Act on Special Measures Concerning Taxation

Where a special business heir, etc. has acquired, by inheritance or bequest from a person specified by Cabinet Order as an individual who held specified business assets (referred to as the "decedent" hereinafter in this Article), all of the specified business assets relating to the business of the decedent (excluding, in the case where all or part of those specified business assets are jointly owned by two or more persons, the part relating to the shares of co-ownership held by persons other than that decedent) (limited to an acquisition during the period from January 1, 2019 to December 31, 2028 that is the first acquisition by inheritance or bequest to which the provisions of this paragraph apply or an acquisition by inheritance or bequest made by the day on which one year has elapsed from the day of that acquisition or any other day specified by Cabinet Order), with regard to the inheritance tax equivalent to the inheritance tax subject to deferral relating to those specified business assets that are stated in the inheritance tax return (meaning a return filed by the due date under the provisions of Article 27, paragraph (1) of the Inheritance Tax Act; the same applies hereinafter in this Article) relating to that inheritance as assets for which the special business heir, etc. seeks the application of the provisions of this paragraph (referred to as "special business assets" hereinafter in this Article), out of the amount of inheritance tax that the special business heir, etc. is to pay by filing that inheritance tax return, a grace period for the payment of that tax is granted until the day of the death of the special business heir, etc., notwithstanding the provisions of Article 33 of that Act, only if the special business heir, etc. has provided security equivalent to that inheritance tax subject to deferral by the due date for filing that inheritance tax return.

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

residential land, etc. (meaning land or rights existing on land, limited to that specified by Cabinet Order out of that used as the site of buildings or structures specified by Order of the Ministry of Finance; the same applies in (a)): the part of the total area of that residential land, etc. that is 400 square meters (or, in the case where there is a person who receives the application of the provisions of Article 69-4, paragraph (1) with regard to residential land, etc. acquired by inheritance or bequest from that decedent, the area obtained by deducting from 400 square meters the area calculated pursuant to the provisions of Cabinet Order as the area equivalent to the small-scale residential land, etc. prescribed in that paragraph) or less;

buildings (limited to those specified by Cabinet Order as buildings used for that business): the assets specified in Article 70-6-8, paragraph (2), item (i), (b);

depreciable assets (meaning depreciable assets prescribed in Article 2, paragraph (1), item (xix) of the Income Tax Act, excluding those listed in (b)): the assets specified in Article 70-6-8, paragraph (2), item (i), (c);

special business heir, etc.: an individual who has acquired specified business assets from the decedent by inheritance or bequest to which the provisions of the preceding paragraph apply, and who satisfies all of the following requirements (excluding the requirement listed in (b) in the case where that decedent died under 60 years of age):

the individual is a small and medium-sized enterprise prescribed in Article 2 of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises and has received the special certification for business succession;

immediately before the commencement of the succession, the individual was engaged in the business relating to those specified business assets (including a business specified by Order of the Ministry of Finance as equivalent to that business);

the individual has taken over the business relating to those specified business assets during the period from the time of the commencement of the succession until the due date for filing the inheritance tax return relating to that inheritance (or, in the case where the individual has died before that due date, the day of that death; the same applies in (d)), and has continuously held all of those specified business assets and used them for the individual's own business until that due date;

as of the due date for filing the inheritance tax return relating to that inheritance, the individual has submitted a written notification of commencement of business for the business relating to those specified business assets under the provisions of Article 229 of the Income Tax Act, and has received the approval referred to in Article 143 of that Act (including the approval in the case where that approval is deemed to have been given under the provisions of Article 147 of that Act) or is expected to receive that approval;

the business of the individual relating to those specified business assets, at the time of the commencement of the succession, falls under none of an asset-holding business, an asset-management business or a sex-related special business prescribed in Article 2, paragraph (5) of the Act on Control and Improvement of Amusement Business;

no person who has acquired property by inheritance or bequest from the decedent relating to the individual has received the application of the provisions of Article 69-4, paragraph (1) with regard to residential land, etc. for specified business use prescribed in paragraph (3), item (i) of that Article;

the individual satisfies the requirements specified by Order of the Ministry of Finance as requirements under which the individual is found to be certain to succeed to the business of the decedent;

inheritance tax subject to deferral: the amount of inheritance tax of the special business heir, etc. referred to in the preceding paragraph calculated pursuant to the provisions of Cabinet Order by applying the provisions of Articles 13 through 19 of the Inheritance Tax Act, deeming the value of the special business assets to which the provisions of that paragraph apply to be the taxable value of inheritance tax relating to that special business heir, etc.;

asset-holding business: the business specified in Article 70-6-8, paragraph (2), item (iv);

asset-management business: the business specified in Article 70-6-8, paragraph (2), item (v).

In the case where the special business heir, etc. to whom the provisions of paragraph (1) apply, the special business assets referred to in that paragraph or the business relating to those special business assets has come to fall under any of the cases listed in the following items, notwithstanding the provisions of that paragraph, the deadline of the tax payment grace period under the provisions of that paragraph is the day on which two months have elapsed from the day specified in the relevant item:

in the case where the special business heir, etc. has discontinued that business or an order commencing bankruptcy proceedings has been issued against the special business heir, etc.: the day on which the business was discontinued or the day on which that order was issued;

in the case where that business has come to fall under any of an asset-holding business, an asset-management business or a sex-related special business prescribed in Article 2, paragraph (5) of the Act on Control and Improvement of Amusement Business: the day on which it came to so fall;

in the case where the gross revenue from business income relating to that business of the special business heir, etc. for a year has become zero: December 31 of that year;

in the case where all of those special business assets have ceased to be recorded in the balance sheet of the blue return relating to the business income of the special business heir, etc. for a year: December 31 of that year;

in the case where the approval referred to in Article 143 of the Income Tax Act given to the special business heir, etc. has been rescinded under the provisions of Article 150, paragraph (1) of that Act, or the special business heir, etc. has submitted a written notification stating that the special business heir, etc. will cease to file a blue return under the provisions of Article 151, paragraph (1) of that Act: the day on which that approval was rescinded or the day on which that written notification was submitted;

in the case where the special business heir, etc. has submitted to the district director with jurisdiction over the place for tax payment a written notification stating that the special business heir, etc. will cease to receive the application of the provisions of paragraph (1): the day on which that written notification was submitted;

in the case where the special business heir, etc. has received the application of the provisions of paragraph (1) on the grounds of being expected to receive the approval referred to in (d) of item (ii) of the preceding paragraph, if the application for that approval has been dismissed under the provisions of Article 145 of the Income Tax Act: the day on which that application was dismissed.

In the case where all or part of the special business assets to which the provisions of paragraph (1) apply have ceased to be used for the business of the special business heir, etc. (excluding the cases listed in the items of the preceding paragraph and the case specified by Cabinet Order as a case where it has become difficult to use them for that business), notwithstanding the provisions of paragraph (1), the deadline of the tax payment grace period under the provisions of that paragraph for the inheritance tax equivalent to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the part that has ceased to be used for that business, out of the inheritance tax subject to deferral (excluding, in the case where the provisions of this paragraph have already been applied, the amount calculated pursuant to the provisions of Cabinet Order as the amount corresponding to the value of the special business assets to which the provisions of this paragraph have been applied; referred to as the "amount of inheritance tax under a grace period" hereinafter in this Article), is the day on which two months have elapsed from the day on which they ceased to be used for that business.

In the case referred to in the preceding paragraph, where the reason for which the assets ceased to be used for the business referred to in that paragraph is a transfer of special business assets, if approval has been obtained from the district director with jurisdiction over the place for tax payment, pursuant to the provisions of Cabinet Order, for the expectation that, within one year from the day on which that transfer took place, assets to be used for the business of the special business heir, etc. (limited to the assets listed in paragraph (2), item (i), (a) or (b) or the assets specified in (c) of that item) will be acquired with all or part of the amount of consideration for that transfer, the following provisions apply with regard to the application of the provisions of the preceding paragraph:

the special business assets relating to that approval are deemed to have been used for the business of the special business heir, etc. until the day of the acquisition referred to in item (iii);

in the case where, on the day on which one year has elapsed from the day on which that transfer took place, all or part of the amount of consideration for the transfer relating to that approval has not been appropriated to the acquisition of assets to be used for that business, the part specified by Cabinet Order as corresponding to the amount not so appropriated, out of the special business assets relating to that transfer, is deemed to have ceased to be used for that business on that day;

in the case where all or part of the amount of consideration for the transfer relating to that approval has been appropriated to the acquisition of assets to be used for that business by the day on which one year has elapsed from the day on which that transfer took place, the assets so acquired are deemed to be special business assets to which the provisions of paragraph (1) apply.

In the case referred to in paragraph (4), where the reason for which the assets ceased to be used for the business referred to in that paragraph is a transfer of all of the special business assets through a capital contribution in kind upon the incorporation of a company after the day on which five years have elapsed from the day following the specified return due date (meaning the due date for filing the inheritance tax return relating to the first inheritance to which the provisions of paragraph (1) apply of the special business heir, etc. to whom the provisions of that paragraph apply, or the due date for filing the gift tax return prescribed in Article 70-6-8, paragraph (1) for the year that includes the day of the first gift to which the provisions of that paragraph apply, whichever is earlier; the same applies in paragraph (10) and paragraph (15), item (ii)), if approval has been obtained from the district director with jurisdiction over the place for tax payment, pursuant to the provisions of Cabinet Order, for that transfer of the special business assets, then, with regard to the application of the provisions of paragraph (4), the transfer relating to that approval is deemed not to have taken place, and the shares or equity interests acquired through that capital contribution in kind are deemed to be special business assets to which the provisions of paragraph (1) apply (including, in the case where that company has been extinguished through a merger or in any other case specified by Order of the Ministry of Finance, those specified by Order of the Ministry of Finance as equivalent to the shares or equity interests of that company). In this case, necessary matters concerning the application of the provisions of paragraphs (3), (4), (15) and (17) through (19) after that approval has been obtained are specified by Cabinet Order.

With regard to the application of the provisions of paragraph (1) in the case where, by the due date for filing the inheritance tax return relating to the inheritance referred to in that paragraph, all or part of the assets used for the business of the decedent that were acquired through that inheritance or bequest have not yet been divided among the co-heirs or universal legatees, the assets that have not been divided may not be stated in that inheritance tax return as assets to which the provisions of that paragraph are to be applied.

The provisions of paragraph (1) do not apply to specified business assets acquired by inheritance or bequest from the decedent if, with regard to assets used for the same business as the business relating to those specified business assets, there is another special business heir, etc. who is receiving the application of the provisions of that paragraph, another special business heir, etc. who seeks to receive the application of the provisions of that paragraph, or another special business donee prescribed in Article 70-6-8, paragraph (2), item (ii) who is receiving the application of the provisions of paragraph (1) of that Article.

The provisions of paragraph (1) do not apply in the case where the inheritance tax return relating to the assets used for business that the special business heir, etc. seeking the application of the provisions of that paragraph acquired by inheritance or bequest from the decedent does not state that the special business heir, etc. seeks the application of the provisions of that paragraph for all or part of those assets, or where a document stating details of those assets, details concerning the calculation of the inheritance tax subject to deferral and other matters specified by Order of the Ministry of Finance is not attached to that return.

If, during the period from the day following the due date for filing the inheritance tax return relating to the inheritance referred to in paragraph (1) until the day on which the deadline of the tax payment grace period under the provisions of that paragraph, paragraph (3), paragraph (4), paragraph (12) or paragraph (13) is fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period, there is a special inheritance report base date (meaning each day on which a period of three years elapses from the day following the specified return due date), the special business heir, etc. to whom the provisions of paragraph (1) apply must, by the notification deadline (meaning the day on which three months have elapsed from the day following that special inheritance report base date; the same applies in the following paragraph, paragraph (12) and paragraph (16)), submit to the district director with jurisdiction over the place for tax payment, pursuant to the provisions of Cabinet Order, a written notification stating that the special business heir, etc. wishes to continue to receive the application of the provisions of paragraph (1) and matters concerning the business relating to the special business assets referred to in that paragraph.

With regard to the prescription of the national government's right to collect the inheritance tax equivalent to the amount of inheritance tax under a grace period and the interest tax and delinquent tax relating to that inheritance tax, except in the case where the provisions of Article 73, paragraph (4) of the Act on General Rules for National Taxes as applied by replacing terms pursuant to paragraph (14), item (iii) apply, the prescription is not completed during the period from the time of submission of the written notification referred to in the preceding paragraph until the notification deadline of that written notification, and is to begin to run anew from the day following that notification deadline.

In the case where the written notification referred to in paragraph (10) is not submitted to the district director with jurisdiction over the place for tax payment by the notification deadline, notwithstanding the provisions of paragraph (1), the deadline of the tax payment grace period under the provisions of that paragraph for the inheritance tax equivalent to the amount of inheritance tax under a grace period as of that notification deadline is the day on which two months have elapsed from the day following that notification deadline.

In the following cases, the district director may accelerate the deadline of the tax payment grace period under the provisions of paragraph (1) relating to the inheritance tax equivalent to the amount of inheritance tax under a grace period. In this case, the provisions of Article 49, paragraphs (2) and (3) of the Act on General Rules for National Taxes apply mutatis mutandis:

in the case where the special business heir, etc. to whom the provisions of paragraph (1) apply does not comply, with regard to the security prescribed in that paragraph, with an order under the provisions of Article 51, paragraph (1) of the Act on General Rules for National Taxes;

in the case where a fact has been found that differs from the matters stated in the written notification referred to in paragraph (10) submitted by the special business heir, etc. to whom the provisions of paragraph (1) apply.

With regard to the application of the provisions of the Act on General Rules for National Taxes, the National Tax Collection Act and the Inheritance Tax Act in the case where a special business heir, etc. seeks the application of the provisions of paragraph (1) or a tax payment grace period has been granted under the provisions of that paragraph, the following provisions apply:

with regard to delinquent tax on inheritance tax in the case where the provisions of paragraph (1) have been applied, the amount of that inheritance tax is divided into the inheritance tax subject to deferral and the remainder, that inheritance tax subject to deferral is further divided according to each different deadline of the tax payment grace period prescribed in item (iv), and the provisions concerning delinquent tax in the Act on General Rules for National Taxes apply to each of those tax amounts;

with regard to the application of the provisions of Articles 56 through 58 of the Act on General Rules for National Taxes to inheritance tax equivalent to the amount that has become an overpayment or erroneous payment as a result of the notice under the provisions of paragraph (22) (limited to a notice relating to paragraph (17) or paragraph (18)), the overpayment or erroneous payment is deemed to have been made on the day on which that notice was issued or the day on which six months have elapsed from the deadline for the application under the provisions of paragraph (17) or paragraph (18), whichever is earlier;

with regard to inheritance tax for which a tax payment grace period has been granted under the provisions of paragraph (1), the phrase "deferred payment" in Article 64, paragraph (1) and Article 73, paragraph (4) of the Act on General Rules for National Taxes is deemed to be replaced with "deferred payment (including a tax payment grace period under the provisions of Article 70-6-10, paragraph (1) (Tax Payment Grace Period and Exemption for Inheritance Tax on Business Assets of Individuals) of the Act on Special Measures Concerning Taxation)";

the deadline of the tax payment grace period under the provisions of paragraph (1) (including that deadline under the provisions of paragraph (3), paragraph (4) or the preceding two paragraphs) is to be included in the deadline for deferred payment under the provisions of the Inheritance Tax Act when the provisions concerning the statutory due date for payment or the due date for payment in the Act on General Rules for National Taxes and the National Tax Collection Act are applied;

in the case where the written application referred to in paragraph (17) or paragraph (18) has been submitted, the inheritance tax equivalent to the amount of inheritance tax applied for exemption prescribed in those provisions relating to that written application does not, with regard to the application of the provisions of Article 82, paragraph (1) of the National Tax Collection Act, fall under delinquent national tax referred to in paragraph (1) of that Article until the day on which the notice under the provisions of paragraph (22) is issued;

the provisions of Article 38, paragraph (1) and Article 41, paragraph (1) of the Inheritance Tax Act do not apply to inheritance tax that falls under the provisions of paragraph (3), paragraph (4) or the preceding two paragraphs;

with regard to the amount of inheritance tax, other than the inheritance tax subject to deferral, on the property of a person whose property acquired by inheritance or bequest includes property falling under special business assets, the provisions of Article 38, paragraph (1) (including as applied mutatis mutandis pursuant to Article 44, paragraph (2) of that Act), Article 47, paragraph (5), Article 52, paragraph (1) or Article 53, paragraph (4), item (ii), (b) of the Inheritance Tax Act apply by deeming the value of those special business assets to be zero;

with regard to the application of the provisions of Article 41, paragraph (2) of the Inheritance Tax Act as applied mutatis mutandis pursuant to Article 48-2, paragraph (6) of that Act in the case where the provisions of paragraph (1) have been applied to special business assets, the phrase "excluding property" in Article 41, paragraph (2) is deemed to be replaced with "excluding property and the special business assets prescribed in Article 70-6-10, paragraph (1) (Tax Payment Grace Period and Exemption for Inheritance Tax on Business Assets of Individuals) of the Act on Special Measures Concerning Taxation to which the provisions of that paragraph apply".

In the case where the special business heir, etc. to whom the provisions of paragraph (1) apply has come to fall under any of the following cases (excluding the case where, before the day on which the special business heir, etc. came to fall under that case, the deadline of the tax payment grace period under the provisions of paragraph (3), paragraph (4), paragraph (12) or paragraph (13) has been fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period), the inheritance tax equivalent to the amount of inheritance tax under a grace period is exempted. In this case, the special business heir, etc. or the heir of the special business heir, etc. (including a universal legatee; the same applies in paragraph (27)) must, during the period from the day on which the special business heir, etc. came to fall under that case until the day on which six months have elapsed from that day (or, in the case where the special business heir, etc. has come to fall under the case listed in item (ii), from the day on which the person who received the gift of the special business assets referred to in that item filed the gift tax return prescribed in Article 70-6-8, paragraph (1) to which the provisions of that paragraph apply with regard to those special business assets) (referred to as the "deadline for notification of exemption" in the following paragraph), submit to the district director with jurisdiction over the place for tax payment, pursuant to the provisions of Cabinet Order, a written notification stating the matters specified by Order of the Ministry of Finance.

in the case where the special business heir, etc. has died;

in the case where, after the day on which five years have elapsed from the day following the specified return due date, the special business heir, etc. has made a gift to which the provisions of Article 70-6-8, paragraph (1) apply of all of the special business assets to which the provisions of paragraph (1) apply;

in the case where the special business heir, etc. has become unable to continue the business relating to the special business assets held by the special business heir, etc. (limited to the case where there is an unavoidable reason specified by Order of the Ministry of Finance for becoming unable to continue that business).

Even in the case where the written notification referred to in paragraph (10) or the preceding paragraph has not been submitted by the notification deadline or the deadline for notification of exemption, if the district director prescribed in those provisions finds that there were unavoidable circumstances for the failure to submit it within those time limits and that written notification has been submitted to that district director pursuant to the provisions of Cabinet Order, that written notification is deemed to have been submitted within those time limits with regard to the application of the provisions of paragraph (12) or the preceding paragraph.

In the case where the special business heir, etc. to whom the provisions of paragraph (1) apply has come to fall under any of the cases listed in the following items (excluding the case where, before the day on which the special business heir, etc. came to fall under that case, the deadline of the tax payment grace period under the provisions of paragraph (3), paragraph (4), paragraph (12) or paragraph (13) has been fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period), if the special business heir, etc. seeks an exemption from the inheritance tax specified in the relevant item, the special business heir, etc. must, by the day on which two months have elapsed from the day on which the special business heir, etc. came to fall under that case, submit to the district director with jurisdiction over the place for tax payment a written application stating that the special business heir, etc. wishes to receive that exemption, the amount equivalent to the inheritance tax for which the special business heir, etc. seeks that exemption (referred to as the "amount of inheritance tax applied for exemption" in paragraph (23)), details of its calculation and other matters specified by Order of the Ministry of Finance (limited to a written application to which the documents specified by Order of the Ministry of Finance as documents necessary for the procedure for that exemption are attached):

in the case where the special business heir, etc. has made a transfer or gift (referred to as a "transfer, etc." in this item and in item (i) of the following paragraph) of all of the special business assets to which the provisions of paragraph (1) apply to a person specified by Cabinet Order as a single person among persons other than the specially related persons of the special business heir, etc., or has made a transfer, etc. in order to carry out a rehabilitation plan under the provisions of the Civil Rehabilitation Act (excluding a rehabilitation plan that specifies special provisions for housing funds loans prescribed in Article 196, item (iv) of that Act, and a rehabilitation plan relating to small-scale personal rehabilitation prescribed in Article 221, paragraph (1) of that Act or to rehabilitation of salary income earners, etc. prescribed in Article 239, paragraph (1) of that Act; the same applies hereinafter in this item and in paragraphs (19) and (21)) based on the confirmation order for that rehabilitation plan (or, in the case where a fact specified by Cabinet Order as equivalent to that order has occurred, a debt workout plan (meaning a plan specified by Cabinet Order as a plan for the disposition of debts; the same applies in paragraphs (19) and (21))), if the sum of the following amounts is less than the amount of inheritance tax under a grace period immediately before that transfer, etc.: the inheritance tax equivalent to the remaining amount after deducting that sum from that amount of inheritance tax under a grace period;

the amount equivalent to the market value, at the time of that transfer, etc., of the special business assets for which that transfer, etc. was made (or, in the case where that amount is lower than the amount of consideration for the transfer, etc. of the special business assets for which that transfer, etc. was made, that amount of consideration for the transfer, etc.);

the total amount of consideration, etc. not counted as necessary expenses that the specially related persons of the special business heir, etc. received from the special business heir, etc. within five years on or before the day on which that transfer, etc. took place;

in the case where an order commencing bankruptcy proceedings has been issued against the special business heir, etc.: the inheritance tax equivalent to the remaining amount after deducting the amount listed in (b) from the amount listed in (a).

the amount of inheritance tax under a grace period immediately before that order commencing bankruptcy proceedings;

the total amount of consideration, etc. not counted as necessary expenses that the specially related persons of the special business heir, etc. received from the special business heir, etc. within five years on or before the day on which that order commencing bankruptcy proceedings was issued.

In the case where the special business heir, etc. to whom the provisions of paragraph (1) apply has come to fall under any of the cases listed in the following items (limited to the case where a reason specified by Cabinet Order as a reason making it difficult for the special business heir, etc. to continue the business relating to the special business assets has arisen, and excluding the case where, before the day on which the special business heir, etc. came to fall under that case, the deadline of the tax payment grace period under the provisions of paragraph (3), paragraph (4), paragraph (12) or paragraph (13) has been fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period), if the special business heir, etc. seeks an exemption from the inheritance tax specified in the relevant item, the special business heir, etc. must, by the day on which two months have elapsed from the day on which the special business heir, etc. came to fall under that case, submit to the district director with jurisdiction over the place for tax payment a written application stating that the special business heir, etc. wishes to receive that exemption, the amount equivalent to the inheritance tax for which the special business heir, etc. seeks that exemption (referred to as the "amount of inheritance tax applied for exemption" in paragraph (23)), details of its calculation and other matters specified by Order of the Ministry of Finance (limited to a written application to which the documents specified by Order of the Ministry of Finance as documents necessary for the procedure for that exemption are attached):

in the case where the special business heir, etc. has made a transfer, etc. of all of those special business assets to a person other than the specially related persons of the special business heir, etc., if the sum of the following amounts is less than the amount of inheritance tax under a grace period immediately before that transfer, etc.: the inheritance tax equivalent to the remaining amount after deducting that sum from that amount of inheritance tax under a grace period;

the amount calculated under the provisions of paragraph (2), item (iii) by deeming the amount of consideration for that transfer, etc. (or, in the case where that amount is one half or less of the amount equivalent to the market value, at the time of that transfer, etc., of those special business assets for which that transfer, etc. was made, the amount equivalent to that one half) to be the value, at the time of the commencement of the succession, of the special business assets acquired through the inheritance to which the provisions of paragraph (1) apply;

the total amount of consideration, etc. not counted as necessary expenses that the specially related persons of the special business heir, etc. received from the special business heir, etc. within five years on or before the day on which that transfer, etc. took place;

in the case where the special business heir, etc. has discontinued the business relating to those special business assets, if the sum of the following amounts is less than the amount of inheritance tax under a grace period immediately before that discontinuance: the inheritance tax equivalent to the remaining amount after deducting that sum from that amount of inheritance tax under a grace period.

the amount calculated under the provisions of paragraph (2), item (iii) by deeming the amount equivalent to the market value of those special business assets immediately before that discontinuance to be the value, at the time of the commencement of the succession, of the special business assets acquired through the inheritance to which the provisions of paragraph (1) apply;

the total amount of consideration, etc. not counted as necessary expenses that the specially related persons of the special business heir, etc. received from the special business heir, etc. within five years on or before the day of that discontinuance.

In the case where a confirmation order for a rehabilitation plan under the provisions of the Civil Rehabilitation Act has been issued with regard to the special business heir, etc. referred to in paragraph (1) (including the case where a fact specified by Cabinet Order as equivalent to a confirmation order for a rehabilitation plan has occurred), when an assessment specified by Cabinet Order has been made of the assets held by the special business heir, etc. (excluding the case where, on or after the day on which that confirmation order was issued (or, in the case where the fact specified by that Cabinet Order has occurred, the day on which the debt workout plan was formed; referred to as the "date of the confirmation order" hereinafter through paragraph (21)) and before the day on which the notice under the provisions of paragraph (22) is issued, the deadline of the tax payment grace period under the provisions of paragraph (3), paragraph (4), paragraph (12) or paragraph (13) has been fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period, and limited, for a special business heir, etc. who is performing a rehabilitation plan, to the case where a supervisor or trustee has been appointed), the recalculated deferred inheritance tax is to be the amount of inheritance tax under a grace period relating to the special business assets. In this case, notwithstanding the provisions of paragraph (1), the deadline of the tax payment grace period under the provisions of that paragraph for the inheritance tax equivalent to the amount listed in item (ii) is the day on which two months have elapsed from the day on which that notice is issued, and the inheritance tax equivalent to the remaining amount after deducting the sum of the following amounts from the amount of inheritance tax under a grace period (referred to as "inheritance tax exempted on recalculation" in paragraph (22)) is exempted:

that recalculated deferred inheritance tax;

the total amount of consideration, etc. not counted as necessary expenses that the specially related persons of the special business heir, etc. received from the special business heir, etc. within five years on or before the date of the confirmation order.

The term "recalculated deferred inheritance tax" referred to in the preceding paragraph means the amount calculated under the provisions of paragraph (2), item (iii) by deeming the value, as of the date of the confirmation order, of the special business assets to which the provisions of paragraph (1) apply (limited to the part corresponding to the amount of inheritance tax under a grace period) to be the value, at the time of the commencement of the succession, of the special business assets acquired through the inheritance to which the provisions of that paragraph apply.

The provisions of paragraph (19) apply only in the case where the special business heir, etc. seeking the application of the provisions of that paragraph has, by the day on which two months have elapsed from the date of the confirmation order, submitted to the district director with jurisdiction over the place for tax payment a written application stating that the special business heir, etc. wishes to receive the application of the provisions of that paragraph, the recalculated deferred inheritance tax prescribed in the preceding paragraph, details of its calculation and other matters specified by Order of the Ministry of Finance (limited to a written application to which the documents specified by Order of the Ministry of Finance as documents concerning the rehabilitation plan (including a debt workout plan) for which the confirmation order prescribed in paragraph (19) was issued are attached).

In the case where a written application under the provisions of paragraph (17), paragraph (18) or the preceding paragraph has been submitted, the district director conducts an investigation into the matters stated in that written application, and either grants an exemption from the inheritance tax specified in the relevant item of paragraph (17) or paragraph (18) according to the category of the cases listed in those items or from the inheritance tax exempted on recalculation, or dismisses the application relating to that written application. In this case, the district director is to notify the special business heir, etc. who submitted that written application of the amount of the inheritance tax so exempted or the amount of that inheritance tax exempted on recalculation, or of the dismissal and the reason therefor, by means of a document stating them, within six months counting from the day following the deadline for the application relating to that written application.

If the district director, in the case where the written application referred to in paragraph (17) or paragraph (18) has been submitted, finds that there are reasonable grounds, the district director may grant a grace period for the collection of the inheritance tax equivalent to the amount of inheritance tax applied for exemption relating to that application, during the period from the due date for payment relating to that written application (meaning the day listed in the right-hand column of item (v) or item (vi) of the table in paragraph (26), according to the category of the cases listed in the left-hand column of item (v) or item (vi) of that table) or the day on which that written application was submitted, whichever is later, until the day on which one month has elapsed on or after the day following the day on which the notice under the provisions of the preceding paragraph was issued.

In the case where a special business heir, etc. receives the application of the provisions of paragraph (17), item (i) or paragraph (18), item (i) or (ii), if the district director finds that there is an unavoidable reason for the special business heir, etc.'s being unable to determine the appropriate market value, the district director may grant an exemption from the amount of the part of the delinquent tax on the inheritance tax that has become payable as a result of coming to fall under the case listed in the left-hand column of item (v) or item (vi) of the table in paragraph (26) that corresponds to the period from the day following the due date for payment prescribed in the preceding paragraph until the day on which one month has elapsed on or after the day following the day on which the notice under the provisions of paragraph (22) was issued.

Beyond what is provided for in paragraph (21) through the preceding paragraph, necessary matters concerning the application of the provisions of paragraphs (17) through (19) are specified by Cabinet Order.

In the case where, by the deadline of the tax payment grace period prescribed in paragraph (3), paragraph (4), paragraph (12) or paragraph (19), the due date for submitting the written application prescribed in paragraph (17), paragraph (18) or paragraph (21), the due date for payment prescribed in paragraph (23), or the end of the period forming the basis for calculating the interest tax prescribed in the preceding paragraph (limited to the interest tax relating to item (v) or item (vi) of the table in that paragraph), the special business heir, etc. prescribed in those provisions has died, notwithstanding those provisions, the deadline of the tax payment grace period, the due date for submitting the written application, the due date for payment or the end of the period forming the basis for calculating the interest tax prescribed in those provisions is, respectively, the day on which six months have elapsed from the day following the day on which the heir of that special business heir, etc. came to know of the commencement of the succession due to the death of that special business heir, etc.

The Minister of Economy, Trade and Industry or the Director-General of a Bureau of Economy, Trade and Industry must, if either of them has come to know, as a result of having made a certification or confirmation, accepted a report or taken any other action based on the provisions of laws and regulations with regard to a fact relating to the fixing of the deadline of the tax payment grace period under the provisions of paragraph (3) or paragraph (4) with respect to the special business heir, etc. to whom the provisions of paragraph (1) apply, the special business assets referred to in that paragraph or the business relating to those special business assets, that the fact has occurred, notify the Commissioner of the National Tax Agency or the district director with jurisdiction over the place for tax payment of that special business heir, etc. in writing, without delay, that the fact has occurred with regard to that business and of other matters specified by Order of the Ministry of Finance.

If the district director, in the case referred to in paragraph (1), finds it necessary for the proper and reliable handling of the affairs of the Minister of Economy, Trade and Industry or the Director-General of a Bureau of Economy, Trade and Industry (limited to affairs concerning the special business heir, etc. to whom the provisions of that paragraph apply that relate to the application of the provisions of the preceding paragraph), the district director may notify the Minister of Economy, Trade and Industry or the Director-General of a Bureau of Economy, Trade and Industry that the special business heir, etc. receives the application of the provisions of paragraph (1), and of other matters specified by Order of the Ministry of Finance.

With regard to the application of the provisions of paragraph (1) in the case where those provisions are applied to the special gifted business assets prescribed in paragraph (1) of the preceding Article that have been deemed to have been acquired by inheritance or bequest under the provisions of that paragraph (including as applied by replacing terms pursuant to paragraph (2) of that Article), the phrase "limited to an acquisition during the period from January 1, 2019 to December 31, 2028 that is the first acquisition by inheritance or bequest to which the provisions of this paragraph apply or an acquisition by inheritance or bequest made by the day on which one year has elapsed from the day of that acquisition or any other day specified by Cabinet Order" in paragraph (1) is deemed to be replaced with "including that acquisition in the case where assets are deemed to have been acquired by inheritance or bequest under the provisions of paragraph (1) of the preceding Article (including as applied by replacing terms pursuant to paragraph (2) of that Article); the same applies hereinafter in this Article, except in paragraphs (5) through (7)", and those special gifted business assets are deemed to be specified business assets.

Beyond what is provided for in paragraph (3) through the preceding paragraph, necessary matters concerning the application of paragraph (1) are specified by Cabinet Order.