Act on Special Measures Concerning Taxation

With respect to those of the dividends and similar income on listed shares, etc. prescribed in Article 8-4, paragraph (1) (hereinafter referred to as "dividends and similar income on listed shares, etc." in this Article) received by a resident or a nonresident who has a permanent establishment who holds a withholding-selected account that have been accepted into the specified account for dividends and similar income on listed shares, etc. set up in the withholding-selected account based on a contract entrusting receipt of listed share dividends, etc. concluded by the resident or nonresident who has a permanent establishment with the financial instruments business operator, etc. with which the withholding-selected account is opened (hereinafter referred to as "dividends and similar income in a withholding-selected account" in this Article), the amount of interest income and the amount of dividend income pertaining to the dividends and similar income in a withholding-selected account and the amount of interest income and the amount of dividend income pertaining to interest and similar income (meaning interest and similar income prescribed in Article 23, paragraph (1) of the Income Tax Act; the same applies in paragraph (4), item (i)) and dividends and similar income (meaning dividends and similar income prescribed in Article 24, paragraph (1) of that Act; the same applies in that item) other than the dividends and similar income in a withholding-selected account are to be calculated separately pursuant to the provisions of Cabinet Order.

A resident or a nonresident who has a permanent establishment who seeks the application of the provisions of the preceding paragraph must, pursuant to the provisions of Cabinet Order, submit to the head of the business office of the financial instruments business operator, etc. at which the withholding-selected account in which the specified account for dividends and similar income on listed shares, etc. has been set up is opened, a written notification stating the name and location of the business office of the financial instruments business operator, etc., a statement to the effect that the person requests that dividends and similar income on listed shares, etc. whose payment is handled by the financial instruments business operator, etc. be accepted into the specified account for dividends and similar income on listed shares, etc. set up in the withholding-selected account, a statement to the effect that the person seeks the application of the provisions of that paragraph with respect to the dividends and similar income on listed shares, etc. so accepted, and other matters specified by Order of the Ministry of Finance (hereinafter referred to as a "notification of commencement of acceptance of dividends and similar income in a withholding-selected account" in this paragraph) (the submission includes the provision, by electronic or magnetic means, of the matters to be stated in the notification of commencement of acceptance of dividends and similar income in a withholding-selected account in lieu of submitting the notification of commencement of acceptance of dividends and similar income in a withholding-selected account; referred to as the "submission of the notification of commencement of acceptance of dividends and similar income in a withholding-selected account" in the following paragraph).

The head of the business office of a financial instruments business operator, etc. that has received the submission of the notification of commencement of acceptance of dividends and similar income in a withholding-selected account referred to in the preceding paragraph is to accept into the specified account for dividends and similar income on listed shares, etc. pertaining to the withholding-selected account of the resident or nonresident who has a permanent establishment who submitted that notification of commencement of acceptance of dividends and similar income in a withholding-selected account all of the dividends and similar income on listed shares, etc. paid to that resident or nonresident who has a permanent establishment for which payment is determined on or after the day on which the submission of that notification of commencement of acceptance of dividends and similar income in a withholding-selected account was received (in the case of interest on bearer public and corporate bonds, distributions of surplus on bearer shares, etc. prescribed in Article 225, paragraph (1) of the Income Tax Act, or distributions of proceeds pertaining to beneficiary certificates of a bearer investment trust or of a bearer specified trust that issues beneficiary certificates, those paid on or after that day), the payment of which is handled by the financial instruments business operator, etc. (limited to those that satisfy the requirements specified by Cabinet Order); provided, however, that this does not apply if, pursuant to the provisions of Cabinet Order, the resident or nonresident who has a permanent establishment has submitted to the head of the business office of the financial instruments business operator, etc. a written notification stating a request to stop the acceptance of those dividends and similar income on listed shares, etc. into the specified account for dividends and similar income on listed shares, etc.

In this Article, the meanings of the terms listed in the following items are as prescribed respectively in those items:

contract entrusting receipt of listed share dividends, etc.: a contract concerning the entrustment of the receipt of dividends and similar income on listed shares, etc. that the resident or nonresident who has a permanent establishment referred to in paragraph (1) has concluded with a financial instruments business operator, etc. in order to receive the application of the provisions of that paragraph, in the contract document of which it is provided that the dividends and similar income on listed shares, etc. the payment of which is handled by the financial instruments business operator, etc. may be accepted into the specified account for dividends and similar income on listed shares, etc. established in the withholding-selected account pertaining to the receipt of those dividends and similar income on listed shares, etc., that only those of the following interest and similar income or dividends and similar income paid to the resident or nonresident who has a permanent establishment that fall under dividends and similar income on listed shares, etc. (limited to those pertaining to listed shares, etc. that are entered or recorded in the transfer account book under the Act on Book-Entry Transfer of Corporate Bonds and Shares of the financial instruments business operator, etc. pertaining to the business office of the financial instruments business operator, etc. at which the withholding-selected account has been opened, or the custody of which has been entrusted to that business office) are to be accepted into that specified account for dividends and similar income on listed shares, etc., and other matters specified by Cabinet Order;

interest and similar income on foreign public and corporate bonds, etc. prescribed in Article 3-3, paragraph (2) (excluding interest and similar income on general foreign public and corporate bonds, etc. prescribed in paragraph (1) of that Article) from which income tax is to be collected by the financial instruments business operator, etc. pursuant to the provisions of paragraph (3) of that Article;

dividends and similar income on foreign investment trusts, etc., other than dividends and similar income on foreign privately-placed bond-based investment trusts, etc. listed in Article 8-3, paragraph (2), item (ii), from which income tax is to be collected by the financial instruments business operator, etc. pursuant to the provisions of paragraph (3) of that Article;

dividends and similar income on foreign shares prescribed in Article 9-2, paragraph (1) from which income tax is to be collected by the financial instruments business operator, etc. pursuant to the provisions of paragraph (2) of that Article;

dividends and similar income on listed shares, etc. prescribed in Article 9-3-2, paragraph (1) from which income tax is to be collected by the financial instruments business operator, etc. pursuant to the provisions of that paragraph.

specified account for dividends and similar income on listed shares, etc.: an account for keeping records of dividends and similar income on listed shares, etc. received in a withholding-selected account under a contract entrusting receipt of listed share dividends, etc., separately from records of other dividends and similar income on listed shares, etc.

The due date for payment of the amount of income tax collected, with regard to dividends and similar income in a withholding-selected account, by the financial instruments business operator, etc. at which the withholding-selected account has been opened pursuant to the provisions of Article 3-3, paragraph (3) (excluding the part pertaining to interest and similar income on general foreign public and corporate bonds, etc. prescribed in paragraph (1) of that Article; the same applies in the following paragraph and paragraph (7)), Article 8-3, paragraph (3) (limited to the part pertaining to paragraph (2), item (ii) of that Article; the same applies in the following paragraph and paragraph (7)), Article 9-2, paragraph (2) or Article 9-3-2, paragraph (1) is, notwithstanding those provisions, January 10 of the year following the year that includes the day of collection prescribed in those provisions (or, in the cases specified by Cabinet Order, the day specified by Cabinet Order).

In the case where the financial instruments business operator, etc. referred to in the preceding paragraph calculates the amount of income tax to be collected and paid with regard to dividends and similar income in a withholding-selected account paid to a resident or nonresident who has a permanent establishment, if there are any of the amounts listed in the following items with regard to the withholding-selected account pertaining to those dividends and similar income in a withholding-selected account, the amount of income tax to be collected and paid with regard to those dividends and similar income in a withholding-selected account is, pursuant to the provisions of Cabinet Order, the amount calculated by applying the provisions of Article 3-3, paragraph (3), Article 8-3, paragraph (3), Article 9-2, paragraph (2) or Article 9-3-2, paragraph (1), deeming the balance remaining after deducting the total of the amounts listed in those items from the total amount of dividends and similar income in a withholding-selected account delivered during that year to be the amount delivered prescribed in those provisions with regard to interest and similar income on foreign public and corporate bonds, etc. prescribed in Article 3-3, paragraph (3), dividends and similar income on foreign investment trusts, etc. prescribed in Article 8-3, paragraph (3), dividends and similar income on foreign shares prescribed in Article 9-2, paragraph (2), or dividends and similar income on listed shares, etc. prescribed in Article 9-3-2, paragraph (1):

the amount specified by Cabinet Order as the amount of losses arising in the calculation of the amount of business income, the amount of capital gains and the amount of miscellaneous income from the transfer of listed shares, etc. held in a specified account, as calculated pursuant to the provisions of Article 37-11-3, paragraph (1), with regard to the transfer of listed shares, etc. held in a specified account pertaining to the withholding-selected account made during that year;

the amount specified by Cabinet Order as the amount of losses arising in the calculation of the amount of business income and the amount of miscellaneous income from the transfer of listed shares, etc. through margin transactions, etc., as calculated pursuant to the provisions of Article 37-11-3, paragraph (2), with regard to the transfer of listed shares, etc. through margin transactions, etc. prescribed in that paragraph pertaining to cash settlement processed in the withholding-selected account during that year.

In the case referred to in the preceding paragraph, if, with regard to dividends and similar income in a withholding-selected account paid to the resident or nonresident who has a permanent establishment, the amount of income tax already collected during that year by the financial instruments business operator, etc. upon the delivery of those dividends and similar income in a withholding-selected account pursuant to the provisions of Article 3-3, paragraph (3), Article 8-3, paragraph (3), Article 9-2, paragraph (2) or Article 9-3-2, paragraph (1) exceeds the amount of income tax calculated by applying the provisions of the preceding paragraph, the financial instruments business operator, etc. must refund to the resident or nonresident who has a permanent establishment the income tax equivalent to the amount of the excess.

With regard to dividends and similar income in a withholding-selected account, the amount to be included in revenue in calculating the amount of interest income or the amount of dividend income for the relevant year is, notwithstanding the provisions of Article 36 of the Income Tax Act, the amount received in that year from the financial instruments business operator, etc. at which the withholding-selected account pertaining to those dividends and similar income in a withholding-selected account has been opened.

The provisions of Article 8-5, paragraph (1) are to be applied to dividends and similar income in a withholding-selected account held by a resident or nonresident who has a permanent establishment, notwithstanding the provisions of paragraph (4) of that Article, separately for each total of the amount of interest income and the amount of dividend income pertaining to the dividends and similar income in a withholding-selected account received during that year as calculated pursuant to the provisions of paragraph (1) (where the person holds dividends and similar income in a withholding-selected account in two or more withholding-selected accounts, the dividends and similar income in a withholding-selected account held in each of those withholding-selected accounts).

Where the provisions of paragraph (1) of the preceding Article are not applied with regard to the amounts listed in the items of paragraph (6) that the financial instruments business operator, etc. referred to in that paragraph has deducted from the amount of dividends and similar income in a withholding-selected account held by the resident or nonresident who has a permanent establishment in calculating, pursuant to the provisions of that paragraph, the amount of income tax to be collected and paid with regard to those dividends and similar income in a withholding-selected account, the provisions of Article 8-5, paragraph (1) and paragraph (2) do not apply to the total of the amount of interest income and the amount of dividend income pertaining to those dividends and similar income in a withholding-selected account.

Beyond what is specified in the preceding three paragraphs, the details of the procedures in the case of refunding income tax pursuant to the provisions of paragraph (7) and other necessary matters concerning the application of the provisions of paragraphs (1) through (7) are specified by Cabinet Order.