NTA requires stocktake for liquor tax adjustment on 1 October 2020

The Japanese National Tax Agency (NTA) has announced how adjustments in liquor tax will be handled when they come into force on 1 October 2020.

Liquor tax is normally paid when alcoholic drinks are shipped from the brewery or distillery, so they needed a way of capturing products that had already shipped but not yet been sold – which falls on retailers like bars and liquor shops.

Their solution is to require anyone in the sales chain after breweries who hold large quantities of alcoholic drinks to do a stocktake and pay – or be refunded – the difference between the old and new tax rates.

The categories subject to increased liquor tax are:

• So-called “new genre” (新ジャンル) products, also known as “third beer” (第三ビール – beer-like drinks made without malt as a raw ingredient to avoid taxation based on malt and also to decrease its characteristic bitterness): tax increase of JPY 28 per litre (or JPY 9.8 on a 350 ml can)
• Kajitsushu (果実酒), fruit-based alcohols, such as wine: tax increase of JPY 10 per litre (or JPY 7.5 on a 750 ml bottle)

Categories that will get a reduced liquor tax are:

• Beer: tax decrease of JPY 20 per litre (or JPY 7 on a 350 ml can)
• Happoshu (low-malt beer) with malt content 50% or more: tax decrease of JPY 20 per litre (or JPY 7 per 350 ml can)
• Happoshu (low-malt beer) with malt content 23-49%: tax decrease of JPY 11 per litre (or JPY 3.85 per 350 ml can)
• Other brewed alcoholic drinks (その他の醸造酒): tax decrease of JPY 20 per litre (or JPY 36 per 1.8 L bottle)
• Seishu (sake/nihonshu): tax decrease of JPY 10 per litre (or JPY 18 per 1.8 L bottle)
• Zasshu (other miscellaneous alcoholic drinks) with abv up to 20%: ta decrease of JPY 20 per litre (or JPY 26 per 1.8 L bottle)
• Zasshu (other miscellaneous alcoholic drinks) with abv 21% or more: tax decrease of JPY 1 per 1% abv

None of the tax adjustments apply to mirin.

The requirements apply to any company holding 1,800 litres of alcoholic drinks or more. Any company holding less than 1,800 litres can apply to their tax office to pay or be refunding the difference between the old and new tax rates. Companies must do a stock-take and report quantities of each category held on 1 October 2020, plus the total of additional tax to be paid or reduced tax to be refunded. The information must be submitted on a form supplied by the NTA before Monday 2 November 2020. If a company has several locations, the reporting requirement and calculations apply to the total amount of alcoholic drinks held at all locations.

Links

• Original article (Japanese, National Tax Agency, 2 August 2020)
• Explanatory video (Japanese, YouTube, 2 August 2020)