The EU-like ‘invoice’ system will be introduced from October 2023. In principle, an application for registration as a qualified invoicing business was to be submitted to the tax office by the end of March 2023 to obtain a registration number. However, the introduction of the invoicing system has not yet fully penetrated the public. The Government has decided to extend the deadline for the registration application form until the end of September 2023. The consumption tax rate in Japan is 10%, but a reduced rate of 8% applies to ‘food and beverages excluding alcoholic beverages and restaurant food’ and ‘newspapers published at least twice a week for which a subscription agreement has been concluded’. Simply importing goods into Japan from abroad is represented as the invoice by an import permit. 1. if a foreign business operator conducts transactions in Japan and wishes to deduct Input VAT (=Input Consumption Tax) in its accounting books, he/she takes the following ways. 1) Taxpayer that are already for consumption tax in Japan By the end of September 2023, submit an ‘Application for Registration as a Qualified Invoicing Business’ to the tax office and obtain a registration number; from October onwards, issue an invoice with […]
The EU-like “invoice system” will be introduced in October 2023. The invoice will be the official invoice that certifies the consumption tax rate and tax amount among businesses, and is also required when filing consumption tax returns, receiving credits, or refunds. As a general rule, an “qualified invoicing enterprise” must be submitted to the tax office by the end of March 2023 to obtain a registration number; like in the EU, the registration number must be indicated on the invoice. The invoice system has not yet spread among the public, and the National Tax Agency is likely to change the system so that registration will be possible after April even without stating “difficult circumstances” in consideration of business operators’ readiness. Non-residents of foreign countries under the Japanese Consumption Tax Law who enter the Japanese commercial stream will also be required to designate a Japanese tax representative, submit an application for registration, and obtain a registration number. When simply importing goods into Japan from abroad, an import license will be substituted for an invoice. Once registered with the tax office to issue an invoice, businesses with annual sales of 10 million yen or less that are currently exempt from paying consumption […]
From October 2023, the invoice system for consumption tax will be introduced in Japan. １．Registration as a ‘Qualified Invoice System’ for existing taxable enterprises (obtaining a VAT number)In order to deduct Input VAT, you have to register as a ‘Qualified Invoice System’; the deadline is the end of 2023/3. Non-resident Japanese individual enterprises and corporations wishing to deduct Input VAT must register. If a non-taxable enterprise registers, it can deduct Input VAT but must file a consumption tax return. ２.The simplified taxation systemThe simplified taxation system applies to individual enterprises and corporations with taxable turnover of up to 50 million yen. Input VAT can be deducted on a deemed basis. For example, in the case of a service business, 50% can be deducted as Input VAT. However, the simplified taxation must be notified in the year before the beginning of the business year. (The simplified taxation must be notified by the end of December 2022 in the case of individual enterprise. If the deadline is missed, this benefit is not granted for the year in question). ３.Transitional measuresTransitional measures have been established to take into account the impact on transactions. For purchases from tax-exempt businesses, an Input VAT deduction of 80% […]
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