Handling of the Individual Number System commonly known as My Number (the Social Security and Tax Number System) by private businesses

Transcription

1 Handling of the Individual Number System commonly known as My Number (the Social Security and Tax Number System) by private businesses Time is coming for the notification of Individual Numbers beginning in October 2015 and use of the Individual Number System beginning in January This system will start with the use of the Individual Number in three areas; social security, taxation and disaster response. Private businesses with employees will also need to deal with Individual Numbers for tax and social security procedures. Today, I would like to introduce to you the basics required for the handling of this system by private businesses. I would like to start with an overview of the Individual Number System, and then move on to handling by private businesses in regard to changes in tax and social security procedures that will accompany the introduction of the Individual Number System. I will then explain the guidelines for private businesses in the handling of personal information. Finally I would like to give you an overview of Corporate Number.

2 The Social Security and Tax Number System is social infrastructure to improve administrative efficiency, enhance public convenience, and realize a fairer and more just society. Individual Number system (the social security and tax number system) effectively manages information in the areas of social security, taxation and disaster response. It is used to confirm that personal information possessed by multiple agencies is for the same person. It is social infrastructure to improve administrative efficiency, enhance public convenience, and realize a fairer and more just society. Let s start with improving administrative efficiency. After the introduction of the Individual Number System, residents will be requested to present their individual numbers or provide it on application forms for procedures taken at national and regional public agencies. When the information-sharing network among national and regional agencies is initiated, there will be a significant reduction in the time and labor required to check and transfer information and administrative procedures will become more accurate and smooth. The system will enhance public convenience. Until now, residents were required to run from one public office to another, such as the city office, tax office, social insurance office, to get all the necessary documents for the submission of one document. After the introduction of the Individual Number System, there will be cases in which the need for accompanying documents for administrative procedures will be reduced, making it much simpler for residents. It will also become possible to receive information about the services available to individuals and their families. Lastly, the system will realize a fairer and more just society. The system will make it easier to ascertain individual s income and other information, and prevent improper evasion of payment responsibility and unfair receipt of benefits as well as provide fine-tuned assistance to those who really need it.

3 Residents will be notified of their Individual Numbers beginning October Starting October 2015, residents with resident records will be issued a 12-digit My Number (Individual Number). Mid- to long-term resident foreign nationals or individuals with special permanent resident status will also be issued Individual Numbers. Individual Numbers are allotted to the address appearing on individual resident registry as of Monday, the 5 th of October Thereafter, local municipal offices will send a Notification Card for Individual Numbers for the entire household via simple registered mail. Individuals not living at the address noted in the resident record should keep in mind that the notification will be sent to the address on the resident registry. Your Individual Number will serve you for your lifetime. Please take proper steps to protect it because your Individual Number will not be changed during your lifetime, unless it has been leaked and may be used improperly. Corporate bodies will be sued is a 13-digit Corporate Number. Please refer to pages 31 onward for more detail.

4 Individual Numbers will be used from January Information sharing will begin sequentially by national government agencies in January 2017 and by regional government agencies in July Individual Numbers will be used by national and regional public agencies only for social security, taxation and disaster response procedures that are stipulated by law or regional government regulations. After January 2016, ndividual I Numbers will be required for applications and other procedures related to pension, medical insurance, unemployment, welfare payments and taxation. Individual Numbers cannot be used for purposes other than for those stipulated by law. Indivi dual Number cannot be disclosed for purposes not stipulated by law. Illegally obtaining someone else s Individual Numbers or releasing personal information file with records of Individual Number and other confidential information are subject to punishment.

5 Individual Number will be used in various situations. Individual Numbers will be used in different situations. Specifically, (1) Households with children will need to present Individual Number to the municipal office for child allowance applications and updates (2) You will need to present your Individual Number to the pension office when applying for a judgment concerning employee pension (3) Individuals dealing with financial institutions, such as banks, security companies, insurance companies, etc. must present their Individual Numbers to the financial institution to receive dividends or insurance money, which will be provided on legally required documents by financial institutions (4) Employed individuals need to present their Individual Numbers to their place of employment for the creation of the certificate of income and tax withholding. Pay particular attention to (4), which involves all private businesses hiring employees.

6 Once information sharing begins, individual resident s burden to attach documents will be reduced Information sharing via a network system among various public agencies is scheduled to commence in January 2017 for national government agencies and in July 2017 for regional government agencies. Once this system is initiated, documents required for public applications such as tax declaration certificates, may be omitted, which reduces burden and improves convenience for residents. Information sharing among administrative agencies will be conducted not by direct use of Individual Numbers but by an encrypted form. A Specific Personal Information Protection Commission will monitor and oversee information sharing among administrative agencies as a third-party agent. You may check a record of how your personal information has been shared through the Personal Information Cooperation Record Disclosure System Some people may be concern about how personal information is being shared. From January 2017, a portal site (Mynaportal) is scheduled to commence operation with which you can see who has accessed your personal information, what was accessed, when it was accessed and for what reason it was accessed. Through Mynaportal, public administration is able to notify you of the public services available to you. For example, household with infants may receive notices of vaccination for their child scheduled for the next month. There will be other convenient functions included on the site.

7 Individual Number Cards that can be used for various purposes will be issued upon application. Individual Number Cards that enable identification will include the individual s name, address, date of birth, gender, Individual Number, and ID photo. An application form will be included in the Individual Number notification. Individual Number Cards will be issued free of charge. (Cards need to be updated every ten years for individuals aged 20 years and above, and updated every five years for individuals under 20 years of age.) Individual Number Cards can be used for ID purposes, as we ll as for various electronic-based applications, such as e-tax, with the IC chip installed as electronic ID. The Individual Number Cards are also used to receive services stipulated in the regulations of the regional government of residence such as issuance of library cards or seal registration certificates. Detailed personal information will not be recorded in Individual Number Cards Some have expressed concern about the leakage of personal information in the IC chip if an Individual Number Card is lost or stolen. The IC chip in the Individual Number Card contains basic information provided on the front of the card, and electronic ID for electronic application purposes, but not income and medical history or any other confidential personal information. The front side of the card is intended to be used wide ly for general identification purposes; and the Individual Number on the reverse side cannot be used for purposes other than that permitted by law. For example, the front side can be photocopied as an ID document; however, photocopying the reverse side that includes the Individual Number is prohibited by law.

8 Strict operation-side and system-side monitoring in response to concern for privacy Responding to the concern for personal information leakage and identity theft, measures are in place to protect personal information from both the operational and system sides. From the operation side, the collection and retention of personal information including Individual Numbers is prohibited with the exception of when prescribed by law. A third-party agency, the Specific Personal Information Protection Commission, will monitor and oversee its use. Punishment for the illegal use of Individual Numbers is severe. From the system side, personal information will not be controlled centrally. As it was done before, pension information will be managed by the Pension office, taxation information will be managed by the tax office. When information is communicated between public agencies, Individual Numbers will not be used directly and information being transmitted will be encrypted. Individuals with authority to access into the system will also be restricted.

9 Private businesses will need to prepare for the start of the system This is an example roadmap for Individual and Corporate Numbers regarding notification and the issuance of Individual Number Cards. The numbers will be issued in October of this year and put into use from January of next year (2016). After the notification of Individual Numbers in October 2015, businesses may obtain Individual Numbers for their employees. Businesses may apply for Individual Number Cards on behalf of all their employees. There are office procedures that need to be followed for all employees related to the introduction of the Individual Number System. From January of next year, the Individual Number System will come into operation, and Individual Numbers will be required for the identification of individuals in regard to payment for short-term employees hired at the beginning of the year, compensation paid to speakers at lectures, March or midterm retirement, newly recruited employees in April, and other procedures related to your employees. Administrative procedures for taxation and social insurance for your employees will also begin sequentially. Please make useof the explanation that follows and begin your preparation for the introduction of this system.

10 Private businesses will also need to handle Individual Numbers Privatebusinesses handle health insurance and welfare pension application procedures and create certificate of income and tax withholding for their employees. Securitiesfirms and insurance companies also create payment record for dividends and insurance money. From January 2016onward, these procedure will require Individual Numbers. Individualsreceiving salary payment or who deals with financial institutes must present their own and family member s Individual Numbers to the place of employment and financial institutes such as securities firms and insurance companies. When private businesses request individuals to give lectures or to write manuscriptsand pays for their services, tax must be deducted from the payment. For this reason, Individual Numbers (or Corporate Numbers) need to be presented to the businesses for payment for such services. Individual Number System involves all employees for the processing of social security and taxation From January 2016 onward, Individual Numbers of all employees, including part -timers and temporary employees, must be obtained and included on the certificate of income and tax withholding, health insurance, employee pensions, unemployment insurance and other tax and social security documents by the date of submission of the relevant documents. Private businesses must appr opriately manage Individual Numbers and personal information (specific personal information).

11 Individual Numbers need to be provided when submitting tax-related documents Inaccordance with the national tax-related laws, such as the General Act on National Taxes, Individual or Corporate Numbers must be provided on all tax forms, applications, notifications, and written statements to be submitted. In regard to thetax returns, payment reports and other regional tax-related documents must provide Individual or Corporate Numbers, as stipulated by law related to regional taxation. Written statements stipulated bythe laws related to national taxation and payment reports related to regional taxation must also provide the Individual Number or Corporate Number of the party receiving the payment, along with the Individual or Corporate Number of the party making the payment. Certificate of income and tax withholdingfor salary income and salary payment report require (1) the Individual or Corporate Number of payer, (2) the Individual Number of the recipient, and (3) the Individual Number of the qualified spouse for deduction and dependents. The Individual or Corporate Number of the party to which the payment is made must be obtained from said party prior to the submission of payment records and payment reports.

12 Tax-related document format will change The above is a sample of the new format for the Payment Record of Compensation, Fees, Contract and Prize Money that will be in use after the introduction of the Individual Number System. As you can see, next to the Name or title of Recipient field is a field for Individual or Corporate Number. There is also a field for Individual or Corporate Number next to Name or title of Payer. After the introduction of the Number System, the payer is required to obtain the Individual or Corporate Number of the recipient prior to preparation of the Payment Record. Please note with regard to payment records which the payer has no legal obligation to issue that copies requested by payees for the purpose of confirming content cannot include the payer s Individual or Corporate Number. (Note) When disclosing payment records in accordance with the Personal Information Protection Law, copies can include said individual s number. In the event a copy of payment records that includes Individual Numbers other than the person making the request, measures must be implemented to erase or mask the numbers so that they cannot be viewed or restored. (Refer to Q5-8 Q&A for Guidelines for the appropriate handling of specific personal information (for Businesses) created by the Specific Personal Information Protection Commission.)

13 There will also be changes in the certificate of income and tax withholding and salary payment report for salary income. The major change is the size of the format from the current A6 to A5 size. Number fields are added and Individual Numbers of the person receiving the salary as well as the Individual Numbers of the qualified spouse for deductions and dependents are required. Individual or Corporate Numbers of the payer must also be provided. Certificate of income and tax withholding issued to the relevant individual will not have Individual or Corporate Numbers of the payee. The above sample of the format prior to the introduction of the Individual Number System is the format prepared at the end of March Currently, the format is being reviewed in line with the revision of the taxation system, and the actual certificate of income and tax withholding may differ. The new format will be released on the National Tax Agency website as soon as it is finalized.

14 One of the documents related to income tax and individual inhabitant tax is Declaration of tax exemption for salaried employees, which requires Individual Numbers for the income earner, qualified spouse for deduction, and qualified dependents. Payers requested to submit this form are required to provide their Individual or Corporate Numbers. There are other forms that payers are required to submit which must provide Individual Numbers of the recipient: Declaration of tax exemption for secondary income, Declaration of insurance premium deduction and spouse special deductions for salaried employees, Return form relating to retirement income earner, and Declaration of dependents to recipient of public pension. These forms also require Individual or Corporate Number of the payer of the salary. The above format is schedule to change in line with the taxation revision in 2015.

15 Phase-in of Individual Numbers on tax-related forms When the Number System is ntroduced, i inclusion of Individual Numbers on declarations and legal records to be submitted to tax authorities will be phased in. The specificphase-in dates for formats requiring inclusion of the Individual Numbers are as follows: (1) Income tax reports will require numbers on declarations for FY2016. (2) The inclusion of numbers on individual inhabitant tax and individual enterprise tax reports will be required on declarations for 2017, and numbers will be required for forms submitted from March 15, (3) Corporate tax forms will require numbers for the business year starting January 1, For example, businesses with March as their financial closing month will need to include their number on declarations for financial closing in March (4) The same will apply to declarations of corporate inhabitant tax and enterprise tax. (5) Legal records will require numbers for monetary payment made from January 2016 onward. For example, reports of payment of compensation, fees, contract and reward money shall begin for payments settled in January 2016 onward, and will require the name and Individual or Corporate Number of the recipient and the payer. Based on transactions completed from taxation stand point, some reports which are required to perform the duty of disclosure according to tax laws such as Payment report on dividends, distribution of surplus and interest on guaranty capital and Annual transaction report for specified account that are completed prior to January 1, 2016, extension is provided that allows postponement of identity verification and inclusion of Individual Number until the date of the first payment after 3 years of the date on the said report. However, for certification of salary income and tax withholding and reports of payment of compensation, fees, contract and reward money and other document that do not qualify for extension, employers must obtain the Individual or Corporate Number from the recipient of the payment to be included in legal document of payment from January 2016 onward. (6) Payment record will required inclusion of the Individual or Corporate Number from the payment for 2016; therefore, salary payment reports for 2016 that must be submitted by January 31, 2017 will required the Number. (7) Applications and notifications will require the Number on documents submitted after January 1, 2016.

16 National tax related forms will be disclosed sequentially National tax related forms are being revised to include fields for the Individual or Corporate Number and will be disclosed as completed. Forms for legal records are already posted on the website. Some ofthe forms such as Certificate of income and tax withholding are currently being revised in line with tax system revision in 2015 and are currently being coordinated with other related agencies. Some applicationand notification forms are also posted on the National Tax Agency website. Since theactual use of the new income tax forms will be from January 2017, forms with number fields were originally scheduled for release in December 2015; however, they were already posted on June Theseposted forms are tentative and are subject to change due to tax reform and other circumstances until the notice of legal interpretation is issued.

17 Individual Numbers must be provided in social security documents Various social security -related documents and applications, such as written notice of acquisition of the employment insurance, written notice of acquisition of health insurance and welfare pension insurance, that employers are to submit to the administrative agencies must include Individual or Corporate Numbers of the employed. This means that the employers need to obtain the Individual Numbers from their employees. Please make use of the specially set up page for social security and tax numbers on the Ministry of Health, Labour and Welfare website that links to a page entitled For business owners that posts related information.

18 Start of time in which Individual Numbers will be required on social security-related forms will differ according to the system The startingdates for Individual Numbers required on social security-related forms are as follows: As with tax forms, unemployment insurance documents will require provision of the number for forms submitted on January 1, 2016 onward, For health insurance and welfare pension insurance, Number is required from documents submitted on January 1, 2017 onward because system reform of the Japan Pension Organization is scheduled. The period was extended to reduce the burden on business owners. Business owners are asked to provide the Individual or Corporate Number for the above documents. (Report of the new applications for health insurance /welfare pension insurance will require Corporate Numbers from January 1, 2016) In accordancewith Article 18 of the Personal Information Protection Law, employers must notify or provide the purpose of use when requesting their employees to provide their Individual Numbers. When obtaining Individual Numbers directly from the written document submitted by employees, employers must specify the purpose of use to the relevant employee. Employersare encouraged to make standard procedures for obtaining Individual Numbers from their employees more efficient by specify more than one purpose of use, such as for both unemployment insurance and health insurance. Employers are requested to report the Individual Numbers of existing employees and their dependents to the Health Insurance Society sometime after January (Acquisition of Individual Numbers of existing employees for the unemployment insurance is currently being reviewed, and detailed decision will be announced at a later date.)

19 These are formats revised for unemployment insurance documents Specifichanges in documents being submitted by business owners in regards to the unemployment insurance are as follows: Individual Number fields will be addedin the following documents to be submitted to Hello Work. Written notice of acquisition of the employment insurance qualification, Notification f loss o of qualification, Notification of change of name, Confirmation and application for qualification to continuous payment for older worker, Confirmation and application for qualification for child care leave allowance, and Application for family care leave allowance Makeuse of the page in the Ministry of Health, Labour and Welfare website with summary of Individual Number information related to unemployment insurance.

20 These are formats revised for health insurance and welfare pension Specific changes in documents being submitted by business owners in regards to health insurance and welfare pension applications are as follows. An Indiv idual Number field will be added to the following documents to be submitted to the Japan Pension Service and Health Insurance Society Notification of or loss of qualification for health insurance / welfare pension, Notification of or changes in the base amount for calculation of monthly compensation for health insurance /welfare pension, and Notification of change in health insurance dependents / Notification of Insured Individual for National Pension Category III Individual Numbers areused to link information among administrative agents, which enables omission of previously required resident registry and certificate of annual income to be submitted to the Japan Pension Service and Health Insurance Society.

21 These are applications revisions related to health insurance payment procedures Specific changes in administrative procedures for health insurance paymentare as follows: Application for a reduction in an amount obtained by deducting the dietary therapy standard costsharing, Ap plication for a reduction in an amount obtained by deducting the standard liability amount, Application for payment of medical expenses, and Application for payment of allowance for sick and wounded Individual Numbers will be required in above applications. The above administrativeprocedures are currently performed by the individual or via business owners with applications submitted to the Health Insurance Society or the Japan Health Insurance Association. Methodof Individual Numbers provision and identification of individuals when the above administrative procedures are performed by business owners will be explained in the Q&A at a later date.

22 This is an example of the new Notification of qualification for health insurance / welfare pension. Individual Numbers of the insured are required. As a rule, basic pension numbers are not required; however, as stated in the instructions on the reverse side, individuals living abroad or residing in Japan on short-term visas are not issued Individual Numbers and will need to provide basic pension numbers as a substitute for the Individual Numbers.

23 No changes are made on social security-related forms listed here We have received many questions from business owners regarding the need to provide Individual Numbers on various forms. The forms listed here do not require Individual Numbers. In view of additional administrative burden and risk of leakage, notification documents from the public administrations will not have Individual Numbers.

24 Please specify the purpose of use when requesting Individual Numbers Requesting andusing Individual Numbers for purposes other than those stipulated by law is prohibited. Even if permission is granted by the relevant individual, it is illegal to request or use the Individual Number of another person for purposes other than those stipulated by law. When obtaining Individual Numbers fromemployees, the legally permitted purpose of use must be clearly set forth, and announced or disclosed as such to the relevant individuals. When the IndividualNumbers are to be used for multiple purposes, such as income tax, medical insurance or unemployment insurance, these reasons can be given together; however, it is not be possible to add another purpose of use later. In such case, the individuals must be informed as such once again. To prevent spoofing, perform identity verification in a strict manner Verification of individuals by number only creates thepotential for spoofing; and the Japanese system does not permit the use of Individual Numbers as means of identification. In addition to checking the accuracy of the number, identity must be verified to ensure that the individual is the rightful owner of the number. Procedures undertaken by proxy requireconfirmation with (1) a copy of the relevant individual s family register by a statutory agent, or power of attorney by mandatary agent to validate the individuals that will be executing the operation, (2) identification of proxy, and (3) the Individual Number of the relevant person.

25 ID and Individual Numbers are required for verification The Individual Number Card held by employees enables confirmationof number and verification of the individual. As a rule, employees who do not have Individual Number Cards need to be verified with the notification card mailed to them in October However, notification cards will not have ID photos and are not sufficient for verification of the individual; therefore, individuals need to present photo ID such as a drivers license or passport to have their identity verified. Examples aregiven for difficult-to-handle situations. Detailed decisions have been made regarding documents that will require the Numbers and verify identity. Ifusers can definitely identity the individual through their employment relationship, there is no need to submit documents for verification. Please refer to the especiallyset up Individual Number page on the Cabinet Secretariat website, and on the National Tax Agency website for more information about identity verification.

26 There are cases in which Individual Numbers of dependents are required There are comments about what to do for verification of employee dependent identities when their Individual Numbers are required for administrative purposes. In regard to the submissionof Declaration of exemption for dependents and others, employees are responsible for submission to their employers, and the responsibility to verify the identity of dependents falls on the employees. Private businesses are not responsible for verifying the identity of employees dependents. On the other hand, in regardto the submission of the Application for Category III of the National Pension, dependent individuals are responsible for the submission, and employees must verify the identity of dependents with the Individual Numbers. There are two ways to verify identity. (A) When employees become the proxy for dependents In this case, when Individual Numbers are submitted through dependents (Individual Number) employee (as proxy to dependent), there is no need to verify identity. Next, when Individual Numbers are submitted through an employee (as proxy to dependent) (Individual Number) Company, the identity of the employee (as proxy to dependent) must be verified by the company (Verify authority of proxy + ID of proxy + check Individual Numbers of employee) (B) When employees become the proxy for the company In this case, when Individual Numbers are submitted through dependents (Individual Number) employee (as proxy to the company), the employee (as proxy to the company) verifies the identity of the dependents (check Individual Number + ID) If Individual Numbers are submitted through employee (proxy to the company) Individual Num ber company, there is no need to verify the identity of the dependents.

27 Guidelines are available for easy-to-understand explanations on the handling of Individual Numbers Various concerns have been expressed about the initiation of Individual Numbers, such as the possibility of search and comparison of personal information and information leakage, the possibility of financial damage from spoofing using someone else s Individual Numbers and many other concerns. To ensure the appropriatehandling of specific personal information, the Individual Number System employs various protective measures. The Specific Personal Information Protection Commission created easy-to-understand guidelines with explanations about these protective measures and their interpretation using specific examples. The guidelines are based on the interviews and discussions with administrative officers of private businesses so that Individual Numbers are appropriately handled at administrative sites. In addition to guidel ines for business operators, there are also guidelines for finance-related companies, public administration and regional public organizations.

28 There are restrictions to the use, provision and collection of Individual Numbers Firstly, the range of use of Individual Numbers is limited to social security, tax and disaster response, as stipulated by current law. Individual Numbers can only be requested when required for the preparation of documents related to social security and taxation. It is not possible, for example, to use the Individual Numbers as employee or customer numbers. Request for Individual Numbers are limited to the purposes permitted by law. For the application of certificate of income and tax withholding, employees provide theirindividual Numbers along with their dependents Individual Numbers. As a rule, Individual Numbers are requested whenthe relevant administrative task arises; however, it is possible to request Individual Numbers when foreseeing administrative procedures that require the provision of Individual Numbers. Collection of specific personal information is limited to circumstances recognized by law. Takingnotes on, printing out, and copying another person s Individual Number are considered collection, and merely receiving Individual Numbers is not considered collection.

29 Safety management measures need to be implemented by parties commissioned with administrative tasks that require the use of Individual Numbers In the event all or part of administrat ive document preparation for social security and tax are commissioned to a third party, the consignor must execute appropriate and necessary supervision to ensure that safety management measures equivalent to that of their own are put in place by the consignee. Specifically, (1)the consignee must be appropriately selected, (2) an agreement must be concluded to ensure that the consignees comply with safety management measures, and (3) the consignor must ascertain the handling of specific personal information by the consignee. The consignormust check equipment, technical standards, supervision and training of employees and other business environments of the consignee prior to the commissioning of the work. An agreementmust be concluded that includes a clause on confidentiality, the prohibition of the taking of specific personal information outside the office, prohibition of the use of specific personal information for purposes other than specified, the return or destruction of specific personal information after completion of the consignment agreement, the supervision and training of employees, and a report must be submitted to the consignor regarding the status of compliance with the agreement. The consignor is responsiblefor supervising the consignee, and also responsible for indirect supervision of re-consigned companies. The consignee commissionedto conduct all or part of the administrative work for social security and tax may re-consign the work only when consent is obtained from the original consignor.

30 Appropriate organizational safety management measures for Individual Numbers must be put into place Business operators must implement essential and appropriate safety management measures to prevent leakage, loss or impairment and for other appropriate management of Individual Numbers and specific personal information, as well as execute essential and appropriate supervision of their employees. It is important to clarify the range of administrativework that requires the handling Individual Numbers and specific personal information. The guidelines provide safety management measures that business operators should take. Some of the recommended measures include the establishment of a basic policy, the establishment of rules, and systematic, personnel, physical and technical safety management measures. In the basic policy, it is important to clarify fundamental principles for the protection of specific personal information and policies for legal compliance, safety management, inquiries and complaints should be put in place. The establishment of a basic policy is not compulsory; however, it has the merit of publicizing the stance of the company and providing training to employees. The establishment of rules involves the preparation of manuals and documents that show the flow of administrative work that requires the use of specific personal information for the preparation documents such as certificates of income and tax withholding and payment records. Such manuals and documents should be easily accessible by employees. Systematic measures are assigning of persons in charge and the structuring of a system that prohibits the handling of specific personal information by employees that are not assigned to the work. Personnel measures are e thsupervision and training of employees Physical measures are measures to prevent the leakage or theft of specific personal information, and refer to the placement of steps that restrict handling to the person in charge. Specifically, walls and partitions are to be set up, desks placed in a manner that prevents peeping by others, and the storing of documents in cabinets with locks. Technical measures are the restriction of access to the person in charge, the introduction of anti-virus software and updating of the computer to its most advanced condition. A special rule is set for small and medium enterprises with less than 100 employees in consideration of its effect on business operations.

31 Restrictions for the retention (disposal) of Individual Numbers Specific personal information that includesindividual Numbers may not be retained as stipulated by law. Such information can only be retained as required for the execution of administrative processes. Documentswith Individual Numbers can be retained for the specific period permitted by law. One example is the retaining of Individual Numbers of employees in a continuousrelationship under an employment agreement for the preparation of certificates of income and tax withholding, health insurance and welfare pension documents expected to be prepared in following years, which makes it possible to retain such personal information. On the other hand, becausethe collection and retention of specific personal information is prohibited by law, with exceptions as indicated for a limited extent, when the preparation of documents related to social security and taxation are no longer required and the storage period stipulated by the jurisdiction laws have lapsed, Individual Numbers must be disposed or deleted as soon as possible. It is possible to continue holding the document if Individual numbers are deleted or masked to an un-restorable level. In thisway, there are restrictions on the retention (disposal) of Individual Numbers. It is desirable to manage paper documents by year on the assumption that they will eventually be disposed of or deleted, or structure a system on the computer to delete Individual Numbers that are no longer required.

32 Corporations will be issued Corporate Numbers (13-digit), and unlike Individual Numbers, Corporate Numbers can be used freely by anyone The Commissioner of the National Tax Agency issues 13 -digit Corporation Numbers to (1) registered corporations, (2) national agencies, (3) regional public bodies, and (4) other corporations and organizations. The above-listed corporate bodies will receive Corporate Numbers without having to take any special steps. Corporatebodies other than the above that meet certain criteria may apply to the Commissioner of the National Tax Agency for a Corporate Number. OneCorporate Number will be issued to one corporation, and separate Corporate Numbers will not be given to branch offices or factories. Notification of Corporate Numberswill be sent starting October Notification of Corporate Numbers will be sent, for registered corporations for example, to the registered head office or the location of the main business office. Please keep in mind that if you have moved the location of your office and have not reported the change, the notification will be sent to the previous address. The Commissioner of the NationalTax Agency will publish via Internet (official site for Corporate Numbers on the National Tax Agency website) (1) name, (2) address, and (3) Corporate Number of corporate bodies to which the Corporate Numbers have been issued. Different from Individual Numbers, there is no restriction on the use of Corporate Numbers, and anyone can obtain and use the Numbers via the Internet.

33 Corporate Numbers, name and location of the company will be posted on the Internet to be downloaded There are four features described belowregarding the Corporate Number page on the National Tax Agency website (1) Corporate Numbers can be searched by number, name of company and location (2) The 3 categories of corporate data can be downloaded for use on your PC (3) Web-API function is provided (4) The data corresponds not only to PCs but to other devices, such as tablets and smartphones To be specific, searches can be conducted with ambiguous or refined parameters, and results can be rearranged by alphabetical order or by prefecture. Some of the data download functionsinclude download of the most recent information on all corporate bodies issued Corporate Numbers as of the end of the month, and download of the updated information of the day. Datacan be downloaded in CSV or XML format. The Web-API function enables direct acquisition of corporate information from the systems of the relevant corporation without the assistance of another person, and the website provides an interface for this function.

34 Explanation of the objectives and merit of the Corporate Number System are explained below Ashown in the 3 boxes in the middle of the material, Corporate Numbers enable efficiency in administration, improves the convenience of citizens (corporations), realize a fairer and most just society, and create new values. These merits of the Corporate Number System are expressed by Wakaru, Tsunagaru, Hirogaru(Know, link and expand) Explanations of these terms follows: Wakaru (to know) signifies that Corporate Numbers make it possible to obtain the name and location of a company. Search of Corporate Numbers is possible by using the number as keyword to obtain the name and address of the company in a very simple manner. It also makes it possible to obtain the newest name and address information, which allows for more efficient registration and update of client information. Tsunagaru(to link) signifies that corporations can be linked through Corporate Numbers. When corporate information needs to be shared between businesses and administrative bodies, adding Corporate Numbers to the client information managed with different codes by multiple departments, divisions and by group companies, enables the putting together of all transaction information of different sections and group companies making name gathering more efficient. Hirogaru (to expand) signifies that servicescan be expanded using Corporate Numbers. With certain presuppositions, if information is shared among administration agencies using Corporate Numbers, and administration procedures such as notifications and applications can be conducted in a one-stop system, the burden on the corporate bodies (companies) can be reduced. In the private sector, if a foundation to share corporate information is established using Corporate Numbers, documents required for business transactions can be reduced, which makes office work more efficient. It will also become possible to provide useful corporate information to citizens.

35 Please begin preparation for the start of the Individual Number System First, it is necessary to establish handling policy based on an understanding of the flow followed from receipt to disposal of Individual Numbers. Tobe specific, decide on an organizational system for the department, division or person in charge. Thereafter, it is necessary to decide on a handling policy for the company. All tasks necessary for preparation should be listed and organized according to what needs to be done and when it needs to be completed. Some of tasksmight be corporate rules review, computer systems, safety management measures for personal information, and employee training and study sessions. If computer systems need to be improved, it is necessary to decideon specific improvement schedules as soon as possible. In regard to the review of corporate rules and safety management measures, they must be revised to comply with guidelines. It s ialso important for all employees, not just the main persons in charge, to understand the Individual Number System. Please consider providing employee training and study sessions throughout the year.

36 Information and materials are available for download from websites The Individual Number System Introduction Checklist for small businesses with a small number of employees can be used as a tool to inform your employees about the system. The two-sided checklist can be printed out and circulated among employees or posted on notice boards. Videos, introductory materials and more that can also be freely downloaded. You are encouraged to make use of these items.

37 Initiation of the Individual Number System will make living more convenient The Indi vidual Number System enables the provision of benefits and appropriate support to those who are actually in need. The System will also reduce the number of documents required for pension and welfare-related applications, making administrative procedures simpler. The IndividualNumber Card and Mynaportal may be utilized without Individual Numbers. To make this possible, a method that will ensure effective use will be reviewed for both the public and private sectors. The Individual Number CardSystem will move toward unification of various cards (one-card system). A significant number of regional public offices have set up systems that allows the issuance of resident registries at convenience stores using the IC chip in the Card, and the number is increasing. Informationtargeting specific individuals, such as announcements for vaccines, will be provided by the regional offices through Mynaportal, which can be checked on PCs and smartphones. In the future, we hopeto make it possible for individuals to notify electric, gas and water companies that they are moving from PCs at home at one stop.

38 The most recent information will be posted on the website, and a call center has been set up to answer questions FAQ(Frequently asked questions) and the most recent information about the Individual Number System, and other relevant materials are posted on the Social Security and Tax Number System (My Number) section of the Cabinet Secretariat website. Please search with the keyword My Number. Special pages have also been set up on the Specific Personal Information Protection Commission, the Ministry of Internal Affairs and Communication, the National Tax Agency, the Ministry of Health, Labour and Welfare, and other related ministry and agency websites to provide information. Related ministry and agency sites are linked from Cabinet Secr22 00etariat website. There is also a My Number page on the government s official bulletin, where you can find videos and PR material such as newspaper fliers. Please search with the keyword Seifu Koho. The official twitter account also provides updated website information for ministries and agencies. The My Number Call Center is also open to answer any questions at one stop. Please feel free to inquire. The Call Center is open from 9:30 to on weekdays, excluding year -end and New Year holidays. The number is ( for non-japanese speakers). Lastly Individual Numbers will be announced fromoctober 2015 and initiated January Busines s owners are asked to prepare for the initiation of the system and hold employee training at your establishments.