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The National Tax Agency of Japan (NTA for short) has released the Japan Consumption Tax (JCT) revision policy system, which stipulates that the Japan Consumption Tax compliant invoice retention system will come into effect from October 1, 2023. As early as the end of April, the Amazon Japan Station Forum has issued related announcements, the announcements are as follows:

What is the compliant invoice retention system?

The compliant invoice retention system allows corporate buyers who can produce compliant invoices to obtain Japanese consumption tax input credits. After the implementation of this reform, only sellers with a Japanese consumption tax registration number are eligible to issue such compliant invoices to corporate buyers.

Compliant invoice issued by Amazon:

Since October 1, 2019, Amazon Japan has been invoicing business buyers and sole proprietors on behalf of sellers. The provided invoice templates are as follows:

However, after the new system comes into effect, only invoices containing the Japanese consumption tax registration number will be considered compliant invoices required for corporate buyers to claim tax credits. If a seller has provided a Japan Consumption Tax Registration Number in Seller Central, Amazon will begin displaying this tax number on their invoices on October 1, 2023.

What measures do sellers need to take after the system takes effect?

1. Obtain a Japanese consumption tax registration number;

2. Enter the Japanese consumption tax registration number in the tax settings of the seller platform.

Is it mandatory to enter a Japanese consumption tax registration number to sell on Amazon?

If you are a taxable business and you want to be a registered biller, you must provide Amazon with a Japanese consumption tax registration number. However, if you are not obligated to pay Japanese consumption tax, then obtaining a Japanese consumption tax registration number and providing it to Amazon is an option for you. However, Amazon plans to introduce a feature that will let business buyers know which items are eligible for compliant invoices. If you do not provide a Japanese consumption tax registration number, this may negatively affect your sales to business buyers. So depending on the impact on your business, determine if you need to get this registration number.

Finally, the Japanese consumption tax rate has been increased from 8% to 10% on October 1, 2019. Food and non-alcoholic beverages are reduced tax rate products, and the tax rate is still 8%.