Compliance with Japan's Tax Invoice Preservation System

Japanese sellers must report the consumption tax calculated on purchases, as issued by the Japanese government. This guide provides details on using Square's APIs to generate qualified tax invoices and meet compliance for earning tax credit.

Japan implemented a new tax invoice preservation system (also known as the "Invoice System") on October 1, 2023, where sellers that pay a consumption tax can receive a purchase tax credit by issuing and retaining tax invoices. The seller's business registration ID and calculated order items by tax rate are printed on every receipt.

If a Checkout object includes an order, the order line items must be itemized so the seller can calculate the 10% tax and the reduced 8% tax, where applicable, and complete the checkout order.

For storing tax information on reports, Square's hardware-based APIs such as Terminal API don't support this workflow. You can use the Checkout API, Payments API, Invoices API, or Square for POS applications for creating checkout orders for payments.

You must create order items that contain an 8% and 10% tax to complete an itemized checkout. This produces a receipt that is compliant with the Japanese tax system.

For more information about applying taxes to orders, see Apply Taxes and Discounts.

The following issues with printing receipts and invoices might occur when you need to meet compliance with Japan's invoice system:

• You must connect and configure a third-party printer to a Square Terminal or another Square Point of Sale device so you can customize the receipt layout and meet compliance.
• Create a Terminal action request to print the receipt with the CreateTerminalAction endpoint. If you use the Point of Sale API, you will receive a transaction ID, which is an order id. The Terminal action requires a payment_id to print a receipt. Get the payment_id with the Payments API, and then call the Orders API to get an order for the transaction which contains the tenders information. Use the tenders.id, which you use as the payment ID to print the receipt. For more information, see Print or Issue Receipts for Cash Payments and Previous Transactions.

You can print the following receipts types with your application to meet compliance:

• Cash payments made with custom amount
• Card payments made with custom amount
• Card payments made with itemization

For example, you can make cash payments with the Payments API, Terminal API, and Point-of-Sale API with a custom amount (non-itemized checkout). For itemized checkout sales, you can use the Payments API or Invoices API.

Regional Differences for International Development