Japan JCT

On October 1, 2023, a new policy on the retention of compliant invoices for Japanese Consumption Tax (JCT) will come into effect. After the new policy comes into effect, buyers with corporate purchasing needs will not be able to claim JCT credits if they receive invoices without the seller's Japanese JCT registration number.
According to official data from the National Tax Agency (NTA) at the end of August, more than 3.56 million people have registered as taxpaying entities, and the NTA has received 3.88 million applications for JCT registration numbers. The monthly increase in the number of JCT registrations in Japan is generally on an upward trend, and it is expected that the number of applications will further increase rapidly near October 1, which may lead to a further increase in the length of registration.
Therefore, in order to ensure that the JCT registration number is obtained as soon as possible, sellers on the Japanese site should immediately submit the registration application through a reliable tax agent (e.g. Green Circle Accounting Firm).

1. Can I not register with JCT Japan?
According to Japan's JCT tax law, a seller who meets any of the following conditions is a JCT taxable entity and must register and file a tax return according to tax requirements:
(1) Taxable sales for the base period are greater than 10 million yen;
(2) The amount of tax payable in the first fiscal year is less than 10 million yen, but the amount of tax payable in the first half of the previous fiscal year is more than 10 million yen;
(3) The company's registered capital is 10 million yen or more.
If you do not reach the limit of sellers do not register JCT can still be normal sales, enjoy tax exemption policy, do not need to declare consumption tax, and will not incur the relevant professional service fees. But the buyer's customers can not have invoices credit, will certainly have an impact on the seller's sales. At the same time, your store does not have the opportunity to buy a dedicated support exposure page.
For sellers with registration obligations, if you want to have a long-term and stable operation in Japan, it is recommended that you consider using the ACP service and registering for a JCT tax ID number to enter the Japanese market in a compliant manner, avoiding the risks and troubles of the Customs and Excise Department and the Taxation Department, and improving your reputation and competitiveness.

2. Is the JCT tax code a mandatory information for ACP customs clearance?
From October 1, 2023, the JCT compliance invoice retention system and the new ACP customs clearance regulations will come into effect at the same time. Overseas enterprises bound to ACP reverse customs clearance JCT tax number is not the necessary information for customs clearance, sellers without JCT tax number can still use ACP customs clearance.

3. Can I get a tax credit or refund after registering with JCT?
The premise of applying for JCT tax refund: you need to register JCT tax number (legal person number) and file a return, choose the standard (principle) filing method for taxable sales return, the input JCT invoices generated in the taxable period (e.g., import excise tax, Japan local purchase, Amazon FBA fees, etc., which contain JCT compliant invoices) can be used for the taxable consumption tax deduction, and if there is a remaining balance after deduction, you can in principle make a refund, but in general, considering that the refund may have a higher risk of tax audit and the problem of refund bank account number, it is recommended to keep the credit. In principle, if there is any money left after the credit, it can be refunded, but in general, considering that the tax refund may have a higher risk of tax audit and the problem of the bank account number of the tax refund, it is recommended to keep the credit.
Sellers who are not filing standard returns (simplified returns) can apply for the preferential tax rate policy and the actual tax paid is 2% of taxable sales.
Sellers who are not obliged to become JCT taxable entities for the time being are also required to pay tax. Sellers are required to pay import excise duty at the import clearance stage for reverse engineering purposes. This is regardless of whether the seller is a JCT exempt entity or not.

4. How do I clear customs after registering with JCT?
Registered JCT sellers, it is recommended that sellers use the ACP + JCT mode of customs clearance, different from the traditional trade in the IOR filing importer that is the role of the "import claimant", cross-border sellers to become a real "import claimant", ACP customs agent is only responsible for assisting in customs clearance and payment of duties and other operations. The ACP customs agent is only responsible for assisting in customs clearance and payment of taxes and other operations. Binding ACP+JCT for customs clearance reduces the chance of being inspected and allows for fast customs clearance. Therefore, ACP mode + JCT tax code is undoubtedly the best way for customs clearance.

5. I have not received my JCT registration number after October 1, how can I issue an invoice?
According to the guideline of Japan tax office, the seller can notify the buyer in advance of the delay in invoicing, and then reissue the invoice to the customer after the JCT number has been issued, because the number is not clear yet.

6. What are the points to note after registration as a qualified taxable enterprise?
When a seller registers with JCT as a taxable enterprise, he or she must file a regular tax return according to the requirements of the tax office, and must file a consumption tax return even if the sales volume in the base period is less than 10 million yen.