Local Tax Act

Where it is found that the amount to be collected remains insufficient even after carrying out delinquent tax collection procedures with respect to the local government levies listed in the following items of a person delinquent in payment, the person specified in item (i) has secondary tax liability for the local government levies relating to the delinquency to the extent of the property from which the profits prescribed in that item arose (including property acquired through a change in that property and property acquired on the basis of these (hereinafter in this Article and the following Article referred to as "acquired property")), the person specified in item (ii) to the extent of the property relating to the lease prescribed in that item (including acquired property), the person specified in item (iii) to the extent of the amount of the benefit received, and the person specified in item (iv) to the extent of the property used for the business prescribed in that item (including acquired property), respectively.

local government levies relating to the income levy of prefectural inhabitant tax or municipal inhabitant tax imposed under Article 24-2-2 or Article 294-2-2, local government levies relating to the corporation tax levy of prefectural inhabitant tax or municipal inhabitant tax that is imposed on the basis of the taxation of corporation tax imposed under Article 11 of the Corporation Tax Act, or local government levies relating to enterprise tax imposed under Article 72-2-3: the person to whom the profits that gave rise to the assessment of that income levy of prefectural inhabitant tax or municipal inhabitant tax, corporation tax or enterprise tax are considered to legally belong;

local government levies relating to the transfer levy of local consumption tax imposed under Article 72-79 (limited to the portion relating to the lease prescribed in Article 2, paragraph (1), item (viii) of the Consumption Tax Act (Act No. 108 of 1988)): the person who is considered to have legally made that lease which gave rise to the assessment of that transfer levy of local consumption tax;

local government levies relating to the income levy of prefectural inhabitant tax or municipal inhabitant tax, or local government levies relating to individual enterprise tax, imposed based on income calculated under Article 157 of the Income Tax Act (Act No. 33 of 1965); local government levies relating to the corporation tax levy of prefectural inhabitant tax or municipal inhabitant tax, or local government levies relating to corporate enterprise tax, imposed based on income calculated under Article 132, Article 132-2 or Article 132-3 of the Corporation Tax Act; or local government levies relating to corporate enterprise tax imposed under Article 72-43: the person deemed to have received a benefit from an act of the taxpayer that has been disallowed under those provisions (including an act forming the basis of the disallowed calculation);

local government levies relating to business office tax imposed under Article 701-33: the person deemed to carry on, in law, the business that gave rise to the assessment of that business office tax.

Where a person set forth in the following items holds important property indispensable to the conduct of the business of a taxpayer or special collection agent, and the income arising from that property is the income of the taxpayer or special collection agent, if the taxpayer or special collection agent is in arrears with local government levies relating to the business for which that property is provided and it is found that, even after delinquent tax collection procedures have been carried out in respect of those local government levies, the amount to be collected is still insufficient, the person set forth in each item bears secondary tax liability for the local government levies in arrears, up to the limit of that property (including acquired property).

where the taxpayer or special collection agent is an individual: a spouse or other relative who shares a livelihood with that person and receives income from the business operated by the taxpayer or special collection agent;

where the taxpayer or special collection agent is a family corporation in its condition at the time the relevant fact occurred: the shareholder or member who formed the basis of that determination.

Where a taxpayer or special collection agent has transferred a business to an individual or controlled company that has a special relationship with the taxpayer or special collection agent, such as a relative with whom the taxpayer or special collection agent shares a livelihood, and that is specified by Cabinet Order (a controlled company means a company that falls under the company prescribed in Article 67, paragraph (2) of the Corporation Tax Act where that taxpayer is selected as the shareholder or member forming the basis of the determination, and includes a corporation similar thereto), and the transferee carries on the same or a similar business, if it is found that, even after delinquent tax collection procedures have been carried out in respect of the local government levies of the taxpayer or special collection agent relating to that business, the amount to be collected is still insufficient, the transferee bears secondary tax liability for the local government levies in arrears, up to the limit of the value of the transferred property. However, this does not apply where the transfer was made one year or more before the statutory payment due date of the local government levies in arrears.

Where it is found that, even after delinquent tax collection procedures have been carried out in respect of the local government levies of a person delinquent in payment, the amount to be collected is still insufficient, and that this insufficiency is attributable to a transfer for no consideration or for consideration at a remarkably low price specified by Cabinet Order (excluding a transfer for the purpose of security), a remission of an obligation, or any other disposition giving a benefit to a third party that the person delinquent in payment made with regard to their property on or after the day one year before the statutory payment due date of those local government levies, the person who acquired a right or was relieved of an obligation through those dispositions bears secondary tax liability for the local government levies in arrears, up to the limit of the benefit that actually exists from those dispositions (or, where at the time of the disposition that person was a relative of the person delinquent in payment or another individual, or a family corporation (including a corporation similar thereto), that has a special relationship with the person delinquent in payment and is specified by Cabinet Order, up to the limit of the benefit received through those dispositions).

Where a stock company, limited partnership company or limited liability company that has evaded local government levies, or has received a refund of local government levies, by deception or other wrongful acts has not paid or remitted those local government levies, if it is found that, even after delinquent tax collection procedures have been carried out against that stock company, limited partnership company or limited liability company, the amount to be collected is still insufficient (in the case of a limited partnership company, limited to where it is found that, even after delinquent tax collection procedures have been carried out against the members with unlimited liability referred to in Article 11-2, the amount to be collected is still insufficient), the officer of that stock company, or the member with limited liability who executes the business of that limited partnership company or limited liability company, who committed those deception or other wrongful acts (limited to an officer or member with limited liability in the case where, if that officer or member with limited liability were selected as the shareholder or member forming the basis of the determination, that stock company, limited partnership company or limited liability company would fall under the company prescribed in Article 67, paragraph (2) of the Corporation Tax Act; hereinafter in this Article referred to as a "specified officer, etc.") bears secondary tax liability for the local government levies in arrears, up to the limit of whichever is lower of the amount of the local government levies evaded or refunded by those deception or other wrongful acts, or the value of the property of that stock company, limited partnership company or limited liability company that, on or after the time of the deception or other wrongful acts, the specified officer, etc. received by transfer, and of such property that the specified officer, etc. transferred (excluding any transferred as a transaction that is found, in light of the content of the transactions and other circumstances of that stock company, limited partnership company or limited liability company, to have been conducted with the counterparty to the transaction in accordance with ordinary terms of transaction and that gives rise to the amount of cost of sales, selling expenses or general and administrative expenses relating to the revenue of each business year of that stock company, limited partnership company or limited liability company, or as any other transaction specified by Cabinet Order).

Where the buyer of a motor vehicle prescribed in Article 145 or a light motor vehicle, etc. prescribed in Article 442, item (i) (hereinafter in this Article referred to as a "motor vehicle, etc.") is in arrears with local government levies relating to the automobile tax or light motor vehicle tax imposed on that motor vehicle, etc., if it is found that, even after delinquent tax collection procedures have been carried out in respect of that person's property, the amount to be collected is still insufficient, the seller of that motor vehicle, etc. bears secondary tax liability for the local government levies in arrears, up to the limit of the amount specified by Cabinet Order as the transfer price of that motor vehicle, etc.

Where the location of a motor vehicle, etc. and the address or residence of the buyer are unknown, if it is found that the seller of that motor vehicle, etc. has become unable to receive all or part of the price relating to the sale of that motor vehicle, etc., a prefecture or municipality is to exempt the seller of that motor vehicle, etc. from the obligation to pay the local government levies relating to the secondary tax liability under the preceding paragraph, up to the limit of the amount found to be unreceivable.

The preceding paragraph applies only where a declaration to the effect that that paragraph is to apply has been made by the seller of the motor vehicle, etc. and that declaration is found to be true.