Act on Special Measures Concerning Taxation

Where a person specified by Cabinet Order as an individual who held unlisted shares or similar interests of a certified gift succession company (limited to those without restrictions on voting rights; the same applies hereinafter in this paragraph) (excluding a person who has already made a gift to which the provisions of this paragraph apply with regard to the unlisted shares or similar interests of that certified gift succession company; referred to as the "donor" hereinafter in this Article and in Articles 70-7-3 and 70-7-4) has made a gift of unlisted shares or similar interests of that certified gift succession company to a successor donee (limited to a gift for which the due date for filing the gift tax return (meaning a return filed by the due date under the provisions of Article 28, paragraph (1) of the Inheritance Tax Act; the same applies hereinafter in this Article) (or, in the case where that due date has been extended under the provisions of Article 69-8, paragraph (3) 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 by the last day of the business succession period for a gift), if that gift is the gift specified in the following items according to the category of cases listed therein, then, with regard to the gift tax equivalent to the gift tax subject to deferral relating to those unlisted shares or similar interests that are stated in the gift tax return as shares or interests for which the successor donee seeks the application of the provisions of this paragraph (limited to the portion specified by Cabinet Order as the portion up to two-thirds of the total number or the total amount of issued shares of or capital contributions to that certified gift succession company (limited to shares, etc. (meaning shares or capital contributions; the same applies hereinafter in this Article) without restrictions on voting rights; the same applies in item (i)) at the time of that gift; referred to as "covered gifted unlisted shares or similar interests" hereinafter in this Article and in Articles 70-7-3 and 70-7-4), out of the amount of gift tax for the year that includes the day of that gift that the successor donee is to pay by filing the gift tax return, a grace period for the payment of that tax is granted until the day of the death of that donor (or, with regard to the gift tax equivalent to the gift tax subject to deferral relating to covered gifted unlisted shares or similar interests in the case where all or part of those covered gifted unlisted shares or similar interests relate to the application to that donor of the provisions of paragraph (15) (limited to the part relating to item (iii), and including as applied mutatis mutandis pursuant to Article 70-7-5, paragraph (11)), the person who made the gift of the unlisted shares or similar interests of the certified gift succession company relating to those covered gifted unlisted shares or similar interests to the person specified by Cabinet Order as a person who had been receiving the application of the provisions of this paragraph or Article 70-7-5, paragraph (1); the same applies in item (vi) of the following paragraph, paragraph (3), item (ii) and paragraph (15)), notwithstanding the provisions of Article 33 of the Inheritance Tax Act, only if security equivalent to that gift tax subject to deferral has been provided, pursuant to the provisions of Cabinet Order, by the due date for filing the gift tax return for that year.

in the case where, immediately before that gift, the number or amount of the unlisted shares or similar interests of that certified gift succession company held by that donor was equal to or more than the remaining number or amount after deducting the number or amount of the unlisted shares or similar interests of that certified gift succession company held by that successor donee from two-thirds of the total number or the total amount of issued shares of or capital contributions to that certified gift succession company: a gift of unlisted shares or similar interests whose number or amount is equal to or more than that remaining number or amount;

in any case other than the case listed in the preceding item: a gift of all of the unlisted shares or similar interests of that certified gift succession company held by that donor immediately before that gift.

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

certified gift succession company: a company that has received the management succession certification, out of the small and medium-sized enterprises prescribed in Article 2 of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises (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 entity specified by Order of the Ministry of Finance as equivalent to that company), which satisfies all of the following requirements at the time of the gift to which the provisions of the preceding paragraph apply:

the number of regular employees of that company (meaning employees specified by Order of the Ministry of Finance as employees regularly employed; the same applies in (e), item (ii) of the following paragraph and paragraph (30)) 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. 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 that has a close relationship with that specified company (referred to as a "specified specially related company" in (d) and in item (xvi) of the following paragraph), out of its 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;

neither that company nor a specified specially related company falls under a sex-related business company (meaning a company that operates a business falling under a sex-related special business prescribed in Article 2, paragraph (5) of the Act on Control and Improvement of Amusement Business; the same applies in item (xvi) of the following paragraph);

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 with which that company has a relationship specified by Cabinet Order as a relationship in which a company directly or indirectly holds shares, etc. whose number or amount exceeds 50 percent of the total number or the total amount of issued shares of or capital contributions to another corporation (excluding its own shares, etc. held by that other corporation) (referred to as a "controlling relationship" in item (v), (a), the following Article and Article 70-7-4, paragraph (2)), 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 securing the smooth operation of the business of a company;

unlisted share or similar interest: any of the following shares, etc.:

shares that satisfy the requirement that none of the shares of the company relating to those shares are listed on a financial instruments exchange prescribed in Article 2, paragraph (16) of the Financial Instruments and Exchange Act and other requirements specified by Order of the Ministry of Finance;

capital contributions to a general partnership company, a limited partnership company or a limited liability company that satisfy the requirements specified by Order of the Ministry of Finance;

successor donee: an individual who has acquired unlisted shares or similar interests of a certified gift succession company from the donor through the gift 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 or more such individuals, limited to the one individual determined by that certified gift succession company):

the individual is 18 years of age or older on the day of that gift;

the individual holds, at the time of that gift, the authority of representation (excluding authority of representation that has been restricted; the same applies hereinafter in this Article, the following Article and Article 70-7-4) of that certified gift succession company;

at the time of that gift, the total number of voting rights relating to the unlisted shares or similar interests of that certified gift succession company held by the individual and by persons who have a special relationship specified by Cabinet Order with the individual is a number exceeding 50 percent of the total number of voting rights of all shareholders, etc. (meaning the number of voting rights of all shareholders (excluding shareholders who may not exercise voting rights with respect to any of the matters on which a resolution may be adopted at a shareholders' meeting) or of all members; the same applies in the following paragraph, the following Article and Article 70-7-4) relating to that certified gift succession company;

at the time of that gift, the number of voting rights relating to the unlisted shares or similar interests of that certified gift succession company held by the individual is not less than the number of voting rights relating to the unlisted shares or similar interests of that certified gift succession company held by any of the persons who have the special relationship specified by Cabinet Order prescribed in (c) with the individual;

the individual has continuously held all of the covered gifted unlisted shares or similar interests of that certified gift succession company acquired through that gift from the time of that gift until the due date for filing the gift tax return for the year that includes the day of that gift (or, in the case where the individual has died before that due date, the day of that death);

the individual has continuously held, for three years or more until the day of that gift, the position of officer of that certified gift succession company or any other position specified by Order of the Ministry of Finance;

the individual has not received the application of the provisions of Article 70-7-5, paragraph (1), Article 70-7-6, paragraph (1) or Article 70-7-8, paragraph (1) with regard to the unlisted shares or similar interests of that certified gift succession company;

management succession certification: the certification referred to in Article 12, paragraph (1) of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises (limited to a certification specified by Order of the Ministry of Finance as relating to item (i) of that paragraph) by the Minister of Economy, Trade and Industry (or, in the case where the certification is to be made by a prefectural governor pursuant to the provisions of a Cabinet Order based on the provisions of Article 17 of that Act, that prefectural governor);

gift tax subject to deferral: the amount specified in (a) or (b) according to the category of cases listed in (a) or (b):

in cases other than the case listed in (b): the amount calculated by applying the provisions of Articles 21-5 and 21-7 of the Inheritance Tax Act (including the provisions of Articles 70-2-4 and 70-2-5), deeming the value of the covered gifted unlisted shares or similar interests to which the provisions of the preceding paragraph apply (or, in the case where the certified gift succession company relating to those covered gifted unlisted shares or similar interests, or a corporation that is a specially related company of that certified gift succession company and has a controlling relationship with that certified gift succession company (referred to as a "certified gift succession company, etc." in (a)), holds shares, etc. (including investment equity prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations; the same applies in (a)) of a foreign company prescribed in Article 2, item (ii) of the Companies Act (limited to one that falls under a specially related company of that certified gift succession company) or of any other corporation specified by Cabinet Order, the value calculated on the assumption that the certified gift succession company, etc. did not hold those shares, etc.; the same applies in (b)) to be the taxable value of gift tax for that year relating to the successor donee referred to in the preceding paragraph;

in the case where the covered gifted unlisted shares or similar interests to which the provisions of the preceding paragraph apply are subject to the provisions of Article 21-9, paragraph (3) of the Inheritance Tax Act (including as applied mutatis mutandis pursuant to Article 70-2-6, paragraph (1), Article 70-2-7, paragraph (1) (including as applied mutatis mutandis pursuant to Article 70-2-8) or Article 70-3, paragraph (1)): the amount calculated by applying the provisions of Articles 21-11-2 through 21-13 of that Act (including the provisions of Article 70-3-2), deeming the value of those covered gifted unlisted shares or similar interests to be the taxable value of gift tax for that year relating to the successor donee referred to in the preceding paragraph;

business succession period for a gift: the period from the day following the due date for filing the gift tax return for the year that includes the day of the gift to which the provisions of the preceding paragraph apply until the earlier of the following days, or the day preceding the day of the death of the successor donee to whom the provisions of that paragraph apply or of the donor relating to that successor donee, whichever is earlier:

the day on which five years have elapsed on or after the day following the due date for filing the gift tax return for the year that includes the day of the first gift to which the provisions of the preceding paragraph apply received by that successor donee;

the day on which five years have elapsed on or after the day following the due date for filing the inheritance tax return prescribed in paragraph (1) of the following Article relating to the first inheritance to which the provisions of that paragraph apply of that successor donee;

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

the business succession period for a gift: each day on which a period of one year elapses from the day following the due date for filing the gift tax return for the year that includes the day of the gift 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 successor donee has received the application of the provisions of paragraph (1) of the following Article with regard to unlisted shares or similar interests of the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in the preceding paragraph, the due date for filing the inheritance tax return prescribed in paragraph (1) of the following Article) (referred to as a "type 1 gift base date" in paragraph (9));

the period from the day following the last day of the business succession period for a gift until the day on which the deadline of the tax payment grace period under the provisions of the preceding paragraph, the following paragraph through paragraph (5), paragraph (11), paragraph (12) or paragraph (14) is fixed for all of the gift tax equivalent to the gift tax subject to deferral (excluding, in the case where the provisions of paragraph (4) or paragraph (5) 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 covered gifted unlisted shares or similar interests to which those provisions have been applied; referred to as the "amount of gift tax under a grace period" hereinafter in this Article and in Article 70-7-3, paragraph (1)): each day on which a period of three years elapses from the day following that last day (referred to as a "type 2 gift base date" in paragraph (9));

asset-holding company: a company for which, on any day within the period specified by Cabinet Order as the period for verifying the state of assets of the certified gift succession company, the ratio of the sum of the amounts listed in (b) and (c) to the sum of the amounts listed in (a) and (c) is 70 percent or more:

the total book value of the total assets of the company recorded in its balance sheet as of that day;

the total book value of the specified assets of the company (meaning cash, deposits or savings and other assets specified by Order of the Ministry of Finance; the same applies in the following item) recorded in its balance sheet as of that day;

the total of the amount of dividends of surplus, etc. (meaning a dividend of surplus or a distribution of profit relating to the shares, etc. of a company; the same applies hereinafter in this Article and in the following Article) received from the company within five years on or before that day by the successor donee and persons who have a special relationship specified by Cabinet Order with the successor donee, and other amounts specified by Cabinet Order as amounts received from the company.

asset-management company: a company for which the ratio of the total investment income from specified assets to the gross revenue in any business year within the period specified by Cabinet Order as the period for confirming the status of investment of the assets of the certified gift succession company is 75 percent or more.

In the case where, within the business succession period for a gift, the successor donee to whom the provisions of paragraph (1) apply, or the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in that paragraph (or, in the case where the certified gift succession company relating to those covered gifted 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 covered gifted unlisted shares or similar interests; the same applies hereinafter in this Article), 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 (or, in the case where the successor donee dies during the period from the day specified in that item 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 the successor donee (including a universal legatee; the same applies hereinafter in this Article) came to know of the commencement of the succession due to the death of the successor donee):

in the case where the successor donee has ceased to have the authority of representation of the certified gift succession company relating to the covered gifted unlisted shares or similar interests held by the successor donee (excluding the case where there is an unavoidable reason specified by Order of the Ministry of Finance for having ceased to have that authority of representation): the day on which the successor donee ceased to have it;

in the case where the number calculated by dividing the total number of regular employees of the certified gift succession company relating to the covered gifted unlisted shares or similar interests as of each base date (meaning each day on which one year elapses from the day following that filing deadline; the same applies hereinafter in this item and in item (ii), (a) of that paragraph) falling within the employee number confirmation period (meaning the period from the day following the filing deadline of the first gift tax return, or of the inheritance tax return prescribed in paragraph (1) of the following Article, that is filed in order to receive the application of the provisions of paragraph (1) of this Article or paragraph (1) of the following Article with regard to the unlisted shares or similar interests of the certified gift succession company relating to the covered gifted unlisted shares or similar interests, until the day on which five years have elapsed on or after that day (or, in the case where the successor donee or the donor relating to the successor donee has died by that day, the day preceding the day of that death); the same applies hereinafter in this item and in paragraph (30), item (ii), (a)) by the number of base dates falling within the employee number confirmation period, as of the last day of the employee number confirmation period, has fallen below the number specified by Cabinet Order as the number at which the employment of those regular employees is deemed to be secured (excluding the case where the donor relating to the successor donee has died by the day listed in item (vi), (a) or (b) of the preceding paragraph, whichever is earlier, and the successor donee receives the application of the provisions of Article 70-7-4, paragraph (1) with regard to the covered gifted unlisted shares or similar interests): the last day of the employee number confirmation period;

in the case where the total number of voting rights held by the successor donee and persons who have a special relationship specified by Cabinet Order with the successor donee (limited to voting rights relating to the unlisted shares or similar interests of the certified gift succession company relating to the covered gifted unlisted shares or similar interests) has become 50 percent or less of the total number of voting rights of all shareholders, etc. of the certified gift succession company (excluding the case where, in the case where the successor donee has ceased to have the authority of representation of the certified gift succession company relating to the covered gifted unlisted shares or similar interests held by the successor donee (limited to the case where there is an unavoidable reason specified by Order of the Ministry of Finance prescribed in item (i); the same applies in the left-hand column of item (i) of the table in the following paragraph and in paragraph (15), item (iii)), the successor donee has made a gift to which the provisions of paragraph (1) or Article 70-7-5, paragraph (1) apply (including a gift of the eligible unlisted shares, etc. made together with that gift; the same applies in item (i) of that table) of the covered gifted unlisted shares or similar interests (including covered gifted unlisted shares or similar interests relating to the certified gift succession company other than those covered gifted unlisted shares or similar interests, and covered unlisted shares or similar interests prescribed in paragraph (1) of the following Article or covered inherited unlisted shares or similar interests prescribed in Article 70-7-4, paragraph (1) relating to the certified gift succession company; referred to as "eligible unlisted shares, etc." in this item and in items (v) and (vi)); the same applies in the following item and in item (v)): the day on which it became 50 percent or less;

in the case where any of the persons who have a special relationship specified by Cabinet Order prescribed in the preceding item with the successor donee has come to hold voting rights relating to the unlisted shares or similar interests of the certified gift succession company relating to the covered gifted unlisted shares or similar interests held by the successor donee in a number exceeding the number of voting rights relating to those unlisted shares or similar interests held by the successor donee: the day on which that person came to hold them;

in the case where the successor donee has made a transfer or gift (referred to as a "transfer, etc." hereinafter in this Article) of part of the eligible unlisted shares, etc.: the day on which that transfer, etc. was made;

in the case where the successor donee has made a transfer, etc. of all of the eligible unlisted shares, etc. (excluding the case where the certified gift succession company relating to the eligible unlisted shares, etc. 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 hereinafter in this Article) of another company through a share exchange or share transfer (referred to as a "share exchange, etc." hereinafter in this Article)): the day on which that transfer, etc. was made;

in the case listed in the left-hand column of item (v) or in the left-hand column of item (vi) of the table in paragraph (5): the day listed in the right-hand column of item (v) or in the right-hand column of item (vi) of that table, respectively;

in the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests has dissolved (excluding the case where it is extinguished through a merger) or has been deemed to have dissolved pursuant to the provisions of the Companies Act or any other Act: the day of that dissolution or the day of that deemed dissolution;

in the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests has come to fall under the category of an asset-holding company or asset-management company specified by Cabinet Order: the day on which it came to fall under that category;

in the case where the gross revenue (limited to the revenue specified by Order of the Ministry of Finance as what is to be treated as the amount of revenue arising from its principal business activities) of the certified gift succession company relating to the covered gifted unlisted shares or similar interests in a business year has become zero: the end of that business year;

in the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests has reduced the amount of its stated capital pursuant to the provisions of Article 447, paragraph (1) or Article 626, paragraph (1) of the Companies Act, or has reduced the amount of its reserves pursuant to the provisions of Article 448, paragraph (1) of that Act (excluding the case falling under Article 309, paragraph (2), item (ix), (a) and (b) of that Act and any other case specified by Order of the Ministry of Finance as being similar thereto): the day on which that reduction of the amount of stated capital or that reduction of the amount of reserves became effective;

in the case where the successor donee has submitted to the district director with jurisdiction over the place for tax payment a written notification stating that the successor donee 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 certified gift succession company relating to the covered gifted unlisted shares or similar interests has been extinguished through a merger (excluding the case specified by Order of the Ministry of Finance as a case where an entity equivalent to the certified gift succession company exists as a result of that merger (referred to as the "case where it has carried out a qualified merger" in the left-hand column of item (ii) of the table in the following paragraph)): the day on which that merger became effective;

in the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests has become a wholly owned subsidiary company resulting from a share exchange or share transfer of another company through a share exchange, etc. (excluding the case specified by Order of the Ministry of Finance as a case where an entity equivalent to the certified gift succession company exists as a result of that share exchange, etc. (referred to as the "case where it has carried out a qualified share exchange, etc." in the left-hand column of item (ii) of the table in the following paragraph)): the day on which that share exchange, etc. became effective;

in the case where the shares, etc. of the certified gift succession company relating to the covered gifted unlisted shares or similar interests have ceased to fall under the category of unlisted shares or similar interests: the day on which they ceased to fall under that category;

in the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests or a specified specially related company of the certified gift succession company has come to fall under the category of a sex-related business company: the day on which it came to fall under that category;

beyond the cases listed in the preceding items, in the case specified by Cabinet Order as a case where there is a risk of hindering the smooth operation of the business of the certified gift succession company relating to the covered gifted unlisted shares or similar interests by the successor donee: the day specified by Cabinet Order.

In the case where a successor donee seeking the application of the provisions of paragraph (1) has provided all of the covered gifted unlisted shares or similar interests as security for the gift tax subject to deferral, even if the total value of those covered gifted unlisted shares or similar interests is less than the gift tax subject to deferral, security equivalent to the gift tax subject to deferral is deemed to have been provided with regard to the application of the provisions of that paragraph; provided, however, that this does not apply in the case where the successor donee subsequently comes to fall under the case where there has been a change in all or part of the security so provided or any other case specified by Cabinet Order.

The provisions of paragraph (1) do not apply to unlisted shares or similar interests acquired by gift from the donor in the case where, with regard to the shares, etc. of the company relating to those unlisted shares or similar interests, there is another successor donee who is receiving the application of the provisions of that paragraph, a successor heir, etc. prescribed in paragraph (2), item (iii) of the following Article who is receiving the application of the provisions of paragraph (1) of that Article, or a successor donee for inheritance prescribed in Article 70-7-4, paragraph (2), item (iii) who is receiving the application of the provisions of paragraph (1) of that Article (excluding the case where the person seeking the application of the provisions of paragraph (1) is that successor heir, etc. or that successor donee for inheritance, or is a person who has acquired the shares, etc. of that company through a gift to which the provisions of paragraph (15) (limited to the part relating to item (iii)) or paragraph (16) of the following Article (limited to the part relating to item (ii)) apply).

The provisions of paragraph (1) do not apply in the case where the gift tax return relating to the unlisted shares or similar interests that the successor donee seeking the application of the provisions of that paragraph acquired by gift from the donor does not state that the successor donee 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 gift 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 gift tax return for the year that includes the day of the gift to which the provisions of paragraph (1) apply until the day on which the deadline of the tax payment grace period under the provisions of that paragraph, paragraphs (3) through (5), paragraph (11), paragraph (12) or paragraph (14) is fixed for all of the gift tax equivalent to the amount of gift tax under a grace period, there is a base date for management reports for a gift, the successor donee 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 a type 1 gift base date and the day on which three months have elapsed from the day following a type 2 gift base date; the same applies in the following paragraph, paragraph (11) and paragraph (26)), 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 successor donee wishes to continue to receive the application of the provisions of paragraph (1) and matters concerning the management of the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in that paragraph.

With regard to the prescription of the national government's right to collect the gift tax equivalent to the amount of gift tax under a grace period and the interest tax and delinquent tax relating to that gift 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 (13), item (v) 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 (9) 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 gift tax equivalent to the amount of gift 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 (or, in the case where the successor donee relating to that gift tax dies during the period from the day following that notification deadline 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 the successor donee came to know of the commencement of the succession due to the death of the successor donee).

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 gift tax equivalent to the amount of gift 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 successor donee 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 (9) submitted by the successor donee.

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

in the case where a successor donee seeking the application of the provisions of paragraph (1) provides all of the covered gifted unlisted shares or similar interests as security pursuant to the provisions of the main clause of paragraph (6), the phrase "securities that the district director of the tax office, etc. (or, in the case where the Commissioner of the National Tax Agency or the regional commissioner is to collect security pursuant to the provisions of an Act concerning national taxes, the Commissioner of the National Tax Agency or the regional commissioner; the same applies hereinafter in this Article and the following Article) finds to be reliable" in Article 50, item (ii) of the Act on General Rules for National Taxes is deemed to be replaced with "securities and equity interests in a membership company (limited to those that satisfy the requirements specified by Order of the Ministry of Finance, such as not being the subject of a pledge or any other security interest)", and the provisions of Article 51, paragraph (1) of that Act do not apply;

in the case referred to in the preceding item, when the provisions of the proviso to paragraph (6) apply, the provisions of that item do not apply;

with regard to the application of the provisions of Articles 56 through 58 of the Act on General Rules for National Taxes to gift tax equivalent to the amount that has become an overpayment or erroneous payment as a result of the notice under the provisions of paragraph (17), 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 application deadline prescribed in paragraph (16), whichever is earlier;

with regard to gift 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 70-7, paragraph (1) (Tax Payment Grace Period and Exemption for Gift Tax on Unlisted Shares or Similar Interests) 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 paragraphs (3) through (5), the preceding two paragraphs or the following paragraph) 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;

with regard to gift tax for which a tax payment grace period has been granted under the provisions of paragraph (1), the phrase "finds so, the district director of the tax office, etc." in Article 52, paragraph (4) of the Act on General Rules for National Taxes is deemed to be replaced with "finds so (or, in the case where shares of or capital contributions to the certified gift succession company referred to in Article 70-7, paragraph (1) (Tax Payment Grace Period and Exemption for Gift Tax on Unlisted Shares or Similar Interests) of the Act on Special Measures Concerning Taxation relating to the covered gifted unlisted shares or similar interests prescribed in that paragraph have been provided as security for the tax payment grace period under the provisions of that paragraph, when it so finds, or when there is no buyer even if those shares or capital contributions are put up for realization), the district director of the tax office, etc."; the phrase "one year or more before" in Article 35, paragraph (1) of the National Tax Collection Act is deemed to be replaced with "one year or more before (or, in the case where the national tax pertaining to that delinquency is gift tax, before the gift relating to that gift tax)"; and the phrase "property" in Article 48, paragraph (1) of that Act is deemed to be replaced with "property (excluding, in the case where shares of or capital contributions to the certified gift succession company referred to in Article 70-7, paragraph (1) (Tax Payment Grace Period and Exemption for Gift Tax on Unlisted Shares or Similar Interests) of the Act on Special Measures Concerning Taxation relating to the covered gifted unlisted shares or similar interests prescribed in that paragraph have been provided as security for the tax payment grace period under the provisions of that paragraph, other property of the successor donee prescribed in paragraph (2), item (iii) of that Article who provided that security, when there is no buyer even if those shares or capital contributions are put up for realization)";

in the case where the written application referred to in paragraph (16) has been submitted, the gift tax equivalent to the amount of gift tax applied for exemption prescribed in that paragraph 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 (17) is issued;

in the case where the successor donee to whom the provisions of paragraph (1) apply has received an exemption from all or part of the amount of gift tax under a grace period under the provisions of paragraph (15), paragraph (16) or paragraph (21), if the succession of the donor of the covered gifted unlisted shares or similar interests to which the provisions of paragraph (1) apply (limited to those to which the provisions of Article 21-9, paragraph (3) of the Inheritance Tax Act (including as applied mutatis mutandis pursuant to Article 70-2-6, paragraph (1), Article 70-2-7, paragraph (1) (including as applied mutatis mutandis pursuant to Article 70-2-8) or Article 70-3, paragraph (1); the same applies in the following item) apply) has commenced, the provisions of Articles 21-14 through 21-16 of that Act do not apply to the part of those covered gifted unlisted shares or similar interests corresponding to the amount of gift tax under a grace period from which that exemption was received;

in the case where the gift to which the provisions of paragraph (1) apply received by the successor donee to whom the provisions of that paragraph apply is a gift to which the provisions of paragraph (15) (limited to the part relating to item (iii), and including as applied mutatis mutandis pursuant to Article 70-7-5, paragraph (11)) apply (limited to a gift relating to covered gifted unlisted shares or similar interests to which the provisions of Article 21-9, paragraph (3) of the Inheritance Tax Act apply; referred to as a "second gift" hereinafter in this item), and those covered gifted unlisted shares or similar interests are those that the second donor (meaning the person who made that second gift; the same applies hereinafter in this item) acquired by gift from the first donor (meaning the person who made the gift of those covered gifted unlisted shares or similar interests to the second donor before the second gift), the provisions of Articles 21-14 through 21-16 of that Act do not apply to those covered gifted unlisted shares or similar interests acquired by the successor donee through that second gift, as at the time when that second donor dies;

the provisions of Article 38, paragraph (3) of the Inheritance Tax Act do not apply to gift tax that falls under the provisions of paragraph (3) (excluding the part relating to item (ii) of that paragraph), paragraph (4), paragraph (5), the preceding two paragraphs or the following paragraph;

with regard to gift tax equivalent to the gift tax subject to deferral that falls under the provisions of paragraph (3) (limited to the part relating to item (ii) of that paragraph), the due date for payment of gift tax for which deferred payment under paragraph (1) of Article 39 of the Inheritance Tax Act as applied mutatis mutandis pursuant to paragraph (29) of that Article is sought is the day on which five months have elapsed from the last day of the business succession period for a gift (referred to as the "deadline for applying for deferred payment" in this item). In this case, for the period from the day following the deadline of the tax payment grace period under the provisions of paragraph (1) (limited to that relating to paragraph (3), item (ii)) until the deadline for applying for deferred payment, interest tax is to be paid in lieu of the part of the delinquent tax corresponding to that period (limited to the part relating to the portion of the amount of gift tax under a grace period for which permission for deferred payment has been granted), and the amount of interest tax to be paid is the amount calculated by multiplying the portion for which that permission has been granted, as the base, by a rate of 6.6 percent per annum for that period.

The provisions of Article 64, paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (2) of that Article) and paragraph (4) of the Inheritance Tax Act apply mutatis mutandis to the case where it is found that the burden of inheritance tax or gift tax of the successor donee to whom the provisions of paragraph (1) apply, the donor relating to that successor donee, or persons who have a special relationship specified by Cabinet Order with them would be unjustly reduced as a result. In this case, in paragraph (1) of that Article, the phrase "family company, etc." is deemed to be replaced with "certified gift succession company prescribed in Article 70-7, paragraph (2), item (i) (Tax Payment Grace Period and Exemption for Gift Tax on Unlisted Shares or Similar Interests) of the Act on Special Measures Concerning Taxation", the phrase "its shareholders or members, or their relatives" is deemed to be replaced with "the successor donee referred to in paragraph (1) of that Article or the donor referred to in that paragraph", the phrase "upon making a correction or determination with regard to inheritance tax or gift tax" is deemed to be replaced with "with regard to the application of the provisions of that Article", and the phrase "calculate the taxable value" is deemed to be replaced with "accelerate the deadline of the tax payment grace period, or determine the gift tax under the tax payment grace period to be exempted"; in paragraph (2) of that Article, the phrase ", family company, etc." is deemed to be replaced with ", certified gift succession company prescribed in Article 70-7, paragraph (2), item (i) of the Act on Special Measures Concerning Taxation", and the phrase "correction or determination with regard to the inheritance tax or gift tax of the shareholders or members of the family company, etc. or their relatives, or other persons who have the special relationship prescribed in the preceding paragraph with them" is deemed to be replaced with "acceleration of the deadline of the tax payment grace period of the successor donee referred to in Article 70-7, paragraph (1) of the Act on Special Measures Concerning Taxation of the certified gift succession company, or exemption from gift tax"; and in paragraph (4) of that Article, the phrase "upon making a correction or determination with regard to inheritance tax or gift tax" is deemed to be replaced with "with regard to the application of the provisions of Article 70-7 of the Act on Special Measures Concerning Taxation", and the phrase "calculate the taxable value" is deemed to be replaced with "accelerate the deadline of the tax payment grace period, or determine the gift tax under the tax payment grace period to be exempted".

In the case where the successor donee to whom the provisions of paragraph (1) apply or the donor relating to that successor donee has come to fall under any of the cases listed in the following items (excluding the case where the provisions of paragraph (11) were applied before the day on which they came to fall under that case, the case where the deadline of the tax payment grace period was accelerated under the provisions of paragraph (12) or the preceding paragraph before that day, and the case where they came to fall under any of the cases listed in the items of paragraph (3) within the business succession period for a gift), the gift tax specified in each of those items is exempted. In this case, the successor donee or the heir of the successor donee must, by the day on which six months (or, in the case where they have come to fall under the case listed in item (ii), 10 months) have elapsed from the day on which they came to fall under that case (or, in the case where they have come to fall under the case listed in item (iii), from the day on which the person who received the gift of the covered gifted unlisted shares or similar interests referred to in that item filed the gift tax return to which the provisions of paragraph (1) apply with regard to those covered gifted unlisted shares or similar interests) (referred to as the "deadline for notification of exemption" in paragraph (26)), 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 successor donee has died at or before the time of the death of the donor: the gift tax equivalent to the amount of gift tax under a grace period;

in the case where the donor has died: the gift tax equivalent to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part, out of the amount of gift tax under a grace period, that corresponds to the covered gifted unlisted shares or similar interests of which the donor made the gift;

in the case where, on or after the day following the last day of the business succession period for a gift (or, in the case where the successor donee has ceased to have the authority of representation of the certified gift succession company relating to the covered gifted unlisted shares or similar interests held by the successor donee within the business succession period for a gift, the day on which the successor donee ceased to have it), the successor donee has made a gift to which the provisions of paragraph (1) or Article 70-7-5, paragraph (1) apply of covered gifted unlisted shares or similar interests: the gift tax equivalent to the amount calculated pursuant to the provisions of Cabinet Order as the amount of the part, out of the amount of gift tax under a grace period, that corresponds to the covered gifted unlisted shares or similar interests relating to that gift to which those provisions apply.

In the case where the successor donee to whom the provisions of paragraph (1) apply, or the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in that paragraph, has come to fall under any of the cases listed in the following items (excluding the case where the provisions of paragraph (11) were applied before the day on which it came to fall under that case and the case where the deadline of the tax payment grace period was accelerated under the provisions of paragraph (12) or paragraph (14) before that day), if the successor donee seeks an exemption from the gift tax specified in the relevant item, the successor donee 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 the successor donee dies 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 the successor donee came to know of the commencement of the succession due to the death of the successor donee; referred to as the "application deadline" in the following paragraph), submit to the district director with jurisdiction over the place for tax payment a written application stating that the successor donee wishes to receive that exemption, the amount equivalent to the gift tax for which the successor donee seeks that exemption (referred to as the "amount of gift tax applied for exemption" in paragraph (18)), 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, on or after the day following the last day of the business succession period for a gift, the successor donee has made a transfer, etc. of all of the unlisted shares or similar interests of the certified gift succession company relating to the covered gifted unlisted shares or similar interests (limited to the case where it is made to a person specified by Cabinet Order as a single person among persons other than those who have a special relationship specified by Cabinet Order with the successor donee, or the case where, when a confirmation order for a rehabilitation plan under the provisions of the Civil Rehabilitation Act or for a reorganization plan under the provisions of the Corporate Reorganization Act (Act No. 154 of 2002) has been issued (including the case where a fact specified by Cabinet Order as equivalent to a confirmation order for a rehabilitation plan has occurred; the same applies in paragraph (32), item (i), (b)), it is made in order to cancel those unlisted shares or similar interests based on that rehabilitation plan or that reorganization plan (including a plan specified by Cabinet Order as a plan for the disposition of debts (referred to as a "debt workout plan" in paragraph (21) and paragraph (23)); the same applies in (b) of that item), and excluding the case falling under the case listed in item (iv)), if the sum of the following amounts is less than the amount of gift tax under a grace period immediately before that transfer, etc.: the gift tax equivalent to the remaining amount after deducting that sum from that amount of gift tax under a grace period;

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 the covered gifted unlisted shares or similar interests for which that transfer, etc. was made (or, in the case where the amount specified by that Order of the Ministry of Finance is lower than the amount of consideration for the transfer, etc. of the covered gifted unlisted shares or similar interests for which that transfer, etc. was made, that amount of consideration for the transfer, etc.);

the total of the amount of dividends of surplus, etc. received from the certified gift succession company within five years on or before the day on which that transfer, etc. took place by the successor donee and persons who share the same livelihood with the successor donee, and other amounts specified by Cabinet Order as amounts received from the certified gift succession company;

in the case where, on or after the day following the last day of the business succession period for a gift, an order commencing bankruptcy proceedings or an order to commence special liquidation has been issued with regard to the certified gift succession company relating to the covered gifted unlisted shares or similar interests: the gift tax equivalent to the remaining amount after deducting the amount listed in (b) from the amount listed in (a);

the amount of gift tax under a grace period immediately before the dissolution of the certified gift succession company (including the dissolution in the case where it is deemed to have dissolved pursuant to the provisions of the Companies Act or any other Act; the same applies in (b) and in the right-hand column of item (vii) of the table in paragraph (27));

the total of the amount of dividends of surplus, etc. received from the certified gift succession company within five years before the dissolution of the certified gift succession company by the successor donee and persons who share the same livelihood with the successor donee, and other amounts specified by Cabinet Order as amounts received from the certified gift succession company;

in the case where, on or after the day following the last day of the business succession period for a gift, the certified gift succession company relating to the covered gifted unlisted shares or similar interests has been extinguished through a merger (limited to the case where the surviving company in an absorption-type merger, etc. is an entity other than a person who has a special relationship specified by Cabinet Order with the successor donee and no shares, etc. of the surviving company in an absorption-type merger, etc. are delivered upon that merger), if the sum of the following amounts is less than the amount of gift tax under a grace period immediately before that merger becomes effective: the gift tax equivalent to the remaining amount after deducting that sum from that amount of gift tax under a grace period;

the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of the covered gifted unlisted shares or similar interests immediately before that merger becomes effective (or, in the case where the amount specified by that Order of the Ministry of Finance is lower than the amount of the consideration for the merger (meaning the property that the surviving company in an absorption-type merger, etc. delivers upon that merger to the shareholders or members of the certified gift succession company being extinguished), the amount of that consideration for the merger);

the total of the amount of dividends of surplus, etc. received from the certified gift succession company within five years on or before the day on which that merger becomes effective by the successor donee and persons who share the same livelihood with the successor donee, and other amounts specified by Cabinet Order as amounts received from the certified gift succession company;

in the case where, on or after the day following the last day of the business succession period for a gift, the certified gift succession company relating to the covered gifted unlisted shares or similar interests has become a wholly owned subsidiary company resulting from a share exchange or share transfer of another company through a share exchange, etc. (limited to the case where the other company is an entity other than a person who has a special relationship specified by Cabinet Order with the successor donee and no shares, etc. of the other company are delivered upon that share exchange, etc.), if the sum of the following amounts is less than the amount of gift tax under a grace period immediately before that share exchange, etc. becomes effective: the gift tax equivalent to the remaining amount after deducting that sum from that amount of gift tax under a grace period.

the amount specified by Order of the Ministry of Finance as the amount equivalent to the market value of the covered gifted unlisted shares or similar interests immediately before that share exchange, etc. becomes effective (or, in the case where the amount specified by that Order of the Ministry of Finance is lower than the amount of the consideration for the share exchange, etc. (meaning the property that the other company delivers upon that share exchange, etc. to the shareholders of the certified gift succession company that has become the wholly owned subsidiary company resulting from a share exchange or share transfer), the amount of that consideration for the share exchange, etc.);

the total of the amount of dividends of surplus, etc. received from the certified gift succession company within five years on or before the day on which that share exchange, etc. becomes effective by the successor donee and persons who share the same livelihood with the successor donee, and other amounts specified by Cabinet Order as amounts received from the certified gift succession company.

In the case where a written application under the provisions of 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 gift tax specified in the relevant item of that paragraph according to the category of the cases listed in those items relating to that written application, or dismisses the application relating to that written application. In this case, the district director is to notify the successor donee who submitted that written application of the amount of the gift 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 relating to that written application.

If the district director, in the case where the written application referred to in paragraph (16) has been submitted, finds that there are reasonable grounds, the district director may grant a grace period for the collection of the gift tax equivalent to the amount of gift 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 items (vi) through (viii) of the table in paragraph (27), according to the category of the cases listed in the left-hand column of items (vi) through (viii) of that table (or, in the case where the successor donee to whom the provisions of paragraph (1) have applied has died within two months on or before that day, the day on which six months have elapsed from the day following the day on which the heir of the successor donee came to know of the commencement of the succession due to the death of the successor donee)) 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 successor donee receives the application of the provisions of paragraph (16), item (i), (iii) or (iv), if the district director finds that there is an unavoidable reason for the successor donee'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 gift tax that has become payable as a result of coming to fall under the case listed in the left-hand column of item (vi) or in the left-hand column of item (viii) of the table in paragraph (27) 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 (17) was issued.

Beyond what is provided for in the preceding two paragraphs, necessary matters concerning the application of the provisions of paragraphs (16) and (17) are specified by Cabinet Order.

In the case where, on or after the day following the last day of the business succession period for a gift, a confirmation order for a rehabilitation plan under the provisions of the Civil Rehabilitation Act or for a reorganization plan under the provisions of the Corporate Reorganization Act has been issued with regard to the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in paragraph (1) (limited to one that satisfies the requirements specified by Cabinet Order, such as being 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) (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 certified gift succession company (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 (23)), the successor donee relating to the certified gift succession company has come to fall under the case listed in the left-hand column of any item of the table in paragraph (5) before the day on which the notice under the provisions of paragraph (24) is issued (referred to as the "notice date" hereinafter in this paragraph), the case where the provisions of paragraph (11) have been applied, and the case where the deadline of the tax payment grace period has been accelerated under the provisions of paragraph (12) or paragraph (14) before that notice date, and limited, for a certified gift succession company that is performing a rehabilitation plan, to the case where a supervisor or trustee has been appointed), the recalculated deferred gift tax is to be the amount of gift tax under a grace period relating to the covered gifted unlisted shares or similar interests. 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 gift tax equivalent to the amount listed in item (ii) is the day on which two months have elapsed from that notice date (or, in the case where the successor donee dies during the period from that notice date 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 the successor donee came to know of the commencement of the succession due to the death of the successor donee), and the gift tax equivalent to the remaining amount after deducting the sum of the following amounts from the amount of gift tax under a grace period (referred to as "gift tax exempted on recalculation" in paragraph (24)) is exempted:

that recalculated deferred gift tax;

the total of the amount of dividends of surplus, etc. received from the certified gift succession company within five years before the date of the confirmation order by the successor donee and persons who share the same livelihood with the successor donee, and other amounts specified by Cabinet Order as amounts received from the certified gift succession company.

The term "recalculated deferred gift tax" referred to in the preceding paragraph means the amount calculated under the provisions of paragraph (2), item (v) by deeming the amount specified by Order of the Ministry of Finance as the value, as of the date of the confirmation order, of the covered gifted unlisted shares or similar interests to which the provisions of paragraph (1) apply (limited to the part corresponding to the amount of gift tax under a grace period, and, in the case where the certified gift succession company referred to in that paragraph relating to those covered gifted 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 covered gifted unlisted shares or similar interests; the same applies hereinafter in this paragraph) to be the value, at the time of the gift, of the covered gifted unlisted shares or similar interests acquired through the gift to which the provisions of paragraph (1) apply.

The provisions of paragraph (21) apply only in the case where the successor donee seeking the application of the provisions of that paragraph (limited to a person who has the authority of representation of the certified gift succession company referred to in that paragraph or any other person specified by Order of the Ministry of Finance as equivalent thereto) has, by the day on which two months have elapsed from the date of the confirmation order (or, in the case where the successor donee dies during the period from that date of the confirmation order 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 the successor donee came to know of the commencement of the succession due to the death of the successor donee; referred to as the "application deadline" in the following paragraph), submitted to the district director with jurisdiction over the place for tax payment a written application stating that the successor donee wishes to receive the application of the provisions of paragraph (21), the recalculated deferred gift 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 or reorganization plan (including a debt workout plan) for which the confirmation order prescribed in paragraph (21) was issued are attached).

In the case where a written application under the provisions of 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 gift tax exempted on recalculation relating to that written application, or dismisses the application relating to that written application. In this case, the district director is to notify the successor donee who submitted that written application of the amount of that gift 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 application deadline relating to that written application.

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

Even in the case where the written notification referred to in paragraph (9) or paragraph (15) 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 (11) or paragraph (15).

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

In the case where there are assets that the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in paragraph (1) has acquired through a capital contribution in kind or a gift from the successor donee seeking the application of the provisions of that paragraph and persons who have a special relationship specified by Cabinet Order with that successor donee (limited to those acquired within three years before the gift referred to in that paragraph; referred to as "assets acquired by capital contribution in kind, etc." in item (ii)), if the ratio of the amount listed in item (ii) to the amount listed in item (i), as of the time of the gift referred to in that paragraph, is 70 percent or more, the provisions of that paragraph do not apply to that successor donee:

the total value of the assets of the certified gift succession company;

the total value of the assets acquired by capital contribution in kind, etc. (or, in the case where the certified gift succession company does not hold those assets acquired by capital contribution in kind, etc. at the time of the gift referred to in paragraph (1), the value of those assets acquired by capital contribution in kind, etc. calculated on the assumption that it held them at the time of that gift).

With regard to the application of the provisions of paragraphs (3) and (5) to the successor donee to whom the provisions of paragraph (1) apply relating to the certified gift succession company in the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests referred to in that paragraph has come to fall under the case listed in any of the following items, the provisions of the relevant item apply:

in the case specified by Cabinet Order as a case where the assets used for the business of the certified gift succession company have suffered severe damage due to a disaster (meaning an earthquake, storm or flood damage, fire or any other disaster specified by Cabinet Order; the same applies hereinafter in this item and in the following item, in paragraph (31), items (i) and (ii) and paragraph (35), items (i) and (ii) of the following Article, and in Article 70-7-4, paragraph (18), items (i) and (ii)): even in the case where the certified gift succession company has come to fall under the case listed in paragraph (3), item (ii) or (ix) within the business succession period for a gift (limited to the period on or after the day on which that disaster occurred; the same applies hereinafter in this paragraph and in paragraph (32)), or under the case listed in the left-hand column of item (i) of the table in paragraph (5) (limited to the part relating to paragraph (3), item (ix)) within the specified gift period (meaning the period from the day following the last day of the business succession period for a gift until the day on which 10 years have elapsed on or after the day following the base date for management reports for a gift immediately preceding the day on which that disaster occurred (or, in the case where the first base date for management reports for a gift arrives after the day on which that disaster occurred, the period from the day following that base date for management reports for a gift until the day on which 10 years have elapsed on or after that day); the same applies hereinafter through item (iv)), the certified gift succession company is deemed not to fall under those cases;

in the case specified by Cabinet Order as a case where it has become difficult to secure employment at the certified gift succession company because a business office of the certified gift succession company (limited to an office, store, factory or any other similar place where regular employees work; the same applies in (a)) has suffered damage due to a disaster (excluding the case falling under the case listed in the preceding item): the following provisions apply;

even in the case where the certified gift succession company has come to fall under the case listed in paragraph (3), item (ii) because the number calculated by dividing the total number of regular employees of the business offices so damaged (referred to as "disaster-damaged business offices" in (a)) as of each base date falling within the employee number confirmation period (limited to the period on or after the day on which that disaster occurred; the same applies in (a)) by the number of base dates falling within the employee number confirmation period, as of the last day of the employee number confirmation period, has fallen below the number specified by Cabinet Order as the number at which the employment of the regular employees of those disaster-damaged business offices is deemed to be secured (or, in the case where the business offices of the certified gift succession company include business offices other than disaster-damaged business offices, limited to the case where the number calculated by dividing the total number of regular employees of those other business offices as of each base date falling within the employee number confirmation period by the number of base dates falling within the employee number confirmation period, as of the last day of the employee number confirmation period, is equal to or more than the number specified by Cabinet Order as the number at which the employment of the regular employees of those business offices is deemed to be secured), the certified gift succession company is deemed not to fall under the case listed in that item;

even in the case where the certified gift succession company has come to fall under the case listed in paragraph (3), item (ix) within the business succession period for a gift, or under the case listed in the left-hand column of item (i) of the table in paragraph (5) (limited to the part relating to paragraph (3), item (ix)) within the specified gift period, the certified gift succession company is deemed not to fall under those cases;

in the case specified by Cabinet Order as a case where the sales amount of the certified gift succession company has significantly decreased due to falling under either Article 2, paragraph (5), item (i) or item (ii) of the Small and Medium-sized Enterprise Credit Insurance Act (Act No. 264 of 1950) (excluding the case falling under the cases listed in the preceding two items): even in the case where the certified gift succession company has come to fall under the case listed in paragraph (3), item (ii) within the business succession period for a gift, the certified gift succession company is deemed not to fall under the case listed in that item as of the last day of the business succession period for a gift, but only when it is specified by Cabinet Order as a case where the employment of regular employees commensurate with the sales amount is secured;

in the case specified by Cabinet Order as a case where the sales amount of the certified gift succession company has significantly decreased due to falling under either Article 2, paragraph (5), item (iii) or item (iv) of the Small and Medium-sized Enterprise Credit Insurance Act (excluding the case falling under the cases listed in the preceding three items): even in the case where the certified gift succession company has come to fall under the case listed in paragraph (3), item (ii) or (ix) within the business succession period for a gift, or under the case listed in the left-hand column of item (i) of the table in paragraph (5) (limited to the part relating to paragraph (3), item (ix)) within the specified gift period, the certified gift succession company is deemed not to fall under those cases as of the last day of the business succession period for a gift (or, in the case where it has come to fall under the case listed in paragraph (3), item (ix) within the business succession period for a gift, or under the case listed in the left-hand column of item (i) of that table (limited to the part relating to item (ix) of that paragraph) within the specified gift period, during the period from the day following the base date for management reports for a gift immediately preceding the base date for management reports for a gift (limited to one falling within the business year following the business year to which that sales amount relates; referred to as the "base date" hereinafter in this item) until that base date (or, in the case listed in (a) or (b) below, the period specified in (a) or (b), respectively)), but only when it is specified by Cabinet Order as a case where the employment of regular employees commensurate with the sales amount is secured.

in the case where that base date is the first base date for management reports for a gift: the period from the day following the due date for filing the gift tax return for the year that includes the day of the gift to which the provisions of paragraph (1) apply until that base date;

in the case where the base date for management reports for a gift falls within the specified gift period: the period from the day following the immediately preceding specified base date, among the days on which each year elapses from the last day of the business succession period for a gift (referred to as "specified base dates" in (b)) (or, in the case where the day on which that one year elapses is the first specified base date, the day following the last day of the business succession period for a gift), until the next specified base date (limited to one falling within the business year following the business year to which that sales amount relates (limited to a business year preceding the business year specified by Cabinet Order as the business year in which that sales amount first recovered to the level before it fell under either Article 2, paragraph (5), item (iii) or item (iv) of the Small and Medium-sized Enterprise Credit Insurance Act)).

The provisions of the preceding paragraph apply only in the case where the successor donee to whom the provisions of paragraph (1) apply (limited to a person who had acquired the unlisted shares or similar interests referred to in paragraph (1) through a gift to which the provisions of that paragraph apply before the occurrence of the disaster referred to in item (i) or (ii) of the preceding paragraph, the event under Article 2, paragraph (5), item (i) or (ii) of the Small and Medium-sized Enterprise Credit Insurance Act referred to in item (iii) of that paragraph, or the event under paragraph (5), item (iii) or (iv) of that Article referred to in item (iv) of the preceding paragraph (referred to as a "disaster, etc." hereinafter in this paragraph); the same applies in the following paragraph) has submitted, pursuant to the provisions of Order of the Ministry of Finance, a written notification stating that the successor donee wishes to receive the application of the provisions of the preceding paragraph to the district director with jurisdiction over the place for tax payment by the day on which 10 months have elapsed from the day on which that disaster, etc. occurred (including the case where the successor donee has submitted that written notification after that deadline, if that district director finds that there were unavoidable circumstances).

In the case where the certified gift succession company relating to the covered gifted unlisted shares or similar interests held by a successor donee has come to fall under the case listed in any of the items of paragraph (30), if the successor donee or the certified gift succession company has come to fall under any of the following items within the business succession period for a gift, the provisions of this Article apply by deeming the successor donee or the certified gift succession company to fall under the case listed in paragraph (16), item (i) or item (ii), respectively:

when the successor donee has made a transfer, etc. of all of the unlisted shares or similar interests of the certified gift succession company (limited to when it falls under either (a) or (b) below, and excluding when the certified gift succession company has become a wholly owned subsidiary company resulting from a share exchange or share transfer of another company through a share exchange, etc. (limited to when the other company is an entity other than a person who has a special relationship specified by Cabinet Order with the successor donee and no shares, etc. of the other company are delivered upon that share exchange, etc.));

when that transfer, etc. is made to a person specified by Cabinet Order as a single person among persons other than those who have a special relationship specified by Cabinet Order with the successor donee;

when that transfer, etc. is made, in the case where a confirmation order for a rehabilitation plan under the provisions of the Civil Rehabilitation Act or for a reorganization plan under the provisions of the Corporate Reorganization Act has been issued, in order to cancel those unlisted shares or similar interests based on that rehabilitation plan or that reorganization plan;

when an order commencing bankruptcy proceedings or an order to commence special liquidation has been issued with regard to the certified gift succession company relating to the covered gifted unlisted shares or similar interests.

With regard to the application of the provisions of paragraph (16) in the case where the provisions of the preceding paragraph apply, the phrase "on or after the day following the last day of" in items (i) and (ii) of that paragraph is deemed to be replaced with "within".

Beyond what is provided for in paragraph (31) and the preceding paragraph, necessary matters concerning the application of the provisions of paragraphs (30) and (32) are specified by Cabinet Order.

The Minister of Economy, Trade and Industry or the Director-General of a Bureau of Economy, Trade and Industry (or, in the case where the management succession certification is to be made by a prefectural governor pursuant to the provisions of a Cabinet Order based on the provisions of Article 17 of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises, that prefectural governor; the same applies in the following paragraph, in paragraphs (40) and (41) of the following Article and in Article 70-7-4, paragraphs (20) and (21)) must, if any 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 paragraphs (3) through (5) with respect to the successor donee to whom the provisions of paragraph (1) apply, the covered gifted unlisted shares or similar interests referred to in that paragraph or the certified gift succession company relating to those covered gifted unlisted shares or similar interests, 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 successor donee in writing, without delay, that the fact has occurred with regard to those covered gifted unlisted shares or similar interests 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 successor donee 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 successor donee receives the application of the provisions of paragraph (1), and of other matters specified by Order of the Ministry of Finance.

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.