May 17, 2023
Japan Fair Trade Commission
(Caution cases related to the Implementation of the Invoice System)
From October 1 of this year, so-called “Invoice System” will be introduced, as a way of input consumption tax credit. In January 2022, the Japan Fair Trade Commission released the "Invoice Q&As," which was prepared jointly with related ministries and agencies, to clarify its approach to the practices that may become problematic under the Antimonopoly Act and the Subcontract Act between the ordering enterprises and the exempt enterprises when implementing the Invoice system, and to publicize such practices.
From October 1 of this year, so-called “Invoice System” will be introduced, as a way of input consumption tax credit. In January 2022, the Japan Fair Trade Commission released the "Invoice Q&As," which was prepared jointly with related ministries and agencies, to clarify its approach to the practices that may become problematic under the Antimonopoly Act and the Subcontract Act between the ordering enterprises and the exempt enterprises when implementing the Invoice system, and to publicize such practices.
In the Invoice Q&A, the Japan Fair Trade Commission expressed its view that it may become problematic under the Antimonopoly Act for the ordering enterprises to unilaterally notify the exempt enterprises that the former reduce the transaction price unless the latter become a taxable enterprises.
Recently, in connection with the implementation of the Invoice System, we have identified several cases that may lead to violations of the Antimonopoly Act, and from the perspective of preventing such violations, we decided to publish a summary of caution cases to clarify the type of business in which such cases occurred.
Where exempt enterprises do not convert to taxable enterprises after the implementation of the Invoice system and remain exempt enterprises, we have found such cases that the ordering enterprises unilaterally notified that the amount equivalent to consumption tax has been deducted from the transaction price, despite the fact that the transitional measures allow the purchase tax credit to a certain extent.
Specifically, those cases were found in the following business transactions:
Recently, in connection with the implementation of the Invoice System, we have identified several cases that may lead to violations of the Antimonopoly Act, and from the perspective of preventing such violations, we decided to publish a summary of caution cases to clarify the type of business in which such cases occurred.
Where exempt enterprises do not convert to taxable enterprises after the implementation of the Invoice system and remain exempt enterprises, we have found such cases that the ordering enterprises unilaterally notified that the amount equivalent to consumption tax has been deducted from the transaction price, despite the fact that the transitional measures allow the purchase tax credit to a certain extent.
Specifically, those cases were found in the following business transactions:
・“Illustration Production enterprise”and “Illustrator”
・“Manufacture and sales pf processed agricultural foods” and “farmer”
・“Handmade shop operator ” and “Handmade artist”
These cases could lead to violations of the Antimonopoly Act, specifically as abuse of superior bargaining position, and we issued cautions to them.
In addition to the "Invoice Q& A" that the Japan Fair Trade Commission posts on our website "Invoice System Related Corner" in order to prevent violations of the Antimonopoly Act or the Subcontract Act relating to the implementation of the Invoice System, we will also post today’s hand-out materials on caution cases. In addition, we will work with relevant ministries and agencies and organizations to raise public awareness to enterprises and deal with violations of the Antimonopoly Act and the Subcontract Act strictly.
（Tentative translation）
These cases could lead to violations of the Antimonopoly Act, specifically as abuse of superior bargaining position, and we issued cautions to them.
In addition to the "Invoice Q& A" that the Japan Fair Trade Commission posts on our website "Invoice System Related Corner" in order to prevent violations of the Antimonopoly Act or the Subcontract Act relating to the implementation of the Invoice System, we will also post today’s hand-out materials on caution cases. In addition, we will work with relevant ministries and agencies and organizations to raise public awareness to enterprises and deal with violations of the Antimonopoly Act and the Subcontract Act strictly.
（Tentative translation）
