Big news! Amazon Japan VAT is coming. What are the consequences of not registering for JCT?

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It is learned that on the 6th China Brand Day yesterday, the latest data released by Amazon Global Store showed that with the rapid development of the cross-border e-commerce industry, the brand value of enterprises has become increasingly prominent, and Chinese sellers are paying more and more attention to brand building, and regard brand building as the foundation for the long-term development of enterprises.

It is learned that if cross-border sellers want to achieve long-term development on Amazon, in addition to paying attention to brand building, it is also essential to pay attention to Amazon's latest policies and awareness of compliant operations. Recently, Amazon Japan has updated a policy that sellers need to pay close attention to.

JCT reform is about to take effect, these sellers need to register!

It is learned that yesterday, many sellers on Amazon Japan said that they received a major notice from Amazon in the background: From October 1, 2023, the Japanese Consumption Tax (JCT) "Compliance Invoice Retention System" reform initiated by the Japan National Tax Agency will come into effect.

After the reform takes effect, compliant invoices must have the seller's JCT registration number so that buyers can apply for JCT deductions and view their tax exemptions. The seller's JCT registration number must be displayed on the invoice issued by Amazon so that buyers can apply for tax deductions. That is, sellers who sell on Amazon Japan and meet the relevant conditions must register for JCT if they need to issue invoices.

It is learned that as early as last month, Amazon had issued an announcement stating that the invoice system of the National Tax Agency of Japan (NTA) will be launched on October 1, 2023, reminding Amazon Japan sellers to enter the invoice registration number in the Seller Center.

Here, we have also summarized the three key points of this reform for Amazon Japan sellers:

1. What is JCT? Which sellers need to register for a JCT tax number?

Japanese Consumption Tax (JCT), also known as Japanese Consumption Tax in English, is a tax paid by consumers when purchasing goods. For corporate purchases, buyers can deduct it from the taxes payable to the tax bureau . It can be understood as the Japanese version of VAT.

The JCT registration number is a number issued by the Japanese tax agency to sellers with JCT taxable entities.

Sellers who meet the following conditions need to become JCT tax entities and are obliged to pay taxes as required:

In some special cases, sellers may still have tax obligations even if the above conditions are not met.

The following circumstances are exempt from the obligation to pay consumption tax:

1. Sales volume does not exceed 10 million yen per year.

2. Registered capital is less than 10 million yen.

2. How to register and declare?

1. Make registration declaration by yourself

It is understood that since October 2021, the National Tax Agency of Japan has begun accepting applications for JCT registration numbers.

Qualified sellers can prepare the following information and go to the official website of the National Tax Agency of Japan to register for a JCT tax number:

2. Register through a service provider

Sellers can also apply for a JCT registration number by consulting a third-party tax service provider in the Amazon Service Provider Network (SPN) in the Amazon backend.

Registration time: about 2-3 months, preparation is required in advance.

Filing cycle: generally annual report.

Declaration deadline: within 2 months from the day after the end of the taxable period.

The National Tax Agency of Japan recommends that in order to obtain a Japanese consumption tax registration number before October 1, 2023, applications should generally be submitted before March 31, 2023 .

3. What are the consequences of not registering and declaring the JCT registration number?

From the perspective of the conditions for registering with JCT, this policy is not mandatory.

However, if eligible sellers fail to submit their JCT registration number to Amazon as required, they will no longer be able to issue compliant invoices to buyers, making it impossible for buyers to apply for tax deductions.

Buyers who need to issue compliant invoices will most likely no longer purchase products from sellers without JCT registration numbers, which will directly lead to a decline in sellers’ orders. Some sellers also speculate that sellers who have not registered for a JCT tax number may be restricted from selling by Amazon, thereby losing some orders.

Therefore, it is recommended that sellers who want to make a big splash in the Japanese market and have long-term strategic plans should register for a JCT tax number as soon as possible.

In addition, it was learned that as soon as the reform notice came out, it sparked heated discussions in the seller communication group:

"Japan's JCT has followed in the footsteps of Europe's VAT. Will Japan's JCT be all over the news today?"

"After Europe and Japan, will the United States have another XXX tax?"

“Is there any service provider for registering JCT tax number?”

“If Amazon Japan collects taxes, we should raise our prices too!”

In this regard, a group chat was also created [-Japan Asia Station JTC Discussion Group]

Welcome all cross-border sellers to scan the QR code to join the group and discuss related topics~