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Overview of the qualified invoice storage method

The qualified invoice storage method is a method of allocating purchase tax credits that supports multiple consumption tax rates.

1. A registration system for qualified invoice issuers (適格請求書発行事業者の登録制度)

In principle, it is necessary to possess a qualified invoice issued by a qualified invoice issuer in order to claim purchase tax credits.

A business that wants to register as a qualified invoice issuer must apply to their local NTA office and be (or become) a consumption-tax-collecting business. The application can be submitted by mail or electronically.

To enable counterparties to confirm that invoices are qualified invoices, the NTA will publish information about qualified invoice issuers on its website.

A qualified invoice is an invoice, delivery record, receipt, etc., that includes the following information:

  • Name and registration number of the qualified invoice issuer
  • Date of asset transfer/service provision
  • Description of assets or services (including whether or not the assets are subject to a reduced tax rate)
  • Tax-included or tax-excluded value of the transaction, grouped by tax rate
  • Name of purchaser

2. Obligation to issue qualified invoices (適格請求書の交付義務)

When selling assets or providing services in Japan, qualified invoice issuers are obliged to issue qualified invoices upon the request of any consumption-tax-collecting business. However, for practical reasons, the obligation does not apply to the following transactions:

  • Public transport (ship, bus, train) where the price is less than 30,000 yen.
  • Purchases of fresh food performed by shipping companies at wholesale markets.
  • Sales of agricultural products on behalf of cooperatives.
  • Sales made by vending machines where the price is less than 30,000 yen.
  • Postage where stamps are the only consideration.

Furthermore, businesses that sell to the general public (e.g., retailers, restaurants, taxis) can issue a simple qualified invoice (適格簡易請求書) instead of a normal qualified invoice. Digital versions of both qualified and simple qualified invoices are allowed.

3. Purchase tax credit requirements (仕入税額控除の要件)

Possession of a qualified invoice is necessary to claim a purchase tax credit. The following substitutes are also acceptable:

  • Simple qualified invoice
  • Digital version of a qualified invoice or simple qualified invoice
  • Documents (including digital documents) that contain the information that would be contained in a qualified invoice.
  • Documents prepared by the seller in connection with the purchase of fresh food by a shipping company at a wholesale market or the purchase of agricultural products being sold on behalf of a cooperative.

For practical reasons, purchase tax credits will be available for the following purchases, providing the details are recorded in the purchaser’s books:

  • Public transport where the price is less than 30,000 yen.
  • Admission tickets where the items on a simple qualified invoice (excluding the date) are provided at the time of use.
  • Acquisition of used goods by a used goods business from a person other than a qualified invoice issuer.
  • Acquisition of pawned goods by a pawn business from a person other than a qualified invoice issuer.
  • Acquisition of a building by a real estate business from a person other than a qualified invoice issuer.
  • Acquisition of recycled materials for inventory purposes from a person other than a qualified invoice issuer.
  • Purchases from vending machines where the price is less than 30,000 yen.
  • Postage where stamps are the only consideration.
  • Business trip expenses that are not taxable (normally deemed necessary, etc.).

Qualified invoice issuer registration system

What are the procedures for registering as a qualified invoice issuer?​

Submit an application to the NTA office that has jurisdiction over the business. The application can be submitted electronically or by mail.

NTA offices will approve all applications unless they can find a reason for refusal. They will publish the details of registered businesses and notify the business.

The following items will be published on the qualified invoice issuer website:

  • Name. Sole proprietors can apply to have an alias or maiden name published instead of (or in addition to) their legal name, if they prefer.
  • For corporations, the address of the main office.
  • For foreign businesses without a PE in Japan, the location related to the conduct of business in Japan.
  • Registration number.
  • Registration date.
  • Registration expiry date (if applicable).

The following items will be published only if the business operator applies for them to be published.

  • Business name and address of main office, for sole proprietors.
  • Address of main office, for unincorporated associations.

How will I be notified of my registration as a qualified invoice issuer?​

If you apply online, you can choose to receive a digital notification, otherwise you will be notified by mail. Digital notifications will be available much faster than paper notifications.

The notification data will remain available as an e-Tax notification. In principle, notifications will not be reissued.

How long does it take to get the notification of registration?​

The NTA will publish the current waiting periods (for online application and paper application) on its website.

When does the registration take effect?​

Registration will become effective from the date the NTA office adds the business to the register of qualified invoice issuers. Qualified invoices must be issued for transactions after that date.

Regarding the gap between the date of registration and the date a business receives notification, see Q33.

If notification of registration is received prior to October 1, 2023, registration will be effective on October 1, 2023.

Can a business become a qualified invoice issuer in the middle of a taxable period?​

Yes. Refer to Q12 regarding the timing of registration for newly-established companies.

What is the deadline for applying for registration to be registered from October 1, 2023?​

The deadline is March 31, 2023, unless you become a consumption tax collecting business as a result of exceeding 10 million yen worth of revenue in the first half of 2023, in which case the deadline is June 30.

If there is a reason for not being able to submit the application by March 31 (the seriousness of the reason does not matter) and it is submitted by September 30, you will be registered as of October 1.

If you submit an application on or after October 2, you will be registered as of the date you submit the application.

While it would normally be necessary to apply for consumption tax collection status in order to become a qualified invoice issuer, businesses registered between October 1, 2023 and September 30, 2029 will become consumption tax collecting businesses without applying separately.

See the NTA’s website for the most up-to-date details about the registration deadline.

What happens when a non-CTC business is registered between October 1, 2023 and September 30, 2029. When will they become a CTC?​

The non-CTC business will become a CTC from the date of registration (October 1 at the earliest). Therefore, the business will need to file a consumption tax return covering the period from the date of registration to the end of the taxable period (e.g., calendar year).

If you become a CTC in a taxable period (e.g., calendar year) that does not include October 1, 2023, you must remain a CTC for the two taxable periods following the period in which you become a CTC.

If application is made after September 30, 2029, the business must apply to become a CTC by the day before the first day of the business’s first taxable period as a CTC.