Japan JCT# Japan JCT Invoice # Amazon Japan Credit Refund

The Japanese Consumption Tax Compliance Invoice Retention System is an important tax requirement that applies to both taxpayers and businesses for the purpose of recording and reporting value-added tax (consumption tax) related information. Under Japanese tax law, businesses are required to provide their customers with compliant invoices that include specific information such as the name and address of the seller and purchaser, JCT tax number (if applicable), date of the transaction, invoice number, description of the goods or services, quantity, unit price, total amount, JCT tax rate and amount of the tax, etc. The JCT tax system is designed to help businesses to keep track of the value-added tax (VAT) they are paying.

From October 1, 2023, the Japan Tax Agency (JTA) will require businesses to provide a compliant invoice with the seller's JCT registration number to consumers who need tax credits in order to claim JCT input credits. If the invoice does not meet the requirements of the new system, the buyer will not be able to claim the tax credit.
Keeping books and invoices for excise tax deductions 
The amount of excise tax payable is calculated by deducting the amount of excise tax on taxable purchases, etc. (purchased tax credits) made during the tax period from the amount of excise tax on taxable sales during the tax period.
In order to deduct the consumption tax on taxable purchases, etc., it is necessary to state this fact, and at the same time, keep books of account corresponding to the separate accounting and separate invoices, etc., to prove this fact.
 
In addition, books of account and invoices describing the facts of taxable purchases, etc., must be kept for seven years, beginning two months after the day following the last day of the taxable period for which the books of account were closed and the invoices, etc., were received. For the sixth and seventh years, only one of them needs to be kept. 

Considering the actual nature of the transaction, the following special treatment may be applied. 
Special handling:
1 If the amount paid (including tax) is less than 30,000 yen, you do not need to keep invoices, etc., but only the account book containing the legal details. 
2 If the amount of payment, including tax, is 30,000 yen or more, but there is a compelling reason for not receiving an invoice, etc., a tax credit may be granted even if the invoice, etc., is not retained. In this case, the compelling reason and the address or location of the counterparty must be stated in a letter containing statutory matters. In such a case, the book containing the statutory matter must state the unavoidable reason and the address or place of the counterparty. 
Entries in books of account and invoices
In order to qualify for the credit for taxable purchases, it is required to keep books of account and invoices that contain legally required information. 
Since there are multiple tax rates for consumption tax, etc., including multiple tax rates such as the reduced tax rate (8%) and the standard tax rate (10%), companies are required to keep separate accounting records of transactions, etc., for each tax rate in order to file consumption tax returns, etc.
Accounting is required for filing excise tax returns, e.g., recording transactions separately for each tax rate.
Tax-exempt companies may also be required to issue separate invoices when doing business with taxable companies.
 
In addition, from October 2023, the requirement for the tax credit will be the retention of books of account and qualifying invoices issued by a taxable business operator who applies to and is registered with the Commissioner of Inland Revenue (a Qualifying Invoicing Business Operator (QIBO)). 
Matters to be recorded in the books of account 
The items that need to be recorded in the books of account to satisfy the credit requirements for taxable purchases are specified below: 
(1) For taxable purchases 
(a) the name of the taxable purchasing party
(b) the date on which the tax is due for payment 
(c) details of the asset or service to which the taxable purchase relates (if the taxable purchase relates to the transfer, etc. of an exempt asset received from another party, details of the asset and the facts relating to the transfer, etc. of the exempt asset) 
(d) Equivalent amounts paid for taxable purchases (including amounts equivalent to excise tax and local consumption tax). 
(2) In the case of specified taxable purchases 
(a) the name of the counterparty to a particular taxable purchase 
(b) the specified taxable date 
(c) details of designated taxable purchases 
(d) the amount of consideration paid for specific taxable purchases 
(e) a statement that a particular taxable purchase relates to a particular taxable purchase for the purposes of the particular taxable purchase 
(3) In the case of retrieval of dutiable goods from a bonded zone 
(a) the date of recovery of dutiable goods from a bonded zone 
(if a special declaration has been filed for the dutiable goods, the date of taking over from the bonded zone and the date of filing the special declaration or the date of receipt of the notification of the decision on the special declaration) 
(b) Details of dutiable goods 
(c) the amount of excise duty and local consumption tax levied on the dutiable goods (excluding the amount of incidental taxes equivalent to these taxes).

Attention: From 2023/10/01 onwards, the buyer can get full credit of consumption tax if he/she keeps a qualified claim, otherwise, only 80% can be deducted (temporary rule).
Input License Notification
Customs duty portion: Calculated on the basis of the type of goods - declared price - agreement between the two countries, etc. It is not deductible.
Consumption tax: Based on the declared price. For goods with a tax rate of 10%, the national tax share is 7.8%. The total amount is entered into the excise tax calculation process and can be deducted.
Consumption tax local tax portion: Based on the national tax calculation. For goods with a tax rate of 10%, the local tax share is 2.2%, which is deductible with the national tax portion in the consumption tax calculation process.

Notes on invoice credits:
1. The name and address of the importer must be the same as that of the claimant in order to be eligible for the credit.
2. Foreign companies need to use ACP to clear customs (use their own name to clear customs)
3. Some of the customs clearance fees can be deducted, some can not be deducted, all based on the invoice. Can get a qualified request and request written on the consumption tax can be deducted.
4. Customs duties, international shipping premiums, labor costs in foreign countries, etc. are not deductible from Japanese consumption tax.
What can be claimed as a deduction for registering for the Japanese JCT standard return?
Import consumption tax collected by Customs, local purchase in Japan, and Amazon FBA fee tax (Amazon commission and advertising fee tax are not deductible).

I haven't received my JCT tax code yet, how can I issue invoice to my customer?
The following measures can be taken:
1. You can notify the buyer in advance of the delay in invoicing, and then reissue the invoice to the customer after the JCT tax number comes down.
2. Or issue an invoice without a registration number before receiving the JCT tax number, and then reissue the invoice after receiving the JCT tax number.
Do I need to file a tax return after canceling my Japanese tax code?
It is necessary to file a tax return for the year after the tax-exempt business is canceled, but not for the second fiscal year after the cancellation, whereas a taxable business (with sales over 10 million yen) is required to continue to file a return for two years.