To ensure obtaining the JCT registration number before the new policy takes effect, action must be taken immediately in June!

Take action in June to obtain JCT registration number before new policy takes effect

Japan’s ruling party (a coalition of the Liberal Democratic Party and Komeito) released its tax reform plan for 2022 on December 10, 2021. The aim is to establish a new type of capitalism under the concepts of “a virtuous cycle of growth and distribution” and “developing a new post-COVID-19 society”. To achieve this, it is crucial for companies to achieve sustainable growth by investing in research and development, personnel, and returning profits to diverse stakeholders. From this perspective, the Japanese tax reform for 2022 has been decided to further strengthen tax reduction measures for companies actively raising employee salaries. The tax incentives to promote open innovation will be increased, encouraging companies to transform and upgrade, and to increase value-added. Considering the challenges faced by business operators in introducing electronic data storage, a two-year grace period will be given, postponing the mandatory deadline from January 1, 2022, to January 1, 2024. In addition, measures will be taken for the upcoming “consumption tax invoice system”, which will be implemented from October 1, 2023. After the reform is implemented, for buyers who require tax deductions, compliant invoices with the seller’s JCT registration number must be provided to carry out JCT input deductions and view the amount of tax reduction. Edit and switch to center alignment, add image captions, not exceeding 140 characters (optional). Japan’s JCT compliant invoice storage requirements: 1. Only qualified invoicing companies can issue compliant invoices (tax deductions cannot be applied to invoices issued by non-compliant invoicing companies); 2. Exempt companies need to become taxable companies to register as compliant invoicing companies; 3. The seller’s qualified invoice must be issued physically upon the request of the taxable buyer; 4. Copies or electronic records of the compliant invoice issued must be kept for 7 years, starting from the day after the end of the taxable period, which includes the date of issuing or delivering the invoice; 5. If both the buyer and seller are taxable companies, the seller must provide compliant invoices, and the buyer must keep them (if the buyer does not keep the invoice, the buyer cannot request deductions and pay the consumption tax in the transaction). In other words, to obtain input tax deductions, it is necessary for the supplier (seller) to issue compliant invoices, and only taxable companies registered as compliant invoicing companies can issue compliant invoices. Competitive advantages brought by JCT compliance: 1. Compliant tax deductions and refunds: For sellers who have already obtained JCT registration numbers and can issue compliant invoices with JCT registration numbers, the input JCT bills generated during the taxable period can be used as JCT input deductions (declared amount = output consumption tax – input consumption tax, the output consumption tax is the consumption tax collected by the seller from the buyer). If the declared amount is negative after calculation, a refund can be made. 2. Clear and secure import customs clearance process: Using the JCT registration number for customs clearance can have a clearer and safer import customs clearance process and payment list. 3. Exclusive JCT support exposure page: Before October 1, 2023, a limited-time, exclusive enterprise purchase exposure page will be provided for JCT-compliant sellers. Sellers who have uploaded their JCT registration numbers to the seller’s background can apply for up to 50 ASINs to be added to the page (set enterprise prices or bulk discounts of 5% off for ASINs, ensure sufficient inventory, and have a rating of 3.5 or above). The impact of not registering for JCT in Japan: 1. Decreased competitiveness of orders: After the new policy takes effect on October 1, 2023, buyers who require tax deductions will tend to choose sellers who have obtained JCT registration numbers and can issue compliant invoices with JCT registration numbers for enterprise purchases to apply for JCT input deductions. If the seller cannot obtain a JCT registration number before October 1, 2023, they will not be able to provide compliant invoices with JCT registration numbers and may lose orders from these customers. You can view the orders received from enterprise buyers in the past through the following path: Seller platform > Orders > Manage orders > Select “Enterprise buyers” in “All orders”. 2. Decreased competitiveness of products: After the new policy takes effect on October 1, 2023, to ensure a good shopping experience for customers, Amazon will upgrade the enterprise purchase page’s filtering and identification functions regarding JCT registration numbers, making it easier for customers to quickly select sellers who can issue compliant invoices with JCT registration numbers for purchasing and improving the seller’s product competitiveness.

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