In the case of an individual business owner who has non-deductible tax under Article 144 of the Special Taxation Limitation Law and is converting to a corporation, where the conversion does not fall under the conditions specified in Article 32, Paragraph 1 of the same law regarding corporate conversion, the resulting corporation cannot inherit so that you cannot claim deductions for the non-deductible tax.

However, in the case of a domestic corporation newly established through the conversion of a business previously operated by a resident individual into a corporation, when calculating the amount of tax deduction for an enterprise that has increased employment in the tax year that includes the date of corporate conversion, the average number of employees in the immediate preceding tax year is based on the number of employees in the immediate preceding tax year of the business before the corporate conversion.