Local Tax Act

The mayor of the municipality may reduce or exempt municipal inhabitant tax, in accordance with the provisions of the Municipal Ordinance of the municipality concerned, only for a person who is found to need a reduction or exemption of municipal inhabitant tax in the case of a natural disaster or other special circumstances, a person who receives public or private assistance for subsistence owing to poverty, and any other person with special circumstances; provided, however, that this does not apply to a special collection agent.

If a person evades all or part of municipal inhabitant tax (for corporation tax levy, calculated with the corporation tax amount to be stated in the return pertaining to the corporation tax levy as the tax base, and excluding the amount to be paid by a corporation that is obliged to file a corporation tax return under Article 71, paragraph (1) of the Corporation Tax Act (limited to a return stating the matters set out in the items of Article 72, paragraph (1) of that Act) or a corporation tax return under Article 144-3, paragraph (1) of that Act (limited to a return stating the matters set out in the items of Article 144-4, paragraph (1) of that Act) pursuant to Article 321-8, paragraph (1), by the declaration under Article 321-8, paragraph (1) or the declaration under paragraph (34) of that Article pertaining to it; the same applies in paragraph (5)) by deception or other wrongful acts, the person who committed the violation is to be punished by imprisonment for not more than 10 years or a fine of not more than 10,000,000 yen, or both.

If the amount of tax evaded as referred to in the preceding paragraph exceeds 10,000,000 yen, the amount of the fine referred to in that paragraph may, in light of the circumstances, notwithstanding that paragraph, be an amount exceeding 10,000,000 yen and not exceeding the amount of the tax evaded.

If a person fails to remit all or part of the remittance pertaining to the individual municipal inhabitant tax to be collected and remitted pursuant to Article 321-5, paragraph (1) or the proviso to paragraph (2), or Article 321-7-6 (including as applied mutatis mutandis with replacement of terms pursuant to Article 321-7-8, paragraph (3)), the person who committed the violation is to be punished by imprisonment for not more than 10 years or a fine of not more than 2,000,000 yen, or both.

If the amount not remitted as referred to in the preceding paragraph exceeds 2,000,000 yen, the amount of the fine referred to in that paragraph may, in light of the circumstances, notwithstanding that paragraph, be an amount exceeding 2,000,000 yen and not exceeding the amount not remitted.

In addition to what is provided for in paragraph (1), if a person evades all or part of municipal inhabitant tax by failing to file a return to be filed pursuant to Article 317-2, paragraph (1) or (2), or failing to declare the matters to be declared pursuant to paragraph (8) or (9) of that Article, or failing to file a return under Article 321-8, paragraph (1), (2) or (31) within the deadline for filing the return prescribed in the relevant paragraph, the person who committed the violation is to be punished by imprisonment for not more than five years or a fine of not more than 5,000,000 yen, or both.

If the amount of tax evaded as referred to in the preceding paragraph exceeds 5,000,000 yen, the amount of the fine referred to in that paragraph may, in light of the circumstances, notwithstanding that paragraph, be an amount exceeding 5,000,000 yen and not exceeding the amount of the tax evaded.

If a representative of a corporation, or an agent, employee or other worker of a corporation or person, commits a violation referred to in paragraph (1), (3) or (5) in connection with the business or property of that corporation or person, then in addition to punishing the offender, the fine prescribed in each of those paragraphs is to be imposed on that corporation or person.

The period of prescription where a fine is imposed on a corporation or person pursuant to the preceding paragraph in respect of a violation referred to in paragraph (1), (3) or (5) is the period of prescription for the offenses under those paragraphs.

Where paragraph (7) applies to an association or foundation that is not a corporation and has a designated representative or administrator, in addition to that representative or administrator representing that association or foundation that is not a corporation and has a designated representative or administrator in its procedural acts, the provisions of laws and regulations on criminal proceedings applicable where a corporation is the defendant or suspect apply mutatis mutandis.

If the mayor of the municipality, for the assessment and collection of municipal inhabitant tax, has requested the government to permit the inspection or recording of the return that a person liable for income tax or corporation tax submitted to the government or of documents relating to a reassessment or determination made by the government, the government is to allow the mayor of the municipality or the staff member designated by the mayor to inspect or record the relevant documents.

A taxpayer of municipal inhabitant tax or a special collection agent that pays the tax after any of the due dates for payment under Article 320 or the due date for payment under Article 321-8, paragraph (1), (2) or (31), pays the tax pertaining to a return prescribed in paragraph (34) of that Article, or remits the remittance after any of the due dates for payment under Article 321-5, paragraph (1) or the proviso to paragraph (2), Article 321-5-2 (including as applied mutatis mutandis pursuant to Article 328-5, paragraph (3); the same applies in item (i)), Article 321-7-6 (including as applied mutatis mutandis pursuant to Article 321-7-8, paragraph (3); the same applies in that item) or Article 328-5, paragraph (2), must pay or remit, in addition to the tax amount or the amount of remittance concerned, respectively, an amount of delinquency charge equivalent to the amount calculated by multiplying it by a rate of 14.6 percent per annum (7.3 percent per annum for the period up to the day or time limit specified in each of the following items in accordance with the category of the tax amount set out in that item), according to the number of days in the period from the day following the due date for payment (where the tax pertaining to a return prescribed in Article 321-8, paragraph (34) is paid, the due date for payment under paragraph (1), (2) or (31) of that Article pertaining to that tax, and where the due date for payment has been extended, the extended due date for payment; the same applies hereinafter in this paragraph and paragraph (3), item (i)) to the day of payment or remittance.

the tax amount paid after the due date for payment under Article 320, or remitted after the due date for payment under Article 321-5, paragraph (1) or the proviso to paragraph (2), Article 321-5-2, Article 321-7-6 or Article 328-5, paragraph (2): the day on which one month elapses from the day following that due date for payment;

the tax amount pertaining to the return prescribed in Article 321-8, paragraph (1), (2) or (31) (excluding that set forth in the following item): the day on which one month elapses from the day following the due date for payment of that tax amount;

the tax amount pertaining to a return prescribed in Article 321-8, paragraph (1), (2) or (31) that was filed after the deadline for filing: the day on which it was filed or the day on which one month elapses from the day following that day;

the tax amount pertaining to the return prescribed in Article 321-8, paragraph (34): the day on which the return was filed pursuant to that paragraph (or, where the provisions of Article 321-8, paragraph (35) apply and that return was filed before the deadline for filing, the deadline for filing that return; the same applies hereinafter in this item) or the day on which one month elapses from the day following the day on which that return was filed.

In the case of the preceding paragraph, if a corporation files the return prescribed in Article 321-8, paragraph (34) after the day on which one year elapses from the day following the day on which it filed the return prescribed in Article 321-8, paragraph (1), (2) or (31) (or, if that return was filed before the deadline for filing, the deadline for filing that return), the period from the day following the day on which that one year elapses until the day on which that return was filed (or, where the provisions of Article 321-8, paragraph (35) apply and that return was filed before the deadline for filing, the deadline for filing that return) is to be deducted from the period forming the basis for calculating the delinquency charge, except where a corporation that evaded municipal inhabitant tax by deception or other wrongful acts filed that return having foreseen that a reassessment under Article 321-11, paragraph (1) or (3) would be made.

In the case of paragraph (1), when the return prescribed in Article 321-8, paragraph (34) (hereinafter in this paragraph referred to as an "amended return") has been filed (limited to the case where, with respect to the municipal inhabitant tax pertaining to that amended return, the return prescribed in Article 321-8, paragraph (1), (2) or (31) (hereinafter in this paragraph referred to as the "original return") has been filed, and that amended return was filed after a reassessment reducing the amount of tax to be paid by the filing of that original return (including a reassessment specified by Cabinet Order as similar thereto; hereinafter in this paragraph referred to as a "reassessment reducing the tax") was made), then, with respect to the amount of tax to be paid by the filing of that amended return (limited to the amount of tax specified by Cabinet Order as the part up to the amount of tax pertaining to that original return (including the amount of tax equivalent to the amount of a refund)), notwithstanding the preceding paragraph, the periods set forth in the following items (limited to the period set forth in item (i), in the case of municipal inhabitant tax pertaining to an amended return filed by a corporation that evaded municipal inhabitant tax by deception or other wrongful acts having foreseen that a reassessment under Article 321-11, paragraph (1) or (3) would be made and other municipal inhabitant tax specified by Cabinet Order) are to be deducted from the period forming the basis for calculating the delinquency charge.

the period from the day following the day on which the tax to be paid by the filing of that original return was paid (or, if that day is before the due date for payment of the municipal inhabitant tax pertaining to that return, that due date for payment) until the day on which notice of that reassessment reducing the tax was given;

the period from the day following the day on which notice of that reassessment reducing the tax was given (or, if that reassessment reducing the tax is based on a request for reassessment (excluding one resulting from a reassessment of corporation tax) or results from a reassessment of corporation tax (limited to one based on a request for reassessment of corporation tax), the day on which one year elapses counting from the day following the day on which notice of that reassessment reducing the tax was given) until the day on which that amended return was filed (or, where the provisions of Article 321-8, paragraph (35) apply and that amended return was filed before the deadline for filing, the deadline for filing that amended return).

The mayor of the municipality may reduce or exempt the amount of delinquency charge under paragraph (1) if the mayor finds that there were unavoidable reasons why a taxpayer or special collection agent did not pay the tax or did not remit the remittance by the due date for payment under that paragraph.

A corporation that is obliged to file a return concerning corporation tax under Article 74, paragraph (1) or Article 144-6, paragraph (1) of the Corporation Tax Act and to which Article 75-2, paragraph (1) of that Act applies, when paying the corporation tax levy amount calculated by taking as the tax base the corporation tax amount on the income of the computation period of the tax base of the corporation tax amount relating to that return to which that application relates, and the per capita levy amount to be paid together with it, must pay, in addition to that tax amount, an amount of delinquency charge equivalent to the amount calculated by multiplying that tax amount by a rate of 7.3 percent per annum, in accordance with the number of days in the period from the day on which two months have elapsed from the day following the last day of the computation period of the tax base of that corporation tax amount to the deadline for filing that return as extended under that paragraph.

The provisions of Article 321-12, paragraph (4) apply mutatis mutandis to the amount of delinquency charge under the preceding paragraph. In this case, the phrase "notwithstanding the preceding paragraph, the periods set forth in the following items (limited to the period set forth in item (i), in the case of municipal inhabitant tax to be paid by that reassessment increasing the tax made with respect to a corporation that evaded municipal inhabitant tax by deception or other wrongful acts and other municipal inhabitant tax specified by Cabinet Order)" in Article 321-12, paragraph (4) is deemed to be replaced with "the period from the day on which the tax to be paid by the filing of that original return was paid (or, if that day is before the day on which two months elapse from the day following the last day of the computation period of the tax base of the corporation tax amount under Article 327, paragraph (1), that day on which two months elapse) until the deadline for filing the return under Article 327, paragraph (1)".

The provisions of Article 326, paragraph (3) apply mutatis mutandis to the amount of delinquency charge under paragraph (1). In this case, the phrase "notwithstanding the preceding paragraph, the periods set forth in the following items (limited to the period set forth in item (i), in the case of municipal inhabitant tax pertaining to an amended return filed by a corporation that evaded municipal inhabitant tax by deception or other wrongful acts having foreseen that a reassessment under Article 321-11, paragraph (1) or (3) would be made and other municipal inhabitant tax specified by Cabinet Order)" in Article 326, paragraph (3) is deemed to be replaced with "the period from the day on which the tax to be paid by the filing of that original return was paid (or, if that day is before the day on which two months elapse from the day following the last day of the computation period of the tax base of the corporation tax amount under paragraph (1) of the following Article, that day on which two months elapse) until the deadline for filing the return under paragraph (1) of the following Article".