When you cannot pay national taxes by the due date: an overview of the deferment of realization and the deferment of tax paymentThere is a system that lets you wait when you cannot pay tax right away
When national taxes cannot be paid in one sum by the due date, a deferment of payment may be granted on application to the tax office if certain requirements are met. The National Tax Agency explains the "deferment of realization", which holds off the seizure and sale of assets, and the "deferment of tax payment", which is based on grounds such as disaster, illness, closure of a business or a significant loss. Even when a deferment is granted, the treatment of delinquent tax (the charge corresponding to interest) is involved, so it is recommended to consult the collection section of the tax office with jurisdiction before the due date approaches.
Key points
- When national taxes cannot be paid in one sum, there is a system under which payment is deferred on application to the tax office if the requirements are met (National Tax Agency No. 9206)
- The deferment of realization has requirements such as that paying the tax in one sum would be likely to make it difficult to continue the business or maintain living. One requirement is that the application is made within 6 months of the due date
- The period of a deferment of realization is in principle within one year, and the deferred tax is paid in monthly installments during that period. If there are unavoidable circumstances, it may be extended, together with the original period, to a maximum of two years
- The deferment of tax payment requires facts such as disaster, illness, closure or suspension of the business, or a significant business loss. Its feature is that delinquent tax during the deferment period is exempted or reduced
- Delinquent tax arises from the day after the due date, so consult the collection section of the tax office with jurisdiction as early as possible. The application is made by submitting the application form and a statement of the state of assets and income, and can also be done through e-Tax
What to do in practice
- Confirm the due date and the amount payable, and check in your cash flow table the expected effect of the payment on your balance
- Before the due date, consult the collection section of the tax office with jurisdiction, for example by phone, and confirm the necessary documents (application form, statement of assets and income and so on)
- If a deferment is granted, keep making the set installment payments without fail
The rule is to pay tax by a set day, but when you are ill, there is a disaster, or your shop is struggling, you may not be able to pay all of it right away. For such times, if you tell the tax office, there is a system that lets you wait on the time of payment or pay in parts. Even while you are waiting, the tax charged for the late part keeps growing, so once you know you cannot pay, it is important to consult the tax office early.
- 1. CheckCheck the due date, the amount to pay, and when you will be able to pay
- 2. ConsultBefore the deadline, contact the collection section of the tax office
- 3. ApplySubmit the necessary documents and apply for a deferment
Points
- Once you know you cannot pay, consult the tax office before the deadline arrives
- If you meet the conditions, you may be allowed to wait on the time of payment or to pay in parts every month
- Tax is charged on the late part according to the number of days late, so consulting early matters
What the words mean
- Deferment
- Being allowed to wait on a set deadline under set conditions
- Delinquent tax
- A tax charged according to the number of days late when you did not pay tax by the deadline
- Collection section
- The section of the tax office whose job is to collect taxes
- National Tax Agency: National Tax Agency, No. 9206 When you cannot pay national taxes by the due date
- National Tax Agency: National Tax Agency, General guide to paying taxes
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.