Local Tax Act

The amount of stated capital, etc. for each business year referred to in Article 72-12, item (ii) is the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as "past business years") the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year; provided, however, that for a corporation in liquidation, except in the case prescribed in paragraph (4), that amount is deemed to be nil.

the amount that, on or after April 1, 2010, was converted into stated capital out of surplus prescribed in Article 446 of the Companies Act (excluding that recorded as surplus after reducing the amount of stated capital or capital reserves pursuant to Article 447 or Article 448 of that Act, and limited to that specified by Order of the Ministry of Internal Affairs and Communications) pursuant to Article 450 of that Act, or out of all or part of the amount of retained earnings reserves pursuant to Article 448, paragraph (1), item (ii) of that Act;

the amount applied, during the period from April 1, 2001 to April 30, 2006, to cover a capital deficit through a reduction in capital or capital contributions (excluding where money or other assets were delivered), and the amount applied, out of the capital reserves prescribed in Article 289, paragraphs (1) and (2) of the Commercial Code prior to its amendment by Article 64 of the Act on Arrangement of Relevant Acts Incidental to Enforcement of the Companies Act (hereinafter in this item referred to as the "Companies Act Arrangement Act") (hereinafter in this item referred to as the "former Commercial Code") (including where these provisions are applied mutatis mutandis pursuant to Article 46 of the Limited Liability Companies Act prior to its repeal by Article 1 of the Companies Act Arrangement Act (hereinafter in this item referred to as the "former Limited Liability Companies Act")), to cover the capital deficit prescribed in Article 289, paragraph (1) and paragraph (2), item (ii) of the former Commercial Code (including where these provisions are applied mutatis mutandis pursuant to Article 46 of the former Limited Liability Companies Act);

the amount of surplus prescribed in Article 446 of the Companies Act (limited to that recorded as surplus after reducing the amount of stated capital or capital reserves pursuant to Article 447 or Article 448 of that Act and specified by Order of the Ministry of Internal Affairs and Communications) that, on or after May 1, 2006, was applied, pursuant to Article 452 of that Act, to cover a loss specified by Order of the Ministry of Internal Affairs and Communications.

Notwithstanding the main clause of the preceding paragraph, where the amount calculated pursuant to the main clause of that paragraph is less than the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year, the amount of stated capital, etc. for each business year referred to in Article 72-12, item (ii) is the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year.

With respect to the application of the preceding two paragraphs where a business year is less than one year, the phrase "the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as 'past business years') the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year" in paragraph (1) is deemed to be replaced with "the amount calculated by dividing by 12 the amount obtained by multiplying the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as 'past business years') the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year by the number of months in that business year", and the phrase "is the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year" in the preceding paragraph is deemed to be replaced with "is the amount calculated by dividing by 12 the amount obtained by multiplying the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year by the number of months in that business year". In this case, the number of months is calculated according to the calendar, and where it is less than one month it is one month, and where a fraction of less than one month arises it is discarded.

With respect to the application of paragraphs (1) and (2) for a business year in the course of which a group tax sharing subsidiary corporation is dissolved (excluding where it has received an order commencing bankruptcy proceedings; the same applies in paragraph (9)), the phrase "the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as 'past business years') the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year" in paragraph (1) is deemed to be replaced with "the amount calculated by dividing by 12 the amount obtained by multiplying the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as 'past business years') the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year by the number of months in the period from the first day of that business year to the date of dissolution", and the phrase "is the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year" in paragraph (2) is deemed to be replaced with "is the amount calculated by dividing by 12 the amount obtained by multiplying the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year by the number of months in the period from the first day of that business year to the date of dissolution". In this case, the number of months is calculated according to the calendar, and where it is less than one month it is one month, and where a fraction of less than one month arises it is discarded.

With respect to the application of paragraphs (1) and (2) for a business year in the course of which a group tax sharing subsidiary corporation in liquidation continues, the phrase "the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as 'past business years') the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year" in paragraph (1) is deemed to be replaced with "the amount calculated by dividing by 12 the amount obtained by multiplying the total amount of the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act as of the last day of each business year and the amount obtained by deducting from the total of the amounts listed in item (i) for each business year preceding that business year (hereinafter in this paragraph referred to as 'past business years') the total of the amounts listed in items (ii) and (iii) for past business years, adding to the result the amount listed in item (i) during that business year, and subtracting from that the amount listed in item (iii) during that business year by the number of months in the period from the date of continuation to the last day of that business year", and the phrase "is the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year" in paragraph (2) is deemed to be replaced with "is the amount calculated by dividing by 12 the amount obtained by multiplying the total of the amount of stated capital and the amount of capital reserves, or the amount of capital contributions, as of the last day of each business year by the number of months in the period from the date of continuation to the last day of that business year". In this case, the number of months is calculated according to the calendar, and where it is less than one month it is one month, and where a fraction of less than one month arises it is discarded.

For the calculation of the tax base for the capital levy of a domestic corporation in which the ratio of the amount listed in item (ii) to the amount listed in item (i) exceeds 50 percent, the amount calculated by multiplying the amount of stated capital, etc. by the ratio of the amount listed in item (ii) to the amount listed in item (i) is to be deducted from the amount of stated capital, etc.

the total of the amounts, calculated as provided by Cabinet Order, as the book value of total assets recorded on the balance sheet based on the finalized settlement of accounts of that domestic corporation for that business year and for the business year preceding that business year (for enterprise tax to be filed and paid pursuant to the proviso to Article 72-26, paragraph (1), the settlement of accounts for the interim period prescribed in that paragraph);

the total book value of the shares or capital contributions of specified subsidiary corporations (meaning other corporations in which that domestic corporation directly or indirectly holds shares or capital contributions exceeding 50 percent of the total number or total amount of issued shares or capital contributions (excluding those specified by Cabinet Order)) that are held by that domestic corporation at the end of that business year or at the end of the business year preceding that business year, as of each of those times.

With respect to the application of the preceding paragraph where a business year is less than one year, the phrase "100 billion yen" in the part other than the table in that paragraph is deemed to be replaced with "an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in that business year", the phrase "1 trillion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 1 trillion yen by the number of months in that business year", the phrase "100 billion yen" in the row for amounts of 100 billion yen or less in the table of that paragraph with "an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in that business year", the phrase "exceeds 100 billion yen" in the row for amounts exceeding 100 billion yen and 500 billion yen or less in that table with "exceeds an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in that business year", the phrase "500 billion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 500 billion yen by the number of months in that business year", the phrase "500 billion yen" in the row for amounts exceeding 500 billion yen and 1 trillion yen or less in that table with "an amount calculated by dividing by 12 the amount obtained by multiplying 500 billion yen by the number of months in that business year", and the phrase "1 trillion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 1 trillion yen by the number of months in that business year". In this case, the number of months is calculated according to the calendar, and where it is less than one month it is one month, and where a fraction of less than one month arises it is discarded.

With respect to the application of paragraph (7) for a business year in the course of which a group tax sharing subsidiary corporation is dissolved, the phrase "100 billion yen" in the part other than the table in that paragraph is deemed to be replaced with "an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in the period from the first day of that business year to the date of dissolution", the phrase "1 trillion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 1 trillion yen by the number of months in the period from the first day of that business year to the date of dissolution", the phrase "100 billion yen" in the row for amounts of 100 billion yen or less in the table of that paragraph with "an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in the period from the first day of that business year to the date of dissolution", the phrase "exceeds 100 billion yen" in the row for amounts exceeding 100 billion yen and 500 billion yen or less in that table with "exceeds an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in the period from the first day of that business year to the date of dissolution", the phrase "500 billion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 500 billion yen by the number of months in the period from the first day of that business year to the date of dissolution", the phrase "500 billion yen" in the row for amounts exceeding 500 billion yen and 1 trillion yen or less in that table with "an amount calculated by dividing by 12 the amount obtained by multiplying 500 billion yen by the number of months in the period from the first day of that business year to the date of dissolution", and the phrase "1 trillion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 1 trillion yen by the number of months in the period from the first day of that business year to the date of dissolution". In this case, the number of months is calculated according to the calendar, and where it is less than one month it is one month, and where a fraction of less than one month arises it is discarded.

With respect to the application of paragraph (7) for a business year in the course of which a group tax sharing subsidiary corporation in liquidation continues, the phrase "100 billion yen" in the part other than the table in that paragraph is deemed to be replaced with "an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in the period from the date of continuation to the last day of that business year", the phrase "1 trillion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 1 trillion yen by the number of months in the period from the date of continuation to the last day of that business year", the phrase "100 billion yen" in the row for amounts of 100 billion yen or less in the table of that paragraph with "an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in the period from the date of continuation to the last day of that business year", the phrase "exceeds 100 billion yen" in the row for amounts exceeding 100 billion yen and 500 billion yen or less in that table with "exceeds an amount calculated by dividing by 12 the amount obtained by multiplying 100 billion yen by the number of months in the period from the date of continuation to the last day of that business year", the phrase "500 billion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 500 billion yen by the number of months in the period from the date of continuation to the last day of that business year", the phrase "500 billion yen" in the row for amounts exceeding 500 billion yen and 1 trillion yen or less in that table with "an amount calculated by dividing by 12 the amount obtained by multiplying 500 billion yen by the number of months in the period from the date of continuation to the last day of that business year", and the phrase "1 trillion yen" with "an amount calculated by dividing by 12 the amount obtained by multiplying 1 trillion yen by the number of months in the period from the date of continuation to the last day of that business year". In this case, the number of months is calculated according to the calendar, and where it is less than one month it is one month, and where a fraction of less than one month arises it is discarded.

The tax base for the capital levy of a specified domestic corporation is the amount obtained by deducting from the amount of stated capital, etc. of that specified domestic corporation the amount calculated as provided by Cabinet Order, taking into consideration the scale of its business outside the area where this Act is enforced and other factors.

The tax base for the capital levy of a foreign corporation is the amount obtained by deducting from the amount of stated capital, etc. of that foreign corporation the amount calculated as provided by Cabinet Order, taking into consideration the scale of its business outside the area where this Act is enforced and other factors.