Article 180-2Special Provisions on Taxation of Interest and Similar Income from Trust Property

①If a trust company that is a Foreign Corporation (this includes a financial institution as prescribed in Article 1, paragraph (1) (Approval for Additional Business) of the Act on Engagement in Trust Business by Financial Institutions which is engaged in trust business as prescribed in that paragraph pursuant to that Act; referred to as a "foreign trust company" in the following paragraph) has an entry made in the books kept by a person paying domestic source income as set forth in Article 161, paragraph (1), item (viii) (other than (c) of that item) or item (ix) (Domestic Source Income), indicating that a public and corporate bond or similar interest as prescribed in Article 176, paragraph (1) (Special Provisions on Taxation of Interest and Similar Income from Trust Property) which constitutes a part of the trust property of a Securities Investment Trust as prescribed in that paragraph and of which the trust company has undertaken to act as trustee is a part of the trust property, or if the trust company has a record made of any other information prescribed by Ministry of Finance Order, the provisions of Article 7, paragraph (1), item (v) (Scope of a Foreign Corporation's Taxable Income), Article 178 (Tax Base for a Foreign Corporation's Income Taxes), and Article 179 (Tax Rates for a Foreign Corporation's Income Taxes) do not apply to domestic source income that is paid during the time that such information on the public and corporate bond or similar interest remains on the books.

②If a foreign trust company has a record made in the books kept by a person paying domestic source income as set forth in Article 161, paragraph (1), item (viii) (other than (c) of that item), item (ix), or item (xvi), indicating that a public and corporate bond or similar interest as prescribed in Article 176, paragraph (2) which constitutes a part of the trust property of a retirement pension trust as prescribed in that paragraph and of which the trust company has undertaken to act as trustee is a part of the trust property, or if the trust company has a record made of any other information prescribed by Ministry of Finance Order, the provisions of Article 7, paragraph (1), item (v), Article 178, and Article 179 do not apply to domestic source income that is paid during the time that such information on the public and corporate bond or similar interest remains on the books.

④The income taxes paid on the trust property of a group investment trust which are to be credited pursuant to the preceding paragraph are added to the distributions of proceeds from the group investment trust when those distributions of proceeds are calculated.

⑤Beyond what is prescribed in the preceding paragraph, Cabinet Order provides for particulars concerning the notice that the Foreign Corporation referred to in paragraph (3) gives to a person paid distributions of proceeds from a group investment trust, particulars concerning the amount of tax withheld as prescribed in Article 120, paragraph (1), item (iv) (Filing an Income Tax Return) which that person deducts from the income tax set forth in item (iii) of that paragraph and states in a return under that paragraph, and other necessary particulars concerning the application of the provisions of paragraph (3).