This Act comes into effect on April 1, 2018; provided, however, that the provisions set forth in the following items come into effect on the dates specified respectively in those items:

Except as otherwise provided in these Supplementary Provisions, the provisions of the Income Tax Act as amended by Article 1 (hereinafter referred to as the "New Income Tax Act" up to Article 18 and in Article 81 of the Supplementary Provisions) apply to income tax for tax year 2020 and subsequent tax years, and the provisions then in force continue to govern income tax for tax year 2019 (meaning the tax year covering the period from January 1, 2019 to December 31, 2019; the same applies hereinafter up to Article 81 of the Supplementary Provisions) and earlier tax years.

The provisions of Article 2, paragraph (1), item (viii)-4 of the new Income Tax Act (limited to the part concerning Nonresidents) apply to income tax for tax year 2019 and subsequent tax years or to domestic source income as prescribed in Article 212, paragraph (1) of the new Income Tax Act to be received on or after January 1, 2019, and the provisions then in force continue to govern income tax for tax year 2018 and earlier tax years or domestic source income as prescribed in Article 212, paragraph (1) of the Income Tax Act before the amendment by Article 1 (hereinafter referred to as the "former Income Tax Act" up to Article 18 of the Supplementary Provisions) to be received before that date.

The provisions of Article 2, paragraph (1), item (viii)-4 of the new Income Tax Act (limited to the part concerning Foreign Corporations) apply to taxable income of a Foreign Corporation as prescribed in Article 5, paragraph (2), item (ii) of the new Income Tax Act to be received in a business year beginning on or after January 1, 2019, and the provisions then in force continue to govern taxable income of a Foreign Corporation as prescribed in Article 5, paragraph (2), item (ii) of the former Income Tax Act to be received in a business year that began before that date.

With regard to the application of the provisions of the Income Tax Act and other laws and regulations concerning income tax to a Nonresident that had a former permanent establishment (meaning a Nonresident that had, as of December 31, 2018, a permanent establishment as prescribed in Article 2, paragraph (1), item (viii)-4 of the Former Income Tax Act (referred to as a "former permanent establishment" in item (i) of the following paragraph) but did not have anything falling under a permanent establishment as prescribed in Article 2, paragraph (1), item (viii)-4 of the New Income Tax Act (referred to as a "new permanent establishment" in the items of the following paragraph)) in the case where the provisions of Article 2, paragraph (1), item (viii)-4 of the New Income Tax Act apply pursuant to the provisions of paragraph (1), the phrase "a Nonresident that has a permanent establishment" in Article 2, paragraph (1), item (xlii) of that Act is deemed to be replaced with "a Nonresident that had a former permanent establishment as prescribed in Article 3, paragraph (3) (Transitional Measures Concerning the Definition of Permanent Establishment for Nonresidents or Foreign Corporations) of the Supplementary Provisions of the Act Partially Amending the Income Tax Act, etc. (Act No. 7 of 2018)".

With regard to the application of the provisions of the Income Tax Act and the Act on Special Measures Concerning Taxation in the case where the provisions of Article 2, paragraph (1), item (viii)-4 of the New Income Tax Act apply pursuant to the provisions of paragraph (1) or paragraph (2), the following provisions apply:

Beyond what is provided for in the preceding two paragraphs, necessary particulars concerning the application of the provisions of laws and regulations concerning income tax in the case where the provisions of Article 2, paragraph (1), item (viii)-4 of the New Income Tax Act apply pursuant to the provisions of paragraph (1) or paragraph (2) are specified by Cabinet Order.

The provisions of Article 25, paragraph (2) of the New Income Tax Act apply to mergers and split-off type company splits as referred to in that paragraph that are carried out on or after the date on which this Act comes into effect (hereinafter referred to as "the effective date").

With regard to the calculation of the amount of business income for each tax year from 2018 through 2030 of an individual that, at the time this Act comes into effect, is actually engaged in a business prescribed in Article 53, paragraph (1) of the former Income Tax Act (hereinafter referred to as a "covered business" in this paragraph and paragraph (3)) (including an individual that, on or after the effective date, receives a transfer of a covered business actually being carried on at the time this Act comes into effect; referred to as an "individual covered by the transitional rule" in paragraph (3)), the provisions of that Article (including where the calculation is made in accordance with that Article pursuant to the provisions of Article 165, paragraph (1) of the former Income Tax Act; the same applies in the following paragraph and paragraph (3)) remain in force. In this case, the phrase "the amount calculated pursuant to the provisions of Cabinet Order" in Article 53, paragraph (1) of the former Income Tax Act is deemed to be replaced with "the amount equivalent to nine-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2022, "the amount equivalent to eight-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2023, "the amount equivalent to seven-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2024, "the amount equivalent to six-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2025, "the amount equivalent to five-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2026, "the amount equivalent to four-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2027, "the amount equivalent to three-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2028, "the amount equivalent to two-tenths of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2029, and "the amount equivalent to one-tenth of the amount calculated pursuant to the provisions of Cabinet Order" for tax year 2030.

The amount of the reserve account for losses on returned goods that was included in necessary expenses in calculating the amount of business income for tax year 2030 pursuant to the provisions of Article 53, paragraph (1) of the Former Income Tax Act, which remain in force pursuant to the provisions of the preceding paragraph, is included in gross revenue in calculating the amount of business income for tax year 2031.

The amount of the reserve account for losses on returned goods that was included in necessary expenses in calculating the amount of business income for tax year 2017 of an individual that carried on a covered business before the effective date (other than an individual covered by the transitional rule) pursuant to the provisions of Article 53, paragraph (1) of the former Income Tax Act, and any other amount specified by Cabinet Order as equivalent thereto, are included in gross revenue in calculating the amount of business income for tax year 2018.

Necessary particulars concerning the application of the provisions of the preceding three paragraphs are specified by Cabinet Order.

The provisions of Article 57-4, paragraph (1) of the New Income Tax Act apply to share exchanges carried out on or after the effective date, and the provisions then in force continue to govern share exchanges carried out before the effective date.

The provisions of Article 58, paragraph (1) of the New Income Tax Act apply to an exchange referred to in that paragraph that an individual carries out on or after the date specified in Article 1, item (x) of the Supplementary Provisions, and the provisions then in force continue to govern an exchange referred to in Article 58, paragraph (1) of the Former Income Tax Act that an individual carried out before that date.

With regard to the calculation of the amount of business income for each tax year from 2018 through 2023 of an individual that, before the effective date, made a sale or other disposition of assets as prescribed in Article 65, paragraph (1) of the Former Income Tax Act (excluding a transfer under a lease as prescribed in Article 65, paragraph (1) of the New Income Tax Act; hereinafter referred to as a "specified sale of assets" in this Article) that falls under a sale on deferred payment terms as prescribed in Article 65, paragraph (3) of the Former Income Tax Act (hereinafter referred to as a "sale on deferred payment terms" in this Article) (including an individual that received a transfer of a contract for a specified sale of assets falling under a sale on deferred payment terms that was made before the effective date), the provisions of Article 65 of the Former Income Tax Act (limited to the part concerning specified sales of assets, and including where the calculation is made in accordance with that Article pursuant to the provisions of Article 165, paragraph (1) of the Former Income Tax Act) remain in force.

If the amount of revenue and the amount of expenses from a specified sale of assets falling under a sale on deferred payment terms of an individual subject to the provisions of the main clause of Article 65, paragraph (1) of the former Income Tax Act that remains in force pursuant to the provisions of the preceding paragraph (referred to as the "former Income Tax Act remaining in force" in item (i), the following paragraph, and paragraph (7)) (including where the calculation is made in accordance with that paragraph pursuant to the provisions of Article 165, paragraph (1) of the former Income Tax Act; the same applies in the following paragraph and paragraph (7)) fall under any of the cases set forth in the following items, that amount of revenue and amount of expenses (excluding those included in gross revenue and necessary expenses in calculating the amount of business income for the tax years of the years before the year specified in the relevant item; referred to respectively as the "unrecorded revenue amount" and the "unrecorded expense amount" in the following paragraph) are included in gross revenue and necessary expenses in calculating the amount of business income for the tax year of the year specified in the relevant item (referred to as the "reference year" in the following paragraph and paragraph (4)):

In the case where the amount of revenue and the amount of expenses from a specified sale of assets falling under a sale on deferred payment terms of an individual subject to the provisions of the main clause of Article 65, paragraph (1) of the former Income Tax Act remaining in force fall under any of the cases set forth in the items of the preceding paragraph, if the unrecorded revenue amount relating to that specified sale of assets exceeds the unrecorded expense amount relating to that specified sale of assets, notwithstanding the provisions of that paragraph, the amount set forth in item (i) (or, for the year that includes the date on which the business was discontinued and for a year in which the amount set forth in item (i) exceeds the amount set forth in item (ii), the amount set forth in item (ii)) is included in gross revenue and necessary expenses in calculating the amount of business income for each tax year from the reference year onward:

The provisions of the preceding paragraph apply only if the Tax Return for income tax for the tax year of the reference year contains a statement to the effect that the provisions of that paragraph are to be applied.

Even if no Tax Return as referred to in the preceding paragraph is filed or if a Tax Return is filed that is not filled out as referred to in that paragraph, the district director may apply the provisions of paragraph (3) on finding there to be unavoidable circumstances for the failure to file the Tax Return or fill it out in that manner.

The number of months referred to in paragraph (3), item (i) is calculated in accordance with the calendar, and any fraction of less than one month is rounded down.

Special provisions on the handling of the amount of revenue and the amount of expenses from a specified sale of assets falling under a sale on deferred payment terms in the case of the death or Absence From Japan of an individual subject to the provisions of the main clause of Article 65, paragraph (1) of the Former Income Tax Act Remaining in Force, and other necessary particulars concerning the application of the provisions of paragraphs (1) through (3), are specified by Cabinet Order.

The provisions of Article 93 of the new Income Tax Act apply to the amount equivalent to foreign tax adjusted at the time of distribution as prescribed in paragraph (1) of that Article relating to distributions of proceeds from collective Investment Trusts as prescribed in that paragraph that a Resident receives on or after January 1, 2020.

The provisions of Article 95, paragraph (7) of the New Income Tax Act apply to income tax for tax year 2019 and subsequent tax years, and the provisions then in force continue to govern income tax for tax year 2018 and earlier tax years.

The provisions of Article 121, paragraph (3) of the New Income Tax Act apply to income tax for tax year 2018 and subsequent tax years, and the provisions then in force continue to govern income tax for tax year 2017 and earlier tax years.

The provisions of Article 162, paragraph (2) of the New Income Tax Act apply to income tax for tax year 2019 and subsequent tax years, and the provisions then in force continue to govern income tax for tax year 2018 and earlier tax years.

The provisions of Article 165-5-3 of the new Income Tax Act apply to the amount equivalent to foreign tax adjusted at the time of distribution as prescribed in paragraph (1) of that Article relating to distributions of proceeds from collective Investment Trusts as prescribed in that paragraph that a Nonresident with a permanent establishment receives on or after January 1, 2020.

The provisions of Article 169, item (iii) and Article 213, paragraph (1), item (i), (a) of the New Income Tax Act apply to pensions set forth in Article 161, paragraph (1), item (xii), (b) of the New Income Tax Act that are to be paid on or after January 1, 2020, and the provisions then in force continue to govern pensions set forth in Article 161, paragraph (1), item (xii), (b) of the Former Income Tax Act that were to be paid before that date.

The provisions of Article 190 and Appended Tables II through V of the New Income Tax Act apply to salary or other wages as prescribed in Article 183, paragraph (1) of the New Income Tax Act (referred to as "salary or other wages" in the following paragraph) that are to be paid on or after January 1, 2020, and the provisions then in force continue to govern salary or other wages as prescribed in Article 183, paragraph (1) of the Former Income Tax Act that were to be paid before that date.

The provisions of Article 195-3 of the New Income Tax Act apply to a salary income earner's return for basic personal exemption as prescribed in paragraph (2) of that Article that is submitted with regard to salary or other wages to be received on or after January 1, 2020.

The provisions of Article 198, paragraph (7) of the New Income Tax Act apply to salary income earners' returns for insurance premium deduction as prescribed in Article 196, paragraph (3) of the New Income Tax Act that are submitted on or after October 1, 2020.

The provisions of Article 203-7 of the New Income Tax Act apply to public pensions and retirement packages as prescribed in Article 203-2 of the New Income Tax Act that are to be paid on or after the date specified in Article 1, item (xi) of the Supplementary Provisions, and the provisions then in force continue to govern public pensions and retirement packages as prescribed in Article 203-2 of the Former Income Tax Act that were to be paid before that date.

The provisions of Article 228-4, paragraph (1) of the New Income Tax Act apply to statements and similar reports as prescribed in that paragraph that are to be submitted on or after January 1, 2021, and the provisions then in force continue to govern statements and similar reports as prescribed in Article 228-4, paragraph (1) of the Former Income Tax Act that are to be submitted before that date.

The provisions then in force continue to govern the application of penal provisions to conduct engaged in 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 conduct engaged in after this Act comes into effect in the cases in which prior laws are to continue to govern pursuant to the provisions of these Supplementary Provisions.

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