【あと1年半後】全事業者､消費税ｲﾝﾎﾞｲｽ改正｡大増税で免税事業者は排除へ！廃止論は？【個人事業主･フリーランス･法人/確定申告制度/経過措置･2割特例･簡易･本則/2026/わかりやすく】

Summary

This video discusses the upcoming changes to Japan's consumption tax invoice system, scheduled for October 2026, and the impact on businesses. The introduction of a new invoice system will significantly increase the tax burden on businesses, particularly small enterprises and self-employed individuals. Key issues like the termination of special tax exemptions, the reduction of tax credit rates, and the potential shift toward digital invoicing are examined. The video also touches on political debates surrounding the abolition of the system and the challenges businesses face as they prepare for these changes.

Takeaways

• 😀 The introduction of the consumption tax invoice system in Japan will lead to an increased burden for businesses starting in October 2026, with the potential tax burden for some businesses rising by 2.5 times.
• 😀 The main function of the consumption tax system is to calculate the tax based on sales revenue minus the tax paid on purchases (input tax credit), which businesses are required to report to the tax authorities.
• 😀 The invoice system (also called the 'Invoicing' system) involves businesses issuing invoices with a specific code that includes the sales tax, and input tax credits being deducted from the total tax liability.
• 😀 A key complication of the invoice system is that businesses must be registered to issue invoices, and those who receive invoices from non-registered businesses cannot deduct the input tax, potentially leading to double taxation.
• 😀 To mitigate this, a transitional 80% tax credit system was introduced, reducing the tax burden for businesses that do not receive invoices from registered businesses, but this will expire in September 2026.
• 😀 Starting in October 2026, the transitional system will be replaced by a 50% tax credit, which will result in a significant increase in costs for businesses, as they will face a 2.5 times higher tax burden.
• 😀 The shift to a 50% tax credit will also reduce the amount of tax relief for individual business owners, cutting their credit by approximately 40%.
• 😀 Socially, this change is expected to push some businesses to stop engaging with individual contractors who do not register for invoices, leading to a potential reduction in the number of businesses offering services to non-registered contractors.
• 😀 The two-year period between 2025 and 2026, with the 80% transitional tax credit and the 20% tax relief system, will be the last period during which smaller businesses can benefit from these easing mechanisms.
• 😀 Discussions about abolishing the invoice system have gained some traction, especially from opposition parties, but there is currently no movement from the ruling party or the finance ministry to abolish the system.
• 😀 Despite calls for abolition, the government's push for digital invoicing remains strong, as it is seen as a way to simplify the tax reporting process, improve efficiency, and align with global digital trends.

Q & A

What is the major change that will occur in October 2026 regarding consumption tax in Japan?

In October 2026, the consumption tax system will undergo significant changes, including an increase in the tax burden for businesses. The 80% exemption for unpaid consumption tax will be reduced to 50%, which will result in a higher tax burden for companies that deal with non-registered tax-exempt businesses.

What is the mechanism of consumption tax calculation in Japan?

The consumption tax is calculated by subtracting the input tax (tax paid on purchases) from the output tax (tax collected from sales). The difference is the amount that businesses need to remit to the tax authorities. For example, if a company collects 3,000 yen in tax but paid 1,000 yen in tax for purchases, the company will remit 2,000 yen.

What is the issue with dealing with tax-exempt businesses under the invoice system?

The problem arises when a business deals with tax-exempt individuals or businesses who are not registered for the invoice system. In such cases, the company cannot claim the input tax deduction for the tax paid to these tax-exempt businesses, resulting in double taxation.

What temporary measure has been introduced to mitigate the impact of the invoice system?

A temporary measure, called the '80% exemption', was introduced for three years starting in October 2023. This allows businesses that deal with tax-exempt businesses to claim 80% of the consumption tax paid as a deductible input tax, reducing the financial burden on companies.

How will the 80% exemption change in October 2026?

In October 2026, the exemption will be reduced from 80% to 50%. This means that businesses will only be able to claim 50% of the tax paid to non-registered tax-exempt businesses as a deductible input tax, resulting in a higher tax burden.

What will happen to businesses that continue to deal with non-registered businesses after 2026?

Businesses will face a higher tax burden due to the reduced exemption. If the business continues to deal with non-registered tax-exempt businesses, they will need to remit more consumption tax, leading to a significant increase in financial pressure, potentially causing businesses to reconsider their relationships with non-registered entities.

What is the impact of the change from 80% to 50% exemption on the financial burden for companies?

The change from 80% to 50% exemption will result in a 2.5 times increase in the financial burden for businesses. For example, if a company previously paid 200 yen in tax, they would now pay 500 yen, making the tax load considerably heavier.

What is the '2% special rule' (2割特例) and when will it end?

The '2% special rule' allows businesses with annual sales under 10 million yen to pay only 2% of the consumption tax instead of the full amount. This rule is scheduled to end in September 2026, after which businesses will have to follow standard consumption tax rules or opt for the 'general taxation' system.

How will the abolition of the 2% special rule affect small businesses?

The abolition of the 2% special rule will increase the consumption tax burden for small businesses. They will have to pay the full consumption tax, and the administrative burden will increase as they will need to track invoices and calculate taxes accurately.

Why do some political groups in Japan advocate for the abolition of the invoice system?

Some political groups, especially opposition parties, advocate for the abolition of the invoice system because it imposes significant administrative burdens on small businesses. They argue that it is unfair to require small businesses to track invoices and deal with increased tax liabilities.