Income Tax Act

If a corporation has 15 or more branch offices, factories, and other places of business, and at two-thirds or more of its places of business, the director or chief officer of that place of business or any other person in charge of business at that place of business, the relative of the person in charge or any other individual uniquely related to the person in charge as prescribed by Cabinet Order formerly conducted business at that place of business as an individual, the district tax office director, in making a Reassessment or reaching a Tax-Office Decision, may presume that the person in charge of each of the corporation's places of business has the enjoyment of the proceeds arising from that place of business, unless all deposits and borrowings of funds, purchases and sales of commodities, and other transactions at the corporation's places of business are conducted in the name of the corporation.

If a Reassessment (including a determination or ruling on an appeal, or a judgment in a lawsuit, concerning a disposition or similar action with respect to the income tax (meaning a disposition on a request for Reassessment or a determination under Article 25 (Determination) of the Act on General Rules for National Taxes); hereinafter referred to as a "Reassessment or similar decision" in this Article and the following Article) is made with respect to a Resident's income taxes for any year, and the amount set forth in Article 122, paragraph (1), item (i) or item (ii) (Filing a Return to Receive a Refund) or Article 123, paragraph (2), item (vi) or item (vii) (Filing Tax Returns Showing Losses) increases as a result of the Reassessment or similar decision, the district director refunds to the Resident income taxes in an amount equivalent to the increase.

In a case as referred to in the preceding paragraph, if any part of the taxes withheld as prescribed in Article 122, paragraph (1), item (ii) or Article 123, paragraph (2), item (vii) which is used as the basis for calculating the amount of the refund under that paragraph has not yet been paid over to the national government, an amount equivalent to the part of the refund under the preceding paragraph which is from tax withheld that has not yet been paid over is not refunded until that part of the tax withheld is paid over.

When the amount of interest on refund under paragraph (1) is calculated, the period referred to in Article 58, paragraph (1) (Interest on Refunds) of the Act on General Rules for National Taxes which serves as the basis for the calculation is the period beginning on the day after the day on which one month has elapsed from the day after the date of the Reassessment or similar decision referred to in paragraph (1) (or, if the Reassessment or similar decision is one set forth in one of the following items, the date specified in the relevant item; hereinafter referred to as the "one-month date" in this paragraph) (or beginning on the day after the date of payment, for a refund involving tax withheld as prescribed in the preceding paragraph that is paid after the one-month date), and ending on the day on which the tax-office decision to pay the refund is reached or on the day on which the refund is Appropriated to cover a required tax payment (or ending on the day on which the refund first could have been Appropriated, if this is before the date of the Appropriation):

a Reassessment based on a request for Reassessment (including a determination or ruling on an appeal, or a judgment in a lawsuit, concerning a disposition on that request; hereinafter the same applies in this item): the day on which three months have elapsed from the day after the date of the request or the day on which one month has elapsed from the day after the date of the Reassessment based on the request, whichever comes first;

a Reassessment in connection with a determination under Article 25 of the Act on General Rules for National Taxes (including a determination or ruling on an appeal, or a judgment in a lawsuit, concerning that determination, and excluding a Reassessment based on a request for Reassessment and a Reassessment made on the grounds that the economic results produced by a void act included in the facts that served as the basis for calculating the gross income, retirement income, and timber income for the year have been lost because the act is void, that a voidable act included in those facts has been rescinded, or any other grounds specified by Cabinet Order as equivalent thereto): the date of the determination.

If a refund under paragraph (1) is Appropriated to cover unpaid income taxes for the year of the Reassessment or similar decision referred to in that paragraph, interest on refund does not accrue on the part of the refund so Appropriated and the tax on delinquency is waived for the part of the income taxes covered by the Appropriation.

Beyond what is prescribed in the preceding three paragraphs, Cabinet Order provides for the method of making an Appropriation of a refund under paragraph (1) (including the interest on refund on that refund) and for other necessary particulars concerning the application of the provisions of that paragraph.

If the amount set forth in Article 122, paragraph (1), item (iii) (Filing a Return to Receive a Refund) or Article 123, paragraph (2), item (viii) (Filing Tax Returns Showing Losses) increases as a result of a Reassessment or similar decision with respect to a Resident's income taxes for any year, the district director issues the Resident a refund of the prepaid taxes prescribed in those provisions (referred to as "prepaid taxes" in the following paragraph through paragraph (4)) in an amount equivalent to the increase.

If the district director issues a refund under the preceding paragraph and the taxpayer has paid a tax on delinquency in respect of prepaid taxes in the year prescribed in that paragraph, the director also refunds the amount calculated pursuant to Cabinet Order as the part of the tax on delinquency which was for the prepaid taxes that are being refunded pursuant to that paragraph.

When the amount of interest on refund under paragraph (1) is calculated, the period referred to in Article 58, paragraph (1) (Interest on Refunds) of the Act on General Rules for National Taxes which serves as the basis for the calculation is the period beginning on the day after that on which the prepaid taxes that are required to be refunded pursuant to the provisions of paragraph (1) are paid (or beginning on the day after the payment due date, if the prepaid taxes are paid prior to the payment due date) and ending on the day on which the tax-office decision to pay the refund is reached or on the day on which the refund is Appropriated to cover a required tax payment (or ending on the day on which the refund first could have been Appropriated, if this is before the date of the Appropriation; referred to as the "date of Appropriation" in item (ii)); provided, however, that none of the days from the day after the Filing Deadline for the income tax for that year (or the day after the date of payment, if the prepaid taxes are paid after that Filing Deadline) up to whichever of the following days comes first are included as part of that period:

the day on which one month has elapsed from the day after the date of the Reassessment or similar decision referred to in paragraph (1) (or, if the Reassessment or similar decision is one set forth below, the date specified below for it);

a Reassessment based on a request for Reassessment (including a decision or ruling, or a judgment, on an appeal or action concerning a disposition on that request; the same applies in (a)): the day on which three months have elapsed from the day after the date of that request or the day on which one month has elapsed from the day after the date of the Reassessment based on that request, whichever comes first;

a Reassessment of a determination under Article 25 (Determination) of the Act on General Rules for National Taxes (including a decision or ruling, or a judgment, on an appeal or action concerning that determination, and excluding a Reassessment based on a request for Reassessment and a Reassessment made on the ground that economic results produced by an invalid act included in the facts used as the basis for calculating the amount of total income, the amount of retirement income, and the amount of timber income for the year have been lost because that act is invalid, that a voidable act included in those facts has been rescinded, or on any other ground prescribed by Cabinet Order as equivalent to these): the date of that determination;

the day on which the decision to pay for that refund is made or the date of Appropriation for that refund.

If a refund under paragraph (1) is Appropriated to cover unpaid income taxes for a year in which prepaid taxes are used as the basis for calculating the amount of the refund, interest on refund does not accrue on the part of the refund so Appropriated and the tax on delinquency is waived for the part of the income taxes covered by the Appropriation.

Interest on refund does not accrue on a refund under paragraph (2).

Beyond what is prescribed in the preceding three paragraphs, Cabinet Order provides for the method of making an Appropriation of refunds under paragraph (1) (including interest on refund for such refunds) and for other necessary particulars concerning the application of the provisions of that paragraph or paragraph (2).