- Starting from October 1, 2023, a new invoice system for Japanese Consumption Tax (JCT) will be implemented.
- Under this system, JCT taxpayers (buyers) will need to retain qualified invoices issued by qualified invoice issuers (sellers) to claim input JCT on taxable purchases.
- However, some small business operators are hesitant to become qualified invoice issuers as their tax burdens and administrative costs are expected to increase.
- The JFTC has warned about the risk of violating the AMA if a company exploits its dominant bargaining position to treat a counterparty unfavorably due to their refusal to register as a qualified invoice issuer.
- The JFTC has already issued warnings to companies operating in specific business sectors for potential violations of the AMA related to the abuse of their dominant bargaining position.
- Regardless, it is not prohibited to request one’s counterparty to become a qualified invoice issuer or to discuss an appropriate allocation of the additional tax costs due to their inability to issue qualified invoices, but careful consideration must be given to avoid being deemed to have abused one’s superior bargaining position.
Source DLA Piper
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