Japan ends the 20% invoice-registration special (2-wari) and adds a 30% version (3-wari) for individuals in 2027 and 2028

What changed in detail

National Tax Agency guidance on the FY2026 tax reform states that the 2-wari special provision (2-wari tokurei) ends with tax periods that include days up to 30 September 2026. Under it, qualified invoice issuers that were previously exempt and became registered pay consumption tax equal to 20% of output tax. For individuals, whose tax period is the calendar year, it therefore continues for the whole of calendar 2026.

It introduces a 3-wari special provision (3-wari tokurei) for individual business operators for calendar years 2027 and 2028, under which payable tax is 30% of output tax. The special deadline for submitting the simplified-taxation election form is also revised for issuers that used either provision, where the following tax period ends on or after 1 October 2026.

What it means

The two measures do not simply continue one another: the 20% treatment stops with tax periods that include days up to 30 September 2026, and the 30% treatment is for individuals, for 2027 and 2028 only. Both apply only to formerly exempt businesses that became registered issuers, not to every new registrant. Companies and other non-individual registrants should plan on the 2-wari ending. Individuals should check how the 3-wari figure compares with the simplified taxation method before filing the election.