Order for Enforcement of the Income Tax Act

The agreement specified by Cabinet Order prescribed in Article 161, paragraph (1), item (iv) (Domestic Source Income) of the Act is to be any of the following agreements:

a partnership contract under a limited partnership for investment as prescribed in Article 3, paragraph (1) (Partnership Agreements under Limited Partnerships for Investment) of the Limited Partnership Act for Investment;

a limited liability partnership contract as prescribed in Article 3, paragraph (1) (Limited Liability Partnership Agreements) of the Limited Liability Partnership Act;

an agreement similar to any of the following agreements in a foreign state:

a partnership contract as prescribed in Article 667, paragraph (1) (Partnership Contracts) of the Civil Code;

any of the agreements listed in the preceding two items.

The profit specified by Cabinet Order prescribed in Article 161, paragraph (1), item (iv) of the Act is to be the revenue from a business conducted through a permanent establishment under a partnership contract prescribed in that item (hereinafter referred to as a "partnership contract" in this paragraph), after deducting therefrom expenses pertaining to the revenue (including income tax collected pursuant to the provisions of Article 212, paragraph (1) (Obligation to Withhold Taxes) of the Act with respect to the domestic source income listed in Article 161, paragraph (1), items (v) to (xvi) of the Act), which is allocated under the partnership contract to the partners who are party to the partnership contract (including partners who were party to the partnership contract as well as those who are or were party to the agreement listed in item (iii) of the preceding paragraph).

The consideration specified by Cabinet Order prescribed in Article 161, paragraph (1), item (v) (Domestic Source Income) of the Act is to be the consideration for the transfer of land, etc. (meaning land or rights existing on land, or buildings and their associated facilities or structures, located in Japan; hereinafter the same applies in this Article) (excluding one the amount of which exceeds 100 million yen), which is paid by an individual who has received the land, etc. for the purpose of using it as the individual's own residence or the relative's residence.

The business specified by Cabinet Order prescribed in Article 161, paragraph (1), item (vi) (Domestic Source Income) of the Act is to be the business listed as follows:

a business that has as its main content the provision of the services of motion picture or theater actors, musicians and any other entertainers or professional athletes;

a business that has as its main content the provision of the services of attorneys, certified public accountants, architects or other professionals;

a business that has as its main content the provision of services carried out by persons who have expert knowledge or specialist skills in science and technology, business management or other fields, by utilizing the knowledge or skills (excluding a business conducted in association with the principal operations of a person who engages in sales and other businesses concerning machinery and equipment, and a business that has as its main content the provision of services for directing and supervising the construction or installation work prescribed in Article 2, paragraph (1), item (viii)-4, (b) (Definitions) of the Act).

The interest specified by Cabinet Order prescribed in Article 161, paragraph (1), item (x) (Domestic Source Income) of the Act is to be the interest on the following claims for which the period between the day of their occurrence and the day on which the obligation is to be performed (for claims for which the period is scheduled to be substantially extended by renewal of the term or other methods (hereinafter referred to as "renewal of the term, etc." in this paragraph), the extended period; hereinafter referred to as the "fulfillment period" in this paragraph) does not exceed six months (including such claims during the fulfillment period before the renewal of the term, etc. in the case where the fulfillment period of a claim whose fulfillment period at the time of its establishment did not exceed six months comes to exceed six months through renewal of the term, etc.):

claims pertaining to a consideration for the transfer of assets or provision of services for a person who carries out operations in Japan;

claims which a financial institution holds against a person who carries out operations in Japan with regard to the settlement of the consideration prescribed in the preceding item.

With regard to the application of the provisions of Article 161, paragraph (1), item (x) of the Act, loans provided for a Resident or a Domestic Corporation for the purpose of purchasing a vessel or aircraft to be used for the operations by the Resident or the Domestic Corporation are treated as loans falling under the provisions of the same item, and loans provided for a Nonresident or a Foreign Corporation for the purpose of purchasing a vessel or an aircraft to be used for the operations by the Nonresident or the Foreign Corporation are treated as loans other than those falling under the provisions of the same item.

The transactions specified by Cabinet Order as sales and purchase transactions of bonds with a condition of repurchase or resale prescribed in Article 161, paragraph (1), item (x) of the Act are to be transactions in which bonds are transferred or purchased under an agreement to repurchase or resell the bonds on a date agreed in advance at a price agreed in advance (or, in the case where it is possible to agree on the date and price on or after the commencement of the transaction instead of agreeing on them in advance, on a date agreed on or after the commencement at a price agreed on or after the commencement), and in which bonds of the same kind and quantity as those bonds are repurchased or resold based on that agreement (referred to as "bond transactions with a repurchase/resale agreement" in the following paragraph).

The margin specified by Cabinet Order prescribed in Article 161, paragraph (1), item (x) of the Act is to be, in a bond transaction with a repurchase/resale agreement conducted with a person who carries out operations in Japan and pertaining to those operations, in the case where the amount of consideration for the resale of bonds of the same kind and quantity as the bonds, at the time of that resale, exceeds the amount of consideration for the purchase of the bonds, at the time of that purchase, the margin equivalent to the amount obtained by deducting the amount of consideration for that purchase from the amount of consideration for that resale.

The tools specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xi), (c) (Domestic Source Income) of the Act are to be vehicles and carriers, industrial tools, and apparatuses and equipment.

With regard to the application of the provisions of Article 161, paragraph (1), item (xi) of the Act, royalties for the assets prescribed in (b) or (c) of the same item which are used in a vessel or aircraft used for the operations by a Resident or a Domestic Corporation are treated as royalties falling under the provisions of the same item, and royalties for those assets which are used in a vessel or aircraft used for the operations by a Nonresident or a Foreign Corporation are treated as royalties other than those falling under the provisions of the same item.

The provision of personal services specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xii), (a) (Domestic Source Income) of the Act is to be any of the following work and other provision of personal services:

work carried out outside Japan by a person acting as an officer of a Domestic Corporation (excluding the work carried out by the person acting as an officer in the case where the person also works full time as an employee of the Domestic Corporation);

work and other provision of personal services carried out on a vessel or aircraft operated by a Resident or Domestic Corporation (excluding the temporary provision of personal services carried out at a port of call outside Japan).

The public pension or retirement package specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xii), (b) of the Act is to be the pension paid under a scheme prescribed in Article 72, paragraph (3), item (ix) (Lump Sums Deemed to Constitute Severance Pay or Other Such Compensation) (including benefits similar thereto).

The provision of personal services specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xii), (c) of the Act is to be any of the work and other provision of personal services listed in the items of paragraph (1), which has been carried out by a person during the period when the person was a Nonresident.

The monetary award specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xiii) (Domestic Source Income) of the Act is to be money and goods or other economic benefits (excluding benefits given in the form of travel or other provision of services in lieu of which money or goods may not be chosen) that are received as a prize from a person who conducts a business in Japan for the advertisement of that business.

The contracts specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xiv) (Domestic Source Income) of the Act are to be a life insurance contract, etc. prescribed in Article 183, paragraph (3) (Meaning of Life Insurance Contract, etc.) or a casualty insurance policy or similar contract prescribed in Article 184, paragraph (1) (Insurance Premiums, etc. Deducted in the Calculation of the Amount of Miscellaneous Income Pertaining to Casualty Insurance Annuities, etc.), which specify the payment of annuities.

The agreement specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xvi) (Domestic Source Income) of the Act is to be an agreement in which one party promises to make a capital contribution to the business of the counterparty and the counterparty promises to allocate thereto profits arising from that business.

The income specified by Cabinet Order prescribed in Article 161, paragraph (1), item (xvii) (Domestic Source Income) of the Act is to be the following income:

income pertaining to insurance proceeds, compensation, or monetary damages (including those similar thereto) that is to be received for operations performed in Japan or assets located in Japan;

income arising from receiving, from a corporation, a gift of assets that are located in Japan;

income pertaining to items that were hidden in the ground and that were discovered in Japan or lost property that was found in Japan;

income pertaining to money and goods or other economic benefits (excluding benefits given in the form of travel or other provision of services in lieu of which money or goods may not be chosen) that is received as a prize based on a prize competition held in Japan;

beyond what is listed in the preceding three items, occasional income acquired upon carrying out any act in Japan;

beyond what is listed in the preceding items, income pertaining to economic benefit that is given with regard to operations performed in Japan or assets located in Japan.

The transactions specified by Cabinet Order prescribed in Article 161, paragraph (2) (Domestic Source Income) of the Act are to be guarantees of obligations pertaining to borrowing of funds or other transactions (including acts of assuming obligations that are equivalent to a guarantee of obligations).

The income specified by Cabinet Order prescribed in Article 161, paragraph (3) (Domestic Source Income) of the Act is to be, out of the income arising from a Nonresident's conducting a transportation business by vessel or aircraft both in Japan and outside Japan, the income that should arise from the Nonresident's operations in Japan, as determined on the basis of the revenue pertaining to passengers or cargo boarded or loaded in Japan in the case of a transportation business by vessel, and, in the case of a transportation business by aircraft, on the basis of the revenue or expenses pertaining to its operations in Japan (meaning operations conducted in Japan; the same applies hereinafter in this Article), the value of the Fixed Assets used for those operations in Japan, and other factors sufficient to estimate the degree to which those operations in Japan have contributed to the generation of income from that transportation business.

The items specified by Cabinet Order as equivalent to interest prescribed in Article 162, paragraph (2) (Domestic Source Income Subject to Tax Conventions) of the Act are to be discount charges on bills and other items equivalent to interest in their economic nature.

The events specified by Cabinet Order prescribed in Article 162, paragraph (2) of the Act are to be the following events:

an event equivalent to the payment of royalties for any of the following:

industrial property rights and other rights relating to technology, production methods using special technology, or things equivalent thereto;

copyrights (including rights of publication, neighboring rights, and other things equivalent thereto);

intangible Fixed Assets listed in Article 6, item (viii) (Scope of Depreciable Assets) (including those equivalent to the prospecting rights prescribed in (b) of that item outside Japan and those equivalent to the things listed in (o) to (t) of that item outside Japan);

an event equivalent to the transfer or acquisition of the things listed in (a) to (c) of the preceding item.