Act on Special Measures Concerning Taxation

Where a resident or a nonresident who has a permanent establishment transfers listed shares, etc. on or after January 1, 2016, with respect to the business income, capital gains and miscellaneous income from the transfer of the listed shares, etc. (excluding business income and miscellaneous income falling under the provisions of Article 41-2 of the Income Tax Act and capital gains falling under the provisions of Article 32, paragraph (2); referred to as "capital gains, etc. on listed shares, etc." in paragraphs (3) and (4)), notwithstanding the provisions of Articles 22 and 89 and Article 165 of that Act, income tax is imposed, separately from other income, on the amount calculated pursuant to the provisions of Cabinet Order as the amount of business income, the amount of capital gains and the amount of miscellaneous income pertaining to the transfer of the listed shares, etc. during that year (hereinafter referred to as the "amount of capital gains, etc. on listed shares, etc." in this paragraph), in an amount equivalent to 15 percent of the amount of taxable capital gains, etc. on listed shares, etc. (meaning the amount of capital gains, etc. on listed shares, etc. (where the provisions of Articles 72 through 87 of that Act as replaced pursuant to the provisions of paragraph (6), item (v) of the preceding Article as applied mutatis mutandis pursuant to paragraph (6) apply, the amount after that application)). In this case, if there is an amount of losses arising in the calculation of the amount of capital gains, etc. on listed shares, etc., the amount of losses is deemed not to have arisen for the purpose of applying the provisions of that Act and other laws and regulations concerning income tax.

In this Article, "listed shares, etc." means the following among shares, etc. (meaning shares, etc. prescribed in paragraph (2) of the preceding Article; the same applies in item (i)):

shares, etc. listed on a financial instruments exchange and others specified by Cabinet Order as being similar thereto;

beneficial interests in an investment trust the offering of whose beneficial interests at its establishment was made through a public offering prescribed in Article 8-4, paragraph (1), item (ii) (excluding a specified stock investment trust prescribed in Article 3-2);

investment equity prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations of a specified investment corporation prescribed in Article 8-4, paragraph (1), item (iii);

beneficial interests in a specified trust that issues beneficiary certificates (limited to one the offering of whose beneficial interests acquired by the settlor at the time of the conclusion of its trust contract was made through a public offering prescribed in Article 8-4, paragraph (1), item (iv));

bond-type beneficial interests in a special purpose trust (limited to one the offering of whose bond-type beneficial interests acquired by the original entrustor at the time of the conclusion of its trust contract was made through a public offering prescribed in Article 8-2, paragraph (1), item (ii));

national government bonds and local government bonds;

bonds issued or guaranteed by a foreign state or a local government thereof;

bonds issued under a special Act by a corporation other than a company (excluding those pertaining to a foreign corporation, and investment corporation bonds prescribed in Article 2, paragraph (19) of the Act on Investment Trusts and Investment Corporations, short-term investment corporation bonds prescribed in Article 139-12, paragraph (1) of that Act, specified corporate bonds prescribed in Article 2, paragraph (7) of the Act on the Securitization of Assets and specified short-term corporate bonds prescribed in paragraph (8) of that Article);

public and corporate bonds for which the public offering of securities prescribed in Article 2, paragraph (3) of the Financial Instruments and Exchange Act at the time of their issuance was made through a solicitation of offers to acquire prescribed in that paragraph that is specified by Cabinet Order as falling under the case listed in item (i) of that paragraph;

corporate bonds issued by a corporation that has submitted to the Prime Minister, within nine months (or 12 months, for a foreign corporation) before the date of their issuance, a securities registration statement prescribed in Article 5, paragraph (1) of the Financial Instruments and Exchange Act, an annual securities report prescribed in Article 24, paragraph (1) of that Act or any other document specified by Cabinet Order (referred to as an "annual securities report, etc." in item (xi), (b));

public and corporate bonds issued based on public and corporate bond information (meaning basic information that should be disclosed concerning public and corporate bonds and their issuer, such as the type and total amount of public and corporate bonds to be issued within a certain period and the financial condition and business of the issuer of those public and corporate bonds; hereinafter the same applies in this item) published on a financial instruments exchange (including one similar thereto that has been established under the laws and regulations of a foreign state; hereinafter the same applies in this item) under the rules of the financial instruments exchange, for which the prospectus prepared at the time of their issuance states that the public and corporate bonds are issued based on that public and corporate bond information;

public and corporate bonds issued outside Japan that are listed below:

public and corporate bonds acquired in response to a secondary distribution of securities prescribed in Article 2, paragraph (4) of the Financial Instruments and Exchange Act (limited to one that is a solicitation of offers to sell, etc. prescribed in that paragraph and falls under the case specified by Cabinet Order as falling under the case listed in item (i) of that paragraph) (referred to as "bonds acquired in a secondary distribution" in (b)), custody of which has been continuously entrusted, since the time of the acquisition, to the business office (meaning a business office prescribed in that item; the same applies in (b)) of the financial instruments business operator, etc. (meaning a financial instruments business operator, etc. prescribed in Article 37-11-3, paragraph (3), item (i); the same applies in (b)) that conducted the secondary distribution of securities;

public and corporate bonds acquired in response to a solicitation of offers to sell, etc. prescribed in Article 2, paragraph (4) of the Financial Instruments and Exchange Act (excluding bonds acquired in a secondary distribution) that were issued by a company that has submitted an annual securities report, etc. within nine months (or 12 months, for a foreign corporation) before the date of the acquisition (limited to those custody of which has been continuously entrusted, since the time of the acquisition, to the business office of the financial instruments business operator, etc. that made the solicitation of offers to sell, etc.);

bonds issued or guaranteed by a foreign corporation that are specified by Cabinet Order;

corporate bonds issued by a person engaged in banking business or in type I financial instruments business prescribed in Article 28, paragraph (1) of the Financial Instruments and Exchange Act (excluding a type I small-amount electronic public offering handling business operator prescribed in Article 29-4-2, paragraph (8) of that Act and a special intermediary, etc. for unlisted securities prescribed in Article 29-4-4, paragraph (7) of that Act), or by a corporation engaged in banking business or in financial instruments business prescribed in Article 2, paragraph (8) of that Act in a foreign state in accordance with the laws and regulations of the state (hereinafter referred to as a "bank, etc." in this item), or by any of the persons listed below (excluding those specified by Cabinet Order as bonds whose acquirers are substantially not many in number):

a corporation that has a relationship specified by Cabinet Order as one in which a bank, etc. directly or indirectly holds all of its issued shares or capital contributions (referred to as a "relationship of full control" in (b));

a corporation other than the bank, etc. with which a parent corporation (meaning a corporation that has a relationship specified by Cabinet Order as one of directly or indirectly holding all of the issued shares or capital contributions of a bank, etc.) has a relationship of full control;

public and corporate bonds issued on or before December 31, 2015 (excluding those issued by a company that fell under a family corporation prescribed in Article 2, item (x) of the Corporation Tax Act at the time of their issuance).

The amounts listed in the items of paragraph (3) of the preceding Article that a resident or a nonresident who has a permanent establishment holding listed shares, etc. receives with respect to the listed shares, etc., and the amount specified by Cabinet Order prescribed in that paragraph that such a person receives with respect to the listed shares, etc. due to a cause specified by Cabinet Order prescribed in that paragraph, are deemed to be revenue pertaining to capital gains, etc. on listed shares, etc., and the provisions of the Income Tax Act and this Chapter apply.

The following amounts that a resident or a nonresident who has a permanent establishment holding a beneficial interest in an investment trust or a specified trust that issues beneficiary certificates (hereinafter referred to as an "investment trust, etc." in this paragraph) that falls under listed shares, etc., or a bond-type beneficial interest that falls under listed shares, etc., receives with respect to those beneficial interests are deemed to be revenue pertaining to capital gains, etc. on listed shares, etc., and the provisions of the Income Tax Act and this Chapter apply:

the sum of the amount of money and the value of assets other than money received through the termination of the investment trust, etc. (where the termination pertains to a merger of trusts of the investment trust, etc., limited to one pertaining to a merger of trusts in which assets other than beneficial interests in the trust newly formed by the merger of trusts were delivered to the beneficiaries of the investment trust, etc. (excluding money or other assets delivered to beneficiaries who oppose the merger of trusts as consideration based on their demand for purchase)) or through its partial cancellation;

the sum of the amount of money and the value of assets other than money received through a trust split pertaining to the specified trust that issues beneficiary certificates (limited to one in which the beneficiaries of the split trust were delivered assets other than beneficial interests in the successor trust (excluding money or other assets delivered to beneficiaries who oppose the trust split as consideration based on a demand for acquisition of beneficial interests prescribed in Article 103, paragraph (6) of the Trust Act));

the amount of money received through a refund of the principal of the specified trust that issues beneficiary certificates (excluding one made through the termination or partial cancellation of the trust pertaining to the specified trust that issues beneficiary certificates or through a trust split);

the sum of the amount of money and the value of assets other than money received through the redemption of the principal of a bond-type beneficial interest.

Beyond what is specified in the preceding three paragraphs, necessary matters concerning the application of the provisions of paragraph (1) are specified by Cabinet Order.

The provisions of paragraph (6) of the preceding Article apply mutatis mutandis where the provisions of paragraph (1) apply. In this case, in paragraph (6) of that Article, the phrase "Article 37-10, paragraph (1) (Special Provisions on Taxation of Capital Gains, etc. on General Shares, etc.)" is deemed to be replaced with "Article 37-11, paragraph (1) (Special Provisions on Taxation of Capital Gains, etc. on Listed Shares, etc.)", the phrase "amount of capital gains, etc. on general shares, etc." is deemed to be replaced with "amount of capital gains, etc. on listed shares, etc.", the phrase "amount of capital gains on general shares, etc." is deemed to be replaced with "amount of capital gains on listed shares, etc.", the phrase "no capital gains, etc. on general shares, etc." is deemed to be replaced with "no capital gains, etc. on listed shares, etc.", the phrase "the amount of taxable capital gains, etc. on general shares, etc. prescribed in Article 37-10, paragraph (1)" is deemed to be replaced with "the amount of taxable capital gains, etc. on listed shares, etc. prescribed in Article 37-11, paragraph (1)", and the phrase "under Article 37-10, paragraph (1)" is deemed to be replaced with "under Article 37-11, paragraph (1)".