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.

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.