This Act comes into effect on March 31, 2001; provided, however, that the following provisions come into effect on April 1 of that year:

Except as otherwise provided in these Supplementary Provisions, the provisions of the Corporation Tax Act as amended by the provisions of Article 1 (hereinafter referred to as "the New Corporation Tax Act") apply to corporation tax on income for each business year of a corporation (including an association or foundation without juridical personality prescribed in Article 2, item (viii) of the New Corporation Tax Act; the same applies hereinafter) in the case where a merger, a company split, a capital contribution in kind, a post-formation acquisition of assets (meaning a post-formation acquisition of assets prescribed in Article 2, item (xii)-6 of the New Corporation Tax Act; the same applies hereinafter), a reduction of capital or capital contributions, a capitalization of profits prescribed in Article 293-2 of the Commercial Code (Act No. 48 of 1899) pursuant to the provisions of that Article, a capitalization of reserves prescribed in Article 293-3 of that Code pursuant to the provisions of that Article, an entity conversion, a distribution of residual assets due to dissolution, a cancellation of shares (including capital contributions; the same applies through the following Article), a refund of equity due to the retirement or withdrawal of a member, or a compensation for a capital deficit prescribed in Article 289, paragraph (1) of that Code by means of capital and the reserves prescribed in that paragraph is carried out on or after April 1, 2001, to corporation tax on income for each calculation period of a specified trust (meaning a specified trust prescribed in Article 2, item (xxix)-3 of the New Corporation Tax Act; the same applies hereinafter), to corporation tax on retirement pension funds, and to corporation tax on liquidation income of a corporation in the case where a dissolution (excluding a dissolution due to a merger; the same applies hereinafter in this Article) is carried out on or after that date (including corporation tax on income for a business year in liquidation of a corporation subject to corporation tax on liquidation income and corporation tax to be paid upon a partial distribution of residual assets; the same applies hereinafter in this Article), and with regard to corporation tax on income for each business year of a corporation in the case where a merger, a capital contribution in kind, a post-formation acquisition of assets, a reduction of capital or capital contributions, a capitalization of profits prescribed in Article 293-2 of the Commercial Code pursuant to the provisions of that Article, a capitalization of reserves prescribed in Article 293-3 of that Code pursuant to the provisions of that Article, an entity conversion, a distribution of residual assets due to dissolution, a cancellation of shares, a refund of equity due to the retirement or withdrawal of a member, or a compensation for a capital deficit prescribed in Article 289, paragraph (1) of that Code by means of capital and the reserves prescribed in that paragraph was carried out before that date, corporation tax on retirement pension funds, and corporation tax on liquidation income of a corporation in the case where a dissolution or merger was carried out before that date, the provisions then in force continue to govern.

If, as a result of a merger or a company split by split-off (excluding a qualified merger and a qualified company split; hereinafter referred to as a "non-qualified merger, etc." in this Article and Article 12, paragraph (3) of the Supplementary Provisions) carried out during the period from April 1, 2001 to March 31, 2002, only shares have been delivered to the shareholders, etc. of the acquired corporation or splitting corporation pertaining to that non-qualified merger, etc. (hereinafter referred to as the "acquired corporation, etc." in this Article and Article 12, paragraph (3) of the Supplementary Provisions), and the acquiring corporation or succeeding corporation in a company split pertaining to that non-qualified merger, etc. (hereinafter referred to as the "acquiring corporation, etc." in this Article and Article 12, paragraph (3) of the Supplementary Provisions) has filed a return of corporation tax on income for the business year containing the date of that non-qualified merger, etc., treating that non-qualified merger, etc. as a qualified merger or a Qualified Company Split by Split-Off (referred to as a "qualified merger, etc." in Article 12, paragraph (3) of the Supplementary Provisions), and has not collected income tax pursuant to the provisions of Article 181, paragraph (1) or Article 212, paragraph (1) or (3) of the Income Tax Act as amended by the provisions of Article 2 on the amount, out of the value of those shares, that is deemed to be the amount of a dividend of profits or a distribution of surplus pursuant to the provisions of Article 24, paragraph (1) of the New Corporation Tax Act, the provisions of Article 24, paragraph (1) of the New Corporation Tax Act do not apply, except in the case where it is clear that the acquiring corporation, etc. filed that return for the purpose of evading the corporation tax of a corporation that is a shareholder, etc. of the acquired corporation, etc.

The provisions of Article 52 (excluding paragraph (9)) of the New Corporation Tax Act apply to corporation tax on income for each business year of a corporation beginning on or after April 1, 2001, and for the transitional business year of an acquired corporation, splitting corporation, corporation making a capital contribution in kind or corporation making a post-formation acquisition of assets (hereinafter referred to as an "acquired corporation, etc." in this Article) pertaining to a merger, company split by split-off, qualified company split by spin-off, qualified capital contribution in kind or qualified post-formation acquisition of assets (hereinafter referred to as a "merger, etc." in this Article) carried out on or after that date (the transitional business year meaning the business year containing the date of that merger, etc. (for a merger or company split by split-off, the day preceding the date of that merger or company split by split-off), excluding a business year of that acquired corporation, etc. that falls under each of those business years; the same applies hereinafter in this Article), and with regard to corporation tax on income for each business year of a corporation that began before April 1 of that year (excluding a transitional business year), the provisions then in force continue to govern.

①The provisions of Article 57, paragraph (5) of the New Corporation Tax Act apply to a net operating loss incurred in a business year beginning on or after April 1, 2001 of a corporation that becomes an acquiring corporation, succeeding corporation in a company split or corporation receiving a capital contribution in kind prescribed in that paragraph pertaining to a qualified merger, etc. prescribed in that paragraph, and to an amount deemed, pursuant to the provisions of paragraph (2) of that Article, to be a net operating loss incurred in each business year of a corporation (referred to as a "deemed net operating loss" in the following paragraph), and with regard to a net operating loss incurred in a business year of a corporation that began before that date, the provisions then in force continue to govern.

②Necessary matters concerning the application of the provisions of Article 57, paragraph (5) of the New Corporation Tax Act in the case where a corporation prescribed in the preceding paragraph carries out a qualified merger, etc. prescribed in that paragraph in a business year beginning on or after April 1, 2001, and that corporation has a deemed net operating loss, are specified by Cabinet Order.

The provisions of Article 69, paragraph (1) of the New Corporation Tax Act apply in the case where a domestic corporation is to pay foreign corporation tax on income arising from transactions prescribed in that paragraph that it carries out on or after April 1, 2001.

The provisions of Article 52 of the New Corporation Tax Act, in the case where the amount of income for each calculation period of a specified trust is calculated in accordance with the provisions of that Article pursuant to the provisions of Article 82-3, paragraph (1) of the New Corporation Tax Act, apply to corporation tax on income for calculation periods of a specified trust beginning on or after April 1, 2001, and with regard to corporation tax on income for calculation periods of a specified trust that began before that date, the provisions then in force continue to govern.

The provisions of Article 82-7, paragraph (1) of the New Corporation Tax Act apply in the case where a domestic corporation that is the trustee of a specified trust is to pay foreign corporation tax on income arising from transactions prescribed in that paragraph that it carries out with respect to the trust property of that specified trust on or after April 1, 2001.

The provisions of Article 132-2 of the New Corporation Tax Act apply to acts or calculations that a transferring corporation prescribed in that Article (hereinafter referred to as a "transferring corporation" in this Article) and a receiving corporation prescribed in Article 132-2 of the New Corporation Tax Act (hereinafter referred to as a "receiving corporation" in this Article) pertaining to a merger, company split, capital contribution in kind and post-formation acquisition of assets carried out on or after April 1, 2001, and a corporation that is a shareholder, etc. of a transferring corporation or receiving corporation, carry out on or after March 31 of that year.

The provisions then in force continue to govern the application of penal provisions to conduct engaged in before this Act comes into effect and to conduct engaged in after this Act comes into effect in relation to corporation tax for which the provisions then in force are to continue to govern pursuant to the provisions of these Supplementary Provisions.

The provisions of Articles 6 through 8 of the Supplementary Provisions of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 24 of 1998) as amended by the provisions of Article 12 apply to corporation tax on income for each business year of a corporation in the case where a merger, company split, capital contribution in kind or post-formation acquisition of assets is carried out on or after April 1, 2001, and to corporation tax on liquidation income of a corporation in the case where a dissolution (excluding a dissolution due to a merger; the same applies hereinafter in this Article) is carried out on or after that date (including corporation tax on income for a business year in liquidation of a corporation subject to corporation tax on liquidation income and corporation tax to be paid upon a partial distribution of residual assets; the same applies hereinafter in this Article), and with regard to corporation tax on income for each business year of a corporation in the case where a merger, capital contribution in kind or post-formation acquisition of assets was carried out before that date, and corporation tax on liquidation income of a corporation in the case where a dissolution or merger was carried out before that date, the provisions then in force continue to govern.

Beyond what is provided for in Article 2 of the Supplementary Provisions through the preceding Article, transitional measures necessary in connection with the enforcement of the provisions of this Act are specified by Cabinet Order.