Act on Special Measures Concerning Taxation

If a corporation that files a blue return and that is a certified business adaptation business operator prescribed in Article 21-23, paragraph (1) of the Act on Strengthening Industrial Competitiveness (including a certified environmental burden reduction business operator prescribed in Article 9, paragraph (8) of the Act on the Promotion of Business Activities by Food, etc. Business Operators and Ensuring Proper Transactions of Food, etc. for Realizing a Sustainable Supply of Food, etc.) pertaining to a certification under Article 21-22, paragraph (1) of the Act on Strengthening Industrial Competitiveness granted during the period from the date of enforcement of the Act Partially Amending the Act on Strengthening Industrial Competitiveness, etc., and Other Matters (Act No. 70 of 2021) to March 31, 2028 (including, where the certification under Article 9, paragraph (1) of the Act on the Promotion of Business Activities by Food, etc. Business Operators and Ensuring Proper Transactions of Food, etc. for Realizing a Sustainable Supply of Food, etc. has been obtained for an environmental burden reduction business activity plan prescribed in Article 17, paragraph (3) of that Act (hereinafter referred to as an "environmental burden reduction business activity plan" in this paragraph), that certification (hereinafter referred to as a "business activity plan approval" in this paragraph); hereinafter referred to as a "specified certification" in this paragraph and the following paragraph), whose certified business adaptation plan prescribed in Article 21-23, paragraph (2) of the Act on Strengthening Industrial Competitiveness (limited to one concerning business adaptation for reducing environmental load through energy use prescribed in Article 21-20, paragraph (2), item (ii) of that Act (hereinafter referred to as "business adaptation for reducing environmental load through energy use" in this paragraph), and including an environmental burden reduction business activity plan pertaining to a business activity plan approval (if a certification of change under the provisions of Article 7, paragraph (1) of the Act on the Promotion of Business Activities by Food, etc. Business Operators and Ensuring Proper Transactions of Food, etc. for Realizing a Sustainable Supply of Food, etc. as applied mutatis mutandis pursuant to Article 9, paragraph (8) of that Act has been granted, the plan after the change); hereinafter referred to as a "specified certified energy-use environmental burden reduction business adaptation plan" in this paragraph and the following paragraph) states that production process efficiency improvement equipment, etc. prescribed in Article 2, paragraph (13) of the Act on Strengthening Industrial Competitiveness (hereinafter referred to as "production process efficiency improvement equipment, etc." in this Article) is to be introduced as a measure for business adaptation for reducing environmental load through energy use to be carried out in accordance with that specified certified energy-use environmental burden reduction business adaptation plan (such an operator is referred to as a "certified energy-use environmental burden reduction business adaptation operator" in the following paragraph), within the period from the date of the specified certification to the day on which three years have elapsed from that date, acquires production process efficiency improvement equipment, etc. stated in its specified certified energy-use environmental burden reduction business adaptation plan that have not been put to use for business since their manufacture or construction, or manufactures or constructs production process efficiency improvement equipment, etc. stated in its specified certified energy-use environmental burden reduction business adaptation plan, and puts it to use for the business of the corporation in Japan (excluding where it is put to use for lending; the same applies in the following paragraph), the depreciation limit of the production process efficiency improvement equipment, etc. for the business year that includes the date on which it was put to use for the business (excluding the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation, and each business year that includes a day within the period specified by Order of the Ministry of Finance as the period of the plan for investment in specified productivity-improving equipment, etc. prescribed in paragraph (1) of the following Article of a corporation that has received the confirmation prescribed in that paragraph; referred to as the "business year of commencement of use" in the following paragraph) is, notwithstanding the provisions of Article 31, paragraph (1) or (2) of the Corporation Tax Act, the sum of the ordinary depreciation limit of the production process efficiency improvement equipment, etc. and its special depreciation limit (meaning the amount equivalent to 30 percent of the acquisition cost of the production process efficiency improvement equipment, etc. (if the total acquisition cost of the production process efficiency improvement equipment, etc. acquired, manufactured or constructed as a measure for business adaptation for reducing environmental load through energy use carried out in accordance with its specified certified energy-use environmental burden reduction business adaptation plan exceeds 50 billion yen, the amount calculated by multiplying 50 billion yen by the ratio of the acquisition cost of the production process efficiency improvement equipment, etc. put to use for the business to that total; referred to as the "base acquisition cost" in the following paragraph)).

If a corporation that files a blue return and that is a certified energy-use environmental burden reduction business adaptation operator pertaining to a specified certification granted during the period from the date of enforcement of the Act Partially Amending the Act on Strengthening Industrial Competitiveness, etc., and Other Matters (Act No. 70 of 2021) to March 31, 2028, within the period from the date of the specified certification to the day on which three years have elapsed from that date, acquires production process efficiency improvement equipment, etc. stated in its specified certified energy-use environmental burden reduction business adaptation plan that have not been put to use for business since their manufacture or construction, or manufactures or constructs production process efficiency improvement equipment, etc. stated in its specified certified energy-use environmental burden reduction business adaptation plan, and puts it to use for the business of the corporation in Japan, and the provisions of the preceding paragraph are not applied to the production process efficiency improvement equipment, etc., the sum of the amounts calculated by multiplying the base acquisition cost of the production process efficiency improvement equipment, etc. put to use for the business by the rate specified in each of the following items according to the category of production process efficiency improvement equipment, etc. listed in that item (hereinafter referred to as the "maximum tax credit" in this paragraph) is deducted from the corporation tax before adjustment on the income for the business year of commencement of use (meaning the corporation tax before adjustment prescribed in Article 42-4, paragraph (19), item (ii); the same applies hereinafter in this Article). In this case, if the maximum tax credit of the corporation for the business year of commencement of use exceeds the amount equivalent to 20 percent of the corporation tax before adjustment of the corporation on the income for that business year of commencement of use, the amount to be deducted is limited to the amount equivalent to that 20 percent.

production process efficiency improvement equipment, etc. put to use for business by a small and medium sized enterprise prescribed in Article 42-4, paragraph (19), item (vii) (excluding one that falls under an excluded business operator prescribed in item (viii) of that paragraph or a group tax sharing excluded business operator prescribed in item (viii)-2 of that paragraph; referred to as a "small and medium sized enterprise" in the following item): the rate specified in each of the following according to the category of production process efficiency improvement equipment, etc. listed therein:

production process efficiency improvement equipment, etc. specified by Cabinet Order as contributing remarkably to reducing the environmental load from the use of energy: 10 percent;

production process efficiency improvement equipment, etc. other than that listed in (a): 5 percent.

production process efficiency improvement equipment, etc. put to use for business by a corporation other than a small and medium sized enterprise: the rate specified in each of the following according to the category of production process efficiency improvement equipment, etc. listed therein:

production process efficiency improvement equipment, etc. specified by Cabinet Order as contributing particularly remarkably to reducing the environmental load from the use of energy: 8 percent;

production process efficiency improvement equipment, etc. other than that listed in (a): 3 percent.

If a corporation that files a blue return and that is a certified business adaptation business operator prescribed in Article 21-35 of the Act on Strengthening Industrial Competitiveness (referred to as a "certified producer and seller of industrial competitiveness base-strengthening products" in paragraph (6)) pertaining to a certification under Article 21-22, paragraph (1) of that Act granted during the period from the date of enforcement of the Act Partially Amending the Act on Strengthening Industrial Competitiveness, etc. to Promote the Creation of New Businesses and Investment in Industry (Act No. 45 of 2024) to March 31, 2027 newly establishes or expands facilities for producing the semiconductors referred to in Article 2, paragraph (14) of the Act on Strengthening Industrial Competitiveness (hereinafter referred to as "semiconductors" in this paragraph and paragraph (6)), out of the products for strengthening the industrial competitiveness base prescribed in paragraph (14) of that Article (referred to as "products for strengthening the industrial competitiveness base" in paragraph (6)) that are stated in its certified business adaptation plan prescribed in Article 21-23, paragraph (2) of that Act (limited to one concerning business adaptation for reducing environmental load through energy use prescribed in Article 21-20, paragraph (2), item (ii) of that Act; referred to as a "certified energy-use environmental burden reduction business adaptation plan" in paragraph (6)), and acquires machinery or other depreciable assets pertaining to the new establishment or expansion (hereinafter referred to as "semiconductor production assets" in this paragraph and paragraph (13)) that have not been put to use for business since their manufacture or construction, or manufactures or constructs semiconductor production assets, and puts them to use for the business of the corporation in Japan, the sum of the lesser of the amount specified in each of the following items according to which of the semiconductors listed in those items the semiconductors produced by the semiconductor production assets fall under, and the amount equivalent to the amount specified by Order of the Ministry of Finance as the total amount invested in the semiconductor production assets put to use for the business and in the depreciable assets used directly or indirectly together with them to produce those semiconductors (if there is an amount already deducted, pursuant to the provisions of this paragraph, from the corporation tax before adjustment on the income for each business year preceding the business year of use with respect to those semiconductor production assets, or any other amount specified by Cabinet Order, the remaining amount after deducting those amounts) (hereinafter referred to as the "semiconductor tax credit limit" in this paragraph and paragraph (5)) is deducted from the corporation tax before adjustment on the income for each business year that includes a day within the period from the date on which they were put to use for the business (hereinafter referred to as the "date of commencement of use" in this paragraph) until the date on which ten years have elapsed from the date of the certification (if the certification is revoked pursuant to the provisions of Article 21-23, paragraph (2) or (3) of that Act by that date, until the day before the date of the revocation) (hereinafter referred to as "the applicable period" in this paragraph) (excluding the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation; hereinafter referred to as the "business year of use" in this paragraph), except where the provisions of the preceding two paragraphs are applied to those semiconductor production assets. In this case, if the semiconductor tax credit limit of the corporation for the business year of use exceeds the amount equivalent to 20 percent of the corporation tax before adjustment of the corporation on the income for that business year of use (if there is an amount to be deducted from the corporation tax before adjustment on the income for that business year of use pursuant to the provisions of the preceding paragraph, the remaining amount after deducting that amount), the amount to be deducted is limited to the amount equivalent to that 20 percent.

semiconductors that perform computation (hereinafter referred to as "computing semiconductors" in this item): the amount calculated by multiplying 16,000 yen (for computing semiconductors in which the interval between the centers of the conductors arranged on the transistors exceeds 130 nanometers at the point where it is shortest, the amount calculated by multiplying 16,000 yen by the rate specified by Cabinet Order as the ratio of the standard price of those computing semiconductors to the standard price of reference computing semiconductors (meaning computing semiconductors in which the interval between the centers of the conductors arranged on the transistors is 130 nanometers or less at the point where it is shortest)) by the sum of the numbers calculated by multiplying the numbers certified, as specified by Order of the Ministry of Finance, as the numbers of wafers, converted into wafers 200 millimeters in diameter, of the computing semiconductors produced by the semiconductor production assets that were sold in the business year of use (if the business year of use is the business year that includes the last day of the applicable period, limited to the period up to and including that last day), divided according to the following periods to which the dates of sale belong, by the rates specified respectively below:

the period from the date of commencement of use until the date on which seven years have elapsed from the date of commencement of use: 100 percent;

the period from the day following the date on which seven years have elapsed from the date of commencement of use until the date on which eight years have elapsed from the date of commencement of use: 75 percent;

the period from the day following the date on which eight years have elapsed from the date of commencement of use until the date on which nine years have elapsed from the date of commencement of use: 50 percent;

the period on and after the day following the date on which nine years have elapsed from the date of commencement of use: 25 percent.

semiconductors other than those listed in the preceding item (hereinafter referred to as "other semiconductors" in this item): the amount calculated by multiplying 4,000 yen (for other semiconductors that perform a specific function, such as being able to convert physical phenomena related to electric current, voltage or light into electrical signals or to convert electrical signals into physical phenomena related to electric current, voltage or light (hereinafter referred to as "power semiconductors, etc." in this item), the amount calculated by multiplying 4,000 yen by the rate specified by Cabinet Order as the ratio of the standard price of those power semiconductors, etc. to the standard price of reference semiconductors (meaning other semiconductors other than power semiconductors, etc.)) by the sum of the numbers calculated by multiplying the numbers certified, as specified by Order of the Ministry of Finance, as the numbers of wafers, converted into wafers 200 millimeters in diameter, of the other semiconductors produced by the semiconductor production assets that were sold in the business year of use (if the business year of use is the business year that includes the last day of the applicable period, limited to the period up to and including that last day), divided according to the periods listed in (a) through (d) of the preceding item to which the dates of sale belong, by the rates specified respectively in (a) through (d) of that item.

If a corporation that files a blue return has a carried-over excess of the tax credit limit in a business year (excluding the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation), the amount equivalent to that carried-over excess of the tax credit limit is deducted from the corporation tax before adjustment on the income for that business year. In this case, if the carried-over excess of the tax credit limit of the corporation for that business year exceeds the amount equivalent to 20 percent of the corporation tax before adjustment of the corporation on the income for that business year (if there is an amount to be deducted from the corporation tax before adjustment on the income for that business year pursuant to the provisions of the preceding two paragraphs, the remaining amount after deducting that amount), the amount to be deducted is limited to the amount equivalent to that 20 percent.

The carried-over excess of the tax credit limit prescribed in the preceding paragraph means the sum of the amounts, out of the semiconductor tax credit limit of the corporation for each business year that began within three years before the first day of the business year in question (limited to each business year in which the corporation has filed blue returns continuously up to that business year), that could not be fully deducted even after the deduction under paragraph (3) (if there is an amount already deducted from the corporation tax before adjustment in each such business year pursuant to the provisions of the preceding paragraph, the remaining amount after deducting that amount).

If a corporation that files a blue return and that is a certified producer and seller of industrial competitiveness base-strengthening products pertaining to a certification under Article 21-22, paragraph (1) of the Act on Strengthening Industrial Competitiveness granted during the period from the date of enforcement of the Act Partially Amending the Act on Strengthening Industrial Competitiveness, etc. to Promote the Creation of New Businesses and Investment in Industry (Act No. 45 of 2024) to March 31, 2027 newly establishes or expands facilities for producing products for strengthening the industrial competitiveness base (excluding semiconductors; hereinafter referred to as "specified industrial competitiveness base strengthening products" in this paragraph) stated in its certified energy-use environmental burden reduction business adaptation plan, and acquires machinery or other depreciable assets pertaining to the new establishment or expansion (hereinafter referred to as "assets for producing specified products" in this paragraph and paragraph (13)) that have not been put to use for business since their manufacture or construction, or manufactures or constructs assets for producing specified products, and puts them to use for the business of the corporation in Japan, the sum of the lesser of the amount specified in each of the following items according to which of the products listed in those items the specified industrial competitiveness base strengthening products produced by the assets for producing specified products fall under, and the amount equivalent to the amount specified by Order of the Ministry of Finance as the total amount invested in the assets for producing specified products put to use for the business and in the depreciable assets used directly or indirectly together with them to produce those specified industrial competitiveness base strengthening products (if there is an amount already deducted, pursuant to the provisions of this paragraph, from the corporation tax before adjustment on the income for each business year preceding the business year of use with respect to those assets for producing specified products, or any other amount specified by Cabinet Order, the remaining amount after deducting those amounts) (hereinafter referred to as the "maximum credit for specified products" in this paragraph and paragraph (8)) is deducted from the corporation tax before adjustment on the income for each business year that includes a day within the period from the date on which they were put to use for the business (hereinafter referred to as the "date of commencement of use" in this paragraph) until the date on which ten years have elapsed from the date of the certification (if the certification is revoked pursuant to the provisions of Article 21-23, paragraph (2) or (3) of that Act by that date, until the day before the date of the revocation) (hereinafter referred to as "the applicable period" in this paragraph) (excluding the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation; hereinafter referred to as the "business year of use" in this paragraph), except where the provisions of paragraphs (1) through (3) are applied to those assets for producing specified products. In this case, if the maximum credit for specified products of the corporation for the business year of use exceeds the amount equivalent to 40 percent of the corporation tax before adjustment of the corporation on the income for that business year of use (if there is an amount to be deducted from the corporation tax before adjustment on the income for that business year of use pursuant to the provisions of paragraphs (2) through (4), the remaining amount after deducting that amount), the amount to be deducted is limited to the amount equivalent to that 40 percent.

motor vehicles prescribed in Article 2, paragraph (14) of the Act on Strengthening Industrial Competitiveness (hereinafter referred to as "motor vehicles" in this item): the amount calculated by multiplying 200,000 yen (400,000 yen for those that do not have an internal combustion engine (excluding light motor vehicles prescribed in Article 3 of the Road Transport Vehicle Act (Act No. 185 of 1951))) by the sum of the numbers calculated by multiplying the numbers certified, as specified by Order of the Ministry of Finance, as the numbers of motor vehicles produced by the assets for producing specified products that were sold in the business year of use (if the business year of use is the business year that includes the last day of the applicable period, limited to the period up to and including that last day), divided according to the following periods to which the dates of sale belong, by the rates specified respectively below:

the period from the date of commencement of use until the date on which seven years have elapsed from the date of commencement of use: 100 percent;

the period from the day following the date on which seven years have elapsed from the date of commencement of use until the date on which eight years have elapsed from the date of commencement of use: 75 percent;

the period from the day following the date on which eight years have elapsed from the date of commencement of use until the date on which nine years have elapsed from the date of commencement of use: 50 percent;

the period on and after the day following the date on which nine years have elapsed from the date of commencement of use: 25 percent.

steel referred to in Article 2, paragraph (14) of the Act on Strengthening Industrial Competitiveness (hereinafter referred to as "steel" in this item): the amount calculated by multiplying 20,000 yen by the sum of the numbers calculated by multiplying the figures certified, as specified by Order of the Ministry of Finance, as the weight in tons of the steel produced by the assets for producing specified products that was sold in the business year of use (if the business year of use is the business year that includes the last day of the applicable period, limited to the period up to and including that last day), divided according to the periods listed in (a) through (d) of the preceding item to which the dates of sale belong, by the rates specified respectively in (a) through (d) of that item;

basic chemicals prescribed in Article 2, paragraph (14) of the Act on Strengthening Industrial Competitiveness (hereinafter referred to as "basic chemicals" in this item): the amount calculated by multiplying 50,000 yen by the sum of the numbers calculated by multiplying the figures certified, as specified by Order of the Ministry of Finance, as the weight in tons of the basic chemicals produced by the assets for producing specified products that were sold in the business year of use (if the business year of use is the business year that includes the last day of the applicable period, limited to the period up to and including that last day), divided according to the periods listed in (a) through (d) of item (i) to which the dates of sale belong, by the rates specified respectively in (a) through (d) of that item;

fuel referred to in Article 2, paragraph (14) of the Act on Strengthening Industrial Competitiveness (hereinafter referred to as "fuel" in this item): the amount calculated by multiplying 30 yen by the sum of the numbers calculated by multiplying the figures certified, as specified by Order of the Ministry of Finance, as the volume in liters of the fuel produced by the assets for producing specified products that was sold in the business year of use (if the business year of use is the business year that includes the last day of the applicable period, limited to the period up to and including that last day), divided according to the periods listed in (a) through (d) of item (i) to which the dates of sale belong, by the rates specified respectively in (a) through (d) of that item.

If a corporation that files a blue return has a carried-over excess of the tax credit limit in a business year (excluding the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation), the amount equivalent to that carried-over excess of the tax credit limit is deducted from the corporation tax before adjustment on the income for that business year. In this case, if the carried-over excess of the tax credit limit of the corporation for that business year exceeds the amount equivalent to 40 percent of the corporation tax before adjustment of the corporation on the income for that business year (if there is an amount to be deducted from the corporation tax before adjustment on the income for that business year pursuant to the provisions of paragraphs (2) through (4) and the preceding paragraph, the remaining amount after deducting that amount), the amount to be deducted is limited to the amount equivalent to that 40 percent.

The carried-over excess of the tax credit limit prescribed in the preceding paragraph means the sum of the amounts, out of the maximum credit for specified products of the corporation for each business year that began within four years before the first day of the business year in question (limited to each business year in which the corporation has filed blue returns continuously up to that business year), that could not be fully deducted even after the deduction under paragraph (6) (if there is an amount already deducted from the corporation tax before adjustment in each such business year pursuant to the provisions of the preceding paragraph, the remaining amount after deducting that amount).

The provisions of paragraph (1) do not apply to production process efficiency improvement equipment, etc. acquired by a corporation through a lease transaction without transfer of ownership.

The provisions of paragraph (1) apply only if the final return, etc. has a written statement attached thereto concerning the calculation of the depreciation limit of the production process efficiency improvement equipment, etc. and any other documents specified by Order of the Ministry of Finance.

The provisions of paragraphs (1) and (2) do not apply to production process efficiency improvement equipment, etc. acquired, manufactured or constructed on or after April 1, 2024 that is stated in a certified business adaptation plan prescribed in Article 21-23, paragraph (2) of the Act on Strengthening Industrial Competitiveness concerning business adaptation for reducing environmental load through energy use prescribed in Article 21-20, paragraph (2), item (ii) of that Act, for which an application for the certification under Article 21-22, paragraph (1) of that Act was filed before that date (excluding, where an application for the certification of a change under Article 21-23, paragraph (1) of that Act was filed on or after that date and the certification of the change was granted, the plan after the change).

The provisions of paragraph (2) apply only if a document stating the acquisition cost of the production process efficiency improvement equipment, etc., the amount to be deducted, and the details of the calculation of that amount, which are subject to the deduction under that paragraph, and any other documents specified by Order of the Ministry of Finance are attached to the final return, etc. (including an amended return form or written request for reassessment, if one is filed to increase the amount to be deducted pursuant to the provisions of that paragraph). In this case, the acquisition cost of the production process efficiency improvement equipment, etc. serving as the basis for the calculation of the amount to be deducted pursuant to that paragraph is limited to the acquisition cost of the production process efficiency improvement equipment, etc. stated in the document attached to the final return, etc.

The provisions of paragraphs (3) and (6) apply only if a document stating the numbers certified as specified by Order of the Ministry of Finance prescribed in the items of paragraph (3) or the items of paragraph (6) with respect to the semiconductor production assets or assets for producing specified products subject to the deduction under those provisions, the amount to be deducted, and the details of the calculation of that amount (including, where the provisions of the following paragraph do not apply because all of the requirements listed in the items of that paragraph are met, a document clarifying that all of the requirements listed in those items are met) is attached to the final return, etc. (including an amended return form or written request for reassessment, if one is filed to increase the amount to be deducted pursuant to those provisions).

The provisions of paragraph (3) and paragraph (6) do not apply for a business year in which a corporation fails to meet any of the following requirements (excluding that business year in the case specified by Cabinet Order as a case where the business year is neither the business year of establishment prescribed in paragraph (4), item (i) of the preceding Article (referred to in the following paragraph as the "business year of establishment") nor a business year of the merger, etc., and the amount of income for that business year is equal to or less than the amount of income for the business year preceding that business year).

the ratio of the amount obtained by deducting the corporation's comparative amount of salary or other wages paid to continuing employees prescribed in paragraph (4), item (vi) of the preceding Article (hereinafter referred to in this item and paragraph (19) as the "comparative amount of salary or other wages paid to continuing employees") from the corporation's amount of salary or other wages paid to continuing employees prescribed in paragraph (4), item (v) of the preceding Article (referred to in paragraph (19) as the "amount of salary or other wages paid to continuing employees") to that comparative amount of salary or other wages paid to continuing employees is 2 percent or more;

the amount listed in (a) exceeds the amount equivalent to 40 percent of the amount listed in (b):

the total acquisition cost of domestic assets (meaning machinery and equipment and other assets specified by Cabinet Order that are put to use for the corporation's business in Japan) for which the corporation carried out an acquisition, etc. (meaning acquisition or manufacture or construction, excluding acquisition through a merger, company split, gift, exchange, capital contribution in kind or a distribution in kind prescribed in Article 2, item (xii)-5-2 of the Corporation Tax Act and any other acquisition specified by Cabinet Order) in that business year and which the corporation holds as of the day of the end of that business year;

the total amount that the corporation has entered, through accounting as an expense or loss, as depreciation allowances for the depreciable assets it holds in that business year (including the amount set aside as a reserve for special depreciation through accounting as an expense or loss or through the method of setting it aside as a reserve through the appropriation of surplus by the day on which the settlement of accounts for that business year is finalized, and excluding the amount deemed to be included in the amount entered through accounting as an expense or loss prescribed in Article 31, paragraph (1) of the Corporation Tax Act pursuant to the provisions of paragraph (4) of that Article).

The business year of the merger, etc. prescribed in the preceding paragraph means a business year that includes the day of the merger, etc., the day of the transfer, etc. or the day of the succession, in the case where the corporation referred to in that paragraph is a merging corporation, a splitting corporation, a succeeding corporation in a company split, a corporation making a capital contribution in kind or a corporation receiving a capital contribution in kind pertaining to a merger, company split or capital contribution in kind (for a company split or capital contribution in kind, limited to one that transfers a business; hereinafter referred to in this paragraph as a "merger, etc."), is a corporation that transferred a business or a corporation that acquired a business pertaining to the transfer or acquisition of a business (hereinafter referred to in this paragraph as a "transfer, etc."), or is a predecessor corporation or a successor corporation pertaining to a succession under a special law, or in any other case specified by Cabinet Order, or a business year that includes any other day specified by Cabinet Order (excluding the business year of establishment of that corporation).

The provisions of paragraph (4) and paragraph (7) apply only where the tax returns prescribed in Article 2, item (xxxi) of the Corporation Tax Act for the business year in which the provisions of paragraph (3) or paragraph (6) were applied and each subsequent business year have attached to them a written statement of the excess carried-forward tax credit amount prescribed in paragraph (4) or paragraph (7), and the final return, etc. for the business year for which the corporation seeks the application of those provisions (including, where an amended return form or a written request for reassessment that increases the amount to be deducted pursuant to those provisions is submitted, that amended return form or written request for reassessment) has attached to it a document stating the excess carried-forward tax credit amount prescribed in those provisions that is subject to the deduction under those provisions, the amount to be deducted and the details of the calculation of that amount.

The provisions of Article 42-4, paragraphs (23) and (24) apply mutatis mutandis where the provisions of paragraphs (2) through (4), paragraph (6) or paragraph (7) apply. In this case, the phrase "paragraphs (1), (4), (7) and (14)" in paragraph (23) of that Article is deemed to be replaced with "Article 42-12-6, paragraphs (2) through (4), (6) and (7)".

With regard to the application of the provisions of the Local Corporation Tax Act in the case where the provisions of paragraph (6) or paragraph (7) apply, the phrase "through" in Article 6, paragraph (1), item (i) of that Act is deemed to be replaced with "through, and Article 42-12-6, paragraphs (6) and (7) of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957)"; the phrase "the provisions of" in item (ii), (a) and (b) of that paragraph is deemed to be replaced with "and the provisions of Article 42-12-6, paragraphs (6) and (7) of the Act on Special Measures Concerning Taxation"; the phrase "through" in Article 12, paragraph (2) of that Act is deemed to be replaced with "through, and Article 42-12-6, paragraphs (6) and (7) of the Act on Special Measures Concerning Taxation", and the phrase "amount of foreign-source income (that Act" is deemed to be replaced with "amount of foreign-source income (the Corporation Tax Act"; the phrase "exceeds" in Article 12-2, paragraph (1) of that Act is deemed to be replaced with "(where there is an amount deducted pursuant to the provisions of Article 42-12-6, paragraph (6) or paragraph (7) of the Act on Special Measures Concerning Taxation in calculating the amount of corporation tax on income for that taxable business year, the amount obtained by deducting that deducted amount from that base corporation tax amount) exceeds"; and the phrase "only" in paragraph (2) of that Article is deemed to be replaced with "(where there is an amount deducted pursuant to the provisions of Article 42-12-6, paragraph (6) or paragraph (7) of the Act on Special Measures Concerning Taxation, the amount obtained by adding that amount) only".

Beyond what is provided for in paragraph (9) through the preceding paragraph, the determination of whether the requirement listed in paragraph (14), item (i) is met in the case where the amount of salary or other wages paid to continuing employees and the comparative amount of salary or other wages paid to continuing employees are zero, and other necessary matters concerning the application of the provisions of paragraphs (1) through (8) are specified by Cabinet Order.