Local Tax Act

In the case prescribed in Article 72-48-2, paragraph (8) or (9), an official of the Ministry of Internal Affairs and Communications who is designated by the Minister for Internal Affairs and Communications (hereinafter in this Article through Article 72-49-10 referred to as an "official designated by the Minister for Internal Affairs and Communications") may, where necessary for an examination for the reassessment or determination of the tax base amount and its apportionment, question the following persons, or inspect books and documents or other articles relating to the business of a person set forth in item (i) or (ii), or request the presentation or submission of those articles (including copies thereof).

a person liable for enterprise tax on the business conducted by a corporation, or a corporation found to have a tax liability;

a person found to be under an obligation to provide money or goods to the corporation prescribed in the preceding item;

a person other than those listed in the preceding two items who is found to be directly related to the assessment and collection of that enterprise tax.

A successor corporation in a company split relating to a company split in which a corporation listed in item (i) of the preceding paragraph is the splitting corporation, and a splitting corporation relating to a company split in which a corporation listed in that item is the successor corporation in a company split, are to be included among the persons found to be under an obligation to provide money or goods prescribed in item (ii) of that paragraph.

In the case referred to in paragraph (1), the official designated by the Minister for Internal Affairs and Communications must carry a certificate proving the official's status and present it when requested by a person concerned.

An official designated by the Minister for Internal Affairs and Communications may, as provided by Cabinet Order, retain articles submitted to the official pursuant to the provisions of paragraph (1).

The authority of an official designated by the Minister for Internal Affairs and Communications under paragraph (1) and the preceding paragraph must not be construed as having been granted for the purpose of criminal investigation.

When the Minister for Internal Affairs and Communications is to have an official designated by the Minister for Internal Affairs and Communications conduct, in an on-site examination of a person set forth in paragraph (1), item (i) of the preceding Article (hereinafter in this Article through Article 72-49-8 referred to as a "person liable for tax"), the questioning, inspection or request for presentation or submission under the preceding Article (hereinafter in this Article and Article 72-49-8 referred to as "questioning, inspection, etc."), the Minister is to notify in advance that person liable for tax (including, where that person liable for tax has a tax representative (meaning a certified public tax accountant or certified public tax accountant corporation that has submitted the document under Article 30 of the Certified Public Tax Accountant Act (Act No. 237 of 1951) (including as applied mutatis mutandis pursuant to Article 48-16 of that Act), an attorney who has given the notice under Article 51, paragraph (1) of that Act, or an attorney corporation or joint corporation of attorneys and registered foreign lawyers that has given the notice under paragraph (3) of that Article; the same applies hereinafter in this Subsection and the following Subsection), that tax representative) of that fact and of the following matters.

the date and time of commencement of the on-site examination in which questioning, inspection, etc. is conducted (hereinafter in this paragraph and paragraph (3) referred to simply as the "examination");

the place where the examination is to be conducted;

the purpose of the examination;

that it is an examination relating to the enterprise tax on the business conducted by a corporation;

the period subject to the examination;

the books and documents or other articles subject to the examination;

other matters specified by Cabinet Order as necessary for the proper and smooth conduct of the examination.

When a person liable for tax that has received the notification under the preceding paragraph requests, with reasonable grounds, a change to the matters set forth in item (i) or (ii) of that paragraph, the Minister for Internal Affairs and Communications is to endeavor to consult on those matters.

The provisions of paragraph (1) do not preclude an official designated by the Minister for Internal Affairs and Communications from conducting questioning, inspection, etc. regarding matters other than those set forth in items (iii) through (vi) of that paragraph relating to that examination, where that examination has made it necessary to do so for the purpose of an examination for the reassessment or determination of the tax base amount and its apportionment. In this case, the provisions of that paragraph do not apply to the questioning, inspection, etc. regarding those matters.

Where a person liable for tax has a tax representative, and the case falls under a case specified by Order of the Ministry of Internal Affairs and Communications as one in which there is the consent of that person liable for tax, it suffices to give the notice under paragraph (1) to that person liable for tax to that tax representative.

Where a person liable for tax has several tax representatives, and the case falls under a case specified by Order of the Ministry of Internal Affairs and Communications as one in which that person liable for tax has designated a representing tax representative from among those tax representatives, it suffices to give the notice under paragraph (1) to those tax representatives to that representing tax representative.

Notwithstanding paragraph (1) of the preceding Article, where the Minister for Internal Affairs and Communications finds, in light of information held by the Minister, including information on the content of the results of past examinations of the person liable for tax who is the other party to the examination or on the content of the business conducted by that person, that there is a risk of facilitating illegal or improper acts or making it difficult to ascertain accurate facts, or any other risk of hindering the proper conduct of the examination relating to the enterprise tax on the business conducted by a corporation, the notice under that paragraph is not required.

When, as a result of an on-site examination relating to the enterprise tax on the business conducted by a corporation, the Minister for Internal Affairs and Communications finds no need for a reassessment or determination of the total tax base amount or a correction or determination of the apportionment basis, the Minister is to notify, in writing, a person liable for tax who was the other party to the questioning, inspection, etc. in that examination that no need for a reassessment or determination of the total tax base amount or a correction or determination of the apportionment basis is found at that time.

When, as a result of an examination relating to the enterprise tax on the business conducted by a corporation, the Minister for Internal Affairs and Communications finds a need for a reassessment or determination of the total tax base amount or a correction or determination of the apportionment basis, the Minister is to explain to the person liable for tax concerned that a need for a reassessment or determination of the total tax base amount or a correction or determination of the apportionment basis is found at that time, and the reasons therefor.

Where a person liable for tax with respect to whom questioning, inspection, etc. were conducted through an on-site examination has a tax representative, and there is the consent of that person liable for tax, the notification or explanation under those provisions may be given to that tax representative in lieu of the notification or explanation to that person liable for tax under paragraph (1) or the preceding paragraph.

In addition to what is provided for in Article 72-49-5 through the preceding Article, matters necessary for the conduct of examinations relating to corporate enterprise tax by officials of the Ministry of Internal Affairs and Communications are specified by Cabinet Order.

In a case that falls under any of the following items, the person who committed the violation is to be punished by imprisonment for not more than one year or a fine of not more than 500,000 yen:

if the person refuses, obstructs or evades an inspection of books and documents or other articles under Article 72-49-5, paragraph (1);

if the person, in response to a request for presentation or submission of articles under Article 72-49-5, paragraph (1), fails to comply without justifiable grounds, or presents or submits books and documents or other articles (including copies thereof) in which false entries or records have been made;

if the person gives no answer to, or gives a false answer to, the questioning by an official designated by the Minister for Internal Affairs and Communications under Article 72-49-5, paragraph (1).

Where a representative of a corporation, or an agent, employee or other worker of a corporation or person, has committed a violation set forth in the preceding paragraph in connection with the business or property of that corporation or person, in addition to punishing the offender, the fine prescribed in that paragraph is to be imposed on that corporation or person.

Where the provisions of the preceding paragraph apply to an association or foundation without juridical personality, in addition to the representative or administrator of the association or foundation without juridical personality representing it in its procedural acts, the provisions of laws and regulations concerning criminal proceedings in the case where a corporation is the defendant or suspect apply mutatis mutandis.

The tax base for enterprise tax on the business conducted by an individual is the income from the individual's business in the year preceding the year in which the first day of the relevant fiscal year falls.

The tax base for enterprise tax in the case where an individual has abolished the business in the middle of a year is, in addition to the income prescribed in the preceding paragraph, the income from the individual's business from January 1 of that year to the day of abolition of the business.