Act on Special Measures Concerning Taxation

In the case where gift tax is imposed on another individual who holds an equity interest in a certified medical care corporation (limited to a medical care corporation that has received certification by the Minister of Health, Labour and Welfare during the period from the effective date of the 2014 Medical Care Act amendments to December 31, 2029) (that other individual is referred to as the "donee" hereinafter in this Article) as a result of an individual who holds an equity interest in that certified medical care corporation (referred to as the "donor" in paragraph (4)) having waived all or part of that equity interest, if that donee has, during the period from the time of that waiver to the filing deadline for the gift tax return relating to the economic benefit arising from that waiver, waived all or part of the equity interest in that certified medical care corporation held by the donee pursuant to the provisions of Order of the Ministry of Finance, then, for that donee, the remaining amount after deducting the waiver-equivalent gift tax amount from the amount calculated under the provisions of Articles 21-5 through 21-8 of the Inheritance Tax Act (including the provisions of Article 70-2-4 and Article 70-2-5) is the amount of gift tax to be paid by the donee.

The waiver-equivalent gift tax amount prescribed in the preceding paragraph means the amount calculated pursuant to the provisions of Cabinet Order as the amount corresponding to the part for which the waiver of the equity interest in the certified medical care corporation referred to in that paragraph has been made by the donee referred to in that paragraph, out of the amount calculated pursuant to the provisions of Cabinet Order by deeming the value of the economic benefit referred to in that paragraph to be the taxable value of gift tax for that year for that donee.

The provisions of paragraph (3) of the preceding Article apply mutatis mutandis to the economic benefit to which the provisions of paragraph (1) apply.

In the case where the donee seeking the application of the provisions of paragraph (1) has, during the period from the day on which the waiver of the equity interest in the certified medical care corporation by the donor referred to in that paragraph was made to the filing deadline for the gift tax return relating to the economic benefit referred to in that paragraph, received a refund according to the amount of capital contribution based on the equity interest in that certified medical care corporation or made a transfer of that equity interest, the provisions of that paragraph do not apply.

The provisions of paragraph (1) do not apply in the case where the gift tax return relating to the economic benefit of the donee seeking the application of the provisions of that paragraph does not contain a statement that the application of the provisions of that paragraph is sought for that economic benefit, or in the case where details of the equity interest relating to that economic benefit, details concerning the calculation of the waiver-equivalent gift tax amount referred to in that paragraph, and other documents specified by Order of the Ministry of Finance are not attached to that return.

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

In the case where, upon the death of an individual who held an equity interest in a transitional medical corporation prescribed in paragraph (2) of the following Article, the value of the equity interest held by another individual who holds an equity interest in that transitional medical corporation has increased, with regard to the application of the main clause of Article 9 of the Inheritance Tax Act to the economic benefit arising from the increase in the value of that equity interest, the phrase "gift (or, in the case where that act was made by will, bequest)" in the main clause of that Article is deemed to be replaced with "gift". In this case, the provisions of Article 19, paragraph (1) of that Act do not apply to that economic benefit.

In the case prescribed in the first sentence of the preceding paragraph, if the transitional medical corporation referred to in that paragraph is a certified medical care corporation (limited to a medical care corporation that has received certification by the Minister of Health, Labour and Welfare during the period from the effective date of the 2014 Medical Care Act amendments to December 31, 2029) as of the filing deadline for the gift tax return relating to the economic benefit referred to in that paragraph, the other individual referred to in that paragraph may receive the application of the provisions of the preceding two Articles with regard to that economic benefit. In this case, the deceased individual referred to in that paragraph is deemed to be the donor prescribed in Article 70-7-9, paragraph (1) or paragraph (1) of the preceding Article, and that other individual is deemed to be the donee prescribed in those provisions.

The provisions of paragraph (1) do not apply except in the case where the other individual referred to in that paragraph has chosen the application of the provisions of the preceding two Articles pursuant to the provisions of the preceding paragraph.

The technical replacement of terms necessary where the provisions of the preceding two Articles are applied pursuant to the provisions of paragraph (2), and other necessary matters concerning the application of the provisions of the preceding three paragraphs, are specified by Cabinet Order.