Local Tax Act

For the municipal tobacco tax (hereinafter in this Section referred to as the "tobacco tax"), the meanings of the terms set forth in the following items are as prescribed respectively in those items:

manufactured tobacco: means manufactured tobacco prescribed in Article 2, item (iii) of the Tobacco Business Act (including manufactured tobacco substitutes prescribed in Article 38, paragraph (2) of that Act);

specified seller: means a specified seller prescribed in Article 14, paragraph (1) of the Tobacco Business Act;

wholesale seller: means a wholesale seller prescribed in Article 9, paragraph (1) of the Tobacco Business Act;

tobacco retailer: means a tobacco retailer prescribed in Article 9, paragraph (6) of the Tobacco Business Act;

tobacco retailer's business office: means a business office prescribed in Article 22, paragraph (1) of the Tobacco Business Act.

The classification of manufactured tobacco is as set out below, and the classification of manufactured tobacco relating to manufactured tobacco substitutes is to be according to the nature of the manufactured tobacco substitute.

manufactured tobacco for smoking;

cigarettes;

cigars;

pipe tobacco;

cut tobacco;

heated tobacco;

manufactured tobacco for chewing;

manufactured tobacco for snuff.

Tobacco tax is imposed, in the municipality in which the business office of the tobacco retailer is located, on the manufactured tobacco relating to the sale, on the wholesale seller, etc. that makes the sale, where a manufacturer of manufactured tobacco, a specified seller or a wholesale seller (hereinafter in this Section referred to as a "wholesale seller, etc.") sells manufactured tobacco to a tobacco retailer (excluding, where that tobacco retailer is a wholesale seller, etc., the case of selling to that wholesale seller, etc. for wholesale).

In addition to the case prescribed in the preceding paragraph, where a wholesale seller, etc. sells manufactured tobacco to a person other than a wholesale seller, etc. or a tobacco retailer (hereinafter in this Section referred to as a "consumer, etc.") or consumes or otherwise disposes of it (hereinafter in this Section referred to as "consumption, etc."), tobacco tax is imposed on the manufactured tobacco relating to that sale or consumption, etc., on that wholesale seller, etc., in the municipality in which is located the office or place of business of that wholesale seller, etc. that directly manages the manufactured tobacco relating to that sale or consumption, etc.

Where a wholesale seller, etc. sells manufactured tobacco to a tobacco retailer, that wholesale seller, etc. must, as provided by Order of the Ministry of Internal Affairs and Communications, obtain from that tobacco retailer a document stating the quantity of the manufactured tobacco relating to that sale for each business office of that tobacco retailer and other necessary matters, and must retain it.

Where a wholesale seller, etc. sells manufactured tobacco for wholesale to a wholesale seller, etc. that is a tobacco retailer, the wholesale seller, etc. that made the sale must, as provided by Order of the Ministry of Internal Affairs and Communications, obtain from the wholesale seller, etc. that is a tobacco retailer a document certifying that the manufactured tobacco relating to the sale is for wholesale, and must retain it.

Where a wholesale seller, etc. has been sold manufactured tobacco by another wholesale seller, etc. under a commission from a tobacco retailer or a consumer, etc. to purchase it, and that wholesale seller, etc. delivers that manufactured tobacco to the person who made the commission, the provisions of paragraph (1) or (2) of the preceding Article apply by deeming that the wholesale seller, etc. sold that manufactured tobacco to the person who made the commission at the time of that delivery.

Where a wholesale seller, etc. has delivered manufactured tobacco to a tobacco retailer or a consumer, etc. as another performance prescribed in Article 482 of the Civil Code, or as the transfer of property rights relating to a gift prescribed in Article 549 or Article 553 of that Act or an exchange prescribed in Article 586, paragraph (1) of that Act, the provisions of paragraph (1) or (2) of the preceding Article apply by deeming that the wholesale seller, etc. sold that manufactured tobacco to the person who received the delivery at the time of that delivery.

Where a specified seller or a wholesale seller owns manufactured tobacco at the time when it discontinues its business or its registration under Article 11, paragraph (1) or Article 20 of the Tobacco Business Act is revoked, the provisions of paragraph (2) of the preceding Article apply by deeming that, at the time of that discontinuance or revocation, that specified seller or wholesale seller sold that manufactured tobacco to a consumer, etc. or consumed, etc. it.

Where a person other than a wholesale seller, etc. has sold or consumed, etc. manufactured tobacco owned by a wholesale seller, etc., the provisions of paragraph (1) or (2) of the preceding Article apply by deeming that the wholesale seller, etc. made the sale or consumption, etc.; provided, however, that where the sale or consumption, etc. is not attributable to the wholesale seller, etc., the provisions of paragraph (1) or (2) of the preceding Article apply by deeming the person who made that sale or consumption, etc. to be a wholesale seller, etc.

A heated tobacco smoking device that is filled with glycerin or other articles that turn into vapor by heating, or a mixture thereof (limited to those that have been the subject of sale, consumption, etc. or delivery by a company prescribed in Article 3, paragraph (1) of the Tobacco Business Act or other person specified by Cabinet Order, and those that have been imported; hereinafter in this Article referred to as a "specified heated tobacco smoking device") is deemed to be manufactured tobacco, and the provisions of this Section apply. In this case, the classification of manufactured tobacco relating to a specified heated tobacco smoking device is heated tobacco.

The tax base of tobacco tax is the number of pieces of manufactured tobacco relating to the sale under Article 465, paragraph (1) or the sale or consumption, etc. under paragraph (2) of that Article (referred to as "sale, etc." in paragraph (3), item (ii), (a)).

The number of manufactured tobacco referred to in paragraph (1) relating to heated tobacco is the total number of cigarettes converted by the following methods:

a method of converting 0.4 gram of the weight of heated tobacco (excluding the weight of the portion relating to filters and other things specified by Order of the Ministry of Internal Affairs and Communications) into 0.5 cigarette;

a method of converting into 0.5 cigarette the amount calculated, as provided by Cabinet Order, as the amount equivalent to the amount for one cigarette of the amount specified respectively below according to the following classifications of heated tobacco.

heated tobacco for which a retail price at the time of the sale, etc. (meaning a retail price approved under Article 33, paragraph (1) or (2) of the Tobacco Business Act) has been fixed: the amount equivalent to that retail price (excluding the amount equivalent to the consumption tax to be imposed under the provisions of the Consumption Tax Act and the amount equivalent to the local consumption tax to be imposed under the provisions of Section 3 of the preceding Chapter);

heated tobacco other than that listed in (a): the amount calculated in accordance with the rules of Article 10, paragraph (3), item (ii), (b) and paragraph (4) of the Tobacco Tax Act.

In addition to what is provided for in the preceding two paragraphs, the calculation for converting weight or amount into a number of cigarettes under these provisions and other matters necessary for the application of these provisions are specified by Cabinet Order.

The tax rate of tobacco tax is 6,552 yen per 1,000 cigarettes.

Where a wholesale seller, etc. sells or consumes, etc. any of the following manufactured tobacco, a municipality exempts the manufactured tobacco relating to that sale or consumption, etc. from tobacco tax:

the export of manufactured tobacco from Japan, or the sale of manufactured tobacco to an exporter (meaning a person engaged in the business of selling manufactured tobacco purchased from others and constantly exporting manufactured tobacco) made for the purpose of export;

the sale of manufactured tobacco for loading as ship's stores or aircraft stores (meaning ship's stores or aircraft stores prescribed in Article 2, paragraph (1), item (ix) or (x) of the Customs Act) onto a Japanese vessel (including a distant-water fishing vessel or other vessel equivalent thereto that is specified by Cabinet Order) or aircraft traveling between Japan and foreign countries;

the disposal of manufactured tobacco whose quality has deteriorated or whose packaging has been damaged or contaminated, or other manufactured tobacco found to be unfit for sale;

the sale or consumption, etc. of manufactured tobacco on which tobacco tax has already been imposed (excluding manufactured tobacco for which a deduction or refund has been or is to be made under the provisions of Article 477, paragraph (1) or (2)).

The provisions of the preceding paragraph (limited to the portion relating to item (i) or (ii)) apply only where a wholesale seller, etc., in respect of the sale or consumption, etc. of the manufactured tobacco listed in item (i) or (ii) of that paragraph, enters in the return under the provisions of Article 473, paragraph (1) or (2) the amount of tobacco tax relating to the manufactured tobacco for which it seeks the application of the preceding paragraph (limited to the portion relating to item (i) or (ii)), and retains, as provided by Order of the Ministry of Internal Affairs and Communications, documents sufficient to certify that the sale or consumption, etc. of that manufactured tobacco falls under the sale or consumption, etc. of the manufactured tobacco listed in item (i) or (ii) of that paragraph.

The provisions of paragraph (1) (limited to the portion relating to item (iii) or (iv)) apply only where a wholesale seller, etc., in respect of the sale or consumption, etc. of the manufactured tobacco listed in item (iii) or (iv) of that paragraph, has submitted, as provided by Order of the Ministry of Internal Affairs and Communications, to the mayor of the municipality to whom a return under the provisions of Article 473, paragraph (1) or (2) is to be submitted, documents sufficient to certify that the sale or consumption, etc. of that manufactured tobacco falls under the sale or consumption, etc. of the manufactured tobacco listed in paragraph (1), item (iii) or (iv).

Where, with respect to manufactured tobacco exempted from tobacco tax under the provisions of paragraph (1), item (i), an exporter prescribed in that paragraph sells it to a tobacco retailer or a consumer, etc. or consumes, etc. it, the provisions of Article 465 apply to that manufactured tobacco by deeming that exporter to be a wholesale seller, etc.