1. Introduction
Both the Electronic Books Preservation Act and Qualified Invoice System are rules for documents related to business transactions. The two rules also aim to streamline tax procedures by accelerating the digitalization of business transactions in Japanese society.
In this News, we will briefly introduce the two rules and mention how they are related.
2. Electronic Books Preservation Act
The Electronic Books Preservation Act allows companies to retain accounting books and tax documents in digital or electronic format. It also abolishes printing and retaining electronic documents such as invoices and purchase orders; it requires companies to preserve data as it is. This new rule aims to reduce burdens of storing accounting books and tax documents in paper format and improve productivity by digitalization.
3. Qualified Invoice System
The Qualified Invoice System is a rule to receive an input tax credit on taxable purchases for Japanese consumption tax purposes. It aims to enhance proper consumption tax filing and payments under a multiple tax rate system.
Under the new system, both sellers and purchasers have to meet the following requirements.
Sellers
Sellers must issue qualified invoices and retain them.
Qualified invoices must include certain information such as a registration number and the consumption tax amount.
Purchasers
Purchasers must comply with certain bookkeeping rules and retain qualified invoices issued by qualified invoice issuers in order to claim input tax credit for taxable purchases.
4. Electronic Books Preservation Act and Qualified Invoice System
Qualified invoices can be issued either as paper format or as data. In case a qualified invoice is issued and received electronically, it must be retained as data and meet the requirements under the Electronic Books Preservation Act.
5. Digitalization of business processes
Shifting from the traditional way of paper-based storage, the Electronic Books Preservation Act and Qualified Invoice System will also play an important role in enhancing business processes by digitalization.
Under the Electronic Books Preservation Act, electronic business transactions must be preserved as data. In this trend, more businesses will rely on a document management system (DMS) which can put all types of documents in one place effectively and securely.
In addition, the Japanese Digital Agency is in the process of developing digital invoice, JP-PINT. It is the Japanese version of Peppol, an international network for sending and receiving electronic documents. JP-PINT corresponds with the Qualified Invoice System, and it can also support cross-border business transactions via the common standard of digital invoice.
6. Conclusion
In this News, we mentioned the Electronic Books Preservation Act and Qualified Invoice System.
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
References (in Japanese)
National Tax Agency
Special Site for the Electronic Books Preservation Act
https://www.nta.go.jp/law/joho-zeikaishaku/sonota/jirei/tokusetsu/index.htm
Outline of the Qualified Invoice System
https://www.nta.go.jp/taxes/shiraberu/zeimokubetsu/shohi/keigenzeiritsu/invoice_about.htm
Digital Agency
JP-PINT
https://www.digital.go.jp/policies/electronic_invoice/
Query on the phone+81-3-6821-9455