①If an individual who files a blue return and who is an approved regional economy advancement business operator prescribed in Article 25 of the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects (Act No. 40 of 2007), during the period from the date of enforcement of the Act Partially Amending the Act on the Formation and Vitalization of Industrial Clusters in Regions through the Promotion of Business Location, etc. (Act No. 47 of 2017) to March 31, 2028 (referred to as the "designated period" in paragraph (3)), newly establishes or expands specified facilities, etc. for a regional economy advancement project (meaning facilities or equipment set forth in an approved regional economy advancement project plan, which are of a scale specified by Cabinet Order; the same applies hereinafter in this paragraph and paragraph (3)) in accordance with the approved regional economy advancement project plan (meaning an approved regional economy advancement project plan prescribed in Article 14, paragraph (2) of the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects; the same applies hereinafter in this paragraph and paragraph (3)) pertaining to an approved regional economy advancement project prescribed in Article 25 of that Act that the individual conducts (hereinafter referred to as an "approved regional economy advancement project" through paragraph (3)), within the promotion area prescribed in Article 4, paragraph (2), item (i) of the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects (referred to as the "promotion area" in paragraph (3)) pertaining to that approved regional economy advancement project, and acquires machinery and equipment, furniture and fixtures, buildings and their associated facilities, and structures that constitute the specified facilities, etc. for a regional economy advancement project pertaining to the new establishment or expansion (hereinafter referred to as "machinery, etc. for specified business use" in this Article) that have not been put to use for business since their manufacture or construction, or manufactures or constructs machinery, etc. for specified business use pertaining to the new establishment or expansion, and puts it to use in the approved regional economy advancement project (excluding where it is put to use for lending; the same applies in paragraph (3)), the amount to be included in necessary expenses as the depreciation allowance for the machinery, etc. for specified business use in calculating the amount of business income of the individual for the year that includes the date on which it was put to use in the approved regional economy advancement project (excluding the year that includes the date on which the individual discontinued the business, and any year that includes a day within the period specified by Order of the Ministry of Finance as the period of the plan for investment in specified productivity-enhancing equipment, etc. prescribed in Article 10-5-6, paragraph (1) of an individual who has received the confirmation prescribed in that paragraph; referred to as the "year of commencement of use" in paragraph (3)) is, notwithstanding the provisions of Article 49, paragraph (1) of the Income Tax Act, the amount calculated by the individual as necessary expenses that does not exceed the sum (referred to as the "total depreciation limit" in the following paragraph) of the amount of the depreciation allowance calculated for the machinery, etc. for specified business use pursuant to the provisions of that paragraph and the special depreciation limit (meaning the amount calculated by multiplying the acquisition cost of the machinery, etc. for specified business use (if the total acquisition cost of the machinery and equipment, furniture and fixtures, buildings and their associated facilities, and structures that constitute a single set of specified facilities, etc. for a regional economy advancement project pertaining to the machinery, etc. for specified business use exceeds 8 billion yen, the amount calculated by multiplying 8 billion yen by the ratio of the acquisition cost of the machinery, etc. for specified business use to that total; referred to as the "base acquisition cost" in paragraph (3)) by the rate specified in each of the following items according to the category of depreciable assets listed in that item); provided, however, that the amount may not be less than the amount to be included in necessary expenses as the depreciation allowance for the machinery, etc. for specified business use pursuant to the provisions of paragraph (1) of that Article.

②If the amount included in necessary expenses as the depreciation allowance for the machinery, etc. for specified business use pursuant to the provisions of the preceding paragraph is less than its total depreciation limit, the amount to be included in necessary expenses as the depreciation allowance for the machinery, etc. for specified business use in calculating the amount of business income for the year following the year in which the machinery, etc. for specified business use was put to use in the approved regional economy advancement project may be, notwithstanding the provisions of Article 49, paragraph (1) of the Income Tax Act, the amount equivalent to the sum of the amount to be included in necessary expenses as the depreciation allowance for the machinery, etc. for specified business use pursuant to the provisions of that paragraph and the amount calculated by the individual as necessary expenses that does not exceed the shortfall.

③If an individual who files a blue return and who is an approved regional economy advancement business operator prescribed in Article 25 of the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects, during the designated period, newly establishes or expands specified facilities, etc. for a regional economy advancement project in accordance with the approved regional economy advancement project plan pertaining to the approved regional economy advancement project that the individual conducts, within the promotion area pertaining to that approved regional economy advancement project, and acquires machinery, etc. for specified business use pertaining to the new establishment or expansion that have not been put to use for business since their manufacture or construction, or manufactures or constructs machinery, etc. for specified business use pertaining to the new establishment or expansion, and puts it to use in the approved regional economy advancement project, the sum of the amounts calculated by multiplying the base acquisition cost of the machinery, etc. for specified business use put to use in the approved regional economy advancement project by the rate specified in each of the following items according to the category of depreciable assets listed in that item (hereinafter referred to as the "maximum tax credit" in this paragraph) is deducted, pursuant to the provisions of Cabinet Order, from the amount of income tax on the amount of gross income for the year of commencement of use, except where the provisions of paragraph (1) are applied to the machinery, etc. for specified business use. In this case, if the individual's maximum tax credit for the year of commencement of use exceeds the amount equivalent to 20 percent of the individual's income tax on business income before adjustment prescribed in Article 10, paragraph (8), item (iv) for that year of commencement of use, the amount to be deducted is limited to the amount equivalent to that 20 percent.

④The provisions of paragraph (1) do not apply to machinery, etc. for specified business use acquired by an individual through a lease transaction without transfer of ownership.

⑤The provisions of paragraphs (1) and (2) apply only if the final return contains an entry concerning the inclusion of the amount to be included in necessary expenses pursuant to those provisions and has a written statement attached thereto concerning the calculation of the amount of the depreciation allowance for the machinery, etc. for specified business use.

⑥The provisions of paragraph (3) apply only if a document stating the acquisition cost of the machinery, etc. for specified business use, the amount to be deducted, and the details of the calculation of that amount, which are subject to the deduction under that paragraph, is attached to the final return (including an amended return or written request for reassessment, if one is filed to increase the amount to be deducted pursuant to the provisions of that paragraph). In this case, the acquisition cost of the machinery, etc. for specified business use serving as the basis for the calculation of the amount to be deducted pursuant to that paragraph is limited to the acquisition cost of the machinery, etc. for specified business use stated in the document attached to the final return.

⑦With regard to the calculation of the amount of income tax listed in Article 120, paragraph (1), item (iii) of the Income Tax Act where the provisions of paragraph (3) are applied with respect to income tax for a year, the phrase "Chapter III (Calculating the Amount of Taxes)" in that item is deemed to be replaced with "Chapter III (Calculating the Amount of Taxes) and Article 10-4, paragraph (3) of the Act on Special Measures Concerning Taxation (Special Tax Credit for Income Tax Where Machinery, etc. for Specified Business Use Is Acquired in a Promotion Area for Regional Economy Advancement Projects)".

⑧Beyond what is provided for in paragraph (4) through the preceding paragraph, necessary matters concerning the application of the provisions of paragraphs (1) through (3) are specified by Cabinet Order.