Supplementary Provisions, Article 12

①For individual municipal inhabitant tax for fiscal year 2007 only, a municipality is to reduce, with respect to those among the persons liable for the income levy of that municipal inhabitant tax for whom the total of the taxable gross income amount, taxable retirement income amount and taxable timber income prescribed in Article 314-3, paragraph (2) of the New Act pertaining to that person liable for tax's individual municipal inhabitant tax for that fiscal year (hereinafter in this paragraph referred to as the "total taxable income amount") exceeds the amount listed in Article 314-6, item (i), (a) or item (ii), (a) of the New Act, and for whom the total of the total taxable income amount pertaining to that person liable for tax's individual municipal inhabitant tax for fiscal year 2008, the taxable long-term capital gains prescribed in Article 34, paragraph (4) of the Supplementary Provisions of the New Act, the taxable short-term capital gains prescribed in Article 35, paragraph (5) of the Supplementary Provisions of the New Act, the amount of taxable capital gains, etc. from shares, etc. prescribed in Article 35-2, paragraph (6) of the Supplementary Provisions of the New Act, the amount of taxable miscellaneous income, etc. from futures transactions prescribed in Article 35-4, paragraph (4) of the Supplementary Provisions of the New Act, the amount of interest, etc. to which a treaty applies prescribed in Article 3-2-2, paragraph (10) of the Act on Special Provisions of the Income Tax Act, the Corporation Tax Act and the Local Tax Act Incidental to Enforcement of Tax Treaties as amended by the provisions of Article 26 of the Supplementary Provisions (hereinafter in this Article referred to as the "New Tax Treaty Implementation Special Provisions Act") (where the provisions of Article 314-2 of the New Act, as applied by replacing terms pursuant to the provisions of Article 3-2-2, paragraph (11), item (iv) of the New Tax Treaty Implementation Special Provisions Act, apply, the amount after that application), and the amount of dividends, etc. to which a treaty applies prescribed in Article 3-2-2, paragraph (12) of the New Tax Treaty Implementation Special Provisions Act (where the provisions of Article 314-2 of the New Act, as applied by replacing terms pursuant to the provisions of Article 3-2-2, paragraph (14), item (iv) of the New Tax Treaty Implementation Special Provisions Act, apply, the amount after that application) does not exceed the amount listed in Article 314-6, item (i), (a) or item (ii), (a) of the New Act, the amount obtained by deducting the amount listed in item (ii) of this paragraph from the amount listed in item (i) of this paragraph (or, where that amount is less than zero, zero) from the amount of that person liable for tax's income levy (excluding the separately taxed income levy) in the case where the provisions concerning the income levy in the New Act and the New Tax Treaty Implementation Special Provisions Act (excluding the provisions of Article 314-8 of the New Act) are applied.

②With regard to the application of the provisions of the preceding paragraph where the provisions of Article 6, paragraph (5) of the Supplementary Provisions of the Act Partially Amending the Local Tax Act, etc. (Act No. 5 of 2005) apply, the phrase "zero)" in the preceding paragraph is deemed to be replaced with "zero), an amount equivalent to two-thirds of it", and the phrase "the amount of that person liable for tax's income levy (excluding the separately taxed income levy) in the case where the provisions concerning the income levy in the New Act and the New Tax Treaty Implementation Special Provisions Act (excluding the provisions of Article 314-8 of the New Act) are applied" is deemed to be replaced with "the amount of income levy under the provisions of Article 6, paragraph (5) of the Supplementary Provisions of the Act Partially Amending the Local Tax Act, etc. (Act No. 5 of 2005)".

③The provisions of paragraph (1) apply only where a declaration to the effect that the person wishes to be subject to the provisions of that paragraph has been made, as provided by Order of the Ministry of Internal Affairs and Communications, by a person liable for the income levy of municipal inhabitant tax prescribed in that paragraph to the mayor of the municipality of the place of domicile as of January 1, 2007, during the period from July 1, 2008 to July 31, 2008 (for a person who came to be subject to the application of the provisions of that paragraph on or after the first day of that month, until the day before the day on which one month has elapsed from the day on which the person came to be subject to that application).

④Where a declaration under the preceding paragraph is filed after the period prescribed in that paragraph has elapsed, if the mayor of the municipality finds that there were unavoidable reasons why the declaration was not filed within that period, the mayor may apply the provisions of paragraph (1) to that person liable for tax.

⑤Where the mayor of the municipality has reduced the amount of the income levy pursuant to the provisions of paragraph (1), and the total of the amount of the income levy already collected, the amount deducted pursuant to the provisions of Article 314-8, paragraph (1) of the New Act and the amount appropriated to individual municipal inhabitant tax pursuant to the provisions of paragraph (2) of that Article exceeds the amount of the income levy after that reduction, the mayor must, without delay, refund an amount equivalent to the amount by which it so exceeds.

⑥Where the mayor of the municipality is to make a refund pursuant to the provisions of the preceding paragraph, if there are unpaid local government levies of that municipality for the person liable for tax who is to receive the refund, the mayor must, notwithstanding the provisions of that paragraph, appropriate the amount to be refunded to those levies, as provided by Cabinet Order.