Local Tax Act

The amount of the enterprise tax on a business conducted by a corporation (excluding the electricity supply business, gas supply business, insurance business and trade insurance business; the same applies in paragraph (5)) is the amount specified in the relevant item in accordance with the category of corporations listed in the following items:

a corporation listed in Article 72-2, paragraph (1), item (i), (a): the total of the following amounts:

the amount obtained by multiplying the value added for each business year by the rate determined using the standard tax rate of 1.2/100;

the amount obtained by multiplying the amount of stated capital, etc. for each business year by the rate determined using the standard tax rate of 0.5/100;

the amount obtained by multiplying the income for each business year by the rate determined using the standard tax rate of 1/100;

The amount of the enterprise tax on the electricity supply business (excluding the retail electricity business, etc., power generation business, etc. and specified wholesale supply business), the gas pipeline supply business, the insurance business and the trade insurance business is the amount obtained by multiplying the revenues for each business year by the rate determined using the standard tax rate of 1/100.

The amount of the enterprise tax on the retail electricity business, etc., power generation business, etc. and specified wholesale supply business, among the electricity supply business, is the amount specified in the relevant item in accordance with the category of corporations listed in the following items:

a corporation listed in Article 72-2, paragraph (1), item (iii), (a): the total of the following amounts:

the amount obtained by multiplying the revenues for each business year by the rate determined using the standard tax rate of 0.75/100;

the amount obtained by multiplying the value added for each business year by the rate determined using the standard tax rate of 0.37/100;

the amount obtained by multiplying the amount of stated capital, etc. for each business year by the rate determined using the standard tax rate of 0.15/100;

a corporation listed in Article 72-2, paragraph (1), item (iii), (b): the total of the following amounts:

the amount obtained by multiplying the revenues for each business year by the rate determined using the standard tax rate of 0.75/100;

the amount obtained by multiplying the income for each business year by the rate determined using the standard tax rate of 1.85/100.

The amount of the enterprise tax on the specified gas supply business is the total of the following amounts:

the amount obtained by multiplying the revenues for each business year by the rate determined using the standard tax rate of 0.48/100;

the amount obtained by multiplying the value added for each business year by the rate determined using the standard tax rate of 0.77/100;

the amount obtained by multiplying the amount of stated capital, etc. for each business year by the rate determined using the standard tax rate of 0.32/100.

The income for each business year in paragraph (1) of a corporation that conducts business with offices or places of business established in two or more prefectures is the income for each business year before it is divided among the relevant prefectures under Article 72-48, and the amount of the enterprise tax on a business conducted by a corporation that conducts business with offices or places of business established in three or more prefectures and whose amount of stated capital or amount of capital contributions is 10,000,000 yen or more (excluding a corporation listed in Article 72-2, paragraph (1), item (i), (a)) is, notwithstanding the provisions of paragraph (1), the amount specified in the relevant item in accordance with the category of corporations listed in the following items:

a special corporation: the amount obtained by multiplying the income for each business year by the rate determined using the standard tax rate of 4.9/100;

a corporation other than a special corporation: the amount obtained by multiplying the income for each business year by the rate determined using the standard tax rate of 7/100.

In applying the provisions of paragraph (1) where the business year is less than one year, in that paragraph the phrase "annual 4,000,000 yen" is deemed to be replaced with "the amount calculated by multiplying 4,000,000 yen by the number of months in that business year and dividing by 12", and the phrase "annual 8,000,000 yen" with "the amount calculated by multiplying 8,000,000 yen by the number of months in that business year and dividing by 12". In this case, the number of months is calculated according to the calendar, and if a fraction of less than one month arises, it is counted as one month.

The term "special corporation" in paragraph (1), item (ii) and the items of paragraph (5) means the following corporations:

agricultural cooperatives, federations of agricultural cooperatives (excluding specified federations of agricultural cooperatives) and agricultural production cooperative corporations (excluding an agricultural production cooperative corporation that carries on the business under Article 72-10, paragraph (1), item (ii) of the Agricultural Co-operatives Act and that pays salaries, wages, bonuses or other payments of a similar nature to members engaged in its business), and tobacco cultivation associations;

consumer cooperatives and federations of consumer cooperatives;

shinkin banks, federations of shinkin banks, labor banks and federations of labor banks;

small and medium-sized enterprise cooperatives (excluding enterprise associations), commerce and industry associations that are capital-contribution associations and federations of commerce and industry associations, shopping street promotion associations, federations of shopping street promotion associations, coastal shipping associations, federations of coastal shipping associations, environmental sanitation business associations that are capital-contribution associations and federations of environmental sanitation business associations, and environmental sanitation business small associations;

exporters' associations and importers' associations that are capital-contribution associations;

shipowners' mutual insurance associations;

fishery cooperatives, federations of fishery cooperatives, fishery production cooperatives (excluding those that pay salaries, wages, bonuses or other payments of a similar nature to members engaged in the business of the cooperative), fishery processing cooperatives, federations of fishery processing cooperatives, federations of fishery mutual aid cooperatives and fishery exporters' associations;

forestry cooperatives, federations of forestry cooperatives and production forestry cooperatives (excluding those that pay salaries, wages, bonuses or other payments of a similar nature to members engaged in the business of the cooperative);

Norinchukin Bank;

medical care corporations;

federations of workers' cooperatives.

In applying the provisions of paragraph (5), the determination of whether a corporation has an amount of stated capital or amount of capital contributions of 10,000,000 yen or more is made, for the enterprise tax for which the income for each business year (excluding the income for each business year in liquidation) is the tax base, based on the situation as of the last day of each business year (for the enterprise tax to be filed and paid pursuant to the proviso to Article 72-26, paragraph (1) or the proviso to Article 72-48, paragraph (2), the situation as of the day before the day on which six months have elapsed prescribed in Article 72-26, paragraph (1)), and, for the enterprise tax for which the income for each business year in liquidation is the tax base, based on the situation as of the date of dissolution.

Where a prefecture imposes the enterprise tax at a rate exceeding the standard tax rate prescribed in paragraphs (1) through (5), it may not impose it at a rate exceeding the rate obtained by multiplying the rate listed in each of the following items by the rate specified in the relevant item in accordance with the category of that rate:

the rate specified in the relevant item in accordance with the category of corporations listed in the items of paragraph (1) (excluding item (i), (c)), the rate prescribed in paragraph (2), the rate specified in the relevant item in accordance with the category of corporations listed in the items of paragraph (3), the rates prescribed in the items of paragraph (4), and the rate specified in the relevant item in accordance with the category of corporations listed in the items of paragraph (5): 1.2;

the rate specified in paragraph (1), item (i), (c): 1.7.

Where a prefecture imposes the enterprise tax pursuant to Article 72-24-4, it must ensure that the tax rate is not significantly out of balance with the burden under the tax rates in paragraphs (1) through (5) and the preceding paragraph.

The tax rate of the enterprise tax on a business conducted by a corporation is the tax rate as of the last day of each business year; provided, however, that for the enterprise tax to be filed and paid pursuant to the proviso to Article 72-26, paragraph (1) or the proviso to Article 72-48, paragraph (2), it is the tax rate as of the day before the day on which six months have elapsed prescribed in Article 72-26, paragraph (1).