The bookkeeping habits that make year-end corporate tax filing easiest are simple: record transactions every week, reconcile bank and card accounts every month, store electronic invoices and receipts in a searchable system, check that suppliers are registered for qualified invoices, and review the numbers at mid-year. Japanese corporations must file their final tax return within two months of the end of the fiscal year, so books that are already clean on the last day of the year leave time for planning instead of catching up.
The deadline is shorter than it looks
Corporate tax and consumption tax returns are due within two months after the fiscal year ends, and the tax is due on the same day. A one-month extension is available only in certain cases. Filing late is expensive: the penalty is generally 15% to 20% of the tax due, reduced to 5% if the return is filed voluntarily before any notice of an audit. Late payment interest in 2026 is 2.4% a year for the first two months and 8.7% after that.
1. Record transactions every week
A weekly session of 30 minutes keeps the details fresh. It is much easier to remember what a payment was for a few days later than ten months later. Attach the receipt or invoice to each entry as you go.
2. Reconcile every account every month
Match your books to every bank account, credit card and payment service at month end. Differences found in the same month are usually quick to explain. Differences found at year-end can take days to trace.
3. Store electronic records the way the law requires
Since January 2024, Japan’s Electronic Bookkeeping Act has required every corporation and sole proprietor to keep invoices, receipts and contracts received electronically in electronic form. Printing them and deleting the files is no longer allowed. The records must be searchable by transaction date, amount and counterparty, and protected against alteration. Getting this wrong can lead to additional assessments and can put your blue return approval at risk.
4. Check invoice registration numbers when you pay suppliers
Since the qualified invoice system began on October 1, 2023, you can claim a full consumption tax credit only on purchases backed by an invoice from a registered supplier. Purchases from unregistered suppliers receive a partial credit under a transitional measure. Under the FY2026 tax reform, that credit is 70% from October 1, 2026, and it is scheduled to fall to 50% from October 2028 and 30% from October 2030. Checking registration numbers as invoices arrive, not at year-end, shows you which suppliers cost you credit.
5. Review the numbers at mid-year
A company with a fiscal year longer than six months must make an interim tax payment within two months after the sixth month ends. The payment is generally half of the previous year’s tax. If profits are down, filing an interim return based on the actual six-month results can reduce it. A mid-year review of the books is the only way to know which option is better, and it also gives you time for year-end tax planning.
6. Keep records for the full retention period
Corporations must keep books and supporting documents for seven years from the day after the filing deadline. For a year that produced a loss carried forward under the blue return system, the period is ten years. Blue return filers can carry tax losses forward for up to ten years, but only if the records behind them are kept.
A short year-end checklist
- Count inventory and record it on the last day of the fiscal year.
- List unpaid invoices on both sides: receivables and payables.
- Record accrued expenses, prepaid expenses and depreciation.
- Confirm year-end balances for every bank and loan account.
- Review payroll, withholding and social insurance totals.
- Separate purchases from registered and unregistered suppliers for consumption tax.
If you would like support keeping your books in order through the year, see our corporate accounting services or contact our team.