Order for Enforcement of the Income Tax Act

The lease of assets specified by Cabinet Order as prescribed in Article 67-2, paragraph (3) (Calculating Amounts of Income from Lease Arrangements) of the Act is to be a lease of land to which the provisions of Article 79 (Acts Deemed to Be Transfers of Assets) apply and a lease of land that falls under none of the following requirements (including requirements equivalent to these).

that, under the contract for the lease of the land, the land is to be transferred to the lessee under the lease without compensation or for a nominal consideration, at the end of the lease period prescribed in the contract (hereinafter in this Article referred to as the "lease period") or during the lease period;

that the lessee under the lease of the land is granted a right to purchase the land at a significantly favorable price at the end of the lease period or during the lease period.

Where, with regard to a lease of assets, the total amount of rent paid by the lessee during the lease period (limited to the period during which the contract for the lease of the assets is stipulated as not subject to cancellation) exceeds an amount equivalent to approximately 90 percent of the value ordinarily required for the acquisition of the assets (including the amount of expenses required to put the assets to use for business), the lease of the assets is to be deemed to fall under the case where the lessee is to substantially bear the expenses arising from the use of the assets as referred to in Article 67-2, paragraph (3), item (ii) of the Act.