NATIONAL TAX AGENCY REPORT 2010

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NATIONAL TAX AGENCYREPORT 2010

From the Commissioner
The environment in which Japanese tax
administration operates has seen dramaticchange in recent years, with continuing low
birth rate and aging society, economic
globalization, and computerization. In thisenvironment, towards achieving proper andfair taxation and collection, in order to reliably
fulfill the mission assigned to the National
Tax Agency (NTA), we maximize utilizationof limited human and material resources, eachand every tax official maintains high morals, and we treat general taxpayerswith a kind and polite attitude. On the other hand, we consider a strict stancein dealing with malicious taxpayers necessary in order to gain understandingof and trust in tax administration.
Based on this thinking, in order to effectively utilize the human andmaterial resources provided to the NTA, we are endeavoring to boost ourorganization’s administrative efficiency by computerization including e-Tax( online national tax return filing and tax payment system) . This is alsoachieved by our initiative for “unification of in-office work”, which
integrates processing of similar clerical work previously done according to
tax item in multiple departments in Tax Offices.
Especially, e-Tax enhances taxpayer convenience and contributes toadministrative efficiency. Therefore, the NTA is actively working for its
wider use and expansion, as one of the most important issues for the NTA.
In order to also effectively and efficiently perform tax examinations and1criminal investigations, the NTA collects a wide range of information. We
also arrange our examination organization to match the cases. In handling
taxation, in order to ensure transparency and consistency of the taxation
process, we accurately perform fact finding and interpretation and applicationof laws and regulations.
In order to reliably collect taxes, the NTA promotes various measures forreceiving within due date, and works on measures to prevent delinquencies.
The NTA also works to collect delinquent taxes by strictly dealing withmajor and malicious delinquent cases, and by certain handling of
consumption tax delinquency cases. Moreover, the NTA suitably handles
collection of delinquent taxes based on laws and regulations, considering theactual situation of the taxpayer.
This National Tax Agency Report 2010 was prepared under the editorial
policy of providing easily understood explanations to taxpayers about the
NTA’s issues, initiatives and their results.
We hope this National Tax Agency Report 2010 helps people to better
understand our activities.

September 2010

Chikara Kawakita

Commissioner
National Tax Agency, Japan

2

From the Commissioner
The environment in which Japanese tax
administration operates has seen dramaticchange in recent years, with continuing low
birth rate and aging society, economic
globalization, and computerization. In thisenvironment, towards achieving proper andfair taxation and collection, in order to reliably
fulfill the mission assigned to the National
Tax Agency (NTA), we maximize utilizationof limited human and material resources, eachand every tax official maintains high morals, and we treat general taxpayerswith a kind and polite attitude. On the other hand, we consider a strict stancein dealing with malicious taxpayers necessary in order to gain understandingof and trust in tax administration.
Based on this thinking, in order to effectively utilize the human andmaterial resources provided to the NTA, we are endeavoring to boost ourorganization’s administrative efficiency by computerization including e-Tax( online national tax return filing and tax payment system) . This is alsoachieved by our initiative for “unification of in-office work”, which
integrates processing of similar clerical work previously done according to
tax item in multiple departments in Tax Offices.
Especially, e-Tax enhances taxpayer convenience and contributes toadministrative efficiency. Therefore, the NTA is actively working for its
wider use and expansion, as one of the most important issues for the NTA.
In order to also effectively and efficiently perform tax examinations and1criminal investigations, the NTA collects a wide range of information. We
also arrange our examination organization to match the cases. In handling
taxation, in order to ensure transparency and consistency of the taxation
process, we accurately perform fact finding and interpretation and applicationof laws and regulations.
In order to reliably collect taxes, the NTA promotes various measures forreceiving within due date, and works on measures to prevent delinquencies.
The NTA also works to collect delinquent taxes by strictly dealing withmajor and malicious delinquent cases, and by certain handling of
consumption tax delinquency cases. Moreover, the NTA suitably handles
collection of delinquent taxes based on laws and regulations, considering theactual situation of the taxpayer.
This National Tax Agency Report 2010 was prepared under the editorial
policy of providing easily understood explanations to taxpayers about the
NTA’s issues, initiatives and their results.
We hope this National Tax Agency Report 2010 helps people to better
understand our activities.

September 2010

Chikara Kawakita

Commissioner
National Tax Agency, Japan

2

CONTENTS
Ⅰ About the NTA
1 Assignment and missions of the NTA… 5

2 Overview of the national tax organization… 7（1）National revenue and taxes ……………… 7（2）NTA budget and number of personnel…… 7（3）Organizational structure of the NTA……… 8

1 Enhancement of services for taxpayers… 9

2 Filing for tax return……………………… 13（1）Promoting self-completion of tax returns… 13（2）Tax consultation on Sundays …………… 14（1）Priority matters addressed in the tax
examinations ………………………………16（2）Proper withholding tax system operation… 17（3）Information collection ……………………… 17（4）Criminal investigation……………………… 17

5 Certified Public Tax Accountants (CPTAs)
system……………………………………… 26（1）Promotion of document attached by
CPTAs to tax returns …………………… 26（2）Promotion of e-Tax usage ……………… 26（3）Guidance and supervision on CPTAs…… 27

6 Cooperation with private organizations…27

1 e -Tax ……………………………………… 29（1）e -Tax ……………………………………… 29（2）Filing assistance on the NTA website…… 31

2 Optimization of operations and systems… 32
3 Unification of in-office work implemented
in all Tax Offices ………………………… 34

1 Addressing international transactions… 35

3

Ⅷ Statistics○ Tax revenues and budget ………………… 51○ Tax returns and taxation ………………… 52○ Tax examinations ………………………… 53○ International taxation ……………………… 53○ Delinquency………………………………… 53○ Issues the NTA should address ………… 49

51○ Criminal investigation……………………… 54○ Remedy for infringement of taxpayer rights… 54○ Tax consultations ………………………… 55○ Taxpayer satisfaction……………………… 55

References○ Filing returns for refund and request forcorrection ……………………………………14
Whentaxpayers suffer disasters ………… 14○○ Tax examination …………………………… 19○ Strict control of information ……………… 20○ Treatment and exemption from additional
tax and delinquent tax …………………… 20○ KSK system………………………………… 33○ Response to complaints from taxpayers… 45

The fiscal year ranges from April 1 through March 31 of the following year (i.e. fiscal year 2009: April 1, 2009 to March 31, 2010),
while the operation year is from July 1 through June 30 of the following year (i.e. operation year 2009: July 1, 2009 to June 30, 2010).

2 Mutual agreement procedure (MAP) … 39
3 Cooperation and coordination withforeign tax authorities ………………… 41（1）Cooperation for the developing countries… 41（2）Participation by tax authorities ininternational conferences ………………… 42

Statistics（1）Organization and officials for international
taxation …………………………………… 35（2）International tax avoidance……………… 37（3）Transfer pricing issues…………………… 38（4）Exchange of information under tax treaty andtax information exchange agreement ……… 39○ Changes in the environment surrounding the
tax administration…………………………… 49

49

Future Challenges

Ⅳ Tax Administration Under Increasing Globalization 35

Ⅶ Future Challenges（4）Information provided to liquor business
operators…………………………………… 47

Administrationof the Liquor Industry

Ⅲ Improvement of Taxpayer Convenience and Administrative Efficiency 29（1）Initiatives to ensure safety of liquor andenhance quality levels …………………… 46（2）Response to social demands …………… 47（3）Initiatives to develop a fair trading
environment in liquors …………………… 47

46

Remedy for Infringementof Taxpayer Rights

3 Promotion of proper and fair tax
administration ………………………… … 15（1）Establishment of voluntary tax payment… 21（2）Reduction of tax delinquency …………… 22（3）Office of Tax Collections Call Center…… 23（4）Auction by Internet………………………… 24（5）Accurate and efficient management ofclaims and liabilities ……………………… 24

Ⅵ Administration of the Liquor Industry

Tax Administration Under
Increasing Globalization（1）Information provided on the NTA website… 9（2）Tax education……………………………… 11（3）Briefings for taxpayers …………………… 11（4）Tax consultation …………………………… 12（5）Advance inquiries ………………………… 12

4 Reliable tax payment …………………… 21（3）Litigation…………………………………… 44（4）Case trends ……………………………… 45

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment 9（1）Request for reinvestigation ……………… 43（2）Request for reconsideration……………… 43

Promotion of Tax Filingand Payment by
Proper Self-Assessment（1）Assignment of the NTA …………………… 5（2）Missions of the NTA ……………………… 5

5

Ⅴ Remedy for Infringement of Taxpayer Rights 43

About the NTA

From the commissioner ………………………………1

4

CONTENTS
Ⅰ About the NTA
1 Assignment and missions of the NTA… 5

2 Overview of the national tax organization… 7（1）National revenue and taxes ……………… 7（2）NTA budget and number of personnel…… 7（3）Organizational structure of the NTA……… 8

1 Enhancement of services for taxpayers… 9

2 Filing for tax return……………………… 13（1）Promoting self-completion of tax returns… 13（2）Tax consultation on Sundays …………… 14（1）Priority matters addressed in the tax
examinations ………………………………16（2）Proper withholding tax system operation… 17（3）Information collection ……………………… 17（4）Criminal investigation……………………… 17

5 Certified Public Tax Accountants (CPTAs)
system……………………………………… 26（1）Promotion of document attached by
CPTAs to tax returns …………………… 26（2）Promotion of e-Tax usage ……………… 26（3）Guidance and supervision on CPTAs…… 27

6 Cooperation with private organizations…27

1 e -Tax ……………………………………… 29（1）e -Tax ……………………………………… 29（2）Filing assistance on the NTA website…… 31

2 Optimization of operations and systems… 32
3 Unification of in-office work implemented
in all Tax Offices ………………………… 34

1 Addressing international transactions… 35

3

Ⅷ Statistics○ Tax revenues and budget ………………… 51○ Tax returns and taxation ………………… 52○ Tax examinations ………………………… 53○ International taxation ……………………… 53○ Delinquency………………………………… 53○ Issues the NTA should address ………… 49

51○ Criminal investigation……………………… 54○ Remedy for infringement of taxpayer rights… 54○ Tax consultations ………………………… 55○ Taxpayer satisfaction……………………… 55

References○ Filing returns for refund and request forcorrection ……………………………………14
Whentaxpayers suffer disasters ………… 14○○ Tax examination …………………………… 19○ Strict control of information ……………… 20○ Treatment and exemption from additional
tax and delinquent tax …………………… 20○ KSK system………………………………… 33○ Response to complaints from taxpayers… 45

The fiscal year ranges from April 1 through March 31 of the following year (i.e. fiscal year 2009: April 1, 2009 to March 31, 2010),
while the operation year is from July 1 through June 30 of the following year (i.e. operation year 2009: July 1, 2009 to June 30, 2010).

2 Mutual agreement procedure (MAP) … 39
3 Cooperation and coordination withforeign tax authorities ………………… 41（1）Cooperation for the developing countries… 41（2）Participation by tax authorities ininternational conferences ………………… 42

Statistics（1）Organization and officials for international
taxation …………………………………… 35（2）International tax avoidance……………… 37（3）Transfer pricing issues…………………… 38（4）Exchange of information under tax treaty andtax information exchange agreement ……… 39○ Changes in the environment surrounding the
tax administration…………………………… 49

49

Future Challenges

Ⅳ Tax Administration Under Increasing Globalization 35

Ⅶ Future Challenges（4）Information provided to liquor business
operators…………………………………… 47

Administrationof the Liquor Industry

Ⅲ Improvement of Taxpayer Convenience and Administrative Efficiency 29（1）Initiatives to ensure safety of liquor andenhance quality levels …………………… 46（2）Response to social demands …………… 47（3）Initiatives to develop a fair trading
environment in liquors …………………… 47

46

Remedy for Infringementof Taxpayer Rights

3 Promotion of proper and fair tax
administration ………………………… … 15（1）Establishment of voluntary tax payment… 21（2）Reduction of tax delinquency …………… 22（3）Office of Tax Collections Call Center…… 23（4）Auction by Internet………………………… 24（5）Accurate and efficient management ofclaims and liabilities ……………………… 24

Ⅵ Administration of the Liquor Industry

Tax Administration Under
Increasing Globalization（1）Information provided on the NTA website… 9（2）Tax education……………………………… 11（3）Briefings for taxpayers …………………… 11（4）Tax consultation …………………………… 12（5）Advance inquiries ………………………… 12

4 Reliable tax payment …………………… 21（3）Litigation…………………………………… 44（4）Case trends ……………………………… 45

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment 9（1）Request for reinvestigation ……………… 43（2）Request for reconsideration……………… 43

Promotion of Tax Filingand Payment by
Proper Self-Assessment（1）Assignment of the NTA …………………… 5（2）Missions of the NTA ……………………… 5

5

Ⅴ Remedy for Infringement of Taxpayer Rights 43

About the NTA

From the commissioner ………………………………1

4

Ⅰ About the NTA
Missions of the NTA

Enabling taxpayers properly and smoothly fulfill their tax responsibilities
Assignment
To achieve the above mission, the NTA carries out its duties as stipulated in Article 19 of the
Ministry of Finance Establishment Act by keeping in mind transparency and efficiency.

●（1）Assignment of the NTA(b) Sound development of the liquor industry(A) Stabilize the management base of the liquor industry’s business and ensure research anddevelopment of brewing technologies and the quality and safety of liquor.
(B) Work for effective use of resources related to liquor.

(c) Proper administration of the Certified Public Tax Accountants (CPTAs) services

Ensure that CPTAs play important roles in the proper and smooth administration of theself-assessment system based on the missions assigned.

（2）Missions of the NTA

Code of conduct
The above duties shall be carried in accordance with the following Code of conduct.

●(a) Code of conduct upon performing duties

Future Challenges(A) Maintain tax administration transparency so that taxpayers are knowledgeable of theinterpretations of the laws and regulations and administrative procedures.
(B) Work to improve taxpayer convenience.
(C) Work to improve the administration processes in order to improve efficiency in tax
administration.
(D) Work to actively collect and use the information and data so as to effectively implement
tax examinations and procedures against tax delinquencies.
(E) Implement stern measures to enforce the law with taxpayers who are engaged in
malicious tax evasion and tax delinquency.

Administrationof the Liquor Industry

The NTA believes that when carrying out its duties, gaining understanding and confidence of thecitizens are critically important.
To this end, the NTA puts together standards of assigned duties and code of conduct, which are
disseminated to tax officials and released to the public as the Missions of the NTA.

Remedy for Infringementof Taxpayer Rights

Article 19 of the Act for Establishment of the Ministry of Finance provides that the NTA achieves its
duties of “Realizing proper and fair taxation and collection of internal taxes.” To fulfill these duties, theNTA provides public relations activities and tax education (taxpayer services) to help taxpayers
understand and perform their tax obligations, and corrects taxpayers who fail to fulfill their tax
obligations by providing proper guidance or tax examinations (promotion of the proper and fair tax
administration) in order to prevent good taxpayers from feeling that taxation is unfair.
In addition, the NTA works to carry out its duties as set forth in Article 19 of the same Act: “Sound
development of the liquor industry” and “Proper administration of the Certified Public Tax Accountants(CPTAs) services.”

Tax Administration Under
Increasing Globalization(A) To realize proper and fair taxation,( ⅰ ) Properly apply the relevant laws and regulations.
(ⅱ) Try to realize the process of proper tax filing and correct errors by conducting
examinations and guidance with persons who have filed improper returns.
(ⅲ) Endeavor to help taxpayers pay the tax by the due date and implement a procedure tocollect taxes from delinquent taxpayers.
(B) Respond properly and promptly to taxpayers’ requests for review to address infringementsof taxpayers’ legitimate rights and interests.

Improvement of Taxpayer
Convenience andAdministrative Efficiency(A) Provides easily understood information on and publicizes interpretations of laws andprocedures concerning self-assessment and tax payment.
(B) Responds quickly and accurately to inquiries and consultations from taxpayers.
(C) Makes efforts to obtain broad cooperation and participation of the relevant ministries,
agencies, and citizens in order to build understanding of the roles of taxes andcooperation with tax administration.

Promotion of Tax Filingand Payment by
Proper Self-Assessment(a) Realizing proper and fair taxation and collection of internal taxes（1）Tax payment environmental arrangement（2）Promotion of proper and fair tax administration

1 Assignment and missions of the NTA

About the NTA

The NTA is in charge of the assessment and collection of internal taxes. The Agency was organizedin 1949 as an external organ of the Ministry of Finance.
The NTA supervises 12 Regional Taxation Bureaus (including the Okinawa Regional Taxation Office,and the same applies hereinafter) and 524 Tax Offices throughout Japan. The NTA Head Office plans thetax administration, and supervises and oversees the administration of the Regional Taxation Bureaus andthe Tax Offices. Each of the Regional Taxation Bureaus, which are supervised and overseen by the NTA,
supervises and oversees Tax Offices in its jurisdiction. In addition, the Bureaus directly levy and collecttaxes from large taxpayers. The Tax Offices under the guidance and oversight of the NTA and Regional
Taxation Bureaus serve as the frontline enforcement organizations, and as the administration bodies
maintaining the closest relationships with taxpayers.
There is also the National Tax College which trains tax officials, while the National Tax Tribunal
serves as a special body engaged in examining requests for reinvestigation or reconsideration from
taxpayers.

(b) Code of conduct for officials(A) Respond to taxpayers in good faith.
(B) Maintain confidentiality about information acquired on the job and maintain official discipline.
(C) Work to gain the professional knowledge required to accomplish assigned tasks.

Statistics

Challenges
The NTA correctly and flexibly copes with changes in an economic society faced with theadvanced use of IT and globalization, while continuously reviewing and improving the organizationand tax administration operation in order to meet taxpayer needs.

●

NTA

5

6

Ⅰ About the NTA
Missions of the NTA

Enabling taxpayers properly and smoothly fulfill their tax responsibilities
Assignment
To achieve the above mission, the NTA carries out its duties as stipulated in Article 19 of the
Ministry of Finance Establishment Act by keeping in mind transparency and efficiency.

●（1）Assignment of the NTA(b) Sound development of the liquor industry(A) Stabilize the management base of the liquor industry’s business and ensure research anddevelopment of brewing technologies and the quality and safety of liquor.
(B) Work for effective use of resources related to liquor.

(c) Proper administration of the Certified Public Tax Accountants (CPTAs) services

Ensure that CPTAs play important roles in the proper and smooth administration of theself-assessment system based on the missions assigned.

（2）Missions of the NTA

Code of conduct
The above duties shall be carried in accordance with the following Code of conduct.

●(a) Code of conduct upon performing duties

Future Challenges(A) Maintain tax administration transparency so that taxpayers are knowledgeable of theinterpretations of the laws and regulations and administrative procedures.
(B) Work to improve taxpayer convenience.
(C) Work to improve the administration processes in order to improve efficiency in tax
administration.
(D) Work to actively collect and use the information and data so as to effectively implement
tax examinations and procedures against tax delinquencies.
(E) Implement stern measures to enforce the law with taxpayers who are engaged in
malicious tax evasion and tax delinquency.

Administrationof the Liquor Industry

The NTA believes that when carrying out its duties, gaining understanding and confidence of thecitizens are critically important.
To this end, the NTA puts together standards of assigned duties and code of conduct, which are
disseminated to tax officials and released to the public as the Missions of the NTA.

Remedy for Infringementof Taxpayer Rights

Article 19 of the Act for Establishment of the Ministry of Finance provides that the NTA achieves its
duties of “Realizing proper and fair taxation and collection of internal taxes.” To fulfill these duties, theNTA provides public relations activities and tax education (taxpayer services) to help taxpayers
understand and perform their tax obligations, and corrects taxpayers who fail to fulfill their tax
obligations by providing proper guidance or tax examinations (promotion of the proper and fair tax
administration) in order to prevent good taxpayers from feeling that taxation is unfair.
In addition, the NTA works to carry out its duties as set forth in Article 19 of the same Act: “Sound
development of the liquor industry” and “Proper administration of the Certified Public Tax Accountants(CPTAs) services.”

Tax Administration Under
Increasing Globalization(A) To realize proper and fair taxation,( ⅰ ) Properly apply the relevant laws and regulations.
(ⅱ) Try to realize the process of proper tax filing and correct errors by conducting
examinations and guidance with persons who have filed improper returns.
(ⅲ) Endeavor to help taxpayers pay the tax by the due date and implement a procedure tocollect taxes from delinquent taxpayers.
(B) Respond properly and promptly to taxpayers’ requests for review to address infringementsof taxpayers’ legitimate rights and interests.

Improvement of Taxpayer
Convenience andAdministrative Efficiency(A) Provides easily understood information on and publicizes interpretations of laws andprocedures concerning self-assessment and tax payment.
(B) Responds quickly and accurately to inquiries and consultations from taxpayers.
(C) Makes efforts to obtain broad cooperation and participation of the relevant ministries,
agencies, and citizens in order to build understanding of the roles of taxes andcooperation with tax administration.

Promotion of Tax Filingand Payment by
Proper Self-Assessment(a) Realizing proper and fair taxation and collection of internal taxes（1）Tax payment environmental arrangement（2）Promotion of proper and fair tax administration

1 Assignment and missions of the NTA

About the NTA

The NTA is in charge of the assessment and collection of internal taxes. The Agency was organizedin 1949 as an external organ of the Ministry of Finance.
The NTA supervises 12 Regional Taxation Bureaus (including the Okinawa Regional Taxation Office,and the same applies hereinafter) and 524 Tax Offices throughout Japan. The NTA Head Office plans thetax administration, and supervises and oversees the administration of the Regional Taxation Bureaus andthe Tax Offices. Each of the Regional Taxation Bureaus, which are supervised and overseen by the NTA,
supervises and oversees Tax Offices in its jurisdiction. In addition, the Bureaus directly levy and collecttaxes from large taxpayers. The Tax Offices under the guidance and oversight of the NTA and Regional
Taxation Bureaus serve as the frontline enforcement organizations, and as the administration bodies
maintaining the closest relationships with taxpayers.
There is also the National Tax College which trains tax officials, while the National Tax Tribunal
serves as a special body engaged in examining requests for reinvestigation or reconsideration from
taxpayers.

(b) Code of conduct for officials(A) Respond to taxpayers in good faith.
(B) Maintain confidentiality about information acquired on the job and maintain official discipline.
(C) Work to gain the professional knowledge required to accomplish assigned tasks.

Statistics

Challenges
The NTA correctly and flexibly copes with changes in an economic society faced with theadvanced use of IT and globalization, while continuously reviewing and improving the organizationand tax administration operation in order to meet taxpayer needs.

●

NTA

5

6

Ⅰ About the NTA

The NTA supervises 12 Regional Taxation Bureaus (including Okinawa Regional Taxation Office)and 524 Tax Offices to process tax administration throughout Japan. *1（1）National revenue and taxes

General account revenue in fiscal 2010 (initial budget)

Total
92.3
(¥trillion)

Stamprevenue
1.0（2.7%）

Special deficitfinancing bonds
38.0（41.1%）

Liquortax
1.4（3.7%）

Government bonds,etc.
20.6（22.4%）

Other
0.9
（2.4%）

Total
37.4(¥trillion)

Inheritancetax
1.3（3.4%） Consumption tax
9.6（25.8%）

Withholding
income tax
10.2（27.2%）

Including 9.8
interest anddiscount fees
9.8（10.6%）

Socialsecurity
27.3（29.5%）

Total
92.3(¥trillion)

Publicworks
5.8（6.3%）

Local
allocation
Tax grants
17.5（18.9%）

Self-assessed
income tax
2.5（6.6%）

Economic
assistance
0.6（0.6%）

Corporation tax
6.0（15.9%）

Education andscience
5.6（6.1%）

Energy-measures-related
0.8（0.9%）

National
defense
4.8（5.2%）※ Revenue from the government bonds are from special deficit-financing bonds issued to make up for shortfalls in revenue and the construction bonds issued
to cover public works spending. They are all debts that have to be repaid in the future.
The amount of sub-total in each item of accounts does not accord with the amount indicated in the grand total, due to rounding of fractional figures.

Budget (¥billion)

236.0

FY 1997
654.8

716.4

23,674323.1%FY 2010

Headcount (persons)52,44057,20256,261②Number of corporations (1,000 cases)

1,482

2,793

3,002

①Number of income tax returns filed (1,000 persons)③Number of establishments subject to commodity tax (1,000 cases)④Number of enterprises subject to consumption tax (1,000 cases)①＋②＋③＋④(1,000 cases)

7,327
117

−

8,926

20,023−

2,521

25,337−

3,513

30,189107.3%
202.6%−−

338.2%

7*1 Tax revenue of the national tax organization is calculated based on the ratio of the (NTA revenue final account amount) divided by the (taxes and stamp
revenue final account), from April 1, 2008 to March 31, 2009.

Commissioner’s
Secretariat
Taxation
Department
Revenue Management
andCollection Department
Large Enterprise
Examination andCriminal Investigation
Department(Councils, etc)

National Tax Council *2(Facilities)

National Tax College
which trains tax officials (334 persons,
0.6%)(Attached Institutions)

National Tax Tribunal
The National Tax Tribunal makes decisions onrequests for reconsideration from taxpayers
regarding the decision made by the Regional
Commissioner or District Director of the Tax
Office (477 persons, 0.8%).

The Regional Taxation Bureaus (including
Okinawa Regional Taxation Office) direct andsupervise the Tax Offices in their jurisdictions,and carry-out front-line operations including
offering taxpayer services, such as tax
consultation; tax examination on the large-scale,widely spreading and difficult-to-process cases;
and tax procedures for delinquent taxes(11,004 persons, 19.6%).

Management andCo-ordination Department

Taxation Department
This department directs andsupervises divisions in the Taxation
Group within the Tax Offices, andconducts tax examinations onlarge-scale and malicious tax
evaders.

Sapporo, Sendai, Kanto-Shinetsu, Tokyo,
Nagoya, Osaka, Hiroshima and Fukuoka
Regional Taxation Bureaus have a First Taxation
Department and a Second Taxation Department.

Collection Department
This Department directs and supervises
the 課税部は、Revenue税務署の課税部門のManagement andProcessingGroup
the Collection
指導・監督、
大口and・悪質などの調Group within the Tax Offices, and
査困難な納税者に対する調査
initiates procedures for large-scaledelinquent taxpayers.

Large Enterprise
Examination Department
課税部は、税務署の課税部門のThis department carries out examinationof large-enterprises and others.

Criminal Investigation
Department

This department investigateslarge-scale and malicious tax
evaders and pursues criminal
responsibility.
(The Large Enterprise Examination and Criminal
Investigation Department handles locations
other than Tokyo, Nagoya, and Osaka)

Okinawa Regional
Taxation Office
Regional Tax Tribunals (12)& Branches (7)(Regional Tax Tribunals): Sapporo, Sendai,
Kanto-Shinetsu, Tokyo, Kanazawa, Nagoya,
Osaka, Hiroshima, Takamatsu, Fukuoka,
Kumamoto, Okinawa(Branches of Regional Tax Tribunals):
Niigata, Nagano, Yokohama, Shizuoka,
Kyoto, Kobe and Okayama

Tax Offices (518)
Tax Offices are points of contact with
taxpayers and first-line bodies to process
tax administration (43,731persons, 77.7%).

Co-ordination Division
Special Officer(Public Relations)

Revenue Management
and Processing Group

This group receives tax returns, issues
certificates of tax payment, receives cash fortax payment, general consultation on taxation,etc. It also inputs tax returns, manages
national tax claims, and administers refund
procedures, postponements of tax payment,
and payments in-kind.

Collection Group

This group provides consultation on tax
payments, and executes procedures
against tax delinquencies.

Individual Taxation Group

This group carries out consultation on
income tax and sole proprietor’s
consumption tax, and related examinations.

Property Taxation Group

This group provides consultation on
inheritance tax, gift tax, income tax
imposed when land, buildings, or
stock were transferred, and related
examinations. The Group also
determines road price ratings, which
are used as reference in calculating
inheritance tax.

Corporation Taxation Group

This group provides consultation on
corporation tax, consumption tax, andwithholding income tax on corporations, andother taxes including stamp duty andgasoline tax, as well as related examinations.

Chief Examiner(Liquor Tax and Industry)

The Examiner carries out consultation
on liquor tax, related examinations, andback office work for liquor sales licenses.

Tax Offices (6)*1 The headcount and percentage indicated in each department represents the prescribed number of personnel in fiscal 2010 and its percentage of the overall
number of personnel in the NTA.
*2 The National Tax Council addresses the following: ① studies and deliberation on matters requested by the NTA Commissioner, where the Director-General of the
National Tax Tribunal determines the case by interpreting laws differently from the notification issued by the NTA Commissioner; ② implementation of CPTAs
examination and decision on the disciplinary actions applied to CPTAs; and ③ deliberations on the establishment of labeling standards for liquor and other matters.

Statistics※ ①Number of income tax returns filed in fiscal 2010 represents the figure for 2009.
②Number of corporations in fiscal 2010 represents the figure as of June-end 2009
④This represents the number of Notification of Opting to Taxable Status for Consumption Tax. The figure in fiscal 2010 represents the figure
as of March-end 2010.
(Reference) indicates the percentage for fiscal 2010 with fiscal 1975 as 100.

(Internal Subdivisions)

Sapporo, Sendai, Kanto-Shinetsu, Tokyo,
Kanazawa, Nagoya, Osaka, Hiroshima,
Takamatsu, Fukuoka, Kumamoto

Future Challenges

FY 1975(Reference)
FY 2010/FY 1975
303.6%

National Tax Agency: NTA plans anddraws up programs to execute tax
administration, standardizes the way
to interpret the tax laws, and directsand supervises the Regional Taxation
Bureaus and Tax Offices (715persons, 1.3%).

Regional Taxation
Bureaus (11)Administrationof the Liquor Industry

The NTA budget (initial) in fiscal 2010 stands at ¥716 billion, the majority of which is accounted for bysalary costs. In recent years, spending in the budget is prioritized on the budget to operate the Kokuzei
Sogo Kanri System (NTA Comprehensive Information Management System, hereinafter called “KSK”)
and the e-Tax, to improve administrative efficiency and services for taxpayers.
The headcount at the NTA stayed at around 52,000 from the 1970s through the first half of the 1980s.
Thereafter the number increased, as the consumption tax was introduced in fiscal 1989. After hitting apeak in fiscal 1997, the headcount has decreased by more than 1,000 over 9 years until fiscal 2006.
The workforce has turned to increase since fiscal 2007 with the latest number at 56,261 in fiscal 2010.
In the face of the tough financial situation of today, the NTA is trying to save the administrative
expenses and streamline the headcount, while securing the budget and headcount necessary to get the
NTA’s duties done.

National
Tax Agency

Remedy for Infringementof Taxpayer Rights（2）NTA budget and number of personnel

Local Branch Offices

Tax Administration Under
Increasing Globalization

Revenuefromgovernment bonds
44.3（48.0%）

Taxrevenue
37.4（40.5%）

Transfers from special accounts to
supply shortfall at time of settlementof FY2008 accounts 0.7（0.8%）

Other 8.6
（9.3%）Tax Bureau Planning and drafting of the tax system

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Construction
bonds
6.4
（6.9%）

General account expenditure in fiscal 2010 (initial budget)

Tobacco tax 0.8（2.2%）
Customs duty 0.8（2.0%）

Motor vehicle
tonnage tax
0.4（1.2%）
Gasoline tax
2.6（6.9%）

Other
10.6（11.5%）● National expenditure

Ministry of Finance

Promotion of Tax Filingand Payment by
Proper Self-Assessment

National revenue (budget for general account revenues) in fiscal 2010 stands at ¥92,299 billion, of
which ¥37,396 billion is from the taxes and stamp revenues. Deducting from them Customs tax
revenues and stamp revenues from Japan Post Holdings Co., Ltd., leaves ¥31,857 billion (about 85%)*1
as national tax revenues.
The income tax, corporation tax, and consumption tax account for about 80% of tax revenues.
● National revenue (general account revenue budget)

About the NTA（3）Organizational structure of the NTA

2 Overview of the national tax organization

8

Ⅰ About the NTA

The NTA supervises 12 Regional Taxation Bureaus (including Okinawa Regional Taxation Office)and 524 Tax Offices to process tax administration throughout Japan. *1（1）National revenue and taxes

General account revenue in fiscal 2010 (initial budget)

Total
92.3
(¥trillion)

Stamprevenue
1.0（2.7%）

Special deficitfinancing bonds
38.0（41.1%）

Liquortax
1.4（3.7%）

Government bonds,etc.
20.6（22.4%）

Other
0.9
（2.4%）

Total
37.4(¥trillion)

Inheritancetax
1.3（3.4%） Consumption tax
9.6（25.8%）

Withholding
income tax
10.2（27.2%）

Including 9.8
interest anddiscount fees
9.8（10.6%）

Socialsecurity
27.3（29.5%）

Total
92.3(¥trillion)

Publicworks
5.8（6.3%）

Local
allocation
Tax grants
17.5（18.9%）

Self-assessed
income tax
2.5（6.6%）

Economic
assistance
0.6（0.6%）

Corporation tax
6.0（15.9%）

Education andscience
5.6（6.1%）

Energy-measures-related
0.8（0.9%）

National
defense
4.8（5.2%）※ Revenue from the government bonds are from special deficit-financing bonds issued to make up for shortfalls in revenue and the construction bonds issued
to cover public works spending. They are all debts that have to be repaid in the future.
The amount of sub-total in each item of accounts does not accord with the amount indicated in the grand total, due to rounding of fractional figures.

Budget (¥billion)

236.0

FY 1997
654.8

716.4

23,674323.1%FY 2010

Headcount (persons)52,44057,20256,261②Number of corporations (1,000 cases)

1,482

2,793

3,002

①Number of income tax returns filed (1,000 persons)③Number of establishments subject to commodity tax (1,000 cases)④Number of enterprises subject to consumption tax (1,000 cases)①＋②＋③＋④(1,000 cases)

7,327
117

−

8,926

20,023−

2,521

25,337−

3,513

30,189107.3%
202.6%−−

338.2%

7*1 Tax revenue of the national tax organization is calculated based on the ratio of the (NTA revenue final account amount) divided by the (taxes and stamp
revenue final account), from April 1, 2008 to March 31, 2009.

Commissioner’s
Secretariat
Taxation
Department
Revenue Management
andCollection Department
Large Enterprise
Examination andCriminal Investigation
Department(Councils, etc)

National Tax Council *2(Facilities)

National Tax College
which trains tax officials (334 persons,
0.6%)(Attached Institutions)

National Tax Tribunal
The National Tax Tribunal makes decisions onrequests for reconsideration from taxpayers
regarding the decision made by the Regional
Commissioner or District Director of the Tax
Office (477 persons, 0.8%).

The Regional Taxation Bureaus (including
Okinawa Regional Taxation Office) direct andsupervise the Tax Offices in their jurisdictions,and carry-out front-line operations including
offering taxpayer services, such as tax
consultation; tax examination on the large-scale,widely spreading and difficult-to-process cases;
and tax procedures for delinquent taxes(11,004 persons, 19.6%).

Management andCo-ordination Department

Taxation Department
This department directs andsupervises divisions in the Taxation
Group within the Tax Offices, andconducts tax examinations onlarge-scale and malicious tax
evaders.

Sapporo, Sendai, Kanto-Shinetsu, Tokyo,
Nagoya, Osaka, Hiroshima and Fukuoka
Regional Taxation Bureaus have a First Taxation
Department and a Second Taxation Department.

Collection Department
This Department directs and supervises
the 課税部は、Revenue税務署の課税部門のManagement andProcessingGroup
the Collection
指導・監督、
大口and・悪質などの調Group within the Tax Offices, and
査困難な納税者に対する調査
initiates procedures for large-scaledelinquent taxpayers.

Large Enterprise
Examination Department
課税部は、税務署の課税部門のThis department carries out examinationof large-enterprises and others.

Criminal Investigation
Department

This department investigateslarge-scale and malicious tax
evaders and pursues criminal
responsibility.
(The Large Enterprise Examination and Criminal
Investigation Department handles locations
other than Tokyo, Nagoya, and Osaka)

Okinawa Regional
Taxation Office
Regional Tax Tribunals (12)& Branches (7)(Regional Tax Tribunals): Sapporo, Sendai,
Kanto-Shinetsu, Tokyo, Kanazawa, Nagoya,
Osaka, Hiroshima, Takamatsu, Fukuoka,
Kumamoto, Okinawa(Branches of Regional Tax Tribunals):
Niigata, Nagano, Yokohama, Shizuoka,
Kyoto, Kobe and Okayama

Tax Offices (518)
Tax Offices are points of contact with
taxpayers and first-line bodies to process
tax administration (43,731persons, 77.7%).

Co-ordination Division
Special Officer(Public Relations)

Revenue Management
and Processing Group

This group receives tax returns, issues
certificates of tax payment, receives cash fortax payment, general consultation on taxation,etc. It also inputs tax returns, manages
national tax claims, and administers refund
procedures, postponements of tax payment,
and payments in-kind.

Collection Group

This group provides consultation on tax
payments, and executes procedures
against tax delinquencies.

Individual Taxation Group

This group carries out consultation on
income tax and sole proprietor’s
consumption tax, and related examinations.

Property Taxation Group

This group provides consultation on
inheritance tax, gift tax, income tax
imposed when land, buildings, or
stock were transferred, and related
examinations. The Group also
determines road price ratings, which
are used as reference in calculating
inheritance tax.

Corporation Taxation Group

This group provides consultation on
corporation tax, consumption tax, andwithholding income tax on corporations, andother taxes including stamp duty andgasoline tax, as well as related examinations.

Chief Examiner(Liquor Tax and Industry)

The Examiner carries out consultation
on liquor tax, related examinations, andback office work for liquor sales licenses.

Tax Offices (6)*1 The headcount and percentage indicated in each department represents the prescribed number of personnel in fiscal 2010 and its percentage of the overall
number of personnel in the NTA.
*2 The National Tax Council addresses the following: ① studies and deliberation on matters requested by the NTA Commissioner, where the Director-General of the
National Tax Tribunal determines the case by interpreting laws differently from the notification issued by the NTA Commissioner; ② implementation of CPTAs
examination and decision on the disciplinary actions applied to CPTAs; and ③ deliberations on the establishment of labeling standards for liquor and other matters.

Statistics※ ①Number of income tax returns filed in fiscal 2010 represents the figure for 2009.
②Number of corporations in fiscal 2010 represents the figure as of June-end 2009
④This represents the number of Notification of Opting to Taxable Status for Consumption Tax. The figure in fiscal 2010 represents the figure
as of March-end 2010.
(Reference) indicates the percentage for fiscal 2010 with fiscal 1975 as 100.

(Internal Subdivisions)

Sapporo, Sendai, Kanto-Shinetsu, Tokyo,
Kanazawa, Nagoya, Osaka, Hiroshima,
Takamatsu, Fukuoka, Kumamoto

Future Challenges

FY 1975(Reference)
FY 2010/FY 1975
303.6%

National Tax Agency: NTA plans anddraws up programs to execute tax
administration, standardizes the way
to interpret the tax laws, and directsand supervises the Regional Taxation
Bureaus and Tax Offices (715persons, 1.3%).

Regional Taxation
Bureaus (11)Administrationof the Liquor Industry

The NTA budget (initial) in fiscal 2010 stands at ¥716 billion, the majority of which is accounted for bysalary costs. In recent years, spending in the budget is prioritized on the budget to operate the Kokuzei
Sogo Kanri System (NTA Comprehensive Information Management System, hereinafter called “KSK”)
and the e-Tax, to improve administrative efficiency and services for taxpayers.
The headcount at the NTA stayed at around 52,000 from the 1970s through the first half of the 1980s.
Thereafter the number increased, as the consumption tax was introduced in fiscal 1989. After hitting apeak in fiscal 1997, the headcount has decreased by more than 1,000 over 9 years until fiscal 2006.
The workforce has turned to increase since fiscal 2007 with the latest number at 56,261 in fiscal 2010.
In the face of the tough financial situation of today, the NTA is trying to save the administrative
expenses and streamline the headcount, while securing the budget and headcount necessary to get the
NTA’s duties done.

National
Tax Agency

Remedy for Infringementof Taxpayer Rights（2）NTA budget and number of personnel

Local Branch Offices

Tax Administration Under
Increasing Globalization

Revenuefromgovernment bonds
44.3（48.0%）

Taxrevenue
37.4（40.5%）

Transfers from special accounts to
supply shortfall at time of settlementof FY2008 accounts 0.7（0.8%）

Other 8.6
（9.3%）Tax Bureau Planning and drafting of the tax system

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Construction
bonds
6.4
（6.9%）

General account expenditure in fiscal 2010 (initial budget)

Tobacco tax 0.8（2.2%）
Customs duty 0.8（2.0%）

Motor vehicle
tonnage tax
0.4（1.2%）
Gasoline tax
2.6（6.9%）

Other
10.6（11.5%）● National expenditure

Ministry of Finance

Promotion of Tax Filingand Payment by
Proper Self-Assessment

National revenue (budget for general account revenues) in fiscal 2010 stands at ¥92,299 billion, of
which ¥37,396 billion is from the taxes and stamp revenues. Deducting from them Customs tax
revenues and stamp revenues from Japan Post Holdings Co., Ltd., leaves ¥31,857 billion (about 85%)*1
as national tax revenues.
The income tax, corporation tax, and consumption tax account for about 80% of tax revenues.
● National revenue (general account revenue budget)

About the NTA（3）Organizational structure of the NTA

2 Overview of the national tax organization

8

of Tax Filing and Payment
Ⅱ Promotion
by Proper Self-Assessment
The NTA provides the following information on the NTA website

Overview of the NTA website
1 Tax answers system

Search Regional Taxation
Bureau and the Tax Offices

2

Portal to the
Bureau pages◆

Regional Taxation

Filing assistance on the NTA website

In this system, if a taxpayer follows thescreen guidance and inputs monetaryamounts, taxes are automaticallycalculated, and tax returns for income tax
and consumption tax can be prepared◆ Tax returns prepared can be filed in
e-Tax, or on paper◆

4 Online national tax return filingand tax payment system (e-Tax)◆ Information to support filing tax returns

and payment using e-Tax for “Prior preparation”, “advanced registration”, “flow ofprocedures”, etc.

5 Road price rating map◆ Provides road price rating information online

109

1 Enhancement of services for taxpayers

3
4
2

6

5

6

Auction information

8

Provides information on auction goods
and properties, auction procedures, etc.

◆

7

Tax learning section

7

Web‐TAX‐TV◆ Internet program giving easily understood

explanations using videos and diagrams,with information on taxes related to scenesof everyday life
◆ Specific explanations of tax procedures,
how to prepare tax returns, e-Tax use, etc.
◆ Shows the NTA activities like tax
examination and collection, in an easily
understood drama format

9 Email magazine

Registration of “What’s new? email
magazine delivery service”◆

10 Text enlargement /voice readings

Support functions for the elderly andthose who have visual disorders◆

Statistics

Section to have fun learning abouttaxes, with games and quizzes for bothchildren to adults◆ Provides tax education learningmaterials for school teachers◆

8

Future Challenges

9

The NTA website has the following functions, and has worked to improve the search and guidance
functions, to make it easy for anybody to use. Attention is also paid to assist people who have vision
disorders and the elderly by making available magnified letters and voice readings.
① Provides tax information② Taxpayer service utilizing IT such as “e-tax” and “filing assistance on the NTA website”③ Taxpayer service receiving opinions and requests from taxpayers

1Administrationof the Liquor Industry（1）Information provided on the NTA website

Remedy for Infringementof Taxpayer Rights

To have taxpayers voluntarily file a proper tax return, it is absolutely essential for them to realize themeaning of tax obligations. We therefore provide information for this purpose and respond to questions
asked by taxpayers.
This is why the NTA provides publicity about self-assessment, payment procedures and the NTA
initiatives, based on the basic concepts of “Provide easily understood and accurate publicity from thetaxpayer’s viewpoint”, “Seek the people’s cooperation and their broad understanding of tax administrationand the importance of taxpayer awareness”, and “Listen to the people’s opinions and requests, and strive
to improve administration”.
Specifically, centered on the NTA website (117,280 thousand accesses in fiscal 2009), the NTA
provides a variety of information on the significance and roles played by taxes, and on the tax system. The
information is provided through mass media such as TV, newspapers, etc., other public relations activities
media of pamphlets made available at the Tax Offices as well as municipality offices, and various
explanatory meetings.
The NTA also responds to general inquiries and consultations related to taxes on the telephone, whileproviding information on the interpretation and handling of general tax law through the NTA website, etc.
Furthermore, it responds to advance inquires or questions where there are any questions in tax application
to transactions taxpayers are going to make. The NTA thus works for proper self-assessment by taxpayers.

Tax Administration Under
Increasing Globalization

9

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Portal to the FAQ where frequently
asked questions and general answers
are posted◆

3※ The following diagram is as of May 2010

Promotion of Tax Filingand Payment by
Proper Self-Assessment〇 Q&A related to the tax law, notifications to interpret laws and regulations, and case examples ofwritten responses for advance inquiries and questions〇 NTA activities〇 Road price ratings and evaluation coefficient tables, which become the standards for the valuation ofland in taxation of inheritance taxes, etc.
〇 Information regarding auctions conducted by the Regional Taxation Bureaus and Tax Offices, etc.

About the NTA

Japan adopts a self-assessment system for most of national taxes. Under this system, taxpayers
themselves determine the amount of tax and pay it. On the other hand, for local taxes, the official
assessment system is generally adopted.
For the national taxes, the official assessment system was used in the past, and tax authorities who
calculated the tax amount based on income notified taxpayers. In 1947, the self-assessment system wasintroduced to the three different taxes for income, corporations, and inheritance, and this method has been
adapted to many of the national taxes.
In order for the self-assessment system to function properly, it is necessary for taxpayers to have a highlevel of awareness regarding tax payment and to adequately fulfill the obligation of tax responsibilities asprovided by the constitution and law. To this end, the NTA is working to enhance a variety of services for
taxpayers to help them correctly file and pay taxes by themselves. These include (1)public relations
activities and tax education relating to the significance and function of taxes and knowledge about the tax
law, (2) clarification of interpretation and practice of laws and regulations, and of tax procedures,etc.,and(3) efforts to improve taxpayer convenience in tax consultation and filing returns.
In order to confirm that the tax returns filed by taxpayers are correct, not only provision of guidance ortax examinations, but also cooperation and coordination with CPTAs and relevant private organizations areneeded. Furthermore, if national taxes are not paid by the due date, the NTA encourages voluntary tax
payment, and if they are not paid, then it is necessary to work on collecting national taxes, e.g. byimplementing disposition for delinquent tax. The NTA provides guidance or examinations of taxpayers whoneed corrective action and executes firm and proper procedures to collect delinquent taxes based on laws
and regulations, while considering the individual circumstances of each taxpayer. In this way, the NTA
promotes proper and fair tax administration.

The NTA website and the free video sharing site “YouTube” deliver videos with information on NTA activities (including publicity activities of each Regional
Taxation Bureau and Tax Office) and support regarding self-assessment procedures.

10

of Tax Filing and Payment
Ⅱ Promotion
by Proper Self-Assessment
The NTA provides the following information on the NTA website

Overview of the NTA website
1 Tax answers system

Search Regional Taxation
Bureau and the Tax Offices

2

Portal to the
Bureau pages◆

Regional Taxation

Filing assistance on the NTA website

In this system, if a taxpayer follows thescreen guidance and inputs monetaryamounts, taxes are automaticallycalculated, and tax returns for income tax
and consumption tax can be prepared◆ Tax returns prepared can be filed in
e-Tax, or on paper◆

4 Online national tax return filingand tax payment system (e-Tax)◆ Information to support filing tax returns

and payment using e-Tax for “Prior preparation”, “advanced registration”, “flow ofprocedures”, etc.

5 Road price rating map◆ Provides road price rating information online

109

1 Enhancement of services for taxpayers

3
4
2

6

5

6

Auction information

8

Provides information on auction goods
and properties, auction procedures, etc.

◆

7

Tax learning section

7

Web‐TAX‐TV◆ Internet program giving easily understood

explanations using videos and diagrams,with information on taxes related to scenesof everyday life
◆ Specific explanations of tax procedures,
how to prepare tax returns, e-Tax use, etc.
◆ Shows the NTA activities like tax
examination and collection, in an easily
understood drama format

9 Email magazine

Registration of “What’s new? email
magazine delivery service”◆

10 Text enlargement /voice readings

Support functions for the elderly andthose who have visual disorders◆

Statistics

Section to have fun learning abouttaxes, with games and quizzes for bothchildren to adults◆ Provides tax education learningmaterials for school teachers◆

8

Future Challenges

9

The NTA website has the following functions, and has worked to improve the search and guidance
functions, to make it easy for anybody to use. Attention is also paid to assist people who have vision
disorders and the elderly by making available magnified letters and voice readings.
① Provides tax information② Taxpayer service utilizing IT such as “e-tax” and “filing assistance on the NTA website”③ Taxpayer service receiving opinions and requests from taxpayers

1Administrationof the Liquor Industry（1）Information provided on the NTA website

Remedy for Infringementof Taxpayer Rights

To have taxpayers voluntarily file a proper tax return, it is absolutely essential for them to realize themeaning of tax obligations. We therefore provide information for this purpose and respond to questions
asked by taxpayers.
This is why the NTA provides publicity about self-assessment, payment procedures and the NTA
initiatives, based on the basic concepts of “Provide easily understood and accurate publicity from thetaxpayer’s viewpoint”, “Seek the people’s cooperation and their broad understanding of tax administrationand the importance of taxpayer awareness”, and “Listen to the people’s opinions and requests, and strive
to improve administration”.
Specifically, centered on the NTA website (117,280 thousand accesses in fiscal 2009), the NTA
provides a variety of information on the significance and roles played by taxes, and on the tax system. The
information is provided through mass media such as TV, newspapers, etc., other public relations activities
media of pamphlets made available at the Tax Offices as well as municipality offices, and various
explanatory meetings.
The NTA also responds to general inquiries and consultations related to taxes on the telephone, whileproviding information on the interpretation and handling of general tax law through the NTA website, etc.
Furthermore, it responds to advance inquires or questions where there are any questions in tax application
to transactions taxpayers are going to make. The NTA thus works for proper self-assessment by taxpayers.

Tax Administration Under
Increasing Globalization

9

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Portal to the FAQ where frequently
asked questions and general answers
are posted◆

3※ The following diagram is as of May 2010

Promotion of Tax Filingand Payment by
Proper Self-Assessment〇 Q&A related to the tax law, notifications to interpret laws and regulations, and case examples ofwritten responses for advance inquiries and questions〇 NTA activities〇 Road price ratings and evaluation coefficient tables, which become the standards for the valuation ofland in taxation of inheritance taxes, etc.
〇 Information regarding auctions conducted by the Regional Taxation Bureaus and Tax Offices, etc.

About the NTA

Japan adopts a self-assessment system for most of national taxes. Under this system, taxpayers
themselves determine the amount of tax and pay it. On the other hand, for local taxes, the official
assessment system is generally adopted.
For the national taxes, the official assessment system was used in the past, and tax authorities who
calculated the tax amount based on income notified taxpayers. In 1947, the self-assessment system wasintroduced to the three different taxes for income, corporations, and inheritance, and this method has been
adapted to many of the national taxes.
In order for the self-assessment system to function properly, it is necessary for taxpayers to have a highlevel of awareness regarding tax payment and to adequately fulfill the obligation of tax responsibilities asprovided by the constitution and law. To this end, the NTA is working to enhance a variety of services for
taxpayers to help them correctly file and pay taxes by themselves. These include (1) public relations
activities and tax education relating to the significance and function of taxes and knowledge about the tax
law, (2)clarification of interpretation and practice of laws and regulations, and of tax procedures,etc.,and(3)efforts to improve taxpayer convenience in tax consultation and filing returns.
In order to confirm that the tax returns filed by taxpayers are correct, not only provision of guidance ortax examinations, but also cooperation and coordination with CPTAs and relevant private organizations areneeded. Furthermore, if national taxes are not paid by the due date, the NTA encourages voluntary tax
payment, and if they are not paid, then it is necessary to work on collecting national taxes, e.g. byimplementing disposition for delinquent tax. The NTA provides guidance or examinations of taxpayers whoneed corrective action and executes firm and proper procedures to collect delinquent taxes based on laws
and regulations, while considering the individual circumstances of each taxpayer. In this way, the NTA
promotes proper and fair tax administration.

The NTA website and the free video sharing site “YouTube” deliver videos with information on NTA activities (including publicity activities of each Regional
Taxation Bureau and Tax Office) and support regarding self-assessment procedures.

10

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment（2）Tax education● Frequency of briefings andnumber of participants(operation year 2008)

Frequency held

28,841 times

Number ofparticipants

1,336
thousand people

Internet
35,969（87.4%）(thousand cases)

Phone Consultation Center

If it is unclear how tax law applies to transactions a taxpayer may actually do, then the Tax Officeor Regional Taxation Bureau handles advance inquiries. Of these, if there is a request seeking awritten reply, a written reply is provided when certain conditions are met, e.g. handling of similartransactions under tax law is unclear. To also make these useful to other taxpayers, the content of suchinquiries and replies are posted on the NTA website. This written reply procedure also provides
advance clarification of the application of tax law to future transactions by taxpayers, so it covers both“transactions actually done”, and “transactions planned for the future, for which individual specificdocuments can be submitted”. In principle, information which can identify the inquirer such as theinquirer’s name is not published, making it easier for taxpayers to use this procedure.
There were 146 inquiries seeking written replies in FY2009.

Statistics

Various briefings

Total
41,130Future Challenges

11

To help taxpayers better understand the tax procedures
and tax system revisions, briefings are held in Tax Offices
throughout Japan. A variety of briefings are held to provide
information on taxes, including: 1) briefings on thenecessity of bookkeeping and maintaining accounting
books, with guidance on how to prepare tax returns andfinancial statements, 2) year-end adjustment briefings forwithholding agents, 3) briefings on revisions to the tax laws,and 4) briefings for newly established corporations.

Talk on phone,or in person
5,136（12.5%）

Administrationof the Liquor Industry（3）Briefings for taxpayers（5）Advance inquiries

Automatedvoice or fax
25（0.1%）

Remedy for Infringementof Taxpayer Rights

Tax Historical Materials RoomConsultation Centers (FY2009)

Tax Administration Under
Increasing Globalization

The Tax Historical Materials Room on the Wako
campus of the National Tax College is the only specialist
facility in Japan. It displays a number of historical materials
which are being used by a wide range of people, specialists
involved in tax history as well as students from junior andsenior high schools and other members of society.
Specialized staﬀ are researching the historicalmaterials and the past tax system.
For explanation in detail, please visit the National Tax
College on the NTA website at
http://www.nta.go.jp/ntc/english/index.htm● Tax consultations at Phone

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Providing tax knowledge through the “Tax Historical Materials Room”

Tax consultations provide information
so that taxpayers can do proper
self-assessment
andtax
payment
themselves. These answer generalquestions on taxation, as part of taxpayer
services. The NTA established Phone
Consultation Centers in Regional Taxation
Bureaus to answer taxpayer questions andprovide consultation on taxes. These
provide centralized handling of generalphone consultations.
Groups of Tax Counselors with a wealthof experience in taxation overall are
assigned to Phone Consultation Centers. In
principle, they handle questions according
type of tax, and provide high quality andfast replies, in an effort to enhance taxpayer
convenience. For foreigners, there are also
Tax Counselors who can handle tax
consultation in English, who are assigned toPhone Consultation Centers at Regional
Taxation Bureaus in Tokyo, Nagoya andOsaka.
Typical information such as frequently
asked questions are provided in the Tax
Answer System on the NTA website.
When it is necessary to check specificdocuments or facts, and consultation byinterview is required, there is anappointment system at the Tax Office withjurisdiction. This serves to eliminate wait
time at the Tax Office, as part of our efforts
for effective and efficient operation whichmatches the content of consultations.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The NTA supports proper tax education for children andstudents who will lead the next generation. This aims tofoster sound taxpayer awareness (that taxes are acornerstone of a democratic nation, encourage proper
understanding of the significance and roles of taxes, andfoster consciousness as members of society who proactively
consider how society should be).
Tax education is provided according to the thinking thatefforts should be made by the entire society. In school
Tax☆Space UENO
education, these activities are focused in the Council for
Promotion of Tax Education set up in each prefecture, comprised of national, local government andschool officials. With the broad cooperation of private organizations, workshops are provided for school
teachers, tax officials are sent to lecture based on requests from schools, tax education supplementaryteaching materials are prepared and distributed, essay writing contests held, etc.
Also, the Tax Learning Section is set up in the NTA website. Its content includes quizzes and games
for children and students to have fun learning about taxes. It also provides Tax Education Teaching
Materials in Power Point, which can be used by school teachers and people guiding tax education.
Moreover, the Tax☆Space UENO facility for tax education is set up in the Tokyo-Ueno Tax Office.
http://www.nta.go.jp/tokyo/shiraberu/gakushu/taiken/01.htm (in Japanese language)
Tax☆Space UENO contacts:
Special Officer (Public Relations), Tokyo-Ueno Tax Office
Tel 03-3821-9001 (Ext 361, 362)

About the NTA（4）Tax consultation

12

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment（2）Tax education● Frequency of briefings andnumber of participants(operation year 2008)

Frequency held

28,841 times

Number ofparticipants

1,336
thousand people

Internet
35,969（87.4%）(thousand cases)

Phone Consultation Center

If it is unclear how tax law applies to transactions a taxpayer may actually do, then the Tax Officeor Regional Taxation Bureau handles advance inquiries. Of these, if there is a request seeking awritten reply, a written reply is provided when certain conditions are met, e.g. handling of similartransactions under tax law is unclear. To also make these useful to other taxpayers, the content of suchinquiries and replies are posted on the NTA website. This written reply procedure also provides
advance clarification of the application of tax law to future transactions by taxpayers, so it covers both“transactions actually done”, and “transactions planned for the future, for which individual specificdocuments can be submitted”. In principle, information which can identify the inquirer such as theinquirer’s name is not published, making it easier for taxpayers to use this procedure.
There were 146 inquiries seeking written replies in FY2009.

Statistics

Various briefings

Total
41,130Future Challenges

11

To help taxpayers better understand the tax procedures
and tax system revisions, briefings are held in Tax Offices
throughout Japan. A variety of briefings are held to provide
information on taxes, including: 1) briefings on thenecessity of bookkeeping and maintaining accounting
books, with guidance on how to prepare tax returns andfinancial statements, 2) year-end adjustment briefings forwithholding agents, 3) briefings on revisions to the tax laws,and 4) briefings for newly established corporations.

Talk on phone,or in person
5,136（12.5%）

Administrationof the Liquor Industry（3）Briefings for taxpayers（5）Advance inquiries

Automatedvoice or fax
25（0.1%）

Remedy for Infringementof Taxpayer Rights

Tax Historical Materials RoomConsultation Centers (FY2009)

Tax Administration Under
Increasing Globalization

The Tax Historical Materials Room on the Wako
campus of the National Tax College is the only specialist
facility in Japan. It displays a number of historical materials
which are being used by a wide range of people, specialists
involved in tax history as well as students from junior andsenior high schools and other members of society.
Specialized staﬀ are researching the historicalmaterials and the past tax system.
For explanation in detail, please visit the National Tax
College on the NTA website at
http://www.nta.go.jp/ntc/english/index.htm● Tax consultations at Phone

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Providing tax knowledge through the “Tax Historical Materials Room”

Tax consultations provide information
so that taxpayers can do proper
self-assessment
andtax
payment
themselves. These answer generalquestions on taxation, as part of taxpayer
services. The NTA established Phone
Consultation Centers in Regional Taxation
Bureaus to answer taxpayer questions andprovide consultation on taxes. These
provide centralized handling of generalphone consultations.
Groups of Tax Counselors with a wealthof experience in taxation overall are
assigned to Phone Consultation Centers. In
principle, they handle questions according
type of tax, and provide high quality andfast replies, in an effort to enhance taxpayer
convenience. For foreigners, there are also
Tax Counselors who can handle tax
consultation in English, who are assigned toPhone Consultation Centers at Regional
Taxation Bureaus in Tokyo, Nagoya andOsaka.
Typical information such as frequently
asked questions are provided in the Tax
Answer System on the NTA website.
When it is necessary to check specificdocuments or facts, and consultation byinterview is required, there is anappointment system at the Tax Office withjurisdiction. This serves to eliminate wait
time at the Tax Office, as part of our efforts
for effective and efficient operation whichmatches the content of consultations.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The NTA supports proper tax education for children andstudents who will lead the next generation. This aims tofoster sound taxpayer awareness (that taxes are acornerstone of a democratic nation, encourage proper
understanding of the significance and roles of taxes, andfoster consciousness as members of society who proactively
consider how society should be).
Tax education is provided according to the thinking thatefforts should be made by the entire society. In school
Tax☆Space UENO
education, these activities are focused in the Council for
Promotion of Tax Education set up in each prefecture, comprised of national, local government andschool officials. With the broad cooperation of private organizations, workshops are provided for school
teachers, tax officials are sent to lecture based on requests from schools, tax education supplementaryteaching materials are prepared and distributed, essay writing contests held, etc.
Also, the Tax Learning Section is set up in the NTA website. Its content includes quizzes and games
for children and students to have fun learning about taxes. It also provides Tax Education Teaching
Materials in Power Point, which can be used by school teachers and people guiding tax education.
Moreover, the Tax☆Space UENO facility for tax education is set up in the Tokyo-Ueno Tax Office.
http://www.nta.go.jp/tokyo/shiraberu/gakushu/taiken/01.htm (in Japanese language)
Tax☆Space UENO contacts:
Special Officer (Public Relations), Tokyo-Ueno Tax Office
Tel 03-3821-9001 (Ext 361, 362)

About the NTA（4）Tax consultation

12

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment（1）Promoting self-completion of tax returns

23.67

15
10

0

’67 ’68 ’69 ’70 ’71 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

When taxpayers suffer disasters(1) If the occurrence of a natural disaster prevents taxpayers from ﬁling tax returns andpaying taxes by the due date, taxpayers can apply for postponement to the District
Director of the Tax Oﬃces with jurisdiction. Upon approval, the due date is postponed towithin a range of two months after the day when the reason ceases to exist.
(2) When earthquakes, ﬁre, windstorm, ﬂood, or other disaster cause damage to taxpayersʼ
houses and household goods, taxpayers can make a choice for ﬁling tax returns: ① thededuction for casualty losses pursuant to the Income Tax Act, ② tax reduction or
exemption pursuant to the Act on Reduction or Release, Deferment of Collection and Other
Measures Related to Tax Imposed on Disaster Victims, whichever is favorable to thetaxpayer, to have their income taxes reduced in whole or in part.
(3) In the event earthquakes, ﬁre, windstorm, ﬂood, or other disaster caused considerable
damage to property, if there is a national tax due date within one year from the datedamage was suﬀered, the taxpayer can submit an application to the District Director of theTax Oﬃces within two months from the date when such disaster ended, and upon approval,
the tax payment is postponed to no later than one year from the due date for tax payment.
(4) If taxpayers are prevented from paying taxes at one time as a result of a disaster or theft,by applying to the District Director of the Tax Oﬃce, upon approval, the tax payment is
postponed by no later than one year within the limit of the amount recognized as
unpayable at one time.

Future Challenges

5

Reference

Administrationof the Liquor Industry

20

If the amount of withholding tax or estimated tax prepayments are larger than the amountbased on real annual income, taxes overpaid are refunded by ﬁling returns for refund*1.
In case an excessive amount for taxes was ﬁled in the tax return because of incorrect
calculation, taxpayers are entitled to request for correction*2, if either taxes were overpaid or
the amount of the refund was too small.
The NTA works for proper and quick processing of returns for refund and requests forcorrection, based on relevant laws and regulations.

Remedy for Infringementof Taxpayer Rights(millions)25

Filing returns for refund and request for correction

Tax Administration Under
Increasing Globalization● Trend of individual tax return filers

Reference

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Self-completion of tax returns means that the taxpayers themselves prepare their tax returns andsubmit them to the Tax Offices. Under the principle of the self-assessment system in which taxpayers
voluntarily file proper tax returns and pay the tax, it is very important for them to understand the tax
system and prepare their tax returns by themselves. The NTA offers information related to taxes on the
NTA website to enable more taxpayers to voluntarily and properly file tax returns from home, while
making available on the same website IT services, such as the filing assistance on the NTA website
and e-Tax. Also, in order to promote the introduction of self-completion of tax returns, we are trying toestablish the proper structure of tax consultation and installing personal computers in the
self-assessment consultation center of the Tax Offices to encourage taxpayers to use the online filingassistance on the NTA website.
During the period when income tax returns are filed, more than 20 million applications are
submitted every year, so we are working with our limited headcount to efficiently execute the overall
process of accepting tax returns while improving convenience for taxpayers.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The number of persons who filed income tax returns rose to 23.67 million in 2009, which isequivalent to one out of every five Japanese people filing tax returns. Of those filing returns, thenumber of filers who requested refunds topped 12 million, accounting for more than half of the persons
filing income tax returns.
To respond to the growing and diversifying number of tax return filers, and enhance the level ofsatisfaction of taxpayers, the NTA is innovating to minimize costs related to filing tax returns, and toprovide quality service.

In response to taxpayers’ desire to accept requests for tax consultations on weekends during thefiling period for final tax returns, some Tax Offices are accepting tax returns and respond to tax
consultations on two Sundays during the filing period for final tax returns. This is done in Tax Offices
and at temporary venues for filing returns outside of Tax Offices. As a result of our consideration of
taxpayer convenience while striving to efficient execution, this is highly valued every year by salaried
workers who cannot come to self-assessment locations on weekdays and by other taxpayers.
For the 2009 tax returns, the offices were open on February 21 and 28, 2010, during which
265,000 income tax returns were filed.

About the NTA（2）Tax consultation on Sunday

2 Filing for tax return

Statistics*1 Interest on refund is added if certain requirements are met.
*2 Requests for correction can be filed during the required period of time, by submitting to the Tax Offices the written request containing the incorrect
descriptions.

1314

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment（1）Promoting self-completion of tax returns

23.67

15
10

0

’67 ’68 ’69 ’70 ’71 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

When taxpayers suffer disasters(1) If the occurrence of a natural disaster prevents taxpayers from ﬁling tax returns andpaying taxes by the due date, taxpayers can apply for postponement to the District
Director of the Tax Oﬃces with jurisdiction. Upon approval, the due date is postponed towithin a range of two months after the day when the reason ceases to exist.
(2) When earthquakes, ﬁre, windstorm, ﬂood, or other disaster cause damage to taxpayersʼ
houses and household goods, taxpayers can make a choice for ﬁling tax returns: ① thededuction for casualty losses pursuant to the Income Tax Act, ② tax reduction or
exemption pursuant to the Act on Reduction or Release, Deferment of Collection and Other
Measures Related to Tax Imposed on Disaster Victims, whichever is favorable to thetaxpayer, to have their income taxes reduced in whole or in part.
(3) In the event earthquakes, ﬁre, windstorm, ﬂood, or other disaster caused considerable
damage to property, if there is a national tax due date within one year from the datedamage was suﬀered, the taxpayer can submit an application to the District Director of theTax Oﬃces within two months from the date when such disaster ended, and upon approval,
the tax payment is postponed to no later than one year from the due date for tax payment.
(4) If taxpayers are prevented from paying taxes at one time as a result of a disaster or theft,by applying to the District Director of the Tax Oﬃce, upon approval, the tax payment is
postponed by no later than one year within the limit of the amount recognized as
unpayable at one time.

Future Challenges

5

Reference

Administrationof the Liquor Industry

20

If the amount of withholding tax or estimated tax prepayments are larger than the amountbased on real annual income, taxes overpaid are refunded by ﬁling returns for refund*1.
In case an excessive amount for taxes was ﬁled in the tax return because of incorrect
calculation, taxpayers are entitled to request for correction*2, if either taxes were overpaid or
the amount of the refund was too small.
The NTA works for proper and quick processing of returns for refund and requests forcorrection, based on relevant laws and regulations.

Remedy for Infringementof Taxpayer Rights(millions)25

Filing returns for refund and request for correction

Tax Administration Under
Increasing Globalization● Trend of individual tax return filers

Reference

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Self-completion of tax returns means that the taxpayers themselves prepare their tax returns andsubmit them to the Tax Offices. Under the principle of the self-assessment system in which taxpayers
voluntarily file proper tax returns and pay the tax, it is very important for them to understand the tax
system and prepare their tax returns by themselves. The NTA offers information related to taxes on the
NTA website to enable more taxpayers to voluntarily and properly file tax returns from home, while
making available on the same website IT services, such as the filing assistance on the NTA website
and e-Tax. Also, in order to promote the introduction of self-completion of tax returns, we are trying toestablish the proper structure of tax consultation and installing personal computers in the
self-assessment consultation center of the Tax Offices to encourage taxpayers to use the online filingassistance on the NTA website.
During the period when income tax returns are filed, more than 20 million applications are
submitted every year, so we are working with our limited headcount to efficiently execute the overall
process of accepting tax returns while improving convenience for taxpayers.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The number of persons who filed income tax returns rose to 23.67 million in 2009, which isequivalent to one out of every five Japanese people filing tax returns. Of those filing returns, thenumber of filers who requested refunds topped 12 million, accounting for more than half of the persons
filing income tax returns.
To respond to the growing and diversifying number of tax return filers, and enhance the level ofsatisfaction of taxpayers, the NTA is innovating to minimize costs related to filing tax returns, and toprovide quality service.

In response to taxpayers’ desire to accept requests for tax consultations on weekends during thefiling period for final tax returns, some Tax Offices are accepting tax returns and respond to tax
consultations on two Sundays during the filing period for final tax returns. This is done in Tax Offices
and at temporary venues for filing returns outside of Tax Offices. As a result of our consideration of
taxpayer convenience while striving to efficient execution, this is highly valued every year by salaried
workers who cannot come to self-assessment locations on weekdays and by other taxpayers.
For the 2009 tax returns, the offices were open on February 21 and 28, 2010, during which
265,000 income tax returns were filed.

About the NTA（2）Tax consultation on Sunday

2 Filing for tax return

Statistics*1 Interest on refund is added if certain requirements are met.
*2 Requests for correction can be filed during the required period of time, by submitting to the Tax Offices the written request containing the incorrect
descriptions.

1314

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment(thousands)

2006

2007

2008

Number of examinations

474

466

332

Number of cases by brief contact

658

698

732

● The undeclared income amount of self-assessed income tax

and corporation tax found in field examinations, per case(¥million)
14
Self-assessed income tax
12

Corporation tax

10

To verify the trust placed in the tax administration, it is important that tax laws are applied withthe proper interpretation of laws and regulations upon fact finding. To this end, we always try toprocess taxation after correctly interpreting the assertions made by taxpayers and studying the laws
and regulations based on accurate fact finding. On this occasion, we are thoroughly adhering to theprocedures and processes to ascertain whether legal requirements are properly met.

Examination of consumption tax○ Examples of malicious fraudin consumption tax

Using a ﬁctitious contract tohave acquired the ﬁxed
assets such as real estate,machines and equipment, afraudulent consumption tax
refund was received.
● Although personnel costs
paid by a business are nottax deductible transactions,pretending that the costs
were outsourcing costs foraﬃliated companies (tempagencies, etc.) which are
deductible transactions, thus
a fraudulent consumption tax
refund was received.
●● Examination of consumption tax(individual and corporation)

Number of examination cases
Number of undeclared cases(thousands)
250

200

150
233

100
141
50

0

142
78

Operation year 2004

Future Challenges

Operation year 2008

8
6
4

8.99

8.87

2004

2008

12.02

9.11

2004

2008 (operation
year)

2
0

Statistics

Tax examinations aim to check thecontent of tax returns based on taxpayers’
records, and if mistakes are discovered, to
ask taxpayers to correct them. We place
great importance on the examination ofmalicious taxpayers using a sufficientnumber of days for the procedures.
The field examination in operation year
2008 found ¥8.87 million*1 of undeclared
income per case for self-assessed income
tax, and ¥9.11 million for corporation tax.

c. Proper examinations

Administrationof the Liquor Industry

Operation year

Consumption tax is one of the important taxes, and is similar to a deposit, which is why it attracts
the attention of the public. Therefore, proper tax administration is especially necessary. In particular,
as there are cases where fraudulent consumption tax refunds were claimed through the filing of false
returns, we work to prevent the filing of fraudulent refunds by instituting sufficient examinations of thefacts. As a result, if the reasons for a tax refund are not clear, we make contact through tax
examinations, etc.

Remedy for Infringementof Taxpayer Rights● Number of cases related to tax examinations

b. Response to tax returns for fraudulent refund of consumption tax

Tax Administration Under
Increasing Globalization

In order to realize proper and fair taxation, the NTA takes care of its administration processes in aprioritized manner by balancing its allocation of limited human and material resources. For example, ismakes full use of its organizational strengths to conduct accurate examinations of large-scale and malicious
taxpayers, while making only brief and simple contacts for handling insignificant corrections.
A variety of strict tax examinations are conducted for taxpayers that attempt to evade their tax obligations.
The subjects of tax examinations are selected through the KSK system, which contains data related toincome tax returns, corporation tax returns, and a variety of information sources, from the viewpoint ofbusiness type, business form, and business size. With the information, recognized as important to realize
proper and fair taxation, we have in place a structure to efficiently collect information which is very effective
for examinations.

For taxpayers who expect a high income but who filed a low income or did not file, we are
addressing tax examinations keeping in mind diversification and globalization of asset management.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

3 Promotion of proper and fair tax administration

a. Response to increasingly diverse and international asset management

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Some of the local taxes have the same tax base as that of national taxes and are paid by the same
taxpayers as for national taxes. In order to simplify the ﬁling procedures for taxpayers, coordination is
maintained between the national and local tax authorities in the aspects of the tax system andexecution of tax administration. For example, in the aspect of the tax system, taxpayers who ﬁle an
income tax return are not required to ﬁle the same for business tax nor inhabitantʼs tax, both of which
are local taxes. Also, the same procedures can process tax-return ﬁling for consumption tax and local
consumption tax. In the execution aspect of tax administration, many municipalities provide tax
consultations for income tax. In addition, the national tax authorities and local tax authorities work
together holding brieﬁngs for tax return ﬁling or to publicize tax-related information. Cooperation in
the area of tax administration is conducted based on consultations between the national tax
authorities and various local authorities, including prefectural and municipal oﬃcials.

About the NTA（1）Priority matters addressed in the tax examinations

Cooperation with the local tax authorities*1 Amount related to special and general field examinations.

1516

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment(thousands)

2006

2007

2008

Number of examinations

474

466

332

Number of cases by brief contact

658

698

732

● The undeclared income amount of self-assessed income tax

and corporation tax found in field examinations, per case(¥million)
14
Self-assessed income tax
12

Corporation tax

10

To verify the trust placed in the tax administration, it is important that tax laws are applied withthe proper interpretation of laws and regulations upon fact finding. To this end, we always try toprocess taxation after correctly interpreting the assertions made by taxpayers and studying the laws
and regulations based on accurate fact finding. On this occasion, we are thoroughly adhering to theprocedures and processes to ascertain whether legal requirements are properly met.

Examination of consumption tax○ Examples of malicious fraudin consumption tax

Using a ﬁctitious contract tohave acquired the ﬁxed
assets such as real estate,machines and equipment, afraudulent consumption tax
refund was received.
● Although personnel costs
paid by a business are nottax deductible transactions,pretending that the costs
were outsourcing costs foraﬃliated companies (tempagencies, etc.) which are
deductible transactions, thus
a fraudulent consumption tax
refund was received.
●● Examination of consumption tax(individual and corporation)

Number of examination cases
Number of undeclared cases(thousands)
250

200

150
233

100
141
50

0

142
78

Operation year 2004

Future Challenges

Operation year 2008

8
6
4

8.99

8.87

2004

2008

12.02

9.11

2004

2008 (operation
year)

2
0

Statistics

Tax examinations aim to check thecontent of tax returns based on taxpayers’
records, and if mistakes are discovered, to
ask taxpayers to correct them. We place
great importance on the examination ofmalicious taxpayers using a sufficientnumber of days for the procedures.
The field examination in operation year
2008 found ¥8.87 million*1 of undeclared
income per case for self-assessed income
tax, and ¥9.11 million for corporation tax.

c. Proper examinations

Administrationof the Liquor Industry

Operation year

Consumption tax is one of the important taxes, and is similar to a deposit, which is why it attracts
the attention of the public. Therefore, proper tax administration is especially necessary. In particular,
as there are cases where fraudulent consumption tax refunds were claimed through the filing of false
returns, we work to prevent the filing of fraudulent refunds by instituting sufficient examinations of thefacts. As a result, if the reasons for a tax refund are not clear, we make contact through tax
examinations, etc.

Remedy for Infringementof Taxpayer Rights● Number of cases related to tax examinations

b. Response to tax returns for fraudulent refund of consumption tax

Tax Administration Under
Increasing Globalization

In order to realize proper and fair taxation, the NTA takes care of its administration processes in aprioritized manner by balancing its allocation of limited human and material resources. For example, ismakes full use of its organizational strengths to conduct accurate examinations of large-scale and malicious
taxpayers, while making only brief and simple contacts for handling insignificant corrections.
A variety of strict tax examinations are conducted for taxpayers that attempt to evade their tax obligations.
The subjects of tax examinations are selected through the KSK system, which contains data related toincome tax returns, corporation tax returns, and a variety of information sources, from the viewpoint ofbusiness type, business form, and business size. With the information, recognized as important to realize
proper and fair taxation, we have in place a structure to efficiently collect information which is very effective
for examinations.

For taxpayers who expect a high income but who filed a low income or did not file, we are
addressing tax examinations keeping in mind diversification and globalization of asset management.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

3 Promotion of proper and fair tax administration

a. Response to increasingly diverse and international asset management

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Some of the local taxes have the same tax base as that of national taxes and are paid by the same
taxpayers as for national taxes. In order to simplify the ﬁling procedures for taxpayers, coordination is
maintained between the national and local tax authorities in the aspects of the tax system andexecution of tax administration. For example, in the aspect of the tax system, taxpayers who ﬁle an
income tax return are not required to ﬁle the same for business tax nor inhabitantʼs tax, both of which
are local taxes. Also, the same procedures can process tax-return ﬁling for consumption tax and local
consumption tax. In the execution aspect of tax administration, many municipalities provide tax
consultations for income tax. In addition, the national tax authorities and local tax authorities work
together holding brieﬁngs for tax return ﬁling or to publicize tax-related information. Cooperation in
the area of tax administration is conducted based on consultations between the national tax
authorities and various local authorities, including prefectural and municipal oﬃcials.

About the NTA（1）Priority matters addressed in the tax examinations

Cooperation with the local tax authorities*1 Amount related to special and general field examinations.

1516

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

149

29,026（25,475）

138
（171）

Number of cases
referred to theprosecutor

cases

cases

cases

2008

211

208

2009

213

210

※ Figures of tax evasion include additional tax.

● Ruling status of criminal investigation cases

Fiscalyear

Number of
rulings(1)
cases

Number of convictions
Term of prison Amount of fines
Number of Percentage of with prison sentences Amount of tax
sentence
per person
convictions cases convictedevadedpercase
without probation
per person(company)(2)(2)/(1)
(4)
(3)
(5)
(6)
cases

％

persons¥millionmonths¥million

2008

154

154

100.0

9

79

16.1

22

2009

141

141

100.0

7

86

14.6

17

※ (3) to (6) exclude those combined with non-tax crimes.
“Amount of tax evaded” is the tax amount evaded through fraud and other illegal acts.

Future Challenges
Statistics

17

153

¥million
35,070（24,942）

Amount of tax
evasion per case(portion referredto the prosecutor)¥million
169（163）

Number ofcases closed

Administrationof the Liquor Industry

To impose correct taxes on taxpayers who intentionally evaded taxes using fraud or other illegal
measures, and to pursue criminal responsibility for such antisocial behavior, the NTA may conduct tax
examinations using methods similar to those used in criminal investigations by exercising its
compulsory authority. Such examinations will be conducted apart from general tax examinations.
Based on the findings, the NTA may issue an accusation and request that public prosecutors launch
public prosecution of tax evaders. This is known as the criminal investigation system, and it pursues
criminal responsibility of malicious tax evaders. Taking advantage of the fact that punishing one serves
as a warning to all, this system has an important mission in enabling proper and fair taxation andmaintaining the self-assessment system.
As economic transactions become more distant and international and financial transactions diversify,means of tax evasion and methods of concealing illegal funds are becoming more complex andsophisticated. Thus criminal investigations operate in an increasingly difficult environment. In these

Total amount oftax evasion(portion referred tothe prosecutor)

Number ofcases conductedFiscal year

Remedy for Infringementof Taxpayer Rights（4）Criminal investigation● Status of criminal investigations

Tax Administration Under
Increasing Globalization

The NTA collects a variety of● Number of information items collected
information on off-the-books and faketransactions found in the course of tax
Information under mandatory submission(thousands)
Other information
examinations, in addition to the
200,000
withholding records of employment
income, payment record of interest,and others whose submission is150,000
required pursuant to the provisions of
the tax laws.
The NTA currently collects 300
100,000
194,388
million items of information each year,
and this information and data on tax
111,497
returns are centrally managed in the
104,01150,000
KSK system and used for accurate
50,423
guidance as well as tax examinations.
In order to keep pace with the0
Operation year 2004
Operation year 2008
expansion of economy and society,globalization, and introduction of theadvanced use of IT in recent years, weare aggressively addressing the collection of information on new forms of business transactions,transactions with overseas companies, overseas investment, and electronic commerce transactions via
the Internet.

Improvement of Taxpayer
Convenience andAdministrative Efficiency（3）Information collection

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The withholding tax system finalizes the taxation process by doing year-end adjustments, which
eliminate the procedures for tax returns for a large portion of the over 50 million wage earners. The
withholding tax system is as important in tax administration as smooth operation of the self-assessment
system. To have withholding agents properly process withholding tax procedures and pay taxes, theNTA provides information and publicity about the withholding tax system by holding briefings about
year-end adjustment, distributing guidebooks and pamphlets, etc. Withholding taxes are deposits, andfor withholding agents who have not paid these by the due date, we provide efficient payment guidance,
reminding them of the payment in writing or by a telephone call. Strict and accurate actions are being
initiated against large-scale, malicious, and difficult-to-handle cases.

conditions, in order to achieve the aims of the criminal investigation system and continually fulfill their
duty to the public, investigators placed throughout Japan act strictly against tax evaders, who are public
enemies, taking all efforts to expose them.
In fiscal 2009, the NTA commenced 213 criminal investigations, processed 210 cases, including
those carried over from the previous fiscal year, of which it charged 149 cases that were forwarded to
public prosecutors. The total amount of tax evasion stood at about ¥29 billion, with an average amountof tax evasion at ¥171 million.
Tax evasion techniques that stand out are intentionally hiding sales, falsely recording higher costs,
or not declaring profit at all. Cases are also seen in which funds gained through tax evasion wereconcealed overseas.
In fiscal 2009, 141 cases were all convicted at the court of first instance with an average prison
sentence of 14.6 months and average fines amounting to about ¥17 million. Seven persons weresentenced to prison without probation. Prison sentences without probation have been handed down
every year since 1980.

About the NTA（2）Proper withholding tax system operation18

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

149

29,026（25,475）

138
（171）

Number of cases
referred to theprosecutor

cases

cases

cases

2008

211

208

2009

213

210

※ Figures of tax evasion include additional tax.

● Ruling status of criminal investigation cases

Fiscalyear

Number of
rulings(1)
cases

Number of convictions
Term of prison Amount of fines
Number of Percentage of with prison sentences Amount of tax
sentence
per person
convictions cases convictedevadedpercase
without probation
per person(company)(2)(2)/(1)
(4)
(3)
(5)
(6)
cases

％

persons¥millionmonths¥million

2008

154

154

100.0

9

79

16.1

22

2009

141

141

100.0

7

86

14.6

17

※ (3) to (6) exclude those combined with non-tax crimes.
“Amount of tax evaded” is the tax amount evaded through fraud and other illegal acts.

Future Challenges
Statistics

17

153

¥million
35,070（24,942）

Amount of tax
evasion per case(portion referredto the prosecutor)¥million
169（163）

Number ofcases closed

Administrationof the Liquor Industry

To impose correct taxes on taxpayers who intentionally evaded taxes using fraud or other illegal
measures, and to pursue criminal responsibility for such antisocial behavior, the NTA may conduct tax
examinations using methods similar to those used in criminal investigations by exercising its
compulsory authority. Such examinations will be conducted apart from general tax examinations.
Based on the findings, the NTA may issue an accusation and request that public prosecutors launch
public prosecution of tax evaders. This is known as the criminal investigation system, and it pursues
criminal responsibility of malicious tax evaders. Taking advantage of the fact that punishing one serves
as a warning to all, this system has an important mission in enabling proper and fair taxation andmaintaining the self-assessment system.
As economic transactions become more distant and international and financial transactions diversify,means of tax evasion and methods of concealing illegal funds are becoming more complex andsophisticated. Thus criminal investigations operate in an increasingly difficult environment. In these

Total amount oftax evasion(portion referred tothe prosecutor)

Number ofcases conductedFiscal year

Remedy for Infringementof Taxpayer Rights（4）Criminal investigation● Status of criminal investigations

Tax Administration Under
Increasing Globalization

The NTA collects a variety of● Number of information items collected
information on off-the-books and faketransactions found in the course of tax
Information under mandatory submission(thousands)
Other information
examinations, in addition to the
200,000
withholding records of employment
income, payment record of interest,and others whose submission is150,000
required pursuant to the provisions of
the tax laws.
The NTA currently collects 300
100,000
194,388
million items of information each year,
and this information and data on tax
111,497
returns are centrally managed in the
104,01150,000
KSK system and used for accurate
50,423
guidance as well as tax examinations.
In order to keep pace with the0
Operation year 2004
Operation year 2008
expansion of economy and society,globalization, and introduction of theadvanced use of IT in recent years, weare aggressively addressing the collection of information on new forms of business transactions,transactions with overseas companies, overseas investment, and electronic commerce transactions via
the Internet.

Improvement of Taxpayer
Convenience andAdministrative Efficiency（3）Information collection

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The withholding tax system finalizes the taxation process by doing year-end adjustments, which
eliminate the procedures for tax returns for a large portion of the over 50 million wage earners. The
withholding tax system is as important in tax administration as smooth operation of the self-assessment
system. To have withholding agents properly process withholding tax procedures and pay taxes, theNTA provides information and publicity about the withholding tax system by holding briefings about
year-end adjustment, distributing guidebooks and pamphlets, etc. Withholding taxes are deposits, andfor withholding agents who have not paid these by the due date, we provide efficient payment guidance,
reminding them of the payment in writing or by a telephone call. Strict and accurate actions are being
initiated against large-scale, malicious, and difficult-to-handle cases.

conditions, in order to achieve the aims of the criminal investigation system and continually fulfill their
duty to the public, investigators placed throughout Japan act strictly against tax evaders, who are public
enemies, taking all efforts to expose them.
In fiscal 2009, the NTA commenced 213 criminal investigations, processed 210 cases, including
those carried over from the previous fiscal year, of which it charged 149 cases that were forwarded to
public prosecutors. The total amount of tax evasion stood at about ¥29 billion, with an average amountof tax evasion at ¥171 million.
Tax evasion techniques that stand out are intentionally hiding sales, falsely recording higher costs,
or not declaring profit at all. Cases are also seen in which funds gained through tax evasion wereconcealed overseas.
In fiscal 2009, 141 cases were all convicted at the court of first instance with an average prison
sentence of 14.6 months and average fines amounting to about ¥17 million. Seven persons weresentenced to prison without probation. Prison sentences without probation have been handed down
every year since 1980.

About the NTA（2）Proper withholding tax system operation18

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

Tax examination

The NTA provides taxpayers with proper tax examinations and guidance to enable them toproperly file tax returns.

(1) Advance notice of tax examinations(2) The way to conduct tax examinations

Treatment and exemption from additional tax and delinquent tax

To encourage taxpayers to file tax returns and pay taxes properly, delinquent tax may be
imposed in addition to self-assessed income tax, corporation tax, etc., if tax returns are not properly
filed or taxes are not paid by the due date. There are also cases where an additional tax for a
deficient return, or for no return, or an additional tax for fraud are imposed.
Delinquenttax

Up to two months from the day
after the due date for tax payment

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

Annual rate of 4.3% (in 2010) ※Annual rate of 14.6%※ The annual rate may change due to financial conditions.

Returns are filed by the due date,but tax amount is understated.
Returns are not filed by the due date

Fraud Concealment Case

Additional tax for deficient
return (10% or 15%)Additional tax for
fraud case (35%)

Additional tax for no
return (15% or 20%)

Additional tax for
fraud case (40%)

Future Challenges

Where legitimate reasons are recognized with no causes attributable to taxpayers, additionaltax for deficient return or additional tax for no return will not be imposed.
Meanwhile, where certain requirements are met, namely, taxpayers may have been granted
postponement of tax payments due to disasters or may have failed to file returns or pay taxes due
to erroneous guidance by NTA officials, taxpayers may be exempted from all or part of a delinquenttax corresponding to the grace period. The NTA has set up rules for when no additional tax is
imposed, and has published the rules on the NTA website (Japanese only).

Administrationof the Liquor Industry

Additional
tax

Regular Case

Remedy for Infringementof Taxpayer Rights

When errors are found in tax returns by the tax examination, examiners explain thecontent of errors, etc., to taxpayers.
When recommending taxpayers to ﬁle amended returns for the purpose of correcting
errors in tax returns, examiners provide a document titled “About amended returns”, which
explains that a reinvestigation or reconsideration of the amended return cannot be requested,and describes the delinquent tax as well as additional tax. Furthermore, when there is a needfor guidance in respect of future return ﬁling and bookkeeping, the contents are explained,with the intention of providing taxpayers with opportunities to develop more in-depth
knowledge of taxes and to encourage them to ﬁle tax returns and pay tax voluntarily in the
future.
If a taxpayer does not cooperate with the Tax Oﬃceʼs request for an amended return, etc.,
the District Director of the Tax Oﬃce makes the correction or determination and sends a
Notice of Correction or Notice of Determination to the taxpayer.
When no errors are found in tax returns after a tax examination, the Tax Oﬃce performs
the following:① If no errors are found in the returns and no guidance is needed, District Director of theTax Oﬃce sends a written notiﬁcation of “Tax Examination Findings” to the taxpayer.
② If there is no need for submission of amended returns, but guidance is needed regarding
future tax returns, record keeping, or preparation and storage of books and documents,
examiners provide explanations to the taxpayer. Examiners also clearly communicates thatthe tax examination is closed.

Reference

Tax Administration Under
Increasing Globalization(3) Action taken after the completion of tax examination

Income, sales, expense payments, and other information involving taxpayers’ privacy arenecessary for tax calculation. Information about taxpayers’ trading partners may also sometimes berequired for tax examinations. If taxpayers’ privacy and information are easily leaked, taxpayers
cannot be expected to cooperate with the NTA. This may negatively affect smooth tax examinations.
Tax officials who have leaked confidential information obtained through tax examinations are
subject to a criminal penalty (up to two years in prisons or up to a ¥1 million fine) under the tax law,which is heavier than the penalty (up to one year in prison or up to a ¥500,000 fine) under the
National Public Service Act. The NTA conducts regular training of tax officials to thoroughly informthem of such penalty provisions. When interviewing taxpayers, tax officials consider their privacy
and refrain from interviewing them in their storefronts or in front of their homes.
Meanwhile, based on the purpose of the “Act on the Protection of Personal Information Held byAdministrative Organs”, the NTA is striving to conduct strict control of taxpayer information bymaking a periodic inspection of the status of control of administrative documents.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

When tax oﬃcials visit the residence or oﬃce of a taxpayer to conduct a tax examination,
they present identiﬁcation cards as tax oﬃcials with their photos and their names.
The process of tax examinations will proceed quickly and smoothly if taxpayers cooperateby presenting books and other documents that account for daily transactions to examiners,
and respond accurately to inquiries regarding the tax returns.
In order to minimize the burden on taxpayers, we conduct tax examinations as rapidly as
possible.
In principle, tax examinations are conducted in the presence of taxpayers.
Taxpayers may also have their CPTAs designated as tax proxies attend the tax
examination.

Strict control of information

Promotion of Tax Filingand Payment by
Proper Self-Assessment

In principle, taxpayers are notiﬁed in advance as to the date and time of tax examinations
by telephone so that we can conﬁrm taxpayersʼ availability. However, if there is a need for us
to conﬁrm the actual state of business aﬀairs, no prior notice is given.
Advance notice is given in about 80% of the income tax examinations and in about 90% ofcorporation tax examinations.

Reference

About the NTA

Reference

Statistics

19

20

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

Tax examination

The NTA provides taxpayers with proper tax examinations and guidance to enable them toproperly file tax returns.

(1) Advance notice of tax examinations(2) The way to conduct tax examinations

Treatment and exemption from additional tax and delinquent tax

To encourage taxpayers to file tax returns and pay taxes properly, delinquent tax may be
imposed in addition to self-assessed income tax, corporation tax, etc., if tax returns are not properly
filed or taxes are not paid by the due date. There are also cases where an additional tax for a
deficient return, or for no return, or an additional tax for fraud are imposed.
Delinquenttax

Up to two months from the day
after the due date for tax payment

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

Annual rate of 4.3% (in 2010) ※Annual rate of 14.6%※ The annual rate may change due to financial conditions.

Returns are filed by the due date,but tax amount is understated.
Returns are not filed by the due date

Fraud Concealment Case

Additional tax for deficient
return (10% or 15%)Additional tax for
fraud case (35%)

Additional tax for no
return (15% or 20%)

Additional tax for
fraud case (40%)

Future Challenges

Where legitimate reasons are recognized with no causes attributable to taxpayers, additionaltax for deficient return or additional tax for no return will not be imposed.
Meanwhile, where certain requirements are met, namely, taxpayers may have been granted
postponement of tax payments due to disasters or may have failed to file returns or pay taxes due
to erroneous guidance by NTA officials, taxpayers may be exempted from all or part of a delinquenttax corresponding to the grace period. The NTA has set up rules for when no additional tax is
imposed, and has published the rules on the NTA website (Japanese only).

Administrationof the Liquor Industry

Additional
tax

Regular Case

Remedy for Infringementof Taxpayer Rights

When errors are found in tax returns by the tax examination, examiners explain thecontent of errors, etc., to taxpayers.
When recommending taxpayers to ﬁle amended returns for the purpose of correcting
errors in tax returns, examiners provide a document titled “About amended returns”, which
explains that a reinvestigation or reconsideration of the amended return cannot be requested,and describes the delinquent tax as well as additional tax. Furthermore, when there is a needfor guidance in respect of future return ﬁling and bookkeeping, the contents are explained,with the intention of providing taxpayers with opportunities to develop more in-depth
knowledge of taxes and to encourage them to ﬁle tax returns and pay tax voluntarily in the
future.
If a taxpayer does not cooperate with the Tax Oﬃceʼs request for an amended return, etc.,
the District Director of the Tax Oﬃce makes the correction or determination and sends a
Notice of Correction or Notice of Determination to the taxpayer.
When no errors are found in tax returns after a tax examination, the Tax Oﬃce performs
the following:① If no errors are found in the returns and no guidance is needed, District Director of theTax Oﬃce sends a written notiﬁcation of “Tax Examination Findings” to the taxpayer.
② If there is no need for submission of amended returns, but guidance is needed regarding
future tax returns, record keeping, or preparation and storage of books and documents,
examiners provide explanations to the taxpayer. Examiners also clearly communicates thatthe tax examination is closed.

Reference

Tax Administration Under
Increasing Globalization(3) Action taken after the completion of tax examination

Income, sales, expense payments, and other information involving taxpayers’ privacy arenecessary for tax calculation. Information about taxpayers’ trading partners may also sometimes berequired for tax examinations. If taxpayers’ privacy and information are easily leaked, taxpayers
cannot be expected to cooperate with the NTA. This may negatively affect smooth tax examinations.
Tax officials who have leaked confidential information obtained through tax examinations are
subject to a criminal penalty (up to two years in prisons or up to a ¥1 million fine) under the tax law,which is heavier than the penalty (up to one year in prison or up to a ¥500,000 fine) under the
National Public Service Act. The NTA conducts regular training of tax officials to thoroughly informthem of such penalty provisions. When interviewing taxpayers, tax officials consider their privacy
and refrain from interviewing them in their storefronts or in front of their homes.
Meanwhile, based on the purpose of the “Act on the Protection of Personal Information Held byAdministrative Organs”, the NTA is striving to conduct strict control of taxpayer information bymaking a periodic inspection of the status of control of administrative documents.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

When tax oﬃcials visit the residence or oﬃce of a taxpayer to conduct a tax examination,
they present identiﬁcation cards as tax oﬃcials with their photos and their names.
The process of tax examinations will proceed quickly and smoothly if taxpayers cooperateby presenting books and other documents that account for daily transactions to examiners,
and respond accurately to inquiries regarding the tax returns.
In order to minimize the burden on taxpayers, we conduct tax examinations as rapidly as
possible.
In principle, tax examinations are conducted in the presence of taxpayers.
Taxpayers may also have their CPTAs designated as tax proxies attend the tax
examination.

Strict control of information

Promotion of Tax Filingand Payment by
Proper Self-Assessment

In principle, taxpayers are notiﬁed in advance as to the date and time of tax examinations
by telephone so that we can conﬁrm taxpayersʼ availability. However, if there is a need for us
to conﬁrm the actual state of business aﬀairs, no prior notice is given.
Advance notice is given in about 80% of the income tax examinations and in about 90% ofcorporation tax examinations.

Reference

About the NTA

Reference

Statistics

19

20

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment（1）Establishment of voluntary tax payment

The public is strongly aware of consumption tax, and delinquent consumption tax is anincreasingly large percentage of all delinquencies each year. Therefore, certain handling is
executed through Regional Taxation Bureaus and Tax Offices in order to conclude delinquency
cases containing delinquent consumption taxes. The NTA is working to reduce the balance ofdelinquent consumption taxes.

Statistics

21

c. Certain handling of consumption tax delinquency cases

Future Challenges*1 Of the amount determined for collection, if one includes the amount to be collected after the current fiscal year due to a reason such as postponement
request, then the collection ratio was 99.2%.

Difficult to handle cases require considerable volume of administrative work and use ofadvanced collection techniques in its proceedings. Therefore, an organizational response is taken,
such as execution of disposition for delinquent tax by wide geographical management and timely
project team formation. The NTA also actively uses legal means to collect delinquent tax, e.g. by aplaintiff lawsuit such as bringing a lawsuit to demand the rescission of fraudulent act*2.

Administrationof the Liquor Industry

For the payment of national taxes, taxpayers are able to make tax payments at night or on
holidays at more than 40,000 convenience stores when ﬁnancial institutions or the Tax Oﬃces
are closed. The number of tax payments made at convenience stores came to about 1.03
million cases from January through December 2009.
When making a convenience store tax payment, a tax payment slip with bar codes isneeded with the amount limited to less than ¥300,000. The bar-coded vouchers are issued by
the Regional Taxation Bureaus and Tax Oﬃces with jurisdiction, in the following cases:① If the determined tax amount is notiﬁed before the due date (estimated income tax
prepayment, etc.)② If the tax payment is demanded by letter or telephone (for all tax items)③ If the tax payment is under the oﬃcial assessment system (for various additional taxes)④ If the taxpayer requested the issuance of tax payment slips for the determined tax amount(for all tax items)b. Priority handling of difficult to handle cases

Remedy for Infringementof Taxpayer Rights

Tax payment at convenience stores

When collecting delinquent tax in a large and malicious delinquency case, strict and resoluteaction is taken, such as executing strict and accurate disposition for delinquent tax by search,
seizure, auction, etc.
Particularly strict action is taken in especially malicious cases with an attempt to hide assets orotherwise evade execution of disposition for delinquent tax. This crime of evading disposition fordelinquent tax*1 is aggressively referred to the prosecutor.

Tax Administration Under
Increasing Globalization

Direct payment is a new payment method, in which the Tax Oﬃce is notiﬁed in advance.
After using e-Tax for online tax return ﬁling and payment information registration, instead of
via the ﬁnancial institutionʼs internet banking, a simple click operation transfers from thedeposit account reported. This enables online tax payment immediately or on a speciﬁed date.
Direct payment requires that the ﬁnancial institution used by the taxpayer is compatible
with direct payment. This is why the NTA is working to expand the number of ﬁnancial
institutions in which direct payment can be used, by requesting that non-compatible ﬁnancial
institutions become compatible, etc. As of the end of March 2010, it was usable in 52
ﬁnancial institutions.

a. Strict and resolute handling of large and malicious delinquent cases

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Direct payment (direct type online payment of national tax)

Delinquency signifies that the national tax was not paid by the due date and a payment demand
letter was sent. At the end of FY2008, the tax delinquency amount was about ¥1,553.8 billion.
The NTA considers it important that first of all delinquency not occur. The entire national tax
organization is working for certain collection of national tax, to prevent delinquency and for timely
collection.
In addition, if national tax which has become delinquent is left as is, this does not maintain fairness
with the vast majority of taxpayers who are paying national tax by the due date, thus proper and faircollection would not be achieved. Therefore, the NTA endeavors to start early and obtain payment
quickly, and also works to push to collect on delinquencies under the following basic policies.
Executing disposition for delinquent tax greatly impacts taxpayer rights and obligations. Therefore,in collection of delinquent tax, appropriate action is taken based on laws and regulations, whileconsidering the actual situation of each delinquent taxpayer, based on an accurate understanding of
the facts. Seizure or auction or other disposition for delinquent tax can be done. On the other hand, tax
payment relief measures can be provided, such as postponement of tax payment, or suspension of
conversion into cash.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Self-assessed national tax becomes revenue when paid into the national treasury. In FY2008,
about ¥49.1 trillion of taxation (amount determined for collection) was self-assessed in Tax Offices, etc.
Of this, about ¥48.1 trillion of tax (collected amount) was paid into the national treasury within the fiscal
year, for a 98.1%*1 collection ratio.
National tax is in principle under a self-assessment system, in which the taxpayer does
self-assessment, and pays that tax amount by the due date. Therefore, the NTA works on publicity sothat due date is not forgotten and payments are not made late. Also, for self-assessed income tax andsole business proprietor’s consumption taxes which are continually self-assessment and paid, the NTA
provides guidance on the possibility of using transfer tax payment from a deposit account. In 2004, it
became possible to pay national taxes from home or office by e-Tax. Payments in convenience stores
began in January 2008. Direct payment was introduced as a new payment means in September 2009.
The NTA is thus working to enhance its taxpayer services.
A written notice is sent in advance to taxpayers who paid after the due date the previous time. Afterthe due date is passed, a phone call is placed to taxpayers before the payment demand letter is sent.
The NTA is thus working to prevent delinquencies.

（2）Reduction of tax delinquency

About the NTA

4 Reliable tax payment*1 If actions such as hiding of assets are done to evade seizure or other disposition for delinquent tax, up to 3 years in prison or up to a ¥2.5 million fine canbe imposed.
*2 A lawsuit to demand the rescission of fraudulent act is a lawsuit to negate the validity of a legal act (fraudulent act) between the delinquent person and third
party, where such act harms the claimant (country). The lawsuit aims to take back from the third party that asset separated from the delinquent taxpayer, andreturn it to the delinquent taxpayer (refer to Act on General Rules for National Tax, Article 42, and the Civil Code, Article 424).

22

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment（1）Establishment of voluntary tax payment

The public is strongly aware of consumption tax, and delinquent consumption tax is anincreasingly large percentage of all delinquencies each year. Therefore, certain handling is
executed through Regional Taxation Bureaus and Tax Offices in order to conclude delinquency
cases containing delinquent consumption taxes. The NTA is working to reduce the balance ofdelinquent consumption taxes.

Statistics

21

c. Certain handling of consumption tax delinquency cases

Future Challenges*1 Of the amount determined for collection, if one includes the amount to be collected after the current fiscal year due to a reason such as postponement
request, then the collection ratio was 99.2%.

Difficult to handle cases require considerable volume of administrative work and use ofadvanced collection techniques in its proceedings. Therefore, an organizational response is taken,
such as execution of disposition for delinquent tax by wide geographical management and timely
project team formation. The NTA also actively uses legal means to collect delinquent tax, e.g. by aplaintiff lawsuit such as bringing a lawsuit to demand the rescission of fraudulent act*2.

Administrationof the Liquor Industry

For the payment of national taxes, taxpayers are able to make tax payments at night or on
holidays at more than 40,000 convenience stores when ﬁnancial institutions or the Tax Oﬃces
are closed. The number of tax payments made at convenience stores came to about 1.03
million cases from January through December 2009.
When making a convenience store tax payment, a tax payment slip with bar codes isneeded with the amount limited to less than ¥300,000. The bar-coded vouchers are issued by
the Regional Taxation Bureaus and Tax Oﬃces with jurisdiction, in the following cases:① If the determined tax amount is notiﬁed before the due date (estimated income tax
prepayment, etc.)② If the tax payment is demanded by letter or telephone (for all tax items)③ If the tax payment is under the oﬃcial assessment system (for various additional taxes)④ If the taxpayer requested the issuance of tax payment slips for the determined tax amount(for all tax items)b. Priority handling of difficult to handle cases

Remedy for Infringementof Taxpayer Rights

Tax payment at convenience stores

When collecting delinquent tax in a large and malicious delinquency case, strict and resoluteaction is taken, such as executing strict and accurate disposition for delinquent tax by search,
seizure, auction, etc.
Particularly strict action is taken in especially malicious cases with an attempt to hide assets orotherwise evade execution of disposition for delinquent tax. This crime of evading disposition fordelinquent tax*1 is aggressively referred to the prosecutor.

Tax Administration Under
Increasing Globalization

Direct payment is a new payment method, in which the Tax Oﬃce is notiﬁed in advance.
After using e-Tax for online tax return ﬁling and payment information registration, instead of
via the ﬁnancial institutionʼs internet banking, a simple click operation transfers from thedeposit account reported. This enables online tax payment immediately or on a speciﬁed date.
Direct payment requires that the ﬁnancial institution used by the taxpayer is compatible
with direct payment. This is why the NTA is working to expand the number of ﬁnancial
institutions in which direct payment can be used, by requesting that non-compatible ﬁnancial
institutions become compatible, etc. As of the end of March 2010, it was usable in 52
ﬁnancial institutions.

a. Strict and resolute handling of large and malicious delinquent cases

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Direct payment (direct type online payment of national tax)

Delinquency signifies that the national tax was not paid by the due date and a payment demand
letter was sent. At the end of FY2008, the tax delinquency amount was about ¥1,553.8 billion.
The NTA considers it important that first of all delinquency not occur. The entire national tax
organization is working for certain collection of national tax, to prevent delinquency and for timely
collection.
In addition, if national tax which has become delinquent is left as is, this does not maintain fairness
with the vast majority of taxpayers who are paying national tax by the due date, thus proper and faircollection would not be achieved. Therefore, the NTA endeavors to start early and obtain payment
quickly, and also works to push to collect on delinquencies under the following basic policies.
Executing disposition for delinquent tax greatly impacts taxpayer rights and obligations. Therefore,in collection of delinquent tax, appropriate action is taken based on laws and regulations, whileconsidering the actual situation of each delinquent taxpayer, based on an accurate understanding of
the facts. Seizure or auction or other disposition for delinquent tax can be done. On the other hand, tax
payment relief measures can be provided, such as postponement of tax payment, or suspension of
conversion into cash.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Self-assessed national tax becomes revenue when paid into the national treasury. In FY2008,
about ¥49.1 trillion of taxation (amount determined for collection) was self-assessed in Tax Offices, etc.
Of this, about ¥48.1 trillion of tax (collected amount) was paid into the national treasury within the fiscal
year, for a 98.1%*1 collection ratio.
National tax is in principle under a self-assessment system, in which the taxpayer does
self-assessment, and pays that tax amount by the due date. Therefore, the NTA works on publicity sothat due date is not forgotten and payments are not made late. Also, for self-assessed income tax andsole business proprietor’s consumption taxes which are continually self-assessment and paid, the NTA
provides guidance on the possibility of using transfer tax payment from a deposit account. In 2004, it
became possible to pay national taxes from home or office by e-Tax. Payments in convenience stores
began in January 2008. Direct payment was introduced as a new payment means in September 2009.
The NTA is thus working to enhance its taxpayer services.
A written notice is sent in advance to taxpayers who paid after the due date the previous time. Afterthe due date is passed, a phone call is placed to taxpayers before the payment demand letter is sent.
The NTA is thus working to prevent delinquencies.

（2）Reduction of tax delinquency

About the NTA

4 Reliable tax payment*1 If actions such as hiding of assets are done to evade seizure or other disposition for delinquent tax, up to 3 years in prison or up to a ¥2.5 million fine canbe imposed.
*2 A lawsuit to demand the rescission of fraudulent act is a lawsuit to negate the validity of a legal act (fraudulent act) between the delinquent person and third
party, where such act harms the claimant (country). The lawsuit aims to take back from the third party that asset separated from the delinquent taxpayer, andreturn it to the delinquent taxpayer (refer to Act on General Rules for National Tax, Article 42, and the Civil Code, Article 424).

22

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment(¥billion)
3,000

2,660.6 2,703.1

2,500

2,051.6

2,000

1,000

1,169.1

1,704.8

2,498.0

2,666.8
2,484.2

2,251.9
2,022.8

1,867.3 1,784.4

1,684.4 1,615.1
1,553.8

500
0

’89

’90

’91

’92

’93

’94

’95

’96

’97

’98

※1 Figures are current cases in the process of collection of delinquent taxes.
※2 Figures for local consumption tax are not included.

’99

’00

’01

’02

’03

’04

614.6 632.3

600
335.9

386.1

’08
(fiscal year)

578.3

529.6

424.2

488.5

487.5

465.5

459.2

200

54.8

’04

’05

’06

’07

453.7

98.9

14.1

’89

’90

’91

’92

’93

’94

’95

’96

’97

’98

’99

’00

’01

’02

’03

(%)
50.0

44.2

20.0
11.1

10.0

2.7
0.0 1.2

’89

3.9

’90

13.4
5.8

’91

8.8

’92

11.8

’93

28.1
27.4

27.4

13.4

14.5

15.7

’94

’95

’96

24.9

25.7

’00

’01

’02

22.9

’98

’99

46.2

45.3

45.4

44.1

45.1

45.8

26.2

26.2

27.3

27.6

28.4

29.2

’03

’04

’05

’06

’07

18.4

’97

’08
(fiscal year)（3）Office of Tax Collections Call Center

Paid fully
567,898（67.9%）

Office of Collections Call Center

In order to for the Tax Office to maintain administrative capacity for collection of delinquent taxes,
the Office of Tax Collections Call Center is broadly in charge of new delinquency cases. This officeprovides phone notification reminders using a centralized phone notice system, for effective andefficient collection of delinquent tax.
With this, over the year from July 2008 to June 2009, of the 840,000 people to be reminded, about
570,000 (67.9%) paid fully, and 90,000 (11.1%) paid partially.
※ At the Office of Tax Collections Call Center, the computer system automatically phones delinquent
taxpayers, and officials refer to delinquent taxpayer information shown on the terminal screen, toprovide effective and efficient payment reminders.

In its internet auctions, the NTA uses a private-sector auction website, which does not requireparticipants to physically visit the auction site. The interested participants can propose to buy the goods
online around the clock during an auction period. The NTA has done this since June 2007.
Internet auctions are very convenient, and can attract more auction participants. It is among theeffective means to sell the assets or goods of high value that have been seized.
In fiscal 2009, the NTA held four auctions via the Internet with a total of about 7,000 participants, atwhich about 600 items including the art paintings, precious metals, motor vehicles, real estate, etc.,
were sold off, bringing in about ¥300 million.

（5）Accurate and efficient management of claims and liabilities
The NTA manages a vast number of national tax claims and liabilities by processing tax returns
and returns for refunds. In 1966, we started to introduce a computer system to properly and efficiently
manage these claims and liabilities. In 2001, the KSK System was introduced at Tax Offices nationwide,
and tax claims and liabilities have since been managed via this integrated system.
Every year, there are about 45 million tax payments mainly of income taxes, the majority of which
are paid at financial institutions or by account transfer. To efficiently process such a large number ofpayments, the NTA has streamlined operations through cooperation with financial institutions and the
Bank of Japan, including OCR processing*1 of tax payment slips by the Bank of Japan, and by
introducing tax payment by transfer account*2 for income tax and sole business proprietors’
consumption tax. Transfer procedures to pay refunds used to be performed through written documentsfrom Tax Offices, but the NTA developed paperless procedures for refund transfer by magnetic tapes in
2001, and adopted online transfer procedures in September 2006. In these ways, we are pursuingefficient and speedy payment processing.
Management of national tax claims and liabilities is a cornerstone of taxation and tax collection. We
will continuously striving to improve services by conducting procedures speedily and accurately throughthe advanced application of IT systems, delivering returns to taxpayers as quickly as possible.

Statistics

23

Returned tothe tax offices
105,750（12.6%）

Future Challenges※1 Figures for local consumption tax are not included.

23.6

21.8

33.9

Receivedreminders
via telephone
836,184

Administrationof the Liquor Industry

20.6

25.6

48.4

44.6

40.0
30.0

47.7

44.0

’08
(fiscal year)

Consumption tax as % of
newly occurredConsumption tax as % ofamount in collection process● Trend in the percentage accounted for by consumption tax

Payment
pledged93,138（11.1%）

Remedy for Infringementof Taxpayer Rights※1 Figures are current cases in the process of collection of delinquent taxes.
※2 Figures for local consumption tax are not included.

Issued reminders
69,398（8.3%）（4）Auction by Internet

180.4

300

Of 836,184 taxpayers issued reminders for payment by telephone
between July 2008 and June-end 2009, 567,898 have fully paid theirtaxes.

Tax Administration Under
Increasing Globalization

275.2

400

0

618.3

511.2

500

100

629.9

’07

Newly occurredCollected
Under collection process(¥billion)
800
700

’06

of Tax Collections Call Center

Improvement of Taxpayer
Convenience andAdministrative Efficiency● Trend of collection of delinquent consumption tax’05● Collection of delinquent tax at the Office

Promotion of Tax Filingand Payment by
Proper Self-Assessment

1,500

1,411.8

2,328.0

2,783.0 2,814.9 2,766.1

Newly occurredCollected
Under collection process

About the NTA● Trend of collection of delinquent tax, for all tax items*1 OCR processing (optical character recognition processing) converts the characters written on a tax payment slip into electronic data. This electronic data iscommunicated between the Bank of Japan and the NTA, providing more efficient information transfer and paperless processing.
*2 Tax payment by transfer account is a method of tax payment whereby the Tax Offices send tax payment slips to financial institutions designated in advance by
taxpayers, and debit the amount of tax payment from their bank accounts. If it is necessary to send tax payment slips to financial institutions in large quantities, theTax Offices send magnetic tapes containing data for an account transfer to the financial institutions in order to perform the work of account transfer efficiently. Afterthe financial institutions process the data, they record the processing results on the magnetic tapes and return the tapes to the Tax Offices.

24

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment(¥billion)
3,000

2,660.6 2,703.1

2,500

2,051.6

2,000

1,000

1,169.1

1,704.8

2,498.0

2,666.8
2,484.2

2,251.9
2,022.8

1,867.3 1,784.4

1,684.4 1,615.1
1,553.8

500
0

’89

’90

’91

’92

’93

’94

’95

’96

’97

’98

※1 Figures are current cases in the process of collection of delinquent taxes.
※2 Figures for local consumption tax are not included.

’99

’00

’01

’02

’03

’04

614.6 632.3

600
335.9

386.1

’08
(fiscal year)

578.3

529.6

424.2

488.5

487.5

465.5

459.2

200

54.8

’04

’05

’06

’07

453.7

98.9

14.1

’89

’90

’91

’92

’93

’94

’95

’96

’97

’98

’99

’00

’01

’02

’03

(%)
50.0

44.2

20.0
11.1

10.0

2.7
0.0 1.2

’89

3.9

’90

13.4
5.8

’91

8.8

’92

11.8

’93

28.1
27.4

27.4

13.4

14.5

15.7

’94

’95

’96

24.9

25.7

’00

’01

’02

22.9

’98

’99

46.2

45.3

45.4

44.1

45.1

45.8

26.2

26.2

27.3

27.6

28.4

29.2

’03

’04

’05

’06

’07

18.4

’97

’08
(fiscal year)（3）Office of Tax Collections Call Center

Paid fully
567,898（67.9%）

Office of Collections Call Center

In order to for the Tax Office to maintain administrative capacity for collection of delinquent taxes,
the Office of Tax Collections Call Center is broadly in charge of new delinquency cases. This officeprovides phone notification reminders using a centralized phone notice system, for effective andefficient collection of delinquent tax.
With this, over the year from July 2008 to June 2009, of the 840,000 people to be reminded, about
570,000 (67.9%) paid fully, and 90,000 (11.1%) paid partially.
※ At the Office of Tax Collections Call Center, the computer system automatically phones delinquent
taxpayers, and officials refer to delinquent taxpayer information shown on the terminal screen, toprovide effective and efficient payment reminders.

In its internet auctions, the NTA uses a private-sector auction website, which does not requireparticipants to physically visit the auction site. The interested participants can propose to buy the goods
online around the clock during an auction period. The NTA has done this since June 2007.
Internet auctions are very convenient, and can attract more auction participants. It is among theeffective means to sell the assets or goods of high value that have been seized.
In fiscal 2009, the NTA held four auctions via the Internet with a total of about 7,000 participants, atwhich about 600 items including the art paintings, precious metals, motor vehicles, real estate, etc.,
were sold off, bringing in about ¥300 million.

（5）Accurate and efficient management of claims and liabilities
The NTA manages a vast number of national tax claims and liabilities by processing tax returns
and returns for refunds. In 1966, we started to introduce a computer system to properly and efficiently
manage these claims and liabilities. In 2001, the KSK System was introduced at Tax Offices nationwide,
and tax claims and liabilities have since been managed via this integrated system.
Every year, there are about 45 million tax payments mainly of income taxes, the majority of which
are paid at financial institutions or by account transfer. To efficiently process such a large number ofpayments, the NTA has streamlined operations through cooperation with financial institutions and the
Bank of Japan, including OCR processing*1 of tax payment slips by the Bank of Japan, and by
introducing tax payment by transfer account*2 for income tax and sole business proprietors’
consumption tax. Transfer procedures to pay refunds used to be performed through written documentsfrom Tax Offices, but the NTA developed paperless procedures for refund transfer by magnetic tapes in
2001, and adopted online transfer procedures in September 2006. In these ways, we are pursuingefficient and speedy payment processing.
Management of national tax claims and liabilities is a cornerstone of taxation and tax collection. We
will continuously striving to improve services by conducting procedures speedily and accurately throughthe advanced application of IT systems, delivering returns to taxpayers as quickly as possible.

Statistics

23

Returned tothe tax offices
105,750（12.6%）

Future Challenges※1 Figures for local consumption tax are not included.

23.6

21.8

33.9

Receivedreminders
via telephone
836,184

Administrationof the Liquor Industry

20.6

25.6

48.4

44.6

40.0
30.0

47.7

44.0

’08
(fiscal year)

Consumption tax as % of
newly occurredConsumption tax as % ofamount in collection process● Trend in the percentage accounted for by consumption tax

Payment
pledged93,138（11.1%）

Remedy for Infringementof Taxpayer Rights※1 Figures are current cases in the process of collection of delinquent taxes.
※2 Figures for local consumption tax are not included.

Issued reminders
69,398（8.3%）（4）Auction by Internet

180.4

300

Of 836,184 taxpayers issued reminders for payment by telephone
between July 2008 and June-end 2009, 567,898 have fully paid theirtaxes.

Tax Administration Under
Increasing Globalization

275.2

400

0

618.3

511.2

500

100

629.9

’07

Newly occurredCollected
Under collection process(¥billion)
800
700

’06

of Tax Collections Call Center

Improvement of Taxpayer
Convenience andAdministrative Efficiency● Trend of collection of delinquent consumption tax’05● Collection of delinquent tax at the Office

Promotion of Tax Filingand Payment by
Proper Self-Assessment

1,500

1,411.8

2,328.0

2,783.0 2,814.9 2,766.1

Newly occurredCollected
Under collection process

About the NTA● Trend of collection of delinquent tax, for all tax items*1 OCR processing (optical character recognition processing) converts the characters written on a tax payment slip into electronic data. This electronic data iscommunicated between the Bank of Japan and the NTA, providing more efficient information transfer and paperless processing.
*2 Tax payment by transfer account is a method of tax payment whereby the Tax Offices send tax payment slips to financial institutions designated in advance by
taxpayers, and debit the amount of tax payment from their bank accounts. If it is necessary to send tax payment slips to financial institutions in large quantities, theTax Offices send magnetic tapes containing data for an account transfer to the financial institutions in order to perform the work of account transfer efficiently. Afterthe financial institutions process the data, they record the processing results on the magnetic tapes and return the tapes to the Tax Offices.

24

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

Web-TAX-TV

Internet broadcasts by the National Tax Agency〜The job of a Revenue Officer〜（1）Promotion of document attached by CPTAs to tax returns

Administrationof the Liquor Industry

Malicious taxpayers are given strict
treatment by search, seizure, etc.

Remedy for Infringementof Taxpayer Rights

Officers also investigate theliving conditions of malicious
delinquent taxpayers.

Future Challenges

The documents attached by CPTAs to tax returns as provided for in the Certified Public Tax
Accountant Act clarify the roles played by them in filing tax returns. The NTA is respecting such roles
played by them. This system allows CPTAs to attach to tax returns the documents regarding the
calculation, information arrangement, or consultation service that they provided for the preparation oftax returns. If the Tax Offices intend to conduct a tax examination on taxpayers who have filed tax
returns along with such documents, the CPTAs possessing the certificate evidencing the authority of
tax proxy must be given the opportunity to give their opinions on the items written in the attacheddocuments before taxpayers are notified about the tax examination’s date, time and place.
Because this system contributes to the correct development and filing of tax returns, facilitation andsimplification of tax administration, and eventually establishment of the trusted CPTAs System, the
NTA is working to have consultation with the tax accountants’ associations with an aim to enhance thecomponents and volume in document to be attached, and is respecting this system, thereby further
promoting and establishing this system.
Since July 2009, as a result of listening to opinions on attached documents, as a rule, CPTAs areto be notified in writing, when it is decided that a case will not undergo field examination.

Tax Administration Under
Increasing Globalization

The NTA acts according to eachtaxpayer’s situation, such as providing
consultation on payment for those
whose situation prevents paying.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

We hope you will watch this drama about thejobs of Revenue Officers working
every day for proper and fair tax collection.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Tax guides covering a wide choice of categories

Certified Public Tax Accountants (CPTAs) are professional specialists on taxes, whose roles are tohelp taxpayers properly file tax returns and pay taxes. The CPTA Act provides their public mission:“Based on their independent and fair standpoint, they shall respond to person with a tax obligation trustin line with the principles of the self-assessment system and achieve proper tax compliance asprovided for in the Tax Law.” As of March-end 2010, 71,606 persons are registered as the CPTAs, and
1,949 professional tax firms are established.
Taxpayers are able to have CPTAs prepare their tax returns or file returns and pay tax properly byreceiving professional advice from them. As business transactions get complex, and the number of
taxpayers greatly increases, the roles played by CPTAs are becoming increasingly important.
In addition, because corporations and sole business proprietors often ask CPTAs to process
accounting books or seek advice on accounting, they are playing significant roles in promoting
bookkeeping that constitute the correct bases for filing tax returns.
CPTAs shall satisfy certain qualifications. CPTA services are ① tax proxy, ② preparation of tax
documents, ③ Tax consultation service. These operations must not be performed by persons otherthan CPTAs, even at no charge. At the same time, CPTAs are required to fulfill various obligations andresponsibilities.
In cooperation with tax accountant associations and the Japan Federation of CPTAs’ Associations,
the NTA is working to ensure that CPTAs properly conduct their duties and to build the public’s trust in
the CPTA system.

About the NTA

5 Certified Public Tax Accountants ( CPTAs) system（2）Promotion of e-Tax usage25

webt axt v

searchWatch it now!

Statistics

Streaming contents available from theofficial website of the National Tax Agency!!

Given the extremely significant role played by CPTAs in wider use of e-Tax, the Japan Federationof CPTAs’ Associations has set voluntary targets, and is trying hard to promote the use of e-Tax by
CPTAs.
To encourage more use of e-Tax by CPTAs, NTA is working to make e-Tax more convenient by
6）extending its service hours until 10:30pm (usually until 9pm) during the four days at the end of May(except Sunday), when there are many CPTA customers’ tax returns for corporation tax, etc. In
cooperation with tax accountant associations, NTA holds e-Tax explanatory meetings and dispatches
lecturers. (See p.29 regarding e-Tax)
26

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

Web-TAX-TV

Internet broadcasts by the National Tax Agency〜The job of a Revenue Officer〜（1）Promotion of document attached by CPTAs to tax returns

Administrationof the Liquor Industry

Malicious taxpayers are given strict
treatment by search, seizure, etc.

Remedy for Infringementof Taxpayer Rights

Officers also investigate theliving conditions of malicious
delinquent taxpayers.

Future Challenges

The documents attached by CPTAs to tax returns as provided for in the Certified Public Tax
Accountant Act clarify the roles played by them in filing tax returns. The NTA is respecting such roles
played by them. This system allows CPTAs to attach to tax returns the documents regarding the
calculation, information arrangement, or consultation service that they provided for the preparation oftax returns. If the Tax Offices intend to conduct a tax examination on taxpayers who have filed tax
returns along with such documents, the CPTAs possessing the certificate evidencing the authority of
tax proxy must be given the opportunity to give their opinions on the items written in the attacheddocuments before taxpayers are notified about the tax examination’s date, time and place.
Because this system contributes to the correct development and filing of tax returns, facilitation andsimplification of tax administration, and eventually establishment of the trusted CPTAs System, the
NTA is working to have consultation with the tax accountants’ associations with an aim to enhance thecomponents and volume in document to be attached, and is respecting this system, thereby further
promoting and establishing this system.
Since July 2009, as a result of listening to opinions on attached documents, as a rule, CPTAs areto be notified in writing, when it is decided that a case will not undergo field examination.

Tax Administration Under
Increasing Globalization

The NTA acts according to eachtaxpayer’s situation, such as providing
consultation on payment for those
whose situation prevents paying.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

We hope you will watch this drama about thejobs of Revenue Officers working
every day for proper and fair tax collection.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Tax guides covering a wide choice of categories

Certified Public Tax Accountants (CPTAs) are professional specialists on taxes, whose roles are tohelp taxpayers properly file tax returns and pay taxes. The CPTA Act provides their public mission:“Based on their independent and fair standpoint, they shall respond to person with a tax obligation trustin line with the principles of the self-assessment system and achieve proper tax compliance asprovided for in the Tax Law.” As of March-end 2010, 71,606 persons are registered as the CPTAs, and
1,949 professional tax firms are established.
Taxpayers are able to have CPTAs prepare their tax returns or file returns and pay tax properly byreceiving professional advice from them. As business transactions get complex, and the number of
taxpayers greatly increases, the roles played by CPTAs are becoming increasingly important.
In addition, because corporations and sole business proprietors often ask CPTAs to process
accounting books or seek advice on accounting, they are playing significant roles in promoting
bookkeeping that constitute the correct bases for filing tax returns.
CPTAs shall satisfy certain qualifications. CPTA services are ① tax proxy, ② preparation of tax
documents, ③ Tax consultation service. These operations must not be performed by persons otherthan CPTAs, even at no charge. At the same time, CPTAs are required to fulfill various obligations andresponsibilities.
In cooperation with tax accountant associations and the Japan Federation of CPTAs’ Associations,
the NTA is working to ensure that CPTAs properly conduct their duties and to build the public’s trust in
the CPTA system.

About the NTA

5 Certified Public Tax Accountants ( CPTAs) system（2）Promotion of e-Tax usage25

webt axt v

searchWatch it now!

Statistics

Streaming contents available from theofficial website of the National Tax Agency!!

Given the extremely significant role played by CPTAs in wider use of e-Tax, the Japan Federationof CPTAs’ Associations has set voluntary targets, and is trying hard to promote the use of e-Tax by
CPTAs.
To encourage more use of e-Tax by CPTAs, NTA is working to make e-Tax more convenient by
6）extending its service hours until 10:30pm (usually until 9pm) during the four days at the end of May(except Sunday), when there are many CPTA customers’ tax returns for corporation tax, etc. In
cooperation with tax accountant associations, NTA holds e-Tax explanatory meetings and dispatches
lecturers. (See p.29 regarding e-Tax)
26

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

Fiscal year

2005

2006

2007

2008

2009

Number of disciplinary cases

18

28

19

30

29

Savings-for-tax associations
Savings-for-Tax associations are organized with taxpayers aiming at continually completing
payment of tax within the due date by means of savings. The associations are establishedpursuant to the Tax Fund Saving Partnership Act, with current membership of about 54,000
associations. They are promoting the utilization of tax payment by transfer account andcompletion of tax payment within the due date, and are doing a wide range of activities such asencouraging wider use of e-Tax, and soliciting to join the contest of “Writing Essay on Tax.”
For further details, please visit the website of the National Federation of Savings-for-Tax
Associations at http://www.zennoren.jp (Japanese only).

Tax payment associations
Tax payment associations are organized under the jurisdiction of the Tax Oﬃces of the
Osaka Regional Taxation Bureau for the purpose of aiming to spread knowledge about taxes,
promote proper ﬁling of returns and tax payment, and to enhance compliance. At present, there
are about 83 tax payment associations (incorporated associations), including the Federation ofTax Payment Associations. There are about 240,000 members, counting both individual andcorporation members. The associations do publicity activities to spread knowledge about taxes
and hold various brieﬁngs, which are similar to activities performed by the blue return taxpayersʼ
associations and corporations associations. For further details, please visit the website of theFederation of Tax Payment Associations at http://www.nouzeikyokai.or.jp (Japanese only).

Statistics

27

Indirect tax associations are organized for the purpose of contributing to the spreading of
knowledge about indirect taxes, and achieving fair taxation and proper administration through theself-assessment system. At present, there are 566 associations nationwide with about 93,000
members. Indirect tax associations make suggestions to the government on ways to enhance the tax
system and to improve tax implementation. They also perform activities to spread knowledge about
the consumption tax and to prevent tax delinquency. For further details, please visit the website of
the National Federation of Indirect Tax Associations at http://www.kanzeikai.jp (Japanese only).

Future Challenges

The NTA is implementing measures not only to provide information on taxes directly to taxpayers
but also to convey information on taxes via cooperation from the relevant private organizations, such as
blue return taxpayers’ associations and corporations associations. These relevant private organizations
are playing a significant role in achieving a proper self-assessment system and in spreading knowledge
about taxes, as associations of faithful taxpayers.
These relevant private organizations are attempting to enhance coordination and cooperation
between organizations regarding encouraging use of e-Tax and the promotion of the joint holding ofvarious events for “Think About Tax Week.”

Indirect tax associations

Administrationof the Liquor Industry

6 Cooperation with private organizations

Corporations associations are organized for the purpose of spreading knowledge of tax andestablishing a proper self-assessment system. At present, there are 483 corporations
associations as incorporated associations in prefectural level federations and in the National
General Federation of Corporations Association. Membership stands at about 1 million
corporations. Each corporations association engages in a wide range of activities including holdingof seminars and workshops on taxes, and contribution to the sound development of corporate
management and the society. For further details, please visit the website of the National General
Federation of Corporations Associations at http://www.zenkokuhojinkai.or.jp (Japanese only).

Remedy for Infringementof Taxpayer Rights

A tax accountantsʼ association is an organization that is speciﬁed in the Certiﬁed Public
Tax Accountant Act, aiming to provide guidance, liaison and supervision to its branch oﬃces
and members, in order to secure the compliance of the CPTAs and professional tax ﬁrms andcontribute to improvement and development in CPTAʼs duties. Currently, there are 15 tax
accountantsʼ associations in Japan. CPTAs and professional tax ﬁrms are members of the tax
accountantsʼ association that has jurisdiction over the area where their oﬃce is located.
Each tax accountantsʼ association provides a wide range of services including ① training
sessions to improve and develop its membersʼ skills and tasks, ② social contribution bydispatching instructors to tax education classes at elementary, junior high or senior highschools, and ③ free tax consultation for small taxpayers.
The Japan Federation of CPTAsʼ Associations is the only organization speciﬁed in the
CPTA Act, consisting of member tax accountantsʼ associations. The Federation provides
guidelines, liaison, and supervision for tax accountantsʼ associations and their members. It also
handles the administration to register members, and conducts research on the CPTA system.
For further details, please visit the website of the Federation at http://www.nichizeiren.or.jp

Corporations associations

Tax Administration Under
Increasing Globalization

Tax accountants’ associations and Japan Federation of CPTAs’ Associations

Blue return taxpayersʼ associations are organized to widen participation in the blue returnsystem and promote the submission of proper tax returns through honest bookkeeping. They
are formed mainly by sole business proprietors who use the system. At present, there areabout 3,700 associations nationwide, and the total number of members is about 940,000. Eachblue return taxpayersʼ association performs wide range of activities including the guidance on
bookkeeping, holding seminars, and encouraging ﬁling of blue returns by people outside theassociation. For further details, please contact the nearest blue return taxpayersʼ association.

Improvement of Taxpayer
Convenience andAdministrative Efficiency● Number of disciplinary actions against CPTAs and professional tax firms

Blue return taxpayers’ associations

Promotion of Tax Filingand Payment by
Proper Self-Assessment

In order to ensure national trust in the CPTA system, the NTA is providing its guidance andsupervision for CPTAs. The NTA holds consultation meetings with tax accountant associations, taking
every opportunity to call for their attention to prevent misconduct of CPTAs. Meanwhile, the NTA
collects a variety of information to properly examine pursuant to the Certified Public Tax Accountant Act.
It takes disciplinary action against those who violated the Act or indict “fake CPTAs.”In March 2008, from the standpoint of ensuring the transparency of the disciplinary actions taken
against CPTAs, the NTA made public the “Concept of Disciplinary Actions Against CPTAs andProfessional Tax Firms”, and decided to disclose the names of the disciplined in the official gazette andvia the NTA website. There were 29 cases of disciplinary actions against CPTAs and professional tax
firms in FY2009.

About the NTA（3）Guidance and supervision of CPTAs

28

Ⅱ Promotion of Tax Filing and Payment by Proper Self-Assessment

Fiscal year

2005

2006

2007

2008

2009

Number of disciplinary cases

18

28

19

30

29

Savings-for-tax associations
Savings-for-Tax associations are organized with taxpayers aiming at continually completing
payment of tax within the due date by means of savings. The associations are establishedpursuant to the Tax Fund Saving Partnership Act, with current membership of about 54,000
associations. They are promoting the utilization of tax payment by transfer account andcompletion of tax payment within the due date, and are doing a wide range of activities such asencouraging wider use of e-Tax, and soliciting to join the contest of “Writing Essay on Tax.”
For further details, please visit the website of the National Federation of Savings-for-Tax
Associations at http://www.zennoren.jp (Japanese only).

Tax payment associations
Tax payment associations are organized under the jurisdiction of the Tax Oﬃces of the
Osaka Regional Taxation Bureau for the purpose of aiming to spread knowledge about taxes,
promote proper ﬁling of returns and tax payment, and to enhance compliance. At present, there
are about 83 tax payment associations (incorporated associations), including the Federation ofTax Payment Associations. There are about 240,000 members, counting both individual andcorporation members. The associations do publicity activities to spread knowledge about taxes
and hold various brieﬁngs, which are similar to activities performed by the blue return taxpayersʼ
associations and corporations associations. For further details, please visit the website of theFederation of Tax Payment Associations at http://www.nouzeikyokai.or.jp (Japanese only).

Statistics

27

Indirect tax associations are organized for the purpose of contributing to the spreading of
knowledge about indirect taxes, and achieving fair taxation and proper administration through theself-assessment system. At present, there are 566 associations nationwide with about 93,000
members. Indirect tax associations make suggestions to the government on ways to enhance the tax
system and to improve tax implementation. They also perform activities to spread knowledge about
the consumption tax and to prevent tax delinquency. For further details, please visit the website of
the National Federation of Indirect Tax Associations at http://www.kanzeikai.jp (Japanese only).

Future Challenges

The NTA is implementing measures not only to provide information on taxes directly to taxpayers
but also to convey information on taxes via cooperation from the relevant private organizations, such as
blue return taxpayers’ associations and corporations associations. These relevant private organizations
are playing a significant role in achieving a proper self-assessment system and in spreading knowledge
about taxes, as associations of faithful taxpayers.
These relevant private organizations are attempting to enhance coordination and cooperation
between organizations regarding encouraging use of e-Tax and the promotion of the joint holding ofvarious events for “Think About Tax Week.”

Indirect tax associations

Administrationof the Liquor Industry

6 Cooperation with private organizations

Corporations associations are organized for the purpose of spreading knowledge of tax andestablishing a proper self-assessment system. At present, there are 483 corporations
associations as incorporated associations in prefectural level federations and in the National
General Federation of Corporations Association. Membership stands at about 1 million
corporations. Each corporations association engages in a wide range of activities including holdingof seminars and workshops on taxes, and contribution to the sound development of corporate
management and the society. For further details, please visit the website of the National General
Federation of Corporations Associations at http://www.zenkokuhojinkai.or.jp (Japanese only).

Remedy for Infringementof Taxpayer Rights

A tax accountantsʼ association is an organization that is speciﬁed in the Certiﬁed Public
Tax Accountant Act, aiming to provide guidance, liaison and supervision to its branch oﬃces
and members, in order to secure the compliance of the CPTAs and professional tax ﬁrms andcontribute to improvement and development in CPTAʼs duties. Currently, there are 15 tax
accountantsʼ associations in Japan. CPTAs and professional tax ﬁrms are members of the tax
accountantsʼ association that has jurisdiction over the area where their oﬃce is located.
Each tax accountantsʼ association provides a wide range of services including ① training
sessions to improve and develop its membersʼ skills and tasks, ② social contribution bydispatching instructors to tax education classes at elementary, junior high or senior highschools, and ③ free tax consultation for small taxpayers.
The Japan Federation of CPTAsʼ Associations is the only organization speciﬁed in the
CPTA Act, consisting of member tax accountantsʼ associations. The Federation provides
guidelines, liaison, and supervision for tax accountantsʼ associations and their members. It also
handles the administration to register members, and conducts research on the CPTA system.
For further details, please visit the website of the Federation at http://www.nichizeiren.or.jp

Corporations associations

Tax Administration Under
Increasing Globalization

Tax accountants’ associations and Japan Federation of CPTAs’ Associations

Blue return taxpayersʼ associations are organized to widen participation in the blue returnsystem and promote the submission of proper tax returns through honest bookkeeping. They
are formed mainly by sole business proprietors who use the system. At present, there areabout 3,700 associations nationwide, and the total number of members is about 940,000. Eachblue return taxpayersʼ association performs wide range of activities including the guidance on
bookkeeping, holding seminars, and encouraging ﬁling of blue returns by people outside theassociation. For further details, please contact the nearest blue return taxpayersʼ association.

Improvement of Taxpayer
Convenience andAdministrative Efficiency● Number of disciplinary actions against CPTAs and professional tax firms

Blue return taxpayers’ associations

Promotion of Tax Filingand Payment by
Proper Self-Assessment

In order to ensure national trust in the CPTA system, the NTA is providing its guidance andsupervision for CPTAs. The NTA holds consultation meetings with tax accountant associations, taking
every opportunity to call for their attention to prevent misconduct of CPTAs. Meanwhile, the NTA
collects a variety of information to properly examine pursuant to the Certified Public Tax Accountant Act.
It takes disciplinary action against those who violated the Act or indict “fake CPTAs.”In March 2008, from the standpoint of ensuring the transparency of the disciplinary actions taken
against CPTAs, the NTA made public the “Concept of Disciplinary Actions Against CPTAs andProfessional Tax Firms”, and decided to disclose the names of the disciplined in the official gazette andvia the NTA website. There were 29 cases of disciplinary actions against CPTAs and professional tax
firms in FY2009.

About the NTA（3）Guidance and supervision of CPTAs

28

of Taxpayer Conven ience
Ⅲ Improvement
and Administrative Efficiency

Receiving system

Direct payment
instruction

Taxpayers
CPTAs

Direct payment
information

Tax OfficeSending data suchas tax returns

Internet

Multi-payment
network Receiving
system● Online tax payment using

internet banking or ATM

ATM

Financial institutions(BOJ agencies
for revenue)

Remitting to thegovernment deposit

Bank of Japan

Future Challenges
Statistics

29

writers

Internet

Administrationof the Liquor Industry*1 “Pay-Easy” is a service where taxpayers can pay public utility charges via personal computer connected with the Internet and ATMs, which used to be paid
at the counters of financial institutions and convenience stores.

● Obtaining IC card readers/Remedy for Infringementof Taxpayer Rights

The e-Tax system is a way for taxpayers to implement the procedures for filing such as
notifications, income tax returns, corporation tax returns, consumption tax returns, information under
mandatory submission, and applications for filing the blue returns, which used to be processed on
paper. All tax items can be paid via the Internet, Pay-Easy*1 compatible ATMs, etc.
The use of e-Tax makes it possible for taxpayers and CPTAs to file tax returns and paymentsfrom their homes or offices without having to visit Tax Offices or financial institutions. In addition, tax
and accounting software compatible with e-Tax can electronically process a series of tasks from datapreparation such as accounting and tax return data preparation, to filing of tax returns, thereby
reducing administrative tasks and making the process paperless.
This also makes it possible for the NTA to benefit from the effects of cutting costs for receiving
tax returns, processing mailed returns, entering data. It also makes the document search easy andcuts the cost of document management, thereby boosting efficiency of tax administration.
This is why in order to encourage wider use of e-Tax, the NTA is strongly pushing various
measures which incorporate two plans for national tax related procedures: the “Action Plan for
Promoting the Utilization of Online” (decided March 2006, revised March 2007) and the “Action Planfor Expanding the Utilization of Online” (decided September 2008). Specifically, returns for refund
using e-Tax are processed promptly, PCs were installed in self-assessment consultation centers set
up in Tax Offices, and taxpayers can use e-Tax from the filing assistance on the NTA website.
Measures were also taken for system aspects. For individual income tax returns using e-Tax, it is
now possible to omit the submission or presentation of certain attached documents made by third
parties, such as medical expense receipts.*2 As for digital signatures, which are a precondition for● Obtaining digital certificatesSending data suchas tax returns

Tax Administration Under
Increasing Globalization（1）e -Tax■ e-Tax

Improvement of Taxpayer
Convenience andAdministrative Efficiency

The NTA is improving convenience for taxpayers and administrative efficiency by pushing
forward tax returns and payments through the use of IT, such as e-Tax and filing assistance on the
NTA website.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

1 e -Tax

wider use of e-Tax, if a CPTA receives a taxpayer request and files a return using e-Tax, the digital
signature of the taxpayer himself/herself can be omitted.
Moreover, a system was established so that if e-Tax is used to submit a final income tax return,when the digital signature of the taxpayer himself/herself and digital certificate are affixed and it istransmitted within the submission by the due date, the taxpayer can receive up to a 5,000 yen tax
credit from that year’s filing of the income tax amount (can be received once, from the 2007 filing until
the 2010 filing).
In FY2009, the NTA worked on further convenience enhancements and support system
improvements: Improved usability when transmitting to e-Tax from the “filing assistance on the NTA
website” and large expansion and enhancement of the help desk were implemented in FY2008, moreeasily understood screens for improved guidance from the e-Tax website to the filing assistance on
the NTA website, extension of the reception hours during the end of May when the majority ofcorporation tax filings arrive, help desk service provided on all Sundays during the final tax return
filing period for income tax, started direct payment service which is a new payment method, etc.
These helped boost the e-Tax usage rate, rising from 37% in FY2008 to 45% in FY2009 (for direct
payment, refer to page 21).
The NTA will continue working on various initiatives such as usability enhancements, for wider
use of e-Tax. At the same time, the NTA is working to further revise its operations and IT systems, tomaximize benefits such as more efficient administration due to wider use of e-Tax.

About the NTA

To improve convenience for citizens and achieve simplification, efficiency enhancement, reliability,
and transparency in government affairs by introducing the use of IT to the areas of government
administration and reviewing the operations and systems, the decision was made in July 2003 to
implement the e-Government Establishment Plan. Since then, the government has been addressing theimprovement of convenience and services for citizens with its commitment to make administrativereforms through IT.
At the NTA, while making efforts to improve convenience for taxpayers, we have been taking various
measures to further simplify and improve the efficiency of administration through an overall review of theadministrative affairs process and operating expenses.
In particular, as an initiative to advance tax administration in the IT era, self-assessments, tax
payments, applications, notices, etc. for national tax via the Internet is done by e-Tax, which is positioned
at the core of our future tax procedures. We are working to further enhance its convenience and broaden
its use.
Also, amidst the changing environment faced by tax administration, in order to perform efficientadministrative operations which respond flexibly to change, we created a medium term plan to optimize
our operations and system, aiming at overall optimization. In accordance with this plan, we are working toenhance convenience and efficiency.

*2 When omitting the presentation or submission of documents prepared by third parties, descriptions in such documents have to be entered and submitted
online along with the tax return forms.
In order to check on the entries of descriptions, if it is needed, the Tax Offices may ask taxpayers to present or submit original copies during a three-year
period from the legally required due date for filing.

30

of Taxpayer Conven ience
Ⅲ Improvement
and Administrative Efficiency

Receiving system

Direct payment
instruction

Taxpayers
CPTAs

Direct payment
information

Tax OfficeSending data suchas tax returns

Internet

Multi-payment
network Receiving
system● Online tax payment using

internet banking or ATM

ATM

Financial institutions(BOJ agencies
for revenue)

Remitting to thegovernment deposit

Bank of Japan

Future Challenges
Statistics

29

writers

Internet

Administrationof the Liquor Industry*1 “Pay-Easy” is a service where taxpayers can pay public utility charges via personal computer connected with the Internet and ATMs, which used to be paid
at the counters of financial institutions and convenience stores.

● Obtaining IC card readers/Remedy for Infringementof Taxpayer Rights

The e-Tax system is a way for taxpayers to implement the procedures for filing such as
notifications, income tax returns, corporation tax returns, consumption tax returns, information under
mandatory submission, and applications for filing the blue returns, which used to be processed on
paper. All tax items can be paid via the Internet, Pay-Easy*1 compatible ATMs, etc.
The use of e-Tax makes it possible for taxpayers and CPTAs to file tax returns and paymentsfrom their homes or offices without having to visit Tax Offices or financial institutions. In addition, tax
and accounting software compatible with e-Tax can electronically process a series of tasks from datapreparation such as accounting and tax return data preparation, to filing of tax returns, thereby
reducing administrative tasks and making the process paperless.
This also makes it possible for the NTA to benefit from the effects of cutting costs for receiving
tax returns, processing mailed returns, entering data. It also makes the document search easy andcuts the cost of document management, thereby boosting efficiency of tax administration.
This is why in order to encourage wider use of e-Tax, the NTA is strongly pushing various
measures which incorporate two plans for national tax related procedures: the “Action Plan for
Promoting the Utilization of Online” (decided March 2006, revised March 2007) and the “Action Planfor Expanding the Utilization of Online” (decided September 2008). Specifically, returns for refund
using e-Tax are processed promptly, PCs were installed in self-assessment consultation centers set
up in Tax Offices, and taxpayers can use e-Tax from the filing assistance on the NTA website.
Measures were also taken for system aspects. For individual income tax returns using e-Tax, it is
now possible to omit the submission or presentation of certain attached documents made by third
parties, such as medical expense receipts.*2 As for digital signatures, which are a precondition for● Obtaining digital certificatesSending data suchas tax returns

Tax Administration Under
Increasing Globalization（1）e -Tax■ e-Tax

Improvement of Taxpayer
Convenience andAdministrative Efficiency

The NTA is improving convenience for taxpayers and administrative efficiency by pushing
forward tax returns and payments through the use of IT, such as e-Tax and filing assistance on the
NTA website.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

1 e -Tax

wider use of e-Tax, if a CPTA receives a taxpayer request and files a return using e-Tax, the digital
signature of the taxpayer himself/herself can be omitted.
Moreover, a system was established so that if e-Tax is used to submit a final income tax return,when the digital signature of the taxpayer himself/herself and digital certificate are affixed and it istransmitted within the submission by the due date, the taxpayer can receive up to a 5,000 yen tax
credit from that year’s filing of the income tax amount (can be received once, from the 2007 filing until
the 2010 filing).
In FY2009, the NTA worked on further convenience enhancements and support system
improvements: Improved usability when transmitting to e-Tax from the “filing assistance on the NTA
website” and large expansion and enhancement of the help desk were implemented in FY2008, moreeasily understood screens for improved guidance from the e-Tax website to the filing assistance on
the NTA website, extension of the reception hours during the end of May when the majority ofcorporation tax filings arrive, help desk service provided on all Sundays during the final tax return
filing period for income tax, started direct payment service which is a new payment method, etc.
These helped boost the e-Tax usage rate, rising from 37% in FY2008 to 45% in FY2009 (for direct
payment, refer to page 21).
The NTA will continue working on various initiatives such as usability enhancements, for wider
use of e-Tax. At the same time, the NTA is working to further revise its operations and IT systems, tomaximize benefits such as more efficient administration due to wider use of e-Tax.

About the NTA

To improve convenience for citizens and achieve simplification, efficiency enhancement, reliability,
and transparency in government affairs by introducing the use of IT to the areas of government
administration and reviewing the operations and systems, the decision was made in July 2003 to
implement the e-Government Establishment Plan. Since then, the government has been addressing theimprovement of convenience and services for citizens with its commitment to make administrativereforms through IT.
At the NTA, while making efforts to improve convenience for taxpayers, we have been taking various
measures to further simplify and improve the efficiency of administration through an overall review of theadministrative affairs process and operating expenses.
In particular, as an initiative to advance tax administration in the IT era, self-assessments, tax
payments, applications, notices, etc. for national tax via the Internet is done by e-Tax, which is positioned
at the core of our future tax procedures. We are working to further enhance its convenience and broaden
its use.
Also, amidst the changing environment faced by tax administration, in order to perform efficientadministrative operations which respond flexibly to change, we created a medium term plan to optimize
our operations and system, aiming at overall optimization. In accordance with this plan, we are working toenhance convenience and efficiency.

*2 When omitting the presentation or submission of documents prepared by third parties, descriptions in such documents have to be entered and submitted
online along with the tax return forms.
In order to check on the entries of descriptions, if it is needed, the Tax Offices may ask taxpayers to present or submit original copies during a three-year
period from the legally required due date for filing.

30

Ⅲ Improvement of Taxpayer Conven ience and Administrative Efficiency(thousands)
18,00016,00014,31814,000
9,197

37％

8,000
6,000
4,000

45％

60
50
40
30

23％

20

2,000

10

0

0

FY2008FY2009（2）Filing assistance on the NTA website

6,144

6,000
4,692

5,000
3,370

3,000
1,924
602

2,000
695
2004

2 Use of IT to improve taxpayer
convenience
Improvement of functions
and operation of e-Tax
Functional improvement of
NTA website

1,664

3,808

4,660

2,765

1,323

1,705

1,927

2005

2006

2007

2,336

2,637

2008

2009

Centralization ofoperations
Promotion ofoutsourcing

Customer contact related work
Process tax returns, etc.

Reduce operations processing time
Results in reducing operations processing time
110,000 man-days/year

NTA website

KSK system, etc.

Uniﬁcation of in-oﬃce work
Simpliﬁcation of operations

1 Simplification and improvement in operational
efficiency for appropriate performance
Examinations and collections of tax
delinquency

Enhancement
3 Use of IT for a moreadvanced system related to
examinations and collectionsof tax delinquency

4 Ensuring stability and reliability ofthe system and information security
5 Reduction of expenses related
to the system and ensuring thetransparency of procurement

Statistics※ Figures represent those submitted by the end of March of the following year.
The use of personal computers installed in the Tax Office started from those for tax returns for 2004. However, the number of taxpayers who
submitted returns using this method remains unaccounted for.
The number of taxpayers who submitted tax returns for years before 2003 remains unaccounted for.
The number of taxpayers who submitted tax returns for years after 2007 includes cases using e-Tax.

Centralization oftax consultation

Promotionof one-stop
service

e-Tax(online tax return filing, etc.)

Future Challenges

4,000

0

Taxpayers

7,297

7,000

1,000

Phone Consultation
Center

Systems related to National
Tax Administration

Administrationof the Liquor Industry

Persons filing tax returns (website)
Persons filing tax returns (Tax Office)(thousand people)
8,000

related to National Tax Administration” (diagram)

Remedy for Infringementof Taxpayer Rights● Trend in income tax return submissions prepared in the filing assistance on the NTA website● Execution of “Optimization Plan of Operations and Systems

Tax Administration Under
Increasing Globalization

Entry of amounts and other necessary information into the filing assistance on the NTA website
according to screen guides for personal computers allows taxpayers to complete their tax returns forincome tax, individual consumption tax, and gift tax as well as financial statements for blue returns. The
prepared data can be directly electronically filed as tax returns from this website area (excluding gifttax), and if needed, it can be printed and submitted to the Tax Office by post, etc.
Since the system was introduced in the filing period for the 2002 final tax return, the number ofusers has increased each year. For the 2009 filing, taxpayers who used this system to submit returns
from homes, offices, or consultation sites in Tax Offices totaled 7.3 million cases, or 30.8% of all
taxpayers who filed tax returns. Of these, about 65% of the submissions were made by e-Tax.
We will continue our efforts to improve the system to make it more easy-to-use based on feedback
from users, so that it can be used by as many taxpayers as possible.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

FY2007※ Figures represent the number of cases and usage rate for priority procedures
described in the “Action Plan for Expanding the Utilization of Online”.

Mr. e-Ta is an image character for e-Tax. He is named after
e-Tax, and the design is basedon the e motif in e-Tax andthe monitor screen of a personal
computer.

The NTA is working to optimize its operations and systems related to national tax administration.
Based on the “e-Government Establishment Plan” decided in July 2003, the NTA adopted the basic
principles of: ① Simplification and improvement in operational efficiency for appropriate performance, ②Improvement in the convenience of taxpayers by utilization of IT, ③ Sophistication of the system related to
examinations and collections of tax delinquency through the utilization of IT, ④ Ensuring stability andreliability of the system and information security, ⑤ Reduction of expenses related to the system andensuring the transparency of procurement. The NTA used these principles to form the “Optimization Planof Operations and Systems related to National Tax Administration”, which was decided and published in
March 2006 (revised in June 2010).
Looking at actions taken over the past year, for the aspect of simplification and improvement in
operational efficiency, the NTA has been unifying in-office work in Tax Offices throughout Japan since July
2009. With the wider use of e-Tax, the NTA has also been working to further boost operational efficiency.
For the aspect of improvement in the convenience of taxpayers, the NTA has been improving theusability of e-Tax, and introduced direct payment as a new means of national tax payment.
For the aspect of sophistication of the system, we are improving the systems to keep abreast of
globalization and the advanced use of IT in the society and economy in order to further enhance our ability
to examine and address collection of delinquent tax.
With regard to reduction of expenses related to the system and ensuring the transparency of
procurement, we are pushing forward to turn the KSK System into an open system*1, where theinterchangeability of systems is enhanced, and NTA moves towards adopting general purpose software
products, and integrates equipment when replaced or updated.
Facing tight financial conditions, the NTA believes that optimizing administrative tasks and systems
will help reduce operating expenses, simplify administrative processes, enhance work efficiency andimprove convenience for taxpayers. In order to fulfill the NTA’s duty to realize proper and fair taxation, weare striving to enhance tax examination and collection of delinquent tax.

Tax Office

10,00070

2 Optimization of operations and systems

Promotion of Tax Filingand Payment by
Proper Self-Assessment

12,000Mr. e-Ta

Number of cases
Usage rate (%) （％）
90
16,57880

About the NTA● Trend of number of filing cases and usage rate by using e-Tax

Effect of cost-cutting¥16 billion / year

*1 Turning into open systems means to shift to the use of systems with a high degree of interchangeability that can accept multiple widely available products
rather than relying on specific manufacturer.

31

32

Ⅲ Improvement of Taxpayer Conven ience and Administrative Efficiency(thousands)
18,00016,00014,31814,000
9,197

37％

8,000
6,000
4,000

45％

60
50
40
30

23％

20

2,000

10

0

0

FY2008FY2009（2）Filing assistance on the NTA website

6,144

6,000
4,692

5,000
3,370

3,000
1,924
602

2,000
695
2004

2 Use of IT to improve taxpayer
convenience
Improvement of functions
and operation of e-Tax
Functional improvement of
NTA website

1,664

3,808

4,660

2,765

1,323

1,705

1,927

2005

2006

2007

2,336

2,637

2008

2009

Centralization ofoperations
Promotion ofoutsourcing

Customer contact related work
Process tax returns, etc.

Reduce operations processing time
Results in reducing operations processing time
110,000 man-days/year

NTA website

KSK system, etc.

Uniﬁcation of in-oﬃce work
Simpliﬁcation of operations

1 Simplification and improvement in operational
efficiency for appropriate performance
Examinations and collections of tax
delinquency

Enhancement
3 Use of IT for a moreadvanced system related to
examinations and collectionsof tax delinquency

4 Ensuring stability and reliability ofthe system and information security
5 Reduction of expenses related
to the system and ensuring thetransparency of procurement

Statistics※ Figures represent those submitted by the end of March of the following year.
The use of personal computers installed in the Tax Office started from those for tax returns for 2004. However, the number of taxpayers who
submitted returns using this method remains unaccounted for.
The number of taxpayers who submitted tax returns for years before 2003 remains unaccounted for.
The number of taxpayers who submitted tax returns for years after 2007 includes cases using e-Tax.

Centralization oftax consultation

Promotionof one-stop
service

e-Tax(online tax return filing, etc.)

Future Challenges

4,000

0

Taxpayers

7,297

7,000

1,000

Phone Consultation
Center

Systems related to National
Tax Administration

Administrationof the Liquor Industry

Persons filing tax returns (website)
Persons filing tax returns (Tax Office)(thousand people)
8,000

related to National Tax Administration” (diagram)

Remedy for Infringementof Taxpayer Rights● Trend in income tax return submissions prepared in the filing assistance on the NTA website● Execution of “Optimization Plan of Operations and Systems

Tax Administration Under
Increasing Globalization

Entry of amounts and other necessary information into the filing assistance on the NTA website
according to screen guides for personal computers allows taxpayers to complete their tax returns forincome tax, individual consumption tax, and gift tax as well as financial statements for blue returns. The
prepared data can be directly electronically filed as tax returns from this website area (excluding gifttax), and if needed, it can be printed and submitted to the Tax Office by post, etc.
Since the system was introduced in the filing period for the 2002 final tax return, the number ofusers has increased each year. For the 2009 filing, taxpayers who used this system to submit returns
from homes, offices, or consultation sites in Tax Offices totaled 7.3 million cases, or 30.8% of all
taxpayers who filed tax returns. Of these, about 65% of the submissions were made by e-Tax.
We will continue our efforts to improve the system to make it more easy-to-use based on feedback
from users, so that it can be used by as many taxpayers as possible.

Improvement of Taxpayer
Convenience andAdministrative Efficiency

FY2007※ Figures represent the number of cases and usage rate for priority procedures
described in the “Action Plan for Expanding the Utilization of Online”.

Mr. e-Ta is an image character for e-Tax. He is named after
e-Tax, and the design is basedon the e motif in e-Tax andthe monitor screen of a personal
computer.

The NTA is working to optimize its operations and systems related to national tax administration.
Based on the “e-Government Establishment Plan” decided in July 2003, the NTA adopted the basic
principles of: ① Simplification and improvement in operational efficiency for appropriate performance, ②Improvement in the convenience of taxpayers by utilization of IT, ③ Sophistication of the system related to
examinations and collections of tax delinquency through the utilization of IT, ④ Ensuring stability andreliability of the system and information security, ⑤ Reduction of expenses related to the system andensuring the transparency of procurement. The NTA used these principles to form the “Optimization Planof Operations and Systems related to National Tax Administration”, which was decided and published in
March 2006 (revised in June 2010).
Looking at actions taken over the past year, for the aspect of simplification and improvement in
operational efficiency, the NTA has been unifying in-office work in Tax Offices throughout Japan since July
2009. With the wider use of e-Tax, the NTA has also been working to further boost operational efficiency.
For the aspect of improvement in the convenience of taxpayers, the NTA has been improving theusability of e-Tax, and introduced direct payment as a new means of national tax payment.
For the aspect of sophistication of the system, we are improving the systems to keep abreast of
globalization and the advanced use of IT in the society and economy in order to further enhance our ability
to examine and address collection of delinquent tax.
With regard to reduction of expenses related to the system and ensuring the transparency of
procurement, we are pushing forward to turn the KSK System into an open system*1, where theinterchangeability of systems is enhanced, and NTA moves towards adopting general purpose software
products, and integrates equipment when replaced or updated.
Facing tight financial conditions, the NTA believes that optimizing administrative tasks and systems
will help reduce operating expenses, simplify administrative processes, enhance work efficiency andimprove convenience for taxpayers. In order to fulfill the NTA’s duty to realize proper and fair taxation, weare striving to enhance tax examination and collection of delinquent tax.

Tax Office

10,00070

2 Optimization of operations and systems

Promotion of Tax Filingand Payment by
Proper Self-Assessment

12,000Mr. e-Ta

Number of cases
Usage rate (%) （％）
90
16,57880

About the NTA● Trend of number of filing cases and usage rate by using e-Tax

Effect of cost-cutting¥16 billion / year

*1 Turning into open systems means to shift to the use of systems with a high degree of interchangeability that can accept multiple widely available products
rather than relying on specific manufacturer.

31

32

Ⅲ Improvement of Taxpayer Conven ience and Administrative Efficiency

Ta x Offic e s● Sapporo

OCR entry of tax return【OCR Equipment 】 【PC】

Kanazawa ●OnlineKanto-Shinetsu●● TokyoHiroshima●●
Fukuoka ● Takamatsu ● Osaka ● Nagoya●Kumamoto“Where is payment?
I also want a certificate
of tax payment.”

Reception“We handle
those here.”Taxpayers/CPTAs“Submit tax
return?”OnlineComputerCenters

Management Groupe -TaxReception

1F“Where do I
submit a tax
return?”“I came to
pay taxes.”“Do that at the
Co-ordination
Division”“Please go to
the Management
Group”

Future Challenges● Sendai

Tax
Returns

Unified contact point

Administrationof the Liquor Industry■ KSK System
Nationwide Online Processing

Co-ordination Division

2F

Remedy for Infringementof Taxpayer Rights

The KSK System, which links all Regional Taxation Bureaus and Tax Offices, is a computer
system introduced to handle a variety of different administrative tasks. The entry of tax returns, tax
payment records, and a variety of information enables the centralization of the administration oftaxes receivable. Analyzed data is used in tax examination and collection of delinquent tax. The
computer system centralizes information management across geographical regions and items oftaxes to realize sophisticated, efficient administration constituting the basis of tax administration.
The full-fledged development of the KSK System was started in 1990. The NTA phased in the
introduction of the KSK System starting in 1995 and nationally in 2001.

BeforeTax Administration Under
Increasing Globalization

KSK System

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Reference

Since July 2009, the NTA has been implementing “unification of in-office work” in Tax Offices
throughout Japan.
Previously, multiple departments in the Tax Office handled work based on each tax item, for theseries of office tasks from taxpayer filing of returns to tax payment, and for taxpayer change ofaddress ,etc. But currently, these similar tasks are combined and centrally processed by one group(Revenue Management and Processing Group) using IT, with the goal of boosting work efficiency.
One group (Revenue Management and Processing Group) also handles much of the customer
contact related work of the Tax Office, enhancing taxpayer convenience.
For example, previously, when a taxpayer requested a certificate of tax payment, depending on thecontent of that request, the taxpayer had to submit request forms to multiple contact points. But
requests can now be made at one contact point, regardless of the request’s content. This contact point
handles certificates of tax payment, and also submission of tax returns and applications, tax payments,
and general consultation on taxes.*1
For tax consultations which are difficult to handle by phone because specific documents or facts
must be checked, an appointed date and time is set in advance, and it is handled by consultation inperson at the Tax Office with jurisdiction.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Because the national tax-related administrative tasks are closely connected to public rights andobligations, system failure is likely to have a signiﬁcant impact on citizens and impair the credibility of tax
administration. Therefore, the NTA is working to maintain stable operation of the systems related tonational taxes by regularly updating equipment and devices.
As the national tax-related system stores a signiﬁcant amount of taxpayerʼs information, the NTA ispaying very close attention to prevent unauthorized use and leaks of the information. To ensure security,
the NTA has set up a system where oﬃcials are allowed to access only the data necessary for their duties,
and has established oﬃcial directives for information security, which it is thoroughly implementing. In
addition, the NTA is trying to assure information security by conducting security audits with outside
experts.
At the computer center which stores data for e-Tax and the KSK System, the NTA built an information
security management system (ISMS)*1 which complies with international standards, and in 2007 obtained
certiﬁcation based on the ISMS compliance evaluation system (certiﬁcation based on ISO/IEC27001:2005& JISQ27001:2006*2). Obtaining certiﬁcation led to development and strengthening of the information
security management system for the entire national tax system. This also enhanced staﬀ awareness of
information security, as they work to operate the system with awareness and a sense of mission.

3 Unification of in-office work implemented in all Tax Offices

About the NTA

Stability and reliability of systems and assurance of information security

Internet

33*1 An Information Security Management System is an organizational initiative to execute planning, operation, review and improvement, in order to maintain asituation of appropriate management for confidentiality and completeness and usability of information assets which should be protected.
*2 ISO/IEC27001:2005 is one of the standards created by the International Organization for Standardization. This became a global standard for information
security management systems in October 2005. JISQ 27001:2006 is a Japanese domestic standard published in May 2006, corresponding to ISO/IEC27001.

Statistics● Okinawa Office*1 In principle, general consultations on taxes are handled centrally by the national telephone consultation center.

34

Ⅲ Improvement of Taxpayer Conven ience and Administrative Efficiency

Ta x Offic e s● Sapporo

OCR entry of tax return【OCR Equipment 】 【PC】

Kanazawa ●OnlineKanto-Shinetsu●● TokyoHiroshima●●
Fukuoka ● Takamatsu ● Osaka ● Nagoya●Kumamoto“Where is payment?
I also want a certificate
of tax payment.”

Reception“We handle
those here.”Taxpayers/CPTAs“Submit tax
return?”OnlineComputerCenters

Management Groupe -TaxReception

1F“Where do I
submit a tax
return?”“I came to
pay taxes.”“Do that at the
Co-ordination
Division”“Please go to
the Management
Group”

Future Challenges● Sendai

Tax
Returns

Unified contact point

Administrationof the Liquor Industry■ KSK System
Nationwide Online Processing

Co-ordination Division

2F

Remedy for Infringementof Taxpayer Rights

The KSK System, which links all Regional Taxation Bureaus and Tax Offices, is a computer
system introduced to handle a variety of different administrative tasks. The entry of tax returns, tax
payment records, and a variety of information enables the centralization of the administration oftaxes receivable. Analyzed data is used in tax examination and collection of delinquent tax. The
computer system centralizes information management across geographical regions and items oftaxes to realize sophisticated, efficient administration constituting the basis of tax administration.
The full-fledged development of the KSK System was started in 1990. The NTA phased in the
introduction of the KSK System starting in 1995 and nationally in 2001.

BeforeTax Administration Under
Increasing Globalization

KSK System

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Reference

Since July 2009, the NTA has been implementing “unification of in-office work” in Tax Offices
throughout Japan.
Previously, multiple departments in the Tax Office handled work based on each tax item, for theseries of office tasks from taxpayer filing of returns to tax payment, and for taxpayer change ofaddress ,etc. But currently, these similar tasks are combined and centrally processed by one group(Revenue Management and Processing Group) using IT, with the goal of boosting work efficiency.
One group (Revenue Management and Processing Group) also handles much of the customer
contact related work of the Tax Office, enhancing taxpayer convenience.
For example, previously, when a taxpayer requested a certificate of tax payment, depending on thecontent of that request, the taxpayer had to submit request forms to multiple contact points. But
requests can now be made at one contact point, regardless of the request’s content. This contact point
handles certificates of tax payment, and also submission of tax returns and applications, tax payments,
and general consultation on taxes.*1
For tax consultations which are difficult to handle by phone because specific documents or facts
must be checked, an appointed date and time is set in advance, and it is handled by consultation inperson at the Tax Office with jurisdiction.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Because the national tax-related administrative tasks are closely connected to public rights andobligations, system failure is likely to have a signiﬁcant impact on citizens and impair the credibility of tax
administration. Therefore, the NTA is working to maintain stable operation of the systems related tonational taxes by regularly updating equipment and devices.
As the national tax-related system stores a signiﬁcant amount of taxpayerʼs information, the NTA ispaying very close attention to prevent unauthorized use and leaks of the information. To ensure security,
the NTA has set up a system where oﬃcials are allowed to access only the data necessary for their duties,
and has established oﬃcial directives for information security, which it is thoroughly implementing. In
addition, the NTA is trying to assure information security by conducting security audits with outside
experts.
At the computer center which stores data for e-Tax and the KSK System, the NTA built an information
security management system (ISMS)*1 which complies with international standards, and in 2007 obtained
certiﬁcation based on the ISMS compliance evaluation system (certiﬁcation based on ISO/IEC27001:2005& JISQ27001:2006*2). Obtaining certiﬁcation led to development and strengthening of the information
security management system for the entire national tax system. This also enhanced staﬀ awareness of
information security, as they work to operate the system with awareness and a sense of mission.

3 Unification of in-office work implemented in all Tax Offices

About the NTA

Stability and reliability of systems and assurance of information security

Internet

33*1 An Information Security Management System is an organizational initiative to execute planning, operation, review and improvement, in order to maintain asituation of appropriate management for confidentiality and completeness and usability of information assets which should be protected.
*2 ISO/IEC27001:2005 is one of the standards created by the International Organization for Standardization. This became a global standard for information
security management systems in October 2005. JISQ 27001:2006 is a Japanese domestic standard published in May 2006, corresponding to ISO/IEC27001.

Statistics● Okinawa Office*1 In principle, general consultations on taxes are handled centrally by the national telephone consultation center.

34

Administration Under Increasing
Ⅳ Tax
Globalization● Trend in the number of foreign corporations(corporations)
6,000

5,390

5,000
4,000

4,317

4,804

’01

’02

5,890

’04

’05

5,757

5,719

’06

’07

5,914

3,231

3,000

1 Addressing international transactions

2,000

’03

’08
(operation year)③ Trend in the number of records of remittances and receipts related to foreign countries
A record of remittance and receipt related to foreign countries is submitted if a large remittanceis sent overseas.*1 The number of these submitted is shown below. There were 3.41 million records
in operation year 2008, which was 0.5 million records less than the previous year. But the number
submitted is in a growing trend overall, as the number of records has increased to approximately
1.4 times the level when this system was introduced in operation year 1998.
● Trend in the number of records of remittance and receipt related to foreign countries

ASEAN4
NIEs3
Mid-East

EuropeOceania
All Regions(millions)
4.0
3.5

12,657

13,166

13,017

13,93914,991
12,476

13,322

13,875

14,99615,85016,37016,732

2.5
2.0
1.5
1.0

2.56

2.50

2.61

2.76

’98

’99

’00

’01

’02

3.11

’03

’04

’05

3.69

3.91

3.41

0.5
0

’06

’07

’08
(operation year)

b. Activities related to international taxation

’97

’98

’99

’00

’01

’02

’03

’04

’05

’06

’07

’08
(fiscal year)(Source: “Basic Research on Overseas Business Activities”,
by the Ministry of Economy, Trade and Industry.)

Statistics② Trend in the number of foreign corporations
The following is the trend in the number of the foreign corporations operating in Japan. Foreign
corporations increased by 195 over the previous year, to 5,914 in operation year 2008. That growthrate is 2.3 times greater than 10 years earlier, although it is slowing down.

Future Challenges’96

As corporations and individuals expand their cross-border business and investment activities,
tax examinations related to international taxation are gaining in importance.
This is why the NTA is working to enhance and strengthen its examination organization, suchas by increasing its number of Senior Examiners (International Taxation), and establishingdepartments which specialize in handling international tax avoidance cases. To handle complex
tax problems, the NTA is also recruiting lawyers and financial specialists as Senior Examiners(International Taxation).
In addition, officials are improving examination skills and abilities related to international
taxation at the National Tax College (NTC), a training institute in which personnel learn about
legislation related to international taxation, tax treaty and financial transactions, as well as foreign
languages.

Administrationof the Liquor Industry

2.44

2.98

3.21

Remedy for Infringementof Taxpayer Rights

3.0
17,658Note 1: “ASEAN4” signifies Malaysia, Thailand, Indonesia, and the Philippines.
Note 2: “NIEs3” signifies Singapore, Taiwan, and South Korea.

35

’00

Tax Administration Under
Increasing Globalization

Along with the progress in economic globalization, cross-border business and investment
activities by individuals and corporations are becoming increasingly active.
① Status of overseas advances by Japanese corporations
The following is the status of overseas advances by Japanese corporations. The number ofoverseas locally organized corporations increased from 10,416 in 1995 to 17,658 in 2008, an
increase of 1.7 times, with a particularly rapid growth of advance into China.

(corporations)
20,00019,00018,00017,00016,00015,00014,00013,00012,00010,416
11,00010,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
’95

’99

Improvement of Taxpayer
Convenience andAdministrative Efficiency

a. Environment involving international taxation

North America
Latin America
China

’98

※ Foreign corporations filing corporation tax return in Japan（1）Organization and officials for international taxation● Trend in the number of locally organized corporations by region

2,626

Promotion of Tax Filingand Payment by
Proper Self-Assessment

3,838

5,816

About the NTA

Cross-border economic activities by companies and individuals are becoming more complex anddiverse. These changes have brought international tax avoidance, in which revenues received overseas are
not declared, or which use complex international transactions to avoid paying tax to any country on
earnings gained. On the other hand, there is the large problem of double taxation, in which more than one
country have different views and impose taxes on the same income. In response to these problems, the
NTA is working to improve its examination system, and is also building stronger cooperative relations by
sharing information and experience with the tax authorities of foreign countries. The NTA is also in
discussions with the authorities to resolve double taxation.

*1 The record of remittance and receipt related to foreign countries is a report legally required to be submitted to the Tax Offices by financial institutions.
These indicate the amount remitted to or received from overseas nations exceeding ¥2 million (the amount was decreased from more than ¥2 million tomore than ¥1 million in April 2009).

36

Administration Under Increasing
Ⅳ Tax
Globalization● Trend in the number of foreign corporations(corporations)
6,000

5,390

5,000
4,000

4,317

4,804

’01

’02

5,890

’04

’05

5,757

5,719

’06

’07

5,914

3,231

3,000

1 Addressing international transactions

2,000

’03

’08
(operation year)③ Trend in the number of records of remittances and receipts related to foreign countries
A record of remittance and receipt related to foreign countries is submitted if a large remittanceis sent overseas.*1 The number of these submitted is shown below. There were 3.41 million records
in operation year 2008, which was 0.5 million records less than the previous year. But the number
submitted is in a growing trend overall, as the number of records has increased to approximately
1.4 times the level when this system was introduced in operation year 1998.
● Trend in the number of records of remittance and receipt related to foreign countries

ASEAN4
NIEs3
Mid-East

EuropeOceania
All Regions(millions)
4.0
3.5

12,657

13,166

13,017

13,93914,991
12,476

13,322

13,875

14,99615,85016,37016,732

2.5
2.0
1.5
1.0

2.56

2.50

2.61

2.76

’98

’99

’00

’01

’02

3.11

’03

’04

’05

3.69

3.91

3.41

0.5
0

’06

’07

’08
(operation year)

b. Activities related to international taxation

’97

’98

’99

’00

’01

’02

’03

’04

’05

’06

’07

’08
(fiscal year)(Source: “Basic Research on Overseas Business Activities”,
by the Ministry of Economy, Trade and Industry.)

Statistics② Trend in the number of foreign corporations
The following is the trend in the number of the foreign corporations operating in Japan. Foreign
corporations increased by 195 over the previous year, to 5,914 in operation year 2008. That growthrate is 2.3 times greater than 10 years earlier, although it is slowing down.

Future Challenges’96

As corporations and individuals expand their cross-border business and investment activities,
tax examinations related to international taxation are gaining in importance.
This is why the NTA is working to enhance and strengthen its examination organization, suchas by increasing its number of Senior Examiners (International Taxation), and establishingdepartments which specialize in handling international tax avoidance cases. To handle complex
tax problems, the NTA is also recruiting lawyers and financial specialists as Senior Examiners(International Taxation).
In addition, officials are improving examination skills and abilities related to international
taxation at the National Tax College (NTC), a training institute in which personnel learn about
legislation related to international taxation, tax treaty and financial transactions, as well as foreign
languages.

Administrationof the Liquor Industry

2.44

2.98

3.21

Remedy for Infringementof Taxpayer Rights

3.0
17,658Note 1: “ASEAN4” signifies Malaysia, Thailand, Indonesia, and the Philippines.
Note 2: “NIEs3” signifies Singapore, Taiwan, and South Korea.

35

’00

Tax Administration Under
Increasing Globalization

Along with the progress in economic globalization, cross-border business and investment
activities by individuals and corporations are becoming increasingly active.
① Status of overseas advances by Japanese corporations
The following is the status of overseas advances by Japanese corporations. The number ofoverseas locally organized corporations increased from 10,416 in 1995 to 17,658 in 2008, an
increase of 1.7 times, with a particularly rapid growth of advance into China.

(corporations)
20,00019,00018,00017,00016,00015,00014,00013,00012,00010,416
11,00010,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
’95

’99

Improvement of Taxpayer
Convenience andAdministrative Efficiency

a. Environment involving international taxation

North America
Latin America
China

’98

※ Foreign corporations filing corporation tax return in Japan（1）Organization and officials for international taxation● Trend in the number of locally organized corporations by region

2,626

Promotion of Tax Filingand Payment by
Proper Self-Assessment

3,838

5,816

About the NTA

Cross-border economic activities by companies and individuals are becoming more complex anddiverse. These changes have brought international tax avoidance, in which revenues received overseas are
not declared, or which use complex international transactions to avoid paying tax to any country on
earnings gained. On the other hand, there is the large problem of double taxation, in which more than one
country have different views and impose taxes on the same income. In response to these problems, the
NTA is working to improve its examination system, and is also building stronger cooperative relations by
sharing information and experience with the tax authorities of foreign countries. The NTA is also in
discussions with the authorities to resolve double taxation.

*1 The record of remittance and receipt related to foreign countries is a report legally required to be submitted to the Tax Offices by financial institutions.
These indicate the amount remitted to or received from overseas nations exceeding ¥2 million (the amount was decreased from more than ¥2 million tomore than ¥1 million in April 2009).

36

Ⅳ Tax Administration Under Increasing Globalizationc. Performance of examinations related to international taxation

Amount of undeclared income
Amount of undeclared income related to overseas transactions
Undeclared cases related to overseas transactions(cases)1,000(¥billion)
2,000

1,600

885
817

796

783

1,400

713

696

1,200

834

870

893

600
500

600

0

838.8
630.8

240.4

677.3

186.7

224.1

’00

’01

400
900.4

848.3

609.1
378.5

’02

215.6

’03

408.0

508.6

300
557.1

399.2

417.7

200
100

186.0

’04

’05

※ Taxation status of corporations (with ¥100 million or more capital, in principle) examined by theLarge Enterprise Examination Department

’06

’07

0
’08
(operation year)（2）International tax avoidanceb. Advance Pricing Arrangement (APA)

Future Challenges

In an APA, on transfer pricing taxation based on the taxpayer’s request, the tax authority gives
advance confirmation of the method for calculating the arm’s length price in transactions with anforeign affiliated company. The number of requests for APA is increasing, as a result of theincrease in international transactions.
APA ensure predictability and legal stability for taxpayers. They also contribute to proper andsmooth operation of the transfer pricing taxation. This is why the NTA is proactively handling APAs.
Specifically, to enable the taxpayer to smoothly use APA procedures, a contact point is set up ineach Regional Taxation Bureau, which handles advance consultations with tax authorities before
requesting an APA. The NTA is also working to improve its organization and quickly process APAs:
an Advance Pricing Arrangement Division in charge of APA examinations was established in theTokyo Regional Taxation Bureau and the Osaka Regional Taxation Bureau, staff working on APAs
have been increased, etc.
For smoother processing of Advance Pricing Arrangements, the NTA is also strengthening
coordination between examining departments and Mutual Agreement Procedure departments.

Administrationof the Liquor Industry
Statistics

37

International tax avoidance problems are arising, as revenues gained overseas are hidden, and as
people cleverly use differences between each country’s tax system and tax treaties to avoid paying
taxes to any country, despite gaining earnings. International tax avoidance, often prepared by financial,legal and tax specialists, uses complex transactions which combine paper companies or cooperatives,
derivatives, etc., which makes it difficult to clarify the whole picture of the transactions. Recently, suchproblems are not only found among large companies, as it has also spread to small and medium
companies and wealthy individuals.
As we tax authorities recognize that failure to properly fulfill tax obligations by using international
tax avoidance damages taxpayers’ sense of fairness, we must strive to understand this and clarify theactual situations, and ensure that proper tax obligations are fulfilled. To address this issue, the NTA
uses tax examinations and other various opportunities to gather information on international tax
avoidance conduct, and if a tax problem is found, does a thorough tax examination to clarify the actual
situation.
Also, in order to strengthen our handling of such international tax avoidance, Chief Examiners
were newly assigned to departments which specialize in information collection and analysis and inplanning examinations, in the Tokyo and Osaka Regional Taxation Bureaus. In collecting data andinformation on international tax avoidance conduct and clarifying the actual situation, central roles areplayed by Chief Examiners, Large Enterprise Examination Departments (Divisions), and project teams
and examination support teams set up in major Regional Taxation Bureaus.
Furthermore, aiming to clarify international tax avoidance, Japan, the USA, Canada, Australia,

In order to increase predictability for taxpayers, it is important that the NTA publishes andworks to clarify its execution policy for the system’s operation, and its application criteria. In 2010,
the NTA revised its administrative guidelines for operation, and its directives for interpretation oflaws. These guidelines and directives clarifies the NTA’s policy which should be considered in its
examinations when studying the process of determining prices of transactions with foreign affiliatedcompanies, and considered in studying documents deemed necessary to calculate arm’s length
price.
To also ensure proper and fair implementation, the NTA is working to enhance its examination
system, for appropriate fact finding and interpretation and application of laws and regulations.

Remedy for Infringementof Taxpayer Rights

’99

635.6

786.4

897.7

a. Clarification of administering the system and strengthening the structure of thereview system

Tax Administration Under
Increasing Globalization

800

200

800
700

679

1,000

400

900

The transfer pricing system was introduced in the FY1986 tax reform. From the perspective ofworking to achieve proper international taxation, this prevents transferring income overseas bymanipulating transaction prices with a foreign affiliated company. Specifically, if a transaction pricediffers from the transaction price between third parties (this price is called “arm’s length price”),
resulting in lower income for the Japanese company, then that transaction is deemed to have been
done at an arm’s length price, and income is recalculated under this system.
As company activities become increasingly global, more transactions are becoming subject to thetransfer pricing system, and transactions are becoming more complex, with our growing awareness of
the issues for transactions involving intangible assets. It is necessary to appropriately handle suchchanges, increase predictability for taxpayers, and realize proper and fair taxation.
In relation to transfer pricing taxation cases, a system to provide a grace period for national tax
payments has been established since FY2007 (FY2008 for local tax).

Improvement of Taxpayer
Convenience andAdministrative Efficiency

1,800（3）Transfer pricing issues

Promotion of Tax Filingand Payment by
Proper Self-Assessment● Performance of examinations related to international taxation

About the NTA

The NTA is prioritizing examinations of taxpayers doing overseas transactions, and taxpayers
who hold overseas assets.
Undeclared income related to overseas transactions remained at a high level in operation year
2008, comprising over 30% of undeclared income of large corporations (handled by Large
Enterprise Examination Departments of Regional Taxation Bureaus).

and the U.K. participate in the Joint International Tax Shelter Information Centre (JITSIC). JITSIC
works to share information on international tax avoidance schemes and initiatives in member countries.

38

Ⅳ Tax Administration Under Increasing Globalizationc. Performance of examinations related to international taxation

Amount of undeclared income
Amount of undeclared income related to overseas transactions
Undeclared cases related to overseas transactions(cases)1,000(¥billion)
2,000

1,600

885
817

796

783

1,400

713

696

1,200

834

870

893

600
500

600

0

838.8
630.8

240.4

677.3

186.7

224.1

’00

’01

400
900.4

848.3

609.1
378.5

’02

215.6

’03

408.0

508.6

300
557.1

399.2

417.7

200
100

186.0

’04

’05

※ Taxation status of corporations (with ¥100 million or more capital, in principle) examined by theLarge Enterprise Examination Department

’06

’07

0
’08
(operation year)（2）International tax avoidanceb. Advance Pricing Arrangement (APA)

Future Challenges

In an APA, on transfer pricing taxation based on the taxpayer’s request, the tax authority gives
advance confirmation of the method for calculating the arm’s length price in transactions with anforeign affiliated company. The number of requests for APA is increasing, as a result of theincrease in international transactions.
APA ensure predictability and legal stability for taxpayers. They also contribute to proper andsmooth operation of the transfer pricing taxation. This is why the NTA is proactively handling APAs.
Specifically, to enable the taxpayer to smoothly use APA procedures, a contact point is set up ineach Regional Taxation Bureau, which handles advance consultations with tax authorities before
requesting an APA. The NTA is also working to improve its organization and quickly process APAs:
an Advance Pricing Arrangement Division in charge of APA examinations was established in theTokyo Regional Taxation Bureau and the Osaka Regional Taxation Bureau, staff working on APAs
have been increased, etc.
For smoother processing of Advance Pricing Arrangements, the NTA is also strengthening
coordination between examining departments and Mutual Agreement Procedure departments.

Administrationof the Liquor Industry
Statistics

37

International tax avoidance problems are arising, as revenues gained overseas are hidden, and as
people cleverly use differences between each country’s tax system and tax treaties to avoid paying
taxes to any country, despite gaining earnings. International tax avoidance, often prepared by financial,legal and tax specialists, uses complex transactions which combine paper companies or cooperatives,
derivatives, etc., which makes it difficult to clarify the whole picture of the transactions. Recently, suchproblems are not only found among large companies, as it has also spread to small and medium
companies and wealthy individuals.
As we tax authorities recognize that failure to properly fulfill tax obligations by using international
tax avoidance damages taxpayers’ sense of fairness, we must strive to understand this and clarify theactual situations, and ensure that proper tax obligations are fulfilled. To address this issue, the NTA
uses tax examinations and other various opportunities to gather information on international tax
avoidance conduct, and if a tax problem is found, does a thorough tax examination to clarify the actual
situation.
Also, in order to strengthen our handling of such international tax avoidance, Chief Examiners
were newly assigned to departments which specialize in information collection and analysis and inplanning examinations, in the Tokyo and Osaka Regional Taxation Bureaus. In collecting data andinformation on international tax avoidance conduct and clarifying the actual situation, central roles areplayed by Chief Examiners, Large Enterprise Examination Departments (Divisions), and project teams
and examination support teams set up in major Regional Taxation Bureaus.
Furthermore, aiming to clarify international tax avoidance, Japan, the USA, Canada, Australia,

In order to increase predictability for taxpayers, it is important that the NTA publishes andworks to clarify its execution policy for the system’s operation, and its application criteria. In 2010,
the NTA revised its administrative guidelines for operation, and its directives for interpretation oflaws. These guidelines and directives clarifies the NTA’s policy which should be considered in its
examinations when studying the process of determining prices of transactions with foreign affiliatedcompanies, and considered in studying documents deemed necessary to calculate arm’s length
price.
To also ensure proper and fair implementation, the NTA is working to enhance its examination
system, for appropriate fact finding and interpretation and application of laws and regulations.

Remedy for Infringementof Taxpayer Rights

’99

635.6

786.4

897.7

a. Clarification of administering the system and strengthening the structure of thereview system

Tax Administration Under
Increasing Globalization

800

200

800
700

679

1,000

400

900

The transfer pricing system was introduced in the FY1986 tax reform. From the perspective ofworking to achieve proper international taxation, this prevents transferring income overseas bymanipulating transaction prices with a foreign affiliated company. Specifically, if a transaction pricediffers from the transaction price between third parties (this price is called “arm’s length price”),
resulting in lower income for the Japanese company, then that transaction is deemed to have been
done at an arm’s length price, and income is recalculated under this system.
As company activities become increasingly global, more transactions are becoming subject to thetransfer pricing system, and transactions are becoming more complex, with our growing awareness of
the issues for transactions involving intangible assets. It is necessary to appropriately handle suchchanges, increase predictability for taxpayers, and realize proper and fair taxation.
In relation to transfer pricing taxation cases, a system to provide a grace period for national tax
payments has been established since FY2007 (FY2008 for local tax).

Improvement of Taxpayer
Convenience andAdministrative Efficiency

1,800（3）Transfer pricing issues

Promotion of Tax Filingand Payment by
Proper Self-Assessment● Performance of examinations related to international taxation

About the NTA

The NTA is prioritizing examinations of taxpayers doing overseas transactions, and taxpayers
who hold overseas assets.
Undeclared income related to overseas transactions remained at a high level in operation year
2008, comprising over 30% of undeclared income of large corporations (handled by Large
Enterprise Examination Departments of Regional Taxation Bureaus).

and the U.K. participate in the Joint International Tax Shelter Information Centre (JITSIC). JITSIC
works to share information on international tax avoidance schemes and initiatives in member countries.

38

Ⅳ Tax Administration Under Increasing Globalization

Requested cases
Closed cases(cases)
120

111

100

60
40

0

● Trend in the number of MAP cases

Number of MAPs
Number of BAPAs
Officials in charge of MAP(cases, persons)
200
29

28

19

’98

150

’99

’00

’01

’02

’03

’04

’05

’06

’07

※ The number of cases requesting an APA does not include the number of cases for which changes were made after therequest. Meanwhile, the number of APA cases (refer to page 40) out of the cases subject to Mutual Agreement Procedure(MAP) includes cases of changes acknowledged after being requested (because MAP is made again with regard tochanges). Therefore, the figures do not match.

’08(operation year)

Improvement of Taxpayer
Convenience andAdministrative Efficiency

20

70

65

100

’01

’02

’03

’04

’05

’06

’07

’08
(operation year)● Tax treaty network of Japan (47 treaties applied in 58 countries as of April 2010)

East Europe/Former Soviet
Union (18 countries)

European Region (15 countries)
IRELAND

DENMARKU.K.

GERMANY

Italy

NorwayAustria

Finland

NETHERLANDSFRANCE

SWITZERLANDBELGIUM

SWEDEN

Luxembourg

SPAIN

Middle East (3 countries)
Israel

INDIA

Bangladesh

Pakistan

Sri Lanka

African Region (2 counties)
South Africa

Pacific Region (3 countries)
NEW ZEALAND

Turkmenistan *1

Ukraine *1

Hungary

Uzbekistan*1

Bulgaria

Kazakhstan

Belarus*1

Kyrgyz*1

PolandGeorgia*1

Moldova*1

Slovakia*2

Romania

Tajikistan*1

Russia*1

USA

South Asia (4 countries)

AUSTRALIA

Czech Republic*2

Armenia*1

North America (2 countries)

TurkeyEgyptZambiaAzerbaijan*1

Fiji*

4

CANADA

Latin America (2 countries)
BrazilMexicoCapitalized are the names of countries (22) conducting MAP
with the NTA as of the end of June 2009.
Underlined are the names of countries (18) conducting BAPA.

East/Southeast Asia (9 countries)*1

The treaty with the former Soviet Union is taken over.
*2 The treaty with former Czechoslovakia is taken over.
*3 The treaty does not apply to Hong Kong and Macao.
*4 Fiji takes over the former treaty with the U.K.

INDONESIACHINA*3

Vietnam

PHILIPPINESSOUTH KOREA

BruneiSINGAPORE

MALAYSIA

Statistics

39*1 Main items of international standards on information exchange: information held by financial institutions is also subject to information exchange, andinformation exchange is done even if there are no taxable earnings in one’s own country.
*2 “Mutual Agreement Procedure (MAP)” means the negotiation procedure between the tax authorities of countries party to a tax treaty, to relieve taxpayers
from taxation that is not in accordance with the provisions of the treaty, where the actions of one or both of the countries result in or will result in taxation thatis not in accordance with the provisions of the tax treaty.

’00

Future Challenges

As globalization progresses with individuals and corporations advancing into foreign markets,
double taxation may arise, where both Japan and a foreign country impose income tax. The transfer
pricing taxation described above may also cause double taxation. The NTA is addressing the global
issue of double taxation by making use of MAP*2 with foreign tax authorities based on tax treaties.
The number of MAP cases has increased in recent years, with more than 90% of MAP cases
related to transfer pricing. Among MAP cases, to assure predictability about transfer pricing, thenumber of MAP cases related to APA is increasing. During operation year 2008, the NTA received 174
cases of MAP, of which 160 cases were related to transfer pricing and 130 cases were related to APA.
Compared to 10 years ago, the number of MAP cases increased to approximately four times, and thenumber of Bilateral Advance Pricing Arrangements (BAPA: APA accompanied by MAP) cases
increased to approximately ten times.

’99

Administrationof the Liquor Industry

2 Mutual Agreement Procedure ( MAP)

’98

※ The number of MAP cases represents where taxpayers claimed MAP, or where the foreign tax authorities proposed MAP negotiation.
The number of MAPs regarding change for agreed BAPA etc. is counted in the operation year in which re-negotiation was made.

Remedy for Infringementof Taxpayer Rights

There are cases in which it is difficult for the NTA to clarify the global transactions by individuals
and corporations only with the information obtained in Japan. In such a case, the exchange of
information under a bilateral tax treaty and tax information exchange agreement makes it possible toacquire the necessary information. The NTA is recently exchanging information on more than 200,000
cases a year.
Japan is working to develop mechanisms for information exchange, incorporating informationexchange provisions in its tax treaties in accordance with international standards*1, and changing its
existing provisions to bring them in line with international standards. The NTA is working to fully utilize
these and actively exchange information.

0

Tax Administration Under
Increasing Globalization

50（4）Exchange of information under tax treaty and tax informationexchange agreement

Promotion of Tax Filingand Payment by
Proper Self-Assessment

80

The number of countries with which the NTA was involved in MAP negotiations is increasing along with
the increase in the number of MAP cases. While 15 countries were involved 10 years ago, it increased to
22 as of the end of June 2009.
In an attempt to properly and promptly resolve MAP cases, the NTA is strengthening its structure byincreasing the number of officials and putting an emphasis on APA, while deepening working relations withforeign tax authorities for more efficient negotiations.

About the NTA● Trend in the number of cases requesting an APA, and number of cases closed

THAILAND40

Ⅳ Tax Administration Under Increasing Globalization

Requested cases
Closed cases(cases)
120

111

100

60
40

0

● Trend in the number of MAP cases

Number of MAPs
Number of BAPAs
Officials in charge of MAP(cases, persons)
200
29

28

19

’98

150

’99

’00

’01

’02

’03

’04

’05

’06

’07

※ The number of cases requesting an APA does not include the number of cases for which changes were made after therequest. Meanwhile, the number of APA cases (refer to page 40) out of the cases subject to Mutual Agreement Procedure(MAP) includes cases of changes acknowledged after being requested (because MAP is made again with regard tochanges). Therefore, the figures do not match.

’08(operation year)

Improvement of Taxpayer
Convenience andAdministrative Efficiency

20

70

65

100

’01

’02

’03

’04

’05

’06

’07

’08
(operation year)● Tax treaty network of Japan (47 treaties applied in 58 countries as of April 2010)

East Europe/Former Soviet
Union (18 countries)

European Region (15 countries)
IRELAND

DENMARKU.K.

GERMANY

Italy

NorwayAustria

Finland

NETHERLANDSFRANCE

SWITZERLANDBELGIUM

SWEDEN

Luxembourg

SPAIN

Middle East (3 countries)
Israel

INDIA

Bangladesh

Pakistan

Sri Lanka

African Region (2 counties)
South Africa

Pacific Region (3 countries)
NEW ZEALAND

Turkmenistan *1

Ukraine *1

Hungary

Uzbekistan*1

Bulgaria

Kazakhstan

Belarus*1

Kyrgyz*1

PolandGeorgia*1

Moldova*1

Slovakia*2

Romania

Tajikistan*1

Russia*1

USA

South Asia (4 countries)

AUSTRALIA

Czech Republic*2

Armenia*1

North America (2 countries)

TurkeyEgyptZambiaAzerbaijan*1

Fiji*

4

CANADA

Latin America (2 countries)
BrazilMexicoCapitalized are the names of countries (22) conducting MAP
with the NTA as of the end of June 2009.
Underlined are the names of countries (18) conducting BAPA.

East/Southeast Asia (9 countries)*1

The treaty with the former Soviet Union is taken over.
*2 The treaty with former Czechoslovakia is taken over.
*3 The treaty does not apply to Hong Kong and Macao.
*4 Fiji takes over the former treaty with the U.K.

INDONESIACHINA*3

Vietnam

PHILIPPINESSOUTH KOREA

BruneiSINGAPORE

MALAYSIA

Statistics

39*1 Main items of international standards on information exchange: information held by financial institutions is also subject to information exchange, andinformation exchange is done even if there are no taxable earnings in one’s own country.
*2 “Mutual Agreement Procedure (MAP)” means the negotiation procedure between the tax authorities of countries party to a tax treaty, to relieve taxpayers
from taxation that is not in accordance with the provisions of the treaty, where the actions of one or both of the countries result in or will result in taxation thatis not in accordance with the provisions of the tax treaty.

’00

Future Challenges

As globalization progresses with individuals and corporations advancing into foreign markets,
double taxation may arise, where both Japan and a foreign country impose income tax. The transfer
pricing taxation described above may also cause double taxation. The NTA is addressing the global
issue of double taxation by making use of MAP*2 with foreign tax authorities based on tax treaties.
The number of MAP cases has increased in recent years, with more than 90% of MAP cases
related to transfer pricing. Among MAP cases, to assure predictability about transfer pricing, thenumber of MAP cases related to APA is increasing. During operation year 2008, the NTA received 174
cases of MAP, of which 160 cases were related to transfer pricing and 130 cases were related to APA.
Compared to 10 years ago, the number of MAP cases increased to approximately four times, and thenumber of Bilateral Advance Pricing Arrangements (BAPA: APA accompanied by MAP) cases
increased to approximately ten times.

’99

Administrationof the Liquor Industry

2 Mutual Agreement Procedure ( MAP)

’98

※ The number of MAP cases represents where taxpayers claimed MAP, or where the foreign tax authorities proposed MAP negotiation.
The number of MAPs regarding change for agreed BAPA etc. is counted in the operation year in which re-negotiation was made.

Remedy for Infringementof Taxpayer Rights

There are cases in which it is difficult for the NTA to clarify the global transactions by individuals
and corporations only with the information obtained in Japan. In such a case, the exchange of
information under a bilateral tax treaty and tax information exchange agreement makes it possible toacquire the necessary information. The NTA is recently exchanging information on more than 200,000
cases a year.
Japan is working to develop mechanisms for information exchange, incorporating informationexchange provisions in its tax treaties in accordance with international standards*1, and changing its
existing provisions to bring them in line with international standards. The NTA is working to fully utilize
these and actively exchange information.

0

Tax Administration Under
Increasing Globalization

50（4）Exchange of information under tax treaty and tax informationexchange agreement

Promotion of Tax Filingand Payment by
Proper Self-Assessment

80

The number of countries with which the NTA was involved in MAP negotiations is increasing along with
the increase in the number of MAP cases. While 15 countries were involved 10 years ago, it increased to
22 as of the end of June 2009.
In an attempt to properly and promptly resolve MAP cases, the NTA is strengthening its structure byincreasing the number of officials and putting an emphasis on APA, while deepening working relations withforeign tax authorities for more efficient negotiations.

About the NTA● Trend in the number of cases requesting an APA, and number of cases closed

THAILAND40

Ⅳ Tax Administration Under Increasing Globalization

Fiscal year

（1）Cooperation for developing countries

International Seminar on Taxation Countries(ISTAX) general course
PeopleInternational Seminar on Taxation Countries(ISTAX) senior course
PeopleCountry-Focused Training Countries
Courses in Tax Administration People
Counterpart Training

International Seminar on Taxation

Overview of technical assistance

2 Training in Japan（2）Participation by tax authorities in international conferences
As globalization and computerization of the economy brings an increase in new forms oftransactions, there is the double taxation problem of more than one country imposing taxes on one
income, and the taxation loophole problem of tax avoidance in which tax is not imposed in any country.
These are becoming problems which should be addressed by each country’s tax authorities. In order tosolve such problems and to cooperate and share experience among each country’s tax authorities, the
NTA actively participates in various international conferences. The main conferences are described
below: ① OECD Committee on Fiscal Affairs (CFA), ② Leeds Castle Group (Tax Administrators
Meeting, LCG), and ③ Study Group on Asian Tax Administration and Research (SGATAR).
①OECD Committee on Fiscal Affairs (CFA)The OECD Committee on Fiscal Affairs is a forum where OECD member countries review the
Model Tax Convention and Transfer Pricing Guidelines, and the tax authorities aim to share theirknowledge and experience. Under the OECD Committee on Fiscal Affairs, study groups are formed
to discuss individual themes and exchange views. The NTA has been actively participating in suchactivities of CFA. For further details, please refer to the NTA website “OECD Committee on Fiscal
Affairs (CFA)”. (Japanese only)
http://www.nta.go.jp/sonota/kokusai/oecd/oecd.htm②The Leeds Castle Group (Tax Administrators Meeting, LCG)
The LCG is comprised of the tax authorities of 10 major nations: namely Japan, the USA,
Canada, Australia, the U.K., France, Germany, China, South Korea, and India. LCG discusses
urgent issues faced by each country, such as international tax avoidance.
③Study Group on Asian Tax Administration and Research (SGATAR)
SGATAR is comprised of the tax authorities of 16 countries and regions. SGATAR provides aforum for promoting cooperation, and sharing the knowledge and experience in Asia.

Future Challenges
Statistics

41

2009
19
20
11
11
6
64
2
36
6
11
9
21

Administrationof the Liquor Industry(1) International Seminar on Taxation (ISTAX)ISTAX is a seminar for tax oﬃcials in developing countries on the tax system andtax administration of Japan. It has two courses: the general course for mid-careeroﬃcials and the senior course for management-level oﬃcials. Counting both courses, a
total of 31 tax oﬃcials participated in ﬁscal 2009.
(2) Country-Focused Training Courses in Tax Administration, and Counterpart Training
The courses are given to tax oﬃcials in the speciﬁed developing countries at theirrequest. One hundred tax oﬃcials from Indonesia, Cambodia, Thailand, Uzbekistan,
Vietnam and so on participated in the course in ﬁscal 2009.
(3) International Taxation for Asian Countries
Training is directed at tax oﬃcials in Asian countries on the subject of international
taxation. Eleven persons from six countries (China, Indonesia, Malaysia, Philippines,
Thailand, and Vietnam) participated in ﬁscal 2009.
(4) NTA Practical Training Course (Practicum)
Training on the Japanese tax system and tax administration in general is provided
for tax oﬃcials from developing countries who are studying in master courses at thegraduate schools of Japanese universities on a scholarship program from the World
Bank. A total of 21 foreign students studying at graduate schools of Keio University,
Yokohama National University, National Graduate Institute of Policy Studies,
Hitotsubashi University, and Waseda University participated in ﬁscal 2009.

12
18

2008
18
20
10
10
4
60
4
48
6
12
10
17

Remedy for Infringementof Taxpayer Rights

Considering the needs of tax authorities in developing countries, tax oﬃcials aredispatched as instructors to give lectures on taxpayer services, international taxation, staﬀ
training, and other tax subjects. In ﬁscal 2009, instructors were dispatched to lecture on
the tax administration of Japan to Cambodia, Malaysia, Philippines, Vietnam and othercountries.
With a view to giving continued advice on tax administration to developing countries,
the NTA is dispatching tax oﬃcials in the capacity of long-term experts from JICA. In ﬁscal
2009, our tax oﬃcials remain in Indonesia, Malaysia, and Vietnam.

13
17

Newly launched
in FY2007

2007
18
19
10
10
3
32
3
63
6
11
13
18

Tax Administration Under
Increasing Globalization

1 Dispatch of tax officials to developing countries

Newly launched
in FY2007

2006
17
20
11
11
3
30
4
74

Improvement of Taxpayer
Convenience andAdministrative Efficiency

International Taxation
for Asian Countries
NTA Practical Training
Course (Practicum)Countries
PeopleCountries
PeopleCountries
People

2005
22
22
11
11
3
23
4
52

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Under the framework of technical assistance by the Japan
International Cooperation Agency (JICA), the NTA is actively
involved in technical assistance to developing countries,
primarily for Asian countries in consideration of their economic
ties with Japan.
Technical cooperation aims at improving tax administrationin developing countries and the development of persons who
understand Japanese tax administration. The program consistsof two components: ① lectures in developing countries by
dispatching NTA officials as instructors, and ② training inJapan by inviting tax officials from developing countries.

● Status of training conducted in Japan

About the NTA

3 Cooperation and coordination with foreign tax authorities

42

Ⅳ Tax Administration Under Increasing Globalization

Fiscal year

（1）Cooperation for developing countries

International Seminar on Taxation Countries(ISTAX) general course
PeopleInternational Seminar on Taxation Countries(ISTAX) senior course
PeopleCountry-Focused Training Countries
Courses in Tax Administration People
Counterpart Training

International Seminar on Taxation

Overview of technical assistance

2 Training in Japan（2）Participation by tax authorities in international conferences
As globalization and computerization of the economy brings an increase in new forms oftransactions, there is the double taxation problem of more than one country imposing taxes on one
income, and the taxation loophole problem of tax avoidance in which tax is not imposed in any country.
These are becoming problems which should be addressed by each country’s tax authorities. In order tosolve such problems and to cooperate and share experience among each country’s tax authorities, the
NTA actively participates in various international conferences. The main conferences are described
below: ① OECD Committee on Fiscal Affairs (CFA), ② Leeds Castle Group (Tax Administrators
Meeting, LCG), and ③ Study Group on Asian Tax Administration and Research (SGATAR).
①OECD Committee on Fiscal Affairs (CFA)The OECD Committee on Fiscal Affairs is a forum where OECD member countries review the
Model Tax Convention and Transfer Pricing Guidelines, and the tax authorities aim to share theirknowledge and experience. Under the OECD Committee on Fiscal Affairs, study groups are formed
to discuss individual themes and exchange views. The NTA has been actively participating in suchactivities of CFA. For further details, please refer to the NTA website “OECD Committee on Fiscal
Affairs (CFA)”. (Japanese only)
http://www.nta.go.jp/sonota/kokusai/oecd/oecd.htm②The Leeds Castle Group (Tax Administrators Meeting, LCG)
The LCG is comprised of the tax authorities of 10 major nations: namely Japan, the USA,
Canada, Australia, the U.K., France, Germany, China, South Korea, and India. LCG discusses
urgent issues faced by each country, such as international tax avoidance.
③Study Group on Asian Tax Administration and Research (SGATAR)
SGATAR is comprised of the tax authorities of 16 countries and regions. SGATAR provides aforum for promoting cooperation, and sharing the knowledge and experience in Asia.

Future Challenges
Statistics

41

2009
19
20
11
11
6
64
2
36
6
11
9
21

Administrationof the Liquor Industry(1) International Seminar on Taxation (ISTAX)ISTAX is a seminar for tax oﬃcials in developing countries on the tax system andtax administration of Japan. It has two courses: the general course for mid-careeroﬃcials and the senior course for management-level oﬃcials. Counting both courses, a
total of 31 tax oﬃcials participated in ﬁscal 2009.
(2) Country-Focused Training Courses in Tax Administration, and Counterpart Training
The courses are given to tax oﬃcials in the speciﬁed developing countries at theirrequest. One hundred tax oﬃcials from Indonesia, Cambodia, Thailand, Uzbekistan,
Vietnam and so on participated in the course in ﬁscal 2009.
(3) International Taxation for Asian Countries
Training is directed at tax oﬃcials in Asian countries on the subject of international
taxation. Eleven persons from six countries (China, Indonesia, Malaysia, Philippines,
Thailand, and Vietnam) participated in ﬁscal 2009.
(4) NTA Practical Training Course (Practicum)
Training on the Japanese tax system and tax administration in general is provided
for tax oﬃcials from developing countries who are studying in master courses at thegraduate schools of Japanese universities on a scholarship program from the World
Bank. A total of 21 foreign students studying at graduate schools of Keio University,
Yokohama National University, National Graduate Institute of Policy Studies,
Hitotsubashi University, and Waseda University participated in ﬁscal 2009.

12
18

2008
18
20
10
10
4
60
4
48
6
12
10
17

Remedy for Infringementof Taxpayer Rights

Considering the needs of tax authorities in developing countries, tax oﬃcials aredispatched as instructors to give lectures on taxpayer services, international taxation, staﬀ
training, and other tax subjects. In ﬁscal 2009, instructors were dispatched to lecture on
the tax administration of Japan to Cambodia, Malaysia, Philippines, Vietnam and othercountries.
With a view to giving continued advice on tax administration to developing countries,
the NTA is dispatching tax oﬃcials in the capacity of long-term experts from JICA. In ﬁscal
2009, our tax oﬃcials remain in Indonesia, Malaysia, and Vietnam.

13
17

Newly launched
in FY2007

2007
18
19
10
10
3
32
3
63
6
11
13
18

Tax Administration Under
Increasing Globalization

1 Dispatch of tax officials to developing countries

Newly launched
in FY2007

2006
17
20
11
11
3
30
4
74

Improvement of Taxpayer
Convenience andAdministrative Efficiency

International Taxation
for Asian Countries
NTA Practical Training
Course (Practicum)Countries
PeopleCountries
PeopleCountries
People

2005
22
22
11
11
3
23
4
52

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Under the framework of technical assistance by the Japan
International Cooperation Agency (JICA), the NTA is actively
involved in technical assistance to developing countries,
primarily for Asian countries in consideration of their economic
ties with Japan.
Technical cooperation aims at improving tax administrationin developing countries and the development of persons who
understand Japanese tax administration. The program consistsof two components: ① lectures in developing countries by
dispatching NTA officials as instructors, and ② training inJapan by inviting tax officials from developing countries.

● Status of training conducted in Japan

About the NTA

3 Cooperation and coordination with foreign tax authorities42

for Infringement of Taxpayer
Ⅴ Remedy
RightsRequest forreinvestigation to
Regional
Commissioner

Decision on request
for reinvestigation

Within 1 month

Within 1 month

Within2 months

Within2 months

Request for Reconsideration to the Director General of National Tax Tribunal

Future Challenges

If no decision on a request
for reconsideration ismade within 3 months

Administrationof the Liquor Industry

Decision on request
for reinvestigation

Remedy for Infringementof Taxpayer Rights

If no decision on arequest for reinvestigation
is made within 3 months

Tax Administration Under
Increasing Globalization

Within2 months

Request for reinvestigation to District Director ofTax Office (to Regional
Commissioner if basedon tax examination by
officials of the Regional
Taxation Bureau)

Within 2 months

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Decision on request
for reconsideration
Within 6 months

Statistics

43

Within 2 months

If dissatisfied withdecision made by
Regional Commissioner

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Taxpayers who remain dissatisfied with the determination made in relation to the above request fora reinvestigation, are entitled to file a request for reconsideration with the Director-General of the
National Tax Tribunal.
The National Tax Tribunal, which aims to remedy the legitimate rights and interests of taxpayers,
makes its decisions on request for reconsideration as a fair third party between the District Director of
the Tax Office and the taxpayer as claimant. The cases are examined and reviewed by appeals judges
and associate appeals judges of the National Tax Tribunal, who have specialized knowledge andexperience.
The important posts of Director-General for the National Tax Tribunal, as well as for the Tokyo andOsaka Regional National Tax Tribunal, are appointed from among those who have been justices or
public prosecutors. Appeals judges for the National Tax Tribunal are also appointed from among those
who have been specialists such as CPTAs and lawyers in the private sector.
The National Tax Tribunal contacts the claimant and the Tax Office early on to have a good graspof both points of view. It drafts a chart outlining the positions of each party at an early point in time after
sorting out their arguments. The Tribunal strives to properly and quickly remedy a violation of thelegitimate rights and interests of taxpayers, by seriously listening to the views and positions of eachparty and conducting its own tax examinations when necessary.
Decisions by the Director-General of the National Tax Tribunal will not be more disadvantageous totaxpayers than those made by the District Director of the Tax Office. The decision is a final ruling given
within the NTA, against which the District Director of the Tax Office is not entitled to file litigation, even
if dissatisfied.

If dissatisfied with thedecision by the District
Director of the Tax OfficeDirect request for reconsideration at choice（2）Request for reconsideration

Overview of the appellate system for national tax

Direct request for reconsideration at choice(correction to blue returns, etc.)

A request for reinvestigation is the first stage in the administrative appeal filed with regard tonational taxes. In case the District Director of the Tax Office took action for a correction, determination,or seizures with which taxpayers remain dissatisfied, this is a procedure to request to the District
Director of the Tax Office that the ruling be revoked or changed.
In recent years, cases requesting a reinvestigation are increasingly complicated, due to greater
geographic scope and globalization of economic transactions. They involve difficulties in proving therelevance of facts and the interpretation and application of law in increasing numbers of cases. In
response, the NTA has established Rulings and Legal Affairs Divisions and assigned Special Officers(Legal Affairs) in each Regional Taxation Bureau. The NTA is addressing the uniform enforcement oftax laws across the country based on correct interpretations. The NTA is also providing various training
to develop tax officials who are skilled in reviewing, and endeavoring to properly and promptly handle
taxpayer requests for reinvestigations.

Even after the decision by the Director-General of the National Tax Tribunal, taxpayers who remain
dissatisfied are entitled to file litigation with the judiciary seeking a legal remedy.

If dissatisfied with decision made by the Registrar or Ministerof Land, Infrastructure and Transport, etc. regarding registrationand license tax and/or motor vehicle tonnage tax（1）Request for reinvestigation（3）Litigation

About the NTA

When the District Director of Tax Office does a disposition for taxation or disposition for delinquent tax,
if the taxpayer objects to that disposition, the taxpayer can file a request for review, for example to cancelthat disposition. This system of request for review is a procedure to simply and quickly protect taxpayer
rights and interests. In principle, a taxpayer which objects to a disposition shall first file a request for review
before bringing a lawsuit in court.
A request for review can be a request for reinvestigation to the District Director of the Tax Office, or arequest for reconsideration to the Director-General of the National Tax Tribunal, but in principle, a request
for reconsideration cannot be done until after a request for reinvestigation was done.
Moreover, when there is an objection to the ruling on the request for reconsideration, the taxpayer canbring lawsuit in court and seek relief via the judiciary.

Litigation for invalidating the original decision (district court)
44

for Infringement of Taxpayer
Ⅴ Remedy
RightsRequest forreinvestigation to
Regional
Commissioner

Decision on request
for reinvestigation

Within 1 month

Within 1 month

Within2 months

Within2 months

Request for Reconsideration to the Director General of National Tax Tribunal

Future Challenges

If no decision on a request
for reconsideration ismade within 3 months

Administrationof the Liquor Industry

Decision on request
for reinvestigation

Remedy for Infringementof Taxpayer Rights

If no decision on arequest for reinvestigation
is made within 3 months

Tax Administration Under
Increasing Globalization

Within2 months

Request for reinvestigation to District Director ofTax Office (to Regional
Commissioner if basedon tax examination by
officials of the Regional
Taxation Bureau)

Within 2 months

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Decision on request
for reconsideration
Within 6 months

Statistics

43

Within 2 months

If dissatisfied withdecision made by
Regional Commissioner

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Taxpayers who remain dissatisfied with the determination made in relation to the above request fora reinvestigation, are entitled to file a request for reconsideration with the Director-General of the
National Tax Tribunal.
The National Tax Tribunal, which aims to remedy the legitimate rights and interests of taxpayers,
makes its decisions on request for reconsideration as a fair third party between the District Director of
the Tax Office and the taxpayer as claimant. The cases are examined and reviewed by appeals judges
and associate appeals judges of the National Tax Tribunal, who have specialized knowledge andexperience.
The important posts of Director-General for the National Tax Tribunal, as well as for the Tokyo andOsaka Regional National Tax Tribunal, are appointed from among those who have been justices or
public prosecutors. Appeals judges for the National Tax Tribunal are also appointed from among those
who have been specialists such as CPTAs and lawyers in the private sector.
The National Tax Tribunal contacts the claimant and the Tax Office early on to have a good graspof both points of view. It drafts a chart outlining the positions of each party at an early point in time after
sorting out their arguments. The Tribunal strives to properly and quickly remedy a violation of thelegitimate rights and interests of taxpayers, by seriously listening to the views and positions of eachparty and conducting its own tax examinations when necessary.
Decisions by the Director-General of the National Tax Tribunal will not be more disadvantageous totaxpayers than those made by the District Director of the Tax Office. The decision is a final ruling given
within the NTA, against which the District Director of the Tax Office is not entitled to file litigation, even
if dissatisfied.

If dissatisfied with thedecision by the District
Director of the Tax OfficeDirect request for reconsideration at choice（2）Request for reconsideration

Overview of the appellate system for national tax

Direct request for reconsideration at choice(correction to blue returns, etc.)

A request for reinvestigation is the first stage in the administrative appeal filed with regard tonational taxes. In case the District Director of the Tax Office took action for a correction, determination,or seizures with which taxpayers remain dissatisfied, this is a procedure to request to the District
Director of the Tax Office that the ruling be revoked or changed.
In recent years, cases requesting a reinvestigation are increasingly complicated, due to greater
geographic scope and globalization of economic transactions. They involve difficulties in proving therelevance of facts and the interpretation and application of law in increasing numbers of cases. In
response, the NTA has established Rulings and Legal Affairs Divisions and assigned Special Officers(Legal Affairs) in each Regional Taxation Bureau. The NTA is addressing the uniform enforcement oftax laws across the country based on correct interpretations. The NTA is also providing various training
to develop tax officials who are skilled in reviewing, and endeavoring to properly and promptly handle
taxpayer requests for reinvestigations.

Even after the decision by the Director-General of the National Tax Tribunal, taxpayers who remain
dissatisfied are entitled to file litigation with the judiciary seeking a legal remedy.

If dissatisfied with decision made by the Registrar or Ministerof Land, Infrastructure and Transport, etc. regarding registrationand license tax and/or motor vehicle tonnage tax（1）Request for reinvestigation（3）Litigation

About the NTA

When the District Director of Tax Office does a disposition for taxation or disposition for delinquent tax,
if the taxpayer objects to that disposition, the taxpayer can file a request for review, for example to cancelthat disposition. This system of request for review is a procedure to simply and quickly protect taxpayer
rights and interests. In principle, a taxpayer which objects to a disposition shall first file a request for review
before bringing a lawsuit in court.
A request for review can be a request for reinvestigation to the District Director of the Tax Office, or arequest for reconsideration to the Director-General of the National Tax Tribunal, but in principle, a request
for reconsideration cannot be done until after a request for reinvestigation was done.
Moreover, when there is an objection to the ruling on the request for reconsideration, the taxpayer canbring lawsuit in court and seek relief via the judiciary.

Litigation for invalidating the original decision (district court)
44

Ⅵ Administration of the Liquor Industry

Ⅴ Remedy for Infringemen t of Taxpayer Rights

reinvestigation within three months andnumber of processed requests for reinvestigation

89.7

91.1

86.7

93.3

82.2

80

4,000

0

484

4,027

4,124

4,065

3,414

2004

2005

732

700

4,997
916

613

2006

4,224

2007

4,613

2008

※ These figures are provisional numbers as of the end of April 2010.

92.2

80

4,000

3,000

40

2,000

20

1,000

0

0

2009
(fiscal year)

92.6

3,382
236

3,167
247

2,945
384

2,814
2,404

297

374

3,146

2004

2,920

2005

2,561

2006

2,030

2007

2,593
282

60

40

2,517

2008

※ These figures are provisional numbers as of the end of April 2010.

2,311

20

0
2009
(fiscal year)

Response to complaints from taxpayers

45

NRIB was originally established in 1904 as the National Research Organization ofTechnology for Liquor within the Ministry of Finance. In April 2001, it shifted from the NTAʼs
Research Institute of Brewing to an independent administrative agency. NRIB performs
advanced analyses and appraisals of liquors, and provides research, studies and information
on liquors and the liquor industry. It thereby aims to contribute to proper and fair applicationof the liquor tax, working for the sound development of the liquor industry, and to raise
peopleʼs understanding of liquor. For further details, please visit the NRIB website:
http://www.nrib.go.jp/English/index.htm

Statistics

The NTA receives from taxpayers such reactions as complaints, requests, criticism, or
consultation on problems they have, not only with regard to requests for review of decisions
by the NTA, but also about tax administration in general including the attitude of oﬃcials toattend to the inquirers or the methods of tax examinations. The NTA believes it essential tosincerely accept a variety of opinions from taxpayers in order to obtain their understanding
and conﬁdence and to give a prompt, accurate response from the perspective of taxpayers. In
July 2001, the NTA appointed Taxpayer Support Oﬃcers to properly respond to taxpayer
complaints on decisions made in relation to taxpayersʼ rights and interests, and to explain theprocedures to remedy infringements of taxpayer rights.

National Research Institute of Brewing (NRIB)

Future Challenges

Reference

4,081

60

89.0

Consumers continue to be increasingly interested in “food security and safety”. The NTA works toensure safety and enhance quality by taking the following actions, so that consumers are provided withsafe and good quality liquor in all stages from production to consumption.
a. The NTA purchases commercial liquor from retail stores which is the stage where consumers buy
liquor, and checks safety, quality and labeling of the alcohol percentage, container volume, etc.
Those results are posted as information on the NTA website.
b. To enable consumers to feel secure in buying liquor, the NTA checks obligatory liquor labelingitems and items written based on labeling standards. If not properly labeled, corrective guidance isgiven to the liquor business operator.
In addition, the NTA provides the liquor industry with guidance on improvements in brewing
technology, and guidance on manufacturing processes regarding safety of liquor, including
dissemination of the achievements of the National Research Institute of Brewing.

Administrationof the Liquor Industry

2,000

4,956

4,549

5,313

84.5

85.6

（1）Initiatives to ensure safety of liquor and enhance quality levels

Remedy for Infringementof Taxpayer Rights

6,000

Number of cases (tax collection-related)
Number of cases (taxation-related)
Percentage of processed cases（％）
100(cases)
5,000

84.0

8,000

4,516
392

reconsideration within one year, and numberof processed requests for reconsideration

Tax Administration Under
Increasing Globalization(cases)
10,000

Number of cases (tax collection-related)
Number of cases (taxation-related)
Percentage of processed cases
（％）
100
95.6

● Percentage of processed requests for

Improvement of Taxpayer
Convenience andAdministrative Efficiency● Percentage of processed requests for

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The NTA is striving to finish processing requests for reinvestigations within three months in principle.
The total number of reinvestigations requested was 4,997 (4,081 in taxation and 916 in tax collections) in
fiscal 2009. Of these, about 11.8% of taxpayer claims were approved in whole or in part due to new facts.
With respect to the request for reconsideration, the NTA is working to finish processing within one
year in principle. The total number of requests for reconsideration was 2,593 (2,311 in taxation and 282 intax collection) in fiscal 2009. Of these, about 14.8% of taxpayer claims were approved in whole or in part.
For litigation, a total 320 cases were closed (250 in taxation, 61 in tax collections and 9 in the National
Tax Tribunal) in fiscal 2009. Of these, about 5.0% of taxpayer claims were approved in whole or in part.
The NTA and the National Tax Tribunal are disclosing overviews of the requests for review andlitigation, and information on court decisions, to obtain understanding about remedies for infringement of
taxpayer rights. These are on the NTA website and on the National Tax Tribunal website(http://www.kfs.go.jp).

Both the land tax and the liquor tax have been large revenue sources since the Meiji government wasestablished. Liquor tax revenues even exceeded land tax revenues at one time, becoming the largest
revenue source. Thereafter, there was an increase in the relative weight of direct taxes such as income tax
and corporation tax, and in FY2008, liquor tax comprised only 3.2% (¥1,461.4 billion) of all tax revenues.
However, it is not affected much by the economy, and is expected to provide stable tax revenues.
Therefore, the liquor tax fulfills an important role even today.
In contrast to general food items, a high rate of liquor tax is imposed on liquor. In order to secure thisrevenue source and smoothly shift the tax burden onto consumers, there is a system of licensing for
manufacture of liquor and sale of liquor. In line with the goals of this system, the NTA strives for proper
operation and proper and fair taxation.
In addition, NTA is the government agency with jurisdiction over the liquor industry. The NTA takes
various actions in order to secure liquor tax revenues and work for sound development of the liquor industry,from a comprehensive perspective of development of the entire liquor industry, while considering changes
in the environment faced by the liquor industry, such as the arrival of a decreasing population, the people’s
increasing awareness of health and safety, and diversifying lifestyles.

About the NTA（4）Case trends

46

Ⅵ Administration of the Liquor Industry

Ⅴ Remedy for Infringemen t of Taxpayer Rights

reinvestigation within three months andnumber of processed requests for reinvestigation

89.7

91.1

86.7

93.3

82.2

80

4,000

0

484

4,027

4,124

4,065

3,414

2004

2005

732

700

4,997
916

613

2006

4,224

2007

4,613

2008

※ These figures are provisional numbers as of the end of April 2010.

92.2

80

4,000

3,000

40

2,000

20

1,000

0

0

2009
(fiscal year)

92.6

3,382
236

3,167
247

2,945
384

2,814
2,404

297

374

3,146

2004

2,920

2005

2,561

2006

2,030

2007

2,593
282

60

40

2,517

2008

※ These figures are provisional numbers as of the end of April 2010.

2,311

20

0
2009
(fiscal year)

Response to complaints from taxpayers

45

NRIB was originally established in 1904 as the National Research Organization ofTechnology for Liquor within the Ministry of Finance. In April 2001, it shifted from the NTAʼs
Research Institute of Brewing to an independent administrative agency. NRIB performs
advanced analyses and appraisals of liquors, and provides research, studies and information
on liquors and the liquor industry. It thereby aims to contribute to proper and fair applicationof the liquor tax, working for the sound development of the liquor industry, and to raise
peopleʼs understanding of liquor. For further details, please visit the NRIB website:
http://www.nrib.go.jp/English/index.htm

Statistics

The NTA receives from taxpayers such reactions as complaints, requests, criticism, or
consultation on problems they have, not only with regard to requests for review of decisions
by the NTA, but also about tax administration in general including the attitude of oﬃcials toattend to the inquirers or the methods of tax examinations. The NTA believes it essential tosincerely accept a variety of opinions from taxpayers in order to obtain their understanding
and conﬁdence and to give a prompt, accurate response from the perspective of taxpayers. In
July 2001, the NTA appointed Taxpayer Support Oﬃcers to properly respond to taxpayer
complaints on decisions made in relation to taxpayersʼ rights and interests, and to explain theprocedures to remedy infringements of taxpayer rights.

National Research Institute of Brewing (NRIB)

Future Challenges

Reference

4,081

60

89.0

Consumers continue to be increasingly interested in “food security and safety”. The NTA works toensure safety and enhance quality by taking the following actions, so that consumers are provided withsafe and good quality liquor in all stages from production to consumption.
a. The NTA purchases commercial liquor from retail stores which is the stage where consumers buy
liquor, and checks safety, quality and labeling of the alcohol percentage, container volume, etc.
Those results are posted as information on the NTA website.
b. To enable consumers to feel secure in buying liquor, the NTA checks obligatory liquor labelingitems and items written based on labeling standards. If not properly labeled, corrective guidance isgiven to the liquor business operator.
In addition, the NTA provides the liquor industry with guidance on improvements in brewing
technology, and guidance on manufacturing processes regarding safety of liquor, including
dissemination of the achievements of the National Research Institute of Brewing.

Administrationof the Liquor Industry

2,000

4,956

4,549

5,313

84.5

85.6

（1）Initiatives to ensure safety of liquor and enhance quality levels

Remedy for Infringementof Taxpayer Rights

6,000

Number of cases (tax collection-related)
Number of cases (taxation-related)
Percentage of processed cases（％）
100(cases)
5,000

84.0

8,000

4,516
392

reconsideration within one year, and numberof processed requests for reconsideration

Tax Administration Under
Increasing Globalization(cases)
10,000

Number of cases (tax collection-related)
Number of cases (taxation-related)
Percentage of processed cases
（％）
100
95.6

● Percentage of processed requests for

Improvement of Taxpayer
Convenience andAdministrative Efficiency● Percentage of processed requests for

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The NTA is striving to finish processing requests for reinvestigations within three months in principle.
The total number of reinvestigations requested was 4,997 (4,081 in taxation and 916 in tax collections) in
fiscal 2009. Of these, about 11.8% of taxpayer claims were approved in whole or in part due to new facts.
With respect to the request for reconsideration, the NTA is working to finish processing within one
year in principle. The total number of requests for reconsideration was 2,593 (2,311 in taxation and 282 intax collection) in fiscal 2009. Of these, about 14.8% of taxpayer claims were approved in whole or in part.
For litigation, a total 320 cases were closed (250 in taxation, 61 in tax collections and 9 in the National
Tax Tribunal) in fiscal 2009. Of these, about 5.0% of taxpayer claims were approved in whole or in part.
The NTA and the National Tax Tribunal are disclosing overviews of the requests for review andlitigation, and information on court decisions, to obtain understanding about remedies for infringement of
taxpayer rights. These are on the NTA website and on the National Tax Tribunal website(http://www.kfs.go.jp).

Both the land tax and the liquor tax have been large revenue sources since the Meiji government wasestablished. Liquor tax revenues even exceeded land tax revenues at one time, becoming the largest
revenue source. Thereafter, there was an increase in the relative weight of direct taxes such as income tax
and corporation tax, and in FY2008, liquor tax comprised only 3.2% (¥1,461.4 billion) of all tax revenues.
However, it is not affected much by the economy, and is expected to provide stable tax revenues.
Therefore, the liquor tax fulfills an important role even today.
In contrast to general food items, a high rate of liquor tax is imposed on liquor. In order to secure thisrevenue source and smoothly shift the tax burden onto consumers, there is a system of licensing for
manufacture of liquor and sale of liquor. In line with the goals of this system, the NTA strives for proper
operation and proper and fair taxation.
In addition, NTA is the government agency with jurisdiction over the liquor industry. The NTA takes
various actions in order to secure liquor tax revenues and work for sound development of the liquor industry,from a comprehensive perspective of development of the entire liquor industry, while considering changes
in the environment faced by the liquor industry, such as the arrival of a decreasing population, the people’s
increasing awareness of health and safety, and diversifying lifestyles.

About the NTA（4）Case trends

46

Ⅵ Administration of the Liquor Industry

To prevent underage drinking and troublesome behavior caused by alcohol, the NTA works withrelated ministries and the industry to develop proper sales control systems.
In order to ensure effective use of resources, the NTA also works to build awareness of systems, tosupport liquor business operator initiatives for liquor container recycling and reducing food waste
generated in liquor manufacturing processes, etc.

Guidelines on Fair Liquor Trade (Established on August 31, 2006)
Purposes

To ensure liquor tax revenue and stabilize liquor
trade (Article 1 of Act on Securing of Liquor Tax
and on Liquor Business Associations)①● Conducting surveys on actual trade practices

2005

500
2006

Issues for the sound development of the liquor industry③

Considering the applicability of Article 84 of the Act on Securing of Liquor Tax and on Liquor
Business Associations {Recommendation or orders to ensure the liquor tax}, the NTA makessuggestions on fair liquor trade practices and ways to cooperate with the Fair Trade Commission.

“Shift from quantity to quality”, “Consumers’ perspectives”, “Sales Management”, and “Assuranceof Fair Trade”

2007

1. Fair trade related to liquor

2. Conducting survey on actual trade

1 Setting of the rational price1 Conducting surveys on actual tradepractices effectively

2008

Discriminatory treatment in the selling priceand trade conditions according to the tradeclients or sales territories without rational
reasons is likely to become one of the factors in
distorting market prices.

3 Setting of fair trade conditions

It might erode supplier operations and affectthe collection of receivables by manufacturers,
which is likely to cause problems in securing theliquor tax, when large-scale operators, such as
supermarkets, unilaterally return products attheir discretion, refuse to accept products with a
private brand, demand to dispatch employees,
demand payment of contributions andexcessive center fees, or treat suppliers
unfavorably because of refusal to accept suchdemands.
Rebates that lack transparency
rationality should be eliminated.

47

and

① Judging the existence of excessivecompetition provided for in Paragraph 1 of
Article 84 of the Act on Securing of Liquor Tax
and on Liquor Business Associations, inreference to 1 “Fair trade related to liquor.”② Taking the minimum but essential actions tosolve the problem, if measures should be
implemented to maintain liquor tax revenues.

3 Response to violations of the
Antimonopoly Act

Regional Commissioners who find liquor
business operators violate the Antimonopoly
Act will inform the Fair Trade Commission ofsuch facts.

4 Collaboration with the Fair Trade Commission① The NTA consults with the Fair Trade
Commission on issues related to distributionof liquor.
② In Regional Taxation Bureaus, officials areappointed to be in charge of centralizing theadministration of liquor market information.

Statistics

4 Transparent and rational rebates

2 Measures to secure the liquor tax

Future Challenges

The NTA does industry trend surveys, provides training by management guidance experts etc., andprovides information on successful examples of business improvement and on various small and medium
business initiatives, thereby supporting voluntary initiatives of liquor business operators.
In addition, as the reputation of Japanese-made liquor products has been increasing in overseas
countries along with a growing interest in Japanese food, the NTA provides liquor business operators withinformation on exporting, in an effort to develop the export environment.

2 Fair treatment of business clients, etc.

① Conducting tax examinations focused on
liquor business operators who are largely
influential on the market.
② Conducting follow-up surveys on liquor
business operators for which guidance for
improvement was issued.
③ Disclosing the inappropriate trades and theircase examples for improvement results asmuch as possible, to prevent other operatorsfrom engaging in the same kind of trade.

Administrationof the Liquor Industry（4）Information provided to liquor business operators(operation year)

practices and collaborating with the
Fair Trade Commission (measures by the NTA)

Remedy for Infringementof Taxpayer Rights

2004

1,266

1,000

0

②

① The rational retail price should be “purchaseprice + SGA expense + profit.” In addition, theliquor prices should be rational from theviewpoint of liquor's unique characteristics.
② In light of its unique characteristics, it is an
inadequate practice to use liquor as a “lossleader” for attracting customers, and thissituation should be improved.
③ Production should be kept at a proper levelbased on a correct supply-demand outlook.

2,031
1,373

volume and price among traders

Tax Administration Under
Increasing Globalization

2,500

1,340

with further total volume growth of liquor consumption in the domestic market● Diversification in liquor retail (convenience stores, supermarkets, drugstores, etc.)…＞ Gaps in trade(suggestions on how liquor trade should befrom the standpoint of securing the liquor tax)

3,095

3,000

1,500

● Changes in the business environment (arrival of the decreasing population society, etc.)…＞Difficulty

Facilitating voluntary efforts to assure fair trade(number of locations surveyed)
3,500

2,000

Sound developmentof the liquor industry

Improvement of Taxpayer
Convenience andAdministrative Efficiency

In order to secure liquor tax revenues and stable trading in liquor, the NTA continues to build
awareness of its Guidelines on Fair Liquor Trade published in August 2006, so that voluntary initiatives ofliquor business operators for developing a fair trading environment are promoted. The NTA also surveys
actual trade practices, and if it finds trading which is not according to these guidelines, it provides
guidance for improvements, and where necessary, works with the Fair Trade Commission to develop afair trading environment for liquor.

Sound management and improvement
for consumers’ interests

Promotion of Tax Filingand Payment by
Proper Self-Assessment（3）Initiatives to develop a fair trading environment in liquors

Recent liquor market

Execution of tradecomplying with guidelines

About the NTA（2）Response to social demands

48

Ⅵ Administration of the Liquor Industry

To prevent underage drinking and troublesome behavior caused by alcohol, the NTA works withrelated ministries and the industry to develop proper sales control systems.
In order to ensure effective use of resources, the NTA also works to build awareness of systems, tosupport liquor business operator initiatives for liquor container recycling and reducing food waste
generated in liquor manufacturing processes, etc.

Guidelines on Fair Liquor Trade (Established on August 31, 2006)
Purposes

To ensure liquor tax revenue and stabilize liquor
trade (Article 1 of Act on Securing of Liquor Tax
and on Liquor Business Associations)①● Conducting surveys on actual trade practices

2005

500
2006

Issues for the sound development of the liquor industry③

Considering the applicability of Article 84 of the Act on Securing of Liquor Tax and on Liquor
Business Associations {Recommendation or orders to ensure the liquor tax}, the NTA makessuggestions on fair liquor trade practices and ways to cooperate with the Fair Trade Commission.

“Shift from quantity to quality”, “Consumers’ perspectives”, “Sales Management”, and “Assuranceof Fair Trade”

2007

1. Fair trade related to liquor

2. Conducting survey on actual trade

1 Setting of the rational price1 Conducting surveys on actual tradepractices effectively

2008

Discriminatory treatment in the selling priceand trade conditions according to the tradeclients or sales territories without rational
reasons is likely to become one of the factors in
distorting market prices.

3 Setting of fair trade conditions

It might erode supplier operations and affectthe collection of receivables by manufacturers,
which is likely to cause problems in securing theliquor tax, when large-scale operators, such as
supermarkets, unilaterally return products attheir discretion, refuse to accept products with a
private brand, demand to dispatch employees,
demand payment of contributions andexcessive center fees, or treat suppliers
unfavorably because of refusal to accept suchdemands.
Rebates that lack transparency
rationality should be eliminated.

47

and

① Judging the existence of excessivecompetition provided for in Paragraph 1 of
Article 84 of the Act on Securing of Liquor Tax
and on Liquor Business Associations, inreference to 1 “Fair trade related to liquor.”② Taking the minimum but essential actions tosolve the problem, if measures should be
implemented to maintain liquor tax revenues.

3 Response to violations of the
Antimonopoly Act

Regional Commissioners who find liquor
business operators violate the Antimonopoly
Act will inform the Fair Trade Commission ofsuch facts.

4 Collaboration with the Fair Trade Commission① The NTA consults with the Fair Trade
Commission on issues related to distributionof liquor.
② In Regional Taxation Bureaus, officials areappointed to be in charge of centralizing theadministration of liquor market information.

Statistics

4 Transparent and rational rebates

2 Measures to secure the liquor tax

Future Challenges

The NTA does industry trend surveys, provides training by management guidance experts etc., andprovides information on successful examples of business improvement and on various small and medium
business initiatives, thereby supporting voluntary initiatives of liquor business operators.
In addition, as the reputation of Japanese-made liquor products has been increasing in overseas
countries along with a growing interest in Japanese food, the NTA provides liquor business operators withinformation on exporting, in an effort to develop the export environment.

2 Fair treatment of business clients, etc.

① Conducting tax examinations focused on
liquor business operators who are largely
influential on the market.
② Conducting follow-up surveys on liquor
business operators for which guidance for
improvement was issued.
③ Disclosing the inappropriate trades and theircase examples for improvement results asmuch as possible, to prevent other operatorsfrom engaging in the same kind of trade.

Administrationof the Liquor Industry（4）Information provided to liquor business operators(operation year)

practices and collaborating with the
Fair Trade Commission (measures by the NTA)

Remedy for Infringementof Taxpayer Rights

2004

1,266

1,000

0

②

① The rational retail price should be “purchaseprice + SGA expense + profit.” In addition, theliquor prices should be rational from theviewpoint of liquor's unique characteristics.
② In light of its unique characteristics, it is an
inadequate practice to use liquor as a “lossleader” for attracting customers, and thissituation should be improved.
③ Production should be kept at a proper levelbased on a correct supply-demand outlook.

2,031
1,373

volume and price among traders

Tax Administration Under
Increasing Globalization

2,500

1,340

with further total volume growth of liquor consumption in the domestic market● Diversification in liquor retail (convenience stores, supermarkets, drugstores, etc.)…＞ Gaps in trade(suggestions on how liquor trade should befrom the standpoint of securing the liquor tax)

3,095

3,000

1,500

● Changes in the business environment (arrival of the decreasing population society, etc.)…＞Difficulty

Facilitating voluntary efforts to assure fair trade(number of locations surveyed)
3,500

2,000

Sound developmentof the liquor industry

Improvement of Taxpayer
Convenience andAdministrative Efficiency

In order to secure liquor tax revenues and stable trading in liquor, the NTA continues to build
awareness of its Guidelines on Fair Liquor Trade published in August 2006, so that voluntary initiatives ofliquor business operators for developing a fair trading environment are promoted. The NTA also surveys
actual trade practices, and if it finds trading which is not according to these guidelines, it provides
guidance for improvements, and where necessary, works with the Fair Trade Commission to develop afair trading environment for liquor.

Sound management and improvement
for consumers’ interests

Promotion of Tax Filingand Payment by
Proper Self-Assessment（3）Initiatives to develop a fair trading environment in liquors

Recent liquor market

Execution of tradecomplying with guidelines

About the NTA（2）Response to social demands

48

Ⅶ Future Challenges

49

6 Policy evaluation enhancement and correct public relations activities
In order to correctly cope with changes in the society and economy, by responding to theconfidence and expectations placed in it by taxpayers, the NTA believes it necessary to clarify theissues to be addressed in tax administration and tackle measures according to each issue.
In executing each measure, the NTA will strive to work out and implement effective plans, and it
will at regular intervals evaluate and validate what has been implemented so that the effectiveness ofmeasures can be demonstrated to the fullest.
Since 2001, the NTA has set the performance targets it should achieve, and evaluated anddisclosed the results achieved in relation to the targets. The NTA will redouble its efforts to carry out
effective public relations activities to enable taxpayers to understand the issues, policies, andmeasures of the NTA, and the results achieved and their evaluations.

Statistics

In order to cope with the increasing complexity of economic transactions as described above, theNTA will try to strengthen its structure of gathering information, and systematically address theprioritized issues for correct responses to changes in the socio-economic situation, when conducting
tax examinations and collecting taxes.
In that regard, the NTA will strike a balance with limited resources between humans and materials,
by effectively combining the methods of in-depth tax examinations and brief contacts.
For measures to address taxation and collection, the NTA fully recognizes them as compulsory
actions imposed on taxpayers’ rights and interests. The NTA is trying to determine the relevant facts
and apply the laws and regulations, after correctly interpreting the assertions made by taxpayers andobjectively scrutinizing information in the examination.

In order for the NTA to achieve its assigned missions, it will make a proper allocation of resources
while assuring the necessary organization, headcount, and budget under tight fiscal conditions. On theother hand, it will endeavor to streamline administrative tasks, and to reduce administrative expenses.
Meanwhile, to enable the organization to fulfill its potential with the limited number of officials, theNTA will assign the right employees to the right jobs according to their experience and abilities, andstrengthen the training and education programs to further improve their specialized knowledge
necessary for the NTA.
In addition, the NTA will push for the “Plan for Expanding Recruitment and Promotion of Female
Officials”, and properly implement the “NTA Designated Workplace Action Plan” (2nd SecureChildcare Support Plan), from the perspective of supporting a balance between childcare and work.

Future Challenges

2 Proper tax examinations and collection

5 Enhancement of the organizational base and work environment

Administrationof the Liquor Industry

The NTA will upgrade taxpayer services for the correct filing of tax returns and payments.
Specifically, the NTA will offer enhanced information to help taxpayers file tax returns andpayments and clarify the interpretation of law, as well as further enhance the convenient means offiling tax returns and payments using IT, such as e-Tax and filing assistance on the NTA website. At
the same time, the NTA will put effort into responding to advance inquires and conducting Advance
Pricing Arrangement (APA) related to transfer pricing (TP) system, so that taxpayers are able toforesee tax treatment for their economic activities.
For the withholding tax system, the NTA will try to help the system work properly through further
notification and public relations activities directed at withholding agents.
Given the importance of the roles played by CPTAs in filing returns and paying taxes, the NTA will
make efforts to cooperate and maintain close working relationships with the tax accountants’
associations for wider use of e-Tax and using the documents attached by CPTAs to tax returns.

Remedy for Infringementof Taxpayer Rights

1 Promotion of proper filing of returns and paying taxes, andadministration of the withholding tax system

In order to achieve a proper and fair tax administration, it is necessary to conduct sufficient tax
examinations and collection. Amid the increasing cases of filing tax returns, the NTA will conductconsistent reviews to simplify and streamline administrative tasks with limited human resources, byemploying electronic processing of tax administration based on e-Tax and outsourcing of clerical tasks
that may be processed by personnel other than NTA officials.
Particularly during the period when filing income tax returns is concentrated at one time, the NTA
will press forward with the use of personal computers and e-Tax, thereby improving convenience fortaxpayers and aiming at efficient processing of administrative affairs.
For the optimization of administrative tasks and systems, the NTA will draft practical plans to
optimize administrative tasks in order to save operating expenses and improve administrative
efficiency under tight fiscal conditions. While conducting evaluations and validating the performance ofvarious measures based on such plans, the NTA will steadily put such plans into operation.

Tax Administration Under
Increasing Globalization

Facing the above-described circumstances, the NTA is resolved to address the following issues inorder to achieve its assigned missions:

4 Promotion of administrative work efficiency

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Issues the NTA should address

As concern for safety of food remains high among consumers, the NTA will make efforts to assure
the safety and quality of liquor in cooperation with the National Research Institute of Brewing (NRIB),
in order to supply consumers with safe, high quality liquor.
To respond to social demands such as preventing underage drinking, the NTA is working toensure proper sales control of liquor, with proper compliance with the duty of assigning liquor sales
managers and signs in liquor display locations.
In addition, for the purpose of encouraging liquor business operators to push forward voluntary
activities to ensure a fair trade environment for liquor, the NTA will implement a survey on the statusliquor business transactions based on the Guidelines on Fair Liquor Trade. If irrational transactions
are recognized, the NTA will provide guidance for improvement, and works together with the Fair
Trade Commission when necessary.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The socio-economic structure of Japan is undergoing rapid changes, with its falling birth rate, aging
population, and increasing globalization in recent years. These changes in the socio-economic
structure are having a major impact on the environment surrounding the tax administration.
The aging population, growing job mobility, and reforms in corporate legislation are causing thenumber of tax returns filed to grow dramatically, which in turn increases the administrative tasks
processed at the NTA. In economic activities as well, there are dramatic developments in IT, and anincrease in diverse cross-border economic and investment activities by both corporations andindividuals. And such activities are making economic transactions more complicated and inducing theuse of skillful acts to avoid taxes, which makes the NTA’s responsibility to examine and collect tax
more difficult than ever before. Under these circumstances, the environment surrounding the tax
administration is becoming increasingly difficult in both qualitative and quantitative terms.
Meanwhile, under the tight financial situation, it is difficult to expect a substantial increase in thenumber of officials at the NTA. We have to proceed with tax administration by more effectively andefficiently allocating human and material resources than in the past. In addition, we believe it isnecessary to give consideration to operating the NTA to win the confidence of citizens, and putting inplace a work environment where officials are motivated.

3 Proper management of the liquor administration

About the NTA

Changes in the environment surrounding the tax administration

50

Ⅶ Future Challenges

49

6 Policy evaluation enhancement and correct public relations activities
In order to correctly cope with changes in the society and economy, by responding to theconfidence and expectations placed in it by taxpayers, the NTA believes it necessary to clarify theissues to be addressed in tax administration and tackle measures according to each issue.
In executing each measure, the NTA will strive to work out and implement effective plans, and it
will at regular intervals evaluate and validate what has been implemented so that the effectiveness ofmeasures can be demonstrated to the fullest.
Since 2001, the NTA has set the performance targets it should achieve, and evaluated anddisclosed the results achieved in relation to the targets. The NTA will redouble its efforts to carry out
effective public relations activities to enable taxpayers to understand the issues, policies, andmeasures of the NTA, and the results achieved and their evaluations.

Statistics

In order to cope with the increasing complexity of economic transactions as described above, theNTA will try to strengthen its structure of gathering information, and systematically address theprioritized issues for correct responses to changes in the socio-economic situation, when conducting
tax examinations and collecting taxes.
In that regard, the NTA will strike a balance with limited resources between humans and materials,
by effectively combining the methods of in-depth tax examinations and brief contacts.
For measures to address taxation and collection, the NTA fully recognizes them as compulsory
actions imposed on taxpayers’ rights and interests. The NTA is trying to determine the relevant facts
and apply the laws and regulations, after correctly interpreting the assertions made by taxpayers andobjectively scrutinizing information in the examination.

In order for the NTA to achieve its assigned missions, it will make a proper allocation of resources
while assuring the necessary organization, headcount, and budget under tight fiscal conditions. On theother hand, it will endeavor to streamline administrative tasks, and to reduce administrative expenses.
Meanwhile, to enable the organization to fulfill its potential with the limited number of officials, theNTA will assign the right employees to the right jobs according to their experience and abilities, andstrengthen the training and education programs to further improve their specialized knowledge
necessary for the NTA.
In addition, the NTA will push for the “Plan for Expanding Recruitment and Promotion of Female
Officials”, and properly implement the “NTA Designated Workplace Action Plan” (2nd SecureChildcare Support Plan), from the perspective of supporting a balance between childcare and work.

Future Challenges

2 Proper tax examinations and collection

5 Enhancement of the organizational base and work environment

Administrationof the Liquor Industry

The NTA will upgrade taxpayer services for the correct filing of tax returns and payments.
Specifically, the NTA will offer enhanced information to help taxpayers file tax returns andpayments and clarify the interpretation of law, as well as further enhance the convenient means offiling tax returns and payments using IT, such as e-Tax and filing assistance on the NTA website. At
the same time, the NTA will put effort into responding to advance inquires and conducting Advance
Pricing Arrangement (APA) related to transfer pricing (TP) system, so that taxpayers are able toforesee tax treatment for their economic activities.
For the withholding tax system, the NTA will try to help the system work properly through further
notification and public relations activities directed at withholding agents.
Given the importance of the roles played by CPTAs in filing returns and paying taxes, the NTA will
make efforts to cooperate and maintain close working relationships with the tax accountants’
associations for wider use of e-Tax and using the documents attached by CPTAs to tax returns.

Remedy for Infringementof Taxpayer Rights

1 Promotion of proper filing of returns and paying taxes, andadministration of the withholding tax system

In order to achieve a proper and fair tax administration, it is necessary to conduct sufficient tax
examinations and collection. Amid the increasing cases of filing tax returns, the NTA will conductconsistent reviews to simplify and streamline administrative tasks with limited human resources, byemploying electronic processing of tax administration based on e-Tax and outsourcing of clerical tasks
that may be processed by personnel other than NTA officials.
Particularly during the period when filing income tax returns is concentrated at one time, the NTA
will press forward with the use of personal computers and e-Tax, thereby improving convenience fortaxpayers and aiming at efficient processing of administrative affairs.
For the optimization of administrative tasks and systems, the NTA will draft practical plans to
optimize administrative tasks in order to save operating expenses and improve administrative
efficiency under tight fiscal conditions. While conducting evaluations and validating the performance ofvarious measures based on such plans, the NTA will steadily put such plans into operation.

Tax Administration Under
Increasing Globalization

Facing the above-described circumstances, the NTA is resolved to address the following issues inorder to achieve its assigned missions:

4 Promotion of administrative work efficiency

Improvement of Taxpayer
Convenience andAdministrative Efficiency

Issues the NTA should address

As concern for safety of food remains high among consumers, the NTA will make efforts to assure
the safety and quality of liquor in cooperation with the National Research Institute of Brewing (NRIB),
in order to supply consumers with safe, high quality liquor.
To respond to social demands such as preventing underage drinking, the NTA is working toensure proper sales control of liquor, with proper compliance with the duty of assigning liquor sales
managers and signs in liquor display locations.
In addition, for the purpose of encouraging liquor business operators to push forward voluntary
activities to ensure a fair trade environment for liquor, the NTA will implement a survey on the statusliquor business transactions based on the Guidelines on Fair Liquor Trade. If irrational transactions
are recognized, the NTA will provide guidance for improvement, and works together with the Fair
Trade Commission when necessary.

Promotion of Tax Filingand Payment by
Proper Self-Assessment

The socio-economic structure of Japan is undergoing rapid changes, with its falling birth rate, aging
population, and increasing globalization in recent years. These changes in the socio-economic
structure are having a major impact on the environment surrounding the tax administration.
The aging population, growing job mobility, and reforms in corporate legislation are causing thenumber of tax returns filed to grow dramatically, which in turn increases the administrative tasks
processed at the NTA. In economic activities as well, there are dramatic developments in IT, and anincrease in diverse cross-border economic and investment activities by both corporations andindividuals. And such activities are making economic transactions more complicated and inducing theuse of skillful acts to avoid taxes, which makes the NTA’s responsibility to examine and collect tax
more difficult than ever before. Under these circumstances, the environment surrounding the tax
administration is becoming increasingly difficult in both qualitative and quantitative terms.
Meanwhile, under the tight financial situation, it is difficult to expect a substantial increase in thenumber of officials at the NTA. We have to proceed with tax administration by more effectively andefficiently allocating human and material resources than in the past. In addition, we believe it isnecessary to give consideration to operating the NTA to win the confidence of citizens, and putting inplace a work environment where officials are motivated.

3 Proper management of the liquor administration

About the NTA

Changes in the environment surrounding the tax administration50

Ⅷ Statistics

Delinquency ……………53

Remedy for infringementof taxpayer rights…………54
Taxpayer satisfaction…55

12,161,180
2,823,894
10,010,600
1,454,907
9,968,893
1,461,367
850,859
1,889,385
12,976
83,578511,044

348,000

340,472

715,000
939,000
10,000−1,088,000
46,429,000

717,047
883,1099,427
142
1,088,425
44,267,304

Million yen

282,000
Local road tax
14,000
Liquefied petroleum gas tax (transferred)
Aviation fuel tax (transferred)
16,200Motor vehicle tonnage tax (transferred)
357,500
Special tonnage due
12,500Special local corporation tax
500
Gasoline tax
682,500
Special tobacco tax
206,500
Total
48,000,700

Million yen

285,617
12,97615,196
358,523
11,784
7
682,500
196,978
45,830,885※ “Other” includes collection of delinquent tax, such as the commodity tax,

※ “Total population” and “Persons engaged” are figures as of 2008.

Item

General Expenditures

IT-related expenses
Expenses to improve convenience for taxpayers※1
Expenses related to internationalization measures
Expenses to improve work environment※2
Expenses related to tax reforms
Expenses for tax forms & communications
General operating expenses※3
Expenses for National Tax College
Expenses for National Tax Tribunal
Expenses for National Research Institute of Brewing
Subtotal
Salary costs
Total NTA budget

BudgetMillion yen

46,184
13,724
964
7,165
4,743
12,922
47,231
2,598
406
1,064
137,001
579,422716,423

Withholding agents and withholding income tax
Income etc. category
Employment income (wages and salaries)
Retirement income
Interest income, etc.
Dividend income
Capital gains on listed shares etc.
kept in special accountIncome from remuneration, etc.
Income paid to non-residents andforeign corporations, etc.
Total

（Operation year 2008）
Number ofwithholding agents Amount of tax
Thousands
Million yen

3,746
−
50
130

9,478,300
260,300
721,500
2,071,800

749,3002,990

1,161,000

24

338,800− 14,081,100※ The figures of withholding agents are figures as of the end of June 2009.

Number of corporations and corporation tax（Operation year 2008）

Number of corporations
3,002 Thousands
Number of tax returns filed
2,805 Thousands
Percentage of corporations filing
89.8%
Percentage of returns declaring a surplus
29.1%
Amount of self-assessed income
37,987,400 Million yen
Amount of self-assessed loss
30,929,100 Million yen
Amount of tax
9,707,700 Million yen※ The number of corporations is the figure as of the end of June 2009.

Consumption tax（Fiscal year 2008）

Category
Individuals
Corporations
Total
Amount of tax

Payment

RefundThousand cases

Thousand cases

1,420
1,957
3,377
9,726,400 Million yen

41
120
161
2,480,100 Million yen

Liquor tax and liquor production
Type

Sake
Sake compounds
Continuous distillation Japanesespirit (shochu )Simple system distillation
Japanese spirit (shochu )Mirin (rice cooking wine)
Beer
Fruit wine
Sweet fruit wine
WhiskyBrandySparking liquor
Alcohol for raw materials & spirits
Liqueurs
Other brewed liquor
Powder liquor & miscellaneous liquor
Total（Fiscal year 2008）
Volume of Amount of tax
production
Thousand kMillion yen

488
50

74,6005,071

434

97,386535

128,352

112
3,213
70
5
60
6
1,383
272
1,285

2,201
697,087
6,457
567
22,3302,340
184,099
18,267106,175

781
8,693

62,497
1,407,428
Statistics※1 “Expenses to improve convenience for taxpayers” include expenses

325,060 People
1,758,100 Million yen
103,900 Million yen

Future Challenges

51

The time period of figures is indicatedon the title line or at the top right ofindividual tables.
The fiscal year ranges from April 1
through March 31 of the following year
(i.e. fiscal year 2008: April 1, 2008 to
March 31, 2009), while the operation
year is from July 1 through June 30 of
the following year (i.e. operation year
2008: July 1, 2008 to June 30, 2009).
The calendar year ranges from January
1 through December 31 of the same
year during which income tax returns
are filed.
The amount of sub-total in each itemof accounts may not accord with theamount indicated in the grand total, due
to rounding of fractional figures.

（Calendar year 2008）

Administrationof the Liquor Industry※

Number of people subject to taxation
Value of properties acquired
Amount of tax※ Figures include the taxation system for settlement at the time of inheritance.

land value tax, etc.

NTA initial budget for fiscal year 2010

Gift tax

Remedy for Infringementof Taxpayer Rights

Tax consultations………55

12,572,000
2,951,000
11,159,000
1,550,000
10,254,000
1,468,000
894,000
1,857,000
14,00089,000521,000（Calendar year 2008）

Number of deceased
1,142,407 People
Number of deceased subject to taxation
48,016 People
Number of taxpayers (number of heirs)
139,695 People
Taxable amount
10,748,200 Million yen
Amount of tax
1,251,700 Million yen

Tax Administration Under
Increasing Globalization

Criminal
investigation ……………54

Withholding income tax
Self-assessed income tax
Corporation tax
Inheritance tax
Consumption tax
Liquor tax
Tobacco tax
Gasoline tax
Liquefied petroleum gas tax
Aviation fuel tax
Petroleum and coal tax
Power resources development
promotion tax
Motor vehicle tonnage tax
Customs duty
Tonnage due
Other ※
Stamp revenue
SubtotalThousand people
Total population
127,690
Persons engaged
63,850
Number of final returns for income tax
23,670Refund12,990
Tax payment
7,180
Business income earners
1,470
Other income earners
5,700
Real estate income earners
1,080
Employment income earners
2,390
Miscellaneous income earners
2,020
Other
210

Improvement of Taxpayer
Convenience andAdministrative Efficiency

International taxation…53

General AccountTax examinations………53

BudgetInheritance tax（Calendar year 2009）

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Tax returns andtaxation……………………52

ActualItem

Income tax

Number oftax returns

Budget and final accounts of taxes and stamp
revenues for fiscal year 2008

Breakdown by
income earners

Tax revenues andbudget ……………………51

Tax returns and taxation

About the NTA

Tax revenues and budget

related to maintenance of the e-Tax and the filing assistance on the
NTA website.
※ 2 “Expenses to improve work environment” includes expenses to improve
facilities and health care.
※3 “General operating expenses” include wage expenses for part-timers,
travel expenses, honoraria for hired bookkeeping instructors, and PR
expenses.

52

Ⅷ Statistics

Delinquency ……………53

Remedy for infringementof taxpayer rights…………54
Taxpayer satisfaction…55

12,161,180
2,823,894
10,010,600
1,454,907
9,968,893
1,461,367
850,859
1,889,385
12,976
83,578511,044

348,000

340,472

715,000
939,000
10,000−1,088,000
46,429,000

717,047
883,1099,427
142
1,088,425
44,267,304

Million yen

282,000
Local road tax
14,000
Liquefied petroleum gas tax (transferred)
Aviation fuel tax (transferred)
16,200Motor vehicle tonnage tax (transferred)
357,500
Special tonnage due
12,500Special local corporation tax
500
Gasoline tax
682,500
Special tobacco tax
206,500
Total
48,000,700

Million yen

285,617
12,97615,196
358,523
11,784
7
682,500
196,978
45,830,885※ “Other” includes collection of delinquent tax, such as the commodity tax,

※ “Total population” and “Persons engaged” are figures as of 2008.

Item

General Expenditures

IT-related expenses
Expenses to improve convenience for taxpayers※1
Expenses related to internationalization measures
Expenses to improve work environment※2
Expenses related to tax reforms
Expenses for tax forms & communications
General operating expenses※3
Expenses for National Tax College
Expenses for National Tax Tribunal
Expenses for National Research Institute of Brewing
Subtotal
Salary costs
Total NTA budget

BudgetMillion yen

46,184
13,724
964
7,165
4,743
12,922
47,231
2,598
406
1,064
137,001
579,422716,423

Withholding agents and withholding income tax
Income etc. category
Employment income (wages and salaries)
Retirement income
Interest income, etc.
Dividend income
Capital gains on listed shares etc.
kept in special accountIncome from remuneration, etc.
Income paid to non-residents andforeign corporations, etc.
Total

（Operation year 2008）
Number ofwithholding agents Amount of tax
Thousands
Million yen

3,746
−
50
130

9,478,300
260,300
721,500
2,071,800

749,3002,990

1,161,000

24

338,800− 14,081,100※ The figures of withholding agents are figures as of the end of June 2009.

Number of corporations and corporation tax（Operation year 2008）

Number of corporations
3,002 Thousands
Number of tax returns filed
2,805 Thousands
Percentage of corporations filing
89.8%
Percentage of returns declaring a surplus
29.1%
Amount of self-assessed income
37,987,400 Million yen
Amount of self-assessed loss
30,929,100 Million yen
Amount of tax
9,707,700 Million yen※ The number of corporations is the figure as of the end of June 2009.

Consumption tax（Fiscal year 2008）

Category
Individuals
Corporations
Total
Amount of tax

Payment

RefundThousand cases

Thousand cases

1,420
1,957
3,377
9,726,400 Million yen

41
120
161
2,480,100 Million yen

Liquor tax and liquor production
Type

Sake
Sake compounds
Continuous distillation Japanesespirit (shochu )Simple system distillation
Japanese spirit (shochu )Mirin (rice cooking wine)
Beer
Fruit wine
Sweet fruit wine
WhiskyBrandySparking liquor
Alcohol for raw materials & spirits
Liqueurs
Other brewed liquor
Powder liquor & miscellaneous liquor
Total（Fiscal year 2008）
Volume of Amount of tax
production
Thousand kMillion yen

488
50

74,6005,071

434

97,386535

128,352

112
3,213
70
5
60
6
1,383
272
1,285

2,201
697,087
6,457
567
22,3302,340
184,099
18,267106,175

781
8,693

62,497
1,407,428
Statistics※1 “Expenses to improve convenience for taxpayers” include expenses

325,060 People
1,758,100 Million yen
103,900 Million yen

Future Challenges

51

The time period of figures is indicatedon the title line or at the top right ofindividual tables.
The fiscal year ranges from April 1
through March 31 of the following year
(i.e. fiscal year 2008: April 1, 2008 to
March 31, 2009), while the operation
year is from July 1 through June 30 of
the following year (i.e. operation year
2008: July 1, 2008 to June 30, 2009).
The calendar year ranges from January
1 through December 31 of the same
year during which income tax returns
are filed.
The amount of sub-total in each itemof accounts may not accord with theamount indicated in the grand total, due
to rounding of fractional figures.

（Calendar year 2008）

Administrationof the Liquor Industry※

Number of people subject to taxation
Value of properties acquired
Amount of tax※ Figures include the taxation system for settlement at the time of inheritance.

land value tax, etc.

NTA initial budget for fiscal year 2010

Gift tax

Remedy for Infringementof Taxpayer Rights

Tax consultations………55

12,572,000
2,951,000
11,159,000
1,550,000
10,254,000
1,468,000
894,000
1,857,000
14,00089,000521,000（Calendar year 2008）

Number of deceased
1,142,407 People
Number of deceased subject to taxation
48,016 People
Number of taxpayers (number of heirs)
139,695 People
Taxable amount
10,748,200 Million yen
Amount of tax
1,251,700 Million yen

Tax Administration Under
Increasing Globalization

Criminal
investigation ……………54

Withholding income tax
Self-assessed income tax
Corporation tax
Inheritance tax
Consumption tax
Liquor tax
Tobacco tax
Gasoline tax
Liquefied petroleum gas tax
Aviation fuel tax
Petroleum and coal tax
Power resources development
promotion tax
Motor vehicle tonnage tax
Customs duty
Tonnage due
Other ※
Stamp revenue
SubtotalThousand people
Total population
127,690
Persons engaged
63,850
Number of final returns for income tax
23,670Refund12,990
Tax payment
7,180
Business income earners
1,470
Other income earners
5,700
Real estate income earners
1,080
Employment income earners
2,390
Miscellaneous income earners
2,020
Other
210

Improvement of Taxpayer
Convenience andAdministrative Efficiency

International taxation…53

General AccountTax examinations………53

BudgetInheritance tax（Calendar year 2009）

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Tax returns andtaxation……………………52

ActualItem

Income tax

Number oftax returns

Budget and final accounts of taxes and stamp
revenues for fiscal year 2008

Breakdown by
income earners

Tax revenues andbudget ……………………51

Tax returns and taxation

About the NTA

Tax revenues and budget

related to maintenance of the e-Tax and the filing assistance on the
NTA website.
※ 2 “Expenses to improve work environment” includes expenses to improve
facilities and health care.
※3 “General operating expenses” include wage expenses for part-timers,
travel expenses, honoraria for hired bookkeeping instructors, and PR
expenses.

52

Ⅷ Statistics

Examination of self-assessed income tax

Examination of consumption tax（Operation year 2008）

Number Amount of unrecorded Additional tax revenueof cases income
Per case collected
Per case※1 “Special, General” refers to a deep examination focused on the large

55

42,300Field examination of corporation tax（Operation year 2008）

Category

Thousands

Million yen Thousand yen

146 1,325,500
4557,100

9,110

140,970

Million yen

327,200
142,100

Number Number of Amount of unrecorded Additional tax revenueof cases undeclaredinheritance Per case collected Per casecases

Thousands Thousands Million yen Thousand yen Million yen Thousand yen

12409,500

29,02093,100117 Cases
11,300 Million yen

Transfer pricing taxation（Operation year 2008）

111 Cases
27,000 Million yen※ The figures are for corporations under the supervision of the large

enterprise examination division (in principle, corporations with at least¥100 million in capital)

111 Cases
70 Cases210

149 29,000

138

Tax itemMillion yen Million yen

25,500

Income tax
Corporation tax
Inheritance tax
Consumption tax
Withholding income tax
Total

171

Large-scale cases（Fiscal year 2009）
Number of cases
Includes: over 300
Includes: over 500
referred to the prosecutor million yen tax evasion million yen tax evasion
Cases

6,600

Cases

149

Cases

36
84
6
18
5
149

Tax evasion

Per case

Million yen

Million yen

5,400
15,200
1,900
2,000
1,000
25,500

149
181
319
109
205
171

Cases

17

6

Collected number of statutory information

Remedy for infringement of taxpayer rights（Operation year 2008）

Name of statutory information

Number collected

Withholding record of employment income
Payment record of interest and others
Payment record of dividends, distribution of
surplus, and interest paid on guaranty capital
Withholding record of public pensions, etc.
Payment record of remuneration, fees,
contracts and prize money
Payment record of consideration for transferof stocks, etc.
Record of remittance and receipt related toforeign countries
Other
Total

Thousands

19,5372,424
15,04433,893
10,775
4,609

Manufacturing
Distribution
Real estate & construction
Food & beverage
Financial
Other industries※1
Other※2
Total

Number of persons
People

48
82
345
79
23
326
320
1,223

%

3.9
6.7
28.2
6.5
1.9
26.7
26.2
100.0

104,697
194,388

industry, etc.

Number of requests
for reinvestigation

Number of new requests
for reinvestigation ①

Number of cases
processed ②

Number of requests
approved ③

Percentage ③/②

5,700
844
6,544

4,602
757
5,359

4,613
700
5,313

467
1
468

10.1
0.1
8.8

Number of requests
for reconsideration

Number of new requests
for reconsideration ①

Number of cases
processed ②

Number of requests
approved ③

2,541
294
2,835

Cases

Percentage ③/②

4,508
472
4,980

Cases

Number of litigations

Number of cases filed
for first instance ①

Number ofcases closed ②

Cases

Cases

Cases

Taxation-related
Collection-related
Total

Cases

Cases

Cases

％

Request for reconsideration
Category

Amount of tax
Million yen

9,962
22,091
98,51816,075
12,33975,756
106,353
341,094

Taxation-related
Collection-related
Total

Cases

Cases

2,517
297
2,814

％

400
15
415

15.9
5.1
14.7

Number of lost casesand partial defeats ③

Percentage ③/②

%

2.9
6.5
28.9
4.7
3.6
22.2
31.2
100.0

※1 “Other industries” refers to hospitals (doctors), service industry, leisure※ 2 “Other” refers to wage earners, pensioners, etc.

Category

3,409

Tax delinquency cases of 100 million yen or
more, by industry（As of the end of fiscal year 2009）
Industry

Request for reinvestigation

Litigation
Category
Taxation-related
Collection-related
National Tax Tribunal-related
Total

576
128
6
710

137
49
5
191

Cases

271
84
1
356

Cases

35
3
−
38

％

12.9
3.6
−
10.7

Statistics

Cases of advance pricing arrangement related totransfer pricing（Operation year 2008）

213

Numberof cases

Future Challenges

enterprise examination division (in principle, corporations with at least¥100 million in capital)

Cases

Amount of tax evasion(referred to theprosecutor) Per case

Administrationof the Liquor Industry（Operation year 2008）※ The figures are for corporations under the supervision of the large

Number of cases requested
Number of cases processed

290
430

Delinquency

Fraudulent income through overseas transactions

Number of taxation cases
Amount of taxable income

27,50059,500（Operation year 2008）

International taxation

Cases of fraudulent overseas income
Amount of fraudulent overseas income

67
75（Fiscal year 2009）（Fiscal year 2009）

Remedy for Infringementof Taxpayer Rights

All corporations
Of which, corporations
handled by the large
enterprise examination
department

Number Amount of unrecorded Additional tax
revenueof cases income
Per casecollected

95
138

Million yen Thousand yen

NumberAmount ofof casestax evasion
referred to
Per case
the prosecutor
Cases
Cases Million yen Million yen

Tax Administration Under
Increasing Globalization

197（Operation year 2008）
Number of illegal
Additional tax
cases
revenue collectedThousands
Million yen

Thousands

Field examination of inheritance tax

14

Examination of withholding income tax
Number of cases
examined
Thousands

Individuals
Corporations

Thousands

Number Numberof cases of cases
conducted closed

Improvement of Taxpayer
Convenience andAdministrative Efficiency

amount and serious violations.
※ 2 “Focusing” refers to a quick examination to find unrecorded income, etc.
※3 “Brief contact” refers to correction of tax declaration by telephone or bysummoning taxpayers to the tax offices.

Category

NumberNumber of
Additional tax revenueof cases undeclared cases collected
Per case

Referred to the prosecutor by tax item

Criminal investigations

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Field examination Thousands Million yen Thousand yen Million yen Thousand yen
60 534,900 8,870 100,500 1,670
special, general※1
44
95,800 2,160
6,100
140
Focusing※2
628 284,800
450 15,000
20
Brief contact※3
Total
733 915,500 1,250 121,600
170（Operation year 2008）

About the NTA

Criminal investigation

Tax examinations※1 The figures for “requests for reinvestigation” and “requests for reconsideration” are those of fiscal year 2008.
※ 2 The figures for cases for litigation are total numbers for each level of trial in fiscal year 2008.

※ The figures are for corporations under the supervision of the large

53

enterprise examination division (in principle, corporations with at least¥100 million in capital)

54

Ⅷ Statistics

Examination of self-assessed income tax

Examination of consumption tax（Operation year 2008）

Number Amount of unrecorded Additional tax revenueof cases income
Per case collected
Per case※1 “Special, General” refers to a deep examination focused on the large

55

42,300Field examination of corporation tax（Operation year 2008）

Category

Thousands

Million yen Thousand yen

146 1,325,500
4557,100

9,110

140,970

Million yen

327,200
142,100

Number Number of Amount of unrecorded Additional tax revenueof cases undeclaredinheritance Per case collected Per casecases

Thousands Thousands Million yen Thousand yen Million yen Thousand yen

12409,500

29,02093,100117 Cases
11,300 Million yen

Transfer pricing taxation（Operation year 2008）

111 Cases
27,000 Million yen※ The figures are for corporations under the supervision of the large

enterprise examination division (in principle, corporations with at least¥100 million in capital)

111 Cases
70 Cases210

149 29,000

138

Tax itemMillion yen Million yen

25,500

Income tax
Corporation tax
Inheritance tax
Consumption tax
Withholding income tax
Total

171

Large-scale cases（Fiscal year 2009）
Number of cases
Includes: over 300
Includes: over 500
referred to the prosecutor million yen tax evasion million yen tax evasion
Cases

6,600

Cases

149

Cases

36
84
6
18
5
149

Tax evasion

Per case

Million yen

Million yen

5,400
15,200
1,900
2,000
1,000
25,500

149
181
319
109
205
171

Cases

17

6

Collected number of statutory information

Remedy for infringement of taxpayer rights（Operation year 2008）

Name of statutory information

Number collected

Withholding record of employment income
Payment record of interest and others
Payment record of dividends, distribution of
surplus, and interest paid on guaranty capital
Withholding record of public pensions, etc.
Payment record of remuneration, fees,
contracts and prize money
Payment record of consideration for transferof stocks, etc.
Record of remittance and receipt related toforeign countries
Other
Total

Thousands

19,5372,424
15,04433,893
10,775
4,609

Manufacturing
Distribution
Real estate & construction
Food & beverage
Financial
Other industries※1
Other※2
Total

Number of persons
People

48
82
345
79
23
326
320
1,223

%

3.9
6.7
28.2
6.5
1.9
26.7
26.2
100.0

104,697
194,388

industry, etc.

Number of requests
for reinvestigation

Number of new requests
for reinvestigation ①

Number of cases
processed ②

Number of requests
approved ③

Percentage ③/②

5,700
844
6,544

4,602
757
5,359

4,613
700
5,313

467
1
468

10.1
0.1
8.8

Number of requests
for reconsideration

Number of new requests
for reconsideration ①

Number of cases
processed ②

Number of requests
approved ③

2,541
294
2,835

Cases

Percentage ③/②

4,508
472
4,980

Cases

Number of litigations

Number of cases filed
for first instance ①

Number ofcases closed ②

Cases

Cases

Cases

Taxation-related
Collection-related
Total

Cases

Cases

Cases

％

Request for reconsideration
Category

Amount of tax
Million yen

9,962
22,091
98,51816,075
12,33975,756
106,353
341,094

Taxation-related
Collection-related
Total

Cases

Cases

2,517
297
2,814

％

400
15
415

15.9
5.1
14.7

Number of lost casesand partial defeats ③

Percentage ③/②

%

2.9
6.5
28.9
4.7
3.6
22.2
31.2
100.0

※1 “Other industries” refers to hospitals (doctors), service industry, leisure※ 2 “Other” refers to wage earners, pensioners, etc.

Category

3,409

Tax delinquency cases of 100 million yen or
more, by industry（As of the end of fiscal year 2009）
Industry

Request for reinvestigation

Litigation
Category
Taxation-related
Collection-related
National Tax Tribunal-related
Total

576
128
6
710

137
49
5
191

Cases

271
84
1
356

Cases

35
3
−
38

％

12.9
3.6
−
10.7

Statistics

Cases of advance pricing arrangement related totransfer pricing（Operation year 2008）

213

Numberof cases

Future Challenges

enterprise examination division (in principle, corporations with at least¥100 million in capital)

Cases

Amount of tax evasion(referred to theprosecutor) Per case

Administrationof the Liquor Industry（Operation year 2008）※ The figures are for corporations under the supervision of the large

Number of cases requested
Number of cases processed

290
430

Delinquency

Fraudulent income through overseas transactions

Number of taxation cases
Amount of taxable income

27,50059,500（Operation year 2008）

International taxation

Cases of fraudulent overseas income
Amount of fraudulent overseas income

67
75（Fiscal year 2009）（Fiscal year 2009）

Remedy for Infringementof Taxpayer Rights

All corporations
Of which, corporations
handled by the large
enterprise examination
department

Number Amount of unrecorded Additional tax
revenueof cases income
Per casecollected

95
138

Million yen Thousand yen

NumberAmount ofof casestax evasion
referred to
Per case
the prosecutor
Cases
Cases Million yen Million yen

Tax Administration Under
Increasing Globalization

197（Operation year 2008）
Number of illegal
Additional tax
cases
revenue collectedThousands
Million yen

Thousands

Field examination of inheritance tax

14

Examination of withholding income tax
Number of cases
examined
Thousands

Individuals
Corporations

Thousands

Number Numberof cases of cases
conducted closed

Improvement of Taxpayer
Convenience andAdministrative Efficiency

amount and serious violations.
※ 2 “Focusing” refers to a quick examination to find unrecorded income, etc.
※3 “Brief contact” refers to correction of tax declaration by telephone or bysummoning taxpayers to the tax offices.

Category

NumberNumber of
Additional tax revenueof cases undeclared cases collected
Per case

Referred to the prosecutor by tax item

Criminal investigations

Promotion of Tax Filingand Payment by
Proper Self-Assessment

Field examination Thousands Million yen Thousand yen Million yen Thousand yen
60 534,900 8,870 100,500 1,670
special, general※1
44
95,800 2,160
6,100
140
Focusing※2
628 284,800
450 15,000
20
Brief contact※3
Total
733 915,500 1,250 121,600
170（Operation year 2008）

About the NTA

Criminal investigation

Tax examinations※1 The figures for “requests for reinvestigation” and “requests for reconsideration” are those of fiscal year 2008.
※ 2 The figures for cases for litigation are total numbers for each level of trial in fiscal year 2008.

※ The figures are for corporations under the supervision of the large

53

enterprise examination division (in principle, corporations with at least¥100 million in capital)

54

Ⅷ Statistics

Tax consultations
Cases of tax consultations received at Phone
Consultation Centers and cases of responses intax answer system（Fiscal year 2009）
2,695
278
803
141
185
322
712
5,136
35,994
41,130Tax Consultations

Income tax
Corporate tax
Property tax
Consumption tax
Other indirect taxes
Tax collection
Other
Subtotal
Tax Answer System
Total

Thousand cases[Tax consultations at Phone Consultation Centers] （Fiscal year 2009）

Tax
Rank category

Cases

Income tax
Corporation tax
Property tax
Consumption tax
Other indirect taxes
Tax collection
Other
Total

758
377
338
36
26
37
257
1,829

Taxpayer satisfaction（Fiscal year 2008）

Items

Percentage ofHigh-ranked Ratings％

Attitude of officials in providing services
Satisfaction with guidance display in Tax
Office, and use of reception & service
Satisfaction with use of facilities in Tax Office
PR activities
Activities to collect public opinions
Satisfaction level at Phone Consultation Center

83.0
72.3
60.4
73.2
88.7
93.2

※ The percentage of high-ranked ratings shows responses rated as “good”

and “somewhat good” on a five point scale from “good” to “bad” in thequestionnaire survey

55

Thousand
cases

Items

Obligations & procedures to file tax
Income tax returns, etc.

1447Special credit for loans relating to
Income tax a dwelling

2296

Income tax Medical expenses deduction
Income tax Year-end adjustment
Income tax (Special) exemption for spouse,and exemption for dependents

3
4
5[Tax Answer System]

Cases of complaints received at Phone
Consultation Centers（Fiscal year 2009）

MEMO

Top five tax items frequently consulted

Rank

Tax
category

1

Income tax

2

Income tax

3

Income tax

4
5

Income tax
Income tax

256
229
164

（Fiscal year 2009）

Items

Thousand
cases

When paid medical expense(medical expenses deduction）
Exemption for dependents
Medical expenses eligible for
medical expenses deduction
Tax rate of income tax
Exemption for spouse

1,276
844
757
739
583

Ⅷ Statistics

Tax consultations
Cases of tax consultations received at Phone
Consultation Centers and cases of responses intax answer system（Fiscal year 2009）
2,695
278
803
141
185
322
712
5,136
35,994
41,130Tax Consultations

Income tax
Corporate tax
Property tax
Consumption tax
Other indirect taxes
Tax collection
Other
Subtotal
Tax Answer System
Total

Thousand cases[Tax consultations at Phone Consultation Centers] （Fiscal year 2009）

Tax
Rank category

Cases

Income tax
Corporation tax
Property tax
Consumption tax
Other indirect taxes
Tax collection
Other
Total

758
377
338
36
26
37
257
1,829

Taxpayer satisfaction（Fiscal year 2008）

Items

Percentage ofHigh-ranked Ratings％

Attitude of officials in providing services
Satisfaction with guidance display in Tax
Office, and use of reception & service
Satisfaction with use of facilities in Tax Office
PR activities
Activities to collect public opinions
Satisfaction level at Phone Consultation Center

83.0
72.3
60.4
73.2
88.7
93.2

※ The percentage of high-ranked ratings shows responses rated as “good”

and “somewhat good” on a five point scale from “good” to “bad” in thequestionnaire survey

55

Thousand
cases

Items

Obligations & procedures to file tax
Income tax returns, etc.

1447Special credit for loans relating to
Income tax a dwelling

2296

Income tax Medical expenses deduction
Income tax Year-end adjustment
Income tax (Special) exemption for spouse,and exemption for dependents

3
4
5[Tax Answer System]

Cases of complaints received at Phone
Consultation Centers（Fiscal year 2009）

MEMO

Top five tax items frequently consulted

Rank

Tax
category

1

Income tax

2

Income tax

3

Income tax

4
5

Income tax
Income tax

256
229
164

（Fiscal year 2009）

Items

Thousand
cases

When paid medical expense(medical expenses deduction）
Exemption for dependents
Medical expenses eligible for
medical expenses deduction
Tax rate of income tax
Exemption for spouse

1,276
844
757
739
583

国税庁レポート

2010
NATIONAL TAX AGENCY REPORT

Issued in September 2010
3-1-1 Kasumigaseki,
Chiyoda-ku,Tokyo,100-8978
Japan
TEL.03 - 3581 - 4161
（ Representative）
NTA Website
http://www.nta.go.jp

NATIONAL TAX AGENCY REPORT 2010

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NATIONAL TAX AGENCYREPORT 2010