Twilio Japan (Twilio Japan G. K.) is a resident entity of Japan, and is required by the Japan National Tax Agency to collect Japanese Consumption Tax (JCT) on sales of its services to customers located in Japan. This guide will explain the basics of Twilio taxes in Japan. Continue reading for more details.
When will Twilio Japan start charging JCT?
Starting August 2019, Twilio Japan will begin collecting JCT on services sold to Twilio Japan customers. JCT for the previous month is assessed and applied to your account on the first day of each month for the previous month’s usage.
For example, you will be charged JCT for your August usage on September 1st.
Will I be charged JCT?
All customers with service addresses in Japan are subject to JCT. Please confirm your service address is correct for accurate taxation on your Twilio project.
For help with this, please see Add or Update the Service Address or Tax ID on your Twilio Project.
Can I be Tax Exempt for JCT?
No. As per legal requirements, Twilio Japan is obligated to collect JCT from all customers located in Japan.
How is JCT determined?
JCT is applicable based on the type of products or services that are purchased. We have determined that most of Twilio Japan’s services are subject to JCT. Please see below for examples of non-taxable and taxable line items.
What Rate is JCT Charged?
Twilio's services will be subject to the JCT rate determined by the Japanese National Tax Agency. As of October 2019, the applicable tax rate for these services is 10%.
For example, a customer in October 2019 would be charged the JCT standard rate of 10% for all taxable sales. If this customer spends ¥1,500 with Twilio out of which ¥1,000 is taxable, they would be charged an additional ¥100 for JCT, for a total of ¥1,600.
Total sales: ¥1,500
Total taxable sales: ¥1,000
+ Japanese Consumption Tax (JCT) @ 10%: ¥100
Total including taxes: ¥1,600
Taxable Twilio products and services include the following:
- Outbound or Inbound SMS (e.g. JAPAN Outbound SMS - Accrete )
- Voice calls (e.g. Programmable Outbound Minute - Japan - Toll Free)
- Flex (e.g. Flex - Active User Hours)
- Whatsapp (e.g. WhatsApp Outbound Template Message - Armenia)
- Enterprise plan (e.g. Twilio Custom SaaS Monthly Fee)
Some Billing adjustments have tax implications:
- Credits applied against specific usage will refund you taxes at the same rate as the respective product (e.g. Credit - Voice Japan Outbound)
- Minimum spend adjustments are taxed at the same rate as the respective product (e.g. Quarterly Min Spend Adjustment - Voice)
Whereas, some Billing adjustments do not have tax implications:
- Promotional balances are not taxable (e.g. Promo - Twilio.org)
Where can I see the JCT charged?
JCT can be found on your invoice in the Usage Summary section under “Taxes”.
Taxes are also visible in the Invoice Details section, where we specifically call out any JCT charged.
For more details, please see Reading your Twilio Invoice.