New Tax Rules for Authors Selling in Japan

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You might have received the news from Amazon about Japan’s consumption tax on e-books. I had to read this email about three times to fully understand it.  Here is the curated text (easier to read and understand I hope) for fellow authors.  Only two things are really important:

  • to reach a revenue of 70% your minimum e-book price needs to be at least ¥250
  • your revenue will be calculated from the net price (sales price minus 8%)
    … well and maybe a third one: Avoid the number 4 or 9 in your sales prices for Japan

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Starting October 1, 2015
8% consumption tax will be applied to all e-books sold to customers living in Japan. List prices set for Amazon.co.jp will be then tax-inclusive, meaning that the 8% consumption tax will be included in the list price you choose.  Authors can change their price at any time subject to KDP’s Terms and Conditions.

Let’s say you set your Amazon.co.jp list price at ¥1250, inclusive tax, which will be deducted from this price, your revenue payments would be calculated on a resulting price of ¥1157 (¥1250 minus 8% tax).

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Minimum and Maximum List Prices
The new minimum and maximum list prices for the 70% royalty plan will be ¥250 (min) and ¥1250 (max) inclusive of tax (or ¥231.48 and ¥1,157.41 without tax).  When you choose your sales price, keep in mind that in Japan, the number 4 and the number 9 have a bad image, so avoid these particular numbers.

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Updates for Tax-Inclusive List Prices
Amazon’s KDP pricing grid will be updated to accept tax-inclusive list prices.  In the pricing page, authors will also see their suggested price without tax to help them understand how royalties will be calculated.  For those authors who set their Japan marketplace price automatically from their US list price, Amazon will convert the US list price to local currency which will be then the list price, including tax.”  Again watch out that your price for books sold in Japan is at least ¥250 to reach the 70% revenue.

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