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).