①The provisions of Article 7, paragraph (1), item (iv) (Scope of Taxable Income), Article 174 (Tax Base for a Domestic Corporation's Income Taxes), and Article 175 (Tax Rates for a Domestic Corporation's Income Taxes) do not apply to dividends and similar income as prescribed in Article 24, paragraph (1) (Dividend Income) which a Domestic Corporation (excluding general incorporated associations and general incorporated foundations (other than incorporated public interest associations and incorporated public interest foundations), worker cooperatives, Associations or Foundations without Legal Personality, and those prescribed by Cabinet Order which are deemed to be public interest corporations, etc. as prescribed in Article 2, item (vi) (Definitions) of the Corporation Tax Act by an Act other than the Corporation Tax Act (referred to as "general incorporated association or similar corporation" in the following paragraph); hereinafter the same applies in this Article) is paid and which relate to shares or similar interests (meaning shares or similar interests as prescribed in paragraph (1) of Article 23 of that Act, limited to those which the Domestic Corporation holds in its own name; the same applies in the following paragraph) that fall under shares or similar interests of wholly owned subsidiaries of the Domestic Corporation as prescribed in Article 23, paragraph (5) (Exclusion of Dividends Received from Gross Profits) of that Act.

②The provisions of Article 7, paragraph (1), item (iv), Article 174, and Article 175 do not apply to dividends and similar income as prescribed in Article 24, paragraph (1) which a Domestic Corporation (limited to a Domestic Corporation in a case prescribed by Cabinet Order as one in which the Domestic Corporation holds shares or similar interests whose number or amount exceeds one third of the total number or total amount of the shares issued or capital contributions (excluding its own shares or similar interests held by the other Domestic Corporation) of another Domestic Corporation (excluding general incorporated associations or similar corporations)) is paid and which relate to shares or similar interests of that other Domestic Corporation (excluding shares or similar interests that fall under shares or similar interests of wholly owned subsidiaries as prescribed in the preceding paragraph).

The tax base for income taxes imposed on a Foreign Corporation is the amounts of domestic source income set forth in Article 161, paragraph (1), items (iv) through (xi) and items (xiii) through (xvi) (Domestic Source Income) which the Foreign Corporation is to be paid (excluding what is prescribed by Cabinet Order) (or, in the case of domestic source income as set forth in Article 169, item (i), item (ii), item (iv), and item (v) (Income Tax Base for Separate Taxation), the amounts prescribed in those provisions).

Income taxes are imposed on a Foreign Corporation in the amounts that each of the following items prescribes for the category to which the item refers:

①If a Foreign Corporation with a permanent establishment which satisfies the requirements prescribed by Cabinet Order and which is paid domestic source income set forth in Article 161, paragraph (1), items (iv) through (vii), item (x), item (xi), item (xiii), or item (xiv) (Domestic Source Income) (for consideration as prescribed in item (v) of that paragraph, limited to that related to what is attributed to the trust property of a trust as prescribed in the proviso to Article 13, paragraph (1) (Attribution of Trust Property Assets and Liabilities and of Proceeds and Expenses Attributable to Trust Property) which has been established as a trust at a business office located in Japan) which is attributed to the permanent establishment of the Foreign Corporation (for domestic source income set forth in Article 161, paragraph (1), item (iv), limited to that attributed to a permanent establishment other than the permanent establishment related to the business prescribed in that item; hereinafter referred to as "covered domestic source income" in this paragraph) is issued a certificate, pursuant to Cabinet Order, by the competent district director for the locality in which the corporation pays corporation taxes (hereinafter referred to as the "competent district director" in this Article), certifying that the corporation being paid the domestic source income satisfies those requirements and that the domestic source income that the corporation is paid falls under the category of covered domestic source income, and the corporation presents that certificate to the person paying the domestic source income, the provisions of Article 7, paragraph (1), item (v) (Scope of a Foreign Corporation's Taxable Income) and the preceding two Articles do not apply to the domestic source income that the corporation is paid while the certificate remains valid.

②If, after being issued the certificate prescribed in the preceding paragraph, a Foreign Corporation as prescribed in that paragraph ceases to satisfy the requirements provided for in that paragraph or ceases to have a permanent establishment, the corporation must report this to the competent district director and notify the person to which it has presented the certificate of the same without undue delay on or after the day that it ceases to satisfy those requirements or ceases to have a permanent establishment, pursuant to Cabinet Order.

③If the competent district director finds that a Foreign Corporation as prescribed in paragraph (1) has ceased to satisfy the requirements provided for in that paragraph or ceased to have a permanent establishment after being issued a certificate as prescribed in that paragraph, the director is to notify the corporation that has been issued the certificate of this, via a paper-based notice.

④In a case as referred to in the preceding paragraph, the person notified as prescribed in that paragraph must notify the person to which it has presented the certificate prescribed in paragraph (1) that it has been so notified without undue delay after the day on which it is notified.

⑤Having received a report under paragraph (2) or having notified a corporation pursuant to paragraph (3), the competent district tax office director is to issue public notice, pursuant to Ministry of Finance Order, giving the name of the corporation that has so reported or that has been so notified, and giving any other information prescribed by Ministry of Finance Order.

⑥The certificate prescribed in paragraph (1) becomes invalid if:

①If a trust company that is a Foreign Corporation (this includes a financial institution as prescribed in Article 1, paragraph (1) (Approval for Additional Business) of the Act on Engagement in Trust Business by Financial Institutions which is engaged in trust business as prescribed in that paragraph pursuant to that Act; referred to as a "foreign trust company" in the following paragraph) has an entry made in the books kept by a person paying domestic source income as set forth in Article 161, paragraph (1), item (viii) (other than (c) of that item) or item (ix) (Domestic Source Income), indicating that a public and corporate bond or similar interest as prescribed in Article 176, paragraph (1) (Special Provisions on Taxation of Interest and Similar Income from Trust Property) which constitutes a part of the trust property of a Securities Investment Trust as prescribed in that paragraph and of which the trust company has undertaken to act as trustee is a part of the trust property, or if the trust company has a record made of any other information prescribed by Ministry of Finance Order, the provisions of Article 7, paragraph (1), item (v) (Scope of a Foreign Corporation's Taxable Income), Article 178 (Tax Base for a Foreign Corporation's Income Taxes), and Article 179 (Tax Rates for a Foreign Corporation's Income Taxes) do not apply to domestic source income that is paid during the time that such information on the public and corporate bond or similar interest remains on the books.

②If a foreign trust company has a record made in the books kept by a person paying domestic source income as set forth in Article 161, paragraph (1), item (viii) (other than (c) of that item), item (ix), or item (xvi), indicating that a public and corporate bond or similar interest as prescribed in Article 176, paragraph (2) which constitutes a part of the trust property of a retirement pension trust as prescribed in that paragraph and of which the trust company has undertaken to act as trustee is a part of the trust property, or if the trust company has a record made of any other information prescribed by Ministry of Finance Order, the provisions of Article 7, paragraph (1), item (v), Article 178, and Article 179 do not apply to domestic source income that is paid during the time that such information on the public and corporate bond or similar interest remains on the books.

③The income taxes paid by a Foreign Corporation on the trust property of a group investment trust (meaning a group investment trust as prescribed in Article 176, paragraph (3); hereinafter the same applies in this Article) of which the corporation has undertaken to act as trustee (limited to the part corresponding to income taxes that would be required to be withheld on the distribution of proceeds pursuant to the following Article or Article 212 (Obligation to Withhold Taxes) if the proceeds on which those income taxes were imposed were distributed (excluding the part corresponding only to what is set forth in Article 9, paragraph (1), item (xi) (Nontaxable Income)), and including any taxes prescribed by Cabinet Order which are equivalent to income taxes imposed pursuant to foreign laws or orders as prescribed in Article 176, paragraph (3); the same applies in the following paragraph) are credited against the income taxes on distributions of proceeds from that group investment trust, pursuant to Cabinet Order.

④The income taxes paid on the trust property of a group investment trust which are to be credited pursuant to the preceding paragraph are added to the distributions of proceeds from the group investment trust when those distributions of proceeds are calculated.

⑤Beyond what is prescribed in the preceding paragraph, Cabinet Order provides for particulars concerning the notice that the Foreign Corporation referred to in paragraph (3) gives to a person paid distributions of proceeds from a group investment trust, particulars concerning the amount of tax withheld as prescribed in Article 120, paragraph (1), item (iv) (Filing an Income Tax Return) which that person deducts from the income tax set forth in item (iii) of that paragraph and states in a return under that paragraph, and other necessary particulars concerning the application of the provisions of paragraph (3).