Income Tax Act

If an individual domiciled in Japan who has been issued a proof of physical disability passbook as prescribed in Article 15, paragraph (4) (Proof of Physical Disability Passbooks) of the Act on Welfare of Physically Disabled Persons (Act No. 283 of 1949); a wife domiciled in Japan who is eligible for the basic survivors' pension as prescribed in Article 37-2, paragraph (1) (Scope of Surviving Family) of the National Pension Act (Act No. 141 of 1959); a wife domiciled in Japan as prescribed in Article 49, paragraph (1) (Conditions for Payment) of that Act who is eligible for a widow's pension as prescribed in that paragraph; or any other person that Cabinet Order prescribes as being equivalent to such an eligible person (hereinafter referred to as a "Person with a Disability or other eligible person" in this Article) places money into Deposits and Savings (other than Deposits and Savings falling under the provisions of paragraph (1), item (i) or item (ii) of the preceding Article and other Deposits and Savings prescribed by Cabinet Order; hereinafter the same applies in this Article), places assets into a Jointly Managed Trust (other than one falling under the provisions of item (ii) of that paragraph and other than a trust as prescribed by Cabinet Order; hereinafter the same applies in this Article) or Bond-Based Investment Trust Under Public Offering (but only an Investment Trust managed without instructions from the settlor as prescribed in Article 2, paragraph (2) (Definitions) of the Act on Investment Trusts and Investment Corporations, and other than a trust as prescribed by Cabinet Order; hereinafter referred to as a "specific form of Bond-Based Investment Trust Under Public Offering" in this Article), or purchases Securities (limited to public and corporate bonds and beneficial interests as prescribed by Cabinet Order in Investment Trusts (other than Investment Trusts managed without instructions from the settlor as prescribed in that paragraph) and specified-purpose trusts; hereinafter the same applies in this Article), at the business office or other office of a financial institution or other person that accepts Deposits and Savings or undertakes to act as the trustee of a trust, the business office or office of a financial instruments business operator, the business office or office of a registered financial institution as provided by Cabinet Order, or any other place equivalent to the business office or office of such a person (hereinafter referred to as "the business office of a financial institution or other such place" in this Article) (hereinafter such an action is referred to in this Article as a "placement"), and the Person with a Disability or other eligible person submits a paper document at the time of the placement pursuant to Cabinet Order, indicating that the person seeks to apply the provisions of this paragraph to the Deposits and Savings, Jointly Managed Trust, specific form of Bond-Based Investment Trust Under Public Offering, or Securities; giving the person's name, date of birth, and domicile; indicating the person to be a Person with a Disability or other eligible person; and giving any other necessary information (hereinafter such a paper document is referred to as an "application to exempt savings from taxation" in this Article), no income taxes are imposed on what each of the following items prescribes, but only in the case set forth in the item in question:

if, throughout the period for calculating the interest on the Deposits and Savings, the sum total of the principal of the Deposits and Savings and the principal of any other Deposits and Savings that the person has deposited at the business office of a financial institution or other such place concerned and in respect of which the person has submitted an application to exempt savings from taxation does not exceed the maximum limitation set forth in paragraph (3), item (iii) which appears in the statement of tax-exempt savings prescribed in that paragraph that the person submits via the business office of a financial institution or other such place concerned (on and after the day on which the person submits a declaration of change to the tax-exempt savings limit prescribed in paragraph (4), this means the maximum limitation after the change; hereinafter the same applies in this paragraph): interest on the Deposits and Savings during that period of calculation;

if, throughout the period for calculating distributions of proceeds from the Jointly Managed Trust or specific form of bond-based investment trust under public offering (hereinafter referred to as a "jointly managed or similar type of trust" in this item), the sum of the principal of the jointly managed or similar type of trust and the principal of any other jointly managed or similar types of trusts into which the person places assets at the business office of the financial institution or other such place and submits an application to exempt savings from taxation with respect to does not exceed the maximum limitation set forth in paragraph (3), item (iii) which appears in the statement of tax-exempt savings prescribed in that paragraph that the person submits via the business office of the financial institution or other such place (if the jointly managed or similar type of trust is a Loan Trust or a specific form of bond-based investment trust under public offering, this only applies if the jointly managed or similar type of trust is managed by way of entries or records in a transfer account book provided for in the Act on the Book-Entry Transfer of Bonds and Shares (Act No. 75 of 2001) or by any other method prescribed by Cabinet Order):distributions of proceeds from the jointly managed or similar type of trust during that period of calculation;

if, throughout the period for calculating the interest, distributions of proceeds, or dividends of surplus (meaning dividends of surplus as prescribed in Article 24, paragraph (1) (Dividend Income); hereinafter the same applies in this item), the Securities are managed by way of entries or records in a transfer account book provided for in the Act on the Book-Entry Transfer of Bonds and Shares or by any other method prescribed by Cabinet Order (if Securities are purchased partway through the period of calculation, this means throughout the period from the day of the purchase to the final day of the period of calculation; hereinafter the same applies in this item), and if, throughout the period of calculation, the sum of the face values of the Securities or the amount prescribed by Cabinet Order as being equivalent thereto (hereinafter referred to as the "face value or equivalent amount" in this Article) and the face values and equivalent amounts of other Securities that the person purchases at the business office of the financial institution or other such place and submits an application to exempt savings from taxation with respect to does not exceed the maximum limitation set forth in paragraph (3), item (iii) which appears in the statement of tax-exempt savings prescribed in that paragraph that the person submits via the business office of the financial institution or other such place:interest, distributions of proceeds, and dividends of surplus from the Securities during that period of calculation.

An application to exempt savings from taxation may be submitted only to the business office of the financial institution or other such place through which a person has submitted a statement of tax-exempt savings as prescribed in the following paragraph, and upon submitting the application, the person must present to the director of the business office of the financial institution or other such place the proof of physical disability passbook issued to the person pursuant to the provisions of Article 15, paragraph (4) of the Act on Welfare of Physically Disabled Persons, the basic survivors' pension certificate set forth in Article 15, item (iii) (Types of Benefits) of the National Pension Act, or any other document specified by Cabinet Order, or, in lieu of presenting those documents, transmit, in the manner specified by Cabinet Order, an electronic certificate for signature or similar record (meaning an electronic certificate for signature as prescribed in Article 3, paragraph (1) (Issuance of Electronic Certificates for Signature for Individual Number Cards) of the Act on Certification Business of the Japan Agency for Local Authority Information Systems in Relation to Electronic Signatures, etc. (Act No. 153 of 2002) (referred to as an "electronic certificate for signature" in paragraph (5)) or any other electronic or magnetic record (meaning a record used in computerized information processing which is created in electronic form, magnetic form, or any other form that cannot be perceived by the human senses; the same applies in paragraph (5)) that is specified by Ministry of Finance Order).

The provisions of paragraph (1) apply only if an individual submits a paper-based statement giving the following information (hereinafter referred to as a "statement of tax-exempt savings" in this Article) by the day of the placement, as regards the Deposits and Savings, Jointly Managed Trust, specific form of Bond-Based Investment Trust Under Public Offering, or Securities to which the person seeks to apply the provisions of that paragraph for the first time, to the competent district director for the person's domicile, via the business office of a financial institution or other such place where the person makes the placement:

the submitter's name, date of birth, domicile, and individual number (meaning an individual number as prescribed in Article 2, paragraph (5) (Definitions) of the Act on the Use of Numbers to Identify a Specific Individual in Administrative Procedures (Act No. 27 of 2013); the same applies hereinafter), the fact that the submitter is a Person with a Disability or other eligible person, and the name and location of the business office of a financial institution or other such place concerned;

whether the submitter seeks to apply the provisions of paragraph (1) to Deposits or Savings, to a Jointly Managed Trust, to a specific form of bond-based investment trust under public offering, or to Securities;

the maximum limitation for the current balance of the Deposits or Savings, Jointly Managed Trust, specific form of bond-based investment trust under public offering, or Securities (for Securities, this means the current balance of Securities calculated based on their face value or equivalent amount) to which the submitter seeks to apply the provisions of paragraph (1) as regards the submitter's deposits, placements into trust, or purchases at the business office of the financial institution or other such place;

the name of any other business office of a financial institution or other such place via which the person has already submitted a statement of tax-exempt savings, and the maximum limitation as referred to in the preceding item which has been given in any such statement (if the person has submitted a statement as under the following paragraph, this means the maximum limitation after the change).

If an individual who has submitted a statement of tax-exempt savings seeks to change the maximum limitation set forth in item (iii) of the preceding paragraph that has been given in the statement (if the person has already submitted a statement as under this paragraph, this means the maximum limitation which is given in that statement as after the change), the individual must submit a paper-based statement indicating this; indicating the sum total of the maximum limitation set forth in item (iii) of the preceding paragraph and the maximum limitation set forth in item (iv) of that paragraph after the change; and giving any other necessary information (hereinafter referred to as a "declaration of change to the tax-exempt savings limit" in this Article), to the competent district director for the individual's domicile, via the business office of a financial institution or other such place through which the individual has submitted the statement of tax-exempt savings, pursuant to Cabinet Order.

Before submitting a statement of tax-exempt savings or a declaration of change to the tax-exempt savings limit, the individual submitting it must present the director of the business office of a financial institution or other such place prescribed in paragraph (3) or the preceding paragraph with the proof of physical disability passbook issued thereto pursuant to Article 15, paragraph (4) of the Act on Welfare of Physically Disabled Persons, basic survivors' pension certificate set forth in Article 15, item (iii) of the National Pension Act, or other documents specified by Cabinet Order, or, in lieu of presenting such documents, transmit, in the manner specified by Cabinet Order, an electronic certificate for signature or similar record (meaning an electronic certificate for signature or any other electronic or magnetic record that is specified by Ministry of Finance Order); notify the director of the individual's name, date of birth, domicile, and individual number and that the individual is a Person with a Disability or other eligible person; and obtain confirmation of the information of which the individual has notified the director, pursuant to Cabinet Order.

In a case referred to in paragraph (3) or paragraph (4), once the statement of tax-exempt savings or the declaration of change to the tax-exempt savings limit has been submitted to the district director prescribed in those provisions, it is deemed to have been submitted on the day that it was accepted at the business office of a financial institution or other such place prescribed in those provisions.

An individual as prescribed in paragraph (1) may not submit a statement falling under a category of statement of tax-exempt savings or declaration of change to the tax-exempt savings limit which is as follows, and the director of the business office of a financial institution or other such place prescribed in paragraph (3) or paragraph (4) may not accept such a statement nor may the director accept any further statement of tax-exempt savings submitted by an individual from whom the director has already accepted a statement of tax-exempt savings (other than as prescribed by Cabinet Order):

a statement of tax-exempt savings or declaration of change to the tax-exempt savings limit that gives a maximum limitation as set forth in paragraph (3), item (iii) (for a declaration of change to the tax-exempt savings limit, this means the maximum limitation as set forth in that item as after the change) that exceeds three million yen, or a statement of tax-exempt savings or declaration of change to the tax-exempt savings limit that gives an amount exceeding three million yen for that maximum limitation plus the sum total of the maximum limitations as set forth in item (iv) of that paragraph;

a statement of tax-exempt savings or declaration of change to the tax-exempt savings limit for which the confirmation under paragraph (5) has not been obtained.

In lieu of submitting an application or statement under the provisions of paragraph (1), paragraph (3), or paragraph (4), an individual as prescribed in those provisions may provide the business office of a financial institution or other such place prescribed in those provisions with the information required to be given in the application or statement by electronic or magnetic means (meaning a means that uses an electronic data processing system or any other means that uses information and communications technology). In such a case, the individual is deemed to have submitted the application or statement to the business office of a financial institution or other such place concerned.

When the provisions of the preceding paragraph apply, for the purpose of applying the provisions of paragraph (6), the phrase "the statement of tax-exempt savings or the declaration of change to the tax-exempt savings limit" in that paragraph is deemed to be replaced with "the information required to be given in the statement of tax-exempt savings or the information required to be given in the declaration of change to the tax-exempt savings limit", and the phrase "the day that it was accepted" is deemed to be replaced with "the day that it was provided".

Beyond what is prescribed in paragraph (2) through the preceding paragraph, Cabinet Order provides for the way of calculating the principal and face value or equivalent amount set forth in paragraph (1); the particulars of the submission, keeping on file, and management of applications to exempt savings from taxation; the particulars of the submission of statements of tax-exempt savings; the particulars of reporting if there has been a change in the information that an individual submitting a statement of tax-exempt savings has given in the statement or if the individual seeks to stop being subject to the provisions of that paragraph after having submitted a statement; and other necessary particulars concerning the application of that paragraph.