This Act comes into effect on the date of promulgation; provided, however, that the provisions set forth in the following items come into effect on the dates specified in those items:

The provisions of Chapter II of the Act on Special Measures Concerning Taxation as amended by the provisions of Article 10 (hereinafter referred to as the "New Act on Special Measures Concerning Taxation") apply, unless otherwise provided for in the New Act on Special Measures Concerning Taxation or these Supplementary Provisions, to income tax for 1989 and subsequent years, and with regard to income tax for 1988 and earlier years, the provisions then in force continue to govern.

With regard to the application of the provisions of Article 25-2 of the New Act on Special Measures Concerning Taxation to income tax for 1989, the phrase "28 percent" in paragraph (2), item (i) of that Article is deemed to be replaced with "27.3 percent", the phrase "67 percent" in paragraph (3), item (i), (b) of that Article with "68 percent", the phrase "28 percent" in paragraph (5), item (ii) of that Article with "29 percent", and the phrase "37.5 percent" with "40 percent".

The provisions then in force continue to govern income from a transfer, made before April 1, 1989, of public and corporate bonds prescribed in Article 37-10, paragraph (1), item (i) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 10 (hereinafter referred to as the "Former Act on Special Measures Concerning Taxation") or national government bonds prescribed in item (ii) of that paragraph.

The provisions of Article 37-13 of the New Act on Special Measures Concerning Taxation apply to income from a transfer of public and corporate bonds, etc. prescribed in paragraph (1), item (i) of that Article, and from the termination of a securities investment trust or the partial cancellation of a securities investment trust prescribed in item (ii) of that paragraph, that is made on or after April 1, 1989.

The provisions of Article 37-14 of the New Act on Special Measures Concerning Taxation apply to income from a transfer of public and corporate bonds prescribed in paragraph (1), item (i) of that Article or national government bonds prescribed in item (ii) of that paragraph made on or after April 1, 1989, and to the report prescribed in paragraph (3) of that Article concerning the payment of consideration for that transfer.

Unless otherwise provided for in the New Act on Special Measures Concerning Taxation or these Supplementary Provisions, the provisions of Chapter III of the New Act on Special Measures Concerning Taxation apply to corporation tax on income of a corporation for business years beginning on or after April 1, 1989, and to corporation tax on liquidation income arising from dissolution or merger on or after that date (including corporation tax on income for a business year during liquidation of a corporation subject to corporation tax on liquidation income and corporation tax to be paid on a partial distribution of residual assets; the same applies hereinafter in this Article), and the provisions then in force continue to govern corporation tax on income of a corporation for business years that began before that date and corporation tax on liquidation income arising from dissolution or merger before that date.

①With regard to corporation tax on income of a domestic corporation prescribed in Article 42-2, paragraph (1) of the Former Act on Special Measures Concerning Taxation for business years beginning during the period from April 1, 1989 to March 31, 1990, the provisions of that Article remain in force. In this case, the phrase "32 percent" in paragraph (1) of that Article is deemed to be replaced with "35 percent", the phrase "24 percent" with "26 percent", and the phrase "22 percent" with "25 percent".

②In the case referred to in the preceding paragraph, the phrase "the provisions of the following Article" in Article 42-2, paragraph (1) of the Former Act on Special Measures Concerning Taxation is deemed to be replaced with "the provisions of Article 42-3 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957) prior to the amendment by the provisions of Article 10 of the Act Partially Amending the Income Tax Act, etc. (Act No. 109 of 1988; hereinafter referred to as the "Amending Act" in this paragraph), which remains in force pursuant to the provisions of Article 69 of the Supplementary Provisions of the Amending Act and as read with the replacement of terms pursuant to the provisions of that Article", the phrase "the provisions of Article 23 of the Corporation Tax Act" with "the provisions of Article 23 of the Corporation Tax Act (Act No. 34 of 1965) as applied with the replacement of terms pursuant to the provisions of Article 15 of the Supplementary Provisions of the Amending Act", and the phrase "and the Act on Special Measures Concerning Taxation" in paragraph (3) of that Article with "and the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 10 (Partial Amendment of the Act on Special Measures Concerning Taxation) of the Act Partially Amending the Income Tax Act, etc. (Act No. 109 of 1988), which remains in force pursuant to the provisions of Article 68, paragraph (1) (Transitional Measures Concerning Special Provisions on Corporation Tax Rates on Income Appropriated for Dividends, etc.) of the Supplementary Provisions of that Act and as read with the replacement of terms pursuant to the provisions of that paragraph and paragraph (2) of that Article".

With regard to the calculation of the amount of income of a corporation prescribed in Article 42-3, paragraph (1), (3) or (4) of the Former Act on Special Measures Concerning Taxation for business years beginning during the period from April 1, 1989 to March 31, 1990, and of the amount of its liquidation income arising from dissolution on or before that date, the provisions of that Article remain in force. In this case, the phrase "25 percent" in paragraph (1) of that Article is deemed to be replaced with "12.5 percent", the phrase "Article 23 of the Corporation Tax Act" with "Article 23 of the Corporation Tax Act (Act No. 34 of 1965) as applied with the replacement of terms pursuant to the provisions of Article 15 of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 109 of 1988; referred to as the "Amending Act" in paragraph (4)) (referred to as "Article 23 of the Corporation Tax Act as read under the amending Act" in paragraph (3))", the phrase "25 percent" in paragraph (3) of that Article with "12.5 percent", the phrase "Article 23 of that Act" with "Article 23 of the Corporation Tax Act as read under the amending Act", the phrase "Article 93 of that Act" in paragraph (4) of that Article with "Article 93 of the Corporation Tax Act prior to the amendment by the provisions of Article 2 of the Amending Act (hereinafter referred to as "Article 93 of the former Corporation Tax Act" in this paragraph) and Article 93 of the Corporation Tax Act as applied with the replacement of terms pursuant to the provisions of Article 19, paragraph (1) of the Supplementary Provisions of the Amending Act (hereinafter referred to as "Article 93 of the Corporation Tax Act as read under the amending Act" in this paragraph)", the phrase "paragraph (2), item (ii) of that Article" with "Article 93, paragraph (2), item (ii) of the former Corporation Tax Act or Article 93, paragraph (2), item (ii) of the Corporation Tax Act as read under the amending Act", the phrase "the provisions of that item" with "those provisions", the phrase "the amount of dividends, etc. received" with "the amount of dividends, etc. received (limited to those received in each business year during liquidation beginning on or before March 31, 1990), divided into the amount of dividends, etc. received in each business year during liquidation that began before April 1, 1989 and the amount of dividends, etc. received in a business year during liquidation that began during the period from that date to March 31, 1990, the amount of dividends, etc. for each of those divisions", and the phrase "the amount equivalent to 25 percent of" with "the total of the amounts calculated by multiplying by 25 percent for each business year during liquidation that began before April 1, 1989 and by 12.5 percent for a business year during liquidation that began during the period from that date to March 31, 1990, respectively", and beyond that, necessary matters concerning the application of the provisions of that Article are specified by Cabinet Order.

With regard to the amount of foreign country's corporate tax prescribed in Article 66-7, paragraph (3) of the Former Act on Special Measures Concerning Taxation that pertains to the amount of dividends, etc. prescribed in that paragraph that a domestic corporation prescribed in that paragraph received, in each business year that began before April 1, 1989, from a specified foreign subsidiary, etc. prescribed in that paragraph pertaining to that domestic corporation, the provisions then in force continue to govern.

With regard to the application of the provisions of Article 68-3, paragraph (1) of the New Act on Special Measures Concerning Taxation in the case where a cooperative, etc. prescribed in Article 68-3 of the New Act on Special Measures Concerning Taxation has, in a business year beginning during the period from April 1, 1989 to March 31, 1990, an amount of income subject to the reduced tax rate prescribed in Article 42-2, paragraph (1) of the Former Act on Special Measures Concerning Taxation, which remains in force pursuant to the provisions of Article 68, paragraph (1) of the Supplementary Provisions, the phrase "), the amount of the portion exceeding" in that paragraph is deemed to be replaced with "; hereinafter referred to as the 'base income amount' in this paragraph), the amount of the portion exceeding (if there is an amount of income subject to the reduced tax rate prescribed in Article 42-2, paragraph (1) (Special Provisions on Corporation Tax Rates on Income Appropriated for Dividends, etc.) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 10 (Partial Amendment of the Act on Special Measures Concerning Taxation) of the Act Partially Amending the Income Tax Act, etc. (Act No. 109 of 1988), which remains in force pursuant to the provisions of Article 68, paragraph (1) (Transitional Measures Concerning Special Provisions on Corporation Tax Rates on Income Appropriated for Dividends, etc.) of the Supplementary Provisions of that Act, the amount of the portion exceeding the base income amount or that amount of income subject to the reduced tax rate, whichever is greater)".

①The provisions of Article 69-3, paragraphs (1) and (2) of the New Act on Special Measures Concerning Taxation apply to inheritance tax on small-scale residential land, etc. prescribed in paragraph (1) of that Article acquired by inheritance or bequest on or after January 1, 1988, and the provisions then in force continue to govern inheritance tax on small-scale residential land, etc. prescribed in Article 69-3, paragraph (1) of the Former Act on Special Measures Concerning Taxation acquired by inheritance or bequest before that date. In this case, with regard to the application of the provisions of Article 69-3, paragraph (1) of the New Act on Special Measures Concerning Taxation to property acquired by inheritance or bequest during the period from that date to the Effective Date, the phrase "for business or residential purposes" in that paragraph is deemed to be replaced with "for business (including anything specified by Cabinet Order as being equivalent to business; the same applies hereinafter in this paragraph and the following paragraph) or residential purposes".

②The provisions of Article 35 of the Supplementary Provisions apply mutatis mutandis to the case where the provisions of Article 69-3, paragraphs (1) and (2) of the New Act on Special Measures Concerning Taxation apply pursuant to the provisions of the preceding paragraph. In this case, the phrase "Chapter II, Section 1" in Article 35 of the Supplementary Provisions is deemed to be replaced with "Chapter II, Section 1 (including Article 69-3 of the Act on Special Measures Concerning Taxation as amended by the provisions of Article 10)".

The provisions of Article 69-4 of the New Act on Special Measures Concerning Taxation apply to inheritance tax on land, etc. or buildings, etc. prescribed in paragraph (2) of that Article acquired by inheritance or bequest on or after the day following the Effective Date, or on such land, etc. or buildings, etc. acquired by gift that are subject to the provisions of Article 19 of the New Inheritance Tax Act and for which the succession relevant to that application commenced on or after that day.

The provisions of Article 70, paragraphs (3) through (5) and Article 70-2, paragraphs (1) and (2) of the New Act on Special Measures Concerning Taxation apply to inheritance tax on property acquired by inheritance or bequest on or after the Effective Date, and the provisions then in force continue to govern inheritance tax on property acquired by inheritance or bequest before the Effective Date.

The provisions of Article 70-7, paragraph (1) of the New Act on Special Measures Concerning Taxation apply to permission for payment in installments pertaining to a written application under the provisions of paragraph (5) of that Article submitted on or after the day following the Effective Date, and the provisions then in force continue to govern permission for payment in installments pertaining to a written application under the provisions of Article 70-7, paragraph (5) of the Former Act on Special Measures Concerning Taxation submitted before that day.

①The provisions of Article 70-9 of the New Act on Special Measures Concerning Taxation apply to inheritance tax pertaining to permission for payment in installments granted on or after the Effective Date under the provisions of Article 38, paragraph (1) or Article 43, paragraph (5) of the New Inheritance Tax Act, and with regard to inheritance tax for which permission for payment in installments was granted under those provisions before the Effective Date, the provisions then in force continue to govern, except as provided in the following paragraph and paragraph (3).

②If, among the amounts of inheritance tax for which payment in installments was permitted before the Effective Date and for which the ratio of the value of real property, etc. prescribed in Article 70-9, paragraph (1) of the New Act on Special Measures Concerning Taxation to the total value of the property that served as the basis for calculating that amount of inheritance tax is three-quarters or more, there is any amount for which the due date for payment of an installment payment pertaining to payment in installments falls on or after the Effective Date, the district director of the tax office may, upon application by the person who received that permission for payment in installments made by the first such due date falling on or after the Effective Date (or, if the period from the Effective Date to that due date is less than four months, by the day on which four months have elapsed from the Effective Date), with respect to those installment payments whose due date falls on or after the Effective Date that are specified by Cabinet Order as corresponding to the value of that real property, etc., extend the time limit for payment in installments within the range of a period equivalent to one-third of the period of payment in installments on and after the Effective Date (if that period includes a fraction of less than one month, the period calculated by counting that fraction as one month), and change the annual installment amounts on and after the Effective Date in accordance with the provisions of Article 38, paragraph (2) of the New Inheritance Tax Act.

③In the case prescribed in the preceding paragraph, if a person who received permission for payment in installments before the Effective Date has submitted the written statement prescribed in Article 70-9, paragraph (4) of the New Act on Special Measures Concerning Taxation to the district director of the tax office with jurisdiction over the place for tax payment by the due date for payment of the first installment payment pertaining to payment in installments falling on or after the Effective Date (or, if the period from the Effective Date to that due date is less than four months, by the day on which four months have elapsed from the Effective Date), the portion of the interest tax on the amount of inheritance tax for which the due date for payment of an installment payment pertaining to payment in installments falls on or after the Effective Date that corresponds to the period on and after the Effective Date is to be calculated in accordance with the provisions of paragraph (2) of that Article.

①With regard to commodity tax on articles prescribed in Article 88-3 of the Former Act on Special Measures Concerning Taxation that was imposed, or should have been imposed, before the provisions of Article 10 come into effect, the provisions then in force continue to govern.

②With regard to commodity tax on motor vehicles falling under the provisions of Article 88-4 of the Former Act on Special Measures Concerning Taxation that were removed from the manufacturing site where they were manufactured, or taken out of a bonded area, within the period prescribed in that Article, the provisions then in force continue to govern.

③The provisions then in force continue to govern the application of penal provisions to acts committed before the provisions of Article 10 come into effect and to acts committed after the provisions of that Article come into effect with respect to commodity tax that the provisions then in force continue to govern pursuant to the provisions of the preceding two paragraphs.

①With regard to sugar excise tax on sugars prescribed in Articles 90-8 through 90-10, Article 91 or Article 92 of the Former Act on Special Measures Concerning Taxation that was imposed, or should have been imposed, before the provisions of Article 10 come into effect, the provisions then in force continue to govern.

②With regard to sugar excise tax on sugars already taxed in the case where, before the provisions of Article 10 come into effect, articles have been manufactured using as raw materials sugars already taxed pursuant to the provisions of Article 90-11, paragraph (1) of the Former Act on Special Measures Concerning Taxation, the provisions then in force continue to govern.

③The provisions then in force continue to govern the application of penal provisions to acts committed before the provisions of Article 10 come into effect and to acts committed after the provisions of that Article come into effect with respect to sugar excise tax that the provisions then in force continue to govern pursuant to the provisions of the preceding two paragraphs.

①With regard to stamp tax on gift certificates prescribed in Article 93-2 of the Former Act on Special Measures Concerning Taxation that was imposed, or should have been imposed, before the provisions of Article 10 come into effect, the provisions then in force continue to govern.

②The provisions then in force continue to govern the application of penal provisions to acts committed before the provisions of Article 10 come into effect and to acts committed after the provisions of that Article come into effect with respect to stamp tax that the provisions then in force continue to govern pursuant to the provisions of the preceding paragraph.

①With regard to the application of the provisions of Article 95, paragraph (1) of the Act on Special Measures Concerning Taxation in the case where a transport business operator prescribed in Article 8 of the Travel Tax Act (Act No. 43 of 1940) provides services, on or after April 1, 1989, to passengers of aircraft flying on remote island air routes prescribed in that paragraph and receives, during the period from the Effective Date to March 31, 1989, consideration for the provision of services from passengers of aircraft flying on those remote island air routes, the phrase "5 percent" in that paragraph is deemed to be replaced with "3 percent".

②With regard to travel tax on passenger fares for aircraft flying on remote island air routes prescribed in Article 95, paragraph (1) of the Former Act on Special Measures Concerning Taxation that were received before April 1, 1989, or on passenger fares received on or after that date as consideration for the provision of services by aircraft flying on those remote island air routes rendered before that date, the provisions then in force continue to govern.

With regard to how income tax should be imposed on gains from the transfer of shares, etc., a review is to be conducted, including the question of a shift to comprehensive taxation, together with the review of how income tax should be imposed on interest income based on the provisions of Article 51 of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 96 of 1987), while giving consideration to the state of development of an environment for ascertaining income, such as the question of introducing a taxpayer identification number system, to how the overall tax rate structure, including the level of the top tax rate, should be, and to the relationship with an appropriate withholding system.