Tax

VAT/GST and Export Refunds: Japan vs Vietnam — Cash-Flow Impact

Factory — illustrating the VAT and invoicing topic

The setup: a Japanese company buying from a Vietnamese supplier asks for a “deduction-eligible” invoice under Japan’s Qualified Invoice System (from 1 October 2023). The Vietnamese supplier is puzzled: can a Vietnamese e-invoice work? Answer: not directly — Japan’s system only recognises invoices issued by Japan-registered businesses; a Vietnamese invoice is no substitute.

Japan: 10% consumption tax plus the qualified invoice system

  • Rate: 10% (8% reduced for food and non-alcoholic drinks).
  • Qualified Invoice System (from 1 October 2023): only invoices from registered issuers qualify for input-tax deduction — buying from an unregistered supplier means losing the deduction (with a transition path).
  • Exports: exempt (0%) — input tax refundable.
  • Refunds: via the input-credit mechanism; exporters are routinely refunded.

Vietnam: 10% VAT (8% until 31 December 2026) plus mandatory e-invoicing

VAT Law 48/2024/QH15 (effective 1 July 2025): rates of 10%, 5%, 0%; eligible goods and services at 8% until 31 December 2026. E-invoicing is mandatory for all businesses — but it is Vietnam’s system, incompatible with Japan’s Qualified Invoice.

The company in the opening scenario: wanting Japanese input-tax deduction on purchases from Vietnam → not available, because the Vietnamese supplier is not a Japan-registered qualified invoice issuer. Workarounds: import via a Japan-registered importer, or absorb the non-deductible tax cost.

Comparison

CriterionJapanVietnam
Standard rate10% (8% reduced)10% (8% until 31 December 2026)
Deduction invoiceQualified Invoice (registration required)Mandatory e-invoice
Exports0% (refundable)0% (refundable)
Cross-compatibilityDoesn’t recognise VN invoicesDoesn’t recognise JP invoices

Four practical points

1. Cross-border purchases lose deduction. A hidden cost of Japan–Vietnam trade — price it into procurement.

2. Qualified-issuer registration isn’t for VN suppliers. Only businesses with a Japanese tax presence can register.

3. Exports are the easy part in both. 0% plus input-tax refund — the lowest-friction segment.

4. Check Japan’s transition path. Transitional rules allow partial deduction on purchases from unregistered suppliers — but time-limited.

Frequently asked questions

1. What is the Qualified Invoice System?

Japan’s deduction-eligible invoice system (from 1 October 2023): only invoices from registered issuers support consumption-tax input deduction.

2. Does a Vietnamese e-invoice work in Japan?

No — the systems are incompatible; a Vietnamese supplier is not a Japan-registered qualified invoice issuer.

3. What tax applies exporting to Japan?

Export from Vietnam: 0% (input tax refundable). Import into Japan: consumption tax at import.

4. Buying from an unregistered supplier in Japan?

Input-tax deduction is lost (transitional rules allow partial deduction initially).

5. How long does Vietnam’s 8% last?

Until 31 December 2026 for eligible goods and services — then back to 10% unless new policy extends it.


This article has been quality-reviewed by the FLAW AI Legal Council.