Order for Enforcement of the Income Tax Act

The Domestic Corporations specified by Cabinet Order prescribed in Article 177, paragraph (1) (Special Provisions on Taxation of Dividends and Similar Income Related to Shares, etc. of Wholly Owned Subsidiaries) of the Act are to be an authorized community association prescribed in Article 260-2, paragraph (7) (Community Associations) of the Local Autonomy Act, an incorporated management association prescribed in Article 47, paragraph (2) (Establishment) of the Act on Building Unit Ownership (Act No. 69 of 1962) and an incorporated housing complex management association prescribed in that paragraph as it is deemed to be replaced pursuant to the provisions of Article 66 (Application Mutatis Mutandis of Provisions Concerning Unit Ownership in a Building) of that Act, a political party, etc. that is a corporation prescribed in Article 7-2, paragraph (1) (Registration of Changes) of the Act on Granting of Juridical Personality to Political Party Receiving Political Party Grants (Act No. 106 of 1994), a disaster control district improvement project association prescribed in Article 133, paragraph (1) (Juridical Personality) of the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts (Act No. 49 of 1997), a specified non-profit corporation prescribed in Article 2, paragraph (2) (Definitions) of the Act on Promotion of Specified Non-profit Activities, and a condominium regeneration association prescribed in Article 5, paragraph (1) (Implementation of Condominium Regeneration Project) of the Act on Facilitation of the Regeneration, etc. of Condominiums, a condominium sale association prescribed in Article 109 (Implementation of Condominium Sale Project) of that Act, a condominium demolition association prescribed in Article 163-2 (Implementation of Condominium Demolition Project) of that Act, and a site division association prescribed in Article 164 (Implementation of Site Division Project) of that Act.

The cases specified by Cabinet Order prescribed in Article 177, paragraph (2) of the Act are cases where a Domestic Corporation prescribed in paragraph (1) of that Article holds shares or similar interests prescribed in that paragraph exceeding one-third of the total number or total amount of the issued shares or capital contributions (excluding own shares or capital contributions held by the other Domestic Corporation) of the other Domestic Corporation prescribed in paragraph (2) of that Article (hereinafter in this paragraph referred to as the "other Domestic Corporation") as of the base date, etc. (meaning the base date, etc. prescribed in Article 22, paragraph (1) (Scope of Related Corporation Shares, etc.) of the Order for the Enforcement of the Corporation Tax Act) pertaining to the amount of dividends and similar income prescribed in paragraph (2) of that Article that the Domestic Corporation receives from the other Domestic Corporation.

The domestic source income specified by Cabinet Order prescribed in Article 178 (Tax Base for a Foreign Corporation's Income Taxes) of the Act is to be the following domestic source income:

a consideration listed in Article 161, paragraph (1), item (vi) (Domestic Source Income) of the Act for the provision of the services of motion picture or theater actors, musicians and any other entertainers, or professional athletes, which is paid by many and unspecified persons;

a consideration listed in Article 161, paragraph (1), item (vii) of the Act for the land or any right on land or a house (hereinafter referred to as "land or house, etc." in this item) held by a Foreign Corporation, which is paid by an individual who has leased the land or house, etc. for the purpose of using it as the individual's own residence or the relative's residence.

The requirements specified by Cabinet Order prescribed in Article 180, paragraph (1) (Special Provisions on Taxation of Domestic Source Income Received by Foreign Corporations With a Permanent Establishment) of the Act are to be the following requirements:

the Foreign Corporation has submitted a written notice pursuant to the provisions of Article 149, paragraph (1) or paragraph (2) (Notification of Becoming a Foreign Ordinary Corporation) or Article 150, paragraph (4) or paragraph (5) (Notification of Commencement, etc. of Profit-Making Business by Public Interest Corporations, etc. or Associations or Foundations without Juridical Personality) of the Corporation Tax Act;

where the Foreign Corporation is one that is to make a registration pursuant to the provisions of Article 933, paragraph (1) (Registration of a Foreign Company) of the Companies Act or Article 37, paragraph (1) (Registration of Foreign Corporations) of the Civil Code, the Foreign Corporation has made the registration (in the case of a Foreign Corporation that has made a registration pursuant to the provisions of Article 933, paragraph (1) of the Companies Act and that has a permanent establishment (limited to one listed in Article 2, paragraph (1), item (viii)-4, (a) (Definitions) of the Act, or one that is provided to be a permanent establishment in a convention prescribed in the proviso to that item and that corresponds to one listed in (a) of that item), the Foreign Corporation has made the registration with regard to its business office prescribed in Article 933, paragraph (1), item (ii) of the Companies Act);

the covered domestic source income prescribed in Article 180, paragraph (1) of the Act for which the Foreign Corporation seeks the application of the provisions of Article 180, paragraph (1) of the Act is included in the scope of income on which corporation tax is imposed pursuant to the provisions of laws and regulations concerning the corporation tax (including conventions prescribed in the proviso to Article 2, paragraph (1), item (viii)-4 of the Act);

the foreign corporation has never evaded income taxes or corporation taxes by deceit or other wrongful acts;

where, for the purpose of seeking the application of the provisions of Article 180, paragraph (1) of the Act, the Foreign Corporation presents a certificate set forth in the same paragraph to the payer of covered domestic source income prescribed in the same paragraph, the Foreign Corporation is expected to record in books, without fail, the payer's name and domicile, office, place of business or any other place of payment of the relevant covered domestic source income, and the date on which the certificate is presented.

A corporation that wishes to obtain a certificate set forth in Article 180, paragraph (1) (Special Provisions on Taxation of Domestic Source Income Received by Foreign Corporations With a Permanent Establishment) of the Act must submit a written application stating the following matters to the competent district director with jurisdiction over the place for tax payment concerning corporation tax:

the corporation's name, the location of its head office or principal office, and corporate number;

the name and location of the office, place of business or any other place equivalent thereto of the corporation prescribed in Article 17, item (i) (Place for Tax Payment for Foreign Corporations) of the Corporation Tax Act (if there are two or more of these, the principal one; referred to as the "office, etc. at the place for tax payment" in paragraph (1), item (i) of the following Article), and the name of the person representative of or any other person responsible for that office, etc.;

the date on which the written notice prescribed in item (i) of the preceding Article has been submitted and the date on which the registration prescribed in item (ii) of the same Article has been made (in the case of a corporation that is unable to make the registration, the detailed statement of the reasons why it is unable to do so);

the outline of the circumstances where the corporation satisfies the requirement listed in item (iii) of the preceding Article;

the statement that the corporation will keep the records set forth in item (v) of the preceding Article without fail;

where the contents of the business currently conducted by the corporation through a permanent establishment are different from the contents of that business as of the time when the written notice was submitted pursuant to the provisions of item (i) of the preceding Article, the outline of the business currently conducted;

the name of the payer of the principal one of the covered domestic source income for which the corporation seeks the application of the provisions of Article 180, paragraph (1) of the Act by way of the certificate and which is prescribed in that paragraph, the payer's domicile, office, place of business or any other place of payment of the covered domestic source income and the recipient of the payment, as well as the type of the covered domestic source income and the period during which payment of the covered domestic source income is expected;

the circumstances where the domestic source income for which the corporation seeks the application of the provisions of Article 180, paragraph (1) of the Act by way of the certificate falls under the covered domestic source income of the corporation prescribed in that paragraph;

other matters useful for reference purposes.

Where a written application set forth in the preceding paragraph has been submitted, the competent district director set forth in the same paragraph is to, when finding that the corporation that has submitted the written application satisfies the requirements specified in the items of the preceding Article, grant a certificate set forth in the same paragraph.

The payer of the covered domestic source income prescribed in Article 180, paragraph (1) of the Act to whom a Foreign Corporation having a permanent establishment has presented a certificate set forth in paragraph (1) must keep books with regard to the payment of the covered domestic source income to that Foreign Corporation, and state in the books the name of that Foreign Corporation and the validity period of the certificate set forth in Article 180, paragraph (1) of the Act.

A corporation that has obtained a certificate set forth in Article 180, paragraph (1) (Special Provisions on Taxation of Domestic Source Income Received by Foreign Corporations With a Permanent Establishment) of the Act must, in the case prescribed in Article 180, paragraph (2) of the Act, attach the certificate to a written notice stating the following matters, submit these to the competent district director with jurisdiction over the place for tax payment concerning corporation tax of the corporation, and notify the payer of domestic source income to whom the corporation has presented the certificate to that effect without delay:

the name and location of the corporation's office, etc. at the place for tax payment, and the name of the person representative of or any other person responsible for that office, etc.;

the detailed statement of the circumstances where the corporation has ceased to satisfy the requirements listed in the items of Article 304 (Requirements Allowing the Special Provisions on Taxation to Be Applied to a Foreign Corporation) or ceased to have a permanent establishment;

the name of the payer of domestic source income to whom the corporation has presented the certificate, and the payer's domicile, office, place of business or any other place of payment of the relevant domestic source income;

other matters useful for reference purposes.

The corporation prescribed in the preceding paragraph must, where there has been any change to the matters listed in paragraph (1), item (i) or (ii) of the preceding Article that are stated in the written application set forth in that paragraph pertaining to a certificate set forth in the preceding paragraph, submit a written notice to that effect to the competent district director set forth in the preceding paragraph without delay.