National Tax Collection Act

Where a taxpayer has established a mortgage on the taxpayer's property on or before the statutory due date for tax payment, etc. of national tax, that national tax is collected from the proceeds of realization next after the claim secured by the mortgage.

Where a taxpayer has acquired property on which a pledge or mortgage has been established, national tax is collected from the proceeds of realization next after the claim secured by the pledge or mortgage.

The provisions of the preceding paragraph apply to a pledge other than a pledge that can be registered only where the pledgee proves, to the enforcement agency in a compulsory liquidation procedure, the fact that the pledge was established before the acquisition under that paragraph. In this case, the provisions of Article 15, paragraph (2), second sentence and paragraph (3) (Proof of Pledges Having Priority) apply mutatis mutandis.

The principal amount of a claim secured by a pledge or mortgage that takes priority over national tax under the provisions of the preceding three Articles is limited to the amount of the claim at the time when the pledgee or mortgagee received notice of the seizure or request for share distribution pertaining to that national tax; provided, however, that this does not apply where it would prejudice the rights of a person holding another claim that takes priority over that national tax.

If registration of an increase in the amount of the claim or the maximum amount secured by a pledge or mortgage is made, the provisions of the preceding three Articles apply as if, at the time of that registration, a pledge or mortgage had been newly created in respect of the increased amount of the claim or maximum amount.

Where a taxpayer has established an enterprise value charge on the taxpayer's property on or before the statutory due date for tax payment, etc. of national tax, that national tax is collected from the proceeds of realization next after the claim secured by the enterprise value charge.

The principal amount of a specified secured claim prescribed in Article 6, paragraph (4) (Definitions) of the Act on the Promotion of Business Financing, etc. (Act No. 52 of 2024) that is secured by an enterprise value charge that takes priority over national tax under the provisions of the preceding paragraph is limited to the amount of the claim at the time when the holder of the enterprise value charge received notice of the seizure or request for share distribution pertaining to that national tax; provided, however, that this does not apply where it would prejudice the rights of a person holding another claim that takes priority over that national tax.

Where any of the following statutory liens exists on a taxpayer's property, national tax is collected from the proceeds of realization next after the claim secured by that statutory lien:

Statutory liens for preservation of real property;

Statutory liens for construction work for real property;

A statutory lien under paragraph (1) (Statutory Liens on Standing Trees) of the Act on Statutory Liens on Standing Trees (Act No. 56 of 1910);

A statutory lien under Article 802 (Statutory Liens on Cargo, etc.) or Article 842 (Statutory Liens on Ships) of the Commercial Code (Act No. 48 of 1899), Article 95, paragraph (1) (Statutory Liens on Ships) of the Act on Limitation of Shipowner Liability (Act No. 94 of 1975), or Article 55, paragraph (1) (Statutory Liens on Ships) of the Act on Liability for Oil Pollution Damage (Act No. 95 of 1975);

The statutory lien of a person who has preserved movables for a claim that takes priority over national tax or for national tax.

The provisions of items (iii) through (v) of the preceding paragraph (excluding statutory liens listed in item (iii) of that paragraph that have been registered) apply only where the holder of the statutory lien proves to the enforcement agency, in a compulsory liquidation procedure, the fact that the statutory lien exists.

Where any of the following statutory liens has existed on a taxpayer's property since on or before the statutory due date for tax payment, etc. of national tax, or where the taxpayer has acquired property subject to such a statutory lien, that national tax is collected from the proceeds of realization next after the claim secured by that statutory lien:

A statutory lien for lease of real property, or any other special statutory lien on movables that ranks equally with a pledge or ahead of these (excluding the statutory liens listed in paragraph (1), items (iii) through (v) of the preceding Article);

Statutory liens for sales of real property;

A statutory lien prescribed in Article 12 (Statutory Liens of Lessors) of the Act on Land and Building Leases (Act No. 90 of 1991) or Article 7 (Statutory Liens of Lessors, etc.) of the Act on Temporary Treatment of Land and Building Lease in Relation to Requisitioned Real Properties (Act No. 138 of 1956);

A registered general statutory lien.

The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to the statutory lien listed in item (i) of the preceding paragraph.

Where a right of retention exists on the property of a taxpayer, if the property is realized by the delinquent tax collection procedure, the national tax is collected from the proceeds of realization next after the claim that was secured by the right of retention. In this case, that claim is to be distributed in priority to a claim secured by a pledge, mortgage, statutory lien, or the provisional registration for security prescribed in Article 23, paragraph (1) (Priority of Claims Secured by Provisional Registrations Made on or before the Statutory Due Date for Tax Payment, etc.).

The provisions of the preceding paragraph apply only where the holder of the right of retention proves the fact that the right of retention exists to the administrative agency, etc. in the delinquent tax collection procedure.

Where a taxpayer does not have other sufficient property to appropriate to national tax, if the taxpayer has transferred property on which the taxpayer established a pledge or mortgage registered after the statutory due date for tax payment, etc. of that national tax, then only where it is found that the national tax would still be insufficient even if the delinquent tax collection procedure were executed against the taxpayer's property, that national tax may be collected from the pledgee or mortgagee, out of the amount they are to receive by distribution in respect of the claim secured by the pledge or mortgage in the compulsory liquidation procedure for the property relating to the transfer.

The amount that may be collected under the preceding paragraph may not exceed the amount obtained by deducting the amount listed in item (ii) from the amount listed in item (i).

The amount that the claim prescribed in the preceding paragraph is to receive by distribution from the proceeds of realization of the property relating to the transfer referred to in that paragraph;

The amount that the claim referred to in the preceding paragraph would receive by distribution if the property referred to in the preceding item were deemed to be the taxpayer's property and a request for share distribution of the national tax referred to in the preceding paragraph had been made for the proceeds of realization of that property.

In order to collect national tax under the provisions of paragraph (1), the district director may subrogate to the pledgee or mortgagee referred to in that paragraph and enforce the pledge or mortgage.

When the district director intends to collect national tax under the provisions of paragraph (1), the district director must notify the pledgee or mortgagee to that effect.

Where a compulsory liquidation procedure has been carried out for the property relating to the transfer referred to in paragraph (1), the district director may make a request for share distribution to the enforcement agency for the national tax in the amount that may be collected under the provisions of that paragraph.