Japan’s Qualified Invoice System Explained: Registration, Required Items, Simplified and Return Invoices

The system’s official name is the qualified invoice-based method (適格請求書等保存方式). It began on October 1, 2023^[1]. Under it, a buyer claiming an input tax credit (仕入税額控除) must keep books with certain details and a qualified invoice or similar document, except in certain cases where getting one is difficult^[1].

Only a qualified invoice issuer, registered with the tax office, can issue a qualified invoice. A registered business must issue qualified invoices and keep copies of the ones it issued^[1]. The duty to issue arises when the other party, if a taxable business, asks for one^[2].

An unregistered business can still issue invoices and receipts. But a document without a registration number is treated as a segmented-entry invoice (区分記載請求書等), not a qualified invoice^[3]. An unregistered business must not use a mark that could be mistaken for a qualified invoice, such as a registration-number lookalike or someone else’s number written as its own^[12].

A buyer purchasing from an unregistered business can use a transitional measure. A buyer filing under the general method can credit a set percentage of the input tax, provided it keeps its books and an invoice with the same details as a segmented-entry invoice. The books must note that the purchase falls under the measure (the NTA’s examples include 「80％控除対象」, "80% deduction applies", and 「免」). The percentage is 80% for purchases through September 30, 2026 and 70% from October 1, 2026 to September 30, 2028. It then drops to 50% and 30%, and from October 1, 2031 nothing can be credited. For taxable periods starting on or after October 1, 2026, the measure does not apply to the part of purchases from a single supplier above ¥100 million in a year (business year), tax included^[4]. The year-by-year percentages and conditions are in the 20% and 30% special rules and the transitional measure.

Which percentage applies depends on when the purchase happened, not on the payment date or the invoice date. For goods it is the delivery date; for services it is the day the agreed services were fully completed^[13].

Only a taxable business can register. A tax-exempt business registers under a transitional measure, covered in the next section^[14][6]. You file the "Application for Registration as a Qualified Invoice Issuer (for domestic businesses)" with the district director of the tax office that covers your place for tax payment (納税地)^[14].

• Apply through e-Tax: the web version of the e-Tax software needs no download and works on a PC, and on a phone or tablet if you are a domestic sole proprietor^[15]. Applying through e-Tax requires preparation in advance, such as an electronic certificate (for example, a My Number Card) and a user ID^[1]. If a tax accountant (税理士) sends it for you, you do not need your own electronic certificate^[14].
• Apply by post: check the mailing address on the NTA’s application procedure page^[15].

Registration takes effect not on the day the notice arrives but on the day you are entered in the register of qualified invoice issuers (the registration date). For transactions on or after that date, you must issue a qualified invoice when the other party, if a taxable business, asks for one^[2].

If you apply through e-Tax and ask for electronic notification, the registration notice is stored as data in your list of notices. Otherwise it is sent on paper. The notice is not reissued^[20]. The time to notification is not fixed; the NTA publishes a guide to expected notification times^[15].

A business that has just started can register retroactively to the first day of its taxable period, as long as it applies by the last day of that period. For a sole proprietor, the first day is January 1 of the year the business started^[15].

If taxable sales in the base period are ¥10 million or less, you are, in principle, exempt from consumption tax. The base period is the year before last for a sole proprietor, and the business year before last for a company with one-year business years. There are exceptions based on taxable sales in the specified period (特定期間)^[5].

But a business that is registered as a qualified invoice issuer is not exempt, even if taxable sales in the base period are ¥10 million or less^[5].

An exempt business can apply in a taxable period that contains a day from October 1, 2023 to September 30, 2029. It writes a desired registration date on the application, which must be at least 15 days after the filing date. It becomes a taxable business from that date, and no election notice (課税選択届出書) is needed. If the tax office finishes the registration after the desired date, the business is treated as registered on the desired date. From April 1, 2028, a specified small-asset sales business (特定少額資産販売事業者) can no longer use this measure^[6]. Ask the tax office or a tax accountant (税理士) whether you count as one.

If you registered under this measure in a taxable period that does not include October 1, 2023, you cannot be exempt from the next taxable period through the taxable period that contains the day on which two years from the registration date end (the day before the second anniversary)^[6]. Canceling the registration does not change this^[15]. This covers any registration from 2024 on for a calendar-year sole proprietor or a company with a December year-end, and any registration from the business year after the one that includes October 1, 2023 for a company with another year-end. For example, a calendar-year sole proprietor who registers between October and December 2026 cannot be exempt for 2027 and 2028. If you registered in a taxable period that includes October 1, 2023, this condition does not apply. Ask the tax office or a tax accountant (税理士) how it applies to your own taxable periods.

A special rule reduces the tax for newly registered businesses: the 20% rule (2割特例), which sets tax payable at 20% of the tax on sales. It is for exempt businesses that register, and runs through the taxable period that contains September 30, 2026. As of October 21, 2026, 2026 is the last year for a sole proprietor, and the business year containing September 30, 2026 is the last for a company^[22][23].

For 2027 and 2028, sole proprietors have a 30% rule (3割特例, 30% of the tax on sales); companies are not eligible^[24][23]. Both rules need conditions, such as base-period taxable sales of ¥10 million or less, and you apply them simply by indicating so on the return^[22][18][19]. The deadlines and conditions of the 20% and 30% rules are in the 20% and 30% special rules and the transitional measure.

Before you decide whether to register, check the following.

• Whether your main clients use the general or the simplified method. On our reading, a client under the simplified method is not affected by whether you are registered^[11].
• The percentage and end date of the transitional measure a general-method client can use if you do not register. 70% runs through September 30, 2028^[4].
• How you would calculate tax payable after registering: general method, simplified method, or a special rule. The simplified method is limited to taxable periods where base-period taxable sales are ¥50 million or less^[11]. If you file the simplified-method election form during the taxable period in which an exempt business registers, you can use that method from that period^[17].
• That you must file from the registration date to the end of the taxable period, and that there is a period in which you cannot return to exempt status^[6].

A qualified invoice is a document, whether an invoice, delivery note, receipt or register slip (レシート), that shows the following^[25][7].

1. The issuer’s name and registration number
2. The transaction date
3. The description of the transaction (and a note if an item is subject to the reduced tax rate)
4. The consideration totaled by tax rate (tax-exclusive or tax-inclusive) and the rate applied
5. The consumption tax amount for each tax rate
6. The name of the business receiving the document

For how to write each item and build the line-item table, see How to write an invoice in Japan; for receipts, see How to write a receipt in Japan.

A qualified invoice issuer in one of the following trades may issue a simplified qualified invoice (適格簡易請求書) instead of a qualified invoice.

• Retail
• Restaurants
• Photography
• Travel agencies
• Taxis
• Parking lots (only when the service is for many unspecified customers (不特定かつ多数の者))
• Other trades similar to these that supply to many unspecified customers

The condition "for many unspecified customers" applies only to parking lots and the last, similar-trades item. Retail through taxis carry no such condition, so, for example, a retail sale can use a simplified invoice in any form^[8]. Ordinary transactions between businesses generally do not fall within the trades that can issue one^[26].

A simplified invoice can also be provided as electronic data, such as a PDF, instead of on paper^[8].

When you give a taxable business a refund or discount on sales, such as for returned goods or a price cut, you must issue a qualified return invoice (適格返還請求書)^[9].

If the refund or discount is under ¥10,000, tax included, you do not have to issue one^[9][28]. The ¥10,000 test is applied to the reduced amount for each invoice or receivable that the refund or discount relates to^[29].

• On a ¥500,000 invoice, the buyer deducts a ¥440 transfer fee and pays ¥499,560. The ¥440 is under ¥10,000, so no return invoice is required^[29].
• A rebate of ¥100 per product, paid later and totaling ¥20,000, is not exempt^[29].
• If, after registering, you refund or discount a sale made before you registered, there is no duty to issue one at all^[9].

A return invoice shows five items.

1. The issuer’s name and registration number
2. The date of the refund or discount, and the date of the original sale
3. The description of the refund or discount (and a note if an item is subject to the reduced tax rate)
4. The refunded amount by tax rate (tax-exclusive or tax-inclusive)
5. The consumption tax amount for each rate, or the applicable rate

For item 2, if the original sale was invoiced with a qualified invoice, the original date may be given as a period within the taxable period. For item 5, either the tax amount or the applicable rate is enough, and you may write both^[30]. How this differs from correcting an error is explained in Correcting or reissuing a Japanese invoice.

The small-amount rule (少額特例) changes what a buyer must keep to claim an input tax credit. It is separate from what a seller writes on a document, and from the return invoice exemption in the previous section, which is about the seller’s duty to issue^[10].

It applies to a business whose taxable sales are ¥100 million or less in the base period, or ¥50 million or less in the specified period. For domestic purchases made from October 1, 2023 to September 30, 2029 where the price paid (tax included) is under ¥10,000, the buyer can claim the input tax credit by keeping only books that show the required details^[10]. The fiscal 2026 tax reform did not change the end date^[31].

• The size test is met if either the base-period test (¥100 million or less) or the specified-period test (¥50 million or less) is met. For the specified period, you cannot substitute total salaries paid for taxable sales^[10].
• You do not have to note in your books that the rule is being used^[10].
• Purchases from someone who is not a qualified invoice issuer also qualify, if the price is under ¥10,000, tax included^[10].
• The ¥10,000 test is applied to one transaction’s purchase amount, tax included. It is not applied per product or to a monthly invoice that bundles several transactions. If you pay ¥5,000 and ¥7,000 on different days, each qualifies. Buying both at once for ¥12,000 does not qualify, and neither does a cleaning service billed at ¥100,000 a month^[32].

The rule is a way to claim an input tax credit, so it matters mainly to businesses that file under the general method and calculate their actual input tax. The simplified method and the 20% rule do not use actual input tax^[11][22]. This is our inference from how the rules work, not an NTA statement.