How Are Tax Audits Conducted in Japan? Part 3

【Koshida Accounting Firm Column Date:

Thinking is one thing no one has ever been able to tax.—  Charles F. Kettering




Hi, my name is Taisei Koshida, and I am a certified public accountant as well as a tax accountant.


I aim to assist non-Japanese business owners who struggle with reading or writing in Japanese. If you find the Japanese tax return system challenging, I can help you with your tax filings.



If you are unsure about Japan’s taxe audits, this blog can be helpful for you.




Are tax audits conducted suddenly?

Usually, tax officers contact taxpayers in advance by phone before conducting a tax audit. If you have a retainer agreement with a tax accountant, they will contact the accountant. Although it occasionally happens that officers conduct sudden on-site audits at offices and stores, it is relatively rare.


Is it possible to refuse a tax audit?

It is not possible to refuse a tax audit. However, you can request a delay of the audit for a few months due to business being busy or other reasons.


What is the actual flow of a tax audit like?

An officer comes to the company at 10 a.m. and leaves for his office at 4 p.m. In the first hour, he conducts a hearing with the president to understand the company’s outline. After that, he exame issued invoices, received receipts, and account books or so.


During a tax audit, there is no need for the business owner to continuously interact with the tax officers. It is sufficient to have a tax accountant or another employee of the company present.



The main points of focus are to ensure there are no unrecorded sales, and to verify whether there are any excessive purchases or overstatements of expenses.


This theme is continued in the following.

What is the worst-case scenario in tax audits?



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