The tax base of corporation tax on income for each business year imposed on a domestic corporation is the amount of income for each business year.

①The amount of income of a domestic corporation for each business year is the amount that remains after deducting the amount of deductible expenses for the business year from the amount of gross profits for the business year.

②When calculating the amount of income of a domestic corporation for each business year, the amount to be included in gross profits for the business year is to be the amount of proceeds for the business year arising from the sales of assets, transfer of assets or provision of services for value or without compensation, acceptance of assets without compensation, or other transactions other than capital, etc. transactions, except as otherwise provided.

③When calculating the amount of income of a domestic corporation for each business year, the amount to be included in deductible expenses in the business year is to be the amounts listed as follows, except as otherwise provided:

④The amount of proceeds for the business year prescribed in paragraph (2) and the amounts listed in the items of the preceding paragraph are to be calculated in accordance with an accounting standard that is generally accepted as fair and appropriate, except as otherwise provided.

⑤The capital, etc. transactions prescribed in paragraph (2) or paragraph (3) means transactions causing an increase or decrease to the amount of stated capital, etc. of a corporation, and the distribution of profits or distribution of surplus conducted by a corporation (including the distribution of monies prescribed in Article 115, paragraph (1) (Interim Dividend) of the Act on the Securitization of Assets) and the distribution of residual assets or delivery thereof.

①The amount of proceeds pertaining to the sale or transfer of assets or the provision of services by a domestic corporation (hereinafter referred to as the "sale, etc. of assets" in this Article) is, except as otherwise provided (excluding paragraph (4) of the preceding Article), included in the amount of gross profit, when calculating the amount of income for the business year that includes the day of the delivery of the subject matter or the provision of the services pertaining to the sale, etc. of assets.

②In the case where a domestic corporation, in accordance with an accounting standard that is generally accepted as fair and appropriate, has booked the amount of proceeds pertaining to the sale, etc. of assets as proceeds in the final settlement of the accounts for the business year that includes the day on which the contract pertaining to the sale, etc. of assets becomes effective or any other day close to the day prescribed in the preceding paragraph, notwithstanding the provisions of that paragraph, the amount of proceeds pertaining to the sale, etc. of assets is, except as otherwise provided (excluding paragraph (4) of the preceding Article), included in the amount of gross profit, when calculating the amount of income for that business year.

③In the case where a domestic corporation has made a sale, etc. of assets (excluding the case where it has booked the amount of proceeds pertaining to the sale, etc. of assets as proceeds, in accordance with an accounting standard that is generally accepted as fair and appropriate, in the final settlement of the accounts for the business year that includes the day prescribed in paragraph (1) or the close day prescribed in the preceding paragraph), when the Final Return for the business year that includes the close day prescribed in that paragraph pertaining to the sale, etc. of assets contains a statement concerning the inclusion in gross profit of the amount of proceeds pertaining to the sale, etc. of assets, the provisions of that paragraph apply by deeming that the amount has been booked as proceeds in the final settlement of the accounts for that business year.

④The amount to be included in the amount of gross profit, when calculating the amount of income for that business year pursuant to the provisions of paragraph (1) or (2), as the amount of proceeds pertaining to the sale, etc. of assets of a domestic corporation for each business year is, except as otherwise provided (excluding paragraph (4) of the preceding Article), the value at the time of delivery of the assets sold or transferred, or the amount equivalent to the amount of consideration normally receivable for the services provided.

⑤The value at the time of delivery or the amount of consideration normally receivable referred to in the preceding paragraph is to be the value as it would be if there were no possibility of the occurrence of the facts listed below, even in the case where such facts may occur with regard to the sale, etc. of assets referred to in that paragraph:

⑥In the cases of the preceding paragraphs and paragraph (2) of the preceding Article, the amount of proceeds pertaining to the transfer of assets without compensation is to include the amount of proceeds pertaining to the transfer of assets as a distribution of profits or distribution of surplus by means of assets other than monies and a distribution of residual assets or delivery thereof, or any other act similar thereto.

⑦Beyond what is provided for in the preceding two paragraphs, the treatment in the case where corrective accounting has been made for the amount of proceeds pertaining to the sale, etc. of assets and other necessary matters concerning the application of the provisions of paragraphs (1) through (4) are specified by Cabinet Order.

①In the case where a domestic corporation receives any of the following amounts (for the amount listed in item (i), excluding those received from a foreign corporation, a public interest corporation, etc. or an association or foundation without juridical personality and those pertaining to a qualified in-kind distribution; hereinafter referred to as the "amount of dividends, etc." in this Article), the amount of dividends, etc. (for the amount of dividends, etc. pertaining to shares, etc. of a related corporation, the amount that remains after deducting from the amount of dividends, etc. the amount calculated as specified by Cabinet Order as the amount equivalent to the amount of interest pertaining to the amount of dividends, etc.; for the amount of dividends, etc. pertaining to shares, etc. (meaning shares or capital contributions; hereinafter the same applies in this Article) that fall under none of wholly owned subsidiary shares, etc., shares, etc. of a related corporation and shares, etc. held for non-controlling purposes, the amount equivalent to 50 percent of the amount of dividends, etc.; and for the amount of dividends, etc. pertaining to shares, etc. held for non-controlling purposes, the amount equivalent to 20 percent of the amount of dividends, etc.) is excluded from the amount of gross profit, when calculating the amount of income of the domestic corporation for each business year:

②In the case where a domestic corporation acquired shares, etc., which are the principal for the amount of dividends, etc. receivable (excluding the amount deemed to be the amount of dividends, etc. that the domestic corporation is to receive pursuant to the provisions of Article 24, paragraph (1); hereinafter the same applies in this paragraph), within one month on or before the base date, etc. pertaining to the amount of dividends, etc. (meaning the day specified in each of the following items for the category of the amount of dividends, etc. listed in the relevant item; hereinafter the same applies in this paragraph) and then transferred the shares, etc. or other shares, etc. of the same issue within two months after the base date, etc., the provisions of the preceding paragraph do not apply to the amount of dividends, etc. of the portion of the transferred shares, etc. that is specified by Cabinet Order.

③The provisions of paragraph (1) do not apply, in the case where a domestic corporation has acquired (including succession through a qualified merger or qualified company split by split-off) shares, etc. which are the principal for the amount of dividends, etc. it receives (limited to the amount deemed to be the amount of dividends, etc. that the domestic corporation receives pursuant to the provisions of Article 24, paragraph (1) (limited to the part pertaining to item (v)); hereinafter the same applies in this paragraph) and for which the occurrence of the event listed in that item that gives rise to the amount of dividends, etc. is scheduled, to the amount of dividends, etc. pertaining to the shares, etc. so acquired (limited to the amount specified by Cabinet Order as arising from the scheduled event (excluding an event to which the provisions of Article 61-2, paragraph (17) (Inclusion of Capital Gains or Losses on Securities in Gross Profits or Deductible Expenses) apply)).

④The shares, etc. of a related corporation prescribed in paragraph (1) means the shares, etc. of another domestic corporation (excluding the wholly owned subsidiary shares, etc. prescribed in the following paragraph) in the case specified by Cabinet Order as the case where a domestic corporation (including another corporation that has a full controlling interest with the domestic corporation) holds shares, etc. whose number or amount exceeds one-third of the total number or total amount of the issued shares of or capital contributions to the other domestic corporation (excluding a public interest corporation, etc. and an association or foundation without juridical personality) (excluding the shares, etc. that the other domestic corporation holds in itself).

⑤The wholly owned subsidiary shares, etc. prescribed in paragraph (1) means the shares, etc. of another domestic corporation (excluding a public interest corporation, etc. and an association or foundation without juridical personality) that has a full controlling interest with a domestic corporation throughout the calculation period of the amount of dividends, etc., which are specified by Cabinet Order.

⑥The non-controlling-purpose shares, etc. prescribed in paragraph (1) mean the shares, etc. of another domestic corporation (excluding the wholly owned subsidiary shares, etc. prescribed in the preceding paragraph) in the case specified by Cabinet Order as a case where a domestic corporation (including another corporation with which the domestic corporation has a full controlling interest) holds shares, etc. equivalent to 5 percent or less of the total number or total amount of issued shares or capital contributions of another domestic corporation (excluding a public interest corporation, etc. and an association or foundation without juridical personality) (such issued shares or capital contributions exclude shares, etc. that the second domestic corporation holds in itself).

⑦The provisions of paragraph (1) apply only in the case where a Final Return, amended return, or written request for reassessment comes with the attachment of documents stating the amount of dividends, etc. that is to be excluded from gross profits and a detailed statement concerning the calculation thereof. In this case, the amount to be excluded from gross profits pursuant to the provisions of that paragraph does not exceed such recorded amount.

⑧Necessary matters concerning the application of the provisions of paragraphs (1) and (2) and the provisions of paragraphs (1) through (6) in the case where the shares, etc. have been transferred as a result of a qualified merger, qualified company split, qualified capital contribution in kind, or qualified in-kind distribution are specified by Cabinet Order.