News Details


Invoicing System _ New Requirements for Japanese Consumption Tax

List of news

1. Introduction
An invoicing system will be introduced to calculate the creditable consumption tax amount properly, starting on 1 October 2023. An invoicing system has been adopted in some major EU countries, and we assume that some Japanese companies are requested to indicate Tax ID through transactions with overseas companies. In Japan, the application for a registered supplier will start on 1 October, 2023. In this News, we will mention the summary of an invoicing system.

2. Background 
An invoicing system will be introduced due to the application of a multiple tax rate system, under which the reduced tax rate of 8% is used in certain transactions. The new system requires taxpayers to clarify the details of transactions including the applied tax rate, the classification of taxes, and the tax amount. The creditable consumption tax amount is allowed on the condition that the taxpayer preserves the qualified invoices issued by “registered supplier.” Therefore, it is recommended to understand the new invoicing system clearly and grasp its impact on business.

“Registered supplier” 
An operator who has applied to the tax office and is eligible to issue “qualified invoices” as a registered supplier

“Qualified invoices”
    Invoices with certain required information such as the applied tax rate and the tax amount; sellers show the accurate information about transactions to buyers in the invoices.

3. Preparation for the invoicing system
The following three matters should be confirmed for the preparation of an invoicing system.
a) Whether the tax status is a taxable business operator or a tax-exempt business operator
b) Whether a taxable business operator is qualified as a registered supplier who can issue “qualified invoices”
c) Whether a registered supplier can correspond to the adequate system and issue invoices satisfying certain conditions 

4. Conclusion 
In this News, we mentioned “the invoicing system _new requirements for Japanese consumption tax.”
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.

(Reference / in Japanese)
National Tax Agency 
(Accessed on 28 June , 2021)