Filling out vending machine addresses? Pushing each other to pay transfer fees… “invoice panic” happening in the field one month after the start of the program.

The many screams that come to the tax accountant

Why do I have to spend so much of my heart and time on a system that benefits no one? I feel nothing but anger and emptiness.”

According to a survey conducted by Teikoku Databank in mid-October, more than 60% of companies answered that they are “coping well” with the invoice system, while more than 90% of companies answered that they are “concerned” about the increased workload. What are the “concerns” surrounding the “invoice” with a 13-digit registration number starting with “T”?

We interviewed four tax accountants who are on the front lines of invoice handling and two who have reported to the Fair Trade Commission about the “invoice panic” that is occurring on the frontlines.

• [Roundtable Discussion Participants
• Mr. Ryuichi Yamada, Chairperson of the National Federation of Young Certified Public Tax Accountants’ Associations Invoice System Measures Committee and former President of the Federation
• Mr. Norimitsu Takahashi, Director of the present law measures department of the Federation
• Kazumasa Saeki, Representative Partner, Tokyo Nanbu Accounting Tax Corporation
• Mr. Anji, Certified Public Accountant, licensed tax accountant, and voice actor
• Young voice actor Mr. A
• Veteran voice actor Mr. B

The invoice call center provided by the IRS does not connect at all.

The qualification I obtained is that of a CPA, not an “invoice advisor. ……

This is the lament of Mr. Anji, a certified public accountant, licensed tax accountant, and voice actor. At the accounting firm where Mr. Anji works, the number of consultations from clients has increased rapidly since the start of the system. He says that his time disappears in the blink of an eye, as he is asked for advice on management policies, such as , “When dealing with businesses that do not receive invoices, do we have no choice but to ask the other party to lower the price?

Although we have been informing our clients about the system even before it was introduced, many of them are still unable to make up their minds about the policy. I can’t help it if I say that my main business is tax consultation services, but I feel that business owners are wasting their time on unnecessary work beyond their imagination,” said Mr. Anji.

The result of the combination of a serious attitude that “the system must be strictly enforced” and a cumbersome system is a tremendous administrative burden on the front lines.

Frankly speaking, I don’t think the administrative burden can be simply described as a “paperwork burden. The increased administrative burden caused by the invoice system is only a hassle and does not bring in any revenue.

Even so, those who can still consult with a tax accountant are the lucky ones, and many small businesses have no connections with specialists. That said, I have heard that the invoice call center provided by the IRS is not connected at all,” said Mr. Anji.

Drinks bought from vending machines…enter the “address of the vending machine” where the drinks were purchased in the cashier’s ledger!

When Mr. Anji told this to the person in charge of the construction company that was supplying drinks to the carpenter, he was surprised and asked, “Do we have to do such a troublesome thing? He was surprised and said, “Do I have to go through such a hassle?

Not only businesses, but even tax practitioners are not sure how to deal with the situation.

In the case of one of my advisory clients in the automobile sales industry, he decided that while an invoice is not required for purchases of cars from general consumers, an invoice would be required for purchases of cars used by businesses, but there is no Q&A for this on the IRS website. We also consulted with a major car manufacturer with whom we do business, but the manufacturer’s sales staff has not received any information down from the top, and the transaction is proceeding without anyone knowing the correct answer. Perhaps the transaction was not anticipated by the Ministry of Finance or the IRS.

Speaking of transactions that were not envisioned by the ministries and agencies, there is the “split invoice. Our organization of tax accountants sometimes orders box lunches for meetings, etc. If this were true, we would like each participant to issue an invoice for the cost of the box lunch, but many box lunch shops, perhaps because of the time and effort involved, only issue a single invoice for the entire group. The same is true when using restaurants, and I think this is another case where this was not anticipated,” said Norimitsu Takahashi.

There was a case in which a coin parking management company could not issue invoices even though it was an invoice-issuing business because it could not make the capital investment to make all ticketing machines invoice-compliant.

When we contacted the coin parking companies, they agreed to issue an invoice each time if we contacted them, but considering the time and effort required to call and get an invoice each time for a parking fee of about 200 yen per time, many advisory companies gave up,” said Mr. Anji.

When Mr. Anji later inquired with the National Tax Agency about what to do “when a non-invoice invoice is issued even though the company is an invoice-issuing business,” they replied that “transitional measures are applied and 80% of the purchase tax credit is possible.

‘ “Shouldn’t this case be included in the Q&A?” I told them, but the IRS said, ‘It is difficult to do so because we do not assume that businesses that can issue invoices will not issue invoices. I think that the voices of those in the field, who are being confronted with cases beyond their imagination, should be reflected as soon as possible. ……” (Mr. Anji)

Businesses are also pushing “transfer fees” on each other, taking advantage of invoices

Businesses have begun to impose “transfer fees” on each other, taking advantage of invoices,” said Ryuichi Yamada, former president of the National Federation of Certified Public Tax Accountants for Young Taxpayers.

According to the Reiwa 2023 tax reform, it is no longer necessary to issue invoices for bank transfer fees of less than 10,000 yen including tax, as long as the seller of the goods or service discounts the amount of the bank transfer fee. However, we have been frequently consulted by our clients that they are still receiving requests from their business partners to issue invoices for transfer fees of 300 or 500 yen.

This has led to some cases where the buyer is being asked to pay the transfer fee that had been borne by the seller, and it appears that there is a push-and-pull of transfer fees that is taking advantage of the system.

The reason why businesses go through such trouble to obtain invoices in the first place is because they have “golden ticket” value for them.

Until now, taxable businesses (*) with annual sales exceeding 10 million yen could deduct the consumption tax on purchases from the consumption tax on sales as long as they had an invoice. This is called the “credit for taxes on purchases. (*Taxable sales in the base period exceeded 10 million yen)

• Example
• Sales 33 million yen (including 3 million yen of consumption tax)
• Purchases 22 million yen (of which 2 million yen is consumption tax)
• Consumption tax on sales 3 million yen – Consumption tax on purchases 2 million yen = Tax payment 1 million yen

However, under the invoice system, only a qualified invoice with a registration number (invoice) can be used to deduct the purchase tax, so in the above example, the minus 2 million yen would not be possible. The amount of consumption tax paid would then jump from 1 million yen to 3 million yen.

However, not just anyone can issue an invoice, and becoming a taxable business is a prerequisite. For small businesses that have not had to pay consumption tax in the past, becoming an issuing business itself is a matter of life and death. This is the reason why the invoice system is called a “substantial tax increase.

One of my advisory clients is a business owner who has many in-house workers doing work for him, and on an annual basis, the payment to these people amounts to 40 million yen. However, since the remuneration per person is as small as 30,000 to 40,000 yen per month, it is heartbreaking to ask them to issue invoices.

However, six years from now, when the tax reduction measures end, the consumption tax will increase by 10%, and the company will have to pay 4 million yen more than it does now.

The manager said, ‘Eventually, we will have no choice but to cover the tax increase by raising the prices of the products we sell. That price increase is caused by the invoice, so it is not in the interest of the business, either,” Yamada said.

There is a movement to eliminate businesses that do not issue invoices in order to avoid the invoice tax hike,” said Kazumasa Saeki, a tax accountant who has dealt with small and medium-sized businesses in Ota Ward.

One used car auction site has issued a notice that businesses that have not registered an invoice cannot participate. One of my clients was barred from the auction, even though they were in the process of applying for registration. Thanks to this, used cars cannot be sold, and the auction house is also in trouble. Although it may be a matter of personal guilt, it is probably a matter of life and death for the auction house as well.

It is said that unilateral suspension of transactions by the buyer does not constitute a violation of the Antimonopoly Law, and it is too much to ask that there be no room for redress in such cases.

A young voice actor who had been given a one-sided discount by his contracting agency, Mr. A made up his mind and reported the matter to the Fair Trade Commission a few months before the start of the system.

After learning about the invoice system, I was anxious to see what would happen because there was a possibility that I would be forced to pay the consumption tax by the agency, but I never heard anything from the agency.

Shortly before the start of the system, we were suddenly told in writing that we would have to cut our fees by 10% from now on for voice actors who could not issue invoices.

The “10% cut” was made unilaterally and suddenly, without any explanatory meeting or negotiation. Unlike veterans, Ms. A was in a less powerful position and was not in an environment where she could tell her manager or others at the office, so she reported the matter to the Fair Trade Commission. As yet, there has been no further report from the office.

In my case, it was not my own firm, but I knew of three firms like Mr. A’s that had declared they would cut voice actors’ pay by 10%, no questions asked, so I reported them to the Fair Trade Commission.

I reported it to three different companies. The agency is so big that it also holds the casting rights, so I couldn’t casually ask the voice actors at the agency, ‘What happened? I couldn’t even casually ask one of their voice actors, “How did it go? If they found out that I had reported the incident, it could have affected my work, so it was a risk. In other words, it is the people who belong to the firm who should learn and negotiate with the firm, and that is what I did.

However, the more I learn about the invoice system, the angrier I get. Why should I spend so much of my mind and time on something that benefits no one? I feel nothing but anger and emptiness.

The government has begun considering the creation of subsidies as a measure against invoicing…

Two days before the start of the invoice system, the government held its first “Ministerial Conference on Promoting Smooth Implementation of the Invoice System,” and in October began considering the establishment of subsidies as a measure against invoices. How do tax accountants, who are busy in the field, perceive this support measure?

As the Diet session began, Prime Minister Kishida talked about giving back to the people, but in the end, the government has a patronizing way of giving back a little after it has squeezed the public. Support for invoicing seems to be part of that, and the best way to reduce the burden of the invoicing system is to stop the system,” said Saeki.

“Even if you call it support, as long as resources cannot be allocated onsite, I don’t think that is a problem that can be solved with money. Also, I am concerned that if the company’s track record is used to say, “We have provided this much support for digitization,” it may lead to further problems, such as, “Why can’t we comply with the Electronic Bookkeeping Act?

I feel that the current support is for capital investment to automate clerical work, rather than for the extra effort and skills that will be required of the people involved in the invoice process. I hear that the invoice system raises tax revenues by 250 billion yen, but if the tax revenues are to be returned through subsidies, it would be better not to implement the invoice system itself,” said Yamada.

There were many small businesses that were not able to take advantage of the IT introduction subsidies, and I don’t think that introducing new subsidies without understanding the actual situation will immediately alleviate everyone’s concerns. Shouldn’t we first get a proper grasp of the actual situation on the ground?

Also, Although it is often seen as a problem for tax-exempt businesses, many taxable businesses are actually suffering. I would like the government to grasp this reality as well.

The government is just saying, ‘We didn’t expect this,’ but I think we should deal with the problem before it happens, rather than after it happens.