Local Tax Act

When there is an inheritance (including a comprehensive bequest; the same applies hereinafter in this Chapter), the heir (including a comprehensive legatee; the same applies hereinafter in this Chapter) or the juridical person referred to in Article 951 of the Civil Code (Act No. 89 of 1896) must pay or remit the local government levies that are to be imposed on the decedent (including the person who made a comprehensive bequest; the same applies hereinafter in this Chapter), or that the decedent was to pay or remit (hereinafter in this Chapter referred to as the "decedent's local government levies"); provided, however, that an heir who has made a qualified acceptance is liable only up to the property obtained through the inheritance.

In the case referred to in the preceding paragraph, where there are two or more heirs, each heir must pay or remit the amount calculated by apportioning the decedent's local government levies in proportion to that heir's share of the inheritance under the provisions of Articles 900 through 902 of the Civil Code.

In the case referred to in the preceding paragraph, where among the heirs there is one whose value of property obtained through the inheritance exceeds the amount of local government levies that heir is to pay or remit under that paragraph, that heir is liable to pay or remit the local government levies that the other heirs are to pay or remit under that paragraph, up to the amount of the excess value.

The obligation succeeded to under the provisions of the preceding three paragraphs includes the obligation to file returns or reports relating to that obligation.

In the case where an inheritance has occurred with respect to a taxpayer or a special collection agent (in this Chapter (excluding Article 13), the terms taxpayer and special collection agent include a secondary taxpayer prescribed in Article 11, paragraph (1) and a guarantor prescribed in Article 16, paragraph (1), item (vi)), and there are two or more heirs, those heirs may designate from among themselves a representative to receive documents relating to the assessment and collection (excluding the delinquent tax collection procedure) and refund of the decedent's local government levies. In this case, the heirs who made the designation must notify the head of the local government to that effect.

In the case referred to in the first sentence of the preceding paragraph, where any of the heirs or any of their shares of inheritance is unclear, and the notification referred to in the second sentence of that paragraph is not made within a reasonable period, the head of a local government may designate one of the heirs and make that person the representative prescribed in that paragraph. In this case, the head of the local government who made the designation must notify the heirs to that effect.

Beyond what is provided for in the preceding two paragraphs, necessary matters concerning the designation of the representative prescribed in paragraph (1) are specified by Cabinet Order.

With regard to the decedent's local government levies, a disposition relating to assessment and collection or refund that requires the service of documents, made in the name of the decedent after the decedent's death without knowledge of the death, is deemed to have been made to all the heirs with respect to the decedent's local government levies only where the documents have been served on one of the heirs.

In the case where a juridical person has merged, the juridical person surviving the merger or the juridical person established by the merger must pay or remit the local government levies that are to be imposed on the juridical person extinguished by the merger (hereinafter in this Chapter referred to as the "merged juridical person"), or that the merged juridical person was to pay or remit.

The obligation succeeded to under the provisions of the preceding paragraph includes the obligation to file returns or reports relating to that obligation.

In the case where the duties of a trustee have ended due to a ground listed in the items of Article 56, paragraph (1) of the Trust Act (Act No. 108 of 2006), when a new trustee (hereinafter in this paragraph and paragraph (6) referred to as the "new trustee") takes office, that new trustee succeeds to the obligation to pay or remit the local government levies that are to be imposed on that trustee, or that the trustee was to pay or remit (limited to those for which the obligation to pay or remit becomes an obligation covered by the trust property (meaning an obligation covered by the trust property prescribed in Article 2, paragraph (9) of that Act; the same applies hereinafter in this Chapter); the same applies hereinafter in this Article).

In a trust with two or more trustees, where the duties of one of them have ended due to a ground listed in the items of Article 56, paragraph (1) of the Trust Act, notwithstanding the preceding paragraph, the trustee, among the other trustees, who has taken over the trust affairs from the trustee whose duties have ended (hereinafter in this paragraph and paragraph (5) referred to as the "trustee whose duties have ended") succeeds to the obligation to pay or remit the local government levies that are to be imposed on that trustee whose duties have ended, or that the trustee whose duties have ended was to pay or remit.

In the case where the duties of a trustee have ended due to the ground listed in Article 56, paragraph (1), item (i) of the Trust Act, the juridical person prescribed in Article 74, paragraph (1) of that Act succeeds to the obligation to pay or remit the local government levies that are to be imposed on that trustee, or that the trustee was to pay or remit.

In the case where a juridical person that is a trustee has undergone a company split, the juridical person that has succeeded to the rights and obligations as trustee through the company split succeeds to the obligation to pay or remit the local government levies that are to be imposed on the juridical person that is the trustee that underwent the company split, or that the juridical person that is the trustee that underwent the company split was to pay or remit.

Even where the obligation to pay or remit local government levies has been succeeded to under paragraph (1) or (2), the trustee referred to in paragraph (1) or the trustee whose duties have ended is liable to perform the obligation to pay or remit the succeeded local government levies with the trustee's own property; provided, however, that this does not apply where, under Article 21, paragraph (2) of the Trust Act, the trustee is liable to perform the obligation to pay or remit those local government levies only with property belonging to the trust property.

Where the new trustee has succeeded to the obligation to pay or remit local government levies under paragraph (1), the new trustee is liable to perform the obligation to pay or remit the succeeded local government levies only with property belonging to the trust property.