[Green Circle says cross-border] In order to ensure that the new policy before the effective date of the JCT registration number, we must act immediately!

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On December 10, 2021, Japan's ruling party (a coalition of the Liberal Democratic Party (LDP) and the Komeito Party (Komeito)) released its 2022 Tax Reform Framework. It aims to establish a new type of capitalism under the concepts of "virtuous cycle of growth and distribution" and "development of a new post-COVID-19 society". In this context, it is important for companies to realize sustainable growth by increasing investments in R&D and personnel and returning profits to a diverse set of stakeholders. It is from this perspective that we have decided to further strengthen tax reductions for companies that take the initiative to raise employee wages through the 2022 tax reform in Japan. Tax incentives to promote open innovation will be increased to encourage companies to restructure and upgrade their businesses and to increase value added.
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A grace period of 2 years will be given to postpone the deadline for mandatory introduction from January 1, 2022 to January 1, 2024, taking into account the challenges faced by business operators in introducing electronic data retention. Measures will also be taken to implement the upcoming Consumption Tax Invoicing System from October 1, 2023 onwards. After the changes are implemented, buyers who require tax credits will need to provide a compliant invoice with the seller's JCT registration number in order to claim JCT credits and view the amount of tax they will be relieved of.

Japan JCT Qualified Invoice Retention Requirements

1. Only qualified invoicing companies can issue compliant invoices (import tax credit cannot be applied to invoices issued by non-compliant invoicing companies);; and
2. A tax-exempt enterprise needs to become a taxable enterprise in order to be registered as an invoicing enterprise.
3. the Seller's Qualified Invoicing Entity must issue Qualified Invoices at the request of the Taxable Purchaser.
4. A copy or electronic record of the compliance invoice issued must be retained for a period of 2 months to 7 years from the day following the last day of the tax period that includes the date of issuance or delivery of the invoice for provision. 
5. If both the buyer and the seller are taxable enterprises, the seller must deliver a compliant invoice, which must be kept by the buyer (if the invoice is not kept, the buyer cannot, in principle, claim credits and excise taxes paid in the transaction)
In other words, in order to receive the input tax credit, a qualified invoice from the supplier (seller) is required, and a qualified invoice can only be issued by a taxable enterprise registered as a qualified invoice issuer.

Competitive Advantages of JCT Compliance

1. Compliance with tax credits and refunds:
For sellers who have obtained a JCT registration number and are able to issue compliant invoices with a JCT registration number, input JCT invoices generated during the taxable period can be deducted as JCT inputs (declared amount = Selling Consumption Tax (SCT) - Imported Consumption Tax (ICT), Selling Consumption Tax (SCT) being the Consumption Tax that the seller receives from the buyer), and if, after the calculation, the amount declared is a negative amount, then a refund can be made.
2. Clear and safe import customs clearance process:
With JCT, you can have a clearer and more secure import clearance process and billing list.
3. Exclusive JCT support exposure page:
Before October 1, 2023, a limited time, dedicated Corporate Purchase Exposure page will be available for JCT compliant sellers. Sellers who have uploaded their JCT registration number to the Seller Back Office can apply to join the page through their Account Manager for up to 50 ASINs (with corporate pricing or volume discounts set for the ASINs 5%Off to ensure adequate inventory, 3.5 ratings or higher).

Impact of not registering with JCT Japan

1. Decreased order competitiveness: When the new policy comes into effect on October 1, 2023, buyers with a need for tax credits will tend to choose sellers who have been granted a JCT registration number and are able to issue a compliant invoice with a JCT registration number for corporate purchases in order to claim JCT input credits.
   If the seller is unable to obtain the JCT registration number before October 1, it will not be able to provide a compliant invoice with the JCT registration number, and may lose the orders of this part of the customer You can check the orders received by corporate buyers through the following path: SellerPlatform>Order>Manage Order>Check "Corporate Buyers" in "All Orders".
2. Decrease in product competitiveness: After the new policy takes effect on October 1, 2023, in order to protect the shopping experience of customers, Amazon will upgrade the filtering and marking function of the JCT registration number on the enterprise shopping page, so as to facilitate customers to quickly filter the sellers that can issue a compliant invoice with the JCT registration number to purchase, and to enhance the competitiveness of sellers' products.