This Cabinet Order comes into effect on April 1, 2025; provided, however, that the provisions set forth in the following items come into effect on the dates prescribed respectively in those items:

①The provisions of Article 11-2, paragraph (2) of the Order for Enforcement of the Income Tax Act after the amendment by the provisions of Article 1 (hereinafter referred to as the "New Order") apply to the income tax for 2025 and subsequent years, and the provisions then in force continue to govern the income tax for 2024 and earlier years.

②A person who, before December 1, 2025, filed a Tax Return pursuant to Article 125 or Article 127 of the Income Tax Act for the income tax for 2025, and a person who, before that date, was subject to a determination for the income tax for 2025, may, where a change is to arise through the application of Article 11-2, paragraph (2) of the New Order in the matters stated in that Tax Return or the matters pertaining to that determination (or, where a Reassessment was made on those matters before that date, the matters after that Reassessment), file with the district director, within five years from that date, a request for Reassessment under Article 23, paragraph (1) of the Act on General Rules for National Taxes (Act No. 66 of 1962) regarding the matters in which the change is to arise.

The provisions of Article 61, paragraph (2), items (ii) and (iii) of the New Order apply to a company split by split-off set forth in item (ii) of that paragraph and a share distribution set forth in item (iii) of that paragraph that take place on or after the date this Cabinet Order comes into effect (hereinafter referred to as the "Effective Date"), and the provisions then in force continue to govern a company split by split-off set forth in Article 61, paragraph (2), item (ii) of the Order for Enforcement of the Income Tax Act prior to the amendment by the provisions of Article 1 (hereinafter referred to as the "Former Order") and a share distribution set forth in Article 61, paragraph (2), item (iii) of the Former Order that took place before the Effective Date.

The provisions of Article 70, paragraph (1) (limited to the portion pertaining to item (ii)) of the New Order apply to the income tax for 2026 and subsequent years, and the provisions then in force continue to govern the income tax for 2025 and earlier years.

The provisions of Article 89, item (iii) of the New Order apply to a grant and subsidy set forth in that item that an individual receives on or after the Effective Date.

The provisions of Article 114, paragraphs (4) and (5) of the New Order apply to a refund prescribed in paragraph (4) of that Article that takes place on or after April 1, 2026.

①The provisions of Article 120-2, paragraph (2), item (v) of the New Order apply to a contract for a lease transaction without transfer of ownership prescribed in that item that an individual enters into on or after the Effective Date, and the provisions then in force continue to govern a contract for a lease transaction without transfer of ownership prescribed in Article 120-2, paragraph (2), item (v) of the Former Order that an individual entered into before the Effective Date.

②With regard to a leased asset prescribed in Article 120-2, paragraph (2), item (iv) of the Order for Enforcement of the Income Tax Act for which the contract for a lease transaction without transfer of ownership prescribed in item (v) of that paragraph was concluded on or before March 31, 2027 (limited to one whose acquisition price (meaning the acquisition price calculated pursuant to the provisions of the items of Article 126, paragraph (1) of that Order; the same applies in paragraph (4)) includes an amount equivalent to the guaranteed residual value prescribed in Article 120-2, paragraph (2), item (vi) of that Order; hereinafter in this Article referred to as a "transitional lease asset"), an individual who holds that transitional lease asset may, for each year from 2026 onward, select the transitional lease-period straight-line method (meaning the method of depreciating, as the depreciation allowance for each year prescribed in Article 120, paragraph (1) of the Order for Enforcement of the Income Tax Act (referred to as the "depreciation allowance" in paragraph (4)), the amount calculated by dividing the revised acquisition cost of that transitional lease asset by the number of months of the revised lease period and multiplying the result by the number of months of the revised lease period in that year; the same applies hereinafter in this Article) in place of the depreciation method provided for in Article 120-2, paragraph (1), item (vi) of the New Order; provided, however, that this does not apply where an individual seeking to receive application of the main clause does not select the transitional lease-period straight-line method as the depreciation method to be followed for one or more of the transitional lease assets that the individual holds in the year in which the individual seeks to adopt that method.

③An individual seeking to receive application of the main clause of the preceding paragraph must, by the Filing Deadline for the income tax for the year in which the individual seeks to adopt the transitional lease-period straight-line method (limited to each year 2028 or earlier), submit to the competent district director with jurisdiction over the place for tax payment a written notice stating the type of asset prescribed in Article 120-3, paragraph (2) of the Order for Enforcement of the Income Tax Act for the transitional lease asset to which the individual seeks to apply the main clause of the preceding paragraph and other matters specified by Ministry of Finance Order.

④The revised acquisition cost prescribed in paragraph (2) means the acquisition price of a transitional lease asset to which the main clause of paragraph (2) applies as of January 1 of the first year in which that application is received (or, where that transitional lease asset was put to use for business after that date, the date on which it was put to use for business) (or, where there is an amount that has already been included in necessary expenses, as a depreciation allowance, in the calculation of the amount of real property income, the amount of business income, the amount of timber income or the amount of miscellaneous income for each year up to and including the year preceding that year, the amount obtained by deducting that amount), and the revised lease term prescribed in paragraph (2) means, of the lease term prescribed in Article 120-2, paragraph (2), item (vii) of the Order for Enforcement of the Income Tax Act for a transitional lease asset to which the main clause of paragraph (2) applies (limited, where that transitional lease asset was transferred to the individual in the middle of the lease term prescribed in that item for a reason other than those set forth in the items of Article 60, paragraph (1) of the Income Tax Act, to the period on or after the date of that transfer), the period on or after January 1 of the first year in which that application is received.

⑤The number of months referred to in paragraph (2) is calculated according to the calendar, and a fraction of less than one month is counted as one month.

⑥With regard to the application of Article 134, paragraph (1) of the New Order to a transitional lease asset to which the main clause of paragraph (2) applies, the depreciation method prescribed in item (ii) of Article 134, paragraph (1) of the New Order is to include the transitional lease-period straight-line method, and the Depreciable Assets set forth in item (ii), (c) of Article 134, paragraph (1) of the New Order are not to include that transitional lease asset.

The provisions of Article 170, paragraph (5) (limited to the portion pertaining to item (xiii) and including the case where it is applied mutatis mutandis pursuant to Article 170-2, paragraph (2) of the New Order) and paragraph (6) (including the case where it is applied mutatis mutandis pursuant to Article 170-2, paragraph (3) of the New Order) of the New Order apply to a refund prescribed in item (xiii) of Article 170, paragraph (5) of the New Order that takes place on or after April 1, 2026.