The revised Consumption Tax Law (in 2018) is scheduled to take into effect on October 1,2023.
Revision point;
A registered seller (newly regulated in law) has a duty to issue a Qualified Invoice (newly regulated in law) to a buyer when making a taxable transaction in selling goods and/or rendering services.
Only a registered seller on enrollment of National Tax Authority may issue a Qualified Invoice. Registration is kept under the approval system of National Tax Authority.
Whereas a Qualified Invoice being kept in paper or electronic form (newly regulated in law) and also its entry is recorded in bookkeeping by a buyer, a consumption tax imposed on the taxable purchase may be eligible to deduct for his consumption tax return.
Article 57-4 of the Revised Consumption Tax Law of JAPAN is the new regulations for the issuance of the Qualified Invoice.
Revised Consumption Tax Law (tentative translation in English)
Article 57-4 (Duty of a registered seller)
Paragraph 1
A registered seller has a duty to issue a qualified invoice in which the following 6 items being recorded to a buyer upon his request whereas a taxable transaction is made on assets and/or services within the country.
Item(1) the name of a registered seller, and, registered number for qualified invoice
Item(2) the date of a taxable transaction
Item(3) the description of transaction on taxable assets and/or services
Item(4) the taxable amount of the tax-excluded price or the tax-included price
Item(5) the amount of the consumption tax(by tax rate category)
Item(6) the name of a buyer with whom the documents being furnished
Paragraph 2
In case of a retailing business issuing a qualified invoice, such business may issue the qualified simple invoice.
Item(1) the name of a registered seller, and, registered number for qualified invoice
Item(2) the date of a taxable transaction
Item(3) the description of transaction on taxable assets and/or services
Item(4) the taxable amount of the tax-excluded price or the tax-included price by tax rate category
Item(5) the amount of the consumption tax(by tax rate category)
Paragraph 3
In case of granting an allowance on a sales return, a registered seller has a duty to issue a qualified invoice in which the following 5 items being recorded to the buyer.
Item(1) the name of a registered seller, and, registered number for qualified invoice
Item(2) the date of a sales return to which the date on the taxable transaction corresponds
Item(3) the description of assets and/or services on a sales return
Item(4) the taxable amount of the tax-excluded price or the tax-included price on sales return
Item(5) the amount of the consumption tax on sales return
Note; When deducting an allowance for sales returns to which the preceding qualified invoice corresponds, it is furnished in description of a negative invoice in Japan. (i.e. contra revenue account)
Paragraph 4
In case of error or mistaken on the qualified invoice, a registered seller has a duty to issue a new qualified invoice for correction to the preceding invoice.
Paragraph 5
A registered seller may issue a qualified invoice in the form of electronic record instead of the paper.
Paragraph 6
Pursuant to the provision of the cabinet order, a registered seller has a duty to keep a copy for his records, in either form of paper or electronic record, of the qualified invoice which is issued to the buyer.
In case of the electronic record, the recording conditions shall be pursuant to the ordinance of the Ministry.