Local Tax Act

A designated city, etc. is to impose business office tax to cover the costs required for projects concerning the development and improvement of the urban environment.

With respect to business office tax, the meanings of the terms set forth in the following items are as prescribed respectively in those items.

Designated cities, etc.: means the following cities:

a city referred to in Article 252-19, paragraph (1) of the Local Autonomy Act;

a city other than those listed in (a) that has an existing urban area prescribed in Article 2, paragraph (3) of the Metropolitan Area Readjustment Act or a built-up city area prescribed in Article 2, paragraph (3) of the Kinki Area Adjustment Act; and

a city other than those listed in (a) and (b) with a population (meaning the population according to the results of the most recent national census publicly announced in the Official Gazette, or any other population specified by Cabinet Order as equivalent thereto) of 300,000 or more, which is designated by Cabinet Order.

Asset levy: means business office tax imposed with the floor area of a place of business as the tax base;

Worker levy: means business office tax imposed with the total salaries of workers as the tax base;

Floor area of a place of business: means the floor area specified by Cabinet Order as the floor area of a house for a place of business;

Total salaries of workers: means the total amount of stipends, salaries, wages and bonuses, and compensation of a similar nature (hereinafter in this item and the following paragraph referred to as "salary, etc.") paid to workers (including officers, and excluding persons with a disability specified by Cabinet Order (hereinafter in the following paragraph referred to as "persons with a disability") and persons aged 65 or older (excluding officers); the same applies hereinafter in this item and Article 701-43) of an office or place of business (hereinafter in this Section referred to as an "office or place of business") (where, among the workers of an office or place of business, there is a relative employed only in the business prescribed in Article 313, paragraph (4), including the deduction for a relative employed only in the business prescribed in paragraph (5) of that Article with respect to that person, and where, among persons aged 55 or older and under 65, there are persons specified by Cabinet Order who are subject to national employment subsidies under the provisions of the Employment Insurance Act (Act No. 116 of 1974) or other laws and regulations (hereinafter in the following paragraph referred to as "persons covered by employment improvement subsidies"), excluding an amount equivalent to one-half of the amount of salary, etc. of such persons);

House for a place of business: means the whole or part of a house (meaning a house referred to in Article 341, item (iii); the same applies hereinafter in this Section) that is actually used as an office or place of business;

Business year: means the business year prescribed in Article 72-13;

Taxation period for an individual: means the period that forms the basis for calculating the tax base of business office tax imposed on a business conducted by an individual, and is the period set forth below according to the classification of cases set forth below:

Cases other than those set forth in (b) through (d): from January 1 to December 31 of that year;

Where the business is discontinued in the middle of the year (excluding the case in (d)): from January 1 of that year to the date of that discontinuance;

Where the business is commenced in the middle of the year (excluding the case in (d)): from the date of that commencement to December 31 of that year;

Where the business is commenced in the middle of the year and discontinued in the middle of the same year: from the date of that commencement to the date of that discontinuance.

In the case of paragraph (1), item (v), whether a person is a person with a disability, a person aged 65 or older or a person covered by employment improvement subsidies is determined according to the circumstances at the time salary, etc. is paid to that person.

Business office tax is imposed on a business conducted by a corporation or an individual at an office or place of business, in the designated city, etc. in which that office or place of business is located, on the person conducting that business, at the sum of the asset levy amount and the worker levy amount.

Where there is a person who has a specially-related person (meaning an individual with a special relationship such as a relative, or a family corporation (including a corporation similar thereto), as specified by Cabinet Order; the same applies hereinafter in this paragraph), if there are special circumstances specified by Cabinet Order with respect to a business conducted by that specially-related person, then for the purposes of the assessment and collection of business office tax, that business is deemed to be a joint business of that person and the specially-related person.

An association or foundation that is not a corporation but has a representative or administrator designated (hereinafter in this Section referred to as an "association or foundation without juridical personality") is deemed to be a corporation, and the provisions of this Section concerning corporations apply to it.

Where a person who is legally regarded as conducting a business at an office or place of business is a mere nominal holder, and another person is found to be actually conducting that business, business office tax imposed on that business is to be imposed on that other person.