Act on Special Measures Concerning Taxation

Where an individual who files a blue return and who operates a marine transportation business specified by Cabinet Order (hereinafter referred to in this paragraph as a "specified marine transportation business") acquires, during the period from April 1, 2021 to March 31, 2029, a ship listed in any of the following items among the ships specified by Cabinet Order as contributing to the rationalization of the management of the specified marine transportation business and to the reduction of environmental load (hereinafter referred to in this Article as a "specified ship") that has not been used for business since its manufacture, or manufactures a specified ship, and puts it to use for the individual's specified marine transportation business (excluding the case where the individual puts to that use the specified ship acquired through a lease transaction without transfer of ownership and the case where a person other than an individual specified by Cabinet Order puts it to use for leasing), the amount to be included in necessary expenses as the depreciation allowance for that specified ship in calculating the amount of business income of the individual for the year that includes the day on which it was put to that use, notwithstanding the provisions of Article 49, paragraph (1) of the Income Tax Act, is the amount calculated by the individual as necessary expenses, up to the sum of the amount of depreciation allowance calculated for that specified ship pursuant to the provisions of that paragraph and the special depreciation limit (meaning the amount calculated by multiplying the acquisition cost of that specified ship by the percentage specified in each of those items according to the category of ships listed in that item) (referred to in the following paragraph as the "total depreciation limit"); provided, however, that it may not be less than the amount to be included in necessary expenses as the depreciation allowance for that specified ship pursuant to the provisions of paragraph (1) of that Article.

an ocean-going ship (meaning a ship that travels between Japan and a foreign country or between foreign countries; hereinafter the same applies in this paragraph) that falls under a ship which, among the specified oceangoing ships prescribed in Article 39-2, paragraph (2), item (ii) of the Marine Transportation Act (Act No. 187 of 1949) (hereinafter referred to in this item and the following item as "specified oceangoing ships") stated in the individual's certified plan for securing ocean-going ships, etc. prescribed in Article 39-5 of that Act (hereinafter referred to in this item and the following item as a "certified plan for securing ocean-going ships, etc."), has been certified, as specified by Order of the Ministry of Finance, to be a ship for Japanese external ship operation business (meaning a specified oceangoing ship to be used for the external ship operation business prescribed in Article 35, paragraph (3), item (v) of that Act operated by a Japanese external ship operator, etc. prescribed in Article 39, paragraph (2), item (iii) of that Act) acquired or manufactured in accordance with that certified plan for securing ocean-going ships, etc.: the percentage specified in each of the following sub-items according to which of the ships listed therein that ocean-going ship falls under:

an advanced vessel (limited to a ship specified by Cabinet Order as that which contributes remarkably to reducing environmental load; referred to in (a) of the following item and (a) of item (iii) as a "specified advanced vessel") stated in the individual's certified advanced vessel introduction plan, etc. prescribed in Article 39-14 of the Marine Transportation Act (limited to one concerning the introduction of advanced vessels (meaning the advanced vessels prescribed in Article 39-10, paragraph (1) of that Act; the same applies in (a))): 30 percent (for a ship that falls under a Japanese ship (meaning a Japanese ship prescribed in Article 1 of the Ship Act (Act No. 46 of 1899); hereinafter the same applies in this paragraph), 32 percent);

a ship other than the ship listed in (a): 27 percent (for a ship that falls under a Japanese ship, 29 percent);

an ocean-going ship (excluding the ships listed in the preceding item) that falls under a specified oceangoing ship for which it has been certified, as specified by Order of the Ministry of Finance, that it was acquired or manufactured in accordance with the certified plan for securing ocean-going ships, etc. pertaining to that specified oceangoing ship: the percentage specified in each of the following sub-items according to which of the ships listed therein that ocean-going ship falls under:

a specified advanced vessel: 28 percent (for a ship that falls under a Japanese ship, 30 percent);

a ship other than the ship listed in (a): 25 percent (for a ship that falls under a Japanese ship, 27 percent);

an ocean-going ship other than the ships listed in the preceding two items: the percentage specified in each of the following sub-items according to which of the ships listed therein that ocean-going ship falls under:

a specified advanced vessel: 18 percent (for a ship that falls under a Japanese ship, 20 percent);

a ship other than the ship listed in (a): 15 percent (for a ship that falls under a Japanese ship, 17 percent);

a ship other than an ocean-going ship: 16 percent (for a ship specified by Cabinet Order as that which contributes remarkably to reducing environmental load, 18 percent).

Where the amount included in necessary expenses as the depreciation allowance for the specified ship pursuant to the provisions of the preceding paragraph is less than its total depreciation limit, the amount to be included in necessary expenses as the depreciation allowance for that specified ship in calculating the amount of business income for the year following the year in which it was put to use for the business may, notwithstanding the provisions of Article 49, paragraph (1) of the Income Tax Act, be the amount equivalent to the sum of the amount to be included in necessary expenses as the depreciation allowance for that specified ship pursuant to the provisions of that paragraph and the amount calculated by the individual as necessary expenses, up to the amount of the shortfall.

The provisions of the preceding two paragraphs apply only where the tax return contains a statement regarding the inclusion in necessary expenses of the amount to be included in necessary expenses pursuant to those provisions, and has a written statement concerning the calculation of the amount of depreciation allowance for the specified ship attached.

The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to the calculation of the amount of depreciation allowance for substitute assets for disaster-damaged assets, etc. subject to the provisions of the preceding paragraph. In this case, the phrase "its total depreciation limit" in paragraph (2) of that Article is deemed to be replaced with "the limit of the depreciation allowance that may be included in necessary expenses pursuant to the main clause of paragraph (1) of the following Article".

The provisions of the preceding two paragraphs apply only where the tax return contains a statement regarding the inclusion in necessary expenses of the amount to be included in necessary expenses pursuant to those provisions, and has a written statement concerning the calculation of the amount of depreciation allowance for the substitute assets for disaster-damaged assets, etc. attached.

Even where no tax return has been filed, or where a tax return without the statement or attachment referred to in the preceding paragraph has been filed, if the district director finds that there were unavoidable circumstances for the failure to file or for the absence of the statement or attachment, the district director may apply the provisions of paragraph (1) or paragraph (2), but only where a document containing that statement and the written statement referred to in that paragraph have been submitted.