①Where a resident or nonresident who has a permanent establishment who files a final return (including a return under the provisions of Article 123, paragraph (1) of the Income Tax Act (including as applied mutatis mutandis pursuant to Article 166 of that Act) as applied mutatis mutandis pursuant to paragraph (9) (including as applied mutatis mutandis pursuant to Article 37-13-3, paragraph (10)); hereinafter the same applies in this Article) has an amount of capital loss on listed shares, etc. for any year from 2016 onward, notwithstanding the provisions of the second sentence of Article 37-11, paragraph (1), the amount of capital loss on listed shares, etc. is deducted in calculating the amount of dividend income, etc. on listed shares, etc. prescribed in Article 8-4, paragraph (1) for the year covered by the final return, up to the amount of dividend income, etc. on listed shares, etc. for that year.

②The amount of capital loss on listed shares, etc. prescribed in the preceding paragraph means, out of the amount calculated pursuant to the provisions of Cabinet Order as the amount of losses arising from the resident or nonresident who has a permanent establishment having made any of the following transfers of listed shares, etc. among transfers of listed shares, etc. (excluding those that fall under the provisions of Article 32, paragraph (2)), the amount calculated pursuant to the provisions of Cabinet Order as the portion that cannot be fully deducted even after deduction in calculating the amount of capital gains, etc. on listed shares, etc. prescribed in Article 37-11, paragraph (1) for the year that includes the day on which the person made that transfer:

③The provisions of paragraph (1) apply only where the final return for the year for which the application of the provisions of that paragraph is sought states that the application of the provisions of that paragraph is sought, and has attached to it a written statement concerning the calculation of the amount of capital loss on listed shares, etc. and other documents specified by Order of the Ministry of Finance.

④With regard to the application of the provisions of Article 8-4 in the case where the provisions of paragraph (1) apply, the phrase "calculated amount (" in paragraph (1) of that Article is deemed to be replaced with "calculated amount (where the provisions of Article 37-12-2, paragraph (1) apply, the amount after that application;".

⑤Where a resident or nonresident who has a permanent establishment who files a final return has an amount of capital loss on listed shares, etc. that arose in any year within the three years before that year (excluding any amount deducted in or before the previous year by applying the provisions of this paragraph), notwithstanding the provisions of the second sentence of Article 37-11, paragraph (1), an amount equivalent to that amount of capital loss on listed shares, etc. is, pursuant to the provisions of Cabinet Order, deducted in calculating the amount of capital gains, etc. on listed shares, etc. and the amount of dividend income, etc. on listed shares, etc. for the year covered by the final return, up to the amount of capital gains, etc. on listed shares, etc. prescribed in that paragraph and the amount of dividend income, etc. on listed shares, etc. prescribed in Article 8-4, paragraph (1) (where the provisions of paragraph (1) apply, the amount after that application; the same applies hereinafter in this paragraph) for that year.

⑥The amount of capital loss on listed shares, etc. prescribed in the preceding paragraph means, out of the amount calculated pursuant to the provisions of Cabinet Order as the amount of losses arising from the resident or nonresident who has a permanent establishment having made, on or after January 1, 2003, any of the transfers of listed shares, etc. listed in the items of paragraph (2) among transfers of listed shares, etc. (excluding those that fall under the provisions of Article 32, paragraph (2)), the amount calculated pursuant to the provisions of Cabinet Order as the portion that cannot be fully deducted even after deduction in calculating the amount of capital gains, etc. on listed shares, etc. prescribed in Article 37-11, paragraph (1) for the year that includes the day on which the person made that transfer (excluding any amount deducted by applying the provisions of paragraph (1)).

⑦The provisions of paragraph (5) apply only where the resident or nonresident who has a permanent establishment prescribed in that paragraph has filed, for income tax for the year in which the amount of capital loss on listed shares, etc. prescribed in the preceding paragraph arose, a final return to which a written statement concerning the calculation of that amount of capital loss on listed shares, etc. and other documents specified by Order of the Ministry of Finance are attached, and has continuously filed final returns thereafter, and where the final return referred to in paragraph (5) has attached to it a written statement concerning the calculation of the amount to be deducted under the provisions of that paragraph and other documents specified by Order of the Ministry of Finance.

⑧With regard to the application of the provisions of Article 8-4 (excluding paragraph (3)) and Article 37-11 (excluding paragraph (6)) in the case where the provisions of paragraph (5) apply, the phrase "calculated amount (" in Article 8-4, paragraph (1) and Article 37-11, paragraph (1) is deemed to be replaced with "calculated amount (where the provisions of Article 37-12-2, paragraph (5) apply, the amount after that application;".

⑨The provisions of Article 123, paragraph (1) (excluding item (ii)) of the Income Tax Act (including as applied mutatis mutandis pursuant to Article 166 of that Act) apply mutatis mutandis to the case where a resident or nonresident who has a permanent establishment seeks the application of the provisions of paragraph (5) in or after the year following the relevant year, and the case falls under neither the case where the person must file a return under the provisions of Article 120, paragraph (1) of that Act (including as applied mutatis mutandis pursuant to Article 166 of that Act) for income tax for the relevant year nor the case where the person may file a return under the provisions of Article 122, paragraph (1) or Article 123, paragraph (1) of that Act (including as applied mutatis mutandis pursuant to Article 166 of that Act). In this case, in Article 123, paragraph (1) of the Income Tax Act, the phrase "seeks the application of the provisions of Article 70, paragraph (1) or paragraph (2) (Deduction for Carryover of Net Loss) or Article 71, paragraph (1) (Deduction for Carryover of Casualty Loss), or seeks a refund under the provisions of Article 142, paragraph (2) (Procedures for Issuing Refunds Based on Carryback of Net Loss), during the third period" is deemed to be replaced with "seeks the application of the provisions of Article 37-12-2, paragraph (5) (Deduction for Carryover of Capital Loss on Listed Shares, etc.) of the Act on Special Measures Concerning Taxation", and the phrase "listed in the items of the following paragraph" is deemed to be replaced with "the amount of capital loss on listed shares, etc. prescribed in paragraph (6) of that Article that arose in that year (hereinafter referred to in this paragraph as the 'amount of capital loss on listed shares, etc.'), the amount of capital loss on listed shares, etc. that arose in each year within the three years before that year, and other matters specified by Cabinet Order"; in item (i) of that paragraph, the phrase "amount of net loss" is deemed to be replaced with "amount of capital loss on listed shares, etc."; and in item (iii) of that paragraph, the phrase "amount of net loss and casualty loss (Article 70, paragraph (1) or paragraph (2) or Article 71, paragraph (1)" is deemed to be replaced with "amount of capital loss on listed shares, etc. (Article 37-12-2, paragraph (5) of the Act on Special Measures Concerning Taxation", the phrase "and excluding those that formed the basis for calculating the amount to be refunded pursuant to the provisions of Article 142, paragraph (2); the same applies in that item" is deemed to be replaced with "excluding", the phrase "those amounts" is deemed to be replaced with "that amount of capital loss on listed shares, etc.", and the phrase "amount of gross income, amount of retirement income and amount of timber income" is deemed to be replaced with "amount of capital gains, etc. on listed shares, etc. prescribed in Article 37-11, paragraph (1) (Special Provisions on Taxation on Capital Gains, etc. on Listed Shares, etc.) of that Act and amount of dividend income, etc. on listed shares, etc. prescribed in Article 37-12-2, paragraph (5) of that Act".

⑩With regard to the application of the provisions of the Act on General Rules for National Taxes in the case where the provisions of paragraph (5) apply, in Article 2, item (vi), (c), 1. of that Act, the phrase "or casualty loss" is deemed to be replaced with "or casualty loss, or the amount of capital loss on listed shares, etc. prescribed in Article 37-12-2, paragraph (6) (Deduction for Carryover of Capital Loss on Listed Shares, etc.) of the Act on Special Measures Concerning Taxation", and the phrase "that Act" is deemed to be replaced with "those Acts".

⑪Special provisions on the matters to be stated in the final return to be filed in the case where the application of the provisions of paragraph (5) is sought in or after the year following the relevant year or in that year, and other necessary matters concerning the application of the provisions of the preceding paragraphs are specified by Cabinet Order.