The Points in Tax Audits in Japan

【Koshida Accounting Firm Column Date:

The search for truth begins with the doubt of all ‘truths’ in which one has previously believed. – Friedrich Nietzsche




Hi, my name is Taisei Koshida, and I am a certified public accountant and 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 There Unrecorded Sales and Revenue?

Tax officers analyze the figures for each year to determine whether there are any unrecorded sales and revenue. If they come across revenue that has been recorded for only one period, they will question why it has not been consistently recorded. Additionally, if there are vending machines in the office or other locations and their revenue is not recorded, the officers will raise concerns about the unrecorded revenue.


Have the Sales Been Recorded in a Timely Manner?

Tax officers carefully examine bank records, books, and sales-related documents for the first month of each period to confirm if there are any sales that should have been recorded in the previous period.


Are the Purchases and Expenses Recorded too Early?

Tax officers carefully examine bank records, books, and documents related to purchases and expenses for the last month of each period to confirm if there are any purchases and expenses that should have been recorded in the subsequent period.


Were Not Non-Business-Related Expenses Included?

Tax officers will check for expenses unrelated to business, such as personal travel costs and restaurant bills. If entertainment expenses are significant, it’s expected to be questioned about their details. Occasionally, tax officers may contact restaurants directly to verify such expenses.


The detail of entertainment expenses is mentioned in the following blog.



If you are intersetd in tax audits in Japan, please refer to the following.

How Are Tax Audits Conducted in Japan?


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