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.