Local Tax Act

When granting a deferral of collection, an ex officio suspension of realization or a suspension of realization upon application, the head of a local government must take security equivalent to the amount subject to the deferral or suspension, consisting of any of the following; provided, however, that this does not apply in cases specified by the Prefectural or Municipal Ordinance of that local government as cases where, in view of the amount, period and other circumstances of the deferral or suspension, it is unnecessary to take security.

national government bonds and local government bonds;

corporate bonds that the head of a local government finds reliable (including debentures issued by a juridical person established by a special Act) and other securities;

land;

buildings, standing trees, vessels, aircraft, motor vehicles and construction machinery that are covered by insurance;

railway foundations, factory foundations, mining foundations, tramway foundations, canal foundations, fishery foundations, port transport business foundations, road transport business foundations and tourist facility foundations;

a guarantee by a guarantor whom the head of a local government finds reliable.

When taking security under the preceding paragraph, if there is property seized in respect of the local government levies subject to the deferral or suspension, the amount of the security is limited to the amount obtained by deducting the value of that property from the amount subject to the deferral or suspension.

When the head of a local government has taken security under paragraph (1), if the head finds that payment or remittance of the amount subject to the deferral or suspension can no longer be secured owing to a decrease in the value of the property provided as security or in the resources of the guarantor or for any other reason, or if the head has released a seizure under Article 15-2-3, paragraph (2), Article 15-5-3, paragraph (1) or Article 15-6-3, paragraph (1), the head may request the taxpayer or special collection agent to provide additional security, change guarantors or take other action necessary to ensure the security.

Beyond what is provided for in the preceding three paragraphs, necessary matters concerning the provision of security are specified by Cabinet Order.

Where a taxpayer or special collection agent, in order to pay or remit the following local government levies, wishes to provide securities designated by the head of a local government (excluding securities that may be used for payment of revenue of a local government under Article 231-2, paragraph (3) or (5) of the Local Autonomy Act) and to entrust the collection of those securities and the payment or remittance of those local government levies with the money collected, a tax collection official may accept the entrustment only where the securities are found to be certain to be collectable in the near term; in this case, if collection of the securities requires expense, the person who wishes to make the entrustment must also provide an amount equivalent to that expense.

Local government levies subject to a deferral of collection, an ex officio suspension of realization or a suspension of realization upon application;

Local government levies whose due date for payment arrives on or after the payment date of the securities for which entrustment of payment or remittance is sought;

Local government levies in arrears (excluding those listed in item (i)) for which the taxpayer or special collection agent has a sincere intention to pay or remit and for which accepting the entrustment of payment or remittance is found advantageous for the collection of local government levies.

When a tax collection official has accepted entrustment under the preceding paragraph, the official must issue to the taxpayer or special collection agent a certificate of entrustment of payment or a certificate of entrustment of remittance in the form specified by Order of the Ministry of Internal Affairs and Communications.

When a tax collection official has accepted entrustment under paragraph (1), the official may, where necessary, re-entrust the collection, and the payment or remittance, to a financial institution found to be reliable.

Where entrustment under paragraph (1) has been made, if, as a result of the provision of the securities relating to the entrustment, it comes to be found unnecessary, for the local government levies listed in paragraph (1), item (i), to provide the security listed in the items of paragraph (1) of the preceding Article, the provision of that security may be deemed to have been made to the extent so found.

Where a taxpayer or special collection agent of any of the following local taxes is delinquent in the local government levies relating to those local taxes, if it is found that the collection of those local government levies to be imposed on the person thereafter cannot be secured, the head of a local government may, as security for those local government levies, designate an amount and a time limit and order the person to provide any of the things listed in the items of Article 16, paragraph (1) or money.

Prefectural tobacco tax;

Golf course use tax;

Light oil delivery tax;

Municipal tobacco tax;

Bathing tax;

Prefectural non-statutory ordinary tax, municipal non-statutory ordinary tax or non-statutory earmarked tax, in each case collected by the method of special collection.

The amount designated under the preceding paragraph is limited to an amount equivalent to three times the amount of those local government levies for the month preceding the month in which the provision is ordered (or, where that amount is less than the amount to be remitted or paid as those local government levies for the month in the previous year corresponding to the month in which the provision is ordered and for the following two months, the latter amount).

The provisions of Article 16, paragraphs (3) and (4) apply mutatis mutandis to the security under paragraph (1).

Where the head of a local government has ordered the provision of security for the local government levies prescribed in paragraph (1) under that paragraph, if the taxpayer or special collection agent fails to provide the ordered security by the designated time limit, the head may notify the taxpayer or special collection agent in writing that, in relation to those local government levies, a mortgage will be created on property of that person that may be the object of a mortgage, up to the amount designated under that paragraph.

When notice under the preceding paragraph has been given, the taxpayer or special collection agent who received the notice is deemed to have created the mortgage referred to in that paragraph. In this case, the head of a local government must request the relevant agency to register the creation of the mortgage.

In the case of the latter part of the preceding paragraph (excluding the case prescribed in the following paragraph), a document certifying that the written notice under paragraph (4) has reached the taxpayer or special collection agent referred to in that paragraph must be attached to the document relating to the request.

In the case of the latter part of paragraph (5), when making a request under Article 18 of the Real Property Registration Act (Act No. 123 of 2004) as applied mutatis mutandis in Article 16, paragraph (2) of that Act (including as applied mutatis mutandis under other laws and regulations), the head of a local government must provide, together with the information relating to the request, information certifying that the document under paragraph (4) has reached the taxpayer or special collection agent referred to in that paragraph. In this case, notwithstanding Article 116, paragraph (1) of that Act, the consent of the registration obligor is not required.

When security has been provided under paragraph (1) or a mortgage has been created under paragraph (5) (hereinafter referred to as "provision of security, etc."), if the period during which there is no delinquency in the local government levies relating to the order under paragraph (1) has continued for three consecutive months, the head of a local government must release the security.

When the head of a local government finds that provision of security, etc. has become unnecessary owing to a change in the resources or other circumstances of the taxpayer or special collection agent who has provided security, etc., the head may release it immediately, notwithstanding the preceding paragraph.