Act on Special Measures Concerning Taxation

Where a corporation listed in any of the following items has had the fact that public and corporate bonds, beneficial interests in a jointly managed trust, an investment trust, or a specified trust that issues beneficiary certificates, bond-type beneficial interests, shares, or capital contributions which it manages as its assets (hereinafter referred to in this Article as "public and corporate bonds, etc.") are assets under the management of the corporation listed in that item, and other matters specified by Order of the Ministry of Finance, entered in the books kept by the person who pays in Japan, on the public and corporate bonds, etc., interest and similar income prescribed in Article 23, paragraph (1) of the Income Tax Act (hereinafter referred to in this Article as "interest and similar income") or dividends and similar income prescribed in Article 24, paragraph (1) of that Act (hereinafter referred to in this Article as "dividends and similar income"), the provisions of Article 7, paragraph (1), item (iv), Article 174, Article 175, and Article 212, paragraph (3) of that Act do not apply to the interest and similar income or dividends and similar income paid on the public and corporate bonds, etc. within the period during which the entry has been made:

an investment corporation (meaning an investment corporation as prescribed in Article 2, paragraph (12) of the Act on Investment Trusts and Investment Corporations; hereinafter the same applies in this item) that falls under either of the following:

an investment corporation specified by Cabinet Order as having been established for the purpose of investing its assets mainly in securities;

an investment corporation for which the public offering of investment units (meaning investment units as prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations) at its incorporation was conducted through a solicitation of offers to acquire as prescribed in Article 2, paragraph (3) of the Financial Instruments and Exchange Act which is specified by Cabinet Order as falling under the case listed in item (i) of that paragraph;

a specific purpose company as prescribed in Article 2, paragraph (3) of the Act on the Securitization of Assets which is specified by Cabinet Order as one whose specified assets prescribed in paragraph (1) of that Article are mainly securities.

Where a domestic trust company prescribed in Article 176, paragraph (1) of the Income Tax Act has had the fact that public and corporate bonds, etc. belonging to the trust property of an investment trust other than a securities investment trust which it has undertaken (limited to one for which the public offering of beneficial rights at its establishment was conducted through a public offering as prescribed in Article 8-4, paragraph (1), item (ii), and which has been entrusted to a business office, office, or any other equivalent place located in Japan; the same applies in paragraph (4)) belong to that trust property, and other matters specified by Order of the Ministry of Finance, entered in the books kept by the person who pays interest and similar income or dividends and similar income in Japan on the public and corporate bonds, etc., the provisions of Article 7, paragraph (1), item (iv), Article 174, Article 175, and Article 212, paragraph (3) of that Act do not apply to the interest and similar income or dividends and similar income paid on the public and corporate bonds, etc. within the period during which the entry has been made.

Where the Trust Corporation (meaning a Trust Corporation prescribed in Article 6-3 of the Income Tax Act (limited to one to which the provisions of this Act apply as a domestic corporation pursuant to the provisions of Article 6-3, item (i) of that Act as applied mutatis mutandis pursuant to Article 2-2, paragraph (2))) of a special purpose trust (limited to one specified by Cabinet Order as a trust whose entrusted specified assets prescribed in Article 2, paragraph (1) of the Act on the Securitization of Assets are mainly securities; hereinafter the same applies in this paragraph) has had the fact that public and corporate bonds, etc. belonging to the trust property of the special purpose trust belong to that trust property, and other matters specified by Order of the Ministry of Finance, entered in the books kept by the person who pays interest and similar income or dividends and similar income in Japan on the public and corporate bonds, etc., the provisions of Article 7, paragraph (1), item (iv), Article 174, Article 175, and Article 212, paragraph (3) of the Income Tax Act do not apply to the interest and similar income or dividends and similar income paid on the public and corporate bonds, etc. within the period during which the entry has been made.

Where a foreign trust company prescribed in Article 180-2, paragraph (1) of the Income Tax Act has had the fact that public and corporate bonds, etc. belonging to the trust property of an investment trust other than a securities investment trust which it has undertaken belong to that trust property, and other matters specified by Order of the Ministry of Finance, entered in the books kept by the person who pays, on the public and corporate bonds, etc., domestic source income listed in Article 161, paragraph (1), item (viii) (excluding (c) of that item) or item (ix) of that Act (hereinafter referred to in this paragraph as "specified domestic source income"), the provisions of Article 7, paragraph (1), item (v), Article 178, Article 179, and Article 212, paragraphs (1) and (2) of that Act do not apply to the specified domestic source income paid on the public and corporate bonds, etc. within the period during which the entry has been made.

The provisions of Article 174, Article 175, Article 178, Article 179, and Article 212, paragraphs (1) through (3) of the Income Tax Act and Article 8-3, paragraphs (2) and (3) do not apply to distributions of proceeds which a domestic corporation (excluding a domestic corporation listed in Appended Table 1 of the Income Tax Act; the same applies in the following paragraph) or a foreign corporation that has a permanent establishment receives in Japan upon the termination or partial cancellation of any of the following trusts (limited to those whose beneficial rights are listed on a financial instruments exchange as prescribed in Article 2, paragraph (16) of the Financial Instruments and Exchange Act (including a similar exchange established under the laws and regulations of a foreign state) or which otherwise meet the requirements specified by Cabinet Order; referred to in the following paragraph and paragraph (3) as "listed securities investment trusts, etc.") (for those received by a foreign corporation that has a permanent establishment, limited to those falling under the domestic source income listed in Article 141, item (i), (a) of the Corporation Tax Act):

A person who pays in Japan to a domestic corporation or a foreign corporation that has a permanent establishment money or other assets (for those paid to a foreign corporation that has a permanent establishment, limited to those attributable to the permanent establishment; hereinafter referred to in this paragraph and the following paragraph as "redemption money or a similar asset") upon the termination (where it pertains to a merger of trusts of a listed securities investment trust, etc., limited to a termination pertaining to a merger of trusts in which assets other than beneficial interests in the trust newly formed by the merger of trusts (excluding money or other assets delivered to a beneficiary who opposes the merger of trusts as consideration based on that beneficiary's demand for purchase) have been delivered to the beneficiaries of the listed securities investment trust, etc.; hereinafter the same applies in this paragraph) or partial cancellation of a listed securities investment trust, etc. must submit a report stating the name and the location of the head office or principal office of the corporation, the amount of the redemption money or a similar asset, and other matters specified by Order of the Ministry of Finance, for each domestic corporation or foreign corporation that has a permanent establishment receiving the payment of the redemption money or a similar asset (hereinafter referred to in this Article as a "payment report on redemption money, etc. of listed securities investment trusts, etc."), to the competent district director with jurisdiction over the location of the head office or principal office of the person making the payment, by the last day of the month following the month that includes the day on which the termination or partial cancellation of the listed securities investment trust, etc. occurred.

When it is necessary for an investigation concerning the submission of a payment report on redemption money, etc. of listed securities investment trusts, etc., the relevant official of the National Tax Agency, the Regional Taxation Bureau, or the tax office may ask questions of a person who is obligated to submit the payment report on redemption money, etc. of listed securities investment trusts, etc., inspect that person's books and documents concerning the listed securities investment trusts, etc. pertaining to the payment of redemption money or a similar asset and other articles, or request the presentation or submission of those articles (including copies thereof).

When it is necessary for an investigation concerning the submission of a payment report on redemption money, etc. of listed securities investment trusts, etc., the relevant official of the National Tax Agency, the Regional Taxation Bureau, or the tax office may retain articles submitted in the course of the investigation.

The relevant official of the National Tax Agency, the Regional Taxation Bureau, or the tax office, when asking questions, conducting an inspection, or requesting presentation or submission pursuant to the provisions of paragraph (3), must carry an identification card and present it to the person concerned when requested.

The authority of the official under the provisions of paragraph (3) and paragraph (4) must not be construed as being granted for the purpose of a criminal investigation.

Beyond what is provided for in the preceding paragraph, necessary matters concerning the application of the provisions of paragraph (4) are specified by Cabinet Order.

Where a financial instruments business operator as prescribed in Article 2, paragraph (9) of the Financial Instruments and Exchange Act (limited to a person engaged in type I financial instruments business as prescribed in Article 28, paragraph (1) of that Act) or any other person specified by Cabinet Order (hereinafter referred to in this Article as a "financial instruments business operator, etc.") has purchased, from a customer in the handling, beneficial rights in a securities investment trust other than a bond investment trust for which the financial instruments business operator, etc. has conducted a public offering or other handling specified by Cabinet Order and for which the public offering of beneficial rights at its establishment was conducted through a public offering (meaning a solicitation of offers to acquire as prescribed in Article 2, paragraph (3) of that Act which is specified by Cabinet Order as falling under the case listed in item (i) of that paragraph) (excluding a specified stock investment trust and a listed securities investment trust, etc. prescribed in paragraph (1) of the preceding Article; hereinafter referred to in this paragraph and the following paragraph as a "publicly offered securities investment trust in shares, etc."), and the beneficial rights are managed by entry or recording in a transfer account book as prescribed in the Act on Book-Entry Transfer of Corporate Bonds and Shares or by any other method specified by Cabinet Order, the provisions of Article 174, Article 175, Article 178, Article 179, and Article 212, paragraphs (1) and (3) of the Income Tax Act do not apply to the portion, out of the distributions of proceeds which the financial instruments business operator, etc. receives upon the termination or partial cancellation of the publicly offered securities investment trust in shares, etc. on the day of the purchase or the business day following that day (in the cases specified by Cabinet Order, the day specified by Cabinet Order), that is equivalent to the amount calculated, as specified by Cabinet Order, as the amount of the portion corresponding to the period during which the customer continuously held the beneficial rights.

The provisions of the preceding paragraph apply only where a financial instruments business operator, etc. has submitted, as specified by Cabinet Order, a return stating that it seeks the application of the provisions of that paragraph to distributions of proceeds from the publicly offered securities investment trust in shares, etc. and other matters specified by Order of the Ministry of Finance, to the district director via the person who pays the distributions of proceeds from the publicly offered securities investment trust in shares, etc. (referred to in the following paragraph as the "payer").

A financial instruments business operator, etc. referred to in the preceding paragraph may, in lieu of submitting the return pursuant to the provisions of that paragraph, provide the payer referred to in that paragraph with the matters to be stated in the return by electronic or magnetic means prescribed in Article 3-3, paragraph (8). In this case, the financial instruments business operator, etc. is deemed to have submitted the return to the payer.