Local Tax Act

In addition to what is provided for in Articles 72-63 through the preceding Article, matters necessary for the conduct of examinations concerning individual 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 72-63, paragraph (1);

if the person, without justifiable grounds, fails to comply with a request for the presentation or submission of articles under Article 72-63, paragraph (1), or presents or submits books and documents or other articles (including copies thereof) containing false entries or records;

if the person fails to answer, or gives a false answer to, a question by an official designated by the Minister for Internal Affairs and Communications under Article 72-63, 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.

If a taxpayer fails to pay in full the local government levies relating to the enterprise tax by the due date for payment (in the case where reassessment or determination has been made of the enterprise tax on business conducted by a corporation, meaning the due date for payment of the shortfall tax amount; the same applies hereinafter to the enterprise tax on business conducted by a corporation), a prefectural tax collection official must issue a demand letter within 20 days after the due date for payment; provided, however, that this does not apply in the case of advance collection.

With respect to local government levies relating to the enterprise tax for which collection has been deferred under Article 15-4, paragraph (1), notwithstanding the main clause of the preceding paragraph, a demand letter may be issued only where they are not paid in full within the period for which collection was deferred.

A prefecture in special circumstances may, by a Prefectural Ordinance of that prefecture, provide for a period different from the period prescribed in paragraph (1).

When a prefectural tax collection official has issued a demand letter, the official may collect a fee in accordance with the Prefectural Ordinance of the prefecture concerned.

If a person delinquent in payment of the enterprise tax falls under any one of the following items, a prefectural tax collection official must seize the property of the person delinquent in payment with respect to the local government levies relating to that enterprise tax:

if the person delinquent in payment, having received a demand, fails to pay in full the local government levies relating to the enterprise tax pertaining to that demand by the day on which 10 days have elapsed counted from the day on which the demand letter was issued;

if the person delinquent in payment fails to pay in full the local government levies relating to the enterprise tax by the due date for payment designated by the notice concerning advance collection.

When the preceding paragraph is applied to a secondary taxpayer or guarantor, the term "demand letter" in item (i) of that paragraph is to read "written reminder to pay".

If, by the day on which the 10 days prescribed in paragraph (1), item (i) have elapsed after the due date for payment of the local government levies relating to the enterprise tax, a fact falling under any one of the items of Article 13-2, paragraph (1) has arisen with respect to a person delinquent in payment who has received a demand, a prefectural tax collection official may seize that person's property immediately.

If a compulsory liquidation procedure has been carried out with respect to the property of a person delinquent in payment, a prefectural tax collection official must make a request for share distribution to the enforcement agency (in the case of a request for share distribution of local government levies relating to the enterprise tax for a claim set forth in Article 114, item (i) of the Bankruptcy Act, the court handling the bankruptcy case relating to that request for share distribution) with respect to the delinquent local government levies relating to the enterprise tax.

If, in a case where a prefectural tax collection official is able to make a seizure under paragraphs (1) through (3), property of the person delinquent in payment that is listed in the items of Article 86, paragraph (1) of the National Tax Collection Act has already been seized by the delinquent tax collection procedure for other local government levies or national taxes, or by a disposition carried out in accordance with the rules for those delinquent tax collection procedures, the request for share distribution for that property may be made by participatory seizure.

Delinquent tax collection procedures for the local government levies relating to the enterprise tax, including those provided for in the preceding paragraphs, are governed by the rules for delinquent tax collection procedures prescribed in the National Tax Collection Act.

Dispositions under the preceding paragraphs may also be carried out outside the area of the prefecture concerned.

If a taxpayer of the enterprise tax, with the purpose of evading the execution of delinquent tax collection procedures, conceals or damages the taxpayer's property, disposes of it to the detriment of the prefecture, or commits an act of falsely increasing the burdens on that property, or alters its existing condition and thereby diminishes the value of that property or commits an act of increasing the expenses for the delinquent tax collection procedure relating to it, that person is to be punished by imprisonment for not more than three years or a fine of not more than 2,500,000 yen, or both.

The same applies where a third party in possession of the property of a taxpayer commits an act referred to in the preceding paragraph for the purpose of enabling the taxpayer to evade the execution of a delinquent tax collection procedure.

If a person, knowing the circumstances, becomes the counterparty of the taxpayer or of the third party in possession of the property in an act referred to in the preceding two paragraphs, the person who committed the violation as the counterparty is to be punished by imprisonment for not more than two years or a fine of not more than 1,500,000 yen, or both.

If a representative of a corporation, or an agent, employee or other worker of a corporation or a person, commits a violation prescribed in the preceding three paragraphs in connection with the business or property of that corporation or person, then in addition to punishing the offender, the fine prescribed in the relevant paragraphs is 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.

In the case of Article 72-68, paragraph (6), where a person violates, without justifiable grounds, an order of a prefectural tax collection official issued in accordance with the rules of the proviso to Article 72-2, paragraph (1) of the National Tax Collection Act, the person who committed the violation is to be punished by imprisonment for not more than three years or a fine of not more than 2,500,000 yen, or both.

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

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.

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, in the case referred to in Article 72-68, paragraph (6), the person fails to answer or makes a false statement in response to a question by a prefectural tax collection official conducted in accordance with the provisions of Article 141 of the National Tax Collection Act;

if, in the case referred to in Article 72-68, paragraph (6), the person refuses, obstructs or evades an inspection by a prefectural tax collection official, conducted in accordance with the provisions of Article 141 of the National Tax Collection Act, of books and documents (meaning the books and documents prescribed in that Article; the same applies in the following item) or other articles;

if, in the case referred to in Article 72-68, paragraph (6), the person, without justifiable grounds, fails to comply with a request by a prefectural tax collection official for the presentation or submission of articles, made in accordance with the provisions of Article 141 of the National Tax Collection Act, or presents or submits books and documents or other articles (including copies thereof) containing false entries or records.

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.

In the case of Article 72-68, paragraph (6), a person who makes a false statement regarding the matters to be stated to the prefectural governor in accordance with the example of the provisions of Article 99-2 of the National Tax Collection Act (including where applied mutatis mutandis pursuant to Article 109, paragraph (4) of that Act) is to be punished by imprisonment for not more than six months or a fine of not more than 500,000 yen.

A prefecture is, as provided by Cabinet Order, to pay to the municipalities within that prefecture, according to the category of prefecture listed in each of the following items, an amount obtained by multiplying the amount specified in the respective item by a rate specified by Cabinet Order and apportioning the result by the number of workers in each municipality based on the most recently published results of the economic structure statistics (limited to those specified by Order of the Ministry of Internal Affairs and Communications), which are fundamental statistics prescribed in Article 2, paragraph (4) of the Statistics Act (Act No. 53 of 2007).

a prefecture that, pursuant to Article 72-24-7, paragraph (9), imposes enterprise tax at a rate exceeding the standard tax rate prescribed in paragraphs (1) through (5) of that Article (hereinafter in this item referred to as the "standard tax rate"): the amount obtained by deducting, from the amount equivalent to the amount of enterprise tax on business conducted by corporations paid to that prefecture, the amount obtained by multiplying that amount by the rate calculated as provided by Cabinet Order as the proportion of the amount equivalent to the portion that that prefecture imposes in excess of the standard tax rate;

a prefecture other than the prefecture listed in the preceding item: the amount equivalent to the amount of enterprise tax on business conducted by corporations paid to that prefecture.