Will the transitional measure for transactions with tax-exempt businesses spanning September 30, 2026 be 80% or 50%?

2025年11月7日 2025年11月7日

tsuzukizeirishi

Generally, transactions with consumption tax-exempt businesses are not eligible for input tax credits.

However, the following transitional measures currently apply, allowing for partial input tax credits.

From October 1, 2023 to September 30, 2026, 80% of the input tax credit amount is applicable.
From October 1, 2026 to September 30, 2029, 50% of the input tax credit amount is applicable.

There is no problem if the billing closing date is the last day of the month.

But, if the billing closing date is the 20th or 25th, it will extend beyond September 30, 2026.
(For example, September 21st to October 20th.)

In that case, will the 80% or 50% transitional measure apply?

Products are determined on the date of delivery, Services are determined on the date of completion

When applying the transitional measures, the determination is not simply based on the invoice date.

For purchased goods, the determination is based on the delivery date of the goods.
For received services, the determination is based on the completion date of the services.

For example, consider a case where the billing closing date on the 20th.

If you receive goods on 9/25 and 10/5 and invoice the tax-exempt business on 10/20,

Next, in the case of services,

if you request interior construction work starting on 9/25 and completed on 10/15,

the determination would be based on the completion date of the services.

Therefore, the input tax credit for the invoice dated 10/20 will be 50%.