1. Introduction
The Act on Special Provisions concerning Preservation Methods for Books and Documents Related to National Tax Prepared by Means of Computers (the Electronic Preservation Act) was implemented in 1998. Due to its complexities such as prior-approval from the tax authority and installation of related systems, the number of companies adopting the new rule is still limited. In this News, we will mention some revisions of the Electronic Preservation Act in 2021 Tax Reform.
2. Electronic Books Preservation Act (Three kinds)
According to the Electronic Preservation Act, the documents principally required to retain in physical forms are allowed to preserve by data in the following ways.
① Electronic books preservation
The preservation of account books and related documents prepared electronically as electronic data.
② Scanned documents preservation
The scanner preservation of documents which were originally received as paper receipts
③ Electronic transactions
The preservation of the information of electronic transactions as data
3. Major revisions
The following revisions will come into effect on 1 January 2022.
① Electronic ledger preservation
a) Abolition of pre-approval from the tax authority
b) Tax reduction of penalty taxes levied on underreported tax returns
② Scanned documents preservation
a) Abolition of pre-approval from the tax authority
b) Requirement for timestamp (extension of deadline to append), relaxation of the requirement for search functions
c) Treatment of additional penalty taxes levied on falsification
③ Electronic transactions
a) Requirement for timestamp, relaxation of the requirement for search functions
b) Abolishment of requirement of preservation of electromagnetic records by printing
c) Treatment of additional penalty taxes levied upon falsification
In addition, there are some cases where submission of applications is required beforehand (or resubmission of the relevant applications) in order to take relief measures for the above amendments.
4. Conclusion
In this News, we mentioned some revisions of the Preservation Act in 2021 Tax Reform.
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.
(References / Japanese)
National Tax Agency
Revision of Electronic Books Preservation Act in 2021 Tax Reform
(Accessed on September 28, 2021)
The Electronic Books Preservation Act was revised.
(Accessed on September 28, 2021)
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