①In the case where a domestic corporation has effected a share exchange, etc. or share transfer, with itself as a wholly owned subsidiary corporation in a share exchange or similar act or a wholly owned subsidiary corporation in a share transfer (excluding a qualified share exchange, etc. and a qualified share transfer, and a share exchange and share transfer in the case where there was a full controlling interest between the domestic corporation and the wholly owning parent corporation in a share exchange involved in the share exchange or another wholly owned subsidiary corporation in a share transfer involved in the share transfer immediately prior to the share exchange or share transfer; hereinafter referred to as a "non-qualified share exchange, etc." in this paragraph), the amount of a valuation gain (meaning the difference between the value as of immediately prior to the non-qualified share exchange, etc. and the book value at that time, when the former exceeds the latter) or the amount of a valuation loss (meaning the difference between the value as of immediately prior to the non-qualified share exchange, etc. and the book value at that time, when the latter exceeds the former) arising from the assets evaluated by fair value that the domestic corporation holds as of immediately prior to the non-qualified share exchange, etc. (such assets mean fixed assets, land (including any right on land and excluding land that falls under the category of fixed assets), securities, monetary claims, and deferred assets other than those specified by Cabinet Order) is included in gross profits or deductible expenses, when calculating the amount of income for the business year containing the date of the non-qualified share exchange, etc.

②Necessary matters concerning the application of the provisions of the preceding paragraph are specified by Cabinet Order.

①When a domestic corporation has contracted for long-term large-scale construction (meaning construction work (including manufacturing work and the development of software; hereinafter the same applies in this Article), for which the period between the date of the start of construction and the due date of the delivery of the subject matter defined under the contract for the construction work is one year or more, which falls under the category of large-scale construction work specified by Cabinet Order, and which meets any other requirements specified by Cabinet Order; hereinafter the same applies in this Article), the portion of the amount of proceeds and the amount of expenses related to the contract for the long-term large-scale construction which is calculated by way of a percentage of the completion method specified by Cabinet Order as the amount of proceeds and the amount of expenses for each business year is included in gross profits and deductible expenses, when calculating the amount of income for each business year from the business year containing the date of the start of construction up to the previous business year of the business year containing the date of the delivery of the subject matter.

②In the case where a domestic corporation has contracted for construction work (limited to construction work for which the subject matter is not delivered within the business year containing the date of the start of construction (hereinafter referred to as the "business year of starting construction" in this paragraph) and excluding construction work falling under the category of long-term large-scale construction; hereinafter the same applies in this Article), when the amount of proceeds and the amount of expenses related to the contract for construction work have been settled by way of a percentage of the completion method specified by Cabinet Order in the final settlement of the accounts in each business year from the business year of starting construction up to the previous business year of the business year containing the date of the delivery of the subject matter, the amount of proceeds and the amount of expenses so settled are included in gross profits and deductible expenses, when calculating the amount of income for each of those business years; provided, however, that in the case where the amount of proceeds and the amount of expenses related to the contract for construction work were not settled by way of the percentage of the completion method in the final settlement of the accounts in any business year after the business year of starting construction, this does not apply to business years on or after the following business year of the business year pertaining to the settlement in which they were not so settled.

③Special provisions on the disposition of the amount of proceeds and the amount of expenses related to a contract for long-term large-scale construction or construction work, in the case where a qualified merger, qualified company split or qualified capital contribution in kind has been effected, and other necessary matters concerning the application of the provisions of the preceding two paragraphs are specified by Cabinet Order.

①In the case where a domestic corporation has conducted lease transactions, the amount of income for each business year of the domestic corporation that is the lessor or lessee of the assets, which are the object of the lease transactions (hereinafter referred to as "lease assets" in this paragraph), is calculated, by deeming that the lease assets were traded at the time of their delivery from the lessor to the lessee.

②In the case where a domestic corporation has traded assets under the conditions of a lease from a transferee to a transferor (limited to a lease falling under the category of lease transactions), when it is deemed that such a chain of transactions substantially cover the borrowing and lending of monies, in light of the type of assets, developments leading to the trade and lease, and any other circumstances, the amount of income for each business year of the domestic corporation that is the transferee or transferor is calculated, by deeming that the assets were not traded but monies was lent from the transferee to the transferor.

③Lease transactions as prescribed in the preceding two paragraphs mean the lease of assets (excluding the lease of land of which the ownership is not transferred and any other lease specified by Cabinet Order) that meets the requirements listed as follows:

④Matters necessary for the determination as to whether a domestic corporation is to bear the substantial expenses caused by the use of the assets set forth in item (ii) of the preceding paragraph, and any other necessary matters concerning the application of the provisions of the preceding three paragraphs are specified by Cabinet Order.

①In the case where a specified trust that issues beneficiary certificates as prescribed in Article 2, item (xxix), (c) (Definitions) has come to fall under the category of a trust subject to corporate taxation, the amount specified by Cabinet Order as the amount equivalent to the undistributed profit as of immediately prior to the time when it came to fall under such category is included in gross profits, when calculating the amount of income of a trust corporation under the trust subject to corporate taxation (meaning a trust corporation as prescribed in Article 4-3 (Application of This Act to Trust Corporations); hereinafter the same applies in this Article) for the business year containing the day on which it came to fall under such category.

②In the case where a trust subject to corporate taxation (limited to a trust listed in Article 2, item (xxix)-2, (b)) has ceased to fall under the category of trusts listed in (b) of that item because a beneficiary as prescribed in Article 12, paragraph (1) (Vesting of Assets and Liabilities in Trust Property and Profit and Expenses to Be Attributed to Trust Property) (such beneficiary includes a person who is deemed to be a beneficiary as prescribed in paragraph (1) of that Article pursuant to the provisions of paragraph (2) of that Article and excludes a beneficiary under liquidation proceedings) has come to exist for the trust subject to corporate taxation (excluding the case where the trust subject to corporate taxation falls under the category of trusts listed in (a) or (c) of that item), the amount of income of the trust corporation pertaining to the trust subject to corporate taxation for each business year is calculated by deeming that the trust corporation has had the beneficiary succeed to the assets and liabilities in the trust property at their book value as of immediately prior to the time when the trust ceased to fall under the category.

③In the case referred to in the preceding paragraph, when the beneficiary set forth in that paragraph is a domestic corporation, the amount of income for each business year of the domestic corporation that is the beneficiary is calculated by deeming that it has succeeded to the assets and liabilities set forth in that paragraph at the book value prescribed in that paragraph.

④When a trust corporation under a trust subject to corporate taxation has transferred the assets and liabilities related to the trust subject to corporate taxation, as a result of a change of trustees of the trust subject to corporate taxation, the amount of income of the trust corporation for each business year is calculated by deeming that the transferred assets and liabilities has been succeeded to by the trustee after the change at their book value as of immediately prior to the change.

⑤The value of the assets and liabilities that are to be succeeded to by the trustee after the change set forth in the preceding paragraph, pursuant to the provisions of the paragraph, and any other necessary matters concerning the calculation of the amount of income of a trust corporation or its beneficiaries for each business year are specified by Cabinet Order.

①In the case where a domestic corporation that is a public service corporation or a public interest corporation, etc. has come to fall under the category of an ordinary corporation or a cooperative, etc., the amount equivalent to the amount calculated, as specified by Cabinet Order, as the accumulated amount of income arising from a business other than its profit-making business (limited to that conducted by a public interest corporation, etc.; hereinafter the same applies in this paragraph and the following paragraph) prior to the day on which it came to fall under such category (hereinafter referred to as the "transition date" in this paragraph and paragraph (3)) (the amount is referred to as the "accumulated amount of income" in paragraph (3)) or to the amount calculated, as specified by Cabinet Order, as the accumulated amount of net operating loss arising from a business other than its profit-making business prior to the transition date (the amount is referred to as the "accumulated net operating loss" in paragraph (3)) is included in gross profits or deductible expenses, when calculating the amount of income of the domestic corporation for the business year containing the transition date.

②In the case where a qualified merger has been effected, with a public interest corporation, etc. as an acquired corporation and with a domestic corporation that is an ordinary corporation or a cooperative, etc. as an acquiring corporation, the amount equivalent to the amount calculated, as specified by Cabinet Order, as the accumulated amount of income arising from a business other than the acquired corporation's profit-making business prior to the qualified merger (referred to as the "accumulated amount of income prior to merger" in the following paragraph) or to the amount calculated, as specified by Cabinet Order, as the accumulated net operating loss arising from a business other than the profit-making business prior to the qualified merger (referred to as the "accumulated net operating loss prior to merger" in the following paragraph) is included in gross profits or deductible expenses, when calculating the amount of income of the domestic corporation for the business year containing the date of the qualified merger.

③With regard to the application of the provisions of the preceding two paragraphs in the case where a domestic corporation set forth in paragraph (1) is a corporation that has come to fall under the category of an ordinary corporation due to the cancellation of its public interest corporation authorization as prescribed in Article 29, paragraph (1) and paragraph (2) (Cancellation of Public Interest Corporation Authorization) of the Act on Authorization of Public Interest Incorporated Associations and Public Interest Incorporated Foundations (Act No. 49 of 2006), pursuant to the provisions of paragraph (1) or paragraph (2) of the Article, or a medical care corporation that has obtained the approval under Article 42-3, paragraph (1) (Implementation Plans) of the Medical Care Act (Act No. 205 of 1948) for an implementation plan prescribed in that paragraph, in the case where a domestic corporation set forth in the preceding paragraph is an acquiring corporation involved in a qualified merger as prescribed in the paragraph, wherein a public interest incorporated association or public interest incorporated foundation is an acquired corporation, or any other case falling under the case specified by Cabinet Order, the amount equivalent to the amount specified by Cabinet Order as the amount which is to be paid for the purpose of public interest or for the continuous implementation of operations related to the emergency medical care, etc. securing projects prescribed in paragraph (1) of that Article on or after the transition date or the date of the qualified merger is deducted from the accumulated amount of income or accumulated amount of income prior to merger or is added to the accumulated net operating loss or accumulated net operating loss prior to merger, as specified by Cabinet Order.

④The provisions of the preceding paragraph apply only in the case where a Final Return contains a detailed statement concerning the amount specified by Cabinet Order as prescribed in the paragraph and the calculation thereof, and is attached with documents as specified by Ministry of Finance Order.

⑤Even in the case where a tax return without entries for the matters or the attachment of documents set forth in the preceding paragraph has been filed, the district director of the tax office may apply the provisions of paragraph (3), when they find any unavoidable grounds for the person's failure to make entries of such statement or to attach such documents.

⑥Beyond what is provided for in the preceding two paragraphs, the disposition in the business year in which a domestic corporation has paid the amount specified by Cabinet Order as prescribed in paragraph (3), and other necessary matters concerning the application of the provisions of paragraphs (1) through (3) are specified by Cabinet Order.