National Tax Collection Act

National tax is to be collected from the total property of the taxpayer in preference to all public charges and other claims, except as otherwise provided in this Chapter.

Where a compulsory liquidation procedure is carried out with respect to a taxpayer's property, if a request for share distribution has been made for national tax, that national tax is to be collected, next after the expenses of that procedure, from the money to be distributed through that procedure (hereinafter in this Chapter referred to as "proceeds of realization").

Where a taxpayer's property has been realized through the delinquent tax collection procedure for national tax, the expenses for the delinquent tax collection procedure relating to that delinquent tax collection procedure are to be collected from the proceeds of realization in preference to other national tax, local tax and other claims, notwithstanding the provisions of the following Article, Articles 14 through 17 (Priority of National Tax for Which Security Was Taken, etc.), Article 18-2, paragraph (1) (Priority of Enterprise Value Charge Established on or before the Statutory Due Date for Tax Payment, etc.), Articles 19 through 21 (Priority of Statutory Liens, etc.), and Article 23 (Priority of Claims Secured by Provisional Registration Made on or before the Statutory Due Date for Tax Payment, etc.).

Consumption tax, etc. collected under Article 39 (Special Provisions for Collection of Consumption Tax, etc. in Case of Compulsory Liquidation) of the Act on General Rules for National Taxes or Article 8, paragraph (1), item (iii) or item (vii) (Collection of National Consumption Tax in Case of Public Sale or Sale, etc.) of the Act on Collection, etc. of National Consumption Tax Imposed on Imported Goods (Act No. 37 of 1955) (including the expenses for the delinquent tax collection procedure therefor) is, notwithstanding the provisions of Articles 12 through 17 (Priority of National Tax by Prior Seizure, etc.), Article 18-2, paragraph (1) (Priority of Enterprise Value Charges Created on or before the Statutory Due Date for Tax Payment, etc.) and Articles 19 through 21 (Priority of Statutory Liens, etc.), collected from the proceeds of realization of the goods pertaining to the removal, public sale or sale that gave rise to the collection, in priority to other national tax, local tax and other claims.

Where seizure has been made under the delinquent tax collection procedure for national tax on the property of a taxpayer, if a request for share distribution of other national tax or local tax is made, the national tax pertaining to that seizure is collected from the proceeds of realization in priority to the other national tax or local tax pertaining to the request for share distribution.

Where seizure has been made under the delinquent tax collection procedure for national tax or local tax on the property of a taxpayer, if a request for share distribution of national tax is made, the national tax pertaining to the request for share distribution is collected from the proceeds of realization next after the national tax or local tax pertaining to the seizure (excluding expenses to which the provisions of Article 9 (Priority of Expenses of Compulsory Liquidation Procedure) apply).

Where a compulsory liquidation procedure (excluding bankruptcy proceedings) has been carried out on the property of a taxpayer, if requests for share distribution of national tax and local tax are made, then from the proceeds of realization, the national tax pertaining to the earlier request for share distribution is collected in priority to the national tax or local tax pertaining to the later request for share distribution, and the national tax pertaining to the later request for share distribution is collected next after the national tax or local tax pertaining to the earlier request for share distribution.

Where there is property provided as security for national tax, notwithstanding the provisions of the preceding two Articles, that national tax is collected from the proceeds of realization in priority to other national tax and local tax.

Where a taxpayer has established a pledge on the taxpayer's property, if the pledge was established on or before the statutory due date for tax payment of the national tax (for the national taxes listed in the following items, the day specified in each such item, and for accessory tax and expenses for the delinquent tax collection procedure pertaining to such national tax, the day specified in each such item for the national tax that gave rise to their collection; hereinafter referred to as the "statutory due date for tax payment, etc."), that national tax is collected from the proceeds of realization next after the claim secured by the pledge.

National tax (including negligence tax) whose payable amount has been determined after the statutory due date for tax payment: the day on which the written notice of reassessment, written notice of determination or written notice of tax payment therefor was issued (for national tax under the self-assessment system that has been determined by a return, the day on which the return was filed);

National tax for which a demand under Article 38, paragraph (1) (Advance Demand) of the Act on General Rules for National Taxes (hereinafter referred to as an "advance demand") was made before the statutory due date for tax payment: the due date pertaining to that demand;

Income tax for the second period (meaning income tax payable in the second period prescribed in Article 104, paragraph (1) (Making Tax Prepayments) of the Income Tax Act (including where applied mutatis mutandis pursuant to Article 166 (Filing of Returns, Payment of Taxes, and Issuance of Refunds) of that Act; the same applies hereinafter in this item) under the provisions of that paragraph, and including income tax payable under the provisions of Article 115 (Special Provisions on the Deadlines for Making Tax Prepayments If the Taxpayer Will Become Absent From Japan) of that Act (including where applied mutatis mutandis pursuant to Article 166 of that Act) that is to be paid after the due date for payment of the income tax payable in the first period prescribed in Article 104, paragraph (1) of that Act): the due date for payment of the income tax payable in that first period;

Inheritance tax or gift tax for which the payable tax amount has been determined by reassessment or determination under Article 35, paragraph (2) (Special Provisions on Reassessment and Determination) of the Inheritance Tax Act: the day on which the written notice of reassessment or written notice of determination therefor was issued;

Land value tax (excluding that paid by the statutory tax return due date prescribed in Article 2, item (vii) (Definitions) of the Act on General Rules for National Taxes (hereinafter in this item referred to as the "statutory tax return due date") and that listed in item (i)): the day on which the written notice of reassessment or written notice of determination therefor was issued (for that determined by a return, the day on which the return was filed (if that day is before the statutory tax return due date for the land value tax, that statutory tax return due date));

Revaluation tax whose determined tax amount is paid in two or more payment periods, and which is paid in a payment period after the first: the first due date for payment of that revaluation tax;

National tax listed in Article 15, paragraph (3), items (ii) through (iv) and item (vi) (Establishment of Tax Liability and Determination of the Payable Tax Amount) of the Act on General Rules for National Taxes (excluding that paid on or before the statutory due date for tax payment): the day on which the written notice of tax payment therefor was issued (for national tax paid after the statutory due date for tax payment without receiving notice of tax payment, the day on which the payment was made);

National tax of which notice was given or which was notified under Article 24, paragraph (2) (Liability in Rem for Tax of a Holder of Property Transferred as Security) or Article 159, paragraph (3) (Preservative Seizure) (including where applied mutatis mutandis pursuant to Article 38, paragraph (4) of the Act on General Rules for National Taxes): the day on which the written notice or notification under those provisions was issued;

National tax of a decedent (including a person who has made a comprehensive testamentary gift; the same applies hereinafter) collected from the heir's own property (including a comprehensive legatee; the same applies hereinafter), and the heir's own national tax collected from the inherited property (limited to those for which the payable tax amount was determined before the day on which the inheritance (including a comprehensive testamentary gift; the same applies hereinafter) occurred (for national taxes listed in Article 15, paragraph (3), items (ii) through (iv) and item (vi) of the Act on General Rules for National Taxes, those for which the written notice of tax payment was issued before that day; the same applies hereinafter in this paragraph)): the day on which the inheritance occurred;

The own national tax of the corporation surviving after a merger or of another merged corporation pertaining to that merger, collected from the property that belonged to a corporation that ceased to exist by the merger (hereinafter referred to as a "merged corporation"), and the national tax of a merged corporation collected from the property of the corporation surviving after the merger (limited to those for which the payable tax amount was determined before the day of the merger): the day of the merger;

The own national tax of the splitting corporation collected from the property that has come to belong to the corporation that made the split (hereinafter in this item referred to as the "splitting corporation") upon finalization of a judgment invalidating that split, and the national tax of the splitting corporation pertaining to the obligation to pay jointly and severally prescribed in Article 9-2 (Joint and Several Obligation to Pay upon a Judgment Invalidating a Merger, etc. of a Corporation) of the Act on General Rules for National Taxes, collected from the splitting corporation's own property (limited to those for which the payable tax amount was determined before the day on which the judgment became final): the day on which the judgment became final;

The own national tax of the successor corporation in a company split (meaning a corporation that succeeded to a business by a split; hereinafter in this item referred to as the "successor corporation in a company split") collected from the property it succeeded from the corporation that made that split (hereinafter in this item referred to as "succeeded property"), the national tax pertaining to the successor corporation in a company split's joint and several liability for payment prescribed in Article 9-3 (Joint and Several Liability for Payment Related to a Corporate Split) of the Act on General Rules for National Taxes (hereinafter in this item referred to as "joint and several liability for payment") collected from the own property of the successor corporation in a company split, and the national tax of another corporation that made a split pertaining to that split, which pertains to the successor corporation in a company split's joint and several liability for payment, collected from the succeeded property of the successor corporation in a company split (limited to those for which the payable tax amount was determined before the day of the split): the day of the split; and

National tax payable as a secondary taxpayer or guarantor: the day on which the written payment notice under Article 32, paragraph (1) (General Rules on Secondary Tax Liability) or Article 52, paragraph (2) (Disposition of the Collateral and Enforcement of Guarantee) of the Act on General Rules for National Taxes was issued.

The provisions of the preceding paragraph apply to a pledge other than a pledge that can be registered (including registration and the electronic record prescribed in Article 2, paragraph (1) (Definitions) of the Electronically Recorded Monetary Claims Act (Act No. 102 of 2007); the same applies hereinafter) only where the pledgee proves the fact of its establishment to the enforcement agency in a compulsory liquidation procedure. In this case, for a pledge other than a pledge whose object is securities, the proof must be made by means of the following documents:

Notarized deed;

A private document bearing a dated seal affixed at a registry office or notary's office;

A document for which certification of contents has been received under Article 48, paragraph (1) (Certification of Contents) of the Postal Act (Act No. 165 of 1947);

A document delivered under Article 60, paragraph (4) (Preservation, etc. of Information Sufficient to Confirm the Identity of Information Recorded in Certified Electromagnetic Records) of the Notary Act (Act No. 53 of 1908) as applied mutatis mutandis pursuant to Article 7, paragraph (1) (Application Mutatis Mutandis of the Provisions of the Notary Act) of the Act for Enforcement of the Civil Code (Act No. 11 of 1898).

A pledge proved under the items of the preceding paragraph is deemed, for the purpose of applying the provisions of paragraph (1), to have been established on the day that is deemed to be a fixed date under the provisions of Article 5 (Instruments with Fixed Date) of the Act for Enforcement of the Civil Code.

A person holding a pledge under paragraph (1) may not exercise priority against a subsequent pledgee who takes priority over the national tax under the provisions of paragraph (1), within the scope of the amount that ranks after the national tax because the person did not make the proof under paragraph (2).