Order for Enforcement of the Income Tax Act

Where, accompanying the establishment of a land leasehold right or servitude prescribed in paragraph (1) of the preceding Article (including a sublease of land pertaining to that land leasehold right and other acts of having another person use that land; the same applies hereinafter in this Article), a person receives a loan of money on terms particularly favorable compared with the terms of an ordinary loan of money (including, regardless of the name under which it is made, the delivery of money having a similar economic nature; the same applies hereinafter in this Article) or other special economic benefit, paragraphs (1) and (2) of the preceding Article apply by deeming the amount obtained by adding the benefit received through that loan of money compared with a case of receiving a loan of money on ordinary terms, and the amount of other such special economic benefit, to the amount of consideration prescribed in paragraph (1) or (2) of the preceding Article to be the amount received prescribed in those provisions.

In the case referred to in the preceding paragraph, the amount of the benefit received through the loan of money received, compared with a case of receiving a loan of money on ordinary terms, is to be the amount obtained by deducting from the amount of that loan the amount equivalent to the present value, calculated by the method of compound interest at a rate equivalent to five-tenths of the ordinary interest rate for that amount (where there is an agreement to attach interest to the amount of that loan, the rate obtained by deducting the interest rate pertaining to that interest) (where the period of receiving that loan of money is agreed to be a period markedly shorter than the duration of the right pertaining to the establishment referred to in that paragraph, and there is a clear fact sufficient to presume that the period of receiving that loan will be renewed in the future in light of an agreement to hold the land rent unchanged over a long period, the condition of buildings or structures existing on the land pertaining to that right, the terms concerning land rent, and other matters, the amount equivalent to the present value calculated by that method on the basis of the period over which that loan of money is reasonably presumed to continue, judging from the benefit received by the person granted the establishment of the land leasehold right or servitude through that establishment).

The assets specified by Cabinet Order prescribed in Article 33, paragraph (2), item (i) (Capital Gains) of the Act are the following assets:

assets equivalent to the assets set out in the items of Article 3 (Scope of Inventory) relating to business that is to generate real property income, timber income, or miscellaneous income;

Depreciable Assets that fall under Article 138, paragraph (1) (Inclusion of the Acquisition Price of Small-Value Depreciable Assets in Necessary Expenses) (excluding, among those for which the acquisition price prescribed in that paragraph is less than 100,000 yen, those that are fundamentally important in light of the nature of the person's business);

Depreciable Assets to which Article 139, paragraph (1) (Inclusion of Lump-sum Depreciable Assets in Necessary Expenses) applies (excluding those that are fundamentally important in light of the nature of the person's business).

The income specified by Cabinet Order prescribed in Article 33, paragraph (3), item (i) (Short-Term Capital Gains) of the Act is the following income:

income from the transfer of patent rights, utility model rights, and other industrial property rights resulting from one's own research, breeder's rights resulting from one's own breeding, copyrights relating to one's own works, and mining rights relating to mineral deposits discovered through one's own exploration;

income from the extinction of the spouse's right of residence acquired through the inheritance or bequest set out in Article 60, paragraph (1), item (i) (Acquisition Costs of Assets Acquired as Gifts) of the Act, being the spouse's right of residence set out in paragraph (3), item (i) of that Article (limited to extinction after the day on which five years have elapsed from the day that would be regarded under paragraph (1) of that Article as the day on which the building that is the object of that spouse's right of residence was acquired, if that building had been transferred at the time of acquiring that spouse's right of residence);

income from the extinction of the right to use, based on the spouse's right of residence, the land (including rights existing on land; the same applies hereinafter in this item) used as the site of the building that is the object of that spouse's right of residence, being the right set out in Article 60, paragraph (3), item (ii) of the Act that was acquired through the inheritance or bequest set out in paragraph (1), item (i) of that Article (limited to extinction after the day on which five years have elapsed from the day that would be regarded under paragraph (1) of that Article as the day on which the land was acquired, if that land had been transferred at the time of acquiring that right).

The annuities specified by Cabinet Order prescribed in Article 35, paragraph (3), item (i) (Definition of Public Pension or Retirement Package) of the Act (including similar benefits) are the following annuities:

an annuity based on the provisions of the Mariners Insurance Act prior to the amendment by the provisions of Article 5 (Partial Amendment of the Mariners Insurance Act) of the Act Partially Amending the National Pension Act, etc. (Act No. 34 of 1985);

an annuity paid by a mutual aid association prescribed in Article 28 (Members of Designated Mutual Aid Associations) of the Supplementary Provisions of the Employees' Pension Insurance Act;

an annuity based on the provisions of Article 41, paragraph (1) (Special Provisions for Persons with Periods Covered by Additional Costs, etc.) or Article 65, paragraph (1) (Special Provisions for Persons with Periods Covered by Additional Costs, etc.) of the Supplementary Provisions of the Act Partially Amending the Employees' Pension Insurance Act, etc. to Unify, etc. the Employees' Pension Systems (Act No. 63 of 2012; hereinafter in this paragraph referred to as the "Pension Unification Act");

an annuity based on the provisions of the pre-amendment National Public Officers Mutual Aid Association Act referred to in Article 36, paragraph (1) (Transitional Measures for the Amount of Occupational Addition under the Pre-amendment National Public Officers Mutual Aid Association Act) of the Supplementary Provisions of the Pension Unification Act that remain in force pursuant to the provisions of that paragraph;

an annuity based on the provisions of the pre-amendment National Public Officers Mutual Aid Association Act referred to in Article 37, paragraph (1) (Benefits, etc. under the Pre-amendment National Public Officers Mutual Aid Association Act) of the Supplementary Provisions of the Pension Unification Act that remain in force pursuant to the provisions of that paragraph;

an annuity based on the provisions of Article 3, paragraph (1) or (2) (Succession to the Rights and Obligations of the Former Army Mutual Aid Association and Mutual Aid Society), Article 4, paragraph (1) (Payment of Annuities Relating to Overseas Mutual Aid Associations), or Article 7-2, paragraph (1) (Payment of Annuities to Former Members of Mutual Aid Associations) of the Act on Special Measures concerning Beneficiaries of Pension of Mutual Aid Association Established under Former Ordinances (Act No. 256 of 1950);

an annuity based on the Supplementary Provisions of the Act Partially Amending the Local Public Officers, etc. Mutual Aid Association Act (Act No. 56 of 2011);

an annuity based on the provisions of the pre-amendment Local Public Officers, etc. Mutual Aid Association Act referred to in Article 60, paragraph (1) (Transitional Measures for the Amount of Occupational Addition under the Pre-amendment Local Public Officers, etc. Mutual Aid Association Act) of the Supplementary Provisions of the Pension Unification Act that remain in force pursuant to the provisions of that paragraph;

an annuity based on the provisions of the pre-amendment Local Public Officers, etc. Mutual Aid Association Act referred to in Article 61, paragraph (1) (Benefits, etc. under the Pre-amendment Local Public Officers, etc. Mutual Aid Association Act) of the Supplementary Provisions of the Pension Unification Act that remain in force pursuant to the provisions of that paragraph;

an annuity based on the provisions of the pre-amendment Private School Personnel Mutual Aid Association Act referred to in Article 78, paragraph (1) (Transitional Measures for the Amount of Occupational Addition under the Pre-amendment Private School Personnel Mutual Aid Association Act) of the Supplementary Provisions of the Pension Unification Act that remain in force pursuant to the provisions of that paragraph;

an annuity based on the provisions of the pre-amendment Private School Personnel Mutual Aid Association Act referred to in Article 79 (Benefits under the Pre-amendment Private School Personnel Mutual Aid Association Act) of the Supplementary Provisions of the Pension Unification Act that remain in force pursuant to the provisions of that Article;

an annuity based on the provisions of the Mutual Aid Association Act for Employees of Agricultural, Forestry and Fishery Organizations (Act No. 99 of 1958) prior to the abolition by the provisions of Article 1 (Abolition of the Mutual Aid Association Act for Employees of Agricultural, Forestry and Fishery Organizations, etc.) of the Act on the Abolition, etc. of the Mutual Aid Association Act for Employees of Agricultural, Forestry and Fishery Organizations, etc. in Order to Integrate the Employees' Pension Insurance System and the Mutual Aid Association System for Employees of Agricultural, Forestry and Fishery Organizations;

an annuity based on the provisions of Chapter IX (Employees' Pension Funds and the Pension Fund Association) of the former Employees' Pension Insurance Act.

The annuities specified by Cabinet Order prescribed in Article 35, paragraph (3), item (iii) of the Act (including similar benefits) are the following benefits:

annuities paid under the systems prescribed in Article 72, paragraph (3), item (i) or (ix) (Lump-Sum Payments Deemed to Constitute Severance Pay and Other Such Compensation) (including similar benefits);

installment retirement allowances paid by the method of installment payments prescribed in Article 12, paragraph (1) (Installment Payment of Retirement Allowances, etc.) of the Small and Medium Sized Enterprise Retirement Allowance Cooperative Act, as prescribed in paragraph (5) of that Article;

installment mutual aid benefits paid, under a small enterprise mutual aid contract prescribed in Article 72, paragraph (3), item (iii), (a), by the method of installment payments prescribed in Article 9-3, paragraph (1) (Installment Payment of Mutual Aid Benefits, etc.) of the Small Enterprise Mutual Relief Projects Act, as prescribed in paragraph (5) of that Article;

a retirement pension received under a qualified retirement pension contract prescribed in Article 20, paragraph (3) (Special Provisions on Corporation Tax on Retirement Pension Funds) of the Supplementary Provisions of the Corporation Tax Act (where, out of the contributions or insurance premiums paid in under that contract, there is an amount borne by the person who performed the service that gave rise to the payment of that retirement pension, limited to the part equivalent to the amount obtained by deducting, from the amount of that retirement pension paid in that year, the amount calculated by multiplying the amount of that retirement pension (excluding the part equivalent to the amount of surplus distributed under that contract on or after the day on which payment of that annuity commenced) by the ratio calculated for that retirement pension in accordance with the provisions of paragraph (1) of the following Article);

An annuity paid pursuant to the provisions listed in Article 72, paragraph (3), item (v), (a) through (c) (limited, where the contributions made under the plan rules prescribed in that item include an amount borne by a member prescribed in Article 25, paragraph (1) (Members) of the Defined-Benefit Corporate Pension Act (including a person who was a member prescribed in that paragraph) to whom that annuity is paid, to the portion equivalent to the amount obtained by deducting, from the amount of that annuity paid in that year, the amount calculated by multiplying the amount of that annuity (excluding the amount of the portion equivalent to the amount of surplus distributed under those plan rules on or after the day on which payment of that annuity starts) by the ratio calculated in accordance with the provisions of paragraph (1) of the following Article);

An annuity paid as the old-age benefit listed in Article 28, item (i) (Types of Benefits) of the Defined Contribution Pension Act (including as applied mutatis mutandis pursuant to Article 73 (Application Mutatis Mutandis of Provisions Pertaining to Corporate-Type Pension Plans) of that Act) under the corporate-type pension plan rules prescribed in Article 4, paragraph (3) (Standards for Approval) of that Act or the individual-type pension plan rules prescribed in Article 56, paragraph (3) (Standards for Approval) of that Act.

The benefits listed in item (i) of the preceding paragraph are not to include the benefits listed in the items of Article 76, paragraph (1) (Lump-Sum Payments Based on Retirement Allowance Mutual Aid Systems, etc. That Are Not Deemed to Constitute Severance Pay or Other Such Compensation) (limited to those that fall under annuities), and the retirement pension listed in item (iv) of the preceding paragraph is not to include the benefits listed in the items of Article 76, paragraph (2) (limited to those that fall under retirement pension).

The amount paid as the benefits prescribed in the preceding paragraph is to be the revenue pertaining to miscellaneous income other than the miscellaneous income pertaining to a public pension or retirement package prescribed in Article 35, paragraph (3) of the Act.