Supplementary Provisions, Article 35-2-2Special Provisions on Prefectural Inhabitant Tax and Municipal Inhabitant Tax on Capital Gains, etc. on Listed Shares, etc.

①For the time being, where a person liable for the income levy of prefectural inhabitant tax has capital gains, etc. on listed shares, etc. prescribed in Article 37-11, paragraph (1) of the Act on Special Measures Concerning Taxation in the previous year, a prefecture is to, with regard to those capital gains, etc. on listed shares, etc. and notwithstanding Article 32, paragraphs (1) and (2) and Article 35, separate them from other income and impose, on the amount calculated as provided for by Cabinet Order as the amount of those capital gains, etc. on listed shares, etc. for the previous year (to be calculated, where that person liable for the income levy of prefectural inhabitant tax has income relating to the amount of capital gains from specified shares, etc., excluding the amount of income relating to that amount of capital gains from specified shares, etc. (excluding any amount to which Article 32, paragraph (14) does not apply pursuant to paragraph (15) of that Article); referred to as the "amount of capital gains, etc. on listed shares, etc." in this paragraph hereinafter), the income levy of prefectural inhabitant tax in an amount equivalent to an amount equivalent to two percent (or one percent where the person liable for tax has a domicile within the area of a designated city) of the amount of taxable capital gains, etc. on listed shares, etc. (meaning the amount of capital gains, etc. on listed shares, etc. (where Article 34 as applied with terms replaced pursuant to Article 35-2, paragraph (4), item (iii) of the Supplementary Provisions as applied mutatis mutandis in paragraph (4) applies, the amount after that application)). In this case, where there is a loss arising in the calculation of the amount of capital gains, etc. on listed shares, etc., that loss is deemed not to have arisen for the purpose of applying the provisions concerning prefectural inhabitant tax.

②Where a person liable for the income levy of prefectural inhabitant tax who holds listed shares, etc. prescribed in Article 37-11, paragraph (2) of the Act on Special Measures Concerning Taxation (referred to as "listed shares, etc." in paragraph (6), the following Article, Article 35-3-2 of the Supplementary Provisions and Article 35-3-3 of the Supplementary Provisions) receives delivery of an amount with respect to those listed shares, etc. that is deemed, pursuant to Article 4-4, paragraph (3), Article 37-11, paragraphs (3) and (4) and Article 37-14-4, paragraphs (1) and (2) of the Act on Special Measures Concerning Taxation, to be revenue relating to capital gains, etc. on listed shares, etc. prescribed in Article 4-4, paragraph (3), Article 37-11, paragraphs (3) and (4) and Article 37-14-4, paragraphs (1) and (2) of the Act on Special Measures Concerning Taxation for the purpose of applying the provisions of the Income Tax Act and Chapter II of the Act on Special Measures Concerning Taxation, that amount is deemed to be revenue relating to capital gains, etc. on listed shares, etc. prescribed in the preceding paragraph, and the provisions concerning prefectural inhabitant tax apply.

③Beyond what is prescribed in the preceding paragraph, Cabinet Order provides for the necessary particulars concerning the application of the provisions of paragraph (1).

④The provisions of paragraph (4) of the preceding Article apply mutatis mutandis where the provisions of paragraph (1) apply. In this case, the phrase "Article 35-2, paragraph (1) of the Supplementary Provisions" in paragraph (4) of that Article is deemed to be replaced with "Article 35-2-2, paragraph (1) of the Supplementary Provisions", the phrase "amount of capital gains, etc. on general shares, etc." is deemed to be replaced with "amount of capital gains, etc. on listed shares, etc.", the phrase "Act on Special Measures Concerning Taxation" is deemed to be replaced with "Act on Special Measures Concerning Taxation as applied mutatis mutandis with terms replaced pursuant to Article 37-11, paragraph (6) of the Act on Special Measures Concerning Taxation", and the phrase "amount of taxable capital gains, etc. on general shares, etc." is deemed to be replaced with "amount of taxable capital gains, etc. on listed shares, etc.".

⑤For the time being, where a person liable for the income levy of municipal inhabitant tax has capital gains, etc. on listed shares, etc. prescribed in Article 37-11, paragraph (1) of the Act on Special Measures Concerning Taxation in the previous year, a municipality is to, with regard to those capital gains, etc. on listed shares, etc. and notwithstanding Article 313, paragraphs (1) and (2) and Article 314-3, separate them from other income and impose, on the amount calculated as provided for by Cabinet Order as the amount of those capital gains, etc. on listed shares, etc. for the previous year (to be calculated, where that person liable for the income levy of municipal inhabitant tax has income relating to the amount of capital gains from specified shares, etc., excluding the amount of income relating to that amount of capital gains from specified shares, etc. (excluding any amount to which Article 313, paragraph (14) does not apply pursuant to paragraph (15) of that Article); referred to as the "amount of capital gains, etc. on listed shares, etc." in this paragraph hereinafter), the income levy of municipal inhabitant tax in an amount equivalent to an amount equivalent to three percent (or four percent where the person liable for tax has a domicile within the area of a designated city) of the amount of taxable capital gains, etc. on listed shares, etc. (meaning the amount of capital gains, etc. on listed shares, etc. (where Article 314-2 as applied with terms replaced pursuant to Article 35-2, paragraph (8), item (iii) of the Supplementary Provisions as applied mutatis mutandis in paragraph (8) applies, the amount after that application)). In this case, where there is a loss arising in the calculation of the amount of capital gains, etc. on listed shares, etc., that loss is deemed not to have arisen for the purpose of applying the provisions concerning municipal inhabitant tax.

⑥Where a person liable for the income levy of municipal inhabitant tax who holds listed shares, etc. receives delivery of an amount with respect to those listed shares, etc. that is deemed, pursuant to Article 4-4, paragraph (3), Article 37-11, paragraphs (3) and (4) and Article 37-14-4, paragraphs (1) and (2) of the Act on Special Measures Concerning Taxation, to be revenue relating to capital gains, etc. on listed shares, etc. prescribed in Article 4-4, paragraph (3), Article 37-11, paragraphs (3) and (4) and Article 37-14-4, paragraphs (1) and (2) of the Act on Special Measures Concerning Taxation for the purpose of applying the provisions of the Income Tax Act and Chapter II of the Act on Special Measures Concerning Taxation, that amount is deemed to be revenue relating to capital gains, etc. on listed shares, etc. prescribed in the preceding paragraph, and the provisions concerning municipal inhabitant tax apply.

⑦Beyond what is prescribed in the preceding paragraph, Cabinet Order provides for the necessary particulars concerning the application of the provisions of paragraph (5).

⑧The provisions of paragraph (8) of the preceding Article apply mutatis mutandis where the provisions of paragraph (5) apply. In this case, the phrase "Article 35-2, paragraph (5) of the Supplementary Provisions" in paragraph (8) of that Article is deemed to be replaced with "Article 35-2-2, paragraph (5) of the Supplementary Provisions", the phrase "amount of capital gains, etc. on general shares, etc." is deemed to be replaced with "amount of capital gains, etc. on listed shares, etc.", the phrase "Act on Special Measures Concerning Taxation" is deemed to be replaced with "Act on Special Measures Concerning Taxation as applied mutatis mutandis with terms replaced pursuant to Article 37-11, paragraph (6) of the Act on Special Measures Concerning Taxation", and the phrase "amount of taxable capital gains, etc. on general shares, etc." is deemed to be replaced with "amount of taxable capital gains, etc. on listed shares, etc.".