①In the case where a specified family company that is a domestic corporation (meaning a controlled company which is judged to be a controlled company, even after excluding shareholders, etc. that are corporations not falling under the category of a controlled company out of its shareholders, etc. who are used as the basis for the judgment as to whether the company is a controlled company (for a company whose amount of stated capital or amount of capital contributions is 100 million yen or less, limited to a company listed in items (ii) through (v) of paragraph (5) of the preceding Article and a large group tax sharing corporation prescribed in paragraph (6) of that Article), and excluding a company in liquidation; hereinafter the same applies in this Article) holds retained income for each business year that exceeds the allowance for retained income, the amount of corporation tax imposed on the specified family company on its income for each business year is to be the amount obtained by categorizing the excess amount of retained income into the amounts listed in the following items and multiplying the respective amounts by the rates specified in the relevant items, and then adding the sum of such amounts to the amount of corporation tax calculated pursuant to the provisions of paragraphs (1), (2) and (6) of the preceding Article and Article 69, paragraph (19) (Foreign Tax Credit) (including as applied mutatis mutandis pursuant to paragraph (23) of that Article; the same applies in paragraph (3)), notwithstanding these provisions:

②A controlled company as prescribed in the preceding paragraph means a company (including an investment corporation; hereinafter the same applies in this paragraph and paragraph (8)) in the case where one of its shareholders, etc. (excluding the shares that the company holds in itself and the capital contributions made thereby) or individuals and corporations with a special relationship therewith as specified by Cabinet Order hold more than 50 percent of the total number or total amount of the company's issued shares or capital contributions (excluding the shares that the company holds in itself and the capital contributions made thereby) or in any other case as specified by Cabinet Order.

③Retained income as prescribed in paragraph (1) means the amount obtained by deducting, from the amount retained out of the amount of income, etc. (meaning the amount obtained by subtracting the amount listed in item (vii) from the sum of the amounts listed in items (i) through (vi); the same applies in paragraph (5)), the sum of the amount obtained by adding together the amount of corporation tax calculated pursuant to the provisions of paragraphs (1), (2) and (6) of the preceding Article and Article 69, paragraph (19) with regard to the amount of income for the business year and the amount of local corporation tax calculated pursuant to the provisions of Article 10 (Tax Rate) and Article 12, paragraph (9) (Foreign Tax Credit) (including as applied mutatis mutandis pursuant to paragraph (13) of that Article) of the Local Corporation Tax Act with regard to the taxable corporation tax amount for the business year prescribed in Article 9, paragraph (2) (Tax Base) of that Act (limited to that pertaining to the base corporation tax amount specified in Article 6, paragraph (1), item (i) (Base Corporation Tax Amount, etc.) of that Act) (where there is any amount to be credited under the provisions of the following Article through Article 70 (Tax Credit) and Article 12, paragraphs (1) and (8) (including as applied mutatis mutandis pursuant to paragraph (13) of that Article) and Article 13 (Credit of the Local Corporation Tax Amount upon Reassessment of an Excessive Return Based on Fictitious Accounting) of that Act, the amount that remains after deducting that amount) and the amount calculated, as specified by Cabinet Order, as the amount of prefectural inhabitants' tax and municipal inhabitants' tax (including Tokyo inhabitants' tax) under the provisions of the Local Tax Act that are related to the amount of corporation tax.

④With regard to the calculation of the amount that a specified family company has retained as prescribed in the preceding paragraph, the amount equivalent to the amount of retained earnings that is reduced by a dividend of surplus, dividend of profits or distribution of monies listed in the following items made by the specified family company (limited to one for which the date of the resolution falls within the period from the day following the last day of the business year containing the day specified in the relevant item (hereinafter referred to as the "base date, etc." in this paragraph) to the date of the final settlement of the accounts for the business year containing the base date, etc. (excluding, in the case where the specified family company is a group tax sharing corporation, one specified by Cabinet Order as a dividend of surplus or dividend of profits to another group tax sharing corporation); hereinafter referred to as a "year-end dividend, etc." in this paragraph) (in the case where the year-end dividend, etc. is made with assets other than monies, the amount equivalent to the amount of retained earnings that would be reduced by the year-end dividend, etc. if the value of the assets were the book value of the assets as of the end of the business year containing the base date, etc. (where the assets were acquired after the last day of the business year containing the base date, etc., the acquisition cost thereof)) is to be deducted from the amount retained as prescribed in the preceding paragraph for the business year containing the base date, etc., and added to the amount retained as prescribed in that paragraph for the business year containing the day on which the year-end dividend, etc. becomes effective (where no day on which it becomes effective has been specified, the day on which the year-end dividend, etc. is made).

⑤The allowance for retained income as prescribed in paragraph (1) is the largest amount out of those listed as follows:

⑥With regard to the application of the provisions of paragraph (1) and the preceding paragraph to a specified family company whose business year is less than one year, the term "30 million yen per annum" in paragraph (1) is deemed to be replaced with "amount calculated by dividing 30 million yen by 12 and then multiplying the result by the number of months of the business year;" the term "100 million yen per annum" in the paragraph is deemed to be replaced with "amount calculated by dividing 100 million yen by 12 and then multiplying the result by the number of months of the business year;" and the term "20 million yen per annum" in the preceding paragraph is deemed to be replaced with "amount calculated by dividing 20 million yen by 12 and then multiplying the result by the number of months of the business year."

⑦The number of months set forth in the preceding paragraph is calculated according to the calendar and a division less than one month is to be counted as one month.

⑧In the case referred to in paragraph (1), the determination as to whether the company falls under the category of a specified family company set forth in the paragraph is based on its circumstances as of the end of the company's relevant business year.

⑨The adjustment of the retained amount prescribed in paragraph (3), and other necessary matters concerning the application of the provisions of paragraphs (1) through (5) are specified by Cabinet Order.