Overview of delinquent tax and additional tax

Is there a penalty if I fail to file a return or pay tax by the due date?

In principle, delinquent tax or additional tax will be imposed on the principal tax if a taxpayer files a final tax return or pays tax after the due date has passed.

Principal tax is the amount of tax to be paid by the due date.

Delinquent tax will be imposed if you did not pay the principal by the due date, and additional tax will be imposed if you fail to file a final tax return by the due date or understated your tax declarations.

1 Delinquent tax

In principle, delinquent tax is imposed according to the number of days starting from the day following the statutory due date for tax payment (Note 1) to the day on which the principal tax is fully paid.

(Calculating formula)

Principal tax × Percentage of Delinquent tax / 365 days × Delayed days (Note)

(Note) If an amended tax return is filed or a tax return is reassessed one year or more after the tax return is filed after due date has passed (excluding the case that heavy additional tax is imposed), the period from the day after one year passes from legal payment due date to the date of filing the amended tax return or the date of notification of reassessment shall not be included in the delayed days.
  In addition, if an amended tax return is filed or a tax return is reassessed one year or more after the tax return is filed after due date has passed (excluding the case that heavy additional tax is imposed), the period from the day after one year passes after the filing of that tax return to the date of filing the amended tax return or the date of notification of reassessment shall not be included in the delayed days.

(Delinquent tax rate)

(1)

For two months from the day following the due date for tax payment (Note 2)

In principle, 7.3% is applied.

However, the Basic Discount Rate set by the Bank of Japan on November 30 of the previous year + 4% is applied during the period from January 1, 2000 to December 31, 2013.

In addition, either 7.3% per annum or Special Standard Rate (Note 3) + 1% is applied after January 1, 2014, whichever is lower.

(2)

After the day after two months pass from the day following the due date for tax payment

In principle, 14.6% is applied.

However, either 14.6% per annum or Special Standard Rate + 7.3% is applied after January 1, 2014, whichever is lower.

The table below gives an example of (1) and (2) above.

The calculated amount will be rounded down to the nearest 100 and it will not be imposed if the total amount is less than 1,000 yen.

  Computation period (year) 2014 2015–2016 2017 2018
(1) Period until the due date for tax payment
+
Two months after the day following the
due date for tax payment
2.9% 2.8% 2.7% 2.6%
(2) The day after (1) 9.2% 9.1% 9.0% 8.9%
(Note 1) The statutory due date for tax payment refers to the due date on which national taxes must be paid pursuant to the national tax laws.
(Note 2)

The due date for tax payment is interpreted as:

− The statutory due date for tax payment, if a taxpayer filed a final tax return by the statutory due date of tax return.

− The day on which the return was filed, if a taxpayer filed a final tax return after the statutory due date of tax return or filed an amended return.

− One month from the day on which the notice of correction was issued, in the case of correction and determination.

(Note 3) The Special Standard Rate is the rate announced by the Minister of Finance by December 15 of the previous year as the annual average contractual interest rate on new short-term bank loan for each month from the October of two years prior to the September of the previous year, plus 1% p.a.

2 Additional tax

Additional tax consists of the following types, each with a different tax rate:

(1)

Additional tax for failure to file

In principle, an additional tax of 15% is imposed on the amount of principal tax where a final tax return was filed after the statutory due date.

In cases where such an amount exceeds 500,000 yen, the rate of the additional tax increases to 20% with respect to the excess amount.

In cases where an additional tax for failure to file or heavy additional tax has been imposed on the tax in question within 5 years, the above-mentioned rates of an additional tax for failure to file are increased by 10%.

Notwithstanding the above, where a taxpayer files the return voluntarily after the statutory due date, the rate of the additional tax reduces to 5%.

However, in cases where the taxpayer in question has noticed the commencement of the tax audit, the additional tax of 10% is imposed on the amount of principal tax (15% to the excess amount of the principal tax over 500,000 yen).

(2)

Additional tax for understatement

In principle, an additional tax of 10% is imposed on the understated amount of principal tax shown on an amended return from the taxpayer or correction of the tax authority. Where such an understated amount exceeds the greater of the amount shown on the final tax return filed before the statutory due date for filing or 500,000 yen, the rate of the additional tax increased to 15% with respect to the excess amount.

Notwithstanding the above, where a taxpayer files the amended return voluntarily, the additional tax is not imposed.

However, in cases where the taxpayer in question has noticed the commencement of the tax audit, the additional tax of 5% is imposed on the understated amount of principal tax (10% to the excess understated amount of principal tax over the greater of the amount shown on the final tax return filed before the statutory due date for filing or 500,000 yen).

(3)

Additional tax on non-payment

Regarding the withholding tax amount, in principle, an additional tax of 10% will be imposed on non-payment of principal tax in cases of payment notification after the deadline.

Notwithstanding the above, where a taxpayer pays taxes voluntarily after the statutory due date, the rate of the additional tax reduces to 5%.

(4)

Heavy additional tax

In principle, a heavy additional tax of 35% for understatement or 40% for failure to file is imposed where a taxpayer disguises or hides all or a part of the underlying facts for taxation.

In cases where an additional tax for failure to file or heavy additional tax has been imposed on the tax in question within 5 years, the above-mentioned rates of an additional tax for failure to file are increased by 10%.

出典:国税庁ホームページ(http://www.nta.go.jp/english/taxes/others/01/14001.htm)