Act on Special Measures Concerning Taxation

where a type 1 urban redevelopment project under the Urban Renewal Act has been implemented with regard to assets, and compensation under the provisions of Article 91 of that Act (limited to compensation paid because it was determined, pursuant to the provisions of Article 79, paragraph (3) of that Act, that a part, etc. of a facility building or a building lease right for a part of a facility building would not be granted, or because it was determined, pursuant to the provisions of that Article 79, paragraph (3) of that Act as applied with the deemed replacement of terms pursuant to Article 111, paragraph (3) of that Act, that a portion of a building facility or a building lease right for a part of a facility building would not be granted, and compensation paid based on an offer under Article 71, paragraph (1) or paragraph (3) of that Act in a case specified by Cabinet Order as a case where the offer is found to have been made due to unavoidable circumstances) is acquired through a rights conversion pertaining to the assets (excluding cases that fall under the cases specified by Cabinet Order);

Where a type 1 urban redevelopment project under the Urban Renewal Act has been implemented with regard to assets that an individual owns, and the individual has acquired, through a rights conversion pertaining to those assets, a right to acquire a part of a facility building or a right to acquire a building lease right for a part of a facility building, and a facility building site or a share of co-ownership thereof or a share of co-ownership of a superficies right (where the rights conversion pertaining to those assets is one set forth in a rights conversion plan established pursuant to the provisions of Article 110, paragraph (1) or Article 110-2, paragraph (1) of that Act, a right to acquire rights concerning a facility building site or rights concerning a facility building), or residential land within an individual use zone or a right to use and profit therefrom, or where assets that an individual owns have been purchased or expropriated in connection with the implementation of a type 2 urban redevelopment project under that Act and the individual has acquired, as consideration therefor, a right to receive the grant of a portion of a building facility prescribed in Article 118-11, paragraph (1) of that Act pursuant to the provisions of that paragraph (where the grant is one set forth in a management and disposal plan established pursuant to the provisions of Article 118-25-3118-25-2, paragraph (1) of that Act, the grant of rights concerning a facility building site or a facility building), then with regard to the application of the provisions of Article 28-4, Article 31 or Article 32 of this Act, or Article 27, Article 33 or Article 35 of the Income Tax Act, the assets transferred through the rights conversion or the purchase or expropriation (where compensation, etc. has been acquired together with the right to receive the grant, 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.; referred to as "former assets" in the following paragraph and paragraph (1) of the following Article) are deemed not to have been transferred.

Where the provisions of the preceding paragraph have been applied, if a transfer, inheritance (limited to inheritance involving qualified acceptance; hereinafter the same applies in this Article, Article 33-6, Article 36-4, Article 37-3, Article 37-6, and Article 37-8, paragraph (4)), legacy (limited to legacy to a corporation, legacy to an individual who is the trustee of a public interest trust prescribed in Article 2, paragraph (1), item (i) of the Act on Public Interest Trusts (hereinafter referred to in this paragraph as a "public interest trust") (limited to legacy for the purpose of making it trust property), and universal legacy to an individual involving qualified acceptance; hereinafter the same applies in this Article, Article 33-6, Article 36-4, Article 37-3, Article 37-6, and Article 37-8, paragraph (4)) or gift (limited to gift to a corporation and gift to an individual who is the trustee of a public interest trust (limited to gift for the purpose of making it trust property); hereinafter the same applies in this Article, Article 33-6, Article 36-4, Article 37-3, Article 37-6, and Article 37-8, paragraph (4)) has been made with regard to the right to acquire a part of a facility building or the right to acquire a building lease right for a part of a facility building referred to in that paragraph (including a right to acquire rights concerning a facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 110, paragraph (1) or Article 110-2, paragraph (1) of the Urban Renewal Act) or the right to receive the grant prescribed in the preceding paragraph, or if an offer of a wish to acquire under the provisions of Article 118-5, paragraph (1) of the Urban Renewal Act has been withdrawn with regard to the portion of a building facility prescribed in the preceding paragraph (including rights concerning a facility building site or a facility building pertaining to a management and disposal plan established pursuant to the provisions of Article 118-25-3118-25-2, paragraph (1) of that Act) (including where the offer of a wish to acquire is deemed to have been withdrawn pursuant to the provisions of Article 118-12, paragraph (1) or Article 118-19, paragraph (1) of that Act), then, pursuant to the provisions of Cabinet Order, the provisions of Article 28-4, Article 31, Article 32 or Article 33 of this Act, or Article 27, Article 33, Article 35, Article 40 or Article 59 of the Income Tax Act apply by deeming that a transfer, inheritance, legacy or gift of the former assets, or a transfer of the former assets through expropriation, etc., has been made on the date of the transfer, inheritance, legacy or gift or of the withdrawal of the offer of a wish to acquire, or on the date on which the withdrawal is deemed to have been made pursuant to the provisions of Article 118-12, paragraph (1) or Article 118-19, paragraph (1) of the Urban Renewal Act; and where an amount equivalent to the difference prescribed in Article 104, paragraph (1) of the Urban Renewal Act (including as applied with the deemed replacement of terms pursuant to the provisions of Article 110-2, paragraph (6) or Article 111 , paragraph (3) of that Act) or Article 118-24 of that Act (including as applied with the deemed replacement of terms pursuant to the provisions of Article 118-25-3118-25-2, paragraph (3) of that Act) has come to be granted pursuant to those provisions with regard to the right to acquire a part of a facility building and a facility building site or a share of co-ownership thereof or a share of co-ownership of a superficies right referred to in the preceding paragraph (including a right to acquire rights concerning a facility building site or rights concerning a facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 110-2, paragraph (1) of the Urban Renewal Act), or residential land within an individual use zone or a right to use and profit therefrom, or the right to receive the grant prescribed in the preceding paragraph, the provisions of Article 33 apply by deeming that a transfer through expropriation, etc. has been made, on the day on which it has come to be so granted, with regard to the part of the former assets specified by Cabinet Order as corresponding to that amount.

When a person who has been subject to the provisions of Article 33, Article 33-2, paragraph (1) or paragraph (2), or Article 33-3 (excluding a person who has ceased to be subject to the provisions of Article 33 (including as applied mutatis mutandis pursuant to Article 33-2, paragraph (2)) because the person filed an amended return under the provisions of paragraph (1) of the preceding Article or received a reassessment under the provisions of paragraph (2) of that Article) calculates the amount of depreciation allowances pursuant to the provisions of Article 49, paragraph (1) of the Income Tax Act for a substitute asset or for an asset acquired through a disposition by exchange, etc., a replotting disposition, or a rights conversion (including the acquisition of a part of a facility building under the provisions of Article 88, paragraph (2) of the Urban Renewal Act or a building lease right for a part of a facility building under the provisions of paragraph (5) of that Article, a right concerning a facility building referred to in Article 110, paragraph (2) of that Act (including as applied mutatis mutandis pursuant to Article 110-2, paragraph (2) of that Act) under the provisions of Article 110, paragraph (3) or Article 110-2, paragraph (4) of that Act, a portion of a building facility or a right concerning a facility building site or a facility building under the provisions of Article 118-11, paragraph (1) of that Act (including as applied with the terms replaced pursuant to the provisions of Article 118-25-3118-25-2, paragraph (3) of that Act), a part of a disaster prevention facility building under the provisions of Article 222, paragraph (2) of the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts or a building lease right for a part of a disaster prevention facility building under the provisions of paragraph (5) of that Article, a right concerning a disaster prevention facility building referred to in Article 255, paragraph (2) of that Act (including as applied mutatis mutandis pursuant to Article 257, paragraph (2) of that Act) under the provisions of Article 255, paragraph (4) or Article 257, paragraph (3) of that Act, or unit ownership of a post-regeneration condominium under the provisions of Article 71, paragraph (2) of the Act on Facilitation of the Regeneration, etc. of Condominiums (limited to that specified by Cabinet Order) or a building lease right for a part of a post-regeneration condominium under the provisions of paragraph (3) of that Article; the same applies in item (iii)) (hereinafter referred to in this Article as "substitute assets, etc."), or when, in the case where there has been a transfer (including the lending of real property, etc. giving rise to capital gains), inheritance, bequest, or gift of substitute assets, etc. on or after the day on which they were acquired, the person calculates the amount of business income, the amount of timber income, the amount of capital gains, or the amount of miscellaneous income, then, pursuant to the provisions of Cabinet Order, the time of acquisition of the assets that were subject to the provisions of Article 33, Article 33-2, paragraph (1) or paragraph (2), or Article 33-3 (hereinafter referred to in this paragraph as "transferred assets") is deemed to be the time of acquisition of the substitute assets, etc., and the amount calculated pursuant to the provisions of Cabinet Order as the portion corresponding to the substitute assets, etc. out of the total of the acquisition price of the transferred assets and the amount of equipment costs and improvement costs (referred to in Article 36-4, Article 37-3, Article 37-5, and Article 37-6 as the "acquisition price, etc.") is deemed to be their acquisition price; provided, however, that with regard to the acquisition price, in the case falling under any of the cases listed in the following items, the amount obtained by adding, to the amount deemed to be the acquisition price, the amount calculated pursuant to the provisions of Cabinet Order out of the amount specified in the relevant item is deemed to be the acquisition price:

where a type 1 urban redevelopment project under the Urban Renewal Act has been implemented with regard to assets, and compensation under the provisions of Article 91 of that Act (limited to compensation paid because it was determined, pursuant to the provisions of Article 79, paragraph (3) of that Act, that a part, etc. of a facility building or a building lease right for a part of a facility building would not be granted, or because it was determined, pursuant to the provisions of that Article 79, paragraph (3) of that Act as applied with the deemed replacement of terms pursuant to Article 111, paragraph (3) of that Act, that a portion of a building facility or a building lease right for a part of a facility building would not be granted, and compensation paid based on an offer under Article 71, paragraph (1) or paragraph (3) of that Act in a case specified by Cabinet Order as a case where the offer is found to have been made due to unavoidable circumstances) is acquired through a rights conversion pertaining to the assets (excluding cases that fall under the cases specified by Cabinet Order);

where a type 1 urban redevelopment project under the Urban Renewal Act has been implemented with regard to assets, if a right to acquire a part of a facility building or a right to acquire a building lease right for a part of a facility building, and a facility building site or a share of co-ownership thereof or a share of co-ownership of a superficies right (where the rights conversion pertaining to the assets is one set forth in a rights conversion plan established pursuant to the provisions of Article 110, paragraph (1) or Article 110-2, paragraph (1) of that Act, a right to acquire rights concerning a facility building site or rights concerning a facility building), or residential land within an individual use zone or a right to use and profit therefrom, is acquired through a rights conversion pertaining to the assets, or where assets have been purchased or expropriated in connection with the implementation of a type 2 urban redevelopment project under that Act, if a right to receive the grant of a portion of a building facility prescribed in Article 118-11, paragraph (1) of that Act (where the grant is one set forth in a management and disposal plan established pursuant to the provisions of Article 118-25-3118-25-2, paragraph (1) of that Act, the grant of rights concerning a facility building site or a facility building) is acquired as consideration therefor pursuant to the provisions of that paragraph;

Where the provisions of paragraph (1), item (iv) have been applied, if an amount equivalent to the difference prescribed in Article 104, paragraph (1) of the Urban Renewal Act (including as applied with the deemed replacement of terms pursuant to the provisions of Article 110-2, paragraph (6) or Article 111 , paragraph (3) of that Act) or Article 118-24 of that Act (including as applied with the deemed replacement of terms pursuant to the provisions of Article 118-25-3118-25-2, paragraph (3) of that Act) (referred to as "conversion settlement money" in paragraph (10), item (i) and paragraphs (1) and (2) of the following Article) has come to be granted pursuant to those provisions with regard to the right to acquire a part of a facility building and a facility building site or a share of co-ownership thereof or a share of co-ownership of a superficies right referred to in that item (including a right to acquire rights concerning a facility building site or rights concerning a facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 110-2, paragraph (1) of that Act), or residential land within an individual use zone or a right to use and profit therefrom, or the right to receive the grant prescribed in that item, if an offer of a wish to acquire under the provisions of Article 118-5, paragraph (1) of that Act has been withdrawn with regard to the portion of a building facility prescribed in paragraph (1), item (iv) (including rights concerning a facility building site or a facility building pertaining to a management and disposal plan established pursuant to the provisions of Article 118-25-3118-25-2, paragraph (1) of that Act) (including where the offer of a wish to acquire is deemed to have been withdrawn pursuant to the provisions of Article 118-12, paragraph (1) or Article 118-19, paragraph (1) of that Act), or if a part of the facility building or a building lease right for a part of the facility building referred to in that item (including rights concerning the facility building referred to in that item) or the portion of a building facility (including rights concerning the facility building site or the facility building referred to in that item) has been acquired based on the right to acquire a part of the facility building or the right to acquire a building lease right for a part of a facility building referred to in that item (including a right to acquire rights concerning a facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 110, paragraph (1) or Article 110-2, paragraph (1) of that Act; hereinafter the same applies in this paragraph and paragraph (10)) or the right to receive the grant prescribed in that item, then the provisions of the preceding two Articles or the preceding paragraphs apply by deeming that a transfer through expropriation, etc. or replotting disposition, etc. has been made, on the day on which it has come to be so granted, the day on which the offer of a wish to acquire was withdrawn or the day on which the withdrawal is deemed to have been made pursuant to the provisions of Article 118-12, paragraph (1) or Article 118-19, paragraph (1) of that Act, or the day of the acquisition, with regard to the part of the assets referred to in that item specified by Cabinet Order as corresponding to that amount, the right to receive the grant prescribed in that item to which the withdrawal pertains, or the right to acquire a part of the facility building, the right to acquire a building lease right for a part of a facility building or the right to receive the grant prescribed in that item that gave rise to the acquisition.