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The latest version for 2022
Survey Report on the Actual State of Compliance with the Electronic Bookkeeping Act

Over 70 companies were surveyed regarding their compliance with the Electronic Bookkeeping Act, and the results were compiled into a report.

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HUE, a solution for the Electronic Bookkeeping Act

For customers considering compliance with the Electronic Bookkeeping Act, we offer a variety of solutions in a wide range of areas, including support for paperless systems as well as "electronic transactions" and other legal requirements.

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Do EDI transactions also need to comply with the Electronic Bookkeeping Act?

Tax system revision requires EDI transactions to comply with the Electronic Bookkeeping Act

Under the existing tax law, national tax-related documents such as purchase orders and invoices, which are required to be presented at tax audits, etc., were allowed to be printed out, stored, and presented in writing if they were exchanged in electronic data.
However, in the "Tax Reform Proposal for Fiscal 2021," approved by the Cabinet in December 2020, the alternative measure of deeming the presentation of a printed document to be the presentation of electronic data exchanged was "abolished, " and it became mandatory to preserve such documents as electronic data in effect.

In addition,electronic data must be preserved in accordance with the requirements set forth in the Electronic Bookkeeping Law.

>> To learn more about the amendment, please visit
Paper preservation of electronic transactions is "abolished"! Is it necessary to review operations after the revision?

Specific examples of EDI transactions that require compliance with the Electronic Bookkeeping Act

In EDI transactions, various interactions with business partners occur, such as requests for quotations and creation of purchase orders, but what information is subject to preservation?
According to the Notice of Interpretation of Laws and Regulations disclosed by the National Tax Agency, Chapter 4, "Transaction information to be stored in electromagnetic records should be items corresponding to the items described in each document, for each unit corresponding to documents such as quotation, purchase order, delivery note, and payment notice.

Taking an order form as an example, specifically, the following information should be stored.

• Order number
• Order date
• Total amount of order
• Item name
• Quantity
• Unit Price
• Amount per item

On the other hand, inquiries about detailed product specifications and greetings with business partners via EDI with Chat function are not covered because they do not include transaction information.
In addition, even if there are exchanges such as order changes, only information that has been finalized is allowed to be stored, and not all data on EDI is subject to storage.

Points to check in order to meet the preservation requirements for electronic transactions

So, what should be done to ensure that EDI transactions are actually conducted in accordance with legal requirements?
There are three main points to check.

Point 1: Can measures be taken to prevent falsification in accordance with legal requirements?

The legal requirements for electronic transactions stipulate that one of the following tamper-protection measures must be taken to ensure the truthfulness of data.

[Legal requirement

✓ Transfer/receive with time-stamped data
✓ Transfer/store in a system that keeps a history of corrections and deletions
✓ Establish and follow office processing rules to prevent tampering

In most cases, EDI transactions are handled by a function to keep a history of corrections and deletions that is provided in the system used, but what kind of system should be used specifically?

For example, systems with specifications that physically do not allow correction or deletion, systems with data version control functions, and systems that can retain historical information prior to correction or deletion fall into this category.
Naturally, systems that allow correction and deletion must not only "record" historical information, but must also be able to "check" it, so functions that allow unencrypted inquiry and output are necessary.

In addition, the retention period for electronic data is defined as 7 years or more, and naturally, the history associated with the data must also be retained for the retention period, so sufficient capacity is required.

Point 2: Can data be retrieved in accordance with legal requirements?

The legal requirements for electronic transactions stipulate that data must be retrievable in the following manner to ensure data visibility.

[Legal requirements]

✓ Allow searches by date, amount, and counterparty
✓ Allow searches by specifying a range and by specifying multiple items.
*If you are in a position to respond to a request from a tax official to download data, you do not need to specify a range or search by multiple items.

The scope of what should be supported depends on whether or not downloading (output) of stored data is possible, but it should be confirmed in advance whether the system used for EDI transactions can search data according to the above search conditions.

If the system does not support it, you can satisfy the search requirements by giving regular file names, by using the search function of Windows Explorer to search by date, amount, and trading partner, or by creating your own search book in Excel or other spreadsheet software. In addition to checking the functionality of the system, you can also check the operation of the system.

Point 3: Can you respond smoothly to tax audits?

In addition to checking the functionality of the system, operational aspects must also be addressed.
For example, tax officials may check to see if data is stored in compliance with legal requirements, and the system must be able to display and output the requested data immediately.

In order to do so, it is necessary not only to provide equipment such as displays and printers, but also toprovide training to ensure that the person in charge can operate the system without hesitation, and to have an operation manual available for immediate reference.

Another important point is to make sure that the person in charge is authorized to access data and use functions such as downloading.

Since this is not a task that occurs on a monthly basis, it is necessary to check regularly in order to avoid last-minute panic.

Prepare for the revision with a system that supports electronic transactions

According to the revision, electronic files generated by EDI transactions will be required to be stored electronically from January 2024.
This means that by the end of December 2023, you must be ready to comply with the Electronic Bookkeeping Law and be able to conduct your business correctly.

Although there is still a grace period until the actual enforcement of the law, it is important to prepare for it as early as possible because after the enforcement, there will be a penalty of an additional 10% heavy tax for failure to file tax returns caused by fraud.

>> If you would like to know what other companies are doing during the grace period, please visit
The latest version of the 2022 Electronic Bookkeeping Act compliance survey report

Our company, Works Applications Enterprise, provides systems that comply with the Electronic Bookkeeping Act.
We also offer a purchasing management system with EDI functionality called HUE Purchase HUE Purchase" which includes "HUE Purchase" and "HUE Purchase" which includes "HUE Purchase HUE The "HUE Purchase" series, which includes the "HUE Purchase" purchasing management system with EDI functionality, enables you to go paperless in your day-to-day operations. In addition, for companies wishing to comply with the Electronic Bookkeeping Act from a small start, we offer the "HUE EBM" cloud storage service. HUE EBM a cloud storage service for companies that want to start small and comply with the Electronic Bookkeeping Act.

White Paper

The latest version for 2022
Survey Report on the Actual State of Compliance with the Electronic Bookkeeping Act

Over 70 companies were surveyed regarding their compliance with the Electronic Bookkeeping Act, and the results were compiled into a report.

See More

HUE, a solution for the Electronic Bookkeeping Act

For customers considering compliance with the Electronic Bookkeeping Act, we offer a variety of solutions in a wide range of areas, including support for paperless systems as well as "electronic transactions" and other legal requirements.

Access Now