Income Tax Act

Income taxes are not imposed on interest and similar income, dividends and similar income, compensation for periodic deposits, finance charges, profits, margin profits, and distributions of proceeds set forth in the items of Article 174 (Tax Base for a Domestic Corporation's Income Taxes) paid to a Domestic Corporation as set forth in Appended Table I (as regards distributions of proceeds from a beneficial interest in a Loan Trust, the non-imposition of income taxes is limited to the part equivalent to the amount of monies calculated pursuant to Cabinet Order as coming from a period during which the Domestic Corporation continuously held the beneficial interest).

Income taxes are not imposed on income arising from the trust property of a public interest trust as prescribed in Article 2, paragraph (1), item (i) (Definitions) of the Act on Public Interest Trusts (Act No. 30 of 2024) (referred to as a "public interest trust" in Article 59, paragraph (1), item (i) (Special Provisions on Capital Gains and Gifts), Article 60, paragraph (1), item (i) (Acquisition Costs of Assets Acquired as Gifts), Article 60-2, paragraph (6) (Special Provisions on Capital Gains upon Departure from Japan), Article 60-3, paragraph (6) (Special Provisions on Capital Gains If Assets Are Transferred to a Nonresident by Gift or Similar), Article 67-3, paragraph (10) (Calculation of the Amount of Income Relating to Trusts), and Article 78, paragraph (2), item (iv) (Donation Deduction)) or of a participant protection trust as prescribed in Article 2, paragraph (11) (Definitions) of the Act on Book-Entry Transfer of Corporate Bonds and Shares (as regards income relating to distributions of proceeds from a beneficial interest in a Loan Trust, the non-imposition of income taxes is limited to the part equivalent to the amount of monies calculated pursuant to Cabinet Order as coming from a period during which the beneficial interest continuously belonged to the trust property of the public interest trust or the participant protection trust).

The part of the provisions of the preceding two paragraphs that relates to interest, distributions of proceeds, or dividends of surplus prescribed in Article 24, paragraph (1) (Dividend Income) (hereinafter referred to as "interest and similar income" in this paragraph) from public and corporate bonds or from any beneficial interest in a Loan Trust, Investment Trust, or specified-purpose trust as provided by Cabinet Order (hereinafter referred to as a "public and corporate bond or similar interest" in this paragraph) applies only if a Domestic Corporation or the trustee of a public interest trust or participant protection trust as prescribed in these provisions manages the public and corporate bond or similar interest through entries or records in a transfer account book as prescribed in the Act on Book-Entry Transfer of Corporate Bonds and Shares or by other means prescribed by Cabinet Order, and has submitted a statement to the district director, pursuant to Cabinet Order, indicating its intention to seek the application of these provisions to interest and similar income from the public and corporate bond or similar interest and giving other information provided for by Ministry of Finance Order, via the person paying the interest and similar income from the public and corporate bond or similar interest (referred to as the "payer" in the following paragraph).

In lieu of submitting a statement under the provisions of the preceding paragraph, a Domestic Corporation or the trustee of a public interest trust or participant protection trust as prescribed in that paragraph may provide the payer referred to in that paragraph with the information required to be given in the statement by the electronic or magnetic means prescribed in paragraph (8) of the preceding Article. In such a case, the Domestic Corporation or the trustee of the public interest trust or participant protection trust is deemed to have submitted the statement to the payer.