(Purpose)
Article 1. The Law shall, for the operation of the Administrative Agreement under Article III of the Security Treaty between the United States of America and Japan, aim at the establishment of exceptions to the Income Tax Law (Law No.27 of 1947), the Corporation Tax Law (Law No.28 of 1947), the Accessions Tax Law (Law No.73 of 1950), the Net Worth Tax Law (Law No.174 of 1950), the Travelling Tax Law (Law No.43 of 1940), the Stamp Tax Law (Law No.54 of 1901), the Commodity Tax Law (Law No.40 of 1940) and the Gasoline Tax Law (Law No.44 of 1949).
(Definition)
Article 2. The term "the United States" as used in this Law, shall mean the United States of America.
2 The term "the United States armed forces" as used in this Law, shall mean the land, sea or air armed forces of the United States disposed in and about the territory of Japan on the basis of the Security Treaty between the United States of America and Japan (hereinafter referred to as "the Treaty" ).
3 The term "members of the United States armed forces" as used in this Law, shall mean the personnel on active duty belonging to United States armed forces.
4 The term "civilian component" as used in this Law, shall mean the civilian persons of United States nationality who are in the employ of, serving with, or accompanying the United States armed forces, (excluding persons who are ordinarily resident in Japan or persons who are ordinarily resident in the United States or employees of the said persons or corporations established or organized under the laws of the United States whose presence in Japan is solely for the purpose of executing contracts with the United States for the benefit of the United States armed forces).
5 The term "dependents" as used in this Law, shall mean spouse and children under 21 of a member of the United States armed forces or civilian component;and parents and children over 21, if dependent for over half their support upon a member of the United States armed forces or civilian component.
6 The term "the facilities or areas used by the United States armed forces" as used in this Law, shall mean the facilities or areas the use of which by the United States armed forces is agreed by Japan to carry out the purposes stated in Article I of the Treaty.
7 The term "the exchange organization, etc. for the use of military personnel" as used in this Law, shall mean navy exchanges, P. X., messes, social clubs, theaters, newspapers, and other nonappropriated fund organizations authorized and regulated by the United States armed forces which were established in the facilities and areas in use by the United States armed forecs for the use of members of such forces, the civilian component, and their dependents.
(Exceptions to the Income Tax Law)
Article 3. The income tax shall not be imposed on the following items of income:
(1) Income acquired by members of the United States armed forces, the civilian component, and their dependents as a result of their service with or employment by the United States armed forces, or by the exchange organization, etc. for the use of personnel;
(2) Income received by members of the United States armed forces, the civilian component, and their dependents as a result of the transfer or donation inter se, or bequest of the property held in Japan, the presence of which in Japan is due solely to the temporary presence of those persons in Japan (not including any immovable property or the right thereto, or property held for purposes of investment or the conduct of business);
(3) Income derived from the business of the construction, maintenance or operation under a contract (limited to the one made in the United States) made by an individual who is ordinarily resident in the United States and who in Japan is engaged in the construction, maintenance or operation under the contract (hereinafter referred to as "individual contractor" ) with the United States Government in connection with the construction, maintenance or operation of any of the facilities or areas used by the United States armed forces (excluding the construction, maintenance or operation of the exchange organization, etc. for the use of military personnel;hereinafter the same)(hereinafter referred to as "the contract of construction, etc." );
(4) Income received by the employees (limited only those who are ordinarily resident in the United States and who in Japan are engaged in the execution of the construction, maintenance or operation under contract of construction, etc.;hereinafter the same) of an individual contractor engaged in such contract of construction, etc. or an incorporated contractor organized under the laws of the United States which in Japan is solely engaged in the construction, maintenance, or operation under such contract (hereinafter referred to as "incorporated contractor" ), as remuneration for the service in execution of construction, maintenance or operation under such contract (limited to the one made in the United States) from such individual or incorporated contractor;
(5) Income received by individual contractor, arising out of the transfer, donation or bequest of depreciable assets (excluding houses), which in Japan the individual contractor held due solely to the construction, maintenance, or operation under the contract of construction, etc. and which are transferred, donated or bequeathed, to an incorporated contractor or another individual contractor, for purposes of the use of the construction, maintenance or operation under such contract of construction, etc. made by the said contractors, upon a certification of an authorized officer of the United States armed forces that such income is derived from the said transfer, donation or bequest;
(6) Income received by individual contractor or the employees or individual or incorporated contractor, arising out of the transfer, donation or bequest of the property held by such persons, the presence of which in Japan is due solely to the construction, maintenance or operation under the contract of construction, etc. made by such individual contractor or to the service in execution of the construction, maintenance or operation under such contract of construction, etc. made by such individual or incorporated contractor who is the employer of the said employees (not including any immovable property, the right thereto, or property held for purposes of investment or the conduct of business and the property provided for in the preceding item) to another individual contractor or employees of individual or incorporated contractor, or an incorporated contractor, the United States armed forces, members of the United States armed forces, the civilian component or their dependents, upon a certification of an authorized officer of the United States armed forces that such income is derived from the said transfer, donation or bequest;
(7) Income received by the exchange organization, etc. for the use of military personnel as a result of exchange of commodities to or service with members of the United States armed forces, the civilian component or their dependents, or the individual or incorporated contractor or those employees.
2 In cases where members of the United States armed forces, the civilian component, and their dependents, individual contractors, or the employees of individual or incorporated contractors are exempt from income tax of the United States in respect of incomes referred to in item (1), item (3) or item (4) of the preceding paragraph by reason of being resident in Japan, the provision of the same paragraph shall not apply in respect of such incomes.
3 For purposes of application of the Income Tax Law to members of the United States armed forces, the civilian component, their dependents, individual contractors, or the employees of individual or incorporated contractors or the exchange organizations, etc. for the use of military personnel, the periods during which members of the United States armed forces, the civilian component, and their dependents are in Japan solely by reason of being such persons, the periods during which the individual contractors are in Japan solely in connection with the business of construction, maintenance or operation under the contract of construction, etc. made by him, the periods during which the employees are in Japan solely for the purpose of performing their service in connection with the construction, maintenance or operation under the contract of construction, etc. made by individual or incorporated contractors, or the periods during which the exchange organizations, etc. for the use of military personnel are recognized as such organizations shall be considered as periods during which they have no domicile or residence in the enforcement area of the same Law.
(Exceptions to the Corporation Tax Law)
Article 4. The corporation tax shall not he imposed on the following items of income:
(1) Income derived by an incorporated contractor from the business of construction, maintenance or operation under the contract of construction, etc.(limited to the one made in the United States) made by him;
(2) Income of an incorporated contractor, arising out of the transfer of the depreciable assets (excluding houses) which are held by the incorporated contractor in Japan exclusively for the purpose of using them in the business of construction, maintenance or operation under the contract of construction, etc. made by him and which are transferred by him to an individual contractor or other incorporated contractor for the purpose of using them in the business of construction, maintenance or operation under the contract of construction, etc. made by the individual contractor or other incorporated contractor, upon a certification of an authorized officer of the United States armed forces that such income is derived from such transfer;
(3) Income of an incorporated contractor, arising out of the transfer, donation or bequest of the assets provided for in paragraph 1 item (5) of the preceding Article or the preceding item upon a certification of an authorized officer of the United States armed forces that such income is derived from the transfer, donation or bequest.
(Exceptions to the Accessions Tax Law)
Article 5. The following values of properties shall not be included in the taxable value of accessions tax:
(1) Values of properties as provided for in Article 3 paragraph 1 item (2) or item (6), which are acquired, by members of the United States armed forces, the civilian component, and their dependents owing to the succession, donation or bequest;
(2) Values of properties as provided for in Article 3 paragraph 1 item (5) or item (6), which are acquired by the individual contractor or by the employee of the individual or incorporated contractor owing to the succession, donation or bequest.
2 For purposes of application of the Accessions Tax Law to members of United States armed forces, the civilian component, and their dependents, the periods during which such persons are in Japan solely by reason of being such persons shall be considered as periods during which they have no domicile in the enforcement area of the same Law.
(Exceptions to the Net Worth Tax Law)
Article 6. The values of properties as provided for in Article 3 paragraph 1 item (2), item (5) or item (6), which are held in Japan by an individual as provided for in Article 3 paragraph 2 shall not be included in the taxable value of net worth tax.
2 For purposes of application of the Net Worth Tax Law to members of the United States armed forces, the civilian component, and their dependents, the periods during which such persons are in Japan solely by reason of being such persons shall be considered as periods during which they have no domicile or residence in the enforcement area of the same Law.
(Exceptions to the Travelling Tax Law)
Article 7. In the case where the members of the United States armed forces take, trains, etc. as provided for in Article 1 of the Travelling Tax Law for the purpose of carrying out the official business of the United States armed forces, if the certificate for the said business issued by the authorized officer of the United States armed forces is presented, the travelling tax shall not be imposed on the said members.
(Exceptions to the Stamp Duty Law)
Article 8. The stamp duty shall not be imposed on certificates and account-books issued by the United States armed forces and by exchange organization, etc. for use of military personnel.
(Exceptions to the Commodity Tax Law)
Article 9. The commodity tax shall not be imposed, through due procedure as may be designated by Cabinet Order, on the commodities as provided for in Article 1 of the Commodity Tax Law which are carried out of manufactory upon approval of the chief of the competent taxation office through. due procedure as may be designated by Cabinet Order and as enumerated in the following items:
(1) Commodities purchased by the United States armed forces or authorized procurement agencies of the United States armed forces for use of the United States armed forces;
(2) Commodities to be used or consumed solely in the business of construction, maintenance or operation under the contract for construction, etc. made by individual or incorporated contractor which are to be used for the United States armed forces and those to be used or consumed by these contractor for the purpose of performing such business which may be prescribed by Cabinet Order.
2 In respect of the commodities subject to the application of the provisions of the preceding paragraph which are not certified to have been used for the purposes as mentioned in each of the items of the same paragraph within the period designated by the chief of the competent taxation office, the commodity tax shall be collected from manufactures at once;provided, however, that the same shall not apply, if the approval of the chief of the competent taxation office is obtained, for the commodities decreased due to calamities and other inevitable causes.
(Exceptions to the Gasoline Tax Law)
Article 10. The gasoline tax shall not be imposed, through due procedure as may be designated by Cabinet Order, on the gasoline as provided for in Article 2 paragraph 1 of the Gasoline Tax Law which is received from manufactory upon approval of the chief of the competent taxation office through due procedure as may be designated by Cabinet Order and as enumerated in the following items:
(1) Gasoline purchased by the United States armed forces or authorized procurement agencies of the United States armed forces for use of the United States armed forces;
(2) Gasoline to be consumed solely in the business of construction, maintenance or operation under the contract of construction, etc. made by individual or incorporated contractor.
2 The provision of paragraph 2 of the preceding Article shall apply mutatis mutandis to the gasoline subject to the application of the provision of the preceding paragraph which are not certified to have been used for the purpose as mentioned in each of the items of the same paragraph within the period designated by the chief of the competent taxation office. In this case, "commodity tax" as used in paragraph 2 of the preceding Article shall read "gasoline tax" .
(Prohibition of Transfer of Tax Exemption Commodities, Etc.)
Article 11. The commodities or gasoline which are exempted from commodity tax or gasoline tax in accordance with the provisions of the preceding two Articles shall not be transferred nor received for the purposes other than these as enumerated in each of the items of Article 9 paragraph 1 and in each item of paragraph 1 of the preceding Article;provided, however, that the same shall not apply to the case where they are transferred through due procedure as may be designated by Cabinet Order upon the approval of the chief of the competent taxation office.
2 The person who has violated the provision of the preceding paragraph shall be punished with penal servitude not exceeding five years or with a fine not exceeding 500,000 yen, or with both.
3 In the case where the commodities, etc. have been transferred, upon approval under the provision of the proviso to paragraph 1 or in the case under the preceding paragraph, the commodity tax on the commodities or the gasoline tax on gasoline, concerning the said receipt, shall be collected from recipient at once.
4 The provision of Article 48 paragraph 2, Article 63 and Article 67 of the Penal Code (Law No.40 of 1907) shall not apply to the person who has committed the offence under the provision of paragraph 2;provided, however, that the same shall not apply to the penal servitude in the case where the penal servitude or both penal servitude and fine are to be executed.
5 In case the representative of corporation, agent, employee or other worker of a corporation or an individual has committed the offence under the provision of paragraph 2 with respect to the business or the properties of the corporation or the individual, the corporation or the individual shall be punished with fine under the same paragraph in addition to the punishment of the said offender.