Order for Enforcement of the Consumption Tax Act

The amount specified by Cabinet Order as prescribed in Article 36, paragraph (1) of the Act is the amount specified in each of the following items for the category of assets set out in that item:

inventory relating to a taxable purchase acquired in Japan: the total of the following amounts:

the amount of consideration paid for taxable purchases of that asset;

the amount of freight charges for taking delivery, cargo handling charges and other expenses required for the purchase of that asset;

the amount of expenses directly required for putting that asset to consumption or sale;

taxable goods taken out of a bonded area that fall under inventory: the total of the following amounts:

the sum of the amount that is the tax base for the consumption tax relating to those taxable goods and the amount of consumption tax and the amount of local consumption tax relating to the taking of those taxable goods out of the bonded area (excluding the amount equivalent to the amount of accessory tax relating to those taxes);

the amount of freight charges for taking delivery, cargo handling charges and other expenses required for taking those taxable goods out of the bonded area;

the amount of expenses directly required for putting those taxable goods to consumption or sale;

inventory manufactured or constructed using the inventory set out in the preceding two items as raw materials (including inventory relating to the person's own mining, extraction, cultivation, farming or other similar acts (hereinafter in this item referred to as "mining, etc.")): the total of the following amounts:

the amount of raw material costs and expenses required for the manufacture or construction, or the mining, etc., of that asset;

the amount of expenses directly required for putting that asset to consumption or sale.

The amount of expenses prescribed in the items of the preceding paragraph and the amount of raw material costs (excluding those relating to taxable goods) and expenses are limited to amounts that fall under the amount of consideration paid for taxable purchases.

A business operator subject to Article 36, paragraph (1) of the Act must, for inventory relating to taxable purchases prescribed in that paragraph or taxable goods taken out of a bonded area that fall under inventory, state in a document the product name and quantity and the details of the amount of expenses required for the acquisition prescribed in that paragraph of that inventory or those taxable goods, and retain that document, 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 paragraph (5)) have elapsed from the day following the last day of the taxable period that includes the day on which it was prepared, at the business operator's place for tax payment or the location of its office, place of business or other equivalent place relating to its business.

The provisions of the preceding paragraph apply mutatis mutandis to the retention of documents under Article 36, paragraph (2) of the Act as applied mutatis mutandis pursuant to paragraph (4) of that Article.

Retention under paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; the same applies hereinafter in this 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 paragraph (3) may be made by the method determined by the Minister of Finance.

The taxable periods specified by Cabinet Order of a split-off parent corporation or split-off subsidiary corporation as prescribed in Article 37, paragraph (1) of the Act are the taxable periods specified in each of the following items for the category of cases set out in that item:

where a corporate split, etc. (meaning a corporate split, etc. prescribed in Article 12, paragraph (1) of the Act; the same applies hereinafter in this Article) has taken place, and the amount calculated in the manner provided in Article 23, paragraph (1) as the taxable sales of a split-off parent corporation (meaning a split-off parent corporation prescribed in Article 12, paragraph (1) of the Act; the same applies hereinafter in this Article) in the period corresponding to the base period for the business year of the split-off subsidiary corporation (meaning a split-off subsidiary corporation prescribed in Article 12, paragraph (1) of the Act; the same applies hereinafter in this Article) that includes the day on which that corporate split, etc. took place (where there are two or more split-off parent corporations, that amount pertaining to any one of the split-off parent corporations) exceeds 50 million yen: the taxable periods included in the business year of that split-off subsidiary corporation that includes the day on which that corporate split, etc. took place;

where a corporate split, etc. has taken place during the period from the day before the day one year before the first day of that business year of a split-off subsidiary corporation to the day before the first day of that business year, and the amount calculated in the manner provided in Article 23, paragraph (2) as the taxable sales of a split-off parent corporation in the period corresponding to the base period for that business year of that split-off subsidiary corporation (where there are two or more split-off parent corporations, that amount pertaining to any one of the split-off parent corporations) exceeds 50 million yen: the taxable periods included in that business year of that split-off subsidiary corporation;

where a corporate split, etc. (excluding one involving two or more split-off parent corporations; the same applies in the following item) took place on or before the day two days before the day one year before the first day of that business year of a split-off subsidiary corporation, and on the last day of the base period for that business year that split-off subsidiary corporation falls under the specified requirement (meaning the specified requirement prescribed in Article 12, paragraph (3) of the Act; the same applies in the following item), and the total of the amount set out in (a) and the amount set out in (b) exceeds 50 million yen: the taxable periods included in that business year of that split-off subsidiary corporation:

the amount calculated in the manner provided in Article 23, paragraph (3) as the taxable sales of that split-off subsidiary corporation in the base period for that business year;

the amount calculated in the manner provided in Article 23, paragraph (4) as the taxable sales of the split-off parent corporation in the period corresponding to the base period referred to in (a);

where a corporate split, etc. took place on or before the day two days before the day one year before the first day of that business year of a split-off parent corporation, and on the last day of the base period for that business year a split-off subsidiary corporation falls under the specified requirement, and the total of the taxable sales in the base period (meaning the taxable sales in the base period prescribed in Article 9, paragraph (1) of the Act) for that business year of that split-off parent corporation and the amount calculated in the manner provided in Article 23, paragraph (5) as the taxable sales of that split-off subsidiary corporation in the period corresponding to that base period exceeds 50 million yen: the taxable periods included in that business year of that split-off parent corporation.

The taxable period that includes the day on which a business was commenced, as prescribed in Article 37, paragraph (1) of the Act, and other taxable periods specified by Cabinet Order are the following taxable periods:

the taxable period that includes the day on which a business operator commenced a business pertaining to taxable transfers, etc. of assets in Japan;

the taxable period that includes the day on which the inheritance took place (limited to a taxable period for which the obligation to pay consumption tax is not exempted under Article 10, paragraph (1) of the Act) in the case where an individual business operator has succeeded, through inheritance, to the business of a decedent that had been subject to the application of Article 37, paragraph (1) of the Act;

the taxable period that includes the day on which the merger took place (limited to a taxable period for which the obligation to pay consumption tax is not exempted under Article 11, paragraph (1) of the Act) in the case where a corporation has succeeded, through a merger (excluding the case where a corporation is established through the merger), to the business of a merged corporation that had been subject to the application of Article 37, paragraph (1) of the Act;

the taxable period that includes the day on which the absorption-type company split took place (limited to a taxable period for which the obligation to pay consumption tax is not exempted under Article 12, paragraph (5) of the Act) in the case where a corporation has succeeded, through an absorption-type company split, to the business of a splitting corporation that had been subject to the application of Article 37, paragraph (1) of the Act.

The taxable period that includes the day on which a business was commenced and other taxable periods specified by Cabinet Order as prescribed in the proviso to Article 37, paragraph (3) of the Act are the taxable periods set out in the items of the preceding paragraph.