①The provisions then in force continue to govern the inclusion in gross profits and in deductible expenses of amounts pertaining to instalment sales or similar transactions prescribed in Article 62, paragraph (1) of the Former Corporation Tax Act, or deferred payment sales or deferred payment contracts for work prescribed in Article 63, paragraph (1) of the Former Corporation Tax Act, of inventory or services or of assets or construction work for which the subject matter was delivered or provided in a business year of a corporation that started before the Effective Date.

②If a corporation that, in the business year immediately preceding the business year first starting on or after the Effective Date, accounted for all instalment sales or similar transactions of inventory or services prescribed in Article 62, paragraph (1) of the Former Corporation Tax Act that it made (hereinafter referred to as "instalment sales or similar transactions" in this paragraph) under the instalment basis method specified by Cabinet Order prescribed in paragraph (1) of that Article (hereinafter referred to as the "instalment basis method" in this paragraph) makes instalment sales or similar transactions of inventory or services in any business year starting during the period from the Effective Date to March 31, 2003, then, when calculating the amount of income for the business year in which it made those instalment sales or similar transactions of inventory or services (excluding those falling under long-term instalment sales or similar transactions prescribed in Article 62, paragraph (2) of the New Corporation Tax Act; hereinafter referred to as an "instalment sale under the transitional rules" in this Article) and for each subsequent business year, the amounts obtained by adding, to each of the amount of proceeds and the amount of expenses that would be included in gross profits or deductible expenses for each of those business years if the amount of proceeds and the amount of expenses pertaining to that instalment sale under the transitional rules were accounted for under the instalment basis method, the amount specified in whichever of the following items lists the business year in which the instalment sale under the transitional rules was made (or, if that business year is less than one year, the amount calculated by dividing that amount by 12 and multiplying the result by the number of months in that business year) (or, if that amount exceeds the amount remaining after deducting, from the amount of proceeds or the amount of expenses pertaining to the instalment sale under the transitional rules, an amount equivalent to the amounts already included in gross profits or deductible expenses pursuant to the provisions of this paragraph for that instalment sale under the transitional rules up to the business year immediately preceding that business year, the amount remaining after that deduction) are included in gross profits and deductible expenses, respectively:

③The number of months set forth in the preceding paragraph is calculated according to the calendar and a division of less than one month is counted as one month.

④The provisions of paragraph (2) apply only if a statement of the amounts, out of the amount of proceeds and the amount of expenses pertaining to the instalment sale under the transitional rules, that are included in gross profits and deductible expenses for the business year in which the instalment sale under the transitional rules was made (hereinafter referred to as the "business year of sale" in this paragraph) is attached to the Final Return (meaning a Final Return prescribed in Article 2, item (xxxi) of the New Corporation Tax Act; the same applies hereinafter in this paragraph and the following paragraph) for the business year of sale (or, if the business year to which the provisions of paragraph (2) apply is a business year after the business year of sale, only if a statement of the amounts included in gross profits and deductible expenses pursuant to the provisions of that paragraph is attached to the Final Return for each business year from the business year of sale through that business year).

⑤Even if a Final Return without the statement referred to in the preceding paragraph attached has been filed, the district director may apply the provisions of paragraph (2) on finding that there were unavoidable circumstances for the failure to attach it, but only if the statement referred to in that paragraph is submitted.

⑥With regard to the application of the provisions of the preceding two paragraphs in the case where the corporation referred to in paragraph (2) is subject to the provisions of Article 72, paragraph (1) of the New Corporation Tax Act (including as applied mutatis mutandis pursuant to Article 145, paragraph (1) of the New Corporation Tax Act), the phrase "the same applies hereinafter in this paragraph and the following paragraph)" in paragraph (4) is deemed to be replaced with "the same applies hereinafter in this paragraph and the following paragraph) (or, if an interim return (meaning an interim return prescribed in item (xxx) of that Article that states the matters listed in the items of Article 72, paragraph (1) of the New Corporation Tax Act; the same applies hereinafter in this paragraph and the following paragraph) is filed for that business year of sale, that interim return)", the phrase "the Final Return for each business year from the business year of sale through that business year" is deemed to be replaced with "the Final Return for each business year from the business year of sale through the business year immediately preceding that business year and the interim return for that business year", and the phrase "Final Return" in the preceding paragraph is deemed to be replaced with "interim return".

⑦Special provisions for the treatment of the amount of proceeds and the amount of expenses pertaining to an instalment sale under the transitional rules in the case where a qualified merger, a qualified company split prescribed in Article 2, item (xii)-11 of the 2001 New Corporation Tax Act, a qualified capital contribution in kind prescribed in item (xii)-14 of that Article or a qualified post-formation acquisition of assets prescribed in item (xii)-15 of that Article has been carried out, and other necessary matters concerning the application of the provisions of paragraph (2), are specified by Cabinet Order.