Local Tax Act

Local government levies are collected from the total property of a taxpayer or special collection agent in priority to all public charges (limited to claims that can be collected in accordance with the rules for the delinquent tax collection procedure, and excluding local government levies, and national taxes and the expenses for the delinquent tax collection procedure for them (hereinafter in this Chapter referred to as "national taxes"); the same applies hereinafter in this Chapter) and other claims, except as otherwise specially provided in this Section.

Where a compulsory liquidation procedure has been carried out on the property of a taxpayer or special collection agent and a request for share distribution has been made for local government levies, those local government levies are collected, out of the money to be distributed through that procedure (hereinafter in this Chapter referred to as the "proceeds of realization"), next after the expenses relating to that compulsory liquidation procedure.

Where the property of a taxpayer or special collection agent has been realized through the delinquent tax collection procedure for local government levies, the expenses for the delinquent tax collection procedure relating to that procedure (including demand fees; the same applies in Article 14-5, paragraph (2) and Article 14-20) are, notwithstanding the provisions of the following Article, Articles 14-8 through 14-11, Article 14-12-2, paragraph (1), Articles 14-13 through 14-15 and Article 14-17, collected from the proceeds of realization in priority to other local government levies, national taxes and other claims.

Local government levies collected under Article 13-3 are, notwithstanding the provisions of Articles 14-6 through 14-11, Article 14-12-2, paragraph (1) and Articles 14-13 through 14-15, collected from the proceeds of realization of the articles relating to the sale or taking delivery, etc. that gave rise to the collection, in priority to other local government levies, national taxes and other claims.

Where local government levies are collected through the delinquent tax collection procedure, and the money distributed to those local government levies is to be appropriated to local tax and the delinquency charge, additional charge for understatement, additional charge for failure to file or substantial additional charge on that local tax, that money is to be appropriated first to the local tax.

The expenses for the delinquent tax collection procedure are distributed or appropriated in priority to the local government levies that gave rise to their collection.

Where property of a taxpayer or special collection agent has been seized through the delinquent tax collection procedure for local government levies, and a request for share distribution has been made for other local government levies or national tax, the local government levies relating to that seizure are collected from the proceeds of realization in priority to the local government levies or national tax relating to that request for share distribution.

Where property of a taxpayer or special collection agent has been seized through the delinquent tax collection procedure for other local government levies or national tax, and a request for share distribution has been made for local government levies, the local government levies relating to that request for share distribution are collected from the proceeds of realization next after the local government levies or national tax relating to that seizure (excluding expenses to which the provisions of Article 14-2 apply).

Where a compulsory liquidation procedure (excluding bankruptcy proceedings) has been carried out on property of a taxpayer or special collection agent, and requests for share distribution have been made for local government levies and national tax, then, with respect to the proceeds of realization, the local government levies relating to the request for share distribution made earlier are collected in priority to the local government levies or national tax relating to the request for share distribution made later, and the local government levies relating to the request for share distribution made later are collected next after the local government levies or national tax relating to the request for share distribution made earlier.

Where property provided as security has been taken for local government levies, notwithstanding the provisions of the preceding two Articles, those local government levies are collected from the proceeds of realization in priority to other local government levies and national tax.

Where a taxpayer or special collection agent has established a pledge on property, and that pledge was established on or before the statutory payment due date, etc. of local government levies (for local taxes listed in the following items, the respective days specified in those items; for demand fees, delinquency charges, additional charges for understatement, additional charges for failure to file, substantial additional charges and expenses for the delinquent tax collection procedure relating to those local taxes, the days specified in those items for the local tax that gave rise to their collection; and for local government levies relating to other local taxes, the statutory payment due date; the same applies hereinafter in this Chapter), those local government levies are collected from the proceeds of realization next after the claim secured by that pledge.

local tax for which the amount of tax to be paid or remitted was fixed after the statutory payment due date: the date on which the written notification of payment or remittance was issued (for tax whose amount was fixed by a return, the date on which the return was filed);

local tax for which notification of advance collection was given before the statutory payment due date: the due date for payment designated by that notification;

local tax imposed from time to time: the date on which the written notification of payment was issued;

local tax in the amount notified or advised under Article 14-18, paragraph (2) or Article 16-4, paragraph (2) (including as applied mutatis mutandis pursuant to paragraph (12) of that Article): the date on which the written notification or written notice under those provisions was issued;

the decedent's local tax collected from the heir's own property and the heir's own local tax collected from the inherited property (limited to those for which the amount of tax to be paid or remitted was fixed before the day on which the inheritance occurred): the day on which the inheritance occurred;

the own local tax of the corporation surviving the merger or of another merged corporation relating to that merger, collected from property that belonged to a merged corporation, and the local tax of a merged corporation collected from the own property of the corporation surviving the merger (limited to those for which the amount of tax to be paid or remitted was fixed before the day of the merger): the day of the merger;

the own local tax of the juridical person that carried out the company split (hereinafter in this item referred to as the "splitting corporation"), collected from property that has come to belong to it by the finalization of a judgment invalidating that company split, and local tax relating to the splitting corporation's obligation to jointly and severally pay or remit prescribed in Article 10-3, collected from the splitting corporation's own property (limited to those for which the amount of tax to be paid or remitted was fixed before the day on which that judgment became final and binding): the day on which that judgment became final and binding;

the own local tax of the successor corporation in a company split, collected from the property it succeeded to from the juridical person that carried out that company split (hereinafter in this item referred to as "succeeded property"), local tax relating to the successor corporation's responsibility to jointly and severally pay or remit prescribed in Article 10-4 (hereinafter in this item referred to as "joint and several tax liability"), collected from the successor corporation's own property, and the local tax of another juridical person that carried out a company split relating to that company split, relating to the successor corporation's joint and several tax liability, collected from the successor corporation's succeeded property (limited to those for which the amount of tax to be paid or remitted was fixed before the day of the company split): the day of the company split;

local tax to be paid or remitted as a secondary taxpayer or guarantor: the date on which the written notice of payment or remittance under Article 11, paragraph (1) (including as applied mutatis mutandis) was issued.

In applying the provisions of the preceding paragraph, the following Article, Article 14-14, paragraph (1), Article 14-16, paragraph (1), Article 14-17, paragraph (1), Article 14-18, paragraph (9) and Article 14-20, item (ii) to the local taxes listed in the following items, the statutory payment due date, etc. for those local taxes is the time limit or day specified in the respective items, and, for the demand fees, delinquency charges, additional charges for understatement, additional charges for failure to file, substantial additional charges and expenses for the delinquent tax collection procedure relating to those local taxes, it is the time limit or day specified in those items for the local tax that gave rise to their collection:

corporation tax levy of prefectural inhabitant tax or municipal inhabitant tax imposed on the basis of the taxation of corporation tax (including the per capita levy imposed together with them): the statutory payment due date, etc. prescribed in Article 15, paragraph (1) of the National Tax Collection Act (Act No. 147 of 1959) for that corporation tax;

income levy of enterprise tax imposed on the basis of the tax base of corporation tax (including the value-added levy and capital levy or revenue levy imposed together with it): the statutory payment due date, etc. prescribed in Article 15, paragraph (1) of the National Tax Collection Act for that corporation tax;

enterprise tax imposed on the basis of the tax base of income tax: the statutory payment due date, etc. prescribed in Article 15, paragraph (1) of the National Tax Collection Act for that income tax;

local consumption tax imposed on the basis of the taxation of consumption tax: the statutory payment due date, etc. prescribed in Article 15, paragraph (1) of the National Tax Collection Act for that consumption tax;

individual municipal inhabitant tax (including individual prefectural inhabitant tax imposed together with it; the same applies hereinafter in this item): the time limit or day specified below, according to the following categories of individual municipal inhabitant tax:

individual municipal inhabitant tax imposed on the basis of the tax base of income tax and collected by the method of ordinary collection (including the per capita levy imposed together with it): the statutory payment due date, etc. prescribed in Article 15, paragraph (1) of the National Tax Collection Act for that income tax;

individual municipal inhabitant tax collected by the method of special collection under Article 321-3: the time limit prescribed in Article 321-4, paragraph (2) (for the special collection tax amount relating to a notice given after that time limit, the day on which that notice was given);

individual municipal inhabitant tax collected by the method of special collection under Article 321-7-2, paragraphs (1) and (2) and Article 321-7-8, paragraph (1): the time limit for notice to the pension insurer prescribed in Article 321-7-5, paragraph (1) (including as applied mutatis mutandis pursuant to Article 321-7-8, paragraph (3));

national health insurance tax collected by the method of special collection under Article 706, paragraphs (2) and (3), Article 718-7, paragraphs (1) and (2) and Article 718-8, paragraph (1): the time limit for notice to the pension insurer prescribed in Article 718-3, paragraph (1) (including as applied mutatis mutandis pursuant to Article 718-6, Article 718-7, paragraph (3) or Article 718-8, paragraph (3)).

The provisions of paragraph (1) apply, in the case of a pledge other than a pledge that can be registered (including, for registration, entry in a register and the electronic record prescribed in Article 2, paragraph (1) of the Electronically Recorded Monetary Claims Act (Act No. 102 of 2007); the same applies hereinafter in this Chapter), only where the pledgee proves the fact of its creation to the enforcement agency in a compulsory liquidation procedure; in this case, for a pledge other than a pledge whose object is securities, the proof must be made by the documents listed in the following items.

Notarized deed;

A private document bearing a dated seal affixed at a registry office or notary's office;

A document for which certification of contents has been received under Article 48, paragraph (1) of the Postal Act (Act No. 165 of 1947);

A document delivered under Article 60, paragraph (4) of the Notary Act (Act No. 53 of 1908) as applied mutatis mutandis in Article 7, paragraph (1) of the Act for Enforcement of the Civil Code (Act No. 11 of 1898).

A pledge proved under the items of the preceding paragraph is, for the purposes of the application of paragraph (1), deemed to have been created on the day on which it is deemed to have a fixed date under Article 5 of the Act for Enforcement of the Civil Code.

A person who holds a pledge under paragraph (1) may not exercise priority against a subsequent pledgee who takes priority over local government levies under paragraph (1), within the scope of the amount by which that person ranks behind local government levies because the proof under paragraph (3) was not made.