Order for Enforcement of the Income Tax Act

A Resident who seeks to newly receive the application of Article 54, paragraph (1) (Reserves for Severance Packages) of the Act must submit, to the competent district director with jurisdiction over the place for tax payment by the Filing Deadline for income tax for that year, copies of the retirement allowance rules as of December 31 of the year preceding that year (where no retirement allowance rules were established on that day, the retirement allowance rules first established thereafter) and, where the retirement allowance rules have been amended by December 31 of that year (or, if the Resident dies in the middle of the year, by the time of death), of all the retirement allowance rules after the amendment.

A Resident to whom Article 54, paragraph (1) of the Act has applied and who seeks to continue to have that paragraph applied thereafter must, promptly, when a change has arisen in the matters concerning the payment of severance packages in the retirement allowance rules or collective agreement, or when a new collective agreement concerning the payment of severance packages has been concluded, submit to the competent district director with jurisdiction over the place for tax payment a document stating that fact and the matters concerning the payment of severance packages in the amended retirement allowance rules or collective agreement or the matters concerning the payment of severance packages in the newly concluded collective agreement.

Where, after the effect of a collective agreement on the payment of severance packages has ceased, no new collective agreement on the payment of severance packages has been concluded, the provisions of Article 54 (Reserves for Severance Packages) of the Act and of Article 153 through the preceding Article apply for six months after the effect ceased, deeming that former collective agreement to remain in effect.

The circumstances specified by Cabinet Order prescribed in Article 57, paragraph (1) (Special Provisions on Necessary Expenses If Relatives Work Exclusively for a Resident) of the Act are the following circumstances:

the period during which a relative employed only by a blue-return filer prescribed in Article 57, paragraph (1) of the Act performed labor, the nature of the labor, and the extent to which it was provided;

the circumstances of the salaries received by other employees engaged in the business, and the circumstances of the salaries received by persons engaged in a business of the same kind as that business and of similar scale;

the type and scale of the business and the state of its profits.

A Resident who has submitted the document prescribed in Article 57, paragraph (2) of the Act must, when changing the matters stated in that document, submit to the competent district director with jurisdiction over the place for tax payment, as provided by Ministry of Finance Order, a document stating that fact and other necessary matters.

The determination of whether a spouse or other relative who shares livelihood with a Resident prescribed in Article 57, paragraph (1) or (3) (Special Provisions on Necessary Expenses If Relatives Work Exclusively for a Resident) of the Act is exclusively engaged in the business that the Resident carries on as prescribed in those provisions is made according to whether the period of exclusive engagement in that business exceeds six months in the year; provided, however, that in the case of paragraph (1) of that Article, where the case falls under any of the following items, it suffices that the relative is exclusively engaged in that business for a period exceeding one-half of the period during which the relative is found to be able to engage in that business.

that business was not carried on throughout the year because of the commencement, closure or suspension of the business or the death of the Resident in the middle of the year, the seasonal nature of the business, or other reasons;

the person engaged in that business was unable to engage in it throughout the year as a relative sharing livelihood with the Resident because of death, long-term illness, marriage or other reasonable grounds.

In the case referred to in the preceding paragraph, where there is a period during which a relative prescribed in that paragraph is a person falling under any one of the following items, that period is not included in the period of exclusive engagement in the business prescribed in that paragraph.

a person who is a student or pupil of a school under Article 1 (Scope of Schools), Article 124 (Specialized Training Colleges) or Article 134, paragraph (1) (Miscellaneous Schools) of the School Education Act (excluding a person who attends classes at night and engages in that business mainly in the daytime, a person who attends classes in the daytime and engages in that business mainly at night, a student or pupil of a school under Article 124 or Article 134, paragraph (1) of that Act who does not attend regularly, and any other person found not to be prevented from engaging exclusively in that business);

a person who has another occupation (excluding a person whose time engaged in that occupation is short and any other person found not to be prevented from engaging exclusively in that business);

a person whose ability to engage in a business is significantly impaired by senility or other mental or physical disability.

The amount of timber income prescribed in Article 57, paragraph (3), item (ii) (Special Provisions on Necessary Expenses If Relatives Work Exclusively for a Resident) of the Act is the remainder prescribed in Article 32, paragraph (3) (Amount of Timber Income) of the Act.

For the application of the provisions of Article 57, paragraph (3), item (ii) of the Act where a Resident carries on a business that is to generate two or more of real property income, business income and timber income (limited to a business in which a relative employed only by the Resident prescribed in paragraph (3) of that Article is engaged), the amount set forth in item (ii) of that paragraph is calculated on the basis of the sum of the amount of real property income, amount of business income or amount of timber income prescribed in item (ii) of that paragraph pertaining to those businesses and the number of all those relatives employed only by the Resident engaged in those businesses.

Where a Resident carries on businesses that are to generate two or more of real property income, business income and timber income, and the same relative employed only by a blue-return filer or relative employed only by the Resident prescribed in Article 57, paragraph (1) or (3) (Special Provisions on Necessary Expenses If Relatives Work Exclusively for a Resident) of the Act engages in those businesses that are to generate two or more kinds of income, the amount that is included in necessary expenses under paragraph (1) of that Article in calculating the amount of real property income, amount of business income or amount of timber income pertaining to those businesses (hereinafter in this Article referred to as the "salary amount for a relative employed only by a blue-return filer") or the amount that is deemed to be necessary expenses under Article 57, paragraph (3) of the Act (hereinafter in this Article referred to as the "deduction for a relative employed only in the business") is the amount set forth in the relevant item below according to the following categories of cases:

where the extent to which the relative employed only by a blue-return filer or relative employed only by the Resident engaged in each of the businesses that are to generate those two or more kinds of income is clear: the amount calculated by apportioning the salary amount for a relative employed only by a blue-return filer or the deduction for a relative employed only in the business pertaining to that relative according to the extent to which the relative engaged in each business;

where the extent to which the relative employed only by a blue-return filer or relative employed only by the Resident engaged in each of the businesses that are to generate those two or more kinds of income is not clear: the amount calculated in accordance with the provisions of the preceding item, deeming that relative to have engaged equally in each business.

Where a Resident has, in any year, paid contributions to be applied to the funds, pertaining to the business, of a public interest corporation, etc. prescribed in Article 2, item (vi) (Definitions) of the Corporation Tax Act, or of a general incorporated association or general incorporated foundation, whose principal purpose is the business of compensating for specific losses or expenses such as losses due to fluctuations in the prices of agricultural and livestock products and the cost of relief where a fishing boat is in distress, which funds are used within a short period and have been designated by the Commissioner of the National Tax Agency as satisfying all of the following requirements, the amount expended is included in necessary expenses in calculating the amount of business income for the year that includes the day on which it was expended.

the amount of the contributions collected to be applied to the funds is appropriate in light of the content of the business;

where the amount of the funds comes to exceed the amount necessary for the business, measures such as suspending the collection of contributions are to be taken;

the funds are managed by an appropriate method in accordance with the purpose of the business.