Japan

Japan has a unique rule on how B2C and B2B transactions are identified and differentiated. To elaborate, while the VAT/JCT rules in Japan apply to B2C supplies, and not to B2B supplies, Japan does not follow the general approach of distinguishing B2B vs B2C customers (i.e. the differentiation is not dependent on having the customer VAT/JCT number on file, instead, it depends on the nature of the services provided and / or the manner in which the contract for services are negotiated and executed). As such, Anrok is designed in line with Japan's rules so that the B2B PTC is non-taxable, whereas the B2C PTC is taxable.

In the context of digital services, for the customer to be treated as a business for VAT/JCT purposes, the seller would need to reach out to each of its customers, confirm that the customer is a business and enter into an individually negotiated contract. Software services that can be purchased just by clicking through the website (i.e. self-serve checkout with standardized terms and conditions, should be treated as B2C taxable services, even if the local customer is technically a business that is a JCT payer).

Even if you have a JCT ID, the transaction will only be treated as non-taxable if you use the B2B PTC or apply an exemption certificate in Anrok to make this non-taxable (if using a B2C PTC). If you use a B2C PTC, the transaction will be taxable, regardless of whether a JCT ID is provided.

Chile

In Chile, both individual and business tax numbers follow the same format. The distinction is that an individual is issued a RUN (Rol Único Nacional), while a business is issued a RUT (Rol Único Tributario). If we only validated the number format, B2C transactions could be incorrectly classified as non-taxed.

Technically, Chile requires a statement or proof from the buyer for reverse charge purposes (e.g., a document that can be uploaded as an exemption certificate). However, for practical purposes, we allow numbers starting with RUT and have the correct format to be treated as B2B.

Philippines

For the Philippines, the government requires both the customer’s VAT ID and evidence (like a letter from the business, etc) confirming the business is actually B2B. So for B2B reverse charge to apply in Anrok, you’ll need to upload an exemption certificate or mark the transaction as exempt in your billing system.

Morocco

In Morocco, both individual and business tax numbers follow the same format. As such, if we use VAT ID validation, B2C transactions could be incorrectly classified as non-taxed.

As such, in Morocco, you’d need to apply an exemption certificate in Anrok to the customer or mark the transaction as exempt in your billing system.

Peru

In Peru, a valid VAT ID (called an RUC number) is an eleven digit long number where the first two digits indicate the type of customer (i.e., “10” or “15” for specific types of registered individuals, and “20” for businesses and organizations).

For business-to-business sales, we validate that the RUC number starts with "20" and has exactly 11 digits (for example, 20123456789). This matters because if the RUC is invalid or starts with "10" or "15", the sale will be treated as business-to-consumer and appropriately taxed. Similarly, if no RUC is provided, the sale will be treated as business-to-consumer and taxed.

Force of Attraction - Switzerland, Serbia, and South Africa

These countries have a unique rule incorporated within their digital services VAT rules known as the "force of attraction principle". The basic rule is that by virtue of a foreign vendor selling B2C supplies, B2B supplies also become in scope.

Therefore, if sellers makes only B2B supplies and obtains evidence of the B2B status, no VAT registration in these countries should be required; however, as soon as a foreign vendor makes even a $1 worth of B2C supply, then all supplies become taxable in  (triggering the obligation for to register and charge VAT on its services to all recipients (i.e., B2C and B2B) located in Switzerland, Serbia and South Africa.