Income Tax Act

If there is any loss on assets owned by a Resident or that Resident's spouse or any other relative whose living expenses are paid from the same resources as the Resident (other than assets prescribed in Article 62, paragraph (1) (Loss of Assets Not Necessary in Everyday Life, Due to Disaster) or Article 70, paragraph (3) (Amount of Disaster-Related Loss on Business Assets)) due to Disaster, robbery, or misappropriation (this includes if the Resident pays any unavoidable expense prescribed by Cabinet Order in connection with a Disaster, robbery, or misappropriation), and the total amount of such losses for the year (including any amount spent on the aforementioned unavoidable expenses but excluding any part of the loss covered by insurance benefits, compensation for damage, or anything similar to these; hereinafter referred to as the "amount of losses" in this paragraph) exceeds the amount that is set forth in any of the following items for the category of case set forth in the item, the part of the total amount of losses that exceeds the amount set forth in the relevant item is allowed as a deduction from the Resident's gross income, retirement income, or timber income for the year:

if the amount of disaster-related expenses (meaning the part of the amount of losses that Cabinet Order prescribes as the amount spent in direct connection with Disasters; hereinafter the same applies in this paragraph) that forms a part of the amount of losses for the year is 50,000 yen or less (or if there were no disaster-related expenses for the year):10% of the sum total of the Resident's gross income, retirement income, and timber income for the year;

if the amount of disaster-related expenses that forms a part of the amount of losses for the year exceeds 50,000 yen:either the amount arrived at when disaster-related expenses in excess of 50,000 yen are deducted from the total amount of losses for the year, or the amount set forth in the preceding item, whichever is lower;

if all amounts of losses for the year constitute disaster-related expenses:either 50,000 yen or the amount set forth in item (i), whichever is lower.

Cabinet Order provides for the necessary particulars concerning the calculation of the amount of losses prescribed in the preceding paragraph.

A deduction under paragraph (1) is referred to as a casualty loss deduction.

If a Resident pays, in any year, medical expenses for the Resident or for the Resident's spouse or any other relative whose living expenses are paid from the same resources as the Resident, and the total amount of those medical expenses paid during the year (excluding any part covered by insurance benefits, compensation for damage, or anything similar to these) exceeds the amount equivalent to 5% of the total of the Resident's gross income, retirement income, and timber income for the year (or 100,000 yen, if that amount exceeds 100,000 yen), the amount of the excess (or 2,000,000 yen, if that amount exceeds 2,000,000 yen) is allowed as a deduction from the Resident's gross income, retirement income, or timber income for the year.

The medical expenses prescribed in the preceding paragraph are the consideration for medical examination or treatment by a physician or dentist, for the purchase of pharmaceuticals necessary for treatment or medical care, and for the provision of other medical care or related personal services, which Cabinet Order prescribes as being recognized as ordinarily necessary.

A deduction under paragraph (1) is referred to as a medical expense deduction.

If a Resident pays, in any year, social insurance premiums to be borne by the Resident or by the Resident's spouse or any other relative whose living expenses are paid from the same resources as the Resident, or if those premiums are deducted from the Resident's pay, the amount paid or the amount deducted is allowed as a deduction from the Resident's gross income, retirement income, or timber income for the year.

The social insurance premiums prescribed in the preceding paragraph are the following premiums and other equivalent premiums prescribed by Cabinet Order (excluding premiums that are part of a person's pay as set forth in Article 9, paragraph (1), item (vii) (Nontaxability of Service Allowances)):

health insurance premiums that the taxpayer bears as an insured person pursuant to the Health Insurance Act (Act No. 70 of 1922);

national health insurance premiums under the National Health Insurance Act (Act No. 192 of 1958) or national health insurance tax under the Local Tax Act;

premiums under the Act for Ensuring Medical Care for the Elderly (Act No. 80 of 1982);

long-term care insurance premiums under the Long-Term Care Insurance Act (Act No. 123 of 1997);

labor insurance premiums that the taxpayer bears as a person covered by employment insurance pursuant to the Act on Collection of Labor Insurance Premiums (Act No. 84 of 1969);

national pension premiums that the taxpayer bears as an insured person pursuant to the National Pension Act, and installments that the taxpayer bears as a member of the National Pension Fund;

farmers' pension premiums that the taxpayer bears as an insured person pursuant to the Act on the Farmers' Pension Fund, I.A.A.;

employees' pension insurance premiums that the taxpayer bears as an insured person pursuant to the Employees' Pension Insurance Act;

mariners' insurance premiums that the taxpayer bears as an insured person pursuant to the Mariners' Insurance Act;

installments under the National Public Servants Mutual Aid Association Act;

installments under the Local Public Officers Mutual Aid Association Act (including special installments);

installments that the taxpayer bears as a member pursuant to the Private School Personnel Mutual Aid Association Act;

payments pursuant to Article 59 (Payment of Public Retirement Packages) of the Public Officers Pension Act (including as applied mutatis mutandis pursuant to other Acts).

A deduction under paragraph (1) is referred to as a social insurance premium deduction.

If a Resident pays small enterprise-based mutual aid premiums and similar payments in any year, the amount paid is allowed as a deduction from the Resident's gross income, retirement income, or timber income for the year.

The small enterprise-based mutual aid premiums and similar payments prescribed in the preceding paragraph are the following installments:

installments under a mutual relief contract prescribed in Article 2, paragraph (2) (Definitions) of the Small Enterprise Mutual Relief Projects Act (Act No. 102 of 1965) (excluding one prescribed by Cabinet Order);

corporate-type pension participant contributions prescribed in Article 3, paragraph (3), item (vii)-2 (Approval of Pension Rules) of the Defined Contribution Pension Act (Act No. 88 of 2001) or individual-type pension participant contributions prescribed in Article 55, paragraph (2), item (iv) (Approval of Pension Rules) of that Act;

installments under a contract related to a mutual aid system prescribed by Cabinet Order as prescribed in Article 9, paragraph (1), item (iii), (c) (Nontaxability of Pensions and Similar Benefits).

A deduction under paragraph (1) is referred to as a deduction for small enterprise-based mutual aid premiums and similar payments.