Local Tax Act

A corporation that conducts business with offices or places of business established in two or more prefectures (hereinafter in this Article referred to as a "corporation with offices in two or more prefectures"), when it files and pays enterprise tax under Article 72-25, Article 72-26 (excluding paragraph (5)), Article 72-28 or Article 72-29, or files and pays enterprise tax by an amended return under Article 72-31, paragraph (2) or (3), must apportion the total tax base amount pertaining to that business (for a corporation listed in Article 72-24-7, paragraph (1), item (iii) whose total income for each business year exceeds 4,000,000 yen per year (or, where the business year of that corporation is less than one year, the amount calculated by applying paragraph (6) of that Article; the same applies hereinafter in this paragraph) and is 8,000,000 yen or less per year (or, where the business year of that corporation is less than one year, the amount calculated by applying paragraph (6) of that Article; the same applies hereinafter in this paragraph), or for a corporation listed in item (ii) of that paragraph whose total income for each business year exceeds 4,000,000 yen per year, the amount obtained by dividing the total income for each business year into the portion of 4,000,000 yen or less per year and the portion exceeding 4,000,000 yen per year, and for a corporation listed in item (iii) of that paragraph whose total income for each business year exceeds 8,000,000 yen per year, the amount obtained by dividing the total income for each business year into the portion of 4,000,000 yen or less per year, the portion exceeding 4,000,000 yen and 8,000,000 yen or less per year, and the portion exceeding 8,000,000 yen per year; the same applies hereinafter with respect to enterprise tax on a business conducted by a corporation) among the relevant prefectures on the basis of the apportionment basis, calculate the amount of enterprise tax for each relevant prefecture taking the apportioned amount as the tax base, and file and pay it, or file and pay it by amended return, to the relevant prefectures. In this case, a detailed statement on the apportionment of the total tax base amount, as specified by Order of the Ministry of Internal Affairs and Communications, must be attached to the return or amended return to be submitted to the relevant prefectural governor.

Where the period of the business year of a corporation with offices in two or more prefectures exceeds six months (where that corporation is a group tax sharing subsidiary corporation, where the business year of the group tax sharing parent corporation containing the start date of that business year exceeds six months and, on the day on which six months have elapsed from the start date of that business year of the group tax sharing parent corporation, there is a group tax sharing full controlling interest between that corporation and the group tax sharing parent corporation pertaining to it), notwithstanding the preceding paragraph, the amount of enterprise tax that the corporation is to file and pay to the relevant prefectures under the main clause of Article 72-26, paragraph (1), or the amount of enterprise tax that it is to file and pay by amended return in connection with that filing and payment, is the amount calculated by dividing the total of the amount of tax paid and the amount of tax that has become finalized as payable as enterprise tax for the previous business year, for each relevant prefecture, by the number of months of the previous business year and multiplying the result by the number of months of the interim period. However, where the offices or places of business located in a relevant prefecture as of the day preceding the day on which six months have elapsed differ, owing to relocation or other reason, from the offices or places of business located in that relevant prefecture in the previous business year, or where it is found that the figures of the apportionment basis for each relevant prefecture as of the day preceding the day on which six months have elapsed differ significantly from the figures of the apportionment basis for each relevant prefecture in the previous business year, the amount of enterprise tax that the corporation with offices in two or more prefectures is to file and pay to the relevant prefectures under the main clause of Article 72-26, paragraph (1), or the amount of enterprise tax that it is to file and pay by amended return in connection with that filing and payment, may be the amount of tax calculated by taking as the tax base the amount obtained by dividing the total tax base amount that formed the basis for calculating the total of the amount of tax paid and the amount of tax that has become finalized as payable as enterprise tax for the previous business year by the number of months of the previous business year and multiplying the result by the number of months of the interim period, apportioned among the relevant prefectures under the preceding paragraph in the same manner as for a corporation that files and pays under the proviso to Article 72-26, paragraph (1).

The "apportionment basis" in the preceding two paragraphs means the basis for apportioning the total tax base amount among the relevant prefectures, as provided in each of the following items according to the category of business set forth in that item.

Manufacturing business: to apportion the total tax base amount in proportion to the number of workers at the offices or places of business located in the relevant prefectures stated in the return or amended return (hereinafter in this paragraph through paragraph (5) referred to as "offices or places of business");

Electricity supply business: to apportion the total tax base amount among the relevant prefectures as provided below according to the category of business listed below;

Retail electricity business, etc.: to apportion an amount equivalent to one half of the total tax base amount in proportion to the number of offices or places of business, and an amount equivalent to one half of the total tax base amount in proportion to the number of workers at offices or places of business;

General electricity transmission and distribution business prescribed in Article 2, paragraph (1), item (viii) of the Electricity Business Act (referred to in paragraph (9), items (i) and (ii) as "general electricity transmission and distribution business"), electricity transmission business prescribed in item (x) of that paragraph (referred to in paragraph (9), items (i) and (ii) as "electricity transmission business") (including what is specified by Order of the Ministry of Internal Affairs and Communications as equivalent to it), electricity distribution business prescribed in item (xi)-2 of that paragraph (referred to in paragraph (9), items (i) and (ii) as "electricity distribution business") and specified electricity transmission and distribution business prescribed in item (xii) of that paragraph: to apportion the total tax base amount among the relevant prefectures as provided below according to the category of cases listed below;

In cases other than the case listed in (2): to apportion an amount equivalent to three quarters of the total tax base amount in proportion to the electric capacity (meaning capacity expressed in kilowatts; the same applies in item (iii) of the following paragraph) of electric lines (limited to those meeting the requirements specified by Order of the Ministry of Internal Affairs and Communications; the same applies in (2) and item (iii) of the following paragraph) that are electrically connected to electric facilities for power generation, etc. (meaning electric facilities for power generation, etc. prescribed in Article 2, paragraph (1), item (v), (b) of the Electricity Business Act; the same applies in (2)) of a power station or a facility for electricity storage in the prefecture where the offices or places of business are located, and an amount equivalent to one quarter of the total tax base amount in proportion to the value of the fixed assets of offices or places of business;

In the case where, in none of the prefectures where the offices or places of business are located, there is an electric line electrically connected to electric facilities for power generation, etc. of a power station or a facility for electricity storage: to apportion the total tax base amount in proportion to the value of the fixed assets of offices or places of business;

Power generation business, etc. and specified wholesale supply business: to apportion the total tax base amount among the relevant prefectures as provided below according to the category of cases listed below;

In cases other than the case listed in (2): to apportion an amount equivalent to three quarters of the total tax base amount in proportion to the value of the fixed assets of offices or places of business that are used for a power station or a facility for electricity storage, and an amount equivalent to one quarter of the total tax base amount in proportion to the value of the fixed assets of offices or places of business;

In the case where there are no fixed assets of offices or places of business that are used for a power station or a facility for electricity storage: to apportion the total tax base amount in proportion to the value of the fixed assets of offices or places of business;

Gas supply business and warehousing business: to apportion the total tax base amount in proportion to the value of the fixed assets of offices or places of business;

Railway business and track business: to apportion the total tax base amount in proportion to the length in kilometers of track in the prefectures where the offices or places of business are located;

Business other than those listed in the preceding items: to apportion an amount equivalent to one half of the total tax base amount in proportion to the number of offices or places of business, and an amount equivalent to one half of the total tax base amount in proportion to the number of workers at offices or places of business.

The numerical value of the apportionment basis prescribed in the preceding paragraph (hereinafter referred to as the "apportionment basis" in this Subsection) is to be calculated, in accordance with the categories set out in the following items, as provided for in the relevant item.

Number of workers: the figure as of the last day of the business year; provided, however, that for an office or place of business that is a factory of a corporation conducting a manufacturing business whose amount of stated capital or amount of capital contributions is 100,000,000 yen or more, the figure obtained by adding to that figure a figure equivalent to one half of that figure (or, where that figure is an odd number, one half of the figure obtained by adding one to that figure);

Number of offices or places of business: the figure obtained by totaling the figures as of the last day of each month belonging to the business year (where no month ends during that business year, the figure as of the last day of that business year);

Electric power capacity of electric lines, value of fixed assets, and length of track in kilometers: the figure as of the last day of the business year.

For the offices or places of business set out in the following items, the number specified in the relevant item (where a fraction of less than one person arises in that number, it is to be counted as one person) is deemed to be the number of workers set out in item (i) of the preceding paragraph.

An office or place of business newly established in the middle of a business year: the number obtained by multiplying the number of workers as of the last day of that business year by the ratio of the number of months from the day on which that office or place of business was newly established to the last day of that business year to the number of months in that business year;

An office or place of business abolished in the middle of a business year: the number obtained by multiplying the number of workers as of the last day of the month immediately preceding the month in which the day of that abolition falls by the ratio of the number of months during which that abolished office or place of business was located in that business year to the number of months in that business year;

An office or place of business specified by Cabinet Order as one in which the number of workers fluctuates significantly throughout the business year: the number obtained by dividing the total of the numbers of workers as of the last day of each month belonging to that business year by the number of months in that business year.

The number of months set forth in the preceding paragraph is calculated according to the calendar; a division of less than one month is counted as one month.

Where paragraph (4) is applied to the apportionment basis relating to the interim payment of a corporation that is to file and pay under the proviso to Article 72-26, paragraph (1) or the proviso to paragraph (2) of that Article, the interim period of that corporation is deemed to be one business year.

As for the apportionment of the total tax base amount relating to the business of a corporation with offices in two or more prefectures in the case where that corporation concurrently conducts businesses to which two or more apportionment bases are to be applied, it is to be based on the apportionment basis prescribed for the principal business among those businesses.

As for the apportionment of the total tax base amount relating to the business of a corporation with offices in two or more prefectures in the case where that corporation conducts an electricity supply business and there are two or more apportionment bases relating to that electricity supply business, notwithstanding the preceding paragraph, it is to be based on the apportionment basis specified in the relevant item, in accordance with the categories of cases set out in the following items.

Where the corporation concurrently conducts a general electricity transmission and distribution business, electricity transmission business or electricity distribution business and a business other than a general electricity transmission and distribution business, electricity transmission business and electricity distribution business: the apportionment basis specified in paragraph (3), item (ii), (b);

Where the corporation concurrently conducts a power generation business (meaning a power generation business prescribed in Article 2, paragraph (1), item (xiv) of the Electricity Business Act; the same applies hereinafter in this item) and a business other than a general electricity transmission and distribution business, electricity transmission business, electricity distribution business and power generation business: the apportionment basis specified in paragraph (3), item (ii), (c);

In cases other than those set out in the preceding two items: the apportionment basis prescribed for the principal business within the electricity supply business.

In the case referred to in the preceding paragraph, as for the apportionment of the total tax base amount relating to the business of a corporation with offices in two or more prefectures in the case where that corporation concurrently conducts an electricity supply business and a business other than an electricity supply business, notwithstanding the preceding two paragraphs, it is first to be determined which of the electricity supply business and the business other than the electricity supply business is its principal business, and, according to that determination, where the electricity supply business is the principal business, the apportionment is to be based on the apportionment basis specified in the relevant item in accordance with the categories of cases set out in the items of the preceding paragraph, and where the business other than the electricity supply business is the principal business, it is to be based on the apportionment basis prescribed for that business.

Where a corporation with offices in two or more prefectures concurrently conducts a railway business or track business and a business other than those businesses, notwithstanding the preceding three paragraphs, the total tax base amount relating to the business of that corporation is to be apportioned for each relevant prefecture, as provided by Cabinet Order, by the apportionment basis prescribed for those businesses with respect to the portion relating to the railway business or track business, and by the apportionment basis prescribed for the principal business among the businesses other than those businesses with respect to the portion relating to the businesses other than those businesses.

In addition to what is provided for in the preceding paragraphs, matters necessary for the apportionment of the total tax base amount are specified by Order of the Ministry of Internal Affairs and Communications.