Supplementary Provisions, Article 35-3-3Special Provisions on Calculation of Income for Prefectural Inhabitant Tax and Municipal Inhabitant Tax Concerning Transfer of Listed Shares, etc. in a Minor's Account

①Where a person liable for the income levy of prefectural inhabitant tax has, in the previous year, made, under a contract for management of a minor's account prescribed in Article 37-14-2, paragraph (5), item (ii) of the Act on Special Measures Concerning Taxation (hereinafter in this Article referred to as "contract for management of a minor's account"), a transfer of listed shares, etc. in a minor's account prescribed in the items of paragraph (1) of that Article (hereinafter in this Article referred to as "listed shares, etc. in a minor's account"), the person is to calculate, as provided for by Cabinet Order, the amount of business income, amount of capital gains or amount of miscellaneous income arising from the transfer of those listed shares, etc. in a minor's account, separately from the amount of business income, amount of capital gains or amount of miscellaneous income arising from the transfer of listed shares, etc. other than those listed shares, etc. in a minor's account.

②Where, by reason of a cause set out in the items of Article 37-14-2, paragraph (4) of the Act on Special Measures Concerning Taxation, part or all of the listed shares, etc. in a minor's account has been withdrawn (including withdrawal by book transfer; the same applies hereinafter in this Article) from a tax-exempt management account prescribed in paragraph (5), item (iii) of that Article (hereinafter in this Article referred to as "tax-exempt management account") or a continuing management account prescribed in item (iv) of that paragraph (hereinafter in this Article referred to as "continuing management account"), the listed shares, etc. in a minor's account that have been withdrawn are deemed to have been transferred under a contract for management of a minor's account, at the time the cause arose, for the amount specified by Cabinet Order as the value at that time (hereinafter in this Article referred to as the "amount at the time of withdrawal"), a person liable for the income levy of prefectural inhabitant tax who has opened, or had opened, a minor's account in which there is established the tax-exempt management account or continuing management account from which listed shares, etc. in a minor's account were withdrawn through the transfer of custody or return set out in paragraph (4), item (i) of that Article or the closing set out in item (iii), (a) of that paragraph is deemed to have acquired, at the time of the withdrawal through that transfer of custody, return or closing, shares, etc. of the same class as those listed shares, etc. in a minor's account, in a number equal to the number of those listed shares, etc. in a minor's account withdrawn through that transfer of custody, return or closing, for the amount at the time of withdrawal, and a person liable for the income levy of prefectural inhabitant tax who has acquired listed shares, etc. in a minor's account withdrawn through the inheritance or bequest set out in item (ii) of that paragraph or the gift set out in item (iii), (b) of that paragraph is deemed to have acquired, at the time of that inheritance, bequest or gift, shares, etc. of the same class as those listed shares, etc. in a minor's account, for the amount at the time of withdrawal, respectively, and the provisions concerning prefectural inhabitant tax, including those of the preceding paragraph and Article 35-2, paragraphs (1) through (4) of the Supplementary Provisions, apply.

③Where an event of non-performance of contract, etc. arises, by December 31 of the year preceding the base year prescribed in Article 37-14-2, paragraph (4), item (iii) of the Act on Special Measures Concerning Taxation or by December 31, 2023, whichever is earlier, with respect to a person liable for the income levy of prefectural inhabitant tax who opens a minor's account and a taxable minor's account prescribed in paragraph (5), item (v) of that Article (referred to as "taxable minor's account" in paragraph (8)), the provisions concerning prefectural inhabitant tax apply as provided for in the following. In this case, the amount of business income, amount of capital gains and amount of miscellaneous income arising from the transfer of listed shares, etc. in a minor's account under the provisions of items (i) through (iii) are to be calculated, as provided for by Cabinet Order, separately from the amount of business income, amount of capital gains and amount of miscellaneous income arising from the transfer of shares, etc. other than those listed shares, etc. in a minor's account:

④In the case of the preceding paragraph, where the revenue relating to the listed shares, etc. in a minor's account that are deemed to have been transferred pursuant to the provisions of items (i) through (iii) of that paragraph is less than the total of the acquisition cost of those listed shares, etc. in a minor's account calculated in accordance with the rules of Article 33, paragraph (3) of the Income Tax Act and the amount of expenses required for their transfer, or less than the necessary expenses relating to their transfer, the shortfall is deemed not to exist for the purpose of applying the provisions of laws and regulations concerning prefectural inhabitant tax.

⑤Necessary particulars relevant to the application of the provisions of each of the preceding paragraphs are specified by Cabinet Order.

⑥Where a person liable for the income levy of municipal inhabitant tax has, in the previous year, made a transfer of listed shares, etc. in a minor's account under a contract for management of a minor's account, the person is to calculate, as provided for by Cabinet Order, the amount of business income, amount of capital gains or amount of miscellaneous income arising from the transfer of those listed shares, etc. in a minor's account, separately from the amount of business income, amount of capital gains or amount of miscellaneous income arising from the transfer of listed shares, etc. other than those listed shares, etc. in a minor's account.

⑦Where, by reason of a cause set out in the items of Article 37-14-2, paragraph (4) of the Act on Special Measures Concerning Taxation, part or all of the listed shares, etc. in a minor's account has been withdrawn from a tax-exempt management account or continuing management account, the listed shares, etc. in a minor's account that have been withdrawn are deemed to have been transferred under a contract for management of a minor's account, at the time the cause arose, for the amount at the time of withdrawal, a person liable for the income levy of municipal inhabitant tax who has opened, or had opened, a minor's account in which there is established the tax-exempt management account or continuing management account from which listed shares, etc. in a minor's account were withdrawn through the transfer of custody or return set out in item (i) of that paragraph or the closing set out in item (iii), (a) of that paragraph is deemed to have acquired, at the time of the withdrawal through that transfer of custody, return or closing, shares, etc. of the same class as those listed shares, etc. in a minor's account, in a number equal to the number of those listed shares, etc. in a minor's account withdrawn through that transfer of custody, return or closing, for the amount at the time of withdrawal, and a person liable for the income levy of municipal inhabitant tax who has acquired listed shares, etc. in a minor's account withdrawn through the inheritance or bequest set out in item (ii) of that paragraph or the gift set out in item (iii), (b) of that paragraph is deemed to have acquired, at the time of that inheritance, bequest or gift, shares, etc. of the same class as those listed shares, etc. in a minor's account, for the amount at the time of withdrawal, respectively, and the provisions concerning municipal inhabitant tax, including those of the preceding paragraph and Article 35-2, paragraphs (5) through (8) of the Supplementary Provisions, apply.

⑧Where an event of non-performance of contract, etc. arises, by December 31 of the year preceding the base year prescribed in Article 37-14-2, paragraph (4), item (iii) of the Act on Special Measures Concerning Taxation or by December 31, 2023, whichever is earlier, with respect to a person liable for the income levy of municipal inhabitant tax who opens a minor's account and a taxable minor's account, the provisions concerning municipal inhabitant tax apply as provided for in the following. In this case, the amount of business income, amount of capital gains and amount of miscellaneous income arising from the transfer of listed shares, etc. in a minor's account under the provisions of items (i) through (iii) are to be calculated, as provided for by Cabinet Order, separately from the amount of business income, amount of capital gains and amount of miscellaneous income arising from the transfer of shares, etc. other than those listed shares, etc. in a minor's account:

⑨In the case of the preceding paragraph, where the revenue relating to the listed shares, etc. in a minor's account that are deemed to have been transferred pursuant to the provisions of items (i) through (iii) of that paragraph is less than the total of the acquisition cost of those listed shares, etc. in a minor's account calculated in accordance with the rules of Article 33, paragraph (3) of the Income Tax Act and the amount of expenses required for their transfer, or less than the necessary expenses relating to their transfer, the shortfall is deemed not to exist for the purpose of applying the provisions of laws and regulations concerning municipal inhabitant tax.

⑩Cabinet Order provides for the necessary particulars concerning the application of the provisions of paragraph (6) through the preceding paragraph.