Under the “Statute for Industrial Innovation”, the levying or payment of income tax may be deferred where an individual or company taxpayer pays for shares by assigning or granting to a company a license to use the intellectual property rights obtained from such taxpayer’s own R&D efforts, or where an employee taxpayer acquires stock-based employee compensation.  Accordingly, on September 6, 2016, the Ministry of Finance issued a “Ruling Governing the Deferment of Income Tax for Qualified Individuals and Companies under the Statute for Industrial Innovation”.  Major points include: (1) where the obtained shares are those of a listed, OTC or emerging stock company, the value of such shares is the market price; (2) where an individual or company assigns, or grants a license to use,  intellectual property rights as payment for shares in a non-listed, ono-OTC or non-emerging stock company, the value of such shares shall be the actual price of transfer on the date that such shares are actually transferred; and (3) where an employee acquires stock-based employee compensation from a non-listed, non-OTC or non-emerging stock company, the calculation of the compensation value shall be based on the book value stated in the latest certified financial statement; in case that there is no certified financial statement, the value of each share shall be calculated based on the company’s net asset value.