This Act comes into effect on April 1, 1998.

Except as otherwise provided 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") apply to corporation tax on income for a business year 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) starting on or after the date on which this Act comes into effect (hereinafter referred to as the "Effective Date") and to corporation tax on liquidation income from a dissolution or merger on or after the Effective Date (including corporation tax pertaining to income for a business year in liquidation of a corporation on which corporation tax on liquidation income is imposed and corporation tax to be paid upon a partial distribution of residual assets; the same applies hereinafter in this Article), and the provisions then in force continue to govern corporation tax on income for a business year of a corporation that started before the Effective Date and corporation tax on liquidation income from a dissolution or merger before the Effective Date.

The provisions of Article 38, paragraph (2) of the New Corporation Tax Act (limited to the part pertaining to item (v)) apply to the things listed in that item that are imposed on a corporation on or after the Effective Date.

The provisions of Article 51 of the New Corporation Tax Act apply to a contribution of assets other than monies made by a corporation on or after the Effective Date, and the provisions then in force continue to govern a contribution of assets other than monies made by a corporation before the Effective Date.

If a corporation (limited to an ordinary corporation prescribed in Article 2, item (ix) of the Corporation Tax Act as amended by the provisions of Article 1 of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 6 of 2001) (hereinafter referred to as the "2001 New Corporation Tax Act") whose amount of capital or amount of capital contributions as of the end of each business year exceeds 100 million yen, and a mutual company prescribed in the Insurance Business Act (Act No. 105 of 1995) and any other entity specified by Cabinet Order as being equivalent thereto) is subject to the provisions of Article 52, paragraph (2) of the 2001 New Corporation Tax Act in each business year starting during the period from the Effective Date to March 31, 2003, it may, notwithstanding the provisions of that paragraph, treat the amount calculated by multiplying the sum of the book values of the collectively assessed monetary claims prescribed in that paragraph as of the end of that business year (or, for monetary claims specified by Cabinet Order, the balance remaining after deducting the amount specified by Cabinet Order) by the ratio specified by Cabinet Order as the amount calculated in the manner specified by Cabinet Order prescribed in that paragraph.

①With regard to the calculation of the amount of income for each business year of a corporation starting during the period from the Effective Date to March 31, 2003, the provisions of Article 54, paragraphs (1), (3) and (4) of the Corporation Tax Act prior to the amendment by the provisions of Article 1 (hereinafter referred to as the "Former Corporation Tax Act") (including as applied pursuant to Article 142 of the Former Corporation Tax Act; the same applies hereinafter in this Article) remain in force. In this case, the phrase "bonuses prescribed in paragraph (4) of that Article that are paid to officers (" in Article 54, paragraph (1) of the Former Corporation Tax Act is deemed to be replaced with "bonuses prescribed in paragraph (4) of that Article that are paid to officers (hereinafter referred to as 'employees, etc.' in this paragraph) (excluding those paid to employees, etc. who have come to engage in the business of the acquiring corporation or of the succeeding corporation in a company split prescribed in item (xii)-3 of that Article as a result of a merger that does not fall under a qualified merger prescribed in Article 2, item (xii)-8 (Definitions) of the Corporation Tax Act as amended by the provisions of Article 1 of the Act Partially Amending the Corporation Tax Act, etc. (Act No. 6 of 2001) or a company split by split-off prescribed in item (xii)-9 of that Article that does not fall under a Qualified Company Split by Split-Off prescribed in item (xii)-12 of that Article;", and the phrase "calculated amount" is deemed to be replaced with "amount equivalent to five-sixths of the calculated amount" for a business year starting during the period from the Effective Date to March 31, 1999, with "amount equivalent to four-sixths of the calculated amount" for a business year starting during the period from April 1, 1999 to March 31, 2000, with "amount equivalent to three-sixths of the calculated amount" for a business year starting during the period from April 1, 2000 to March 31, 2001, with "amount equivalent to two-sixths of the calculated amount" for a business year starting during the period from April 1, 2001 to March 31, 2002, and with "amount equivalent to one-sixth of the calculated amount" for a business year starting during the period from April 1, 2002 to March 31, 2003.

②If an employee, etc. of a corporation (meaning an employee, etc. prescribed in Article 54, paragraph (1) of the Former Corporation Tax Act as it remains in force pursuant to the provisions of the preceding paragraph and is applied with the replacement of terms; the same applies hereinafter in this paragraph) has, as a result of a qualified merger, etc. (meaning a qualified merger prescribed in Article 2, item (xii)-8 of the 2001 New Corporation Tax Act (hereinafter referred to as a "qualified merger") or a qualified company split by split-off prescribed in item (xii)-12 of that Article (hereinafter referred to as a "Qualified Company Split by Split-Off"); the same applies hereinafter in this paragraph and paragraph (4)), come to engage in the business of an acquiring corporation, etc. (meaning an acquiring corporation or a succeeding corporation in a company split prescribed in item (xii)-3 of that Article (hereinafter referred to as a "succeeding corporation in a company split"); the same applies hereinafter in this paragraph and paragraph (4)), the amount of the reserve for bonuses specified in each of the following items in accordance with the category of qualified merger, etc. listed in that item is to be succeeded to by the acquiring corporation, etc. involved in that qualified merger, etc.:

③The amount of the reserve for bonuses that was included in deductible expenses pursuant to the provisions of Article 54, paragraph (1) of the Former Corporation Tax Act, when calculating the amount of income for each business year (excluding the amount succeeded to by a succeeding corporation in a company split involved in a qualified company split by split-off pursuant to the provisions of the preceding paragraph), is included in gross profits, when calculating the amount of income for the following business year of the business year.

④The amount of the reserve for bonuses succeeded to by an acquiring corporation, etc. pursuant to the provisions of paragraph (2) is included in gross profits, when calculating the amount of income for the business year containing the date of the qualified merger, etc. of the acquiring corporation, etc.

⑤Necessary matters concerning the application of the provisions of the preceding three paragraphs are specified by Cabinet Order.