Simplified vs General Consumption Tax – Which Saves More?

Last time, we explained the difference between the Simplified Tax Scheme and the General Tax Method.

Now the key question is:

Which one saves more tax?

Simple answer

• Low expenses → Simplified is often better

• High expenses → General is often better

Case 1: Simplified is better

The Simplified Tax Scheme may save more tax if:

• Your business has low costs

• You mainly provide services

• You have few purchases

👉 You can keep more tax because the fixed rate may be higher than your actual costs.

Case 2: General is better

The General Tax Method may save more tax if:

• You have large expenses

• You made big purchases (equipment, machines, etc.)

• Your business requires high costs

👉 You can deduct the actual consumption tax you paid.

Easy example

• Service business with low costs → Simplified may be cheaper

• Business with heavy investment → General may be cheaper

Important warning

Choosing the wrong method can:

• Increase your tax

• Lock you in for at least 2 years

For foreign business owners

Do not decide based only on simplicity.Check your:

• Expected sales

• Expected expenses

• Future investment plans

Key takeaway

There is no single best choice.

👉 Simplified = good for low-cost businesses👉 General = good for high-cost businesses

Choose based on your real numbers, not guesswork.