①If a Tax Return is filed which indicates any of the amounts set forth in Article 122, paragraph (1), item (i) or item (ii) (Filing a Return to Receive a Refund) or Article 123, paragraph (2), item (vi) or item (vii) (Filing Tax Returns Showing Losses), the district director refunds an amount of income taxes equivalent thereto to the person filing the return.

②In a case as referred to in the preceding paragraph, if any part of the tax withheld as prescribed in Article 122, paragraph (1), item (ii) or Article 123, paragraph (2), item (vii) which is indicated in a Tax Return as referred to in the preceding paragraph has not yet been paid over to the national government, an amount equivalent to the part of the refund under the preceding paragraph which is from tax withheld that has not yet been paid over is not refunded until that part of the tax withheld is paid over.

③When the amount of Interest on a refund under paragraph (1) is calculated, the period referred to in Article 58, paragraph (1) (Interest on Refunds) of the Act on General Rules for National Taxes which serves as the basis for the calculation is the period beginning on the day after the day that is set forth in each of the following items for the category of case set forth in the item (or beginning on the day after that on which any tax withheld that is subject to a refund as prescribed in the preceding paragraph is paid over to the national government, if this is after the date set forth in the relevant item), and ending on the day on which the tax-office decision to pay the refund is reached or on the day on which the refund is Appropriated to cover a required tax payment (or ending on the day on which the refund first could have been Appropriated, if this is before the date of the Appropriation):

④If a refund under paragraph (1) is Appropriated to cover unpaid income taxes in the year of the Tax Return referred to in that paragraph, Refund Interest does not accrue on the part of the refund so Appropriated and the tax on delinquency is waived for the part of the income taxes covered by the Appropriation.

⑤Beyond what is prescribed in the preceding three paragraphs, Cabinet Order provides for the procedures for issuing a refund as referred to in paragraph (1), the way of Appropriating a refund under that paragraph (and Interest thereon), and other necessary particulars concerning the application of the provisions of that paragraph.

①If a Tax Return is filed which indicates an amount set forth in Article 122, paragraph (1), item (iii) (Filing a Return to Receive a Refund) or Article 123, paragraph (2), item (viii) (Filing Tax Returns Showing Losses), the district director refunds the part of the prepaid taxes prescribed in those provisions which is equivalent to that amount (hereinafter referred to in this Article as "prepaid taxes") to the person filing the return.

②If the district tax office director issues a refund under the preceding paragraph and the taxpayer has paid a tax on delinquency in respect of prepaid taxes in the year of the Tax Return referred to in that paragraph, the director also refunds the amount calculated pursuant to Cabinet Order as the part of the tax on delinquency which was for the prepaid taxes that are being refunded pursuant to that paragraph.

③When the amount of Interest on a refund under paragraph (1) is calculated, the period referred to in Article 58, paragraph (1) (Interest on Refunds) of the Act on General Rules for National Taxes which serves as the basis for the calculation is the period beginning on the day after that on which prepaid taxes that are required to be refunded pursuant to the provisions of paragraph (1) are paid (or beginning on the day after the payment due date, if the prepaid taxes are paid prior to the payment due date) and ending on the day on which the tax-office decision to pay the refund is reached or on the day on which the refund is Appropriated to cover a required tax payment (or ending on the day on which the refund first could have been Appropriated, if this is before the date of the Appropriation); provided, however, that if a Tax Return as referred to in that paragraph is filed after the Filing Deadline, none of the days from the day after the Filing Deadline up to the day on which the Tax Return is filed are included as part of that period.

④If a refund under paragraph (1) is Appropriated to cover unpaid income taxes for a year in which prepaid taxes are used as the basis for calculating the amount of the refund, Refund Interest does not accrue on the part of the refund so Appropriated and the tax on delinquency is waived for the part of the income taxes covered by the Appropriation.

⑤Interest does not accrue on a refund under the provisions of paragraph (2).

⑥Beyond what is prescribed in the preceding three paragraphs, Cabinet Order provides for procedures for issuing a refund as referred to in paragraph (1) or paragraph (2), the way of Appropriating a refund under paragraph (1) (and Interest thereon) and other necessary particulars concerning the application of the provisions of that paragraph or paragraph (2).

①If a Resident filing a Blue Return incurs a Net Loss in the year, the Resident may file a claim with the competent district tax office director for the locality in which the Resident pays taxes, seeking to be issued an income tax refund in an amount equivalent to what is arrived at when the amount set forth in item (ii) is deducted from the amount set forth in item (i), at the time of filing the return:

②In a case as referred to in the preceding paragraph, if the amount of income taxes equivalent to what is arrived at when the deduction prescribed in that paragraph is made exceeds the amount of income taxes (less any Punitive Tax) on the previous year's taxable gross income, taxable retirement income, and taxable timber income, the limit of the amount for which the Resident may file a claim to be issued a refund as referred to in that paragraph is the latter amount of income taxes.

③Cabinet Order makes provisions for when the amount set forth in paragraph (1), item (ii) is calculated, specifying which, among the taxable gross income, taxable retirement income, and taxable timber income referred to in the item, is the first amount from which the Net Loss is deducted; and specifying which, out of either the average taxable amount prescribed in Article 90, paragraph (3) or the amount arrived at when the average taxable amount is deducted from taxable gross income, is the first amount from which the Net Loss is deducted in the event that Article 90 (Averaging Taxation on Fluctuating Income and Ad Hoc Income) was applied in the previous year.

④The provisions of paragraph (1) apply only if the Resident referred to in that paragraph filed a Blue Return for income taxes in the previous year and files a Blue Return for the relevant year by the deadline for filing it (or after the deadline for filing the return, if the district tax office director finds there to be compelling circumstances for allowing this).

⑤If a Resident undergoes a full business transfer or closure or is affected by any other facts equivalent to this which are specified by Cabinet Order after having incurred a Net Loss in the year before that in which the day of occurrence of the relevant facts falls (this Net Loss excludes any amount deducted in the year in which that day falls pursuant to the provisions of Article 70, paragraph (1) (Deduction for Carryover of Net Loss), and excludes any amount used as the basis for calculating the amount to be refunded pursuant to Article 142, paragraph (2) (Issuance of Refunds Based on Carryback of Net Loss)), the Resident may file a claim with the competent district tax office director for the locality in which the Resident pays taxes, seeking to be issued an income tax refund in an amount equivalent to what is calculated for the Net Loss pursuant to Cabinet Order and in accordance with the provisions of paragraphs (1) through (3), by the income tax Filing Deadline for the year in which that day falls, but only if the person has filed a Blue Return for income taxes for the year before that in which that day falls and for the year before that.

①If a Net Loss arises in a year for which a person is required to file a return (but only a Blue Return) as prescribed in Article 125, paragraph (1), paragraph (3), or paragraph (5) (Filing a Tax Return If the Taxpayer Has Died Partway Through the Year), the person filing the return may file a claim with the competent district tax office director for the locality in which the income taxes indicated in the return are paid, seeking to be issued an income tax refund in the amount equivalent to what is arrived at when the amount set forth in item (ii) is deducted from the amount set forth in item (i), at the time of filing that return and pursuant to Cabinet Order:

②Paragraph (2) and paragraph (3) of the preceding Article apply mutatis mutandis to a case as referred to in the preceding paragraph.

③Paragraph (1) applies only if the Resident dying as prescribed in item (i) of that paragraph filed a Blue Return for the previous year's income taxes and the person filing the return prescribed in that paragraph files the return by the deadline for filing it (or after the deadline for filing the return, if the district tax office director finds there to be compelling circumstances for allowing this).

④If a Resident who has died incurred a Net Loss in the year prior to the one in which the date of the Resident's death falls (this Net Loss excludes any amount deducted in the year in which that date falls pursuant to Article 70, paragraph (1) (Deduction for Carryover of Net Loss), and excludes any amount used as the basis for calculating the amount to be refunded pursuant to paragraph (2) of the following Article), the Resident's heir may file a claim with the competent district tax office director for the locality in which the income taxes in the relevant year were paid pursuant to Cabinet Order, seeking to be issued a refund in an amount equivalent to what is calculated in accordance with paragraph (1) and paragraph (2) for that Net Loss, by the income tax Filing Deadline for the year in which the date of the Resident's death falls, but only if a Blue Return was filed for income taxes for the year prior to that in which the date of the Resident's death falls and the year before that.