Key Takeaway
For freelancers and sole proprietors, receipts must be kept for 7 years (Blue Return) or 5 years (White Return). When in doubt, keep records for 7 years to be safe.
Storage Periods by Filing Type
| Filing Type | Storage Period | Legal Basis |
|---|---|---|
| Blue Return | 7 Years | NTA Record Keeping Guide |
| White Return | 5 Years | NTA Record Keeping Guide |
The above are the basic storage periods. For Blue Return filers whose income from two years prior was ¥3 million or less, some documents may be kept for 5 years. However, keeping all documents for 7 years is the safest approach regardless of filing type.
Types of Documents to Keep
| Document Type | Examples | Blue | White |
|---|---|---|---|
| Ledgers | Journal, general ledger, expense book, accounts receivable, accounts payable | 7y | 7y |
| Financial Statements | P&L statement, balance sheet, inventory list | 7y | 7y |
| Cash & Bank Records | Receipts, bank books, check stubs, loan documents | 7y* | 5y |
| Other Documents | Invoices, quotes, contracts, delivery slips | 5y | 5y |
* 5 years if income from 2 years prior was ¥3M or less
Why Keep Receipts?
1. Preparation for Tax Audits
Tax authorities may audit past filings. Receipts are necessary to prove the legitimacy of expenses. Without documents within the retention period, expenses may be disallowed.
2. Blue Return Requirements
To receive the special deduction (up to ¥650,000) with Blue Return, proper bookkeeping and document retention are mandatory. Failure to comply may result in losing Blue Return approval.
3. Expense Verification
For expenses you claim, you need documents proving "when," "where," "what," and "how much" was spent. Receipts are the most fundamental evidence containing this information.
About Digital Storage
Under the revised Electronic Record Keeping Law, paper receipts can be scanned and stored digitally if certain requirements are met. However, this is optional, not mandatory.
Digital Storage Requirements (Overview)
- Timestamp attachment
- Tamper prevention measures
- Search functionality (date, amount, vendor)
For details, see our "Digitization Guide".
Warning: Premature Disposal
Disposing of receipts before the retention period ends may result in expense disallowance during audits. For Blue Return filers, inadequate record keeping may even lead to loss of Blue Return approval.
Receipt Storage Best Practices
- When in doubt, keep for 7 years
Filing types may change, so keeping all documents for 7 years is the safest approach.
- Organize by fiscal year
Organizing by tax year makes it easy to find documents when needed.
- Create digital backups
Paper receipts fade over time, so taking photos as backup is recommended.
- Label with disposal dates
Labels like "Keep until 2032" make it clear when documents can be disposed of.
