Consumption Tax Act

In the case where a merger (excluding a merger in which a corporation is established through the merger; the same applies hereafter in this paragraph and the following paragraph) has taken place, if the amount calculated as provided by Cabinet Order as the taxable sales of a merged corporation in the period corresponding to the base period for the business year of the merging corporation that includes the day on which the merger took place (if there are two or more merged corporations, that amount pertaining to any one of the merged corporations) exceeds 10 million yen, the main clause of Article 9, paragraph (1) does not apply to taxable transfers, etc. of assets and specified taxable purchases during the period from the day on which that merger took place to the last day of the business year that includes the day on which that merger took place, in that business year (limited to a business year in which the taxable sales in the base period are 10 million yen or less) of that merging corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where a merger took place during the period from the day following the first day of the base period for the business year of a merging corporation to the day before the first day of that business year, if the total of the taxable sales of that merging corporation in the base period for that business year and the amount calculated as provided by Cabinet Order as the taxable sales of a merged corporation in the period corresponding to the base period for that business year of that merging corporation (if there are two or more merged corporations, the total of that amount pertaining to each merged corporation) exceeds 10 million yen, the main clause of Article 9, paragraph (1) does not apply to taxable transfers, etc. of assets and specified taxable purchases in that business year (limited to a business year in which the taxable sales in the base period are 10 million yen or less) of that merging corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where a merger (limited to a merger in which a corporation is established through the merger; the same applies hereafter in this paragraph and the following paragraph) has taken place, if any of the amounts calculated as provided by Cabinet Order as the taxable sales of the merged corporations in the period corresponding to the base period for the business year of the merging corporation that includes the day on which the merger took place exceeds 10 million yen, the main clause of Article 9, paragraph (1) does not apply to taxable transfers, etc. of assets and specified taxable purchases in the business year that includes the day on which that merger took place of that merging corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4)).

In the case where a merger took place during the period from the day two years before the first day of the business year of a merging corporation to the day before the first day of that business year, if the total of the taxable sales of that merging corporation in the base period for that business year (meaning the balance remaining after deducting the total tax-exclusive refunds, etc. of consideration for sales in the base period for the business year from the total amount of consideration for taxable transfers, etc. of assets in Japan during the base period for the business year; the same applies hereafter in this paragraph) and the total of the amounts calculated as provided by Cabinet Order as the taxable sales of each merged corporation in the period corresponding to the base period for that business year of that merging corporation (or, where that merging corporation has no taxable sales in the base period for that business year or in any other case specified by Cabinet Order, the amount specified by Cabinet Order) exceeds 10 million yen, the main clause of Article 9, paragraph (1) does not apply to taxable transfers, etc. of assets and specified taxable purchases in that business year (limited to a business year in which the taxable sales in the base period prescribed in Article 9, paragraph (1) are 10 million yen or less) of that merging corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where a corporate split, etc. has taken place, if the amount calculated as provided by Cabinet Order as the taxable sales of the corporation that carried out that corporate split, etc. (hereinafter in this paragraph through paragraph (4) referred to as a "split-off parent corporation") in the period corresponding to the base period for the business year that includes the day on which the corporate split, etc. took place of the corporation established through that corporate split, etc. or that received the transfer of assets through it (hereinafter in this paragraph through paragraph (4) referred to as a "split-off subsidiary corporation") (if there are two or more split-off parent corporations, that amount pertaining to any one of the split-off parent corporations) exceeds 10 million yen, the main clause of Article 9, paragraph (1) does not apply to taxable transfers, etc. of assets and specified taxable purchases during the period from the day on which that corporate split, etc. took place to the last day of the business year that includes the day on which that corporate split, etc. took place, of that split-off subsidiary corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4)).

In the case where a corporate split, etc. took place during the period from the day before the day one year before the first day of the business year of a split-off subsidiary corporation to the day before the first day of that business year, if the amount calculated as provided by Cabinet Order 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 (if there are two or more split-off parent corporations, that amount pertaining to any one of the split-off parent corporations) exceeds 10 million yen, the main clause of Article 9, paragraph (1) does not apply to taxable transfers, etc. of assets and specified taxable purchases in that business year of that split-off subsidiary corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where a corporate split, etc. (excluding one involving two or more split-off parent corporations; the same applies in the following paragraph) took place on or before the day two days before the day that is one year before the first day of the relevant business year of a split-off subsidiary corporation, and the split-off subsidiary corporation falls under the specified requirement (meaning a case where shares or capital contributions in a number or amount exceeding 50 percent of the total number or total amount of the issued shares or capital contributions of the split-off subsidiary corporation (excluding treasury shares or capital contributions held by that split-off subsidiary corporation) belong to the split-off parent corporation and persons having a special relationship specified by Cabinet Order with that split-off parent corporation, or any other case specified by Cabinet Order; the same applies in the following paragraph) on the last day of the base period of that business year, and the total of the amount calculated as provided by Cabinet Order as the taxable sales of that split-off subsidiary corporation in the base period of that business year and the amount calculated as provided by Cabinet Order as the taxable sales of that split-off parent corporation in the period corresponding to the base period of that business year of that split-off subsidiary corporation exceeds 10 million yen, the provisions of the main clause of Article 9, paragraph (1) do not apply to taxable transfers, etc. of assets and specified taxable purchases in that business year (limited to a business year in which the taxable sales in the base period prescribed in Article 9, paragraph (1) are 10 million yen or less) of that split-off subsidiary corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where a corporate split, etc. took place on or before the day two days before the day that is one year before the first day of the relevant business year of a split-off parent corporation, and a split-off subsidiary corporation falls under the specified requirement on the last day of the base period of that business year, and the total of the taxable sales of that split-off parent corporation in the base period of that business year and the amount calculated as provided by Cabinet Order as the taxable sales of that split-off subsidiary corporation in the period corresponding to the base period of that business year of that split-off parent corporation exceeds 10 million yen, the provisions of the main clause of Article 9, paragraph (1) do not apply to taxable transfers, etc. of assets and specified taxable purchases in that business year (limited to a business year in which the taxable sales in the base period are 10 million yen or less) of that split-off parent corporation (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where an absorption-type company split took place, if the amount calculated as provided by Cabinet Order as the taxable sales of the splitting corporation in the period corresponding to the base period of the business year of the successor corporation in a company split that includes the day on which the absorption-type company split took place (if there are two or more splitting corporations, that amount in relation to any one of the splitting corporations) exceeds 10 million yen, the provisions of the main clause of Article 9, paragraph (1) do not apply to taxable transfers, etc. of assets and specified taxable purchases during the period from the day on which the absorption-type company split took place to the last day of the business year that includes that day, in the business year that includes the day on which that absorption-type company split took place (limited to a business year in which the taxable sales in the base period are 10 million yen or less) of that successor corporation in a company split (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

In the case where an absorption-type company split took place during the period from the day before the day that is one year before the first day of the relevant business year of a successor corporation in a company split to the day before the first day of that business year, if the amount calculated as provided by Cabinet Order as the taxable sales of the splitting corporation in the period corresponding to the base period of that business year of that successor corporation in a company split (if there are two or more splitting corporations, that amount in relation to any one of the splitting corporations) exceeds 10 million yen, the provisions of the main clause of Article 9, paragraph (1) do not apply to taxable transfers, etc. of assets and specified taxable purchases in that business year (limited to a business year in which the taxable sales in the base period are 10 million yen or less) of that successor corporation in a company split (excluding one whose obligation to pay consumption tax is not exempted by the submission of a written notification under Article 9, paragraph (4), or under the provisions of Article 9-2, paragraph (1)).

The corporate split, etc. prescribed in paragraphs (1) through (4) means any of the following.

incorporation-type company split;

the establishment of a new corporation in the case where a corporation, in order to establish the new corporation, makes a contribution of assets it holds other than money (limited to a case where, at the time of the establishment of the new corporation, the corporation will hold all of the issued shares or capital contributions as a result of the contribution of those assets or other contribution for that establishment) and hands over all or part of its business to the corporation newly established through that contribution;

of the transfers of assets other than money under a contract in respect of an act set forth in Article 467, paragraph (1), item (v) (Approval of Transfers of Business) of the Companies Act (Act No. 86 of 2005), in the case where a corporation makes a monetary contribution in order to establish a new corporation and concludes that contract with the new corporation, those that satisfy the requirement that the corporation holds all of the issued shares at the time of the establishment of that new corporation or any other requirement specified by Cabinet Order.