①In the case where, between the permanent establishment of a foreign corporation and the head office, etc. prescribed in Article 138, paragraph (1), item (i) (Domestic Source Income), there has been an internal dealing (meaning an internal dealing prescribed in item (i) of that paragraph; hereinafter the same applies in this paragraph) equivalent to the acquisition or transfer by the permanent establishment of assets that would generate domestic source income listed in item (iii) or item (v) of that paragraph, the amount of income pertaining to income attributable to a permanent establishment of the foreign corporation for each business year is calculated by deeming that the internal dealing was carried out at the amount specified by Cabinet Order as being equivalent to the book value of the assets immediately prior to the internal dealing.

②The acquisition cost of assets at the permanent establishment of a foreign corporation in the case where the provisions of the preceding paragraph apply and other necessary matters concerning the application of the provisions of that paragraph are specified by Cabinet Order.