First, We Counted

Parenthetical clauses are often the first reason cited for the difficulty of tax law. How many are there in practice? We obtained the full texts of the Corporation Tax Act, its Enforcement Order, and the Act on Special Measures Concerning Taxation from e-Gov’s law database, and counted sentences separated by full stops outside parentheses. The sample comprised 8,875 sentences.

The deepest nesting was18 levels, in Article 184 of the Order for Enforcement of the Corporation Tax Act (Calculation of Income Attributable to a Permanent Establishment).That single sentence contains 6,471 Japanese characters. The longest single sentence is in Article 8 of the same Order (Amount of Stated Capital, etc.), at 13,853 characters, with three levels of nesting.

We also counted the contents of the parentheses. The three laws and orders contain 20,534 parenthetical clauses, broken down as follows.

Particularly consequential for readers are exclusions and limitations, which together account for4,318 clauses (21.0 percent).Overlooking these can reverse the conclusion.

Comparison with the Civil Code

Is this complexity specific to tax law, or common to legislation generally? We compared 20 laws and orders using the same method. The measure wasthe number of parenthetical clauses per sentence.The results are listed in ascending order.

The Civil Code averages 0.51 parenthetical clauses per sentence, versus 3.48 for the Order for Enforcement of the Corporation Tax Act—a difference of roughly sevenfold.Average sentence length is also more than four times greater: 319 characters versus 73.

So far, this was as expected. The next finding was more surprising.

Being Administrative Law Was Not the Explanation

One view is that numerous parentheses are characteristic of administrative law. The figures did not support that view.

Consider these three general administrative statutes:The Administrative Case Litigation Act averages 0.39, the Administrative Complaint Review Act 0.68, and the Administrative Procedure Act 0.75.These figures are close to the Civil Code’s 0.51, and similar to the Penal Code (0.71) and Companies Act (0.72). Being administrative law does not, by itself, mean more parentheses.

Regrouping the results makes the pattern clearer.

The frequency of parentheses tracks not whether legislation is administrative law, butwhether its provisions calculate monetary amounts.Even within tax law, substantive statutes governing the calculation of tax (Income Tax Act: 2.41; Corporation Tax Act: 2.68) are more complex than the procedural Act on General Rules for National Taxes (1.51). Cabinet Orders (3.48) are more complex than statutes (2.68). The more detailed the calculations, the more parentheses appear.

Comparing Extreme Examples

For each law or order, we identified the single sentence containing the most parenthetical clauses.

The Civil Code also contains sentences with nested parentheses.However, there are only six in the entire Code:Articles 13 (arbitration agreements), 264-8, 264-14, 398-2, 404, and 819. All have two levels of nesting; none has three.

Moreover, the laws cited in these six provisions are the Arbitration Act (Act No. 138 of 2003), Electronically Recorded Monetary Claims Act (Act No. 102 of 2007), and Act on Promotion of Use of Alternative Dispute Resolution (Act No. 151 of 2004).The nesting occurs in technical provisions inserted later.The provisions on obligations and property rights that form the core of the Civil Code contain very few parentheses.

Depth Is Not What Makes Parentheses Difficult

Here is the conclusion first: deeply nested parentheses—five or ten levels—account for only 0.3 percent of the total. In practice, misreadings usually occur at two or three levels.

The real difficulty is not depth, butdistance.Hundreds of characters can separate an opening parenthesis from the “excluding...” or “limited to...” that completes it. Readers must retain the thought “this is an exclusion” throughout that span. This is where mistakes occur.

Tax accountants use different highlighter colors for parenthetical clauses to make that distance visible. Below, we apply colors to actual provisions.

Start by Reading One Color-Coded Example

This is the opening of the housing loan tax credit provision (Article 41 of the Act on Special Measures Concerning Taxation). It contains 227 Japanese characters and two levels of parentheses. The colors are:yellow for the first level,andgreen for the second level.The text is color-coded accordingly.

Where an individual, in Japan, constructs or acquires a residential building, etc.(meaning the construction of a residential building(meaning a building used as a residence as prescribed by Cabinet Order; the same applies through paragraph 31 below)or the acquisition of a residential building that has never been used since construction(excluding acquisitions from a spouse or another person with a special relationship to the individual as prescribed by Cabinet Order, and acquisitions by gift; the same applies in this paragraph and paragraphs 10, 20, 21, 27, and 35 below); the same applies in this paragraph and paragraph 3 below, paragraph 3, item 4 of the following article, and Article 41-2-2)

The colors reveal the sentence’s structure.

The second green clause contains an important point:A home purchased from a family member may be excluded from the housing loan tax credit.Reading only the main sentence would miss this entirely.

One further qualification matters. The provision says “acquisitions from a spouse or another person with a special relationship to the individualthose specified by a Cabinet Order.” Only acquisitions specified by Cabinet Order are excluded; it does not say that every acquisition from a family member is excluded. The scope cannot be determined without checking the Cabinet Order.There is a further limitation inside the parentheses.That additional qualification matters.

An Example of Distance Causing Errors More Than Depth

Next is the definition of a qualified contribution in kind in Article 2, item 12-14 of the Corporation Tax Act.It contains 896 characters in one sentence.The nesting is three levels deep—within approximately the top 2.4 percent statistically, but not exceptionally deep. The colors includeyellow for the first level,andgreen for the second level.andpink for the third level.It is.

A contribution in kind falling under any of the following categories(excluding a transfer to the recipient foreign corporation of real property situated in Japan or other assets prescribed by Cabinet Order(hereinafter referred to in this item as “domestic real property, etc.”), or assets relating to a business conducted through a domestic business establishment, etc.(meaning, for a domestic corporation, its head office, etc. prescribed in Article 69, paragraph 4, item 1(Foreign Tax Credit), and, for a foreign corporation, its permanent establishment)through which the business is conducted(excluding shares in a foreign corporation where the shares held represent at least twenty-five percent of the total number or total amount of that foreign corporation’s issued shares, etc.)or liabilities(hereinafter referred to in this item as “domestic assets, etc.”), or a domestic corporation’s industrial property rights, copyrights, or other assets prescribed by Cabinet Order(hereinafter referred to in this item as “intangible assets, etc.”)that are transferred(excluding transfers prescribed by Cabinet Order under which all such domestic real property, etc., domestic assets, etc., and intangible assets, etc. become assets or liabilities relating to the recipient foreign corporation’s business conducted through its permanent establishment), a transfer by a foreign corporation to a domestic corporation or another foreign corporation of assets relating to a business conducted through its head office, etc. prescribed in Article 138, paragraph 1, item 1(Domestic Source Income), being the head office, etc. specified therein(hereinafter referred to in this item as “head office, etc.”)through which the business is conducted(excluding domestic real property, etc.)or liabilities(hereinafter referred to in this item as “foreign corporation’s overseas assets, etc.”)that are transferred(in the case of a transfer of a foreign corporation’s overseas assets, etc. to the other foreign corporation, limited to transfers under which all or part of those assets, etc. become assets or liabilities relating to that other foreign corporation’s business conducted through its permanent establishment), and a transfer by a domestic corporation to a foreign corporation of assets or liabilities relating to a business conducted through an overseas business establishment, etc. prescribed in Article 69, paragraph 4, item 1(hereinafter referred to in this item as “domestic corporation’s overseas assets, etc.”)under which all or part of those overseas assets, etc. become assets or liabilities relating to the foreign corporation’s business conducted through its head office, etc.(limited to transfers prescribed by Cabinet Order as equivalent to transfers of domestic assets, etc.), and delivery of bonds constituting bonds with share acquisition rights upon exercise of those rights; and limited to contributions for which only shares in the recipient corporation are delivered to the contributing corporation)is what the term means.

You may have noticed that there is only one yellow clause.This sentence has just one first-level parenthetical clause, containing 875 characters.The distance from its opening parenthesis to the word “excluding” that completes the exclusion is856 characters.It is.

Stripped to its main structure, the sentence says only:

Means a contribution in kind falling under any of the following categories [ ].

Dividing the 875-character yellow clause at commas at that level produces five parts.

Breaking the clause into five lines makes it easier to follow. However, each comma-separated line is not an independent requirement. Domestic real property, domestic assets, and intangible assets are a list of assets covered by one exclusion category; certain cases where all become assets or liabilities relating to the recipient foreign corporation’s permanent establishment are themselves excepted from that exclusion. The relationships between lines and exceptions to exclusions must be checked against the original. Read as one sentence, however,it is not immediately clear whether the final “limited to...” narrows the immediately preceding exclusion or imposes a condition on the whole definition.is.

The latter is correct. The structure is “excluding..., and limited to...,” with the exclusion and limitation alongside one another. But a gap of 856 characters can cause readers to confuse them. Three levels of nesting and a distance of 856 characters together can mislead even experienced readers of legislation.

Turn the Highlighter Method into a Procedure

Color-coding is a tool for carrying out the following procedure, rather than an end in itself. Read provisions in this order.

Step 3 is crucial. Tax accountants often use highlighters when reading provisions to organize their structure and identify what parenthetical clauses, “excluding...,” and “limited to...” modify.

Points that require care in practice

• The scope of “as prescribed by Cabinet Order” inside parentheses cannot be determined from the statute alone. You must consult Cabinet and ministerial orders to establish whether something is included or excluded.
• When “excluding...” and “limited to...” appear in the same parentheses, comma placement determines what each modifies. Missing a single comma can reverse the conclusion.
• “The same applies hereinafter in this paragraph” specifies the scope of a definition. The same word may have a different meaning in another paragraph.
• Hyphenated article numbers are used, among other things, to add provisions without changing existing article numbers. Their presence or absence alone does not establish when the current wording was drafted. Do not assume the provision has the same structure as adjacent articles.
• Do not omit parenthetical clauses when quoting a provision. A quotation that drops “(excluding...)” is no longer a quotation of the same rule.
• Long parenthetical clauses are more dangerous than deeply nested ones. Depth is visible; distance is not.

Sources and method

• All statutory texts are originals obtained through the e-Gov law database API (retrieved September 6, 2026). The analysis covered the Corporation Tax Act, its Enforcement Order, and the Act on Special Measures Concerning Taxation.
• The color-coding and breakdown tables were generated mechanically by a program that matches parentheses, rather than added manually.
• The quoted provisions are Article 41, paragraph 1 of the Act on Special Measures Concerning Taxation (Special Income Tax Credit for Housing Loans, etc.) and Article 2, item 12-14 of the Corporation Tax Act (Qualified Contribution in Kind).
• The statistics cover 8,875 sentences and 20,534 parenthetical clauses in the Corporation Tax Act, its Enforcement Order, and the Act on Special Measures Concerning Taxation. Sentences were separated at full stops outside parentheses.
• The comparison used the same counting method on the full texts of the Civil Code, Commercial Code, Penal Code, Companies Act, Code of Civil Procedure, Administrative Procedure Act, Administrative Complaint Review Act, Administrative Case Litigation Act, Labor Standards Act, National Public Service Act, Building Standards Act, Road Traffic Act, Financial Instruments and Exchange Act, Act on General Rules for National Taxes, Income Tax Act, Inheritance Tax Act, and Consumption Tax Act. All were obtained through the e-Gov law database API in September 2026.