Supplementary Provisions, Article 11Transitional Measures regarding Inclusion in Necessary Expenses of Non-Deductible Consumption Tax Amounts, etc. Pertaining to Assets

①The provisions of Article 182-2, paragraph (6) (Inclusion in Necessary Expenses of Non-Deductible Consumption Tax Amounts, etc. Pertaining to Assets) of the New Order apply to taxable purchases prescribed in Article 2, paragraph (1), item (xii) (Definitions) of the Consumption Tax Act (Act No. 108 of 1988) that an individual makes on or after October 1, 2023 and taxable goods prescribed in item (xi) of that paragraph that an individual takes delivery of on or after that date from a bonded area prescribed in item (ii) of that paragraph, and the provisions then in force continue to govern taxable purchases prescribed in item (xii) of that paragraph that an individual made before that date and taxable goods prescribed in item (xi) of that paragraph that an individual took delivery of before that date from a bonded area prescribed in item (ii) of that paragraph.

②With regard to the application of the provisions of Article 182-2 of the New Order to taxable purchases prescribed in Article 2, paragraph (1), item (xii) of the Consumption Tax Act that an individual makes during the period from October 1, 2019 through September 30, 2023 and taxable goods prescribed in item (xi) of that paragraph that an individual takes delivery of during the period from October 1, 2019 through September 30, 2023 from a bonded area prescribed in item (ii) of that paragraph, the phrase "2.2 percent" in Article 182-2, paragraph (6) of the New Order is deemed to be replaced with "2.2 percent (1.76 percent where the taxable purchase prescribed in Article 2, paragraph (1), item (xii) of the Consumption Tax Act pertaining to that amount of tax on taxable purchases, etc. pertains to a 2019 reduced-rate transfer, etc. of assets prescribed in Article 34, paragraph (1) (Transitional Measures Concerning Tax Rates, etc. for 2019 Reduced-Rate Transfers, etc. of Assets) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 15 of 2016; hereinafter referred to as the "2016 Amendment Act" in this paragraph) received from another person, and where the taxable goods prescribed in item (xi) of that paragraph pertaining to that amount of tax on taxable purchases, etc. fall under the food and beverages prescribed in Article 34, paragraph (1), item (i) of the Supplementary Provisions of the 2016 Amendment Act)", and the phrase "that Act" is deemed to be replaced with "the Consumption Tax Act".

③With regard to the application of the provisions of Article 182-2 of the New Order to income tax for a year for which an individual is subject to the application of the provisions of Article 52, paragraph (1) (Transitional Measures Concerning Tax Credit for Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 15 of 2016; hereinafter referred to as the "2016 Amendment Act" in the following paragraph) (including where applied by reading replaced pursuant to the provisions of Article 22, paragraph (3) or (4) (Transitional Measures Concerning the Calculation of Consumption Tax on Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the Cabinet Order Partially Amending the Order for Enforcement of the Consumption Tax Act, etc. (Cabinet Order No. 135 of 2018; hereinafter referred to as the "2018 Amending Order" in the following paragraph)), the phrase "Article 30, paragraph (2)" in Article 182-2, paragraph (5) of the New Order is deemed to be replaced with "Article 30, paragraph (2) (including where applied as deemed pursuant to the provisions of Article 52, paragraph (1) (Transitional Measures Concerning Tax Credit for Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 15 of 2016; hereinafter referred to as the "2016 Amendment Act" in this paragraph) (including where applied by reading replaced pursuant to the provisions of Article 22, paragraph (3) or (4) (Transitional Measures Concerning the Calculation of Consumption Tax on Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the Cabinet Order Partially Amending the Order for Enforcement of the Consumption Tax Act, etc. (Cabinet Order No. 135 of 2018; hereinafter referred to as the "2018 Amending Order" in the following paragraph); the same applies hereinafter in this paragraph); the same applies in the following paragraph)", the phrase "paragraph (1) of that Article" with "Article 30, paragraph (1) of the Consumption Tax Act (including where applied as deemed pursuant to the provisions of Article 52, paragraph (1) of the Supplementary Provisions of the 2016 Amendment Act; the same applies in the following paragraph)", and, in Article 182-2, paragraph (6) of the New Order, the phrase "1.76 percent where the taxable purchase prescribed in Article 2, paragraph (1), item (xii) of that Act pertaining to that amount of tax on taxable purchases, etc. pertains to a taxable transfer, etc. of assets subject to the reduced rate prescribed in item (ix)-2 of that paragraph received from another person, and where the taxable goods prescribed in item (xi) of that paragraph pertaining to that amount of tax on taxable purchases, etc. fall under taxable goods subject to the reduced rate prescribed in item (xi)-2 of that paragraph" with "1.76 percent where the taxable purchase prescribed in Article 2, paragraph (1), item (xii) of that Act pertaining to that amount of tax on taxable purchases, etc. pertains to a taxable transfer, etc. of assets subject to the reduced rate prescribed in item (ix)-2 of that paragraph received from another person, and where the taxable goods prescribed in item (xi) of that paragraph pertaining to that amount of tax on taxable purchases, etc. fall under taxable goods subject to the reduced rate prescribed in item (xi)-2 of that paragraph, 1 percent where the taxable purchase prescribed in item (xii) of that paragraph pertaining to that amount of tax on taxable purchases, etc. pertains to a transfer, etc. of assets under the 2014 transitional measures prescribed in Article 7, paragraph (2) (Transitional Measures Concerning the Calculation of Consumption Tax on Taxable Purchases Pertaining to Taxable Transfers, etc. of Assets to Which the Former Tax Rate Applied) of the Supplementary Provisions of the 2018 Amending Order received from another person, and 1.7 percent where the taxable purchase prescribed in that item pertaining to that amount of tax on taxable purchases, etc. pertains to a transfer, etc. of assets under the 2019 transitional measures prescribed in paragraph (3) of that Article received from another person".

④With regard to the application of the provisions of Article 182-2 of the New Order to income tax for a year for which an individual is subject to the application of the provisions of Article 53, paragraph (1) (Transitional Measures Concerning Tax Credit for Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the 2016 Amendment Act (including where applied by reading replaced pursuant to the provisions of Article 23, paragraph (3) or (4) (Transitional Measures Concerning the Calculation of Consumption Tax on Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the 2018 Amending Order), the phrase "Article 30, paragraph (2)" in Article 182-2, paragraph (5) of the New Order is deemed to be replaced with "Article 30, paragraph (2) (including where applied as deemed pursuant to the provisions of Article 53, paragraph (1) (Transitional Measures Concerning Tax Credit for Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 15 of 2016; hereinafter referred to as the "2016 Amendment Act" in this paragraph) (including where applied by reading replaced pursuant to the provisions of Article 23, paragraph (3) or (4) (Transitional Measures Concerning the Calculation of Consumption Tax on Taxable Purchases Made from Persons Other Than Qualified Invoice Issuers) of the Supplementary Provisions of the Cabinet Order Partially Amending the Order for Enforcement of the Consumption Tax Act, etc. (Cabinet Order No. 135 of 2018; hereinafter referred to as the "2018 Amending Order" in the following paragraph); the same applies hereinafter in this paragraph); the same applies in the following paragraph)", the phrase "paragraph (1) of that Article" with "Article 30, paragraph (1) of the Consumption Tax Act (including where applied as deemed pursuant to the provisions of Article 53, paragraph (1) of the Supplementary Provisions of the 2016 Amendment Act; the same applies in the following paragraph)", and, in Article 182-2, paragraph (6) of the New Order, the phrase "1.76 percent where the taxable purchase prescribed in Article 2, paragraph (1), item (xii) of that Act pertaining to that amount of tax on taxable purchases, etc. pertains to a taxable transfer, etc. of assets subject to the reduced rate prescribed in item (ix)-2 of that paragraph received from another person, and where the taxable goods prescribed in item (xi) of that paragraph pertaining to that amount of tax on taxable purchases, etc. fall under taxable goods subject to the reduced rate prescribed in item (xi)-2 of that paragraph" with "1.76 percent where the taxable purchase prescribed in Article 2, paragraph (1), item (xii) of that Act pertaining to that amount of tax on taxable purchases, etc. pertains to a taxable transfer, etc. of assets subject to the reduced rate prescribed in item (ix)-2 of that paragraph received from another person, and where the taxable goods prescribed in item (xi) of that paragraph pertaining to that amount of tax on taxable purchases, etc. fall under taxable goods subject to the reduced rate prescribed in item (xi)-2 of that paragraph, 1 percent where the taxable purchase prescribed in item (xii) of that paragraph pertaining to that amount of tax on taxable purchases, etc. pertains to a transfer, etc. of assets under the 2014 transitional measures prescribed in Article 7, paragraph (2) (Transitional Measures Concerning the Calculation of Consumption Tax on Taxable Purchases Pertaining to Taxable Transfers, etc. of Assets to Which the Former Tax Rate Applied) of the Supplementary Provisions of the 2018 Amending Order received from another person, and 1.7 percent where the taxable purchase prescribed in that item pertaining to that amount of tax on taxable purchases, etc. pertains to a transfer, etc. of assets under the 2019 transitional measures prescribed in paragraph (3) of that Article received from another person".