Article 137-2Tax Payment Grace Period Where the Special Provisions on Capital Gains and Similar Income upon Departure from Japan Apply

①With regard to the part of the income tax for the year that includes the date of a departure from Japan as prescribed in Article 60-2, paragraph (1) (Special Provisions on Capital Gains and Similar Income upon Departure from Japan) (hereinafter referred to as a "departure from Japan" in this Article) that is payable pursuant to the provisions of Article 128 (Payment upon Filing) or Article 129 (Payment upon Filing in the Event of the Taxpayer's Death) by a Resident who makes the departure from Japan and to whom those provisions have been applied with regard to Securities and similar interests as prescribed in that paragraph that the Resident holds at the time of the departure from Japan, or unsettled margin transactions or similar transactions as prescribed in Article 60-2, paragraph (2) or unsettled derivatives transactions as prescribed in paragraph (3) of that Article for which the Resident has concluded contracts (hereinafter referred to as "covered assets" in this paragraph and paragraph (3)) (including the Resident's heir), the income tax equivalent to the income tax subject to deferral (meaning the amount obtained by deducting the amount set forth in item (ii) from the amount set forth in item (i); the same applies hereinafter in this Article) for those covered assets (limited to those that the Resident continues to hold, or has not settled, until the Filing Deadline for the income tax for that year; hereinafter referred to as "applicable assets" in this paragraph, paragraph (5), and paragraph (6)) is granted a tax payment grace period, notwithstanding the provisions of Article 128 or Article 129, from the date of the departure from Japan until the day on which four months have elapsed from the day after the reference expiry date (meaning the day on which five years have elapsed from the date of the departure from Japan or the date on which the Resident comes to fall under a case of return to Japan or similar case (meaning a case set forth in Article 60-2, paragraph (6), item (i) or item (iii) or any other case specified by Cabinet Order; the same applies in the following paragraph), whichever comes first; the same applies in paragraph (5)), but only if the Resident has given notification of a tax agent under Article 117, paragraph (2) (Tax Agents) of the Act on General Rules for National Taxes by the time of the departure from Japan and has provided collateral equivalent to the income tax subject to deferral by the Filing Deadline for the income tax for that year, pursuant to Cabinet Order.

②If an individual to whom the preceding paragraph applies submits to the competent district director for the locality in which the individual pays taxes, by the day on which five years have elapsed from the date of the departure from Japan (or by the day before the date on which the individual comes to fall under a case of return to Japan or similar case, if the individual comes to fall under such a case before that day), a paper-based notification giving a statement that the individual seeks an extension of the time limit of the tax payment grace period under that paragraph and other information prescribed by Ministry of Finance Order, the term "five years" in that paragraph is deemed to be replaced with "10 years".

③Paragraph (1) (including when it is applied pursuant to the preceding paragraph; the same applies hereinafter in this Article) applies only if the Tax Return of the individual seeking to have paragraph (1) applied states that the individual seeks to have that paragraph applied, and is accompanied by a document giving details of the transfer or settlement of covered assets deemed to have been carried out pursuant to the provisions of Article 60-2, paragraphs (1) through (3), details concerning the calculation of the income tax subject to deferral, and other information prescribed by Ministry of Finance Order.

④Even if the Tax Return referred to in the preceding paragraph is not filed, or a Tax Return is filed without the statement or document referred to in that paragraph, the district director may apply paragraph (1) if the district director finds that there were unavoidable circumstances for the failure to file the return or to include the statement or document, but only if a document giving that statement and the document prescribed by Ministry of Finance Order referred to in that paragraph are submitted.

⑤If, by the reference expiry date for the tax payment grace period under paragraph (1), an individual to whom that paragraph is being applied transfers (including any act specified by Cabinet Order as similar to a transfer; the same applies in paragraph (6) of the following Article) or settles applicable assets that the individual held at the time of the departure from Japan, or transfers them by gift, or any other event specified by Cabinet Order occurs, then, notwithstanding paragraph (1), with regard to the income tax equivalent to the amount calculated pursuant to Cabinet Order as the part of the income tax subject to deferral for the applicable assets for which the event occurred that corresponds to those applicable assets, the time limit of the tax payment grace period under that paragraph is the day on which four months have elapsed from the date on which the event occurred.

⑥An individual to whom paragraph (1) applies must submit to the competent district director for the locality in which the individual pays taxes a paper-based notification (hereinafter referred to as a "notification of continued application" in the following paragraph through paragraph (10)) giving a statement that the individual seeks to continue to have paragraph (1) applied to the applicable assets that the individual holds or for which the individual has concluded contracts as of December 31 of each year in the period from the Filing Deadline for the income tax for the year that includes the date of the departure from Japan to which that paragraph is applied until the day on which the time limit of the tax payment grace period under that paragraph, the preceding paragraph, paragraph (8), or paragraph (9) is fixed for the whole of the income tax equivalent to the income tax subject to deferral, and other information prescribed by Ministry of Finance Order, by March 15 of the year following the year that includes that December 31 (hereinafter referred to as the "submission deadline" in the following paragraph through paragraph (10)).

⑦Even if a notification of continued application is not submitted by the submission deadline, if the district director referred to in the preceding paragraph finds that there were unavoidable circumstances for its not having been submitted by the submission deadline, the notification of continued application is deemed to have been submitted by the submission deadline, but only if it is submitted.

⑧If a notification of continued application is not submitted to the competent district director for the locality in which the taxpayer pays taxes by the submission deadline, then, notwithstanding paragraph (1), with regard to the income tax equivalent to the income tax subject to deferral as of the submission deadline (excluding, if paragraph (5) has already been applied, the amount to which that paragraph was applied; the same applies in the following paragraph), the time limit of the tax payment grace period under paragraph (1) is the day on which four months have elapsed from the submission deadline (or, if the individual liable for that income tax dies during the period from the submission deadline to the day on which those four months elapse, the day on which six months have elapsed from the day on which the individual's heir learns of the commencement of the succession due to the individual's death).

⑨The district director may advance the time limit of the tax payment grace period under paragraph (1) for the income tax equivalent to the income tax subject to deferral in any of the following cases. In such a case, the provisions of Article 49, paragraph (2) and paragraph (3) (Revocation of Tax Payment Grace Period) of the Act on General Rules for National Taxes apply mutatis mutandis.

⑩The prescription of the national government's right to collect the income tax equivalent to the income tax subject to deferral, and the tax levied as interest and tax on delinquency on that income tax, is not completed during the period from the time the notification of continued application is submitted until the submission deadline for that notification, and begins to run anew from the day after that submission deadline, except where Article 73, paragraph (4) (Suspension of Completion and Renewal of Prescription) of the Act on General Rules for National Taxes, as applied with the replacement of terms pursuant to item (iv) of the following paragraph, applies.

⑪The provisions of this Act, the Act on General Rules for National Taxes, and the National Tax Collection Act (Act No. 147 of 1959) apply as follows if the individual referred to in paragraph (1) seeks to have that paragraph applied, or if a tax payment grace period has been granted under that paragraph:

⑫If an individual to whom paragraph (1) applies falls under any of the cases set forth in the following items, the individual must pay a tax levied as interest in an amount equivalent to that arrived at when the amount equivalent to the income tax prescribed in the relevant item is multiplied by an annual rate of 7.3%, based on the number of days in the period from the day after the payment due date under Article 128 or Article 129 for that income tax up to the time limit of the tax payment grace period specified in the relevant item, along with the income tax prescribed in the relevant item:

⑬If a person who has made a departure from Japan to which paragraph (1) applies dies by the time limit of the tax payment grace period to which that paragraph applies, the obligation to pay the income tax subject to deferral for the person who has made the departure from Japan is succeeded to by that person's heir. In such a case, necessary matters are specified by Cabinet Order.

⑭Beyond what is provided for in paragraph (3) through the preceding paragraph, necessary matters concerning the application of paragraph (1) are specified by Cabinet Order.