Article 161Domestic Source Income

一if a Nonresident conducts business through a permanent establishment, the income (including income arising from the transfer of the permanent establishment) that should be attributed to the permanent establishment if it were a business operator conducting business independently of the Nonresident, taking into consideration the functions performed by the permanent establishment, the assets used at the permanent establishment, the internal dealings between the permanent establishment and a place of business or similar place of the Nonresident (meaning a place of business for the business of the Nonresident or anything else prescribed by Cabinet Order as equivalent thereto, other than that permanent establishment; the same applies in the following paragraph and paragraph (2) of the following Article), and other circumstances;

二income arising from investing or holding assets located in Japan (other than income falling under any of items (viii) through (xvi));

三income prescribed by Cabinet Order as arising from the transfer of assets located in Japan;

四profits from business that the earner conducts through a permanent establishment under a partnership agreement as prescribed in Article 667, paragraph (1) (Partnership Agreements) of the Civil Code (including any contract prescribed by Cabinet Order as being similar thereto; hereinafter the same applies in this item), which the earner is distributed based on such an agreement and which are as prescribed by Cabinet Order;

五consideration for the transfer of a piece of land, a right on land, or a building and associated facilities or structures, if it is located in Japan (other than consideration prescribed by Cabinet Order);

七consideration for renting out real property located in Japan, a right on real property located in Japan, or a right of quarrying pursuant to the provisions of the Quarrying Act (Act No. 291 of 1950) (this includes the establishment of a superficies right or a right of quarrying or doing anything else that gives another person the use of real property, a right on real property, or a right of quarrying), for establishing a mining lease pursuant to the Mining Act (Act No. 289 of 1950), or for renting out a vessel or aircraft, to a Resident or Domestic Corporation;

八interest and similar income as prescribed in Article 23, paragraph (1) (Interest Income), which is as follows:

イinterest on Japanese government bonds, Japanese municipal bonds, or bonds issued by a Domestic Corporation;

ロinterest on bonds issued by a Foreign Corporation which relates to business conducted through a permanent establishment of the Foreign Corporation;

ハinterest on Deposits and Savings deposited with a business office or other office, or with any other facility equivalent thereto (hereinafter referred to as a "business office" in this Part), which is located in Japan;

ニa distribution of proceeds from a Jointly Managed Trust, Bond Investment Trust, or Bond-Based Investment Trust Under Public Offering which has been established as a trust at a business office located in Japan.

九dividends and similar income prescribed in Article 24, paragraph (1) (Dividend Income), which are as follows:

イdividends of surplus, dividends of profits, distributions of surplus, distributions of monies, or interest on funds prescribed in Article 24, paragraph (1) which the earner receives from a Domestic Corporation;

ロa distribution of proceeds from an Investment Trust (other than a Bond Investment Trust or Bond-Based Investment Trust Under Public Offering) or a Specified Trust That Issues Beneficiary Certificates, which has been established as a trust at a business office located in Japan.

十interest from a loan that the earner has provided to a person doing business in Japan (including monies equivalent to such a loan) in connection with that business (this excludes interest as prescribed by Cabinet Order but includes any amount prescribed by Cabinet Order as margin arising from purchase and sale transactions involving bonds with buyback or resale agreements which are prescribed by Cabinet Order);

十一any of the following royalties or consideration that the earner receives from a person doing business in Japan in connection with that business:

イroyalties for an industrial property right or any other right to the use of technology, a production method based on special technology, or any equivalent right or method; or consideration for the transfer thereof;

ロroyalties for a copyright (including print rights, neighboring rights, and any equivalent rights), or consideration for the transfer thereof;

ハroyalties for machinery, equipment, or any other tool prescribed by Cabinet Order.

十二a salary, remuneration, or pension as follows:

イpay, compensation, wages, annual allowances, bonuses; salary in the nature thereof;, or remuneration in the nature thereof for providing personal services; which arises from the earner's working or providing personal services in Japan (including work done outside Japan by a person acting as the officer of a Domestic Corporation, and any other provision of personal services prescribed by Cabinet Order);

ロa public pension or retirement package as prescribed in Article 35, paragraph (3) (Definition of Public Pensions and Retirement Packages) (other than one as prescribed by Cabinet Order);

ハseverance pay and other such compensation as prescribed in Article 30, paragraph (1) (Retirement Income) based on work done or personal services provided by the recipient of the severance pay and other such compensation during a period that the recipient was a Resident (including work done by a person acting as the officer of a Domestic Corporation during the period when the person was a Nonresident, and other provision of personal services prescribed by Cabinet Order).

十三income prescribed by Cabinet Order as a monetary award for doing advertising for business conducted in Japan;

十四a pension that the earner is paid based on an insurance policy concluded by a life insurance company as prescribed in Article 2, paragraph (3) (Definitions) of the Insurance Business Act or a casualty insurance company as prescribed in paragraph (4) of that Article, or on any other contract for a pension prescribed by Cabinet Order, concluded through a business office located in Japan or through a person acting as an agent for the conclusion of such contracts in Japan (other than a pension falling under the pensions set forth in Article 209, item (ii) (Pensions Exempt from Withholding)), and which does not fall under the category of a pension as in item (xii)(b) (including a surplus distributed or a rebate refunded based on such a contract for a pension on or after the start date for the payment of the pension, and a lump-sum payment made in lieu of paying a pension based on such a contract);

十五compensation for periodic deposits, finance charges, profits, or margin profits as follows:

イcompensation for periodic deposits as set forth in Article 174, item (iii) (Tax Base for a Domestic Corporation's Income Taxes), linked to installment deposits accepted by a business office located in Japan;

ロcompensation for periodic deposits set forth in Article 174, item (iv), linked to installment deposits as prescribed in that item which are accepted by a business office located in Japan;

ハfinance charges set forth in Article 174, item (v) linked to a contract as prescribed in that item which is concluded through a business office located in Japan;

ニprofits set forth in Article 174, item (vi) linked to a contract as prescribed in that item which is concluded through a business office located in Japan;

ホmargin profits set forth in Article 174, item (vii) linked to Deposits and Savings that are accepted by a business office located in Japan;

ヘmargin profits set forth in Article 174, item (viii) linked to a contract as prescribed in that item which is concluded through a business office located in Japan or through a person acting as an agent for the conclusion of contracts in Japan;

十六a distribution of proceeds based on a silent partnership agreement (this includes anything prescribed by Cabinet Order as an agreement equivalent thereto) for capital contributions made to a person doing business in Japan.

十七beyond what is set forth in the preceding items, income prescribed by Cabinet Order as income whose source is in Japan.