Act on Special Measures Concerning Taxation

Where a business operator that transfers liquor or other goods specified by Cabinet Order (referred to as "designated goods" in this Article) (meaning a business operator prescribed in Article 2, paragraph (1), item (iv) of the Consumption Tax Act (excluding a business operator exempted from the obligation to pay consumption tax pursuant to the main clause of Article 9, paragraph (1) of that Act); the same applies hereinafter up to Article 86-2) or a person that takes designated goods out of a bonded area transfers, or takes out of a bonded area, designated goods for which it has obtained, pursuant to the provisions of Cabinet Order, the approval of the director-general of the customs house having jurisdiction over the location of the port at which they are to be loaded (meaning an open port, customs airport, or closed port prescribed in items (xi) through (xiii) of Article 2, paragraph (1) of the Customs Act; the same applies hereinafter in this Article, Article 87-5, and Article 88-3), in order to load them, as ship's stores or aircraft stores (meaning ship's stores or aircraft stores prescribed in item (ix) or item (x) of that paragraph; the same applies in Article 87-5 and Article 88-3), onto a Japanese vessel (including a pelagic fishing vessel or any other vessel equivalent thereto that is specified by Cabinet Order) or aircraft that travels between Japan and foreign countries (referred to as an "ocean-going vessel or aircraft, etc." in this Article, Article 87-5, and Article 88-3), the Consumption Tax Act and the Act on Collection, etc. of National Consumption Tax Imposed on Imported Goods apply, pursuant to the provisions of Order of the Ministry of Finance, by deeming the loading onto that ocean-going vessel or aircraft, etc. to be an export or a loading onto a foreign vessel or aircraft (meaning the loading referred to in Article 12, paragraph (1) of the Act on Collection, etc. of National Consumption Tax Imposed on Imported Goods (Act No. 37 of 1955); the same applies in Article 87-5 and Article 88-3).

Where, out of designated goods loaded onto an ocean-going vessel or aircraft, etc. under the provisions of the preceding paragraph, those transferred by a business operator first come to fall under any of the cases listed in the following items (excluding the case where they are transshipped onto another ocean-going vessel or aircraft, etc. with the approval of the director-general of the customs house having jurisdiction over the location of the port at which that ocean-going vessel or aircraft, etc. has called, pursuant to the provisions of Cabinet Order, and other cases specified by Cabinet Order), the Consumption Tax Act applies by deeming the holder of those designated goods to take out of a bonded area the designated goods specified in each of those items to which the official assessment system prescribed in Article 6-2, paragraph (1), item (ii) of the Customs Act applies. In this case, the place for tax payment of consumption tax on those designated goods is to be the location of the place where those designated goods came to fall under the case listed in each of those items, and the tax base of those designated goods is to be, notwithstanding the provisions of Article 28, paragraph (4) of that Act, the amount of consideration for the transfer (meaning the amount of consideration prescribed in paragraph (1) of that Article; the same applies in Article 86-6, paragraph (1)) at the time when those designated goods were transferred by the business operator under the provisions of the preceding paragraph:

where they are landed or unloaded (including transshipment; the same applies hereinafter in this item) in Japan: the designated goods so landed or unloaded;

where they remain on board that ocean-going vessel or aircraft, etc. when it ceases to be an ocean-going vessel or aircraft, etc.: the designated goods so remaining.

In the case referred to in the preceding paragraph, where an authorized importer or authorized consigning importer prescribed in Article 7-2, paragraph (1) of the Customs Act files with a director-general of a customs house the return referred to in Article 47, paragraph (2) of the Consumption Tax Act pertaining to the designated goods referred to in the preceding paragraph (excluding a return pertaining to goods specified by Cabinet Order), it may file that return with the director-general of any customs house. In this case, the place for tax payment of consumption tax is to be, notwithstanding the provisions of the preceding paragraph, the location of the customs house to which the director-general of the customs house with whom that return was filed belongs.

Where a business operator has made a taxable transfer, etc. of assets (meaning a taxable transfer, etc. of assets prescribed in Article 2, paragraph (1), item (ix) of the Consumption Tax Act, excluding one that falls under a specified transfer, etc. of assets prescribed in item (viii)-2 of that paragraph; the same applies hereinafter in this paragraph, the following paragraph, and Article 86-6, paragraph (3)) to a foreign embassy, legation, consulate, or any other equivalent institution located in Japan (referred to as an "embassy, etc." in this Article) or to a foreign ambassador, minister, consul, or any other equivalent person dispatched to Japan (referred to as an "ambassador, etc." in this Article), if that foreign embassy, etc. or ambassador, etc. acquires or borrows assets pertaining to that taxable transfer, etc. of assets, or receives the provision of services pertaining to that taxable transfer, etc. of assets, as necessary for performing diplomatic, consular, or other duties, by the method specified by Cabinet Order, consumption tax is exempted for that taxable transfer, etc. of assets; provided, however, that with regard to the embassy, etc. or ambassador, etc. of a country that places restrictions on the exemption from taxes similar to consumption tax for assets acquired or borrowed, or services received, by a Japanese embassy, etc. located in a foreign country or a Japanese ambassador, etc. dispatched to a foreign country, this is subject to reciprocity.

The provisions of the preceding paragraph do not apply if the business operator that has made the taxable transfer, etc. of assets referred to in that paragraph does not preserve, pursuant to the provisions of Cabinet Order, documents or electronic or magnetic records (meaning records made in an electronic form, a magnetic form, or any other form that cannot be perceived by the human senses, which are used in information processing by computers; the same applies hereinafter in this paragraph) certifying that the foreign embassy, etc. or ambassador, etc. has, with an exemption from consumption tax by the method prescribed in that paragraph, acquired or borrowed assets pertaining to that taxable transfer, etc. of assets, or received the provision of services pertaining to that taxable transfer, etc. of assets; provided, however, that this does not apply if that business operator proves that it was unable to preserve those documents or electronic or magnetic records due to a disaster or other unavoidable circumstances.

The foreign embassy, etc. or ambassador, etc. referred to in paragraph (1) must not, for two years from the day on which it acquired or borrowed assets to which the provisions of that paragraph have been applied, use those assets for any purpose other than the performance of the duties prescribed in that paragraph (referred to as "use for other purposes" in this paragraph); provided, however, that this does not apply if there are unavoidable circumstances for putting those assets to use for other purposes within that period.

Where a business operator transfers, to a navy exchange or post exchange prescribed in Article XV, paragraph 1 (a) of the Agreement under Article VI of the Treaty of Mutual Cooperation and Security between Japan and the United States of America, Regarding Facilities and Areas and the Status of United States Armed Forces in Japan (hereinafter referred to as a "navy exchange, etc." in this Article), goods that members of the United States armed forces, the civilian component, and their dependents prescribed in Article I of that Agreement (hereinafter referred to as "members of the United States armed forces, etc." in this Article) purchase from a navy exchange, etc. by the method specified by Cabinet Order for the purpose of exporting them (excluding consumables and other goods specified by Order of the Ministry of Finance; hereinafter referred to as "tax-exempt goods" in this Article), consumption tax is exempted for the transfer of those tax-exempt goods.

The provisions of the preceding paragraph do not apply if the business operator that has made the transfer of tax-exempt goods does not preserve, pursuant to the provisions of Cabinet Order, documents certifying that those tax-exempt goods were purchased by members of the United States armed forces, etc. by the method specified by Cabinet Order prescribed in that paragraph; provided, however, that this does not apply if consumption tax has already been collected through the application of the provisions of the main clause of the following paragraph or the main clause of paragraph (5) (including as applied mutatis mutandis pursuant to paragraph (6)), or if that business operator proves that it was unable to preserve those documents due to a disaster or other unavoidable circumstances.

Where any of the members of the United States armed forces, etc. who has purchased tax-exempt goods at a navy exchange, etc. by the method specified by Cabinet Order prescribed in paragraph (1) does not export those tax-exempt goods by the day on which the person departs from Japan (or, where the person ceases to be one of the members of the United States armed forces, etc., by the day on which the person so ceases), the director-general of the customs house having jurisdiction over the person's port of departure (or, where the person ceases to be one of the members of the United States armed forces, etc., the district director having jurisdiction over the location of the person's domicile or residence at the time of so ceasing; the same applies hereinafter in this paragraph) immediately collects from that person consumption tax equivalent to the amount of consumption tax exempted under the provisions of paragraph (1) for the transfer of those tax-exempt goods, except where the person has obtained the approval of that director-general of the customs house for not exporting those tax-exempt goods because the person has lost them due to a disaster or other unavoidable circumstances; provided, however, that this does not apply where facts falling under the case prescribed in the main clause of the preceding paragraph have already arisen or where consumption tax has already been collected through the application of the provisions of the main clause of paragraph (5) (including as applied mutatis mutandis pursuant to paragraph (6)).

Tax-exempt goods that members of the United States armed forces, etc. have purchased at a navy exchange, etc. by the method specified by Cabinet Order prescribed in paragraph (1) must not be transferred or acquired (including possessing those tax-exempt goods upon entrustment of a transfer or acquisition or for intermediation, or having a person entrusted with the transfer or a person acting as an intermediary possess them for the transfer; the same applies hereinafter in this Article) in Japan (meaning Japan as prescribed in Article 2, paragraph (1), item (i) of the Consumption Tax Act; the same applies in the following paragraph and paragraph (6)); provided, however, that this does not apply where there are unavoidable circumstances for the transfer or acquisition of those tax-exempt goods and the approval of the district director having jurisdiction over the place where those tax-exempt goods are located has been obtained.

When tax-exempt goods prescribed in the preceding paragraph have been transferred or acquired in Japan, the district director immediately collects consumption tax equivalent to the amount of consumption tax exempted under the provisions of paragraph (1) for the transfer of those tax-exempt goods, from the person that has obtained the approval referred to in the proviso to that paragraph, if there is such a person, or, if the transfer or acquisition has been made without that approval, from the person that transferred those tax-exempt goods (including a person that had them possessed as prescribed in the main clause of that paragraph; the same applies in the following paragraph); provided, however, that this does not apply where facts falling under the case prescribed in the main clause of paragraph (2) have already arisen or where consumption tax has already been collected through the application of the provisions of the main clause of paragraph (3).

Where tax-exempt goods prescribed in paragraph (4) have been transferred or acquired in Japan without the approval referred to in the proviso to that paragraph, the person that acquired those tax-exempt goods (including a person that possessed them as prescribed in the main clause of that paragraph) is obligated to pay, jointly with the person that transferred those tax-exempt goods, consumption tax equivalent to the amount of consumption tax exempted under the provisions of paragraph (1) for the transfer of those tax-exempt goods. In this case, the provisions of the preceding paragraph apply mutatis mutandis to the collection of the consumption tax.

The place for tax payment of consumption tax on the transfer of tax-exempt goods falling under the provisions of the main clause of paragraph (3) is to be the port of departure, or the location of the domicile or residence, prescribed in that paragraph.

The place for tax payment of consumption tax on the transfer of tax-exempt goods falling under the provisions of the main clause of paragraph (5) or paragraph (6) is to be the place where the tax-exempt goods pertaining to that transfer or acquisition or that approval are located at the time when the transfer or acquisition prescribed in those provisions was made (or, where the approval referred to in the proviso to paragraph (4) was given, at the time of that approval).

Where a person has, in violation of the provisions of the main clause of paragraph (4), transferred or acquired tax-exempt goods prescribed in that paragraph without obtaining the approval referred to in the proviso to that paragraph, the person who committed that violation is punished by imprisonment for one year or less or a fine of 500,000 yen or less.

When the representative of a corporation (including an association or foundation without juridical personality (meaning an association or foundation without juridical personality as prescribed in Article 2, paragraph (1), item (vii) of the Consumption Tax Act; hereinafter the same applies in this paragraph and the following paragraph); hereinafter the same applies in this paragraph) (such representative includes the administrator of an association or foundation without juridical personality), or an agent, employee, or other worker of a corporation or individual has committed a violation set forth in the preceding paragraph with regard to the business or property of the corporation or individual, not only the offender is punished but also the corporation or individual is punished by the fine prescribed in the paragraph.

Where the provisions of the preceding paragraph applies to an association or foundation without juridical personality, its representative or administrator represent the association or foundation without juridical personality with regard to its procedural acts, and the legal provisions concerning criminal proceedings that are applicable in the case where a corporation stands as the defendant or the suspect apply mutatis mutandis.