①If a corporation that files a blue return pays salary or other wages to domestic employees in a business year that begins during the period from April 1, 2024 to March 31, 2027 (excluding the business year of establishment, the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation) and falls under a specified corporation at the end of that business year, and the ratio of the amount obtained by deducting the corporation's comparative amount of salary or other wages paid to continuing employees from its amount of salary or other wages paid to continuing employees in that business year to that comparative amount of salary or other wages paid to continuing employees (referred to as the "rate of increase in salary or other wages paid to continuing employees" in item (i)) is 4 percent or more (if, at the end of that business year, the amount of stated capital or the amount of contributions of the corporation is 1 billion yen or more and the number of employees regularly employed by the corporation is 1,000 or more, limited to the case specified by Cabinet Order as a case where the corporation has published the policy on raising the amount of salary or other wages paid, the policy on building appropriate relationships with small and medium-sized contractors prescribed in Article 2, paragraph (5) of the Act on the Promotion of Small and Medium-Sized Contractor Enterprises (Act No. 145 of 1970) and other business partners, and other matters specified by Cabinet Order), the amount calculated by multiplying the corporation's credit-eligible increase in salaries, etc. paid to employees for that business year by 10 percent (if the corporation meets the requirements listed in the following items in that business year, the rate obtained by adding to 10 percent the rate specified in each of those items (if the corporation meets all of the requirements listed in the following items in that business year, the sum of the rates specified in those items)) (hereinafter referred to as the "maximum tax credit" in this paragraph) is deducted from the corporation tax before adjustment of the corporation on the income for that business year (meaning the corporation tax before adjustment prescribed in Article 42-4, paragraph (19), item (ii); the same applies hereinafter in this Article). In this case, if the maximum tax credit exceeds the amount equivalent to 20 percent of the corporation tax before adjustment of the corporation on the income for that business year, the amount to be deducted is limited to the amount equivalent to that 20 percent.

②If a small and medium sized enterprise prescribed in Article 42-4, paragraph (19), item (vii) (excluding one that falls under an excluded business operator prescribed in item (viii) of that paragraph or a group tax sharing excluded business operator prescribed in item (viii)-2 of that paragraph) or an agricultural cooperative, etc. prescribed in item (ix) of that paragraph, that files a blue return (hereinafter referred to as a "small and medium sized enterprise, etc." in this paragraph), pays salary or other wages to domestic employees in a business year that begins during the period from April 1, 2018 to March 31, 2027 (excluding a business year for which the provisions of the preceding paragraph are applied, the business year of establishment, the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation), and the ratio of the amount obtained by deducting the comparative amount of salaries, etc. paid to employees of the small and medium sized enterprise, etc. from its amount of salaries, etc. paid to employees in that business year to that comparative amount of salaries, etc. paid to employees (referred to as the "rate of increase in salaries, etc. paid to employees" in item (i)) is 1.5 percent or more, the amount calculated by multiplying the credit-eligible increase in salaries, etc. paid to employees of the small and medium sized enterprise, etc. for that business year by 15 percent (if the small and medium sized enterprise, etc. meets the requirements listed in the following items in that business year, the rate obtained by adding to 15 percent the rate specified in each of those items (if it meets all of the requirements listed in the following items in that business year, the sum of the rates specified in those items)) (hereinafter referred to as the "maximum credit for small and medium sized enterprises, etc." in this paragraph and paragraph (4), item (x)) is deducted from the corporation tax before adjustment of the small and medium sized enterprise, etc. on the income for that business year. In this case, if the maximum credit for small and medium sized enterprises, etc. exceeds the amount equivalent to 20 percent of the corporation tax before adjustment of the small and medium sized enterprise, etc. on the income for that business year, the amount to be deducted is limited to the amount equivalent to that 20 percent.

③If, in a business year (excluding the business year that includes the date of dissolution (other than dissolution due to a merger) and business years during liquidation) of a corporation that files a blue return, the amount of salaries, etc. paid to employees of the corporation exceeds its comparative amount of salaries, etc. paid to employees, and the corporation has a carried-over excess of the tax credit limit, the amount equivalent to that carried-over excess of the tax credit limit is deducted from the corporation tax before adjustment on the income for that business year. In this case, if the carried-over excess of the tax credit limit of the corporation for that business year exceeds the amount equivalent to 20 percent of the corporation tax before adjustment of the corporation on the income for that business year (if there is an amount to be deducted from the corporation tax before adjustment on the income for that business year pursuant to the provisions of the preceding two paragraphs in that business year, the remaining amount after deducting that amount), the amount to be deducted is limited to the amount equivalent to that 20 percent.

④In this Article, the meanings of the terms listed in the following items are as prescribed respectively in those items:

⑤The number of months referred to in item (ix) of the preceding paragraph is calculated in accordance with the calendar, and any fraction of less than one month is counted as one month.

⑥The provisions of paragraphs (1) and (2) apply only if a document stating the credit-eligible increase in salaries, etc. paid to employees (including, if the application of the provisions of paragraph (1) is sought, the amount of salary or other wages paid to continuing employees and the comparative amount of salary or other wages paid to continuing employees), 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 tax return, etc. (including an amended return or written request for reassessment, if one is filed to increase the amount to be deducted pursuant to those provisions). In this case, the credit-eligible increase in salaries, etc. paid to employees serving as the basis for the calculation of the amount to be deducted pursuant to paragraph (1) or (2) is limited to the credit-eligible increase in salaries, etc. paid to employees stated in the document attached to the tax return, etc.

⑦The provisions of paragraph (3) 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 for which the provisions of paragraph (2) 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 (3), is attached to the tax return, etc. for the business year for which the application of the provisions of paragraph (3) is sought (including an amended return or written request for reassessment, if one is filed to increase the amount to be deducted pursuant to the provisions of that paragraph).

⑧Beyond what is provided for in paragraph (4) through the preceding paragraph, the calculation of the comparative amount of salaries, etc. paid to employees in the case where a corporation seeking the application of the provisions of paragraphs (1) through (3) is a merging corporation, a splitting corporation or a successor 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, the determination of whether the requirements prescribed in those provisions are satisfied in the case where the comparative amount of salary or other wages paid to continuing employees or the comparative amount of salaries, etc. paid to employees is zero, and other necessary matters concerning the application of those provisions are specified by Cabinet Order.

⑨The provisions of Article 42-4, paragraphs (23) and (24) apply mutatis mutandis where the provisions of paragraphs (1) through (3) are applied. In this case, the phrase "paragraphs (1), (4), (7) and (14)" in paragraph (23) of that Article is deemed to be replaced with "Article 42-12-5, paragraphs (1) through (3)".