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In the last issue, we learned that the Japanese National Tax Agency (NTA) has released the Japan Consumption Tax (JCT) revision policy system. The system stipulates that from October 1, 2023, the Japan Consumption Tax compliance invoice retention system will come into effect. Today, let's continue to see what is Japan's consumption tax JCT policy?

What is Japan Consumption Tax?

The full name of Japanese Consumption Tax is Japanese Consumption Tax , or JCT for short. It is a tax that Japanese consumers pay when purchasing goods.

For business purchases, the buyer can deduct the JCT amount (=JCT input deduction) from the tax payable to the Inland Revenue Department.

This system revision includes the following four points:

1. Extend the application period of the transitional measures for the registration of eligible billers;

2. Rejection and cancellation of registration by the tax authority without notification and cancellation of registration after receiving false statements;

3. Review of transition measures for taxable purchases by non-qualified invoice issuers (purchase tax credits when providing electromagnetic records related to classified invoices);

4. Other amendments.

How should Amazon sellers in Japan respond to this system revision?

Earlier we introduced the compliance invoice retention system, the link is as follows:

One article to understand the Amazon Japan compliance invoice retention system (effective October 1, 2023)

After the new system takes effect, sellers who want to issue compliant invoices on Amazon Japan must first register for a Japanese consumption tax registration number. How to obtain a Japanese consumption tax registration number?

To obtain a Japan Consumption Tax Registration Number, an application can be submitted online (e-Tax system) or an application document can be sent to the National Tax Agency (NTA). Applications will be accepted from October 1, 2021. The Japan National Tax Service recommends that to obtain a Japan Consumption Tax Registration Number by October 1, 2023, an application should normally be submitted by March 31, 2023.

Amazon sellers who meet any of the following conditions are obligated to pay tax:

1. During the base period, the taxable sales in Japan exceed 10 million yen ;

2. During the base period, the taxable sales in Japan did not exceed 10 million yen , but in the first half of the previous base year , the taxable sales exceeded 10 million yen ;

3. You are an enterprise with a registered capital of more than 10 million yen .

If you are a non-taxable seller, but you choose to change your status to a taxable seller, you can also obtain a Japan Consumption Tax Registration Number.

The base period is the two base years preceding the tax period. The starting month of the base year depends on your company type:

You are a sole proprietorship : your base year is from January to December ;

You are a company : The starting month of your base year depends on your company. For Japanese companies , your base year is usually April to March . For Chinese companies , your base year is usually January to December .

If the Japan Consumption Tax Registration Number has not been entered in the Amazon back office after October 1, 2023, Amazon will not be able to issue a compliance invoice for your products after the new system takes effect. Buyers may avoid purchasing such products that cannot be invoiced in compliance, resulting in negative effects such as declining sales.