According to Nikkei News learned that the Japanese government is ready to strengthen the consumption tax levied on overseas mobile games.
The Japanese government reportedly plans to impose an obligation to pay consumption taxes on platform companies such as Apple and Google, which operate between game creators and consumers by providing content on app stores.
Japan is expected to follow the European model and design its own system for taxing the tech giants’ games.
About half of the top 100 smartphone games sold in Japan in 2022 were developed by foreign companies, with the largest number coming from Chinese companies, according to U.S. research firm Sensor Tower. In some cases, the creators of these games are not paying Japanese tax authorities the consumption taxes they receive from Japanese users.
Because many foreign game companies are small and medium-sized businesses, they do not have offices in Japan, which makes it difficult for Japanese tax authorities to collect taxes.