Supplementary Provisions, Article 3Transitional Measures Concerning Reserves for Severance Packages

①The provisions of Articles 154 through 156 (Transfer Limit to Severance Package Reserves Account, etc.) of the New Order apply to the calculation of the amount of business income of an individual for each year from 1980 on, and the provisions then in force continue to govern the calculation of the amount of business income of an individual for each year up to and including 1979.

②In calculating the amount of business income of an individual for 1980, where the amount listed in item (ii) exceeds the amount listed in item (i), for the calculation of the amount of business income for that year, the amount equivalent to 40 percent of the year-end required retirement allowance payments prescribed in Article 154, paragraph (1), item (ii) and Article 155, paragraph (1), item (ii) of the New Order is, notwithstanding those provisions, to be the amount listed in item (ii).

③In calculating the amount of business income for each year from 1981 on (excluding years from 1999 on) of an individual to whom the provisions of the preceding paragraph have been applied, for the calculation of the amount of business income for each year up to the year preceding the first year in which the amount equivalent to 40 percent of the year-end required retirement allowance payments prescribed in Article 154, paragraph (1), item (ii) and Article 155, paragraph (1), item (ii) of the New Order as of December 31 of that year (or, where the individual died in the course of the year, at the time of death; the same applies in item (ii)) comes to exceed the amount listed in item (i), the amount equivalent to 40 percent of the year-end required retirement allowance payments prescribed in Article 154, paragraph (1), item (ii) and Article 155, paragraph (1), item (ii) of the New Order is, notwithstanding those provisions, to be whichever is the smaller of the following amounts.

④With regard to the application of the provisions of Article 156, item (iii) of the New Order to the amount of business income for each year from 1980 on (excluding years from 1999 on) of the individuals listed below, the phrase "the amount listed in paragraph (1), item (ii) of the preceding Article where calculated without applying the provisions of this item (hereinafter in this item referred to as the "pre-adjustment excess over the accumulated limit")" in that item is deemed to be replaced with "pre-adjustment excess over the accumulated limit (meaning, for the year including the day on which an individual listed in Article 3, paragraph (4), item (i) of the Supplementary Provisions of the Cabinet Order Partially Amending the Order for Enforcement of the Income Tax Act (Cabinet Order No. 40 of 1980; hereinafter in this item referred to as the "1980 Amending Order") came to fall under the case prescribed in the preceding item, the amount listed in Article 155, paragraph (1), item (ii) of the Order for Enforcement of the Income Tax Act before amendment by the 1980 Amending Order (hereinafter in this item referred to as the "Former Order") calculated without applying the provisions of Article 156, item (iii) of the Former Order, and, for the year including the day on which an individual listed in Article 3, paragraph (4), item (ii) of the Supplementary Provisions of the 1980 Amending Order came to fall under the case prescribed in the preceding item, the amount listed in paragraph (1), item (ii) of the preceding Article calculated without applying the provisions of this item and by applying the provisions of Article 3, paragraph (2) or (3) of the Supplementary Provisions of the 1980 Amending Order; the same applies hereinafter in this item)", the phrase "paragraph (1), item (ii) of the preceding Article as of that date calculated without applying the provisions of this item" with "paragraph (1), item (ii) of the preceding Article in the case calculated as of that date without applying the provisions of this item and by applying the provisions of Article 3, paragraph (2) or (3) of the Supplementary Provisions of the 1980 Amending Order", and the phrase "item (ii) of that paragraph" with "paragraph (1), item (ii) of the preceding Article in the case calculated by applying the provisions of Article 3, paragraph (2) or (3) of the Supplementary Provisions of the 1980 Amending Order".

⑤The provisions of paragraphs (2) and (3) apply mutatis mutandis to the calculation of the amount of business income for each year from the first year in which an individual to whom the provisions of Article 156, item (iii) of the New Order, as read pursuant to the provisions of the preceding paragraph, have been applied comes to be no longer subject to the application of the provisions of that item (excluding years from 1999 on). In this case, the phrase "of an individual for 1980" in paragraph (2) is deemed to be replaced with "of an individual to whom the provisions of Article 156, item (iii) of the New Order, as read pursuant to the provisions of paragraph (4), have been applied, for the first year in which the individual comes to be no longer subject to the application of the provisions of that item (hereinafter, through the following paragraph, referred to as the "transition year")", the phrase "December 31, 1980" with "December 31 of the transition year", the phrase "December 31, 1979" with "December 31 of the year preceding the transition year", and the phrase "in 1980" with "in the transition year", and the phrase "1981" in paragraph (3) with "the year following the transition year".