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
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% |
# View consumption tax with transitional adjustments
lim reports tax --from 2026-04-01 --to 2027-03-31
- 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)
| 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
| 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."
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 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
- 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.
