Overview of the Electronic Bookkeeping Act: What Changed with 2022 Amendments and 2024 Full Implementation?

The Electronic Bookkeeping Preservation Act (電帳法) allows tax-related books and documents, previously required to be kept on paper, to be stored electronically. Enacted in 1998, it underwent major amendments in January 2022 and full implementation began in January 2024.

Key Points of the 2022 Amendments

Abolition of Prior Approval System
- Previously required tax office pre-application; now fully abolished
Relaxed Timestamp Requirements
- Now OK to attach within 2 months + approximately 7 business days
Simplified Search Requirements
- Searchable by 3 items: "date, amount, counterparty"
Full Mandate for Electronic Transaction Data Preservation
- Invoices and receipts received via email or cloud cannot be stored on paper
- Electronically received data must be stored electronically

These amendments made compliance unavoidable for SMEs and sole proprietors. Most critical is the "electronic transaction data preservation" rule.

Distinguishing "Scanned Storage" from "Electronic Transaction Data Storage"

The Electronic Bookkeeping Act classifies storage methods into three main types:

1. Electronic Bookkeeping Storage

Directly storing books and financial statements created with accounting software as electronic data. Most common method.

2. Scanned Storage

Scanning paper documents (receipts, invoices, etc.) received in physical form for electronic storage.

Requirements:

Scan within approximately 7 business days after receipt
Resolution 200dpi or higher, color image
Timestamp attachment (or use of system with edit/deletion history)

3. Electronic Transaction Data Storage (Main Focus of This Article)

Storing transaction information electronically exchanged via email, cloud storage, EDI, etc.

Covered items:

PDF invoices/receipts attached to email
Documents downloaded from cloud invoicing systems
Purchase history data from e-commerce sites
Receipts downloaded from websites (Amazon, transportation IC cards, etc.)

Important: Electronic transaction data can no longer be printed and stored on paper. Electronic storage is mandatory.

Filename Requirements: Date, Amount, and Counterparty Must Be Searchable

The Electronic Bookkeeping Act requires stored data to be "searchable." Specifically, the following 3 items must remain searchable:

Three Search Requirements

Transaction Date
Transaction Amount
Counterparty Name

There are two ways to meet this requirement:

Method A: Use a Dedicated System

Import into accounting software or document management systems, adding search items as metadata.

Pros: Automatable, handles large volumes Cons: System implementation costs

Method B: Include Search Items in Filename

Include "date, amount, counterparty" directly in the filename so OS-standard search functions can find them.

Pros: Zero additional cost, immediately practical for SMEs and sole proprietors Cons: Manual work required, becomes cumbersome with high volumes

For most SMEs, Method B—"filename rule operation"—is most realistic.

Recommended Filename Format Examples

Here are filename examples that meet legal requirements while remaining practical.

Basic Format

YYYYMMDD_Amount_CounterpartyName_DocumentType.pdf

Concrete Examples

Transaction	Filename Example
Invoice received from Company A (Jan 15, 2024, ¥10,000)	`20240115_10000_CompanyA_Invoice.pdf`
Payment receipt to Sole Proprietor B (Feb 3, 2024, ¥35,000)	`20240203_35000_BOffice_Receipt.pdf`
Supplies purchased on Amazon (Mar 10, 2024, ¥2,480)	`20240310_2480_Amazon_Receipt.pdf`
Cloud service usage statement (Apr 1, 2024, ¥9,800)	`20240401_9800_XXCloud_Statement.pdf`

Filename Setup Tips

Date as 8-digit number (YYYYMMDD)
- Easy to sort in file systems
- Standardize as 4-digit year + 2-digit month + 2-digit day
Amount as digits only (no commas)
- Use "10000" not "10,000"
- Easier to search and file-system safe
Counterparty name as official or standardized abbreviation
- OK to omit "Inc." or "Corporation"
- Use consistent notation for same counterparty
Specify document type
- Invoice, receipt, quote, contract, delivery note, etc.
- Makes later classification easier
Avoid prohibited filename characters
- Don't use \ / : * ? " < > |
- Full-width characters are OK, but half-width alphanumerics preferred

PDF ToolsMerge, split, extract, and delete PDF pages securely in your browser.

Best Practices for Folder Structure

Organizing folder structure in addition to filenames dramatically improves searchability.

Pattern 1: Fiscal Year → Counterparty

Electronic Transaction Data/
├─ FY2024/
│   ├─ CompanyA/
│   │   ├─ 20240115_10000_CompanyA_Invoice.pdf
│   │   ├─ 20240215_12000_CompanyA_Invoice.pdf
│   ├─ BOffice/
│   ├─ Amazon/
├─ FY2025/

Pros: View history per counterparty collectively Cons: Hard to view all transactions in a single month cross-sectionally

Pattern 2: Fiscal Year → Month

Electronic Transaction Data/
├─ FY2024/
│   ├─ 01_January/
│   │   ├─ 20240115_10000_CompanyA_Invoice.pdf
│   │   ├─ 20240120_8000_BOffice_Receipt.pdf
│   ├─ 02_February/
│   ├─ 03_March/
├─ FY2025/

Pros: Can check all files for the relevant month during monthly closing Cons: Hard to track specific counterparty history

Pattern 3: Fiscal Year → Document Type

Electronic Transaction Data/
├─ FY2024/
│   ├─ Invoices/
│   ├─ Receipts/
│   ├─ Contracts/
├─ FY2025/

Pros: Easy to organize by document type Cons: Transaction flow becomes less visible

Recommendation: "Fiscal Year → Month" for low transaction volumes; "Fiscal Year → Counterparty" once counterparties stabilize.

Timestamp and Edit/Deletion History Requirements

Electronic transaction data storage requires measures to ensure "data authenticity."

Four Methods to Ensure Authenticity (Choose One)

Attach Timestamps
- Use external timestamp certification authority services
- Attach within approximately 7 business days of data receipt
Use Systems with Edit/Deletion History
- Cloud storage (Google Drive, Dropbox, etc.) history features
- Document management features in accounting software
Establish and Operate Internal Procedures to Prevent Edit/Deletion
- Create based on samples published by the National Tax Agency
- Document as internal rules and comply
Use Systems That Prevent Unjustified Edit/Deletion
- Dedicated EDI systems, etc.

For SMEs and sole proprietors, Method 3—"internal procedures"—is most realistic. Procedure templates are available for free download from the National Tax Agency website.

National Tax Agency Internal Procedure Samples

The National Tax Agency publishes samples for different business scales:

Individual business owners
SMEs (with accounting departments)
SMEs (with single accounting staff)

Download the sample matching your situation, fill in company name and responsible person, and operate it to meet requirements.

Improving Work Efficiency with PDF Tools

Since electronic transaction data is often saved in PDF format, using PDF editing tools is key to operational efficiency.

What PDF Tools Can Do

Merge Multiple Pages
- Combine monthly invoices and details into one file
Split Pages
- Separate files when multiple invoices are in one PDF
Text Search (OCR)
- Embed text information in scanned PDFs
- Searchable not just by filename but by content
File Size Compression
- Compress high-resolution scans with large file sizes
Set Passwords
- Secure confidential documents
Edit Metadata
- Record transaction information in PDF properties

Browser-based PDF tools can be used without installation.

Frequently Asked Questions and Cautions

Q1: Can I print invoice PDFs attached to emails and store them on paper?

A: Not allowed after January 2024. Electronically received data must be stored electronically. However, transitional measures may apply to data received during the "grace period" until December 2023.

Q2: Are invoices received via LINE or ChatWork also covered?

A: Yes. All electronically exchanged transaction information is subject to electronic transaction data storage.

Q3: Are screenshots OK?

A: OK if saved as images, but filename must include search items, and authenticity measures (internal procedures, etc.) are required.

Q4: How long must they be stored?

A: Corporations: 7 years (10 years if carrying losses forward). Sole proprietors: 5 years in principle (7 years for blue return filers).

Q5: What happens if I violate?

A: Risk of blue return approval revocation or estimated taxation. Inability to present data during tax audits may also lead to heavy additional taxes.

Summary: Balance Legal Compliance and Efficiency with Naming Rules

The Electronic Bookkeeping Act seems complex, but by following the basic rule of including "date, amount, counterparty" in filenames, SMEs and sole proprietors can fully comply.

Practical Checklist

Decide filename format (e.g., YYYYMMDD_Amount_Counterparty_Type.pdf)
Design folder structure (FY → Month or Counterparty)
Download, fill in, and begin operating internal procedures
Stop printing electronic transaction data on paper
Organize existing data (comply with past data where possible)

Once you establish rules, legal compliance becomes an extension of daily operations. Use PDF tools and achieve searchable, efficient document management.

Electronic Bookkeeping Act Compliance: Correct PDF File Naming Rules and Searchable Storage Management