Introduction of the invoice system: part 2
- Domestic tax International International tax
- invoice, invoice system, Qualified Invoicing System, Tax planning
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 registration number and file a tax return within the tax filing period. Input VAT (= Input Consumption Tax) is deducted at the time of declaration.
2) Non-residents of Japan who intervene in transactions in Japan
a) Designate a tax representative who is a resident of Japan and notify the tax office.
b) Submit an ‘Application for Registration as a Qualified Invoicing Business Operator’ to the tax office by the end of September 2023 and obtain a registration number. From October onwards, the registration number must be indicated on the invoice and the invoice must be issued and declared within the declaration period. Input VAT (= Input Consumption Tax) is deducted at the time of declaration.
2. Qualified invoices information to be included in the invoice
1) Name and registration number of the invoice issuer
2) Date of transaction
3) Details of the transaction (also state that the items are subject to reduced tax rates)
4) Total amount of consideration broken down by tax rate and applicable tax rate
5) Amount of consumption tax
6) Name or title of the operator to whom the document is to be issued to
Introduction of invoice system 2023.02.13