①In the case where a domestic corporation (excluding a domestic corporation in liquidation; hereinafter the same applies in this Article) that conducts any of the following businesses has received monies or materials in each business year, for the purpose of establishing the facilities necessary for conducting the business, from persons who consume electricity, gas or water, persons who use railway or rail track services, or other persons who enjoy benefits from such facilities (hereinafter referred to as the "beneficiaries" in this Article), when, with regard to the fixed assets comprising such facilities that it has acquired by the end of the business year, the book value of the fixed assets has been reduced, with the reduction accounted for as a loss, within the limit of the amount up to the amount required for the acquisition of the fixed assets out of the amount of the monies or the value of the materials received in the business year (if the fixed assets are depreciable assets acquired in a business year prior to the business year, the amount calculated as specified by Cabinet Order on the basis of that amount; hereinafter such limit is referred to as the "advanced depreciation limit" in this paragraph) or the amount not exceeding the advanced depreciation limit has been booked in such a manner as to save it as a reserve (including in a manner as specified by Cabinet Order) in the final settlement of the accounts in the business year, the amount equivalent to the amount reduced or booked as above is included in deductible expenses, when calculating the amount of income for the business year:

②In the case where the domestic corporation set forth in the preceding paragraph has received the delivery of fixed assets comprising the facilities necessary for conducting the businesses listed in the items of the paragraph in each business year from the beneficiaries of the business, when, in the business year, the book value of the fixed assets has been reduced, with the reduction accounted for as a loss, within the limit of the amount equivalent to the value of the fixed assets (hereinafter such limit is referred to as the "advanced depreciation limit" in this paragraph) or the amount not exceeding the advanced depreciation limit has been booked in such a manner as to save it as a reserve (including in a manner as specified by Cabinet Order) in the final settlement of the accounts in the business year, the amount equivalent to the amount reduced or booked as above is included in deductible expenses, when calculating the amount of income for the business year.

③The provisions of the preceding two paragraphs apply only in the case where a tax return contains a detailed statement concerning the inclusion in deductible expenses of the amount reduced or booked as prescribed in these provisions.

④Even in the case where a tax return without entries for the matters set forth in the preceding paragraph has been filed, the district director of the tax office may apply the provisions of paragraph (1) or paragraph (2), when they find any unavoidable grounds for the person's failure to make entries for such matters.

⑤In the case where the domestic corporation set forth in paragraph (1) transfers, as a result of a qualified company split, qualified capital contribution in kind, or qualified in-kind distribution (hereinafter referred to as a "qualified company split, etc." in this Article), fixed assets that it has acquired by the time immediately prior to the qualified company split, etc. (limited to those comprising the facilities in the case where the domestic corporation has received monies or materials, for the purpose of establishing the facilities necessary for conducting the business listed in the items of that paragraph, from the beneficiaries of the business during the period from the beginning of the business year containing the date of the qualified company split, etc. to that time immediately prior) to a succeeding corporation in a company split, corporation receiving a capital contribution in kind, or corporation receiving a distribution in kind (referred to as a "succeeding corporation in a company split, etc." in the following paragraph), when, in the business year, the book value of the fixed assets has been reduced to within the amount equivalent to the advanced depreciation limit prescribed in paragraph (1), the amount equivalent to the amount reduced as above is included in deductible expenses, when calculating the amount of income for the business year.

⑥In the case where the domestic corporation set forth in paragraph (1) transfers, as a result of a qualified company split, etc., fixed assets comprising the facilities necessary for conducting the business listed in the items of the paragraph (limited to the fixed assets that the domestic corporation acquired from the beneficiaries of the business during the period from the beginning of the business year containing the date of the qualified company split, etc. to immediately prior to the qualified company split, etc.) to a succeeding corporation in a company split, etc., when, in the business year, the book value of the fixed assets has been reduced to within the amount equivalent to the value of the fixed assets, the amount equivalent to the amount reduced as above is included in deductible expenses, when calculating the amount of income for the business year.

⑦The provisions of the preceding two paragraphs apply only in the case where the domestic corporation prescribed in these provisions has submitted documents stating the amount equivalent to the reduced amount prescribed in these provisions and any other matters as specified by Ministry of Finance Order to the competent district director with jurisdiction over the place for tax payment, within two months on or after the date of the qualified company split, etc.

⑧In the case where an acquiring corporation, succeeding corporation in a company split, corporation receiving a capital contribution in kind, or corporation receiving a distribution in kind has received the transfer of any of the fixed assets to which the provisions of paragraph (1), paragraph (2), paragraph (5), or paragraph (6) had been applied under an acquired corporation, splitting corporation, corporation making a capital contribution in kind, or corporation making a distribution in kind, as a result of a qualified merger, qualified company split, qualified capital contribution in kind, or qualified in-kind distribution, the acquisition cost of the fixed assets and other necessary matters concerning the application of the provisions of the preceding paragraphs are specified by Cabinet Order.

①In the case where a cooperative, etc. that does not hold capital contributions has allotted the expenses for acquiring or improving its fixed assets to be used for its business to its partners or members in each business year, when, with regard to the fixed assets to be used for its business that it has acquired or improved by the end of the business year, the book value of the fixed assets has been reduced, with the reduction accounted for as a loss, within the limit of the amount up to the amount required for the acquisition or improvement of the fixed assets out of the amount paid based on such allotment in the business year (if the fixed assets are depreciable assets acquired or improved in a business year prior to the business year, the amount calculated as specified by Cabinet Order on the basis of that amount; hereinafter such limit is referred to as the "advanced depreciation limit" in this paragraph) or the amount not exceeding the advanced depreciation limit has been booked in such a manner as to save it as a reserve in the final settlement of the accounts in the business year, the amount equivalent to the amount reduced or booked as above is included in deductible expenses, when calculating the amount of income for the business year.

②The provisions of the preceding paragraph apply only in the case where a tax return contains a detailed statement concerning the inclusion in deductible expenses of the amount equivalent to the amount reduced or booked as prescribed in the paragraph.

③Even in the case where a tax return without entries for the matters set forth in the preceding paragraph has been filed, the district director of the tax office may apply the provisions of paragraph (1), when they find any unavoidable grounds for the person's failure to make entries for such matters.

④The acquisition cost of the fixed assets to which the provisions of paragraph (1) have been applied and other necessary matters concerning the application of the provisions of the preceding three paragraphs are specified by Cabinet Order.

①In the case where a domestic corporation (excluding a domestic corporation in liquidation; hereinafter the same applies in this Article) has received, in each business year, insurance monies, mutual aid monies, or compensation for damages that is specified by Cabinet Order (hereinafter referred to as "insurance monies, etc." through to Article 49) for any loss of or damage to its fixed assets (in the case where a qualified merger, qualified company split, qualified capital contribution in kind, or qualified in-kind distribution (hereinafter referred to as a "qualified organizational restructuring" in this paragraph and paragraph (8)) in which the domestic corporation is the acquiring corporation, succeeding corporation in a company split, corporation receiving a capital contribution in kind, or corporation receiving a distribution in kind (referred to as an "acquiring corporation, etc." in paragraph (8)) has been effected, such fixed assets include those owned by the acquired corporation, splitting corporation, corporation making a capital contribution in kind, or corporation making a distribution in kind (referred to as an "acquired corporation, etc." in paragraph (8)) involved in the qualified organizational restructuring; hereinafter referred to as "owned Fixed Assets" in this Article), when, with regard to substituted assets (meaning the same type of fixed assets substituting the owned fixed assets; the same applies hereinafter in this Article) that it has acquired by the end of the business year (excluding the acquisition through a lease transaction that is specified by Cabinet Order as a transaction wherein the ownership is not transferred out of those prescribed in Article 64-2, paragraph (3) (Calculation of the Amount of Income Related to Lease Transactions); the same applies in paragraph (5)) or damaged assets, etc. (meaning the owned fixed assets that were damaged or assets to be substituted assets; the same applies in paragraph (5)) that it has improved by the end of the business year, the book value thereof has been reduced, with the reduction accounted for as a loss, within the limit of the amount calculated as specified by Cabinet Order as the amount of the gain pertaining to the insurance monies, etc. received in the business year (hereinafter such limit is referred to as the "advanced depreciation limit" in this paragraph) or the amount not exceeding the advanced depreciation limit has been booked in such a manner as to save it as a reserve (including in a manner as specified by Cabinet Order) in the final settlement of the accounts in the business year, the amount equivalent to the amount reduced or booked as above is included in deductible expenses, when calculating the amount of income for the business year.

②In the case where a domestic corporation has received the delivery of substituted assets in lieu of insurance monies, etc. for the loss of or damage to its owned fixed assets in each business year, when, in the business year, the book value of the substituted assets has been reduced, with the reduction accounted for as a loss, within the limit of the amount calculated as specified by Cabinet Order as the amount of the gain pertaining to the substituted assets (hereinafter such limit is referred to as the "advanced depreciation limit" in this paragraph) or the amount not exceeding the advanced depreciation limit has been booked in such a manner as to save it as a reserve (including in a manner as specified by Cabinet Order) in the final settlement of the accounts in the business year, the amount equivalent to the amount reduced or booked as above is included in deductible expenses, when calculating the amount of income for the business year.

③The provisions of the preceding two paragraphs apply only in the case where a tax return contains a detailed statement concerning the inclusion in deductible expenses of the amount equivalent to the amount reduced or booked as prescribed in these provisions.

④Even in the case where a tax return without entries for the matters set forth in the preceding paragraph has been filed, the district director of the tax office may apply the provisions of paragraph (1) or paragraph (2), when they find any unavoidable grounds for the person's failure to make entries for such matters.

⑤In the case where a domestic corporation transfers, as a result of a qualified company split, qualified capital contribution in kind, or qualified in-kind distribution (hereinafter referred to as a "qualified company split, etc." in this Article), the fixed assets that it has acquired or improved by the time immediately prior to the qualified company split, etc. (limited to substituted assets or damaged assets, etc. pertaining to the loss or damage in the case where it has received insurance monies, etc. for the loss of or damage to its owned fixed assets during the period from the beginning of the business year containing the date of the qualified company split, etc. to that time immediately prior) to a succeeding corporation in a company split, corporation receiving a capital contribution in kind, or corporation receiving a distribution in kind (referred to as a "succeeding corporation in a company split, etc." in the following paragraph), when, in the business year, the book value of the fixed assets has been reduced to within the amount equivalent to the advanced depreciation limit prescribed in paragraph (1), the amount equivalent to the amount reduced as above is included in deductible expenses, when calculating the amount of income for the business year.

⑥In the case where a domestic corporation transfers, as a result of a qualified company split, etc., substituted assets (limited to assets which have been delivered to the domestic corporation in lieu of insurance monies, etc. for the loss of or damage to its owned fixed assets during the period from the beginning of the business year containing the date of the qualified company split, etc. to immediately prior to the qualified company split, etc.) to a succeeding corporation in a company split, etc., when, in the business year, the book value of the substituted assets has been reduced to within the amount equivalent to the advanced depreciation limit prescribed in paragraph (2), the amount equivalent to the amount reduced as above is included in deductible expenses, when calculating the amount of income for the business year.

⑦The provisions of the preceding two paragraphs apply only in the case where the domestic corporation prescribed in these provisions has submitted documents stating the amount equivalent to the reduced amount prescribed in these provisions and other matters specified by Ministry of Finance Order to the competent district director with jurisdiction over the place for tax payment, within two months on or after the date of the qualified company split, etc.

⑧In the case where an acquiring corporation, etc. has received the transfer of any of the fixed assets to which the provisions of paragraph (1), paragraph (2), paragraph (5), or paragraph (6) had been applied under an acquired corporation, etc. as a result of a qualified organizational restructuring, the acquisition cost of the fixed assets and other necessary matters concerning the application of the provisions of the preceding paragraphs are specified by Cabinet Order.