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Tax for Education

Japan With Kids - Forums: Education in Japan: Tax for Education
By rach on Saturday, July 6, 2002 - 9:12 am:

Hello,
My question is can an unapproved internatinal kindergarten charge tax?
Rachel


By Cornelia on Saturday, July 6, 2002 - 11:01 am:

If you are talking about the 5% consumption tax that is charged on everything that is sold, including services and repairs, then if the school is a business, and has to file a tax return as a business, they are obligated by law to collect consumption tax on behalf of and then pay it to the government, on what they are selling.

Very few international schools have actual non-profit status. But even non-profits may have to collect consumption tax. (There are many different kinds of non-profit business set-ups). The only place I've purchased something where there was apparently no consumption tax charged was at the Paper Museum in Asukayama Park (and I stress the word "apparent"). When you buy a fixed price meal at lunchtime for example for Y900, it may appear that you are not paying the tax, but you are, because the price of the meal is actually Y857 + 43 tax. The convention in that case is to include the tax in the price posted on the blackboard. Some schools also follow this convention when they publish their tuition rates. Some don't. Usually they tell you whether or not the consumption tax is included.

Duty free shops allow you to avoid consumption tax on items over a certain value, if you hold a foreign passport and are on a temporary visitor's visa, but this is only at stores that have some special qualification for this.


By Cornelia on Sunday, July 7, 2002 - 10:47 am:

You can read more about consumption (and other taxes) here:
http://www.jei.org/Archive/JEIR00/0019f.html

There is (or was) a small business exemption. Tara wrote me directly and pointed this out, which is why I did a bit more research. This exception was probably aimed at the un-manned fruit and vegi stand at the edge of a field sort of businesses, but may have been accessed by larger small businesses.

So I dug a bit more. I found the following exclusions from taxation:
"The following transfers of assets and related transactions within the domestic economy are exempted from taxation.
(a) transfer or lease of land
(b) transfer of securities and transfer of means of payment
(c) interest on loans and insurance premiums
(d) transfer of postal and revenue stamps
(e) fees for government services, international postal money orders, international postal transfers, and foreign exchange
(f) medical care under the medical insurance laws
(g) social welfare services specified by the Social Welfare services Law
(h) midwifery service
(i) burial and crematory service
(j) transfer or lease of goods for physically handicapped persons
(k) tuition, entrance fee, facilities fees and examination fees of schools designated by Article of the School Education Law
(l) transfer of school textbooks
(m) lease of housing units "
http://www.mof.go.jp/english/zei/report/zc001e05.htm

But the entity has to fulfill certain requirements to be classified as "Education". The school you are referring to may not have fulfilled these requirements. In fact, I have reason to believe that most international schools and also "cram" schools may not fulfill the legal requirements of "education".

I would love it if someone else took up this ball and ran with it because I am on the way to the airport.


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