Act on Special Measures Concerning Taxation

With regard to the inheritance tax equivalent to the inheritance tax subject to deferral relating to those special eligible gifted unlisted shares or similar interests (limited to shares, etc. (meaning shares or equity interests; the same applies hereinafter in this Article) of a special certified inheritance succession company) for which that inheritance tax return states that the special business successor donee upon inheritance seeks the application of the provisions of this paragraph (referred to as "special eligible inherited unlisted shares or similar interests" hereinafter in this Article), out of the amount of inheritance tax payable upon the filing of the inheritance tax return relating to that inheritance by a special business successor donee upon inheritance who seeks the application of the provisions of this paragraph with regard to special eligible gifted unlisted shares or similar interests deemed, pursuant to the provisions of paragraph (1) of the preceding Article, to have been acquired by inheritance or bequest from the special donor referred to in that paragraph, notwithstanding the provisions of Article 33 of the Inheritance Tax Act, a grace period is granted for the payment of that tax until the day of the death of that special business successor donee upon inheritance, only in the case where security equivalent to that inheritance tax subject to deferral has been provided by the due date for filing that inheritance tax return pursuant to the provisions of Cabinet Order.

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

special business successor donee upon inheritance: This means a person specified in Article 70-7-5, paragraph (2), item (vi) who receives the application of the provisions of paragraph (1) of that Article and who satisfies all of the following requirements:

at the time of the commencement of the succession to which the provisions of the preceding paragraph apply, that person holds the authority of representation of the special certified inheritance succession company relating to those special eligible gifted unlisted shares or similar interests;

at the time of the commencement of the succession to which the provisions of the preceding paragraph apply, the total number of voting rights relating to the shares, etc. of that special certified inheritance succession company held by that person and persons who have a special relationship specified by Cabinet Order with that person exceeds 50 percent of the total number of voting rights of all shareholders, etc. of that special certified inheritance succession company;

at the time of the commencement of the succession to which the provisions of the preceding paragraph apply, the number of voting rights relating to the shares, etc. of that special certified inheritance succession company held by that person is not less than the number of voting rights relating to the shares, etc. of that special certified inheritance succession company held by any of the persons who have the special relationship specified by Cabinet Order prescribed in (b) with that person (excluding persons other than that person who receive the application of the provisions of Article 70-7-5, paragraph (1), Article 70-7-6, paragraph (1) or the preceding paragraph);

special certified inheritance succession company: This means a company specified in Article 70-7-5, paragraph (2), item (i) that satisfies, at the time of the commencement of the succession to which the provisions of the preceding paragraph apply, all of the following requirements (or, in the case where the special donor relating to the special business successor donee upon inheritance who receives the application of the provisions of that paragraph has died on or after the day following the earlier of the days listed in item (v), (a) or (b), excluding the requirement listed in (c)):

the number of regular employees (meaning those specified by Order of the Ministry of Finance as employees regularly employed; the same applies in (e)) of that company is one or more;

that company does not fall under an asset-holding company prescribed in Article 70-7, paragraph (2), item (viii) or an asset-management company prescribed in item (ix) of that paragraph 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 having a close relationship with that specified company (referred to as a "specified specially related company" in (d)), out of the 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;

that company and the specified specially related company do not fall under an adult entertainment business company prescribed in Article 70-7, paragraph (2), item (i), (d);

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 that has a controlling relationship with that company 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 ensuring the smooth operation of the business of a company;

unlisted share or similar interest: This means shares, etc. specified in Article 70-7, paragraph (2), item (ii);

inheritance tax subject to deferral: the amount of inheritance tax of the special business successor donee upon inheritance referred to in the preceding paragraph, calculated pursuant to the provisions of Cabinet Order by applying the provisions of Articles 13 through 19 of the Inheritance Tax Act and deeming the value of the special eligible inherited unlisted shares or similar interests to which the provisions of that paragraph apply (or, in the case where the special certified inheritance succession company relating to those special eligible inherited unlisted shares or similar interests, or a specially related company of that special certified inheritance succession company that is a corporation having a controlling relationship with that special certified inheritance succession company (referred to as the "special certified inheritance succession company, etc." in this item), holds shares, etc. (including investment equity prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations) of a foreign company prescribed in Article 2, item (ii) of the Companies Act (limited to one falling under a specially related company of that special certified inheritance succession company) or any other corporation specified by Cabinet Order, the value calculated pursuant to the provisions of Order of the Ministry of Finance, on the basis of the value of the shares, etc. of that special certified inheritance succession company at the time of the gift to which the provisions of Article 70-7-5, paragraph (1) apply of the special eligible gifted unlisted shares or similar interests referred to in the preceding paragraph, on the assumption that the special certified inheritance succession company, etc. did not hold the shares, etc. of that foreign company or that other corporation specified by Cabinet Order) to be the taxable value of inheritance tax relating to the special business successor donee upon inheritance referred to in that paragraph;

special business inheritance succession period: This means, in the case where succession has commenced with regard to the special donor relating to the gift to which the provisions of Article 70-7-5, paragraph (1) apply (or, in the case where the gift to which the provisions of that paragraph apply received by the special business successor donee upon inheritance is a gift by that special donor to which the provisions of Article 70-7, paragraph (15) (limited to the part relating to item (iii), and including the case where it is applied mutatis mutandis pursuant to Article 70-7-5, paragraph (11)) apply, the person who made, to the person specified by Cabinet Order as a person who had received the application of the provisions of Article 70-7, paragraph (1) or Article 70-7-5, paragraph (1), a gift of unlisted shares or similar interests of the special certified inheritance succession company relating to the special eligible gifted unlisted shares or similar interests referred to in the preceding paragraph; the same applies in paragraphs (5) and (6) and in Article 70-7-2, paragraph (15) as applied mutatis mutandis pursuant to paragraph (10)) during the period from the day following the due date for filing the gift tax return prescribed in Article 70-7-5, paragraph (1) for the year that includes the day of that gift until the earlier of the following days, the period from the day of the commencement of the succession until whichever is earlier of the earlier of those following days and the day preceding the day of the death of the special business successor donee upon inheritance relating to that gift:

the day on which five years have elapsed from the day following the due date for filing the gift tax return prescribed in Article 70-7-5, paragraph (1) for the year that includes the day of the first gift to which the provisions of that paragraph apply for that special business successor donee upon inheritance;

the day on which five years have elapsed from the day following the due date for filing the inheritance tax return relating to the first inheritance to which the provisions of Article 70-7-6, paragraph (1) apply for that special business successor donee upon inheritance;

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

the special business inheritance succession period: each day on which one year elapses from the day following the due date for filing the gift tax return prescribed in Article 70-7-5, paragraph (1) for the year that includes the day of the gift to which the provisions of that paragraph apply (or, in the case where, before receiving the application of the provisions of that paragraph, the special business successor donee upon inheritance has received the application of the provisions of Article 70-7-6, paragraph (1) with regard to unlisted shares or similar interests of the special certified inheritance succession company relating to the special eligible gifted unlisted shares or similar interests referred to in Article 70-7-5, paragraph (1), the due date for filing the inheritance tax return) (referred to as the "type 1 inheritance base date" in paragraph (6));

the period from the day following the last day of the special business inheritance succession period (or, in the case where the special donor relating to the special business successor donee upon inheritance who receives the application of the provisions of the preceding paragraph has died on or after the day following the earlier of the days listed in (a) or (b) of the preceding item, the special business gift succession period prescribed in Article 70-7-5, paragraph (2), item (vii) relating to that special business successor donee upon inheritance) until the day on which the deadline of the tax payment grace period under the provisions of the preceding paragraph, Article 70-7-2, paragraphs (3) through (5) as applied mutatis mutandis pursuant to the following paragraph, paragraph (12) of that Article as applied mutatis mutandis pursuant to paragraph (8), paragraph (13) of that Article as applied mutatis mutandis pursuant to paragraph (9) and paragraph (15) of that Article as applied mutatis mutandis pursuant to paragraph (10) is fixed for all of the inheritance tax equivalent to the inheritance tax subject to deferral (excluding, in the case where the provisions of Article 70-7-2, paragraph (4) or paragraph (5) as applied mutatis mutandis pursuant to the following paragraph 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 special eligible inherited unlisted shares or similar interests to which the provisions of the following paragraph were applied; referred to as the "amount of inheritance tax under a grace period" in paragraphs (6) and (7)): each day on which three years elapse from the day following that last day (referred to as the "type 2 inheritance base date" in paragraph (6)).

The provisions of Article 70-7-2, paragraph (3) (excluding item (ii)), paragraph (4) and paragraph (5) apply mutatis mutandis to the fixing of the deadline of the tax payment grace period under the provisions of paragraph (1). In this case, the phrase "paragraph (1) of the preceding Article" in paragraph (3), item (iii) of that Article is deemed to be replaced with "Article 70-7, paragraph (1)", the phrase "any of the persons" in item (iv) of that paragraph is deemed to be replaced with "any of the persons (excluding special business successor donees upon inheritance other than that special business successor donee upon inheritance, a special business successor donee prescribed in Article 70-7-5, paragraph (2), item (vi) who receives the application of the provisions of paragraph (1) of that Article, and a special business successor heir, etc. prescribed in Article 70-7-6, paragraph (2), item (vii) who receives the application of the provisions of paragraph (1) of that Article)", and the phrase "paragraph (1) of the preceding Article" in the left-hand column of item (i) of the table in paragraph (4) of that Article is deemed to be replaced with "Article 70-7, paragraph (1)".

The provisions of Article 70-7-2, paragraph (6) apply mutatis mutandis in the case where the special business successor donee upon inheritance who seeks to receive the application of the provisions of paragraph (1) has provided all of the special eligible inherited unlisted shares or similar interests (or, in the case where the special certified inheritance succession company relating to those special eligible inherited 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 special eligible inherited unlisted shares or similar interests; the same applies hereinafter in this Article) as security for the inheritance tax subject to deferral.

The provisions of paragraph (1) do not apply in the case where the inheritance tax return filed by the special business successor donee upon inheritance seeking the application of the provisions of that paragraph does not state that the special business successor donee upon inheritance seeks the application of the provisions of that paragraph for all or part of the special eligible gifted unlisted shares or similar interests, or where the following documents are not attached to that return:

a document stating details of those special eligible gifted unlisted shares or similar interests, details concerning the calculation of the inheritance tax subject to deferral and other matters specified by Order of the Ministry of Finance;

in the case where the day on which five months (or, in the case where the special donor relating to those special eligible gifted unlisted shares or similar interests has died on or after the day following the earlier of the days listed in paragraph (2), item (v), (a) or (b), three months) have elapsed from the day following the first base date for management reports for inheritance arriving on or after the day following the day of the death of that special donor arrives by the due date for filing the inheritance tax return relating to the death of that special donor, a document stating the matters specified by Order of the Ministry of Finance as matters concerning the management of the special certified inheritance succession company relating to those special eligible gifted unlisted shares or similar interests;

a document certifying, pursuant to the provisions of Order of the Ministry of Finance, that, at the time of the commencement of the succession to which the provisions of paragraph (1) apply, that special business successor donee upon inheritance satisfies all of the requirements listed in paragraph (2), item (i), (a) through (c), and the special certified inheritance succession company relating to those special eligible gifted unlisted shares or similar interests satisfies the requirements listed in item (ii), (a) through (e) of that paragraph (or, in the case where the special donor relating to that special business successor donee upon inheritance has died on or after the day following the earlier of the days listed in item (v), (a) or (b) of that paragraph, excluding the requirement listed in item (ii), (c) of that paragraph) and the other requirements specified by Order of the Ministry of Finance.

If, during the period from the day following the day of the death of the special donor relating to the special eligible inherited unlisted shares or similar interests until the day on which the deadline of the tax payment grace period under the provisions of paragraph (1), Article 70-7-2, paragraphs (3) through (5) as applied mutatis mutandis pursuant to paragraph (3) of this Article, paragraph (12) of that Article as applied mutatis mutandis pursuant to paragraph (8), paragraph (13) of that Article as applied mutatis mutandis pursuant to paragraph (9), or paragraph (15) of that Article as applied mutatis mutandis pursuant to paragraph (10) is fixed for all of the inheritance tax equivalent to the amount of inheritance tax under a grace period, there is a base date for management reports for inheritance (excluding, in the case where the day on which five months (or, in the case where that special donor has died on or after the day following the earlier of the days listed in paragraph (2), item (v), (a) or (b), three months) have elapsed from the day following the first base date for management reports for inheritance arriving on or after the day following the day of the death of the special donor relating to those special eligible inherited unlisted shares or similar interests arrives by the due date for filing the inheritance tax return relating to the death of that special donor, that first base date for management reports for inheritance), the special business successor donee upon inheritance 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 the type 1 inheritance base date and the day on which three months have elapsed from the day following the type 2 inheritance base date; the same applies in paragraph (8) and paragraph (13)), 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 special business successor donee upon inheritance wishes to continue to receive the application of the provisions of paragraph (1) and matters concerning the management of the special certified inheritance succession company relating to the special eligible inherited unlisted shares or similar interests referred to in that paragraph.

The provisions of Article 70-7-2, paragraph (11) apply mutatis mutandis to the prescription of the national government's right to collect the inheritance tax equivalent to the amount of inheritance tax under a grace period and the interest tax and delinquent tax relating to that inheritance tax.

The provisions of Article 70-7-2, paragraph (12) apply mutatis mutandis in the case where the written notification referred to in paragraph (6) is not submitted to the district director with jurisdiction over the place for tax payment by the notification deadline.

The provisions of Article 70-7-2, paragraph (13) apply mutatis mutandis to the acceleration of the deadline of the tax payment grace period under the provisions of paragraph (1).

The provisions of Article 70-7-2, paragraphs (14) and (15) apply mutatis mutandis 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 special business successor donee upon inheritance seeks the application of the provisions of paragraph (1) or a tax payment grace period has been granted under the provisions of that paragraph. In this case, the phrase "the value calculated by multiplying the value of those covered unlisted shares or similar interests by 20 percent" in paragraph (14), item (xi) of that Article is deemed to be replaced with "zero", the phrase "the sum of the value calculated by multiplying the value calculated on the assumption that the certified succession company, etc. did not hold those shares, etc. by 20 percent and the value of those shares, etc." in that item is deemed to be replaced with "the value of those shares, etc.", the phrase "successor heir, etc." in paragraph (15) of that Article is deemed to be replaced with "special business successor donee upon inheritance", the phrase "decedent" is deemed to be replaced with "special donor", the phrase "Article 70-7-2, paragraph (2), item (i)" is deemed to be replaced with "Article 70-7-8, paragraph (2), item (ii)", the phrase "(Tax Payment Grace Period and Exemption for Inheritance Tax on Unlisted Shares or Similar Interests)" is deemed to be replaced with "(Special Provisions on Tax Payment Grace Period and Exemption for Inheritance Tax Where a Special Donor of Unlisted Shares or Similar Interests Has Died)", the phrase "certified succession company" is deemed to be replaced with "special certified inheritance succession company", the words "', the phrase 'its shareholders" are deemed to be replaced with " or the special business successor donee upon inheritance prescribed in item (i) of that paragraph', the phrase 'its shareholders", the phrase "referred to in paragraph (1) of that Article" is deemed to be replaced with "that", the phrase "that paragraph" is deemed to be replaced with "paragraph (1) of that Article", the phrase "determine the inheritance tax under the tax payment grace period to be exempted" is deemed to be replaced with "determine the inheritance tax under the tax payment grace period to be exempted, or rescind the exemption from that inheritance tax", the phrase "Article 70-7-2, paragraph (1)" is deemed to be replaced with "Article 70-7-8, paragraph (1)", and the phrase "Article 70-7-2" is deemed to be replaced with "Article 70-7-8".

The provisions of Article 70-7-2, paragraphs (16) through (21) apply mutatis mutandis to the exemption from inheritance tax for which a tax payment grace period has been granted under the provisions of paragraph (1). In this case, the phrase "paragraph (1) of the preceding Article" in paragraph (16), item (ii) of that Article is deemed to be replaced with "Article 70-7, paragraph (1)", and the phrase "paragraph (28)" in paragraphs (19) and (20) of that Article is deemed to be replaced with "Article 70-7-6, paragraph (23) as applied mutatis mutandis pursuant to Article 70-7-8, paragraph (18)".

The provisions of Article 70-7-2, paragraphs (22) through (26) apply mutatis mutandis to the calculation of and exemption from the inheritance tax subject to deferral in the case where the assessment prescribed in paragraph (22) of that Article has been made with regard to a special certified inheritance succession company.

The provisions of Article 70-7-2, paragraph (27) apply mutatis mutandis in the case where the written notification referred to in paragraph (6), or in paragraph (16) of that Article as applied mutatis mutandis pursuant to paragraph (11), has not been submitted by the notification deadline or the deadline for notification of exemption referred to in that paragraph.

The provisions of Article 70-7-2, paragraphs (31) through (39) apply mutatis mutandis in the case where the special certified inheritance succession company relating to the special eligible inherited unlisted shares or similar interests referred to in paragraph (1) has suffered damage from a disaster, etc. prescribed in paragraph (32) of that Article.

The provisions of Article 70-7-2, paragraph (40) apply mutatis mutandis in the case where the Minister of Economy, Trade and Industry or the Director-General of a Bureau of Economy, Trade and Industry has come to know, with regard to the special business successor donee upon inheritance who receives the application of the provisions of paragraph (1), the special eligible inherited unlisted shares or similar interests referred to in that paragraph or the special certified inheritance succession company relating to those special eligible inherited unlisted shares or similar interests, that a fact relating to the fixing of the deadline of the tax payment grace period under the provisions of paragraphs (3) through (5) of that Article as applied mutatis mutandis pursuant to paragraph (3) has occurred, through having made a certification or confirmation, accepted a report or performed any other act concerning that fact pursuant to the provisions of laws and regulations.

The provisions of Article 70-7-2, paragraph (41) apply mutatis mutandis in the case where the district director finds it necessary in order for 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 special business successor donee upon inheritance who receives the application of the provisions of paragraph (1) that relate to the application of the provisions of paragraph (40) of that Article as applied mutatis mutandis pursuant to the preceding paragraph) to be processed properly and reliably.

The provisions of Article 70-7-6, paragraphs (13) through (20) apply mutatis mutandis in the case where a reason specified by Cabinet Order as a reason making it difficult for the special certified inheritance succession company relating to the special eligible inherited unlisted shares or similar interests referred to in paragraph (1) to continue its business has arisen, when the special business successor donee upon inheritance who receives the application of the provisions of that paragraph has made a transfer or gift of all or part of those special eligible inherited unlisted shares or similar interests, or when that special certified inheritance succession company has undergone a merger, share exchange or share transfer or has dissolved.

The provisions of Article 70-7-6, paragraphs (23) and (24) apply mutatis mutandis to the payment of interest tax due to the deadline of the tax payment grace period having been fixed pursuant to the provisions of Article 70-7-2, paragraphs (3) through (5) as applied mutatis mutandis pursuant to paragraph (3) of this Article, paragraph (12) of that Article as applied mutatis mutandis pursuant to paragraph (8), paragraph (13) of that Article as applied mutatis mutandis pursuant to paragraph (9), paragraph (15) of that Article as applied mutatis mutandis pursuant to paragraph (10), or Article 70-7-6, paragraph (13) or paragraph (15) as applied mutatis mutandis pursuant to the preceding paragraph.

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.