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Document Attachment (Shomen-Tenpu)
Article 33-2 of the Certified Public Tax Accountant Act establishes what is known as the "Document Attachment" (Shomen-Tenpu) system. Under this system, the tax accountant who prepared the tax return attaches a document describing the calculations performed, matters reviewed, and consultations received from the taxpayer. This document serves as a kind of "certificate of assurance," explaining to the tax office how the tax accountant examined and determined the filing content.
The purpose of the Document Attachment system is to increase the transparency and reliability of tax filings. By clarifying the process through which a tax accountant prepares the tax return, the tax office can gain a deeper understanding of the filing content, reducing the need for unnecessary tax audits.
Benefits for Taxpayers
- Lower probability of a tax audit: Because the filing carries the tax accountant’s endorsement, the likelihood of a tax audit is significantly reduced.
- Prior notice and hearing of opinions: Because the tax accountant communicates directly with the tax office before any audit, the taxpayer does not need to respond directly.
- Increased credibility: As the reliability of the tax return increases, this can also work in your favor with financial institutions when opening a corporate account or applying for financing.
- Reduction of late-payment and additional tax penalties: Even if an underreporting issue is later identified, provisions exist to waive part of the late-payment or additional tax penalties if the cause is addressed in the attached document.
