1. Introduction
The preservation of electromagnetic records for transaction data pertaining to electronic transactions was planned to take effect on 1 January 2022. However, in Tax Reform 2022, due to the delay of companies’ response to the new act, transitional measures were introduced to allow the preservation of electronic transaction information in paper documents under certain conditions for two years from 1 January 2022. Under the Electronic Books Preservation Act, companies can preserve the data of accounting books, receipts, invoices, and other related documents by electromagnetic means. The Act consists of electronic books preservation, scanner preservation, and electronic transactions. In this News, we will mention the scanner preservation rules.
2. Overview of scanner preservation rules
Some documents required to preserve under tax laws are allowed to preserve by electronic magnetic means instead of output documents by satisfying certain conditions.
(1) Documents for scanner preservation rules
Both documents received from and sent to business counterparties are subject to the scanner preservation rules. The details are as follows.
① Important documents
Documents directly related to the flow of funds or goods (contracts, invoices, receipts, etc.)
② General documents
Documents not directly related to the flow of funds or goods (quotations, purchase orders, inspection certificates)
(2) Input period of digitization process
According to the National Tax Agency, important documents should be digitized (scanned and timestamped) by the following timeframe.
① Method of the prompt data input
Within approximately seven business days
② Method of the normal business processing cycle
Within approximately seven business days after the normal business processing cycle (within two months)
Although the method of the normal business cycle is beneficial from the point of its long timeframe, the administrative processing rules for making and receiving national tax-related documents should be specified.
With regard to general documents, no specific timeframe of digitation process is required.
(3) Timestamp requirements
Timestamps should be appended within the above input periods. However, in cases where the input of the record of certain matters within the specified input periods can be verified, it can replace the need for a timestamp.
(4) Version requirements
The computer processing system should meet either of the following technical requirements.
・The occurrence of corrections or deletions to the recorded items and contents of these can be confirmed ;or
・The corrections of deletions to the recorded items of electromagnetic records are not allowed.
(5) Search functions
Search functions by date of transaction, transaction amount, client name, or the combination of two or three arbitrary functions should be available.
3. Conclusion
In this News, we mentioned the scanner preservations rules from the Electronic Books Preservation Act. Although further amendments will be expected, companies should take necessary steps to comply with the upcoming requirements such as IT software, business processing and internal documentation rules based on the correct and thorough understanding of the scanner preservation rules.
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
(Reference / in Japanese)
National Tax Agency “About Scanner Preservation Rules”
(Accessed on November 24, 2022)
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