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

What is the compliance invoice retention system?

The compliant invoice retention system enables corporate buyers who can present compliant invoices to receive input credit for Japan Consumption Tax. After the implementation of this reform, only sellers with a Japanese consumption tax registration number will be eligible to issue such compliant invoices to corporate buyers.

Compliance invoice from Amazon:

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

However, after the new system comes into effect, only invoices containing the Japan Consumption Tax Registration Number will be considered as compliant invoices for corporate buyers to apply for tax deductions. If a seller has provided a Japan Consumption Tax Registration Number in Seller Central, Amazon will begin showing that tax number on their invoices on October 1, 2023.

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

1. Obtain the Japan Consumption Tax Registration Number;

2. Enter the Japan Consumption Tax Registration Number in the tax settings of Seller Central.

Do I have to enter a Japan Consumption Tax Registration Number to sell on Amazon?

If you are a taxable business and you want to become a registered biller, you must provide Amazon with a Japan Consumption Tax Registration Number. However, if you are not obligated to pay Japanese consumption tax, obtaining a Japanese consumption tax registration number and providing it to Amazon is an option for you. However, Amazon plans to roll out a feature that will let business buyers know which items can be invoiced for compliance. If you do not provide a Japan Consumption Tax Registration Number, this may negatively affect your sales to corporate buyers. So determine whether you need this registration number based on the impact on your business.

Finally, the Japanese consumption tax rate has been increased from 8% to 10% on October 1, 2019. Food and non-alcoholic beverages are products with reduced tax rates, and the tax rate remains at 8%. In the next issue, we will explain how to obtain the Japan Consumption Tax Registration Number.