Digital seamless preservation: exclusion from the 10% increase in the heavier penalty taxLinking money records automatically can bring tax advantages

Under the fiscal 2025 (Reiwa 7) tax reform, the Electronic Books Maintenance Act gained a new system for setups that automatically save electronic transaction data such as invoices and link it automatically to the books. If certain requirements are met and a notification is filed, the business is excluded from the 10% increase in the heavier penalty tax (jukazanzei), and for sole proprietors it also becomes a requirement for the JPY 750,000 blue return special deduction.

Key points

• There are three requirements: (1) sending, receiving and saving are done in a system that keeps a history of corrections and deletions (or does not allow them); (2) the amounts in the electronic transaction data cannot be corrected or deleted and then recorded in the electronic books (or the facts can be verified); (3) the electronic transaction data and the electronic books can be cross-checked against each other.
• Eligible systems must meet the standards set by the Commissioner of the National Tax Agency. They are systems that can save, under the requirements above, either digital invoices in the format managed by the Digital Agency (Invoice JP PINT, JP Self-Billing) or settlement data from deposit accounts.
• The exclusion from the 10% increase in the heavier penalty tax applies to national taxes whose statutory filing deadline falls on or after January 1, 2027 (Reiwa 9).
• The JPY 750,000 blue return special deduction applies when the requirements for superior electronic books or digital seamless preservation are met and the return is filed electronically. It covers income tax for 2027 (Reiwa 9) and later.

What to do in practice

• Check whether your sales management and accounting software meets the standards of the Commissioner of the National Tax Agency (for example, JIIMA-certified digital seamless software).
• To receive the preferential treatment, submit the notification form via e-Tax by the statutory filing deadline for the year (business year) in which you want it to apply.