1. System pre reform
1.1. transactions within a consolidated tax group
1.1.1. deferral of gain or loss until recognition event (transfer out of group, abandonment etc)
1.2. qualified corporate reorganisations
2. Scope issues
2.1. Complete controlling relationship
2.2. criteria for assets subject to the IGTTS
2.2.1. Fixed Assets
2.2.2. Land
2.2.3. Rights Over Land, excluding Fixed Assets
2.2.4. Marketable Securities
2.2.4.1. excluding Trading Securities of the transferor...
2.2.4.2. excluding Marketable Securities that would be treated as Trading Securities for the Transferee...
2.2.5. Monetary Assets
2.2.6. Deferred Assets
2.2.7. de-minimus exclusion
2.2.7.1. assets where Book Value immediately prior to transfer <JPY10m
2.2.7.2. netting and classification rules for applying de-minimus exclusion
2.2.7.2.1. Monetary Assets - apply to each creditor
2.2.7.2.2. Depreciable Assets
2.2.7.2.3. Land and ROLs - each plot
2.2.7.2.4. Marketable Securities - by type (銘柄)
2.2.7.2.5. other assets - by unit normally transacted in
2.3. conditions for transferor and transferee company
2.3.1. transferor must be...
2.3.1.1. Ordinary Japanese Company
2.3.1.2. Defined Japanese Co-operative Association
2.3.2. transferee must be...
2.3.2.1. Ordinary Japanese Company
2.3.2.2. Defined Japanese Co-operative Association
3. special cases
3.1. transfer or assets subject to adjustment on qualified reorganisation of receiving company
3.2. liquidation of tranferring company on a qualified merger
3.3. non qualified mergers
4. subsequent recognition
4.1. loss of Complete Controlling Relationship
4.1.1. gain or loss is recognised by the Transferor co in the Tax Accounting Year in which the day on which Complete Controlling Relationship is lost with the Transferee company except...
4.1.1.1. exceptions - transfer further to the dissolution of the Transferor or Transferee on their Tax Qualified Merger provided the Merger Successor Company maintains Complete Controlling Relationship with the remaining Transferor or Transferee
4.2. simplified recognition method
4.2.1. where certain conditions are met, recognition for Depreciable Assets and Deferred Assets can apply, based on the number of months of depreciation
4.2.2. attached detailed calculation must be attached to the tax return
4.3. subsquent recognition of GOT or LOT for GLOT Adjusted Assets on commencement or entry into Japanese consolidated tax group
4.3.1. de-minimus exception - remaining unrealised GOT, LOT is less than JPY10m
4.3.2. GOT or LOT on certain GLOT Adjusted Assets received prior to merger or on another group member leaving the group
4.4. reasons arising at the Transferee for subsequent recognition of GOT or GOL for GLOT Adjusted Assets (recognised by Transferor)
4.4.1. where the following circumstances arise
4.4.1.1. further Transfer of GLOT Adjusted Assets transfers, disposals (e.g. where assets are no longer used), settlement of debts or other similar circumstances
4.4.1.2. transfer to a Corporate Split Successor Company in a Tax Qualified Corporate Split
4.4.1.3. on conversion of the Transferee Company to a Public Purpose Company
4.4.2. when a revaluation of assets is taxable further to certain laws relating to corporate insolvency or rehabilitation
4.4.3. for Depreciable Assets, corresponding to the depreciation of the asset concerned by the transferee company
4.4.4. for Deferred Assets, corresponding to the amortisation of the asset concerned in the hands of the transferee company
4.4.5. for assets subject to tax deductible impairment (further to CTL Art 33 etc) at the time of such tax deductible impairment
4.4.6. for Marketable Securities, where MS of the same type were already owned by the Transferee, proportionate to the sale of the numbers of securities concerned
4.4.7. for securities subject to amortisation or accumulation, proportionate to the months remaining to repayment of the securities concerned
4.4.8. for assets subject to revaluation to market value at the time of commencement of a consolidated tax group, at the time of such commencement
5. procedural issues
5.1. notification obligations
6. effect
6.1. deferral of Gain on Transfer or Loss on Transfer
6.1.1. Transferor company may recognise gain but then include a corresponding deductible loss on qualifying transactions (or vice versa for losses)