Japanese Invoice System – overview of the “Qualified Invoice Record Method”

About Invoice System
Japanese Invoice System is introduced for managing the multiple consumption tax rates. In order to have a tax credit for a buyer, qualified invoice issued by a registered seller must be kept.

About Invoice
Invoice (Qualified Invoice／インボイス) is a document in which the seller informs buyer about the correct information regarding consumption taxes.
Necessary items are as follows:
1) Sellers’ name and registration number
2) Date of the transaction
3) Descriptions of the products or services
* Indicating that the item is subject to 8% reduced tax rate
4) Prices classified (with or without tax) into each tax rate (10% or 8%)
5) Consumption tax amounts according to tax rates
6) The name of the buyer who receives the invoice
＊Italic items to be added to the “current official invoice” （区分記載請求書）
＊The format can be either paper or digital data.

☆☆As a seller☆☆
A registered seller needs to issue a qualified invoice when requested by a counter party (buyer) who is a taxable person / company. The seller must keep the copy of the invoice for a certain period.
Registration must be done by September 30, 2023, if the seller to be an issuer as of October 1, 2023.

☆☆As a buyer☆☆
A buyer needs to keep qualified invoices from the registered counter party (seller) in order to receive tax credits.

Exemptions e.g.
– Buyer can issue and keep the document such as “details of purchase” by themselves, which is confirmed by the seller.
– Invoice less than 10,000 yen (9,999 yen or less) for small businesses

<References> NTA website “Outline of the Invoice System“