Act on Special Measures Concerning Taxation

If a corporation that files a blue return (including an association or foundation without juridical personality; the same applies hereinafter in this Chapter) has an amount of experimental research expenses for a business year (excluding a business year that includes the date of dissolution (excluding dissolution due to a merger) and each business year during liquidation), the amount calculated by multiplying the amount of credit-eligible experimental research expenses for that business year by the rate specified in each of the following items according to the category of case listed in that item (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate specified in that item exceeds 10 percent, 10 percent) (hereinafter referred to as the "maximum tax credit" in this paragraph) is deducted from the corporation tax before adjustment on the corporation's income for that business year. In this case, if the maximum tax credit exceeds the upper limit of the credit (meaning the amount equivalent to 25 percent of the corporation tax before adjustment on the corporation's income for that business year), the amount to be deducted is limited to the upper limit of the credit.

if the ratio of increase or decrease in experimental research expenses exceeds 3 percent (excluding the case listed in item (iii)): the rate obtained by adding to 8.5 percent the rate calculated by multiplying the ratio of increase or decrease in experimental research expenses less 3 percent by 0.25;

if the ratio of increase or decrease in experimental research expenses is 3 percent or less (excluding the case listed in the following item): the rate obtained by subtracting from 8.5 percent the rate calculated by multiplying 3 percent less the ratio of increase or decrease in experimental research expenses by 8.5/13 (or zero, if the rate so obtained is less than zero);

if the business year is the business year of establishment, or if the amount of comparative experiment and research expenses is zero: 8.5 percent.

With regard to the application of the provisions of the preceding paragraph to a corporation referred to in that paragraph for each business year beginning during the period from April 1, 2021 to March 31, 2029, the maximum tax credit referred to in that paragraph is, notwithstanding the provisions of that paragraph, the amount specified in each of the following items according to the category of business year listed in that item.

a business year beginning before April 1, 2027 (excluding a business year listed in item (iii)): the amount calculated by multiplying the amount of credit-eligible experimental research expenses for that business year by the rate specified in each of the following according to the category of case listed therein (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate specified below exceeds 14 percent, 14 percent);

if the ratio of increase or decrease in experimental research expenses exceeds 12 percent (excluding the case listed in (d)): the rate obtained by adding to 11.5 percent the rate calculated by multiplying the ratio of increase or decrease in experimental research expenses less 12 percent by 0.375;

if the ratio of increase or decrease in experimental research expenses is zero or more and 12 percent or less (excluding the case listed in (d)): the rate obtained by subtracting from 11.5 percent the rate calculated by multiplying 12 percent less the ratio of increase or decrease in experimental research expenses by 0.25;

if the ratio of increase or decrease in experimental research expenses is less than zero (excluding the case listed in (d)): the rate obtained by subtracting from 8.5 percent the rate calculated by multiplying the percentage by which it falls short of zero by 8.5/30 (or zero, if the rate so obtained is less than zero);

if the business year is the business year of establishment, or if the amount of comparative experiment and research expenses is zero: 8.5 percent.

a business year beginning on or after April 1, 2027 (excluding a business year listed in the following item): the amount calculated by multiplying the amount of credit-eligible experimental research expenses for that business year by the rate specified in each of the following according to the category of case listed therein (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate specified below exceeds 14 percent, 14 percent);

if the ratio of increase or decrease in experimental research expenses exceeds 15 percent (excluding the case listed in (d)): the rate obtained by adding to 11.5 percent the rate calculated by multiplying the ratio of increase or decrease in experimental research expenses less 15 percent by 0.375;

if the ratio of increase or decrease in experimental research expenses exceeds 3 percent and is 15 percent or less (excluding the case listed in (d)): the rate obtained by adding to 8.5 percent the rate calculated by multiplying the ratio of increase or decrease in experimental research expenses less 3 percent by 0.25;

if the ratio of increase or decrease in experimental research expenses is 3 percent or less (excluding the case listed in (d)): the rate obtained by subtracting from 8.5 percent the rate calculated by multiplying 3 percent less the ratio of increase or decrease in experimental research expenses by 8.5/13 (or zero, if the rate so obtained is less than zero);

if the business year is the business year of establishment, or if the amount of comparative experiment and research expenses is zero: 8.5 percent.

a business year in which the ratio of experimental research expenses exceeds 10 percent: the amount calculated by multiplying the amount of credit-eligible experimental research expenses for that business year by the sum of the following rates (if that sum has a fraction beyond the third decimal place, the sum with that fraction discarded, and if that sum exceeds 14 percent, 14 percent).

the rate specified in (a) through (d) of the preceding item according to the category of case listed in (a) through (d) of that item (if that business year is a business year beginning before April 1, 2027, the rate specified in item (i), (a) through (d) according to the category of case listed in item (i), (a) through (d));

the rate calculated by multiplying the rate listed in (a) by the additional credit rate (meaning the rate calculated by multiplying that ratio of experimental research expenses less 10 percent by 0.5 (or 10 percent, if the rate so calculated exceeds 10 percent)).

With regard to the application of the provisions of paragraph (1) to a corporation referred to in that paragraph for a business year listed in each of the following items, the upper limit of the credit referred to in that paragraph is, notwithstanding the provisions of that paragraph, the amount obtained by adding, to the amount equivalent to 25 percent of the corporation tax before adjustment on the corporation's income for that business year, the amount specified in each of those items (for a business year that falls under each of the business years listed in the following items, the sum of the amounts specified in those items).

a business year that satisfies the following requirements: the amount equivalent to 15 percent of that corporation tax before adjustment;

the business year for which the provisions of paragraph (1) are applied (hereinafter referred to as the "applicable business year" in this item) falls under a business year that includes a day within the period from the date specified by Cabinet Order as the date of incorporation of a domestic corporation prescribed in Article 57, paragraph (11), item (iii) of the Corporation Tax Act for the corporation (referred to as the "establishment date" in (a)) to the day on which 10 years have elapsed from that establishment date (excluding, if the corporation is a group tax sharing corporation, the case where the business year of any of the other group tax sharing corporations that includes the date of the end of the applicable business year does not fall under a business year that includes a day within the period from the date specified by Cabinet Order as the date of incorporation of the other group tax sharing corporation prescribed in that item (referred to as the "other incorporation date" in (a)) to the day on which 10 years have elapsed from that other incorporation date);

at the end of the applicable business year, the corporation falls under neither a corporation listed in Article 66, paragraph (5), item (ii) or (iii) of the Corporation Tax Act nor a wholly owning parent corporation in a share transfer prescribed in Article 2, item (xii)-6-6 of that Act;

at the end of the applicable business year, there is an amount of net loss, etc. prescribed in Article 2, item (vi), (c) of the Act on General Rules for National Taxes (limited to that listed in (c)(2) of that item, and, if the corporation is a group tax sharing corporation, excluding the specified deficit of the corporation prescribed in Article 64-7, paragraph (2) of the Corporation Tax Act; referred to as the "amount of net loss, etc." in (c)) (including, if the corporation is a group tax sharing corporation, the case where there is an amount of net loss, etc. at the end of the business year ending on the date of the end of the applicable business year (limited to one ending on the date of the end of the business year prescribed in paragraph (1) of the group tax sharing parent corporation pertaining to the corporation) of any of the other group tax sharing corporations).

among the business years beginning during the period from April 1, 2023 to March 31, 2029, a business year listed in the following: the amount calculated by multiplying that corporation tax before adjustment by the rate specified in each of the following according to the category of business year listed therein (if a business year listed in (a) falls under both a business year listed in (a)(1) and a business year listed in (c), the higher of the rate specified in (a)(1) and the rate specified in (c), and if a business year listed in (b) falls under both a business year listed in (b)(1) and a business year listed in (c), the higher of the rate specified in (b)(1) and the rate specified in (c)).

a business year beginning before April 1, 2027 (excluding the business year of establishment and a business year for which the amount of comparative experiment and research expenses is zero): the rate specified in each of the following according to the category of business year listed therein;

a business year in which the ratio of increase or decrease in experimental research expenses exceeds 4 percent: the rate calculated by multiplying that ratio of increase or decrease in experimental research expenses less 4 percent by 0.625 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent);

a business year in which the ratio of increase or decrease in experimental research expenses is less than zero and the percentage by which it falls short of zero exceeds 4 percent (excluding a business year listed in (c)): the rate obtained by subtracting from zero the rate calculated by multiplying that percentage by which it falls short less 4 percent by 0.625 (if the rate so calculated has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent).

a business year beginning on or after April 1, 2027 (excluding the business year of establishment and a business year for which the amount of comparative experiment and research expenses is zero): the rate specified in each of the following according to the category of business year listed therein;

a business year in which the ratio of increase or decrease in experimental research expenses exceeds 7 percent: the rate calculated by multiplying that ratio of increase or decrease in experimental research expenses less 7 percent by 0.625 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent);

a business year in which the ratio of increase or decrease in experimental research expenses is less than zero and the percentage by which it falls short of zero exceeds 1 percent (excluding a business year listed in (c)): the rate obtained by subtracting from zero the rate calculated by multiplying that percentage by which it falls short less 1 percent by 0.625 (if the rate so calculated has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent).

a business year in which the ratio of experimental research expenses exceeds 10 percent: the rate calculated by multiplying that ratio of experimental research expenses less 10 percent by 2 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 10 percent, 10 percent).

If a small and medium sized enterprise (excluding one that falls under an excluded business operator (excluding one specified by Cabinet Order prescribed in paragraph (19), item (viii)-2) or a group tax sharing excluded business operator) or an agricultural cooperative, etc. (limited, if the agricultural cooperative, etc. is a group tax sharing parent corporation, to one specified by Cabinet Order as one all of whose other group tax sharing corporations fall under small and medium sized enterprises) that files a blue return (hereinafter referred to as a "small and medium sized enterprise, etc." in this paragraph) has an amount of experimental research expenses for a business year (excluding a business year for which the provisions of paragraph (1) are applied, a business year that includes the date of dissolution (excluding dissolution due to a merger), and each business year during liquidation), the amount equivalent to 12 percent of the amount of credit-eligible experimental research expenses for that business year (hereinafter referred to as the "maximum credit for small and medium sized enterprises, etc." in this paragraph) is deducted from the corporation tax before adjustment on the income of the small and medium sized enterprise, etc. for that business year. In this case, if the maximum credit for small and medium sized enterprises, etc. exceeds the upper limit of the credit for small and medium sized enterprises, etc. (meaning the amount equivalent to 25 percent of the corporation tax before adjustment on the income of the small and medium sized enterprise, etc. for that business year), the amount to be deducted is limited to the upper limit of the credit for small and medium sized enterprises, etc.

With regard to the application of the provisions of the preceding paragraph to a small and medium sized enterprise, etc. referred to in that paragraph for a business year listed in each of the following items among the business years beginning during the period from April 1, 2021 to March 31, 2029, the maximum credit for small and medium sized enterprises, etc. referred to in that paragraph is, notwithstanding the provisions of that paragraph, the amount calculated by multiplying the amount of credit-eligible experimental research expenses for that business year by the rate obtained by adding to 12 percent the rate specified in each of those items (if that rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so obtained exceeds 17 percent, 17 percent).

a business year in which the ratio of increase or decrease in experimental research expenses exceeds 12 percent (excluding the business year of establishment, a business year for which the amount of comparative experiment and research expenses is zero, and a business year in which the ratio of experimental research expenses exceeds 10 percent): the rate calculated by multiplying that ratio of increase or decrease in experimental research expenses less 12 percent by 0.375;

a business year in which the ratio of experimental research expenses exceeds 10 percent (excluding a business year that is neither the business year of establishment nor a business year for which the amount of comparative experiment and research expenses is zero and in which the ratio of increase or decrease in experimental research expenses exceeds 12 percent): the rate calculated by multiplying 12 percent by the additional credit rate (meaning the rate calculated by multiplying that ratio of experimental research expenses less 10 percent by 0.5 (or 10 percent, if the rate so calculated exceeds 10 percent));

a business year in which the ratio of increase or decrease in experimental research expenses exceeds 12 percent and the ratio of experimental research expenses exceeds 10 percent (excluding the business year of establishment and a business year for which the amount of comparative experiment and research expenses is zero): the sum of the following rates.

the rate specified in item (i);

the rate calculated by multiplying the rate listed in (a) by the additional credit rate prescribed in the preceding item;

the rate specified in the preceding item.

With regard to the application of the provisions of paragraph (4) to a small and medium sized enterprise, etc. referred to in that paragraph for a business year listed in each of the following items among the business years beginning during the period from April 1, 2021 to March 31, 2029, the upper limit of the credit for small and medium sized enterprises, etc. referred to in that paragraph is, notwithstanding the provisions of that paragraph, the amount obtained by adding the amount specified in each of those items to the amount equivalent to 25 percent of the corporation tax before adjustment on the income of the small and medium sized enterprise, etc. for that business year.

a business year in which the ratio of increase or decrease in experimental research expenses exceeds 12 percent (excluding the business year of establishment and a business year for which the amount of comparative experiment and research expenses is zero): the amount equivalent to 10 percent of that corporation tax before adjustment;

a business year in which the ratio of experimental research expenses exceeds 10 percent (excluding a business year listed in the preceding item): the amount calculated by multiplying that corporation tax before adjustment by the rate calculated by multiplying that ratio of experimental research expenses less 10 percent by 2 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 10 percent, 10 percent).

If, for a business year (excluding a business year for which the provisions of paragraph (1) are applied, a business year that includes the date of dissolution (excluding dissolution due to a merger), and each business year during liquidation), the amount of experimental research expenses of a corporation that files a blue return exceeds the corporation's amount of comparative experiment and research expenses, and the corporation has a carried-over excess of the tax credit limit, the amount equivalent to the carried-over excess of the tax credit limit is deducted from the corporation tax before adjustment on income for that business year. In this case, if the corporation's carried-over excess of the tax credit limit for that business year exceeds the amount equivalent to 25 percent of the corporation tax before adjustment on the corporation's income for that business year (if the provisions of paragraph (4) are applied for that business year, the remaining amount obtained by deducting, from the corporation's upper limit of the credit for small and medium sized enterprises, etc. prescribed in that paragraph, the amount deducted from the corporation tax before adjustment on income for that business year pursuant to the provisions of that paragraph), the amount to be deducted is limited to the amount equivalent to that 25 percent.

The provisions of paragraph (1), paragraph (4) or the preceding paragraph apply to a group tax sharing corporation as follows:

for a group tax sharing subsidiary corporation (limited to one that has a group tax sharing full controlling interest with the group tax sharing parent corporation pertaining to the group tax sharing subsidiary corporation on the date of the end of the business year of that group tax sharing parent corporation prescribed in paragraph (1), paragraph (4) or the preceding paragraph), the phrase "business year (excluding a business year that includes the date of dissolution (excluding dissolution due to a merger) and each business year during liquidation)" in paragraph (1) is deemed to be replaced with "business year", and the phrase "a business year for which the provisions of paragraph (1) are applied, a business year that includes the date of dissolution (excluding dissolution due to a merger), and each business year during liquidation" in paragraph (4) and the preceding paragraph is deemed to be replaced with "a business year for which the provisions of paragraph (1) are applied";

if there is an amount of experimental research expenses for the business year (hereinafter referred to as the "other business year" in this Article) ending on the date of the end of the eligible business year of a group tax sharing corporation (meaning the business year of the group tax sharing corporation prescribed in paragraph (1) (limited to a business year ending on the date of the end of the business year prescribed in that paragraph of the group tax sharing parent corporation pertaining to the group tax sharing corporation) or the business year of the group tax sharing corporation prescribed in paragraph (4) (limited to a business year ending on the date of the end of the business year prescribed in that paragraph of the group tax sharing parent corporation pertaining to the group tax sharing corporation); the same applies hereinafter in this Article) of another group tax sharing corporation that has a group tax sharing full controlling interest with the group tax sharing corporation on the date of the end of that eligible business year (referred to as an "other group tax sharing corporation" hereinafter up to paragraph (11), except in items (xii) and (xvi)), the amount of experimental research expenses under paragraph (1) or (4) for the eligible business year of the group tax sharing corporation is deemed to exist;

the maximum tax credit under paragraph (1) or the maximum credit for small and medium sized enterprises, etc. under paragraph (4) for the eligible business year of a group tax sharing corporation referred to in the preceding item is the amount calculated by multiplying the creditable tax amount (meaning the lesser of the amount listed in (a) and the amount listed in (b); the same applies hereinafter in this paragraph and the following paragraph) by the ratio that the corporation tax before adjustment on the income of the group tax sharing corporation for that eligible business year bears to the amount listed in (c) (hereinafter referred to as the "credit allocation ratio" in this Article) (hereinafter referred to as the "allocated creditable tax amount" in this paragraph and the following paragraph);

the amount calculated by multiplying the sum of the amounts of credit-eligible experimental research expenses for that eligible business year and for the other business years of the other group tax sharing corporations by the rate specified in each of the following according to the category of case listed therein (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate specified below exceeds 10 percent, 10 percent) (if the provisions of paragraph (4) are applied, the amount equivalent to 12 percent of that sum);

if the combined ratio of increase or decrease in experimental research expenses exceeds 3 percent (excluding the case listed in (3)): the rate obtained by adding to 8.5 percent the rate calculated by multiplying the combined ratio of increase or decrease in experimental research expenses less 3 percent by 0.25;

if the combined ratio of increase or decrease in experimental research expenses is 3 percent or less (excluding the case listed in (3)): the rate obtained by subtracting from 8.5 percent the rate calculated by multiplying 3 percent less the combined ratio of increase or decrease in experimental research expenses by 8.5/13 (or zero, if the rate so obtained is less than zero);

if the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero: 8.5 percent.

the amount equivalent to 25 percent of the amount listed in (c);

the sum of the amounts of corporation tax before adjustment on income for that eligible business year and for the other business years of the other group tax sharing corporations.

in the case referred to in the preceding item, if the amount of experimental research expenses for each business year of an other group tax sharing corporation, or the amount of credit-eligible experimental research expenses or the corporation tax before adjustment on income for the other business year of that other group tax sharing corporation, differs from the initially reported amount of experimental research expenses, or the initially reported amount of credit-eligible experimental research expenses or the initially reported pre-adjustment corporation tax amount (meaning, respectively, the amount stated in the document attached to the final return, etc. for that other business year as the amount of experimental research expenses for the respective business years, or as the amount of credit-eligible experimental research expenses or the corporation tax before adjustment on income for that other business year; the same applies hereinafter in this item), the initially reported amount of experimental research expenses, or the initially reported amount of credit-eligible experimental research expenses or the initially reported pre-adjustment corporation tax amount, is deemed to be the amount of experimental research expenses for the respective business years, or the amount of credit-eligible experimental research expenses or the corporation tax before adjustment on income for that other business year;

in the case referred to in item (iii), if the creditable tax amount is equal to or more than the initially reported amount eligible for tax credit (meaning the amount stated in the document attached to the final return, etc. for the eligible business year of a group tax sharing corporation as the creditable tax amount for that eligible business year; the same applies in the following item and item (vii)) (limited to the case where the allocated creditable tax amount differs from the initially reported allocated amount eligible for tax credit (meaning the amount stated in the document attached to the final return, etc. for that eligible business year as the allocated creditable tax amount for that eligible business year; the same applies hereinafter in this item and in the following item)), the initially reported allocated amount eligible for tax credit is deemed to be the allocated creditable tax amount for that eligible business year;

in the case referred to in item (iii), if the creditable tax amount is less than the initially reported amount eligible for tax credit, the treatment is as specified in each of the following according to the category of case listed therein;

if the initially reported allocated amount eligible for tax credit exceeds zero: the amount obtained by deducting, from the initially reported allocated amount eligible for tax credit, the amount obtained by subtracting that creditable tax amount from the initially reported amount eligible for tax credit (referred to as the "excess creditable tax amount" in (b)) is deemed to be the allocated creditable tax amount for the eligible business year of the group tax sharing corporation;

if the excess creditable tax amount exceeds the initially reported allocated amount eligible for tax credit: the amount of corporation tax on the income for the eligible business year of the group tax sharing corporation is, notwithstanding the provisions of Article 66, paragraphs (1), (3) and (6) and Article 69, paragraph (19) of the Corporation Tax Act (including as applied mutatis mutandis pursuant to paragraph (23) or (24) of that Article), the provisions of the following item (including as applied mutatis mutandis pursuant to paragraph (2) of the following Article or Article 42-5, paragraph (3), item (ii)), Article 42-14, paragraph (1), Article 67-2, paragraph (1) and Article 68, paragraph (1), and the provisions of other laws and regulations concerning corporation tax, the amount obtained by adding, to the amount of corporation tax calculated pursuant to these provisions, the amount equivalent to the amount obtained by deducting the initially reported allocated amount eligible for tax credit from that excess creditable tax amount.

if the amount of loss incurred in the eligible business year of a group tax sharing corporation referred to in item (iii), other than the specified deficit prescribed in Article 64-7, paragraph (2) of the Corporation Tax Act (hereinafter referred to as the "non-specified deficit" in this item and paragraph (12)), exceeds the amount stated in the document attached to the final return, etc. for that eligible business year as the non-specified deficit incurred in that eligible business year (including the case where there is an amount stated, in the document attached to the final return, etc. for that eligible business year (limited to a tax return form filed after the due date; referred to as a "final return filed after the due date" in paragraph (12)), as the deficit before group tax sharing prescribed in Article 64-5, paragraph (1) of that Act (excluding that deemed not to exist pursuant to the provisions of Article 64-6 of that Act; hereinafter referred to as the "deficit before group tax sharing" in this item and paragraph (12))), and the lesser of the amount listed in item (iii), (a) for that eligible business year and the amount obtained by deducting, from the amount listed in (b) of that item for that eligible business year, the amount equivalent to 25 percent of the amount of corporation tax that would be calculated if the amount of that excess in that case (if there is an amount stated as that deficit before group tax sharing, including that stated amount) were deemed to be the amount of income of the group tax sharing corporation for that eligible business year and the provisions of Article 66 of that Act and Articles 67-2 and 68 were to be applied to that amount of income (if the provisions of the preceding item apply in the eligible business year of the group tax sharing corporation, the amount obtained by adding the excess creditable tax amount prescribed in (a) of that item; hereinafter referred to as the "creditable amount after adjustment" in this item) is less than the initially reported amount eligible for tax credit, the amount of corporation tax on the income of the group tax sharing corporation for the eligible business year is, notwithstanding the provisions of Article 66, paragraphs (1), (3) and (6) and Article 69, paragraph (19) of that Act (including as applied mutatis mutandis pursuant to paragraph (23) or (24) of that Article), (b) of the preceding item (including as applied mutatis mutandis pursuant to paragraph (2) of the following Article or Article 42-5, paragraph (3), item (ii)), Article 42-14, paragraph (1), Article 67-2, paragraph (1) and Article 68, paragraph (1), and the provisions of other laws and regulations concerning corporation tax, the amount obtained by adding, to the amount of corporation tax calculated pursuant to these provisions, the amount equivalent to the amount obtained by deducting the creditable amount after adjustment from the initially reported amount eligible for tax credit;

with regard to the application of the provisions of item (iii) in the following cases of a group tax sharing corporation referred to in that item, the amount listed in (a) of that item is, notwithstanding the provisions of that item, the amount calculated by multiplying the sum prescribed in (a) of that item by the rate specified in each of the following;

if the provisions of paragraph (1) are applied for each business year prescribed in paragraph (2) (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of each business year prescribed in that paragraph of the group tax sharing parent corporation pertaining to the group tax sharing corporation): the rate specified in each of the following according to the category of business year listed therein (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate specified below exceeds 14 percent, 14 percent);

a business year beginning before April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning before that date, and excluding a business year listed in (3)): the rate specified in each of the following according to the category of case listed therein;

if the combined ratio of increase or decrease in experimental research expenses exceeds 12 percent (excluding the case listed in (iv)): the rate obtained by adding to 11.5 percent the rate calculated by multiplying the combined ratio of increase or decrease in experimental research expenses less 12 percent by 0.375;

if the combined ratio of increase or decrease in experimental research expenses is zero or more and 12 percent or less (excluding the case listed in (iv)): the rate obtained by subtracting from 11.5 percent the rate calculated by multiplying 12 percent less the combined ratio of increase or decrease in experimental research expenses by 0.25;

if the combined ratio of increase or decrease in experimental research expenses is less than zero (excluding the case listed in (iv)): the rate obtained by subtracting from 8.5 percent the rate calculated by multiplying the percentage by which it falls short of zero by 8.5/30 (or zero, if the rate so obtained is less than zero);

if the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero: 8.5 percent.

a business year beginning on or after April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning on or after that date, and excluding a business year listed in (3)): the rate specified in each of the following according to the category of case listed therein;

if the combined ratio of increase or decrease in experimental research expenses exceeds 15 percent (excluding the case listed in (iv)): the rate obtained by adding to 11.5 percent the rate calculated by multiplying the combined ratio of increase or decrease in experimental research expenses less 15 percent by 0.375;

if the combined ratio of increase or decrease in experimental research expenses exceeds 3 percent and is 15 percent or less (excluding the case listed in (iv)): the rate obtained by adding to 8.5 percent the rate calculated by multiplying the combined ratio of increase or decrease in experimental research expenses less 3 percent by 0.25;

if the combined ratio of increase or decrease in experimental research expenses is 3 percent or less (excluding the case listed in (iv)): the rate obtained by subtracting from 8.5 percent the rate calculated by multiplying 3 percent less the combined ratio of increase or decrease in experimental research expenses by 8.5/13 (or zero, if the rate so obtained is less than zero);

if the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero: 8.5 percent.

a business year in which the combined ratio of experimental research expenses exceeds 10 percent: the sum of the following rates.

the rate specified in (2)(i) through (iv) according to the category of case listed in (2)(i) through (iv) (if that business year is a business year beginning before April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning before that date), the rate specified in (1)(i) through (iv) according to the category of case listed in (1)(i) through (iv));

the rate calculated by multiplying the rate listed in (i) by the additional credit rate (meaning the rate calculated by multiplying that combined ratio of experimental research expenses less 10 percent by 0.5 (or 10 percent, if the rate so calculated exceeds 10 percent)).

if the provisions of paragraph (4) are applied for any of the following business years among each business year prescribed in paragraph (5) (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of each business year prescribed in that paragraph of the group tax sharing parent corporation pertaining to the group tax sharing corporation): the rate obtained by adding to 12 percent the rate specified in each of the following according to the category of business year listed therein (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so obtained exceeds 17 percent, 17 percent).

a business year in which the combined ratio of increase or decrease in experimental research expenses exceeds 12 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero and a business year in which the combined ratio of experimental research expenses exceeds 10 percent): the rate calculated by multiplying that combined ratio of increase or decrease in experimental research expenses less 12 percent by 0.375;

a business year in which the combined ratio of experimental research expenses exceeds 10 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations exceeds zero and in which the combined ratio of increase or decrease in experimental research expenses exceeds 12 percent): the rate calculated by multiplying 12 percent by the additional credit rate (meaning the rate calculated by multiplying that combined ratio of experimental research expenses less 10 percent by 0.5 (or 10 percent, if the rate so calculated exceeds 10 percent));

a business year in which the combined ratio of increase or decrease in experimental research expenses exceeds 12 percent and the combined ratio of experimental research expenses exceeds 10 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero): the sum of the following rates.

the rate specified in (1);

the rate calculated by multiplying the rate listed in (i) by the additional credit rate prescribed in (2);

the rate specified in (2).

with regard to the application of the provisions of item (iii) and item (vii) in the following cases of a group tax sharing corporation referred to in item (iii), the amount listed in item (iii), (b) and the amount equivalent to 25 percent prescribed in item (vii) are, notwithstanding those provisions, the amounts obtained by adding the amount specified in each of the following to the amount listed in item (iii), (b) and to the amount equivalent to 25 percent prescribed in item (vii), respectively;

if the provisions of paragraph (1) are applied for any of the following business years: the amount calculated by multiplying the amount listed in item (iii), (c) or the amount of corporation tax to be calculated prescribed in item (vii) by the rate specified in each of the following according to the category of business year listed therein (for a business year that falls under each of the following business years, the sum of the rates specified below);

a business year that satisfies the requirements listed in paragraph (3), item (i), (a) through (c) (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation that satisfies the requirements listed in (a) through (c) of that item): 15 percent;

any of the following business years among each business year prescribed in paragraph (3), item (ii) (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of each business year prescribed in that item of the group tax sharing parent corporation pertaining to the group tax sharing corporation): the rate specified in each of the following according to the category of business year listed therein (for a business year that falls under both a business year listed in (i) and a business year listed in (v), the higher of the rate specified in (i) and the rate specified in (v), and for a business year that falls under both a business year listed in (iii) and a business year listed in (v), the higher of the rate specified in (iii) and the rate specified in (v)).

among business years beginning before April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning before that date), a business year in which the combined ratio of increase or decrease in experimental research expenses exceeds 4 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero): the rate calculated by multiplying that combined ratio of increase or decrease in experimental research expenses less 4 percent by 0.625 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent);

among business years beginning before April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning before that date), a business year in which the combined ratio of increase or decrease in experimental research expenses is less than zero and the percentage by which it falls short of zero exceeds 4 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero and a business year listed in (v)): the rate obtained by subtracting from zero the rate calculated by multiplying that percentage by which it falls short less 4 percent by 0.625 (if the rate so calculated has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent);

among business years beginning on or after April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning on or after that date), a business year in which the combined ratio of increase or decrease in experimental research expenses exceeds 7 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero): the rate calculated by multiplying that combined ratio of increase or decrease in experimental research expenses less 7 percent by 0.625 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent);

among business years beginning on or after April 1, 2027 (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning on or after that date), a business year in which the combined ratio of increase or decrease in experimental research expenses is less than zero and the percentage by which it falls short of zero exceeds 1 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero and a business year listed in (v)): the rate obtained by subtracting from zero the rate calculated by multiplying that percentage by which it falls short less 1 percent by 0.625 (if the rate so calculated has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 5 percent, 5 percent);

a business year in which the combined ratio of experimental research expenses exceeds 10 percent: the special rate for that business year (meaning the rate calculated by multiplying the combined ratio of experimental research expenses less 10 percent by 2 (if the rate has a fraction beyond the third decimal place, the rate with that fraction discarded, and if the rate so calculated exceeds 10 percent, 10 percent); the same applies in (b)(2)).

if the provisions of paragraph (4) are applied for any of the following business years among each business year prescribed in paragraph (6) (if the group tax sharing corporation is a group tax sharing subsidiary corporation, a business year ending on the date of the end of each business year prescribed in that paragraph of the group tax sharing parent corporation pertaining to the group tax sharing corporation): the amount calculated by multiplying the amount listed in item (iii), (c) or the amount of corporation tax to be calculated prescribed in item (vii) by the rate specified in each of the following according to the category of business year listed therein.

a business year in which the combined ratio of increase or decrease in experimental research expenses exceeds 12 percent (excluding a business year in which the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations is zero): 10 percent;

a business year in which the combined ratio of experimental research expenses exceeds 10 percent (excluding a business year listed in (1)): the special rate for that business year.

with regard to the application of the provisions of item (iv) where the provisions of the preceding two items apply, the phrase "the amount of experimental research expenses for each business year of an other group tax sharing corporation" in that item is deemed to be replaced with "the amount of experimental research expenses for each business year of an other group tax sharing corporation, the average sales amount of that other group tax sharing corporation", the phrase "the initially reported amount of experimental research expenses" with "the initially reported amount of experimental research expenses, the initially reported average sales amount", and the phrase "the amount of experimental research expenses for the respective business years" with "the amount of experimental research expenses for the respective business years, the average sales amount of that other group tax sharing corporation";

in the case referred to in item (iii), the provisions of the second sentence of paragraph (1) and the second sentence of paragraph (4) do not apply;

the case where the amount of experimental research expenses for each business year prescribed in the preceding paragraph exceeds the amount of comparative experiment and research expenses is the case where the sum of the amount of experimental research expenses for the business year subject to the carried-over application of a group tax sharing corporation (meaning each business year of the group tax sharing corporation prescribed in that paragraph (limited to a business year ending on the date of the end of each business year prescribed in that paragraph of the group tax sharing parent corporation pertaining to the group tax sharing corporation); the same applies hereinafter in this paragraph and in paragraph (10)) and the amounts of experimental research expenses for the business years (referred to as the "other carry-forward applicable business year" in paragraph (10)) ending on the date of the end of that business year subject to the carried-over application of the other group tax sharing corporations that have a group tax sharing full controlling interest with the group tax sharing corporation on that date (hereinafter referred to as an "other carry-forward group tax sharing corporation" in this item and paragraph (10)) exceeds the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other carry-forward group tax sharing corporations;

the carried-over excess of the tax credit limit under the preceding paragraph for the business year subject to the carried-over application of a group tax sharing corporation referred to in the preceding item is the sum of the amount listed in (a) (if there is an amount already deducted from the corporation tax before adjustment, pursuant to the provisions of that paragraph, in each business year before that business year subject to the carried-over application, the remaining amount after deducting that amount) and the amount listed in (b);

the amount calculated by multiplying the amount obtained by deducting the amount listed in (2) from the amount listed in (1) for each business year of the group tax sharing corporation that began within three years before the first day of that business year subject to the carried-over application (limited to a business year that falls under an eligible business year pertaining to the application of the provisions of paragraph (4); hereinafter referred to as the "business year in which an excess arose" in this paragraph) (hereinafter referred to as the "group tax sharing carryforward credit excess amount" in this paragraph and paragraph (10)) by the credit allocation ratio pertaining to that business year in which an excess arose;

the amount listed in item (iii), (a) pertaining to the application of the provisions of paragraph (4);

the amount listed in item (iii), (b) pertaining to the application of the provisions of paragraph (4).

the sum prescribed in paragraph (19), item (x) of the group tax sharing corporation.

in the case referred to in the preceding item, if the group tax sharing carryforward credit excess amount for the business year in which an excess arose of the group tax sharing corporation referred to in that item is equal to or more than the initially reported group tax sharing carryforward credit excess amount (meaning the amount stated in the document attached to the final return, etc. for that business year in which an excess arose as the group tax sharing carryforward credit excess amount for that business year in which an excess arose) (limited to the case where the amount listed in (a) of that item for that business year in which an excess arose (hereinafter referred to as the "attributed group tax sharing carryforward credit excess amount" in this paragraph and paragraph (10)) differs from the initially reported attributed group carryover credit limit excess (meaning the amount stated in the document attached to that final return, etc. as the attributed group tax sharing carryforward credit excess amount for that business year in which an excess arose; the same applies hereinafter in this item)), the initially reported attributed group carryover credit limit excess is deemed to be the attributed group tax sharing carryforward credit excess amount for that business year in which an excess arose;

in the case referred to in item (xiii), if the group tax sharing carryforward credit excess amount for the business year in which an excess arose of the group tax sharing corporation referred to in that item is less than the initially reported group tax sharing carryforward credit excess amount (meaning the amount stated in the document attached to the final return, etc. for that business year in which an excess arose as the group tax sharing carryforward credit excess amount for that business year in which an excess arose) (limited to the case where the amount of the shortfall is equal to or less than the initially reported attributed group carryover credit limit excess (meaning the amount stated in the document attached to that final return, etc. as the attributed group tax sharing carryforward credit excess amount for that business year in which an excess arose; the same applies hereinafter in this item)), the amount obtained by deducting the amount of the shortfall from the initially reported attributed group carryover credit limit excess is deemed to be the attributed group tax sharing carryforward credit excess amount for that business year in which an excess arose;

in the case referred to in item (xiii), if the initially reported group tax sharing carryforward credit excess amount (meaning the amount stated in the document attached to the final return, etc. for the business year in which an excess arose as the group tax sharing carryforward credit excess amount for that business year in which an excess arose) for the business year in which an excess arose of the group tax sharing corporation referred to in that item (if there is an amount deemed, pursuant to the provisions of the preceding item, to be the attributed group tax sharing carryforward credit excess amount for that business year in which an excess arose or for the business year, ending on the date of the end of that business year in which an excess arose, of any other group tax sharing corporation that has a group tax sharing full controlling interest with the group tax sharing corporation on that date (hereinafter referred to as the "business year in which an excess arose, etc." in this item), the amount obtained by deducting the sum of the amounts of the shortfall referred to in the preceding item) exceeds the group tax sharing carryforward credit excess amount for that business year in which an excess arose as calculated without applying the provisions of items (iv) through (vi) and the preceding two items, the provisions of items (iv) through (vi) and the preceding two items do not apply to the calculation of the attributed group tax sharing carryforward credit excess amount pertaining to the application of the provisions of item (xiii). In this case, with regard to the application of the provisions of the preceding two items pertaining to the calculation of the attributed group tax sharing carryforward credit excess amount pertaining to the application of the provisions of item (xiii) after an amended return form has been filed or a reassessment under the provisions of Article 24 or 26 of the Act on General Rules for National Taxes has been made by applying the provisions of this item with respect to the business year in which an excess arose, etc., the amount stated in the document attached to that amended return form or to the written notice of reassessment prescribed in Article 28, paragraph (2) of that Act pertaining to that reassessment is deemed to be the amount stated in the document attached to the final return, etc.;

the amount equivalent to 25 percent prescribed in the preceding paragraph for the business year subject to the carried-over application of a group tax sharing corporation referred to in item (xii) is the group tax sharing carryforward credit upper limit (meaning the remaining amount obtained by deducting the amount listed in (b) from the amount listed in (a)).

the amount equivalent to 25 percent of the corporation tax before adjustment on the income of the group tax sharing corporation for that business year subject to the carried-over application (if the case falls under the case listed in item (ix), (b), the amount obtained by adding the amount calculated by multiplying that corporation tax before adjustment by the rate specified in item (ix), (b)(1) or (2) according to the category of business year listed in (b)(1) or (2) of that item);

the amount to be deducted from the corporation tax before adjustment on income for that business year subject to the carried-over application pursuant to the provisions of paragraph (4) in that business year subject to the carried-over application of the group tax sharing corporation.

The provisions of paragraph (1) or (4) pertaining to the eligible business year of a group tax sharing corporation referred to in the preceding paragraph, in the case where there is an amount of experimental research expenses for the other business year of an other group tax sharing corporation or corporation tax before adjustment on income for the other business year of an other group tax sharing corporation, apply, notwithstanding the provisions of paragraph (21), only if, for each and every one of those other group tax sharing corporations, a document stating the creditable tax amount and the allocated creditable tax amount and the details of the calculation of those amounts is attached to the final return, etc. for the respective other business year, and the document prescribed in that paragraph and a document stating the creditable tax amount and the allocated creditable tax amount and the details of the calculation of those amounts are attached to the final return, etc. for the eligible business year of the group tax sharing corporation. In this case, the amount of credit-eligible experimental research expenses serving as the basis for the calculation of the amount to be deducted pursuant to the provisions of paragraph (1) or (4) is limited to the amount of credit-eligible experimental research expenses stated in the document attached to the final return, etc. for that eligible business year.

The provisions of paragraph (7) pertaining to the business year subject to the carried-over application of a group tax sharing corporation referred to in paragraph (8), in the case where there is an attributed group tax sharing carryforward credit excess amount for the business year subject to the carried-over application of the group tax sharing corporation or for the other carry-forward applicable business year of an other carry-forward group tax sharing corporation, apply, notwithstanding the provisions of paragraph (22), only if, for each and every one of the group tax sharing corporation and those other carry-forward group tax sharing corporations, a written statement of the attributed group tax sharing carryforward credit excess amount is attached to the final return prescribed in Article 2, item (xxxi) of the Corporation Tax Act for each business year on or after the business year in which that attributed group tax sharing carryforward credit excess amount arose, and the document prescribed in that paragraph and a document stating the group tax sharing carryforward credit excess amount and the attributed group tax sharing carryforward credit excess amount and the details of the calculation of those amounts are attached to the final return, etc. for the business year subject to the carried-over application of the group tax sharing corporation.

A group tax sharing corporation referred to in paragraph (8) (including a corporation that was such a group tax sharing corporation) must, after the eligible business year of the group tax sharing corporation, notify the other group tax sharing corporations of the amounts that have come to differ, if the amount stated, in the document attached to the final return, etc. for that eligible business year and in that final return, etc., as the amount of experimental research expenses for that eligible business year or for each business year before that eligible business year, the amount of credit-eligible experimental research expenses or the corporation tax before adjustment on income for that eligible business year, or the amount of loss incurred in that eligible business year has come to differ from the amount of experimental research expenses for that eligible business year or for those respective business years, the amount of credit-eligible experimental research expenses or the corporation tax before adjustment on income for that eligible business year, or the amount of loss incurred in that eligible business year (including, if the provisions of item (viii) or (ix) of that paragraph apply, the case where the amount stated in the document attached to that final return, etc. as the average sales amount of the group tax sharing corporation has come to differ from the average sales amount of the group tax sharing corporation).

If, in the business year for which a group tax sharing corporation (including a corporation that was a group tax sharing corporation; hereinafter referred to as a "group tax sharing corporation, etc." in this paragraph) seeks the application of the provisions of paragraph (1) or (4) as prescribed in those provisions (for a group tax sharing subsidiary corporation to which the provisions of paragraph (8), item (i) apply, the business year prescribed in paragraph (1) or (4) as applied with the replacement of terms pursuant to the provisions of that item; hereinafter referred to as the "covered business year" in this paragraph and the following paragraph), there is a total loss increase (meaning, in the case where the non-specified deficit incurred in a business year of past application, etc. exceeds the amount stated in the document attached to the final return, etc. for that business year of past application, etc. as the non-specified deficit incurred in that business year of past application, etc. (hereinafter referred to as the "initially reported non-specified loss amount" in this paragraph) (excluding the case where a determination under the provisions of Article 25 of the Act on General Rules for National Taxes has been made, and including the case where there is an amount stated as the deficit before group tax sharing in the document attached to the final return filed after the due date for that business year of past application, etc.), the sum of the amounts of the excess of each of the group tax sharing corporation, etc. and the other group tax sharing corporations whose non-specified deficit has come to exceed its initially reported non-specified loss amount (if there is an amount stated as that deficit before group tax sharing, including that stated amount; hereinafter referred to as the "loss increase amount of each corporation" in this paragraph and the following paragraph) (if the provisions of this paragraph have already applied, in a business year of the group tax sharing corporation, etc. or an other group tax sharing corporation that ended before the date of the end of that covered business year of the group tax sharing corporation, etc., to the loss increase amount of each corporation pertaining to that business year of past application, etc., excluding the amount, out of that loss increase amount of each corporation, that served as the basis for the calculation of the amount added pursuant to the following items); the same applies hereinafter in this paragraph) in the business year of past application, etc. (meaning each business year of the group tax sharing corporation, etc. or an other group tax sharing corporation that ended before the date of the end of the covered business year of the group tax sharing corporation, etc., in the case where that business year, or the business year ending on the date of the end of that business year of a group tax sharing corporation that has a group tax sharing full controlling interest with the group tax sharing corporation, etc. or the other group tax sharing corporation on that date, is a business year for which the provisions of paragraph (1) or (4) were applied (for a group tax sharing subsidiary corporation, limited to one ending on the date of the end of the business year prescribed in those provisions of the group tax sharing parent corporation that has a group tax sharing full controlling interest with the group tax sharing corporation, etc. or the other group tax sharing corporation on the date of the end of that business year); the same applies hereinafter in this paragraph and the following paragraph) of the group tax sharing corporation, etc. or of another group tax sharing corporation that has a group tax sharing full controlling interest with the group tax sharing corporation, etc. on the date of the end of that covered business year (hereinafter referred to as an "other group tax sharing corporation" in this paragraph), the treatment in that covered business year of the group tax sharing corporation, etc. is as specified in each of the following items according to the category listed in that item.

a group tax sharing corporation referred to in paragraph (8), item (iii): in the calculation of the creditable tax amount prescribed in that item or the group tax sharing carryforward credit upper limit prescribed in item (xvii) of that paragraph for that covered business year, the amount equivalent to 25 percent of the amount specified by Cabinet Order as the amount of corporation tax that would be calculated pursuant to the provisions of Article 66 of the Corporation Tax Act and Articles 67-2 and 68 if the total loss increase (in the calculation of the group tax sharing carryforward credit upper limit prescribed in that item, the amount calculated pursuant to the provisions of Cabinet Order as the loss increase amount of each corporation attributable to the group tax sharing corporation, etc. out of that total loss increase) were deemed to be the amount of income of the group tax sharing corporation, etc. for that covered business year and those provisions were applied to that amount of income (if the case falls under any of the following cases, the amount obtained by adding the amount specified in each of the following) is added to the amount listed in item (iii), (b) of that paragraph or the amount listed in item (xvii), (a) of that paragraph;

the case listed in paragraph (8), item (ix), (a): the amount calculated by multiplying the amount specified by that Cabinet Order by the rate specified in (a)(1) or (2) of that item according to the category of business year listed in (a)(1) or (2) of that item (for a business year that falls under both a business year listed in (a)(1) and a business year listed in (a)(2) of that item, the sum of the rates specified in (a)(1) and (2) of that item);

the case listed in paragraph (8), item (ix), (b): the amount calculated by multiplying the amount specified by that Cabinet Order by the rate specified in (b)(1) or (2) of that item according to the category of business year listed in (b)(1) or (2) of that item.

a corporation other than the corporation listed in the preceding item: in the calculation of the upper limit of the credit under paragraph (1) or the upper limit of the credit for small and medium sized enterprises, etc. under paragraph (4) or (7) for that covered business year, the amount equivalent to the amount of corporation tax that would be calculated if the loss increase amount of each corporation pertaining to the group tax sharing corporation, etc. out of the total loss increase were deemed to be the amount of income of the group tax sharing corporation, etc. for that covered business year and the provisions of Article 66 of the Corporation Tax Act and Articles 67-2 and 68 were to be applied to that amount of income is added to the corporation tax before adjustment on income for that covered business year.

In applying the provisions of the preceding paragraph, if the loss increase amount of each corporation pertaining to a business year of past application, etc. in the covered business year of a group tax sharing corporation, etc. prescribed in that paragraph differs from the finalized amount of each deficit increase (meaning the amount stated as the loss increase amount of each corporation pertaining to that business year of past application, etc. in the most recent of the documents attached to the final return, etc. or amended return form for that business year of past application, etc. filed on or before the date of the end of that covered business year and the documents attached to the written notice of reassessment prescribed in Article 28, paragraph (2) of the Act on General Rules for National Taxes pertaining to a reassessment under the provisions of Article 24 or 26 of that Act made on or before that date; the same applies hereinafter in this paragraph), the finalized amount of each deficit increase is deemed to be the loss increase amount of each corporation pertaining to that business year of past application, etc.

In the case where, at the end of each business year of a domestic corporation that files a blue return (hereinafter referred to as "each target business year" in this paragraph), the provisions of paragraph (8), item (vi) or (vii) have been applied with regard to the application of the provisions of paragraph (1) or (4) in the past applied business year, or in the business year ending on the date of the end of that past applied business year (hereinafter referred to as the "past applied business year, etc." in this paragraph), of the domestic corporation or of another domestic corporation (limited to another domestic corporation that has a group tax sharing full controlling interest with the domestic corporation on the date of the end of the business year of the domestic corporation for which the provisions of paragraph (1) or (4) were applied (limited to a business year ending on the date of the end of the business year prescribed in those provisions of the group tax sharing parent corporation pertaining to the domestic corporation; hereinafter referred to as the "past applied business year" in this paragraph); hereinafter referred to as an "other applicable domestic corporation" in this paragraph), if the sum of the adjusted creditable amount (meaning the lesser of the amount listed in item (iii), (a) of that paragraph in the past applied business year and the amount obtained by deducting, from the amount listed in (b) of that item in the past applied business year, the equivalent amount prescribed in item (vii) of that paragraph that was to be added to the amount of corporation tax pursuant to the provisions of that item with respect to the past applied business year, etc. of the domestic corporation or the other applicable domestic corporation; the same applies in the following paragraph and paragraph (16)) and the tax credit excess already recaptured (meaning the sum of the excess creditable tax amount prescribed in item (vi), (a) of paragraph (8) in the case where the provisions of that item apply with respect to the past applied business year, etc. of the domestic corporation or the other applicable domestic corporation and the equivalent amount prescribed in item (vii) of that paragraph that was to be added to the amount of corporation tax pursuant to the provisions of that item; the same applies hereinafter up to paragraph (16)) (if the provisions of this paragraph have already applied, in each business year of the domestic corporation that began before the first day of each target business year concerned, with respect to the tax credit excess already recaptured pertaining to that past applied business year, etc., excluding the sum of the deducted amounts prescribed in this paragraph that served as the basis for the calculation of the amount to be deducted pursuant to the provisions of this paragraph in those business years; hereinafter referred to as the "amount for adjustment" in this paragraph) exceeds the initially reported amount eligible for tax credit (meaning the amount stated in the document attached to the final return, etc. for the past applied business year of the domestic corporation as the creditable tax amount prescribed in paragraph (8), item (iii) in that past applied business year; the same applies hereinafter in this paragraph), the amount equivalent to the amount calculated by multiplying the amount obtained by deducting the initially reported amount eligible for tax credit from that amount for adjustment (if that amount exceeds the tax credit excess already recaptured, that tax credit excess already recaptured) by the credit allocation ratio pertaining to that past applied business year of the domestic corporation is deducted from the corporation tax before adjustment on the income of the domestic corporation for each target business year concerned (excluding the amount to be deducted from that corporation tax before adjustment pursuant to the provisions of this paragraph as applied mutatis mutandis pursuant to paragraph (2) of the following Article or Article 42-5, paragraph (3), item (ii)).

In applying the provisions of the preceding paragraph, if the base amount for adjustment (meaning the sum of the adjusted creditable amount and the tax credit excess already recaptured; the same applies hereinafter in this paragraph) or the credit allocation ratio pertaining to each target business year referred to in that paragraph of the domestic corporation referred to in that paragraph differs from the initially reported base amount for adjustment or the initially reported credit allocation ratio (meaning, respectively, the amount stated in the document attached to the final return, etc. for each target business year concerned as the base amount for adjustment pertaining to each target business year concerned, or the ratio stated in the document attached to that final return, etc. as the credit allocation ratio pertaining to each target business year concerned; the same applies hereinafter in this paragraph), the initially reported base amount for adjustment or the initially reported credit allocation ratio is deemed to be the base amount for adjustment or the credit allocation ratio pertaining to each target business year concerned referred to in the preceding paragraph.

The provisions of paragraph (14) apply only if a document stating the adjusted creditable amount and the tax credit excess already recaptured that serve as the basis for the calculation of the amount to be deducted under the provisions of that paragraph, the amount to be deducted, and the details of the calculation of those amounts is attached to the final return, etc. for each target business year referred to in that paragraph.

If the provisions of Article 64-5, paragraph (8) of the Corporation Tax Act apply in the eligible business year of a group tax sharing corporation referred to in paragraph (8), the provisions of items (iv) through (vii) and items (xiv) through (xvi) of paragraph (8) do not apply to that eligible business year and to the business year subject to the carried-over application prescribed in item (xii) of that paragraph for which that eligible business year is the business year in which an excess arose prescribed in item (xiii), (a) of that paragraph. In this case, those provisions are deemed not to apply with respect to the covered business year prescribed in paragraph (12) of a group tax sharing corporation, etc. prescribed in that paragraph for which that eligible business year is the business year of past application, etc. prescribed in that paragraph, or with respect to each target business year referred to in paragraph (14) of a domestic corporation referred to in that paragraph for which that eligible business year is the past applied business year prescribed in that paragraph.

If the provisions of Article 64-5, paragraph (8) of the Corporation Tax Act apply in the covered business year prescribed in paragraph (12) of a group tax sharing corporation referred to in that paragraph or in each target business year referred to in paragraph (14) of a domestic corporation referred to in that paragraph, the provisions of paragraph (13) or (15) do not apply to that covered business year or each target business year concerned.

In this Article and the following Article, the meanings of the terms listed in the following items are as prescribed respectively in those items:

amount of experimental research expenses: The sum of the following amounts (if there is an amount received from another person (including, where the corporation is a foreign corporation, the head office, etc. prescribed in Article 138, paragraph (1), item (i) of the Corporation Tax Act; the same applies in item (xiv)) to cover the expenses pertaining to those amounts, the amount obtained by deducting the amount so received, and excluding, where the corporation is a domestic corporation, the amount of expenses pertaining to the business that the corporation conducts through a foreign office or similar establishment prescribed in Article 69, paragraph (4), item (i) of that Act);

the amount of the following expenses (excluding any amount that falls under the amount listed in Article 22, paragraph (3), item (i) of the Corporation Tax Act) that is included in deductible expenses in calculating the amount of income for each business year;

expenses required for experimental research relating to the manufacture of products or to the improvement, devising or invention of technology (limited to experimental research conducted to obtain new knowledge or to devise a new application of available knowledge) (excluding, where, of the amount for which accounting as an expense or loss has been made as research and development expenses, there is an amount of expenses that should be treated as an amount required for the acquisition of fixed assets prescribed in (b) or an amount of expenses that become deferred assets prescribed in (b), the depreciation allowance for those fixed assets or deferred assets, and losses from their retirement and losses from their transfer; the same applies in (2)), which are specified by Cabinet Order;

expenses required for experimental research specified by Cabinet Order as experimental research relating to the development of new services to be provided for consideration, which are specified by Cabinet Order.

of the amount of expenses listed in (a)(1) or (2) for which accounting as an expense or loss has been made as research and development expenses in each business year, the amount of expenses that should be treated as an amount required for the acquisition of inventory assets or fixed assets (excluding fixed assets that, at the time they are put to use for business, are put to use for the experimental research prescribed in (a)(1) or the experimental research specified by Cabinet Order prescribed in (a)(2)), or the amount of expenses that become deferred assets (excluding deferred assets pertaining to expenses paid for the experimental research prescribed in (a)(1) or the experimental research specified by Cabinet Order prescribed in (a)(2)).

corporation tax before adjustment: The amount of corporation tax calculated without applying the following provisions (excluding the amount of incidental taxes prescribed in Article 2, item (iv) of the Act on General Rules for National Taxes);

the provisions of this Article through Article 42-5, Article 42-6, paragraphs (2) and (3), Article 42-9, Article 42-10, paragraph (2), Article 42-11, paragraph (2), Article 42-11-2, paragraph (2), Article 42-12, paragraph (2), Article 42-12-2, Article 42-12-4, paragraphs (2) and (3), Article 42-12-5, Article 42-12-6, paragraphs (2) through (4), (6) and (7), Article 42-12-7, paragraphs (2) and (3), and Article 42-14, paragraph (1);

beyond what is listed in (a), the provisions specified by Cabinet Order as provisions that provide for special provisions on the calculation of the amount of corporation tax;

the provisions of Articles 67 through 70-2 and Articles 144 through 144-2-3 of the Corporation Tax Act.

amount of credit-eligible experimental research expenses: The sum of the following amounts out of the amount of experimental research expenses;

the amount equivalent to 50 percent (70 percent for a business year beginning before April 1, 2027 (for the eligible business year of a group tax sharing corporation referred to in paragraph (8), item (iii), the eligible business year of the group tax sharing corporation ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning before that date), and 60 percent for a business year beginning within the period from April 1, 2027 to March 31, 2028 (for the eligible business year of a group tax sharing corporation referred to in that item, the eligible business year of the group tax sharing corporation ending on the date of the end of a business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation beginning within that period)) of the amount of experimental research expenses pertaining to experimental research outsourced abroad;

the amount of experimental research expenses pertaining to experimental research other than experimental research outsourced abroad.

ratio of increase or decrease in experimental research expenses: The ratio of the amount of increase or decrease in experimental research expenses (meaning the amount obtained by subtracting the amount of comparative experiment and research expenses from the amount of experimental research expenses for the business year prescribed in paragraph (1) or (4) (hereinafter referred to as the "applicable business year" in this paragraph)) to that amount of comparative experiment and research expenses;

business year of establishment: The business year that includes the date of incorporation (for the corporations listed below, the date specified for each of them below) (excluding the business year that includes the date of merger of a merging corporation and other business years specified by Cabinet Order);

a foreign corporation prescribed in Article 2, item (iv) of the Corporation Tax Act: the date on which it came to have a permanent establishment;

a public interest corporation, etc. or an association or foundation without juridical personality that has newly started a profit-making business: the date on which it started that business;

a public interest corporation, etc. conducting a profit-making business that had fallen under a public service corporation: the date on which it came to fall under a public interest corporation, etc.;

an ordinary corporation or a cooperative, etc. that had fallen under a public service corporation or a public interest corporation, etc. not conducting a profit-making business: the date on which it came to fall under an ordinary corporation or a cooperative, etc.

amount of comparative experiment and research expenses: The amount calculated by dividing the sum of the amounts of experimental research expenses for each business year that began within the period from the day three years before the first day of the covered business year (meaning the business year prescribed in paragraph (1), (4) or (7) (for the eligible business year of a group tax sharing corporation referred to in paragraph (8), item (iii), the business year prescribed in paragraph (1), (4) or (7) of the group tax sharing parent corporation pertaining to the group tax sharing corporation); the same applies hereinafter in this item) to the day before the first day of the covered business year (if the number of months in that business year differs from the number of months in the covered business year, the amount calculated by multiplying that amount of experimental research expenses by the number of months in the covered business year and dividing the result by the number of months in that business year) by the number of business years that began within that period (zero, in the case specified by Cabinet Order among the cases where the first day of the eligible business year of a group tax sharing corporation referred to in paragraph (8), item (iii) is the date of incorporation of the group tax sharing corporation);

ratio of experimental research expenses: The ratio of the amount of experimental research expenses for the applicable business year to the average sales amount;

small and medium sized enterprise: A corporation specified by Cabinet Order as a corporation falling under the category of small and medium sized enterprises;

excluded business operator: A corporation for which the amount calculated by dividing the sum of the amounts of income for each business year that ended within three years before the first day of that business year (hereinafter referred to as the "reference business year" in this item) by the total number of months in each reference business year and multiplying the result by 12 (if there is a circumstance specified by Cabinet Order, such as that three years have not elapsed since its incorporation, that the provisions of Article 80 of the Corporation Tax Act have already been applied to the corporation tax on income for a reference business year, that a merger, company split or capital contribution in kind was carried out in a reference business year, or that the corporation fell under a group tax sharing corporation in a reference business year, the amount calculated pursuant to the provisions of Cabinet Order as the amount obtained by making adjustments to the calculated amount according to the details of that circumstance) exceeds 1.5 billion yen;

group tax sharing excluded business operator: A corporation that is a group tax sharing corporation, in the case where, on the date of the end of each business year of that corporation, any of the other group tax sharing corporations that have a group tax sharing full controlling interest with that corporation falls under an excluded business operator (excluding one specified by Cabinet Order as an excluded business operator that came to have a group tax sharing full controlling interest with the group tax sharing parent corporation pertaining to that corporation on or after the first day of the business year of that group tax sharing parent corporation that includes that date);

agricultural cooperative, etc.: An agricultural cooperative, a federation of agricultural cooperatives, a small and medium sized enterprise cooperative, a commercial and industrial association and a federation of commercial and industrial associations that are associations with capital contributions, a coastal shipping association, a federation of coastal shipping associations, an environmental health business association that is an association with capital contributions, a fishery cooperative, a federation of fishery cooperatives, a fishery processing cooperative, a federation of fishery processing cooperatives, a forestry cooperative, and a federation of forestry cooperatives;

carried-over excess of the tax credit limit: The sum of the amounts, out of the maximum credit for small and medium sized enterprises, etc. prescribed in paragraph (4) of a 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 that paragraph (if there is an amount already deducted from the corporation tax before adjustment, pursuant to the provisions of paragraph (7), in those business years, the remaining amount after deducting that amount);

combined ratio of increase or decrease in experimental research expenses: The ratio of the amount obtained by subtracting the total comparative experiment and research expenses (meaning the sum of the amounts of comparative experiment and research expenses of the group tax sharing corporation and the other group tax sharing corporations; the same applies hereinafter in this item) from the sum of the amounts of experimental research expenses for the eligible business year of a group tax sharing corporation referred to in paragraph (8), item (iii) and for the other business years of the other group tax sharing corporations referred to in (a) of that item, to that total comparative experiment and research expenses;

combined ratio of experimental research expenses: The ratio of the sum of the amounts of experimental research expenses for the eligible business year of a group tax sharing corporation referred to in paragraph (8), item (iii) and for the other business years of the other group tax sharing corporations referred to in (a) of that item, to the sum of the average sales amounts of the group tax sharing corporation and the other group tax sharing corporations;

average sales amount: The amount calculated pursuant to the provisions of Cabinet Order as the average amount of the sales amounts (meaning revenue from the sale of inventory assets or other amounts specified by Cabinet Order) for the applicable business year and each business year that began within the period from the day three years before the first day of the applicable business year (for the eligible business year of a group tax sharing corporation referred to in paragraph (8), item (iii), the applicable business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation) to the day before the first day of the applicable business year;

experimental research outsourced abroad: Experimental research specified by Cabinet Order as experimental research conducted outside Japan, among the experimental research outsourced to another person.

The number of months referred to in the preceding paragraph is calculated in accordance with the calendar, and any fraction of less than one month is counted as one month.

The provisions of paragraphs (1) and (4) apply only if a document stating the amount of credit-eligible experimental research expenses, the amount of experimental research expenses, the amount to be deducted, and the details of the calculation of that amount, which are subject to the deduction under those provisions, 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). In this case, the amount of credit-eligible experimental research expenses serving as the basis for the calculation of the amount to be deducted pursuant to those provisions is limited to the amount of credit-eligible experimental research expenses stated in the document attached to the final return, etc.

The provisions of paragraph (7) apply only if a written statement of the carried-over excess of the tax credit limit is attached to the final return prescribed in Article 2, item (xxxi) of the Corporation Tax Act for each business year from the business year in which the provisions of paragraph (4) were applied onward, and a document stating the carried-over excess of the tax credit limit, the amount to be deducted, and the details of the calculation of that amount, which are subject to the deduction under paragraph (7), is attached to the final return, etc. for the business year for which the application of the provisions of that paragraph is sought (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).

If the provisions of paragraph (1), (4), (7) or (14) apply, with regard to the deduction from the amount of corporation tax under the provisions of Part II, Chapter I, Section 2, Subsection 2 or Part III, Chapter II, Section 2 (excluding Article 143) of the Corporation Tax Act (hereinafter referred to as the "Corporation Tax Act tax credit provisions" in this paragraph) and the deduction from the amount of corporation tax under the special tax credit provisions (meaning the provisions of paragraphs (1), (4), (7) and (14); the same applies hereinafter in this paragraph and the following paragraph), the deduction under the special tax credit provisions is to be made first, and then the deduction under the Corporation Tax Act tax credit provisions is to be made in the order prescribed in Article 70-2 or 144-2-3 of that Act.

The provisions of Part II, Chapter I (excluding Section 2, Subsection 2) and Part III, Chapter II (excluding Section 2) of the Corporation Tax Act apply as follows where the provisions of paragraph (1), (4), (7) or (14) apply:

the amount of corporation tax prescribed in Article 67, paragraph (3) of the Corporation Tax Act is the amount obtained by deducting, from that amount of corporation tax, the amount to be deducted pursuant to the special tax credit provisions;

the amount listed in Article 72, paragraph (1), item (ii) of the Corporation Tax Act is the amount of corporation tax that would be calculated if the period prescribed in that paragraph (for a group tax sharing subsidiary corporation, the period prescribed in paragraph (5), item (i) of that Article) were deemed to be one business year and the provisions of Part II, Chapter I, Section 2 of that Act (excluding Article 67, Article 68, paragraph (3) and Article 70) and the special tax credit provisions were to be applied to the amount of income listed in paragraph (1), item (i) of that Article;

the amount listed in Article 74, paragraph (1), item (ii) of the Corporation Tax Act is the amount of corporation tax calculated by applying the provisions of Part II, Chapter I, Section 2 of that Act and the special tax credit provisions to the amount of income listed in item (i) of that paragraph;

the amount listed in Article 144-4, paragraph (1), item (iii) or (iv) or paragraph (2), item (ii) of the Corporation Tax Act is the amount of corporation tax that would be calculated if the period prescribed in paragraph (1) or (2) of that Article were deemed to be one business year and the provisions of Part III, Chapter II, Section 2 of that Act (excluding Article 144 (limited to the part that applies mutatis mutandis the provisions of Article 68, paragraph (3) of that Act)) and the special tax credit provisions were to be applied to the amount of income pertaining to domestic source income listed in paragraph (1), item (i) or (ii) or paragraph (2), item (i) of that Article;

the amount listed in Article 144-6, paragraph (1), item (iii) or (iv) or paragraph (2), item (ii) of the Corporation Tax Act is the amount of corporation tax calculated by applying the provisions of Part III, Chapter II, Section 2 of that Act and the special tax credit provisions to the amount of income pertaining to domestic source income listed in paragraph (1), item (i) or (ii) or paragraph (2), item (i) of that Article.

With regard to the application of the provisions of Articles 67 and 69 of the Corporation Tax Act where the provisions of paragraph (8), item (vi), (b) or item (vii) apply, the phrase "paragraphs (1), (2) and (6) of the preceding Article and Article 69, paragraph (19) (Foreign Tax Credit) (including as applied mutatis mutandis pursuant to paragraph (23) of that Article; the same applies in paragraph (3))" in Article 67, paragraph (1) of that Act is deemed to be replaced with "Article 42-4, paragraph (8), item (vi), (b) and item (vii) of the Act on Special Measures Concerning Taxation (Special Corporation Tax Credit Where Experimental Research Is Conducted)", the phrase "paragraphs (1), (2) and (6) of the preceding Article and Article 69, paragraph (19)" in paragraph (3) of that Article with "Article 42-4, paragraph (8), item (vi), (b) and item (vii) of the Act on Special Measures Concerning Taxation", and the phrase "Article 66, paragraphs (1) through (3) and (6)" in Article 69, paragraph (19) of that Act with "Article 42-4, paragraph (8), item (vi), (b) and item (vii) of the Act on Special Measures Concerning Taxation (Special Corporation Tax Credit Where Experimental Research Is Conducted)".

With regard to the application of the provisions of Part II, Chapter I (excluding Section 2) of the Corporation Tax Act where the provisions of paragraph (8), item (vi), (b) or item (vii) apply, the amount listed in Article 74, paragraph (1), item (ii) of that Act is the amount of corporation tax calculated by applying the provisions of that Section and the provisions of paragraph (8), item (vi), (b) and item (vii) to the amount of income listed in item (i) of that paragraph.

Beyond what is provided for in paragraph (19) through the preceding paragraph, the calculation of the amount of comparative experiment and research expenses in the case where the corporation seeking the application of the provisions of paragraph (1), (4) or (7) is a merging corporation, a splitting corporation or a succeeding corporation in a company split, a corporation making a capital contribution in kind or a corporation receiving a capital contribution in kind, or a corporation making a distribution in kind or a corporation receiving a distribution in kind, matters concerning special provisions on filing returns or refunds under the provisions of Part II, Chapter I, Section 3 of the Corporation Tax Act and other matters concerning the application of the provisions of that Act and the Local Corporation Tax Act in the case where the provisions of paragraph (8), item (vi), (b) or item (vii) apply, and other necessary matters concerning the application of the provisions of paragraphs (1) through (18) are specified by Cabinet Order.