Japanese Compliance

lim is built for Japanese regulatory compliance from the ground up. This page covers how lim handles the key compliance requirements that affect every company operating in Japan.

Electronic Bookkeeping Act (電子帳簿保存法)

The Electronic Bookkeeping Act (電帳法, den-cho-ho) governs how companies store accounting records electronically. Since January 2024, all companies receiving electronic transaction data (invoices, receipts, bank statements) must store them in a compliant electronic format.

Requirements

The law has three categories:

Category	What it covers	lim’s approach
Electronic books (電子帳簿)	Accounting books created electronically	All journal entries are stored with full audit trail, timestamps, and immutable history
Scanner storage (スキャナ保存)	Paper documents scanned to digital	Receipt/invoice uploads via `lim add --file` with timestamp and resolution metadata
Electronic transactions (電子取引)	Digitally received invoices, receipts	Original files stored with tamper-evident hashing

How lim Complies

Search requirements — The law requires that electronic records be searchable by date, amount, and counterparty. lim’s journal entries are natively searchable by all three:

# Search by date range
lim journals list --from 2026-01-01 --to 2026-03-31

# Search by counterparty (via memo/label)
lim journals list --search "AWS"

# All searches work via API too
GET /v1/companies/:id/journal-entries?from=2026-01-01&to=2026-03-31

Tamper prevention — Every journal entry is audit-logged in the event table. Changes create new events rather than overwriting existing records. The full history is always recoverable. Timestamp requirements — All records include server-side UTC timestamps (created_at, updated_at) that cannot be modified by users. Document storage — Files attached via lim add --file are stored with:

Original filename and MIME type
SHA-256 hash for integrity verification
Upload timestamp
Resolution metadata for images (to prove they meet minimum DPI requirements)

lim’s audit log (event table) satisfies the Electronic Bookkeeping Act’s requirement for “proper record-keeping” (正当な記録) because every change is traceable to a specific user, timestamp, and source event.

Qualified Invoice System (インボイス制度)

The Qualified Invoice System (適格請求書等保存方式) took effect in October 2023. It requires businesses to issue and receive tax-qualified invoices to claim input VAT (仮払消費税) deductions.

Key Concepts

Qualified Invoice Issuer (適格請求書発行事業者) — A business registered with the tax authority. Has a registration number starting with T.
Qualified Invoice (適格請求書) — An invoice that includes the issuer’s registration number, tax rate breakdown, and tax amount.
Input VAT deduction — Only purchases supported by qualified invoices can deduct input VAT.

How lim Handles It

Invoice registration tracking — When creating invoices or recording purchases, lim tracks:

Whether the counterparty is a qualified invoice issuer
The qualified invoice registration number (T + 13-digit corporate number)
Tax rate breakdown (10% standard / 8% reduced)

Transitional measures — From October 2023 through September 2029, purchases from non-qualified issuers can still partially deduct input VAT:

Period	Deductible portion
Oct 2023 - Sep 2026	80%
Oct 2026 - Sep 2029	50%
Oct 2029 onward	0%

lim automatically applies the correct transitional rate based on the transaction date and the counterparty’s qualification status.

# View consumption tax with transitional adjustments
lim reports tax --from 2026-04-01 --to 2027-03-31

Tax code management — lim’s tax code system distinguishes between:

Qualified invoice purchases (full VAT deduction)
Non-qualified purchases (transitional rate)
Tax-exempt transactions
Export transactions (zero-rated)

Consumption Tax (消費税)

Japan’s consumption tax is a value-added tax applied at two rates:

Rate	Applies to
10% (standard)	Most goods and services
8% (reduced)	Food, beverages (excluding alcohol and dining out), newspaper subscriptions

Tax Calculation Methods

lim supports both calculation methods: Standard method (原則課税) — Actual input VAT is deducted from output VAT:

Tax payable = Output VAT (売上消費税) - Input VAT (仕入消費税)

Simplified method (簡易課税) — Available to businesses with taxable sales under 50 million yen. Input VAT is estimated using deemed purchase ratios by industry:

Industry	Deemed purchase ratio
1. Wholesale	90%
2. Retail	80%
3. Manufacturing	70%
4. Other	60%
5. Services	50%
6. Real estate	40%

# Standard method
lim reports tax --from 2026-04-01 --to 2027-03-31 --method standard

# Simplified method (service industry)
lim reports tax --from 2026-04-01 --to 2027-03-31 --method simplified --industry 5

Input VAT Allocation (課税売上割合)

When a company has both taxable and non-taxable sales, input VAT must be allocated. lim supports three allocation methods:

Method	When to use
Individual (個別対応方式)	Each purchase is classified as related to taxable sales, non-taxable sales, or common
Proportional (一括比例配分方式)	All input VAT is multiplied by the taxable sales ratio
Lump sum (全額控除)	When taxable sales ratio is 95% or more and taxable sales are 500M yen or less — deduct all input VAT

lim reports tax --from 2026-04-01 --to 2027-03-31 --allocation individual

e-Tax Integration

lim can generate e-Tax compatible XML files for electronic filing of consumption tax returns.

# Generate e-Tax XML
lim reports tax --from 2026-04-01 --to 2027-03-31 --xml \
  --corporate-number 1234567890123 \
  --company-name "My Startup Inc."

The generated XML follows the National Tax Agency’s (国税庁) XML schema and can be submitted directly through the e-Tax system or via tax agent software.

What’s Included in the XML

Consumption tax return (消費税申告書)
Tax rate breakdown (standard 10% / reduced 8%)
Input/output VAT summary
Filing metadata (company info, filing date, tax office)

Account Details Export

For accountant review and tax filing preparation, lim can export detailed account-level data:

# JSON format
lim reports account-details --from 2026-04-01 --to 2027-03-31

# CSV format (for Excel/accountant tools)
lim reports account-details --from 2026-04-01 --to 2027-03-31 --format csv

e-Tax XML generation is provided as a convenience tool. Always have a qualified tax accountant (税理士) review the output before filing. lim is not a substitute for professional tax advice.

Withholding Tax (源泉徴収)

Certain payments in Japan require withholding tax at source:

Payment type	Withholding rate
Professional fees (tax accountant, lawyer, etc.)	10.21% (up to 1M yen), 20.42% (over 1M yen)
Writer/designer fees	10.21%
Dividends	20.42%
Employee salary	Progressive rate per tax table

lim automatically calculates withholding tax when applicable:

lim add "Tax accountant fee 100000 yen bank transfer"

✅ Professional fees     100,000 / Checking account      89,790
   Withholding tax payable                               10,210

Period Close (決算)

lim supports both monthly close (月次決算) and annual close (年次決算):

# Close a fiscal period
lim periods close --period 2026-03

# View period status
lim periods list

When a period is closed:

No new entries can be posted to dates within that period
A snapshot of all account balances is recorded
The period status changes to closed

Closing can be reversed by an admin if corrections are needed.

Getting Started

Guides

Concepts

Japanese Compliance

Japanese Compliance

Electronic Bookkeeping Act (電子帳簿保存法)

Requirements

How lim Complies

Qualified Invoice System (インボイス制度)

Key Concepts

How lim Handles It

Consumption Tax (消費税)

Tax Calculation Methods

Input VAT Allocation (課税売上割合)

e-Tax Integration

What’s Included in the XML

Account Details Export

Withholding Tax (源泉徴収)

Period Close (決算)

​Japanese Compliance

​Electronic Bookkeeping Act (電子帳簿保存法)

​Requirements

​How lim Complies

​Qualified Invoice System (インボイス制度)

​Key Concepts

​How lim Handles It

​Consumption Tax (消費税)

​Tax Calculation Methods

​Input VAT Allocation (課税売上割合)

​e-Tax Integration

​What’s Included in the XML

​Account Details Export

​Withholding Tax (源泉徴収)

​Period Close (決算)

Japanese Compliance

Electronic Bookkeeping Act (電子帳簿保存法)

Requirements

How lim Complies

Qualified Invoice System (インボイス制度)

Key Concepts

How lim Handles It

Consumption Tax (消費税)

Tax Calculation Methods

Input VAT Allocation (課税売上割合)

e-Tax Integration

What’s Included in the XML

Account Details Export

Withholding Tax (源泉徴収)

Period Close (決算)