①Where there is an internal dealing, between a Resident's foreign office or similar establishment and a place of business or similar place, that corresponds to the acquisition or transfer by that foreign office or similar establishment of an asset (limited to an asset that is to generate foreign source income listed in Article 95, paragraph (4), item (iii) or (v) (Foreign Tax Credit) of the Act; the same applies hereinafter in this Article), the amount of income pertaining to income attributable to a foreign office or similar establishment of that Resident for each year is calculated on the basis that that internal dealing was carried out at an amount equivalent to the value of that asset immediately before the internal dealing.

②The amount equivalent to the value immediately before prescribed in the preceding paragraph is, depending on which of the internal dealings listed in the following items the internal dealing between the Resident's foreign office or similar establishment and place of business or similar place falls under, the amount provided for in the relevant item:

③Where the provisions of paragraph (1) apply, the acquisition price at that foreign office or similar establishment of the asset pertaining to an internal dealing between a Resident's foreign office or similar establishment and a place of business or similar place (limited to an internal dealing that corresponds to the acquisition of an asset by that foreign office or similar establishment; the same applies hereinafter in this paragraph) is to be the amount provided for in item (i) of the preceding paragraph (or, if there are expenses required for the acquisition by that internal dealing, the amount to which the amount of those expenses is added).

①The amount of income pertaining to the foreign source income listed in Article 221-2, item (ii) (Amount of Foreign-Source Income) is to be the amount equivalent to the sum of the gross income, the amount of retirement income and the amount of timber income for that year that would be the tax base if income tax for each year were imposed only on income pertaining to the foreign source income listed in that item.

②Where, among the amounts included in necessary expenses in calculating a Resident's amount of real property income, amount of business income or amount of miscellaneous income for that year (excluding, from the amount of business income and the amount of miscellaneous income, those pertaining to the felling of trees in forested land or the transfer of forested land) there is an amount of selling expenses, general administrative expenses or other expenses prescribed in Article 37, paragraph (1) (Necessary Expenses) of the Act that arose in connection with both the business generating income listed in Article 221-2, item (ii) and other business (hereinafter in this paragraph and the following paragraph referred to as the "amount of common expenses"), that amount of common expenses is to be allocated as necessary expenses in calculating the amount of income pertaining to the foreign source income listed in that item, on the basis of whichever of revenue pertaining to those businesses, the value of assets, the number of employees or other criteria is found to be reasonable in light of the content of those businesses and the nature of the expenses.

③A Resident who has made the allocation of the amount of common expenses pursuant to the preceding paragraph must prepare documents specified by Ministry of Finance Order, such as a document stating the matters forming the basis of the calculation of that allocation.

④A Resident who receives the application of Article 95, paragraphs (1) through (3) (Foreign Tax Credit) of the Act must attach to the Tax Return, Amended Return or written request for Reassessment a document stating the particulars of the calculation of the amount of income pertaining to the foreign source income listed in Article 221-2, item (ii) for that year.

①The amount calculated as specified by Cabinet Order prescribed in Article 95, paragraph (1) (Foreign Tax Credit) of the Act is to be the amount calculated by multiplying the amount of income tax for that year of the Resident referred to in that paragraph (meaning the amount of income tax calculated without applying that Article, and excluding the amount of accessory tax) by the proportion that the adjusted amount of foreign-source income for that year bears to the aggregate income for that year.

②The aggregate income for that year prescribed in the preceding paragraph is to be the sum of the gross income, the amount of retirement income and the amount of timber income for that year calculated without applying Article 70, paragraph (1) or (2) (Deduction for Carryover of Net Loss) or Article 71 (Deduction for Carryover of Casualty Loss) of the Act (referred to in the following paragraph as the "aggregate income for the year").

③The adjusted amount of foreign-source income for that year prescribed in paragraph (1) means the amount of foreign-source income for that year prescribed in Article 95, paragraph (1) of the Act (for a Non-Permanent Resident, limited, out of that amount of foreign-source income, to the portion pertaining to foreign source income paid in Japan or remitted from outside Japan; the same applies hereinafter in this paragraph) calculated without applying Article 70, paragraph (1) or (2) or Article 71 of the Act; provided, however, that where that amount of foreign-source income exceeds the amount equivalent to the aggregate income for the year, it is the amount equivalent to the aggregate income for the year.