Japan: Interim Consumption Tax Payments for Foreign Digital Service Providers

Applies to: Foreign providers of digital services registered for Japanese Consumption Tax (JCT) | Last reviewed: June 2026

If your business is registered for Japanese Consumption Tax (JCT), you may be required to make interim payments during the year — not just a single annual payment. This article explains how Japan’s filing system works, what interim payments are, how they are calculated, when they are due, and how Taxually can help you stay compliant.

Japan’s annual filing system

The starting point for all JCT-registered businesses is an annual tax return. At the end of each tax period, you file a final return and settle any consumption tax due for the full year. For corporations, this return is due within two months of the end of the tax period. For sole proprietors, the deadline is 31 March of the following year.

This annual return is the foundation of Japan’s consumption tax system — everything else, including interim payments, builds on top of it.

What are interim payments?

For businesses above certain thresholds, Japan also requires interim payments throughout the year. Rather than waiting until the annual return to settle the full liability, the tax authority requires these businesses to pay in stages — based on how much tax they paid in the previous tax period.

Japan operates a pay-as-you-go model: interim payments act as deposits against your final annual liability. Any difference — if you have overpaid or underpaid — is reconciled when your final return is filed.

Interim payments are governed by Articles 42 and 43 of the Consumption Tax Act (Act No. 108 of 1988), administered by Japan’s National Tax Agency (NTA).

Do interim payments apply to you?

Interim payments are required if the consumption tax you paid in your previous tax period exceeded JPY 480,000.

If your previous year’s tax was JPY 480,000 or below, no interim payments are required and you file annually only.

Your obligation — and its frequency — is reassessed every year based on your prior-year liability. This means your interim payment requirements can change from year to year as your business grows or your Japanese revenues fluctuate.

Interim payment frequencies and thresholds

The number of interim payments you are required to make depends entirely on your consumption tax liability for the previous tax period.

* Why 11 payments and not 12? Monthly filers make 11 interim payments during the year. The liability for the final period is not covered by an interim return — it is settled as part of your annual final return. This is standard under the Consumption Tax Act and applies to all monthly filers.

These thresholds apply to the national consumption tax component only (i.e., before adding local consumption tax). Local consumption tax is calculated separately alongside each interim payment — see the section below.

How each interim payment is calculated

Semi-annual (1 payment per year)

The amount due is 6/12 (one half) of the consumption tax shown in your previous year’s final return.

Quarterly (3 payments per year)

Each payment is 3/12 (one quarter) of the previous year’s consumption tax liability.

Monthly (11 payments per year)

Each payment is 1/12 of the previous year’s consumption tax liability.

Local consumption tax

Every interim payment includes a local consumption tax component on top of the national consumption tax amount. This is calculated at 22/78 of the consumption tax interim payment amount and must be paid at the same time.

Taxually handles this calculation as part of the interim payment service.

When are interim payments due?

All interim payments must be paid within two months of the end of each interim period.

The specific due dates depend on your tax period start date and your payment frequency. 

Why your payments can change year to year

Your interim payment obligation is recalculated at the start of each new tax period using the prior year’s final liability as the baseline.

This means:

• If your Japanese digital services revenue increased last year, your liability — and therefore your interim payments — will likely be higher this year.

• If your revenue decreased, your interim payments may be lower, or you may drop to a less frequent payment schedule.

• If your liability fell below JPY 480,000, you may no longer be required to make interim payments at all.

Because these figures shift annually, it is important to review your obligations at the start of each tax period.

Legal basis

Interim payment obligations for consumption tax in Japan are established under the following legislation:

• Consumption Tax Act (Act No. 108 of 1988), Articles 42 and 43 — governing interim return filing and payment obligations

• Order for the Enforcement of the Consumption Tax Act (Cabinet Order No. 360 of 1988) — governing calculation rules and procedural requirements

• NTA Guidance: Consumption and Local Consumption Taxes Final Return Guide (published annually by the National Tax Agency)

For the most current official guidance, refer to the NTA’s English-language resources at https://www.nta.go.jp/english/taxes/consumption_tax/.

Summary: Key actions

• Check your previous year’s final JCT liability to determine whether interim payments apply.

• Note your payment frequency: semi-annual (1×), quarterly (3×), or monthly (11×), depending on your prior-year liability.

• Remember that local consumption tax (22/78 of the interim amount) is due at the same time as each payment.

• Expect your obligations to change year to year as your Japanese revenues change.

• Businesses below the JPY 480,000 threshold may voluntarily elect to make interim payments 

Disclaimer: This article is provided for general informational purposes only. It does not constitute tax, legal, or financial advice, and should not be relied upon as such. Tax laws and regulations are subject to change, and your specific circumstances may affect how they apply to your business. Taxually accepts no liability for any actions taken or not taken based on the information in this article. We strongly recommend that you seek independent advice from a qualified Japan-based tax professional before making any decisions relating to your consumption tax obligations.