This Act comes into effect on April 1, 2006; provided, however, that the provisions set forth in the following items come into effect on the dates specified respectively in those items:

Unless otherwise provided for in these Supplementary Provisions, the provisions of the Income Tax Act as amended by the provisions of Article 1 (hereinafter referred to as the "New Income Tax Act" up to Article 21 of the Supplementary Provisions) apply to income tax for 2006 and subsequent years, and the provisions then in force continue to govern income tax for 2005 and prior years.

The provisions of Article 2, paragraph (1), item (iv) of the New Income Tax Act apply to the income specified in Article 7, paragraph (1), items (i) through (iii) of the New Income Tax Act on or after the date on which this Act comes into effect (hereinafter referred to as "the effective date"), and the provisions then in force continue to govern the income specified in Article 7, paragraph (1), items (i) through (iii) of the Income Tax Act prior to the amendment by the provisions of Article 1 (hereinafter referred to as the "Former Income Tax Act" up to Article 22 of the Supplementary Provisions) before the effective date.

Except for those specified in the following paragraph, the provisions of Article 24 of the New Income Tax Act apply to dividends, etc. prescribed in paragraph (1) of that Article for which the record date for the payment of those dividends, etc. is on or after the date specified in Article 1, item (vi) of the Supplementary Provisions (hereinafter referred to as the "effective date of the Companies Act"), and the provisions then in force continue to govern dividends, etc. prescribed in Article 24, paragraph (1) of the Former Income Tax Act for which the record date for the payment of those dividends, etc. is before the effective date of the Companies Act.

The provisions of Article 24 of the New Income Tax Act apply to dividends, etc. prescribed in paragraph (1) of that Article that are made by a resolution under Article 454, paragraph (1) or (5) of the Companies Act, or by a resolution of the board of directors in the case where the articles of incorporation provide as prescribed in Article 459, paragraph (1) of that Act, even if the record date for the payment of those dividends, etc. is before the effective date of the Companies Act.

Except for those specified in the following paragraph, the provisions of Article 25 of the New Income Tax Act (limited to the part concerning paragraph (1), item (iii)) apply to money or other assets received through a refund of capital prescribed in that item for which the record date for that refund of capital is on or after the effective date of the Companies Act, and the provisions then in force continue to govern money or other assets received through a reduction of capital or contributions prescribed in Article 25, paragraph (1), item (iii) of the Former Income Tax Act for which the record date for that reduction of capital or contributions is before the effective date of the Companies Act.

The provisions of Article 25 of the New Income Tax Act apply to money or other assets received through a refund of capital prescribed in paragraph (1), item (iii) of that Article that is made by a resolution under Article 454, paragraph (1) or (5) of the Companies Act, or by a resolution of the board of directors in the case where the articles of incorporation provide as prescribed in Article 459, paragraph (1) of that Act, even if the record date for that refund of capital is before the effective date of the Companies Act.

The provisions then in force continue to govern money or other assets received through a cancellation of shares prescribed in Article 25, paragraph (1), item (iv) of the Former Income Tax Act where that cancellation of shares took place before the effective date.

The provisions of Article 25 of the New Income Tax Act (limited to the part concerning paragraph (1), item (v)) apply to money or other assets received by reason of an event set forth in that item where that event occurs on or after the effective date, and the provisions then in force continue to govern money or other assets received through a refund of equity interest prescribed in Article 25, paragraph (1), item (vi) of the Former Income Tax Act where that refund of equity interest took place before the effective date.

The provisions of Article 25 of the New Income Tax Act (limited to the part concerning paragraph (1), item (vi)) apply to money or other assets received through an entity conversion prescribed in that item where that entity conversion takes place on or after the effective date of the Companies Act.

The provisions of Article 45, paragraphs (2) and (3) of the New Income Tax Act apply to the amount of money and the value of things other than money, rights or other economic benefits prescribed in paragraph (2) of that Article that an individual provides on or after the effective date.

The provisions of Article 57-3, paragraph (1) of the new Income Tax Act apply to transactions in a foreign currency prescribed in that paragraph (referred to as "transactions in a foreign currency" in the following paragraph) that an individual conducts on or after the effective date.

The provisions of Article 57-3, paragraph (2) of the new Income Tax Act apply to transactions in a foreign currency that an individual conducted before the effective date and for which the yen-converted amount (meaning the yen-converted amount prescribed in paragraph (1) of that Article) was fixed by concluding a forward exchange contract, etc. prescribed in paragraph (2) of that Article on or after the effective date, and to transactions in a foreign currency conducted on or after the effective date.

The provisions of Article 57-4 of the New Income Tax Act (limited to the part concerning paragraphs (1) and (2)) apply to a transfer of old shares prescribed in paragraph (1) of that Article through a share exchange prescribed in that paragraph, or a transfer of old shares prescribed in paragraph (2) of that Article through a share transfer prescribed in that paragraph, that an individual conducts on or after October 1, 2006.

The provisions of Article 57-4 of the new Income Tax Act (limited to the part concerning paragraph (3)) apply to transfers of the Securities set forth in the items of that paragraph by reason of the events specified in those items that an individual conducts on or after the effective date of the Companies Act.

The provisions of Article 76 of the New Income Tax Act apply to income tax for 2007 and subsequent years, and the provisions then in force continue to govern income tax for 2006 and prior years.

The provisions of Article 77 of the New Income Tax Act apply to income tax for 2007 and subsequent years, and the provisions then in force continue to govern income tax for 2006 and prior years.

If, in any year from 2007 onward, a Resident has paid non-life insurance premiums (meaning non-life insurance premiums prescribed in that paragraph; hereinafter the same applies in this paragraph) under a long-term non-life insurance contract or similar contract concluded on or before December 31, 2006 (limited to a non-life insurance contract or similar contract prescribed in Article 77, paragraph (1) of the former Income Tax Act which is a contract with a special provision for the payment of a maturity refund after the expiry of the insurance period or mutual aid period, or any other contract specified by Cabinet Order as equivalent thereto, for which those periods are 10 years or more, and which has not been changed on or after January 1, 2007, and excluding a non-life insurance contract or similar contract whose insurance period or mutual aid period begins (or, for a contract for which no such period is specified, which takes effect) on or after January 1, 2007; hereinafter the same applies in this Article), the provisions of Article 77 of the new Income Tax Act may be applied by treating the amount to be deducted pursuant to paragraph (1) of that Article, notwithstanding the provisions of that paragraph, as the amount specified in each of the following items according to the category of case set forth in that item. In such a case, in that paragraph, the phrase "保険又は共済" (insurance or mutual aid) is deemed to be replaced with "保険若しくは共済" (insurance or mutual aid, joining a smaller group of alternatives), the phrase "保険金又は共済金" (insurance proceeds or mutual aid benefits) is deemed to be replaced with "保険金若しくは共済金" (insurance proceeds or mutual aid benefits, joining a smaller group of alternatives), the phrase "又は掛金" (or installments) is deemed to be replaced with "若しくは掛金" (or installments, joining a smaller group of alternatives), and the phrase "has paid" is deemed to be replaced with "or non-life insurance premiums prescribed in Article 10, paragraph (2) (Transitional Measures for Earthquake Insurance Premium Deduction) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc., and Other Matters (Act No. 10 of 2006) under a long-term non-life insurance contract or similar contract prescribed in that paragraph, has paid", and in paragraph (3) of that Article, the phrase "A deduction" is deemed to be replaced with "A deduction (including a deduction under Article 10, paragraph (2) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc., and Other Matters (Act No. 10 of 2006))".

When calculating the amount specified in each item of the preceding paragraph, if a single non-life insurance contract or similar contract or a single long-term non-life insurance contract or similar contract falls under both a contract prescribed in item (i) and a contract prescribed in item (ii) of that paragraph, the provisions of that paragraph apply by deeming it to fall under only one of those contracts, whichever it may be.

Beyond what is provided for in the preceding paragraph, necessary matters concerning the application of the provisions of laws and regulations concerning income tax in the case where the provisions of paragraph (2) apply are specified by Cabinet Order.

The provisions of Article 84, paragraph (1) and Article 89, paragraph (1) of the New Income Tax Act apply to income tax for 2007 and subsequent years, and the provisions then in force continue to govern income tax for 2006 and prior years.

Notwithstanding the provisions of Article 104, paragraph (1) of the new Income Tax Act, the Tax Prepayment calculation base prescribed in that paragraph for a Resident's income tax for 2007 (referred to as the "Tax Prepayment calculation base" in the following paragraph) is the amount obtained by deducting the amount set forth in item (ii) from the amount set forth in item (i):

The Tax Prepayment calculation base for a Nonresident's income tax for 2007 is calculated in accordance with the provisions of the preceding paragraph.

The provisions of Article 120, paragraph (5) of the new Income Tax Act (including as applied mutatis mutandis pursuant to Article 122, paragraph (3), Article 123, paragraph (3), Article 125, paragraph (4) and Article 127, paragraph (4) of the new Income Tax Act (including the cases where these provisions are applied mutatis mutandis pursuant to Article 166 of the new Income Tax Act) and Article 166 of the new Income Tax Act; the same applies hereinafter in this Article) apply in the case where a Resident who has a period of being a Non-Permanent Resident referred to in Article 120, paragraph (5) of the new Income Tax Act on or after the effective date submits a Tax Return for income tax for 2006 or any subsequent year.

With regard to the application of the provisions of Article 140, paragraph (1) or Article 141, paragraph (1) of the new Income Tax Act (including the cases where these provisions are applied mutatis mutandis pursuant to Article 166 of the new Income Tax Act) in the case where there is a Net Loss prescribed in Article 2, paragraph (1), item (xxv) of the new Income Tax Act (referred to as a "Net Loss" in the following paragraph) in 2007, the amount of income tax that forms the basis for calculating the refund under those provisions is the amount obtained by deducting an amount equivalent to 10 percent of that amount of income tax (or 125,000 yen, if that amount exceeds 125,000 yen) from the amount of income tax calculated by applying the provisions of Part II, Chapter III, Section 1 of the former Income Tax Act as read with the replacement of terms under Article 4 of the former law on income tax burden reduction measures and the provisions of Article 165 of the former Income Tax Act as read with the replacement of terms under Article 5 of the former law on income tax burden reduction measures.

Beyond what is provided for in the preceding paragraph, necessary matters concerning the application of the provisions of Article 140, paragraph (5) and Article 141, paragraph (4) of the new Income Tax Act (including the cases where these provisions are applied mutatis mutandis pursuant to Article 166 of the new Income Tax Act) in the case where there is a Net Loss in 2007 are specified by Cabinet Order.

The provisions of Article 157, paragraphs (1) through (3) of the New Income Tax Act apply to acts or calculations that a corporation performs on or after the effective date, and the provisions then in force continue to govern acts or calculations that a corporation performed before the effective date.

The provisions of Article 157, paragraph (4) of the New Income Tax Act apply to acts or calculations that a corporation performs on or after October 1, 2006, and the provisions then in force continue to govern acts or calculations that a corporation performed before that date.

The provisions of Part IV, Chapter II, Section 1 of the New Income Tax Act and Appended Tables 2 through 4 of the New Income Tax Act apply to salary, etc. prescribed in Article 183, paragraph (1) of the New Income Tax Act that is to be paid on or after January 1, 2007, and the provisions then in force continue to govern salary, etc. prescribed in Article 183, paragraph (1) of the Former Income Tax Act that is to be paid before that date.

The provisions of Article 183, paragraph (2) of the New Income Tax Act apply to bonuses prescribed in that paragraph for which the date on which the payment referred to in that paragraph was determined is on or after the effective date of the Companies Act, and the provisions then in force continue to govern bonuses prescribed in Article 183, paragraph (2) of the Former Income Tax Act for which the date on which the payment referred to in that paragraph was determined is before the effective date of the Companies Act.

The provisions of Article 203-3 of the New Income Tax Act apply to public pensions, etc. prescribed in Article 203-2 of the New Income Tax Act that are to be paid on or after January 1, 2007, and the provisions then in force continue to govern public pensions, etc. prescribed in Article 203-2 of the Former Income Tax Act that are to be paid before that date.

The provisions of Article 224-3 of the New Income Tax Act apply to transfers of shares, etc. prescribed in paragraph (2) of that Article that are made on or after the effective date of the Companies Act, and the provisions then in force continue to govern transfers of shares, etc. prescribed in Article 224-3, paragraph (2) of the Former Income Tax Act that were made before the effective date of the Companies Act.

With regard to the application of the provisions of Article 224-3, paragraph (2) of the new Income Tax Act (limited to the part concerning items (i) and (iv)) in the case where the provisions of Article 98, paragraph (2) or Article 214, paragraph (2) of the Act on Arrangement of Relevant Acts Incidental to Enforcement of the Companies Act (Act No. 87 of 2005; hereinafter referred to as the "Companies Act Arrangement Act" in this Article) apply, the shares prescribed in item (i) of that paragraph are to include rights to subscribe for new shares that the provisions then in force continue to govern pursuant to the provisions of Article 98, paragraph (2) of the Companies Act Arrangement Act, and the preferred equity investments prescribed in Article 224-3, paragraph (2), item (iv) of the new Income Tax Act are to include rights to subscribe for preferred equity investments that the provisions then in force continue to govern pursuant to the provisions of Article 214, paragraph (2) of the Companies Act Arrangement Act.

The provisions of Article 225, paragraph (1) of the New Income Tax Act (limited to the part concerning item (vi)) apply to remuneration prescribed in that item that is to be paid on or after the effective date, and the provisions then in force continue to govern remuneration prescribed in Article 225, paragraph (1), item (vi) of the Former Income Tax Act that is to be paid before the effective date.

The provisions of Article 226, paragraphs (4) and (5) of the New Income Tax Act apply to withholding records of salary, etc. referred to in paragraph (1) of that Article that are delivered on or after January 1, 2007.

The provisions of Article 231, paragraphs (2) and (3) of the New Income Tax Act apply to payment statements of salary, etc. referred to in paragraph (1) of that Article that are delivered on or after January 1, 2007.

The provisions then in force continue to govern public notices that a district director gave before the effective date pursuant to the provisions of Article 233 of the Former Income Tax Act.

With regard to the application of penal provisions to acts committed before this Act (or, for the provisions set forth in the items of Article 1 of the Supplementary Provisions, those provisions; the same applies hereinafter in this Article) comes into effect and to acts committed after this Act comes into effect in the cases where the provisions then in force continue to govern pursuant to the provisions of these Supplementary Provisions, the provisions then in force continue to govern.

Beyond what is provided for in these Supplementary Provisions, transitional measures necessary for the enforcement of this Act are specified by Cabinet Order.