Local Tax Act

A prefecture may not impose enterprise tax on the income or revenue from the business of any of the following corporations, other than that relating to profit-making business:

incorporated administrative agencies prescribed in Appended Table II of the Corporation Tax Act;

the Japanese Red Cross Society, medical care corporations (limited to social medical care corporations prescribed in Article 42-2, paragraph (1) of the Medical Care Act), chambers of commerce and industry and the Japan Chamber of Commerce and Industry, societies of commerce and industry and federations of societies of commerce and industry, the Central Industrial Accident Prevention Association and industrial accident prevention associations, the Seafarers' Accident Prevention Association, incorporated public interest associations and incorporated public interest foundations, general incorporated associations (limited to those falling under non-profit corporations (meaning non-profit corporations prescribed in Article 2, item (ix)-2 of the Corporation Tax Act; the same applies hereinafter in this item)) and general incorporated foundations (limited to those falling under non-profit corporations), social welfare corporations, offenders rehabilitation corporations, religious corporations, incorporated educational institutions and corporations set forth in Article 152, paragraph (5) of the Private Schools Act, vocational training corporations, the Central Vocational Ability Development Association and prefectural vocational ability development associations, and workers' cooperatives (limited to specified workers' cooperatives prescribed in Article 94-3, item (ii) of the Workers' Cooperatives Act (Act No. 78 of 2020));

bar associations and the Japan Federation of Bar Associations, the Japan Patent Attorneys Association, judicial scriveners' associations and the Japan Federation of Judicial Scriveners' Associations, land and house investigators' associations and the Japan Federation of Land and House Investigators' Associations, administrative scriveners' associations and the Japan Federation of Administrative Scriveners' Associations, the Japanese Institute of Certified Public Accountants, certified public tax accountants' associations and the Japan Federation of Certified Public Tax Accountants' Associations, labor and social security attorneys' associations and the Japan Federation of Labor and Social Security Attorney's Associations, and pilots' associations and the Japan Federation of Pilots' Associations prescribed in the Pilotage Act (Act No. 121 of 1949);

labor unions that are corporations, and officials organizations, etc. that are corporations under the Act on Granting of Juridical Personality to Officials Organizations, etc.;

fishing vessel insurance associations, fishery credit fund associations, credit guarantee associations, agricultural credit fund associations, fishery mutual relief associations and federations of fishery mutual relief associations, agricultural mutual relief associations and federations of agricultural mutual relief associations, federations of land improvement project organizations, federations of agricultural cooperatives (limited to those that establish hospitals or clinics falling under the public medical institutions prescribed in Article 31 of the Medical Care Act and that are specified by Cabinet Order; referred to as "specified federations of agricultural cooperatives" in Article 72-23, paragraph (2) and Article 72-24-7, paragraph (7)), federations of small business associations, sake brewers' associations and federations of sake brewers' associations, the Central Association of Sake Brewers' Associations, liquor retailers' associations and federations of liquor retailers' associations, the Central Association of Liquor Retailers' Associations, commerce and industry associations and federations of commerce and industry associations that are associations without capital contributions, environmental sanitation trade associations and federations of environmental sanitation trade associations that are associations without capital contributions, exporters' associations and importers' associations that are associations without capital contributions, National Health Insurance Societies and Federations of National Health Insurance Associations, the Japan Health Insurance Association, health insurance societies and the National Federation of Health Insurance Societies, National Public Servants Mutual Aid Associations and the Federation of National Public Service Personnel Mutual Aid Associations, Local Public Servants Mutual Aid Associations, the National Federation of Mutual Aid Associations for Municipal Personnel, the Pension Fund Association for Local Government Officials, the Fund for Local Government Employees' Accident Compensation, the Mutual Aid Fund for Official Casualties and Retirement of Volunteer Firefighters, the Promotion and Mutual Aid Corporation for Private Schools of Japan, corporate pension funds and the Pension Fund Association prescribed in the Defined-Benefit Corporate Pension Act, the Coal Mining Pension Fund, national pension funds and the National Pension Fund Association, the Deposit Insurance Corporation of Japan, the Agricultural and Fishery Co-operative Savings Insurance Corporation, the Policyholders Protection Corporation, Investor Protection Funds, the consignor protection fund, the Nuclear Damage Compensation and Decommissioning Facilitation Corporation, and workers' asset formation funds;

urban redevelopment associations, housing block improvement associations, debt adjustment associations, and disaster-prevention block improvement project associations;

non-life insurance rating organizations, the National Association of Local Racing, the High Pressure Gas Safety Institute of Japan, the Japan Electric Meters Inspection Corporation, the Hazardous Materials Safety Techniques Association, the Japan Fire Equipment Inspection Institute, the Light Motor Vehicle Inspection Organization, the Small Craft Inspection Organization, the Organization for Technical Intern Training, the Japan Workers' Housing Association, the Wide-Area Coastal Environmental Improvement Center, the Nuclear Waste Management Organization of Japan, the Organization for Cross-regional Coordination of Transmission Operators, Japan, the Spent Fuel Reprocessing and Decommissioning Facilitation Organization, authorized financial instruments firms associations, commodity futures associations, money lenders associations, the Safe Driving Center, the Japan Financial Literacy and Education Corporation, the GX Acceleration Agency, and the Science Council of Japan;

management association corporations and housing complex management association corporations, and condominium revitalization associations, condominium sale associations, condominium demolition associations and site division associations;

authorized neighborhood associations prescribed in Article 260-2, paragraph (7) of the Local Autonomy Act;

political parties, etc. that are corporations prescribed in Article 7-2, paragraph (1) of the Act on Granting of Juridical Personality to Political Party Receiving Political Party Grants;

a specified non-profit corporation prescribed in Article 2, paragraph (2) of the Act on Promotion of Specified Non-profit Activities.

A prefecture may not impose the enterprise tax on income from the business of an association or foundation without juridical personality, other than income relating to a profit-making business.

A corporation listed in the items of paragraph (1) and an association or foundation without juridical personality must keep accounts of income or revenues relating to a profit-making business separately from accounts of income or revenues relating to a business other than a profit-making business.

The scope of the profit-making businesses referred to in paragraphs (1) and (2) is specified by Cabinet Order.

If necessary for an examination concerning the assessment and collection of the enterprise tax, a prefectural tax collection official may question the persons listed below, or inspect the books and documents relating to the business of a person in item (i) or (ii) (including, where electronic or magnetic records (meaning records made in electronic form, magnetic form or any other form that cannot be perceived by human senses, which are used for information processing by a computer) have been made or kept in lieu of making or keeping them, those electronic or magnetic records; the same applies in items (i) and (ii) of paragraph (1) of the following Article, Article 72-49-5, paragraph (1), Article 72-49-6, paragraph (1), item (vi), Article 72-49-10, paragraph (1), items (i) and (ii), Article 72-63, paragraph (1), Article 72-63-2, paragraph (1), item (vi), and Article 72-64, paragraph (1), items (i) and (ii)) and other articles, or request the presentation or submission of those articles (including copies thereof).

a person liable for tax or a person found to have tax liability;

a person found to have an obligation to give money or goods to a person prescribed in the preceding item;

a person, other than those listed in the preceding two items, who is found to be directly related to the assessment and collection of the enterprise tax in question.

A successor corporation in a company split (meaning a corporation that has had assets and liabilities transferred to it by a splitting corporation in a company split; the same applies hereinafter in this paragraph and in Article 72-49-5, paragraph (2)) in a company split in which a person listed in item (i) of the preceding paragraph is the splitting corporation (meaning a corporation that has transferred its assets and liabilities through a company split; the same applies hereinafter in this paragraph and in Article 72-49-5, paragraph (2)), and a splitting corporation in a company split in which a person listed in that item is the successor corporation in a company split, are included in the persons found to have an obligation to give money or goods prescribed in item (ii) of the preceding paragraph.

In the case referred to in paragraph (1), the tax collection official in question must carry an identification card certifying the official's status and present it when requested by a person concerned.

A prefectural tax collection official may, as provided by Cabinet Order, retain the articles submitted pursuant to the provisions of paragraph (1).

Examinations concerning delinquent tax collection procedures for the enterprise tax are governed by the provisions of Article 72-68, paragraph (6), notwithstanding the provisions of paragraph (1).

The authority of a prefectural tax collection official under paragraphs (1) and (4) must not be construed as having been granted for the purpose of a criminal investigation.

In a case that falls under any of the following items, the person who committed the violation is to be punished by imprisonment for not more than one year or a fine of not more than 500,000 yen:

if the person refuses, obstructs or evades an inspection of books, documents or other articles under the provisions of the preceding Article;

if the person, without justifiable grounds, fails to comply with a request to present or submit articles under the provisions of paragraph (1) of the preceding Article, or presents or submits books, documents or other articles (including copies thereof) containing false entries or records;

When a person fails to answer questions put by a tax collection official under the preceding Article, or gives a false answer.

Where a representative of a corporation (including an administrator of an association or foundation without juridical personality; the same applies in Article 72-10, paragraph (2), Article 72-37, paragraphs (1) and (2), Article 72-49, paragraph (2), Article 72-49-3, paragraphs (1), (3) and (5), Article 72-49-10, paragraph (2), Article 72-64, paragraph (2), Article 72-69, paragraph (4) and Article 72-70, paragraph (2)), or an agent, employee or other worker of a corporation or person, has committed a violation under the preceding paragraph in connection with the business or property of that corporation or person, in addition to punishing the offender, the fine prescribed in that paragraph is to be imposed on that corporation or person.

Where the provisions of the preceding paragraph apply to an association or foundation without juridical personality, in addition to the representative or administrator of the association or foundation without juridical personality representing it in its procedural acts, the provisions of laws and regulations concerning criminal proceedings in the case where a corporation is the defendant or suspect apply mutatis mutandis.

If a person liable for the enterprise tax has no domicile, residence, office or place of business (hereinafter in this paragraph referred to as a "address, etc.") in the prefecture in which that person bears tax liability, that person must, in order to have all matters relating to tax payment handled, either appoint a tax agent from among persons having a address, etc. within the area specified by the Prefectural Ordinance of that prefecture and report the appointment to the prefectural governor, or apply to the prefectural governor for approval to appoint as a tax agent a person having a address, etc. outside that area who is in a convenient position to handle those matters, and obtain that approval. The same applies where that person changes or intends to change the tax agent.

Notwithstanding the preceding paragraph, the person liable for tax in question is not required to appoint a tax agent if that person has applied to the prefectural governor for, and obtained, certification that there is no impediment to securing the collection of the enterprise tax relating to that person liable for tax.

If a person makes a false report concerning a tax agent to be reported under the provisions of paragraph (1) of the preceding Article, or obtains the approval under that paragraph or the certification under paragraph (2) of that Article by deceit or other wrongful means, the person who committed the violation is to be punished by a fine of not more than 300,000 yen.

Where a representative of a corporation, or an agent, employee or other worker of a corporation or person, has committed a violation under the preceding paragraph in connection with the business or property of that corporation or person, in addition to punishing the offender, the penalty prescribed in that paragraph is to be imposed on that corporation or person.

Where the provisions of the preceding paragraph apply to an association or foundation without juridical personality, in addition to the representative or administrator of the association or foundation without juridical personality representing it in its procedural acts, the provisions of laws and regulations concerning criminal proceedings in the case where a corporation is the defendant or suspect apply mutatis mutandis.

If a person liable for the enterprise tax who has not received the certification under Article 72-9, paragraph (2) and has not received the approval under paragraph (1) of that Article fails, without justifiable grounds, to report the tax agent who is to be reported under that paragraph, a prefecture may establish a provision in the Prefectural Ordinance of that prefecture imposing a non-penal fine of 100,000 yen or less on that person.