Regulation for Enforcement of the Income Tax Act

The following leases (excluding leases falling under the provisions of the following paragraph) fall under leases conducted as a principal business as prescribed in Article 138, paragraph (1) (Inclusion in Necessary Expenses of the Acquisition Cost of Low-Value Depreciable Assets) of the Order:

a lease of assets exclusively for use in the business of transferring those assets or the provision of services by a person who transfers assets or engages in the provision of services to the Resident;

a lease of assets as a business that is conducted, or is expected to be conducted, on a continuing basis by utilizing the Resident's management resources (meaning equipment used in business (excluding assets used for the lease), the skills or knowledge relating to the business held by the Resident or the Resident's workers (excluding those relating to taxation), and other things equivalent thereto);

a lease of assets conducted incidentally to the principal business conducted by the Resident.

A lease in a case where, after the lease of an asset, a contract has been concluded under which the transferor (meaning a person who transferred the asset to the Resident) or another person will purchase the asset or will arrange for a third party to purchase the asset (limited to a case where the total amount of the amount of consideration for the lease and the amount of consideration for the purchase of the asset (or, if that amount of consideration has not been finalized, the amount expected as that consideration) exceeds an amount equivalent to approximately 90/100 of the Resident's acquisition price of the asset) does not fall under a lease conducted as a principal business as prescribed in Article 138, paragraph (1) of the Order.

The provisions of the preceding Article apply mutatis mutandis to the determination of whether a lease falls under a lease conducted as a principal business as prescribed in Article 139, paragraph (1) (Inclusion of Lump-Sum Depreciable Assets in Necessary Expenses) of the Order.

The grounds specified by Ministry of Finance Order as prescribed in Article 144, paragraph (1), item (i), (e) (Maximum Amount of Transfer to the Allowance Account for Bad Debts on Individually Assessed Loans, etc.) of the Order are the following (excluding the grounds set forth in (d) of that item):

the resolution to change rights prescribed in Article 3, paragraph (1) (Confirmation by a Designated Confirmation Investigation Organization) of the Act on Procedures, etc. for the Adjustment of Business Operators' Debts Owed to Financial Institutions, etc. to Facilitate Smooth Business Revitalization (Act No. 67 of 2025) having taken effect pursuant to Article 28, paragraph (1) (Effect of a Resolution to Change Rights) or Article 29 (Effect of a Resolution to Change Rights Where the Consent of All Voting Right Holders Is Obtained) of that Act;

decisions reached through consultation among persons concerned that are not made through liquidation procedures under laws and regulations, being any of the following:

a decision of a creditors' meeting reached through consultation that sets out the arrangement of the debtor's liabilities on reasonable criteria;

a contract concluded through consultations between the parties arranged by an administrative organ, a financial institution or another third party, the content of which is equivalent to that in (a).

The grounds specified by Ministry of Finance Order as prescribed in Article 144, paragraph (1), item (iii), (e) (Limit on Transfers to the Account for Reserve for Doubtful Accounts for Individually Evaluated Loans, etc.) of the Order are the following grounds.

a suspension-of-transactions disposition by a bill clearing house (including, in an area without a bill clearing house, a group of banks that conducts bill clearing business in that area);

a suspension-of-transactions disposition by an electronic monetary claim recording institution prescribed in Article 2, paragraph (2) (Definitions) of the Electronically Recorded Monetary Claims Act (Act No. 102 of 2007) (limited to one that satisfies the following requirements).

that it has made business entrustment (meaning the entrustment of a part of the electronic monetary claim recording business prescribed in Article 51, paragraph (1) (Designation of Persons Engaged in the Electronic Monetary Claim Recording Business) of that Act, under the provisions of Article 58, paragraph (1) (Entrustment of a Part of the Electronic Monetary Claim Recording Business) of the Electronically Recorded Monetary Claims Act; the same applies in (b)) to a number of financial institutions (meaning the persons listed in the items of Article 2, paragraph (1) (Definitions) of the Deposit Insurance Act (Act No. 34 of 1971); hereinafter the same in this item) exceeding 50 percent of the total number of financial institutions;

that the business rules prescribed in Article 56 (Business of Electronic Monetary Claim Recording Institutions) of the Electronically Recorded Monetary Claims Act provide that a financial institution that has received a business entrustment may not lend funds (excluding loans for preserving claims held by that financial institution) to a person who has been subject to the suspension-of-transactions disposition.

The documents specified by Ministry of Finance Order as prescribed in Article 144, paragraph (2) (Limit on Transfers to the Account for Reserve for Doubtful Accounts for Individually Evaluated Loans, etc.) of the Order are the following documents.

documents certifying that the facts listed in the items of Article 144, paragraph (1) of the Order have occurred;

in the case where there is an amount of a portion for which collection or repayment is found to be expected through the exercise of a security interest, performance of a guarantee obligation or otherwise, a document that clarifies that amount.

The documents specified by Ministry of Finance Order as prescribed in Article 154, paragraph (2) (Limit on Transfers to the Account for Reserve for Retirement Allowances) of the Order are, regarding the preparation or amendment of the rules listed in Article 153, item (iii) (Scope of Retirement Allowance Rules) of the Order, a document stating the opinions of all of the employees prescribed in Article 154, paragraph (2) of the Order, and a document stating the details of the fact that the rules relating to that preparation or amendment have been made known by a method such as posting them or keeping them at all times in a place easily visible at each workplace.

The amounts specified by Ministry of Finance Order as prescribed in Article 156, item (iii), (b) (Special Provisions on Limit on Transfers in the Case Where a Retirement Allowance Mutual Aid Contract, etc. Has Been Concluded, etc.) of the Order are the amount of contributions prescribed in Article 46, paragraph (1) (Special Contribution Amount) of the Regulation for Enforcement of the Defined-Benefit Corporate Pension Act, the amount of contributions, etc. prescribed in Article 16, paragraph (1), item (ii) of the Supplementary Provisions of the Order for the Enforcement of the Corporation Tax Act relating to the amount of past service liabilities, etc. prescribed in Article 16, paragraph (1), item (vii) (Requirements for Qualified Retirement Pension Contracts, etc.) of the Supplementary Provisions of that Order, and the amount of the assets listed in Article 22, paragraph (1), item (v) (Criteria for Transfer of Assets of Other Schemes) of the Order for Enforcement of the Defined Contribution Pension Act (Cabinet Order No. 248 of 2001).

The matters specified by Ministry of Finance Order as prescribed in Article 57, paragraph (2) (Special Provisions on Necessary Expenses If Relatives Work Exclusively for a Resident) of the Act are the following matters.

the name and domicile (or residence, if there is no domicile in Japan) of the person who submits the documents prescribed in Article 57, paragraph (2) of the Act and, where the place of domicile (or place of residence, if there is no domicile in Japan) differs from the place for tax payment, that place for tax payment;

the relationship of the relative employed only by a blue-return filer prescribed in Article 57, paragraph (1) of the Act (hereinafter referred to as a "relative employed only by a blue-return filer" in this Article) to the person referred to in the preceding item, and the age of that relative;

where the relative employed only by a blue-return filer is engaged in other work or is attending school, that fact;

the amount of salary paid to other employees engaged in the business;

any other matters for reference.

Where the criteria for the amount of salary of a relative employed only by a blue-return filer stated in the documents prescribed in Article 57, paragraph (2) of the Act are to be changed, a document stating the following matters must be submitted without delay to the competent district director with jurisdiction over the place for tax payment.

the name and domicile (or residence, if there is no domicile in Japan) of the person who submits those documents and, where the place of domicile (or place of residence, if there is no domicile in Japan) differs from the place for tax payment, that place for tax payment;

the content of the change and the reasons for it;

any other matters for reference.

In the case where a Resident prescribed in Article 57, paragraph (1) of the Act comes to have a new relative employed only by a blue-return filer on or after January 16 of the year, that Resident is to submit the documents prescribed in Article 57, paragraph (2) of the Act to the competent district director with jurisdiction over the place for tax payment within two months from the day on which the Resident came to have the relative.