063 Limitation on the exemption of purchase tax
2011 Tax Reform will have a great impact on the exemption of purchase tax regarding consumption tax.
When the percentage of taxable sales of all sales is over 95%, all of the consumption tax on taxable purchases was included in the calculation of the exemption before. However, the 2011 Tax Reform will change the rule in the way that when taxable sales are over 500 million yen, only taxable purchases that corresponds taxable sales are included in the calculation of the exemption, regardless of the percentage of taxable sales.
Measurement of whether the taxable sales are over 500 million yen is based on taxable sales during the tax period.
This revision will be effective from the year beginning from April 1 2012.
