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インボイス対応
[inboisu taiou] - invoice compliant

インボイス対応 (inboisu taiou) refers to the necessary actions businesses must take to comply with Japan's new Invoice System, implemented on October 1, 2023. This system, known as the 適格請求書等保存方式 or Qualified Invoice System, requires businesses to issue and retain qualified invoices to claim input tax credits for consumption tax (VAT).

Qualified invoices must include details such as the invoice issuer's registration number, applicable tax rates, and the tax amount categorized by tax rate. Only businesses registered as "qualified invoice issuing businesses" can issue these invoices. To become registered, businesses need to apply to the tax office and receive approval.

Both issuers and recipients of qualified invoices must retain copies for seven years. This retention can be done electronically if compliant with Japan’s e-Document Law.

For sellers, this means updating invoicing processes to meet the new criteria. Buyers need to ensure they receive qualified invoices to claim input tax credits, and cannot claim these credits if they receive invoices from non-registered businesses.

Companies like freee offer accounting software that automates the creation and management of qualified invoices, ensuring compliance with the new system. The Japanese government provides support, including IT subsidies, to help small and medium-sized enterprises transition smoothly.


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See Also

源泉徴収税   [gensen choshūzei] - withholding tax

源泉徴収税 (gensen choshūzei) translates to "withholding tax" in English.

It refers to the tax deducted at the source of income, meaning the payer of the income withholds a portion of the payment and pays it directly to the tax authorities. This system ensures that taxes are collected in advance and helps to prevent tax evasion.

In Japan, withholding tax is commonly applied to various types of income, including salaries, bonuses, interest, dividends, and certain payments to non-residents. Employers, financial institutions, and other entities responsible for making payments must withhold the appropriate amount of tax and remit it to the National Tax Agency.

The rates and specific rules for withholding tax can vary depending on the type of income and the residency status of the recipient. For example, the standard withholding tax rate on salary income for residents is based on progressive tax rates, while non-residents might face a flat rate on certain types of income.

Properly managing withholding tax obligations is crucial for businesses operating in Japan to remain compliant with tax regulations.

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控除   [kojo] - a tax deduction in Japan

控除 (kojo) is a tax deduction in Japan. It refers to the amounts that can be subtracted from an individual's total income to reduce their taxable income. By lowering the taxable income, tax deductions can significantly decrease the amount of tax an individual owes.

Various types of deductions are available, each designed to provide financial relief for specific circumstances. Common deductions includes those for dependents, medical expenses, social insurance premiums, and mortgage interest. For instance, the spousal deduction and dependent deduction help families reduce their tax burden by acknowledging the financial responsibilities of supporting a spouse or dependents.

To claim these deductions, taxpayers must provide the necessary documentation and meet certain eligibility criteria. Properly utilizing deductions are crucial for effective tax planning, as it can lead to substantial tax savings. Understanding and applying the appropriate deductions can help individuals manage their finances better and ensure compliance with tax regulations.

Read more
青色申告会   [aoiro shinkoku kai] - Blue Return Association

青色申告会 (aoiro shinkoku kai) is a Japanese term that translates to "Blue Return Association" in English. This association supports individuals and small business owners who choose to file their taxes using the blue return system, which is a more detailed and beneficial tax filing method in Japan.

The blue return system (青色申告, aoiro shinkoku) offers various tax advantages, such as higher deductible expenses and special allowances. Members of a 青色申告会 can receive guidance, resources, and assistance in preparing and submitting their blue returns accurately and efficiently. These associations often provide seminars, workshops, and personalized consultations to help members maximize their tax benefits.

Read more

Frequently Asked Questions

インボイス対応 (inboisu taiou) refers to the necessary actions businesses must take to comply with Japan's new Invoice System, implemented on October 1, 2023. This system, known as the 適格請求書等保存方式 or Qualified Invoice System, requires businesses to issue and retain qualified invoices to claim input tax credits for consumption tax (VAT).


Invoice compliant is インボイス対応 (inboisu taiou) in Japanese.




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