Act on Special Measures Concerning Taxation

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

transfer, etc. of land held for a short term: These mean, out of the transfer, etc. of land prescribed in paragraph (2), item (i) of the preceding Article, the transfer of land, etc. that the corporation has continuously owned since the date of its acquisition (limited to land, etc. acquired from another person (including, where the corporation is a foreign corporation, the head office, etc. prescribed in Article 138, paragraph (1), item (i) of the Corporation Tax Act)) whose holding period (the holding period is to be the period from the day following the date of its acquisition to January 1 of the year that includes the date of the transfer of that land, etc.) is five years or less (including land, etc. acquired in the year that includes the date of the transfer of that land, etc.), or any other act specified by Cabinet Order as being equivalent thereto;

the amount of capital gain: These mean the amount that remains after deducting, from the amount calculated as specified by Cabinet Order as the amount of proceeds from the transfer, etc. of land held for a short term, the amount calculated as specified by Cabinet Order as the amount of cost price for the proceeds and the amount of expenses directly or indirectly required for the transfer, etc. of land held for a short term.

The provisions of paragraph (1) do not apply to a transfer of land, etc., out of transfers, etc. of land held for a short term, for which it has been certified, as specified by Order of the Ministry of Finance, that it falls under the category of any of the following:

transfer of land, etc. to the State, a local government, or any other corporation equivalent thereto, which is specified by Cabinet Order (excluding that which falls under the category of a transfer listed in item (x));

transfer of land, etc. to an Urban Renaissance Agency, a Land Development Public Corporation, or any other corporation equivalent thereto which is specified by Cabinet Order as a corporation aiming to conduct business for the provision of residential land or housing or advance acquisition of land, for which the transferred land, etc. is deemed to be directly necessary for conducting the business (in the case of a transfer of land, etc. to a corporation specified by Cabinet Order where the area of the transferred land, etc. is 1,000 square meters or more, limited to a transfer that meets the requirement listed in item (iv), (a), and, in the case of a transfer of land, etc. to a Land Development Public Corporation, excluding a transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. as a result of expropriation or replotting, etc. prescribed in Article 65-2, paragraph (1) (excluding rights conversion prescribed in Article 65, paragraph (1), item (vi) and item (vii)) (in the case of a transfer of land, etc. as a result of any of that expropriation or replotting, etc. that is specified by Cabinet Order where the area of the transferred land, etc. is 1,000 square meters or more, limited to a transfer that meets the requirement listed in (a) of the following item, and excluding that which falls under the category of a transfer listed in the preceding two items);

transfer by a corporation that has obtained the permission referred to in Article 29, paragraph (1) of the City Planning Act (limited to a permission pertaining to a development activity prescribed in Article 4, paragraph (12) of that Act carried out within a city planning area prescribed in paragraph (2) of that Article; hereinafter referred to in this paragraph as a "development permit") (including a corporation that has succeeded to the status based on a development permit) of all or part of a unit of residential land (limited to land with an area of 1,000 square meters or more) developed by that corporation, that meets the following requirements (where the transfer falls under a transfer specified by Cabinet Order, the requirements listed in (a) and (b)):

that the amount of consideration for the transfer is the amount specified by Cabinet Order as the appropriate amount of consideration for the transfer or less;

that the development of the residential land pertaining to the transfer conforms to the details of that development permit;

that the transfer has been made by the method of public offering.

transfer by a corporation of all or part of a unit of residential land (limited to land with an area of 1,000 square meters or more) developed by the corporation in a case where a development permit is not required for the development of that residential land, that meets the following requirements (where the transfer falls under a transfer specified by Cabinet Order, the requirements listed in (a) and in (a) of the preceding item):

that the development of the residential land pertaining to the transfer has been carried out with the certification of the prefectural governor, given as specified by Cabinet Order, that it contributes to the provision of good-quality residential land, and that the development conforms to the details of that certification;

that the transfer meets the requirements listed in (a) and (c) of the preceding item.

transfer by a corporation of all or part of a unit of residential land (limited to land with an area of 1,000 square meters or more) used as the site of a house newly built by the corporation on its own account or a house newly built by a method of contracting specified by Cabinet Order (limited to a house whose new construction has been certified by the prefectural governor, as specified by Cabinet Order, as contributing to the provision of good-quality housing), that meets the requirements listed in item (iv), (a) and (c) (excluding that which falls under the category of a transfer listed in the preceding two items);

transfer by that corporation of all or part of any of the following units of residential land (limited to land with an area of less than 1,000 square meters), for which the amount of consideration for the transfer is the amount specified by Cabinet Order as the appropriate amount of consideration for the transfer or less:

a unit of residential land developed by that corporation whose development has been certified by the mayor of the municipality or the head of the special ward (where the development has received a development permit, the person who granted that permit), as specified by Cabinet Order, as contributing to the provision of good-quality residential land;

a unit of residential land used as the site of a house newly built by that corporation on its own account or a house newly built by a method of contracting specified by Cabinet Order (limited to a house whose new construction has been certified by the mayor of the municipality or the head of the special ward, as specified by Cabinet Order, as contributing to the provision of good-quality housing) (excluding land that falls under the residential land listed in (a)).

out of transfers of land, etc. (limited to land, etc. used as the site of a house which is specified by Cabinet Order) made by a corporation that is a real estate broker prescribed in Article 2, item (iii) of the Real Estate Brokerage Act within the period specified by Cabinet Order after the acquisition, those specified by Cabinet Order as being similar to an act of receiving remuneration for acting as an agent or intermediary in the sale of land, etc.;

transfer of land, etc. made by a corporation that is a specified joint real estate venture operator prescribed in Article 2, paragraph (5) of the Act on Specified Joint Real Estate Ventures (Act No. 77 of 1994) (limited to a transfer of land, etc. acquired from a business participant under a real estate specified joint enterprise contract prescribed in paragraph (3) of that Article, which is specified by Cabinet Order);

transfer of land, etc. by gift that constitutes a donation pertaining to the donations prescribed in the items of Article 37, paragraph (3) of the Corporation Tax Act.

With regard to the application of the provisions of Article 67 of the Corporation Tax Act in the case where the provisions of paragraph (1) apply, the phrase "paragraphs (1), (2), and (6) of the preceding Article, and Article 69, paragraph (19) (Foreign Tax Credit) (including as applied mutatis mutandis pursuant to paragraph (23) of that Article; the same applies in paragraph (3))" in paragraph (1) of that Article is deemed to be replaced with "Article 63, paragraph (1) of the Act on Special Measures Concerning Taxation (Special Tax Rate for the Transfer, etc. of Land Held for a Short Term)", the phrase "these" is deemed to be replaced with "that paragraph", and the phrase "paragraphs (1), (2), and (6) of the preceding Article, and Article 69, paragraph (19)" in paragraph (3) of that Article is deemed to be replaced with "Article 63, paragraph (1) of the Act on Special Measures Concerning Taxation".

The provisions of Article 62, paragraph (7) apply mutatis mutandis where the provisions of paragraph (1) apply. In this case, the phrase "the provisions of paragraph (1)" in Article 62, paragraph (7), item (i) is deemed to be replaced with "the provisions of Article 63, paragraph (1)".

Beyond what is provided for in paragraph (2) through the preceding paragraph, matters concerning the method of public offering referred to in paragraph (3), item (iv), (c) and other necessary matters concerning the application of the provisions of paragraph (1) are specified by Cabinet Order.

The provisions of paragraph (1) do not apply to a transfer, etc. of land held for a short term made by a corporation during the period from January 1, 1998 to March 31, 2029.