When national tax cannot be paid at once: requirements for a deferral of collection (kanka no yuyo) and a deferral of payment (nozei no yuyo)There is a system to ask for more time when you can't pay taxes right away
If you cannot pay a national tax by its due date, a deferral of collection or a deferral of payment may be granted on application. In principle, either is for up to one year, and delinquent tax during the deferral period may be waived or reduced. A deferral of collection requires an application within 6 months of the due date.
- ○Applies: Paying at once would likely make it hard to continue the business or maintain living standards
- ○Applies: You have a sincere intention to pay
- ○Applies: You have no arrears other than the tax being deferred
- ○Applies: You have submitted the application within 6 months of the due date
- ○Applies: In principle, security is provided (not required in certain cases)
Key points
- A deferral of collection requires all 5 conditions: paying at once would likely make it hard to continue the business or maintain living standards; a sincere intention to pay; no arrears other than the taxes being deferred; an application within 6 months of the due date; and, in principle, provision of security.
- A deferral of payment covers cases where there is a fact such as a disaster or theft, illness or injury, closure or suspension of business, or a significant loss, and the tax cannot be paid at once (4 conditions).
- Security is not required if the deferred amount is JPY 1 million or less, the deferral period is 3 months or less, or there is no property that can be offered as security.
- The deferral period is the shortest period within one year in which the tax can be fully paid. If there is an unavoidable reason it can be extended, up to a total of 2 years including the initial period.
- Documents to submit include the deferral application, a statement of assets and income and expenditure (and for amounts over JPY 1 million, an asset list and a detailed statement of income and expenditure), and security-related documents.
What to do in practice
- As soon as you know that payment will be difficult, consult the collection staff at your local tax office early, even before the due date.
- Prepare the application documents and materials that show your income and expenditure and assets.
Because of illness, a disaster, or a big problem at work, you sometimes cannot pay taxes all at once. In that case, if you tell the tax office, you may be allowed to pay in installments over about one year. If you say nothing, your property may be seized, so it is important to talk to them early.
- 1. ConsultAs soon as you know you cannot pay, talk early to the tax office staff
- 2. ApplySubmit the application and documents showing your income and money situation
- 3. ApprovalIf approved, you get more time for a set period
- 4. Pay in partsAim to pay in full little by little, for example monthly
Points
- If you really cannot pay all at once, you may be able to get more time by applying.
- The time allowed is usually within one year, and you pay in parts such as monthly.
- If you leave it unpaid, your property can be seized, so talk to them early.
What the words mean
- Deferral (yuyo)
- Getting more time before the day you must pay
- Security (tanpo)
- Property and the like that you leave with them as proof that you will really pay
- National Tax Agency (NTA): National Tax Agency: No.9206 When you cannot pay national taxes by the due date
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.