Newsletter #016 Starting and Running a Business in Japan – Part 12 What Records Should You Keep for Your Business Expenses?

Helping foreign business owners understand Japan's tax system—one topic at a time.

When you run a business in Japan, keeping receipts is important. But receipts are not the only records you need to keep.

Good records help you calculate your business income correctly and explain your expenses if the tax office asks questions.

Let's look at what you should keep.

1. Keep Documents That Explain Your Expenses

For business expenses, keep documents such as:

• Receipts and invoices — showing what you bought and how much you paid

• Contracts and estimates — explaining the terms and purpose of a purchase

• Delivery notes — showing what goods or services you received

• Bank and credit card statements — showing how and when you paid

• Payment records — such as online payment confirmations

For example, if you buy a computer for your business, keep the invoice or receipt. If you use it partly for personal purposes, also keep a record of how you calculated the business-use percentage.

2. Keep Your Accounting Records, Too

You must also keep the books used to record your business transactions.

These may include:

• A journal

• A general ledger

• An expense ledger

• A cashbook

• A fixed asset ledger

Your accounting software can help you maintain these records, but you still need to keep the supporting documents for the transactions.

3. How Long Must You Keep the Documents?

For individual business owners, the general rules are:

Record	General retention period
Important business books, such as the journal and general ledger	7 years
Receipts, invoices, estimates, and delivery notes	Generally 5 years
Certain cash and bank transaction documents	Generally 7 years, with exceptions

The exact period depends on the type of document and your circumstances. If you are unsure, keeping the documents for 7 years is a practical approach.

4. What About Documents Received by Email or Online?

Many businesses receive invoices and receipts electronically.

For example:

• An invoice attached to an email

• A receipt downloaded from an online store

• A PDF invoice received through a business platform

In these cases, you generally need to preserve the electronic transaction record in its original electronic form. Simply printing it and deleting the electronic file may not satisfy the electronic recordkeeping rules.

Create a clear folder system on your computer or in a suitable cloud service. Organize files by year and month, and use filenames that help you identify the date, supplier, and amount.

5. A Simple Filing Habit

A practical routine is:

1. Collect receipts and invoices throughout the month.

2. Record each transaction in your accounting software.

3. Match the transaction with its supporting document.

4. Save electronic documents in an organized folder.

5. Keep the records for the required period.

You do not need a complicated system. The important thing is to keep records organized, complete, and easy to find.

Key Takeaway

Keeping business records is not just about saving receipts.

You need to keep the documents that support your expenses, maintain your accounting books, and preserve electronic records properly.

A good recordkeeping system makes tax filing easier and helps you explain your business expenses with confidence.

Coming Next

Starting and Running a Business in Japan – Part 13: How Should You Record Your Sales?

Prepared by　Kyoji Yasui Tax Accountant Office

Helping foreign business owners understand Japan's tax system with clear, practical guidance.