Order for Enforcement of the Consumption Tax Act

Where a business operator that intends to be subject to the application of Article 37, paragraph (1) of the Act has been unable, due to unavoidable circumstances, to submit the written notification under that paragraph (hereinafter in this Article referred to as the "notification of election of the simplified tax system") by the day before the first day of the taxable period for which it intends to be subject to the application of that paragraph (where that taxable period is a taxable period prescribed in Article 56, paragraph (1), the last day of that taxable period; the same applies hereinafter in this paragraph, paragraph (3) and paragraph (4)), and has obtained the approval of the district director having jurisdiction over its place for tax payment for being subject to the application of Article 37, paragraph (1) of the Act for the taxable periods on or after that taxable period, that business operator is deemed to have submitted the notification of election of the simplified tax system to that district director on the day before the first day of the taxable period for which it intends to be subject to that application.

Where a business operator that intends to cease to be subject to the application of Article 37, paragraph (1) of the Act has been unable, due to unavoidable circumstances, to submit the written notification under paragraph (5) of that Article (excluding a written notification stating that the business has been discontinued; hereinafter in this Article referred to as the "notification of withdrawal from the simplified tax system") by the day before the first day of the taxable period for which it intends to cease to be subject to the application of Article 37, paragraph (1) of the Act, and has obtained the approval of the district director having jurisdiction over its place for tax payment for ceasing to be subject to the application of that paragraph for the taxable periods on or after that taxable period, that business operator is deemed to have submitted the notification of withdrawal from the simplified tax system to that district director on the day before the first day of the taxable period for which it intends to cease to be subject to that application.

A business operator that intends to obtain the approval under the preceding two paragraphs must submit to the district director having jurisdiction over its place for tax payment, within a reasonable period after those circumstances have ceased, a written application stating the date of the first day of the taxable period for which it intends to be, or to cease to be, subject to the application of Article 37, paragraph (1) of the Act, the circumstances in which it was unable to submit the notification of election of the simplified tax system or the notification of withdrawal from the simplified tax system by the day before the first day of that taxable period, and other matters specified by Ministry of Finance Order.

Where a written application under the preceding paragraph has been submitted, the district director is to reject the application if the district director finds that there were no unavoidable circumstances for the applicant business operator's inability to submit the notification of election of the simplified tax system or the notification of withdrawal from the simplified tax system by the day before the first day of the taxable period relating to the application.

Where a written application under paragraph (3) has been submitted and the district director makes a disposition of approval or dismissal of the application, the district director is to notify the business operator that filed the application to that effect in writing.

The taxable period specified by Cabinet Order as prescribed in Article 37-2, paragraph (6) of the Act is any one taxable period among the taxable periods that satisfy all of the following requirements:

it is a taxable period that commenced during the period from the day on which the disaster or other unavoidable cause prescribed in Article 37-2, paragraph (6) of the Act occurred to the day on which that disaster or other unavoidable cause ceased;

it is not a taxable period on or after the taxable period following the taxable period (limited to the taxable period for which the approval under Article 37-2, paragraph (6) of the Act was obtained) that includes the day on which the disaster or other unavoidable cause referred to in the preceding item occurred;

it is a taxable period that commenced during the period from the first day of the following taxable period prescribed in Article 37, paragraph (6) of the Act to the day on which two years have elapsed from that first day.

Where a business operator that has obtained the approval under Article 37-2, paragraph (1) or (6) of the Act has, before that approval, submitted a return under Article 42, paragraph (1), (4) or (6) of the Act that states the matters set out in the items of Article 43, paragraph (1) of the Act (limited to one relating to the elected disaster-affected taxable period prescribed in Article 37-2, paragraph (1) of the Act or the disaster-affected taxable period of discontinuance prescribed in paragraph (6) of that Article for which that approval was obtained), for the application of Article 43, paragraph (1), item (iii) of the Act to that return, the phrase "total of the amounts of consumption tax" in that item is deemed to be replaced with "total of the amounts of consumption tax (meaning the amount of consumption tax calculated on the assumption that the approval under Article 37-2, paragraph (1) or (6) had not been obtained)".

Where, for a refund, etc. of consideration for sales (meaning the refund, etc. of consideration for sales prescribed in Article 38, paragraph (1) of the Act; the same applies in the following paragraph and paragraph (1) of the following Article), a business operator retains, under Article 57-4, paragraph (6) of the Act, a copy of the qualified return invoice delivered or the electronic or magnetic record prescribed in Article 57-4, paragraph (5) of the Act pertaining to the matters to be stated in the qualified return invoice provided, the business operator may, notwithstanding Article 38, paragraph (1) of the Act, treat the amount calculated by multiplying the amount of consumption tax, etc. set out in Article 57-4, paragraph (3), item (v) of the Act that is stated in that qualified return invoice or recorded in that electronic or magnetic record by 78/100 as the consumption tax on refunds, etc. of consideration for sales prescribed in Article 38, paragraph (1) of the Act.

Where a business operator prescribed in Article 38, paragraph (1) of the Act makes a refund, etc. of consideration for sales, and the amount of that refund, etc. of consideration for sales has not been reasonably divided into the portion pertaining to taxable transfers, etc. of assets (excluding those that fall under taxable transfers, etc. of assets subject to the reduced rate) and the portion pertaining to taxable transfers, etc. of assets subject to the reduced rate, Article 38, paragraph (1) of the Act applies with the amount calculated by multiplying the tax-inclusive price (meaning the tax-inclusive price prescribed in Article 38, paragraph (1) of the Act; the same applies hereinafter in this paragraph and Article 60) pertaining to that refund, etc. of consideration for sales by the proportion that the tax-inclusive price of taxable transfers, etc. of assets subject to the reduced rate accounts for in the total amount of the tax-inclusive price of taxable transfers, etc. of assets pertaining to that refund, etc. of consideration for sales treated as the amount of the portion pertaining to those taxable transfers, etc. of assets subject to the reduced rate.

A business operator seeking to be subject to the application of Article 38, paragraph (1) of the Act must record the following matters (where the refund, etc. of consideration for sales relates to a business set out in the items of Article 70-11, the matters set out in items (ii) through (iv)) in its books in an orderly and clear manner:

the name or title of the person that received the refund, etc. of consideration for sales;

the date on which the refund, etc. of consideration for sales was made;

the particulars of the assets or services relating to the taxable transfer, etc. of assets relating to the refund, etc. of consideration for sales (where the taxable transfer, etc. of assets relating to that refund, etc. of consideration for sales is a taxable transfer, etc. of assets subject to the reduced rate, the particulars of the assets and the fact that it is a taxable transfer, etc. of assets subject to the reduced rate);

the amount of the refund, etc. of consideration for sales made, classified by differing tax rate.

A business operator prescribed in the preceding paragraph must organize the books recorded under that paragraph and retain them, for seven years from the day on which two months (one month, where the residual assets of a corporation in liquidation have been finally determined; the same applies in the following paragraph) have elapsed from the day following the last day of the taxable period that includes the day of their closing, at its place for tax payment or the location of its office, place of business or other equivalent place relating to its transactions.

Retention under the preceding paragraph for the period on or after the day on which five years have elapsed from the day on which two months have elapsed from the day following the last day of the taxable period prescribed in the preceding paragraph may be made by the method determined by the Minister of Finance.

A business operator seeking to be subject to the application of Article 38-2, paragraph (1) of the Act must record the following matters in its books in an orderly and clear manner:

the name or title of the person that made a refund, etc. of consideration for specified taxable purchases (meaning the refund, etc. of consideration for specified taxable purchases prescribed in Article 38-2, paragraph (1) of the Act; the same applies hereinafter in this paragraph);

the date on which the refund, etc. of consideration for specified taxable purchases was received;

the particulars of the refund, etc. of consideration for specified taxable purchases;

the amount for which the refund, etc. of consideration for specified taxable purchases was received;

the fact that it is a refund, etc. of consideration for specified taxable purchases.

A business operator prescribed in the preceding paragraph must organize the books recorded under that paragraph and retain them, for seven years from the day on which two months (one month, where the residual assets of a corporation in liquidation have been finally determined; the same applies in the following paragraph) have elapsed from the day following the last day of the taxable period that includes the day of their closing, at its place for tax payment or the location of its office, place of business or other equivalent place relating to its transactions.

Retention under the preceding paragraph for the period on or after the day on which five years have elapsed from the day on which two months have elapsed from the day following the last day of the taxable period prescribed in the preceding paragraph may be made by the method determined by the Minister of Finance.

The facts specified by Cabinet Order as prescribed in Article 39, paragraph (1) of the Act are the following facts:

the fact that a claim has been written off by a decision to approve a rehabilitation plan;

the fact that a claim has been written off by a decision to approve an arrangement relating to special liquidation;

the fact that it is clear, in light of the status of the property, ability to pay and other circumstances of the debtor of the claim, that the debtor cannot repay the full amount of the debt;

facts specified by Ministry of Finance Order as being equivalent to the facts set out in the preceding three items.

Where a business operator (meaning the business operator prescribed in Article 39, paragraph (1) of the Act; the same applies in the following paragraph) has become unable to collect all or part of the tax-inclusive price of a taxable transfer, etc. of assets prescribed in paragraph (1) of that Article (hereinafter in this paragraph referred to as "bad debt, etc."), and the tax-inclusive price of the taxable transfer, etc. of assets that has become uncollectible has not been reasonably divided into the portion pertaining to taxable transfers, etc. of assets (excluding those that fall under taxable transfers, etc. of assets subject to the reduced rate) and the portion pertaining to taxable transfers, etc. of assets subject to the reduced rate, Article 39, paragraph (1) of the Act applies with the amount calculated by multiplying the tax-inclusive price of the taxable transfer, etc. of assets that has become uncollectible by the proportion that the tax-inclusive price of taxable transfers, etc. of assets subject to the reduced rate accounts for in the total of the tax-inclusive price of the taxable transfers, etc. of assets that were subject to that bad debt, etc. treated as the amount of the portion pertaining to those taxable transfers, etc. of assets subject to the reduced rate.

Where a business operator has collected all or part of the tax-inclusive price of a taxable transfer, etc. of assets prescribed in Article 39, paragraph (1) of the Act, to which that paragraph has been applied, and the tax-inclusive price collected has not been reasonably divided into the portion pertaining to taxable transfers, etc. of assets (excluding those that fall under taxable transfers, etc. of assets subject to the reduced rate) and the portion pertaining to taxable transfers, etc. of assets subject to the reduced rate, Article 39, paragraph (3) of the Act applies with the amount calculated by multiplying the tax-inclusive price collected by the proportion that the tax-inclusive price of those taxable transfers, etc. of assets subject to the reduced rate accounts for in the total of the tax-inclusive price of those taxable transfers, etc. of assets at the time of those taxable transfers, etc. of assets treated as the tax-inclusive price pertaining to the taxable transfers, etc. of assets subject to the reduced rate that was collected.