Act on Special Measures Concerning Taxation

Where, between a specially-related shareholder, etc. (meaning a person who falls under the category of specified shareholder, etc. as well as an individual and a corporation with a special relationship thereto as specified by Cabinet Order; hereinafter the same applies in this Subsection) and a specially-related domestic corporation, there is a relationship specified by Cabinet Order as a relationship whereby the specially-related shareholder, etc. indirectly holds shares, etc. (meaning shares or capital contributions; hereinafter the same applies in this Article) that accounts for 80 percent or more of the total number or total amount of issued shares of or capital contributions to the specially-related domestic corporation (excluding the shares or capital contributions held by the corporation; hereinafter referred to in this Article as "issued shares, etc.") (such relationship referred to in the following paragraph as a "specified relationship"), and a foreign corporation specified by Cabinet Order as acting as an intermediary between the specially-related shareholder, etc. and the specially-related domestic corporation by way of the holding of the issued shares, etc. (hereinafter referred to in this Article as a "foreign affiliated corporation"), which falls under the category of specified foreign affiliated corporation or covered affiliated foreign corporation, has an amount of applicable income in each business year (meaning a business year prescribed in Article 2, paragraph (2), item (xix); hereinafter the same applies in this Article and paragraph (2) of the following Article) beginning on or after October 1, 2007, the amount equivalent to the part of the amount of applicable income which is calculated pursuant to the method specified by Cabinet Order as the amount corresponding to the number of shares, etc. held through direct and/or indirect ownership by the resident who is the specially-related shareholder, etc. in the specified foreign affiliated corporation or covered affiliated foreign corporation, while taking into consideration the contents of the claim (meaning a claim to demand dividends of surplus and similar distributions (meaning dividends of surplus, dividends of profit or distributions of surplus prescribed in Article 23, paragraph (1), item (i) of the Corporation Tax Act; the same applies in item (iii), (a) of the following paragraph); the same applies in paragraph (8) and paragraph (10)) vested in such shares, etc. (referred to in the following Article as the "taxable amount") is deemed to be the revenue of the resident who is the specially-related shareholder, etc. categorized as miscellaneous income, and included in their gross revenue in the calculation of the amount of their miscellaneous income for the year that includes the day on which four months have elapsed since the day following the last day of the relevant business year.

In this Subsection, the meanings of the terms listed in the following items are as prescribed respectively in those items:

specified shareholder, etc.: An individual and corporation holding, at the time immediately before a specified relationship is established, shares, etc. of a specified domestic corporation (meaning a domestic corporation wherein five or fewer shareholders, etc. (meaning shareholders, etc. prescribed in Article 2, paragraph (1), item (viii)-2 of the Income Tax Act) as well as individuals and corporations that have a special relationship thereto as specified by Cabinet Order hold shares, etc. that account for 80 percent or more of the total number or total amount of its issued shares, etc. at that time; the same applies in the following item);

specially-related domestic corporation: A specified domestic corporation, or a domestic corporation specified by Cabinet Order as a corporation that has received the transfer of the majority of assets and liabilities from a specified domestic corporation;

specified foreign affiliated corporation: Any of the following foreign affiliated corporations:

a foreign affiliated corporation that falls under none of the following:

a foreign affiliated corporation that has an office, store, factory or other fixed facilities found to be necessary for conducting its principal business;

a foreign affiliated corporation that itself conducts the management, control and operation of its business in the state or territory where its head office or principal office is located (hereinafter referred to in this paragraph, paragraph (8) and paragraph (10) as the "state of the head office");

a foreign affiliated corporation whose principal business is the holding of shares, etc. of a foreign subsidiary corporation (meaning a foreign corporation whose state of the head office is the same as that of the foreign affiliated corporation and which satisfies the requirements specified by Cabinet Order, such as the requirement that the ratio of the number or amount of shares, etc. of the foreign corporation held by the foreign affiliated corporation to the total number or total amount of its issued shares, etc. is 25 percent or more), and which satisfies the requirements specified by Cabinet Order, such as the requirement that the ratio of the amount of dividends of surplus and similar distributions pertaining to those shares, etc. to its revenue is extremely high;

a foreign affiliated corporation whose principal business is the holding of shares, etc. of a specified subsidiary corporation (meaning another foreign affiliated corporation pertaining to the resident who is a specially-related shareholder, etc. that falls under the category of a partially covered foreign affiliated corporation, or any other corporation specified by Cabinet Order), and which satisfies the requirements specified by Cabinet Order, such as the requirements that the management, control and operation of its business are conducted by a management and control corporation whose state of the head office is the same as its own (meaning, among other foreign affiliated corporations pertaining to the resident, one that falls under the category of a partially covered foreign affiliated corporation and whose officers (meaning officers prescribed in Article 2, item (xv) of the Corporation Tax Act; the same applies in item (viii) and paragraph (8)) or employees engage, in its state of the head office, in all of the operations that are found to be ordinarily necessary to properly carry out its principal business; the same applies in 4. and 5.), that the management and control corporation performs functions indispensable for carrying out the business it conducts in its state of the head office, and that the ratio of the amount of dividends of surplus and similar distributions pertaining to those shares, etc. and the amount of consideration for the transfer of those shares, etc. to its revenue is extremely high;

a foreign affiliated corporation that performs functions indispensable for carrying out a business relating to the holding of real property located in its state of the head office, the exploration, development or extraction of oil or other natural resources in its state of the head office, or the development of social infrastructure in its state of the head office, and which satisfies the requirements specified by Cabinet Order, such as the requirement that the management, control and operation of its business are conducted by a management and control corporation whose state of the head office is the same as its own.

a foreign affiliated corporation for which the ratio of the sum of the amounts equivalent to the amounts listed in paragraph (8), items (i) through (vii) and items (viii) through (x) to the amount specified by Cabinet Order as the amount of its total assets (referred to in (b) as the "amount of total assets") (for a foreign affiliated corporation that would fall under the category of a foreign finance-related corporation if the provisions of item (vii) and item (viii) were applied by deeming the phrase "foreign affiliated corporation (excluding one that falls under the category of a specified foreign affiliated corporation)" in item (vii) to be replaced with "foreign affiliated corporation", the ratio of the amount equivalent to the amount listed in paragraph (10), item (i) or the sum of the amounts equivalent to the amounts listed in items (ii) through (iv) of that paragraph, whichever is greater, to the amount of total assets) exceeds 30 percent (limited to a foreign affiliated corporation for which the ratio of the amount specified by Cabinet Order as the sum of the amounts of Securities (meaning Securities prescribed in Article 2, item (xxi) of the Corporation Tax Act; the same applies in paragraph (8)), loans and other assets specified by Cabinet Order to the amount of total assets exceeds 50 percent);

a foreign affiliated corporation that satisfies all of the following requirements:

the ratio calculated pursuant to the method specified by Cabinet Order as the ratio of the total amount of premium income from non-affiliates, etc. for each business year (meaning premium income specified by Cabinet Order as being received from persons other than related parties (meaning a specially-related domestic corporation or a specially-related shareholder, etc. pertaining to the foreign affiliated corporation, or any other person specified by Cabinet Order as being equivalent thereto; the same applies in 2.); the same applies in 2.) to the total amount of premium income is less than 10 percent;

the ratio calculated pursuant to the method specified by Cabinet Order as the ratio of the total amount of reinsurance premiums paid to non-affiliates, etc. for each business year (meaning the amount specified by Cabinet Order as the amount obtained by apportioning the total amount of reinsurance premiums paid to persons other than related parties according to the ratio of the total amount of premium income from related parties, etc. (meaning premium income other than premium income from non-affiliates, etc.; the same applies in 2.) to the total amount of premium income) to the total amount of premium income from related parties, etc. is less than 50 percent.

a foreign affiliated corporation that has its head office or principal office in a state or territory designated by the Minister of Finance as a state or territory whose cooperation with international efforts for the exchange of information on taxes is significantly insufficient.

covered affiliated foreign corporation: A foreign affiliated corporation that does not satisfy one or more of the following requirements (excluding one that falls under the category of a specified foreign affiliated corporation):

it is not one whose principal business is the holding of shares, etc. or bonds, the provision of industrial property rights or other rights relating to technology, production methods involving special technology or anything equivalent thereto (including rights to use those rights) or copyrights (including rights of publication, neighboring rights and anything equivalent thereto), or the leasing of ships or aircraft (excluding, among foreign affiliated corporations whose principal business is the holding of shares, etc., one that would fall under the category of a foreign finance-related corporation if the provisions of item (viii) were applied by deeming the phrase "partially covered foreign affiliated corporation" in that item to be replaced with "foreign affiliated corporation" (excluding one that would fall under the category of a foreign financial institution prescribed in that item; referred to in (b) as a "specified foreign financial holding company"));

it both has, in its state of the head office, an office, store, factory or other fixed facilities found to be necessary for conducting its principal business (for a specified foreign financial holding company, the business management specified by Cabinet Order; the same applies in (c)), and itself conducts the management, control and operation of its business in its state of the head office;

in each business year, it falls under the case specified in each of the following according to which of the following businesses its principal business falls under:

wholesale business, banking business, trust business, financial instruments business, insurance business, water transportation business or air transportation business: The case specified by Cabinet Order in which the foreign affiliated corporation conducts business mainly with a person other than [1] a specially-related domestic corporation of the foreign affiliated corporation, [2] a specially-related shareholder, etc. or [3] any other person specified by Cabinet Order as being equivalent to the persons mentioned in [1] or [2]; or

business other than the businesses listed in 1.: The case specified by Cabinet Order in which the foreign affiliated corporation conducts business mainly in its state of the head office (including the waters pertaining to that state of the head office that are specified by Cabinet Order as prescribed in Article 40-4, paragraph (2), item (iii), (c), 2.).

amount of applicable income: An amount adjusted, with respect to the amount of income of a specified foreign affiliated corporation or covered affiliated foreign corporation in its settlement of accounts for each business year, pursuant to the method specified by Cabinet Order, based on the amount calculated in accordance with the standards specified by Cabinet Order in a manner equivalent to the manner for calculating the amount of income for each business year pursuant to the Corporation Tax Act and this Act (hereinafter referred to in this item as the "base income amount"), in terms of the amount of loss incurred in each of the business years that commenced within seven years before the first day of the relevant business year and the amount of tax pertaining to the base income amount;

number of shares, etc. held through direct and/or indirect ownership: The sum of the number or amount of shares, etc. of a foreign corporation held directly by a resident or domestic corporation and the number or amount of shares, etc. of the foreign corporation specified by Cabinet Order as being held indirectly by the resident or domestic corporation via another foreign corporation;

partially covered foreign affiliated corporation: A foreign affiliated corporation that satisfies all of the requirements listed in item (iv), (a) through (c) (excluding one that falls under the category of a specified foreign affiliated corporation);

foreign finance-related corporation: A partially covered foreign affiliated corporation that engages in the banking business, financial instruments business (limited to business of the same type as the type I financial instruments business prescribed in Article 28, paragraph (1) of the Financial Instruments and Exchange Act) or insurance business in accordance with the laws and regulations of its state of the head office and whose officers or employees engage, in its state of the head office, in all of the operations that are found to be ordinarily necessary to properly carry out those businesses (hereinafter referred to in this item as a "foreign financial institution"), and a partially covered foreign affiliated corporation specified by Cabinet Order as being equivalent to a foreign financial institution;

liquidating partially covered foreign affiliated corporation: A foreign affiliated corporation that has dissolved and that fell under the category of a partially covered foreign affiliated corporation in each of the business years that began within two years before the first day of the business year that includes the date of its dissolution;

liquidating foreign financial affiliated corporation: A foreign affiliated corporation that has dissolved and that fell under the category of a foreign finance-related corporation in each of the business years that began within one year before the first day of the business year that includes the date of its dissolution;

special liquidation business year: A business year that includes any day within the period from the end of the business year in which a liquidating partially covered foreign affiliated corporation or liquidating foreign financial affiliated corporation first ceased to fall under the category of a partially covered foreign affiliated corporation or foreign finance-related corporation to the day on which three years have elapsed from that day (if the date of determination of the residual assets of the liquidating partially covered foreign affiliated corporation or liquidating foreign financial affiliated corporation is before the day on which those three years have elapsed, the date of determination of the residual assets, and if the date of determination of the residual assets is after the day on which those three years have elapsed due to the laws and regulations or practices of its state of the head office or for any other unavoidable reason, the day specified by Cabinet Order).

When it is necessary in order to determine whether a foreign affiliated corporation of a resident falls under any of item (iii), (a), 1. through 5. of the preceding paragraph, the relevant official of the National Tax Agency or the relevant official of the tax office or Regional Taxation Bureau with jurisdiction over the place for tax payment of the resident may request the resident to present or submit, within a specified period, documents or other materials showing that the foreign affiliated corporation falls under (a), 1. through 5. of that item. In this case, if those documents or other materials are not presented or submitted, with regard to the application of the provisions of that paragraph (limited to the part pertaining to (a) of that item), the foreign affiliated corporation is presumed not to fall under (a), 1. through 5. of that item.

When it is necessary in order to determine whether a foreign affiliated corporation of a resident satisfies the requirements listed in paragraph (2), item (iv), (a) through (c), the relevant official of the National Tax Agency or the relevant official of the tax office or Regional Taxation Bureau with jurisdiction over the place for tax payment of the resident may request the resident to present or submit, within a specified period, documents or other materials showing that the foreign affiliated corporation satisfies the requirements listed in (a) through (c) of that item. In this case, if those documents or other materials are not presented or submitted, with regard to the application of the provisions of that paragraph (limited to the part pertaining to that item or item (vii)), the foreign affiliated corporation is presumed not to satisfy the requirements listed in item (iv), (a) through (c) of that paragraph.

When it is necessary in order to determine whether a foreign affiliated corporation of a resident falls under the category of either a liquidating partially covered foreign affiliated corporation or a liquidating foreign financial affiliated corporation, the relevant official of the National Tax Agency or the relevant official of the tax office or Regional Taxation Bureau with jurisdiction over the place for tax payment of the resident may request the resident to present or submit, within a specified period, documents or other materials showing that the foreign affiliated corporation falls under the category of a liquidating partially covered foreign affiliated corporation or a liquidating foreign financial affiliated corporation. In this case, if those documents or other materials are not presented or submitted, with regard to the application of the provisions of paragraph (2) (limited to the part pertaining to item (ix) or item (x)), the foreign affiliated corporation is presumed not to fall under the category of a liquidating partially covered foreign affiliated corporation or a liquidating foreign financial affiliated corporation.

When it is necessary in order to determine whether each business year of a foreign affiliated corporation of a resident falls under the category of a special liquidation business year, the relevant official of the National Tax Agency or the relevant official of the tax office or Regional Taxation Bureau with jurisdiction over the place for tax payment of the resident may request the resident to present or submit, within a specified period, documents or other materials showing that the relevant business year falls under the category of a special liquidation business year. In this case, if those documents or other materials are not presented or submitted, with regard to the application of the provisions of paragraph (2) (limited to the part pertaining to item (xi)), the relevant business year is presumed not to fall under the category of a special liquidation business year.

The provisions of paragraph (1) do not apply to the amount of applicable income of a foreign affiliated corporation listed in each of the following items of a resident who is a specially-related shareholder, etc. for the business year to which the fact applies, if there is a fact that falls under the case specified in the relevant item with respect to that foreign affiliated corporation:

specified foreign affiliated corporation: The case where the tax burden ratio of the specified foreign affiliated corporation for each business year (meaning the ratio calculated pursuant to the method specified by Cabinet Order as the ratio of the amount of taxes imposed on the income of a foreign affiliated corporation for each business year to the amount of that income; the same applies in the following item, paragraph (12) and paragraph (14)) is 27 percent or more;

covered affiliated foreign corporation: The case where the tax burden ratio of the covered affiliated foreign corporation for each business year is 20 percent or more.

Where a partially covered foreign affiliated corporation of a resident who is a specially-related shareholder, etc. (excluding one that falls under the category of a foreign finance-related corporation; hereinafter the same applies in this paragraph and the following paragraph) has, in each business year beginning on or after April 1, 2010, the following amounts for the relevant business year (hereinafter referred to in this paragraph as the "amount of specified income"), the amount equivalent to the amount calculated pursuant to the method specified by Cabinet Order, out of the partially applicable amount pertaining to the amount of specified income for the relevant business year, as the amount corresponding to the number of shares, etc. held through direct and/or indirect ownership by the resident who is the specially-related shareholder, etc. in the partially covered foreign affiliated corporation, while taking into consideration the contents of the claim vested in such shares, etc. (referred to in the following Article as the "partially taxable amount") is deemed to be the revenue of the resident who is the specially-related shareholder, etc. categorized as miscellaneous income, and included in their gross revenue in the calculation of the amount of their miscellaneous income for the year that includes the day on which four months have elapsed since the day following the last day of the relevant business year:

the amount remaining after deducting, from the total amount of dividends of surplus and similar distributions (meaning dividends of surplus and similar distributions prescribed in paragraph (1), including distributions of monies prescribed in Article 23, paragraph (1), item (ii) of the Corporation Tax Act; hereinafter the same applies in this item and item (xi), (a)) (excluding the amount of dividends of surplus and similar distributions received from another corporation in the case where the requirements specified by Cabinet Order are satisfied, such as the requirement that the ratio of the number or amount of shares, etc. of the other corporation held by the partially covered foreign affiliated corporation to the total number or total amount of its issued shares, etc. is 25 percent or more (excluding the amount of dividends of surplus and similar distributions specified by Cabinet Order as the amount of dividends of surplus and similar distributions that is to be included in deductible expenses in the calculation of the amount of income of the other corporation); hereinafter the same applies in this item), the total amount of expenses directly incurred to obtain that amount of dividends of surplus and similar distributions and the amount calculated pursuant to the method specified by Cabinet Order as the amount of expenses pertaining to that amount of dividends of surplus and similar distributions;

the amount remaining after deducting, from the total amount of interest received, etc. (meaning interest that it receives (including anything specified by Cabinet Order as being equivalent thereto; hereinafter the same applies in this item); hereinafter the same applies in this item and item (xi), (b)) (excluding the amount of interest on deposits or savings (including those equivalent to those specified by Cabinet Order as prescribed in Article 2, paragraph (1), item (x) of the Income Tax Act) arising in the ordinary course of operations pertaining to its business, the amount of interest pertaining to loans of money made by a partially covered foreign affiliated corporation whose principal business is the lending of money (limited to one that has obtained a license or registration or any other similar disposition in its state of the head office under the provisions of the laws and regulations of its state of the head office with respect to engaging in the lending of money as a business) and whose officers or employees engage, in its state of the head office, in all of the operations that are found to be ordinarily necessary to properly carry out its business of lending money, and the amount of any other interest specified by Cabinet Order; hereinafter the same applies in this item), the total amount of expenses directly incurred to obtain that amount of interest received, etc.;

the amount remaining after deducting, from the total amount of consideration for the lending of Securities, the total amount of expenses directly incurred to obtain that consideration;

the amount obtained by subtracting, from the total amount of consideration for the transfer of Securities (excluding the amount of consideration for the transfer of shares, etc. of another corporation in the case where the ratio of the number or amount of shares, etc. of the other corporation held by the partially covered foreign affiliated corporation to the total number or total amount of its issued shares, etc. is 25 percent or more immediately before the transfer; hereinafter the same applies in this item), the total amount calculated pursuant to the method specified by Cabinet Order as the cost of the transfer of those Securities and the total amount of expenses directly incurred to obtain that consideration;

the amount calculated pursuant to the provisions of Order of the Ministry of Finance as the amount of profit or the amount of loss pertaining to derivative transactions (meaning derivative transactions prescribed in Article 61-5, paragraph (1) of the Corporation Tax Act; hereinafter the same applies in this item and item (xi), (e)) (excluding the amount of profit or the amount of loss pertaining to derivative transactions specified by Order of the Ministry of Finance as derivative transactions conducted to reduce the losses listed in the items of Article 61-6, paragraph (1) of that Act, the amount of profit or the amount of loss pertaining to derivative transactions specified by Order of the Ministry of Finance that are conducted by a partially covered foreign affiliated corporation that engages, as a business, in acts equivalent to the acts listed in the items of Article 2, paragraph (22) of the Commodity Derivatives Transaction Act in accordance with the laws and regulations of its state of the head office (limited to one whose officers or employees engage, in its state of the head office, in all of the operations that are found to be ordinarily necessary to properly carry out the business pertaining to those acts), and the amount of profit or the amount of loss pertaining to any other derivative transactions specified by Order of the Ministry of Finance);

the amount calculated pursuant to the provisions of Order of the Ministry of Finance as the amount of profit or the amount of loss arising from fluctuations in foreign exchange rates with respect to transactions it conducts or assets or liabilities it holds (excluding the amount of profit or the amount of loss arising in the ordinary course of operations pertaining to its business (excluding a business of conducting transactions specified by Cabinet Order));

the amount of profit or the amount of loss arising from the investment, holding, transfer, or lending of, or any other act involving, assets that give rise to the amount of profit or the amount of loss pertaining to the amounts listed in the preceding items (including any amount of profit or amount of loss similar thereto) (excluding the amount of profit or the amount of loss pertaining to the amounts listed in those items and the amount of profit or the amount of loss pertaining to transactions specified by Order of the Ministry of Finance as transactions conducted to reduce the losses listed in the items of Article 61-6, paragraph (1) of the Corporation Tax Act);

the amount obtained by subtracting the amount listed in (b) from the amount listed in (a):

the amount specified by Cabinet Order as the amount equivalent to the balance remaining after deducting the total amount of reinsurance premiums paid from the total amount of premium income;

the amount specified by Cabinet Order as the amount equivalent to the balance remaining after deducting the total amount of reinsurance proceeds received from the total amount of insurance proceeds paid.

the amount remaining after deducting, from the total amount of consideration for the lending of fixed assets (meaning fixed assets prescribed in Article 2, item (xxii) of the Corporation Tax Act, excluding those specified by Cabinet Order; hereinafter the same applies in this item and item (xi), (i)) (including acts of allowing the use of real property or rights existing on real property) (excluding the amount of consideration for the lending of fixed assets (excluding real property and rights existing on real property) that are mainly used in its state of the head office, the amount of consideration for the lending of real property or rights existing on real property located in its state of the head office (including acts of allowing the use thereof), and the amount of consideration for the lending of fixed assets by a partially covered foreign affiliated corporation that satisfies the requirements specified by Cabinet Order, such as the requirement that its officers or employees engage, in its state of the head office, in all of the operations that are found to be ordinarily necessary to properly carry out the lending of fixed assets (including acts of allowing the use of real property or rights existing on real property; hereinafter the same applies in this item and item (xi), (i)); hereinafter the same applies in this item), the total amount of expenses directly incurred to obtain that consideration (including the amount calculated pursuant to the method specified by Cabinet Order as the amount of depreciation allowances pertaining to fixed assets it holds);

the amount remaining after deducting, from the total amount of royalties for industrial property rights or other rights relating to technology, production methods involving special technology or anything equivalent thereto (including rights to use those rights), or copyrights (including rights of publication, neighboring rights and anything equivalent thereto) (hereinafter referred to in this paragraph as "intangible assets, etc.") (excluding royalties for intangible assets, etc. pertaining to the results of research and development conducted by itself and any other royalties specified by Cabinet Order; hereinafter the same applies in this item), the total amount of expenses directly incurred to obtain those royalties (including the amount calculated pursuant to the method specified by Cabinet Order as the amount of depreciation allowances pertaining to intangible assets, etc. it holds);

the amount obtained by subtracting, from the total amount of consideration for the transfer of intangible assets, etc. (excluding the amount of consideration for the transfer of intangible assets, etc. pertaining to the results of research and development conducted by itself and the amount of any other consideration specified by Cabinet Order; hereinafter the same applies in this item), the total amount of costs of the transfer of those intangible assets, etc. and the total amount of expenses directly incurred to obtain that consideration;

the amount remaining after deducting the amount listed in (l) for the relevant business year from the amount specified by Cabinet Order as the amount of income of the partially covered foreign affiliated corporation for each business year that would be calculated if there were none of the amounts listed in (a) through (k):

the amount of dividends of surplus and similar distributions it receives;

the amount of interest received, etc.;

the amount of consideration for the lending of Securities;

the amount obtained by subtracting, from the total amount of consideration for the transfer of Securities, the total amount calculated pursuant to the method specified by Cabinet Order as the cost of the transfer of those Securities;

the amount calculated pursuant to the provisions of Order of the Ministry of Finance as the amount of profit or the amount of loss pertaining to derivative transactions;

the amount calculated pursuant to the provisions of Order of the Ministry of Finance as the amount of profit or the amount of loss arising from fluctuations in foreign exchange rates with respect to transactions it conducts or assets or liabilities it holds;

the amount of profit or the amount of loss arising from the investment, holding, transfer, or lending of, or any other act involving, assets that give rise to the amount of profit or the amount of loss pertaining to the amounts listed in items (i) through (vi) (including any amount of profit or amount of loss similar thereto) (excluding the amount of profit or the amount of loss pertaining to the amounts listed in those items);

the amount listed in item (vii)-2;

the amount of consideration for the lending of fixed assets;

royalties received for intangible assets, etc.;

the amount obtained by subtracting, from the total amount of consideration for the transfer of intangible assets, etc., the total amount of costs of the transfer of those intangible assets, etc.;

the amount calculated by multiplying the amount obtained by adding the amount of personnel expenses and other expenses specified by Cabinet Order to the amount specified by Cabinet Order as the amount of total assets, by 50 percent.

The partially applicable amount prescribed in the preceding paragraph means the sum of the total of the amounts listed in items (i) through (iii), item (viii), item (ix) and item (xi) of that paragraph for each business year of a partially covered foreign affiliated corporation, and the amount obtained by making adjustments pursuant to the method specified by Cabinet Order, based on the total of the amounts listed in items (iv) through (vii)-2 and item (x) of that paragraph for the relevant business year (if that total is less than zero, zero), with regard to the amount of the portion by which the total of the amounts listed in items (iv) through (vii)-2 and item (x) of that paragraph arising in each business year that began within seven years before the first day of the relevant business year fell below zero.

Where a partially covered foreign affiliated corporation of a resident who is a specially-related shareholder, etc. (limited to one that falls under the category of a foreign finance-related corporation; hereinafter the same applies in this paragraph and the following paragraph) has, in each business year beginning on or after April 1, 2010, the following amounts for the relevant business year (hereinafter referred to in this paragraph as the "amount of specified income"), the amount equivalent to the amount calculated pursuant to the method specified by Cabinet Order, out of the partially applicable amount for a financial affiliated corporation pertaining to the amount of specified income for the relevant business year, as the amount corresponding to the number of shares, etc. held through direct and/or indirect ownership by the resident who is the specially-related shareholder, etc. in the partially covered foreign affiliated corporation, while taking into consideration the contents of the claim vested in such shares, etc. (referred to in the following Article as the "partially taxable amount for a financial affiliated corporation") is deemed to be the revenue of the resident who is the specially-related shareholder, etc. categorized as miscellaneous income, and included in their gross revenue in the calculation of the amount of their miscellaneous income for the year that includes the day on which four months have elapsed since the day following the last day of the relevant business year:

the amount calculated pursuant to the method specified by Cabinet Order as the amount of profit pertaining to the capital equivalent to the excess, in the case where the amount equivalent to the parent company's equity, etc. of a partially covered foreign affiliated corporation whose issued shares, etc. are all held directly or indirectly by a single resident who is a specially-related shareholder, etc. and which satisfies the requirements specified by Cabinet Order (limited to one for which the ratio of the amount specified by Cabinet Order as the amount obtained by making adjustments to its net assets with regard to surplus and other matters (hereinafter referred to in this item as the "amount equivalent to the parent company's equity, etc.") to the amount specified by Cabinet Order as the amount of its total assets exceeds 70 percent) exceeds the amount specified by Cabinet Order by taking into consideration the amount of capital below which it may not fall under the laws and regulations of its state of the head office;

the amount equivalent to the amount listed in paragraph (8), item (viii) that is obtained when the amount is calculated for the partially covered foreign affiliated corporation in accordance with the provisions of that item;

the amount equivalent to the amount listed in paragraph (8), item (ix) that is obtained when the amount is calculated for the partially covered foreign affiliated corporation in accordance with the provisions of that item;

the amount equivalent to the amount listed in paragraph (8), item (x) that is obtained when the amount is calculated for the partially covered foreign affiliated corporation in accordance with the provisions of that item;

the amount equivalent to the amount listed in paragraph (8), item (xi) that is obtained when the amount is calculated for the partially covered foreign affiliated corporation in accordance with the provisions of that item.

The partially applicable amount for a financial affiliated corporation prescribed in the preceding paragraph means whichever is the greater of the following amounts for each business year of a partially covered foreign affiliated corporation:

the amount listed in item (i) of the preceding paragraph;

the sum of the total of the amounts listed in item (ii), item (iii) and item (v) of the preceding paragraph, and the amount obtained by making adjustments pursuant to the method specified by Cabinet Order, based on the amount listed in item (iv) of that paragraph (if that amount is less than zero, zero), with regard to the amount of the portion by which the amount listed in that item arising in each business year that began within seven years before the first day of the relevant business year fell below zero.

The provisions of paragraph (8) and paragraph (10) do not apply to the partially applicable amount (meaning the partially applicable amount prescribed in paragraph (9); hereinafter the same applies in this paragraph) or the partially applicable amount for a financial affiliated corporation (meaning the partially applicable amount for a financial affiliated corporation prescribed in the preceding paragraph; hereinafter the same applies in this paragraph) of a partially covered foreign affiliated corporation of a resident who is a specially-related shareholder, etc. for the business year to which the fact applies, if any of the following facts applies to the partially covered foreign affiliated corporation:

the tax burden ratio for each business year is 20 percent or more;

the partially applicable amount or the partially applicable amount for a financial affiliated corporation in each business year is 20 million yen or less;

the ratio of the partially applicable amount or the partially applicable amount for a financial affiliated corporation in each business year to the amount specified by Cabinet Order as the amount equivalent to the amount of income based on the settlement of accounts for the relevant business year is 5 percent or less.

Where a foreign affiliated corporation of a resident who is a specially-related shareholder, etc. comes to fall under the category of a liquidating partially covered foreign affiliated corporation or a liquidating foreign financial affiliated corporation, the provisions of this Subsection apply to the special liquidation business year of the liquidating partially covered foreign affiliated corporation or liquidating foreign financial affiliated corporation, by deeming the liquidating partially covered foreign affiliated corporation to be a partially covered foreign affiliated corporation and the liquidating foreign financial affiliated corporation to be a foreign finance-related corporation, respectively.

A resident who is a specially-related shareholder, etc. must attach a balance sheet and profit and loss statement for each business year regarding the following foreign affiliated corporations of the resident as well as any other documents specified by Order of the Ministry of Finance, to their tax return for the year that includes the day on which four months have elapsed since the day following the last day of the relevant business year:

a partially covered foreign affiliated corporation whose tax burden ratio for each business year concerned is less than 20 percent (excluding any partially covered foreign affiliated corporation to which either of the facts referred to in paragraph (12), item (ii) or item (iii) applies in the relevant business year (referred to in the following paragraph as a "partially covered foreign affiliated corporation exempt from attachment"));

a covered affiliated foreign corporation whose tax burden ratio for each business year concerned is less than 20 percent;

a specified foreign affiliated corporation whose tax burden ratio for each business year concerned is less than 27 percent.

A resident who is a specially-related shareholder, etc. must, pursuant to the provisions of Order of the Ministry of Finance, retain a balance sheet and profit and loss statement for each business year of a partially covered foreign affiliated corporation exempt from attachment of the resident as well as any other documents specified by Order of the Ministry of Finance.

The provisions of paragraph (1), paragraph (8), paragraph (10) and the preceding three paragraphs do not apply where a foreign affiliated corporation of a resident who is a specially-related shareholder, etc. falls under the category of foreign affiliated company prescribed in Article 40-4, paragraph (2), item (i) and the resident who is the specially-related shareholder, etc. falls under the category of resident listed in each item of Article 40-4, paragraph (1).

Where a resident who is a specially-related shareholder, etc. holds, directly or indirectly, a beneficial right of a foreign trust (meaning a foreign investment trust prescribed in Article 2, paragraph (24) of the Act on Investment Trusts and Investment Corporations, which is similar to a specified investment trust prescribed in Article 68-3-3, paragraph (1); hereinafter the same applies in this paragraph), the trustee of the foreign trust is deemed to be a different person for each of the trust assets, etc. under the foreign trust (meaning assets and liabilities included in the trust property and profits and expenses attributed to the trust property; hereinafter the same applies in this paragraph) and the trustee's own assets, etc. (meaning the trustee's assets and liabilities as well as profits and expenses other than those included in the trust assets, etc. under the foreign trust), and the provisions of this Article through Article 40-9 are applied thereto.

The provisions of Article 4-2, paragraph (2) and Article 4-3 of the Corporation Tax Act apply mutatis mutandis in the case where the provisions of the preceding paragraph apply.

When the Minister of Finance has designated a state or territory pursuant to the provisions of paragraph (2), item (iii), (d), the Minister is to give public notice thereof.