Have you ever been quoted a price, agreed on it and then charged a higher amount? It’s not a nice experience and it’s easy to feel you’ve been tricked. The law is clear in Japan, Australia, Britain and probably elsewhere: When you give a price estimate or agree on a price, you should make it very clear whether consumption tax is included or excluded, otherwise, if you don’t make it clear, then the customer has every right to assume the price includes tax. There’s nothing difficult about this, just decide on a policy and stick to it.
In Australia, if you are not registered for tax then you must not charge tax and the customer cannot claim an input tax credit. But in Japan, if you are not registered for tax, you can still charge tax (but you don’t have to pay it to the Tax Office) and the customer can claim an input tax credit. I think this is rather strange but that’s up to the Tax Office.
My preference would be to give quotations inclusive of tax and state that the price includes tax, especially if you are selling mainly to the public. If you sell mainly to businesses, you may prefer to give quotations exclusive of tax and state that the price excludes tax. Either way, choose one method and stick to it, then you won’t forget and you’ll have happy customers rather than customers who feel they’ve been tricked.
