①Where a domestic corporation that files a blue return and that, as of the date of the end of each business year, falls under the category of a corporation prescribed in Article 27-3 of the National Strategic Special Zones Act (limited to one that received the designation under that Article during the period from the effective date of the Act Partially Amending the National Strategic Special Zones Act (Act No. 55 of 2016) to March 31, 2028; hereinafter referred to as a "covered domestic corporation" in this paragraph and paragraph (3)) has, in each of those business years (limited to a business year ending within the period from the date of incorporation of the covered domestic corporation to the day on which five years have elapsed from that date (or, in the case where the covered domestic corporation is a corporation incorporated through a merger or in any other case specified by Cabinet Order, the period specified by Cabinet Order out of that period); hereinafter referred to as a "covered business year" in this Article), an amount specified by Cabinet Order as the amount of income pertaining to a specified business prescribed in Article 27-3 of the National Strategic Special Zones Act that is carried out within a National Strategic Special Zone prescribed in Article 2, paragraph (1) of that Act (including a business specified by Order of the Ministry of Finance as a business related to that specified business that is carried out in an area other than that National Strategic Special Zone; referred to as a "specified business, etc." in paragraphs (3) and (4)), the amount equivalent to 18 percent of that amount is included in deductible expenses in calculating the amount of income for each of those covered business years.

②The provisions of the preceding paragraph do not apply to a business year for which the provisions listed in the following items are applied:

③In the case where a group tax sharing corporation that is a covered domestic corporation falls under the following cases, the amount specified by Cabinet Order as the amount of income prescribed in paragraph (1) pertaining to the specified business, etc. for the covered business year of the group tax sharing corporation (limited to one ending on the date of the end of the business year of the group tax sharing parent corporation pertaining to the group tax sharing corporation; hereinafter the same applies in this paragraph) is the amount equivalent to the specified business, etc. income before loss deduction (meaning the amount specified by Cabinet Order as the amount of income pertaining to the specified business, etc. of the group tax sharing corporation calculated pursuant to the provisions of Article 64-5 of the Corporation Tax Act on the basis of the amounts specified by Cabinet Order as the income before group tax sharing and the deficit before group tax sharing prescribed in paragraph (1) of that Article (hereinafter referred to as the "income before group tax sharing" and the "deficit before group tax sharing", respectively, in this paragraph and the following paragraph) for the covered business year or the business year ending on that date (hereinafter referred to as the "covered business year, etc." in this paragraph) in the case where corporation tax were to be imposed only on the income generated from the specified business, etc. of the group tax sharing corporation and of the other group tax sharing corporations that are covered domestic corporations (limited to those that have a group tax sharing full controlling interest with the group tax sharing corporation as of the date of the end of the covered business year; referred to as "other covered group tax sharing corporations" in item (i) and the following paragraph)) (or, where that amount exceeds the amount specified by Cabinet Order as the amount of income of the group tax sharing corporation calculated pursuant to the provisions of that Article on the basis of the income before group tax sharing and the deficit before group tax sharing for that covered business year, etc. of the group tax sharing corporation and of the other group tax sharing corporations (limited to those that have a group tax sharing full controlling interest with the group tax sharing corporation as of that date; referred to as "other group tax sharing corporations" in item (ii) and the following paragraph) (hereinafter referred to as the "income before loss deduction" in this paragraph), the amount equivalent to that income before loss deduction).

④In the case referred to in the preceding paragraph, where the amount specified by Cabinet Order as the income before group tax sharing or the deficit before group tax sharing for the other business year in the case where corporation tax were to be imposed only on the income generated from the specified business, etc. of another covered group tax sharing corporation, or the income before group tax sharing or the deficit before group tax sharing for the other business year of another group tax sharing corporation, differs from the initially reported specified business, etc. income before group tax sharing or the initially reported specified business, etc. deficit before group tax sharing, or from the initially reported income before group tax sharing or the initially reported pre-aggregation loss amount (meaning, respectively, the amount stated, in the document attached to the tax return, etc. (excluding a return filed after the due date; hereinafter the same applies in this paragraph) for the other business year of another covered group tax sharing corporation, as the amount specified by Cabinet Order as the income before group tax sharing or the deficit before group tax sharing for that other business year in the case where corporation tax were to be imposed only on the income generated from the specified business, etc. of that other covered group tax sharing corporation, or the amount stated, in the document attached to the tax return, etc. for the other business year of another group tax sharing corporation, as the income before group tax sharing or the deficit before group tax sharing for that other business year of that other group tax sharing corporation; hereinafter the same applies in this paragraph), the initially reported specified business, etc. income before group tax sharing or the initially reported specified business, etc. deficit before group tax sharing, or the initially reported income before group tax sharing or the initially reported pre-aggregation loss amount, is deemed to be the amount specified by Cabinet Order as the income before group tax sharing or the deficit before group tax sharing for the other business year in the case where corporation tax were to be imposed only on the income generated from the specified business, etc. of that other covered group tax sharing corporation, or the income before group tax sharing or the deficit before group tax sharing for the other business year of the other group tax sharing corporation.

⑤If, at the end of each business year (hereinafter referred to as an "adjustment business year" in this paragraph) following the business year for which the provisions of paragraph (1) have been applied to a domestic corporation (limited to one ending on the date of the end of the business year of the group tax sharing parent corporation pertaining to the domestic corporation; hereinafter referred to as the "business year of application" in this paragraph), the deficit before group tax sharing (meaning the deficit before group tax sharing prescribed in Article 64-5, paragraph (1) of the Corporation Tax Act, excluding that deemed not to exist pursuant to the provisions of Article 64-6 of that Act; hereinafter the same applies in this paragraph and the following paragraph) incurred in the business year ending on the base date (hereinafter referred to as the "other applicable business year" in this paragraph) of any of the other group tax sharing corporations (meaning other domestic corporations that have a group tax sharing full controlling interest with the domestic corporation as of the date of the end of the business year of application of the domestic corporation (hereinafter referred to as the "base date" in this paragraph); hereinafter the same applies in this paragraph) exceeds the amount stated as the deficit before group tax sharing in the document attached to the tax return, etc. for that other applicable business year of that other group tax sharing corporation (limited to the case where the amount of that excess (hereinafter referred to as the "group tax sharing deficit shortfall amount" in this paragraph) includes an amount based on accounting that disguised facts; hereinafter referred to as the "case of an excessive return" in this paragraph), or if there is an amount stated as the deficit before group tax sharing in the document attached to the tax return, etc. (limited to a return filed after the due date) for the other applicable business year of any of the other group tax sharing corporations (hereinafter referred to as the "amount of loss stated in a late return" in this paragraph) (hereinafter referred to as the "case of a loss stated in a late return" in this paragraph), and there is an amount, out of the amount included in deductible expenses pursuant to the provisions of paragraph (1) in that business year of application, up to the amount equivalent to 18 percent of the amount calculated by multiplying the amount listed in item (i) by the ratio listed in item (ii) (where there is an amount included in gross profit pursuant to the provisions of this paragraph in a business year preceding the adjustment business year with regard to that equivalent amount, the amount obtained by deducting the total of the amounts so included; hereinafter referred to as the "amount to be added as an adjustment" in this paragraph), the amount to be added as an adjustment is included in gross profit in calculating the amount of income for the adjustment business year.

⑥In the application of the provisions of the preceding paragraph for the adjustment business year prescribed in that paragraph of the domestic corporation referred to in that paragraph, where the deficit before group tax sharing incurred in the other applicable business year prescribed in that paragraph of a group tax sharing corporation with a triggering event prescribed in item (i) of that paragraph differs from the finalized amount of deficit before group tax sharing (meaning the amount stated as the deficit before group tax sharing in the most recent of the documents attached to the tax return, etc. or amended return for that other applicable business year filed on or before the date of the end of that adjustment business year, or of the documents attached to the written notice of reassessment prescribed in Article 28, paragraph (2) of the Act on General Rules for National Taxes pertaining to a reassessment under the provisions of Article 24 or Article 26 of that Act made on or before that date; hereinafter the same applies in this paragraph), the finalized amount of deficit before group tax sharing is deemed to be the deficit before group tax sharing incurred in that other applicable business year.

⑦Where the provisions of Article 64-5, paragraph (8) of the Corporation Tax Act apply in the covered business year of the group tax sharing corporation referred to in paragraph (3), the provisions of paragraph (4) do not apply to that covered business year. In this case, the provisions of the preceding two paragraphs are not to apply to the adjustment business year prescribed in paragraph (5) of the domestic corporation referred to in that paragraph for which that covered business year is the business year of application prescribed in that paragraph.

⑧The provisions of paragraph (1) apply only if the tax return, etc. for the business year for which the corporation seeks the application of the provisions of that paragraph contains a statement concerning the inclusion in deductible expenses of the amount to be included in deductible expenses pursuant to the provisions of that paragraph, and has attached to it a written statement concerning the calculation of the amount to be included in deductible expenses. In this case, the amount to be included in deductible expenses pursuant to the provisions of that paragraph is to be limited to the amount that should be included in deductible expenses as stated in that statement.

⑨Even where a tax return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, the district director may, when the district director finds that there were unavoidable circumstances for the absence of the statement or attachment, apply the provisions of paragraph (1), only if a document containing that statement and the written statement referred to in that paragraph are submitted.

⑩With regard to the application of the provisions of Article 67, paragraphs (3) and (5) of the Corporation Tax Act, the amount included in deductible expenses pursuant to the provisions of paragraph (1) of a corporation to which the provisions of that paragraph have been applied is to be included in the amount of income, etc. prescribed in those provisions, and, with regard to the application of the provisions of paragraphs (3) and (5) of that Article, the amount included in gross profit pursuant to the provisions of paragraph (5) is not to be included in the amount of income, etc. prescribed in those provisions.

⑪Beyond what is provided for in paragraph (2) and the preceding three paragraphs, the calculation of the amount of revenue reserves of a corporation to which the provisions of paragraph (1) or paragraph (5) have been applied and other necessary matters concerning the application of the provisions of paragraph (1) or paragraphs (3) through (7) are specified by Cabinet Order.