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  5. For taxpayers who face difficulty in paying their national taxes (Last update: May 1, 2024)

For taxpayers who face difficulty in paying their national taxes (Last update: May 1, 2024)

What is the Grace System?
The Grace System for national taxes is that taxpayers are to be granted a grace period of tax payment for up to one year in principle by applying to a tax office if taxpayers are in special circumstances, such as where they are likely to face difficulty in continuing their business or maintaining their standard of living by paying the national taxes in a lump sum, or where they have suffered a loss of property due to a disaster (Note). There are two types: (1) Grace Periods of Realization (Article 151 and 151-2 of the National Tax Collection Act) and (2) Tax Payment Grace Period (Article 46 of the Acts on General Rules for National Taxes).

Note: Methods of tax payment, depending on the granted one of the Grace Periods, can be followings:

  1. (1) to make installment payments during the grace period; or
  2. (2) to defer payment for one year.
    In the case of making installment payments, taxpayer's financial resources will be considered.

(Leaflet)

For inquiries regarding the details of the Grace System and individual circumstances, please feel free to consult your district tax office (Collection Group). (Note) For the information of the location of Tax Office, you can check HERE

Requirements for and effects of the Grace Periods of Realization
Taxpayers who fall under all the following items are eligible for the Grace Period of Realization by applying within six months from the due date for tax payments.

  1. (1) It is found that taxpayers are likely to face difficulty in continuing their business or maintaining their standard of living by paying national taxes in a lump sum.
  2. (2) It is found that taxpayers have a sincere intention to make tax payments.
  3. (3) The taxpayers owe no outstanding national taxes other than the taxes for which they are applying for the Grace Period.
  4. (4) Securities are provided in principle.
  • Note 1: Even if taxpayers already owe other outstanding national taxes or have national taxes unpaid for more than six months from their due date, the taxpayers may be granted the Grace Period of Realization by the authority of the district director of the tax office (Article 151 of the National Tax Collection Act).
  • Note 2: In the case of the following conditions from (1) to (3) are to be applied, the taxpayers are not required to provide any securities.
    1. (1) When the subject tax amount is one million yen or less
    2. (2) When the duration of the Grace Period is three months or less
    3. (3) When there are no securities they can provide

Once the Grace Period of Realization is granted;

  1. (1) Taxpayers will be granted the Grace Period for up to one year in principle. (It may be extended for a further one-year, depending on individual circumstances.)
  2. (2) Delinquent tax during the grace period is to be reduced*.
  3. * In 2024, the rate of delinquent tax is to be reduced from 8.7% per annum to 0.9% per annum.
  4. (3) Seizure or realization of assets (sale of assets) is to be graced.

Requirements for and effects of the Tax Payment Grace Period
In the case of the following individual circumstances, each amount may be granted the Tax Payment Grace Period.
Note: The amount to be granted is limited to the amount of the national taxes that the taxpayers cannot pay in a lump sum.
Examples of individual circumstances are:

  1. (1) The amount of the loss due to disaster or robbery, where a taxpayer’s property has suffered from the disaster or the robbery.
  2. (2) The amount equivalent to medical expenses and expenses incidental to treatment etc., where a taxpayer or his/her family members whose living expenses are paid from the same resources as those of the taxpayer became ill.
  3. (3) The amount equivalent to losses or expenses incurred by suspension or discontinuation, where a taxpayer’s business was forced to be suspended or discontinued.
  4. (4) The amount equivalent to the incurred losses, where a taxpayer’s business has suffered considerable losses due to reduction in income, etc.

Once the Tax Payment Grace Period is granted;

  1. (1) Taxpayers will be granted the grace period for up to one year in principle. (It may be extended for a further one-year, depending on individual circumstances.)
  2. (2) Delinquent tax during the grace period is to be reduced or exempted*.
  3. * In 2024, the rate of delinquent tax is to be reduced from 8.7% per annum to 0.9% per annum.
  4. (3) Seizure or realization of assets (sale of assets) is to be graced.

How to apply for the Grace System
Please apply to the district tax office by the due date of the respective grace systems (Note).
Taxpayers can apply for the grace system via e-Tax.

For smartphone and tablet users: e-Tax software (SP version)
For PC users: e-Tax software (Web version)

For details such as available time or system requirements of each software, please check the following links:
e-Tax Page e-Tax software (SP version) for smartphone and tablet users (Japanese language)
e-Tax Page e-Tax software (Web version) for smartphone and tablet users (Japanese language)
Taxpayers can also submit the Application Forms by the following means:
- sending the Application Form electronically via e-Tax software.
For details, please check here
- bringing or posting the Application Form (written notice) by preparing documents

  • Note: Taxpayers need to submit the Application Form for the Grace Period of Realization within six months from the due date for payment of national taxes in principle. Please consult the district tax office (Collection Group) about the details.

[Application methods by e-Tax]
For smart phone and tablet users

For PC users

[Application form]

[Other form]

After the Grace Period is granted
In the case where the Grace Period is granted, a written notice of permission for the Grace Period will be sent.
The notification includes the articles relevant to the granted Grace Period.

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National Tax Agency JAPAN