The Invoice System began on October 1, 2023. Officially called the Qualified Invoice Retention System, this system pertains to tax credits for consumption tax on purchases in Japan. For a business to receive credits under this system, qualified invoices that meet certain criteria for multiple tax rates of 10% and 8% must be issued and retained.
Moreover, to create and issue qualified invoices, a seller must first register as a qualified invoice issuing business, and thereafter include the registration number on all qualified invoices.
This article discusses the registration number required for a business to issue qualified invoices under the Invoice System. Note that a qualified invoice includes invoices, delivery slips, receipts, and sales slips, and it is not necessarily known formally as an invoice.
What’s in this article?
- What is the registration number in the Invoice System?
- How to search for and verify the registration number in the Invoice System
- FAQ
- Stripe’s support for use of the Invoice System
What is the registration number in the Invoice System?
The registration number in the Invoice System is a unique number given to a business that has successfully applied with its Regional Taxation Bureau’s Invoice Registration Center to become a qualified invoice issuing business.
The registration number consists of a “T” followed by a 13-digit number, as described below:
For taxable businesses with an entity number:
T followed by the entity number (13 digits)For other taxable businesses (sole proprietorships, freelancers, unincorporated associations, etc.):
T followed by a 13-digit number *
*The 13-digit number is not your personal My Number and does not duplicate your entity number.
Role and necessity of the registration number in the Invoice System
Since the introduction of the Invoice System, which pertains to purchase tax credits, businesses are required to issue and retain qualified invoices instead of rate-classified invoices. To issue these qualified invoices, it is mandatory to register as a qualified invoice issuing business and obtain a registration number.
The registration number in the Invoice System is a key item to be included on a qualified invoice. Therefore, your use of this registration number serves as proof that you are a qualified invoice issuing business. In other words, if an invoice is issued without a registration number, it will not be recognized as a qualified invoice. Registration is voluntary, but note that if a business without an Invoice System registration number creates and issues a document with a fictitious registration number or a document that can be mistaken for a qualified invoice, it could face a penalty, including a fine of up to ¥500,000 or imprisonment for up to one year. For more information, refer to the National Tax Agency's prohibitions and penalties on the delivery of qualified invoice-like documents.
Additionally, if a seller has not registered as a qualified invoice issuing business, buyers will not be able to receive qualified invoices from that seller and will be unable to claim purchase tax credits on consumption tax for purchases from that seller. This could impact your business in the following ways:
- Fewer transactions with buyers
- Buyers might request a price reduction equivalent to the consumption tax amount (corresponding to the purchase tax credit that they could not take advantage of)
Registration number entry location and key points
While the registration number in the Invoice System must be entered on a qualified invoice, there is no specific requirement regarding its entry location. It can be entered at the top or the bottom of the document, following your business’s preferred format. However, you must enter both the registration number and the name of the issuer of the qualified invoice. Therefore, when entering the registration number on a receipt that is classified as a qualified invoice, ensure that it is clearly linked to the issuer’s name by placing it near the name. Refer to the qualified invoice sample from Stripe.
How to search for and verify the registration number in the Invoice System
If the registration number on a receipt issued under the Invoice System is incorrectly entered, the buyer who receives the receipt will not be able to apply the purchase tax credit. Therefore, sellers who issue receipts must make sure there are no errors in the number entered, and buyers must verify that there are no mistakes in the registration number on the document.
There are three methods to verify the registration number in the Invoice System, as described below.
Verification using the registration notification
If you want to verify your own registration number, you can check it on the registration notification issued at the time of registration. The way you receive this notification depends on how you applied for registration.
If you applied by mail, you will receive a written notification. Note that a written registration notification cannot be reissued, so be sure to safeguard it.
On the other hand, if you applied through e-Tax, and you opted to receive the registration notification by that method, a notification concerning your application will be sent to the registered email address, and you will receive the notification through e-Tax. Note that, even if you apply through e-Tax, the registration notification will be sent in paper form unless you specify otherwise. Therefore, be sure to confirm your preference on the confirmation screen during the application process.
Verification using the qualified invoice issuing businesses publication site
Businesses registered as qualified invoice issuing businesses are listed on the National Tax Agency’s qualified invoice issuing businesses publication site. Using this website, you can verify a registration number in two different ways.
One way to check a registration number for any discrepancy is by entering the number in the website, if you know it. This allows a buyer to verify the registration number using a qualified invoice received from the seller. Additionally, the buyer can ask the seller for its registration number beforehand, at the negotiation stage, and then search for it on the website. This also makes it possible to verify whether the business name associated with the registration number is correct and check multiple registration numbers simultaneously.
The second way is to download a batch of data about businesses, such as their registration numbers and registration dates, from the website. This data can be used to search for the client’s business name to verify that their registration number is correct.
For detailed instructions on how to search for registration numbers or download information on the qualified invoice issuing businesses publication site, refer to its User Guide.
Verification from the Corporate Number Publication Site
If the client is a legal entity, you can also verify their details on the Corporate Number Publication Site provided by the National Tax Agency. This method allows you to search for an entity number using the business’s trade name or address, even if you do not know its entity number. As mentioned previously, in the Invoice System, the registration number for qualified invoice issuing businesses is “T” followed by the entity number (13 digits). After confirming the entity number, reenter it on the qualified invoice issuing businesses publication site to verify whether the registration number is correct.
Note that the Corporate Number Publication Site alone does not indicate whether a business is registered as a qualified invoice issuing business. Therefore, it is important to check for a business’s registration number on the qualified invoice issuing businesses publication site as well.
FAQ
Here are some commonly asked questions about the registration number in the Invoice System, for your reference.
Q: Is the registration number required on receipts as well?
A: To issue a receipt as a qualified invoice, then a registration number is required. However, if you do not need to issue a qualified invoice, you can omit the registration number since registration for a number is voluntary. However, if your client (a buyer) needs to apply the purchase tax credit, a qualified invoice with a registration number is necessary. Therefore, businesses not having a registration number in the Invoice System might face difficulties when pursuing transactions with clients.
Q: What happens if a receipt does not have a registration number?
A: A document that does not show the registration number of a qualified invoice issuing business under the Invoice System will not be recognized as a qualified invoice. Therefore, businesses that need qualified invoices should verify in advance whether their trading partners have a registration number.
Q: What should I do if I forget or do not know my registration number?
A: If you have misplaced the written registration notification and do not know your registration number, you can contact the Regional Taxation Bureau’s Invoice Registration Center by phone. The phone number varies depending on which Regional Taxation Bureau your location falls under.
Q: How can sole proprietorships verify their registration number?
A: Sole proprietorships can, just like legal entities, verify their registration number in the Invoice System through the National Tax Agency’s qualified invoice issuing businesses publication site. However, since the published information for sole proprietorships usually does not include trade names or addresses, there may be confusion if there are other sole proprietorships with the same name. If sole proprietorships wish to publish their trade name and address to facilitate the correct identification of their registration number, they can submit a request for publication (or change) of details by a qualified invoice issuing business form to the competent Invoice Registration Center. For more information on the advantages and disadvantages of registration in the Invoice System for sole proprietorships, refer to “Guidance on the Invoice System for Sole Proprietorships.”
Q: How long does it take to receive notification of an Invoice System registration number?
A: The time varies depending on the status of the registration application, but according to the estimated time for registration notification by the National Tax Agency in April 2024, it takes about 1 month for applications via e-Tax and about 1.5 months for paper applications. However, these are approximate figures, and the process may take longer if the submitted application form has omissions or errors.
Stripe’s support for use of the Invoice System
Stripe supports the creation of qualified invoices that are compliant with the Invoice System, through Stripe Invoicing, Stripe Tax, and Stripe Billing. For more information, check Stripe’s support for use of the Invoice System.
Note that if you plan to create qualified invoices through your Stripe account, prior setup is required. For the setup method, please refer to Stripe’s best practices for invoice setup.