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CORPORATE TAX ACT

Wholly Amended by Act No. 5581, Dec. 28, 1998

Amended by Act No. 6047, Dec. 28, 1999

Act No. 6259, Feb. 3, 2000

Act No. 6293, Dec. 29, 2000

Act No. 6558, Dec. 31, 2001

Act No. 6852, Dec. 30, 2002

Act No. 7005, Dec. 30, 2003

Act No. 7117, Jan. 29, 2004

Act No. 7317, Dec. 31, 2004

Act No. 7289, Dec. 31, 2004

Act No. 7838, Dec. 31, 2005

Act No. 7908, Mar. 24, 2006

Act No. 8141, Dec. 30, 2006

Act No. 8852, Feb. 29, 2008

Act No. 9267, Dec. 26, 2008

Act No. 9401, Jan. 30, 2009

Act No. 9346, Jan. 30, 2009

Act No. 9673, May 21, 2009

Act No. 9763, jun. 9, 2009

Act No. 9898, Dec. 31, 2009

Act No. 9924, Jan. 1, 2010

Act No. 10221, Mar. 31, 2010

Act No. 10337, May 31, 2010

Act No. 10361, jun. 8, 2010

Act No. 10423, Dec. 30, 2010

Act No. 10898, Jul. 25, 2011

Act No. 10907, Jul. 25, 2011

Act No. 11128, Dec. 31, 2011

Act No. 11603, Jan. 1, 2013

Act No. 11607, Jan. 1, 2013

Act No. 11873, jun. 7, 2013

Act No. 12153, Jan. 1, 2014

Act No. 12166, Jan. 1, 2014

Act No. 12420, Mar. 18, 2014

Act No. 12850, Dec. 23, 2014

Act No. 13230, Mar. 27, 2015

Act No. 13448, Jul. 24, 2015

Act No. 13426, Jul. 24, 2015

Act No. 13499, Aug. 28, 2015

Act No. 13550, Dec. 15, 2015

Act No. 13555, Dec. 15, 2015

Act No. 14386, Dec. 20, 2016

Act No. 15222, Dec. 19, 2017

CHAPTER I GENERAL PROVISIONS
 Article 1 (Definitions)
The terms used in this Act shall be defined as follows: <Amended by Act No. 11607, Jan. 1, 2013>
1. The term "domestic corporation" means a corporation with its headquarters, main office or actual business management place located in the Republic of Korea;
2. The term "non-profit domestic corporation" means a domestic corporation which falls under any of the following items:
(a) A corporation established under Article 32 of the Civil Act;
(b) A corporation established under the Private School Act or other special Acts for the purposes similar to such purposes as prescribed in Article 32 of the Civil Act (excluding a corporation, other than partnership corporations, etc. prescribed by Presidential Decree, which may distribute profits to its stockholders, employees, or investors);
(c) An organization deemed a corporation under Article 13 (4) of the Framework Act on National Taxes (hereinafter referred to as "organization deemed a corporation");
3. The term "foreign corporation" means an organization that has its headquarters or main office in a foreign country in the form of a corporation that meets the standards prescribed by Presidential Decree (limited to such a corporation that does not have a place for actual management of its business in the Republic of Korea);
4. The term "non-profit foreign corporation" means a foreign government or foreign local government, or other foreign corporation (including an organization deemed a corporation) which is operated for non-profit purposes;
5. The term "business year" means one fiscal period for the calculation of income of a corporation;
6. The term "consolidated tax return system" means a system by which two or more domestic corporations file a corporate tax return and pay corporate tax as a single unit that calculates the amount of tax based on a single tax base, as prescribed in Chapter II-3;
7. The term "consolidated corporation" means a corporation to which the consolidated tax return system applies;
8. The term "consolidated group" means all consolidated corporations;
9. The term "consolidated parent corporation" means a consolidated corporation that wholly controls another consolidated corporation of a consolidated group, and the term "consolidated subsidiary corporation" means a consolidated corporation wholly controlled by a consolidated parent corporation;
10. The term "consolidated business year" means one fiscal period for the calculation of income of a consolidated group.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 2 (Tax Liability)
(1) Both of the following corporations are liable to pay corporate tax on any income pursuant to this Act: <Amended by Act No. 10423, Dec. 30, 2010>
1. A domestic corporation;
2. A foreign corporation which has income from a domestic source.
(2) Deleted. <by Act No. 9267, Dec. 26, 2008>
(3) No corporate tax shall be imposed on domestic corporations, including the State and local governments (including local government associations; hereinafter the same shall apply). <Amended by Act No. 10423, Dec. 30, 2010>
(4) Consolidated corporations are jointly liable to pay corporate tax (including corporate tax on capital gains from the transfer of land, etc. referred to in Article 55-2 by each consolidated corporation, corporate tax on unappropriated earnings referred to in Article 56 and corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act) on income for each consolidated business year under Article 76-14 (1). <Amended by Act No. 10423, Dec. 30, 2010; Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
(5) Domestic corporations, foreign corporations, and residents and nonresidents as defined in the Income Tax Act are liable to pay corporate tax to be withheld under this Act. <Amended by Act No. 10423, Dec. 30, 2010>
 Article 3 (Scope of Taxable Income)
(1) Corporate tax shall be imposed on the following incomes: Provided, That corporate tax shall be imposed only on the income specified in subparagraphs 1 and 3 in cases of non-profit domestic corporations and foreign corporations: <Amended by Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
1. Income for each business year;
2. Liquidation income;
3. Capital gains on the transfer of land, etc., referred to in Articles 55-2 and 95-2;
4. Unappropriated earnings referred to in Article 56 and Article 100-32 (2) of the Restriction of Special Taxation Act.
(2) Income of a consolidated corporation for each business year means the income for each consolidated business year referred to in Article 76-14 (1).
(3) Income of a non-profit domestic corporation for each business year means the income accruing from any of the following business or revenues (hereinafter referred to as "profit-making business"): <Amended by Act No. 11607, Jan. 1, 2013; Act No. 15222, Dec. 19, 2017>
1. Business specified by Presidential Decree among business engaging in manufacturing, construction, wholesale, retail sales, repair of consumer products, real estate, rental, or business services;
2. Interest income as prescribed in Article 16 (1) of the Income Tax Act;
3. Dividend income as prescribed in Article 17 (1) of the Income Tax Act;
4. Revenues accruing from the transfer of stocks, preemptive right to new stocks, or investment shares;
5. Revenues accruing from the disposal of fixed assets: Provided, That the revenues specified by Presidential Decree, among revenues accruing from the disposal of fixed assets directly used for essential business activities, shall be excluded;
6. Revenues accruing from the transfer of assets prescribed in Article 94 (1) 2 and 4 of the Income Tax Act;
7. Revenues prescribed by Presidential Decree, which accrues from continuing activities be paid, other than those referred to in subparagraphs 1 through 6.
(4) Income of a foreign corporation for each business year means the income accrued from domestic sources referred to in Article 93 (hereinafter referred to as "domestic source income"): Provided, That for non-profit foreign corporations, this shall be limited to domestic source income accruing from profit-making business.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 4 (Substance Over Form)
(1) Where a corporation to which all or some of revenues accruing from assets or business legally reverts is different from a corporation to which it actually reverts, this Act shall apply to the corporation to which the revenue actually reverts.
(2) The provisions concerning the calculation of the amount of taxable income subject to corporate tax shall apply according to the substance, notwithstanding the name or form of such income or profits.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 5 (Trust Income)
(1) With regard to income accruing from trust property, the beneficiary to receive the profits of the trust (where no beneficiary is specified or no beneficiary exists, the trustee of the trust or his/her successor) shall be deemed the owner of the trust property for the purposes of this Act.
(2) No revenues and expenditures from trust property of a corporation regulated by the Financial Investment Services and Capital Markets Act (excluding special accounts of an insurance company referred to in Article 251 (1) of the same Act; hereinafter the same shall apply) shall be deemed the revenues and expenditures that revert to the corporation.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 6 (Business Years)
(1) A business year shall be one fiscal period prescribed by statutes or a corporation's articles of incorporation: Provided, That this period shall not exceed one year.
(2) A domestic corporation, the business year of which is not prescribed by statutes or its articles of incorporation shall separately determine its business year and report it to the head of the tax office having jurisdiction over the place of tax payment (the head of the tax office as prescribed in Article 12; hereinafter the same shall apply), along with a report on incorporation referred to in Article 109 (1) or the registration of business referred to in Article 111.
(3) A foreign corporation with a place of business in the Republic of Korea as prescribed in Article 94 (hereinafter referred to as "domestic place of business"), the business year of which is not prescribed by the Acts and subordinate statutes or its articles of incorporation shall separately determine its business year and report it to the head of the tax office having jurisdiction over the place of tax payment, along with a report on the establishment of a domestic place of business referred to in Article 109 (2) or the registration of business referred to in Article 111.
(4) A foreign corporation with no domestic place of business which earns income referred to in subparagraph 3 or 7 of Article 93 shall separately determine its business year and report it to the head of the tax office having jurisdiction over the place of tax payment within one month from the date such income is first earned.
(5) Where a corporation liable to file a report under paragraphs (2) through (4) fails to do so, the business year of such corporation shall be from January 1 to December 31 of each year.
(6) In applying paragraphs (1) through (5), matters necessary for determining the start date of a corporation's first business year shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 7 (Change of Business Year)
(1) A corporation which intends to change its business year shall report thereon to the head of the tax office having jurisdiction over the place of tax payment within three months from the end date of the immediately preceding business year, as prescribed by Presidential Decree.
(2) Where a corporation fails to file a report by the deadline specified in paragraph (1), the corporation's business year shall be deemed unchanged: Provided, That for a corporation, the business year of which is determined by statutes, its business year shall be deemed changed at the time the amended provisions concerning the change of the business year in such statutes have effected, although no report is filed under paragraph (1).
(3) Where a business year is changed pursuant to paragraph (1) or the proviso to paragraph (2), the period from the start date of the previous business year to the date preceding the start date of the changed business year shall be deemed one business year: Provided, That where such period does not exceed one month, it shall be included in the changed business year.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 8 (Constructive Business Years)
(1) Where a domestic corporation is dissolved during a business year (excluding a dissolution due to a merger, division, or division and merger), the period from the start date of the business year until the registration date of dissolution (referring to the registration date of bankruptcy if a corporation is dissolved on the grounds of bankruptcy and the date of dissolution for any organization deemed a corporation; hereinafter the same shall apply), and the period from the day following the registration date of dissolution until the end date of the relevant business year shall be deemed one business year, respectively, and where the value of residual assets of a domestic corporation in the course of liquidation is determined during the business year, the period from the start date of the business year until the date the value of residual assets is determined shall be deemed one business year.
(2) Where a domestic corporation is dissolved during a business year due to a merger or division (including a division and merger; hereinafter the same shall apply), the period from the start date of the business year until the registration date of the merger or division shall be deemed one business year of that dissolved domestic corporation.
(3) Where a domestic corporation in the course of liquidation continues its business pursuant to Article 229, 285, 287-40, 519, or 610 of the Commercial Act, the period from the start date of the business year until the registration date of continuation (referring to the date of actual continuation of business if continuation is not registered; hereinafter the same shall apply) and the period from the day following the registration date of continuation until the end date of the business year shall be deemed one business year, respectively. <Amended by Act No. 13555, Dec. 15, 2015>
(4) Where a domestic corporation is subject to a consolidated tax return system during a business year, the period from the start date of the business year to the date preceding the start date of the consolidated business year shall be deemed one business year.
(5) Where a foreign corporation with a domestic place of business ceases to have the domestic place of business during a business year, the period from the start date of the business year until the date it ceases to have the place of business shall be deemed one business year: Provided, That the same shall not apply where it continues to have another place of business in the Republic of Korea.
(6) Where a foreign corporation with no domestic place of business reports to the head of the tax office having jurisdiction over the place of tax payment that it has no longer earned income referred to in subparagraph 3 or 7 of Article 93, the period from the start date of the business year to the filing date of such report shall be deemed one business year.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 9 (Place of Tax Payment)
(1) The place where a domestic corporation shall pay its corporate tax shall be the place where its registered headquarters or main office is located (the location of the actual business management place if no headquarters or main office is located in the Republic of Korea): Provided, That for an organization deemed a corporation, it shall be the place prescribed by Presidential Decree.
(2) The place where a foreign corporation shall pay its corporate tax shall be the place where its domestic place of business is located: Provided, That for a foreign corporation with no domestic place of business which earns income referred to in subparagraph 3 or 7 of Article 93, it shall be the location of each of its assets.
(3) Where a foreign corporation falling under paragraph (2) has at least two domestic places of business, the location of the main place of business prescribed by Presidential Decree shall be the place of tax payment, and where a corporation has at least two assets, the place prescribed by Presidential Decree shall be the place of its tax payment.
(4) The place where corporate tax withheld under Article 73, 98, 98-3, 98-5 or 98-6 shall be the location of the relevant person liable for withholding prescribed by Presidential Decree: Provided, That where a person liable for withholding referred to in Article 98 or 98-3 has no domestic place of business, it shall be the place prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 10 (Designation of Place of Tax Payment)
(1) Where the commissioner of the competent regional tax office (referring to the commissioner of a regional tax office prescribed in Article 12; hereinafter the same shall apply) or the Commissioner of the National Tax Service deems that the place of tax payment determined under Article 9 is inappropriate for a corporation in circumstances prescribed by Presidential Decree, he/she may designate a place of tax payment, notwithstanding Article 9.
(2) Where the commissioner of the competent regional tax office or the Commissioner of the National Tax Service designates a place of tax payment under paragraph (1), he/she shall give a notice to the relevant corporation, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 11 (Alteration of Place of Tax Payment)
(1) Where a corporation's place of tax payment is altered, the corporation shall report such fact to the head of the tax office having jurisdiction over the new place of tax payment within 15 days from the date of the alteration, as prescribed by Presidential Decree. In such cases, where a corporation of which the place of tax payment has been altered has reported the alteration under Article 8 of the Value-Added Tax Act, the alteration of the place of tax payment shall be deemed reported. <Amended by Act No. 11873, Jun. 7, 2013>
(2) Where no report is filed under paragraph (1), the former place of tax payment shall be a corporation's place of tax payment.
(3) Where a foreign corporation ceases to have a domestic place of tax payment falling under Article 9 (2), it shall report such fact to the head of the tax office having jurisdiction over the place of tax payment.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 12 (Jurisdiction over Taxation)
Corporate tax shall be imposed by the head of the tax office having jurisdiction over the place of tax payment prescribed in Articles 9 through 11 or the commissioner of a regional tax office.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
CHAPTER II CORPORATE TAX ON INCOME OF DOMESTIC CORPORATION FOR EACH BUSINESS YEAR
SECTION 1 Tax Base and Calculation
Subsection 1 Common Provisions
 Article 13 (Tax Base)
The corporate tax base on the income of a domestic corporation for each business year shall be calculated by deducting the following amounts and income in the following order from the income earned for each business year: Provided, That, in cases of a domestic corporation, except the corporations specified by Presidential Decree, such as small and medium enterprises referred to in Article 5 (1) of the Restriction of Special Taxation Act and enterprises performing a rehabilitation plan, the maximum deductible amount under subparagraph 1 shall be 60/100 of the income for each business year (but the maximum deductible amount for the business year beginning between January 1 and December 31, 2018 shall be 70/100 of income for the year): <Amended by Act No. 13555, Dec. 15, 2015; Act No. 15222, Dec. 19, 2017>
1. Losses incurred during each business year starting within ten years before the start date of the current business year which were not deducted in the calculation of the tax base for each business year thereafter. In such cases, losses shall be limited to the amounts provided for in Article 14 (2) which are included in the tax base reported under Article 60 or determined or corrected under Article 66 or reported for revision under Article 45 of the Framework Act on National Taxes;
2. Non-taxable income prescribed in this Act and other Acts;
3. Income deductions prescribed in this Act and other Acts.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 14 (Income for Each Business Year)
(1) The income of a domestic corporation for each business year shall be the amount calculated by deducting the total amount of deductible expenses incurred during the relevant business year from the total amount of gross income accrued during the relevant business year.
(2) If the total amount of deductible expenses incurred during a business year exceeds the total amount of gross income accrued during the business year, such excess shall be the losses of a domestic corporation for each business year.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
Subsection 2 Calculation of Gross Income
 Article 15 (Scope of Gross Income)
(1) The gross income shall be the amount of earnings generated by transactions which increase the net assets of a corporation, except for capital input or financing and what is provided in this Act.
(2) The following amounts shall be deemed gross income: <Amended by Act No. 11128, Dec. 31, 2011>
1. Where securities are purchased from an individual who is a related party provided for in Article 52 (1) at the prices lower than the market prices referred to in Article 52 (2), the amount of the difference between such market prices and the relevant purchase prices;
2. An amount equivalent to the amount of foreign corporate tax referred to in Article 57 (4) (limited to any tax credit granted);
3. The amount of income distributed under Article 100-18 (1) of the Restriction of Special Taxation Act.
(3) Matters necessary for the scope and classification of earning under paragraph (1) and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 16 (Constructive Dividends or Distributions)
(1) For purposes of this Act, any of the following amounts shall be deemed the amount of profit dividends or surpluses distributed from a corporation: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016>
1. The sum of money acquired by a stockholder, employee, or investor (hereinafter referred to as "stockholder, etc.") through the retirement of stocks, reduction of capital, retirement or withdrawal of an employee, or reduction of investment and the value of other assets in excess of the amount necessary for the stockholder, etc., to acquire the relevant stocks or investment shares (hereinafter referred to as "stocks, etc.");
2. The value of stocks, etc., acquired by transferring all or some of corporation's surplus to capital or financing: Provided, That the same shall not apply where any of the following amounts is transferred to capital:
(a) An amount prescribed by Presidential Decree as the capital reserve referred to in Article 459 (1) of the Commercial Act;
(b) The revaluation reserve prescribed in the Assets Revaluation Act (excluding an amount equivalent to any difference in the revaluation of land under Article 13 (1) 1 of the same Act);
3. Where the equity ratio of any stockholder, etc., of a corporation, other than the corporation, increases because such corporation transfers its capital, as prescribed in the items of subparagraph 2 while holding treasury stocks and equity shares, the value of stocks, etc., equivalent to the equity ratio so increased;
4. The amount of money and the value of other assets acquired by stockholders, etc., of a dissolved corporation (including members of an organization deemed a corporation) through distribution of residual assets of the corporation in excess of the amount necessary for the acquisition of the relevant stocks, etc.;
5. The sum of values of stocks, etc., of a surviving corporation or the parent company of the surviving corporation (referring to a domestic corporation holding the total number of outstanding stocks or total investment amount of a surviving corporation as at the registration date of the merger; hereinafter the same shall apply), money, and other assets acquired by stockholders, etc., of a corporation disappearing in the course of a merger (hereinafter referred to as "merged corporation") from a corporation surviving the merger or established in the course of such merger (hereinafter referred to as "surviving corporation") in return for the merger (hereinafter referred to as "costs of a merger") in excess of the amount necessary for the acquisition of the stocks, etc., of the merged corporation;
6. Where a corporation is divided, the sum of values of stocks (in cases of a division and merger, including the stocks of the domestic corporation that holds the total number of outstanding stocks of the counterpart corporation to the division and merger or the total amount of investment), money, and other assets acquired by stockholders of the divided corporation (hereinafter referred to as "divided corporation") or of the disappearing counterpart corporation to a division and merger from the corporation established through the division (hereinafter referred to as "corporation established through division") or the counterpart corporation to the division and merger upon the division (hereinafter referred to as "costs of a division") in excess of the amount necessary for the acquisition of the stocks of the divided corporation or disappearing counterpart corporation to a division and merger (limited to stocks reduced by retirement or other means where the divided corporation survives the division).
(2) For the purposes of paragraph (1), matters necessary for the timing for the distribution of profit dividends or surpluses, the evaluation of the value of stocks, etc., and other matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 17 (Non-Inclusion of Gains from Capital Transactions in Gross Income)
(1) No gain specified in any of the following subparagraphs shall be included in the gross income for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013; Act No. 13555, Dec. 15, 2015>
1. An amount exceeding the par value of stocks issued: If stocks are issued in excess of the par value, the amount exceeding the par value of stocks issued (referring to the amount exceeding the amount counted as capital, out of the issue price, in cases of non-par value stocks): Provided, That where stocks, etc. are issued by converting debts into equity, the amount of such stocks issued in excess of the market price referred to in Article 52 (2) shall be excluded herefrom;
2. Marginal profits from an all-inclusive share swap: The amount exceeding the increased capital of a wholly-owning parent corporation, where the maximum limit of capital increase referred to in Article 360-7 of the Commercial Act exceeds the increased capital of the wholly-owning parent corporation as a result of an all-inclusive share swap referred to in Article 360-2 of the same Act;
3. Marginal profits from an all-inclusive share transfer: The amount exceeding the equity capital of a wholly-owning parent corporation newly incorporated, where the maximum limit of the equity increase referred to in Article 360-18 of the Commercial Act exceeds the equity capital of the wholly-owning parent corporation as a result of an all-inclusive share transfer referred to in Article 360-15 of the same Act;
4. Marginal profits from capital reduction: The amount exceeding the amount paid for the cancellation of stocks and the return of stock prices and the amount appropriated for compensation for losses exceeding the amount reduced;
5. Marginal profits from a merger: The amount exceeding the amount of debts to which the surviving corporation succeeds from the disappearing corporation and the increased amount of the equity capital of the surviving corporation or the equity capital of the corporation newly incorporated as a consequence of the merger, where the value of the assets to which the corporation surviving a merger pursuant to Article 174 of the Commercial Act succeeds from the disappearing corporation exceeds the amount of debts to which the surviving corporation succeeds from the disappearing corporation and the increased amount of the equity capital of the surviving corporation or the equity capital of the corporation newly incorporated as a consequence of the merger: Provided, That the amount identified as gross income under this Act shall be excluded, if the value of assets to which the surviving corporation succeeds from the disappearing corporation exceeds the amount of debts to which the surviving corporation succeeds from the disappearing corporation, the amount paid to stockholders of the disappearing corporation, and the value of stocks;
6. Marginal profits from a division: The amount exceeding the amount of debts to which a corporation succeeds from the investing corporation, the amount paid to stockholders of the investing corporation, and the equity capital of the corporation newly incorporated or the increased amount of the equity capital of the surviving corporation, where the value of the assets invested in a corporation newly incorporated as a consequence of a division or a division and merger referred to in Article 530-2 of the Commercial Act or in a corporation surviving such division or such division and merger exceeds the amount of debts to which such corporation succeeds from the investing corporation, the amount paid to stockholders of the investing corporation, and the equity capital of the corporation newly incorporated or the increased amount of the equity capital of the surviving corporation.
(2) Amounts prescribed by Presidential Decree which are not subject to subparagraph 6 of Article 18 among the amounts in excess referred to in the proviso to paragraph (1) 1 shall not be included in the gross income of the relevant business year and may be appropriated for covering losses incurred in each business year thereafter.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 18 (Non-Inclusion of Evaluation Profits, etc. in Gross Income)
None of the following shall be included in gross income for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 12153, Jan. 1, 2014>
1. Profits from the evaluation of assets: Provided, That profits from the evaluation referred to in each subparagraph of Article 42 (1) shall be excluded herefrom;
2. Gross income carried forward;
3. An amount refunded or refundable, out of the corporate tax or local corporate income tax not included in deductible expenses under subparagraph 1 of Article 21, but set off against other taxes;
4. Interest on the refund of overpaid or erroneously-paid national or local taxes;
5. Output tax of value-added tax;
6. An amount appropriated for covering carried forward losses prescribed by Presidential Decree among the value of assets gratuitously acquired, and the amount of reduced debt due to exemption from or expiration of debts;
7. An amount paid or payable by a consolidated subsidiary corporation under Article 76-19 (2);
8. Dividends received by decreasing the capital reserve under Article 461-2 of the Commercial Act: Provided, That the dividends on the capital reserve not falling under each item of Article 16 (1) 2 shall be excluded.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 18-2 (Non-Inclusion of Holding Companies' Dividend Income in Gross Income)
(1) Where the sum computed under subparagraphs 1 and 2, among profit dividends or surplus distributions or constructive dividends or distributions provided in Article 16 (hereafter referred to as "dividend income" in this Article and Articles 18-3 and 76-14) that a holding company under the Monopoly Regulation and Fair Trade Act, a financial holding company under the Financial Holding Companies Act, an advanced technology holding company of a public research institute under the Technology Transfer and Commercialization Promotion Act, or an industrial-academia-research cooperation technology holding company under the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act (hereafter referred to as "holding company" in this Article) receives from its subsidiary (referring to a domestic corporation in which the relevant holding company has invested and which meets the requirements prescribed by Presidential Decree in consideration of the holding company's equity investment ratio in the subsidiary; hereafter the same shall apply in this Article), exceeds the amount computed under subparagraph 3, such excess shall not be included in gross income for the purpose of calculating the amount of income for each business year: <Amended by Act No. 10907, Jul. 25, 2011; Act No. 11128, Dec. 31, 2011>
1. The amount equivalent to the total amount of dividend income received from the subsidiary if a holding company has invested in excess of 80/100 [referring to 40/100 in the case of a listed-stock corporation prescribed by the Financial Investment Services and Capital Markets Act (hereinafter referred to as "listed-stock corporation")] of the number of the total number of issued stocks or the total investment amount of the relevant subsidiary;
2. The amount computed by multiplying the dividend income received from the subsidiary by 80/100, if a holding company has invested in the relevant subsidiary at a ratio lower than that prescribed by subparagraph 1: Provided, That with respect to the dividend income received from the relevant subsidiary during the period from January 1, 2007 through December 31, 2007, it shall be the amount computed by multiplying the dividend income by 70/100;
3. The amount calculated, as prescribed by Presidential Decree, considering the ratio of non-inclusion in gross income referred to in subparagraphs 1 and 2, and the ratio of investments in the subsidiary to the total assets of the holding company, etc., if interest on borrowings has been paid by the holding company in each business year.
(2) Paragraph (1) shall not apply to any of the following dividend income:
1. The dividend income accruing upon holding stocks, etc. acquired within three months prior to the base date of dividend distribution;
2. The dividend income paid by any corporation prescribed by Presidential Decree, which is entitled to income deductions on the dividend payable, or the non-taxation, exemption, or reduction of corporate tax under this Act and the Restriction of Special Taxation Act.
(3) In applying paragraph (1) or (2), necessary matters for the method for computing the ratio of equity investment by a holding company in its subsidiary, amounts excluded from gross income, submission of a detailed dividend income statement and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 18-3 (Non-Inclusion of Dividend Income in Gross Income)
(1) Where the sum computed under subparagraphs 1 and 2 exceeds the amount computed under subparagraph 3, among the dividend income (excluding any dividend income subject to Article 18-2) that a domestic corporation (excluding a non-profit domestic corporation as defined in subparagraph 2 of Article 1; hereafter the same shall apply in this Article) receives from another domestic corporation in which the former has made an equity investment, such excess shall not be included in gross income for the purpose of calculating the amount of income for each business year:
1. The amount computed by multiplying the dividend amount received from an invested domestic corporation by 50/100 where an investing domestic corporation has invested in excess of 50/100 (30/100 in the case of a listed-stock corporation) of the total number of issued stocks or total investment amount of such invested domestic corporation: Provided, That the total number of issued stocks or the total investment amount have been invested, it means the amount equivalent to the total dividend income received from the invested domestic corporation;
2. The amount computed by multiplying the dividend income received from an invested domestic corporation by 30/100 where the relevant investing domestic corporation has invested at a ratio lower than that provided in subparagraph 1;
3. The amount calculated, as prescribed by Presidential Decree by applying mutatis mutandis Article 18-2 (1) 3 where any interest on borrowings has been paid by any domestic corporation in each business year.
(2) Paragraph (1) shall not apply to the dividend income paid under each subparagraph of Article 18-2 (2).
(3) In applying paragraphs (1) and (2), necessary matters for the method for computing the ratio of equity investment, the amounts excluded from gross income, the submission of a detailed dividend income statement and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
Subsection 3 Calculation of Deductible Expenses
 Article 19 (Scope of Deductible Expenses)
(1) Deductible expenses shall be the amount of losses incurred by transactions which reduce the net assets of a corporation, excluding return of capital or financing, disposition of surplus funds, and what is provided for in this Act.
(2) Deductible expenses referred to in paragraph (1) shall be losses or expenses incurred in connection with the business of a corporation which are generally accepted as ordinary or directly related to profits, except those otherwise expressly prescribed by this Act and other Acts.
(3) Losses distributed under Article 100-18 (1) of the Restriction of Special Taxation Act shall be deemed deductible expenses referred to in paragraph (1).
(4) Matters necessary for the scope and types of deductible expenses referred to in paragraphs (1) through (3) and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 19-2 (Non-Inclusion of Bad Debt Expenses in Deductible Expenses)
(1) The amount of irrecoverable claims (hereinafter referred to as "bad debt expenses") due to grounds prescribed by Presidential Decree, such as bankruptcy of the debtor, among the claims held by a domestic corporation, shall be included in deductible expenses for the purpose of calculating the amount of income of the relevant business year.
(2) Paragraph (1) shall not apply to any of the following claims:
1. Claims for indemnity arising from debt guarantees (excluding debt guarantees prescribed by Presidential Decree, such as debt guarantees referred to in any of the subparagraphs of Article 10-2 (1) of the Monopoly Regulation and Fair Trade Act);
2. Those falling under Article 28 (1) 4 (b).
(3) The amount recovered among bad debt expenses included in deductible expenses under paragraph (1) shall be included in gross income for the purpose of calculating the amount of income for the business year in which the date of recovery falls.
(4) A domestic corporation that intends to apply paragraph (1) shall submit a detailed statement of bad debt expenses to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(5) Matters necessary for the scope and disposal of bad debt expenses and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 20 (Non-Inclusion of Losses from Capital Transactions, etc. in Deductible Expenses)
None of the following losses shall be included in deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended by Act No. 15222, Dec. 19, 2017>
1. The amount computed by counting (referring to counting as losses when settlement of accounts is fixed; hereinafter the same shall apply) the appropriation of surpluses as losses;
2. Deleted; <by Act No. 11128, Dec. 31, 2011>
3. Margins from the issuance of stocks at below par value.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 21 (Non-Inclusion of Taxes and Public Charges in Deductible Expenses)
None of the following taxes and public charges shall be included in deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended by Act No. 6293, Dec. 29, 2000; Act No. 6558, Dec. 31, 2001; Act No. 8141, Dec. 30, 2006; Act No. 8831, Dec. 31, 2007; Act No. 9267, Dec. 26, 2008; Act. No. 9924, Jan. 1, 2010; Act No. 10423, Dec. 30, 2010; Act No. 12153, Jan. 1, 2014>
1. Corporate tax (including the amount of foreign corporate tax prescribed in Article 57) or pro rata local income tax paid or payable for each business year, the amount of tax paid or payable (including penalty tax) due to non-performance of duties prescribed by tax-related Acts, and the input tax of value-added tax (excluding the amount of tax exempt from value-added tax or in circumstances prescribed by Presidential Decree);
2. The unpaid amount of individual consumption tax, liquor tax, or traffic/energy and environmental tax on unsold manufactured goods: Provided, That the same shall not apply where the price of the manufactured goods includes an amount equivalent to such amount of tax;
3. Fines, penalties (including an amount equivalent to fines or penalties stated on a dispositions notice), administrative fines (including penalties and fines), surcharges, and disposition fees for arrears;
4. Public charges that are not mandatory under Acts and subordinate statutes;
5. Public charges imposed as sanctions for non-performance of duties, or a violation of any of prohibitions or restrictions imposed under Acts and subordinate statutes;
6. Amount paid or payable to a consolidated parent corporation pursuant to Article 76-19 (2).
 Article 21 (Non-Inclusion of Taxes and Public Charges in Deductible Expenses)
None of the following taxes and public charges shall be included in deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended by Act No. 6293, Dec. 29, 2000; Act No. 6558, Dec. 31, 2001; Act No. 8141, Dec. 30, 2006; Act No. 8831, Dec. 31, 2007; Act No. 9267, Dec. 26, 2008; Act. No. 9346, Jan. 30, 2009; Act. No. 9924, Jan. 1, 2010; Act No. 10423, Dec. 30, 2010; Act No. 12153, Jan. 1, 2014>
1. Corporate tax (including the amount of foreign corporate tax prescribed in Article 57) or pro rata local income tax paid or payable for each business year, the amount of tax paid or payable (including penalty tax) due to non-performance of duties prescribed by tax-related Acts, and the input tax of value-added tax (excluding the amount of tax exempt from value-added tax or in circumstances prescribed by Presidential Decree);
2. The unpaid amount of individual consumption tax or liquor tax on unsold shipped-out goods: Provided, That the same shall not apply where the price of the manufactured goods includes an amount equivalent to such amount of tax;
3. Fines, penalties (including an amount equivalent to fines or penalties stated on a dispositions notice), administrative fines (including penalties and fines), surcharges, and disposition fees for arrears;
4. Public charges that are not mandatory under Acts and subordinate statutes;
5. Public charges imposed as sanctions for non-performance of duties, or a violation of any of prohibitions or restrictions imposed under Acts and subordinate statutes;
6. Amount paid or payable to a consolidated parent corporation pursuant to Article 76-19 (2).
<<Enforcement Date: Jan. 1, 2019>>
 Article 21-2 (Non-Inclusion of Punitive Damages, etc. in Deductible Expenses)
The amount specified by Presidential Decree that a domestic corporation paid in excess of actually incurred losses as part of damages shall not be included in deductible expenses, in calculating the amount of income for each business year of the domestic corporation.
[This Article Newly Inserted by Act No. 15222, Dec. 19, 2017]
 Article 22 (Non-Inclusion of Losses from Evaluation of Assets in Deductible Expenses)
Losses from the evaluation of assets held by a domestic corporation shall not be included in deductible expenses for the purpose of calculating the amount of income of the domestic corporation for each business year: Provided, That the same shall not apply to the losses incurred by evaluating assets under Article 42 (2) and (3).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 23 (Non-Inclusion of Depreciation Costs in Deductible Expenses)
(1) Depreciation costs of fixed assets shall be included in deductible expenses only if they are counted as deductible expenses up to the amount computed, as prescribed by Presidential Decree (hereafter referred to as "allowable depreciation" in this Article) for the purpose of calculating the amount of income of a domestic corporation for the relevant business year, and the amount appropriated in excess of the allowable depreciation shall not be included in such deductible expenses: Provided, That where the relevant domestic corporation is entitled to exemption from or reduction of corporate tax, the depreciation costs shall be included in the deductible expenses, as prescribed by Presidential Decree for the purpose of calculating the amount of income of such domestic corporation for the relevant business year.
(2) Notwithstanding the main sentence of paragraph (1), the depreciation costs of tangible fixed assets and intangible fixed assets with indefinite service life prescribed by Presidential Decree, among fixed assets owned by a domestic corporation that applies the accounting standards (hereinafter referred to as "international accounting standards") under Article 13 (1) 1 of the Act on External Audit of Stock Companies may be additionally included in the deductible expenses within the difference if any of the following amounts for each item of asset exceeds the amount included in the deductible expenses under paragraph (1):
1. Assets acquired on or before December 31, 2013: Where the depreciation costs are appropriated according to the previous method without applying the international accounting standards, the amount equivalent to the depreciation costs to be included in the deductible expenses under the main sentence of paragraph (1) (hereafter referred to as "previous depreciation costs" in this Article);
2. Assets acquired on or after January 1, 2014: The amount equivalent to the depreciation costs computed by applying the standard service life prescribed by Ordinance of the Ministry of Strategy and Finance (hereafter referred to as "standard depreciation costs" in this Article);
(3) Fixed assets referred to in paragraphs (1) and (2) mean assets prescribed by Presidential Decree, such as buildings, machinery, equipment and patent rights, except land.
(4) Any domestic corporation which appropriates depreciation costs as deductible expenses under paragraph (1) or (2) shall submit a detailed statement of depreciation costs to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(5) In applying paragraphs (1) and (2), matters necessary for the method of appropriating depreciation costs as deductible expenses, the disposal of the amount in excess of the allowable depreciation, the timing for application of the international accounting standards, the calculation of previous depreciation costs and standard depreciation costs and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 24 (Non-Inclusion of Donations in Deductible Expenses)
(1) Among donations prescribed by Presidential Decree giving due consideration to public interest, such as social welfare, culture, art, education, religion, charity, and science (hereinafter referred to as "designated donation") with respect to donations made by a domestic corporation in each business year, the amount in excess of 10/100 of the amount computed by subtracting the amount referred to in subparagraph 2 from the amount referred to in subparagraph 1 (referred to as "ceiling on inclusion in deductible expenses" hereafter in this Article) and donations, other than designated donations, shall not be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year:
1. The amount of income for the relevant business year (the amount prior to the inclusion of donations computed pursuant to paragraph (2), excluding transfer gains or losses prescribed in Articles 44, 46 and 46-5 and designated donations in deductible expenses; the same shall apply hereafter in this Article);
2. The sum of the donations included in deductible expenses pursuant to paragraph (2) and the losses referred to in subparagraph 1 of Article 13.
(2) Paragraph (1) and Article 29 shall not apply to any of the following donations (hereinafter referred to as "statutory donation"): Provided, That, where the sum of the statutory donations exceeds the amount computed by multiplying 50/100 of the losses referred to in subparagraph 1 of Article 13 from the amount of income for the relevant business year (referred to as "ceiling on inclusion of statutory donations in deductible expenses" hereafter in this Article), the excess shall not be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year: <Amended by Act No. 10907, Jul. 25, 2011; Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013; Act No. 12166, Jan. 1, 2014; Act No. 13230, Mar. 27, 2015>
1. The value of money and valuables gratuitously donated to the State or a local government: Provided, That this shall be limited to money and valuables received under Article 5 (2) of the Act on Collection and Use of Donations, if such money and valuables are subject to said Act;
2. The value of contributions for national defense and money and valuables contributed for the consolation and comfort of soldiers of the national armed forces;
3. The value of money and valuables contributed for victims of natural disasters;
4. Donations given to the following institutions (excluding hospitals) for facility expenses, educational expenses, scholarships, or research funds:
(a) Private schools established under the Private School Act;
(b) Non-profit educational foundations (limited to non-profit incorporated foundations established for the purpose of paying facility expenses, educational expenses, scholarships, or research funds for national, public or private schools);
(c) Polytechnic colleges defined in the Act on the Development of Vocational Skills of Workers;
(d) Lifelong educational facilities that may use the name of major college under the Lifelong Education Act and lifelong educational facilities in the form of a distance college;
(g) The Korea Advanced Institute of Science and Technology established under the Korea Advanced Institute of Science and Technology Act, the Gwangju Institute of Science and Technology established under the Gwangju Institute of Science and Technology Act, the Daegu Gyeongbuk Institute of Science and Technology established under the Daegu Gyeongbuk Institute of Science and Technology Act, and the Ulsan National Institute of Science and Technology established under the Ulsan National Institute of Science and Technology Act;
(h) Seoul National University established under the Act on Establishing and Administrating Seoul National University, Incheon National University established under the Act on Establishing and Administrating Incheon National University, and other similar schools prescribed by Presidential Decree;
(i) Korean schools defined in subparagraph 3 of Article 2 of the Act on the Educational Support, etc. for Korean Nationals Residing Abroad (limited to schools that meet requirements prescribed by Presidential Decree);
5. Donations given to the following hospitals for facility expenses, educational expenses, or research funds:
(a) National university-affiliated hospitals established under the Act on the Establishment of National University-Affiliated Hospitals;
(b) National university-affiliated dental hospitals established under the Act on the Establishment of National University-Affiliated Dental Hospitals;
(c) Seoul National University Hospital established under the Establishment of Seoul National University Hospital Act;
(d) Seoul National Dental Hospital established under the Establishment of Seoul National Dental Hospital Act;
(e) Hospitals operated by private schools as defined in the Private School Act;
(f) National Cancer Center established under the Cancer Control Act;
(g) Local medical centers established under the Act on the Establishment and Management of Local Medical Centers;
(h) National Medical Center established under the Act on Establishing and Administrating the National Medical Center;
(i) Hospitals operated by the Korean National Red Cross established under the Organization of the Korean National Red Cross Act;
(j) Hospitals operated by the Korea Veterans Welfare and Healthcare Corporation established under the Korea Veterans Health Service Act;
(k) Korea Institute of Radiological and Medical Sciences established under Article 13-2 of the Radiation and Radioisotope Use Promotion Act;
(l) Hospitals operated by the National Health Insurance established under the National Health Insurance Act;
6. Donations given to corporations that meet requirements prescribed by Presidential Decree, as non-profit organizations that mainly aim to raise and distribute funds necessary for supporting social welfare services and other social welfare activities;
7. Deleted. <by Act No. 15222, Dec. 19, 2017>
(3) Corporations or institutions referred to in paragraph (2) 6 shall be determined by Ordinance of the Ministry of Strategy and Finance, as prescribed by Presidential Decree. <Amended by Act No. 15222, Dec. 19, 2017>
(4) The amount in excess of the ceilings on inclusion of designated donations in deductible expenses and the amount in excess of the ceilings on inclusion of statutory donations in deductible expenses that are not included in deductible expenses pursuant to paragraphs (1) and (2), shall be carried forward and included in deductible expenses for each business year which ends within five years from the start date of the business year following the relevant business year, as prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 12166, Jan. 1, 2014>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 25 (Non-Inclusion of Entertainment Expenses in Deductible Expenses)
(1) Entertainment expenses (excluding the amount provided for in paragraph (2)) paid by a domestic corporation for each business year in excess of the sum of the following amounts (or the amount calculated by multiplying the sum by 50/100, if the domestic corporation engages mainly in real estate leasing business or meets the criteria prescribed by Presidential Decree), shall not be included in deductible expenses in calculating the amount of income for the relevant business year: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013; Act No. 12850, Dec. 23, 2014; Act No. 14386, Dec. 20, 2016>
1. The amount computed by multiplying 12 million won (or 18 million won for small or medium enterprises prescribed by Presidential Decree (24 million won until the business year in which December 31, 2016 falls)) by the number of months in the relevant business year, and then dividing it by 12;
2. The amount computed by multiplying the amount of income for the relevant business year (limited to the amount of income prescribed by Presidential Decree) by the rates specified in the following table: Provided, That with respect to the amount of income accrued from transactions with a related party provided for in Article 52 (1), it means an amount equivalent to 10/100 of the amount computed by multiplying such amount of income by the rates specified in the following table:
Amount of IncomeRate
Not exceeding 10,000,000,000 won20/10,000
Between 10,000,000,000 won and 50,000,000,000 won 20,000,000 won+10/10,000 of the amount in excess of 10,000,000,000 won
Exceeding 50,000,000,000 won 60,000,000 won+3/10,000 of the amount in excess of 50,000,000,000 won
(2) Entertainment expenses paid by a domestic corporation in excess of the amount prescribed by Presidential Decree on one occasion, which do not fall under any of the following, shall not be included in deductible expenses for the purpose of calculating the amount of income for each business year: Provided, That the same shall not apply to any entertainment expenses paid in any foreign country prescribed by Presidential Decree for farmers or fishermen, which makes it impractical to obtain documents evidencing that such entertainment expenses fall under any of the followings, but the expenditure of such entertainment expenses is objectively unquestionable: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11128, Dec. 31, 2011; Act No. 11873, Jun. 7, 2013>
1. Entertainment expenses paid upon using any of the following (hereinafter referred to as "credit card, etc."):
(a) Credit cards defined in the Specialized Credit Finance Business Act (including items prescribed by Presidential Decree and similar to credit cards; the same shall apply hereafter in Article 117);
(b) Cash Receipts prescribed in Article 126-3 (4) of the Restriction of Special Taxation Act (hereinafter referred to as "Cash Receipts");
2. Expenses paid upon receiving an invoice referred to in Article 121 of this Act or Article 163 of the Income Tax Act or a tax invoice referred to in Article 32 of the Value-Added Tax Act or upon issuing a purchaser-issued tax invoice pursuant to Article 126-4 (1) of the Restriction of Special Taxation Act or a withholding receipt prescribed by Presidential Decree.
(3) Where a sales slip, etc., is issued in the name of a credit card merchant, etc., which is not the one that actually supplies the relevant goods or services, the relevant amount of spending shall not be included in the entertainment expenses referred to in paragraph (2) 1 for the purposes of paragraph (2) 1. <Amended by Act No. 10423, Dec. 30, 2010>
(4) Deleted. <by Act No. 6558, Dec. 31, 2001>
(5) "Entertainment expenses" referred to in paragraphs (1) through (3) means entertainment expenses, social expenses, honoraria, or other expenses of a similar nature spent by a corporation in connection with its business, however named. <Amended by Act No. 10423, Dec. 30, 2010>
(6) The scope of entertainment expenses, keeping documents evidencing disbursement, and other necessary matters, shall be prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
 Article 26 (Non-Inclusion of Excessive Expenses in Deductible Expenses)
Among the following deductible expenses, the amount deemed excessive or inappropriate, as prescribed by Presidential Decree, shall not be included in deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year:
1. Personnel expenses;
2. Expenses for fringe benefits;
3. Travel expenses and educational and training expenses;
4. Losses incurred or paid by a corporation in the course of jointly operating or managing an identical organization or business with a person, other than the corporation;
5. Expenses prescribed by Presidential Decree, other than those referred to in subparagraphs 1 through 4, deemed to have little direct connection to the business of a corporation.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 27 (Non-Inclusion of Non-Business Expenses in Deductible Expenses)
Among expenses incurred by a domestic corporation during each business year, none of the following amounts shall be included in deductible expenses for purposes of calculating the amount of income of the relevant business year:
1. An amount prescribed by Presidential Decree, such as expenses incurred in acquiring and managing the assets prescribed by Presidential Decree, which are deemed to have no direct connection to the business of the corporation;
2. Expenditures prescribed by Presidential Decree, other than the amount prescribed in subparagraph 1, which are deemed to have no direct connection to the business of the corporation.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 27-2 (Special Cases, Including Exclusion of Expenses Incurred in Relation to Passenger Vehicles for Business Use from Deductible Expenses)
(1) Depreciation costs of the passenger vehicles provided for in Article 1 (2) 3 of the Individual Consumption Tax Act (excluding passenger vehicles specified by Presidential Decree and directly used for such business as transportation business or motor vehicle sales business; hereafter in this Article referred to as "passenger vehicles for business use") shall be included in deductible expenses for the purpose of computing the amount of income for the relevant business year, as prescribed by Presidential Decree.
(2) The amount that does not fall in the scope of expenses prescribed by Presidential Decree incurred for business use (referred to as "expenses incurred for business use" hereafter in this Article), among expenses specified by Presidential Decree, such as depreciation costs, rental charges, and fuel expenses, included in deductible expenses or expended during the relevant business year for passenger vehicles that a domestic corporation has acquired or rented for business use (referred to as "expenses incurred in relation to passenger vehicles for business use" hereafter in this Article) shall not be included in deductible expenses for the purpose of computing the amount of income for the relevant business year.
(3) In applying paragraph (2), if either of the following cost or amount, out of expenses incurred for business use, exceeds eight million won during a business year (referring to the amount calculated by multiplying eight million won by the number of months during the relevant business year and then dividing the amount therefrom by 12, if the relevant business year is less than one year, or the amount calculated by multiplying eight million won by the number of months during the period of owning or renting the relevant vehicle and then dividing the amount therefrom by the number of months during the relevant business year, if the vehicle was owned or rented for a certain period during the business year), the excess amount (hereafter referred to as "excess of the ceiling on depreciation costs" in this Article) shall not be included in deductible expenses for the relevant business year but shall be carried over to the following term and shall be included in deductible expenses by the method prescribed by Presidential Decree: <Amended by Act No. 15222, Dec. 19, 2017>
1. The depreciation cost of each passenger vehicle for business use;
2. The amount specified by Presidential Decree as equivalent to depreciation costs, among rental charges for each passenger vehicle for business use.
(4) Where the loss incurred in disposing of passenger vehicles for business use exceeds eight million won for each passenger vehicle for business use (referring to the amount calculated by multiplying eight million won by the number of months during the relevant business year and then dividing the amount therefrom by 12, if the relevant business year is less than one year), the excess amount shall be included in deductible expenses by carrying over the amount to the following term or by other methods prescribed by Presidential Decree.
(5) For the purpose of applying paragraphs (3) and (4) to a domestic corporation, "eight million won" shall be construed as "four million won" respectively, if the domestic corporation engages mainly in real estate leasing business or meets the criteria prescribed by Presidential Decree. <Newly Inserted by Act No. 14386, Dec. 20, 2016>
(6) Each corporation that includes expenses incurred in relation to passenger vehicles for business use pursuant to paragraphs (1) through (5) shall submit a statement on the expenses incurred in relation to passenger vehicles for business use to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended by Act No. 14386, Dec. 20, 2016>
(7) The method for calculating expenses incurred for business use, the methods for calculating and carrying over the excess of the ceiling on depreciation costs, and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 13555, Dec. 15, 2015]
 Article 28 (Non-Inclusion of Interest Expenses in Deductible Expenses)
(1) Interest on the following loans shall not be included in deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11128, Dec. 31, 2011>
1. Interest on debentures for which the creditor is unknown;
2. Interest on, a discount of, or gains from bonds and securities referred to in Article 16 (1) 1, 2, 5, and 8 of the Income Tax Act, which are prescribed by Presidential Decree, the interest on, discount of, or gains from bonds and securities for which the recipient is unknown;
3. Interest on loans appropriated for construction capital prescribed by Presidential Decree;
4. Among interest on loans paid during each business year by a domestic corporation which acquires or owns any of the following assets, the amount calculated, as prescribed by Presidential Decree (the ceiling thereon shall be the interest on loans equivalent to the value of the relevant assets):
(a) Assets referred to in subparagraph 1 of Article 27;
(b) Provisional payments, etc. prescribed by Presidential Decree to a related party provided for in Article 52 (1) with no connection to the business of the relevant corporation.
(2) An amount prescribed by Presidential Decree and calculated by subtracting the interest referred to in paragraph (1) 3 from the interest on loans appropriated for construction capital, may not be included in the deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year. <Newly Inserted by Act No. 10423, Dec. 30, 2010>
(3) and (4) Deleted. <by Act No. 7317, Dec. 31, 2004>
(5) Where the provisions governing the non-inclusion of interest expenses in deductible expenses stipulated in each subparagraph of paragraph (1) apply concurrently, such provisions shall apply in the order prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
(6) Matters necessary for the scope and calculation of loans and interest expenses under paragraph (1) and other matters shall be prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
Subsection 4 Inclusion of Reserve Funds and Appropriation Funds in Deductible Expenses
 Article 29 (Inclusion of Reserve Funds for Proper Purpose Business in Deductible Expenses)
(1) Where a non-profit domestic corporation (limited to organizations prescribed by Presidential Decree in cases of an organization deemed a corporation) appropriates reserve funds for proper purpose business as deductible expenses to expend them for its proper purpose business or designated donations (referred to as "proper purpose business, etc." hereafter in this Article) in each business year, such reserve funds shall be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year, which shall not exceed the aggregate of the following amounts (referring to the amount computed by subtracting a loss from the aggregate of income referred to in subparagraphs 1 through 3, if a loss has been incurred from the profit-making business referred to in subparagraph 4): <Amended by Act No. 11128, Dec. 31, 2011; Act No. 13555, Dec. 15, 2015>
1. The amount of interest income referred to in each subparagraph of Article 16 (1) of the Income Tax Act (excluding profits from non-business loans referred to in Article 16 (1) 11 of the Income Tax Act);
2. The amount of dividend income referred to in each subparagraph of Article 17 (1) of the Income Tax Act: Provided, That excluded herefrom is the amount of dividend income accruing from stocks, etc., which is included in the taxable value of the inheritance tax or gift tax or is subject to gift tax pursuant to Article 16 or 48 of the Inheritance Tax and Gift Tax Act;
3. The amount of interest incurred from loans to members or associates for welfare projects of a non-profit domestic corporation established under any special Act;
4. The amount computed by multiplying income from profit-making business, other than the amounts prescribed in subparagraphs 1 through 3, by 50/100 (80/100 for a corporation established under the Act on the Establishment and Operation of Public Interest Corporations, which expends at least 50/100 of the expenditures for its proper purpose business, for scholarships).
(2) Where a non-profit domestic corporation expends the reserve funds for proper purpose business appropriated as deductible expenses pursuant to paragraph (1) for proper purpose business, etc., it shall offset the amount in sequential order beginning with the reserve funds for proper purpose business appropriated for the business year. In such cases, where the amount expended for proper purpose business, etc., in the relevant business year exceeds the reserve funds for proper purpose business as at the end date of the immediately preceding business year, such excess shall be deemed expended from the reserve funds for proper purpose business to be appropriated for the relevant business year, and paragraph (1) shall apply accordingly.
(3) Where a corporation that has appropriated the reserve funds for proper purpose business as deductible expenses pursuant to paragraph (1) is dissolved after it comprehensively transfers all rights and duties concerning its business to another non-profit domestic corporation, the balance in the reserve funds for proper purpose business as at the registration date of the dissolution may be succeeded to by such non-profit domestic corporation.
(4) Where any of the following events occurs in relation to a non-profit domestic corporation with a balance in the reserve funds for proper purpose business, which has been included in deductible expenses pursuant to paragraph (1), the balance shall be included in gross income for the purpose of calculating the amount of income for the business year in which the relevant event occurs: <Amended by Act No. 12166, Jan. 1, 2014>
1. Where the non-profit domestic corporation is dissolved (excluding where the balance in the reserve funds for proper purpose business is succeeded under paragraph (3));
2. Where the non-profit domestic corporation wholly discontinues its proper purpose business;
3. Where the approval of an organization deemed a corporation is revoked or it is changed to a resident under Article 13 (3) of the Framework Act on National Taxes;
4. Where the non-profit domestic corporation fails to use the reserve funds for proper purpose business appropriated as deductible expenses for proper purpose business, etc., by the fifth anniversary of the end date of the relevant business year (limited to a balance unused within such five years);
5. Where the non-profit domestic corporation partially reverses the balance in the reserve funds for proper purpose business to include it in gross income within five years from the end date of the business year in which the reserve funds for proper purpose business was appropriated as deductible expenses (limited to the balance appropriated as gross income, and, if the balance in the reserve funds for proper purpose business has been appropriated as deductible expenses over several business years, the balance in the reserve fund first appropriated for a certain business year shall be deemed first reversed to be appropriated as gross income and then the remainder shall be deemed reversed and appropriated as gross income successively over the business years).
(5) Where the balance of reserve funds for proper purpose business is included in gross income pursuant to paragraph (4) 4 and 5, an amount equivalent to the interest calculated, as prescribed by Presidential Decree, shall be added to corporate tax to be paid in the relevant business year. <Amended by Act No.12166, Jan. 1, 2014>
(6) Paragraph (1) shall not apply to circumstances prescribed by Presidential Decree, where reductions, exemptions, etc. are granted under this Act or other Acts.
(7) A non-profit domestic corporation which intends to seek the benefit of paragraph (1), shall keep and maintain a statement on the appropriation and expenditure of the relevant reserve funds and submit it to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(8) The scope and succession of proper purpose business and the calculation of income accrued from profit-making business pursuant to paragraphs (1) and (3), and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 30 (Inclusion of Liability Reserve Funds, etc. in Deductible Expenses)
(1) Where a domestic corporation operating an insurance business has appropriated the liability reserve funds and the contingency reserve funds as deductible expenses for each business year under the Insurance Business Act and other Acts, such reserve funds shall be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year up to the amount calculated, as prescribed by Presidential Decree.
(2) In applying paragraph (1), where a corporation applying the international accounting standards has appropriated contingency reserve funds in the tax settlement invoice referred to in Article 60 (2) 2 and has accumulated an amount equivalent to such contingency reserve funds as reserves of contingency reserve funds in disposing of the profits during the relevant business year under the Insurance Business Act and other Acts, it shall be deemed to have appropriated them in deductible expenses up to the amount calculated, as prescribed by Presidential Decree.
(3) The liability reserve funds included in deductible expenses under paragraph (1) shall be included in gross income when the amount of income for the following business year or for the business year, to which the date three years (where grounds prescribed by Presidential Decree, such as a dissolution, occur before three years pass, the date the relevant grounds arise) from the end date of the business year in which the liability reserve funds were included in deductible expenses falls, is calculated, as prescribed by Presidential Decree.
(4) Where the liability reserve funds are included in gross income when calculating the amount of income for the business year, to which the date three years from the end date of the business year in which the date the liability reserve funds were included in deductible expenses falls, as prescribed in paragraph (3), an amount equivalent to interest calculated, as prescribed by Presidential Decree, shall be added to corporate tax to be paid in the relevant business year.
(5) A domestic corporation which intends to apply paragraph (1) shall submit a detailed statement on the relevant reserve funds to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(6) Matters necessary for disposing of the contingency reserve funds included in deductible expenses under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 31 Deleted. <by Act No. 9267, Dec. 26, 2008>
 Article 32 Deleted. <by Act No. 6293, Dec. 29, 2000>
 Article 33 (Inclusion of Retirement Benefit Appropriation Funds in Deductible Expenses)
(1) Where a domestic corporation appropriates funds for retirement benefits as deductible expenses for each business year in order to pay retirement benefits to its executives or employees, such appropriation shall be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year up to the amount calculated, as prescribed by Presidential Decree.
(2) A domestic corporation which has included retirement benefit appropriation funds in deductible expenses under paragraph (1) shall pays retirement benefits to any executive or employee first from the relevant retirement benefit appropriation funds.
(3) Where a domestic corporation which has included retirement benefit appropriation funds in deductible expenses under paragraph (1) is merged or divided, the retirement benefit appropriation funds of the corporation as at the registration date of the merger or division which is transferred to the surviving corporation, corporation established through division, or counterpart corporation to the division and merger (hereinafter referred to as "surviving corporation, etc.") shall be deemed retirement benefit appropriation funds held by the surviving corporation as at the registration date of the merger or division.
(4) Paragraph (3) shall apply mutatis mutandis where a business operator comprehensively transfers his/her business to a domestic corporation.
(5) A domestic corporation which intends to apply paragraph (1) shall submit a detailed statement on retirement benefit appropriation funds to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(6) Matters necessary for disposition of retirement benefit appropriation funds under paragraphs (1) through (4) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 34 (Inclusion of Appropriation for Bad Debts in Deductible Expenses)
(1) Where a domestic corporation appropriates funds for bad debts to cover bad debts from credit sales accounts, loans, and other claims equivalent thereto as deductible expenses for each business year, such appropriation for bad debts shall be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year up to the amount calculated, as prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
(2) Deleted. <by Act No. 9267, Dec. 26, 2008>
(3) Paragraph (1) shall not apply to a claim referred to in the subparagraphs of Article 19-2 (2). <Amended by Act No. 10423, Dec. 30, 2010>
(4) Where a domestic corporation that has appropriated funds for bad debts as deductible expenses under paragraph (1) has any bad debts incurred, such bad debts shall be first offset by its appropriation for bad debts and the balance of the appropriation for bad debts after offsetting such bad debts shall be subsequently included in gross income when calculating the amount of income for the following business year. <Amended by Act No. 10423, Dec. 30, 2010>
(5) Deleted. <by Act No. 9267, Dec. 26, 2008>
(6) Where a domestic corporation which has included appropriation for bad debts in the deductible expenses under paragraph (1) is merged or divided, the appropriation for bad debts of the corporation as at the registration date of the merger or division which is transferred to the surviving corporation, etc. shall be deemed the appropriation for bad debts held by the surviving corporation, etc. as at the registration date of the merger or division. <Amended by Act No. 10423, Dec. 30, 2010>
(7) A domestic corporation that intends to apply paragraph (1) shall submit a detailed statement on appropriation for bad debts to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
(8) Matters necessary for the scope of credit accounts, loans, and other claims equivalent thereto and the disposal of appropriation of bad debts under paragraph (1) and other matters shall be prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
 Article 35 (Inclusion of Appropriation for Redemption of Claims for Indemnity in Deductible Expenses)
(1) Where a corporation prescribed by Presidential Decree among domestic corporations operating a credit guarantee business under Acts appropriates funds for redemption of claims for indemnity as deductible expenses for each business year, such appropriation shall be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year up to the amount calculated, as prescribed by Presidential Decree.
(2) In applying paragraph (1), where a corporation prescribed by Presidential Decree among corporations applying the international accounting standards appropriates funds for redemption of claims for indemnity in the tax settlement invoice referred to in Article 60 (2) 2 and accumulates the amount equivalent to such appropriation as reserves for appropriation for redemption of claims for indemnity in disposing of the profits during the relevant business year, it shall be deemed to have been appropriated in deductible expenses up to the amount calculated, as prescribed by Presidential Decree.
(3) Where bad debts prescribed by Presidential Decree have incurred in relation to the claims for indemnity due to credit guarantee business, a domestic corporation that has included appropriation for redemption claims for indemnity under paragraph (1) in deductible expenses shall first offset the bad debts with the appropriation for redemption of claims for indemnity and the remainder of the appropriation for redemption of claims for indemnity after the offset shall be included in gross income when calculating the amount of income for the following business year.
(4) A domestic corporation which intends to apply paragraph (1) shall submit a detailed statement on the appropriation for redemption of claims for indemnity to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(5) Matters necessary for disposing of the appropriation for redemption of claims for indemnity under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 36 (Inclusion of Value of Business Assets Acquired with National Subsidies, etc. in Deductible Expenses)
(1) Where a domestic corporation receives assets, including subsidies, under the Subsidy Management Act, the Local Finance Act and other Acts prescribed by Presidential Decree (hereafter referred to as "National subsidies, etc." in this Article) and uses them to acquire or improve business assets prescribed by Presidential Decree (hereafter referred to as "business assets" in this Article), by no later than the end date of the business year which includes the date of the receipt of the subsidies, or first acquires or improves business assets and receives the National subsidies, etc. afterwards, an amount equivalent to the value of the National subsidies, etc. used for the acquisition or improvement of the business assets among the value of such business assets may be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year, as prescribed by Presidential Decree. <Amended by Act No. 10898, Jul. 25, 2011>
(2) Where a domestic corporation which has failed to acquire or improve the business assets by the end date of the business year, during which it receives the National subsidies, etc., intends to acquire or improve any business assets within one year from the start date of the following business year, the amount of the National subsidies, etc. to be used for acquisition or improvement may be included in deductible expenses by applying mutatis mutandis paragraph (1). In such cases, where the domestic corporation fails to use National subsidies, etc. by the deadline due to grounds prescribed by Presidential Decree, such as delay of permission or authorization, the end date of the business year during which the relevant grounds cease shall be deemed the deadline.
(3) Where a domestic corporation which has included an amount equivalent to the National subsidies, etc. in the deductible expenses under paragraph (2) fails to use such amount for the acquisition or improvement of business assets by the deadline, or discontinues its business or is dissolved before using it, the amount unused shall be included in gross income for the purpose of calculating the amount of income for the business year during which such grounds arise: Provided, That the same shall not apply where such domestic corporation is merged or divided and the surviving corporation, etc. succeeds to the amount. In such cases, the amount shall be deemed to have been included in deductible expenses by such surviving corporation, etc. under paragraph (2).
(4) In applying paragraph (1), if any domestic corporation receives the National subsidies, etc. in any form of assets, other than money, and uses them for its business, they shall be deemed to have been used for the acquisition or improvement of business assets.
(5) A domestic corporation which intends to apply paragraphs (1) and (2) shall submit a detailed statement on the National subsidies, etc., and on the business assets acquired by the National subsidies, etc. (a plan to use the National subsidies, etc. in cases falling under paragraph (2)) to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(6) For purposes of paragraphs (1) through (3), matters necessary for calculating the amount included in deductible expenses and the amount included in the gross income, the method of calculation, and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 37 (Inclusion of Value of Fixed Assets Acquired with Construction Charges in Deductible Expenses)
(1) Where a domestic corporation engaging in any of the following types of business is provided with fixed assets for facilities required for the business, such as land and other assets provided by consumers of electricity, gas, heat, or other utility or by beneficiaries of such facilities or where such domestic corporation receives money, etc. (hereafter referred to as "construction charges" in this Article) and uses it to acquire fixed assets for the relevant facilities by the end of the business year in which it receives the money or acquires fixed assets and then receives construction charges therefor later, the value of the fixed assets (the amount equivalent to the construction charges used to acquire such fixed assets, where the assets are acquired with construction charges) may be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year, as prescribed by Presidential Decree: <Amended by Act No. 12166, Jan. 1, 2014>
1. Electricity service business as prescribed in the Electric Utility Act;
2. Urban gas business as prescribed in the Urban Gas Business Act;
3. Liquefied petroleum gas-filling business, liquefied petroleum gas collective supply business, and liquefied petroleum gas sales business as prescribed in the Safety Control and Business of Liquefied Petroleum Gas Act;
4. Integrated energy supply business as defined in subparagraph 2 of Article 2 of the Integrated Energy Supply Act;
5. Business similar to those referred to in subparagraphs 1 through 4 and prescribed by Presidential Decree.
(2) Article 36 (2) and (3) shall apply mutatis mutandis to the inclusion of the value of fixed assets acquired with construction charges in the deductible expenses and other matters.
(3) A domestic corporation which intends to apply paragraphs (1) and (2) shall submit a detailed statement on the fixed assets and construction charges received and the fixed assets acquired with construction charges (a plan to use construction charges in cases falling under paragraph (2)) to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(4) For purposes of paragraphs (1) and (2), matters necessary for calculating the amount included in deductible expenses and the amount included in the gross income, the method of calculation, and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 38 (Inclusion of Value of Fixed Assets Acquired with Insurance Marginal Profits in Deductible Expenses)
(1) Where a domestic corporation is paid insurance money due to the destruction or damage of its fixed assets and uses the money to acquire the same type of fixed assets that replace the destroyed fixed assets or to improve the damaged fixed assets (including the improvement of the acquired fixed assets) by the end date of the business year which includes the date of the payment, an amount equivalent to the insurance marginal profits used for the acquisition or improvement of fixed assets, among the value of such fixed assets, may be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year, as prescribed by Presidential Decree.
(2) Article 36 (2) and (3) shall apply mutatis mutandis to the inclusion of the value of fixed assets acquired or improved by insurance marginal profits in deductible expenses. In such cases, "one year" referred to in Article 36 (2) shall be construed as "two years."
(3) A domestic corporation which intends to apply paragraphs (1) and (2) shall submit a detailed statement on the insurance money paid and the fixed assets acquired or improved with the insurance money (a plan to use insurance marginal profits in cases falling under paragraph (2)) to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(4) For purposes of paragraphs (1) and (2), matters necessary for calculating of the amount included in deductible expenses and the amount included in gross income, the methods for calculation and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 39 Deleted. <by Act No. 6558, Dec. 31, 2001>
Subsection 5 Periods during which Gross Income and Deductible Expenses Accrue, Etc.
 Article 40 (Business Year in which Gross Income and Deductible Expenses Accrue)
(1) The business year in which gross income and deductible expenses of a domestic corporation accrue shall be the business year which includes the date the relevant gross income and deductible expenses are settled.
(2) Matters necessary for the scope of the business year in which gross income and deductible expenses accrue under paragraph (1) and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 41 (Acquisition Value of Assets)
(1) The acquisition value of assets acquired by a domestic corporation through purchase, manufacture, exchange, and donation, or by other means shall be any of the following amounts:
1. For assets purchased from another person (excluding financial assets prescribed by Presidential Decree), the amount of the purchase price plus any incidental costs;
2. For assets acquired through the corporation's own manufacture, production, construction, or by other means corresponding thereto, the amount of the product cost plus any incidental costs;
3. For assets, other than those referred to in subparagraphs 1 and 2, the amount prescribed by Presidential Decree as at the time of acquisition.
(2) Matters necessary for calculating the acquisition value of assets, such as the scope of purchase price and incidental costs under paragraph (1), shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 42 (Evaluation of Assets and Liabilities)
(1) Where the book value of assets and liabilities held by a domestic corporation increases or decreases (excluding depreciation; hereafter referred to as "evaluation" in this Article), the book value of such assets and liabilities when calculating the amount of income for the business year which includes the date of evaluation and each subsequent business year shall be the value before evaluation: Provided, That the same shall not apply to any of the following cases:
1. Evaluation of fixed assets under the Insurance Business Act and other Acts (limited to where the book value increases);
2. Evaluation of inventory assets and other assets and liabilities prescribed by Presidential Decree.
(2) Assets and liabilities referred to in paragraph (1) 2 shall be separately evaluated by the method prescribed by Presidential Decree.
(3) The book value of any of the following assets may be reduced by the method prescribed by Presidential Decree, notwithstanding paragraphs (1) and (2):
1. Inventory assets which cannot be sold at the arm's length price due to damage, decomposition, or on other grounds;
2. Fixed assets damaged or destroyed due to grounds prescribed by Presidential Decree, such as a natural disaster or fire;
3. Stocks, etc. prescribed by Presidential Decree where the issuing corporation goes dishonored, receives authorization for its rehabilitation plan under the Debtor Rehabilitation and Bankruptcy Act, or reveals signs of insolvency under the Corporate Restructuring Promotion Act;
4. Stocks, etc. of the issuing corporation which has gone bankrupt.
(4) A domestic corporation which evaluates its assets and liabilities under paragraphs (2) and (3) shall submit a detailed statement on the evaluation of such assets and liabilities to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(5) Matters necessary for disposing of marginal profits and marginal losses arising from the evaluation of assets and liabilities under paragraphs (2) and (3), and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 42-2 (Non-Inclusion in Gross Income of Evaluation Marginal Profits of Inventory Assets of Domestic Corporation that Applies International Accounting Standards)
(1) Where a domestic corporation reports to the head of the tax office having jurisdiction over the place of tax payment the change of the evaluation method of inventory assets from the last-in first-out method prescribed by Presidential Decree to other evaluation methods of inventory assets prescribed by Presidential Decree for the business year in which it first applies the international accounting standards, the amount deducting the amount referred to in subparagraph 2 from the amount referred to in subparagraph 1 (hereafter referred to as "evaluation marginal profits of inventory assets" in this Article) may not be included in the gross income for the purpose of calculating the amount of income for the relevant business year. In such cases, the evaluation marginal profits of inventory assets shall be equally divided and be included in the gross income for five years from the start date of the business year following the business year during which the international accounting standards are first applied:
1. Evaluated value of the inventory assets as at the beginning of the business year in which the international accounting standards are first applied;
2. Evaluated value of the inventory assets as at the end of the immediately preceding business year in which the international accounting standards are first applied.
(2) Where a domestic corporation that fails to include the evaluation marginal profits in the gross income pursuant to the former part of paragraph (1) excluding its subparagraphs is dissolved [excluding a dissolution due to a merger in which transfer gains or losses may be deemed nil under Article 44 (2) and (3) (hereinafter referred to as "qualified merger") or a division in which transfer gains or losses may be deemed nil under Article 46 (2) (hereinafter referred to as "qualified division")], any remainder after being included in the gross income under the latter part of paragraph (1) excluding its subparagraphs shall be included in gross income when calculating the amount of income for the business year in which the registration date of the dissolution falls.
(3) Except as otherwise provided in paragraphs (1) and (2), matters necessary for procedures for reporting the change of the evaluation method for inventory assets, the application for non-inclusion in gross income, the method of inclusion in gross income and the non-inclusion of the evaluation marginal profits of inventory assets in the gross income shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 11128, Dec. 31, 2011]
 Article 43 (Application of Corporate Accounting Standards and Practices)
In calculating the amount of income of a domestic corporation for each business year, where the corporation applies corporate accounting standards which are generally acknowledged as fair and proper, or continuously applies the relevant practices with respect to the business year during which gross income and deductible expenses accrue, and to the acquisition and evaluation of assets and liabilities, such corporate accounting standards or practices shall be followed, except as otherwise expressly provided in this Act and the Restriction of Special Taxation Act.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
Subsection 6 Special Cases concerning Mergers, Divisions, etc.
 Article 44 (Taxation on Merged Corporation upon Merger)
(1) Where a merged corporation is dissolved in the course of a merger, the assets of the merged corporation shall be deemed transferred to a surviving corporation. In such cases, capital gains or losses accruing from the transfer (referring to the amount calculated by deducting the value referred to in subparagraph 2 from the value referred to in subparagraph 1; hereafter the same shall apply in this Article and Article 44-3) shall be included in the gross income or deductible expenses when the merged corporation calculates the amount of income for the business year in which the registration date of the merger falls:
1. Transfer value that the merged corporation has received from the surviving corporation;
2. Value calculated by deducting the total book value of liabilities from the total book value of assets (hereafter referred to as "net book value of assets" in this Subsection) as of the registration date of the merger of the merged corporation.
(2) In applying paragraph (1), for a merger that meets all of the following requirements, capital gains or losses on a transfer may be deemed nil, considering the value referred to in paragraph (1) 1 as the net book value of assets as of the registration date of the merger of the merged corporation: Provided, That capital gains or losses on a transfer may be deemed nil, as prescribed by Presidential Decree, although the requirements prescribed in subparagraph 2, 3 or 4 are not met, in inevitable circumstances prescribed by Presidential Decree: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 15222, Dec. 19, 2017>
1. A merger should be conducted between domestic corporations which have continued to operate their business for at least one year as on the registration date of the merger: Provided, That excluded herefrom shall be a corporation prescribed by Presidential Decree, the sole purpose of which is to merge with other corporations;
2. Where the value of the stocks, etc., of a surviving corporation or the parent corporation of the surviving corporation is at least 80/100 of the total costs of the merger received by the stockholders, etc., of a merged corporation in return for such merger; the stocks, etc., shall be distributed, as prescribed by Presidential Decree; and the stockholders, etc., of the merged corporation prescribed by Presidential Decree hold such stocks, etc., until the last day of the business year in which the registration date of the merger falls;
3. Where the surviving corporation continues to operate the business succeeded to from the merged corporation until the last day of the business year in which the registration date of the merger falls;
4. Where the ratio of employees transferred to the surviving corporation to the employees specified by Presidential Decree, among employees of the merged corporation as at one month before the date of registration of the merger, is at least 80/100 and the ratio remains unchanged until the end of the business year in which the merger is registered.
(3) Notwithstanding paragraph (2), capital gains or losses on a transfer may be deemed nil in either of the following cases: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016>
1. Where a domestic corporation merges with or is merged into another corporation which holds the total number of outstanding stocks or the total amount of investment;
2. Where corporations whose total number of outstanding stocks or total amount of investment is held by the same domestic corporation are merged with each other.
(4) Matters necessary for calculating the transfer value, the net book value of assets, and the total costs of a merger; and criteria for determining the continuance or discontinuance of the business succeeded under paragraphs 1 through 3 shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 44-2 (Taxation on Surviving Corporation upon Unqualified Merger)
(1) Where a surviving corporation succeeds to the assets of a merged corporation due to a merger, it shall be deemed to have succeeded to the assets from the merged corporation at a market price as at the registration date of the merger (referring to the market price provided in Article 52 (2); hereafter the same shall apply in this Subsection). In such cases, a surviving corporation may only succeed to the amount included in or excluded from the gross income or deductible expenses when calculating the amount of income and the tax base for each business year of the merged corporation, and other assets, liabilities, etc., prescribed by Presidential Decree.
(2) Where a surviving corporation is deemed to have succeeded to the assets of a merged corporation at a market price under paragraph (1) and the transfer value paid by the surviving corporation to the merged corporation is less than the amount calculated by deducting the total liabilities from the total assets as at the registration date of the merger of the merged corporation (hereafter referred to as "net market price of assets" in this Subsection), the surviving corporation shall appropriate such difference in the tax settlement invoice referred to in Article 60 (2) 2 and include it in gross income in equal installments for five years from the registration date of the merger.
(3) Where a surviving corporation is deemed to have succeeded to the assets of a merged corporation at a market price under paragraph (1) and the transfer value paid by the surviving corporation to the merged corporation exceeds the net market price of assets as at the registration date of the merger in circumstances prescribed by Presidential Decree, the surviving corporation shall appropriate the difference in the tax settlement invoice referred to in Article 60 (2) 2 and include it in deductible expenses in equal installments for five years from the registration date of the merger.
(4) Matters necessary for calculating the amounts included in gross income and deductible expenses, and the method of inclusion as referred to in paragraphs (1) through (3) and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 44-3 (Special Provisions concerning Taxation on Surviving Corporation upon Qualified Merger)
(1) Where transfer gains or losses are deemed nil under Article 44 (2) or (3), a surviving corporation shall be deemed to have succeeded to the assets of a merged corporation at the book value, notwithstanding Article 44-2. In such cases, the surviving corporation shall appropriate the difference between the book value and the market price referred to in Article 44-2 (1) per asset, as prescribed by Presidential Decree.
(2) Where a surviving corporation succeeds to the assets of a merged corporation at the book value, as prescribed in paragraph (1), it shall succeed to the losses referred to in subparagraph 1 of Article 13 as at the registration date of the merger of the merged corporation and the amount included in or excluded from the gross income or deductible expenses when the merged corporation calculates the amount of income and the tax base for each business year, other assets, liabilities, reductions, tax credits, etc. referred to in Article 59, as prescribed by Presidential Decree.
(3) Where any of the following occurs during the period prescribed by Presidential Decree not exceeding three years, a surviving corporation that succeeds to the assets of a merged corporation at the book value under paragraph (1) shall include, as prescribed by Presidential Decree, in gross income the difference between the book value of the succeeded assets and the market price referred to in Article 44-2 (1) (limited to only where the market price exceeds the book value; hereafter the same shall apply in paragraph (4)), the amount deducted from the succeeded losses when calculating the amount of income for the business year which includes the date the grounds arise, etc. and shall not apply reductions or tax credits starting from the relevant business year after paying the amount of reductions, tax credits, etc. deducted upon succession from the merged corporation under paragraph (2) in addition to the corporate tax for the relevant business year, as prescribed by Presidential Decree: Provided, That the same shall not apply where inevitable circumstances prescribed by Presidential Decree exist: <Amended by Act No. 15222, Dec. 19, 2017>
1. Where a surviving corporation discontinues the business succeeded to from a merged corporation;
2. Where stockholders, etc. of a merged corporation prescribed by Presidential Decree dispose of the stocks, etc. received from a surviving corporation;
3. Where the number of the employees specified by Presidential Decree (hereafter referred to as "employees" in this subparagraph) as employees of the surviving corporation as at the end of each business falls below 80/100 of the sum of employees of the merged corporation and the surviving corporation as at one month before the date of registration of the merger.
(4) Where a surviving corporation includes in gross income the difference between the book value of the succeeded assets and the market price referred to in Article 44-2 (1), etc. pursuant to paragraph (3), it shall include, as prescribed by Presidential Decree, in gross income or deductible expenses the difference between the transfer value paid by the surviving corporation to the merged corporation and the net market price of assets as at the registration date of the merger of the merged corporation until the date five years pass after the registration date of the merger from the date any of the grounds referred to in paragraph (3) arises.
(5) Where transfer gains or losses are deemed nil under Article 44 (3), a surviving corporation shall be deemed to have succeeded to the assets of a merged corporation at the book value, and paragraphs (1) and (2) shall apply accordingly, although the surviving corporation fails to meet the requirements referred to in each subparagraph of Article 44 (2). In such cases, paragraphs (3) and (4) shall not apply.
(6) A surviving corporation to which paragraph (1) applies shall file a detailed statement on the succeeded assets in the course of merger to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(7) Matters necessary for criteria for determining the continuance or discontinuance of the succeeded business, for calculating the amounts included in gross income and deductible expenses, the method for inclusion referred to in paragraphs (1) through (5), and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 45 (Restriction on Deduction of Losses Carried Forward, etc., upon Merger)
(1) Losses referred to in subparagraph 1 of Article 13 as on the registration date of the merger of a surviving corporation shall not be deducted to the extent of income (referring to an amount calculated by proportionally dividing the amount of income by the rate of value of asset prescribed by Presidential Decree where no separate accounting has been kept as the corporation fell under the proviso to Article 113 (3); hereafter in this Article the same shall apply) accruing from the business that has been succeeded to from the merged corporation when calculating the tax base for each business year of the surviving corporation.
(2) Losses of a merged corporation succeeded to by a surviving corporation under Article 44-3 (2) shall be deducted to the extent of income accruing from the business succeeded to from the merged corporation when calculating the tax base for each business year of the surviving corporation.
(3) A surviving corporation that qualifiedly merges shall include, in deductible expenses, losses on disposition of the assets (limited to the difference only where the market value of the relevant assets under Article 52 (2) as of the registration date of the merger is lower than book value and to the losses incurred during the business years ending within five years after the registration date of the merger) held by the surviving corporation and the merged corporation prior to the merger to the extent of income (referring to the amount of income before the relevant losses on disposition are deducted) accruing from business of the relevant corporation prior to the merger in calculating the amount of income of the relevant business year. In such cases, paragraphs (1) and (2) shall apply accordingly, deeming that losses on disposition excluded from deductible expenses were incurred from the business of the relevant corporation prior to the merger at the time of disposition of the assets. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016>
(4) Reductions or tax credits of a merged corporation that a surviving corporation has succeeded to under Article 44-3 (2) shall apply to the extent of income accruing from the business that has been succeeded to from the merged corporation or the amount of corporate tax equivalent thereto, as prescribed by Presidential Decree.
(5) Matters necessary for the calculation of losses to be deducted when calculating the tax base for each business year, the inclusion of losses on disposition of the succeeded assets in deductible expenses, the calculation of the amount of corporate tax on income accruing from the business that has been succeeded to under paragraphs (1) through (4), and other matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 46 (Taxation on Divided Corporations, etc., upon Division)
(1) Where a domestic corporation is dissolved in the course of a division (excluding a spin-off: the same shall apply hereafter in this Article and Articles 46-2 through 46-4), the assets of the domestic corporation shall be deemed transferred to a corporation established through division or a counterpart corporation to a division and merger (hereinafter referred to as "corporation established through division, etc."). In such cases, capital gains or losses on a transfer (referring to the amount calculated by subtracting the value referred to in subparagraph 2 from the value referred to in subparagraph 1; the same shall apply hereafter in this Article and Article 46-3) shall be included in the gross income or deductible expenses when a divided corporation or a disappearing counterpart corporation to the merger and division (hereinafter referred to as "divided corporation, etc.") calculates the amount of income for the business year in which the registration date of the division falls: <Amended by Act No. 11128, Dec. 31, 2011>
1. Transfer value received by the divided corporation, etc., from a corporation established through division, etc.;
2. Net book value of assets as on the registration date of the division of a divided corporation, etc.
(2) In applying paragraph (1), with respect to a division which meets the following requirements, capital gains or losses on a transfer may be deemed nil, deeming the value referred to in paragraph (1) 1 to be the net book value of assets as of the registration date of the division of a divided corporation, etc.: Provided, That capital gains or losses on a transfer may be deemed nil, as prescribed by Presidential Decree, although the requirements prescribed in subparagraph 2, 3 or 4 are not met, in inevitable circumstances prescribed by Presidential Decree: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016; Act No. 15222, Dec. 19, 2017>
1. Where a domestic corporation which has continuously operated business for at least five years as on the registration date of the division is divided upon meeting the following requirements (in cases of a division and merger, a disappearing counterpart corporation to a division and merger or a counterpart corporation to a division and merger shall be a domestic corporation which has continuously operated business for at least one year as on the registration date of the division):
(a) That it divides an independent business division which can be operated after division;
(b) That the assets and liabilities of a divided business division shall be comprehensively succeeded: Provided, That those prescribed by Presidential Decree, such as assets and liabilities that are indivisible, including the assets jointly used and the liabilities, the debtor of which cannot be changed, shall be excluded;
(c) That it shall be divided upon investment only by a divided corporation, etc.;
2. Where the total costs of a division received from a corporation established through division, etc., by the stockholders of a divided corporation, etc. (in cases of a division and merger, referring to where at least 80/100 of the costs of the division is in stocks of the corporation established through division, etc. or where at least 80/100 of the costs of the division is in stocks of the domestic corporation that holds the total number of outstanding stocks or the total amount of investment of the counterpart corporation to the division and merger) are in stocks, and such stocks are allocated in proportion to the stocks held by each stockholder of the divided corporation, etc. (in cases of a division and merger, referring to the stocks allocated, as prescribed by Presidential Decree) and the stockholders of the divided corporation, etc., prescribed by Presidential Decree hold such stocks until the last day of the business year in which the division is registered;
3. Where a corporation established through division, etc., continues to operate the business succeeded to from the divided corporation, etc., until the last day of the business year in which the registration date of the division falls;
4. Where the ratio of the employees transferred to the corporation established through division, etc. to the employees specified by Presidential Decree as employees of the divided business division as at one month before the date of registration of the division is at least 80/100 and the ratio remains unchanged until the last day of the business year in which the division is registered.
(3) Matters necessary for the calculation of the transfer value and the net book value of assets, the criteria for determining whether a business division is independent and able to operate its business separately, the calculation of the cost of a division, and the criteria for determining whether the business acquired by succession continues under paragraphs (1) or (2), and other matters, shall be prescribed by Presidential Decree. <Amended by Act No. 12166, Jan. 1, 2014>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 46-2 (Taxation on Corporations Established through Division, etc. upon Unqualified Division)
(1) Where a corporation established through division, etc. has succeeded to the assets from a divided corporation, etc. due to the division, it shall be deemed succeeded to the assets of the divided corporation, etc. at the market price as at the registration date of the division. In such cases, the corporation established through division, etc. may succeed to only the amount included in or excluded from gross income or deductible expenses when it calculates the amount of income and the tax base for each business year of the divided corporation, etc. and other assets, liabilities, etc. prescribed by Presidential Decree.
(2) Where a corporation established through division, etc. is deemed to succeed to the assets of a divided corporation, etc. at the market price pursuant to paragraph (1) and the transfer value paid by the corporation established through division, etc. to the divided corporation, etc. is less than the net market price of assets as at the registration date of the division of the divided corporation, etc., the corporation established through division, etc. shall appropriate such difference in the tax settlement invoice referred to in Article 60 (2) 2 and include it in gross income in equal installments for five years from the registration date of the division.
(3) Where a corporation established through division, etc. is deemed to succeed to the assets of a divided corporation, etc. at the market price pursuant to paragraph (1) and the transfer value paid by the corporation established through division, etc. to the divided corporation, etc. exceeds the net market price of assets as at the registration date of the division in circumstances prescribed by Presidential Decree, the corporation, etc. established through division shall appropriate such difference in the tax settlement invoice referred to in Article 60 (2) 2 and include it in deductible expenses in equal installments for five years from the registration date of the division.
(4) Matters necessary for calculating the amounts included in gross income or deductible expenses and the method of calculation under paragraphs (1) through (3) and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 46-3 (Special Provisions concerning Taxation on Corporation Established through Division, etc. upon Qualified Division)
(1) Where transfer gains or losses is deemed nil under Article 46 (2), a corporation established through division, etc. shall be deemed to have succeeded to the assets of a divided corporation, etc. at the book value, notwithstanding Article 46-2. In such cases, the corporation, etc. established through division shall appropriate the difference between the book value and the market price referred to in Article 46-2 (1) per asset, as prescribed by Presidential Decree.
(2) Where a corporation established through division, etc. has succeeded to the assets of a divided corporation, etc. at the book value pursuant to paragraph (1), it shall succeed to the losses referred to in subparagraph 1 of Article 13 as on the registration date of the division of the divided corporation, etc. and the amount included in or excluded from gross income or deductible expenses when the divided corporation, etc. calculates the amount of income and the tax base for each business year, other assets, liabilities, reductions, tax credits, etc. under Article 59, as prescribed by Presidential Decree.
(3) Where any of the following occurs during the period prescribed by Presidential Decree not exceeding three years, a corporation established through division, etc. that succeeds to the assets of a divided corporation, etc. at the book value under paragraph (1) shall include, as prescribed by Presidential Decree, in the gross income the difference between the book value of the succeeded assets and the market price referred to in Article 46-2 (1) (limited to where the market price exceeds the book value; hereafter the same shall apply in paragraph (4)) and the amount deducted from the succeeded losses when calculating the amount of income for the business year which includes the date the relevant grounds arise, and shall not apply reductions or tax credits starting from the relevant business year after paying the amount of reductions, tax credits, etc. deducted by succession from the divided corporation, etc. under paragraph (2) in addition to the corporate tax for the relevant business year, as prescribed by Presidential Decree: Provided, That the same shall not apply where inevitable circumstances prescribed by Presidential Decree exist: <Amended by Act No. 15222, Dec. 19, 2017>
1. Where a corporation established through division, etc. discontinues the business succeeded to from a divided corporation, etc.;
2. Where stockholders, etc. of a divided corporation, etc. prescribed by Presidential Decree dispose of the stocks, etc. received from a corporation established through division, etc.;
3. Where the number of the employees specified by Presidential Decree (hereafter referred to as "employees" in this subparagraph) as employees of the corporation established through division as on the last day of each business falls below 80/100 of the number of employees of the divided business division as at one month before the date of registration of the merger: Provided, That in cases of a division and merger, it means either of the following cases:
(a) Where the number of employees of the counterpart corporation to the division and merger as at the end of each business year falls below 80/100 of the sum of employees of the divided business division and the counterpart corporation to the division and merger as at one month before the date of registration of the division;
(b) Where the number of employees of the corporation established through division as at the end of each business year falls below 80/100 of the sum of employees of the divided business division and the disappearing counterpart corporation to the division and merger as at one month before the date of registration of the division.
(4) Where a corporation established through division, etc. includes in gross income the difference between the book value of the succeeded assets under paragraph (3) and the market price referred to in Article 46-2 (1), etc., it shall include, as prescribed in Presidential Decree, in gross income or deductible expenses, the difference between the transfer value paid by the corporation established through division, etc. to the divided corporation, etc. and the net market price of assets as on the registration date of the division of the divided corporation, etc. until the date five years pass after the registration date of the division from the date any of the grounds referred to in paragraph (3) arises.
(5) A corporation established through division, etc. to which paragraph (1) applies shall file a detailed statement on the succeeded assets due to division to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(6) Matters necessary for criteria for determining the continuance or discontinuance of the succeeded businesses, calculation of the amounts included in gross income or deductible expenses, the method of the calculation under paragraphs (1) through (4), and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 46-4 (Restriction on Deduction of Losses Carried Forward, etc., upon Division)
(1) Losses referred to in subparagraph 1 of Article 13 as on the registration date of the division of a counterpart corporation in a division and merger, shall not be deducted to the extent of income (referring to an amount calculated by proportionally dividing the amount of income by the rate of value of asset prescribed by Presidential Decree where no separate accounting has not been kept as the corporation fell under the proviso to Article 113 (4); the same shall apply hereafter in this Article) accruing from the business that has been succeeded to from a divided corporation when calculating the tax base for each business year of the counterpart corporation in the division and merger.
(2) Losses of a divided corporation, etc., succeeded to by a corporation established through division, etc., under Article 46-3 (2), shall be deducted to the extent of income accruing from the business succeeded to from a divided corporation, etc., when calculating the tax base of the corporation established through division, etc., for each business year.
(3) A corporation established through division, etc., that merges and divides with no capital gain on the transfer deemed under Article 46 (2) (hereinafter referred to as "qualified merger and division") shall include, in deductible expenses, losses on disposition of the assets (limited to the difference only where the market value of the relevant assets under Article 52 (2) as on the registration date of the merger is lower than book value and to the losses incurred during the business years ending within five years after the registration date of the merger) held by the divided corporation and the counterpart corporation to a merger and division prior to the merger and division to the extent of income (referring to the amount of income before the relevant losses on disposition are deducted) accruing from the business of the relevant corporation prior to the division and merger in calculating the amount of income of the relevant business year. In such cases, paragraphs (1) and (2) shall apply accordingly, deeming that losses on disposition excluded in deductible expenses were incurred from the business of the relevant corporation prior to the division and merger. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016>
(4) Reductions or tax credits of the divided corporation, etc., that a corporation established through division, etc., has succeeded to under Article 46-3 (2) shall apply to the extent of income accruing from the business that has been succeeded to from the divided corporation, etc., or the amount of corporate tax equivalent to such income, as prescribed by Presidential Decree.
(5) Matters necessary for the calculation of losses to be deducted when calculating the tax base for each fiscal year, the inclusion of the losses on disposition of the succeeded assets in deductible expenses, the calculation of the amount of corporate tax constituting the amount of income accruing from the business that has been succeeded under paragraphs (1) through (4), and other matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 46-5 (Special Provisions concerning Taxation on Divided Corporations Surviving Division)
(1) Where a domestic corporation survives a division (excluding a spin-off), gains or losses accruing from the transfer of the assets of the divided business category to a corporation established through division, etc. (referring to the amount calculated by deducting the value under subparagraph 2 from the value under subparagraph 1; hereafter the same shall apply in this Article) shall be included in gross income or deductible expenses when the divided corporation calculates the amount of income for the business year which includes the registration date of the division:
1. Transfer value received by a divided corporation from a corporation established through division, etc.;
2. Net book value of assets as at the registration date of the division of the business category divided by a divided corporation.
(2) Article 46 (2) and (3) shall apply mutatis mutandis to the calculation of transfer gains or losses under paragraph (1).
(3) Articles 46-2, 46-3 and 46-4 shall apply mutatis mutandis to the taxation on a corporation established through division, etc.: Provided, That the losses of a divided corporation shall not be succeeded.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 47 (Special Provisions concerning Taxation on Divided Corporation upon Spin-off)
(1) Where a divided corporation acquires stocks, etc., of a corporation established through division through a spin-off and meets the requirements provided for in the subparagraphs of Article 46 (2) (in cases falling under subparagraph 2 of the same paragraph, the full amount must be in stocks, etc.), an amount equivalent to capital gains on the transfer of assets generated by the spin-off among the value of such stocks, etc., may be included in deductible expenses when calculating the amount of income for the business year which includes the registration date of the spin-off, as prescribed by Presidential Decree: Provided, That an amount equivalent to capital gains on the transfer of assets may be included in deductible expenses, as prescribed by Presidential Decree, although the requirements prescribed in Article 46 (2) 2, 3 or 4 are not met, in extenuating circumstances prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 15222, Dec. 19, 2017>
(2) An amount equivalent to capital gains on a transfer that a divided corporation has included in deductible expenses under paragraph (1), shall be included in the gross income as much as the amount prescribed by Presidential Decree in consideration of the ratio of disposition of the relevant stocks, etc., and assets in the business year in which any of the following grounds arises: Provided, That the foregoing shall not apply where a corporation established through division becomes subject to a qualified merger or qualified division or where such corporation is in other extenuating circumstances prescribed by Presidential Decree: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. Where a divided corporation disposes of the stocks, etc., received from the corporation established through division;
2. Where the corporation established through division disposes of the assets prescribed by Presidential Decree and succeeded to from a divided corporation. In such cases, the corporation established through division shall inform the divided corporation of the disposition of such assets within one month from the date of the disposition.
(3) If either of the following events occurs during the period prescribed by Presidential Decree, which shall not exceed three years from the registration date of a division, the divided corporation that has included an amount equivalent to capital gains on a transfer in deductible expenses under paragraph (1) shall include, in gross income, any remainder after including an amount in gross income under paragraph (2), among the amount included in deductible losses under paragraph (1), when calculating the amount of income for the business year in which the relevant event occurs: Provided, That the same shall not apply in extenuating circumstances prescribed by Presidential Decree: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 12166, Jan. 1, 2014; Act No. 14386, Dec. 20, 2016; Act No. 15222, Dec. 19, 2017>
1. Where a corporation established through division discontinues the business succeeded to from the divided corporation;
2. Where the divided corporation holds less than 50/100 of the total number of outstanding stocks or the total investment amount of a corporation established through division;
3. Where the number of the employees specified by Presidential Decree (hereafter referred to as "employees" in this subparagraph) as employees of the corporation established through division as at the end of each business falls below 80/100 of the sum of employees of the divided business division as at one month before the date of registration of the merger.
(4) Where a divided corporation includes an amount equivalent to capital gains on a transfer in deductible expenses under paragraph (1), the corporation established through division shall succeed to any amount included in or excluded from gross income or deductible expenses by the divided corporation in calculating the amount of income and the tax base for each business year, other assets and liabilities and tax exemptions, tax reductions and tax credits under Article 59, etc., as prescribed by Presidential Decree. <Newly Inserted by Act No. 11128, Dec. 31, 2011; Act No. 15222, Dec. 19, 2017>
(5) Tax exemptions, tax reductions and tax credits to which a corporation established through division succeeds from the divided corporation shall apply within the amount of income accruing from the business transferred from the divided corporation or within the amount of corporate tax on such income, as prescribed by Presidential Decree. <Newly Inserted by Act No. 15222, Dec. 19, 2017>
(6) A divided corporation that intends to apply paragraph (1) shall submit a statement on capital gains on a transfer of assets generated by the division to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(7) Matters necessary for calculating capital gains on a transfer, criteria for determining the continuation or discontinuation of the succeeded business, calculation of the amounts included in gross income or deductible expenses, the method of inclusion under paragraphs (1) and (5), and other matters, shall be prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 15222, Dec. 19, 2017>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 47-2 (Special Provisions concerning Taxation upon Investment in Kind)
(1) Where a domestic corporation (referred to as "investing corporation" hereafter in this Article) invests in kind, satisfying the following requirements, an amount equivalent to capital gains on the transfer of asset accruing from the investment in kind among the value of stocks of the domestic corporation acquired through investment in kind (referred to as "invested corporation" hereafter in this Article) may be included in deductible expenses for the purpose of calculating the amount of income for the business year in which the date of investment in kind falls, as prescribed by Presidential Decree: Provided, That the domestic corporation may include an amount equivalent to capital gains on the transfer of asset in deductible expenses, as prescribed by Presidential Decree, in extenuating circumstances prescribed by Presidential Decree, although it fails to satisfy the requirements prescribed in subparagraph 2 or 4: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 13555, Dec. 15, 2015; Act No. 15222, Dec. 19, 2017>
1. The investing corporation that has operated business for at least five consecutive years as on the date of investment in kind;
2. The invested corporation shall continuously operate the business that the investing corporation operated with assets invested in kind, until the end of the business year in which such investment in kind is made;
3. If a person makes a joint investment with another Korean or foreigner, the person shall not be a related party provided for in Article 52 (1) to the investing corporation;
4. The investing corporation and a person who makes a joint investment with the investing corporation as prescribed in subparagraph 3 (referred to as "investing corporation, etc." hereafter in this Article) holds at least 80/100 of the total number of issued stocks or the total investment amount of the invested corporation as on the date following the date of investment in kind and hold such stocks, etc., until the end of the business year in which the date of investment in kind falls;
5. Deleted. <by Act No. 15222, Dec. 19, 2017>
(2) An amount equivalent to capital gains on a transfer that an investing corporation has included in deductible expenses pursuant to paragraph (1) shall be included in gross income as much as the amount prescribed by Presidential Decree, in consideration of the ratio of disposition of the relevant stocks, etc., and assets for the business year in which any of the following events occurs: Provided, That the foregoing shall not apply where an invested corporation becomes subject to a qualified merger or qualified division, or where such corporation is in other extenuating circumstances prescribed by Presidential Decree: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. Where an investing corporation disposes of stocks, etc., received from an invested corporation;
2. Where an invested corporation disposes of assets prescribed by Presidential Decree and succeeded to from an investing corporation, etc. In such cases, the invested corporation shall inform the investing corporation of the disposition of such assets within one month from the date of the disposition.
(3) Where either of the following events occurs, the investing corporation that has included an amount equivalent to capital gains on a transfer in deductible expenses pursuant to paragraph (1) shall include any remainder after including an amount in gross income pursuant to paragraph (2), among the amount included in deductible expenses pursuant to paragraph (1), in gross income within the period prescribed by Presidential Decree, which shall not exceed three years, when calculating the amount of income for the business year in which the relevant event occurs: Provided, That the same shall not apply in extenuating circumstances prescribed by Presidential Decree: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016; Act No. 15222, Dec. 19, 2017>
1. Where an invested corporation discontinues the business that the investing corporation has operated with assets invested in kind;
2. Where an investing corporation, etc., holds less than 50/100 of the total number of outstanding stocks or the total investment amount of an invested corporation.
(4) The calculation of capital gains on a transfer to be included in deductible expenses, the criteria for determining the continuation or discontinuation of the business that an investing corporation has operated with assets invested in kind, the method for calculating the amount to be included in gross income and the method for including such amount and the submission of statements of investment in kind under paragraphs (1) through (3), and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 13555, Dec. 15, 2015; Act No. 15222, Dec. 19, 2017>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Articles 48 and 49 Deleted. <by Act No. 9898, Dec. 31, 2009>
 Article 50 (Inclusion of Amount Equivalent to Transfer Marginal Profits of Assets due to Exchange in Deductible Expenses)
(1) Where a domestic corporation which engages in business prescribed by Presidential Decree exchanges assets prescribed by Presidential Decree which are fixed assets (hereafter referred to as "fixed assets for business use" in this Article) used directly for such business for at least two years for the same type of fixed assets for business use (hereafter referred to as "assets acquired by exchange" in this Article) directly used for the relevant business for at least two years by another domestic corporation, other than a related party provided in Article 52 (1) (including an exchange among several corporations prescribed by Presidential Decree), an amount equivalent to transfer marginal profits of the fixed business assets accrued by the exchange from the value of assets acquired by the exchange may be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year, as prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
(2) Paragraph (1) shall only apply where a domestic corporation uses assets acquired by exchange for its business until the end date of the business year in which the date of the exchange falls.
(3) A domestic corporation which intends to apply paragraph (1) shall submit a detailed statement on the exchange of assets to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(4) In applying paragraph (1), matters necessary for the amount included in deductible expenses and the method of inclusion of such amount in gross income shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
Subsection 7 Tax Exemptions and Income Deductions
 Article 51 (Non-Taxable Income)
No corporate tax shall be imposed on income accruing from any trust property of a public trust under the Public Trust Act among the income of a domestic corporation for each business year. <Amended by Act No. 12420, Mar. 18, 2014>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 51-2 (Income Deductions for Special Purpose Companies, etc.)
(1) Any of the following domestic corporations that distributes at least 90/100 of distributable profits prescribed by Presidential Decree, shall deduct the amount equivalent to such distribution shall from the amount of income for the relevant business year: <Amended by Act No. 12166, Jan. 1, 2014; Act No. 13448, Jul. 24, 2015; Act No. 13499, Aug. 28, 2015>
1. A special purpose company as defined in the Asset-Backed Securitization Act;
2. An investment company, special purpose company, investment limited liability company, investment association (excluding a private equity fund participating in management, as defined in Article 9 (19) 1 of the Financial Investment Services and Capital Markets Act), or investment limited liability company established under the aforesaid Act;
3. A corporate restructuring investment company established under the Corporate Restructuring Investment Companies Act;
4. A real estate investment company for corporate restructuring or real estate investment company for entrusted management, established under the Real Estate Investment Company Act;
5. A ship investment company established under the Ship Investment Company Act;
6. A special purpose corporation, etc., prescribed by Presidential Decree and established under the Special Act on Private Rental Housing or the Special Act on Public Housing;
7. A company specializing in cultural industries established under the Framework Act on the Promotion of Cultural Industries;
8. An overseas resources development company established under the Overseas Resources Development Business Act;
9. An investment company similar to those referred to in subparagraphs 1 through 8, which meets the following requirements:
(a) Its assets shall be used for investment in facilities and infrastructure, the development of resources, or a specific business requiring substantial time and money, and its profits shall be distributed to its stockholders;
(b) It shall establish no business office, other than the headquarters, and hire no staff member and full-time executive;
(c) It shall exist for a limited period of at least two years;
(d) It shall be a stock company as defined in the Commercial Act or any other Act, which is established in the form of incorporation by promoters;
(e) Its promoters shall not fall under any subparagraph of Article 4 (2) of the Corporate Restructuring Investment Companies Act and shall meet the requirements prescribed by Presidential Decree;
(f) Its directors shall not fall under any subparagraph of Article 12 of the Corporate Restructuring Investment Companies Act;
(g) Its auditor shall comply with the provisions of Article 17 of the Corporate Restructuring Investment Companies Act. In such cases, "a corporate restructuring investment company" shall be construed as "a company";
(h) It shall satisfy the requirements prescribed by Presidential Decree concerning the scale of the capital, reporting on the entrustment of the asset management business and fund management business, reporting on its establishment, and other matters.
(2) Paragraph (1) shall not apply to any of the following circumstances:
1. Where no income tax or corporate tax is imposed on dividends paid to stockholders, etc., under this Act and the Restriction of Special Taxation Act: Provided, That the same shall not apply where stockholders, etc., who receive the dividends are partnership firms subject to special taxation for partnership firms pursuant to Article 100-15 (1) of the Restriction of Special Taxation Act and income tax or corporate tax is imposed on dividends paid to such partnership firms pursuant to Article 100-18 (1) of the same Act;
2. Where any domestic corporation that pays dividends is a corporation meeting the standards prescribed by Presidential Decree, giving due consideration to the number of its stockholders, etc.
(3) Each person who intends to seek the benefit of paragraph (1), shall file an application for income deductions, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
Subsection 8 Special Cases concerning Calculation of Amounts of Income
 Article 52 (Repudiation of Wrongful Calculation)
(1) Where the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office deems that the tax burden of a domestic corporation has been unjustly reduced through the wrongful calculation of the amount of income of the domestic corporation in transactions with a related party prescribed by Presidential Decree (hereinafter referred to as "related party"), he/she may calculate the amount of income for each business year of the domestic corporation regardless of the wrongful calculation of the amount of income of such domestic corporation (hereinafter referred to as "wrongful calculation"). <Amended by Act No. 11128, Dec. 31, 2011>
(2) In applying paragraph (1), the standards for determination shall be sound social norms, generally-accepted trade practices, and the prices applied or acknowledged to be applied to arm's length transactions between persons, other than related parties (including premium rates, interest rates, rents, exchange rates, and other corresponding rates; hereafter referred to as "market price" in this Article). <Amended by Act No. 11128, Dec. 31, 2011>
(3) A domestic corporation shall submit a detailed statement on the particulars of transactions with each related party for each business year to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
(4) In applying paragraphs (1) through (3), matters necessary for the types of wrongful calculation, the assessment of market prices, and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 53 (Special Cases concerning Calculation of Amount of Income from Transactions with Foreign Corporations, etc.)
(1) Where the competent authorities of the Republic of Korea and the other country agree on the amount of transactions between a domestic corporation and its overseas branch, a non-resident, or any other foreign corporation, in accordance with the relevant mutual agreement under the tax treaties concluded between the Republic of Korea and the other contracting party to prevent double taxation (hereinafter referred to as "tax treaty"), the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office may adjust the corporation's amount of income for each business year according to such mutual agreement.
(2) In applying paragraph (1), matters necessary for filing an application for adjustment of the amount of income of a domestic corporation, the procedures therefor, and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 53-2 (Special Cases concerning Calculation of Tax Bases for Corporations Adopting Functional Currencies)
(1) The tax base for a domestic corporation that prepares the financial statements by adopting a currency, other than Korean Won, as a functional currency according to the corporate accounting standards shall be calculated in the method reported to the head of the tax office having jurisdiction over the place of tax payment, among the following methods (hereafter referred to as "calculation method of tax bases" in this Article): Provided, That the tax base of income for the business year before the calculation method of tax bases prescribed in subparagraph 2 or 3 is first reported and applied shall be calculated upon applying the calculation method of tax bases prescribed in subparagraph 1, and consolidated corporations that belong to the same consolidated group shall report and apply the same calculation method of tax bases:
1. Method of calculating tax bases based on the financial statements to be otherwise prepared, when no currency, other than Korean Won, is adopted as a functional currency;
2. Method of calculating tax bases based on the financial statements denominated in a functional currency and subsequently converting it into Korean Won;
3. Method of calculating tax bases based on the financial statements converted into Korean Won by applying the exchange rates as at the end date of the business year in the case of the items on the statement of financial position, and the exchange rates as at the relevant trading day (referring to the average exchange rate for the relevant business year in the case of the items prescribed by Presidential Decree) in the case of the items on the consolidated income statement (referring to a profit and loss statement if no consolidated income statement is available; hereinafter the same shall apply).
(2) A corporation that has reported and applies the calculation method of tax bases prescribed in paragraph (1) 2 or 3 may not change the calculation method of tax bases unless there arise circumstances prescribed by Presidential Decree, such as change of the reported functional currency and a merger between corporations using a different calculation method of tax bases.
(3) Where a corporation that applies the calculation method of tax bases prescribed in paragraph (1) 2 or 3 changes its functional currency, it shall include, in gross income, the amount calculated by subtracting the amount under subparagraph 2 from the amount under subparagraph 1 per asset or liability when calculating the amount of income for the business year during which it changes its functional currency and includes an amount equivalent thereto in deductible expenses by appropriating it as lump-sum depreciation reserve funds or compressed accounts reserve funds, as prescribed by Presidential Decree:
1. The book value of the relevant asset or liability as at the commencement date of the relevant business year denominated in the functional currency after change;
2. The amount denominated in the functional currency after changing the currency by applying the exchange rate as at the date on which the relevant asset is acquired or liability arises to the book value of the asset or liability as at the end date of the immediately preceding the business year in which the amount is denominated in the functional currency before change.
(4) Paragraph (3) shall apply mutatis mutandis where a corporation first applies the calculation method of tax bases prescribed in paragraph (1) 2 or 3. In such cases, the functional currency before change shall be deemed Korean Won.
(5) For purposes of paragraphs (1) through (4), matters necessary for the application of exchange rates, the report and change of the calculation method of tax bases, the disposition of amounts included in deductible expenses, the report of tax bases of a corporation that selects each calculation method of tax bases, the application of calculation method of tax bases, and other matters shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 10423, Dec. 30, 2010]
 Article 53-3 (Special Cases concerning Calculation of Tax Bases for Overseas Place of Business)
(1) The tax base for an overseas place of business of a domestic corporation shall be calculated in accordance with the method reported to the head of the tax office having jurisdiction over the place of tax payment, among the following methods (hereafter referred to as "calculation method of tax bases" in this Article): Provided, That the tax base of the income for the business year before the calculation method of tax bases prescribed in subparagraph 2 or 3 is first reported and applied shall be calculated by applying the calculation method of tax bases prescribed in subparagraph 1:
1. Method of re-preparing the financial statements where the financial statements of an overseas place of business are not prepared in any functional currency, other than Korean Won, combining them with the financial statements of the headquarters and calculating the tax base based on such combined financial statements;
2. Method of calculating the tax base based on the financial statements of an overseas place of business denominated in the functional currency of the overseas place of business, converting such tax base into Korean Won and aggregating it with the tax base of the headquarters;
3. Method of converting, into Korean Won, the items on the statement of financial position at the exchange rate as at the end date of the business year and the items on the consolidated income statement at the exchange rate prescribed by Presidential Decree in the case of the financial statements of an overseas place of business, combining them with the financial statements of the headquarters and calculating the tax base based on the combined financial statements.
(2) A corporation that has reported and applies the calculation method of tax bases prescribed in paragraph (1) 2 or 3 shall not change the calculation method of tax bases unless there arise circumstances prescribed by Presidential Decree, such as a merger between corporations using a different calculation method of tax bases.
(3) For purposes of paragraphs (1) and (2), matters necessary for the application of exchange rates, the report and change of the calculation method of tax bases, the report of tax bases of a corporation that selects each calculation method of tax bases, the application of calculation method of tax bases, and other matters shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 10423, Dec. 30, 2010]
 Article 54 (Detailed Regulations for Calculation of Amount of Income)
Except as otherwise expressly provided in this Act, matters necessary for the calculation of the amount of income for each business year of a domestic corporation shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 2 Calculation of Amount of Tax
 Article 55 (Tax Rates)
(1) The amount of corporate tax on the income of a domestic corporation for each business year shall be determined with the amount calculated by applying the relevant tax rate in the following table to the tax base referred to in Article 13 (if there is an amount of corporate tax on capital gains on the transfer of land, etc., under Article 55-2, an amount of corporate tax on unappropriated earnings under Article 56 and an amount of corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act, such amounts shall be aggregated; hereinafter referred to as "calculated tax amount"): <Amended by Act No. 15222, Dec. 19, 2017>
Tax BaseTax Rate
Not exceeding 200 million won 10/100 of tax base
Exceeding million won but not exceeding 20 billion won20 million won + (20/100 of the amount exceeding 200 million won)
Exceeding 20 billion won but not exceeding 30 billion won 3.98 billion won + (22/100 of the amount exceeding 20 billion won)
Exceeding 30 billion won65.58 billion won + (25/100 of the amount exceeding 30 billion won)
(2) With regard to corporate tax on income for each business year of a domestic corporation with a business year of less than 12 months, an amount computed by dividing the amount computed for the business year by applying Article 13 by the number of months of the business year and multiplying the resulting amount by 12 shall be the tax base for the business year, and the amount of tax computed by multiplying the amount of tax computed under paragraph (1) by the number of months of the business year divided by 12 shall be the amount of tax. In such cases, the number of months shall be calculated by the method prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 55-2 (Special Provisions concerning Taxation on Capital Gains on Transfer of Land, etc.)
(1) Where a domestic corporation transfers any of the following parcels of land or buildings (including facilities and structures appurtenant to such buildings; referred to as "land, etc." hereafter in this Article and Article 95-2), it shall pay the amount of tax calculated pursuant to the relevant subparagraph as corporate tax on capital gains on the transfer of land, etc., in addition to the corporate tax calculated by applying the tax rate prescribed in Article 55 to the tax base prescribed in Article 13. In such cases, the greatest tax amount shall apply to an asset if at least two of the following subparagraphs are applicable to that asset: <Amended by Act No. 12166, Jan. 1, 2014; Act No. 12850, Dec. 23, 2014>
1. Where the domestic corporation transfers any of the following real estate by no later than December 31, 2012, the amount of tax calculated by multiplying the capital gains by 10/100:
(a) A house referred to in subparagraph 2 (including the land appurtenant thereto; the same shall apply hereafter in this paragraph), which is real estate located within any designated area under Article 104-2 (2) of the Income Tax Act;
(b) Idle land referred to in subparagraph 3, which is real estate located within the designated area under Article 104-2 (2) of the Income Tax Act;
(c) Other real estate prescribed by Presidential Decree as necessary for stabilizing the prices of real estate, because the prices of such real estate has risen or are likely to rise sharply;
2. Where a residential house specified by Presidential Decree (including the land appurtenant thereto) or a residential building, which is not used at ordinary times for residence but used only for recreation, summer vacations, entertainment, or any similar purpose (referred to as "vacation house" hereafter in this Article) is transferred, the amount of tax calculated by multiplying capital gains on the transfer of land, etc., by 10/100 (or 40/100 in cases of capital gains on the transfer of unregistered land, etc.): Provided, That the foregoing shall not apply to any residential house (including the land appurtenant thereto) at a rural village in an Eup/Myeon specified in Article 3 (3) or (4) of the Local Autonomy Act, if such residential house meets the scope and criteria prescribed by Presidential Decree;
3. Where any idle land is transferred, the amount of tax calculated by multiplying capital gains on transfer of land, etc., by 10/100 (40/100 for gains from the transfer of unregistered land, etc.).
(2) "Idle land" referred to in paragraph (1) 3 means the land used for any of the following purposes during the period specified by Presidential Decree while a person owns the land: <Amended by Act No. 11607, Jan. 1, 2013; Act No. 12850, Dec. 23, 2014; Act No. 13426, Jul. 24, 2015>
1. A dry field, paddy field, or an orchard (referred to as "farmland" hereafter in this Article), which is either of:
(a) Land owned by a corporation that does not run farming as its main business: Provided, That excluded herefrom is any farmland prescribed by Presidential Decree permitted to be owned by a corporation under the Farmland Act and other Acts;
(b) Farmland in an urban area (excluding an area designated by Presidential Decree; the same shall apply hereafter in this item) as defined in subparagraph 1 of Article 6 of the National Land Planning and Utilization Act, among areas in the Special Metropolitan City, a Metropolitan City (excluding a Gun area in a Metropolitan City; the same shall apply hereafter in this paragraph), a Metropolitan Autonomous City (excluding an Eup/Myeon area in a Metropolitan Autonomous; the same shall apply hereafter in this paragraph), a Special Self-Governing Province (excluding an Eup/Myeon area in an administrative city established under Article 10 (2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; the same shall apply hereafter in this paragraph), or a Si (excluding an Eup/Myeon area in a Si in the combined form of urban and rural communities prescribed in Article 3 (4) of the Local Autonomy Act; the same shall apply hereafter in this paragraph): Provided, That excluded herefrom is any farmland for which the period set by Presidential Decree has not lapsed from the date such farmland is included in any urban area in the Special Metropolitan City, a Metropolitan City, a Metropolitan Autonomous City, a Special Self-Governing Province, or a Si;
2. Forest land: Provided, That excluded herefrom are:
(a) A seed-gathering forest or an experimental forest designated under the Creation and Management of Forest Resources Act, a forest protection zone designated under Article 7 of the Forest Protection Act, and other forest land prescribed by Presidential Decree as necessary for protecting and nurturing forests or for the public interest;
(b) A forest land prescribed by Presidential Decree, which is owned by any corporation that runs the forestry as its main business or by a corporate forest manager as provided for in the Creation and Management of Forest Resources Act;
(c) A forest land prescribed by Presidential Decree, which has reasonable grounds to believe that such forest land is directly related to the business of any corporation, in consideration of its owner, location, utilization status, holding period, area, and other factors;
3. Any of the following ranch areas: Provided, That excluded herefrom is a ranch area prescribed by Presidential Decree, which has reasonable grounds to believe that such ranch area is directly related to the business of any corporation, in consideration of its owner, location, utilization status, holding period, area and other factors:
(a) A ranch area owned by any corporation that runs the livestock business as its main business, the scale of which exceeds the standard size of the livestock area prescribed by Presidential Decree, or which is located in an urban area (excluding any urban area prescribed by Presidential Decree; the same shall apply hereafter in this item) of the Special Metropolitan City, a Metropolitan City, a Metropolitan Autonomous City, a Special Self-Governing Province, or a Si (excluding where the period set by Presidential Decree has not lapsed from the date the ranch area is included in the urban area);
(b) A ranch area owned by any corporation that does not run the livestock business as its main business;
4. Land, other than farmland, forest land, or ranch areas, except for any of the following land:
(a) Land exempt from property tax under the Local Tax Act or any relevant Act;
(b) Land subject to the aggregate taxation of property tax or the separate taxation under Article 106 (1) 2 and 3 of the Local Tax Act;
(c) Land prescribed by Presidential Decree which has reasonable grounds to believe that such land is directly related to the business of a corporation, in consideration of its utilization status, fulfillment of duties imposed by any relevant Act, the revenue amount, and other factors;
5. Land, the area of which exceeds an area computed by multiplying the multiple rate set by Presidential Decree by the area of land on which a house is built, among land appurtenant to such house as referred to in Article 106 (2) of the Local Tax Act;
6. Land appurtenant to a vacation house: Provided, That, if the boundary of the land appurtenant to a vacation house are not definite, the area of land equivalent to ten times the floor area of the building shall be deemed the land appurtenant thereto;
7. Land similar to the land provided for in subparagraphs 1 through 6, prescribed by Presidential Decree, which has reasonable grounds to believe that such land is not directly related to the business of a corporation.
(3) In applying paragraph (1) 3, where any parcel of land becomes idle as its use is prohibited under any statute or due to exceptional circumstances prescribed by Presidential Decree after its acquisition, such land may not be deemed idle, as prescribed by Presidential Decree.
(4) Paragraph (1) shall not apply to any capital gains on transfer of any of the following land, etc.: Provided, That the same shall not apply to any capital gains on transfer of unregistered land, etc.:
1. Income accruing from the disposal of land, etc. made by the adjudication of bankruptcy;
2. Income accruing from the exchange, sub-division, or consolidation of farmland directly cultivated by a corporation in circumstances prescribed by Presidential Decree;
3. Income accruing on the grounds prescribed by Presidential Decree, including a disposition of replotting under the Act on the Improvement of Urban Areas and Residential Environments or other Acts.
(5) "Unregistered land, etc." referred to in paragraphs (1) and (4) means the land, etc., transferred by a corporation without registering the acquisition thereof: Provided, That excluded herefrom is any parcel of land, etc., acquired on a long-term installment plan, the contract terms of which make it impossible to register its acquisition as at the time it is acquired, and other land, etc., prescribed by Presidential Decree.
(6) Capital gains on the transfer of land, etc., shall be an amount computed by subtracting the book value thereof as at the time of transfer from the transfer value of land, etc.: Provided, That the capital gain on the transfer of land, etc., that a nonprofit domestic corporation acquired on or before December 31, 1990 may be determined by subtracting the greatest amount, among the book value and the values appraised under Articles 60 and 61 (1) of the Inheritance Tax and Gift Tax Act as at January 1, 1991 from the transfer amount. <Amended by Act No. 12850, Dec. 23, 2014>
(7) In applying paragraphs (1) through (6), the scope of farmland, forest land, or ranch areas, the criteria for determining the main business, the method for calculating capital gains on transfer of land, etc., if any loss incurred from the transfer of such land, etc., during the relevant business year, the business year in which any profit or loss generated from the transfer of land, etc., falls, and other necessary matters shall be prescribed by Presidential Decree.
(8) Paragraph (1) 2 and 3 shall not apply to any gain accruing from the transfer of land, etc., by no later than December 31, 2012.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 56 (Corporate Tax on Unappropriated Earnings of Enterprises)
(1) If any of the following domestic corporations has earnings not appropriated for the investment, wages, dividends, etc., referred to in paragraph (2) 1 (a) through (d), such domestic corporation shall pay the tax amount calculated by multiplying the unappropriated earnings referred to in paragraph (2) (referring to an amount after deducting the reserve for appropriation in the next term under paragraph (5) and the over-appropriated amount carried-over under paragraph (7)) by 10/100, as its corporate tax on the unappropriated earnings in addition to the amount of corporate tax calculated by applying the tax rate referred to in Article 55 to the tax base referred to in Article 13:
1. A corporation whose equity capital prescribed by Presidential Decree as on the last day of each business year exceeds 50 billion won (excluding small or medium enterprises prescribed by Presidential Decree);
2. A corporation that belongs to a corporate group subject to restrictions on cross-shareholdings referred to in Article 14 (1) of the Monopoly Regulation and Fair Trade Act as on the last day of each business year.
(2) A domestic corporation referred to in any subparagraph of paragraph (1) shall file a tax return on the amount calculated by either of the following methods, whichever it chooses, (the amount is referred to as "unappropriated earnings," if the computed amount is positive; and the amount is referred to as "over-appropriated amount" without the negative sign, if the computed amount is negative; the same shall apply hereafter in this Article) with the head of the tax office having jurisdiction over the place of tax payment within three months after the last day of the month in which each business year ends, as prescribed by Presidential Decree: <Amended by Act No. 14386, Dec. 20, 2016>
1. The method by which the aggregate of the following amounts is deducted from the amount computed by multiplying the income prescribed by Presidential Decree (referred to as "corporate income" hereafter in this Article), among the income for the relevant business year (referring to the business year in which December 31, 2017 falls), by the rate prescribed by Presidential Decree within the percentage between 60/100 and 80/100:
(a) The aggregate of investments in assets prescribed by Presidential Decree, such as machinery;
(b) The amount calculated by adding the amount computed by the following formula to the increase in wages of the full-time employees prescribed by Presidential Decree (hereafter in this Article referred to as "full-time employees") for the relevant business year:
(i) The amount computed by multiplying the increase in wages of full-time employees for the relevant business year by 50/100, where the number of full-time employees for the relevant business year is greater than the number of full-time employees for the immediately preceding business year;
(ii) The amount computed by multiplying the increase in wages of the full-time youth employees prescribed by Presidential Decree (hereafter in this Article referred to as "full-time youth employees") for the relevant business year by 50/100, where the number of full-time youth employees for the relevant business year is greater than the number of full-time youth employee for the immediately preceding business year;
(c) The amount computed by multiplying the sum of dividends prescribed by Presidential Decree by 50/100;
(d) The amount prescribed by Presidential Decree, such as the amount expended for collaborative cooperation, as defined in subparagraph 3 of Article 2 of the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises;
2. The method by which the aggregate of the amounts referred to in the items of subparagraph 1 (excluding the aggregate of investments in assets referred to in item (a)) is deducted from the amount computed by multiplying the corporate income by the rate prescribed by Presidential Decree within the percentage between 20/100 and 40/100.
(3) Where a domestic corporation referred to in any subparagraph of paragraph (1) files a tax return prepared by the method it has chosen under paragraph (2), it shall continuously apply that method during the period prescribed by Presidential Decree from the beginning of the relevant business year.
(4) Where a domestic corporation referred to in any subparagraph of paragraph (1) fails to file a tax return as prescribed in paragraph (2), paragraph (3) shall apply to such corporation, deeming that it has filed a tax return prepared by the method it has chosen under paragraph (2), as prescribed by Presidential Decree.
(5) A domestic corporation referred to in any subparagraph of paragraph (1) (excluding corporations to which paragraph (4) applies) may fully or partially set aside unappropriated earnings for the relevant business year referred to in paragraph (2) as an amount to be appropriated for investment, wages, dividends, or any other purpose (referred to as "reserve for appropriation in the next term" hereafter in this Article) and deduct the reserve for appropriation in the next term from the unappropriated earnings for the relevant business year.
(6) Where a corporation has set aside a reserve for appropriation in the next term in the immediately preceding business year pursuant to paragraph (5), it shall pay the amount computed by the following formula (if the amount is negative, it shall be deemed nil) in addition to the amount of corporate tax for the relevant business year:
(Reserve for appropriation in the next term - Over-appropriated amount calculated under paragraph (2) for the relevant business year) x 10/100
(7) Where an over-appropriated amount referred to in paragraph (2) (referring to an over-appropriated amount remaining after deducting the reserve for appropriation in the next term from the over-appropriated amount under paragraph (6)) exists for the relevant business year, the over-appropriated amount may be carried over to the following business year (limited to the first business year that begins after the end of the relevant business year) and may be deducted from unappropriated earnings (including unappropriated earnings under Article 100-32 (2) of the Restriction of Special Taxation Act) for the following business year. <Amended by Act No. 15222, Dec. 19, 2017>
(8) Where a domestic corporation referred to in paragraph (1) has disposed of an asset referred to in paragraph (2) 1 (a), or is in circumstances prescribed by Presidential Decree, it shall pay an amount equivalent to interest calculated, as prescribed by Presidential Decree, in addition to the tax amount unpaid by deducting the amount invested in the asset under paragraph (2) 1.
(9) The methods for computing the aggregate of investments, or an increase in wages, the number of full-time employees or of full-time youth employees for the purpose of applying paragraphs (1) through (8), and other necessary matters, shall be prescribed by Presidential Decree. <Amended by Act No. 14386, Dec. 20, 2016>
[This Article Newly Inserted by Act No. 12850, Dec. 23, 2014]
 Article 57 (Foreign Tax Credits, etc.)
(1) Where the tax base of a domestic corporation for each business year includes any foreign source income, and the amount of foreign corporate tax prescribed by Presidential Decree on such foreign source income (referred to as "amount of foreign corporate tax" hereafter in this Article) has been paid or is payable, the corporation may be entitled to the application of either of the following methods, notwithstanding subparagraph 1 of Article 21: <Amended by Act No. 12850, Dec. 23, 2014>
1. Deducting the amount of foreign corporate tax by up to the amount (referred to as "deduction limit" hereafter in this Article) computed by multiplying the amount of corporate tax calculated pursuant to Article 55 for the relevant business year (excluding the amount of corporate tax on any capital gain on the transfer of land, etc., and the amount of corporate tax on the unappropriated earnings under Article 56) by the ratio of foreign source income to the tax base for the relevant business year (or the ratio specified by Presidential Decree, if a tax exemption or reduction is granted under the Restriction of Special Taxation Act or any other Act) from the amount of corporate tax for the relevant business year;
2. Including the amount of foreign corporate tax paid or payable on foreign source income, in deductible expenses, when calculating the amount of income for each business year.
(2) Where the amount of foreign corporate tax exceeds the deduction limit paid or payable to a foreign government, such excess may be carried forward to each business year ending within five years from the start date of the business year following the relevant business year, and may be deducted within the deduction limit for each business year in which it is carried forward.
(3) An amount equivalent to the amount of the corporate tax reduction or exemption granted to a domestic corporation having foreign source income in a country which is a party to a tax treaty shall be deemed the amount of foreign corporate tax for which the domestic corporation is entitled to a tax credit or inclusion in deductible expenses under paragraph (1), within the limits stipulated by the relevant tax treaty.
(4) Where the amount of income of a domestic corporation for each business year includes dividends or distribution of surpluses from a foreign subsidiary (referred to as "dividend income" hereafter in this Article), the amount of foreign corporate tax imposed on the amount, computed as prescribed by Presidential Decree, that is equivalent to the dividend income, among the amount of foreign corporate tax on the foreign subsidiary's income, shall be deemed the amount of foreign corporate tax for which the domestic corporation is entitled to a tax credit or inclusion in deductible expenses under paragraph (1). <Amended by Act No. 11128, Dec. 31, 2011>
(5) "Foreign subsidiary" referred to in paragraph (4) means a foreign corporation that meets the requirements prescribed by Presidential Decree, in which a domestic corporation invests at least 25/100 (or 5/100 in cases of a foreign corporation that engages in the business of developing overseas resources under Article 22 of the Restriction of Special Taxation Act) of its total number of outstanding voting stocks or total amount of investment. <Amended by Act No. 12850, Dec. 23, 2014>
(6) Where the amount of income of a domestic corporation for each business year includes the dividend income from a foreign corporation and the investor domestic corporation, not the relevant foreign corporation, has a direct tax liability for the income of the foreign corporation or otherwise meets the requirements prescribed by Presidential Decree, the amount computed, as prescribed by Presidential Decree, which is equivalent to the dividend income out of the amount of foreign corporate tax imposed on the investor domestic corporation shall be deemed the amount of foreign corporate tax for which the domestic corporation is entitled to a tax credit or inclusion in deductible expenses under paragraph (1).
(7) The method for calculating foreign source income, tax credits, or inclusion of foreign source income in deductible expenses under paragraphs (1) through (6) and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 11607, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 57-2 (Special Cases concerning Foreign Tax Credits for Indirect Investment Companies, etc.)
(1) Where any investment company, special purpose company, investment limited liability company, investment association (excluding a private equity fund participating in management, as defined in Article 9 (19) 1 of the Financial Investment Services and Capital Markets Act), or investment limited liability company under the aforesaid Act, any corporate restructuring real estate investment company or real estate investment company for entrusted management as defined in the Real Estate Investment Company Act (referred to as "indirect investment company, etc." hereafter in this Article) has paid foreign corporate tax (referring to the amount of foreign corporate tax referred to in Article 57 (1) and (6)) on its income accrued from its investment in foreign assets, it shall each pay the tax due as computed by subtracting the tax paid overseas in the relevant business year (its ceiling shall be the amount of tax computed by multiplying the tax rate under Article 129 (1) 2 of the Income Tax Act by the income accrued from the investment in foreign assets, and the amount exceeding such ceiling may be deemed nil) from the amount of the corporate tax of the relevant business year when filing a return on the tax base of the business year during which the relevant income accrues, notwithstanding Article 57. <Amended by Act No. 12166, Jan. 1, 2014; Act No. 13448, Jul. 24, 2015>
(2) Where the amount of tax paid by an indirect investment company, etc., in any foreign country for the relevant business year referred to in paragraph (1) exceeds the corporate tax for the relevant business year, the indirect investment company, etc., may obtain a refund of such excess, as prescribed by Presidential Decree.
(3) An investment trust, an investment limited partnership, or an undisclosed investment association as defined in the Financial Investment Services and Capital Markets Act (referred to as "investment trust, etc." hereafter in this paragraph) shall be deemed a domestic corporation for the purposes of applying paragraphs (1) and (2) to the investment trust, etc. In such cases, "business year" referred to in paragraph (1) shall be construed as "accounting period of the investment trust, etc.," and "when filing a return on the tax base" shall be construed as "when settling accounts." <Amended by Act No. 12850, Dec. 23, 2014>
(4) In applying paragraph (3), the amount of corporate tax of the relevant business year shall be deemed nil and paragraph (2) shall apply, accordingly.
(5) In applying paragraphs (3) and (4), a collective investment business entity that manages any piece of investment trust property under the Financial Investment Services and Capital Markets Act shall be deemed to act on behalf of the relevant investment trust company.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 58 (Tax Credits for Losses from Disasters)
(1) Where a domestic corporation loses at least 20/100 of the total amount of its assets prescribed by Presidential Decree for each business year (hereafter referred to as "total amount of assets" in this Article) due to any natural disaster or other accident (hereinafter referred to as "disaster") and it is deemed impractical for the domestic corporation to pay tax, the amount calculated by multiplying any of the following amounts of corporate tax by the ratio of the value of the lost assets to the total amount of assets prior to the loss (limited to the value of lost assets) shall be deducted from the amount of tax. In such cases, the value of land shall not be included in the value of the assets:
1. Corporate tax which is not imposed, or unpaid after imposition (including surcharges) as at the date of the occurrence of the disaster;
2. Corporate tax on income for the business year which includes the date of the occurrence of the disaster.
(2) A domestic corporation that intends to obtain a tax credit under paragraph (1) shall file an application with the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(3) Upon receipt of an application for a corporate tax credit referred to in paragraph (1) 1 (excluding corporate tax, the filing deadline of which has not passed) filed pursuant to paragraph (2), the head of the tax office having jurisdiction over the place of tax payment shall determine the amount of the tax credit and notify the relevant corporation thereof.
(4) In applying paragraphs (1) through (3), the calculation of the percentage of assets lost, granting tax credits for disasters, and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 58-2 Deleted. <by Act No. 9924, Jan. 1, 2010>
 Article 58-3 (Tax Credits upon Correction of Wrongful Accounting)
(1) Where a domestic corporation has its tax base or tax amount corrected upon filing an application pursuant to Article 45-2 of the Framework Act on National Taxes on the ground that the tax base and tax amount were overstated because of its wrongful accounting, which meet all the following criteria, the overpaid tax shall not be refunded but shall be deducted from the corporate tax for the business year in which the tax amount is corrected and subsequent business years. In such cases, the deductible amount for each business year shall not exceed 20/100 of the overpaid tax, and the overpaid tax that remains after deduction shall be carried over to subsequent business years for deduction: <Amended by Act No. 14386, Dec. 20, 2016>
1. Profits or assets were overstated or deductible expenses or liabilities were understated on a business report submitted pursuant to Article 159 of the Financial Investment Services and Capital Markets Act or an audit report submitted pursuant to Article 8 of the Act on External Audit of Stock Companies;
2. The domestic corporation, its auditor or certified public accountant has been subject to any of the sanctions prescribed by Presidential Decree, such as a warning or caution.
(2) In applying paragraph (1), if a domestic corporation has any tax payable according to a revised return filed pursuant to Article 45 of the Framework Act on National Taxes during any business year before the business year in which a correction is made, in connection with wrongful accounting, the overpaid tax under paragraph (1) shall be first deducted from the tax payable by up to 20/100 of the overpaid tax. <Amended by Act No. 14386, Dec. 20, 2016>
(3) Where a domestic corporation that has an overpaid tax deducted under paragraphs (1) and (2) has any remainder of the overpaid tax, such remainder shall be disposed of as follows: <Newly Inserted by Act No. 14386, Dec. 20, 2016>
1. Where the domestic corporation is dissolved after a merger or division: The surviving corporation or the corporation established through the division (including the counterpart corporation to a division and merger) shall succeed to the remainder of the overpaid tax and shall have the tax deducted in accordance with paragraph (1);
2. Where the domestic corporation is dissolved by any method other than those referred to in subparagraph 1: The head of the tax office having jurisdiction over its place of tax payment or the commissioner of the competent regional tax office shall immediately refund the remainder after deducting the corporate tax payable on liquidation income under Article 77 from the overpaid tax to such domestic corporation.
(4) Detailed methods and procedures relating to tax credits under paragraphs (1) and (3), methods for carryover and deduction of any remainder of an overpaid tax after deduction, and other related matters, shall be prescribed by Presidential Decree. <Amended by Act No. 14386, Dec. 20, 2016>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 59 (Calculation of Tax Reductions and Exemptions and Tax Credits)
(1) Where provisions regarding corporate tax reductions or exemptions and provisions regarding tax credits are concurrently applicable where this Act or any other Act applies, the priority of applicability is as follows, except as otherwise expressly provided for in this Act. In such cases, if the aggregate of the amounts referred to in subparagraphs 1 and 2 exceeds the amount of corporate tax payable by a corporation (excluding corporate tax on capital gains on the transfer of land, etc. under Article 55-2, corporate tax on unappropriated earnings under Article 56, corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act, and penalty tax), the excess shall be deemed nil: <Amended by Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
1. Tax reductions and exemptions (including exemptions) of the amount of tax on income for each business year;
2. Tax credits which are not entitled to be carried forward;
3. Tax credits which are entitled to be carried forward. In such cases, where both a tax credit granted during the relevant business year and a tax credit carried forward exist, the tax credit carried forward shall be deducted first;
4. Tax credits referred to in Article 58-3. In such cases, when both a tax credit and a tax credit carried forward exist, the tax credit carried forward shall be deducted first.
(2) The amount of a tax reduction or exemption referred to in paragraph (1) 1 shall be the amount computed by multiplying the calculated amount (in cases of a tax reduction, the amount computed by multiplying the calculated amount by the relevant reduction rate) of tax (excluding the amount of corporate tax on capital gains on the transfer of land, etc., under Article 55-2, the amount of corporate tax on unappropriated earnings under Article 56 and the amount of corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act) by the ratio (100/100, if the ratio exceeds 100/100) of the amount of income partially or fully exempted to the tax base, except as otherwise expressly provided for in this Act. <Amended by Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 3 Reports and Payment
 Article 60 (Filing Reports on Tax Bases, etc.)
(1) A domestic corporation liable to pay tax shall file a report on the corporate tax base and the tax payable on income for the relevant business year within three months from the end date of the month in which the end date of each business year falls, to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(2) A report filed under paragraph (1) shall be accompanied by the following documents:
1. A statement of financial position, a consolidated income statement, and an earned surplus settlement statement (or deficits settlement statement) of each domestic corporation prepared by applying mutatis mutandis corporate accounting standards;
2. A tax settlement invoice prepared, as prescribed by Presidential Decree (hereinafter referred to as "tax settlement invoice");
3. Other documents prescribed by Presidential Decree.
(3) Paragraph (1) shall also apply to a domestic corporation with no income or with losses incurred for each business year.
(4) Where a domestic corporation is dissolved due to a merger or division and files a report pursuant to paragraph (1), the report shall be accompanied by the following documents:
1. A statement of financial position of a merged corporation, divided corporation, or a disappearing counterpart corporation to a merger and division as at the registration date of the merger or the registration date of the division, and a detailed statement on the assets and liabilities succeeded to by a surviving corporation, etc., due to the merger or division;
2. Other documents prescribed by Presidential Decree.
(5) Where the documents referred to in paragraph (2) 1 and 2 are not submitted along with a report filed under paragraph (1), the report shall not be construed as a report filed under this Act: Provided, That the same shall not apply to a non-profit domestic corporation which does not run profit-making business referred to in Article 3 (3) 1 or 7.
(6) Where any error or omission is found in the report and other documents filed under paragraph (1) or (2), the head of the tax office having jurisdiction over the place of tax payment and the commissioner of the competent regional tax office may request the correction of such error or omission.
(7) Notwithstanding paragraph (1), where a domestic corporation subject to audit by an auditor pursuant to Article 2 of the Act on External Audit of Stock Companies applies for an extension of the filing deadline, as prescribed by Presidential Decree, on the grounds that the settlement of accounts is not finalized because the audit of the relevant business year is not complete, the filing deadline may be extended by up to one month.
(8) Each domestic corporation granted an extension of its filing deadline under paragraph (7) must pay the tax and the amount calculated by applying the interest rate prescribed by Presidential Decree, in consideration of the interest rates charged by a financial company, etc., to the number of days of the extension. In such cases, the number of days of the extension means the number of days from the following day of the filing deadline prescribed in paragraph (1) to the day a report is filed and payment is made (limited to where such report is filed and payment is made by the extended deadline) or to the extended day.
(9) In cases of a domestic corporation specified by Presidential Decree as deemed necessary to ensure correct settlement between corporate accounting and tax accounting or honest tax payment, a tax settlement invoice shall be prepared by any of the following persons who belong to the settlement team prescribed by Presidential Decree. <Newly Inserted by Act No. 13555, Dec. 15, 2015>
1. A certified tax accountant registered in the register of certified tax accountants under the Certified Tax Accountant Act;
2. A certified public accountant registered in the register of certified tax accountants or the register of tax agents under the Certified Tax Accountant Act;
3. An attorney-at-law registered in the register of certified tax accountants under the Certified Tax Accountant Act.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 60-2 (Submission of Certificate of Confirmation on Compliant Filing)
(1) When either of the following domestic corporations files a return on the tax base and amount of corporate tax in accordance with Article 60 for compliant tax payment, such corporation shall submit a certificate of confirmation issued by any of the persons specified by Presidential Decree, such as a certified public tax accountant, to the effect that the person confirms the reasonableness of the tax base amount computed according to the books of accounts and evidentiary documents kept and recorded in accordance with Articles 112 and 116 (hereinafter referred to as "certificate of confirmation of compliant filing"), as prescribed by Presidential Decree, in addition to the documents specified in Article 60 (2): Provided, That a domestic corporation audited by an auditor in accordance with Article 2 of the Act on External Audit of Stock Companies, Etc. need not submit such certificate of confirmation:
1. A domestic corporation whose main business is real estate lease business and who meets the criteria prescribed by Presidential Decree;
2. A domestic corporation, where a business operator subject to confirmation of compliant filing under Article 70-2 (1) of the Income Tax Act has converted his/her business into a domestic corporation by any of the methods prescribed by Presidential Decree, such as in-kind investment of fixed assets for business use (limited to a domestic corporation in which case three years have not passed yet since it was converted into a corporation as at the end of the pertinent business year).
(2) Notwithstanding Article 60 (1), where a domestic corporation under the main sentence of paragraph (1) shall submit a certificate of confirmation of compliant filing, it shall report the tax base and amount of corporate tax to the head of the tax office having jurisdiction over the place of tax payment, within four months from the end of the month in which the pertinent business year ends.
(3) If the head of the tax office having jurisdiction over the place of tax payment finds any defect or error in a certificate of confirmation of compliant filing submitted in accordance with paragraph (1), he/she may request to amend such certificate.
(4) Except as otherwise expressly provided for in paragraphs (1) through (3), matters necessary for the submission of a certificate of confirmation of compliant filing, etc. shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 15222, Dec. 19, 2017]
 Article 61 (Special Cases concerning Appropriation of Reserve Funds in Deductible Expenses)
(1) Where a domestic corporation appropriates a reserve fund referred to in the Restriction of Special Taxation Act in the tax settlement invoice, or a non-profit domestic corporation subject to audit by an auditor under Article 3 of the Act on External Audit of Stock Companies appropriates a reserve fund for proper purpose business referred to in Article 29 in the tax settlement invoice, and the relevant reserve fund is accumulated as reserves in disposing of the profits accruing during the relevant business year, such amount shall be deemed included in deductible expenses.
(2) Matters necessary for the appropriation of a reserve fund in deductible expenses and the disposal of the amount of the reserve fund under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 62 (Special Cases concerning Filing Tax Bases of Non-Profit Domestic Corporations)
(1) A non-profit domestic corporation may elect not to file a report on the tax base on interest income withheld under Article 73, which is interest, discounts, or profits referred to in Article 3 (3) 2 (excluding profits from non-business loans referred to in Article 16 (1) 11 of the Income Tax Act, and including investment trust proceeds; hereafter referred to as "interest income" in this Article), notwithstanding Article 60 (1). In such cases, the interest income, the tax base of which is not reported shall be disregarded for the purpose of calculating the amount of income for each business year under Article 14.
(2) Matters necessary for filing a corporate tax base on the interest income of a non-profit domestic corporation and the collection thereof under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 62-2 (Special Provisions concerning Taxation of Capital Gains on Transfer of Assets by Non-Profit Domestic Corporations)
(1) Where a non-profit domestic corporation (excluding any non-profit domestic corporation that runs profit-making business referred to in Article 3 (3) 1; hereafter the same shall apply in this Article) earns income accruing from the transfer of any of the following assets (hereafter referred to as "capital gains on transfer of assets" in this Article), being the revenue provided for in Article 3 (3) 4 through 6, it may choose not to file a tax base, notwithstanding Article 60 (1). In such cases, income, the tax base of which is not filed shall be disregarded for the purpose of calculating the amount of income for each business year pursuant to Article 14:
1. Stocks, etc., referred to in Article 94 (1) 3 of the Income Tax Act, or stocks, etc., prescribed by Presidential Decree;
2. Land or buildings (including facilities or structures appurtenant to such buildings);
(2) An amount calculated by applying rates prescribed in each subparagraph of Article 104 (1) of the Income Tax Act to the tax base calculated by applying mutatis mutandis Article 92 of the same Act shall be paid as corporate tax on capital gains on transfer of assets, the tax base of which is not filed under paragraph (1). In such cases, Article 55-2 shall not apply where tax rates weighted under Article 104 (4) of the Income Tax Act apply.
(3) In applying paragraph (2), the tax base calculated by applying mutatis mutandis Article 92 of the Income Tax Act shall be the amount calculated by first deducting incurred expenses from the total income accruing from the transfer of assets (hereafter referred to as "transfer value" in this Article) and re-deducting the amounts provided for in Articles 95 (2) and 103 of the Income Tax Act from the amount deducted (hereinafter referred to as "transfer marginal profits").
(4) Articles 96 through 98 and 100 of the Income Tax Act shall apply mutatis mutandis to the calculation of the transfer value, expenses incurred and transfer marginal profits referred to in paragraph (3): Provided, That where any non-profit corporation that has received the contribution of any asset which is not included in the taxable value of the inheritance tax or the taxable value of the gift tax under the Inheritance Tax and Gift Tax Act, transfers any asset prescribed by Presidential Decree, the acquisition value of the relevant assets by the contributor thereof shall be the acquisition value of the relevant corporation, and in the case of an organization deemed a corporation under Article 13 (2) of the Framework Act on National Taxes, the acquisition value prior to obtaining approval therefor under the same paragraph shall be deemed the acquisition value.
(5) Articles 101 and 102 of the Income Tax Act shall apply mutatis mutandis to the calculation of the tax base on capital gains on transfer of assets, and Article 93 of the same Act shall apply mutatis mutandis to the calculation of the amount of tax on income accruing from the transfer of assets.
(6) The provisions governing the filing of a tax base, payment, determination, correction, and collection of corporate tax on income for each business year, in which the date of transfer of assets falls, shall apply mutatis mutandis to the filing of a tax base, payment, determination, correction, and collection of corporate tax referred to in paragraph (2), and such corporate tax shall be filed, paid, determined, corrected, and collected being added to other corporate tax. In such cases, Article 76 (1) shall apply mutatis mutandis.
(7) Corporate tax calculated under paragraph (2) shall be voluntarily paid upon filing a preliminary return on the tax base of capital gains by applying mutatis mutandis Articles 105 through 107 of the Income Tax Act. Article 112 of the Income Tax Act shall apply mutatis mutandis to such cases. <Amended by Act No. 13555, Dec. 15, 2015>
(8) Where any non-profit domestic corporation files a preliminary return on the tax base of capital gains under paragraph (7), it shall be deemed to have filed a tax base pursuant to paragraph (6): Provided, That, if any non-profit domestic corporation falls under the proviso to Article 110 (4) of the Income Tax Act, it shall file a tax base pursuant to paragraph (6).
(9) The methods for applying special cases concerning capital gains on transfer of assets pursuant to paragraphs (1) through (8), and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 63 (Interim Prepayment)
(1) Where each business year of a domestic corporation (excluding an educational foundation that operates a private school defined by Article 3 of the Higher Education Act, an industry-academia cooperation group under the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act, the Seoul National University established under the Act on Establishing and Administrating Seoul National University, and the Incheon National University established under the Act on Establishing and Administering Incheon National University) exceeds six months (excluding the first business year after the incorporation of a corporation, if newly incorporated without a merger or division), the domestic corporation shall determine the period of six months from the beginning of the relevant business year as an interim prepayment period and shall pay the amount computed by multiplying six by the amount computed by dividing the amount of tax (including penalty tax, but excluding corporate tax on capital gains on the transfer of land, etc. under Article 55-2, corporate tax on unappropriated earnings under Article 56, and corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act) determined as corporate tax for the business year immediately preceding the relevant business year, less the following amounts, by the number of months in the immediately preceding business year (hereinafter referred to as "interim tax") within two months after the expiration of the interim prepayment period to the tax office having jurisdiction over the place of tax payment, the Bank of Korea (including any of its agents), or a post office (hereinafter referred to as "tax office, etc., having jurisdiction over the place of tax payment"), as prescribed by Presidential Decree: Provided, That, if a domestic corporation (excluding corporations referred to in Article 51-2 (1)) liable to pay interim tax has no calculated amount of tax finally assessed as corporate tax for the immediately preceding business year, if the amount of corporate tax for the immediately preceding business year has not been finally assessed by the end of the relevant interim prepayment period, or if the relevant business year is the first business year after the relevant corporation is newly incorporated through a division or its counter-party corporation to a division is merged through a division, such corporation shall compute interim tax and pay it pursuant to paragraph (5): <Amended by Act No. 11128, Dec. 31, 2011; Act No. 12166, Jan. 1, 2014; Act No. 12850, Dec. 23, 2014; Act No. 13230, Mar. 27, 2015; Act No. 15222, Dec. 19, 2017>
1. The amount of corporate tax reductions or exemptions granted in the business year immediately preceding the relevant business year (excluding the amount deducted from income);
2. The amount of withholding tax paid as corporate tax in the business year immediately preceding the relevant business year;
3. The amount of occasionally imposed corporate tax paid in the business year immediately preceding the relevant business year.
(2) Where a corporation incorporated after a merger pays interim tax computed under paragraph (1) for the first business year upon its incorporation, the business year immediately preceding the business year which includes the registration date of the merger of the merged corporation shall be construed as the immediately preceding business year referred to in paragraph (1).
(3) Where a corporation surviving a merger pays interim tax computed under paragraph (1) for the first business year after the merger, both the immediately preceding business year of the surviving corporation and the business year immediately preceding the business year which includes the registration date of the merger of the merged corporation shall be construed as the immediately preceding business year referred to in paragraph (1).
(4) Where a corporation which becomes ineligible for the consolidated tax return system under Articles 76-9, 76-10 and 76-12 pays interim tax computed under paragraph (1) in the first business year in which it becomes ineligible for the consolidated tax return system, the computed tax for the immediately preceding consolidated business year by consolidated corporation as prescribed in Article 76-15 (4) shall be construed as the computed amount of tax which has been determined as corporate tax for the immediately preceding business year referred to in paragraph (1).
(5) A domestic corporation liable to pay interim tax under paragraph (1) may use the relevant interim prepayment period as one business year, and use the amount computed by deducting the following amounts from the amount of corporate tax calculated by applying the tax rates referred to in Article 55 to the tax base calculated under Articles 13 through 18, 18-2, 18-3, 19, 19-2, 20 through 30, 33 through 38, 40 through 42, 42-2, 43, 44, 44-2, 44-3, 45, 46, 46-2 through 46-5, 47, 47-2, 50, 51, 51-2, 52, 53, 53-2, 53-3 and 54, as the interim tax and pay it at the tax office, etc., having jurisdiction over the place of tax payment, notwithstanding paragraph (1). In such cases, the same shall not apply where the deadline for interim prepayment under paragraph (1) has lapsed, except in cases falling under the proviso to paragraph (1): <Amended by Act No. 11128, Dec. 31, 2011>
1. The amount of tax reductions or exemptions corresponding to the relevant interim prepayment period (excluding the amount deducted from income);
2. The amount of withholding tax paid as corporate tax during the relevant interim prepayment period;
3. The amount of occasionally imposed corporate tax during the relevant interim prepayment period.
(6) Where deemed necessary, the head of the tax office having jurisdiction over the place of tax payment may determine the interim tax for the relevant business year, not exceeding the amount of corporate tax for the immediately preceding business year of the relevant corporation (in cases falling under paragraph (5), the amount of the relevant interim tax divided by six and multiplied by the number of months in the relevant business year), as prescribed by Presidential Decree, notwithstanding paragraphs (1) through (5).
(7) Where the amount of tax payable by a domestic corporation pursuant to paragraphs (1) and (5) exceeds one thousand won, it may be paid in installments by applying mutatis mutandis Article 64 (2).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 64 (Payment)
(1) A domestic corporation shall deduct the following amounts of corporate tax (excluding additional tax) from the calculated amount of corporate tax on income for each business year and pay it as corporate tax on income for each business year by the filing deadline prescribed in Article 60 to the tax office, etc. having jurisdiction over the place of tax payment:
1. The amount of tax reduced or exempted for the relevant business year;
2. The interim tax for the relevant business year under Article 63;
3. The amount of occasionally imposed tax for the relevant business year under Article 69;
4. The amount of withheld tax for the relevant business year under Article 73.
(2) Where the amount of tax payable by a domestic corporation under paragraph (1) exceeds 10,000,000 won, some of the tax payable may be paid in installments within one month (two months for small and medium enterprises referred to in Article 25 (1) 1) after expiration of the payment deadline, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 65 Deleted. <by Act No. 13555, Dec. 15, 2015>
SECTION 4 Determination, Correction, and Collection
Subsection 1 Determination and Correction of Tax Bases
 Article 66 (Determinations and Corrections)
(1) Where a domestic corporation fails to file a report under Article 60, the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office shall determine the tax base and amount of corporate tax on the income of the domestic corporation for each business year.
(2) Where a domestic corporation that has filed a report under Article 60 falls under any of the following cases, the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office shall correct the tax base and amount of corporate tax on the income of the relevant corporation for each business year: <Amended by Act No. 11873, Jun. 7, 2013>
1. Where it makes any error or omission in the details of the report;
2. Where it fails to submit all or some payment statements referred to in Article 120 or 120-2, or aggregate invoices for each supplier or purchaser referred to in Article 121;
3. Where it is determined that the details of the report are unconscientious, taking into account the scope of facilities or the business conditions in any of the followings cases:
(a) Where a corporation meeting the membership eligibility for a credit card merchant referred to in Article 117 (1) fails to become a credit card merchant defined in the Specialized Credit Finance Business Act (limited to a corporation; hereinafter referred to as "credit card merchant"), without good cause;
(b) Where a credit card merchant refuses a transaction by credit card or issues a false credit card sales slip without good cause, in violation of Article 117 (2);
(c) Where a corporation obligated to become a Cash Receipt merchant under Article 117-2 (1) or a corporation designated to become a Cash Receipt merchant under Article 46 (4) of the Value-Added Tax Act fails to become a Cash Receipt merchant under Article 126-3 of the Restriction of Special Taxation Act (hereinafter referred to as "Cash Receipt merchant"), without good cause;
(d) Where a Cash Receipt merchant refuses to issue a Cash Receipt without good cause or issues a false Cash Receipt;
4. Deleted. <by Act No. 14386, Dec. 20, 2016>
(3) The head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office shall determine or correct the tax base and amount of corporate tax under paragraphs (1) and (2) based on the account books or other evidentiary documents: Provided, That he/she may estimate such base and amount of corporate tax, as prescribed by Presidential Decree, where the amount of income cannot be calculated based on the account books or other evidentiary documents on the grounds prescribed by Presidential Decree.
(4) Where any error or omission is found after the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office has determined or corrected the tax base and amount of corporate tax, he/she shall re-correct them immediately.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 67 (Disposal of Income)
In filing a report on the corporate tax base on income for each business year under Article 60 or determining or correcting the tax base of corporate tax under Article 66 or 69, the amount included in the calculation of gross income shall be disposed of as a bonus, dividends, or other outflows from or reserves held by the relevant company to the persons to whom it reverts, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 68 (Special Cases concerning Calculation of Tax Bases and Amount by Estimation)
Subparagraph 1 of Article 13 and Article 57 shall not apply where the tax base and amount of corporate tax is estimated under the proviso to Article 66 (3): Provided, That this shall not apply where such tax base and amount are estimated, as prescribed by Presidential Decree, since the account books or other evidentiary documents are destroyed by a natural disaster or on other grounds.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 69 (Determination as to Occasional Imposition)
(1) Where the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office deems that a domestic corporation is likely to evade corporate tax in the business year due to the grounds prescribed by Presidential Decree (hereafter referred to as "grounds for occasional imposition" in this Article), he/she may occasionally impose corporate tax on the domestic corporation (hereinafter referred to as "occasional imposition"). In such cases, the corporation shall also file a report on income for each business year under Article 60.
(2) For purposes of paragraph (1), the period from the start date of the business year to the date on which the grounds for occasional imposition arise, shall be the period for occasional imposition: Provided, That the grounds for occasional imposition have arisen before the deadline for filing a report on the tax base, etc. under Article 60 for the immediately previous business year (excluding where a report on the tax base for the immediately previous year is filed), the period for occasional imposition shall be the period from the start date of the immediately previous business year until the day the grounds for occasional imposition have arisen.
(3) Matters necessary for occasional imposition under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 70 (Notification of Tax Base and Amount of Tax)
Where the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office determines or corrects the tax base and amount of corporate tax on income for each business year of a domestic corporation under Article 53 or 66, he/she shall notify the relevant domestic corporation thereof, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
Subsection 2 Collection, Refund, etc. of Tax
 Article 71 (Collection and Refund)
(1) Where a domestic corporation fails to pay all or part of tax payable as corporate tax on income for each business year under Article 64, the head of the tax office having jurisdiction over the place of tax payment shall collect the unpaid corporate tax in accordance with the National Tax Collection Act. <Amended by Act No. 11607, Jan. 1, 2013>
(2) Where a domestic corporation fails to pay all or part of interim tax payable under Article 63, the head of the tax office having jurisdiction over the place of tax payment shall collect the unpaid interim tax in accordance with the National Tax Collection Act: Provided, That where the corporation which fails to pay interim tax falls under the proviso to Article 63 (1), the head of the tax office shall determine and collect the interim tax in accordance with the National Tax Collection Act. <Amended by Act No. 11607, Jan. 1, 2013>
(3) Where a person liable for withholding referred to in Article 73 fails to withhold tax or to pay withheld tax by the payment deadline, the head of the tax office having jurisdiction over the place of tax payment shall, without delay, collect the sum of the amount of tax to be withheld and paid by a person liable for withholding and additional tax added under Article 47-5 (1) of the Framework Act on National Taxes from the person liable for withholding as corporate tax: Provided, That where the person liable for withholding has failed to withhold tax and the relevant tax obligor has paid corporate tax, the head of such tax office shall only collect additional tax from the person liable for withholding. <Amended by Act No. 11128, Dec. 31, 2011>
(4) Where the amount of corporate tax collected as interim payment, occasionally imposed, or withheld under Article 63, 69, or 73 exceeds the amount of corporate tax on income for each business year (including additional tax), the head of the tax office having jurisdiction over the place of tax payment shall refund the excess or appropriate it for national taxes, surcharges, or disposition fees for collecting taxes in arrears under Article 51 of the Framework Act on National Taxes.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 72 (Refund by Retroactive Deduction of Losses)
(1) Where a small and medium enterprise under Article 25 (1) 1 has losses incurred for each business year as prescribed in Article 14 (2), it may apply for a refund of the amount calculated, as prescribed by Presidential Decree, up to the limit of corporate tax (referring to the amount of corporate tax prescribed by Presidential Decree) imposed on income during the business year immediately preceding the business year in which such losses incurred. In such cases, such losses shall be construed as the deducted amount in applying subparagraph 1 of Article 13.
(2) A domestic corporation which intends to obtain a refund of corporate tax under paragraph (1) shall file an application to the head of the tax office having jurisdiction over the place of tax payment until the filing deadline specified in Article 60, as prescribed by Presidential Decree.
(3) Upon receipt of an application under paragraph (2), the head of the tax office having jurisdiction over the place of tax payment shall, without delay, determine the amount of tax to be refunded and refund it under Articles 51 and 52 of the Framework Act on National Taxes.
(4) Paragraphs (1) through (3) shall apply only when a domestic corporation files a report on the tax base and amount of the corporate tax on income for the business year in which the losses incur and for the immediately preceding business year by the filing deadline specified in Article 60.
(5) In any of the following cases, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount computed by adding an amount equivalent to the interest calculated, as prescribed by Presidential Decree, to the amount of tax to be refunded (the amount equivalent to the tax amount over-refunded in cases of subparagraphs 1 and 2) as corporate tax for the business year in which the relevant losses have been incurred: <Amended by Act No. 11607, Jan. 1, 2013>
1. Where losses have decreased after correcting the tax base and the amount of corporate tax for the business year in which the losses incurred after corporate tax was refunded, as prescribed in paragraph (3);
2. Where the amount of tax to be refunded has decreased as a result of the rectification of the tax base and tax amount for corporate tax for the business year immediately before the business year in which the losses were incurred;
3. Where a corporation, other than small and medium enterprises defined in Article 25 (1) 1, has received a refund of corporate tax.
(6) Matters concerning the calculation of the amount of tax to be refunded by retroactive deduction of losses and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 72-2 Deleted. <by Act No. 14386, Dec. 20, 2016>
 Article 73 (Withholding)
(1) When a person (hereafter referred to as "person liable for withholding" in this Article) pays a domestic corporation any of the following amounts (including revenues of a corporation that operates the financial insurance business, but excluding those prescribed by Presidential Decree, such as income payable to financial companies, etc. prescribed by Presidential Decree which is prescribed by Presidential Decree and income on which corporate tax is not imposed or exempt), he/she shall withhold corporate tax equivalent to the amount calculated by applying the tax rate of 14/100 (25/100 in the case of profits accruing from a non-business loan referred to in Article 16 (1) 11 of the Income Tax Act) to the amount payable and shall pay it at the tax office having jurisdiction over the place of tax payment, etc. by no later than the tenth day of the month following the month in which the date of collection falls: <Amended by Act No. 10423, Dec. 30, 2010>
1. The amount of interest income referred to in Article 127 (1) 1 of the Income Tax Act;
2. The amount of dividend income referred to in Article 127 (1) 2 of the Income Tax Act (limited to profits from an investment trust (hereafter referred to as "investment trust" in paragraph (8)) referred to in the Financial Investment Services and Capital Markets Act among the profits from collective investment schemes referred to in Article 17 (1) 5 of the Income Tax Act).
(2) The amount of income referred to in the subparagraphs of paragraph (1) shall be deemed paid to no one at the time such amount of income reverts to any piece of investment trust property under the Financial Investment Services and Capital Markets Act in applying the same paragraph. <Amended by Act No. 10423, Dec. 30, 2010>
(3) Deleted. <by Act No. 9267, Dec. 26, 2008>
(4) Any acts done by a person representing, or commissioned by, a person liable for withholding shall be deemed the acts done by the principal or a commissioning person within the scope of the delegation or commission for purposes of paragraph (1). <Amended by Act No. 10423, Dec. 30, 2010>
(5) Where a financial company, etc. prescribed by Presidential Decree assumes or trades bills or debt certificates issued by a domestic corporation (including a resident; hereafter the same shall apply in this paragraph) or brokers or makes such transactions on behalf of the corporation pursuant to paragraph (1), the financial company, etc. shall be deemed to have the agency or commission relationship with the domestic corporation for purposes of paragraph (1). <Amended by Act No. 10423, Dec. 30, 2010>
(6) Where a foreign corporation pays a domestic corporation income specified in paragraph (1) 1 and 2 from bonds or securities issued by the foreign corporation, a person who acts as an agent of the foreign corporation for such payment or a person to whom the authority for such payment is delegated or entrusted in the Republic of Korea shall withhold the corporate tax on the income under paragraph (1). <Newly Inserted by Act No. 11607, Jan. 1, 2013>
(7) Any person liable for withholding prescribed by Presidential Decree, in consideration of the number of regular employees and categories of business, may pay the withheld corporate tax by the tenth day of the month following the last month of the semiannual period which includes the withholding date, as prescribed by Presidential Decree, notwithstanding paragraph (1). <Amended by Act No. 10423, Dec. 30, 2010>
(8) Where a domestic corporation sells (including brokering, arranging, or other cases prescribed by Presidential Decree, but excluding trading of repurchase bonds, etc. or other cases prescribed by Presidential Decree; hereafter the same shall apply in this Article and Article 74) bonds, etc. under Article 46 (1) of the Income Tax Act or beneficiary certificates of an investment trust (excluding any bonds, securities, etc. prescribed by Presidential Decree which is untaxed or exempt from the corporate tax; hereinafter referred to as "bonds, etc. subject to withholding tax") during the calculation period of the interest and discounts accrued or generated from such bonds, etc. and the profits from the investment trust (hereafter referred to as "interest, etc." in this paragraph and Article 98-3), the domestic corporation shall withhold the corporate tax from the interest, etc. accruing during the holding period of the bonds, etc. subject to withholding tax, as prescribed by Presidential Decree, on behalf of the person liable for withholding. In such cases, this Act shall apply to such corporation, deeming it a person liable for withholding. <Amended by Act No. 10423, Dec. 30, 2010>
(9) In applying paragraph (1), (2), (4), (5), (6), (7), or (8), the timing for payment of interest income, scope and calculation of the amount of income subject to withholding corporate tax, calculation and payment of withholding tax, scope of persons liable for withholding, calculation of the holding period of bonds, etc. subject to withholding tax, and other related matters shall be prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11607, Jan. 1, 2013>
 Article 74 (Issuance of Withholding Receipts)
(1) Where a person liable for withholding withholds corporate tax from a tax obligor under Article 73, the person liable for withholding shall issue a withholding receipt to the tax obligor, as prescribed by Presidential Decree.
(2) In applying paragraph (1), the relevant corporation shall be deemed a tax obligor when a person liable for withholding has paid the corporate tax on the amount equivalent to the interest accruing from the sale of bonds, etc. subject to withholding tax pursuant to Article 73 (8) in the capacity of the tax obligor.
(3) Matters necessary for issuing withholding receipts under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 75 (Non-Collection of Small Amounts)
Where the amount of corporate tax withheld under Article 73 (1) is less than 1,000 won, such corporate tax shall not be collected. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76 (Penalty Tax)
(1) Where a domestic corporation fails to fulfill the obligation to keep books of accounts and to make entries in the books pursuant to Article 112 when corporate tax on income for each business year is collected under Article 71, the head of the tax office having jurisdiction over the place of tax payment shall collect, as corporate tax, the calculated amount of tax (excluding the amount of corporate tax on capital gains on the transfer of land, etc., under Article 55-2, the amount of corporate tax on unappropriated earnings under Article 56 and the amount of corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act; the same shall apply hereafter in this paragraph) determined by the head of the tax office having jurisdiction over the place of tax payment, plus an amount equivalent to 20/100 thereof (referring to the amount equivalent to 7/10,000 of the revenue where such amount is less than 7/10,000 of the revenue of the relevant corporation or where the calculated amount of tax is nil): Provided, That the same shall not apply to non-profit domestic corporations. <Amended by Act No. 10423, Dec. 30, 2010; Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
(2) Deleted. <by Act No. 11128, Dec. 31, 2011>
(3) In any of the following circumstances, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount equivalent to 5/1,000 of the par value of the stocks, etc., (referring to an amount calculated by dividing the capital of a corporation that issues non-par value stocks by the total number of issued stocks in cases of the non-par value stocks: the same shall apply hereafter in this Article) held by the relevant shareholders, etc., or the investment value, from a domestic corporation obligated to submit a detailed statement on shareholders, etc., (referred to as "detailed statement" hereafter in this paragraph) pursuant to Article 109 (1) or the latter part of Article 111 (1), in addition to the corporate tax for the business year in which the date of establishment falls. In such cases, the penalty tax shall be collected although the calculated amount of tax is nil: <Newly Inserted by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. Where it fails to submit the detailed statement;
2. Where it submits the detailed statement which omits all or some of details of the shareholders, etc.;
3. Where the detailed statement submitted is found unclear with regard to the descriptions prescribed by Presidential Decree.
(4) Deleted. <by Act No. 9267, Dec. 26, 2008>
(5) Where a corporation (excluding any corporation prescribed by Presidential Decree) is provided with goods or services in connection with its business from a business operator prescribed by Presidential Decree and fails to receive an evidentiary document referred to in any subparagraph of Article 116 (2) or receives a false evidentiary document, except in cases to which the proviso to the same paragraph is applied, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount equivalent to 2/100 of the amount for which it fails to receive an evidentiary documents or receives a false evidentiary document, in addition to the corporate tax. In such cases, the penalty tax shall be collected although the calculated amount of tax is nil. <Amended by Act No. 10423, Dec. 30, 2010>
(6) Where any change occurs in relation to stocks, etc., during a business year and a domestic corporation obligated to submit a detailed statement of changes in stocks, etc., pursuant to Article 119 (referred to as "detailed statement" hereafter in this Article) falls under any of the following cases, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount equivalent to 1/100 of the par value or investment value of the stocks, etc, the detailed statement on which is not submitted or is omitted or unclearly submitted, in addition to the corporate tax. In such cases, the penalty tax shall be collected although the calculated amount of tax is nil: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 14386, Dec. 20, 2016>
1. Where it fails to submit the detailed statement;
2. Where it submits a statement which omits the status of changes in stocks, etc.;
3. Where the detailed statement submitted is found unclear with regard to the descriptions prescribed by Presidential Decree.
(7) In either of the following circumstances, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount added to the amount specified in either of the following subparagraphs, as corporate tax, from a domestic corporation obliged to submit a payment statement pursuant to Article 120 or 120-2 or Article 164 or 164-2 of the Income Tax Act. In such cases, the penalty tax shall be collected although the calculated amount of tax is nil. <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11128, Dec. 31, 2011; Act No. 12850, Dec. 23, 2014; Act No. 14386, Dec. 20, 2016>
1. Where the domestic corporation fails to submit the relevant payment statement by deadline: 1/100 of the payment for which the statement has not been submitted (or 5/1,000 of the payment, if the statement is submitted within three month after the deadline);
2. Where the payment statement submitted is found unclear with regard to the descriptions prescribed by Presidential Decree, or if the amount stated on the payment statement submitted is untrue: 1/100 of the payment stated on the unclear or untrue statement.
(8) Deleted. <by Act No. 11128, Dec. 31, 2011>
(9) In any of the following cases, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount to which any of the following amounts shall be added, as corporate tax, from a corporation (excluding any corporation prescribed by Presidential Decree). In such cases, the penalty tax shall be collected if the calculated amount of tax is nil, but the foregoing shall not apply to the portion on which penalty tax is imposed under any provision of paragraph (5) or Article 60 (2), (3), and (5) through (7) of the Value-Added Tax Act: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013; Act No. 11873, Jun. 7, 2013; Act No. 12850, Dec. 23, 2014; Act No. 14386, Dec. 20, 2016; Act No. 15222, Dec. 19, 2017>
1. Where all or some matters to be stated, as prescribed by Presidential Decree, on the invoice, etc., issued under Article 121 (1) or (2) are not stated thereon, or are falsely stated (excluding the portions to which subparagraph 2 shall apply): 1/100 of the supply value;
2. Where an aggregate invoice for each supplier or purchaser referred to in Article 121 (5) is not submitted by the deadline specified by the same Article or where all or some matters to be stated, as prescribed by Presidential Decree, on such aggregate invoice are not stated thereon or are falsely stated (excluding the selling price or purchase price for the portion to which subparagraph 4 shall apply): 5/1,000 of the supply value;
3. Where an aggregate tax invoice for each supplier referred to in Article 120-3 (1) is not submitted by the deadline specified by the same Article or where all or some matters to be stated, as prescribed by Presidential Decree, are not stated or are falsely stated on such aggregate tax invoice for each supplier (excluding the purchase price for the portion to which subparagraph 4 shall apply): 5/1,000 of the supply value;
4. In any of the following cases: 2/100 of the supply value: Provided, That the applicable rate shall be 1/100 in applying item (a), where any invoice other than an electronic invoice has been issued, although no electronic invoice was issued pursuant to the latter part of Article 121 (1), and where an invoice has been issued pursuant to Article 121 (1) or (2) by the 25th day of the month immediately following the end of the business year in which the relevant goods or services were supplied, after the deadline for issuing an invoice under Article 121 (8):
(a) Where a person who supplied goods or services fails to issue an invoice, etc. under 121 (1) or (2) (hereafter referred to as "invoice, etc" in this subparagraph) by the deadline for issuing the invoice under Article 121 (8);
(b) Where a person issues an invoice, etc., without providing goods or services;
(c) Where a person is issued an invoice, etc., without being provided with goods or services;
(d) Where a corporation that has actually provided goods or services issues an invoice, etc., under the name of a corporation that has not provided goods or services;
(e) Where a person who has been provided with goods or services and is issued an invoice, etc., under the name of a corporation, other than the corporation which has actually provided goods or services;
5. Where a detailed statement of electronic invoices issued is transmitted to the Commissioner of the National Tax Service by the eleventh day of the month immediately after the end of the business year in which goods or services were supplied after the deadline specified in Article 121 (7) (excluding the portion to which subparagraph 4 shall apply): 5/1000 of the supply value: Provided, That 1/1000 shall apply to the goods or services supplied on or before December 31, 2016;
6. Where a detailed statement of electronic invoices issued is not transmitted to the Commissioner of the National Tax Service by the eleventh day of the month immediately after the end of the business year in which goods or services were supplied after the deadline specified in Article 121 (7) (excluding the portion to which subparagraph 4 shall apply): 1/100 of the supply value: Provided, That 3/1000 shall apply to the goods or services supplied on or before December 31, 2016.
(10) Where a corporation that shall issue a receipt for a donation (referred to as “donation receipt” hereafter in this paragraph and Article 112-2), which a domestic corporation needs to include its donation in deductible expenses pursuant to Article 24 or a resident or a non-resident referred to in Article 121 (2) or (5) of the Income Tax Act needs to include his/her donation in incurred expenses or to have a tax credit granted on his/her donation, issues such donation receipt with an incorrect description therein (including where a receipt is issued without any essential description, such as the donated amount or the donor’s personal information) or fails to prepare and keep statements of receipts issued to each donor in accordance with Article 112-2 (1), the head of the tax office having jurisdiction over the place of tax payment shall collect any of the following amounts, in addition to the calculated or determined amount of tax. In such cases, the penalty tax shall be collected although the calculated or determined amount of tax is nil, but subparagraph 2 shall not apply where the penalty tax is imposed on the ground that a person fails to fulfill its obligation to submit a report under Article 78 (3) of the Inheritance Tax and Gift Tax Act or fails to fulfill its obligation to prepare and keep the books of accounting about donated assets under paragraph (5) of the same Article: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11607, Jan. 1, 2013; Act No. 12166, Jan. 1, 2014>
1. In cases of a donation receipt:
(a) Where the donated amount stated on a receipt is false: An amount equivalent to 2/100 of the difference [referring to the difference between the amount actually stated on the receipt (the amount of donation that the person to whom such donation receipt was issued includes as a deductible expense or a necessary expense or applies for a tax credit on the donation, if the receipt has no amount) and the amount that should have been stated on the receipt];
(b) In cases other than those falling under item (a), such as where personal information, etc., of the donor is stated falsely on receipt: An amount equivalent to 2/100 of the amount stated in the receipt;
2. In cases of a detailed statement of receipts issued to each donor: An amount equivalent to 2/1,000 of the amount for which the statement has not been prepared and kept.
(11) Where a credit card merchant refuses a transaction by credit card or issues a false credit card sales slip, the head of the competent tax office shall additionally collect, as corporate tax, an amount (it shall be five thousands won if the amount is less than five thousand won) equivalent to 5/100 the amount, the payment of which by credit card is refused for each transaction, or of the amount (referring to the difference between the issued amount and the actually transacted amount) with relation to which a false credit card sales slip is issued, which is notified by the head of the competent tax office with respect to the transactions made in the relevant business year under Article 117 (4). In such cases, the penalty tax shall be collected although the calculated amount of tax is nil. <Amended by Act No. 10423, Dec. 30, 2010>
(12) Where a corporation obligated to become a Cash Receipt merchant pursuant to Article 117-2 (1) fails to become a Cash Receipt merchant, or a Cash Receipt merchant refuses to issue a Cash Receipt for the amount of at least 5,000 won for each transaction or issues a false Cash Receipt, any of the following amounts shall be additionally collected as corporate tax. In such cases, the penalty tax shall be collected although the calculated amount of tax is nil: <Amended by Act No. 10423, Dec. 30, 2010>
1. Where it fails to become a Cash Receipt merchant: An amount calculated by multiplying an amount equivalent to 1/100 of the revenue generated in the business year, for which it has failed to become such merchant (limited to the revenue generated from the type of business prescribed by Presidential Decree if the corporation runs at least two types of business) by the ratio calculated, as prescribed by Presidential Decree, in consideration of the period in which it was not such a merchant;
2. Where it refuses to issue a Cash Receipt or issues a false Cash Receipt: An amount (it shall be five thousand won where the amount is less than five thousand won) equivalent to 5/100 of each amount for which the issuance of the Cash Receipt is refused, or of each amount for which a false Cash Receipt is issued (referring to the difference between the issued amount and the actually transacted amount), which is notified by the head of the competent tax office with respect to the transactions made in the relevant business year under the latter part of Article 117-2 (6).
(13) Where a domestic corporation that shall submit a statement of retained earnings of a specific foreign corporation under subparagraph 3 of Article 20-2 of the Adjustment of International Taxes Act (referred to as “statement” hereafter in this paragraph) fails to submit the statement by the deadline for submission or descriptions of a statement submitted are wholly or partially omitted or a statement submitted is found unclear with regard to the descriptions specified by Presidential Decree, the head of the tax office having jurisdiction over the place of tax payment shall collect an amount equivalent to 5/1,000 of the retained earnings, distributable by the specific foreign corporation, as corporate tax. In such cases, the penalty tax shall be collected although the calculated amount of tax is nil. <Newly Inserted by Act No. 12166, Jan. 1, 2014>
(14) If a domestic corporation subject to confirmation of compliant filing fails to submit a certificate of confirmation of compliant filing to the head of the tax office having jurisdiction over the place of tax payment, within four months from the end of the month immediately following the end of each business year, in violation of Article 60-2 (2), an amount calculated by multiplying the calculated amount of corporate tax by 5/100 (hereafter referred to as "penalty tax for failure to submit a certificate of confirmation of compliant filing" in this paragraph) shall be added to the tax amount to be paid. If the calculated amount of corporate tax in such cases is corrected to an amount greater than 0 under Article 66, the penalty tax for failure to submit a certificate of confirmation of compliant filing shall be added to the tax amount to be paid. <Newly Inserted by Act No. 15222, Dec. 19, 2017>
CHAPTER II-2 (Articles 76-2 through 76-7) Deleted.
CHAPTER II-3 CORPORATE TAX ON INCOME FOR EACH CONSOLIDATED BUSINESS YEAR
SECTION 1 Common Provisions
 Article 76-8 (Application, etc. of Consolidated Tax Return System)
(1) A domestic corporation that wholly controls another domestic corporation (excluding a corporation prescribed by Presidential Decree, such as a non-profit corporation; hereafter referred to as "wholly-owning parent corporation" in this paragraph) and the other domestic corporation (excluding a corporation prescribed by Presidential Decree, such as a corporation in the process of liquidation; hereafter referred to as "wholly controlled subsidiary" in this Chapter) may apply the consolidated tax return system with approval of the commissioner of the competent regional tax office having jurisdiction over the place of tax payment of the wholly-owning parent corporation, as prescribed by Presidential Decree. In such cases, if wholly-controlled subsidiaries are two or more, all relevant corporations shall apply the consolidated tax return system. <Amended by Act No. 11607, Jan. 1, 2013>
(2) The business year of each consolidated corporation to which the consolidated tax return system applies under paragraph (1) shall coincide with the consolidated business year. In such cases, the period of a consolidated business year shall not exceed one year, and Article 7 shall apply mutatis mutandis to changes of a consolidated business year.
(3) In applying paragraph (2), if a domestic corporation that meets the requirements prescribed by Presidential Decree as a wholly controlled subsidiary that cannot make its business year coincide with the consolidated business year because the business year (hereafter referred to as "original business year" in Articles 76-9 and 76-10) is prescribed in statutes, etc, it may apply the consolidated tax return system, deeming the consolidated business year to be the business year of such domestic corporation.
(4) Notwithstanding Article 9 (1), the place of tax payment of a consolidated corporation shall be the place of tax payment of the consolidated parent corporation.
(5) "Wholly control or wholly controlled" used in subparagraph 9 of Article 1 and in this Chapter means cases where a domestic corporation wholly owns (excluding stocks not exceeding 5/100 of the total number of issued stocks prescribed by Presidential Decree, such as stocks, etc. acquired by workers through an employee stock ownership association defined in subparagraph 4 of Article 2 of the Framework Act on Labor Welfare; hereafter the same shall apply in this paragraph) the total number of issued stocks (referring to the total amount of investment in the case of a corporation that is not a stock company; including non-voting stocks; hereafter the same shall apply in this paragraph) of another domestic corporation, and cases where the sum of stocks, etc. of another domestic corporation held by the domestic corporation and its wholly controlled subsidiary is equal to the total number of issued stocks of such another domestic corporation.
(6) If any of the following mergers, divisions, or comprehensive exchanges or transfers of stocks occurs, the consolidated tax payment system may be applied only to the consolidated business year in which the date of merger, division, or exchange or transfer falls, notwithstanding paragraph (2), Articles 76-11 (1) and 76-12 (1): <Amended by Act No. 11128, Dec. 31, 2011>
1. A qualified merger between consolidated parent corporations to which the consolidated tax payment system applies under paragraph (1);
2. Comprehensive exchange or transfer of stocks between consolidated parent corporations to which the consolidated tax payment system applies under paragraph (1) (limited to where the tax deferment is granted under Article 38 of the Restriction of Special Taxation Act);
3. A qualified division of a consolidated parent corporation to which the consolidated tax payment system applies under paragraph (1).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-9 (Revocation of Approval for Applying Consolidated Tax Return System)
(1) In any of the following cases, the commissioner of the competent regional tax office having jurisdiction over the place of tax payment of a consolidated parent corporation may revoke approval for applying the consolidated tax return system, as prescribed by Presidential Decree: <Amended by Act No. 11607, Jan. 1, 2013; Act No. 13555, Dec. 15, 2015>
1. Where the business year of a consolidated corporation does not coincide with the consolidated business year;
2. Where the consolidated parent corporation applies the consolidated tax return system to a domestic corporation which it does not wholly control;
3. Where the consolidated tax return system is not applied to a wholly controlled subsidiary of the consolidated parent corporation;
4. Where it is impracticable to calculate the amount of income of a consolidated corporation based on accounting records or other evidentiary documents on the grounds referred to in the proviso to Article 66 (3);
5. Where there are grounds to occasionally impose corporate tax on a consolidated corporation as prescribed in Article 69 (1);
6. Where the consolidated parent corporation is wholly controlled by another domestic corporation (excluding nonprofit domestic corporations).
(2) Where approval for applying the consolidated tax return system is revoked under paragraph (1) during the period between the consolidated business year for which the application of the consolidated tax return system was approved and the consolidated business year that ends within four years from the start date of the following consolidated business year, each consolidated corporation for which the application of the consolidated tax return system was approved shall include the amount of income or losses in the gross income or deductible expenses for the business year in which the approval for applying the consolidated tax return system is revoked as follows: Provided, That the foregoing shall not apply in extenuating circumstances specified by Presidential Decree: <Newly Inserted by Act No. 13555, Dec. 15, 2015>
1. The amount of income of the relevant corporation, which has been aggregated with losses of other consolidated corporations during the consolidated business years pursuant to Article 76-14 (1): To be included in gross income;
2. The amount of losses of the relevant corporation, which has been aggregated with income of other consolidated corporations during the consolidated business years under pursuant to Article 76-14 (1): To be included in deductible expenses.
(3) The consolidated tax return system shall not apply to any consolidated corporation for which approval for applying the consolidated tax return system is revoked under paragraph (1) in the business year in which the date of revocation falls and to the business year that ends within four years from the start date of the following business year, deeming the same corporation as at the time of application of the consolidated tax return system to be the consolidated parent corporation.
(4) Where approval for applying the consolidated tax return system is revoked under paragraph (1), an amount prescribed by Presidential Decree that reverts to each consolidated corporation among the amounts referred to in Article 76-13 (1) 1 shall be deemed losses referred to in subparagraph 1 of Article 13 of the relevant consolidated corporation.
(5) Where approval for applying the consolidated tax return system is revoked under paragraph (1), the interim tax for each consolidated corporation referred to in Article 76-18 (4) among the consolidated interim tax paid under the same Article shall be deemed the interim tax referred to in Article 64 (1) 2 for purposes of Article 61 (1).
(6) Where approval for a consolidated corporation to which consolidated tax return system applies under Article 76-8 (3) to apply the consolidated tax return system is revoked under paragraph (1), the period from the start date of the consolidated business year in which the date of revocation falls to the end date of the consolidated business year, and the period from the day following the end date of the consolidated business year in which the date of revocation falls, to date preceding the start date of the original business year shall be deemed one business year, respectively.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-10 (Abandonment of Consolidated Tax Return System)
(1) Each consolidated corporation which intends to abandon the application of the consolidated tax return system shall file a report to the commissioner of the competent regional tax office having jurisdiction over the place of tax payment of the consolidated parent corporation three months prior to the beginning of the business year to which it intends to stop applying the consolidated tax return system, as prescribed by Presidential Decree: Provided, That a consolidated corporation shall not abandon the application of the consolidated tax return system during a period from the consolidated business year to which the consolidated tax return system is first applied and to the consolidated business year that ends within four years from the first date of the consolidated business year immediately following the first consolidated business year. <Amended by Act No. 11607, Jan. 1, 2013>
(2) Article 76-9 (3) and (4) shall apply mutatis mutandis where the application of the consolidated tax return system is abandoned under paragraph (1). In such cases, "the business year in which the date of revocation falls" in Article 76-9 (3) shall be construed as "the first business year to which the consolidated tax return system does not apply." <Amended by Act No. 13555, Dec. 15, 2015>
(3) Where a consolidated corporation to which the consolidated tax return system applies under Article 76-8 (3) abandons the application of the consolidated tax return system under paragraph (1), the period from the day following the end date of a consolidated business year in which the filing date of report to the commissioner of the competent regional tax office having jurisdiction over the place of tax payment of the consolidated parent corporation under paragraph (1) falls to the date preceding the start date of the original business year shall be deemed one business year. <Amended by Act No. 11607, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-11 (Addition of Consolidated Subsidiary Corporations)
(1) Where a consolidated parent corporation starts to wholly control another domestic corporation, the domestic corporation shall apply the consolidated tax return system from the consolidated business year following the consolidated business year in which the consolidated parent corporation starts to wholly control the domestic corporation.
(2) Notwithstanding paragraph (1), a domestic corporation wholly controlled by a consolidated parent corporation from the registration date of its establishment shall apply the consolidated tax return system from the business year in which the registration date of establishment falls.
(3) Where any change occurs to a consolidated subsidiary corporation as referred to in paragraphs (1) and (2), the consolidated parent corporation shall file a report thereon with the commissioner of the competent regional tax office having jurisdiction over the place of tax payment within one month from the end date of the period for interim prepayment or the end date of the relevant business year, whichever comes earlier, after the date of change, as prescribed by Presidential Decree. <Amended by Act No. 11607, Jan. 1, 2013; Act No. 12166, Jan. 1, 2014>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-12 (Exclusion of Consolidated Subsidiary Corporations)
(1) A consolidated subsidiary corporation which ceases to be wholly controlled by a consolidated parent corporation or is dissolved shall not apply the consolidated tax return system from the start date of the consolidated business year in which the relevant cause occurs: Provided, That where a consolidated subsidiary corporation is dissolved upon being merged by absorption into another consolidated corporation, it may apply the consolidated tax return system for the business year in which the registration date of the dissolution falls. <Amended by Act No. 11128, Dec. 31, 2011>
(2) Where the application of the consolidated tax return system ceases to be applied under the main sentence of paragraph (1) during the period between the consolidated business year for which the application of the consolidated tax return system was approved and the consolidated business year that ends within four years from the start date of the following consolidated business year, the amount of income or loss shall be included in gross income or deductible expenses for the business year in which the relevant cause occurs as follows: Provided, That the foregoing shall not apply in extenuating circumstances specified by Presidential Decree: <Amended by Act No. 13555, Dec. 15, 2015>
1. The amount of income of a corporation excluded from consolidation (referring to an individual corporation that ceases to apply the consolidated tax return system under the main sentence of paragraph (1); the same shall apply hereafter in this Article), which has been aggregated with the losses of other consolidated corporations under Article 76-14 (1) during consolidated business years: To be included in gross income of the corporation excluded from consolidation;
2. The amount of losses of a corporation excluded from consolidation, which has been aggregated with the income of other consolidated corporations under Article 76-14 (1) during consolidated business years: To be included in deductible expenses of the corporation excluded from consolidation;
3. The amount of income of a corporation, which has been aggregated with the losses of a corporation excluded from consolidation under Article 76-14 (1) during consolidated business years: To be included in gross income of the relevant corporation;
4. The amount of losses of a corporation, which has been aggregated with the income of a corporation excluded from consolidation under Article 76-14 (1) during consolidated business years: To be included in deductible expenses of the relevant corporation.
(3) Articles 76-9 (3) through (6) shall apply mutatis mutandis where the consolidated tax return system is not applied under the main sentence of paragraph (1). <Newly Inserted by Act No. 13555, Dec. 15, 2015>
(4) Where there occurs any changes in consolidated subsidiary corporations as prescribed in paragraph (1), Article 76-11 (3) shall apply mutatis mutandis to filing a report on such change. <Newly Inserted by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 2 Tax Base and Calculation thereof
 Article 76-13 (Tax Base)
(1) The tax base of income for each consolidated business year shall be an amount computed by subtracting the following amounts in sequential order from the income for each consolidated business year: Provided, That the amount deductible from the amount referred to in subparagraph 1 shall not exceed 80/100 of the individually reverted amount of consolidated income under paragraph (3) 1, in cases of a consolidated corporation, excluding the consolidated corporations specified by Presidential Decree, such as small or medium enterprises referred to in Article 5 (1) of the Restriction of Special Taxation Act and enterprises that implement a rehabilitation plan: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 13555, Dec. 15, 2015>
1. Losses (including losses incurred before the application of the consolidated tax return system by a consolidated corporation) incurred in a consolidated business year that began within ten years prior to the start date of each consolidated business year, which was not deducted when the tax base for each consolidated business year (including a business year) was calculated thereafter;
2. The sum of all non-taxable income of each consolidated corporation under this Act and the Restriction of Special Taxation Act;
3. The sum of income deductions of each consolidated corporation under this Act and the Restriction of Special Taxation Act.
(2) "Losses incurred in a consolidated business year" referred to in paragraph (1) 1 means the relevant amount if the income for each consolidated business year under Article 76-14 (1) is less than zero, which are losses included in the tax base reported under Article 60, determined and corrected under Article 66 or reported for revision under Article 45 of the Framework Act on National Taxes, and losses on disposition excluded in deductible expenses when calculating the amount of income of the relevant consolidated business year under the latter part of Article 76-14 (2). <Amended by Act No. 10423, Dec. 30, 2010>
(3) Where losses are deducted under paragraph (1) 1, the following losses shall be deducted up to the amount specified in the relevant subparagraph: <Amended by Act No. 10423, Dec. 30, 2010; Act No. 11128, Dec. 31, 2011>
1. Losses incurred before the application of the consolidated tax return system by a consolidated corporation: The amount of income prescribed by Presidential Decree (referred to as "individually reverted amount of consolidated income" hereafter in this Article) that reverts to the consolidated corporation among income for each consolidated business year;
2. Where a consolidated parent corporation acquires assets of a merged corporation following a qualified merger, losses referred to in subparagraph 1 of Article 13 of the merged corporation (limited to a corporation, other than a consolidated corporation as at the registration date of the merger) as at the registration date of the merger: Income accruing from the business succeeded to from the merged corporation among the individually reverted amount of consolidated income of the consolidated parent corporation;
3. Where a consolidated parent corporation acquires assets of a disappearing divided corporation following a qualified division and merger, the amount that reverts to the business succeeded to by the consolidated parent corporation among the losses referred to in subparagraph 1 of Article 13 of the disappearing divided corporation as at the registration date of the division: Income accruing from the business succeeded to from the disappearing divided corporation among the individually reverted amount of consolidated income of the consolidated parent corporation;
(4) Deleted. <by Act No. 10423, Dec. 30, 2010>
(5) Matters necessary in relation to losses, non-taxable income, and deduction of income deductions referred to in paragraph (1), and other matters, shall be prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
[This Article Newly Inserted by Act No. 9267, Dec. 26, 2008]
 Article 76-14 (Income for Each Consolidated Business Year)
(1) The income of each consolidated corporation for each consolidated business year shall be the aggregate of income or losses calculated in the following order: <Amended by Act No. 11128, Dec. 31, 2011>
1. Calculation of income for each business year by consolidated corporation: Calculation of income or losses for each business year of each consolidated corporation pursuant to Article 14;
2. Exclusion of consolidation adjustment items by consolidated corporation: An amount equivalent to the dividend income of each consolidated corporation that has been excluded from gross income pursuant to Articles 18-2 and 18-3 shall be included in gross income, and an amount equivalent to the donations and entertainment expenses that have been excluded from deductible expenses pursuant to Articles 24 and 25 shall be included in deductible expenses;
3. Adjustment of profits and losses from transactions between consolidated corporations: An amount equivalent to the dividend amount received by a consolidated corporation from another consolidated corporation shall not be included in gross income, an amount equivalent to entertainment expenses paid to another consolidated corporation and an amount equivalent to appropriation for bad debts pursuant to Article 34 established in relation to claims to another consolidated corporation shall not be included in deductible expenses, and income or losses from the transfer of assets prescribed by Presidential Decree, such as fixed assets, shall be excluded from gross income or deductible expenses, as prescribed by Presidential Decree;
4. Allocation of consolidation adjustment items to each consolidated corporation: An amount excluded from gross income or deductible expenses shall be first calculated by applying mutatis mutandis Articles 18-2, 18-3, 24, and 25, deeming a consolidated group to be one domestic corporation and the amount calculated, as prescribed by Presidential Decree, among the calculated amount shall be excluded from gross income or deductible expenses by consolidated corporation.
(2) The following losses on the disposal of assets shall be included in deductible expenses up to the following applicable amounts when the amount of income of the relevant consolidated business year is calculated. In such cases, losses on disposal excluded from deductible expenses shall be construed as losses referred to in Article 76-13 (1) 1 and shall be deducted from the tax base for the following consolidated business year up to the following applicable amounts: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 13555, Dec. 15, 2015>
1. Where a consolidated parent corporation qualifiedly merges (including a qualified division and merger of a consolidated parent corporation as a counterpart corporation to the division and merger) with another domestic corporation (limited to a corporation, other than a consolidated corporation as at the registration date of the merger), losses incurred in the consolidated business year that ends within five years from the registration date of the merger from the disposal of the assets owned by the consolidated parent corporation, the consolidated subsidiary (referred to as "existing consolidated corporation" hereafter in this paragraph), and the merged corporation (including the divided corporation; the same shall apply hereafter in this Article) before the merger: The amount specified in either of the following items (referring to the amount of income prior to the deduction of the relevant loss on disposal, but the foregoing shall not apply to cases to which the latter part of paragraph (2) applies):
(a) The amount of income of the existing consolidated corporation, in cases of the loss of the existing consolidated corporation from the disposal of assets (referring to the amount of income accrued from the business of the consolidated parent corporation and the individually reverted amount of consolidated income of the consolidated subsidiary before the merger);
(b) The amount of income accrued from business transferred by the merged corporation, among the individually reverted amount of consolidated income of the consolidated parent corporation, in cases of the loss incurred from the disposal of assets owned by the merged corporation before the merger;
2. Where the consolidated tax return system is applied to a domestic corporation after it has become a wholly controlled subsidiary of another domestic corporation (excluding where it became a wholly controlled subsidiary on the registration date of establishment), the loss from the disposal of the assets (limited to assets acquired before the consolidated tax return system is applied) accrued during the period between the business year in which the consolidated tax return system is applied and the consolidated business year that ends within four years from the start date of the business year following the business year in which the consolidated tax return system is applied: The amount specified in either of the following items (referring to the individually reverted amount prior to the deduction of the relevant loss from disposal, but the foregoing shall not apply to the cases to which the latter part of paragraph (2) applies):
(a) The individually reverted amount of consolidated income of the consolidated parent corporation, in cases of the loss of the consolidated parent corporation from the disposal of assets;
(b) The individually reverted amount of consolidated income of the consolidated subsidiary, in cases of the loss of the consolidated subsidiary from the disposal of assets.
(3) Matters necessary for calculating the amount allocated to each consolidated corporation among losses for each consolidated business year pursuant to paragraph (1), the amount excluded from gross income or deductible expenses by applying mutatis mutandis Articles 18-3 and 25, deeming a consolidated group to be one domestic corporation, and for including losses on disposal in deductible expenses under paragraph (2) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 3 Calculation of Amount of Tax
 Article 76-15 (Calculated Consolidation Tax Amount)
(1) Corporate tax on income for each consolidated business year shall be computed by applying tax rates prescribed in Article 55 (1) to the tax base prescribed in Article 76-13 (referred to as "amount of calculated consolidation tax" hereafter in this Chapter).
(2) Where a consolidated corporation transfers land, etc., pursuant to Article 55-2 (including where Article 76-14 (1) 3 applies where another consolidated corporation acquires such land, etc. transferred) or where unappropriated earnings referred to in Article 56 or Article 100-32 of the Restriction of Special Taxation Act (referring to the amount specified by Presidential Decree as the earnings calculated without adjusting profits and losses on transactions between consolidated corporations pursuant to Article 76-14), the amount of calculated consolidated tax shall be determined by adding corporate tax on capital gains on the transfer of land, etc. under Article 55-2, corporate tax on unappropriated earnings under Article 56, and corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act to the amount computed under paragraph (1). <Amended by Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
(3) Article 55 (2) shall apply mutatis mutandis to the calculation of corporate tax on the income for each consolidated business year.
(4) Methods for calculating an amount that reverts to each consolidated corporation among the amounts of calculated consolidation tax (referred to as "calculated amount of tax of each consolidated corporation" hereafter in this Chapter) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-16 (Tax Reductions, Exemptions, etc.)
(1) The aggregate of tax reductions or exemptions for each consolidated corporation shall be subtracted from the amount of calculated consolidation tax.
(2) In applying paragraph (1), the amount of tax reductions or exemptions for each consolidated corporation shall be calculated by applying tax credits and tax reductions or exemptions under this Act and the Restriction of Special Taxation Act, deeming the calculated amount of tax of each consolidated corporation to be the calculated amount of tax under Article 55, and Article 132 (1) of the Restriction of Special Taxation Act shall apply to each consolidated corporation, deeming the consolidated group to be one domestic corporation. <Amended by Act No. 13555, Dec. 15, 2015>
(3) Where tax is reduced or exempted when calculating tax reductions or exemptions for each consolidated corporation, matters necessary for calculating the amount of tax to be reduced or exempted and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 4 Reports and Payments
 Article 76-17 (Filing Reports on Consolidated Tax Base, etc.)
(1) A consolidated parent corporation shall report the tax base and amount of corporate tax on the income for the relevant consolidated business year to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within four months from the last day of the month in which the end date of each consolidated business year falls: Provided, That where a consolidated parent corporation or consolidated subsidiary corporation subject to audit by an auditor pursuant to Article 2 of the Act on External Audit of Stock Companies applies for an extension of the filing deadline, as prescribed by Presidential Decree, on the grounds that the settlement of accounts are not finalized because the audit of the relevant business year has not been completed, the filing deadline may be extended by up to one month.
(2) A report filed under paragraph (1) shall be accompanied by the following documents:
1. An adjustment statement on the amount of consolidated income prepared, as prescribed by Presidential Decree;
2. Documents referred to in Article 60 (2) 1 through 3 of each consolidated corporation;
3. Documents prescribed by Presidential Decree, such as the investment and details of transactions between consolidated corporations.
(3) No report filed under paragraph (1) without the accompanying documents referred to in paragraph (2) 1 and 2 shall be deemed a report filed under this Act.
(4) Article 60 (3), (6), (8), and (9) shall apply mutatis mutandis to the filing of a report on the tax base, etc., of a consolidated parent corporation. <Amended by Act No. 13555, Dec. 15, 2015>
(5) Notwithstanding Article 119 (1), a consolidated parent corporation may submit the detailed statement of changes in stocks, etc., (including changes in stocks, etc., of a consolidated subsidiary corporation) referred to in Article 119 (1) by the filing deadline specified in paragraph (1).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-18 (Consolidated Interim Prepayment)
(1) A consolidated parent corporation, the period of each consolidated business year of which, exceeds six months shall pay an amount computed by multiplying six by an amount computed by dividing the amount of calculated consolidation tax (including penalty tax, but excluding corporate tax on capital gains on the transfer of land, etc. under Article 55-2, corporate tax on unappropriated earnings under Article 56, and corporate tax computed by applying special tax provisions for promoting investment and collaborative cooperation under Article 100-32 of the Restriction of Special Taxation Act) determined for the immediately preceding consolidated business year, deeming six months from the commencement date of the relevant business year to be the interim prepayment period, minus the following amounts, by the number of months of the immediately preceding business year (referred to as "consolidated interim tax" hereafter in this Chapter), to the tax office having jurisdiction over the place of tax payment, etc., within two months from the expiration of the consolidated interim prepayment period: Provided, That, if there is no amount of calculated consolidation tax determined for the immediately preceding consolidated business year, or the amount of calculated consolidation tax for the immediately preceding business year has not been determined by the last day of the relevant interim prepayment period, the interim tax shall be calculated and paid under paragraph (3): <Amended by Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
1. The amount of corporate tax reductions or exemptions granted in the immediately preceding consolidated business year (excluding the amount deducted from income);
2. The total amount of withholding tax paid as corporate tax by each consolidated corporation in the immediately preceding consolidated business year.
(2) Where the consolidated tax return system is first applied for purposes of paragraph (1), the total amount of interim tax calculated under Article 63 of each consolidated corporation shall be the consolidated interim tax, and where a consolidated corporation is added under Article 76-11 (1), the total amount of the consolidated interim tax calculated under paragraph (1) and the interim tax calculated under Article 63 of the added consolidated corporation shall be the consolidated interim tax.
(3) Notwithstanding paragraphs (1) and (2), a consolidated parent corporation may pay an amount computed by subtracting the following amounts from corporate tax calculated by applying Article 76-15, deeming the relevant interim prepayment period to be one business year, as consolidated interim tax, to the tax office having jurisdiction over the place of tax payment, etc.:
1. The amount of tax reductions or exemptions granted in the relevant interim tax prepayment period (excluding the amount deducted from income);
2. The total amount of withholding tax paid as corporate tax by each consolidated corporation in the relevant interim prepayment period.
(4) In applying paragraph (1), where a consolidated corporation ceases to be a wholly controlled subsidiary or is dissolved (excluding where the consolidated tax payment system is applied under the proviso to Article 76-12 (1)) before the interim prepayment period expires, the relevant consolidated parent corporation may pay tax after subtracting an amount prescribed by Presidential Decree (referred to as "interim tax by consolidated corporation" hereafter in this Chapter), which reverts to the interim tax of the consolidated corporation. <Amended by Act No. 11128, Dec. 31, 2011>
(5) Articles 63 (6) and 64 (2) shall apply mutatis mutandis to the payment of consolidated interim tax.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-19 (Payment of Consolidated Corporate Tax)
(1) A consolidated parent corporation shall pay an amount computed by subtracting the following amounts of corporate tax (excluding penalty tax) from the amount of calculated consolidation tax, as corporate tax on income for each consolidated business year, to the tax office having jurisdiction over the place of tax payment, etc., by the filing deadline specified in Article 76-17 (1):
1. The amount of tax reductions or exemptions granted for the relevant consolidated business year;
2. The consolidated interim tax for the relevant consolidated business year computed under Article 76-18;
3. The total amount of tax withheld from each consolidated corporation for the relevant consolidated business year pursuant to Article 73.
(2) A consolidated subsidiary corporation shall pay to its consolidated parent corporation an amount computed by adding an amount computed by applying mutatis mutandis Article 76 to the amount computed by subtracting the following amounts from the calculated amount of tax of each consolidated corporation, by the filing deadline referred to in paragraph (1):
1. The amount of tax reductions or exemptions granted to the relevant corporation for the relevant consolidated business year;
2. The interim tax by consolidated corporation for the relevant consolidated business year;
3. The amount of tax withheld from the relevant corporation for the relevant consolidated business year pursuant to Article 73.
(3) Article 64 (2) shall apply mutatis mutandis where paragraph (1) shall apply. <Amended by Act No. 13555, Dec. 15, 2015>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 5 Determination, Correction, Collection, etc.
 Article 76-20 (Determination, Correction, Collection, etc.)
Articles 66 (excluding the proviso to paragraph (3)), 67, 70, 71, and 73 through 75 shall apply mutatis mutandis to determination, correction, collection, and refund of corporate tax on income for each consolidated business year. <Amended by Act No. 14386, Dec. 20, 2016>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-21 (Additional Tax)
A consolidated parent corporation shall pay an amount computed by adding the total amounts calculated by applying mutatis mutandis Article 76 to each consolidated corporation, in addition to the amount of corporate tax on income for each consolidated business year.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 76-22 (Application of Provisions Governing Small and Medium Enterprises)
In calculating the amount of corporate tax on income for each consolidated business year, provisions governing small and medium enterprises under this Act and the Restriction of Special Taxation Act shall apply only where a consolidated group deemed one domestic corporation constitutes the small or medium enterprises referred to in Article 25 (1) 1 (hereafter referred to as "small and medium enterprises" in this Article). In such cases, where a corporation that constitutes a small or medium enterprise in the business year immediately preceding the consolidated business year in which consolidated tax return system first applies ceases to be eligible for the application of the provisions governing small and medium enterprises as the consolidated tax return system applies to the corporation, such provisions governing small and medium enterprises shall apply in the first consolidated business year in which consolidated tax return system applies and until the consolidated business year that ends within three years from the start date of the following consolidated business year.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
CHAPTER III CORPORATE TAX ON LIQUIDATION INCOME OF DOMESTIC CORPORATIONS
SECTION 1 Tax Base and Calculation thereof
 Article 77 (Tax Base)
The tax base of corporate tax on liquidation income of a domestic corporation shall be the amount of liquidation income calculated under Article 79.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 78 (Special Provisions on Taxation on Liquidation Income Accruing from Restructuring of Corporation)
Where a domestic corporation falls under any of the following cases, no corporate tax shall be imposed on its liquidation income:
1. Where a domestic corporation restructures as prescribed in the Commercial Act;
2. Where a corporation established under any special Act restructures to a company as defined in the Commercial Act upon the amendment or repeal of the special Act;
3. Cases prescribed by Presidential Decree where a domestic corporation restructures under any other Act.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 79 (Calculation of Liquidation Income Accruing from Dissolution)
(1) Where a domestic corporation is dissolved (excluding a dissolution by a merger or division), the liquidation income (hereinafter referred to as "liquidation income from dissolution") shall be calculated by deducting the sum of the paid-in capital or investment funds and the surplus funds (hereinafter referred to as "total amount of equity capital") as at the registration date of the dissolution from the value of the residual assets upon dissolution of the corporation.
(2) Where a domestic corporation in the process of liquidation due to a dissolution continues to conduct its business pursuant to Article 229, 285, 287-40, 519, or 610 of the Commercial Act after having distributed some residual assets upon dissolution to stockholders, etc., the liquidation income from dissolution of the domestic corporation shall be calculated by deducting the total amount of its equity capital as at the registration date of the dissolution from the total amount of the residual assets distributed during the period between the registration date of the dissolution and the registration date of the continuation. <Amended by Act No. 13555, Dec. 15, 2015>
(3) In calculating liquidation income from dissolution of a domestic corporation, the amount of corporate tax to be refunded under the Framework Act on National Taxes during the period of liquidation shall be added to the total amount of equity capital of the domestic corporation as at the registration date of the dissolution.
(4) Where a domestic corporation has losses carried forward prescribed by Presidential Decree as at the registration date of the dissolution for purposes of calculating the liquidation income from dissolution of the domestic corporation, an amount equivalent to the losses carried forward shall be offset from the total amount of its equity capital as at the registration date of the dissolution: Provided, That the amount of losses carried forward to be offset shall not exceed the amount of surplus funds among the total amount of equity capital, and if the losses carried forward exceed the surplus funds, such excess losses may be deemed nil.
(5) Where any surplus funds have been transferred into the paid-in capital or investment funds within two years prior to the registration date of the dissolution in calculating the liquidation income pursuant to paragraph (4), the relevant amount shall be deemed not have been transferred into the paid-in capital or investment funds for purposes of the same paragraph. <Newly Inserted by Act No. 11128, Dec. 31, 2011>
(6) In calculating the liquidation income from dissolution of a domestic corporation, the income for each business year accrued during the period of liquidation shall be included in the amount of income for each relevant business year of the corporation.
(7) Articles 14 through 18, 18-2, 18-3, 19, 19-2, 20 through 30, 33 through 38, 40 through 42, 42-2, 43, 44, 44-2, 44-3, 45, 46, 46-2 through 46-5, 47, 47-2, 50, 51, 51-2, 52, 53, 53-2, 53-3, and 54 shall apply mutatis mutandis to the calculation of the liquidation income referred to in paragraph (1) and the amount of income for each business year during the period of liquidation referred to in paragraph (6), except as otherwise expressly provided for in paragraphs (1) through (6). <Amended by Act No. 11128, Dec. 31, 2011>
(8) The calculation of the value of residual assets for the purposes of paragraphs (1) through (7) and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Articles 80 and 81 Deleted. <by Act No. 9898, Dec. 31, 2009>
 Article 82 (Detailed Rules for Calculation of Amount of Liquidation Income)
Except as otherwise expressly provided in this Act, matters necessary for the calculation of the amount of liquidation income of a domestic corporation shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 2 Calculation of Amount of Tax
 Article 83 (Tax Rate)
Corporate tax on liquidation income of a domestic corporation shall be the amount of tax calculated by applying the tax rate stipulated in Article 55 (1) to the tax base stipulated in Article 77.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 3 Reports and Payments
 Article 84 (Final Reports)
(1) A domestic corporation liable to pay corporate tax on liquidation income shall file a report on the corporate tax base and tax amount on liquidation income with the head of the tax office having jurisdiction over the place of tax payment by the following applicable deadlines, as prescribed by Presidential Decree:
1. In cases falling under Article 79 (1): Within three months from the last day of the month in which the date the value of the residual assets prescribed by Presidential Decree is determined falls;
2. In cases falling under Article 79 (2): Within three months from the last day of the month in which the registration date of continuation falls.
(2) A report filed under paragraph (1) shall be accompanied by the following documents:
1. In cases falling under paragraph (1) 1 and 2, a statement of financial position of a dissolved corporation as at the determination date of the value of the residual assets or the registration date of continuation;
2. Other documents prescribed by Presidential Decree.
(3) Paragraphs (1) and (2) shall apply although the amount of liquidation amount is nil.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 85 (Interim Reports)
(1) Where a domestic corporation (excluding a corporation referred to in each subparagraph of Article 51-2 (1)) falls under any of the following cases, it shall file a report thereon with the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within one month from the last day of the month in which the date prescribed in the applicable subparagraph falls: Provided, That subparagraph 2 shall not apply where a corporation liquidates according to the liquidation process prescribed in Article 80 of the State Property Act: <Amended by Act No. 11128, Dec. 31, 2011>
1. Where some residual assets are distributed to stockholders, etc. prior to the determination of the value of the residual assets from dissolution: The date of the distribution;
2. Where the value of the residual assets is not determined by the first anniversary of the registration of the dissolution: The first anniversary.
(2) A reported filed under paragraph (1) shall be accompanied by the statement of financial position as at the registration date of the dissolution and the date of distribution or as at the first anniversary of the registration date of the dissolution, and other documents prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 86 (Payment)
(1) A domestic corporation referred to in Article 79 (1) or (2) which has filed a final report under Article 84 shall pay the amount of tax computed by applying Article 83 to the amount of liquidation income from dissolution, minus the total amount of tax paid under paragraph (3) or (4), as corporate tax at the tax office having jurisdiction over the place of tax payment, etc. by the filing deadline. <Amended by Act No. 10423, Dec. 30, 2010>
(2) Deleted. <by Act No. 9898, Dec. 31, 2009>
(3) For a domestic corporation liable to file a report under Article 85 (1) 1, where the value of the distributed residual assets (the total amount where residual assets have been distributed previously) exceeds the total equity capital as at the registration date of the dissolution, the domestic corporation shall pay the amount of tax computed by applying Article 83 to the excess (where corporate tax has previously been paid on some residual assets previously distributed, the amount of tax after deducting the previously paid amount from the total amount of tax) at the tax office having jurisdiction over the place of tax payment, etc. by the filing deadline. <Amended by Act No. 10423, Dec. 30, 2010>
(4) For a domestic corporation liable to file a report under Article 85 (1) 2, where the estimated value of the residual assets prescribed by Presidential Decree as at the first anniversary of the registration date of the dissolution exceeds the total equity capital as at the registration date of the dissolution, the corporation shall pay the amount of tax calculated by applying Article 83 to the excess at the tax office having jurisdiction over the place of tax payment, etc. by the filing deadline. <Amended by Act No. 10423, Dec. 30, 2010>
SECTION 4 Determination, Correction, and Collection
 Article 87 (Determination and Correction)
(1) Where a domestic corporation fails to file a tax report under Articles 84 and 85, the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office shall determine the tax base and amount of corporate tax on liquidation income for the relevant corporation.
(2) Where any error or omission is found in a report filed by a domestic corporation under Articles 84 and 85, the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office shall correct the tax base and amount of corporate tax on liquidation income for the relevant corporation.
(3) Where any error or omission is found in the determination or correction after the head of the district of tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office has determined or corrected the tax base and amount of corporate tax on liquidation income, he/she shall immediately re-correct such error or omission.
(4) Article 66 (3) shall apply mutatis mutandis to the determination and correction made under paragraphs (1) and (2).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 88 (Notification of Tax Base and Amount)
Where the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office determines or corrects the tax base and amount of corporate tax on liquidation income of a domestic corporation under Article 87, he/she shall notify the relevant corporation or liquidator thereof: Provided, That he/she may give a public notice instead if it is not possible to notify the relevant corporation or liquidator thereof.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 89 (Collection)
(1) Where a domestic corporation fails to fully or partially pay the amount of tax payable as corporate tax on liquidation income under Article 86, the head of the tax office having jurisdiction over the place of tax payment shall collect the unpaid corporate tax in accordance with the National Tax Collection Act. <Amended by Act No. 11607, Jan. 1, 2013>
(2) Where the amount of corporate tax paid under Article 86 or collected under paragraph (1) is less than the amount of corporate tax determined or corrected by the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office under Article 87, the head of the tax office having jurisdiction over the place of tax payment shall collect the corporate tax equivalent to the deficiency.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 90 (Exclusion from Application of Additional Dues to Liquidation Income)
Article 21 of the National Tax Collection Act shall not apply to the collection of corporate tax on liquidation income. <Amended by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
CHAPTER IV CORPORATE TAX ON INCOME OF FOREIGN CORPORATIONS FOR EACH BUSINESS YEAR
SECTION 1 Tax Base and Calculation thereof
 Article 91 (Tax Base)
(1) The corporate tax base on the income of a foreign corporation with a domestic place of business or a foreign corporation that has income referred to in subparagraph 3 of Article 93 for each business year shall be calculated by deducting, in sequential order, the following amounts or income from the total amount of domestic source income (excluding the amount of domestic source income withheld under Article 98 (1), 98-3, 98-5, or 98-6): Provided, That the maximum of the deduction from the amount referred to in subparagraph 1 shall be 80/100 of the income for each business year: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 14386, Dec. 20, 2016>
1. Losses incurred during any business year which began within ten years from the start date of each business year (limited to losses incurred in Korea) which were not deducted in the calculation of the tax base for each business year thereafter. In such cases, losses are those referred to in Article 14 (2) and shall be limited to losses included in the tax base reported, determined, or corrected under Article 60 or 66 which is applied mutatis mutandis under the former part of Article 97 (1), or reported for revision under Article 45 of the Framework Act on National Taxes;
2. Non-taxable income provided for in this Act and other Acts;
3. Income accrued from the international services of ships or aircraft: Provided, That this shall only apply where the country in which the headquarters or main office of the foreign corporation is located accords the same exemption to ships and aircraft of Korean corporations.
(2) For a foreign corporation which does not fall under paragraph (1), the tax base of corporate tax on its income for each business year shall be the amount of domestic source income classified under each subparagraph of Article 93.
(3) The tax base of corporate tax on domestic source income of a foreign corporation falling under paragraph (1), which is withheld under Article 98 (1), 98-3, 98-5, or 98-6, shall be the amount of domestic source income classified under each subparagraph of Article 93. <Amended by Act No. 11128, Dec. 31, 2011>
(4) Paragraph (1) 3 shall also apply to any foreign corporation which has no domestic place of business.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 92 (Calculation of Amount of Domestic Source Income)
(1) The total amount of domestic source income of a foreign corporation under Article 91 (1) for each business year shall be the amount calculated by applying mutatis mutandis Articles 14 through 18, 18-3, 19, 19-2, 20 through 30, 33 through 38, 40 through 42, 42-2, 43, 44, 44-2, 44-3, 45, 46, 46-2 through 46-5, 47, 47-2, 50, 51, 52, 53, 53-2, and 54 of this Act and Article 138 of the Restriction of Special Taxation Act, as prescribed by Presidential Decree: Provided, That it shall be deemed that a merging corporation or a corporation newly incorporated upon division does not succeed to losses of the merged corporation or divided corporation for the purpose of applying mutatis mutandis Article 44-3, 45, 46-3, or 46-4. <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
(2) The amount of domestic source income of a foreign corporation falling under Article 91 (2) and (3) for each business year, other than capital gains on transfer provided in subparagraph 7 of Article 93, shall be the amount under the following subparagraphs: <Amended by Act No. 11128, Dec. 31, 2011>
1. Domestic source income provided in subparagraphs 1 through 6 and 8 through 10 of Article 93 shall be the revenue amount by income provided in each subparagraph (excluding subparagraph 7) of the same Article: Provided, That the domestic source income provided in subparagraph 9 of Article 93 may be replaced by an amount computed by deducting the acquisition value and transfer expenses of the relevant securities verified, as prescribed by Presidential Decree, from the revenue;
2. Where the domestic source income referred to in subparagraph 9 of Article 93 of a foreign corporation with no domestic place of business meets the following conditions, the arm's length price prescribed by Presidential Decree (hereafter referred to as "arm's length price" in this subparagraph) shall be the revenue of the foreign corporation, notwithstanding subparagraph 1:
(a) Income accruing from transactions between a foreign corporation with no domestic place of business and a foreign corporation (including non-residents) having a special relationship prescribed by Presidential Decree with the former foreign corporation;
(b) Prices of transactions provided in item (a) fall short of the arm's length price in circumstances prescribed by Presidential Decree.
(3) The amount of capital gains referred to in subparagraph 7 of Article 93 that are the domestic source income of a foreign corporation falling under Article 91 (2) for each business year shall be the amount calculated by deducting the following amounts from the transfer value of income-generating assets (hereafter referred to as "land, etc." in this Article) referred to in subparagraph 7 of the same Article:
1. The acquisition value: Provided, That if a foreign corporation, to which assets not included in the taxable value of the inheritance tax or gift tax under the Inheritance Tax and Gift Tax Act are contributed, transfers the land, etc. prescribed by Presidential Decree, the acquisition value of such land, etc. by the donator shall be deemed the acquisition value of the foreign corporation;
2. Expenses directly expended to transfer the land, etc.
(4) In applying paragraph (3), the acquisition value and the transfer value shall be based on the actual transaction value, and if the actual transaction value is unclear, such value shall be computed by applying mutatis mutandis Articles 99, 100, and 114 (7) of the Income Tax Act.
(5) In applying paragraph (3), Article 98 of the Income Tax Act shall apply mutatis mutandis to the timing for transfer or acquisition of the relevant assets.
(6) Article 101 of the Income Tax Act shall apply mutatis mutandis to any unfair calculation of capital gains specified in paragraph (3). In such cases, "a related party" shall be construed as "a related party provided in Article 52 (1) of the Corporate Tax Act." <Amended by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 93 (Domestic Source Income of Foreign Corporations)
Domestic source income of a foreign corporation shall be classified as follows: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 13555, Dec. 15, 2015; Act No. 14386, Dec. 20, 2016>
1. The following income, which includes interest income referred to in Article 16 (1) of the Income Tax Act (excluding the income provided for in subparagraph 7 of the same paragraph), other interest on loans and profits from trusts: Provided, That the same shall not apply to interest on any loan directly obtained by an overseas place of business for the overseas place of business of a resident or domestic corporation:
(a) Income received as a payment from the State, a local government, a domestic place of business of a resident, domestic corporation or foreign corporation, or a domestic place of business of a non-resident referred to in Article 120 of the Income Tax Act;
(b) Income received as a payment from a foreign corporation or non-resident, which is substantially related to the domestic place of business of the foreign corporation or non-resident and is included in deductible expenses or incurred expenses for the purpose of calculating the amount of income of such domestic place of business;
2. Dividend income provided for in Article 17 (1) of the Income Tax Act (excluding the income provided for in subparagraph 6 of the same paragraph) that is paid in the Republic of Korea by any domestic corporation, any organization deemed a corporation, or any other domestic source and the amount disposed of as a dividend under Articles 9 and 14 of the Adjustment of International Taxes Act;
3. Income accrued from real estate in the Republic of Korea or real estate rights and mining rights, mining concessions or rights to quarry earth, sand, and rocks, each of which is acquired in the Republic of Korea, or the transfer or lease of rights to use or develop underground water or other management of underground water: Provided, That excluded herefrom shall be capital gains referred to in subparagraph 7;
4. Income accrued from the rental of a ship, aircraft, registered motor vehicles, construction machinery, industrial, commercial or scientific machinery, facilities and equipment, and other tools prescribed by Presidential Decree to a domestic place of business of a resident, domestic corporation or foreign corporation, or a domestic place of business of a non-resident referred to in Article 120 of the Income Tax Act;
5. Income prescribed by Presidential Decree and accrued from any business operated by a foreign corporation (including income taxable as domestic source business income under any tax treaty): Provided, That excluded herefrom shall be income referred to in subparagraph 6;
6. Income accrued by rendering personal services prescribed by Presidential Decree in the Republic of Korea (including the income deemed to have accrued in the Republic of Korea according to a tax treaty by rendering personal services prescribed by Presidential Decree, among personal services rendered abroad). In such cases, where the person provided with the personal services bears expenses prescribed by Presidential Decree, including airfares, in connection with the provision of such personal services, such income means an amount excluding such expenses;
7. Capital gains on a transfer of any of the following assets or rights: Provided, That this shall be limited where the assets or rights which generate such gains are in the Republic of Korea:
(b) Stocks, etc. (referred to as "real estate, stocks, etc." hereafter in this Article) of a domestic corporation, where the aggregate of the following values is at least 50/100 of total assets of that domestic corporation as at the start date of the business year in which the relevant assets are transferred, among stocks, etc. (including depository receipts or preemptive rights issued on the basis of stocks, etc.; the same shall apply hereafter in this Chapter) of such domestic corporation, which have not been listed on any securities market under the Financial Investment Services and Capital Markets Act;
(i) The value of assets referred to in Article 94 (1) 1 and 2 of the Income Tax Act;
(ii) The value calculated by multiplying the value of stocks of another corporation that excessively owns real estate, which is owned by the domestic corporation, by the ratio of real estate owned by that corporation. In such cases, the methods for determining a corporation that excessively owns real estate and for determining the ratio of ownership of real estate shall be prescribed by Presidential Decree.
8. Where any of the following rights, assets, or information (referred to as "rights, etc." hereafter in this subparagraph) are used or the remuneration therefor is paid in the Republic of Korea, the relevant price and the income accrued from the transfer of such rights, etc.: Provided, That where the place of use rule applies, under an agreement for preventing double taxation on income, to determine whether the relevant income is domestic source income, the remuneration for rights, etc., used overseas shall not be deemed domestic source income, regardless of whether it was paid in the Republic of Korea. In such cases, rights requiring registration to exercise thereof, such as patent rights, utility model rights, trademark rights, and design rights (referred to as "patent rights, etc." hereafter in this subparagraph) shall be deemed used in the Republic of Korea, irrespective of whether they were registered in the Republic of Korea, if the relevant patent rights, etc., were registered overseas and have been used for manufacture, sale, etc., in the Republic of Korea:
(a) Copyrights, patent rights, trademark rights, designs, forms, and sketches of academic or artistic works (including movie films) or secret formulae or processes, film and tapes for radio and television broadcasts, and other similar assets or rights;
(b) Information or know-how related to industrial, commercial, or scientific knowledge and experience;
9. Income prescribed by Presidential Decree and accrued from the transfer of any of the following stocks, etc. (including real estate stocks, etc., listed on any securities market under the Financial Investment Services and Capital Markets Act), or other securities (including securities defined in Article 4 of the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply):
(a) Stocks, etc., and other securities issued by a domestic corporation;
(b) Stocks, etc., issued by a foreign corporation (limited to stocks, etc., listed on any securities market under the Financial Investment Services and Capital Markets Act), and other securities issued by a domestic place of business of a foreign corporation;
10. Any of the following, other than those provided for in subparagraphs 1 through 9:
(a) Insurance money, indemnification, or compensation paid in connection with any real property or other assets situated in the Republic of Korea, or business run in the Republic of Korea;
(b) Income prescribed by Presidential Decree as penalties for breach of any contract or compensation for damage paid in the Republic of Korea;
(c) Income accrued from the inheritance of domestic assets;
(d) Prize money, monetary rewards, compensation, and other similar income paid in the Republic of Korea;
(e) Income accrued from buried property discovered in the Republic of Korea;
(f) Income accrued from the transfer of licenses, approval, or rights established by other similar administrative dispositions under laws of the Republic of Korea, and from the transfer of domestic assets, other than real estate;
(g) Prize received based on lottery, gift tickets, or other drawing tickets, and refunds paid to the purchasers of horse-race tickets, winner-betting tickets, bullfighting tickets, or sports promotion tickets, all issued in the Republic of Korea;
(h) Amounts disposed of as other income pursuant to Article 67;
(i) Income accruing from an increase in the value of the stocks, etc., of a domestic corporation that are held by any related party prescribed by Presidential Decree (referred to as "foreign related party" hereafter in Article 98) that arises from capital transactions prescribed by Presidential Decree;
(j) Income from any business operated in the Republic of Korea, from personal services rendered in the Republic of Korea, or from economic benefits received in relation to assets located in the Republic of Korea (excluding the difference, if any, between the amount received for redemption of foreign currency-denominated bonds issued by the State or financial companies, etc., established under any special Act and the issue prices of such bonds) or other similar income prescribed by Presidential Decree, other than those referred to in any of items (a) through (i).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 93-2 Deleted. <by Act No. 10423, Dec. 30, 2010>
 Article 94 (Domestic Place of Business of Foreign Corporation)
(1) Where a foreign corporation has a fixed place for the operation of all or part of its domestic business, the foreign corporation shall be deemed to have a domestic place of business.
(2) A domestic place of business referred to in paragraph (1) includes any of the following places:
1. Branches, offices, or business offices;
2. Shops and other fixed sales places;
3. Workshops, factories, or storages;
4. Places used for building, sites for construction, assembly or installation works, or places used for performing supervisory activities related thereto, for more than six months;
5. Any of the following places where employees provide services:
(a) A place where services are provided for at least six months in total during a 12-month period in which such services continue to be provided;
(b) A place where services are provided for not more than six months in total during a 12-month period in which such services continue to be provided, and similar services are continuously and repeatedly provided for at least two years;
6. Mines, quarries, or places for exploiting and gathering marine natural resources and other natural resources (including what are in the sea floor or undersoil on the tidelands adjacent to the coast of the Republic of Korea outside its territorial waters where the Republic of Korea exercises sovereignty under international laws).
(3) Where a foreign corporation without any fixed places referred to in paragraph (1) operates the business in the Republic of Korea through a person authorized to conclude contracts on its behalf and repeatedly exercise such authority or an equivalent person prescribed by Presidential Decree, the location of the person's place of business (where he/she does not have any place of business, it shall be his/her address, and where he/she does not have any address, it shall be the location of his/her residence) shall be deemed the domestic place of business of the foreign corporation.
(4) A domestic place of business referred to in paragraph (1) shall not include any of the following places:
1. Fixed places used by a foreign corporation only for purchasing assets;
2. Fixed places used by a foreign corporation only for storing or keeping assets not for sale;
3. Fixed places used by a foreign corporation for advertisement, publicity, gathering and providing information, market research, or for performing other preparatory and supporting business activities;
4. Fixed places used by other persons only for processing a foreign corporation's own assets.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 2 Calculation of Amount of Tax
 Article 95 (Tax Rate)
Corporate tax on income for each business year of a foreign corporation provided in Article 91 (1) and a foreign corporation provided in paragraph (2) or (3) of the same Article which have domestic source income provided in subparagraph 7 of Article 93 shall be the amount calculated by applying Article 55 to the tax base prescribed in Article 91 (if there exist corporate tax on capital gains on transfer of land, etc. under Article 95-2, such corporate tax shall be added to the aforementioned corporate tax).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 95-2 (Special Cases concerning Taxation on Capital Gains on Transfer of Land, etc. by Foreign Corporation)
Article 55-2 shall apply mutatis mutandis to the payment of corporate tax on capital gains on transfer of land, etc. of a foreign corporation referred to in Article 91 (1) and a foreign corporation referred to in (2) of the same Article. In such cases, capital gains on transfer of land, etc. of a foreign corporation under Article 91 (2) shall be the amount calculated by applying mutatis mutandis Article 92 (3).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 96 (Special Provisions on Taxation on Domestic Place of Business of Foreign Corporation)
(1) Any domestic place of business of a foreign corporation (excluding non-profit foreign corporations) shall add the amount calculated by applying the tax rate provided in paragraph (3) to the taxable income provided in paragraph (2) (where a remittance of profits are taxable under the tax treaty concluded between the Republic of Korea and the foreign country where the foreign corporation is located, the taxable income shall be the amount of remittance prescribed by Presidential Decree) to the corporate tax calculated under Article 95 and pay it under the tax treaty concluded between the Republic of Korea and the country where the headquarters or main office of such foreign business corporation is located (hereafter referred to as "country of residence" in this Article): Provided, That the same shall not apply where the country of residence of such foreign corporation does not impose the tax on the overseas place of business of a corporation of the Republic of Korea located in such country of residence.
(2) The amount of taxable income referred to in paragraph (1) shall be the amount computed by subtracting each of the following amounts from the amount of income from the relevant domestic place of business for each business year: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 12153, Jan. 1, 2014>
1. The amount of corporate tax calculated under Article 95 less the amount referred to in item (a) but plus the amount referred to in item (b):
(a) Tax credits granted under Article 57 (1) 1 and Article 58 that are applied mutatis mutandis under Article 97 (1), and the amount of tax deducted or exempted under other Acts;
(b) Additional tax provided in Article 76 and Articles 47-2 through 47-5 of the Framework Act on National Taxes or tax paid additionally under this Act or the Restriction of Special Taxation Act;
2. Local corporate income tax;
3. The amount prescribed by Presidential Decree, such as an amount deemed reinvested in business by the relevant domestic place of business;
4. The amount not included in deductible expenses under Article 14 of the Adjustment of International Taxes Act.
(3) The tax rate applied under paragraph (1) shall be the tax rate provided in Article 98 (1) 3, and where tax rates are separately stipulated by the tax treaty concluded between the Republic of Korea and the country of residence of the relevant foreign corporation, the treaty shall be complied with.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
SECTION 3 Report, Payment, Determination, Correction, and Collection
 Article 97 (Report, Payment, Determination, Correction, and Collection)
(1) Except as otherwise expressly provided for in this Section, Articles 57 (1) and (2), 58, 58-3, 59, 60 (excluding any earned surplus settlement statement or deficits settlement statement referred to in paragraph (2) 1 of the same Article), 61, 62, 63 through 71, and 73 through 76 shall apply mutatis mutandis to filing a report, payment, determination, correction, and collection of corporate tax for each business year of a foreign corporation referred to in Article 91 (1) and a foreign corporation referred to in Article 91 (2) or (3) that have domestic source income referred to in subparagraph 7 of Article 93. In such cases, if the corporate tax base on the income of a foreign corporation for each business year calculated under Article 91 (1) includes the income withheld under Article 98 (8) in applying mutatis mutandis Article 64, the relevant amount of withheld tax shall be deemed the amount of tax deducted under Article 64 (1) 4. <Amended by Act No. 11607, Jan. 1, 2013; Act No. 14386, Dec. 20, 2016>
(2) Where a foreign corporation obligated to file a report on the tax base of corporate tax on the income for each business year under paragraph (1) cannot file the report by the filing deadline on the grounds prescribed by Presidential Decree, it may extend the filing deadline after obtaining approval from the head of the tax office having jurisdiction over the place of tax payment or the commissioner of the competent regional tax office, as prescribed by Presidential Decree, notwithstanding paragraph (1).
(3) When a foreign corporation which obtains approval to extend the filing deadline under paragraph (2) pays the amount of tax it has reported, it shall add the amount calculated by applying the interest rate prescribed by Presidential Decree, in consideration of the interest rates charged by financial companies, etc., to the number of extended days.
(4) In calculating the amount to be added under paragraph (3), the number of extended days shall be the number of days from the day following the filing deadline specified under Article 60 until the approval day of extension: Provided, That where a report is filed and payment is made by the extended deadline, it shall be from the day following the filing deadline specified under Article 60 until the day of such report and payment.
(5) Where the amount of the tax withheld under Article 98, 98-3, 98-5, or 98-6 is less than 1,000 won, such tax shall not be collected. <Newly Inserted by Act No. 11607, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 98 (Special Cases concerning Withholding or Collection from Foreign Corporations)
(1) Where any person pays a foreign corporation the amount of domestic source income provided for in subparagraphs 1, 2, and 4 through 10 of Article 93 (excluding any resident or non-resident who pays the amount of income provided for in subparagraph 7 of Article 93) which is not substantially related to the domestic place of business of the foreign corporation or does not revert to the domestic place of business of the foreign corporation (including an amount paid to a foreign corporation with no domestic place of business), he/she shall withhold, as the corporate tax, the following amounts from the income of the relevant foreign corporation for each business year, and pay it at the tax office having jurisdiction over the place of tax payment, etc., as prescribed by Presidential Decree, by the tenth day of the month following the month in which the date of withholding falls, notwithstanding Article 97: Provided, That the same shall not apply to income provided for in subparagraph 5 of Article 93, which is taxable as domestic source business income under the applicable tax treaty: <Amended by Act No. 11607, Jan. 1, 2013; Act No. 14386, Dec. 20, 2016>
1. Income referred to in subparagraphs 4 and 5 of Article 93: 2/100 of the amount paid;
2. Income referred to in subparagraph 6 of Article 93: 20/100 of the amount paid: Provided, That the rate shall be 3/100 of the amount paid in cases of income accrued by rendering personal services prescribed by Presidential Decree, out of personal services rendered abroad, but that shall be deemed accrued in the Republic of Korea under a tax treaty;
3. Income referred to in subparagraphs 1, 2, 8, and 10 of Article 93: 20/100 of the amount paid (the amount prescribed by Presidential Decree in cases of the income specified in subparagraph 10 (c) of Article 93): Provided, That it shall be 14/100 of the amount paid in cases of the interest income accrued from bonds issued by the State, a local government, or a domestic corporation among the income specified in subparagraph 1 of Article 93;
4. Income referred to in subparagraph 7 of Article 93: 10/100 of the amount paid: Provided, That if the acquisition value and transfer expenses of the assets transferred are verified, an amount equivalent to 10/100 of the amount paid or an amount equivalent to 20/100 of capital gains on a transfer of such assets, whichever is smaller;
5. Income referred to in subparagraph 9 of Article 93: 10/100 of the amount paid (referring to "arm's length price" provided for in Article 92 (2) 2 in cases falling under the same subparagraph; hereafter referred to as "amount paid, etc." in this subparagraph): Provided, That if the acquisition value and transfer expenses of the relevant securities are verified under the proviso to Article 92 (2) 1, an amount equivalent to 10/100 of the amount paid, etc., or an amount equivalent to 20/100 of the amount calculated under the proviso to the same subparagraph, whichever is smaller.
(2) When it is deemed urgently necessary as volatility expansion of domestic investment funds of foreigners causes unrest in the financial market by hindering the soundness in the foreign exchange sector and there is or likely to have any difficulty in performing monetary policies, the tax rate under paragraph (1) on any of the following incomes among the incomes of a foreign corporation may be reduced or may be zero rated, as prescribed by Presidential Decree. In such cases, the Minister of Strategy and Finance shall report the tax rate to be reduced and the necessity thereof, in advance, to the competent standing committee of the National Assembly: <Amended by Act No. 11128, Dec. 31, 2011>
1. Income accruing from State bonds issued under Article 3 (1) of the State Bond Act and bonds prescribed by Presidential Decree (hereafter referred to as "State bonds, etc." in this Article) among incomes referred to in subparagraph 1 of Article 93;
2. Income accruing from the transfer of State bonds, etc., among the incomes referred to in subparagraph 9 of Article 93.
(3) Deleted. <by Amended by Act No. 11128, Dec. 31, 2011>
(4) Where a person liable for withholding fails to withhold corporate tax from the income of a foreign corporation for each business year under paragraphs (1) and (5) through (12) or fails to pay the withheld corporate tax by the payment deadline specified under paragraph (1), the head of the tax office having jurisdiction over the place of tax payment shall additionally collect, as corporate tax, the amount referred to in Article 47-5 (1) of the Framework Act on National Taxes from the person liable for withholding in the same manner as national taxes are collected. <Amended by Act No. 11128, Dec. 31, 2011>
(5) Any person who pays domestic source income referred to in subparagraph 1, 5, 6, or 8 of Article 93 with foreign loan funds to a foreign corporation with no domestic place of business shall withhold tax from the relevant income pursuant to paragraph (1) each time he/she pays the relevant income to the foreign corporation in accordance with the terms of payment stipulated in the contract, although he/she does not directly pay the income in accordance with the terms of payment stipulated in such contract.
(6) The local agency of a foreign corporation operating a ship or aircraft providing international service which does not fall under Article 94 (3) shall withhold tax from the amount of domestic source income of the foreign corporation under paragraph (1) when it pays the foreign corporation the income accruing from the ship or aircraft providing international service.
(7) Where securities referred to in subparagraph 9 of Article 93 are transferred through an investment trader or investment broker registered under the Financial Investment Services and Capital Markets Act, the investment trader or investment broker shall withhold tax, as prescribed in paragraph (1): Provided, That if outstanding stocks are transferred when stocks are listed as prescribed in the Financial Investment Services and Capital Markets Act, the corporation which has issued such stocks shall withhold the tax.
(8) Any person who pays a foreign corporation an amount of domestic source income accruing from architectural works, construction, the installation or assembly of machines, etc., other works, or the provision of any service for supervision, control, etc. of such works, or any amount of domestic source income earned by providing personal services as referred to in subparagraph 6 of Article 93 (including where such income is classified as business income under a tax treaty) shall withhold the tax, as prescribed in paragraph (1), although the relevant income reverts to the domestic place of business: Provided, That the same shall not apply where the relevant domestic place of business has registered as a business operator under Article 111. <Amended by Act No. 12166, Jan. 1, 2014>
(9) Where domestic source income referred to in paragraph (1) is paid in a foreign country and a person who pays the income has an address, residence, headquarters, main office, or place of business (including the domestic place of business referred to in Article 120 of the Income Tax Act) in the Republic of Korea, paragraph (1) shall apply, deeming that the income payer has paid the relevant domestic source income in the Republic of Korea.
(10) Where domestic source income referred to in Article 93 is paid to a foreign corporation as a result of an auction under the Civil Execution Act or a public sale under the National Tax Collection Act, the person who distributes proceeds from such auction or public sale shall withhold the tax in accordance with paragraph (1) from the amount actually paid to the foreign corporation. <Amended by Act No. 12166, Jan. 1, 2014>
(11) The acts of a person representing or commissioned by a person liable for withholding provided in paragraphs (1) and (5) through (10) shall be deemed the acts of the principal or his/her delegate within the scope of the delegation or commission, to which paragraphs (1) and (5) through (10) shall apply.
(12) Where a financial company, etc., acquires, trades or brokers bills or debt certificates issued by a domestic corporation or makes such transactions on behalf of the financial company, etc., paragraph (11) shall apply, deeming that the financial company, etc., has the agency or commission relationship with the relevant resident.
(13) When any person liable for withholding withholds corporate tax under paragraphs (1) and (5) through (12), he/she shall issue a withholding receipt stating the amount of payment and other necessary matters to the person who receives the income, as prescribed by Presidential Decree.
(14) A domestic corporation which has issued stocks, etc., shall collect the withholding tax on the domestic source income referred to in subparagraph 10 (i) of Article 93 from the foreign-related party who holds such stocks, etc., at the time prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
(15) Detailed methods for withholding under paragraph (14) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 98-2 (Special Cases concerning Reports on, Payment, etc. of Capital Gains, etc. on Transfer of Securities by Foreign Corporation)
(1) Where a foreign corporation with no domestic place of business satisfies the taxation standards stipulated in the relevant tax treaty by transferring stocks or investment certificates of the same domestic corporation on at least two occasions within the same business year (referring to the business year of the domestic corporation which issues the stocks or investment certificates; hereafter the same shall apply in this Article), such foreign corporation shall report and pay an amount equivalent to the withholding tax on gains accruing from the transfer (hereafter referred to as "gains" in this Article) that was not withheld at the time of such transfers, to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within three months from the end date of the business year in which such transfers are made.
(2) Paragraph (1) shall apply mutatis mutandis to the gains of a foreign corporation with a domestic place of business that is not substantially related to or does not revert to the domestic place of business.
(3) Where a foreign corporation with no domestic place of business transfers stocks, investment certificates, or other securities (hereafter referred to as "stocks, etc." in this paragraph) to a non-resident or foreign corporation with no domestic place of business in circumstances prescribed by Presidential Decree, it shall report and pay an amount computed by multiplying gains accrued from the transfer by the rate provided in Article 98 (1) 5 to the head of the tax office having jurisdiction over the place of tax payment by no later than the tenth day of the month that is two months after the month in which such gains are paid, as prescribed by Presidential Decree: Provided, That the foregoing shall not apply where the person who pays the amount of gains accrued from the transfer of stocks, etc. withholds and pays the corporate tax on the domestic source income from the transfer of the relevant stocks, etc. under Article 98.
(4) Where a foreign corporation with no domestic place of business earns any income referred to in subparagraph 10 (c) of Article 93 upon being donated with domestic assets from a non-resident or foreign corporation with no domestic place of business, it shall report and pay the amount computed under Article 98 (1) 3 to the head of the tax office having jurisdiction over the place of tax payment within three months from the last day of the month in which the date it has been donated with the amount referred to in Article 98 (1) 3 falls: Provided, That the foregoing shall not apply where the person who has donated domestic assets withholds and pays the corporate tax on the amount of domestic source income under Article 98. <Newly Inserted by Act No. 11128, Dec. 31, 2011>
(5) Where a foreign corporation fails to report and pay, as prescribed in paragraphs (1) through (4), or underreports the tax base, or underpays tax, the head of the tax office having jurisdiction over the place of tax payment shall collect the payable amount by applying mutatis mutandis Article 66. <Amended by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 98-3 (Special Cases concerning Withholding from Bonds, etc. subject to Withholding Tax of Foreign Corporations)
(1) Any person who pays interest, etc. on bonds, etc. subject to withholding tax to a foreign corporation (referring to a foreign corporation subject to Article 98 (1); hereafter the same shall apply in this Article), or purchases (including brokering, arranging, or other cases prescribed by Presidential Decree, but excluding trading of repurchase bonds, etc. or other cases prescribed by Presidential Decree; hereafter the same shall apply in this Article) bonds, etc. from a foreign corporation before receiving the interest, etc. on such bonds, etc. shall withhold the tax in consideration of the holding period of such bonds, etc., as prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
(2) Deleted. <by Act No. 7317, Dec. 31, 2004>
(3) Any act of the person who acts for a person liable for withholding under paragraph (1) or is commissioned to act for the person liable for withholding shall be deemed an act of the principal or his/her delegate within the scope of the delegation or commission, and is subject to paragraph (1). <Amended by Act No. 10423, Dec. 30, 2010>
(4) Where a financial company, etc. assumes charge of, trades or brokers bonds, etc. subject to withholding tax issued by a resident or foreign corporation or makes such transactions as an agent, the financial company, etc. shall be deemed to have the agency or commission relationship with the person liable for withholding provided in paragraph (1) and a foreign corporation that sells bonds, etc., subject to withholding tax for purposes of paragraph (3). <Amended by Act No. 10423, Dec. 30, 2010>
(5) In applying paragraphs (1) through (4), Article 98 (1) through (3) shall apply mutatis mutandis to the deadline for the payment of the withholding tax and the payment and collection of the additional tax. <Amended by Act No. 10423, Dec. 30, 2010>
(6) In applying paragraph (1), matters necessary for the timing for payment of interest income, calculation of the holding period of bonds, etc., subject to withholding tax, calculation and payment of withholding tax, scope of persons liable for withholding, issuance of withholding receipts, and other matters shall be prescribed by Presidential Decree. <Amended by Act No. 10423, Dec. 30, 2010>
[This Article Newly Inserted by Act No. 6293, Dec. 29, 2000]
 Article 98-4 (Applying for Non-Taxation or Tax Exemption for Foreign Corporations under Tax Treaties)
(1) If a foreign corporation to whom domestic source income referred to in Article 93 (excluding the income referred to in subparagraphs 5 and 6 of the same Article) actually reverts (hereafter in this Article referred to as “real beneficiary”) intends to have such income untaxed or exempted from taxes in accordance with the applicable tax treaty, it shall present an application for non-taxation or tax exemption to the person who pays the domestic source income (hereafter in this Article referred to as “income payer”), and the income payer shall file the application with the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(2) If the domestic source income is paid through a foreign investment scheme specified by Presidential Decree (hereafter in this Article referred to as “foreign investment scheme”) for purposes of paragraph (1), the foreign investment scheme shall receive an application for non-taxation or tax exemption from the real beneficiary and present to the income payer the report prepared by the foreign investment scheme, including a statement thereof, and the application for non-taxation or tax exemption received, and income payer shall file the report and application with the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree.
(3) If an income payer has not received an application for non-taxation or tax exemption from a real beneficiary or a foreign investment scheme or a report from a foreign investment scheme, if an income payer is unable to identify a real beneficiary with the documents received, or if an income payer has any other ground specified by Presidential Decree, the income payer shall withhold the amount specified in any subparagraph of Article 98 (1) without applying for non-taxation or tax exemption.
(4) If a real beneficiary fails to have the income untaxed or exempted from taxes under paragraph (3) but intends to have the income untaxed or exempted from taxes, the real beneficiary or the income payer may file a request for correction with the head of the tax office having jurisdiction over the place of tax payment of the income payer within the five-year period beginning on the last day of the month in which the taxes are withheld under paragraph (3), as prescribed by Presidential Decree. <Amended by Act No. 14386, Dec. 20, 2016>
(5) Upon receipt of a request for correction under paragraph (4), the head of a tax office shall correct the tax base or tax amount or notify the requester that there is no reason to correct it, within six months of the receipt of the request.
(6) Except as otherwise expressly provided for in paragraphs (1) through (5), the methods and procedures for the submission of relevant documents, such as an application for non-taxation or tax exemption and a report by a foreign investment scheme, the duty to preserve the documents presented, the methods and procedures for filing a request for correction, and other matters necessary for non-taxation or tax exemption shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 12166, Jan. 1, 2014]
 Article 98-5 (Special Case concerning Withholding Procedures for Foreign Corporations)
(1) Where a person liable for withholding referred to in Articles 98, 98-2 through 98-4, and 98-6 withholds corporate tax from income referred to in subparagraph 1, 2, 7 (b), 8, or 9 of Article 93 for each business year among the domestic source income of a foreign corporation located in any country and region publicly announced by the Minister of Strategy and Finance, the person liable for withholding shall withhold corporate tax from income by preferentially applying the tax rate referred to in each subparagraph of Article 98 (1), notwithstanding the provisions on non-taxation, tax exemption and restrictive tax rates stipulated in Article 98-4 and the applicable tax treaty: Provided, That the same shall not apply where the Commissioner of the National Tax Service grants prior approval to apply non-taxation, tax exemption and restrictive tax rates under the applicable tax treaty, as prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
(2) Where any corporation (including its agent or tax manager designated under Article 82 of the Framework Act on National Taxes) to which the domestic source income referred to in paragraph (1) reverts intends to apply for the non-taxation, the tax exemption and the restrictive tax rates pursuant to the applicable tax treaty, it may request a correction, as prescribed by Presidential Decree, to the head of the tax office having jurisdiction over the place of tax payment of a person liable for withholding within the five-year period beginning on the last day of the month in which the date of withholding of income under paragraph (1) falls. <Amended by Act No. 14386, Dec. 20, 2016>
(3) Upon receipt of a request for correction under paragraph (2), the head of the tax office shall correct the tax base and amount, or notify the relevant requester of the purport that no reasonable grounds exist to correct the tax base and amount, within six months of the receipt of the request.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 98-6 (Special Cases concerning Withholding Procedures to Apply Restrictive Tax Rates under Tax Treaties to Foreign Corporations)
(1) Where a foreign corporation to which the domestic source income referred to in Article 93 actually reverts (hereafter in this Article referred to as "real beneficiary") intends to apply for the restrictive tax rates stipulated under the tax treaties (hereafter in this Article referred to as "restrictive tax rates"), it shall submit an application of restrictive tax rates to a person liable for withholding referred to in Article 98 (1) (hereafter in this Article referred to as "person liable for withholding"), as prescribed by Presidential Decree.
(2) For purposes of paragraph (1), where the relevant domestic source income is paid through a foreign investment scheme prescribed by Presidential Decree (hereafter in this Article referred to as "foreign investment scheme"), the foreign investment scheme shall receive an application of restrictive tax rates from the relevant real beneficiary and submit a report on the foreign investment scheme to the person liable for withholding, along with the relevant statement.
(3) Where a person liable for withholding falls under the grounds prescribed by Presidential Decree since it fails to receive an application of restrictive tax rates or report on the foreign investment scheme from a real beneficiary or a foreign investment scheme or it cannot identify who the real beneficiary is based on the submitted documents, it shall withhold the amount referred to in the subparagraphs of Article 98 (1) without applying the restrictive tax rates.
(4) Where a real beneficiary to which the restrictive tax rate has not been applied under paragraph (3) intends to have the restrictive tax rate applied, the real beneficiary or the person liable for withholding may file a request for correction with the head of the tax office having jurisdiction over the place of tax payment of the person liable for withholding within the five-year period beginning on the last day of the month in which taxes are withheld under paragraph (3), as prescribed by Presidential Decree. <Amended by Act No. 12166, Jan. 1, 2014; Act No. 14386, Dec. 20, 2016>
(5) Upon receipt of a request for correction under paragraph (4), the head of a tax office shall correct the tax base or tax amount or notify the petitioner that there is no reason to correct it, within six months of the receipt of the request.
(6) Except as otherwise expressly provided for in paragraphs (1) through (5), the methods and procedures for the submission of relevant documents, such as an application of restrictive tax rates and a report on foreign investment schemes, the duty to preserve the documents presented, the methods and procedures for filing a request for correction, and other matters necessary for application of restrictive tax rates shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 11128, Dec. 31, 2011]
 Article 99 (Special Cases concerning Reports on and Payment of Corporate Tax on Income of Foreign Corporation from Personal Services)
(1) A foreign corporation whose income provided in subparagraph 6 of Article 93 is withheld at the tax rate prescribed in Article 98 (1) 2 may file a report on and pay an amount (hereafter referred to as "tax base" in this Article) computed by subtracting expenses proved to be in relation to the income provided in subparagraph 6 of Article 93 accrued during the supply period of services in the Republic of Korea (referring to the period from the date of arrival in the Republic of Korea to the date of departure therefrom, if such period is unclear) from such income to the head of the tax office having jurisdiction over the place of tax payment of the person liable for withholding within three months from the last day of the supply period of services, as prescribed by Presidential Decree.
(2) If any income withheld under Article 98 (1) 2 is included in the tax base in applying paragraph (1), the amount of the withheld tax shall be deducted as the amount of tax paid.
(3) Where a report is filed and payment is made under paragraph (1), Articles 95 and 97 shall apply mutatis mutandis to the method of calculating the amount of tax and tax rates and methods of filing reports, making payment, determinations, corrections, and collection.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
CHAPTER V (Articles 100 through 108) Deleted.
CHAPTER VI SUPPLEMENTARY PROVISIONS
 Article 109 (Reports on Incorporation or Establishment of Corporation)
(1) A domestic corporation shall submit a report on incorporation stating the following matters, along with the detailed statement on shareholders, etc. and documents regarding business registration, etc. prescribed by Presidential Decree, to the head of the tax office having jurisdiction over the place of tax payment within two months from the date of registration for incorporation (if the actual business management place is established, the date of establishment). In such cases, when the domestic corporation has registered its business under Article 111, it shall be deemed to have completed the registration for incorporation: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. The name of the corporation and its representative;
2. The location of its headquarters, main office, or actual business management place;
3. The purpose of business;
4. The date of incorporation.
(2) When a foreign corporation has established a domestic place of business, it shall submit a report on establishment of a domestic place of business, stating the following matters within two months from the date of establishment, along with the statement of financial position as at the date of establishment of the domestic place and other documents prescribed by Presidential Decree, to the head of the tax office having jurisdiction over the place of tax payment. In such cases, a foreign corporation which has established a place of business referred to in Article 94 (3), it may elect to submit a report on establishment of a domestic place of business:
1. The name of the corporation and its representative;
2. The location of its headquarters or main office;
3. The name of a person responsible for operation or management of business run in the Republic of Korea or domestic assets;
4. The purpose and type of domestic business, and types and locations of domestic assets;
5. The start date of domestic business or acquisition date of domestic assets.
(3) Where any details of a report and other documents submitted by a domestic corporation or foreign corporation under paragraphs (1) and (2) are revised, the domestic corporation or foreign corporation shall report such revision to the head of the tax office having jurisdiction over the place of tax payment within 15 days from the date of such revision.
(4) Paragraph (2) shall apply mutatis mutandis to a report filed by a foreign corporation with income provided in subparagraph 3 of Article 93.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 110 (Reports on Start of Profit-Making Business by Non-Profit Corporation)
Where a non-profit domestic corporation or non-profit foreign corporation (limited to a foreign corporation with a domestic place of business) starts new profit-making business (limited to the profit-making business provided in Article 3 (3) 1 and 7), it shall submit a report stating the following matters, along with the statement of financial position of the profit-making business as at the start date of such business and other documents prescribed by Presidential Decree, to the head of the tax office having jurisdiction over the place of tax payment within two months from the start date of the business:
1. The name of the corporation;
2. The location of its headquarters, main office or actual business management place;
3. The names of the representative and the person responsible for management;
4. The proper purpose business;
5. The type of the profit-making business;
6. The start date of the profit-making business;
7. The place of business for the profit-making business.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 111 (Business Registration)
(1) A corporation starting new business shall file for registration of such new business with the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. In such cases, when a domestic corporation files for registration before it files a report on incorporation pursuant to Article 109 (1), it shall submit the detailed statement on shareholders, etc. under the same paragraph. <Amended by Act No. 11607, Jan. 1, 2013>
(2) A business operator who has registered his/her business under the Value-Added Tax Act shall be deemed registered the relevant business under paragraph (1).
(3) Article 8 of the Value-Added Tax Act shall apply mutatis mutandis to a corporation that has registered its business under this Act. <Amended by Act No. 11873, Jun. 7, 2013>
(4) Where a report on incorporation under Article 109 has been filed, an application for business registration shall be deemed filed.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 112 (Keeping Account Books and Making an Entry in Books)
A corporation with tax liability shall make an entry in its account books by the double entry bookkeeping system, and keep and preserve important evidentiary documents related to the account books: Provided, That the foregoing shall apply to a non-profit corporation only if the non-profit corporation engages in any profit-making business specified in Article 3 (3) 1 and 7 (the foregoing shall apply to a foreign non-profit corporation only if it earns domestic source income from such profit-making business). <Amended by Act No. 11607, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 112-2 (Obligation, etc. to Prepare and Keep Detailed Statements of Donation Receipts Issued)
(1) A corporation that issues donation receipts shall prepare a detailed statement of donation receipts issued to each donor in the form prescribed by Presidential Decree and shall keep it for five years from the date on which each donation receipt is issued. <Amended by Act No. 11607, Jan. 1, 2013; Act No. 12166, Jan. 1, 2014>
(2) A corporation that issues donation receipts shall submit a detailed statement of donation receipts for each donor, which it keeps in accordance with paragraph (1), to the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of the tax office having jurisdiction over the place of tax payment, upon receipt of a request therefor. <Amended by Act No. 12166, Jan. 1, 2014>
(3) A corporation that issues donation receipts shall submit a detailed statement of donation receipts, which states the total number of donation receipts issued, the amount of each donation, etc. during the pertinent business year, in the form stipulated by Ordinance of the Ministry of Strategy and Finance to the head of the relevant tax office within six months from the end of the month in which the relevant business year ends. <Amended by Act No. 12166, Jan. 1, 2014>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 113 (Separate Accounting)
(1) A non-profit corporation that operates any profit-making business shall keep separate accounting of assets, liabilities, and profits and losses related to such profit-making business from the accounting of those related to business, other than such profit-making business.
(2) A corporation subject to the application of the Financial Investment Services and Capital Markets Act shall keep separate accounting of the income accruing from the trust estates and other income for the purpose of calculating the amount of income for each business year.
(3) A corporation which merges with another domestic corporation shall keep separate accounting of the assets, liabilities, and profits and losses related to the business succeeded to from a merged corporation from those related to other business for any of the following periods: Provided, That as for a merger made between small and medium enterprises referred to in Article 25 (1) 1 or between corporations engaged in the same business, separate accounting may not be kept: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. Where a corporation has losses referred to in subparagraph 1 of Article 13 as at the registration date of merger, or a corporation intends to deduct losses carried forward of the merged corporation under Article 45 (2): The period during which such losses or losses carried forward are deducted;
2. In other cases: Five years after the merger.
(4) In the case of a division and merger of a domestic corporation, a corporation established through the division, etc. shall keep separate accounting of the assets, liabilities, and profits and losses related to the business succeeded to from the divided corporation, etc. and those related to other business for any of the following periods: Provided, That as for a division and merger made between small and medium enterprises referred to in Article 25 (1) 1 or between corporations engaged in the same business, separate accounting may not be kept: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. Where a corporation intends to deduct losses carried forward of a divided corporation, etc. under Article 46-4 (2): The period during which such losses carried forward are deducted;
2. In other cases: Five years after division.
(5) Where a consolidated parent corporation has merged (including a division and merger in which the consolidated parent corporation is a counterpart corporation to the division and merger) with another domestic corporation (limited to a domestic corporation, other than a consolidated corporation as at the registration date of a merger), it shall keep separate accounting of the assets, liabilities, and profits and losses related to the business succeeded to from the merged corporation (including the divided corporation) from those related to other business for either of the following periods: <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
1. Where a corporation has losses referred to in Article 76-13 (1) 1 as at the registration date of the merger, or intends to deduct losses carried forward of a merged corporation under Article 76-13 (3) 2: The period eligible for the deduction of such losses or carried-forward losses;
2. In other cases: Five years after the merger.
(6) Matters necessary for the method of keeping separate accounting, and for determining as to whether corporations are engaged in the same business under paragraphs (1) through (5), and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 114 Deleted. <by Act No. 6558, Dec. 31, 2001>
 Article 115 Deleted. <by Act No. 9267, Dec. 26, 2008>
 Article 116 (Receipt and Keeping of Evidentiary Documents of Expenditures)
(1) A corporation shall prepare or receive evidentiary documents for all business-related transactions for each business year and keep them for five years from the filing deadline specified under Article 60 expires: Provided, That a corporation that intends to deduct losses incurred in the business year that began before the fifth anniversary of the commencement date of each business year from the income for each business year as prescribed in subparagraph 1 of Article 13 shall keep the evidentiary documents for the business year in which the relevant losses incurred until one year lapses from the filing deadline specified under Article 60 for the business year to which the deducted income reverts.
(2) In cases falling under paragraph (1), where a corporation is supplied with goods or services by a business operator prescribed by Presidential Decree and pays for them, it shall receive and keep any of the following evidentiary documents: Provided, That the same shall not apply to cases prescribed by Presidential Decree: <Amended by Act No. 11873, Jun. 7, 2013>
1. Credit card sales slips issued under the Specialized Credit Finance Business Act (in the case of transactions using things prescribed by Presidential Decree similar to a credit card, it shall include the relevant evidentiary documents; hereafter the same shall apply in Article 117);
2. Cash Receipts;
3. Tax invoices issued under Article 32 of the Value-Added Tax Act;
4. Invoices issued under Article 121 of this Act and Article 163 of the Income Tax Act.
(3) In applying paragraph (2), where a corporation fails to have a tax invoice issued under paragraph (2) 3, the corporation shall be deemed to fulfill its obligation to receive and keep evidentiary documents under paragraph (2) when it issues and keeps a purchaser-issued tax invoice under Article 34-2 (2) of the Value-Added Tax Act. <Amended by Act No. 12166, Jan. 1, 2014; Act No. 15222, Dec. 19, 2017>
(4) In applying paragraphs (1) through (3), matters necessary for the receipt and keeping of evidentiary documents shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 117 (Obligation, etc. to Become Credit Card Merchants and to Issue Credit Card Sales Slips)
(1) Where the Commissioner of the National Tax Service deems it necessary for tax management of a corporation that meets the requirements prescribed by Presidential Decree in consideration of business types, etc., which supplies goods or services mainly to consumers, other than business operators, he/she may guide it to become a credit card merchant.
(2) No credit card merchant (referring to a merchant who has become such merchant upon meeting the requirements referred to in paragraph (1); hereafter the same shall apply in this Article, Articles 66 (2) 3 and 76 (11)) shall issue any false credit card sales slip after supplying goods and services in relation to the business, on grounds that transactions are made by credit card: Provided, That a business operator prescribed by Presidential Decree, such as a superstore, issues a credit card sales slip after aggregating the sales of other business operators by the method prescribed by Presidential Decree, such as installing and operating the point-of-sale information system, it shall not be deemed to have issued false credit card sales slips.
(3) Where a credit card merchant refuses a transaction by credit card or issues a false credit card sales slip, the relevant consumer may report the details of the relevant transaction to the Commissioner of the National Tax Service, the Commissioner of the competent Regional Tax Office or the head of the competent tax office.
(4) Any entity in receipt of a report filed under paragraph (3) shall give a notice thereon to the head of the tax office having jurisdiction over the credit card merchant's place of tax payment. In such cases, the head of the tax office having jurisdiction over the place of tax payment shall notify the relevant credit card merchant of the amount reported for the relevant business year.
(5) The Commissioner of the National Tax Service may issue an order to any credit card merchant who has refused a transaction by credit card or has issued a false credit card sales slip with respect to matters necessary to correct it.
(6) The administrative guidance for becoming credit card merchants, the method of reporting and giving notices on a refusal of transactions by credit card and issuance of a false credit card sales slip, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 117-2 (Obligation, etc., to Become Cash Receipt Merchants and to Issue Cash Receipts)
(1) Every corporation that meets the requirements prescribed by Presidential Decree giving due consideration to the type of business, etc., among corporations that supply goods or services mainly to consumers, not to business operators, shall become a Cash Receipt merchant within three months from the end of the month in which the corporation meets the requirements. <Amended by Act No. 13555, Dec. 15, 2015>
(2) Every corporation which has become a Cash Receipt merchant pursuant to paragraph (1) shall display a mark indicating that it is a Cash Receipt merchant, as prescribed by the Commissioner of the National Tax Service.
(3) No Cash Receipt merchant shall refuse to issue a Cash Receipt or issue a false Cash Receipt upon receipt of a request by a consumer to issue a Cash Receipt for payment in cash after supplying any goods or services: Provided, That it may choose not to issue a Cash Receipt if it is impractical to issue it in circumstances prescribed by Presidential Decree, and if a business operator prescribed by Presidential Decree, such as a superstore, issues a Cash Receipt after aggregating the sales of other business operators by the method prescribed by Presidential Decree, such as installing and operating the point-of-sale information system, it shall not be deemed to have issued a false Cash Receipt. <Amended by Act No. 11128, Dec. 31, 2011>
(4) Where a domestic corporation that engages in the type of business prescribed by Presidential Decree supplies goods or services for the amount of at least 100,000 won for each transaction (including the value-added tax thereon) and is paid in cash, notwithstanding paragraph (3), it shall issue the Cash Receipt, as prescribed by Presidential Decree, although a consumer does not request the issuance of a Cash Receipt: Provided, That the domestic corporation may choose not to issue a Cash Receipt if it issues an invoice or tax invoice under Article 121 of this Act, Article 163 of the Income Tax Act, or Article 32 of the Value-Added Tax Act after having supplied goods or services to a person who has registered his/her business pursuant to Article 111 of this Act, Article 168 of the Income Tax Act, or Article 8 of the Value-Added Tax Act. <Amended by Act No. 11873, Jun. 7, 2013; Act No. 12166, Jan. 1, 2014>
(5) Where a Cash Receipt merchant, which is paid in cash after having supplied goods or services, refuses to issue a Cash Receipt or issues a false Cash Receipt, the relevant consumer may report the details of the relevant cash transaction to the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office.
(6) Any person in receipt of a report filed under paragraph (5) shall give a notice thereof to the head of the tax office having jurisdiction over the place of tax payment of the relevant Cash Receipt merchant. In such cases, the head of the tax office having jurisdiction over the place of tax payment shall notify the relevant Cash Receipt merchant of the amount reported for the relevant business year.
(7) A corporation that has become a Cash Receipt merchant may issue a Cash Receipt, as prescribed by Presidential Decree, although a consumer supplied with goods or services from it does not request the issuance of a Cash receipt. <Newly Inserted by Act No. 11128, Dec. 31, 2011>
(8) The Commissioner of the National Tax Service may issue a necessary order to a corporation that has become a Cash Receipt merchant, in relation to matters to be observed by such corporation, such as how to issue Cash Receipts and display a mark indicating that it is a Cash Receipt merchant. <Amended by Act No. 11128, Dec. 31, 2011>
(9) Becoming and withdrawing from a Cash Receipt merchant, the amount subject to issuance of a Cash Receipt, the methods of reporting or giving notice of refusal to issue a Cash Receipt or issuance of a false Cash Receipt, and other necessary matters, shall be prescribed by Presidential Decree. <Amended by Act No. 11128, Dec. 31, 2011>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 118 (Preparation and Keeping of Stockholder Register, etc.)
A domestic corporation (excluding a non-profit domestic corporation) shall prepare and keep a stockholder register or employee register stating the matters prescribed by Presidential Decree, such as names, addresses, and resident registration numbers (referring to the names, locations of the headquarters of corporations, and the business registration numbers if such stockholders or employees are corporations) of the stockholders or employees (referring to employees of a limited liability company; hereafter the same shall apply in this Article).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 119 (Submission of Detailed Statement of Changes in Stocks, etc.)
(1) A corporation (excluding a partnership corporation, etc. prescribed by Presidential Decree) whose stocks, etc. changes during a business year shall submit a detailed statement of changes in stocks, etc. to the head of the tax office having jurisdiction over the place of tax payment by the filing deadline specified in Article 60, as prescribed by Presidential Decree.
(2) Paragraph (1) shall not apply to any of the following stocks, etc.: <Amended by Act No. 11128, Dec. 31, 2011>
1. A corporation prescribed by Presidential Decree among listed-stock corporations: Stocks, etc. held by the stockholders, etc., other than a controlling stockholder (including any related party thereof);
2. A corporation, other than those referred to in subparagraph 1: Stocks, etc. held by a minority stockholder of the relevant corporation.
(3) The scope of a controlling stockholder and a minority stockholder referred to in paragraph (2) and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 120 (Obligation to File Payment Statements)
(1) Any person who pays a domestic corporation the income provided in Article 127 (1) 1 or 2 of the Income Tax Act (including a person obliged to withhold tax pursuant to any provision of Article 73 (4) through (6) and (8)) shall file payment statements to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. In such cases, with regard to income accruing from each piece of trust property of a corporation subject to the Financial Investment Services and Capital Markets Act, as the income shall be deemed paid to such corporation, any person who pays such income shall submit such payment statements, notwithstanding Article 5 (2). <Amended by Act No. 11128, Dec. 31, 2011; Act No. 11607, Jan. 1, 2013>
(2) Article 164 of the Income Tax Act shall apply mutatis mutandis to the submission of payment statements under paragraph (1).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 120-2 (Special Cases concerning Obligation to File Payment Statements on Domestic Source Income, etc. of Foreign Corporations)
(1) Any person who pays domestic source income to any foreign corporation under Article 93 shall file a payment statement with the head of the tax office having jurisdiction over the place of tax payment by the end of February of the year following the year (in the case of suspension or closure of business, by the end of the second month from the month in which such business is suspended or closed) in which such payment is made: Provided, That the same shall not apply where income prescribed by Presidential Decree is paid, including non-taxable or tax-exempted income that is verified under Article 98-4.
(2) Article 164 of the Income Tax Act shall apply mutatis mutandis to the submission of payment statements under paragraph (1).
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 120-3 (Submission of Aggregate Tax Invoices for Individual Suppliers)
(1) Upon receipt of a tax invoice issued under Article 32 (1) or (7) or Article 35 (1) of the Value-Added Tax Act after being supplied with goods or services, any corporation which operates a business exempt from the value-added tax under the Value-Added Tax Act and the Restriction of Special Taxation Act shall submit an aggregate tax invoice for individual suppliers (referring to an aggregate tax invoice for individual suppliers provided in Article 54 of the Value-Added Tax Act; hereinafter the same shall apply) to the head of the tax office having jurisdiction over the place of tax payment by the deadline prescribed by Presidential Decree: Provided, That the same shall not apply where such invoice is submitted under Article 54 (5) of the Value-Added Tax Act. <Amended by Act No. 11873, Jun. 7, 2013>
(2) Matters necessary for submitting aggregate tax invoices for individual suppliers and other matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 121 (Preparation, Issuance, etc. of Invoices)
(1) Every corporation that supplies goods or services, shall issue an invoice or receipt (hereinafter referred to as "invoice, etc."), as prescribed by Presidential Decree, to a person to whom the goods or services are supplied. In such cases, any invoice issued shall be an invoice prepared in an electronic format prescribed by Presidential Decree (hereinafter referred to as “electronic invoice”). <Amended by Act No. 12850, Dec. 23, 2014>
(2) Where agricultural products, livestock products, fishery products, and forest products exempt from the value-added tax pursuant to Article 26 (1) 1 of the Value-Added Tax Act are sold on consignment or through an agent, the consignee or agent shall be deemed to have supplied goods and shall issue an invoice, etc., to a person supplied with the relevant goods: Provided, That the same shall not apply where such invoice, etc., is issued, as prescribed by Presidential Decree, pursuant to paragraph (1). <Amended by Act No. 11873, Jun. 7, 2013>
(3) For imported goods, the head of a customhouse shall issue an invoice to a corporation that imports the relevant goods, as prescribed by Presidential Decree.
(4) Paragraphs (1) through (3) shall not apply in circumstances prescribed by Presidential Decree where it is deemed inappropriate to issue an invoice, etc., such as sale of real estate.
(5) Every corporation shall submit a statement of invoices issued to, or received from, each purchaser or supplier pursuant to paragraphs (1) through (3) (hereinafter referred to as "an aggregate invoice for each supplier or purchaser") to the head of the tax office having jurisdiction over the place of tax payment by the deadline specified by Presidential Decree: Provided, That a corporation does not need to submit an aggregate invoice in either of the following cases: <Amended by Act No. 12850, Dec. 23, 2014>
1. An aggregate invoice for the invoices that the corporation received from a supplier pursuant to paragraph (3);
2. Aggregate invoices for each purchaser and each supplier, where the corporation has transmitted aggregate invoices to the Commissioner of the National Tax Service pursuant to paragraph (7) for the electronic invoices issued or received under the latter part of paragraph (1).
(6) Any portion in relation to which tax invoices or receipts are issued under the Value-Added Tax Ac or aggregate tax invoices for individual suppliers or purchasers are submitted shall be deemed a portion in relation to which invoices, etc., issued or aggregate invoices for individual suppliers or purchasers are submitted under paragraphs (1) through (3), and (5).
(7) Every corporation that issues electronic invoices pursuant to the latter part of paragraph (1), shall transmit a detailed statement of such electronic invoices in the form prescribed by Presidential Decree by the deadline specified by Presidential Decree. <Newly Inserted by Act No. 12850, Dec. 23, 2014>
(8) Matters necessary for preparing and issuing invoices, etc., and submitting aggregate invoices for each supplier or purchaser shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 121-2 (Obligation to Submit Data on Overseas Subsidiaries, etc.)
(1) Every domestic corporation that makes an overseas direct investment pursuant to Article 3 (1) 18 of the Foreign Exchange Transactions Act or acquires real estate in a foreign country or right in such property (hereinafter referred to as "real estate, etc.") through a capital transaction defined by Article 3 (1) 19 of the aforesaid Act, shall submit the following documents (hereinafter referred to as "statements, etc., on overseas subsidiaries") to the head of the tax office having jurisdiction over the place of tax payment by the deadline specified by Article 60 (1) or 76-17 (1), as prescribed by Presidential Decree: <Amended by Act No. 12166, Jan. 1, 2014; Act No. 12850, Dec. 23, 2014; Act No. 13555, Dec. 15, 2015>
1. A detailed statement of the overseas direct investment;
2. The financial position of the foreign corporation in which the overseas direct investment has been made (including the financial position of the foreign corporation in which investment is made by the foreign corporation in which the overseas direct investment has been made);
3. Losses incurred in transactions to the domestic corporation that has made the overseas direct investment (limited to the losses incurred in transactions with the foreign corporation in which the overseas direct investment has been made);
4. Losses incurred in transactions to the foreign corporation in which the overseas direct investment has been made (excluding the losses incurred in transactions with the domestic corporation that has made the overseas direct investment);
5. The status of overseas branch offices;
6. A statement of investments in overseas real estate, etc.;
7. Other documents specified by Presidential Decree as relevant to overseas direct investments or real estate, etc., in a foreign country.
(2) Where a domestic corporation referred to in paragraph (1) fails to submit a detailed statement, etc., of overseas subsidiaries or submits a false detailed statement, etc., of overseas subsidiaries, the head of the tax office having jurisdiction over the place of tax payment may request the domestic corporation to submit or supplement it: Provided, That the same shall not apply where two years pass from the following day of the filing deadline referred to in paragraph (1).
(3) A person in receipt of a request to submit or supplement data pursuant to paragraph (2) shall submit the relevant data within 60 days from the receipt of the request.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 121-3 (Administrative Fines for Non-Performance of Obligation to Submit Data on Overseas Subsidiaries, etc.)
(1) In either of the following circumstances, a corporation obligated to submit statements, etc., on overseas subsidiaries pursuant to Article 121-2 (excluding a statement on investment in overseas real estate, etc., referred to in Article 121-2 (1) 6 and documents related to real estate, etc., in a foreign country referred to in Article 121-2 (1) 7; the same shall apply hereafter in this paragraph) shall be subject to an administrative fine not exceeding 50 million won (this clause shall apply only where a domestic corporation that has made overseas direct investment under Article 121-2 (1) directly or indirectly owns at least 10/100 of the total number of outstanding stocks of, or total amount of investment in, the invested corporation): Provided, That the foregoing shall not apply where it is found impracticable for a corporation to submit documents by the deadline or where a corporation has any other just ground specified by Presidential Decree: <Amended by Act No. 12166, Jan. 1, 2014; Act No. 12850, Dec. 23, 2014; Act No. 15222, Dec. 19, 2017>
1. Where the corporation fails to submit a statement or other document regarding an overseas subsidiary by the deadline prescribed in Article 121-2 (1) or makes a misrepresentation in a statement or other document regarding an overseas subsidiary;
2. Where the corporation fails to submit a document by the deadline prescribed in Article 121-2 (3) or submits a false document upon receipt of a request to submit or supplement a document under Article 121-2 (2).
(2) In either of the following circumstances, a corporation obligated to submit statements on overseas real estate, etc., pursuant to Article 121-2 (1) 6 and documents related to real estate, etc., in a foreign country referred to in Article 121-2 (1) 7 in accordance with Article 121-2 (referred to as statements, etc., on investment in overseas real estate, etc." hereafter in this paragraph) shall be subject to an administrative fine not exceeding 1/1000 of the acquisition value of such overseas real estate, etc. (but not more than 50 million won): Provided, That the foregoing shall not apply where it is found impracticable for a corporation to submit documents by the deadline or where a corporation has any other just ground specified by Presidential Decree: <Newly Inserted by Act No. 12850, Dec. 23, 2014>
1. Where the corporation fails to submit a statement, etc., on investment in overseas real estate, etc. by the deadline prescribed in Article 121-2 (1) or make a misrepresentation in a statement, etc., on investment in overseas real estate, etc.;
2. Where the corporation fails to submit relevant documents by the deadline prescribed in Article 121-2 (3) upon receipt of a request to submit or supplement such documents under Article 121-2 (2) or makes a false misrepresentation in such documents.
(3) Administrative fines referred to in paragraphs (1) and (2) shall be imposed and collected by the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended by Act No. 12850, Dec. 23, 2014>
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
 Article 122 (Inquiries and Investigations)
If it is necessary for a public official to perform corporate tax-related affairs, the public official may question any of the following persons, or investigate the relevant account books, documents, and other items or order the submission thereof:
1. A tax obligor or person deemed to have tax liability;
2. A person liable for withholding;
3. A person obligated to submit a payment statement and a person obligated to submit an aggregate invoice for individual suppliers or purchasers;
4. A person responsible for operation and management under Article 109 (2) 3;
5. A person deemed to have engaged in a transaction with a person falling under subparagraph 1;
6. A trade association organized by tax obligors or an organization equivalent thereto;
7. A corporation which has issued donation receipts.
[This Article Wholly Amended by Act No. 10423, Dec. 30, 2010]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1999: Provided, That the amended provisions of Articles 8, 16, 17, 33, 34, 36, 46 through 49, 59, 63, 79, 81, 84, 86 and 99 (11) (limited to portions governing divisions) and the amended provisions of Article 29 (1) shall enter into force on the date of its promulgation, the amended provisions of Articles 28 (2) through (4) and 76 (5) shall enter into force on January 1, 2000, and the amended provisions of Articles 76 (9) 1 and 121 (2) shall enter into force on July 1, 1999.
Article 2 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force: Provided, That the amended provisions governing the corporate tax on liquidation income shall apply from the first dissolution or merger which occurs after this Act enters into force or from a division occurring in the business year during which this Act enters into force, and the amended provisions governing special penalty tax shall apply from the first transfer that occurs after this Act enters into force.
Article 3 (Applicability to Special Cases concerning Mergers and Divisions)
The amended provisions of Article 8, subparagraphs 3 and 4 of Article 17, and Articles 44 through 49, 59 (3), 99 (11) (limited to portions governing divisions) and 113 (3) shall apply from the first merger after this Act enters into force or from the division occurring in the business year in which this Act enters into force.
Article 4 (Applicability to Report and Payment)
(1) The amended provisions of Articles 6, 7, 62, and 109 through 111 shall apply from the first arriving deadline for filing or registration after this Act enters into force.
(2) The amended provisions of Articles 60 and 63 through 65 shall apply from the first report or payment of corporate tax for the business year which first starts after this Act enters into force: Provided, That the amended provisions of Article 63 (1) shall apply to the first interim prepaid portion after this Act enters into force.
(3) The amended provisions of Articles 66 through 70 shall apply from the first report, determination, or correction after this Act enters into force.
(4) The amended provisions of Articles 71 and 89 shall apply from the first arriving deadline for payment of corporate tax after this Act enters into force.
(5) The amended provisions of Articles 73 through 75 shall apply from the first payment made after this Act enters into force.
Article 5 (Applicability to Constructive Dividends or Distributions)
The amended provisions of Article 16 shall apply from the first retirement, etc. of stocks, transfer into capital or dissolution after this Act enters into force: Provided, That the amended provisions of Article 16 (1) 2 (a) (limited to merger evaluation marginal profits and marginal profits upon merger evaluation) shall apply from the first merger after this Act enters into force or transfer into capital, etc. generated by a division during the business year in which this Act enters into force, and the amended provisions of subparagraph 6 of the same paragraph shall apply from a division occurring in the business year in which this Act enters into force.
Article 6 (Applicability to Calculation of Deductible Expenses)
(1) The amended provisions of Article 28 (2) through (4) shall apply from the first business year that starts on or after January 1, 2000.
(2) The amended provisions of Articles 29 (excluding paragraph (1)) through 34 (excluding paragraph (3)), 36 through 38, and 61 shall apply from inclusion in deductible expenses in the first business year beginning after this Act enters into force: Provided, That the amended provisions of Article 29 (1) shall apply from inclusion in deductible expenses in the business year in which this Act enters into force, the amended provisions of Articles 31 (4), 32 (4), 33 (3), 34 (6), and 36 (3) (including where the amended provisions of Articles 37 (2) and 38 (2) shall apply mutatis mutandis) shall apply from the first dissolution after this Act enters into force or from a division occurring in the business year in which this Act enters into force.
(3) The amended provisions of Article 34 (3) shall apply from the first guarantee of debts (including guarantee of debts made before this Act enters into force for time limit which the has been extended) or payment after this Act enters into force: Provided, That for a corporation subject to the previous provisions of Article 14 (1), the amended provisions of Article 34 (3) 1 shall apply from the first guarantee of debts on or after January 1, 1998 (including guarantee of debts made prior to December 31, 1997 for which the time limit has been extended).
(4) The amended provisions of Article 52 shall apply to the first transaction after this Act enters into force.
(5) The amended provisions of Articles 92 (2) 3 and 98 (1) 4 shall apply to the first transfer after this Act enters into force.
Article 7 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (1) shall apply from the collection of corporate tax in the first business year that starts after this Act enters into force.
(2) The amended provisions of Articles 76 (4) and 115 shall apply from a combined financial statements submitted in the first business year that starts after this Act enters into force. In such cases, the deadline for submission for the business year which starts between the date of the enforcement of this Act and December 31, 1999 shall be seven months from the end of the relevant business year, notwithstanding the amended provisions of Article 115.
(3) The amended provisions of Article 76 (5) shall apply from the first goods or services provided on or after January 1, 2000, and the amended provisions of Article 116 shall apply from the first goods or services provided after this Act enters into force.
(4) The amended provisions of Article 76 (6) shall apply from a detailed statement submitted in the first business year that starts after this Act enters into force, and the amended provisions of Article 119 (1) (excluding the provisions governing the filing deadline) shall apply from the first statement submitted after this Act enters into force.
(5) The amended provisions of Article 76 (8) shall apply from the first arriving deadline for submission after this Act enters into force.
(6) The amended provisions of Articles 76 (9) 1 and 121 (2) shall apply from what is first provided on or after July 1, 1999.
(7) The amended provisions of Article 114 shall apply from the first arriving deadline for public announcement after this Act enters into force.
Article 8 (Special Cases concerning Calculation of Income from Profit-Making Business)
(1) In the application of the amended provisions of Article 3 (2) 4, the acquisition value of stocks or investment shares acquired on or before December 31, 1988 may either of the book value or any of the following amounts, whichever is larger:
1. For stocks or investment shares listed on a stock exchange, the higher amount of the stock exchange final market value on December 31, 1988 (regardless of the existence of any real transaction) or the average of the officially announced stock exchange final market value for each day of December 1988;
2. For stocks or investment shares not listed on a stock exchange, the value as at January 1, 1989 as evaluated under Article 60 of the Inheritance Tax and Gift Tax Act and Article 63 (1) 1 (b) and (c) of the same Act.
(2) In the application of the amended provisions of Article 3 (2) 5, the acquisition value of land and buildings acquired on or before December 31, 1990 (including attached facilities and structures) may be the larger amount of the book value or the value as at January 1, 1991 as evaluated under Article 60 of the Inheritance Tax and Gift Tax Act and Article 61 (1) through (3) of the same Act.
Article 9 (Special Cases concerning Application of Non-Inclusion of Entertainment Expenses in Deductible Expenses)
(1) In the application of the amended provisions of Article 25 (1) 2, for the business year that starts between the date of the enforcement of this Act and December 31, 1999, the rates applied shall be as in the following table, notwithstanding the table under the amended provisions of the table under the same subparagraph:
Amount of IncomeRate
10,000,000,000 won or less 30/10,000
More than 10,000,000,000 won and up to 50,000,000,000 won 30,000,000 won + 15/10,000 of the amount in excess of 10,000,000,000 won
More than 50,000,000,000 won 90,000,000 won + 4/10,000 of the amount in excess of 50,000,000,000 won
(2) In the application of the amended provisions of Article 25 (2) and (4), for the business year that starts between the date of the enforcement of this Act and December 31, 1999, the amount of secret service funds under the previous provisions of the proviso to Article 18-2 (3) within 10/100 of the sum of the amounts under each subparagraph of Article 25 (1) appropriate amount shall be deemed the business-related entertainment expenses paid, and the amended provisions of Article 25 (2) shall not apply.
Article 10 (Special Cases concerning Timing for Acquisition of Land, etc.)
In the application of the amended provisions of Article 99, the land, etc. acquired on or before December 31, 1984 shall be deemed land, etc. acquired on January 1, 1985.
Article 11 (General Transitional Measures)
Corporate tax paid or payable under the previous provisions before this Act enters into force shall be governed by the previous provisions.
Article 12 (Transitional Measures on Non-Taxation of Interest Income)
Corporate Tax shall not be imposed on income accrued from any of the following bonds or savings:
1. National housing bonds issued under the Housing Construction Promotion Act by the Korea Housing and Commercial Bank under the previous Korea Housing and Commercial Bank Act before January 1, 1982;
2. Any of the following bonds issued before January 1, 1983:
(a) National bonds for industrial reconstruction issued by the State under the previous Industrial Reconstruction Bonds Act;
(b) Bonds issued by the State as compensation for requisition under the Act on Special Measures for Readjustment of Requisitioned Properties;
(d) National housing bonds issued by the State under the Housing Construction Promotion Act;
(e) Subway public bonds, roads public bonds, and waterworks public bonds issued by local governments under the Local Finance Act;
(f) Land development bonds issued by the Korea Land Corporation under the Korea Land Corporation Act;
3. Interest on savings in the National Savings Association generated before December 31, 1990.
Article 13 (Transitional Measures concerning Inclusion of Reserve Funds, etc. in Gross Income, etc.)
(1) For the inclusion of reserve funds, etc. in the calculation of deductible expenses under the previous Article 12 (3) before this Act enters into force in the calculation of gross income, the previous provisions shall govern.
(2) The timing for accrual of gross income and deductible expenses for transactions, etc. under the application of the previous Article 17 as at the time this Act enters into force shall be governed by the previous provisions.
(3) The withholding tax rate on interest income from bonds, etc. issued under the previous Article 39 (6) before September 30, 1998 shall be 20%, notwithstanding the amended provisions of Article 73 (1) 1.
Article 14 Omitted.
Article 15 (Relationship with other Acts and Subordinate Statutes)
Where other Acts and subordinate statutes cite the previous Corporate Tax Act as at the time this Act enters into force, and the corresponding provisions exist herein, they shall be deemed to have cited the corresponding provisions of this Act in lieu of the previous provisions.
ADDENDA <Act No. 6047, Dec. 28, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2000.
Article 2 (Applicability)
(1) The amended provisions of Article 18-2 shall apply from the first dividend to be distributed from a subsidiary after this Act enters into force.
(2) The amended provisions of Article 36 shall apply from the business assets acquired and renovated using the first subsidy to be granted after this Act enters into force.
(3) The amended provisions of Article 73 (1) and (5) shall apply from payment of first accruing interest income after this Act enters into force.
ADDENDA <Act No. 6259, Feb. 3, 2000>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.
(2) (General Applicability) This Act shall apply from the first report on tax base on the special penalty tax or the first determination or correction thereof after this Act enters into force.
(3) (Applicability to Litigation Cases on Special Penalty Tax) This Act shall apply to a disposition made under Article 59-2 (1) (limited to appeals, requests for review, requests for adjudication or administrative lawsuits that have already been filed) under the previous Corporate Tax Act (referring to the Act before amendment by Act No. 5581). <Newly Inserted by Act No. 6293, Dec. 29, 2000>
ADDENDA <Act No. 6293, Dec. 29, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2001: Provided, That the amended provisions of Articles 25 (2) and 98-2 shall enter into force on the date of its promulgation, the amended provisions of Articles 73 (1), (6), (8) and (9), 74 (2) and 98-3 shall enter into force on July 1, 2001, the amended provisions of the main sentence of Article 28 (2) shall enter into force on January 1, 2002, and the amended provisions of Articles 66 (2), 76 (7) and (8) and 120-2 shall enter into force on July 1, 2002.
Article 2 (General Applicability)
This Act shall apply from the first business year that starts after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Received Dividends in Gross Income)
The amended provisions of Articles 18-2 (1) and (3) and 18-3 shall apply from the first dividend to be distributed after this Act enters into force.
Article 4 (Applicability to Non-Inclusion of Entertainment Expenses in Deductible Expenses)
The amended provisions of Article 25 (2) shall apply from entertainment expenses included in deductible expenses for the business year in which this Act is promulgated.
Article 5 (Applicability to Non-Inclusion of Paid Interest on Deductible Expenses)
The amended provisions of the main sentence of Article 28 (2) shall apply from the first business year starts on or after January 1, 2002.
Article 6 (Applicability to Inclusion of Reserve Funds for Policyholder Dividends in Deductible Expenses)
The amended provisions of Article 31 (4) shall apply from the first portion to be included in deductible expenses for the business year in which this Act enters into force.
Article 7 (Applicability to Securities Trading Reserve)
The amended provisions of Article 32 shall apply from the business year in which this Act enters into force.
Article 8 (Applicability to Income Deduction for Mutual Funds, etc.)
The amended provisions of Article 51-2 (1) 2 and 3 shall apply from the first distributed portion after this Act enters into force.
Article 9 (Applicability to Interim Prepayment)
The amended provisions of the proviso of Article 63 (1) shall apply from the first interim prepayment to be made after this Act enters into force.
Article 10 (Applicability to Withholding)
(1) The amended provisions of Article 73 (1) shall apply from interest income first accrued or earnings distributed from securities investment trust fund first paid on or after July 1, 2001.
(2) The amended provisions of Articles 73 (6) and (8), 74 (2), and 98-3 shall apply from first bonds, etc. to be sold or first interest, etc. to be paid on or after July 1, 2001.
(3) The previous provisions of Articles 73 (6) and 74 (2) shall apply to bonds, etc. issued before July 1, 2001 until the first payment date of interest, etc. on bonds, etc. on or after July 1, 2001 where the interest computing period spans over the periods before or on or after July 1, 2001.
Article 11 (Applicability to Domestic Source Income of Foreign Corporations)
(1) The amended provisions of Article 92 (2) 2 (proviso), subparagraphs 7 and 10 of Article 93, and Article 98 (1) 4 (proviso) shall apply from the first portion to be transferred after this Act enters into force.
(2) The amended provisions of subparagraph 11 of Article 93 shall apply from the first accrued income after this Act enters into force.
Article 12 (Applicability to Special Cases concerning Reports, etc. on Capital Gains on Transfer of Securities by Foreign Corporations)
The amended provisions of Article 98-2 shall apply from the portion that first meets the taxable criteria under the corresponding taxation treaty after the promulgation of this Act.
Article 13 (Applicability to Submission of Written Payment Statements by Foreign Corporations)
The amended provisions of Articles 66 (2) 2, 76 (7) and (8), and 120-2 shall apply from the first payment made on or after July 1, 2002. <Amended by Act No. 6558, Dec. 31, 2001>
Article 14 (Applicability to Special Penalty Tax)
The amended provisions of Articles 99, 102, and 104 shall apply from the first portion to be transferred after this Act enters into force.
Article 15 (Transitional Measures concerning Inclusion of Securities Trading Reserves in Gross Income)
The previous provisions shall apply to inclusion, etc. of securities trading reserves included in calculation of deductible expenses under the previous provisions of Article 32 before the enforcement of this Act in gross income.
ADDENDA <Act No. 6558, Dec. 31, 2001>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2002: Provided, That the amended provisions of Articles 45 (1), 61 (1), 76 (3) and (5), and 114 shall enter into force on the date of its promulgation, and the amended provisions of Articles 98-4 and 120-2 (1) shall enter into force on July 1, 2002.
Article 2 (General Applicability)
This Act shall apply from the first business year that starts after this Act enters into force.
Article 3 (Applicability to Constructive Dividends or Distributions)
The amended provisions of Article 16 (1) 2 shall apply from the first equity stocks or investment shares to be retired after this Act enters into force.
Article 4 (Applicability to Non-Inclusion of Amount of Dividends in Gross Income)
The amended provisions of Articles 18-2 (1) 4 and 18-3 (2) shall apply from the first dividend to be distributed after this Act enters into force.
Article 5 (Applicability to Inclusion of Value of Business Assets Acquired Using National Subsidies, etc. in Deductible Expenses)
The amended provisions of Article 36 (1) and (4) shall apply from the first National subsidy granted after this Act enters into force.
Article 6 (Applicability to Succession of Losses Carried Forward at Time of Merger)
The amended provisions of Article 45 (1) 1 shall apply from a merger that is effected in the business year in which this Act is promulgated.
Article 7 (Applicability to Inclusion of Amount Equivalent to Transfer Marginal Profit of Assets Generated from Spin-off in Deductible Expenses)
The amended provisions of Article 47 shall apply from the first division or merger that is effected after this Act enters into force.
Article 8 (Applicability to Income Deduction for Corporate Restructuring Real Estate Investment Companies)
The amended provisions of Article 51-2 (1) 4 shall apply from the first dividend to be distributed after this Act enters into force.
Article 9 (Applicability to Special Cases concerning Taxation on Capital Gains on Transfer of Land, etc.)
The amended provisions of Articles 2 (2), 55, 55-2, 57, 59, 63 (1), 76 (1) 1, 92 (2) through (6), 95 and 95-2 shall apply from the first portion to be transferred after this Act enters into force.
Article 10 (Applicability to Special Cases concerning Appropriation of Reserve Funds for Deductible Expenses)
The amended provisions of Article 61 (1) shall apply from the first portion that is appropriated in the tax settlement invoice of the business year in which this Act is promulgated.
Article 11 (Applicability to Special Cases concerning Taxation of Capital Gains on Transfer of Assets by Non-Profit Domestic Corporations)
The amended provisions of Article 62-2 shall apply from the first portion to be transferred after this Act enters into force.
Article 12 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (1) 3 shall apply from the first arriving payment deadline after this Act enters into force.
(2) The amended provisions of Article 76 (5) will apply from goods and services supplied in the business year in which this Act enters into force.
Article 13 (Applicability to Domestic Source Income by Foreign Corporation)
The amended provisions of subparagraphs 2 and 11 of Article 93 shall apply from the disposed portion as a dividend or other income after this Act enters into force.
Article 14 (Applicability to Tax Withholding of Bonds, etc. of Foreign Corporations)
The amended provisions of Article 98-3 shall apply from the first interest, etc. to be paid or first bonds, etc. to be sold after this Act enters into force.
Article 15 (Applicability to Application for Non-Taxation, etc. on Domestic Source Income by Foreign Corporations)
The amended provisions of Article 98-4 shall apply from the first untaxed or exempt portion on or after July 1, 2002.
Article 16 (Applicability to Obligation to Publish Balance Sheets)
The amended provisions of Articles 76 (3) and 114 shall apply from the business year in which this Act is promulgated.
Article 17 (Applicability to Submission of Written Payment Statements on Domestic Source Income by Foreign Corporation)
The amended provisions of Article 120-2 (1) shall apply from the first payment made on or after July 1, 2002.
Article 18 (Applicability to Preparation, Issuance, etc. of Invoice)
The amended provisions of Article121 shall apply from the first goods or services to be supplied or imported after this Act enters into force.
Article 19 (Transitional Measures concerning Non-Inclusion of Dividends by Corporation Belonging to Large Business Group)
Notwithstanding the amended provisions of Article 18-3 (2), the non-inclusion of the amount of dividend that any domestic corporation belonging to a large business group earns from its affiliate in the gross income shall be governed by the previous provisions.
Article 20 (Transitional Measures concerning Acquisition Tax on Non-Business Land)
The acquisition tax on the non-business land of any corporation under Article 112 (2) of the previous Local Tax Act (referring to the Local Tax Act before amendment by Act No. 6312) (limited to the amount exceeding the amount of tax calculated under paragraph (1) of the same Article of the same previous Act) and the non-inclusion of the refund amount in deductible expenses and gross income shall be governed by the previous provisions of subparagraph 7 of Article 18 and subparagraph 3 of Article 21.
Article 21 (Transitional Measures concerning Inclusion of Amount Equivalent to Reappraisal Difference of Land in Deductible Expenses)
The amount that has been included in deductible expenses under the previous provisions of Article 39 and is later included in gross income, etc. at the time that this Act enters into force shall be governed by the previous provisions.
Article 22 (Transitional Measures concerning Corporate Tax on Income Exceeding Proper Reserves)
The disposal of the Corporate Development Reserve Fund raised under the previous provisions of Article 56 and the payment, etc. of the corporate tax that is incurred by the disposal of such fund for other purposes as at the time that this Act enters into force shall be governed by the previous provisions.
Article 23 (Transitional Measures concerning Repeal of Special Penalty Tax)
Any special penalty tax imposed or to be imposed under the previous provisions as at the time that this Act enters into force shall be governed by the previous provisions.
Article 24 Omitted.
Article 25 (Transitional Measures following Amendments to other Acts)
Where the special penalty tax is imposed on the income accrued the transfer, etc. of lands or business before this Act enters into force, the amount of such special penalty tax recognized as development costs shall be governed by the previous provisions, notwithstanding the amended provisions of Article 24 of this Addenda.
ADDENDA <Act No. 6852, Dec. 30, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 18 Omitted.
ADDENDA <Act No. 7005, Dec. 30, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2004: Provided, That the amended provisions of Articles 5 (2), 29 (1) 2, 51-2 (1) 2, 62 (1), 73 (1) through (3), 113 (2) shall enter into force on January 5, 2004, and the amended provisions of Article 55 (1) shall enter into force on January 1, 2005.
Article 2 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Holding Company's Received Dividends in Gross Income)
The amended provisions of Article 18-2 (1) 4 shall apply from the first dividend to be distributed from a subsidiary after this Act enters into force.
Article 4 (Applicability to Income Deduction of Dividends of Ship Investment Companies)
The amended provisions of Article 51-2 (1) 5 shall apply from the first dividend to be distributed after this Act enters into force.
Article 5 (Applicability to Special Cases concerning Taxation on Transfer of Land)
The amended provisions of Article 55-2 (1) shall apply from the first transfer after this Act enters into force.
Article 6 (Applicability to Correction, etc. of Corporate Tax Resulting from Wrongful Accounting)
The amended provisions of Articles 58-3, 59 (1) 4, 66 (2) 4 and 72-2 shall apply from the first disposition, such as warning and attention due to wrongful accounting after this Act enters into force.
Article 7 (Applicability to Exemption from Collection of Withholding Tax in case of Non-Execution of Withholding)
The amended provisions of proviso of Article 71 (3) shall apply from the first payment after making a determination or correction after this Act enters into force.
Article 8 (Applicability to Scope of Domestic Source Income)
(1) The amended provisions of subparagraph 4 of Article 93 shall apply from the first lease after this Act enters into force.
(2) The amended provisions of subparagraph 6 of Article 93 shall apply from the first supply of services after this Act enters into force.
(3) The amended provisions of subparagraph 11 (i) of Article 93, Article 98 (10) and (11) shall apply from the first capital transaction to be made after this Act enters into force.
Article 9 (Applicability to Reports, etc. on Corporate Tax by Foreign Corporations)
The amended provisions of the former part of Article 97 (1) shall apply from the first report on the tax base and amount after this Act enters into force.
Article 10 (Applicability to Withholding of Capital Gains)
The amended provisions of Article 98 (1) shall apply from the first transfer after this Act enters into force.
Article 11 (Applicability to Special Cases concerning Obligation to Submit Written Payment Statements on Domestic Source Income, etc. by Foreign Corporation)
The amended provisions of main sentence of Article 120-2 (1) shall apply from the first domestic source income to be paid after this Act enters into force.
Article 12 (Special Cases concerning Interim Prepayment)
In calculating the amount of interim tax for the interim prepayment period starting after January 1, 2005, the calculated amount of tax as fixed for corporate tax of the immediately preceding business year from the relevant business year stipulated in Article 63 (1) shall be calculated by applying the amended provisions of Article 55 (1) to the tax base of the immediately preceding business year.
Article 13 (Applicability to Investment Assets, Investment Companies, etc.)
The provisions governing investment assets, investment companies, etc. to be amended following the enforcement of the Indirect Investment Asset Management Business Act shall apply from the first created or established portion after the date of enforcement of the same Act, and for those created or established before the enforcement of the same Act, the former provisions shall prevail.
Article 14 (Transitional Measures concerning Capital Gains on Transfer of House)
Where a corporation that has a house provided in Article 55-2 (1) 2 as at the time this Act enters into force transfers the house on or before December 31, 2004, the amended provisions of Article 55-2 (1) 2 shall not apply: Provided, That the corporation newly acquires another house on or after January 1, 2004, this shall not apply.
Article 15 (Transitional Measures concerning Scope of Domestic Source Income in Relation to Industrial/Commercial/Scientific Machinery, Facility, Equipment, etc.)
Income generated from price and transfer in the case of use in the country of the industrial/commercial/scientific machinery, facility, equipment or the price being paid in the country shall, notwithstanding the amended provisions of subparagraph 4 of Article 93, be deemed income generated from price and transfer pursuant to the former provisions of subparagraph 9 (c) of Article 93.
ADDENDA <Act No. 7117, Jan. 29, 2004>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 29 (1) shall take effect on January 1, 2005.
(2) (General Applicability) This Act shall apply from the first business year that begins after this Act enters into force.
ADDENDA <Act No. 7289, Dec. 31, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 7317, Dec. 31, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2005: Provided, That the amended provisions of Articles 73 (8), 74 (2), 98-3 (1) through (3) and (6) shall enter into force on July 1, 2005, and the amended provisions of Article 51-2 (1) 4 shall enter into force on April 23, 2005.
Article 2 (Applicability to Constructive Dividends or Distributions)
The amended provisions of Article 16 (1) 2 (a) shall apply from the first loan to be converted into investment after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Received Dividends in Gross Income)
The amended provisions of Articles 18-2 (1) 3, and the proviso to 18-3 (1) 1 and 18-3 (1) 3 shall apply from the first dividend to be distributed after this Act enters into force.
Article 4 (Applicability to Deduction of Income for Private Equity Funds, etc. Participating in Management)
The amended provisions of Article 51-2 (1) 2 shall apply from the first dividend to be paid after this Act enters into force.
Article 5 (Applicability to Deduction of Income concerning Real Estate Investment Companies for Consigned-Management)
The amended provisions of Article 51-2 (1) 4 shall apply from the first dividend to be distributed after April 23, 2005.
Article 6 (Applicability to Tax Credits on Losses from Disasters)
The amended provisions of Article 58 (1) shall apply from the first loss of asset after this Act enters into force.
Article 7 (Applicability to Determination and Correction)
The amended provisions of Article 66 (2) 3 shall apply from the first determination or correction made after this Act enters into force.
Article 8 (Applicability to Withholding)
The amended provisions of Article 73 (1) 1 and 2 shall apply from the first interest income and distribution of profits from investment trusts after this Act enters into force, and the amended provisions of Articles 73 (8) and 74 (2) shall apply from the first withheld portion on or after July 1, 2005.
Article 9 (Applicability to Penalty Tax on Negligence in Paying Withholding Tax)
The amended provisions of Article 76 (2) shall apply from the first interest income and distribution of profits from investment trusts to be paid after this Act enters into force.
Article 10 (Applicability to Domestic Source Income)
The amended provisions of subparagraph 10 of Article 93 shall apply from the first portion to be transferred after this Act enters into force.
Article 11 (Applicability to Carried-Forward Deduction of Tax Paid Overseas)
The amended provisions of Article 97 (1) shall apply from the first portion to be reported after this Act enters into force.
Article 12 (Applicability to Special Cases concerning Withholding on Bonds, etc., of Foreign Corporations)
The amended provisions of Article 98-3 (1) through (3) and (6) shall apply from the first portion to be withheld on or after July 1, 2005.
Article 13 (Applicability to Reporting on Establishment or Foundation for Corporation)
The amended provisions of Article 109 (3) shall apply from the first revision to the reported matters about establishment or foundation after this Act enters into force.
Article 14 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force.
ADDENDA <Act No. 7838, Dec. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2006: Provided, That the amended provisions of Article 26 and Article 8 (2) of the Addenda to the Corporate Tax Act amended by Act No. 5581 shall enter into force on the date of its promulgation, the amended provisions of Article 98-5 shall enter into force on July 1, 2006, and the amended provisions of Article 55-2 shall enter into force on January 1, 2007.
Article 2 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force.
Article 3 (Applicability to Constructive Dividends or Distributions)
The amended provisions of Articles 16 (1) 2 (a), and the proviso to 17 (1) 1 and 17 (1) 1 (2) shall apply to the first loan to be converted as investment after this Act enters into force.
Article 4 (Applicability to Non-Inclusion, etc. of Received Dividends of Holding Companies in Gross Income, etc.)
The amended provisions of Articles 18-2 and 18-3 shall apply from the first dividend to be paid after this Act enters into force.
Article 5 (Applicability and Special Applicability to Non-Inclusion of Donations in Deductible Expenses)
(1) The amended provisions of Article 24 (2) and (3) shall apply from the portion to be disbursed in the first business year after this Act enters into force.
(2) In the application of the amended provisions of Article 24 (2), with respect to the portion that is disbursed by the business year ending within three years from the business year that first begins after this Act enters into force, "50/100" in the proviso to the part other than each subparagraph of the same paragraph shall be made "75/100", notwithstanding the amended provisions of the proviso to the part other than each subparagraph of the same paragraph of the same Article.
Article 6 (Applicability to Non-Inclusion of Entertainment Expenses in Deductible Expenses)
The amended provisions of the proviso to the part other than each subparagraph of Article 25 (2) shall apply from the first portion to be disbursed after this Act enters into force.
Article 7 (Applicability to Non-Inclusion of Excess Expenses, etc. in Deductable Expenses)
The amended provisions of Article 26 shall apply from the portion to be disbursed in the business year in which this Act enters into force.
Article 8 (Applicability to Inclusion of Reserve Funds for Proper Purpose Business in Deductible Expenses)
The amended provisions of Article 29 shall apply from the portion to be included in deductible expenses in the business year that first starts after this Act enters into force.
Article 9 (Applicability to Inclusion of Value of Fixed Assets Acquired with Construction Charges in Deductible Expenses)
The amended provisions of Article 37 (2) shall apply from the first construction charges to be granted after this Act enters into force.
Article 10 (Applicability to Appraisal of Assets and Liabilities)
The amended provisions of Article 42 (3) shall apply from the appraised portion in the first business year after this Act enters into force.
Article 11 (Applicability to Succession of Losses Carried Forward at Time of Merger and Division)
The amended provisions of Articles 45 and 48-2 shall apply from the first merge or division after this Act enters into force.
Article 12 (Applicability to Inclusion of Amount Equivalent to Asset Transfer Marginal Profits in Deductible Expenses due to Exchange)
The amended provisions of Article 50 shall apply from the first exchange of an asset after this Act enters into force.
Article 13 (Applicability to Income Deduction for Special Purpose Companies, etc.)
The amended provisions of Article 51-2 shall apply from the first dividend to be distributed after this Act enters into force: Provided, That in the case of any ship investment company as defined in the Ship Investment Company Act, the amended provisions shall apply from the first dividend to be distributed after January 1, 2009.
Article 14 (Applicability to Special Cases concerning Taxation of Capital Gains on Transfer of Lands, etc.)
The amended provisions of Article 55-2 shall apply to the first portion to be transferred after January 1, 2007.
Article 15 (Applicability to Special Cases concerning Tax Credits on Tax Paid Overseas by Indirect Investment Companies, etc.)
The amended provisions of Article 57-2 shall apply to the first income to be accrued after this Act enters into force.
Article 16 (Applicability to Interim Prepayment)
The amended provisions of Article 63 shall apply to the first interim prepayment to be made after this Act enters into force.
Article 17 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (1) 3 shall apply from the first corporate tax to be paid or collected after this Act enters into force.
(2) The amended provisions of Article 76 (6), (7) and (9) shall apply from the first arriving deadline for submission after this Act enters into force.
(3) The amended provisions of Article 76 (10) shall apply from the first-received donation after this Act enters into force.
Article 18 (Applicability to Domestic Source Income of Foreign Corporations)
(1) The amended provisions of subparagraph 2 of Article 93 shall apply from the first portion disposes of as dividends after this Act enters into force.
(2) The amended provisions of subparagraph 6 of Article 93 shall apply from the first income to be accrued after this Act enters into force.
Article 19 (Applicability to Special Cases concerning Procedures for Withholding Tax for Foreign Corporations)
The amended provisions of Article 98-5 shall apply from the first withholding made on or after July 1, 2006.
Article 20 (Applicability to Obligation, etc. to Prepare and Keep Detailed Statement of Donation Receipts Issued)
The amended provisions of Article 112-2 shall apply from the first donation received after this Act enters into force.
Article 21 (Applicability to Special Cases concerning Taxation in Calculation of Income Generated from Profit-Making Business)
The amended provisions of Article 8 (2) of the Addenda to the Corporate Tax Act amended by Act No. 5581 shall apply from the first portion to be transferred in the business year in which this Act enters into force.
Article 22 (Transitional Measures concerning Determination, etc. to Grant Authorization of Rehabilitation Plans under Debtor Rehabilitation and Bankruptcy Act of Amended Provisions of Article 42 (3))
(1) A determination to grant authorization of a reorganization plan under the previous Company Reorganization Act, a determination to grant authorization of a composition plan under the previous Composition Act and a determination to grant authorization of compulsory composition under the previous Bankruptcy Act shall be deemed a determination to grant authorization of a rehabilitation plan under the Debtor Rehabilitation and Bankruptcy Act according to the amended provisions of Article 42 (3).
(2) A determination to grant authorization of a rehabilitation plan under the Debtor Rehabilitation and Bankruptcy Act among the amended provisions of Article 42 (3) shall be deemed a determination to grant authorization of a reorganization plan under the Company Reorganization Act, a determination to grant authorization of composition under the Composition Act and a determination to grant authorization of compulsory composition under the Bankruptcy Act, respectively on or before March 31, 2006.
ADDENDA <Act No. 7908, Mar. 24, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 8141, Dec. 30, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2007: Provided, That the amended provisions of Article 18-2 (1) 1 shall enter into force January 1, 2009, and the amended provisions of Article 25 (2) 2, 66 (2) 3, 76 (11) and (12), 116 (3) and (4), 117 and 117-2, on July 1, 2007.
Article 2 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Holding Company's Received Dividends in Gross Income)
(1) The amended provisions of Article 18-2 (1) 1 shall apply from the first dividend to be distributed on or after January 1, 2009.
(2) The amended provisions of Article 18-2 (1) 2 shall apply the first dividend to be distributed after this Act enters into force.
Article 4 (Applicability to Non-Inclusion of Received Dividends in Gross Income)
The amended provisions of Article 18-3 (2) shall apply from the first dividend to be distributed after this Act enters into force.
Article 5 (Applicability to Non-Inclusion of Entertainment Expenses in Deductible Expenses)
The amended provisions of Article 25 (2) 2 shall apply from what is first issued in return for goods or services provided on or after July 1, 2007.
Article 6 (Applicability to Proceeds from Investment Trusts)
The amended provisions of Articles 29 (1) 1, 57-2 (3), 62 (1) and 73 (1) shall apply from the first investment trust created after this Act enters into force.
Article 7 (Applicability to Tax Credits for Special Purpose Companies, etc.)
The amended provisions of Article 51-2 (1) 5-3, 5-4 and 6 shall apply from the first dividend to be distributed after this Act enters into force.
Article 8 (Applicability to Tax Credits on Tax Paid Overseas)
The amended provisions of Article 57 (5) shall apply from the first dividend to be distributed after this Act enters into force.
Article 9 (Applicability to Special Cases concerning Tax Credits on Tax Paid Overseas by Indirect Investment Companies, etc.)
The amended provisions of Article 57-2 (1) shall apply from the first income to be accrued after this Act enters into force.
Article 10 (Applicability to Correction and Determination)
The amended provisions of Article 66 (2) 3 shall apply from the first of correction made based on the grounds arise on or after July 1, 2007.
Article 11 (Applicability to Penalty Tax, etc.)
(1) The amended provisions of Articles 76 (9) 3 and 120-3 shall apply from the first tax invoice to be issued after this Act enters into force.
(2) The amended provisions of Article 76 (11) and (12) shall apply from the first goods or services to be provided, or to a person obligated to become Cash Receipt merchants, who fails to become such merchant, on or after July 1, 2007.
Article 12 (Applicability to Domestic Source Income)
The amended provisions of subparagraph 11 (g) of Article 93 shall apply from the first income to be accrued after this Act enters into force.
Article 13 (Applicability to Special Cases concerning Withholding or Collection for Foreign Corporations)
(1) The amended provisions of the first sentence of Article 98 (1) shall apply from the first portion to be transferred after this Act enters into force.
(2) The amended provisions of the proviso to Article 98 (1) 3 shall apply from the first interest income to be accrued after this Act enters into force.
Article 14 (Applicability to Receipt and Keeping of Evidentiary Documents of Expenditures)
The amended provisions of Article 116 (3) and (4) shall apply from what is first issued in return for goods or services provided on or after July 1, 2007.
Article 15 (Applicability to Obligation, etc. to Become Credit Card Merchant and to Issue Credit Card Sales Slips)
The amended provisions of Article 117 shall apply from the first goods or services to be supplied on or after July 1, 2007.
Article 16 (Applicability to Obligation, etc. to Become Cash Receipt Merchant and to Issue Cash Receipts)
The amended provisions of Article 117-2 shall apply from the first goods or services to be supplied on or after July 1, 2007.
Article 17 (Applicability to Becoming Cash Receipt Merchants)
Notwithstanding the amended provisions of Article 117-2 (1), a corporation which meets the eligibility requirements to become a Cash Receipt merchant by no later than March 31, 2007 after this Act enters into force may become a Cash Receipt affiliate member by no later than June 30, 2007 after the enforcement date of this Act.
Article 18 (Transitional Measures concerning Non-Inclusion of Evaluation Marginal Profits, etc. in Gross Income)
Notwithstanding the amended provisions of subparagraph 6 of Article 18, the dividend amount of income received before this Act enters into force shall be governed by the previous provisions.
Article 19 (Transitional Measures concerning Penalty Tax)
Notwithstanding the amended provisions of Articles 76 (1) and 90 (1), the penalty tax imposed or to be imposed under the previous provisions of Articles 76 (1) and 90 (1) before this Act enters into force shall be governed by the previous provisions.
ADDENDA <Act No. 8519, Jul. 19, 2007>
(1) (Enforcement Date) This Act shall enter into force on January 1, 2008.
(2) (Applicability to Corporate Tax on Income for each Business Year of Conscientious Small and Medium Corporations) The amended provisions of Chapter II-2 shall apply from the business year in which this Act enters into force.
ADDENDA <Act No. 8631, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8831, Dec. 31, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2008: Provided, That the amended provisions of Article 76 (12) shall enter into force on July 1, 2008.
Article 2 (General Applicability)
This Act shall apply from the business year that begins after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Received Dividends in Gross Income)
The amended provisions of the portion other than subparagraphs of Article 18-3 (1) and subparagraph 4 of the same paragraph shall apply from the first dividend to be distributed after this Act enters into force.
Article 4 (Applicability to Inclusion of Value of Business Assets Acquired with National Subsidies in Deductible Expenses)
The amended provisions of Article 36-2 shall apply from the first National subsidy to be granted after this Act enters into force.
Article 5 (Applicability to Tax Credits on Tax Paid Overseas)
The amended provisions of Article 57 (5) shall apply from the first dividends to be distributed after this Act enters into force.
Article 6 (Applicability to Determination and Correction)
The amended provisions of Article 66 (2) 3 (a) shall apply from a determination or correction to be made in connection with the first business year that begins after this Act enters into force.
Article 7 (Applicability to Determination of Occasional Imposition)
The amended provisions of Article 69 (2) shall apply from the first grounds for occasional imposition arises after this Act enters into force.
Article 8 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (10) shall apply from the first false donation receipt to be issued or the detailed statement of issuance by donating corporation is not prepared and kept after this Act enters into force.
(2) The amended provisions of Article 76 (12) shall apply from the first goods or services to be supplied after this Act enters into force.
Article 9 (Applicability to Domestic Source Income)
The amended provisions of subparagraph 10 of Article 93 shall apply from the first portion to be transferred after this Act enters into force.
Article 10 (Applicability to Special Cases concerning Report, Payment, etc. on Capital Gains on Transfer of Securities by Foreign Corporations)
The amended provisions of Article 98-2 (3) and (4) shall apply from the first portion to be transferred after this Act enters into force.
Article 11 (Applicability to Obligation to Prepare and Keep Detailed Statement of Donation Receipts Issued)
The amended provisions of Article 112-2 (1) shall apply from the first donation received after this Act enters into force.
Article 12 (Applicability to Obligation, etc. to Become Credit Card Merchants and to Issue Credit Card Sales Slips)
The amended provisions of Article 117 (2) shall apply from the first goods or services to be supplied after this Act enters into force.
Article 13 (Applicability to Submission of Detailed Statements of Changes in Stocks, etc.)
The amended provisions of Article 119 (2) shall apply from the first detailed statement to be submitted after this Act enters into force.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 9267, Dec. 26, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2009: Provided, That the amended provisions of Articles 55 (1), 76 (4) and 115, and the proviso to Article 117 (2) shall enter into force on the date of its promulgation, the amended provisions of Articles 5 (2), 18-2 (1) 1, 18-3 (1) 1, 51-2 (1) 2 (excluding provisions concerning private equity funds participating in management), 57-2 (1) and (5), 66 (2) 4, 73 (1) 2, 98 (6), 113 (2) and 119 (2) shall enter into force on February 4, 2009, and the amended provisions of subparagraphs 6 through 10 of Article 1, Articles 2 (4) and (5), 3 (2), and 8 (4) through (6), subparagraph 9 of Article 18, provisions concerning Article 76-14 in the main body of Article 18-2 (1), subparagraph 7 of Article 21, Article 63 (4), Chapter II-3 (Articles 76-8 through 76-22) and Article 113 (5) shall enter into force on January 1, 2010. <Amended by Act No. 13448, Jul. 24, 2015>
Article 2 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force.
Article 3 (Applicability to Deduction of Losses Carried Forward)
The amended provisions of subparagraph 1 of Article 13 and Article 91 (1) 1 shall apply from losses to be incurred in the first business year that begins after this Act enters into force.
Article 4 (Applicability to Non-Inclusion of Received Dividends in Gross Income)
The amended provisions of Articles 18-2 (1) and 18-3 (1) shall apply from the first dividend to be distributed after this Act enters into force.
Article 5 (Applicability to Succession to Losses Carried Forward following Merger)
The amended provisions of Article 45 shall apply from the first merger to be conducted after this Act enters into force.
Article 6 (Applicability to Inclusion of Amount Equivalent to Marginal Profits on Transfer of Assets in Deductible Expenses following Investment in Kind)
The amended provisions of Article 47-2 shall apply from the first investment in kind to be made after this Act enters into force.
Article 7 (Applicability to Tax Credits for Losses from Disasters)
The amended provisions of Article 58 (1) shall apply from the first application for tax credits for losses from disasters to be filed after this Act enters into force.
Article 8 (Applicability to Payment in Installments)
The amended provisions of Article 64 (2) shall apply from the first payment to be made after this Act enters into force.
Article 9 (Applicability to Refund by Retroactive Deduction of Losses)
The amended provisions of Article 72 (5) shall apply from the first refund to be made after this Act enters into force. <Amended by Act No. 12850, Dec. 23, 2014>
Article 10 (Applicability to Obligation to Submit Combined Financial Statements)
The amended provisions of Articles 76 (4) and 115 shall apply from the business year in which this Act enters into force.
Article 11 (Applicability to Domestic Source Income of Foreign Corporations)
(1) The amended provisions of subparagraphs 7 and 10 of Article 93 shall apply from the first portion to be transferred after this Act enters into force.
(2) The amended provisions of subparagraph 9 of Article 93 shall apply from the first income to be accrued after this Act enters into force.
Article 12 (Applicability to Withholding of Domestic Source Income of Foreign Corporations)
The amended provisions of Article 98 (1) shall apply from the first payment to be made after this Act enters into force.
Article 13 (Applicability to Special Cases concerning Reports and Payment of Income of Foreign Corporation from Personal Services)
The amended provisions of Article 99 shall apply from the first personal services to be supplied after this Act enters into force.
Article 14 (Applicability to Issuance of Credit Card Sales Slips)
The amended provisions of the proviso to Article 117 (2) shall apply from the first goods and services to be supplied in the business year in which this Act enters into force.
Article 15 (Special Cases concerning Tax Rates)
Notwithstanding the amended provisions of Article 55 (1), the tax rates for the business year in which this Act enters into force shall be as stipulated in the following Table:
Tax Base Tax Rate
Not exceeding 200 million won11/100 of tax base
Exceeding 200 million won 22,000,000 won + 25/100 of the amount exceeding 200 million won
Article 16 (Special Cases concerning Interim Prepayment)
(1) The calculated amount of tax determined as corporate tax for the business year immediately preceding the relevant business year prescribed in Article 63 (1) when interim tax is calculated for the interim prepayment period of the business year that begins after January 1, 2009 shall be calculated by applying the amended provisions of Article 55 (1) 1 to the tax base for the immediately preceding business year.
(2) The calculated amount of tax determined as corporate tax for the business year immediately preceding the relevant business year prescribed in Article 63 (1) when interim tax is calculated for the interim prepayment period of the business year that begins after January 1, 2010 shall be calculated by applying the amended provisions of Article 55 (1) 2 to the tax base for the immediately preceding business year.
Article 17 (Special Cases concerning Tax Base of Consolidated Tax Return System)
Where the amended provisions of Article 76-13 (1) 1 is applied to the losses of a consolidated corporation accrued in the business year that began before January 1, 2009, ten years shall be deemed five years.
Article 18 (Special Cases concerning Enforcement Date of the Financial Investment Services and Capital Markets Act)
(1) "Investment trust property under the Financial Investment Services and Capital Markets Act" referred to in the amended provisions of Article 73 (2) shall be construed as "investment trust property under the Indirect Investment Asset Management Business Act" until February 3, 2009.
(2) "Securities market under the Financial Investment Services and Capital Markets Act" referred to in the amended provisions of subparagraph 7 (b) of Article 93, the main body of subparagraph 10 of the same Article, and item (b) of the same subparagraph shall be construed as "securities market or KOSDAQ market under the Securities and Exchange Act" until February 3, 2009.
Article 19 (General Transitional Measures)
The former provisions shall apply to the corporate tax (including penalty tax) imposed or to be imposed under the former provisions as at the time this Act enters into force.
Article 20 (Transitional Measures concerning Income Deduction for Private Equity Funds, etc. Participating in Management)
(1) Where a private equity fund participating in management or specialized overseas resources development company registered with the Financial Services Commission as prescribed in Article 144-6 of the Indirect Investment Asset Management Business Act before this Act enters into force fails to file a request for the application of special taxation for partnership firms under Article 100-17 of the Restriction of Special Taxation Act within one month from the beginning of the first business year that begins after this Act enters into force, the former provisions shall apply until the business year in which the registration date of dissolution of the relevant corporation falls, notwithstanding the amended provisions of Article 51-2 (1) 2 and 5. In such cases, the relevant corporation is ineligible for the application of Section 10-3 of the Restriction of Special Taxation Act until the business year in which the registration date of dissolution falls. <Amended by Act No. 13448, Jul. 24, 2015>
(2) Where a private equity fund participating in management or specialized overseas resources development company registered at the Financial Services Commission as prescribed in Article 144-6 of the Indirect Investment Management Business Act before this Act enters into force files a request for the application of special taxation for partnership firms under Article 100-17 of the Restriction of Special Taxation Act within one month from the beginning of the first business year that begins after this Act enters into force, the former provisions shall apply to the dividend for the relevant business year for the purposes of calculating the corporate tax on the income of the business year that begins before this Act enters into force, notwithstanding the amended provisions of Article 51-2. <Amended by Act No. 13448, Jul. 24, 2015>
Article 21 (Transitional Measures concerning Repeal of Withholding of Income Reverting to Trust Property)
Where trust property sells bonds, etc., acquired by no later than June 30, 2005, or pays interest, etc., thereon (limited to where interest, etc., are not paid between July, 1, 2005 and December 31, 2008) after January 1, 2009, the former provisions shall apply, notwithstanding the amended provisions of Article 73.
ADDENDA <Act No. 9401, Jan. 30, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 11 Omitted.
ADDENDA <Act No. 9673, May 21, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Special Cases concerning Taxation on Capital Gain on Transfer of Land, etc.)
The amended provisions of Article 55-2 shall apply from the first transfer on or after March 16, 2009.
Article 3 (Applicability to Special Cases concerning Taxation on Interest or Capital Gains of Foreign Corporations on Transfer of State Bonds, etc.)
The amended provisions of Article 93-2 shall apply from the first payment or transfer after this Act enters into force.
Article 4 (Special Cases concerning Special Cases concerning Taxation on Capital Gains on Transfer of Land)
Article 55-2 (1) 2 and 3 shall not apply to capital gains generated from the transfer of assets which are acquired from March 16, 2009 to December 31, 2010.
ADDENDA <Act No. 9763, Jun. 9, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force nine months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 9898, Dec. 31, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2010: Provided, That the amended provisions of Article 51-2 (2) shall enter into force on the date of its promulgation, the amended provision of Article 117-2 (4) shall enter into force on April 1, 2010 and the amended provisions of Articles 16 (1), 17 (1), 24 (1), 44, 44-2, 44-3, 45, 46, 46-2 through 46-5, 47, 47-2, 48, 48-2, 49, 60 (4), 77, 80, 81, 84, 86 (2) and 113 (3) and (4) shall enter into force on July 1, 2010.
Article 2 (General Applicability)
This Act shall apply from the business year that begins after this Act enters into force.
Article 3 (Applicability to Scope of Taxable Income)
The amended provisions of Article 3 (3) shall apply from the transfer after this Act enters into force.
Article 4 (Applicability to Tax Bases)
The amended provisions of Articles 13, 76-13 (2) and 91 (1) shall apply from the first tax base to be reported or corrected or determined after this Act enters into force: Provided, That the previous provision shall apply where the tax base was reported, corrected or determined prior to December 31, 2009 for deduction of losses not included in the tax base reported, corrected or determined.
Article 5 (Applicability to Non-Inclusion of Donations in Deductible Expenses)
The amended provisions of Article 24 (3) shall apply from the first donation to be made after this Act enters into force.
Article 6 (Applicability to Taxation upon Merger, Division, etc.)
The amended provisions of Articles 16 (1), 17 (1), 24 (1), 44, 44-2, 44-3, 45, 46, 46-2 through 46-5, 47, 48, 48-2, 49, 60 (4), 77, 80, 81, 84, 86 (2) and 113 (3) and (4) shall apply to the first merger, division or investment in kind to be conducted or made after the same provisions enter into force under the proviso to Article 1 of this Addenda.
Article 7 (Applicability to Tax Bases due to Consolidated Tax Return System)
The amended provisions of Article 76-13 shall apply to a portion to which the consolidated tax return system applies on or after January 1, 2010.
Article 8 (Applicability to Special Cases concerning Taxation upon Investment in Kind)
The amended provisions of Article 47-2 shall apply to the first investment in kind to be made after the same provisions under the proviso to Article 1 of this Addenda enters into force.
Article 9 (Applicability to Income Deduction for Special Purpose Companies, etc.)
The amended provisions of Article 51-2 (2) shall apply from the business year in which such same provisions enters into force under the proviso to Article 1 of this Addenda.
Article 10 (Applicability to Deduction, etc. for Tax Credits, etc. for Amount of Tax Paid Overseas)
The amended provisions of Article 57 (5) shall apply to the first dividends or distributions granted after this Act enters into force.
Article 11 (Applicability to Withholding)
The amended provisions of Article 73 (1) shall apply the first income to be accrued after this Act enters into force.
Article 12 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (5) shall apply from the first goods or services to be supplied after this Act enters into force.
(2) The amended provisions of Article 76 (10) shall apply from the first donation received after this Act enters into force.
Article 13 (Applicability to Special Cases concerning Taxation on Interest or Capital Gains of Foreign Corporations on Transfer of State Bonds, etc.)
The amended provisions of Article 93-2 (4) shall apply from the first withholding made after this Act enters into force.
Article 14 (Applicability to Special Cases concerning Withholding Tax from Bonds, etc. of Foreign Corporations)
The amended provisions of Article 98-3 (1) shall apply from the first purchase after this Act enters into force.
Article 15 (Applicability to Obligation to Issue Cash Receipts)
The amended provisions of Article 117-2 (4) shall apply from goods or services to be supplied after the same provisions enter into force under the proviso to Article 1 of this Addenda.
ADDENDA <Act No. 9924, Jan. 1, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2010.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 10221, Mar, 31, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2011.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 10337, May 31, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 10361, Jun. 8, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Act No. 10423, Dec. 30, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2011: Provided, That the amended provisions of Articles 23 (excluding paragraph (1)), 28 (2), 41 (1) 1, 53-2, 53-3, 60 (2) and (4), and the proviso to Article 96 (1) shall enter into force on the date of their promulgation, the amended provision of Articles 73 (1) 2, (8), (9), 74 (2), 98-3 (1), (4) and (6) shall enter into force on April 1, 2011, the amended provisions of Articles 24 (2) and (3) and 112-2 (1) shall enter into force on July 1, 2011, and the amended provision of subparagraph 2 of Article 21 shall enter into force January 1, 2019. <Amended by Act No. 11603, Jan. 1, 2013; Act No. 13550, Dec. 15, 2015>
Article 2 (General Applicability)
This Act shall apply from the first business year that begins after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Depreciation Costs in Deductible Expenses)
The amended provisions of Article 23 (excluding paragraph (1)) shall apply from the business year in which the amended provisions of Article 23 (excluding Article 23 (1)) enter into force under the proviso to Article 1 of the Addenda belongs.
Article 4 (Applicability to Increase of Ceiling on Income Deduction of Designated Donations)
The amended provisions of Article 24 (1) shall apply from the first donations to be expended after this Act enters into force.
Article 5 (Applicability to Rearrangement of Objects of Statutory Donations)
The amended provisions of Articles 24 (2) and (3) and 112-2 (1) shall apply from the first donations to be expended after the amended provisions of Articles 24 (2) and (3) and 112-2 (1) enter into force under the proviso to Article 1 of the Addenda.
Article 6 (Applicability to Non-Inclusion of Interest Paid in Deductible Expenses)
The amended provisions of Article 28 (2) shall apply from the business year in which the amended provisions of Article 28 (2) enter into force under the proviso to Article 1 of the Addenda.
Article 7 (Applicability to Reserve Funds for Proper Purpose Business)
The amended provisions of Article 29 (3), (4) and (8) shall apply from the first registration of liquidation after this Act enters into force.
Article 8 (Applicability to National Subsidies, etc.)
The amended provision of Article 36 (1) shall apply from the assets to be acquired or improved after this Act enters into force.
Article 9 (Applicability to Acquisition Value of Assets)
The amended provision of Article 41 (1) 1 shall apply from the business year in which the amended provisions of Article 41 (1) 1 enter into force under the proviso to Article 1 of the Addenda in cases of corporations which apply the international accounting standards as at the time this Act enters into force and from the business year that begins on or after January 1, 2011 in cases of other corporations.
Article 10 (Applicability to Reduction of Requirements for Special Cases concerning Taxation on Merger by Special Purpose Acquisition Companies)
The amended provision of the proviso to Article 44 (2) 1 shall apply from the first merger after this Act enters into force.
Article 11 (Applicability to Special Cases concerning Calculation of Tax Base of Corporation Adopting Functional Currency)
The amended provisions of Article 53-2 shall apply from the business year in which the amended provisions of Article 53-2 enter into force under the proviso to Article 1 of the Addenda.
Article 12 (Applicability to Special Cases concerning Calculation of Tax Bases of Overseas Places of Business)
The amended provisions of Article 53-3 shall apply from the business year in which the amended provisions of Article 53-3 enter into force under the proviso to Article 1 of the Addenda in cases of corporations that apply the international accounting standards as at the time this Act enters into force, and from the business year which begins on or after January 1, 2011 in cases of other corporations.
Article 13 (Applicability to Special Cases concerning Taxation on Capital Gains on Transfer of Land, etc.)
The amended provisions of Article 55-2 (1) 1 and (8) shall apply from the first transfer to be made after January 1, 2011.
Article 14 (Applicability to Reports on Tax Base, etc.)
The amended provisions of Article 60 (2) and (4) shall apply from the business year in which the amended provisions of Article 60 (2) and (4) enter into force under the proviso to Article 1 of the Addenda.
Article 15 (Applicability to Withholding upon Early Sale of Bonds, etc.)
The amended provisions of Articles 73 (1) 2, (8) and (9), 74 (2), 98-3 (1), (4) and (6) shall apply from the first sale to be made after the amended provisions of Articles 73 (1) 2, (8) and (9), 74 (2), 98-3 (1), (4) and (6) enters into force under the proviso to Article 1 of the Addenda.
Article 16 (Applicability to other Documents to Accompany Reports on Consolidated Tax Base)
The amended provision of Article 76-17 (2) shall apply from the first report to be filed after this Act enters into force.
Article 17 (Applicability to Final Report and Interim Report on Liquidation Income)
The amended provisions of Articles 84 (1) and 85 (1) shall apply from the first registration of liquidation to be filed after this Act enters into force.
Article 18 (Applicability to Domestic Place of Business of Foreign Corporation)
The amended provision of Article 96 (1) shall apply from the business year in which the amended provisions of Article 96 (1) enter into force under the proviso to Article 1 of the Addenda.
Article 19 (Applicability to Special Cases concerning Withholding or Collection from Foreign Corporation)
The amended provision of Article 98 (10) shall apply from the first assets to be transferred after this Act enters into force.
Article 20 (Applicability to Special Cases concerning Taxation on Interest on State Bonds, etc. and Capital Gains of Foreign Corporation and Transitional Measures)
(1) The amended provisions of Articles 93-2 and 98 (2) shall apply from the first income to be accrued after this Act enters into force.
(2) Notwithstanding the amended provisions of Article 93-2 and 98 (2), the previous provisions shall apply to income accruing from the State bonds, etc., acquired on or before November 12, 2010.
Article 21 (Transitional Measures concerning Corporate Tax on Income for each Business Year of Conscientious Small and Medium Corporations)
Any corporation approved as a conscientious small or medium corporation under the former Article 76-2 (2) before this Act enters into force may calculate, file and pay the tax base of corporate tax on income for each business year and the amount of tax until the business year in which December 31, 2013 falls by a conscientious tax payment method referred to in Articles 76-2 through 76-7.
ADDENDA <Act No. 10898, Jul. 25, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10907, Jul. 25, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 11128, Dec. 31, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2012: Provided, That the amended provisions of Articles 42-2, 47 (2) though (4), 47-2 (2) and (3), 57 (4), 76-14 (1) 4 and 96 (2) 1 (b) shall enter into force on the date of its promulgation, the amended provisions of Articles 16 (1) 5, 17 (1) 1, subparagraph 8 of Article 18, subparagraph 2 of Article 20, 44 (2) 2 and the amended part concerning non-par value stocks under the amended provision of Article 76 (3) shall enter into force on April 15, 2012, the amended provisions of Articles 9 (4), 75, the main sentence other than each subparagraph of Article 91 (1), Article 91 (3), the main sentence of Article 98-5 (1) (limited to the amended parts of Articles 98, 98-2 through 98-4 and 98-6) and Article 98-6 shall enter into force on July 1, 20102.
Article 2 (General Applicability)
This Act shall apply from the first business year which begins after this Act enters into force.
Article 3 (Applicability to Costs of Merger)
The amended provisions of Articles 16 (1) 5 and 44 (2) 2 shall apply from the first merger on or after April 15, 2012.
Article 4 (Applicability to Non-Inclusion of Gains from Capital Transactions in Gross Income)
The amended provisions of Article 17 (1) 1 shall apply from the first non-par value stocks to be issued on or after April 15, 2012.
Article 5 (Applicability to Non-Inclusion of Evaluation Marginal Profits in Gross Income)
The amended provisions of subparagraph 8 of Article 18 shall apply from the first dividends to be distributed upon reducing the capital reserve funds on or after April 15, 2012.
Article 6 (Applicability to Non-Inclusion of Donations in Deductible Expenses)
The amended provisions of Articles 24 (2) 4 (b) and (h) and (4) shall apply from the first donations to be given on or after January 1, 2012.
Article 7 (Applicability to Non-Inclusion of Entertainment Expenses in Deductible Expenses)
The amended provisions of the proviso to Article 25 (2) shall apply from the first entertainment expenses to be expended on or after January 1, 2012.
Article 8 (Applicability to Non-Inclusion of Evaluation Marginal Profits of Inventory Assets in Gross Income on Domestic Corporation Adopting International Accounting Standards)
The amended provisions of Article 42-2 shall apply from the first business year in which this Act is promulgated.
Article 9 (Applicability to Special Cases concerning Taxation upon Merger between Parent Corporation and Subsidiary Corporation)
The amended provisions of Article 44 (3) shall apply from the first merger on or after January 1, 2012.
Article 10 (Applicability to Restriction on Deduction of Losses on Disposition of Assets upon Merger or Division and Merger)
The amended provisions of Articles 45 (3) and 46-4 (3) shall apply from the first merger or the division and merger on or after January 1, 2012.
Article 11 (Applicability to Special Cases concerning Taxation upon Spin-Off)
(1) The amended provisions of Article 47 (2) through (4) shall apply from the spin-off made under Article 47 (1) in the business year in which this Act is promulgated.
(2) Where a corporation established through division files a report on the tax base under Article 60 (1) after acquiring the assets of a divided corporation at the book value pursuant to the previous Article 47 (2) prior to the date of the promulgation of this Act, the divided corporation and the corporation established through division may apply the amended provisions of Article 47 (2) through (4) when filing a report on the tax base under Article 60 (1) after this Act enters into force.
Article 12 (Applicability to Application of Special Cases concerning Taxation upon Investment in Kind)
(1) The amended provisions of Article 47-(2) and (3) shall apply from the investment in kind made under Article 47-2 (1) in the business year in which this Act is promulgated.
(2) Where an invested corporation files a report on the tax base under Article 60 (1) after acquiring the assets of an investing corporation at the book value pursuant to the previous Article 47-2 (2) prior to the date of the promulgation of this Act, the investing corporation and the invested corporation may apply the amended provisions of Article 47-2 (2) and (3) when filing a report on the tax base under Article 60 (1) after this Act enters into force.
Article 13 (Applicability to Foreign Tax Credits, etc.)
The amended provisions of Article 57 (4) shall apply from the business year in which this Act is promulgated.
Article 14 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (3) (excluding the amended part concerning non-par value stocks) shall apply the first domestic corporation which files a report on incorporation on or after January 1, 2012.
(2) The amended provisions of Article 76 (9) shall apply the first invoice not issued or issued or to be issued on or after January 1, 2012.
Article 15 (Applicability to Non-Inclusion of Consolidated Subsidiary Corporation and Consolidated Interim Prepayment)
The amended provisions of the proviso to Article 76-12 (1) and 76-18 (4) shall apply from the first consolidated subsidiary corporation to be merged by absorption on or after January 1, 2012.
Article 16 (Applicability to Calculation of Amount of Income for each Consolidated Business Year)
(1) The amended provisions of Article 76-14 (1) 4 shall apply from a portion of the business year in which this Act is promulgated.
(2) The amended provisions of Article 76-14 (2) 2 shall apply from the first asset to be disposed of on or after January 1, 2012.
Article 17 (Applicability to Calculation of Amount of Liquidation Income due to Dissolution)
The amended provisions of Article 79 (5) shall apply from the first corporation to be dissolved on or after January 1, 2012.
Article 18 (Applicability to Interim Reports)
The amended provisions of the main sentence other than each subparagraph of Article 85 (1) shall also apply to a corporation, with relation to which the deadline for interim report has not expired by January 1, 2012.
Article 19 (Applicability to Calculation of Amount of Domestic Source Income)
The amended provisions of Article 92 (2) 2 (b) shall apply from the first stocks, etc. or other securities to be transferred after January 1, 2012.
Article 20 (Applicability to Special Cases concerning Taxation on Domestic Place of Business of Foreign Corporation)
The amended provisions of Article 96 (2) (b) shall apply from a portion of the business year in which this Act is promulgated.
Article 21 (Applicability to Special Cases concerning Report, Payment, etc. on Capital Gains, etc. on Transfer of Securities by Foreign Corporations)
The amended provisions of Article 98-2 (4) shall apply from the first asset to be gifted on or after January 1, 2012.
Article 22 (Applicability to Special Cases concerning Withholding Procedures for Foreign Corporations)
The amended provisions of the main sentence of Article 98-5 (1) (limited to the amended provisions of subparagraphs 1 and 2 of Article 93 and subparagraphs 7 (b) and 8 of Article 93) shall apply from the first domestic source income to be withheld on or after January 1, 2012.
Article 23 (Applicability to Special Cases concerning Withholding Procedures to Apply Restrictive Tax Rates under Tax Treaties to Foreign Corporations)
The amended provisions of Article 98-6 shall apply from the first domestic source income to be withheld on or after July 1, 2012.
Article 24 (Applicability to Submission of Detailed Statement of Shareholders, etc.)
The amended provisions of Article 109 (1) shall apply from the first report on incorporation to be filed on or after January 1, 2012.
Article 25 (Applicability to Submission of Payment Statements)
The amended provisions of Article 120 shall apply from the first income to be paid on or after January 1, 2012.
Article 26 (Special Cases concerning Interim Prepayment due to Changes in Corporate Tax Rate)
When interim tax is calculated for the interim prepayment period of the business year which begins on or after January 1, 2012, the calculated amount of tax determined as corporate tax for the immediately preceding business year under Article 63 (1) shall be calculated by applying the amended provisions of Article 55 (1) to the tax base for the immediately preceding business year.
Article 27 (Transitional Measures concerning Dividends on Construction Interest)
Notwithstanding the amended provisions of subparagraph 2 of Article 20, the previous provisions shall apply to the dividends on the construction interest to be accrued on or before April 15, 2012.
Article 28 (Transitional Measures concerning Period of Inclusion of Carried Forwarded Statutory Donations in Deductible Expenses)
Notwithstanding the amended provisions of Article 24 (4), the previous provisions shall apply to the statutory donations paid on or before January 1, 2012.
Article 29 (Transitional Measures concerning Citation of other Acts and Subordinated Statues)
"Industrial-academia cooperation groups under the Industrial Education and Industry-Academia-Research Cooperation Promotion Act" of the amended provisions of the main sentence, other than each subparagraph of Article 63 (1), shall be deemed the industry-academia cooperation groups under the Promotion of Industrial Education and Industry-Academic Cooperation Act" by January 25, 2012.
Article 30 (Transitional Measures concerning Penalty Tax on Negligence in Paying Withheld Tax)
Notwithstanding the amended provisions of Articles 71 (3), 76 (2), 98 (3) and the main sentence of Article 98 (4), the previous provisions shall apply to obligation to pay the corporate tax that arose on or before January 1, 2012.
ADDENDA <Act No. 11603, Jan. 1, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2013.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 11607, Jan. 1, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2013.
Article 2 (General Applicability)
This Act shall apply to business years that begin on or after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Donations in Deductible Expenses)
The amended provisions of Article 24 (2) 4 (d) shall apply to expenses disbursed on or after this Act enters into force.
Article 4 (Applicability of Special Provisions regarding Taxation on Divided Corporations upon Spin-off)
The amended provisions of Article 47 (2) shall apply where a divided corporation disposes stocks, etc. or a corporation established through division disposes of assets on or after this Act enters into force.
Article 5 (Applicability of Special Provisions regarding Taxation on Investment in Kind)
The amended provisions of Article 47-2 (2) shall apply where an investing corporation disposes of stocks, etc. or an invested corporation disposes of assets on or after this Act enters into force.
Article 6 (Applicability of Special Provisions regarding Taxation on Income from Transfer of Land, etc.)
The amended provisions of Article 55-2 shall apply to the land, etc. transferred on or after this Act enters into force.
Article 7 (Applicability to Withholding)
The amended provisions of Article 73 (6) shall apply to income paid on or after this Act enters into force.
Article 8 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (3) shall apply where a report on incorporation or an application for business registration is filed on or after this Act enters into force.
(2) The amended provisions of Article 76 (9) shall apply where a tax base or tax amount is reported, determined, or rectified on or after this Act enters into force.
(3) The amended provisions of Article 76 (10) shall apply to donation receipts issued on or after this Act enters into force.
Article 9 (Applicability to Application of Consolidated Tax Return System)
The amended provisions of Articles 76-8 through 76-11 shall apply where the application of the consolidated tax return system is approved, revoked, or abandoned or a change in a consolidated subsidiary is reported on or after this Act enters into force.
Article 10 (Applicability of Special Provisions regarding Withholding or Collection from Foreign Corporations)
The amended provisions of Article 98 (1) 3 shall apply to income paid on or after this Act enters into force.
Article 11 (Applicability to Reporting on Incorporation and Business Registration)
The amended provisions of Articles 109 (1) and 111 (1) shall apply to a report on incorporation or an application for business registration filed on or after this Act enters into force.
Article 12 (Applicability to Separate Accounting)
The amended provisions of Article 113 (3) through (5) shall apply where corporations are merged or divided and merged on or after this Act enters into force.
Article 13 (Applicability to Obligation to File Payment Statements)
The amended provisions of Article 120 (1) shall apply to income paid on or after this Act enters into force.
Article 14 (Applicability to Application, etc. of Consolidated Tax Return System)
If the application of the consolidated tax return system has been approved by the Commissioner of the National Tax Service under the previous provisions of Article 76-8 (1) before this Act enters into force, it shall be deemed that the application of the consolidated tax return system is approved by the Commissioner of the competent Regional Tax Office having jurisdiction over the place of tax payment of the wholly-owning parent corporation under the amended provisions of Article 76-8 (1).
ADDENDA <Act No. 11873, Jun. 7, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2013.
Articles 2 through 19 Omitted.
ADDENDA <Act No. 12153, Jan. 1, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2014. (Proviso Omitted.)
Articles 2 through 19 Omitted.
ADDENDA <Act No. 12166, Jan. 1, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2014: Provided, That the amended provisions of Article 117-2 shall enter into force on July 1, 2014.
Article 2 (General Applicability)
This Act shall apply to taxation for business years that begin on or after this Act enters into force.
Article 3 (Applicability to Addition of Incheon National University to Organizations Eligible for Statutory Donations)
The amended provisions of Article 24 (2) 4 (h) shall apply to donations reported on or after this Act enters into force.
Article 4 (Applicability to Extension of Period for Carrying Forward and Deduction of Excess of Ceilings on Inclusion of Statutory Donations in Deductible Expenses)
The amended provisions of Article 24 (4) shall apply to donations given during the business years that begin on or after this Act enters into force.
Article 5 (Applicability to Inclusion of Construction Charges Received After Acquisition of Fixed Assets in Deductible Expenses)
The amended provisions of Article 37 (1) shall apply to fixed assets acquired on or after this Act enters into force.
Article 6 (Applicability to Criteria for Determination as to Independence of Business Divisions)
The amended provisions of Article 46 (3) shall apply to corporations divided on or after this Act enters into force.
Article 7 (Applicability to Requirements for Follow-Up Management of Disposal of Stocks of Properly Divided Corporation upon Spin-Off)
The amended provisions of Article 47 (3) 2 shall apply to divisions after which the stocks, etc. issued by the corporation established through division and held by the divided corporation are reduced from at least 50/100 of the total number of issued stocks of, or the total investment amount in, the corporation established through division to less than 50/100.
Article 8 (Applicability to Special Provisions concerning Taxation on Capital Gains on Transfer of Land, etc.)
The amended provisions of Article 55-2 shall apply to the property transferred on or after this Act enters into force: Provided, That Article 55-2 (1) shall not apply where a small or medium enterprise defined under Article 25 (1) 1 transfers a residential house or a parcel of land for non-business purposes (excluding unregistered land) on or before December 31, 2015. <Amended by Act No. 12850, Dec. 23, 2014>
Article 9 (Applicability to Special Provisions regarding Deduction of Foreign Corporate Taxes Paid by Indirect Investment Companies, etc.)
The amended provisions of Article 57-2 (1) shall apply to the income for the business year in which this Act enters into force and afterward.
Article 10 (Applicability to Obligation to Prepare and Keep Detailed Statements of Issuance of Donation Receipts and Penalty Tax thereon)
The amended provisions of Articles 76 (10) and 112-2 shall apply to donations given on or after this Act enters into force.
Article 11 (Applicability to Adjustment of Deadline for Reporting on Addition, etc. of Consolidated Subsidiary Corporations)
The amended provisions of Article 76-11 shall apply to changes that occurs to a consolidated subsidiary corporation on or after this Act enters into force.
Article 12 (Applicability to Special Provisions concerning Withholding or Collection from Foreign Corporations)
(1) The amended provisions of Article 98 (8) shall apply to the earnings paid on or after this Act enters into force.
(2) The amended provisions of Article 98 (10) shall apply to the earnings allocated or distributed on or after this Act enters into force.
Article 13 (Applicability to Non-Taxation or Tax Exemption on Foreign Corporations under Tax Treaties)
The amended provisions of Article 98-4 shall apply to domestic source income paid on or after this Act enters into force.
Article 14 (Applicability to Petition for Correction for Application of Restrictive Tax Rates under Tax Treaties to Foreign Corporations)
The amended provisions of Article 98-6 (4) shall apply to requests filed for corrections on or after this Act enters into force.
Article 15 (Applicability to Threshold Amount for Compulsory Issuance of Cash Receipts)
The amended provisions of the main sentence of Article 117-2 (4) shall apply to goods supplied or services provided on or after July 1, 2014.
Article 16 (Transitional Measure concerning Requirements for Follow-Up Management of Disposal of Stocks of Properly Divided Corporation upon Spin-Off)
Notwithstanding the amended provisions of Article 47 (3) 2, the former provisions shall apply where the stocks, etc. issued by the corporation established through division and held by the divided corporation are less than 50/100 of the total number of issued stocks of, or the total investment amount in, the corporation established through division as at the time this Act enters into force.
Article 17 (Transitional Measure concerning Special Cases for Deduction of Foreign Corporate Tax Paid by Indirect Investment Companies, etc.)
Notwithstanding the amended provisions of Article 57-2 (1), former provisions shall apply where a privately placed fund participating in management, as defined by Article 9 (19) 1 of the Financial Investment Services and Capital Markets Act, fails to file an application for the special taxation for a partnership firm under Article 100-17 of the Restriction of Special Taxation Act pursuant to Article 20 (1) of the Addenda to the partial amendment (Act No. 9267) to the Corporate Tax Act, until the business year in which the dissolution of the relevant corporation is registered. <Amended by Act No. 13448, Jul. 24, 2015>
[This Article Newly Inserted by Act No. 12850, Dec. 23, 2014]
ADDENDA <Act No. 12420, Mar. 18, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 12850, Dec. 23, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2015: Provided, That the amended provisions of Article 121 (1), (5) and (7) shall enter into force on July 1, 2015 and the amended provisions of Article 76 (9) shall enter into force on January 1, 2016.
Article 2 (General Applicability)
This Act shall apply to the business year that begins after this Act enters into force and thereafter.
Article 3 (Applicability to Special Cases concerning Taxation on Capital Gains on Land, etc.)
The amended provisions of Article 55-2 (1) 2, (2) 6, and (6) shall begin to apply from the first real estate, etc. to be transferred after this Act enters into force and thereafter.
Article 4 (Applicability to Penalty Tax)
(1) The amended provisions of Article 76 (7) shall begin to apply from the deadline for submission of payment statements arriving after this Act enters into force.
(2) The amended provisions of Article 76 (9) shall begin to apply from goods or services to be supplied after this Act enters into force.
Article 5 (Applicability to Preparation, Issuance, etc. of Invoices)
The amended provisions of Article 121 (1), (5), and (7) shall begin to apply from goods or services to be supplied after this Act enters into force.
ADDENDA <Act No. 13230, Mar. 27, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 13426, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 39 Omitted.
ADDENDA <Act No. 13448, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 20 Omitted.
ADDENDA <Act No. 13499, Aug. 28, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force four months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 16 Omitted.
ADDENDA <Act No. 13550, Dec. 15, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on December 31, 2015.
Article 2 Omitted.
ADDENDA <Act No. 13555, Dec. 15, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2016.
Article 2 (General Applicability)
This Act shall begin to apply from the first business year that begins after this Act enters into force.
Article 3 (Applicability to Special Cases concerning Non-Inclusion, etc. of Expenses Incurred in Passenger Vehicles for Business Use in Deductible Expenses)
(1) The amended provisions of Article 27-2 (1) shall begin to apply from the passenger vehicles acquired in the business year that begins after this Act enters into force.
(2) The amended provisions of Article 27-2 (2) and (3) shall begin to apply from expenses included in deductible expenses or expended in the business years that begins after this Act enters into force.
(3) The amended provisions of Article 27-2 (4) shall begin to apply from the amount accrued in the business years that begins after this Act enters into force.
Article 4 (Applicability to Scope of Inclusion of Reserve Funds for Proper Purpose Business in Deductible Expenses)
The amended provisions of Article 29 (1) shall begin to apply from the reserve funds for proper purpose business included in deductible expenses for the business years after this Act enters into force: Provided, That the amended provisions shall begin to apply to the reserve funds for proper purpose business included in deductible expenses for the business years after January 1, 2017, in cases of a nonprofit domestic corporation incorporated pursuant to a Special Act to engage in a mutual aid business.
Article 5 (Applicability to Special Cases concerning Taxation on Investments in Kind)
The amended provisions of Article 47-2 shall begin to apply from the first investment made in kind after this Act enters into force: Provided, That former provisions shall apply where an investment is made in kind by a corporation established pursuant to a Special Act, before this Act enters into force, pursuant to provisions concerning the transfer of business (restructuring) in the Act authorizing the establishment of the corporation. <Amended by Act No. 14386, Dec. 20, 2016>
Article 6 (Applicability to Submission of Tax Settlement Invoices)
The amended provisions of Articles 60 (9) and 76-17 (4) shall begin to apply from the tax returns on the tax base or consolidated tax base filed after this Act enters into force.
Article 7 (Applicability to Revocation of Approval for Applying Consolidated Tax Return System)
The amended provisions of Article 76-9 (2) shall begin to apply from the first case where approval for applying the consolidated tax return system is revoked after this Act enters into force.
Article 8 (Applicability to Exclusion of Consolidated Subsidiaries)
The amended provisions of Article 76-12 (2) shall begin to apply from the first case where the consolidated tax return system ceases to be applied after this Act enters into force.
Article 9 (Applicability to Income for Each Consolidated Business Year)
The amended provisions of Article 76-14 (2) shall begin to apply from the first case where an asset owned by the existing consolidated group before a merger is disposed of after this Act enters into force or where an asset acquired before the consolidated parent corporation applies the consolidated tax return system is disposed of after this Act enters into force.
Article 10 (Applicability to Domestic Source Income)
The amended provisions of subparagraph 7 (b) of Article 93 shall begin to apply from the first asset transferred after this Act enters into force.
Article 11 (Applicability to Timing for Becoming Cash Receipt Merchant)
The amended provisions of Article 117-2 shall being to apply from the first case where a corporation meets the requirements for becoming a Cash Receipt merchant before this Act enters into force and becomes a Cash Receipt merchant after this Act enters into force.
Article 12 (Applicability to Obligation to Submit Data on Overseas Subsidiaries, etc.)
The amended provisions of Article 121-2 (1) shall begin to apply from the documents specified in the aforesaid paragraph submitted by a corporation for the business year immediately before the business year in which the filing deadline by a consolidated corporation comes due after this Act enters into force.
Article 13 (Transitional Measure Following Repeal of Payment in Kind)
Notwithstanding the amended provisions of Articles 62-2 (7) and 65, the former provisions shall apply the land, etc., transferred or expropriated before this Act enters into force.
ADDENDA <Act No. 14386, Dec. 20, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2017: Provided, That the amended provisions of Article 76 (6), (7), and (9) shall enter into force on January 1, 2018.
Article 2 (General Applicability)
This Act shall begin to apply from the business year that begins after this Act enters into force and thereafter.
Article 3 (Applicability to Restriction on Deduction of Carried-Over Losses, etc. upon Merger)
The amended provisions of Article 45 (3) shall apply to the tax bases on the tax returns filed after this Act enters into force.
Article 4 (Applicability to Restriction on Deduction of Carried-Over Losses, etc. upon Division)
The amended provisions of Article 46-4 (3) shall apply to the tax bases on the tax returns filed after this Act enters into force.
Article 5 (Applicability to Tax Credit for Correction to Wrongful Accounting)
The amended provisions of Article 58-3 shall apply to the corrections made after this Act enters into force.
Article 6 (Applicability to Penalty Tax)
The amended provisions of Article 76 (6), (7), and (9) shall apply where the deadline for submitting a detailed statement of changes in stocks, a payment statement, an aggregate invoice for each supplier or purchaser, or an aggregate tax invoice for each supplier becomes due on or after January 1, 2018.
Article 7 (Applicability to Application for Non-Taxation or Tax Exemption on Foreign Corporations under Tax Treaties)
The amended provisions of Articles Article 98-4 (4). 98-5 (2), and 98-6 (4) shall apply where the period set previously for filing an application for correction has not elapsed at the time this Act enters into force.
Article 8 (Transitional Measure concerning Constructive Dividends or Distributions)
Notwithstanding the amended provisions of Article 16 (1) 6, former provisions shall apply to domestic corporations divided and merged before this Act enters into force.
Article 9 (Transitional Measure concerning Taxation, etc. on Merged Corporations upon Merger)
Notwithstanding the amended provisions of Article 44 (3), former provisions shall apply to domestic corporations merged before this Act enters into force.
Article 10 (Transitional Measure concerning Taxation, etc. on Divided Corporations upon Division)
Notwithstanding the amended provisions of Article 46 (2) 2, former provisions shall apply to domestic corporations divided and merged before this Act enters into force.
Article 11 (Transitional Measure concerning Domestic Source Income Accrued from Rendering Personal Services under Tax Treaties)
Notwithstanding the amended provisions of subparagraph 6 of Article 93 and the proviso to Article 98 (1) 2, former provisions shall apply where personal services have been rendered abroad before this Act enters into force.
ADDENDA <Act No. 15222, Dec. 19, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2018.
Article 2 (General Applicability)
This Act shall apply to the business years beginning after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Donations in Deductible Expenses)
The amended provisions of Article 24 (2) shall apply beginning with the first donation made after this Act enters into force.
Article 4 (Applicability to Special Cases, Including Exclusion of Expenses Incurred in Relation to Passenger Vehicles for Business Use from Deductible Expenses)
The amended provisions of Article 27-2 (3) shall apply beginning with the returns filed on a tax base after this Act enters into force.
Article 5 (Applicability to Addition of Requirements for Transfer of Employees upon Merger or Division)
The amended provisions of Articles 44 (2), 44-3 (3) 3, 46 (2), 46-3 (3) 3 and 37 (1) and (3) 3 shall apply beginning with mergers and divisions taking place after this Act enters into force.
Article 6 (Applicability to Succession to Tax Exemption, Reduction and Credits upon Qualifying Spin-Off)
The amended provisions of Article shall apply beginning with the spin-offs taking place after this Act enters into force.
Article 7 (Applicability to Abolition of Requirement Succeed to Independent Business Division from Requirements for Qualifying Investments in Kind)
The amended provisions of Article 47-2 (1) 5 shall apply beginning with the investments made in kind after this Act enters into force.
Article 8 (Applicability to Penalty Tax)
The amended provisions of Article shall apply beginning with the case where an invoice is issued for goods or services supplied after this Act enters into force.
Article 9 (Transitional Measures concerning Non-Inclusion of Donations in Deductible Expenses)
Notwithstanding the amended provisions of Article 24 (2) 7 and (3), the donations made to any of the institutions designated under former provisions before this Act enters into force shall be deemed statutory donations until the end of the period of designation under Article 24 (2) 7 or (3).
Article 10 Omitted.