Amazon backstage released important information today. From October 1, 2023, the Japan Consumption Tax (“JCT”) “Compliant Invoice Retention System” reform initiated by the Japan National Tax Agency will take effect. This will affect sellers' sales on Amazon's Japan site.
According to the "Compliant Invoice Retention System", from October 1, 2023 , the Japan site seller's compliant invoice needs to have a Japan Consumption Tax Registration Number ("JCT Registration Number") so that buyers can apply for JCT input deduction and Check out their tax deductions.
After the reform takes effect, the seller's JCT registration number needs to be displayed on the invoice issued by Amazon so that buyers can claim tax deductions.
A JCT registration number is a number issued by the Japanese tax agency to sellers with JCT tax entities (sellers who pay JCT). The seller will need to become a JCT taxable entity and be obliged to pay tax as required if any of the following conditions are met:
1. The seller's taxable sales during the base period exceeds 10 million yen.
2. The seller's taxable sales in the base period did not exceed 10 million yen, but the taxable sales in the first half of the previous base year exceeded 10 million yen.
3. If the above conditions are not met, but the seller has registered a Japanese company with a registered capital of more than 10 million yen (including 10 million), JCT registration is required regardless of the sales volume.
It is important to note that the base period refers to the two base years preceding the tax period. The starting month of the base year depends on the seller's company type:
Sole Proprietorship: The base year is from January to December.
Company: The starting month of the base year depends on the seller's company. For Japanese companies, the base year is usually April to March of the following year.
For Chinese companies, the base year is usually January to December.
Consequences of not registering
If Japanese sellers do not register for JCT and submit to Amazon, then after the reform on October 1, 2023, sellers will not be able to issue compliant invoices to buyers, so buyers will not be able to apply for tax deductions and will not be able to purchase sellers’ products. It will have a direct impact on the decline in sales.
Therefore, sellers who meet the registration conditions must obtain a JCT registration number before October 1, 2023.
Information to be submitted for seller registration:
1. Scanned copy of the company's business license (three certificates in one);
2. Scanned copy of the company's legal person's passport and stamped with the company's seal;
3. POA signed by the legal person;
4. Application form;
5. A screenshot of the store's account information on the platform;
6. Sales data of the company's sales year;
Japan's consumption tax policy is more complicated. Now that Amazon has issued a registration notice, sellers and friends should pay attention to it as soon as possible. Amazon’s compliance requirements will only get stricter, and the sooner you prepare, the less risk you have.