①If a corporation has, within the period from April 1, 1970 to March 31, 2029 (or, for those of the assets listed in the left-hand column of item (iv) of the table in paragraph (1) of the preceding Article that are used for the construction business or any other business specified by Cabinet Order prescribed in that column, March 31, 2028) (referred to in the following paragraph as "the applicable period"), transferred any of the assets held by it that are listed in the left-hand column of the items of that table (excluding land, etc. to whose transfer the provisions of Article 63, paragraph (1) apply), and is expected to acquire an asset listed in the right-hand column of the relevant item within the period from the day following the day of the end of the business year that includes the day of the transfer (excluding the business year that includes the day of dissolution and the business year that includes the day before the day of a merger (excluding a qualified merger) of a merged corporation) until the day on which one year has elapsed (or, where, due to the unavoidable circumstances specified by Cabinet Order prescribed in paragraph (3) of the preceding Article, it is difficult to acquire an asset listed in the right-hand column of the relevant item within that period and the corporation has obtained the approval of the district director with jurisdiction over the place for tax payment pursuant to the provisions of Cabinet Order, the period until the day, within two years after that day, recognized by the district director as the day by which the asset can be acquired; hereinafter referred to in this paragraph and paragraph (4), item (ii) as the "designated acquisition period"), and is expected to use the acquired asset, within one year from the day of the acquisition, for the corporation's business within the area prescribed in the right-hand column of the relevant item (for the assets listed in the right-hand column of item (iv) of that table, for the business of the corporation) (including the case where, where the corporation carries out a qualified merger in which it becomes the merged corporation, the merging corporation pertaining to that qualified merger is expected to acquire an asset listed in the right-hand column of the relevant item within the designated acquisition period and is expected, within one year from the day of the acquisition, to use the acquired asset for the business within the area prescribed in the right-hand column of the relevant item that it receives the transfer of through that qualified merger (for the assets listed in the right-hand column of item (iv) of that table, for the business of which it receives the transfer), and any other case specified by Cabinet Order), then, only if the corporation has accounted for an amount not exceeding the amount equivalent to 80 percent (or 60 percent, where the transferred asset falls under the assets listed in the left-hand column of item (ii) of that table and the asset that it is expected to acquire falls under the assets listed in the right-hand column of that item (limited to those located within the area listed in (c) of that column); the same applies in the following paragraph) of the amount calculated by multiplying, by the gain ratio, the amount, out of the amount of consideration for the transfer of the transferred asset, that it intends to appropriate for the acquisition of an asset listed in the right-hand column of the relevant item of that table pertaining to the transferred asset, by the method of establishing a special account in the finalized settlement of accounts for the business year that includes the day of the transfer (including the method of setting it aside as a reserve through the appropriation of surplus by the day on which the settlement of accounts for that business year is finalized), the amount equivalent to the amount so accounted for is included in deductible expenses in calculating the amount of income for that business year.

②If a corporation has made a transfer prescribed in the preceding paragraph within the applicable period and carries out, in the business year that includes the day of the transfer, a qualified company split or a qualified capital contribution in kind (limited to one carried out on or after that day; hereinafter referred to in this Article, except in paragraph (8), as a "qualified company split, etc."), and the following requirements are satisfied, then, only if the corporation has established the equivalent of the special account referred to in the preceding paragraph (hereinafter referred to in this Article as a "special account during the year") within the limit of the amount equivalent to 80 percent of the amount calculated by multiplying, by the gain ratio, the amount, out of the amount of consideration for the transfer of the transferred asset, that the successor corporation in a company split or the corporation receiving a capital contribution in kind pertaining to the qualified company split, etc. intends to appropriate for the acquisition of an asset listed in the right-hand column of the relevant item of the table in paragraph (1) of the preceding Article pertaining to the transferred asset, the amount equivalent to the amount of the special account during the year so established is included in deductible expenses in calculating the amount of income for that business year:

③The provisions of the preceding paragraph apply only if the corporation seeking the application of the provisions of that paragraph has submitted to the district director with jurisdiction over the place for tax payment, within two months after the day of the qualified company split, etc., a document stating the amount of the special account during the year and other matters specified by Order of the Ministry of Finance.

④If a corporation has carried out a qualified merger, a qualified company split or a qualified capital contribution in kind, the amount of the special account or the amount of the special account during the year specified in the following items according to the category of qualified merger, qualified company split or qualified capital contribution in kind listed in those items is to be taken over by the merging corporation, successor corporation in a company split or corporation receiving a capital contribution in kind pertaining to that qualified merger, qualified company split or qualified capital contribution in kind:

⑤The provisions of the preceding paragraph apply, in the case of a corporation that has established the special account referred to in paragraph (1) and has carried out a qualified company split, etc. (excluding a corporation that has established both that special account and a special account during the year and has only the amount of the special account during the year taken over by the successor corporation in a company split or the corporation receiving a capital contribution in kind through the qualified company split, etc.), only if the corporation that has established that special account has submitted to the district director with jurisdiction over the place for tax payment, within two months after the day of the qualified company split, etc., a document stating the amount of that special account to be taken over by the successor corporation in a company split or the corporation receiving a capital contribution in kind through the qualified company split, etc. and other matters specified by Order of the Ministry of Finance.

⑥The amount of the special account or the amount of the special account during the year taken over by a merging corporation, successor corporation in a company split or corporation receiving a capital contribution in kind pursuant to the provisions of paragraph (4) is deemed to be the amount of the special account established by that merging corporation, successor corporation in a company split or corporation receiving a capital contribution in kind pursuant to the provisions of paragraph (1).

⑦The provisions of paragraph (1) of the preceding Article apply mutatis mutandis where a corporation that has established the special account referred to in paragraph (1) has acquired an asset listed in the right-hand column of the relevant item of the table in paragraph (1) of that Article pertaining to that special account within the designated acquisition period prescribed in paragraph (1) (or, where the amount of that special account is the amount of a special account during the year taken over pursuant to the provisions of paragraph (4) or in any other case specified by Cabinet Order, the period prescribed in paragraph (2), item (i) or any other period specified by Cabinet Order; referred to in the following paragraph and paragraph (12) as the "designated acquisition period"), and has, within one year from the day of the acquisition, used the replacement asset for the corporation's business within the area prescribed in the right-hand column of the relevant item (for the assets listed in the right-hand column of item (iv) of that table, for the business of the corporation) (excluding the case where it has ceased to use it for that business within the business year that includes the day of the acquisition), or is expected to use it as such (including the case where, in the case of transferring the replacement asset to a merging corporation through a qualified merger, the merging corporation is expected to use the replacement asset for the business within the area prescribed in the right-hand column of the relevant item that it receives the transfer of through the qualified merger (for the assets listed in the right-hand column of item (iv) of that table, for the business of which it receives the transfer), and any other case specified by Cabinet Order). In this case, the phrase "replacement asset (limited to a replacement asset in the case where the corporation has, pursuant to the provisions of Cabinet Order, notified the district director with jurisdiction over the place for tax payment that it seeks the application of the provisions of this paragraph)" in paragraph (1) of that Article is deemed to be replaced with "replacement asset", and the phrase "the finalized settlement of accounts for that business year" with "the finalized settlement of accounts for the business year that includes the day on which the replacement asset was acquired".

⑧The provisions of paragraph (9) of the preceding Article apply mutatis mutandis where a corporation that has established the special account referred to in paragraph (1) carries out a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (limited to one carried out on or after the day of the transfer prescribed in that paragraph; hereinafter referred to in this paragraph as a "qualified company split, etc."), and the corporation has acquired an asset listed in the right-hand column of the relevant item of the table in paragraph (1) of that Article pertaining to that special account within the designated acquisition period of the business year that includes the day of the qualified company split, etc., and transfers the replacement asset (limited to one that has been used for the corporation's business within the area prescribed in the right-hand column of the relevant item (for the assets listed in the right-hand column of item (iv) of that table, for the business of the corporation) and has been continuously used for that business until immediately before the qualified company split, etc., or one that is expected to be used, within one year from the day of the acquisition, by the successor corporation in a company split, the corporation receiving a capital contribution in kind or the corporation receiving a distribution in kind pertaining to the qualified company split, etc. (hereinafter referred to in this paragraph as a "successor corporation in a split, etc.") for the business within the area prescribed in the right-hand column of the relevant item that it receives the transfer of through the qualified company split, etc. (for the assets listed in the right-hand column of item (iv) of that table, for the business of which it receives the transfer)) to a successor corporation in a split, etc. through the qualified company split, etc. In this case, the phrase "replacement asset (limited to a replacement asset in the case where the corporation has, pursuant to the provisions of Cabinet Order, notified the district director with jurisdiction over the place for tax payment that it seeks the application of the provisions of this paragraph)" in paragraph (9) of that Article is deemed to be replaced with "replacement asset", and the phrase "in calculating the amount of income for that business year" with "in calculating the amount of income for the business year that includes the day on which the replacement asset was acquired".

⑨In the case referred to in the preceding two paragraphs, of the amount of the special account referred to in paragraph (1) pertaining to the replacement asset, the amount specified by Cabinet Order as the amount of the portion corresponding to the amount calculated by multiplying the base acquisition cost for reduction entry of the replacement asset by the gain ratio is included in gross profit in calculating the amount of income for the business year that includes the day of the acquisition of the replacement asset.

⑩If a corporation that has established the special account referred to in paragraph (1) has carried out a non-qualified share exchange, etc. prescribed in Article 62-9, paragraph (1) of the Corporation Tax Act in which it becomes the wholly owned subsidiary corporation in a share exchange, etc. or the wholly owned subsidiary corporation in a share transfer (hereinafter referred to in this paragraph as a "non-qualified share exchange, etc."), and holds the amount of the special account referred to in paragraph (1) (excluding an amount less than the amount specified by Cabinet Order) at the time immediately before the non-qualified share exchange, etc., the amount of that special account is included in gross profit in calculating the amount of income for the business year that includes the day of the non-qualified share exchange, etc.

⑪If a corporation that has established the special account referred to in paragraph (1) has come to fall under a domestic corporation prescribed in Article 64-11, paragraph (1) of the Corporation Tax Act, another domestic corporation prescribed in Article 64-12, paragraph (1) of that Act or a group tax sharing corporation prescribed in Article 64-13, paragraph (1) of that Act (limited to one that falls under the requirement listed in item (i) of that paragraph), and holds the amount of the special account referred to in paragraph (1) (excluding an amount less than the amount specified by Cabinet Order) at the end of the business year immediately before the start of group tax sharing prescribed in Article 64-11, paragraph (1) of that Act, the business year immediately before joining group tax sharing prescribed in Article 64-12, paragraph (1) of that Act or the business year immediately before the end of group tax sharing prescribed in Article 64-13, paragraph (1) of that Act, the amount of that special account is included in gross profit in calculating the amount of income for that business year immediately before the start of group tax sharing, that business year immediately before joining group tax sharing or that business year immediately before the end of group tax sharing.

⑫If a corporation that has established the special account referred to in paragraph (1) has come to fall under any of the cases listed in the following items (excluding the case where it is to have that special account taken over by a merging corporation, successor corporation in a company split or corporation receiving a capital contribution in kind pursuant to the provisions of paragraph (4)), 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 (or, in the case listed in item (iv), the business year that includes the day before the day of the merger):

⑬The provisions of paragraph (2) of the preceding Article apply mutatis mutandis where the provisions of paragraph (7) or (8) are applied. In this case, the phrase "the area of the land, etc." in paragraph (2) of that Article is deemed to be replaced with "the total of the area of the land, etc. and the area of the land, etc. among the replacement assets prescribed in paragraph (7) or (8) of the following Article pertaining to the transfer that formed the basis of the special account referred to in paragraph (1) of that Article".

⑭The provisions of paragraph (4) of the preceding Article apply mutatis mutandis where a corporation that has received the application of the provisions of paragraph (7) does not use, or has ceased to use, the replacement asset prescribed in that paragraph (excluding one that falls under the assets subject to market value assessment prescribed in Article 64-11, paragraph (1), Article 64-12, paragraph (1) or Article 64-13, paragraph (1) of the Corporation Tax Act to which those provisions have been applied in a business year on or after the business year in which the provisions of paragraph (7) were applied) for the corporation's business within the area prescribed in the right-hand column of the relevant item of the table in paragraph (1) of the preceding Article pertaining to the replacement asset (for the assets listed in the right-hand column of item (iv) of that table, for the business of the corporation) within one year from the day on which it acquired the replacement asset (excluding the case where it transfers the replacement asset to a merging corporation, a successor corporation in a company split, a corporation receiving a capital contribution in kind or a corporation receiving a distribution in kind (referred to in the following paragraph as a "merging corporation, etc.") through a qualified merger, a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (referred to in the following paragraph as a "qualified merger, etc.")).

⑮The provisions of paragraph (12) of the preceding Article apply mutatis mutandis where a merging corporation, etc. that has received, through a qualified merger, etc., the transfer of a replacement asset prescribed in paragraph (7) or (8) to which those provisions have been applied (excluding one that falls under the assets subject to market value assessment prescribed in Article 64-11, paragraph (1), Article 64-12, paragraph (1) or Article 64-13, paragraph (1) of the Corporation Tax Act to which those provisions have been applied in a business year on or after the business year in which the provisions of paragraph (7) or (8) were applied) does not use, or has ceased to use, the replacement asset, within one year from the day on which the merged corporation, splitting corporation, corporation making a capital contribution in kind or corporation making a distribution in kind pertaining to the qualified merger, etc. acquired the replacement asset, for the business within the area prescribed in the right-hand column of the relevant item of the table in paragraph (1) of the preceding Article that the merging corporation, etc. received the transfer of through the qualified merger, etc. (for the assets listed in the right-hand column of item (iv) of that table, for the business of which it received the transfer) (excluding the case where it transfers the replacement asset to a merging corporation, etc. through a qualified merger, etc.).

⑯The provisions of paragraphs (5) and (6) of the preceding Article apply mutatis mutandis where the provisions of paragraph (1) or (7) are applied, the provisions of paragraphs (7) and (8) of that Article apply mutatis mutandis to a replacement asset to which the provisions of paragraph (7) or (8) have been applied, and the provisions of paragraph (11) of that Article apply mutatis mutandis where the provisions of paragraph (8) are applied. In this case, when the provisions of paragraph (1) are applied, the phrase "written statement" in paragraphs (5) and (6) of that Article is deemed to be replaced with "written statement, a document stating the matters specified by Order of the Ministry of Finance concerning the asset that the corporation is expected to acquire".

⑰The provisions of paragraph (13) of the preceding Article apply mutatis mutandis to a replacement asset to which the provisions of paragraph (7) or (8) have been applied.

⑱The provisions of paragraph (14) of the preceding Article apply mutatis mutandis where the provisions of paragraph (1), (2), (7) or (8) (limited to the part pertaining to item (iii) of the table in paragraph (1) of that Article) are applied. In this case, when the provisions of paragraph (1) or (2) are applied, the phrase "has acquired" in paragraph (14) of that Article is deemed to be replaced with "is expected to acquire", the phrase "the reduction entry limit prescribed in paragraph (1)" with "the amount equivalent to 80 percent prescribed in paragraph (1) or (2) of the following Article", the phrase "that paragraph" with "those paragraphs", and the phrase "in paragraph (1)" in the items of that paragraph with "in paragraph (1) or (2) of the following Article".

⑲If it has become difficult for a corporation to acquire an asset listed in the right-hand column of the items of the table in paragraph (1) of the preceding Article within the designated acquisition period prescribed in paragraph (7) due to unavoidable circumstances arising from an extraordinary disaster designated as a specified extraordinary disaster pursuant to the provisions of Article 2, paragraph (1) of the Act on Special Measures concerning Preservation of Rights and Interests of Victims of Specified Disaster, and the corporation is expected to acquire an asset listed in the right-hand column of the relevant item during the period from the first day of the designated acquisition period until the day specified by Cabinet Order that falls within two years after the last day of the designated acquisition period and has obtained the approval of the district director with jurisdiction over the place for tax payment pursuant to the provisions of Order of the Ministry of Finance, then, with regard to the application of the provisions of the preceding paragraphs, the designated acquisition period prescribed in those provisions is to be the period from that first day until the day specified by Cabinet Order.

⑳Beyond what is specified in paragraph (16) through the preceding paragraph, the calculation of the amount of the special account referred to in paragraph (1) in the case where the asset transferred as referred to in paragraph (1) falls under the assets listed in the left-hand column of two or more items of the table in paragraph (1) of the preceding Article, and other necessary matters concerning the application of the provisions of paragraphs (1) through (15) are specified by Cabinet Order.