①Where assets (excluding inventory assets; hereinafter the same applies in this Article, the following Article, Article 65, paragraph (3), and Article 65-2) held by a corporation (excluding a corporation in liquidation; hereinafter the same applies in this Article, the following Article, Article 65, paragraphs (3) and (5), and Article 65-2) prescribed in the following items have come to fall under the cases listed in those items (excluding the case that falls under the provisions of Article 65, paragraph (1)), if the corporation, in the business year that includes the date of the expropriation, purchase, replotting disposition, rights conversion, acquisition or extinction prescribed in those items (hereinafter referred to as "expropriation, etc." in this Subsection), acquires (excluding acquisition through a lease transaction without transfer of ownership and including manufacture and construction; hereinafter the same applies up to Article 65), with an amount equivalent to all or part of the amount of the compensation, consideration or settlement money prescribed in those items (where there are expenses required for the transfer (including extinction and decrease in value; hereinafter the same applies in this Subsection) of the assets, the amount after deducting the amount specified by Cabinet Order as having been paid out of the amount of the compensation, consideration or settlement money; hereinafter the same applies in this Article and the following Article), assets specified by Cabinet Order as assets of the same type as the assets transferred through the expropriation, etc. or other assets that are to replace them (hereinafter referred to as "substitute assets" up to Article 65), and, for those substitute assets, reduces their book value through accounting as an expense or loss within the limit of the amount calculated by multiplying their acquisition cost (where that amount exceeds the amount of the compensation, consideration or settlement money (excluding the amount specified by Cabinet Order as the amount of the part pertaining to the acquisition of substitute assets already acquired), the amount obtained by deducting the excess; the same applies in paragraph (3) and paragraph (9) of the following Article) by the ratio of the remaining amount obtained by deducting the book value of the transferred assets immediately before the transfer from the amount of the compensation, consideration or settlement money to the amount of the compensation, consideration or settlement money (referred to as the "gain ratio" in paragraph (3) and the following Article) (hereinafter referred to as the "reduction entry limit" in this Article), or, instead of reducing their book value, accounts for an amount not exceeding the reduction entry limit by the method of setting it aside as a reserve in the finalized settlement of accounts for that business year (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 reduced or accounted for is included in deductible expenses in calculating the amount of income for that business year.

②Where assets held by a corporation have come to fall under a case listed in any of the following items, with regard to the application of the provisions of the preceding paragraph, a transfer through expropriation, etc. is deemed to have been made with regard to: in the case of item (i), the land, etc. prescribed in that item; and in the case of item (ii), the assets on the land prescribed in that item (where the compensation prescribed in that item compensates for part of the value of those assets, the part of those assets specified by Cabinet Order as corresponding to the compensation). In this case, the amount of the compensation or consideration prescribed in item (i) or item (ii) is deemed to be the amount of the compensation, consideration or settlement money prescribed in that paragraph.

③In the case referred to in paragraph (1), where the corporation has acquired assets that are to become substitute assets during the period from the day one year (or, where there are unavoidable circumstances specified by Cabinet Order, such as that the period required for the construction of a factory, etc. normally exceeds one year, the period specified by Cabinet Order) before the first day of the business year that includes the date of the expropriation, etc. (or, where that day is before the day on which it became clear that the corporation would transfer assets it holds through the expropriation, etc., the latter day) until the day before that first day, the corporation may receive the application of the provisions of that paragraph by deeming those assets to be substitute assets that fall under the provisions of that paragraph. In this case, the reduction entry limit pertaining to those assets, where those assets are depreciable assets, is the amount calculated pursuant to the provisions of Cabinet Order on the basis of the amount calculated by multiplying the acquisition price of those assets by the gain ratio.

④The amount of compensation prescribed in paragraph (1), item (i), item (v), item (vii) or item (viii) means, regardless of its nominal designation, the amount that constitutes consideration for the expropriation, etc. of the assets, and does not include relocation expenses received upon the expropriation, etc. or any other amount other than the amount that constitutes consideration for the expropriation, etc. of the assets.

⑤The provisions of paragraph (1) apply only where the tax return, etc. 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, and the documents specified by Order of the Ministry of Finance as documents proving that the assets for which the application of the provisions of that paragraph is sought have come to fall under a case listed in any of the items of that paragraph or any of the items of paragraph (2) are preserved.

⑥Even where a tax return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, or the documents specified by Order of the Ministry of Finance referred to in that paragraph have not been preserved, the district director may, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment or to preserve the documents, apply the provisions of paragraph (1), but only where a document containing the statement, the written statement referred to in that paragraph and the documents specified by Order of the Ministry of Finance are submitted.

⑦The provisions listed in the items of Article 53, paragraph (1) do not apply to assets to which the provisions of paragraph (1) have been applied.

⑧Where the provisions of laws and regulations concerning corporation tax are applied to substitute assets to which the provisions of paragraph (1) have been applied, the amount included in deductible expenses in calculating the amount of income for each business year pursuant to the provisions of that paragraph is not included in the acquisition price of those substitute assets.

⑨Where a corporation (limited to a corporation whose assets prescribed in the items of paragraph (1) have come to fall under the cases listed in those items (including where a transfer through expropriation, etc. is deemed to have been made, pursuant to the provisions of paragraph (2), with regard to the land, etc. prescribed in item (i) of that paragraph or the assets on the land prescribed in item (ii) of that paragraph, and excluding where the provisions of Article 65, paragraph (1) apply)) 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 that date; hereinafter referred to as a "qualified company split, etc." in this paragraph and paragraph (11)) in the business year that includes the date of the expropriation, etc., if the corporation has acquired substitute assets, with an amount equivalent to all or part of the amount of the compensation, consideration or settlement money, during the period from the start of that business year until immediately before the qualified company split, etc., and transfers those substitute assets to the successor corporation in a company split, the corporation receiving a capital contribution in kind or the corporation receiving a distribution in kind through the qualified company split, etc., then, only where the corporation has reduced the book value of those substitute assets within the limit of an amount equivalent to the reduction entry limit pertaining to those substitute assets, an amount equivalent to the amount of that reduction is included in deductible expenses in calculating the amount of income for that business year.

⑩The provisions of paragraph (3) apply mutatis mutandis to the case prescribed in the preceding paragraph, and the provisions of paragraphs (7) and (8) apply mutatis mutandis to substitute assets to which the provisions of the preceding paragraph have been applied.

⑪The provisions of paragraph (9) apply only where the corporation seeking the application of the provisions of that paragraph submits, within two months after the date of the qualified company split, etc., a document stating the amount of the reduction prescribed in that paragraph and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over its place for tax payment.

⑫Where 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 that has received a transfer of substitute assets to which the provisions of paragraph (1) or paragraph (9) have been applied through a qualified merger, a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (hereinafter referred to as a "qualified merger, etc." in this paragraph) applies the provisions of laws and regulations concerning corporation tax to those substitute assets, the amount that was not included in the acquisition price of those substitute assets by 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. is not included in the acquisition price of those substitute assets.

⑬Beyond what is provided for in paragraphs (5) through (8) and the preceding three paragraphs, matters necessary for the application of the provisions of paragraph (1) and paragraph (9) are specified by Cabinet Order.

①Where assets held by a corporation that are prescribed in the items of paragraph (1) of the preceding Article have come to fall under the cases listed in those items (including where a transfer through expropriation, etc. is deemed to have been made, pursuant to the provisions of paragraph (2) of that Article, with regard to the land, etc. prescribed in item (i) of that paragraph or the assets on the land prescribed in item (ii) of that paragraph, and excluding where the provisions of paragraph (1) of the following Article apply; the same applies in the following paragraph), if the corporation is expected to acquire substitute assets, within the period from the day following the last day of the business year that includes the date of the expropriation, etc. (excluding a business year that includes the date of dissolution and a business year that includes the day before the date of a merger (excluding a qualified merger) of a merged corporation) until the day on which two years have elapsed from the date of the expropriation, etc. (in a case specified by Cabinet Order where it is difficult to acquire substitute assets within that period because all or part of the project pertaining to the expropriation, etc. has not been completed, the period required for the construction of a factory, etc. normally exceeds two years, or there are other unavoidable circumstances, with regard to those substitute assets, the period from the day following that last day until the date specified by Cabinet Order; hereinafter referred to as the "designated period" in this paragraph and paragraph (4), item (ii)), with an amount equivalent to all or part of the amount of the compensation, consideration or settlement money (where, in the business year that includes the date of the expropriation, etc., substitute assets have been acquired with an amount equivalent to part of the amount of the compensation, consideration or settlement money, or where assets that are to become substitute assets have been acquired during the period from the day one year before prescribed in paragraph (3) of the preceding Article pertaining to the expropriation, etc. until the day before the first day of the business year that includes the date of the expropriation, etc., the amount after deducting the acquisition price of those assets; hereinafter the same applies in this Article) (including where, in the case where the corporation carries out a qualified merger in which it is the merged corporation, the merging corporation pertaining to the qualified merger is expected to acquire substitute assets within the designated period, and other cases specified by Cabinet Order; the same applies in paragraph (3) of the following Article), then, only where the corporation has accounted for an amount not exceeding the amount calculated by multiplying the amount of the compensation, consideration or settlement money that it intends to appropriate for the acquisition of those substitute assets by the gain ratio, by the method of setting up a special account in the settlement of accounts finalized for the business year that includes the date of the expropriation, etc. (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), an amount equivalent to the amount so accounted for is included in deductible expenses in calculating the amount of income for that business year.

②Where a corporation (limited to a corporation whose assets prescribed in the items of paragraph (1) of the preceding Article have come to fall under the cases listed in those items) carries out a qualified company split or a qualified capital contribution in kind (limited to one carried out on or after that date; hereinafter referred to as a "qualified company split, etc." in this Article, except in paragraph (8)) in the business year that includes the date of the expropriation, etc., if the successor corporation in a company split or the corporation receiving a capital contribution in kind pertaining to the qualified company split, etc. is expected to acquire substitute assets, with an amount equivalent to all or part of the amount of the compensation, consideration or settlement money, within the period from the date of the qualified company split, etc. until the day on which two years have elapsed from the date of the expropriation, etc. (in a case specified by Cabinet Order where it is difficult for the successor corporation in a company split or the corporation receiving a capital contribution in kind to acquire substitute assets within that period because all or part of the project pertaining to the expropriation, etc. has not been completed, the period required for the construction of a factory, etc. normally exceeds two years, or there are other unavoidable circumstances, with regard to those substitute assets, the period from the date of the qualified company split, etc. until the date specified by Cabinet Order), then, only where the corporation has set up an account equivalent to the special account referred to in the preceding paragraph (hereinafter referred to as a "special account during the year" in this Article) within the limit of the amount calculated by multiplying the amount of the compensation, consideration or settlement money that the successor corporation in a company split or the corporation receiving a capital contribution in kind intends to appropriate for the acquisition of those substitute assets by the gain ratio, an amount equivalent to the amount of the special account during the year so set up is included in deductible expenses in calculating the amount of income for that business year.

③The provisions of the preceding paragraph apply only where the corporation seeking the application of the provisions of that paragraph submits, within two months after the date 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 to the district director having jurisdiction over its place for tax payment.

④Where a corporation has carried out a qualified merger, a qualified company split or a qualified capital contribution in kind (hereinafter referred to as a "qualified merger, etc." in this paragraph), the amount of the special account or the amount of the special account during the year specified in each of the following items according to the category of qualified merger, etc. listed in that item is to be succeeded to by the merging corporation, the successor corporation in a company split or the corporation receiving a capital contribution in kind pertaining to the qualified merger, etc. (hereinafter referred to as the "merging corporation, etc." in this Article).

⑤The provisions of the preceding paragraph apply, in the case of a corporation that has set up the special account referred to in paragraph (1) and has carried out a qualified company split, etc. (excluding a corporation that has set up both that special account and a special account during the year and that passes on only the amount of the special account during the year to the successor corporation in a company split or the corporation receiving a capital contribution in kind through the qualified company split, etc.), only where the corporation that has set up the special account submits, within two months after the date of the qualified company split, etc., a document stating the amount of the special account to be passed on to 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 to the district director having jurisdiction over its place for tax payment.

⑥The amount of the special account or the amount of the special account during the year succeeded to by the merging corporation, etc. pursuant to the provisions of paragraph (4) is deemed to be the amount of the special account set up by the merging corporation, etc. pursuant to the provisions of paragraph (1).

⑦The provisions of paragraph (1) of the preceding Article apply mutatis mutandis where a corporation that has set up the special account referred to in paragraph (1) has acquired substitute assets, with an amount equivalent to all or part of the amount of the compensation, consideration or settlement money that it intends to appropriate for the acquisition of substitute assets, within the designated period prescribed in that paragraph (where the amount of the special account is the amount of a special account during the year succeeded to pursuant to the provisions of paragraph (4), or in other cases specified by Cabinet Order, the period prescribed in paragraph (2) or any other period specified by Cabinet Order; referred to as the "designated period" in the following paragraph and paragraph (12)). In this case, the phrase "the settlement of accounts finalized for that business year" in paragraph (1) of that Article is deemed to be replaced with "the settlement of accounts finalized for the business year that includes the date of acquisition of those substitute assets".

⑧The provisions of paragraph (9) of the preceding Article apply mutatis mutandis where a corporation that has set up 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 date of the expropriation, etc.; hereinafter referred to as a "qualified company split, etc." in this paragraph), and the corporation has acquired substitute assets, with an amount equivalent to all or part of the amount of the compensation, consideration or settlement money that it intends to appropriate for the acquisition of substitute assets, within the designated period of the business year that includes the date of the qualified company split, etc., and transfers those substitute assets to the successor corporation in a company split, the corporation receiving a capital contribution in kind or the corporation receiving a distribution in kind through the qualified company split, etc. In this case, the phrase "in calculating the amount of income for that business year" in paragraph (9) of that Article is deemed to be replaced with "in calculating the amount of income for the business year that includes the date of acquisition of those substitute assets".

⑨In the cases referred to in the preceding two paragraphs, of the amount of the special account referred to in paragraph (1), an amount equivalent to the amount calculated by multiplying the acquisition price of the substitute assets by the gain ratio is included in gross profits in calculating the amount of income for the business year that includes the date on which the substitute assets were acquired.

⑩Where a corporation that has set up 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 is the wholly owned subsidiary corporation in a share exchange, etc. or the wholly owned subsidiary corporation in a share transfer (hereinafter referred to as a "non-qualified share exchange, etc." in this paragraph), if the corporation holds the amount of the special account referred to in paragraph (1) (excluding an amount less than the amount specified by Cabinet Order) immediately before the non-qualified share exchange, etc., the amount of that special account is included in gross profits in calculating the amount of income for the business year that includes the date of the non-qualified share exchange, etc.

⑪Where a corporation that has set up the special account referred to in paragraph (1) has come to fall under the category of 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 satisfies the requirement listed in item (i) of that paragraph), if the corporation 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 profits in calculating the amount of income for that business year immediately before the start of group tax sharing, business year immediately before joining group tax sharing or business year immediately before the end of group tax sharing.

⑫Where a corporation that has set up the special account referred to in paragraph (1) has come to fall under any of the cases listed in the following items (excluding where the special account is to be succeeded to by the merging corporation, etc. pursuant to the provisions of paragraph (4)), the amount specified in each of those items is included in gross profits in calculating the amount of income for the business year that includes the day on which it has come to fall under that case (or, in the case listed in item (iv), the business year that includes the day before the date of the merger).

⑬The provisions of paragraphs (5) and (6) of the preceding Article apply mutatis mutandis where an amount is included in deductible expenses pursuant to the provisions of paragraph (1) or paragraph (7).

⑭The provisions of paragraphs (7) and (8) of the preceding Article apply mutatis mutandis to assets to which the provisions of paragraph (7) or paragraph (8) have been applied.

⑮The provisions of paragraph (11) of the preceding Article apply mutatis mutandis where the provisions of paragraph (8) are applied.

⑯The provisions of paragraph (12) of the preceding Article apply mutatis mutandis to assets to which the provisions of paragraph (7) or paragraph (8) have been applied.

⑰Where it has become difficult for a corporation to acquire substitute assets within the designated period prescribed in paragraph (7) due to unavoidable circumstances arising from an emergency disaster designated as a specified emergency 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, if the corporation is expected to acquire substitute assets during the period from the first day of the designated period until the date specified by Cabinet Order that falls within two years after the last day of the designated period, and has obtained the approval of the district director having jurisdiction over its 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 period prescribed in those provisions is the period from that first day until that date specified by Cabinet Order.

⑱Beyond what is provided for in paragraph (12) through the preceding paragraph, matters necessary for the application of the provisions of paragraphs (1) through (11) are specified by Cabinet Order.

①Where assets held by a corporation that are prescribed in the following items have come to fall under the cases listed in those items (including where compensation, consideration or settlement money (hereinafter referred to as "compensation, etc." in this Article) or consideration for reserved land (meaning the consideration for reserved land in the case where the reserved land has been designated pursuant to the provisions of Article 16, paragraph (1) of the Act on Vitalization in City Center, Article 39, paragraph (1) of the Act on Promotion of Smooth Transportation, etc. of Elderly Persons, Disabled Persons, etc., Article 19, paragraph (1) of the Act on Promotion of Low-Carbon Cities, Article 21, paragraph (1) of the Urban Housing Supply Promotion Act, or Article 28, paragraph (1) of the Act on Comprehensive Development of Regional Core Cities with Relocation of Office-Work Function; the same applies in item (i) of the following paragraph and paragraph (10), item (i)) has been acquired together with the assets prescribed in those items; the same applies in paragraph (5)), if the corporation has reduced, through accounting as an expense or loss, the book value of the assets it has acquired through the expropriation, purchase, replotting disposition, rights conversion or exchange prescribed in those items (hereinafter referred to as "replotting disposition, etc." in this Article and the following Article) (hereinafter referred to as "assets acquired by exchange" in this Article), within the limit of the balance remaining after deducting, from the value of the assets acquired by exchange, the book value immediately before the transfer of the assets transferred through the replotting disposition, etc. (referred to as the "reduction entry limit" in paragraph (5)), an amount equivalent to the amount of that reduction is included in deductible expenses in calculating the amount of income for that business year.

②The book value immediately before the transfer prescribed in the preceding paragraph is, in the cases listed in the following items, the amount specified in each of those items.

③The provisions of the preceding two Articles (excluding Article 64, paragraphs (7) and (8) (including as applied mutatis mutandis pursuant to paragraph (10) of that Article or paragraph (14) of the preceding Article) and paragraph (12) (including as applied mutatis mutandis pursuant to paragraph (16) of the preceding Article)) apply mutatis mutandis where assets held by a corporation that are prescribed in the items of paragraph (1) (excluding item (vii)) have come to fall under the cases listed in those items, and the corporation has acquired compensation, etc. together with the assets prescribed in those items and has acquired or is expected to acquire substitute assets with an amount equivalent to all or part of that amount, or has acquired assets that are to become substitute assets. In this case, the phrase "the balance remaining after deducting the book value immediately before the transfer of the transferred assets from the amount of the compensation, consideration or settlement money, to that compensation, consideration or settlement money" in Article 64, paragraph (1) is deemed to be replaced with "the balance remaining after deducting, from the amount of the compensation, etc. prescribed in Article 65, paragraph (1) (where there are expenses required for the transfer of the assets transferred through the replotting disposition, etc. prescribed in that paragraph, the amount after deducting the amount specified by Cabinet Order as having been paid out of the amount of the compensation, etc.; hereinafter the same applies in this paragraph), the amount calculated pursuant to the provisions of Cabinet Order as the part of the book value immediately before the transfer of the transferred assets corresponding to the amount of the compensation, etc., to that compensation, etc.".

④The provisions of Article 64, paragraphs (5) and (6) apply mutatis mutandis where the provisions of paragraph (1) are applied.

⑤Where a corporation (limited to a corporation whose assets prescribed in the items of paragraph (1) have come to fall under the cases listed in those items) 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 that date; hereinafter referred to as a "qualified company split, etc." in this paragraph and the following paragraph) in the business year that includes the date of the replotting disposition, etc., if the corporation transfers the assets acquired by exchange that it has acquired through the replotting disposition, etc. during the period from the start of that business year until immediately before the qualified company split, etc. to the successor corporation in a company split, the corporation receiving a capital contribution in kind or the corporation receiving a distribution in kind through the qualified company split, etc., then, only where the corporation has reduced the book value of those assets acquired by exchange within the limit of an amount equivalent to the reduction entry limit pertaining to those assets acquired by exchange, an amount equivalent to the amount of that reduction is included in deductible expenses in calculating the amount of income for that business year.

⑥The provisions of the preceding paragraph apply only where the corporation seeking the application of the provisions of that paragraph submits, within two months after the date of the qualified company split, etc., a document stating the amount of the reduction prescribed in that paragraph and other matters specified by Order of the Ministry of Finance to the district director having jurisdiction over its place for tax payment.

⑦Where the provisions of paragraph (1), item (iv) have been applied, if an amount equivalent to the difference prescribed in Article 104, paragraph (1) of the Urban Renewal Act (including as applied with the deemed replacement of terms pursuant to the provisions of Article 110-2, paragraph (6) or Article 111 of that Act) or Article 118-24 of that Act (including as applied with the deemed replacement of terms pursuant to the provisions of Article 118-25-3, paragraph (3) of that Act) (referred to as "conversion settlement money" in paragraph (10), item (i) and paragraphs (1) and (2) of the following Article) has come to be granted pursuant to those provisions with regard to the right to acquire a part of a facility building and a facility building site or a share of co-ownership thereof or a share of co-ownership of a superficies right referred to in that item (including a right to acquire rights concerning a facility building site or rights concerning a facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 110-2, paragraph (1) of that Act), or residential land within an individual use zone or a right to use and profit therefrom, or the right to receive the grant prescribed in that item, if an offer of a wish to acquire under the provisions of Article 118-5, paragraph (1) of that Act has been withdrawn with regard to the portion of a building facility prescribed in paragraph (1), item (iv) (including rights concerning a facility building site or a facility building pertaining to a management and disposal plan established pursuant to the provisions of Article 118-25-3, paragraph (1) of that Act) (including where the offer of a wish to acquire is deemed to have been withdrawn pursuant to the provisions of Article 118-12, paragraph (1) or Article 118-19, paragraph (1) of that Act), or if a part of the facility building or a building lease right for a part of the facility building referred to in that item (including rights concerning the facility building referred to in that item) or the portion of a building facility (including rights concerning the facility building site or the facility building referred to in that item) has been acquired based on the right to acquire a part of the facility building or the right to acquire a building lease right for a part of a facility building referred to in that item (including a right to acquire rights concerning a facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 110, paragraph (1) or Article 110-2, paragraph (1) of that Act; hereinafter the same applies in this paragraph and paragraph (10)) or the right to receive the grant prescribed in that item, then the provisions of the preceding two Articles or the preceding paragraphs apply by deeming that a transfer through expropriation, etc. or replotting disposition, etc. has been made, on the day on which it has come to be so granted, the day on which the offer of a wish to acquire was withdrawn or the day on which the withdrawal is deemed to have been made pursuant to the provisions of Article 118-12, paragraph (1) or Article 118-19, paragraph (1) of that Act, or the day of the acquisition, with regard to the part of the assets referred to in that item specified by Cabinet Order as corresponding to that amount, the right to receive the grant prescribed in that item to which the withdrawal pertains, or the right to acquire a part of the facility building, the right to acquire a building lease right for a part of a facility building or the right to receive the grant prescribed in that item that gave rise to the acquisition.

⑧Where the provisions of paragraph (1), item (v) have been applied, if an amount equivalent to the difference prescribed in Article 248, paragraph (1) of the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts (including as applied with the deemed replacement of terms pursuant to provisions specified by Cabinet Order) (referred to as "disaster prevention conversion settlement money" in paragraph (10), item (i) and paragraphs (1) and (2) of the following Article) has come to be granted pursuant to the provisions of that paragraph with regard to the right to acquire a part of a disaster prevention facility building and a disaster prevention facility building site or a share of co-ownership thereof or a share of co-ownership of a superficies right referred to in that item (including a right to acquire rights concerning a disaster prevention facility building site or rights concerning a disaster prevention facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 255, paragraph (1) of that Act), or residential land within an individual use zone or a right to use and profit therefrom, or if a part of the disaster prevention facility building or a building lease right for a part of the disaster prevention facility building referred to in paragraph (1), item (v) (including rights concerning the disaster prevention facility building referred to in that item) has been acquired based on the right to acquire a part of the disaster prevention facility building or the right to acquire a building lease right for a part of a disaster prevention facility building referred to in that item (including a right to acquire rights concerning a disaster prevention facility building pertaining to a rights conversion plan established pursuant to the provisions of Article 255, paragraph (1) or Article 257, paragraph (1) of that Act; hereinafter the same applies in this paragraph and paragraph (10)), then the provisions of the preceding two Articles or paragraphs (1) through (6) apply by deeming that a transfer through expropriation, etc. or replotting disposition, etc. has been made, on the day on which it has come to be so granted or the day of the acquisition, with regard to the part of the assets referred to in that item specified by Cabinet Order as corresponding to that amount, or the right to acquire a part of the disaster prevention facility building or the right to acquire a building lease right for a part of a disaster prevention facility building referred to in that item that gave rise to the acquisition.

⑨Where the provisions of paragraph (1), item (vi) have been applied, if rights concerning the post-regeneration condominium referred to in that item have been acquired based on the right to acquire rights concerning the post-regeneration condominium referred to in that item, then the provisions of that paragraph, paragraph (2) and paragraphs (4) through (6) apply by deeming that a transfer through replotting disposition, etc. has been made, on the day of the acquisition, with regard to the right to acquire those rights.

⑩Where a domestic corporation has received the application of the provisions of Article 61-11, paragraph (1) of the Corporation Tax Act with regard to the amount of gain on transfer prescribed in paragraph (1) of that Article (referred to as the "amount of gain on transfer" in item (i)) pertaining to a transfer gain or loss adjustment asset prescribed in that paragraph (hereinafter referred to as a "transfer gain or loss adjustment asset" in this paragraph), if the transferee corporation prescribed in paragraph (2) of that Article has received the application of the provisions of paragraph (1) or paragraph (5) with regard to the transfer of an asset held by it that is a transfer gain or loss adjustment asset to which that application pertains (referred to as an "applicable asset subject to adjustment of gain or loss on transfer" in the following paragraph) and that falls under the provisions of paragraph (1), items (iii) through (vii) (excluding, for item (iii) of that paragraph, the part pertaining to land consolidation under the Act on Development of Infrastructures for New Cities, and, for item (iv) of that paragraph, the part pertaining to a type 2 urban redevelopment project under the Urban Renewal Act) (including the right to acquire a part of a facility building or the right to acquire a building lease right for a part of a facility building referred to in paragraph (7), the right to acquire a part of a disaster prevention facility building or the right to acquire a building lease right for a part of a disaster prevention facility building referred to in paragraph (8), and the right to acquire rights concerning the post-regeneration condominium referred to in the preceding paragraph), then with regard to the application of the provisions of that Article, what is specified in each of the following items applies according to the category of cases listed in those items:

⑪Where the provisions of the preceding paragraph apply, the provisions of that paragraph and Article 61-11 of the Corporation Tax Act apply by deeming the assets acquired by the transferee corporation referred to in that paragraph through the replotting disposition, etc. pertaining to the transfer referred to in that paragraph to be applicable assets subject to adjustment of gain or loss on transfer.

⑫The provisions of Article 64, paragraphs (7) and (8) apply mutatis mutandis to assets to which the provisions of paragraph (1), paragraph (3) or paragraph (5) have been applied.

⑬The provisions of Article 64, paragraph (12) apply mutatis mutandis to assets to which the provisions of paragraph (1), paragraph (3) or paragraph (5) have been applied.

⑭Beyond what is provided for in paragraph (4), paragraph (6) and the preceding two paragraphs, the calculation of the book value immediately before the transfer prescribed in paragraph (1) of the assets transferred through the rights conversion prescribed in paragraph (1), item (vi) (limited to the part pertaining to the right to use the site prescribed in that item) in the case where, at the time of that rights conversion, there is a difference between the value of those transferred assets and the approximate value of the right to use the site pertaining to the post-regeneration condominium prescribed in that item, and other matters necessary for the application of the provisions of that paragraph, paragraph (3), paragraph (5) and paragraphs (7) through (11), are specified by Cabinet Order.

①Where assets held by a corporation that are prescribed in the items of Article 64, paragraph (1) or in paragraph (1), item (i) or item (ii) of the preceding Article have come to fall under those provisions (including where a transfer through expropriation, etc. is deemed to have been made, pursuant to the provisions of Article 64, paragraph (2), with regard to the land, etc. prescribed in item (i) of that paragraph or the assets on the land prescribed in item (ii) of that paragraph, and where, upon the withdrawal of an offer of a wish to acquire prescribed in paragraph (7) of the preceding Article, a transfer through expropriation, etc. is deemed to have been made, pursuant to the provisions of that paragraph, with regard to the right to receive the grant of the portion of a building facility prescribed in paragraph (1), item (iv) of that Article), if the amount of the compensation, consideration or settlement money prescribed in those provisions (including the consideration paid due to the withdrawal of the offer of a wish to acquire; hereinafter referred to as "compensation, etc." in this Article) or the value of the assets (hereinafter referred to as "assets acquired by exchange" in this Article) that the corporation has acquired through expropriation, etc. or replotting disposition, etc. (hereinafter referred to as "expropriation or replotting, etc." in this Article) (where the value of the assets acquired by exchange acquired through the expropriation or replotting, etc. exceeds the value of the assets transferred through the expropriation or replotting, etc., and an amount equivalent to the difference has been paid upon the expropriation or replotting, etc., the amount after deducting the amount equivalent to that difference) exceeds the total of the book value of the transferred assets immediately before the transfer and the amount calculated pursuant to the provisions of Cabinet Order as the expenses required for the transfer of the transferred assets that pertain to the compensation, etc. or the assets acquired by exchange, and the corporation does not receive the application of the provisions of Article 64 through the preceding Article with regard to any of the assets it has transferred through expropriation or replotting, etc. during the portion of that business year falling within the same calendar year (excluding, of the assets transferred through a replotting disposition, etc. that falls under the cases listed in paragraph (1), items (iii) through (vii) of the preceding Article, the part specified by Cabinet Order as the part corresponding to the value of the assets acquired through that replotting disposition, etc., and assets with regard to which a transfer through replotting disposition, etc. is deemed to have been made pursuant to the provisions of paragraphs (7) through (9) of that Article; the same applies in the following paragraph and paragraph (7)), the lower of the amount of that excess and 50 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of this paragraph, the following paragraph or paragraph (7) with regard to the amount of compensation, etc. (including conversion settlement money and disaster prevention conversion settlement money) or the value of the assets acquired by exchange acquired through expropriation or replotting, etc. in the year that includes the date of the transfer, the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the date of the transfer.

②Where assets held by a corporation that are prescribed in paragraph (1), items (iii) through (v) of the preceding Article fall under those provisions and the corporation has acquired compensation, etc. together with assets through a replotting disposition, etc. that falls under the cases listed in those provisions, or where a transfer through expropriation, etc. is deemed to have been made, pursuant to the provisions of paragraph (7) of that Article, with regard to the assets referred to in paragraph (1), item (iv) of that Article and conversion settlement money has come to be granted, or where a transfer through expropriation, etc. is deemed to have been made, pursuant to the provisions of paragraph (8) of that Article, with regard to the assets referred to in paragraph (1), item (v) of that Article and disaster prevention conversion settlement money has come to be granted, if the amount of the compensation, etc. acquired (including conversion settlement money and disaster prevention conversion settlement money; hereinafter the same applies in this paragraph and paragraph (7)) exceeds the total of the amount calculated pursuant to the provisions of Cabinet Order as the part of the book value immediately before the transfer of the assets transferred through the replotting disposition, etc. (including assets with regard to which a transfer through expropriation, etc. is deemed to have been made pursuant to the provisions of paragraph (7) or paragraph (8) of that Article) corresponding to the amount of the compensation, etc. and the amount calculated pursuant to the provisions of Cabinet Order as the expenses required for the transfer of the transferred assets that pertain to the compensation, etc., and the corporation does not receive the application of the provisions of Article 64 through the preceding Article with regard to any of the assets it has transferred through expropriation or replotting, etc. during the portion of that business year falling within the same calendar year, the lower of the amount of that excess and 50 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of the preceding paragraph, this paragraph or paragraph (7) with regard to the amount of compensation, etc. or the value of the assets acquired by exchange acquired through expropriation or replotting, etc. in the year that includes the date of the transfer, the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the date of the transfer.

③The provisions of the preceding two paragraphs do not apply to the assets specified in the following items in the cases listed in those items:

④The provisions of paragraph (1) or paragraph (2) apply only where the tax return, etc. contains a statement concerning the inclusion in deductible expenses of the amount to be included in deductible expenses pursuant to those provisions and has attached to it a written statement concerning the calculation of the amount to be included in deductible expenses, and the document, delivered by the public works undertaker, certifying that the offer of purchase, etc. referred to in the preceding paragraph has been made with regard to the assets for which the application of those provisions is sought, and other documents specified by Order of the Ministry of Finance, are preserved.

⑤Even where a tax return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, or the documents specified by Order of the Ministry of Finance referred to in that paragraph have not been preserved, the district director may, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment or to preserve the documents, apply the provisions of paragraph (1) or paragraph (2), but only where a document containing the statement, the written statement referred to in that paragraph and the documents specified by Order of the Ministry of Finance are submitted.

⑥A public works undertaker must, pursuant to the provisions of Order of the Ministry of Finance, submit copies of the documents certifying that the offer of purchase, etc. prescribed in paragraph (4) has been made, and a report on payments for the purchase, etc. of the assets, to the district director having jurisdiction over the location of the business office, place of business or other business establishment involved in the implementation of the project.

⑦Where a corporation has come to fall under the provisions of Article 64-2, paragraphs (10) through (12) (including as applied mutatis mutandis pursuant to paragraph (3) of the preceding Article; hereinafter the same applies in this paragraph), if there ceases to be any amount of the special account referred to in Article 64-2, paragraph (1) pertaining to all of the assets that the corporation transferred through expropriation or replotting, etc. during the portion, falling within the same calendar year, of the business year that includes the date of the expropriation or replotting, etc. to which the amount of the special account prescribed in Article 64-2, paragraph (10) or (11) or the amount specified in the items of paragraph (12) of that Article pertains, and the corporation has not received the application of the provisions of Article 64, paragraph (1) (including as applied mutatis mutandis pursuant to Article 64-2, paragraph (7) or paragraph (3) of the preceding Article), Article 64, paragraph (9) (including as applied mutatis mutandis pursuant to Article 64-2, paragraph (8) or paragraph (3) of the preceding Article) or paragraph (1) or paragraph (5) of the preceding Article with regard to any of those assets, the lower of the amount of the special account that has come to fall under the provisions of Article 64-2, paragraphs (10) through (12) and 50 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of paragraph (1), paragraph (2) or this paragraph with regard to the amount of compensation, etc. or the value of the assets acquired by exchange acquired through the expropriation or replotting, etc. of other assets in the year that includes the date of the expropriation or replotting, etc., the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the day on which it has come to so fall.

⑧The provisions of paragraphs (3) through (5) apply mutatis mutandis where an amount is included in deductible expenses pursuant to the provisions of the preceding paragraph.

⑨With regard to the application of the provisions of Article 67, paragraphs (3) and (5) of the Corporation Tax Act, the amount that a corporation that has received the application of the provisions of paragraph (1), paragraph (2) or paragraph (7) has included in deductible expenses pursuant to those provisions is to be included in the amount of income, etc. prescribed in those provisions of that Act.

⑩Beyond what is provided for in paragraphs (3) through (6), paragraph (8) and the preceding paragraph, the calculation of the amount of revenue reserves of a corporation that has received the application of the provisions of paragraph (1), paragraph (2) or paragraph (7), and other matters necessary for the application of the provisions of paragraph (1), paragraph (2) or paragraph (7), are specified by Cabinet Order.

①Where land or a right existing on land held by a corporation (excluding a corporation in liquidation; hereinafter the same applies in this Subsection) (excluding that which falls under inventory assets; hereinafter referred to as "land, etc." in this Subsection) has come to fall under any of the cases listed in the following items, if the amount of the consideration or the value of the assets (hereinafter referred to as "assets acquired by exchange" in this paragraph) that the corporation has acquired through the transfer of the land, etc. that has come to fall under any of those items (where the value of the assets acquired by exchange acquired through the transfer exceeds the value of the transferred land, etc., and an amount equivalent to the difference has been paid upon the transfer, the amount after deducting the amount equivalent to that difference) exceeds the total of the book value of the transferred land, etc. immediately before the transfer and the amount calculated pursuant to the provisions of Cabinet Order as the expenses required for the transfer of the transferred land, etc. that pertain to the consideration or the assets acquired by exchange, and the corporation does not receive the application of the provisions of Articles 65-7 through 65-9 or Article 66 with regard to any of the land, etc. that has so come to fall under those items during the portion of that business year falling within the same calendar year, the lower of the amount of that excess and 20 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of this paragraph with regard to the amount of consideration or the value of the assets acquired by exchange acquired through transfers in the year that includes the date of the transfer, the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the date of the transfer.

②Where, with regard to land, etc. held by a corporation, two or more purchases referred to in those provisions have been made for use in a single project pertaining to the purchases referred to in the items of the preceding paragraph, if those purchases were made over two or more years, the provisions of that paragraph do not apply to the purchases other than those made in the year in which the purchases referred to in those provisions were first made.

③Where, with regard to land, etc. held by a corporation, the purchases referred to in those provisions have been made, for use in a single project pertaining to the purchases referred to in the items of paragraph (1), from a corporation that falls under the category of corporation listed in any of the following items, the provisions of that paragraph do not apply to the purchases specified in each of those items:

④The provisions of paragraph (1) apply only where the tax return, etc. 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, and the document, delivered by the person making the purchase referred to in the items of that paragraph, certifying that the purchase of the land, etc. referred to in that paragraph has been made, and other documents specified by Order of the Ministry of Finance, are preserved.

⑤Even where a tax return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, or the documents specified by Order of the Ministry of Finance referred to in that paragraph have not been preserved, the district director may, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment or to preserve the documents, apply the provisions of paragraph (1), but only where a document containing the statement, the written statement referred to in that paragraph and the documents specified by Order of the Ministry of Finance are submitted.

⑥A person making a purchase referred to in the items of paragraph (1) must, pursuant to the provisions of Order of the Ministry of Finance, submit a report on payments for the purchase of the land, etc. referred to in that paragraph to the district director having jurisdiction over the location of the business office, place of business or other business establishment involved in the implementation of the project.

⑦With regard to the application of the provisions of Article 67, paragraphs (3) and (5) of the Corporation Tax Act, the amount that a corporation that has received the application of the provisions of paragraph (1) has included in deductible expenses pursuant to the provisions of that paragraph is to be included in the amount of income, etc. prescribed in those provisions of that Act.

⑧Beyond what is provided for in paragraph (2) through the preceding paragraph, the calculation of the amount of revenue reserves of a corporation that has received the application of the provisions of paragraph (1), and other matters necessary for the application of the provisions of that paragraph, are specified by Cabinet Order.

①Where land, etc. held by a corporation has come to fall under any of the cases listed in the following items, if the amount of the consideration or the value of the assets (hereinafter referred to as "assets acquired by exchange" in this paragraph) that the corporation has acquired through the transfer of the land, etc. that has come to fall under any of those items (where the value of the assets acquired by exchange acquired through the transfer exceeds the value of the transferred land, etc., and an amount equivalent to the difference has been paid upon the transfer, the amount after deducting the amount equivalent to that difference) exceeds the total of the book value of the transferred land, etc. immediately before the transfer and the amount calculated pursuant to the provisions of Cabinet Order as the expenses required for the transfer of the transferred land, etc. that pertain to the consideration or the assets acquired by exchange, and the corporation does not receive the application of the provisions of Articles 65-7 through 65-9 or Article 66 with regard to any of the land, etc. that has so come to fall under those items during the portion of that business year falling within the same calendar year, the lower of the amount of that excess and 15 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of this paragraph with regard to the amount of consideration or the value of the assets acquired by exchange acquired through transfers in the year that includes the date of the transfer, the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the date of the transfer.

②Where land, etc. held by a corporation that is located within a promotion area for reconstruction of a disaster-damaged urban district specified in a city plan pursuant to the provisions of Article 5, paragraph (1) of the Act on Special Measures concerning Reconstruction of Urban Districts Damaged by Disaster has come to fall under the case listed in item (xxi)-2 of the preceding paragraph, the provisions of Article 65, paragraphs (1), (5) and (10) apply by deeming the designation of the reserved land referred to in that item to fall under the case where reserved land has been designated as prescribed in paragraph (1) of that Article, and by deeming the amount of the consideration for the reserved land referred to in that item to fall under the amount of the consideration for reserved land prescribed in that paragraph, paragraph (2), item (i) and paragraph (10), item (i) of that Article.

③Where, with regard to land, etc. held by a corporation, two or more purchases referred to in those provisions have been made for use in a single project pertaining to the purchases referred to in paragraph (1), items (i) through (iii), items (vi) through (xvi), item (xix), item (xxii) or item (xxii)-2, if those purchases were made over two or more years, the provisions of that paragraph do not apply to the purchases other than those made in the year in which the purchases referred to in those provisions were first made.

④Where, with regard to land, etc. held by a corporation, the purchases referred to in those provisions have been made, for use in a single project pertaining to the purchases referred to in paragraph (1), items (i) through (iii), items (vi) through (xvi), item (xix), item (xxii) or item (xxii)-2, from a corporation that falls under the category of corporation listed in any of the following items, the provisions of that paragraph do not apply to the purchases specified in each of those items:

⑤The provisions of paragraphs (4), (5) and (7) of the preceding Article apply mutatis mutandis where the provisions of paragraph (1) are applied, and the provisions of paragraph (6) of that Article apply mutatis mutandis to a person making a purchase referred to in the items of paragraph (1).

⑥Beyond what is provided for in paragraph (2) through the preceding paragraph, matters necessary for the application of the provisions of paragraph (1) are specified by Cabinet Order.

①Where land, etc. held by a qualified farmland-owning corporation prescribed in Article 2, paragraph (3) of the Cropland Act has come to fall under any of the cases listed in the following items, if the amount of the consideration or the value of the assets (hereinafter referred to as "assets acquired by exchange" in this paragraph) that the qualified farmland-owning corporation has acquired through the transfer of the land, etc. that has come to fall under any of those items (where the value of the assets acquired by exchange acquired through the transfer exceeds the value of the transferred land, etc., and an amount equivalent to the difference has been paid upon the transfer, the amount after deducting the amount equivalent to that difference) exceeds the total of the book value of the transferred land, etc. immediately before the transfer and the amount calculated pursuant to the provisions of Cabinet Order as the expenses required for the transfer of the transferred land, etc. that pertain to the consideration or the assets acquired by exchange, and the qualified farmland-owning corporation does not receive the application of the provisions of Articles 65-7 through 65-9 or Article 66 with regard to any of the land, etc. that has so come to fall under those items during the portion of that business year falling within the same calendar year, the lower of the amount of that excess and 8 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of this paragraph with regard to the amount of consideration or the value of the assets acquired by exchange acquired through transfers in the year that includes the date of the transfer, the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the date of the transfer.

②The provisions of the preceding paragraph apply only where the tax return, etc. 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 a written statement concerning the calculation of the amount to be included in deductible expenses and other documents specified by Order of the Ministry of Finance are attached to that tax return, etc.

③Even where a tax return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, the district director may, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment, apply the provisions of paragraph (1), but only where a document containing the statement, and the written statement and the documents specified by Order of the Ministry of Finance referred to in that paragraph, are submitted.

④The provisions of Article 65-3, paragraph (7) apply mutatis mutandis where the provisions of paragraph (1) are applied.

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

①Where a corporation (excluding a corporation in liquidation) has transferred land located in Japan or a right existing on land (excluding that which falls under inventory assets; hereinafter referred to as "land, etc." in this Article) that it acquired within the period from January 1, 2009 to December 31, 2010 (referred to as the "designated period" in paragraph (4)), that it has continued to hold since the date of acquisition and for which the holding period (meaning the period during which it held the land, etc. from the day following the date of acquisition until January 1 of the year that includes the date of the transfer of the land, etc.) exceeds five years, if the amount of the consideration or the value of the assets (hereinafter referred to as "assets acquired by exchange" in this paragraph) that the corporation has acquired through the transfer of the land, etc. (where the value of the assets acquired by exchange acquired through the transfer exceeds the value of the transferred land, etc., and an amount equivalent to the difference has been paid upon the transfer, the amount after deducting the amount equivalent to that difference) exceeds the total of the book value of the transferred land, etc. immediately before the transfer and the amount calculated pursuant to the provisions of Cabinet Order as the expenses required for the transfer of the transferred land, etc. that pertain to the consideration or the assets acquired by exchange, and the corporation does not receive the application of the provisions of Articles 65-7 through 65-9 or Article 66 with regard to any of the land, etc. it has transferred during the portion of that business year falling within the same calendar year, the lower of the amount of that excess and 10 million yen (where there is an amount that has been included or is to be included in deductible expenses pursuant to the provisions of this paragraph with regard to the amount of consideration or the value of the assets acquired by exchange acquired through transfers in the year that includes the date of the transfer, the amount after deducting that amount) is included in deductible expenses in calculating the amount of income for the business year that includes the date of the transfer.

②The provisions of the preceding paragraph apply only where the tax return, etc. 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 a written statement concerning the calculation of the amount to be included in deductible expenses is attached to that tax return, etc.

③Even where a tax return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, the district director may, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment, apply the provisions of paragraph (1), but only where a document containing the statement and the written statement referred to in that paragraph are submitted.

④Where 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 (hereinafter referred to as a "merging corporation, etc." in this paragraph) has received, through a qualified merger, a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (referred to as a "qualified merger, etc." in paragraph (7), item (ii), (d)), a transfer of land, etc. that the merged corporation, splitting corporation, corporation making a capital contribution in kind or corporation making a distribution in kind (hereinafter referred to as a "merged corporation, etc." in this paragraph) acquired within the designated period, the provisions of paragraph (1) apply by deeming that the merging corporation, etc. acquired the land, etc. on the date on which the merged corporation, etc. acquired the land, etc.

⑤With regard to the application of the provisions of Article 67, paragraphs (3) and (5) of the Corporation Tax Act, the amount that a corporation that has received the application of the provisions of paragraph (1) has included in deductible expenses pursuant to the provisions of that paragraph is to be included in the amount of income, etc. prescribed in those provisions of that Act.

⑥Beyond what is provided for in paragraph (2) through the preceding paragraph, the calculation of the amount of revenue reserves of a corporation that has received the application of the provisions of paragraph (1), and other matters necessary for the application of the provisions of that paragraph, are specified by Cabinet Order.

⑦With regard to the terms used in this Article, the following provisions apply:

Where a corporation has transferred assets it holds, if, with regard to the transfers of assets in the year that includes the day of that transfer (including transfers of assets held by a corporation that has, in that year, a full controlling interest relationship prescribed in Article 2, item (xii)-7-6 of the Corporation Tax Act with that corporation (limited to a full controlling interest relationship by a corporation as prescribed in that item) (hereinafter referred to in this Article as a "corporation with a full controlling interest relationship")), that corporation and the corporation with a full controlling interest relationship receive the application of two or more of the provisions of Article 65-2, paragraph (1), (2) or (7), Article 65-3, paragraph (1), Article 65-4, paragraph (1), Article 65-5, paragraph (1) or paragraph (1) of the preceding Article, or that corporation or the corporation with a full controlling interest relationship each receive the application of those provisions, and the total of the amounts that that corporation and the corporation with a full controlling interest relationship have included or will include in deductible expenses pursuant to those provisions (hereinafter referred to in this Article as the "deductible amount before adjustment") exceeds 50 million yen, then, notwithstanding those provisions, the amount calculated by multiplying the amount of the excess by the ratio of the total of the amounts that that corporation has included or will include in deductible expenses pursuant to those provisions to the deductible amount before adjustment is not included in deductible expenses in calculating the amount of income of that corporation for each business year.

②In applying the provisions of the preceding paragraph, if the replacement assets for that business year (including assets deemed to be replacement assets pursuant to the provisions of the following paragraph) include land, etc., and the area of the land, etc. calculated for each category, where the land, etc. is categorized according to the right-hand column of each item of the table in the preceding paragraph, exceeds the area calculated pursuant to the provisions of Cabinet Order on the basis of the area of the land, etc. listed in the left-hand column of the relevant item that was transferred during that business year, then, notwithstanding the provisions of that paragraph, the portion of the land, etc. that is a replacement asset corresponding to the area of the excess is not to fall under the replacement asset referred to in that paragraph.

③In the case prescribed in paragraph (1), if the corporation has acquired an asset listed in the right-hand column of the relevant item within one year before the day on which the business year that includes the day on which it transferred an asset it holds that is listed in the left-hand column of the items of the table in that paragraph begins (or, where there are unavoidable circumstances specified by Cabinet Order, such as the period required for the construction of a factory, etc. normally exceeding one year, within the period specified by Cabinet Order), and has, within one year from the day of the acquisition, used the acquired asset for the corporation's business within the area prescribed in the right-hand column of the relevant item (excluding the case where it has ceased to use it for that business by the earlier of the day of the end of that business year and the day on which one year has elapsed from the day of the acquisition), or is expected to use it as such, the corporation may, limited to the assets for which it 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, receive the application of the provisions of paragraph (1) by deeming those assets to be replacement assets falling under the provisions of that paragraph.

④If a corporation that has received the application of the provisions of paragraph (1) 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 (1) 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) (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 (hereinafter referred to in this Article 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 (hereinafter referred to in this Article as a "qualified merger, etc.")), the amount equivalent to the amount included in deductible expenses with regard to that replacement asset pursuant to the provisions of that paragraph is, pursuant to the provisions of Cabinet Order, included in gross profit in calculating the amount of income for the business year that includes the day on which one year has elapsed from the day of the acquisition or the day on which it ceased to use the asset (or, where it has ceased to use the replacement asset for its business because it transferred the replacement asset through a merger that does not fall under a qualified merger, the business year that includes the day before the day of that merger).

⑤The provisions of paragraph (1) apply only if the final return, etc. 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 a written statement concerning the calculation of the amount to be included in deductible expenses and any other documents specified by Order of the Ministry of Finance are attached to that final return, etc.

⑥Even in the case where a final return, etc. without the statement or attachment referred to in the preceding paragraph has been filed, if the district director finds that there were unavoidable circumstances for the failure to include the statement or attachment, the district director may apply the provisions of paragraph (1), but only if a document containing that statement, and the written statement and the documents specified by Order of the Ministry of Finance referred to in that paragraph, have been submitted.

⑦The provisions listed in the items of Article 53, paragraph (1) do not apply to a replacement asset to which the provisions of paragraph (1) have been applied.

⑧In applying the provisions of laws and regulations concerning corporation tax to a replacement asset to which the provisions of paragraph (1) have been applied, the amount included in deductible expenses in calculating the amount of income for each business year pursuant to the provisions of that paragraph (excluding the amount included in gross profit in calculating the amount of income for each business year pursuant to the provisions of paragraph (4)) is not included in the acquisition price of that replacement asset.

⑨If a corporation has made a transfer prescribed in paragraph (1) within the applicable period and carries out, in the business year that includes the day of the transfer, a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (limited to one carried out on or after that day; hereinafter referred to in this paragraph and paragraph (11) as a "qualified company split, etc."), and has acquired an asset listed in the right-hand column of the relevant item of the table in paragraph (1) pertaining to the transferred asset during the period from the beginning of that business year until immediately before 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 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 the successor corporation in a split, etc. through the qualified company split, etc., then, only if, with regard to the 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), the corporation has reduced its book value within the limit of the amount equivalent to the reduction entry limit pertaining to that replacement asset, the amount equivalent to the amount so reduced is included in deductible expenses in calculating the amount of income for that business year.

⑩The provisions of paragraph (2) apply mutatis mutandis where the provisions of the preceding paragraph are applied, the provisions of paragraph (3) apply mutatis mutandis in the case prescribed in the preceding paragraph, and the provisions of paragraphs (7) and (8) apply mutatis mutandis to a replacement asset to which the provisions of the preceding paragraph have been applied. In this case, the technical replacement of terms concerning the application of the provisions of paragraphs (2) and (3) is specified by Cabinet Order.

⑪The provisions of paragraph (9) 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 reduced amount prescribed in that paragraph and other matters specified by Order of the Ministry of Finance.

⑫If a merging corporation, etc. that has received, through a qualified merger, etc., the transfer of a replacement asset prescribed in paragraph (1) or (9) 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 (1) or (9) 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. (hereinafter referred to in this Article as the "merged corporation, 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) 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.), the amount equivalent to the amount included in deductible expenses of the merged corporation, etc. with regard to that replacement asset pursuant to the provisions of paragraph (1) or (9) is, pursuant to the provisions of Cabinet Order, included in gross profit in calculating the amount of income for the business year of the merging corporation, etc. that includes the day on which one year has elapsed from the day of the acquisition or the day on which it ceased to use the asset (or, where it has ceased to use the replacement asset for its business because it transferred the replacement asset through a merger that does not fall under a qualified merger, the business year that includes the day before the day of that merger).

⑬If a merging corporation, etc. that has received the transfer of a replacement asset to which the provisions of paragraph (1) or (9) have been applied through a qualified merger, etc. applies the provisions of laws and regulations concerning corporation tax to that replacement asset, the amount that was not included in the acquisition price of that replacement asset by the merged corporation, etc. pertaining to the qualified merger, etc. is not included in the acquisition price of that replacement asset.

⑭In applying the provisions of paragraph (1) or (9) (limited to the part pertaining to item (iii) of the table in paragraph (1)), if the assets listed in the left-hand column of that item that a corporation has transferred fall under assets located within the area listed in item (i), and the assets listed in the right-hand column of item (iii) of that table that the corporation has acquired fall under assets located within the area listed in item (ii) or item (iii), or if the assets listed in the left-hand column of item (iii) of that table that a corporation has transferred fall under head office assets (meaning buildings and structures used as the head office or principal office of the corporation and land, etc. used as their site; hereinafter the same applies in this paragraph) located within the area listed in item (iii), and the assets listed in the right-hand column of item (iii) of that table that the corporation has acquired fall under head office assets located within the area listed in item (i), then the reduction entry limit prescribed in paragraph (1) pertaining to those acquired assets is, notwithstanding the provisions of that paragraph, to be the amount specified in the following items according to which of the areas listed in those items the assets are located within:

⑮Beyond what is specified in paragraph (2) through the preceding paragraph (excluding paragraph (9)), the calculation of the amount to be included in deductible expenses pursuant to the provisions of paragraph (1) in the case where the asset transferred as referred to in that paragraph falls under the assets listed in the left-hand column of two or more items of the table in that paragraph, and other necessary matters concerning the application of the provisions of that paragraph and paragraph (9) are specified by Cabinet Order.

⑯With regard to the terms used in this Article and the following Article, the following provisions apply:

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: