Local Tax Act

Where a remittance return has been filed by its deadline for filing (including where it has been filed after the deadline for filing and the proviso to the following paragraph or paragraph (8) applies; the same applies hereinafter in this paragraph), and a reassessment under Article 686, paragraph (1) or (3) has been made or an amended return has been filed, the mayor of the municipality must collect an amount of additional charge for understatement equivalent to the amount calculated by multiplying the shortfall amount resulting from that reassessment or the tax amount increased by that amended return (referred to as the "covered shortfall, etc." in this paragraph) by 10 percent, if the mayor finds that there is no justifiable ground for the error in the tax base amount or tax amount relating to the remittance return or amended return preceding that reassessment or amended return (where the covered shortfall, etc. (where, before that reassessment or amended return, a reassessment was made or an amended return was filed concerning the municipal non-statutory ordinary tax relating to that reassessment or amended return, the amount obtained by adding the total of the shortfall amounts resulting from those reassessments or the tax amounts increased by those amended returns (where it has been found that there was a justifiable ground for the error in the tax base amount or tax amount relating to the remittance return or amended return preceding that reassessment or amended return, the amount after deducting the shortfall amount resulting from that reassessment or the tax amount increased by that amended return, and where there has been a reassessment reducing the amount to be remitted or the tax amount to be paid for that municipal non-statutory ordinary tax, or a modification of the original disposition by a ruling or judgment on a request for review or action relating to a reassessment, the amount after deducting the amount equivalent to the portion thereby reduced)) exceeds the greater of the amount equivalent to the tax amount relating to the remittance return where it was filed by its deadline for filing and 500,000 yen, the amount obtained by adding the amount calculated by multiplying by 5 percent the amount equivalent to the excess portion (or, where the covered shortfall, etc. is less than the amount equivalent to the excess portion, the covered shortfall, etc.)).

In any of the following cases, the mayor of the municipality must collect an amount of additional charge for failure to file equivalent to the amount calculated by multiplying the tax amount to be paid or remitted by the remittance return, amended return, determination or reassessment prescribed in each item by 15 percent; provided, however, that this does not apply where it is found that there was a justifiable reason for the remittance return not being filed by its deadline for filing.

Where a remittance return has been filed after the deadline for filing, or a determination under Article 686, paragraph (2) has been made.

Where, after a remittance return was filed after the deadline for filing, an amended return has been filed or a reassessment under Article 686, paragraph (1) or (3) has been made.

Where, after a determination under Article 686, paragraph (2) was made, a reassessment under paragraph (3) of that Article has been made.

In the case falling under the preceding paragraph (excluding where the proviso to that paragraph or paragraph (8) applies; the same applies in the following paragraph and paragraph (5)), where the tax amount to be paid or remitted prescribed in the preceding paragraph (in the case falling under item (ii) or (iii) of that paragraph, the amount obtained by adding to that tax amount the total of the tax amounts to be paid or remitted by a remittance return filed after the deadline for filing the remittance return relating to that municipal non-statutory ordinary tax before the amended return or reassessment prescribed in those items, or by a reassessment or determination under Article 686, paragraphs (1) to (3) (where there has been a reassessment reducing the tax amount to be paid or remitted, or a modification of the original disposition by a ruling or judgment on a request for review or action relating to a reassessment, the amount after deducting the amount equivalent to the tax amount of the portion thereby reduced; referred to as the "cumulative tax amount" in the following paragraph); referred to as the "cumulative tax amount after addition" in the following paragraph) exceeds 500,000 yen, the amount of additional charge for failure to file prescribed in the preceding paragraph is, notwithstanding that paragraph, the amount obtained by adding, to the amount calculated under that paragraph, the amount calculated by multiplying by 5 percent the amount equivalent to the excess portion (or, where the tax amount to be paid or remitted prescribed in that paragraph is less than the amount equivalent to the excess portion, that tax amount).

In the case falling under paragraph (2), where the cumulative tax amount after addition (where, among the facts forming the basis for calculating the cumulative tax amount after addition, there are facts found not to have been taken as the basis for calculating the tax amount preceding the remittance return, amended return, determination or reassessment prescribed in the items of that paragraph, for reasons not attributable to the taxpayer or special collection agent, the tax amount after deducting the amount calculated as provided by Cabinet Order as the tax amount based on those facts) exceeds 3,000,000 yen, the amount of additional charge for failure to file prescribed in that paragraph is, notwithstanding the preceding two paragraphs, the amount obtained by deducting, from the total of the amounts calculated by dividing the cumulative tax amount after addition into the amounts listed in the following items and multiplying each amount by the rate specified in the relevant item, the total of the amounts calculated by dividing the cumulative tax amount into the amounts listed in those items and multiplying each amount by the rate specified in the relevant item.

The amount equivalent to the portion not exceeding 500,000 yen: a rate of 15 percent

The amount equivalent to the portion exceeding 500,000 yen and not exceeding 3,000,000 yen: a rate of 20 percent

The amount equivalent to the portion exceeding 3,000,000 yen: a rate of 30 percent

In the case falling under paragraph (2), when any of the following items applies, the amount of additional charge for failure to file prescribed in that paragraph is, notwithstanding the preceding three paragraphs, the amount obtained by adding, to the amount calculated pursuant to those provisions, the amount calculated by multiplying the tax amount to be paid or remitted prescribed in paragraph (2) by a rate of 10 percent:

Where, during the period from the day before the day on which the remittance return was filed after the deadline for filing, the amended return was filed (limited to one filed in anticipation that a reassessment or determination based on the mayor of the municipality's examination would be made with respect to the municipal non-statutory ordinary tax relating to that remittance return or amended return; the same applies in item (ii)), or a reassessment or determination under Article 686, paragraphs (1) to (3) was made, back to the day five years before, an additional charge for failure to file (excluding one to which the provisions of the following paragraph apply; the same applies in item (ii)) or a substantial additional charge (referred to as "additional charge for failure to file, etc." in paragraph (3), item (i) of the following Article) has been collected with respect to a municipal non-statutory ordinary tax.

Where an additional charge for failure to file or a substantial additional charge (limited to one to which paragraph (2) of the following Article applies) (referred to as "specified additional charge for failure to file, etc." in this item and paragraph (3), item (ii) of the following Article) has been collected with respect to a municipal non-statutory ordinary tax for which tax liability or special collection obligation arose in the year preceding, and the year before that, the year that includes the day on which the tax liability or special collection obligation arose for the municipal non-statutory ordinary tax relating to the remittance return filed after the deadline for filing, the amended return filed, or the reassessment or determination under Article 686, paragraphs (1) to (3), or where it is found that a determination relating to specified additional charge for failure to file, etc. should be made.

In the case where a remittance return is filed after the deadline for filing or an amended return is filed, if the filing was not made with foreknowledge that a reassessment or determination based on an investigation by the mayor of the municipality would be made regarding the municipal non-statutory ordinary tax relating to that remittance return or amended return, the amount of additional charge for failure to file prescribed in paragraph (2) on the tax amount relating to that remittance return or amended return is, notwithstanding paragraphs (2) to (4), to be an amount equivalent to the amount calculated by multiplying that tax amount by a rate of 5 percent.

The mayor of the municipality must, without delay, notify the taxpayer or special collection agent when the mayor has determined the amount of additional charge for understatement to be collected under paragraph (1) or the amount of additional charge for failure to file to be collected under paragraph (2).

The provisions of paragraph (2) do not apply when a remittance return falling under paragraph (6) has been filed, if that filing was made in a case specified by Cabinet Order as one in which it is found that there was an intention to file by the deadline for filing the remittance return, and was made by the day on which one month elapses from the deadline for filing the remittance return.

In the case falling under Article 688, paragraph (1), if a taxpayer or special collection agent conceals or disguises all or part of the facts that are to be the basis for calculating the amount of the tax base, and files a remittance return, an amended return or the written request for reassessment prescribed in Article 20-9-3, paragraph (3) (referred to as the "written request for reassessment" in the following paragraph) based on the facts so concealed or disguised, the mayor of the municipality must, as provided by Cabinet Order, collect, in lieu of the amount of additional charge for understatement prescribed in Article 688, paragraph (1), an amount of substantial additional charge equivalent to the amount calculated by multiplying the deficiency amount due to reassessment, or the tax amount increased by the amended return, that is to be the basis for that calculation, by a rate of 35 percent.

In the case falling under Article 688, paragraph (2) (excluding the case where the proviso to Article 688, paragraph (2) applies), if a taxpayer or special collection agent conceals or disguises all or part of the facts that are to be the basis for calculating the amount of the tax base, and, based on the facts so concealed or disguised, does not file a remittance return by the deadline for filing, or files a remittance return after the deadline for filing, files an amended return, or files a written request for reassessment, the mayor of the municipality must, in lieu of the amount of additional charge for failure to file prescribed in Article 688, paragraph (2), collect an amount of substantial additional charge equivalent to the amount calculated by multiplying the tax amount that is to be the basis for that calculation by a rate of 40 percent.

In the case falling under the preceding two paragraphs, when any of the following items applies (item (i) only, in the case falling under paragraph (1)), the amount of substantial additional charge prescribed in the preceding two paragraphs is, notwithstanding those provisions, the amount calculated under those provisions plus the amount calculated by multiplying, at a rate of 10 percent in each case, the shortfall resulting from the reassessment or the amount of tax increased by the amended return that is to form the basis of the calculation prescribed in paragraph (1), when the case falls under paragraph (1), or the amount of tax that is to form the basis of the calculation prescribed in the preceding paragraph, when the case falls under the preceding paragraph.

In the case where, during the period up to the day five years before the day preceding the day on which, based on the concealed or disguised facts that are to be the basis for calculating the amount of the tax base prescribed in the preceding two paragraphs, the remittance return was filed after the deadline for filing, the amended return was filed, or a reassessment or determination under Article 686, paragraphs (1) to (3) was made, an additional charge for failure to file, etc. has been collected with respect to municipal non-statutory ordinary tax

In the case where a specified additional charge for failure to file, etc. has been collected with respect to municipal non-statutory ordinary tax for which tax liability or special collection obligation arose in the year preceding, and the year before the year preceding, the year containing the day on which the tax liability or special collection obligation arose for the municipal non-statutory ordinary tax relating to the remittance return filed after the deadline for filing, the amended return filed, or a reassessment or determination under Article 686, paragraphs (1) to (3), or it is found that a determination should be made regarding a specified additional charge for failure to file, etc.

In the case falling under the preceding two paragraphs, if there are grounds prescribed in Article 688, paragraph (6) with respect to the filing of the remittance return or amended return, the mayor of the municipality does not collect the amount of substantial additional charge calculated on the basis of the tax amount relating to that remittance return or the tax amount increased by that amended return.

When the mayor of the municipality has determined the amount of substantial additional charge to be collected under paragraph (1) or (2), the mayor must, without delay, notify the taxpayer or special collection agent.