Act on Special Measures Concerning Taxation

In the case where a special business successor heir, etc. has acquired unlisted shares or similar interests of a special certified succession company by inheritance or bequest from an individual specified by Cabinet Order as an individual who held unlisted shares or similar interests (limited to those without restrictions on voting rights; the same applies hereinafter in this paragraph) of that special certified succession company (referred to as the "special decedent" hereinafter in this Article) (limited to the first acquisition by inheritance or bequest to which the provisions of this paragraph apply during the period from January 1, 2018 to December 31, 2027, and to acquisitions by inheritance or bequest for which the due date for filing the inheritance tax return (meaning the 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 and in Article 70-7-8) (or, in the case where that due date has been extended pursuant to the provisions of Article 69-8, paragraph (1) or paragraph (2) or the provisions of Article 10 or Article 11 of the Act on General Rules for National Taxes, the due date before that extension) arrives during the period from the day of that acquisition until the last day of the special business succession period), with regard to the inheritance tax equivalent to the inheritance tax subject to deferral relating to those unlisted shares or similar interests for which that inheritance tax return states that the special business successor heir, etc. seeks the application of the provisions of this paragraph (referred to as "special eligible unlisted shares or similar interests" hereinafter in this Article), out of the amount of inheritance tax payable upon the filing of the inheritance tax return relating to that inheritance, notwithstanding the provisions of Article 33 of the Inheritance Tax Act, a grace period is granted for the payment of that tax until the day of the death of that special business successor heir, etc., only in the case where security equivalent to that inheritance tax subject to deferral has been provided by the due date for filing that inheritance tax return pursuant to the provisions of Cabinet Order.

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

special certified succession company: This means a company that 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 (or, 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, the one specified by Order of the Ministry of Finance as equivalent to that company), and that satisfies all of the following requirements at the time of the commencement of the succession to which the provisions of the preceding paragraph apply:

the number of regular employees (meaning those specified by Order of the Ministry of Finance as employees regularly employed; the same applies in (e)) of that company is one or more;

that company does not fall under an asset-holding company or an asset-management company that is specified by Cabinet Order;

the shares, etc. (meaning shares or equity interests; the same applies hereinafter in this Article) of that company (referred to as the "specified company" in (c)) and the shares, etc. of a company specified by Cabinet Order as a company having a close relationship with that specified company (referred to as a "specified specially related company" in (d)), out of the specially related companies (meaning companies that have a special relationship specified by Cabinet Order with that specified company; the same applies hereinafter in this paragraph), fall under unlisted shares or similar interests;

that company and the specified specially related company do not fall under an adult entertainment business company prescribed in Article 70-7, paragraph (2), item (i), (d);

in the case where a specially related company of that company falls under a foreign company prescribed in Article 2, item (ii) of the Companies Act (limited to the case where that company or a corporation that has a controlling relationship with that company holds shares, etc. of that specially related company), the number of regular employees of that company is five or more;

beyond what is listed in (a) through (e), the company satisfies the requirements specified by Cabinet Order as requirements necessary for ensuring the smooth operation of the business of a company;

special certification for business succession: This means the certification specified in paragraph (2), item (ii) of the preceding Article;

asset-holding company: This means a company specified in Article 70-7, paragraph (2), item (viii);

asset-management company: This means a company specified in Article 70-7, paragraph (2), item (ix);

unlisted share or similar interest: This means shares, etc. specified in Article 70-7, paragraph (2), item (ii);

special business succession period: This means the period from the day following the due date for filing the inheritance tax return relating to the inheritance to which the provisions of the preceding paragraph apply until whichever is earlier of the earlier of the following days and the day preceding the day of the death of the special business successor heir, etc. who receives the application of the provisions of that paragraph:

the day on which five years have elapsed from the day following the due date for filing the inheritance tax return relating to the first inheritance to which the provisions of the preceding paragraph apply for that special business successor heir, etc.;

the day on which five years have elapsed from the day following the due date for filing the gift tax return prescribed in paragraph (1) of the preceding Article for the year that includes the day of the first gift to which the provisions of that paragraph apply for that special business successor heir, etc.;

special business successor heir, etc.: This means an individual who has acquired unlisted shares or similar interests of a special certified succession company from the special decedent by inheritance or bequest to which the provisions of the preceding paragraph apply, and who satisfies all of the following requirements (or, in the case where there are two such persons, or three or more such persons, limited to the two persons, or up to three persons, determined by that special certified succession company):

that individual holds the authority of representation of that special certified succession company on the day on which five months have elapsed from the day following the day of the commencement of the succession;

at the time of the commencement of the succession, the total number of voting rights relating to the unlisted shares or similar interests of that special certified succession company held by that individual and persons who have a special relationship specified by Cabinet Order with that individual exceeds 50 percent of the total number of voting rights of all shareholders, etc. of that special certified succession company;

the requirements specified below are satisfied according to the category of cases listed below:

in the case where there is one such individual: at the time of the commencement of the succession, the number of voting rights relating to the unlisted shares or similar interests of that special certified succession company held by that individual is not less than the number of voting rights relating to the unlisted shares or similar interests of that special certified succession company held by any of the persons who have the special relationship specified by Cabinet Order prescribed in (b) with that individual (excluding persons other than that individual who receive the application of the provisions of paragraph (1) of the preceding Article, the preceding paragraph or Article 70-7-8, paragraph (1); the same applies in (2));

in the case where there are two or three such individuals: at the time of the commencement of the succession, the number of voting rights relating to the unlisted shares or similar interests of that special certified succession company held by that individual is 10 percent or more of the total number of voting rights of all shareholders, etc. of that special certified succession company, and is not less than the number of voting rights relating to the unlisted shares or similar interests of that special certified succession company held by any of the persons who have the special relationship specified by Cabinet Order prescribed in (b) with that individual;

that individual has continuously held all of the special eligible unlisted shares or similar interests of that special certified succession company acquired by that inheritance or bequest 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 that individual has died before that due date, the day of that death);

that individual has not received the application of the provisions of Article 70-7, paragraph (1), Article 70-7-2, paragraph (1) or Article 70-7-4, paragraph (1) with regard to the unlisted shares or similar interests of that special certified succession company;

that individual satisfies the requirements specified by Order of the Ministry of Finance as requirements under which the individual is found to reliably succeed to the management of that special certified succession company;

inheritance tax subject to deferral: This means the amount of inheritance tax of the special business successor 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 and deeming the value of the special eligible unlisted shares or similar interests to which the provisions of that paragraph apply (or, in the case where the special certified succession company relating to those special eligible unlisted shares or similar interests, or a specially related company of that special certified succession company that is a corporation having a controlling relationship with that special certified succession company (referred to as the "special certified succession company, etc." in this item), holds shares, etc. (including investment equity prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations) of a foreign company prescribed in Article 2, item (ii) of the Companies Act (limited to one falling under a specially related company of that special certified succession company) or any other corporation specified by Cabinet Order, the value calculated on the assumption that the special certified succession company, etc. did not hold those shares, etc.) to be the taxable value of inheritance tax relating to the special business successor heir, etc. referred to in that paragraph;

base date for management reports: This means the day specified in (a) or (b) according to the category of periods listed in (a) or (b):

the special business succession period: each day on which one year elapses from the day following the due date for filing the inheritance tax return relating to the inheritance to which the provisions of the preceding paragraph apply (or, in the case where, before receiving the application of the provisions of that paragraph, the special business successor heir, etc. has received the application of the provisions of paragraph (1) of the preceding Article with regard to unlisted shares or similar interests of the special certified succession company relating to the special eligible unlisted shares or similar interests referred to in the preceding paragraph, the due date for filing the gift tax return prescribed in paragraph (1) of the preceding Article) (referred to as the "type 1 base date" in paragraph (7));

the period from the day following the last day of the special business succession period until the day on which the deadline of the tax payment grace period under the provisions of the preceding paragraph, Article 70-7-2, paragraphs (3) through (5) as applied mutatis mutandis pursuant to the following paragraph, paragraph (12) of that Article as applied mutatis mutandis pursuant to paragraph (9), paragraph (13) of that Article as applied mutatis mutandis pursuant to paragraph (10), or paragraph (15) of that Article as applied mutatis mutandis pursuant to paragraph (11) is fixed for all of the inheritance tax equivalent to the inheritance tax subject to deferral (excluding, in the case where the provisions of Article 70-7-2, paragraph (4) or paragraph (5) as applied mutatis mutandis pursuant to the following paragraph have already been applied, the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of the special eligible unlisted shares or similar interests to which those provisions were applied; referred to as the "amount of inheritance tax under a grace period" hereinafter in this Article): each day on which three years elapse from the day following that last day (referred to as the "type 2 base date" in paragraph (7)).

The provisions of Article 70-7-2, paragraph (3) (excluding item (ii)), paragraph (4) and paragraph (5) apply mutatis mutandis to the fixing of the deadline of the tax payment grace period under the provisions of paragraph (1). In this case, the phrase "paragraph (1) of the preceding Article" in paragraph (3), item (iii) of that Article is deemed to be replaced with "Article 70-7, paragraph (1)", the phrase "any of the persons" in item (iv) of that paragraph is deemed to be replaced with "any of the persons (excluding special business successor heirs, etc. other than that special business successor heir, etc., a special business successor donee prescribed in Article 70-7-5, paragraph (2), item (vi) who receives the application of the provisions of paragraph (1) of that Article, and a special business successor donee upon inheritance prescribed in Article 70-7-8, paragraph (2), item (i) who receives the application of the provisions of paragraph (1) of that Article)", and the phrase "paragraph (1) of the preceding Article" in the left-hand column of item (i) of the table in paragraph (4) of that Article is deemed to be replaced with "Article 70-7, paragraph (1)".

The provisions of Article 70-7-2, paragraph (6) apply mutatis mutandis in the case where the special business successor heir, etc. who seeks to receive the application of the provisions of paragraph (1) has provided all of the special eligible unlisted shares or similar interests (or, in the case where the special certified succession company relating to those special eligible unlisted shares or similar interests 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 those special eligible unlisted shares or similar interests; the same applies hereinafter in this Article) as security for the inheritance tax subject to deferral.

The provisions of Article 70-7-2, paragraph (7) apply mutatis mutandis in the case where, by the due date for filing the inheritance tax return relating to the inheritance referred to in paragraph (1), all or part of the unlisted shares or similar interests acquired by that inheritance or bequest have not yet been divided among the co-heirs or universal legatees.

The provisions of paragraph (1) do not apply in the case where the inheritance tax return relating to the unlisted shares or similar interests that the special business successor heir, etc. seeking the application of the provisions of that paragraph acquired by inheritance or bequest from the special decedent does not state that the special business successor heir, etc. seeks the application of the provisions of that paragraph for all or part of those unlisted shares or similar interests, or where a document stating details of those unlisted shares or similar interests, 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, Article 70-7-2, paragraphs (3) through (5) as applied mutatis mutandis pursuant to paragraph (3) of this Article, paragraph (12) of that Article as applied mutatis mutandis pursuant to paragraph (9), paragraph (13) of that Article as applied mutatis mutandis pursuant to paragraph (10), or paragraph (15) of that Article as applied mutatis mutandis pursuant to paragraph (11) is fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period, there is a base date for management reports, the special business successor heir, etc. to whom the provisions of paragraph (1) apply must, by the notification deadline (meaning the day on which five months have elapsed from the day following the type 1 base date and the day on which three months have elapsed from the day following the type 2 base date; the same applies in paragraph (9) and paragraph (22)), 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 successor heir, etc. wishes to continue to receive the application of the provisions of paragraph (1) and matters concerning the management of the special certified succession company relating to the special eligible unlisted shares or similar interests referred to in that paragraph.

The provisions of Article 70-7-2, paragraph (11) apply mutatis mutandis 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.

The provisions of Article 70-7-2, paragraph (12) apply mutatis mutandis in the case where the written notification referred to in paragraph (7) is not submitted to the district director with jurisdiction over the place for tax payment by the notification deadline.

The provisions of Article 70-7-2, paragraph (13) apply mutatis mutandis to the acceleration of the deadline of the tax payment grace period under the provisions of paragraph (1).

The provisions of Article 70-7-2, paragraphs (14) and (15) apply mutatis mutandis 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 successor 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. In this case, the phrase "the value calculated by multiplying the value of those covered unlisted shares or similar interests by 20 percent" in paragraph (14), item (xi) of that Article is deemed to be replaced with "zero", the phrase "the sum of the value calculated by multiplying the value calculated on the assumption that the certified succession company, etc. did not hold those shares, etc. by 20 percent and the value of those shares, etc." in that item is deemed to be replaced with "the value of those shares, etc.", the phrase "successor heir, etc." in paragraph (15) of that Article is deemed to be replaced with "special business successor heir, etc.", the phrase "decedent" is deemed to be replaced with "special decedent", the phrase "Article 70-7-2, paragraph (2), item (i)" is deemed to be replaced with "Article 70-7-6, paragraph (2), item (i)", the phrase "(Tax Payment Grace Period and Exemption for Inheritance Tax on Unlisted Shares or Similar Interests)" is deemed to be replaced with "(Special Provisions on Tax Payment Grace Period and Exemption for Inheritance Tax on Unlisted Shares or Similar Interests)", the phrase "certified succession company" is deemed to be replaced with "special certified succession company", the words "', the phrase 'its shareholders" are deemed to be replaced with " or the special business successor heir, etc. prescribed in item (vii) of that paragraph', the phrase 'its shareholders", the phrase "referred to in paragraph (1) of that Article" is deemed to be replaced with "that", the phrase "that paragraph" is deemed to be replaced with "paragraph (1) of that Article", the phrase "determine the inheritance tax under the tax payment grace period to be exempted" is deemed to be replaced with "determine the inheritance tax under the tax payment grace period to be exempted, or rescind the exemption from that inheritance tax", the phrase "Article 70-7-2, paragraph (1)" is deemed to be replaced with "Article 70-7-6, paragraph (1)", and the phrase "Article 70-7-2" is deemed to be replaced with "Article 70-7-6".

The provisions of Article 70-7-2, paragraphs (16) through (21) apply mutatis mutandis to the exemption from inheritance tax for which a tax payment grace period has been granted under the provisions of paragraph (1). In this case, the phrase "paragraph (1) of the preceding Article" in paragraph (16), item (ii) of that Article is deemed to be replaced with "Article 70-7, paragraph (1)", and the phrase "paragraph (28)" in paragraphs (19) and (20) of that Article is deemed to be replaced with "Article 70-7-6, paragraph (23)".

In the case where the special business successor heir, etc. to whom the provisions of paragraph (1) apply or the special certified succession company relating to the special eligible unlisted shares or similar interests referred to in that paragraph 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 that special certified succession company to continue its business has arisen, and excluding the case where, before the day on which it came to fall under that case, the provisions of Article 70-7-2, paragraph (12) as applied mutatis mutandis pursuant to paragraph (9) have been applied, and the case where, before that day, the deadline of the tax payment grace period has been accelerated under the provisions of paragraph (13) of that Article as applied mutatis mutandis pursuant to paragraph (10) or paragraph (15) of that Article as applied mutatis mutandis pursuant to paragraph (11)), if that special business successor heir, etc. seeks an exemption from the inheritance tax specified in the relevant item, the special business successor heir, etc. must, by the day on which two months have elapsed from the day on which it came to fall under that case (or, in the case where that special business successor heir, etc. has died during the period from the day on which it came to fall under that case until the day on which those two months elapse, the day on which six months have elapsed from the day following the day on which the heir of that special business successor heir, etc. (including a universal legatee; the same applies in paragraph (15), item (i) and paragraph (23)) came to know of the commencement of the succession due to the death of that special business successor heir, etc.; referred to as the "application deadline" in the following paragraph and paragraph (18)), submit to the district director with jurisdiction over the place for tax payment a written application stating that the special business successor heir, etc. wishes to receive that exemption, the amount equivalent to the inheritance tax for which the special business successor heir, etc. seeks the exemption, details of its calculation and other matters specified by Order of the Ministry of Finance (limited to a written application to which the documents necessary for the procedure for that exemption and other documents specified by Order of the Ministry of Finance are attached; the same applies in the following paragraph). In this case, with regard to the application of the provisions of Article 70-7-2, paragraph (5) as applied mutatis mutandis pursuant to paragraph (3), the phrase "items (viii) through (xii)" in item (i) of the table in that paragraph is deemed to be replaced with "item (viii)", the phrase "amount of inheritance tax under a grace period" in that item is deemed to be replaced with "the sum of the amounts listed in Article 70-7-6, paragraph (13), item (i), (a) and (b) or the sum of the amounts listed in item (iv), (a) and (b) of that paragraph", the phrase "the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part, out of the amount of inheritance tax under a grace period, corresponding to the number or amount of the eligible unlisted shares or similar interests for which that transfer, etc. was made" in the middle column of item (ii) of that table is deemed to be replaced with "the sum of the amounts listed in Article 70-7-6, paragraph (13), item (i), (a) and (b)", the phrase "the amount of inheritance tax under a grace period (or, in the case where shares, etc. of the company surviving the absorption-type merger, etc. were delivered upon that merger, excluding the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of those shares, etc.)" in the middle column of item (iii) of that table is deemed to be replaced with "the sum of the amount listed in Article 70-7-6, paragraph (13), item (ii), (a) (limited to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of property other than shares, etc. of the company surviving the absorption-type merger, etc. delivered upon that merger) and the amount listed in (b) of that item", and the phrase "the amount of inheritance tax under a grace period (or, in the case where shares, etc. of that other company were delivered upon that share exchange, etc., excluding the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of those shares, etc.)" in the middle column of item (iv) of that table is deemed to be replaced with "the sum of the amount listed in Article 70-7-6, paragraph (13), item (iii), (a) (limited to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of property other than shares, etc. of that other company delivered upon that share exchange, etc.) and the amount listed in (b) of that item".

in the case where, on or after the day following the last day of the special business succession period, that special business successor heir, etc. has made a transfer, etc. (meaning a transfer or gift; the same applies hereinafter in this Article) of all or part of those special eligible unlisted shares or similar interests (limited to the case where it is made to a person other than a person who has a special relationship specified by Cabinet Order with that special business successor 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. (limited to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the number or amount of the special eligible unlisted shares or similar interests for which that transfer, etc. was made): 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 (viii) 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 specified by Order of the Ministry of Finance as the amount equivalent to the market value, at the time of that transfer, etc., of those special eligible unlisted shares or similar interests corresponding to the number or amount 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 eligible unlisted shares or similar interests acquired by the inheritance to which the provisions of paragraph (1) apply;

the total of the amount of dividends of surplus, etc. that that special business successor heir, etc. and persons who have a special relationship specified by Cabinet Order with that special business successor heir, etc. received from that special certified succession company within five years on or before the day on which that transfer, etc. was made, and the other amounts specified by Cabinet Order as amounts received from that special certified succession company;

in the case where, on or after the day following the last day of the special business succession period, the special certified succession company relating to those special eligible unlisted shares or similar interests has been extinguished through a merger (limited to the case where the company surviving the absorption-type merger, etc. (meaning the company surviving an absorption-type merger prescribed in Article 749, paragraph (1) of the Companies Act or the company incorporated in a consolidation-type merger prescribed in Article 753, paragraph (1) of that Act; the same applies hereinafter in this Article) is a person other than a person who has a special relationship specified by Cabinet Order with that special business successor heir, etc.), if the sum of the following amounts is less than the amount of inheritance tax under a grace period immediately before that merger takes effect: 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 (viii) by deeming the amount of the consideration for the merger (meaning the property that the company surviving the absorption-type merger, etc. delivers upon that merger to the shareholders or members of the special certified succession company being extinguished) (or, in the case where that amount is one half or less of the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of those special eligible unlisted shares or similar interests immediately before that merger takes effect, the amount equivalent to that one half) to be the value, at the time of the commencement of the succession, of the special eligible unlisted shares or similar interests acquired by the inheritance to which the provisions of paragraph (1) apply;

the total of the amount of dividends of surplus, etc. that that special business successor heir, etc. and persons who have a special relationship specified by Cabinet Order with that special business successor heir, etc. received from that special certified succession company within five years on or before the day on which that merger takes effect, and the other amounts specified by Cabinet Order as amounts received from that special certified succession company;

in the case where, on or after the day following the last day of the special business succession period, the special certified succession company relating to those special eligible unlisted shares or similar interests has become a wholly owned subsidiary company resulting from a share exchange or share transfer (meaning a wholly owned subsidiary company resulting from the share exchange prescribed in Article 768, paragraph (1), item (i) of the Companies Act or a wholly owned subsidiary company resulting from a share transfer prescribed in Article 773, paragraph (1), item (v) of that Act; the same applies in (a) and paragraph (15), item (i), (c)) of another company through a share exchange or share transfer (referred to as a "share exchange, etc." hereinafter in this Article) (limited to the case where that other company is a person other than a person who has a special relationship specified by Cabinet Order with that special business successor heir, etc.), if the sum of the following amounts is less than the amount of inheritance tax under a grace period immediately before that share exchange, etc. takes effect: 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 (viii) by deeming the amount of the consideration for the share exchange, etc. (meaning the property that that other company delivers upon that share exchange, etc. to the shareholders of the special certified succession company that has become that wholly owned subsidiary company resulting from a share exchange or share transfer) (or, in the case where that amount is one half or less of the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of those special eligible unlisted shares or similar interests immediately before that share exchange, etc. takes effect, the amount equivalent to that one half) to be the value, at the time of the commencement of the succession, of the special eligible unlisted shares or similar interests acquired by the inheritance to which the provisions of paragraph (1) apply;

the total of the amount of dividends of surplus, etc. that that special business successor heir, etc. and persons who have a special relationship specified by Cabinet Order with that special business successor heir, etc. received from that special certified succession company within five years on or before the day on which that share exchange, etc. takes effect, and the other amounts specified by Cabinet Order as amounts received from that special certified succession company;

in the case where, on or after the day following the last day of the special business succession period, the special certified succession company relating to those special eligible unlisted shares or similar interests has dissolved, if the sum of the following amounts is less than the amount of inheritance tax under a grace period immediately before that dissolution: 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 (viii) by deeming the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of those special eligible unlisted shares or similar interests immediately before that dissolution to be the value, at the time of the commencement of the succession, of the special eligible unlisted shares or similar interests acquired by the inheritance to which the provisions of paragraph (1) apply;

the total of the amount of dividends of surplus, etc. that that special business successor heir, etc. and persons who have a special relationship specified by Cabinet Order with that special business successor heir, etc. received from that special certified succession company within five years on or before the day of that dissolution, and the other amounts specified by Cabinet Order as amounts received from that special certified succession company.

In the case falling under any of the cases listed in the items of the preceding paragraph (excluding item (iv)) and also falling under any of the following cases, if a special business successor heir, etc. seeks to receive the application of the provisions of the following paragraph, notwithstanding the provisions of the preceding paragraph, only in the case where the special business successor heir, etc. has provided, by the application deadline, security equivalent to the sum of the amounts listed in (a) and (b) of the relevant item of that paragraph and has also submitted, by that application deadline, to the district director with jurisdiction over the place for tax payment a written application stating that the special business successor heir, etc. seeks to receive the application of the provisions of this paragraph, details of the calculation of that amount and other matters specified by Order of the Ministry of Finance, the remaining amount after deducting that sum from the deferred tax subject to recalculation (meaning, in the case falling under the case listed in item (i) of the preceding paragraph, the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part, out of the amount of inheritance tax under a grace period, corresponding to the number or amount of the special eligible unlisted shares or similar interests for which the transfer, etc. referred to in that item was made, and, in the case falling under the case listed in item (ii) or item (iii) of that paragraph, the amount equivalent to the amount of inheritance tax under a grace period; the same applies hereinafter in this paragraph) may be exempted, and that sum (or, in the case falling under the case listed in item (i) of the preceding paragraph, the amount obtained by adding to that sum the remaining amount after deducting that deferred tax subject to recalculation from the amount of inheritance tax under a grace period) may be made the amount of inheritance tax under a grace period:

in the case where the amount of consideration for the transfer, etc. prescribed in item (i), (a) of the preceding paragraph is one half or less of the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of the special eligible unlisted shares or similar interests at the time of that transfer, etc.;

in the case where the amount of the consideration for the merger prescribed in item (ii), (a) of the preceding paragraph is one half or less of the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of the special eligible unlisted shares or similar interests immediately before the merger takes effect;

in the case where the amount of the consideration for the share exchange, etc. prescribed in item (iii), (a) of the preceding paragraph is one half or less of the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of the special eligible unlisted shares or similar interests immediately before the share exchange, etc. takes effect.

With regard to the deadline of the tax payment grace period for, and the exemption from, the inheritance tax equivalent to the amount that has been made the amount of inheritance tax under a grace period pursuant to the provisions of the preceding paragraph, as of the day on which two years have elapsed from the day on which it came to fall under any of the cases listed in the items of paragraph (13) (excluding item (iv)) (or, in the case where the special business successor heir, etc. to whom the provisions of paragraph (1) apply has died before the day on which those two years elapse, the day preceding the day of that death), the provisions specified in the following items apply according to the category of cases listed in those items:

in the case specified by Cabinet Order as the case where the following company continues its business on the day on which those two years have elapsed: notwithstanding the provisions of paragraph (1), the deadline of the tax payment grace period under the provisions of paragraph (1) for the inheritance tax equivalent to the special recalculated inheritance tax amount (or, in the case falling under the case listed in item (ii) or item (iii) of the preceding paragraph, limited to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of property other than shares, etc. delivered upon the merger referred to in item (ii) of that paragraph or the share exchange, etc. referred to in item (iii) of that paragraph) is the day on which two months have elapsed from the day on which those two years have elapsed (or, in the case where that special business successor heir, etc. has died during the period from the day on which those two years have elapsed until the day on which those two months elapse, the day on which six months have elapsed from the day following the day on which the heir of that special business successor heir, etc. came to know of the commencement of the succession due to the death of that special business successor heir, etc.; referred to as the "re-application deadline" in the following item, paragraph (17) and paragraph (18)), and the inheritance tax equivalent to the remaining amount after deducting the special recalculated inheritance tax amount from the amount that has been made the amount of inheritance tax under a grace period pursuant to the provisions of the preceding paragraph is exempted;

in the case listed in item (i) of the preceding paragraph, the company relating to the special eligible unlisted shares or similar interests for which the transfer, etc. referred to in that item was made;

in the case listed in item (ii) of the preceding paragraph, the company surviving the absorption-type merger, etc. relating to the merger referred to in that item;

in the case listed in item (iii) of the preceding paragraph, the wholly owned subsidiary company resulting from a share exchange or share transfer relating to the share exchange, etc. referred to in that item;

in the case where the company listed in (a) through (c) of the preceding item does not fall under the case specified by Cabinet Order prescribed in that item on the day on which those two years have elapsed: 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 that has been made the amount of inheritance tax under a grace period pursuant to the provisions of the preceding paragraph (or, in the case falling under the case listed in item (ii) or item (iii) of that paragraph, limited to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part corresponding to the value of property other than shares, etc. delivered upon the merger referred to in item (ii) of that paragraph or the share exchange, etc. referred to in item (iii) of that paragraph) is the re-application deadline.

The term "special recalculated inheritance tax amount" referred to in item (i) of the preceding paragraph means the amount obtained by adding the amount listed in paragraph (13), item (i), (b), item (ii), (b) or item (iii), (b) to the amount calculated under the provisions of paragraph (2), item (viii) by deeming the amount equivalent to the amount of consideration for the transfer, etc., the amount of the consideration for the merger or the amount of the consideration for the share exchange, etc. relating to the application of the provisions of that item to be the value, at the time of the commencement of the succession, of the special eligible unlisted shares or similar interests acquired by the inheritance to which the provisions of paragraph (1) apply.

A special business successor heir, etc. who seeks to receive the exemption from the inheritance tax referred to in paragraph (15), item (i) pursuant to the provisions of that item must, by the re-application deadline, submit to the district director with jurisdiction over the place for tax payment a written application stating that the special business successor heir, etc. wishes to receive the exemption referred to in that item, the amount equivalent to the inheritance tax for which the special business successor heir, etc. seeks the exemption, details of its calculation and other matters specified by Order of the Ministry of Finance (limited to a written application to which the documents necessary for the procedure for that exemption and other documents specified by Order of the Ministry of Finance are attached).

In the case where a written application under the provisions of paragraph (13), paragraph (14) 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 (13) according to the category of the cases listed in those items relating to that written application or from the inheritance tax prescribed in paragraph (14) or paragraph (15), item (i), or dismisses the application relating to that written application. In this case, the district director is to notify the special business successor heir, etc. who submitted that written application of the amount of the inheritance tax so exempted, or of the dismissal and the reason therefor, by means of a document stating them, within six months counting from the day following the application deadline or the re-application deadline relating to that written application.

The provisions of Article 70-7-2, paragraphs (19) and (20) apply mutatis mutandis in the case where the written application referred to in paragraph (13), paragraph (14) or paragraph (17) has been submitted. In this case, the phrase "item (vi) of the table in paragraph (28)" in paragraph (19) of that Article is deemed to be replaced with "item (ix) of the table in Article 70-7-6, paragraph (23)", the phrase "item (viii)" is deemed to be replaced with "item (xii)", the phrase "item (vi) of that table" is deemed to be replaced with "item (ix) of that table", and the phrase "the left-hand column of item (vi) of the table in paragraph (28) or item (viii) of that table" in paragraph (20) of that Article is deemed to be replaced with "items (ix) through (xi) of the table in Article 70-7-6, paragraph (23)".

Beyond what is provided for in the preceding three paragraphs, necessary matters concerning the application of paragraphs (13) through (15) are specified by Cabinet Order.

The provisions of Article 70-7-2, paragraphs (22) through (26) apply mutatis mutandis to the calculation of and exemption from the inheritance tax subject to deferral in the case where the assessment prescribed in paragraph (22) of that Article has been made with regard to a special certified succession company.

The provisions of Article 70-7-2, paragraph (27) apply mutatis mutandis in the case where the written notification referred to in paragraph (7), or in paragraph (16) of that Article as applied mutatis mutandis pursuant to paragraph (12), has not been submitted by the notification deadline or the deadline for notification of exemption referred to in that paragraph.

With regard to the application of the provisions of the preceding paragraph in the case where a special business successor heir, etc. to whom the provisions of paragraph (1) have been applied falls under the case listed in the left-hand column of items (iii) through (xiv) of the table in that paragraph (or, in the case falling under the case listed in the left-hand column of item (iv) or item (v) of that table, limited to the case where the special business successor heir, etc. has come to fall under the case prescribed in those provisions on or after the day following the last day of the special business succession period), the phrase "3.6 percent per annum" in that paragraph is deemed to be replaced with "3.6 percent per annum (0 percent per annum for the special business succession period)".

The provisions of Article 70-7-2, paragraph (30) apply mutatis mutandis in the case where the special certified succession company relating to the special eligible unlisted shares or similar interests referred to in paragraph (1) has acquired property through a capital contribution in kind or a gift from the special business successor heir, etc. who seeks to receive the application of the provisions of that paragraph or from a person who has a special relationship specified by Cabinet Order with that special business successor heir, etc.

The provisions of Article 70-7-2, paragraphs (31) through (39) apply mutatis mutandis in the case where the special certified succession company relating to the special eligible unlisted shares or similar interests referred to in paragraph (1) has suffered damage from a disaster, etc. prescribed in paragraph (32) of that Article.

The provisions of Article 70-7-2, paragraph (40) apply mutatis mutandis in the case where the Minister of Economy, Trade and Industry or the Director-General of a Bureau of Economy, Trade and Industry has come to know, with regard to the special business successor heir, etc. who receives the application of the provisions of paragraph (1), the special eligible unlisted shares or similar interests referred to in that paragraph or the special certified succession company relating to those special eligible unlisted shares or similar interests, that a fact relating to the fixing of the deadline of the tax payment grace period under the provisions of paragraphs (3) through (5) of that Article as applied mutatis mutandis pursuant to paragraph (3) has occurred, through having made a certification or confirmation, accepted a report or performed any other act concerning that fact pursuant to the provisions of laws and regulations.

The provisions of Article 70-7-2, paragraph (41) apply mutatis mutandis in the case where the district director finds it necessary in order for 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 successor heir, etc. who receives the application of the provisions of paragraph (1) that relate to the application of the provisions of paragraph (40) of that Article as applied mutatis mutandis pursuant to the preceding paragraph) to be processed properly and reliably.

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.