The qualified invoice system and your registration number
If a Japanese client has asked for your registration number, or told you their accounting department cannot process your invoice, this is why. Japan changed how consumption tax credits work in October 2023, and the change puts a specific requirement on the invoice you issue.
What changed in 2023
Japan levies consumption tax on most transactions. A business that pays consumption tax on its purchases can normally deduct that amount from what it owes. This is the input tax credit, and it is the mechanism that stops the same tax being charged at every step of a supply chain.
Since October 2023, that deduction requires a qualified invoice. A qualified invoice is one issued by a business registered with the tax authority, carrying the registration number that registration produces.
The practical effect lands on the supplier. If your invoice has no registration number, your client pays your full amount but cannot recover the tax portion. That portion becomes a real cost to them.
What a registration number looks like
The letter T followed by 13 digits, for example T1234567890123. For a company it is the letter T plus the corporate number. For a sole proprietor it is a number issued on registration.
Numbers are public. A client can verify yours on the tax agency's lookup site, and many do this automatically when onboarding a new supplier. A number that does not resolve will come back to you as a question.
Should you register?
Registration is voluntary, but it is not free. Registering makes you a taxable business for consumption tax purposes, which means filing and paying consumption tax even if your turnover is below the threshold that would otherwise exempt you.
The trade-off is commercial. Clients who are themselves taxable businesses prefer registered suppliers, because an unregistered supplier effectively costs them more. Clients who are consumers, or who use the simplified tax regime, are indifferent.
If you are based outside Japan and have no permanent establishment there, registration is usually not available or not relevant. In that case, say so plainly when a client asks, and leave the field empty rather than inventing a number.
What the invoice must show
A qualified invoice needs six items. Missing any one of them is the usual reason an invoice comes back for correction.
Your name and registration number
The issuing business, plus the T-number. An abbreviation of your company name is a common cause of rejection.
The transaction date
The date the goods or services were supplied, which is not necessarily the date you are sending the invoice.
What was supplied
A description of the goods or services. Items subject to the reduced 8% rate must be marked as such.
Amount per tax rate
The total for each tax rate separately. One combined subtotal is not sufficient when two rates are involved.
Tax amount per rate
The consumption tax for each rate, shown separately from the amounts above.
The recipient
The name of the business receiving the document, as they are registered.
The two tax rates
The standard rate is 10%. A reduced rate of 8% applies to food and drink other than alcohol and restaurant dining, and to newspapers on a subscription. Most service work is taxed at 10% throughout.
The reason this matters for the invoice layout is that the two rates must be totalled separately. If your invoice mixes them into one figure, the client cannot derive the credit they are entitled to.
If you are not registered
Issue the invoice without the number. It is a valid commercial document; it simply is not a qualified invoice for tax credit purposes. Do not describe an amount as consumption tax on an invoice that cannot support the credit, and do not borrow someone else's number.
Transitional relief lets clients claim a portion of the credit on purchases from unregistered suppliers for a limited period, on a schedule that steps down over time. A client raising this with you is describing their own cost, not an error on your side.
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: Outline of the Invoice SystemThe agency’s English overview of Japanese consumption tax.
- Qualified Invoice Issuer Publication SitePublic lookup for verifying a registration number.