Article 1-2Scope of Permanent Establishments

一a relationship in which one party directly or indirectly holds shares, etc. (meaning shares or equity; the same applies hereinafter in this Article) in a number or amount exceeding 50 percent of the total number or total amount of the issued shares (for an investment corporation prescribed in Article 2, paragraph (12) (Definitions) of the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951), the issued investment units (meaning investment units prescribed in paragraph (14) of that Article; the same applies hereinafter in this item)) or equity (excluding treasury shares (including investment units; the same applies hereinafter in this item) or equity held by the corporation itself) of another corporation (hereinafter referred to as "issued shares, etc." in this Article), or any other relationship in which one party directly or indirectly controls the other party;

二a relationship between two corporations where each has shares, etc. in a number or amount exceeding 50 percent of its issued shares, etc. directly or indirectly held by the same person, or any other relationship between two persons where the two persons are directly or indirectly controlled by the same person (excluding a relationship falling under the relationship set forth in the preceding item).

一in the case where shares, etc. in a number or amount exceeding 50 percent of the issued shares, etc. of a corporation that is a shareholder, etc. (meaning a shareholder, etc. prescribed in Article 2, item (xiv) (Definitions) of the Corporation Tax Act (Act No. 34 of 1965); the same applies hereinafter in this paragraph) of the other corporation in the preceding paragraph are held by the one party in the preceding paragraph: the ratio that the number or amount of the shares, etc. of that other corporation held by the corporation that is that shareholder, etc. represents of the issued shares, etc. of that other corporation (if there are two or more such corporations that are shareholders, etc., the total of the ratios calculated for each of those two or more corporations that are shareholders, etc.);

二in the case where one or more corporations having a chain relationship with the corporation that is a shareholder, etc. of the other corporation in the preceding paragraph (excluding a corporation that is a shareholder, etc. in item (i) falling under the case set forth in that item) and with the one party in that paragraph through the holding of shares, etc. (hereinafter referred to as "capital-linked corporations" in this item) intervene between those persons (limited to the case where the capital-linked corporations and that corporation that is a shareholder, etc. each have shares, etc. in a number or amount exceeding 50 percent of their issued shares, etc. held by that one party or a capital-linked corporation (limited to one whose shares, etc. in a number or amount exceeding 50 percent of its issued shares, etc. are held by that one party or another capital-linked corporation)): the ratio that the number or amount of the shares, etc. of that other corporation held by the corporation that is that shareholder, etc. represents of the issued shares, etc. of that other corporation (if there are two or more such corporations that are shareholders, etc., the total of the ratios calculated for each of those two or more corporations that are shareholders, etc.).