---
title: "Expense limits, over-claiming audit risk, and meal expense rules"
url: https://memocore.ai/memos/6a5f63ad63d783ad6870947a
project: "Doing Business in Japan"
tags: "tax-sole-proprietor, japan-business"
updated_at: "2026-07-21T12:18:53.212Z"
---

# Expense limits, over-claiming audit risk, and meal expense rules

There is no formal upper cap on business expenses — this should not be confused with the fixed deduction of 650,000/550,000/100,000 yen available on a return, which is added on top of expenses rather than replacing them; opinions in the chat diverged on this point, but the settled reading is that expenses and the fixed deduction are separate amounts that add together. "Padding" expenses, especially for "business meetings" and restaurants, raises the risk of a full tax audit; in practice many people include personal purchases only loosely connected to work (such as branded clothing) under 経費 — a noticeable risk under review. Meal expenses can only be deducted for a genuine business meeting — not eating alone, not with family or a child, not "just eating"; it is recommended to keep a separate ledger noting who, when, which project, and contacts, since the tax office checks the number of people (人数) shown on a receipt. Using a cafe as a workspace: systematically visiting "for a change of scenery" is not an acceptable deduction, but if it is genuinely part of a chain of business meetings at different locations in one day, the deduction is acceptable.