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
| Criterion | Japan | Vietnam |
|---|---|---|
| Standard rate | 10% (8% reduced) | 10% (8% until 31 December 2026) |
| Deduction invoice | Qualified Invoice (registration required) | Mandatory e-invoice |
| Exports | 0% (refundable) | 0% (refundable) |
| Cross-compatibility | Doesn’t recognise VN invoices | Doesn’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.
