Dear Friends of the EBC,
On 20 September, the Tax Committee of the European Business Council in Japan (EBC) issued recommendations to streamline the new digital expense settlement system for tax purposes. Japan’s recent push for digital transformation in payments has been set back by the Qualified Invoice System, which now requires receipts for almost all transactions, including small cashless payments. This has increased the complexity of expense claims, wiping out previous efficiency gains. Global practices can serve as a model for reform. Implementing the EBC’s proposals would reduce administrative burdens and support Japan’s ongoing digital innovation efforts.
In the short term, the EBC Tax Committee recommends reducing receipt requirements by extending the current exemption for travel expenses under JPY 30,000 to more transactions and eliminating receipts for cashless payments linked to expense systems. Long-term reforms include the creation of an automated system that allows credit card data to meet the requirements of Japan’s Qualified Invoice System, reducing the need for receipts. Financial support is also proposed to help upgrade payment systems for compliance.
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