Japan Invoice Template
Create free Japan invoices online with VAT/JCT
Create free Japan invoices online with VAT/JCT
Find out if you need to register for VAT in Japan and how to build a compliant tax invoice. As a business supplying goods or services to Japan, ensure that you are issuing tax invoices with all of the necessary information included. Simplify your VAT compliance in Japan with free invoice templates.
Japanese Consumption Tax registered businesses must produce compliant tax invoices, including all required details, as stipulated by NTA. Invoices must be delivered with every transaction and all records kept by the supplier.
|✔ Business name and address|
|✔ VAT/JCT number|
|✔ Invoice date|
|✔ Unique, sequential invoice number|
|✔ Customer name and address|
|✔ Customer JCT/VAT number|
|✔ Gross sale amount including JCT|
|✔ Currency used|
|✔ Tax amount and tax rate applied to each item|
VAT is an indirect consumption tax that applies to the production and distribution of goods and services, and that is collected at each stage of the supply chain. VAT is collected from the end customer by the supplier and transferred by the supplier to the relevant tax authorities. In Japan, the indirect consumption tax applied to the supply of goods and services is called the Japan Consumption Tax (JCT).
JCT is collected on the supply of all taxable goods and services to Japan, including digital services, E-Commerce, and imports. The tax authority responsible for setting guidelines and enforcing JCT compliance is the National Tax Agency (NTA).
The Japanese Consumption Tax carries a range of rates, depending on the type of supply:
|VAT Rates & Types||Included goods and services|
|10% – Standard||Most goods and services supplied for consumption in Japan. The rate is comprised of both national and regional levies.|
|8% – Reduced||Supply of food, non-alcoholic beverages, and certain subscription newspapers.|
|0% – Zero-rated||Exports, transfer or the lease of exportable goods, and other export-related goods or services.|
|0% – Tax-Exempt||The sale or lease of land, financial services, medical treatment, social service, tuition, residential rent, and education.|
Once you have met the threshold for VAT/JCT registration, you will be required to comply with yearly tax returns to the NTA. Payment is due at the time of filing via an authorized bank or post office. Failing to submit returns on time can result in hefty fines and penalties, including high interest on outstanding JCT balances.
While foreign individuals and entities operating in Japan are liable for JCT, they are not generally eligible for consumption tax reclaim and refund. Furthermore, non-Japanese businesses must appoint a local tax agent to act on the entity’s behalf with regard to taxation.
If you are supplying goods and services to another VAT/JCT-registered business, you will be exempt from collecting tax. Rather, under the reverse-charge mechanism, the recipient of the supplies will assume liability for JCT.
The threshold for JCT registration is the same for local and foreign companies supplying goods or services in Japan or importing goods into Japan. Some taxable services include consultancy or marketing services, as well as charging entry to events or conferences. Foreign businesses storing inventory or distributing goods in Japan may also be liable for VAT. Once you are obligated to register, you will also be required to comply with on-going requirements, for example, maintaining records and filing tax returns.
The JCT threshold is JPY 10,000,000 of sales during any 12-month period, whether for foreign or local entities. In addition, start-ups that raise JPY 10,000,000 or more in capital will be immediately liable for JCT. If your business has sold less than or is expected to sell less than the threshold amount, you are not required to register.
Voluntary registration for companies that do not meet this threshold is possible. This is beneficial insofar as registered businesses may reclaim VAT/JCT. However, since foreign entities or individuals conducting business in Japan are not entitled to reclaim JCT, voluntary registration is inadvisable.
Most businesses do not need to formally register for JCT. Once you have determined that you are liable for JCT, you will be obligated to collect, account for, and report JCT. Once you have filed your JCT for the first time, this will be considered registration, and you will be allocated a tax number and local tax office. This VAT registration number legally establishes your business in Japan and will be used in all tax-related activities.
E-Commerce businesses and digital service providers supplying Japanese customers and meeting the threshold requirement must register after appointing a local tax agent. Once you have determined that you are liable to collect JCT, you will be required to register.
An important requirement for foreign businesses liable for JCT in Japan is the mandatory appointment of a local tax agent.
|To do so, you must supply the following information:|
✔ Business name & address
✔ Proof of incorporation
✔ Business tax number
✔ Details about the services or goods supplied
✔ Name & personal information of tax agent, if applicable