Article 222-2Amount of Foreign Income Tax Not Subject to Foreign Tax Credit

一a transaction in which a Resident lends, to a person who has a special relationship with a person from whom the Resident has borrowed money or received a deposit, money in an amount equivalent to the amount of the money so borrowed or received as a deposit (limited to the case where the interest rate and other conditions pertaining to that loan are found to be particularly favorable compared with the interest rate and other conditions pertaining to that borrowing or deposit);

二a transaction in which a Resident who has acquired a loan claim or other similar claim receives payment of interest pertaining to that claim from the debtor pertaining to that claim (limited to a person who has a special relationship with the person who transferred that claim to that Resident (hereinafter in this item referred to as the "transferor")) (limited to the case where, when that Resident pays to the transferor the amount of the portion of the amount of interest arising from that claim that corresponds to the period during which the transferor owned that claim, the amount paid is equivalent to the sum of the following amounts):

イof the amount obtained by deducting the amount of foreign income tax that that Resident paid on that interest in the country or region where that debtor has a domicile, head office or principal office from the amount of interest arising from that claim, the amount of the portion corresponding to the period during which the transferor owned that claim;

ロan amount equivalent to all or part of the amount of the portion, corresponding to the period during which the transferor owned that claim, of the amount of foreign income tax pertaining to that interest (including the amount of tax of the treaty partner state, etc. that has been reduced or exempted under the laws of the treaty partner state, etc. (meaning the Contracting State or Contracting Party to a tax treaty other than Japan; the same applies hereinafter in this item and paragraph (4), item (iv)) with which Japan has concluded a tax treaty (meaning a treaty prescribed in the proviso to Article 2, paragraph (1), item (viii)-4 (Definitions) of the Act; the same applies hereinafter in this item and paragraph (4)) or under the provisions of that tax treaty, and that is deemed under the provisions of that tax treaty to have been paid by that Resident).

一an individual or corporation prescribed in Article 4 (Scope of Related Persons of a Family Company) of the Order for the Enforcement of the Corporation Tax Act;

二a person in a relationship in which, owing to the existence of the following events or other similar events, either one of two persons can substantially determine all or part of the other person's business policy:

イthat one half or more of the officers of the other person, or an officer who has the authority to represent the other person, is a person who concurrently serves as an officer or employee of the one person or a person who was an officer or employee of the one person;

ロthat the other person depends on transactions with the one person for a substantial part of its business activities;

ハthat the other person raises a substantial part of the funds required for its business activities through borrowing from the one person or with a guarantee from the one person;

三a person whose obligation to the Resident prescribed in the preceding paragraph is guaranteed, as to its performance, by a person from whom the Resident prescribed in item (i) of that paragraph has borrowed money or from whom that Resident has accepted a deposit, or by the transferor prescribed in item (ii) of that paragraph.

一the amount of foreign income tax imposed on the amount of money and the value of assets other than money received by reason of a cause set out in the items of Article 25, paragraph (1) (Amounts Deemed to Constitute Dividends) of the Act (excluding the portion imposed on the portion of the amount that exceeds the acquisition cost of the shares of or investments in the juridical person prescribed in that paragraph that gave rise to that delivery);

二the amount of foreign income tax imposed, in the country or region where a foreign office or similar establishment (meaning the foreign office or similar establishment prescribed in Article 95, paragraph (4), item (i) of the Act; the same applies hereinafter in this item and item (iv)) is located, on the amount pertaining to a payment from that foreign office or similar establishment to a place of business or similar place (meaning the place of business or similar place prescribed in item (i) of that paragraph; the same applies in item (iv)), with that amount as the tax base;

三if, under the laws and regulations of the country or region where the head office or principal office of a Foreign Corporation that has issued shares or investments held by a Resident is located, a disposition equivalent to a Reassessment or determination (excluding one relating to a transaction with that Resident) is made with regard to the base for assessment, etc. of a tax (meaning the matters set out in Article 2, item (vi), (a) through (c) (Definitions) of the Act on General Rules for National Taxes) or the tax amount, etc. (meaning the matters set out in (d) through (f) of that item) pertaining to that Foreign Corporation, the amount of foreign income tax imposed on the amount equivalent to the amount of income of that Foreign Corporation that has been increased by that disposition, by treating it as a payment of money equivalent to the amount of a dividend of surplus, dividend of profits or distribution of surplus prescribed in Article 24, paragraph (1) (Dividend Income) of the Act, and any other amount of foreign income tax imposed on an amount equivalent to the amount of income of another person, by treating it as the amount of income of a Resident (limited to a Resident that has with that other person a relationship under which that Resident directly or indirectly holds shares or investments in that other person (limited to a juridical person), or any other relationship specified by Ministry of Finance Order);

四the amount of foreign income tax imposed in the country or region where a foreign office or similar establishment of a Resident is located (hereinafter in this item referred to as the "country or region where the foreign office is located") (limited to that imposed on an amount of income calculated by adding, to the amount equivalent to the amount of income that is the tax base of another foreign income tax imposed in the country or region where the foreign office is located on income arising from a business conducted through a foreign office or similar establishment of that Resident (limited to one located in the country or region where the foreign office is located; the same applies hereinafter in this item), the amount pertaining to payments to another person who has with that Resident a relationship as relatives, a relationship under which that Resident directly or indirectly holds shares or investments in a number or amount exceeding 50 percent of the total number or total amount of the issued shares or investments of that other person, or any other relationship specified by Ministry of Finance Order (excluding a person that has a domicile or residence, a head office or principal office or the like in the country or region where the foreign office is located, or nationality or the like of the country or region where the foreign office is located) and to places of business or similar places of that Resident (excluding those located in the country or region where the foreign office is located) (hereinafter in this item referred to as "related person, etc."), and the amount, out of the depreciation expenses for assets that a foreign office or similar establishment of that Resident has acquired from a related person, etc., that is included in necessary expenses in calculating the amount of income that is the tax base of that other foreign income tax, and otherwise making adjustments relating to those amounts) (excluding the portion pertaining to the amount equivalent to the amount of income that is the tax base of that other foreign income tax);

一the amount of foreign income tax imposed on income arising within the period during which a Resident was a Nonresident, in that year or a previous year;

二the amount of foreign income tax relating to the amount of dividends of surplus, etc. prescribed in Article 40-5, paragraph (1) (Special Provisions on Taxation of Income of Foreign Related Companies of Residents) of the Act on Special Measures Concerning Taxation that is received from a Foreign Corporation (hereinafter in this item referred to as the "amount of dividend of surplus, etc.", and limited to the portion of the amount to which that paragraph or paragraph (2) of that Article applies) (limited to the amount of foreign income tax imposed with the amount of dividend of surplus, etc. as its tax base, and the amount of foreign income tax imposed on a Resident with, as its tax base, the amount calculated as attributable to that Resident out of the income of the Foreign Corporation that was the basis for calculating the amount of dividend of surplus, etc.);

三the amount of foreign income tax relating to the amount of dividends of surplus, etc. prescribed in Article 40-8, paragraph (1) (Special Provisions on Taxation of Income of Foreign Related Companies of Residents Who Are Specially-Related Shareholders, etc.) of the Act on Special Measures Concerning Taxation that is received from a Foreign Corporation (hereinafter in this item referred to as the "amount of dividend of surplus, etc.", and limited to the portion of the amount to which that paragraph or paragraph (2) of that Article applies) (limited to the amount of foreign income tax imposed with the amount of dividend of surplus, etc. as its tax base, and the amount of foreign income tax imposed on a Resident with, as its tax base, the amount calculated as attributable to that Resident out of the income of the Foreign Corporation that was the basis for calculating the amount of dividend of surplus, etc.);

四of the amount of foreign income tax imposed in a treaty partner state, etc. with which Japan has concluded a tax treaty, or in a foreign country (meaning a foreign country prescribed in Article 2, item (iii) (Definitions) of the Act on Exemption, etc. of Income Tax, etc. on Income of Foreign Residents, etc. Based on the Principle of Reciprocity, and excluding that foreign country where it does not fall under any of the items of Article 5 (Principle of Reciprocity) of that Act; the same applies hereinafter in this item), the amount equivalent to the portion that exceeds the amount that may be imposed in that treaty partner state, etc. under the provisions of that tax treaty (limited to provisions on the reduction or exemption of that foreign income tax), or the amount equivalent to the amount to be exempted, or, in that foreign country, the amount equivalent to the portion to be reduced, or the amount equivalent to the amount to be exempted, under conditions equivalent to the conditions on which, under the provisions on the exemption, etc. of income tax, etc. prescribed in item (i) of that Article, income tax is reduced or not imposed on the covered domestic source income prescribed in Article 5, item (i) of that Act of the foreign Resident, etc. prescribed in Article 2, item (iii) of that Act pertaining to that foreign country;

五the amount of foreign income tax imposed on the income of a Resident that, under the provisions of a tax treaty, is not to be taken into consideration in calculating the amount to be deducted under Article 95, paragraphs (1) through (3) of the Act.