e-Invoicing in Japan [2024 Requirements]

Japan is on the Road to E-invoicing

Electronic invoicing is not mandatory in Japan. However, since 2019, when Japan implemented a new consumption tax system that allows companies to add tax to invoices, it has been possible to better control taxes in the country. Until October 2019, there was only one rate of consumption tax in Japan. Since the introduction, in addition to the basic rate of 10%, of the reduced rate of 8%, the need to provide a system that guarantees the calculation of the tax due has been felt more and more strongly, which is also due to the introduction of e-invoicing. This was the first step in the reforms.

The Association for the Promotion of Electronic Invoices (EIPA), which was established in July 2020, is responsible for setting standards in Japan. Its activities focus on implementing the possibility of e-invoicing using PEPPOL throughout Japan.

On October 1, 2023, the Qualified Invoicing Method System ("QIMS") entered into force, operating on the European VAT system model. Under this system, it is necessary to issue invoices (both in paper and electronic form) containing specific information (issuer's tax identification number, recipient's name, date of issue, item, amount, JCT value) and then store them. Taxpayers must register with the Japanese National Tax Authority (NTA) to issue such a qualified invoice to obtain an individual tax ID.

E-invoicing process description

The e-invoicing system in Japan is based on the PEPPOL standard, which is an interoperable standard. Rules for the Japanese standard have been discussed since 2021, when EIPA and the Japanese government have been working with OpenPEPPOL. In Japan, PINT is used. This is the international version of PEPPOL, based on BIS Billing 3.0. This means that PEPPOL access point companies play a key role in the new system. Of course, in addition to them, two significant players participate in this configuration. These are companies and government agencies.

With the entry into force of the Qualified Invoice Method System, only registered economic operators are able to issue a qualified invoice, and only the possession of such an invoice entitles the holder to deduct the CT charged on purchases. So, based on the rules applicable under the new system, the JCT taxpayer is required to store a qualified invoice issued by a registered invoice issuer to be able to apply for an input credit.

Who is obliged to use e-invoicing in Japan?

B2G and B2B electronic invoicing are not mandatory in Japan. However, taxpayers may use solutions based on PEPPOL and issue electronic invoices.

The Japanese government introduced the Qualified Invoicing Method System ("QIMS") on October 1, 2023, to streamline the rules for issuing invoices and the information that must be included. The PEPPOL–PINT format meets the requirements of QIMS. Therefore, EIPA encourages the exchange of invoices in this form.

Characteristics of the e-invoicing in Japan

Archiving requirements for e‑Invoicing in Japan

The required storage period is 10 years.

What is the required format of an e-invoice

Issuing and receving e-invocies is allowed thanks to the PEPPOL network. JP PINT is a standard specification for digital invoices exchanged over the PEPPOL network in Japan.