Act on Special Measures Concerning Taxation

Where a corporation has made a transfer, etc. of land, the amount of corporation tax to be imposed on the corporation on its income for each business year is to be, notwithstanding the provisions of Article 66, paragraphs (1) to (3) and paragraph (6), Article 69, paragraph (19) (including as applied mutatis mutandis pursuant to paragraph (23) or paragraph (24) of that Article), and Article 143, paragraph (1) and paragraph (2) of the Corporation Tax Act, the provisions of Article 42-4, paragraph (8), item (vi), (b) and item (vii) (including as applied mutatis mutandis pursuant to Article 42-4-2, paragraph (2) or Article 42-5, paragraph (3), item (ii)), Article 42-14, paragraph (1) and paragraph (4), Article 62, paragraph (1) and paragraph (9), paragraph (1) of the following Article, Article 67-2, paragraph (1), and Article 68, paragraph (1), and the provisions of other corporation tax-related laws and regulations, the sum of the amount of corporation tax calculated pursuant to these provisions plus the amount obtained by multiplying the total of the amount of capital gain from the transfer, etc. of land (excluding transfer, etc. to which the provisions of paragraph (1) of the following Article applies) by the rate of five percent.

In this Article, the terms listed in the following items have the meanings as specified in the respective items:

transfer, etc. of land: These mean the following acts:

transfer of land (limited to land in Japan; hereinafter the same applies in this item) or any right on land (hereinafter referred to in this Section as "land, etc.") (excluding transfer of land, etc. as a result of qualified capital contribution in kind or qualified in-kind distribution and including the following acts):

transfer of land, etc. as a result of a merger (excluding a qualified merger) or a company split (excluding a qualified company split);

the creation of a superficies right or right of lease or any other act of having another person (including, in the case of a foreign corporation, the head office, etc. prescribed in Article 138, paragraph (1), item (i) of the Corporation Tax Act) use land for a long period of time under a contract, which is specified by Cabinet Order;

an act of receiving remuneration for acting as an agent or intermediary in the sale or exchange of land, etc. and any other act specified by Cabinet Order as being equivalent to the transfer of land, etc.

transfer of shares (including units of investment prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations; hereinafter the same applies in this Chapter) or capital contributions issued by a corporation whose assets mainly consist of land, etc. (excluding the part of the shares or capital contributions falling under the category of the capital contributions, units of investment, or beneficial interests listed as follows) (such transfer is to exclude transfer as a result of qualified capital contribution in kind, qualified in-kind distribution, or qualified share distribution prescribed in Article 2, item (xii)-15-3 of the Corporation Tax Act and includes transfer as a result of a merger (excluding a qualified merger) or a company split (excluding a qualified company split)) and which is specified by Cabinet Order as being equivalent to transfer of land, etc.;

preferred equity prescribed in Article 2, paragraph (5) of the Act on the Securitization of Assets and specified equity prescribed in paragraph (6) of that Article, of a special purpose company prescribed in Article 2, paragraph (3) of that Act that falls under those listed in Article 67-14, paragraph (1), item (i), (b), 1. or 2. or those listed in (b), 3. or 4. of that item (excluding one that falls under the category of a family corporation prescribed in item (ii), (d) of that paragraph);

units of investment prescribed in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations of an investment corporation prescribed in Article 2, paragraph (12) of that Act that falls under those listed in Article 67-15, paragraph (1), item (i), (b), 1. or 2. (excluding one that falls under the category of a family corporation prescribed in item (ii), (d) of that paragraph);

beneficial interests in a special purpose trust listed in Article 2, item (xxix)-2, (e) of the Corporation Tax Act, out of trusts subject to corporation taxation, that falls under those listed in Article 68-3-2, paragraph (1), item (i), (b), 1. or 2. or those listed in (b), 3. or 4. of that item (excluding one that falls under the category of a family corporation prescribed in item (ii), (a) of that paragraph);

beneficial interests in an investment trust listed in Article 2, item (xxix)-2, (d) of the Corporation Tax Act, out of trusts subject to corporation taxation, that meets the requirement listed in Article 68-3-3, paragraph (1), item (i), (b) (excluding one that falls under the category of a family corporation prescribed in item (ii), (a) of that paragraph).

the amount of capital gain:These mean the amount that remains after deducting, from the amount calculated as specified by Cabinet Order as the amount of proceeds from the transfer, etc. of the land, the amount calculated as specified by Cabinet Order as the amount of cost price for the proceeds and the amount of expenses directly or indirectly required for the transfer, etc. of the land.

The provisions of paragraph (1) do not apply to a transfer of inventory assets (excluding those specified by Cabinet Order as having been used for the corporation's business during the period from the date of the acquisition thereof to the date of the transfer thereof) which falls under the category specified by a Cabinet Order, from among transfers of land, etc. (excluding a transfer of land, etc. as a result of qualified capital contribution in kind or qualified in-kind distribution and including acts listed in item (i), (a), 1. and 2. of the preceding paragraph; hereinafter the same applies in this Section).

The provisions of paragraph (1) do not apply to the case where a corporation has made transfer of its land, etc. (excluding land, etc. falling under the category of inventory assets; hereinafter the same applies through to paragraph (9) and in paragraph (11)) during the period between January 1, 1992 and December 31, 2028 and when it has been certified, as specified by Order of the Ministry of Finance, that the transfer of the land, etc. falls under the category of the following transfers of land, etc.:

transfer of land, etc. to the State, a local public entity, or any other corporation equivalent thereto which is specified by Cabinet Order;

transfer of land, etc. to an Urban Renaissance Agency, a Land Development Public Corporation, or any other corporation equivalent thereto which is specified by Cabinet Order as a corporation aiming to conduct business for the provision of residential land or housing or advance acquisition of land, for which the transferred land, etc. is deemed to be directly necessary for conducting the business (excluding a transfer of land, etc. to a Land Development Public Corporation which is specified by Cabinet Order);

transfer of the following land, etc. to a Land Development Public Corporation, with the transferred land, etc. being used for the respective projects specified below that are implemented by the Urban Renaissance Agency:

land, etc. located within a promotion area for reconstruction of a disaster-damaged urban district specified in a city plan pursuant to the provisions of Article 5, paragraph (1) of the Act on Special Measures concerning Reconstruction of Urban Districts Damaged by Disaster: a land readjustment project for reconstruction of a disaster-damaged urban district under that Act;

land, etc. located within the area of a housing-damaged municipality prescribed in Article 21 of the Act on Special Measures concerning Reconstruction of Urban Districts Damaged by Disaster: a type 2 urban redevelopment project under the Urban Renewal Act.

transfer of land, etc. as a result of expropriation or replotting, etc. prescribed in Article 65-2, paragraph (1) (excluding rights conversion prescribed in Article 65, paragraph (1), item (vi) and item (vii)) (excluding that which falls under the category of a transfer listed in the preceding three items or any other transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. to the project implementer of a type 1 urban redevelopment project under the Urban Renewal Act, with the transferred land, etc. being used for the project (excluding that which falls under the category of a transfer listed in the preceding items or any other transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. to the project implementer of a disaster prevention block improvement project under the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts, with the transferred land, etc. being used for the project (excluding that which falls under the category of a transfer listed in items (i) through (iv) or any other transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. to a certified business operator as prescribed in Article 23 of the Act on Special Measures Concerning Urban Reconstruction for an urban reconstruction project as prescribed in Article 25 of the Act under a certified plan as prescribed in the Article (limited to an urban reconstruction project that meets the requirements that the buildings specified in the certified plan (limited to buildings whose building area is larger than specified by Order of the Ministry of Finance) are constructed and that the area of the district where the project is to be carried out is one hectare or larger, as well as any other requirements specified by Cabinet Order) (such certified business operator includes the Urban Renaissance Agency that has concluded the agreement concerning the acquisition of land, etc. within the district with the certified business operator, as specified in the certified plan), with the transferred land, etc. being used for the urban reconstruction project (excluding that which falls under the category of a transfer listed in item (ii) through the preceding item);

transfer of land, etc. to a person who carries out a specified project prescribed in Article 2, paragraph (2) of the National Strategic Special Zones Act that is set forth in a certified zone plan prescribed in Article 11, paragraph (1) of that Act, or a project to develop facilities that become necessary in connection with the implementation of that specified project (limited to those projects specified by Order of the Ministry of Finance as particularly contributing to the strengthening of the international competitiveness of industry or to the formation of bases for international economic activities), with the transferred land, etc. being used for those projects (excluding that which falls under the category of a transfer listed in item (ii) through the preceding item);

transfer of the following land, etc. (limited to a transfer made after the ruling) to the business operator referred to in Article 10, paragraph (2), item (i) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner who is stated in the written application for a ruling under paragraph (2) of that Article (hereinafter referred to in this item as the "written application for a ruling") pertaining to a ruling made pursuant to the provisions of Article 13, paragraph (1) of that Act (limited to a ruling pertaining to the right listed in Article 10, paragraph (1), item (i) of that Act, and excluding a ruling that has lost its effect pursuant to the provisions of Article 18 of that Act; hereinafter referred to in this item as a "ruling"), and who carries out the project referred to in item (ii) of that paragraph that is stated in that written application for a ruling, with the transferred land, etc. being used for that project (excluding that which falls under the category of a transfer listed in items (i) through (iii) or item (v) through the preceding item):

specified land with an unknown owner stated in that written application for a ruling (meaning specified land with an unknown owner prescribed in Article 10, paragraph (2), item (v) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner; hereinafter the same applies in this item) or a right existing on that specified land with an unknown owner;

land other than specified land with an unknown owner, or a right existing on that land, that is stated, as land to be acquired by that business operator, in the plan listed in (c) of the business plan listed in Article 10, paragraph (3), item (i) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner that is attached to that written application for a ruling (excluding what is so stated in the case where the project stated in that written application for a ruling falls under a project specified by Cabinet Order as a project that is not found to have a high need to use the land other than specified land with an unknown owner together with the specified land with an unknown owner listed in (a)).

transfer of land, etc. to an approved developer of land for regional economy advancement projects prescribed in Article 12-4 of the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects that carries out the approved development of land for regional economy advancement projects prescribed in that Article, with the transferred land, etc. being used for that approved development of land for regional economy advancement projects (excluding that which falls under the category of a transfer listed in item (v), (vi) or (viii) or the preceding item);

transfer of land, etc. (excluding that pertaining to a right to an adjacent project site prescribed in Article 55, paragraph (1), item (ii) of the Act on Facilitation of the Regeneration, etc. of Condominiums (hereinafter referred to in this item as a "right to an adjacent project site") and that pertaining to a right to the underlying land of a project prescribed in item (iii) of that paragraph) to the project implementer (meaning the project implementer prescribed in Article 2, paragraph (1), item (x) of that Act; hereinafter the same applies in this item) of a condominium regeneration project (meaning a condominium regeneration project prescribed in Article 2, paragraph (1), item (x) of that Act, limited to one specified by Cabinet Order as contributing to securing a good living environment; hereinafter the same applies in this item) based on a demand under Article 15, paragraph (1) or Article 64, paragraph (1) or paragraph (3) of that Act or an offer under Article 56, paragraph (1) of that Act, or transfer of land, etc. (limited to that pertaining to a right to an adjacent project site) to the project implementer of a condominium regeneration project in which the pre-reconstruction condominium prescribed in Article 2, paragraph (1), item (xi) of that Act or the lost condominium (meaning a condominium prescribed in item (i) of that paragraph; hereinafter the same applies in this item and the following item) that stood on the reconstruction site prescribed in item (xiii) of that paragraph falls under a building specified by Cabinet Order, and the total floor area of the post-regeneration condominium prescribed in item (xiv) of that paragraph is the total floor area of that pre-reconstruction condominium or that lost condominium or more, with the land, etc. pertaining to these transfers being used for those condominium regeneration projects (excluding that which falls under the category of a transfer listed in items (vii) through (ix));

transfer of land, etc. to a person who implements a condominium, etc. sale project prescribed in Article 4, paragraph (2), item (vi) of the Act on Facilitation of the Regeneration, etc. of Condominiums based on a demand under Article 121, paragraph (1) of that Act (limited to a project for which the certified removal, etc. plan prescribed in Article 107 of that Act or any other plan specified by Order of the Ministry of Finance pertaining to that condominium, etc. sale project contains matters concerning a condominium (limited to one specified by Cabinet Order as having a good living environment) to be newly built on the land after the removal of the condominium or on the site for sale prescribed in Article 2, paragraph (1), item (xxiii) of that Act, matters concerning roads, parks, open spaces and other facilities for public use to be developed on that land, and other matters specified by Order of the Ministry of Finance; hereinafter the same applies in this item), or transfer of land, etc. to a person who implements that condominium, etc. sale project based on the distribution money acquisition plan prescribed in Article 141, paragraph (1) of that Act that has obtained the approval under that paragraph in connection with that condominium, etc. sale project (where approval for a change to that distribution money acquisition plan has been obtained pursuant to the provisions of that paragraph as applied mutatis mutandis pursuant to Article 145 of that Act, the plan after the change), with the land, etc. pertaining to these transfers being used for those condominium, etc. sale projects;

transfer of land, etc., which is located in a district specified by Cabinet Order within a city planning area as prescribed in Article 4, paragraph (2) of the City Planning Act, to a person who carries out a project to construct a building whose building area is the area specified by Cabinet Order or more (limited to a project that meets the requirement that the area of the district where the project is to be carried out is 500 square meters or more, as well as any other requirements specified by Cabinet Order), with the transferred land, etc. being used for the project (excluding that which falls under the category of a transfer listed in items (vii) through (ix), item (x), or the following item through item (xvi));

transfer of land, etc. to an individual or a corporation that is to carry out the development of a unit of residential land for use in residential construction (limited to that which meets the following requirements) after obtaining permission under Article 29, paragraph (1) of the City Planning Act (limited to permission pertaining to development activities prescribed in Article 4, paragraph (12) of that Act that are carried out within an area specified by Cabinet Order within a city planning area prescribed in paragraph (2) of that Article; hereinafter referred to in this item as a "development permit") (in the case where there has been a succession to the status based on a development permit prescribed in Article 44 or Article 45 of that Act, such individual is to be the individual who was the transferor in the succession or the individual who has succeeded to the status; the same applies in paragraph (7)) (in the case where there has been a succession to the status based on a development permit prescribed in Article 44 or Article 45 of that Act, such corporation is to be the corporation that was the transferor in the succession or the corporation that has succeeded to the status; the same applies in paragraph (7)), with the transferred land, etc. being used for the unit of residential land (excluding that which falls under the category of a transfer listed in items (vii) through (ix)):

that the area of the unit of residential land is 1000 square meters or more (for the area of a unit of residential land within an area where the area that requires a development permit is less than 1000 square meters, the area specified by Cabinet Order or more); and

that the development of the unit of residential land is deemed to be carried out in conformity with the details of the development permit.

in cases where permission under Article 29, paragraph (1) of the City Planning Act is not required for development of a unit of residential land, the transfer of land, etc. to an individual or a corporation that is to carry out the development of the unit of residential land for use in residential construction (limited to that which meets the following requirements) (in the case where an heir or universal legatee has succeeded to the project for the development due to the death of the individual who was carrying out the development, and where the heir or universal legatee then carries out the development, such individual is to be the deceased individual who was to carry out the development or the heir or universal legatee; the same applies in paragraph (7)) (in the case where the corporation carrying out the development has extinguished as a result of a merger and a merging corporation that was involved in the merger has succeeded to the project for the development and carries out the development, such corporation is to be the extinguished corporation that was to carry out the development or the merging corporation; and in the case where the corporation carrying out the development has been split off and the succeeding corporation in the company split that was involved in the company split has succeeded to the project for the development and carries out the development, such corporation is to be the split-off corporation that was to carry out the development or the succeeding corporation in the company split; the same applies in paragraph (7)), with the transferred land, etc. being used for the unit of residential land (excluding that which falls under the category of a transfer listed in items (vii) through (ix) or a transfer of land, etc. specified by Cabinet Order):

that the area of the unit of residential land is 1000 square meters or more (for the area of a unit of residential land within an area specified by Cabinet Order, the area specified by Cabinet Order or more);

that the development is carried out within a city planning area as prescribed in Article 4, paragraph (2) of the City Planning Act; and

that the development of the unit of residential land is carried out by obtaining authorization from the prefectural governor, as specified by Cabinet Order, as a project contributing to supplying good residential land to be used for constructing houses, and is deemed to be carried out in conformity with the details of the authorization.

transfer of land, etc. to an individual or a corporation that is to construct a group of houses or mid-to-high-rise fire-proof apartment houses (each limited to that which meets the following requirements) (in the case where an heir or universal legatee has succeeded to the project for the construction due to the death of the individual carrying out the development, and where the heir or universal legatee then carries out the construction, such individual is to be the deceased individual who was to carry out the construction or the heir or universal legatee; the same applies in the following item and paragraph (7)) (in the case where the corporation carrying out the construction has extinguished as a result of a merger and the merging corporation that was involved in the merger has succeeded to the project for the construction and carries out the construction, such corporation is to be the extinguished corporation that was to carry out the construction or the merging corporation; and in the case where the corporation carrying out the construction has been split off and the succeeding corporation in a company split that was involved in the company split has succeeded to the project for the construction and carries out the construction, such corporation is to be the split-off corporation that was to carry out the construction or the succeeding corporation in a company split; the same applies in that item and that paragraph), with the transferred land, etc. being used for constructing the group of houses or mid-to-high-rise fire-proof apartment houses (excluding that which falls under the category of a transfer listed in items (vii) through (ix), item (x), or the preceding two items):

that a group of houses satisfy the requirement that the number of houses to be constructed is 25 or more;

that mid-to-high-rise fire-proof housing, satisfies the requirement that independent units to be used as residences (meaning the units equivalent to those of a building as prescribed in Article 2, paragraph (1) of the Act on Unit Ownership, etc. of Building) are 15 or more or that the floor area of the mid-to-high-rise fire-proof housing is 1000 square meters or larger, as well as any other requirements as specified by Cabinet Order;

that these are constructed within a city planning area prescribed in (b) of the preceding item; and

that the construction of the group of houses or mid-to-high-rise fire-proof apartment houses is carried out by obtaining authorization from the prefectural governor, as specified by Cabinet Order, as a project contributing to supplying good houses (for mid-to-high-rise fire-proof apartment houses with a land area of less than 1000 square meters, by obtaining such authorization from the mayor of the municipality).

transfer of land, etc. (limited to land, etc. within a district for a land readjustment project as prescribed in Article 2, paragraph (4) of the Land Readjustment Act carried out under the Act, for which provisional substitute land has been designated under Article 98, paragraph (1) of the Act (including the case where the land or the part thereof subject to the right to provisionally use or to receive proceeds therefrom has been designed; hereinafter the same applies in this item)) to an individual or a corporation that constructs a house or mid-to-high-rise fire-proof apartment house (each limited to that which meets the following requirements), which is made not later than December 31 of the year that includes the day on which three years have elapsed from the day on which the designation has become effective (in the case where the day on which the individual or the corporation may start using or receiving proceeds from the right is determined pursuant to the provisions of Article 99, paragraph (2) of the Act, from that day), with the land, etc. designated as provisional substitute land for the transferred land, etc. being used for constructing the house or mid-to-high-rise fire-proof apartment house (excluding that which falls under the category of a transfer listed in items (vii) through (ix), item (x), or the preceding three items):

that the house satisfies the requirements specified by Cabinet Order concerning the floor area of the house to be constructed and the area of the land, etc. to be used for the house;

that a mid-to-high-rise fire-proof apartment house satisfies the requirements specified by Cabinet Order as prescribed in (b) of the preceding item; and

that a house or mid-to-high-rise fire-proof housing is deemed to be in conformity with the Building Standards Act and other housing-related laws and regulations.

The provisions of the preceding paragraph apply mutatis mutandis in the case where a corporation has made transfer of its land, etc. during the period from January 1, 1992 to December 31, 2028 and when the transfer of the land, etc. falls under the category of a transfer for a determined site for constructing a superior residential area, etc. (meaning transfer that has been certified, as specified by Order of the Ministry of Finance, as highly likely to fall under the category of a transfer of land, etc. listed in items (xiii) through (xvi) of the preceding paragraph during the period from the date of the transfer up to December 31 of the year that includes the day on which two years have elapsed after that date (in the case where the period required for developing residential land to be used for constructing houses generally exceeds two years or there are any other unavoidable reason specified by Cabinet Order, during the period from the date of the transfer up to the date specified by Cabinet Order; referred to in paragraph (7) as the "scheduled period")). In this case, the term "when it has been certified, as specified by Order of the Ministry of Finance, that the transfer of the land, etc. falls under the category of the following transfers of land, etc." in that paragraph is deemed to be replaced with "when the transfer of land, etc. falls under the category of a transfer for a determined site for constructing a superior residential area, etc. prescribed in the following paragraph."

In the case referred to in paragraph (4) (including the case where it is applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph and paragraph (10)), when a corporation is subject to the provisions of Article 65-4, paragraph (1) with regard to its land, etc. that has come to fall under the case listed in item (iii) of the paragraph, the transfer of the land, etc. is deemed not to fall under the category of a transfer of land, etc. falling under the provisions of paragraph (4).

An individual or a corporation carrying out the development set forth in paragraph (4), item (xiii) or item (xiv) or the construction set forth in item (xv) or item (xvi) of the paragraph, that has purchased land, etc. pertaining to the transfer to which the provisions of paragraph (5) apply, when the transfer in whole or in part has come to fall under the category of a transfer of land, etc. listed in items (xiii) through (xvi) of the paragraph during the scheduled period, must deliver the document specified by Order of the Ministry of Finance that certifies that the transfer of the land, etc. has come to fall under such category, without delay to the corporation that transferred the land, etc. to which the provisions apply.

Where it has become difficult for all or part of a transfer of land, etc. to which the provisions of paragraph (5) were applied to fall under a transfer of land, etc. listed in paragraph (4), items (xiii) through (xvi) within the scheduled period prescribed in paragraph (5), due to unavoidable circumstances arising from an emergency disaster designated as a specified emergency disaster pursuant to the provisions of Article 2, paragraph (1) of the Act on Special Measures concerning Preservation of Rights and Interests of Victims of Specified Disaster, in a case specified by Cabinet Order, if it has been certified, as specified by Order of the Ministry of Finance, that all or part of the transfer is found certain to come to fall under a transfer of land, etc. listed in items (xiii) through (xvi) of that paragraph during the period from the first day of the scheduled period until the date specified by Cabinet Order that falls within two years after the last day of the scheduled period, then with regard to the application of the provisions of paragraph (5), the preceding paragraph, and the following paragraph, the scheduled period prescribed in those provisions is the period from that first day until that date specified by Cabinet Order.

Where the transfer of land, etc. in whole or in part to which the provisions of paragraph (5) apply (in the case where the corporation is a merging corporation, including transfers of land, etc. in which a merged corporation involved in the merger is subject to the provisions of that paragraph) does not fall under the category of a transfer of land, etc. listed in paragraph (4), items (xiii) through (xvi) as of the last day of the scheduled period prescribed in paragraph (5), the amount of corporation tax to be imposed on the corporation on income for the business year containing the day is to be, notwithstanding the provisions of Article 66, paragraphs (1) through (3) and paragraph (6), Article 69, paragraph (19) (including as applied mutatis mutandis pursuant to paragraph (23) or paragraph (24) of that Article), and Article 143, paragraph (1) and paragraph (2) of the Corporation Tax Act, the provisions of Article 42-4, paragraph (8), item (vi), (b) and item (vii) (including as applied mutatis mutandis pursuant to Article 42-4-2, paragraph (2) or Article 42-5, paragraph (3), item (ii)), Article 42-14, paragraph (1) and paragraph (4), Article 62, paragraph (1), paragraph (1) of this Article, paragraph (1) of the following Article, Article 67-2, paragraph (1), and Article 68, paragraph (1), and the provisions of other corporation tax-related laws and regulations, the sum of the amount of corporation tax calculated pursuant to these provisions plus the amount specified by Cabinet Order as the amount obtained by multiplying the total of the amount of capital gain from the transfer of land, etc. by the rate of five percent.

With regard to the application of the provisions of paragraph (1) in the case where a corporation has made a transfer of land, etc. (excluding a transfer of land, etc. falling under the provisions of paragraph (3) and paragraph (4)) (including the case where a merging corporation, etc. as prescribed in Article 64-2, paragraph (4) has succeeded to the amount of the special account prescribed in that paragraph, from a merged corporation, splitting corporation, or corporation making a capital contribution in kind involved in the qualified merger, etc. (meaning a qualified merger, etc. prescribed in that paragraph), which made the transfer of land, etc., pursuant to that paragraph, or other cases specified by Cabinet Order), when there is any amount that has been included in deductible expenses, with regard to the transfer of land, etc., pursuant to the provisions of Article 50 of the Corporation Tax Act or the provisions of Articles 64 through 65-5-2 or Articles 65-7 through 66 (in the case where there is any amount that has been excluded from deductible expenses pursuant to the provisions of Article 65-6, the amount that remains after deducting the excluded amount; hereinafter referred to in this paragraph as the "amount included in deductible expenses"), the amount equivalent to the amount included in deductible expenses is to be deducted from the amount of capital gain for the business year; and when there is any amount that has been included in gross profits, with regard to the transfer of land, etc., pursuant to the provisions of Article 64-2, paragraphs (9) through (12) (including the case where these provisions are applied mutatis mutandis pursuant to Article 65, paragraph (3)), Article 65-7, paragraph (4) (including the case where it is applied mutatis mutandis pursuant to Article 65-8, paragraph (14)), Article 65-7, paragraph (12) (including the case where it is applied mutatis mutandis pursuant to Article 65-8, paragraph (15)), or Article 65-8, paragraphs (9) through (12), the amount equivalent to the included amount is to be added to the amount of capital gain for the business year.

The provisions of paragraph (5) apply only in the case where the final return, etc. has attached thereto the document specified by Order of the Ministry of Finance that certifies that the transfer of land, etc. falls under the category of a transfer for a determined site for constructing a superior residential area, etc. as prescribed in that paragraph and a document stating the amount specified by Cabinet Order as the amount of capital gain from the transfer of land, etc., and any other matters specified by Order of the Ministry of Finance.

With regard to the application of the provisions of Article 67 of the Corporation Tax Act in the case where the provisions of paragraph (1) or paragraph (9) apply, the term "paragraphs (1), (2), and (6) of the preceding Article, and Article 69, paragraph (19) (Foreign Tax Credit) (including as applied mutatis mutandis pursuant to paragraph (23) of that Article; the same applies in paragraph (3))" in paragraph (1) of the Article is deemed to be replaced with "Article 62-3, paragraphs (1) and (9) (Special Tax Rate for the Transfer of Land) of the Act on Special Measures Concerning Taxation", and the term "paragraphs (1), (2), and (6) of the preceding Article, and Article 69, paragraph (19)" in paragraph (3) of the Article is deemed to be replaced with "Article 62-3, paragraphs (1) and (9) of the Act on Special Measures Concerning Taxation".

The provisions of Article 62, paragraph (7) apply mutatis mutandis where the provisions of paragraph (1) or paragraph (9) apply. In this case, the phrase "and the provisions of paragraph (1)" in Article 62, paragraph (7), item (i) is deemed to be replaced with "and the provisions of Article 62-3, paragraphs (1) and (9)".

Beyond what is provided for in the preceding three paragraphs, matters concerning the application of the provisions of the Corporation Tax Act and other laws and regulations related to the corporation tax, to filing of returns or refunds of corporation tax, and of the provisions of the Local Corporation Tax Act and other laws and regulations related to the local corporation tax, to filing of returns or refunds of local corporation tax, and other necessary matters concerning the application of the provisions of paragraph (1), paragraph (5) or paragraph (9) are specified by Cabinet Order.

The provisions of paragraph (1) do not apply to a transfer, etc. of land that a corporation has made during the period from January 1, 1998 through March 31, 2029.