②In applying the provisions of the preceding paragraph, if the replacement assets for that business year (including assets deemed to be replacement assets pursuant to the provisions of the following paragraph) include land, etc., and the area of the land, etc. calculated for each category, where the land, etc. is categorized according to the right-hand column of each item of the table in the preceding paragraph, exceeds the area calculated pursuant to the provisions of Cabinet Order on the basis of the area of the land, etc. listed in the left-hand column of the relevant item that was transferred during that business year, then, notwithstanding the provisions of that paragraph, the portion of the land, etc. that is a replacement asset corresponding to the area of the excess is not to fall under the replacement asset referred to in that paragraph.

③In the case prescribed in paragraph (1), if the corporation has acquired an asset listed in the right-hand column of the relevant item within one year before the day on which the business year that includes the day on which it transferred an asset it holds that is listed in the left-hand column of the items of the table in that paragraph begins (or, where there are unavoidable circumstances specified by Cabinet Order, such as the period required for the construction of a factory, etc. normally exceeding one year, within the period specified by Cabinet Order), and has, within one year from the day of the acquisition, used the acquired asset for the corporation's business within the area prescribed in the right-hand column of the relevant item (excluding the case where it has ceased to use it for that business by the earlier of the day of the end of that business year and the day on which one year has elapsed from the day of the acquisition), or is expected to use it as such, the corporation may, limited to the assets for which it has, pursuant to the provisions of Cabinet Order, notified the district director with jurisdiction over the place for tax payment that it seeks the application of the provisions of this paragraph, receive the application of the provisions of paragraph (1) by deeming those assets to be replacement assets falling under the provisions of that paragraph.

④If a corporation that has received the application of the provisions of paragraph (1) does not use, or has ceased to use, the replacement asset prescribed in that paragraph (excluding one that falls under the assets subject to market value assessment prescribed in Article 64-11, paragraph (1), Article 64-12, paragraph (1) or Article 64-13, paragraph (1) of the Corporation Tax Act to which those provisions have been applied in a business year on or after the business year in which the provisions of paragraph (1) were applied) for the corporation's business within the area prescribed in the right-hand column of the relevant item of the table in paragraph (1) (for the assets listed in the right-hand column of item (iv) of that table, for the business of the corporation) within one year from the day on which it acquired the replacement asset (excluding the case where it transfers the replacement asset to a merging corporation, a successor corporation in a company split, a corporation receiving a capital contribution in kind or a corporation receiving a distribution in kind (hereinafter referred to in this Article as a "merging corporation, etc.") through a qualified merger, a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (hereinafter referred to in this Article as a "qualified merger, etc.")), the amount equivalent to the amount included in deductible expenses with regard to that replacement asset pursuant to the provisions of that paragraph is, pursuant to the provisions of Cabinet Order, included in gross profit in calculating the amount of income for the business year that includes the day on which one year has elapsed from the day of the acquisition or the day on which it ceased to use the asset (or, where it has ceased to use the replacement asset for its business because it transferred the replacement asset through a merger that does not fall under a qualified merger, the business year that includes the day before the day of that merger).

⑤The provisions of paragraph (1) apply only if the final return, etc. contains a statement concerning the inclusion in deductible expenses of the amount to be included in deductible expenses pursuant to the provisions of that paragraph, and a written statement concerning the calculation of the amount to be included in deductible expenses and any other documents specified by Order of the Ministry of Finance are attached to that final return, etc.

⑥Even in the case where a final return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment, the district director may apply the provisions of paragraph (1), but only if a document containing that statement, and the written statement and the documents specified by Order of the Ministry of Finance referred to in that paragraph, have been submitted.

⑦The provisions listed in the items of Article 53, paragraph (1) do not apply to a replacement asset to which the provisions of paragraph (1) have been applied.

⑧In applying the provisions of laws and regulations concerning corporation tax to a replacement asset to which the provisions of paragraph (1) have been applied, the amount included in deductible expenses in calculating the amount of income for each business year pursuant to the provisions of that paragraph (excluding the amount included in gross profit in calculating the amount of income for each business year pursuant to the provisions of paragraph (4)) is not included in the acquisition price of that replacement asset.

⑨If a corporation has made a transfer prescribed in paragraph (1) within the applicable period and carries out, in the business year that includes the day of the transfer, a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (limited to one carried out on or after that day; hereinafter referred to in this paragraph and paragraph (11) as a "qualified company split, etc."), and has acquired an asset listed in the right-hand column of the relevant item of the table in paragraph (1) pertaining to the transferred asset during the period from the beginning of that business year until immediately before the qualified company split, etc., and transfers the replacement asset (limited to one that has been used for the corporation's business within the area prescribed in the right-hand column of the relevant item and has been continuously used for that business until immediately before the qualified company split, etc., or one that is expected to be used, within one year from the day of the acquisition, by the successor corporation in a company split, the corporation receiving a capital contribution in kind or the corporation receiving a distribution in kind pertaining to the qualified company split, etc. (hereinafter referred to in this paragraph as a "successor corporation in a split, etc.") for the business within the area prescribed in the right-hand column of the relevant item that it receives the transfer of through the qualified company split, etc. (for the assets listed in the right-hand column of item (iv) of that table, for the business of which it receives the transfer)) to the successor corporation in a split, etc. through the qualified company split, etc., then, only if, with regard to the replacement asset (limited to a replacement asset in the case where the corporation has, pursuant to the provisions of Cabinet Order, notified the district director with jurisdiction over the place for tax payment that it seeks the application of the provisions of this paragraph), the corporation has reduced its book value within the limit of the amount equivalent to the reduction entry limit pertaining to that replacement asset, the amount equivalent to the amount so reduced is included in deductible expenses in calculating the amount of income for that business year.

⑩The provisions of paragraph (2) apply mutatis mutandis where the provisions of the preceding paragraph are applied, the provisions of paragraph (3) apply mutatis mutandis in the case prescribed in the preceding paragraph, and the provisions of paragraphs (7) and (8) apply mutatis mutandis to a replacement asset to which the provisions of the preceding paragraph have been applied. In this case, the technical replacement of terms concerning the application of the provisions of paragraphs (2) and (3) is specified by Cabinet Order.

⑪The provisions of paragraph (9) apply only if the corporation seeking the application of the provisions of that paragraph has submitted to the district director with jurisdiction over the place for tax payment, within two months after the day of the qualified company split, etc., a document stating the reduced amount prescribed in that paragraph and other matters specified by Order of the Ministry of Finance.

⑫If a merging corporation, etc. that has received, through a qualified merger, etc., the transfer of a replacement asset prescribed in paragraph (1) or (9) to which those provisions have been applied (excluding one that falls under the assets subject to market value assessment prescribed in Article 64-11, paragraph (1), Article 64-12, paragraph (1) or Article 64-13, paragraph (1) of the Corporation Tax Act to which those provisions have been applied in a business year on or after the business year in which the provisions of paragraph (1) or (9) were applied) does not use, or has ceased to use, the replacement asset, within one year from the day on which the merged corporation, splitting corporation, corporation making a capital contribution in kind or corporation making a distribution in kind pertaining to the qualified merger, etc. (hereinafter referred to in this Article as the "merged corporation, etc.") acquired the replacement asset, for the business within the area prescribed in the right-hand column of the relevant item of the table in paragraph (1) that the merging corporation, etc. received the transfer of through the qualified merger, etc. (for the assets listed in the right-hand column of item (iv) of that table, for the business of which it received the transfer) (excluding the case where it transfers the replacement asset to a merging corporation, etc. through a qualified merger, etc.), the amount equivalent to the amount included in deductible expenses of the merged corporation, etc. with regard to that replacement asset pursuant to the provisions of paragraph (1) or (9) is, pursuant to the provisions of Cabinet Order, included in gross profit in calculating the amount of income for the business year of the merging corporation, etc. that includes the day on which one year has elapsed from the day of the acquisition or the day on which it ceased to use the asset (or, where it has ceased to use the replacement asset for its business because it transferred the replacement asset through a merger that does not fall under a qualified merger, the business year that includes the day before the day of that merger).

⑬If a merging corporation, etc. that has received the transfer of a replacement asset to which the provisions of paragraph (1) or (9) have been applied through a qualified merger, etc. applies the provisions of laws and regulations concerning corporation tax to that replacement asset, the amount that was not included in the acquisition price of that replacement asset by the merged corporation, etc. pertaining to the qualified merger, etc. is not included in the acquisition price of that replacement asset.

⑭In applying the provisions of paragraph (1) or (9) (limited to the part pertaining to item (iii) of the table in paragraph (1)), if the assets listed in the left-hand column of that item that a corporation has transferred fall under assets located within the area listed in item (i), and the assets listed in the right-hand column of item (iii) of that table that the corporation has acquired fall under assets located within the area listed in item (ii) or item (iii), or if the assets listed in the left-hand column of item (iii) of that table that a corporation has transferred fall under head office assets (meaning buildings and structures used as the head office or principal office of the corporation and land, etc. used as their site; hereinafter the same applies in this paragraph) located within the area listed in item (iii), and the assets listed in the right-hand column of item (iii) of that table that the corporation has acquired fall under head office assets located within the area listed in item (i), then the reduction entry limit prescribed in paragraph (1) pertaining to those acquired assets is, notwithstanding the provisions of that paragraph, to be the amount specified in the following items according to which of the areas listed in those items the assets are located within:

⑮Beyond what is specified in paragraph (2) through the preceding paragraph (excluding paragraph (9)), the calculation of the amount to be included in deductible expenses pursuant to the provisions of paragraph (1) in the case where the asset transferred as referred to in that paragraph falls under the assets listed in the left-hand column of two or more items of the table in that paragraph, and other necessary matters concerning the application of the provisions of that paragraph and paragraph (9) are specified by Cabinet Order.

⑯With regard to the terms used in this Article and the following Article, the following provisions apply: