Japanese Consumption Tax is tricky especially when you want to choose the tax filer status in order to get a refund while you can choose a non-filer status by default. Here are the 5 most important rules that you should know.
1) For SMEs and individuals, for the first 2 years, you can be exempt from the Japanese Consumption Tax,
2) If the sales were more than 10 million yen in the 2 years ago, you will automatically be a Consumption Tax filer. In another word, you can choose to be or not to be a Consumption Filer.
3) Once you choose to be a Consumption Tax filer, you will have to stay the same for at least 2 years. If you buy a fixed asset of more than 1 million yen (調整対象固定資産), you will have to stay the same for the next 2 years from the end of the year when the fixed asset was bought. That means you will have to stay as a consumption tax filer for at least 3 years if you purchase one in the first year. If you purchase a fixed asset of more than 10 million yen (高額特定資産) while you are a tax filer and using Standard Method (I will explain it later), you will stay as a consumption tax filer for 3 years include the year that the asset was bought.
4) If both salary and taxable sales (domestic sales and export) in the first 6 months of a fiscal year are more than 10 million yen, you will be automatically a taxpayer of Consumption tax.
5) Simplified Method. You can choose Simplified Method (see the explanation for Simplified Method) if the sales in the year that is 2 years ago were under 50 million yen. Once you choose it, you will have to use the Simplified Method for the 2 consecutive years.