Treaties, Laws and Speeches

Income Tax Law

Law No. 24 of March 29th of 1940 (15th Year of Syōwa)

Contents

Chapter 1—General Provisions
Chapter 2—Classified Income Tax
Chapter 3—Composite Income Tax
Chapter 4—Declaration, Application, Investigation and Decision
Chapter 5—Income Investigation Committee
Chapter 6—Examination, Petition and Administrative Litigation
Chapter 7—Collection
Chapter 8—Miscellaneous Provisions
Chapter 9—Penal Provisions

Chapter I — General Provisions

Article 1.

An individual domiciled or resident for more than one year within the area where the present law is in force shall be liable to pay income tax in accordance with the provisions of the present law.

Article 2.

If an individual not coming within the purview of the provisions of the preceding article falls under any of the following numbers, he shall be liable to pay income tax but only in respect of his incomes:

1. If he owns assets or enterprises within the territory where the present law is in force; 2. If he receives payment of interest on public loans, corporation debentures or deposits, or of profits by the joint-operation-trust, within the area where the present law is in force; 3. If he receives a share of profits or interest, or a distribution of surplus funds, from a juristic person with head office or principal place of business within the area where the present law is in force; 4. If he receives payment of salary, wages, annual allowance, compensation for expenses (limited to that which is paid in monthly or yearly sums, same context following), annuity (excluding the postal annuity, same context following), pension, bonus or retiring allowance or grants of the nature of those which have been referred to, within the area where the present law is in force.

Article 3.

A juristic person, if falling under any of the following numbers, shall be liable to pay income tax only in respect of its incomes:

1. If it receives payment of interest on public loans, corporation debentures or deposits, or of profits by the joint-operation-trust, within the area where the present law is in force; 2. If it receives a share of profits or interest, or a distribution of surplus funds, from a juristic person with head office or principal place of business within the area where the present law is in force.

Article 4.

No income tax shall be imposed on Hokkaido,¹ the prefectures, municipalities, towns, villages and other public bodies as designated by Ordinance; the same shall apply to shrines and the juristic persons established in accordance with the provisions of Article 34 of the Civil Code.

Article 5.

An individual who is engaged in the manufacture, mining or gathering of staple products as designated by Ordinance, will be exempted from income tax in respect of the incomes accruing from his enterprise for the initial year of its operation and the three years that follow, as prescribed by Ordinance.

Article 6.

With regard to incomes accruing from trust property, the beneficiary receiving the incomes as profits from such act of trust is to be deemed the person who owns the said trust property, and income tax is to be imposed on him as such; but this shall not apply in respect of the joint-operation-trust profits paid within the area where the present law is in force.

With regard to the application of the provisions of the preceding paragraph, the truster or his successor shall be deemed the beneficiary when no beneficiary is specified or when no beneficiary has come into existence as yet.

No income tax shall be imposed in respect of incomes accruing from property held in trust for the purpose of public benefit.

Article 7.

"Joint-operation-trust" within the meaning of the present law is the monetary trust which has been accepted by trust companies and which, while being the trust property of numerous trusters who do not act collectively, is put to joint operation.

¹ As an administrative entity.

Article 8.

The following amounts of money are deemed as shares of profits obtained from juristic persons and as such the present law shall apply to them:

1. When an amount of money the payment whereof is received on account of the redemption of shares, or an amount of money which is received by way of the refunding of one's own share on account of withdrawal from partnership or as a result of a reduction of capital investment, exceeds the paid-up amount of the shares concerned or the amount of the investments concerned, the excess amount; 2. When an amount of money which a shareholder or partner receives as a distribution of the remaining property in case of the dissolution of a juristic person, exceeds the paid-up amount of the shares concerned or the amount of the investments concerned, the excess amount; 3. When the paid-up amount of shares or the total amount of investments and the money which is acquired, in the case of the merger of juristic persons, by a shareholder or partner of the juristic person having ceased to exist as a result of the merger from the juristic person continuing to be in existence after the merger or established through the merger, exceeds the paid-up amount of the shares originally held, or the amount of the investments originally made, of the shareholder or partner, the excess amount.

Article 9.

The income tax shall be divided into two categories; that is, the classified income tax and the composite income tax.

Chapter II — Classified Income Tax

Article 10.

Classified income tax shall be imposed in respect of the following incomes:

Number one—Real property incomes:

Incomes accruing from the loaning of immovables, rights relating to immovables or ships (including the creation of emphyteusis or superficies and all other cases wherein other persons are allowed to use immovables, rights relating to immovables or ships, same context following), provided, however, that that which belongs to Class A business incomes shall be excluded;

Number two—Incomes from dividends and interest:

Class A: Interest on public bonds, corporation debentures or deposits (limited to deposits in juristic persons) and profits by the joint-operation-trust the payment whereof is received within the area where the present law is in force, as well as dividends of profit or interest or distribution of surplus funds received from a juristic person with head office or principal place of business within the area where the present law is in force;

Class B: Interest on non-business loans as well as interest on public bonds, corporation debentures or deposits, profits by the joint-operation-trust and dividends of profit or interest or distribution of surplus funds received from juristic persons, which do not belong to Class A;

Number three—Incomes from businesses:

Class A: Incomes from businesses enumerated below:

1. Business of selling commodities (including the selling of animals, plants and that which are not commonly called commodities); 2. Money-lending business; 3. Business of lending commodities (including the loaning of animals, plants and that which are not commonly called commodities); 4. Manufacturing business (including the supply of gas or electricity and the working-up or repairing of goods); 5. Transportation business, including the conduct of affairs relative to transportation or the acceptance of that which is to be transported);

6. Warehousing business; 7. Business of contractors; 8. Printing business; 9. Publishing business; 10. Photographing business; 11. Business of letting rooms; 12. Hotel business; 13. Restaurant business; 14. Employment agency business; 15. Business of agents; 16. Brokerage business; 17. Commission agency business; 18. Mining enterprises; 19. Placer-mining enterprises; 20. Public bath business; 21. Hair-dressing and/or beauty-culture business; 22. Other businesses as designated by Ordinance.

Class B: Incomes from farming, stock-raising, fishery, etc., incomes of physicians, lawyers, etc. and all other incomes which do not belong to other classes or items;

Number four—Earned incomes:

Class A: Salaries, wages, annual allowances, compensation for expenses, annuities, pensions (excluding the single-sum pension) and bonuses as well as allowances of the nature of those which have been referred to, provided, however, that the payment whereof is received from individuals as designated by Ordinance, shall be excluded;

Class B: Salaries, wages, annual allowances, compensation for expenses annuities, pensions (excluding the single-sum pension) and bonuses, and allowances of the nature of those which have been referred to, which do not belong to Class A;

Number five—Incomes from forests;

Number six—Retirement incomes;

Class A: Single-sum pension and retiring allowance as well as allowances of the nature of those which have been referred to, the payment whereof is received within the area where the present law is in force;

Class B: Single-sum pension and retiring allowance as well as allowances of the nature of those which have been referred to, which do not belong to Class A.

Article 11.

No classified income tax shall be imposed in respect of the incomes which come within the purview of any of the following numbers:

1. Salaries, allowances and bonuses of men in the fighting services or civilians attached thereto who are at the front;

2. Pensions of the wounded or the sick as well as pensions and annuities of bereaved families; 3. Travelling expenses, school expenses and legal allowances; 4. Interest on postal savings and interest on current deposits as designated by Ordinance; 5. Interest on savings deposited in a bank, the principal whereof does not exceed 3,000 yen, interest on deposits in a cooperative association and interest on other deposits as designated by Ordinance; 6. Any portion of Class B business income which is a temporary income other than that accruing from continual activity for the purpose of profit-making; 7. Incomes of a person who is not of Japanese nationality, which accrue from assets, businesses or occupations outside the area where the present law is in force.

The principal as referred to in Clause 5 of the preceding paragraph shall be calculated as prescribed by Ordinance.

Article 12.

Incomes which are subject to the imposition of classified income tax shall be calculated in accordance with the provisions of the following numbers:

1. As for real property incomes, an amount which is calculated by deducting necessary expenses (including interest on debts incurred in order to secure incomes, same context following) from the total amount of incomes during the preceding year; 2. As for Class A incomes from dividends and interest, the amount of payment to be received, provided, however, that it shall be an amount which is calculated by deducting one-tenth from the amount of payment to be received in the case of dividends of profit or interest or a distribution of surplus funds received from a juristic person; 3. As for Class B incomes from dividends and interest, the amount of incomes from March 1 of the preceding year up to the end of February of the year concerned in the case of dividends of profit or interest or distribution of surplus funds received from juristic persons, or the amount of incomes during the preceding year (in other cases in respect of dividends on uninscribed shares as well as interest on uninscribed public bonds and corporation debentures, the amount of payments received); 4. As for business incomes, an amount which is calculated by deducting necessary expenses from the total amount of incomes during the preceding year, provided, however, that it shall be an amount which is calculated on the basis of the average of the total amount of incomes minus necessary expenses for each of the preceding three years as prescribed by Ordinance in the case of incomes from fishery enterprises; 5. As for Class A earned incomes, the amount of payments to be received;

6. As for Class B earned incomes, the amount of incomes during the preceding year; 7. As for incomes from forests, an amount which is calculated by deducting necessary expenses from the total amount of incomes during the preceding year; 8. As for Class A retirement incomes, an amount which is calculated by deducting 10,000 yen per one payer from the amount of payments to be received; 9. As for Class B retirement incomes, an amount which is calculated by deducting 10,000 yen per one payer from the amount of incomes during the preceding year.

Income tax and excess profit tax shall not be included in the calculation of the necessary expenses as referred to in Numbers 1, 4 and 7 of the preceding paragraph.

The amount of excess profit tax on business profits is to be deducted from the amount of Class A business incomes for the year in which the said excess profit tax is to be imposed.

In cases where there are Class A business incomes which are subject to income tax and other Class A business incomes, the excess profit tax to be deducted in accordance with the provisions of the preceding paragraph shall be calculated as prescribed by Ordinance.

With regard to real property incomes, the incomes from dividends and interest and the incomes from forests, the incomes of the predecessor shall be deemed as the incomes of the successor; while in respect to assets or businesses which have been inherited, the successor shall be deemed as continuing to be in possession of the same, and the incomes concerned shall be calculated as such.

Article 13.

If a person other than the possessor of the principal receives payment of interest in respect of public bonds or corporation debentures, the possessor of the principal shall be deemed as the person receiving the said payment in the calculation of Class B incomes from dividends and interest, provided, however, that when changes occur in the possessors of the principal during the interest bearing period, the final possessor shall be deemed as the person receiving the payment of interest.

Article 14.

On real property incomes no classified income tax shall be imposed unless such incomes amount to 250 yen.

The real property incomes of the head of a house and of members of the house living with him shall be added together, and the provisions of the preceding paragraph shall apply in respect of the total amount; the same shall hold good in respect of the real property incomes of two or more members of the house who live separately from the head of the house.

Article 15.

On Class B incomes from dividends and interest no classified income tax

shall be imposed unless such incomes amount to 100 yen.

The provisions of Paragraph 2 of the preceding article shall apply with necessary modifications in respect of the preceding paragraph.

Article 16.

With regard to Class A earned incomes, an amount which has been calculated according to the period of payment of the remunerations at the rate of 720 yen per annum shall be deducted from the remunerations as prescribed by Ordinance.

In the case of a person who receives both a bonus and an allowance of the nature of a bonus and other remunerations from one and the same payer, the deduction as referred to in the preceding paragraph shall be made first in respect of remunerations other than the bonus or the allowance of the nature of a bonus, and if and when there is a deficit, be extended to the bonus or the allowance of the nature of a bonus, as prescribed by Ordinance.

With regard to a person who receives Class A earned incomes from two or more payers, the deduction as based on the provisions of the preceding two paragraphs shall be made as prescribed by Ordinance.

Article 17.

With regard to business incomes and Class B earned incomes, the following amounts of money shall be deducted from the incomes as prescribed by Ordinance:

1. In respect of business incomes 500 yen; 2. In respect of Class B earned incomes 720 yen.

No deduction in virtue of the provisions of Number 1 of the preceding paragraph shall be made in respect of business incomes of a person who has both business incomes and Class B earned incomes, provided, however, that an amount representing the difference between 500 yen and an amount corresponding to 5/7.2 [printed as a fraction, 5 over 7.2] of Class B earned incomes shall be deducted from business incomes, when Class B earned incomes amount to less than 720 yen, as prescribed by Ordinance.

Article 18.

With regard to business incomes or Class B earned incomes of a person who obtained a deduction in virtue of the provisions of Paragraph 1 of Article 16 during the preceding year in respect of Class A earned incomes, no deduction in virtue of the provisions of the preceding article shall be made, provided, however, that when the amount which was deducted in accordance with the provisions of Paragraph 1 of Article 16 during the preceding year in respect of Class A earned incomes is less than 720 yen, the following amounts of money shall be deducted from the incomes as prescribed by Ordinance:

1. An amount representing the difference between 500 yen and an

amount corresponding to 5/7.2 [printed as a fraction] of the amount deducted in accordance with the provisions of Paragraph 1 of Article 16, in the case of business incomes; 2. An amount representing the difference between 720 yen and the amount deducted in accordance with the provisions of Paragraph 1 of Article 16, in the case of Class B earned incomes; 3. An amount determined by Ordinance in respect of incomes in cases where there are incomes as referred to in the preceding two numbers.

Article 19.

In the case where the head of a house and two or more members of the house who live together have business incomes, the total of the amounts to be deducted from such incomes in accordance with the provisions of the preceding two articles shall not exceed 500 yen; the same shall hold good in respect of the business incomes of two or more members of the house who live together but apart from the head of the house.

In the case of the application of the provisions of the preceding paragraph, the amount to be deducted in accordance with the provisions of the preceding two articles shall be deducted from the incomes of one or several of the persons liable for the payment of taxes as prescribed by Ordinance.

Article 20.

With regard to incomes from forests, 500 yen shall be deducted from such incomes.

The provisions of the preceding article shall apply with necessary modifications in respect of the case in the preceding paragraph.

Article 21.

Classified income tax shall be imposed at the following rates:

Number one—Real property incomes: 10 per cent;

Number two—Incomes from dividends and interest:

Class A:

1. Interest on national bonds: 4 per cent; 2. Interest on public bonds other than national bonds: 9 per cent; 3. Others: 10 per cent;

Class B: 10 per cent;

Number three—Business incomes:

Class A: 8.5 per cent;

Class B: 7.5 per cent;

Number four—Earned incomes: 6 per cent;

Number five—Incomes from forests:

The amount of incomes shall be divided into the following grades and the varying rates shall be applied as follows:

Amount not exceeding 1,600 yen: 5 per cent:

Amount exceeding 1,600 yen: 7.5 per cent;

Number six—Retirement incomes:

The amount of incomes shall be divided into the following grades for each different payer and the corresponding rates of tax shall be applied as follows:

Amount not exceeding 20,000 yen: 6 per cent;
Amount exceeding 20,000 yen: 12 per cent;
Amount exceeding 100,000 yen: 25 per cent;
Amount exceeding 500,000 yen: 40 per cent.

With regard to interest on savings deposited in banks, deposits in cooperative associations and other deposits as designated by Ordinance and distribution of surplus funds received from juristic persons as designated by Ordinance, such as cooperative, industrial and commercial associations, the 10 per cent rate of tax as provided for in Number 3 of Class A incomes from dividend and interest of the preceding paragraph shall be changed to 5 per cent.

If the amount of business incomes, as it stands prior to the deduction in virtue of the provisions of Article 17 or Article 18, is less than 1,000 yen, the 8.5 per cent and 7.5 per cent rates of tax as provided for in Paragraph 1 in respect of Classes A and B business incomes shall each be changed to 6 per cent.

The business incomes of the head of a house and of members of the house who live together shall be added together, and the provisions of the preceding paragraph shall apply to the total; the same shall hold good in respect of the business incomes of two or more members of a house living together but apart from the head of the house.

Article 22.

Classified income tax on Class A incomes from dividends and interest of an individual who does not come within the purview of the provisions of Article 1 or a juristic person having no head office or principal place of business within the area where the present law is in force shall, notwithstanding the provisions of the preceding article, be imposed at the following rates:

1. Interest on national bonds: 9 per cent; 2. Interest on public bonds other than national bonds: 14 per cent; 3. Interest on deposits as provided for in Paragraph 2 of the preceding article and distribution of surplus funds: 10 per cent. 4. Others: 15 per cent.

Classified income tax on the bonus or allowance of the nature of a bonus which is paid by way of disposal of profits or surplus funds and which is received by an individual who does not come within the purview of the provisions of Article 1 from a juristic person having its head office or principal place of business within the area where the present law is in force shall, notwithstanding the provisions of the preceding article, be imposed at the rate of 15 per cent.

Article 23.

The amount of the classified income tax on Class A incomes from dividends and interest which a trust company has paid in respect of the trust property comprising the joint-operation-trust which it has accepted, shall be deducted, as prescribed by Ordinance, from the amount of the classified income tax on the profits accruing from the said trust.

Classified income tax on Class A incomes from dividends and interest which is to be deducted in the case of the preceding paragraph, shall be added to the profits accruing from the said joint-operation-trust in calculating Class A incomes from dividends and interest.

Article 24.

With regard to the classified income tax on Class A earned incomes, an amount of money corresponding to 8 per cent of an amount which has been calculated according to the period of payment of remunerations at the rate of 150 yen per annum for each member of a house actually being supported on January 1 of the year concerned shall be deducted from the amount of the classified income tax as prescribed by Ordinance.

In the case of a person receiving both a bonus or an allowance of the nature of a bonus and other remunerations from one and the same payer, the deduction as referred to in the preceding paragraph shall be made first in respect of the classified income tax on remunerations other than the bonus or the allowance of the nature of a bonus, and if and when there is a deficit, it shall be extended to the classified income tax on the bonus or the allowance of the nature of a bonus as prescribed by Ordinance.

With regard to a person who receives Class A earned incomes from two or more payers, the deduction in virtue of the provisions of the preceding two paragraphs shall be as prescribed by Ordinance.

In the case where a member of a house being supported, as referred to in Paragraph 1, has Class A earned incomes during the preceding year or has business incomes, Class B earned incomes or incomes from forests for the year concerned, no deduction in virtue of the provisions of Paragraph 1 shall be made in respect to the said member of the house being supported, if the total of the amounts for deduction from the incomes in accordance with the provisions of Paragraph 1 of Articles 16, 17 and 18 or Paragraph 1 of Article 20 exceeds 150 yen.

When the deduction in virtue of the provisions of Paragraph 1 of Article 25 is made in respect to a member of the house being supported as referred to in Paragraph 1, no deduction in virtue of the provisions of Paragraph 1 shall be made in respect to the said member of the house being supported.

When a person who has Class A earned incomes is a person subject to the imposition of the composite income tax, no deduction in virtue of the provisions of Paragraph 1 shall be made in respect of the remunerations received from July 1 of the year in which he is subject to the imposition up to June 30 of the following year.

Article 25.

With regard to classified income tax on real property incomes, business incomes, Class B earned incomes or income from forests, an amount corresponding to 8 per cent of 150 yen per one member of the house actually being supported on January 1 of the year concerned shall be deducted from the amount of the classified income tax as prescribed by Ordinance.

The provisions of Paragraph 4 of the preceding article shall apply with necessary modifications in respect of the preceding paragraph.

When the deduction in virtue of the provisions of Paragraph 1 of the preceding article is made in respect to a member of the house being supported as referred to in Paragraph 1, no deduction in virtue of the provisions of Paragraph 1 shall be made in respect to the said member of the house being supported.

Classified income tax on the head of a house and on members of the house living together shall be added together, and the provisions of Paragraph 1 shall apply in respect of the total; the same shall hold good in respect of the classified income tax on two or more members of a house who live together but apart from the head of the house.

The amount of money to be deducted in the case of the preceding paragraph shall be deducted from the classified income tax on one or several of the persons liable for the payment of taxes as prescribed by Ordinance.

When a person who has incomes as referred to in Paragraph 1 is a person subject to the imposition of the composite income tax, no deduction in virtue of the provisions of the said paragraph shall be made.

Article 26.

"A member of the house being supported" within the meaning of the present law is the wife who, belonging to the person with the incomes concerned, lives with him, or the head of the house or any member of the house who is 18 years of age and downward or 60 years of age and upward, or those crippled or disabled who are living with the said person.

The crippled or disabled persons as provided for in the preceding paragraph shall be prescribed by Ordinance.

Article 26 (2).

If there are insurance premiums which have been paid for a life insurance policy with the payer himself or his family or his successor as the beneficiary, an amount corresponding to 6 per cent of an amount prescribed by Ordinance within the limits of 200 yen per annum, out of the insurance premiums, shall be deducted from the amount of classified income tax on real property, business, earned or forestry incomes, as prescribed by Ordinance.

Article 27.

The provisions of Articles 24 and 25 and of the preceding article shall not apply in respect of a person liable for the payment of taxes in virtue of the provisions of Article 2.

Corrigendum

Volume III, No. 12, page 493, Income Tax Law (Chapter I). General Provisions, Article 2, No. 4, penultimate line:
For "retiring allowance or grants of the nature of . . ."
Read: retiring allowance or allowances of the nature of . . .

CHAPTER III

Article 28. Composite income tax shall be imposed in respect of gross incomes of individuals, provided, however, that in the case of an individual who does not come within the purview of the provisions of Article 1, the said income tax shall be imposed only in respect of incomes accruing from assets or businesses within the area where the present law is in force.

Article 29. No composite income tax shall be imposed in respect of incomes falling within the purview of the following numbers :

1. Incomes as referred to in Numbers 1 to 5 and Number 7 of Paragraph 1 of Article 11 ; 2. Temporary incomes other than those which have accrued from continual activity for the purpose of profit-making, as in the case of incomes referred to in Number 9 of Paragraph 1 of Article 30 ; 3. Single-sum pensions and retiring allowances as well as allowances of the nature of those which have been referred to.

Article 30. Gross incomes of individuals shall be calculated in accordance with the provisions of the following numbers :

1. In the case of incomes from the loaning of immovables, of rights relating to immovables or of ships, the amount of gross incomes during the preceding year minus necessary expenses ; 2. In cases of interest on public bonds, corporation debentures, deposits in banks, and deposits as provided for in Paragraph 2 of Article 21 as well as profits by the joint-operation-trust as designated by Ordinance, payment of which is received within the area where the present law is in force, the amount of income (in respect of interest on uninscribed public bonds and corporation debentures, the amount of payments received) during the preceding year minus 40 per cent of the amount ; 3. In cases of interest on public bonds, corporation debentures and deposits as well as profits by the joint-operation-trust other than those which are referred to in the preceding number, the amount of income (in respect of interest on uninscribed public bonds and corporation debentures, the amount of payments received) during the preceding year ; 4. In the case of interest on non-business loans, the amount of income during the preceding year minus the interest on debts incurred in

order to obtain the principal ; 5. In the case of dividends of profit or interest or distribution of surplus funds received from a juristic person, the amount of income (in respect of uninscribed shares, the amount of payments received) from March 1 of the preceding year up to the end of Febuary of the year concerned minus the interest on debts incurred in order to obtain the principal ; 6. In the case of incomes from forests, the amount of gross incomes during the preceding year minus necessary expenses ; 7. In the case of salaries, wages, annual allowances, compensation for expenses, annuities, pensions and bonuses or allowances of the nature of those which have been referred to, the amount of income during the preceding year ; 8. In the case of incomes accruing from fishery enterprises, an amount which has been calculated on the basis of the average of the amount of gross incomes minus necessary expenses for each of the preceding three years, as prescribed by Ordinance ; 9. In the case of incomes other than those which are referred to in the foregoing numbers, the amount of gross incomes during the preceding year minus necessary expenses.

Income tax and excess profit tax shall not be included in the calculation of the necessary expenses as referred to in Numbers 1, 6, 8 and 9 of the preceding paragraph.

The amount of excess profit tax on profits accruing from business shall be deducted from the amount of gross incomes for the year where the said excess profit tax shall be imposed.

The provisions of Paragraph 4 of Article 12 shall apply with necessary modifications in respect of excess profit tax as referred to in the preceding paragraph.

With regard to incomes as referred to in Numbers 1 to 6 of Paragraph 1, incomes of the predecessor shall be deemed as the incomes of the successor ; while with regard to incomes as referred to in Numbers 8 and 9, the assets or businesses which have been inherited shall be deemed as continuing to be in the possession of the successor, and the incomes concerned shall be calculated as such.

The provisions of Article 13 shall apply with necessary modifications in respect of the calculation of gross incomes of individuals.

Article 31. When the amount of gross incomes which has been calculated in accordance with the provisions of the preceding article does not exceed 10,000 yen, a deduction of one-tenth shall be made in respect of that portion of income which comes within the purview of Number 7 of Paragraph 1 of the said article.

Incomes of the head of the house and those of its members living with him shall be added together, and the provisions of the preceding paragraph shall apply in respect of the total ; the same shall hold good in respect of incomes of two or more members of a house who live together but apart from the head of the house.

Article 32. If the amount of gross income does not exceed 5,000 yen, no composite income tax shall be imposed ; the same shall hold good if the amount of gross income is less than 5,000 yen on account of a deduction made in virtue of the provisions of the preceding article.

Dividends of profit and incomes from forests and other incomes, as provided for in Article 8, shall be set apart from one another and the provisions of the preceding paragraph shall apply in respect of each division of incomes.

The provisions of Paragraph 2 of the preceding article shall apply with necessary modifications in respect of the preceding two paragraphs.

Article 33. Composite income tax shall be imposed by dividing the amount of gross income into the following grades and by applying the varying tax rates successively thereto ; provided, however, that dividends of profit and incomes from forests, as provided for in Article 8, shall each be set apart from other incomes and the amount of tax thereon shall be five times as much as the amount which has been calculated by applying a tax rate of 5 per cent to that portion of the amount representing one-fifth of the incomes concerned in case the said portion exceeds 1,000 yen but does not exceed 5,000 yen or by applying the tax rates as provided in the present paragraph in case the said portion exceeds 5,000 yen :

In the case of the preceding paragraph, the amount of gross incomes of the head of the house and those of its members living with him shall be added together and the amount of tax in respect of each of them shall be determined by dividing the amount which has been calculated by applying tax rates to the total in proportion to each amount of gross income ; the same shall hold good also in respect of the amount of gross income of the members of a house who live together but apart from the head of the house.

When there is a portion of gross income which is received from a juristic person as dividends of profit or interest or distribution of surplus funds and which has been deemed as Class A incomes from dividends and

interest and as such subjected to the imposition of classified income tax, the total of an amount which has been calculated by applying the provisions of the preceding two paragraphs to the amount of gross income and an amount corresponding to 1 per cent of the amount of income as the said dividends of profit or interest or said distribution of surplus funds (in respect to dividends on uninscribed shares, the amount of payments received) from March 1 of the preceding year up to the end of February of the year concerned shall be the amount of composite income tax on the gross income.

When there is a portion of distribution of surplus funds, as provided for in the preceding paragraph, which is obtained from a juristic person, as designated by Ordinance, such as a cooperative, an industrial or a commercial association, the rate of 1 per cent as provided for in the preceding paragraph shall be replaced by 0.5 per cent in respect of the amount of income of that portion.

CHAPTER IV

Declaration, Application, Investigation and Decision

Article 34. A person who is liable to pay classified income tax in respect of real property incomes, Class B incomes from dividends and interest, business incomes, Class B earned incomes, incomes from forests or Class B retirement incomes, or a person who is liable to pay composite income tax in respect of gross incomes of individuals shall report to the Government the kinds and amounts of income and other necessary matters by March 15 every year, as prescribed by Ordinance.

A person who desires to obtain a deduction in virtue of the provisions of Article 25 shall present a written application therefor as prescribed by Ordinance, simultaneously with the report referred to in the preceding paragraph.

Article 35. A person who has Class A earned incomes shall, as prescribed by Ordinance, make a declaration to the Government of necessary matters pertaining to the deduction in virtue of the provisions of Article 16.

A person who desires to obtain a deduction in virtue of the provisions of Article 24 shall present a written application therefore to the Government as prescribed by Ordinance.

Article 36. The amounts of real property income, Class B incomes from dividends and interest, business incomes, Class B earned incomes, incomes from forests and Class B retirement incomes as well as the amount of gross income of individuals shall be determined by the Government on the basis of an investigation made by the Income Investigation Committee.

If an omission has been found in respect of the decision of the amount of incomes as referred to in the preceding paragraph after the adjournment of the Income Investigation Committee, the amount of the incomes concerned may still be determined by the Government on the basis of an investigation made by the Income Investigation Committee for three years from the year following that in which the decision ought to have been made.

If, after the adjournment of the Income Investigation Committee, a person having an income as referred to in Paragraph 1 has reported that he is liable to pay tax or a person who is liable to pay tax has reported that there has been an increase in the amount of his income, the amount of

income concerned shall be determined by the Government notwithstanding the provisions of the preceding two paragraphs.

When a person who is liable to pay taxes ceases to have a domicile or place of residence within the area where the present law is in force, without giving notice of an agent to take charge of payment of his taxes, prior to the decision of incomes in virtue of the provisions of Paragraph 1, the amount of such incomes may be determined by the Government on the basis of its investigation, notwithstanding the provisions of Paragraph 1.

The provisions of the preceding four paragraphs shall not apply in respect of a person who is deemed to have no assessable amount for taxation as a result of the deduction in virtue of the provisions of Article 25 or Article 26 (2).

Article 37. In case the Income Investigation Committee fails to be constituted by May 31, the amount of income involved shall be determined by the Government.

In case the Income Investigation Comittee [sic] fails to complete the investigation within the period referred to in Article 58 from the day of its opening, or by May 31, the amount of incomes, the investigation whereof has not been completed, shall be determined by the Government.

Article 38. In case the Government deems any decision of the Income Investigation Committee to be improper, the matter shall be referred back for re-investigation within a period not exceeding 7 days for so doing, and in case the decision is again deemed improper, or in case the investigation fails to be completed within the period specified for re-investigation, the amount of income shall be determined by the Government.

Article 39. When the amount of income has been determined in accordance with the provisions of the preceding three articles, the Government shall notify the person liable to pay taxes of its decision.

In case a person liable to pay taxes, and who has no domicile or place of residence within the area where the present law is in force, fails to give notice of an agent to take charge of payment of taxes, the notification as referred to in the preceding paragraph may be made in the form of a public notice. In such case, it shall be deemed that the notification has been made if and when seven days have elapsed since the first day on which it was published.

CHAPTER V

Income Investigation Committee

Article 40. An Income Investigation Committee shall be organized within the jurisdiction of each taxation office ; provided, however, that in respect to a municipality within the jurisdiction of a taxation office, an Income Investigation Committee may be specially organized by Ordinance.

The number of members on an Income Investigation Committee shall be prescribed by Ordinance ; but any increase or reduction in number may be made only at the time of re-election.

Article 41. Members of an Income Investigation Committee shall be elected in each electoral district.

When the election of members of an Income Investigation Committee is made, the same number of reserve members shall be elected at the same time.

Article 42. The electoral district for members and reserve members of an Income Investigation Committee shall be based on the district within which an Income Investigation Committee shall be appointed, and the voting district and the counting district shall be determined by the limits of a municipality, town or village ; but in the case of a municipality which has been designated in accordance with the provisions of Article 6 or Paragraph 3 of Article 82 of the Law Governing the Organization of Municipalities, the limits of a ward shall form the basis.

An association of towns and villages which jointly deal with the whole of the affairs of the towns and villages or the affairs of their offices, shall be deemed individual towns or villages ; and in the case of an area where the Law Governing the Organization of Townships and Corporate Villages is not in force, that which corresponds to a town or village shall be deemed a town or a village.

Article 43. Persons who reside or live within the electoral district and who, in respect of incomes as referred to in Paragraph 1 of Article 36 or the businesses of individuals, have reported the amount of income or the amount of net profit by the legal time-limit in the year concerned and obtained a decision thereon, and who have been registered in the poll-register may elect members and reserve members of an Income Investigation Committee or may be elected members or reserve members of the said Committee ; provided, however, that persons who come within the purview of one of the following numbers shall be excepted :

1. Persons under disability ; 2. Insolvents who have not been reinstated ; 3. Persons who have been subjected to a process for recovery of national taxes in arrears less than one year before ; 4. Persons who have been condemned to penal servitude or imprisonment for six years or more, or who have been penalized for felony under the old Criminal Code ; 5. Persons who have been sentenced to penal servitude or imprisonment for less than six years and who have not yet served the term or been freed from the execution of the sentence ; 6. Persons who have been sentenced to a penalty of no less than imprisonment in accordance with the provisions of Article 94 or Article 95 and served the term or obtained exemption from the execution of the sentence except by prescription less than five years before ; 7. Persons who have been punished with a fine or minor fine in accordance with the provisions of Articles 88 to 95. or the provisions of Articles 33 to 35 of the Business Tax Law, with the case decided less than five years before.

In case where an election is to be held prior to the decision of the amount of income and the amount of net profit for the year concerned, payment of income tax or business tax in respect of incomes as referred to in Paragraph 1 of Article 36 or the businesses of individuals during the preceding year shall be deemed a decision obtained in regard to the amount of income or the amount of net profit for the year concerned.

In the case of the preceding two paragraphs, the decision of the amount of income or the amount of net profit which has been made in respect of a predecessor shall be deemed as the decision of the amount of income or the amount of net profit which has been made in respect of his successor and such payment of taxes or declaration made by a predecessor shall be deemed as payment of taxes or declaration made by his successor.

The provisions pertaining to the poll-register shall be prescribed by Ordinance.

Article 44. Affairs pertaining to the voting and the opening of ballots shall be in charge of the heads of municipalities, wards, towns or villages, and affairs pertaining to election meetings shall be in charge of the superintendents of taxation offices.

In respect to the association of towns or villages referred to in Paragraph 2 of Article 44, the administrators of the associations, and in respect to the areas where the Law Governing the Organization of Townships and Corporate Villages is not in force, those who correspond to the headmen of towns or villages, shall be deemed the headmen of towns or villages.

Article 45. The superintendents of taxation offices shall determine the date for the election of members or reserve members of an Income Investigation

Committee and notify the heads of municipalities, wards, towns or villages of the same.

When the heads of municipalities, wards, towns or villages have received the notification, as referred to in the preceding paragraph, they shall issue a public notice to the effect at least seven days prior to the date for election.

Article 46. The election shall be conducted by secret voting.

The balloting shall be limited to one vote for each person for the election of members and of reserve members of the Income Investigation Committee.

The electors shall go to the polling-places in person within the hours fixed for balloting on the day of election and shall vote by stating the full name of one candidate each on separate voting-papers.

The voting-paper shall be handed to the elector at the polling-booth on the day of election.

Article 47. The heads of municipalities, wards, towns or villages shall investigate the votes cast and immediately report the results to the superintendents of taxation offices.

Article 48. When the superintendents of taxation offices have received the report, as referred to in the preceding article, they shall hold election meetings to conduct an investigation of the same.

Article 49. The presence of witnesses shall be required at the voting, the opening of ballots, and at election meetings.

The provisions pertaining to witnesses shall be prescribed by Ordinance.

Article 50. Persons who have polled the largest number of votes shall be returned. If the number of votes is the same, the older person is to be selected and if the ages are the same, the selection shall be decided by drawing lots.

Persons who have been elected members of an Income Investigation Committee may not be reserve members even though they may be elected reserve members at the same time.

Article 51. When the election of members and reserve members of an Income Investigation Committee has been completed, the superintendents of taxation offices shall publish the full names of the persons elected and also notify

the persons elected and the headmen of the municipalities, wards, towns and villages.

When the headmen of the municipalities, wards, towns and villages have received the notification as referred to in the preceding paragraph, they shall publish the full names of the persons elected.

Article 52. Persons who have been elected members or reserve members of an Income Investigation Committee may not decline to serve on the Committee without good reasons.

Article 53. The term of office of members and reserve members of an Income Investigation Committee shall be four years calculating from the month in which the election day occurs.

In cases where a change in the limits of the electoral district has resulted in an increase or decrease by over one-fifth of the total number of persons within the district concerned who have obtained decisions of the amounts of income for the year concerned in respect of incomes as referred to in Paragraph 1 of Article 36 and/or who have obtained decisions of the amounts of net profit for the year concerned in respect of the businesses of individuals, the term of office of members and reserve members of an Income Investigation Committee shall terminate with the month in which the day of such change in the electoral district occurs ; but the term of office shall terminate with March if such change in the electoral district occurs in January or February, with September if such change occurs either in April to August or with March in the following year if such change occurs in December.

The provisions of Paragraph 2 of Article 43 shall apply with necessary modifications in respect of the case where a change in the limits of the electoral district has occurred prior to the decision of the amounts of income and the amounts of net profit for the year concerned.

Article 54. The re-election of members and reserve members of an Income Investigation Committee shall be held in the month following that in which the term of office of the predecessors terminates.

Article 55. When a vacancy has occurred in the Income Investigation Committee, the person to fill the vacancy shall be selected from among the reserve members polling the largest number of votes in order, and if the number of votes polled is the same, the older person shall be selected, and if the ages are the same, the selection shall be decided by drawing lots.

When a vacancy has occurred in the Income Investigation Committee and if there is no reserve member to fill the vacancy, a by-election of members of the Income Investigation Committee shall be held.

Article 56. A person who has become a member of an Income Investigation Committee or a reserve member thereof shall be in office for the remaining term of office of the predecessor.

The term of office of members and reserve members of an Income Investigation Committee who have been newly elected as a result of a change in the limits of the electoral district shall terminate in four years from the month in which the date of election occurs of the members and reserve members of the Income Investigation Committee prior to such change in the electoral district.

Article 57. When a member or reserve member of an Income Investigation Committee has come within the purview of any of the numbers of Paragraph 1 of Article 43 or when he has ceased to be liable to pay taxes in respect either of income tax on incomes as referred to in Paragraph 1 of Article 36 or of business tax or when he has ceased to reside within the electoral district concerned, he shall be disqualified from holding office.

Article 58. The number of days an Income Investigation Committee shall be in session may not exceed 30 days and shall be prescribed by Ordinance according to local conditions.

Article 59. An Income Investigation Committee shall open its session according to the notification of the superintendent of the taxation office concerned.

Article 60. An Income Investigation Committee shall elect a chairman from among its members at the beginning of the session every year.

Article 61. The superintendent of the taxation office shall investigate the amount of incomes of persons who are deemed to be liable for payment of taxes in respect of incomes as referred to in Paragraph 1 of Article 36 every year and forward the returns to the Income Investigation Committee.

The provisions of the preceding paragraph shall not apply in respect of a person who is deemed to have no assessable amount for taxation as a result of the deduction in virtue of the provisions of Article 25 or Article 26 (2).

The provisions of the preceding two paragraphs shall apply with necessary modifications in respect of Paragraph 2 of Article 36.

Article 62. An Income Investigation Committee may not pass a resolution unless a majority of its full membership is in attendance.

Matters for deliberation shall be decided by a majority vote of the members present. In case of a tie, it shall abide by the decision of the chairman.

Article 63. No member of an Income Investigation Committee shall take part in deliberations on matters pertaining to his own income or of a person who is in the same census register as himself.

Article 64. The superintendent of the taxation office or his deputy may attend the meetings of the Income Investigation Committee and state his opinion.

Article 65. Members of an Income Investigation Committee shall be granted allowances and travelling expenses.

Article 66. No member of an Income Investigation Committee shall act as an agent of persons liable to payment of taxes, or be engaged in the business of giving counsel to such persons, or conduct such business for remunerations, in respect to an application for investigation, petition, or the institution of a lawsuit at the Court of Administrative Litigation concerning the standard amount of assessment which has been determined on the basis of an investigation by an Income Investigation Committee of which he is a member.

INCOME TAX LAW

CHAPTER VI

Reinvestigation, Petition and Administration Litigation

Article 67. If a person liable to pay taxes objects to the amount of income as notified by the Government on the basis of the provisions of Article 39, he may, within twenty days of receipt of such notification, apply to the Government for reinvestigation, stating the reasons for his objection.

Even if an application has been made, as referred to in the preceding paragraph, the collection of taxes shall not be deferred by the Government.

Article 68. When an application, as referred to in Paragraph 1 of the preceding article, has been made, the matter shall be decided by the Government in accordance with the resolution of the Income Reinvestigation Committee.

The Income Reinvestigation Committee may question the applicant, as referred to in Paragraph 1 of the preceding article, in regard to facts concerning his income.

The provisions of Article 38 shall apply with necessary modifications in respect of the resolution of the Income Reinvestigation Committee.

Article 69. An Income Reinvestigation Committee shall be set up within the jurisdiction of each taxation superintendence bureau.

The Income Reinvestigation Committee shall consist of the following members:

1. Three persons appointed by the Minister of Finance from among senior officials of the taxation superintendence bureau; 2. One person for each prefecture and four persons for the Hokkaido, who are elected by members of the Income Investigation Committee from among themselves in each prefecture or the Hokkaido within the jurisdiction of the taxation superintendence bureau.

Matters pertaining to the Income Reinvestigation Committee, its members and reserve members other than those which are provided for in the present law, shall be prescribed by Ordinance.

Article 70. Members of an Income Reinvestigation Committee who have been elected from among members of the Income Investigation Committee shall be entitled to daily allowances and travelling expenses.

Article 71. If a person objects to the decision, as referred to in Paragraph 1 of Article 68, he may file a petition with the Government, or institute a law suit at the Court of Administrative Litigation.

CHAPTER VII

Collection

Article 72. Classified income tax on Class A incomes from dividends and interest, Class A earned incomes or Class A retirement incomes shall be collected at the time of payment and the payer shall pay it to the Government by the 10th of the following month.

Article 73. The annual amount of classified income tax on real property incomes, Class B incomes from dividends and interest, business incomes, incomes from forests, Class B earned incomes and the annual amount of composite income tax on the gross income of individuals shall be divided into four parts and collected during the four periods mentioned below; but if a peron [sic] liable to pay taxes ceases to have domicile or place of residence within the area where the present law is in force, without giving notice of an agent to take charge of payment of his taxes, the income tax payable by him may be collected immediately:

First period: From July 1 to July 31 of the year concerned;
Second period: From September 1 to September 30 of the year concerned;
Third period: From November 1 to November 30 of the year concerned;

Fourth period: From February 1 to the last day of February of the following year.

Article 74. If the classified income tax to be collected in accordance with the provision of Article 72 fails to be collected, or if the tax so collected fails to be paid to the Government, the same shall be collected from the payer in a manner similar to that used in collecting national taxes.

If, in the case of the dissolution of a juristic person, the remaining property has been distributed without paying the tax collectable in accordance with the provisions of the preceding paragraph, the liquidators shall be jointly and severally liable for payment of the said tax.

CHAPTER VIII

Miscellaneous Provisions

Article 75. When a person who is liable to pay taxes has suffered severe financial depletion on account of a disaster, unemployment or other circumstances and is deemed to have difficulty in paying taxes, the Government may reduce or remit income tax as provided by Ordinance.

Article 76. The Government may, in respect of income tax reducible or remissible in accordance with the provisions of the preceding article, defer the collection of taxes until a decision has been reached in regard to the reduction or remission.

Article 77. A person who has floated public bonds or corporation debentures which call for payment of interest within the area where the present law is in force (a person who has done the same by commission in the case of floatation by commission) shall without delay file with the Government a report containing particulars as specified by Ordinance in respect of the public bonds or corporation debentures.

Article 78. A person receiving payment of interest or dividends in respect

of uninscribed public bonds, corporation debentures or shares within the area where the present law is in force shall notify the person in charge of payment of the interest or dividends, of his full name or appellation, domicile and other necessary matters as prescribed by Ordinance.

The person in charge of payment of interest or dividends shall make payment thereof after causing the notification, as referred to in the preceding paragraph, to be made.

Article 79. A person who pays salaries, wages, annual allowances, compensation for expenses, annuities, pensions or bonuses or allowances of the nature of those which have been referred to shall file with the Government statements of payment as prescribed by Ordinance.

Article 80. Persons who are enumerated below shall present to the Government a statement of payments as prescribed by Ordinance:

1. Persons who pay salaries, wages, annual allowances, compensations for expenses, annuities, pensions or bonuses or allowances of the nature of those which have been referred to; 2. Persons who pay interest on public bonds, corporation debentures or deposits or profits accruing from the joint-operation-trust; 3. Juristic persons who pay dividends of profits or interest or make distributions of surplus funds.

A trustee of trusts other than the joint-operation-trust shall present a statement of accounts to the Government in respect of each trust as prescribed by Ordinance.

Article 81. The superintendent of the taxation office or his deputy may, if he deems it necessary from the standpoint of investigation, question persons liable, or who are deemed to be liable, to pay taxes; or he may inspect books, documents and other articles pertaining to their business.

The superintendent of the taxation office or his deputy may, if he deems it necessary from the standpoint of investigation, question persons in charge of presenting statements of payment or statements of account, as referred to in Paragraphs 1 or 2 of the preceding article; or he may inspect books, documents and other articles pertaining thereto.

Article 82. The superintendent of the taxation office or his deputy may, if he deems it necessary from the standpoint of investigation, question persons who are deemed to be liable to pay money or deliver goods to persons liable, or deemed to be liable, to pay taxes, or to persons who are deemed to be entitled to receive payment of money or delivery of goods from persons liable, or deemed to be liable, to pay taxes, in respect of the amount, quantity, and value of the same, and the date of payment, etc.

Article 83. The Government may, as prescribed by Ordinance, grant a subvention to a person who has collected classified income tax on Class A earned incomes in accordance with the provisions of Article 72, and to a person who has filed statements of payment or statements of account as referred to in Paragraph 1 or Paragraph 2 of Article 80.

Article 84. In the case of classified income tax on real property incomes, Class B incomes from dividends and interest, business incomes, Class B earned incomes, incomes from forests and Class B retirement incomes as well as composite income tax on the gross income of individuals, the place of domicile of the person liable to pay taxes or the place of residence of the said person in the absence of a place of domicile shall be the place for payment of taxes, provided, however, that a person who is outside the place of domicile pay to the Government income tax at the place of residence by reporting to that effect.

A person having neither a domicile nor a place of residence within the area where the present law is in force, shall determine the place for payment of taxes and notify the Government of the same. In the absence of such notification the Government shall designate a place for payment of taxes.

Article 85. When a person liable to pay taxes does not actually live at the place designated for payment of taxes, he shall appoint an agent for payment of taxes and to attend to the report of his income, and all matters pertaining to income tax, and file a report with the Government; the same shall hold good in the case where the domicile or place of residence is about to be removed to a place outside the area where the present law is in force.

Article 86. In cases where an act or the method of accounting of a family corporation is deemed to be aimed at the evasion of income tax in respect of the incomes of any shareholders or partners therein, or their relatives or employees or juristic persons who have investment relations therewith or any persons specially related to the same, the Government may calculate the amount of the incomes of such persons in accordance with its judgment.

A "family corporation" within the meaning of the preceding paragraph is a juristic person as provided for in Paragraph 3 of Article 17 of the Juristic Person Tax Law.

Article 87. The Hokkaido, prefectures, municipalities, towns, villages and other public bodies may not impose a surtax on the income tax.

CHAPTER IX

Penal Provisions

Article 88. Any person who by fraud or dishonest act has evaded payment of income tax shall be punished by a fine or minor fine corresponding to three times the amount of tax evaded, but if he has surrendered himself to justice or has notified the superintendent of the taxation office, he shall be acquitted from blame.

In the case of the preceding paragraph, the amount of income of the person who has evaded the income tax in respect of the income as referred to in Paragraph 1 of Article 36 shall, notwithstanding the provisions of Paragraph 2 of the said article, be determined by the Government and the tax thereon shall be collected forthwith.

Article 89. A person who has violated the provisions of Article 66 shall be punished by a fine not exceeding 1,000 yen.

Article 90. A person who, without good reason, has failed to present a record of payment or a statement of account, which ought to be presented to the Government in accordance with the provisions of Paragraph 1 or Paragraph 2 of Article 80, or who has presented a record of payment or a statement of account containing false entries, shall be punished by a fine not exceeding 1,000 yen.

Article 91. Any person who has given a false notification in respect of the matters as provided in Paragraph 1 of Article 78 upon obtaining payment of interest or dividends in respect of uninscribed public bonds, corporation debentures or shares, and any person who has made payment without causing notification to be given, in violation of the provisions of Paragraph 2 of the said article, shall be punished by a fine not exceeding 500 yen.

Article 92. A person who has denied, obstructed or evaded the inspection of

books, documents and other articles in accordance with the provisions of Article 81 or has shown books and documents containing false entries, shall be punished by a fine not exceeding 1,000 yen.

Article 93. If a person who is, or was, engaged in the investigation or reinvestigation of incomes has, without good reason, divulged any secret of which he obtained knowledge in connection with the said investigation or reinvestigation, he shall be punished by a fine not exceeding 1,000 yen.

Article 94. A person who, in connection with the election of members or reserve members of an income investigation committee, or of members or reserve members of an income reinvestigation committee, has offered gifts in money, in kind, or other benefits relating to property or to public or private offices to the electors or electioneers, or entertained them, or offered or promised to entertain them, with the object of getting himself returned, or causing others to be returned or causing others not to be returned, shall be condemned to penal servitude or imprisonment for a term not exceeding three years or punished by a fine not exceeding 2,000 yen.

The provisions of the preceding paragraph shall hold good also in respect of a person who has received a gift or entertainment mentioned in the preceding paragraph, or demanded the same or accepted the offer of the same.

The provisions of the first paragraph shall also hold good in respect of a person who has used his good offices or made solicitation or given encouragement with regard to the action as provided in the preceding two paragraphs.

Article 95. A person who, in connection with the election of members or reserve members of an income investigation committee or of members or reserve members of an income reinvestigation committee, has made house-to-house visits or interviewed individual electors one after another or conducted an election campaign by telephone, with the object of obtaining votes or enabling votes to be obtained or rendering the obtaining of votes impossible, shall be condemned to imprisonment for a term not exceeding one year or punished by a fine not exceeding 500 yen.

Article 96. The provisions of the proviso to Paragraph 3 of Article 38, Paragraph 2 of Article 39, Articles 40 and 41, Paragraph 2 of Article 48, Articles 63 and 66 of the Criminal Code shall not apply in respect of a person who has committed the offence mentioned in Paragraph 1 of Article 88.

Supplementary Provisions

Article 97. The present law shall be enforced as from April 1, 1940 (15th Year of Showa).

Article 98. The present law shall apply, beginning with the classified income tax for 1940 (15th Year of Showa), in respect of real property incomes, Class B incomes from dividends and interest, business incomes, Class B earned incomes, incomes from forests and Class B retirement incomes, or beginning with the composite income tax for 1940, in respect of the gross income of individuals.

Article 99. With regard to income tax on incomes of a juristic person for each business year which has ended prior to the enforcement of the present law and liquidation incomes accruing from a dissolution or merger, as well as income tax on second-class or third-class incomes, which was imposed or ought to have been imposed, or was collected or ought to have been collected prior to the enforcement of the present law, precedents shall be followed.

Article 100. The provisions of Article 8 shall not apply in respect of the amounts of money mentioned in Numbers 2 and 3 of the said article which accrue from a dissolution or merger prior to the enforcement of the present law.

Article 101. With regard to incomes mentioned below, the Government may, as prescribed by Ordinance, reduce or remit income tax, only in so far as (the income tax for) the year 1940 (15th Year of Showa) or 1941 (16th Year of Showa) is concerned, or create exceptions in respect to the calculation of the amount of incomes :

1. Incomes accruing from the property, businesses or occupations other than those continuing to be in possession during the period from January 1, 1939 (14th Year of Showa) to January 1, 1941 (16th Year of Showa) ; 2. Salaries, wages, annual allowances, compensation for expenses, annuities and pensions as well as allowances of the nature of those which have been referred to, other than those payment whereof is being continually received during the period from January 1, 1939 (14th Year of Showa) to January 1, 1941 (16th Year of Showa) ; 3. Incomes accruing from fishery enterprises.

Article 102. Bonuses or allowances of the nature of a bonus, which belong to Class B earned incomes, shall be calculated as Class B earned incomes for the year 1940 (15th Year of Showa), only in so far as the amount of incomes received after March 1, 1939 (14th Year of Showa) up to December 31 of the same year is concerned.

Article 103. With regard to classified income tax on Class A earned incomes, receivable up to July 31, 1940 (15th Year of Showa) after the enforcement of the present law, of a person whose third-class incomes for 1939 (14th Year of Showa) exceed 5,000 yen (based on an amount including those of the head of the house or members thereof living together), no deduction in virtue of the provisions of Paragraph 1 of Article 24 shall be made.

Article 104. Incomes mentioned in Number 2 of Paragraph 1 of Article 30, the date for payment whereof is prior to the enforcement of the present law, shall not be calculated as the gross incomes of individuals.

Bonuses or allowances of the nature of a bonus shall be calculated as the gross incomes of individuals for the year 1940 (15th Year of Showa), only in so far as the amount of incomes received after March 1, 1939 (14th Year of Showa) up to December 31 of the same year is concerned.

Article 105. Notwithstanding the provisions of Paragraph 1 of Article 21, classified income tax shall be imposed at the rate of 3 per cent for the time being on interest on national bonds which have been

deposited by savings banks in accordance with the provisions of Paragraph 1 of Article 9 of the Savings Bank Law.

Article 106. Of the gross incomes of individuals, the interest on public bonds, company debentures, deposits in banks and deposits as provided in Paragraph 2 of Article 21, as well as profits from the joint-operation-trust as prescribed by Ordinance, payment whereof is obtained within the area where the present law is in force, may be divided, for the time being, from other incomes on application by the person liable to tax and [thus] composite income tax on the same may be imposed at the rate of 15 per cent with the amount of interest or the amount of profit being regarded as the standard of assessment upon payment of interest or profit.

Composite income tax as provided in the preceding paragraph shall be collected by the payer upon payment of interest or profits and paid to the Government by the 10th of the following month.

The provisions of Article 74 shall apply with necessary modifications in respect of the case of the preceding paragraph.

The provisions of Paragraph 6 of Article 24 or Paragraph 6 of Article 25 shall not apply in respect of a person who is not subject to the imposition of composite income tax except that which is provided in Paragraph 1.

Article 107. The amount of income tax on second-class incomes and the amount of interest tax on capital, which a trust company has paid [to the Government] as previously prescribed in respect of the trust property comprising the joint-operation-trust which it has accepted, shall be deducted from classified income tax on the profits accruing from the said trust as prescribed by Ordinance.

Income tax on second-class incomes and interest tax on capital, which are to be deducted in the case of the preceding paragraph, shall be included in the calculation of the profits accruing from the joint-operation-trust concerned in the calculation of Class A incomes from dividends and interest.

Article 108. As for the members and reserve members of an income investigation committee and the members and reserve members of an income reinvestigation committee, precedents shall be followed up to July 31, 1940 (15th Year of Showa).

Article 109. A person who was punished in accordance with the provisions of Articles 74 to 76 of the Income Tax Law in force prior to its revisions or the provisions of Articles 28 to 30 of the Business Profit Tax Law in force prior to its revisions shall neither elect a member or a reserve member of an income investigation committee nor be elected a member or a reserve member of an income investigation committee, notwithstanding the provisions of Article 43, until five years shall have elapsed after the penalty was inflicted.

When a member or a reserve member of an income investigation committee has been punished in accordance with the provisions of Articles 74 to 76 of the Income Tax Law in force prior to its revisions or the provisions of Articles 28 to 30 of the Business Profit Tax Law in force prior to its revisions, he shall forfeit his office.

Article 110. Only in so far as the year 1940 (15th Year of Showa) is concerned, that which is referred to as "January 1" in Paragraph 1 of Article 24 and Paragraph 1 of Article 25 shall be "March 1," that which is referred to as "July 1" in Paragraph 6 of Article 24 shall be "August 1," that which is referred to as "March 15" in Paragraph 1 of Article 34 shall be "April 30," that which is referred to as "May 31" in Article 37 shall be "June 30," and that which is referred to as "from July 1 to July 31 of the year concerned" in Article 73 shall be "from August 1 to August 31 of the year concerned."

Article 111. No income tax shall be imposed on Buddhist establishments as referred to in Paragraph 1 of Article 35 of the Religious Organizations Law.