The new JCT qualified invoice system will come into effect from 1 October 2023, and JCT taxpayers will be required to register as a qualified invoice issuer to be able to provide a qualified invoice, enabling buyers to claim a credit for input JCT.
The 2022 tax reform amends, among others, the registration process as provided below:
- Currently, an exception allows an exempt taxpayer to register as a qualified invoice issuer in the middle of a taxable period and become a qualified invoice issuer from the registration date, but only for the taxable period that includes 1 October 2023. The 2022 tax reform expands the applicability of this exception to taxable periods that include any day between 1 October 2023 and 30 September 2029.
- If the expanded exception applies, the qualified invoice issuer cannot revert to an exempt taxpayer for the following taxable periods until the taxable period that includes the day two years after the registration date.
- The tax authority is entitled to reject the registration application by foreign businesses, or revoke the registration of foreign businesses, which are required to assign a tax representative in Japan in accordance with General Law of National Taxes, but are not compliant with such requirement.
Source EY
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