"Does our clinic need to register for the invoice system?", "Do we have to register because we offer self-pay care?", "A corporate client asked for our registration number—what now?" Directors, office managers and medical clerks often ask these questions.
In short, registration as a qualified invoice issuer is optional, and for clinics that only treat patients, there are few situations where it becomes necessary. Clinics with business-facing taxable sales, such as corporate health checkups, should consider it. Based on materials from the National Tax Agency (NTA) and the Japan Medical Association (JMA), this article organizes the decision points and the transitional rules that changed on October 1, 2026.
Disclaimer: This article is general information based on publicly available material as of October 30, 2026. It does not make definitive tax determinations (whether to register, taxable vs. exempt classification, filing method). Please consult your tax accountant or local tax office.
First: insured care is tax-exempt; only some self-pay is taxable
Consumption tax is decided transaction by transaction. The NTA's explanation of non-taxable transactions (No. 6201) lists medical care under the Health Insurance Act, the National Health Insurance Act and similar laws, and medical care covered by workers' accident or automobile liability insurance, as tax-exempt. The same page states that cosmetic surgery, differential bed charges and purchases of over-the-counter drugs are not tax-exempt.
An NTA Q&A also treats care received with a qualification certificate (higher co-payment) as exempt, as long as it is care under the National Health Insurance Act (Consumption Tax Act, Schedule 1, item 6).
| Category | Consumption tax treatment (organized from NTA explanations) |
|---|---|
| Care under the Health Insurance Act / National Health Insurance Act | Exempt |
| Care covered by workers' accident or auto liability insurance | Exempt |
| Cosmetic surgery, differential bed charges, OTC drug sales | Not exempt (taxable) |
| Other self-pay items (checkups, vaccinations, certificates, etc.) | Depends on the item; confirm with your tax accountant |
Because the treatment of other self-pay items can vary, this article does not make a definitive statement. For separating insured and self-pay records, see Separating Insured and Self-Pay Accounting in Practice.
Registration is optional: the NTA's decision points
An NTA leaflet for tax-exempt businesses (revised April 2026) advises considering the following:
- Registration is optional
- Customers who are consumers, tax-exempt businesses, or taxable businesses filing under the simplified taxation system or the 20%/30% special rules are not regarded as needing invoices
- Other taxable-business customers need invoices to claim input tax credits
- Once registered, you become a taxable business with an obligation to file and pay consumption tax
- If you do not register, you cannot issue invoices, but you do not have to become a taxable business
Applied to clinic transactions (general explanation only, not an individual determination):
| Customer | Typical transactions | Whether invoices are needed |
|---|---|---|
| Patients (consumers) | Insured care, cosmetic/self-pay menus, OTC sales | Consumers do not need invoices |
| Companies (taxable businesses) | Employee health checkups, corporate contracts | The customer may request invoices to claim input tax credits |
| Municipalities / insurers | Commissioned checkup programs | Depends on the counterparty and contract form (see JMA below) |
The JMA's framing: do you have business-facing taxable sales?
The JMA's "Responding to the Consumption Tax Invoice System" (Nichii Online, published October 5, 2023) sets out the following:
- If you have taxable sales, such as checkups, to taxable-business customers, you may need to respond to the invoice system
- A clinic that is a taxable business issues invoices when requested
- A clinic that is tax-exempt decides whether to respond when a counterparty requests registration or a price review
For a tax-exempt business with taxable sales of 10 million yen or less that is asked for invoices by a taxable business, the document lists three options:
- Become a taxable business, register and issue invoices (decide per clinic after estimating the burden)
- Stay exempt, issue no invoices, and negotiate a price reduction
- Stay exempt, issue no invoices and refuse a discount (which may mean losing business, e.g. when you contract with companies for employee checkups)
The document also notes that asking members to register is not itself a problem, but unilaterally cutting prices for those who do not comply should be handled with care to avoid conflict with the Antimonopoly Act and related rules.
Check whether you are currently exempt: base-period taxable sales
Before deciding on registration, check whether your clinic is currently a taxable or tax-exempt business. Under NTA No. 6501, a business whose taxable sales in the base period (for individuals, two years prior; for corporations with a one-year fiscal year, the fiscal year before last) are 10 million yen or less is generally exempt from the consumption tax obligation.
Exemption does not apply in cases such as:
- You are registered as a qualified invoice issuer
- Taxable sales in the specified period (for individuals, January 1 to June 30 of the previous year, etc.) exceed 10 million yen (a salary-payment test may also be used)
- You have filed a notice electing taxable-business status
- A newly established corporation with capital of 10 million yen or more at the start of the period, among others
Because insured care is tax-exempt, taxable sales at a clinic mostly come from self-pay care and business customers. Knowing your taxable sales depends on whether you can total insured and self-pay revenue separately in your books.
Effects of registering: filing obligations and the two-year restriction
According to the NTA leaflet:
- You can issue invoices, but you become a taxable business with an obligation to file and pay consumption tax
- A tax-exempt business that registers cannot return to exempt status until the end of the tax period that contains the date two years after the registration date
In practice, this means you cannot register and then drop out quickly if the burden proves too heavy.
Transitional rules changed on October 1, 2026
According to the NTA's FY2026 tax reform feature page, the transitional rules changed from October 1, 2026.
Purchases from tax-exempt businesses (70/50/30% deduction)
The share of input tax that can be deducted for taxable purchases from non-issuers is:
| Period | Deductible share |
|---|---|
| From Oct 1, 2026 for two years | 70% |
| From Oct 1, 2028 for two years | 50% |
| From Oct 1, 2030 for one year | 30% |
| From Oct 1, 2031 | 0% |
Before the reform, the plan was 50% for three years from October 2026 and then 0%; the period was extended and the percentages revised. The measure does not apply to the portion of annual purchases (tax included) from the same exempt business that exceeds 100 million yen (previously 1 billion yen).
Because insured care is tax-exempt, the amount of input tax a clinic can deduct may be limited. Whether this measure matters in practice depends on your taxable sales ratio and filing method, so please confirm with your tax accountant.
The 20% and 30% special rules
The relief measures for businesses that moved from exempt to taxable by registering have also changed.
| Rule | Content | Period / eligibility |
|---|---|---|
| 20% special rule | Tax payable can be set at 20% of output tax | Until the tax period including September 30, 2026 (for individuals, the 2026 return) |
| 30% special rule | Tax payable can be set at 30% of output tax | Individuals only; 2027 and 2028 returns; base-period taxable sales of 10 million yen or less, among other requirements. Corporations are excluded |
In other words, a corporate clinic (such as a medical corporation) that newly registers now cannot use either the 20% or 30% rule. Even for sole-proprietor clinics, the 30% rule is limited to the 2027 and 2028 returns. Any cost-benefit estimate for registration should assume these rules are unavailable. In addition, businesses with base-period taxable sales of 50 million yen or less, among other conditions, may choose the simplified taxation system (prior notification required).
Practicalities if you issue invoices
According to the NTA leaflet, there is no prescribed format. You can add the missing items to the invoices and receipts you already use. The required items are:
- The issuer's name and registration number
- The transaction date
- Transaction details (and a note if reduced-rate items are included)
- The total consideration per tax rate (tax-excluded or tax-included) and the applicable rate
- The consumption tax amount per tax rate
- The recipient's name
Points for clinics to check:
- Whether to separate formats for business invoices (e.g., checkups) and patient receipts
- Whether you can show exempt insured items and taxable self-pay items separately when they appear on the same bill
- Whether the registration number can be reflected in invoice templates (EMR and accounting software output settings)
- How you will keep copies of invoices (paper or electronic)
Decision checklist
- Do you have business customers (checkup contracts, corporate agreements)?
- For patient-only transactions, has any counterparty asked you to register?
- Are you currently exempt or taxable (base-period taxable sales, registration status)?
- Can you total taxable self-pay items separately from insured care?
- Have you estimated the tax payable if you register (assume no 20%/30% rule for corporations)?
- Have you accepted that you cannot return to exempt status for two years after registering?
- If registering, have you checked invoice/receipt formats and EMR or accounting software settings?
FAQ
Q. If we only provide self-pay care to patients, is registration unnecessary? A. The NTA leaflet says customers who are consumers are not regarded as needing invoices, and registration is optional. Still, check your annual taxable self-pay sales and whether any counterparties are businesses.
Q. Does not registering disadvantage patients? A. Invoices matter to business customers who claim input tax credits. For individual patients, a receipt does not normally need to be an invoice. For individual cases, ask the tax office or a tax accountant.
Q. A corporate client asked us to register. Should we? A. It is the clinic's decision. Compare the JMA's three options (register, offer a discount, decline) after estimating transaction value and the tax burden after registration.
Summary
- Insured care is tax-exempt; cosmetic surgery, differential bed charges and OTC drugs are not
- Registration is optional; consumer-only sales are not regarded as needing invoices
- With business-facing taxable sales such as corporate checkups, weigh the counterparty's request against the post-registration burden
- Registration brings a filing obligation, and an exempt business that registers stays taxable for two years
- From October 1, 2026, the deduction for purchases from exempt businesses is 70%; the 20% rule has ended and the 30% rule is only for individuals' 2027–2028 returns
When billing and invoicing operations are a headache
Invoice readiness is not only about invoice formats; it depends on whether your EMR and accounting can record insured and self-pay revenue separately. See also Self-Pay Menu Pricing, the Clinic Cashless Payment Guide, Accounting for Prepaid Courses and Choosing an EMR for Self-Pay Clinics. Pottech supports clinics with EMR and accounting operations. Feel free to contact us.
References
- NTA, "No. 6201 Non-taxable transactions" https://www.nta.go.jp/taxes/shiraberu/taxanswer/shohi/6201.htm
- NTA, "No. 6501 Exemption from tax liability for small businesses" https://www.nta.go.jp/taxes/shiraberu/taxanswer/shohi/6501.htm
- NTA Q&A, "Insured care paid out of pocket" https://www.nta.go.jp/law/shitsugi/shohi/07/01.htm
- NTA, FY2026 tax reform feature (invoice system) https://www.nta.go.jp/taxes/shiraberu/zeimokubetsu/shohi/keigenzeiritsu/invoice-review/index.htm
- NTA leaflet, "For tax-exempt businesses: the invoice system" (revised April 2026) https://www.nta.go.jp/taxes/shiraberu/zeimokubetsu/shohi/keigenzeiritsu/pdf/0022001-174.pdf
- Japan Medical Association, "Responding to the Consumption Tax Invoice System" (Nichii Online, October 5, 2023) https://www.med.or.jp/nichiionline/article/011313.html