How the Tax Office Selects Audit Targets in Japan

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

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

Fiscal Year of the Tax Office in Japan

The fiscal year for the tax office starts in July.

Audit Target Selection Occurs Twice a Year

First Half Selections

The tax office selects audit targets at the start of July. The fiscal year-end for these targets is from February to May.

Second Half Selections

The tax office selects audit targets at the start of April. The fiscal year-end for these targets is from June to the following January. Despite the second half of the year starting in January, the selection starts in April. This is because all tax office staff are occupied with individual income tax returns from January to March.

Audits for the First Half Selections Are Likely to Be Conducted Meticulously

Just as driven and competent salespeople in the private sector strive for good results at the start of a new fiscal year, tax officials are highly motivated during the first half selections. This intense commitment to achieving the objective of collecting additional taxes can often lead to rigorous audits.

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