Act on Special Measures Concerning Taxation

Where a wage earner prescribed in paragraph (1) of the preceding Article makes, at the business office of a financial institution or other such place, a placement of deposits and savings, jointly managed trusts, or securities, or of premiums for life insurance or casualty insurance or mutual aid premiums for life mutual aid, under a workers' property accumulation pension savings contract prescribed in Article 6, paragraph (2) of the Workers' Property Accumulation Promotion Act (hereinafter referred to in this Article as a "workers' property accumulation pension savings contract"), which are specified by Cabinet Order (hereinafter referred to in this Article as "asset-building pension savings"), if, pursuant to the provisions of Cabinet Order, the wage earner has submitted, at the time of the placement, a document stating that the wage earner seeks the application of the provisions of this paragraph with regard to the asset-building pension savings and other necessary matters (hereinafter referred to in this Article as an "application to exempt asset-building pension savings from taxation") via the office, place of business, or any other equivalent place of the wage payer prescribed in paragraph (1) of the preceding Article (limited to the payer via which the wage earner submitted the salary income earner's return for deduction for Dependents, etc. prescribed in Article 194, paragraph (8) of the Income Tax Act) that handles the administrative affairs of paying the wages (hereinafter referred to in this Article as the "place of employment") (where the wage payer (limited to an employer of a small and medium sized enterprise prescribed in Article 14, paragraph (2) of the Workers' Property Accumulation Promotion Act; referred to in paragraph (4) as a "specified wage payer") has entrusted the administrative affairs pertaining to workers' property accumulation pension savings contracts to an administrative agent organization prescribed in Article 14, paragraph (2) of that Act (hereinafter referred to in this Article as an "administrative agent organization"), the place of employment and the office or any other equivalent place of the administrative agent organization pertaining to the entrustment that performs those administrative affairs; hereinafter referred to in this Article as the "place of employment, etc."), income tax is not imposed on what is specified in each of the following items, only in the case listed in that item:

where the total of the principal of the deposits and savings and the principal of other deposits and savings deposited at the business office of the financial institution or other such place by submitting an application to exempt asset-building pension savings from taxation does not exceed, throughout the calculation period of interest on the deposits and savings, the maximum limitation listed in item (iii) of paragraph (4) that is stated in the statement of tax-exempt asset-building pension savings prescribed in that paragraph which the person has submitted via the place of employment, etc. and the business office of the financial institution or other such place (where a statement of change to the maximum limitation for tax-exempt asset-building pension savings prescribed in paragraph (5) has been submitted, on and after the day of submission, the maximum limitation after the change; the same applies hereinafter in this paragraph): the interest on the deposits and savings corresponding to the calculation period;

where the total of the principal of the jointly managed trust and the principal of other jointly managed trusts entrusted at the business office of the financial institution or other such place by submitting an application to exempt asset-building pension savings from taxation does not exceed, throughout the calculation period of the distribution of proceeds from the jointly managed trust, the maximum limitation listed in item (iii) of paragraph (4) that is stated in the statement of tax-exempt asset-building pension savings prescribed in that paragraph which the person has submitted via the place of employment, etc. and the business office of the financial institution or other such place: the distribution of proceeds from the jointly managed trust corresponding to the calculation period;

where the total of the face value of the securities or the amount specified by Cabinet Order as being equivalent thereto (hereinafter referred to in this Article as the "face value or equivalent amount") and the face value or equivalent amount of other securities purchased at the business office of the financial institution or other such place by submitting an application to exempt asset-building pension savings from taxation does not exceed, throughout the calculation period of the interest or distribution of proceeds on the securities (where the securities were purchased in the middle of the calculation period, for the calculation period that includes the day of purchase, throughout the period from that day to the last day of the calculation period), the maximum limitation listed in item (iii) of paragraph (4) that is stated in the statement of tax-exempt asset-building pension savings prescribed in that paragraph which the person has submitted via the place of employment, etc. and the business office of the financial institution or other such place: the interest or distribution of proceeds on the securities corresponding to the calculation period;

where the total of the amount of premiums for the life insurance or casualty insurance or the amount of mutual aid premiums for the life mutual aid and the amount of premiums for other life insurance or casualty insurance or the amount of mutual aid premiums for other life mutual aid paid at the business office of the financial institution or other such place by submitting an application to exempt asset-building pension savings from taxation does not exceed, throughout the period from the day of conclusion of the workers' property accumulation pension savings contract to the pension payment commencement date specified in the contract (meaning the pension payment commencement date prescribed in Article 6, paragraph (2), item (ii), (b) or item (iii), (b) of the Workers' Property Accumulation Promotion Act), the maximum limitation listed in item (iii) of paragraph (4) that is stated in the statement of tax-exempt asset-building pension savings prescribed in that paragraph which the person has submitted via the place of employment, etc. and the business office of the financial institution or other such place: the gain equivalent to the amount calculated pursuant to the provisions of Cabinet Order as the part of the amount of pensions paid under a contract for the life insurance or casualty insurance or life mutual aid (including cancellation refunds paid where the contract has been cancelled due to a disaster, illness, or any other unavoidable circumstances, and any other money specified by Cabinet Order) that exceeds the total of the amount of premiums for the life insurance or casualty insurance or the amount of mutual aid premiums for the life mutual aid.

The provisions of the preceding paragraph do not apply, where an individual who has submitted a statement of tax-exempt asset-building pension savings prescribed in paragraph (4) has received payment of money under a workers' property accumulation pension savings contract by a method other than the methods prescribed in Article 6, paragraph (2), item (i), (b), item (ii), (b), or item (iii), (b) of the Workers' Property Accumulation Promotion Act, or in any other case specified by Cabinet Order, to the interest, distribution of proceeds, or gain listed in the items of that paragraph pertaining to the asset-building pension savings for which a placement has been made under the workers' property accumulation pension savings contract, which is specified by Cabinet Order.

An application to exempt asset-building pension savings from taxation may be submitted only to the business office of the financial institution or other such place via which the statement of tax-exempt asset-building pension savings prescribed in the following paragraph was submitted.

The provisions of paragraph (1) apply only where the person has submitted a return stating the following matters (hereinafter referred to in this Article as a "statement of tax-exempt asset-building pension savings"), with a document by the head of the place of employment (where a specified wage payer has entrusted the administrative affairs pertaining to workers' property accumulation pension savings contracts to an administrative agent organization, the office or any other equivalent place of the administrative agent organization pertaining to the entrustment that performs those administrative affairs; the same applies in paragraph (7)) certifying the matters listed in item (iv) attached thereto, to the district director with jurisdiction over the place of the person's domicile, via the place of employment, etc. and the business office of the financial institution or other such place at which the person intends to make a placement of the asset-building pension savings for which the person seeks the application of the provisions of paragraph (1), by the day on which the person first makes the placement:

the names and locations of the business office of the financial institution or other such place, the wage payer prescribed in paragraph (1), and the place of employment, etc.;

which of deposits and savings, jointly managed trusts, or securities, or premiums for life insurance or casualty insurance or mutual aid premiums for life mutual aid the person seeks the application of the provisions of paragraph (1) for;

the maximum limitation on the current balance of the asset-building pension savings for which a placement is made at the business office of the financial institution or other such place and for which the person seeks the application of the provisions of paragraph (1) (for securities, the current balance calculated on the basis of the face value or equivalent amount, and for premiums for life insurance or casualty insurance or mutual aid premiums for life mutual aid, the total of the amount of premiums paid or the amount of mutual aid premiums paid);

where the person has already submitted a statement of tax-exempt asset-building housing savings prescribed in paragraph (4) of the preceding Article via the business office of a financial institution or other such place, the name of each such business office of the financial institution or other such place and the maximum limitation referred to in item (iii) of that paragraph stated in that statement (where a statement of change to the maximum limitation for tax-exempt asset-building housing savings prescribed in paragraph (5) of that Article has been submitted, the maximum limitation after the change).

Where a person who has submitted a statement of tax-exempt asset-building pension savings intends to change the maximum limitation listed in item (iii) of the preceding paragraph stated in the statement (where the person has already submitted a return under this paragraph, the maximum limitation after the change stated in that return), the person is to submit, pursuant to the provisions of Cabinet Order, a return stating to that effect, the maximum limitation after the change, and other necessary matters (referred to in the following paragraph as a "statement of change to the maximum limitation for tax-exempt asset-building pension savings") to the district director with jurisdiction over the place for tax payment, via the place of employment, etc. and the business office of the financial institution or other such place via which the statement of tax-exempt asset-building pension savings was submitted.

In the cases referred to in the preceding two paragraphs, when a statement of tax-exempt asset-building pension savings or a statement of change to the maximum limitation for tax-exempt asset-building pension savings has been accepted by the business office of the financial institution or other such place prescribed in those provisions, the statement is deemed to have been submitted to the district director prescribed in those provisions on the day on which it was accepted.

A statement of tax-exempt asset-building pension savings may not be submitted where the wage earner prescribed in paragraph (1) has already submitted such a statement (excluding the cases specified by Cabinet Order), and the place of employment may not accept a statement of tax-exempt asset-building pension savings where it falls under any of the following cases:

where the maximum limitation listed in paragraph (4), item (iii) stated in the statement of tax-exempt asset-building pension savings exceeds 5,500,000 yen (or 3,850,000 yen for the maximum limitation pertaining to premiums for life insurance or casualty insurance or mutual aid premiums for life mutual aid, or any other maximum limitation specified by Cabinet Order);

where the total of the maximum limitations listed in paragraph (4), items (iii) and (iv) stated in the statement of tax-exempt asset-building pension savings exceeds 5,500,000 yen.

Where a wage earner prescribed in paragraph (1) has made a placement, at the business office of a financial institution or other such place, of asset-building pension savings for which the wage earner seeks the application of the provisions of that paragraph, the wage earner must have the securities or certificates of deposit or other certificates pertaining to the asset-building pension savings managed by custody, entries or records in a transfer account book prescribed in the Act on Book-Entry Transfer of Corporate Bonds and Shares, or any other method specified by Cabinet Order, and the head of the business office of the financial institution or other such place must, when accepting the placement of the asset-building pension savings, establish an account for each individual and manage the matters concerning the asset-building pension savings through that account, pursuant to the provisions of Cabinet Order.

Beyond what is prescribed in paragraph (3) through the preceding paragraph, the method of calculating the principal and the face value or equivalent amount referred to in paragraph (1), the submission of an application to exempt asset-building pension savings from taxation and a statement of tax-exempt asset-building pension savings, matters concerning the filing of a return in the case where a person who has submitted the statement has changed the matters stated in the statement after its submission, intends to cease to receive the application of the provisions of that paragraph, or has ceased to be a wage earner in relation to the wage payer referred to in that paragraph, and other necessary matters concerning the application of the provisions of that paragraph are specified by Cabinet Order.

Where, with regard to a workers' property accumulation pension savings contract or its performance, a fact has arisen by which the requirements prescribed in Article 6, paragraph (2), item (i), (b) or (c), item (ii), (b) or (c), or item (iii), (b) or (c) of the Workers' Property Accumulation Promotion Act are no longer met, the provisions of this Act and the Income Tax Act apply by deeming that the provisions of paragraph (1) have not applied to the interest, distribution of proceeds, or gain listed in the items of that paragraph that is specified by Cabinet Order and was paid within five years before the day on which the fact (where the day on which the fact arose is on or after the pension payment commencement date prescribed in item (i), (b), item (ii), (b), or item (iii), (b) of that paragraph, limited to the fact that arose within five years from the pension payment commencement date) arose, and that the interest, distribution of proceeds, or gain was paid on the day on which the fact arose. In this case, matters concerning withholding at the source prescribed in Article 2, paragraph (1), item (xlv) of the Income Tax Act by the person who pays the interest, distribution of proceeds, or gain, and other necessary matters concerning the application of the provisions of this paragraph and that Act are specified by Cabinet Order.