①Where a domestic corporation (excluding a domestic corporation listed in Appended Table 1 of the Income Tax Act; the same applies in the following paragraph and paragraph (4)) receives delivery, through a person in charge of handling payment in Japan that is specified by Cabinet Order (hereinafter referred to in this Article as the "person in charge of handling payment"), of dividends and similar income prescribed in Article 24, paragraph (1) of the Income Tax Act pertaining to dividends of surplus or dividends of profits (meaning dividends of profits as prescribed in that paragraph) on shares (including preferred equity investments as prescribed in Article 2, paragraph (5) of the Act on the Securitization of Assets) issued outside Japan which it is to receive on or after April 1, 1988 (limited to those paid outside Japan; hereinafter referred to in this Article as "dividends and similar income on foreign shares"), the domestic corporation is to be liable to pay income tax on the dividends and similar income on foreign shares to be received, and income tax is imposed by applying a tax rate of 20 percent to the amount to be received.

②A person in charge of handling payment in Japan of dividends and similar income on foreign shares to be paid to a resident or a domestic corporation on or after April 1, 1988 must, when delivering the dividends and similar income on foreign shares to the resident or domestic corporation, collect income tax in the amount calculated by multiplying the amount to be delivered by a tax rate of 20 percent, and pay it to the State by the 10th day of the month following the month that includes the day of collection.

③In the cases referred to in the preceding two paragraphs, where there is an amount of foreign income tax prescribed in Article 95, paragraph (1) of the Income Tax Act (including the tax specified by Cabinet Order) collected at the time of payment of dividends and similar income on foreign shares, the amount to be received prescribed in paragraph (1) and the amount to be delivered prescribed in the preceding paragraph are to be the amount remaining after deducting an amount equivalent to the amount of the foreign income tax from the amount of the dividends and similar income on foreign shares.

④Income tax to be collected and paid pursuant to the provisions of paragraph (2) is deemed to be income tax pertaining to withholding at the source as prescribed in Article 2, paragraph (1), item (xlv) of the Income Tax Act, and the provisions of that Act, the Act on General Rules for National Taxes, and the National Tax Collection Act apply thereto. In this case, where the person who is to receive the dividends and similar income on foreign shares is a domestic corporation, with regard to the application of the provisions of the Corporation Tax Act to the domestic corporation, the phrase "or prize money" in Article 68, paragraph (1) of that Act is deemed to be replaced with "or prize money, or dividends and similar income on foreign shares prescribed in Article 9-2, paragraph (1) of the Act on Special Measures Concerning Taxation (Special Provisions on Withholding at the Source, etc. for Dividend Income from Shares Issued Outside Japan)", and the phrase "that Act" is deemed to be replaced with "the Income Tax Act or the Act on Special Measures Concerning Taxation".

⑤Where income tax is to be collected pursuant to the provisions of paragraph (2) on dividends and similar income on foreign shares, the provisions of Article 8-5 apply to a resident who has the dividends and similar income on foreign shares as follows:

⑥Beyond what is provided for in the preceding two paragraphs, special provisions of Article 224 and Article 225 of the Income Tax Act pertaining to dividends and similar income on foreign shares and other necessary matters concerning the application of the provisions of paragraphs (1) through (3) are specified by Cabinet Order.