Order for Enforcement of the Income Tax Act

The amount specified by Cabinet Order as prescribed in Article 67-3, paragraph (1) (Calculation of Amounts of Income Pertaining to Trusts) of the Act is to be the amount equivalent to the book value of the assets and liabilities belonging to the trust property referred to in that paragraph of the trust corporation prescribed in that paragraph, immediately before the time when the Trust Subject to Corporate Taxation referred to in that paragraph ceases to fall under the trust listed in Article 2, item (xxix)-2, (b) (Definitions) of the Corporation Tax Act.

The shares specified by Cabinet Order as prescribed in Article 67-3, paragraph (4), item (ii) of the Act are the specified restricted shares prescribed in Article 84, paragraph (1) (Value, etc. of Restricted Shares).

The individuals who have a special relationship specified by Cabinet Order as prescribed in Article 67-3, paragraph (4), item (iii) of the Act are the following persons:

a relative of the officers or similar persons prescribed in Article 67-3, paragraph (4), item (iii) of the Act (hereinafter in this paragraph and in item (i) of the following paragraph referred to as "officers or similar persons");

a person who has not filed a notification of marriage with the officers or similar persons but is in circumstances equivalent to a de facto marital relationship with them;

an employee of the officers or similar persons;

a person other than those set out in the preceding three items who maintains a livelihood by means of money or other assets received from the officers or similar persons; or

a relative of the persons set out in the preceding three items who shares the same livelihood with those persons.

The corporations that have a special relationship specified by Cabinet Order as prescribed in Article 67-3, paragraph (4), item (iii) of the Act are the following corporations:

a corporation in the case where officers or similar persons (including individuals who have a special relationship prescribed in the preceding paragraph with them; hereinafter in this paragraph referred to as "covered officers, etc.") control that corporation;

another corporation in the case where covered officers, etc. and a corporation that has a special relationship prescribed in the preceding item with them control that other corporation; or

another corporation in the case where covered officers, etc. and a corporation that has a special relationship prescribed in the preceding two items with them control that other corporation.

The provisions of Article 4, paragraph (3) (Scope of Related Persons of a Family Company) of the Order for the Enforcement of the Corporation Tax Act apply mutatis mutandis to the case of controlling the corporation prescribed in item (i) of the preceding paragraph and the case of controlling the other corporation prescribed in item (ii) or (iii) of that paragraph.

Where a Resident referred to in Article 67-3, paragraph (1) of the Act is deemed to have taken over assets and liabilities pursuant to the provisions of that paragraph, the Resident's amounts of Income in Each Class for each year are to be calculated by deeming the assets belonging to the trust property referred to in that paragraph to have been acquired at the amount equivalent to the book value prescribed in paragraph (1) immediately before the time of ceasing to fall under the trust as prescribed in that paragraph. In this case, the day on which the trust corporation prescribed in that paragraph of the Trust Subject to Corporate Taxation referred to in paragraph (1) of that Article acquired those assets is deemed to be the day on which the Resident acquired those assets.

Where a Resident referred to in Article 67-3, paragraph (1) of the Act is deemed to have taken over assets and liabilities pursuant to the provisions of that paragraph, the amount of any loss arising from that takeover is deemed not to have arisen in calculating the Resident's amounts of Income in Each Class for each year.

The amount of profit prescribed in Article 67-3, paragraph (2) of the Act is to be the amount equivalent to the portion by which the total book value, prescribed in paragraph (1), of the assets prescribed in that paragraph exceeds the total book value, prescribed in that paragraph, of the liabilities prescribed in that paragraph, and the amount of loss prescribed in the preceding paragraph is to be the amount equivalent to the portion by which the total book value of those assets falls short of the total book value of those liabilities.

The following apply to the application of Article 67-3, paragraphs (5) through (8) of the Act where the right relating to a trust prescribed in paragraph (5) of that Article is not the whole of the rights relating to that trust.

if there is one beneficiary, etc. of that trust (meaning the beneficiary or deemed beneficiary prescribed in Article 67-3, paragraph (9) of the Act; the same applies hereinafter in this paragraph), that beneficiary, etc. is deemed to hold the whole of the rights relating to that trust.

if there are two or more beneficiaries, etc. of that trust, each beneficiary, etc. is deemed to hold the whole of the rights relating to that trust in accordance with the content of the rights that the beneficiary, etc. holds.