①A Reassessment or determination with respect to income taxes may be made in connection with the information set forth in Article 120, paragraph (1), item (vi) or item (vii) (Filing Income Tax Returns), in addition to the information prescribed in Articles 24 through 26 (Reassessments and Determinations) of the Act on General Rules for National Taxes. This being the case, if a Reassessment or determination is made that involves that information, the phrase "the amount of tax, etc." in Article 28, paragraph (2) and paragraph (3) (Procedures for Reassessment or Determination) of that Act is deemed to be replaced with "the amount of tax, etc. and the information set forth in Article 120, paragraph (1), item (vi) or item (vii) (Filing Income Tax Returns) of the Income Tax Act".

②A written notice of Reassessment or written notice of determination as prescribed in Article 28, paragraph (1) of the Act on General Rules for National Taxes issued in the case of a Reassessment or determination being made with respect to income taxes must give the information prescribed in paragraph (2) or paragraph (3) of that Article and be accompanied by a breakdown of the amount set forth in Article 120, paragraph (1), item (i) or the Net Loss set forth in Article 123, paragraph (2), item (i) (Filing Tax Returns Showing Losses) in connection with the Reassessment or determination, by category of income prescribed in Article 2, paragraph (1), item (xxi) (Definitions).

①Before Reassessing a Resident's gross income, retirement income, timber income, or Net Loss for a year in which the Resident has filed a Blue Return, the district tax office director examines the Resident's books and documents, and may make the Reassessment only if there are found to be errors in the calculation of those amounts in the course of the examination; provided, however, that the district tax office director is not precluded from making a Reassessment without examining the Resident's books and documents if:

②When Reassessing a Resident's gross income, retirement income, timber income, or Net Loss for a year in which the Resident has filed a Blue Return (other than when doing so only on the grounds prescribed in item (i) of the preceding paragraph), the district director must note the reason for the Reassessment in the written notice of Reassessment as prescribed in Article 28, paragraph (2) (Procedures for Reassessment or Determination) of the Act on General Rules for National Taxes.

The district tax office director may make a Reassessment or Tax-Office Decision with respect to a Resident's income taxes by estimating the Resident's Income in Each Class or the loss for the year (other than real property income, business income, timber income, or the resulting loss when any of these is calculated, for a year in which the Resident has filed a Blue Return), in light of increases and decreases in assets or liabilities, revenue or expenses, production volumes, sales volumes or other transaction volumes, the number of employees, or the scope of business.

①If an action taken or calculation made by one of the following corporations would, if tolerated, unreasonably reduce the burden of income taxes on a Resident that is a Shareholder, Member, or Other Investor in the corporation or on a Resident that is uniquely related to such a Shareholder, Member, or Other Investor as provided for by Cabinet Order (including a Resident uniquely related to a Nonresident that is a Shareholder, Member, or Other Investor in the corporation; the same applies in paragraph (4)), the district director, when making a Reassessment or determination on the Resident's income taxes, may exercise the discretion thereof in calculating an amount as set forth in Article 120, paragraph (1), item (i) or items (iii) through (v) (Filing Income Tax Returns), Article 122, paragraph (1), items (i) through (iii) (Filing a Return to Receive a Refund), or Article 123, paragraph (2), item (i), item (iii), item (v), or item (vii) (Filing Tax Returns Showing Losses) as regards the Resident for each year, notwithstanding that action or calculation:

②In a case as referred to in the preceding paragraph, the determination as to whether a corporation falls under the category of a corporation as set forth in the items of that paragraph is to be based on the circumstances as of the time that the action prescribed in that paragraph was actually taken or that the calculation prescribed in that paragraph was actually made.

③The provisions of paragraph (1) apply mutatis mutandis to Reassessments and Tax-Office Decisions involving a Resident's income taxes as set forth in paragraph (1) if the provisions of Article 132, paragraph (1) (Negation of Actions or Calculations by a Family Company) of the Corporation Tax Act, Article 64, paragraph (1) (Negation of Actions or Calculations by a Family Company) of the Inheritance Tax Act, or Article 32, paragraph (1) (Negation of Actions or Calculations by a Family Company) of the Land Value Tax Act are applied to the action taken or calculation made by a corporation as set forth in the items of paragraph (1).

④If it is found that an action taken or calculation made by a corporation that has carried out a merger (including a consolidation of trusts in connection with a Trust Subject to Corporate Taxation), company split (including a trust split in connection with a Trust Subject to Corporate Taxation), capital contribution in kind, distribution in kind as prescribed in Article 2, item (xii)-5-2 of the Corporation Tax Act, share exchange or similar transaction as prescribed in item (xii)-16 of that Article, or share transfer (hereinafter referred to as a "merger or similar process" in this paragraph), or by a corporation that has received a transfer of assets and liabilities through a merger or similar process (such corporations include a corporation issuing shares or capital contributions that are delivered through the merger or similar process; hereinafter the same applies in this paragraph), would, if tolerated, unreasonably reduce the burden of income taxes on a Resident that is a Shareholder, Member, or Other Investor in the corporation that carried out the merger or similar process or in the corporation that received the transfer of assets and liabilities through the merger or similar process, or on a Resident that is uniquely related to such a Shareholder, Member, or Other Investor as prescribed in paragraph (1), the district director, when making a Reassessment or determination on the Resident's income taxes, may exercise the discretion thereof in calculating an amount as set forth in Article 120, paragraph (1), item (i) or items (iii) through (v), Article 122, paragraph (1), items (i) through (iii), or Article 123, paragraph (2), item (i), item (iii), item (v), or item (vii) as regards the Resident for each year, notwithstanding that action or calculation.

If a corporation has 15 or more branch offices, factories, and other places of business, and at two-thirds or more of its places of business, the director or chief officer of that place of business or any other person in charge of business at that place of business, the relative of the person in charge or any other individual uniquely related to the person in charge as prescribed by Cabinet Order formerly conducted business at that place of business as an individual, the district tax office director, in making a Reassessment or reaching a Tax-Office Decision, may presume that the person in charge of each of the corporation's places of business has the enjoyment of the proceeds arising from that place of business, unless all deposits and borrowings of funds, purchases and sales of commodities, and other transactions at the corporation's places of business are conducted in the name of the corporation.

①If a Reassessment (including a determination or ruling on an appeal, or a judgment in a lawsuit, concerning a disposition or similar action with respect to the income tax (meaning a disposition on a request for Reassessment or a determination under Article 25 (Determination) of the Act on General Rules for National Taxes); hereinafter referred to as a "Reassessment or similar decision" in this Article and the following Article) is made with respect to a Resident's income taxes for any year, and the amount set forth in Article 122, paragraph (1), item (i) or item (ii) (Filing a Return to Receive a Refund) or Article 123, paragraph (2), item (vi) or item (vii) (Filing Tax Returns Showing Losses) increases as a result of the Reassessment or similar decision, the district director refunds to the Resident income taxes in an amount equivalent to the increase.

②In a case as referred to in the preceding paragraph, if any part of the taxes withheld as prescribed in Article 122, paragraph (1), item (ii) or Article 123, paragraph (2), item (vii) which is used as the basis for calculating the amount of the refund under that paragraph has not yet been paid over to the national government, an amount equivalent to the part of the refund under the preceding paragraph which is from tax withheld that has not yet been paid over is not refunded until that part of the tax withheld is paid over.

③When the amount of interest on refund under paragraph (1) is calculated, the period referred to in Article 58, paragraph (1) (Interest on Refunds) of the Act on General Rules for National Taxes which serves as the basis for the calculation is the period beginning on the day after the day on which one month has elapsed from the day after the date of the Reassessment or similar decision referred to in paragraph (1) (or, if the Reassessment or similar decision is one set forth in one of the following items, the date specified in the relevant item; hereinafter referred to as the "one-month date" in this paragraph) (or beginning on the day after the date of payment, for a refund involving tax withheld as prescribed in the preceding paragraph that is paid after the one-month date), and ending on the day on which the tax-office decision to pay the refund is reached or on the day on which the refund is Appropriated to cover a required tax payment (or ending on the day on which the refund first could have been Appropriated, if this is before the date of the Appropriation):

④If a refund under paragraph (1) is Appropriated to cover unpaid income taxes for the year of the Reassessment or similar decision referred to in that paragraph, interest on refund does not accrue on the part of the refund so Appropriated and the tax on delinquency is waived for the part of the income taxes covered by the Appropriation.

⑤Beyond what is prescribed in the preceding three paragraphs, Cabinet Order provides for the method of making an Appropriation of a refund under paragraph (1) (including the interest on refund on that refund) and for other necessary particulars concerning the application of the provisions of that paragraph.

①If the amount set forth in Article 122, paragraph (1), item (iii) (Filing a Return to Receive a Refund) or Article 123, paragraph (2), item (viii) (Filing Tax Returns Showing Losses) increases as a result of a Reassessment or similar decision with respect to a Resident's income taxes for any year, the district director issues the Resident a refund of the prepaid taxes prescribed in those provisions (referred to as "prepaid taxes" in the following paragraph through paragraph (4)) in an amount equivalent to the increase.

②If the district director issues a refund under the preceding paragraph and the taxpayer has paid a tax on delinquency in respect of prepaid taxes in the year prescribed in that paragraph, the director also refunds the amount calculated pursuant to Cabinet Order as the part of the tax on delinquency which was for the prepaid taxes that are being refunded pursuant to that paragraph.

③When the amount of interest on refund under paragraph (1) is calculated, the period referred to in Article 58, paragraph (1) (Interest on Refunds) of the Act on General Rules for National Taxes which serves as the basis for the calculation is the period beginning on the day after that on which the prepaid taxes that are required to be refunded pursuant to the provisions of paragraph (1) are paid (or beginning on the day after the payment due date, if the prepaid taxes are paid prior to the payment due date) and ending on the day on which the tax-office decision to pay the refund is reached or on the day on which the refund is Appropriated to cover a required tax payment (or ending on the day on which the refund first could have been Appropriated, if this is before the date of the Appropriation; referred to as the "Appropriation date" in item (ii)); provided, however, that none of the days from the day after the Filing Deadline for the income tax for that year (or the day after the date of payment, if the prepaid taxes are paid after that Filing Deadline) up to whichever of the following days comes first are included as part of that period:

④If a refund under paragraph (1) is Appropriated to cover unpaid income taxes for a year in which prepaid taxes are used as the basis for calculating the amount of the refund, interest on refund does not accrue on the part of the refund so Appropriated and the tax on delinquency is waived for the part of the income taxes covered by the Appropriation.

⑤Interest on refund does not accrue on a refund under paragraph (2).

⑥Beyond what is prescribed in the preceding three paragraphs, Cabinet Order provides for the method of making an Appropriation of refunds under paragraph (1) (including interest on refund for such refunds) and for other necessary particulars concerning the application of the provisions of that paragraph or paragraph (2).