National Tax Collection Act

Where a compulsory liquidation procedure has been carried out with respect to the property of a delinquent taxpayer, the district director must make a request for share distribution for the national tax in arrears, by means of a written request for share distribution, to the enforcement agency (where making a request for share distribution for national tax relating to a claim listed in Article 114, item (i) of the Bankruptcy Act (Act No. 75 of 2004) (Notification of Claims for Taxes, etc.), the court handling the bankruptcy case relating to that request for share distribution; the same applies in Article 84, paragraph (2) (Release of Request for Share Distribution)).

When the district director has made a request for share distribution, the district director must notify the delinquent taxpayer to that effect.

The provisions of Article 55 (Notice of Seizure to Pledgees, etc.) apply mutatis mutandis where a request for share distribution has been made.

The district director is not to make a request for share distribution where the delinquent taxpayer has other property that is easy to realize and is not the subject of the right of a third party, and it is found that the entire amount of the national tax can be collected from that property.

When the national tax relating to a request for share distribution has been extinguished by payment, appropriation, cancellation of a correction, or any other reason, the district director must release the request for share distribution.

The release of a request for share distribution is effected by notifying the enforcement agency relating to that request for share distribution to that effect.

The provisions of Article 55 (Notice of Seizure to Pledgees, etc.) and Article 82, paragraph (2) (Notice of Request for Share Distribution) apply mutatis mutandis where a request for share distribution has been released.

A creditor who is able to receive a distribution in a compulsory liquidation procedure may, when a request for share distribution has been made, demand of the district director that the request for share distribution be released, on the ground that all of the following items apply:

That the creditor cannot receive repayment of all or part of its own claim due to the request for share distribution; and

That the delinquent taxpayer has other property that is easy to realize and is not the subject of the right of a third party, and that the entire amount of the national tax relating to the request for share distribution can be collected from that property.

When a demand under the preceding paragraph has been made, the district director must release the request for share distribution if the director finds the demand appropriate, and must notify the person who made the demand to that effect if the director does not find it appropriate.

Where the district director is able to make a seizure pursuant to the provisions of Article 47 (Requirements for Seizure), and a seizure through a delinquent tax collection procedure has already been made of the following property of the delinquent taxpayer, a request for share distribution for that property may be made by delivering a participatory seizure document to the administrative agency, etc. that carried out the delinquent tax collection procedure, in lieu of the written request for share distribution under Article 82, paragraph (1) (Procedures for Request for Share Distribution).

Movables and securities;

Real property, ships, aircraft, motor vehicles, construction machinery, and small vessels; and

Telephone subscription rights.

When the district director has made a request for share distribution under the preceding paragraph (hereinafter referred to as "participatory seizure"), the district director must notify the delinquent taxpayer by means of a written notice of participatory seizure. In this case, where the property for which the participatory seizure was made is a telephone subscription right, the district director must also notify the third-party debtor to that effect.

When the district director has made a participatory seizure of property listed in paragraph (1), item (ii), the district director must commission the relevant authority to register the participatory seizure.

The provisions of Article 55 (Notice of Seizure to Pledgees, etc.) apply mutatis mutandis where a participatory seizure has been made.

Where a participatory seizure has been made, and the seizure through a delinquent tax collection procedure that had been made of the property subject to that participatory seizure is released, the participatory seizure (where there are two or more participatory seizures of property listed in paragraph (1), item (ii) of the preceding Article, the one registered earliest of them, and where there are two or more participatory seizures of other property, the one made earliest of them) takes effect as a seizure retroactively to the time specified in the relevant item, according to the category of property listed in the following items.

Movables and securities: the time when the participatory seizure document was delivered to the administrative agency, etc. that made the seizure through the delinquent tax collection procedure;

Real property (excluding the property listed in the following item), ships, aircraft, motor vehicles, construction machinery, and small vessels: the time when the written notice of participatory seizure was served on the delinquent taxpayer (where the registration of the participatory seizure was made before that service, the time when that registration was made);

Mining rights: the time when the registration of the participatory seizure was made;

Telephone subscription rights: the time when the written notice of participatory seizure was served on the third-party debtor.

Where the district director has received delivery of a participatory seizure document for seized movables or securities, and is to release the seizure of those movables or securities, the district director must hand them over to the administrative agency, etc. that made the participatory seizure that takes effect as a seizure under the provisions of the preceding paragraph. The same applies to seized motor vehicles, construction machinery, or small vessels that a collection official possesses pursuant to the provisions of Article 71, paragraph (3) (Seizure of Motor Vehicles, Construction Machinery, or Small Vessels).

Where the seized property under the delinquent tax collection procedure relating to a participatory seizure is not put up for realization within a reasonable period, the district director who made the participatory seizure may promptly issue a peremptory notice to the administrative agency, etc. that carried out that delinquent tax collection procedure to realize it.

The provisions of Articles 83 through 85 (Restrictions on and Release of Request for Share Distribution, etc.) apply mutatis mutandis to participatory seizure.

When the district director has released a participatory seizure of property for which a registration of participatory seizure was made, the district director must commission the relevant authority to cancel that registration.

When the district director has released the participatory seizure of a telephone subscription right, the district director must notify the third-party debtor to that effect.

In addition to what is provided for in the preceding two Articles and the preceding three paragraphs, necessary matters concerning procedures for participatory seizure are specified by Cabinet Order.

Seized property (excluding money, claims, and securities for which a claim is collected pursuant to the provisions of Article 57 (Collection of Claims Relating to Securities)) or specified real property under participatory seizure prescribed in paragraph (4) of the following Article (hereinafter referred to as "seized property, etc." in this Section) must be realized as provided for in this Section.

Among seized claims, those for which all or part of the due date for payment does not arrive within six months from the time when collection is to be attempted, and those found to be extremely difficult to collect, may be realized as provided for in this Section.

When the district director finds it appropriate, in view of their mutual use, to have the same purchaser purchase seized property, etc. together with other seized property, etc. (including that of a different delinquent taxpayer), the district director may put such seized property, etc. up for public auction together, or sell them together by private contract.

Where the real property relating to a participatory seizure (hereinafter referred to as "real property under participatory seizure") is still not put up for realization even after the peremptory notice under the provisions of Article 87, paragraph (3) (Effect of Participatory Seizure) has been issued, the district director who made the participatory seizure may, with the consent of the administrative agency, etc. that carried out the delinquent tax collection procedure referred to in that paragraph, make a decision to carry out realization of the real property under participatory seizure (hereinafter referred to as a "realization execution decision"); provided, however, that this does not apply where compulsory execution or an auction as an exercise of a security interest has commenced for the real property under participatory seizure, or where a provision of an Act relating to national taxes under which realization cannot be made is applicable.

Where the administrative agency, etc. that carried out the delinquent tax collection procedure referred to in the preceding paragraph has received a request for consent to the carrying out of realization by the district director who made the participatory seizure referred to in that paragraph, and finds the carrying out of that realization appropriate, it is to give its consent; provided, however, that this does not apply where it has already given consent to the carrying out of realization by another administrative agency, etc. that made a participatory seizure with respect to the real property seized through the delinquent tax collection procedure referred to in that paragraph.

A realization execution decision takes effect upon notification to the administrative agency, etc. that consented to the carrying out of realization by the district director who made the participatory seizure referred to in paragraph (1) (hereinafter referred to as the "administrative agency, etc. consenting to realization").

The district director who made a realization execution decision (referred to as the "district director executing realization" in the following Article) must promptly notify the delinquent taxpayer and the person who made a request for share distribution for the real property under participatory seizure (limited to that for which a realization execution decision has been made; hereinafter referred to as "specified real property under participatory seizure") to that effect.

The district director executing realization must revoke the realization execution decision in any of the following cases:

When the participatory seizure relating to the realization execution decision (hereinafter referred to as "specified participatory seizure") has been released;

When the seizure through a delinquent tax collection procedure by the administrative agency, etc. consenting to realization (excluding those specified by Cabinet Order; referred to as "specified seizure" in the following Article) has been released;

When the value of the specified real property under participatory seizure is no longer expected to exceed the total amount of the expenses for the delinquent tax collection procedure relating to the specified participatory seizure and the other national taxes, local taxes, and other claims that take priority over the national tax relating to the specified participatory seizure; or

In cases specified by Cabinet Order as being equivalent to the preceding three items.

The district director executing realization may revoke the realization execution decision in any of the following cases:

When, due to partial payment of the national tax relating to the specified participatory seizure, appropriation, partial cancellation of a correction, an increase in the value of the specified real property under participatory seizure, or any other reason, its value is found to significantly exceed the total amount of the national tax relating to the specified participatory seizure and the other national taxes, local taxes, and other claims that take priority over it;

When the delinquent taxpayer has offered other appropriate property that can be seized, and that property has been seized;

When, in the case where there has been no bid, etc. even after the specified real property under participatory seizure has been put up for public auction three times, it is found that there would be no purchaser even if it were put up for public auction again, and also that there is no prospect of sale by private contract, taking into consideration the shape and use of the specified real property under participatory seizure, restrictions on its use under laws and regulations, and other circumstances; or

In cases specified by Cabinet Order as being equivalent to the preceding three items.

The district director who has revoked a realization execution decision pursuant to the provisions of the preceding two paragraphs must promptly notify the delinquent taxpayer, the administrative agency, etc. consenting to realization, and the person who made a request for share distribution for the specified real property under participatory seizure (in the case of a revocation of a realization execution decision under the provisions of paragraph (1) (limited to the part relating to item (ii)), the delinquent taxpayer and the person who made a request for share distribution for the specified real property under participatory seizure) to that effect.

With respect to specified real property under participatory seizure, procedures for sale through public auction or other delinquent tax collection procedures carried out by the administrative agency, etc. consenting to realization may not be carried out until after the realization execution decision has been revoked pursuant to the provisions of paragraph (1) or paragraph (2).