address entered by the Customer is in Japan.

Why did I get a notification email if I am not located in Japan?

In order to ensure complete and thorough notification to any of our customers who may be impacted, we sent the notification communication to all customers who had a “Bill To” OR “Sold To” address in Japan.

Why is Zoom assessing JCT starting on or shortly after April 16, 2020?

Zoom has undertaken an assessment of its services and determined that some are subject to JCT in Japan.  Additionally, as Zoom grows its international presence, it has implemented the systems necessary to identify customers who are subject to JCT and properly reflect charges on invoices.  Zoom will begin assessing JCT on or shortly after April 16, 2020. 

Is there a minimum threshold purchase amount before JCT is applied?

No. JCT applies to sale of all Zoom’s services.

What exemptions are available and how does a customer notify Zoom?

There are generally no exemptions that are available to Japanese residents, unless the supply is for consumption outside of Japan (that is, the “sold to” location is outside of Japan).

Are there any special exemptions applicable for government entities and charities under which JCT may not be charged?

Government entities and charities are not eligible for special exemptions.

Are there any JCT obligations for me as a customer?

If you qualify for any special exemptions (e.g., as a reseller), no JCT will be charged to you. However, in this case, you will need to assess whether you are required to self-assess JCT under the “reverse charge rule” (which depends on the nature of your activities and whether you would otherwise have been entitled to claim a full input tax credit had JCT been charged by Zoom).  You will need to assess whether you are entitled to claim any part of the reported JCT as input tax credit in the same JCT return.

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