Article 3(1)The amount calculated as specified by Cabinet Order prescribed in Article 5-2, paragraph (1) and paragraph (3) of the Act is the amount specified respectively in the following items for the category of cases listed in the relevant items:

(2)Where a nonresident or foreign corporation that is the trustee of a qualified foreign securities investment trust prescribed in Article 5-2, paragraph (2) of the Act (hereinafter referred to as a "Qualified Foreign Securities Investment Trust" in this Article) seeks the application of the provisions of Article 5-2, paragraph (1) of the Act with respect to interest on Book-Entry National Government Bonds or Book-Entry Local Government Bonds to be received thereby for the trust property under the Qualified Foreign Securities Investment Trust, the nonresident or foreign corporation is to submit, for each Qualified Foreign Securities Investment Trust accepted thereby, a written application for tax exemption of Book-Entry National Government Bonds prescribed in Article 5-2, paragraph (1), item (i), (a) of the Act (hereinafter referred to as a "Written Application for Tax Exemption of Book-Entry National Government Bonds" in this Article) and a statement of the Holding Period of Book-Entry National Government Bonds prescribed in Article 5-2, paragraph (1), item (i), (b) of the Act (referred to as a "Statement of the Holding Period of Book-Entry National Government Bonds" in paragraphs (7) to (9)), or a Written Application for Tax Exemption of Book-Entry Local Government Bonds prescribed in Article 5-2, paragraph (1), item (ii), (a) of the Act (hereinafter referred to as a "Written Application for Tax Exemption of Book-Entry Local Government Bonds" in this Article) and a statement of the Holding Period of Book-Entry Local Government Bonds prescribed in Article 5-2, paragraph (1), item (ii), (b) of the Act (referred to as a "Statement of the Holding Period of Book-Entry Local Government Bonds" in paragraph (7), paragraph (8) and paragraph (11)), to the district director of the tax office prescribed in prescribed in Article 5-2, paragraph (1), item (i), (a) of the Act pursuant to the provisions of Article 5-2, paragraph (1), item (i), (a) and (b) of the Act, or the district director of the tax office prescribed in Article 5-2, paragraph (1), item (ii), (a) of the Act pursuant to the provisions of Article 5-2, paragraph (1), item (ii), (a) and (b) of the Act.

(3)Where a nonresident or foreign corporation makes, for the first time, entries or records under the book-entry system (meaning entries or records under the book-entry system prescribed in Article 5-2, paragraph (5), item (vi) of the Act; hereinafter the same applies in this Article) with regard to Book-Entry National Government Bonds (limited to those bearing interest; hereinafter referred to as "Interest-Bearing Book-Entry National Government Bonds" in this paragraph, paragraph (5) and paragraph (22)) in the account listed respectively in the following items, if the person specified in the relevant items for the category of accounts listed in the relevant items has, when the entries or records under the book-entry system are made, prepared a document containing the name of the nonresident or foreign corporation and their or its address as prescribed in Article 5-2, paragraph (1), item (i), (a) of the Act (hereinafter referred to as "Address" in this paragraph, paragraph (5) and paragraph (22)) and any other particulars specified by Ministry of Finance Order (hereinafter referred to as a "Document on Special Measures for Book-Entry National Government Bonds" in this paragraph and the following paragraph) and submitted the Document on Special Measures for Book-Entry National Government Bonds to the district director of the tax office prescribed in Article 5-2, paragraph (1), item (i), (a) of the Act (in the case where the specified book-entry institution, etc. (meaning a specified book-entry institution, etc. prescribed in paragraph (1) of the same Article; hereinafter the same applies in this Article) pertaining to the person specified in the relevant items is a Specified Account Management Institution prescribed in Article 5-2, paragraph (5), item (ii) of the Act (hereinafter referred to as a "Specified Account Management Institution" in this Article), if the person has submitted the relevant document to the district director of the tax office via a specified book-entry institution prescribed in paragraph (5), item (i) of the same Article (hereinafter referred to as a "Specified Book-Entry Institution" in this Article); in the case where the Specified Book-Entry Institution, etc. pertaining to the person specified in the relevant items is a Specified Indirect Account Management Institution prescribed in paragraph (5), item (iii) of the same Article (hereinafter referred to as a "Specified Indirect Account Management Institution" in this Article), if the person has submitted the relevant document to the district director of the tax office via [1] the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Interest-Bearing Book-Entry National Government Bonds (in the case where the Specified Book-Entry Institution, etc. pertaining to the person specified in the relevant items makes entries or records under the book-entry system regarding the Interest-Bearing Book-Entry National Government Bonds through any other Specified Indirect Account Management Institution, via the relevant other Specified Indirect Account Management Institution and the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Interest-Bearing Book-Entry National Government Bonds) and [2] a Specified Book-Entry Institution), the nonresident or foreign corporation is deemed to have submitted a Written Application for Tax Exemption of Book-Entry National Government Bonds pursuant to the provisions of Article 5-2, paragraph (1), item (i), (a) of the Act with respect to the Interest-Bearing Book-Entry National Government Bonds; provided, however, that this does not apply where the name and Address to be entered in the Document on Special Measures for Book-Entry National Government Bonds are inconsistent with the name and Address of the nonresident or foreign corporation for which a confirmation has been provided pursuant to the provisions of paragraph (9) of the same Article (including the cases where it is applied mutatis mutandis pursuant to paragraph (12) of the same Article) with respect to Book-Entry Local Government Bonds (hereinafter referred to as a "Confirmation Concerning Book-Entry Local Government Bonds" in this paragraph, the following paragraph and paragraph (22)) or a confirmation has been provided pursuant to the provisions of Article 41-12, paragraph (12) of the Act with respect to short-term national government bonds, etc. (meaning national government bonds listed in paragraph (9), items (i) to (viii) of the same Article that fall under the category of specified short-term government or company bonds prescribed in the same paragraph, and principal-only Book-Entry National Government Bonds and coupon-only Book-Entry National Government Bonds prescribed in paragraph (12) of the same Article) (including a confirmation provided pursuant to the provisions of Article 26-18, paragraph (6); hereinafter referred to as a "Confirmation Concerning Short-Term National Government Bonds, etc." in this Article):

(4)In the case referred to in the preceding paragraph, the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. who has submitted a Document on Special Measures for Book-Entry National Government Bonds pursuant to the provisions of the same paragraph must, without delay after the date of the submission, give a notice of the submission of the Document on Special Measures for Book-Entry National Government Bonds to the nonresident or foreign corporation that is to be deemed to have submitted a Written Application for Tax Exemption of Book-Entry National Government Bonds pursuant to the provisions of the same paragraph (in the case where a Confirmation Concerning Book-Entry Local Government Bonds or a Confirmation Concerning Short-Term National Government Bonds, etc. with regard to the nonresident or foreign corporation is provided by the head of a Specified Overseas Business Office, etc. of a Qualified Foreign Intermediary, notice must be given to the nonresident or foreign corporation via the head of the Specified Overseas Business Office, etc.).

(5)Where a nonresident or foreign corporation makes, for the first time, entries or records under the book-entry system with regard to Book-Entry Local Government Bonds in an account listed respectively in the following items, if the person specified in the relevant items for the category of accounts listed in the relevant items has, when the entries or records under the book-entry system are made, prepared a document containing the name of the nonresident or foreign corporation and their or its Address and any other particulars specified by Ministry of Finance Order (hereinafter referred to as a "Document on Special Measures for Book-Entry Local Government Bonds" in this paragraph and the following paragraph) and submitted the Document on Special Measures for Book-Entry Local Government Bonds to the district director of the tax office prescribed in Article 5-2, paragraph (1), item (ii), (a) of the Act via the person who pays interest on the Book-Entry Local Government Bonds (in the case where the Specified Book-Entry Institution, etc. pertaining to the person specified in the relevant items is a Specified Account Management Institution, if the person has submitted the relevant document to the district director of the tax office via a Specified Book-Entry Institution and the person who pays the interest; in the case where the Specified Book-Entry Institution, etc. pertaining to the person specified in the relevant items is a Specified Indirect Account Management Institution, if the person has submitted the relevant document to the district director of the tax office via [1] the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Interest-Bearing Book-Entry Local Government Bonds (in the case where the Specified Book-Entry Institution, etc. pertaining to the person specified in the relevant items makes entries or records under the book-entry system regarding the Interest-Bearing Book-Entry Local Government Bonds through any other Specified Indirect Account Management Institution, via the relevant other Specified Indirect Account Management Institution and the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Interest-Bearing Book-Entry Local Government Bonds), [2] a Specified Book-Entry Institution, and [3] the person who pays the interest), the nonresident or foreign corporation is deemed to have submitted a Written Application for Tax Exemption of Book-Entry Local Government Bonds pursuant to the provisions of Article 5-2, paragraph (1), item (ii), (a) of the Act with respect to the Interest-Bearing Book-Entry Local Government Bonds; provided, however, that this does not apply where the name and Address to be entered in the Document on Special Measures for Book-Entry Local Government Bonds are inconsistent with the name and Address of the nonresident or foreign corporation for which a confirmation has been provided pursuant to the provisions of paragraph (9) of the same Article (including the cases where it is applied mutatis mutandis pursuant to paragraph (12) of the same Article; hereinafter the same applies in this paragraph) with respect to other Book-Entry Local Government Bonds (hereinafter referred to as a "Confirmation Concerning Other Book-Entry Local Government Bonds" in this paragraph, the following paragraph and paragraph (23)), a confirmation has been provided pursuant to the provisions of paragraph (9) of the same Article with respect to Interest-Bearing Book-Entry National Government Bonds (hereinafter referred to as a "Confirmation Concerning Interest-Bearing Book-Entry National Government Bonds" in this paragraph, the following paragraph and paragraph (23)) or a Confirmation Concerning Short-Term National Government Bonds, etc. has been provided:

(6)In the case referred to in the preceding paragraph, the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. who has submitted a Document on Special Measures for Book-Entry Local Government Bonds pursuant to the provisions of the same paragraph must, without delay after the date of the submission, give a notice of the submission of the Document on Special Measures for Book-Entry Local Government Bonds, to the nonresident or foreign corporation that is deemed to have submitted a Written Application for Tax Exemption of Book-Entry Local Government Bonds pursuant to the provisions of the same paragraph (in the case where a confirmation concerning other Book-Entry Local Government Bonds, a Confirmation Concerning Interest-Bearing Book-Entry National Government Bonds or a Confirmation Concerning Short-Term National Government Bonds, etc. with regard to the nonresident or foreign corporation is provided by the head of a Specified Overseas Business Office, etc. of a Qualified Foreign Intermediary, the notice must be given to the nonresident or foreign corporation via the head of the Specified Overseas Business Office, etc.).

(7)The head of a Business Office, etc. of a Specified Book-Entry Institution, etc. or head of a Specified Overseas Business Office, etc. of a Qualified Foreign Intermediary must, where a statement of the Holding Period of Book-Entry National Government Bonds or statement of the Holding Period of Book-Entry Local Government Bonds has been submitted, confirm whether or not the Holding Period and other particulars specified by Ministry of Finance Order with regard to the Book-Entry National Government Bonds or Book-Entry Local Government Bonds entered in the statement of the Holding Period of Book-Entry National Government Bonds or statement of the Holding Period of Book-Entry Local Government Bonds are consistent with the day on which entries or records under the book-entry system were made with regard to the Book-Entry National Government Bonds or Book-Entry Local Government Bonds and other particulars specified by Ministry of Finance Order as entered or recorded in the books prescribed in Article 5-2, paragraph (13) of the Act (referred to as the "books for book-entry" in paragraph (9), paragraph (11) and paragraph (24)).

(8)Where a nonresident or foreign corporation submits a statement of the Holding Period of Book-Entry National Government Bonds or a statement of the Holding Period of Book-Entry Local Government Bonds via a Qualified Foreign Intermediary to the district director of the tax office set forth in Article 5-2, paragraph (1), item (i), (b) or item (ii), (b) of the Act (including the cases where a Qualified Foreign Intermediary submits the document set forth in the following paragraph pursuant to the provisions of the same paragraph as applied mutatis mutandis pursuant to paragraph (10)), the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. that has received a notice set forth in paragraph (14) of the same Article pursuant to the provisions of the same paragraph must confirm whether or not the Holding Period and other particulars specified by Ministry of Finance Order with regard to the Book-Entry National Government Bonds or Book-Entry Local Government Bonds entered in the statement of the Holding Period of Book-Entry National Government Bonds or statement of the Holding Period of Book-Entry Local Government Bonds or the document are consistent with the day on which entries or records under the book-entry system were made with regard to the Book-Entry National Government Bonds or Book-Entry Local Government Bonds and other particulars specified by Ministry of Finance Order as entered or recorded in the books prescribed in the same paragraph.

(9)Where a Specified Book-Entry Institution, etc. has, pursuant to the provisions of Article 5-2, paragraph (9) of the Act (including the cases where it is applied mutatis mutandis pursuant to paragraph (12) of the same Article), prepared and preserved a copy of a document prescribed in paragraph (9) of the same Article that has been presented thereto by a nonresident or foreign corporation, and the nonresident or foreign corporation receives payment of interest on the Book-Entry National Government Bonds for which they or it has made entries or records under the book-entry system through the Specified Book-Entry Institution, etc., if the Specified Book-Entry Institution, etc. has, no later than the day preceding the day on which the nonresident or foreign corporation is to receive payment of the interest, prepared a document containing the Holding Period and any other particulars specified by Ministry of Finance Order with regard to the Book-Entry National Government Bonds held by the nonresident or foreign corporation based on the books for book-entry that the Specified Book-Entry Institution, etc. keeps, and submitted the document to the district director of the tax office set forth in paragraph (1), item (i), (b) of the same Article (in the case where the Specified Book-Entry Institution, etc. is a Specified Account Management Institution, if the Specified Book-Entry Institution, etc. has submitted the document to the district director of the tax office via a Specified Book-Entry Institution; in the case where the Specified Book-Entry Institution, etc. is a Specified Indirect Account Management Institution, if the Specified Book-Entry Institution, etc. has submitted the document to the district director of the tax office via [1] the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds (in the case where the Specified Book-Entry Institution, etc. makes entries or records under the book-entry system regarding the Book-Entry National Government Bonds through any other Specified Indirect Account Management Institution, via the relevant Other Specified Indirect Account Management Institution and Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds) and [2] a Specified Book-Entry Institution), the nonresident or foreign corporation is deemed to have submitted a statement of the Holding Period of Book-Entry National Government Bonds pursuant to the provisions of item (i), (b) of the same paragraph with respect to the interest receivable thereby.

(10)The provisions of the preceding paragraph apply mutatis mutandis where a nonresident or foreign corporation receives payment of interest on the Book-Entry National Government Bonds for which they or it has made entries or records under the book-entry system through a Qualified Foreign Intermediary.In this case, in the same paragraph, the term "to the district director of the tax office set forth in paragraph (1), item (i), (b) of the same Article" is deemed to be replaced with "to the district director of the tax office set forth in paragraph (1), item (i), (b) of the same Article via the Specified Book-Entry Institution, etc. pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds"; the term "(in the case where the Specified Book-Entry Institution, etc. is a Specified Account Management Institution, if the Specified Book-Entry Institution, etc. has submitting the document to the district director of the tax office via a Specified Book-Entry Institution; in the case where the Specified Book-Entry Institution, etc. is a Specified Indirect Account Management Institution" is deemed to be replaced with "(in the case where the Specified Book-Entry Institution, etc. is a foreign further indirect account management institution prescribed in paragraph (5), item (vii) of the same Article (hereinafter referred to as a "Foreign Further Indirect Account Management Institution" in this paragraph"; the term "the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds (" is deemed to be replaced with "the Foreign Indirect Account Management Institution prescribed in paragraph (5), item (viii) of the same Article (hereinafter referred to as "Foreign Indirect Account Management Institution" in this paragraph) pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds ("; the term "any other Specified Indirect Account Management Institution" is deemed to be replaced with "any other Foreign Further Indirect Account Management Institution"; and the term "the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds) and [2] a Specified Book-Entry Institution" is deemed to be replaced with "the Foreign Indirect Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds) and [2] the Specified Book-Entry Institution, etc. pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds".

(11)Where a Specified Book-Entry Institution, etc. has, pursuant to the provisions of Article 5-2, paragraph (9) of the Act (including the cases where it is applied mutatis mutandis pursuant to paragraph (12) of the same Article), prepared and preserved a copy of a document prescribed in paragraph (9) of the same Article that has been presented thereto by a nonresident or foreign corporation, and the nonresident or foreign corporation receives payment of interest on the Book-Entry Local Government Bonds for which they or it has made entries or records under the book-entry system through the Specified Book-Entry Institution, etc., if the Specified Book-Entry Institution, etc. has, no later than the day preceding the day on which the nonresident or foreign corporation is to receive payment of the interest, prepared a document containing the Holding Period and any other particulars specified by Ministry of Finance Order with regard to the Book-Entry Local Government Bonds held by the nonresident or foreign corporation based on the books for book-entry that the Specified Book-Entry Institution, etc. keeps, and submitted the document to the district director of the tax office set forth in paragraph (1), item (ii), (b) of the same Article via the person who pays interest on the Book-Entry Local Government Bonds (in the case where the Specified Book-Entry Institution, etc. is a Specified Account Management Institution, if the Specified Book-Entry Institution, etc. has submitted the document to the district director of the tax office via a Specified Book-Entry Institution and the person who pays the interest; in the case where the Specified Book-Entry Institution, etc. is a Specified Indirect Account Management Institution, if the Specified Book-Entry Institution, etc. has submitted the document to the district director of the tax office via [1] the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry Local Government Bonds (in the case where the Specified Book-Entry Institution, etc. makes entries or records under the book-entry system regarding the Book-Entry Local Government Bonds through any other Specified Indirect Account Management Institution, via the relevant other Specified Indirect Account Management Institution and the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry Local Government Bonds), [2] a Specified Book-Entry Institution, and [3] the person who pays the interest), the nonresident or foreign corporation is deemed to have submitted a statement of the Holding Period of Book-Entry Local Government Bonds pursuant to the provisions of item (ii), (b) of the same paragraph with respect to the interest receivable thereby.

(12)The provisions of the preceding paragraph apply mutatis mutandis where a nonresident or foreign corporation receives payment of interest on the Book-Entry Local Government Bonds for which they or it has made entries or records under the book-entry system through a Qualified Foreign Intermediary.In this case, in the same paragraph, the term "via the person who pays interest on the Book-Entry Local Government Bonds" is deemed to be replaced with "via the Specified Book-Entry Institution, etc. pertaining to the entries or records under the book-entry system regarding the Book-Entry Local Government Bonds and the person who pays interest on the Book-Entry Local Government Bonds"; the term "(in the case where the Specified Book-Entry Institution, etc. is a Specified Account Management Institution, if the Specified Book-Entry Institution, etc. has submitted the document to the district director of the tax office via a Specified Book-Entry Institution and the person who pays the interest; in the case where the Specified Book-Entry Institution, etc. is a Specified Indirect Account Management Institution" is deemed to be replaced with "(in the case where the Specified Book-Entry Institution, etc. is a Foreign Further Indirect Account Management Institution prescribed in paragraph (5), item (vii) of the same Article (hereinafter referred to as a "Foreign Further Indirect Account Management Institution" in this paragraph"; the term "the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds (" is deemed to be replaced with "the Foreign Indirect Account Management Institution prescribed in paragraph (5), item (viii) of the same Article (hereinafter referred to as a "Foreign Indirect Account Management Institution" in this paragraph) pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds ("; the term "any other Specified Indirect Account Management Institution" is deemed to be replaced with "any other Foreign Further Indirect Account Management Institution"; and the term "the Specified Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry Local Government Bonds), [2] a Specified Book-Entry Institution" is deemed to be replaced with "the Foreign Indirect Account Management Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry Local Government Bonds), [2] the Specified Book-Entry Institution pertaining to the entries or records under the book-entry system regarding the Book-Entry Local Government Bonds".

(13)The interest specified by Cabinet Order prescribed in Article 5-2, paragraph (3) of the Act is the interest listed as follows:

(14)A person who intends to obtain the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act must attach, to a document containing the person's name and the location of the person's head office or principal office and any other particulars specified by Ministry of Finance Order, a document in which a Specified Book-Entry Institution certifies that the person is a foreign account management institution prescribed in paragraph (5), item (vii) of the same Article and any other document specified by Ministry of Finance Order, and submit those documents, in the case of Book-Entry National Government Bonds, to the district director of the tax office prescribed in paragraph (1), item (i), (a) of the same Article via the Specified Book-Entry Institution pertaining to the Book-Entry National Government Bonds, or in the case of Book-Entry Local Government Bonds, to the district director of the tax office prescribed in item (ii), (a) of the same paragraph via the Specified Book-Entry Institution pertaining to the Book-Entry Local Government Bonds and the person who pays interest on the Book-Entry Local Government Bonds.

(15)Where a written application set forth in the preceding paragraph has been submitted, the district director of the tax office, when making a disposition to approve or dismiss the application, gives a notice in writing to the person who has submitted the application to that effect.

(16)Where a written application set forth in paragraph (14) has been submitted, if a disposition to approve or dismiss the application has not been made by the final day of the month following the month that includes the day on which the written application was submitted, it is deemed that approval has been granted as of that day.

(17)The district director of the tax office, when the district director makes a disposition to rescind approval pursuant to the provisions of Article 5-2, paragraph (7) of the Act, gives a notice in writing to the person who has obtained the approval to that effect.

(18)With respect to the application of the provisions of paragraph (14) in the case where a person who intends to obtain the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act with regard to Book-Entry National Government Bonds has already obtained the approval set forth in paragraph (5), item (iv) of the same Article with regard to Book-Entry Local Government Bonds, in paragraph (14), the term "a Specified Book-Entry Institution certifies" is deemed to be replaced with "the Specified Book-Entry Institution pertaining to Book-Entry National Government Bonds certifies"; the term "other particulars specified by Ministry of Finance Order" is deemed to be replaced with "and a document that certifies that the person has obtained the approval set forth in item (iv) of the same paragraph with regard to Book-Entry Local Government Bonds"; the term "submit those documents, in the case of Book-Entry National Government Bonds, to" is deemed to be replaced with "submit those documents to"; the term "to the district director of the tax office prescribed in paragraph (1), item (i), (a) of the same Article via the Specified Book-Entry Institution pertaining to the Book-Entry National Government Bonds, or in the case of Book-Entry Local Government Bonds, to the district director of the tax office prescribed in item (ii), (a) of the same paragraph via the Specified Book-Entry Institution pertaining to the Book-Entry Local Government Bonds and the person who pays interest on the Book-Entry Local Government Bonds" is deemed to be replaced with "to the district director of the tax office prescribed in paragraph (1), item (i), (a) of the same Article via the Specified Book-Entry Institution pertaining to the Book-Entry National Government Bonds".In this case, where the written application set forth in paragraph (14) has been submitted, it is deemed that the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act has been granted at the time of the submission.

(19)With respect to the application of the provisions of paragraph (14) in the case where a person who intends to obtain the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act with regard to Book-Entry Local Government Bonds has already obtained the approval set forth in paragraph (5), item (iv) of the same Article with regard to Book-Entry National Government Bonds, in paragraph (14), the term "a Specified Book-Entry Institution certifies" is deemed to be replaced with "the Specified Book-Entry Institution pertaining to Book-Entry Local Government Bonds certifies"; the term "other particulars specified by Ministry of Finance Order" is deemed to be replaced with "and a document that certifies that the person has obtained the approval set forth in paragraph (5), item (iv) of the same Article with regard to Book-Entry National Government Bonds"; the term "submit those documents, in the case of Book-Entry National Government Bonds, to the district director of the tax office prescribed in paragraph (1), item (i), (a) of the same Article via the Specified Book-Entry Institution pertaining to the Book-Entry National Government Bonds, or in the case of Book-Entry Local Government Bonds, to" is deemed to be replaced with "submit those documents to"; the term "item (ii), (a) of the same paragraph" is deemed to be replaced with "paragraph (1), item (ii), (a) of the same Article".In this case, where the written application set forth in paragraph (14) has been submitted, it is deemed that the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act has been granted at the time of the submission.

(20)With respect to the application of the provisions of paragraph (14) in the case where a person who intends to obtain the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act with regard to Book-Entry Local Government Bonds has already obtained the approval set forth in paragraph (5), item (iv) of the same Article with regard to other Book-Entry Local Government Bonds, in paragraph (14), the term "a document in which a Specified Book-Entry Institution certifies that the person is a foreign account management institution prescribed in paragraph (5), item (vii) of the same Article and any other document specified by Ministry of Finance Order" is deemed to be replaced with "a document that certifies that the person has obtained the approval set forth in paragraph (5), item (iv) of the same Article with regard to other Book-Entry Local Government Bonds"; the term "submit those documents, in the case of Book-Entry National Government Bonds, to the district director of the tax office prescribed in paragraph (1), item (i), (a) of the same Article via the Specified Book-Entry Institution pertaining to the Book-Entry National Government Bonds, or in the case of Book-Entry Local Government Bonds, to" is deemed to be replaced with "submit those documents to"; the term "item (ii), (a) of the same paragraph" is deemed to be replaced with "paragraph (1), item (ii), (a) of the same Article".In this case, where the written application set forth in paragraph (14) has been submitted, it is deemed that the approval set forth in Article 5-2, paragraph (5), item (iv) of the Act has been granted at the time of the submission.

(21)The document specified by Cabinet Order prescribed in Article 5-2, paragraph (9) of the Act is any of the documents specified respectively in the following items for the category of persons listed in the relevant items (in the case where the person listed in the relevant items is the trustee of a Qualified Foreign Securities Investment Trust, any of the documents specified in the relevant items and the prospectus of the Qualified Foreign Securities Investment Trust or any other document similar thereto):

(22)Where a nonresident or foreign corporation makes, for the first time, entries or records under the book-entry system regarding Interest-Bearing Book-Entry National Government Bonds in the account pertaining to the entries or records under the book-entry system covered by a Confirmation Concerning Book-Entry Local Government Bonds or the account pertaining to the entries or records under the book-entry system covered by a Confirmation Concerning Short-Term National Government Bonds, etc., or submits a written application prescribed in Article 5-2, paragraph (10) of the Act pursuant to the provisions of paragraph (10) of the same Article with regard to Interest-Bearing Book-Entry National Government Bonds (hereinafter referred to as a "Written Application for a Change of Book-Entry National Government Bonds" in this paragraph, paragraph (24) and paragraph (25)), in terms of the entries and records under the book-entry system or submission, the fact that the identification documents set forth Article 5-2, paragraph (9) of the Act (including the cases where it is applied mutatis mutandis pursuant to paragraph (12) of the same Article; hereinafter the same applies in this paragraph) have been presented pursuant to the provisions of paragraph (9) of the same Article with regard to a confirmation concerning Book-Entry Local Government Bonds or that the identification documents set forth in Article 41-12, paragraph (12) of the Act have been presented pursuant to the provisions of paragraph (12) of the same Article with regard to a Confirmation Concerning Short-Term National Government Bonds, etc. (including the cases where the identification documents set forth in Article 26-18, paragraph (5) have been presented pursuant to the provisions of paragraph (5) of the same Article) is deemed to mean that the document specified by Cabinet Order set forth in Article 5-2, paragraph (9) of the Act has been presented pursuant to the provisions of paragraph (9) of the same Article, and the fact that a Confirmation Concerning the Book-Entry Local Government Bonds or a confirmation concerning the short-term national government bonds, etc. has been provided is deemed to mean that a confirmation has been provided pursuant to the provisions of the same paragraph, respectively; provided, however, that this does not apply where the name and Address entered in a Written Application for Tax Exemption of Book-Entry National Government Bonds or a Written Application for a Change of Book-Entry National Government Bonds to be submitted by the nonresident or foreign corporation are inconsistent with the name and Address of the nonresident or foreign corporation for which a Confirmation Concerning the Book-Entry Local Government Bonds or a confirmation concerning the short-term national government bonds, etc. has been provided.

(23)The provisions of the preceding paragraph apply mutatis mutandis where a nonresident or foreign corporation makes, for the first time, entries or records under the book-entry system regarding Book-Entry Local Government Bonds in the account pertaining to the entries or records under the book-entry system covered by a confirmation concerning other Book-Entry Local Government Bonds, the account pertaining to the entries or records under the book-entry system covered by a Confirmation Concerning Interest-Bearing Book-Entry National Government Bonds or the account pertaining to the entries or records under the book-entry system covered by a Confirmation Concerning Short-Term National Government Bonds, etc., or submits a written application prescribed in Article 5-2, paragraph (11) of the Act pursuant to the provisions of paragraph (11) of the same Article with regard to Book-Entry Local Government Bonds (that written application is referred to as a "Written Application for a Change of Book-Entry Local Government Bonds" in paragraph (26)).In this case, in the preceding paragraph, the term "pursuant to the provisions of paragraph (9) of the same Article with regard to a confirmation concerning the Book-Entry Local Government Bonds" is deemed to be replaced with "pursuant to the provisions of paragraph (9) of the same Article with regard to a confirmation concerning other Book-Entry Local Government Bonds or a Confirmation Concerning Interest-Bearing Book-Entry National Government Bonds"; the term "a Confirmation Concerning the Book-Entry Local Government Bonds or" is deemed to be replaced with "a confirmation concerning other Book-Entry Local Government Bonds, a Confirmation Concerning the Interest-Bearing Book-Entry National Government Bonds or"; the term "a Written Application for Tax Exemption of Book-Entry National Government Bonds or Written Application for a Change of Book-Entry National Government Bonds" is deemed to be replaced with "a Written Application for Tax Exemption of Book-Entry Local Government Bonds or Written Application for a Change of Book-Entry Local Government Bonds".

(24)When a person who has submitted a Written Application for Tax Exemption of Book-Entry National Government Bonds (including one who is deemed to have submitted a Written Application for Tax Exemption of Book-Entry National Government Bonds pursuant to the provisions of paragraph (3); hereinafter the same applies in this paragraph, the following paragraph and paragraph (28)) has made entries or records under the book-entry system regarding Book-Entry National Government Bonds through a Specified Book-Entry Institution, etc. or Qualified Foreign Intermediary, or submitted a Written Application for a Change of Book-Entry National Government Bonds to a Specified Book-Entry Institution, etc. or Qualified Foreign Intermediary, the Specified Book-Entry Institution, etc. or Qualified Foreign Intermediary must, on each occasion, for each person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds (in the case where the person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds is the trustee of a Qualified Foreign Securities Investment Trust, for each person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds and for each Qualified Foreign Securities Investment Trust accepted thereby), enter or record in the books for book-entry the particulars prescribed in Article 5-2, paragraph (13) of the Act, and preserve those books for book-entry pursuant to the provisions of Ministry of Finance Order.

(25)When a person who has submitted a Written Application for Tax Exemption of Book-Entry National Government Bonds has made entries or records under the book-entry system regarding Book-Entry National Government Bonds through a Qualified Foreign Intermediary, or submitted a Written Application for a Change of Book-Entry National Government Bonds to a Qualified Foreign Intermediary, the Qualified Foreign Intermediary must, for each person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds (in the case where the person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds is the trustee of a Qualified Foreign Securities Investment Trust, for each person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds and for each Qualified Foreign Securities Investment Trust accepted thereby), notify the particulars prescribed in Article 5-2, paragraph (14) of the Act to the Specified Book-Entry Institution, etc. prescribed in the same paragraph of the Qualified Foreign Intermediary pertaining to the Book-Entry National Government Bonds.

(26)The provisions of paragraph (24) apply mutatis mutandis where a person who has submitted a Written Application for Tax Exemption of Book-Entry Local Government Bonds (including one who is deemed to have submitted a Written Application for Tax Exemption of Book-Entry Local Government Bonds pursuant to the provisions of paragraph (5); hereinafter the same applies in this paragraph and paragraph (28)) has made entries or records under the book-entry system regarding Book-Entry Local Government Bonds through a Specified Book-Entry Institution, etc. or Qualified Foreign Intermediary, or submitted a Written Application for a Change of Book-Entry Local Government Bonds to a Specified Book-Entry Institution, etc. or Qualified Foreign Intermediary; and the provisions of the preceding paragraph apply mutatis mutandis where a person who has submitted a Written Application for Tax Exemption of Book-Entry Local Government Bonds has made entries or records under the book-entry system regarding Book-Entry Local Government Bonds through a Qualified Foreign Intermediary, or submitted a Written Application for a Change of Book-Entry Local Government Bonds to a Qualified Foreign Intermediary.In this case, in paragraph (24), the term "the Written Application for Tax Exemption of Book-Entry National Government Bonds" is deemed to be replaced with "the Written Application for Tax Exemption of Book-Entry Local Government Bonds"; in the preceding paragraph, the term "the Written Application for Tax Exemption of Book-Entry National Government Bonds" is deemed to be replaced with "the Written Application for Tax Exemption of Book-Entry Local Government Bonds", and the term "pertaining to the Book-Entry National Government Bonds" is deemed to be replaced with "pertaining to the Book-Entry Local Government Bonds".

(27)The means specified by Cabinet Order prescribed in Article 5-2, paragraph (14) of the Act is a means of using an electronic data processing system or another means of using information and communications technology that is specified by Ministry of Finance Order.

(28)Where a Specified Book-Entry Institution, etc. has received the notice prescribed in paragraph (25) (including the cases where it is applied mutatis mutandis pursuant to paragraph (26)), it must, on each occasion of receiving the notice, for each person who has submitted a Written Application for Tax Exemption of Book-Entry National Government Bonds or Written Application for Tax Exemption of Book-Entry Local Government Bonds (in the case where the person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds or Written Application for Tax Exemption of Book-Entry Local Government Bonds is the trustee of a Qualified Foreign Securities Investment Trust, for each person who has submitted the Written Application for Tax Exemption of Book-Entry National Government Bonds or Written Application for Tax Exemption of Book-Entry Local Government Bonds and for each Qualified Foreign Securities Investment Trust accepted thereby), enter or record in the books prescribed in Article 5-2, paragraph (14) of the Act the particulars mentioned in the notice, and preserve those books pursuant to the provisions of Ministry of Finance Order.

(29)The national government bonds specified by Cabinet Order prescribed in Article 5-2, paragraph (15), item (i) of the Act are the Book-Entry National Government Bonds specified respectively in the following items for the category of persons listed in the relevant items:

(30)The means specified by Cabinet Order prescribed in Article 5-2, paragraph (15), item (iii) of the Act is a means of using an electronic data processing system or another means of using information and communications technology that is specified by Ministry of Finance Order.

(31)A Specified Book-Entry Institution, etc. pertaining to the entries or records under the book-entry system regarding the Book-Entry National Government Bonds held by a nonresident or foreign corporation must, where it has received the notice pursuant to the provisions of Article 5-2, paragraph (15), item (iii) of the Act by means of a document, preserve the document pursuant to the provisions of Ministry of Finance Order.

(32)The Specified Book-Entry Institution, etc. set forth in the preceding paragraph must, where it has received the notice pursuant to the provisions of Article 5-2, paragraph (15), item (iii) of the Act by the means prescribed in paragraph (30), preserve the document or microfilm produced by outputting the particulars contained in the notice using input-output devices of an electronic data processing system prescribed in the same paragraph (limited to those specified by Ministry of Finance Order), pursuant to the provisions of Ministry of Finance Order.

(33)The local government bonds specified by Cabinet Order prescribed in Article 5-2, paragraph (16), item (i) of the Act are the Book-Entry Local Government Bonds specified respectively in the following items for the category of persons listed in the relevant items:

(34)The means specified by Cabinet Order prescribed in Article 5-2, paragraph (16), item (iii) of the Act is a means of using an electronic data processing system or another means of using information and communications technology that is specified by Ministry of Finance Order.

(35)The provisions of paragraph (31) apply mutatis mutandis where the Specified Book-Entry Institution, etc. has received the notice pursuant to Article 5-2, paragraph (16), item (iii) of the Act by means of a document.

(36)The Specified Book-Entry Institution, etc. set forth in paragraph (31) as applied mutatis mutandis pursuant to the preceding paragraph must, where it has received the notice pursuant to the provisions of Article 5-2, paragraph (16), item (iii) of the Act by the means prescribed in paragraph (34), preserve the document or microfilm produced by outputting the particulars contained in the notice using input-output devices of an electronic data processing system prescribed in the same paragraph (limited to those specified by Ministry of Finance Order), pursuant to the provisions of Ministry of Finance Order.

Article 3-2(1)The company bonds specified by Cabinet Order, prescribed in Article 6, paragraph (1) of the Act, are the company bonds listed as follows:

(2)The amount specified by Cabinet Order, prescribed in Article 6, paragraph (1) of the Act, is an amount listed as follows:

(3)The amount specified by Cabinet Order, prescribed in Article 6, paragraph (2) of the Act, is an amount listed as follows:

(4)The place for paying income tax on the interest on general foreign-issued company bonds issued by a foreign corporation that is to be collected and paid pursuant to the provisions of Article 6, paragraph (2) of the Act is the location of the principal office of the foreign corporation in Japan.

(5)The foreign corporation specified by Cabinet Order, prescribed in Article 6, paragraph (4) of the Act, is a foreign corporation listed as follows:

(6)The provisions of Article 25-19, paragraph (2) apply mutatis mutandis to the determination as to whether or not a foreign corporation that issues general foreign-issued company bonds (referred to as a "foreign corporation issuing foreign-issued company bonds" in the following paragraph to paragraph (9)) falls under the category of the foreign corporation listed in item (ii) of the preceding paragraph.In this case, the term "each business year" in paragraph (2), item (i) of the same Article is deemed to be replaced with "the business year of issuing foreign-issued company bonds (meaning the business year of issuing foreign-issued company bonds prescribed in Article 3-2, paragraph (5), item (ii); hereinafter the same applies in this paragraph)", and the term "each business year" in item (ii) of the same paragraph is deemed to be replaced with "the business year of issuing foreign-issued company bonds".

(7)Where a foreign corporation issuing foreign-issued company bonds meets all of the following requirements, it is not included in the category of foreign corporations listed in the items of paragraph (5):

(8)Where transactions between a foreign corporation issuing foreign-issued company bonds and an affiliated person related to the foreign corporation issuing foreign-issued company bonds are conducted indirectly via a person other than an affiliated person related to the foreign corporation issuing foreign-issued company bonds (hereinafter referred to as a "Non-Affiliated Person" in this paragraph), transactions between the foreign corporation issuing foreign-issued company bonds and the Non-Affiliated Person are deemed to have been conducted directly between the foreign corporation issuing foreign-issued company bonds and the affiliated person, and the provisions of item (iii), (a) of the preceding paragraph apply, except in the case where there are reasonable grounds for having the Non-Affiliated Person intervene in the transactions.

(9)The affiliated person prescribed in paragraph (7), item (iii), (a) and the preceding paragraph is a person listed as follows:

(10)In the case referred to in item (i) of the preceding paragraph, whether or not one of the two corporations directly or indirectly holds over 50 percent of the total number or the total amount of the other corporation's Issued Shares, etc. is to be determined according to the ratio obtained by adding the ownership ratio for the shares, etc. pertaining to the relevant other corporation held directly by the relevant one of the two corporations (meaning the ratio of the number or the amount of the relevant other corporation's shares or capital contributions held by the relevant one of the two corporations out of the total Issued Shares, etc. of the relevant other corporation) and the ownership ratio for the shares, etc. pertaining to the relevant other corporation held indirectly by the relevant one of the two corporations.

(11)The ownership ratio for the shares, etc. held indirectly that is prescribed in the preceding paragraph is a ratio specified in the following items for the category of cases listed in the respective items (where falling under both of the following cases, the sum of the ratios specified as follows):

(12)The person in charge of handling payment as specified by Cabinet Order prescribed in Article 6, paragraph (4) of the Act is the person prescribed in Article 2-2, paragraph (2) who is in Japan, and the person who provides, outside Japan, intermediary, brokerage or agent services (referred to as the "intermediary services, etc." in paragraph (21) and paragraph (35)) for the receipt of interest on foreign-issued company bonds prescribed in Article 6, paragraph (1) of the Act (referred to as "foreign-issued company bonds" in paragraph (33)) as the person's own operations or in relation to the operations.

(13)A written application for tax exemption pursuant to the provisions of Article 6, paragraph (4) of the Act (referred to as a "written application for tax exemption" in the following paragraph to paragraph (17)) must be submitted, on each occasion of receiving payment of interest on general foreign-issued company bonds, to the district director of the tax office prescribed in Article 6, paragraph (4) of the Act, via the person who pays the interest (in the case where the interest is paid via a person in charge of handling payment as prescribed in paragraph (4) of the same Article (hereinafter referred to as a "Person in Charge of Handling Payment" in this Article), submission must be made via the Person in Charge of Handling Payment and the person who pays the interest).

(14)A person who submits a written application for tax exemption must, upon submitting it, present a document that certifies that the person falls under the category of nonresidents or foreign corporations (limited to the document that contains the name and domicile or residence or the location of the person's head office or principal office (hereinafter referred to as "Domicile, etc." in this paragraph, the following paragraph and paragraph (19)), each of which is located outside Japan; the same applies in the same paragraph), to a person who pays interest based on the written application for tax exemption (in the case where the interest is paid via a Person in Charge of Handling Payment, the document must be presented to the Person in Charge of Handling Payment; hereinafter the same applies in this paragraph and the following paragraph), and the person who pays interest must confirm, by the document presented thereto, the name and Domicile, etc. located outside Japan as entered in the written application for tax exemption.

(15)A person who pays interest on general foreign-issued company bonds must, when they have confirmed, by the document prescribed in the preceding paragraph, the name or Domicile, etc. located outside Japan as entered in the written application for tax exemption pertaining to the interest on the general foreign-issued company bonds which has been submitted thereto, enter in the written application for tax exemption to that effect that the confirmation has been provided as well as the name and Domicile, etc. of the person who pays interest.

(16)A person who pays interest on general foreign-issued company bonds must, when they have received a written application for tax exemption pertaining to the interest on the general foreign-issued company bonds, submit the written application for tax exemption to the district director of the tax office prescribed in Article 6, paragraph (4) of the Act no later than the final day of the month that includes the day on which the person has received the written application.

(17)A person who pays interest on general foreign-issued company bonds must, when they have received a written application for tax exemption pertaining to the interest on the general foreign-issued company bonds, prepare and preserve a copy of the written application for tax exemption (including its equivalent), pursuant to the provisions of Ministry of Finance Order.

(18)The interest specified by Cabinet Order prescribed in Article 6, paragraph (4) and paragraph (10) of the Act is the interest listed as follows:

(19)A nonresident or foreign corporation who seeks the application of Article 6, paragraph (7) of the Act with respect to interest on specified foreign-issued company bonds prescribed in paragraph (7) of the same Article (hereinafter referred to as "Specified Foreign-Issued Company Bonds" through to paragraph (29)) must, upon entrusting a Person in Charge of Handling Payment with custody of the Specified Foreign-Issued Company Bonds, pursuant to the provisions of Ministry of Finance Order, notify the Person in Charge of Handling Payment of their or its name and Domicile, etc. located outside Japan, and obtain a confirmation with regard to the particulars contained in the notification, by presenting a document that certifies that they or it falls under the category of nonresidents or foreign corporations or by any other method equivalent thereto.

(20)Where a nonresident or foreign corporation who seeks the application of Article 6, paragraph (7) of the Act with respect to interest on Specified Foreign-Issued Company Bonds entrusts a Person in Charge of Handling Payment with custody of the Specified Foreign-Issued Company Bonds, if they or it has already obtained a confirmation pursuant to the provisions of the preceding paragraph when entrusting the Person in Charge of Handling Payment with custody of other Specified Foreign-Issued Company Bonds or the case falls under any of those specified by Ministry of Finance Order as equivalent thereto, notwithstanding the provisions of the same paragraph, the nonresident or foreign corporation is not required to give a notification pursuant to the provisions of the same paragraph when entrusting custody of the Specified Foreign-Issued Company Bonds.

(21)The person in charge of handling custody and payment prescribed in Article 6, paragraph (7) of the Act (hereinafter referred to as the "Person in Charge of Handling Custody and Payment" through to paragraph (26)) must, on each occasion of receiving the delivery of interest on Specified Foreign-Issued Company Bonds, of which the person is entrusted with custody, in the course of the intermediary services, etc. for the receipt of the interest, no later than the day preceding the day on which the person is to receive the delivery, give a notice pursuant to the provisions of paragraph (7) of the same Article (hereinafter referred to as a "Notice" through to paragraph (23)) to provide interest recipient information prescribed in paragraph (7) of the same Article (hereinafter referred to as "Interest Recipient Information" through to paragraph (27)) which pertains to the interest to be delivered thereto to the person who pays the interest (in the case where the interest is delivered via any other Person in Charge of Handling Payment with whom the Person in Charge of Handling Custody and Payment has further entrusted custody, a Notice must be given to the person who pays the interest via the relevant other Person in Charge of Handling Payment).In this case, if the Person in Charge of Handling Custody and Payment receives the delivery of interest on the Specified Foreign-Issued Company Bonds, for the first time, on or after the day on which 40 days have elapsed since the day on which the Specified Foreign-Issued Company Bonds were issued, the Notice of Interest Recipient Information pertaining to the interest to be delivered thereto must be given on or after that day on which the 40-day period has expired.

(22)Where a Person in Charge of Handling Custody and Payment receives the delivery of interest on Specified Foreign-Issued Company Bonds, of which the person is entrusted with custody, on or after the day on which the person has received the delivery of interest pertaining to the Interest Recipient Information of which the person gave a Notice to the person who pays interest on the Specified Foreign-Issued Company Bonds (limited to the information provided in the Notice stating to the effect that it falls under cases set forth in Article 6, paragraph (7), item (i) of the Act; hereinafter the same applies in this paragraph), if the Person in Charge of Handling Custody and Payment has confirmed that all persons who are to receive payment of the interest (excluding interest subject to the provisions of Article 3-3, paragraph (3) or paragraph (6) of the Act; hereinafter the same applies in this paragraph) to be delivered thereto fall under the category of nonresidents or foreign corporations, the Person in Charge of Handling Custody and Payment may omit to give a Notice of Interest Recipient Information pertaining to the interest to be delivered thereto.

(23)The provisions of the preceding paragraph apply only where the Person in Charge of Handling Custody and Payment set forth in the same paragraph has obtained approval in advance, pursuant to the provisions of Ministry of Finance Order, from the person who pays interest set forth in the same paragraph with regard to the omission of a notice prescribed in the same paragraph.In this case, if the Person in Charge of Handling Custody and Payment has not given, by the day preceding the day on which the person is to receive the delivery of interest on the relevant Specified Foreign-Issued Company Bonds, a notice of Interest Recipient Information pertaining to the interest to be delivered thereto, a notice of Interest Recipient Information is deemed to have been given, as of that day, by the Person in Charge of Handling Custody and Payment to the person who pays interest, stating to the effect that the case falls under cases set forth in Article 6, paragraph (7), item (i) of the Act.

(24)Where a Person in Charge of Handling Custody and Payment is entrusted by subcontract with custody of other Specified Foreign-Issued Company Bonds with the same issue as that of the Specified Foreign-Issued Company Bonds of which the person is directly entrusted with custody, when the person has received a notice as the relay point via which the notice will be given pursuant to the provisions of Article 6, paragraph (7) of the Act with regard to the Interest Recipient Information pertaining to the interest on the relevant other Specified Foreign-Issued Company Bonds, the person may, pursuant to the provisions of Ministry of Finance Order, give a notice to provide the Interest Recipient Information pertaining to the interest on the Specified Foreign-Issued Company Bonds of which the person is directly entrusted with custody together with the Interest Recipient Information of which the person has received a notice as such relay point to the person who pays the interest (in the case where the interest is delivered via any other Person in Charge of Handling Payment with whom the Person in Charge of Handling Custody and Payment has further entrusted custody, to the person who pays the interest via the relevant other Person in Charge of Handling Payment).In this case, the notice is deemed to be a notice of Interest Recipient Information given pursuant to the provisions of paragraph (7) of the same Article.

(25)When a person who is entrusted by subcontract with custody of Specified Foreign-Issued Company Bonds (excluding the person who is deemed to be a Person in Charge of Handling Custody and Payment who is entrusted with custody of other Specified Foreign-Issued Company Bonds with the same issue as that of the Specified Foreign-Issued Company Bonds; hereinafter referred to as a "Person in Charge of Handling Payment Based on Entrustment by Subcontract" in this paragraph and the following paragraph) has received a notice as the relay point via which the notice will be given pursuant to the provisions of Article 6, paragraph (7) of the Act with regard to two or more pieces of Interest Recipient Information pertaining to the interest on the Specified Foreign-Issued Company Bonds, the person may, pursuant to the provisions of Ministry of Finance Order, give a notice to provide these pieces of Interest Recipient Information of which the person has received a notice as such relay point together to the person who pays the interest (in the case where the interest is delivered via any other Person in Charge of Handling Payment with whom the Person in Charge of Handling Custody and Payment has further entrusted custody, to the person who pays the interest via the relevant other Person in Charge of Handling Payment).In this case, the notice is deemed to be a notice of Interest Recipient Information given pursuant to the provisions of paragraph (7) of the same Article.

(26)The provisions of paragraph (22) and paragraph (23) apply mutatis mutandis in the following cases:

(27)A person who pays interest on Specified Foreign-Issued Company Bonds must, when paying the interest, prepare an interest recipient confirmation document prescribed in Article 6, paragraph (7) of the Act (hereinafter referred to as an "Interest Recipient Confirmation Document" in the following paragraph) based on the interest recipient information provided in the notice given thereto pursuant to the provisions of paragraph (21), paragraph (24) or paragraph (25) (including the interest recipient information of which a notice is deemed to have been given pursuant to the provisions of paragraph (23) (including the cases where it is applied mutatis mutandis pursuant to the preceding paragraph)).

(28)A person who pays interest on Specified Foreign-Issued Company Bonds must submit an Interest Recipient Confirmation Document prepared pursuant to the provisions of the preceding paragraph to the district director the tax office prescribed in Article 6, paragraph (7) of the Act no later than the final day of the month following the month that includes the day on which the interest pertaining to the Interest Recipient Confirmation Document has been paid.

(29)A person who pays interest on Specified Foreign-Issued Company Bonds must enter in the books the interest recipient information provided in the notice given thereto pursuant to the provisions of paragraph (27), and preserve those books pursuant to the provisions of Ministry of Finance Order.

(30)The financial institution or financial instruments business operator specified by Cabinet Order prescribed in Article 6, paragraph (8) of the Act is any of the following:

(31)The provisions of paragraphs (13) to (17), and paragraphs (19) to (29) apply mutatis mutandis where a domestic financial institution, etc. prescribed in Article 6, paragraph (8) of the Act is subject to the provisions of the main clause of paragraph (4) of the same Article as well as paragraph (6) and paragraph (7) of the same Article, all of which apply mutatis mutandis pursuant Article 6, paragraph (8) of the Act.In this case, in paragraph (14), the term "the name and domicile or residence or the location of the person's head office or principal office (hereinafter referred to as "Domicile, etc." in this paragraph, the following paragraph and paragraph (19)), each of which is located outside Japan" and the term "name and Domicile, etc. located outside Japan" is deemed to be replaced with "name and the location of the person's head office or principal office"; in paragraph (15) and paragraph (19), the term "name and Domicile, etc. located outside Japan" is deemed to be replaced with "name and the location of the person's head office or principal office"; and in paragraph (22), the term "nonresident or foreign corporation" is deemed to be replaced with "nonresident or foreign corporation, or domestic financial institution, etc. prescribed in Article 6, paragraph (8) of the Act".

(32)The state designated by Cabinet Order prescribed in Article 6, paragraph (11) of the Act is Switzerland.

(33)The requirements specified by Cabinet Order prescribed in Article 6, paragraph (11) of the Act are the requirements listed as follows:

(34)With respect to the application of the provisions of Article 267, paragraph (2) of the Order for Enforcement of the Income Tax Act in the case where a resident who has, in a given year, interest income from interest (excluding interest subject to the provisions of Article 3-3, paragraph (1) of the Act) on general foreign-issued company bonds, submits a final return form prescribed in Article 267, paragraph (2) of the same Act, the term "written statement" in paragraph (2) of the same Article is deemed to be replaced with "written statement or any other document specified by Ministry of Finance Order".

(35)A person who pays interest on specified foreign-issued company bonds may request a person in charge of handling payment in Japan to give a notice thereto of the part of the amount of interest on the relevant foreign-issued company bonds delivered by the Person in Charge of Handling Payment in the course of intermediary services, etc. for the receipt of the interest, which is subject to the provisions of Article 3-3, paragraph (3) or paragraph (6) of the Act.

(36)The provisions of paragraph (12) to the preceding paragraph apply mutatis mutandis where the provisions of Article 6, paragraphs (1) to (12) of the Act as applied mutatis mutandis pursuant to paragraph (13) of the same Article apply with respect to interest on foreign currency denominated bonds prescribed in the same paragraph.

Article 3-2-2(1)The bond transaction with a repurchase or resale agreement specified by Cabinet Order as prescribed in Article 7 of the Act is a bond transaction with a repurchase/resale agreement (referred to as a "bond transaction with a repurchase/resale agreement" in the following paragraph) prescribed in Article 283, paragraph (4) of the Order for Enforcement of the Income Tax Act.

(2)The margin specified by Cabinet Order as prescribed in Article 7 of the Act is a margin equivalent to the amount calculated, in the case where in a bond transaction with a repurchase/resale agreement that a financial institution prescribed in the same Article conducts with a foreign corporation prescribed in the same Article and that has been settled in the special international financial transaction account, the value for purchasing bonds upon the purchase is less than the value for reselling bonds of the same type and the same quantity upon resale, by deducting the value for the purchase from the value for the resale.

Article 4-9(1)Where a distribution of profit from a foreign special purpose trust prescribed in Article 9-5-2, paragraph (7), item (i) of the Act or a distribution of proceeds from a foreign special investment trust prescribed in item (ii) of the same paragraph is paid to a foreign corporation in Japan, with regard to the application of the provisions of Article 225, paragraph (1) of the Income Tax Act, the distribution of profit from a foreign special purpose trust or distribution of proceeds from a foreign special investment trust is deemed to be a dividend of surplus to be received from a domestic corporation prescribed in Article 161, item (v), (a) of the same Act.

(2)With regard to the application of the provisions of Article 225, paragraph (1) of the Income Tax Act to a person who pays a distribution of profit from a special purpose trust prescribed in Article 9-5-2, paragraph (7), item (i) of the Act or a distribution of proceeds from a foreign special investment trust prescribed in item (ii) of the same paragraph to a nonresident or a foreign corporation in Japan, the phrase "a person who makes payment" in item (viii) in the same paragraph is deemed to be replaced with "a person who makes payment (including a person who pays a distribution of profit from a foreign special purpose trust prescribed in Article 9-5-2, paragraph (7), item (i) (Special Provisions for Taxation on Distribution of Profit from Foreign Special Purpose Trust or Distribution of Proceeds from Foreign Special Investment Trust) of the Act on Special Measures Concerning Taxation or a distribution of proceeds from a foreign special investment trust prescribed in item (ii) of the same paragraph to a nonresident or a foreign corporation in Japan)".

Article 25-11(1)The amount that is calculated pursuant to the method specified by Cabinet Order as the amount of domestic source income from transfer of shares, etc. prescribed in Article 37-12, paragraph (1) of the Act is the sum of the amounts that are treated as the amount of business income, the amount of capital gains, and the amount of miscellaneous income in the case where domestic source income from the transfer of shares, etc. prescribed in the same paragraph (hereinafter referred to as "Domestic Source Income from the Transfer of Shares, etc." in this Article) is calculated in accordance with the provisions of Part II, Chapter II, Section 2 of the Income Tax Act.In this case, if there is any amount of loss generated when calculating these amounts in the relevant year, the amount of loss is to be deducted from the amount of income prescribed in the following items for the category of loss listed in those items:

(2)The provisions of Article 25-8, paragraph (6) apply mutatis mutandis where the provisions of Article 37-10, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 37-12, paragraph (4) of the Act apply.

(3)The provisions of Article 25-8, paragraph (7) apply mutatis mutandis pursuant to the calculation of the amount of business income prescribed in paragraph (1).

(4)Where a nonresident having no permanent establishments in Japan as prescribed in Article 37-12, paragraph (1) of the Act who has Domestic Source Income from the Transfer of Shares, etc. in the relevant year files a final return form, they must, pursuant to the provisions of Ministry of Finance Order, attach a detailed statement concerning the calculation of the amount of Domestic Source Income from the Transfer of Shares, etc. to the final return form.In this case, with regard to the application of the provisions of Article 120, paragraph (4) of the Income Tax Act, the phrase "business income" in the same paragraph is deemed to be replaced with "business income (excluding Domestic Source Income from the Transfer of Shares, etc. prescribed in Article 37-12, paragraph (1) (Special Provisions for Taxation on Domestic Source Income from Transfer of Shares, etc. of a Nonresident Having No Permanent Establishments) of the Act on Special Measures Concerning Taxation)".

(5)The provisions of Article 25-8, paragraphs (12) through (15) apply mutatis mutandis in the case where the provisions of Article 37-12, paragraph (1) of the Act apply.In this case, in the provisions of Article 25-8, paragraphs (12) through (15), the phrase "Article 37-10, paragraph (1)" is deemed to be replaced with "Article 37-12, paragraph (1)"; the phrase "(Special Provisions for Taxation on Capital Gains, etc. from Shares, etc.)" is deemed to be replaced with "(Special Provisions for Taxation on Domestic Source Income from Transfer of Shares, etc. of a Nonresident Having No Permanent Establishments)"; the phrase "with regard to the amount of taxable capital gains, etc. from shares, etc. (hereinafter referred to as the "Amount of Taxable Capital Gains, etc. from Shares, etc.") and the estimated amount of taxable timber income, the provisions of Chapter III (Calculation of Tax Amount) and the same paragraph" is deemed to be replaced with "with regard to the amount of domestic source income from shares, etc. (in the case of applying the provisions of Article 72 (Deduction of Casualty Loss), Article 78 (Deduction of Donation), Article 86 (Basic Exemption), and Article 87 (Order of Exemption and Deduction from Income) that are applied pursuant to the provisions of Article 37-10, paragraph (6), item (v) (Special Provisions for Taxation on Capital Gains from Shares) of the same Act as applied mutatis mutandis pursuant to paragraph (4) of the same Article, the amount after the application; hereinafter referred to as the "Amount of Taxable Domestic Source Income from the Transfer of Shares, etc.") and the estimated amount of taxable timber income, the provisions of Chapter III (Calculation of Tax Amount) and Article 37-12, paragraph (1) of the same Act"; the phrase "the amount of capital gains, etc. from shares, etc. (hereinafter referred to as the "Amount of Capital Gains, etc. from Shares, etc.")" is deemed to be replaced with "the amount of domestic source income from the transfer of shares, etc. (hereinafter referred to as the "Amount of Domestic Source Income from the Transfer of Shares, etc.")"; the phrase "the Amount of Capital Gains, etc. from Shares, etc." is deemed to be replaced with "the Amount of Domestic Source Income from the Transfer of Shares, etc."; the phrase "the Amount of Taxable Capital Gains, etc. from Shares, etc." is deemed to be replaced with "the Amount of Taxable Domestic Source Income from the Transfer of Shares, etc."; and the phrase "the amount of taxable capital gains, etc. from shares, etc. (hereinafter referred to as "the Amount of Taxable Capital Gains, etc. from Shares, etc.")" is deemed to be replaced with "the Amount of Domestic Source Income from the Transfer of Shares, etc. (in the case of applying the provisions of Article 72 (Deduction of Casualty Loss), Article 78 (Deduction of Donation), Article 86 (Basic Exemption), and Article 87 (Order of Exemption and Deduction from Income) that are applied pursuant to the provisions of Article 37-10, paragraph (6), item (v) (Special Provisions for Taxation on Capital Gains from Shares) of the same Act as applied mutatis mutandis pursuant to paragraph (4) of the same Article, the amount after the application; hereinafter referred to as the "Amount of Taxable Domestic Source Income from the Transfer of Shares, etc.")".

Article 25-14(1)The shares specified by Cabinet Order as shares to be managed as assets pertaining to business conducted in Japan as prescribed in Article 37-14-2, paragraph (1) of the Act are shares (including capital contributions; hereinafter the same applies in this Article) which are managed as assets pertaining to the business conducted in Japan by a nonresident having permanent establishments in Japan and which are managed at permanent establishments in Japan (meaning the fixed place for conducting a business prescribed in Article 164, paragraph (1), item (i) of the Income Tax Act, the construction work, etc. prescribed in item (ii) of the same paragraph that is carried out for more than one year, or the agent, etc. prescribed in item (iii) of the same paragraph; the same applies in the following paragraph and paragraph (3)).

(2)The act specified by Cabinet Order as prescribed in Article 37-14-2, paragraph (4) of the Act is any of the following acts:

(3)Where a nonresident having permanent establishments in Japan does not manage all or part of the parent corporation's shares managed in a domestic business prescribed in Article 37-14-2, paragraph (4) of the Act (hereinafter referred to as the "Parent Corporation's Shares Managed in a Domestic Business" through to paragraph (5), and paragraph (9) and paragraph (10)) as assets pertaining to the business conducted in Japan at the time of receiving the delivery thereof or where they do not manage the shares at permanent establishments in Japan, with regard to the part of the Parent Corporation's Shares Managed in a Domestic Business that is not managed, the provisions of paragraph (4) of the same Article apply by deeming that the nonresident has performed any of the acts listed in the items of the preceding paragraph immediately after they have managed the part as assets pertaining to the business conducted in Japan at the time of the delivery thereof and managed the same at permanent establishments in Japan.

(4)Where any of the acts listed in the items of paragraph (2) is performed with regard to the Parent Corporation's Shares Managed in a Domestic Business, the act is not to be included in the scope of acts listed in Article 279, paragraph (3), item (ii) of the Order for Enforcement of the Income Tax Act.

(5)Where the shares of the same issue held by a nonresident having permanent establishments in Japan contain the Parent Corporation's Shares Managed in a Domestic Business and shares other than those Parent Corporation's Shares Managed in a Domestic Business, when any of the acts listed in the items of paragraph (2) is performed with respect to these shares, the provisions of Article 37-14-2, paragraph (4) of the Act apply by deeming that the act has been performed first with respect to the Parent Corporation's Shares Managed in a Domestic Business among those shares of the same issue involved in the act.

(6)The relationship specified by Cabinet Order as prescribed in Article 37-14-2, paragraph (5), item (ii) of the Act is the relationship with the merging corporation prescribed in the same item involved in a merger whereby the foreign corporation holds the whole of the issued shares of or capital contributions to the merging corporation (excluding the shares of the merging corporation held by itself; referred to as the "issued shares, etc." in the following paragraph and paragraph (8)), if the relationship exists immediately before the merger.

(7)The relationship specified by Cabinet Order as prescribed in Article 37-14-2, paragraph (5), item (iv) of the Act is the relationship with a succeeding corporation in a company split prescribed in item (iv) of the same paragraph involved in a split-off-type company split prescribed in Article 2, item (xii)-9 of the Corporation Tax Act whereby the foreign corporation holds the whole of the issued shares, etc. of the succeeding corporation in a company split, if the relationship exists immediately before the split-off-type company split.

(8)The relationship specified by Cabinet Order as prescribed in Article 37-14-2, paragraph (5), item (vi) of the Act is the relationship with the wholly owning parent corporation in a share exchange prescribed in the same item pertaining to a share exchange whereby the foreign corporation holds the whole of the issued shares, etc. of the wholly owning parent corporation in a share exchange, if the relationship exists immediately before the share exchange.

(9)A nonresident having permanent establishments in Japan who receives the delivery of the Parent Corporation's Shares Managed in a Domestic Business in the relevant year must submit a document stating the issue and number of the Parent Corporation's Shares Managed in a Domestic Business that they hold as of December 31 of the year containing the day on which they receive the delivery thereof, as well as other particulars specified by Ministry of Finance Order, to the competent district director of the tax office having jurisdiction over the person's place for tax payment, no later than March 15 of the year following the relevant year.

(10)With regard to the application of the provisions of Article 25-8, paragraph (11) in the case where a nonresident having permanent establishments in Japan, who is subject to the provisions of Article 37-14-2, paragraph (4) of the Act with regard to the Parent Corporation's Shares Managed in a Domestic Business, files a final return form in the relevant year, the term "detailed statement concerning..." in Article 25-8, paragraph (11) is deemed to be replaced with "document stating the details of..., and other particulars specified by Ministry of Finance Order".

(11)Where a nonresident, with regard to the shares they hold, receives the delivery of a foreign merging parent corporation's shares prescribed in Article 37-14-2, paragraph (1) as a result of the specified merger prescribed in paragraph (5), item (i) of the same Article of a domestic corporation that issued those shares held by them, with regard to the calculation of the fair value of the foreign merging parent corporation's shares, the provisions of Article 112, paragraph (1) of the Order for Enforcement of the Income Tax Act in the case of making a calculation in accordance with the provisions of the same paragraph pursuant to the provisions of Article 165 of the Income Tax Act do not apply.

(12)Where a nonresident, with regard to the shares they hold, receives the delivery of shares of a foreign succeeding parent corporation in a company split prescribed in Article 37-14-2, paragraph (2) as a result of a specified split-off-type company split prescribed in paragraph (5), item (iii) of the same Article which is effected by a domestic corporation that issued those shares held by them, with regard to the calculation of the fair value of the shares of the foreign succeeding parent corporation in a company split, the provisions of Article 113, paragraph (1) of the Order for Enforcement of the Income Tax Act in the case of making a calculation in accordance with the provisions of the same paragraph pursuant to the provisions of Article 165 of the Income Tax Act do not apply.

(13)Where a nonresident, with regard to the shares they hold, has transferred the shares to the wholly owning parent corporation in a share exchange prescribed in Article 2, item (xii)-6-4 of the Corporation Tax Act as a result of a specified share exchange prescribed in Article 37-14-2, paragraph (5), item (v) of the Act which is effected by a domestic corporation that issued those shares held by them, and received the delivery of shares of a fully controlling foreign parent corporation in a share exchange prescribed in article 37-14-2, paragraph (3) of the Act, with regard to the calculation of the amount of business income, the amount of capital gains, or the amount of miscellaneous income pertaining to the fully controlling foreign parent corporation in a share exchange, the provisions of Article 167-7, paragraph (3) of the Order for Enforcement of the Income Tax Act in the case of making a calculation in accordance with the provisions of the same paragraph pursuant to the provisions of Article 165 of the Income Tax Act do not apply.

(14)With regard to the application of the provisions of Article 280 and Article 291 of the Order for Enforcement of the Income Tax Act in the cases prescribed in paragraph (11) and paragraph (12): the phrase "or paragraph (4) ("in Article 280, paragraph (2) of the same Order is deemed to be replaced with "or paragraph (4) ("; the phrase "or the items of paragraph (4)" in the same paragraph is deemed to be replaced with "or the items of paragraph (4)"; the phrase "or extinguishment of rights..." in the same paragraph is deemed to be replaced with "or extinguishment of rights..., or transfer or extinguishment of rights corresponding to the value of the shares of the foreign merging parent corporation prescribed in Article 37-14-2, paragraph (1) (Special Provisions for Taxation in Cases of Receiving Delivery of Foreign Parent Corporation's Shares as a Result of Merger) of the Act on Special Measures Concerning Taxation or shares of the foreign succeeding parent corporation in a company split prescribed in paragraph (2) of the same Article, with regard to the shares held as prescribed in paragraph (1) or (2) of the same Article based on the specified merger prescribed in paragraph (1) of the same Article or the specified split-off-type company split prescribed in paragraph (2) of the same Article, which has been the cause of the delivery of the shares of the foreign merging parent corporation or the shares of the foreign succeeding parent corporation in a company split, in the case where the amount equivalent to the value is deemed to be revenue from capital gains, etc. from shares, etc. prescribed in Article 37-10, paragraph (1) of the same Act pursuant to the provisions of Article 37-14-2, paragraph (1) or paragraph (2) of the same Act"; the phrase "Article 280, paragraph (2)" in Article 291, paragraph (1), item (iii) of the same Order is deemed to be replaced with "Article 280, paragraph (2) whose terms and phrases are replaced pursuant to Article 25-14, paragraph (14) (Special Provisions for Taxation in Cases of Receiving Delivery of Foreign Parent Corporation's Shares as a Result of Merger) of the Order for Enforcement of the Act on Special Measures Concerning Taxation"; the phrase "split-off-type company split (" in paragraph (7), item (i) of the same Article is deemed to be replaced with "split-off-type company split (limited to a specified split-off-type company split prescribed in Article 37-14-2, paragraph (5), item (iii) (Special Provisions for Taxation in Cases of Receiving Foreign Parent Corporation's Shares as a Result of Merger) of the Act on Special Measures Concerning Taxation."; the phrase "through a split-off-type merger..., which falls under any of the following cases of company splits, the delivery of shares of a succeeding corporation in a company split prescribed in Article 2, item (xii)-3 of the same Act (hereinafter referred to as a "Succeeding Corporation in a Company Split" in this item), shares of a succeeding parent corporation in a company split prescribed in Article 113, paragraph (1) (Acquisition Cost for Shares Acquired through Split-Off-Type Company Split) (hereinafter referred to as a "Succeeding Parent Corporation in a Company Split" in this item) or other assets" in the same item is deemed to be replaced with "through a split-off-type merger, the delivery of shares of a foreign Succeeding Parent Corporation in a Company Split prescribed in paragraph (2) of the same Article"; and the phrase "paragraph (2) of the same Article" in the same item is deemed to be replaced with "Article 113, paragraph (2) (Acquisition Cost of Shares Acquired Through Split-Off-Type Company Split)".

(15)Where the provisions of Article 37-14-2, paragraphs (1) through (3) apply, the following provisions apply:

(16)With regard to the application of the provisions of Article 345 of the Order for Enforcement of the Income Tax Act in the case where a nonresident receives the delivery of shares of a foreign merging parent corporation or shares of a foreign succeeding parent corporation in a company split prescribed in Article 37-14-2, paragraph (5), item (ii) or item (iv) as a result of a specified merger or specified split-off-type company split prescribed item (i) or item (iii) of the same paragraph, the phrase "other than shares of or capital contributions to" in paragraph (1), item (i) of the same Article is deemed to be replaced with "other than shares of or capital contributions to (excluding shares of a foreign merging parent corporation prescribed in Article 37-14-2, paragraph (5), item (ii) (Special Provisions for Taxation in Cases of Delivery of Receiving Foreign Parent Corporation's Shares as a Result of Merger) of the Act on Special Measures Concerning Taxation)"; and the phrase "other than shares of or capital contributions to" in item (ii) of the same paragraph is deemed to be replaced with "other than shares of or capital contributions to (excluding shares of a foreign succeeding parent corporation in a company split prescribed in Article 37-14-2, paragraph (5), item (iv) of the Act on Special Measures Concerning taxation)".

Article 25-14-2(1)Where an individual, with regard to the shares they hold (including capital contributions; hereinafter the same applies through to paragraph (3)), receives the delivery of shares of a foreign merging parent corporation prescribed in Article 37-14-3, paragraph (1) of the Act as a result of the specified non-qualified merger, as prescribed in the same paragraph, of a domestic corporation that issued those shares held by them, when the shares of the foreign merging parent corporation fall under the category of shares of a specified foreign corporation with less tax burden (meaning the foreign corporation with less tax burden prescribed in Article 68-2-3, paragraph (5), item (i) of the Act; the same applies in the following paragraph and paragraph (3)), with regard to the calculation of the fair value of the shares of the foreign merging parent corporation, the provisions of Article 112, paragraph (1) of the Order for Enforcement of the Income Tax Act (including the case of making the calculation in accordance with the provisions of Article 165 of the Income Tax Act) do not apply.

(2)Where an individual, with regard to the shares they hold, receives the delivery of shares of a foreign succeeding parent corporation in a company split prescribed in Article 37-14-3, paragraph (2) of the Act as a result of a specified non-qualified split-off-type company split prescribed in the same paragraph which is effected by a domestic corporation that issued those shares held by them, when the shares of the foreign succeeding parent corporation in a company split fall under the category of shares of a specified foreign corporation with less tax burden, with regard to the calculation of the fair value of the shares of the foreign succeeding parent corporation, the provisions of Article 113, paragraph (1) of the Order for Enforcement of the Income Tax Act (including the case of making the calculation in accordance with the provisions of Article 165 of the Income Tax Act) do not apply.

(3)Where an individual, with regard to the shares they hold, has transferred the shares to a wholly owning parent corporation in a share exchange prescribed in Article 2, item (xii)-6-4 of the Corporation Tax Act as a result of a specified non-qualified share exchange prescribed in Article 37-14-3, paragraph (3) of the Act which is effected by a domestic corporation that issued the shares, and received the delivery of shares of a fully controlling foreign parent corporation in a share exchange prescribed in the same paragraph, when the shares of the fully controlling foreign parent corporation in a share exchange fall under the category of shares of a specified foreign corporation with less tax burden, with regard to the calculation of the amount of business income, the amount of capital gains, or the amount of miscellaneous income pertaining to the shares of the fully controlling foreign parent corporation, the provisions of Article 167-7, paragraph (3) of the Order for Enforcement of the Income Tax Act (including the case of making the calculation in accordance with the provisions of Article 165 of the Income Tax Act) do not apply.

(4)With regard to the application of the provisions of Article 280 and Article 291 of the Order for Enforcement of the Income Tax Act in the cases prescribed in paragraph (11) and paragraph (12): the phrase "or paragraph (4) ("in Article 280, paragraph (2) of the same Order is deemed to be replaced with "or paragraph (4) ("; the phrase "or the items of paragraph (4)" in the same paragraph is deemed to be replaced with "or the items of paragraph (4)"; the phrase "or extinguishment of rights..." in the same paragraph is deemed to be replaced with "or extinguishment of rights..., or transfer or extinguishment of rights corresponding to the value of the shares of the foreign merging parent corporation prescribed in Article 37-14-3, paragraph (1) (Special Provisions for Taxation on Shareholders in Cases of Specified Merger) of the Act on Special Measures Concerning Taxation or shares of the foreign succeeding parent corporation in a company split prescribed in paragraph (2) of the same Article, with regard to the shares held as prescribed in paragraph (1) or (2) of the same Article based on the specified non-qualified merger prescribed in paragraph (1) of the same Article or the specified non-qualified split-off-type company split prescribed in paragraph (2) of the same Article, which has been the cause of the delivery of the shares of the foreign merging parent corporation or the shares of the foreign succeeding parent corporation in a company split, in the case where the amount equivalent to the value is deemed to be revenue from capital gains, etc. from shares, etc. prescribed in Article 37-10, paragraph (1) of the same Act pursuant to the provisions of Article 37-14-3, paragraph (1) or paragraph (2) of the same Act"; the phrase "Article 280, paragraph (2)" in Article 291, paragraph (1), item (iii) of the same Order is deemed to be replaced with "Article 280, paragraph (2) whose terms and phrases are replaced pursuant to Article 25-14-2, paragraph (14) (Special Provisions for Taxation on Shareholders in Cases of Specified Merger) of the Order for Enforcement of the Act on Special Measures Concerning Taxation"; the phrase "split-off-type company split (" in paragraph (7), item (i) of the same Article is deemed to be replaced with "split-off-type company split (limited to a specified non-qualified split-off-type company split prescribed in Article 37-14-3, paragraph (2), item (iii) (Special Provisions for Taxation on Shareholders in Cases of Specified Merger) of the Act on Special Measures Concerning Taxation."; the phrase "through a split-off-type merger..., which falls under any of the following cases of company splits, the delivery of shares of a succeeding corporation in a company split prescribed in Article 2, item (xii)-3 of the same Act (hereinafter referred to as a "Succeeding Corporation in a Company Split" in this item), shares of a succeeding parent corporation in a company split prescribed in Article 113, paragraph (1) (Acquisition Cost for Shares Acquired through Split-Off-Type Company Split) (hereinafter referred to as a "Succeeding Parent Corporation in a Company Split" in this item) or other assets" in the same item is deemed to be replaced with "through a split-off-type merger, the delivery of shares of a foreign Succeeding Parent Corporation in a Company Split prescribed in Article 37-14-3, paragraph (2) of the same Act which fall under the category of shares of a foreign corporation with less tax burden prescribed in Article 68-2-3, paragraph (5), item (i) (Special Provisions Concerning the Scope of Qualified Merger) of the same Act"; and the phrase "paragraph (2) of the same Article" in the same item is deemed to be replaced with "Article 113, paragraph (2) (Acquisition Cost of Shares Acquired Through Split-Off-Type Company Split)".

(5)Where the provisions of Article 37-14-3, paragraphs (1) through (3) apply, the following provisions apply:

(6)With regard to the application of the provisions of Article 345 of the Order for Enforcement of the Income Tax Act in the case where the provisions of Article 37-14-3, paragraph (1) or (2) apply, the phrase "other than shares of or capital contributions to" in paragraph (1), item (i) of the same Article is deemed to be replaced with "other than shares or capital contributions to (excluding shares of a foreign merging parent corporation prescribed in Article 37-14-3, paragraph (1) (Special Provisions for Taxation on Shareholders in Cases of Specified Merger) of the Act on Special Measures Concerning Taxation)"; and the phrase "other than shares of or capital contributions to" in item (ii) of the same paragraph is deemed to be replaced with "other than shares of or capital contributions to (excluding shares of a foreign succeeding parent corporation in a company split prescribed in Article 37-14-3, paragraph (2) of the Act on Special Measures Concerning taxation)".

Article 25-19(1)The affiliated foreign company specified by Cabinet Order prescribed in Article 40-4, paragraph (1) of the Act is any of the following:

(2)Whether or not an affiliated foreign company falls under the category of an affiliated foreign company set forth in item (ii) of the preceding paragraph is to be determined as specified as follows:

(3)A nonresident who has a special relationship specified by Cabinet Order with a resident or domestic corporation prescribed in Article 40-4, paragraph (2), (i) of the Act is a nonresident listed as follows:

Article 25-20(1)The amount of undistributed income calculated in accordance with the standards specified by Cabinet Order prescribed in Article 40-4, paragraph (2), item (ii) of the Act is the amount that remains after deducting the amount listed in Article 39-15, paragraph (1), item (iii) pertaining to the income of a specified foreign subsidiary company, etc. prescribed in Article 40-4, paragraph (1) of the Act (hereinafter referred to as a "Specified Foreign Subsidiary Company, etc." in this Article and paragraph (1) and paragraph (3) of the following Article) in its settlement of accounts for the relevant business year from the sum of the amount listed in Article 39-15, paragraph (1), item (i) and item (ii) and the amount listed in item (ii) of the same paragraph pertaining to the income (where the amount listed in item (i) of the same paragraph pertaining to the income is a loss, the amount of undistributed income is the amount that remains after deducting the sum of the amount of loss and the amount listed in item (iii) of the same paragraph pertaining to the income from the amount listed in item (ii) of the same paragraph pertaining to the income).

(2)Notwithstanding the provisions of the preceding paragraph, a resident listed in the items of Article 40-4, paragraph (1) of the Act may deem that the amount obtained by adding the amount of income calculated pursuant to the provisions of the laws and regulations concerning corporate income taxes in the State of the Head Office of a Specified Foreign Subsidiary Company, etc. (meaning taxes to be imposed based on the amount of the company's income in the State of the Head Office or in a state or territory other than the State of the Head Office or by local entities in those states or territories including the State of the Head Office (including taxes listed in the items of Article 141, paragraph (2) of the Order for Enforcement of the Corporation Tax Act to be imposed in those states or territories or by local entities of those states or territories) and taxes equivalent to incidental taxes to be imposed incidentally as prescribed in Article 2, item (xlv) of the Corporation Tax Act (excluding interest tax) and other taxes similar to the tax equivalent to the incidental taxes; hereinafter the same applies in this Article) (where there are two or more laws and regulations concerning the corporate income taxes, pursuant to the provisions of the principal ones; hereinafter referred to as the "Laws and Regulations of the State of the Head Office" in this paragraph), with regard to the income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year (where the provisions of Article 66-4, paragraph (1) or Article 68-88, paragraph (1) of the Act are applied to a transaction between the Specified Foreign Subsidiary Company, etc. and a domestic corporation listed in the items of Article 66-6, paragraph (1) of the Act that relates to the Specified Foreign Subsidiary Company, etc., the amount of income calculated pursuant to the provisions of the Laws and Regulations of the State of the Head Office by deeming that the transaction was carried out at the arm's length price prescribed in those provisions), and the sum of the amounts listed in Article 39-15, paragraph (2), items (i) to (xiii) pertaining to the calculated amount of income and then deducting therefrom the sum of the amounts listed in items (xiv) to (xvi) of the same paragraph pertaining to the calculated amount of income (where the amount calculated pursuant to the provisions of the Laws and Regulations of the State of the Head Office proves to be a loss, the amount may be the amount that remains after deducting the sum of the amount of loss and the amounts listed in items (xiv) to (xvi) of the same paragraph pertaining to the calculated amount from the sum of the amounts listed in items (i) to (xiii) of the same paragraph pertaining to the calculated amount) may be the amount calculated in accordance with the standards specified by Cabinet Order prescribed in Article 40-4, paragraph (2), (ii) of the Act.

(3)Where there is any amount of a deductible dividend, etc. (meaning the amount equivalent to the amount specified respectively in the following items for the category of cases listed in the relevant items; hereinafter the same applies in this paragraph) for the relevant business year of a Specified Foreign Subsidiary Company, etc. related to a resident listed in the items of Article 40-4, paragraph (1) of the Act, the amount calculated in accordance with the standards specified by Cabinet Order prescribed in Article 40-4, paragraph (2), item (ii) of the Act is the amount that remains after deducting the amount of a deductible dividend, etc. from the amount calculated pursuant to these provisions, notwithstanding the provisions of paragraph (1) or the preceding paragraph:

(4)In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

(5)The amount obtained as a result of an adjustment for the amount of loss and the base income amount prescribed in Article 40-4, paragraph (2), item (ii) of the Act is the amount that remains after deducting, from the base income amount, prescribed in the same item, of a Specified Foreign Subsidiary Company, etc. for the relevant business year (referred to as the "base income amount" in paragraph (7)), the sum of the amounts listed as follows (where the provisions of paragraph (3) of the same Article are applied, the amount obtained by adding the amount that accounts for ten percent of the amount of expenses specified by Cabinet Order prescribed in Article 40-4, paragraph (2), item (ii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article):

(6)The loss prescribed in item (i) of the preceding paragraph means the loss calculated where the provisions of paragraph (1), paragraph (2) or paragraph (3) are applied to the amount of income of a Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year.

(7)When calculating the amount listed in Article 39-15, paragraph (1), item (i) with regard to the income of a Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year pursuant to the provisions of paragraph (1), if there is any amount to be included in deductible expenses in the relevant business year, pursuant to the provisions of Article 33 and Articles 42 to 53 of the Corporation Tax Act and the provisions of Article 43, Article 45-2, Article 52-2, Article 57-5, Article 57-6, Article 57-8, Articles 65-7 to 65-9 (limited to the part pertaining to item (xix) of the table in Article 65-7, paragraph (1) of the Act), Article 67-12, paragraph (2) and Article 67-13, paragraph (2) of the Act, whose provisions are to be applicable under the provisions of the same item, the amount is to be included in deductible expenses for calculating the base income amount for the relevant business year, only when detailed statements concerning the inclusion of the amount in deductible expenses are attached to a final return form; provided, however, that when a final return form has not been submitted or a final return form has been submitted without detailed statements concerning the inclusion of the amount in deductible expenses, the district director may, when they find that there was any compelling reason therefor, apply the provisions of the main clause of this paragraph, only when the detailed statements have been submitted.

(8)Where a resident, who was subject to the provisions of paragraph (1) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year, seeks the application of paragraph (2) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year in years following the one to which the provisions of paragraph (1) have been applied, or where a resident, who was subject to the provisions of paragraph (2) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year, seeks the application of paragraph (1) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year in years following the one to which the provisions of paragraph (2) have been applied, they must receive approval from the competent district director having jurisdiction over their place for tax payment, in advance.

Article 25-21(1)The amount calculated as specified by Cabinet Order prescribed in Article 40-4, paragraph (1) of the Act is the amount obtained by deducting the sum of the amounts listed in paragraph (4), item (i), (d) and (e) of the preceding Article for the relevant business year from the amount of eligible income for the relevant business year of a specified foreign subsidiary company, etc. related to a resident listed in the items of the same paragraph and then multiplying the amount that remains after deduction by the ratio of the shares, etc. for considering the Claims held by the person out of the total Issued Shares, etc. of the specified foreign subsidiary company, etc. at the end of the relevant business year of the specified foreign subsidiary company, etc.

(2)In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

(3)The amount that is to be included in the necessary expenses for calculating the amount of miscellaneous income pertaining to the Taxable Income of a specified foreign subsidiary company to be included in the gross revenue pursuant to the provisions of Article 40-4, paragraph (1) of the Act is the sum of the amounts listed as follows (where the sum exceeds the amount deemed to be revenue pertaining to the miscellaneous income under the provisions of the same paragraph, the amount is that equivalent to the sum of the amounts deemed to be the revenue):

(4)The sum of the amounts listed in the items of the preceding paragraph which is included in the necessary expenses for calculating the amount of miscellaneous income pertaining to the Taxable Income pursuant to the provisions of the same paragraph is not to be included in the amount to be included in the necessary expenses for calculating the amount of business income or miscellaneous income and the amount of interest on liabilities prescribed in Article 24, paragraph (2) of the Income Tax Act which is deducted for calculating the amount of dividend income pursuant to the provisions of the same paragraph.

(5)The number of shares or the amount of capital contributions of a foreign corporation specified by Cabinet Order as those held indirectly as prescribed in Article 40-4, paragraph (2), item (iii) of the Act is the number or the amount of the shares, etc. obtained by multiplying the Issued Shares, etc. of a foreign corporation by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(6)The number of voting rights of a foreign corporation specified by Cabinet Order as being held indirectly as prescribed in Article 40-4, paragraph (2), item (iv) of the Act is the number of voting rights obtained by multiplying the total number of voting rights (meaning the voting rights prescribed in Article 40-4, paragraph (1), item (i), (a) of the Act; hereinafter the same applies in this paragraph) by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(7)The amount of a Dividend Surplus, etc. specified by Cabinet Order as being receivable based on the Claims vested in the shares, etc. of a foreign corporation held indirectly as prescribed in Article 40-4, paragraph (2), item (v) of the Act is the amount of a Dividend Surplus, etc. obtained by multiplying the total amount of a Dividend Surplus, etc. receivable based on the Claims vested in the shares, etc. of a foreign corporation by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(8)A person who has a special relationship specified by Cabinet Order with a resident or a domestic corporation prescribed in Article 40-4, paragraph (2), item (vi) of the Act is an individual or corporation listed as follows:

(9)The provisions of Article 4, paragraph (3) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where controlling any other corporation listed in (a) to (c) of item (ii) of the preceding paragraph.

(10)The amount of expenses specified by Cabinet Order prescribed in Article 40-4, paragraph (2), item (ii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article is the sum of personnel expenses for officers and employees of a specified foreign subsidiary company, etc. engaged in the business of the specified foreign subsidiary company, etc. prescribed in paragraph (3) of the same Article (limited to the amount to be included in deductible expenses for calculating the amount of income or loss pursuant to the provisions of paragraph (1) or paragraph (2) of the preceding Article for the relevant business year of the specified foreign subsidiary company, etc.).

Article 25-22(1)The person specified by Cabinet Order prescribed in Article 40-4, paragraph (4), item (i) of the Act is any of the following:

(2)The case specified by Cabinet Order prescribed in Article 40-4, paragraph (4), item (i) of the Act is any of the cases specified respectively in the following items, in accordance with the category of the principal business to be conducted for the relevant business year of a specified foreign subsidiary company, etc. prescribed in the same paragraph:

(3)Where transactions prescribed in the preceding paragraph between a specified foreign subsidiary company, etc. and an affiliated person related to the specified foreign subsidiary company, etc. are conducted indirectly via a person other than an affiliated person related to the specified foreign subsidiary company, etc. (hereinafter referred to as a "Non-Affiliated Person" in this paragraph), transactions between the specified foreign subsidiary company, etc. and the Non-Affiliated Person are deemed to have been conducted directly between the specified foreign subsidiary company, etc. and the affiliated person and the provisions of the items of the preceding paragraph are applied, except in the case where there are reasonable grounds for having the Non-Affiliated Person intervene in the transactions.

(4)The water areas specified by Cabinet Order prescribed in Article 40-4, paragraph (4), item (ii) of the Act are inland water and territorial sea and exclusive economic zones or water areas equivalent to continental shelves related to a state or territory prescribed in the same item.

(5)The case specified by Cabinet Order prescribed in Article 40-4, paragraph (4), item (ii) of the Act is any of the cases specified respectively in the following items, in accordance with the category of the principal business to be conducted for the relevant business year of a specified foreign subsidiary company, etc. prescribed in the same paragraph:

Article 25-23(1)The amount specified by Cabinet Order prescribed in Article 40-5, paragraph (1), item (i) of the Act is the amount obtained by deducting the sum of the amounts listed in Article 25-20, paragraph (4), item (i), (d) and (e) for the business year pertaining to a specified foreign subsidiary company, etc. prescribed in Article 40-5, paragraph (1), item (i) of the Act (hereinafter referred to a "Specified Foreign Subsidiary Company, etc." in this Article and paragraph (2) of the following Article), from the amount of eligible income (limited to that which pertains to Taxable Income to be included in the Amount of Gross Revenue in the calculation of the amount of miscellaneous income for the years, prescribed in the same item, of a resident; hereinafter the same applies in this paragraph) pertaining to the Specified Foreign Subsidiary Company, etc., and then multiplying the amount that remains after deduction by the ratio of the shares, etc. for considering the claims held directly by the resident out of the total Issued Shares, etc. of the Specified Foreign Subsidiary Company, etc. at the end of the relevant business year of the Specified Foreign Subsidiary Company, etc. (meaning the number or the amount of the shares, etc. of a foreign corporation held by a resident (where the foreign corporation has issued the shares, etc. in which different claims are vested, the number or the amount obtained by multiplying the Issued Shares, etc. of the foreign corporation by the ratio of the amount of a dividend of surplus, etc. that the resident can receive based on the claims out of the total amount); the same applies in the following paragraph)

(2)The amount specified by Cabinet Order prescribed in Article 40-5, paragraph (1), item (ii) of the Act is the amount obtained by deducting the sum of the amounts listed in Article 25-20, paragraph (4), item (i), (d) and (e) for the relevant business year from the amount of eligible income (limited to that which pertains to Taxable Income included in the Amount of Gross Revenue in the calculation of the amount of miscellaneous income for the years in the three years preceding the previous year prescribed in Article 40-5, paragraph (1), item (ii) of the Act of a resident) for the relevant business year of a Specified Foreign Subsidiary Company, etc., and then multiplying the amount that remains after deduction by the ratio of the shares, etc. for considering the claims held directly by the resident out of the total Issued Shares, etc. of the Specified Foreign Subsidiary Company, etc. at the end of the relevant business year of the Specified Foreign Subsidiary Company, etc.

Article 25-24(1)In the case referred to in Article 40-4, paragraph (1) of the Act, whether or not a foreign company falls under the category of an affiliated foreign company prescribed in paragraph (2), item (i) of the same Article (hereinafter referred to as an "Affiliated Foreign Company" in this paragraph) is to be determined according to its status at the end of the relevant business year of the foreign corporation and whether or not the person falls under the category of a resident listed in the items of paragraph (1) of the same Article is determined according to its status at the end of the relevant business year of an Affiliated Foreign Company related to the resident.

(2)With respect to the application of the provisions of Article 222 of the Order for Enforcement of the Income Tax Act when calculating the maximum creditable amount prescribed in Article 95, paragraph (1) of the Income Tax Act for a resident subject to the provisions of Article 40-4, paragraph (1) of the Act or Article 40-5, paragraph (1) or paragraph (2) of the Act, the amount of miscellaneous income pertaining to the Taxable Income to be included in the gross revenue pursuant to the provisions of Article 40-4, paragraph (1) of the Act is to be included in the domestic source income prescribed in Article 222, paragraph (3) of the same Order, and the amount of dividend income from a dividend, etc. prescribed in Article 40-5, paragraph (1) to be received from a specified foreign subsidiary company, etc. or an affiliated foreign company subject to the provisions of Article 40-5, paragraph (1) or paragraph (2) of the Act is to be the amount of the dividend income calculated without applying these provisions.

(3)The provisions of Article 14-10, paragraphs (1) to (5) and paragraphs (7) to (11) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of Article 40-4, paragraph (7) of the Act apply under the provisions of Article 40-4 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 40-6 of the Act and Articles 25-19 to 25-21 (excluding paragraph (10)), the preceding Article and this Article.

(4)With regard to a trust corporation or a beneficiary of a trust subject to corporation taxation prescribed in Article 4-7 of the Corporation Tax Act, beyond what is specified in the preceding paragraph, necessary particulars concerning the application of the provisions of Article 40-4 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 40-6 of the Act, or Articles 25-19 to 25-21 (excluding paragraph (10)), the preceding Article or this Article are specified by Ministry of Finance Order.

Article 25-25(1)An individual who has a special relationship specified by Cabinet Order prescribed in Article 40-7, paragraph (1) of the Act is any of the following:

(2)A corporation which has a special relationship specified by Cabinet Order prescribed in Article 40-7, paragraph (1) of the Act is any of the following:

(3)The provisions of Article 4, paragraph (3) and paragraph (4) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of the preceding paragraph apply.

(4)A relationship specified by Cabinet Order prescribed in Article 40-7, paragraph (1) of the Act is the relevant relationship in the case where a specially-related shareholder, etc. prescribed in the same paragraph (hereinafter referred to as a "Specially-Related Shareholder, etc." in this Section) and a specially-related domestic corporation have a relationship where the ratio of the shares, etc. indirectly held by the Specially-Related Shareholder, etc. pertaining to the specially-related domestic corporation (meaning the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)) is 80 percent or more:

(5)A foreign corporation specified by Cabinet Order prescribed in Article 40-7, paragraph (1) of the Act is any of the following:

(6)In item (iii) of the preceding paragraph, whether or not a foreign corporation directly or indirectly holds over 50 percent of the Issued Shares, etc. is to be determined based on the sum of the ratio of the shares, etc. held directly by a foreign corporation listed in item (i) and item (ii) of the same paragraph pertaining to any other foreign corporation (excluding a foreign corporation falling under the category of a foreign corporation listed in item (i) or item (ii) of the same paragraph and a foreign corporation falling under the category of a Specially-Related Shareholder, etc.; hereinafter the same applies in this paragraph) (the ratio of the shares, etc. held directly means the ratio of the number or the amount of the shares, etc. of any other foreign corporation held by a foreign corporation listed in item (i) and item (ii) of the preceding paragraph out of the total Issued Shares, etc. of the relevant other foreign corporation) and the ratio of the shares, etc. held indirectly by a foreign corporation listed in item (i) and item (ii) of the same paragraph pertaining to the relevant other foreign corporation (the ratio of the shares, etc. held indirectly means the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(7)An affiliated foreign corporation specified by Cabinet Order prescribed in Article 40-7, paragraph (1) of the Act is any of the following:

(8)The provisions of Article 25-19, paragraph (2) apply mutatis mutandis to the determination as to whether or not an affiliated foreign corporation falls under the category of an affiliated foreign corporation set forth in item (ii) of the preceding paragraph.

(9)An individual who has the special relationship specified by Cabinet Order prescribed in Article 40-7, paragraph (2), item (i) of the Act is an individual who has a special relationship prescribed in Article 4, paragraph (1) of the Order for Enforcement of the Corporation Tax Act with a shareholder, etc. of a domestic corporation.

(10)A corporation which has a special relationship specified by Cabinet Order prescribed in Article 40-7, paragraph (2), item (i) of the Act is any of the following:

(11)The provisions of Article 4, paragraph (3) and paragraph (4) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of the preceding paragraph apply.

(12)A domestic corporation specified by Cabinet Order prescribed in Article 40-7, paragraph (2), item (ii) of the Act is a domestic corporation which has received the transfer of almost all the assets and liabilities of a specified domestic corporation prescribed in the same item immediately prior to a merger, split, transfer of business or for other reasons (hereinafter referred to as "Specified Reasons" in this paragraph) due to the Specified Reasons.

Article 25-26(1)The amount of undistributed income calculated in accordance with the standards specified by Cabinet Order prescribed in Article 40-7, paragraph (2), item (iii) of the Act is the amount calculated, pursuant to the provisions of Article 25-20, paragraph (1) or paragraph (2), or paragraph (3) of the same Article, with regard to the income of a specified foreign corporation prescribed in Article 40-10, paragraph (1) of the Act (hereinafter referred to as a "Specified Foreign Corporation" in this Article and paragraph (1) of the following Article) in its settlement of accounts for the relevant business year.

(2)The amount obtained as a result of an adjustment for the amount of loss and base income prescribed in Article 40-7, paragraph (2), item (iii) of the Act is the amount that remains after deducting, from the base income amount prescribed in the same item for the relevant business year of a Specified Foreign Corporation, the sum of the amounts listed as follows (where the provisions of paragraph (3) of the same Article are applied, the amount obtained by adding the amount that accounts for ten percent of the amount of expenses specified by Cabinet Order prescribed in Article 40-7, paragraph (2), item (iii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article):

(3)A loss prescribed in item (i) of the preceding paragraph is a loss calculated with regard to the amount of income of a Specified Foreign Corporation in its settlement of accounts for the relevant business year, where the calculation has been made pursuant to the provisions of paragraph (1).

(4)The provisions of Article 25-20, paragraph (7) and paragraph (8) apply mutatis mutandis where the amount of income of a Specified Foreign Corporation in its settlement of accounts for the relevant business year is calculated pursuant to the provisions of paragraph (1) or paragraph (2) of the same Article.

Article 25-27(1)The amount calculated as specified by Cabinet Order prescribed in Article 40-7, paragraph (1) of the Act is the amount calculated with regard to the eligible income (meaning the eligible income prescribed in the same paragraph; hereinafter the same applies in this Section) for the relevant business year of a Specified Foreign Corporation related to a resident who is a Specially-Related Shareholder, etc., pursuant to the provisions of Article 25-21, paragraph (1) and paragraph (2).

(2)The provisions of Article 25-21, paragraph (3) and paragraph (4) apply mutatis mutandis to the case of calculating the amount to be included in the necessary expenses for calculating the amount of miscellaneous income pertaining to taxable income prescribed in Article 40-7, paragraph (1) of the Act which is to be included in the gross revenue pursuant to the provisions of the same paragraph.In this case, the term "Article 40-4, paragraph (2), item (iii)" in Article 25-21, paragraph (3), item (i) is deemed to be replaced with "Article 40-7, paragraph (2), item (i)", and the term "Article 222-2, paragraph (4), item (iii)" in item (ii) of the same paragraph is deemed to be replaced with "Article 222-2, paragraph (4), item (iv)".

(3)The provisions of Article 25-21, paragraph (5) apply mutatis mutandis to the number of shares or the amount of capital contributions of a foreign corporation specified by Cabinet Order as being held indirectly as prescribed in Article 40-7, paragraph (2), item (iv) of the Act.In this case, the term "an individual" in Article 25-21, paragraph (5) is deemed to be replaced with "a resident".

(4)The amount of expenses specified by Cabinet Order set forth in Article 40-7, paragraph (2), item (iii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article is the amount calculated with regard to the sum of personnel expenses for officers and employees of a specified foreign corporation engaged in the business of the specified foreign corporation prescribed in paragraph (3) of the same Article, pursuant to the provisions of Article 25-21, paragraph (10).

Article 25-28(1)The person specified by Cabinet Order prescribed in Article 40-7, paragraph (4), item (i) of the Act is any of the following:

(2)The provisions of Article 25-22, paragraph (2) and paragraph (3) apply mutatis mutandis to the case specified by Cabinet Order prescribed in Article 40-7, paragraph (4), item (i) of the Act.In this case, the term "those listed in the items of Article 40-4, paragraph (1), items of Article 66-6, paragraph (1), items of Article 68-90, paragraph (1) of the Act and the preceding items" in Article 25-22, paragraph (2), item (i) is deemed to be replaced with "a specially-related domestic corporation prescribed in Article 40-7, paragraph (2), item (ii) of the Act, Specially-Related Shareholder, etc. prescribed in paragraph (1) of the same Article and those listed in the items of Article 25-28, paragraph (1)".

(3)The provisions of Article 25-22, paragraph (5) apply mutatis mutandis to the case specified by Cabinet Order prescribed in Article 40-7, paragraph (4), item (ii) of the Act.

Article 25-29(1)The amount specified by Cabinet Order as prescribed in Article 40-8, paragraph (1), item (i) of the Act is the amount calculated in accordance with the provisions of Article 25-23, paragraph (1), with regard to the amount of eligible income (limited to that which pertains to taxable income prescribed in the same item that is included in the Amount of Gross Revenue in the calculation of the amount of miscellaneous income, for the years prescribed in the same item, of a resident who is a Specially-Related Shareholder, etc.) pertaining to a specified foreign corporation prescribed in the same item (referred to as a "Specified Foreign Corporation" in the following paragraph).

(2)The amount specified by Cabinet Order as prescribed in Article 40-8, paragraph (1), item (ii) of the Act is the amount calculated in accordance with the provisions of Article 25-23, paragraph (2), with regard to the amount of eligible income (limited to that which pertains to taxable income prescribed in the same item that is included in the Amount of Gross Revenue in the calculation of the amount of miscellaneous income for each of the three years preceding or including the previous year, prescribed in the same item, of a resident who is a Specially-Related Shareholder, etc.) for each business year of a Specified Foreign Corporation.

Article 25-30(1)Where the provisions of Article 40-7, paragraph (1) of the Act apply, whether or not a domestic corporation falls under the category of a specified domestic corporation prescribed in Article 40-7, paragraph (2), item (i) of the Act is to be determined according to its status immediately before an event causing a specified relationship prescribed in paragraph (1) of the same Article occurred, and whether or not the specified relationship actually exists afterwards between a Specially-Related Shareholder, etc. and a specially-related domestic corporation and whether or not a foreign corporation falls under the category of an affiliated foreign corporation is determined according to its status at the end of the relevant business year of the specially-related domestic corporation.

(2)Where a foreign corporation has been determined as falling under the category of an affiliated foreign corporation at the end of the relevant business year of a specially-related domestic corporation, pursuant to the provisions of preceding paragraph, the provisions of Article 40-7 of the Act apply to the eligible income for the relevant business year containing the day on which the affiliated foreign corporation (limited to that falling under the category of a specified foreign corporation prescribed in Article 40-7, paragraph (1) of the Act) was determined as falling under that category.

(3)The provisions of Article 25-24, paragraph (2) apply mutatis mutandis to the application of the provisions of Article 222 of the Order for Enforcement of the Income Tax Act in the case of calculating the maximum creditable amount prescribed in Article 95, paragraph (1) of the Income Tax Act for a resident subject to the provisions of Article 40-7, paragraph (1) or Article 40-8, paragraph (1) of the Act.

(4)The provisions of Article 14-10, paragraphs (1) to (5) and paragraphs (7) to (11) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of Article 40-7, paragraph (8) of the Act apply under the provisions of Article 40-7 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 40-9 of the Act, Articles 25-25 to 25-27 (excluding paragraph (5)), the preceding Article and this Article.

(5)With regard to a trust corporation or the beneficiary of a trust subject to corporation taxation prescribed in Article 4-7 of the Corporation Tax Act, beyond what is specified in the preceding paragraph, other necessary particulars concerning the application of the provisions of Article 40-7 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 40-9 of the Act, Articles 25-25 to 25-27 (excluding paragraph (5)), the preceding Article or this Article are specified by Ministry of Finance Order.

Article 26-9-2(1)The amount specified by Cabinet Order as prescribed in Article 41-12, paragraph (1) of the Act is the following amount:

(2)The amount specified by Cabinet Order as prescribed in Article 41-12, paragraph (3) of the Act is the following amount:

Article 26-10(1)The issuer of Discount Bonds must, when they pay income tax collected pursuant to the provisions of Article 41-12, paragraph (3) of the Act, attach a financial statement specified by Ministry of Finance Order to a payment statement prescribed in Article 34, paragraph (1) of the Act on General Rules for National Taxes at the time of the payment.

(2)The place for paying income tax to be collected and paid pursuant to the provisions of Article 41-12, paragraph (3) of the Act is at the location of the head office or principal office of an issuer of Discount Bonds (where the Discount Bonds are national government bonds (excluding those listed in Article 41-12, paragraph (7), item (i) of the Act), at the location of the head office of the Bank of Japan, and where the Discount Bonds are issued by a foreign corporation, at the location of the foreign corporation's principal office in Japan).

(3)The amount deemed to be income tax to be collected when receiving the redemption prescribed in Article 41-12, paragraph (4) of the Act pursuant to the provisions of the same paragraph is the amount of income tax that is to be collected from a person who receives the redemption, with regard to Discount Bonds that they hold at the time of the redemption, at the time of issuance of the Discount Bonds pursuant to the provisions of paragraph (3) of the same Article.

Article 26-11(1)The amount of income tax to be credited against corporation tax out of the amount deemed to be income tax to be collected when receiving the redemption prescribed in Article 41-12, paragraph (4) of the Act pursuant to the provisions of the same paragraph is the amount calculated, pursuant to the provisions of Article 140-2 of the Order for Enforcement of the Corporation Tax Act, with regard to the amount of the income tax (where the amount of the income tax is not clear, with regard to the amount obtained by deducting the issue price for the Discount Bonds (where the Discount Bonds are national government bonds listed in Article 41-12, paragraph (9), items (i) to (viii) of the Act which are those falling under the category of short-term government or company bonds prescribed in the same paragraph or other national government bonds specified by Ministry of Finance Order (hereinafter referred to as "Short-Term National Government Bonds, etc." in this paragraph) and are Discount Bonds other than those whose issue price is not clear, that issue price is the issue price on the final issue date for the Discount Bonds, and where the Discount Bonds are the Short-Term National Government Bonds, etc., that issue price is the price specified by Ministry of Finance Order as equivalent to the issue price for the Discount Bonds; that issue price is referred to as the "issue price, etc. on the final issue date" in Article 26-13, paragraph (1), item (i) and paragraph (5), item (ii)) from the face value of the Discount Bonds and then multiplying the amount that remains after deduction (where the Discount Bonds are issued outside Japan by a foreign corporation, the amount specified by Cabinet Order, prescribed in Article 41-12, paragraph (3) of the Act) by the rate of income tax on profit from redemption for the Discount Bonds collected at the time of issuance pursuant to the provisions of paragraph (3) of the same Article, and where the Discount Bonds have been redeemed by bringing the redemption date forward or retired by purchase prior to the redemption date, with regard to the amount that remains after deducting the amount to be refunded that was calculated pursuant to the provisions of paragraph (1) of the following Article from the amount of the income tax). In this case, the term "interest" in Article 140-2, paragraph (1), item (i) of the Order for Enforcement of the Corporation Tax Act is deemed to be replaced with "profit from redemption (meaning profit from redemption as prescribed in Article 41-12, paragraph (7) (Separate Taxation for Profit from Redemption) of the Act on Special Measures Concerning Taxation; the same applies in the following paragraph and paragraph (3))"; the term "out of the number of months" in paragraph (2) of the same Article is deemed to be replaced with "out of the number of months (the number of days, where the dividend of interest, etc. is profit from redemption for short-term government or company bonds (meaning short-term government or company bonds prescribed in Article 41-12, paragraph (9) of the Act on Special Measures Concerning Taxation; the same applies in the following paragraph); hereinafter the same applies in this paragraph)"; and the term "the amount of income prescribed in paragraph (1), item (i)" in paragraph (3) of the same Article is deemed to be replaced with "the amount of income (excluding the amount of income tax on profit from redemption of short-term government or company bonds) prescribed in paragraph (1), item (i)".

(2)The amount of income tax collected pursuant to the provisions of Article 41-12, paragraph (3) of the Act, where a corporation acquired Discount Bonds at the time of issue, is to be included in the acquisition costs of the Discount Bonds; the amount deemed to be income tax to be collected when receiving the redemption pursuant to the provisions of paragraph (4) of the same Article is not to be included in deductible expenses for calculating the amount of income for a business year containing the time of receiving the redemption (where the business year is a consolidated business year prescribed in Article 15-2 of the Corporation Tax Act, for calculating the amount of consolidated income prescribed in Article 2, item (xviii)-4 of the same Act for the consolidated business year; hereinafter the same applies in this paragraph); and the amount of income tax to be credited against corporation tax pursuant to the provisions of Article 68 (including the cases where it is applied mutatis mutandis pursuant to Article 144 of the same Act) or Article 81-14 of the same Act is to be included in gross profits for calculating the amount of income that is to be credited for that business year.

Article 26-12(1)The amount of income tax to be refunded pursuant to the provisions of Article 41-12, paragraph (5) of the Act is the amount obtained by deducting the redemption price (where retirement by purchase is performed, the purchase price; hereinafter the same applies in this paragraph) from the face value of the Discount Bonds and then multiplying the amount that remains after deduction (where the Discount Bonds are issued outside Japan by a foreign corporation, the amount listed as follows) by the rate of income tax on profit from redemption for the Discount Bonds collected at the time of issue, pursuant to the provisions of paragraph (3) of the same Article:

(2)A refund under the provisions of Article 41-12, paragraph (5) of the Act is made at the time of redemption prescribed in the same paragraph.In this case, the amount to be refunded is deducted from the amount payable pursuant to the provisions of paragraph (3) of the same Article or Article 181 or Article 212 of the Income Tax Act.

Article 26-13(1)The amount of income tax to be refunded pursuant to the provisions of Article 41-12, paragraph (6) of the Act with regard to Discount Bonds set forth in the same paragraph is the amount specified respectively in the following items for the category of cases listed in the relevant items:

(2)The amount corresponding to the period during which a Non-taxable Corporation, etc. held the Discount Bonds as prescribed in items of the preceding paragraph is the amount obtained by multiplying the amount of income tax or remaining amount prescribed in those items by the ratio of the number of months (where the Discount Bonds are short-term government or company bonds prescribed in Article 41-12, paragraph (9) of the Act, the number of days; hereinafter the same applies in this paragraph and paragraph (5), item (iii)) up to the redemption date during which the Non-taxable Corporation, etc. held the Discount Bonds out of the number of months from the issue date (where the date is not clear, the final issue date for the Discount Bonds) to the redemption date (including a date for retirement by purchase; hereinafter the same applies in this Article) of the Discount Bonds.

(3)The number of months set forth in the preceding paragraph is calculated by calendar month, and when there are any fractions less than one month, those fractions are deemed to be one month for counting the period during which a Non-taxable Corporation, etc. held the Discount Bonds and are to be rounded off for calculating the period from the issue date to the redemption date of the Discount Bonds, and when the ratio set forth in the same paragraph exceeds one, the ratio is deemed to be one.

(4)A refund pursuant to the provisions of Article 41-12, paragraph (6) is made at the time of paying the profit from redemption as prescribed in the same paragraph upon request from a Non-taxable Corporation, etc.In this case, the provisions of the second sentence of Article 26-12, paragraph (2) apply mutatis mutandis.

(5)A Non-taxable Corporation, etc. intending to receive a refund pursuant to the provisions of Article 41-12, paragraph (6) of the Act must submit a written request for a refund containing the following particulars, along with a document certifying the date of acquisition of the Discount Bonds, to the issuer of the Discount Bonds by the day on which they receive the payment of the profit from redemption as prescribed in the same paragraph for the Discount Bonds set forth in the same paragraph:

Article 26-14(1)Where the provisions of Article 26-12, paragraph (2) or paragraph (4) of the preceding Article apply, when there is any amount that an issuer prescribed in Article 41-12, paragraph (5) or paragraph (6) of the Act (hereinafter referred to as an "Issuer" in this Article) cannot deduct as prescribed in the second sentence of Article 26-12, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to paragraph (4) of the preceding Article) in the month following the month including the day on which they are to make a refund pursuant to the provisions of Article 41-12, paragraph (5) or paragraph (6) of the Act, the competent district director having jurisdiction over the place for tax payment prescribed in Article 26-10, paragraph (2) for income tax pertaining to the profit from redemption for discount bonds prescribed in Article 41-12, paragraph (5) or paragraph (6) of the Act refunds the amount that cannot be deducted to the Issuer.

(2)An Issuer who seeks the application of the provisions of the preceding paragraph must submit a document containing that fact to the competent district director set forth in the preceding paragraph, along with a detailed statement containing the amount that they are to refund pursuant to the provisions of Article 41-12, paragraph (5) or paragraph (6) of the Act, the amount that they cannot deduct as prescribed in the preceding paragraph out of the amount, which of the provisions of paragraph (5) or paragraph (6) of the same Article the refund is based on, and other necessary particulars.

(3)Where the interest on a refund prescribed in Article 58, paragraph (1) of the Act on General Rules for National Taxes is to be calculated with regard to a refund under the provisions of paragraph (1), the period set forth in Article 58, paragraph (1) of the same Act to be used as the basis for the calculation is the period from the day on which one month has elapsed from the next day of submitting the documents set forth in the preceding paragraph up to the day on which the payment for the refund is determined or the day on which an appropriation is made for the refund (where there has been any day suitable for an appropriation before that day, up to the day which proved to be suitable).

Article 26-15(1)The government or company bonds specified by Cabinet Order prescribed in Article 41-12, paragraph (7) of the Act are the government or company bonds listed as follows which are issued by means of a discount:

(2)Those specified by Cabinet Order prescribed in Article 41-12, paragraph (7), item (ii) of the Act are the bonds issued by the Japan Housing Finance Agency, the Okinawa Development Finance Corporation, or the Urban Renaissance Agency pursuant to the provisions of Article 8 of the Supplementary Provisions of the Japan Housing Finance Agency Act, Article 27, paragraph (4) of the Okinawa Development Finance Corporation Act (Act No. 31 of 1972) or Article 15, paragraph (1) of the Supplementary Provisions of the Urban Renaissance Agency Act.

Article 26-15-2Profit from redemption of government or company bonds listed in paragraph (1), item (iii) of the preceding Article (excluding specified short-term government or company bonds prescribed in Article 41-12, paragraph (9) of the Act) that is to be received by a nonresident are deemed to be income arising from the utilization or holding of assets located in Japan prescribed in Article 161, item (i) of the Income Tax Act, and the provisions of the same Act and other income tax-related laws and regulations (excluding provisions concerning withholding income tax prescribed in Article 2, paragraph (1), item (xlv) of the Income Tax Act) apply.

Article 26-15-3The provisions of Article 37-16, paragraph (1) of the Act do not apply to income arising from the transfer of the following government or company bonds, issued by means of a discount, that was carried out by a resident or a nonresident who maintains a permanent establishment in Japan:

Article 26-16The entries or records under the book-entry system specified by Cabinet Order prescribed in Article 41-12, paragraph (9) of the Act are the entries or records under the book-entry system specified respectively in the following items for the category of short-term government or company bonds listed in the relevant items:

Article 26-17The income specified by Cabinet Order prescribed in Article 41-12, paragraph (10) of the Act is the income from a transfer of specified short-term government or company bonds prescribed in the same paragraph that was carried out by a resident or a nonresident who maintains a permanent establishment in Japan.

Article 26-18(1)Those specified by Cabinet Order prescribed in Article 41-12, paragraph (12) of the Act are the national government or any of the following:

(2)The documents specified by Cabinet Order prescribed in Article 41-12, paragraph (12) of the Act are the documents listed respectively in the following items for the category of persons listed in the relevant items:

(3)The identification documents prescribed in Article 41-12, paragraph (12) of the Act (hereinafter referred to as the "Identification Documents" through to Article 26-20) must be presented pursuant to the provisions of Article 41-12, paragraph (12) of the Act when submitting a written notice set forth in the same paragraph.

(4)When a person who had submitted a written notice set forth in Article 41-12, paragraph (12) of the Act has changed the person's name or address (or any other place specified by Ministry of Finance Order in the case where the person does not have an address in Japan; hereinafter the same applies through to Article 26-20), the person must promptly submit a document containing the person's name and address after the change to the head of the Business Office, etc. (meaning a Business Office, etc. prescribed in Article 41-12, paragraph (12) of the Act; hereinafter the same applies in this Article) of the Specified Book-Entry Institution, etc. to which the person had submitted the written notice (where the person had submitted the written notice, pursuant to the provisions of the same paragraph, via a foreign intermediary to the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. where they make entries or records under the book-entry system for the specified Book-Entry National Government Bonds, etc. (meaning specified Book-Entry National Government Bonds, etc. prescribed in the same paragraph; hereinafter the same applies through to Article 26-20), the person must promptly submit that document via the foreign intermediary to the head of the Business Office, etc. of the Specified Book-Entry Institution, etc., according to the provisions of the first sentence of Article 41-12, paragraph (12) of the Act). The same applies where the person has changed the name or address again after submitting that document.

(5)A person who submits the document prescribed in the preceding paragraph must, when submitting that document, present the Identification Documents to the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. to which they submit that document (excluding the case where they submit that document via a foreign intermediary; the same applies in the following paragraph) or to the head of the overseas Business Office, etc. (meaning the overseas Business Office, etc. prescribed in Article 41-12, paragraph (12) of the Act) of the foreign intermediary set forth in the same paragraph via which they had submitted a written notice prescribed in the preceding paragraph as prescribed in Article 41-12, paragraph (12) of the Act (referred to as the "head of the overseas Business Office, etc. of the foreign intermediary" in the following paragraph and paragraph (8)).

(6)The head of the Business Office, etc. of the Specified Book-Entry Institution, etc. or the head of the overseas Business Office, etc. of the foreign intermediary must, when a written notice prescribed in Article 41-12, paragraph (12) of the Act or the document prescribed in paragraph (4) has been submitted, confirm whether or not the name and address entered in the written notice or the document are consistent with the name and address entered in the Identification Documents which were presented pursuant to the provisions of Article 41-12, paragraph (12) of the Act or the preceding paragraph at the time of the submission of the written notice or the document.

(7)The foreign intermediary set forth in the preceding paragraph that has provided a confirmation pursuant to the provisions of the same paragraph must submit the documents prescribed in Article 41-12, paragraph (14) of the Act for each person who makes entries or records under the book-entry system set forth in paragraph (12) of the same Article to the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. where the foreign intermediary makes entries or records under the book-entry system for specified Book-Entry National Government Bonds, etc. pertaining to the confirmation (where the foreign intermediary is a foreign further indirect account management institution (meaning a foreign further indirect account management institution prescribed in the same paragraph), to the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. where the foreign further indirect account management institution prescribed in paragraph (14) of the same Article pertaining to the specified Book-Entry National Government Bonds, etc. makes entries or records under the book-entry system for the specified Book-Entry National Government Bonds, etc. via the foreign further indirect account management institution).

(8)The head of the Business Office, etc. of the Specified Book-Entry Institution, etc. or the head of the overseas Business Office, etc. of the foreign intermediary must, when having provided a confirmation pursuant to the provisions of paragraph (6), clearly record that they have provided the confirmation in the books concerning the confirmation (including the books or documents equivalent thereto), pursuant to the provisions of Ministry of Finance Order, and preserve those books; and the head of the Business Office, etc. of the Specified Book-Entry Institution, etc. who has received the submission of a written notice prescribed in Article 41-12, paragraph (12) of the Act, the document prescribed in paragraph (4) or the documents prescribed in the preceding paragraph must preserve the written notice and documents, pursuant to the provisions of Ministry of Finance Order.

(9)Where a nonresident or foreign corporation (excluding those listed in paragraph (1), item (i), item (iii), or item (iv); hereinafter the same applies in this paragraph) makes entries or records under the book-entry system for Short-Term National Government Bonds, etc. (meaning national government bonds listed in Article 41-12, paragraph (9), items (i) to (viii) of the Act which fall under the category of specified short-term government or company bonds and principal-only Book-Entry National Government Bonds and coupon-only Book-Entry National Government Bonds prescribed in paragraph (12) of the same Article) for the first time on or after April 1, 1999 in the account pertaining to entries or records under the book-entry system that has gone through the confirmation pursuant to the provisions of Article 5-2, paragraph (9) of the Act (including the cases where it is applied mutatis mutandis pursuant to paragraph (12) of the same Article; hereinafter the same applies in this paragraph) (hereinafter that confirmation is referred to as a "confirmation pertaining to Book-Entry National Government Bonds, etc." in this paragraph), with regard to the entries or records under the book-entry system, it is deemed that the submission of a written notice set forth in Article 41-12, paragraph (12) of the Act under the provisions of the same paragraph (including the submission of the document set forth in paragraph (4) under the provisions of the same paragraph) has been made by the submission of a Written Application for Tax Exemption of Book-Entry National Government Bonds set forth in Article 5-2, paragraph (1), item (i), (a) of the Act under the provisions of (a) of the same item (including the submission of a written application set forth in paragraph (10) of the same Article under the provisions of the same paragraph) or the submission of a Written Application for Tax Exemption of Book-Entry Local Government Bonds set forth in Article 5, paragraph (1), item (ii), (a) of the Act under the provisions of (a) of the same item (including the submission of a written application set forth in paragraph (11) of the same Article under the provisions of the same paragraph) for the confirmation pertaining to Book-Entry National Government Bonds, etc., that the presentation of the Identification Documents under the provisions of Article 41-12, paragraph (12) of the Act (including the provisions of paragraph (5)) has been made by the presentation of the documents specified by Cabinet Order set forth in Article 5-2, paragraph (9) of the Act under the provisions of the same paragraph for the confirmation pertaining to Book-Entry National Government Bonds, etc., and that the confirmation under the provisions of paragraph (6) (including the submission of the documents set forth in paragraph (7) under the provisions of the same paragraph) has been provided by the confirmation pertaining to Book-Entry National Government Bonds, etc.; provided, however, that this does not apply when the name and address to be entered in a written notice set forth in Article 41-12, paragraph (12) of the Act or the document set forth in paragraph (4) are inconsistent with the name and address of the nonresident or foreign corporation for which the confirmation pertaining to Book-Entry National Government Bonds, etc. has been provided.

(10)The form of a written notice set forth in Article 41-12, paragraph (12) of the Act is specified by Ministry of Finance Order.

(11)The documents specified by Cabinet Order prescribed in Article 41-12, paragraph (14) of the Act are a document certifying that the confirmation prescribed in the same paragraph has been provided, the Identification Documents and a copy of the Identification Documents.

Article 26-18-2(1)When persons intending to make entries or records under the book-entry system prescribed in Article 41-12, paragraph (15) of the Act (hereinafter referred to as "Customers" in this Article) have made entries or records under the book-entry system for specified Book-Entry National Government Bonds, etc. via a foreign intermediary, the foreign intermediary must enter or record the particulars prescribed in the same paragraph in the books prescribed in the same paragraph, for each of the Customers each time, and preserve those books pursuant to the provisions of Ministry of Finance Order.

(2)When Customers have made entries or records under the book-entry system for specified Book-Entry National Government Bonds, etc. via a foreign intermediary, the foreign intermediary must provide information about the particulars prescribed in Article 41-12, paragraph (16) of the Act for each of the Customers to the Specified Book-Entry Institution, etc. prescribed in the same paragraph of the foreign intermediary pertaining to the specified Book-Entry National Government Bonds, etc. by way of a document or any other means prescribed in the following paragraph.

(3)The means specified by Cabinet Order prescribed in Article 41-12, paragraph (16) of the Act is a means of using an electronic data processing system or another means of using information and communications technology that is specified by Ministry of Finance Order.

(4)The Specified Book-Entry Institution, etc. prescribed in paragraph (2) must, when having received a notification set forth in the same paragraph, enter or record the particulars notified, for each of the Customers each time, in the books prescribed in Article 41-12, paragraph (16) of the Act and preserve those books pursuant to the provisions of Ministry of Finance Order.

Article 26-19(1)Those specified by Cabinet Order prescribed in Article 41-12, paragraph (17) of the Act are the national government and those listed in Article 26-18, paragraph (1), item (i), item (ii) and item (iv) (referred to as "public corporations, etc." in paragraph (1) of the following Article).

(2)A notification under the provisions of Article 41-12, paragraph (17) of the Act must be made each time, on receipt of the payment of a consideration for the transfer of specified Book-Entry National Government Bonds, etc. prescribed in the same paragraph.

(3)The Identification Documents must be presented pursuant to the provisions of Article 41-12, paragraph (17) of the Act when making a notification set forth in the same paragraph.

(4)Necessary particulars concerning the scope of the Identification Documents that a person intending to make a notification under the provisions of Article 41-12, paragraph (17) of the Act must present pursuant to the provisions of the same paragraph are specified by Ministry of Finance Order.

(5)A defrayer prescribed in Article 41-12, paragraph (17) of the Act (referred to as a "Defrayer" in the following paragraph) must, when having received a notification under the provisions of paragraph (17) of the same Article, confirm whether or not the name and address notified are consistent with the name and address entered in the Identification Documents that were presented to the Defrayer at the time of the notification pursuant to the provisions of the same paragraph.

(6)A Defrayer must, when having provided a confirmation under the provisions of the preceding paragraph, clearly record that they have provided the confirmation in the books concerning the confirmation (including the books or documents equivalent thereto), pursuant to the provisions of Ministry of Finance Order, and preserve those books.

Article 26-20(1)Those specified by Cabinet Order prescribed in Article 41-12, paragraph (18) of the Act are public corporations, etc.

(2)Where a specified book-entry institution, etc. and a foreign intermediary receive redemption money (meaning redemption money prescribed in Article 41-12, paragraph (18) of the Act; hereinafter the same applies in this Article) or payment of interest (meaning interest prescribed in Article 41-12, paragraph (18) of the Act; hereinafter the same applies in this Article) pertaining to specified Book-Entry National Government Bonds, etc., due to the redemption (meaning the redemption prescribed in Article 41-12, paragraph (18) of the Act; the same applies in paragraph (7)) or payment of interest, a written notice set forth in Article 41-12, paragraph (18) of the Act under the provisions of the same paragraph is not required to be submitted for the receipt of the redemption or payment of interest.

(3)The identification documents must be presented pursuant to the provisions of Article 41-12, paragraph (18) of the Act when submitting a written notice set forth in the same paragraph.

(4)Necessary particulars concerning the scope of the identification documents that a person intending to submit a written notice under the provisions of Article 41-12, paragraph (18) of the Act must present pursuant to the provisions of the same paragraph are specified by Ministry of Finance Order.

(5)A person in charge of handling payment of redemption money or interest pertaining to specified Book-Entry National Government Bonds, etc. must, when a written notice prescribed in Article 41-12, paragraph (18) of the Act has been submitted, confirm whether or not the name and address entered in the written notice are consistent with the name and address entered in the identification documents that were presented to the person at the time of the submission of the written notice pursuant to the provisions of the same paragraph.

(6)A person in charge of handling payment of redemption money or interest pertaining to specified Book-Entry National Government Bonds, etc. must, when having provided a confirmation under the provisions of the preceding paragraph, clearly record that they have provided the confirmation in the books concerning the confirmation (including the books or documents equivalent thereto), pursuant to the provisions of Ministry of Finance Order, and preserve those books and the written notice prescribed in Article 41-12, paragraph (18) of the Act.

(7)Where a person who receives a payment prescribed in Article 41-12, paragraph (18) of the Act receives redemption money or payment of interest pertaining to specified Book-Entry National Government Bonds, etc., due to the redemption or payment of interest, pertaining to a confirmation provided pursuant to the provisions of Article 26-18, paragraph (6) (hereinafter referred to as a "Confirmation Pertaining to Entries or Records Under the Book-Entry System" in this paragraph), with regard to the receipt of the redemption money or payment of interest, it is deemed that the submission of a written notice set forth in Article 41-12, paragraph (18) of the Act under the provisions of the same paragraph has been made by the submission of a written notice set forth in Article 41-12, paragraph (12) of the Act under the provisions of the same paragraph (including the submission of the document set forth in Article 26-18, paragraph (4) under the provisions of the same paragraph) for the Confirmation Pertaining to Entries or Records Under the Book-Entry System, that the presentation of the identification documents under the provisions of Article 41-12, paragraph (18) of the Act has been made by the presentation of the identification documents under the provisions of Article 41-12, paragraph (12) of the Act (including the provisions of Article 26-18, paragraph (5)) for the Confirmation Pertaining to Entries or Records Under the Book-Entry System, and that the confirmation under the provisions of Article 41-12, paragraph (18) of the Act (including the submission of the documents set forth in paragraph (14) of the same Article under the provisions of the same paragraph which is applied mutatis mutandis pursuant to paragraph (19) of the same Article) has been provided by the Confirmation Pertaining to Entries or Records Under the Book-Entry System; provided, however, that this does not apply when the name and address to be entered in a written notice set forth in Article 41-12, paragraph (18) of the Act are inconsistent with the name and address of the person for which the Confirmation Pertaining to Entries or Records Under the Book-Entry System has been provided.

(8)The form of a written notice set forth in Article 41-12, paragraph (18) of the Act is specified by Ministry of Finance Order.

Article 26-21(1)Those specified by Cabinet Order prescribed in Article 41-12, paragraph (21) of the Act are the national government and those listed in the items of Article 26-18, paragraph (1).

(2)A defrayer prescribed in Article 41-12, paragraph (21) of the Act who intends to obtain the approval set forth in the same paragraph must submit a written application containing their name and location, intention to obtain the approval, and any other particulars specified by Ministry of Finance Order to the competent district director prescribed in the same paragraph.

(3)Where a written application set forth in the preceding paragraph has been submitted, when the competent district director set forth in the same paragraph has granted approval or has decided not to grant approval, the director is to notify to that effect to the applicant in writing.

(4)A person in charge of handling payment of redemption money or interest pertaining to specified Book-Entry National Government Bonds, etc. prescribed in Article 41-12, paragraph (22) of the Act who intends to obtain the approval set forth in the same paragraph must submit a written application containing their name and location, intention to obtain the approval, and any other particulars specified by Ministry of Finance Order to the competent district director prescribed in the same paragraph.

(5)Where a written application set forth in the preceding paragraph has been submitted, when the competent district director set forth in the same paragraph has granted approval or has decided not to grant approval, the director is to notify to that effect to the applicant in writing.

(6)A person who pays a consideration for the transfer of specified Book-Entry National Government Bonds, etc. or who is in charge of handling payment of redemption money or interest pertaining to specified Book-Entry National Government Bonds, etc. prescribed in Article 41-12, paragraph (23) of the Act, who intends to obtain the approval set forth in the same paragraph, must submit a written application containing their name and location, the type of optical disk prescribed in the same paragraph which they intend to submit, and any other particulars specified by Ministry of Finance Order to the competent district director having jurisdiction over the location.

(7)Where a written application set forth in the preceding paragraph has been submitted, when the competent district director set forth in the same paragraph has granted approval or has decided not to grant approval, the director is to notify to that effect to the applicant in writing.

(8)The form of a report of payment of a consideration for the transfer of specified Book-Entry National Government Bonds, etc. prescribed in Article 41-12, paragraph (21) of the Act or a report of payment of redemption money, etc. of specified Book-Entry National Government Bonds, etc. prescribed in paragraph (22) of the same Article is specified by Ministry of Finance Order.

Article 26-22The discount on bonds specified by Cabinet Order prescribed in Article 41-13 of the Act is the discount on bonds listed as follows:

Article 26-30(1)The act specified by Cabinet Order as the execution of operations, as prescribed in Article 41-21, paragraph (1), item (ii) of the Act, is the following acts:

(2)In the case of applying the provisions of Article 41-21, paragraph (1), item (ii) of the Act, when a person who has an equity interest in the partnership property (referred to as "Investment Partnership Property" in paragraph (4) and paragraph (5)) pertaining to an investment partnership contract subject to special provisions (meaning an investment partnership contract subject to the provisions of Article 41-21, paragraph (1), item (ii) of the Act, which is concluded by a nonresident or foreign corporation who is subject to the provisions of the same paragraph; hereinafter the same applies in this Article and the following Article), as partnership property pertaining to any of the partnership contracts listed in the following items (excluding the investment partnership contract subject to special provisions; hereinafter the same applies in this paragraph), which is concluded by one of the partners who has concluded the investment partnership contract subject to special provisions (the relevant person means a person other than the partner), performs the acts listed in the items of the preceding paragraph pertaining to the investment partnership business under the investment partnership contract subject to special provisions as the execution of operations of the business conducted based on the partnership contract listed in those items, it is deemed that the partner performs the acts pertaining to the investment partnership business:

(3)The partnership contract prescribed in the preceding paragraph means a contract listed in the following items, and the partnership property prescribed in the same paragraph means property specified in those items for the category of contracts listed in those items:

(4)The ratio calculated pursuant to the provisions of Cabinet Order as the ratio of equity interest as prescribed in Article 41-21, paragraph (1), item (iii) of the Act is either of the following ratios, which is higher:

(5)The specially-related partner prescribed in the preceding paragraph is one of the following persons:

(6)The person who has a special relationship with a nonresident or foreign corporation as prescribed in item (ii) of the preceding paragraph is one of the following persons:

(7)The relationship of direct or indirect control prescribed in item (ii) or item (iii) of the preceding paragraph means any relationships between one person and another person whereby the relevant other person falls under the category of corporation listed in the following:

(8)The provisions of Article 4, paragraph (3) and paragraph (6) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis pursuant to the case of controlling the corporation prescribed in item (i) of the preceding paragraph and the case of controlling another corporation prescribed in item (ii) or item (iii) of the same paragraph.

(9)The person who has a special relationship specified by Cabinet Order with an unlimited liability partner as prescribed in Article 41-21, paragraph (1), item (iv) of the Act is a nonresident or foreign corporation in the relationship whereby the unlimited liability partner falls under any of the categories of persons listed in the items of paragraph (6).

(10)The grounds specified by Cabinet Order as prescribed in Article 41-21, paragraph (4) of the Act are the following grounds:

(11)Where the person in charge of handling distribution prescribed in Article 41-21, paragraph (3) of the Act (referred to as a "person in charge of handling distribution" in the following paragraph) has received a written application for special provisions prescribed in paragraph (3) of the same Article or a written statement of change prescribed in paragraph (7) of the same Article (hereinafter referred to as a "Written Application for Special Provisions, etc." in this paragraph and the following paragraph), they must submit the Written Application for Special Provisions, etc. to the district director of the tax office prescribed in paragraph (3) of the same Article no later than the tenth of the month following the month including the day of the receipt, and prepare and preserve a copy of the Written Application for Special Provisions, etc. (including those equivalent thereto) pursuant to the provisions of Ministry of Finance Order.

(12)The person in charge of handling distribution who has received a Written Application for Special Provisions, etc. must, for each person who has submitted the Written Application for Special Provisions, etc., enter or record in their book the day on which the person who has submitted the Written Application for Special Provisions, etc. concluded the investment partnership contract pertaining to the Written Application for Special Provisions, etc. and other particulars specified by Ministry of Finance Order, and must preserve that book pursuant to the provisions of Ministry of Finance Order.

(13)The nonresident prescribed in Article 41-21, paragraph (9) of the Act must submit the document prescribed in the same paragraph to the competent district director of the tax office having jurisdiction over the place for tax payment, no later than March 15 of the year following the year containing the day on which they have obtained any amount of income categorized as domestic source income prescribed in the same paragraph.

(14)Where a nonresident or foreign corporation who is a partner having concluded an investment partnership contract and who has not satisfied the requirements listed in Article 41-21, paragraph (1), item (v) of the Act (hereinafter referred to as the "Item (v) Requirement" in this paragraph and the following paragraph) by the time of the conclusion of the investment partnership contract, comes to satisfy the Item (v) Requirement in respect of the investment partnership contract, with regard to the application of the provisions of paragraph (3) of the same Article to the investment partnership contract in the case where the nonresident or foreign corporation satisfies the requirements listed in paragraph (1), items (i) through (iv) of the same Article in respect of the investment partnership contract continuously during the period from the date of conclusion until the day on which the nonresident or foreign corporation comes to satisfy the Item (v) Requirement, the phrase "date of conclusion of " in paragraph (3) of the same Article is deemed to be replaced with "the day on which the nonresident or foreign corporation comes to satisfy the requirements listed in paragraph (1), item (v) in respect of"; and the phrase "items of paragraph (1)" in the same paragraph is deemed to be replaced with "items of the same paragraph".

(15)Where a nonresident or foreign corporation who is a partner having concluded two or more investment partnership contracts and who has not satisfied the Item (v) Requirement at the time of the conclusion of each investment partnership contract, would come to satisfy the Item (v) Requirement in respect of one of the relevant two or more investment partnership contracts provided that the nonresident or foreign corporation does not conduct a business in Japan under an investment partnership contract(s) other than the relevant one of the two or more investment partnership contracts (hereinafter referred to as the "Other Investment Partnership Contract(s)" in this paragraph), with regard to the application of the provisions of Article 41-21, paragraph (3) of the Act to the relevant one investment partnership contract in the case where the nonresident or foreign corporation satisfies the requirements listed in paragraph (1), items (i) through (iv) of the same Article in respect of the investment partnership contract continuously during the period from the date of the conclusion of each investment partnership contract until the day on which the nonresident or foreign corporation comes to satisfy the Item (v) Requirement, the phrase "the date of conclusion of" in paragraph (3) of the same Article is deemed to be replaced with "the day on which the nonresident or foreign corporation comes to satisfy the requirements listed in paragraph (1), item (v) in respect of"; the phrase "items of paragraph (1)" in the same paragraph is deemed to be replaced with "items of the same paragraph"; and the phrase "on the date of the submission and thereafter" in the same paragraph is deemed to be replaced with "on the day on which the nonresident or foreign corporation has submitted written applications for special provisions in respect of all of the investment partnership contracts concluded thereby, and thereafter".

(16)Where a foreign corporation who seeks the application of the provisions of Article 41-21, paragraph (1) of the Act has submitted a written application for special provisions prescribed in paragraph (3) of the same Article pursuant to the provisions of the same paragraph as applied mutatis mutandis pursuant to Article 67-16, paragraph (2) of the Act or where the foreign corporation has submitted a written statement of change prescribed in Article 41-21, paragraph (7) of the Act pursuant to the provisions of the same paragraph as applied mutatis mutandis pursuant to Article 67-16, paragraph (2) of the Act, it is deemed that the foreign corporation has submitted a written application for special provisions prescribed in Article 41-21, paragraph (3) of the Act pursuant to the provisions of the same paragraph or a written statement of change prescribed in paragraph (7) of the same Article pursuant to the provisions of the same paragraph, respectively.

Article 26-31(1)Where a nonresident listed in Article 164, paragraph (1), item (iv) of the Income Tax Act (hereinafter referred to as a "Nonresident Having No Permanent Establishments in Japan" in this Article) has concluded an investment partnership contract subject to special provisions, etc. (meaning an investment partnership contract subject to special provisions and an investment partnership contract (limited to the investment partnership contract in the case where the Nonresident Having No Permanent Establishments in Japan satisfies the requirements listed in item (i) and item (ii) in respect of an investment partnership contract other than an investment partnership contract subject to special provisions; hereinafter the same applies in this paragraph and paragraph (5)); hereinafter the same applies in this Article), when the nonresident has transferred (meaning a transfer as prescribed in Article 291, paragraph (1), item (iii) of the Order for Enforcement of the Income Tax Act; hereinafter the same applies in this Article) shares of or capital contributions to a domestic corporation that satisfy the requirements listed in the items of paragraph (6) of the same Article (including the case where the domestic corporation is deemed, pursuant to the provisions of Article 291, paragraph (7) of the same Order, to have conducted the transfer of shares or capital contributions as prescribed in paragraph (6), item (ii) of the same Article that satisfies the requirements listed in the same item, and limited to the case where the nonresident satisfies the requirements listed in item (iii) in respect of the shares or capital contributions of a domestic corporation), with regard to the transfer of shares of or capital contributions to the domestic corporation, the provisions of Article 291 of the same Order apply by deeming that the person listed in paragraph (4), item (iii) of the same Article pertaining to the investment partnership contract subject to special provisions, etc. is not included in the scope of specially-related shareholders, etc. prescribed in paragraph (6) and paragraph (7) of the same Article:

(2)The provisions of paragraph (2) of the preceding Article apply mutatis mutandis in the case of applying the provisions of item (ii) of the preceding paragraph.In this case, the phrase "investment partnership contract subject to special provisions (meaning an investment partnership contract subject to the provisions of Article 41-21, paragraph (1), item (ii) of the Act, which is concluded by a nonresident or foreign corporation who is subject to the provisions of the same paragraph; hereinafter the same applies in this Article and the following Article)" in paragraph (2) of the same Article is deemed to be replaced with "investment partnership contract (meaning an investment partnership contract prescribed in paragraph (1) of the following Article; hereinafter the same applies in this paragraph)"; and the phrase "the investment partnership contract subject to special provisions" in the same paragraph is deemed to be replaced with "the investment partnership contract".

(3)Where a Nonresident Having No Permanent Establishments in Japan has transferred the shares of or capital contributions to a domestic corporation which are partnership property prescribed in article 41-21, paragraph (2), item (iv) of the Act (hereinafter referred to as "Investment Partnership Property" in this paragraph and the following paragraph) pertaining to the investment partnership contract subject to special provisions, etc. concluded by the nonresident and which fall under the following, with regard to the transfer of shares or capital contributions, the provisions of paragraph (1) do not apply:

(4)The determination as to whether or not the shares of or capital contributions to a domestic corporation which are Investment Partnership Property and have been transferred by a Nonresident Having No Permanent Establishments in Japan (hereinafter referred to as the "Transferred Shares, etc." in this paragraph) fall under the category of shares or capital contributions listed in item (i) of the preceding paragraph is to be made as of the day of acquiring the same issue of shares of or capital contributions to a domestic corporation that are deemed to have been transferred in the case where the same issue of shares of (excluding the shares listed in item (ii) of the same paragraph) or contributions to a domestic corporation as the Transferred Shares, etc. that have been acquired as the Investment Partnership Property prior to the date of the transfer are deemed to have been transferred successively, starting from those acquired as the Investment Partnership Property earlier.

(5)The provisions of paragraph (1) apply only where a Nonresident Having No Permanent Establishments in Japan has submitted a document stating to the effect that they seek the application of the provisions of the same paragraph, their name and address (in the case of a Nonresident Having No Permanent Establishments in Japan who has a residence in Japan, their residence), and other particulars specified by Ministry of Finance Order (in the case of seeking the application of the provisions of the same paragraph with regard to an investment partnership contract, limited to the document with a document specified by Ministry of Finance Order as a document certifying that they satisfy the requirements listed in item (i) and item (ii) of the same paragraph pertaining to the investment partnership contract) to the competent district director of the tax office having jurisdiction over the place for tax payment, no later than March 15 of the year following the Year Containing the Date of Transfer.

Article 27(1)With respect to the place for tax payment of income tax to be collected, pursuant to the provisions of Article 42, paragraph (1) of the Act, for the payment of the remuneration paid by a tax-exempt entertainment corporation, etc. prescribed in Article 42, paragraph (1) of the Act (referred to as a "tax-exempt entertainment corporation, etc." in paragraph (3)) to entertainers, etc. for their provision of services, the term "the place prescribed in those items" in Article 55 of the Order for Enforcement of the Income Tax Act is deemed to be replaced with "the place prescribed in those items (with respect to the remuneration paid by a tax-exempt entertainment corporation, etc. prescribed in Article 42, paragraph (1) (Special Provisions for Withholding at Source of Remuneration Paid by Tax-Exempt Entertainment Corporations to Entertainers for Their Provision of Services) of the Act on Special Measures Concerning Taxation (hereinafter referred to as a "Tax-Exempt Entertainment Corporation, etc." in this Article), outside Japan, to entertainers, etc. listed in the items of the same paragraph for their provision of services out of consideration for the provision of the services of entertainers, etc. prescribed in the same paragraph (hereinafter referred to as the "Consideration for the Provision of the Services of Entertainers, etc." in this Article), the location of an office, business office or any other place equivalent thereto located in Japan of a person who pays the Consideration for the Provision of the Services of Entertainers, etc. of the entertainers, etc. to the Tax-Exempt Entertainment Corporation, etc. (where the person falls under the category of a Tax-Exempt Entertainment Corporation, etc., a person who pays the Consideration for the Provision of the Services of Entertainers, etc. to the person) (where there are two or more locations, the principal location))".

(2)With respect to the application of the provisions of Article 264 of the Order for Enforcement of the Income Tax Act where the provisions of Article 42, paragraph (1) of the Act are applied, the term "Article 212, paragraph (1) (Withholding Liability for Income of Nonresidents or Corporations) of the Act" in the same Article is deemed to be replaced with "Article 212, paragraph (1) (Withholding Liability for Income of Nonresidents or Corporations) of the Act or Article 42, paragraph (1) (Special Provisions for Withholding at Source of Remuneration Paid by Tax-Exempt Entertainment Corporations to Entertainers for Their Provision of Services) of the Act on Special Measures Concerning Taxation".

(3)Where a Tax-Exempt Entertainment Corporation, etc. seeks the application of the provisions of Article 179 and Article 213, paragraph (1) of the Income Tax Act in which the terms and phrases were replaced pursuant to the provisions of Article 42, paragraph (3) of the Act with respect to the consideration listed in Article 161, item (ii) of the Income Tax Act, which they receive for the provision of the services of entertainers, etc. prescribed in Article 42, paragraph (1) of the Act, the Tax-Exempt Entertainment Corporation, etc. must, when receiving payment of the consideration, submit a document containing the particulars specified by Ministry of Finance Order, via a person who pays the consideration, to the competent district director having jurisdiction over the place for tax payment of the income tax to be collected and paid for the consideration by the defrayer pursuant to the provisions of Article 212 of the Income Tax Act.

Article 27-2(1)The requirements specified by Cabinet Order prescribed in Article 42-2, paragraph (1) of the Act are as follows (where a specified financial institution, etc. prescribed in the same paragraph (hereinafter referred to as a "Specified Financial Institution, etc." in this Article) is the Bank of Japan, the requirements listed in item (i) and item (iii)):

(2)The interest specified by Cabinet Order prescribed in Article 42-2, paragraph (1) of the Act is the interest to be received by a foreign financial institution, etc. prescribed in the same paragraph on which no income tax is to be imposed pursuant to the provisions of Article 7 of the Act.

(3)The bonds specified by Cabinet Order prescribed in Article 42-2, paragraph (1) of the Act are any of the bonds listed as follows:

(4)Whether or not a foreign corporation listed in Article 42-2, paragraph (4), item (i), (a) of the Act out of foreign financial institutions, etc. (meaning foreign financial institutions, etc. prescribed in the same item; hereinafter the same applies in this Article) falls under the category of a foreign corporation listed in the items of Article 42-2, paragraph (2) of the Act is to be determined according to its status at the end of the business year immediately prior to the business year containing the day on which the foreign financial institution, etc. intends to submit a written application for tax exemption (meaning a written application for tax exemption prescribed in Article 42-2, paragraph (5) of the Act; hereinafter the same applies in this Article) and the day preceding the day on which the foreign financial institution, etc. is to receive payment of specified interest (meaning specified interest prescribed in Article 42-2, paragraph (1) of the Act; hereinafter the same applies in this Article) after submitting the written application for tax exemption.

(5)A foreign financial institution, etc. which seeks the application of the provisions of Article 42-2, paragraph (1) of the Act must, when it intends to receive payment of specified interest from a Specified Financial Institution, etc. for the first time, submit a written application for tax exemption to the district director prescribed in Article 42-2, paragraph (5) of the Act, via an office, business office, or any other establishment equivalent thereto (hereinafter referred to as "Offices, etc." in this paragraph and paragraph (9)) of the Specified Financial Institution, etc. in charge of handling payment of the specified interest (where payment of the specified interest is handled at two or more Offices, etc. held by the Specified Financial Institution, etc., via respective offices at the time when payment is handled for the first time respectively) by the day preceding the day on which the foreign financial institution, etc. is to receive the specified interest.

(6)A foreign financial institution, etc. which seeks the application of the provisions of Article 42-2, paragraph (1) of the Act must, when it has not been entered or recorded separately in the books prescribed in Article 42-2, paragraph (10) of the Act of a Specified Financial Institution, etc. which pays specified interest to the foreign financial institution, etc., submit a written application for tax exemption to the district director prescribed in Article 42-2, paragraph (5) of the Act pursuant to the provisions of the same paragraph.

(7)Where a foreign financial institution, etc. which had previously received the application of the provisions of Article 42-2, paragraph (1) of the Act has become unable to receive the application of those provisions based on the provisions of paragraph (2) of the same Article and subsequently seeks the application of the provisions of Article 42-2, paragraph (1) of the Act again, the foreign financial institution, etc. must submit a written application for tax exemption to the district director prescribed in Article 42-2, paragraph (5) of the Act, by the day preceding the day on which it is to receive the specified interest, in respect of which it seeks the application of the provisions of the same paragraph.

(8)The documents specified by Cabinet Order prescribed in Article 42-2, paragraph (7) of the Act are any of the foreign corporation's certificate of registered particulars of the corporation, receipt for national tax or local tax, certificate of tax payment or any other document specified by Ministry of Finance Order.

(9)A Specified Financial Institution, etc. must, when it has received a written application for tax exemption or a written application prescribed in Article 42-2, paragraph (8) of the Act at its Offices, etc., submit the written applications to the district director prescribed in Article 42-2, paragraph (5) of the Act, by the final day of the month following the month involving the date of the receipt, and create copies of the written applications (including those equivalent thereto) and preserve them pursuant to the provisions of Ministry of Finance Order.

(10)In the case referred to in Article 42-2, paragraph (8) of the Act, when a written application prescribed in the same paragraph has been submitted to the district director prescribed in the same paragraph, it is deemed that the submission has been made at the time when the person who pays specified interest set forth in the same paragraph received the written application.

(11)A Specified Financial Institution, etc. must, when the contract for a bond transaction with a repurchase/resale agreement prescribed in Article 42-2, paragraph (1) of the Act has been concluded with a foreign financial institution, etc. which had submitted a written application for tax exemption, or when a written application prescribed in paragraph (8) of the same Article has been submitted by a person who had submitted the written application for tax exemption, enter or record the particulars prescribed in paragraph (10) of the same Article in the books for each person each time, and preserve those books pursuant to the provisions of Ministry of Finance Order.

Article 39-12(1)The special relationship specified by Cabinet Order as prescribed in Article 66-4, paragraph (1) of the Act is the following:

(2)In the case referred to in item (i) of the preceding paragraph, the determination as to whether one of two corporations holds directly or indirectly shares or capital contributions that account for 50 percent or more of the Issued Shares, etc. of the other corporation is to be made according to the ratio obtained by adding the ownership ratio for the shares, etc. of the relevant other corporation held directly by the relevant one of the two corporations (meaning the ratio of the number of the amount of the relevant other corporation's shares or capital contributions held by the relevant one of the two corporations out of the total Issued Shares, etc. of the relevant other corporation) and the ownership ratio for the shares, etc. of the relevant other corporation held indirectly by the relevant one of the two corporations.

(3)The ownership ratio for the shares, etc. held indirectly as prescribed in the preceding paragraph means a ratio specified in the following items for the category of cases listed in the respective items (in the case where the ratio falls under both of the following items, the sum of the ratios specified as follows):

(4)The provisions of paragraph (2) apply mutatis mutandis to the determination of the relationship whereby the shares, etc. are held directly or indirectly as set forth in paragraph (1), items (ii), (iv) and (v).

(5)The transaction specified by Cabinet Order as prescribed in Article 66-4, paragraph (1) of the Act is a transaction pertaining to the domestic source income listed in Article 141, items (i) through (iii) of the Corporation Tax Act (excluding income for which corporation tax is reduced or exempted pursuant to the provisions of the tax convention prescribed in Article 1-3, paragraph (1), item (ii)) of a foreign affiliated person prescribed in Article 66-4, paragraph (1) of the Act, in accordance with the category of foreign corporation listed in those items which is applicable to the foreign affiliated person:

(6)The normal profit margin specified by Cabinet Order as prescribed in Article 66-4, paragraph (2), item (i), (b) of the Act is the ratio of the amount of gross profits gained by a person (hereinafter referred to as a "Reseller" in this paragraph and paragraph (8), item (ii)) who purchased the same or similar inventory assets as those for a foreign affiliated transaction prescribed in paragraph (1) of the same Article (hereinafter referred to as a "Foreign Affiliated Transaction" in this Article) from a person (hereinafter referred to as a "Non-Affiliated Person" through to paragraph (8)) who is not in a special relationship (meaning a special relationship prescribed in Article 66-4, paragraph (1) of the Act) through a transaction to sell the same or similar inventory assets to a Non-Affiliated Person (hereinafter referred to as a "Comparable Transaction" in this paragraph) (the amount of gross profits means the amount obtained by deducting the sum of the costs of the inventory assets for the Comparable Transaction from the total revenue arising from the sale of the inventory assets for the Comparable Transaction), against the sum of the revenue; provided, however, that in the case where functions performed by the selling side or any other particulars differ between a Comparable Transaction and a transaction in which the purchasing side of the inventory assets for the Foreign Affiliated Transaction sold the inventory assets to a Non-Affiliated Person, the normal profit margin is the ratio after making a necessary adjustment for the differences in ratios caused by the disparity.

(7)The normal profit margin specified by Cabinet Order as prescribed in Article 66-4, paragraph (2), item (i), (c) of the Act is the ratio of the amount of gross profits gained by a person who acquired the same or similar inventory assets as those for a Foreign Affiliated Transaction through the purchase (limited to a purchase from a Non-Affiliated Person), manufacture, or any other acts (hereinafter that person is referred to as a "seller" in this paragraph and item (iii) of the following paragraph), through a transaction to sell the same or similar inventory assets to a Non-Affiliated Person (hereinafter referred to as a "Comparable Transaction" in this paragraph) (the amount of gross profits means the amount obtained by deducting the sum of the costs of the inventory assets for the Comparable Transaction from the total revenue arising from the sale of the inventory assets for the Comparable Transaction), against the sum of the costs; provided, however, that in the case where functions performed by the selling side and other particulars differ between a Comparable Transaction and the Foreign Affiliated Transaction, the normal profit margin is the ratio after making a necessary adjustment, necessary for the differences in ratios caused by the disparity.

(8)The method specified by Cabinet Order as prescribed in Article 66-4, paragraph (2), item (i), (d) of the Act is the method listed as follows:

(9)The case specified by Cabinet Order as prescribed in Article 66-4, paragraph (6) of the Act is the case where it has been determined in advance at the time of a transaction between a corporation set forth in the same paragraph and a non-affiliated person set forth in the same paragraph (hereinafter referred to as a "Non-Affiliated Person" in this paragraph and the following paragraph), under a contract or the like, that the assets for the transaction are to be sold, transferred, lent or provided to a foreign affiliated person related to the corporation set forth in paragraph (6) of the same Article and where the amount of consideration for the sale, transfer, lending or provision is deemed to have been substantially determined between the corporation and the foreign affiliated person, and the case where it has been determined in advance at the time of a transaction between a foreign affiliated person related to the corporation set forth in the same paragraph and a Non-Affiliated Person, under a contract or the like, that the assets for the transaction are to be sold, transferred, lent or provided to a corporation set forth in the same paragraph and where the amount of consideration for the sale, transfer, lending or provision is deemed to have been substantially determined between the corporation and the foreign affiliated person.

(10)Notwithstanding the provisions of Article 66-4, paragraph (2) of the Act, the arm's length price prescribed in paragraph (1) of the same Article for a transaction that was deemed to be a Foreign Affiliated Transaction under the provisions of paragraph (6) of the same Article is the amount calculated by applying the provisions of paragraph (2) of the same Article by deeming that the transaction has been conducted between a corporation set forth in the preceding paragraph and a foreign affiliated person related to the corporation set forth in the same paragraph and by making a necessary adjustment with regard to the differences in the amount of consideration caused when a transaction between the corporation and the foreign affiliated person is conducted via a Non-Affiliated Person.

(11)The gross profit margin prescribed in Article 66-4, paragraph (7), item (i) of the Act or any other ratio specified by Cabinet Order as a ratio equivalent thereto is the ratio of the amount of gross profits gained by a corporation which is engaged in the same type of business and whose size and other details are similar as prescribed in the same item through the business for a business year containing the day on which a Foreign Affiliated Transaction set forth in the same item was conducted or for any other period equivalent thereto (the amount of gross profits mean the amount obtained by deducting the sum of the costs of inventory assets for the relevant business year or any other period equivalent thereto (where the business is other than that pertaining to the sale of inventory assets, the sum of equivalent costs or expenses; hereinafter referred to as the "Amount of Gross Costs" in this paragraph) from the total revenue arising from the sale of the inventory assets (where the business is other than that pertaining to the sale of inventory assets, the total revenue pertaining to that business; hereinafter referred to as the "Amount of Gross Revenue" in this paragraph)) against the Amount of Gross Revenue or Gross Costs.

(12)The method specified by Cabinet Order as the method similar to the method specified by Cabinet Order as prescribed in Article 66-4, paragraph (2), item (i), (d) of the Act or the method listed in paragraph (2), item (ii), (b) of the same Article (limited to the method equal to that specified by the same Cabinet Order) as prescribed in paragraph (7), item (ii) of the same Article is the method listed in items (i) to (iv), in the case where a Foreign Affiliated Transaction is for the sale or purchase of inventory assets, and the method listed in item (i) or item (v), in the case where a Foreign Affiliated Transaction is for other than the sale or purchase of inventory assets:

(13)The requirements specified by Cabinet Order as prescribed in Article 66-4, paragraph (19) of the Act are the requirements listed as follows:

(14)The delinquent tax imposed with regard to the corporation tax payable as prescribed in Article 66-4, paragraph (19) of the Act is the delinquent tax to be imposed on the amount obtained by deducting the amount equivalent to the corporation tax payable where the provisions of paragraph (1) of the same Article do not apply from the corporation tax payable where the provisions of the same paragraph apply.

(15)Where the provisions of Article 66-4, paragraph (1), paragraph (2), item (i), (a) or (b), or paragraph (6) of the Act or the provisions of paragraph (6) apply, the existence or not of any special relationship prescribed in these provisions is to be determined according to its status at the time when the respective transactions were conducted.

Article 39-12-2(1)The amount calculated as specified by Cabinet Order as the amount of corporation tax and additional tax for the corporation tax prescribed in Article 66-4-2, paragraph (1) of the Act is the sum of the amounts listed as follows:

(2)The case where there is no agreement prescribed in Article 66-4-2, paragraph (1) of the Act or any other case specified by Cabinet Order is the case listed respectively in the following items, and the date specified by Cabinet Order prescribed in the same paragraph is the date on which the Commissioner of the National Tax Agency notified the fact that the case falls under any of those set forth in the relevant items:

(3)A person intending to receive a grace of tax payment under the provisions of Article 66-4-2, paragraph (1) of the Act must submit a written application containing the particulars listed as follows along with a document certifying that they have filed an objection set forth in the same paragraph and other documents specified by Ministry of Finance Order to the district director, etc. prescribed in Article 46, paragraph (1) of the Act on General Rules for National Taxes:

(4)With respect to the application of the provisions of Article 23, paragraph (1) of the Order for Enforcement of the Act on General Rules for National Taxes (Cabinet Order No. 135 of 1962), regarding the corporation tax for which a grace of tax payment has been received pursuant to the provisions of Article 66-4-2, paragraph (1) of the Act, the term "or national tax" in Article 23, paragraph (1) of the same Order is deemed to be replaced with "(including a grace of tax payment under the provisions of Article 66-4-2, paragraph (1) (Grace of Tax Payment under the Special Provisions for Taxation on Transactions with Foreign Affiliated Persons) of the Act on Special Measures Concerning Taxation) or national tax".

Article 39-13(1)The amount calculated as specified by Cabinet Order as the amount equivalent to the excess part prescribed in Article 66-5, paragraph (1) of the Act is the amount specified respectively in the following items for the category of cases listed in the relevant items:

(2)With respect to the application of the provisions of the preceding paragraph where the amount that remains after deducting the amount obtained by multiplying the amount of equity capital (meaning the amount of equity capital prescribed in Article 66-5, paragraph (4), item (vii) of the Act; hereinafter the same applies in this Article) for the relevant business year of the domestic corporation by three from the average balance of liabilities regarding the total liabilities prescribed in Article 66-5, paragraph (1) of the Act for the relevant business year of the domestic corporation is less than the amount exceeding the average balance of liabilities for the relevant business year of the domestic corporation, in item (i) of the preceding paragraph, the term "the amount that remains after deducting the amount listed in (b) from the amount listed in (a) is equivalent to or less than the amount listed in (c)" is deemed to be replaced with "the amount that remains after deducting the amount obtained by multiplying the amount of equity capital prescribed in Article 66-5, paragraph (4), item (vii) of the Act for the relevant business year of the domestic corporation by three from the average balance of liabilities regarding the total liabilities prescribed in Article 66-5, paragraph (1) of the Act for the relevant business year of the domestic corporation (hereinafter the remaining amount is referred to as "the amount exceeding the average balance of the total liabilities" in this paragraph) is equivalent to or less than the amount listed in (c)"; the term "Article 66-5, paragraph (4), item (i) of the Act" is deemed to be replaced with "paragraph (4), item (i) of the same Article"; and the term "amount that remains after deducting the amount listed in (c) from the amount listed in (a) (the remaining amount is referred to as the "amount exceeding the average balance of liabilities" in the following item and the following paragraph)" is deemed to be replaced with "the amount exceeding the average balance of the total liabilities"; and in item (ii) of the same paragraph, the term "the amount that remains after deducting the amount listed in (b) from the amount listed in (a) of the preceding item exceeds the amount listed in (c)" is deemed to be replaced with "the amount exceeding the average balance of the total liabilities exceeds the amount listed in (c)"; and the term "the amount exceeding the average balance of liabilities" is deemed to be replaced with "the amount exceeding the average balance of the total liabilities".

(3)Where the provisions of Article 66-5, paragraph (1) of the Act apply, the amount of interest on liabilities, etc. to be paid to the foreign controlling shareholder, etc. and fund provider, etc. for the relevant business year is to be based on the amount posted as an expense for the relevant business year.

(4)With respect to the application of the provisions of Article 66-5, paragraph (1) of the Act where there are two or more foreign controlling shareholders, etc. related to the domestic corporation, the average balance of liabilities regarding the liabilities owed to foreign controlling shareholders, etc. and fund providers, etc., equity interest held by foreign controlling shareholders, etc. and the amount of interest on liabilities, etc. to be paid to foreign controlling shareholders, etc. and fund providers, etc. are to be based on the sum of the average balance of liabilities regarding the liabilities owed to foreign controlling shareholders, etc. and fund providers, etc., equity interest held by foreign controlling shareholders, etc. and the amount of interest on liabilities, etc. to be paid to foreign controlling shareholders, etc. and fund providers, etc., respectively.

(5)The average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. which is calculated as specified by Cabinet Order and is to be deducted from the average balance of liabilities regarding the liabilities owed to a foreign controlling shareholder, etc. and a fund provider, etc. prescribed in Article 66-5, paragraph (2) of the Act is the average balance of liabilities regarding the liabilities owed to a foreign controlling shareholder, etc. and a fund provider, etc. related to the domestic corporation which pertain to a specified bond transaction with a repurchase/resale agreement, etc. (meaning a specified bond transaction with a repurchase/resale agreement, etc. prescribed in Article 66-5, paragraph (4), item (viii) of the Act; the same applies in the following paragraph and paragraph (8)) (where the average balance of liabilities exceeds the average balance of assets regarding assets pertaining to a specified bond transaction with a repurchase/resale agreement, etc. (the average balance of assets means the amount calculated by a reasonable method as the average balance of the assets' book value for the relevant business year; the same applies in the following paragraph), that calculated average balance of liabilities is the average balance of assets; that average balance of assets is referred to as the "average balance of liabilities after adjustment" in paragraph (8)).

(6)The average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. which is calculated as specified by Cabinet Order and is to be deducted from the average balance of liabilities regarding the total liabilities for the relevant business year prescribed in Article 66-5, paragraph (2) of the Act is the average balance of liabilities regarding the total liabilities for the relevant business year (limited to those which are to be the cause of payment of interest on liabilities, etc.; the same applies in paragraph (10)) which pertain to a specified bond transaction with a repurchase/resale agreement, etc. (where the average balance of liabilities exceeds the average balance of assets regarding assets pertaining to a specified bond transaction with a repurchase/resale agreement, etc., that calculated average balance of liabilities is the average balance of assets).

(7)The multiple number applicable to the equity interest held by a foreign controlling shareholder, etc. which is calculated as specified by Cabinet Order prescribed in Article 66-5, paragraph (2) of the Act is the multiple number obtained by calculating the average balance of liabilities by deducting the average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. calculated as specified by Cabinet Order prescribed in the same paragraph from the average balance of liabilities regarding the liabilities owed to a foreign controlling shareholder, etc. and a fund provider, etc. prescribed in the same paragraph and then dividing the calculated average balance of liabilities by the equity interest held by the foreign controlling shareholder, etc. related to the domestic corporation; and the multiple number applicable to the amount of equity capital which is calculated as specified by Cabinet Order prescribed in the same paragraph is the multiple number obtained by calculating the average balance of liabilities by deducting the average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. calculated as specified by Cabinet Order prescribed in the same paragraph from the average balance of liabilities regarding the total liabilities for the relevant business year prescribed in the same paragraph and then dividing the calculated average balance of liabilities by the amount of equity capital of the domestic corporation.

(8)The amount of interest on liabilities, etc. pertaining to a specified bond transaction with a repurchase/resale agreement, etc. which is calculated as specified by Cabinet Order and is to be deducted from the amount of interest on liabilities, etc. to be paid to a foreign controlling shareholder, etc. and a fund provider, etc. prescribed in Article 66-5, paragraph (2) of the Act is the amount obtained by multiplying the amount of interest on liabilities, etc. to be paid to a foreign controlling shareholder, etc. and a fund provider, etc. related to the domestic corporation which pertain to a specified bond transaction with a repurchase/resale agreement, etc. by the ratio obtained by dividing the average balance of liabilities after adjustment by the average balance of liabilities regarding liabilities pertaining to the specified bond transaction with a repurchase/resale agreement, etc.

(9)With respect to the application of the provisions of paragraphs (1) to (4) in the case where the provisions of Article 66-5, paragraph (2) of the Act is applied, the term "and then multiplying the amount of expenses by the ratio" in paragraph (1), item (i) is deemed to be replaced with ", then deducting the amount obtained by multiplying the part of the amount of expenses that pertains to a specified bond transaction with a repurchase/resale agreement, etc. (meaning a specified bond transaction with a repurchase/resale agreement, etc. prescribed in Article 66-5, paragraph (4), item (viii) of the Act; hereinafter the same applies in this item) by the ratio obtained by dividing the average balance of liabilities after adjustment (meaning the average balance of liabilities after adjustment prescribed in paragraph (5); hereinafter the same applies in this item) regarding the liabilities for the amount by the average balance of liabilities (meaning the average balance of liabilities prescribed in paragraph (4), item (v) of the same Article; hereinafter the same applies in this Article) regarding the liabilities for the amount which pertains to a specified bond transaction with a repurchase/resale agreement, etc., and then multiplying the amount that remains after deduction by the ratio"; the term "The average balance of liabilities (meaning the average balance of liabilities prescribed in Article 66-5, paragraph (4), item (v) of the Act; hereinafter the same applies in this Article)" in (a) of paragraph (1), item (i) is deemed to be replaced with "The amount that remains after deducting the average balance of liabilities after adjustment from the average balance of liabilities"; the term "The average balance of liabilities" in (b) of the same item is deemed to be replaced with "The amount that remains after deducting the average balance of liabilities after adjustment regarding the liabilities from the average balance of liabilities"; the term "three" in (c) of the same item is deemed to be replaced with "two"; the term "The amount obtained by deducting the amount of guarantee charge, etc. for the taxable income" in (a) of paragraph (1), item (ii) is deemed to be replaced with "The amount obtained by deducting the sum of the amount of interest on liabilities, etc. pertaining to a specified bond transaction with a repurchase/resale agreement, etc. prescribed in paragraph (2) of the same Article and the amount of guarantee charge, etc. for the taxable income"; the term "where the amount that remains after deducting the amount" in paragraph (2) is deemed to be replaced with "where the amount that remains after deducting the sum of the average balance of liabilities regarding the average balance of liabilities which pertain to a specified bond transaction with a repurchase/resale agreement, etc. prescribed in paragraph (6) and the amount"; and the term "by three" in the same paragraph is deemed to be replaced with "by two".

(10)The percentage specified by Cabinet Order prescribed in Article 66-5, paragraph (3) of the Act is the percentage of the amount of the total liabilities of any other domestic corporation whose business size set forth in paragraph (3) of the same Article and other details are similar to those of a domestic corporation which seeks the application of the provisions of the same paragraph (hereinafter referred to as an "Applicable Corporation" in this paragraph) on the final day of any of the relevant other domestic corporation's relevant business years or consolidated business years that ended within three years until the final day of the Applicable Corporation's relevant business year (where the Applicable Corporation receives the application of the provisions of paragraph (2) of the same Article, the percentage of the remaining amount of the total liabilities after deducting the amount specified by Ministry of Finance Order) against the sum of the amounts of stated capital, statutory reserve, and surplus on the same day.In this case, where there are any fractions after two decimal places, they are to be rounded up.

(11)The special relationship specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (i) of the Act is a relationship listed as follows:

(12)The provisions of paragraph (2) and paragraph (3) of Article 39-12 apply mutatis mutandis to the determination as to whether or not 50 percent or more of the Issued Shares, etc. set forth in item (i) and item (ii) of the preceding paragraph are held directly or indirectly.

(13)A person who provides a domestic corporation with funds and a person specified by Cabinet Order as being related to the provision of funds as prescribed in Article 66-5, paragraph (4), item (ii) of the Act is any of the following:

(14)What is specified by Cabinet Order as being equivalent to interest on liabilities prescribed in Article 66-5, paragraph (4), item (iii) of the Act is the discount on bills, the amount of the shortage prescribed in Article 136-2, paragraph (1) of the Order for Enforcement of the Corporation Tax Act and any other moneys whose economic characteristics are equivalent to those of interest.

(15)The expenses specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (iii) of the Act are the expenses listed as follows:

(16)Any other expenses specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (iii) of the Act are interest on liabilities, etc. to be paid to a public corporation prescribed in Article 2, item (v) of the Corporation Tax Act or a corporation in the public interest, etc. prescribed in item (vi) of the same Article.

(17)The liabilities specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (iv) of the Act are the liabilities set forth in the items of paragraph (13) in the cases prescribed in the relevant items.

(18)The amount calculated as specified by Cabinet Order as the average amount of liabilities prescribed in Article 66-5, paragraph (4), item (v) of the Act is the amount calculated by a reasonable method as the average balance of the book value of the liabilities for the relevant business year.

(19)The amount calculated as specified by Cabinet Order as the interest on a domestic corporation's net assets held by a foreign controlling shareholder, etc. as prescribed in Article 66-5, paragraph (4), item (vi) of the Act is the amount obtained by multiplying the amount of equity capital for the relevant business year of the domestic corporation by the ratio of the Shares, etc. regarding the domestic corporation held directly or indirectly by a foreign controlling shareholder, etc. on the final day of the relevant business year out of the domestic corporation's Issued Shares, etc.

(20)The Shares, etc. held directly or indirectly as prescribed in the preceding paragraph are the total number or the sum of the domestic corporation's Shares, etc. held directly by a foreign controlling shareholder, etc. related to the domestic corporation and the domestic corporation's Shares, etc. held indirectly by the foreign controlling shareholder, etc. (meaning the Shares, etc. calculated by multiplying the domestic corporation's Issued Shares, etc. by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)):

(21)Where the domestic corporation and a foreign controlling shareholder, etc. related to the domestic corporation are in a relationship listed in paragraph (11), item (ii), when the same person prescribed in the same item is a resident or any other domestic corporation prescribed in Article 2, paragraph (1), item (i)-2 of the Act, the provisions of the preceding two paragraphs are to be applied by deeming the same person to be a foreign controlling shareholder, etc. related to the domestic corporation.

(22)The amount calculated as specified by Cabinet Order as the amount of net assets prescribed in Article 66-5, paragraph (4), item (vii) of the Act is the amount that remains after deducting the amount listed in item (ii) from the amount listed in item (i) (where the remaining amount is less than the amount of stated capital, etc. prescribed in Article 2, item (xvi) of the Corporation Tax Act on the final day of the relevant business year of the domestic corporation (where the amount of stated capital, etc. is less than the amount of stated capital or capital contributions, the amount of stated capital or capital contributions; hereinafter referred to as the "Amount of Stated Capital, etc." in this paragraph and paragraph (24)), that calculated amount is the Amount of Stated Capital, etc.):

(23)The book value set forth in paragraph (5) and paragraph (18) and the preceding paragraph is to be based on the amount of assets or liabilities that the domestic corporation entered in its accounting books.

(24)Where any other domestic corporation which is a shareholder, etc. of the domestic corporation or a capital contribution-related domestic corporation (meaning a single domestic corporation or two or more domestic corporations which have a linkage with the domestic corporation and the relevant other domestic corporation through holding the Shares, etc.; the same applies in the following paragraph) intervenes between the domestic corporation and a foreign controlling shareholder, etc. related to the domestic corporation, when the amount obtained by multiplying the Amount of Stated Capital, etc. on the final day of the relevant business year of the domestic corporation by the ratio of shareholding pertaining to the domestic corporation of the relevant other domestic corporation or capital contribution-related domestic corporation exceeds the Amount of Stated Capital, etc. of the relevant other domestic corporation or capital contribution-related domestic corporation on the same day (for a corporation falling under the category of a corporation subject to corporation tax on consolidated income prescribed in Article 2, item (xvi) of the Corporation Tax Act, when the amount exceeds the amount of consolidated individual stated capital, etc. prescribed in Article 39-113, paragraph (20)), the amount of equity capital pertaining to the domestic corporation is the amount that remains after deducting from the amount of equity capital, either of the smaller amount of the excess amount or the amount of liabilities owed by the relevant other domestic corporation or capital contribution-related domestic corporation to a foreign controlling shareholder, etc. and a fund provider, etc. related to the domestic corporation on the same day (referred to as the " deductible amount" in the following paragraph).

(25)In the case prescribed in the preceding paragraph, when deeming a capital contribution-related domestic corporation set forth in the same paragraph to be the domestic corporation set forth in the same paragraph and if there is any deductible amount pertaining to the capital contribution-related domestic corporation, the amount of stated capital, etc. set forth in the same paragraph of the capital contribution-related domestic corporation is the amount that remains after deducting the deductible amount from the amount of stated capital, etc.; and the amount of liabilities owed by the capital contribution-related domestic corporation to a foreign controlling shareholder, etc. and a fund provider, etc. set forth in the same paragraph is the amount obtained by adding the amount of liabilities owed to the foreign controlling shareholder, etc. and fund provider, etc. and the deductible amount.

(26)The amount calculated as specified by Cabinet Order as the interest on a domestic corporation's net assets prescribed in Article 66-5, paragraph (4), item (vi) of the Act and the amount calculated as specified by Cabinet Order as the amount of net assets prescribed in item (vii) of the same paragraph, where the domestic corporation is a corporation in the public interest, etc. prescribed in Article 2, item (vi) of the Corporation Tax Act or an association or foundation without juridical personality, is, notwithstanding the provisions of paragraph (19) to the preceding paragraph, the amount obtained by multiplying the amount of equity capital for the relevant business year of the domestic corporation by the ratio of the value of assets for the profit-making business prescribed in Article 2, item (xiii) of the Corporation Tax Act conducted by that domestic corporation out of the value of the total assets on the final day of the relevant business year.

(27)The transaction specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (viii) of the Act is the relevant cash-secured bond lending transaction or bond transaction with a repurchase/resale agreement, where any of the bonds listed as follows are lent in a cash-secured bond lending transaction or transferred in a bond transaction with a repurchase/resale agreement:

(28)The domestic source income specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (ix) of the Act for a nonresident is the domestic source income of a nonresident set forth in the same item as specified in Article 164, paragraph (1), items (i) to (iii) of the Income Tax Act, in accordance with the category of the nonresident listed in those items (excluding the income for which income tax is reduced or exempted pursuant to the provisions of a tax convention (meaning a tax convention prescribed in Article 1-3, paragraph (1), item (ii); hereinafter the same applies in this paragraph)); and the domestic source income specified by Cabinet Order prescribed in Article 66-5, paragraph (4), item (ix) of the Act for a foreign corporation is the domestic source income of a foreign corporation set forth in Article 66-5, paragraph (4), item (ix) of the Act as specified in Article 164, paragraph (1), items (i) to (iii) of the Corporation Tax Act, in accordance with the category of the foreign corporation listed in those items (excluding the income for which corporation tax is reduced or exempted pursuant to the provisions of a tax convention).

(29)The provisions of paragraph (1), paragraphs (3) to (18), paragraph (22), paragraph (23), paragraph (27) and the preceding paragraph apply mutatis mutandis to the case of applying the provisions of paragraphs (1) to (4) and paragraphs (6) to (9) of Article 66-5 of the Act which are applied mutatis mutandis pursuant to paragraph (10) of the same Article.In this case, the terms listed in the middle column of the following table which are used in the provisions listed in the left-hand column of the same table are deemed to be replaced with the terms listed in the right-hand column of the same table.

(30)With respect to the application of the provisions of Article 22 of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 66-5, paragraph (1) of the Act apply, the term "the sum of the amount of interest on liabilities prescribed in the same paragraph to be paid for the relevant business year" in Article 22, paragraph (1) of the same Order is deemed to be replaced with "the sum of the amount of interest on liabilities prescribed in the same paragraph to be paid for the relevant business year (where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 66-5, paragraph (1) (Special Provisions for Taxation on Interest on Liabilities Payable to Foreign Controlling Shareholders) of the Act on Special Measures Concerning Taxation, the sum is the amount that remains after deducting the amount)"; the term "the sum of the amount of interest on liabilities that a domestic corporation set forth in the same paragraph pays for the business year set forth in the same paragraph" in paragraph (2) of the same Article is deemed to be replaced with "the sum of the amount of interest on liabilities that a domestic corporation set forth in the same paragraph pays for the business year set forth in the same paragraph (where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 66-5, paragraph (1) (Special Provisions for Taxation on Interest on Liabilities Payable to Foreign Controlling Shareholders) of the Act on Special Measures Concerning Taxation, the sum is the amount that remains after deducting the amount)"; the term "the amount listed in item (i)" in paragraph (1) and paragraph (2) of the same Article is deemed to be replaced with "the amount listed in item (i) (where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 66-5, paragraph (1) of the Act on Special Measures Concerning Taxation, that amount is the amount that remains after deducting the amount equivalent to the amount exceeding the average balance of liabilities prescribed in Article 39-13, paragraph (1), item (i) (Calculation of the Amount of Interest on Liabilities Payable to Foreign Controlling Shareholders to Be Excluded from Deductible Expenses) of the Order for Enforcement of the Act on Special Measures Concerning Taxation (Cabinet Order No. 43 of 1957) (including the cases where it is applied following the deemed replacement of terms pursuant to the provisions of paragraph (9) of the same Article) (in the case where the provisions of paragraph (1) of the same Article is applied following the deemed replacement of terms pursuant to the provisions of paragraph (2) of the same Article, after deducting the amount equivalent to the amount exceeding the average balance of the total liabilities prescribed in the same item which is applied following the deemed replacement of terms pursuant to the provisions of paragraph (2) of the same Article))"; the term "(hereinafter referred to as the 'sum of" in paragraph (3) of the same Article is deemed to be replaced with "(where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 66-5, paragraph (1) of the Act on Special Measures Concerning Taxation, the amount that remains after deducting the amount; hereinafter referred to as the 'sum of"; and the term "paragraph (4), item (i) of the same Article" in the same paragraph is deemed to be replaced with "Article 23, paragraph (4), item (i) of the Act".

Article 39-14(1)The affiliated foreign company specified by Cabinet Order prescribed in Article 66-6, paragraph (1) of the Act is any of the following:

(2)Whether or not an affiliated foreign company falls under the category of an affiliated foreign company set forth in item (ii) of the preceding paragraph is to be determined as specified as follows:

(3)A nonresident who has a special relationship specified by Cabinet Order with a resident or domestic corporation prescribed in Article 66-6, paragraph (2), item (i) of the Act is a nonresident prescribed in Article 2, paragraph (1), item (i)-2 of the Act listed as follows:

Article 39-15(1)The amount of eligible income calculated in accordance with the standards specified by Cabinet Order prescribed in Article 66-6, paragraph (2), item (ii) of the Act is the amount that remains after deducting the amounts listed in item (iii) and item (iv) pertaining to the amount of income of a specified foreign subsidiary company, etc. prescribed in paragraph (1) of the same Article (hereinafter referred to as a "Specified Foreign Subsidiary Company, etc." in this Article and paragraph (1) of the following Article) in its settlement of accounts for the relevant business year from the sum of the amounts listed in item (i) and item (ii) pertaining to the income (where the amount listed in item (i) pertaining to the income is a loss, the amount of eligible income is the amount that remains after deducting the sum of the amount of loss and the amounts listed in item (iii) and item (iv) pertaining to the amount of income from the amount listed in item (ii) pertaining to the amount of income):

(2)Notwithstanding the provisions of the preceding paragraph, a domestic corporation listed in the items of Article 66-6, paragraph (1) of the Act may deem that the amount obtained by adding the amount of income calculated, with regard to the amount of income of a Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year, pursuant to the provisions of the laws and regulations concerning corporate income taxes of the state of the head office of the Specified Foreign Subsidiary Company, etc. (where there are two or more laws and regulations concerning the corporate income taxes, pursuant to the provisions of the principal ones; hereinafter referred to as the "Laws and Regulations of the State of the Head Office" in this paragraph), (where the provisions of Article 66-4, paragraph (1) or Article 68-88, paragraph (1) of the Act is applied to a transaction between the Specified Foreign Subsidiary Company, etc. and the domestic corporation, the amount of income calculated pursuant to the provisions of the Laws and Regulations of the State of the Head Office by deeming that the transaction was carried out at the arm's length price prescribed in these provisions), and the sum of the amount listed in items (i) to (xiii) pertaining to the calculated amount of income and then deducting therefrom the amount listed in item (xiii) and item (xiv) pertaining to the calculated amount of income (where the amount calculated pursuant to the provisions of the Laws and Regulations of the State of the Head Office proves to be a loss, that calculated amount is the amount that remains after deducting the sum of the amount of loss and the amount listed in items (xiv) to (xvi) pertaining to the calculated amount from the sum of the amounts listed in items (i) to (xiii) pertaining to the calculated amount) may be the amount calculated in accordance with the standards specified by Cabinet Order prescribed in Article 66-6, paragraph (2), item (ii) of the Act:

(3)Where there is any amount of deductible dividend, etc. (meaning the amount equivalent to the amount specified respectively in the following items for the category of cases listed in the relevant items; hereinafter the same applies in this paragraph) for the relevant business year of a Specified Foreign Subsidiary Company, etc. related to a domestic corporation listed in the items of Article 66-6, paragraph (1) of the Act, the amount calculated in accordance with the standards specified by Cabinet Order prescribed in Article 66-6, paragraph (2), item (ii) of the Act is the amount that remains after deducting the amount of deductible dividend, etc. from the amount calculated pursuant to these provisions, notwithstanding the provisions of paragraph (1) or the preceding paragraph:

(4)In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

(5)The amount obtained as a result of an adjustment for the amount of loss and base income prescribed in Article 66-6, paragraph (2), item (ii) of the Act is the amount that remains after deducting, from the base income amount, prescribed in the same item, of a Specified Foreign Subsidiary Company, etc. for the relevant business year (referred to as the "base income amount" in paragraph (7) and paragraph (8)), the sum of the amounts listed as follows (where the provisions of paragraph (3) of the same Article are applied, the amount obtained by adding the amount that accounts for ten percent of the amount of expenses specified by Cabinet Order prescribed in Article 66-6, paragraph (2), item (ii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article):

(6)A loss prescribed in item (i) of the preceding paragraph is a loss calculated where the provisions of paragraph (1), paragraph (2) or paragraph (3) are applied to the amount of income of a Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year.

(7)When making a calculation set forth in paragraph (1), item (i), if there is any amount to be included in deductible expenses in the relevant business year, pursuant to the provisions of Article 33 and Articles 42 to 53 of the Corporation Tax Act, and the provisions of Article 43, Article 45-2, Article 52-2, Article 57-5, Article 57-6, Article 57-8, Articles 65-7 to 65-9 (limited to the part pertaining to item (xix) of the table in Article 65-7, paragraph (1) of the Act), Article 67-12, paragraph (2) and Article 67-13, paragraph (2) of the Act, whose provisions are to be applicable under the provisions of the same item, the amount is included in deductible expenses for calculating the base income amount for the relevant business year, only when detailed statements concerning the inclusion of the amount in deductible expenses are attached to a final return form set forth in Article 66-6, paragraph (5) of the Act (referred to as a "final return form" in the following paragraph) for the relevant business year; provided, however, that this does not apply when the district director of the tax office finds that there was any unavoidable reason for the failure to attach detailed statements and the detailed statements have been submitted.

(8)When calculating the base income amount pursuant to the provisions of paragraph (1) (limited to the part concerning item (iv)) or paragraph (2) (limited to the part concerning item (xvii)), if there is any amount to be deducted for the relevant business year pursuant to these provisions, the amount is deducted in the calculation of the base income amount of the business year only where a detailed statement concerning the calculation of the amount is attached to the final return form pertaining to the business year; provided, however, that this does not apply when the district director of the tax office finds any unavoidable reason for the failure to attach the detailed statement, and the detailed statement is submitted.

(9)Where a domestic corporation, which was subject to the provisions of paragraph (1) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year, seeks the application of paragraph (2) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year in business years following the one to which the provisions of paragraph (1) have been applied; or where a domestic corporation, which was subject to the provisions of paragraph (2) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year, seeks the application of paragraph (1) for calculating the amount of income of the Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year in business years following the one to which the provisions of paragraph (2) have been applied, it must receive approval from the competent district director having jurisdiction over its place for tax payment, in advance.

Article 39-16(1)The amount calculated as specified by Cabinet Order prescribed in Article 66-6, paragraph (1) of the Act is the amount obtained by multiplying the amount of eligible income prescribed in the same paragraph for the relevant business year of a specified foreign subsidiary company, etc. pertaining to a domestic corporation listed in the items of the same paragraph by the ratio of the shares, etc. for considering the claims held by the domestic corporation out of the total Issued Shares, etc. of the specified foreign subsidiary company, etc. at the end of the relevant business year of the specified foreign subsidiary company, etc.

(2)In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

(3)The number of the shares or the amount of capital contributions of a foreign corporation specified by Cabinet Order as those held indirectly as prescribed in Article 66-6, paragraph (2), item (iii) of the Act is the number or the amount of the shares, etc. obtained by multiplying the Issued Shares, etc. of a foreign corporation by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(4)The number of voting rights of a foreign corporation specified by Cabinet Order as being held indirectly as prescribed in Article 66-6, paragraph (2), item (iv) of the Act is the number of voting rights obtained by multiplying the total number of voting rights (meaning the voting rights prescribed in Article 66-6, paragraph (1), item (i), (a) of the Act; hereinafter the same applies in this paragraph) of a foreign corporation by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(5)The amount of a Dividend of Surplus, etc. specified by Cabinet Order as being receivable based on the claims vested in the shares, etc. of a foreign corporation held indirectly as prescribed in Article 66-6, paragraph (2), item (v) of the Act is the amount of a Dividend of Surplus, etc. obtained by multiplying the total amount of a Dividend of Surplus, etc. receivable based on the claims vested in the shares, etc. of a foreign corporation by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(6)A person who has a special relationship specified by Cabinet Order with a Resident or a domestic corporation prescribed in Article 66-6, paragraph (2), item (vi) of the Act is an individual or corporation listed as follows:

(7)The provisions of Article 4, paragraph (3) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis when controlling any other corporation listed in (a) to (c) of item (ii) of the preceding paragraph.

(8)The amount of expenses specified by Cabinet Order set forth in Article 66-6, paragraph (2), item (ii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article is the sum of personnel expenses for officers and employees of a specified foreign subsidiary company, etc. engaged in the business at the specified foreign subsidiary company, etc. prescribed in paragraph (3) of the same Article (limited to the amount of income calculated in accordance with the Provisions of the Laws and Regulations of Japan prescribed in paragraph (1), item (i) of the preceding Article or pursuant to the provisions of paragraph (2) of the same Article or the amount to be included in deductible expenses for calculating the amount of a loss for the relevant business year of the specified foreign subsidiary company, etc.).

Article 39-17(1)The persons specified by Cabinet Order prescribed in Article 66-6, paragraph (4), item (i) of the Act are any of the following:

(2)The case specified by Cabinet Order prescribed in Article 66-6, paragraph (4), item (i) of the Act is any of the cases specified respectively in the following items, in accordance with the category of the principal business to be conducted for the relevant business year of a specified foreign subsidiary company, etc. prescribed in the same paragraph:

(3)Where transactions prescribed in the preceding paragraph between a specified foreign subsidiary company, etc. and an affiliated person related to the specified foreign subsidiary company, etc. are conducted indirectly via a person other than an affiliated person related to the specified foreign subsidiary company, etc. (hereinafter referred to as a "Non-Affiliated Person" in this paragraph), transactions between the specified foreign subsidiary company, etc. and the Non-Affiliated Person are deemed to have been conducted directly between the specified foreign subsidiary company, etc. and the affiliated person and the provisions of the items of the preceding paragraph are applied, except in the case where there are justifiable grounds for having the Non-Affiliated Person intervene in the transactions.

(4)The water areas specified by Cabinet Order prescribed in Article 66-6, paragraph (4), item (ii) of the Act are inland water and territorial sea and exclusive economic zones or water areas equivalent to continental shelves related to a state or territory prescribed in the same item.

(5)The case specified by Cabinet Order prescribed in Article 66-6, paragraph (4), item (ii) of the Act is any of the cases specified respectively in the following items, in accordance with the category of the principal business to be conducted for the relevant business year of a specified foreign subsidiary company, etc. prescribed in the same paragraph:

Article 39-18(1)The amount calculated as specified by Cabinet Order prescribed in Article 66-7, paragraph (1) of the Act is the amount obtained by multiplying the amount of foreign corporation tax to be imposed on a specified foreign subsidiary company, etc. prescribed in the same paragraph (hereinafter referred to as a "Specified Foreign Subsidiary Company, etc." in this Article) on its income for a business year containing eligible income (meaning eligible income prescribed in Article 66-6, paragraph (2), item (ii) of the Act; hereinafter the same applies in this paragraph and paragraph (1) and paragraph (2) of the following Article) (hereinafter that business year is referred to as a "Taxable Business Year" through to paragraph (4)) by the ratio of the taxable income pertaining to a domestic corporation prescribed in Article 66-7, paragraph (1) of the Act out of the sum of the eligible income for the relevant Taxable Business Year (where there is any amount to be deducted as prescribed in Article 39-15, paragraph (1), item (iv) pursuant to the provisions of paragraph (1) (limited to the part concerning item (iv)) or paragraph (2) (limited to the part concerning item (xvii) of the same Article, or any amount of a deductible dividend, etc. prescribed in paragraph (3) of the same Article to be deducted pursuant to the provisions of the same paragraph, the amount obtained by adding the amounts) and the amount of a Dividend of Surplus, etc. to be deducted for calculating the amount of the eligible income (where the amount exceeds the taxable income, the amount equivalent to the taxable income).

(2)In the case where a Specified Foreign Subsidiary Company, etc. has been subject to two or more foreign corporation taxes or to a foreign corporation tax twice or more on its income for a Taxable Business Year, when a domestic corporation related to the Specified Foreign Subsidiary Company, etc. seeks the application of the provisions of Article 66-7, paragraph (1) (including the cases where it is applied pursuant to the provisions of paragraph (2) of the same Article by deeming the amount to be as specified therein; hereinafter the same applies in this Article) or Article 68-91, paragraph (1) (including the cases where it is applied pursuant to the provisions of paragraph (2) of the same Article by deeming the amount to be as specified therein; hereinafter the same applies in this Article) of the Act, regarding the amount of the foreign corporation taxes in two or more business years or consolidated business years; with respect to the application of the provisions of Article 66-7, paragraph (1) of the Act for a business year following the first one of those two or more business years or consolidated business years, the amount obtained by deducting the amount listed in item (ii) (the amount listed in item (iii), when seeking the application of the provisions of Article 66-7, paragraph (1) of the Act for the first time after receiving the application of the provisions of Article 68-91, paragraph (1) of the Act) from the amount listed in item (i) is deemed to be the calculated amount prescribed in the preceding paragraph:

(3)Out of the amount of foreign corporation taxes that were imposed on a Specified Foreign Subsidiary Company, etc. on its income for a Taxable Business Year, the amount deemed to be the amount of creditable foreign corporation taxes prescribed in Article 66-7, paragraph (1) of the Act that is to be paid by a domestic corporation related to the Specified Foreign Subsidiary Company, etc., pursuant to the provisions of the same paragraph, (hereinafter referred to as the "Amount of Creditable Foreign Corporation Taxes" in this Article) is deemed to be payable by the domestic corporation in a business year specified respectively in the following items for the category of foreign corporation taxes listed in the relevant items:

(4)Where a Specified Foreign Subsidiary Company, etc. has been subject to two or more foreign corporation taxes or to a foreign corporation tax twice or more on its income for a Taxable Business Year, a domestic corporation to which the provisions of Article 66-6, paragraph (1) of the Act are applied, regarding the amount equivalent to the taxable income for the relevant Taxable Business Year of the Specified Foreign Subsidiary Company, etc., may choose whether or not it will seek the application of the provisions of Article 66-7, paragraph (1) of the Act regarding the amount of respective foreign corporation taxes on the taxable income subject to the provisions of Article 66-6, paragraph (1) of the Act.

(5)In the case where a domestic corporation was subject to the provisions of Article 66-7, paragraph (1) of the Act, regarding the amount of foreign corporation tax imposed on the income of a Specified Foreign Subsidiary Company, etc. related to the domestic corporation, when the amount of foreign corporation tax was reduced in the relevant business year of the domestic corporation that starts within seven years following the first day of the business year subject to the provisions of the same paragraph (hereinafter referred to as the "Applicable Business Year" in this paragraph), it is deemed that the amount that remains after deducting the amount listed in item (ii) from the amount listed in item (i) has been reduced from the part of the amount of foreign corporation tax that was deemed to be the Amount of Creditable Foreign Corporation Tax payable by the domestic corporation, pursuant to the provisions of paragraph (1) of the same Article, as on the day of the reduction of the foreign corporation tax:

(6)In the case where a domestic corporation was subject to the provisions of Article 68-91, paragraph (1) of the Act, regarding the amount of foreign corporation tax imposed on the income of a Specified Foreign Subsidiary Company, etc. related to the domestic corporation, when the amount of foreign corporation tax was reduced in the relevant business year that starts within seven years following the first day of the consolidated business year subject to the provisions of the same paragraph (hereinafter referred to as the "Applicable Consolidated Business Year" in this paragraph), it is deemed that the amount that remains after deducting the amount listed in item (ii) from the amount listed in item (i) has been reduced from the part of the amount of foreign corporation tax that was deemed to be the amount of individually creditable foreign corporation tax payable by the domestic corporation, pursuant to the provisions of paragraph (1) of the same Article (hereinafter referred to as the "Amount of Individually Creditable Foreign Corporation Tax" in this Article), as on the day of the reduction of the foreign corporation tax:

(7)Where the Amount of Creditable Foreign Corporation Tax or individually creditable foreign corporation tax has been deemed to have been reduced, pursuant to the provisions of paragraph (5) or the preceding paragraph, the provisions of Article 69, paragraph (8) of the Corporation Tax Act are applied as specified in Article 150 (excluding paragraph (2)) of the Order for Enforcement of the Corporation Tax Act.In this case, in paragraph (1) of the same Article, the phrase "the domestic corporation pertaining to the amount of foreign corporation tax" is deemed to be replaced with "the domestic corporation pertaining to the amount of foreign corporation tax (including any part of the amount of foreign corporation tax to be imposed on the income of a Specified Foreign Subsidiary Company, etc. prescribed in Article 66-7, paragraph (1) (Credit for Foreign Tax on Taxable Income of Specified Foreign Subsidiary Companies for Domestic Corporations) or Article 68-91, paragraph (1) (Credit for Foreign Tax on Individually Taxable Income of Specified Foreign Subsidiary Companies for Consolidated Corporations) of the Act on Special Measures Concerning Taxation, which is deemed to be payable by the domestic corporation pursuant to these provisions; hereinafter the same applies in this paragraph)"; and the phrase "amount of creditable foreign corporation tax that" is deemed to be replaced with "amount of creditable foreign corporation tax (including the amount which is deemed to be payable by the domestic corporation pursuant to the provisions of Article 66-7, paragraph (1) of the Act on Special Measures Concerning Taxation (including the case where it is applied by deeming the amount as prescribed in paragraph (2) of the same Article to be the amount specified therein)) that"; and the term "the amount of reduced creditable foreign corporation tax" is deemed to be replaced with "the amount of reduced creditable foreign corporation tax (including the amount of creditable foreign corporation tax or the Amount of Individually Creditable Foreign Corporation Tax that is deemed to have been reduced pursuant to the provisions of Article 39-18, paragraph (5) or paragraph (6) (Reduction of Foreign Corporation Tax on Taxable Income of Specified Foreign Subsidiary Companies) of the Order for Enforcement of the Act on Special Measures Concerning Taxation)".

(8)Where there is any amount included in the gross profits pursuant to the provisions of Article 66-6, paragraph (1) of the Act for calculating the amount of income for the relevant business year of a domestic corporation listed in the items of the same paragraph, the amount included in gross profits is to be included in the foreign income prescribed in the main clause of Article 142, paragraph (3) of the Order for Enforcement of the Corporation Tax Act for calculating the maximum creditable amount prescribed in Article 69, paragraph (1) of the Corporation Tax Act for the relevant business year of the domestic corporation; provided, however, that in the case where the state of the head office of a Specified Foreign Subsidiary Company, etc. related to the domestic corporation is a state or territory that does not impose any foreign corporation taxes prescribed in Article 141, paragraph (1) of the same Order on income of the Specified Foreign Subsidiary Company, etc., the amount to be included in the foreign income is the amount equivalent to one-third of the amount included in the gross profits.

(9)The part of the amount of foreign corporation taxes listed in the items of paragraph (3) that are deemed to be the amount of creditable foreign corporation tax payable by a domestic corporation related to a Specified Foreign Subsidiary Company, etc., pursuant to the provisions of Article 66-7, paragraph (1) of the Act, is to be included in foreign income prescribed in the main clause of Article 142, paragraph (3) of the Order for Enforcement of the Corporation Tax Act for calculating the maximum creditable amount prescribed in Article 69, paragraph (1) of the Corporation Tax Act for a business year specified respectively in the relevant items of the domestic corporation.

(10)Out of the amount deemed to have been reduced from the amount of creditable foreign corporation tax or individually creditable foreign corporation tax, pursuant to the provisions of paragraph (5) or paragraph (6), the amount equivalent to the amount to be appropriated, pursuant to the provisions of paragraph (7), for deduction from the amount of creditable foreign corporation tax to be paid prescribed in Article 150, paragraph (1) of the Order for Enforcement of the Corporation Tax Act under the provisions of the same paragraph or for deduction from the amount exceeding the maximum creditable amount prescribed in paragraph (3) of the same Article under the provisions of the same paragraph is included in deductible expenses for calculating the amount of income for a business year of a domestic corporation prescribed in paragraph (5) or paragraph (6) for making the deduction.In this case, the amount to be included in deductible expenses is to be allocated as the amount of deductible expenses for calculating the amount of foreign income prescribed in the main clause of Article 142, paragraph (3) of the same Order.

(11)The business year specified by Cabinet Order prescribed in Article 66-7, paragraph (3) of the Act is the business year specified respectively in the items of paragraph (3), in accordance with the category of the amount of foreign corporation tax imposed on the income of a Specified Foreign Subsidiary Company, etc.

Article 39-19(1)The amount specified by Cabinet Order prescribed in Article 66-8, paragraph (3), item (iii) of the Act is the amount obtained by multiplying the eligible income pertaining to a specified foreign subsidiary company, etc. prescribed in the same item (hereinafter referred to as a "Specified Foreign Subsidiary Company, etc." in this Article) (the eligible income is limited to that which pertains to taxable income to be included in gross profits in the calculation of the amount of income for a business year, prescribed in the same item, of a domestic corporation; hereinafter the same applies in this paragraph) by the ratio of the shares, etc. for considering the claims held directly by the domestic corporation (meaning the number or the amount of shares, etc. of a foreign corporation held by a domestic corporation (where the foreign corporation has issued the shares, etc. in which different claims are vested, the number or the amount obtained by multiplying the Issued Shares, etc. of the foreign corporation by the ratio of the amount of a Dividend of Surplus, etc. that the domestic corporation can receive based on the claims out of the total amount); hereinafter the same applies in this Article) out of the total Issued Shares, etc. of the Specified Foreign Subsidiary Company, etc. at the end of the relevant business year of the Specified Foreign Subsidiary Company, etc. that pertains to the eligible income.

(2)The amount specified by Cabinet Order prescribed in Article 66-8, paragraph (3), item (ii) of the Act is the sum of the amounts obtained by multiplying the eligible income of a specified subsidiary company, etc. for the relevant business years (the eligible income is limited to that which pertains to taxable income that was included in gross profits in the calculation of the amount of income for the business years within the preceding ten years prescribed in the same item; hereinafter the same applies in this paragraph) by the ratio of the shares, etc. for considering the claims held directly by the domestic corporation out of the total Issued Shares, etc. of the Specified Foreign Subsidiary Company, etc. at the end of the relevant business years of the Specified Foreign Subsidiary Company, etc. that pertains to the eligible income.

(3)With respect to the application of the provisions of Article 66-8, paragraph (3) of the Act in or after the business year containing the day of a qualified merger prescribed in paragraph (3) of the same Article (referred to as a "qualified merger, etc." in the following paragraph) of a domestic corporation set forth in the same paragraph, in the case where the provisions of the same paragraph apply, the taxed amount of income specified in the items of paragraph (5) of the same Article (meaning the amount listed in paragraph (3), item (ii) of the same Article; hereinafter the same applies in this Article) or the individually taxed amount of income (meaning the amount listed in Article 68-92, paragraph (3), item (ii) of the Act; hereinafter the same applies in this Article) is deemed to be the taxed amount of income for a business year of the domestic corporation specified respectively in the following items for the category of business years or consolidated business years listed in the relevant items of a merged corporation, split corporation, corporation making a capital contribution in kind, or corporation effecting post-formation acquisition of assets and/or liabilities (referred to as a "merged corporation, etc." in the following paragraph):

(4)In the case where the first day of the oldest business year or consolidated business year out of the relevant business years or consolidated business years that started within ten years prior to the first day of the business year containing the day of a qualified merger, etc. of a domestic corporation set forth in Article 66-8, paragraph (5) of the Act (hereinafter referred to as the "First Day of the Business Year of the Domestic Corporation Ten Years before" in this paragraph) falls after the first day of the oldest business year or consolidated business year out of a business year within ten years prior to the merger, Business Year Within Ten Years prior to the Company Split or Business Year Within Ten Years prior to the Company Split, etc. of a merged corporation(s), etc. pertaining to the qualified merger, etc. (hereinafter referred to as a "Business Year of the Merged Corporation(s), etc. Within the Preceding Ten Years" in this paragraph) (in the case of a qualified merger, etc. made among two or more merged corporations, etc., after the first day of the relevant business year or consolidated business year of the merged corporations, etc. whichever started the earliest; hereinafter referred to as the "First Day of the Business Year of the Merged Corporations, etc. Ten Years before" in this paragraph), the provisions of the preceding paragraph apply by deeming the respective periods classifying the period between the First Day of the Business Year of the Merged Corporations, etc. Ten Years before and the day preceding the First Day of the Business Year of the Domestic Corporation Ten Years before (in the case where the domestic corporation is to be established through the qualified merger, etc., the day preceding the first day of the business year of the domestic corporation including the day of the qualified merger, etc.; hereinafter the same applies in this paragraph) by the corresponding Business Year of the Merged Corporation(s), etc. Within the Preceding Ten Years pertaining to the First Day of the Business Year of the Merged Corporations, etc. Ten Years before (for the period including the preceding day, the period between the first day of the business year or consolidated business year of the merged corporation, etc. including the preceding day and the day preceding the First Day of the Business Year of the Domestic Corporation Ten Years before) to be the relevant business year of the domestic corporation.

(5)The amount calculated as specified by Cabinet Order prescribed in Article 66-8, paragraph (5), item (ii) of the Act is the amount specified respectively in the following items for the category of the taxed amount of income or individually taxed amount of income listed in the relevant items:

(6)The amount calculated as specified by Cabinet Order prescribed in Article 66-8, paragraph (5), item (iii) of the Act is the amount specified respectively in the following items for the category of the taxed amount of income or individually taxed amount of income listed in the relevant items:

(7)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 66-8, paragraph (1) of the Act apply, the phrase "of the Act" in Article 9, paragraph (1), item (i), (c) of the same Order is deemed to be replaced with "of the Act and Article 66-8 (Exclusion from Gross Profits of Dividend of Surplus, etc. to be Received from Specified Foreign Subsidiary Company, etc.) of the Act on Special Measures Concerning Taxation)".

(8)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 66-8, paragraph (2) of the Act apply, the phrase "of the Act" in Article 9, paragraph (1), item (i), (c) of the same Order is deemed to be replaced with "of the Act (including cases where applied following the deemed replacement of terms pursuant to the provisions of the first sentence of Article 66-8, paragraph (2) (Exclusion from Gross Profits of Dividend of Surplus, etc. to be Received from Specified Foreign Subsidiary Company, etc.) of the Act on Special Measures Concerning Taxation)".

Article 39-20(1)In the case referred to in Article 66-6, paragraph (1) of the Act, whether or not a foreign corporation falls under the category of an affiliated foreign company prescribed in paragraph (2), item (i) of the same Article (hereinafter referred to as an "Affiliated Foreign Company" in this paragraph and the following paragraph) is to be determined according to its status at the end of the relevant business year of the foreign corporation and whether or not a domestic corporation falls under the category of a corporation listed in the items of paragraph (1) of the same Article is determined according to its status at the end of the relevant business year of an Affiliated Foreign Company related to that corporation.

(2)Where a domestic corporation listed in the items of Article 66-6, paragraph (1) of the Act has been dissolved through a merger by the day on which two months have elapsed after the final day of the relevant business year of an Affiliated Foreign Company related to the domestic corporation, the number of the shares, etc. of the Affiliated Foreign Company prescribed in paragraph (2), item (iii) of the same Article which were directly and indirectly held by the domestic corporation (hereinafter referred to as the "Number of Shares, etc. Directly and Indirectly Held" in this paragraph) and which have been succeeded to by the merging corporation pertaining to the merger is deemed to be the Number of Shares, etc. Directly and Indirectly Held by the merging corporation on the final day of the relevant business year of the Affiliated Foreign Company.

(3)The amount included in the gross profits of a domestic corporation subject to the provisions of Article 66-6, paragraph (1) of the Act, pursuant to the provisions of the same paragraph, is not to be included in the amount of income, etc. prescribed in the provisions of Article 67, paragraph (3) and paragraph (5) of the Corporation Tax Act for applying these provisions.

(4)The amount included in the gross profits pursuant to the provisions of Article 66-6, paragraph (1) of the Act is not to be included in the amount of income prescribed in Article 9, paragraph (1), item (i), (a) of the Order for Enforcement of the Corporation Tax Act for calculating the amount of profit reserve of a domestic corporation subject to the provisions of Article 66-6, paragraph (1) of the Act.

(5)The provisions of Article 14-10, paragraphs (1) to (5) and paragraphs (7) to (11) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of Article 66-6, paragraph (7) of the Act apply under the provisions of the same Article (excluding paragraph (3), paragraph (4), and paragraph (6)) to Article 66-9 of the Act, Articles 39-14 to 39-16 (excluding paragraph (8)), and Article 39-18 to this Article.

(6)With regard to a trust corporation or a beneficiary of a trust subject to corporation taxation prescribed in Article 4-7 of the Corporation Tax Act, beyond what is specified in the preceding paragraph, other necessary particulars concerning the application of the provisions of Article 66-6 (excluding paragraph (3), paragraph (4), and paragraph (6)) to Article 66-9 of the Act, Articles 39-14 to 39-16 (excluding paragraph (8)), or Article 39-18 to this Article are specified by Ministry of Finance Order.

Article 39-20-2(1)An individual who has a special relationship specified by Cabinet Order prescribed in Article 66-9-2, paragraph (1) of the Act is any of the following:

(2)A corporation which has a special relationship specified by Cabinet Order prescribed in Article 66-9-2, paragraph (1) of the Act is any of the following:

(3)The provisions of Article 4, paragraph (3) and paragraph (4) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of the preceding paragraph apply.

(4)The relationship specified by Cabinet Order prescribed in Article 66-9-2, paragraph (1) of the Act is the relevant relationship in the case where a specially-related shareholder, etc. prescribed in the same paragraph (hereinafter referred to as a "Specially-Related Shareholder, etc." in this Section) and a specially-related domestic corporation have a relationship where the ratio of the shares, etc. indirectly held by the Specially-Related Shareholder, etc. pertaining to the specially-related domestic corporation (meaning the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)) is 80 percent or more:

(5)A foreign corporation specified by Cabinet Order prescribed in Article 66-9-2, paragraph (1) of the Act is any of the following:

(6)In item (iii) of the preceding paragraph, whether or not a foreign corporation directly or indirectly holds over 50 percent of the Issued Shares, etc. is to be determined based on the sum of the ratio of the shares, etc. held directly by a foreign corporation listed in item (i) and item (ii) of the same paragraph pertaining to any other foreign corporation (excluding a foreign corporation falling under the category of a foreign corporation listed in item (i) or item (ii) of the same paragraph and a foreign corporation falling under the category of a Specially-Related Shareholder, etc.; hereinafter the same applies in this paragraph) (the ratio of the shares, etc. held directly means the ratio of the number or the amount of the shares, etc. of any other foreign corporation held by a foreign corporation listed in item (i) and item (ii) of the preceding paragraph out of the total Issued Shares, etc. of the relevant other foreign corporation) and the ratio of the shares, etc. held indirectly by a foreign corporation listed in item (i) and item (ii) of the same paragraph pertaining to the relevant other foreign corporation (the ratio of the shares, etc. held indirectly means the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)):

(7)An affiliated foreign corporation specified by Cabinet Order prescribed in Article 66-9-2, paragraph (1) of the Act is any of the following:

(8)The provisions of Article 39-14, paragraph (2) apply mutatis mutandis to the determination as to whether or not an affiliated foreign corporation falls under the category of an affiliated foreign corporation set forth in item (ii) of the preceding paragraph.

(9)An individual who has a special relationship specified by Cabinet Order prescribed in Article 66-9-2, paragraph (2), item (i) of the Act is an individual who has a special relationship prescribed in Article 4, paragraph (1) of the Order for Enforcement of the Corporation Tax Act with a shareholder, etc. of a domestic corporation.

(10)A corporation which has a special relationship specified by Cabinet Order prescribed in Article 66-9-2, paragraph (2), item (i) of the Act is any of the following:

(11)The provisions of Article 4, paragraph (3) and paragraph (4) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of the preceding paragraph apply.

(12)A domestic corporation specified by Cabinet Order prescribed in Article 66-9-2, paragraph (2), item (ii) of the Act is a domestic corporation which has received the transfer of almost all the assets and liabilities of a specified domestic corporation prescribed in the same item immediately prior to a merger, split, transfer of business or for other reasons (hereinafter referred to as "Specified Reasons" in this paragraph) due to the Specified Reasons.

Article 39-20-3(1)The amount of undistributed income calculated in accordance with the standards specified by Cabinet Order prescribed in Article 66-9-2, paragraph (2), item (iii) of the Act is the amount calculated, pursuant to the provisions of Article 39-15, paragraph (1) or paragraph (2), or paragraph (3) of the same Article, with regard to the income of a specified foreign corporation prescribed in Article 66-9-6, paragraph (1) of the Act (hereinafter referred to as a "Specified Foreign Corporation" in this Article and paragraph (1) of the following Article) in its settlement of accounts for the relevant business year.

(2)The amount obtained as a result of an adjustment for the amount of loss and base income prescribed in Article 66-9-2, paragraph (2), item (iii) of the Act is the amount that remains after deducting, from the base income amount, prescribed in the same item, of a specified foreign subsidiary company, etc. for the relevant business year, the sum of the amounts listed as follows (where the provisions of paragraph (3) of the same Article are applied, the amount obtained by adding the amount that accounts for ten percent of the amount of expenses specified by Cabinet Order prescribed in Article 66-9-2, paragraph (2), item (iii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article):

(3)A loss prescribed in item (i) of the preceding paragraph is a loss calculated with regard to the amount of income of a Specified Foreign Corporation in its settlement of accounts for the relevant business year, where the calculation has been made pursuant to the provisions of paragraph (1).

(4)The provisions of Article 39-15, paragraphs (7) to (9) apply mutatis mutandis where the amount of income of a Specified Foreign Corporation in its settlement of accounts for the relevant business year is calculated pursuant to the provisions of paragraph (1) or paragraph (2) of the same Article.

Article 39-20-4(1)The amount calculated as specified by Cabinet Order prescribed in Article 66-9-2, paragraph (1) of the Act is the amount calculated with regard to the eligible income (meaning the eligible income prescribed in the same paragraph; hereinafter the same applies in this Section) for the relevant business year of a specified foreign corporation related to a domestic corporation which is a Specially-Related Shareholder, etc., pursuant to the provisions of Article 39-16, paragraph (1) and paragraph (2).

(2)The provisions of Article 39-16, paragraph (3) apply mutatis mutandis to the number of shares or the amount of capital contributions of a foreign corporation specified by Cabinet Order as being held indirectly as prescribed in Article 66-9-2, paragraph (2), item (iv) of the Act.In this case, in Article 39-16, paragraph (3), item (i), the term "an individual" is deemed to be replaced with "a resident (meaning a resident prescribed in Article 2, paragraph (1), item (i)-2 of the Act; hereinafter the same applies in this paragraph)"; the term "the individual" is deemed to be replaced with "the resident"; and in item (ii) of the same paragraph, the term "an individual" is deemed to be replaced with "a resident"; and the term "the individual" is deemed to be replaced with "the resident".

(3)The amount of expenses specified by Cabinet Order set forth in Article 66-9-2, paragraph (2), item (iii) of the Act in which the terms and phrases are replaced pursuant to the provisions of paragraph (3) of the same Article is the amount calculated with regard to the sum of personnel expenses for officers and employees of a specified foreign corporation engaged in the business of the specified foreign corporation prescribed in paragraph (3) of the same Article, pursuant to the provisions of Article 39-16, paragraph (8).

Article 39-20-5(1)The person specified by Cabinet Order prescribed in Article 66-9-2, paragraph (4), item (i) of the Act is any of the following:

(2)The provisions of Article 39-17, paragraph (2) and paragraph (3) apply mutatis mutandis to the case specified by Cabinet Order prescribed in Article 66-9-2, paragraph (4), item (i) of the Act.In this case, the term "those listed in the items of Article 40-4, paragraph (1), items of Article 66-6, paragraph (1), items of Article 68-90, paragraph (1) of the Act and the preceding items" in Article 39-17, paragraph (2), item (i) is deemed to be replaced with "a specially-related domestic corporation prescribed in Article 66-9-2, paragraph (2), item (ii) of the Act, Specially-Related Shareholder, etc. prescribed in paragraph (1) of the same Article and those listed in the items of Article 39-20-5, paragraph (1)".

(3)The provisions of Article 39-17, paragraph (5) apply mutatis mutandis to the case specified by Cabinet Order prescribed in Article 66-9-2, paragraph (4), item (ii) of the Act.

Article 39-20-6(1)The amount calculated as specified by Cabinet Order prescribed in Article 66-9-3, paragraph (1) of the Act is the amount calculated, pursuant to the provisions of Article 39-18, paragraph (1), with regard to the amount of foreign corporation tax (meaning foreign corporation tax prescribed in Article 69, paragraph (1) of the Corporation Tax Act; the same applies in paragraph (3)) to be imposed on a specified foreign corporation prescribed in Article 66-9-7, paragraph (1) of the Act (referred to as a "Specified Foreign Corporation" in paragraph (3)) on its income for a business year containing eligible income.

(2)In the case where the provisions of Article 69, paragraphs (1) to (12) of the Corporation Tax Act are applied by deeming the calculated amount to be the amount of creditable foreign corporation tax prescribed in paragraph (1) of the same Article payable by a domestic corporation that is a Specially-Related Shareholder, etc. pursuant to the provisions of Article 66-9-3, paragraph (1) of the Act, the particulars concerning the application of these provisions are as prescribed in the provisions of Article 39-18, paragraphs (2) to (10).

(3)The business year specified by Cabinet Order prescribed in Article 66-9-3, paragraph (3) of the Act is the business year specified respectively in the items of Article 39-18, paragraph (3), in accordance with the category of the amount of foreign corporation tax imposed on the income of a Specified Foreign Corporation.

Article 39-20-7(1)The amount specified by Cabinet Order as prescribed in Article 66-9-4, paragraph (3), item (i) of the Act is the amount calculated in accordance with the provisions of Article 39-19, paragraph (1) with regard to the eligible income (limited to that which pertains to the taxable income prescribed in the same item that is included in gross profits in the calculation of the amount of income for the business year, prescribed in the same item, of a domestic corporation that is a Specially-Related Shareholder, etc.) pertaining to a specified foreign corporation prescribed in the same item (referred to as a "Specified Foreign Corporation" in the following paragraph).

(2)The amount specified by Cabinet Order as prescribed in Article 66-9-4, paragraph (3), item (ii) of the Act is the amount calculated in accordance with the provisions of Article 39-19, paragraph (2) with regard to the eligible income (limited to that which pertains to the taxable income prescribed in the same item that is included in gross profits in the calculation of the amount of income for each business year within the ten preceding years, prescribed in the same item, of a domestic corporation that is a Specially-Related Shareholder, etc.) for each business year of a Specified Foreign Corporation.

(3)The particulars concerning the application of the provisions of Article 66-8, paragraphs (5) through (8) of the Act as applied mutatis mutandis pursuant to Article 66-9-4, paragraph (5) of the Act are as prescribed in the provisions of Article 39-19, paragraphs (3) through (6).

(4)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 66-9-4, paragraph (1) of the Act apply, the phrase "(Exclusion from Gross Profits...) of the Act" in Article 9, paragraph (1), item (i), (c) of the same Order is deemed to be replaced with "(Exclusion from Gross Profits ...) of the Act or Article 66-9-4 (Exclusion from Gross Profits of Dividend of Surplus, etc. Received from Specified Foreign Corporation) of the Act on Special Measures Concerning Taxation)"

(5)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of the first sentence of Article 66-9-4, paragraph (2) apply, the phrase "(Exclusion of Gross Profit...) of the Act" in Article 9, paragraph (1), item (i), (c) of the same Order is deemed to be replaced with "(Exclusion of Gross Profit ...) of the Act (including the case where it is applied following the deemed replacement of terms pursuant to the provisions of the first sentence of Article 66-9-4, paragraph (2) (Exclusion from Gross Profits of Dividend of Surplus, etc. Received from Specified Foreign Corporation) of the Act on Special Measures Concerning Taxation)".

Article 39-20-8(1)Where the provisions of Article 66-9-2, paragraph (1) of the Act apply, whether or not a domestic corporation falls under the category of a specified domestic corporation prescribed in Article 66-9-2, paragraph (2), item (i) of the Act is to be determined according to its status immediately before an event causing a specified relationship prescribed in paragraph (1) of the same Article occurred, and whether or not the specified relationship actually exists afterwards between a Specially-Related Shareholder, etc. and a specially-related domestic corporation and whether or not a foreign corporation falls under the category of an affiliated foreign corporation is determined according to its status at the end of the relevant business year of the specially-related domestic corporation.

(2)Where a foreign corporation has been determined as falling under the category of an affiliated foreign corporation at the end of the relevant business year of a specially-related domestic corporation, pursuant to the provisions of the preceding paragraph, the provisions of Article 66-9-2 of the Act apply to the eligible income for the relevant business year containing the day on which the affiliated foreign corporation (limited to that falling under the category of a specified foreign corporation prescribed in Article 66-9-6, paragraph (1) of the Act) was determined as falling under that category.

(3)Where a domestic corporation which is a Specially-Related Shareholder, etc. pertaining to a specially-related domestic corporation has been dissolved through a merger by the day on which two months have elapsed after the final day of the relevant business year of an affiliated foreign corporation related to the domestic corporation, the number of the shares, etc. of the affiliated foreign corporation prescribed in Article 66-9-2, paragraph (2), item (iv) of the Act which were directly and indirectly held by the domestic corporation (hereinafter referred to as the "Number of Shares, etc. Directly and Indirectly Held" in this paragraph) and which have been transferred to the merging corporation pertaining to the merger (the merging corporation is limited to one falling under the category of a Specially-Related Shareholder, etc. related to the specially-related domestic corporation and one that proves to fall under the category of a Specially-Related Shareholder, etc. related to the specially-related domestic corporation by receiving the transfer of the number of the shares, etc. of the affiliated foreign corporation directly and indirectly held by the domestic corporation through the merger; hereinafter the same applies in this paragraph) is deemed to be the Number of Shares, etc. Directly and Indirectly Held by the merging corporation on the final day of the relevant business year of the affiliated foreign corporation.

(4)The provisions of Article 39-20, paragraph (3) and paragraph (4) apply mutatis mutandis to the application of the provisions of Article 67, paragraph (3) and paragraph (5) of the Corporation Tax Act and the calculation of the amount of profit reserve of a domestic corporation which is a Specially-Related Shareholder, etc., where there is any amount included in the gross profits of the domestic corporation pursuant to the provisions of Article 66-9-2, paragraph (1) of the Act.

(5)The provisions of Article 14-10, paragraphs (1) to (5) and paragraphs (7) to (11) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of Article 66-9-2, paragraph (8) of the Act apply under the provisions of the same Article (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 66-9-5 of the Act, Articles 39-20-2 to 39-20-4 (excluding paragraph (3)), and Article 39-20-6 to this Article.

(6)With regard to a trust corporation or a beneficiary of a trust subject to corporation taxation prescribed in Article 4-7 of the Corporation Tax Act, beyond what is specified in the preceding paragraph, other necessary particulars concerning the application of the provisions of Article 66-9-2 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 66-9-5 of the Act, Articles 39-20-2 to 39-20-4 (excluding paragraph (3)), or Article 39-20-6 to this Article are specified by Ministry of Finance Order.

Article 39-30(1)The transaction specified by Cabinet Order as a bond transaction with a repurchase or resale agreement prescribed in Article 67-11, paragraph (1) of the Act is a bond transaction with a repurchase/resale agreement prescribed in Article 180, paragraph (4) of the Order for Enforcement of the Corporation Tax Act (referred to as a "bond transaction with a repurchase/resale agreement" in the following paragraph).

(2)The margin specified by Cabinet Order as prescribed in Article 67-11, paragraph (1) of the Act is a margin equivalent to the amount calculated, in the case where in a bond transaction with a repurchase/resale agreement that a foreign corporation prescribed in the same paragraph conducts with a financial institution prescribed in the same paragraph and that has been settled in the special international financial transactions account, the value for purchasing bonds upon the purchase is less than the value for reselling bonds of the same type and the same quantity upon resale, by deducting the value for the purchase from the value for the resale.

(3)The interest specified by Cabinet Order prescribed in Article 67-11, paragraph (1) of the Act is the interest to be received by a foreign corporation prescribed in the same paragraph which is attributed to a business that is conducted by the person in Japan at any fixed place prescribed in Article 141, item (i) of the Corporation Tax Act.

(10)With regard to the application of the provisions of Article 73, paragraph (2) and Article 77-2, paragraph (2) of the Order for Enforcement of the Corporation Tax Act to special purpose companies, the term "without applying the following provisions" in these provisions is deemed to be replaced with "without applying the following provisions and the provisions of Article 67-14, paragraph (1) (Special Provisions for Taxation on Special Purpose Companies) of the Act on Special Measures Concerning Taxation".

(11)The amount of foreign corporation tax prescribed in Article 67-14, paragraph (4) of the Act that is to be credited under the same paragraph (hereinafter referred to as the "Amount of Creditable Foreign Corporation Tax" in this Article) is the sum of the amounts that remain after deducting, from the amounts specified in the following items for persons listed in the respective items, the amount of a dividend of profit (meaning the amount of a dividend of profit prescribed in Article 67-14, paragraph (1) of the Act; hereinafter the same applies in this Article) of a special purpose company pertaining to the Amount of Creditable Foreign Corporation Tax that these persons are to receive (where the sum of the amounts exceeds the amount of foreign corporation tax prescribed in Article 67-14, paragraph (4) of the Act that the special purpose company has paid, the amount of the paid foreign corporation tax):

(12)When a special purpose company collects income tax on the amount of a dividend of profit (limited to the amount pertaining to the business year for which it is to pay the Amount of Creditable Foreign Corporation Tax) pursuant to the provisions of Article 181 or Article 212 of the Income Tax Act, the Amount of Creditable Foreign Corporation Tax is to be credited against the amount of income tax that it is to collect and pay.

(13)Where the provisions of Article 67-14, paragraph (4) of the Act has applied to the amount of a dividend of profit of a special purpose company that an individual or a corporation is to receive, the Amount of Creditable Foreign Corporation Tax pertaining to the amount of dividend of profit is to be added to the amount of dividend of profit that these persons are to receive.

(14)A special purpose company, which was subject to the provisions of Article 67-14, paragraph (4) of the Act, must preserve a document certifying that the amount of foreign corporation tax prescribed in the same paragraph has been imposed and other documents specified by Ministry of Finance Order, as specified by Ministry of Finance Order.

(8)The requirements specified by Cabinet Order prescribed in Article 67-15, paragraph (1), item (ii), (e) of the Act are to be that an investment corporation has not borrowed funds from any person other than an institutional investor prescribed in item (i), (b), 2. of the same paragraph.

(9)With regard to the application of the provisions of Article 73, paragraph (2) and Article 77-2, paragraph (2) of the Order for Enforcement of the Corporation Tax Act to investment corporations, the term "without applying the following provisions" in these provisions is deemed to be replaced with "without applying the following provisions and the provisions of Article 67-15, paragraph (1) (Special Provisions for Taxation on Investment Corporations) of the Act on Special Measures Concerning Taxation".

(10)The amount of foreign corporation tax prescribed in Article 67-15, paragraph (5) of the Act that is to be credited under the same paragraph (hereinafter referred to as the "Amount of Creditable Foreign Corporation Tax" in this Article) is the sum of the amounts that remain after deducting, from the amount specified in the following items for persons listed in the respective items, the amount of a dividend, etc. (meaning the amount of a dividend, etc. prescribed in Article 67-15, paragraph (1) of the Act; hereinafter the same applies in this Article) of an investment corporation pertaining to the Amount of Creditable Foreign Corporation Tax that these persons are to receive (where the sum of the amounts exceeds the amount of foreign corporation tax prescribed in Article 67-15, paragraph (5) of the Act that the investment corporation has paid, the amount of the paid foreign corporation tax):

(11)When an investment corporation collects income tax on the amount of a dividend, etc. (limited to the amount pertaining to the business year for which it is to pay the Amount of Creditable Foreign Corporation Tax) pursuant to the provisions of Article 181 or Article 212 of the Income Tax Act, the Amount of Creditable Foreign Corporation Tax is to be credited against the amount of income tax that it is to collect and pay.

(12)Where the provisions of Article 67-15, paragraph (5) of the Act have applied to the amount of a dividend, etc. of an investment corporation that an individual or a corporation is to receive, the Amount of Creditable Foreign Corporation Tax pertaining to the amount of a dividend, etc. is to be added to the amount of a dividend, etc. that these persons are to receive.

(13)An investment corporation which was subject to the provisions of Article 67-15, paragraph (5) of the Act must preserve a document certifying that the amount of foreign corporation tax prescribed in the same paragraph has been imposed and other documents specified by Ministry of Finance Order, as specified by Ministry of Finance Order.

Article 39-33(1)The foreign corporation prescribed in Article 67-16, paragraph (3) of the Act must submit the documents prescribed in the same paragraph to the competent district director of the a tax office having jurisdiction over the place for tax payment by the due date for filing a return form prescribed in the provisions of Article 74, paragraph (1) of the Corporation Tax Act as applied mutatis mutandis pursuant to Article 145, paragraph (1) of the same Act for the business year containing the day on which the foreign corporation has obtained any amount of income categorized as domestic source income prescribed in Article 67-16, paragraph (3) of the Act.

(2)Where a foreign corporation which is a partner having concluded an investment partnership contract (meaning an investment partnership contract prescribed in Article 41-21, paragraph (2), item (i) of the Act; hereinafter the same applies in this Article and the following Article) and which has not satisfied the requirements listed in Article 41-21, paragraph (1), item (v) of the Act (hereinafter referred to as the "Item (v) Requirement" in this paragraph and the following paragraph) by the time of the conclusion of the investment partnership contract, comes to satisfy the Item (v) Requirement in respect of the investment partnership contract, with regard to the application of the provisions of Article 41-21, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 67-16, paragraph (2) of the Act in respect of the investment partnership contract in the case where the foreign corporation satisfies the requirements listed in Article 41-21, paragraph (1), items (i) through (iv) continuously during the period from the day of the conclusion until the day on which the foreign corporation comes to satisfy the Item (v) Requirement, the phrase "the date of the conclusion of" in paragraph (3) of the same Article is deemed to be replaced with "the day on which the foreign corporation comes to satisfy the requirements listed in paragraph (1), item (v) in respect of"; and the phrase "items in paragraph (1)" in the same paragraph is deemed to be replaced with "items of the same paragraph".

(3)Where a foreign corporation which is a partner having concluded two or more investment partnership contracts and which has not satisfied the Item (v) Requirement at the time of the conclusion of each investment partnership contract, would come to satisfy the Item (v) Requirement in respect of one of those two or more investment partnership contracts provided that the foreign corporation does not conduct a business in Japan based on an investment partnership contract(s) other than the relevant one of the two or more investment partnership contracts (hereinafter referred to as the "Other Investment Partnership Contract(s)" in this paragraph), with regard to the application of the provisions of Article 41-21, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 67-16, paragraph (2) of the Act to the relevant one investment partnership contract in the case where the foreign corporation satisfies the requirements listed in Article 41-21, paragraph (1), items (i) through (iv) of the Act in respect of each investment partnership contract continuously during the period from the date of conclusion until the day on which the foreign corporation comes to satisfy the Item (v) Requirement, the phrase "the date of the conclusion of" in paragraph (3) of the same Article is deemed to be replaced with "the day on which the foreign corporation comes to satisfy the requirements listed in paragraph (1), item (v) in respect of"; the phrase "items in paragraph (1)" in the same paragraph is deemed to be replaced with "items of the same paragraph"; and the phrase "on the date of the submission and thereafter" in the same paragraph is deemed to be replaced with "on the day on which the foreign corporation has submitted written applications for special provisions in respect of all of the investment partnership contracts concluded thereby, and thereafter".

(4)Where a foreign corporation which seeks the application of the provisions of Article 67-16, paragraph (1) of the Act has submitted a written application for special provisions prescribed in Article 41-21, paragraph (3) of the Act pursuant to the provisions of the same paragraph or where a foreign corporation has submitted a written statement of change prescribed in paragraph (7) of the same Article pursuant to the provisions of the same paragraph, it is deemed that the foreign corporation has submitted a written application for the special provisions prescribed in Article 41-21, paragraph (3) of the Act pursuant to the provisions of the same paragraph as applied mutatis mutandis pursuant to Article 67-16, paragraph (2) of the Act or a written statement of change prescribed in Article 41-21, paragraph (7) of the Act pursuant to the provisions of the same paragraph as applied mutatis mutandis pursuant to Article 67-16, paragraph (2) of the Act, respectively.

Article 39-33-2(1)Where a foreign corporation listed in Article 141, item (iv) of the Corporation Tax Act (hereinafter referred to as a "Foreign Corporation Having No Permanent Establishments in Japan" in this Article) has concluded an investment partnership contract subject to special provisions, etc. (meaning an investment partnership contract subject to special provisions (meaning an investment partnership contract subject to the provisions of Article 67-16, paragraph (1) of the Act, which is concluded by a foreign corporation which is subject to the provisions of the same paragraph; hereinafter the same applies in this paragraph) and an investment partnership contract (limited to the investment partnership contract in the case where the Foreign Corporation Having No Permanent Establishments in Japan satisfies the requirements listed in items (i) and (ii) in respect of an investment partnership contract other than an investment partnership contract subject to special provisions; hereinafter the same applies in this paragraph); hereinafter the same applies in this Article), when the foreign corporation has transferred shares of or capital contributions to a domestic corporation that satisfies the requirements listed in the items of Article 187, paragraph (6) of the Order for Enforcement of the Corporation Tax Act (including the case where the domestic corporation is deemed, pursuant to the provisions of paragraph (7) of the same Article, to have transferred shares or capital contributions prescribed in paragraph (6), item (ii) of the same Article that satisfies the requirements listed in the same item, and limited to the case where the foreign corporation satisfies the requirements listed in item (iii) in respect of the shares or capital contributions), with regard to the transfer of shares of or capital contributions to the domestic corporation, the provisions of Article 187 of the same Order apply by deeming that the person listed in paragraph (4), item (iii) of the same Article pertaining to the investment partnership contract subject to special provisions, etc. is not included in the scope of Specially-Related Shareholders, etc. prescribed in paragraph (6) and paragraph (7) of the same Article:

(2)Where a Foreign Corporation Having No Permanent Establishments in Japan has transferred shares of or capital contributions to a domestic corporation which are partnership property prescribed in Article 41-21, paragraph (2), item (iv) of the Act (hereinafter referred to as "Investment Partnership Property" in the following paragraph) pertaining to the investment partnership contract subject to special provisions, etc. concluded by the foreign corporation and which fall under the items of Article 26-31, paragraph (3), the provisions of the preceding paragraph do not apply.

(3)The provisions of Article 26-31, paragraph (4) apply mutatis mutandis to the determination as to whether shares of or capital contributions to a domestic corporation which are Investment Partnership Property transferred by a Foreign Corporation Having No Permanent Establishments in Japan fall under the category of shares or capital contributions listed in paragraph (3), item (i) of the same Article.

(4)The provisions of Article 26-31, paragraph (5) apply mutatis mutandis where a Foreign Corporation Having No Permanent Establishments in Japan applies the provisions of paragraph (1).In this case, the phrase "their name and address (in the case of a Nonresident Having No Permanent Establishments in Japan who has a residence in Japan, their residence)" in paragraph (5) of the same Article is deemed to be replaced with "its name and the location of its head office or principal office"; and the phrase "March 15 of the year following the year containing the date of transfer" in the same paragraph is deemed to be replaced with "due date for filing a return form under the provisions of Article 74, paragraph (1) of the Corporation Tax Act as applied mutatis mutandis pursuant to Article 145, paragraph (1) of the same Act for the business year, prescribed in Article 2, paragraph (2), item (xix) of the Act, which contains the date of transfer".

Article 39-33-3(1)The interest or discount on bonds specified by Cabinet Order prescribed in Article 67-17, paragraph (2) of the Act is the interest or discount on bonds listed as follows:

(2)The profit from redemption specified by Cabinet Order as prescribed in Article 67-17, paragraph (3) of the Act is the profit from redemption listed as follows:

(3)The profit from redemption specified by Cabinet Order prescribed in Article 67-17, paragraph (5) of the Act is the profit from the redemption listed as follows:

Article 39-33-4The amount specified by Cabinet Order prescribed in Article 67-18, paragraph (2) of the Act is the amount specified respectively in the following items for the category of cases listed in the relevant items:

Article 39-34-3(1)The merger satisfying the requirements specified by Cabinet Order prescribed in Article 68-2-3, paragraph (1) of the Act is the merger that satisfies all of the following requirements:

(2)The company split satisfying the requirements specified by Cabinet Order prescribed in Article 68-2-3, paragraph (2) of the Act is the company split that satisfies all of the following requirements:

(3)The company split specified by Cabinet Order prescribed in Article 68-2-3, paragraph (2), item (i) of the Act is the company split in which almost all of the assets and liabilities pertaining to a split corporation immediately prior to the company split are to be transferred to a succeeding corporation in the company split.

(4)The share exchange satisfying the requirements specified by Cabinet Order prescribed in Article 68-2-3, paragraph (3) of the Act is the share exchange that satisfies all of the following requirements:

(5)The foreign corporation specified by Cabinet Order prescribed in Article 68-2-3, paragraph (5), item (i) of the Act is that listed as follows:

(6)The provisions of Article 39-14, paragraph (2) apply mutatis mutandis to the determination as to whether or not a foreign corporation falls under the category of a foreign corporation set forth in item (ii) of the preceding paragraph.

(7)A foreign corporation that satisfies all of the following requirements is not to be included in the category of foreign corporations listed in the items of paragraph (5):

(8)Where transactions between a foreign corporation and an affiliated person related to the foreign corporation are conducted indirectly via a person other than an affiliated person related to the foreign corporation (hereinafter referred to as a "Non-Affiliated Person" in this paragraph), transactions between the foreign corporation and the Non-Affiliated Person are deemed to have been conducted directly between the foreign corporation and the affiliated person and the provisions of item (iii), (a) of the preceding paragraph are applied, except in the case where there are justifiable grounds for having the Non-Affiliated Person intervene in the transactions.

(9)The affiliated person prescribed in paragraph (7), item (iii), (a) and the preceding paragraph is that listed as follows:

(10)The relationship specified by Cabinet Order prescribed in Article 68-2-3, paragraph (5), item (ii) of the Act is the relationship listed as follows:

(11)Whether or not there is any relationship listed in the items of the preceding paragraph is determined according to its status immediately prior to a merger, company split or share exchange set forth in Article 68-2-3, paragraphs (1) to (3) of the Act.

(12)The provisions of Article 39-12, paragraph (2) and paragraph (3) apply mutatis mutandis where the provisions of paragraph (9) or paragraph (10) apply.In this case the term "50 percent or more" in paragraph (2) and paragraph (3) of the same Article is deemed to be replaced with "over 50 percent".

(13)A nonresident who has a special relationship specified by Cabinet Order prescribed in Article 68-2-3, paragraph (5), item (iii) of the Act is a nonresident prescribed in Article 2, paragraph (1), item (i)-2 of the Act who has a special relationship prescribed in Article 39-14, paragraph (3) with a resident or domestic corporation prescribed in the same item.

(14)The relationship specified by Cabinet Order prescribed in Article 68-2-3, paragraph (5), item (iv) of the Act is the relationship listed as follows:

(15)The provisions of Article 39-12, paragraph (2) and paragraph (3) apply mutatis mutandis where the provisions of the preceding paragraph apply.In this case the term "50 percent or more" in paragraph (2) and paragraph (3) of the same Article is replaced with "80 percent or more".

(16)Particulars concerning the determination as to whether or not the merger, company split or share exchange satisfies the requirements listed in the items of paragraph (1), the items of paragraph (2) or the items of paragraph (3) and any other particulars necessary for the application of the provisions of the preceding items are specified by Ministry of Finance Order.

Article 39-35(1)The provisions of Article 119-7-2, paragraph (1) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis to the relationship specified by Cabinet Order prescribed in Article 68-3, paragraph (1) of the Act; and the provisions of Article 119-7-2, paragraph (3) of the same Order apply mutatis mutandis to the relationship specified by Cabinet Order prescribed in Article 68-3, paragraph (3) of the Act, respectively.

(2)Where a corporation has, as a result of a merger (limited to a merger that does not fall under the category of a qualified merger) of a domestic corporation to which the corporation issued old shares (meaning shares (including capital contributions; hereinafter the same applies in this Article) that were held by the corporation), been provided with shares of a foreign corporation which has a relationship specified by Cabinet Order prescribed in Article 68-3, paragraph (1) of the Act, when the shares of the foreign corporation are shares of a specified foreign corporation with less tax burden (meaning a specified foreign corporation with less tax burden prescribed in Article 68-2-3, paragraph (5), item (i) of the Act; hereinafter the same applies in paragraph (4)), the provisions of Article 119, paragraph (1), item (v) of the Order for Enforcement of the Corporation Tax Act (including the cases where it is applicable to the calculation made pursuant to the provisions of Article 142 of the Corporation Tax Act) do not apply to the acquisition costs of the provided shares.

(3)Where a corporation has, as a result of a specified split-off-type company split prescribed in Article 68-3, paragraph (2) of the Act which was implemented by a domestic corporation to which the corporation issued old shares (meaning shares that were held by the corporation), been provided with shares of a specified foreign parent corporation prescribed in the same paragraph, the provisions of Article 119, paragraph (1), item (vi) of the Order for Enforcement of the Corporation Tax Act (including the cases where it is applicable to the calculation made pursuant to the provisions of Article 142 of the Corporation Tax Act) do not apply to the acquisition costs of the provided shares.

(4)Where a corporation has, as a result of a share exchange (limited to a share exchange that does not fall under the category of a qualified share exchange) implemented by a domestic corporation to which the corporation issued old shares (meaning shares that were held by the corporation), been provided with shares of a foreign corporation which has a relationship specified by Cabinet Order prescribed in Article 68-3, paragraph (3) of the Act, when the shares of the foreign corporation are shares of a specified foreign corporation with less tax burden, the provisions of Article 119, paragraph (1), item (viii) of the Order for Enforcement of the Corporation Tax Act (including the cases where it is applicable to the calculation made pursuant to the provisions of Article 142 of the Corporation Tax Act) do not apply to the acquisition costs of the provided shares.

(5)Where a foreign corporation has, as a result of a specified split-off-type company split prescribed in Article 68-3, paragraph (2) of the Act which was implemented by a domestic corporation to which the corporation issued old shares (meaning shares that were held by the corporation), been provided with shares of a specified foreign parent corporation prescribed in the same paragraph, the provisions of Article 188, paragraph (1), item (xvii) of the Order for Enforcement of the Corporation Tax Act do not apply to the calculation made, with regard to the amount of the foreign corporation's income categorized as domestic source income prescribed in Article 142 of the Corporation Tax Act, in accordance with the provisions of Article 61-2, paragraph (4) of the same Act in which the terms and phrases are replaced pursuant to the provisions of the same paragraph.

(8)With regard to the application of the provisions of Article 73, paragraph (2) and Article 77-2, paragraph (2) of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 68-3-2, paragraph (1) of the Act apply, the term "without applying the following provisions" in these provisions is deemed to be replaced with "without applying the following provisions and the provisions of Article 68-3-2, paragraph (1) (Special Provisions for Taxation on Trust Corporations for Special Purpose Trusts) of the Act on Special Measures Concerning Taxation".

(9)The provisions of paragraph (1) to the preceding paragraph apply mutatis mutandis when applying the provisions of Article 68-3-2, paragraphs (1) to (3), paragraph (7) and paragraph (8) of the Act which apply mutatis mutandis pursuant to paragraph (9) of the same Article.In this case, the terms listed in the middle column of the following table which are used in the provisions listed in the left-hand column of the same table are deemed to be replaced with the terms listed in the right-hand column of the same table.

(10)The amount of foreign corporation tax prescribed in Article 68-3-2, paragraph (4) of the Act that is to be credited under the same paragraph (hereinafter referred to as the "Amount of Creditable Foreign Corporation Tax" in this Article) is the sum of the amounts that remain after deducting, from the amounts specified in the following items for the persons listed in the respective items, the amount of a distribution of profit (meaning the amount of a distribution of profit prescribed in Article 68-3-2, paragraph (1) of the Act; hereinafter the same applies in this Article) of special purpose trusts pertaining to the Amount of Creditable Foreign Corporation Tax that these persons are to receive (where the sum of the amounts exceeds the amount of foreign corporation tax prescribed in Article 68-3-2, paragraph (4) of the Act that a trust corporation for special purpose trusts has paid, the amount of the paid foreign corporation tax):

(11)When a trust corporation for special purpose trusts collects income tax on the amount of a distribution of profit (limited to the amount pertaining to the business year for which it is to pay the Amount of Creditable Foreign Corporation Tax) pursuant to the provisions of Article 181 or Article 212 of the Income Tax Act, the Amount of Creditable Foreign Corporation Tax is to be credited against the amount of income tax that it is to collect and pay.

(12)Where the provisions of Article 68-3-2, paragraph (4) of the Act have applied to the amount of a distribution of profit of special purpose trusts that an individual or a corporation is to receive, the Amount of Creditable Foreign Corporation Tax pertaining to the amount of distribution of profit is to be added to the amount of distribution of profit that these persons are to receive.

(13)A trust corporation for special purpose trusts, which was subject to the provisions of Article 68-3-2, paragraph (4) of the Act, must preserve a document certifying that the amount of foreign corporation tax prescribed in the same paragraph has been imposed and other documents specified by Ministry of Finance Order, as specified by Ministry of Finance Order.

(14)With regard to the application of the provisions of Article 68-3-2, paragraph (10) of the Act in the case where the amount of the distribution of profit from a foreign special purpose trust prescribed in Article 68-3-2, paragraph (10) of the Act is received from a specified foreign subsidiary company, etc. prescribed in Article 66-6, paragraph (1) of the Act (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act) or a specified foreign corporation prescribed in Article 66-9-2, paragraph (1) of the Act (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act), in Article 68-3-2, paragraph (10) of the Act, the phrase "referred to in the following paragraph" is deemed to be replaced with "hereinafter referred to in this paragraph and the following paragraph", and the phrase "as "amount of the distribution of profit from a foreign special purpose trust") is deemed to be excluded .... prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act" is deemed to be replaced with "as "amount of the distribution of profit from a foreign special purpose trust") (excluding the amount of the distribution of profit from a foreign special purpose trust to be received from a specified foreign subsidiary company, etc. prescribed in Article 66-6, paragraph (1) (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act) or a specified foreign corporation prescribed in Article 66-9-2, paragraph (1) (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the same Act) (limited to the amount up to the specified taxable income prescribed in Article 66-8, paragraph (3) or the amount up to the specified taxable income prescribed in Article 66-9-4, paragraph (3))) is deemed to be excluded .... prescribed in Article 23-2, paragraph (1) of the same Act".

(7)With regard to the application of the provisions of Article 73, paragraph (2) and Article 77-2, paragraph (2) of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 68-3-3, paragraph (1) of the Act apply, the term "without applying the following provisions" in these provisions is deemed to be replaced with "without applying the following provisions and the provisions of Article 68-3-3, paragraph (1) (Special Provisions for Taxation on Trust Corporations of Special Investment Trusts) of the Act on Special Measures Concerning Taxation".

(8)The provisions of paragraph (1) to the preceding paragraph apply mutatis mutandis when applying the provisions of Article 68-3-3, paragraphs (1) to (3), paragraph (7) and paragraph (8) of the Act which apply mutatis mutandis pursuant to paragraph (9) of the same Article.In this case, the terms listed in the middle column of the following table which are used in the provisions listed in the left-hand column of the same table is deemed to be replaced with the terms listed in the right-hand column of the same table.

(9)The amount of foreign corporation tax prescribed in Article 68-3-3, paragraph (4) of the Act that is to be credited under the same paragraph (hereinafter referred to as the "Amount of Creditable Foreign Corporation Tax" in this Article) is the sum of the amounts that remain after deducting, from the amount specified respectively in the following items for persons listed in the relevant items, the amount of a distribution of proceeds (meaning the amount of a distribution of proceeds prescribed in Article 68-3-3, paragraph (1) of the Act; hereinafter the same applies in this Article) of special investment trusts pertaining to the Amount of Creditable Foreign Corporation Tax that these persons are to receive (where the sum of the amounts exceeds the amount of foreign corporation tax prescribed in Article 68-3-3, paragraph (4) of the Act that a trust corporation for special investment trusts has paid, the amount of the paid foreign corporation tax):

(10)When a trust corporation for special investment trusts collects income tax on the amount of a distribution of proceeds (limited to the amount pertaining to the business year for which it is to pay the Amount of Creditable Foreign Corporation Tax) pursuant to the provisions of Article 181 or Article 212 of the Income Tax Act, the Amount of Creditable Foreign Corporation Tax is to be credited against the amount of income tax that it is to collect and pay.

(11)Where the provisions of Article 68-3-3, paragraph (4) of the Act has applied to the amount of a distribution of proceeds of special investment trusts that an individual or a corporation is to receive, the Amount of Creditable Foreign Corporation Tax pertaining to the amount of distribution of proceeds is to be added to the amount of distribution of proceeds that these persons are to receive.

(12)A trust corporation for special investment trusts, which was subject to the provisions of Article 68-3-3, paragraph (4) of the Act, must preserve a document certifying that the amount of foreign corporation tax prescribed in the same paragraph has been imposed and other documents specified by Ministry of Finance Order, as specified by Ministry of Finance Order.

(13)With regard to the application of the provisions of Article 68-3-3, paragraph (10) of the Act in the case where the amount of the distribution of profit from a foreign special investment trust prescribed in Article 68-3-3, paragraph (10) of the Act is received from a specified foreign subsidiary company, etc. prescribed in Article 66-6, paragraph (1) of the Act (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act) or a specified foreign corporation prescribed in Article 66-9-2, paragraph (1) of the Act (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act), in Article 68-3-3, paragraph (10) of the Act, the phrase "referred to in the following paragraph" is deemed to be replaced with "hereinafter referred to in this paragraph and the following paragraph", and the phrase "as "amount of the distribution of profit from a foreign special investment trust") is deemed to be excluded .... prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act" is deemed to be replaced with "as "amount of the distribution of profit from a foreign special investment trust") (excluding the amount of the distribution of profit from a foreign special investment trust to be received from a specified foreign subsidiary company, etc. prescribed in Article 66-6, paragraph (1) (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act) or a specified foreign corporation prescribed in Article 66-9-2, paragraph (1) (limited to the one that falls under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the same Act) (limited to the amount up to the specified taxable income prescribed in Article 66-8, paragraph (3) or the amount up to the specified taxable income prescribed in Article 66-9-4, paragraph (3))) is deemed to be excluded .... prescribed in Article 23-2, paragraph (1) of the same Act".

Article 39-112(1)The special relationship specified by Cabinet Order prescribed in Article 68-88, paragraph (1) of the Act is the relationship listed as follows:

(2)In the case referred to in item (i) of the preceding paragraph, whether or not one of those two corporations directly or indirectly holds 50 percent or more of the number or the amount of the other corporation's Issued Shares, etc. is to be determined according to the ratio obtained by adding the ownership ratio for the shares, etc. pertaining to the relevant other corporation held directly by the relevant one of the two corporations (meaning the ratio of the number or the amount of the relevant other corporation's shares or capital contributions held by the relevant one of the two corporations out of the total Issued Shares, etc. of the relevant other corporation) and the ownership ratio for the shares, etc. pertaining to the relevant other corporation held indirectly by the relevant one of the two corporations.

(3)The ownership ratio for the shares, etc. held indirectly that is prescribed in the preceding paragraph is the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows):

(4)The provisions of paragraph (2) apply mutatis mutandis to the determination of a relationship whereby the shares, etc. are directly or indirectly held as set forth in item (ii), item (iv) and item (v) of paragraph (1).

(5)The normal profit margin specified by Cabinet Order prescribed in Article 68-88, paragraph (2), item (i), (b) of the Act is the ratio of the amount of gross profits gained by a person who purchased the same or similar inventory assets as those for a foreign affiliated transaction prescribed in paragraph (1) of the same Article (hereinafter referred to as a "Foreign Affiliated Transaction" in this Article) from a person who is not in a special relationship (meaning a special relationship prescribed in the same paragraph) (hereinafter the person who is not in the special relationship is referred to as a "Non-Affiliated Person" through to paragraph (7) and the person who purchased the inventory assets is referred to as a "Reseller" in this paragraph and paragraph (7), item (ii)) through a transaction to sell the same or similar inventory assets to a Non-Affiliated Person (hereinafter referred to as a "Comparable Transaction" in this paragraph) (the amount of gross profits means the amount obtained by deducting the sum of the costs of the inventory assets for a Comparable Transaction from the total revenue arising from the sale of the inventory assets for a Comparable Transaction) against the sum of the revenue; provided, however, that where functions performed by the selling side or any other particulars differ between a Comparable Transaction and a transaction in which the purchasing side of the inventory assets for a Foreign Affiliated Transaction sold the inventory assets to a Non-Affiliated Person, the normal profit margin is the ratio after making the necessary adjustment for the differences in ratios caused by the disparity.

(6)The normal profit margin specified by Cabinet Order prescribed in Article 68-88, paragraph (2), item (i), (c) of the Act is the ratio of the amount of gross profits gained by a person who acquired the same or similar inventory assets as those for a Foreign Affiliated Transaction through the purchase (limited to a purchase from a Non-Affiliated Person), manufacture or any other acts (hereinafter that person is referred to as a "seller" in this paragraph and item (iii) of the following paragraph) through a transaction to sell the same or similar inventory assets to a Non-Affiliated Person (hereinafter referred to as a "Comparable Transaction" in this paragraph) (the amount of gross profits means the amount obtained by deducting the sum of the costs of the inventory assets for a Comparable Transaction from the total revenue arising from the sale of the inventory assets for a Comparable Transaction) against the sum of the costs; provided, however, that where functions performed by the selling side or any other particulars differ between a Comparable Transaction and the Foreign Affiliated Transaction, the normal profit margin is the ratio after making a necessary adjustment for the differences in ratios caused by the disparity.

(7)The method specified by Cabinet Order prescribed in Article 68-88, paragraph (2), item (i), (d) of the Act is the method listed as follows:

(8)The case specified by Cabinet Order prescribed in Article 68-88, paragraph (5) of the Act is the case where it has been determined in advance at the time of a transaction between a consolidated corporation set forth in the same paragraph and a non-affiliated person set forth in the same paragraph (hereinafter referred to as a "Non-Affiliated Person" in this paragraph and the following paragraph), under a contract or the like, that the assets for the transaction are to be sold, transferred, lent or provided to a foreign affiliated person related to the consolidated corporation set forth in paragraph (5) of the same Article and where the amount of consideration for the sale, transfer, lending or provision is deemed to have been substantially determined between the consolidated corporation and the foreign affiliated person, and the case where it has been determined in advance at the time of a transaction between a foreign affiliated person related to the consolidated corporation set forth in the same paragraph and a Non-Affiliated Person, under a contract or the like, that the assets for the transaction are to be sold, transferred, lent or provided to a consolidated corporation set forth in the same paragraph and where the amount of consideration for the sale, transfer, lending or provision is deemed to have been substantially determined between the consolidated corporation and the foreign affiliated person.

(9)Notwithstanding the provisions of Article 68-88, paragraph (2) of the Act, the arm's length price prescribed in paragraph (1) of the same Article for a transaction that was deemed to be a Foreign Affiliated Transaction under the provisions of paragraph (5) of the same Article is the amount calculated by applying the provisions of paragraph (2) of the same Article by deeming that the transaction has been conducted between a consolidated corporation set forth in the preceding paragraph and a foreign affiliated person related to the consolidated corporation set forth in the same paragraph and by making a necessary adjustment with regard to the differences in the amount of consideration caused when a transaction between the consolidated corporation and the foreign affiliated person is conducted via a Non-Affiliated Person.

(10)The gross profit margin prescribed in Article 68-88, paragraph (6), item (i) of the Act or any other ratio specified by Cabinet Order as a ratio equivalent thereto is the ratio of the amount of gross profits gained by a corporation which is engaged in the same type of business and whose size and other details are similar as prescribed in the same item through the business for a business year containing the day on which a Foreign Affiliated Transaction set forth in the same item was conducted or for any other period equivalent thereto (that amount of gross profits means the amount obtained by deducting the sum of the costs of inventory assets for the relevant business year or any other period equivalent thereto (where the business is other than that pertaining to the sale of inventory assets, the sum of equivalent costs or expenses; hereinafter referred to as the "Amount of Gross Costs" in this paragraph) from the total revenue arising from the sale of the inventory assets (where the business is other than that pertaining to the sale of inventory assets, the total revenue pertaining to the business; hereinafter referred to as the "Amount of Gross Revenue" in this paragraph)) against the Amount of Gross Revenue or Gross Costs.

(11)The method specified by Cabinet Order as the method similar to the method specified by Cabinet Order prescribed in Article 68-88, paragraph (2), item (i), (d) of the Act or the method listed in paragraph (2), item (ii), (b) of the same Article (limited to the method equal to that specified by the same Cabinet Order) as prescribed in paragraph (6), item (ii) of the same Article is the method listed in items (i) to (iv), in the case where a Foreign Affiliated Transaction is for the sale or purchase of inventory assets, and the method listed in item (i) or item (v), in the case where a Foreign Affiliated Transaction is for other than the sale or purchase of inventory assets:

(12)The requirements specified by Cabinet Order prescribed in Article 68-88, paragraph (19) of the Act are the requirements listed as follows:

(13)The delinquent tax imposed with regard to the corporation tax payable as prescribed in Article 68-88, paragraph (19) of the Act is the delinquent tax to be imposed on the amount obtained by deducting the amount equivalent to the corporation tax payable where the provisions of paragraph (1) of the same Article do not apply from the corporation tax payable where the provisions of the same paragraph apply.

(14)Where the provisions of Article 68-88, paragraph (1), paragraph (2), item (i), (a) or (b), or paragraph (5) of the Act or the provisions of paragraph (5) apply, the existence or not of any special relationship prescribed in these provisions is to be determined according to its status at the time when respective transactions were conducted.

(15)With respect to the application of Article 155-16 of the Order for Enforcement of the Corporation Tax Act where the provisions of Article 68-88, paragraph (3) of the Act apply, the term "Article 81-6, paragraph (1) or paragraph (2) (Calculation of the Amount of Contributions Expended by Consolidated Corporations to Be Excluded from Deductible Expenses) of the Act" in the same Article is deemed to be replaced with "Article 81-6, paragraph (1) or paragraph (2) (Calculation of the Amount of Contributions Expended by Consolidated Corporations to Be Excluded from Deductible Expenses) of the Act or Article 68-88, paragraph (3) (Special Provisions for Taxation on Transactions of Consolidated Corporations with Foreign Affiliated Persons) of the Act on Special Measures Concerning Taxation"; and the term "Article 81-6, paragraph (2) of the Act" in item (ii) of the same Article is deemed to be replaced with "Article 81-6, paragraph (2) of the Act or Article 68-88, paragraph (3) of the Act on Special Measures Concerning Taxation".

Article 39-112-2(1)The amount calculated as specified by Cabinet Order as the amount of corporation tax and additional tax for the corporation tax prescribed in Article 68-88-2, paragraph (1) of the Act is the sum of the amounts listed as follows:

(2)The case where there is no agreement prescribed in Article 68-88-2, paragraph (1) of the Act or any other case specified by Cabinet Order is the case listed respectively in the following items and the date specified by Cabinet Order prescribed in the same paragraph is the date on which the Commissioner of the National Tax Agency notified the fact that the case falls under any of those set forth in the relevant items:

(3)A person intending to receive a grace of tax payment under the provisions of Article 68-88-2, paragraph (1) of the Act must submit a written application containing the particulars listed as follows along with a document certifying that they have filed an objection set forth in the same paragraph and other documents specified by Ministry of Finance Order to the district director, etc. prescribed in Article 46, paragraph (1) of the Act on General Rules for National Taxes:

(4)With respect to the application of the provisions of Article 23, paragraph (1) of the Order for Enforcement of the Act on General Rules for National Taxes, regarding the corporation tax for which a grace of tax payment has been received pursuant to the provisions of Article 68-88-2, paragraph (1) of the Act, the term "or national tax" in Article 23, paragraph (1) of the same Order is deemed to be replaced with "(including a grace of tax payment under the provisions of Article 68-88-2, paragraph (1) (Grace of Tax Payment under the Special Provisions for Taxation on Transactions of Consolidated Corporations with Foreign Affiliated Persons) of the Act on Special Measures Concerning Taxation) or national tax".

Article 39-113(1)The amount calculated as specified by Cabinet Order as the amount equivalent to the excess part prescribed in Article 68-89, paragraph (1) of the Act is the amount specified respectively in the following items for the category of cases listed in the relevant items:

(2)With respect to the application of the provisions of the preceding paragraph where the amount that remains after deducting the amount obtained by multiplying the amount of equity capital (meaning the amount of equity capital prescribed in Article 68-89, paragraph (4), item (vii) of the Act; hereinafter the same applies in this Article) for the relevant consolidated business year of the consolidated corporation by three from the average balance of liabilities regarding the total liabilities prescribed in Article 68-89, paragraph (1) of the Act for the relevant consolidated business year of the consolidated corporation is less than the amount exceeding the average balance of liabilities for the relevant consolidated business year of the consolidated corporation, in item (i) of the preceding paragraph, the term "the amount that remains after deducting the amount listed in (b) from the amount listed in (a) is equivalent to or less than the amount listed in (c)" is deemed to be replaced with "the amount that remains after deducting the amount obtained by multiplying the amount of equity capital prescribed in Article 68-89, paragraph (4), item (vii) of the Act for the relevant consolidated business year of the consolidated corporation by three from the average balance of liabilities regarding the total liabilities prescribed in Article 68-89, paragraph (1) of the Act for the relevant consolidated business year of the consolidated corporation (hereinafter the remaining amount is referred to as "the amount exceeding the average balance of the total liabilities" in this paragraph) is equivalent to or less than the amount listed in (c)"; the term "Article 68-89, paragraph (4), item (i) of the Act" is deemed to be replaced with "paragraph (4), item (i) of the same Article"; and the term "amount that remains after deducting the amount listed in (c) from the amount listed in (a) (the remaining amount is referred to as the "amount exceeding the average balance of liabilities" in the following item and the following paragraph)" is deemed to be replaced with "the amount exceeding the average balance of the total liabilities"; and in item (ii) of the same paragraph, the term "the amount that remains after deducting the amount listed in (b) from the amount listed in (a) of the preceding item exceeds the amount listed in (c)" is deemed to be replaced with "the amount exceeding the average balance of the total liabilities exceeds the amount listed in (c)"; and the term "the amount exceeding the average balance of liabilities" is deemed to be replaced with "the amount exceeding the average balance of the total liabilities".

(3)Where the provisions of Article 68-89, paragraph (1) of the Act apply, the amount of interest on liabilities, etc. to be paid by a consolidated corporation prescribed in the same paragraph to the foreign controlling shareholder, etc. and fund provider, etc. for the relevant consolidated business year is to be based on the amount posted by the consolidated corporation as an expense for the relevant consolidated business year.

(4)With respect to the application of the provisions of Article 68-89, paragraph (1) of the Act where there are two or more foreign controlling shareholders, etc. related to the consolidated corporation, the average balance of liabilities regarding the liabilities owed to foreign controlling shareholders, etc. and fund providers, etc., equity interest held by foreign controlling shareholders, etc. and the amount of interest on liabilities, etc. to be paid to foreign controlling shareholders, etc. and fund providers, etc. are to be based on the sum of the average balance of liabilities regarding the liabilities owed to foreign controlling shareholders, etc. and fund providers, etc., equity interest held by foreign controlling shareholders, etc. and the amount of interest on liabilities, etc. to be paid to foreign controlling shareholders, etc. and fund providers, etc., respectively.

(5)The average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. which is calculated as specified by Cabinet Order and is to be deducted from the average balance of liabilities regarding the liabilities owed to a foreign controlling shareholder, etc. and a fund provider, etc. prescribed in Article 68-89, paragraph (2) of the Act is the average balance of liabilities regarding the liabilities owed to a foreign controlling shareholder, etc. and a fund provider, etc. related to the consolidated corporation which pertain to a specified bond transaction with a repurchase/resale agreement, etc. (meaning a specified bond transaction with a repurchase/resale agreement, etc. prescribed in Article 68-89, paragraph (4), item (viii) of the Act; the same applies in the following paragraph and paragraph (8)) (where the average balance of liabilities exceeds the average balance of assets regarding assets pertaining to a specified bond transaction with a repurchase/resale agreement, etc. (the average balance of assets means the amount calculated by a reasonable method as the average balance of the assets' book value for the relevant consolidated business year; the same applies in the following paragraph), that calculated average balance of liabilities is the average balance of assets; that average balance of assets is referred to as the "average balance of liabilities after adjustment" in paragraph (8)).

(6)The average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. which is calculated as specified by Cabinet Order and is to be deducted from the average balance of liabilities regarding the total liabilities for the relevant consolidated business year prescribed in Article 68-89, paragraph (2) of the Act is the average balance of liabilities regarding the total liabilities for the relevant consolidated business year (limited to those which are to be the cause of payment of interest on liabilities, etc.; the same applies in paragraph (10)) which pertain to a specified bond transaction with a repurchase/resale agreement, etc. (where the average balance of liabilities exceeds the average balance of assets regarding assets pertaining to a specified bond transaction with a repurchase/resale agreement, etc., that calculated average balance of liabilities is the average balance of assets).

(7)The multiple number applicable to the equity interest held by a foreign controlling shareholder, etc. which is calculated as specified by Cabinet Order prescribed in Article 68-89, paragraph (2) of the Act is the multiple number obtained by calculating the average balance of liabilities by deducting the average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. calculated as specified by Cabinet Order prescribed in the same paragraph from the average balance of liabilities regarding the liabilities owed to a foreign controlling shareholder, etc. and a fund provider, etc. prescribed in the same paragraph and then dividing the calculated average balance of liabilities by the equity interest held by the foreign controlling shareholder, etc. related to the consolidated corporation; and the multiple number applicable to the amount of equity capital which is calculated as specified by Cabinet Order prescribed in the same paragraph is the multiple number obtained by calculating the average balance of liabilities by deducting the average balance of liabilities pertaining to a specified bond transaction with a repurchase/resale agreement, etc. calculated as specified by Cabinet Order prescribed in the same paragraph from the average balance of liabilities regarding the total liabilities for the relevant consolidated business year prescribed in the same paragraph and then dividing the calculated average balance of liabilities by the amount of equity capital of the consolidated corporation.

(8)The amount of interest on liabilities, etc. pertaining to a specified bond transaction with a repurchase/resale agreement, etc. which is calculated as specified by Cabinet Order and is to be deducted from the amount of interest on liabilities, etc. to be paid to a foreign controlling shareholder, etc. and a fund provider, etc. prescribed in Article 68-89, paragraph (2) of the Act is the amount obtained by multiplying the amount of interest on liabilities, etc. to be paid to a foreign controlling shareholder, etc. and a fund provider, etc. related to the consolidated corporation which pertain to a specified bond transaction with a repurchase/resale agreement, etc. by the ratio obtained by dividing the average balance of liabilities after adjustment by the average balance of liabilities regarding the liabilities pertaining to the specified bond transaction with a repurchase/resale agreement, etc.

(9)With respect to the application of the provisions of paragraphs (1) to (4) in the case where the provisions of Article 68-89, paragraph (2) of the Act is applied, the term "and then multiplying the amount of expenses by the ratio" in paragraph (1), item (i) is deemed to be replaced with ", then deducting the amount obtained by multiplying the part of the amount of expenses that pertains to a specified bond transaction with a repurchase/resale agreement, etc. (meaning a specified bond transaction with a repurchase/resale agreement, etc. prescribed in Article 68-89, paragraph (4), item (viii) of the Act; hereinafter the same applies in this item) by the ratio obtained by dividing the average balance of liabilities after adjustment (meaning the average balance of liabilities after adjustment prescribed in paragraph (5); hereinafter the same applies in this item) regarding the liabilities for the amount by the average balance of liabilities regarding the liabilities for the amount which pertains to a specified bond transaction with a repurchase/resale agreement, etc., and then multiplying the amount that remains after deduction by the ratio"; the term "The average balance of liabilities (meaning the average balance of liabilities prescribed in item (v) of the same paragraph; hereinafter the same applies in this Article)" in (a) of paragraph (1), item (i) is deemed to be replaced with "The amount that remains after deducting the average balance of liabilities after adjustment from the average balance of liabilities"; the term "The average balance of liabilities" in (b) of the same item is deemed to be replaced with "The amount that remains after deducting the average balance of liabilities after adjustment regarding the liabilities from the average balance of liabilities"; the term "three" in (c) of the same item is deemed to be replaced with "two"; the term "The amount obtained by deducting the amount of guarantee charge, etc. for the taxable income" in (a) of paragraph (1), item (ii) is deemed to be replaced with "The amount obtained by deducting the sum of the amount of interest on liabilities, etc. pertaining to a specified bond transaction with a repurchase/resale agreement, etc. prescribed in paragraph (2) of the same Article and the amount of guarantee charge, etc. for the taxable income"; the term "where the amount that remains after deducting the amount" in paragraph (2) is deemed to be replaced with "where the amount that remains after deducting the sum of the average balance of liabilities regarding the average balance of liabilities which pertain to a specified bond transaction with a repurchase/resale agreement, etc. prescribed in paragraph (6) and the amount"; and the term "by three" in the same paragraph is deemed to be replaced with "by two".

(10)The percentage specified by Cabinet Order prescribed in Article 68-89, paragraph (3) of the Act is the percentage of the amount of the total liabilities of a domestic corporation whose business size set forth in paragraph (3) of the same Article and other details are similar to those of a consolidated corporation which seeks the application of the provisions of the same paragraph (hereinafter referred to as an "Applicable Corporation" in this paragraph) on the final day of any of the domestic corporation's relevant business years or consolidated business years that ended within three years until the final day of the Applicable Corporation's relevant consolidated business year (where the Applicable Corporation receives the application of the provisions of paragraph (2) of the same Article, the percentage of the remaining amount of the total liabilities after deducting the amount specified by Ministry of Finance Order) against the sum of the amounts of stated capital, statutory reserve, and surplus on the same day.In this case, where there are any fractions after two decimal places, they are to be rounded up.

(11)The special relationship specified by Cabinet Order prescribed in Article 68-89, paragraph (4), item (i) of the Act is the relationship listed as follows:

(12)The provisions of Article 39-112, paragraph (2) and paragraph (3) apply mutatis mutandis to the determination as to whether or not 50 percent or more of the Issued Shares, etc. set forth in item (i) and item (ii) of the preceding paragraph are held directly or indirectly.

(13)A person who provides a consolidated corporation with funds and a person specified by Cabinet Order as being related to the provision of funds as prescribed in Article 68-89, paragraph (4), item (ii) of the Act is any of the following:

(14)The expense specified by Cabinet Order prescribed in Article 68-89, paragraph (4), item (iii) of the Act is the expense listed as follows:

(15)The liabilities specified by Cabinet Order prescribed in Article 68-89, paragraph (4), item (iv) of the Act are the liabilities set forth in the items of paragraph (13) in the cases prescribed in the relevant items.

(16)The amount calculated as specified by Cabinet Order as the average amount of liabilities prescribed in Article 68-89, paragraph (4), item (v) of the Act is the amount calculated by a reasonable method as the average balance of the book value of the liabilities for the relevant consolidated business year.

(17)The amount calculated as specified by Cabinet Order as the interest on a consolidated corporation's net assets held by a foreign controlling shareholder, etc. as prescribed in Article 68-89, paragraph (4), item (vi) of the Act is the amount obtained by multiplying the amount of equity capital for the relevant consolidated business year of the consolidated corporation by the ratio of the Shares, etc. regarding the consolidated corporation held directly or indirectly by a foreign controlling shareholder, etc. on the final day of the relevant consolidated business year out of the consolidated corporation's Issued Shares, etc.

(18)The Shares, etc. held directly or indirectly as prescribed in the preceding paragraph are the total number or the sum of the consolidated corporation's Shares, etc. held directly by a foreign controlling shareholder, etc. related to the consolidated corporation and the consolidated corporation's Shares, etc. held indirectly by the foreign controlling shareholder, etc. (meaning the Shares, etc. calculated by multiplying the consolidated corporation's Issued Shares, etc. by the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)):

(19)Where the consolidated corporation and a foreign controlling shareholder, etc. related to the consolidated corporation are in a relationship listed in paragraph (11), item (ii), when the same person prescribed in the same item is a resident or any other domestic corporation prescribed in Article 2, paragraph (1), item (i)-2 of the Act, the provisions of the preceding two paragraphs are to be applied by deeming the same person to be a foreign controlling shareholder, etc. related to the consolidated corporation.

(20)The amount calculated as specified by Cabinet Order as the amount of net assets prescribed in Article 68-89, paragraph (4), item (vii) of the Act is the amount that remains after deducting the amount listed in item (ii) from the amount listed in item (i) (where the remaining amount is less than the amount of consolidated individual stated capital, etc. prescribed in Article 2, item (xvii)-2 of the Corporation Tax Act on the final day of the relevant consolidated business year of the consolidated corporation (where the amount of consolidated individual stated capital, etc. is less than the amount of stated capital or capital contributions, the amount of stated capital or capital contributions; hereinafter referred to as the "Amount of Consolidated Individual Stated Capital, etc." in this paragraph and paragraph (22)), that calculated amount is the Amount of Consolidated Individual Stated Capital, etc.):

(21)The book value set forth in paragraph (5) and paragraph (16) and the preceding paragraph is to be based on the amount of assets or liabilities that the domestic corporation entered in its accounting books.

(22)Where any other domestic corporation which is a shareholder, etc. of the consolidated corporation or a capital contribution-related domestic corporation (meaning a single domestic corporation or two or more domestic corporations which have a linkage with the consolidated corporation and the relevant other domestic corporation through holding the Shares, etc.; the same applies in the following paragraph) intervenes between the consolidated corporation and a foreign controlling shareholder, etc. related to the consolidated corporation, when the amount obtained by multiplying the amount of consolidated individual stated capital, etc. on the final day of the relevant consolidated business year of the consolidated corporation by the ratio of shareholding pertaining to the consolidated corporation of the relevant other domestic corporation or capital contribution-related domestic corporation exceeds the amount of stated capital, etc. prescribed in Article 39-13, paragraph (22) of the relevant other domestic corporation or capital contribution-related domestic corporation on the same day (for a corporation falling under the category of a corporation subject to corporation tax on consolidated income prescribed in Article 2, item (xvi) of the Corporation Tax Act, when the amount exceeds the amount of consolidated individual stated capital, etc.), the amount of equity capital pertaining to the consolidated corporation is the amount that remains after deducting from the amount of equity capital, either of the smaller amount of the excess amount or the amount of the liabilities owed by the relevant other domestic corporation or capital contribution-related domestic corporation to a foreign controlling shareholder, etc. and a fund provider, etc. related to the consolidated corporation on the same day (referred to as the " deductible amount" in the following paragraph).

(23)In the case prescribed in the preceding paragraph, when deeming a capital contribution-related domestic corporation set forth in the same paragraph to be the consolidated corporation set forth in the same paragraph and if there is any deductible amount pertaining to the capital contribution-related domestic corporation, the amount of stated capital, etc. set forth in the same paragraph of the capital contribution-related domestic corporation is the amount that remains after deducting the deductible amount from the amount of stated capital, etc.; and the amount of the liabilities owed by the capital contribution-related domestic corporation to a foreign controlling shareholder, etc. and a fund provider, etc. set forth in the same paragraph is the amount obtained by adding the amount of the liabilities owed to the foreign controlling shareholder, etc. and fund provider, etc. and the deductible amount.

(24)With respect to the application of the provisions of Article 155-8 of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 68-89, paragraph (1) of the Act apply, the term "the sum of the amount of interest on liabilities prescribed in the same paragraph to be paid for the relevant business year" in Article 155-8, paragraph (1) of the same Order is deemed to be replaced with "the sum of the amount of interest on liabilities prescribed in the same paragraph to be paid for the relevant business year (where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 68-89, paragraph (1) (Special Provisions for Taxation on Interest on Liabilities Payable by Consolidated Corporations to Foreign Controlling Shareholders) of the Act on Special Measures Concerning Taxation, the sum is the amount that remains after deducting the amount)"; the term "the sum of the amount of interest on liabilities that a domestic corporation set forth in the same paragraph pays for the business year set forth in the same paragraph" in paragraph (2) of the same Article is deemed to be replaced with "the sum of the amount of interest on liabilities that a domestic corporation set forth in the same paragraph pays for the business year set forth in the same paragraph (where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 68-89, paragraph (1) (Special Provisions for Taxation on Interest on Liabilities Payable by Consolidated Corporations to Foreign Controlling Shareholders) of the Act on Special Measures Concerning Taxation, the sum is the amount that remains after deducting the amount)"; the term "the amount listed in item (i)" in paragraph (1) and paragraph (2) of the same Article is deemed to be replaced with "the amount listed in item (i) (where there is any amount that is not included in deductible expenses pursuant to the provisions of Article 68-89, paragraph (1) of the Act on Special Measures Concerning Taxation, that amount is the amount that remains after deducting the amount equivalent to the amount exceeding the average balance of liabilities prescribed in Article 39-113, paragraph (1), item (i) (Calculation of the Amount of Interest on Liabilities Payable by Consolidated Corporations to Foreign Controlling Shareholders to Be Excluded from Deductible Expenses) of the Order for Enforcement of the Act on Special Measures Concerning Taxation (including the cases where it is applied following the deemed replacement of terms pursuant to the provisions of paragraph (9) of the same Article) (in the case where the provisions of paragraph (1) of the same Article are applied following the deemed replacement of terms pursuant to the provisions of paragraph (2) of the same Article, after deducting the amount equivalent to the amount exceeding the average balance of the total liabilities prescribed in the same item which is applied following the deemed replacement of terms pursuant to the provisions of paragraph (2) of the same Article))".

Article 39-114(1)The affiliated foreign company specified by Cabinet Order prescribed in Article 68-90, paragraph (1) of the Act is any of the following:

(2)Whether or not an affiliated foreign company falls under the category of an affiliated foreign company set forth in item (ii) of the preceding paragraph is to be determined as specified as follows:

Article 39-115(1)The amount of undistributed income calculated in accordance with the standards specified by Cabinet Order prescribed in Article 68-90, paragraph (2), item (ii) of the Act is the amount that remains after deducting the sum of the amounts listed in item (iii) and item (iv) pertaining to the income of a specified foreign subsidiary company, etc. prescribed in paragraph (1) of the same Article (hereinafter referred to as a "Specified Foreign Subsidiary Company, etc." in this Article and paragraph (1) of the following Article) in its settlement of accounts for the relevant business year from the sum of the amounts listed in item (i) and item (ii) pertaining to the income (where the amount listed in item (i) pertaining to the income is a loss, the amount of undistributed income is the amount that remains after deducting the sum of the amount of loss and the sum of the amounts listed in item (iii) and item (iv) pertaining to the income from the amount listed in item (ii) pertaining to the income):

(2)Notwithstanding the provisions of the preceding paragraph, a consolidated corporation listed in the items of Article 68-90, paragraph (1) of the Act may deem that the amount obtained by adding the amount of income calculated, with regard to the income of a Specified Foreign Subsidiary Company, etc. in its settlement of accounts for the relevant business year, pursuant to the provisions of the laws and regulations concerning corporate income taxes of the State of the Head Office of the Specified Foreign Subsidiary Company, etc. (where there are two or more laws and regulations concerning the corporate income taxes, pursuant to the provisions of the principal ones; hereinafter referred to as the "Laws and Regulations of the State of the Head Office" in this paragraph), (where the provisions of Article 68-88, paragraph (1) or Article 66-4, paragraph (1) of the Act is applied to a transaction between the Specified Foreign Subsidiary Company, etc. and the consolidated corporation (including other consolidated corporations which have the consolidated full controlling interest with the consolidated corporation) or domestic corporation listed in the items of Article 66-6, paragraph (1) of the Act, the amount of income calculated pursuant to the provisions of the Laws and Regulations of the State of the Head Office by deeming that the transaction was carried out at the arm's length price prescribed in Article 68-88, paragraph (1) or Article 66-4, paragraph (1) of the Act), and the sum of the amount listed in items (i) to (xiii) pertaining to the calculated amount of income and then deducting therefrom the amount listed in items (xiv) to (xvii) pertaining to the calculated amount of income (where the amount calculated pursuant to the provisions of the Laws and Regulations of the State of the Head Office proves to be a loss, the amount is the amount that remains after deducting the sum of the amount of loss and the amount listed in items (xiv) to (xvii) pertaining to the calculated amount from the sum of the amounts listed in items (i) to (xiii) pertaining to the calculated amount) may be the amount calculated in accordance with the standards specified by Cabinet Order prescribed in Article 68-90, paragraph (2), item (ii) of the Act; provided, however, that this applies only when the relevant other consolidated corporations are not subject to the provisions of the preceding paragraph with regard to the calculated amount pertaining to the Specified Foreign Subsidiary Company, etc.:

(3)Where there is any amount of a deductible dividend, etc. (meaning the amount equivalent to the amount specified respectively in the following items for the category of cases listed in the relevant items; hereinafter the same applies in this paragraph) for the relevant business year of a Specified Foreign Subsidiary Company, etc. related to a consolidated corporation listed in the items of Article 68-90, paragraph (1) of the Act, the amount calculated in accordance with the standards specified by Cabinet Order prescribed in Article 68-90, paragraph (2), item (ii) of the Act is the amount that remains after deducting the amount of a deductible dividend, etc. from the amount calculated pursuant to these provisions, notwithstanding the provisions of paragraph (1) or the preceding paragraph:

(4)In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

(5)The amount obtained as a result of an adjustment for the amount of loss and base income prescribed in Article 68-90, paragraph (2), item (ii) of the Act is the amount that remains after deducting, from the base income amount prescribed in the same item for the relevant business year of a specified foreign subsidiary company, etc. (referred to as the "base income amount" in paragraph (7) and paragraph (8)), the sum of the amounts listed as follows (where the provisions of paragraph (3) of the same Article are applied, the amount obtained by adding the amount equivalent to ten percent of the amount of expenses specified by Cabinet Order prescribed in Article 68-90, paragraph (2), item (ii) of the Act whose terms are replaced under the provisions of paragraph (3) of the same Article):

(6)A loss prescribed in item (i) of the preceding paragraph means a loss calculated where the provisions of paragraph (1), paragraph (2) or paragraph (3) are applied to the amount of income of a specified foreign subsidiary company, etc. in its settlement of accounts for the relevant business year.

(7)When making a calculation set forth in paragraph (1), item (i), if there is any amount to be included in deductible expenses in the relevant business year, pursuant to the provisions of Article 33 and Articles 42 to 53 of the Corporation Tax Act, and the provisions of Article 43, Article 45-2, Article 52-2, Article 57-5, Article 57-6, Article 57-8, Articles 65-7 to 65-9 (limited to the part pertaining to item (xix) of the table in Article 65-7, paragraph (1) of the Act), Article 67-12, paragraph (2) and Article 67-13, paragraph (2) of the Act, whose provisions are to be applicable under the provisions of the same item, the amount is to be included in deductible expenses for calculating the base income amount for the relevant business year, only when detailed statements concerning the inclusion of the amount in deductible expenses are attached to a consolidated final return form set forth in Article 68-90, paragraph (5) of the Act (hereinafter referred to as a "Consolidated Final Return Form" in the following paragraph) for the relevant business year; provided, however, that this does not apply when the competent district director having jurisdiction over the consolidated parent corporation's place for tax payment finds that there was unavoidable reason for the failure to attach detailed statements and the detailed statements have been submitted.

(8)When calculating the base income amount pursuant to the provisions of paragraph (1) (limited to the part concerning item (iv)) or paragraph (2) (limited to the part concerning item (xvii)), if there is any amount to be deducted for the relevant business year pursuant to these provisions, the amount is deducted in the calculation of the base income amount of the business year only where a detailed statement concerning the calculation of the amount is attached to the Consolidated Final Return Form pertaining to the business year; provided, however, that this does not apply when the competent district director having jurisdiction over the place for tax payment of the consolidated parent corporation finds any unavoidable reason for the failure to attach the detailed statement, and the detailed statement is submitted.

(9)Where a consolidated corporation, which was subject to the provisions of paragraph (1) for calculating the amount of income of the specified foreign subsidiary company, etc. in its settlement of accounts for the relevant business year, seeks the application of paragraph (2) for calculating the amount of income of the specified foreign subsidiary company, etc. in its settlement of accounts for the relevant business year in consolidated business years following the one to which the provisions of paragraph (1) have been applied; or where a consolidated corporation, which was subject to the provisions of paragraph (2) for calculating the amount of income of the specified foreign subsidiary company, etc. in its settlement of accounts for the relevant business year, seeks the application of paragraph (1) for calculating the amount of income of the specified foreign subsidiary company, etc. in its settlement of accounts for the relevant business year in consolidated business years following the one to which the provisions of paragraph (2) have been applied, it must receive approval from the competent district director having jurisdiction over the consolidated parent corporation's place for tax payment, in advance.

Article 39-116(1)The amount calculated as specified by Cabinet Order prescribed in Article 68-90, paragraph (1) of the Act is the amount obtained by multiplying the eligible income prescribed in the same paragraph for the relevant business year of a specified foreign subsidiary company, etc. pertaining to a consolidated corporation listed in the items of the same paragraph by the ratio of the shares, etc. for considering the Claims held by the consolidated corporation out of the Issued Shares, etc. of the specified foreign subsidiary company, etc. at the end of the relevant business year of the specified foreign subsidiary company, etc.

(2)In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed respectively in those items:

(3)The amount of expenses specified by Cabinet Order prescribed in Article 68-90, paragraph (2), item (ii) of the Act whose terms are replaced pursuant to the provisions of paragraph (3) of the same Article is the sum of personnel expense for officers and employees of a specified foreign subsidiary company, etc. engaged in the business at the specified foreign subsidiary company, etc. prescribed in paragraph (3) of the same Article (limited to the amount of income calculated in accordance with the Provisions of the Laws and Regulations of Japan prescribed in paragraph (1), item (i) of the preceding Article or pursuant to the provisions of paragraph (2) of the same Article or the amount to be included in deductible expenses for calculating the amount of a loss for the relevant business year of the specified foreign subsidiary company, etc.).

Article 39-117(1)The person specified by Cabinet Order prescribed in Article 68-90, paragraph (4), item (i) of the Act is any of the following:

(2)The case specified by Cabinet Order prescribed in Article 68-90, paragraph (4), item (i) of the Act is any of the cases specified respectively in the following items, in accordance with the category of the principal business to be conducted for the relevant business year of a specified foreign subsidiary company, etc. prescribed in the same paragraph:

(3)Where transactions prescribed in the preceding paragraph between a specified foreign subsidiary company, etc. and an affiliated person related to the specified foreign subsidiary company, etc. are conducted indirectly via a person other than an affiliated person related to the specified foreign subsidiary company, etc. (hereinafter referred to as a "Non-Affiliated Person" in this paragraph), transactions between the specified foreign subsidiary company, etc. and the Non-Affiliated Person are deemed to have been conducted directly between the specified foreign subsidiary company, etc. and the affiliated person and the provisions of the items of the preceding paragraph are applied, except in the case where there are reasonable grounds for having the Non-Affiliated Person intervene in the transactions.

(4)The case specified by Cabinet Order prescribed in Article 68-90, paragraph (4), item (ii) of the Act is any of the cases specified respectively in the following items, in accordance with the category of the principal business to be conducted for the relevant business year of a specified foreign subsidiary company, etc. prescribed in the same paragraph:

Article 39-118(1)The amount calculated as specified by Cabinet Order prescribed in Article 68-91, paragraph (1) of the Act is the amount obtained by multiplying the amount of foreign corporation tax to be imposed on a specified foreign subsidiary company, etc. prescribed in the same paragraph (hereinafter referred to as a " Foreign Subsidiary Company, etc." in this Article) on its income for a business year containing eligible income (meaning eligible income prescribed in Article 68-90, paragraph (2), item (ii) of the Act; hereinafter the same applies in this paragraph, and paragraph (1) and paragraph (2) of the following Article) (hereinafter referred to as a "Taxable Business Year" through to paragraph (4)) by the ratio of the Individually Taxable Income pertaining to a consolidated corporation prescribed in Article 68-91, paragraph (1) of the Act out of the eligible income for the relevant Taxable Business Year (where there is any amount listed in Article 39-115, paragraph (1), item (iv) to be deducted pursuant to the provisions of Article paragraph (1) (limited to the part concerning item (iv)) or paragraph (2) (limited to the part concerning item (xvii)) of the same Article or the amount of a deductible dividend, etc. prescribed in Article 39-115, paragraph (3) to be deducted pursuant to the provisions of the same paragraph, the amount obtained by adding these amounts) (where the amount exceeds the Individually Taxable Income, the amount equivalent to the Individually Taxable Income).

(2)In the case where a Specified Foreign Subsidiary Company, etc. has been subject to two or more foreign corporation taxes or to a foreign corporation tax twice or more on its income for a Taxable Business Year, when a consolidated corporation related to the Specified Foreign Subsidiary Company, etc. seeks the application of the provisions of Article 68-91, paragraph (1) (including the cases where it is applied pursuant to the provisions of paragraph (2) of the same Article by deeming the amount to be as specified therein; hereinafter the same applies in this Article) or Article 66-7, paragraph (1) (including the cases where it is applied pursuant to the provisions of paragraph (2) of the same Article by deeming the amount to be as specified therein; hereinafter the same applies in this Article) of the Act in two or more business years or consolidated business years; with respect to the application of the provisions of Article 68-91, paragraph (1) of the Act for a consolidated business year following the first one of those two or more consolidated business years or business years, the amount obtained by deducting the amount listed in item (ii) (the amount listed in item (iii), when seeking the application of the provisions of Article 68-91, paragraph (1) of the Act for the first time after receiving the application of the provisions of Article 66-7, paragraph (1) of the Act) from the amount listed in item (i) is deemed to be the calculated amount prescribed in the preceding paragraph:

(3)Out of the amount of foreign corporation taxes that were imposed on a Specified Foreign Subsidiary Company, etc. on its income for a Taxable Business Year, the amount deemed to be the amount of individually creditable foreign corporation taxes prescribed in Article 68-91, paragraph (1) of the Act that is paid by a consolidated corporation related to the Specified Foreign Subsidiary Company, etc., pursuant to the provisions of the same paragraph, (hereinafter referred to as the "Amount of Individually Creditable Foreign Corporation Taxes" in this Article) is deemed to be payable by the consolidated corporation in a consolidated business year specified respectively in the following items for the category of foreign corporation taxes listed in the relevant item:

(4)Where a Specified Foreign Subsidiary Company, etc. has been subject to two or more foreign corporation taxes or to a foreign corporation tax twice or more on its income for a Taxable Business Year, a consolidated corporation to which the provisions of Article 68-90, paragraph (1) of the Act are applied, regarding the amount equivalent to the Individually Taxable Income for the relevant Taxable Business Year of the Specified Foreign Subsidiary Company, etc., may choose whether or not it will seek the application of the provisions of Article 68-91, paragraph (1) of the Act regarding the amount of respective foreign corporation taxes on the Individually Taxable Income subject to the provisions of Article 68-90, paragraph (1) of the Act.

(5)In the case where a consolidated corporation was subject to the provisions of Article 68-91, paragraph (1) of the Act, regarding the amount of foreign corporation tax imposed on the income of a Specified Foreign Subsidiary Company, etc. related to the consolidated corporation, when the amount of foreign corporation tax was reduced in each consolidated business year of the consolidated corporation which starts within seven years following the first day of the consolidated business year subject to the provisions of the same paragraph (hereinafter referred to as the "Applicable Consolidated Business Year" in this paragraph), it is deemed that the amount that remains after deducting the amount listed in item (ii) from the amount listed in item (i) has been reduced from the part of the amount of foreign corporation tax that was deemed to be the amount of individually creditable foreign corporation tax payable by the consolidated corporation, pursuant to the provisions of paragraph (1) of the same Article, as on the day of the reduction of the foreign corporation tax:

(6)In the case where a consolidated corporation was subject to the provisions of Article 66-7, paragraph (1) of the Act, regarding the amount of foreign corporation tax imposed on the income of a Specified Foreign Subsidiary Company, etc. related to the consolidated corporation, when the amount of foreign corporation tax was reduced in each consolidated business year of the consolidated corporation which starts within seven years following the first day of the business year subject to the provisions of the same paragraph (hereinafter referred to as the "Applicable Business Year" in this paragraph), it is deemed that the amount that remains after deducting the amount listed in item (ii) from the amount listed in item (i) has been reduced from the part of the amount of foreign corporation tax that was deemed to be the Amount of Creditable Foreign Corporation Tax payable by the consolidated corporation, pursuant to the provisions of paragraph (1) of the same Article (hereinafter referred to as the "Amount of Creditable Foreign Corporation Tax" in this Article), as on the day of the reduction of the foreign corporation tax:

(7)Where the amount of individually creditable foreign corporation tax or creditable foreign corporation tax has been deemed to have been reduced, pursuant to the provisions of paragraph (5) or the preceding paragraph, the provisions of Article 81-15, paragraph (8) of the Corporation Tax Act are applied as specified in Article 155-35 (excluding paragraph (2)) of the Order for Enforcement of the Corporation Tax Act.In this case, in paragraph (1) of the same Article, the term "where the amount of foreign corporation tax to be paid by a consolidated corporation" is deemed to be replaced with "where the amount of foreign corporation tax (including any part of the amount of foreign corporation tax to be imposed on the income of a Specified Foreign Subsidiary Company, etc. prescribed in Article 68-91, paragraph (1) of the Act on Special Measures Concerning Taxation (Credit for Foreign Tax on Individually Taxable Income of Specified Foreign Subsidiary Companies of Consolidated Corporations) or Article 66-7, paragraph (1) of the same Act (Credit for Foreign Tax on Taxable Income of Specified Foreign Subsidiary Companies of Domestic Corporations), which is deemed to be payable by the consolidated corporation pursuant to the provisions of Article 68-91, paragraph (1) or Article 66-7, paragraph (1) of the same Act; hereinafter the same applies in this paragraph) to be paid by a consolidated corporation"; the term "the amount of individually creditable foreign corporation tax that the consolidated corporation is to pay in the consolidated business year pertaining to the tax reduction (" is deemed to be replaced with "the amount of individually creditable foreign corporation tax that the consolidated corporation is to pay in the consolidated business year pertaining to the tax reduction (including any amount which is deemed to be payable by the consolidated corporation pursuant to the provisions of Article 68-91, paragraph (1) of the Act on Special Measures Concerning Taxation (including cases where applied mutatis mutandis by deeming the amount as prescribed in paragraph (2) of the same Article)"; and the term "the amount of individually reduced creditable foreign corporation tax" is deemed to be replaced with "the amount of individually reduced creditable foreign corporation tax (including the amount of individually creditable foreign corporation tax or creditable foreign corporation tax that is deemed to have been reduced pursuant to the provisions of Article 39-118, paragraph (5) or paragraph (6) (Reduction of Foreign Corporation Tax on Individually Taxable Income of Specified Foreign Subsidiary Companies) of the Order for Enforcement of the Act on Special Measures Concerning Taxation)".

(8)Where there is any amount included in the gross profits pursuant to the provisions of Article 68-90, paragraph (1) of the Act for calculating the amount of consolidated income for the relevant consolidated business year of a consolidated corporation listed in the items of the same paragraph, the amount included in gross profits is to be included in the consolidated foreign income prescribed in the main clause of Article 155-28, paragraph (3) of the Order for Enforcement of the Corporation Tax Act for calculating the maximum amount of consolidated deduction prescribed in paragraph (1) of the same Article for the relevant consolidated business year of the consolidated corporation; provided, however, that in the case where the state of the head office of a Specified Foreign Subsidiary Company, etc. related to the consolidated corporation is a state or territory that does not impose any foreign corporation taxes prescribed in Article 141, paragraph (1) of the same Order on income of the Specified Foreign Subsidiary Company, etc., the amount to be included in the consolidated foreign income is the amount equivalent to one-third of the amount included in the gross profits.

(9)The part of the amount of foreign corporation taxes listed in the items of paragraph (3) that are deemed to be the amount of individually creditable foreign corporation tax payable by a consolidated corporation related to a Specified Foreign Subsidiary Company, etc., pursuant to the provisions of Article 68-91, paragraph (1) of the Act, is to be included in consolidated foreign income prescribed in the main clause of Article 155-28, paragraph (3) of the Order for Enforcement of the Corporation Tax Act for calculating the maximum amount of consolidated deduction prescribed in paragraph (1) of the same Article for a consolidated business year specified respectively in the relevant items of the consolidated corporation.

(10)Out of the amount deemed to have been reduced from the amount of individually creditable foreign corporation tax or creditable foreign corporation tax, pursuant to the provisions of paragraph (5) or paragraph (6), the amount equivalent to the amount to be appropriated, pursuant to the provisions of paragraph (7), for deduction from the amount of individually creditable foreign corporation tax to be paid prescribed in Article 155-35, paragraph (1) of the Order for Enforcement of the Corporation Tax Act under the provisions of the same paragraph or for deduction from the amount exceeding the maximum amount of individual deduction prescribed in paragraph (3) of the same Article under the provisions of the same paragraph is to be included in deductible expenses for calculating the amount of consolidated income for a consolidated business year of a consolidated corporation prescribed in paragraph (5) or paragraph (6) for making the deduction.In this case, the amount to be included in deductible expenses is to be allocated as the amount of deductible expenses for calculating the amount of consolidated foreign income prescribed in the main clause of Article 155-28, paragraph (3) of the same Order.

(11)The consolidated business year specified by Cabinet Order prescribed in Article 68-91, paragraph (3) of the Act is the consolidated business year specified respectively in the items of paragraph (3), in accordance with the category of the amount of foreign corporation tax imposed on the income of a Specified Foreign Subsidiary Company, etc.

Article 39-119(1)The amount specified by Cabinet Order as prescribed in Article 68-92, paragraph (3), item (i) of the Act is the amount obtained by multiplying the eligible income pertaining to a specified foreign subsidiary company, etc. prescribed in the same item (hereinafter referred to as the "Specified Foreign Subsidiary Company, etc." in this Article) (limited to the eligible income pertaining to the Individually Taxable Income that is included in gross profits in the calculation of the amount of consolidated income of a consolidated corporation for a consolidated business year prescribed in the same item; hereinafter the same applies in this paragraph) by the ratio of the shares, etc. for considering the claims held directly by the consolidated corporation (meaning the shares, etc. for considering the claims held directly as prescribed in Article 39-19, paragraph (1); hereinafter the same applies in this Article) out of the Issued Shares, etc. of the Specified Foreign Subsidiary Company, etc. at the end of the relevant business year of the Specified Foreign Subsidiary Company, etc. pertaining to the eligible income.

(2)The amount specified by Cabinet Order as prescribed in Article 68-92, paragraph (3), item (ii) of the Act is the total of the amount obtained by multiplying the eligible income for each business year of a Specified Foreign Subsidiary Company, etc. (limited to the eligible income pertaining to the Individually Taxable Income that is included in gross profits in the calculation of the amount of consolidated income of a consolidated corporation for each consolidated business year within the preceding ten years prescribed in the same item; hereinafter the same applies in this paragraph) by the ratio of the shares, etc. for considering the claims held directly by the consolidated corporation out of the Issued Shares, etc. of the Specified Foreign Subsidiary Company, etc. at the end of the relevant business year of the Specified Foreign Subsidiary Company, etc. pertaining to the eligible income.

(3)With respect to the application of the provisions of Article 68-92, paragraph (3) of the Act in or after the consolidated business year containing the day of a qualified merger prescribed in paragraph (5) of the same Article (referred to as a "qualified merger, etc." in the following paragraph) of a consolidated corporation set forth in the same paragraph, in the case where the provisions of the same paragraph apply, the individually taxed amount of income specified in the items of the same paragraph (meaning the amount listed in paragraph (3), item (ii) of the same Article; hereinafter the same applies in this Article) or the taxed amount of income (meaning the amount listed in Article 66-8, paragraph (3), item (ii) of the Act; hereinafter the same applies in this Article) is deemed to be the individually taxed amount of income for a consolidated business year of the consolidated corporation specified respectively in the following items for the category of consolidated business years or business years listed in the relevant items of a merged corporation, split corporation, corporation making a capital contribution in kind, or corporation effecting post-formation acquisition of assets and/or liabilities (referred to as a "merged corporation, etc." in the following paragraph):

(4)In the case where the first day of the oldest consolidated business year or business year out of the relevant consolidated business years or business years that started within ten years prior to the first day of the consolidated business year containing the day of a qualified merger, etc. of a consolidated corporation set forth in Article 68-92, paragraph (5) of the Act (hereinafter referred to as the "First Day of the Business Year of the Consolidated Corporation Ten Years before" in this paragraph) falls after the first day of the oldest consolidated business year or business year out of a Business Year Within Ten Years Prior to the Merger, Business Year Within Ten Years Prior to the Company Split or Business Year Within Ten Years Prior to the Company Split, etc. of a merged corporation(s), etc. pertaining to the qualified merger, etc. (hereinafter referred to as a "Business Year of the Merged Corporation(s), etc. Within the Preceding Ten Years" in this paragraph) (in the case of a qualified merger, etc. made among two or more merged corporations, etc., after the first day of the relevant consolidated business year or business year of the merged corporations, etc. whichever started the earliest; hereinafter referred to as the "First Day of the Business Year of the Merged Corporations, etc. Ten Years before" in this paragraph), the provisions of the preceding paragraph apply by deeming respective periods classifying the period between the First Day of the Business Year of the Merged Corporations, etc. Ten Years before and the day preceding the First Day of the Business Year of the Consolidated Corporation Ten Years before (in the case where the consolidated corporation is to be established through the qualified merger, etc., the day preceding the first day of the consolidated business year of the consolidated corporation including the day of the qualified merger, etc.; hereinafter the same applies in this paragraph) by the corresponding Business Year of the Merged Corporation(s), etc. Within the Preceding Ten Years pertaining to the First Day of the Business Year of the Merged Corporations, etc. Ten Years before (for the period including the preceding day, the period between the first day of the consolidated business year or business year of the merged corporation, etc. including the preceding day and the day preceding the First Day of the Business Year of the Consolidated Corporation Ten Years before) to be the relevant consolidated business year of the consolidated corporation.

(5)The amount calculated as specified by Cabinet Order prescribed in Article 68-92, paragraph (5), item (ii) of the Act is the amount specified respectively in the following items for the category of the individually taxed amount of income or taxed amount of income listed in the relevant items:

(6)The amount calculated as specified by Cabinet Order prescribed in Article 68-92, paragraph (5), item (iii) of the Act is the amount specified respectively in the following items for the category of the individually taxed amount of income or taxed amount of income listed in the relevant items:

(7)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 68-92, paragraph (1) of the Act apply, the phrase "of the Act" in Article 9-2, paragraph (1), item (i), (b) of the same Order is deemed to be replaced with "of the Act and Article 68-92 (Exclusion from Gross Profits of Dividend of Surplus, etc. to be Received from Specified Foreign Subsidiary Company, etc.) of the Act on Special Measures Concerning Taxation)".

(8)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of the first sentence of Article 68-92, paragraph (2) of the Act apply, in Article 9-2, paragraph (1), item (i), (b) of the same Order, the phrase "of the Act" is deemed to be replaced with "of the Act (including cases where applied following the deemed replacement of terms pursuant to the provisions of the first sentence of Article 66-8, paragraph (2) (Exclusion from Gross Profits of Dividend of Surplus, etc. to be Received from Specified Foreign Subsidiary Company, etc.) of the Act on Special Measures Concerning Taxation)", and the phrase "the same paragraph" is deemed to be replaced with "Article 81-3, paragraph (1) of the Act"; in Article 155-43, paragraph (2), item (ii) of the same Order, the phrase "of the Act" is deemed to be replaced with "of the Act (including cases where applied following the deemed replacement of terms pursuant to the provisions of the first sentence of Article 68-92, paragraph (2) (Exclusion from Gross Profits of Dividend of Surplus, etc. to be Received from Specified Foreign Subsidiary Company, etc.) of the Act on Special Measures Concerning Taxation)".

Article 39-120(1)In the case referred to in Article 68-90, paragraph (1) of the Act, whether or not a foreign company falls under the category of an affiliated foreign company prescribed in paragraph (2), item (i) of the same Article (hereinafter referred to as an "Affiliated Foreign Company" in this paragraph and the following paragraph) is to be determined according to its status at the end of the relevant business year of the foreign corporation and whether or not a consolidated corporation falls under the category of a consolidated corporation listed in the items of paragraph (1) of the same Article is determined according to its status at the end of the relevant business year of an Affiliated Foreign Company related to the consolidated corporation.

(2)Where a consolidated corporation listed in the items of Article 68-90, paragraph (1) of the Act has been dissolved through a merger by the day on which two months have elapsed after the final day of the relevant business year of an affiliated foreign company related to the consolidated corporation, the number of the shares, etc. of the affiliated foreign company prescribed in Article 66-6, paragraph (2), item (iii) of the Act which were directly and indirectly held by the consolidated corporation (hereinafter referred to as the "Number of Shares, etc. Directly and Indirectly Held" in this paragraph) and which have been succeeded to by the merging corporation pertaining to the merger is deemed to be the Number of Shares, etc. Directly and Indirectly Held by the merging corporation on the final day of the relevant business year of the affiliated foreign company.

(3)The amount included in the gross profits of a consolidated corporation subject to the provisions of Article 68-90, paragraph (1) of the Act, pursuant to the provisions of the same paragraph, is not to be included in the amount of consolidated income, etc. prescribed in the provisions of Article 81-13, paragraph (2) and paragraph (4) of the Corporation Tax Act for applying these provisions.

(4)The amount included in the gross profits pursuant to the provisions of Article 68-90, paragraph (1) of the Act is not to be included in the amount of individual income prescribed in Article 9-2, paragraph (1), item (i), (a) of the Order for Enforcement of the Corporation Tax Act for calculating the amount of consolidated profit reserve of a consolidated corporation subject to the provisions of Article 68-90, paragraph (1) of the Act.

(5)The provisions of Article 14-10, paragraphs (1) to (5) and paragraphs (7) to (11) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of Article 68-90, paragraph (7) of the Act apply under the provisions of the same Article (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 68-93 of the Act, Articles 39-114 to 39-116 (excluding paragraph (3)), and Article 39-118 to this Article.

(6)With regard to a trust corporation or a beneficiary of a trust subject to corporation taxation prescribed in Article 4-7 of the Corporation Tax Act, beyond what is specified in the preceding paragraph, other necessary particulars concerning the application of the provisions of Article 68-90 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 68-93 of the Act, or the provisions of Articles 39-114 to 39-116 (excluding paragraph (3)), or Article 39-118 to this Article are specified by Ministry of Finance Order.

Article 39-120-2(1)An individual who has a special relationship specified by Cabinet Order prescribed in Article 68-93-2, paragraph (1) of the Act is any of the following:

(2)A corporation which has a special relationship specified by Cabinet Order prescribed in Article 68-93-2, paragraph (1) of the Act is any of the following:

(3)The provisions of Article 4, paragraph (3) and paragraph (4) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of the preceding paragraph apply.

(4)The relationship specified by Cabinet Order prescribed in Article 68-93-2, paragraph (1) of the Act is the relevant relationship in the case where a specially-related shareholder, etc. prescribed in the same paragraph (hereinafter referred to as a "Specially-Related Shareholder, etc." in this Section) and a specially-related domestic corporation have a relationship where the ratio of the shares, etc. indirectly held by the Specially-Related Shareholder, etc. pertaining to the specially-related domestic corporation (meaning the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)) is 80 percent or more:

(5)A foreign corporation specified by Cabinet Order prescribed in Article 68-93-2, paragraph (1) of the Act is any of the following:

(6)In item (iii) of the preceding paragraph, whether or not a foreign corporation directly or indirectly holds over 50 percent of the Issued Shares, etc. is to be determined based on the sum of the ratio of the shares, etc. held directly by a foreign corporation listed in item (i) and item (ii) of the same paragraph pertaining to any other foreign corporation (excluding a foreign corporation falling under the category of a foreign corporation listed in item (i) or item (ii) of the same paragraph and a foreign corporation falling under the category of a Specially-Related Shareholder, etc.; hereinafter the same applies in this paragraph) (that ratio of the shares, etc. held directly means the ratio of the number or the amount of the shares, etc. of any other foreign corporation held by a foreign corporation listed in item (i) and item (ii) of the preceding paragraph out of the total Issued Shares, etc. of the relevant other foreign corporation) and the ratio of the shares, etc. held indirectly by a foreign corporation listed in item (i) and item (ii) of the same paragraph pertaining to the relevant other foreign corporation (the ratio of the shares, etc. held indirectly means the ratio specified respectively in the following items for the category of cases listed in the relevant items (where falling under both of the following cases, the sum of the ratios specified respectively as follows)):

(7)An affiliated foreign corporation specified by Cabinet Order prescribed in Article 68-93-2, paragraph (1) of the Act is any of the following:

(8)The provisions of Article 39-114, paragraph (2) apply mutatis mutandis to the determination as to whether or not an affiliated foreign corporation falls under the category of an affiliated foreign corporation set forth in item (ii) of the preceding paragraph.

Article 39-120-3(1)The amount of undistributed income calculated in accordance with the standards specified by Cabinet Order prescribed in Article 68-93-2, paragraph (2), item (iii) of the Act is the amount calculated, pursuant to the provisions of Article 39-115, paragraph (1) or paragraph (2), or paragraph (3) of the same Article with regard to the income of a specified foreign corporation prescribed in Article 68-93-6, paragraph (1) of the Act (hereinafter referred to as a "Specified Foreign Corporation" in this Article and paragraph (1) of the following Article) in its settlement of accounts for the relevant business year.

(2)The amount obtained as a result of an adjustment for the amount of loss and base income prescribed in Article 68-93-2, paragraph (2), item (iii) of the Act is the amount that remains after deducting, from the base income amount prescribed in the same item for the relevant business year of a Specified Foreign Corporation., the sum of the amounts listed as follows (where the provisions of paragraph (3) of the same Article are applied, the amount obtained by adding the amount equivalent to ten percent of the amount of expenses specified by Cabinet Order prescribed in Article 68-93-2, paragraph (2), item (iii) of the Act whose terms are replaced under the provisions of paragraph (3) of the same Article):

(3)A loss prescribed in item (i) of the preceding paragraph is a loss calculated with regard to the amount of income of a Specified Foreign Corporation in its settlement of accounts for the relevant business year, where the calculation has been made pursuant to the provisions of paragraph (1).

(4)The provisions of Article 39-115, paragraphs (7) to (9) apply mutatis mutandis where the amount of income of a Specified Foreign Corporation in its settlement of accounts for the relevant business year is calculated pursuant to the provisions of paragraph (1) or paragraph (2) of the same Article.

Article 39-120-4(1)The amount calculated as specified by Cabinet Order prescribed in Article 68-93-2, paragraph (1) of the Act is the amount calculated with regard to the eligible income (meaning the eligible income prescribed in the same paragraph; hereinafter the same applies in this Section) for the relevant business year of a Specified Foreign Corporation related to a consolidated corporation which is a Specially-Related Shareholder, etc., pursuant to the provisions of Article 39-116, paragraph (1) and paragraph (2).

(2)The amount of expenses specified by Cabinet Order set forth in Article 68-93-2, paragraph (2), item (iii) of the Act whose terms are replaced pursuant to the provisions of paragraph (3) of the same Article is the amount calculated with regard to the sum of personnel expenses for officers and employees of a Specified Foreign Corporation engaged in the business of the Specified Foreign Corporation prescribed in paragraph (3) of the same Article, pursuant to the provisions of Article 39-116, paragraph (3).

Article 39-120-5(1)The person specified by Cabinet Order prescribed in Article 68-93-2, paragraph (4), item (i) of the Act is any of the following:

(2)The provisions of Article 39-117, paragraph (2) and paragraph (3) apply mutatis mutandis to the case specified by Cabinet Order prescribed in Article 68-93-2, paragraph (4), item (i) of the Act.In this case, the term "those listed in the items of Article 40-4, paragraph (1), items of Article 66-6, paragraph (1), items of Article 68-90, paragraph (1) of the Act and the preceding items" in Article 39-117, paragraph (2), item (i) is deemed to be replaced with "a specially-related domestic corporation prescribed in Article 68-93-2, paragraph (2), item (ii) of the Act, Specially-Related Shareholder, etc. prescribed in paragraph (1) of the same Article and those listed in the items of Article 39-120-5, paragraph (1)".

(3)The provisions of Article 39-117, paragraph (4) apply mutatis mutandis to the case specified by Cabinet Order prescribed in Article 68-93-2, paragraph (4), item (ii) of the Act.

Article 39-120-6(1)The amount calculated as specified by Cabinet Order prescribed in Article 68-93-3, paragraph (1) of the Act is the amount calculated, pursuant to the provisions of Article 39-118, paragraph (1), with regard to the amount of foreign corporation tax (meaning foreign corporation tax prescribed in Article 69, paragraph (1) of the Corporation Tax Act; the same applies in paragraph (3)) to be imposed on a specified foreign corporation prescribed in Article 68-93-3, paragraph (1) of the Act (referred to as a "Specified Foreign Corporation" in paragraph (3)) on its income for a business year containing eligible income.

(2)In the case where the provisions of Article 81-15, paragraphs (1) to (11) of the Corporation Tax Act are applied by deeming the calculated amount to be the amount of individually creditable foreign corporation tax prescribed in paragraph (1) of the same Article payable by a consolidated corporation that is a Specially-Related Shareholder, etc. pursuant to the provisions of Article 68-93-3, paragraph (1) of the Act, the particulars concerning the application of these provisions are as prescribed in the provisions of Article 39-118, paragraphs (2) to (10).

(3)The consolidated business year specified by Cabinet Order prescribed in Article 68-93-3, paragraph (3) of the Act is the consolidated business year specified respectively in the items of Article 39-118, paragraph (3), in accordance with the category of the amount of foreign corporation tax imposed on the income of a Specified Foreign Corporation.

Article 39-120-7(1)The amount specified by Cabinet Order as prescribed in Article 68-93-4, paragraph (3), item (i) of the Act is the amount calculated in accordance with the provisions of Article 39-119, paragraph (1) with regard to eligible income (limited to that which pertains to Individually Taxable Income prescribed in the same item that is included in gross profits in the calculation of the amount of consolidated income for a consolidated business year, prescribed in the same item, of a consolidated corporation which is a Specially-Related Shareholder, etc.) pertaining to a specified foreign corporation prescribed in the same item (referred to as a "Specified Foreign Corporation" in the following paragraph).

(2)The amount specified by Cabinet Order as prescribed in Article 68-93-4, paragraph (3), item (ii) of the Act is the amount calculated in accordance with the provisions of Article 39-119, paragraph (2) with regard to eligible income (limited to that which pertains to Individually Taxable Income prescribed in the same item that is included in gross profits in the calculation of the amount of consolidated income for each consolidated business year within the preceding ten years, prescribed in the same item, of a consolidated corporation which is a Specially-Related Shareholder, etc.) for each business year of a Specified Foreign Corporation.

(3)The particulars concerning the application of the provisions of Article 68-92, paragraphs (5) through (8) of the Act as applied mutatis mutandis pursuant to Article 68-93-4, paragraph (5) of the Act are as prescribed in the provisions of Article 39-119, paragraphs (3) through (6).

(4)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of Article 68-93-4, paragraph (1) of the Act apply, the phrase "(Inclusion in Deductible Expenses...)" in Article 9-2, paragraph (1), item (i), (b) and Article 155-43, paragraph (2), item (ii) of the same Order is deemed to be replaced with "(Inclusion in Deductible Expenses ...) of the Act or Article 68-93-4 (Exclusion from Gross Profits of Dividend of Surplus, etc. Received from Specified Foreign Corporation) of the Act on Special Measures Concerning Taxation)".

(5)With regard to the application of the provisions of the Order for Enforcement of the Corporation Tax Act in the case where the provisions of the first sentence of Article 68-93-4, paragraph (2) of the Act apply, the phrase "(Exclusion of Gross Profit...) of the Act" in Article 9-2, paragraph (1), item (i), (b) of the same Order is deemed to be replaced with "(Exclusion of Gross Profit ...) of the Act (including the case where it is applied following the deemed replacement of terms pursuant to the provisions of the first sentence of Article 68-93-4, paragraph (2) (Exclusion from Gross Profits of Dividend of Surplus, etc. Received from Specified Foreign Corporation) of the Act on Special Measures Concerning Taxation)"; and the phrase "the same paragraph" in the same item (b) is deemed to be replaced with "Article 81-3, paragraph (1) of the Act"; and the phrase "(Exclusion of Gross Profit...) of the Act" in Article 155-43, paragraph (2), item (ii) of the same Order is deemed to be replaced with "(Exclusion of Gross Profit ...) of the Act (including the case where it is applied following the deemed replacement of terms pursuant to the provisions of the first sentence of Article 68-93-4, paragraph (2) (Exclusion from Gross Profits of Dividend of Surplus, etc. Received from Specified Foreign Corporation) of the Act on Special Measures Concerning Taxation)".

Article 39-120-8(1)The provisions of Article 39-20-8, paragraph (1) and paragraph (2) apply mutatis mutandis where the provisions of Article 68-93-2, paragraph (1) of the Act apply.

(2)Where a consolidated corporation which is a Specially-Related Shareholder, etc. pertaining to a specially-related domestic corporation has been dissolved through a merger by the day on which two months have elapsed after the final day of the relevant business year of an affiliated foreign corporation related to the consolidated corporation, the number of the shares, etc. of the affiliated foreign corporation prescribed in Article 66-9-2, paragraph (2), item (iv) of the Act which were directly and indirectly held by the consolidated corporation (hereinafter referred to as the "Number of Shares, etc. Directly and Indirectly Held" in this paragraph) and which have been transferred to the merging corporation pertaining to the merger (the merging corporation is limited to one falling under the category of a Specially-Related Shareholder, etc. related to the specially-related domestic corporation and one that proves to fall under the category of a Specially-Related Shareholder, etc. related to the specially-related domestic corporation by receiving the transfer of the number of the shares, etc. of the affiliated foreign corporation directly and indirectly held by the consolidated corporation through the merger; hereinafter the same applies in this paragraph) is deemed to be the Number of Shares, etc. Directly and Indirectly Held by the merging corporation on the final day of the relevant business year of the affiliated foreign corporation.

(3)The provisions of Article 39-120, paragraph (3) and paragraph (4) apply mutatis mutandis to the application of the provisions of Article 81-13, paragraph (2) and paragraph (4) of the Corporation Tax Act and the calculation of the amount of consolidated profit reserve of a consolidated corporation which is a Specially-Related Shareholder, etc., where there is any amount included in gross profits of the consolidated corporation pursuant to the provisions of Article 68-93-2, paragraph (1) of the Act.

(4)The provisions of Article 14-10, paragraphs (1) to (5) and paragraphs (7) to (11) of the Order for Enforcement of the Corporation Tax Act apply mutatis mutandis where the provisions of Article 68-93-2, paragraph (8) of the Act apply under the provisions of the same Article (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 68-93-5 of the Act, Articles 39-120-2 to 39-120-4 (excluding paragraph (2)), and Article 39-120-6 to this Article.

(5)With regard to a trust corporation or a beneficiary of a trust subject to corporation taxation prescribed in Article 4-7 of the Corporation Tax Act, beyond what is specified in the preceding paragraph, other necessary particulars concerning the application of the provisions of Article 68-93-2 (excluding paragraph (3), paragraph (4) and paragraph (6)) to Article 68-93-5 of the Act, Articles 39-120-2 to 39-120-4 (excluding paragraph (2)), or Article 39-120-6 to this Article are specified by Ministry of Finance Order.

Article 39-128(1)The provisions of Article 119-7-2, paragraph (1) of the Order for Enforcement of the Corporation Tax apply mutatis mutandis to the relationship specified by Cabinet Order as prescribed in Article 68-109-2, paragraph (1) of the Act, and the provisions of Article 119-7-2, paragraph (3) of the same Order apply mutatis mutandis to the relationship specified by Cabinet Order as prescribed in Article 68-109-2, paragraph (3) of the Act respectively.

(2)Where a consolidated parent corporation or a consolidated subsidiary corporation in which the consolidated parent corporation has a consolidated full controlling interest, has received, as a result of a merger (limited to a merger that does not fall under the category of qualified merger) of a domestic corporation which issued old shares (meaning shares (including capital contributions; hereinafter the same applies in this Article) that were held by those corporations), the delivery of shares of a foreign corporation which has a relationship specified by Cabinet Order as prescribed in Article 68-109-2, paragraph (1) of the Act, when the shares of the foreign corporation fall under the category of shares of a specified foreign corporation with less tax burden (meaning a specified foreign corporation with less tax burden prescribed in Article 68-2-3, paragraph (5), item (i) of the Act; the same applies in paragraph (4)), with regard to the acquisition cost of the shares thus delivered, the provisions of Article 119, paragraph (1), item (v) of the Order for Enforcement of the Corporation Tax Act in the case of calculating the amount of individual gross profits or amount of individual deductible expenses prescribed in Article 81-3, paragraph (1) of the Corporation Tax Act pursuant to the provisions of the same paragraph do not apply.

(3)Where a consolidated parent corporation or a consolidated subsidiary corporation, in which the consolidated parent corporation has a consolidated full controlling interest, has received, as a result of a specified split-off-type company split prescribed in Article 68-109-2, paragraph (2) of the Act which is effected by a domestic corporation that issued old shares (meaning shares that were held by those corporations), the delivery of shares of a specified foreign parent corporation prescribed in the same paragraph pertaining to a succeeding corporation in a company split, with regard to the acquisition cost of the shares thus delivered, the provisions of Article 119, paragraph (1), item (vi) of the Order for Enforcement of the Corporation Tax Act in the case of calculating the amount of individual gross profits or amount of individual deductible expenses prescribed in Article 81-3, paragraph (1) of the Corporation Tax Act pursuant to the provisions of the same paragraph do not apply.

(4)Where a consolidated parent corporation or a consolidated subsidiary corporation, in which the consolidated parent corporation has a consolidated full controlling interest, has received, as a result of a share exchange (limited to the share exchange that does not fall under category of qualified share exchange) which is effected by a domestic corporation that issued old shares (meaning shares that were held by those corporations), the delivery of shares of a foreign parent corporation which has a relationship specified by Cabinet Order as prescribed in Article 68-109-2, paragraph (3) of the Act, and where the shares of the foreign corporation fall under the category of shares of a specified foreign corporation with less tax burden, with regard to the acquisition cost of the shares thus delivered, the provisions of Article 119, paragraph (1), item (viii) of the Order for Enforcement of the Corporation Tax Act in the case of calculating the amount of individual gross profits or amount of individual deductible expenses prescribed in Article 81-3, paragraph (1) of the Corporation Tax Act pursuant to the provisions of the same paragraph do not apply.

Article 39-129The amount specified by Cabinet Order as prescribed in Article 68-110, paragraph (2) of the Act is the amount of the distribution of profit from a foreign special purpose trust prescribed in Article 68-3-2, paragraph (10) of the Act (limited to the amount up to the specified individual taxable income prescribed in Article 68-92, paragraph (3) of the Act or the amount up to the specified individual taxable income prescribed in Article 68-93-4, paragraph (3) of the Act) to be received from a specified foreign subsidiary company, etc. prescribed in Article 68-90, paragraph (1) of the Act (limited to those falling under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act) or a specified foreign corporation prescribed in Article 68-93-2, paragraph (1) of the Act (limited to those falling under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act).

Article 39-130The amount specified by Cabinet Order as prescribed in Article 68-111, paragraph (2) of the Act is the amount of the distribution of proceeds from a foreign special investment trust prescribed in Article 68-3-3, paragraph (10) of the Act (limited to the amount up to the specified individual taxable income prescribed in Article 68-92, paragraph (3) of the Act or the amount up to the specified individual taxable income prescribed in Article 68-93-4, paragraph (3) of the Act) to be received from a specified foreign subsidiary company, etc. prescribed in Article 68-90, paragraph (1) of the Act (limited to those falling under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act) or a specified foreign corporation prescribed in Article 68-93-2, paragraph (1) of the Act (limited to those falling under the category of foreign subsidiary company prescribed in Article 23-2, paragraph (1) of the Corporation Tax Act).