”Frequently-Asked Questions” about Invoices Has Been Published


After the October 2023 revision of the Invoice Q&A, a compilation of questions received by the national tax authorities has been published in the form of "Frequently-Asked Questions".

If a Description is Different between a Receipt and the Invoice Publication Website

This describes how to deal with a case where the description on the receipt (simple invoice) received differs from the search result on the invoice-issuing business’s public announcement website. There are cases where a receipt with a trade name (a "doing business as" name) is received, but when the invoice registration number on the receipt is searched for on the website of the invoice-issuing business operator, only the name or title of the business operator is displayed - not the trade name. In such cases, it has been clarified that if the validity of the registration number can be confirmed, the purchase tax credit is allowed, as a valid invoice.

Delivery of a Handwritten Receipt

Although there is no obligation to issue invoices or simplified invoices for transactions not subject to consumption tax, such as bathing tax, examples of two handwritten simplified invoices are shown in question (3), including a case of a transaction not subject to taxation, as transactions not subject to taxation can also be included in a simplified invoice.
*Figures taken from the National Tax Agency’s “Frequently-Asked Questions”

Regarding Invoices Issued by Tax-Exempt Businesses

A response regarding transactions with tax-exempt businesses was also presented. Tax-exempt businesses are not allowed to deliver invoices, but they are still allowed to deliver billings that do not fall under the ‘invoice’ category.

However, the delivery of documents that may be mistakenly identified as invoices is prohibited and subject to penalties. For example, documents with alphanumeric characters that resemble registration numbers may be misidentified as invoices.

In addition, even if a tax-exempt business includes an amount equivalent to consumption tax on a bill, basically it is not subject to penalties as long as there is no risk of misidentification as an invoice. Q&A (4) clearly states that it is appropriate for tax-exempt businesses also to charge the amount equivalent to consumption tax incurred at the time of purchase, on top of the transaction price.

Even in Transactions with Invoice-issuing Businesses, Transitional Measures Can be Applied

For taxable purchases from consumers, tax-exempt enterprises, and taxable enterprises that are not registered as invoice issuers, there is a transitional measure that allows 80% of the amount equivalent to purchase tax to be deducted for a certain period. It has also been clarified that the transitional measures are not limited to transactions with parties other than invoice-issuing businesses, but also include invoices received from invoice-issuing businesses that do not include a registration number, etc., if those invoices meet the description requirements for categorized (differentiated) invoices, etc.

In order to qualify for the transitional measures, it is necessary to keep books stating that the transitional measures apply, such as "80% deductible," "exempt," etc., as well as invoices, etc., listing the same items as required for categorized invoices, etc.

Reconfirming about Gifts Given through the Taxation by Settlement at the Time of Inheritance System


It is expected that the number of gifts given through the system of taxation by settlement at the time of inheritance will increase. However, if you are going to give or receive a gift using this system, you must do so after careful consideration. Rashly choosing to give/receive a gift this way without considering your future gift plans could cause you to end up facing significant risks. When giving a gift utilizing the taxation by settlement at the time of inheritance system, be sure to fully understand both the advantages and disadvantages before giving the gift.

Gifts during and after January 2024

As of January 1, 2024, a basic exemption of 1.1 million yen will be established with respect to gifts given through the system of taxation by settlement at the time of inheritance. This is different from the basic exemption of 1.1 million yen for gift tax (calendar-year gifting), so after January 1, 2024, the following two will proceed simultaneously:

  1. Basic exemption amount for calendar year gifts: 1.1 million yen
  2. Basic exemption amount of 1.1 million yen for taxable gifts given through settlement at the time of inheritance

While calendar year gifts on or after January 1, 2024 will be subject to carry-back (持ち戻し) for seven years, gifts taxable at the time of inheritance will not be subject to such carry-back, so we often hear people say that after 2024, gifts taxable at the time of inheritance will probably increase. However, there are some points that must be kept in mind if the system of taxation by settlement at the time of inheritance is used.

What is a Taxable Gift at the Time of Inheritance?

The system of taxation of gifts through settlement at the time of inheritance began in 2003, so has been in effect for 20 years now. Gifts of up to ¥25 million during one's lifetime are exempt from gift tax. A flat 20% gift tax is imposed on any portion exceeding ¥25 million.

However, it is important to note that all property donated via the system of taxation through settlement at the time of inheritance will be added to the donor's estate at the time of the donor's death, and inheritance tax will be imposed.
*The difference between the inheritance tax incurred at the donor’s death, and the gift taxes paid in the past will be adjusted.
The end result is that gift taxes are settled at the time of inheritance, so the gift taxes paid before are temporary in nature. This is the functioning of the system for taxation settlement at the time of inheritance.

Example: Utilizing the system of taxation settlement at the time of inheritance, a grandfather gives ¥5 million in cash to his grandson, and the grandson uses the cash to purchase listed stocks.
Even if the market value of the listed stocks was 20 million yen at the time of the grandfather's passing, only the ¥5 million cash portion would be subject to inheritance tax. Therefore, if you use this system to purchase property that is expected to increase in value, you will enjoy a benefit, while it will be a loss if you donate property that then decreases in value.

Disadvantages of Giving via the System of Taxation Settlement at the Time of Inheritance

The disadvantage of giving through the taxation of gifts by settlement at the time of inheritance is that once the choice is made, there can be no return to calendar-year gifting.

For gifts after the 25 million yen limit has been used up, a gift tax of 20% will be imposed on the portion of the gift which exceeds the basic deduction of 1.1 million yen, and the extra portion will be added to the donor's estate.

Another disadvantage is that the statute of limitations for gift tax will no longer be applicable. The normal calendar year gift statute of limitations expires six years after the statutory filing deadline, unless the gift is a malicious case. Even if you make a gift and inadvertently forget to file a return, you may not be subject to gift tax after a certain period of time.

However, the story is different in the case of gifts via taxation upon settlement at the time of inheritance. Once this system is elected, all gift amounts after the election are added to the estate. In other words, there is no longer a statute of limitations on the imposition of gift tax.

What are Debtor Classifications?


Banks assign debtor classifications to loan recipients based on banks’ internal manuals. A borrower's ability to be approved for a loan depends on which debtor category they are classified in. Aiming for as good a debtor classification as possible will help lead to a comfortable cash flow.

What are Debtor Classifications?

Borrower/Debtor classification is a category set by a bank for each company to which it provides loans, and is determined based on the company's financial condition, profitability, and loan repayment status.

Based on the debtor classification of the company to which a loan is extended, and the state of securitization (how much the bank can recover if the borrowing company is unable to repay the loan, through subrogation by a credit guarantee association, sale of collateral, etc.), the bank sets aside an allowance for doubtful accounts for the loan to the company and prepares the financial statements of the bank itself.

Debtor classification was described in the Financial Inspection Manual enacted in 1999, and based on that manual, banks assigned debtor classifications to loan recipient companies, classified loans by the degree of risk of non-recovery based on the debtor classification, and recorded allowances for loan losses. The Financial Inspection Manual was abolished in 2019, but it is expected that the operation of debtor classifications will continue for each bank for some time to come.

Explanation of Debtor Classifications

There are five debtor categories, as follows:

  1. Normal borrowers
  2. Borrowers requiring caution
  3. Potentially bankrupt borrowers
  4. Effectively bankrupt borrowers
  5. Bankrupt borrowers

1. Normal Borrowers

These are companies that are performing well, have no particular financial problems, and are not delinquent.

2. Borrowers Requiring Caution/Special Attention

Borrowers requiring special attention are classified into "Other Borrowers Requiring Special Attention" and "Borrowers Requiring Supervision”. Borrowers requiring special attention are companies that are performing poorly, have financial problems, or have delinquent loans.

Among the companies requiring caution, those companies whose loans are wholly or partially "loans in need of supervision" are considered to be in need of supervision.

Sub-standard loans are loans that are delinquent for three months or more, or “loans with relaxed lending terms” (restructured loans). “Restructured loans” are loans for which the bank has granted a grace period for principal repayment, interest rate reduction or waiver, interest payment deferral, or debt forgiveness in order to support the borrower's business restructuring.

In other words, companies that are delinquent for more than three months, or have loans for which the bank has taken special measures, are classified as “Borrowers Requiring Supervision", while other companies with financial problems are classified as "Other Borrowers requiring Special Attention”.

3. Potentially Bankrupt Companies

The company is in financial difficulties, is in no condition for improvement, and has long-term delinquent loans.

4. Effectively Bankrupt Debtor

Although legally and formally bankruptcy has not occurred, the company is practically no longer in business and is as good as bankrupt, as seen by measures such as its sales offices having been closed due to voluntary closures by the operator.

5. Bankrupt Companies

The classification of a borrower by the bank will greatly affect the ease with which a loan is approved. A borrower classified as "Normal" is more likely to be approved for a loan, while a borrower classified in "Other Borrowers Requiring Special Attention" is less likely to be approved.

  • Russell Bedford

    locate a single person, or to identify an individual in context. Please read our privacy policy carefully to get a clear understanding of how we collect, use, protect or otherwise handle your Personally Identifiable Information in accordance with our website.

    What personal information do we collect from the people that visit our blog, website or app?

    When ordering or registering on our site, as appropriate, you may be asked to enter your name, email address, Address or other details to help you with your experience.

    When do we collect information?

    We collect information from you when you fill out a form or enter information on our site.

    How do we use your information?

    We may use the information we collect from you when you register, make a purchase, sign up for our newsletter, respond to a survey or marketing communication, surf the website, or use certain other site features in the following ways:

    • To follow up with them after correspondence (live chat, email or phone inquiries)

    How do we protect your information?

    We do not use vulnerability scanning and/or scanning to PCI standards.
    We only provide articles and information. We never ask for credit card numbers.
    We do not use Malware Scanning.

    We do not use an SSL certificate
    • We only provide articles and information. We never ask for personal or private information like names, email addresses, or credit card numbers.

    Do we use 'cookies'?

    Yes. Cookies are small files that a site or its service provider transfers to your computer's hard drive through your Web browser (if you allow) that enables the site's or service provider's systems to recognize your browser and capture and remember certain information. For instance, we use cookies to help us remember and process the items in your shopping cart. They are also used to help us understand your preferences based on previous or current site activity, which enables us to provide you with improved services. We also use cookies to help us compile aggregate data about site traffic and site interaction so that we can offer better site experiences and tools in the future.

    We use cookies to:
    • Keep track of advertisements.
    • Compile aggregate data about site traffic and site interactions in order to offer better site experiences and tools in the future. We may also use trusted third-party services that track this information on our behalf.

    You can choose to have your computer warn you each time a cookie is being sent, or you can choose to turn off all cookies. You do this through your browser settings. Since browser is a little different, look at your browser's Help Menu to learn the correct way to modify your cookies.

    If you turn cookies off, some features will be disabled. It won't affect the user's experience that make your site experience more efficient and may not function properly.
    However, you will still be able to place orders.

    Third-party disclosure

    We do not sell, trade, or otherwise transfer to outside parties your Personally Identifiable Information unless we provide users with advance notice. This does not include website hosting partners and other parties who assist us in operating our website, conducting our business, or serving our users, so long as those parties agree to keep this information confidential. We may also release information when it's release is appropriate to comply with the law, enforce our site policies, or protect ours or others' rights, property or safety.

    However, non-personally identifiable visitor information may be provided to other parties for marketing, advertising, or other uses.

    Third-party links

    Occasionally, at our discretion, we may include or offer third-party products or services on our website. These third-party sites have separate and independent privacy policies. We therefore have no responsibility or liability for the content and activities of these linked sites. Nonetheless, we seek to protect the integrity of our site and welcome any feedback about these sites.


    Google's advertising requirements can be summed up by Google's Advertising Principles. They are put in place to provide a positive experience for users.

    We use Google AdSense Advertising on our website.

    Google, as a third-party vendor, uses cookies to serve ads on our site. Google's use of the DART cookie enables it to serve ads to our users based on previous visits to our site and other sites on the Internet. Users may opt-out of the use of the DART cookie by visiting the Google Ad and Content Network privacy policy.

    We have implemented the following:
    • Remarketing with Google AdSense

    We, along with third-party vendors such as Google use first-party cookies (such as the Google Analytics cookies) and third-party cookies (such as the DoubleClick cookie) or other third-party identifiers together to compile data regarding user interactions with ad impressions and other ad service functions as they relate to our website.

    Opting out:

    Users can set preferences for how Google advertises to you using the Google Ad Settings page. Alternatively, you can opt out by visiting the Network Advertising Initiative Opt Out page or by using the Google Analytics Opt Out Browser add on.

    California Online Privacy Protection Act

    CalOPPA is the first state law in the nation to require commercial websites and online services to post a privacy policy. The law's reach stretches well beyond California to require any person or company in the United States (and conceivably the world) that operates websites collecting Personally Identifiable Information from California consumers to post a conspicuous privacy policy on its website stating exactly the information being collected and those individuals or companies with whom it is being shared. - See more at:

    According to CalOPPA, we agree to the following:
    Users can visit our site anonymously.
    Once this privacy policy is created, we will add a link to it on our home page or as a minimum, on the first significant page after entering our website.
    Our Privacy Policy link includes the word 'Privacy' and can be easily be found on the page specified above.

    You will be notified of any Privacy Policy changes:
    • On our Privacy Policy Page
    Can change your personal information:
    • By emailing us

    How does our site handle Do Not Track signals?

    We honor Do Not Track signals and Do Not Track, plant cookies, or use advertising when a Do Not Track (DNT) browser mechanism is in place.

    Does our site allow third-party behavioral tracking?

    It's also important to note that we allow third-party behavioral tracking

    COPPA (Children Online Privacy Protection Act)

    When it comes to the collection of personal information from children under the age of 13 years old, the Children's Online Privacy Protection Act (COPPA) puts parents in control. The Federal Trade Commission, United States' consumer protection agency, enforces the COPPA Rule, which spells out what operators of websites and online services must do to protect children's privacy and safety online.

    We do not specifically market to children under the age of 13 years old.

    Fair Information Practices

    The Fair Information Practices Principles form the backbone of privacy law in the United States and the concepts they include have played a significant role in the development of data protection laws around the globe. Understanding the Fair Information Practice Principles and how they should be implemented is critical to comply with the various privacy laws that protect personal information.

    In order to be in line with Fair Information Practices we will take the following responsive action, should a data breach occur:
    We will notify the users via in-site notification
    • Within 7 business days

    We also agree to the Individual Redress Principle which requires that individuals have the right to legally pursue enforceable rights against data collectors and processors who fail to adhere to the law. This principle requires not only that individuals have enforceable rights against data users, but also that individuals have recourse to courts or government agencies to investigate and/or prosecute non-compliance by data processors.

    CAN SPAM Act

    The CAN-SPAM Act is a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have emails stopped from being sent to them, and spells out tough penalties for violations.

    We collect your email address in order to:
    • Send information, respond to inquiries, and/or other requests or questions

    To be in accordance with CANSPAM, we agree to the following:
    • Not use false or misleading subjects or email addresses.
    • Identify the message as an advertisement in some reasonable way.
    • Include the physical address of our business or site headquarters.
    • Monitor third-party email marketing services for compliance, if one is used.
    • Honor opt-out/unsubscribe requests quickly.
    • Allow users to unsubscribe by using the link at the bottom of each email.

    If at any time you would like to unsubscribe from receiving future emails, you can email us at
    info★ (replace ★ with at-mark) and we will promptly remove you from ALL correspondence.

    Contacting Us

Copyright© SHINSEI INTERNATIONAL TAX CO. All Rights Reserved.