Immediate depreciation: applications are open — the first page for anyone using it on a storage station

In COLUMN 22 we wrote that the Bold Investment Promotion Tax Incentive (formally, the Tax Incentive for Investment in Specified Productivity-Enhancing Equipment) had not yet started. It has now. The amending Act to the Industrial Competitiveness Enhancement Act was promulgated on 5 June 2026 and came into force on 31 July, and from that same day the nine regional Bureaux of Economy, Trade and Industry began accepting applications for confirmation of investment plans (METI announcement of 31 July 2026). The tax side is settled too: Article 42-12-7 of the Act on Special Measures Concerning Taxation, on special depreciation or a special credit against corporation tax where specified productivity-enhancing equipment is acquired — it appears with the article number in the National Tax Agency's pamphlet. The cabinet and ministerial ordinances, the public notices, the application forms and the return-on-investment calculation sheet, all of which were still to be decided when COLUMN 22 was written, have now been published.

This column is the entrance to the follow-up. How the measure works, and the point that immediate depreciation is not a tax cut but a deferral of tax, are in COLUMN 22 and are not repeated here. What this page holds is the four things a storage station owner, an SPC or an incoming investor checks first now that applications are open, and the schedule worked backwards from the target in-service date. The statutory basis, the procedural detail and the eleven practical issues are split into the Statutes edition (45-2)JA, the Procedure edition (45-3)JA and the Practice edition (45-4)JA. Read to whatever depth you need.

01The 30-second test — four questions decide whether you are even at the door

Before any of the detail, these four questions. A single "no" means either that the measure is closed to you or that the plan needs redesigning. Four yeses put you at the door — and beyond it wait the real tests: a 15% return on investment, and the confirmation of the Minister of Economy, Trade and Industry.

"SME" (中小企業者等) is not settled by stated capital alone — a subsidiary of a large corporation drops out, for instance. The definition sits in Article 42-4(19)(vii) and (ix) of the Act on Special Measures Concerning Taxation (for individuals, Article 10(8)(vi)), and it is set out expressly in the notes to Form 1 of the application. The point in time at which the test is applied is itself an open question (Practice edition, issue 11JA).

02Working backwards — two deadlines, and the fiscal year as a third axis

There are two deadlines. ① Obtain the Minister's confirmation by 31 March 2029 — the certificate in hand, not the application filed; the standard processing period is about one month. ② Acquire the equipment and place it in service within five years of the date of confirmation. A storage station burns years on the connection study, the interconnection works and equipment lead times, so the design has to run the confirmation procedure and the grid procedure in parallel, planned backwards from the end. Then there is a third axis: the fiscal year. The measure bites in the business year that contains the in-service date — not when you paid, but when you started using it, decides which year it lands in.

03Four points specific to a storage station

① This measure has no industry barrier. The reason a storage station selling all its output could not use immediate depreciation until now is that the electricity business is not among the "designated businesses" of the SME Management Enhancement Tax Incentive (Article 27-6(7) of the Enforcement Order of the Act on Special Measures Concerning Taxation — the electricity business does not appear in the list). This measure carries no designated-business requirement at all; the only exclusions are equipment held for lease, used for testing and research, or used in the adult-entertainment business. A pure merchant seller is not knocked out on industry grounds — the National Tax Agency's pamphlet states expressly that the eligible businesses are not particularly restricted. For how the provisions line up, see the Statutes editionJA.

② The useful life is 17 years, not 6 — and that is the denominator the review works from. The six-year class for "storage battery power supply equipment" is confined to things like lighting during an outage (Useful Life Circular 2-2-2); a battery used to sell electricity is treated as machinery and equipment, and 17 years is what is widely used in practice. There is no published National Tax Agency position naming grid-scale batteries ❓. And on the specification of METI's calculation sheet, the 15% return-on-investment test takes the annual average over the longest depreciation period among the equipment in the plan — 17 years for as long as a battery is in it. That is the real gate in the review. Practice edition, issues 01–03JA.

③ Letting it out drops out. Handing over the operation does not. A lease — letting the equipment to an operator, or a rental lease — is an express statutory exclusion. Where the owner keeps the equipment and delegates market operation to an aggregator, on the other hand, there is considerable room to read it as not amounting to a "lease", for as long as the use and enjoyment of the asset stays with the owner. But no Q&A yet names this measure, so a written enquiry is the premise ❓. The conclusion in COLUMN 22, Gate 2 — that the shape of the contract is what divides eligibility — has not changed with entry into force. Practice edition, issue 04JA.

④ What counts is not the day you paid but the day you started using it. Pay this year and the tax effect still lands next year if the in-service date does. Conversely, an in-service date squeezed in at the very end of the year still gives immediate depreciation in full, with no pro rata by month. Choose the 7% tax credit and it runs the other way: the credit is capped at 20% of corporation tax for the year in which the asset is placed in service, and with a year-end in-service date there is almost no electricity revenue in that year, so no room for the credit arises. Immediate depreciation works with a year-end in-service date; the tax credit works with one at the start of the year. For the design of the fiscal year, the in-service date and which entity holds the asset, see Practice edition, issue 11JA and Procedure edition, 05JA.

04Open questions — points no one can yet be categorical about

One month since applications opened. The official Q&A is thin, and the following points cannot be settled from primary sources. If you find commentary that is categorical about them, check what it rests on. We have enquiries in progress with the regional Bureau of Economy, Trade and Industry, the tax office and OCCTO, and will add the answers to this series as they arrive.