Hello, everyone.
This is Enta.
The invoice system is a hot topic in the construction industry right now, isn't it?
What is the invoice system?
I think there are a lot of people who feel that way.
If you work for a corporation that’s subject to consumption tax and are a salaried employee, this doesn’t really apply to you, but,
Self-employed contractors (with annual sales of 10 million yen or less)Please be sure to understand this fully.
You should also be wary of companies that treat their employees as internal or external contractors, even though they are actually employed by the company.
To put it simply and succinctly,General contractors will no longer actively hire sole proprietors.(Under the current system)
This is because the general contractor must obtain a certificate from the subcontractor stating that the subcontractor has properly paid the consumption tax.
Please think of an invoice as a certificate. (Qualified Simplified Invoice)
Since only registered taxable businesses can issue such certificates, sole proprietors who are not registered taxable businesses cannot issue invoices to general contractors.
Prime contractors who do not receive invoices from subcontractors will have to cover the consumption tax themselves, so they will stop using sole proprietors.
However, if, conversely, the sole proprietor were to deduct that amount from their payment, the general contractor would likely agree to it, but the sole proprietor’s wages would certainly be reduced.
I've found a YouTube video I highly recommend, so I'll post the link here.
Since this person is a general contractor, we are taking special care to define the problem clearly.
It's explained very clearly.
Also, I throw in some manga references here and there lol
If you're not familiar with manga, just skip that part lol
When considering how sole proprietors and so-called "fake" sole proprietors manage to survive,
① Become an employee of the company (prime contractor) that is awarding the contract.
② Reach Level 3 or higher in the Career Advancement System to become a taxable business.
③ Quit the construction industry.
These are the only three options.
① That’s a realistic possibility. Or rather, I suppose the government is pushing for this as well.
The basic principle is to collect taxes from wherever possible. It’s easier to collect them from corporations.
However, whether that company will hire me is another matter.
Of course, it depends on your past relationship with the company. Just because you used to work there doesn't mean they'll hire you.
② It’s actually pretty challenging. Even if you say, “It’s easy!” you’ll still end up having to get a bunch of certifications.
Do you have time for that? Where's the money coming from?
③ It doesn't matter if you quit the construction business to open a cake shop or a flower shop—it's the same thing.
Please be assured that all fake sole proprietors will be eliminated.
I also get the impression that general contractors require quite a bit of paperwork when placing orders with sole proprietors.
It hasn't started yet, but there will definitely be more paperwork.
There's an absurd amount of paperwork involved with the current foreign technical interns, and there are also periodic inspections by the employers.
When you think about how much paperwork the government will require when hiring a sole proprietor, it becomes such a hassle that there’s a very high chance the general contractor won’t use one at all.
What's more, the employee roster I wrote about earlier—which is full of lies—will likely be eliminated as well.
Since this system brings out both the good and the bad, I don't know how things will turn out.
Since we don’t use subcontractors at all, we aren’t too concerned about this, but for companies that rely 100% on subcontractors, it could be a real challenge, so I think it’s best to be prepared just in case.
This is a system that employees of the general contractor (site representatives), in particular, absolutely must be familiar with.
See you later.
