①The provisions of Article 52-3 of the New Act on Special Measures Concerning Taxation apply to corporation tax of a corporation for business years beginning on or after April 1, 2001, and with regard to corporation tax of a corporation for business years that began before that date, the provisions then in force continue to govern, except in the cases provided for in the following paragraph through paragraph (22); provided, however, that the provisions of the second sentence of paragraph (15), paragraph (16), the second sentence of paragraph (17), paragraph (19), the second sentence of paragraph (20), paragraph (22), the second sentence of paragraph (23) and paragraph (25) of that Article apply to corporation tax of a merging corporation, successor corporation in a company split, corporation receiving a capital contribution in kind or transferee corporation in a post-formation acquisition prescribed in those provisions for business years ending on or after that date.

②Where the amount included in deductible expenses pursuant to the provisions of Article 52-3, paragraph (1) of the Former Act on Special Measures Concerning Taxation in each business year that began before April 1, 2001 is less than the special depreciation limit referred to in that paragraph, if a corporation, in each business year that ends within one year after the day following the end of the business year in which the provisions of that paragraph were applied (limited to business years beginning on or after April 1, 2001, and limited to the case where the corporation has continuously filed blue returns up to each of those business years), sets aside an amount not exceeding the amount of the shortfall (where any part of that amount has already been included in deductible expenses pursuant to the provisions of paragraph (2) of that Article or the provisions of this paragraph, the amount obtained by deducting that amount) as a reserve for special depreciation through accounting as an expense or loss, the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

③Where, as of the end of each business year ending on or after April 1, 2001 of a corporation to which the provisions of Article 52-3, paragraph (1) or (2) of the Former Act on Special Measures Concerning Taxation or the provisions of the preceding paragraph have been applied, there is an amount of the reserve for special depreciation carried forward from the preceding business year (where there is an amount that has been, or has come to be required to be, included in gross profit pursuant to the provisions of paragraph (5) of that Article or the following paragraph by that day, or an amount included in gross profit pursuant to the provisions of paragraph (4) of that Article or the provisions of this paragraph by the end of the preceding business year, the amount obtained by deducting those amounts; the same applies hereinafter in this Article), then, with regard to that amount of the reserve for special depreciation, for each of the amounts into which it is divided by the business year in which it was set aside, the amount equivalent to the amount calculated by multiplying the amount included in deductible expenses pursuant to the provisions of Article 52-3, paragraph (1) or (2) of the Former Act on Special Measures Concerning Taxation or the provisions of the preceding paragraph in calculating the amount of income for the business year in which that divided amount was set aside by the number of months in each of those business years and dividing the result by 84 (where the calculated amount exceeds that divided amount, that divided amount) is included in gross profit in calculating the amount of income for each of those business years, respectively.

④If a corporation prescribed in the preceding paragraph comes to fall under any of the cases listed in the following items on or after April 1, 2001 (excluding the case where it has transferred all of its depreciable assets (meaning depreciable assets prescribed in Article 2, paragraph (2), item (xxv) of the New Act on Special Measures Concerning Taxation; the same applies hereinafter in this Article) through a qualified merger, qualified company split, qualified capital contribution in kind or qualified post-formation acquisition of assets (meaning a qualified merger, qualified company split, qualified capital contribution in kind or qualified post-formation acquisition of assets prescribed in item (xi), (xiv), (xvii) or (xviii) of that paragraph, respectively; the same applies hereinafter in this Article)), the amount equivalent to the amount specified in the relevant 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 or company split by split-off (meaning a company split by split-off prescribed in item (xii) of that paragraph; the same applies hereinafter in this paragraph)). In this case, in the case listed in item (iii), the amounts into which the amount of the reserve for special depreciation prescribed in that item is divided by the business year in which it was set aside are to be included in gross profit in order, starting from the one set aside in the earliest business year.

⑤The number of months referred to in paragraph (3) is calculated according to the calendar, and a fraction of less than one month is counted as one month.

⑥The provisions of paragraph (2) apply only if a written statement of the shortfall prescribed in paragraph (2) is attached to the final return prescribed in Article 2, item (xxxi) of the Corporation Tax Act for each business year on or after the business year in which the provisions of Article 52-3, paragraph (1) of the Former Act on Special Measures Concerning Taxation were applied, and the tax return, etc. prescribed in Article 2, paragraph (2), item (xxvii) of the New Act on Special Measures Concerning Taxation for the business year for which the application of the provisions of paragraph (2) is sought contains a statement regarding the inclusion in deductible expenses of the amount set aside as a reserve for special depreciation and has attached to it a written statement concerning the calculation of the amount so set aside.

⑦Where a corporation that may apply the provisions of Article 42-5, paragraph (1), Article 42-6, paragraph (1), Article 42-7, paragraph (1), Article 42-8, paragraph (1), Article 42-12, paragraph (1) or Articles 43 through 48 of the Former Act on Special Measures Concerning Taxation (hereinafter referred to as the "former provisions on special depreciation" in this paragraph) in the business year ending first on or after April 1, 2001 transfers depreciable assets prescribed in the former provisions on special depreciation (hereinafter referred to as an "asset subject to the former special depreciation" in this Article) through a qualified company split by spin-off (meaning a qualified company split by spin-off prescribed in Article 2, paragraph (2), item (xvi) of the New Act on Special Measures Concerning Taxation), qualified capital contribution in kind or qualified post-formation acquisition of assets (hereinafter referred to as a "qualified company split by spin-off, etc." in this Article) carried out on or after that date, if, in lieu of applying the former provisions on special depreciation, it sets aside an amount not exceeding the special depreciation limit prescribed in the former provisions on special depreciation as a reserve for special depreciation, treating the time immediately before that qualified company split by spin-off, etc. as 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.

⑧Where the amount included in deductible expenses pursuant to the provisions of Article 52-3, paragraph (1) of the Former Act on Special Measures Concerning Taxation in each business year that began before April 1, 2001 is less than the special depreciation limit referred to in that paragraph, and a corporation transfers an asset subject to the former special depreciation through a qualified company split by spin-off, etc. carried out on or after April 1, 2001 in each business year that ends within one year after the day following the end of the business year in which the provisions of that paragraph were applied (limited to the case where the corporation has continuously filed blue returns up to each of those business years), if the corporation, treating the time immediately before that qualified company split by spin-off, etc. as the end of that business year, sets aside an amount not exceeding the amount of the shortfall (where any part of that amount has already been included in deductible expenses pursuant to the provisions of paragraph (2) of that Article or this paragraph, the amount obtained by deducting that amount) as a reserve for special depreciation, the amount so set aside is included in deductible expenses in calculating the amount of income for that business year.

⑨Where, in the business year in which a corporation applies the provisions of the preceding two paragraphs, the amount set aside as a reserve for special depreciation pertains to the provisions of Article 45-2, paragraph (3), Article 46, Article 46-2, paragraph (1) or Articles 46-3 through 48 of the Former Act on Special Measures Concerning Taxation, the portion of the amount so set aside up to the special depreciation limit prescribed in those provisions is deemed to have been set aside first under the provisions of paragraph (7).

⑩The provisions of paragraphs (7) and (8) apply only if the corporation prescribed in those provisions submits a document stating the amount of the reserve for special depreciation under those provisions and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over its place for tax payment within two months after the date of the qualified company split by spin-off, etc.

⑪Where a corporation that has set aside a reserve for special depreciation under Article 52-3, paragraph (1) or (2) of the Former Act on Special Measures Concerning Taxation or paragraph (2) transfers depreciable assets to a merging corporation through a qualified merger carried out on or after April 1, 2001, the amount of the reserve for special depreciation immediately before that qualified merger is to be taken over by that merging corporation. In this case, the amount of the reserve for special depreciation taken over by that merging corporation is deemed to be the amount of the reserve for special depreciation held by that merging corporation as of the date of that qualified merger.

⑫With regard to the application of the provisions of paragraph (3) for the business year of the merging corporation prescribed in the preceding paragraph that includes the date of that qualified merger, the amount of the reserve for special depreciation carried forward from the preceding business year prescribed in that paragraph is to include the amount of the reserve for special depreciation deemed to be held by that merging corporation pursuant to the provisions of the preceding paragraph. In this case, where that merging corporation is the corporation surviving the merger, with regard to the amount of the reserve for special depreciation deemed to be held by it, the phrase "the number of months in each of those business years" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of that qualified merger to the end of the business year that includes that date".

⑬Where a corporation that has set aside a reserve for special depreciation under Article 52-3, paragraph (1) or (2) of the Former Act on Special Measures Concerning Taxation or paragraph (2), (7) or (8) falls under a case specified by Cabinet Order as a case where it has transferred an asset subject to the former special depreciation to a successor corporation in a company split through a qualified company split (including the case where it has transferred all of its depreciable assets through that qualified company split), the amount calculated pursuant to the provisions of Cabinet Order as pertaining to the asset subject to the former special depreciation so transferred, out of the amount of the reserve for special depreciation immediately before that qualified company split (where it has transferred all of its depreciable assets through that qualified company split, the amount of the reserve for special depreciation immediately before that qualified company split), is to be taken over by that successor corporation in a company split. In this case, the amount of the reserve for special depreciation taken over by that successor corporation in a company split is deemed to be the amount of the reserve for special depreciation held by that successor corporation in a company split as of the date of that qualified company split.

⑭In the case referred to in the preceding paragraph, where the qualified company split referred to in that paragraph is a company split by spin-off (meaning a company split by spin-off prescribed in Article 2, paragraph (2), item (xiii) of the New Act on Special Measures Concerning Taxation), with regard to the business year of the corporation that has set aside the reserve for special depreciation referred to in the preceding paragraph that includes the date of that 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 that qualified company split to be the end of that business year. In this case, the phrase "the number of months in each of those business years" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of that business year to the day before the date of that qualified company split".

⑮With regard to the application of the provisions of paragraph (3) for the business year of the successor corporation in a company split prescribed in paragraph (13) that includes the date of that qualified company split, the amount of the reserve for special depreciation carried forward from the preceding business year prescribed in paragraph (3) is to include the amount of the reserve for special depreciation 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 special depreciation deemed to be held by that successor corporation in a company split, the phrase "the number of months in each of those business years" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of that qualified company split to the end of the business year that includes that date".

⑯Where a corporation that has set aside a reserve for special depreciation under Article 52-3, paragraph (1) or (2) of the Former Act on Special Measures Concerning Taxation or paragraph (2), (7) or (8) falls under a case specified by Cabinet Order as a case where it has transferred an asset subject to the former special depreciation to a corporation receiving a capital contribution in kind (meaning a corporation receiving a capital contribution in kind prescribed in Article 2, paragraph (2), item (viii) of the New Act on Special Measures Concerning Taxation; the same applies hereinafter in this paragraph) through a qualified capital contribution in kind carried out on or after April 1, 2001 (including the case where it has transferred all of its depreciable assets through that qualified capital contribution in kind), the amount calculated pursuant to the provisions of Cabinet Order as pertaining to the asset subject to the former special depreciation so transferred, out of the amount of the reserve for special depreciation immediately before that qualified capital contribution in kind (where it has transferred all of its depreciable assets through that qualified capital contribution in kind, the amount of the reserve for special depreciation immediately before that qualified capital contribution in kind), is to be taken over by that corporation receiving a capital contribution in kind. In this case, the amount of the reserve for special depreciation taken over by that corporation receiving a capital contribution in kind is deemed to be the amount of the reserve for special depreciation held by that corporation receiving a capital contribution in kind as of the date of that qualified capital contribution in kind.

⑰In the case referred to in the preceding paragraph, with regard to the business year of the corporation that has set aside the reserve for special depreciation referred to in that paragraph that includes the date of that 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 that qualified capital contribution in kind to be the end of that business year. In this case, the phrase "the number of months in each of those business years" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of that business year to the day before the date of that qualified capital contribution in kind".

⑱With regard to the application of the provisions of paragraph (3) for the business year of the corporation receiving a capital contribution in kind prescribed in paragraph (16) that includes the date of that qualified capital contribution in kind, the amount of the reserve for special depreciation carried forward from the preceding business year prescribed in paragraph (3) is to include the amount of the reserve for special depreciation deemed to be held by that corporation receiving a capital contribution in kind pursuant to the provisions of paragraph (16). 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 special depreciation deemed to be held by that corporation receiving a capital contribution in kind, the phrase "the number of months in each of those business years" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of that qualified capital contribution in kind to the end of the business year that includes that date".

⑲Where a corporation that has set aside a reserve for special depreciation under Article 52-3, paragraph (1) or (2) of the Former Act on Special Measures Concerning Taxation or paragraph (2), (7) or (8) falls under a case specified by Cabinet Order as a case where it has transferred an asset subject to the former special depreciation to a transferee corporation in a post-formation acquisition (meaning a transferee corporation in a post-formation acquisition prescribed in Article 2, paragraph (2), item (x) of the New Act on Special Measures Concerning Taxation; the same applies hereinafter in this paragraph) through a qualified post-formation acquisition of assets carried out on or after April 1, 2001 (including the case where it has transferred all of its depreciable assets through that qualified post-formation acquisition of assets), the amount calculated pursuant to the provisions of Cabinet Order as pertaining to the asset subject to the former special depreciation so transferred, out of the amount of the reserve for special depreciation immediately before that qualified post-formation acquisition of assets (where it has transferred all of its depreciable assets through that qualified post-formation acquisition of assets, the amount of the reserve for special depreciation immediately before that qualified post-formation acquisition of assets), is to be taken over by that transferee corporation in a post-formation acquisition. In this case, the amount of the reserve for special depreciation taken over by that transferee corporation in a post-formation acquisition is deemed to be the amount of the reserve for special depreciation held by that transferee corporation in a post-formation acquisition as of the date of that qualified post-formation acquisition of assets.

⑳In the case referred to in the preceding paragraph, with regard to the business year of the corporation that has set aside the reserve for special depreciation referred to in that paragraph that includes the date of that qualified post-formation acquisition of assets (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 that qualified post-formation acquisition of assets to be the end of that business year. In this case, the phrase "the number of months in each of those business years" in that paragraph is deemed to be replaced with "the number of months in the period from the first day of that business year to the day before the date of that qualified post-formation acquisition of assets".

（二十一）With regard to the application of the provisions of paragraph (3) for the business year of the transferee corporation in a post-formation acquisition prescribed in paragraph (19) that includes the date of that qualified post-formation acquisition of assets, the amount of the reserve for special depreciation carried forward from the preceding business year prescribed in paragraph (3) is to include the amount of the reserve for special depreciation deemed to be held by that transferee corporation in a post-formation acquisition pursuant to the provisions of paragraph (19). In this case, with regard to the amount of the reserve for special depreciation deemed to be held by that transferee corporation in a post-formation acquisition, the phrase "the number of months in each of those business years" in paragraph (3) is deemed to be replaced with "the number of months in the period from the date of that qualified post-formation acquisition of assets to the end of the business year that includes that date".

（二十二）Beyond what is provided for in paragraphs (5), (6) and (10), necessary matters concerning the application of the provisions of paragraphs (2) through (4), paragraphs (7) through (9) and paragraph (11) through the preceding paragraph are specified by Cabinet Order.