Order for Enforcement of the Income Tax Act

The calculation of the amount of miscellaneous income pertaining to an annuity for a Resident who receives payment of the annuity under a casualty insurance policy or similar contract (meaning insurance policies set out in Article 76, paragraph (6), item (iv) (Life Insurance Premium Deduction) of the Act other than life insurance contracts, contracts set out in the items of Article 77, paragraph (2) (Earthquake Insurance Premium Deduction) of the Act, and contracts set out in the items of Article 326, paragraph (2) (excluding item (ii)) (Withholding on Annuities Based on Life Insurance Contracts, etc.); the same applies hereinafter in this paragraph), for the year in which the Resident receives payment thereof, is as follows:

The amount of surplus distributed or rebate received on or after the date of commencement of payment of that annuity under the casualty insurance policy or similar contract that forms the basis of payment of that annuity is to be included in the gross revenue pertaining to miscellaneous income for that year;

The amount calculated by multiplying the amount of that annuity received in that year by the ratio of the amount set out in (b) to the amount set out in (a) is to be included in necessary expenses in calculating the amount of miscellaneous income for that year;

The amount prescribed respectively in the following for the following categories of annuity:

Annuities for which the total amount payable is fixed on the date of commencement of payment: that total amount payable;

Annuities for which the total amount payable is not fixed on the date of commencement of payment: the amount calculated, as provided by Ministry of Finance Order, as the estimated total amount payable according to the expected payment period;

The total amount of insurance premiums or installments pertaining to that casualty insurance policy or similar contract;

The ratio prescribed in the preceding item is to be calculated to two decimal places, rounding up any digits at the third decimal place or below.

The calculation of the amount of occasional income pertaining to a maturity refund, etc. for a Resident who receives payment of the maturity refund, etc. under a casualty insurance policy or similar contract (meaning the casualty insurance policy or similar contract prescribed in the preceding paragraph and an insurance policy concluded by a small amount and short term insurer prescribed in Article 2, paragraph (18) (Definitions) of the Insurance Business Act that is similar to an insurance policy concluded by a casualty insurance company prescribed in paragraph (4) of that Article or a foreign casualty insurance company, etc. prescribed in paragraph (9) of that Article (referred to as a "casualty insurance policy" in paragraph (4)); the same applies hereinafter in this paragraph and the following paragraph), for the year in which the Resident receives payment thereof, is as follows:

The amount of surplus distributed or rebate received under the casualty insurance policy or similar contract that forms the basis of payment of that maturity refund, etc., which is received together with that maturity refund, etc. or after receipt of payment of that maturity refund, etc., is to be included in the gross revenue pertaining to occasional income for that year;

The total amount of insurance premiums or installments pertaining to that casualty insurance policy or similar contract is to be included in the amount expended in calculating the amount of occasional income for that year.

The total amount of insurance premiums or installments prescribed in the preceding two paragraphs is to be calculated by deducting the following amounts from the total amount of insurance premiums or installments pertaining to that casualty insurance policy or similar contract:

Of the insurance premiums or installments pertaining to that casualty insurance policy or similar contract that an individual carrying on a business or a corporation has expended for employees of that individual in relation to that business or employees of that corporation, and that are included in necessary expenses or deductible expenses in calculating the amount of real property income, the amount of business income or the amount of timber income of that individual in relation to that business, or the amount of income for each business year of that corporation, the amount of those not included in the revenue pertaining to salary income of those employees;

The amount of surplus or rebate in the case where, before the date of commencement of payment of that annuity or before the date of payment of that maturity refund, etc., a distribution of surplus or a rebate was received under that casualty insurance policy or similar contract, or surplus distributed or rebate received under that casualty insurance policy or similar contract was applied to the payment of those insurance premiums or installments.

The maturity refund, etc. prescribed in the preceding two paragraphs means the following:

Maturity refunds and cancellation refunds received under an insurance policy prescribed in paragraph (1), a contract set out in Article 77, paragraph (2), item (i) of the Act or a contract set out in Article 207, item (iii) of the Act, being a policy or contract that falls under a casualty insurance policy and for which a special agreement to pay a maturity refund after the expiry of the insurance period has been made (excluding maturity refunds paid after the expiry of the insurance period of a casualty insurance policy or similar contract prescribed in paragraph (1) as an annuity under that casualty insurance policy or similar contract);

Mutual aid benefits (limited to those arising from the expiry of the period during the survival of the building or movables) and cancellation refunds received under a contract set out in Article 77, paragraph (2), item (ii) of the Act or a contract set out in Article 207, item (iii) of the Act, being a contract other than a casualty insurance policy that concerns mutual aid in which the mutual aid event is the survival of a building or movables throughout the mutual aid period;

Refunds received under an insurance policy, of which a special agreement to pay a refund has been made, that is concluded by a small amount and short term insurer prescribed in Article 2, paragraph (18) of the Insurance Business Act and is similar to casualty insurance policies.