The 20% special provision ends with the 2026 tax year. For the 2027 and 2028 tax years, sole proprietors can use the "30% special provision." So how will the consumption tax you pay change if you choose the simplified taxation system?
The payment amount under simplified taxation is: consumption tax on sales × (1 − deemed input tax rate). When converted to the percentage of payment amount relative to consumption tax on sales for each business category according to the National Tax Agency, it looks like this:
- 30% special provision: 30%
- Simplified taxation Type 1 (wholesale business): 10%
- Simplified taxation Type 2 (retail business, etc.): 20%
- Simplified taxation Type 3 (manufacturing, construction, etc.): 30%
- Simplified taxation Type 4 (businesses not falling under other categories): 40%
- Simplified taxation Type 5 (service industry, etc.): 50%
- Simplified taxation Type 6 (real estate business): 60%
If the consumption tax on sales is 500,000 yen, the 30% special provision would be 150,000 yen, and Type 5 simplified taxation would be 250,000 yen (this is an example calculation of the estimated amount combining national and local consumption taxes).
- Type 3 has the same percentage as the 30% special provision
- For Type 1 and Type 2, the simplified taxation system results in a smaller payment amount
- For Type 4, Type 5, and Type 6, the 30% special provision results in a smaller payment amount
- If consumption tax incurred on expenses exceeds 70% of the consumption tax on sales, the standard taxation method will be smaller than the 30% special provision
- The business category is determined by the content of sales. To confirm which category applies to your business, check with the National Tax Agency's guidance, the tax office, or a tax accountant
- The 30% special provision requires that the taxable sales in the base period (two years prior) be 10 million yen or less. For simplified taxation, the requirement is 50 million yen or less
- If you plan to use simplified taxation starting from the 2027 tax year, the standard deadline for filing the notification is December 31, 2026
Crewbook invoices can be issued with a breakdown of consumption tax by tax rate. By recording the consumption tax amount for each transaction from the invoice stage, you can reduce the effort required when tallying the annual consumption tax on sales later. Invoices and contracts are available from the Free plan.
Reference: National Tax Agency "FY2026 Tax System Reform Special Feature," National Tax Agency Tax Answer No. 6505 "Simplified Taxation System"
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※This article is information provided by Crewbook. It includes introduction of our own services.
This article is general information provision, and individual judgments should be confirmed with specialists such as tax accountants and tax offices. The content of the systems described is as of October 30, 2026, and may change due to future amendments or changes in operations.
