This Act comes into effect on August 1, 2002; provided, however, that the provisions of Article 3 amending the Act on Special Measures Concerning Taxation by adding 17 Sections to Chapter III (limited to the part pertaining to Article 68-72, paragraph (8)) come into effect on the date on which the Act on Facilitation of Reconstruction of Condominiums, etc. (Act No. 78 of 2002) comes into effect.

Except as otherwise provided for in these Supplementary Provisions, the provisions of the Corporation Tax Act as amended by the provisions of Article 1 (hereinafter referred to as the "New Corporation Tax Act"), the provisions of the Act on Measures to Reduce the Burden of Income Tax and Corporation Tax to Be Taken Promptly in Response to Changes in the Economy and Society, etc. as amended by the provisions of Article 2, the provisions of the Act on Special Measures Concerning Taxation as amended by the provisions of Article 3 (hereinafter referred to as the "New Act on Special Measures Concerning Taxation"), the provisions of the Act on Temporary Special Provisions of Acts Related to National Tax, in Relation to Victims, etc. of Hanshin-Awaji Earthquake as amended by the provisions of Article 4 (hereinafter referred to as the "New Special Provisions Law for Earthquake Victims"), and the provisions of Articles 7 and 24 of the Supplementary Provisions of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 24 of 1998) as amended by the provisions of Article 9 apply to corporation tax on income for business years of a corporation (including an association or foundation without juridical personality prescribed in Article 2, item (viii) of the New Corporation Tax Act; the same applies hereinafter) ending on or after March 31, 2003, corporation tax on consolidated income for consolidated business years of a consolidated corporation ending on or after that date, corporation tax on income for calculation periods of a corporation that is the trustee of a specified trust ending on or after that date, corporation tax on retirement pension funds for business years of a corporation ending on or after that date, and corporation tax on liquidation income resulting from the dissolution (excluding dissolution due to a merger; the same applies hereinafter in this Article) of a corporation on or after that date (including corporation tax on income for business years during liquidation of a corporation subject to corporation tax on liquidation income and corporation tax to be paid upon a partial distribution of residual assets; the same applies hereinafter in this Article), and with regard to corporation tax on income for business years of a corporation that ended before that date, corporation tax on income for calculation periods of a corporation that is the trustee of a specified trust that ended before that date, corporation tax on retirement pension funds for business years of a corporation that ended before that date, and corporation tax on liquidation income resulting from the dissolution of a corporation before that date, the provisions then in force continue to govern.

①The provisions of Article 64-2, paragraph (10) of the New Act on Special Measures Concerning Taxation (including as applied mutatis mutandis pursuant to Article 65, paragraph (3) of the New Act on Special Measures Concerning Taxation), Article 65-8, paragraph (10), Article 65-12, paragraph (11) and Article 65-14, paragraph (11) apply to the amount of special accounts prescribed in those provisions that a corporation holds at the end of the business year ending on or after the day on which six months have elapsed counting from the day following the Effective Date.

②In the case where a corporation has received the application of the provisions of Article 3, paragraph (1) of the Supplementary Provisions, if the corporation holds an asset subject to fair valuation, etc. (meaning an asset subject to fair valuation, etc. prescribed in Article 4-3, paragraph (9), item (i) of the New Corporation Tax Act; the same applies hereinafter in this paragraph) at the end of the business year preceding the business year that includes the end of the first consolidated parent corporation business year (meaning the first consolidated parent corporation business year prescribed in Article 15-2, paragraph (1) of the New Corporation Tax Act for which corporation tax on consolidated income for each consolidated business year is imposed; the same applies hereinafter in this paragraph) (or, if the date of commencement of that business year is before the date of commencement of that first consolidated parent corporation business year, at the end of that business year), or if a corporation that has come to have, in the first consolidated parent corporation business year, a wholly controlling relationship prescribed in Article 4-2 of the New Corporation Tax Act by that corporation with that corporation holds an asset subject to fair valuation, etc. at the end of the business year that includes the day on which it came to have that wholly controlling relationship, those provisions apply by deeming the business year immediately before the start of consolidation prescribed in Article 64-2, paragraph (10) of the New Act on Special Measures Concerning Taxation (including as applied mutatis mutandis pursuant to Article 65, paragraph (3) of the New Act on Special Measures Concerning Taxation), Article 65-8, paragraph (10), Article 65-12, paragraph (11) or Article 65-14, paragraph (11), or the business year immediately before joining consolidation prescribed in those provisions (referred to as the "business year immediately before the start of consolidation, etc." in the following paragraph), to be the business year that includes the end of the first consolidated parent corporation business year.

③For the business year immediately before the start of consolidation, etc. of a corporation that ends before December 31, 2006, the provisions of Article 64-2, paragraph (10) of the New Act on Special Measures Concerning Taxation (including as applied mutatis mutandis pursuant to Article 65, paragraph (3) of the New Act on Special Measures Concerning Taxation), Article 65-8, paragraph (10), Article 65-12, paragraph (11) or Article 65-14, paragraph (11) apply by deeming the day five years before prescribed in each item of Article 61-11, paragraph (1) or each item of Article 61-12, paragraph (1) of the New Corporation Tax Act to be January 1, 2002.

The provisions of Article 66-8, paragraphs (3) and (4) of the New Act on Special Measures Concerning Taxation apply in the case where a qualified merger, qualified company split, qualified capital contribution in kind or qualified post-formation acquisition of assets (hereinafter referred to as a "qualified merger, etc." in this Article) is carried out on or after the Effective Date, and with regard to the case where a qualified merger, etc. was carried out before the Effective Date, the provisions then in force continue to govern.

With regard to the application of the provisions of Article 68-15 of the New Act on Special Measures Concerning Taxation in the case where a consolidated parent corporation or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation has, in each business year of that consolidated parent corporation or each of its consolidated subsidiary corporations that commenced within one year before the date of commencement of each consolidated business year, a total amount of the portion of the maximum tax credit prescribed in Article 42-6, paragraph (2) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002) or the maximum lease tax credit prescribed in paragraph (3) of that Article that has not been fully deducted even after the deduction prescribed in paragraph (5) of that Article, in paragraph (5) of that Article, the phrase "Article 42-11, paragraph (2) or (3)" is deemed to be replaced with "Article 42-11, paragraph (2) or (3), or Article 42-6, paragraph (2) or (3) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002) (hereinafter referred to as the "2002 Former Act" in this paragraph and paragraph (10))", the phrase "paragraph (2) or (3) of that Article" is deemed to be replaced with "Article 42-11, paragraph (2) or (3), or Article 42-6, paragraph (2) or (3) of the 2002 Former Act", and the phrase "paragraph (4) of that Article" is deemed to be replaced with "Article 42-11, paragraph (4) or Article 42-6, paragraph (4) of the 2002 Former Act", and in paragraph (10) of that Article, the phrase "Article 42-11, paragraph (2) or (3)" is deemed to be replaced with "Article 42-11, paragraph (2) or (3), or Article 42-6, paragraph (2) or (3) of the 2002 Former Act", and the phrase "Article 42-11, paragraph (4)" is deemed to be replaced with "Article 42-11, paragraph (4) or Article 42-6, paragraph (4) of the 2002 Former Act".

With regard to the application of the provisions of Article 68-13 of the New Act on Special Measures Concerning Taxation in the case where a consolidated parent corporation or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation has, in each business year of that consolidated parent corporation or each of its consolidated subsidiary corporations that commenced within four years before the date of commencement of each consolidated business year, a total amount of the portion of the maximum tax credit prescribed in Article 42-9, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002) that has not been fully deducted even after the deduction prescribed in paragraph (3) of that Article, in paragraph (3) of that Article, the phrase "Article 42-9, paragraph (1)" is deemed to be replaced with "Article 42-9, paragraph (1) or Article 42-9, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002) (hereinafter referred to as the "2002 Former Act" in this paragraph and paragraph (6))", the phrase "paragraph (1) of that Article" is deemed to be replaced with "Article 42-9, paragraph (1) or Article 42-9, paragraph (1) of the 2002 Former Act", and the phrase "paragraph (2) of that Article" is deemed to be replaced with "Article 42-9, paragraph (2) or Article 42-9, paragraph (2) of the 2002 Former Act", and in paragraph (6) of that Article, the phrase "Article 42-9, paragraph (1)" is deemed to be replaced with "Article 42-9, paragraph (1) or Article 42-9, paragraph (1) of the 2002 Former Act", and the phrase "Article 42-9, paragraph (2)" is deemed to be replaced with "Article 42-9, paragraph (2) or Article 42-9, paragraph (2) of the 2002 Former Act".

①With regard to the application of the provisions of Article 68-27 of the New Act on Special Measures Concerning Taxation to industrial machinery, etc. prescribed in Article 45, paragraph (1) (limited to the part pertaining to item (i) of the table in that paragraph) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (10) of the Supplementary Provisions of that Act, that a consolidated parent corporation or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation acquires, or manufactures or constructs, within a district designated as an industrial development district in an underdeveloped area listed in the first column of item (i) of that table (limited to a district designated by December 15, 1966), within a period of 40 years from the date of that designation, in paragraph (1) of that Article, the phrase "period" is deemed to be replaced with "period (including a period specified by Cabinet Order)", the phrase "the first column of each item of the table in that paragraph" is deemed to be replaced with "the first column of each item of the table in that paragraph or the first column of item (i) of the table in Article 45, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (10) of the Supplementary Provisions of that Act (hereinafter referred to as the "Former Act on Special Measures Concerning Taxation" in this paragraph)", the phrase "the second column of the relevant item" is deemed to be replaced with "the second column of the relevant item or the second column of item (i) of that table", the phrase "the third column of the relevant item" is deemed to be replaced with "the third column of the relevant item or the third column of item (i) of that table", the phrase "(other items of that table" is deemed to be replaced with "(other items of the table in Article 45, paragraph (1) or item (i) of the table in Article 45, paragraph (1) of the Former Act on Special Measures Concerning Taxation", and the phrase "the fourth column of the relevant item" is deemed to be replaced with "the fourth column of the relevant item or the fourth column of item (i) of that table".

②With regard to the application of the provisions of Article 68-30 of the New Act on Special Measures Concerning Taxation to fishing vessels prescribed in Article 46, paragraph (1), item (i) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (13) of the Supplementary Provisions of that Act, in each consolidated business year that includes any day within the period from the date of the certification prescribed in that item until the day before the day on which five years have elapsed from the date of commencement of the business year that includes the date of that certification, of a corporation that is a member of a fishery cooperative, etc. referred to in that item that has received that certification, in paragraph (1) of that Article, the phrase "the cases listed" is deemed to be replaced with "the cases listed (including the case specified by Cabinet Order as the case where the consolidated parent corporation or its consolidated subsidiary corporation, at the end of the applicable business year, falls under the category of a small and medium sized fishery operator prescribed in Article 2, paragraph (1) of the Act on Special Measures for the Reconstruction and Improvement of Fisheries prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures for the Reconstruction and Improvement of Fisheries, etc. (Act No. 73 of 2002) (Act No. 43 of 1976; hereinafter referred to as the "Former Fishery Reconstruction Act" in this paragraph) who is a member of a fishery cooperative, etc. prescribed in Article 5, paragraph (1) of the Former Fishery Reconstruction Act (hereinafter referred to as a "fishery cooperative, etc." in this paragraph) that received, during the period from April 1, 1976 to March 31, 2002, the certification under that paragraph pertaining to a small and medium sized fishery structural improvement plan prescribed in that paragraph (limited to a plan established for the business specified by Cabinet Order for each category specified by Cabinet Order) (where the fishery cooperative, etc. is a corporation whose members are two or more fishery cooperatives, etc., a member of a member directly or indirectly constituting the consolidated parent corporation or its consolidated subsidiary corporation, and limited to those among such persons specified by Cabinet Order as persons implementing that small and medium sized fishery structural improvement plan), and mainly operates, in that applicable business year, a business that belongs to a specified type of industry prescribed in Article 4, paragraph (1) of the Former Fishery Reconstruction Act and pertains to that small and medium sized fishery structural improvement plan)", the phrase "depreciable assets" is deemed to be replaced with "depreciable assets (including fishing vessels (where the consolidated parent corporation or its consolidated subsidiary corporation falls under the category of a member of a fishery cooperative, etc. that, before the certification pertaining to that small and medium sized fishery structural improvement plan, received certification pertaining to another small and medium sized fishery structural improvement plan established for business concerning the expansion of the scale of management or joint operation of production processes prescribed in Article 5, paragraph (1) of the Former Fishery Reconstruction Act (hereinafter referred to as "business for joint operation, etc." in this paragraph) (where the fishery cooperative, etc. is a corporation whose members are two or more fishery cooperatives, etc., a member of a member directly or indirectly constituting that corporation), or of a person specified by Cabinet Order as being equivalent thereto, limited to those of the fishing vessels specified by Cabinet Order as fishing vessels that significantly contribute to the rationalization of fuel use that were acquired or built on or after the date of certification pertaining to a new small and medium sized fishery structural improvement plan; hereinafter referred to as "fishing vessels" in this paragraph and the following paragraph))", the phrase "27 percent" is deemed to be replaced with "27 percent (or 16 percent if the assets are fishing vessels)", and in paragraph (2) of that Article, the phrase "the approval prescribed" is deemed to be replaced with "the approval prescribed (or, where the assets for which the application of that paragraph is sought are fishing vessels, the certification prescribed in that paragraph)".

③With regard to the application of the provisions of Article 68-32, paragraph (1) of the New Act on Special Measures Concerning Taxation (limited to the part pertaining to item (iii)) to machinery and equipment for forestry prescribed in Article 46-3, paragraph (1), item (iii) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (15) of the Supplementary Provisions of that Act, in each consolidated business year that includes any day within the period from the date of the certification until the day before the day on which five years have elapsed from the date of commencement of the business year that includes the date of that certification, of a corporation referred to in that item that received, before the date on which that Act came into effect (April 1, 2002), the certification prescribed in that item for a joint improvement plan prescribed in that item, the phrase "or 12 percent if the assets are those specified in item (ii) or (iii)" in paragraph (1) of that Article is deemed to be replaced with ", 12 percent if the assets are those specified in item (ii), and 14 percent if the assets are those specified in item (iii)."

④With regard to the application of the provisions of Article 68-34 of the New Act on Special Measures Concerning Taxation (limited to the part pertaining to paragraph (1)) to good-quality rental housing in a consolidated business year that includes any day within five years after the date of commencement of use prescribed in Article 47, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (17) of the Supplementary Provisions of that Act, of a corporation that acquired or newly constructed good-quality rental housing prescribed in that paragraph before the date on which that Act came into effect (April 1, 2002), or in a consolidated business year that includes any day within the period prescribed in paragraph (2) of that Article of a consolidated parent corporation or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation that has received a transfer of good-quality rental housing prescribed in that paragraph through a qualified merger, qualified company split, qualified capital contribution in kind or qualified post-formation acquisition of assets referred to in that paragraph, in paragraph (1) of that Article, the phrase "30 percent" is deemed to be replaced with "32 percent" and the phrase "40 percent" is deemed to be replaced with "44 percent", in item (ii) of that paragraph, the phrase "Article 47, paragraph (1), item (ii)" is deemed to be replaced with "Article 47, paragraph (1), item (ii) or Article 47, paragraph (1), item (ii) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (17) of the Supplementary Provisions of that Act (referred to as the "Former Act on Special Measures Concerning Taxation" in the following paragraph)", and in paragraph (2) of that Article, the phrases "Article 47, paragraph (1)" and "paragraph (1) of that Article" are deemed to be replaced with "Article 47, paragraph (1) or Article 47, paragraph (1) of the Former Act on Special Measures Concerning Taxation".

⑤With regard to the application of the provisions of Article 68-35 of the New Act on Special Measures Concerning Taxation to specified redevelopment buildings, etc. in a consolidated business year that includes any day within five years after the date of commencement of use prescribed in Article 47-2, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (19) of the Supplementary Provisions of that Act, of a corporation that acquired or newly constructed specified redevelopment buildings, etc. prescribed in that paragraph before the date on which that Act came into effect (April 1, 2002), or in a consolidated business year that includes any day within the period prescribed in paragraph (2) of that Article of a consolidated parent corporation or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation that has received a transfer of specified redevelopment buildings, etc. prescribed in that paragraph through a qualified merger, etc. prescribed in that paragraph, in paragraph (1) of that Article, the phrase "10 percent" is deemed to be replaced with "12 percent", and in paragraph (2) of that Article, the phrase "Article 47-2, paragraph (1)" is deemed to be replaced with "Article 47-2, paragraph (1) or Article 47-2, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (19) of the Supplementary Provisions of that Act (hereinafter referred to as the "Former Act on Special Measures Concerning Taxation" in this paragraph)", and the phrase "paragraph (1) of that Article" is deemed to be replaced with "Article 47-2, paragraph (1) or Article 47-2, paragraph (1) of the Former Act on Special Measures Concerning Taxation".

⑥With regard to the application of the provisions of Article 68-36 of the New Act on Special Measures Concerning Taxation to warehouse buildings, etc. in a consolidated business year that includes any day within five years after the date of commencement of use prescribed in Article 48, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (21) of the Supplementary Provisions of that Act, of a corporation that acquired or constructed warehouse buildings, etc. prescribed in that paragraph before the date on which that Act came into effect (April 1, 2002), or in a consolidated business year that includes any day within the period prescribed in paragraph (2) of that Article of a consolidated parent corporation or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation that has received a transfer of warehouse buildings, etc. prescribed in that paragraph through a qualified merger, etc. prescribed in that paragraph, in paragraph (1) of that Article, the phrase "12 percent" is deemed to be replaced with "16 percent", and in paragraph (2) of that Article, the phrase "Article 48, paragraph (1)" is deemed to be replaced with "Article 48, paragraph (1) or Article 48, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002), which remains in force pursuant to the provisions of Article 23, paragraph (21) of the Supplementary Provisions of that Act (hereinafter referred to as the "Former Act on Special Measures Concerning Taxation" in this paragraph)", and the phrase "paragraph (1) of that Article" is deemed to be replaced with "Article 48, paragraph (1) or Article 48, paragraph (1) of the Former Act on Special Measures Concerning Taxation".

①If a consolidated parent corporation, or a consolidated subsidiary corporation having a consolidated full controlling interest with that consolidated parent corporation, whose principal business is the finance and insurance business has, in the business year that includes the day before the date of commencement of the first consolidated business year prescribed in Article 15-2, paragraph (1) of the New Corporation Tax Act of the consolidated parent corporation or its consolidated subsidiary corporation, an amount of the reserve for losses on overseas investment, etc. that was included in deductible expenses in calculating the amount of income pursuant to the provisions of Article 55-2, paragraph (1) of the Act on Special Measures Concerning Taxation prior to the amendment by the provisions of Article 1 of the Act Partially Amending the Act on Special Measures Concerning Taxation, etc. (Act No. 15 of 2002; hereinafter referred to as the "2002 Amendment Act" in this Article) (hereinafter referred to as the "Former Act on Special Measures Concerning Taxation" in this Article), which remains in force pursuant to the provisions of Article 24, paragraph (1) of the Supplementary Provisions of the 2002 Amendment Act (excluding an amount succeeded to by a successor corporation in a company split through a qualified company split by split-off), that amount of the reserve for losses on overseas investment, etc. is included in gross profit in calculating the amount of consolidated income for that consolidated business year.

②If a merging corporation or a successor corporation in a company split that has succeeded to an amount of the reserve for losses on overseas investment, etc. pursuant to the provisions of Article 55-2, paragraph (7) of the Former Act on Special Measures Concerning Taxation, which remains in force pursuant to the provisions of Article 24, paragraph (1) of the Supplementary Provisions of the 2002 Amendment Act, is a consolidated parent corporation or its consolidated subsidiary corporation, the amount of the reserve for losses on overseas investment, etc. succeeded to by that merging corporation or successor corporation in a company split is included in gross profit in calculating the amount of consolidated income for the consolidated business year that includes the date of the qualified merger or qualified company split by split-off of that merging corporation or successor corporation in a company split.

③If an investment and development company prescribed in Article 55-4, paragraph (1) of the Former Act on Special Measures Concerning Taxation, which remains in force pursuant to the provisions of Article 24, paragraph (2) of the Supplementary Provisions of the 2002 Amendment Act, that is a consolidated parent corporation holds, at the end of the business year that includes the day before the date of commencement of the first consolidated business year prescribed in Article 15-2, paragraph (1) of the New Corporation Tax Act, an amount of the reserve for losses on investments in start-up small and medium sized enterprises (or, if there is any amount that has been or is to be included in gross profit by that time pursuant to the provisions of paragraph (3) of that Article, or any amount that has been included in gross profit pursuant to the provisions of Article 55, paragraph (3) of the Former Act on Special Measures Concerning Taxation as applied mutatis mutandis pursuant to paragraph (2) of that Article, the amount remaining after deducting those amounts), and if, at the end of each consolidated business year on or after that first consolidated business year, the amount of the reserve for losses on investments in start-up small and medium sized enterprises pertaining to a specified company prescribed in Article 55-4, paragraph (1) of the Former Act on Special Measures Concerning Taxation (referred to as a "specified company" in the following paragraph and paragraph (6)) carried over from the previous consolidated business year (or, if the business year of that investment and development company that includes the day before the date of commencement of each such consolidated business year does not fall under a consolidated business year, the business year that includes that day; hereinafter referred to as the "previous consolidated business year, etc." in this paragraph) (or, if there is any amount that has been or is to be included in gross profit pursuant to the provisions of the following paragraph by the end of each such consolidated business year (including any amount included in gross profit pursuant to the provisions of paragraph (3) of that Article) or any amount that has been included in gross profit pursuant to the provisions of this paragraph by the end of the previous consolidated business year, etc. (including any amount included in gross profit pursuant to the provisions of Article 55, paragraph (3) of the Former Act on Special Measures Concerning Taxation as applied mutatis mutandis pursuant to paragraph (2) of that Article), the amount remaining after deducting those amounts; the same applies in the following paragraph and paragraph (6)) includes an amount for which five years have elapsed from the day following the end of the business year in which it was reserved (hereinafter referred to as the "reserve amount past the deferral period" in this paragraph), then, with respect to that reserve amount past the deferral period, for each amount classified by the business year in which it was reserved, an amount equivalent to the amount calculated by multiplying the amount reserved as that reserve for losses on investments in start-up small and medium sized enterprises that was included in deductible expenses pursuant to the provisions of Article 55-4, paragraph (1) of the Former Act on Special Measures Concerning Taxation in calculating the amount of income for the business year in which that classified amount was reserved by the number of months in each such consolidated business year and dividing the result by 60 (or, if the amount so calculated exceeds that classified amount, that classified amount) is included in gross profit in calculating the amount of consolidated income for each such consolidated business year.

④If the investment and development company prescribed in the preceding paragraph comes to fall under any of the cases listed in the following items, an amount equivalent to the amount specified in the relevant item is included in gross profit in calculating the amount of consolidated income for the consolidated business year that includes the day on which it comes to fall under that case. In this case, in the case referred to in item (i), (iii) or (v), of the amounts of the reserve for losses on investments in start-up small and medium sized enterprises prescribed in those items classified by the business year in which they were reserved, the amounts are to be included in gross profit in order starting from the one reserved in the earliest business year.

⑤The number of months referred to in paragraph (3) is calculated in accordance with the calendar, and any fraction of less than one month is counted as one month.

⑥Beyond what is provided for in the preceding paragraph, the treatment of the amount of the reserve for losses on investments in start-up small and medium sized enterprises in the case where a specified company has ceased to exist due to a merger, and other necessary matters concerning the application of the provisions of paragraphs (3) and (4) are specified by Cabinet Order.

⑦The provisions of Article 68-58 of the New Act on Special Measures Concerning Taxation apply to fixed assets listed in the items of paragraph (1) of that Article that are provided for business use in each consolidated business year of a corporation ending on or after March 31, 2003 (excluding fixed assets for which there is an amount of the allowance account for special repairs prescribed in Article 7, paragraph (1) of the Supplementary Provisions of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 24 of 1998) pertaining to those fixed assets).

With regard to the application of the provisions of Articles 68-72, 68-73, 68-75, 68-76, 68-78 and 68-80 of the New Act on Special Measures Concerning Taxation during the period from the Effective Date until the day before the date on which the Act on Facilitation of Reconstruction of Condominiums, etc. comes into effect, in Article 68-72, paragraph (7) of the New Act on Special Measures Concerning Taxation, the phrase "Article 65, paragraph (7)" is deemed to be replaced with "Article 65, paragraph (5)"; in paragraph (10) of that Article, the phrase "Article 65, paragraph (1), (3) or (5)" is deemed to be replaced with "Article 65, paragraph (1), (3) or (6)"; in paragraph (11) of that Article, the phrase "the calculation of the book value immediately before the transfer prescribed in paragraph (1) of the assets transferred through the rights conversion prescribed in Article 65, paragraph (1), item (vi) in the case where, at the time of that rights conversion, there is a difference between the value of those assets (limited to the portion pertaining to the site use rights prescribed in that item) and the value of the site use rights pertaining to the post-reconstruction condominium prescribed in that item, that paragraph" is deemed to be replaced with "paragraph (1)", and the phrase ", paragraph (7) and paragraph (8)" is deemed to be replaced with "and paragraph (7)"; in Article 68-73, paragraph (7) of the New Act on Special Measures Concerning Taxation, the phrase "including the provisions of paragraph (5)" is deemed to be replaced with "including the provisions of paragraph (6)"; in Article 68-75, paragraphs (2) and (3) of the New Act on Special Measures Concerning Taxation, the phrase ", items (xvii) through (xx) or item (xxiii)" is deemed to be replaced with "or items (xvii) through (xx)"; in Article 68-76, paragraph (1) of the New Act on Special Measures Concerning Taxation, the phrase "item (xxvi)" is deemed to be replaced with "item (xxv)"; in Article 68-78, paragraph (15), item (i), (a) of the New Act on Special Measures Concerning Taxation, the phrase "and items (iv) through (vi)" is deemed to be replaced with ", items (iv) and (v)", and the phrase "Article 68-72, paragraph (7) or (8)" is deemed to be replaced with "Article 68-72, paragraph (7)"; and in Article 68-80 of the New Act on Special Measures Concerning Taxation, the phrase "item (vi)" is deemed to be replaced with "item (v)".

The provisions of Article 68-92, paragraphs (3) and (4) of the New Act on Special Measures Concerning Taxation apply in the case where a qualified merger, etc. (meaning a qualified merger, etc. prescribed in Article 25 of the Supplementary Provisions; the same applies hereinafter in this Article) is carried out on or after the Effective Date, and in the case where a qualified merger, etc. was carried out before the Effective Date, the same rules as those under Article 66-8, paragraph (1) of the Former Act on Special Measures Concerning Taxation apply.

Beyond what is provided for in Article 2 of the Supplementary Provisions through the preceding Article, transitional measures necessary in connection with the enforcement of the provisions of this Act are specified by Cabinet Order.