The JPY 50 million test for waiving the search requirement uses the "year before the previous business year"Smaller companies can sometimes skip the system for searching documents
For the search function for electronic transaction data, if sales in the base period are JPY 50 million or less, you do not need to secure the search function as long as you can respond to a request to download the data. Q51 of the Q&A (July Reiwa 8 / 2026) explains the base period for this test and the range of "sales."
- Taxable sales for the business year before the previous one (tax-exclusive)
- JPY 45 million
- + Non-taxable sales
- JPY 3 million
- + Non-operating and miscellaneous income
- Not included
- Sales JPY 48 million, so within the JPY 50 million limit
- Search requirement not needed
Key points
- The test is whether sales exceeded JPY 50 million in the year two years before the year of the electronic transaction for sole proprietors, or in the business year before the previous business year for corporations.
- Sales are judged on a tax-exclusive basis (excluding consumption tax and local consumption tax) and do not include non-operating income or miscellaneous income. This differs from "taxable sales" under the Consumption Tax Act, and non-taxable sales are included.
- In the first and second year of a newly started sole proprietor or newly established corporation, which has no base period, the requirement to secure the search function does not apply.
- For a corporation whose base period is not one year, sales are divided by the number of months and multiplied by 12 to judge whether it exceeds JPY 50 million.
What to do in practice
- Check tax-exclusive sales for the business year before the previous one (for individuals, two years before) and judge whether they are JPY 50 million or less.
- If you skip the search requirement because sales are JPY 50 million or less, prepare to respond to a download request during a tax audit (how the data will be provided).
The rule is that documents kept as electronic data must be searchable later. But if your sales from two years ago were JPY 50 million or less, you do not need to build a search system, as long as you can hand over the data to the tax office.
Points
- What is checked is not "this year" but sales from the business year two years ago.
- If it is JPY 50 million or less, you can skip the search system.
- Instead, be ready to hand over the data when asked.
What the words mean
- Sales
- The total money a shop or company earns by selling goods or services
- Download request
- When a tax official asks, "Please give us the data"
- National Tax Agency (NTA): National Tax Agency: Electronic Books Maintenance Act Q&A (electronic transactions) (July Reiwa 8 / 2026), Q51
- National Tax Agency (NTA): National Tax Agency: Why not further advance digitization by using the electronic books storage system? (June Reiwa 8 / 2026)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.