Japan To Tax Online Sales Of Foreign-Made Content

Qedward writes with this except from CIO. "Japan is planning to tax sales of foreign online content such as e-books, apps and downloaded music by late 2015. Japanese who purchase electronic content from foreign firms like Amazon.com through overseas servers don't have to pay consumption tax, currently at 5% but slated to rise to 8% in April. That has made foreign content cheaper than apps, MP3 downloads, software, and e-books distributed domestically. Physical products purchased from abroad are hit with consumption tax when they clear customs in Japan, but no such levy exists for online goods. The government plans to close the loophole and make foreign vendors selling consumer goods register with tax authorities and pay the tax. Japanese corporations that buy foreign electronic content such as business software, however, will have to pay the tax directly to the Japanese tax authorities, Nikkei Asian Review reported this morning."

And how will they impose this tax?

[SailorSpork]

The reason consumers are buying digital merch from other countries is because it is cheaper. Entertainment moguls have an even tighter stranglehold on Japan's entertainment business and pricing than even the RIAA in the US and prices for music, movies, games, etc are all much higher, on the order of 50-100% higher. If you try buying a song in the Japan iTunes store for instance, a song that is 99 cents or $1.29 in the US app store is ~$2 in Japan.

So I'm sure what the Japanese people are doing, as an example, is switching their iTunes "home" location to another country and buying iTunes cards from those countries, saving costs and getting equivalent merchandise.

This scheme does not make for easy tracking and taxation on the Japanese side...

Re:It will never work

[Anonymous Coward]

How the hell are they going to police that?

Same as most other governments do, make the onus of reporting on you, and failure to report illegal.

No, they'll do as Europe does. Foreign websites that sell to European customers digital goods automatically add VAT in what you pay. The end user has no reporting to do. It is all automatic.
Omly the US had a fucked up volontary system for reporting due taxes.