Act on Special Measures Concerning Taxation

Where an individual's assets prescribed in the following items have come to fall under the cases listed in those items (including where compensation, consideration or settlement money (hereinafter referred to as "compensation, etc." in this Subsection) has been acquired together with the assets prescribed in those items), the individual may, at the individual's option, apply the provisions of Article 28-4, Article 31 or Article 32 of this Act, or Article 27, Article 32, Article 33 or Article 35 of the Income Tax Act, by deeming that the assets transferred through the expropriation, purchase or exchange prescribed in those items (hereinafter referred to as "disposition by exchange, etc." in this Subsection) (where compensation, etc. has been acquired together with the assets prescribed in those items, the part of the transferred assets specified by Cabinet Order as the part other than the part corresponding to the amount of the compensation, etc.) have not been transferred:

where assets have been expropriated under the provisions of the Expropriation of Land Act, etc. (including where there has been a purchase that falls under the provisions of paragraph (1), item (ii) or item (iv) of the preceding Article), if assets specified by Cabinet Order as assets of the same type as those assets or as the spouse's right of residence pertaining to those assets, or as other assets that are to replace them, are acquired;

where a land improvement project under the Land Improvement Act or a project under Article 13-2, paragraph (1) of the Act on Establishment of Agricultural Promotion Regions has been implemented with regard to land, etc., if land, etc. is acquired through an exchange pertaining to that land, etc.

The provisions of paragraphs (1) through (4) of the preceding Article apply mutatis mutandis where an individual's assets prescribed in the items of the preceding paragraph have come to fall under the cases listed in those items, and the individual has acquired compensation, etc. together with the assets prescribed in those items and has acquired or is expected to acquire substitute assets with an amount equivalent to all or part of that amount, or has acquired assets that are to become substitute assets. In this case, the phrase "the transferred assets" in paragraph (1) of that Article is deemed to be replaced with "the part of the transferred assets specified by Cabinet Order as corresponding to the amount of the compensation, etc.".

The provisions of paragraph (5) and paragraph (6) of the preceding Article apply mutatis mutandis where the provisions of the preceding two paragraphs are applied.

The provisions of paragraph (7) of the preceding Article apply mutatis mutandis to a person who files the tax return prescribed in paragraph (6) of that Article as applied mutatis mutandis pursuant to the preceding paragraph. In this case, the term "substitute assets" in paragraph (7) of that Article is deemed to be replaced with "assets acquired through disposition by exchange, etc. or substitute assets".

The provisions of paragraph (8) of the preceding Article apply mutatis mutandis where the provisions of paragraph (2) are applied. In this case, the term "paragraph (3)" in paragraph (8) of that Article is deemed to be replaced with "paragraph (3) as applied mutatis mutandis pursuant to paragraph (2) of the following Article".