A receipt is an important evidentiary document issued by a seller to prove that payment has been received during a financial transaction. Businesses that provide goods and services issue receipts and deliver them to the purchaser for the money received as consideration. In Japan, some might wonder what the difference is between the meaning of the word “領収書” (“receipt” or “ryoshusho”) and “レシート” (“sales slip”) or “領収証” (“acknowledgement of receipt” or “ryoshushō”).

This article provides basic knowledge about receipts in Japan, including how to create them correctly and cautions for affixing revenue stamps.

What’s in this article?

• Basic knowledge about receipts
  
• How do I create a receipt? How do I handle revenue stamps?
  
• Frequently asked questions (Q&A)
  

Basic knowledge about receipts

Receipts are issued to prove that the purchaser has paid the seller for a product or service, and to prove that the payee has received the payment from the payer. Regardless of whether you are the buyer or seller in a transaction, receipts are important for you because they serve as accounting documents providing evidence of receipt, and they are also required when filing and paying taxes.

Normally, a receipt includes the personal names or business names of both the party receiving the payment and the party making the payment, the transaction date, the amount, a description, and a breakdown of the amount. We will explain this in further detail later in this article.

Why are receipts needed?

Let’s explore why receipts are needed for financial transactions.

Tax reporting

A receipt serves as objective evidence of sales and payments of expenditures. Therefore, receipts are considered to be valid documents as vouchers when filing final tax returns and reporting taxes. In addition, businesses are normally required to issue and retain receipts for accounting procedures under the various tax systems.

The right to ask for a receipt and the obligation to issue one

In principle, when a customer (buyer) requests a receipt, the seller must respond by issuing one and delivering it to the buyer. This is because the Japanese Civil Code principle of “simultaneous performance” applies when the delivery of goods or services and the receipt of payment are carried out simultaneously.

According to Article 486 of Japan’s Civil Code, “a person performing an obligation may request the person accepting the performance to issue an acknowledgement of acceptance in exchange for the performance.” So the party making a payment has a right to request from the party receiving the payment an acknowledgement of acceptance—in other words, a receipt. And a business that receives from a customer a request for a receipt is obligated to issue one. Note that a receipt can also be provided as electronic data instead of in paper form.

Article 533 of the Civil Code (defense of simultaneous performance) allows a buyer to request a receipt in return for payment. Consequently, if the seller does not agree to issue a receipt, the buyer can refuse payment.

Prevention of overpayments and double billing

Keeping receipts on hand can avoid the risk of disputes over whether or not payment was made, and it can reduce mistakes such as overpayments and double billing. If such a problem actually occurs, both parties may have to spend more time and effort on tasks such as investigating the problem and reissuing invoices. To avoid such trouble, you should make it a habit to receive a receipt at the time of payment whenever possible.　

Difference between a receipt (ryoshusho) and an acknowledgement of receipt (ryoshushō)

The Japanese word “ryoshu” refers to the act of receiving money. The terms “ryoshusho” (receipt) and “ryoshushō” (acknowledgement of receipt) are essentially used interchangeably, and there is no clear difference in their definitions. Although there are slight differences in meaning in the last syllable of these two Japanese words (“sho” (document) and “shō” (certificate)), they do not infer any difference in tax implications.

So, both ryoshusho and ryoshushō are recognized as types of “acknowledgements of acceptance” under the Civil Code, serving as evidentiary documents which prove that the party who accepted the money has “received” the money from the party who made the payment.

In an overview of receipts for money or securities under the Stamp Tax Act, the Japanese National Tax Agency uses “ryoshusho” as a general term for evidentiary documents subject to stamp tax. This includes acknowledgements of receipt, sales slips, and certificates of acceptance.

Differences between a receipt and a sales slip

The Japanese word for “sales slip” is pronounced “receipt,” but it is a foreign word that actually means, as stated here, “sales slip.” This Japanese word, as commonly interpreted, is slightly different in meaning from a receipt.

Sales slips are used on a daily basis. They are automatically printed by cash registers at convenience stores, supermarkets, restaurants, and elsewhere—and they are used as documents to prove the purchase of goods and services. Sales slips include transaction details such as payment method (cash, credit card, etc.) and the change provided by the cashier.

As discussed earlier, a receipt is a general term for a document which proves that payment has been received. A sales slip is also one type of evidentiary document, so it can be recognized as a document fulfilling the function of a receipt as long as it lists the receipt date, transaction amount, party issuing the sales slip, and confirmation of the fact that the receipt of money was made.

Since both receipts and sales slips are valid as “acknowledgements of acceptance” that prove the receipt of money, it is not always necessary to obtain a receipt instead of a sales slip. (However, at some businesses, the accounting policy is to not accept sales slips.)

Note that ordinary sales slips received at convenience stores, supermarkets, and similar do not include the personal name or business name of the party who made the payment, and therefore they do not qualify as valid documents for tax filing. So it is important to receive a document that will be deemed appropriate.

Support for qualified invoices

On October 1, 2023, the Invoice System started. This system allows purchase tax credits for consumption tax. When a business issues a receipt as a qualified invoice, that receipt must satisfy the requirements for a qualified invoice specified under this system.

The qualified invoice must also include information such as the registration number of the qualified invoice issuer as specified by the Invoice System, and information on the consumption tax classified by each tax rate. Thus, it is important to check in advance the handling of receipts in the Invoice System.

For more details, refer to the National Tax Agency’s overview of methods for retaining qualified invoices.

How do I create a receipt? How do I handle revenue stamps?

There is no need to use commercially available receipt forms or predetermined templates. As long as the receipt has the correct format and lists accurate information, you can even use receipts created from scratch using spreadsheet or word processing software. The National Tax Agency gives the following instructions for creating a receipt:

How to prepare a receipt

• How to write the title
  Align the title in the upper center and write “Receipt” or “領収書” to clearly indicate that the document is a receipt.

• How to write the date
  Enter the date when the transaction was concluded by actual receipt of payment. If the goods were delivered first and the payment was made at a later date, the date entered on the receipt is the date when the payment and receipt of money were actually completed. You can use either the Western or Japanese calendar format. However, for the Western calendar format, it is not acceptable to omit digits. For example, do not enter “24” instead of “2024.”

• How to write the amount
  For the amount, enter the actual sales amount that you have received, which includes tax. In addition, break down that amount, into the amount excluding tax and the consumption tax, and enter them in a column titled “Breakdown” or “内訳.” To prevent falsification, write the currency symbol (¥) at the beginning of the number and draw a horizontal line (—) at the end; and for the number, insert a comma (,) to separate every three digits (e.g., ¥1,000,000—).

• How to write a description
  For the description, clearly state in concrete terms the items or service. Avoid using terms that are too broad in meaning, such as “fees for goods.” When using such terms, the purpose of use is unclear and may not be recognized as an expense in a tax audit. Two examples of appropriate terms are “stationery expenses for office work,” or “expenses for participating in exhibition.” If the items are too involved to be described concisely, you can attach to the receipt a detailed statement or delivery slip with an amount that matches the total amount. Keep in mind that if you include products that are subject to the reduced tax rate, you will need to clearly state that (e.g., *eligible for reduced tax rate).

• How to write the name
  Before writing the name on the receipt, check with the purchaser (buyer) to make sure you have their correct personal name, their business name, the official name of the organization, etc. As a business practice, there are cases in Japan when only “上様” or “Honored Customer” is written on a receipt. However, using this term alone makes it unclear who actually paid. Receipts that do not clearly state the name are at risk of being deemed invalid in a tax audit. Therefore, it is important to understand the purpose of the receipt and its role in tax matters before deciding whether to simply write “上様.” Additionally, if you write “株式会社” or “Co., Ltd.,” be careful to write it in the appropriate position—either before or after the business name. Do not use “株,” the abbreviation for “株式会社.”

• How to write the issuer’s name
  Write the official name and address of your business that is issuing the receipt, such as the store name or business name. In addition to the official name, also write a telephone number for primary contact. Generally, it is customary to affix a seal over the issuer’s name in order to prevent forgery and other types of fraud. However, there is no legal obligation to affix a seal. Note that when issuing a receipt under the Invoice System mentioned earlier, you will be required to enter the Invoice System registration number.

• How to write a breakdown
  Normally, in a breakdown column, you should write the total amount for the respective 8% or 10% tax rates. You can annotate amounts by writing “tax included” or “tax excluded”. A breakdown of the transaction amount can be listed separately if necessary. Now that the Invoice System has been launched, it is necessary to state each applicable qualified tax rate (%) and the total consumption tax amount classified by the tax rates, in the entries on qualified invoices. For examples of completed qualified invoices and instructions on how to fill them out, refer to the National Tax Agency’s overview of methods for retaining qualified invoices.

When creating receipts, it is helpful to have a customizable receipt template feature or an online tool that allows automatic receipt generation. Combined payment solutions—such as Stripe Payments, which can manage multiple payment methods—can streamline your business operations, making them more efficient.

Revenue stamps

A revenue stamp is a voucher issued by the Japanese government. It is used to pay stamp tax by directly affixing it onto taxable documents.

For sales of ¥50,000 or more excluding tax, the receipt must have the required revenue stamp amount affixed and then marked with a cancellation stamp. The revenue stamp amount required varies depending on the amount of payment received. For example, if the amount is ¥50,000 or more but no greater than ¥1 million, you will need ¥200 worth of revenue stamps. If the amount is more than ¥1 million but no greater than ¥2 million, you will need ¥400 worth of revenue stamps.

On the other hand, amounts less than ¥50,000 excluding tax (up to ¥49,999) are not taxable, so there is no need to affix a revenue stamp to the receipt. Therefore, it is important that the price excluding tax and the consumption tax amount are clearly broken down on the receipt.

In addition to receipts for items under ¥50,000 (excluding tax), there are other cases in which revenue stamps are not required. For example, revenue stamps are not required for electronic receipts because stamp tax only applies to paper documents. Additionally, if you save the original receipt as electronic data and then print a copy of the receipt on paper, you do not have to pay stamp tax. Additionally, when payment is made by credit card, stamp tax is not required as there is no actual receipt of cash. In this case, the receipt must clearly state “payment by credit card.”

Tax audits will check whether a revenue stamp has been affixed to targeted receipts. If a receipt requires a revenue stamp and you have neglected to affix one, you will have to pay a delinquent tax equivalent to three times the stamp tax that should have been paid. So be sure to affix the required revenue stamps.

Frequently asked questions (Q&A)

Q: Can I deliver a sales slip and receipt together?
A: Delivering a sales slip together with a receipt creates the risk of settling a payment twice for the same transaction. This can lead to mistakes or fraud, such as double counting of expenses. To ensure accurate accounting work, avoid delivering a sales slip and receipt at the same time. Instead, give only one type of evidentiary document.

Q: Can I issue a receipt as a qualified invoice?
A: In order to issue a receipt as a qualified invoice, it must satisfy the requirements of the Invoice System. Thus, it is important to deepen your understanding of required information before issuing the receipt. Furthermore, to issue a receipt as a qualified invoice, your business must be registered in advance under the Invoice System. For details, refer to Support for qualified invoices in this article.

Q: Can a sales slip be used instead of a receipt?
A: As mentioned above, the name is not printed on a sales slip, so they are not eligible to be valid documents for tax filing. However, just like a receipt, a sales slip is recognized as an “acknowledgement of acceptance” that proves the receipt of money. Receipts issued by cash registers at supermarkets, restaurants, and similar include a list of purchased items and details of transactions, so sales slips are sometimes considered more effective than receipts. For example, in the case of expenses incurred during a business trip, having a sales slip that clearly lists details may make it easier to have the expenses reimbursed at a later date. On the other hand, a sales slip can be problematic because it does not identify who made the purchase. In such cases, be sure to check the internal regulations of the business before embarking on a business trip.