Order for Enforcement of the Income Tax Act

The tax equivalent to the income tax imposed under the laws and regulations of a foreign country prescribed in Article 176, paragraph (3) (Special Provisions on Taxation of Interest and Similar Income from Trust Property) of the Act, which is specified by Cabinet Order, is to be, out of the tax imposed under the laws and regulations of a foreign country on the trust property set forth in that paragraph that is equivalent to the income tax pertaining to the withholding under the provisions of Article 212 (Obligation to Withhold Taxes) of the Act (hereinafter in this paragraph, paragraph (3), and paragraph (9) referred to as "foreign income tax"), the portion corresponding to the foreign income tax for which, if the proceeds on which that foreign income tax was imposed were distributed, income tax would be required to be collected on that distribution of proceeds pursuant to the provisions of Article 181 (Obligation to Withhold Taxes) or Article 212 of the Act (excluding the portion corresponding only to what is listed in Article 9, paragraph (1), item (xi) (Nontaxable Income) of the Act).

The amount of income tax to be deducted pursuant to the provisions of Article 176, paragraph (3) of the Act is to be deducted from the amount of income tax to be collected and paid, when a Domestic Corporation collects income tax pursuant to the provisions of Article 181 or Article 212 of the Act on a distribution of proceeds prescribed in that paragraph of a group investment trust (meaning a group investment trust prescribed in that paragraph; the same applies hereinafter in this Article) (limited to a distribution corresponding to the calculation period of the distribution of proceeds that includes the day on which that income tax was paid, and, where the trust property pertaining to that payment pertains to a Securities Investment Trust for acquisition by a trustee (meaning a Securities Investment Trust specified by Ministry of Finance Order the purpose of which is to have the trustee of another Securities Investment Trust acquire its beneficial interests; hereinafter in this paragraph and paragraph (9) so referred to), the distribution of proceeds is to be that of a Securities Investment Trust investing in beneficial interests (meaning a Securities Investment Trust, other than a Bond Investment Trust, the purpose of which is to manage trust property as investment in the beneficial interests of that Securities Investment Trust for acquisition by a trustee; so referred to in paragraph (9))).

In the case referred to in the preceding paragraph, if, within the amount of income tax to be deducted pursuant to the provisions of Article 176, paragraph (3) of the Act, there is an amount of foreign income tax to be deducted pursuant to the provisions of that paragraph, the amount of that income tax other than that foreign income tax is first to be deducted from the amount of income tax pertaining to the group investment trust's distribution of proceeds prescribed in the preceding paragraph, and the amount of that foreign income tax is then to be deducted from the amount of income tax pertaining to that distribution of proceeds.

With regard to the application of Article 264 (Amount of Income Tax to Be Deducted from the Amount of Income Tax, etc. Withheld on Each Class of Income) (including as applied mutatis mutandis pursuant to Article 293 (Filing of Returns, Payment and Refunds)) in a case where the provisions of Article 176, paragraph (3) of the Act apply, the phrase "the amount" in Article 264 is deemed to be replaced with "the amount and the amount of deducted foreign income tax pertaining to a distribution of proceeds prescribed in Article 300, paragraph (2) (Special Provisions on Taxation of Interest and Similar Income from Trust Property) of a group investment trust (meaning a group investment trust prescribed in Article 176, paragraph (3) (Special Provisions on Taxation of Interest and Similar Income from Trust Property) of the Act; the same applies hereinafter in this Article) (excluding what falls under the domestic source income set forth in Article 170 (Tax Rates for Income Taxes under Separate Taxation) of the Act to which the provisions of that Article have been applied, the general interest and similar income prescribed in Article 3, paragraph (1) (Separate Taxation on Interest Income) of the Act on Special Measures Concerning Taxation to which the provisions of that paragraph have been applied, and the interest and similar income and dividends and similar income prescribed in Article 8-5, paragraph (1) (Dividend Income, etc. for Which No Final Return Is Required) of that Act to which the provisions of that paragraph have been applied; the same applies hereinafter in this Article) (meaning the amount calculated by multiplying the amount of foreign income tax prescribed in paragraph (1) of Article 300 that is to be deducted, pursuant to the provisions of Article 176, paragraph (3) of the Act, from the amount of income tax pertaining to the distribution of proceeds prescribed in Article 300, paragraph (2) of that group investment trust, by the ratio that the amount of the distribution of proceeds received bears to the total amount of the distribution of proceeds prescribed in paragraph (2) of that Article of that group investment trust (limited to the portion for which income tax is to be collected pursuant to the provisions of Article 181 (Obligation to Withhold Taxes) or Article 212 of the Act, and excluding the portion corresponding only to what is listed in Article 9, paragraph (1), item (xi) (Nontaxable Income) of the Act; the same applies hereinafter in this Article) (or, where that amount exceeds the amount calculated by multiplying the amount of income tax pertaining to that distribution of proceeds, as calculated without the deduction under the provisions of Article 176, paragraph (3) of the Act, by the foreign currency asset ratio prescribed in paragraph (9) of Article 300 of the group investment trust pertaining to that distribution of proceeds, as calculated on the last day of the calculation period of that distribution of proceeds, the amount calculated by multiplying by that foreign currency asset ratio))".

A Domestic Corporation that has undertaken a group investment trust must, where income tax prescribed in Article 176, paragraph (3) of the Act has been imposed on the trust property of that group investment trust, preserve, as provided by Ministry of Finance Order, documents certifying that the amount of income tax has been imposed and other documents specified by Ministry of Finance Order.

A Domestic Corporation that has undertaken a group investment trust (including a trustee of a trust prescribed in Article 227 (Trust Accounting Statements) of the Act and a person who falls under a person receiving payment of interest and similar income or dividends and similar income prescribed in Article 228, paragraph (1) (Report on Dividend Income Received by the Person of Record) of the Act (hereinafter referred to as a "quasi-payer" through paragraph (8))) must, where it pays in Japan to an individual a distribution of proceeds of that group investment trust (excluding the general interest and similar income prescribed in Article 3, paragraph (1) (Separate Taxation on Interest Income) of the Act on Special Measures Concerning Taxation to which the provisions of that paragraph have been applied; the same applies hereinafter in this paragraph and the following paragraph) and there is an amount of notified foreign income tax pertaining to the distribution of proceeds the payment of which has been finalized, notify that individual in writing of the amount of the notified foreign income tax and other matters specified by Ministry of Finance Order within one month from the day on which the payment was finalized (for a notice pertaining to a distribution of proceeds on bearer beneficiary certificates of an Investment Trust or a Specified Trust That Issues Beneficiary Certificates, the day on which the payment was made) (within 45 days in the case where a quasi-payer gives the notice).

A Domestic Corporation prescribed in the preceding paragraph that prepares the written notice referred to in that paragraph on the basis of the total amount of distributions of proceeds paid to the same person during the year must, notwithstanding the provisions of that paragraph, notify the individual referred to in that paragraph in writing of the amount of notified foreign income tax pertaining to those distributions of proceeds and other matters specified by Ministry of Finance Order by January 31 of the year following the year that includes the day on which the payment was finalized as prescribed in that paragraph (by February 15 of the same year in the case where a quasi-payer gives the notice).

A Domestic Corporation that has undertaken a group investment trust (including a quasi-payer) must, where it pays in Japan to a corporation a distribution of proceeds of that group investment trust and there is an amount of notified foreign income tax pertaining to the distribution of proceeds the payment of which has been finalized, notify that corporation in writing of the amount of the notified foreign income tax and other matters specified by Ministry of Finance Order within one month from the day on which the payment was finalized (for a notice pertaining to a distribution of proceeds on bearer beneficiary certificates of an Investment Trust or a Specified Trust That Issues Beneficiary Certificates, the day on which the payment was made) (within 45 days in the case where a quasi-payer gives the notice).

The amount of notified foreign income tax prescribed in the preceding three paragraphs means the amount calculated by multiplying the amount of foreign income tax to be deducted, pursuant to the provisions of Article 176, paragraph (3) of the Act, from the amount of income tax pertaining to the distribution of proceeds prescribed in paragraph (2) of the group investment trust set forth in the preceding three paragraphs, by the ratio that the amount of the distribution of proceeds received by the individual or corporation set forth in the preceding three paragraphs bears to the total amount of the distribution of proceeds prescribed in that paragraph of that group investment trust (limited to the portion for which income tax is to be collected pursuant to the provisions of Article 181 or Article 212 of the Act, and excluding the portion corresponding only to what is listed in Article 9, paragraph (1), item (xi) of the Act; the same applies hereinafter in this paragraph) (or, where that amount exceeds the amount calculated by multiplying the amount of income tax pertaining to that distribution of proceeds, as calculated without the deduction under the provisions of Article 176, paragraph (3) of the Act, by the ratio that the amount of assets denominated in foreign currency (meaning shares, bonds, and other assets expressed in foreign currency) managed in the trust property of the group investment trust pertaining to that distribution of proceeds (where that group investment trust is a Securities Investment Trust investing in beneficial interests, the trust property of the Securities Investment Trust for acquisition by a trustee pertaining to that Securities Investment Trust investing in beneficial interests; the same applies hereinafter in this paragraph), as calculated on the last day of the calculation period of that distribution of proceeds, bears to the total amount of that trust property (hereinafter in this paragraph referred to as the "foreign currency asset ratio"), the amount calculated by multiplying by that foreign currency asset ratio).

A Domestic Corporation prescribed in paragraphs (6) through (8) may, in lieu of the notice in writing under those provisions, with the consent of the individual or corporation referred to in those provisions, provide the matters to be stated in that written notice by electronic or magnetic means (meaning a method using an electronic data processing system or any other method utilizing information and communications technology that is specified by Ministry of Finance Order; the same applies in paragraphs (12) and (13)); provided, however, that when so requested by that individual or corporation, it must notify that individual or corporation in writing.

In the case of the main clause of the preceding paragraph, the Domestic Corporation prescribed in that paragraph is deemed to have given the notice under the provisions of paragraphs (6) through (8).

A Domestic Corporation prescribed in paragraph (10) must, when intending to provide to the individual or corporation referred to in that paragraph the matters to be stated in writing pursuant to the provisions of the main clause of that paragraph, as provided by Ministry of Finance Order, indicate to that individual or corporation in advance the type and content of the electronic or magnetic means to be used, and obtain consent in writing or by electronic or magnetic means.

A Domestic Corporation prescribed in the preceding paragraph that has obtained consent pursuant to the provisions of that paragraph must not, where the individual or corporation referred to in that paragraph has notified it in writing or by electronic or magnetic means that the individual or corporation will not receive provision by electronic or magnetic means pursuant to the provisions of the main clause of paragraph (10), provide to that individual or corporation by electronic or magnetic means the matters to be stated in the written notice referred to in that paragraph; provided, however, that this does not apply where that individual or corporation has again given consent pursuant to the provisions of the preceding paragraph.

With regard to a Domestic Corporation prescribed in paragraphs (6) through (8) that pays a distribution of proceeds prescribed in those provisions, and the individuals and corporations prescribed in those provisions that receive payment of that distribution of proceeds, where the provisions of Article 225, paragraph (2) (Payment Reports and Notice of Payment) of the Act or Article 8-4, paragraphs (4) through (7) (Special Provisions on Taxation on Dividend Income, etc. on Listed Shares, etc.) of the Act on Special Measures Concerning Taxation apply to the part concerning that distribution of proceeds, the provisions of paragraphs (6) through (13) do not apply to the part concerning the distribution of proceeds to which that application is subject.