You missed the filing deadline and later file a late return or receive a tax-office determination. The charge imposed in addition to principal tax istax for failure to file, prescribed in Article 66 of the General Act of National Taxes.

This article helps people who discover a missed deadline assess how filing timing can reduce the charge.

Two situations are covered

Article 66(1) covers filing a late return or receiving an Article 25 determination, and a subsequent amended return or reassessment.

Its proviso excludes cases where justifiable grounds for not filing on time are recognized. No charge applies if those grounds are accepted.

15%, or 10% if reassessment was not anticipated

The basic rate is 15% of tax payable. It becomes 10% if the late or amended return was not filed in anticipation of reassessment or determination following an audit.

There is a further reduction. If filed without such anticipation and beforeNotice of Investigation, Article 66(8) reduces the rate to 5%. Unlike underreporting additional tax, this is a reduction to 5%, not exemption.

Thresholds at ¥500,000 and ¥3 million

Article 66(2) adds 5 percentage points on tax payable exceeding ¥500,000. For amended returns or reassessments, the threshold uses cumulative tax payable after adding prior amounts.

Article 66(3) addresses large nonfiling amounts. Where cumulative tax exceeds ¥3 million, separate rates apply to each band: 15% up to ¥500,000, 20% above ¥500,000 through ¥3 million, and 30% above ¥3 million. Filing without anticipation of reassessment reduces each by 5 percentage points.

Paragraph (3) also allows a deduction: in testing the ¥3 million threshold, tax attributable to facts for which the taxpayer is not considered responsible is deducted. Cases such as inherited assets whose existence could not have been known are discussed under this rule.

Increased penalties for failing to produce books

Article 66(5) adds a charge structured like that for underreporting: where officials requested books before the late filing or similar event, failure to produce them or markedly inadequate specified entries adds 10 percentage points; inadequate entries add 5. Cases not attributable to the taxpayer are likewise excluded.

A 10-percentage-point increase for repetition

Article 66(6) adds 10 percentage points in two categories.

Item (i) covers prior nonfiling or heavy additional tax for the same tax type within the five-year period counted back from the day before a late return filed in anticipation of reassessment or determination, or an actual reassessment or determination. Nonfiling tax on returns filed without such anticipation is excluded from this history. Item (ii) concerns the same tax type with periods beginning in thepreceding year and the year before thatrelative to the year in which the current tax period began, where nonfiling or Article 68(2) heavy additional tax was imposed, among other cases. Two consecutive periods of nonfiling fall here.

Filing within one month may avoid the charge

Article 66(9) provides nonapplication where a late return is filed without anticipating a determination, in circumstances prescribed by Cabinet Order as showing an intention to file on time, andis filed by one month after the statutory filing deadline.Paragraph 1 does not apply when it is.

The circumstances demonstrating that intention are in the Order. If you discover you are one day late, this one-month rule is the first possibility to consider.

When liability arises and the minimum amount charged

The obligation to pay nonfiling additional tax arisesExpiration of the statutory return deadline(Article 15).

Rounding is the same as for underreporting additional tax: the base is rounded down to the nearest ¥10,000, the charge to the nearest ¥100, and the entire charge is discarded if below ¥5,000 (Articles 118 and 119). It belongs to the same tax category as the principal (Article 69).

Common practical questions

A common question is the order for filing several overdue years together. Which year is filed first may affect Article 66(6), and large amounts engage paragraph (3)'s bands. Consulting before filing allows the sequence to be considered with the total burden in view.

For the broader framework, see our overview of ancillary taxes.

Legal basis

• Article 2, Item 4 of the Act on General Rules for National Taxes (Definitions)
• Article 15, Paragraph 2, Item 14 of the Act on General Rules for National Taxes (Establishment of Tax Liability and Determination of Amount of Tax Payable)
• General Act of National Taxes, Article 25 (Determination)
• General Act of National Taxes, Article 66(1)–(9) (Additional tax for nonfiling)
• Article 69 of the Act on General Rules for National Taxes (Tax Items Subject to Additional Taxes)
• Article 118, Paragraph 3 of the Act on General Rules for National Taxes (Rounding of Fractional Numbers for Tax Bases of National Taxes, etc.)
• Article 119, Paragraph 4 of the Act on General Rules for National Taxes (Rounding of Fractional Amounts of Established National Tax, etc.)

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