Article 127Rescission of Approval to File a Blue Return

①In the case where there is any fact falling under the following items with regard to a domestic corporation which has obtained approval set forth in Article 121, paragraph (1) (Blue Returns), the competent district director with jurisdiction over the place for tax payment may rescind the approval retroactively to the business year specified in the relevant item. In this case, when the approval has been rescinded, the Blue Return related to the approval that the domestic corporation submitted on or after the first day of the business year (excluding a Blue Return for corporation tax which the domestic corporation had become obliged to pay prior to the day) is deemed to be a return other than a Blue Return:

②The district director of the tax office , when rescinding approval pursuant to the provisions of the preceding paragraph, notifies the domestic corporation set forth in the paragraph to that effect, in writing. In this case, the district director of the tax office must in addition, enter in the written notice, which of the items of the paragraph was the cause of the rescission.

③With regard to the application of the provisions of paragraph (1) to a group tax sharing corporation, the phrase "rescind the approval retroactively to the business year specified in the relevant item" in that paragraph is deemed to be replaced with "rescind the approval"; the phrase "the Blue Return related to the approval that the domestic corporation submitted on or after the first day of the business year (excluding a Blue Return for corporation tax which the domestic corporation had become obliged to pay prior to the day) is deemed to be a return other than a Blue Return" is deemed to be replaced with "the approval ceases to be effective with regard to each business year on or after the business year containing the day preceding the day on which the domestic corporation received the notice set forth in the following paragraph pertaining to the disposition of the rescission (or, in the case where that preceding day is the last day of a business year of the group tax sharing parent corporation of the domestic corporation, the day on which it received the notice)"; and the phrase "the district director of the tax office given pursuant to the provisions of paragraph (2) of the preceding Article" in item (ii) of that paragraph is deemed to be replaced with "the Commissioner of the National Tax Agency, the regional commissioner, or the district director of the tax office given pursuant to the provisions of paragraph (2) or paragraph (3) of the preceding Article".

④With regard to the application of the provisions of paragraph (1) to a domestic corporation that was a group tax sharing corporation, the phrase "the business year specified in the relevant item" in that paragraph is deemed to be replaced with "the business year specified in the relevant item (or, in the case where that business year is a business year before the business year containing the day preceding the day on which the approval under the provisions of Article 64-9, paragraph (1) (Group Tax Sharing Approval) ceased to be effective (or, in the case where that preceding day is the last day of a business year of the group tax sharing parent corporation of the domestic corporation, the day on which the approval ceased to be effective) (hereinafter referred to as the 'business year of lapse' in this paragraph), the business year of lapse)"; and the phrase "the district director of the tax office given pursuant to the provisions of paragraph (2) of the preceding Article" in item (ii) of that paragraph is deemed to be replaced with "the Commissioner of the National Tax Agency, the regional commissioner, or the district director of the tax office given pursuant to the provisions of paragraph (2) or paragraph (3) of the preceding Article".