National Tax Collection Act

When the district director intends to collect a taxpayer's national tax from a secondary taxpayer, the district director must give notice to that person, as provided by Cabinet Order, by a written payment notice stating the amount to be collected, the payment deadline, and other necessary particulars. In this case, the district director must notify the district director who has jurisdiction over the location of that person's domicile or residence to that effect.

If the secondary taxpayer does not pay the national tax in full by the payment deadline under the preceding paragraph, the district director must demand payment by a written payment reminder, except where making a demand under the provisions of Article 38, paragraphs (1) and (2) (Advance Demand) of the Act on General Rules for National Taxes as applied mutatis mutandis pursuant to the following paragraph. In this case, the written payment reminder is to be issued within 50 days from the payment deadline, except where otherwise provided in Acts relating to national tax.

The provisions of Article 38, paragraphs (1) and (2) of the Act on General Rules for National Taxes, Chapter IV, Section 1 (Tax Payment Grace Period) of that Act, and Article 55 (Consignment of Payment) of that Act apply mutatis mutandis to the case under paragraph (1).

Realization of the property of a secondary taxpayer may be carried out only after the property of the taxpayer under paragraph (1) has been put up for realization, except where there is a risk that the value of that property will decrease significantly.

The provisions of this Chapter do not preclude the exercise by a secondary taxpayer of a right of reimbursement against the taxpayer under paragraph (1).

Where a general partnership company or limited partnership company, or a certified public tax accountant corporation, attorney corporation, foreign law solicitor corporation, attorney-foreign law solicitor joint corporation, audit corporation, patent attorney corporation, judicial scrivener corporation, administrative scrivener corporation, social and labour insurance consultant corporation, or land and buildings investigator corporation is delinquent in national tax, and it is found that the amount to be collected will still be insufficient even if delinquent tax collection procedures are executed against its property, its members (in the case of a limited partnership company and an audit corporation, members with unlimited liability) bear secondary tax liability for the national tax relating to that delinquency. In this case, those members are jointly and severally liable.

Where a corporation has been dissolved and has distributed or delivered its residual property without paying the national tax that is to be imposed on it or that it is to pay, only where it is found that the amount to be collected will still be insufficient even if delinquent tax collection procedures are executed against that corporation, the liquidators and the persons who received the distribution or delivery of the residual property (excluding persons subject to the application of the provisions of the preceding Article; the same applies hereinafter in this paragraph) bear secondary tax liability for the national tax relating to that delinquency; provided, however, that a liquidator is liable to the extent of the value of the property distributed or delivered, and a person who received the distribution or delivery of the residual property is liable to the extent of the value of the property received.

Where a trust prescribed in Article 175 (Grounds for Commencement of Liquidation) of the Trust Act (Act No. 108 of 2006) has terminated and the liquidating trustee for that trust (meaning the liquidating trustee prescribed in Article 177 (Duties of Liquidating Trustee) of that Act; the same applies hereinafter in this paragraph) has provided property belonging to the trust property to residual property beneficiaries, etc. (meaning the residual property beneficiaries, etc. prescribed in Article 182, paragraph (2) (Vesting of Residual Property) of that Act; the same applies hereinafter in this paragraph) without paying the national tax that is to be imposed on that liquidating trustee or that the liquidating trustee is to pay (limited to national tax for which the obligation to pay constitutes an obligation borne by the trust property (meaning the obligation borne by the trust property prescribed in Article 2, paragraph (9) (Definitions) of that Act); the same applies hereinafter in this paragraph), only where it is found that the amount to be collected will still be insufficient even if delinquent tax collection procedures are executed against that liquidating trustee, the liquidating trustee (limited to a liquidating trustee who bears responsibility for performing the obligation to pay that national tax solely with property belonging to the trust property; hereinafter in this paragraph referred to as the "specified liquidating trustee") and the residual property beneficiaries, etc. bear secondary tax liability for the national tax relating to that delinquency; provided, however, that the specified liquidating trustee is liable to the extent of the value of the property provided, and the residual property beneficiaries, etc. are liable to the extent of the value of the property received.

Where a delinquent taxpayer holds shares or capital contributions in a company that would fall under the company prescribed in Article 2, item (x) (Definition of Family Corporation) of the Corporation Tax Act (Act No. 34 of 1965) if that person were selected as the shareholder or member forming the basis of the determination (hereinafter referred to as a "family corporation"), and there is a reason set out in the following items with respect to those shares or capital contributions, and it is found that the national tax to be collected will still be insufficient even if delinquent tax collection procedures are executed against that person's property (excluding those shares or capital contributions), that company bears secondary tax liability for the national tax relating to that delinquency, to the extent of the value of the shares or capital contributions held (excluding those acquired one year or more before the statutory due date for tax payment of the national tax relating to that delinquency (for national tax to be paid by way of an amended return or reassessment that reduces the amount of tax by an amount equivalent to the amount of a refund of national tax under the provisions of Acts relating to national tax, and for the accessory tax and expenses for the delinquent tax collection procedure relating to that national tax, the date on which the return, reassessment, or determination that was the cause of that refund was made, and for negligence tax, the date on which the tax liability was established; the same applies hereinafter in this Chapter)).

that even after the shares or capital contributions have been put up for realization again, there is no purchaser;

that, because there are restrictions on the transfer of the shares or capital contributions under an Act or the articles of incorporation, or because share certificates have not been issued, there is an obstacle to transferring them.

The value of the shares or capital contributions of the family corporation under the preceding paragraph is the amount calculated on the basis of the amount obtained by dividing the amount remaining after deducting the total amount of liabilities from the total amount of assets of that company at the time of issuing the written payment notice under Article 32, paragraph (1) (Notice to Secondary Taxpayers) by the number of those shares or capital contributions.

The determination of whether a company is a family corporation under paragraph (1) is made according to its current condition at the time of issuing the written payment notice under Article 32, paragraph (1).

Where it is found that the amount to be collected will still be insufficient even if delinquent tax collection procedures are executed with respect to the delinquent taxpayer's national tax listed in the following items, the person specified in item (i) bears secondary tax liability for the national tax relating to that delinquency to the extent of the property from which the profits prescribed in that item arose (including property acquired through a change in that property and property acquired on the basis of these properties (hereinafter in this Article and the following Article referred to as "acquired property")), the person specified in item (ii) to the extent of the property relating to the lending prescribed in that item (including acquired property), and the person specified in item (iii) to the extent of the amount of the benefit received.

National tax imposed under Article 12 (Principle of Taxing the Actual Earner) or Article 158 (Presuming the Attribution of Income of a Place of Business) of the Income Tax Act, or Article 11 (Principle of Taxing the Actual Earner) of the Corporation Tax Act: the person to whom the profits that were the basis of the imposition of that national tax are regarded as legally belonging

National tax imposed under Article 13 (Substantive Determination of the Person Who Made a Transfer, etc. of Assets or a Specified Purchase) of the Consumption Tax Act (Act No. 108 of 1988) (limited to the portion relating to the lending prescribed in Article 2, paragraph (1), item (viii) (Definitions) of that Act): the person who is regarded as having legally made the lending that was the basis of the imposition of that national tax

National tax imposed under Article 157 (Negation of Actions or Calculations by a Family Company, etc.) or Article 168-2 (Denial of Acts or Calculations Related to Income Attributable to a Permanent Establishment of a Nonresident) of the Income Tax Act, Article 132 (Rejection of Acts or Calculations by Family Companies), Article 132-2 (Rejection of Acts or Calculations Pertaining to Organizational Restructuring), Article 132-3 (Rejection of Acts or Calculations Pertaining to Group Tax Sharing Corporations), or Article 147-2 (Rejection of Acts or Calculations Pertaining to Income Attributable to a Permanent Establishment of a Foreign Corporation) of the Corporation Tax Act, Article 64 (Negation of Actions or Calculations by a Family Company, etc.) of the Inheritance Tax Act, or Article 32 (Negation of Actions or Calculations by a Family Company, etc.) of the Land-holding Tax Act (Act No. 69 of 1991): the person who is considered to have received a benefit from the act of the taxpayer that was denied under these provisions (including the act that was the basis of the calculation that was denied)