Regulation for Enforcement of the Income Tax Act

The contracts specified by Ministry of Finance Order as prescribed in Article 57-3, paragraph (2) (Conversion of Transactions in a Foreign Currency Whose Yen Equivalent Is Fixed by Foreign Exchange Futures Contract or Similar Contract) of the Act are, among contracts pertaining to foreign exchange futures transactions, contracts that fix the yen equivalent of the amount of foreign currency to be received or paid upon settlement of the assets or liabilities prescribed in that paragraph (referred to as "foreign exchange futures contract" in item (ii)), or, among contracts pertaining to derivatives transactions prescribed in Article 2, paragraph (20) (Definitions) of the Financial Instruments and Exchange Act, contracts pertaining to transactions in which the parties to the transaction promise each other payment of monies based on the foreign exchange rate agreed between those parties, for the amount of foreign currency that the parties have determined as principal and interest (limited to those satisfying any of the following requirements).

The yen equivalent of the foreign currency principal amount (meaning the amount of foreign currency that the parties to the transaction have determined as the principal of the transaction; the same applies hereinafter in this paragraph) to be paid or received in connection with the conclusion of the contract is the same amount as the yen equivalent at expiry (meaning the yen equivalent of the foreign currency principal amount to be received or paid upon expiry of the period of the contract; the same applies in the following item);

The yen equivalent at expiry pertaining to the contract is an amount equivalent to the amount obtained by converting the foreign currency principal amount into a yen equivalent at the foreign exchange rate pertaining to the foreign exchange futures contract in which the last day of the period of the contract is the date of sale and purchase of the foreign exchange.

The case where, as specified by Ministry of Finance Order as prescribed in Article 57-3, paragraph (2) of the Act, matters are recorded in books and documents or other documents specified by Ministry of Finance Order is a case where, in the documents prescribed in the following paragraph relating to the acquisition or occurrence of the assets or liabilities prescribed in Article 57-3, paragraph (2) of the Act, the fact that they fall under the provisions of Article 57-3, paragraph (2) of the Act and the contract amount, date of conclusion, date of performance and other matters for reference of the foreign exchange futures contract or similar contract prescribed in Article 57-3, paragraph (2) of the Act (hereinafter referred to as "foreign exchange futures contract or similar contract" in this Article) are recorded, or, in the documents prescribed in the following paragraph relating to the conclusion of that foreign exchange futures contract or similar contract, the fact that it falls under the provisions of Article 57-3, paragraph (2) of the Act and the type and amount of the transaction in a foreign currency and other matters for reference are recorded.

The books and documents or other documents specified by Ministry of Finance Order as prescribed in Article 57-3, paragraph (2) of the Act are the documents specified in each of the following items for the categories of persons listed in those items.

A Resident who carries on business that generates real property income, business income or timber income: books and documents pertaining to the acquisition or occurrence of the assets or liabilities prescribed in Article 57-3, paragraph (2) of the Act relating to that business of that person, or books and documents pertaining to the conclusion of foreign exchange futures contracts or similar contracts;

A Resident who carries on business that generates miscellaneous income: documents pertaining to the acquisition or occurrence of the assets or liabilities prescribed in Article 57-3, paragraph (2) of the Act relating to that business of that person, or documents pertaining to the conclusion of foreign exchange futures contracts or similar contracts.

The matters specified by Ministry of Finance Order as prescribed in Article 58, paragraph (3) (Special Provisions on Capital Gains if the Resident Exchanges Fixed Assets) of the Act are the following matters:

The types, quantities and uses of the acquired assets and the assets transferred prescribed in Article 58, paragraph (1) of the Act;

The name or title and the domicile or residence, or the location of the head office or principal office, of the counterparty to the exchange prescribed in Article 58, paragraph (1) of the Act;

The date on which the exchange referred to in the preceding item was made;

The dates of acquisition of the acquired assets and the assets transferred referred to in item (i);

Any other matters for reference.