Blue Losses can be carried for 10 years. The requirements are:
- The company has to be a Blue Filer at the time of filing its tax return,
- Tax filings have to be done continuously without a gap since the year the loss is made and the year when the carried loss is to be used to offset against current taxable income.
- If the company falls under the category of non-small/medium sized enterprises (non-SMEs), the carried loss can be used only up to a half of the current income. The definition of non-SMEs is (a) its paid-in capital is equal to or larger than 100,000,000 JPY or the company is owned directly or indrectly 100% by a company whose paid-in capital is larger than 500,000,000 yen.