Income Tax Act

If the sum total of a Resident's gross income, retirement income, and timber income for the year exceeds the sum of any Casualty Loss deduction under Chapter II, Section 4 (Deductions from Income) and other deductions; and if the sum total of income taxes calculated when the Resident's gross income, retirement income, and timber income less the aforementioned deductions taken pursuant to Article 87, paragraph (2) (Procedures for Deductions from Income) are deemed to be the Resident's taxable gross income, taxable retirement income, and taxable timber income and Article 89 (Tax Rates) is applied, exceeds dividend tax credits (excluding the case where there is an amount of foreign tax credit that could not be fully deducted in calculating the amount of income taxes set forth in item (iii), the case where there is an amount of tax withheld prescribed in item (iv) that could not be fully deducted in calculating the amount set forth in that item, and the case where there is an amount of prepaid taxes that could not be fully deducted in calculating the amount set forth in item (v)), the Resident must file a return with the district director during the third period (meaning during the period from February 16 to March 15 of the year following the year in question; hereinafter the same applies in this Section) giving the following information, unless the Resident files a return under Article 123, paragraph (1) (Filing Tax Returns Showing Losses). In such a case, if a Resident who has a salary or other wage prescribed in Article 28, paragraph (1) (Salary Income) to be paid in that year to which the provisions of Article 190 (Year-End Adjustments) have been applied files that return, the Resident may, for the information specified by Ministry of Finance Order out of the following information, make the entries specified by Ministry of Finance Order:

the gross income, retirement income, and timber income for the year; the casualty loss deduction as under Chapter II, Section 4 and other deductions; and the taxable gross income, taxable retirement income, and taxable timber income or Net Loss for the year;

if the Resident is applying Article 90, paragraph (1) (Averaging Taxation on Fluctuating Income and Ad Hoc Income), the Fluctuating Income and Ad Hoc Income and the average taxable amount prescribed in paragraph (3) of that Article for the year;

the income taxes calculated when Chapter III (Calculating the Amount of Taxes) is applied for the taxable gross income, taxable retirement income, and taxable timber income set forth in item (i);

the income taxes set forth in the preceding item less any income taxes that have been or will be collected through withholding from Each Class of Income that is used as the basis for calculating gross income and retirement income or Net Loss as set forth in item (i) (or the income taxes that have been or will be so collected less any part thereof that constitutes an amount to be refunded based on the Resident's having filed a return as under Article 127, paragraphs (1) through (3) (Filing a Tax Return If the Taxpayer Will Become Absent From Japan Partway Through the Year) or based on the income tax connected with that return having been subject to a Reassessment; and less any part thereof that constitutes an amount prescribed by Cabinet Order; hereinafter referred to as the "amount of tax withheld" in this item and the following item);

the amount arrived at when any prepaid taxes for the year are deducted from the amount of income taxes set forth in item (iii) (or from the amount set forth in the preceding item, if there is any amount of tax withheld);

Income in Each Class that was used as the basis for calculating the gross income set forth in item (i) which constitutes capital gains, occasional income, miscellaneous income, Fluctuating Income not falling under the category of miscellaneous income, or Ad Hoc Income not falling under the category of miscellaneous income, and the income taxes that were or should be Withheld from occasional income, miscellaneous income, or Ad Hoc Income not falling under the category of miscellaneous income;

an indication that the person is a Special Farming Income Earner in the year, if this is the case;

the basis for calculating the amounts set forth in items (i) through (vi), and any information prescribed by Ministry of Finance Order.

The prepaid taxes as prescribed in the preceding paragraph means the sum total of the following tax amounts (or the sum total of the following tax amounts less any part of those amounts that constitutes an amount to be refunded based on the taxpayer's having filed a return as under Article 127, paragraphs (1) through (3) or based on the income taxes connected with such a return having been subject to a Reassessment):

Tax Prepayments;

the income taxes that have been or are required to be paid for the year, pursuant to the provisions of Article 130 (Payment upon Filing If the Taxpayer Will Be Absent From Japan) or Article 35, paragraph (2) (Payment When Filing After the Deadline) of the Act on General Rules for National Taxes, due to the taxpayer's falling under the provisions of Article 127, paragraph (1).

If filing a return under paragraph (1), a Resident as set forth in one of the following items must include the document that the item prescribes with that return or submit it at the time of filing the return, as prescribed by Cabinet Order:

a Resident making an entry for a Casualty Loss deduction, social insurance premium deduction (but only one for social insurance premiums as set forth in Article 74, paragraph (2), item (v) (Social Insurance Premium Deduction)), deduction for small enterprise-based mutual aid premiums and similar payments, life insurance premium deduction, earthquake insurance premium deduction, or donation deduction in a return under paragraph (1): a document evidencing particulars such as the amount used as the basis for calculating the amount of the deduction that the Resident is taking;

a Resident making an entry, in a return under paragraph (1), for a disability deduction, spousal deduction, or special spousal deduction relating to a relative who is a Nonresident according to the circumstances at the time of the determination under Article 85, paragraph (2) or (3) (Time of Determination of Dependents and Similar Persons): a document evidencing that the relative who is a Nonresident related to those deductions falls under the category of a relative of the Resident, and a document making it clear that the living expenses of that relative who is a Nonresident are paid from the same resources as the Resident;

a Resident making an entry, in a return under paragraph (1), for a deduction for Dependents or special deduction for specified relatives relating to a relative who is a Nonresident according to the circumstances at the time of the determination under Article 85, paragraph (3): a document evidencing that the relative who is a Nonresident related to those deductions falls under the category of a relative of the Resident, a document making it clear that the living expenses of that relative who is a Nonresident are paid from the same resources as the Resident, and, if that relative who is a Nonresident is 30 years of age or older but younger than 70 (excluding the case where that relative who is a Nonresident is a Person with a Disability), a document evidencing that the relative falls under the category of a person set forth in Article 2, paragraph (1), item (xxxiv)-2, (b)(1) (Definitions) or a document making it clear that the relative falls under the category of a person set forth in (b)(3) of that item;

a Resident making an entry for a working student deduction as a person set forth in Article 2, paragraph (1), item (xxxii), (b) or (c) in a return under paragraph (1): a document evidencing that the Resident falls under that category of person.

If a Resident making an entry for a medical expense deduction in a return under paragraph (1) files that return, the Resident must attach the following documents to that return:

a detailed statement giving the amount of medical expenses prescribed in Article 73, paragraph (2) (Medical Expense Deduction) (referred to as "medical expenses" in the following paragraph) that forms the basis for calculating the amount of the medical expense deduction to be taken as stated in the return, and other matters specified by Ministry of Finance Order (referred to as the "amount of medical expenses claimed and related details" in this paragraph) (excluding, if the document set forth in the following item is attached to the return, the amount of medical expenses claimed and related details stated in that document);

a document specified by Ministry of Finance Order as a document by which an insurer prescribed in Article 7, paragraph (2) (Definitions) of the Act on Assurance of Medical Care for Elderly People, a wide-area union for latter-stage elderly medical care prescribed in Article 48 (Establishment of Wide-Area Unions) of that Act, the Organization for Medical Information Infrastructure and Medical Fee Review and Payment, or a Federation of National Health Insurance Associations prescribed in Article 45, paragraph (5) (Medical Fees for Insurance Medical Institutions) of the National Health Insurance Act gives notice of the amount of medical expenses paid by the Resident, which states the amount of medical expenses claimed and related details.

If a return referred to in the preceding paragraph has been filed, the district director may, when the district director finds it necessary, request the person who filed the return (referred to as a "person claiming the medical expense deduction" in this paragraph) to present or submit documents by which the persons who received the medical expenses stated in the document set forth in item (i) of the preceding paragraph evidence that receipt, until the day on which five years have elapsed from the day following the Filing Deadline for that return (or, if a request for Reassessment under Article 23, paragraph (1) (Request for Reassessment) of the Act on General Rules for National Taxes has been made within six months before that day, the day on which six months have elapsed from the day on which that request for Reassessment was made). In such a case, if a request under the first sentence of this paragraph has been made, the person claiming the medical expense deduction must present or submit those documents.

If a Resident conducting business that is meant to generate real property income, business income, or timber income in the relevant year files a return pursuant to paragraph (1) (unless the return is a Blue Return), or if a Resident conducting business that is meant to generate miscellaneous income in the relevant year whose amount of revenue from that business for the year before the previous year exceeds 10,000,000 yen files a return pursuant to that paragraph, the Resident must include a document that indicates the gross revenue for the year arising from those types of income and the details of the necessary expenses with the return, pursuant to Ministry of Finance Order.

If filing a return under paragraph (1), a Resident that was a Non-Permanent Resident for any part of the year must include a document giving the nationality thereof, the period during which the Resident was domiciled or resided in Japan, and any other information prescribed by Ministry of Finance Order, with the return.