From October 2023,Invoice systemwill be introduced.

The consumption tax rate has been raised to 10%, and we are now accustomed to both 8% and 10% consumption tax rates being applied, but the invoice system is a new system related to this consumption tax reform. In this article, we will explain the outline of the invoice system and the specific steps to take in response to the new system.

There may be various procedures that need to be completed, so we recommend that you start preparing as early as possible.

What is the invoice system?

The official name of the invoice system is "Qualified invoice storage method"It's called.
Under this system, the requirements for input tax deduction are to keep accounting books in the appropriate manner and to properly retain accounting books and qualified invoices that meet the requirements.
To understand this system, let's briefly review how consumption tax works.

How consumption tax works

Consumers do not pay consumption tax directly to the tax office, but pay it to the business that provided the goods or services along with the price. Businesses report the consumption tax they receive from consumers and pay it to the tax office.
In this case, in principle, businesses declare and pay the amount of consumption tax received from sales minus the consumption tax paid on purchases, in order to avoid double taxation on the same product.

Input tax credit system

In calculating consumption tax, the amount of consumption tax paid on purchases can be deducted as input tax credit.
In order to claim the input tax credit8% and 10%It was necessary to properly classify and keep accounts, and to keep invoices etc. with the tax rates etc. correctly stated (Method of storing classified invoices, etc.).

The invoice system changes the rules regarding which businesses can issue invoices and what information should be included.

Taxable and tax-exempt businesses

There are taxable businesses that are required to pay consumption tax, and tax-exempt businesses that do not have to pay consumption tax even if they receive it from consumers.
In certain cases, such as when taxable sales exceed 10 million yen for the fiscal year before last in the case of an individual, or for the business period before last in the case of a corporation, the person becomes a taxable business and is required to file a consumption tax return.
Even if your taxable sales are low and you are considered a tax-exempt business, you can still become a taxable business by filing a notification. This is because you may be able to receive a consumption tax refund if your consumption tax paid exceeds your consumption tax received, for example, if your overseas sales ratio is high.

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