The amount specified by Cabinet Order as the maximum credit for local taxes prescribed in Article 95, paragraph (2) (Foreign Tax Credit) of the Act is the sum of the maximum amount under the provisions of Article 7-19, paragraph (3) (Credit of Foreign Income Tax Amount against Prefectural Inhabitant Tax) of the Order for Enforcement of the Local Tax Act (Cabinet Order No. 245 of 1950) and the maximum amount under the provisions of Article 48-9-2, paragraph (4) (Credit of Foreign Income Tax Amount against Municipal Inhabitant Tax) of that Order.

①The amount specified by Cabinet Order as the portion to be carried over to that year prescribed in Article 95, paragraph (2) (Foreign Tax Credit) of the Act is the amount equivalent to the sum of the unused portions within the maximum creditable amount for national tax that would be applied to the amount exceeding the credit limit for that year if the unused portion within the maximum creditable amount for national tax or the unused portion within the maximum creditable amount for local taxes of each of the years within the three years up to and including the year preceding that year (referred to in the following paragraph and paragraph (1) of the following Article as "each year within the previous three years") were applied to the amount exceeding the credit limit for that year in order from the oldest year, and, for the same year, in the order of the unused portion within the maximum creditable amount for national tax and then the unused portion within the maximum creditable amount for local taxes.

②If the amount of credit-eligible foreign income tax prescribed in Article 95, paragraph (1) of the Act that became payable in any one year of each year within the previous three years (hereinafter in this Article and Article 226 referred to as the "amount of credit-eligible foreign income tax") is included in necessary expenses in calculating the amount of real property income, the amount of business income, the amount of timber income or the amount of miscellaneous income for the year in which it became payable, or is included in the amount expended in calculating the amount of occasional income, the provisions of the preceding paragraph apply treating the unused portion within the maximum creditable amount for national tax and the unused portion within the maximum creditable amount for local taxes for each year up to and including that year as not being included in the unused portion within the maximum creditable amount for national tax and the unused portion within the maximum creditable amount for local taxes prescribed in that paragraph.

③With regard to the application of the provisions of paragraph (1) and paragraph (1) of the following Article for each year after the year in which Article 95, paragraph (2) of the Act can be applied, the unused portion within the maximum creditable amount for national tax and the unused portion within the maximum creditable amount for local taxes that are to be applied, under the provisions of paragraph (1), to the amount exceeding the credit limit for the year in which that application can be received, and that amount exceeding the credit limit equivalent to the sum of those amounts, are deemed not to exist.

④The unused portion within the maximum creditable amount for national tax prescribed in the preceding three paragraphs means the amount equivalent to the amount obtained by deducting the amount of credit-eligible foreign income tax from the maximum credit for national tax for that year (meaning the maximum credit prescribed in Article 95, paragraph (1) of the Act; the same applies hereinafter in this Article) where the amount of credit-eligible foreign income tax that becomes payable in that year is less than that maximum credit for national tax.

⑤The unused portion within the maximum creditable amount for local taxes prescribed in paragraphs (1) through (3) means the amount set out in each of the following items in accordance with the categories of cases set out in those items.

⑥The amount exceeding the credit limit prescribed in paragraphs (1) and (3) means the amount equivalent to the amount of the excess where the amount of credit-eligible foreign income tax that becomes payable in that year exceeds the sum of the maximum credit for national tax and the maximum credit for local taxes for that year.

①The amount specified by Cabinet Order as the portion to be carried over to that year prescribed in Article 95, paragraph (3) (Foreign Tax Credit) of the Act is the amount equivalent to the sum of the amounts exceeding the credit limit that would be applied to the unused portion within the maximum creditable amount for national tax of that year (meaning the unused portion within the maximum creditable amount for national tax prescribed in paragraph (4) of the preceding Article; the same applies hereinafter in this Article) if the amounts exceeding the credit limit for each year within the previous three years (meaning the amount exceeding the credit limit prescribed in paragraph (6) of the preceding Article; the same applies hereinafter in this Article) were applied to that unused portion in order from the oldest year.

②The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to the case referred to in the preceding paragraph. In this case, the phrase "the unused portion within the maximum creditable amount for national tax and the unused portion within the maximum creditable amount for local taxes" in paragraph (2) of that Article is deemed to be replaced with "the amount exceeding the credit limit".

③With regard to the application of the provisions of paragraph (1) and paragraph (1) of the preceding Article for each year after the year in which Article 95, paragraph (3) of the Act can be applied, the amount exceeding the credit limit that is to be applied, under the provisions of paragraph (1), to the unused portion within the maximum creditable amount for national tax of the year in which that application can be received, and that unused portion within the maximum creditable amount for national tax equivalent to it, are deemed not to exist.

④With regard to the application of the provisions of paragraph (1) and paragraph (1) of the preceding Article for each year after the year in which Article 7-19, paragraph (2) (Credit of Foreign Income Tax Amount against Prefectural Inhabitant Tax) of the Order for Enforcement of the Local Tax Act can be applied (excluding a year in which Article 48-9-2, paragraph (2) (Credit of Foreign Income Tax Amount against Municipal Inhabitant Tax) of that Order can also be applied) or the year in which Article 48-9-2, paragraph (2) of that Order can be applied, the amount exceeding the credit limit equivalent to the amount deemed to be the amount of income tax, etc. of a foreign country imposed in the year in which that application can be received under the provisions of Article 7-19, paragraph (2) or Article 48-9-2, paragraph (2) of that Order (excluding, where part of that amount exceeding the credit limit is to be applied under the provisions of paragraph (1) to the unused portion within the maximum creditable amount for national tax of the year in which that application can be received, the portion to be so applied), and the unused portion within the maximum creditable amount for local taxes prescribed in paragraph (5) of the preceding Article of the year in which that application can be received that is equivalent to it, are respectively deemed not to exist.

①The thing specified by Cabinet Order, such as a thing equivalent to a permanent establishment located outside Japan, prescribed in Article 95, paragraph (4), item (i) (Foreign Tax Credit) of the Act is to be, for a treaty partner state, etc. with which Japan has concluded a tax treaty (meaning a treaty prescribed in the proviso to Article 2, paragraph (1), item (viii)-4 (Definitions) of the Act, limited to one that provides that tax may be imposed on income attributable to a thing equivalent to a permanent establishment located within a Contracting State or Contracting Party to that treaty other than Japan (hereinafter in this paragraph referred to as a "treaty partner state, etc."); the same applies hereinafter in this paragraph), the thing equivalent to a permanent establishment provided for in that tax treaty that is located within the treaty partner state, etc. of that tax treaty; for a foreign country (meaning a foreign country prescribed in Article 2, item (iii) (Definitions) of the Act on Exemption, etc. of Income Tax, etc. on Income of Foreign Residents, etc. Based on the Principle of Reciprocity, and excluding that foreign country where it does not fall under any of the items of Article 5 (Principle of Reciprocity) of that Act; the same applies hereinafter in this paragraph), the thing equivalent to a domestic office, etc. prescribed in Article 2, item (vi) of the Act on Exemption, etc. of Income Tax, etc. on Income of Foreign Residents, etc. Based on the Principle of Reciprocity that is located in that foreign country; and, for any other country or region, the thing equivalent to a permanent establishment located in that country or region.

②The things specified by Cabinet Order as a place of business or other thing equivalent thereto prescribed in Article 95, paragraph (4), item (i) of the Act are the following:

①Income arising from the investment or holding of the following assets is to be included in the foreign source income listed in Article 95, paragraph (4), item (ii) (Foreign Tax Credit) of the Act:

②Income arising from the settlement of a foreign market derivatives transaction prescribed in Article 2, paragraph (23) of the Financial Instruments and Exchange Act or an over-the-counter derivatives transaction prescribed in paragraph (22) of that Article is not to be included in the foreign source income listed in Article 95, paragraph (4), item (ii) of the Act.