Tax: the New Qualified Invoice System in Japan - Effective From 1 October 2023: Requirements and Best Practice

Japan has implemented a Qualified Invoice System for claiming input consumption tax credits.

It requires businesses to register as a so-called Qualified Invoice Issuer (‘QII’) to be allowed to issue Qualified Invoices.

A Taxpayer, i.e., a foreign or domestic business filing consumption tax returns in Japan, is required to receive and retain a Qualified Invoice for claiming input consumption tax credits in a purchase transaction.

A key point of the new invoice system is that any business registered as a QII in Japan will assume the Taxpayer status and will thus be obligated to file a consumption tax return, even if the business had been exempted before, related to the special rules for small and medium-sized enterprises.

Juergen Dumont, the Partner in Outsourcing explains the details covering following topic:

1. Key aspects of the new Qualified Invoice System – effective from 1 October 2023
2. The new Qualified Invoice System: Points of attention
   1. From the viewpoint of the Seller
   2. From the viewpoint of the Buyer
3. The Qualified Invoice – Key requirements, simplifications and exemptions
   1. Form and content requirements
   2. Simplifications and exempt transactions
4. Claiming input tax credits and practical aspects
   1. Transitional measures for transactions without a qualified invoice
   2. Accounting treatment of non-creditable input tax
   3. Updating the tax codes in the accounting system
   4. How to calculate consumption tax under the new invoice system
5. Simplified calculation of consumption tax liability for SMEs and NewCos
   1. Special 20% rule as a transitional measure
   2. General simplification rule by type of industry
6. Other topics
   1. Transitional rules for services billed before 1 October 2023
   2. The new electronic invoicing standard JP-PINT
   3. References

Please download today to explore further details. 

Should you want to know more details and obtain the full report, please feel free to contact Juergen Dumont on (juergen.dumont@mazars.jp).