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A simplified calculation method, as shown on the table below is appropriate to both individual and company that amount of taxable sales (->domestic taxable sales and export sales) for the base period was JPY50 million or less. They must present notification to tax office to apply this method and once applied, this method cannot be changed for at least 2 years.

Based on the simplified calculation method, the tax payable is calculated by using the formula below:

Domestic taxable sales  x  (1 – Assumed cost rate)  x  Consumption tax rate

The assumed cost rate is up to their business nature as below;

Business nature

Assumed cost rate

Taxable period beginning

Wholesale

90%

Retail

80%
Construction, manufacturing, agriculture and fishing

70%

Others (food services etc)

60%

Financial, insurance, transportation, communication and services

50%

Real estate

40%