What is the Expense Reimbursement policy in Japan?

Modified on: Thu, 22 Jan, 2026 at 5:37 PM

When submitting expenses for reimbursement as an employee in Japan, it is important to understand the requirements and process to ensure that your claims are accepted and reimbursed promptly.

What Receipts Are Accepted?

For all types of expenses, receipts must meet Japanese tax regulations to be eligible for reimbursement:

Original Receipts: Employees must submit original, itemized receipts that clearly show:
- The date of purchase or service
- The amount paid
- The details of the purchase or service
- The vendor’s name and address (important for tax purposes)
Qualified Invoices: If the expense involves consumption tax (similar to VAT), the receipt should be a qualified invoice. These must include:
- The supplier’s name and registration number
- The details of goods or services purchased
- The amount paid
- The consumption tax charged
Electronic Receipts: Digital receipts are acceptable as long as they contain all the required details and comply with Japan’s digital record-keeping regulations. Photocopies of receipts are generally not accepted unless the original is lost, in which case a duplicate may be provided with an explanation.

Japan requires strict documentation rules under the Qualified Invoice System (適格請求書等保存方式).

To claim an expense tax‑free, a valid receipt (領収書 / ryōshūsho) should include:

Vendor name
Transaction date
Amount (including tax)
Description of goods/services
Vendor Registration Number (適格請求書発行事業者番号)

Important:
Horizons Global Technology Japan Ltd. does not need to be listed on the receipt for reimbursements.

Missing Receipts

If an employee cannot provide receipts or proof of payment, the reimbursement may be classified as taxable compensation.

Approval Process

Before any expenses are reimbursed, they must first be approved by your line manager. Follow these simple steps:

Submit your receipts and expense details via the Horizons platform.
Your line manager will review and approve the expenses through the platform.
Only after approval will the expenses be processed for reimbursement.

If you experience any issues or delays, please reach out to your line manager for support or clarification.

1. Mileage Reimbursement in Japan

Japan does not set any statutory or government-defined mileage rate.

Typical Company Mileage Rates

Most companies set internal reimbursement rates of:

¥20–¥45 per km
(varies by region, fuel prices, vehicle type, and business needs)

Requirements for Mileage to Be Tax‑Free

Mileage reimbursements are generally non‑taxable when:

The rate reflects reasonable actual costs (fuel, maintenance, depreciation, insurance, etc.).
The employee maintains a travel logdocumenting:
- Date
- Origin & destination
- Purpose of trip
- Kilometres driven
Receipts are provided for related costs (parking, tolls, etc.).

When these conditions aren’t met, the reimbursement may be treated as taxable income.

2. Travel Expense Reimbursement (Air, Train, Taxi, etc.)

Japan does not impose caps or statutory limits on travel reimbursement. However, expenses must always be:

Reasonable
Business-related
Properly documented

Air Travel

Business-class allowed when reasonable and justified.
Receipt + boarding pass required.

Train Travel (JR, Metro, Shinkansen)

Receipts required.
Green Car (premium class) is acceptable if justified for business needs.

Buses / Trams

Receipts required when available.

Taxi / Ride-Hailing

Allowed for business purposes.
A taxi receipt (領収書) is required; otherwise, reimbursement may become taxable.

Rental Cars

Allowed if business-related.
Employee must submit:
- Rental agreement
- Fuel receipts

3. Per Diems in Japan

Japan does not have government-set per diem allowances.

Company Per Diem Policies

Companies may set internal per diem amounts; however:

Per diems are taxable unless supported by actual receipts.
Flat rate allowances are typically treated as taxable salary under Japanese tax rules.

4. Business Entertainment Costs

Business entertainment expenses (meals, client meetings, hospitality) may be:

Reimbursable and tax-free,
Only when reasonable, business-related, and supported by receipts.

5. Non-Reimbursable or Taxable Personal Expenses

Unless required strictly for business or mandated by the employer (e.g., legally required medical checks), the following are generally considered taxable:

Gym memberships
Yoga, fitness, or swimming classes
Personal medical bills
Therapy or counseling (unless legally required by the company)

6. Consumption Tax (Japan VAT)

Most reimbursable expenses in Japan include 10% consumption tax.
To allow the company to recover this VAT where applicable, employees must submit Qualified Invoices following the Invoice System requirements.

7. Parking, Toll, and ETC Charges

Employees should submit:

Parking receipts
ETC highway toll receipts
Digital ETC statements when applicable

Missing receipts typically make the reimbursement taxable.

Attachments (1)

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Qualified Tax Invoice System under Japanese consumption tax law.pdf
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