From October 1, 2023, onward, the qualified invoice-based method (the invoice system) as a method to receive tax credit for consumption tax on purchases will take effect.
In order to issue Qualified invoices, enterprises shall apply for tax offices to register themselves as Qualified Invoice Issuers(“QII”).
For a specified foreign business enterprise, i.e., a foreign business enterprise that does not have an office, place of business in Japan pertaining to the taxable transactions, all the following requirements shall be met:
(1) not to have its status of a tax-exempt enterprise;
(2) to have a designated Tax Agent;
(2) to have a designated Tax Accountant Proxy to deal with Consumption Tax compliances;
(3) not to have delinquent national tax liability;
(4) not to have its status of QII canceled within the recent period of 12 months; and
(5) not to have its status where two years have not passed yet since the execution of the sentence was completed or ceased to be executed for a fine or heavier punishment in violation of the provisions of tax laws.
When a qualified invoice issuer is requested by the other party of the taxable transaction to issue and provide Qualified invoices, it must issue and deliver the qualified invoice which must list all the items described in f. Requirements to claim Creditable Input Tax.