Drinking culture has become an indispensable part of Japanese public life. In Japan, since stepping into the society, all kinds of drinking occasions have filled people's daily life. Amongst them, the drinking and social culture of Japanese has made many foreigners incomprehensible. However, with the changing times, according to the National Tax Agency, the market share of beer and other sparkling wines, which once dominated the Japanese alcohol market, has dropped from about 70% in 2000 to less than 40%. The number of millennials who are not willing to participate in drinking social occasions is gradually increasing, and alcoholic beverages made from soju and other beverages are more popular than beer.

In this guideline, Kaizen will briefly introduce the liquor wholesale industry in the liquor sales industry in Japan according to Japan's "Liquor Tax Law" and other official materials, summarize the application process and required materials for the liquor wholesale business license, and provide to Kaizen’s existing customers and potential customers for reference. If you want to know the relevant regulations for the retail sale of alcohol in Japan, please refer to the "Guidelines for the Application of Liquor Retail Business License in Japan". In addition, our firm can provide various business license and visa application services in Japan. If necessary, please contact our professional consultants.

1. Definition of Liquor Wholesale Industry
   
   

   (1)

   Alcohol According to Japan's "Liquor Tax Law" ("Liquor Tax Law" in Japanese), alcohol refers to alcoholic beverages with an alcohol content of 1%, and also refers to powdered solids that are dissolved in a solution so that the alcohol content of the solution reaches 1%. Liquor is divided into four categories: sparkling liquor, brewed liquor, distilled liquor and prepared liquor. The specific liquors included in each category are as follows: (a) Sparkling wine: beer, sparkling wine and other sparkling wine; (b) Brewing wine: sake, fruit wine and other brewing wine; (c) Distilled liquor: distilled liquor, whiskey, brandy, puree liquor and spirits; (d) Preparation of alcohol: synthetic sake, sweet cooking wine, flavored fruit wine, liqueur, powdered wine and miscellaneous wine.

   (2)

   Alcohol wholesale Liquor wholesale business ("liquor wholesale business" in Japanese) is a type of liquor sales business, which refers to purchasing a certain amount of liquor from liquor manufacturers or other liquor wholesalers, and then wholesales liquor to other wholesalers or local wine shops, but does not include the business of wholesale to general consumers or restaurants (this business is the retail business of alcohol). Alcohol wholesalers refer to broker engaged in the above-mentioned businesses.

   
   
2. Liquor wholesale business license
   
   According to Japan's "Liquor Tax Law", operators engaged in the Japanese liquor wholesale business must apply for a liquor wholesale business license ("Liquor Wholesale Business License" in Japanese) from the tax office under the jurisdiction of the wholesale venue for the relevant business before operating the business. And each wholesale venue should apply separately (if there are 2 or more wholesale venues), any liquor wholesaler who does not have or lacks a business license will be sentenced to a maximum of 1 year in prison or a fine of less than 500,000 yen. The liquor wholesale business license is subdivided into the following 8 categories according to the wholesale objects and wholesale methods:
   

   (a)	Wholesale liquor business license ("All Kinds of Liquor Wholesale Business License " in Japanese): In principle, all types of liquor can be wholesaled. The application is subject to open selection, and there is a limit on the number of issuances per year;
   (b)	Beer wholesale business license (“Beer Wholesale Business License" in Japanese): only for the wholesale of beer, the application is subject to open selection, and there is a limit on the number of issuances per year;
   (c)	Foreign wine wholesale business license ("Foreign Wine Wholesale Business License" in Japanese): limited to the wholesale of foreign wine and red wine, etc. According to Japan's trademark law, foreign wine includes fruit wine, flavored fruit wine, whisky, brandy, sparkling wine, and other brewing wine, spirits, liqueurs, powdered wines and miscellaneous wines;
   (d)	Import and export liquor wholesale business license ("export and import liquor wholesale business license" in Japanese): only applicable to the business of importing or exporting liquor by oneself, not wholesale liquor imported or exported by others;
   (e)	Cooperative Member Liquor Wholesale Business License for Stores Selling Alcohol ("Cooperative Member Liquor Wholesale Business License" in Japanese): applicable to the business of liquor sellers who deliver alcohol directly to their members in their own stores;
   (f)	Liquor wholesale business license between members of a cooperative: Only for other liquor sellers who wholesale liquor to cooperatives of which they are members, and only in accordance with the Small and Medium Business Cooperatives Act ("Small and Medium-Enterprises, Cooperative Association Law") established cooperatives;
   (g)	Liquor wholesale business license of own trademark ("Exemption of self-brand liquor wholesale business license" in Japanese): only the wholesale of liquor of the trademark or brand established by oneself;
   (h)	Special Liquor Wholesale Business License ("Special Liquor Wholesale Business License" in Japanese): Applicable to (i) liquor manufacturers establishing a head office, branch or representation office for wholesale of self-made liquor; (ii) 2 or more original business counterparties of self-made wine wholesale to the original counterparty after cooperation with one or more wine manufacturers; or (iii) two or more wine manufacturers jointly set up a wholesale organization, and the members of the organization wholesale self-made wine.

   
   
3. Application requirements for liquor wholesale business license
   
   According to Article 10 of the Liquor Tax Law, in order to obtain a liquor wholesale business license, the applicant for liquor wholesale business license, the applicant's legal representative, the directors, supervisors, council members, accountants and legal person liquidators of the applicant, etc. The responsible person shall not be the following persons (including but not limited to):
   

   (a)	Those who have previously held a liquor manufacturing business license, liquor sales business license, or the relevant business license involved in the Alcohol Business Law is cancelled for less than 3 years from the date of violation of the regulations;
   (b)	Those who have been fined or notified for violation of laws and regulations related to national tax or local tax for less than 3 years;
   (c)	Persons who have been sentenced for underage drinking, illegal business operations, violent organization activities, etc. have been sentenced for less than 3 years;
   (d)	Those who have been sentenced for violating the criminal law or for violent acts have been sentenced for less than 3 years;
   (e)	Persons who have been sentenced to imprisonment for violation of the law for less than 3 years;
   (f)	Those who are identified as those who do not have sufficient experience and skills in the alcohol sales industry;
   (g)	Those who use inappropriate or places not up to standard as the wholesale places of the application;
   (h)	Those who have not resumed their rights after filing for bankruptcy;
   (i)	Persons who are identified as having a weak operating capital base (for example, those who have been subject to the suspension of bank transactions within one year before the application date, or the operating loss of the operating company in the most recent year exceeds 20% of the capital, etc.);
   (j)	Persons who have been subject to late payment of national or local tax within 2 years before the date of application;
   (k)	If the applicant is a minor, his legal guardian shall be the above-mentioned person.

   
   
4. Application materials for liquor wholesale business license
   
   When applying for a liquor wholesale business license, the applicant must fill in the application form and submit other relevant certification materials, as follows (including but not limited to):
   

   (a)	An application for a liquor wholesale business license (including the applicant's name or company name, address or company registered office address, contact number, wholesale location address, business type, reasons for application, etc.);
   (b)	Land drawings of the wholesale site (if the wholesale site is only a part of the building, the overall drawings of the building should still be submitted, and the location of the wholesale site should be marked separately);
   (c)	The configuration diagram of the wholesale place (the warehouse part and the wine display place must be indicated);
   (d)	If the applicant is an individual who is a Japanese resident, please provide a copy of the resident certificate; if the applicant is a legal person, please provide a copy of the certificate of registration of the legal person and the articles of association of the legal person.

   
   After receiving the notice of start of examination, the applicant should submit the following materials to the tax office:-
   

   (a)	Business summary (record the area of shops, warehouses and other facilities, the number of office equipment, the number of employees, etc.);
   (b)	Income and Expenditure Plan (recording the information of purchase objects, wholesale object information, estimated purchase number and purchase amount, estimated wholesale number and wholesale amount, etc.);
   (c)	The required funds and financing method plan (recording the required funds calculation basis, financial status, financing plan, etc.);
   (d)	If the applicant is an individual, provide the applicant's and its legal representative's liquor sales business license to meet the requirements of the letter of good faith; if the applicant is a legal person, provide the letter of integrity of the liquor sales business license of its directors, supervisors, councils, accountants, legal person liquidators, the person in charge of the wholesalers;
   (e)	If the applicant is an individual, please provide the applicant's resume; if the applicant is a legal person, please provide the resumes of its directors, supervisors, councils, accountants, legal person liquidators, etc.;
   (f)	If the shop and warehouse used for the application are leased real estate, submit the lease contract;
   (g)	The local tax payment certificate issued by the prefecture or the city;
   (h)	If the applicant is an individual, please provide the latest income and expenditure calculation; if the applicant is a legal person, please provide the financial statements of the last year (newly established legal person does not need to provide);
   (i)	The certificate of land registration items for the applied store, warehouse, etc.

   
   
5. Application process for liquor wholesale business license
   
   

   (a)

   The whole liquor wholesale business license and beer wholesale business license application process Before applying for a business license, you should go to the tax office under the jurisdiction of the wholesale venue to consult the liquor instructor on the liquor and wholesale venue to be operated to avoid unnecessary losses; The number of permits issued for the current year (September 1 to August 31 of the following year) will be announced on the bulletin boards of local taxation bureaus and the official website of the National Taxation Agency on September 1 each year. Applicants should go to or visit the above address for checking; The applicant should submit the application form and relevant certification materials to the tax office under the jurisdiction of the wholesale establishment from September 1st to September 30th. The application submitted during this period will be the subject of a public lottery. (The application form and related supporting materials can also be submitted from July 1 to August 31, and the application submitted during this period will be regarded as submitted on September 1 of the same year, that is, the application will be divided into the next year); The tax office will conduct a public lottery on October 1, decide the order of application review, and notify the applicant of the lottery results. If the number of applications does not exceed the number of permits issued, the public lottery will not be held; The tax office conducts the review according to the review order, and the applicant submits the relevant materials to the tax office after receiving the notification of the start of the review; During the review period, the tax office may require the applicant to go to the tax office to answer relevant questions, or the tax office staff to go to the wholesale venue for on-site confirmation; The applicant will receive a notification of payment of registration license tax issued by the tax office ("Liquor Sales Agent Business License” in Japanese), and the applicant will go to the tax office or a financial institution designated by the tax office. The institution pays the registration license tax; After the review is over, the tax office will notify the applicant in writing of the review result after confirming that the applicant has paid the registration license tax. Applicants who pass the examination will receive a notice of business license for liquor sales business (“Liquor Sales Agent Business License” in Japanese) issued by the tax office. Applicants who fail the examination or stop the examination after the number of issuances are full will receive Written notice of not granting a license to operate; Applicants who have received the liquor sales business license notice can officially start the business, and the National Tax Agency will publish the information on the operators who have obtained the liquor sales business license at the end of the month following the date of issuance of the business license.

   (b)

   Other liquor wholesale business license application process When applying for business licenses for alcoholic wholesale businesses other than the whole alcoholic wholesale business and beer wholesale business, there is no limit on the number of licenses issued, so there is no need for a public lottery. Not applicable to (2) to (4) above. Applications for other liquor wholesale business licenses and related certification materials can be submitted on any working day. Please refer to the above (1) and (5)~(9) for the application process.

   
   
6. Legal obligations of liquor wholesalers
   
   Liquor wholesalers who have obtained business licenses shall strictly perform the following obligations (including but not limited to) when operating their businesses. Violators will be punished with imprisonment for up to one year or a fine of less than 500,000 yen:
   

   (a)	Accounts should be kept for matters related to the purchase and wholesale of alcohol for 5 years or more (quantity, price, date, transaction object information, etc.)
   (b)	The category, total number and inventory at the end of the year should be declared every year;
   (c)	When the information of operators, wholesale places, etc. is changed, a change of declaration shall be submitted to the tax office as soon as possible;
   (d)	If you intend to repack or modify alcohol, you should declare it to the tax office;
   (e)	Ensure the fairness of transactions, and prohibit the use of unfair means to monopolize the market;
   (f)	Ensure the reuse of wine packaging containers.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.

Reference:

1.   Introduction of Japanese business license

2.   Japanese real estate