①Where a domestic corporation that files a blue return (excluding a resource development investment corporation other than a special investment corporation), in the designated period of each business year that includes a day within the period from April 1, 1973 to March 31, 2028 (hereinafter referred to in this paragraph and paragraph (8) as the "designated period") (excluding the business year that includes the day of dissolution and each business year during liquidation), acquires specified shares, etc. of a corporation listed in any of the following items (where that domestic corporation is a group tax sharing corporation, excluding those specified by Cabinet Order as other group tax sharing corporations with which that domestic corporation has a group tax sharing full controlling interest; hereinafter referred to in this Article as a "specified corporation") and continues to hold them until the end of the business year that includes the day of that acquisition, if, in preparation for losses from a decline in the value of those specified shares, etc., the domestic corporation sets aside as a reserve for losses on overseas investment, etc., for each specified corporation, by the method of accounting as an expense or loss, an amount not exceeding the amount calculated by multiplying the acquisition cost of those specified shares, etc. (excluding those to be transferred to the merging corporation through a merger (excluding a qualified merger)) by the percentage specified in that item (where the book value of those specified shares, etc. has been reduced in that business year, the amount obtained by deducting the amount equivalent to the amount, out of the amount so reduced, that has been included in deductible expenses in calculating the amount of income for that business year) (including where it sets aside the amount as a reserve for losses on overseas investment, etc. by the method of setting it aside as a reserve fund through the appropriation of surplus by the day on which the settlement of accounts for that business year is finalized), the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

②In the preceding paragraph, the meanings of the terms listed in the following items are as prescribed respectively in those items:

③Where, as of the end of each business year of the domestic corporation prescribed in paragraph (1), the amount of the reserve for losses on overseas investment, etc. pertaining to a specified corporation carried over from the preceding business year (where there are amounts that have been included, or are to be included, in gross profit by that day pursuant to the provisions of the following paragraph, or amounts that were included in gross profit by the end of the preceding business year pursuant to the provisions of this paragraph, the amount obtained by deducting those amounts; the same applies hereinafter in this Article) includes an amount for which five years have elapsed from the day following the end of the business year in which it was set aside (hereinafter referred to in this paragraph and the following paragraph as the "business year of accumulation") (hereinafter referred to in this paragraph as the "reserve amount past the deferral period"), then with regard to that reserve amount past the deferral period, for each amount into which it is divided by the business year of accumulation in which it was set aside, the amount equivalent to the amount calculated by multiplying the amount set aside as that reserve for losses on overseas investment, etc. that was included in deductible expenses pursuant to the provisions of paragraph (1) in calculating the amount of income for the business year of accumulation in which that divided amount was set aside by the number of months in each relevant business year and dividing the result by 60 (where the amount so calculated exceeds that divided amount, that divided amount) is, respectively, included in gross profit in calculating the amount of income for that business year.

④Where a domestic corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) comes to fall under any of the cases listed in the following items (excluding where it has transferred shares, etc. of a specified corporation through a qualified merger, a qualified company split, a qualified capital contribution in kind other than a qualified capital contribution in kind in the case listed in item (iii), or a qualified in-kind distribution), the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income for the business year that includes the day on which it came to fall under that case (in the case listed in item (ii), the business year that includes the day before the date of the merger). In this case, in the cases referred to in items (i) through (iii), item (v) or item (vii), out of the amounts into which the amount of the reserve for losses on overseas investment, etc. prescribed in those items is divided by the business year of accumulation in which they were set aside, the amounts are to be included in gross profit in order beginning with the amount with the earliest business year of accumulation.

⑤Where a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the amount of the reserve for losses on overseas investment, etc. as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or the day on which the written notification was submitted (where the day on which the written notification was submitted is after the end of the business year in which it discontinued filing returns by blue return, the end of that business year) is included in gross profit in calculating the amount of income for the business year that includes that day. In this case, the provisions of the preceding two paragraphs, paragraph (10), paragraph (13), paragraph (17) and paragraph (21) do not apply.

⑥The number of months referred to in paragraph (3) is calculated in accordance with the calendar, and a fraction of less than one month is counted as one month.

⑦The provisions of paragraph (1) apply only where the final return, etc. for the business year for which the corporation seeks the application of those provisions contains a statement of the inclusion in deductible expenses of the amount set aside as a reserve for losses on overseas investment, etc., and a written statement concerning the calculation of the amount so set aside and other documents specified by Order of the Ministry of Finance are attached to that final return, etc.

⑧Where a domestic corporation prescribed in paragraph (1), in the designated period of each business year that includes a day within the designated period (excluding each business year during liquidation), acquires the specified shares, etc. referred to in paragraph (2), item (vi) of a specified corporation and transfers those specified shares, etc. to a successor corporation in a company split, a corporation receiving a capital contribution in kind (excluding the corporation receiving a capital contribution in kind prescribed in paragraph (4), item (iii)) or a corporation receiving a distribution in kind through a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (hereinafter referred to in this paragraph and the following paragraph as a "qualified company split, etc."), if, in preparation for losses from a decline in the value of those specified shares, etc., treating the time immediately before the qualified company split, etc. as the end of that business year, it sets aside as a reserve for losses on overseas investment, etc., for each specified corporation, an amount not exceeding the amount equivalent to 20 percent (where the specified corporation pertaining to those specified shares, etc. is a resource exploration business corporation referred to in paragraph (2), item (iii) or a resource exploration investment corporation referred to in item (iv) of that paragraph, 50 percent) of the acquisition cost of those specified shares, etc. (where the book value of those specified shares, etc. has been reduced during the period from the beginning of that business year to that time immediately before, the amount obtained by deducting the amount equivalent to the amount, out of the amount so reduced, that is to be included in deductible expenses in calculating the amount of income for that business year), the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

⑨The provisions of the preceding paragraph apply only where the domestic corporation prescribed in that paragraph has submitted, within two months after the date of the qualified company split, etc., a document stating the amount of the reserve for losses on overseas investment, etc. referred to in that paragraph and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over the place for tax payment.

⑩Where a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) has transferred shares, etc. of a specified corporation to the merging corporation through a qualified merger, the amount of the reserve for losses on overseas investment, etc. immediately before the qualified merger is to be succeeded to by that merging corporation. In this case, the amount of the reserve for losses on overseas investment, etc. succeeded to by the merging corporation is deemed to be the amount of the reserve for losses on overseas investment, etc. referred to in that paragraph held by that merging corporation as of the date of the qualified merger.

⑪In the case referred to in the preceding paragraph, where the merging corporation referred to in that paragraph is not a person who may file the final return, etc. for the business year that includes the date of the qualified merger as a blue return, the amount of the reserve for losses on overseas investment, etc. as of the end of that business year is included in gross profit in calculating the amount of income for that business year.

⑫With regard to the application of the provisions of paragraph (3) for the business year of the merging corporation referred to in paragraph (10) that includes the date of the qualified merger, the amount of the reserve for losses on overseas investment, etc. carried over from the preceding business year is to include the amount of the reserve for losses on overseas investment, etc. deemed to be held by that merging corporation pursuant to the provisions of paragraph (10). In this case, where that merging corporation is a corporation that survives the merger, with regard to the amount of the reserve for losses on overseas investment, etc. deemed to be held by it, the phrase "the number of months in each relevant business year" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of the qualified merger to the end of the business year that includes that date".

⑬Where a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) or paragraph (8) has transferred all or part of the shares, etc. of a specified corporation pertaining to that reserve for losses on overseas investment, etc. to a successor corporation in a company split through a qualified company split, the amount calculated, pursuant to the provisions of Cabinet Order, as the amount pertaining to the shares, etc. so transferred, out of the amount of the reserve for losses on overseas investment, etc. immediately before the qualified company split (where it has transferred all of the shares, etc. of that specified corporation through that qualified company split, the amount of the reserve for losses on overseas investment, etc. pertaining to that specified corporation immediately before the qualified company split), is to be succeeded to by that successor corporation in a company split. In this case, the amount of the reserve for losses on overseas investment, etc. succeeded to by the successor corporation in a company split is deemed to be the amount of the reserve for losses on overseas investment, etc. referred to in paragraph (1) held by that successor corporation in a company split as of the date of the qualified company split.

⑭In the case referred to in the preceding paragraph, with regard to the business year of a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) that includes the date of the qualified company split (excluding that business year where that date is the first day of the business year of that corporation), the provisions of paragraph (3) apply by deeming the day before the date of the qualified company split to be the end of that business year. In this case, the phrase "the number of months in each relevant business year" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of the business year that includes the date of the qualified company split to the day before the date of the qualified company split".

⑮In the case referred to in paragraph (13), where the successor corporation in a company split referred to in that paragraph is not a person who may file the final return, etc. for the business year that includes the date of the qualified company split as a blue return, the amount of the reserve for losses on overseas investment, etc. as of the end of that business year is included in gross profit in calculating the amount of income for that business year.

⑯With regard to the application of the provisions of paragraph (3) for the business year of the successor corporation in a company split referred to in paragraph (13) that includes the date of the qualified company split, the amount of the reserve for losses on overseas investment, etc. carried over from the preceding business year is to include the amount of the reserve for losses on overseas investment, etc. deemed to be held by that successor corporation in a company split pursuant to the provisions of paragraph (13). In this case, where that successor corporation in a company split is not a corporation incorporated through that qualified company split, with regard to the amount of the reserve for losses on overseas investment, etc. deemed to be held by it, the phrase "the number of months in each relevant business year" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of the qualified company split to the end of the business year that includes that date".

⑰Where a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) or paragraph (8) has transferred all or part of the shares, etc. of a specified corporation pertaining to that reserve for losses on overseas investment, etc. to a corporation receiving a capital contribution in kind (excluding a corporation receiving a capital contribution in kind that is a foreign corporation) through a qualified capital contribution in kind, the amount calculated, pursuant to the provisions of Cabinet Order, as the amount pertaining to the shares, etc. so transferred, out of the amount of the reserve for losses on overseas investment, etc. immediately before the qualified capital contribution in kind (where it has transferred all of the shares, etc. of that specified corporation through that qualified capital contribution in kind, the amount of the reserve for losses on overseas investment, etc. pertaining to that specified corporation immediately before the qualified capital contribution in kind), is to be succeeded to by that corporation receiving a capital contribution in kind. In this case, the amount of the reserve for losses on overseas investment, etc. succeeded to by the corporation receiving a capital contribution in kind is deemed to be the amount of the reserve for losses on overseas investment, etc. referred to in paragraph (1) held by that corporation receiving a capital contribution in kind as of the date of the qualified capital contribution in kind.

⑱In the case referred to in the preceding paragraph, with regard to the business year of a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) that includes the date of the qualified capital contribution in kind (excluding that business year where that date is the first day of the business year of that corporation), the provisions of paragraph (3) apply by deeming the day before the date of the qualified capital contribution in kind to be the end of that business year. In this case, the phrase "the number of months in each relevant business year" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of the business year that includes the date of the qualified capital contribution in kind to the day before the date of the qualified capital contribution in kind".

⑲In the case referred to in paragraph (17), where the corporation receiving a capital contribution in kind referred to in that paragraph is not a person who may file the final return, etc. for the business year that includes the date of the qualified capital contribution in kind as a blue return, the amount of the reserve for losses on overseas investment, etc. as of the end of that business year is included in gross profit in calculating the amount of income for that business year.

⑳With regard to the application of the provisions of paragraph (3) for the business year of the corporation receiving a capital contribution in kind referred to in paragraph (17) that includes the date of the qualified capital contribution in kind, the amount of the reserve for losses on overseas investment, etc. carried over from the preceding business year is to include the amount of the reserve for losses on overseas investment, etc. deemed to be held by that corporation receiving a capital contribution in kind pursuant to the provisions of paragraph (17). In this case, where that corporation receiving a capital contribution in kind is not a corporation incorporated through that qualified capital contribution in kind, with regard to the amount of the reserve for losses on overseas investment, etc. deemed to be held by it, the phrase "the number of months in each relevant business year" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of the qualified capital contribution in kind to the end of the business year that includes that date".

（二十一）Where a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) or paragraph (8) has transferred all or part of the shares, etc. of a specified corporation pertaining to that reserve for losses on overseas investment, etc. to a corporation receiving a distribution in kind through a qualified in-kind distribution, the amount calculated, pursuant to the provisions of Cabinet Order, as the amount pertaining to the shares, etc. so transferred, out of the amount of the reserve for losses on overseas investment, etc. immediately before the qualified in-kind distribution (where it has transferred all of the shares, etc. of that specified corporation through that qualified in-kind distribution, the amount of the reserve for losses on overseas investment, etc. pertaining to that specified corporation immediately before the qualified in-kind distribution), is to be succeeded to by that corporation receiving a distribution in kind. In this case, the amount of the reserve for losses on overseas investment, etc. succeeded to by the corporation receiving a distribution in kind is deemed to be the amount of the reserve for losses on overseas investment, etc. referred to in paragraph (1) held by that corporation receiving a distribution in kind as of the date of the qualified in-kind distribution.

（二十二）In the case referred to in the preceding paragraph, with regard to the business year of a corporation that has set aside the reserve for losses on overseas investment, etc. referred to in paragraph (1) that includes the date of the qualified in-kind distribution (excluding that business year where that date is the first day of the business year of that corporation), the provisions of paragraph (3) apply by deeming the day before the date of the qualified in-kind distribution to be the end of that business year. In this case, the phrase "the number of months in each relevant business year" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of the business year that includes the date of the qualified in-kind distribution to the day before the date of the qualified in-kind distribution".

（二十三）In the case referred to in paragraph (21), where the corporation receiving a distribution in kind referred to in that paragraph is not a person who may file the final return, etc. for the business year that includes the date of the qualified in-kind distribution as a blue return, the amount of the reserve for losses on overseas investment, etc. as of the end of that business year is included in gross profit in calculating the amount of income for that business year.

（二十四）With regard to the application of the provisions of paragraph (3) for the business year of the corporation receiving a distribution in kind referred to in paragraph (21) that includes the date of the qualified in-kind distribution, the amount of the reserve for losses on overseas investment, etc. carried over from the preceding business year is to include the amount of the reserve for losses on overseas investment, etc. deemed to be held by that corporation receiving a distribution in kind pursuant to the provisions of paragraph (21). In this case, with regard to the amount of the reserve for losses on overseas investment, etc. deemed to be held by that corporation receiving a distribution in kind, the phrase "the number of months in each relevant business year" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of the qualified in-kind distribution to the end of the business year that includes that date".

（二十五）Beyond what is provided for in paragraph (7), the treatment of the amount of the reserve for losses on overseas investment, etc. in the case where shares, etc. of the merging corporation or the successor corporation in a company split have been delivered through a merger or company split of a specified corporation pertaining to the reserve for losses on overseas investment, etc. referred to in paragraph (1), the calculation of the acquisition cost of the specified shares, etc. referred to in paragraph (2), item (vi) in the case where the domestic corporation prescribed in paragraph (1) is the special investment corporation prescribed in that paragraph, and other necessary matters concerning the application of the provisions of paragraphs (1) through (6) and paragraph (8) through the preceding paragraph are specified by Cabinet Order.

②Where, as of the end of each business year of a corporation that has set aside the reserve for losses on investment in business restructuring of small and medium sized enterprises referred to in the preceding paragraph, the amount of the reserve for losses on investment in business restructuring of small and medium sized enterprises pertaining to a specified corporation carried over from the preceding business year (where there are amounts that have been included, or are to be included, in gross profit by that day pursuant to the provisions of the following paragraph, or amounts that were included in gross profit by the end of the preceding business year pursuant to the provisions of this paragraph, the amount obtained by deducting those amounts; the same applies in the following paragraph and paragraph (4)) includes an amount for which five years (for the reserve for losses on investment in business restructuring of small and medium sized enterprises pertaining to a specified corporation where the corporation had acquired shares, etc. of that specified corporation as a measure listed in the second column of item (ii) of the table in the preceding paragraph, 10 years) have elapsed from the day following the end of the business year in which it was set aside (hereinafter referred to in this paragraph as the "business year of accumulation") (hereinafter referred to in this paragraph as the "reserve amount past the deferral period"), then with regard to that reserve amount past the deferral period, the amount equivalent to the amount calculated by multiplying the amount set aside as that reserve for losses on investment in business restructuring of small and medium sized enterprises that was included in deductible expenses pursuant to the provisions of the preceding paragraph in calculating the amount of income for that business year of accumulation by the number of months in each relevant business year and dividing the result by 60 (where the amount so calculated exceeds that reserve amount past the deferral period, that reserve amount past the deferral period) is included in gross profit in calculating the amount of income for that business year.

③Where a corporation that has set aside the reserve for losses on investment in business restructuring of small and medium sized enterprises referred to in paragraph (1) comes to fall under any of the cases listed in the following items, the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income for the business year that includes the day on which it came to fall under that case (in the case listed in item (iii), the business year that includes the day before the date of the merger).

④Where a corporation that has set aside the reserve for losses on investment in business restructuring of small and medium sized enterprises referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the amount of the reserve for losses on investment in business restructuring of small and medium sized enterprises as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or the day on which the written notification was submitted (where the day on which the written notification was submitted is after the end of the business year in which it discontinued filing returns by blue return, the end of that business year) is included in gross profit in calculating the amount of income for the business year that includes that day. In this case, the provisions of the preceding two paragraphs do not apply.

⑤The number of months referred to in paragraph (2) is calculated in accordance with the calendar, and a fraction of less than one month is counted as one month.

⑥The provisions of paragraph (1) apply only where the final return, etc. for the business year for which the corporation seeks the application of those provisions contains a statement of the inclusion in deductible expenses of the amount set aside as a reserve for losses on investment in business restructuring of small and medium sized enterprises, and a written statement concerning the calculation of the amount so set aside is attached to that final return, etc.

⑦Beyond what is provided for in the preceding paragraph, necessary matters concerning the application of the provisions of paragraphs (1) through (5) are specified by Cabinet Order.

①Where a corporation that files a blue return and that is a certified decommissioning operator prescribed in Article 55-3, paragraph (1) of the Nuclear Damage Compensation and Decommissioning Facilitation Corporation Act (Act No. 94 of 2011) (referred to in paragraph (3), item (i) as a "certified decommissioning operator"), in each business year that includes a day within the period from the date of enforcement of the Act Partially Amending the Nuclear Damage Compensation and Decommissioning Facilitation Corporation Act (Act No. 30 of 2017) to March 31, 2029 (excluding the business year that includes the day of dissolution and each business year during liquidation), in order to appropriate it for the expenditure of the costs required for the removal of severely damaged reactor cores, etc. (referred to in the following paragraph as the "cost of removing reactor cores, etc.") pertaining to a power reactor facility prescribed in Article 43-3-5, paragraph (2), item (v) of the Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors (Act No. 166 of 1957) or a commercial reprocessing facility prescribed in Article 38, paragraph (1), item (ii) of the Nuclear Damage Compensation and Decommissioning Facilitation Corporation Act, which has been designated as a specified nuclear facility pursuant to the provisions of Article 64-2, paragraph (1) of the Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors (hereinafter referred to in this paragraph and the following paragraph as a "specified nuclear facility"), sets aside as a reserve for removal of reactor cores, etc. from specified nuclear facilities, for each specified nuclear facility, by the method of accounting as an expense or loss, an amount not exceeding the amount equivalent to the amount deposited with the Nuclear Damage Compensation and Decommissioning Facilitation Corporation as decommissioning, etc. reserve funds pursuant to the provisions of Article 55-3, paragraph (1) and paragraph (2) of the Nuclear Damage Compensation and Decommissioning Facilitation Corporation Act for that specified nuclear facility in that business year, the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

②Where a corporation that has set aside the reserve for removal of reactor cores, etc. from specified nuclear facilities referred to in the preceding paragraph has expended the cost of removing reactor cores, etc. for the specified nuclear facility pertaining to that reserve for removal of reactor cores, etc. from specified nuclear facilities, the amount equivalent to the amount so expended, out of the amount of the reserve for removal of reactor cores, etc. from specified nuclear facilities pertaining to that specified nuclear facility as of the day of the expenditure (where there are amounts that have been included, or are to be included, in gross profit by that day pursuant to the provisions of this paragraph or the following paragraph, the amount obtained by deducting those amounts; the same applies in that paragraph and paragraph (4)), is included in gross profit in calculating the amount of income for the business year that includes the day of the expenditure.

③Where a corporation that has set aside the reserve for removal of reactor cores, etc. from specified nuclear facilities referred to in paragraph (1) comes to fall under any of the cases listed in the following items, the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income for the business year that includes the day on which it came to fall under that case.

④Where a corporation that has set aside the reserve for removal of reactor cores, etc. from specified nuclear facilities referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the amount of the reserve for removal of reactor cores, etc. from specified nuclear facilities as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or the day on which the written notification was submitted (where the day on which the written notification was submitted is after the end of the business year in which it discontinued filing returns by blue return, the end of that business year) is included in gross profit in calculating the amount of income for the business year that includes that day. In this case, the provisions of the preceding two paragraphs do not apply.

⑤The provisions of Article 56, paragraph (6) apply mutatis mutandis where the provisions of paragraph (1) are applied.

⑥Beyond what is provided for in the preceding paragraph, necessary matters concerning the application of the provisions of paragraphs (1) through (4) are specified by Cabinet Order.

①Where a corporation that files a blue return and that is listed in any of the following items, in each business year (excluding the business year that includes the day of dissolution and each business year during liquidation), in setting aside the policy reserve under the provisions of the law specified in that item (referred to in paragraph (12) as the "policy reserve"), sets aside as a reserve for abnormal risks, for each type of insurance or type of mutual aid specified by Cabinet Order, by the method of accounting as an expense or loss, an amount not exceeding the amount calculated pursuant to the provisions of Cabinet Order on the basis of the net premium income or net mutual aid premium income of that insurance or mutual aid for that business year, in order to appropriate it for compensating losses from abnormal disasters pertaining to insurance (excluding the nuclear insurance and earthquake insurance prescribed in paragraph (1) of the following Article, and limited to insurance specified by Cabinet Order as insurance for which losses from abnormal disasters are expected to arise; the same applies hereinafter in this Article) or mutual aid similar thereto specified by Cabinet Order (including where it sets aside the amount as a reserve for abnormal risks by the method of setting it aside as a reserve fund through the appropriation of surplus by the day on which the settlement of accounts for that business year is finalized), the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

②The loss from abnormal disasters prescribed in the preceding paragraph means, for each type of insurance or type of mutual aid prescribed in that paragraph (for insurance or mutual aid specified by Cabinet Order as insurance or mutual aid for which the patterns of occurrence of losses due to abnormal disasters are similar, the category specified by Cabinet Order), the loss corresponding to the excess amount where the total amount of insurance proceeds paid, or finalized as payable, in each business year (where there are reinsurance proceeds received, or finalized as receivable, in that business year, the amount obtained by deducting that amount) or the total amount of mutual aid proceeds paid, or finalized as payable, in each business year (where there are insurance proceeds or mutual aid proceeds received, or finalized as receivable, in that business year, the amount obtained by deducting those amounts) exceeds the amount calculated by multiplying the net premium income or net mutual aid premium income for that business year by 50 percent (for ship insurance and other insurance specified by Cabinet Order, the percentage specified by Cabinet Order).

③The net premium income prescribed in the preceding two paragraphs means the amount obtained by deducting, from the sum of the premiums received, or finalized as receivable, in each business year (where any of those premiums have been refunded or are to be refunded, the amount obtained by deducting that amount) and the reinsurance refunds, the sum of the reinsurance premiums and cancellation refunds paid, or finalized as payable, in that business year.

④The net mutual aid premium income prescribed in paragraph (1) and paragraph (2) means the amount obtained by deducting, from the sum of the mutual aid premiums received, or finalized as receivable, in each business year (for a fire, etc. mutual aid cooperative that calculates its mutual aid premiums on the basis of a rate obtained by adding a special safety rate to the ordinary premium rate, limited to the amount of the portion of those mutual aid premiums corresponding to the ordinary premium rate, and where any of those finalized mutual aid premiums have been refunded or are to be refunded, the amount obtained by deducting that amount) and the cancellation refunds, the sum of the premiums, mutual aid premiums and cancellation refunds paid, or finalized as payable, in that business year (for the mutual aid specified by Cabinet Order out of the mutual aid provided by a federation of agricultural cooperatives referred to in paragraph (1), item (iv) or a federation of fishery cooperatives for mutual aid referred to in item (vi) of that paragraph, the amount calculated pursuant to the provisions of Cabinet Order as the amount corresponding to the amount of mutual aid premiums under mutual aid contracts concluded by an agricultural cooperative that carries out the business referred to in item (iv) of that paragraph, or by a fishery cooperative that carries out the business referred to in Article 11, paragraph (1), item (xii) of the Fishery Industry Cooperative Act or a fishery processing cooperative that carries out the business referred to in Article 93, paragraph (1), item (vi)-2 of that Act).

⑤In the cases referred to in the preceding three paragraphs, where, with regard to that insurance or mutual aid, there is a contract with a special clause providing for the payment of a maturity refund after the expiration of the insurance period or mutual aid period, or any other contract specified by Cabinet Order, the total amount of insurance proceeds or total amount of mutual aid proceeds prescribed in paragraph (2), or the amount of premiums, reinsurance refunds, reinsurance premiums, cancellation refunds or mutual aid premiums prescribed in the preceding two paragraphs, is to be the amount calculated pursuant to the provisions of Cabinet Order as the amount pertaining to the risk premium portion or risk mutual aid premium portion of that insurance or mutual aid, out of those amounts.

⑥Where a loss from abnormal disasters prescribed in paragraph (1) has arisen with regard to the insurance or mutual aid for which a corporation that has set aside the reserve for abnormal risks referred to in that paragraph has set aside that reserve for abnormal risks, the amount equivalent to the amount of that loss from abnormal disasters, out of the amount of the reserve for abnormal risks carried over from the preceding business year as of the end of the business year in which that loss from abnormal disasters arose (where there are amounts that have been included, or are to be included, in gross profit by that day pursuant to the provisions of paragraph (8), or amounts that were included in gross profit by the end of the preceding business year pursuant to the provisions of this paragraph, the following paragraph or paragraph (9), the amount obtained by deducting those amounts; the same applies hereinafter in this Article) that pertains to that insurance or mutual aid (for the insurance or mutual aid specified by Cabinet Order referred to in paragraph (2), the category prescribed in that paragraph), is included in gross profit in calculating the amount of income for the business year in which that loss from abnormal disasters arose.

⑦Where the amount of the reserve for abnormal risks carried over from the preceding business year as of the end of each business year of a corporation that has set aside the reserve for abnormal risks referred to in paragraph (1) includes an amount set aside in a business year that ended on or before the day 10 years before that day (where that corporation is the merging corporation, successor corporation in a company split or corporation receiving a capital contribution in kind in a merger, company split or capital contribution in kind, including an amount set aside by the merged corporation, splitting corporation or corporation making a capital contribution in kind in that merger, company split or capital contribution in kind in a business year that ended on or before the day 10 years before that day (where that corporation is a successor corporation in a company split or a corporation receiving a capital contribution in kind, limited to the amount succeeded to by that corporation)), the amount specified by Cabinet Order out of that amount is included in gross profit in calculating the amount of income for that business year.

⑧Where a corporation that has set aside the reserve for abnormal risks referred to in paragraph (1) comes to fall under any of the cases listed in the following items, the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income for the business year that includes the day on which it came to fall under that case.

⑨Where a corporation that has set aside the reserve for abnormal risks referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, and thereafter has again obtained approval for filing blue returns, if, out of the amounts set aside as a reserve for abnormal risks after obtaining that approval, there is an amount that is to be included in deductible expenses pursuant to the provisions of that paragraph in calculating the amount of income for the business year in which it was set aside, then, out of the amount equivalent to that amount, the amount up to the amount of the reserve for abnormal risks held as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or as of the end of the business year in which it discontinued filing those returns that is still held as of the end of the business year in which that amount was set aside is included in gross profit in calculating the amount of income for that business year.

⑩With regard to the application of the provisions of the preceding paragraph, the amounts included in gross profit pursuant to the provisions of paragraph (6) through the preceding paragraph after the end of the first business year in which the corporation became subject to the provisions of that paragraph are deemed to consist first of the amount of the reserve for abnormal risks held as of the day on which the fact that gave rise to the revocation of the approval referred to in that paragraph occurred or as of the end of the business year in which it discontinued filing the returns referred to in that paragraph.

⑪The provisions of Article 56, paragraph (6) apply mutatis mutandis where the provisions of paragraph (1) are applied.

⑫Where a corporation that files a blue return and that is listed in paragraph (1), items (i) through (ii)-2, in each business year (excluding each business year during liquidation), transfers insurance policies to a successor corporation in a company split or a corporation receiving a capital contribution in kind through a company split or capital contribution in kind, if, in setting aside the policy reserve, in order to appropriate it for compensating losses from abnormal disasters prescribed in paragraph (2) pertaining to that insurance, it sets aside as a reserve for abnormal risks, for each type of insurance prescribed in paragraph (1), an amount not exceeding the amount equivalent to the amount calculated pursuant to the provisions of Cabinet Order prescribed in that paragraph for that insurance that would be calculated pursuant to the provisions of that paragraph if the time immediately before that company split or capital contribution in kind were the end of the business year, the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

⑬The provisions of the preceding paragraph apply only where the corporation prescribed in that paragraph has submitted, within two months after the date of the company split or capital contribution in kind, a document stating the amount of the reserve for abnormal risks referred to in that paragraph and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over the place for tax payment.

⑭The provisions of Article 55, paragraph (10), paragraph (11) and the first sentence of paragraph (12) apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in paragraph (1) has transferred insurance policies to the merging corporation through a merger. In this case, the term "qualified merger" in paragraph (10) and paragraph (11) of that Article is deemed to be replaced with "merger", and the term "qualified merger" in the first sentence of paragraph (12) of that Article with "merger" and the term "paragraph (3)" with "Article 57-5, paragraph (6) and paragraph (7)".

⑮The provisions of Article 55, paragraph (13), the first sentence of paragraph (14), paragraph (15) and the first sentence of paragraph (16) apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in paragraph (1) or paragraph (12) has transferred all or part of the insurance policies pertaining to the reserve for abnormal risks to a successor corporation in a company split through a company split. In this case, the term "qualified company split" in paragraph (13) of that Article is deemed to be replaced with "company split"; the term "qualified company split" in the first sentence of paragraph (14) of that Article with "company split" and the term "paragraph (3)" with "Article 57-5, paragraph (6) and paragraph (7)"; the term "qualified company split" in paragraph (15) of that Article with "company split"; and the term "qualified company split" in the first sentence of paragraph (16) of that Article with "company split" and the term "paragraph (3)" with "Article 57-5, paragraph (6) and paragraph (7)".

⑯The provisions of Article 55, paragraph (17), the first sentence of paragraph (18), paragraph (19) and the first sentence of paragraph (20) apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in paragraph (1) or paragraph (12) has transferred all or part of the insurance policies pertaining to that reserve for abnormal risks to a corporation receiving a capital contribution in kind through a capital contribution in kind. In this case, the term "qualified capital contribution in kind" in paragraph (17) of that Article is deemed to be replaced with "capital contribution in kind"; the term "qualified capital contribution in kind" in the first sentence of paragraph (18) of that Article with "capital contribution in kind" and the term "paragraph (3)" with "Article 57-5, paragraph (6) and paragraph (7)"; the term "qualified capital contribution in kind" in paragraph (19) of that Article with "capital contribution in kind"; and the term "qualified capital contribution in kind" in the first sentence of paragraph (20) of that Article with "capital contribution in kind" and the term "paragraph (3)" with "Article 57-5, paragraph (6) and paragraph (7)".

⑰Beyond what is provided for in paragraph (11), necessary matters concerning the application of the provisions of paragraphs (1) through (10) and paragraph (12) through the preceding paragraph are specified by Cabinet Order.

①Where a corporation that files a blue return and that is listed in any of the following items or is specified by Cabinet Order, in each business year (excluding the business year that includes the day of dissolution and each business year during liquidation), in setting aside the policy reserve under the provisions of the law specified in that item (for a corporation specified by that Cabinet Order, the law specified by Cabinet Order) (referred to in paragraph (8) as the "policy reserve"), sets aside as a reserve for abnormal risks, by the method of accounting as an expense or loss, an amount not exceeding the amount calculated pursuant to the provisions of Cabinet Order on the basis of the net premium income prescribed in paragraph (3) of the preceding Article or the net mutual aid premium income prescribed in paragraph (4) of that Article of that nuclear insurance or earthquake insurance for that business year, in order to appropriate it for compensating losses from nuclear disasters pertaining to nuclear insurance (meaning insurance specified by Cabinet Order whose subject matter is nuclear facilities, liability for compensation for damage pertaining to nuclear disasters, etc.; the same applies hereinafter in this Article) or losses from earthquake disasters pertaining to earthquake insurance (meaning insurance, or mutual aid specified by Cabinet Order, whose subject matter is residential buildings or movables for daily life and whose insured event or mutual aid event is an earthquake or volcanic eruption, or a tsunami caused by either of these; the same applies hereinafter in this Article) (including where it sets aside the amount as a reserve for abnormal risks by the method of setting it aside as a reserve fund through the appropriation of surplus by the day on which the settlement of accounts for that business year is finalized), the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

②The loss from nuclear disasters prescribed in the preceding paragraph means the loss corresponding to the total amount of insurance proceeds paid, or finalized as payable, in each business year (where there are reinsurance proceeds received, or finalized as receivable, in that business year, the amount obtained by deducting that amount) as a result of insurance liability under nuclear insurance having arisen due to the occurrence of damage at a nuclear facility, the occurrence of a disaster caused by nuclear energy or any other accident, etc., and the loss from earthquake disasters prescribed in that paragraph means the loss corresponding to the total amount of insurance proceeds or mutual aid proceeds paid, or finalized as payable, in each business year (where there are reinsurance proceeds, insurance proceeds or mutual aid proceeds received, or finalized as receivable, in that business year, the amount obtained by deducting those amounts) as a result of insurance liability or mutual aid liability under earthquake insurance having arisen due to the occurrence of damage from fire, destruction, burial or washing away directly or indirectly caused by an earthquake or volcanic eruption, or a tsunami caused by either of these.

③Where a loss from nuclear disasters or loss from earthquake disasters prescribed in paragraph (1) has arisen for a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance referred to in that paragraph, the amount equivalent to the amount of that loss from nuclear disasters or loss from earthquake disasters, out of the amount of the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance as of the day on which that loss from nuclear disasters or loss from earthquake disasters arose (where there are amounts that have been included, or are to be included, in gross profit by that day pursuant to the provisions of this paragraph or paragraph (5), or amounts that were included in gross profit by the end of the preceding business year pursuant to the provisions of the following paragraph or the provisions of paragraph (9) of the preceding Article as applied mutatis mutandis pursuant to paragraph (6), the amount obtained by deducting those amounts; the same applies hereinafter in this Article), is included in gross profit in calculating the amount of income for the business year that includes the day on which that loss from nuclear disasters or loss from earthquake disasters arose.

④Where the amount of the reserve for abnormal risks pertaining to nuclear insurance carried over from the preceding business year as of the end of each business year of a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance referred to in paragraph (1) includes an amount set aside in a business year that ended on or before the day 10 years before that day (where that corporation is the merging corporation, successor corporation in a company split or corporation receiving a capital contribution in kind in a merger, company split or capital contribution in kind, including an amount set aside by the merged corporation, splitting corporation or corporation making a capital contribution in kind in that merger, company split or capital contribution in kind in a business year that ended on or before the day 10 years before that day (where that corporation is a successor corporation in a company split or a corporation receiving a capital contribution in kind, limited to the amount succeeded to by that corporation)), that amount is included in gross profit in calculating the amount of income for that business year.

⑤Where a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance referred to in paragraph (1) comes to fall under any of the cases listed in the following items, the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income for the business year that includes the day on which it came to fall under that case.

⑥The provisions of paragraph (9) and paragraph (10) of the preceding Article apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, and thereafter has again obtained approval for filing blue returns, and, out of the amounts set aside as a reserve for abnormal risks pertaining to nuclear insurance or reserve for abnormal risks pertaining to earthquake insurance after obtaining that approval, there is an amount that is to be included in deductible expenses pursuant to the provisions of that paragraph in calculating the amount of income for the business year in which it was set aside. In this case, the phrase "paragraph (6) through the preceding paragraph" in paragraph (10) of that Article is deemed to be replaced with "paragraphs (3) through (5) of the following Article and the preceding paragraph".

⑦The provisions of Article 56, paragraph (6) apply mutatis mutandis where the provisions of paragraph (1) are applied.

⑧Where a corporation that files a blue return and that is listed in any of the items of paragraph (1), in each business year (excluding each business year during liquidation), transfers all of the insurance policies of nuclear insurance or earthquake insurance to a successor corporation in a company split or a corporation receiving a capital contribution in kind through a company split or capital contribution in kind, if, in setting aside the policy reserve, in order to appropriate it for compensating the loss from nuclear disasters prescribed in paragraph (2) pertaining to nuclear insurance or the loss from earthquake disasters prescribed in that paragraph pertaining to earthquake insurance, it sets aside as a reserve for abnormal risks an amount not exceeding the amount equivalent to the amount calculated pursuant to the provisions of Cabinet Order prescribed in paragraph (1) for that nuclear insurance or earthquake insurance that would be calculated pursuant to the provisions of that paragraph if the time immediately before that company split or capital contribution in kind were the end of that business year, the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

⑨The provisions of the preceding paragraph apply only where the corporation prescribed in that paragraph has submitted, within two months after the date of the company split or capital contribution in kind, a document stating the amount of the reserve for abnormal risks referred to in that paragraph and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over the place for tax payment.

⑩The provisions of Article 55, paragraph (10) and paragraph (11) apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance referred to in paragraph (1) has transferred all of the insurance policies of nuclear insurance or earthquake insurance to the merging corporation through a merger, and the provisions of the first sentence of paragraph (12) of that Article apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance referred to in paragraph (1) has transferred all of the insurance policies pertaining to nuclear insurance to the merging corporation through a merger. In this case, the term "qualified merger" in paragraph (10) and paragraph (11) of that Article is deemed to be replaced with "merger", and the term "qualified merger" in the first sentence of paragraph (12) of that Article with "merger" and the term "paragraph (3)" with "Article 57-6, paragraph (4)".

⑪Where a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance referred to in paragraph (1) or paragraph (8) has transferred all of the insurance policies of nuclear insurance or earthquake insurance pertaining to that reserve for abnormal risks to a successor corporation in a company split through a company split, the amount of that reserve for abnormal risks immediately before the company split is to be succeeded to by that successor corporation in a company split. In this case, the amount of the reserve for abnormal risks succeeded to by the successor corporation in a company split is deemed to be the amount of the reserve for abnormal risks referred to in paragraph (1) held by that successor corporation in a company split as of the date of the company split.

⑫The provisions of the first sentence of Article 55, paragraph (14) and the first sentence of paragraph (16) of that Article apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in the preceding paragraph has transferred all of the insurance policies of nuclear insurance pertaining to that reserve for abnormal risks to a successor corporation in a company split through a company split, and the provisions of paragraph (15) of that Article apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in the preceding paragraph has transferred all of the insurance policies of nuclear insurance or earthquake insurance pertaining to that reserve for abnormal risks to a successor corporation in a company split through a company split. In this case, the term "qualified company split" in the first sentence of paragraph (14) of that Article is deemed to be replaced with "company split" and the term "paragraph (3)" with "Article 57-6, paragraph (4)"; the term "qualified company split" in paragraph (15) of that Article with "company split"; and the term "qualified company split" in the first sentence of paragraph (16) of that Article with "company split" and the term "paragraph (3)" with "Article 57-6, paragraph (4)".

⑬Where a corporation that has set aside the reserve for abnormal risks pertaining to nuclear insurance or the reserve for abnormal risks pertaining to earthquake insurance referred to in paragraph (1) or paragraph (8) has transferred all of the insurance policies of nuclear insurance or earthquake insurance pertaining to that reserve for abnormal risks to a corporation receiving a capital contribution in kind through a capital contribution in kind, the amount of that reserve for abnormal risks immediately before the capital contribution in kind is to be succeeded to by that corporation receiving a capital contribution in kind. In this case, the amount of the reserve for abnormal risks succeeded to by the corporation receiving a capital contribution in kind is deemed to be the amount of the reserve for abnormal risks referred to in paragraph (1) held by that corporation receiving a capital contribution in kind as of the date of the capital contribution in kind.

⑭The provisions of the first sentence of Article 55, paragraph (18) and the first sentence of paragraph (20) of that Article apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in the preceding paragraph has transferred all of the insurance policies of nuclear insurance pertaining to that reserve for abnormal risks to a corporation receiving a capital contribution in kind through a capital contribution in kind, and the provisions of paragraph (19) of that Article apply mutatis mutandis where a corporation that has set aside the reserve for abnormal risks referred to in the preceding paragraph has transferred all of the insurance policies of nuclear insurance or earthquake insurance pertaining to that reserve for abnormal risks to a corporation receiving a capital contribution in kind through a capital contribution in kind. In this case, the term "qualified capital contribution in kind" in the first sentence of paragraph (18) of that Article is deemed to be replaced with "capital contribution in kind" and the term "paragraph (3)" with "Article 57-6, paragraph (4)"; the term "qualified capital contribution in kind" in paragraph (19) of that Article with "capital contribution in kind"; and the term "qualified capital contribution in kind" in the first sentence of paragraph (20) of that Article with "capital contribution in kind" and the term "paragraph (3)" with "Article 57-6, paragraph (4)".

⑮Beyond what is provided for in paragraph (7), necessary matters concerning the application of the provisions of paragraphs (1) through (6) and paragraph (8) through the preceding paragraph are specified by Cabinet Order.

①Where the designated company prescribed in Article 12, paragraph (1), item (i) of the Act on the Integrated and Efficient Establishment and Management of Kansai International Airport and Osaka International Airport (Act No. 54 of 2011) (hereinafter referred to in this Article as the "designated company"), in an applicable business year, in preparation for the expenditure of airport site development costs (meaning the costs required for the development of the airport site referred to in Article 15 of that Act), sets aside as a reserve for land development for Kansai International Airport, by the method of accounting as an expense or loss, an amount not exceeding the lower of the following amounts (including where it sets aside the amount as a reserve for land development for Kansai International Airport by the method of setting it aside as a reserve fund through the appropriation of surplus by the day on which the settlement of accounts for that applicable business year is finalized), the amount so set aside is included in deductible expenses in calculating the amount of income for that applicable business year.

②The applicable business year prescribed in the preceding paragraph means each business year that includes a day within the period from the day on which the designated company leased the airport site to New Kansai International Airport Company, Ltd. pursuant to the provisions of Article 12, paragraph (1), item (ii) of the Act on the Integrated and Efficient Establishment and Management of Kansai International Airport and Osaka International Airport to the day specified by Cabinet Order as the day on which the period of that lease ends (where that day is after the day of completion of the repayment of the airport site development debts, the day of that completion) (referred to in paragraph (4) as the "accumulation period") (excluding the business year that includes the day of dissolution, each business year during liquidation and the business year that includes the day before the date of a merger (excluding a qualified merger) of a merged corporation, and limited to a business year for which a blue return is filed).

③The airport site development debts prescribed in the preceding two paragraphs means, out of the borrowings and other debts held by the designated company after the absorption-type company split prescribed in Article 3, paragraph (3), item (i) of the Supplementary Provisions of the Act on the Integrated and Efficient Establishment and Management of Kansai International Airport and Osaka International Airport, the borrowings and other debts incurred to cover the costs of construction work for the creation of the airport site.

④Where, as of the end of each business year after the last business year of the applicable business years prescribed in paragraph (2) (hereinafter referred to in this paragraph as the "base business year") of a designated company that has set aside the reserve for land development for Kansai International Airport referred to in paragraph (1), there is an amount of the reserve for land development for Kansai International Airport carried over from the preceding business year, then with regard to that amount of the reserve for land development for Kansai International Airport, the amount equivalent to the amount calculated by multiplying the amount of the reserve for land development for Kansai International Airport as of the end of that base business year by the number of months in each relevant business year and dividing the result by the number of months in the period specified by Cabinet Order taking into account the accumulation period (where the amount so calculated exceeds the amount of the reserve for land development for Kansai International Airport carried over from the preceding business year, that amount of the reserve for land development for Kansai International Airport so carried over) is included in gross profit in calculating the amount of income for that business year.

⑤Where a designated company that has set aside the reserve for land development for Kansai International Airport referred to in paragraph (1) comes to fall under any of the cases listed in the following items (excluding where it has transferred the airport site through a qualified merger or a qualified company split by split-off), the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income of the designated company for the business year that includes the day on which it came to fall under that case (in the case listed in item (ii), (a), the business year that includes the day before the date of the merger).

⑥Where a designated company that has set aside the reserve for land development for Kansai International Airport referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the amount of the reserve for land development for Kansai International Airport as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or the day on which the written notification was submitted (where the day on which the written notification was submitted is after the end of the business year in which it discontinued filing returns by blue return, the end of that business year) is included in gross profit in calculating the amount of income of the designated company for the business year that includes that day. In this case, the provisions of the preceding two paragraphs, paragraph (9) and paragraph (10) do not apply.

⑦The number of months referred to in paragraph (4) is calculated in accordance with the calendar, and a fraction of less than one month is counted as one month.

⑧The provisions of Article 56, paragraph (6) apply mutatis mutandis to the application of the provisions of paragraph (1).

⑨The provisions of Article 55, paragraphs (10) through (12) apply mutatis mutandis where a designated company that has set aside the reserve for land development for Kansai International Airport referred to in paragraph (1) has transferred the airport site to the merging corporation through a qualified merger. In this case, the phrase "is not a person who may file the final return, etc. for the business year that includes the date of the qualified merger as a blue return" in paragraph (11) of that Article is deemed to be replaced with "is not a person who may file the final return, etc. for the business year that includes the date of the qualified merger as a blue return or a designated company prescribed in Article 12, paragraph (1), item (i) of the Act on the Integrated and Efficient Establishment and Management of Kansai International Airport and Osaka International Airport"; the phrase "of paragraph (3)" in paragraph (12) of that Article with "of Article 57-7, paragraph (1) and paragraph (4)"; and the phrase "in paragraph (3)" with "in paragraph (4) of that Article".

⑩The provisions of Article 55, paragraphs (13) through (16) apply mutatis mutandis where a designated company that has set aside the reserve for land development for Kansai International Airport referred to in paragraph (1) has transferred the airport site to a successor corporation in a company split through a qualified company split by split-off. In this case, the term "paragraph (3)" in paragraph (14) of that Article is deemed to be replaced with "Article 57-7, paragraph (4)"; the phrase "is not a person who may file the final return, etc. for the business year that includes the date of the qualified company split as a blue return" in paragraph (15) of that Article with "is not a person who may file the final return, etc. for the business year that includes the date of the qualified company split as a blue return or a designated company prescribed in Article 12, paragraph (1), item (i) of the Act on the Integrated and Efficient Establishment and Management of Kansai International Airport and Osaka International Airport"; the phrase "of paragraph (3)" in paragraph (16) of that Article with "of Article 57-7, paragraph (1) and paragraph (4)"; and the phrase "in paragraph (3)" with "in paragraph (4) of that Article".

⑪Beyond what is provided for in paragraph (8), necessary matters concerning the application of the provisions of paragraphs (1) through (7) and the preceding two paragraphs are specified by Cabinet Order.

①Where the designated company prescribed in Article 4, paragraph (2) of the Act on Establishment and Management of Central Japan International Airport (Act No. 36 of 1998) (hereinafter referred to in this Article as the "designated company"), in an applicable business year, in preparation for the expenditure of costs required for the development of Chubu International Airport, sets aside as a reserve for development of Chubu International Airport, by the method of accounting as an expense or loss, an amount not exceeding the lower of the following amounts (where that amount exceeds the amount equivalent to two-thirds of the amount specified by Cabinet Order as the amount of income for that applicable business year, the amount equivalent to those two-thirds) (including where it sets aside the amount as a reserve for development of Chubu International Airport by the method of setting it aside as a reserve fund through the appropriation of surplus by the day on which the settlement of accounts for that applicable business year is finalized), the amount so set aside is included in deductible expenses in calculating the amount of income for that applicable business year.

②The applicable business year prescribed in the preceding paragraph means each business year that includes a day within the period from April 1, 2013 to the day specified by Cabinet Order as the day on which the repayment of the borrowings and other debts incurred to cover the costs of construction work for the creation of Chubu International Airport land is scheduled to be completed (referred to in the following paragraph as the "accumulation period") (excluding the business year that includes the day of dissolution, each business year during liquidation and the business year that includes the day before the date of a merger (excluding a qualified merger) of a merged corporation, and limited to a business year for which a blue return is filed).

③Where, as of the end of each business year after the last business year of the applicable business years prescribed in the preceding paragraph (hereinafter referred to in this paragraph as the "base business year") of a designated company that has set aside the reserve for development of Chubu International Airport referred to in paragraph (1), there is an amount of the reserve for development of Chubu International Airport carried over from the preceding business year, then with regard to that amount of the reserve for development of Chubu International Airport, the amount equivalent to the amount calculated by multiplying the amount of the reserve for development of Chubu International Airport as of the end of that base business year by the number of months in each relevant business year and dividing the result by the number of months in the period specified by Cabinet Order taking into account the accumulation period (where the amount so calculated exceeds the amount of the reserve for development of Chubu International Airport carried over from the preceding business year, that amount of the reserve for development of Chubu International Airport so carried over) is included in gross profit in calculating the amount of income for that business year.

④Where a designated company that has set aside the reserve for development of Chubu International Airport referred to in paragraph (1) comes to fall under any of the cases listed in the following items (excluding where it has transferred Chubu International Airport through a qualified merger or a qualified company split by split-off), the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income of the designated company for the business year that includes the day on which it came to fall under that case (in the case listed in item (ii), (a), the business year that includes the day before the date of the merger).

⑤Where a designated company that has set aside the reserve for development of Chubu International Airport referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the amount of the reserve for development of Chubu International Airport as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or the day on which the written notification was submitted (where the day on which the written notification was submitted is after the end of the business year in which it discontinued filing returns by blue return, the end of that business year) is included in gross profit in calculating the amount of income of the designated company for the business year that includes that day. In this case, the provisions of the preceding two paragraphs, paragraph (8) and paragraph (9) do not apply.

⑥The number of months referred to in paragraph (3) is calculated in accordance with the calendar, and a fraction of less than one month is counted as one month.

⑦The provisions of Article 56, paragraph (6) apply mutatis mutandis to the application of the provisions of paragraph (1).

⑧The provisions of Article 55, paragraphs (10) through (12) apply mutatis mutandis where a designated company that has set aside the reserve for development of Chubu International Airport referred to in paragraph (1) has transferred Chubu International Airport to the merging corporation through a qualified merger. In this case, the phrase "is not a person who may file the final return, etc. for the business year that includes the date of the qualified merger as a blue return" in paragraph (11) of that Article is deemed to be replaced with "is not a person who may file the final return, etc. for the business year that includes the date of the qualified merger as a blue return or a designated company prescribed in Article 4, paragraph (2) of the Act on Establishment and Management of Central Japan International Airport"; the phrase "of paragraph (3)" in paragraph (12) of that Article with "of Article 57-7-2, paragraph (1) and paragraph (3)"; and the phrase "in paragraph (3)" with "in paragraph (3) of that Article".

⑨The provisions of Article 55, paragraphs (13) through (16) apply mutatis mutandis where a designated company that has set aside the reserve for development of Chubu International Airport referred to in paragraph (1) has transferred Chubu International Airport to a successor corporation in a company split through a qualified company split by split-off. In this case, the term "paragraph (3)" in paragraph (14) of that Article is deemed to be replaced with "Article 57-7-2, paragraph (3)"; the phrase "is not a person who may file the final return, etc. for the business year that includes the date of the qualified company split as a blue return" in paragraph (15) of that Article with "is not a person who may file the final return, etc. for the business year that includes the date of the qualified company split as a blue return or a designated company prescribed in Article 4, paragraph (2) of the Act on Establishment and Management of Central Japan International Airport"; the phrase "of paragraph (3)" in paragraph (16) of that Article with "of Article 57-7-2, paragraph (1) and paragraph (3)"; and the phrase "in paragraph (3)" with "in paragraph (3) of that Article".

⑩Beyond what is provided for in paragraph (7), necessary matters concerning the application of the provisions of paragraphs (1) through (6) and the preceding two paragraphs are specified by Cabinet Order.

①Where a corporation that files a blue return, in each business year (excluding the business year that includes the day of dissolution and each business year during liquidation), in preparation for the expenditure of expenses required for repairs carried out on a ship used for its business that must undergo the periodical inspection under Article 5, paragraph (1), item (i) of the Ship Safety Act (hereinafter referred to in this paragraph as a "periodical inspection") (excluding a ship with a gross tonnage of less than five tons and a ship to be transferred to the merging corporation through a merger (excluding a qualified merger); hereinafter referred to in this Article as a "specified ship") in order to undergo a periodical inspection (hereinafter referred to in this Article as "special repairs"), sets aside as a reserve for special repairs, for each specified ship, by the method of accounting as an expense or loss, an amount not exceeding the accumulation limit (including where it sets aside the amount as a reserve for special repairs by the method of setting it aside as a reserve fund through the appropriation of surplus by the day on which the settlement of accounts for that business year is finalized), the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

②The accumulation limit prescribed in the preceding paragraph means the amount specified in each of the following items according to the category of cases listed in that item.

③Where a corporation that has set aside the reserve for special repairs referred to in paragraph (1) has expended the amount of expenses required for special repairs on the specified ship pertaining to that reserve for special repairs (hereinafter referred to in this Article as a "specified ship with a reserve set"), the amount equivalent to the amount so expended out of the amount of the reserve for special repairs pertaining to that specified ship with a reserve set as of the day of that expenditure (where there are amounts that have been included, or are to be included, in gross profit by that day pursuant to the provisions of this paragraph or paragraph (5), or amounts that were included in gross profit by the end of the preceding business year pursuant to the provisions of the following paragraph, the amount obtained by deducting those amounts; hereinafter the same applies in this Article) is included in gross profit in calculating the amount of income for the business year that includes the day of that expenditure.

④Where, as of the end of each business year of a corporation that has set aside the reserve for special repairs referred to in paragraph (1), the amount of the reserve for special repairs pertaining to a specified ship with a reserve set carried over from the preceding business year includes an amount for which two years have elapsed from the day following the end of the business year that includes the day specified by Cabinet Order as the scheduled completion date of the special repairs pertaining to that specified ship with a reserve set (hereinafter referred to in this paragraph as the "reserve amount past the scheduled special repair date"), then with regard to that reserve amount past the scheduled special repair date, the amount equivalent to the amount calculated by multiplying the amount of the reserve for special repairs pertaining to that specified ship with a reserve set as of the end of the business year that includes the day on which those two years elapsed by the number of months in each relevant business year and dividing the result by 60 (where the amount so calculated exceeds the amount of the reserve for special repairs pertaining to that specified ship with a reserve set as of the end of that business year, that amount of the reserve for special repairs) is included in gross profit in calculating the amount of income for that business year.

⑤Where a corporation that has set aside the reserve for special repairs referred to in paragraph (1) comes to fall under any of the cases listed in the following items (excluding where it has transferred a specified ship with a reserve set through a qualified merger, a qualified company split or a qualified capital contribution in kind), the amount equivalent to the amount specified in that item is included in gross profit in calculating the amount of income for the business year that includes the day on which it came to fall under that case (in the case listed in item (iii), the business year that includes the day before the date of the merger).

⑥Where a corporation that has set aside the reserve for special repairs referred to in paragraph (1) has had the approval for filing blue returns revoked, or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the amount of the reserve for special repairs as of the day on which the fact that gave rise to the revocation of the approval occurred (where it falls under any of the cases listed in the following items, the day specified in that item) or the day on which the written notification was submitted (where the day on which the written notification was submitted is after the end of the business year in which it discontinued filing returns by blue return, the end of that business year) is included in gross profit in calculating the amount of income for the business year that includes that day. In this case, the provisions of the preceding three paragraphs, paragraph (11), paragraph (12) and paragraph (14) do not apply.

⑦The number of months referred to in paragraph (4) is calculated in accordance with the calendar, and a fraction of less than one month is counted as one month.

⑧The provisions of Article 56, paragraph (6) apply mutatis mutandis to the application of the provisions of paragraph (1).

⑨Where a corporation that files a blue return transfers a specified ship to a successor corporation in a company split or a corporation receiving a capital contribution in kind through a qualified company split or a qualified capital contribution in kind, if, in preparation for the expenditure of expenses required for special repairs to be carried out on that specified ship, it sets aside as a reserve for special repairs, for each specified ship, an amount not exceeding the amount equivalent to the accumulation limit prescribed in paragraph (2) that would be calculated pursuant to the provisions of that paragraph if the day before the date of that qualified company split or qualified capital contribution in kind were the end of the business year, the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

⑩The provisions of the preceding paragraph apply only where the corporation prescribed in that paragraph has submitted, within two months after the date of the qualified company split or qualified capital contribution in kind, a document stating the amount of the reserve for special repairs referred to in that paragraph and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over the place for tax payment.

⑪The provisions of Article 55, paragraphs (10) through (12) apply mutatis mutandis where a corporation that has set aside the reserve for special repairs referred to in paragraph (1) has transferred a specified ship with a reserve set to the merging corporation through a qualified merger. In this case, the phrase "of paragraph (3)" in paragraph (12) of that Article is deemed to be replaced with "of Article 57-8, paragraph (4)", and the phrase "in paragraph (3)" with "in paragraph (4) of that Article".

⑫Where a corporation that has set aside the reserve for special repairs referred to in paragraph (1) or paragraph (9) has transferred the specified ship pertaining to that reserve for special repairs to a successor corporation in a company split through a qualified company split, the amount of the reserve for special repairs pertaining to that specified ship immediately before the qualified company split is to be succeeded to by that successor corporation in a company split. In this case, the amount of the reserve for special repairs succeeded to by the successor corporation in a company split is deemed to be the amount of the reserve for special repairs referred to in paragraph (1) held by that successor corporation in a company split as of the date of the qualified company split.

⑬The provisions of Article 55, paragraphs (14) through (16) apply mutatis mutandis where a corporation that has set aside the reserve for special repairs referred to in the preceding paragraph has transferred the specified ship pertaining to that reserve for special repairs to a successor corporation in a company split through a qualified company split. In this case, the term "paragraph (3)" in paragraph (14) of that Article is deemed to be replaced with "Article 57-8, paragraph (4)"; the phrase "of paragraph (3)" in paragraph (16) of that Article with "of Article 57-8, paragraph (4)"; and the phrase "in paragraph (3)" with "in paragraph (4) of that Article".

⑭Where a corporation that has set aside the reserve for special repairs referred to in paragraph (1) or paragraph (9) has transferred the specified ship pertaining to that reserve for special repairs to a corporation receiving a capital contribution in kind through a qualified capital contribution in kind, the amount of the reserve for special repairs pertaining to that specified ship immediately before the qualified capital contribution in kind is to be succeeded to by that corporation receiving a capital contribution in kind. In this case, the amount of the reserve for special repairs succeeded to by the corporation receiving a capital contribution in kind is deemed to be the amount of the reserve for special repairs referred to in paragraph (1) held by that corporation receiving a capital contribution in kind as of the date of the qualified capital contribution in kind.

⑮The provisions of Article 55, paragraphs (18) through (20) apply mutatis mutandis where a corporation that has set aside the reserve for special repairs referred to in the preceding paragraph has transferred the specified ship pertaining to that reserve for special repairs to a corporation receiving a capital contribution in kind through a qualified capital contribution in kind. In this case, the term "paragraph (3)" in paragraph (18) of that Article is deemed to be replaced with "Article 57-8, paragraph (4)"; the phrase "of paragraph (3)" in paragraph (20) of that Article with "of Article 57-8, paragraph (4)"; and the phrase "in paragraph (3)" with "in paragraph (4) of that Article".

⑯Beyond what is provided for in paragraph (8), necessary matters concerning the application of the provisions of paragraphs (1) through (7) and paragraph (9) through the preceding paragraph are specified by Cabinet Order.

①Where a corporation that, at the end of each business year, falls under any of the corporations listed in Article 52, paragraph (1), item (i), (a) through (c) of the Corporation Tax Act (excluding mutual companies prescribed in the Insurance Business Act and those specified by Cabinet Order as being equivalent thereto; referred to in the following paragraph as a "small and medium sized enterprise, etc.") (for one that falls under a corporation listed in (a) of that item (referred to in the following paragraph as a "small or medium-sized corporation"), excluding one that falls under an excluded business operator prescribed in Article 42-4, paragraph (19), item (viii) (hereinafter referred to in this Article as an "excluded business operator") (including, where any of the other group tax sharing corporations that have a group tax sharing full controlling interest with a group tax sharing corporation at the end of each business year of that group tax sharing corporation falls under an excluded business operator, that group tax sharing corporation)) is subject to the provisions of Article 52, paragraph (2) of the Corporation Tax Act, notwithstanding the provisions of that paragraph, the corporation may treat the amount calculated by multiplying the total book value (for monetary claims specified by Cabinet Order, the balance after deducting the amount specified by Cabinet Order; the same applies in the following paragraph) of the collectively assessed monetary claims prescribed in that paragraph (excluding monetary claims held by that corporation against another corporation with which that corporation has a full controlling interest prescribed in Article 2, item (xii)-7-6 of that Act; the same applies in the following paragraph) as of the end of that business year by the rate specified by Cabinet Order as the amount calculated as specified by Cabinet Order prescribed in Article 52, paragraph (2) of that Act.

②Where a corporation that would fall under a small and medium sized enterprise, etc. if the time immediately before a qualified company split, etc. prescribed in Article 52, paragraph (6) of the Corporation Tax Act were the end of a business year (for a small or medium-sized corporation, excluding one that falls under an excluded business operator (including, where any of the other group tax sharing corporations that have a group tax sharing full controlling interest with a small or medium-sized corporation that is a group tax sharing corporation at the time immediately before that qualified company split, etc. falls under an excluded business operator, that small or medium-sized corporation that is a group tax sharing corporation)) is subject to the provisions of that paragraph, notwithstanding the provisions of that paragraph, the corporation may treat the amount calculated by multiplying the total book value of the collectively assessed monetary claims to be transferred through that qualified company split, etc. as of the time immediately before that qualified company split, etc. by the rate specified by Cabinet Order as the amount equivalent to the maximum amount of transfer to the collective allowance for bad debts prescribed in that paragraph.