{"id":1438,"date":"2022-08-26T21:33:40","date_gmt":"2022-08-26T12:33:40","guid":{"rendered":"https:\/\/skadvisory.jp\/en\/?p=1438"},"modified":"2026-03-17T21:56:30","modified_gmt":"2026-03-17T12:56:30","slug":"new-japan-qualified-invoice-system-and-import-jct-japan-consumption-tax","status":"publish","type":"post","link":"https:\/\/skadvisory.jp\/en\/new-japan-qualified-invoice-system-and-import-jct-japan-consumption-tax\/","title":{"rendered":"Japan Qualified Invoice System and JCT Compliance (Japan Consumption Tax)"},"content":{"rendered":"\n

Recently, many companies have been registering as Qualified Invoice Issuers for Japanese Consumption Tax (JCT) due to the new invoice system introduced in October 2023. This new system is similar to the EU's VAT invoice system.<\/span><\/p>\n\n\n\n

After October 2023, your Japanese customer cannot claim input JCT credits unless the sellers (suppliers) issue a qualified invoice that includes a JCT registration number. To issue a qualified invoice, sellers (suppliers) need to be a taxable entity and obtain a JCT registration number.<\/span><\/p>\n\n\n\n

Before October 2023:<\/span><\/h4>\n\n\n\n

Any customer (Company-B) who paid for goods or services could deduct input JCT regardless of whether the seller (Company-A) was registered for JCT. There was no requirement to verify the tax status of the seller.<\/span><\/p>\n\n\n\n

After October 2023:<\/span><\/h4>\n\n\n\n

Any customer (Company-B) can only deduct input JCT if Company-A, the seller, is registered and can provide a qualified invoice with a JCT registration number. If Company-A cannot issue such an invoice, Company-B may choose not to continue purchases from them.<\/span><\/p>\n\n\n\n

If Company-A sells only to consumers and not businesses, it may not need to issue qualified invoices since consumers typically do not claim JCT tax returns.<\/span><\/p>\n\n\n\n

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Once Company-A obtains a JCT invoice registration number, it becomes a taxable entity required to file JCT returns regularly.<\/span><\/h4>\n\n\n\n

For non-resident entities (Company-A) importing and selling in Japan, the standard procedure involves three steps:<\/span><\/p>\n\n\n\n

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  1. Pay import JCT to customs: 10% of the import customs value.<\/span><\/li>\n\n\n\n
  2. Collect JCT from customers in Japan: 10% of the sales price.<\/span><\/li>\n\n\n\n
  3. File a JCT tax return and pay the net JCT to the tax office.<\/span><\/li>\n<\/ol>\n\n\n\n

    If Company-A paid the import JCT as the importer using an Attorney for Customs Procedures (ACP), they need only pay the net amount of sales JCT minus import JCT.<\/span><\/p>\n\n\n\n

    If Company-A paid the import JCT but was not the importer, they must pay all the collected sales JCT without deducting the import JCT.<\/span><\/p>\n\n\n\n

    Therefore, using an ACP to act as the Importer of Record (IOR) is crucial for managing JCT deductions and refunds. If another company acts as the IOR, you cannot deduct the import JCT, resulting in significant costs.<\/span><\/p>\n\n\n\n

    We strongly recommend using our ACP services to ensure you can act as the IOR, optimizing your JCT handling. Our team has extensive experience helping clients become importers and successfully manage their JCT responsibilities. You can rely on our expertise to navigate these complexities.<\/span><\/p>\n\n\n\n

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    ACP Service (Attorney for Customs Procedures) Import Japan<\/a><\/h4>\n\n\n\n

    Foreign entity can become Importer of Record (IOR) by appointing an Attorney for Customs Procedures (ACP)<\/a><\/p>\n\n\n\n

    Learn more<\/span><\/i><\/div><\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n

    What Is a JCT Tax Representative and Why Is It Required?<\/span><\/h2>\n\n\n\n

    When a non-resident foreign entity becomes subject to Japan\u2019s Consumption Tax (JCT), it is required to appoint a JCT Tax Representative (Tax Agent).<\/span><\/p>\n\n\n\n

    If a non-resident company sells goods to customers in Japan, it typically collects 10% consumption tax on those sales. This collected JCT must be reported and submitted to the Japanese National Tax Office, unless the entity qualifies as a tax-exempt business. (See: \"Are we a Tax-Exempt Business?\"<\/a><\/span>)<\/span><\/p>\n\n\n\n

    If the entity is JCT-liable\u2014or voluntarily registers as a taxable entity, such as by obtaining a Qualified Invoice Issuer Number\u2014it must appoint a JCT Tax Representative to handle all tax-related procedures in Japan, including JCT tax filings.<\/span><\/p>\n\n\n\n

    In the JCT tax return process, the paid import JCT can be offset against the collected JCT.<\/span><\/p>\n\n\n\n