Seminar about new Japan invoice system

[KyushuWoozy]

Copied from British expats in Japan FB group:

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Sharing this with permission from the organizer

Seminar : New Japan Invoice System for Businesses (Recorded) in English

The new invoice system for businesses is happening from October 2023 and we are hosting a Q&A with an accountant on it.

Link to join : [https://lu.ma/47h12753](https://lu.ma/47h12753)
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We are excited to once again restart our free Q&A with a Japan expert here at Scaling Japan Podcast. In this next seminar, we are joined by Shimpei Wakana again, a certified public accountant with over 10 years of experience who offers personalized service completely in English.

When: September 22, 2023, 10:00 AM - 11:30 AM

We will go over the following topics and have a Q&A for around 30 - 45 minutes to answer any questions you have.

Japanese tax system
Explanation of consumption tax
Explanation of the invoice system
What do you have to do in advance?
What do you need to change your invoices?
Are there any upcoming changes to the tax system in 2023 or 2024

※ The session will be recorded and sent to those who joined.

Join link : [https://lu.ma/47h12753](https://lu.ma/47h12753)

[Teru]

Thank you for this information.

[William]

Thank you very much! Will definitely try to attend.

[KyushuWoozy]

As expected I couldn't find 90-mins during my working day to leisurely watch this, However it is now online:

https://youtu.be/ZSoN70g92L4

Here's a (not that helpful) AI summary:

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### Key Takeaways
- From October 1, 2023, SMEs in Japan must implement the qualified invoice system.
- Register with tax authorities for the qualified invoice system.
- Familiarize yourself with the various consumption tax rates: In Japan, there are different tax rates for different products and services, such as the standard rate of 10%, the reduced rate of 8%, and tax-exempt items. It is crucial to understand the applicable tax rates to accurately calculate and apply the consumption tax on invoices.
- Issue invoices with accurate and detailed information, including the taxpayer's details, taxable amount, and consumption tax breakdown to ensure compliance with the qualified invoice system.
- Keep comprehensive records of all invoices issued and received, along with related transactions and tax calculations, to facilitate accurate reporting and potential tax audits.
- Monitor sales thresholds: Under the qualified invoice system, SMEs need to monitor their sales amounts to determine if they exceed the specified thresholds. The current thresholds for the simplified tax system in Japan are:
- Annual gross sales of up to 10 million yen qualify for the simplified tax system.
- If the annual gross sales exceed 10 million yen, the business may be required to transition to the standard method of tax calculation.
- Update accounting software and procedures to accommodate the qualified invoice system's reporting requirements and accurate calculation of consumption tax.
- Seek guidance from certified public accountants or tax professionals who are knowledgeable about the qualified invoice system. They can provide expert advice, guidance, and assistance in ensuring compliance with the new system and managing tax reporting and compliance effectively.

### Deep Dive
Ask AI anything about the video...

[Gareth]

I joined the seminar.

It was definitely a seminar from the point of view of someone who has an accountant to do their taxes. And the focus was mostly on whether to register or not. There wasn’t a whole heap of new info for those of us that do our own accounting and tax filing.

A few points:

1. If you have ten clients and only one of them needs a qualified invoice number, that would mean that you would need to do it for all of your clients. You can’t pick and choose which clients you do it for. It’s all or nothing.

2. If you mostly have B to B clients, it’s much more likely that they’ll require you to be registered because of the tax implications for them.

3. If you are entirely B to C, and where you don’t get all your customers names, for example a restaurant or a taxi, you can probably get away with not registering. There’s no legal requirement to register.

4. If you have a mix of B to B and B to C, you would have to be registered for all of your clients.

5. If you earn over 10 million yen in a year, you must be registered.

6. If you earn under 10 million in a year, you can choose whether to register based on your clients.

7. There are two ways to do your consumption tax tax filing. One is to pay all the consumption tax you received to the government minus the consumption tax you paid out for your expenses. For the majority of people, this might not work out well because there is no consumption tax on train fares for example so the biggest expense for many wouldn’t count.

8. The other way is to do a simplified qualified invoice. You just pay the government a flat 20% of the consumption tax you receive. However, it’s 20% until the end of 2025, then 50% until the end of 2029, then 100%.

9. For 2023, it only covers the period from October to December, not the whole year

10. For tax you owe from 2023, you don’t pay it until 2025, 2024 in 2026 and so on.

11. If you haven’t registered and want to, there are two ways. Using a simple paper form you can hand in, but you get your qualified invoice number in anywhere from 3-6 weeks. Or do it on the e-tax system and you’ll get it in about a week.


For me, I’m currently B to B and I’ve been forced to register to continue working for them. Have been hoping to build up some B to C clients too but now I realise that there will be tax implications so I need to set my prices accordingly.

What a lot of fun this is.

[KyushuWoozy]

If you earn over 10 million yen in a year, you must be registered.

Thanks, good summary, better by far than AI in this case

In this case 10 million is revenue or profit?

[Gareth]

If you earn over 10 million yen in a year, you must be registered.

Thanks, good summary, better by far than AI in this case

In this case 10 million is revenue or profit?

Thanks!

It’s revenue. If you are earning over that, it’s a nice problem to have!