RetireJapan

Any other Qualified Invoice Issuers out there about to embark on their first consumption tax return?

It seems that different tax offices are sending out different packs of info. A friend in another city in a similar boat received a big pack of forms and a long guide in English. My tax office has sent me nowt.

Here are some online guides:

https://www.nta.go.jp/english/taxes/con ... ral_00.pdf

https://www.nta.go.jp/english/taxes/con ... ied_00.pdf

Will be ploughing through all this tomorrow but for now, am looking for solidarity from anyone else who will be taking part!

Guess just me then!

Ploughed through it today. The consumption tax return can be done on the same portal as the normal income tax return and blue form. You can carry over data from the blue form and income tax return so you don’t need to re-input lots of data.

Did the simplified version which means only 20% of the consumption tax I’ve received since becoming a Qualified Invoice Issuer will need to be paid to the tax authority. This 20% is just a grace period amount so looks like it will be more in the future.

There were some questions that baffled me a bit but following the tried-and-tested bumble-through method, I got to the end relatively quickly with a minimal amount of data entry.

In terms of paying the tax I owe, I could select pay by credit card for a small extra fee, so chose that instead of the more complicated bank transfer or form method which adds a middle name risk.

All in all, much less painful than I imagined. Just hope I’ve done it right!

Hmm. Something occurred to me this morning.

I’m paid for my services (money A) and consumption tax is paid to me on top of that (B = A x 10%) to give total amount C (A + B = C).

C is then used as the basis of the calculation for withholding tax D. D = C x 10.21%.

On my tax return, I put C for income, then subtract expenses and deductions, to give amount E. The amount of income tax I should pay is F = E x 10.21%. So my tax refund will be the amount of withholding tax I’ve already paid (D) minus F. Tax refund = D - F.

So far, that all makes sense and is how I’ve been doing my tax return for years.

However, with the new Qualified Invoice Issuer system, I need to pay back a portion of the consumption tax I’ve received as income. Let’s call that G.

My income should now be C - G shouldn’t it? It wouldn’t be fair for me to pay income tax on income I need to hand over to the tax folk as a different tax. However, there is nowhere on the tax return as far as I can tell me for me to make that adjustment.

So what’s the procedure? Is amount G I’ve paid in consumption tax now going to somehow form part of my 2024 tax return? If so, where does it go? Is it just an expense?

Cheers for any guidance!