This Act comes into effect on April 1, 1965.

Except as otherwise provided in these Supplementary Provisions, the provisions of the Income Tax Act as amended (hereinafter referred to as "the New Act") apply to income tax for 1965 and subsequent years, and the provisions then in force continue to govern income tax for 1964 and prior years.

Any approval or designation, or any return, application, claim, notification, or other disposition or procedure, made before the date on which this Act comes into effect (hereinafter referred to as "the Effective Date") pursuant to the provisions of the Income Tax Act before the amendment (hereinafter referred to as "the Former Act") or an order based on it, for which the New Act or an order based on it has corresponding provisions, is deemed, except as otherwise provided in these Supplementary Provisions, to be the corresponding disposition or procedure made pursuant to the corresponding provisions of the New Act or an order based on it.

①Article 9, paragraph (1), item (ii) (Nontaxable Income) of the New Act applies to interest on Deposits and Savings or distributions of proceeds from a Jointly Managed Trust as prescribed in that item which are to be received on or after the Effective Date, and the provisions then in force continue to govern such interest or distributions of proceeds which are to be received before that date.

②Article 9, paragraph (1), items (iv), (v), and (xviii) of the New Act apply to money, valuables, or benefits set forth in those items which are to be received on or after the Effective Date, and the provisions then in force continue to govern such money, valuables, or benefits which are to be received before that date.

③Article 9, paragraph (1), item (xiv) and paragraph (2), item (vi) of the New Act apply where an individual receives money or other assets as a distribution of residual assets from a corporation dissolved on or after the Effective Date, and the provisions then in force continue to govern where an individual receives money or other assets as a distribution of residual assets from a corporation dissolved before that date.

①Article 10 (Nontaxability of Interest Income from Small Deposits and Similar Savings) of the New Act applies to Deposits and Savings, Jointly Managed Trusts, or Securities prescribed in paragraph (1) of that Article which are deposited, placed in trust, or purchased on or after the Effective Date.

②If a Resident holds deposits, Jointly Managed Trusts, or Securities prescribed in the items of Article 6-2, paragraph (1) (Nontaxability of Interest Income from Small Deposits and Similar Savings) of the Former Act which the Resident deposited, placed in trust, or purchased before the Effective Date and which, at the time the New Act comes into effect, satisfy the requirements prescribed in that Article, those deposits, Jointly Managed Trusts, or Securities, other than those prescribed in paragraph (1) of the preceding Article, are deemed to have been deposited, placed in trust, or purchased by that Resident on that date in accordance with the requirements of Article 10 of the New Act, and that Article applies to them.

Article 17 (Locality for Paying Over Withholding Tax) and Article 18, paragraph (2) (Designation of Locality for Paying Over Taxes) of the New Act apply to income tax on payments prescribed in those provisions which are made on or after the Effective Date, and the provisions then in force continue to govern income tax on payments made before that date.

Article 24 (Dividend Income) of the New Act applies to interest on funds prescribed in paragraph (1) of that Article which is to be received on or after the Effective Date, and the provisions then in force continue to govern such interest on funds which is to be received before that date.

Articles 42 through 44 (Exclusion of Government Subsidies and Their Equivalent from Gross Revenue and Related Matters) of the New Act apply where an individual receives, on or after the Effective Date, a government subsidy or its equivalent prescribed in Article 42, paragraph (1) of the New Act, a Fixed Asset prescribed in paragraph (2) of that Article, or a grant of an amount prescribed in Article 44, paragraph (1) of the New Act, and the provisions then in force continue to govern where such a grant was received before that date.

①The amount of a bad debt reserve account, severance package reserve account, or special repair reserve account under the provisions of the Former Act (including orders based on it; the same applies hereinafter in this Article) that an individual holds as of January 1, 1965 (excluding any amount already required to be reversed under the provisions of the Former Act; hereinafter referred to as the "balance of former bad-debt and similar reserves" in this Article) is deemed to be, respectively, the amount of the bad debt reserve account, severance package reserve account, or special repair reserve account included in necessary expenses in calculating that individual's business income or real property income for each year pursuant to Article 52, paragraph (1) (Bad Debt Reserves), Article 54, paragraph (1) (Reserves for Severance Packages), or Article 55, paragraph (1) (Special Repair Reserves) of the New Act.

②The provisions of the preceding paragraph apply mutatis mutandis to the balance of former bad-debt and similar reserves where an individual has succeeded to the balance of former bad-debt and similar reserves from the decedent through an inheritance that commenced during the period from January 1, 1965 to the day before the Effective Date.

Articles 58 through 60 (Special Provisions on Capital Gains and Similar Income in the Case of an Exchange of Fixed Assets) of the New Act apply where an exchange prescribed in Article 58, paragraph (1) of the New Act, or a gift, inheritance, bequest, or transfer set forth in the items of Article 59, paragraph (1) or the items of Article 60, paragraph (1) of the New Act, takes place on or after the Effective Date, and the provisions then in force continue to govern where such an exchange, or such a gift, inheritance, bequest, or transfer, took place before that date.

Article 63 (Special Provisions on Necessary Expenses In the Event of a Business Closure) and Article 64 (Special Provisions on Calculation of Income If Payment for Transferred Assets Becomes Uncollectible) and Article 152 (Special Provisions on Requests for Reassessment If Income in Each Class Changes) (including as applied mutatis mutandis pursuant to Article 167 (Application Mutatis Mutandis to Nonresidents) of the New Act) of the New Act apply where the facts prescribed in those provisions arise on or after the Effective Date, and the provisions then in force continue to govern where such facts arose before that date.

Where Article 70, paragraph (1) or (2) (Deduction for Carryover of Net Loss) or Article 71, paragraph (1) (Deduction for Carryover of Casualty Loss) of the New Act is applied, if the Net Loss or Casualty Loss incurred in any year within the three years before the relevant year as prescribed in those provisions includes an amount deducted in calculating gross income, retirement income, or timber income for any year pursuant to Article 9-4, paragraph (1) or (3) (Deduction for Carryover of Net Loss or Casualty Loss) of the Former Act, or an amount that served as the basis for calculating the amount to be refunded pursuant to Article 36 (Refund Based on Carryback of Net Loss) of the Former Act, the amount obtained by deducting those amounts from the amount equivalent to that Net Loss or Casualty Loss is deemed to be that Net Loss or Casualty Loss.