①A corporation that has the amount in a special repair reserve account pertaining to assets subject to the transitional measures (meaning assets for which a special repair reserve account has been established as of the last day of the business year immediately preceding the business year first starting on or after the Effective Date (hereinafter referred to as "specified assets" in this paragraph) and assets transferred from an acquired corporation, etc. (meaning an acquired corporation, a splitting corporation prescribed in Article 2, item (xii)-2 of the 2006 New Corporation Tax Act, a corporation making a capital contribution in kind prescribed in item (xii)-4 of that Article or a corporation conducting a post-formation acquisition of assets prescribed in item (xii)-6 of that Article; the same applies hereinafter in this paragraph) through a qualified organizational restructuring (meaning a qualified merger, a qualified company split prescribed in Article 2, item (xii)-11 of the Corporation Tax Act as amended by the provisions of Article 2 of the Act Partially Amending the Income Tax Act, etc., and Other Matters (Act No. 10 of 2006) (hereinafter referred to as the "2006 New Corporation Tax Act" in this paragraph and paragraph (5)), a qualified capital contribution in kind prescribed in item (xii)-14 of that Article or a qualified post-formation acquisition of assets prescribed in item (xii)-15 of that Article; the same applies hereinafter in this Article) that fell under specified assets for that acquired corporation, etc. immediately before that qualified organizational restructuring; the same applies hereinafter in this Article) (limited to the amount included in deductible expenses, when calculating the amount of income for each business year, pursuant to the provisions of Article 56, paragraph (1) of the Former Corporation Tax Act and of Article 56, paragraph (1) of the Former Corporation Tax Act as it remains in force pursuant to the provisions of Article 7, paragraph (1) of the Supplementary Provisions prior to the amendment by the provisions of Article 9 of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 79 of 2002; hereinafter referred to as the "2002 Amendment Act" in this paragraph), and the amount included in deductible expenses, when calculating the amount of income for the business year containing the date of a qualified company split by spin-off, etc. (meaning a qualified company split by spin-off prescribed in Article 2, item (xii)-13 of the 2006 New Corporation Tax Act, a qualified capital contribution in kind prescribed in item (xii)-14 of that Article or a qualified post-formation acquisition of assets prescribed in item (xii)-15 of that Article; the same applies hereinafter in this paragraph and paragraph (3)), by the splitting corporation, etc. (meaning a splitting corporation prescribed in Article 2, item (xii)-2 of the 2006 New Corporation Tax Act, a corporation making a capital contribution in kind prescribed in item (xii)-4 of that Article or a corporation conducting a post-formation acquisition of assets prescribed in item (xii)-6 of that Article) involved in that qualified company split by spin-off, etc., pursuant to the provisions of Article 7, paragraph (2) of the Supplementary Provisions prior to the amendment by the provisions of Article 9 of the 2002 Amendment Act, and excluding the amount that has already been required to be withdrawn pursuant to the provisions of Article 56, paragraph (2) of the Former Corporation Tax Act, Article 56, paragraph (2) of the Former Corporation Tax Act as it remains in force pursuant to the provisions of Article 7, paragraph (1) of the Supplementary Provisions prior to the amendment by the provisions of Article 12 of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 6 of 2001; hereinafter referred to as the "2001 Corporation Tax Amendment Act" in this paragraph), Article 7, paragraph (2) of the Supplementary Provisions prior to the amendment by the provisions of Article 12 of the 2001 Corporation Tax Amendment Act, Article 7, paragraphs (4) and (5) of the Supplementary Provisions prior to the amendment by the provisions of Article 9 of the 2002 Amendment Act, and the following paragraph; the same applies hereinafter in this Article) must, if the special repairs prescribed in Article 56, paragraph (1) of the Former Corporation Tax Act have been completed for those assets subject to the transitional measures, if it has ceased to have those assets subject to the transitional measures (excluding the case where it transfers those assets subject to the transitional measures to an acquiring corporation, etc. (meaning an acquiring corporation, a succeeding corporation in a company split, a corporation receiving a capital contribution in kind prescribed in Article 2, item (xii)-5 of the 2006 New Corporation Tax Act or a transferee corporation in a post-formation acquisition prescribed in item (xii)-6-2 of that Article; the same applies in paragraphs (6) and (7)) through a qualified organizational restructuring), or in any other case specified by Cabinet Order, withdraw the amount in the special repair reserve account pertaining to those assets subject to the transitional measures, pursuant to the provisions of Cabinet Order.

②If, as of the last day of each business year ending on or after March 31, 2003 of a corporation having assets subject to the transitional measures, there is an amount in the special repair reserve account pertaining to those assets subject to the transitional measures carried forward from the previous business year, the corporation must withdraw an amount equivalent to the amount calculated by multiplying the amount of special repair reserve subject to withdrawal (meaning the amount in the special repair reserve account pertaining to those assets subject to the transitional measures as of the last day of the business year of that corporation first ending on or after March 31, 2003) by the number of months in that business year and dividing the result by 48 (or, if that calculated amount exceeds the amount in the special repair reserve account pertaining to those assets subject to the transitional measures as of the last day of that business year, the amount in that special repair reserve account).

③With regard to the business year of a corporation containing the date of a qualified company split by spin-off, etc. in the case where the corporation transfers assets subject to the transitional measures through the qualified company split by spin-off, etc. (limited to the case where it transfers them through a qualified company split by spin-off, etc. carried out on or after April 1, 2003, and excluding the case where it transfers them through a qualified company split by spin-off, etc. carried out on the first day of the business year of that corporation), the provisions of the preceding paragraph apply by deeming the day preceding the date of that qualified company split by spin-off, etc. to be the last day of the business year. In this case, the phrase "the number of months in that business year" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of that business year to the day preceding the date of that qualified company split by spin-off, etc.".

④The number of months set forth in the preceding two paragraphs is calculated according to the calendar and a division of less than one month is counted as one month.

⑤The amount in a special repair reserve account that has become required to be withdrawn pursuant to the provisions of paragraph (1) and paragraph (2) (including as applied with the replacement of terms pursuant to the provisions of paragraph (3)) is included in gross profits, when calculating the amount of income for the business year containing the respective day on which it became required to be withdrawn (or, in the case where the amount in that special repair reserve account is withdrawn in connection with the transfer of assets subject to the transitional measures to an acquiring corporation or a succeeding corporation in a company split through a merger that does not fall under a qualified merger or through a company split by split-off (meaning a company split by split-off prescribed in Article 2, item (xii)-9 of the 2006 New Corporation Tax Act; the same applies hereinafter in this paragraph) that does not fall under a Qualified Company Split by Split-Off (meaning a Qualified Company Split by Split-Off prescribed in item (xii)-12 of that Article), the day preceding the date of that merger or company split by split-off).

⑥If a corporation has transferred assets subject to the transitional measures to an acquiring corporation, etc. through a qualified organizational restructuring, the amount in the special repair reserve account pertaining to those assets subject to the transitional measures immediately before that qualified organizational restructuring is to be succeeded to by that acquiring corporation, etc.

⑦The amount in a special repair reserve account succeeded to by an acquiring corporation, etc. pursuant to the provisions of the preceding paragraph is deemed to be the amount in a special repair reserve account that the acquiring corporation, etc. has as of the date of that qualified organizational restructuring.

⑧Beyond what is provided for in paragraph (4), necessary matters concerning the application of the provisions of paragraphs (1) through (3), paragraph (5), and paragraph (6) are specified by Cabinet Order.