Local Tax Act

In the case where a return is filed by the deadline for filing (including the case where a return is filed after the deadline for filing and the proviso to paragraph (2) or paragraph (8) applies; the same applies hereinafter in this paragraph), when a reassessment under Article 701-58, paragraph (1) or (3) has been made or an amended return has been filed, the head of the designated city, etc. must, except where the head finds that there are justifiable grounds for the error in the tax amount relating to the return or amended return before that reassessment or amended return, collect an amount of additional charge for understatement equivalent to the amount calculated by multiplying the tax deficiency due to that reassessment or the tax amount increased by that amended return (hereinafter in this paragraph referred to as "covered tax shortfall, etc.") by a rate of 10 percent (where the covered tax shortfall, etc. (where, before that reassessment or amended return, a reassessment or the filing of an amended return was made regarding the business office tax relating to that reassessment or amended return, the amount obtained by adding to it the total of the tax deficiency due to that earlier reassessment or the tax amount increased by that earlier amended return (where it has been found that there were justifiable grounds for the error in the tax amount relating to the return or amended return before that earlier reassessment or amended return, the amount obtained by deducting the tax deficiency due to that earlier reassessment or the tax amount increased by that earlier amended return, and where, regarding that business office tax, there has been a reassessment reducing the tax amount payable, or a change to the original disposition by a ruling or judgment on a request for review or an action relating to a reassessment, the amount obtained by deducting the amount equivalent to the tax amount of the portion reduced thereby)) exceeds the greater of the amount equivalent to the tax amount relating to the return in the case where the return was filed by the deadline for filing and 500,000 yen, the amount obtained by adding the amount calculated by multiplying the amount equivalent to the excess portion (where the covered tax shortfall, etc. is less than the amount equivalent to the excess portion, the covered tax shortfall, etc.) by a rate of 5 percent); provided, however, that this does not apply where an amended return has been filed and the filing was not made with foreknowledge that a reassessment under Article 701-58, paragraph (1) or (3) would be made regarding the amount of business office tax relating to that amended return.

In any of the cases set forth in the following items, the head of the designated city, etc. must collect an amount of additional charge for failure to file equivalent to the amount calculated by multiplying the tax amount payable under the return, determination or reassessment prescribed in the relevant item by a rate of 15 percent; provided, however, that this does not apply where it is found that there are justifiable grounds for the return not having been filed by the deadline for filing.

Where a return is filed after the deadline for filing, or a determination under Article 701-58, paragraph (2) has been made

Where, after a return has been filed after the deadline for filing, an amended return is filed or a reassessment under Article 701-58, paragraph (1) or (3) is made

Where, after a determination under Article 701-58, paragraph (2) has been made, an amended return is filed or a reassessment under Article 701-58, paragraph (3) is made

In the case falling under the preceding paragraph (excluding the case where the proviso to that paragraph or paragraph (8) applies; the same applies in the following paragraph and paragraph (5)), where the tax amount payable prescribed in the preceding paragraph (in the case falling under item (ii) or (iii) of that paragraph, the amount obtained by adding the total of the tax amounts payable under a return filed after the deadline for filing the return relating to that business office tax, or under a reassessment or determination under Article 701-58, paragraphs (1) to (3), made before the amended return or reassessment prescribed in those provisions (where there has been a reassessment reducing the tax amount payable, or a change to the original disposition by a ruling or judgment on a request for review or an action relating to a reassessment, the amount obtained by deducting the amount equivalent to the tax amount of the portion reduced thereby; referred to as the "cumulative paid tax amount" in the following paragraph); referred to as the "cumulative paid 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, to be the amount obtained by adding, to the amount calculated under that paragraph, the amount calculated by multiplying the amount equivalent to the excess portion (where the tax amount payable prescribed in the preceding paragraph is less than the amount equivalent to the excess portion, that tax amount payable) by a rate of 5 percent.

In the case falling under paragraph (2), where the cumulative paid tax amount after addition (where, among the facts that formed the basis for calculating that cumulative paid tax amount after addition, there is any that is found not to have been included in the basis for calculating the tax amount before the return, determination or reassessment prescribed in each item of that paragraph for reasons not attributable to the taxpayer, the tax amount after deducting the amount calculated, as provided by Cabinet Order, as the tax amount based on that fact) exceeds 3,000,000 yen, the amount of additional charge for failure to file prescribed in that paragraph is, notwithstanding the preceding two paragraphs, to be the amount obtained by deducting, from the total of the amounts calculated by dividing the cumulative paid 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 paid 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), if any of the following items applies, the amount of the 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 under those provisions, the amount calculated by multiplying the tax amount to be paid as prescribed in paragraph (2) by a rate of 10 percent:

In the case where, during the period up to the day five years before the day preceding the day on which the return was filed after the deadline for filing or the amended return was filed (limited to a return or amended return filed with foreknowledge that a reassessment or determination under Article 701-58, paragraphs (1) to (3) would be made regarding the business office tax relating to that return or amended return; the same applies in the following item and item (iii)), or a reassessment or determination under paragraphs (1) to (3) of that Article was made, an additional charge for failure to file (excluding one to which the following paragraph applies; the same applies in the following item) or a substantial additional charge (referred to as "additional charge for failure to file, etc." in Article 701-62, paragraph (3), item (i)) has been collected with respect to business office tax

In the case where an additional charge for failure to file or a substantial additional charge (limited to one to which Article 701-62, paragraph (2) applies) (hereinafter referred to as "specified additional charge for failure to file, etc." in this paragraph and Article 701-62, paragraph (3)) has been collected with respect to business office tax imposed on a business conducted by a corporation for a business year that began in the year preceding, or the year before the year preceding, the year containing the first day of the business year relating to the return filed after the deadline for filing, the amended return filed, or a reassessment or determination under Article 701-58, 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 where a specified additional charge for failure to file, etc. has been collected with respect to business office tax imposed on a business conducted by an individual whose taxation period began in the year preceding, or the year before the year preceding, the year containing the first day of the taxation period of the individual relating to the return filed after the deadline for filing, the amended return filed, or a reassessment or determination under Article 701-58, 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 where a 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 under Article 701-58, paragraphs (1) to (3) would be made regarding the business office tax relating to that return or amended return, the amount of additional charge for failure to file prescribed in paragraph (2) on the tax amount relating to that 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 head of a designated city, etc. must, without delay, notify the taxpayer when the head 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 where the return falling under paragraph (6) was filed 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, and was filed by the day on which one month elapses from the deadline for filing.

In the case falling under paragraph (1) of the preceding Article, if a taxpayer 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 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 head of the designated city, etc. must, as provided by Cabinet Order, collect, in lieu of the amount of additional charge for understatement prescribed in paragraph (1) of the preceding Article, an amount of substantial additional charge equivalent to the amount calculated by multiplying the tax deficiency 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 paragraph (2) of the preceding Article (excluding the case where the proviso to that paragraph applies), if a taxpayer 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 return by the deadline for filing, or files a return after the deadline for filing, files an amended return, or files a written request for reassessment, the head of the designated city, etc. must, in lieu of the amount of additional charge for failure to file prescribed in that paragraph, 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, if any of the following items (item (i) in the case falling under paragraph (1)) applies, the amount of substantial additional charge prescribed in the preceding two paragraphs is, notwithstanding those provisions, to be the amount obtained by adding, to the amount calculated under those provisions, the amount calculated by multiplying, by a rate of 10 percent, the tax deficiency due to reassessment or the tax amount increased by the amended return that is to be the basis for calculation prescribed in paragraph (1) in the case falling under paragraph (1), or the tax amount that is to be the basis for calculation prescribed in paragraph (2) in the case falling under paragraph (2), respectively.

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 return was filed after the deadline for filing, the amended return was filed, or a reassessment or determination under Article 701-58, paragraphs (1) to (3) was made, an additional charge for failure to file, etc. has been collected with respect to business office tax

In the case where a specified additional charge for failure to file, etc. has been collected with respect to business office tax imposed on a business conducted by a corporation for a business year that began in the year preceding, or the year before the year preceding, the year containing the first day of the business year relating to the return filed after the deadline for filing, the amended return filed, or a reassessment or determination under Article 701-58, 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 where a specified additional charge for failure to file, etc. has been collected with respect to business office tax imposed on a business conducted by an individual whose taxation period began in the year preceding, or the year before the year preceding, the year containing the first day of the taxation period of the individual relating to the return filed after the deadline for filing, the amended return filed, or a reassessment or determination under Article 701-58, 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 three paragraphs, if there are grounds prescribed in the proviso to paragraph (1) or paragraph (6) of the preceding Article with respect to the filing of the return or amended return, the head of the designated city, etc. does not collect the amount of substantial additional charge calculated on the basis of the tax amount payable under that return or the tax amount increased by that amended return.

When the head of a designated city, etc. has determined the amount of substantial additional charge to be collected under paragraph (1) or (2), the head must, without delay, notify the taxpayer.