Invoicing Japanese clients in practice
The tax rules are only half of it. The other half is a set of conventions that are rarely written down, and an invoice that ignores them tends to sit in someone's inbox while they work out what to do with it.
The payment cycle
Most Japanese companies pay on a fixed cycle rather than a number of days after each invoice. The cycle has two dates: a closing date, when they stop accepting invoices for that period, and a payment date, when everything accepted by the closing date is paid.
The most common arrangement closes at the end of the month and pays at the end of the following month. An invoice that arrives on the first of a month therefore waits nearly two months, which is normal rather than a delay.
Ask for both dates at the start of the engagement. Knowing that the closing date is the 20th, not the 31st, changes when you send.
How to address it
Use the client's registered company name in full. Japanese companies carry a legal form before or after the name, and an invoice addressed to an abbreviation may be returned by their accounting department even when everyone knows who is meant.
Japanese invoices append an honorific after the recipient name: a company takes one form and a named individual takes another. EchoInvoice adds the appropriate one when the output language is Japanese and omits it in English, where it has no equivalent.
Bank details they need
A Japanese domestic transfer needs more than an account number. Leaving a field out is a common reason payment stalls.
| Field | Note |
|---|---|
| Bank name | The financial institution, in full. |
| Branch name and code | Japanese banks route by branch. The three digit code helps. |
| Account type | Ordinary (futsu) or current (touza). Ordinary is the usual one. |
| Account number | Seven digits. |
| Account holder | As the bank registered it. Japanese banks hold this in katakana. |
If you are being paid from Japan into a foreign account instead, the client needs a SWIFT code and, for European accounts, an IBAN. Put those in the notes field, since the standard bank block has no place for them.
Who pays the transfer fee
Japanese domestic transfers carry a fee of a few hundred yen, and it is not always obvious who bears it. Some clients deduct it from the payment without mentioning it, which is why an invoice for 100,000 yen can settle at 99,450.
Agree this in the contract. If nothing is agreed, stating it on the invoice is the next best thing, and it costs nothing to add a line.
Seals and PDFs
Japanese business documents traditionally carry a company seal. Its legal weight on an invoice is limited, but its absence is sometimes queried, and adding one removes a conversation. EchoInvoice can place a seal image on the document.
Sending a PDF by email is now normal and widely accepted. Electronic record-keeping rules require the client to store it in a particular way, which is their obligation rather than yours, but it is the reason they may ask you not to change the file after sending it.
Before you send
- The recipient name matches their registered name exactly.
- The closing date for this cycle has not passed.
- Tax is split by rate, and the registration number is present if you have one.
- Withholding is shown if the work is within scope.
- Bank details include the branch, account type and account holder as registered.
Sources
This guide is general information, not professional advice. The rules below come from the National Tax Agency of Japan. For a decision that turns on your own circumstances, consult a licensed tax accountant.
- National Tax Agency: Consumption tax (English)Official English material on the tax treatment referenced here.