This Act comes into effect on April 1, 1979; provided, however, that the provisions adding one Article after Article 12-3, the provisions adding one item to Article 18, paragraph (1), the provisions adding one Article after Article 45-2, the provisions adding one item to Article 52, paragraph (1), and the provisions adding one item to Article 66-10, paragraph (1) come into effect on the effective date of the Act on Temporary Measures for Small and Medium Sized Enterprises in Production Areas (Act No. 53 of 1979).

Unless otherwise provided, the provisions of Chapter II of the Act on Special Measures Concerning Taxation as amended (hereinafter referred to as the "New Act") apply to income tax for 1979 and subsequent years, and with regard to income tax for 1978 and earlier years, the provisions then in force continue to govern.

The provisions of Article 7-2 of the New Act apply to interest prescribed in that Article that the State, the Bank of Japan or an authorized foreign exchange bank prescribed in that Article pays on borrowings or deposits prescribed in that Article that it borrows or accepts on or after the Effective Date of this Act (hereinafter referred to as the "Effective Date"), and with regard to interest prescribed in Article 7-2, item (i) of the Act on Special Measures Concerning Taxation prior to the amendment (hereinafter referred to as the "Former Act") that the State or the Bank of Japan pays on borrowings or deposits prescribed in that item that it borrowed or accepted before the Effective Date, interest prescribed in item (ii) of that Article that an authorized foreign exchange bank prescribed in that item or any other domestic corporation specified by Cabinet Order pays on borrowings or deposits prescribed in that item that it borrowed or accepted before the Effective Date, and interest prescribed in item (iii) of that Article that a domestic corporation pays on borrowings prescribed in that item that it borrowed before the Effective Date, the provisions then in force continue to govern.

The provisions of Article 8, paragraph (2) of the New Act apply to interest prescribed in that paragraph that securities companies, etc. prescribed in that paragraph are to receive on or after the Effective Date, and with regard to such interest that those securities companies, etc. were to receive before the Effective Date, the provisions then in force continue to govern.

①With regard to income tax in the case where an individual prescribed in Article 10-2, paragraph (1) of the Former Act has put specified machinery and equipment, etc. prescribed in that paragraph, of which the individual made an acquisition, etc. (meaning acquisition, manufacture or construction; the same applies hereinafter up to the following Article) before the Effective Date, into use for the business prescribed in that paragraph, the provisions of Article 10-2 of the Former Act remain in force. In this case, the phrase "the following Article through" in paragraph (1) of that Article is deemed to be replaced with "the following Article (including Article 5, paragraphs (2) and (3) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation and the Act on Fund for Smooth Management of National Tax Revenue (Act No. 11 of 1978; hereinafter referred to as the "1978 Amendment Act") and Article 6, paragraph (1) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979; hereinafter referred to as the "1979 Amendment Act")) through", the phrase "an individual listed in item (ii) or items (iv) through (vii)" is deemed to be replaced with "an individual listed in item (ii) or items (iv) through (vi) or an individual prescribed in Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "depreciable assets listed in item (ii) or items (iv) through (vii)" is deemed to be replaced with "depreciable assets listed in item (ii) or items (iv) through (vi) or depreciable assets prescribed in Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "if there is an amount to be deducted, that amount" in paragraph (2) of that Article is deemed to be replaced with "if there is an amount to be deducted, or if there is an amount to be deducted from the amount of income tax on the amount of gross income for that year pursuant to the provisions of Article 10-2, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 13 of 1981; hereinafter referred to as the "1981 Amendment Act"), which is deemed to remain in force pursuant to the provisions of Article 3, paragraph (1) of the Supplementary Provisions of the 1981 Amendment Act, or Article 10-2, paragraph (3) of the Act on Special Measures Concerning Taxation as amended by the 1981 Amendment Act, those amounts", and the phrase "Article 10-2, paragraph (1) of the Act on Special Measures Concerning Taxation" in paragraph (6) of that Article is deemed to be replaced with "Article 10-2, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979), which is deemed to remain in force pursuant to the provisions of Article 5, paragraph (1) of the Supplementary Provisions of that Act".

②With regard to the application of the provisions of Articles 10-2, 28-3, 33-6 and 37-3 of the New Act in the case where the provisions of the preceding paragraph apply, the phrase "exceeding the amount equivalent to 20 percent" in Article 10-2, paragraph (1) of the New Act is deemed to be replaced with "exceeding the amount equivalent to 20 percent (or, if there is an amount to be deducted from the amount of income tax on the amount of gross income for that year pursuant to the provisions of Article 10-2, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979; hereinafter referred to as the "1979 Amendment Act"), which is deemed to remain in force pursuant to the provisions of Article 5, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act, the amount remaining after deducting that amount)", the phrase "if there is an amount to be deducted, that amount" in paragraph (2) of that Article is deemed to be replaced with "if there is an amount to be deducted, or if there is an amount to be deducted from the amount of income tax on the amount of gross income for that year pursuant to the provisions of Article 10-2, paragraph (1) or (2) of the Act on Special Measures Concerning Taxation prior to the amendment by the 1979 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 5, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act, those amounts", and the phrase "through Article 16" in Article 28-3, paragraph (11), Article 33-6, paragraph (2) and Article 37-3, paragraph (2) of the New Act is deemed to be replaced with "through Article 16, and Article 10-2 of the Act on Special Measures Concerning Taxation prior to the amendment by the 1979 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 5, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act".

③With regard to the application of the provisions of Article 10-2 of the Act on Special Measures Concerning Taxation as amended by the 1981 Amendment Act (hereinafter referred to as the "Act on Special Measures Concerning Taxation as Amended in 1981") in the case where the provisions of paragraph (1) apply, the phrase "if there is an amount to be deducted, that amount" in paragraph (4) of that Article is deemed to be replaced with "if there is an amount to be deducted, or if there is an amount to be deducted from the amount of income tax on the amount of gross income for that year pursuant to the provisions of Article 10-2, paragraph (2) of the Act on Special Measures Concerning Taxation prior to the amendment by the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979; hereinafter referred to as the "1979 Amendment Act"), which is deemed to remain in force pursuant to the provisions of Article 5, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act, those amounts".

①With regard to depreciable assets specified before the Effective Date by Cabinet Order as prescribed in item (vii) of the table in Article 11, paragraph (1) of the Former Act, of which an individual listed in that item makes an acquisition, etc. within the period specified by Cabinet Order under that paragraph in relation to those depreciable assets, the provisions then in force continue to govern.

②With regard to the application of the provisions of Article 10-2, Articles 12-2 through 14, Article 16, Article 16-2, Article 28-3, Article 33-6 and Article 37-3 of the New Act in the case where the provisions of the preceding paragraph apply, the phrase "the following Article through" in Article 10-2, paragraph (1) of the New Act is deemed to be replaced with "the following Article (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act) through", the phrase "the preceding two Articles" in Article 12-2, paragraph (1) of the New Act is deemed to be replaced with "the preceding two Articles (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)", the phrase "the preceding three Articles" in Article 12-3, paragraphs (1) and (2) of the New Act is deemed to be replaced with "the preceding three Articles (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)", the phrase "Article 11" in Article 12-4, paragraph (1), Article 13, paragraph (1), Article 13-2, paragraph (1), Article 14, paragraph (2), Article 16, paragraph (1) and Article 16-2, paragraph (2) of the New Act is deemed to be replaced with "Article 11 (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)", and the phrase "Article 10-2 through" in Article 28-3, paragraph (11), Article 33-6, paragraph (2) and Article 37-3, paragraph (2) of the New Act is deemed to be replaced with "Article 10-2, Article 11 (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act) through".

③With regard to the application of the provisions of Articles 12 through 12-3 of the Act on Special Measures Concerning Taxation as amended by the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 9 of 1980) (hereinafter referred to as the "Act on Special Measures Concerning Taxation as Amended in 1980" in this paragraph, Article 16, paragraph (3) and Article 20, paragraph (4) of the Supplementary Provisions) in the case where the provisions of paragraph (1) apply, the phrase "the preceding Article" in Article 12, paragraph (1) of the Act on Special Measures Concerning Taxation as Amended in 1980 is deemed to be replaced with "the preceding Article (including Article 6, paragraph (1) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979; referred to as the "1979 Amendment Act" in Articles 12-2 and 12-3))", the phrase "Article 11" in Article 12-2, paragraphs (1) and (2) of the Act on Special Measures Concerning Taxation as Amended in 1980 is deemed to be replaced with "Article 11 (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)", and the phrase "the preceding three Articles" in Article 12-3, paragraph (1) of the Act on Special Measures Concerning Taxation as Amended in 1980 is deemed to be replaced with "Article 11 (including Article 6, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act), Article 12 and Article 12-2".

④The provisions of Article 12-2, paragraph (1) of the New Act apply to industrial machinery, etc. prescribed in that paragraph of which an individual makes an acquisition, etc. and which the individual puts into use for the individual's business on or after the Effective Date, and with regard to the case where an individual has put industrial machinery, etc. prescribed in Article 12-2, paragraph (1) of the Former Act, of which the individual made an acquisition, etc. before the Effective Date, into use for the individual's business, the provisions then in force continue to govern. In this case, with regard to the application of the provisions of Article 12-2, paragraph (1) of the New Act to industrial machinery, etc. prescribed in that paragraph of which an acquisition, etc. is made, during the period from the Effective Date to March 31, 1980, within a district listed in items (iii) and (iv) of the table in that paragraph, the phrase "one-fourth" in item (iii) of that table is deemed to be replaced with "one-third", the phrase "one-sixth" with "one-fifth", the phrase "one-third" in item (iv) of that table with "one-half", and the phrase "one-fifth" with "one-fourth".

⑤The provisions of Article 14, paragraph (1) of the New Act apply to rental housing prescribed in that paragraph that an individual acquires or newly builds on or after the Effective Date, and with regard to rental housing prescribed in Article 14, paragraph (1) of the Former Act that an individual acquired or newly built before the Effective Date, the provisions then in force continue to govern.

⑥With regard to the business conversion facilities, etc. prescribed in Article 16-2, paragraph (1) of the Former Act of an individual listed in item (v) of that paragraph, in the case where that individual received the certification listed in that item on or before March 30, 1979, the provisions then in force continue to govern.

With regard to the inclusion in gross revenue from business income of the amount of the reserve for program guarantees that an individual prescribed in Article 20-2, paragraph (1) of the Former Act accumulated in 1978 pursuant to the provisions of that paragraph, the provisions of Article 20-2, paragraphs (2) through (4) and paragraph (6) of the New Act govern.

With regard to the application of the provisions of Article 21, paragraph (1) of the New Act in the case where the gross revenue pertaining to business income for 1979 of an individual prescribed in that paragraph includes revenue from overseas transactions involving technology, etc. prescribed in that paragraph, the phrase "35 percent of that revenue (for revenue from the transactions listed in item (iii) of the following paragraph" in that paragraph is deemed to be replaced with "35 percent of that revenue within the period from January 1, 1979 to March 31 of that year (for revenue from the transactions listed in items (iii) and (iv) of the following paragraph, 20 percent) and the amount equivalent to 35 percent of that revenue within the period from April 1 to December 31 of that year (for revenue from the transactions listed in item (iii) of that paragraph", and the phrase "the total of the amounts equivalent to" with "the total of the amount equivalent to".

The provisions of Article 28-4, paragraph (2) of the New Act apply to income tax on a transfer, etc. of land prescribed in paragraph (1) of that Article that an individual carries out on or after the Effective Date, and with regard to income tax on such a transfer, etc. of land that an individual carried out before the Effective Date, the provisions then in force continue to govern.

If an individual engaged in medical practice or dental practice has, in 1979, amounts to be received for social insurance medical care prescribed in Article 26, paragraph (1) of the New Act, with regard to the application of the provisions of that paragraph to income tax for 1979, the phrase "70 percent" in the right-hand column of the table in that paragraph is deemed to be replaced with "70.5 percent", the phrase "62 percent" with "64.5 percent", the phrase "57 percent" with "60.75 percent", and the phrase "52 percent" with "57 percent".

①With regard to a claim for a refund of income tax under Article 140 of the Income Tax Act (Act No. 33 of 1965), as read with the replacement of terms pursuant to the provisions of Article 28-5, paragraph (1) of the Former Act, or under Article 141 of the Income Tax Act as applied pursuant to the provisions of Article 28-5, paragraph (2) of the Former Act, relating to the amount of net loss prescribed in Article 28-5, paragraph (1) of the Former Act incurred in 1977 by a resident falling under a certified small and medium sized enterprise referred to in that paragraph, the provisions then in force continue to govern.

②With regard to a claim for a refund of income tax under Article 140 of the Income Tax Act, as read with the replacement of terms pursuant to the provisions of Article 28-5, paragraph (1) of the New Act, or under Article 141 of the Income Tax Act as applied pursuant to the provisions of Article 28-5, paragraph (2) of the New Act, relating to the amount of net loss prescribed in Article 28-5, paragraph (1) of the New Act incurred in 1978 by a resident falling under a certified small and medium sized enterprise referred to in that paragraph (excluding a person who has received the certification under Article 3, paragraph (1) of the Act on Temporary Measures for Small and Medium Sized Enterprises Affected by the Appreciation of the Yen (Act No. 2 of 1978)), notwithstanding these provisions, the claim for a refund may be made by the day on which four months have elapsed from the Effective Date.

③In the case referred to in the preceding paragraph, with regard to a resident (including an heir prescribed in Article 28-5, paragraph (2) of the New Act; the same applies in the following paragraph) who has already made a claim for a refund of income tax under Article 140 or 141 of the Income Tax Act with regard to the amount of net loss prescribed in that paragraph incurred in 1978 by the resident prescribed in that paragraph, the provisions of the preceding paragraph may be applied by deeming that claim for a refund not to have been made.

④If a resident who falls under the provisions of the preceding paragraph and receives the application of the provisions of paragraph (2) has received a refund based on the claim for a refund prescribed in the preceding paragraph, the portion of the amount of that refund up to the amount of the refund based on the claim for a refund prescribed in paragraph (2) is deemed to be a partial payment of the refund based on the claim for a refund prescribed in that paragraph.

①The provisions of Article 29-3 of the New Act apply to pensions prescribed in that Article that are to be paid on or after the Effective Date, and with regard to such pensions that were to be paid before the Effective Date, the provisions then in force continue to govern.

②The provisions of Article 190 of the Income Tax Act, as read with the replacement of terms pursuant to the provisions of Article 41-14, paragraph (2) of the New Act, apply in the case where the last day in the year on which salary, etc. prescribed in that Article is paid falls on or after the Effective Date, and with regard to the case where the last day in the year on which salary, etc. prescribed in that Article is paid falls before the Effective Date, the provisions then in force continue to govern.

③The provisions of Article 194, paragraph (1) of the Income Tax Act, as read with the replacement of terms pursuant to the provisions of Article 41-14, paragraph (2) of the New Act, apply to salary income earners' returns for deduction for Dependents, etc. prescribed in paragraph (4) of that Article that are submitted on or after the Effective Date.

The provisions of Article 37-5 of the New Act apply to income from a transfer of shares or capital contributions prescribed in paragraph (1), item (i) of that Article, or from a sale and purchase of shares prescribed in item (ii) of that paragraph, that is carried out on or after the Effective Date, in the case where income from a transfer of shares or capital contributions prescribed in item (i) of that paragraph or from a sale and purchase of shares prescribed in item (ii) of that paragraph carried out on or after the Effective Date falls under the income listed in item (i) or (ii) of that paragraph, and with regard to income from a transfer of shares or capital contributions prescribed in item (i) of that paragraph or from a sale and purchase of shares prescribed in item (ii) of that paragraph carried out before the Effective Date, the provisions then in force continue to govern.

The provisions of Article 41-3, paragraph (3), item (ii), (e) of the New Act apply to asset-building housing savings contracts prescribed in that paragraph that are concluded on or after the Effective Date pursuant to the provisions of that paragraph, and with regard to asset-building housing savings contracts prescribed in Article 41-3, paragraph (3) of the Former Act that were concluded before the Effective Date pursuant to the provisions of that paragraph, the provisions then in force continue to govern.

Unless otherwise provided, the provisions of Chapter III of the New Act apply to corporation tax for business years of a corporation (including an association or foundation without juridical personality prescribed in Article 2, item (viii) of the Corporation Tax Act (Act No. 34 of 1965); the same applies hereinafter) commencing on or after the Effective Date, and with regard to corporation tax for business years of a corporation that commenced before the Effective Date, the provisions then in force continue to govern.

①With regard to depreciable assets specified before the Effective Date by Cabinet Order as prescribed in item (vii) of the table in Article 43, paragraph (1) of the Former Act, of which a corporation listed in that item makes an acquisition, etc. (meaning acquisition, manufacture or construction; the same applies hereinafter in this Article and Articles 21 and 30 of the Supplementary Provisions) within the period specified by Cabinet Order under that paragraph in relation to those depreciable assets, the provisions then in force continue to govern.

②With regard to the application of the provisions of Article 42-4, Articles 45 through 47, Articles 49 through 51-2, Articles 64 through 65, Article 65-7, Article 65-8 and Article 67-4 of the New Act in the case where the provisions of the preceding paragraph apply, the phrase "the following Article through" in Article 42-4, paragraph (1) of the New Act is deemed to be replaced with "the following Article (including Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act) through", the phrase "the preceding two Articles" in Article 45, paragraph (1) of the New Act is deemed to be replaced with "the preceding two Articles (including Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)", the phrase "the preceding three Articles" in Article 45-2, paragraphs (1) and (3) of the New Act is deemed to be replaced with "the preceding three Articles (including Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)", and the phrase "Article 43" in Article 45-3, paragraph (1), Article 45-4, paragraph (1), Article 46, paragraph (1), Article 47, paragraph (2), Article 49, paragraph (1), Article 50, paragraph (1), Article 51, paragraph (2), Article 51-2, paragraph (2), Article 64, paragraph (6) (including as applied mutatis mutandis pursuant to Article 64-2, paragraph (6) and Article 65, paragraph (6)), Article 65-7, paragraph (7) (including as applied mutatis mutandis pursuant to Article 65-8, paragraph (7)) and Article 67-4, paragraph (6) of the New Act is deemed to be replaced with "Article 43 (including Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)".

③With regard to the application of the provisions of Articles 42-4, 45 and 45-2 of the Act on Special Measures Concerning Taxation as Amended in 1980 in the case where the provisions of paragraph (1) apply, the phrase "(the following Article" in Article 42-4, paragraph (1) of the Act on Special Measures Concerning Taxation as Amended in 1980 is deemed to be replaced with "(the following Article (including Article 16, paragraph (1) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979; referred to as the "1979 Amendment Act" in Article 45, paragraph (1), Article 45-2, paragraphs (1) and (3) and Article 63, paragraph (1), item (iv)))", and the phrase "Article 43" in Article 45, paragraph (1) and Article 45-2, paragraphs (1) and (3) of the Act on Special Measures Concerning Taxation as Amended in 1980 is deemed to be replaced with "Article 43 (including Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act)".

④The provisions of Article 45, paragraph (1) of the New Act apply to industrial machinery, etc. prescribed in that paragraph of which a corporation makes an acquisition, etc. and which the corporation puts into use for its business on or after the Effective Date, and with regard to the case where a corporation has put industrial machinery, etc. prescribed in Article 45, paragraph (1) of the Former Act, of which it made an acquisition, etc. before the Effective Date, into use for its business, the provisions then in force continue to govern. In this case, with regard to the application of the provisions of Article 45, paragraph (1) of the New Act to industrial machinery, etc. prescribed in that paragraph of which an acquisition, etc. is made, during the period from the Effective Date to March 31, 1980, within a district listed in items (iii) and (iv) of the table in that paragraph, the phrase "one-fourth" in item (iii) of that table is deemed to be replaced with "one-third", the phrase "one-sixth" with "one-fifth", the phrase "one-third" in item (iv) of that table with "one-half", and the phrase "one-fifth" with "one-fourth".

⑤The provisions of Article 47, paragraph (1) of the New Act apply to rental housing prescribed in that paragraph that a corporation acquires or newly builds on or after the Effective Date, and with regard to rental housing prescribed in Article 47, paragraph (1) of the Former Act that a corporation acquired or newly built before the Effective Date, the provisions then in force continue to govern.

⑥The provisions of Article 48, paragraph (1) of the New Act apply to specified stockpiling facilities, etc. prescribed in that paragraph that a corporation acquires or constructs on or after the Effective Date, and with regard to specified stockpiling facilities, etc. prescribed in Article 48, paragraph (1) of the Former Act that a corporation acquired or constructed before the Effective Date, the provisions then in force continue to govern.

⑦With regard to the business conversion facilities, etc. prescribed in Article 51-2, paragraph (1) of the Former Act of a corporation listed in item (v) of that paragraph, in the case where that corporation received the certification listed in that item on or before March 30, 1979, the provisions then in force continue to govern.

⑧The provisions of Article 52, paragraph (1), item (iv) of the New Act apply to the contributions prescribed in that item that a corporation pays on or after the effective date of the Act on Temporary Measures for Small and Medium Sized Enterprises in Production Areas.

①If a corporation prescribed in Article 53, paragraph (1) of the New Act holds a reserve amount deferred from inclusion in gross profit in the first business year commencing on or after the Effective Date (excluding the case where that business year is a business year that includes the day of dissolution (excluding dissolution due to a merger); referred to as the "business year of the amendment" hereinafter up to the following paragraph), with regard to the application of the provisions of Article 53, paragraph (3) of the Former Act to that reserve amount deferred from inclusion in gross profit, notwithstanding the provisions of that paragraph, in each business year from the business year of the amendment to the business year that includes the day preceding the day on which two years have elapsed from the first day of the business year of the amendment, the amount equivalent to the amount calculated by multiplying that reserve amount deferred from inclusion in gross profit by the number of months in that business year and dividing the result by 24 (or, if that amount exceeds the remaining reserve amount deferred from inclusion in gross profit (meaning the amount obtained by deducting, from the reserve amount deferred from inclusion in gross profit, the amount that has been included or is to be included in gross profit by that day pursuant to the provisions of paragraph (3), or the amount included in gross profit pursuant to the provisions of this paragraph in a business year that ended before that day; the same applies hereinafter in this paragraph and paragraph (3)) as of the end of that business year, that remaining reserve amount deferred from inclusion in gross profit) is included in gross profit in calculating the amount of income for that business year.

②The reserve amount deferred from inclusion in gross profit prescribed in the preceding paragraph means, out of the amount of the reserve for price fluctuations under Article 53, paragraph (1) of the Former Act held as of the end of the business year immediately preceding the business year of the amendment, the amount calculated as specified by Cabinet Order as the amount relating to securities prescribed in item (i), (b) of that paragraph other than shares and to securities prescribed in item (ii) of that paragraph other than shares listed on a securities exchange.

③If a corporation receiving the application of the provisions of paragraph (1) comes to fall under any of the cases listed in the following items, the amount equivalent to the amount listed in the respective item is included in gross profit in calculating the amount of income for the business year that includes the day on which it comes to fall under that case:

④The number of months referred to in paragraph (1) is calculated in accordance with the calendar, and any fraction of less than one month is counted as one month.

⑤The treatment of the reserve amount deferred from inclusion in gross profit prescribed in paragraph (1) in the case where a corporation prescribed in Article 53, paragraph (1) of the New Act has carried out a merger, and any other matters necessary for the application of the provisions of that paragraph, are specified by Cabinet Order.

⑥The provisions of Article 54 of the New Act apply to the amount of the reserve for overseas market development by small and medium sized enterprises, etc. accumulated in a business year of a corporation ending on or after the Effective Date, and with regard to the amount of the reserve for overseas market development by small and medium sized enterprises, etc. accumulated in a business year of a corporation that ended before the Effective Date, the provisions then in force continue to govern. In this case, with regard to the application of the provisions of that Article to a corporation prescribed in paragraph (1) of that Article whose amount of capital or amount of capital contributions exceeds 100 million yen at the end of a business year that commenced before the Effective Date and ends on or after the Effective Date, the phrase "the amount calculated by dividing" in that paragraph is deemed to be replaced with "the amount calculated by dividing (for a business year that commenced before the Effective Date of the 1979 Amendment Act and ends on or after that date, the amount obtained by adding, to the total of the amount equivalent to 8.5/1,000 of the amount calculated by multiplying the revenue from the transactions listed in item (i) of the following paragraph by the number of months in the period from the first day of that business year to March 31, 1979 (referred to as the "designated period for the former reserve rate" in this paragraph) and dividing the result by the number of months in that base year and the amount equivalent to 8.2/1,000 of the amount calculated by multiplying the revenue from those transactions by the number of months obtained by deducting the number of months in the designated period for the former reserve rate from the number of months in that business year and dividing the result by the number of months in that base year, the total of the amount equivalent to 11.5/1,000 of the amount calculated by multiplying the revenue from the transactions listed in items (ii) through (viii) of the following paragraph by the number of months in the designated period for the former reserve rate and dividing the result by the number of months in that base year and the amount equivalent to 11.2/1,000 of the amount calculated by multiplying the revenue from those transactions by the number of months obtained by deducting the number of months in the designated period for the former reserve rate from the number of months in that business year and dividing the result by the number of months in that base year)".

⑦The provisions of Article 56-7, paragraph (4) of the New Act apply to the inclusion in gross profit of the amount of the reserve for planned afforestation that a corporation accumulates pursuant to the provisions of paragraph (1) of that Article in a business year commencing on or after the Effective Date, and with regard to the inclusion in gross profit of the amount of the reserve for planned afforestation that a corporation accumulated pursuant to the provisions of Article 56-7, paragraph (1) of the Former Act in a business year that commenced before the Effective Date, the provisions then in force continue to govern.

⑧With regard to the inclusion in gross profit of the amount of the reserve for program guarantees that a corporation prescribed in Article 56-9, paragraph (1) of the Former Act accumulated pursuant to the provisions of that paragraph in the business year immediately preceding the first business year commencing on or after the Effective Date, the provisions of Article 56-9, paragraphs (2) through (5) and paragraph (7) of the New Act govern.

The provisions of Article 58 of the New Act apply to corporation tax on income for business years of corporations ending on or after the Effective Date, and with regard to corporation tax on income for business years of corporations that ended before the Effective Date, the provisions then in force continue to govern. In this case, with regard to the application of the provisions of paragraph (1) of that Article in the case where a corporation has revenue from overseas transactions involving technology, etc. prescribed in that paragraph in a business year that commenced before the Effective Date and ends on or after the Effective Date, the phrase "35 percent of that revenue (for revenue from the transactions listed in item (iii) of the following paragraph" in that paragraph is deemed to be replaced with "35 percent of that revenue within the period from the first day of that business year to March 31, 1979 (for revenue from the transactions listed in items (iii) and (iv) of the following paragraph, 20 percent) and the amount equivalent to 35 percent of that revenue within the period from April 1 of that year to the end of that business year (for revenue from the transactions listed in item (iii) of that paragraph", and the phrase "the total of the amounts equivalent to" with "the total of the amount equivalent to".

①The provisions of Article 63, paragraph (3) of the New Act apply to corporation tax on a transfer, etc. of land prescribed in paragraph (1) of that Article that a corporation carries out on or after the Effective Date, and with regard to corporation tax on such a transfer, etc. of land that a corporation carried out before the Effective Date, the provisions then in force continue to govern.

②The provisions of Article 63, paragraph (6), item (ii) of the New Act apply to the calculation of the amount of corporation tax in the case where a corporation receives the application of the provisions of Article 42-3 or 42-4 of the New Act in each business year ending on or after the Effective Date.

③The provisions of Article 65-4 of the New Act apply to corporation tax on a transfer of assets falling under the provisions of that Article that a corporation carries out on or after January 1, 1979, and with regard to corporation tax on a transfer of assets falling under the provisions of Article 65-4 of the Former Act that a corporation carried out before that date, the provisions then in force continue to govern.

①With regard to corporation tax in the case where a corporation prescribed in Article 66, paragraph (1), item (i) of the Former Act carries out a merger in accordance with a small and medium sized enterprise structural improvement plan prescribed in that item that received, before the Effective Date, the approval under Article 4, paragraph (1) or (2) of the Act on Promotion of Modernization of Small and Medium Sized Enterprises (Act No. 64 of 1963), the provisions then in force continue to govern.

②With regard to corporation tax in the case where a corporation that files a blue return and falls under a small and medium sized enterprise prescribed in Article 66, paragraph (1), item (ii) of the Former Act, being one specified by Cabinet Order, carries out a merger after receiving, during the period from the Effective Date to March 31, 1980, the approval prescribed in that item, the provisions of that Article remain in force. In this case, the phrase "a corporation that is a small and medium sized enterprise" in that item is deemed to be replaced with "a corporation that is a small and medium sized enterprise and is specified by Cabinet Order as prescribed in Article 20, paragraph (2) of the Supplementary Provisions of the 1979 Amendment Act".

③With regard to the application of the provisions of Article 63 of the New Act in the case where the provisions of the preceding two paragraphs apply, the phrase "Article 66, paragraph (1)" in paragraph (1), item (iv) of that Article is deemed to be replaced with "Article 66, paragraph (1) (including Article 20, paragraphs (1) and (2) of the Supplementary Provisions of the 1979 Amendment Act)".

④With regard to the application of the provisions of Article 63 of the Act on Special Measures Concerning Taxation as Amended in 1980 in the case where the provisions of paragraph (1) or (2) apply, the phrase "by a merger" in paragraph (1), item (iv) of that Article is deemed to be replaced with "by a merger (excluding one to which the provisions of Article 20, paragraph (1) or (2) of the Supplementary Provisions of the 1979 Amendment Act apply)".

①With regard to corporation tax in the case where a corporation prescribed in Article 66-5, paragraph (1) of the Former Act has put specified machinery and equipment, etc. prescribed in that paragraph, of which it made an acquisition, etc. before the Effective Date, into use for the business prescribed in that paragraph, the provisions of that Article remain in force. In this case, the phrase "and Article 42-3, and Article 67 of that Act" in paragraph (1) of that Article is deemed to be replaced with ", Article 42-3, and Article 42-4 of the Act on Special Measures Concerning Taxation prior to the amendment by the 1981 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 10, paragraph (1) of the Supplementary Provisions of the 1981 Amendment Act, and Article 67 of the Corporation Tax Act", the phrase "Article 43 through" is deemed to be replaced with "Article 43 (including Article 14, paragraphs (2) and (3) of the Supplementary Provisions of the 1978 Amendment Act and Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act) through", the phrase "a corporation listed in item (ii) or items (iv) through (vii)" is deemed to be replaced with "a corporation listed in item (ii) or items (iv) through (vi) or a corporation prescribed in Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "depreciable assets listed in item (ii) or items (iv) through (vii)" is deemed to be replaced with "depreciable assets listed in item (ii) or items (iv) through (vi) or depreciable assets prescribed in Article 16, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "if there is an amount to be deducted, that amount" in paragraph (2) of that Article is deemed to be replaced with "if there is an amount to be deducted, or if there is an amount to be deducted from the amount of corporation tax on income for that business year pursuant to the provisions of Article 42-4, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the 1981 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 10, paragraph (1) of the Supplementary Provisions of the 1981 Amendment Act, or Article 42-4, paragraph (2) of the Act on Special Measures Concerning Taxation as amended by the 1981 Amendment Act, those amounts", the phrase "or Article 66-5 of the Act on Special Measures Concerning Taxation" in paragraph (6) of that Article is deemed to be replaced with "or Article 66-5 of the Act on Special Measures Concerning Taxation prior to the amendment by the Act Partially Amending the Act on Special Measures Concerning Taxation (Act No. 15 of 1979; hereinafter referred to as the "1979 Amendment Act"), which is deemed to remain in force pursuant to the provisions of Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", and the phrase "and Article 66-5 of the Act on Special Measures Concerning Taxation" is deemed to be replaced with "and Article 66-5 of the Act on Special Measures Concerning Taxation prior to the amendment by the 1979 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act".

②With regard to the application of the provisions of Article 42-3, Article 42-4, Articles 64 through 65, Article 65-7, Article 65-8 and Article 67-4 of the New Act in the case where the provisions of the preceding paragraph apply, the phrase "and the following Article" in Article 42-3, paragraph (1) of the New Act is deemed to be replaced with ", the following Article and Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "and the preceding Article" in Article 42-4, paragraph (1) of the New Act is deemed to be replaced with ", the preceding Article and Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "the amount equivalent to 20 percent of the amount of corporation tax" is deemed to be replaced with "the amount equivalent to 20 percent of the amount of corporation tax (or, if there is an amount to be deducted from the amount of corporation tax on income for that business year pursuant to the provisions of Article 66-5, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the 1979 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act, the amount remaining after deducting that amount)", the phrase "if there is an amount to be deducted, that amount" in paragraph (3) of that Article is deemed to be replaced with "if there is an amount to be deducted, or if there is an amount to be deducted from the amount of corporation tax on income for that business year pursuant to the provisions of Article 66-5, paragraph (1) or (2) of the Act on Special Measures Concerning Taxation prior to the amendment by the 1979 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act, those amounts", and the phrase "Article 52-3, paragraph (1)" in Article 64, paragraph (6) (including as applied mutatis mutandis pursuant to Article 64-2, paragraph (6) and Article 65, paragraph (6)), Article 65-7, paragraph (7) (including as applied mutatis mutandis pursuant to Article 65-8, paragraph (7)) and Article 67-4, paragraph (6) of the New Act is deemed to be replaced with "Article 52-3, paragraph (1) and Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act".

③With regard to the application of the provisions of Articles 42-3 and 42-4 of the Act on Special Measures Concerning Taxation as Amended in 1981 in the case where the provisions of paragraph (1) apply, the phrase "and paragraphs (2) and (3) of the following Article" in Article 42-3, paragraph (1) of the Act on Special Measures Concerning Taxation as Amended in 1981 is deemed to be replaced with "and paragraphs (2) and (3) of the following Article, and Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", the phrase "and the preceding Article" in Article 42-4, paragraph (2) of the Act on Special Measures Concerning Taxation as Amended in 1981 is deemed to be replaced with ", the preceding Article and Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act", and the phrase "if there is an amount to be deducted, that amount" in paragraph (3) of that Article is deemed to be replaced with "if there is an amount to be deducted, or if there is an amount to be deducted from the amount of corporation tax on income for that business year pursuant to the provisions of Article 66-5, paragraph (2) of the Act on Special Measures Concerning Taxation prior to the amendment by the 1979 Amendment Act, which is deemed to remain in force pursuant to the provisions of Article 21, paragraph (1) of the Supplementary Provisions of the 1979 Amendment Act, those amounts".

The provisions of Article 66-10, paragraph (1), item (iv) of the New Act apply to fixed assets prescribed in that item that a corporation acquires or manufactures on or after the effective date of the Act on Temporary Measures for Small and Medium Sized Enterprises in Production Areas.

①With regard to a claim for a refund of corporation tax under Article 81, paragraph (1) of the Corporation Tax Act, as read with the replacement of terms pursuant to the provisions of Article 68-2 of the New Act, relating to the amount of loss prescribed in Article 2, item (xx) of the Corporation Tax Act incurred in a business year, ending during the period from November 20, 1978 to the day on which one month has elapsed from the Effective Date, of a domestic corporation listed in Article 68-2, item (ii) of the New Act, notwithstanding the provisions of that paragraph, the claim for a refund may be made by the day on which four months have elapsed from the Effective Date.

②In the case referred to in the preceding paragraph, if the domestic corporation prescribed in that paragraph has already made a claim for a refund of corporation tax under Article 81, paragraph (1) of the Corporation Tax Act with regard to the amount of loss referred to in that paragraph, the provisions of the preceding paragraph may be applied by deeming that claim for a refund not to have been made.

③If a domestic corporation that falls under the provisions of the preceding paragraph and receives the application of the provisions of paragraph (1) has received a refund based on the claim for a refund prescribed in the preceding paragraph, the portion of the amount of that refund up to the amount of the refund based on the claim for a refund prescribed in paragraph (1) is deemed to be a partial payment of the refund based on the claim for a refund prescribed in that paragraph.

①The provisions of Article 77-2 of the New Act apply to registration and license tax on the registration of transfer or creation of ownership, a superficies right, a farming right or a right of lease of the land referred to in that Article, in the case where the agricultural production corporation referred to in that Article receives, on or after the Effective Date, the capital contribution prescribed in that Article and uses that land for its cultivation or livestock raising, and with regard to registration and license tax on these registrations for that land in the case where the agricultural production corporation received that capital contribution before the Effective Date and used that land for its cultivation or livestock raising, the provisions then in force continue to govern.

②The provisions of Article 78-2 of the New Act apply to registration and license tax on the registration of transfer or creation of ownership, a superficies right, a farming right or a right of lease through a capital contribution, in the case where the production forestry cooperative or agricultural production corporation referred to in that Article receives, on or after the Effective Date, the capital contribution prescribed in that Article, and with regard to registration and license tax on these registrations through that capital contribution in the case where the production forestry cooperative or agricultural production corporation received that capital contribution before the Effective Date, the provisions then in force continue to govern.

③The provisions of Article 78-3, paragraph (2) of the New Act apply to registration and license tax on the registration of transfer of ownership of land prescribed in that paragraph that a business cooperative, etc. prescribed in that paragraph acquires on or after the Effective Date, in the case where a small and medium sized enterprise prescribed in that paragraph that is a member or affiliated member of that business cooperative, etc. acquires that land from that business cooperative, etc., and with regard to registration and license tax on the registration of transfer of ownership of such land that the business cooperative, etc. acquired before the Effective Date, in the case where that small and medium sized enterprise acquires that land from that business cooperative, etc., the provisions then in force continue to govern.

④The provisions of Article 81, item (iii) of the New Act (limited to the part concerning the provisions of Article 8, paragraph (2) or (3) of the Act on Promotion of Modernization of Small and Medium Sized Enterprises) apply to registration and license tax on registration received for the matters listed in that item relating to an approval under the provisions of Article 8, paragraph (2) or (3) of the Act on Promotion of Modernization of Small and Medium Sized Enterprises that is given on or after the Effective Date, and with regard to registration and license tax on registration for those matters relating to such an approval given before the Effective Date, the provisions then in force continue to govern.

①With regard to commodity tax on passenger motor vehicles listed in Class 2, item (vii) of the Appended Table of the Commodity Tax Act (Act No. 48 of 1962) that were shipped from the manufacturing site where they were manufactured, or taken out of a bonded area, within the period prescribed in Article 88-4, paragraph (1) of the Former Act, and that fall under the provisions of that paragraph, the provisions then in force continue to govern.

②With regard to the application of penal provisions to acts committed before the enforcement of this Act and to acts committed after the enforcement of this Act with respect to commodity tax for which the provisions then in force are to continue to govern pursuant to the provisions of the preceding paragraph, the provisions then in force continue to govern.

②With regard to the amount of gasoline tax and local road tax on gasoline that was shipped from a gasoline manufacturing site before June 1, 1979 and that relates to the notification or approval under Article 14, paragraph (3) of the Gasoline Tax Act (including as applied mutatis mutandis pursuant to Article 15, paragraph (3) and Article 16-3, paragraph (3) of that Act and Article 90, paragraph (3) of the Act on Special Measures Concerning Taxation; the same applies hereinafter in this paragraph) (limited to gasoline for which the deadline relating to that notification or approval falls on or after that date), in the case where the documents prescribed in Article 14, paragraph (3) of the Gasoline Tax Act were not submitted by that deadline, the provisions of Article 89, paragraph (3) of the New Act apply.

③If, on June 1, 1979, there is a gasoline manufacturer or seller who possesses gasoline (excluding gasoline subject to the provisions of Article 16, paragraph (1) or Article 16-2, paragraph (1) of the Gasoline Tax Act) at a place other than a gasoline manufacturing site or a bonded area (excluding a place within the area of Okinawa Prefecture), and the quantity thereof (or, if the person possesses it at two or more places, the total quantity) is 5 kiloliters or more, then, with regard to that gasoline, that person, if not a gasoline manufacturer, is deemed to be a gasoline manufacturer and is deemed to have shipped that gasoline from the manufacturing site on that date, and gasoline tax of 9,100 yen and local road tax of 1,600 yen per kiloliter are imposed.

④In the case referred to in the preceding paragraph, the district director collects local road tax together with gasoline tax. In this case, the district director aggregates the amount of gasoline tax and the amount of local road tax on the gasoline at the storage places of the same person located within the area under the district director's jurisdiction, and collects the gasoline tax and local road tax of that aggregated amount in equal installments in each month from July to November 1979, with the last day of each such month as the due date for payment.

⑤With regard to the gasoline tax and local road tax under paragraph (3), the provisions of Article 7, paragraph (2), Article 9, paragraph (2), Article 10, paragraph (1), Article 12, paragraph (3) and Article 13, paragraph (1) of the Local Road Tax Act apply with the phrase "44/287" in those provisions deemed to be replaced with "16/107", and the phrase "243/287" with "91/107".

⑥A person prescribed in paragraph (3) must submit a return stating the storage places of the gasoline falling under the provisions of that paragraph, and the quantity possessed and the tax basis quantity (meaning the quantity obtained by deducting, from that quantity possessed, the quantity to be deducted pursuant to the provisions of Article 8, paragraph (1) of the Gasoline Tax Act) of that gasoline for each of those places, to the district director having jurisdiction over the place where the storage place is located, within one month from June 1, 1979.

⑦In the cases listed in the following items, if the gasoline manufacturer listed in the respective item has, as specified by Cabinet Order, received confirmation from the district director having jurisdiction over the place where the gasoline manufacturing site to which that gasoline was returned or into which it was brought is located, to the effect that the amount of gasoline tax and the amount of local road tax under paragraph (3) have been collected or are to be collected for that gasoline, those amounts of gasoline tax and local road tax are, in accordance with the provisions of Article 17 of the Gasoline Tax Act and Article 9 of the Local Road Tax Act, deducted from the amount of gasoline tax and the amount of local road tax relating to that person, together with the amount of gasoline tax and the amount of local road tax that the gasoline manufacturer has paid or is to pay for that gasoline (or, in the case falling under item (ii), the amount of gasoline tax and the amount of local road tax that have been paid or are to be paid upon the shipment from the other gasoline manufacturing site prescribed in that item, or that have been paid or are to be paid, or have been collected or are to be collected, upon the taking out of a bonded area), or are refunded to that person:

①With regard to the case where an individual has put industrial machinery, etc. prescribed in Article 3, paragraph (3) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation prior to the amendment by Article 27 of the Supplementary Provisions (referred to as the "1976 Amendment Act Before the Amendment" in the following paragraph), of which the individual made an acquisition, etc. before the Effective Date, into use for the individual's business, the provisions then in force continue to govern.

②With regard to the case where a corporation has put industrial machinery, etc. prescribed in Article 10, paragraph (5) of the Supplementary Provisions of the 1976 Amendment Act Before the Amendment, of which it made an acquisition, etc. before the Effective Date, into use for its business, the provisions then in force continue to govern.

①The provisions of Article 6, paragraphs (4) and (6) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation and the Act on Fund for Smooth Management of National Tax Revenue as amended by the provisions of Article 28 of the Supplementary Provisions (referred to as the "1977 Amendment Act as Amended" in the following paragraph) apply where an individual puts machinery or other equipment prescribed in paragraph (4) of that Article to use for the individual's business on or after the Effective Date, and with regard to cases where an individual put that machinery or other equipment to use for the individual's business before the Effective Date, the provisions then in force continue to govern.

②The provisions of Article 11, paragraphs (4) and (6) of the Supplementary Provisions of the 1977 Amendment Act as Amended apply where a corporation puts machinery or other equipment prescribed in paragraph (4) of that Article to use for its business on or after the Effective Date, and with regard to cases where a corporation put that machinery or other equipment to use for its business before the Effective Date, the provisions then in force continue to govern.

①The provisions of Article 5, paragraph (5) of the Supplementary Provisions of the Act Partially Amending the Act on Special Measures Concerning Taxation and the Act on Fund for Smooth Management of National Tax Revenue as amended by the provisions of Article 29 of the Supplementary Provisions (referred to as the "1978 Amendment Act as Amended" in the following paragraph) apply where an individual puts depreciable assets prescribed in paragraph (2) of that Article to use for the individual's business on or after the Effective Date, and with regard to cases where an individual put those depreciable assets to use for the individual's business before the Effective Date, the provisions then in force continue to govern.

②The provisions of Article 14, paragraph (5) of the Supplementary Provisions of the 1978 Amendment Act as Amended apply where a corporation puts depreciable assets prescribed in paragraphs (2) and (3) of that Article to use for its business on or after the Effective Date, and with regard to cases where a corporation put those depreciable assets to use for its business before the Effective Date, the provisions then in force continue to govern.