Regulation for Enforcement of the Income Tax Act

A stock company that has made an allotment of shares without contribution prescribed in Article 228-3 (Report on Allotments of Shares Without Contribution) of the Act (hereinafter referred to as "allotment of shares without contribution" in this paragraph) to an individual or corporation by a resolution under Article 322, paragraph (1) of the Companies Act (General Meetings of Class Shareholders Where Detriment to Class Shareholders of Certain Class Likely) (including a provision of the articles of incorporation under paragraph (2) of that Article; the same applies in item (iii)) must, pursuant to Article 228-3 of the Act, submit a report stating the following matters, for each person who received the allotment, to the district director with jurisdiction over the location of the head office of the stock company.

the name or title, domicile or residence, or location of the head office or principal office, and individual number or corporate number of the person who received the allotment of shares without contribution (for a person who has neither an individual number nor a corporate number, the name or title and the domicile or residence, or location of the head office or principal office);

the date on which the allotment of shares without contribution takes effect;

the date on which the resolution under Article 322, paragraph (1) of the Companies Act pertaining to the allotment of shares without contribution was made (in the case where there is a provision of the articles of incorporation under paragraph (2) of that Article, the resolution of the board of directors or the decision of a director that made the determination pertaining to the allotment of shares without contribution);

the class and number of shares delivered by the allotment of shares without contribution;

if there is an amount to be paid in exchange for the shares set forth in the preceding item, that amount;

the value per share of the shares set forth in item (iv) on the date on which the allotment of shares without contribution takes effect;

any other matters for reference.

The form of the report prescribed in the preceding paragraph is as set out in Appended Table IX (2).

In the case where an officer (meaning an officer prescribed in Article 228-3-2 of the Act; hereinafter the same applies in this paragraph) or employee (including a person who was an officer or employee) of a Domestic Corporation that has with a Foreign Corporation the relationship specified by Cabinet Order as prescribed in Article 228-3-2 (Report on Economic Benefits Subject to Provision or Similar Transfer by Foreign Parent Companies or Similar Corporations to Officers or Similar Persons in Japan) of the Act, who falls under any of the persons set forth in the items of that Article, or an officer or employee (including a person who was an officer or employee) of a Foreign Corporation who works at a business office or similar place of the Foreign Corporation in Japan (meaning a business office or similar place prescribed in that Article; hereinafter the same applies in this paragraph) and who falls under any of the persons set forth in the items of that Article (collectively referred to as "officers or similar persons" in this paragraph) has received a delivery, payment, or provision (hereinafter referred to as "provision or similar transfer" in this paragraph) of shares, money, or other economic benefit from the foreign parent company or similar corporation pertaining to the officers or similar persons (meaning a foreign parent company or similar corporation prescribed in that Article; hereinafter the same applies in this paragraph), based on a right set forth in the items of Article 354-3, paragraph (2) of the Order (Report on Economic Benefits Subject to Provision or Similar Transfer by Foreign Parent Companies or Similar Corporations to Officers or Similar Persons in Japan) (hereinafter simply referred to as "right" in this paragraph) that was granted by a contract between the officers or similar persons and the foreign parent company or similar corporation pertaining to the officers or similar persons, the head of the Domestic Corporation or business office or similar place must, pursuant to Article 228-3-2 of the Act, submit a report stating the following matters, for each person who received the provision or similar transfer of the economic benefit, to the district director with jurisdiction over the location of the head office or principal office of the Domestic Corporation or the location of the business office or similar place.

the matters specified respectively below according to the following categories of the person who received the provision or similar transfer of the economic benefit

a Resident set forth in Article 228-3-2, item (i) of the Act: the person's name, domicile or residence, and individual number;

a Nonresident set forth in Article 228-3-2, item (ii) of the Act: the following matters

the person's name, domicile or residence in Japan immediately before the time of the departure from Japan prescribed in Article 60-2, paragraph (1) of the Act (Special Provisions on Capital Gains upon Departure from Japan), and individual number (for a person who does not have an individual number, the name and the domicile or residence in Japan immediately before the time of that departure from Japan);

the period pertaining to the contract of mandate, employment contract, or other similar contract that the person concluded with the Domestic Corporation or Foreign Corporation.

the date on which the person received the provision or similar transfer of the economic benefit;

the content of the economic benefit received through the provision or similar transfer;

the value of the shares or the amount of money or other economic benefit received through the provision or similar transfer, the currency in which it is denominated, and the following matters that formed the basis of its calculation

the number of shares received through the provision or similar transfer, or the number of units of the right that formed the basis of the provision or similar transfer of money or other economic benefit;

the value per share on the date of receipt of the provision or similar transfer, or the amount of money or other economic benefit received through the provision or similar transfer per unit of the right, and the currency in which it is denominated;

the following matters concerning the right that formed the basis of the provision or similar transfer of the economic benefit

the date on which the contract on the granting of that right was concluded;

the class of that right;

the total number of shares that can be acquired based on that right, or the total amount of money or other economic benefit (where the total number of shares or total amount of economic benefit is not fixed in the contract on the granting of that right, the total number of rights granted by that contract);

the name of the foreign parent company or similar corporation that concluded the contract on the granting of that right and the name of the country in which its head office or principal office is located (for a person that has a corporate number, the name, the name of the country in which its head office or principal office is located, and the corporate number).

any other matters for reference.

The form of the report prescribed in the preceding paragraph is as set out in Appended Table IX (3).

The number calculated as specified by Ministry of Finance Order as prescribed in Article 228-4, paragraph (1) (Special Provisions on the Submission of Payment Reports and Related Documents) of the Act is the number of sheets of the statements and similar reports prescribed in that paragraph (hereinafter in this paragraph and the following paragraph referred to as "statements and similar reports") that the person should have submitted during the period from January 1 to December 31 of the second year preceding the year in which the due date for submission of the statements and similar reports falls, calculated for each of the tables from Appended Table V (1) through Appended Table V (15) and from Appended Table V (17) through Appended Table IX (3).

Where a person who is to submit statements and similar reports intends to provide, by using the electronic data processing system prescribed in Article 228-4, paragraph (1), item (i) of the Act, the required particulars prescribed in that paragraph (hereinafter in the following paragraph, paragraph (4), and paragraph (6), item (iii) referred to as "required particulars") to the district director prescribed in paragraph (1) of that Article, the notification and other procedures are to follow the provisions of Article 4, paragraphs (1) to (3), (6), and (7) (Advance Notification, etc.) of the Ministerial Order on the Promotion of Administration Utilizing Information and Communications Technology Pertaining to National Tax Laws and Regulations, etc. in the case where the person intends to provide them by the method set forth in item (i) of the following paragraph, and the provisions of paragraphs (4) and (6) of that Article in the case where the person intends to provide them by the method set forth in item (ii) of the following paragraph.

The methods specified by Ministry of Finance Order as prescribed in Article 228-4, paragraph (1), item (i) of the Act are the following methods.

a method of transmitting the required particulars as provided in Article 5, paragraph (1) (Applications, etc. by Electronic Data Processing System) of the Ministerial Order on the Promotion of Administration Utilizing Information and Communications Technology Pertaining to National Tax Laws and Regulations, etc.;

a method of, as provided in Article 5-2, paragraph (1) (Applications, etc. by Electronic Data Processing System) of the Ministerial Order on the Promotion of Administration Utilizing Information and Communications Technology Pertaining to National Tax Laws and Regulations, etc., recording the required particulars in the specified file prescribed in that paragraph and granting the district director the authority to view the required particulars recorded in that specified file and to record them in a file kept on a computer used by the National Tax Agency.

A person who provides the required particulars by the method set forth in item (ii) of the preceding paragraph must retain the required particulars recorded in the specified file prescribed in that item as provided in Article 5-2, paragraph (3) of the Ministerial Order on the Promotion of Administration Utilizing Information and Communications Technology Pertaining to National Tax Laws and Regulations, etc.

The recording media specified by Ministry of Finance Order as prescribed in Article 228-4, paragraph (1), item (ii) of the Act are optical discs or magnetic disks.

The matters specified by Ministry of Finance Order as prescribed in Article 355, paragraph (1) (Special Provisions on the Submission of Payment Reports and Related Documents) of the Order are the following matters.

the name and domicile or residence, or the name, location, and corporate number, of the person who submits the written application under Article 355, paragraph (1) of the Order;

a statement to the effect that the person intends to obtain the approval under Article 228-4, paragraph (3) of the Act;

the district director to whom the person intends to provide the required particulars and the reason for providing them to that district director;

the distinction as to which of the methods set forth in the items of Article 228-4, paragraph (1) of the Act is to be used;

any other matters for reference.

The district director specified by Ministry of Finance Order as prescribed in Article 228-4, paragraph (3) of the Act is the district director set forth in item (iii) of the preceding paragraph in connection with an approval under Article 355, paragraph (2) or (3) of the Order that is based on an application to the competent district director under Article 355, paragraph (1) of the Order.