CHAPTER I GENERAL PROVISIONS
The purpose of this Decree is to provide for matters delegated by the Income Tax Act and those necessary for the enforcement thereof.
[This Article Wholly Amended on Feb. 18, 2010]
| Article 2 (Determination on domicile and place of residence) |
| (1) | A domicile defined in Article 1-2 of the Income Tax Act (hereinafter referred to as the "Act") shall be determined by the objective facts of living relationship, such as the existence of a family living together in the Republic of Korea and of the property located in the Republic of Korea. <Amended on Feb. 18, 2010> |
| (2) | A place of residence defined in Article 1-2 of the Act means a place where a person has lived for a long time besides his or her domicile, and in which there is no general living relationship as close as a domicile. <Amended on Feb. 18, 2010> |
| (3) | In any of the following cases, a natural person who resides in the Republic of Korea shall be deemed to have his or her domicile in the Republic of Korea: <Amended Feb. 3, 2015> |
| 1. | Where the person has an occupation which usually requires him or her to continually reside in the Republic of Korea for at least 183 days; |
| 2. | Where the person has a family member who makes a living together with him or her in the Republic of Korea and is deemed to continually reside in the Republic of Korea for at least 183 days in view of his or her occupation or property status. |
| (4) | If a person living or working abroad with the nationality of a foreign country or a permanent residency permit issued by a foreign country has no family member who makes a living together in the Republic of Korea and is not deemed to return to the Republic of Korea to mainly reside in the Republic of Korea, in view of his or her occupation or property status, the person shall be deemed to have no domicile in the Republic of Korea. <Amended Feb. 3, 2015> |
| 1. | Deleted; <Feb. 3, 2015> |
| 2. | Deleted; <Feb. 3, 2015> |
| (5) | In cases of a crew member of a vessel or aircraft serving an overseas route, if a place of residence of his or her family living together with the relevant crew member, or a place in which he or she usually resides during the period other than duty hours, is located in the Republic of Korea, the domicile of the relevant crew member shall be deemed to be located in the Republic of Korea; and when such place is located overseas, the domicile of the relevant crew member shall be deemed located overseas. |
| Article 2-2 (Time when person becomes resident or nonresident) |
| (1) | The time when a nonresident becomes a resident shall be any of the following days: <Amended Feb. 3, 2015> |
| 1. | The day when the nonresident acquires a domicile in the Republic of Korea; |
| 2. | The day when an event, based on which the nonresident shall be deemed to acquire or have a domicile in the Republic of Korea under Article 2(3) or (5), occurs; |
| 3. | The 183th day after the nonresident acquires a place of residence in the Republic of Korea. |
| (2) | The time when a resident becomes a nonresident shall be any of the following days: |
| 1. | The next day of the date when he or she leaves Korea to move his or her domicile or place of residence outside Korea; |
| 2. | The next day of the date when an event, based on which he or she shall be deemed to have no domicile in the Republic of Korea or to have a domicile outside the Republic of Korea pursuant to Article 2(4) or (5), occurs. |
[This Article Added on Feb. 4, 2009]
| Article 3 (Determination of executives, employees of overseas local corporations, etc. as residents) |
Executives or employees dispatched to an overseas place of business or an overseas local corporation of a resident or a domestic corporation (limited to where a domestic corporation has directly or indirectly invested in 100/100 of the total number of outstanding stocks or equity shares) or public officials who work abroad shall be deemed residents. <Amended Feb. 4, 2009; Feb. 3, 2015>
[This Article Wholly Amended on Feb. 3, 2015]
| Article 3-2 Deleted. <Feb. 12, 2019> |
| Article 4 (Calculation of period of residence) |
| (1) | The period of residence in the Republic of Korea shall be from the date after the date of a person's arrival in the Republic of Korea to the date of his or her departure. |
| (2) | Where an individual who had a place of abode in the Republic of Korea re-enters the Republic of Korea after departure, and the purpose of such departure is clearly deemed temporary, such as tourism or medical treatment prescribed by Decree of the Ministry of Finance and Economy, in light of the residence of family members living together with the individual and the location of his or her assets, the period of such departure shall also be deemed a period during which the individual had a place of abode in the Republic of Korea. <Amended on Feb. 3, 2015; Feb. 28, 2025; Dec. 30, 2025> |
| (3) | Where the period during which a person has a place of abode in the Republic of Korea falls under any of the following subparagraphs, such person shall be deemed to have had a place of abode in the Republic of Korea for at least 183 days: <Amended on Feb. 3, 2015; Feb. 13, 2018; Feb. 28, 2025> |
| 1. | Where the stay exceeds 183 days during a single tax year; |
| 2. | Where the period continues for at least 183 days spanning two taxable periods. |
| (4) | Where an overseas Korean defined in Article 2 of the Act on the Immigration and Legal Status of Overseas Koreans enters the Republic of Korea but it is found, according to the method prescribed by Decree of the Ministry of Finance and Economy, that the purpose of his or her entry is a temporary stay for sightseeing, medical treatment of a disease, or any of the purposes specified by Decree of the Ministry of Finance and Economy, in view of the place of residence of family members who make a living together with the person and the location of his or her property, etc., the period of his or her stay shall not be deemed a period during which the person has a place of residence in the Republic of Korea. <Added on Feb. 17, 2016; Dec. 30, 2025> |
| Article 4-2 (Calculation of amount of income from trust) |
| (1) | When calculating the amount of income in each taxable period, any person who conducts trust business shall account for income vested to trust assets separately from other income. <Amended on Feb. 18, 2010> |
| (2) | Whether a beneficiary is specified or exists under Article 2-3(2) of the Act shall be governed by the conditions at the time when income or expenditure related to trust assets are incurred. <Amended on Feb. 18, 2010; Feb. 17, 2021> |
| (3) | Article 26-2(6) shall apply mutatis mutandis to the calculation of the amount of income on the profits from a trust to which Article 4(2) of the Act applies as a specified money trust defined in subparagraph 1 of Article 103 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act. <Added on Feb. 18, 2010; Feb. 17, 2021; Dec. 31, 2024> |
| (4) | "A trust that meets the requirements prescribed by Presidential Decree" in Article 2-3(2) means a trust falling under any of the following subparagraphs: <Added on Feb. 17, 2021; Feb. 28, 2023> |
| 1. | A trustor shall have actual control over trust property, such as being entitled to cancel the trust, to appoint or change a beneficiary, or to be vested with residual property after the termination of the trust; |
| 2. | A beneficiary entitled to receive the principal of trust assets shall be established as a trustor; and a beneficiary entitled to receive profits shall be established as a spouse or a lineal ascendent or descendent (including the lineal ascendent or descendent of the spouse) living together at the same address or domicile. |
[This Article Added on Feb. 22, 2008]
| Article 5 (Determination of and reporting on place for tax payment) |
| (1) | If a place for tax payment is unclear, the determination of a place for tax payment provided for in Article 6(3) of the Act shall be as follows: <Amended on Feb. 19, 2005; Feb. 28, 2007; Feb. 15, 2013; Feb. 12, 2019> |
| 1. | Where a person has at least two domiciles, the place registered under the Resident Registration Act shall be the place for tax payment, and when a person has at least two places of residence, the place in which his or her living relationship is the closest shall be the place for tax payment; |
| 2. | Where a nonresident has at least two places of business in the Republic of Korea and where it is difficult to determine his or her principal place of business, the place reported by the relevant nonresident as a place for tax payment pursuant to paragraph (5) shall be the place for tax payment; |
| 3. | Where a nonresident who does not have a domestic place of business provided for in Article 120 of the Act in the Republic of Korea (hereinafter referred to as "domestic place of business") earns income from domestic source real estate income under subparagraph 3 of Article 119 of the Act or domestic source capital gains on real estate under subparagraph 9 thereof in at least two domestic places, the place reported by such nonresident as a place for tax payment pursuant to paragraph (5) from among places from which such income from domestic sources is generated shall be the place for tax payment; |
| 4. | Where a nonresident fails to report under subparagraph 2 or 3, the place designated by the Commissioner of the National Tax Service or the commissioner of the competent regional tax office in consideration of the status of income and the propriety of tax management, shall be the place for tax payment. |
| (2) | Where the Commissioner of the National Tax Service or the commissioner of the competent regional tax office has designated the place for tax payment under paragraph (1)4, he or she shall notify a taxpayer in writing before the final return on the tax base of relevant taxable period or before the commencement date of the period for tax payment (where any of the causes for an interim tax prepayment or an occasional imposition occur, within 15 days before the commencement date of such period for tax payment). |
| (3) | "Cases prescribed by Presidential Decree" in the proviso to Article 7(1)4 of the Act means where a corporation falls under any of the following cases: <Amended on Apr. 1, 1998; Dec. 31, 1998; Dec. 31, 1999; Dec. 29, 2000; Dec. 31, 2001; Feb. 22, 2008; Feb. 4, 2009; Feb. 18, 2010; Jun. 28, 2013; Feb. 11, 2020> |
| 1. | Where a corporation collectively computes the amount of tax withheld on the income paid by the branch offices, business offices, and other places of work through electronic methods at its main office or principal office and has filed a report thereon to the head of the competent tax office having jurisdiction over its main office or principal office; |
| 2. | Where each unit of a corporation is registered separately as an independent entrepreneur under Article 8(3) or (4) of the Value-Added Tax Act. |
| (4) | "Places prescribed by Presidential Decree" in Article 7(1)5 of the Act means the following places: <Amended on Dec. 31, 1998; Aug. 14, 2001; Feb. 4, 2009; Feb. 18, 2010; Feb. 15, 2013; Feb. 12, 2019> |
| 1. | Locations of business of a domestic corporation or of the foreign corporation under Article 94 of the Corporate Tax Act (hereafter referred to as the "domestic business place of a foreign corporation" in Articles 207(1) and 207-2(6)) which has issued securities under the relevant provisions where there exist domestic source capital gains on real estate under subparagraph 9b of Article 119 of the Act and any subparagraph of Article 179(11) of this Decree; |
| 2. | Places designated by the Commissioner of the National Tax Service in cases, other than those indicated in subparagraph 1. |
| (5) | A person who intends to report a place for tax payment under Article 8(1) and (2) of the Act shall submit a written report on the place for tax payment determined by Decree of the Ministry of Finance and Economy (including submitting it by means of the Home Tax Service) to the head of the competent tax office. <Amended on Apr. 1, 1998; Mar. 17, 2004; Feb. 29, 2008; Dec. 30, 2025> |
| (6) | "Public officials, etc., as prescribed by Presidential Decree" in Article 8(5) of the Act means public officials or a person deemed a resident under Article 3. In such cases, the place of tax payment shall be the principal place of his or her family's living or the location of any agency to which he or she belongs. <Amended on Feb. 11, 2020> |
| Article 6 (Designation and notice of places for tax payment) |
| (1) | Any person who intends to apply for designation of the place for tax payment under Article 9(1)1 of the Act shall submit a written application for the designation of the place for tax payment prescribed by Decree of the Ministry of Finance and Economy (including submitting it by means of the Home Tax Service) to the head of the competent tax office of the place of business from October 1 to December 31 of the relevant taxable period. <Amended on Apr. 1, 1998; Mar. 17, 2004; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| (2) | The commissioner of the competent regional tax office (the Commissioner of the National Tax Service, in cases where the commissioner of the competent regional tax office to be newly designated is different from the commissioner of the competent regional tax office of the former place for tax payment) shall, upon receipt of an application for designation of the place for tax payment stipulated under paragraph (1), designate a place of business as place for tax payment, except in cases determined by Decree of the Ministry of Finance and Economy, and shall notify in writing as to whether the designation is granted to the applicant, by not later than the end of February of the following year. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (3) | The Commissioner of the National Tax Service or the commissioner of the competent regional tax office shall, where he or she designates a place for tax payment under Article 9(1)2 of the Act, notify the applicant thereof before the final return on tax base in the relevant taxable period or before the commencement date of the period for tax payment; provided, if any causes exist for interim prepayment or occasional imposition, he or she shall notify the applicant of such facts within 15 days before the commencement date of the period for tax payment. |
| (4) | When the said notification is not made within the period designated under paragraph (2), the place for tax payment of which the relevant applicant applies for designation shall be the place for tax payment. <Added on Dec. 30, 1995> |
| Article 7 (Reporting on change of places for tax payment) |
| (1) | A person who intends to file a modified report on the place of tax payment pursuant to Article 10 of the Act shall submit a report on change of place of tax payment prescribed by Decree of the Ministry of Finance and Economy to the head of the tax office having jurisdiction over the place of tax payment after such modification (including submission through the National Tax Information and Communications Network). <Amended on Apr. 1, 1998; Mar. 17, 2004; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | When a taxpayer has his or her business registration corrected under Article 14 of the Enforcement Decree of the Value-Added Tax Act due to the change of his or her domicile, he or she shall be deemed to have reported on the change of the place for tax payment under paragraph (1). <Amended on Feb. 19, 2005; Jun. 28, 2013> |
| Article 8 (Application mutatis mutandis to authority) |
Where the commissioner of a regional tax office determines or changes the tax base and amount of tax under Article 11 of the Act, the provisions related to the authority of the head of a tax office shall apply mutatis mutandis thereto.
CHAPTER II TAX LIABILITY ON RESIDENTS' GLOBAL INCOME AND RETIREMENT INCOME
| Article 8-2 (Non-taxable income from house rental) |
| (1) | A house referred to in subparagraph 2b of Article 12 of the Act shall include land appurtenant to a house. <Amended on Dec. 30, 2010> |
| (2) | "House" in paragraph (1) means a building used for regular residence (excluding cases for residence for business), and "land appurtenant to a house" means land, the area of which does not exceed the larger of the following areas, annexed to a house: <Added on Feb. 18, 2010> |
| 1. | Total floor space of a building (excluding the area of basement level, and parking lot on the ground floor, areas for evacuation and safety zones under Article 34(3) of the Enforcement Decree of the Building Act, and areas of common residential facilities under subparagraph 3 of Article 2 of the Regulations on Standards, etc. of Housing Construction; |
| 2. | The area equivalent to five times the area on which a building is founded (in cases of land outside the urban areas under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act, it shall be ten times). |
| (3) | When subparagraph 2b of Article 12 of the Act applies, the number of houses shall be counted based on the following: <Amended on Dec. 29, 2000; Feb. 18, 2010; Dec. 30, 2010; Feb. 11, 2020; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | A multi-family house shall be deemed one house, and in cases of subdivided registration, each one shall be counted as one house; |
| 2. | A jointly-owned house shall be counted as a house owned by the holder of the largest share (if there are at least two holders of the largest share and they agree that one of them is to be the person to whom the income from rent of the relevant house is attributed, it shall be deemed to be owned by such person); provided, any of the following person shall be deemed to own the relevant house even though a jointly-owned house is not counted as he or she owns it pursuant to the main clause: |
| a. | A person whose income from renting out the relevant jointly-owned house, calculated in accordance with the methods prescribed by Decree of the Ministry of Finance and Economy, is not less than six million won per year; |
| b. | A person who holds more 30/100 of the share of the relevant jointly-owned house in which the assessed value exceeds 1.2 billion won; |
| 3. | In cases of a subletting or a subletting on deposit basis of houses that are rented or rented on deposit basis, the relevant house rented or rented on deposit basis shall be deemed the house of a tenant or a tenant on deposit basis; |
| 4. | Where a taxpayer and his or her spouse each own houses, the total number of houses owned by them; provided, where a jointly-owned house is counted as a house each owned by the taxpayer and his or her spouse, it shall be counted as a house owned by one of them under each of the following items: |
| a. | The relevant house shall be deemed owned by the person holding the larger share among them; |
| b. | Where the taxpayer and his or her spouse hold the same share and they agree that one of them is to be the person to whom the income from rent of the relevant house is attributed, it shall be deemed to be owned by such person. |
| (4) | When paragraph (2) applies, where a house and a building for business (hereafter referred to as "building for business" in this Article) on which a value-added tax is levied are built together, the scope of such house and land appurtenant thereto shall be governed by the following classifications. In such cases, where a house and land appurtenant thereto are leased to at least two lessees, paragraph (2) shall apply to each lessee by calculating the area of a house (excluding the area for residence for business) and the area of a building for business of each lessee: <Added on Feb. 18, 2010> |
| 1. | Where the area of a house is larger than that of a building for business, the whole area thereof shall be deemed a house. In such cases, the scope of land appurtenant to a house of the relevant house shall be the same as paragraph (2); |
| 2. | Where the area of a house is equal to or smaller than that of a building for business, a building for business other than a house shall not be deemed a house. In such cases, the area of land appurtenant to a house of the relevant house shall be calculated by multiplying the total area of land by the ratio of the area of a house to the total floor area, and the scope thereof shall be the same as paragraph (2). |
| (5) | "House whose standard market price exceeds 1.2 billion won" in the former part of subparagraph 2b of Article 12 of the Act, shall be determined based on the end date of taxable period or the date of transfer of the relevant house. <Amended on Dec. 30, 2010; Feb. 28, 2023> |
| (6) | "The total amount of gross earnings prescribed by Presidential Decree" in the former part of subparagraph 2b of Article 12 of the Act, means the gross revenue generated from rental housing business (hereinafter referred to as "amount of house rental income" in this paragraph and Article 122-2). In such cases, where business operators fall under joint business operators under Article 43(2) of the Act, the amount distributed from the sum of amounts of house rental income generated in a place of joint business to a joint business operator according to the profit-and-loss distribution ratio under Article 43(2) thereof shall be added to the amount of house rental income of such joint business operator. <Amended on Feb. 3, 2015; Feb. 12, 2019> |
| (7) | Except as provided in paragraphs (1) through (6), matters necessary for computing the amount of house rental income shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 3, 2015; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1999]
| Article 9 (Scope of sideline income of farm households) |
| (1) | "Sideline income of a farm or fishery household prescribed by Presidential Decree" in subparagraph 2c of Article 12 of the Act, means any of the following income among income from stock breeding, straw goods manufacturing, private house lodging, sale of foods, local specialty manufacturing, traditional tea manufacturing, or any other similar activities engaged by a farmer or a fisherman: <Amended on Dec. 30, 2003; Feb. 22, 2008; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012; Feb. 17, 2016Feb. 12, 2019; Feb. 11, 2020; Feb. 29, 2024> |
| 1. | Income from stock breeding as a sideline size of a farm household in Appendix 1; |
| 2. | Income other than that specified in subparagraph 1, the total amount of which does not exceed 30 million won a year. |
| (2) | "Private house lodging" in paragraph (1) means private lodging business in agricultural and fishing villages under the Rearrangement of Agricultural and Fishing Villages Act. <Added on Dec. 30, 2003; Feb. 19, 2005; Feb. 9, 2006> |
| (3) | "Specialty" in paragraph (1) means traditional food defined in the Food Industry Promotion Act, traditional seafood defined in the Seafood Industry Promotion and Support Act and fishery specialties defined in the Agricultural and Fishery Products Quality Control Act. <Amended on Feb. 18, 2010; Jul. 20, 2012; Feb. 19, 2021> |
| (4) | "Traditional tea" in paragraph (1) means tea certified by the Minister of Agriculture, Food and Rural Affairs pursuant to Article 22 of the Food Industry Promotion Act. <Amended on Feb. 18, 2010; Mar. 23, 2013> |
| (5) | Deleted. <Feb. 29, 2024> |
| (6) | In applying paragraph (1), matters necessary for calculating income from sideline of a farm or fishery household shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 12, 2019; Dec. 30, 2025> |
[Title Amended on Feb. 12, 2019]
| Article 9-2 (Scope of income generated from manufacturing traditional liquor) |
"Income generated from manufacturing traditional liquor prescribed by Presidential Decree" in subparagraph 2d of Article 12 of the Act means income generated from manufacturing any of the following liquors in Eup/Myeon areas outside the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereinafter referred to as the "Seoul Metropolitan area"), and where the total amount of income does not exceed 12 million won per year: <Amended on Feb. 19, 2005; Feb. 29, 2008; Feb. 18, 2010; Mar. 23, 2013; Jun. 11, 2013; Feb. 17, 2021; Dec. 30, 2025>
| 1. | Traditional liquors under subparagraph 8 of Article 2 of the Liquor Tax Act; |
| 2. | Liquors undergone procedures prescribed by Decree of the Ministry of Finance and Economy on recommendation by the Minister of Land, Infrastructure and Transport for promotion of tourism (limited to those recommended before June 30, 1991); |
| 3. | Liquors for which a license is granted by the Governor of Jeju-do in consultation with the Commissioner of the National Tax Service pursuant to the previous Special Act on Jeju-do Development (limited to those licensed before February 5, 1999). |
[This Article Added on Dec. 30, 2003]
| Article 9-3 (Scope of income from non-taxable timbering of forest trees) |
| (1) | The afforestation period for the purpose of applying subparagraph 2e of Article 12 of the Act shall be calculated as follows: <Amended on Feb. 18, 2010> |
| 1. | As regards forest trees planted voluntarily by a person, the period from the date on which planting is completed to the date on which they are cut down or transferred to a third party; |
| 2. | As regards forest trees planted by contract, the period from the date on which possession of such trees is delivered to the date on which they are cut down or transferred; |
| 3. | As regards forest trees planted by any other person and purchased subsequently, the period from the date on which such trees are purchased to the date on which they are cut down or transferred; |
| 4. | As regards forest trees conveyed as a gift, the period from the date on which such trees are conveyed as a gift to the date on which they are cut down or transferred; |
| 5. | As regards forest trees inherited, the period from the commencement date of their afforestation period by the predecessor under subparagraphs 1 through 4 to the date on which an heir cuts down or transfers them; |
| 6. | In cases where a right under a forestation contract for profit sharing (referring to a contract to which the owner of a parcel of mountainous land, a person responsible for costs and expenses, and a person responsible for afforestation become parties to the contract to agree that they shall plant trees and income from forest trees planted and cut down or transferred subsequently shall be distributed to them at an agreed ratio; hereafter the same shall apply in this Article and Article 51(9)) is acquired, the period from the date on which such right is acquired to the date on which such right is transferred. |
| (2) | "An amount not exceeding 30 million won a year, generated from cutting down or transferring forest trees in forest land" in the former part of subparagraph 2e of Article 12 of the Act means the amount of income calculated in accordance with Articles 51(8) and (9) and 55, which shall not exceed 30 million won in each year. <Amended on Feb. 18, 2010; Feb. 27, 2026> |
| (3) | In determining the date on which planting is completed or the possession of trees is delivered in cases of paragraph (1)1 or 2, the unit of stands (referring to a group of trees, which serves as a unit for forest management enabling to discern a specific forest with an identical forest floor from its surroundings) of a forest as planted shall apply. |
[This Article Added on Feb. 28, 2007]
| Article 9-4 (Scope of non-taxable business of cultivating plants) |
| (1) | "Income generated from business of cultivating plants prescribed by Presidential Decree" in subparagraph 2f of Article 12 of the Act means any income generated from business of cultivating plants the gross amount of which does not exceed one billion won during the pertinent taxable period. |
| (2) | In applying paragraph (1), matters necessary for calculating income arising from crop cultivation shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Added on Feb. 21, 2014]
| Article 9-5 (Scope of income from non-taxable fishing or aquaculture) |
| (1) | "Income generated from fishing business or agriculture prescribed by Presidential Decree" in subparagraph 2g of Article 12 of the Act means any income generated from business of coastal fishing, inland water fishery, or agriculture classified under the Korea Standard Industrial Code publicly notified by the Minister of Data and Statistics (hereinafter referred to as "Korea Standard Industrial Code"), the gross amount of which does not exceed 50 million won during the pertinent taxable period. <Amended on Feb. 29, 2024; oct. 1, 2025> |
| (2) | Matters necessary for the calculation of income accrued from the fishing business or aquaculture business under paragraph (1) shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2024; Dec. 30, 2025> |
[This Article Added on Feb. 11, 2020]
[Title Amended on Feb. 29, 2024]
| Article 10 (Scope of soldiers in active service) |
"A soldier in service prescribed by Presidential Decree" in subparagraph 3a of Article 12 of the Act, means a soldier below sergeant (including staff sergeants appointed without volunteering), an auxiliary police officer, or any other similar person in active service, who has been drafted or called up, or volunteered to perform the duty of military service. <Amended on Nov. 20, 2015; Nov. 29, 2016>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 10-2 (Scope of non-taxable parental leave allowance) |
"Amount of use for business purpose prescribed by Presidential Decree" in subparagraph 3e of Article 12 of the Act means the amount falling under the following classifications: <Amended on Feb. 27, 2026>
| 1. | From the start date of childcare leave to the end of the third month: 2.5 million won per month; |
| 2. | From the fourth month to the sixth month of childcare leave: 2 million won per month; |
| 3. | From the seventh month of childcare leave onward: 1.6 million won per month. |
[This Article Added on Feb. 29, 2024]
| Article 11 (Scope of school expenses) |
"School expenses prescribed by Presidential Decree" in subparagraph 3h of Article 12 of the Act means school expenses satisfying the following requirements (limited to the amount to be paid in the relevant taxable period), among entrance fees, tuition and lecture fees and other public imposts for schools under the Elementary and Secondary Education Act and the Higher Education Act (including educational institutions similar thereto in foreign countries) and for vocational training institutions under the National Lifelong Vocational Skills Development Act: <Amended on Dec. 30, 1995; Dec. 31, 1996; Dec. 31, 1998; Feb. 19, 2005; Feb. 28, 2007; Feb. 18, 2010; Feb. 17, 2022>
| 1. | Expenses paid to relevant workers for education or training related to the business of enterprises in which they are engaged; |
| 2. | Expenses paid to relevant workers pursuant to payment criteria stipulated by the regulations, etc. of enterprises in which they are engaged; |
| 3. | Expenses paid to relevant workers on condition that they return the amount paid to them, unless they work for the period exceeding the relevant period of education after completing such education or training, if such education or training period is six months or longer. |
| Article 12 (Scope of pay in nature of reimbursement for actual expenses) |
"Pay in the nature of reimbursement for actual expenses prescribed by Presidential Decree" in subparagraph 3i of Article 12 of the Act, means the following: <Amended on Jun. 30, 1995; Dec. 31, 1996; Apr. 1, 1998; Dec. 31, 1998; Dec. 29, 2000; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 22, 2008; Feb. 29, 2008; Dec. 3, 2008; Feb. 4, 2009; Jan. 27, 2010; Feb. 18, 2010; Dec. 30, 2010; Jun. 24, 2011; Feb. 2, 2012; Feb. 15, 2013; Mar. 11, 2014; Sep. 22, 2016; Dec. 29, 2017; Feb. 11, 2020; Feb. 17, 2021; Jun. 8, 2021; Feb. 15, 2022; Jul. 7, 2023; Dec. 30, 2025; Jan. 27, 2026>
| 1. | Deleted; <Feb. 17, 2021> |
| 2. | Food expenses received under the Seafarers’ Act; |
| 3. | Amount of such level as to reimburse actual expenses, such as pay for day duty, night watch, or business travel (including amounts not exceeding 200,000 won per month from among the incurred expenses received by an employee pursuant to payment criteria stipulated by the regulations, etc. of the relevant enterprises, in lieu of receiving reimbursement for actual travel expenses incurred during a business trip, etc. within the city using a car owned or rented by the employee to perform his or her duties); |
| 4. | Clothing, caps, or shoes provided as uniform to employees who shall wear uniforms under statutes, or municipal ordinances; |
| 5. | Deleted; <Dec. 29, 2000> |
| 6. | Deleted; <Dec. 29, 2000> |
| 7. | Deleted; <Dec. 29, 2000> |
| 8. | Working clothes received by those who work in a hospital, laboratory, financial institution, etc., factory, or mine, or by those engaging in specialized jobs or services, or clothes only worn at such place of work; |
| 9. | Risk premiums paid to soldiers serving in such special fields as parachute jumping, underwater destruction, diving, high voltage, explosives handling, flight (including premiums paid in training for proficiency flying skills prescribed by Decree of the Ministry of Finance and Economy), service in the DMZ, service at the front line sentry post, service on warships (including premiums paid in training for maintaining cruise prescribed by Decree of the Ministry of Finance and Economy) or in landing tracked vehicles; police special tactical service allowances paid to police officers serving in special fields; and security service allowances paid to security service public officials; |
| 10. | Embarkation allowances not exceeding 200,000 won per month provided to seamen under the Seafarers' Act, who are stipulated by Decree of the Ministry of Finance and Economy (excluding persons to whom Articles 16 and 17 apply); allowances for service on warships and flight allowances provided to police officials; and allowances for service on warships, flight allowances, and firefighting allowances provided to officials of fire departments; |
| 11. | Allowances for entering a mining tunnel and for blasting, received by workers in a mine; |
| 12. | Amount not exceeding 200,000 won per month out of subsidies for research or research activity expenses provided to any of the following persons: |
| a. | Teaching staff of a school established under the Early Childhood Education Act, the Elementary and Secondary Education Act, or the Higher Education Act, and a school equivalent thereto (including an educational institution established under a special Act); |
| b. | A person directly engaging in, or providing direct support for, research activities (limited to a person with qualifications equivalent to that of teaching staff of universities and colleges) in a research institute governed by the Specific Research Institutes Support Act, a government-funded research institute established pursuant to a special Act, or a local government-funded research institute established pursuant to the Act on the Establishment and Operation of Local Government-Invested Research Institutes, who is specified by Decree of the Ministry of Finance and Economy; |
| c. | A person who directly engages in research activities in a research institute affiliated with a small or medium enterprise or venture business, which is recognized pursuant to Article 7(1) of the Act on Support for Research and Development of Business-Affiliated Research Institutes after meeting the criteria under Article 6(1)1a through c of the Enforcement Decree of the Act on Support for Research and Development of Business-Affiliated Research Institutes, or in a research and development department established pursuant to the same paragraph (limited to one established in a small or medium enterprise or venture business); |
| 13. | Amount of money, paid by the State or a local government, falling under any of the following: |
| a. | Money for improvement of working environment paid to improve labor conditions of a nursing teacher, among expenses referred to in Article 24(1)7 of the Enforcement Decree of the Infant Care Act; |
| b. | Labor costs paid to master teachers and teachers of private kindergartens under Article 32(1)2 of the Enforcement Decree of the Early Childhood Education Act; |
| c. | Training allowances paid to specialized doctors to induce supply-demand balance among doctors in each specialized major; |
| 14. | Amount not exceeding 200,000 won per month among allowances for news gathering that are received in connection with news gathering activities by a reporter who engages in a press enterprise that runs a broadcasting company under the Broadcasting Act, a news agency under the Act on the Promotion of News Communications, a newspaper under the Act on the Promotion of Newspapers (referring to ordinary daily newspapers, special daily newspapers, and Internet newspapers, including periodicals under the Act on Promotion of Periodicals, including Magazines, which are directly published by a company running the relevant newspaper), or who engages in the business of using broadcasting channels under the Broadcasting Act (including editorial writers and cartoonists who perform news gathering activities under full-time employment in the relevant press enterprise and in the business of using broadcasting channels under the Broadcasting Act). In such cases, if he or she receives allowances for news gathering along with his or her wages, the amount of money equivalent to 200,000 won per month shall be deemed allowances for news gathering; |
| 15. | Allowances not exceeding 200,000 won received each month by a worker working in a remote area prescribed by Decree of the Ministry of Finance and Economy; |
| 16. | Wages received by a worker in relation to natural disasters or other calamities; |
| 17. | Relocation grants not exceeding 200,000 won per month temporarily paid to the public officials or employees of public institutions defined in subparagraph 14 of Article 2 of Special Act on Local Autonomy, Decentralization, and Balanced Regional Development to be relocated to areas, other than the Seoul Metropolitan; |
| 18. | Money and goods that a religion-related worker receives for ordinary use in religious activities according to regulations of the religious organization to which the worker belongs or guidelines for payment determined following resolution or approval by the decision-making authority of such religious organization. |
| Article 13 Deleted. <Feb. 9, 2006> |
| Article 14 (Scope of international organizations) |
| (1) | "International organization prescribed by Presidential Decree" in the main sentence of subparagraph 3j of Article 12 of the Act means the United Nations or its affiliated organizations. |
| (2) | "Salary received by a person prescribed by Presidential Decree" in the main sentence of subparagraph 3j of Article 12 of the Act means pay received as the price for the performance of his or her duties by a person who is not Korean, among those working for a foreign government or an international organization. |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 15 (Scope of pay received by military personnel and civilian workers in military stationed in foreign countries) |
Pay received by military personnel or a civilian worker in the military under subparagraph 3m of Article 12 of the Act shall be deemed to include prepaid pay (including pay falling under the period after the period of performance of their duties); provided, where military personnel or a civilian worker in the military stationed in a foreign country is recalled home because he or she is deemed unfit for the performance of duties in the relevant foreign country on account of reasons, such as a disciplinary action, this shall not apply to pay for the remaining period.
[This Article Wholly Amended on Feb. 18, 2010]
| Article 16 (Scope of non-taxable wages for workers abroad) |
| (1) | "Wages prescribed by Presidential Decree" in subparagraph 3o of Article 12 of the Act, means the following wages: <Amended on Dec. 30, 1995; Dec. 31, 1999; Dec. 29, 2000; Feb. 19, 2005; Feb. 9, 2006; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012; Apr. 13, 2012; Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2017; Feb. 12, 2019; Feb. 29, 2024; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | An amount not exceeding 1 million won per month [or 5 million won per month, in cases of remuneration received for providing labor (including design and construction supervision services) on a pelagic fishing vessel, on a vessel or aircraft operating in overseas, etc., or at an overseas construction site, etc.], out of the remuneration received for providing labor in a foreign country or in North Korea under the Inter-Korean Exchange and Cooperation Act (hereafter referred to as "overseas, etc." in this Article), (including providing labor on a pelagic fishing vessel or on a vessel or aircraft operating in overseas, etc.; |
| 2. | Pay in the nature of reimbursement for actual expenses, within the amount publicly announced by the Minister of Foreign Affairs in consultation with the Minister of Finance and Economy, out of the allowances received by a public official (including administrative staff in overseas diplomatic missions under Article 32 of the Foreign Service Officials Act and persons performing similar duties as designated and publicly notified by the Minister of Finance and Economy), or an employee of the Korea Trade-Investment Promotion Agency under the Korea Trade-Investment Promotion Agency Act, the Korea Tourism Organization under the Korea Tourism Organization Act, the Korea International Cooperation Agency under the Korea International Cooperation Agency Act, the Korea Foundation for International Healthcare under the Korea Foundation for International Healthcare Act, the Human Resources Development Service of Korea under the Human Resources Development Service of Korea Act, or the Korea SMEs and Startups Agency under the Small and Medium Enterprise Promotion Act, who works overseas, etc., to the extent that such allowances exceed the amount that the employee would receive if he or she worked domestically. |
| (2) | Wages provided for in paragraph (1) shall include where the remuneration for relevant labor is paid in the Republic of Korea. |
| (3) | Wages received by a person who provides labor in a pelagic fishery vessel or on a vessel or aircraft serving overseas routes, etc. under paragraph (1)1, shall be limited to wages received by the crew of a pelagic fishery vessel for engaging in pelagic fisheries, and to wages received by the crew of a vessel or an aircraft serving overseas route, etc. for their labor provided during the service period over the said routes, etc. <Amended on Dec. 29, 2000> |
| (4) | The scope of a pelagic fishery vessel, an overseas construction site, etc. referred to in paragraph (1)1 and of crew referred to in paragraph (3) shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| Article 17 (Scope of night-shift allowance received by manufacturing workers) |
| (1) | "Worker prescribed by Presidential Decree" in subparagraph 3q of Article 12 of the Act means any of the following persons, whose monthly fixed pay does not exceed 2.6 million won and his or her total salary under Article 20(2) of the Act during the immediately preceding tax period does not exceed 37 million won (including workers employed on a daily basis); in such cases, a monthly fixed pay means the pay calculated by subtracting the aggregate of allowances paid in addition to the regular pay for overtime work, night-shift work or holiday work under the Labor Standards Act and a production allowance received pursuant to the Seafarers Act (referring to the percentage pay exceeding the monthly fixed pay where workers are paid by percentage basis), from the total of a salary, pay, remuneration, wages, allowance and other allowances in the nature similar thereto (excluding irregular pay, such as a bonus, etc., received during the relevant taxable period and pay in the nature of reimbursement for actual expenses pursuant to Article 12, and pay in nature of welfare benefit pursuant to Article 17-4) received monthly by worker's rank: <Amended on Dec. 30, 1995; Apr. 1, 1998; Jul. 10, 2003; Feb. 19, 2005; Feb. 9, 2006; Feb. 29, 2008; Feb. 18, 2010; Feb. 2, 2012; Feb. 15, 2013; Feb. 13, 2018; Feb. 12, 2019; Feb. 11, 2020; Feb. 17, 2021; Oct. 1, 2025; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Persons providing labor in a factory or mine, prescribed by Decree of the Ministry of Finance and Economy among employees engaging in production or related areas as indicated in the Korea Standard Classification of Occupation publicly notified by the Minister of Data and Statistics; |
| 2. | Persons providing labor under employment by a fishing business, prescribed by Decree of the Ministry of Finance and Economy; |
| 3. | Persons prescribed by Decree of the Ministry of Finance and Economy from among those engaged in occupations relating to driving and transportation; care, beauty, leisure, tourism, accommodation, cooking, and food-related services; store sales; goods rental; communications-related sales; and simple labor relating to transportation, cleaning, security, housekeeping, food, sales, agriculture and forestry, fisheries, instruments and machines, vending machines, parking management, and other services, under the Korean Standard Classification of Occupations publicly notified by the Minister of Data and Statistics; |
| 4. | Deleted. <Feb. 17, 2021> |
| (2) | "An allowance received for overtime work, night-shift work or holiday work prescribed by Presidential Decree" in subparagraph 3q of Article 12 of the Act means the amount of money falling under any of the following: <Amended on Jun. 30, 1995; Feb. 19, 2005; Feb. 18, 2010> |
| 1. | Amount not exceeding 2.4 million won a year out of wages received in addition to ordinary wages for overtime work, night-shift work or holiday work under the Labor Standards Act (in cases of mine workers or workers employed on a daily basis, the total amount of the relevant wages); |
| 2. | Amount not exceeding 2.4 million won a year out of the allowances for production received by workers under paragraph (1)2 pursuant to the Seafarers Act (pay based on a ratio exceeding regular monthly pay in cases where pay is based on such ratio). |
| (3) | The scope of fisheries under paragraph (1)2 shall be governed by the Korea Standard Industry Code. <Amended on Feb. 2, 2012> |
| (4) | Deleted. <Feb. 18, 2010> |
| Article 17-2 (Scope of tax-exempt childbirth support paid by enterprises) |
| (1) | "A person having a special relationship with the employer, as prescribed by Presidential Decree" in subparagraph 3s1) of Article 12 of the Act means a person who is in a relationship with the relevant employer as classified in the following subparagraphs: |
| 1. | If the employer is an individual: Relative relationship under Article 1-2(1) of the Enforcement Decree of the National Tax Act; |
| 2. | If the employer is a corporation: A relationship with a controlling shareholder pursuant to Article 43(7) of the Enforcement Decree of the Corporate Tax Act (including a person in the relative relationship with the relevant controlling shareholder pursuant to Article 1-2(1) of the Enforcement Decree of the National Tax Act and a person who is in the management control relationship pursuant to paragraph (3)2a of that Article). |
| (2) | "Remuneration paid in up to two installments as prescribed by Presidential Decree" in subparagraph 3s1) of Article 12 of the Act means the first and second payments of remuneration received within 2 years from the date of birth of a child, regardless of the number of times such remuneration is paid by the employer. In such cases, the number of payments of remuneration received by an employee shall be calculated separately for each employer. |
[This Article Added on Feb. 28, 2025]
| Article 17-3 (Scope of non-taxable compensations for employee's invention) |
| (1) | "The amount prescribed by Presidential Decree" in subparagraph 3v of Article 12, with the exception of 1) and 2), of the Act, means an amount not exceeding 7 million won per year. <Amended Feb. 12, 2019; Feb. 29, 2024> |
| (2) | "A person who has a special relationship prescribed by Presidential Decree with an employer, etc. who has paid compensation" in the proviso of subparagraph 3v1) of Article 12 of the Act means a person who has a relationship with the relevant employer, etc. as classified in the following subparagraphs: <Added on Feb. 29, 2024> |
| 1. | If the user is an individual: Relative relationship under Article 1-2(1) of the Enforcement Decree of the National Tax Act; |
| 2. | If the user is a corporation: A relationship with a controlling shareholder pursuant to Article 43(7) of the Enforcement Decree of the Corporate Tax Act (including a person in the relative relationship with the relevant controlling shareholder pursuant to Article 1-2(1) of the Enforcement Decree of the National Tax Act and a person who is in the management control relationship pursuant to Article 1-2(3) of the Enforcement Decree of the National Tax Act): |
[This Article Added on Feb. 3, 2017]
| Article 17-4 (Scope of pay in nature of welfare benefits) |
"Benefits as prescribed by Presidential Decree" in subparagraph 3w of Article 12 of the Act means any of the following: <Amended on Feb. 29, 2024; Dec. 30, 2025>
| 1. | Benefits given to any of the following persons by providing the housing facilities specified by Decree of the Ministry of Finance and Economy: |
| a. | Executives who are not stockholders or investors; |
| b. | Executives who are minor stockholders prescribed by Decree of the Ministry of Finance and Economy; |
| c. | Employees who are not executives (including employees of a non-profit corporations or an individual); |
| d. | Persons who receive wage and salary income from the State or a local government; |
| 2. | Benefits given to an employee of a small or medium enterprise prescribed in Article 2 of the Enforcement Decree of the Act on Restriction on Special Cases concerning Taxation by borrowing funds to purchase or rent housing (including land appurtenant to housing) at low or no interest; provided, where the relevant employee is in a relationship with a small or medium enterprise according to the following classification, profits earned by such employee shall be excluded: |
| a. | If the SME is a sole proprietor: Relative relationship pursuant to Article 1-2(1) of the Enforcement Decree of the National Tax Act; |
| b. | If a small and medium enterprise is a corporate business entity: Relationship of a controlling shareholder, etc. under Article 43(7) of the Enforcement Decree of the Corporate Tax Act (including a person in the relative relationship with the relevant controlling shareholders, etc. under Article 1-2(1) of the Enforcement Decree of the Framework Act on National Taxes, or a person who is in the management control relationship pursuant to paragraph (3) of that Article); |
| 2-2. | Profits earned by the employees of the relevant place of business as a business owner who establishes and operates a workplace daycare center or provides entrusted childcare services pursuant to Article 14 of the Child Care Act bears the expenses pursuant to Article 37 of the same Act and Article 25 of the Enforcement Decree of the same Act; |
| 3. | The following insurance premiums, trust installments, or mutual aid installments (hereafter in this subparagraph, referred to as "insurance premiums, etc.), among the insurance premiums, etc. imposed on an employer in connection with the insurance, trust, or mutual aid whose contractor is an employee or whose beneficiary is an employee or his or her spouse and other family members: |
| a. | An amount not exceeding 700,000 won per annum among insurance premiums of insurance whose insurance money is to be paid upon an employee’s death, injury, or disease, and whose insured and beneficiary are employees, and whose paid-in premiums are not refundable at its maturity (hereinafter referred to as "group genuine indemnity insurance") and the insurance whose paid-in premiums are refundable within the limit not exceeding the paid-in premiums at its maturity (hereinafter referred to as "group refund-cum-guaranty insurance"); |
| b. | Insurance premiums of insurance, the insured of which is an executive or employee, and whose grounds for payment are compensation for damages incurred by an act in the course of performing duties, except for those incurred intentionally (including gross negligence) by the executive or employee; |
| 4. | An amount not exceeding 2.4 million won per annum among prizes and supplementary prizes received by a public official in connection with performing his or her duties from the State or a local government. |
[This Article Added on Feb. 17, 2021]
| Article 17-5 (Scope of non-taxable discount amounts received by executive officers) |
| (1) | "Amount prescribed by Presidential Decree" in the provisions, with the exception of the subparagraph 3x1) and 2), of Article 12 of the Act means the larger of the following amounts: |
| 1. | An amount equal to 20/100 of the aggregate market value of goods or services that an executive officer or employee (hereafter referred to as "executive officers, etc." in Articles 38 and 55) has been provided, or purchased with support, at a price lower than the market value pursuant to Article 20(1)6 of the Act during the relevant taxable period; |
| 2. | 2.4 million won each year; |
| (2) | "Period prescribed by Presidential Decree" in subparagraph 3x1) of Article 12 of the Act means the period specified in each of the following subparagraphs: |
| 1. | Goods for which the useful life by item in accordance with the consumer dispute resolution standards pursuant to Article 8(3) of the Enforcement Decree of the Framework Act on Consumers exceeds 5 years: 2 years; |
| 2. | Goods falling under Article 1(2)2 of the Individual Consumption Tax Act: 2 years; |
| 3. | Goods not falling under subparagraphs 1 and 2: 1 year. |
[This Article Added on Feb. 28, 2025]
| Article 18 (Scope of non-taxable other income) |
| (1) | "Prizes and supplementary prizes prescribed by Presidential Decree" in subparagraph 5c of Article 12 of the Act, means any of the following prizes: <Amended on Dec. 31, 1999; Feb. 19, 2005; Feb. 28, 2007; Dec. 31, 2008; Feb. 18, 2010; Feb. 2, 2012; Jan. 16, 2013; Mar. 23, 2013; Jul. 26, 2017; Feb. 17, 2021; Feb. 27, 2026> |
| 1. | Prize money and supplementary prizes received by the winners of the Academy of Sciences prizes under the National Academy of Sciences of the Republic of Korea Act, or of the Academy of Arts prizes under the National Academy of Arts of the Republic of Korea Act; |
| 2. | Prize money and supplementary prizes received by the winners of the Nobel Prize or of prizes from foreign governments, international agencies, international organizations, and other foreign organizations or funds; |
| 3. | Prize money and supplementary prizes received by the winners of the Korean Culture and Arts Award under the Culture and Arts Promotion Act and of various prizes granted by the Art Council Korea from the Culture and Arts Promotion Fund under the same Act; |
| 4. | Prize money and supplementary prizes received by the winners of prizes awarded at the Korean Art Contest; |
| 5. | Prize money and supplementary prizes received by the winners of athletic prizes under the National Sports Promotion Act; |
| 6. | Prize money and supplementary prizes received by the winners of prizes awarded at a science exhibition held by the Ministry of Science and ICT; |
| 7. | Prize money and supplementary prizes received by the winners of prizes awarded with approval from the head of the relevant central administrative agency by a corporation founded under a special Act; |
| 8. | Prize money and supplementary prizes received by persons selected as quality masters (including subgroups) under the Quality Control and Safety Management of Industrial Products Act; |
| 9. | Amounts not exceeding 150,000 won per person from among prize money received from an employer in connection with the relevant commendation or prize-winning in cases of employees who have received a commendation from the official ranking at least the head of a central administrative agency in view of their achievements in promoting government policies, such as at-work Saemaul campaign, the industrial accidents prevention campaign, etc., or of employees who have won a vocational technique competition in the Republic of Korea or abroad approved by the head of a relevant central administrative agency; |
| 10. | Supplementary prizes received by a person who makes a suggestion selected pursuant to the Citizen Suggestion Regulations or the Public Officials Suggestion Regulations; |
| 11. | A reward or compensation received by a person who has reported or denounced for the observance of laws and regulations and maintenance of social order by the State or a local government as prescribed by related Acts and subordinate statutes, such as a reward, etc., pursuant to Article 84-2 of the Framework Act on National Taxes; |
| 12. | Compensation received by a crime reporter, as prescribed by the Commissioner General of the Korean National Police Agency and the Commissioner General of the Korea Coast Guard; |
| 13. | Prize money and supplementary prizes granted by the State or local governments, other than those in subparagraphs 1 through 12 (excluding prizes and supplementary prizes pursuant to Article 38(1)20). |
| (2) | "Amount prescribed by Presidential Decree" in the main clause of subparagraph 5d of Article 12 of the Act means an amount not exceeding 7 million won per year (if any other amount is non-taxable for the relevant taxable period under subparagraph 3v of Article 12 of the Act, the amount shall be deducted from 7 million won). <Added on Feb. 3, 2017; Feb. 12, 2019; Feb. 29, 2024> |
| (3) | "Person who has a special relationship prescribed by Presidential Decree with an employer, etc. or the industry-academic cooperation foundation" in the proviso of subparagraph 5d of Article 12 of the Act means a person who has a special relationship with the relevant employer, etc. or the industry-academic cooperation foundation as classified in the following subparagraphs: <Added on Feb. 29, 2024> |
| 1. | In case of an employer, etc.: A person who is in a relationship as defined in the subparagraphs of Article 17-3(2); |
| 2. | In case of an industry-academic cooperation foundation: A person who is in a relationship under Article 17-3(2)2. |
| Article 19 (Scope of non-taxable income of religion-related workers) |
| (1) | "School expenses prescribed by Presidential Decree" in subparagraph 5h1) of Article 12 of the Act, means admission fees, tuition fees, and other payments that a religion-related worker defined in subparagraph 5h1) of Article 12 of the Act (hereinafter referred to as "religion-related worker"), receives to pay them to any of the following schools or facilities for education and training related to activities as a religion-related worker of the religious organization to which he or she belongs: |
| 1. | A school defined in Article 2 of the Elementary and Secondary Education Act (including similar education facilities in foreign countries); |
| 2. | A school defined in Article 2 of the Higher Education Act (including similar education facilities in foreign countries); |
| 3. | A lifelong education facility defined in Chapter V of the Lifelong Education Act. |
| (2) | "Meals or meal allowances prescribed by Presidential Decree" in subparagraph 5h2) of Article 12 of the Act, means the following meals or allowances: <Amended on Feb. 28, 2023> |
| 1. | Meals or other food that a religious organization provides to religion-related workers who belong thereto; |
| 2. | Meal allowances not exceeding 200,000 won per month, which a religion-related worker to whom meals or other food are not provided as referred to in subparagraph 1, receives from the religious organization to whom he or she belongs. |
| (3) | "Payments prescribed by Presidential Decree as those paid to religion-related workers in the nature of reimbursement for actual expenses" in subparagraph 5h3) of Article 12 of the Act, means the following payments: <Amended on Dec. 29, 2017; Feb. 28, 2025> |
| 1. | Day duty allowances, night watch allowances, and other similar allowances; |
| 2. | Travel expenses in an amount equivalent to reimbursement of actual expenses (including an amount not exceeding 200,000 won per month, from among the amounts paid in accordance with the payment standards prescribed by the rules, etc. of the relevant religious organization in lieu of actual travel expenses, where a religion-related worker directly drives a vehicle owned by, or leased under the name of, the religion-related worker and uses it for activities as a religion-related worker of the religious organization to which he or she belongs); |
| 3. | Money and goods specified in subparagraph 18 of Article 12; |
| 4. | Payments that a religion-related worker receives for relief from a natural disaster or any other disaster. |
[This Article Added on Feb. 17, 2016]
SECTION 2 Tax Base and Calculation of Tax Amount
| Article 20 (Scope of workers employed on daily basis, computation of house rental income) |
| (1) | "Workers employed on a daily basis prescribed by Presidential Decree" in Article 14(3)2 of the Act, means any of the following persons who receives remuneration for labor based upon the days or hours for which they provide labor, or where their pay is calculated based upon the outcome of labor in the days or hours for which they provide labor: <Amended on Feb. 18, 2010> |
| 1. | Persons engaging in construction works, excluding the following: |
| a. | Persons employed continuously for at least one year by the same employer; |
b0 Persons employed by the same employer continuously in order to engage in the following jobs in general:
| (1) | Directly instructing or supervising persons who prepare for works or engage in manual labor; |
| (2) | Technical work, clerical work, typing, cooking, guard, etc. required at a work site; |
| (3) | Operating or maintaining construction machines; |
| 2. | Persons engaging in loading and unloading (including stevedores), excluding the following: |
| a. | Persons regularly receiving remuneration for labor, not receiving remuneration for labor on days on which they provide labor; |
b0 Persons employed by the same employer continuously in order to engage in the following jobs in general:
| (1) | Directly instructing or supervising persons who prepare for works or engage in manual labor; |
| (2) | Operating or maintaining major machines; |
| 3. | Persons engaging in jobs other than those referred to in subparagraph 1 or 2, who do not remain under continuous employment by the same employer for at least three months under employment contract. |
| (2) | "The total amount of gross earnings prescribed by Presidential Decree" in Article 14(3)7 of the Act, means the gross revenue prescribed in Article 8-2(6). <Added on Feb. 3, 2015> |
| (3) | Article 8-2(1) through (4) shall apply mutatis mutandis to the computation, etc. of house rental income prescribed in Article 14(3)7 of the Act. <Added on Feb. 3, 2015> |
[This Article Wholly Amended on Feb. 3, 2015]
| Article 20-2 (Requirements for withdrawal for purpose of medical treatment or due to inevitable circumstances) |
| (1) | "Pension income withdrawn in the amount where the requirements prescribed by Presidential Decree are met, for the purpose of medical treatment or due to a natural disaster or any other inevitable circumstances" in Article 14(3)9b of the Act, means an amount withdrawn from a pension account under Article 20-3(1)2 of the Act (hereinafter referred to as "pension account") in any of the following cases: <Amended on Feb. 15, 2022; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | Where the person who intends to withdraw an amount from a pension account due to the occurrence of any of the following events submits documents evidencing the occurrence of such event to the financial company, etc. managing the pension account (hereinafter referred to as "pension account administrator"), within six months from the date the occurrence of the event is confirmed: |
| b. | Death of the holder of the pension account or emigration abroad under the Emigration Act; |
| c. | Where the holder of the pension account or any of family members dependent to him or her (limited to persons eligible for the basic deduction under Article 50 of the Act (without any limit on income)) needs medical care for at least three months due to a disease or an injury; |
| d. | Where the holder of the pension account suffers damage from a disaster defined in Article 66(1)2 of the Framework Act on the Management of Disaster and Safety, which requires more than 15 days of inpatient care; |
| e. | Where the holder of the pension account is declared bankrupt or becomes subject to a decision to commence proceedings for individual rehabilitation under the Debtor Rehabilitation and Bankruptcy Act; |
| f. | Suspension of business operations of the holder of the pension account, cancellation of authorization or permission for business, resolution of dissolution, or declaration of bankruptcy; |
| 2. | Where the holder of a pension account, who meets the criteria under Article 40-2(3)1 or 2, submits evidentiary documents specified by Decree of the Ministry of Finance and Economy in order to withdraw an amount from the pension account for the medical expenses prescribed in Article 118-5(1) or (2) (limited to medical expenses only for him or her), within six months from the date he or she pays such medical expenses. |
| (2) | The amount that may be withdrawn under paragraph (1)1c and d shall be limited to the maximum amount specified by Decree of the Ministry of Finance and Economy, taking into consideration medical expenses prescribed in Article 118-5(1) or (2), nursing expenses, or the minimum living cost publicly notified by the Minster of Health and Welfare, etc. <Amended on Feb. 15, 2022; Dec. 30, 2025> |
| (3) | In order to withdraw medical expenses pursuant to paragraph (1)2, only one pension account per person may be designated as the pension account for medical expenses (limited to where the administrator of the relevant pension account consents to the designation). |
| (4) | A pension account administrator shall keep evidentiary documents submitted under paragraph (1)1 and 2 for five years from the day immediately following the deadline for the payment of withholding tax on the relevant withdrawal. |
| (5) | Except as otherwise expressly provided for in paragraphs (1) through (4), matters necessary for procedures for withdrawal from a pension account shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Wholly Amended Feb. 3, 2015]
| Article 21 (Scope of income subject to separate taxation similar to lottery prize income) |
"Other income prescribed by Presidential Decree" in Article 14(3)8e of the Act, means any of the following income: <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 15, 2013; Feb. 3, 2015; Dec. 30, 2025>
| 1. | Deleted; <Feb. 15, 2013> |
| 2. | Refund under Article 21(1)4 of the Act; |
| 3. | Prize money and other valuables under Article 21(1)14 of the Act; |
| 4. | Deleted; <Feb. 2, 2012> |
| 5. | Income prescribed by Decree of the Ministry of Finance and Economy as income similar to those specified in subparagraphs 2 and 3. |
[This Article Added on Feb. 4, 2009]
[Title Amended on Feb. 15, 2013]
| Article 22 Deleted. <Dec. 30, 2003> |
| Article 22-2 (Interest income from state bonds) |
| (1) | Where bonds issued by the State are divided into principal and interest, the discounted value of bonds corresponding to the principal and interest shall be deemed the discounted value of bonds under Article 16(1)1 of the Act. |
| (2) | Where the following bonds are issued in unity (referring to issuance by unifying the terms and conditions of issuance of bonds to be issued additionally for a given period, such as coupon rate, maturity, etc.) on the open market, the difference between the sale price and par value of the relevant bonds shall be deemed not to be included in the interest and discounted value under Article 16(1)1 or 2 of the Act: <Amended on Feb. 22, 2008; Feb. 18, 2010; Dec. 30, 2014> |
| 2. | Industrial finance bonds prescribed in Article 23 of the Korea Development Bank Act; |
| 3. | Deposit protection fund bonds and compensation fund bonds for deposit protection fund bonds prescribed in Articles 26-2 and 26-3 of the Depositor Protection Act; |
| 4. | Monetary stabilization bonds of the Bank of Korea prescribed in Article 69 of the Bank of Korea Act. |
| (3) | In cases of bonds issued by the State, the principal of which varies according to commodity prices (hereinafter referred to as "inflation-linked treasury bonds"), the amount of increase in the principal of such bonds shall be included in the interest and discounted value under Article 16(1)1 of the Act. <Added on Feb. 28, 2007; Feb. 15, 2013; Feb. 17, 2016> |
[This Article Wholly Amended on Feb. 9, 2006]
| Article 23 Deleted. <Dec. 31, 2024> |
| Article 24 (Profit margins from repurchase agreement) |
"Profit margin on repurchase of bonds or securities prescribed by Presidential Decree" in Article 16(1)8 of the Act means profit margin on bonds or securities traded on condition of repurchase or resale by a financial company, etc. (referring to a financial company, etc. falling under any item of subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality and a corporation falling under any subparagraph of Article 111(1) of the Enforcement Decree of the Corporate Tax Act; hereinafter the same shall apply) by applying the rate of interest agreed in advance according to the repurchase period. <Amended on Feb. 12, 2019>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 25 (Profit margins on savings insurance) |
| (1) | "Profit margins on any of the savings insurances prescribed by Presidential Decree" in the main sentence of Article 16(1)9 of the Act, means the amounts calculated by subtracting paid-in insurance premiums or paid-in mutual-aid contributions (hereafter in this Article referred to as "insurance premiums") from the insurance or mutual-aid proceeds receivable upon the expiration of an insurance contract or during the insurance contract period, or from the refund receivable upon the termination of an insurance contract before the expiration thereof (limited to those not receivable for the death, illness, wounds, or any other bodily injuries or for the destruction of or damage to assets; hereafter in this Article referred to as "insurance proceeds"): <Amended on Feb. 3, 2017; Feb. 13, 2018> |
| (2) | "Insurance contracts" in paragraph (1) means any of the following contracts: <Amended on Dec. 30, 1995; Dec. 31, 1998; Mar. 28, 2000; Dec. 29, 2000; Feb. 19, 2005; Aug. 19, 2005; Feb. 9, 2006; Jul. 24, 2012; Feb. 15, 2013; Jun. 11, 2013; Feb. 28, 2025> |
| 1. | Life insurance contracts or accident insurance contracts provided for in the Insurance Business Act; |
| 2. | Life mutual-aid contracts or accident mutual-aid contracts administered pursuant to relevant Acts by any of the following institutions: |
| a. | Deleted; <Feb. 15, 2013> |
| b. | The National Federation of Fisheries Cooperatives and cooperatives incorporated under the Fisheries Cooperatives Act; |
| c. | Deleted; <Dec. 31, 1999> |
| d. | The National Credit Unions Federation of Korea incorporated under the Credit Unions Act; |
| e. | The Community Credit Cooperatives Federation incorporated under the Community Credit Cooperatives Act; |
| 3. | Postal insurance contracts established under the Postal Savings and Insurance Act. |
| 4. | A contract similar to the contracts referred to in subparagraphs 1 through 3, under which a party promises to pay money and other benefits upon the occurrence of a contingent event for the purpose of risk coverage and receives consideration therefor. |
| (3) | "Insurance meeting the requirements prescribed by Presidential Decree" in Article 16(1)9a of the Act means insurance that falls under any of the following subparagraphs from the time of entering into an insurance contract (excluding contracts referred to in paragraph (2)4 and insurance contracts concluded pursuant to the proviso of Article 3 of the Insurance Business Act): <Added on Feb. 3, 2017; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | A savings insurance contract for which the sum of insurance premiums to be paid by each policy holder (referring to the sum of insurance premiums of all saving insurance contracts signed by a policy holder (excluding savings insurance contracts under subparagraph 2 and life pension insurance contracts under paragraph (4)) does not exceed the following amounts; provided, the same shall not apply where the period from the date of initial payment (hereafter referred to as "date of initial payment" in this Article) to the date of expiration or early termination is at least ten years, but paid-in insurance premiums shall be paid in installments in the form of annuities during a fixed period before the lapse of ten years from the date of payment of the initial insurance premium: |
| a. | In cases of an insurance contract signed on or before March 31, 2017: 200 million won; |
| b. | In cases of an insurance contract signed on or after April 1, 2017: 100 million won; |
| 2. | A savings insurance contract in monthly installments, which meets the following requirements: |
| a. | The period of payment from the date of initial payment for the savings insurance contract in monthly installments shall be at least five years; |
| b. | The basic insurance premiums payable monthly from the date of initial payment shall be in equal installments (including where the basic insurance premiums may be increased by not more than one time the basic insurance premiums initially agreed), and the period of advance payment of the basic insurance premiums shall not exceed six months; |
| c. | The sum of insurance premiums to be paid monthly by each policy holder (referring to the sum of monthly paid-in insurance premiums, including basic insurance premiums of all insurance contracts in monthly installments signed by each policy holder (excluding insurance contracts specified by Decree of the Ministry of Finance and Economy, among insurance contracts under which the amount refundable at maturity does not exceed paid-in insurance premiums) and additionally paid insurance premiums, as calculated by the method prescribed by Decree of the Ministry of Finance and Economy), shall not exceed 1, 500,000 won (limited to insurance contracts signed on or after April 1, 2017). |
| (4) | "Whole life annuity insurance meeting the requirements prescribed by Presidential Decree" in Article 16(1)9b of the Act means whole life annuity insurance that satisfies all of the following requirements from the time of entering into an insurance contract (excluding contracts referred to in paragraph (2)4 and insurance contracts concluded pursuant to the proviso to Article 3 of the Insurance Business Act): <Added on Feb. 3, 2017; Feb. 28, 2025; Oct. 1, 2025> |
| 1. | Insurance proceeds, profits, etc. shall be paid to the policy holder in annuities from the time when the policy holder attains the age of 55 years after the lapse of the contract period for the payment of insurance premiums until death; |
| 2. | Insurance proceeds, profits, etc. shall not be paid in any form other than annuities; |
| 3. | Upon death (referring to the expiration of the period of guarantee, where the period during which the payment of insurance proceeds, profits, etc. in annuities is guaranteed (hereafter in this Article, referred to as "period of guarantee") within the limit of the life expectancy by gender and by age according to the statistical tables approved and publicly notified by the Minister of Data and Statistics pursuant to Article 18 of the Statistics Act (a figure below the decimal point shall be cut off; hereafter in this Article, referred to as "life expectancy")), the insurance contract and the resources for the pension shall be extinguished; |
| 4. | The policy holder, the insured, and the beneficiary shall be the same person, and the insurance contract shall not be terminated early before the date of death after the initial payment of annuities commences; |
| 5. | The amount of annuity receivable annually (the amount changed according to a change of the interest rate after the receipt of pension commences and the amount of annuity to be received after deferred shall not be included herein) shall not exceed the amount calculated by the following formular: |
Assessed amount of the pension account as at the commencement date of receipt of pension x 3
──────────────────────
Life expectancy as at the commencement date of receipt of pension
| (5) | If an insurance contract under paragraph (3) or (4) ceases to meet the relevant requirements after it is signed, it shall be excluded from the insurance contracts referred to in paragraphs (3) and (4); provided, if an insurance contract under paragraph (3)2 meets the requirement under paragraph (3)1, although it ceases to meet the relevant requirements after it is signed, the insurance contract shall be deemed qualified as an insurance contract under paragraph (3)1, while an insurance contract under paragraph (4) shall be deemed qualified as an insurance contract under any subparagraph of paragraph (3), even where it ceases to meet the relevant requirements after it is signed, but meets the requirement in any subparagraph of paragraph (3). <Added on Feb. 3, 2017> |
| (6) | When any of the following changes (with respect to any previous insurance agreement, limited to the change under subparagraph 3) is made to an insurance agreement under paragraph (3)1 and 2 and an insurance agreement entered into before February 15, 2013 (referring to an insurance agreement subject to application of former Article 25(1) pursuant to Article 35 of the Addenda to the Enforcement Decree of the Income Tax Act (Presidential Decree No. 24356); hereafter referred to as "previous insurance agreement" in this paragraph), the date of change shall be the first payment date of the relevant insurance agreement; provided, if a change referred to in subparagraph 1 or 2 is made to an insurance contract under paragraph (3)2, the period of installment payment of premiums until the date of amendment of the contract shall be included in the period of installment payment under paragraph (3)2b, and the premiums already paid before the amendment of the contract shall be deemed to meet the requirements in paragraph (3)2b even after the amendment of the contract: <Added on Feb. 15, 2013; Jun. 11, 2013; Feb. 21, 2014; Feb. 3, 2017> |
| 1. | Where the name of policyholder is changed (excluding the change due to death); |
| 2. | Where an indemnity insurance is changed to a savings insurance; |
| 3. | Where a standard insurance premium is increased by more than 100% of the initially contracted standard insurance premium. |
| (7) | Where an insurance contract is amended under paragraphs (6) and (9), the method of calculating the sum of insurance premiums under paragraph (3)1 and 2c shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 3, 2017; Jun. 30, 2025; Dec. 30, 2025> |
| (8) | In calculating an insurance premium under paragraph (1), dividends and other money similar thereto (hereafter referred to as "dividends, etc." in this paragraph) paid under an insurance contract during an insurance contract period shall be deducted from paid-up insurance premium. In cases of offsetting an insurance premium with dividends, etc., the insurance premium shall be deemed paid with dividends, etc. from an insurance contract. <Amended on Feb. 3, 2017> |
| (9) | Where a portion of the insurance proceeds under a protection-type insurance contract is reduced pursuant to an agreement and an amount equivalent to such reduced portion (hereafter referred to as the "reduced portion of insurance proceeds" in this Article) is paid in the form of an annuity in installments, such contract shall be deemed converted into a savings-type insurance contract, and the date on which such reduced portion of insurance proceeds is first paid in the form of an annuity in installments (hereafter referred to as the "initial annuity payment date" in this Article) shall be deemed the initial premium payment date of the savings-type insurance contract. In such cases, the premium payment period up to the initial annuity payment date shall be included in the payment period under paragraph (3)2a, and premiums paid before the annuity payment date shall be deemed to satisfy the requirement under paragraph (3)2b even after the conversion of the contract. <Added on Jun. 30, 2025> |
| (10) | Where a contract is converted into a savings-type insurance contract pursuant to paragraph (9), notwithstanding the former part of that paragraph, where such conversion satisfies all of the following requirements, the initial premium payment date of the existing protection-type insurance contract shall be deemed the initial premium payment date of the savings-type insurance contract: <Added on Jun. 30, 2025> |
| 1. | The existing protection-type insurance contract shall be a monthly premium-type insurance contract under which insurance proceeds are payable upon the death, illness, injury, or any other bodily harm of the insured, and the amount of insurance proceeds shall not exceed 900 million won; |
| 2. | Premium payments shall have been completed before the initial annuity payment date; |
| 3. | The policyholder, the insured, and the beneficiary under the savings-type insurance contract resulting from the conversion shall be identical; |
| 4. | The policyholder shall receive the reduced portion of insurance proceeds in the form of an annuity in installments from 55 years of age. |
| Article 26 (Scope of interest income) |
| (1) | "Workplace mutual-aid association prescribed by Presidential Decree" in Article 16(1)10 of the Act, means a mutual-aid society or a mutual-aid association (including organizations similar thereto) established under Article 32 of the Civil Act or other Acts, which are organized for stable living, enhancement of welfare, or mutual-aid for workers engaging in the same place of work or occupation. <Amended on Dec. 31, 1997; Feb. 19, 2005; Feb. 18, 2010; Feb. 2, 2012> |
| (2) | An excess amount of repayment specified in Article 16(1)10 of the Act shall be determined by subtracting the amount of paid-in deductions from the amount of repayment that the worker receives from the relevant workplace mutual-aid association according to its bylaws upon his or her retirement or withdrawal from the mutual-aid association (hereinafter referred to as "gain exceeding the payments") and adding the gain accruing additionally during the period of payment (hereinafter referred to "gain additionally accruing from the repayment"), where the repayment is paid in installments. <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 21, 2014; Feb. 3, 2015> |
| (3) | A profit from a non-business loan specified in Article 16(1)11 of the Act shall be interest, fees, etc. paid to a person who does not have the loan of money for business purposes, by his or her temporary or incidental loan of money. <Added on Feb. 18, 2010> |
| (4) | The amount equivalent to interest accrued from bonds which a resident receives from a borrower on condition that the resident redeems the same quantity of bonds in the same kind in a given period, shall be included in interest income under Article 16(1)12 of the Act. <Added on Dec. 30, 2010> |
| (5) | "Merged with the derivatives, as prescribed by Presidential Decree" in Article 16(1)13 of the Act, means any of the following cases where an individual person concurrently trades instruments bearing interest income (hereafter in this paragraph referred to as "interest-bearing instruments") and derivatives defined in Article 5 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "derivatives"): <Amended on Feb. 3, 2017> |
| 1. | Where the instruments meet all the following requirements and are managed substantially as one and the same kind of instrument: |
| a. | Trading of interest-bearing instruments developed and sold directly by a financial company, etc. and the agreement on derivatives of the financial company, etc. shall be made through the financial company, etc.; |
| b. | The derivatives shall involve an agreement for trading money or any other thing with a value as property, as calculated according to all or part of principal and interest income of interest-bearing instruments (hereafter in this paragraph referred to as "interest income, etc."), the price, interest rate, indicator, or unit of interest income, etc. or an index, etc. based on such price, interest rate, indicator, or unit; |
| c. | The financial company, etc. under item a shall pay interest income, etc. accrued from interest-bearing instruments and profits accrued from derivatives; |
| 2. | Where all the following requirements are met and profits from derivatives (limited to cases falling under Article 166-2(1)1 of the Financial Investment Services and Capital Markets Act) paid by a financial company, etc. at a specific time in the future are fixed: |
| a. | The trading of interest-bearing instruments handled by the financial company, etc. and the agreement on derivatives of the financial company, etc. shall be made through the financial company, etc. (including where a right of pledge is created over interest-bearing instruments for the performance of the agreement on derivatives or where the trading of interest-bearing instruments and the agreement on derivatives are made through a money trust under Article 103 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, although the trading of interest-bearing instruments and the agreement on derivatives are made through at least two financial companies, etc.); |
| b. | The derivatives shall involve an agreement for trading money or any other thing with a value as property, as calculated according to interest income of interest-bearing instruments, the price, interest rate, index, or unit of interest income, etc. or an index, etc. based on such price, interest rate, indicator, or unit; |
| c. | The definite profits accrued from derivatives shall be greater than interest income accrued from interest-bearing instruments. |
| (6) | Where a resident sells bonds or securities equivalent to bonds (hereafter referred to as "bonds, etc." in this paragraph and Article 26- 3(7)) on the condition of repurchasing them by applying a pre-agreed rate of return according to the repurchase period, an amount equivalent to the interest arising from such bonds, etc. that is received from the purchaser of such bonds, etc. until the date of repurchase shall be included in interest income under Article 16(1)12 of the Act. <Added on Feb. 28, 2025> |
[Title Amended on Dec. 30, 2010]
| Article 26-2 (Scope of collective investment schemes) |
| (1) | "Collective investment scheme prescribed by Presidential Decree" in Article 17(1)5 of the Act means the collective investment scheme that meets all the following requirements: <Amended on Feb. 28, 2025> |
| 1. | It shall be a collective investment scheme prescribed in the Financial Investment Services and Capital Markets Act (excluding special accounts of an insurance company pursuant to Article 251 of the same Act, but including a trust which preserves the principal, as a money trust; hereinafter referred to as "collective investment scheme"); |
| 2. | It shall settle accounts and distribute dividend at least once each year from the date of establishment of the relevant collective investment scheme; provided, the distribution of any of the following profits may be reserved, and where a profit specified in Article 242 of the Financial Investment Services and Capital Markets Act is less than zero, the distribution may also be reserved (limited to cases prescribed by collective investment rules pursuant to Article 9(22) of the same Act): |
| a. | Profits calculated as a result of an exchange-traded collective investment scheme under Article 234 of the Financial Investment Services and Capital Markets Act (hereafter referred to in this Article as an "exchange-traded collective investment scheme") replacing its index constituents or investing in derivatives (excluding interest income and dividend income, except for interest income and dividend income referred to in item d); |
| b. | Profits on valuation of a collective investment scheme valuated pursuant to Article 238 of the Financial Investment Services and Capital Markets Act; |
| c. | A profit on trading of collective investment property under the accounting standards under Article 240(1) of the Financial Investment Services and Capital Markets Act; |
| d. | Interest income and dividend income derived from a collective investment scheme which qualifies as an exchange-traded collective investment scheme that is listed on a securities market, the objective of which is to track the movement of an index based solely on the prices of stocks traded on the securities market, and which reinvests dividend income in accordance with the weight of constituent stocks for the purpose of replicating the index movement; |
| 3. | It shall be entrusted with money and refunded with money (including a trust, the trust value and the refund value of which are all denominated in money, as cases where it is entrusted with assets other than money and refunds). |
| (2) | For the purposes of paragraph (1), a collective investment scheme established outside the Republic of Korea shall be deemed a collective investment scheme under paragraph (1), even if it does not satisfy the requirements set forth in the subparagraphs of paragraph (1). |
| (3) | Where a collective investment scheme fails to meet the requirements specified under paragraph (1), it shall be taxed according to the following classifications: <Amended on Feb. 28, 2025> |
| 1. | Income derived from an investment trust, investment limited partnership, or investment anonymous partnership under Article 9(18) of the Financial Investment Services and Capital Markets Act shall be regarded as income from a trust other than a collective investment scheme under Article 4(2) of the Act, and shall be subject to taxation accordingly; |
| 2. | Profits from an investment company, an investment limited liability company, or an investment limited partnership company under Article 9(18) of the Financial Investment Services and Capital Markets Act, and an institutional private equity fund under paragraph (19)1 of the aforesaid Article (including the former private equity fund that is deemed an institutional private equity funds, a private equity fund for corporate financial stability, or a private equity fund specializing in start-ups and venture businesses under Article 8(1) through (4) of the Addenda to the partially amended Financial Investment Services and capital Markets Act (Act No. 18128); the same shall apply hereafter in this Article and Article 27-3(3)), to which the special taxation for partnership firms under Article 100-15 of the Act on Restriction on Special Cases concerning Taxation does not apply, shall be deemed dividends and distributions under Article 17(1)1 of the Act and taxed accordingly. |
| (4) | Gains from a collective investment scheme under paragraph (1) (hereinafter referred to as "gains from a collective investment scheme") shall not include any profit or loss arising from the trading or valuation of securities under the items of subparagraph 2 acquired by the collective investment scheme by any of the methods under the items of subparagraph 1 (in the case of the method under subparagraph 1c, limited to cases of acquiring securities under subparagraph 2b), or from exchange-traded derivatives under the Financial Investment Services and Capital Markets Act; provided, profit or loss arising from transactions in stocks or investment shares acquired by a nonresident or foreign corporation through a general private collective investment scheme under Article 9(19)2 of the Financial Investment Services and Capital Markets Act or an institutional private collective investment scheme not subject to the special taxation for partnership firms under Article 100-15 of the Act on Restriction on Special Cases concerning Taxation [limited to listed stocks or investment shares on a securities market under Article 8-2(4)1 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as the "securities market"), where, during the year to which the date of transfer belongs and the immediately preceding five years, 25/100 or more of the total issued shares or total investment of the corporation that issued such stocks or investment shares has been owned] shall be included in gains from a collective investment scheme: <Amended on Feb. 28, 2025> |
| a. | Direct acquisition by a collective investment scheme; |
| b. | Acquisition through investment by a collective investment scheme in collective investment securities under Article 9(21) of the Financial Investment Services and Capital Markets Act [in cases of investment in derivative-linked securities under Article 4(7) of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "derivative-linked securities") that represent contractual rights to obtain profits or avoid losses in a predetermined manner linked to changes in the price, interest rate, indicator, unit, or index based thereon of underlying assets under paragraph (10) of that Article, and that are listed and traded on a securities market (hereinafter referred to as "exchange-traded notes"), such investment means investment in securities corresponding to the underlying assets comprising the index of such exchange-traded notes]; |
| c. | Acquisition through investment by a collective investment scheme in equity interests in a venture investment association under the Venture Investment Promotion Act or a new technology business investment association under the Specialized Credit Finance Business Act. |
| 2. | Subject matters of acquisition: |
| a. | Securities listed on a securities market (excluding the following; hereinafter the same shall apply in this paragraph): |
1) Bonds, etc. under Article 46(1) of the Act;
2) Stocks or beneficiary certificates of a foreign collective investment scheme established under foreign statutes;
3) Stocks or beneficiary certificates of an exchange-traded collective investment scheme established for the purpose of tracking an index calculated based on representative items of a securities market or a similar market located in a foreign country (including an index calculated based on the volatility of such index);
4) Exchange-traded notes that are established for the purpose of tracking an index calculated based on representative items of a securities market or a similar market located in a foreign country (including an index calculated based on the volatility of such index);
| b. | Stocks or equity interests in a venture business under the Special Act on the Promotion of Venture Businesses; |
| c. | Exchange-traded derivatives under the Financial Investment Services and Capital Markets Act with the securities referred to in item a as underlying assets. |
| (5) | Profits from trading collective investment securities defined in Article 9(21) of the Financial Investment Services and Capital Markets Act and foreign collective investment securities under Article 279(1) of the same Act (excluding those falling under any of the following) by means of money transfer between accounts, change of the name of account's holder, and actual transfer of collective investment schemes, shall be profits from a collective investment scheme: <Amended on Dec. 30, 2010; Feb. 28, 2025> |
| 1. | Stocks or investment shares specified in Article 94(1)3 of the Act; |
| 2. | Collective investment securities of a collective investment scheme that is an exchange-traded collective investment scheme designed to directly track changes in an index based solely on the prices of stocks traded on a securities market (excluding a collective investment scheme that defers the distribution of interest income or dividend income pursuant to paragraph (1)2d); |
| 3. | Collective investment securities of collective investment scheme listed on the securities exchange defined in Article 9(18)2 of the Financial Investment Services and Capital Markets Act (excluding a scheme which does not distribute all the profits available for dividend under Article 51-2(1) of the Corporate Tax Act on at least one occasion in the previous business year). |
| (6) | A profit from a collective investment scheme shall be the amount after deduction of various remuneration, fees, etc. under the Financial Investment Services and Capital Markets Act. |
| (7) | Article 4(2) of the Act shall apply to a collective investment scheme which meets all the following requirements, as a private offering collective investment scheme defined in Article 9(19) of the Financial Investment Services and Capital Markets Act, which is not deemed a collective investment scheme referred to in paragraph (1) even where it meets all the requirements specified under paragraph (1): <Amended on Feb. 2, 2012> |
| 1. | Where an investor is a resident (including a nonresident and a foreign corporation who has no place of business in the Republic of Korea; hereafter the same shall apply in this Article) or is comprised of a resident and his or her related person under Article 1-2(1) through (3) of the Enforcement Decree of the Framework Act on National Taxes (where an investor is a nonresident or a foreign corporation who has no place of business in the Republic of Korea, referring to a person in any of the following relationship): |
| a. | A nonresident, his or her spouse, lineal relation, brother and sister; |
| b. | Relationship in which one party owns directly or indirectly at least 50/100 of stocks with voting right of the other party; |
| c. | Where a third party owns directly or indirectly at least 50/100 of stocks with voting right of one party or the other party respectively, relationship between such one party and the other party; |
| 2. | Where an investor makes a decision on management of assets substantially. |
| (8) | Article 2(3) of the Enforcement Decree of the Adjustment of International Taxes Act shall apply mutatis mutandis to calculating the indirect ownership ratio of stocks pursuant to paragraph (7)1b and c. |
| (9) | The method of calculating tax base on a profit from a collective investment scheme, and other necessary matters, shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Wholly Amended on Dec. 31, 2024]
| Article 26-3 (Scope of dividend income) |
| (1) | The phrase "profits from derivative-linked securities or derivative-linked bonds prescribed by Presidential Decree" in Article 17(1)5-2 of the Act means any of the following profits: <Amended on Dec. 31, 2024> |
| 1. | Gains from derivatives-linked securities; provided, gains from securities or certificates indicating rights to effectuate the purchase or sale of stock certificates or a transaction for delivering or accepting money according to a pre-determined method tied to the fluctuations of the prices of specific stock certificates or the price indexes of stocks that, by either party's unilateral expression or willingness, are traded in a securities market or a similar market located in a foreign country shall be excluded herefrom; |
| 2. | Profits from trading exchange-traded securities through transfers between accounts, changes in the name of an account, and physical transfers of exchange-traded stocks; provided, profits generated by trading exchange-traded securities through transfers between accounts, changes in the name of the account, and physical transfer of exchange-traded stocks for the purpose of tracking changes in the index based only on the price of stocks traded in the securities market are excluded. |
| 3. | Profits generated from bonds under Article 469(2)3 of the Commercial Act. |
| (2) | Deleted. <Feb. 13, 2018> |
| (3) | Gains from exchange-traded notes shall be determined by subtracting various remunerations, fees, etc. under the Financial Investment Services and Capital Markets Act, and the method of determining tax base for gains from exchange-traded notes, etc. shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Dec. 31, 2024; Dec. 30, 2025> |
| (4) | The amount equivalent to dividend accrued from stocks, received from a borrower of the stocks on condition that a resident redeems the same quantity of stocks of the same kind in a given period, shall be included in dividend income under Article 17(1)9 of the Act. <Added on Dec. 30, 2010; Feb. 21, 2014> |
| (5) | "Merged with derivatives, as prescribed by Presidential Decree" in Article 17(1)10 of the Act, means any of the following cases where an individual person concurrently trades instruments bearing dividend income (hereafter in this paragraph referred to as "dividend-bearing instruments") and derivatives: <Amended on Feb. 3, 2017> |
| 1. | Where the instruments meet all the following requirements and are managed substantially as one and the same kind of instrument: |
| a. | Trading of dividend-bearing instruments developed and sold directly by a financial company, etc. and the agreement on derivatives of the financial company, etc. are made through the financial company, etc.; |
| b. | The derivatives shall involve an agreement for trading money or any other thing with a value as property, as calculated according to all or part of principal and dividend income of dividend-bearing instruments (hereafter in this paragraph referred to as "dividend income, etc."), the price, interest rate, indicator, or unit of interest income, etc. of dividend income, etc. or an index, etc. based on such price, interest rate, indicator, or unit; |
| c. | The financial company, etc. under item a shall pay dividend income, etc. from interest-bearing instruments and profits from derivatives; |
| 2. | Where all the following requirements are met and profits from derivatives (limited to cases falling under Article 166-2(1)1 of the Financial Investment Services and Capital Markets Act) paid by a financial company, etc. at a specific time in the future are fixed: |
| a. | The trading of dividend-bearing instruments handled by the financial company, etc. and the agreement on derivatives of the financial company, etc. shall be made through the financial company, etc. (including where a right of pledge is created over dividend-bearing instruments for the performance of the agreement on derivatives or where the trading of dividend-bearing instruments and the agreement on derivatives are made through a money trust under Article 103 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, although the trading of dividend-bearing instruments and the agreement on derivatives are made through at least two financial companies, etc.); |
| b. | The derivatives shall involve an agreement for trading money or any other thing with a value as property, as calculated according to dividend income of dividend-bearing instruments, the price, interest rate, index, or unit of dividend income, etc. or an index, etc. based on such price, interest rate, indicator, or unit; |
| c. | The definite profits from derivatives shall be greater than dividend income from dividend-bearing instruments. |
| (6) | Dividends received from the reduction of capital reserves pursuant to Article 461-2 of the Commercial Act (excluding dividends received from the reduction of capital reserves falling under any of Article 18(8) of the Corporate Tax Act) shall not be included in dividend income under Article 17(1) of the Act. In such cases, dividends received by a resident who falls under any of the following shall not be included in dividend income to the extent of the book value of the shares held by such resident: <Amended on Dec. 31, 2025> |
| 1. | A major shareholder of a listed corporation under Article 94(1)3a1) of the Act; |
| 2. | A shareholder of an unlisted corporation (excluding cases falling under the proviso of Article 94(1)3b of the Act). |
| (7) | Where a resident sells securities (excluding bonds, etc.; hereafter the same shall apply in this paragraph) on the condition of repurchasing them by applying a pre-agreed rate of return according to the repurchase period, an amount equivalent to the dividend arising from such securities that is received from the purchaser of such securities until the date of repurchase shall be included in dividend income under Article 17(1)9 of the Act. <Added on Feb. 28, 2025> |
| (8) | "Beneficiary certificates prescribed by Presidential Decree" in Article 17(1)5-3 of the Act means beneficiary certificates that satisfy all of the following requirements: <Added on Feb. 28, 2025; Jun. 30, 2025; Dec. 30, 2025> |
| 1. | It shall fall under any of the following categories: |
| a. | It shall be issued by an innovative financial service provider under the Special Act on Support for Financial Innovation, notwithstanding Article 110(1) of the Financial Investment Services and Capital Markets Act, by applying the special case under Article 4(2)5 of the Special Act on Support for Financial Innovation; |
| b. | It shall be issued by a trustee under Article 8(7) of the Financial Investment Services and Capital Markets Act with one asset held in trust, pursuant to Article 32 of the Asset-Backed Securitization Act, and shall be publicly offered or sold under Article 119(1) of the Financial Investment Services and Capital Markets Act; |
| 2. | The profits of the trust shall be distributed to the holders of the securities at least once each year; provided, this shall not apply where the profits of the trust are less than zero or where any other grounds prescribed by Decree of the Ministry of Finance and Economy exist. |
| (9) | "Investment contract securities prescribed by Presidential Decree" in Article 17(1)5-4 of the Act means investment contract securities that satisfy all of the following requirements: <Added on Feb. 28, 2025; Jun. 30, 2025; Dec. 30, 2025> |
| 1. | It shall be publicly offered or sold under Article 119(1) of the Financial Investment Services and Capital Markets Act; |
| 2. | Profits derived from the joint business shall be distributed to the holders of the securities at least once each year; provided, this shall not apply where the profits of the joint business are less than zero or where any other grounds prescribed by Decree of the Ministry of Finance and Economy exist. |
| (10) | Gains arising from transactions in beneficiary certificates under Article 17(1)5-3 of the Act or investment contract securities under subparagraph 5-4 of that paragraph (hereinafter referred to as "fractional investment products" in this Article and Article 46) by means of physical transfer, transfer between accounts, change of account holder name, or any other similar method of transferring rights shall be included in gains from fractional investment products. <Added on Feb. 28, 2025> |
| (11) | Gains from fractional investment products shall be the amount remaining after deducting various fees, commissions, and other amounts prescribed by Decree of the Ministry of Strategy and Finance, and matters such as the method of calculating the tax base for gains from fractional investment products shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 28, 2025; Dec. 30, 2025> |
| (12) | Where a resident deposits funds with a comprehensive financial investment business entity under Article 8(8) of the Financial Investment Services and Capital Markets Act and receives from such comprehensive financial investment business entity profits arising from a comprehensive investment account under Article 77-6(1)3 of the Enforcement Decree of that Act (hereinafter referred to as "profits from a comprehensive investment account" in this Article), such profits shall be included in dividend income under Article 17(1)9 of the Act. <Added on Feb. 27, 2026> |
| (13) | Profits from a comprehensive investment account shall be the amount remaining after deducting various fees, commissions, and other such charges, and matters such as the method of calculating the tax base therefor shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 27, 2026> |
[This Article Added on Feb. 9, 2006]
| Article 27 (Calculation of deemed dividends) |
| (1) | In cases of deemed dividends under Article 17(2) of the Act, the value of property other than cash shall be based upon the amount calculated as follows: <Amended on Dec. 29, 2000; Feb. 19, 2005; Jun. 8, 2010; Feb. 17, 2016> |
| 1. | Any of the following amount, if acquired assets are stocks or contributed shares (hereafter in this Article referred to as "stocks, etc."): |
| a. | Face value or amount invested, in cases of stocks, etc. under Article 17(2)2 and 5 of the Act; |
| b. | Where stocks, etc. under Article 17(2)4 or 6 of the Act meet the requirements under Article 44(2)1 and 2 (excluding the provisions regarding the holding of stocks, etc.) of the Corporate Tax Act or Article 46(2)1 and 2 (excluding the provisions regarding the holding of stocks, etc.) of the same Act or fall under Article 44(3) of the same Act, the value of acquisition of stocks, etc. of the merged corporation, the divided corporation, or the disappearing corporation upon the division and merger (hereafter in this item, referred to as "merged corporation, etc."); provided, where stocks, etc. under Article 17(2)4 or 6 of the Act, money, and other assets are received together by division or merger, and the market price of the relevant stocks, etc. is smaller than the value of acquisition of stocks, etc. of the merged corporation, etc., it shall be the market price; |
| c. | Issuance prices, in cases of stock dividends under Article 462-2 of the Commercial Act; |
| d. | In cases of stocks, etc., other than those specified in items a through c, the market price at the time of acquisition; |
| 2. | In cases, other than subparagraph 1, the market price at the time of acquisition of such assets. |
| (2) | In cases of acquiring stocks, etc. under the proviso to Article 17(2)2 of the Act, the book value per new/old stock or per unit shall be as follows: |
┌─────────────────────────────┐
Book value per stock or per unit of investment =
│ Book value per old stock or per unit of investment │
│ (1 + Allotted number of new stocks, etc. per old stock │
│ or per unit of investment) │
└─────────────────────────────┘
| (3) | In calculating gross income from deemed dividends through capital reduction or stock retirement under Article 17(2)1 of the Act (including any decrease in investment or retirement of contribution quotas; hereafter referred to as "stock retirement, etc." in this paragraph), if any portion not deemed a deemed dividend under the proviso to Article 17(2)2 of the Act exists among stocks acquired due to the capitalization of capital reserve funds within two years retrospectively counted from the date of such deemed dividends (excluding stocks issued due to the capitalization of the amount exceeding the face value of a stock pursuant to the main sentence of Article 17(1)1 of the Corporate Tax Act; hereafter referred to as "short-term retired stocks, etc." in this paragraph), short-term retired stocks, etc. shall be deemed first reduced or retired, and the acquisition value of such short-term retired stock, etc. shall be deemed non-existent, notwithstanding paragraph (2). In such cases, if part of stocks, etc. are transferred in the period from the acquisition of short-term retired stocks, etc. to the date of deemed dividends, short-term retired stocks, etc. and other stocks, etc. shall be calculated by deeming they are transferred in proportion to the number of each stock, etc., and the book value per stock or per unit of investment after the stock retirement has been made shall be in accordance with the following formula: <Amended on Feb. 19, 2005; Feb. 15, 2013> |
┌────────────────────────────┐
│ Book value per stock or per unit of investment = │
│ Aggregate of acquisition value after stock retirement has been made │
│ / Total number of stocks, etc. after stock retirement has been made. │
│ │
└────────────────────────────┘
| (4) | "Capital reserve prescribed by Presidential Decree" in Article 17(2)2a of the Act, means the amount falling under each subparagraph of Article 17(1) of the Corporate Tax Act; provided, the amount falling under any subparagraph of Article 12(1) of the Enforcement Decree of the Corporate Tax Act shall be excluded therefrom. <Amended on Apr. 13, 2012> |
| (5) | In applying Article 17(2)2b of the Act, where part of the revaluation reserve is transferred to the capital or the contribution amount, the amount corresponding to the revaluation spread of land under Article 13(1)1 of the Assets Revaluation Act shall be calculated by the following formula: <Added on Dec. 31, 1999; Feb. 19, 2005> |
┌───────────────────────────────┐
│ Revaluation reserve transferred to the relevant capital or │
│ contribution (Revaluation spread under Article 13 (1)1 │
│ of the Assets Revaluation Act ÷ │
│ Assets revaluation spread) │
└───────────────────────────────┘
| (6) | The value of stocks without face value in cases of paragraph (1)1a and b shall be the amount obtained by dividing the amount transferred to the corporation's capital by the number of shares newly issued in return for the transfer into capital. <Added on Dec. 29, 2000; Feb. 21, 2014> |
| (7) | In computing the amount disbursed for acquiring the relevant stocks under Article 17(2)1, 3, 4, and 6 of the Act, their face value shall be deemed the amount disbursed for acquiring such stocks, where the stockholder falls under the category of minor stockholders prescribed by Decree of the Ministry of Finance and Economy taking into account the ratio of stocks held, etc., and where the computing of the amount disbursed for such acquisition is unclear as the number of stockholders holding the relevant shares is too many or as the transactions of relevant stocks are too frequent; provided this shall not apply where paragraph (3) is applicable and where the relevant stockholder establishes an amount other than the face value. <Added on Dec. 29, 2000; Feb. 18, 2010; Feb. 17, 2021; Dec. 30, 2025> |
| (8) | In calculating the amount used to acquire the relevant stocks pursuant to Article 17(2)1, 3, 4, and 6 of the Act, where such stocks are shares of a venture business acquired through the exercise of stock options under Article 16-2 or 16-3 of the Act on Restriction on Special Cases concerning Taxation, the market value at the time of exercising the stock options shall be deemed the amount used to acquire such stocks. <Added on Feb. 28, 2025> |
[This Article Wholly Amended on Dec. 31, 1998]
[Title Amended on Feb. 18, 2010]
| Article 27-2 (Scope of conversion of firms) |
"Cases prescribed by Presidential Decree" in Article 17(2)3c of the Act, means the cases falling under each subparagraph of Article 121 of the Enforcement Decree of the Corporate Tax Act: <Amended on Feb. 21, 2014; Feb. 3, 2015; Feb. 29, 2024>
| 1. | Deleted; <Feb. 3, 2015> |
| 2. | Deleted; <Feb. 3, 2015> |
| 3. | Deleted. <Feb. 3, 2015> |
[This Article Added on Feb. 22, 2008]
[Former Article 27-2 Moved to Article 27-3 <Feb. 22, 2008>]
| Article 27-3 (Corporations exempted from corporate tax) |
| (1) | "A corporation prescribed by Presidential Decree" in Article 17(3)5 of the Act, means any of the following corporations: <Amended on Feb. 19, 2005; Feb. 28, 2007; Feb. 4, 2009; Feb. 18, 2010; Feb. 17, 2021; Feb. 28, 2025> |
| 1. | Corporations to which the provisions of Article 51-2 of the Corporate Tax Act, Article 100-16 of the Restriction of Special Taxation Act or Article 104-31 are applied; |
| 2. | Corporations to which the provisions of Article 63-2, 121-2, 121-4, 121-8, or 121-9 of the Restriction of Special Taxation Act are applied. |
| (2) | "Rate prescribed by Presidential Decree" in Article 17(3)5 of the Act, means the following rate: <Amended on Feb. 18, 2010; Feb. 28, 2025> |
| 1. | In cases of a corporation falling under paragraph (1)1, 100/100; |
| 2. | In cases of a corporation falling under paragraph (1)2, a rate calculated by the following formula (where a business year to which the provisions of paragraph (1)2 are applied is only one business year, it shall be calculated on the basis of income in the relevant business year, and where the relevant rate exceeds 100/100, it shall be 100/100):(Aggregate of income subject to reduction or exemption in two immediately preceding business years × Rate of reduction or exemption) / Aggregate of gross income in two immediately preceding business years |
┌───────────────────────┐
│ (Aggregate of income subject to reduction or exemption in two immediately preceding business years │
│ × Rate of reduction or exemption) │
│───────────────────────│
│ Aggregate of gross income in two immediately preceding business years │
└───────────────────────┘
| (3) | "Dividend income prescribed by Presidential Decree" in the main sentence of Article 17(3) of the Act, means dividend income received from a private equity fund defined in Article 9(19)1 of the Financial Investment Services and Capital Markets Act (limited to companies that do not fall under paragraph (1)1). <Amended on Feb. 18, 2010; Oct. 23, 2015; Feb. 15, 2022> |
[This Article Wholly Amended on Dec. 31, 1999]
[Moved from Article 27-2 <Feb. 22, 2008>]
| Article 28 Deleted. <Feb. 18, 2010> |
| Article 29 Deleted. <Feb. 18, 2010> |
| Article 30 Deleted. <Feb. 18, 2010> |
| Article 31 (Scope of manufacturing business) |
When the provisions concerning business income pursuant to Article 19 of the Act apply, where a person's business meets all the requirements referred to in the following subparagraphs, and he or she manufactures products by entrusting a manufacturing company to manufacture goods, instead of directly manufacturing them, such business shall be deemed a manufacturing business pursuant to Article 19(1)3 of the Act:
| 1. | He or she shall plan products to be manufactured directly (including a plan, design, sample production, etc.); |
| 2. | He or she shall manufacture such products under his or her own name; |
| 3. | He or she shall take over such products and directly sell them under his or her own responsibility. |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 32 Deleted. <Feb. 13, 2018> |
| Article 33 (Scope of research and development business) |
"Research and development business prescribed by Presidential Decree" in Article 19(1)13 of the Act means research and development business excluding providing research or development services for pay according to a contract, etc.
[This Article Wholly Amended on Feb. 18, 2010]
| Article 34 Deleted. <Feb. 18, 2010> |
| Article 35 (Scope of educational institutions) |
"Educational institutions prescribed by Presidential Decree" in Article 19(1)15 of the Act means kindergartens under the Early Childhood Education Act, schools under the Elementary and Secondary Education Act and the Higher Education Act and institutions similar thereto prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 36 (Scope of social welfare service) |
"Social welfare service prescribed by Presidential Decree" in Article 19(1)16 of the Act means the social welfare service under subparagraph 1 of Article 2 of the Social Welfare Services Act and the long-term care service under subparagraph 3 of Article 2 of the Act on Long-Term Care Insurance for the Aged. <Amended on Feb. 15, 2013>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 37 (Scope of service industries related to art, sports, and leisure, association and organization, repair and other personal service industries) |
| (1) | Earnest money for an exclusive contract received by an entertainer, a professional sportsman, etc. in connection with his or her business activities shall be deemed business income. |
| (2) | "Associations and organizations prescribed by Presidential Decree" in Article 19(1)18 of the Act means associations and organizations according to the middle classification of the Korea Standard Industry Code; provided, where the relevant association or organization conducts a specific business, it shall be classified according to the details of its business. |
| (3) | Repair businesses and other personal services under Article 19(1)18 of the Act shall include personal services under subparagraph 1 of Article 42 of the Enforcement Decree of the Value-Added Tax Act. <Added on Feb. 15, 2013; Jun. 28, 2013> |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 37-2 (Scope of tangible business-use asset) |
"Tangible business-use assets prescribed by Presidential Decree, such as vehicles or delivery equipment" in the main clause of Article 19(1)20 of the Act means tangible assets under Article 62(2)1 (hereinafter referred to as "tangible fixed business-use assets"); provided, construction machinery under Appendix 1 of the Enforcement Decree of the Construction Machinery Management Act shall be limited to those acquired after January 1, 2018. <Amended on Feb. 11, 2020>
[This Article Added on Feb. 13, 2018]
[Title Amended on Feb. 11, 2020]
| Article 38 (Scope of wage and salary income) |
| (1) | Wage and salary income under Article 20 of the Act shall include the following income: <Amended on Dec. 30, 1995; Dec. 31, 1996; Dec. 31, 1997; Apr. 1, 1998; Dec. 31, 1998; Dec. 31, 1999; Dec. 29, 2000; Jan. 29, 2001; Dec. 31, 2001; Dec. 30, 2002; Dec. 30, 2003; Feb. 19, 2005; Aug. 19, 2005; Feb. 9, 2006; Feb. 28, 2007; Feb. 22, 2008; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Jul. 24, 2012; Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2017; Feb. 12, 2019; Feb. 11, 2020; Feb. 17, 2021; Feb. 28, 2025> |
| 1. | Expenses paid in terms of confidential expenses (including expediency funds; hereinafter the same shall apply), social expenses, and others under similar pretexts, which are pay unclear as to whether they are used for business; |
| 2. | Money for merit, bonus, money for celebrating a business opening, school expenses, scholarships (including school expenses and scholarships which an employee's children at school received from an employer), and other similar salaries paid to an employee; |
| 3. | Labor allowance, family allowance, war bonus, price allowance, cashier's allowance, duty allowance, and other salaries similar thereto; |
| 4. | Allowances for collecting money, remuneration for concluding insurance contracts and for trade of securities or for savings, and other pay in the similar nature thereto, received by employees of an insurance company, an investment trader, investment broker, etc. under the Financial Investment Services and Capital Markets Act; |
| 5. | Meal allowance, housing allowance, clothing allowance, and other salaries similar thereto; |
| 6. | Benefits from housing provided by an employer; |
| 7. | Benefits which an employee gains by borrowing money necessary for purchasing or renting housing (including land attached thereto) at low interest or without compensation; |
| 8. | Technology allowance, health allowance, research allowance, and other wages of a similar nature; |
| 9. | Overtime allowance, commuting allowance, perfect attendance allowance, special bonus, and other wages of a similar nature; |
| 10. | Monthly or yearly wages paid in terms of travel expenses; |
| 11. | Allowance for service in an isolated area, allowance for service abroad, and other wages of a similar nature; |
| 12. | Insurance premiums, trust installments, or mutual aid installments imposed on an employer in connection with the insurance, trust, or mutual aid whose contractor is an employee or whose beneficiary is an employee, his or her spouse, or any other family member: |
| a. | Deleted; <Dec. 29, 2000> |
| b. | Deleted; <Feb. 17, 2021> |
| c. | Deleted; <Feb. 15, 2013> |
| d. | Deleted; <Feb. 15, 2013> |
| e. | Deleted; <Feb. 17, 2021> |
| f. | Deleted; <Feb. 4, 2009> |
| 13. | Retirement payment to be received, without being included to the deficit, pursuant to Article 44(4) of the Enforcement Decree of the Corporate Tax Act; |
| 14. | Vacation bonus and other wages similar thereto; |
| 15. | Deleted; <Feb. 15, 2013> |
| 16. | Refund of the group refund-cum-guaranty insurance to be reverted to employees before the maturity of contract period or at maturity; |
| 17. | Profits gained by executive officers, etc. of a corporation by exercising, during the period of service with the relevant corporation, stock options granted by the relevant corporation or a corporation having a special relationship with such corporation under Article 2(8) of the Enforcement Decree of the Corporate Tax Act (hereafter referred to in this subparagraph as the "relevant corporation, etc.") (referring to the difference between the market price at the time of exercise of the stock options and the actual purchase price, and "stocks" include preemptive rights to new stocks); |
| 18. | Deleted; <Feb. 22, 2008> |
| 19. | Rank allowances paid to public officials under the Regulations on Allowances, etc. for Public Officials, the Regulations on Allowances, etc. for Local Public Officials, the Enforcement Decree of the Remuneration of Prosecutors Act, the Supreme Court Regulations, the Constitutional Court Regulations, etc.; |
| 20. | Prize money and supplementary prizes received by a public official from the State or local governments in connection with the performance of his or her duties. |
| (2) | In applying paragraph (1), no wage reserved for paying retirement benefits (limited to where a worker has no option to determine the amount to be reserved and a portion of wages is reserved by the method prescribed by Decree of the Ministry of Finance and Economy), shall be included in wage and salary income. <Amended on Feb. 15, 2013; Feb. 3, 2015> |
| (3) | The methods of providing goods or services to executive officers, etc. at a price lower than the market value or supporting their purchase thereof pursuant to Article 20(1)6 of the Act shall be limited to any of the following methods: <Added on Feb. 28, 2025> |
| 1. | A method of selling or providing goods or services produced or supplied by a business entity or a corporation (hereafter referred to as "its own products, etc." in this Article) to executive officers, etc. at a price lower than the market value; |
| 2. | A method by which a business entity or a corporation pays subsidies to executive officers, etc. for use in purchasing or receiving its own products, etc.; |
| 3. | A method by which a business entity or a corporation pays subsidies to executive officers, etc. for use in purchasing or receiving goods or services produced or supplied by its affiliated company (referring to an affiliated company under the Monopoly Regulation and Fair Trade Act; hereafter the same shall apply in this paragraph) (hereafter referred to as "products, etc. of an affiliated company" in this Article); |
| 4. | A method by which a business entity or an affiliated company of a corporation sells or provides products, etc. of the affiliated company to executive officers, etc. of the business entity or corporation at a price lower than the market price, and the business entity or corporation pays such affiliated company the difference between the sale or provision price and the market price. |
| (4) | The market value under Article 20(1)6 of the Act shall be the market value under Article 52(2) of the Corporate Tax Act; provided, where any of the following applies, the price paid by executive officers, etc. in purchasing or receiving the relevant goods or services shall be deemed the market value: <Added on Feb. 28, 2025> |
| 1. | Where the goods cannot be sold to persons other than executive officers, etc. due to damage or deterioration of the goods; |
| 2. | Where it is markedly difficult to sell or provide goods or services, such as boarding tickets or accommodation vouchers, to persons other than executive officers, etc. because the time limit for use of such goods or services is imminent. |
| Article 39 Deleted. <Feb. 18, 2010> |
| Article 40 (Calculation of public pension income) |
| (1) | Public pension income under Article 20-3(1)1 of the Act (hereinafter referred to as "public pension income") shall be the amount, with respect to public pension income received during the taxable period concerned, calculated for each public pension payer in accordance with the following formula (hereafter referred to as "tax base amount" in this Article) based on January 1, 2002, as a base date (hereafter referred to as "tax base date" in this Article and Article 42-2(1)): |
| 1. | Out of public pension income, the pension income under the National Pension Act and the linked old-age pension under the Act on Aggregation of National Pension and Occupational Pensions: Amount of Pension Received during Taxable Period × Aggregate of Converted Income in Taxable Period after Tax Base Date / Aggregate of Converted Income during the Total Period of Payment |
┌──────────────────────┐
│ Amount of pension received during taxable period × │
│ Aggregate of converted income in taxable period │
│ after tax base date │
│ │
│ Aggregate of converted income │
│ during the total period of payment │
└──────────────────────┘
| 2. | Other public pension income: Amount of Pension Received during Taxable Period × Number of months in which contributions are made after Tax Base Date / Number of months in which contributions are made |
┌───────────────────┐
│ Amount of Pension Received during Taxable Period × │
│ Number of months in which contributions are made after Tax Base Date │
│ ───────────│
│ Total number of months of contributions paid) │
└───────────────────┘
| (2) | Where the lump sum allowance specified in Article 22(1)1 of the Act (limited to where the retirement income tax has been levied on the income or where the income is non-taxable) is returned and the employment periods, service periods, or subscription periods are aggregated in accordance with public pension-related Acts specified in subparagraph 4a of Article 12 of the Act (hereinafter referred to as "public pension-related Acts"), the date of re-appointment or re-subscription shall be deemed the tax base date for the purposes of the subparagraphs of paragraph (1). <Added on Feb. 21, 2014> |
| (3) | Notwithstanding paragraph (1), if any contribution or personal share (limited to the amount verified in accordance with Article 201-10; hereinafter referred to as "contribution, etc. exempt from taxation") paid without deducting the pension insurance premium under Article 51-3 of the Act on or after the tax base date (or the date of re-appointment or re-subscription, if the date of re-appointment or re-subscription is deemed the tax base date under paragraph (2) for calculation purposes) exists, the public pension income shall be determined by deducting the contribution, etc. exempt from taxation from the tax base amount. If the contribution, etc. exempt from taxation exceed the tax base amount for the pertinent taxable period, the excess shall be deducted from tax base amounts for subsequent taxable periods. <Amended on Feb. 21, 2014> |
| (4) | Where a person whose responsibility is to pay public pension income is late in paying all or part of the pension income, along with the interest incurred due to the delayed payment, the interest concerned shall be deemed the public pension income. |
| (5) | "Converted income" in the calculation formula under paragraph (1)1 means the amount that standard monthly income per annum during a participation period under Article 51(1)2 of the National Pension Act is converted into the current value of the year preceding the commencement of pension payments by applying a revaluation rate by year as publicly announced by the Minister of Health and Welfare. |
[This Article Added on Feb. 15, 2013]
| Article 40-2 (Pension account) |
| (1) | "The account prescribed by Presidential Decree as an account opened under the title of "pension savings"" in the provisions, with the exception of the items, of Article 20-3(1)2 of the Act, means the account specified in subparagraph 1, while "the account prescribed by Presidential Decree as an account opened in order to receive retirement pensions" means the account specified in subparagraph 2: <Amended on Feb. 3, 2015; Feb. 15, 2022> |
| 1. | An account opened under the title of "pension savings" pursuant to an agreement concluded with any of the following financial companies, etc. (hereinafter referred to as "pension savings account"): |
| a. | A trust agreement to be concluded with a trust business entity authorized pursuant to Article 12 of the Financial Investment Services and Capital Markets Act; |
| b. | An agreement for intermediating collective investment securities to be concluded with an investment broker authorized pursuant to Article 12 of the Financial Investment Services and Capital Markets Act; |
| c. | An insurance agreement to be concluded with an institution which handles insurance agreements pursuant to Article 25(2); |
| 2. | Any of the following accounts to be subscribed to and established in order to receive retirement pension (hereinafter referred to as "retirement pension account"): |
| a. | An account to be established in accordance with a defined contribution retirement pension defined in subparagraph 9 of Article 2 of the Act on the Guarantee of Workers' Retirement Benefits; |
| b. | An account to be established in accordance with an individual retirement pension defined in subparagraph 10 of Article 2 of the Act on the Guarantee of Workers' Retirement Benefits; |
| c. | An account to be established in accordance with a SME retirement pension fund plan defined in the Act on the Guarantee of Employees’ Retirement Benefits; |
| d. | An account to be established in order to receive the retirement pension payment pursuant to Article 16(1) of the Korea Scientists and Engineers Mutual Aid Association Act. |
| (2) | Where a holder of a pension account fulfills the following requirements, pension insurance premiums under Article 59-3(1) of the Act (including amounts deemed paid into the pension account under Article 118-3; hereinafter referred to as "pension insurance premiums") shall be deemed pension insurance premiums: <Amended on Feb. 21, 2014; Feb. 3, 2015; Feb. 12, 2019; Feb. 11, 2020; Feb. 28, 2023; Feb. 28, 2025; Jun. 30, 2025> |
| 1. | An amount not exceeding the sum of the following amounts (the aggregate cumulative amount paid into pension accounts pursuant to items c and d shall not exceed 100 million won) shall be paid into the pension account (where there are two or more pension accounts, referring to the aggregate amount thereof); in such cases, pension insurance premiums for taxable periods preceding the relevant taxable period may not be paid, yet, in cases of an insurance contract, pension insurance premiums for the intervening period may be paid before the lapse of 3 years and 2 months from the last day of the month to which the final payment date belongs: |
| a. | 18 million won each year; |
| b. | Transferred amount under Article 59-3(3) of the Act [referring to the amount paid into a pension account from an individual savings account up to the balance as of the expiration date of the contract of an individual savings account under Article 91-18 of the Act on Restriction on Special Cases concerning Taxation (hereinafter referred to as an "individual savings account"); provided, where the payment has been made between the immediately preceding taxable period and the relevant taxable period, referring to the amount paid into a pension account from an individual savings account up to the amount calculated by subtracting the amount paid in the immediately preceding taxable period from the balance as of the expiration date of the contract of an individual savings account]; |
| c. | An amount paid into a pension account by a resident who transfers housing owned in the Republic of Korea (hereafter referred to as "pension housing" in this Article) and acquires or does not acquire another housing in substitution therefor (hereafter referred to as "replacement housing" in this Article; including cases where the spouse of the resident who transfers the pension housing acquires such housing; hereafter the same shall apply in this item), where such resident satisfies all of the following requirements, out of the amount calculated by subtracting the acquisition value of the replacement housing (or zero, if no such housing is acquired) from the transfer value of the pension housing (where such amount is less than zero, it shall be zero; hereafter referred to as the "housing difference" in this Article): |
1) The resident or his or her spouse shall be at least 60 years old as of the transfer date of pension housing;
2) When combining houses that the resident and his or her spouse own in the Republic of Korea as of the transfer date of pension housing, they shall own one pension housing only; provided, where they acquire the replacement housing before transferring the pension housing and transfer the pension housing within six months from the date the replacement housing was acquired, they shall be deemed to own one pension housing only as of the transfer date of the pension housing;
3) The assessed value of the pension housing under Article 99 of the Act shall not exceed 1.2 billion won as of the transfer date of the pension housing;
4) The acquisition value of the replacement housing shall not exceed the transferred value of the pension housing (limited to cases where the replacement housing is acquired)
5) The resident shall pay the housing difference into the pension account of the owner of the pension housing within six months from the transfer date of the pension housing;
| d. | An amount paid into a pension account by a resident who has transferred land or a building owned in the Republic of Korea (hereafter in this Article referred to as "real estate for pension purposes") and satisfies all of the following requirements, out of the amount calculated by subtracting the acquisition value of such real estate for pension purposes from the transfer value of such real estate for pension purposes (where such amount is less than zero, it shall be zero; hereafter in this Article referred to as the "transfer difference of real estate for pension purposes"): |
1) As of the date of transfer of the real estate for pension purposes, the resident shall be a recipient of the basic pension under subparagraph 3 of Article 2 of the Basic Pension Act;
2) As of the date of transfer of the real estate for pension purposes, the resident and his or her spouse shall be members of a household owning one house or no house;
3) As of the date of transfer of the real estate for pension purposes, the holding period of such real estate for pension purposes shall be at least 10 years;
4) The transfer difference of real estate for pension purposes shall be paid into the pension account of the owner of such real estate for pension purposes within 6 months from the date of transfer thereof;
| 2. | The holder shall not pay the pension insurance premium after the date he or she applies for the initiation of pension payment (referring to the agreed date of initiation, if there is the agreed date of initiation of pension payment). |
| (3) | "Withdrawn in the form of the pension, etc. prescribed by Presidential Decree" in the main sentence of Article 20-3(1)2 of the Act, means where a withdrawal from a pension account meets all the following requirements or is made in accordance with Article 20-2(1) (hereinafter referred to as "receipt of pension"; any withdrawal other than the receipt of pension shall be referred to as "non-pension withdrawal"); provided, where retirement income under Article 20-3(1)2a of the Act is withdrawn by reason of emigration under Article 20-2(1)1b, the relevant retirement income shall be deemed the receipt of pension only where the withdrawer emigrates not earlier than three years after the date the retirement income is deposited in the pension account: <Amended on Feb. 21, 2014; Feb. 3, 2015; Feb. 3, 2017> |
| 1. | A holder must, after he or she reaches 55 years of age, file his or her application with the person in charge of the pension account for initiation of pension payment and then withdraw the pension money; |
| 2. | A holder must withdraw pension money after five years from the date of his or her subscription to the pension account; provided, this shall not apply where the amount of money pursuant to Article 20-3(1)2a of the Act (including where a retirement income is withdrawn directly from the pension account; hereinafter referred to as "deferred retirement income") is in the pension account; |
| 3. | A holder shall withdraw pension money within the limit of the amount computed by the following formula (hereinafter referred to as "limit of pension payment") as at the date of initiation of the taxable period (or the filing date of the application for the initiation of pension payment in the case of the taxable period in which the application for the initiation of pension payment is filed). In such cases, an amount withdrawn in accordance with Article 20-2(1) shall not be included in the withdrawn amount: |
┌───────────────┐
│ Appraised value of pension account │
│ amount × 0.55 │
│ │
│ (11 - Number of years of pension payment) │
│× 120 / 100 │
└───────────────┘
| (4) | "Number of years of receiving pension" in the calculation formula under paragraph (3)3 means the number of years aggregated from the taxable period to which the date of first pension payment belongs, and the calculation formula shall not apply where the number of years of receiving pension is at least 11 years; provided, in any of the following cases, the year of initial pension payment shall be as follows: |
| 1. | In cases of a pension account to which a person subscribed before March 1, 2013 (including where a person who has subscribed to the defined payment retirement pension (hereinafter referred to as "defined payment retirement pension") before March 1, 2013, in accordance with subparagraph 8 of Article 2 of the Act on the Guarantee of Workers' Retirement Benefits, retires and the entire amount of the retirement income is transferred to the newly established pension account): Sixth year; |
| 2. | In cases of succeeding to a pension account pursuant to Article 44(2) of the Act: The number of years of receiving pension by an inheritee as at the date of his or her death. |
| (5) | The amount withdrawn from a pension account which exceeds the limit of pension payment shall be deemed non-pension withdrawal. |
| (6) | Upon receipt of an application for initiating pension payment or for terminating a pension account from the holder of the pension account, the administrator of the pension account shall submit a statement of the initiation of pension payment or of the termination of the pension account in the form prescribed by Decree of the Ministry of Finance and Economy to the head of the relevant tax office by the tenth day of the following month. <Amended on Feb. 3, 2015; Dec. 30, 2025> |
| (7) | Where a resident intends to pay the housing difference or the transfer difference of real estate for pension purposes (hereafter in this Article referred to as the "housing difference, etc.") into a pension account, he or she shall submit to the pension account administrator an application in the form prescribed by Decree of the Ministry of Finance and Economy, accompanied by the documents specified in each of the following subparagraphs: <Added on Feb. 28, 2023; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | A sales contract for pension housing or real estate for pension purposes; |
| 2. | A sales contract for replacement housing (limited to cases where such replacement housing has been purchased); |
| 3. | Other documents prescribed by Decree of the Ministry of Finance and Economy. |
| (8) | Where a resident falls under any of the following cases after paying the housing differences into a pension account, the total amount paid into the pension account from the payment date shall not be deemed pension insurance premiums: <Added on Feb. 28, 2023; Feb. 28, 2025; Jun. 30, 2025> |
| 1. | Where it is confirmed, at the time the housing difference, etc. is paid into the pension account, that the requirements under paragraph (2)1c or d were not satisfied; |
| 2. | Where, within 5 years from the date on which the housing difference is paid into the pension account, the resident or his or her spouse newly acquires a house, and the amount calculated by subtracting the acquisition value of the newly acquired house from the transfer value of the pension housing is less than the amount paid into the pension account. |
| (9) | The Commissioner of the National Tax Service shall verify whether a resident who has paid the housing differences, etc. into a pension account falls under any of the subparagraphs of paragraph (8), and, if any such person exists, shall notify the relevant pension account administrator thereof by the end of February each year, and the pension account administrator shall notify the relevant resident thereof. <Added on Feb. 28, 2023; Feb. 28, 2025> |
| (10) | Where a pension account administrator receives a notice under paragraph (9), it shall return to the resident the amounts paid into the pension account as housing differences, etc. that are not deemed pension insurance premiums under paragraph (8), and the amounts increased based on the investment performance thereof. In such cases, the resident shall be deemed to have received such returned amounts as non-pension withdrawals. <Amended on Feb. 29, 2024; Feb. 28, 2025> |
| (11) | Where two or more residents jointly own one house, paragraph (2)1c,d and paragraphs (7) through (10) shall apply as if each of them owned one house in proportion to his or her ownership share; provided, where a resident and his or her spouse jointly own one house, paragraph (2)1c2) and d2) of that subparagraph shall apply as if they jointly owned one house. <Added on Feb. 28, 2023; Feb. 28, 2025> |
| (12) | In applying paragraph (11), the standard market value under paragraph (2)1c3) shall mean the standard market value of the entire house, notwithstanding the ownership share in such house, and where an ownership share in a house is transferred or acquired, the transfer value and acquisition value under paragraph (2)1c4) and paragraph (8)2 shall be the values based on the entire house, calculated as prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 28, 2023; June 30, 2025; Dec. 30, 2025> |
[This Article Added on Feb. 15, 2013]
| Article 40-3 (Order of withdrawal from pension account) |
| (1) | Where an amount of money is withdrawn partially from a pension account, the following amounts shall be deemed withdrawn in the following order: <Amended on Feb. 21, 2014> |
| 1. | An amount not falling under any item of Article 20-3(1)2 of the Act (hereinafter referred to as "tax-exempted amount"); |
| 2. | Deferred retirement income; |
| 3. | Amounts specified in Article 20-3(1)2b through d of the Act. |
| (2) | A tax-exempted amount shall be deemed withdrawn in accordance with the following order; provided, subparagraph 4 shall be applicable only to the amount confirmed pursuant to Article 201-10, and the amount so confirmed shall be deemed the tax-exempted amount from the date of confirmation: <Amended on Feb. 21, 2014; Feb. 15, 2022> |
| 1. | Pension insurance premium paid to the relevant pension account during the taxable period to which the date of withdrawal belongs (excluding the amount falling under subparagraph 2); |
| 2. | Transferred amount under Article 59-3(3) of the Act that are paid to the relevant account during the taxable period to which the date of withdrawal belongs; |
| 3. | An amount exceeding the maximum tax credit for pension accounts defined in the proviso to Article 59-3(1) of the Act (hereafter referred to as "maximum tax credit for pension accounts" in this Article), of the pension insurance premiums paid in the relevant pension account, when it is supposed that only the pension account exists; |
| 4. | An amount to which no tax credit for a pension account has been applied, of the pension insurance premiums paid to the pension account, except those referred to in subparagraphs 1 through 3. |
| (3) | Where the amount withdrawn from a pension account exceeds the limit of pension payment, it shall be deemed that the portion for pension payment be withdrawn first and then the remainder be withdrawn as the non-pension withdrawal. |
| (4) | A pension insurance premium that does not exceed the maximum tax credit for pension accounts, of the pension insurance premiums paid to the pension account, shall be deemed an amount after tax credit under Article 20-3(1)2b of the Act is applied, of the amounts referred to in paragraph (1)3, from the beginning of the taxable period immediately following the taxable period in which the premium was paid (or the filing date of an application for the initiation of pension payment, if the application for the initiation of pension payment was filed during the taxable period in which the premium was paid). <Added on Feb. 21, 2014> |
| (5) | If the amount in a pension account falls short of principal as a result of the management of the pension account, the amount left over in the pension account shall be determined by subtracting withdrawals from the principal in the order reverse of the order of withdrawal under paragraph (1). <Added on Feb. 3, 2015> |
[This Article Wholly Amended Feb. 15, 2013]
| Article 40-4 (Transferring money into pension account) |
| (1) | Where the amount deposited in a pension account is transferred, before initiation of its pension payment, to another pension account, the transfer shall not be deemed withdrawal; provided, this shall not apply in any of the following cases: <Amended onFeb. 17, 2016> |
| 1. | Where money is transferred between a pension savings account and a retirement pension account; |
| 2. | Where money deposited in the pension account subscribed after March 1, 2013, is transferred to the pension account subscribed before March 1, 2013; |
| 3. | Where part of the amount of money deposited in a retirement pension account is transferred. |
| (2) | Notwithstanding the proviso to paragraph (1) and subparagraph 1 of the same paragraph, any of the following cases shall not be deemed withdrawal: <Added on Feb. 17, 2016> |
| 1. | Where the holder of a pension savings account, who meets the requirements under Article 40-2(3)1 and 2, transfers the full amount to the retirement pension account under Article 40-2(1)2b (including where the receipt of pension has been initiated); |
| 2. | Where the holder of a retirement pension account, who meets the requirements under Article 40-2(3)1 and 2, transfers the full amount to the pension savings account (including where the receipt of pension has been initiated). |
| (3) | Where the partial amount of money is transferred upon applying paragraph (1) (excluding cases falling under paragraph (1)3), the transferring shall be deemed made in accordance with the order in each subparagraph of Article 40-3(1). |
| (4) | In applying paragraph (1) or (2), this Decree shall apply to the date of subscription to a pension account, based on the transferred pension account; provided, it may be based on the pension account opened before the transfer, if a new pension account is established and the full amount is transferred to the new account. <Amended on Feb. 17, 2016> |
| (5) | Where a pension account administrator is replaced due to transfer of the pension account, the transferring pension account administrator shall notify the transferred pension account administrator with the detailed statement of transferred pension account prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 17, 2016; Dec. 30, 2025> |
[This Article Added on Feb. 15, 2013]
| Article 41 (Scope of other income) |
| (1) | "Money and other valuables received by a person, other than an author, stage performer, sound record producer, or broadcasting business operator, in consideration of transfer or use of copyrights or neighboring rights" in Article 21(1)5 of the Act, means considerations received by a person, to whom copyrights or neighboring rights under the Copyright Act has been inherited, donated, or transferred, by transferring or lending such copyrights or neighboring rights to another person. <Amended on Feb. 19, 2005> |
| (2) | "Trademark rights" in Article 21(1)7 of the Act means rights to trademarks under the Trademark Act, service marks, collective marks, geographical indications, homonymous geographical indication, collective marks with geographical indication, registered trademarks, and business marks. <Added on Feb. 28, 2007> |
| (3) | Goodwill under Article 21(1)7 of the Act shall include economic interest acquired as a consequence of obtaining authorization, permission, license, etc. from an administrative authority; but shall not include goodwill transferred along with assets falling under Article 94(1)1 and 2 of the Act. <Added on Feb. 28, 2007; Feb. 11, 2020> |
| (4) | "Rights to lease a store prescribed by Presidential Decree" in Article 21(1)7 of the Act, means economic interest (including other goodwill transferred along with the right to lease the store) acquired by a resident as a consequence of transferring his or her status as a lessee of a store from which he or she has earned business income (excluding business income further specified by Decree of the Ministry of Finance and Economy). <Added on Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| (5) | Rights incidental to permission for collecting earth, sand, and rocks under Article 21(1)7 of the Act shall include rights incidental to permission for collecting earth, sand, and rocks, which are transferred along with a parcel of land under Article 94(1)1 of the Act. <Added on Feb. 28, 2007> |
| (6) | Rights to develop and use ground water under Article 21(1)7 of the Act shall include rights to develop and use ground water, which are transferred along with a parcel of land, etc. under Article 94(1)1 of the Act. <Added on Feb. 28, 2007> |
| (7) | "Scale prescribed by Presidential Decree" in Article 21(1)8-2 of the Act means five million won of annual income amount. <Added on Feb. 12, 2019> |
| (8) | "Penalty or indemnity" in Article 21(1)10 of the Act, means the value of money or other articles compensated for damage exceeding damages on payment itself which constitutes the original contract regardless of whatever its name may be, as compensation for damage (including compensation for damage received because payment of insurance money is delayed despite that a reason to pay insurance money has arisen) received due to the breach or the cancellation of a contract for property rights. In such cases, where the value of money, etc. received due to the breach or the cancellation of a contract does not exceed the gross amount paid originally according to a contract, it shall not be deemed the value of money, etc. exceeding damages on payment itself. <Amended on Feb. 18, 2010; Feb. 12, 2019> |
| (9) | "Related person prescribed by Presidential Decree" in Article 21(1)13 of the Act, means any of the following related persons: <Added on Feb. 28, 2007; Feb. 18, 2010; Feb. 2, 2012; Feb. 12, 2019; Feb. 17, 2021; Feb. 28, 2025> |
| 1. | A related person under Article 98(1) with whom the relevant resident is related; |
| 2. | A related person under Article 2(2) of the Enforcement Decree of the Adjustment of International Taxes Act with whom the relevant nonresident is related; |
| 3. | A related person under Article 2(8) of the Enforcement Decree of the Corporate Tax Act with whom the relevant corporation is related. |
| (10) | Economic profits under Article 21(1)13 of the Act shall be any of the following profits: <Amended on Dec. 30, 2010; Feb. 12, 2019> |
| 1. | Profits an individual person receives by using the property at low consideration or free of charge, which is a source of income, to be provided as a corporation's property or for private business (hereinafter referred to as "property for business"), such as royalty to be normally paid for the use of such property or other consideration for use (where a payment is made at a price below the amount normally paid, referring to the amount less such payment), except for dividends and bonuses disposed of when a corporation files a return on its income under the Corporate Tax Act or the head of the competent tax office determines or reassesses the corporation's income; |
| 2. | Pay received, in violation of Article 24(2) and (4) of the Trade Union and Labor Relations Adjustment Act. |
| (11) | Deleted. <Feb. 17, 2016> |
| (12) | "Lump sum allowance received for the cancellation of an account of mutual aid fund for small corporations or small enterprises prescribed by Presidential Decree" in Article 21(1)18 of the Act, means other income defined in Article 86-3(4) of the Restriction of Special Taxation Act. <Added on Feb. 18, 2010; Feb. 12, 2019> |
| (13) | In cases of services rendered under Article 21(1)19c of the Act, where research management expenses are managed in accordance with the relevant university's own rules, research services performed by a professor shall be included. <Added on Dec. 30, 2010; Feb. 12, 2019> |
| (14) | "Paintings, calligraphic works, and antiques prescribed by Presidential Decree" in Article 21(2) of the Act, means the following works, where the value of transfer is at least 60 million won per piece, item, or pair (referring to goods normally traded in pairs as those that at least two are used together); provided, works of an artist alive in the Republic of Korea on the date of transfer shall be excluded: <Added on Feb. 4, 2009; Feb. 18, 2010; Feb. 12, 2019; Feb. 17, 2021; Dec. 30, 2025> |
| 1. | Any of the following paintings, calligraphic works, and antiques: |
| a. | Pictures, drawings, pastels (limited to those drawn by hand, excluding drafts and processed goods with decoration), collage, and decorated board similar thereto; |
| b. | Original engravings, prints, and lithographs; |
| c. | Antiques (limited to those over 100 years after manufacturing); |
| 2. | Works prescribed by Decree of the Ministry of Finance and Economy after the Minister of Finance and Economy has consulted with the Minister of Culture, Sports and Tourism as paintings and calligraphic works, and curios which have historic and artistic value other than paintings, calligraphic works, and antiques specified in subparagraph 1. |
| (15) | "Religious organizations prescribed by Presidential Decree" in Article 21(1)26 of the Act, means any of the following organizations established for the purpose of propagating or promoting a religion (including its affiliates), to which the relevant religion-related worker belongs, (hereinafter referred to as "religious organization"): <Amended on Dec. 29, 2017; Feb. 12, 2019> |
| 1. | A nonprofit corporation incorporated pursuant to Article 32 of the Civil Act; |
| 2. | An organization regarded as a corporation under Article 13 of the Framework Act on National Taxes; |
| 3. | An association or foundation other than a juristic person to which a registration number for registration of real estate is assigned pursuant to Article 49(1)3 of the Registration of Real Estate Act. |
| (16) | A religious organization shall keep and manage records of the amount of money paid and goods supplied to its religion-related workers (including money and goods specified in subparagraphs 3 and 5 h of Article 12 of the Act; hereinafter the same shall apply) by separating them from expenses disbursed in connection with other religious activities. <Added on Dec. 29, 2017; Feb. 12, 2019> |
| (17) | The income under Article 21(1)26 of the Act shall include the income that a religion-related worker receives on a regular or irregular basis from a religious organization in connection with his or her activities after practical retirement, in addition to the income that he or she receives from a religious organization for his or her practical retirement under Article 42-2(4)4. <Added on Feb. 17, 2016; Feb. 12, 2019> |
| (18) | "Cases prescribed by Presidential Decree, such as those having a business place" in Article 21(2) of the Act means any of the following cases: <Added on Feb. 17, 2021> |
| 1. | Where physical facilities (including virtual business place established for trading calligraphic works or antiques using information communication networks, such as the Internet), including a business place for trading calligraphic works or antiques, are established; |
| 2. | Where business registration is made for the purpose of trading calligraphic works or antiques. |
[Title Amended on Feb. 28, 2007]
| Article 42 Deleted. <Feb. 3, 2015> |
| Article 42-2 (Scope of retirement income) |
| (1) | The lump sum amount under Article 22(1)1 of the Act means any of the following amounts (hereafter referred to as "tax base amount" in this Article): <Amended on Feb. 21, 2014> |
| 1. | Either of the following amounts payable as the lump sum refund under the National Pension Act or the Act on Aggregation of National Pension and Occupational Pensions, whichever is smaller: |
| a. | The sum of contributions or personal shares (including employer charges; hereafter the same shall apply in this paragraph) paid on or after the tax base date and the interest and additional interest thereon; |
| b. | An amount computed by subtracting the contributions or personal shares paid on or before the tax base date from the lump sum actually paid; |
| 2. | An amount computed by the following formula in cases of a lump sum allowance other than those specified in subparagraph 1: Lump sum received during the pertinent taxable period x (Number of months of contributions paid on or after the tax base date / Total number of months of contributions paid) |
┌───────────────────────┐
│ Lump sum received during the pertinent taxable period x │
│ (Number of months of contributions paid on or after the tax base date │
│ ──────────────│
│ Total number of months of contributions paid) │
└───────────────────────┘
| (2) | When employment periods, service periods, or subscription periods are aggregated in accordance with Article 40(2), the date of re-appointment or re-subscription shall be deemed the tax base date for the purpose of applying paragraph (1). <Added on Feb. 21, 2014> |
| (3) | Notwithstanding paragraph (1), if tax-exempt contributions, etc. exist, the lump sum allowance under Article 22(1)1 of the Act shall be determined by subtracting the tax-exempt contributions, etc. from the tax base amount. <Added on Feb. 21, 2014> |
| (4) | "Income prescribed by Presidential Decree" in Article 22(1)3 of the Act, means any of the following amounts: <Amended on Feb. 17, 2016> |
| 1. | Where a person who pays the income under Article 22(1)1 of the Act pays in delay, while paying interest for the delayed payment, entire or part of a retirement income, the interest concerned; |
| 2. | An amount of incentive for development of science and technology to be received pursuant to Article 16(1)3 of the Korea Scientists and Engineers Mutual-Aid Association Act; |
| 3. | A mutual aid money to be received pursuant to Article 14 of the Act on the Employment Improvement of Construction Workers; |
| 4. | Income that a religion-related worker receives from a religious organization for practical retirement. |
| (5) | "Executives prescribed by Presidential Decree" in the proviso to Article 22(3), with the exception of its calculation formula, of the Act means persons engaged in any affair under the subparagraphs of Article 40(1) of the Enforcement Decree of the Corporate Tax. <Amended on Feb. 21, 2014; Feb. 13, 2018; Feb. 12, 2019> |
| (6) | "Amount of retirement income prescribed by Presidential Decree, if the executive is entitled to receiving the retirement income, supposing that the executive retired on December 31, 2011" in the proviso to Article 22(3) of the Act, means the amount computed by multiplying the amount of retirement income by the ratio of the period of service until December 31, 2011 (to be calculated by the number of months; any period of less than one month shall be deemed one month) to the entire period of service (or the amount of retirement income where an executive of a corporation, which has the articles of incorporation or regulations on the payment of retirement benefits, as delegated by the articles of incorporation, as at December 31, 2011, selects to apply the amount of retirement income to which he or she is entitled under the relevant provisions, if he or she is supposed to retire on December 31, 2011). <Added on Feb. 3, 2015> |
| (7) | The gross pay under Article 22(4)2 of the Act shall include pays paid abroad while dispatched to an overseas corporation during the employment period; provided, the amount paid in excess of the amount to be paid in the Republic of Korea if the relevant executive works in the Republic of Korea, such as housing benefits, allowances for educational expenses, special area service allowances, medical insurance premiums, expenditures for overseas stays, car rental fees, actual medical expenses and other similar pays, shall be excluded herefrom. <Added on Feb. 11, 2020> |
[This Article Wholly Amended Feb. 15, 2013]
| Article 43 (Special cases concerning determination of retirement) |
| (1) | If a person has not received retirement benefits, although any of the following events occurred, the person may be deemed to have not retired in applying Article 22(1)2 of the Act: <Amended on Feb. 3, 2015; Feb. 11, 2020> |
| 1. | Where an employee becomes an executive; |
| 2. | Where there occurs a change in organizational structure, such as merger or division, a business transfer, a transfer to a corporation having a direct or indirect investment relationship, or a transfer to another place of business of the same business operator; |
| 3. | Where a standing executive of a corporation becomes a non-standing executive; |
| 4. | Where a non-regular worker (referring to fixed-term or part-time employees defined in the Act on the Protection of Fixed-term or Part-time Employees) is converted into a regular worker (referring to an employee entered into a labor contract in accordance with the Labor Standards Act, who is not non-regular worker). |
| (2) | Where a person has received his or her retirement payment in advance during the period of continuous employment on any of the following grounds (including income earners who are directors; hereinafter referred to as "interim payment of retirement income"), the person shall be deemed to have retired as of the date he or she received such retirement payment: |
| 1. | Cases falling under Article 3(1) of the Enforcement Decree of the Act on the Guarantee of Workers' Retirement Benefits; |
| 2. | Deleted; <Feb. 3, 2015> |
| 3. | Where a retirement pension system is abolished pursuant to Article 38 of the Act on the Guarantee of Workers' Retirement Benefits. |
[This Article Wholly Amended Feb. 15, 2013]
| Article 44 Deleted. <Feb. 28, 2007> |
SECTION 3 Date of Receipt of Total Amount of Income
| Article 45 (Date of receipt of interest income) |
The date of receipt of interest income shall be any of the following dates: <Amended on Dec. 30, 1995; Dec. 31, 1996; Dec. 31, 1997; Dec. 31, 1998; Dec. 31, 2001; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012; Feb. 15, 2013; Feb. 3, 2015; Feb. 17, 2021>
| 1. | Interest and discounted value under Article 16(1)12 and 13 of the Act: |
The date of redemption under agreement; provided, when redemption is made before the date of maturity, such date of redemption;
| 2. | Interest and discounted value of the bearer public bonds, etc. under Article 46(1) of the Act: |
The date the payment is received.
| 3. | Interest and discounted value of the non-bearer public bonds under Article 46(1) of the Act: |
The date of payment under the agreement;
| 3-2. | Deleted; <Dec. 31, 2024> |
| 4. | Interest on an ordinary deposit, a fixed deposit, and an installment savings or an installment: |
| a. | The actual date of receipt of the interest payment; |
| b. | As for interest under a special contract for transferring it to the principal, the date of transfer to the principal under such special contract; |
| c. | The termination day, where the interest is paid due to the termination of the accounts; |
| d. | The date of extension, where the contract period is extended; |
| e. | As for the interest of a fixed deposit in cases of a fixed installment savings connected to fixed deposit, the date a fixed deposit or a fixed installment savings is terminated or a deposit period of a fixed installment savings matures; |
| 5. | Interest on the deposit at notice: |
The date of withdrawal;
| 6. | Deleted; <Feb. 28, 2007> |
| 7. | Marginal profits on the sale and purchase of bonds or securities under the condition of redemption: |
The date of redemptive purchase or sale of the relevant bonds or securities under the agreement; provided, where they are redeemably purchased or sold before their due date, the date of such redemptive purchase or sale shall be applied;
| 8. | Marginal insurance profits of the savings insurance: |
The date of payment of the insurance money or the refund money; provided, where the insurance is terminated before its maturity, its termination date shall be applied;
| 9. | Refund of the excess by a workplace mutual-aid association: The date of payment of the gain exceeding the payments under the agreement and the gain additionally accruing from the repayment; provided, if the repayment is paid in installments, the date the gain exceeding the payments under a special agreement that such gain shall be transferred to the principal shall be deemed the date of payment of such gains; |
| 9-2. | Profits of non-business loans: |
The date of payment of the interest under the agreement; provided, where there is no agreement as to the interest payment date, or where the interest is paid before the date of payment under the agreement, or the interest excluded from the calculation of total amount of income pursuant to Article 51(7) is received, such interest payment days shall apply;
| 10. | Amounts equivalent to interest, etc. during the period of holding bonds, etc. under Article 193-2: |
The date of sale of the relevant bonds, etc. or the date of payment of the interest, etc.;
| 11. | Where the inherited property generating interest income under subparagraphs 1 through 10 is inherited or donated: |
The date of commencement of such inheritance or the date of such donation.
| Article 46 (Date of receipt of dividend income) |
The date of receipt of dividend income shall be any of the following dates: <Amended on Dec. 31, 1996; Dec. 31, 1998; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012; Feb. 13, 2018; Feb. 17, 2021; Dec. 31, 2024; Feb. 28, 2025>
| 1. | Profits or dividends of bearer securities: |
The date the payment is received.
| 2. | Dividends derived from the disposal of surplus funds: |
The resolution date for the disposal of surplus funds at the relevant corporation;
| 3. | Deleted; <Feb. 15, 2013> |
| 3-2. | Dividends distributed to joint investment business operators under Article 17(1)8 of the Act: |
The last day of the taxable period;
| 3-3. | Dividend or dividend of gains under Article 17(1)9 and 10 of the Act: |
The date the payment is received.
| 4. | Deemed dividends under Article 17(2)1, 2, and 5 of the Act: |
The date on which the retirement of securities, the decrease of capital, or the capitalization is decided (referring to the date determined under Article 461(3) of the Commercial Act, if it depends on a resolution of the board of directors), or the date on which one leaves or secedes from the corporation;
| 5. | Deemed dividends under Article 17(2)3, 4, and 6 of the Act: |
| a. | The date on which the value of remaining property is assessed, in cases where a corporation extinguishes due to a dissolution; |
| b. | The date on which the merger registration is made, in cases where a corporation extinguishes due to a merger; |
| c. | The date on which the registration for division or for divided merger is made, in cases where a corporation extinguishes or survives as a result of the division or the divided merger; |
| 6. | Dividends distributed under the Corporate Tax Act: |
The date on which the accounts are settled for the relevant business year of the relevant corporation;
| 7. | Gains from a collective investment scheme: |
The date on which the earnings of the investment trust are distributed; provided, it shall be the date on which the distributed amount is transferred to the principal according to a special agreement in cases where there is a special agreement to transfer it to the principal;
| 8. | Profits from derivative-linked stocks or derivative-linked bonds: The date such profits are paid; provided, in case of a dividend with respect to which a special agreement to the effect of its inclusion into the principal is reached, the date of receipt of business income shall be the day it is included into the principle; |
| 9. | Gains from fractional investment products: The date on which such gains are paid. |
| Article 47 Deleted. <Feb. 18, 2010> |
| Article 48 (Date of receipt of business income) |
The date of receipt of business income shall be any of the following dates: <Amended on Dec. 31, 1997; Apr. 1, 1998; Dec. 31, 1998; Dec. 30, 2002; Dec. 30, 2003; Feb. 22, 2008; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Dec. 30, 2010; Feb. 17, 2016; Feb. 13, 2018; Dec. 30, 2025; Feb. 27, 2026>
| 1. | Sale of goods (excluding real estate in the case of building construction business and real estate development and supply business), products, or other manufactured items (hereafter referred to as "goods, etc."): The date on which such goods, etc. are delivered; provided, in the case of a return-conditional sale, consent-conditional sale, other conditional sale, or for a fixed-term sale, the date on which the relevant condition is fulfilled or the period elapses and the sale becomes final; |
| 2. | Approval sales of commodities, etc.: |
The date the other party expresses his or her intention to purchase; provided, where such sale is settled by special contract or custom, unless he or she returns the goods or expresses his or her intent of rejection within the specified period, it shall be the expiration date of such period;
| 3. | Consignment sale of commodities, etc.: |
The date the consignee sells the consigned goods;
| 4. | Sale of commodities, etc. under a long-term installment plan prescribed by Decree of the Ministry of Finance and Economy: |
The date the commodities, etc. are delivered; provided, during the taxable period whereto belongs the date of receipt or of agreeing to receive under such long-term installment plan, and where the amount of such receipt and the necessary costs corresponding thereto are appropriated, the date of receipt or agreed date of receipt under a long-term installment plan. In such cases, the amount received or receivable before the date of delivery shall be deemed to be received on the date of delivery, and where the business has been closed during a long-term installment period, the amount not included in the gross income amount as such date of business closure and the corresponding cost shall be included in the amount of gross income and necessary costs during the taxable period whereto belongs the date of business closure;
| 5. | Provision of construction, manufacturing, and other services (including contracted construction and reservation sale; hereafter referred to as "construction, etc." in this subparagraph): |
The date of completion of service (in cases of the delivery of an object, the date of such delivery); provided, if the contract period is at least one year, and it is determined by Decree of the Ministry of Finance and Economy, the work progress rate determined by Decree of the Ministry of Finance and Economy (hereinafter referred to as "work progress rate") shall be the standard, whereas if a contract period is less than one year, and it is determined by the Decree of the Ministry of Finance and Economy, the work progress rate may serve as a standard;
| 6. | Deleted; <Dec. 31, 1998> |
| 7. | Sale by vending machines: |
The time when the relevant business operator withdraws cash from the relevant vending machines;
| 8. | Supply of personal services: |
The date set to receive remuneration for services or the date the supply of services has been completed, whichever comes first; provided, an entertainer, professional athlete, etc. receive a lump-sum of remuneration for exclusive contract covering more than a one-year period, the amount obtained by dividing the remuneration concerned proportionally among the period of contract shall be the amount received at the end of each period of contract, and the number of months shall be counted according to the calendar, however, where a month to which the date of commencement of the term of the relevant contract belongs is less than one month, it shall be counted as one month, and where a month to which the expiration date of the term of the relevant contract belongs is less than one month, it shall not be included;
| 9. | Deleted; <Dec. 31, 1998> |
The maturity date of the bill; provided, where the bill is transferred before maturity, it shall be the date the bill is transferred;
| 10-2. | For the credit accruing from the transfer or sale of a property under a long-term installment plan pursuant to subparagraph 4, if appropriating the marginal gain on current value discount after evaluating in the current value according to business accounting standards, such marginal gain on current value discount shall not be included in the amount of gross income of the appropriated taxable period, and the amount returned or to be returned according to business accounting standards during the recovery period of relevant credit shall be included in the amount of gross income of each taxable period; |
| 10-3. | Interest and discounted value accruing from the finance and insurance business on the Korea Standard Industry Code: |
The date of actual receipt;
| 10-4. | Any of the following dates, where income accrues from the lease of an asset or the establishment of an easement or superficies thereon: |
| a. | Where the due date for payment is fixed by agreement or custom: |
The fixed date;
| b. | Where the due date for payment is not fixed by agreement or custom: |
The date the payment is received.
| c. | For the amount equivalent to a rent for the period already elapsed (including interest for late payment and other compensation for damage) to which the owner, etc. is entitled according to judgment, compromise, etc. on a lawsuit on a lease contract or the establishment of an easement or superficies (excluding lawsuits related to a claim of unpaid rental fees, or unpaid rewards for establishing an easement or superficies): |
The date judgment or compromise is made; provided, it shall be the date specified in item a in cases of an amount deposited in a court in order to pay a rent in connection with a lawsuit on a rent;
| 11. | Sale and purchase of assets which do not fall under subparagraphs 1 through 10 and 10-2 through 10-4: |
The date the purchase price is fully paid; provided, where a person makes entry or registration on transfer of ownership, etc. or uses and makes profits from the relevant property before the full payment of price, the date of such entry, registration or enrolling, or use and making profits.
| Article 49 (Date of receipt of wage and salary income) |
| (1) | The date of receipt of wage and salary income shall be any of the following dates: <Amended on Dec. 30, 1995; Feb. 18, 2010; Feb. 15, 2013> |
The date on which one's labor is provided;
| 2. | Bonuses derived from the disposal of surplus funds: |
The resolution date for the disposal of surplus funds at the relevant corporation;
| 3. | Bonuses for executives or stockholders, employees and other investors of a corporation, which have occurred when the amount of income in the relevant business year is reported by such corporation, or is determined or corrected by the head of a tax office: |
Days over which one's labor is provided during the relevant business year. In such cases, if days for which a monthly average amount is calculated spans two years, days over which labor is provided during the relevant business year respectively;
| 4. | Surplus amount under the proviso to the part other than the calculation formula in Article 22(3) of the Act: |
The date paid or to be paid.
| (2) | Where the salary is paid under a contract for work and other similar contracts, and where the relevant salary is not fixed before the commencement date of the final return period of tax base in the relevant taxable period, it shall be deemed received on the fixed date, notwithstanding the provisions of paragraph (1)1; provided, in cases of the actual receipt amount paid before such fixed date, such date of receipt shall be applied. |
| Article 50 (Date of receipt of other income) |
| (1) | The date of receipt of other income shall be any of the following dates: <Amended on Feb. 19, 2005; Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010; Feb. 2, 2012; Feb. 15, 2013> |
| 1. | Other income specified in Article 21(1)7 of the Act (excluding other income from leasing an asset or rights): |
The date payment is settled, the date the asset is delivered, the date the asset is utilized, or the date the asset makes a profit, whichever occurs first; provided, where the amount is not determined though the asset has been delivered, has been utilized, or has made profit before the payment is settled, it shall be the date of payment;
| 1-2. | Where the down payment replaces the penalty or indemnity money, among the income specified in Article 21(1)10 of the Act: |
The date a breach or rescission of the contract for other income is fixed;
| 2. | Other income specified in Article 21(1)20 of the Act: |
The date of the final settlement of accounts for the relevant business year of the corporation;
| 3. | Other income specified in Article 21(1)21 of the Act: |
The date of non-pension withdrawal;
| 4. | Other incomes in addition to the above: |
The date the payment is received.
| (2) | The retirement date shall be deemed the date of receipt of retirement income; provided, the date the retirement income is paid in cases of lump-sum allowances under the National Pension Act, out of those under Article 22(1)1 of the Act, and the retirement mutual-aid benefits under Article 42-2(4)3, shall be deemed the date of receipt of retirement income (or the date the first installment is paid, where such payments are paid in installments). <Amended on Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2015> |
| (3) | Deleted. <Feb. 28, 2007> |
| (4) | Deleted. <Feb. 28, 2007> |
| (5) | The date of receipt of pension income shall be determined as follows: <Amended Feb. 15, 2013; Feb. 21, 2014> |
| 1. | Public pension income: The date the pension is scheduled to be awarded pursuant to public pension-related Acts; |
| 2. | Pension income specified in Article 20-3(1)2 of the Act: The date of receipt of the pension; |
| 3. | Other pension income: The date of receipt of the relevant pension. |
[Title Amended on Feb. 28, 2007]
| Article 50-2 (Date of receipt of income from enterprises in same line of business) |
| (1) | The date of receipt of an income distributed pursuant to Article 100-18(1) of the Restriction of Special Taxation Act shall be the expiration date of the taxable year of the relevant enterprise in the same line of business. |
| (2) | The date of receipt of an income exceeding the value of stakes as of the date of distribution from among the market prices of assets distributed pursuant to Article 100-22(1) of the Restriction of Special Taxation Act shall be the date of distribution. |
[This Article Added on Feb. 4, 2009]
SECTION 4 Calculation of Income
| Article 51 (Calculation of amount of gross income) |
| (1) | Deleted. <Feb. 18, 2010> |
| (2) | Deleted. <Feb. 18, 2010> |
| (3) | The total amount of business income shall be calculated as follows: <Amended Dec. 31, 1998; Dec. 31, 1999; Dec. 29, 2000; Feb. 19, 2005: Aug. 19, 2005; Feb. 9, 2006; Feb. 22, 2008; Feb. 18, 2010; Feb. 2, 2012: Jul. 24, 2012; Feb. 15, 2013; Feb. 13, 2018; Feb. 29, 2024; Feb. 28, 2025; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | The total amount of income of advance rents received for leasing of real estate or establishing or leasing of an easement or superficies thereon shall be the total amount of the amount calculated by dividing such advance rents by the number of months of the contract period in each taxable period. In such cases, the number of months shall be calculated, as prescribed by Decree of the Ministry of Finance and Economy; |
| 1-2. | The value of the returned goods and the discount on sales shall not be included in the total amount of income in the relevant taxable period; provided, a bounty granted to the other party based on the trading quantity and trading amount, and other amount and uncollectable accounts similar thereto shall not be deducted from the total amount of income; |
| 1-3. | The discount amount of sales in cases of settling the credit sales shall be subtracted from the calculation of the amount of gross income in a taxable period whereto belongs the payment term under an agreement with the other party of transaction (the payment date where no payment term is stipulated therein); |
| 1-4. | In the event that a business operator falling under Article 137(1)1 returns solicitation allowances or other related service fees received for the solicitation of insurance subscribers and incidental services, the returned amount shall be deducted from the total revenue for the taxable period in which the return date falls; |
| 1-5. | The difference between the sale or provision price and the market value under Article 38(3)1 shall be included in gross income; |
| 2. | The bounty and other amounts similar thereto which are granted by the other party of a transaction shall be included in the gross amount of income; |
| 3. | Where the amount of tax paid as necessary expenses, such as the money of refunded customs duties, has been returned or is to be returned, such amount shall be included in the gross amount of income; |
| 4. | The value of an asset received without compensation in connection with the business, and the deducted amount of liabilities accruing from the exemption or extinguishment of obligations shall be included in the gross amount of income; provided, this shall not apply in cases falling under Article 26(2) of the Act; |
| 4-2. | The following profits, dividends of gains, or insurance marginal profits shall be included in the gross amount of income, notwithstanding the character of such income: |
| a. | Deleted; <Feb. 15, 2013> |
| b. | Deleted; <Feb. 15, 2013> |
| c. | The marginal profits from an insurance contract, or the profits or dividend of gains from the defined payment retirement pension; |
| d. | Gains on insurance settlement acquired due to losses of assets for business in connection with the relevant business shall be included in the gross amount of income; |
| 4-3. | Subsidies or compensation received for the waiver, cancellation, or restriction of a fishing right, aquaculture right, or any other similar asset or right, which fall under any of the following items, shall be included in gross income: |
| a. | An amount paid pursuant to Article 13(1) of the Act on the Restructuring of and Support for Coastal and Inshore Fisheries; |
| b. | An amount for which compensation has been claimed and paid pursuant to Article 88(1)1 of the Fisheries Act; |
| 5. | The amount of income related to businesses, other than those under subparagraphs 1, 1-2 through 1-4, 2 through 4, and 4-2, which has been reverted or is to be reverted to the relevant business operator, shall be included in the gross amount of income. |
| (4) | Deleted. <Feb. 18, 2010> |
| (5) | In applying Article 24(2) of the Act, the calculation of amounts of income, other than money, shall be as follows: <Amended Dec. 31, 1998; Feb. 22, 2008; Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Where commodities manufactured, produced, or sold are transferred from the manufacturer, producer, or sale business operator, the sale price of such manufacturer, producer, or sale business operator; |
| 2. | Market price when commodities are transferred from those, other than their manufacturer, producer, or sale business operator; |
| 3. | Face value of stocks received as dividends from the corporation; |
| 4. | Where preemptive rights are received from the corporation issuing new shares (excluding where a stockholder receives them), the amount calculated by deducting the issue-price of relevant new stocks from the value of new stocks as of the payment date pursuant to such preemptive rights; |
| 5. | In cases, other than subparagraphs 1 through 4, the market price determined by Decree of the Ministry of Finance and Economy. |
| (6) | When the value of new stocks under paragraph (5)4 is quoted low within one month from the date following the relevant payment date, such lowest value shall be the value of new stocks. |
| (7) | In calculating total gains received on a non-business loan under Article 16(1)11 of the Act, the principal shall be subtracted from the collected amount first, if it is impossible to collect the whole or part of the principal and interest from the debtor or a third party before filing the final return on tax base under Article 70 of the Act because the non-business loan constitutes a claim defined under Article 19-2(1)8 of the Enforcement Decree of the Corporate Tax Act. In such cases, if such amount recovered is less than the principal, no income received is deemed existent. <Added Dec. 31, 1998; Feb. 18, 2010; Feb. 2, 2012; Feb. 21, 2014> |
| (8) | In calculating the amount of revenue from a business for cutting down or transferring forestry trees on a parcel of forest land, the income accrued from the transfer of the forest land, when the trees are transferred along with the parcel of forest land, shall not be included in the calculation of gross amount of revenue. In such cases, the price for acquisition or transfer shall be calculated in accordance with the following guidelines if it is impracticable to separate the price for acquisition or transfer of the parcel of forest land from that for the trees thereof: <Added on Feb. 28, 2007; Feb. 15, 2013> |
| 1. | As to the forest trees: The standard market price under Article 4(1)5 of the Enforcement Decree of the Local Tax Act; |
| 2. | As to the forest land: The balance after deducting the price for acquisition or transfer of forest trees calculated in accordance with subparagraph 1 from the total price for the acquisition or transfer. In such cases, it shall be deemed that there is no price for acquisition or transfer of the forest land if there is no balance remains. |
| (9) | The revenue amount acquired from transferring a right under a forestation contract for profit sharing or the revenue amount that a party to a forestation contract for profit sharing has earned from cutting down trees or transferring the forest, which is the subject matter of such contract, in accordance with the sharing ratio under the contract shall be included in the gross revenue amount of the business for cutting down or transferring trees in forest land. <Added on Feb. 28, 2007> |
| Article 52 Deleted. <Feb. 28, 2007> |
| Article 53 (Special cases concerning calculation of gross amount of income) |
| (1) | "Amount prescribed by Presidential Decree" in Article 25(1)2 of the Act means 1.2 billion won. <Added on Feb. 28, 2025> |
| (2) | Deleted. <Feb. 18, 2010> |
| (3) | The amount to be included in the total amount of income pursuant to the main clause of Article 25(1) of the Act shall be calculated according to the following classification. In such cases, when the amount to be included in the total amount of income is less than zero, it shall be deemed nil, and the cumulative number may be calculated by multiplying the remainder of the deposit, etc. under the main sentence of Article 25(1) of the Act (hereafter referred to as "deposit, etc." in this Article) as of the end of each month by the number of days elapsed: <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| 1. | In cases of lease of a house and land appurtenant thereto (excluding cases leasing land appurtenant to a house only): |
The amount to be included in the total amount of income = Cumulative number of {Deposits, etc. in the relevant taxable period － 300 million won (where deposits are paid on two or more houses, the deposit of a house, the cumulative number of the deposit of which is largest shall be deducted first in order)} × 60/100 × 1/365 (366 in cases of a leap year) × Interest rate of a fixed deposit
| 2. | Cases, other than those under subparagraph 1: |
The amount to be included in the total amount of income = (Cumulative number of the deposit, etc. in the relevant taxable period - Cumulative number of the amount equivalent to the cost of construction of real estate for rent) × 1/365 (366 in cases of a leap year) × Interest rate of a fixed deposit - The total amount of interest received, discount fees and dividends generated from the relevant rental business in the relevant taxable period.
| (4) | Where the amount of income is reported in estimation pursuant to the main sentence of Article 45(4) of the Act or is estimated, investigated and determined pursuant to the proviso to Article 80(3) of the Act, notwithstanding paragraph (3), the amount calculated according to the following classification shall be included in the total amount of income: <Amended on Feb. 18, 2010> |
| 1. | In cases of lease of a house and land appurtenant thereto (excluding cases leasing land appurtenant to a house only): |
The amount to be included in the total amount of income = Cumulative number of {Deposits, etc. in the relevant taxable period － 300 million won (where deposits are paid on two or more houses, the deposit of a house, the cumulative number of the deposit of which is largest shall be deducted first in order)} × 60/100 × 1/365 (366 in cases of a leap year) × Interest rate of a fixed deposit
| 2. | Cases, other than those under subparagraph 1: |
The amount to be included in the total amount of income = Cumulative number of the deposit, etc. in the relevant taxable period × 1/365 (366 in case of a leap year) × Interest rate of a fixed deposit.
| (5) | "Amount corresponding to the construction costs of real estate for lease" in paragraph (3) means any of the following amounts: <Amended on Dec. 31, 1996; Apr. 1, 1998; Dec. 31, 2001; Feb. 19, 2005; Feb. 22, 2008; Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Where constructing an underpass and making an adoption of donation to the State or a local government under the State Property Act and other Acts and subordinate statutes, and where leasing it after obtaining a permit for the underpass occupation (limited to the first occupation permit without compensation), the amount corresponding to the construction costs for underpass determined by Decree of the Ministry of Finance and Economy; |
| 2. | In cases of the real estate for lease other than under subparagraph 1, the amount corresponding to the costs for constructing the relevant real estate for lease determined by Decree of the Ministry of Finance and Economy (excluding the land value). |
| (6) | The interest earned, discount fee and dividend accrued from the rental business part under paragraph (3) shall be limited to those accrued from the financial property which is confirmed to have been acquired as the relevant deposits for lease, etc. by reference to books kept and entered or the evidentiary documents. <Amended on Dec. 31, 2001> |
| (7) | When formulas referred to in paragraphs (3) and (4) apply, where real estate is subleased on a deposit basis or subleased, the amount to be included in the deposit, etc. of the relevant real estate shall be the amount calculated based on the following formula: <Amended on Feb. 15, 2013> |
The amount to be included in the deposit, etc. = [Cumulative number of the deposit, etc., received for sublease on a deposit basis or sublease - {Cumulative number of the deposit, etc., paid to be leased on a deposit basis or leased × Percentage of the size of the real estate for sublease on a deposit basis or sublease out of the size of the real estate for the lease on a deposit basis or lease (in cases of sublease on a deposit basis or sublease including business facilities, percentage of such value)}] × 1/365 (366 in cases of a leap year).
| (8) | When the proviso to Article 25(1) of the Act applies, Article 8-2(2) through (4) shall apply mutatis mutandis to a house and land appurtenant thereto and the calculation of the number of houses. <Added on Feb. 18, 2010> |
| (9) | Article 51(5) shall apply mutatis mutandis to the calculation of the value at the time of consumption or payment under Article 25(2) of the Act. <Amended on Feb. 18, 2010> |
| Article 54 (Exclusion from total amount of income) |
| (1) | "Amounts as prescribed by Presidential Decree" in Article 26(2) of the Act means the amount equivalent to national subsidies, etc. defined in the former part of Article 64(2) of the Enforcement Decree of the Corporate Tax Act. <Added on Feb. 11, 2020> |
| (2) | "Amount of income carried forward from the preceding taxable period" in Article 26(3) of the Act means income of each taxable period which has already been taxed is re-included in the income of the relevant taxable period. <Amended on Feb. 18, 2010> |
[Title Amended on Feb. 18, 2010]
| Article 55 (Calculation of necessary expenses for business income) |
| (1) | Necessary expenses corresponding to the total amount of income in each taxable period of business income are as follows, except as otherwise expressly provided for in the Act and this Decree: <Amended on Dec. 30, 1995; Dec. 31, 1997; Dec. 31, 1998; Dec. 29, 2000; Dec. 31, 2001; Dec. 30, 2003; Feb. 19, 2005; Feb. 9, 2006; Feb. 28, 2007; Feb. 22, 2008; Dec. 31, 2008; Feb. 4, 2009; Feb. 18, 2010: Mar. 15, 2010; Dec. 30, 2010; Dec. 8, 2011; Feb. 15, 2013; Jun. 28, 2013; Feb. 21, 2014; Feb. 3, 2015; Feb. 17, 2016; Feb. 3, 2017; Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021; Feb. 29, 2024; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Purchase price (excluding a reduction of purchase or a purchase discount) of raw materials for commodities or products sold and expenses incidental thereto. In such cases, the original purchase price and expenses incidental thereto shall be applicable, if the relevant business has consumed such for business use, as have been purchased for other purposes; |
| 1-2. | Incidental expenses in connection with sale, such as storage, packing charges, carriage, sales bounty, sales benefit, etc. of goods and products sold (in cases of sales incentives and sales benefit, including where they are paid without a prior agreement); |
| 2. | The book value of real estate at the time of its transfer (only applicable to cases of building construction business and real estate development and supply business). In such cases, with regard to real estate acquired for purposes, other than business, but has been used for business, the acquisition value calculated by applying Article 89 mutatis mutandis at the time of original acquisition by the relevant business operator shall be the book value: |
| 3. | Expenses for forestry business: |
| a. | Purchase expenses for seeds, seedlings, and fertilizers; |
| b. | Expenses for afforestation; |
| d. | Expenses for deforestation; |
| g. | Expenses for selling forest trees; |
| 4. | Expenses for sericultural business: |
| 5. | Expenses for livestock and poultry: |
| a. | Expenses for hatchery eggs; |
| 6-2. | The amount paid in accordance with the payment standards commonly applied to the relevant employees for supporting the childbirth or childcare of employees; |
| 6-3. | The amount equivalent to the benefits that the relevant executive officers, etc. gain through support provided under Article 20(1)6 of the Act and under each subparagraph of Article 38(3) of this Decree; |
| 7. | Expenses for assets for business: |
| a. | Repair expenses for maintaining current status of assets for business (including a part of idle facilities attached to the relevant business); |
| b. | Expenses for management and maintenance; |
| c. | Rent for assets for business; |
| d. | Non-life insurance premiums of assets for business; |
| 7-2. | The book value of a tangible fixed business-use asset at the time of transferring such tangible business-use asset (referring to the amount computed by subtracting an amount not falling under the amount of business use, if any, out of the depreciation costs under Article 33-2(1) of the Act, if the depreciation costs include such amount), where a person liable to double-entry bookkeeping under Article 160(3) of the Act (hereinafter referred to as "person liable to double-entry bookkeeping") includes the value of transfer of tangible business-use assets; |
| 8. | Taxes and public charges related to business (including the amount of foreign income tax in cases where tax credit under Article 57(1) of the Act is not applied); |
| 9. | Money or valuables contributed to any of the following funds: |
| a. | Intra-company labor welfare funds prescribed in Article 50 of the Framework Act on Labor Welfare, which are created by the relevant employers; |
| b. | Joint labor welfare funds prescribed in Article 86-2 of the Framework Act on Labor Welfare, which are created by the relevant employers and other employers; |
| c. | Intra-company labor welfare funds prescribed in Article 50 of the Framework Act on Labor Welfare, which are created by small or medium enterprises requiring cooperation of the relevant employers defined in Article 8-3(1)1 of the Act on Restriction on Special Cases concerning Taxation; |
| d. | Joint labor welfare funds prescribed in Article 86-2 of the Framework Act on Labor Welfare, which are jointly created by small or medium enterprises requiring cooperation of the relevant employers defined in Article 8-3(1)1 of the Act on Restriction on Special Cases concerning Taxation; |
| 10. | Mutual aid installments paid by a mutual aid business operator to the Construction Workers Retirement Mutual Aid Association pursuant to the Act on the Employment Improvement of Construction Workers; |
| 10-2. | Charges which an employer defrays under the Act on the Guarantee of Workers' Retirement Benefits; |
| 10-3. | Contributions from small and medium enterprises as defined under subparagraph 1 of Article 35-3 of the Special Act on Support for Human Resources of Small and Medium Enterprises; |
| 11. | Insurance premiums or charges which an employer defrays under the National Health Insurance Act, the Employment Insurance Act, and the Act on Long-Term Care Insurance for Older Persons; |
| 11-2. | Insurance premiums of an employer himself, which are defrayed as an employment-provided policyholder under the National Health Insurance Act and the Act on Long-Term Care Insurance for Older Persons; |
| 11-3. | Insurance premiums borne as a regional insured under the National Health Insurance Act and the Act on Long-Term Care Insurance for Older Persons; |
| 11-4. | Premiums paid by an artist or labor provider under subparagraph 1a of Article 2 of the Employment Insurance Act or by a self-employed person under the item b of the same paragraph as an insured under the same Act; |
| 11-5. | Premiums borne by a labor provider under Article 91-15 of the Industrial Accident Compensation Insurance Act or by a SME business owner under Article 124(1) of the same Act as an insured under the same Act; |
| 12. | Insurance premiums for a group genuine guaranty insurance and group refund-cum-guaranty insurance; |
| 13. | Interest paid on the debt incurred directly for gaining the gross amount of income; |
| 14. | Depreciation costs of tangible and intangible assets for business; |
| 15. | Appraisal losses on assets; |
| 16. | Irrecoverable bad debts (including bad debts to which a tax credit has not been applied under Article 45 of the Value-Added Tax Act, of irrecoverable receivables of the output value-added tax); |
| 17. | Bounties and other amounts similar thereto paid to any other party according to trade quantity or transaction amount; |
| 18. | Where the purchasing costs of those items destroyed by disaster, from among purchased commodities, products, real estate, and forest, are included among necessary expenses in the calculation of the amount of income in the taxable period which the relevant disaster occurs, the relevant costs; |
| 19. | Amounts paid for employees as expenses of sports activities and cultural activities at work, expenses for supporting family planning programs, expenses for employees’ get-together, etc.; |
| 20. | Value for free medical treatment paid by free treatment tickets determined by the Minister of Health and Welfare; |
| 21. | Expenses for inspection and training overseas which are related to business duties; |
| 22. | Operating expenses for special classes or middle or high schools attached to the industrial enterprises for working teenagers established under the Elementary and Secondary Education Act; |
| 23. | Operating expenses for child care centers at work established under the Infant Care Act; |
| 24. | Expenses paid for a geological survey, drilling, or digging galleries for prospecting minerals, and expenses for the relevant development; |
| 24-2. | Deleted; <Feb. 22, 2008> |
| 25. | Expenses [in cases of goods (excluding goods worth not exceeding 30,000 won per piece) donated to a specific person, limited to an amount not exceeding 50,000 won a year] paid for samples, calendars, diaries, cups, fans, and other similar articles to be donated to many and unspecified persons for purposes of advertisement and publicity; |
| 26. | Membership fees paid to organizations constituted by business operators, which are juristic persons, or the cooperatives or associations registered with the competent authorities; |
| 27. | Expenses that meet the requirements prescribed by Decree of the Ministry of Finance and Economy, out of expenses paid in a lump sum to surviving family members after death of an employee, such as schooling expenses; |
| 28. | Expenses related to the relevant gross revenue, out of expenses similar in nature to those specified in subparagraphs 1 through 27. |
| (2) | Bad debts specified in paragraph (1)16 shall be those falling under any of Article 19-2(1)1 through 5, 5-2, 6 through 9, 9-2, 10 and 11 of the Enforcement Decree of the Corporate Tax Act. <Amended on Dec. 30, 2010; Feb. 11, 2020; Feb. 15, 2022> |
| (3) | Among the charges to be included in necessary expenses pursuant to paragraph (1)10-2, all the amount of charge paid by an employer to a retirement pension account shall be included in necessary expenses, and the maximum amount of the charge paid to the defined payment retirement pension shall be the amount obtained by deducting in the order the following amounts from the estimated amount pursuant to Article 57(2); and where at least two charges exist, a charge of the retirement pension whose subscription agreement was first concluded shall first be included in necessary expenses: <Amended on Feb. 18, 2010; Jun. 8, 2010; Dec. 30, 2010; Jul. 24, 2012; Feb. 15, 2013> |
| 1. | Reserves for retirement benefits as of the date of termination of taxable period concerned; |
| 2. | Amount of charge paid until the date of termination of immediately preceding taxable period. |
| (4) | A business operator that has included charges in necessary expenses under paragraph (1)10-2, shall submit a written report on a final tax base along with a statement of adjusted retirement pension charges determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Dec. 31, 1997; Apr. 1, 1998; Feb. 9, 2006; Feb. 29, 2008; Dec. 30, 2010; Dec. 30, 2025> |
| (5) | Where a business operator who has included charges under paragraph (3) in necessary expenses falls under any of the following cases, the amount stipulated in the respective subparagraph shall be included in the gross amount of income, in calculating the amount of income during the taxable period wherein such causes have occurred: <Amended on Dec. 31, 1997; Feb. 9, 2006; Dec. 30, 2010; Jul. 24, 2012; Feb. 15, 2013> |
| 1. | Deleted; <Feb. 15, 2013> |
| 2. | Where an insurance contract or trust contract is terminated: Amount of money to be reverted to a business operator; |
| 3. | Deleted; <Feb. 15, 2013> |
| 4. | Where the reserves revert to an employer under each subparagraph of Article 24 of the Enforcement Decree of the Act on the Guarantee of Workers' Retirement Benefits: The relevant reserves. |
| (6) | Where a resident who engages in a business of manufacturing, wholesale, or retail of food or daily necessities defined in subparagraphs 1 and 1-2 of Article 2 of the Act on Donation Encouragement of Food (hereafter in this Article referred to as "food, etc.") donates, free of charge, surplus food, etc. left over from the business to a business operator specified in subparagraph 5 of Article 2 of the same Act or a person designated by such business operator, the book value of such donated food, etc. shall be included in necessary expenses. In such cases, the amount shall not be included in donations under Article 34(1) of the Act. <Amended on Feb. 18, 2010; Feb. 3, 2017; Feb. 12, 2019 |
| (7) | Bad debts specified in paragraph (2) shall be necessary expenses for the taxable period to which any of the dates prescribed by subparagraphs of Article 19-2(3) of the Enforcement Decree of the Corporate Tax Act belongs. <Added on Dec. 30, 2010> |
[Title Amended on Feb. 18, 2010]
| Article 56 (Calculation of necessary expenses for allowances for bad debts) |
| (1) | Allowances for bad debts to be included in necessary expenses pursuant to Article 28(1) of the Act shall be the larger of the amount equivalent to 1/100 of the aggregate of credit account receivable, accounts due, and other claims related to the business (hereafter referred to as "credit balance" in this Article) as of the end of the relevant taxable period, or the amount obtained by multiplying the credit balance by the actual ratio of bad debts. <Amended on Dec. 31, 1998; Feb. 18, 2010> |
| (2) | The credit balance under paragraph (1) shall be that falling under any of the following subparagraphs: <Amended on Apr. 1, 1998; Dec. 31, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Uncollected balance of the sale price of commodities and products, and uncollected balance of processing fees and service charges; |
| 2. | Outstanding receivables for the amount of claims arising from normal business transactions and for output value-added tax, and other amounts prescribed by Decree of the Ministry of Finance and Economy. |
| (3) | The actual ratio of bad debts under paragraph (1) shall be the ratio calculated as follows: <Added on Dec. 31, 1998>Actual ratio of bad debt = Bad debts in the relevant taxable period / Credit balance as of the closing date of the immediately preceding taxable period |
┌──────────────────────────────┐
│ Actual ratio of bad debt = Bad debts in the relevant taxable period / │
│ Credit balance as of the closing date of the immediately preceding taxable period │
└──────────────────────────────┘
| (4) | The balance of the allowance for bad debts to be included in the amount of gross income in calculating the amount of income in the following taxable period pursuant to Article 28(2) of the Act, shall be the amount remaining after off-setting the bad debts incurred in each taxable period. <Amended on Feb. 18, 2010> |
| (5) | The amount recovered from bad debts included in necessary expenses pursuant to Article 55(1)16 or the bad debts which have offset the allowance for bad debts, shall be included in the total amount of income of the taxable period in which such recovery date falls. <Amended on Feb. 18, 2010> |
| (6) | Any business operator who intends to be governed by Article 28 of the Act shall submit a final return on the tax base with a detailed statement of the adjustment of allowance for bad debts and bad debts prescribed by Decree of the Ministry of Finance and Economy attached thereto to the head of a tax office having jurisdiction over the place for tax payment. <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| (7) | Matters necessary for the calculation of the allowance for bad debts other than those under paragraphs (1) through (6) shall be determined by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Dec. 31, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| Article 57 (Calculation of reserves for retirement benefits as necessary expenses) |
| (1) | Reserves for retirement benefits to be included in necessary expenses pursuant to Article 29 of the Act shall be limited to the maximum amount equivalent to 5/100 of the gross wages paid in the relevant taxable period to the employees who are eligible to receive retirement benefits (excluding those who have joined a retirement pension account; hereafter the same shall apply in this Article). <Amended on Dec. 31, 2001; Feb. 9, 2006; Feb. 18, 2010; Feb. 15, 2013> |
| (2) | The accumulated amount of reserves for retirement benefits to be included in necessary expenses pursuant to paragraph (1) shall be limited to the amount multiplied by any of the following rates to the amount estimated to be paid as retirement benefits where the incumbent employees as of the end of the relevant taxable period retire in whole: <Added on Dec. 31, 2001; Feb. 9, 2006;Feb. 18, 2010; Dec. 30, 2010> |
| 1. | Where the taxable period is from January 1, 2010 to December 31, 2010: 30/100; |
| 2. | Where the taxable period is from January 1, 2011 to December 31, 2011: 25/100; |
| 3. | Where the taxable period is from January 1, 2012 to December 31, 2012: 20/100; |
| 4. | Where the taxable period is from January 1, 2013 to December 31, 2013: 15/100; |
| 5. | Where the taxable period is from January 1, 2014 to December 31, 2014: 10/100; |
| 6. | Where the taxable period is from January 1, 2015 to December 31, 2015: 5/100; |
| 7. | Where the taxable period begins on and after January 1, 2016: 0/100. |
| (3) | Deleted. <Feb. 15, 2013> |
| (4) | When a business operator that appropriates reserves for retirement benefits to necessary expenses pays the retirement benefits to an employee, he or she shall first offset it by reserves for retirement benefits. |
| (5) | Even though the amount calculated by deducting retirement benefits paid to an employee during the period following the taxable period in which the reserve for retirement benefits arrives from the cumulative reserve for retirement benefits included in necessary expenses within the limits falling under each subparagraph of paragraph (2) exceed the amount calculated by multiplying the estimate amount under paragraph (2) by the rates under each subparagraph of the same paragraph, such excess shall not be reversed for total income. <Added on Dec. 30, 2010> |
| (6) | Any business operator who intends to be governed by Article 29 of the Act shall submit a final return on tax base, along with a detailed statement on the reserve for retirement benefits determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2010; Dec. 30, 2025> |
| Article 58 Deleted. <Dec. 31, 1998> |
| Article 59 (Calculation of amount equivalent to gains on insurance settlement used for acquisition of tangible assets as necessary expenses) |
| (1) | The amount equivalent to gains on insurance settlement to be included in necessary expenses pursuant to Article 31(1) of the Act shall be appropriated for the temporary depreciation reserve. <Amended on Feb. 11, 2020> |
| (2) | "Assets of the same kind" in Article 31(1) of the Act means those same as the tangible assets whose usage or purpose is extinguished. <Amended on Feb. 18, 2010; Feb. 11, 2020> |
| (3) | The depreciation cost of tangible assets acquired by gains from the amount equivalent to insurance settlement shall be offset for the temporary depreciation reserve within the limit of the temporary depreciation reserve under paragraph (1); provided, in case of disposing of the relevant assets, the amount remaining after offsetting shall be included in the total amount of income for the taxable period to which the disposal date belongs. <Amended on Feb. 13, 2018; Feb. 11, 2020> |
| (4) | Any business operator who intends to be governed by Article 31(2) of the Act shall submit a final return on tax base along with plans for the use of the insurance money determined by Decree of the Ministry of Finance and Economy to the head of competent tax office having jurisdiction over the place for tax payment. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
[Title Amended on Feb. 11, 2020]
| Article 60 (Calculation of national subsidies used for acquisition of assets for business as necessary expenses) |
| (1) | The amount to be included in necessary expenses under Article 32(1) of the Act shall be the expenses spent to acquire or improve the assets for business from among paid national subsidies, and such amount shall be appropriated for the temporary depreciation reserves or the advanced depreciation reserves according to the following classifications: <Amended on Feb. 11, 2020> |
| 1. | Assets to be depreciated: Temporary depreciation reserves; |
| 2. | Other assets: Advanced depreciation reserves. |
| (2) | The depreciation cost of assets for business acquired with national subsidies shall be offset for the temporary depreciation reserves within the limit of the temporary depreciation reserves under paragraph (1); provided, in cases of disposing the assets concerned, the amount remained after setoff shall be included in the total amount of revenue of the taxable period to which the date of such disposition belongs. <Amended on Feb. 15, 2013> |
| (3) | Any business operator who intends to be governed by Article 32(2) of the Act shall submit to the head of the competent tax office having jurisdiction over the place for tax payment a final return on the tax base accompanied by a plan for the use of government subsidies prescribed by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (4) | "Extenuating circumstances prescribed by Presidential Decree" in the latter part of Article 32(2) of the Act means any of the following cases: <Added on Feb. 22, 2008> |
| 1. | Where the permission, authorization, etc. of construction are delayed; |
| 2. | Where the period of construction is extended because the place in which construction shall be executed is not determined, etc.; |
| 3. | Where litigation on compensation, etc. for a site is under way; |
| 4. | Where any circumstance corresponding to those under subparagraphs 1 through 3 has occurred. |
[Title Amended on Feb. 11, 2020]
| Article 61 (Expenses related to domestic affairs, etc.) |
| (1) | "Expenses for domestic affairs prescribed by Presidential Decree, and expenses related thereto" in Article 33(1)5 of the Act means those falling under any of the following subparagraphs: <Amended on Apr. 1, 1998; Dec. 31, 1999; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| 1. | Expenses confirmed as used by the business in connection with domestic affairs. In such cases, expenses related to the houses corresponding to Article 98(2)2 (proviso) shall be deemed expenses incurred in connection with domestic affairs; |
| 2. | In cases where the total amount of assets for business falls short of the total amount of liabilities, the amount calculated as interest paid on the debt equivalent to such amount of short-fall under conditions prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | Deleted. <Feb. 18, 2010> |
| Article 62 (Calculation of depreciation costs as necessary expenses) |
| (1) | Where the depreciation costs of assets for business, tangible assets and intangible assets (excluding invested assets; hereinafter referred to as "depreciable assets") are appropriated to necessary expenses, the depreciation expense under Article 33(1)6 of the Act (hereinafter referred to as "depreciation amount") shall be appropriated as necessary expenses in calculating the income amounts within the limit of the amount calculated by such means as returned in each taxable period by depreciable asset to the head of the competent tax office (hereinafter referred to as "scope of depreciation"). In such cases, if the business is opened or closed in the relevant taxable period, or if the depreciable assets are acquired or transferred in the relevant taxable period, the scope of depreciation shall be computed by dividing such amount by 12 as is obtained by multiplying the scope of depreciation by the number of months spent for business in the relevant taxable period; and the number of months shall be computed according to the calendar, treating the number of days not exceeding a month as one month. <Amended on Dec. 29, 2000; Feb. 11, 2020> |
| (2) | "Depreciable assets" in paragraph (1) means the following assets used directly for the said business (excluding assets, the value of which does not decrease over time): <Amended on Dec. 31, 2001; Dec. 30, 2002; Feb. 19, 2005; Jun. 30, 2005; Mar. 29, 2017; Feb. 11, 2020; Aug. 26, 2020; Feb. 28, 2025> |
| 1. | Any of the following tangible assets: |
| a. | Buildings (including appurtenant facilities) and structures (hereinafter referred to as "structures"); |
| b. | Vehicles and transportation equipment, tools, instruments and furnishings; |
| d. | Machines and apparatuses; |
| f. | Tangible assets similar to items a through e; |
| 2. | Any of the following intangible assets: |
| a. | Goodwill, design right, utility model right, trademark right; |
| b. | Patent right, fishing rights, aquaculture business rights, gathering rights under the Submarine Mineral Resources Development Act, toll road management rights, water utilization rights, rights to utilize electricity and gas supply facilities, rights to use water supply facilities for industry, rights to utilize tap water facilities, rights to use heat supply facilities; |
| c. | Mining rights, rights to use exclusive telecommunications and telephone facilities, rights to utilize exclusive sidetracks, rights to manage sewage terminal treatment plants, rights to manage tap water facilities; |
| e. | Deleted; <Dec. 30, 2002> |
| f. | Development expenses: Expenses incurred in applying the outcome of research or related knowledge for planning or designing in order to create or remarkably improve material, apparatus, products, process, system, or service before commercial production or uses, which have been appropriated for development expenses by the relevant business operator (including the amount paid by any member of the Industrial Technology Research Cooperatives under the Industrial Technology Research Cooperatives Support Act for the research and development and the acquisition of research facilities, etc. to the relevant Cooperatives); |
| g. | Value of donated assets for beneficial use: Book value of relevant assets in cases where any use is made of the relevant assets or any profits accrue therefrom after the assets, other than money, are donated; |
| h. | Rights to utilize frequencies and rights to manage airport facilities: Rights to utilize frequency under Article 14 of the Radio Waves Act, and rights to manage airport facilities under Article 26 of the Airport Facilities Act. |
| i. | Other intangible assets similar to those specified in items a through h. |
| (3) | In applying paragraph (1), tangible and intangible assets acquired under conditions of long-term installment, etc. shall be included in depreciable assets, irrespective of whether the payment is settled or the ownership is transferred; and assets corresponding to the financial lease under Article 24(5) of the Enforcement Decree of the Corporate Tax Act shall also be included in depreciable assets of the business operator who is the user of such lease. <Amended on Feb. 19, 2005; Feb. 11, 2020> |
| (4) | A business operator may appropriate in each taxable period the book value of relevant depreciable assets, without reducing it, to the accumulated depreciation amounts; and may include such depreciation costs in necessary expenses. In such cases, the accumulated depreciation amounts shall be appropriated by each individual asset; and if the specification on the adjustment of depreciation cost under Article 73-2 is made and preserved, the total depreciation costs may be appropriated to the accumulated depreciation amounts. <Amended on Feb. 18, 2010> |
| (5) | The amount in excess of the scope of depreciation from among the depreciation costs appropriated to necessary expenses during each taxable period of a business operator (hereafter referred to as "amount of disapproved depreciation" in this Article) shall, where the depreciation costs appropriated to necessary expenses during the taxable periods thereafter fall short of the scope of depreciation, be appropriated to necessary expenses within the limit of such short-fall amount (hereafter referred to as "approved short-fall amount" in this Article) which is calculated by the business operator in the subsequent taxable year. In such cases, when a business operator fails to appropriate any depreciation costs to necessary expenses, the amount of disapproved depreciation shall be ratified as necessary expenses within the limit of scope of depreciation. <Amended on Feb. 18, 2010> |
| (6) | The approved short-fall amount cannot be appropriated to the dis- approved amount of depreciation during the taxable period thereafter. |
| (7) | In applying the latter part of paragraph (1), if a part of depreciable assets is transferred, the accumulated amount of depreciation, the disapproved depreciation amount, or the approved short-fall amount for the relevant transferred asset shall be calculated by multiplying the accumulated amount of depreciation, the disapproved amount of depreciation, or the approved short-fall amount for the entire relevant depreciable assets by the ratio which the value of transferred parts occupies out of the entire values of relevant depreciable assets. In such cases, the relevant value shall be the book value at the time of acquisition. <Amended on Dec. 29, 2000> |
| (8) | Where a business operator makes concurrently the depreciation and the evaluation increase on the depreciable assets, the scope of depreciation shall be calculated by considering that the depreciation has been conducted first, and the evaluation increase is made thereafter. |
[This Article Wholly Amended on Dec. 31, 1998]
| Article 63 (Useful life and depreciation rate) |
| (1) | The useful life of a depreciable asset and the depreciation rate according to the relevant useful life shall be as follows: <Amended on Dec. 31, 2001; Dec. 30, 2002; Feb. 29, 2008; Feb. 11, 2020; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Assets for laboratory tests determined by Decree of the Ministry of Finance and Economy and intangible assets provided for in Article 62(2)2a through d: |
Useful life determined by Decree of the Ministry of Finance and Economy, and the consequential depreciation rate by depreciation method determined by Decree of the Ministry of Finance and Economy (hereinafter referred to as "depreciation rate");
| 2. | Depreciable assets (excluding intangible assets provided for in Article 62(2)2f through i) other than assets subject to subparagraph 1: |
Useful life as reported by a business operator to the head of the competent tax office having jurisdiction over the place for tax payment (hereinafter referred to as "reported useful life") by selecting and applying within the scope of useful life determined by Decree of the Ministry of Finance and Economy (hereinafter referred to as "scope of useful life"), with the increase or decrease of 25/100 of the relevant standard useful life from the standard useful life determined by Decree of the Ministry of Finance and Economy by structure, asset, or business type (hereinafter referred to as "standard useful life"), and the corresponding depreciation rate (the standard useful life and the corresponding deprecation rate, if it is failed to report within the reporting term under any of the subparagraphs of paragraph (2)).
| (2) | A report on the useful life under paragraph (1) or (5) shall be filed with the head of the competent tax office having jurisdiction over the place for tax payment in the form prescribed by Decree of the Ministry of Finance and Economy by not later than the deadline for filing the final return on tax base of the global income tax for the taxable period pertinent to either of the following dates (it may be filed via the Home Tax Service): <Amended on Mar. 17, 2004; Feb. 29, 2008; Nov. 5, 2013; Dec. 30, 2025> |
| 1. | In cases of a business operator who commences a new business, the commencement date of such business; |
| 2. | Where a business operator, other than those falling under subparagraph 1, newly acquires a depreciable asset whose standard useful life by classification of asset or business type is different, or commences a business of a new type, the date of such acquisition or the commencement date of said business. |
| (3) | A reported useful life or standard useful life that a business operator has applied for each type of asset and each line of business in accordance with paragraph (1)2 or (5) shall continue to be applied in subsequent taxable periods thereafter. <Amended on Feb. 18, 2010; Nov. 5, 2013> |
| (4) | A useful life reported under paragraph (1)2, (2), or (5) shall be indicated by the year. <Amended on Feb. 18, 2010; Nov. 5, 2013> |
| (5) | Notwithstanding paragraph (1)2, where a small or medium enterprise defined in Article 2 of the Enforcement Decree of the Restriction of Special Taxation Act (hereafter in this paragraph and paragraph (6), referred to as "small or medium enterprise") acquires any of the following assets (hereafter in this paragraph and paragraph (6), referred to as "asset for facilities investment") during the period between October 1, 2014 and June 30, 2016, the small or medium enterprise may select to determine the useful life of such asset within the maximum (a period of less than one year shall be rounded down) computed by adding or subtracting 50/100 of the standard useful life to or from the standard useful life of the asset for the relevant type of business when it files a report thereon with the head of the tax office having jurisdiction over the place for tax payment; provided, the foregoing shall not apply where the total value of assets for facilities investment during the relevant taxable period is smaller than the total value of assets for facilities investment during the immediately preceding taxable period: <Added on Nov. 5, 2013; Sep. 26, 2014; Feb. 17, 2016> |
| 1. | Vehicles and transports; provided, such assets are limited to those used for transportation business or rental business for the purpose of rental; |
| 2. | Ships and aircraft; provided, such assets are limited to those used for fishery, transportation business, or rental business for the purpose of rental; |
| 3. | Tools, instruments, and furniture; |
| 4. | Machinery and equipment. |
| (6) | To receive tax credits under paragraph (5), a small or medium enterprise shall file an application for special consideration in useful life in the form prescribed by Decree of the Ministry of Finance and Economy with the head of the tax office having jurisdiction over the place for tax payment by the deadline for filing the final return on the tax base of the global income tax for the taxable period in which the relevant asset for facilities investment was acquired (including those filed via the Home Tax Service). <Added on Nov. 5, 2013; Sep. 26, 2014; Dec. 30, 2025> |
[This Article Wholly Amended on Dec. 31, 1998]
| Article 63-2 (Special cases concerning useful life) |
| (1) | In any of the following cases, notwithstanding Article 63(1)2 and (3), a business operator may apply useful life different from the range of the useful life or change useful life which he or she has applied, with approval from the commissioner of the regional tax office having jurisdiction over the place for tax payment for each place of business, by adding or subtracting 50/100 of the standard useful life to or from the standard useful life: <Amended on Feb. 29, 2008; Feb. 18, 2010; Feb. 21, 2014; Dec. 30, 2025> |
| 1. | Where the assets are remarkably corroded, abraded, or damaged due to characteristics of the place of business; |
| 2. | As a business operator in whose case three years have passed after the commencement of his or her business, where the operating rate prescribed by Decree of the Ministry of Finance and Economy (hereinafter referred to as "operating rate") of production facilities in the relevant taxable period (excluding buildings; hereinafter referred to as "production facilities") has remarkably increased above the average operating rate during the preceding three taxable periods; |
| 3. | Where the existing production facilities are in need of accelerated depreciation due to the development and diffusion of new production technology and new products; |
| 4. | Where manufacturing is suspended or the operating rate of production facilities is decreased due to the fluctuation in economic conditions. |
| (2) | Where a business operator intends to obtain approval for useful life or approval for change thereof pursuant to paragraph (1), he or she shall file an application for approval for (change of) useful life (including submission by the Home Tax Service) prescribed by Decree of the Ministry of Finance and Economy with the commissioner of the competent regional tax office through the head of the competent tax office having jurisdiction over the place for tax payment by the date when three months have passed from the date referred to in the subparagraphs of Article 63(2) or the date when three months have passed before the end of the first taxable period. In such cases, an application for approval of useful life or for approval of change thereof shall be filed by the year. <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| (3) | The head of the competent tax office having jurisdiction over the place for tax payment who has received an application pursuant to paragraph (2) shall notify the applicant of the approval or disapproval notified by the commissioner of the competent regional tax office by the end of the taxable period in which the date of receipt of an application falls (where a period from the date of receipt of an application to the end of the taxable period is less than three months, referring to the date three months have passed from the date of receipt of the application). <Amended on Feb. 18, 2010> |
| (4) | Where approval for useful life or for change thereof is obtained after the expiration of taxable period in which the acceptance date of a written application under paragraph (2) falls, useful life newly approved or approved with changes shall be applied from the taxable period in which the date of such approval or modified approval falls. |
| (5) | If a business operator who has changed (including a re-change) useful life of depreciable assets under paragraph (1) intends to further change useful life of the relevant assets, he or she shall do so only after three years have elapsed from the expiration of taxable period whereto the previously- changed useful life have been applied for the first time. |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 18, 2010]
| Article 63-3 (Useful life of used assets) |
| (1) | Where a business operator acquires an asset determined by Decree of the Ministry of Finance and Economy whose standard useful life have partially or fully elapsed (hereafter referred to as "used assets" in this Article), he or she may have such useful life as selected and reported by him or himself within the scope between the years corresponding to 50/100 of the standard useful life (in cases of the asset by business kind, referring to such standard useful life as applied to the acquisitor's business kind) and the relevant standard useful life, as the useful life of the relevant used assets, notwithstanding Article 63(1)2. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| (2) | Where a business operator intends to file a report on useful life under paragraph (1), a report on useful life under Article 63(2) shall be submitted to the head of the competent tax office having jurisdiction over the place for tax payment by not later than the term for the final return on the tax base of gross income tax during the taxable period in which the acquisition date of used assets falls. |
[This Article Added on Dec. 29, 2000]
| Article 64 (Reporting on depreciation methods) |
| (1) | The depreciation cost of each depreciable asset shall be computed by the depreciation methods that the relevant business operator reports to the head of the tax office having jurisdiction over the place for tax payment, from among the following depreciation methods: <Amended on Dec. 31, 1998; Dec. 31, 2001; Dec. 30, 2002; Feb. 19, 2005; Feb. 3, 2015; Feb. 11, 2020; Feb. 28, 2025> |
| 1. | Structures and intangible assets (excluding assets specified in subparagraphs 3 and 6 through 9): Straight line method; |
| 2. | Tangible assets other than structures (excluding assets specified in subparagraph 4): Declining balance method or straight line method; |
| 3. | Mining right (including gathering rights under the Submarine Mineral Resources Development Act), waste landfill facilities (referring to landfill facilities defined in subparagraph 2a of Appendix 3 to the Enforcement Decree of the Wastes Control Act): Units of production method or straight line method; |
| 4. | Tangible assets for mining industry: Units of production method, declining balance method, or straight line method; |
| 5. | Deleted; <Dec. 30, 2002> |
| 6. | Development expenses: Method to depreciate in proportion to the number of elapsed months by each business year pursuant to useful life reported in a unit of year, within the period of 20 years from the point of time when the sale or use of related products is possible; |
| 7. | Value of donated assets for use benefits: Method to write off the proportionally distributed amount (where the relevant donated asset is destroyed or a contract is terminated, the relevant remaining value) according to the use benefit period of the relevant assets (where there is no special agreement on the relevant period, reported useful life); |
| 8. | Right to utilize frequency and right to manage airport facilities: Method to write off equal amount according to the period of use within the period which has been publicly announced by the competent administrative office or whose registration has been made in the said office; |
| 9. | Intangible assets under Article 62(2)2i: The method of amortization in proportion to the number of months elapsed in each fiscal year, based on the useful life reported on a yearly basis (meaning the useful life under the Korean Financial Accounting Standards). |
| (2) | When a business operator intends to report on a depreciation method under paragraph (1), he or she shall submit a written report on depreciation methods determined by Decree of the Ministry of Finance and Economy (including those filed via the Home Tax Service) to the head of the competent tax office having jurisdiction over the place for tax payment, by selecting one method by asset under classification listed in each subparagraph of the said paragraph, by not later than the final tax base return deadline for the taxable period in which the date listed in each of the following subparagraphs falls: <Amended on Dec. 31, 2001; Mar. 17, 2004; Feb. 29, 2008; Feb. 11, 2020; Dec. 30, 2025> |
| 1. | Where a business operator commences a new business, the date of commencement of the relevant business; |
| 2. | Where a business operator, other than those specified in subparagraph 1, newly acquires depreciable assets with classification different from each subparagraph of paragraph (1), the date of such acquisition. |
| (3) | The depreciation method reported by a business operator under paragraph (1) (where failed to file a report on the depreciation methods, referring to the depreciation methods prescribed in paragraph (4)1 through 5), shall be applied continuously throughout subsequent taxable periods. <Added on Dec. 31, 1998; Dec. 31, 2001> |
| (4) | Where a business operator fails to make a report under paragraph (1), the scope of depreciation for the relevant depreciable assets shall be computed under any of the following depreciation methods: <Amended on Dec. 31, 1998; Dec. 31, 2001; Dec. 30, 2002; Feb. 28, 2025> |
| 1. | With respect to assets falling under paragraph (1)1, the straight line method; |
| 2. | With respect to assets falling under paragraph (1)2, the declining balance method; |
| 3. | With respect to assets falling under paragraph (1)3 and 4, the units of production method; |
| 4. | With respect to assets falling under paragraph (1)6, the method to calculate depreciation an equal amount each year for a period of five years from the point of time when the related products are available for sale or use; |
| 5. | With respect to assets under paragraph (1)7 and 8, the method prescribed in the said subparagraph; |
| 6. | With respect to the assets under paragraph (1)9, a method of amortizing an equal amount each year over 5 years. |
| (5) | Where a business operator has changed the relevant depreciation method without obtaining approval for change thereof under Article 65(1), the scope of depreciation shall be calculated by the depreciation method applicable prior to such change. <Added on Dec. 30, 2002> |
| Article 65 (Changes of depreciation methods) |
| (1) | Where a business operator falls under any of the following cases, he or she may change the relevant depreciation methods by obtaining approval from the head of the competent tax office having jurisdiction over the place for tax payment, notwithstanding Article 64(3): <Amended on Dec. 31, 1997; Dec. 31, 1998; Feb. 19, 2005> |
| 1. | When he or she operates a business jointly with another business operator with a different depreciation method; |
| 2. | When he or she acquires or succeeds to the business of another business operator with a different depreciation method; |
| 3. | When a foreign investor acquires or holds at least 20/100 of the total shares under the Foreign Investment Promotion Act; |
| 4. | When he or she intends to change the depreciation methods due to the business fluctuations in overseas markets or due to the changes in economic conditions. |
| (2) | Any business operator who wishes to obtain approval under paragraph (1) shall file an application for changing the depreciation methods in the form prescribed by Decree of the Ministry of Finance and Economy (such application may be filed through the Home Tax Service network) with the head of the tax office having jurisdiction over the place for tax payment by the end of the initial taxable period to which the business operator intends to apply the depreciation methods to be changed. <Amended on Apr. 1, 1998; Dec. 31, 1998; Mar. 17, 2004; Feb. 29, 2008; Feb. 18, 2010; Feb. 3, 2015; Dec. 30, 2025> |
| (3) | Upon receipt of an application under paragraph (2), the head of the tax office having jurisdiction over the place for tax payment shall determine whether to approve it and notify the applicant of his or her determination by not later than one month after the end of the taxable period in which the application is filed. <Added on Dec. 31, 1998; Feb. 3, 2015> |
| (4) | When the head of the competent tax office having jurisdiction over the place for tax payment intends to grant approval for changing depreciation method due to the causes under paragraph (1)4, he or she shall comply with the standards determined by the Commissioner of the National Tax Service. |
| (5) | When a business operator changes the depreciation method under paragraph (1), Article 27(6) of the Enforcement Decree of the Corporate Tax Act shall apply mutatis mutandis to the calculation of the scope of depreciation. <Amended Dec. 31, 1998; Feb. 19, 2005> |
| Article 66 (Definition of declining balance method, straight line method) |
The terms used in Article 64 shall be defined as follows: <Amended on Dec. 31, 1998; Feb. 19, 2005; Feb. 18, 2010; Feb. 3, 2015; Feb. 17, 2016>
| 1. | "Declining balance method" means a depreciation method where the scope of depreciation in each taxable period, as calculated by multiplying the balance obtained by deducting the amount already included in necessary expenses (including the amount not included in necessary expenses under Article 33-2(1) and (2) of the Act out of the depreciation cost of passenger vehicles for business use under Article 33-2(1) of the Act (hereinafter referred to as "passenger vehicles for business use")), as depreciation costs from the acquisition value of relevant depreciable assets by the depreciation rate according to the useful life of relevant assets, diminishes successively each year; |
| 2. | "Straight line method" means a depreciation method where the scope of depreciation in each taxable period is computed by applying the depreciation rate according to useful life of the relevant assets to the acquisition value of relevant depreciable assets (referring to the acquisition value computed by applying mutatis mutandis Article 72 of the Enforcement Decree of the Corporate Tax Act; hereafter the same shall apply in this Article), becomes equal each year; |
| 3. | "Units of production method" means a depreciation method where any of the following amounts is determined as the scope of depreciation for each taxable period: |
| a. | An amount computed by multiplying the amount obtained by dividing the acquisition value of the relevant depreciable assets by the total expected amount to be mined from the mining area to which such asset belongs by the quantity extracted from the mining area during the relevant taxable period; |
| b. | An amount computed by multiplying the amount calculated by dividing the acquisition value of the relevant depreciable assets by the expected quantity of landfill to be dumped in the waste landfill facilities comprising the assets by the quantity of landfill dumped in the waste landfill facilities during the relevant taxable period. |
| Article 67 (Constructive instant depreciation) |
| (1) | When a business operator appropriates to necessary expenses such amount as has been disbursed for the acquisition of depreciable assets and that as corresponding to the capital expenditure on the depreciable assets, the scope of depreciation shall be calculated by deeming it has already been depreciated. <Amended on Dec. 31, 1998> |
| (2) | "Capital expenditure" in paragraph (1) means the repair cost disbursed to extend the useful life of the depreciable asset owned by a business operator or to increase the actual value of the relevant asset, and it shall be deemed that any disbursement for any of the followings is also included: <Added on Dec. 31, 1998; Feb. 11, 2020> |
| 1. | Remodeling to change the original use thereof; |
| 2. | Installing elevators or apparatuses for heating and cooling; |
| 3. | Installing emergency exits in buildings, etc.; |
| 4. | Restoring those which have lost the usefulness of original purposes of the relevant assets because buildings, machines, facilities, etc. have been damaged or lost due to disasters, etc.; |
| 5. | Others similar to those specified in subparagraphs 1 through 4, such as improvement, expansion, enlargement, etc. |
| (3) | When the repair costs disbursed by a business operator during each taxable period falls under any of the following cases, and the relevant repair costs have been appropriated to necessary expenses, it shall not be deemed to be included in the capital expenditure under paragraph (2): <Added on Dec. 31, 1998; Feb. 15, 2013; Feb. 11, 2020> |
| 1. | Where the amount disbursed as repair cost by individual asset is less than six million won; |
| 2. | Where the amount disbursed as repair cost by individual asset is short by 5/100 of the asset value on the statement of financial position as of the expiration of immediately preceding taxable period (referring to the amount obtained by subtracting the accumulated depreciation costs from the acquisition value); |
| 3. | Where the disbursement is made for the periodic repair of less than three years. |
| (4) | The depreciable assets whose acquisition value does not exceed one million won per transaction unit shall be appropriated to necessary expenses for the taxable period in which the date of provision of such assets for business falls, notwithstanding Article 62(1); provided, this shall not apply to any of the following cases: <Amended on Dec. 31, 1998; Feb. 18, 2010> |
| 1. | Assets possessed in large quantities due to the nature of relevant original business; |
| 2. | Assets acquired for the commencement or expansion of the relevant business. |
| (5) | "Transaction unit" in paragraph (4) means that its acquirer may use it independently and directly for the relevant business. <Amended on Dec. 31, 1998> |
| (6) | In any of the following cases, the difference between book value and disposition value of the relevant asset may be included in necessary expenses for the relevant taxable period: <Amended on Feb. 18, 2010; Feb. 3, 2017; Feb. 13, 2018> |
| 1. | Where production facilities are partially scrapped due to the replacement of facilities or outdated technology; |
| 2. | Where facilities are removed in order to reinstate a leased place of business according to the relevant lease contract upon the closure of business or the relocation of the place of business. |
| (7) | Notwithstanding paragraph (4), with respect to any of the following properties, only those appropriated to necessary expenses in the taxable period in which the date of using them for such business falls, shall be included in necessary expenses: <Amended on Dec. 30, 1995; Dec. 31, 1996; Apr. 1, 1998; Dec. 31, 1998; Dec. 31, 1999; Dec. 30, 2010; Feb. 11, 2020> |
| 1. | Fishing gear used for fisheries (including implements for fishing boats); |
| 2. | Motion picture films, tools, furniture, electric appliances, gas apparatus, home appliances and furnishings, clock, experiment apparatus, measurements, and billboards; |
| 3. | Acquisition price of individual property is less than 300 thousand won, such as video tapes for a lending business and the compact discs for music; |
| 4. | Telephones (including mobile phones) and personal computers (including its peripheral devices). |
| Article 68 (Legal fiction of depreciation) |
| (1) | Where any business operator who conducts business for which income tax on income in the relevant taxable period is exempted or reduced obtains income tax exemption or reduction, he or she shall calculate the depreciation cost on the depreciable assets pursuant to Articles 62, 63, 63-2, 63-3, 64 through 67, and 70, 71 and 73, and then appropriate it for necessary expenses. <Amended on Feb. 18, 2010> |
| (2) | In case of filing the account statement of estimated income under Article 70(4)6 of the Act for the income generated during the relevant taxable period, or of investigating and determining by estimation the amount of income pursuant to the proviso to Article 80(3) of the Act, the depreciation cost on depreciable assets (excluding buildings) calculated pursuant to Articles 62, 63, 63-2, 63-3, 64 through 67, 70, 71 and 73 shall be deemed to be appropriated for necessary expenses. <Added on Feb. 13, 2018; Feb. 12, 2019> |
| (3) | Any business operator who has failed to appropriate the depreciation cost on depreciable assets for necessary expenses pursuant to paragraph (1) or who is deemed to appropriate the depreciation cost on depreciable assets for necessary expenses, shall calculate the scope of depreciation by adopting, as the basic value, the remaining balance which deducts the amount corresponding to the depreciation costs from the value of assets which are to form the basis for the calculation of the scope of depreciation in the taxable period thereafter; provided, if revaluation pursuant to the Assets Revaluation Act is made, the scope of depreciation shall be calculated on the basis of the reappraised value. <Amended Dec. 31, 1998; Feb. 19, 2005; Feb. 18, 2010; Feb. 13, 2018> |
| (4) | Matters necessary for calculating the amount deemed appropriated for necessary expenses pursuant to paragraphs (2) and (3) shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 12, 2019; Dec. 30, 2025> |
| Article 69 Deleted. <Dec. 31, 1998> |
| Article 70 (Depreciation of idle facilities) |
The value of assets which form the basis for the calculation of the amount of scope of depreciation shall include the value of idle facilities for business, but it shall not include the value of the assets under construction. <Amended Dec. 31, 1998>
| Article 71 (Residual value) |
The residual value of depreciable assets in calculation of the amount of scope of depreciation under Article 62(1) shall be zero; provided, in cases of calculating the amount of scope of depreciation by declining balance method, the amount equivalent to 5/100 of the acquisition value shall be its residual value; but, such amount shall be added to the scope of depreciation in the taxable period wherein the non-depreciated balance of the relevant depreciable asset first becomes 5/100 or less of the acquisition value. <Amended Dec. 31, 1998; Dec. 31, 2001; Feb. 18, 2010>
| Article 72 Deleted. <Dec. 31, 1998> |
| Article 73 (Disapproval of depreciation of appraised assets and transferred assets) |
| (1) | In cases where a business operator makes an evaluation increase of depreciable assets, the disapproved amount of depreciation shall be ratified as necessary expenses, while deemed that up to the ceiling of evaluation increase has been included in the total revenue amounts; and those which exceed the ceiling of evaluation increase shall be calculated as the disapproved amount of depreciation to be carried forward to the taxable period thereafter. In such cases, the approved short-fall amount shall be deemed nil. <Amended Dec. 31, 1998; Feb. 18, 2010> |
| (2) | Deleted. <Dec. 31, 1998> |
| (3) | Deleted. <Dec. 31, 1998> |
| (4) | Deleted. <Dec. 31, 1998> |
| Article 73-2 (Submission of specification regarding depreciation costs) |
| (1) | Where a business operator has appropriated the depreciation costs to necessary expenses in each taxable period, he or she shall prepare and retain specification on the adjustment of depreciation costs determined by Decree of the Ministry of Finance and Economy by classifying them by individual asset, and submit the written report under Article 70 of the Act to the head of the competent tax office having jurisdiction over the place for tax payment, along with an aggregate table of specifications of adjustment of depreciation costs, specification of approved or denied depreciation costs, and specification of adjustment of depreciation costs of the acquired or transferred assets determined by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| (2) | Matters necessary for the calculation of depreciation costs of depreciable assets shall be determined by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1998]
| Article 74 (Inclusion of VAT input tax in necessary expenses) |
"The amount of tax in cases prescribed by Presidential Decree" in Article 33(1)9 of the Act means any tax amount specified below: <Amended on Apr. 1, 1998; Feb. 19, 2005; Feb. 29, 2008; Feb. 18, 2010; Feb. 15, 2013; Jun. 28, 2013; Dec. 30, 2025>
| 1. | Input tax amount under Article 39(1)5 of the Value-Added Tax Act (excluding an amount corresponding to capital expenditure under Article 67(2)); |
| 1-2. | Input tax amount under Article 39(1)6 of the Value-Added Tax Act; |
| 2. | Other input tax amount determined by Decree of the Ministry of Finance and Economy proved as payable by the relevant business operator. |
| Article 75 (Calculation of interest of construction funds) |
| (1) | "Interest on a loan appropriated for construction funds prescribed by Presidential Decree" in Article 33(1)10 of the Act means interest paid on the loan (excluding loans obscure as to whether used for the construction of assets) used for the purchase, manufacturing or construction (hereafter referred to as "construction" in this Article) of tangible and intangible assets for the relevant business regardless of the pretexts, or means expenditures similar to such payments. <Amended on Feb. 18, 2010; Feb. 11, 2020> |
| (2) | Interest or expenditure under paragraph (1) shall be added to the relevant principal as capital expenditure until the completion date of construction determined by Decree of the Ministry of Finance and Economy (in cases where land is purchased, until the date when such land price is paid in full; and in cases where such land is provided for the business before the land price is paid in full, until the date of such provision of land); provided the interest earned from the temporary deposit of the loan under paragraph (1) shall be subtracted from the capital expenditure to be added to the principal. <Amended on Dec. 31, 1996; Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (3) | In cases where a part of borrowed construction funds is diverted into the operative funds, the interest paid corresponding thereto shall be deemed necessary expenses. |
| (4) | In cases where interest which has accrued due to arrears in repayment of construction funds borrowed is added to the principal, such added amount shall be deemed capital expenditure in the relevant taxable period and interest paid on the amount added to the principal shall be deemed necessary expenses. <Amended on Feb. 18, 2010> |
| (5) | The interest on the loan which has remained, out of the loan under the pretext of construction funds, after the completion of such construction, shall be deemed necessary expenses in each taxable period. <Amended on Feb. 18, 2010> |
| (6) | In the calculation of capital expenditure or necessary expenses under paragraphs (1) through (5), interest under Article 33(1)11 of the Act shall not be counted as capital expenditure or necessary expenses. <Amended on Feb. 18, 2010> |
| Article 76 (Interest on loan, creditor of which is obscure) |
"Interest on any loan prescribed by Presidential Decree, the creditor of which is obscure" in Article 33(1)11 of the Act means interest on loans falling under any of the following subparagraphs (including money or goods provided after loaning regardless of pretexts, such as brokerage charges, honorarium, etc.); provided, in cases where the creditor, whose residence has been confirmed as of the payment date by photocopy of resident registration card, becomes missing after receiving a reimbursement of the loan, this shall not be applicable: <Amended Dec. 31, 1998; Feb. 12, 2019>
| 1. | Loan with its creditor's name and whereabouts unknown; |
| 2. | Loan whose creditor cannot be recognized to have lent such loan, determined based on his or her financial ability and property status; |
| 3. | Loan for which the details of financial transactions with the creditor and its contents are obscure. |
| Article 77 Deleted. <Dec. 29, 2000> |
| Article 78 (Expenditure not related to business) |
"Expenses deemed not directly related to such business" in Article 33(1)13 of the Act shall be any of the following expenses: <Amended on Apr. 1, 1998; Dec. 31, 1999; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2010; Feb. 28, 2023; Dec. 30, 2025>
| 1. | Acquisition expenses, maintenance expenses, repairing expenses, and necessary expenses related thereto which are generated by a business operator by an acquisition or management of asset not related to his or her business; |
| 2. | Maintenance expenses, repairing expenses, rental fees, and expenditures related thereto for land and buildings which are not used by a business operator directly for his or her business, and mainly used by other persons (excluding his or her employees); |
| 3. | The interest paid on the amount borrowed by a business operator for acquiring assets not connected to his or her proper business; |
| 4. | Business promotion expenses paid by a business operator without any connection to his or her proper business; |
| 4-2. | The aggregate of money, assets other than money, and economic interest that constitute a bribe under the Criminal Act or the Act on Combating Bribery of Foreign Public Officials in International Business Transactions, provided by a business operator; |
| 4-3. | Pay a business operator pays, in violation of Article 24(2) and (4) of the Trade Union and Labor Relations Adjustment Act; |
| 5. | Expenditure corresponding to subparagraphs 1 through 4, 4-2 and 4-3 which are determined by Decree of the Ministry of Finance and Economy. |
| Article 78-2 (Order to exclude paid interest from necessary expenses) |
| (1) | In applying Article 33(2) of the Act, if Articles 61, 75, 76 and 78 are concurrently applicable with respect to exclusion of paid interest from necessary expenses, orders under the following subparagraphs shall be observed: |
| 1. | Interest on loans, the creditor of which is obscure, under Article 76; |
| 2. | Interest on the amount of a loan, appropriated for construction funds under Article 75(1); |
| 3. | Paid interest computed under Article 61(1)2; |
| 4. | Paid interest computed under subparagraph 3 of Article 78. |
| (2) | In applying each subparagraph of paragraph (1), if there concurrently exist such interest as subject to mutually different interest rates, those subject to an application of higher interest rate shall be first excluded from appropriation to necessary expenses. |
[This Article Added on Dec. 29, 2000]
| Article 78-3 (Special cases concerning exclusion of expenses related to business-use passenger vehicles from necessary expenses) |
| (1) | "Those prescribed by Presidential Decree" in Article 33-2(1) of the Act means any passenger automobile falling under any of the following subparagraphs: <Amended on Dec. 30, 2025> |
| 1. | Passenger vehicles used directly for the type of business specified in any subparagraph of Article 19 of the Enforcement Decree of the Value-Added Tax Act or the facility leasing business defined in subparagraph 9 of Article 2 of the Specialized Credit Finance Business Act; |
| 2. | Passenger vehicles specified by Decree of the Ministry of Finance and Economy, similar to those specified in subparagraph 1. |
| (2) | "Expenses prescribed by Presidential Decree" in Article 33-2(1) of the Act, means expenses paid for acquiring and maintaining business-use passenger vehicles (hereafter in this Article, referred to as "expenses incurred in relation to business-use passenger vehicles"), including depreciation costs, rental charges, fuel expenses, insurance premiums, repair expenses, automobile tax, tolls, and interest expenses of finance lease liabilities for business-use passenger vehicles. |
| (3) | Notwithstanding Articles 63(1)2 and 64(1)2, the straight line method prescribed in subparagraph 2 of Article 66 shall be the depreciation method that a person liable to double-entry bookkeeping shall apply in calculating depreciation costs of business-use passenger vehicles, and the amount calculated for the useful life of five years shall be included, as depreciation cost, in necessary expenses. |
| (4) | "Amount of use for business purpose prescribed by Presidential Decree" in Article 33-2(1) of the Act means the amount falling under the following classifications: <Amended on Feb. 28, 2023; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Where motor vehicle insurance policies covering only the cases where persons prescribed by Decree of the Ministry of Finance and Economy, such as the relevant business operator and his or her employees, etc., (hereinafter referred to as "motor vehicle insurance policies only for business use") are purchased during the entire period of the relevant taxable period (in cases of a leased passenger vehicles, referring to the period of lease during the relevant taxable period): The amount calculated by multiplying expenses incurred in relation to business-use passenger vehicles by the ratio of business use mileage to the total mileage (hereafter referred to as "business use ratio" in this Article) verified by operation records, etc. prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "operation records, etc." in this Article) (hereafter referred to as the "amount according to the business use ratio" in this Article); |
| 2. | Where motor vehicle insurance policies only for business use are not purchased: The following amounts according to the number of business-use vehicles by business operator (in cases of joint business place, construed as one business operator): |
| a. | One vehicle: The amount according to the business use ratio; |
| b. | The excess of one vehicle: 0/100 of the amount according to the business use ratio; provided, it shall be 50/100 of the amount according to the business use ratio in cases of expenses in relation to business-use vehicles of a business operator other than any of the following business operators, which is incurred from January 1, 2024 to December 31, 2025: |
1) Business entities subject to confirmation of compliant filing under Article 70-2(1) of the Act (referring to the business entities subject to confirmation of compliant filing during the immediately preceding taxable period);
2) Persons engaged in medical services, veterinarian services, pharmaceutical services, and businesses defined in Article 109(2)7 of the Enforcement Decree of the Value-Added Tax Act.
| 3. | Where a taxpayer subscribes to business-use automobile insurance for only part of the entire taxable period (or, in the case of a leased passenger automobile, for only part of the period of lease during the relevant taxable period): The amounts under each of the following items: |
| a. | One vehicle: The amount according to the business use ratio; |
| b. | The portion exceeding one vehicle: The amount determined in accordance with the following classification: |
1) Expenses related to a business passenger vehicle under the proviso of subparagraph 2b: the amount calculated in accordance with the following formula:
┌────────────────────────┐
│ │
│ A + (A × B) │
│ ────────────│
│ 2 │
│ │
│ A: Amount of the business-use ratio │
│ B: Number of days on which business-use automobile insurance was actually subscribed to │
│ during the relevant taxable period ÷ number of days on which subscription to business-use automobile insurance │
│ was mandatory in order to qualify for the application of subparagraph 1 │
│ during the relevant taxable period │
└───────────────────────────┘
2) Expenses related to a business passenger vehicle other than those under 1): The amount calculated according to the following formula:
┌──────────────────────┐
│ │
│ A × B │
│ │
│ A: Amount of the business-use ratio │
│ B: Number of days on which business-use automobile insurance was actually subscribed to │
│ during the relevant taxable period ÷ number of days on which subscription to business-use automobile insurance │
│ was mandatory in order to qualify for the application of subparagraph 1 │
│ during the relevant taxable period │
└──────────────────────┘
| (5) | In applying paragraph (4), where a business operator enters into a lease agreement with respect to a leased passenger automobile prescribed by Decree of the Ministry of Finance and Economy, including a special clause limiting drivers to the relevant business operator, the employees thereof, or other persons prescribed by Decree of the Ministry of Finance and Economy, the business operator shall be deemed to have obtained business-use automobile insurance. <Amended on Feb. 27, 2026> |
| (6) | A business operator who wishes to be eligible for the application of paragraph (4) shall prepare and keep operation records, etc. for each business-use passenger vehicle and promptly submit them upon receipt of a request from the head of the tax office having jurisdiction over the place for tax payment. <Amended on Feb. 11, 2020> |
| (7) | If a business operator fails to prepare and keep operation records, etc., the business use ratio of the relevant business-use passenger vehicle shall be either of the following ratios, notwithstanding paragraph (4): <Amended on Feb. 13, 2018; Feb. 11, 2020> |
| 1. | Where expenses incurred in relation to the business-use passenger vehicle during the relevant taxable period do not exceed 15 million won (referring to the amount calculated by dividing by 12 the amount obtained by multiplying 15 million won by the number of months corresponding to the holding or leasing period, where the relevant taxable period is less than one year or such vehicle is held or leased only during a part of the relevant taxable period; hereinafter the same shall apply in this Article): 100/100; |
| 2. | Where expenses incurred in relation to the business-use passenger vehicle during the relevant taxable period exceed 15 million won: The ratio calculated by dividing 15 million won by expenses incurred in relation to the business-use passenger vehicle during the relevant taxable period. |
| (8) | "Method prescribed by Presidential Decree" in the main sentence of Article 33-2(2) of the Act, means either of the following methods by which the maximum amount calculated is carried over and included in necessary expenses: <Amended on Feb. 11, 2020> |
| 1. | The carried-over amount of depreciation cost of each business-use passenger vehicle: If the depreciation cost, out of the business use amount of the relevant business-use passenger vehicle for the taxable period following the relevant taxable period does not reach eight million won, such maximum amount of depreciation cost shall be recognized afterwards as necessary expenses; |
| 2. | The carried-over amount of the amount equivalent to depreciation cost under paragraph (9) out of rental charges of each business-use passenger vehicle: If the amount equivalent to depreciation cost, out of the business use amount of the relevant business-use passenger vehicle for the taxable period following the relevant taxable period does not reach eight million won, such maximum amount of depreciation cost shall be included in necessary expenses. |
| (9) | "Amount equivalent to the depreciation cost prescribed by Presidential Decree" in Article 33-2(2)2 of the Act, means the amount specified by Decree of the Ministry of Finance and Economy by excluding insurance premiums, automobile tax, etc. from rental charges for a business-use passenger vehicle. <Amended on Feb. 11, 2020; Dec. 30, 2025> |
| (10) | "Method prescribed by Presidential Decree" in Article 33-2(3) of the Act, means the method where eight million won is included in equal installments as necessary expenses for the taxable period following the relevant taxable period, but the balance is fully included in necessary expenses for the taxable period in which the remainder is less than eight million won. <Amended on Feb. 11, 2020> |
| (11) | A person liable to double-entry bookkeeping who includes expenses incurred in relation of a business-use passenger vehicle or losses on the disposition of a business-use passenger vehicle, shall submit a statement of expenses incurred in relation of the business-use passenger vehicle, etc. to the head of the tax office having jurisdiction over the place for tax payment in the form prescribed by Decree of the Ministry of Finance and Economy when the person files a return under Article 70 of the Act or submits a certificate of confirmation of compliant filing under Article 70-2 of the Act. <Amended on Feb. 11, 2020; Dec. 30, 2025> |
| (12) | In calculating the expenses, etc. incurred in relation to business-use passenger vehicles, if the relevant taxable period is less than one year or such vehicle is held or leased only during a part of the relevant taxable period, the number of months shall be calculated by calendar, and the number of days less than one month shall be treated as one month. <Added on Feb. 13, 2018; Feb. 11, 2020> |
| (13) | Except as otherwise expressly provided for in paragraphs (1) through (12), the scope of use for business purpose and other necessary matters shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 13, 2018; Feb. 11, 2020; Dec. 30, 2025> |
[This Article Added on Feb. 17, 2016]
| Article 79 (Scope of donations) |
| (1) | "Transactions prescribed by Presidential Decree" in Article 34(1) of the Act means either transferring the property at a price lower than arm's length price to a person who is not in special relations under Article 98(1), or purchasing it from him or her at a price higher than its normal price, without justifiable grounds. In such cases, the arm's length price shall be the value within the scope of 30/100 above or below of the market price. <Amended on Feb. 12, 2019> |
| (2) | Donations under Article 24(2)1a of the Corporate Tax Act shall include such value of money and goods donated again to the State or local governments by the recipient without delay after an individual has donated the property to a corporation or another individual. <Amended on Dec. 30, 2010; Feb. 12, 2019; Feb. 17, 2021> |
| (3) | Deleted. <Dec. 30, 2010> |
| (4) | In apply Article 34(5), the donation contributed during the relevant taxable period shall be included in necessary expenses after including the amount of donation that is contributed during the preceding taxable period but is carried over in the necessary expenses by separating the special donations under paragraph (2)1 of that Article from general donations under paragraph (3)1 of that Article within the scope of the permissible limit for necessary expenses specified in paragraph (2)2 and (3)2 of that Article. In such cases, the donations that are carried over shall be included in the necessary expenses in the sequence in which they were accrued. <Amended on Feb. 11, 2020; Feb. 17, 2021; Feb. 28, 2023> |
| (5) | When a business operator disburses donations specified in Article 34(2)1 and (3)1 of the Act, he or she shall submit a final return on tax base along with a detailed statement of donations determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office. <Amended on Apr. 1, 1998; Feb. 29, 2008; Feb. 15, 2013; Feb. 17, 2021; Dec. 30, 2025> |
| Article 79-2 Deleted. <Dec. 30, 2010> |
| Article 80 (Scope of donations determined in consideration of public interests) |
| (1) | "Donations prescribed by Presidential Decree" in Article 34(3)1 of the Act means the following donations: <Amended on Dec. 29, 2000; Dec. 31, 2001; Feb. 19, 2005; Feb. 22, 2008; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2010; Feb. 2, 2012; Mar. 23, 2013; Feb. 21, 2014; Nov. 19, 2014; Jul. 26, 2017; Feb. 12, 2019; Feb. 11, 2020; Feb. 17, 2021; Feb. 15, 2022; Sep. 6, 2023; Feb. 29, 2024; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Donations falling under each subparagraph of Article 39(1) of the Enforcement Decree of the Corporate Tax Act; |
| 2. | Any of the following membership fees: |
| a. | Union dues paid to unit labor union, etc. established pursuant to the Trade Union and Labor Relations Adjustment Act, the Act on the Establishment and Operation of Teachers' Trade Unions, or the Act on the Establishment and Operation of Public Officials‘ Trade Unions or an affiliated organization prescribed by the bylaws of the relevant unit trade union (hereafter referred to as "unit trade union, etc." in this Article) by a member of a unit trade union, etc. meeting all of the following requirements (hereafter in this Article, referred to as "union member"): |
1) The financial results of settlement of accounts of the unit labor union, etc. for the relevant taxable period (hereafter in this item referred to as the "financial results of settlement of accounts of the unit labor union, etc.") shall have been publicly announced in accordance with Article 11-9(2) through (5) of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act or Article 2 of the Addenda to the Partial Amendment to the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act by Presidential Decree No. 33758 (where a union member retires before the financial results of settlement of accounts of the unit labor union, etc. are publicly announced during the relevant taxable period, the financial results of settlement of accounts of the unit labor union, etc. shall have been publicly announced in the immediately preceding taxable period). In such cases, where the number of union members of the unit labor union, etc. is fewer than 1,000 as of the end date of the immediately preceding taxable period, the requirement under the former part of this subparagraph shall be deemed satisfied;
2) Where there is a labor union that is a federation or another unit labor union, etc. that has received a certain amount from a unit labor union, etc. under 1), financed with the union dues of such unit labor union, etc. in accordance with the constitution of the labor union, the financial results of settlement of accounts of such federation labor union and other unit labor union, etc. for the relevant taxable period (hereafter in this item referred to as the "financial results of settlement of accounts of the federation, etc.") shall have been publicly announced in accordance with Article 11-9(2) through (5) of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act or Article 2 of the Addenda to the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act, partially amended by Presidential Decree No. 33758 (where a union member retires before the financial results of settlement of accounts of the federation, etc. are publicly announced during the relevant taxable period, the financial results of settlement of accounts of the federation, etc. shall have been publicly announced in the immediately preceding taxable period). In such cases, where the number of union members of such other unit labor union, etc. that has received such amount is fewer than 1,000 as of the end date of the immediately preceding taxable period, the requirement under the former part of this subparagraph shall be deemed satisfied;
| b. | Membership fees paid by a person who has joined a teachers' organization under Article 15 of the Framework Act on Education; |
| c. | Membership fees paid by a person who has joined a public officials' council established under the Act on the Establishment and Operation of Public Officials' Councils; |
| d. | Deleted; <Sep. 26, 2023> |
| 3. | The amounts trusted in a trust meeting all the following requirements and established by a resident on condition that the trusted property of the trustor shall be donated to a public interest corporation, etc. under Article 16(1) of the Inheritance Tax and Gift Tax Act upon the trustor's death or the expiration of the term of the relevant trust contract: |
| a. | It shall be established by a resident on condition that the trusted property of the trustor shall be donated to public interest corporations, etc. under Article 16(1) of the Inheritance Tax and Gift Tax Act if the trustor dies or the period of the trust contract agreed ends before the death of the trustor; |
| b. | The terms and conditions shall expressly state that, after the establishment of the trust, the contract may not be terminated and no part of the principal may be refunded; |
| c. | The consignor and any person who has a familial relationship with the consignor as defined in Article 1-2(1) of the Enforcement Decree of the Framework Act on National Taxes (hereinafter referred to as "the consignor, etc." in this item) shall not have the following relationships with a public interest corporation, etc., specified in item a (limited to cases where the consignor, etc., owns or has invested 20% or more of the total number of issued shares or total capital contribution of the relevant public interest corporation, etc.): |
1) A relationship in which one of the consignors, etc. is the founder of a public interest corporation, etc.;
2) Relationship where the consignor holds a majority of the directors of a public interest corporation, etc.;
| d. | Trust shall be established in money; |
| 4. | Deleted; <Feb. 18, 2010> |
| 5. | Donations granted to non-profit organizations meeting all the following requirements and registered under the Assistance for Non-Profit, Non-Governmental Organizations Act and designated by the Minister of Finance and Economy upon recommendation by the Minister of the Interior and Safety (hereafter in this Article, referred to as "organizations for public interests"); provided, such donations granted to organizations for public interests shall be limited to donations granted during the period of three years (where an organization is re-designated within two years after the designated period expires, six years from January 1 of the taxable period in which the organization is re-designated) from January 1 of the taxable period in which an organization is designated: |
| a. | The articles of incorporation shall include a clause that the ownership of residual property upon dissolution shall vest in the State, a local government, or a nonprofit organization for similar objectives; |
| b. | The ratio of membership fees and donations from individuals to income shall exceed the ratio prescribed by Decree of the Ministry of Finance and Economy; in such cases, the following incomes shall be excluded from the income when calculating such ratio: |
1) Subsidies received from the State or a local government;
2) The amount supported by public interest corporations, etc. defined in Article 16(1) of the Inheritance Tax and Gift Tax Act;
| c. | Income specified in the articles of incorporation shall be used for public interest, rather than for the members’ interest, such as mutual friendship, and direct beneficiaries of a project shall be many, unspecified people; provided, it shall be deemed to meet the relevant requirements in cases falling under the proviso of Article 38(8)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act; |
| d. | Income, such as membership fees and donations, has been managed in a bankbook in the name of the non-profit organization for at least one year retrospectively from the end of the taxable period immediately prior to the taxable period intended for designation; |
| e. | Deleted; <Feb. 17, 2021> |
| f. | It shall fulfill all the following requirements in relation to the disclosure of the amount of donations and the use thereof; provided, where the matters specified in Article 50-3(1)2 of the Inheritance Tax and Gift Tax Act are disclosed according to the standard form specified in Article 43-5(4) of the Enforcement Decree of that Act, it shall be deemed to disclose the amount of donations and the use thereof: |
1) It shall have opened an Internet website as of the recommendation date of the Minister of the Interior and Safety;
2) The articles of incorporation shall include clauses that it shall have disclosed the annual amount of donations and the use thereof via its Internet website opened pursuant to subitem 1) and the Internet website of the National Tax Service by April 30 of every year;
3) In cases of re-designation, it shall have disclosed the amount of donations and the use thereof via its Internet website opened pursuant to subitem 1) and the Internet website of the National Tax Service by April 30 of every year;
| g. | There is no record confirmed that the organization for public interests was involved in the conduct of election campaigns specified in Article 58(1) of the Public Official Election Act, for a particular political party or individual under the name of the organization or its representative during the taxable period in which it intends to be designated or the immediately preceding taxable period; |
| 6. | Deleted. <Feb. 18, 2010> |
| (2) | Where any organization for public interests falls under any of the following cases, the Commissioner of the National Tax Service may request the Minister of Finance and Economy to revoke the designation of such organization after giving the organization an opportunity to present opinion thereon in advance; upon receipt of such request, the Minister of Finance and Economy may revoke the designation of the relevant organization for public interests: <Added on Feb. 28, 2007; Feb. 22, 2008; Feb. 29, 2008; Dec. 31, 2008; Feb. 18, 2010; Mar. 23, 2013; Feb. 21, 2014; Nov. 19, 2014; Jul. 26, 2017; Feb. 13, 2018; Feb. 17, 2021; Feb. 15, 2022; Jul. 23, 2024; Dec. 30, 2025> |
| 1. | Where the inheritance tax (including a penalty surcharge therefor) or gift tax (including a penalty surcharge therefor) of at least ten million won is collected from an organization for public interests pursuant to Article 48(2), (3), (8) through (11), Article 78(5)3 and Article 78(10) and (11) of the Inheritance Tax and Gift Tax Act; |
| 2. | Where the head of the competent administrative agency (including the Minister of the Interior and Safety) notifies the Commissioner of the National Tax Service of an act committed by an organization for public interests in violation of public purposes, such as business activities not for its objectives or a breach of a condition for permission for its establishment; |
| 3. | Where an organization for public interests falls under unfaithful donation-receiving organizations pursuant to Article 85-5 of the Framework Act on National Taxes and the list thereof is revealed; |
| 4. | Where an organization for public interests violates any requirement listed under paragraph (1)5 or any business actually operated by it does not meet the relevant requirement; |
| 5. | Where an organization for public interests is dissolved; |
| 6. | Where the representative, executives, and other employees of an organization for public interests violate the Act on Collection and Use of Donations and Promotion of Donation Culture and imprisonment with labor or a fine is finalized to the organization for public interests or individuals pursuant to Article 16 of that Act; |
| 7. | Where an organization for public interest fails to submit the statement of accounts or statement of incomes of the relevant taxable period, notwithstanding the requires made pursuant to the latter parts of paragraphs (3) and (5). |
| (3) | A public interest organization shall submit a statement of accounts of the relevant taxable period to the Minister of the Interior and Safety within 4 months from the end of the relevant taxable period. In such cases, if such public interest organization fails to submit it by the deadline, the Minister of the Interior and Safety shall require the public interest organization to submit the statement of accounts as prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 22, 2008; Dec. 31, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Feb. 17, 2021; Feb. 15, 2022; Feb. 29, 2024; Dec. 30, 2025> |
| (4) | When the Minister of the Interior and Safety has received a statement of accounts pursuant to paragraph (3), he or she may reveal the following matters: <Added on Feb. 22, 2008; Dec. 31, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017> |
| 1. | Ratio of membership fees and donations of individuals to total income; |
| 2. | Total amount and number of cases of donations and the detailed statement of use thereof. |
| (5) | An organization for public interest shall submit a statement of income in the form prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office within 4 months from the end of the relevant taxable period. In such cases, if such organization fails to submit it by the deadline, the head of the competent tax office shall require the organization to submit the statement of income as prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 22, 2008; Feb. 29, 2008; Feb. 3, 2015; Feb. 3, 2017; Feb. 17, 2021; Feb. 15, 2022; Feb. 29, 2024; Dec. 30, 2025> |
| (6) | An organization whose designation has been revoked under paragraph (2) may be re-designated after a lapse of three years from the date of revocation. <Added on Feb. 22, 2008; Feb. 21, 2014> |
| (7) | The Minister of Employment and Labor shall take the following measures by December 31 of each year after verifying whether the results of settlement of accounts under paragraph (1)2a1) and 2) have been published pursuant to Article 11-9(2) through (5) of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act or Article 2 of the Addenda to the partially amended Enforcement Decree of the Trade Union and Labor Relations Adjustment Act (Presidential Decree No. 33758): <Added on Sep. 26, 2023; Dec. 30, 2025> |
| 1. | To register the results of such verification in the publication system pursuant to Article 11-9(1) of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act so that union members and withholding agents can view the verification results; |
| 2. | To transmit the results of verification to the Commissioner of National Tax Service as prescribed by Decree of the Ministry of Finance and Economy. |
| (8) | Where a public interest organization is designated or such designation is revoked, the Commissioner of the National Tax Service shall notify the head of the central administrative agency or the local government that has accepted the registration of the relevant public interest organization of such fact; and where the relevant public interest organization engages in activities outside its intended purpose, violates the conditions of its establishment approval, or otherwise falls under any of the subparagraphs of paragraph (2), the head of the relevant central administrative agency or local government shall notify the Commissioner of the National Tax Service of such fact. <Added on Feb. 28, 2025> |
| (9) | The procedures for designating public interest organizations under paragraph (1)5, methods of verifying the requirements listed under the items of that paragraph, documents to submit, and matters necessary for the procedures for revoking the designation under paragraph (2) shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 22, 2008; Feb. 29, 2008; Feb. 17, 2021; Feb. 15, 2022; Sep. 26, 2023; Feb. 28, 2025; Dec. 30, 2025> |
[This Article Wholly Amended on Dec. 31, 1999]
[Title Amended on Feb. 17, 2021]
| Article 81 (Calculation of donations and business promotion expenses) |
| (1) | When a business operator makes deferred appropriation of donations under Article 34 of the Act as an advance, it shall be deemed a donation in the taxable period wherein it has been given. <Amended on Feb. 18, 2010> |
| (2) | When a business operator has appropriated a donation under Article 34 of the Act as an unpaid amount, such donation shall not be included in necessary expenses until it is actually paid. |
| (3) | Where a business operator offers any asset, other than money, as a donation or business promotion expenses under Article 34 or 35 of the Act, the valuation of such asset shall be based on its market price (or its book value if the market price is lower than the book value) at the time it is offered; provided, the value of a donation made to a national museum or a national art gallery, as defined in the Museum and Art Gallery Support Act, shall be determined by the committee established as an organ of the Ministry of Culture, Sports and Tourism for appraising donated artifacts. <Amended on Feb. 28, 2007; Dec. 30, 2010; Feb. 21, 2014; Feb. 12, 2019; Feb, 11, 2020; Feb. 28, 2023> |
| (4) | Where a business operator has made a donation under Article 34 of the Act and a donation under Articles 58, 76, or 88-4(13) of the Restriction of Special Taxation Act, he or she shall include the relevant donations in necessary expenses in order within the limit of the amount by the following classifications: <Added on Dec. 31, 2001; Dec. 30, 2003; Feb. 19, 2005; Feb. 22, 2008; Feb. 4, 2009; Feb. 18, 2010; Dec. 30, 2010; Feb. 15, 2013; Feb. 12, 2019; Feb. 17, 2021; Feb. 28, 2023; Feb. 29, 2024> |
| 1. | To register the results of such verification in the publication system pursuant to Article 11(9)(1) of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act so that union members and withholding agents can view the verification results: |
┌───────────────────────────────────┐
│ The income amount for the relevant tax period (referring to the income amount before including donations in necessary expenses, │
│ hereafter the same shall apply in this paragraph) - the carryforward losses │
│ (referring to the total amount of carryforward losses pursuant to Article 45(3) of the Act; hereafter the same shall apply in this paragraph) │
└───────────────────────────────────┘
| 2. | Deleted; <Dec. 30, 2010> |
| 2-2. | In cases of donations under Article 88-4(13) of the Restriction of Special Taxation Act (hereafter referred to as "donations of an employee stock ownership association" in this paragraph), the amount calculated by the following formula:(The amount of income in the relevant taxable period － Loss carried forward － Political funds donations － Special donation under Article 34(2)1 of the Act) × 30/100 |
┌──────────────────────────────┐
│ (The amount of income in the relevant taxable period － Loss carried forward － │
│ Political funds donations － Special donation under Article 34(2)1 of the Act) × 30/100 │
└──────────────────────────────┘
| 3. | In cases of general donations under Article 34(3)1 of the Act (hereafter referred to as "general donations" in this paragraph), the amount calculated by a formula under item a or b. In such cases, where the total amount of losses carried forward, political funds donations, hometown contribution fund, special donations, and donations to an employee stock ownership association (hereafter referred to as "total amount of donations, etc." in this subparagraph) is deducted from income for the relevant taxable period, the deduction shall be made in the order of losses carried forward, political funds donations, hometown contribution fund, special donations, and donations to an employee stock ownership association: |
| a. | Where there is an amount donated to a religious organization: |
┌──────────────────────────────────┐
│ (The amount of income in the relevant taxable period - The total amount of donations, etc.) × 10/100 │
│ + [The smaller of (Income in the relevant taxable period - The total amount of donations, etc.) × 20/100, │
│ or the amount paid to organizations, other than religious organizations] │
└──────────────────────────────────┘
| b. | Cases other than those falling under item a: |
┌───────────────────────────┐
│ (Income in the relevant taxable period - The total amount of donations, etc.) × 30/100 │
└───────────────────────────┘
| (5) | The value of voluntary services under Article 34(2)1b of the Act (hereinafter referred to as "voluntary services") shall be the total of the amounts specified in the following subparagraphs: <Added on Dec. 30, 2003; Feb. 18, 2010; Dec. 30, 2010; Feb. 12, 2019; Feb. 17, 2021; Feb. 29, 2024> |
| 1. | The amount obtained by multiplying 80 thousand won to the number of service days calculated by the following formula (the portion below the decimal point shall be calculated by regarding it as one day). In such cases, in cases of a private business operator, it shall be limited to the portion of his or her own services: |
┌───────────────┐
│ Number of service days = │
│ Total service hours ÷ 8 hours │
└───────────────┘
| 2. | In cases of direct expenses, such as fuel expenses (excluding fuel expenses for moving to a place where volunteer services are provided) and material expenses incurred incidental to volunteer services, the market price or book value at the time of providing relevant services; |
| (6) | In applying Article 34(2)1b of the Act, the relevant voluntary service (including the voluntary service rendered in the same area before a special disaster area is declared) shall be confirmed by issuing a written confirmation of donation prescribed by Decree of the Ministry of Finance and Economy by the head of a local government of a special disaster area (including the head of an organization delegated by the head of the relevant local government or the head of the voluntary service center established in the relevant local government). <Amended on Feb. 18, 2010; Dec. 30, 2010; Feb. 15, 2013; Feb. 12, 2019; Feb. 17, 2021; Dec. 30, 2025> |
| (7) | Where a person entitled to the legal reserve of inheritance claims a return of his or her trust property under Article 1115 of the Civil Act and receives such trust property after the death of the trustor who added donations under Article 80(1)3 to the necessary expenses or had tax credits for such donations, the head of the tax office having jurisdiction over the domicile of the person entitled to the legal reserve shall collect the amount determined by multiplying the amount specified in subparagraph 1 by the relevant rate specified in subparagraph 2 from the person entitled to the legal reserve: <Amended on Dec. 30, 2010; Feb. 21, 2014> |
| 1. | The amount of income tax equivalent to the amount that the relevant resident added donations to the necessary expenses or had tax credits for the donations, before a person entitled to the legal reserve of inheritance has the legal reserve returned, for a taxable period during the period in which he or she was eligible for the exclusion from national taxes under Article 26-2 of the Framework Act on National Taxes; |
| 2. | The amount redeemed by a person entitled to legal reserve/the amount of trusted properties as at the time of redemption of legal reserve by a person entitled to the legal reserve. |
[Title Amended on Feb. 28, 2023]
| Article 82 Deleted. <Dec. 31, 1998> |
| Article 83 (Scope of business promotion expenses) |
| (1) | "Expense prescribed by Presidential Decree" in Article 35(1) of the Act means expenses disbursed to a corporation where the relevant association or organization is such corporation, but, otherwise, shall be deemed expenses in relation to assets owned by the business operator. <Amended on Feb. 18, 2010; Feb. 12, 2019> |
| (2) | "Amount prescribed by Presidential Decree" in the main sentence of Article 35(2), with the exception of its subparagraphs, of the Act means the amount classified as follows: <Added on Dec. 31, 1998; Feb. 9, 2006; Feb. 28, 2007; Feb. 4, 2009; Feb. 18, 2010; Feb. 12, 2019; Feb. 17, 2021> |
| 1. | In case of money for congratulations and condolences: 200,000 won; |
| 2. | In cases other than specified in subparagraph 1: 30,000 won. |
| (3) | "Disbursement prescribed by Presidential Decree" in the proviso to Article 35(2), with the exception of its subparagraphs, of the Act means any of the expenditures as follows: Presidential on Feb. 12, 2019 <Added on Feb. 12, 2019; Feb. 28, 2023> |
| 1. | Disbursement of business promotion expenses in a foreign region where it is difficult to secure evidentiary materials under subparagraphs of Article 35(2) of the Act due to non-receipt of means of payment other than cash at any place of such foreign region (including a similar place in a region neighboring the foreign region where the former place is located); |
| 2. | Disbursement in case of being directly supplied with goods from a farmer or fisher (referring to a person engaged in growing of crops, raising of animals, and mixed farming among agriculture, and fishing and aquaculture, under the Korean Standard Industrial Classification, and excluding corporations), which is made for such goods through a financial company, etc. under subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (limited to cases where when filing a final return on the tax base of global income under Article 70 of the Act, the business operator files such return with the head of a tax office having jurisdiction over the place for tax payment, along with a statement of remittance specifying the fact of remittance). |
| (4) | "Those prescribed by Presidential Decree" in Article 35(2)1a means any one of the following: <Added on Feb. 12, 2019> |
| 1. | A debit card under the Specialized Credit Finance Business Act; |
| 2. | A credit card issued in a foreign country; |
| 3. | A registered prepaid card, an electronic debit payment instrument, an electronic prepaid instrument, a registered electronic prepaid instrument, or a registered electronic cash under Article 126-2(1)4 of the Restriction of Special Taxation Act. |
| (5) | "Withholding tax receipt prescribed by Presidential Decree" in Article 35(2)4 of the Act means a withholding tax receipt issued pursuant to Article 144 or 145 of the Act in return for being provided with services from a person who fails to be registered as a business operator pursuant to Article 168 of the Act. <Added on Feb. 12, 2019> |
| (6) | Deleted. <Feb. 11, 2020> |
| (7) | Deleted. <Feb. 11, 2020> |
| (8) | "Amount of income prescribed by Presidential Decree" in the main sentence of Article 35(3)2, with the exception of its table, of the Act means the amount of sale calculated according to the Korea Financial Accounting Standards. <Added on Feb. 12, 2019> |
| (9) | "Related person prescribed by Presidential Decree" in the proviso to Article 35(3)2, with the exception of its table, of the Act means a related person under Article 98(1). <Added on Feb. 12, 2019> |
[Title Amended on Feb. 28, 2023]
| Article 84 Deleted. <Feb. 12, 2019> |
| Article 85 (Calculation of maximum limit of business promotion expenses for business operators with at least two places of business) |
| (1) | Where a business operator with at least two places of business has kept books of account and records in a manner that details of transactions can be distinguished by each place of business pursuant to Article 160(5) of the Act, the business promotion expenses paid by each place of business during the relevant taxable period, which are eligible for inclusion in necessary expenses when the amount of revenue by each place of business is calculated, shall be limited to the aggregate of amounts calculated under each of the following (hereafter in this Article, referred to as "maximum limit of business promotion expenses"): <Amended on Dec. 30, 2010; Feb. 12, 2019; Feb. 28, 2023> |
| 1. | Amount calculated by the following formula |
┌──────────────────────────────┐
│ Amount under Article 35(3)1 of the Act x │
│ (Amount of revenue of each place of business for the relevant taxable period / │
│ ─────────────────│
│ Aggregate of amount of revenue of each place of business │
│ for the relevant taxable period) │
└──────────────────────────────┘
| 2. | Amount of revenue of each place of business for the relevant taxable period × Applicable rate under Article 35(3)2 of the Act (hereafter referred to as "applicable rate" in this Article). |
| (2) | In applying paragraph (1)1, where any place of business exists wherein a business is newly commenced or is discontinued in the middle of the relevant taxable period, from among at least two places of business, the amount under Article 35(3)1 of the Act shall be calculated on the basis of the number of months of the place of business, whose number of business months for the relevant taxable period is greatest, but whether or not falling under small or medium enterprises shall be determined by its principal business type (referring to the business type having the largest amount of revenue). <Amended on Feb. 12, 2019> |
| (3) | In applying paragraph (1)2, the applicable rate shall be decided by the aggregate of amount of revenue of each place of business for the relevant taxable period, and where the aggregate of amount of revenue of each place of business exceeds ten billion won, the priority order of the applicable rate may be selected at will by each place of business. |
| (4) | In applying paragraph (1), where the business promotion expenses incurred by each place of business in at least two places of business do not reach a maximum amount of business promotion expenses and exceed such limit, respectively, the amount of shortfall and excess shall not be aggregated. <Amended on Dec. 30, 2010; Feb. 28, 2023> |
| (5) | Where a decision on estimation investigation or a revision has been made on the amount of revenue of a part of at least two places of business, the place of business subject to the decision on estimation investigation or the revision shall be deemed to have no revenue amount in applying Article 35(3)2 of the Act and paragraph (1) of this Article. <Amended on Dec. 30, 2010; Feb. 12, 2019> |
| (6) | Where any amount of revenue exists accrued from a transaction with a person in special relations under Article 98(1) (hereafter referred to as "revenue amount related to special relations" in this paragraph), the amount under paragraph (1)2 shall be calculated by the following formula: <Amended on Feb. 2, 2012; Feb. 3, 2017> |
┌─────────────────────────────────────────┐
│ [(Gross revenue amount × Applicable rate) - (Revenue amount related to special relations) x Applicable rate] + │
│ [(Revenue amount related to special relations × Applicable rate) x 10/100] │
└─────────────────────────────────────────┘
[This Article Added on Dec. 30, 2002]
[Title Amended on Feb. 28, 2023]
| Article 86 Deleted. <Dec. 31, 1998> |
| Article 87 (Calculation of necessary expenses for other income) |
"Where prescribed by President Decree, such as computation, etc. of necessary expenses of money and valuables received in compensation for transfer of rights to mining " in Article 37(2)2 of the Act means the following cases: <Amended on Nov. 5, 2013; Feb. 17, 2016; Feb. 13, 2018; Feb. 13, 2018; Feb. 12, 2019; Feb. 11, 2020; Feb. 17, 2021; Feb. 27, 2026>
| 1. | In cases of any of the following other income, an amount equivalent to 80/100 of an amount received by a resident shall be necessary expenses; provided, if necessary expenses actually involved exceed an amount equivalent to 80/100, such excess shall be also included in necessary expenses: |
| a. | Among other income under Article 21(1)1 of the Act, prize and supplementary prize awarded by a public interest corporation governed by the Act on the Establishment and Operation of Public Interest Corporations, with authorization from the competent administrative authority, and prize and supplementary prize received by a winner at a contest where a multiple number of persons compete with each other; |
| b. | Deleted; <Feb. 13, 2018> |
| c. | Damages for delay in moving into a house, among compensation for breach of contract and damages under Article 21(1)10 of the Act; |
| d. | Deleted; <Feb. 17, 2016> |
| 1-2. | For other income under Article 21(1)7, 8-2, 9, 15, and 19 of the Act, an amount equivalent to 60/100 of the amount received by a resident shall be deemed necessary expenses; provided, where the actual necessary expenses incurred exceed an amount equivalent to 60/100 of the amount received by the resident, such excess amount shall also be included in necessary expenses; |
| 2. | In cases of other income under Article 21(2) of the Act, the amount calculated according to the following classifications shall be necessary expenses; provided, if necessary expenses actually incurred exceed the amount calculated according to the following classifications, such excess shall also be included in necessary expenses: |
| a. | Where an amount received by a resident is less than 100 million won: 90/100 of the amount received; |
| b. | Where an amount received by a resident is not less than 100 million won: 90 million won + 80/100 of the amount calculated by subtracting 100 million won from the amount received by the resident; |
| 3. | With regard to a religious person's income under Article 21(1)26 of the Act (hereinafter referred to as "religious person's income"), the amount calculated as follows, out of the amount that the religion-related worker received during the relevant taxable period (excluding non-taxable income under subparagraph 5h of Article 12 of the Act; hereafter the same shall apply in this subparagraph), shall be necessary expenses; provided, if necessary expenses actually incurred exceed the relevant amount in the following table, such excess shall be also included in necessary expenses |
┌────────────┬───────────────────────┐
│ Amount Received by │ Necessary Expenses │
│ a Religion-Related Worker │ │
├─────────┼────────────────────┤
│ Not exceeding 20 million won │ 80/100 of amount received by a religion-related worker │
├─────────┼────────────────────┤
│ More than 20 million won │ 16 million won + │
│ but not exceeding 40 million won │ (50/100 of amount exceeding 20 million won) │
├─────────┼────────────────────┤
│ More than 40 million won │ 26 million won + │
│ but not exceeding 60 million won │ + (30/100 of amount exceeding 40 million won) │
├─────────┼────────────────────┤
│ Exceeding 60 million won │ 32 million won + 20/100 of the amount exceeding 60 million won │
│ │
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[This Article Wholly Amended on Dec. 30, 2010]
| Article 88 (Calculation of amount of other income of virtual assets) |
| (1) | Pursuant to Article 37 of the Act, in calculating the amount of other income from income arising from the transfer of virtual assets under Article 21(1)27 of the Act (hereafter referred to as "virtual assets"), the total average method under Article 92(2)4 shall apply to each resident. <Amended on Feb. 28, 2025> |
| (2) | "Market price as of December 31, 2026" in Article 37(5) of the Act shall be the amount falling under the following classifications: <Amended on Dec. 31, 2022; Dec. 31, 2024; Feb. 28, 2025> |
| 1. | In the case of virtual assets handled by business operators publicly notified by the Commissioner of the National Tax Service (hereafter referred to as "virtual asset business operators whose market prices are publicly notified") among virtual asset business operators under the Act on the Protection of Virtual Asset Users (hereafter referred to as "virtual asset business operators"): The average of the prices of each virtual asset disclosed by such virtual asset business operators whose market prices are publicly notified at their places of business as of 00:00 on January 1, 2027; |
| 2. | In cases other than subparagraph 1: The price of virtual assets publicly notified for each virtual asset as of January 1, 2027 at 0:00 am at the places of business of virtual asset service providers other than virtual asset service providers whose market price is publicly notified. |
| (3) | When calculating the amount of other income generated from exchange among virtual assets (hereafter in this paragraph, referred to as "exchange transaction"), such amount shall be calculated by applying an exchange rate between virtual assets subject to exchange transactions and base virtual assets (referring to the virtual asset that is to be the standard of exchange value when making an exchange transaction; hereafter in this paragraph, the same shall apply) to the value of base virtual assets falling under the following classifications: |
| 1. | In cases of base virtual assets traded through virtual asset service providers whose market price is publicly notified: The value of base virtual assets exchanged for money at the same point of time as the exchange transaction is made; |
| 2. | In cases of base virtual assets linked to foreign currencies under the Foreign Exchange Transactions Act: The value converted according to the basic exchange rate or arbitrated rate of exchange under Article 5(1) of that Act as of the date of exchange transaction. |
| (4) | "Extenuating circumstances prescribed by Presidential Decree" in the former part of Article 37(6) of the Act means any of the following cases: <Added on Feb. 28, 2025> |
| 1. | Where virtual assets are acquired without going through a virtual asset business operator, and the actual acquisition value cannot be verified by books or other evidentiary documents; |
| 2. | In other cases where it is difficult to verify the actual acquisition value for reasons determined and publicly notified by the Commissioner of the National Tax Service. |
| (5) | "The rate prescribed by Presidential Decree" in the former part of Article 37(6) of the Act means 50/100. <Added on Feb. 28, 2025> |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for calculating the amount of other income from virtual assets shall be determined and publicly notified by the Commissioner of the National Tax Service. <Amended on Feb. 28, 2025> |
[This Article Added on Mar. 8, 2022]
| Article 89 (Acquisition value of assets, etc.) |
| (1) | The acquisition value of assets under Article 39(2) of the Act shall be determined as follows: <Amended Dec. 31, 1998; Dec. 29, 2000; Feb. 29, 2008; Feb. 3, 2015; Dec. 30, 2025> |
| 1. | In cases of assets purchased from another person, the amount obtained by adding acquisition tax, registration and license tax, and other incidental expenses to the acquisition value; |
| 2. | In cases of assets acquired by one's own manufacturing, production, construction, etc., the aggregate of the cost of raw materials, labor expenses, freight, stevedoring expenses, insurance premium, commission, public charges (including acquisition tax and registration and license tax), installation expenses, and other incidental expenses; |
| 3. | In cases of assets falling under subparagraph 1 or 2 whose acquisition price is obscure, and assets, other than those falling under subparagraph 1 or 2, such amount obtained by adding acquisition tax, registration and license tax, and other incidental expenses to the market price at the time of acquisition prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | The acquisition value prescribed in paragraph (1) shall not include any of the following amounts: <Amended on Apr. 1, 1998; Dec. 31, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Where a business operator has evaluated, according to the corporate accounting standards, the debt brought about by a purchase of asset on a long-term installation basis, and appropriated it as the discounted debt estimated by the present value, the relevant discounted debt estimated based on its present value; |
| 2. | In cases of the yearly paid income determined by Decree of the Ministry of Finance and Economy, the amount appropriated as the paid interest, by separating it from the acquisition value under paragraph (1); |
| 3. | The amount in excess of the market value under Article 98(2)1. |
| (3) | In applying paragraph (1), where any of the following grounds arises, the acquisition value shall be the amount provided for in the relevant subparagraph: <Amended on Feb. 27, 2026> |
| 1. | Where a revaluation is made under the Assets Revaluation Act: The revalued amount; |
| 2. | Where there is an amount equivalent to capital expenditures: The amount obtained by adding such amount; |
| 3. | Where grounds falling under any of the subparagraphs of Article 72(5) of the Enforcement Decree of the Corporate Tax Act arise: The amount calculated in accordance with the relevant subparagraph. |
| (4) | The amount of deemed input tax deducted under Article 42 of the Value-Added Tax Act and the amount of input tax deducted under Article 108(1) of the Restriction of Special Taxation Act shall be deducted from the purchase price of the relevant raw material. <Amended Dec. 31, 1998; Feb. 19, 2005; Jun. 28, 2013> |
| (5) | Articles 127, 156, 164, and 164-2 of the Act shall not apply to the amount of depreciation of discounted debts estimated by present value under paragraph (2)1 and the paid interest under paragraph (2)2. <Added on Dec. 31, 1998; Feb. 21, 2014> |
| Article 90 Deleted. <Dec. 31, 1998> |
| Article 91 (Valuation methods of inventory assets) |
| (1) | In applying Article 39 of the Act, the valuation methods of inventory assets (excluding securities) shall be any of the following subparagraphs: |
| 2. | Lower of cost or market method. |
| (2) | In valuation by cost method under paragraph (1)1, it shall be governed by a valuation method falling under any of the following subparagraphs: <Amended Dec. 31, 1998> |
| 1. | Specific identification method; |
| 2. | First-In, First-Out (FIFO) method; |
| 3. | Last-In, First-Out (LIFO) method; |
| 4. | Weighted average method; |
| 5. | Moving average method; |
| (3) | Where inventory assets are appraised pursuant to paragraphs (1) and (2), the relevant assets may be appraised respectively by different methods by each kind and place of business according to the classification referred to in the following subparagraphs: <Amended on Feb. 18, 2010> |
| 1. | Manufactured goods and merchandise (including a business operator who conducts building construction business or real estate development and supply business); |
| 2. | Half-finished goods and work in progress; |
| (4) | Deleted. <Feb. 18, 2010> |
| Article 92 (Definitions of valuation methods of inventory assets) |
| (1) | The definitions of the terms used in Article 91(1) shall be as follows: <Amended on Apr. 1, 1998; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| 1. | "Cost method" means the method of using the acquisition value of inventory assets as the assessed amount of such assets under the method falling under each subparagraph of Article 91(2); |
| 2. | "Lower of cost or market method" means the method of using the lower value between the appraised value of inventory assets by cost method or by fair market value method prescribed by Decree of the Ministry of Finance and Economy as the appraised value of inventory assets as of the expiration date of such taxable period. |
| (2) | The definitions of the terms used in Article 91(2) shall be as follows: <Amended Dec. 31, 1998; Feb. 18, 2010> |
| 1. | "Specific identification method" means the method of using the amount computed respectively according to an acquisition value of each inventory asset as the assessment value of the relevant asset; |
| 2. | "First-In, First-Out (FIFO) method" means the method of valuation of inventory assets as of the end of the relevant taxable period, deeming that the first asset purchased has been successively taken out of inventory; |
| 3. | "Last-In, First-Out (LIFO) method" means the method of valuation of inventory assets as of the end of the relevant taxable period, deeming that the last asset purchased has been successively taken out of inventory; |
| 4. | "Weighted average method" means the method of valuation of inventory assets as of the end of the relevant taxable period according to the average unit price, which is obtained by dividing the total amount of the aggregate of the acquisition value of inventory assets as of the commencement date of the relevant taxable period, and of the aggregate of the acquisition value of assets acquired in the relevant taxable period, by the total quantity of such assets by each kind and item of inventory assets; |
| 5. | "Moving average method" means the method of valuation of inventory assets as of the end of the relevant taxable period according to the average unit price computed in the end, after computing the average unit price by the method of dividing the book amount on hand by the book quantity on hand upon each acquisition of assets; |
| 6. | "Gross profit method" means the method of valuation of inventory assets as of the end of the relevant taxable period according to the amount computed by deducting the estimated margin at the end of the relevant taxable period from the estimated sale prices of each kind of inventory assets as of the end of the relevant taxable period. |
| Article 93 (Methods of valuation of securities purchased for trade or short-term investment) |
| (1) | "Securities prescribed by Presidential Decree" in the proviso to Article 39(3) of the Act means securities purchased for trading or short-term investment (including securities deposited in an exchange by an investment trader or an investment broker under the Financial Investment Services and Capital Markets Act). |
| (2) | Methods of valuation of securities under paragraph (1) shall be the method reported by each business operator, from among the following methods: |
| 1. | Specific identification method (limited to bonds); |
| 2. | Weighted average method; |
| 3. | Moving average method. |
[This Article Wholly Amended on Feb. 12, 2019]
| Article 94 (Reports on method of valuation of inventory assets, etc.) |
| (1) | A business operator shall report (including report by means of the Home Tax Service) the valuation method of inventory assets and securities under Articles 91 and 93 (hereinafter referred to as "valuation method of inventory assets, etc.") by the deadline for final return on the tax base of the taxable period in which the date of commencing the relevant business arrives, in a return form on the valuation method of inventory assets, etc., prescribed by Decree of the Ministry of Finance and Economy, to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Dec. 30, 2025> |
| (2) | Where any person who has reported the valuation method of inventory assets, etc., intends to alter such method, he or she shall submit a report of change of the valuation method of inventory assets, etc., prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment by the date three months before the expiration date of the first taxable period to be governed by the valuation method to be changed. <Amended on Dec. 30, 2025> |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 95 (Valuation method when report on valuation method of inventory assets, etc. not made) |
| (1) | The head of the competent tax office having jurisdiction over the place for tax payment shall, where falling under any of the following subparagraphs, valuate inventory assets and securities purchased for the trade or short-term investment by the First-In, First-Out (FIFO) method under Article 91(2)2 (the gross average method in cases of securities; the valuation by specific identification method in cases of the real estate owned for trade); provided, in cases where the valuation is made by a method other than the reported valuation method or it falls under subparagraph 2, if the value by the reported valuation method is larger than the value by the First-In, First-Out (FIFO) method, it shall be governed by the reported valuation method: |
| 1. | When the valuation method of inventory assets, etc. has not been reported within the term under Article 94(1), or when it has not been governed by the reported valuation method; |
| 2. | When the valuation method has been changed without reporting the change in the valuation method of inventory assets, etc. within the term under Article 94(2). |
| (2) | In cases where the valuation method of inventory assets, etc. is reported after the deadline specified in Article 94(1) and (2), paragraph (1) shall apply mutatis mutandis to the portion of the taxable period in which the date of such report falls, and the reported valuation method shall be applied to the portion of the taxable period thereafter. <Amended on Feb. 18, 2010> |
| Article 96 (Valuation loss of inventory assets) |
| (1) | "Method prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 39(4) of the Act means the method that reduces the book value of assets pursuant to the subparagraphs of the same paragraph to the value disposable as of the end of the taxable period in which a reason for such reduction has arisen, and appropriates such reduced amount for necessary expenses. |
| (2) | "Reasons prescribed by Presidential Decree" in Article 39(4)2 of the Act means cases falling under any of the following subparagraphs: |
| 2. | Expropriation, etc. under Acts and subordinate statutes; |
| 3. | The closure of a mine because it can no longer be operated. |
| (3) | Damage or destruction pursuant to Article 39(4)2 of the Act shall include cases where the relevant tangible assets cannot be used for their inherent purpose. <Amended on Feb. 11, 2020> |
[This Article Added on Feb. 18, 2010]
[Title Amended on Feb. 11, 2020]
| Article 97 (Profits and losses from redemption of assets and debts in foreign currency) |
| (1) | In applying Article 39, a profit or loss from the difference between the book value of foreign assets or liabilities in Korean won, which is redeemed by or to a business operator at the time of their acquisition or borrowing, and the amount in Korean won to be redeemed by or to a business operator, shall be included in the total income or necessary expenses for the taxable period in which the date of such redemption arrives. |
| (2) | Any business operator who has increased or reduced the book value by appraising assets or debts in foreign currency shall attach a detailed statement of adjustment prescribed by Decree of the Ministry of Finance and Economy to a final return on the tax base. <Amended on Dec. 30, 2025> |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 98 (Disaffirmation of calculation by wrongful acts) |
| (1) | "Related persons" in Articles 41 and 101 of the Act means the persons in relation under Article 1-2(1), (2) or (3)1 of the Enforcement Decree of the Framework Act on National Taxes. <Amended Feb. 2, 2012> |
| (2) | Cases deemed that a tax burden has been reduced unreasonably in Article 41 of the Act shall be any of the following cases; provided, subparagraphs 1 through 3 and 5 (only applicable to acts similar to subparagraphs 1 through 3) shall apply only to cases where the difference between the market price and the trade value is at least 300 million won, or more than the amount equivalent to 5/100 of the market price: <Amended on Feb. 18, 2010; Feb. 2, 2012> |
| 1. | Where a person purchases assets from a related person at the price higher than the market price or transfers assets to a related person at the price lower than the market price; |
| 2. | Where a person lends or provides money, other assets or services free of charge or at the low interest rate, etc., to a related person; provided, cases where he or she allows his or her lineal ascendant or descendant to use a house gratuitously and his or her lineal ascendant or descendant actually lives in the house shall be excluded; |
| 3. | Where a person borrows or receives money or other assets or services at the high interest rate, etc., from a related person; |
| 4. | Where a person purchases non-profit assets from his or her related person, and bears the expense for such assets; |
| 5. | Where a person is deemed to have reduced a tax burden unreasonably in the calculation of his or her total income or necessary expenses in the relevant taxable period on account of transactions with his or her related person. |
| (3) | Article 89(1) and (2) of the Enforcement Decree of the Corporate Tax Act shall apply mutatis mutandis to a calculation of the market price under paragraph (2)1. <Added on Dec. 31, 1998; Feb. 19, 2005> |
| (4) | Article 89(3) through (5) of the Enforcement Decree of the Corporate Tax Act shall apply mutatis mutandis to a calculation of the amount of income under paragraph (2)2 through 5. <Added on Dec. 31, 1998; Feb. 19, 2005> |
| Article 99 (Special cases concerning calculation of amount of income on trade with nonresident) |
`Article 21 of the Enforcement Decree of the Adjustment of International Taxes Act shall apply mutatis mutandis to the application procedure for the adjustment of the amount of income under Article 42 of the Act. <Amended on Feb. 19, 2005; Feb. 17, 2021>
[This Article Wholly Amended on Dec. 30, 1995]
| Article 100 (Cumulative taxation for joint business) |
| (1) | "Joint investment business operators prescribed by Presidential Decree" in Article 43(1) of the Act means a person who does not fall under any of the following and who does not participate in the management of the joint business, but merely makes an investment therein: <Added on Feb. 28, 2007; Feb. 18, 2010> |
| 1. | A person who allows the joint business to use his or her name or trade name; |
| 2. | A person who agrees to assume unlimited liability for the obligations incurred in the joint business. |
| (2) | "Related person prescribed by Presidential Decree" in Article 43(3) of the Act means persons who are related to one resident as prescribed in Article 1-2(1) through (3) of the Enforcement Decree of the Framework Act on National Taxes and make their living with him or her. <Amended on Feb. 18, 2010; Feb. 2, 2012> |
| (3) | The conditions as of the end of the relevant taxable period shall govern whether one corresponds to a person in special relations under paragraph (2). <Amended on Feb. 28, 2007; Feb. 2, 2012> |
| (4) | "Reasons prescribed by Presidential Decree, such as determining the ratio of profit-loss distribution falsely, etc." in Article 43(3) of the Act means any of the following cases: <Added on Feb. 19, 2005; Feb. 28, 2007; Feb. 18, 2010; Jan. 5, 2021> |
| 1. | Where the written report and the attached documents submitted by a joint business operator under Articles 43(2) of the Act (hereinafter referred to as "joint business operator") in accordance with Article 70(4) of the Act, stating the type of business, details of revenue amount, equity ratio, agreed allocation ratio of profit and loss and relations among joint business operators, etc., are remarkably different from the facts; |
| 2. | Where it is verified that joint business operators conduct the business for avoiding taxes, considering the management participation, business relations, ratio of profit and loss and the financial status, etc., such as assets and debts. |
| (5) | "Person prescribed by Presidential Decree" in Article 43(3) of the Act means persons according to order referred to in the following: <Added on Feb. 28, 2007; Feb. 18, 2010> |
| 1. | A person whose gross income, except income from joint business, is greater; |
| 2. | A person whose gross income during the preceding taxable period is greater in cases where the amount of gross income except the income from the joint business is the same; |
| 3. | A person who has filed a tax return on the tax base of gross income from the relevant business in cases where the amount of gross income during the preceding taxable period is the same; provided, the head of the competent tax office having jurisdiction over the place for tax payment shall designate a person in cases where all joint business operators filed or did not file a tax return on the tax base of gross income from the relevant business. |
[Title Amended on Feb. 28, 2007]
| Article 100-2 (Succession of pension account) |
| (1) | Where an heir succeeds a pension account pursuant to Article 44(2) of the Act, he or she shall be deemed to have subscribed to the pension account on the date he or she succeeds the income amount in the pension account concerned; provided, the date of subscription to the pension account under Article 40-2(3)2 shall be deemed the date of subscription by the deceased. |
| (2) | An heir who intends to succeed to a pension account pursuant to Article 44(2) of the Act shall file his or her application for succession with the pension account administrator within six months from the last day of the month to which the date of the deceased’s death belongs. In such cases, the heir shall be deemed to have succeeded the pension account from the date of the deceased’s death. |
| (3) | A pension account administrator who received an application for succession pursuant to the former part of paragraph (2) shall deem the amount withdrawn from the date of death until the date of said application as the income withdrawn by the deceased, and shall make settlement of tax amount if there is any difference between the tax previously withheld and the tax on the amount withdrawn by the heir. |
| (4) | Where no application for succession has been filed under the former part of paragraph (2) after the death of the subscriber to a pension account, the deceased's income tax shall be determined by subtracting the tax amount already withheld for the period between the date of death and the date of confirmation of death (referring to the date the relevant pension account administrator confirms the death; the end of the deadline for application, if the date of confirmation of death is not later than the deadline for the application for succession; or the date of withdrawal, if the inheritor withdraws an amount before the deadline for the application; hereafter the same shall apply in this paragraph) from the tax amount calculated under the supposition that the aggregate of the following amounts is withdrawn on the date of death: <Amended on Feb. 21, 2014> |
| 1. | Income withdrawn from the date of death until the date of confirmation of death; |
| 2. | Income deposited in the pension account as of the date of confirmation of death. |
[This Article Added on Feb. 15, 2013]
| Article 101 (Deduction of losses and losses carried forward) |
| (1) | Deleted. <Feb. 13, 2018> |
| (2) | "Business prescribed by Presidential Decree" in Article 45(2)3 of the Act means business a mining right holder, a person who has the mining right by lease or a subcontractor of mining (hereafter referred to as "mining right holder, etc." in this paragraph) lends a mine together with mining facilities; provided, cases where a mining right holder, etc. lends a mining right, a mining right by lease or a right to mine, and receives a share given as mining rent from a subcontractor of mining or a subcontractor of mining in a lower tier on condition that he or she provides all or part of capital expenditure or revenue expenditure shall be excluded. |
| (3) | A loss carried forward appropriated pursuant to Article 26(2) of the Act shall be excluded from a loss carried forward to be deducted from the amount of income. |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 102 (Scope, etc. of bonds, etc.) |
| (1) | "Securities prescribed by Presidential Decree" in Article 46(1) of the Act, means securities which accrue interest or discounted amount (including the any of the following securities, but excluding bonds, etc. exempted from income tax by the law): <Amended on Dec. 31, 1996; Apr. 1, 1998; Dec. 31, 1999; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 29, 2008; Feb. 4, 2009; Dec. 31, 2009; Feb. 18, 2010; Dec. 30, 2010; Dec. 30, 2025> |
| 1. | Certificates of deposit issued by a financial company, etc., or certificates similar thereto; provided, those prescribed by Decree of the Ministry of Finance and Economy shall be excluded; |
| 2. | Deleted; <Dec. 30, 2010> |
| 3. | Deleted; <Feb. 4, 2009> |
| 4. | Bills (including bills issued, sold, or mediated by a financial company, but excluding commercial bills). |
| (2) | Even if securities specified in paragraph (1) are incorporated into the trust estate, etc., Article 46 of the Act shall apply. <Amended on Dec. 29, 2000; Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010> |
| (3) | The amount equivalent to interest, etc. under Article 46(1) of the Act means the amount equivalent to interest, etc. which belongs to the relevant resident by his or her holding period from among the amount of interest, etc. in the holding period referred to in Article 193-2(3). <Amended on Feb. 18, 2010; Dec. 30, 2010> |
| (4) | "Cases prescribed by Presidential Decree, such as repurchase agreement" in Article 46(1) of the Act, means any of the following transactions or any mixture of the following transactions: <Added on Jun. 8, 2010; Feb. 17, 2016> |
| 1. | A transaction by which a resident sells bonds, etc. on condition that he or she shall repurchase them at a certain price in a given period (including where a series of such transactions are made successively), where the transaction is verified through an account in the Korea Securities Depository pursuant to Article 294 of the Financial Investment Services and Capital Markets Act; |
| 2. | A transaction by which a resident lends bonds on condition that he or she shall have them returned in the same quantity of the same kind in a given period (including where a series of such transactions are made successively), where the transaction is verified through a trading ledger (including an electronic ledger) prepared by a bond borrowing and lending intermediary institution (referring to the Korea Securities Depository, a security financial company, an investment trader, or an investment broker under the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply). |
| (5) | Articles 46 and 133-2 of the Act shall apply to a transaction under paragraph (4), deeming that the amount equivalent to interest income accruing from bonds, etc., during the period from the date the bonds, etc., are sold or lent to the date the bonds, etc. are repurchased or returned, belongs to the seller or lender (referring to the initial seller or initial lender, where a series of such transactions are made successively or where a mixture of transactions referred to in paragraph (4) are made concurrently). <Added on Jun. 8, 2010; Feb. 2, 2012; Feb. 17, 2016> |
| (6) | Deleted. <Feb. 18, 2010> |
| (7) | Deleted. <Feb. 18, 2010> |
| (8) | The holding period under Article 46(2) of the Act shall be proven by the following methods: <Amended on Apr. 1, 1998; Dec. 29, 2000; Feb. 19, 2005; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| 1. | Where bonds, etc. are traded through an account opened in a financial company, etc.: |
Verification by the electronic data processing system or the original passbook of the relevant financial company, etc.;
| 2. | Cases, other than those under subparagraph 1: |
If bonds, etc. are purchased from a corporation, it shall be proven by the sale verification of bonds, etc. determined by Decree of the Ministry of Financed and Economy and issued by such corporation; and if bonds, etc. are purchased from an individual, it shall be proven by notarial deed prepared by a notary public under the Notary Public Act (limited to such deeds which include the name, domicile, and resident registration number of the parties to the transaction, the date of trade, and the kind, issue number, and face value of the bonds, etc.).
| (9) | Deleted. <Feb. 19, 2005> |
| (10) | In applying Articles 46 and 133-2 of the Act, if bonds, etc. are sold with approval from a financial company, etc., it shall be deemed that the relevant financial company, etc. has mediated such sale. <Amended on Feb. 18, 2010> |
| (11) | Deleted. <Feb. 19, 2005> |
| (12) | Deleted. <Feb. 19, 2005> |
[This Article Wholly Amended on Dec. 30, 1995]
| Article 102-2 Deleted. <Feb. 19, 2005> |
| Article 102-3 Deleted. <Jun. 8, 2010> |
| Article 103 Deleted. <Feb. 22, 2008> |
| Article 104 (Wage and salary income deductions) |
| (1) | Deleted. <Feb. 18, 2010> |
| (2) | Deleted. <Dec. 30, 2010> |
| (3) | The amount of wage and salary income deduction for a worker employed on a daily basis under Article 47(2) of the Act, shall be deducted from the amount of daily wages of the date on which such worker provides his or her labor. <Amended Dec. 31, 1998> |
| Article 105 (Years of continuous service) |
| (1) | Upon applying Articles 48(1) and 55(2) of the Act, the years of continuous service shall be calculated from the date of initiating service or from the following date of interim payment of retirement income until the date of retirement; provided, the period not included in the service period when a retirement payment is calculated shall be excluded from the years of continuous service. <Added on Feb. 15, 2013; Feb. 13, 2018> |
| (2) | "The number of years calculated by the method prescribed by Presidential Decree" in Article 48(1) of the Act, means the number of years under any of the following. In such cases, if the number of years of payment or the tenure of office is less than one year, it shall be deemed one year: <Added on Dec. 31, 2001; Dec. 30, 2002; Feb. 19, 2005; Feb. 9, 2006;Feb. 18, 2010; Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2015; Feb. 13, 2018> |
| 1. | In cases of lump-sum money to be paid under the National Pension Act, the number of deposit years calculated by dividing the total number of deposit months of pension premiums by 12; |
| 2. | In cases of lump-sum money to be paid under the Public Officials Pension Act, the Military Pension Act, the Pension for Private School Teachers and Staff Act, or the Special Post Offices Act, the incumbent service period to be applied in computing the retirement benefits by the respective relevant Act; |
| 3. | Where, of the retirement income under Article 22(1)1 of the Act, the lump-sum amount under the Public Officials Pension Act, the Military Pension Act, the Pension for Private School Teachers and Staff Act, or the Special Post Offices Act, and the retirement income under Article 22(1)2 are paid all at once, the longer period between the service period to be applied in computation of the retirement benefits under each relevant Act and the actual service period; |
| 4. | Notwithstanding subparagraphs 2 and 3, in cases of a lump-sum amount to be received after returning the lump-sum allowance under Article 40(2) and aggregating employment periods, service periods, or subscription periods, the employment period after the date of re-appointment or re-subscription. |
| (3) | The number of years of continuous service for retirement mutual-aid benefits under Article 42-2(4)3 shall be determined with the number of years of payment obtained by dividing the number of months of payment of the mutual-aid installments calculated under Article 14(4) of the Act on the Employment Improvement of Construction Workers by 12. <Amended Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2015> |
[Title Amended on Feb. 15, 2013]
| Article 106 (Personal deduction for dependents) |
| (1) | Where a person entitled to a personal deduction of a resident (hereinafter referred to as "family member entitled to deduction") concurrently falls under a family member entitled to a deduction of another resident, the family member shall be deemed a family member entitled to deduction of one of them, based on the matters indicated either on the final return on the tax base in the relevant taxable period, the report on income deductions and tax credits from wage and salary income prescribed by Decree of the Ministry of Finance and Economy under Article 140 of the Act (hereinafter referred to as "report on income deductions and tax credits from wage and salary income"), a report on income deductions and tax credits from pension income under Article 143-6(1) of the Act (hereinafter referred to as "report on income deductions and tax credits from pension income") or a report on income deductions and tax credits under Article 201-12. <Amended on Dec. 30, 1995; Dec. 31, 1996; Apr. 1, 1998; Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Jun. 8, 2010; Dec. 30, 2010; Feb. 21, 2014; Dec. 30, 2025> |
| (2) | Where at least two residents enter family members entitled to deduction under paragraph (1) in a return as his or her eligible family members for deduction, or where it is uncertain as to who is entitled to deduction for such family members, he or she shall meet the following standards: <Amended on Feb. 18, 2010> |
| 1. | Where the spouse entitled to deduction of a resident falls under another resident's dependent entitled to deduction, the former status shall prevail; |
| 2. | Where a resident's dependent entitled to deduction falls under another resident's dependent entitled to deduction, such dependent shall be deemed a dependent entitled to deduction of the resident who has been entitled to personal deduction as a dependent in the preceding taxable period; provided, where no personal deduction as a dependent in the preceding taxable period has been made, he or she shall be deemed a dependent of the resident who has the largest gross income in the relevant taxable period; |
| 3. | Where a person entitled to an additional deduction of a resident falls under a person entitled to an additional deduction of another resident, he or she shall be deemed a person entitled to an additional deduction of the resident who makes a basic deduction under subparagraphs 1 and 2. |
| (3) | Where a family member entitled to deduction of a resident who has either died in the middle of the relevant taxable period or left Korea to permanently reside in a foreign country, and who falls under a family member entitled to deduction of another resident, such as a successor, he or she shall be deemed a family member entitled to deduction of the decedent or the resident who left Korea. <Amended on Feb. 18, 2010> |
| (4) | If the personal deduction for a decedent or a resident who left Korea exceeds the amount of income in cases falling under paragraph (3), the amount in excess may be deducted from the amount of income of the heir or other resident in the relevant taxable period. <Amended on Feb. 18, 2010> |
| (5) | "Person prescribed by Presidential Decree" in Article 50(1)3a of the Act means any of the following persons: <Added on Dec. 30, 2003; Feb. 18, 2010; Feb. 11, 2020> |
| 1. | A person who can prove that he or she is married (excluding de facto marriage) with the lineal ascendent of a resident; |
| 2. | If the lineal ascendant of a resident dies, a person who can prove that he or she has been married (excluding de facto marriage) with the lineal ascendant as of the day before the date of death of the relevant lineal ascendent. |
| (6) | "Person prescribed by Presidential Decree" in Article 50(1)3b of the Act means any of the following persons: <Added on Dec. 30, 2003; Feb. 18, 2010> |
| 1. | A lineal descendent of the resident; |
| 2. | Where the spouse of a resident has remarried, any person who has been delivered of during the marriage (excluding de facto marriage) of the relevant spouse with the previous spouse. |
| (7) | "Adoptee prescribed by Presidential Decree, living together" in Article 50(1)3b of the Act means a child adopted under the Civil Act, the Special Act on Domestic Adoption, or the Act on Intercountry Adoption and a person who is actually in the adopted status and makes his or her living with the resident. <Added on Dec. 31, 1996; Feb. 19, 2005; Feb. 18, 2010; Aug. 3, 2012; May 7, 2025> |
| (8) | "Any person prescribed by Presidential Decree" in Article 50(1)3d of the Act means recipients defined in subparagraph 2 of Article 2 of the National Basic Living Security Act. <Added on Dec. 30, 1995; Dec. 29, 2000; Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010> |
| (9) | "Any person prescribed by Presidential Decree" in Article 50(1)3e of the Act means entrusted children whom a resident has brought up in person for at least six months in the relevant taxable period (including entrusted children age 20 or younger if the period of protection is extended pursuant to Article 16(4) of the Children Welfare Act); provided, where he or she has not received income deduction in the preceding taxable period, income deduction shall be computed including an entrusted period for the relevant entrusted children of the preceding taxable period. <Added on Feb. 4, 2009; Feb. 18, 2010> |
| (10) | Where a resident intends to receive the global income deduction for persons falling under any of paragraphs (5) through (9), he or she shall submit documents prescribed by Decree of the Ministry of Financea and Economy, as prescribed by the subparagraphs of Article 107(2). <Amended on Dec. 31, 1996; Apr. 1, 1998; Dec. 29, 2000; Dec. 30, 2003; Feb. 29, 2008; Feb. 4, 2009; Dec. 30, 2025> |
| Article 107 (Scope of persons with disability) |
| (1) | Disabled persons falling under Article 51(1)2 of the Act shall be any of the following: <Amended on Sep. 30, 1997; Dec. 31, 2001; Feb. 19, 2005; Feb. 13, 2018; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Persons prescribed by Decree of the Ministry of Finance and Economy from among disabled persons under the Act on Welfare of Persons with Disabilities and children with disability under the Act on Welfare Support for Children with Disabilities; |
| 2. | Injured persons defined under the Act on the Honorable Treatment and Support for Persons of Distinguished Services to the State, and persons similar thereto without any ability to work; |
| 3. | A person who has a rare or intractable disease, etc. or a disease or injury similar thereto under the former part of the provisions, with the exception of subparagraph 3d1) through 10), of Appendix 2 of the Enforcement Decree of the National Health Insurance Act, who requires continuous and periodic treatment due thereto, and whom the head of a medical institution recognizes as having difficulty in leading an ordinary daily life, such as employment or attendance at school; |
| 4. | Deleted. <Feb. 18, 2025> |
| (2) | Where a person falling under any subparagraph of paragraph (1) intends to claim a disability deduction, he or she shall submit a certificate of disability prescribed by Decree of the Ministry of Finance and Economy (in the case of a person who has received certification as a person with disabilities under the Act on the Honorable Treatment of and Support for Persons of Distinguished Service to the State, or who has been issued a disability registration card under the Act on Welfare of Persons with Disabilities, a copy of such certificate or disability registration card, or other documents evidencing the fact of disability; and in the case of a child with disabilities under the Act on Welfare Support for Children with Disabilities who is receiving developmental rehabilitation services under Article 21 of that Act, documents evidencing the use of such developmental rehabilitation services) in accordance with the classification under each of the following subparagraphs; provided, where documents related to the certification of disability under the main clause are submitted to the Commissioner of the National Tax Service pursuant to Article 165(1) of the Act and Article 216-3(1) of this Decree, documents prescribed by Decree of the Ministry of Finance and Economy may be submitted (including submission through the National Tax Information and Communications Network). <Amended on Dec. 31, 1996; Sep. 30, 1997; Apr. 1, 1998; Dec. 31, 1999; Dec. 31, 2001; Feb. 19, 2005; Feb. 29, 2008; Feb. 18, 2010; Feb. 15, 2013; Feb. 21, 2014; Feb. 15, 2022; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | When filing a final return on tax base, he or she shall submit it along with such return to the head of the competent tax office having jurisdiction over the place for tax payment; |
| 2. | A person who has wage and salary income (excluding wage and salary income specified in any item of Article 127(1)4 of the Act) shall submit it, along with a report on income deductions and tax credits from wage and salary income, to the withholding agent who makes the year-end tax settlement; |
| 3. | A person who has business income to be adjusted at the year-end pursuant to Article 144-2 of the Act shall submit it, along with the return on income deductions and tax credits, to the withholding agent who makes the year-end tax settlement. |
| (3) | Where the disabled person, whose condition of the relevant disability is expected to last for at least one year, submits a certificate of persons with a disability stating the period of disability under paragraph (2), he or she need not resubmit the certificate during the period of such disability; provided, when the competent tax office or the employer has been changed during the period of relevant disability, the certificate of disabled person shall be submitted pursuant to paragraph (2). <Amended on Dec. 31, 2001> |
| (4) | In cases falling under the proviso to paragraph (3), he or she may have such certificate of disability, as has already been submitted, returned from the head of the competent tax office having jurisdiction over the former place for tax payment or the former withholding agent, and submit it. <Amended on Dec. 31, 2001> |
[Title Amended on Dec. 31, 2001]
| Article 108 (Deduction for women) |
In applying Article 51(1) of the Act, the fact as to whether a person has a spouse, or is a householder with dependents, shall be governed by a certified transcript of resident registration card or a certificate of a register of familial relationship as of the expiration of the relevant taxable period. In such cases, the head of the competent tax office having jurisdiction over the place for tax payment shall confirm a certified transcript of resident registration card by mutual use of the administrative information provided for in Article 36(1) of the Electronic Government Act, and where the resident refuses to agree to such confirmation or it cannot be determined by his or her certified transcript of resident registration card whether he or she has a spouse or he or she is a householder with any dependent family members or any wage and salary income earner files a return on the income deduction pursuant to 140 of the Act, the head of the competent tax office having jurisdiction over the place for tax payment shall have each of them to submit a certified transcript of resident registration card or a certificate of a register of familial relationship. <Amended on Dec. 30, 1995; Jun. 12, 2006; Dec. 31, 2008; May 4, 2010>
[Title Amended on Dec. 30, 1995]
| Article 108-2 Deleted. <Feb. 21, 2014> |
| Article 108-3 (Deduction of interest expenses for mortgage-backed retirement pension) |
| (1) | "Mortgage-backed retirement pension that meets the requirements prescribed by Presidential Decree" in Article 51-4(1) of the Act means a pension that meets all the following requirements: <Amended on Apr. 21, 2009; Feb. 18, 2010; Feb. 15, 2013; Feb. 29, 2024> |
| 1. | It shall be a mortgage-backed retirement pension in which the pension has been paid under the guarantee for the mortgage-backed retirement pension under subparagraph 8-2 of Article 2 of the Korea Housing Finance Corporation Act or a mortgage-backed retirement pension of the financial institutions under subparagraph 11 of Article 2 of the same Act; |
| 2. | Deleted; <Apr. 21, 2009> |
| 3. | The standard market value of the residential house under Article 99(1) of the Act (including a residential house registered in the name of the spouse of the resident who has the pension income), which is the subject matter of institution of the mortgage at the time of being admitted to the mortgage-backed retirement pension, shall not exceed 1.2 billion won. |
| (5) | In applying paragraph (4), where a business operator enters into a lease agreement, for a leased passenger automobile prescribed by Decree of the Ministry of Finance and Economy, with a special clause limiting drivers to the relevant business operator and other persons prescribed by Decree of the Ministry of Finance and Economy, the business operator shall be deemed to have subscribed to business-use automobile insurance. <Amended on Feb. 29, 2008; Feb. 18, 2010; Feb. 27, 2026;> |
| (3) | A person who wishes to be eligible for the deduction of interest expenses for the mortgage-backed retirement pension under Article 51-4 of the Act shall submit a final return on tax base along with the certificate of interest expenses for the mortgage-backed retirement pension pursuant to paragraph (2) to the head of the competent tax office having jurisdiction over the place for tax payment. |
[This Article Added on Feb. 28, 2007]
| Article 109 Deleted. <Feb. 21, 2014> |
| Article 109-2 Deleted. <Feb. 21, 2014> |
| Article 110 Deleted. <Feb. 21, 2014> |
| Article 110-2 Deleted. <Dec. 31, 1998> |
| Article 110-3 Deleted. <Feb. 21, 2014> |
| Article 111 Deleted. <Feb. 22, 2008> |
| Article 112 (Deduction for housing funds) |
| (1) | "A household prescribed by Presidential Decree" in the main sentence of Article 52(4) of the Act, means a household all inclusive of a resident and his or her spouse, lineal ascendants, and descendants (including their spouses) and siblings of the resident and of his or her spouse, who make a living together at the same domicile or place of residence as that of the resident. In such cases, the resident and his or her spouse shall be deemed to be in the same household, even where the resident and his or her spouse do not make a living together. <Added on Feb. 4, 2009; Feb. 18, 2010; Feb. 3, 2015> |
| (2) | "A house not larger than the size prescribed by Presidential Decree" in the main sentence of Article 52(4) of the Act, means a house in the national standard housing scale under the Housing Act (including officetels defined in subparagraph 4 of Article 4 of the Enforcement Decree of the Housing Act). In such cases, if the relevant house is a multi-unit house, the size shall be based on the exclusive area for each household. <Amended on Feb. 18, 2010; Sep. 9, 2013; Feb. 3, 2015; Aug. 11, 2016> |
| (3) | "The multiplying factor prescribed by Presidential Decree" in the main sentences of Article 52(4) and (5) of the Act, means the multiplying factors classified as follows: <Amended on Feb. 18, 2010; Sep. 9, 2013; Feb. 3, 2015> |
| 1. | Land in an urban area under Article 6 of the National Land Planning and Utilization Act: Five times; |
| 2. | Other lands: Ten times. |
| (4) | "Housing lease fund loans prescribed by Presidential Decree" in the main clause of Article 52(4) of the Act means loans falling under any of the following subparagraphs; provided, in the case of loans under subparagraph 2, only those whose total salary for the relevant taxable period does not exceed 50 million won shall be eligible: <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 21, 2014; Feb. 3, 2015; Feb. 17, 2021; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Funds borrowed from a lending institution under Appendix 1-2 (hereafter in this paragraph referred to as a "lending institution") that meet all of the following requirements: |
| a. | Funds borrowed within 3 months before or after the earlier of the move-in date under a lease contract certificate under Article 3-2(2) of the Housing Lease Protection Act (hereafter in this Article referred to as the "lease contract certificate") and the date of moving-in in a copy of the resident registration record (in the case of a foreigner under paragraph (5), the date of registration of the place of stay in the alien registration record under the Immigration Act, or the date of reporting of the place of residence in the domestic residence report certificate under the Act on the Immigration and Legal Status of Overseas Koreans; hereafter in this paragraph referred to as the "move-in date, etc.") [where previous housing lease fund loans are repaid with funds borrowed from another lending institution (hereafter in this subparagraph referred to as "refinancing loans"), the initial borrowing before such refinancing loans shall be the basis]. In such cases, where funds are borrowed upon extension or renewal of a lease contract, funds borrowed within 3 months before or after the date of such extension or renewal shall be included; and where a person who has been receiving an income deduction for principal and interest repayments of housing lease fund loans moves to another house, funds borrowed within 3 months before or after the earlier of the move-in date and the move-in date, etc. of the house before such move shall be included; |
| b. | The borrowed funds (or, in the case of refinancing loans, the funds initially borrowed before such refinancing loans) shall be directly deposited by the lending institution under Appendix 1-2 into the lessor's account; |
| 2. | Money borrowed from a resident who does not conduct credit business, etc. defined in Article 2 of the Act on Registration of Credit Business and Protection of Finance Users, which meets all the following requirements: |
| a. | The loan shall be borrowed within one month before or after the move-in date stipulated in the lease contract or the move-in date, etc., whichever is earlier. In such cases, if the loan is borrowed when the lease contract is extended or renewed, the loan borrowed within one month before or after the date of extension or renewal of the contract shall be included, and the loan borrowed within one month before or after the date of moving in to the old house or the move-in date, etc., whichever is earlier, shall be included, if a person who has been receiving tax credits on the principal and interest paid for the house lease loan moves to another house; |
| b. | The loan shall not be money borrowed at the rate of interest lower than the rate of interest prescribed by Decree of the Ministry of Finance and Economy. |
| (5) | "Foreigners prescribed by Presidential Decree" in the main clause of Article 52(4) of the Act and the main clause, with exception of the subparagraphs, of paragraph (5) of that Article means the residents meeting all the following requirements: <Added on Feb. 17, 2021> |
| 1. | He or she shall be any of the following persons: |
| a. | Aliens registered pursuant to Article 31 of the Immigration Act; |
| b. | Foreign nationality Koreans who report the place of residence pursuant to Article 6 of the Act on the Immigration and Legal Status of Overseas Koreans; |
| 2. | Any of the following persons shall not have deduction under Article 52(4) and (5) of the Act and Article 87(2) of the Act on Special Cases concerning Taxation: |
| a. | The spouse of a resident; |
| b. | A person falling under any of the following cases, who live together with a resident at the same address or place of residence: |
1) The lineal ascendent and descendent (including his or her spouse) of a resident and his or her brother or sister;
2) The lineal ascendent and descendent (including his or her spouse) of a resident’s spouse and his or her brother or sister.
| (6) | Deleted. <Feb. 3, 2015> |
| (7) | Deleted. <Feb. 21, 2014> |
| (8) | "The long-term mortgage loan prescribed by Presidential Decree" in the main sentence of Article 52(5) of the Act, means a loan that meets all the following requirements and shall be computed from the time when the preceding owner of the relevant house initially borrowed the loan, for the purpose of calculating the period for repayment of the loan under the proviso to Article 52(5) and Article 52(6)1 through 3 of the Act, where the buyer assumes obligations for the long-term mortgage loan secured by the mortgage on the house and borrowed by the preceding owner when acquiring the house. In such cases, if the loan ceases to meet any of the relevant requirements, Article 52(5) of the Act shall not apply to the loan from the date the relevant event occurs: <Amended on Dec. 30, 2003; Feb. 4, 2009; Feb. 18, 2010; Sep. 9, 2013; Feb. 3, 2015> |
| 1. | Deleted; <Feb. 3, 2015> |
| 2. | The long-term housing mortgage loan is required to be borrowed within three months from the date the registration for passage of title for house or the preservation registration has been made; |
| 3. | The obligor of long-term housing mortgage loan is required to be the owner of the house over which the relevant mortgage has been created. |
| (9) | "The fixed-rate method prescribed by Presidential Decree" in Article 52(6)1 of the Act means a case where interest on an amount equivalent to at least 70 percent of the loan is paid at a fixed interest rate during the repayment period (including cases where the interest rate is changed at intervals of at least five years), and "the non-deferred installment repayment method prescribed by Presidential Decree" means a case where the period during which only interest is repaid during the repayment period (hereafter in this paragraph referred to as the "grace period") is not more than 1 year and at least the amount of the loan calculated according to the following formula is repaid each year from the taxable period in which the end date of the grace period falls to the taxable period in which the end date of the loan repayment period falls. In such cases, where the repayment period includes a period of less than one year, such period shall be deemed one year. <Amended on Feb. 2, 2012; Sep. 9, 2013; Feb. 3, 2015; Feb. 28, 2025> |
┌─────────────────────────────┐
│ 70 percent of the loan × repayment of the loan for the relevant taxable period │
│ number of months │
│──────────── ────────────────│
│ number of years of the repayment period × 12 │
└─────────────────────────────┘
| (10) | In any of the following cases, the relevant loan shall be construed as "long-term mortgage loan prescribed by Presidential Decree" in the main sentence of Article 52(5) of the Act, notwithstanding paragraph (8); provided, in cases falling under subparagraph 2 or 4, the balance of the existing loan shall be its upper limit: <Amended on Dec. 31, 2001; Dec. 30, 2002; Nov. 29, 2003; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 4, 2009; Apr. 21, 2009; Feb. 18, 2010; Sep. 9, 2013; Feb. 3, 2015; Jun. 30, 2015; Feb. 17, 2021; Feb. 29, 2024> |
| 1. | Where such fact of borrowing is verified that a person who first acquires a newly-built house subject to deduction of or exemption from capital gains tax under Article 99 of the Restriction of Special Taxation Act has borrowed the loan from a financial company, etc. or the Housing and Urban Fund created under the Housing and Urban Fund Act for purchasing the relevant house; |
| 2. | Where a borrower of long-term home-mortgage loans referred to in paragraph (8) transfers long-term home-mortgage loans within the relevant financial company, etc. or to another financial company, etc. by any of the following methods. In such cases, the repayment period of the relevant borrowing shall be at least 15 years, and the repayment period shall be calculated on the basis of the date on which the existing long-term housing mortgage loan is first borrowed: |
| a. | A method in which the relevant financial company, etc. or another financial company, etc. transfers the long-term housing mortgage loan in the manner of directly repaying the balance of the existing long-term housing mortgage loan and establishing a mortgage on the relevant house; |
| b. | A method of transferring the long-term home mortgage loan in the manner of immediately repaying the remaining balance of the existing long-term home mortgage loan with the new long-term home mortgage loan borrowed by the relevant borrower and establishing a mortgage on the relevant house; |
| 3. | Where a housing acquirer borrows a loan with repayment period of 15 years or longer from a financial company, etc. or from a housing and urban fund under the Housing and Urban Fund Act with the housing of the housing transferor as collateral, and immediately transfers the ownership to the housing acquirer; |
| 4. | Where the borrower of a loan, the term of repayment of which is less than 15 years which falls under the requirements of paragraph (8)2 and 3 pursuant to Article 52(5) of the Act extends the term of repayment to at least 15 years, or repays the existing loan with a new loan borrowed with the term of repayment of at least 15 years by mortgaging the relevant house, and the standard market price of the house under Article 99(1) of the Act at the time of extending the term of repayment or borrowing the new loan or the sale price of the house under paragraph (15) does not exceed 600 million won. In such cases, for the purpose of applying paragraph (8)2 to a new loan, the date of borrowing the existing loan initially shall be the reference date; |
| 5. | Where a person who first acquires a house subject to favorable tax rates for capital gains tax under Article 98-3 of the Restriction of Special Taxation Act during the period from February 12, 2009 to February 11, 2010, has borrowed the loan from a financial company, etc. or the Housing and Urban Fund created under the Housing and Urban Fund Act for purchasing the relevant house with the term of redemption of at least five years. In such cases, the relevant loan shall fulfill the requirements of paragraph (8)2 and 3. |
| (11) | When applying paragraph (8), if a transferee of the relevant house assumes the liability for long-term housing mortgage loan in connection with the house acquisition, the requirement of subparagraph 2 of the same paragraph shall not apply. <Amended on Feb. 4, 2009; Sep. 9, 2013> |
| (12) | With respect to persons entitled to a tax credit for the interest on borrowings of housing fund under Article 92-4 of the Act on Regulation of Tax Reduction and Exemption prior to amendment by the Act on Regulation of Tax Reduction and Exemption (Act No. 5584), a loan related to the acquisition of the relevant house during the relevant taxable period shall not be deemed "long-term housing mortgage loan prescribed by Presidential Decree" under the main sentence of Article 52(5) of the Act, notwithstanding paragraph (8). <Added on Dec. 29, 2000; Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010; Sep. 9, 2013> |
| (13) | Deleted. <Feb. 18, 2010> |
| (14) | When applying paragraph (11), if the standard market price of a house under Article 99(1) of the Act exceeds 600 million won at the time a transferee of the house acquires the house, the relevant loan shall not be deemed "long-term mortgage loan prescribed by Presidential Decree" in the main clause, with the exception of the subparagraphs, of Article 52(5) of the Act. <Added on Feb. 9, 2006; Feb. 4, 2009; Sep. 9, 2013; Feb. 21, 2014; Feb. 17, 2021; Feb. 29, 2024> |
| (15) | "Price prescribed by Presidential Decree" in the main sentence of Article 52(5)4 of the Act, means any of the following prices: <Added on Feb. 9, 2006; Feb. 4, 2009; Feb. 18, 2010> |
| 1. | Parcelling-out right of a house under the main sentence of Article 52(5)4 of the Act excluding association member's relocation rights under subparagraph 2: Parcelling-out price; |
| 2. | Association member's relocation rights under the main sentence of Article 89(2) of the Act: |
| a. | Where settlement balance is paid: |
Assess value of the existing building and land appurtenant thereto + Settlement balance paid;
| b. | Where settlement balance is received: |
Assess value of the existing building and land appurtenant thereto - Settlement balance received.
[This Article Wholly Amended on Oct. 23, 2000]
| Article 112-2 Deleted. <Feb. 21, 2014> |
| Article 113 (Special income deductions and special tax credits) |
| (1) | Any person who wishes to be eligible for the application of Article 52 or 59-4 of the Act shall submit the documents prescribed by Decree of the Ministry of Finance and Economy by any of the following dates to the withholding agent, a taxpayers' association, or the head of the competent tax office having jurisdiction over the place for tax payment; provided this shall not apply to insurance premiums under Article 52(1) of the Act and donations which a withholding agent deducts from the amount of pay in a lump sum: <Amended on Dec. 31, 1996; Apr. 1, 1998; Feb. 29, 2008; Feb. 4, 2009;Feb. 18, 2010; Feb. 21, 2014; Dec. 30, 2025> |
| 1. | In cases of any person with wage and salary income (excluding a person who has not joined a taxpayers' association, among those with wage and salary income falling under any item of Article 127(1)4 of the Act), the date he or she receives pay for February of the year following the relevant taxable period (where he or she has retired from office, referring to the date he or she receives pay for the month in which the date he or she has retired falls); |
| 2. | In cases of any person who has not joined a taxpayers' association among those with wage and salary income falling under any item of Article 127(1)4 of the Act, the deadline for a final return on the tax base of global income. |
| (2) | Where documents evidencing income deductions and tax credits are to be submitted to the Commissioner of the National Tax Service under Article 216-3, a person who wishes to be eligible for the application of Article 52 or 59-4 of the Act may submit the documents specified by Decree of the Ministry of Finance and Economy (including submission through the Home Tax Service network), notwithstanding the main sentence of paragraph (1). <Added Feb. 9, 2006; Feb. 29, 2008; Feb. 21, 2014; Feb. 17, 2016; Dec. 30, 2025> |
| (3) | Article 47(5) of the Act shall apply mutatis mutandis to special income deductions and special tax credits; provided, insurance premiums under Article 52(1) of the Act shall be deducted by a withholding agent who pays wages which serve as a basis for the calculation of the relevant insurance premiums. <Amended on Feb. 18, 2010; Dec. 30, 2010; Feb. 21, 2014> |
[Title Amended on Feb. 21, 2014]
| Article 113-2 Deleted. <Feb. 21, 2014> |
| Article 114 (Scope of those who withdraw temporarily) |
| (1) | "Reasons prescribed by Presidential Decree" in Article 53(2) of the Act means where a resident or his or her family living together (excluding a lineal descendant and an adoptee) leaves temporarily his or her original domicile or place of residence to enter school, receive medical treatment for a disease, or under any circumstances of service or business. <Amended on Feb. 18, 2010> |
| (2) | A person who wishes to be eligible for global income deductions and special tax credits for a person who has left temporarily under Article 53(2) of the Act, shall submit a list of family members living together with the person who has left temporarily prescribed by Decree of the Ministry of Finance and Economy (hereinafter referred to as "list of family members living together with a person who has left temporarily"), along with any of the following documents (including submission via the Home Tax Service), to the relevant withholding agent or to the head of the competent tax office having jurisdiction over the place for tax payment: <Amended on Apr. 1, 1998; Mar. 17, 2004; Feb. 19, 2005; Presidential Decree No. 19507, Jun. 12, 2006; Feb. 29, 2008; Feb. 21, 2014; Dec. 30, 2025> |
| 1. | Where a person has left temporarily to enter school, the certificate of enrollment issued by the head of the relevant school (including a teaching institute, etc.); |
| 2. | Where a person has left temporarily for medical treatment and rehabilitation from a disease, the certificate of medical treatment issued by the head of the relevant medical institution; |
| 3. | Where a person has left temporarily for his or her work, the certificate of employment issued by the head of the relevant place of business; |
| 4. | Deleted; <Jun. 12, 2006> |
| (3) | Upon receipt of an application under paragraph (2), the head of the competent tax office having jurisdiction over the place for tax payment shall verify the following documents using administrative information shared under Article 36(1) of the Electronic Government Act and shall require the applicant to submit such documents, if the relevant resident does not consent to such verification or if the relevant income earner files a return on income deductions and tax credits under Article 140 of the Act: <Added on Jun. 12, 2006; Dec. 31, 2008; May 4, 2010; Feb. 21, 2014> |
| 1. | A certified copy of resident registration card of his or her original domicile and temporary address; |
| 2. | A copy of his or her business registration certificate (limited to where he or she has left temporarily for business). |
| (4) | The provisions of Article 113(1) shall apply mutatis mutandis to the submission of the list of family members living together with a person who has left temporarily under paragraphs (2) and (3). <Amended on Jun. 12, 2006> |
SECTION 5 Tax Rate and Deduction of Amount of Tax
| Article 115 Deleted. <Feb. 15, 2013> |
| Article 116 Deleted. <Feb. 28, 2007> |
| Article 116-2 (Calculation method of dividend income subject to deduction of dividend tax) |
In applying Article 62 of the Act, the amount of dividend income exceeding the standard tax base of global taxation on interest income, etc. under Article 56(4) of the Act, shall be computed by successively aggregating the following amounts in the stated order: <Amended on Feb. 19, 2005; Feb. 3, 2015>
| 1. | If interest income and dividend income concurrently exist, the interest income shall be added first; |
| 2. | In applying subparagraph 1, if dividend income subject to the proviso to Article 17(3) of the Act and other dividend income concurrently exist, the other dividend income shall be added first, and the dividend income under Article 104-27(1) of the Restriction of Special Taxation Act, if any, shall be added subsequently. |
[This Article Added on Dec. 31, 1996]
| Article 116-3 (Tax credit for bookkeeping) |
| (1) | Deleted. <Feb. 18, 2010> |
| (2) | "Unavoidable causes prescribed by Presidential Decree, such as a natural disaster" in the proviso to Article 56-2(2)2 of the Act means cases falling under any of the following subparagraphs: <Amended on Feb. 18, 2010> |
| 2. | Meeting a disaster, such as fire or war, or faced with theft; |
| 3. | Other cases wherein such causes have occurred as equivalent to subparagraphs 1 and 2. |
| (3) | Persons who intend to take tax credit for bookkeeping under Article 56-2 of the Act shall apply to the head of the competent tax office having jurisdiction over the place for tax payment by submitting the final return on tax base along with an application for tax credit for bookkeeping, determined by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1998]
| Article 116-4 (Special cases concerning tax credit for transmission of issued electronic invoices) |
| (1) | "Project operator prescribed by Presidential Decree" in the former part of Article 56-3(1) of the Act means any of the following business operators: <Amended on Feb. 29, 2024> |
| 1. | A business operator commencing a new business in the relevant taxable period; |
| 2. | A business operator whose gross income by place of business in the immediately preceding taxable period is less than 300 million won. |
| (2) | "The amount prescribed by Presidential Decree" in the former part of Article 55-3(1) of the Act means the amount calculated by multiplying the number of issuances of electronic invoices by 200 won. |
[This Article Wholly Amended on Feb. 15, 2022]
| Article 117 (Foreign tax credit) |
| (1) | "Foreign income tax prescribed by Presidential Decree" in Article 57(1), with the exception of the formula, of the Act and in the former part of Article 129(4) of the Act, means the following tax amounts (excluding penalty taxes) paid or to be paid to a foreign government; provided, where the relevant tax amount exceeds the amount calculated pursuant to provisions concerning non-taxation, exemption or limited tax rates and the excess tax amount under the relevant tax treaty, such exceeded amount shall be excluded, but the amount of tax assessed by the Government of the Russian Federation in excess of the tax amount calculated in accordance with the provisions on non-taxation, tax exemptions, and limited tax rates under a tax treaty shall be included: <Amended on Dec. 30, 1995; Dec. 31, 1998; Feb. 4, 2009; Feb. 18, 2010; Feb. 12, 2019; Feb. 17, 2021; Feb. 15, 2022; Feb. 29, 2024> |
| 1. | Amount of tax assessed by making the individual amount of income as the tax base, and additional amount of tax thereto; |
| 2. | Amount of tax assessed by making revenue other than income, and others equivalent thereto, as the tax base, which fall under the tax item similar to subparagraph 1. |
| (2) | The foreign source income to which Article 57(1) of the Act applies shall, as an income generated in a foreign country, be the amount calculated by applying mutatis mutandis the provisions concerning the calculation of global income or retirement income of a resident; and when calculating the credit limit amount pursuant to that paragraph, the foreign source income shall be the amount calculated by subtracting, from such foreign source income, the following expenses corresponding to the foreign source income (hereafter in this Article, expenses corresponding to foreign source income") as the amount included in necessary expenses (excluding any amount included in necessary expenses when the state where such foreign source income is generated imposes taxes) in calculating the global income amount in the relevant taxable period; in such cases, if a resident calculates expenses prescribed by Decree of the Ministry of Finance and Economy, such as expenses in relation to research and development, etc. by selecting calculation methods prescribed by Decree of the Ministry of Finance and Economy, the amount calculated accordingly shall be expenses corresponding to the foreign source income and if a resident selects calculation methods prescribed by Decree of the Ministry of Finance and Economy, he or she shall continuously apply such methods for five taxable period from the taxable period to which he or she intends to be applied: <Amended on Feb. 12, 2019; Feb. 11, 2020; Feb. 17, 2021; Dec. 30, 2025> |
| 1. | Direct expenses: Expenses that are directly corresponded to such foreign source income: In such cases, expenses commonly related to such foreign source income and other incomes shall be excluded; |
| 2. | Distribution expenses: Expenses related to foreign source income, which are calculated by the distribution methods prescribed by Decree of the Ministry of Finance and Economy, from among the expenses commonly related to such foreign source income and other incomes. |
| (3) | An amount of tax paid in a foreign country under Article 57(1) of the Act, shall be deducted from an amount of tax computed in the taxable period when the relevant income generated from foreign source is included in the tax base. In such cases, any resident who intends to get a deduction on tax paid in a foreign country shall file an application for foreign tax credit prescribed by Decree of the Ministry of Finance and Economy with the head of the competent tax office having jurisdiction over the place for tax payment or a withholding agent, when he or she makes the final return on tax base of the taxable period in which an income generated from foreign source is included or the year-end tax settlement. <Amended on Feb. 4, 2009; Feb. 18, 2010; Feb. 17, 2021; Dec. 30, 2025> |
| (4) | If a resident is unable to submit an application under paragraph (3), along with the final return on tax base, due to causes, such as a delay in notification of the determination of a foreign government on income tax on foreign source income, or the difference in taxable periods, the resident may submit it within three months from the date he or she received the notice of such determination. <Amended on Dec. 31, 1998; Feb. 3, 2015; Feb. 3, 2017> |
| (5) | Paragraph (4) shall apply mutatis mutandis to where any change has occurred in the paid amount of foreign tax as the foreign government rectified its decision on the income tax for the foreign source income. In such cases, when an amount of tax to be refunded occurs, it may be appropriated or refunded pursuant to Article 51 of the Framework Act on National Taxes. <Amended on Dec. 31, 1998; Feb. 4, 2009> |
| (6) | Foreign tax paid on global income, other than business income under Article 19 of the Act, shall be deducted by method under Article 57(1) of the Act. <Amended on Feb. 18, 2010; Feb. 17, 2021> |
| (7) | In calculating the amount of the limit of deduction under Article 57(1) of the Act, if a business operator has overseas places of business in at least two foreign countries, the business operator may calculate the limit of deduction separately for each country. <Amended on Feb. 3, 2015; Feb. 12, 2019; Feb. 17, 2021> |
| (8) | "Conditions prescribed by Presidential Decree are satisfied" in Article 57(4) of the Act means any of the following cases: <Added on Dec. 30, 2010> |
| 1. | Where income of a foreign corporation is derived in a country where its headquarters or principal place of business is located (hereafter referred to as "resident country" in this paragraph): Where a resident, who is a shareholder or an investor, other than a foreign corporation, bears tax liabilities for income of the foreign corporation under the tax law of the resident country; |
| 2. | Where income of a foreign corporation is derived in a country, other than the resident country (hereafter referred to as "source country" in this paragraph): Where all of the following requirements are satisfied: |
| a. | A resident, who is a shareholder or an investor, other than a foreign corporation, shall bear tax liabilities for income of the foreign corporation under the tax law of the resident country; |
| b. | A resident, who is a shareholder or an investor, other than a foreign corporation, shall bear tax liabilities for income of the foreign corporation under the tax law of the source country. |
| (9) | "The amount, computed as prescribed by Presidential Decree" in Article 57(4) of the Act, shall be the amount computed by the following formula: <Added on Dec. 30, 2010> |
┌────────────────────────────────────┐
│ Amount of income tax borne by a resident for income of a foreign corporation in the relevant business year │
│ × Dividend income / │
│ Foreign corporation's income for the relevant business year │
│ × Resident's profit sharing ratio for the relevant business year) │
│ - Amount of income tax borne by │
│ a resident for income of a foreign corporation │
│ in the relevant business year │
│ │
└────────────────────────────────────┘
| (10) | The main clause of Article 57(2) of the Act shall not apply to the portion (referring to the amount calculated by deducting the amount under subparagraph 2 from the amount under subparagraph 1) related to direct and indirect expenses of foreign income tax, among the amount of foreign income tax exceeding the amount of the limit of deduction under Article 57(1) of the Act; in such cases, the relevant foreign income tax may be included in necessary expenses when calculating the amount of income for the next taxable period after the taxable period for which the credit is not applied.<Amended on Feb. 12, 2019; Feb. 17, 2017; Feb. 28, 2023> |
| 1. | The credit limit amount obtained based on the foreign source income to which Article 57(1) of the Act applies, which is calculated according to the former part of paragraph (2), with the exception of its subparagraphs; |
| 2. | The credit limit amount under Article 57(1) of the Act. |
| Article 117-2 (Special cases concerning tax credit for foreign corporate tax paid by indirect investment companies) |
| (1) | Where any entity falling under any item of Article 57-2(1)1 of the Act (hereafter in this Article and Article 189-2, referred to as an "indirect investment company, etc.") pays indirect investment foreign corporate tax (hereafter in this Article and Article 189-2, referred to as "indirect investment foreign corporate tax"), the indirect investment foreign corporate tax corresponding to the income paid by an indirect investment company, etc. for each resident shall be the amount calculated by adding the following amounts: |
| 1. | Where the indirect investment company, etc. makes an investment in a structure other than those that involves acquiring securities issued by other indirect investment companies, etc.: |
┌───────────────────────────────┐
│ │
│ The daily amount of indirect investment foreign corporate tax for a resident = A x B │
│ amount × 0.55 │
│ │
│ A: The daily amount of foreign corporate tax paid by an indirect investment company, etc. per unit or per share │
│ (referring to the amount calculated by dividing the total amount of foreign corporate tax paid by an indirect investment company, etc. │
│ by the total number of units or shares issued by the indirect investment company, etc.) │
│ B: The number of units or shares held by a resident in an indirect investment company, etc. │
│ (referring to the number of units or shares │
│ held by a resident at the time an indirect investment company, etc. pays foreign corporate tax) │
└───────────────────────────────┘
| 2. | Where the indirect investment company, etc. make an investment in a structure that involves acquiring securities issued by other indirect investment companies, etc., the aggregate of the amount calculated by day according to the following formula: |
┌───────────────────────────────┐
│ │
│ The daily amount of indirect investment corporate tax for a resident = A x B x C │
│ amount × 0.55 │
│ │
│ A: The daily amount of foreign corporate tax per unit or per share paid by │
│ other indirect investment companies, etc. (referring to the amount calculated by │
│ dividing the total amount of foreign corporate taxes paid by other indirect investment companies, etc. │
│ by the total number of units or shares issued by the other indirect investment companies, etc.) │
│ B: The number of units or shares of an indirect investment company, etc. in │
│ other indirect investment companies, etc. (referring to the number of units or │
│ shares held by the indirect investment company, etc. as at the time other │
│ as "Transfer gains before authorized management and disposal plans, etc.") │
│ C: The ratio of units or share held by a resident in an indirect investment │
│ company, etc. (referring to the value calculated by dividing the number of units or shares │
│ held by the resident as at the time other indirect investment companies, etc. pay foreign corporate tax │
│ by the total number of units or shares issued by an indirect investment company, etc.) │
└───────────────────────────────┘
| (2) | "The amount calculated as prescribed by Presidential Decree" in the proviso of Article 57-2(2)1 of the Act means the lesser of the amounts calculated in accordance with the following subparagraphs: <Amended on Feb. 28, 2025> |
| 1. | The amount obtained by subtracting the tax base standard price at the time of purchase (where a settlement or distribution has occurred after the purchase, referring to the time immediately after the most recent settlement or distribution) from the tax base standard price at the time of sale (meaning the amount calculated by excluding profits and losses not included in profits from a collective investment scheme pursuant to the main clause of Article 26-2(4), other than its subparagraphs, from the standard price under Article 238(6) of the Financial Investment Services and Capital Markets Act and, in cases of foreign collective investment securities under Article 279(1) of that Act for which no tax base standard price exists, the standard price under the main clause of Article 280(4) of that Act; hereafter the same shall apply in this paragraph), and then adding or subtracting the investor-specific untaxed profits or losses arising upon the most recent settlement or distribution. |
| 2. | The amount obtained by subtracting the actual acquisition price from the actual transfer price, and adding or subtracting the investor-specific untaxed profits or losses arising at the time of the most recent settlement or distribution. |
| (3) | The amount to be deducted from the calculated tax amount on a resident's global income or retirement income pursuant to Article 57-2(2)2 of the Act shall be the amount classified as follows: <Amended on Feb. 27, 2026> |
| 1. | Amount to be deducted from the calculated tax amount on global income: The amount calculated according to the following formula: |
┌──────────────────────────────┐
│ │
│ ( A × B ) + ( C × D ) + ( E × F ) │
│ │
│ (The withholding tax rate under Article 129(1) of the Act │
│ the aggregate of the calculated amounts │
│ B: dividend income adjustment coefficient │
│ C: with respect to income under Article 129(8)1a of the Act, aggregate of the amounts calculated pursuant to │
│ subparagraph 2 of that paragraph and paragraphs (9) and (10) of that Article │
│ D: interest income adjustment coefficient │
│ E: with respect to income under Article 129(8)1b of the Act, aggregate of the amounts calculated pursuant to │
│ subparagraph 2 of that paragraph and paragraphs (9) and (10) of that Article │
│ F: pension income adjustment coefficient │
└──────────────────────────────┘
| 2. | Amount to be deducted from the calculated tax amount on retirement income: With respect to income under Article 129(8)1d of the Act, the aggregate of the amounts calculated pursuant to subparagraph 2 of that paragraph and paragraphs (9) and (10) of that Article. |
| (4) | In applying paragraph (3)1, the dividend income adjustment coefficient, interest income adjustment coefficient, and pension income adjustment coefficient shall be as follows: <Amended on Feb. 27, 2026> |
| 1. | Dividend income adjustment coefficient |
┌────────────┬───────────────────────┐
│ standard income │ adjustment coefficient │
├─────────┼────────────────────┤
│ not more than 14 million won │ 1 │
├─────────┼────────────────────┤
│ exceeding 14 million won but not more than 50 million won │ 0.99 │
├─────────┼────────────────────┤
│ exceeding 50 million won but not more than 88 million won │ 0.88 │
├─────────┼────────────────────┤
│ exceeding 88 million won but not more than 150 million won │ 0.76 │
├─────────┼────────────────────┤
│ exceeding 150 million won but not more than 300 million won │ 0.72 │
├─────────┼────────────────────┤
│ exceeding 300 million won but not more than 500 million won │ 0.70 │
├─────────┼────────────────────┤
│ exceeding 500 million won but not more than 1 billion won │ 0.67 │
├─────────┼────────────────────┤
│ exceeding 1 billion won │ 0.64 │
└──────────────┴─────┘
| 2. | Interest income adjustment coefficient |
┌────────────┬───────────────────────┐
│ standard income │ adjustment coefficient │
├─────────┼────────────────────┤
│ not more than 14 million won │ 1 │
├─────────┼────────────────────┤
│ exceeding 14 million won but not more than 50 million won │ 0.89 │
├─────────┼────────────────────┤
│ exceeding 50 million won but not more than 88 million won │ 0.73 │
├─────────┼────────────────────┤
│ exceeding 88 million won but not more than 150 million won │ 0.53 │
├─────────┼────────────────────┤
│ exceeding 150 million won but not more than 300 million won │ 0.48 │
├─────────┼────────────────────┤
│ exceeding 300 million won but not more than 500 million won │ 0.44 │
├─────────┼────────────────────┤
│ exceeding 500 million won but not more than 1 billion won │ 0.40 │
├─────────┼────────────────────┤
│ exceeding 1 billion won │ 0.35 │
└──────────────┴─────┘
| 3. | Pension income adjustment coefficient: 0.89 |
| (5) | "Standard income" in paragraphs (4)1 and 2 means the amount calculated according to each of the following formula, respectively: <Added on Feb. 27, 2026> |
┌────────────────────────────┐
│ standard income = global income tax base - 20 million won - (amount of pension income │
│ - amount of pension contribution deduction - interest expense deduction for reverse mortgage-backed retirement pension system │
│ amount) - *other deductible amount │
│ * where the tax rate on capital gains is applied in calculating the calculated tax amount of a real estate dealer │
│ gains from sale of houses, etc. shall be deducted │
└────────────────────────────┘
| (6) | Where the whole or part of the indirect investment foreign corporate tax paid by an indirect investment company, etc. (where the indirect investment company, etc. makes an investment in a structure that involves acquiring securities issued by other indirect investment companies, etc., including the other indirect investment companies, etc.) is refunded after the relevant business year or accounting period, the indirect investment company, etc. shall pay such refunded amount to the head of the competent tax office having jurisdiction over the place for tax payment as prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
| (7) | In applying paragraph (6), a collective investment business entity managing the assets of an investment trust under the Financial Investment Services and Capital Markets Act shall be deemed to be acting on behalf of such investment trust. |
| (8) | Where a resident intends to claim a foreign tax credit for foreign taxes paid under Article 57-2(1) of the Act, he or she shall submit to the head of the competent tax office having jurisdiction over the place of tax payment, together with the final return on the tax base of global income tax under Article 70 of the Act, a statement for the calculation of the foreign tax credit for indirect investment companies, etc., as prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 28, 2025; Dec. 30, 2025> |
[This Article Added on Feb. 28, 2023]
[Title Amended on Feb. 27, 2026]
[Enforcement Date: Jul. 1, 2026]
| Article 118 (Tax credit for loss by disasters) |
| (1) | "Assets prescribed by Presidential Decree" in the former part of the main body of Article 58(1) of the Act means those falling under any of the following subparagraphs: <Amended on Feb. 22, 2008> |
| 1. | Assets for business (excluding the land); |
| 2. | Lost assets owned by others, for which the relevant business operator is liable for making up for such loss; |
| 3. | In cases where the amount of interest income or that of dividend in- come is contained in the tax base amount for the income tax subject to the tax credit for losses by disasters, the bank deposit, stocks and other assets related to such amounts of income. |
| (2) | In applying Article 58(1) of the Act, the rate of occurrence of the disasters shall be calculated by the book value as of the date of disaster occurrence; and if the book value is not be discernible due to destruction by fire or loss of the account book, such rate shall be calculated by the value as of the date the disaster occurred, which has been investigated and verified by the head of the competent tax office having jurisdiction over the place over tax payment. |
| (3) | Persons who intend to receive tax credit for losses by disasters under Article 58(1) of the Act shall submit an application for tax credit for losses by disaster determined by Decree of the Ministry of Finance and Economy (including submitting it by means of the Home Tax Service) to the head of the competent tax office having jurisdiction over the place for tax payment within the period falling under any of the following subparagraphs: <Amended on Apr. 1, 1998; Dec. 30, 2002; Mar. 17, 2004; Feb. 29, 2008; Feb. 15, 2022; Dec. 30, 2025> |
| 1. | In cases of income tax for which the deadline for a final return on tax base has not expired as of the date of disaster occurrence, its return deadline; provided, if the period from the date the disaster occurred to the deadline for return is less than three months, it shall be three months from the date of disaster occurrence; |
| 2. | In cases of unpaid income tax, and that payable, as of the date of disaster occurrence, three months from the date the disaster occurred. |
| (4) | The head of the competent tax office of disaster area shall investigate the loss rate of assets under Article 58(7) of the Act, and obtain approval from the commissioner of the competent regional tax office. <Amended on Dec. 30, 1995> |
| Article 118-2 (Tax credit for pension accounts) |
| (1) | A person who wishes to be eligible for the application of Article 59-3(1) of the Act shall submit a certificate of payments into pension accounts in the form prescribed by Decree of the Ministry of Finance and Economy to the relevant withholding agent, taxpayers' association, or the head of the competent tax office having jurisdiction over the place for tax payment, by the date specified in the subparagraphs of Article 113(1). <Amended on Dec. 30, 2025> |
| (2) | When applying paragraph (1), if documents evidencing tax credits have been submitted to the Commissioner of the National Tax Service under Article 216-3, the documents specified by Decree of the Ministry of Finance and Economy may be submitted by the date specified in the subparagraphs of Article 113(1). <Amended on Dec. 30, 2025> |
| (3) | "Such account is transferred to a pension account in a manner prescribed by Presidential Decree" in Article 59-3(3) of the Act means the cases where the whole or some of the balance of the relevant account is transferred to a pension account within 60 days from the date on which the contract term of an individual savings account expires. <Amended on Feb. 11, 2020> |
[This Article Added on Feb. 21, 2014]
| Article 118-3 (Special provisions concerning conversion of payments exceeding maximum tax credit for pension accounts into payments for pertinent year) |
| (1) | If a subscriber to a pension account requests the relevant pension account administrator to convert the whole or some of the amount on which no tax credit for the pension account has been granted under Article 59-3 of the Act, of the pension insurance premiums paid into the pension account during the preceding taxable period, the amount requested to be converted shall be deemed a pension insurance premium withdrawn from the pension account first and then paid into the pension account on the filing date of the request for the purpose of applying Article 59-3 of the Act, notwithstanding Article 40-3(2). In such cases, the amount requested to be converted shall meet the requirements of Article 40-2(2) as it is deemed a pension insurance premium paid into the relevant pension account on the filing date of the request. |
| (2) | The calculation of tax credit for a pension account on the amount filed for conversion pursuant to paragraph (1) shall follow the provisions, with the exception of the subparagraphs, of Article 59-3(1) of the Act. <Amended on Feb. 15, 2022> |
| (3) | Matters necessary to request conversion of pension insurance premiums paid under paragraph (1) shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 15, 2022; Dec. 30, 2025> |
[This Article Added on Feb. 21, 2014]
| Article 118-4 (Tax credit for insurance premiums) |
| (1) | "Insurance premiums for an insurance product prescribed by Presidential Decree for the protection only of a disabled person" in Article 59-4(1)1 of the Act means insurance premiums or mutual-aid premiums for an insurance product or a mutual aid contract referred to in any subparagraph of paragraph (2) and indicated as an insurance product or a mutual aid contract for the protection only of a disabled person on an insurance or mutual aid contract or on a receipt of the payment of insurance premiums or mutual-aid premiums. |
| (2) | "Insurance premiums for an insurance product prescribed by Presidential Decree" in Article 59-4(1)2 of the Act means such insurance premiums, guarantee fee or mutual-aid premiums of insurance, guarantee or mutual-aid falling under any of the following subparagraphs as prescribed by Decree of the Ministry of Finance and Economy: <Amended Feb. 13, 2018; Dec. 30, 2025> |
| 2. | Personal injury insurance; |
| 3. | Non-life insurance for insuring damage caused by a fire, theft, or other cause to a family; |
| 4. | Mutual aid contracts under the Fisheries Cooperatives Act, the Credit Unions Act, or the Community Credit Cooperatives Act; |
| 5. | Mutual aid contracts under the Military Personnel Mutual Aid Association Act, the Korean Teachers' Credit Union Act, the Public Officials Benefit Association Act, the Police Mutual Aid Association Act, or the Korea Fire Officials Credit Union Act; |
| 6. | Insurance and guarantee the purpose of which is to guarantee the return of a deposit for housing lease; provided, the foregoing provisions shall not apply where a deposit for lease subject to guarantee exceeds three hundred million won. |
[This Article Added on Feb. 21, 2014]
| Article 118-5 (Tax credit for medical expenses) |
| (1) | "Medical expenses prescribed by Presidential Decree" in Article 59-4(2) of the Act, means the following medical expenses (excluding actual damage insurance money received from a person falling under any subparagraph of Article 216-3(7); hereinafter the same shall apply in this Article) directly borne by an income earner: <Amended on Feb. 13, 2018; Feb. 12, 2019; Feb. 17, 2021; Feb. 29, 2024> |
| 1. | Expenses paid to a medical institution defined in Article 3 of the Medical Service Act for diagnosis, medical treatment, or prevention of a disease; |
| 2. | Expenses paid to purchase medicine defined in Article 2 of the Pharmaceutical Affairs Act (including oriental herbal medicine; hereinafter the same shall apply) for medical treatment or care; |
| 3. | Expenses paid to directly purchase or rent an assistive device for persons with disabilities (referring to an assistive device listed under Article 105 of the Enforcement Decree of the Restriction of Special Taxation Act) or a medical device (referring to a medical device defined in Article 2(1) of the Medical Devices Act) according to prescriptions from a doctor, dentist, oriental doctor, etc.; |
| 4. | Expenses paid to purchase dioptric glasses or contact lenses, not exceeding 500,000 won per year per person eligible for basic deduction under Article 50(1) of the Act (regardless of the age and limitations on income); |
| 5. | Expenses paid to purchase hearing aids; |
| 6. | The actual expenses incurred as the individual's co-payment for long-term care benefits pursuant to Article 40(1) and paragraph (3)3 of that Article of the Long-Term Care Insurance Act; |
| 6-2. | The actual expenses incurred as the individual's co-payment for activity support benefits pursuant to Article 33(1) and paragraph (2)2 of that Article of the Act on Support for Activities of Persons with Disabilities; |
| 7. | The expenses paid to a postpartum care center for postpartum care and recuperation under subparagraph 10 of Act 2 of the Mother and Child Health Act, within an amount not exceeding 2 million won per childbirth. |
| (2) | Expenses referred to in paragraph (1) shall not include costs for a cosmetic or plastic surgery and costs for purchasing medicine for health enhancement. |
| (3) | When a withholding agent submits a statement of payment of earned income of an income earner who has medical expenses eligible for special tax credit at the time of the year-end tax settlement for wage and salary income under Article 137, 137-2, or 138 of the Act, the withholding agent shall submit a statement of payment of medical expenses of the income earner to the head of the competent tax office on computerized magnetic tapes or diskettes. |
| (4) | "Patients specified as those suffering from a severe disease prescribed by Presidential Decree, a rare intractable disease, or tuberculosis" in Article 59-4(2)2e of the Act means persons prescribed by Decree of the Ministry of Finance and Economy who receive medical care benefits under subparagraph 3a3),b2) and e of Appendix 2 of the Enforcement Decree of the National Health Insurance Act. <Amended on Feb. 13, 2018; Feb. 15, 2022; Feb. 29, 2024; Dec. 30, 2025> |
| (5) | "Medical expenses paid for premature babies and congenitally deformed babies as prescribed by Presidential Decree" in the main clause of Article 59-4(2)3 of the Act means expenses falling under the following classifications: <Amended on Feb. 15, 2022> |
| 1. | In cases of premature babies under the Mother and Child Health Act: Medical expenses paid for the treatment recognized by the director of a public health clinic or the head of a medical institution that it is necessary to provide premature babies with special medical management and protection that are different from those for infants and young children because they are born with his or her physical development immaturely developed; |
| 2. | In cases of congenitally deformed babies under the Mother and Child Health Act: Medical expenses paid for the treatment of the relevant congenitally deformed diseases. |
| (6) | "Infertility treatment as prescribed by Presidential Decree" in the main clause of Article 59-4(2)4 of the Act means assisted reproductive technology defined in the Mother and Child Health Act. <Added on Feb. 15, 2022> |
[This Article Added on Feb. 21, 2014]
| Article 118-6 (Tax credit for educational expenses) |
| (1) | "Education expenses prescribed by Presidential Decree" in the main sentence of Article 59-4(3) of the Act, means the following educational expenses: <Amended on Feb. 3, 2017; Feb. 28, 2023> |
| 1. | Tuition fees, admission fees, childcare fees, lecture fees, and other school fees; |
| 2. | Meal charges paid to a school, kindergarten, day-care center, or a private teaching institute or a sports facility specified in Article 59-4(3)1d of the Act (applicable only to preschoolers) that provides meals under the School Meals Act, the Early Childhood Education Act, the Infant Care Act, etc.; |
| 3. | The costs of textbooks purchased from schools defined in Article 2 of the Elementary and Secondary Education Act; |
| 4. | The costs of school uniforms (applicable only to students enrolled in a secondary or high school, but the maximum amount eligible for a tax credit is 500,000 won per year per student); |
| 5. | Tuition fees and special activity expenses for an after-class schooling program or course provided by the following schools, etc. (including the costs of books purchased from schools, etc. and books purchased outside school for an after-class schooling course provided by an elementary, secondary, or high school): |
| a. | A school defined in Article 2 of the Elementary and Secondary Education Act; |
| b. | A kindergarten defined in subparagraph 2 of Article 2 of the Early Childhood Education Act; |
| c. | A day-care center defined in subparagraph 3 of Article 2 of the Infant Care Act; |
| d. | A private teaching institute or a sports facility specified in Article 59-4(3)1d of the Act (applicable only to preschoolers); |
| 6. | Expenses paid for field practice classes conducted as part of the curriculum of a school defined in Article 2 of the Elementary and Secondary Education Act (limited to 300,000 won per year per student); |
| 7. | Application fees for examinations under Article 34(3) of the Higher Education Act and admission fees under Article 34-4 of that Act. |
| (2) | "Education expenses prescribed by Presidential Decree" in the proviso to Article 59- 4(3) of the Act, means the following scholarships or financial aids (hereafter in this paragraph, referred to as "scholarships, etc.") received during the pertinent taxable period: |
| 1. | Scholarships, etc. received from an intra-company labor welfare fund established under the Framework Act on Labor Welfare; |
| 2. | Scholarships, etc. received from the enrolled school; |
| 3. | Scholarships, etc. that a student who is an income earner has received from his or her employer; |
| 4. | Other scholarships, etc. received from various organizations. |
| (3) | "Educational courses prescribed by Presidential Decree" in Article 59-4(3)1b2) of the Act, means educational courses evaluated and recognized by the Minister of Education as courses of study for credits recognizable under Article 3(1) of the Act on Recognition of Credits and educational courses defined in Article 9(1)4 of the Enforcement Decree of the Act on the Acquisition of Academic Degrees through Self-Education. <Amended on Feb. 3, 2015> |
| (4) | "Overseas educational institutions prescribed by Presidential Decree" in Article 59-4(3)1c of the Act, means educational institutions in a foreign country, which correspond to kindergartens under the Early Childhood Education Act and schools under the Elementary and Secondary Education Act or the Higher Education Act in the Republic of Korea. |
| (5) | "Students prescribed by Presidential Decree" in Article 59-4(3)1c of the Act, means students whose educational expenses are paid by residents who are citizens of the Republic of Korea as at the end of the pertinent taxable period (limited to persons described below, in cases of preschoolers and students enrolled in an elementary or secondary school): |
| 1. | A person qualified for studying abroad at his or her own expense under Article 5 of the Regulations on Studying Abroad; |
| 2. | A person studying abroad under Article 15 of the Regulations on Studying Abroad while living together with a person under obligation to support him or her for at least one year. |
| (6) | "Sports facilities prescribed by Presidential Decree" in Article 59-4(3)1d of the Act, means any of the following facilities: <Amended on Dec. 30, 2025> |
| 1. | A sports facility operated by a sports facility business operator under the Installation and Utilization of Sports Facilities Act (including sports facility business operators specified by Decree of the Ministry of Finance and Economy); |
| 2. | A sports facility operated by the State, a local government, or a person who operates (including commissioned operation) a facility permitted or registered as a juvenile training facility under the Juvenile Activity Promotion Act. |
| (7) | "Amount prescribed by Presidential Decree" in Article 59-4(3)1d of the Act, means the amount of tuition fees that a preschooler has paid for a monthly lesson program (limited to programs that provide at least one lesson per week) of a private teaching institute under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons or a sports facility under paragraph (6). |
| (8) | "Private teaching institutes prescribed by Presidential Decree" in Article 59-4(3)1e of the Act means private teaching institutes operating instructional courses in the field of arts pursuant to Appendix 2 of the Enforcement Decree of the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons. <Added on Feb. 27, 2026> |
| (9) | "Sports facilities prescribed by Presidential Decree" in Article 59-4(3)1e of the Act means any of the following sports facilities: <Added on Feb. 27, 2026> |
| (10) | "Amount prescribed by Presidential Decree" in Article 59-4(3)1e of the Act means tuition fees incurred for an elementary school student who is under 9 years of age or in the second grade or lower as of the end date of the taxable period to receive instruction in a course conducted on a monthly basis at a private teaching institute under paragraph (8) or a sports facility under paragraph (9) (limited to a course conducted at least once a week and, in the case of a private teaching institute under paragraph (8), limited to an instructional course in the field of arts under that paragraph). <Added on Feb. 27, 2026> |
| (11) | "Subsidy, etc. prescribed by Presidential Decree" in the proviso of Article 59-4(3)2c of the Act means subsidy for developing workplace skills of workers under Article 43 of the Enforcement Decree of the Employment Insurance Act. <Amended on Feb. 27, 2026> |
| (12) | "Student loans prescribed by Presidential Decree" in the main clause of Article 59-4(3)2d of the Act means the following student loans (limited to loans for tuition fees): <Added on Feb. 3, 2017; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Income contingent loans defined in subparagraph 2 of Article 2 of the Act on the Establishment of Korea Student Aid Foundation, and general student loans defined in subparagraph 3 of that Article; |
| 2. | Student loans granted through a program for providing student loans under Article 17(1)4 of the Enforcement Decree of the Special Act on the Quality Improvement of Life of Farmers and Fishers and Development Promotion of Agricultural and Fishing Villages; |
| 3. | Student loans that financial institutions transfer to the Korea Housing Finance Corporation incorporated under the Korea Housing Finance Corporation Act; |
| 4. | Student loans prescribed by Decree of the Ministry of Finance and Economy as similar to those specified in subparagraphs 1 through 3. |
| (13) | "Amount of the payments prescribed by Presidential Decree, including the amount additionally paid due to the late repayment of a loan" in the proviso of Article 59-4(3)2d of the Act, means any of the following amounts: <Added on Feb. 3, 2017; Feb. 27, 2026> |
| 1. | An amount additionally paid due to late repayment of principal and interest of a student loan under paragraph (12); |
| 2. | An amount fully or partially exempted, out of principal and interest of a student loan under paragraph (12); |
| 3. | An amount repaid with a subsidy from a local government or a public institution for a student loan, out of principal and interest of a student loan under paragraph (12). |
| (14) | "Special education expenses prescribed by Presidential Decree" in Article 59-4(3)3 of the Act means expenses paid for the educational rehabilitation of persons with disabilities (excluding the amount of subsidies provided by the State or a local government under the Act on Welfare Support for Children with Disabilities). <Amended on Feb. 3, 2017; Feb. 27, 2026> |
| (15) | "Social welfare facility or a non-profit corporation prescribed by Presidential Decree" in Article 59-4(3)3a of the Act means the following facility or corporation: <Amended on Feb. 3, 2017; Feb. 27, 2026> |
| 1. | A social welfare facility under the Social Welfare Services Act; |
| 2. | A nonprofit corporation established pursuant to the Civil Act and recognized by the Minister of Health and Welfare as an institution that provides educational programs for rehabilitating persons with disabilities. |
| (16) | "Institution prescribed by Presidential Decree" in Article 59-4(3)3b of the Act means an institution designated by a local government under Article 21(3) of the Act on Welfare Support for Children with Disabilities to provide developmental rehabilitation services. <Amended on Feb. 3, 2017; Feb. 27, 2026> |
| (17) | "Institutions prescribed by Presidential Decree" in the former part of Article 59-4(7) of the Act means any of the following institutions: <Added on Feb. 3, 2017; Dec. 29, 2017; Feb. 12, 2019; Feb. 17, 2022; Feb. 27, 2026> |
| 1. | The Korea Student Aid Foundation established under Article 6 of the Act on the Establishment of Korea Student Aid Foundation; |
| 2. | The Korea Housing Finance Corporation incorporated under the Korea Housing Finance Corporation Act; |
| 3. | The Korea Asset Management Corporation under the Act on the Establishment of Korea Asset Management Corporation. |
| (18) | "Data prescribed by Presidential Decree, such as details of student loans and of repayment of principal and interest thereon" in the former part of Article 59-4(7) of the Act means the following data: <Added on Feb. 3, 2017; Feb. 27, 2026> |
| 1. | Details of student loans and repayment of principal and interest by year; |
| 2. | Data deemed necessary by the Commissioner of the National Tax Service in connection with the applicability of deduction of educational expenses under Article 59-4(3) of the Act. |
[This Article Added on Feb. 21, 2014]
| Article 118-7 (Tax credit for donations) |
| (1) | Articles 79(4) and 81(3) through (6) shall apply mutatis mutandis where the amount of deductable donations made by a resident is deducted from the calculated tax amount for global income under Article 59-4(4) of the Act. <Amended Feb. 3, 2015> |
| (2) | When a withholding agent submits a statement of payments for a resident to whom the a charitable tax deduction has been given at the time of the year-end tax settlement of wage and salary income tax under Article 137, 137-2, or 138 of the Act or the year-end settlement of business income tax under Article 144-2 of the Act, the withholding agent shall submit the statement of donations of the resident to the head of the competent tax office on computerized magnetic tapes or diskettes. |
| (3) | "Persons prescribed by Presidential Decree, such as those specified in Article 73(1)4" in Article 59-4(4) of the Act, means business operators referred to in Article 73(1)4 of the Act. <Amended on Feb. 3, 2015> |
| (4) | If a resident who wishes to be eligible for a tax credit under Article 59-4(4) of the Act has business income, the amount of his or her global income shall be based on the amount of income before adding donations to the necessary expenses for the purpose of calculating the maximum limit under Article 59-4(4)2a of the Act. |
| (5) | Deleted. <Feb. 3, 2015> |
[This Article Added on Feb. 21, 2014]
| Article 118-8 (Scope of compliant business operators) |
| (1) | "A business operator who meets the requirements prescribed by Presidential Decree with regard to the reporting of business accounts, etc." in Article 59-4(9)2a of the Act means a business operator who meets all the following requirements: <Amended on Feb. 17, 2021; Dec. 30, 2025> |
| 1. | A business operator who meets any of the following requirements: |
| a. | A business operator who has membership as both a credit card member store and store that issues a credit card sales slip under Articles 162-2 and 162-3 of the Act; provided, a business operator who has been notified of his or her violation of Article 162-2(2) or 162-3(3) or (4) of the Act by the head of the competent tax office during the pertinent taxable period under the latter part of Article 162-2(4) or the latter part of Article 162-3(6) shall be excluded herefrom; |
| b. | A business operator specified by Decree of the Ministry of Finance and Economy, such as a business operator who has introduced a system for enterprise resources planning under subparagraph 1 of Article 5-2 of the Restriction of Special Taxation Act or a point-of-sale information management system under the Distribution Industry Development Act; |
| 2. | A business operator who records and keeps books of accounts in accordance with Article 160(1) or (2) of the Act and files a tax return based on the amount of income calculated by such books of accounts (if a decision to estimate, investigate, and determine the amount of income under the proviso to Article 80(3) of the Act is rendered, excluding the pertinent taxable period); |
| 3. | A business operator who reports a business account in accordance with Article 160-5(3) of the Act and uses such account for transactions of at least two-thirds of the amount for which the business account shall be used under Article 160-5(1) of the Act during the pertinent taxable period. |
| (2) | Matters necessary to make judgment on whether a person meets the requirement of paragraph (1)1 shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Added on Feb. 21, 2014]
| Article 119 (Calculation of common profits and losses) |
Where a person concurrently engages in business eligible for income tax reduction or exemption pursuant to Article 59-5(1) of the Act or other Acts and other business, the common necessary expenses and common income for the tax-reduced or tax-exempt business and such other business shall be calculated separately, as prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 21, 2014; Dec. 30, 2025>
[This Article Added on Feb. 18, 2010]
| Article 119-2 (Scope of income from overseas navigation) |
"Income obtained from overseas navigation business of ships and airplanes prescribed by Presidential Decree" in the main sentence of Article 59-5(1)2 of the Act means any of the following income: <Amended on Feb. 21, 2014>
| 1. | Income generated from normal business with the purpose of overseas navigation only; |
| 2. | Income generated from overseas navigation of ships or airplanes owned by a business operator under the time charter of a ship or time charter of an airplane (excluding bareboat charter or bareplane charter). |
[This Article Added on Jun. 8, 2010]
[Title Amended on Feb. 15, 2013]
| Article 119-3 (Methods of application where tax exemption or reduction or tax credit exceeds calculated tax amount) |
| (1) | "The calculated tax amount on global income for the resident's wage and salary income prescribed by Presidential Decree" in Article 61(1) of the Act, means an amount calculated by multiplying the calculated tax amount on global income for the relevant taxable period by the ratio of the earned income to the global income for the relevant taxable period. |
| (2) | "The calculated tax amount prescribed by Presidential Decree" in the main sentence of Article 61(2) of the Act, means an amount calculated by multiplying the calculated tax amount on global income for the relevant taxable period by the ratio of the sum of the interest income and dividend income subject to the withholding tax rate under Article 62 of the Act to the global income for the relevant taxable period. |
[This Article Added on Feb. 3, 2015]
SECTION 6 Special Cases in Calculation of Amount of Tax
| Article 120 (Special cases concerning calculations of tax on excess repayment from workplace mutual-aid association) |
| (1) | Where the repayment from a workplace mutual-aid association is made in installments, the calculated tax amount on the gain exceeding payments shall be calculated for the gain exceeding payments in accordance with Article 63(1) of the Act (hereinafter referred to as "calculated tax amount on the gain exceeding payments"). |
| (2) | The calculated tax amount on the additional gain on repayment for each installment shall be computed by multiplying the amount of subparagraph 1 below by the rate of subparagraph 2 below: |
| 1. | The additional gain accruing from repayment for each installment during the period of payment in installments; |
| 2. | The rate calculated by dividing the calculated tax amount on the gain exceeding payments by the gain exceeding payments. |
[This Article Wholly Amended Feb. 3, 2015]
| Article 121 Deleted. <Dec. 30, 2002> |
| Article 121-2 Deleted. <Dec. 30, 2003> |
| Article 122 (Special cases in calculation of amount of tax for realty dealers) |
| (1) | "Real estate trading business prescribed by Presidential Decree" in the part other than the subparagraphs of Article 64(1) of the Act means non-residential building construction business (only applicable to cases where he or she constructs and sells buildings for himself or herself) and real estate development and supply business according to the Korea Standard Industry Code; provided, residential building development and supply business (excluding cases of reselling purchased residential buildings; hereinafter referred to as "residential building development and supply business") in accordance with the Korea Standard Industry Code shall be excluded. <Added on Feb. 18, 2010; Dec. 30, 2010> |
| (2) | Marginal profits from the sale of a residential house, etc. under Article 64(1) of the Act shall be the amount calculated by subtracting the following amounts from the selling price of the relevant asset: <Amended on Feb. 28, 2007; Feb. 15, 2013; Feb. 13, 2018> |
| 1. | Necessary expenses of the transferred property calculated under the provisions of Article 163(1) through (3) and (5); |
| 2. | Basic deduction amount of capital gains under the provisions of Article 103 of the Act; |
| 3. | Amount of special deduction for long-term holding under Article 95(2) of the Act. |
| (3) | In applying the proviso to paragraph (1), residential buildings shall include land appurtenant thereto, the area of which is of the larger between the following two cases: <Added on Dec. 30, 2010> |
| 1. | Total floor space of a building (excluding the area of basement level, and parking lot on the ground floor, areas for evacuation and safety zones under Article 34(3) of the Enforcement Decree of the Building Act, and areas of common residential facilities under subparagraph 3 of Article 2 of the Regulations on Standards, etc. of Housing Construction; |
| 2. | The area equivalent to five times the area on which a building is founded (in cases of land outside the urban areas under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act, it shall be ten times). |
| (4) | In applying the proviso to paragraph (1), where buildings for other purposes, such as stores installed at a part of a residential building, or buildings with the same lot number (including other lot numbers within the complex equipped with the same residential conditions) for other purposes (hereafter referred to as "building for other purposes" in this paragraph), stand together with the relevant building, buildings for other purposes and land appurtenant thereto shall be deemed excluded from the category of residential building under the proviso to paragraph (1); and in any of the following cases, the building for other purposes and the land thereto shall be, in whole, deemed residential building under the proviso to paragraph (1). In such cases, Article 154(4) shall apply mutatis mutandis to the computation of the areas of land appurtenant to building: <Added on Dec. 30, 2010> |
| 1. | Where a residential building and a building for other purposes are traded by each unit of sales and purchase, and the area of a building for other purposes does not exceed 10/100 of that of the residential building; |
| 2. | Where a building for other purposes, appurtenant to a residential building and a residential building are traded as a single unit of sales and purchase, and the area of a building for other purposes is less than that of a residential building. |
| (5) | Where a residential building and a building for other purposes are newly built to be sold, each of such event shall be separately recorded in a book, and where necessary expenses are commonly involved, such expenses shall be apportioned, as prescribed by Decree of the Ministry of Finance and Economy. <Added on Dec. 30, 2010; Dec. 30, 2025> |
| (6) | The calculation of amount of tax under Article 64 of the Act and other necessary matters shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2010; Dec. 30, 2025> |
[This Article Added on Dec. 30, 2003]
| Article 122-2 (Special cases concerning calculation of business income with respect to house rental income subject to separate taxation) |
| (1) | "Rental house prescribed by Presidential Decree" in the proviso to Article 64-2(2) of the Act means the rental housing meeting all the following requirements (referred to as "registered rental house" in this Article): <Amended on Feb. 11, 2020; Oct. 7, 2020> |
| 1. | It shall be any of the following housing: |
| a. | A public-funded private rental house under subparagraph 4 of Article 2 of the Special Act on Private Rental Housing, which is rent by a person who has made registration of rental business entities under Article 5 of that Act; |
| b. | A long-term private rental house under subparagraph 5 of Article 2 of the Special Act on Private Rental Housing, which is rent by a person who has made registration of rental business entities under Article 5 of that Act [in cases of buy-to-rent private housing, which leases apartments, limited to those whose registration is applied (including the cases where a report for the change of the matters registered is submitted to add housing to be leased; hereafter in this paragraph, the same shall apply) pursuant to Article 5 of the previous Special Act on Private Rental Housing (referring to the Act before the Special Act on Private Rental Housing is partially amended by Act No. 17482; hereinafter the same shall apply) prior to July 10, 2020]; |
| c. | A short-term private rental house under subparagraph 6 of Article 2 of the previous Special Act on Private Rental Housing (limited those whose registration is applied prior to July 10, 2020), which is rent by a person who has made registration of rental business entities under Article 5 of that Act; |
| 2. | It shall be a rental house of the business entity under Article 168 of the Act; |
| 3. | The increasing rate of its rental deposit or fee (hereafter in this paragraph, referred to as "fee, etc.") shall not exceed 5/100. In such cases, the request for the increased amount of fees, etc. shall not be made within one year after the contract for lease is entered into or agreed fees, etc. are increased, and if a rental business entity mutually converses between rental deposit and monthly fees while claiming the increase of fees, etc., the provisions concerning conversion under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis. |
| (2) | In applying paragraph (1), where a short-term private rental house under subparagraph 6 of Article 2 of the previous Special Act on Private Rental Housing, which is registered pursuant to Article 5 of that Act, is changed into publicly-funded private rental housing or long-term private rental housing defined in subparagraph 4 or 5 of Article 2 of the Special Act on Private Rental Housing (hereinafter referred to as "long-term private rental housing, etc.") after January 1, 2020 pursuant to Article 5(3) of that Act, it shall be excluded from registered rental housing. <Added on Oct. 7, 2020> |
| (3) | "Cases prescribed by Presidential Decree, such as when the registration is canceled under Article 6(1)11 of the Special Act on Private Rental Housing" in the proviso, with the exception of the subparagraphs, of Article 64-2(3) of the Act means any of the following cases: <Added on Feb. 17, 2021> |
| 1. | Where the registration of a rental business entity is canceled pursuant to Article 6(1)11 or 6(5) of the Special Act on Private Retal Housing; |
| 2. | Where a house that is newly acquired due to the destruction of the original rental house as a result of a redevelopment project or reconstruction project defined in the Act on the Improvement of Urban Areas and Residential Environments and or small-scale housing improvement project under the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement or due to the remodeling under the Housing Act is an apartment referring to any housing if the original rental house is a short-term private rental house); provided, the cases where the 6 month anniversary of the completion of the newly acquired house is before July 10, 2020 shall be excluded herefrom. |
| (4) | In applying Article 64-2(3)1 or 2 of the Act, the calculation of the rental period shall be as follows: <Added on Feb. 17, 2021> |
| 1. | Article 64-2(3)1 of the Act: Calculated pursuant to Article 96(3) of the Enforcement Decree of the Act on Restriction on Special Cases concerning Taxation; |
| 2. | Article 64-2(3)2 of the Act: Calculated pursuant to Article 96(3)3 through 6 of the Enforcement Decree of the Act on Restriction on Special Cases concerning Taxation. |
| (5) | The tax amount to be paid because it falls under Article 64-2(3)1 of the Act shall be the amount applying the reduction rate according to the rental period pursuant to Article 96(6) of the Enforcement Decree of the Act on Restriction on Special Cases concerning Taxation to the tax amount reduced pursuant to the proviso of paragraph (1)1a of that Article. <Amended on Feb. 17, 2021> |
| (6) | The phrase "inevitable circumstances prescribed by Presidential Decree" in the proviso to Article 64-2(4) of the Act mean any of the following: <Amended on Oct. 7, 2020; Feb. 17, 2021> |
| 1. | Case of being unable to dispose of or rent a rental house as a result of bankruptcy or compulsory execution; |
| 2. | Case of being unable to dispose of or rent a rental house to perform any statutory duty; |
| 3. | Case of disposing of a rental house according with the permission of a court to the rehabilitation procedure under the Debtor Rehabilitation and Bankruptcy Act. |
| (7) | The calculation of house rental income under Article 64-2(5) of the Act shall be according to the following subparagraphs: <Amended on Oct. 7, 2020; Feb. 17, 2021> |
| 1. | When applying paragraph (1), the amount of income generated from rental business of registered rental house shall be calculated based on the number of months during a certain period less than a taxable period. In such cases, where the rental period for the month to which the commencement day or closing day the relevant rental period is at least 15 days, such rental period for that month shall be deemed one month; |
| 2. | Where a rental house is registered during the relevant taxable period, the amount of house rental income shall be calculated according to the following calculation formula |
┌──────────────────────────────────┐
│ [Amount of the income generated during the period of registration │
│ [Amount of the income generated during the period of registration │
│ [Amount of the income generated during the period of registration │
└──────────────────────────────────┘
| 3. | Where the amount of income is generated from a registered rental house and a house other than a registered rental house during the relevant taxable period, the amount which is additionally deducted if the global income in the relevant taxable period is not more than 20 million won, pursuant to Article 64-2(2) of the Act, shall be calculated according to the following calculation formula |
┌─────────────────────────────────┐
│ (The amount of income generated from a registered rental house │
│ / Total amount of house rental income x 4 million won) │
│ + (The amount of income generated from a house other than a registered rental house │
│ / Total amount of house rental income │
│ x 2 million won) │
│ │
└─────────────────────────────────┘
| (8) | A person who intends to have income tax deducted or exempted pursuant to the proviso to Article 64-2(1)2a of the Act or intends to calculate the amount of business income from registered rental houses pursuant to the proviso to paragraph (2) of that Article shall submit the evidential documents prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place of tax payment. <Amended on Oct. 7, 2020; Feb. 17, 2021; Dec. 30, 2025> |
[This Article Wholly Amended on Feb. 12, 2019]
SECTION 7 Interim Prepayment, Preliminary Return, and Payment of Tax
| Article 123 (Payment of tax by interim prepayment) |
"Income prescribed by Presidential Decree" in the former part of Article 65(1) of the Act means income falling under the following subparagraphs: <Amended on Dec. 30, 1995; Apr. 1, 1998; Dec. 29, 2000; Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Feb. 17, 2021; Dec. 30, 2025>
| 1. | Interest income, dividend income, wage and salary income, pension income or other income; |
| 2. | Income generated from clerical support service business in accordance with the Korea Standard Industry Code, such as shorthand, typewriting, etc., from among business income; |
| 3. | Income subject to occasional taxation under Article 82 of the Act from among business income; |
| 3-2. | House rental income subject to separate taxation under the former part of Article 14(3)7 of the Act; |
| 4. | Other income determined by Decree of the Ministry of Finance and Economy. |
| Article 124 (Notice of amount of tax by interim prepayment) |
A notice of the amount of tax by interim prepayment under Article 65(1) of the Act shall be issued by a written notice under the National Tax Collection Act. <Amended on Dec. 29, 2000; Feb. 19, 2005>
[Title Amended on Dec. 29, 2000]
| Article 125 (Report on estimated amount of interim prepayment, and investigation and decision) |
| (1) | Persons who intend to report on the estimated amount of interim prepayment under Article 65(3) or (5) of the Act shall submit a report on the estimated amount of interim prepayment determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Apr. 1, 1998; Dec. 29, 2000; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | In cases where persons who are to report on the amount of gross income during the period of interim prepayment under Article 65(5) of the Act have failed to make such report, the head of the competent tax office having jurisdiction over the place for tax payment may investigate and determine the relevant amount of gross income by applying mutatis mutandis Article 80 of the Act. <Amended on Dec. 29, 2000> |
| Article 126 Deleted. <Dec. 31, 1996> |
| Article 127 (Preliminary return on profit margin from sale and purchase of land and payment by real estate brokers) |
| (1) | Any person who intends to report profit margin from the sale and purchase of land, etc. under Article 69(1) of the Act shall submit a preliminary return on profit margin from the sale and purchase of land, etc. determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | In cases where a real estate broker intends to pay the preliminary tax on profit margin from sale and purchase of land, etc., he or she shall pay it to the competent tax office having jurisdiction over the place for tax payment, the Bank of Korea (including its agents; hereinafter the same shall apply) or a postal service office, submitting a return on profit margin from sale and purchase of land, etc., under paragraph (1) along with a written calculation of payment for preliminary return on profit margin from sale and purchase of land, etc. prescribed by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Dec. 30, 2003; Feb. 29, 2008;Feb. 18, 2010; Dec. 30, 2025> |
| Article 128 (Calculation of profit margin from sale and purchase of land, etc.) |
| (1) | Profit margin from sale and purchase of land, etc. under Article 69(3) of the Act shall be the amount calculated by deducting the amount falling under the following subparagraphs from the sale price of land, etc.: <Amended Dec. 31, 1998; Feb. 18, 2010> |
| 1. | The amount equivalent to necessary expenses for asset transferred, calculated pursuant to Article 163(1) through (5); |
| 2. | The interest on the amount apportioned to the construction on the relevant land, etc. calculated pursuant to Article 75; |
| 3. | The public imposts pursuant to the laws on account of sale of land, etc.; |
| 4. | The amount of special deduction for long-term retention under Article 95(2) of the Act. |
| (2) | When the book value of the land, etc. is revised by an evaluation increase, profit margin from sale and purchase thereof shall be calculated by the book value not revised by such evaluation increase. |
| (3) | Every real estate broker shall, where concurrently trading the land, etc. and other assets, separately enter them in the account book, and shall, where necessary expenses paid for common purposes exist, make a proportional allocation pursuant to the value of relevant assets. |
| Article 129 (Determination, revision and notification of profit margin from sale and purchase of land and amount of tax) |
| (1) | The profit margin from sale and purchase of land, etc. under Article 69 of the Act shall be calculated as follows: <Amended on Dec. 29, 2000; Feb. 18, 2010> |
| 1. | It shall be calculated based on documentary evidence that a real estate broker submits when making the preliminary return on profit margin from the sale and purchase of land, etc., or by an account book kept and entered and other documentary evidence; |
| 2. | In cases falling under any subparagraph of Article 143(1), it shall be the amount calculated by applying the provisions of paragraph (3) of the same Article to the sale price. |
| (2) | Upon applying paragraph (1)2, if it is possible to confirm the actual transaction price of sold land, etc., the actual transaction price shall be the sale price, and if it is impossible to confirm the actual transaction price, the amount of money obtained by calculating after applying in order the methods under each subparagraph of Article 176-2(3) shall be the sale price. In such cases, if the amount of transaction examples under Article 176-2(3)1 or the appraisal price under Article 176-2(3)2 is objectively deemed unfair as in cases such as the amount pursuant to the transaction with the related person under Article 98(1), such amount concerned shall not be taken into account. <Amended on Feb. 2, 2012> |
| (3) | With respect to those who have filed a preliminary return on profit margin from sale and purchase of land, etc., or paid preliminary tax on profit margin from sale and purchase of land, etc., pursuant to Article 69(1) of the Act, the head of the competent tax office having jurisdiction over the place for tax payment shall determine within one month from the date he or she files such return or pays such tax, and, with respect to those who have failed to file a preliminary return on profit margin from sale and purchase, shall immediately determine such profit margin from sale and purchase and the tax payable, and shall notify the relevant real estate broker thereof by applying Article 149 mutatis mutandis. <Amended on Feb. 18, 2010> |
| (4) | "The value converted in accordance with the methods prescribed by Presidential Decree" in Article 69(5) of the Act: <Added on Feb. 17, 2021; Feb. 15, 2022> |
| 1. | In cases of other assets under Article 94(1)4 of the Act, the value that is calculated in accordance with the following formula |
┌──────────────────────────┐
│ The actual transaction price, the value of transaction examples │
│ under Article 176-2(3)1 or the appraised prices under subparagraph 2 of that paragraph │
│ as at the time of transfer │
│ x (Standard market price as at the time of acquisition / │
│ Standard market price as at the time of transfer) │
└──────────────────────────┘
| 2. | In cases of rights to acquire land, building and real estate under Article 94(1)1 and 94(1)2a of the Act, the amount that is calculated in accordance with the following formula; in such cases, if the house acquired before the individual housing prices and multi-family housing prices under the Act on Public Announcement of Real Estate Values are transferred together with appurtenant land, it shall be the value calculating the basic price as of the acquisition in accordance with Article 164(7) among the following formula |
┌───────────────────────────┐
│ The actual transaction price, the value of transaction examples │
│ under Article 176-2(3)1 or the appraised prices under subparagraph 2 of that paragraph │
│ as at the time of transfer x (Standard market price as at the time of acquisition / │
│ Standard market price as at the time of transfer (in cases under Article 164(8), │
│ referring to the standard market price │
│ as at the time of transfer under that paragraph)) │
└───────────────────────────┘
SECTION 8 Final Return on Tax Base and Voluntary Payment
| Article 130 (Final return on tax base of global income) |
| (1) | A final return on the tax base of global income under Article 70(1) of the Act shall be based on the final return on the tax base and computation of global income tax prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| (2) | "Documents prescribed by Presidential Decree" in Article 70(4)1 of the Act means those falling under any of the following: <Amended on Dec. 30, 1995; Dec. 31, 1996; Feb. 28, 2007; Feb. 18, 2010; Dec. 30, 2010> |
| 1. | Deleted; <Jun. 12, 2006> |
| 1-2. | Documents under Article 106(10); |
| 2. | A certificate for persons with a disability under Article 107(2); |
| 2-2. | Documents under Article 108-3(2); |
| 3. | Documents under Article 113(1); |
| 4. | List of persons who have left temporarily and family members living together under Article 114(2); |
| 5. | Documents under Articles 80(4) and 80-2(6) of the Enforcement De- cree of the Restriction of Special Taxation Act. |
| (3) | "Documents prescribed by Presidential Decree" in Article 70(4)2 of the Act means the documents prescribed by Decree of the Ministry of Finance and Economy, such as a detailed statement of calculation of the amount of income, etc. <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| (4) | In cases of filing a report electronically under Article 5-2 of the Framework Act on National Taxes, the submission of the standard statement of financial position, the standard income statement, the standard particulars of costs, the standard total remaining amount, and the written calculation of adjustment prescribed by Decree of the Ministry of Finance and Economy may substitute the submission of the statement of financial position, the income statement and its attached documents, the trial balance of total remaining amount and the written calculation of adjustment under the provisions of Article 70(4)3 of the Act. <Added on Feb. 19, 2005; Feb. 29, 2008; Feb. 15, 2013; Dec. 30, 2025> |
| (5) | The head of the competent tax office having jurisdiction over the place for tax payment, upon receipt of a final return on tax base of the global income pursuant to Article 70 of the Act, shall confirm a certified transcript of resident registration card of a filer as of the end date of the relevant taxable period by using the administrative information sharing service under Article 36(1) of the Electronic Government Act; provided, where the filer does not consent to the confirmation or it is unascertainable, by his or her certified transcript of resident registration card, as to whether he or she has any dependent family member, the head of the competent tax office having jurisdiction over the place for tax payment shall have the person attach his or her certified transcript of resident registration card or certificate of a register of familial relationship thereto. <Amended on Dec. 31, 2008; Feb. 18, 2010; May 4, 2010> |
| Article 131 (Statement of adjustment) |
| (1) | A statement of adjustment defined in the main sentence of Article 70(4)3 of the Act (hereafter referred to as "statement of adjustment" in this Article), shall be documents prescribed by Decree of the Ministry of Finance and Economy, which are prepared to adjust the difference between the Act and corporate accounting in calculating the amount of income, such as the timing for attribution of income and necessary expenses, the acquisition and appraisal of assets and liabilities. <Added on Jun. 8, 2010; Dec. 30, 2025> |
| (2) | Deleted. <Feb. 17, 2016> |
| (3) | Documents prescribed by Decree of the Ministry of Finance and Economy shall be attached to a statement of adjustment. <Amended on Apr. 1, 1998; Feb. 29, 2008; Jun. 8, 2010; Dec. 30, 2025> |
| (4) | Deleted. <Feb. 17, 2016> |
| (5) | Any business operator who attaches a statement of adjustment prepared by a certified tax accountant, and who satisfies the requirements prescribed by Decree of the Ministry of Finance and Economy, may omit attaching the documents determined by the Commissioner of the National Tax Service among the documents under paragraph (3) to the statement of adjustment. In such cases, they shall be submitted if the head of the competent tax office or the commissioner of the competent regional tax office having jurisdiction over the place for tax payment, makes by a written request for submission of the documents which are not attached, as he or she deems them necessary for the analyses, etc. of the details of returns. <Added on Dec. 31, 1997; Apr. 1, 1998; Feb. 29, 2008; Jun. 8, 2010; Dec. 30, 2025> |
| Article 131-2 (Scope of business operators subject to external tax adjustment) |
| (1) | "The business operators prescribed by Presidential Decree" in Article 70(6) of the Act, means the following business operators (hereafter in this Article, referred to as "business operators subject to external tax adjustment"): <Amended on Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021> |
| 1. | A business operator whose revenue for the immediately preceding taxable period (including revenue increased due to determination or revision, but excluding revenue generated from the transfer of business-use tangible assets under Article 19(1)20 of the Act) is at least the standard amount of revenue for each of the following types of business. In such cases, the revenue of a business operation who concurrently engages in at least two types of business referred to in items a through c or who has at least two places of business shall be computed by applying Article 208(7) mutatis mutandis: |
| a. | Agriculture, forestry, fisheries, mining, wholesale, retail business (excluding brokerage of commodities), real estate trading business under Article 122(1), or any business that does not fall under item b or c: 600 million won; |
| b. | Manufacturing business, lodging or restaurant business, electricity, gas, steam and air conditioning and supply business, water supply business, sewage or waste treatment business, raw material recycling business, construction business (excluding construction business for non-residential buildings, but including the business of developing and supplying residential buildings), transportation business and warehousing business, information and communications business: 300 million won; |
| c. | Real estate leasing business under Article 45(2) of the Act, real estate business (excluding real estate sale business under Article 122(1)), specialized, scientific, and technical service business, business facility management, business supporting service business and leasing service business, educational service business, public health business, social welfare service business, service business related to arts, sports, or recreation, an association or organization of such businesses, repair business or other personal service business, or intra-household employment activities: 150 million won; |
| 2. | Any of the following business operators subject to double-entry bookkeeping: |
| a. | A person whose tax base and amount of income tax on income for the immediately taxable period became subject to an estimated decision or estimated correction; |
| b. | A business operator who commenced business operations during the immediately preceding taxable period; provided, the business operators who fall under Article 208(5)2, among those referred to in Article 147-2 hereof or Article 109(2)7 of the Enforcement Decree of the Value-Added Tax Act, shall be excluded herefrom; |
| c. | A business operator who became eligible for tax credits, tax reductions, or income deductions for the tax base and amount of income tax under the Restriction of Special Taxation Act; provided, any business operator who became eligible for the application of only one of Articles 7, 86-3, and 104-8 of the Restriction of Special Taxation Act, shall be excluded herefrom. |
| (2) | Any business operator who does not fall under paragraph (1)1 or 2 may submit an adjusted account statement prepared by the persons referred to in any subparagraph of Article 70(6) of the Act (hereinafter referred to as "certified tax accountants, etc.") in order to ensure accurate tax adjustment, along with a final return filed for tax base of global income. |
[This Article Added on Feb. 17, 2016]
| Article 131-3 (Adjustment team) |
| (1) | "The adjustment team prescribed by Presidential Decree" in Article 70(6) of the Act (hereafter in this Article, referred to as "adjustment team") means any of the following persons designated by the commissioner of the competent regional tax office with a representative appointed by themselves. In such cases, certified tax accountants, etc. shall belong to only one adjustment team: <Amended on Feb. 15, 2022> |
| 1. | A least two certified tax accountants, etc.; |
| 4. | A law firm, limited liability law firm or law firm partnership established under the Attorney-at-law Act. |
| (2) | A corporation, etc. referred to in paragraph (1)2 or 4 shall have at least two certified accountants, etc. who belong to it in preparing an adjusted account statement under Article 70(4)3 of the Act. <Amended on Feb. 15, 2022> |
| (3) | The application for, designation of, designation, revocation of designation of, the period of validity of, an adjustment team referred to in paragraph (1), and other necessary matters, shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Added on Feb. 17, 2016]
| Article 132 (Detailed statement of received receipts) |
| (1) | Deleted. <Dec. 31, 1998> |
| (2) | Deleted. <Feb. 2, 2012> |
| (3) | The specification of the reception of receipts under Article 70(4)5 of the Act shall be the detailed statement including receipts exceeding 30,000 won per transaction other than bills, tax invoices, credit card sales slips, and cash receipts under each subparagraph of Article 160-2(2) of the Act as prescribed by Decree of the Ministry of Finance and Economy. <Amended Feb. 4, 2009; Dec. 30, 2025> |
| (4) | "Small-scale business operator prescribed by Presidential Decree" in Article 70(4)5 of the Act means any of the following business operators: <Added on Feb. 28, 2007;Feb. 18, 2010> |
| 1. | A business operator commencing a new business in the relevant taxable period; |
| 2. | Any business operator whose amount of business income in the preceding taxable period (including the amount of income increased by determination or correction) is less than 48 million won; |
| 3. | Any business operator to whom Article 73(1)4 of the Act is applicable. |
[Title Amended on Feb. 2, 2012]
| Article 133 (Submission of certificate of confirmation of compliant filing) |
| (1) | "Business operator whose income for each type of business exceeds a certain level prescribed by Presidential Decree" in Article 70-2(1) of the Act, means a business operator whose aggregate amount of income (excluding income generated from the transfer of business-use tangible assets under Article 19(1)20 of the Act) in the relevant taxable period exceeds the amount classified as follows (hereafter referred to as "business operator subject to confirmation of compliant filing" in this Article); provided, in cases of business operators engaging in enterprise services under Appendix 3-3 among those who engage in business falling under subparagraph 1 or 2, it refers to the business operators of at least the amount specified in subparagraph 3: <Amended on Feb. 2, 2012; Feb. 15, 2013; Jun. 11, 2013; Feb. 13, 2018; Feb. 11, 2020> |
| 1. | Agriculture, forestry, fishery, mining, wholesale and retail business (excluding commodities brokerage service), real estate sale business under Article 122(1), and any other business not falling under subparagraph 2 or 3: 1, 500 million won; |
| 2. | Manufacturing business, lodging and restaurant business, electric power, gas, steam, and air conditioning and supply business, water supply business, sewage or waste treatment business, raw material recycling business, construction business (excluding non-residential building construction business, but including residential building development and supply business), transportation business and warehousing business, information and communications business, financial business and insurance business, and commodities brokerage service: 750 million won; |
| 3. | Real estate leasing service under Article 45(2) of the Act, real estate business (excluding real estate sale business under Article 122(1)), specialized, scientific, and technical services, business facility management, business supporting service business and leasing service business, educational services, health and social welfare services, art, sports, and leisure-related services, associations and organizations, repair and other personal services, and activities employing family members: 500 million won. |
| (2) | In applying paragraph (1), if a business operator concurrently engages in at least two of types of business referred to in paragraph (1)1 through 3, or has at least two places of business, Article 208(7) shall apply mutatis mutandis to the calculation of revenue. <Amended on Feb. 3, 2017> |
| (3) | "Person prescribed by Presidential Decree, such as a tax accountant" in Article 70-2(1) of the Act, means a certified tax accountant (including a certified public accountant registered pursuant to Article 20-2 of the Certified Tax Accountant Act; hereafter the same shall apply in this Article), tax firm, or accounting firm (hereafter referred to as "tax accountant, etc." in this Article). |
| (4) | Where a tax accountant corresponds to a business operator subject to confirmation of compliant filing, he or she shall not prepare and submit the certificate of confirmation of compliant filing with respect to the propriety of his or her business income. |
| (5) | Deleted. <Feb. 11, 2020> |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for the form and submission, etc. of a certificate of confirmation of compliant filing shall be determined by the Minister of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Added on Jun. 3, 2011]
| Article 134 (Additional return) |
| (1) | Where a person who has not been liable to file a final return on the tax base of global income, any person who is not required to file a final return on the tax base, or any person who has filed a final return on the tax base is liable to pay income tax additionally because there is a change in the amount of income on account of disposition of the amount included in the earnings as dividends, bonuses or other income for which a corporation files a return on the tax base of a corporate tax under the Corporate Tax Act after the expiry of the deadline for the final return on the tax base of global income or the head of a tax office determines or corrects the tax base of corporate tax, if the relevant corporation (where a resident receives the notification pursuant to the proviso of Article 192(1), referring to such resident) has filed an additional return and made payment by the end of two months after the month in which the date of receipt of a notice on the change in the amount of income under that paragraph arrives (where the amount of income is changed due to a tax return filed by a corporation pursuant to the Corporate Tax Act, referring to the date of return on a corporate tax by such corporation), it shall be deemed to have filed a return and made payment by the deadline under Article 70 or 74 of the Act. <Amended on Feb. 18, 2010> |
| (2) | Where a person who has filed a final return on the tax base of gross income makes an additional report as a change has occurred in the gross income amounts of the relevant revenue after the expiry of report deadline, among the matters reported within the relevant report deadline, because the price of goods has been raised by the permission, authorization or approval of the Government, it shall be deemed to have been reported under Article 70 or 74 of the Act. |
| (3) | When any person who has filed a final return on the tax base of global income in accordance with the statement of payment of other income provided by the Commissioner of the National Tax Service pursuant to Article 164(10) of the Act files an additional return of income tax due to errors, etc. in such details provided (including cases where a person, upon receiving a notice under the latter part of Article 215(7), files an additional return before the end of two months after the month in which the date of receipt of such notice falls), he or she shall be deemed to have filed the return by the deadline under Article 70 or 74 of the Act. <Amended on Feb. 18, 2010; Feb. 17, 2021; Feb. 28, 2023> |
| (4) | Where a person who has filed the final return on the tax base of global income becomes obliged, after the deadline of the final return elapsed, to pay additional income tax due to altered income amount caused by receiving at a time his or her salary for the period of unfair dismissal pursuant to the court’s decision, reconciliation, etc. and he or she has additionally returns by the last day of the month after next of the month to which the date of receipt of the withholding tax receipts for wage and salary income pursuant to the court’s decision, etc. belongs, he or she shall be deemed to have returned by the deadline under Article 70 or 74. <Added on Feb. 2, 2012; Feb. 17, 2021> |
| (5) | Where a person applies for reduction or exemption of tax when filing an additional return pursuant to paragraphs (1) through (4), he or she shall be deemed to have applied for the tax reduction or exemption pursuant to Article 75(1) of the Act. <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 17, 2021> |
| (6) | Where a person who files an additional return pursuant to paragraphs (1) through (4) has the amount of tax to be paid, he or she shall pay such amount by the deadline for additional return under paragraphs (1) through (4). <Added on Feb. 17, 2021> |
| (7) | Where a person pays the amount of tax by the deadline for additional return under paragraphs (1) through (4) pursuant to paragraph (6), he or she shall be deemed to have paid by the deadline for the final return on tax base pursuant to Article 76 of the Act. <Added on Feb. 17, 2021> |
[Title Amended on Feb. 17, 2021]
| Article 135 (Final return on tax base of retirement income) |
Any person who intends to file a final return on the tax base of retirement income pursuant to Article 71(1) of the Act shall submit the final return on the tax base and computation of retirement income prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Dec. 30, 2025>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 136 Deleted. <Feb. 28, 2007> |
| Article 137 (Exception to final return on tax base) |
| (1) | "Business income prescribed by Presidential Decree" in Article 73(1)4 of the Act means the relevant business income received by any person subject to simple bookkeeping under Article 160(3) of the Act, who falls under any of the following; provided, business income received by a business operator under subparagraphs 2 and 3 shall be only applicable to business income for which the relevant withholding agent has made the year-end tax settlement pursuant to Article 144-2 of the Act and Article 201-11 of this Decree: <Amended on Dec. 29, 2000; Feb. 18, 2010; Jun. 8, 2010; Dec. 30, 2010; Feb. 15, 2013> |
| 1. | Any person who provides with an independent qualification such services as inviting the subscription to insurances and those incidental thereto, and receives the solicitation allowance, etc. according to his or her achievements; |
| 2. | Any person who performs the door-to-door distributing business on behalf of a door-to-door distributor under the Door-to-Door Sales Act, and receives the sales allowances, etc. according to his or her performances or who joins a sponsor door-to-door distributing business organization as a sales clerk and receives sales allowances for performing the sponsor door-to-door distributing business; |
| 3. | A person who receives sale allowances based on the record of sale performance by providing services of sale for contractual delivery to deliver beverage goods to general customers, without opening a place of business, in his or her independent capacity; |
| (2) | Deleted. <Dec. 30, 2010> |
| (3) | Deleted. <Dec. 30, 2010> |
| (4) | Deleted. <Dec. 30, 2010> |
[Title Amended on Feb. 18, 2010]
| Article 137-2 (Special cases concerning final return on tax base) |
| (1) | Any taxpayer wishing to file a return on the tax base of the inheritee pursuant to the main sentence of Article 74(1) of the Act shall submit documents prescribed by Decree of the Ministry of Finance and Economy with the final return on tax base to the head of the competent tax office having jurisdiction over place for tax payment. <Amended Feb. 15, 2013; Dec. 30, 2025> |
| (2) | Where two or more inheritors exist, they may submit a single return under paragraph (1) with joint signature of each inheritor placed thereon, or with other inheritors' names written thereon by each inheritor. |
[This Article Wholly Amended on Dec. 30, 2010]
| Article 138 (Application for tax reduction or exemption) |
| (1) | Any person who intends to have tax on income generated from overseas navigation business reduced or exempted under Articles 59-5(1)2 and 75(1) of the Act shall submit to the head of the competent tax office having jurisdiction over the place for tax payment an application for tax reduction or exemption in the form prescribed by Decree of the Ministry of Finance and Economy, along with the final return on the tax base. <Amended on Feb. 18, 2010; Feb. 21, 2014; Dec. 30, 2025> |
| (2) | Any person who intends to have tax on income from wages and salaries reduced or exempted under Articles 59-5(1)1 and 75(2) of the Act shall submit an application for tax reduction or exemption prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office responsible for charging withholding tax, through the person who pays wage and salary income in the Republic of Korea, by not later than the tenth day of the month following the month in which such reduction or exemption is sought. <Amended on Apr. 1, 1998; Dec. 31, 1998; Feb. 29, 2008;Feb. 18, 2010; Feb. 21, 2014; Dec. 30, 2025> |
| Article 139 (Payment of tax by final return on tax base) |
| (1) | Any person who file a final return on the tax base and pays a tax pursuant to Article 76(1) of the Act shall pay it to the head of the competent tax office having jurisdiction over the place for tax payment, along with the final return on the tax base, or pay it to the Bank of Korea or a postal service office, submitting a statement of payment under the National Tax Collection Act. <Amended on Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010> |
| (2) | Deleted. <Feb. 4, 2009> |
[Title Amended on Feb. 18, 2010]
| Article 140 (Installment payment of income tax) |
Taxes which may be paid in installments under Article 77 of the Act shall be as follows:
| 1. | In cases where the amount of tax payable does not exceed 20 million won, the amount in excess of ten million won; |
| 2. | In cases where the amount of tax payable exceeds 20 million won, the amount not exceeding 50/100 of the relevant amount of tax. |
SECTION 9 Report and Verification on Current Status of Places of Business
| Article 141 (Reporting on present condition of places of business and investigation and verification thereon) |
| (1) | The report on the current status of the place of business under Article 78 of the Act shall be made on the report form on the current status of the place of business determined by Decree of the Ministry of Finance and Economy, and in cases of the place of business which the Commissioner of the National Tax Service deems necessary for the management of the characteristics of business type or of tax resources, the relevant documents shall be attached with the particulars of amount of revenue and the related data. <Amended on Dec. 30, 1995; Apr. 1, 1998; Dec. 31, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | "Matters prescribed by Presidential Decree" in Article 78(2)4 of the Act means the following matters: <Added on Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Feb. 12, 2019; Dec. 30, 2025> |
| 1. | Details of the means of paying the amount of revenue; |
| 2. | Details of receipts of account statements, tax invoices, credit card sales slips, and cash receipts; |
| 3. | Other matters prescribed by Decree of the Ministry of Finance and Economy, which is related to status of the places of business. |
| (3) | A business operator having two or more places of business shall make the report on current status of place of business by place of business. <Amended on Dec. 31, 1998; Feb. 28, 2007> |
| (4) | "business operator prescribed by Presidential Decree, such as a person who files a return on the amount of income by joining a taxpayers' association" in Article 78(3) of the Act means a person falling under any of the following subparagraphs: <Added on Feb. 12, 2019; Dec. 30, 2025> |
| 1. | A person who joins a taxpayers association and files a the amount of income; |
| 2. | A person who provides services of soliciting policy holders and other services incidental thereto, and receives subscription allowances, etc. based on the record of performance; |
| 3. | A person who receives sale allowances based on the record of sale performance by providing services of sale for contractual delivery to deliver beverage goods to general customers, without opening a place of business, in his or her independent capacity; |
| 4. | Other persons prescribed by Decree of the Ministry of Finance and Economy, who are similar to one falling under any of subparagraphs 1 through 3. |
| (5) | The head of the competent tax office having jurisdiction over the relevant place of business or the commissioner of the competent regional tax office may investigate and confirm the current status of place of business in cases where there exist any of the following causes: <Amended on Dec. 31, 1997; Dec. 31, 1998; Feb. 28, 2007; Feb. 12, 2019> |
| 1. | Where a report on the current status of place of business under Article 78 of the Act is not made; |
| 2. | Where it is admitted that the important parts of basic matters, such as the current status of facilities, personnel expenses, revenue amount from among the contents of a report on the current status of place of business, are insufficient or false; |
| 3. | Where it is admitted that the particulars of giving and receiving the statement of sale and purchase are significantly different from the facts; |
| 4. | Where a business operator suspends or closes his or her business. |
[Title Amended on Dec. 31, 1998]
SECTION 10 Determination, Revision, Collection and Refund
| Article 142 (Determination and revision of tax base and amount of tax) |
| (1) | The determination and reassessment of the tax base and the amount of tax under Article 80 of the Act shall be made in principle by the final return on the tax base and its attached documents, or by the actual investigations. |
| (2) | The determination under Article 80(1) of the Act shall be completed within one year from the deadline for the final return on the tax base; provided, the same shall not apply in cases where the Commissioner of the National Tax Service separately decides the investigation period or where obtaining approval from the Commissioner of the National Tax Service due to extenuating circumstances. |
| (3) | "Unjustifiable means prescribed by Presidential Decree, such as receiving false receipts, etc." in Article 80(2)3 of the Act means cases falling under any of the following subparagraphs: <Added on Feb. 22, 2008; Feb. 18, 2010> |
| 1. | Preparation and submission of fraudulent evidentiary data or fraudulent documents; |
| 2. | Receipt (limited to receipt knowing that it is fraudulent) and submission of fraudulent evidentiary data or fraudulent documents. |
| Article 143 (Determination and revision based on estimation) |
| (1) | "Reasons prescribed by Presidential Decree" in the proviso to Article 80(3) of the Act, means any of the following cases: <Amended on Feb. 18, 2010; Feb. 12, 2019> |
| 1. | Where books of account and documentary evidence necessary for calculating the tax base are missing or any important parts thereof such as the amount of income or major expenses is not kept and preserved, or is false in the light of the content of reports, etc. filed by other business operators of the same type of business under the Korean Standard Industrial Classification; |
| 2. | Where it is obvious that the details of bookkeeping are false, determining based on the scale of facilities, number of employees, market price of raw materials, merchandize, or products, and various dues and charges; |
| 3. | Where it is obvious that the details of bookkeeping are false, determining based on the volume of raw materials used, volume of electricity used, and other operational conditions. |
| (2) | Where the tax base is determined or corrected according to estimation under the proviso to Article 80(3) of the Act, the amount of tax base shall be calculated by making personal deductions and special income deductions under Articles 50, 51, and 52 of the Act from the amount of income assessed under paragraph (3). <Amended on Feb. 21, 2014> |
| (3) | Where the amount of income is determined and reassessed by estimation pursuant to the proviso to Article 80(3) of the Act, it shall be by the following methods; provided, subparagraph 1-2 shall apply only to those subject to the simplified expense rate: <Amended on Dec. 30, 1995; Dec. 29, 2000; Dec. 30, 2002; Feb. 9, 2006; Feb. 22, 2008; Feb. 18, 2010; Jun. 8, 2010; Dec. 30, 2010; Feb. 15, 2013; Feb. 17, 2016; Feb. 12, 2019; Feb. 11, 2020; Feb. 15, 2022; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | The method of determining or revising, as the relevant amount of income (hereafter in this Article, referred to as "standard amount of income"), the amount obtained by deducting the aggregate (if the aggregate exceeds the amount of income, the exceeded amount thereof shall be excluded) of amounts referred to in the following items from the amount of income. In such cases, if the amount to be deducted exceeds the amount of income, such excess shall be deemed non-existent; provided, where the standard amount of income is not less than the amount calculated by multiplying the amount of income under subparagraph 1-2 by the multiplying factor prescribed by Decree of the Ministry of Finance and Economy, the amount calculated by multiplying such multiplying factor may be determined as the amount of income until the amount of income is determined or corrected during the taxable period to which December 31, 2027 belongs: |
| a. | Purchase costs (excluding those for business-use tangible and intangible assets; hereafter the same shall apply in this Article) and rent expenses on business-use tangible and intangible assets paid or payable based on documentary evidence; |
| b. | Pays, wages, and retirement benefits for employees paid or payable based on documentary evidence; |
| c. | The amount obtained by multiplying income by standard expense rate; provided, in cases of a person liable to double-entry bookkeeping, the amount of income, multiplied by 1/2 of standard expense rate; |
| 1-2. | The method of determining or revising, as the relevant amount of income (excluding those prescribed by Decree of the Ministry of Finance and Economy as the amount to support partial expenses necessary to maintain employment of companies, which are paid by the Minister of Employment and Labor pursuant to Article 29 of the Framework Act on Employment Policy, the amount obtained by deducting the outcome of multiplying the amount of income by a simplified expense rate from the income amount; |
| 1-3. | The method of determining or revising the amount calculated by multiplying the amount of business income prescribed in Article 73(1)4 of the Act (hereinafter referred to as "business income subject to the year-end tax settlement") by the income rate for business income subject to the year-end tax settlement prescribed in Article 201-11(4) as the amount of such income; |
| 2. | The method of determining or revising the relevant amount of income by referring to the amount of income of other business operators in the same business type deemed to make the most accurate bookkeeping, where the standard expense rate or the simplified expense rate is undetermined, or where the books of account or other documentary evidence is missing or destroyed due to natural disasters and other force majeure; provided, the amount of income shall be determined or revised by the return under Article 70 of the Act and its attached documents where no business operator exists in the same business type and where the books of account, etc. are missing or destroyed after the final return on tax base, and by the income rate during the immediately preceding taxable period where the books of account, etc. are missing or destroyed before the final return on tax base; |
| 3. | Other methods which the Commissioner of the National Tax Service deems reasonable. |
| (4) | "Persons subject to simplified expense rate" in the proviso to paragraph (3), with the exception of its subparagraphs, means any of the following business operators whose income during the relevant taxable period is below the amount specified in each item of Article 208(5)2: <Added on Dec. 29, 2000; Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010; Dec. 30, 2010; Jun. 3, 2011; Feb. 15, 2013Feb. 13, 2018; Feb. 28, 2023; Feb. 29, 2024> |
| 1. | A business operator commencing a new business in the relevant taxable period; |
| 2. | Any business operator whose aggregate of amount of income in the preceding taxable period (including the amount of income increased by a determination or revision) is below the following amounts: |
| a. | Agriculture, forestry, fishery, mining, wholesale and retail business (excluding commodities brokerage service), real estate sale business under Article 122(1), and any other business not falling under item b or c: 60 million won; |
| b. | Manufacturing business, lodging and restaurant business, electric power, gas, steam, and air conditioning and supply business, water supply business, sewage or waste treatment business, raw material recycling business, construction business (excluding non-residential building construction business), real estate development and supply business (limited to the business of development and supply of residential buildings), transportation business and warehousing business, information and communications business, financial business and insurance business, commodities brokerage services, and repair and other personal service (including only personal services under subparagraph 1 of the Enforcement Decree of the Value-Added Tax Act): 36 million won; |
| c. | Real estate leasing service under Article 45(2) of the Act, real estate business (excluding real estate sale business under Article 122(1)), specialized, scientific, and technical services, business facility management, business supporting service business and leasing service business, educational services, health and social welfare services, service industry related to art, sports, and leisure, associations and organizations, repair and other personal services (excluding personal services under subparagraph 1 of Article 42 of the Enforcement Decree of the Value-Added Tax Act), and family-employed activity: 24 million won. |
| (5) | The Commissioner of the National Tax Service shall determine the scope of purchase costs and rental expenses for business-use tangible and intangible assets under paragraph (3)1a and the kinds of documentary evidence under paragraph (3)1a and b. <Added on Dec. 29, 2000; Feb. 11, 2020> |
| (6) | In applying paragraph (4)2, if a person concurrently operates at least two of types of business falling under paragraph (4)2a through c or has at least two places of business, it shall be governed by the amount of income computed by applying Article 208(7) mutatis mutandis. <Added on Dec. 29, 2000; Feb. 9, 2006; Feb. 22, 2008> |
| (7) | Notwithstanding paragraph (4), none of the following business operators shall be included in persons eligible for a simplified expense rate: <Added on Feb. 28, 2007; Feb. 4, 2009; Feb. 18, 2010; Jun. 28, 2013; Feb. 11, 2020> |
| 1. | A business operator falling under Article 147-2; |
| 2. | A person who engages in business falling under Article 109(2)7 of the Enforcement Decree of the Value-Added Tax Act; |
| 3. | A business operator who is not an Issuer of Cash Receipts, although he or she is obligated to register as an Issuer of Cash Receipts in accordance with Article 162-3(1) of the Act (limited to the taxable period during which he or she holds no membership); |
| 4. | A business operator who violates Article 162-2(2), 162-3(3) or (4) of the Act in the relevant taxable period and is notified by the head of the competent tax office at least three times and the aggregate of such amount exceeds one million won, or at least five times in the relevant taxable period pursuant to the latter part of Article 162-2(4) or the latter part of Article 162-3(6) of the Act (limited to the relevant taxable period in which the date of such notification falls). |
| (8) | When the amount of income of those who have the appropriated money and reserve funds to be included in the total amount of income under the Act or other Acts, is determined or revised through estimation pursuant to the proviso to Article 80(3) of the Act, the appropriated money and reserve funds to be included in the total amount of income in the relevant taxable period shall be added to the amount of income assessed pursuant to paragraph (3). <Amended on Dec. 30, 1995; Feb. 28, 2007; Feb. 18, 2010> |
| (9) | Where a person fails to submit evidentiary documents in accordance with paragraph (3)1a, he or she shall submit a detailed statement on expenditure of major expenses prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 15, 2013; Dec. 30, 2025> |
| Article 144 (Calculation of amount of income at time of estimation, determination, and revision) |
| (1) | Where the amount of income of a business operator cannot be calculated by the books and other documentary evidences, such amount of income shall be governed by the amount calculated by any of the following methods: <Amended on Dec. 31, 1997; Dec. 31, 1998; Feb. 11, 2020; Jan. 5, 2021> |
| 1. | The method of calculation by referring to the amount of income of other business operators of the same business condition, which has been investigated and determined by the record-keeping deemed accurate; |
| 2. | Where there exists any business efficiency set forth by the Commissioner of the National Tax Service to define the relations between the volume or price of personal or physical facilities related to the business (such as employees, guest rooms, place of business, vehicles, tap water, and electricity) and the turnover in view of the type and area of the business, the method of calculation by applying such business efficiency; |
| 3. | The method of calculation by applying the market price of quantity sold during the relevant taxable period to the amount of quantity produced calculated by applying the production rate, which has been investigated by the Commissioner of the National Tax Service on the input raw materials by business kind; |
| 4. | The method of calculation by any of the following criteria set forth by the Commissioner of the National Tax Service by type and area of business: |
| a. | Input quantity per unit of won, which defines the relation between the partial or whole quantity, from among raw or secondary materials input for production, and the quantity of production; |
| b. | Expense-related ratio which defines the relation between the partial or whole expenses, from among labor costs, rent, material cost, water, heat and light expenses, and other operating expenses, and the turnover; |
| c. | Turnover ratio of merchandizes, which defines the relation between the average inventory amount during a specified period, and the turnover or cost of sales; |
| d. | Gross profit ratio of sales, which defines the ratio between the turnover and the gross profit of sales, during a specified period; |
| e. | Value-added rate, which defines the ratio between the turnover and the value-added amount, during a specified period; |
| 5. | Where the ratio of subparagraphs 2 through 4 may be computed on a business operator subject to estimation, determination, and revision, the method of calculation by applying it thereto; |
| 6. | For business types mainly targeting end-users, the method of calculation by the criteria for observed investigation set forth by the Commissioner of the National Tax Service. |
| (2) | Where the amount of other income specified in Article 21(1)7 of the Act cannot be assessed by the books and other documentary evidences, such income amount shall be governed by any of the following amounts: <Added on Dec. 30, 1995; Dec. 31, 1996; Dec. 31, 1997; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 11, 2020> |
| 1. | Deleted; <Dec. 30, 2003> |
| 2. | In cases of the goodwill (excluding the right to lease a store), the amount evaluated under Article 59(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act; |
| 3. | In cases of the right to lease a store, the amount calculated by deducting the amount calculated by item b from the amount calculated by item a: |
| a. | Amount equivalent to the security money for lease at the time of transfer ＋ Appraised value of the goodwill of the business operator transferring the relevant asset; |
| b. | Amount equivalent to the security money for lease at the time of acquisition ＋ (Amount assessed by item a － Amount equivalent to the security money for lease at the time of acquisition) × 1/2; |
| 4. | In cases of assets or rights (excluding goodwill and the right to lease a store) under Article 21(1)7 of the Act, the amount evaluated under Article 59(4) through (6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. of the Inheritance Tax and Gift Tax Act. |
| (3) | The amount of income under paragraph (1) shall be the aggregate of the following amounts: <Added on Dec. 30, 2002; Feb. 19, 2005; Jun. 28, 2013; Feb. 13, 2018; Feb. 11, 2020> |
| 1. | Subsidies or bounties granted by the State or local governments in connection with the relevant projects; |
| 2. | Subsidies or bounties granted by a fellow business operators' organization or the customers in connection with the relevant projects; |
| 3. | The value-added tax amount deducted by issuing a credit card sales slip under Article 46(1) of the Value-Added Tax Act; |
| 4. | The value of transfer of business-use tangible assets of a person liable to double-entry bookkeeping. |
| (4) | Where the amount of income may be calculated by the books and other documentary evidence kept by a resident in making the estimation, determination or revision under paragraphs (1) through (3), the tax base and amount of tax of relevant taxable period shall be determined or revised by actual investigation. <Amended on Feb. 11, 2020> |
| Article 145 (Standard and simplified expense rates) |
| (1) | The standard expense rate or simplified expense rate under Article 143(3) shall be determined by the Commissioner of the National Tax Service in view of the average expense rate investigated according to the business type and company peculiarity, against the enterprises which are of average business scale and condition, after undergoing the procedure prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 29, 2000; Dec. 30, 2002; Jun. 8, 2010; Oct. 4, 2022; Dec. 30, 2025> |
| (2) | Deleted. <Oct. 4, 2022> |
| (3) | The Commissioner of the National Tax Service shall decide and announce the expense rate and estimation method to be applied to the relevant taxable period (in cases of deciding two or more estimation methods, including matters concerning the application thereof) by not later than one month prior to the commencement of the period for a final return on tax base for the relevant taxable period. <Amended on Dec. 29, 2000; Feb. 22, 2008; Jun. 8, 2010; Feb. 15, 2013; Oct. 4, 2022> |
| (4) | Deleted. <Oct. 4, 2022> |
[Title Amended on Dec. 29, 2000]
| Article 146 Deleted. <Feb. 28, 2007> |
| Article 146-2 Deleted. <Feb. 28, 2007> |
| Article 147 (Penalty tax on negligence in submitting or preparing detailed statement of reception of receipts and penalty tax on negligence in receiving evidentiary documents) |
| (1) | "Small-scale business entity prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs of Article 81(1) of the Act, the former part, with the exception of the formula, of Article 81-5 of the Act and the main clause of Article 81-6(1) of the Act means the business entities falling under any subparagraph of Article 132(4). |
| (2) | "A person whose amount of income is estimated as prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 81(1) and the main clause of Article 81-6(1) of the Act means a person whose amount of income is estimated pursuant to Article 143(3), respectively; provided, the same shall apply only to the portion of income estimated out of the amount that constitute expenses except those under paragraph (3)1a and b of that Article in cases of persons other than those subject to simplified expense rate under Article 143(3). |
| (3) | "As prescribed by Presidential Decree" in Article 81(1)2 of the Act means cases where the fact of transaction cannot be confirmed because the title, name, business registration number (in cases of substitution by the resident registration number, the resident registration number), transaction date, and the amount paid have not been stated or falsely stated in the detailed statement of received receipts. |
[This Article Wholly Amended on Feb. 11, 2020]
| Article 147-2 (Penalty tax on negligence in reporting on current status of business place) |
"Business operator prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs of Article 81-3(1)) of the Act means a business operator who engages in medical services under the Medical Service Act, veterinarian services under the Veterinarians Act, or pharmaceutical services with a pharmacy established under Pharmaceutical Affairs Act.
[This Article Wholly Amended on Feb. 11, 2020]
| Article 147-3 (Penalty tax for unfaithful registration and reporting of joint business place) |
"Cases prescribed by Presidential Decree" in Article 81-7(1)2 of the Act means any of the following cases:
| 1. | Where any person other than a joint business operator is reported as a joint business operator; |
| 2. | Where a person who falls within the category of the joint investment business operator under Article 100(1) (hereinafter referred to as "joint investment business operator") has not been reported, or a person reported as a joint investment business operator is not in fact a joint investment business operator; |
| 3. | Where the allocation ratio of profit and loss as reported is different from the terms and conditions agreed upon between the joint business operators; |
| 4. | Where any of joint business operators or joint investment business operators, or the allocation ratio of profit and loss was changed, but such change has not been reported in accordance with Article 87(5) of the Act. |
[This Article Wholly Amended on Feb. 11, 2020]
| Article 147-4 (Penalty tax on negligence in issuing cash receipts.) |
| (1) | "Amount of income prescribed by Presidential Decree, such as the amount of income for which an invoice under Article 163 is issued and the amount of income for which a tax invoice under Article 32 of the Value-Added Tax Act is issued" in the formula of Article 81-9(2)1 of the Act means the amount of income falling under any of the following subparagraphs: |
| 1. | Amount of income for which an invoice under Article 163 is issued; |
| 2. | Amount of income for which a tax invoice under Article 32 of the Value-Added Tax Act is issued. |
| (2) | "Cases prescribed by Presidential Decree, such as cases where the person eligible for insurance benefits under the National Health Insurance Act" in Article 81-9(2)3 of the Act means any of the following subparagraphs: |
| 1. | Insurance benefits under the National Health Insurance Act; |
| 2. | Medical benefits under the Medical Care Assistance Act; |
| 3. | Medical aid money under the Emergency Aid and Support Act; |
| 4. | Amount of payment by subrogation under the Emergency Medical Service Act; |
| 5. | Insurance money and mutual aid money under the Compulsory Motor Vehicle Liability Security Act (limited to mutual aid money of a person operating a mutual aid business under the Passenger Transport Service Act and the Trucking Transport Business Act referred to subparagraph 6 of Article 2 of the Compulsory Motor Vehicle Liability Security Act). |
[This Article Wholly Amended on Feb. 11, 2020]
| Article 147-5 (Special applicability concerning penalty tax in case of revision) |
| (1) | In cases where a business operator ceases to correspond to a business operator under Article 208(5) as his or her amount of income has been increased due to a determination, revision under Article 80 of the Act or amended return under Article 45 of the Framework Act on National Taxes, he or she shall be deemed a person subject to simple bookkeeping by not later than the taxable period whereto belongs the date of such determination, revision or amended return in applying the latter part, with the exception of the subparagraphs, of Article 70(4) and Article 160-5(3) of the Act; provided, where a business operator is converted to a person subject to double-entry bookkeeping before the taxable period whereto belongs the date of such determination, revision or amended return, he or she shall be deemed a person subject to simple bookkeeping by not later than the taxable period immediately preceding that wherein he or she has been converted to a person subject to double-entry bookkeeping. |
| (2) | Article 81-9(2)1 of the Act shall also apply to cases where a business operator is obligated to register as an Issuer of Cash Receipts under Article 162-3(1) of the Act as a result of the determination or rectification under Article 80 of the Act. |
[This Article Wholly Amended on Feb. 11, 2020]
| Article 147-6 (Penalty tax on negligence in submitting invoices) |
| (1) | "Small business entities as prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 81-10(1) of the Act means the following business entities: |
| 1. | A business entity subject to Article 73(1)4 of the Act; |
| 2. | A business entity that is a person subject to simple bookkeeping and whose revenue from business income for the immediately preceding taxable period is less than 48 million won; |
| 3. | A business entity that newly commences a business during the relevant taxable period. |
| (2) | "Information prescribed by Presidential Decree" in Article 81-10(1)1 of the Act means the information falling under Article 211(1)1 through 4 (hereafter in this paragraph, referred to as "requisite information"); and if some of the requisite information in an invoice received is falsely stated but the fact of transaction is confirmed considering other information in the relevant invoice, it shall not be deemed an invoice that is stated differently from the fact specified in Article 81-10(1)1 of the Act. |
| (3) | "Information prescribed by Presidential Decree" in Article 81-10(1)2b of the Act means the registration number and supply value by transaction party and "sale prices or purchase prices for any transaction confirmed as prescribed by Presidential Decree" means the sales prices or purchase prices for any transaction confirmed in accordance with the invoice issued or received. |
| (4) | Where an intermediary wholesaler defined in subparagraph 9 of Article 2 of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products (hereinafter referred to as an "intermediary wholesaler") issues invoices for each taxable period that ends from January 1, 2021 to December 31, 2026, and the rate of the amount whose aggregate table of invoices by seller is submitted to the head of the competent tax office to the total amount of sales (hereafter in this Article, referred to as "rate of issuing invoices") is not less than any of the following rates, the relevant intermediary wholesaler shall be deemed business operators under the subparagraphs of paragraph (1) during the taxable period that ends within December 31, 2026; in such cases, if the rate of issuing invoices by the intermediary wholesaler for each taxable period that ends within December 31, 2026 is less than the any of the following rates, penalty tax shall be imposed pursuant to Article 81-10(1) of the Act as if only the differences between the amount calculated by applying any of the following rates to the total amount of sales for each taxable period and the amount whose aggregate table of invoices by seller was submitted were deemed the supply value whose invoices were not issued: <Amended on Feb. 29, 2024> |
| 1. | An intermediary wholesaler in the central wholesale market defined in subparagraph 3 of Article 2 of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, which is located in Seoul Special Metropolitan City |
┌────────────┬───────────────────────┐
│ Taxable period │ Ratio │
├──────────────┼─────┤
│ Jan. 1, 2021 ~ Dec. 31, 2021 │ 90/100 │
├──────────────┼─────┤
│ Jan. 1, 2022 ~ Dec. 31, 2022 │ 95/100 │
├──────────────┼─────┤
│ Jan. 1, 2023 ~ Dec. 31, 2023 │ 95/100 │
├──────────────┼─────┤
│ Jan. 1, 2024 ~ Dec. 31, 2026 │ 95/100 │
└──────────────┴─────┘
| 2. | Intermediary wholesalers other than those under subparagraph 1. |
┌────────────┬───────────────────────┐
│ Taxable period │ Ratio │
├──────────────┼─────┤
│ Jan. 1, 2021 ~ Dec. 31, 2021 │ 70/100 │
├──────────────┼─────┤
│ Jan. 1, 2022 ~ Dec. 31, 2022 │ 75/100 │
├──────────────┼─────┤
│ Jan. 1, 2023 ~ Dec. 31, 2023 │ 75/100 │
├──────────────┼─────┤
│ Jan. 1, 2024 ~ Dec. 31, 2025 │ 80/100 │
├──────────────┼─────┤
│ Jan. 1, 2026 ~ Dec. 31, 2026 │ 85/100 │
└──────────────┴─────┘
| (5) | "The purchase prices for any transaction confirmed as prescribed by Presidential Decree" in Article 81-10(1)3b of the Act means the purchase prices for any transaction confirmed in accordance with tax invoices received. |
[This Article Wholly Amended on Feb. 11, 2020]
| Article 147-7 (Penalty tax on negligence in submitting payment statement) |
| (1) | "Unclear as prescribed by Presidential Decree" in the provisions, with the exception of the items, of Article 81-11(1)2 of the Act means the cases falling under the following classifications: <Amended on May 4, 2021> |
| 1. | In cases of a payment statement: Any of the following cases: |
| a. | Where it is impossible to ascertain whether payment has been made because no or wrong information is stated in the payment statement submitted with regard to the address, name, tax payment number (in cases of substitution by the resident registration number, the resident registration number) or business registration number of the payer or receiver, the type of income, the year of accrual of the income or the amount of payment; |
| b. | Where it is impossible to identify the issuer of securities because no or wrong standard code of securities is stated in the payment statement or the payment statement of interest and dividend income submitted; |
| c. | Where no or wrong deferred retirement income tax under Article 202-2(1) is stated in the payment statement submitted; |
| 2. | In cases of a simplified payment statement: Where it is impossible to ascertain whether payment has been made, because no or wrong information is stated in the simplified payment statement submitted, with regard to the address, name, tax payment number (in cases of substitution by the resident registration number, the resident registration number), business registration number of the payer or receiver, the type of income, the year of accrual of the income or the amount of payment. |
| (2) | The following payment shall not be deemed to be included in pursuant to paragraph (1): |
| 1. | The amount paid to a person who has a tax payment number or a business registration certificate as of the date of payment; |
| 2. | The amount paid other than those under subparagraph 1, for which it is confirmed that the whereabouts of such receiver become unknown after the payment. |
| (3) | In applying Article 81-11 of the Act, in cases of pension income and retirement income, the pension income and retirement income under Article 20-3(2) and 22(2) of the Act shall be deemed to be the amount paid. |
| (4) | "Proportion prescribed by Presidential Decree" in Article 81-11(4) of the Act means 5/100. <Added on May 4, 2021; Feb. 28, 2023> |
[This Article Wholly Amended on Feb. 11, 2020]
[Title Amended on May 4, 2021]
| Article 147-8 (Penalty tax on negligence in submitting calculation statement of reserved income of specific foreign corporation) |
"Where the calculated statement so submitted is found vague on any ground prescribed by Presidential Decree" in Article 81-13(1)2 of the Act means where the distributable amount reserved income is erroneously calculated because of a complete or partial omission or erroneous calculation of any amount that must be stated for the calculation.
[This Article Added on Feb. 11, 2020]
| Article 148 (Occasional imposition) |
| (1) | The head of the competent tax office having jurisdiction over the place of business (with respect to persons other than business operators, the head of the competent tax office having jurisdiction over the place for tax payment), shall determine the tax base and the amount of tax under Article 82(1) of the Act, by applying mutatis mutandis Article 142(1). <Amended on Dec. 30, 1995> |
| (2) | The head of a tax office who intends to impose taxes occasionally pursuant to Article 82(4) of the Act shall promptly notify the relevant resident of such purport with approval by the commissioner of the competent regional tax office. <Amended on Feb. 18, 2010> |
| (3) | When a business operator receives income from the United Nations' forces in the Republic of Korea or a foreign institution in the foreign exchange certificate or won currency through a foreign exchange bank, the head of a tax office may determine, under Article 82 of the Act, the tax base for the amount to be received. |
| (4) | Deleted. <Feb. 22, 2008> |
| (5) | Deleted. <Feb. 22, 2008> |
| (6) | Matters necessary for the calculation of the amount of tax in the occasional imposition under Article 82 of the Act shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| Article 149 (Notification of amount of tax and tax base) |
| (1) | In cases where the head of the competent tax office or the commissioner of the competent regional tax office having jurisdiction over the place for tax payment intends to notify the tax base and the amount of tax under Article 83 of the Act, he or she shall notify the tax base, tax rate, amount of tax and other necessary matters in writing. In such cases, if there is no tax payable, the same shall apply. |
| (2) | In cases where the head of the competent tax office or the commissioner of the competent regional tax office having jurisdiction over the place for tax payment imposes income tax on the income of a decedent on two or more heirs, he or she shall divide the tax base and amount of tax pro rata one's share, and notify by heir respectively. |
| (3) | Deleted. <Dec. 30, 2002> |
| Article 149-2 (Refund from loss carryback) |
| (1) | Deleted. <Feb. 11, 2020> |
| (2) | "Amount calculated, as prescribed by Presidential Decree" in the former part of Article 85-2(1) of the Act means the amount obtained by deducting the amount specified in subparagraph 2 from the amount specified in subparagraph 1 (hereinafter referred to as "amount of loss carryback"): <Amended on Feb. 18, 2010> |
| 1. | The amount of calculated tax on global income for the relevant small and medium enterprise in the immediately preceding taxable period; |
| 2. | The amount of calculated tax on global income for the relevant small and medium enterprise computed by applying the tax rate of the preceding taxable period to the amount obtained by deducting the amount of loss carried forward under Article 45(3) of the Act intended for retrospective deduction (the tax base of global income of the preceding taxable period shall be the limit), from the tax base of global income of the preceding taxable period. |
| (3) | A person who intends to claim a refund from loss carryback under Article 85-2(2) of the Act shall submit an application for loss carryback refund determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (4) | Where a business operator who has been refunded of retrospective deduction amount of tax for loss falls under the reason in any subparagraph of Article 85-2(5) of the Act, the head of the competent tax office having jurisdiction over the place for tax payment shall, collect pursuant to Article 85-2(5) of the Act as income tax on the aggregate amount of those computed by the following formula (hereinafter referred to as "amount of canceled tax refund"), and the amount corresponding to the interest on the amount of tax whose refund is cancelled which are computed by multiplying the period from the day after the date on which the tax refunded from retrospective deduction amount of tax for loss is notified to the date on which the amount of income tax to be collected pursuant to Article 85-2(5) of the Act by the rate pursuant to Article 27-4(1) of the Enforcement Decree of the Framework Act on National Taxes; provided, where only a part of loss under Article 45(3) of the Act is carried back, it shall be deemed that the loss, which has not been carried back, shall be reduced first: <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 11, 2020; Feb. 27, 2026> |
┌─────────────────────────────────────┐
│ Refund amount of tax under Article 85-2(3) of the Act x │
│ (Amount of loss reduced in excess of the loss │
│ not subject to carryback / │
│ Amount of loss carried back) │
└─────────────────────────────────────┘
| (5) | Where the tax base for gross income and the amount of tax for the immediately preceding taxable period, which forms the basis for a computation of the amount of loss carryback, is changed due to revisions, etc., the head of the competent tax office having jurisdiction over the place for tax payment shall immediately re-determine the original amount of refund, and refund or collect the difference between the amount of tax refunded from loss carryback, and the refund amount of tax re-determined; and in cases where the amount of tax refunded exceeds the amount of re-determined refund, and such excess is collected, he or she shall collect such amount by aggregating interest which is computed by applying mutatis mutandis paragraph (4). |
| (6) | The calculation of amount of tax to be refunded from a loss carryback and other necessary matters shall be determined by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1996]
| Article 149-3 (Exceptions to non-collection of small sum) |
"Business income prescribed by Presidential Decree" in subparagraph 1 of Article 86 of the Act means income received in exchange for the continuous and repeated supply of personal services under Article 26(1)15 of the Value-Added Tax Act.
[This Article Added on Feb. 29, 2024]
SECTION 11 Special Cases for Places of Joint Business
| Article 150 (Special cases for joint place of business) |
| (1) | "Representative joint business operator" in Article 87(4) of the Act, means any of the following persons who are not a joint investment business operator: <Added on Feb. 28, 2007> |
| 1. | A person appointed from among joint business operators; |
| 2. | A person whose allocation ratio of profit and loss is the largest, if the representative joint business operator is not appointed; provided, such person shall be designated by the head of the competent tax office having jurisdiction over the place of business, if the allocation ratios of profit and loss are the same. |
| (2) | The determination or revision of the amount of income from the joint business under Article 87 of the Act shall be made by the head of the competent tax office having jurisdiction over the domicile of the representative joint business operator under Article 87(4) of the Act (hereafter referred to as "representative joint business operator" in this Article); provided, the matters which the Commissioner of the National Tax Service deems especially important shall be determined by the head of the competent tax office having jurisdiction over the place of business or the commissioner of the competent regional tax office having jurisdiction over the domicile of the representative joint business operator. <Amended on Feb. 28, 2007> |
| (3) | The business registration for the place of joint business under Article 87(4) of the Act shall be made by the representative joint business operator to the head of the competent tax office having jurisdiction over the relevant place of business by a report on the relocated joint place of business, etc. determined by Decree of the Ministry of Finance and Economy. In such cases, where details of joint business operators are reported when making registration of business operators under Article 168(1) and (2) of the Act, a report on the relocation of a joint place of business, etc. shall be deemed to be filed. <Amended on Apr. 1, 1998; Feb. 28, 2007; Feb. 29, 2008; Feb. 13, 2018; Dec. 30, 2025> |
| (4) | The representative joint business operator shall, when there is any change in the descriptions reported in accordance with Article 87(4) of the Act, report such change to the head of the competent tax office having jurisdiction over the relevant place of business in the form of the report on the relocation of joint place of business, etc. prescribed by Decree of the Ministry of Finance and Economy, within 15 days from the end of the taxable period on which the day when such cause or event occurred falls. In such cases, where any change in the descriptions is reported when reporting pursuant to Article 168(3) of the Act, a report on the relocation of a joint place of business, etc. shall be deemed to be filed. Added on Feb. 28, 2007; Feb. 29, 2008; Feb. 13, 2018; Dec. 30, 2025> |
| (5) | In applying Articles 64 and 94, the head of the competent tax office having jurisdiction over the place for tax payment of the place of joint business shall be the head of the competent tax office having jurisdiction over the domicile of the representative joint business operator. <Amended on Feb. 28, 2007> |
| (6) | Where a joint business operator files a final return on tax base, he or she shall submit an account statement separating the income accruing from the relevant place of joint business and income other than that along with the final return on tax base. In such cases, the representative joint business operator shall submit the specification of distribution by joint place of business, of the income accruing from the relevant joint place of business, penalty taxes, and the amount of tax collected by withholding. <Amended on Feb. 28, 2007> |
| (7) | Where Article 41(1) of the Act shall apply to calculating income of a place of joint business, the joint business operators shall be deemed residents. <Added on Feb. 3, 2017> |
| (8) | Except as otherwise expressly provided for in paragraphs (1) through (7), matters necessary for places of joint business shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 28, 2007; Feb. 29, 2008; Feb. 3, 2017; Dec. 30, 2025> |
[Title Amended on Feb. 28, 2007]
CHAPTER II-2 (Articles 150-2 through 150-10) Deleted.
SECTION 1 Definition of Transfer
| Article 150-2 Deleted. <Dec. 31, 2024> |
| Article 150-3 Deleted. <Dec. 31, 2024> |
| Article 150-4 Deleted. <Dec. 31, 2024> |
| Article 150-5 Deleted. <Dec. 31, 2024> |
| Article 150-6 Deleted. <Dec. 31, 2024> |
| Article 150-7 Deleted. <Dec. 31, 2024> |
| Article 150-8 Deleted. <Dec. 31, 2024> |
| Article 150-9 Deleted. <Dec. 31, 2024> |
| Article 150-10 Deleted. <Dec. 31, 2024> |
| Article 150-11 Deleted. <Dec. 31, 2024> |
| Article 150-12 Deleted. <Dec. 31, 2024> |
| Article 150-13 Deleted. <Dec. 31, 2024> |
| Article 150-14 Deleted. <Dec. 31, 2024> |
| Article 150-15 Deleted. <Dec. 31, 2024> |
| Article 150-16 Deleted. <Dec. 31, 2024> |
| Article 150-17 Deleted. <Dec. 31, 2024> |
| Article 150-18 Deleted. <Dec. 31, 2024> |
| Article 150-19 Deleted. <Dec. 31, 2024> |
| Article 150-20 Deleted. <Dec. 31, 2024> |
| Article 150-21 Deleted. <Dec. 31, 2024> |
| Article 150-22 Deleted. <Dec. 31, 2024> |
| Article 150-23 Deleted. <Dec. 31, 2024> |
| Article 150-24 Deleted. <Dec. 31, 2024> |
| Article 150-25 Deleted. <Dec. 31, 2024> |
| Article 150-26 Deleted. <Dec. 31, 2024> |
| Article 150-27 Deleted. <Dec. 31, 2024> |
| Article 150-28 Deleted. <Dec. 31, 2024> |
| Article 150-29 Deleted. <Dec. 31, 2024> |
| Article 150-30 Deleted. <Dec. 31, 2024> |
| Article 150-31 Deleted. <Dec. 31, 2024> |
| Article 150-32 Deleted. <Dec. 31, 2024> |
| Article 150-33 Deleted. <Dec. 31, 2024> |
| Article 150-34 Deleted. <Dec. 31, 2024> |
| Article 150-35 Deleted. <Dec. 31, 2024> |
CHAPTER III RESIDENT'S TAX LIABILITIES FOR CAPITAL GAINS
SECTION 1 Definition of Transfer
| Article 151 (Scope of transfer) |
| (1) | In applying subparagraph 1 of Article 88 of the Act, if the debtor makes a contract for the transfer of assets to guarantee the repayment of debts, and submits a copy of the contract satisfying all the following requirements, along with the final return of tax base of capital gains, it shall not be deemed a transfer: <Amended on Feb. 3, 2017; Feb. 28, 2023> |
| 1. | There shall be a manifestation of intention between the parties concerned to the effect that such transfer is made to guarantee the repayment of debts; |
| 2. | There shall be a manifestation of intention to the effect that the debtor shall use the relevant assets and receive profits therefrom as originally intended; |
| 3. | There shall be an agreement on the principal, interest rate, period of repayment, means of repayment, etc. |
| (2) | When one breaches any of requirements of paragraph (1) after entering into a contract thereunder or the relevant asset is appropriated for the repayment due to a non-performance of obligation, such asset shall be deemed transferred. |
| (3) | "The amount of debt incurred by the donee in the event of a gift of encumbered property prescribed by Presidential Decree" in the latter part of subparagraph 1 of Article 88 of the Act, means the portion equivalent to the amount of debt, out of the value of the gift, where a donee assumes the debt of the donor at the time of granting a gift of encumbered property; provided, an amount of debt shall be excluded herefrom, if it is presumed that the debt is not assumed by the donee under the main sentence of Article 47(3) of the Inheritance Tax and Gift Tax Act in cases of a gift of encumbered property between spouses or between lineal ascendants and descendents (including where it is presumed to be a gift under Article 44 of the Inheritance Tax and Gift Tax Act). <Added on Feb. 3, 2017> |
[This Article Wholly Amended on Feb. 3, 2017]
| Article 152 (Definition of land substitution, etc.) |
| (1) | "Land substitution" in subparagraph 1a of Article 88 of the Act, means cases where a project implementor for an urban development project under the Urban Development Act, a project for rearrangement of agricultural production infrastructure under the Rearrangement of Agricultural and Fishing Villages Act, or a project under any other Act exchanges (including division, merger, or exchange according to the implementation of the project) the parcels of land or buildings owned or possessed by land owners or other interested persons within the project zone with other parcels of land in the zone or part of buildings and shares in the land on which such buildings are situated, of which the project implementor has the power to dispose, after completing the project. <Amended on Dec. 31, 1996; Dec. 29, 2000; Feb. 19, 2005; Dec. 15, 2009; Feb. 2, 2012; Feb. 3, 2015; Feb. 3, 2017> |
| (2) | "Reserved land" in Article subparagraph 1a of 88 of the Act, means land that a project implementor specified in paragraph (1) has reserved pursuant to the relevant Acts in order to use it as land for any of the following purposes without designating it as land for substitution: <Amended Feb. 2, 2012; Feb. 3, 2015; Feb. 3, 2017> |
| 1. | Land for public use pursuant to relevant Acts; |
| 2. | Land alloted by the authorities in compensation for development outlays where the land owner or the related persons in the business area bears the project costs with the land in the business area pursuant to the relevant Acts. |
| (3) | "Where a parcel of land is exchanged with another parcel of land according to any of the methods and procedures prescribed by Presidential Decree, such as the partition of land under Article 79 of the Act on the Establishment and Management of Spatial Data" in subparagraph 1b of Article 88 of the Act, means the exchange of parcels of land, which meets all the following requirements: <Added on Feb. 3, 2015; Jun. 1, 2015; Feb. 3, 2017> |
| 1. | The parcels of land shall be partitioned and exchanged in accordance with the Act on the Establishment and Management of Spatial Data or any other Act in order to rationally change ground boundaries unreasonable for land use; |
| 2. | The total area of the land partitioned under subparagraph 1 shall not exceed 20/100 of the total area of the land before partitioned. |
| (4) | In cases falling under subparagraph 1b of Article 88 of the Act, the land owner shall submit documents demonstrating that the exchange of land meets all the requirements under paragraph (3) to the head of the tax office having jurisdiction over the place for tax payment. <Added on Feb. 3, 2015; Feb. 3, 2017> |
| (5) | The timing to submit documents under paragraph (4) and other necessary matters shall be determined and publicly notified by the Commissioner of the National Tax Service. <Added on Feb. 3, 2015> |
| Article 152-2 (Scope of securities depository receipts) |
"Securities depository receipts prescribed by Presidential Decree" in subparagraph 2 of Article 88 of the Act, means instruments which are issued by a person who receives equity securities referred to in Article 4(2)2 of the Financial Investment Services and Capital Markets Act in a country other than the country where such equity securities were issued and on which a right related to the securities deposited is indicated.
[This Article Wholly Amended on Dec. 31, 2024]
| Article 152-3 (Scope of one household) |
"Cases prescribed by Presidential Decree" in the proviso of subparagraph 6 of Article 88 of the Act means cases that fall under any of the following subparagraphs: <Amended on Feb. 29, 2024; Dec. 30, 2025>
| 1. | Where the relevant resident is at least 30 years of age; |
| 2. | Where the spouse is dead or divorced; |
| 3. | In cases where the income specified by Decree of the Ministry of Finance and Economy, among the incomes under Article 4 of the Act, is at least 40% of the standard median income converted into a 12-month amount as defined in subparagraph 11 of Article 2 of the National Basic Living Security Act, and the individual can maintain an independent livelihood while managing and maintaining the owned house or land; provided, minors are excluded herefrom, but the foregoing shall not apply where it is unavoidable for a minor to form a household due to marriage, death of family members, or other reasons prescribed by Decree of the Ministry of Finance and Economy. |
[This Article Added on Feb. 3, 2017]
| Article 152-4 (Scope of housing) |
In the former part of subparagraph 7 of Article 88 of the Act, the term "structure prescribed by Presidential Decree" refers to a structure in which a separate entrance door, bathroom, and cooking facilities are installed in each space divided by household.
[This Article Added on Feb. 29, 2024]
[Previous Article 152-4 moved to Article 152-5 <Feb. 29, 2024>]
| Article 152-5 (Scope of pre-completion apartment ownership) |
"The Housing Act or other Acts prescribed by Presidential Decree" in subparagraph 10 of Article 88 of the Act means the following Acts:
| 1. | The Act on the Sale of Building Units; |
| 2. | The Special Act on Public Housing; |
| 3. | The Urban Development Act; |
| 4. | The Act on the Improvement of Urban Areas and Residential Environments; |
| 5. | The Act on Special Cases concerning Unoccupied House and Small-Scale Housing Improvement; |
| 6. | The Industrial Sites and Development Act; |
| 8. | The Housing Site Development Promotion Act. |
[This Article Added on Feb. 17, 2021]
[Moved from Article 152-4 <Feb. 29, 2024>]
SECTION 2 Non-Taxation and Tax Reduction or Exemption for Capital Gains
| Article 153 (Non-taxation of farmland) |
| (1) | "Cases prescribed by Presidential Decree" in Article 89(1)2 of the Act, means where any of the following farmland (excluding farmland falling under any subparagraph of paragraph (4)) is exchanged, divided, or combined, and where the difference of land value of both sides of such exchange, division, or combining does not exceed 1/4 of the larger value: <Amended on Dec. 30, 1995; Dec. 29, 2000; Feb. 19, 2005; Dec. 31, 2005; Apr. 28, 2006; Jun. 26, 2009; Feb. 18, 2010> |
| 1. | Farmland exchanged, divided, or combined due to a project implemented by the State or a local government; |
| 2. | Farmland exchanged, divided, or combined with land owned by the State or a local government; |
| 3. | Farmland exchanged due to the need for cultivation; provided, it shall be confined to cases where one cultivates farmland newly acquired by such exchange while residing for at least three years in the location of such farmland; |
| 4. | Farmland exchanged, divided, or combined under the Rearrangement of Agricultural and Fishing Villages Act, the Farmland Act, the Korea Rural Community Corporation and Farmland Management Fund Act, or the Agricultural Cooperatives Act. |
| (2) | Deleted. <Dec. 31, 2005> |
| (3) | "Location of farmland" in the proviso to paragraph (1)3, means any of the following areas (including the area which has corresponded to the relevant area at the time of commencement of cultivation, but ceases to correspond thereto due to a reorganization of administrative districts, etc.): <Amended on Dec. 30, 1995; Dec. 31, 2001; Dec. 31, 2005; Feb. 22, 2008; Feb. 15, 2013; Feb. 3, 2015; Jan. 22, 2016; Feb. 28, 2023> |
| 1. | An area within a Si (including a special self-governing city and an administrative Si established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; hereafter the same shall apply in this paragraph)/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where the farmland is located; |
| 2. | An area within a Si/Gun/Gu adjacent to an area prescribed in subparagraph 1; |
| 3. | An area within a 30 kilometer radius from farmland. |
| (4) | Farmland excluded from that prescribed in paragraph (1) shall be as follows: <Amended on Dec. 30, 1995; Dec. 31, 1996; Apr. 1, 1998; Dec. 30, 2002; Feb. 19, 2005; Dec. 31, 2005; Feb. 22, 2008; Feb. 29, 2008; Feb. 15, 2013; Jan. 22, 2016; Dec. 30, 2025> |
| 1. | Farmland in a residential area, commercial area, or industrial area under the National Land Planning and Utilization Act among that located as of the transfer date in the Special Metropolitan City, a Metropolitan City (excluding Guns in a Metropolitan City), Special Self-Governing City (excluding Eup/Myeon areas within the Special Self-Governing City), Special Self-Governing Province (excluding Eup/Myeon areas within an administrative Si established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City), or a Si area (excluding an Eup/Myeon area of a Si in an urban and rural complex form under Article 3(4) of the Local Autonomy Act), for which three years have elapsed from the date of its incorporation into these areas; provided, in any of the following cases, it shall be excluded: |
| a. | Where at least one thousand land owners exist within a project area, or where three years have passed since farmland was incorporated into a residential area, commercial area, or industrial area pursuant to the National Land Planning and Utilization Act due to the gradual execution of project or delay in compensation by a project executor following the execution of development project in the development project area (referring to the single project execution area whose date of notice of project authorization is the same) whose scale of project execution is larger than that prescribed by Decree of the Ministry of Finance and Economy; |
| b. | In cases of extenuating circumstances prescribed by Decree of the Ministry of Finance and Economy, where farmland is incorporated into a residential area, commercial area, or industrial area pursuant to the National Land Planning and Utilization Act due to the execution of development project in the development project area by a project executor, such as the State, local government, or public agency prescribed by Decree of the Ministry of Finance and Economy; |
| 2. | Where land to be substituted is designated as land, other than farmland, prior to a disposal of substituted land, with respect to the relevant farmland, and for which three years have elapsed from the date of designating the relevant land to be substituted. |
| (5) | In applying paragraphs (1)3, if the newly acquired farmland is purchased by consultation or expropriated under the Act on Acquisition of and Compensation for Land for Public Works Projects or expropriated under other Acts, within three years after its acquisition, such land shall be deemed cultivated while residing for at least three years in the location of farmland. <Amended on Dec. 30, 2002; Feb. 19, 2005; Dec. 31, 2005> |
| (6) | In applying paragraphs (1)3, if the owner of farmland dies within three years after the acquisition of new farmland, and the heir continues to cultivate while residing in the location of farmland, the years of cultivation by the decedent and those of the heir shall be aggregated. <Added on Dec. 31, 1996; Dec. 31, 2005> |
| Article 154 (Scope of one house for one household) |
| (1) | "Criteria prescribed by Presidential Decree" in Article 89(1)3a of the Act, means the requirements that one household shall own one house in the Republic of Korea as at the date of transfer (in cases where, after entering into a sales contract for a house, the house is transferred after its use is changed to a use other than housing pursuant to that contract, referring to the date of the sales contract for the relevant house; hereafter the same shall apply in this paragraph) and that the period of owning the house shall be at least two years (three years in case of a house of the resident falling under paragraph (8)2 of this Article) [in case of a house located in an area subject to adjustment under Article 63(1)1 of the Housing Act (hereinafter referred to as "area subject to adjustment") at the time of its acquisition, its owning period shall be at least two years (three years in case of a house of the resident falling under paragraph (8)2 of this Article) and its residential period shall be at least two years during the owning period]; provided, one household owning one house in the Republic of Korea as at the time of transfer shall not be subject to restriction on the period of owning the house and the period of residence in the house, in cases falling under any of subparagraphs 1 through 3; but shall not be subject to restriction on the period of residence in the house, in cases falling under subparagraph 5: <Amended on Dec. 30, 1995; Apr. 1, 1998; Dec. 31, 1999; Oct. 1, 2002; Dec. 30, 2002; Nov. 20, 2003; Dec. 30, 2003; Feb. 19, 2005; Dec. 31, 2005; Feb. 9, 2006; Feb. 22, 2008; Feb. 29, 2008; Feb. 18, 2010; Jun. 3, 2011; Jun. 29, 2012; Feb. 15, 2013; Feb. 21, 2014; Dec. 28, 2015; Feb. 3, 2017; Sep. 19, 2017; Feb. 13, 2018; Oct. 243 2018; Feb. 12, 2019; Feb. 11, 2020; Feb. 15, 2022; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Where private rental housing under the Special Act on Private Rental Housing, or publicly-constructed rental housing or buy-to-rent public housing under the Special Act on Public Housing, is transferred to another person after at least five years from the date a person acquired it and all members of the household began to reside in it (including where some family members are unable to live together due to schooling, workplace situations, medical care for a disease, or any other inevitable cause specified by Decree of the Ministry of Finance and Economy) during the period from the date of rental of the rental housing to the date of transfer thereof; |
| 2. | In any of the following cases. In such cases, the remaining house and its appurtenant land transferred within five years from the relevant transfer date or expropriation date shall be deemed to be included, in cases falling under item a: |
| a. | Where the whole or part of the house and its appurtenant land (limited to the house and its appurtenant land purchased prior to the public notice date for the project approval) are purchased by consultation or expropriated under the Act on Acquisition of and Compensation for Land for Public Works Projects or expropriated under other Acts; |
| b. | Where all members of a household emigrated from Korea due to emigration under the Emigration Act; provided, it is limited to the transfer made within two years from the date of departure where one house was held as at the date of departure; |
| c. | Where all members of a household have left Korea due to such conditions as study or work needing continuous overseas residence for at least a year; provided, it is limited to the transfer made within two years from the date of departure where one house was held as at the date of departure; |
| 3. | Where a house used for at least one year is transferred due to school, work, medical treatment and recuperation, or any other inevitable cause determined by Decree of the Ministry of Finance and Economy; |
| 4. | Deleted; <Feb. 11, 2020> |
| 5. | Where the fact that a sale and purchase agreement was entered into and down payment was paid before the date of public announcement of an area subject to adjustment is verified by evidencing documents and the household to which the relevant resident did not own any house as at the date of payment of down payment. |
| (2) | When applying provisions concerning an area subject to adjustment pursuant to paragraph (1), the areas listed in the following table shall be areas subject to adjustment from Aug. 3, 2017 to Nov. 9, 2017: <Added on Sep. 19, 2017; Feb. 13, 2018> |
┌────────────┬───────────────────────┐
│ 1. 1. Seoul Special Metropolitan City │ All areas │
├───────┼───────────────────────┤
│ 2. Busan Metropolitan City │ Haewundae-gu, Yeonje-gu, Dongnae-gu,Nam-gu, Busanjin-gu and │
│ │ Suyeong-gu,and Gijang-gun │
├───────┼───────────────────────┤
│ 3. 3. Gyeonggi Province │ Gwacheon City, Gwangmyeong City, Seongnam City, Goyang City, Namyangju City, │
│ │ Hanam City, Hwaseong City (limited to housing site development areas │
│ │ designated around Bansong-dong, Seolwu-dong, Dongtan-myeon, │
│ │ Gumgok-ri, Mok-li, Banggyo-ri, Sincheok-ri, Song-ri, Yeongchen-ri, │
│ │ Osan-ri, Jangji-ri, Joung-ri, Chenggae-ri) │
├───────┼───────────────────────┤
│ 4. Other │ Planed areas under the subparagraph 2 of Article 2 │
│ │ of the Special Act on the Construction of Administrative City in Yeongi-Gongju Area │
│ │ for Follow-Up Measures for New Administrative Capital │
└───────┴───────────────────────┘
| (3) | In applying Article 89(1)3 of the Act, where one building consists of a housing area and non-residential area, and where the non-residential building is located on land appurtenant to a house, such whole construction shall be deemed a house; provided, where the total floor space of a house is smaller than or equal to the total floor space of a part other than a house, the part other than a house shall not be deemed a house. <Amended on Dec. 31, 2005; Feb. 18, 2010> |
| (4) | In cases falling under the proviso of paragraph (3), land appurtenant to a house shall be calculated by multiplying the area of the whole land by the ratio of the total floor space of a house to the total floor space of a building. <Amended on Feb. 18, 2010> |
| (5) | The calculation of the holding period pursuant to paragraph (1) shall be in accordance with Article 95(4) of the Act; provided, in cases where a building that is not a house is actually used for residential purposes or where the use of the building recorded on the public registers is changed to residential, the holding period shall be from the day the property is actually used for residential purposes (or, if the actual date of residential use is unclear, from the day the recorded use of the property is changed to residential) until the day it is transferred. <Amended on May 31, 2022; Feb. 29, 2024> |
| (6) | The residential period under paragraph (1) shall be the period from the move-in date to the move-out date under a copy of the resident registration card of the relevant person. <Added on Feb. 12, 2019> |
| (7) | "The multiple prescribed by Presidential Decree by region" in the provisions, with the exception of the items, of Article 89(1)3 of the Act means the multiple as classified in the following subparagraphs; in such cases, in applying the use district under the relevant subparagraph (referring to a use district under Article 36 of the National Land Planning and Utilization Act; hereafter the same shall apply), where all or part of the land appurtenant to a house is purchased by consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land for Public Works Projects, or otherwise expropriated under other statutes (limited to cases where the relevant land is acquired before the date of public notice of project approval), the use district of the relevant land as of the day before the date of public notice of project approval shall apply. <Amended on Dec. 30, 2003; Dec. 31, 2005; Feb. 18, 2010; Feb. 2, 2012; Feb. 21, 2014; Feb. 11, 2020; Nov. 28, 2025> |
| 1. | The land within an urban area under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act: The following multiples: |
| a. | Land in a residential area, commercial area, and industrial area among land in the Seoul Metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter in this subparagraph, referred to as the "Seoul Metropolitan area"): Three times; |
| b. | Land in a green area among the land in the Seoul Metropolitan area: Five times; |
| c. | Land outside of the Seoul Metropolitan area: Five times; |
| 2. | Other lands: Ten times. |
| (8) | In calculating the period of residence or the period of owning a house pursuant to paragraph (1), the following periods shall be aggregated: <Amended on Feb. 22, 2008; Dec. 30, 2010; Sep. 19, 2017; Feb. 13, 2018> |
| 1. | The period of residing in, or owning, a destroyed house and reconstructed house where the house is reconstructed due to loss by fire, collapse, wear, tear, etc. during the period of residing in, or owning it; |
| 2. | The period of residing in, or owning, a house where a nonresident owns the relevant house for at least three years and is converted into a resident while residing in the house; |
| 3. | Where a house is inherited and the inheritor and inheritee are in the same household as at the time of commencement of inheritance, the period of residing in, and owning the relevant house for the inheritor and inheritee in the same household prior to the commencement thereof. |
| (9) | In applying Article 89(1)3 of the Act, if at least two houses are transferred on the same day, such transfer of houses shall be deemed made in accordance with the order selected by the relevant resident. <Added on Dec. 30, 2003; Dec. 31, 2005> |
| (10) | Where one house for one household under paragraph (1) meets all of the following requirements, paragraph (1) shall apply as if the relevant household owned one house in the Republic of Korea only for the period after the date of transfer of the immediately preceding residential house under the latter part, with the exception of the subparagraphs, of Article 155(20): <Added on Oct. 14, 2011; Dec. 28, 2015; Feb. 3, 2017; Feb. 15, 2022> |
| 1. | Such house should have been registered as a rental house under Article 5 of the Special Act on Private Rental Housing or should have been established and operated as a child care center under Article 12 or 13 of the Child Care Act; |
| 2. | Such household should have had one immediately preceding residential house under the latter part, with the exception of the subparagraphs, of Article 155(20) during the period of owing the relevant house. |
| (11) | "Houses prescribed by Presidential Decree" in Article 89(1)3b of the Act, means the houses that meet the requirements for the application of special provisions concerning one house for one household under Article 155 and thus are governed by this Article. <Added on Feb. 21, 2014> |
| (12) | In applying paragraph (1), in the case of a jointly inherited house located in a regulated area at the time of acquisition, as stated in the main clause, with the exception of each subparagraph, of Article 155(3), the period of residence shall be determined based on the longest period of residence among the co-heirs who have resided in the house. <Added on Feb. 17, 2021; Feb. 29, 2024> |
| Article 154-2 (Calculation of number of houses owned jointly) |
Where many people own one house jointly, each joint owner shall be deemed to own such house when calculating the number of houses, except as otherwise prescribed in this Decree.
[This Article Added on Feb. 18, 2010]
| Article 155 (Special cases concerning one house for one household) |
| (1) | Where one household owning one house in the Republic of Korea (hereafter in this paragraph, referred to as the "former house") temporarily becomes the owner of two houses by acquiring (including where it acquires by constructing a new one by itself) another house (hereafter referred to as a "new house" in this Article) before it transfers the former house if it acquires another house after at least one year from the date of acquisition of the former house and then transfers the former house within three years from the date of acquiring another house (including cases falling under paragraph (18), Article 154(1) shall apply as if the household owned only one house. In any case falling under Article 154(1)1, 2a, or 3, the requirements of acquiring another house after at least one year from the date of acquiring the former house shall not apply, and where part of the former house and land appurtenant thereto is purchased through negotiations or expropriated under Article 154(1)2a, if the relevant remaining house and land appurtenant thereto are transferred within five years from the date of such transfer or expropriation, the transfer of such remaining house and land appurtenant thereto shall be deemed to be included in the transfer or expropriation of the former house and land appurtenant thereto. <Amended on Feb. 28, 2023> |
| (2) | Where one household that owns one inherited house [including a newly-built house acquired after the completion of a project with an inherited right to acquire a house as an association member or pre-completion apartment ownership; referring to one house according to the order as listed in the following, where the decedent owns at least two houses {including cases where the decedent owns at least two houses as a result of the implementation of a redevelopment project (hereinafter referred to as a "redevelopment project"), reconstruction project under the Act on the Improvement of Urban Areas and Residential Environments (hereinafter referred to as a "reconstruction project") or a small-scale reconstruction project, small-scale redevelopment project, housing improvement project in a city block, or autonomous housing improvement project under the Act on Special Cases concerning Unoccupied House and Small-Scale Housing Improvement (hereinafter referred to as "small-scale reconstruction project, etc.") of one house which is inherited} at the time of commencement of inheritance] and any other house (limited to the house owned at the time of commencement of inheritance or the newly built house acquired after completion of a project by exercising an inherited right to acquire a house as an association member or pre-completion apartment ownership owned at the time of commencement of inheritance, and the following house shall be excluded therefrom: a house donated from the decedent or a newly-built house acquired after completion of a project with an inherited right to acquire a house as an association member or pre-completion apartment ownership donated from the decedent, within two years retroactively from the commencement day of inheritance; hereafter in this paragraph, referred to as "general house"), respectively in the Republic of Korea, transfers the general house, Article 154(1) shall apply as if the household owned one house in the Republic of Korea; provided,, if the heir and the decedent belong to one and the same household and the household owns two houses as a consequence of combination of the household of a person who owns one house and also forms one household with the former household in order to support a lineal ascendant (including the spouse's lineal ascendant, but limited to where any or all of lineal ascendants are at least 60 years old and the person owns only one house), living together, only the house that the former household has owned since before the combination (hereafter in paragraphs (3) and (7)1, and Article 156-2(7)1, 156-3(5)1; the same shall apply), shall be deemed an inherited house: <Amended on Dec. 31, 1997; Oct. 1, 2002; Dec. 30, 2002; Feb. 22, 2008; Feb. 18, 2010; Feb. 2, 2012; Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2017; Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021; Feb. 15, 2022> |
| 1. | One house for which the holding period by the decedent is the longest; |
| 2. | One house for which the period of residence by the decedent is the longest, when there are at least two houses for which the holding period by the decedent has been equal; |
| 3. | One house in which the decedent has resided at the time of commencing an inheritance, when there are at least two houses for which the holding period and period of residence by the decedent are all equal; |
| 4. | One house whose standard market price is highest (when the standard market prices are the same, one house chosen by the heir), when there are at least two houses in which the decedent has never resided, and for which the holding periods are the same. |
| (3) | In applying Article 154(1), where any house, other than the co-inherited house [referring to one house owned jointly by many persons by inheritance, but referring to one house in the order listed in paragraph (2), if the decedent owns at least two houses when inheritance commences (including cases where the decedent owns at least two houses as a result of the implementation of a redevelopment project, reconstruction project or small-scale reconstruction project, etc.) of one house inherited), is transferred, the co-inherited house shall not be deemed the relevant resident's house; provided, the foregoing shall not apply to the heir whose share in inheritance is greatest, but any of the following persons shall be deemed to own the co-inherited house in the order listed in the following, among at least two persons, if heirs who have the greatest share in inheritance are at least two persons: <Amended on Dec. 30, 1995; Feb. 3, 2017; Feb. 11, 2020; Feb. 15, 2022> |
| 1. | A person who resides in the relevant house; |
| 2. | Deleted; <Feb. 22, 2008> |
| (4) | Where a person owning one house and forming one household comes to combine the households in order to live together and support a lineal ascendant (including persons falling under the following subparagraphs; hereafter the same shall apply in this Article) of at least 60 years old owning one house, and consequently, one household comes to own two houses, the house first transferred within 10 years from the combining date shall be deemed one house for one household, and be governed by Article 154(1): <Amended on Dec. 31, 1996; Dec. 31, 1999; Oct. 1, 2002; Feb. 4, 2009; Feb. 2, 2012; Feb. 13, 2018; Feb. 12, 2019; Dec. 30, 2025> |
| 1. | A spouse’s lineal ascendant who is not less than 60 years old; |
| 2. | A lineal ascendant where any of the lineal ascendants (including the lineal ascendants of the spouse) is under the age of 60; |
| 3. | A person prescribed by Decree of the Ministry of Finance and Economy, who is a lineal ascendant under the age of 60 receiving medical care benefits under subparagraph 3a3), b2) or e of the Appendix 2 of the Enforcement Decree of the National Health Insurance Act. |
| (5) | Where a person owning one house comes to own two houses by marrying another person owning one house or where a person owning no house who serves, by living together, his or her lineal ascendant aged at least 60 years old who owns a house comes to own two houses by marrying another person having one house, the house first transferred within 10 years from the wedding day shall respectively be deemed one house for one household, and be governed by Article 154(1). <Amended on Dec. 31, 1996; Dec. 31, 1999; Dec. 29, 2000; Oct. 1, 2002; Feb. 4, 2009; Feb. 2, 2012; Nov. 12, 2024> |
| (6) | Where one household owning any of the following houses and another house (hereafter in this paragraph, referred to as "general house"), each in the Republic of Korea, transfers the general house, such household shall be deemed to own one house in the Republic of Korea, and be governed by Article 154(1): <Amended on Dec. 30, 2002; Feb. 19, 2005; Aug. 17, 2007; Feb. 18, 2010; Dec. 29, 2010; Dec. 31, 2019; May 26, 2020; May 7, 2024; Sep. 10, 2024> |
| 1. | Designated cultural heritage pursuant to Act on Conservation and Utilization of Cultural Heritage, and State-registered cultural heritage under the Act on the Conservation and Utilization of Modern and Contemporary Cultural Heritage, and natural monuments, etc., pursuant to the Act on Conservation and Utilization of Natural Heritage; |
| 2. | Deleted; <Feb. 8, 1999> |
| 3. | Deleted. <Feb. 8, 1999> |
| (7) | Where one household owning one of the following houses located in the area of an Eup (excluding an area within an urban area) or Myeon (hereafter in this Article, referred to as "house in an agricultural or fishing village") among the areas outside of the Seoul Metropolitan area, and another house (hereafter in this paragraph and paragraphs (11) through (13), referred to as "general house"), each in the Republic of Korea, transfers the general house, such household shall be deemed to own one house in the Republic of Korea, and be governed by Article 154(1); provided, the same paragraph shall apply to the house referred to in subparagraph 3, only where such general house is transferred to another person within five years from the date of acquisition of the house: <Amended Dec. 30, 2003; Feb. 19, 2005; Nov. 28, 2008; Feb. 17, 2016> |
| 1. | An inherited house (limited to where the decedent has resided therein for at least five years after acquisition); |
| 2. | A house of a person abandoning farming (including persons abandoning fisheries; hereafter in this Article the same shall apply), which he or she has resided for at least five years after the date of acquisition; |
| 3. | A house of a person returning to a rural area, which he or she acquires for the purpose of farming or fisheries. |
| (8) | Where a household that acquired and owns a house outside of the Seoul Metropolitan area and another house (hereafter in this paragraph, referred to as "general house") due to education prescribed by Decree of the Ministry of Finance and Economy, circumstances for the job, medical treatment of a disease, or any other unavoidable cause or reason (hereafter in this paragraph, referred to as "unavoidable cause"), transfers the general house to someone within three years from the date the unavoidable cause is resolved, such household shall be deemed to own one house in the Republic of Korea and shall be governed by Article 154(1). <Added on Nov. 28, 2008; Feb. 2, 2012; Dec. 30, 2025> |
| (9) | "House of a person abandoning farming" in paragraph (7)2, means a house in which the whole or part of family members living with a resident or his or her spouse, cannot reside any longer because those who have once engaged in farming or fishing have moved into any other Si (including a special self-governing city and an administrative Si established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City), Gu (referring to a Gu in the Special Metropolitan City or a Metropolitan City), Eup, or Myeon due to change of their job, and which is owned by those who have ceased farming. <Amended on Dec. 30, 1995; Feb. 15, 2013; Jan. 22, 2016; Feb. 28, 2023> |
| (10) | "House of a person returning to a rural area" in paragraph (7)3, means a house a person who intends to engage in farming or fishing acquired (including houses acquired before returning to a rural area) and has resided, meeting the following conditions: <Amended on Apr. 1, 1998; Dec. 30, 2002; Feb. 28, 2007; Feb. 29, 2008; Feb. 4, 2009; Feb. 21, 2014; Feb. 17, 2016; Mar. 31, 2016; Feb. 12, 2019; Feb. 15, 2022; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Deleted; <Feb. 17, 2016> |
| 2. | A house shall not fall under an expensive house under the provisions, with the exception of the items, of Article 89(1)3 of the Act at the time of acquiring such house; |
| 3. | The plottage shall not exceed 660 square meters; |
| 4. | Any of the following houses shall be acquired for farming or fishing: |
| a. | A house located in farmland of an area of at least 1,000 square meters (referring to the location of any farmland under Article 153(3) of the Act; hereafter in this Article the same shall apply) which is acquired by the person who owns the farmland or his or her spouse; |
| b. | A house located in the location of any farmland of an area of at least 1,000 square meters and acquired by any person or his or her spouse within one year before such person acquires that farmland; |
| c. | A house shall be acquired by a fisherman or his or her spouse, as prescribed by Decree of the Ministry of Finance and Economy; |
| 5. | All family members shall move into and reside in the house (including where some of the family members are unable to live together due to schooling, workplace situations, medical care for a disease, or any other inevitable cause specified by Decree of the Ministry of Finance and Economy). |
| (11) | Where the whole household members move into a house in an agricultural or fishing village due to return to farming, the provisions of the main sentence of paragraph (7) shall apply only to one general house first transferred after a return to farming. |
| (12) | Where the owner of a house as a returned farmer or fisherman eligible for the application of paragraph (7) fails to engage in farming or fishing continually for at least three years from the day he or she returns for farming or fishing (referring to the day he or she transfers his or her resident registration to the house owned as a returned farmer or fisherman and begins to reside in the house, or referring to the day he or she acquires farmland after he or she transfers his or her resident registration to the house owned as a returned farmer and begins to reside in the house, if the person acquires farmland after he or she acquires the house under paragraph (10)4b) or does not reside in the relevant house for the period, the transferred general house shall not be deemed one house for one household, and the owner of the house owned as a returned farmer or fisherman shall report and pay the amount computed by the following formula as capital gains tax within two months from the end of the month in which he or she ceases to engage in farming or fishing for at least three years or ceases to reside in the house for the period. In such cases, if inheritance commences during such period, the period of farming or fishing by the decedent and the period of farming or fishing by the heir shall be aggregated in calculating the period of three years. <Amended on Feb. 15, 2013; Mar. 31, 2016> |
┌───────────────────────────────┐
│ Capital gains tax to be paid = │
│ Amount of tax that would have been paid when paragraph (7) │
│ is not applied at the time of transferring the general house - Amount of tax that was paid │
│ according to paragraph (7) at the time of transferring the general house │
└───────────────────────────────┘
| (13) | Anyone who intends to be eligible for the application of paragraph (7) shall file an application of the special case of one house for one household that is prescribed by Decree of the Ministry of Finance and Economy, accompanied by documents prescribed by Decree of the Ministry of Finance and Economy, within the deadline for filing a return on the tax base of capital gains tax provided for in Article 105 or 110 of the Act. In such cases, the head of the competent tax office having jurisdiction over the place for tax payment shall confirm the following documents by mutual use of the administrative information provided for in Article 36(1) of the Electronic Government Act, and where the person who has made the report does not consent to such confirmation in cases falling under subparagraph 1, the head of the competent tax office having jurisdiction over the place for tax payment shall request him or her to submit such documents: <Amended on Jun. 12, 2006; Feb. 29, 2008; Dec. 31, 2008; May 4, 2010; Feb. 2, 2012; Feb. 13, 2018; Dec. 30, 2025> |
| 1. | A certified copy/extract of resident registration record card; |
| 2. | The certified copy of the land/building ledger of his or her general house and the land/building registration certificate thereof; |
| 3. | The certified copy of the land/building ledger and register of his or her house in an agricultural and fishing village and the land/building registration certificate thereof; |
| 4. | The certified copy of the register of acquired agricultural land. |
| (14) | In applying paragraphs (7) through (13), matters necessary for the scope of houses in an agricultural and fishing village shall be determined by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (15) | In applying Article 154(1), each divided unit of a multi-family house under subparagraph 1c of Appendix 1 to the Enforcement Decree of the Building Act shall be deemed one housing unit, if one household can dwell independently in the unit; provided, if each divided unit of a multi-family house is not sold separately, but the house is wholly sold as one unit for sale, the whole of the house shall be deemed one house. <Amended on Feb. 2, 2012; Feb. 3, 2015> |
| (16) | In applying paragraph (1) (limited to cases of owning one house in the Seoul Metropolitan area), "three years" in paragraph (1) shall be construed as "five years", where a corporation located in the Seoul Metropolitan area or a public agency defined in subparagraph 14 of Article 2 of the Special Act on Local Autonomy, Decentralization, and Balanced Regional Development is relocated to an area outside of the Seoul Metropolitan area and another house acquired by a household of which an executive or employee of the corporation, or a worker of the public agency is a member, is situated in the Si (including a Special Self-Governing City, a Metropolitan City, and an administrative Si established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; hereafter the same shall apply in this paragraph) or Gun to which the public agency or corporation is relocated or an area of another Si/Gun adjoining to the Si/Gun. In such cases, the requirement of acquiring another house after at least one year from the date of acquisition of the previous house shall not apply to the one household concerned. <Amended on Jun. 29, 2012; Feb. 15, 2013; Mar. 11, 2014; Jan. 22, 2016; Feb. 12, 2019; Jun. 8, 2021; Jul. 7, 2023> |
| (17) | Deleted. <Feb. 15, 2022> |
| (18) | "Causes prescribed by Presidential Decree" in Article 89(1)4b of the Act, means the following cases as at the third anniversary of the date of acquisition of another house: <Added on Feb. 3, 2017; Feb. 9, 2018; Feb. 11, 2020; Feb. 17, 2021; Feb. 15, 2022; Feb. 17, 2022> |
| 1. | Where a sale is requested to the Korea Asset Management Corporation under the Act on the Establishment of Korea Asset Management Corporation; |
| 2. | Where a petition for an auction is filed with a court; |
| 3. | Where a public auction under the National Tax Collection Act is pending; |
| 4. | Where a lawsuit filed by an owner of land, etc. who is entitled to a payment in cash under Article 73 of the Act on the Improvement of Urban Areas and Residential Environments or Article 36 of the Act on Special Cases concerning unoccupied House or Small-Scale Housing Improvement for executing a housing redevelopment project or housing reconstruction project, or a small-scale reconstruction project, etc. is pending to seek the payment in cash from the project implementor or where proceedings for a lawsuit were completed but the relevant payment has not been settled; |
| 5. | Where a petition for adjudication on expropriation or a lawsuit for a claim for sale filed by a project implementor pursuant to Article 73 of the Act on the Improvement of Urban Areas and Residential Environments or Article 36 of the Act on Special Cases concerning Unoccupied House and Small-Scale Housing Improvement for executing a redevelopment project, reconstruction project or small-scale reconstruction project, etc. against an owner of land, etc. under subparagraph 6 of Article 2 of the Act on Special Cases concerning Unoccupied House and Small-Scale Housing Improvement is pending or where a petition for adjudication or proceedings for a lawsuit were completed but the relevant owner of land, etc. fails to receive the relevant payment for sale. |
| (19) | In applying paragraphs (2) and (3), where an inherited house fails to be divided in consultation to be registered pursuant to Article 1013 of the Civil Act by the time a house, other than an inherited house, is transferred, it shall be deemed that the inheritor owns the inherited house, as designated by his or her share of inheritance under Articles 1009 and 1010 of the same Act; provided, where he or she divides the inherited house in consultation and registers it, after transferring a house, other than the inherited house, within the period of limitation for imposition of national taxes under Article 26-2 of the Framework Act on National Taxes, a person who has to additionally pay capital gains tax because Article 154(1) was previously applied to him or her pursuant to paragraphs (2) and (3) before the said registration and the said Article 154(1) became not applied after the registration shall report and pay the amount, as a capital gains tax, calculated in accordance with the below formula within two months from the last day of the month to which the date of registration belongs: <Amended on Feb. 15, 2013> Capital gains tax to be paid = Amount of tax that would have been paid when paragraph (2) or (3) is not applied at the time of transferring a general house - Amount of tax that was paid after application of paragraph (2) or (3) at the time of transferring a general house |
┌────────────────────────────────┐
│ Capital gains tax to be paid = Amount of tax │
│ that would have been paid when paragraph (2) or (3) is not applied │
│ at the time of transferring a general house - Amount of tax that was paid │
│ after application of paragraph (2) or (3) at the time of transferring a general house │
└────────────────────────────────┘
| (20) | Where a household owning either a house under Article 167-3(1)2 {in cases of houses falling under Article 167-3(1)2c, limited to the houses that are not subject to the restriction on period specified in the proviso of the relevant item, but whose registration of rental business entity is applied for (including cases where the changes in registered matters are reported to add houses to be rented); and in cases of houses falling under item e of that subparagraph, including houses under subitem 1) of that item [limited to cases falling under subitems 2) and 3) of that item]; hereafter in this Article, referred to as "long-term rental housing"} or a house under Article 167-3(1)8-2 (hereinafter referred to as "long-term child care center") and any other one house in the Republic of Korea transfers the other one house (hereafter in this Article, referred to as "residing house") while meeting the requirements under subparagraph 1 and 2 or subparagraphs 1 and 3, respectively, Article 154(1) shall apply as if the household owned one house in the Republic of Korea. In such cases, where such residing house has ever been registered as a private rental house under Article 5 of the Special Act on Private Rental Housing or has ever been used as a child care center which is given authorization under Article 13(1) of the Child Care Act or is entrusted pursuant to Article 24(2) of that Act and is a residing house (hereafter referred to as "as "immediately preceding residing and owned house" in this paragraph) during possession period of which there is another residing house (referring to the residing house transferred the most lately, where there are two or more other transferred residing houses; hereinafter referred to as "immediately preceding residing house") which is transferred during the period of the former residing house, Article 154(1) shall apply as if the household owned one house in the Republic of Korea, only for the period after the date of transferring the immediately preceding residing house. <Added on Oct. 14, 2011; Feb. 2, 2012; Feb. 15, 2013; Feb. 3, 2015; Dec. 28, 2015; Feb. 3, 2017; Feb. 13, 2018; Feb. 12, 2019; Feb. 11, 2020; Oct. 7, 2020; Feb. 17, 2021; Feb. 15, 2022; Feb. 28, 2025> |
| 1. | Residing house: The period of residence (in case of the immediately preceding residing house, referring to either the period of residence after the date when the relevant household completes business registration under Article 168 of the Act and registration as a rental house business operator under Article 5 of the Special Act on Private Rental Housing, the period of residence after the date when the relevant household obtains authorization under Article 13(1) of the Child Care Act or the date when the operation commences under a contract for entrustment under Article 24(2) of that Act) during the owning period shall be at least two years; |
| 2. | Long-term rental house: The household shall be registered as a business operator under Article 168 of the Act as at the date of transfer and has a long-term rental house registered as a private rental house and rented under Article 5 of the Special Act on Private Rental Housing, and the annual increase rate of rental deposits or fees (hereafter in this subparagraph, referred to as “fees, etc.”) shall not exceed 5/100. In such cases, the request for the increased amount of fees, etc. shall not be made within one year after the contract for lease is entered into or agreed fees, etc. are increased, and if a rental business entity mutually converses between rental deposit and monthly fees while claiming the increase of fees, etc., the provisions concerning conversion under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis; |
| 3. | Long-term child care center: The household shall be assigned taxpayer code number pursuant to Article 168 of the Act and be operating a long-term child care center, as of the date of its transfer. |
| (21) | Even where one household transfers its residential house before meeting the lease period requirements for a long-term rental house (hereafter referred to as "lease period requirements" in this Article) or operation period requirements for a long-term child care center (hereafter in this Article, referred to as "operation period requirements" in this Article), paragraph 20 shall apply by deeming that the relevant rental house or the child care center is a long-term rental house or a long-term care center, respectively. <Added on Feb. 13, 2018; Feb. 15, 2022> |
| (22) | Where one household is no longer able to meet the lease period requirements or the operation period requirements after being subject to paragraph (21) (including where the period during which it fails to meet the required number of leased units for a long-term rental has elapsed six months), the amount calculated pursuant to the formula under subparagraph 1 shall be reported and paid within two months from the last day of the month to which the date of failure to meet the lease period requirements belongs. In such cases, where falling under the special cases of calculation of the lease period requirements or the operation period requirements in subparagraph 2, the relevant provisions thereof shall govern: <Amended on Feb. 2, 2012; Feb. 15, 2013; Feb. 3, 2017; Feb. 9, 2018; Feb. 13, 2018; Feb. 11, 2020; Oct. 7, 2020; Feb. 15, 2022; Dec. 30, 2025> |
| 1. | Calculation formula for the capital gains tax to be paid: |
Amount of tax that should have been paid where the relevant rental house is not deemed as a long-term rental house or a long-term child care center at the time of transferring such residing house ? Amount of tax that has been paid by applying paragraph (20) as at the time of transferring such residential house
| 2. | Special cases of calculation of lease period requirements and the operation period requirements: |
| a. | Where a household ceases to meet the lease period requirements or the operation period requirements or lease the number of house units required to be leased due to unavoidable causes prescribed by Decree of the Ministry of Finance and Economy, such as expropriation under the Act on Acquisition of and Compensation for Land for Public Works Projects, it shall be deemed to continuously lease the relevant rental house or operate the relevant child care center; |
| b. | Where there is a ground for a redevelopment project, reconstruction project, or small-scale reconstruction project, etc., the period from six months before the date of authorizing a management and disposal plan under Article 74 of the Act on the Improvement of Urban Areas and Residential Environments (referring to a project implementation plan under the Act on Special Cases concerning unoccupied House or Small-Scale Housing Improvement in the case of small-scale reconstruction project, etc.; hereinafter referred to as “management and disposal plan, etc.”) for the house concerned to six months after the date of completion of such house shall not be included when calculating a period during which a child care center is not operated or a period during which the house units required to be leased are not leased; |
| c. | Where there is a ground for remodeling under Article 2 of the Housing Act, in order to calculate the period not leasing the units required to be leased, the period from six months before the date of approving a project plan under Article 15 of that Act or the date of permitting remodeling under Article 66 of that Act until six months after the date of completion of such house shall not be included; |
| d. | Where long-term rental housing falling under Article 167-3(1)2a and c through e (limited to housing to which Article 5(1) of the Addenda of the Special Act on Private Rental Housing, which is partially amended by Act No. 17482, applies) falls under any of the following cases, its registration is terminated, so the rental period requirements falling under Article 167-3(1)2a and c through e are not met, the relevant rental period requirements shall be deemed to be met when the registration is cancelled: |
1) Where the registration is cancelled through an application for cancellation of registration within the mandatory rental period of a rental business entity pursuant to Article 6(1)11 of the Special Act on Private Rental Housing (limited to cases where the long-term rental house is leased for not less than 1/2 of its mandatory rental period under Article 43 of that Act);
2) Where the registration is cancelled on the date of expiry of the mandatory rental period under Article 6(5) of the Special Act on Private Rental Housing;
| e. | When a house which is newly acquired due to the destruction of the original long-term rental house rented as a result of a redevelopment project, reconstruction project or small-scale reconstruction project, etc. or is newly acquired as a result of remodeling under Article 2 of the Housing Act falls under any of the following cases, and thus, it fails to meet the relevant requirements for the rental period, the relevant requirements for the rental period shall be deemed to be met on the date when the registration of the original house (referring to the house before the new acquisition due to the reconstruction, etc.; hereafter in this item, the same shall apply); provided, where the period not leasing the units required to be leased (referring to the period calculated pursuant to the provisions, with the exception of the subparagraphs, of this paragraph) exceeds six months, the requirements for the rental period shall not be deemed to not been met: |
1) For a newly acquired house, where an application for registration (including cases where the changes in registered matters are reported to add houses to be rented) as a rental business entity is made under Article 5 of the previous Special Act on Private Rental Housing after July 11, 2020 for buy-to-rent private housing whose rental property is an apartment among long-term private rental housing under subparagraph 5 of Article 2 of the previous Special Act on Private Rental Housing or short-term private rental housing under subparagraphs 6 of Article 2 of the previous Special Act on Private Rental Housing;
2) Where a newly acquired house is an apartment (where the original house is registered as a short-term private rental housing, referring to all houses) and the application for the registration of a rental business entity under Article 5 of the Special Act on Private Rental Housing is not made.
| (23) | Where long-term rental housing falling under Article 167-3(1)2a and c through e (limited to housing to which Article 5(1) of the Addenda of the Special Act on Private Rental Housing (Act No. 17482) applies) falls under any of the following cases and its registration is cancelled, paragraph (20) shall apply as if the rental period requirements were met only for the cases where the residing house is transferred within five years from the cancellation of the relevant registration (in cases where more than two long-term rental housing units are rented, after the cancellation of registration of a long-term rental housing unit whose registration is cancelled for the first time): <Added on Oct. 7, 2020> |
| 1. | Where the registration is cancelled through an application for cancellation of registration within the mandatory rental period of a rental business entity pursuant to Article 6(1)11 of the Special Act on Private Rental Housing (limited to cases where the long-term rental house is leased for not less than 1/2 of its mandatory rental period under Article 43 of that Act); |
| 2. | Where the registration is cancelled on the date of expiry of the mandatory rental period under Article 6(5) of the Special Act on Private Rental Housing. |
| (24) | Any person who intends to be governed by Article 20 shall submit a report of tax base for the taxable period to which the date of transfer of the residential house belongs and an application prescribed by Decree of the Ministry of Finance and Economy, together with the following documents, to the head of the competent tax office having jurisdiction over the place for tax payment: <Added on Oct. 14, 2011; Feb. 2, 2012; Dec. 28, 2015; Feb. 3, 2017; Feb. 13, 2018; Feb. 11, 2020; Oct. 7, 2020; Feb. 17, 2021; Feb. 15, 2022; Dec. 30, 2025> |
| 1. | A copy of a certificate of entrustment of a national or public child care center where the operation of a child care center is entrusted pursuant to Article 24 of the Child Care Act; |
| 2. | A copy of the lease contract of the long-term rental house; |
| 3. | A certified copy of a resident registration or a copy of resident registration certificate of the lessee. In such cases, it shall be substituted with submitting the details of inspection on move-in household inspected pursuant to Article 29(1) of the Resident Registration Act; |
| 4. | Other documents prescribed by Decree of the Ministry of Finance and Economy. |
| (25) | The head of the competent tax office having jurisdiction over the place for tax payment in receipt of a report under paragraph (24) shall verify the following documents by sharing administrative information provided for in Article 36(1) of the Electronic Government Act, and if the applicant does not consent to the verification of the document specified in subparagraph 1 or 4, he or she shall request the applicant to submit the document: <Added on Oct. 14, 2011; Feb. 2, 2012; Feb. 3, 2017; Feb. 13, 2018; Oct. 7, 2020; Feb. 17, 2021; Feb. 15, 2022; Sep. 26, 2023> |
| 1. | A certified copy/extract of resident registration record card; |
| 2. | A land/building ledger and register and a registration certificate of the residing house; |
| 3. | A registration certificate or a certified copy of land/building ledger and register of a long-term rental house or a long-term child care center; |
| 4. | A certificate of registration as a rental business entity under Article 4(5) of the Enforcement Decree of the Special Act on Private Rental Housing or a certificate of authorization of a child care center under Article 13 of the Child Care Act. |
| Article 155-2 (Special cases concerning one house for one household on house on long-term security) |
| (1) | Where one household owning one house in the Republic of Korea transfers a house offered as security for long-term mortgage (hereafter referred to as "house on long-term mortgage" in this Article) after concluding a loan contract with a long-term mortgage equipped with requirements of each of the following subparagraphs, in applying the provisions of Article 154(1), it shall not be subject to the restrictions on residing period: <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| 1. | The participant who has offered a house for security as of the date of concluding a contract shall be over 60 years of age; |
| 2. | A period of a contract for long-term mortgage is over 10 years, and it shall be on condition that the loan money shall be received until maturity each month, each quarter, or other methods prescribed by Decree of the Ministry of Finance and Economy; |
| 3. | It shall be on condition of contract that the loan shall be refunded at one time by disposing of relevant house at maturity. |
| (2) | Where a person owning one house and consisting one household becomes to own two houses by one household as he or she joins the households in order to serve, by living together, the lineal ascendants owning a house on long-term mortgage (including the lineal ascendants of spouse), with regard to the house transferred first, it shall be deemed to have one house in the Republic of Korea and the provisions of Article 154(1) shall apply, but the house on long-term mortgage shall not be subject to a restriction on residing period. |
| (3) | Where one household transfers a house on long-term mortgage before expiration of contract period under paragraph (1), the provisions of paragraphs (1) and (2) shall not be applicable. |
| (4) | Anyone who intends to be eligible for the application of the provisions of paragraph (2) shall make a report on the application of the special case for a long-term mortgaged house that is prescribed by Decree of the Ministry of Finance and Economy, accompanied by the loan contract referred to in the provisions of paragraph (1), for the long-term mortgaged house, within the deadline for filing a return on the tax base of capital gains tax provided for in Article 105 or 110 of the Income Tax Act. In such cases, the head of the competent tax office having jurisdiction over the place for tax payment shall confirm the following documents by common use of the administrative information provided for in Article 36(1) of the Electronic Government Act: <Amended on Jun. 12, 2006; Feb. 29, 2008; Dec. 31, 2008; May 4, 2010; Dec. 30, 2025> |
| 1. | The certified copy of the land and building register of other house than the house on long-term mortgage; |
| 2. | The certified copy of the land and building register of the house on long-term mortgage. |
[This Article Added on Feb. 19, 2005]
| Article 155-3 (Special cases concerning one house for one household on Win-Win Rental Housing) |
| (1) | Where one household owning one house (including cases where it is deemed that one household owns one house under Articles 155, 155-2, 156-2, 156-3 and other statues) in the Republic of Korea transfers the house meeting all the following requirements (hereinafter referred to as "win-win rental housing"), it shall not be subject to restriction on the period of residence under the relevant provisions in applying Article 154(1), 155(20)1 and 159-4: <Amended on Aug. 2, 2022; Feb. 28, 2023; Nov. 12, 2024> |
| 1. | The household shall enter into (limited to cases where the fact that the contract deposit is received is confirmed through evidentiary documents) a lease agreement that does not increase rental deposit fees by more than 5/100 (hereafter in this Article, referred to as "win-win lease agreement") over the immediately preceding lease agreement that is entered into with a tenant for the relevant house (excluding a lease agreement if the status of lessor is succeeded as a result of the acquisition of the relevant house; hereafter in this Article, referred to as the "immediately preceding lease agreement") during the period from December 20, 2021 to December 31, 2026 after acquiring the house and shall commence the lease; |
| 2. | The rental period under the immediately preceding lease agreement shall be not less than one year and six months; |
| 3. | The rental period under the win-win lease agreement shall be not less than two years. |
| (2) | When entering into a win-win lease agreement, for mutual conversion between rental deposit and monthly fees, the increase rate of rental deposit or fees shall be calculated in accordance with the standards prescribed in Article 44(4) of the Special Act on Private Rental Housing. |
| (3) | The rental period under the immediately preceding lease agreement and the win-win lease agreement shall be calculated based on calendar months, and in cases of less than one month, it shall be deemed one month. <Amended on Aug. 2, 2022; Feb. 28, 2023> |
| (4) | When calculating the rental period under the immediately preceding lease agreement and the win-win lease agreement, if a new lease agreement is entered into as it is impractical to continue the lease due to the circumstances of a tenant and the requirements prescribed by Decree of the Ministry of Finance and Economy are fulfilled, the rental period shall be calculated by aggregating the rental period of the new lease agreement. <Added on Feb. 28, 2023; Dec. 30, 2025> |
| (5) | A person who intends to be eligible for the application of paragraph (1) shall submit an application of the special case for win-win rental housing that is prescribed by Decree of the Ministry of Finance and Economy, accompanied by the immediately preceding lease agreement and the win-win lease agreement on the relevant house, to the head of the competent tax office having jurisdiction over the place for tax payment. In such cases, the head of the competent tax office shall confirm the certificates of registered matters on land/building of the relevant house by common use of the administrative information provided for in Article 36(1) of the Electronic Government Act. <Amended on Aug. 2, 2022; Feb. 28, 2023; Dec. 30, 2025> |
[This Article Added on Feb. 15, 2022]
| Article 156 (Scope of high-priced houses) |
| (1) | In applying the provisions, with the exception of the items, of Article 89(1)3 of the Act, if one house and land appurtenant thereto are partially transferred or the part of them is held by another person and the amount calculated by dividing the total amount of the actual trading value by the ratio of the area of the part that is transferred (including the part held by another person) to the total area of the house exceeds 1.2 billion won, it shall be deemed a high-priced house. <Amended on Feb. 15, 2022> |
| (2) | In calculating the actual trading price of a high-priced house under the provisions, with the exception of the items, of Article 89(1)3 of the Act, the actual trading values falling under the portion deemed a house under the main clause of Article 154(3) (including the land appurtenant thereto) shall be included. <Amended on Feb. 15, 2022> |
| (3) | In cases of a multi-family house deemed a single house under Article 155(15), the provisions, with the exception of the items, of Article 89(1)3 of the Act shall apply by deeming the whole of them one house. <Amended on Feb. 15, 2022> |
[This Article Wholly Amended on Dec. 30, 2002]
| Article 156-2 (Special cases concerning one house for one household in cases of owning house and right to acquire new house as association member) |
| (1) | Deleted. <Feb. 3, 2017> |
| (2) | "Circumstances prescribed by Presidential Decree" in the proviso to Article 89(2) of the Act means cases falling under paragraphs (3) through (11) where one household owns a house and a right to acquire a house as an association member and then transfers the house. <Amended on Feb. 18, 2010; Feb. 17, 2021> |
| (3) | Where one household owning one house in the Republic of Korea comes to temporarily own one house and one right to acquire a new house as an association member by acquiring such right before transferring the relevant house (hereafter referred to as "previous house" in this paragraph), and where the previous house is transferred within three years from the date of the right to acquire a new house as an association member which was acquired at least one year after the date of acquiring the previous house (including cases corresponding to the reasons prescribed by Decree of the Ministry of Finance and Economy, which is cases where it may not be transferred within three years), it shall be deemed one house for one household, and Article 154(1) shall apply. In such cases, where falling under Article 154(1)1, 2a, and 3, the requirement of acquisition of the right to acquire a new house as an association member at least one year after the date of acquiring the previous house shall not apply. <Amended on Feb. 29, 2008; Nov. 28, 2008; Jun. 29, 2012; Feb. 15, 2013; Dec. 30, 2025> |
| (4) | Where one household owning one house in the Republic of Korea comes to own temporarily one house and one right to acquire a new house as an association member by acquiring such right before transferring the relevant house (hereafter in this paragraph, referred to as the "previous house"), and where the previous house is transferred after three years elapse from the date of acquiring the right, and when all the following requirements are satisfied, Article 154(1) shall apply as if the household owned one house. In such cases, cases falling under Article 154(1)1, 2a and 3 shall not be subject to the requirement to acquire a right to acquire a house as an association member after one year elapses from the date of acquiring the previous house: <Amended on Feb. 29, 2008; Nov. 28, 2008; Feb. 2, 2012; Jun. 29, 2012; Feb. 9, 2018; Dec. 30, 2025> |
| 1. | All members of the household shall move (including where some of constituents of a household may not be moved by entering school prescribed by Decree of the Ministry of Finance and Economy, status in work, medical treatment of diseases, and other inevitable reasons) into a house within three years after the completion of the house acquired according to a management and disposal plan of a redevelopment project, reconstruction project or small-scale reconstruction project, etc., and continuously reside in the house for at least one year; |
| 2. | The previous house shall be transferred within three years before or after the completion of a house acquired under a management and disposal plan of a redevelopment project, reconstruction project or small-scale reconstruction project, etc. |
| (5) | Where one household owning one house in the Republic of Korea has acquired another house (hereafter referred to as "substitute house" in this paragraph) for residing for the period of implementation of a redevelopment project, reconstruction project or small-scale reconstruction project, etc. for the relevant house, and transfers the substitute house by meeting all the following requirements, Article 154(1) shall apply as if the household owned one house. In such cases, the restrictions of holding period or residing period under Article 154(1) shall not apply: <Amended on Feb. 29, 2008; Nov. 28, 2008; Feb. 18, 2010; Feb. 2, 2012; Feb. 21, 2014; Feb. 9, 2018; Dec. 30, 2025> |
| 1. | It shall reside for at least one year by acquiring the substitute house after the approval date of implementation of a redevelopment project, reconstruction project or small-scale reconstruction project, etc.; |
| 2. | It shall reside for a continuous period of at least one year after all members of a household moving (including where some of the family members are unable to live together due to schooling, workplace situations, medical care for a disease, or any other inevitable cause specified by Decree of the Ministry of Finance and Economy) into the relevant house within three years after the completion of house acquired under a management and disposal a redevelopment project, reconstruction project or small-scale reconstruction project, etc.; provided, where all members of a household depart from the Republic of Korea because they need to live in a foreign country for a continuous period of at least one year on account of entering school or work within three years after the completion of a house, they shall live in a house for a continuous period of at least one year after returning home when there is no reason for departure from the Republic of Korea (only applicable where such need for departure ceases to exist within three years after departure); |
| 3. | It shall transfer the substitute house within 3 years before or after the completion of the house acquired according to the management disposition plan for redevelopment projects, reconstruction projects, or small-scale reconstruction projects, etc. |
| (6) | Where one household owning the succeeded association member's relocation right (only applicable to the succeeded association member's relocation right where the inheritee does not own a house at the time of commencement of inheritance, and only applicable to one association member's relocation right in the order of the following where the inheritee holds at least two association member's relocation rights at the time of commencement of inheritance) and another house (applicable only to the house owned at the time of commencement of inheritance or the newly built house acquired after the completion of a project by exercising an association member's relocation right owned at the time of commencement of inheritance, and the following shall be excluded therefrom: A house donated from the inheritee within two years retroactively from the commencement day of inheritance or a newly-built house acquired after completion of a project with an association member's relocation right.; hereafter referred to as "general house" in this paragraph) respectively in the Republic of Korea transfers the general house, it shall be deemed to have one house in the Republic of Korea, and Article 154(1) shall apply; provided, where an inheritor and an inheritee form one household at the time of commencement of inheritance, it shall be deemed an association member's relocation right inherited only where any person who owns one house and forms one household becomes the owner of two houses by combining households to provide for his or her lineal ascendants (including lineal ascendants of his or her spouse; only applicable where any one or all of them are aged 60 and over and own one house as of the date of unification), and such house owned before combining households is changed to an association member's relocation right (hereafter the same shall apply in paragraph (7)2): <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 15, 2013; Feb. 21, 2014; Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021> |
| 1. | Inherited house. In such cases, where an inheritee owns at least two houses at the time of commencing the inheritance, it shall be limited to one house under the order of each subparagraph of Article 155(2); |
| 2. | Inherited right to acquire a house as an association member where an inheritee does not own any house at the time of commencing the inheritance. In such cases, where the inheritee owns at least two association member's relocation rights at the time of commencing inheritance, it shall be limited to one right to acquire a house as an association member under the order under each subparagraph of paragraph (6); |
| 3. | In cases of co-inherited right to acquire a house as an association member, it shall be deemed that a person falling under the relevant item owns the co-inherited right to acquire a house as an association member under the order of each item: |
| (7) | Where one household owning one house under subparagraph 1, or one right to acquire a house as an association member under subparagraph 2, one house acquired by the reason other than inheritance (hereafter referred to as "general house" in this paragraph) and one right to acquire a house as an association member acquired by the reason other than inheritance respectively in the Republic of Korea transfers the general house, paragraphs (3) through (5) shall apply as if the household owned the general house and a right to acquire a house as an association member acquired by reason other than inheritance. In such cases, the general house subject to application of paragraphs (3) and (4) shall be limited to the house owned at the time of commencement of inheritance (excluding a house donated from the inheritee within two years retroactively from the commencement day of inheritance or a newly-built house acquired after completion of a project with a right to acquire a house as an association member or pre-completion apartment ownership): <Amended on Feb. 15, 2013; Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021; Feb. 15, 2022> |
| 1. | Inherited house. In such cases, where an inheritee owns at least two houses at the time of commencing the inheritance, it shall be limited to one house under the order of each subparagraph of Article 155(2); |
| 2. | Inherited right to acquire a house as an association member where an inheritee does not own any house at the time of commencing the inheritance. In such cases, where the inheritee owns at least two association member's relocation rights at the time of commencing inheritance, it shall be limited to one right to acquire a house as an association member under the order under each subparagraph of paragraph (6); |
| 3. | In cases of a co-inherited right to acquire a house as an association member, any person falling under the relevant items in the following order shall be deemed to own the co-inherited right to acquire a house as an association member: |
| a. | The heir with the largest share in inheritance; |
| b. | A person who has resided in the house owned by the inheritee as of the date of approval (in cases where the house is demolished before the date of approval, the date the previous house is demolished) of a management and disposal plans of a redevelopment project, reconstruction project or small-scale reconstruction project, etc. of the relevant co-inherited right to acquire a house as an association member; |
| 4. | A pre-completion apartment ownership inherited where an inheritee does not own any house or pre-completion apartment ownership at the time of commencing the inheritance. In such cases, where the inheritee owns more than two pre-completion apartment ownerships at the time of commencing the inheritance, it shall be limited to one pre-completion apartment ownership under the order of the subparagraphs of Article 156-3(5); |
| 5. | In cases of co-inherited pre-completion apartment ownership (referring to one pre-completion apartment ownership jointly owned by several persons through inheritance; hereinafter the same shall apply), it shall be deemed that a person falling under the relevant items owns such co-inherited pre-completion apartment ownership under the following order: |
| a. | The heir with the largest share in inheritance; |
| (8) | Where one household owns one house and one right to acquire a house as an association member, one house and two rights to acquire a house as an association member, two houses and one rights to acquire a house as an association member, or two houses and two pre-completion apartment ownerships, etc., as a person falling under subparagraph 1 unites the households in order to care for a person falling under subparagraph 2 by living together, and where the house first transferred (hereafter referred to as "the first transferred house") within 10 years from the date of unity falls under any of the houses under subparagraph 3, 4, or 5, Article 154(1) shall apply as if the household owned one house: <Amended on Feb. 4, 2009; Feb. 2, 2012; Feb. 15, 2013; Feb. 9, 2018; Feb. 13, 2018; Feb. 17, 2021; Feb. 15, 2022> |
| 1. | A person who constitutes one household and owns any of the following: |
| b. | One right to buy a house as an association member or one pre-completion apartment ownership; |
| c. | One house and one right to buy a house as an association member or one pre-completion apartment ownership; |
| 2. | A lineal ascendant (including lineal ascendants of one’s spouse and includes where any one of them is less than 60 years old) of at least 60 years old who owns any of the following: |
| b. | One right to buy a house as an association member or one pre-completion apartment ownership; |
| c. | One house and one right to buy a house as an association member or one pre-completion apartment ownership; |
| 3. | A house which a person falling under subparagraph 1a or 2a owns before the date of unity; |
| 4. | A house which a person falling under subparagraph 1c or 2c owns before the date of unity; provided, it shall be limited to where any of the following requirements has been fulfilled: |
| a. | Where a right to acquire a house as an association member he or she owns before the date of unity (referring to an association member's relocation right owned by the person who owns the first transferred house before the date of unity; hereafter referred to as "right to acquire a house as an association member before the unity" in this paragraph) is what acquired first due to approval of management and disposal plans (hereafter referred to as "first right to acquire a house as an association member" in paragraph (9)), the first transferred house shall be acquired after the approval date of project implementation plans for residing in during the implementation period of such redevelopment project, reconstruction project, or small-scale reconstruction project, etc. and it shall have been resided in for at least one year after acquisition; |
| b. | Where a right to acquire a house as an association member before the unity is what has been acquired in succession due to a transaction, etc., the first transferred house shall be what has been owned before the acquisition of the right to acquire a house as an association member before the unity; |
| c. | The first transferred house shall be what has been owned before the acquisition of a pre-completion apartment ownership before the date of unity as a pre-completion apartment ownership acquired before the date of unity; |
| 5. | A house to be acquired, thanks to the one right to acquire a house as an association member owned by a person falling under subparagraph 1b or 2b before the date of unity, after the date of unity in accordance with a management disposal plan or the completion of project implementation for a redevelopment project, reconstruction project, or small-scale reconstruction project, etc.. |
| (9) | Where a person falling under subparagraph 1 is married with another person falling under subparagraph 1, one household owns one house and one right to buy a house as an association member, one house and two rights to buy a house as an association member, two houses and one right to buy a house as an association member, or two houses and two rights to buy a house as an association member, and the first house transferred (hereafter referred to as "the first transferred house" in this paragraph) within 10 years from the date of marriage falls under any of the houses under subparagraph 2, 3, or 4, Article 154(1) shall apply as if the household owned one house: <Amended on Feb. 4, 2009; Feb. 15, 2013; Feb. 9, 2018; Feb. 13, 2018; Feb. 17, 2021; Feb. 15, 2022; Nov. 12, 2024> |
| 1. | A person who owns any of the following: |
| b. | One right to buy a house as an association member or one pre-completion apartment ownership; |
| c. | One house and one right to buy a house as an association member or one pre-completion apartment ownership; |
| 2. | A house which a person falling under subparagraph 1a owns before the date of marriage; |
| 3. | A house which a person falling under subparagraph 1c owns before the date of marriage; provided, it shall be limited to where any of the following requirements is met: |
| a. | Where a right to buy a house as an association member he or she owns before the date of marriage (referring to a right to buy a house as an association member possessed by a person who has owned the first transferred house before the date of marriage; hereafter referred to as "right to buy a house as an association member before the marriage" in this paragraph) is the first right to buy a house as an association member, the first transferred house is what has been acquired after the approval date of project implementation for residing during the period of implementing a redevelopment project, reconstruction project, or small-scale reconstruction project, etc., and it shall be resided in for at least one year after acquisition; |
| b. | Where a right to buy a house as an association member before the marriage is what has been acquired in succession due to a transaction, etc., the first transferred house is what has been owned before the acquisition of the right to buy a house as an association member before the marriage; |
| c. | The first transferred house is what has been owned before the acquisition of a pre-completion apartment ownership before the date of marriage as a pre-completion apartment ownership acquired before the date of marriage; |
| 4. | A house to be acquired, thanks to the one a right to buy a house as an association member or pre-completion apartment ownership owned by a person falling under subparagraph 1b before the date of marriage, after the date of marriage in accordance with a management disposal plan or the completion of project implementation for a redevelopment project, reconstruction project, or small-scale reconstruction project. etc. |
| (10) | Where one household owning one house falling under Article 155(6)1, another house (hereafter referred to as "general house" in this paragraph), and one a right to buy a house as an association member in the Republic of Korea respectively transfers the general house, paragraphs (3) through (5) shall apply as if the household owned the general house and a right to buy a house as an association member in the Republic of Korea. |
| (11) | Where one household owning, from among houses in an agricultural and fishing village under the provisions of Article 155(7), one house for ceasing farming under Article 155(7)2 and another house (hereafter referred to as "general house" in this Article) and one a right to buy a house as an association member in the Republic of Korea respectively transfers the general house, paragraphs (3) through (5) shall apply as if the household ownedthe general house and the right to buy a house as an association member in the Republic of Korea. |
| (12) | A person intending to be subject to paragraphs (3) through (11) shall submit a written report on special case application for one house for one household for the owner of a right to buy a house as an association member, prescribed for by Decree of the Ministry of Finance and Economy, together with the following documents within the deadline for the tax base report of capital gains tax under the provisions of Article 105 or 110 of the Act: <Amended on Jun. 12, 2006; Feb. 29, 2008; Dec. 30, 2025> |
| 1. | The copy of the resident registration certificate (limited to where it is impossible to confirm based on the resident registration card); |
| 2. | Deleted; <Jun. 12, 2006> |
| 3. | The certified copy of the land and building register of a house before conversion into a right to buy a house as an association member; provided, it shall be limited to a person subject to an application of the provisions of paragraph (5) (including cases subject to an application of paragraph (5) pursuant to the provisions of paragraphs (7) through (11)); |
| 4. | Deleted; <Jun. 12, 2006> |
| 5. | Other documents prescribed by Decree of the Ministry of Finance and Economy. |
| (13) | When one household subjected to an application of the provisions of paragraph (4) or (5) (including one household subjected to the provisions of paragraph (4) or (5) pursuant to paragraph (7), (10), or (11)) fails to meet the requirements of paragraph (4)1 or (5)2, it shall report and pay the amount of tax that would have been paid if the household had not been subject to application of paragraph (4) or (5) at the time of transfer of house, as capital gains tax, within two months from the last day of the month to which the date the cause has occurred belongs. <Amended on Feb. 15, 2013> |
| (14) | The head of the competent tax office having jurisdiction over the place over tax payment, who receives a written report on special case application of one house for one household for the owner of a right to buy a house as an association member pursuant to paragraph (12) shall confirm the following documents by mutual use of the administrative information provided for in Article 36(1) of the Electronic Government Act; provided where a person who has made the report does not consent to the confirmation in cases falling under subparagraph 1, the head of the competent tax office having jurisdiction over the place for tax payment shall request him or her to submit such documents: <Added on Jun. 12, 2006; Dec. 31, 2008; May 4, 2010> |
| 1. | A certified copy of his or her resident registration card; |
| 2. | A certified copy of the land and building ledger of the house to be transferred; |
| 3. | The certified copy of the land and building register of his or her house in an agricultural and fishing village (limited to cases falling under paragraph (11)). |
| (15) | Where a decedent does not own a house but owns only a right to buy a house as an association member or pre-completion apartment ownership as at the time of commencing inheritance, paragraph (6) or (7)2 or 4 may apply as if an heir was inherited only either of the right to buy a house as an association member or pre-completion apartment ownership. In such cases, the requirement that the decedent shall not own the right to buy a house as an association member or pre-completion apartment ownership as at the time of commencing inheritance shall not apply thereto. <Added on Feb. 17, 2021> |
[This Article Added on Dec. 31, 2005]
| Article 156-3 (Special cases concerning one house for one household in cases of owning house and pre-completion apartment ownership) |
| (1) | "Cases prescribed by Presidential Decree" in the proviso of Article 89(2) of the Act means the cases where one household holds a house and a pre-completion apartment ownership and then transfers the house, which fall under paragraphs (2) through (8). |
| (2) | Where one household owning one house in the Republic of Korea temporarily owns one house and one pre-completion apartment ownership by acquiring such ownership before transferring the relevant house (hereafter in this paragraph, referred to as "previous house") and the household acquires the pre-completion apartment ownership after more than one year elapses from the date of acquiring the previous house and then transfer the previous house within three years from the date of acquiring the pre-completion apartment ownership (including cases falling under the reasons prescribed by Decree of the Ministry of Finance and Economy, such as the failure to transfer it within three years), Article 154(1) shall apply as if the household owned one house. In such cases, cases falling under Article 154(1)1, 2a, and 3 shall not be subject to the requirement for acquiring pre-completion apartment ownership after more than one year has passed since the date the previous house was acquired. <Amended on Dec. 30, 2025> |
| (3) | Where one household owning one house in the Republic of Korea temporarily owns one house and one pre-completion apartment ownership by acquiring such ownership before transferring the relevant house (hereafter in this paragraph, referred to as "previous house") and the household acquires the pre-completion apartment ownership after more than one year elapses from the date of acquiring the previous house and then transfer the previous house within three years from the date of acquiring the pre-completion apartment ownership and it meets all the following requirements, Article 154(1) shall apply as if the household owned one house. In such cases, cases falling under Article 154(1)1, 2a, and 3 shall not be subject to the requirement for acquiring pre-completion apartment ownership after more than one year has passed since the date the previous house was acquired. <Amended on Feb. 15, 2022; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | All family members shall move into in the house (including where some family members are unable to live together due to schooling, workplace situation, medical care for a disease, or any other inevitable cause specified by Decree of the Ministry of Finance and Economy) within three years after the house acquired by exercising pre-completion apartment ownership and reside in it more than one year; |
| 2. | The previous house shall be transferred before the completion of the house acquired by exercising pre-completion apartment ownership or within three years after the completion. |
| (4) | Where one household owning the inherited pre-completion apartment ownership [in cases where the decedent does not own a house or hold a right to acquire a house as an association member at the time of commencing inheritance, limited to the inherited pre-completion apartment ownership; in cases where the decedent owns more than two pre-completion apartment ownership, limited to one pre-completion apartment ownership under the following order; in cases of co-inherited pre-completion apartment ownership, it shall be deemed that a person falling under paragraph (5)5 owns the co-inherited pre-completion apartment] and any other house (limited to the house held at the time of commencing inheritance or the newly-built house that is acquired after the completion of project implementation in accordance with the right to acquire a house as an association member or pre-completion apartment ownership held at the time of commencing inheritance and excluding the house donated from the decedent within two years retrospectively from the date of commencement of inheritance or a newly-built house acquired after the completion of project implementation by exercising a right to acquire a house as an association member or pre-completion apartment ownership; hereafter in this paragraph, referred to as "general house"), respectively in the Republic of Korea transfers the general house, Article 154(1) shall apply as if the household owned one house in the Republic of Korea; provided, where the heir and the decedent belong to one and the same household as at the time of commencement of inheritance and the household owns two houses as a consequence of combination of the household of a person who owns one house and also forms one household with the former household in order to support a lineal ascendant (including the spouse's lineal ascendant, but limited to where any or all of lineal ascendants are at least 60 years old and the person owns only one house), living together, only the pre-completion apartment ownership owned since before the combination shall be deemed the inherited pre-completion apartment ownership (hereafter in paragraph (5)4, the same shall apply): |
| 1. | One pre-completion apartment ownership for which the holding period by the decedent is the longest; |
| 2. | One pre-completion apartment ownership chosen by the heir, when there are at least two pre-completion apartment ownership for which the holding period by the decedent has been equal. |
| (5) | Where one household owning a house under subparagraph 1, a right to acquire a house as an association member under subparagraph 2, or pre-completion apartment ownership under subparagraph 4 and a house acquired by the reason other than inheritance (hereafter in this paragraph, referred to as "general house") and pre-completion apartment ownership acquired by the reason other than inheritance, respectively, in the Republic of Korea transfers the general house, paragraphs (2) and (3) shall apply as if the household owned the general house and pre-completion apartment ownership acquired by the reason other than inheritance in the Republic of Korea. In such cases, the general house subject to the application of paragraph (2) and (3) shall be limited to the house owned as at the time of commencement of inheritance (excluding a house donated by the decedent within two years retrospectively from the date of commencement of inheritance or a newly-built house acquired after the completion of project implementation by exercising a right to acquire a house as an association member or pre-completion apartment ownership): <Amended on Feb. 15, 2022> |
| 1. | The inherited house. In such cases, where the decedent owns more than two houses as at the time of commencement of inheritance, it shall be limited to one house in the order of the subparagraphs of Article 155(2); |
| 2. | The pre-completion apartment ownership inherited where the decedent does not own a house or pre-completion apartment ownership as at the time of commencement of inheritance. In such cases, where the decedent owns more than two rights to acquire a house as an association member as at the time of commencement of inheritance, it shall be limited to one right to acquire a house as an association member in the order under the subparagraphs of Article 156-2(6); |
| 3. | In cases of a co-inherited right to acquire a house as an association member, any person falling under the relevant items in the following order shall be deemed to own the co-inherited right to acquire a house as an association member: |
| a. | The heir with the largest share in inheritance; |
| b. | A person who reside in a house that the decedent has owned as of the date of approval (in cases where the house is demolished before the date of approval, referring to the date of demolition of the previous house) of management disposal plans of a redevelopment project, reconstruction project or small-scale reconstruction project, etc. of the relevant co-inherited right to acquire a house as an association member; |
| 4. | The pre-completion apartment ownership inherited where the decedent does not own the house or right to acquire a house as an association member as at the time of commencement of inheritance. In such cases, where the decedent owns more than two pre-completion apartment ownership as at the time of commencement of inheritance, it shall be limited to one right to acquire a house as an association member in the order under the subparagraphs of paragraph (4); |
| 5. | In cases of co-inherited pre-completion apartment ownership, any person falling under the following items in the order under the following items shall be deemed to own the co-inherited pre-completion apartment ownership: |
| a. | The heir with the largest share in inheritance; |
| (6) | Where a person who owns more than one house or one pre-completion apartment ownership unites the households in order to care for a person who owns more than one house or one pre-completion apartment ownership by living together, or where a person who owns more than one house or one pre-completion apartment ownership is married with a person who owns more than one house or one pre-completion apartment ownership, cases where one household becomes to own one house and one pre-completion apartment ownership, one house and two pre-completion apartment ownership, two houses and one pre-completion apartment ownership, or two houses and two pre-completion apartment ownership shall be governed by Article 156-2(8) or (9). |
| (7) | Where one household owning a house under Article 155(6)1 and any other house (hereafter in this paragraph, referred to as "general house") and pre-completion apartment ownership, respectively, in the Republic of Korea transfers the general house, paragraph (2) or (3) shall apply as if the household owned the general house and pre-completion apartment ownership, respectively, in the Republic of Korea. |
| (8) | Where one household owning, from among houses in an agricultural and fishing village under Article 155(7), one house for ceasing farming under subparagraph 2 of that paragraph and any other house (hereafter in this Article, referred to as "general house") and pre-completion apartment ownership, respectively, in the Republic of Korea transfers the general house, paragraph (2) or (3) shall apply as if the household owned the general house and pre-completion apartment ownership in the Republic of Korea. |
| (9) | A person intending to be subject to paragraphs (2) through (8) shall submit a written report on the application of special cases concerning one house for one household for the owner of pre-completion apartment ownership, which is prescribed by Decree of the Ministry of Finance and Economy, accompanying with the following documents within the deadline for the tax base report of capital gains tax under Article 105 or 110 of the Act, to the head of the competent tax office having jurisdiction over the place for tax payment: <Amended on Dec. 30, 2025> |
| 1. | A copy of the resident registration certificate (limited to where it is impossible to confirm based on the resident registration card); |
| 2. | A contract for supply of housing; |
| 3. | Other documents prescribed by Decree of the Ministry of Finance and Economy. |
| (10) | When one household subject to the application of paragraph (3) (including one household subject to the application of paragraph (3) pursuant to paragraph (5), (7) or (8)) fails to meet the requirements under paragraph (3)1, the household shall report and pay the amount of tax that would have been paid if the household had not been subject to the application of paragraph (3) as at the time of the transfer of the house, within two months from the last day of the month to which the date when the cause has occurred belongs. |
| (11) | Where the decedent owns only a right to acquire a house as an association member and pre-completion apartment ownership without owning a house, as at the time of commencement of inheritance, paragraph (4) or (5)2 or 4 may apply as if the heir was inherited either of the right to acquire a house as an association member or pre-completion apartment ownership by choice. In such cases, the requirement that the decedent shall not own the right to acquire a house as an association member or pre-completion apartment ownership as at the time of commencement of inheritance shall not apply thereto. |
| 1. | A certified copy of his or her resident registration card; |
| 2. | A certified copy of the land and building ledger of the house to be transferred; |
| 3. | A certified copy of the land and building ledger of rural housing (limited to cases subject to paragraph (8)). |
| (12) | Where a decedent does not own a house but owns only a right to buy a house as an association member or pre-completion apartment ownership as at the time of commencing inheritance, paragraphs (4) and (5)2 or 4 may apply as if an heir was inherited only either of the right to buy a house as an association member or pre-completion apartment ownership. In such cases, the requirement that the decedent shall not own the right to buy a house as an association member or pre-completion apartment ownership as at the time of commencing inheritance shall not apply thereto. |
[This Article Added on Feb. 17, 2021]
SECTION 3 Calculation of Amount of Capital Gains
| Article 157 (Scope of majority stockholders of listed corporations) |
| (1) | "A majority stockholder of any of the listed corporations prescribed by Presidential Decree" in Article 94(1)3a1) of the Act, means any of the following persons (hereafter in this Chapter and Article 225-2, referred to as "majority stockholder of a listed corporation"): <Amended on Feb. 28, 2025> |
| 1. | Where the ratio (hereafter in this Chapter, referred to as "ratio of stock holdings") of the sum of stocks, etc. held by one stockholder or one investor (excluding a corporation; hereafter referred to as "one stockholder" in this Chapter) holding stocks, etc. as at the end of the business year immediately preceding the business year to which the date of transfer of stocks belongs (in cases of a corporation incorporated in the business year to which the date when stocks, etc. are transferred belongs, referring to the date of incorporation of the relevant corporation; hereafter in this Article and Article 167-8, the same shall apply), to the sum of stocks, etc. held by the relevant corporation is at least 1/100, the one stockholder; provided, where the sum of ratios of stock holdings of the one stockholder as at the end of the business year immediately preceding business year to which the date of transfer of stocks, etc. belongs and a person in a special relation under Article 43(8)1 of the Enforcement Decree of the Corporate Tax Act (hereafter in this Article, referred to as the one stockholder, etc.") is the greatest among the one stockholder, etc. of the relevant corporation and where the sum of the ratio of stock holdings of the one stockholder as at the end of the business year immediately preceding the business year to which the date of transfer of stocks belongs and a person falling under the following relationship with the one stockholder as at the end of the business year immediately preceding the business year to which the date of transfer of stocks belongs (hereafter in this Chapter, referred to as "other related stockholders of a stock-listed corporation") is at least 1/100, it shall be referred to as the one stockholder and other related stockholders of a stock-listed corporation: |
| a. | A person falling under any subparagraph of Article 102(1) of the Enforcement Decree of the Framework Act on National Taxes; |
| b. | A person falling under Article 1-2(3)1 of the Enforcement Decree of the Framework Act on National Taxes; |
| 2. | Where the total market price of stocks, etc. of the relevant corporation, which are owned by one stockholder at the end of the business year immediately preceding the business year to which the date of transfer of stocks, etc. belongs, is at least 5 billion won, the one stockholder; provided, where the sum of ratios of stock holdings of the one stockholder as at the end of the business year immediately preceding business year to which the date of transfer of stocks, etc. belongs is the greatest among the one stockholder, etc. of the relevant corporation and where the total market price of stocks, etc., which are owned by one stockholder and other related stockholders of a stock-listed corporation as at the end of the business year immediately preceding the business year to which the date of transfer of stocks, etc. belongs is at least 5 billion won, it shall be referred to the one stockholder and other related stockholders of a stock-listed corporation. |
| (2) | Notwithstanding paragraph (1)1 and 2, where the ratio of stock holdings of one stockholder or the total market price of stocks, etc. of the relevant corporation owned by one stockholder at the end of the business year immediately preceding the business year to which the date of transfer of stocks, etc. belongs, meets any of the following criteria, the one stockholder shall be deemed a majority stockholder; provided, where the sum of ratios of stock holdings of the one stockholder as at the end of the business year immediately preceding business year to which the date of transfer of stocks, etc. belongs is the greatest among the one stockholder, etc. of the relevant corporation and where the total market price of stocks, etc., which are owned by one stockholder and other related stockholders of a stock-listed corporation as at the end of the business year immediately preceding the business year to which the date of transfer of stocks, etc. belongs falls under the following criteria, the one stockholder and other related stockholders of a stock-listed corporation shall deemed major stockholders: |
| 1. | In cases of stocks, etc. of a KOSDAQ-listed corporation (referring to a corporation that has issued stock certificates listed on the KOSDAQ market under Article 8 of the Addenda to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (Presidential Decree No. 24697) (hereinafter referred to as "KOSDAQ")): Where the ratio of stock holdings (referring to the sum of ratios of stock holdings in cases falling under the proviso, with the exception of the subparagraphs, of this paragraph) is at least 2/100 or the total market price is at least 5 billion won; |
| 2. | In cases of stocks, etc. of a KONEX-listed corporation (referring to a corporation that has issued stock certificates listed on the KONEX market under Article 11(2) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "KONEX")): Where the ratio of stock holdings (referring to the sum of ratios of stock holdings in cases falling under the proviso, with the exception of the subparagraphs, of this paragraph) is at least 4/100 or the total market price is at least 5 billion won. |
| (3) | "Majority stockholders of any of the unlisted corporations prescribed by Presidential Decree" in the proviso of Article 94(1)3b of the Act means one stockholder and other stockholders of unlisted corporation where the sum of ratios of stock holdings of one stockholder as at the end of the business year immediately preceding the business year to which the date of transfer of stocks, etc. belongs and a person in relation falling under the following classification (hereafter in this Chapter, referred to as "other stockholders of unlisted corporation") as of the end of the business immediately preceding the business year to which the date of transfer of stocks, etc. belongs or the total market prices of stocks, etc. of the relevant corporation held by one stockholder and the other stockholders of unlisted corporations falls under the criteria under paragraph (2)2, notwithstanding Article 167-8(1)2: |
| 1. | Where the sum of ratios of stock holdings held by one stockholder, etc. is the largest among one stockholder, etc. of the relevant corporation: A person falling under any item of paragraph (4)1; |
| 2. | Where the sum of ratios of stock holdings held by one stockholder, etc. is not the largest among one stockholder, etc. of the relevant corporate: Any of the following persons: |
| a. | Lineal ascendents or descendants; |
| b. | The spouse (including de facto marital relationship); |
| c. | A person falling under Article 1-2(3)1 of the Enforcement Decree of the Framework Act on National Taxes. |
| (4) | In calculating the total market price under paragraphs (1) through (3), the market price shall be as follows: |
| 1. | In case of the stocks, etc. of listed corporations, the final market price as of the end of the business year immediately preceding the business year in which stocks, etc. are transferred; provided, if the final market price as of the end of the immediately preceding business year is unavailable, the final market value on the immediately preceding trading day shall apply; |
| 2. | In case of stocks, etc. other than those prescribed by subparagraphs, the appraised amount under Article 165(4). |
| (5) | Where a stockholder of a merged corporation receives new stocks of the merging corporation upon a merger and transfers the stocks during the business year in which the merger is registered, the scope of majority stockholders for the purpose of applying paragraphs (1) through (4) shall be determined according to the status of stockholding as at the registration date of the merger of the merged corporation. |
| (6) | Where a stockholder of a divided corporation receives new stocks of the newly established corporation upon a merger and transfers the stocks during the business year in which the establishment is registered or transfers stocks of the divided corporation on or after the registration date of the division during the business year in which the division is registered, the scope of majority stockholders for the purpose of applying paragraphs (1) through (4) shall be determined according to the status of stockholding as at the registration date of the division of the corporation prior to the division. |
| (7) | Where a shareholder lends stocks, etc. on condition that the same quantity of stocks, etc. of the same class will be returned after a certain period, such stocks, etc. shall be deemed the lender's stocks, etc. during the period from the date of lending until the date of return for the purpose of applying paragraphs (1) through (4). |
| (8) | Where a resident acquires stocks, etc. of a corporation through a privately placed collective investment vehicle under the Financial Investment Services and Capital Markets Act, such stocks, etc. (limited to the portion calculated in proportion to the resident's investment ratio in the privately placed collective investment vehicle) shall be deemed owned by the resident for the purpose of applying paragraphs (1) through (4). |
| (9) | Notwithstanding paragraph (1)1, (2) and (3), where the ratio of, or the sum of ratios of, stock holdings fell short of the criteria under the relevant provisions as at the end of the business year immediately preceding the business year to which the date of transfer of stocks, etc. belongs, but meets such criteria by acquiring stocks, etc., one stockholder, other stockholders of a stock-listed corporation or other stockholders of a unlisted corporation shall be deemed the major stockholder of the stock-listed corporation or unlisted corporation under the relevant provisions. |
[This Article Added on Dec. 31, 2024]
| Article 157-2 (Scope of small and medium enterprises and middle-standing enterprises ) |
| (1) | "Small and medium enterprises prescribed by Presidential Decree" in the proviso to Article 94(1)3b of the Act means enterprises under Article 2 of the Framework Act on Small and Medium Enterprises. |
| (2) | "Middle-standing enterprises prescribed by Presidential Decree" in the proviso to Article 94(1)3b of the Act means enterprises falling under middle-standing enterprises under Article 6-4(1) of the Enforcement Decree of the Restriction of Special Taxation Act, as of the date of transfer of stocks, etc. |
| (3) | Notwithstanding Article 3-3(1) of the Enforcement Decree of the Framework Act on Small and Medium Enterprises, the determination of whether an entity constitutes a small and medium enterprise in applying paragraph (1) shall be based on the end date of the business year immediately preceding the business year in which the date of transfer of stocks, etc. belongs; provided, in the case of a corporation newly incorporated in the business year to which the date of transfer of stocks, etc. belongs, it shall be based on the date of transfer of stocks, etc. |
[This Article Added on Dec. 31, 2024]
| Article 157-3 (Scope of Overseas Shares) |
"Things prescribed by Presidential Decree" in Article 94(1)3c of the Act means stocks, etc. falling under any of the following subparagraphs:
| 1. | Stocks, etc. issued by a foreign corporation (stocks, etc. listed in a securities market and stocks falling under Article 178-2(4)); |
| 2. | Stocks, etc. issued by a domestic corporation (including depository securities under Article 152-2 issued by a foreign depository institution) issued by a domestic corporation and listed on the overseas securities market under subparagraph 1 of Article 2 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act. |
[This Article Added on Dec. 31, 2024]
| Article 158 (Scope of oligopolistic stockholders) |
| (1) | "The stockholder prescribed by Presidential Decree, taking into consideration the ratio of stocks, etc. held by the stockholder" in the main sentence of Article 94(1)4c of the Act, means a specific stockholder and other stockholders of a stock-listed corporation or unlisted corporation (hereinafter referred to as "oligopolistic stockholder"), where the sum of stocks, etc. held by the specific stockholder and such other stockholders of a stock-listed corporation or unlisted-corporation is at least 50/100 of the sum of stocks, etc. of the corporation. <Amended on Feb. 3, 2017; Dec. 31, 2022> |
| (2) | Article 94(1)4c of the Act shall also apply where oligopolistic stockholders transfer stocks, etc. over several times, and transfer at least 50/100 of the relevant corporation as a result of aggregating the number of stocks, etc. transferred by such oligopolistic stockholders within three years retrospectively from the date any one of those oligopolistic stockholders transfers the stocks, etc. In such cases, judgment on whether the relevant case falls under Article 94(1)4c shall be based on the sum of stocks, etc. or the total assets of the relevant corporation as at the date of the initial transfer during the period in which the number of the stocks, etc. shall be aggregated retrospectively from the date any of them transfers the stocks, etc. <Amended on Feb. 21, 2014; Feb. 3, 2017; Feb. 12, 2019> |
| (3) | "Cases prescribed by Presidential Decree" in the main sentence of Article 94(1)4c of the Act means the cases where the stocks, etc. of the relevant corporation are transferred among oligopolistic stockholders of the relevant corporation within three years retrospectively from the date on which an oligopolistic stockholder transfers at least 50/100 of the stocks, etc. of the relevant corporation out of the stocks, etc. transferred to a person other than oligopolistic stockholders (in cases where the stocks, etc. are transferred several times, referring to the date on which the stocks, etc. transferred account for at least 50/100 of the total stocks, etc.). In such cases, paragraph (2) shall apply mutatis mutandis. <Added on Feb. 12, 2019> |
| (4) | The amount of total assets under Article 94(1)4c and d of the Act and paragraphs (1) and (2) of this Article shall be determined with the book value of the relevant corporation (where the standard market value of the relevant asset, as prescribed by Article 94(1)1 of the Income Tax Act, is greater the book value thereof, its standard market value). In such cases, the following amounts shall not be included in the amount of total assets: <Amended on Dec. 31, 1996; Dec. 31, 1998; Dec. 31, 2001; Feb. 19, 2005; Dec. 30, 2010; Feb. 3, 2017; Feb. 12, 2019; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | Amount of intangible assets under Article 24(1)2f and g of the Enforcement Decree of the Corporate Tax Act; |
| 2. | Aggregate amount of cash, loans and financial assets prescribed by Decree of the Ministry of Finance and Economy which have been increased by the borrowings or an increase in capital stock during the period from the date which becomes retrospectively just one year from the transfer date, to the date of such transfer. |
| (5) | Notwithstanding the former part of paragraph (4), the amounts that remain in the provisional payment account, etc. under Article 28(1)4b of the Corporate Tax Act and in the suspense receipt account for one and the same person shall be offset in calculating the amount of total assets; provided, if agreements were made with regard to the period of repayment, interest rate, etc. whenever a provisional payment was paid to, or a suspense receipt was received from, one and the same person, such amounts shall not be offset. <Added on Feb. 17, 2016; Feb. 12, 2019> |
| (6) | Other corporation specified in the former part of Article 94(1)4c2) of the Act means any of the following corporations: <Added on Feb. 3, 2017; Feb. 12, 2019> |
| 1. | A corporation whose assets specified in Article 94(1)1 and 2 of the Act (hereafter in this Article, referred to as "real estate, etc.") occupy at least 50/100 of assets; |
| 2. | A corporation who engages in any of the businesses referred to in paragraph (8) and whose real estate, etc., as calculated according to paragraph (7), occupies at least 80/100 of assets. |
| (7) | The holding ratio of real estate, etc. of another corporation under the former part of Article 94(1)4c2) of the Act shall be the holding ratio of real estate, etc. calculated according to the following formula: <Added on Feb. 3. 2017; Feb. 12, 2019; Feb. 11, 2020> |
┌────────────────────────────────┐
│ Ratio of real estate, etc. owned by the other corporation = (A + B + C) / D │
│ │
│ │
│ │
│ A: The value of assets under Article 94(1)1 of the Act, │
│ amount × 0.55 │
│ │
│ B: The value of assets under Article 94(1)2 of the Act, │
│ amount × 0.55 │
│ │
│ C: The value calculated by multiplying the value of stocks issued by a corporation in a management control relationship │
│ under Article 1-2(3)2 and (4) of the Enforcement Decree of the Framework Act on National Taxes, │
│ which is owned by the other corporation by the ratio of real estate, etc. │
│ owned by the corporation in a management control relationship │
│ │
│ D: The amount of total assets of the other corporation │
└────────────────────────────────┘
| (8) | "Business prescribed by Presidential Decree" in Article 94(1)4d of the Act, means sports facility business, such as golf course business and ski resort business under the Installation and Utilization of Sports Facilities Act, or business related to recreation facilities, among tourism businesses under the Tourism Promotion Act, or any of the businesses specified by Decree of the Ministry of Finance and Economy, among real estate business and real estate development business. <Added on Feb. 3, 2017; Feb. 12, 2019; Dec. 30, 2025> |
[This Article Wholly Amended on Feb. 3, 2017]
| Article 158-2 (Scope of relocation rights excluding from capital gains) |
"Separately assessed and reported in accordance with the method prescribed by Presidential Decree" in the proviso of Article 94(1)4e of the Act means cases where the value (where more than two values are assessed, the average of the values assessed) assessed by an appraisal corporation, etc. under the Act on Appraisal and Certified Appraisers, if any, is reported separately. <Amended on Jan. 21, 2022>
[This Article Added on Feb. 11, 2020]
| Article 159 (Calculation of gains on transfer of gift of encumberedproperty) |
| (1) | In calculating gains on the transfer of the portion deemed a transfer, in cases of a gift of encumbered property under the latter part of subparagraph 1 of Article 88 of the Act, its acquisition value and transfer value shall be as follows: <Amended on Feb. 3, 2015; Feb. 3, 2017; Feb. 11, 2020; Feb. 28, 2023> |
| 1. | Acquisition value: The amount classified as follows: |
┌────────────────────────────────┐
│ Acquisition value = A x (B / C) │
│ │
│ by a virtual asset service provider, etc. under Article 156(1)8b of the Act │
│ │
│ A: The value under Article 97(1)1 (if the transfer value under subparagraph 2 │
│ is based on the standard market price in accordance with Article 61(1) and (2) of the Inheritance Tax and Gift Tax Act, │
│ is based on the standard market price in accordance with Article 61(1) and (2) of the Inheritance Tax and Gift Tax Act, │
│ B: Amount of debts │
│ C: Value of gift │
└────────────────────────────────┘
| 2. | Transfer value: The amount calculated by the following formula: |
┌─────────────────────────────┐
│ Transfer value = A x (B / C) │
│ │
│ by a virtual asset service provider, etc. under Article 156(1)8b of the Act │
│ │
│ A: The value appraised according to Articles 60 through 66 │
│ of the Inheritance Tax and Gift Tax Act │
│ B: Amount of debts │
│ C: Value of gift │
└─────────────────────────────┘
| (2) | When applying paragraph (1) to cases where a person donates assets subject to capital gains tax, along with assets not subject to capital gains, with encumbrances thereon and the donee assumes the donor's debts, the amount of such debts shall be calculated by the following formula: <Amended on Feb. 3, 2017> |
┌────────────────┐
│ Amount of debts = A x (B / C) │
│ │
│ by a virtual asset service provider, etc. under Article 156(1)8b of the Act │
│ │
│ A: Amount of debts │
│ B: Value of assets subject to capital gains tax │
│ C: Total value of donated assets │
└────────────────┘
[This Article Wholly Amended on Feb. 18, 2010]
| Article 159-2 (Scope of derivatives, etc.) |
| (1) | "Financial investment instruments prescribed by Presidential Decree, such as derivatives and derivative-linked securities" in Article 94(1)5 of the Act means derivative-linked securities, exchange-traded derivatives under Article 5(2)1 through 3 of the Financial Investment Services and Capital Markets Act, or over-the-counter derivatives under Article 5(3) of that Act, which fall under any of the following subparagraphs (hereafter referred to as "derivatives, etc."): <Amended on Feb. 28, 2025> |
| 1. | Exchange-traded derivatives under Article 5(2)1 of the Financial Investment Services and Capital Markets Act the underlying asset of which is an index (including any indexes calculated based on the fluctuations of such index) calculated with representative issues in a market located in a foreign country which is a stock marker or similar ; |
| 2. | Derivatives under Article 5(3) of the Financial Investment Services and Capital Markets Act, which meet each of the following requirements (including derivatives with the same economic substance as those): |
| a. | They shall be instruments within which the differences between the agreed price as at the time the contract is entered into and the agreed price of countertrade that extinguishes the agreement under the contract are settled in cash and whose contract is terminated with the expression of willingness of one party without determining the time of termination of the contract; |
| b. | It shall be an instrument linked to the price of any of the following underlying assets: |
1) Stocks, etc. (including stocks issued by a foreign corporation);
2) Collective investment securities of a collective investment scheme, the purpose of which is to track an index (including an index calculated based on the volatility of the relevant index) calculated based on stocks representing the securities market or a foreign market similar thereto, which is an exchange-traded fund under Article 26-2(5)2 (including foreign exchange-traded funds similar thereto);
3) Exchange-traded securities (including foreign exchange-traded securities similar thereto) the purpose of which is to track an index (including an index calculated based on the volatility of the relevant index) calculated based on stocks representing a securities market or a market similar thereto located in a foreign country;
| 3. | Securities or certificates representing a right to form a transaction of selling and buying stocks or giving and receiving money by a prescribed method in connection with changes in the index under subparagraph 1 by manifesting either party's intention unilaterally; |
| 4. | Derivatives traded in an overseas derivatives marker under Article 5(2)2 of the Financial Investment Services and Capital Markets Act; |
| 5. | Over-the-counter derivatives under Article 5(3) of the Financial Investment Services and Capital Markets Act the economic substance of which is the same as that of exchange-traded derivatives under subparagraph 1. |
| (2) | Where the Korea Exchange that are deemed to have been granted the permission on the exchange pursuant to Article 15(1) of the Addenda of the Financial Investment Services and Capital Markets Act, which is partially amended by Act No. 11846, requests the Financial Services Commission to approve the amendment to the Derivatives Market Business Regulations under Article 412 of the Financial Investment Services and Capital Markets Act to open an exchange-traded derivatives market, it shall submit the details of the types, items, and underlying assets of the derivatives to the Minister of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Added on Dec. 31, 2024]
| Article 159-3 (Beneficial rights excluding from taxation on capital gains tax) |
"Benefits prescribed by Presidential Decree, such as beneficiary interests in investment trusts" in the main clause of Article 94(1)6 of the Act means the following beneficiary interests or beneficiary certificates:
| 1. | Beneficiary interests or beneficiary certificates under the Financial Investment Services and Capital Markets Act; |
| 2. | Beneficiary interests of investment trusts under Article 189 of the Financial Investment Services and Capital Markets Act or beneficiary certificates where the income generated from the transfer of the relevant beneficiary rights or beneficiary certificates is taxable as dividend income under Article 17(1) of the Act; |
| 3. | Beneficiary interests or beneficiary certificates where the income generated from the transfer of rights to receive the benefits of the trust is taxable as dividend income under Article 17(1) of the Act; |
| 4. | Where the creditor of a trustor participates as a senior beneficiary within the scope of the principal and interests of bonds, the relevant beneficiary interests. In such cases, the statement of changes in the list of beneficiaries under Article 115-2 of the Act shall be submitted. |
[This Article Added on Feb. 17, 2021]
[Previous Article 159-3 moved to Article 159-4 <Feb. 17, 2021>]
| Article 159-4 (Special deduction for long-term possession) |
"One house for one household prescribed by Presidential Decree" in the proviso to the part other than the table of Article 95(2) of the Act and in the part other than the subparagraphs of Article 95(5) of the Act means one house owned by one household in Korea as of the transfer date (or, where a sales contract for the house is concluded and the house is transferred after being converted to a use other than housing pursuant to that contract, referring to the date of the sales contract for the relevant house), including a house deemed one house for one household under Articles 155, 155-2, 156-2, 156-3 and other provisions, for which the period of residence during the holding period is at least two years. In such cases, where the relevant one house is a co-inherited house under the main clause of the part other than the subparagraphs of Article 155(3), the period of residence shall be determined based on the period for which the co-heir who resided in that house for the longest period has resided therein. <Amended on Feb. 22, 2008; Oct. 23, 2018; Feb. 17, 2021; Feb. 29, 2024; Feb. 28, 2025>
[This Article Wholly Amended on Dec. 31, 2005]
[Title Amended on Feb. 22, 2008]
[Moved from Article 159-3 <Feb. 17, 2021>]
| Article 160 (Calculation of gains on transfer of high-priced houses) |
| (1) | The gains from the transfer of an asset corresponding to a high-priced house (in cases where one building is a combination of a house and a part that is not a house and where any building other than a house exists on the land appurtenant to the house, the part that is not a house shall not be deemed a house) and the special long-term holding deduction amount under Article 95(3) of the Act, shall be the amount which is calculated by the formulae under the following subparagraphs. In such cases, if the period of possession of the relevant house or its appurtenant land is different each other or it corresponds to the unregistered assets transferred or it is transferred partly, it shall be proportionally calculated by multiplying 1.2 million won by the rate occupied by the transfer value of the relevant house or its appurtenant land in the aggregate of transfer value of such house and its appurtenant land: <Amended on Sep. 18, 1999; Dec. 30, 2002; Feb. 22, 2008; Feb. 4, 2009; Feb. 11, 2020; Feb. 15, 2022> |
| 1. | Gains on transfer applicable to the asset corresponding to a high-priced house |
┌────────────────────────┐
│ Gains on transfer under Article 95(1) of the Act × │
│ (Transfer value -1.2 billion won) │
│ / Transfer value │
│ │
└───────────────────────────┘
| 2. | Amount of the special long-term holding deduction amount applicable to the asset corresponding to a high-priced house |
┌────────────────────────────┐
│ Amount of the special long-term holding deduction amount │
│ under Article 95(2) of the Act × (Transfer value - 1.2 billion won) │
│ / Transfer value │
│ │
└────────────────────────────┘
| (2) | The provisions of Article 100(2) of the Act shall apply mutatis mutandis to the proportional calculation of the transfer value under the latter part of paragraph (1). |
[Title Amended on Dec. 30, 2002]
| Article 161 (Calculation of amount of capital gains on house having Immediately preceding residential house) |
| (1) | The amount of capital gains from one house for one household under Article 154(10) and a house having an immediately preceding residential house under the latter part of Article 155(20) (hereafter in this Article, referred to as "house having an immediately preceding residential house, etc.") shall be calculated according to the following formula: <Amended on Feb. 3, 2017> |
┌─────────────────────────────────────┐
│ The amount of capital gains under Article 95(1) of the Act × │
│ × (The standard market price of the house having an immediately preceding residential house, etc. │
│ at the time of transfer of the immediately preceding residential house - The standard market price as at the time of acquisition │
│ of the house having an immediately preceding residential house, etc.) / (The standard market price │
│ as at the time of transfer of the house having an immediately preceding residential house, etc. │
│ - The standard market price as at the time of acquisition of the house │
│ having an immediately preceding residential house, etc.) │
└─────────────────────────────────────┘
| (2) | Notwithstanding paragraph (1), if a house having an immediately preceding residential house, etc. is a high-priced house under the provisions, with the exception of the items, of Article 89(1)3 of the Act, the amount of capital gains on the relevant house having an immediately preceding residential house, etc. shall be the sum of the amounts calculated according to the following formula: <Amended on Feb. 15, 2013; Feb. 15, 2022> |
| 1. | Amount of capital gains for the period of ownership before the date of transferring the immediately preceding residential house |
┌────────────────────────────────────┐
│ The amount of capital gains under Article 95(1) of the Act × (The standard │
│ market price of the house having an immediately preceding residential house, etc. │
│ at the time of transfer of the immediately preceding residential house - │
│ The standard market price as at the time of acquisition of the house having │
│ an immediately preceding residential house, etc.) / (The standard market price │
│ as at the time of transfer of the house having an immediately preceding │
│ residential house, etc. - The standard market price as at the time of │
│ acquisition of the house having an immediately preceding residential house, etc.) │
└────────────────────────────────────┘
| 2. | Amount of capital gains for the period of ownership after the date of transferring the immediately preceding residential house |
┌──────────────────────────────────────┐
│ The amount of capital gains under Article 95(1) of the Act × (The standard │
│ market price of the house having an immediately preceding residential house, etc. │
│ at the time of transfer of the immediately preceding residential house │
│ - The standard market price as at the time of acquisition of the house having │
│ an immediately preceding residential house, etc.) / (The standard market price │
│ as at the time of transfer of the house having an immediately preceding │
│ residential house, etc. - The standard market price as at the time of │
│ acquisition of the house having an immediately preceding residential house, etc.) │
│ × (Amount of transfer - 1.2 billion won / Amount of transfer) │
└──────────────────────────────────────┘
| (3) | Where the amount of capital gains on a house having an immediately preceding residential house, etc. calculated according to paragraphs (1) and (2) exceeds the amount of capital gains under Article 95(1) of the Act, such excess shall be deemed non-existent, respectively. <Amended on Feb. 15, 2013> |
| (4) | Upon calculating the amount of capital gains pursuant to paragraphs (1) and (2)1, the special long-term holding deduction amount shall be subject to the application of Table 1 of Article 95(2) of the Act; and upon calculating the amount of capital gains pursuant to paragraph (2)2, the special long-term holding deduction amount shall be subject to the application of Table 2 of Article 95(2) of the Act. <Added on Feb. 15, 2013> |
[This Article Added on Oct. 14, 2011]
| Article 161-2 (Calculation of gains on derivatives, etc.) |
| (1) | Gains on derivatives which are those under Article 159-2(1)1 and fall under Article 5(1)1 of the Financial Investment Services and Capital Markets Act shall be calculated by aggregating the amounts obtained by deducting expenses specified by Decree of the Ministry of Finance and Economy, which are expenses directly paid for contracts, from profits calculated by the method prescribed by Decree of the Ministry of Finance and Economy, taking into consideration the agreed prices, finally settled prices, trading leverage, etc. at the time of making each contract with respect to contracts terminated due to offsetting of open interest for sale of the same issues in each account against open interest for purchase of the same issues in the account (hereafter in this Article, referred to as "offsetting through countertrade") or the closing of the final trading day. <Amended on Dec. 30, 2025> |
| (2) | Gains on derivatives which are those under Article 159-2(1)1 which fall under Article 5(1)2 of the Financial Investment Services and Capital Markets Act shall be calculated by aggregating the amounts obtained by deducting expenses specified by Decree of the Ministry of Finance and Economy, which are expenses directly paid for contracts, from profits calculated by the method prescribed by Decree of the Ministry of Finance and Economy, taking into consideration the agreed prices, reference prices for settlement of exercise of rights, exercising prices, trading leverage, etc. at the time of making each contract with respect to contracts terminated due to offsetting through countertrade, the exercise of a right, the closing of the final trading day, or any similar event. <Amended on Dec. 30, 2025> |
| (3) | Profits on the transfer of derivatives falling under Article 159-2(1)2 shall be the aggregate of the amounts calculated by the method prescribed by Decree of the Ministry of Finance and Economy in consideration of the difference between the contract price of each account and the contract price of the counter-transaction at the time of concluding a contract for the same issue and the income, expenses, etc. incurred for the contract. <Added on Dec. 30, 2025> |
| (4) | Gains on derivatives-combined securities referred to in Article 159-2(1)3 shall be calculated by aggregating the amounts obtained by deducting expenses specified by Decree of the Ministry of Finance and Economy, which are expenses directly paid for agreements, from profits calculated by the method prescribed by Decree of the Ministry of Finance and Economy, taking into consideration the prices of securities, reference prices for settlement of exercise of rights, exercising prices, the ratio of conversion, etc. at the time of purchase with respect to securities transferred or terminated due to repurchase, the exercise of a right, the closing of the final trading day, or any similar event. <Amended on Dec. 30, 2025> |
| (5) | For the purpose of calculating gains by applying paragraphs (1) through (4), it shall be deemed that transactions made earlier than others have been terminated successively. |
| (6) | Paragraphs (1) and (2) shall apply mutatis mutandis respectively to the calculation of gains on derivatives under Article 159-2(1)4 and 5, depending upon the type, issue, etc. of derivatives. |
[This Article Added on Dec. 31, 2024]
| Article 161-3 (Calculation of actual transaction value of assets transferred at high price to person other than specially related corporation) |
"Amount prescribed by Presidential Decree" in Article 96(3)2b of the Act means the following amounts:
| 1. | The amount treated as dividends of the relevant resident pursuant to Article 106(1)1a of the Enforcement Decree of the Corporate Tax Act; |
| 2. | The amount treated as other income of the relevant resident pursuant to Article 106(1)1d of the Enforcement Decree of the Corporate Tax Act. |
[This Article Added on Feb. 27, 2026]
| Article 162 (Time of transfer or acquisition) |
| (1) | "Cases prescribed by Presidential Decree, such as cases where the date of liquidation is unclear" in the former part of Article 98 of the Act, means the following cases: <Amended on Apr. 1, 1998; Dec. 31, 1998; Dec. 31, 1999; Dec. 31, 2001; Feb. 19, 2005; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2010; Feb. 21, 2014; Feb. 3, 2015; Dec. 31, 2022; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Where the date the purchase price is fully paid is indistinct, the acceptance date of registration or register, or the date of entering a change of ownership, which are entered on the registry, registration book, or roll, etc.; |
| 2. | Where the registration for passage of title prior to the full payment of purchase price (including the registration and the entry of a change of ownership) is made, the acceptance date of registration entered on the registry, register, or roll; |
| 3. | Where falling under the conditions of long-term installment determined by Decree of the Ministry of Finance and Economy, the earliest date from among the acceptance date of registration for passage of title (including a registration and an entry of a change of holders), the transfer date or the date of using and taking profits; |
| 4. | In cases of a building built by the owner him or herself, the date of issuance of a letter of approval for use under Article 22(2) of the Building Act; provided, if a building has been actually used before the date of issuance of a letter of approval for use or if approval for temporary use was granted under Article 22(3)2 of the aforesaid Act, the date such actual use began or the date such approval for temporary use was granted, whichever is earlier, shall be deemed the date of transfer or acquisition, or the date such actual use began shall be deemed the date of transfer or acquisition in cases of a building built without a building permit; |
| 5. | With respect to assets acquired by inheritance or donation, it shall be the date such inheritance commences or the donation is received; |
| 6. | Where acquiring the ownership of real estate under Article 245(1) of the Civil Act, the date an occupation of the relevant real estate commences; |
| 7. | Where assets are expropriated for public works under the Act on Acquisition of and Compensation for Land for Public Works Projects or other Acts, the earliest date among the date of settlement of accounts, the commencement date of expropriation, or the date of receipt of registration of transfer of ownership; provided, it shall be the date the judgment on a lawsuit regarding ownership becomes final and conclusive, if the compensation money for the lawsuit regarding ownership has been deposited in the court; |
| 8. | Where assets are transferred or acquired, which are yet completed or finalized, and the subject matter is not completed or finalized by the time of settlement of accounts for the assets, the date such subject matter is completed or finalized. In such cases, subparagraph 4 shall apply mutatis mutandis to the date of completion of buildings under construction; |
| 9. | The date of acquisition of land acquired in the course of disposing of substitute lot under the Urban Development Act or other Acts, shall be the date of acquisition of land prior to land substitution; provided, if the area of land expropriated increases or reduces compared to the area of entitled area in the course of land substitution, the timing for acquisition or transfer for such area increased or reduced shall be the date following the date public announcement is made for land substitution; |
| 9-2. | Where the area recorded in the cadastral records increases due to the determination of boundaries pursuant to Article 18 of the Special Act on Cadastral Resurvey, the time of acquisition for such increased area shall be the date on which the former land in the cadastral records was acquired; |
| 10. | In cases falling under Article 158(2), the date at least 50/100 of the aggregate value of stocks, etc. of the relevant corporation is transferred in the course of transferring stock, etc. by one shareholder and other shareholders of a stock-listed corporation or unlisted corporation. In such cases, the value of transfer shall be based on the value of transfer as at the date they actually transfer stocks, etc. |
| (2) | Deleted. <Dec. 30, 2010> |
| (3) | Deleted. <Dec. 30, 2010> |
| (4) | Deleted. <Dec. 30, 2010> |
| (5) | In applying Article 98 of the Act and paragraph (1) of this Article, if the acquiring time of transferred asset is obscure, the asset first acquired shall be deemed first transferred. <Amended on Dec. 30, 2010> |
| (6) | "Assets prescribed by Presidential Decree" in Article 8 of the Addenda to the Income Tax Act (Act No. 4803), means the following assets: <Amended on Dec. 30, 1995; Dec. 31, 1998; Dec. 29, 2000; Feb. 19, 2005; Dec. 31, 2024> |
| 1. | Assets falling under Article 94(1)2 and 4 of the Act, which have been acquired before December 31, 1984; |
| 2. | Deleted; <Dec. 30, 1995> |
| 3. | Assets under Article 94(1)3 of the Act, acquired before December 31, 1985. |
| (7) | "Date prescribed by Presidential Decree" in Article 8 of the Addenda to the Income Tax Act (Act No. 4803), means the following dates: <Amended on Dec. 30, 1995; Dec. 31, 1998; Dec. 29, 2000; Feb. 19, 2005; Dec. 31, 2024> |
| 1. | In cases of assets falling under Article 94(1)2 and 4 of the Act: January 1, 1985; |
| 2. | Deleted; <Dec. 30, 1995> |
| 3. | In cases of assets falling under Article 94(1)3 of the Act: January 1, 1986. |
| (8) | Article 98 of the Act and paragraph (1) of this Article shall apply mutatis mutandis to the time of receipt of gains on transfer under Article 92(2)1 of the Act. <Amended on Dec. 30, 2010; Feb. 29, 2024> |
| Article 162-2 (Value of transfer of rights to develop and use underground water) |
Where a right created by a license for extracting soil, sand, and stone and a right to develop and use underground water (hereafter in this Article, referred to as "right to develop and use underground water, etc.") are transferred along with land or a building referred to in Article 94(1)1 of the Act (hereafter in this Article, referred to as "land, etc."), but it is impracticable to separate the acquisition value or transfer value of the right to develop and use underground water, etc. from that of the land, etc., the guidelines prescribed under Article 51(8) shall apply mutatis mutandis to the calculation of the acquisition value or transfer value. In such cases, "forest trees" shall be construed as "right to develop and use underground water, etc.," and "forest land" as "land, etc."
[This Article Wholly Amended on Feb. 3, 2017]
| Articles 162-3 Deleted. <Dec. 31, 2005> |
| Articles 162-4 Deleted. <Dec. 31, 2005> |
| Articles 162-5 Deleted. <Dec. 31, 2005> |
| Article 163 (Necessary expenses for transferred assets) |
| (1) | The actual trading value for acquiring assets under Article 97(1)1a of the Act, means the sum of the following amounts: <Amended on Dec. 31, 1996; Dec. 31, 2005; Feb. 18, 2010; Feb. 2, 2012; Feb. 3, 2015; Feb. 3, 2017; Feb. 13, 2018; Feb. 11, 2020; Feb. 27, 2026> |
| 1. | The value equivalent to the acquisition cost computed by applying Article 89(1) and (3) mutatis mutandis (including the discounted debt estimated by the present value under Article 89(2)1 and the value-added tax paid or payable under Article 10(1) and (6) of the Value-Added Tax Act, but excluding the amount exceeding the market price calculated by misconduct); |
| 2. | The amount, such as the cost of a lawsuit and the expenses for reconciliation, which have been directly required for securing the relevant ownership, etc. with respect to the asset under controversy as to its acquisition, from which those included in necessary expenses are excluded, in calculating each amount of income in the year wherein such cost and expenses are paid; |
| 3. | In applying subparagraph 1, if the transaction price is fixed by adding the amount equivalent to the interest to the acquisition cost according to the means of paying the purchase price under the party contract, the relevant amount equivalent to the interest shall be included in the acquisition cost; provided, such amount equivalent to the interest as additionally incurred due to a deferment of payment term for the transaction price under the original agreement shall not be included in the acquisition cost; |
| 4. | In applying subparagraph 1, the value corresponding to the cost of acquisition per a stock as to the stocks received by a shareholder of the corporation dissolved after merge from the surviving or newly established corporation due to a merge (hereafter referred to as "merging corporation" in this subparagraph), shall be the amount of value obtained by dividing the total amount required for the said shareholder to acquire stocks of the merged corporation owned by him or her as at the time of the merge (referring to the amount obtained by adding the amount under Article 16(1)5 of the Corporate Tax Act, and subtracting the total amount of value for other properties, such as money among the consideration of merge under Article 16(1)5 of the said Act) by the number of stocks received due to the merge; |
| 5. | In applying subparagraph 1, the value corresponding to the cost of acquisition per a stock as to the stocks acquired by a stockholder of a corporation established through division or the disappearing counterpart corporation to division and merger from the newly incorporated corporation by division or the disappearing counterpart corporation to a division shall be the amount of value obtained by dividing the total amount required for the acquisition of the stocks of the corporation established through division or the disappearing counterpart corporation to division and merger held by the relevant stockholder as at the time of division or division and merger (referring to the amount obtained by adding the amount under Article 16(1)6 of the Corporate Tax Act; and subtracting the total amount of value for other properties, such as money among the consideration of division under Article 16(1)6 of that Act) by the number of stocks acquired due to the division. |
| (2) | Where the debt discounted by the present value under Article 89(2)1 pursuant to paragraph (1)1 is included in the acquisition cost, if the present value discount is included in necessary expenses or any amount is to be included therein in calculating business income for each year during the holding period of transferred assets, the present value discount shall be deducted from the amount referred to in paragraph (1). <Amended on Feb. 18, 2010> |
| (3) | "Capital expenditure, etc. prescribed by Presidential Decree" in Article 97(1)2 of the Act, means expenditure, etc. in any of the following cases where documents evidencing such expenditure under Article 160-2(2) of the Act have been collected and preserved where or the fact of actual expenditure is confirmed by documents evidencing financial transactions: <Amended on Dec. 29, 2000; Sep. 22, 2006; Feb. 29, 2008; Feb. 18, 2010; Feb. 3, 2015; Feb. 17, 2016; Feb. 13, 2018; Feb. 11, 2020; Dec. 30, 2025> |
| 1. | Capital expenditure computed by applying mutatis mutandis Article 67(2); |
| 2. | The amount, such as the cost of a lawsuit and the expenses for reconciliation, which have been directly required for securing the relevant ownership when the transferred asset is under controversy after its acquisition, from which those included in necessary expenses are excluded, in calculating each amount of income in the year wherein such cost and expenses are paid; |
| 2-2. | Expenses incurred directly in litigation or compromise with respect to an increase of the compensation money, where land, etc. are purchased through negotiations or expropriated under the Act on Acquisition of and Compensation for Land for Public Works Projects or any other Act, excluding those included in necessary expenses in calculating income for the year in which such expenses are expended. In such cases, the expenses shall be limited to the increased compensation money; |
| 3. | Expenses paid for the change of intended usage, improvement, or convenience in use of the transferred asset (in cases where the building is reconstructed due to extenuating circumstances, such as disaster, deterioration, etc.); |
| 3-2. | Development shares (where the person obligated to pay the development share and the transferrer are different, referring to the amount equivalent to the development share to be actually distributed to the transferrer) pursuant to the Restitution of Development Gains Act; |
| 3-3. | Reconstruction shares (where the person obligated to pay the reconstruction share and the transferrer are different, referring to the amount equivalent to the reconstruction share to be actually distributed to the transferrer) pursuant to the Restitution of Excess Rebuilding Gains Act; |
| 4. | Other expenses determined by Decree of the Ministry of Finance and Economy, equivalent to subparagraphs 1 through 3, 3-2, and 3-3. |
| (4) | Deleted. <Dec. 29, 2000> |
| (5) | "Transfer expenses, etc. prescribed by Presidential Decree" in Article 97(1)3 of the Act, means any of the following cases where documents evidencing such expenditure under Article 160-2(2) of the Act are collected and preserved or the fact of actual expenditure is confirmed by documents evidencing financial transactions: <Amended on Apr. 1, 1998; Dec. 29, 2000; Feb. 19, 2005; Feb. 28, 2007; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Feb. 13, 2018; Dec. 30, 2025> |
| 1. | The following expenses directly paid for transferring assets specified under Article 94(1) of the Act; |
| a. | Securities transaction taxes paid pursuant to the Securities Transaction Tax Act; |
| b. | Expenses for preparing a report of tax base on capital gains tax and for preparing a contract; |
| c. | Notarial fees, stamp charges, and brokerage; |
| d. | Delivery expenses paid by the transferor to perform an obligation to delivery under a contact of sale; |
| e. | Expenses prescribed by Decree of the Ministry of Finance and Economy, similar to those referred to in items a through c; |
| 2. | Marginal loss incurred by selling national housing bonds and land development bonds purchased under statutes, etc. in acquiring the asset specified in Article 94(1)1 of the Act, before their maturity. In such cases, the marginal loss shall, where such bonds are transferred to any person other than a financial institution specified by Decree of the Ministry of Finance and Economy (hereafter referred to as "financial institution" in this subparagraph), be limited to the marginal loss that would be incurred if they were sold to the financial institution on the same day. |
| (6) | "Amount prescribed by Presidential Decree" in the main sentence of Article 97(2)2 of the Act, means each of the following amounts: <Amended on Dec. 31, 1997; Dec. 31, 1999; Dec. 29, 2000; Aug. 5, 2005; Feb. 4, 2009; Feb. 2, 2012> |
Publicly announced individual land prices at the time of its acquisition specified in Article 99(1)1a of the Act × 3/100 (or 3/1,000 in cases of unregistered transferred assets specified in Article 104(3) of the Act);
| a. | Building specified in Article 99(1)1c of the Act (including land appurtenant thereto) and housing specified in item d of the same subparagraph: Value specified in Article 99(1)1c or d of the Act at the time of its acquisition × 3/100 (or 3/1,000 in cases of unregistered transferred assets specified in Article 104(3) of the Act); |
| b. | Building other than those specified in item a: |
Value specified in Article 99(1)1b of the Act at the time of its acquisition × 3/100 (or 3/1,000 in cases of unregistered transferred assets specified in Article 104(3) of the Act);
| 3. | Assets specified in Article 94(1)2b and c of the Act (excluding unregistered transferred assets specified in Article 104(3) of the Act): |
Standard market price at the time of its acquisition × 7/100;
| 4. | Assets other than those specified in subparagraphs 1 through 3: |
Standard market price at the time of its acquisition × 1/100.
| (7) | Deleted. <Feb. 21, 2014> |
| (8) | Deleted. <Feb. 21, 2014> |
| (9) | In applying Article 97(1)1a of the Act to an asset inherited or donated (including the portion corresponding to the amount of debt incurred in the event of a gift of encumbered property under the former part, with the exception of the items, of subparagraph 1 of Article 88 of the Act, but excluding donations under Articles 33 through 39, 39-2, 39-3, 40, 41-2 through 41-5, 42, 42-2, and 42-3 of the Inheritance Tax and Gift Tax Act), the value appraised under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act (in cases where there are the values determined or revised by the head of a tax office, etc. pursuant to Article 76 of that Act, referring to the values determined or revised) as at the commencement date of inheritance or the date of donation shall be deemed the actual trading price at the time of acquisition of the asset; provided, in any of the following cases, the value shall be calculated as follows: <Added on Dec. 31, 1999; Dec. 29, 2000; Dec. 30, 2003; Feb. 19, 2005; Aug. 5, 2005; Dec. 31, 2005; Feb. 17, 2016; Aug. 31, 2016; Feb. 3, 2017; Feb. 11, 2020; Feb. 17, 2021> |
| 1. | In cases of a parcel of land inherited or donated under the Act on the Public Announcement of Real Estate Values before a publicly announced individual land price was published on August 30, 1990, the larger amount between the value assessed under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as at the commencement date of inheritance or donation, and the value under Article 164(4); |
| 2. | In cases of a building inherited or donated before the standard market value of the building was published under Article 61(1)2 through 4 of the Inheritance Tax and Gift Tax Act, the larger amount between the value assessed under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as at the commencement date of inheritance or donation, and the value under Article 164(5) through (7). |
| (10) | Article 97(1)1a of the Act shall apply as follows: <Amended on Feb. 22, 2008; Feb. 2, 2012; Feb. 21, 2014; Feb. 17, 2016; Feb. 3, 2017; Feb. 12, 2019> |
| 1. | Where inheritance tax or gift tax has been levied under Articles 3-2(2), 33 through 39, 39-2, 39-3, 40, 41-2 through 41-5, 42, 42-2, 42-3, and 45-3 through 45-5 of the Inheritance Tax and Gift Tax Act, the value of the assets conveyed by inheritance or as a gift (referring to the deemed profit from the gift where gift tax has been levied under Articles 45-3 through 45-5 of the same Act) or an increase or decrease therein shall be added to, or subtracted from, the acquisition value; |
| 2. | Where any of the assets referred to in the subparagraphs of Article 94(1) of the Act has been acquired from a related person (including a foreign corporation) under subparagraph 12 of Article 2 of the Corporate Tax Act, and money has been disposed of as bonuses, dividends, etc. of a resident pursuant to Article 67 of the same Act, the amount disposed of as bonus, dividend, etc. shall be added to the acquisition value. |
| (11) | "Method prescribed by Presidential Decree" in the main sentence of Article 97(7) of the Act, means any of the following methods: <Amended on Feb. 28, 2007; Feb. 22, 2008; Feb. 29, 2008; Feb. 18, 2010; Jul. 28, 2014; Aug. 11, 2016; Jan. 17, 2017; Dec. 30, 2025> |
| 1. | Deleted; <Dec. 31, 2009> |
| 2. | Verifying the actual selling price of the real estate under Article 3(1) of the Act on Report on Real Estate Transactions (hereafter in this subparagraph, referred to as "actual selling price") according to the method prescribed by Decree of the Ministry of Finance and Economy when a resident acquires real estate; provided, the foregoing shall apply only where the actual selling price is the same as the transferring price declared at the time of filing an estimated return or a final return on the tax base of the real estate capital gains. |
| (12) | "Reward value for dealing, the appraisal value, or the converted acquisition value prescribed by Presidential Decree" in Article 97(1)1b of the Act means the prices prescribed in Article 176-2(2) through (4). <Amended on Feb. 18, 2010; Feb. 11, 2020> |
| (13) | Where transferring stocks acquired by exercising the stock option, the market value at the time of exercising the stock option shall be the acquisition value prescribed in Article 97(1)1 of the Act. <Added on Dec. 29, 2000> |
| Article 163-2 (Special provisions concerning calculation of necessary expenses for capital gains) |
| (1) | "Asset prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 97-2(1) of the Act, means an asset specified in Article 94(1)2a and 4b of the Act. <Amended on Feb. 12, 2019; Feb. 29, 2024> |
| (2) | The amount equivalent to a gift tax under Article 97-2(1) or (5) of the Act shall be calculated by multiplying the amount of the gift tax calculated under subparagraph 1 by the ratio of the asset value under subparagraph 2 to the assessed amount of the gift tax under subparagraph 3. In such cases, the amount equivalent to the gift tax, which may be included in necessary expenses, shall not exceed the balance after deducting the amounts specified in Article 97(1) and (2) of the Act from the transfer amount: |
| 1. | The calculated amount of the gift tax on the asset conveyed by gift to the resident from his or her spouse or from any of his or her lineal ascendents or descendents (referring to the calculated amount of the gift tax under Article 56 of the Inheritance Tax and Gift Tax Act); |
| 2. | The value of the asset transferred under Article 97-2(1) of the Act (referring to the value on which the gift tax is assessed); |
| 3. | The value on which the gift tax is assessed under the Inheritance Tax and Gift Tax Act. |
| (3) | In applying Article 97-2(4) of the Act, the application rate of the deduction for family business inheritance shall be the rate classified in each of the following subparagraphs: <Amended on Feb. 27, 2026> |
| 1. | In the case of a family business to which the Income Tax Act applies (hereafter in this Article referred to as an "individual family business"): The ratio obtained by dividing the amount deducted from the taxable value of inherited property pursuant to Article 18-2(1) of the Inheritance Tax and Gift Tax Act (hereafter in this subparagraph referred to as the "amount of deduction for family business inheritance") by the value of the inherited family business property under the former part, with the exception of the subparagraphs, of that paragraph. In such cases, the amount of deduction for family business inheritance for each asset to which the deduction applies shall be calculated by apportioning the total amount of deduction for family business inheritance based on the appraised value of each relevant asset as of the commencement of inheritance; |
| 2. | In the case of a family business to which the Corporate Tax Act applies (hereafter in this Article referred to as a "corporate family business"): The ratio of the value of assets, excluding non-business assets under Article 15(5)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act as of the commencement of inheritance, to the total asset value of the relevant corporate family business (meaning the value appraised under Chapter 4 of the Inheritance Tax and Gift Tax Act as of the commencement of inheritance). |
| (4) | Assets to which the deduction for family business inheritance applies for the purpose of applying Article 97-2(4) of the Act shall be the assets prescribed for each of the following subparagraphs: <Added on Feb. 27, 2026> |
| 1. | In the case of an individual family business: Business assets under Article 15(5)1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act; |
| 2. | In the case of a corporate family business: Stocks, etc. under Article 15(5)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. |
[This Article Added on Feb. 21, 2014]
| Article 164 (Assessment of standard market price of land and building) |
| (1) | "Amount appraised by the method prescribed by Presidential Decree" in the proviso to Article 99(1)1a of the Act, means the value appraised by the head of the competent tax office having jurisdiction over the place of payment (where the head of the competent tax office having jurisdiction over the place for tax payment is different from the head of the competent tax office having jurisdiction over the seat of the relevant land each other, if the head of a tax office having jurisdiction over the place for tax payment makes a request, the head of a tax office having jurisdiction over the seat of such land) according to a comparative table under Article 3(8) of the Act on the Public Announcement of Real Estate Values, considering the neighboring land the factors, such as land category, the status of use, etc., forming the price of land of which are similar to land with no officially assessed individual land price falling under any of the following, as the reference land. In such cases, the head of the competent tax office having jurisdiction over the place for tax payment may consider the value assessed by the head of a Si/Gun pursuant to the proviso to Article 4(1) of the Local Tax Act as the appraised value or may assess the price of land considering the appraised value of an appraisal corporation, etc. on such land by entrusting at least two appraisal corporations, etc. with appraisal: <Amended on Dec. 31, 1997; Dec. 31, 1998; Dec. 31, 2001; Feb. 19, 2005; Feb. 9, 2006; Dec. 14, 2009; Feb. 18, 2010; Sep. 20, 2010; Jun. 1, 2015; Aug. 31, 2016; Feb. 13, 2018; Oct. 8, 2020; Jan. 21, 2022> |
| 1. | Any land newly registered under the Act on the Establishment and Management of Spatial Data; |
| 2. | Any land partitioned or merged under the Act on the Establishment and Management of Spatial Data; |
| 3. | Any land, the lot number of which under the Act on the Establishment and Management of Spatial Data is changed due to a form and quality alteration or a change of specific use; |
| 4. | Any land for which the decision and public notice of the individually assessed official land price is omitted (including national and public land). |
| (2) | "Areas prescribed by Presidential Decree" in the proviso to Article 99(1)1a of the Act, means areas designated by the Commissioner of the National Tax Service, in which the land price rises rapidly or is likely to rise rapidly on account of various development project, etc. <Amended on Feb. 18, 2010> |
| (3) | In applying Article 99(1)1a through d of the Act, the immediately preceding standard market price shall apply, if an asset is acquired or transferred before a new standard market price is publicly notified. <Amended on Dec. 31, 1999; Feb. 3, 2015> |
| (4) | The standard market price at the time of acquisition of the land which has been acquired prior to a public notice of the individually assessed official land price on August 30, 1990 under the Act on the Public Announcement of Real Estate Values, shall be the amount computed under the following formula. In such cases, the standard market value of the following formula means the standard market value under the Local Tax Act prior to the amendment by Act No. 4995: <Amended on Dec. 31, 1999; Feb. 19, 2005; Aug. 31, 2016> |
┌───────────────────────────────────┐
│ Individually assessed official land price on the basis of January 1, 1990 │
│ x (Standard market value at the time of acquisition / │
│ Value calculated by dividing the aggregate of the standard market value │
│ on August 30, 1990 and │
│ the immediately preceding assessed one, by 2) │
└───────────────────────────────────┘
| (5) | The standard market price of the building acquired before a public notice of the standard market price under Article 99(1)1b of the Act, at the time of its acquisition, shall be the price computed under the following formula: <Amended on Dec. 31, 1999; Dec. 29, 2000; Jan. 5, 2021> |
Standard market price first notified publicly on the relevant asset by the Commissioner of the National Tax Service × Standard rate notified publicly by the Commissioner of the National Tax Service in view of the year of acquisition, year newly-built, structure, the life, etc. of the relevant building.
| (6) | The standard market price at the time of acquisition of officetels (including land appurtenant thereto), buildings for commercial use (including land appurtenant thereto) or collective housing acquired before a public notice of the standard market price under Article 99(1)1c of the Act or the proviso of item d of that subparagraph shall be the amount computed under the following formula; in such cases, if there exists no amount under Article 99(1)b of the Act at the time of public notice of the standard market price first notified by the Commissioner of the National Tax Service on the relevant asset, or at the time of acquisition, it shall be governed by the amount computed by apply mutatis mutandis paragraph (5): <Amended on Dec. 29, 2000; Feb. 19, 2005; Aug. 5, 2005; Feb. 11, 2020> |
┌──────────────────────────────────┐
│ the standard market value first publicly notified by │
│ the Commissioner of the National Tax Service │
│ for the relevant asset × the sum │
│ of the value under Article 99(1)1a of the │
│ Act and the value under item b at the time │
│ of acquisition / the sum of those values at │
│ the time of such first public notification │
│ (where the values at the time of acquisition │
│ and such first public notification are identical, paragraph (8) shall apply mutatis mutandis) │
└──────────────────────────────────┘
| (7) | The standard market price at the time of acquisition of the housing acquired before the public announcement of the individual housing price and the collective housing price under the Act on the Public Announcement of Real Estate Values (including land appurtenant thereto), shall be the value calculated by the following formula. In such cases, if there exists no value under Article 99(1)1b of the Act at the time of public announcement of housing price first announced publicly by the Minister of Land, Infrastructure and Transport on relevant housing or at the time of acquisition, it shall be governed by the value calculated by applying mutatis mutandis paragraph (5): <Added on Aug. 5, 2005; Feb. 29, 2008; Mar. 23, 2013; Aug. 31, 2016> |
┌────────────────────────────────────┐
│ the housing price first publicly notified by │
│ the Minister of Land, Infrastructure and │
│ Transport for the relevant house × the sum of │
│ the value under Article 99(1)1a of the Act │
│ and the value under item b at the time of │
│ acquisition / the sum of those values at the │
│ and such first public notification are identical, paragraph (8) shall apply mutatis mutandis) │
└────────────────────────────────────┘
| (8) | Where the standard market price at the time of transfer and that at the time of acquisition under Article 99(1)1 of the Act are identical because the new standard market price has not been publicly notified during the retention period, the amount computed by the method determined by Decree of the Ministry of Finance and Economy in view of the retention period of the relevant land or building and of the increase rate of the standard market price before and after the transfer date or before and after the acquisition date, shall be the standard market price at the time of its transfer. <Amended on Dec. 30, 1995; Dec. 31, 1997; Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (9) | Where any of the following values is lower than the value under Article 99(1)1a through d of the Act, the standard market price at the time of transfer shall be calculated by deducting such difference from values under items a through d of the same subparagraph: <Amended on Dec. 31, 1999; Dec. 30, 2002; Feb. 19, 2005; Aug. 5, 2005; Feb. 4, 2009; Feb. 15, 2013> |
| 1. | In cases of purchasing through negotiations, expropriation under the Act on Acquisition of and Compensation for Land for Public Works Projects and expropriation under other Acts, the lesser of the amount of compensation and the market price becoming basis of computation of the amount of compensation; |
| 2. | In cases of public sale under the National Tax Collection Act, compulsory sale by official auction or judicial sale for the execution of mortgage under the Civil Procedure Act, the price at such public sale or knockdown. |
| (10) | "Officetels (including land appurtenant thereto) and commercial buildings (including land annexed thereto) prescribed by Presidential Decree" in Article 99(1)1c of the Act, means officetels (including land annexed thereto) and commercial buildings (including land annexed thereto) located in an area designated by the Commissioner of the National Tax Service by taking into account uses and floor space of the relevant building and the number of buildings under partitioned ownership, etc. <Amended on Feb. 18, 2010; Feb. 11, 2020> |
| (11) | "Amount appraised by the methods prescribed by Presidential Decree" in the proviso to Article 99(1)1d of the Act, means the following value. In such cases, the head of the competent tax office having jurisdiction over the place for tax payment may consider the value assessed by the head of a Si/Gun pursuant to the proviso to Article 4(1) of the Local Tax Act as the appraised value or may assess the price of land considering the appraised value of an appraisal corporation, etc. on the relevant house by entrusting at least two appraisal corporations, etc. with appraisal: <Added on Feb. 9, 2006; Feb. 18, 2010; Sep. 20, 2010; Aug. 31, 2016; Feb. 13, 2018; Jan. 21, 2022> |
| 1. | In cases of an individual house having no individual housing price under the Act on the Public Announcement of Real Estate Values, a neighboring house having similar usefulness, such as the structure, use and status of usage, shall be deemed a standard house, and the amount appraised by the head of the competent tax office having jurisdiction over the place for tax payment (where the head of the competent tax office having jurisdiction over the place for tax payment is different from the head of the competent tax office having jurisdiction over the location of the relevant house, and where the head of the competent tax office having jurisdiction over the place for tax payment requests therefor, the head of the competent tax office having jurisdiction over the location of the relevant house) according to the reference table under Article 16(6) of the same Act; |
| 2. | In cases of a collective house having no collective housing price under the Act on the Public Announcement of Real Estate Values, the amount assessed by the head of the competent tax office having jurisdiction over the place for tax payment (where the head of the competent tax office having jurisdiction over the place for tax payment is different from the head of the competent tax office having jurisdiction over the location of the relevant house, and where the head of the competent tax office having jurisdiction over the place for tax payment requests therefor, the head of the competent tax office having jurisdiction over the location of the relevant house) in overall consideration of traded prices and rents of neighboring collective houses and estimated cost, etc. to build a collective house deemed to have similar usefulness to the relevant collective house. |
| (12) | "Multiples prescribed by Presidential Decree" in Article 99(2) of the Act, means multiples announced publicly by the Commissioner of the National Tax Service in view of the price of trade example of land under similar price status located in the particular area of each region in addition to the individually assessed official land price at the time of transfer or acquisition. <Amended on Dec. 31, 1999; Feb. 9, 2006; Feb. 18, 2010> |
| Article 164-2 (Hearing opinions before public announcement of standard market price) |
Public announcement under Article 99(4) of the Act shall contain the following matters:
| 1. | Perusal period and place of the perusal register of standard market prices; |
| 2. | Submission period and place of opinions; |
| 3. | Methods to present the opinions. |
[This Article Added on Aug. 5, 2005]
| Article 164-3 (Application for reassessment and public announcement of standard market price) |
| (1) | A person intending to apply for reassessment and public announcement on the standard market prices calculated and publicly announced by the Commissioner of the National Tax Service under Article 99-2(1) of the Act shall submit a written application for reassessment and public announcement of standard market prices stating the following matters to the Commissioner of the National Tax Service through the head of the competent tax office: |
| 1. | Name and address of the applicant; |
| 2. | Location of subject property; |
| 3. | Reasons for application. |
| (2) | Where the Commissioner of the National Tax Service publicly re-announces the standard market prices under the latter part of Article 99-2(2) of the Act and paragraph (3) of the same Article, he or she shall do so by way of statement on the Internet. |
[This Article Added on Aug. 5, 2005]
| Article 165 (Computation of standard market price of assets, other than land and buildings) |
| (1) | "Value appraised by the method prescribed by Presidential Decree" in Article 99(1)2a of the Act, means the aggregate of the amount paid until the date of acquisition or transfer and the amount corresponding to the premium as of the date of acquisition or transfer. <Amended on Feb. 18, 2010; Jun. 5, 2018> |
| (2) | "Value appraised by the method prescribed by Presidential Decree" in Article 99(1)2b of the Act, means the value appraised by applying Article 51(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act mutatis mutandis. <Amended on Feb. 18, 2010> |
| (3) | "Listed corporations prescribed by Presidential Decree" in the former parts of Article 99(1)3 and 4 of the Act, means KOSDAQ or KONEX-listed corporations, respectively; and "those prescribed by Presidential Decree" in Article 99(1)3 of the Act, means those that fall under Article 52-2(3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. In such cases, "two months before or after the base date of appraisal" in that paragraph, shall be construed as "one month before the date of acquisition or transfer." <Added on Dec. 31, 2024> |
| (4) | The appraisal base date and amount appraised under the latter part of Article 99(1)4 of the Act, shall be as follows: <Added on Dec. 31, 2024; Dec. 30, 2025> |
| 1. | The appraised value per share shall be the weighted average value calculated by applying the weight ratio of 3 to 2 (the ratio of the net value of profit or loss to the net asset value shall be 2 to 3 in cases of a corporation falling under Article 94(1)4c of the Act) to the valuation in accordance with the formula under item a (hereafter referred to as "net value of profit or loss" in this paragraph) and the valuation in accordance with the formula under item b (hereafter referred to as "net asset value" in this paragraph) respectively; provided, where its weighted average value is less than the amount calculated by multiplying the net asset value per stock by 80/100, such amount shall be construed as the appraised amount; |
| a. | Net amount of profit or loss for each week of the business year immediately prior to the business year the date of transfer or acquisition falls / The interest rate determined by Decree of the Ministry of Finance and Economy, taking into consideration the current yield from trading corporate bonds with maturity of three years guaranteed by a financial institution defined in subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality; |
| b. | Book value of the corporation as of the end of the business year immediately preceding the business year the date of transfer or acquisition falls (or the standard market price under Article 99(1)1a of the Act in cases of land) / Total number of outstanding stocks; |
| 2. | In applying subparagraph 1, if the corporation that issued stocks, etc. under Article 99(1)4 of the Act (hereafter referred to as "non-listed stocks, etc." in this subparagraph) owns stocks or investment equities equivalent to 10/100 or less of the total number of outstanding stocks of any other corporation that issued non-listed stocks, etc. or total investment amount of such corporation, such non-listed stocks, etc. issued by another corporation may be appraised by the acquisition value under Article 74(1)1e of the Enforcement Decree of the Corporate Tax Act, notwithstanding subparagraph 1; |
| 3. | The value of any of the following stocks, etc. shall be the valuation in accordance with the formula under subparagraph 1b, notwithstanding the main clause of subparagraph 1: |
| a. | Stocks, etc. of a corporation under the proceedings of liquidation during the period set for filing a final return on the capital gains tax base under Article 110 of the Act, or a corporation where it is deemed difficult to continue its business because of death of the business operator or any other reason; |
| b. | Stocks, etc. of a corporation that has not yet commenced its business, a corporation that has been in the business for less than one year, or a corporation temporarily or permanently closed; |
| c. | Stocks, etc. of a corporation whose ratio of the total amount of the value of stock, etc. is not less than 80/100 among the total assets thereof; |
| d. | Stocks, etc. of a corporation, the duration of existence of which was determined in the articles of incorporation as at the time of its incorporation, in which case the remaining duration of its existence as of the base date of assessment is less than three years; |
| 4. | In applying subparagraph 1b, "total number of outstanding stocks" means the total number of outstanding stocks as of the end of the business year immediately preceding the business year the date of transfer or acquisition falls. |
| (5) | Notwithstanding paragraph (4), the standard market price at the time of acquisition shall be determined by the following formula, where stocks, etc. fall under stocks. etc. under paragraph (3) as of the transfer date, but do not fall under stocks, etc. under paragraph (3) at the time of the acquisition. In such cases, if an appraised value under paragraph (4) as of the acquisition date is identical to an appraised value under paragraph (4) as of the date of listing stocks on the KOSDAQ or KONEX, a value computed by applying mutatis mutandis paragraph (9) shall be an appraised value under paragraph (4) as of the date listing stocks on the KOSDAQ or KONEX: <Added on Dec. 31, 2024> |
┌───────────────────────────────┐
│ (the average of the closing market prices publicly announced daily for one month after │
│ the listing date on the KOSDAQ Market or KONEX Market) × (the appraised value under │
│ paragraph (4) as of the acquisition date / the appraised value under paragraph (4) as of │
│ the listing date on the KOSDAQ Market or KONEX Market) │
└───────────────────────────────┘
| (6) | Where stocks, etc. fall under those of a listed corporation on the KOSPI Market (meaning a corporation whose shares are listed on the KOSPI Market under Article 176-9(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act) as of the transfer date, but did not fall under such stocks, etc. of a listed corporation on the KOSPI Market (meaning a corporation whose shares are listed on the KOSPI Market under Article 176-9(1) of that Decree) or stocks, etc. under paragraph (3) at the time of acquisition, the standard market price at the time of acquisition shall be based on the value calculated mutatis mutandis pursuant to paragraph (5). In such cases, "the listing date on the KOSDAQ Market or KONEX Market" shall be deemed "the listing date on the KOSPI Market," and "the final market price on the KOSDAQ Market or KONEX Market" shall be deemed "the final market price of the Exchange." <Added on Dec. 31, 2024> |
| (7) | The term "value appraised by a method prescribed by Presidential Decree" in Article 99(1)5 of the Act means the value appraised mutatis mutandis pursuant to Article 58-2(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. <Added on Dec. 31, 2024> |
| (8) | "Value appraised by the method prescribed by Presidential Decree" in Article 99(1)6 of the Act, means the value appraised as follows: <Amended on Dec. 30, 2003; Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010; Feb. 3, 2017; Feb. 15, 2022; Feb. 28, 2023; Dec. 31, 2024; Dec. 30, 2025> |
| 1. | Stocks, etc. under Article 94(1)4b through d of the Act: |
The value assessed pursuant to Article 99(1)3 and 4 of the Act. In such cases, where stocks, etc. referred to in Article 94(1)4d of the Act correspond to stocks, etc. referred to in Article 99(1)4 of the Act, the value assessed pursuant to the formula prescribed in paragraph (4)1b of this Article shall be the value;
| 2. | Goodwill under Article 94(1)4a of the Act: |
The value appraised by applying mutatis mutandis Article 59(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act;
| 3. | Right to use facilities under Article 94(1)4b of the Act (excluding stocks, etc.):3. the right to use facilities under Article 94-1(4) of the Act (excluding stocks, etc.): |
A standard amount of market price announced pursuant to the Local Taxes; provided, where a standard amount of market price at the time of acquisition or transfer cannot be confirmed, a value computed by a method prescribed by Decree of the Ministry of Finance and Economy.
| (9) | Where the standard market price at the time of transfer and the standard market price at the time of acquisition calculated pursuant to Article 99(1)3 and 4 of the Act are the same, notwithstanding Article 99(1)3 and 4 of the Act, the standard market price at the time of transfer shall be the value calculated by a method prescribed by the Decree of the Ministry of Finance and Economy, taking into account the holding period of the relevant asset and the rate of increase in the standard market price. <Added on Dec. 31, 2024; Dec. 30, 2025> |
| (10) | In assessing the goodwill under paragraph (8)2, if the equity capital is unverifiable by the documentary evidence presented by the transferor, it shall be the higher amount of those computed by each of the following formulas: <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Amount of business income / PER of equity capital prescribed by Decree of the Ministry of Finance and Economy; |
| 2. | Amount of revenue / Equity capital turnover rate prescribed by Decree of the Ministry of Finance and Economy. |
| (11) | When applying paragraph (10), the amount of business income and the amount of income shall be deemed generated in the relevant business sector in the preceding taxable period of the year in which the date of transfer of the goodwill falls; provided, where the business transferred starts anew in the year assets have been transferred, the amount of business income or the amount of income generated from such business sector transferred from the date of commencement of business to the date of transfer shall be calculated by converting it into a year. <Added on Feb. 18, 2010> |
| (12) | In appraising values by applying Article 65(1) of the Inheritance Tax and Gift Tax Act mutatis mutandis pursuant to Article 99(1)8 of the Act, "base date of assessment" under Article 61 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be deemed "date of transfer or acquisition." <Added on Feb. 17, 2021> |
[This Article Wholly Amended on Dec. 29, 2000]
| Article 166 (Computation of gains from transfer) |
| (1) | In computing gains from transfer under Article 100 of the Act, if a member of a renovation project association that executes a redevelopment project, a reconstruction project, or small-scale reconstruction project, etc., transfers the title selected as an occupant, acquired by furnishing (including cases of furnishing buildings or land only) his or her existing building and its appurtenant land to the relevant association, the gains from transfer obtained by such member shall be computed by any of the following formula: <Amended on Dec. 31, 2001; Jun. 30, 2003; Dec. 30, 2003; Feb. 19, 2005; Dec. 31, 2005; Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010; Feb. 15, 2013; Feb. 2, 2018; Feb. 15, 2022; Feb. 29, 2024> |
| 1. | When the settlement balance is paid |
┌─────────────────────────────────┐
│ [Transfer price - (Appraised value of the existing building and its ancillary land + Received settlement balance) │
│ - Necessary expenses pursuant to Article 97(1)2 and 3 of the Act] │
│ (hereafter referred to in this Article as "Transfer gains after authorized management and disposal plans, etc.") + │
│ (Appraised value of the existing building and its ancillary land │
│ - Acquisition cost of the existing building and its ancillary land) - Necessary expenses pursuant to │
│ Article 97(1)2 and 3 or Article 163(6) of the Act] (hereafter referred to in this Article │
│ as "Transfer gains before authorized management and disposal plans, etc.") │
└─────────────────────────────────┘
| 2. | When the settlement balance is received: The total of the following amounts: |
| a. | [Transfer value － (Appraised value of the existing building and its appurtenant land － Settlement balance received) － Necessary expenses under Article 97(1)2 and 3 of the Act]; |
| b. | [(Appraised value of the existing building and its appurtenant land － Acquisition value of the existing building and its appurtenant land － Necessary expenses under Article 97(1)2 and 3 of the Act or Article 163(6) of this Decree)] × [(Appraised value of the existing building and its appurtenant land － Settlement balance received) ÷ Appraised value of the existing building and its appurtenant land]; |
| (2) | In calculating gains from transfer in accordance with Article 100 of the Act, if a member of a renovation project association that executes a housing redevelopment project, housing reconstruction project or small-scale reconstruction project, etc. provides an existing house and its appurtenant land to the relevant association and thereafter transfers the house and its appurtenant land acquired in accordance with the management and disposal plan, etc., the marginal gain from the actual selling price shall be calculated by any of the following formulas: <Added on Feb. 28, 2007; Feb. 9, 2018; Feb. 15, 2022; Feb. 29, 2024> |
| 1. | When the settlement balance is paid |
┌─────────────────────────────────┐
│ [Transfer gains after authorized management and disposal plans, etc. x Paid settlement balance │
│ / (Appraised value of the existing building and its ancillary land + Paid settlement balance)] │
│ (hereinafter referred to in this Article as "transfer gains on settlement balance payment") + │
│ {[Transfer gains after authorized management and disposal plans, etc. x Appraised Value of the existing building and its ancillary land │
│ / (Appraised value of the existing building and its ancillary land + Paid settlement balance)] + │
│ Transfer gains before approval of management and disposal plans, etc.} (hereafter referred to in this Article as "Transfer gains on existing building") │
└─────────────────────────────────┘
| 2. | When the settlement balance is received: |
The value under paragraph (1)2.
| (3) | In applying paragraphs (1) and (2), if the acquisition value of the existing building and its appurtenant land is unverifiable, the amount computed by the following formula shall govern: <Amended on Dec. 31, 2001; Dec. 30, 2003; May 31, 2005; Feb. 28, 2007; Feb. 15, 2022> |
┌───────────────────────────────────┐
│ Appraised value of existing building and appurtenant land × │
│ (Standard market price of existing building and appurtenant land │
│ under Article 99(1)1 of the Act as of acquisition date / │
│ Standard market price of existing building and appurtenant land │
│ under Article 99(1)1 of the Act as of authorization date │
│ of management and disposition plan) │
└───────────────────────────────────┘
| (4) | The appraised value of the existing building and its appurtenant land under paragraphs (1) through (3) means the following values: <Amended on Feb. 28, 2007; Feb. 9, 2018> |
| 1. | The price stipulated by the management and disposal plan, etc.; provided, it shall be the price as changed, if there is a change in the price; |
| 2. | The value calculated by applying the method under Article 176-2(3)1, 2, or 4 in the order enumerated above, if there is no price set under subparagraph 1. In such cases, "before or after the date of transfer or acquisition" in Article 176-2(3)1 and 2 shall be construed as "before or after the date of authorization of the management and disposition plan." |
| (5) | When deducting the special long-term holding deduction amount under Article 95(2) of the Act from the marginal gain from transfer under paragraphs (1) and (2)1 in calculating the capital gains under Article 95 of the Act, the holding period shall be calculated as set forth in the following: <Added on Feb. 28, 2007; Feb. 15, 2013; Feb. 9, 2018; Feb. 15, 2022; Feb. 9, 2024> |
| 1. | Holding period when deducting the special long-term holding deduction amount from the transfer gains before authorized management and disposal plans, etc. under paragraph (1)2b: The period from the date the existing building and its appurtenant land are acquired to the date the management and disposal plan, etc. is authorized; |
| 2. | Holding period when deducting the special long-term holding deduction amount from the marginal gain from transfer pursuant to paragraph (2)1: |
| a. | Holding period when deducting the special long-term holding deduction amount from the marginal gain from the transfer of the settlement balance paid: The period from the date the management and disposal plan, etc. is authorized to the date the newly built house and its appurtenant land are transferred; |
| b. | Holding period when deducting the special long-term holding deduction amount from the marginal gain from the transfer of the existing building: The period from the date the existing building and its appurtenant land are acquired to the date the newly built house and its appurtenant land are transferred. |
| (6) | If it is impracticable to clearly separate the value of land from the value of buildings, etc. in applying Article 100(2) of the Act, the value shall be computed proportionately in accordance with Article 64(1) of the Enforcement Decree of the Value-Added Tax Act, but the value shall be based on the value appraised in accordance with Article 62(1) of the Inheritance Tax and Gift Tax Act, if the book value under the proviso of Article 64(1)2 of the Enforcement Decree of the Value-Added Tax Act is unavailable for a ship or any other tangible asset under Article 62(1) of the Inheritance Tax and Gift Tax Act in applying Article 100(2) of the Act. <Amended on Feb. 19, 2005; Feb. 28, 2007; Jun. 28, 2013; Feb. 17, 2016; Mar. 31, 2016; Feb. 28, 2023; Feb. 27, 2026> |
| (7) | In computing the margin from transfer under Article 100 of the Act, where a member of a renovation project association that executes a housing redevelopment project, housing reconstruction project or small-scale reconstruction project, etc. provides the existing building and land appurtenant thereto to the relevant association, and transfers the newly-built building and land appurtenant thereto acquired pursuant to the management and disposal plan, etc., the margin from transfer according to the standard market price shall be the aggregate of margins from transfer calculated under the following classifications (where the settlement balance is received, the margin from transfer corresponding thereto shall be deducted): <Added on Dec. 30, 2002; Jun. 30, 2003; Dec. 30, 2003; Feb. 19, 2005; May 31, 2005; Aug. 5, 2005; Dec. 31, 2005; Feb. 28, 2007; Feb. 9, 2018; Feb. 15, 2022> |
| 1. | Margin from transfer from the date the existing building and land appurtenant thereto are acquired to the date preceding the date the management and disposal plan, etc. is authorized: Standard market price of the existing building and land appurtenant thereto as of the date preceding the date the management and disposal plan, etc is authorized (referring to that under Article 99(1)1 of the Act; hereafter the same shall apply in this paragraph) － Standard market price of an existing building and land appurtenant thereto as of the date the existing building and land appurtenant thereto are acquired － Necessary expenses for an existing building and land appurtenant thereto (referring to that under Article 163(6); hereafter the same shall apply in this paragraph); |
| 2. | Margin from transfer from the date the management and disposal plan, etc. is authorized to the date preceding the date the construction of the newly-built building is completed (referring to the acquisition date under Article 162(1)4): Standard market price of land appurtenant to the existing building as of the date preceding the date the construction of the newly-built building is completed － Standard market price of land appurtenant to the existing building as of the date the management and disposal plan, etc. is authorized; |
| 3. | Margin from transfer from the date the construction of the newly-built building is completed to the date the newly-built building is transferred: Standard market price of the newly-built building and land appurtenant thereto as of the date the newly-built building is transferred － Standard market price of the newly-built building and land appurtenant thereto as of the date the construction of the newly-built building is completed (where there exists the standard market price under Article 99(1)1c and d of the Act as of the date the newly-built house is transferred, the standard market price calculated by applying mutatis mutandis Article 164(6) and (7)) － Necessary expenses for the newly-built building and land appurtenant thereto (limited to the portion which is increased more than land appurtenant to the existing building). |
| (8) | "Cases falling under reasons prescribed by Presidential Decree, including where values are classified pursuant to other statutes or regulations" in the proviso of Article 100(3) of the Act means cases falling under any of the following subparagraphs: <Added on Feb. 28, 2025> |
| 1. | Where the value of land and buildings, etc. are divided as prescribed by other statutes or regulations; |
| 2. | Where land and buildings are acquired together and then the buildings, etc. are demolished and only the land is used. |
[This Article Added on Dec. 29, 2000]
| Article 167 (Calculation of capital gains by misconduct) |
| (1) | Deleted. <Dec. 31, 1999> |
| (2) | Deleted. <Dec. 31, 1999> |
| (3) | "If it is deemed that any act or calculation of a resident with capital gains reduces the burden of taxation" in Article 101(1) of the Act, means any of the following cases; provided, the foregoing shall apply only where the difference between the market price and actual trading price is at least 300 million won or at least an amount equivalent to 5/100 of the market price: <Amended on Feb. 28, 2007; Feb. 2, 2012; Feb. 3, 2017> |
| 1. | When an asset is purchased from the related person at a price higher than the market price or when an asset is transferred to a person in special relations at a price lower than the market price; |
| 2. | When it is deemed otherwise that the tax burden has been unduly reduced at the time when calculating the transfer price or necessary expenses for the pertinent year by a transaction with a related person. |
| (4) | In trading with related persons under each subparagraph of Article 98(1), where deemed that the burden of tax has been reduced unreasonably by acquiring land, etc. in excess of their market price, or by transferring them short of their market price, the relevant acquisition value or transfer value shall be computed by their market price. <Amended on Feb. 2, 2012> |
| (5) | In applying paragraphs (3) and (4), the market price shall be governed by the value assessed by applying mutatis mutandis Articles 60 through 66 of the Inheritance Tax and Gift Tax Act and Articles 49, 50 through 52, 52-2, 53 through 58, 58-2 through 58-4, and 59 through 63 of the Enforcement Decree of that Act. In such cases, "the period within 6 months before or after the base date of assessment (in the case of donated property, from 6 months before the base date of assessment to 3 months after the base date of assessment)" in the main clause, with the exception of the subparagraphs, of Article 49(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be deemed "the period of 3 months before and after the transfer date or acquisition date (hereafter in this paragraph referred to as the "assessment period")," and "where a tax base of inheritance tax or gift tax is reported pursuant to Article 67 or 68 of the Act, the value from 6 months before the base date of assessment to the date of report within the assessment period under paragraph (1)" in the main clause of paragraph (4) of that Article shall be deemed "where a tax base of capital gains tax is reported pursuant to Article 105 of the Income Tax Act, the value from 3 months before the transfer date or acquisition date to the date of report within the assessment period." <Amended on Dec. 31, 1999; Dec. 30, 2003; Feb. 19, 2005; Feb. 9, 2006; Feb. 28, 2007; Feb. 12, 2019; Feb. 17, 2021; Feb. 27, 2026> |
| (6) | Where any asset is acquired or transferred between an individual and a juristic person, and if Article 52 of the Corporate Tax Act are not applicable to the transactions of the relevant juristic person as the price thereof falls under the value pursuant to Article 89 of the Enforcement Decree of the Corporate Tax Act, Article 101(1) of the Act shall not apply; provided, the same shall not apply where it is admitted that capital gains tax has been reduced by fraud or other improper means. <Added on Dec. 30, 2003; Feb. 19, 2005> |
| (7) | Notwithstanding paragraph (5), the market price of stocks issued by a stock-listed corporation shall be the market price under Article 89(1) of the Enforcement Decree of the Corporate Tax Act. In such cases, the proviso, with the exception of the subparagraphs, of paragraph (3) shall not apply. <Added on Feb. 17, 2021> |
[Title Amended on Dec. 31, 1999]
| Article 167-2 (Aggregating of asset losses from transfer) |
| (1) | Any asset loss from transfer under the provisions of Article 102(2) of the Act shall be successively deducted from the amount of capital gains of the following assets: |
| 1. | Amount of capital gains of the assets subjected to the same tax rate as the assets whereon a loss from transfer has been incurred; |
| 2. | Amount of capital gains of the assets subjected to the tax rate different from the assets whereon a loss from transfer has been incurred. In such cases, if the amount of capital gains of the assets subjected to the different tax rate is two or more, the deduction shall be made in proportion to the ratio occupied by the relevant amount of capital gains in the aggregate of amount of capital gains by each tax rate. |
| (2) | In calculating the reduced or exempted amount of income under Article 90 of the Act, if the amount of capital gains under paragraph (1) contains the reduced or exempted income amount, the amount obtained by deducting the portion equivalent to the relevant asset losses from transfer from the reduced or exempted amount of income shall be deemed the reduced or exempted amount of income under Article 90 of the Act, by considering that the relevant asset losses from transfer has been deducted in proportion to the ratio occupied by the net amount of capital gains (referring to the portion excluding the reduced or exempted income amount) and the reduced or exempted income amount. |
[This Article Added on Dec. 30, 2003]
[Previous Article 167-2 moved to Article 167-4 <Dec. 30, 2003>]
| Article 167-3 (Scope of houses falling under at least three houses for one household) |
| (1) | "At least three houses for one household prescribed by Presidential Decree" in Article 104(7)3 of the Act, means houses owned by one household owning at least three houses in the Republic of Korea (houses in subparagraph 1 or 12 shall not be included in the calculation of the number of houses), which do not fall under any of the following houses: <Amended on Feb. 19, 2005; May 31, 2005; Dec. 31, 2005; Feb. 9, 2006; Feb. 29, 2008; Jul. 24, 2008; Oct. 7, 2008; Feb. 4, 2009; Feb. 18, 2010; Sep. 20, 2010; Mar. 31, 2011; Oct. 14, 2011; Dec. 8, 2011; Feb. 2, 2012; Feb. 15, 2013; Feb. 21, 2014; Dec. 28, 2015; Aug. 11, 2016; Aug. 31, 2016; Jul. 16, 2018; Oct. 23, 2018; Feb. 12, 2019; Feb. 11, 2020; Oct. 7, 2020; Feb. 17, 2021; Feb. 15, 2022; May 31, 2022; Feb. 28, 2023; Feb. 29, 2024; May 7, 2024; Sep. 10, 2024; Nov. 12, 2024; Feb. 28, 2025; Nov. 28, 2025; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | A house which is located in an area other than Seoul Metropolitan Area and metropolitan cities and the Special Self-Governing City (excluding Guns belonging to a metropolitan city, Eups and Myeons under Article 3(3) and (4) of the Local Autonomy Act, and Eups and Myeons under Article 6(3) of the Special Act on the Establishment of Sejong Special Self-Governing City) in cases where the total amount of the standard market prices of such house and land appurtenant thereto do not exceed 300 million won as at the date of transferring that house or any other house; |
| 2. | Any of the following houses (hereafter in this Article, referred to as "long-term rental houses"), which a resident who has completed the business registration under Article 168 of the Act and Article 5 of the Special Act on Private Rental Housing [hereafter in this Article, referred to as "business registration, etc."; if a resident who had completed the registration of a rental business operator under Article 5 of the Special Act on Private Rental Housing but failed to complete the business registration under Article 168 of the Act as of October 29, 2003 (hereafter in this Article, referred to as "reference date of existing business operator") completed the business registration under that Article by June 30, 2004, the resident shall be deemed to complete the business registration under Article 168 of the Act as at the date of registration of a rental business operator under Article 5 of the Special Act on Private Rental Housing]; provided, in applying this Article, Article 167-4, Article 167-10 and Article 167-1, 1 in cases of long-term rental houses falling under items a and c through e (limited to the houses applicable to Article 5(1) of the Addenda of the Special Act on Private Rental Housing (Act. No. 17482)), if the registration is cancelled on the date of expiry of the mandatory rental period under Article 6(5) of the Special Act on Private Rental Housing ends, the requirements for rental period specified in the relevant item shall be equipped on the date of expiry of the mandatory rental period: |
| a. | A house that a resident who rents at least one private housing unit purchased for rental defined in subparagraph 3 of Article 2 of the Special Act on Private Rental Housing, has rented for at least five years, where the sum of standard market prices of the house and land appurtenant thereto does not exceed 600 million won (or 300 million won, if it is located outside of the Seoul Metropolitan area) at as the date of commencement of rental of the house, and its annual increase rate of rental deposit or fee (hereafter in this Article, referred to as "fees, etc.") or shall not exceed 5/100 (the request for the increased amount of fees, etc. shall not be made within one year after the contract for lease is entered into or agreed fees, etc. are increased; and if a rental business entity mutually converses between rental deposit and monthly fees while claiming the increase of fees, etc., the provisions concerning conversion under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis); provided, the foregoing provisions shall only apply to a house for which business registration has been completed until March 31, 2018; |
| b. | A house that a resident who completed the business registration, etc. before the reference date of existing business operators and rents at least two private housing units purchased for rental defined in subparagraph 3 of Article 2 of the Special Act on Private Rental Housing, has rented for at least five years (limited to those registered and rented before the reference date of existing business operators), where the sum of standard market prices of the house and land appurtenant thereto does not exceed 300 million won at as the date of acquisition of the house; |
| c. | A house that a resident who rents at least two housing units built for rental under the Special Act on Private Rental Housing on a site not exceeding 298 square meters with a total floor area not exceeding 149 square meters in each housing unit (including the area of the part deemed the section for dwelling and the area of basement used only for dwelling under the main sentence of Article 154(3); referring to the area for exclusive use, in cases of a multi-family housing building), rents for at least five years or convert for sale (including sale to a rental business operator under the same Act), in cases where the total amount (referring to the price of the house under the Act on the Public Announcement of Real Estate Values, if such price is available) of standard market prices of such house and land appurtenant thereto does not exceed 600 million won as at the date of commencement of rental of that house and its annual increase rate of the fees, etc. does not exceed 5/100 (the request for the increased amount of fees, etc. shall not be made within one year after the contract for lease is entered into or agreed fees, etc. are increased, and if a rental business entity mutually converses between rental deposit and monthly fees while claiming the increase of fees, etc., the provisions concerning conversion under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis); provided, the foregoing provisions shall only apply to a house for which business registration has been completed until Mar. 31, 2018; |
| d. | A house that meets the following requirements as a private housing unit purchased for rental defined in subparagraph 3 of Article 2 of the Special Act on Private Rental Housing, (limited to the houses for which a supply contract was made initially and down payment was paid during the period from June 11, 2008 to June 30, 2009, among unsold houses (referring to the houses that a project operator under Article 54 of the Housing Act, who supplies houses under the same Article of the same Act, supplies on a first-come-first-served basis because it failed to successfully make sale contracts by June 10, 2008 in a housing complex even after the lapse of the deadline for making contracts with buyers according to the public notice of inviting buyers)). In such cases, a resident who transfers the relevant housing unit shall file the final return or preliminary return on tax base of the taxable year in which it is transferred, with the head of the competent tax office having jurisdiction over the place for tax payment, along with the copies of the confirmation on the unsold housing issued by the head of a Si/Gun/Gu and copies of the sales contract when purchasing the unsold housing unit: |
1) Plottage shall not exceed 298 square meters, and the total floor space (including the area deemed a house under the main sentence of Article 154(3) and the area of basement exclusively used for residence; referring to the exclusive use area in cases of multi-family houses) of the relevant house shall not exceed 149 square meters;
2) The relevant house shall be rented for at least five years;
3) The total of standard market prices for the relevant house and land annexed thereto shall not exceed 300 million won at the time of acquiring ownership thereof;
4) The relevant house shall be located in an area other than the Seoul Metropolitan area;
5) The number of purchased-rental houses that meets all the requirements of 1) through 4) (hereafter in this Article, referred to as "unsold purchased-rental house"), shall be at least five in one Si/Gun (where the number of purchased-rental houses under item a is at least five or where the number of purchased-rental houses under item b is at least two, the total number of purchased-rental houses under item a or b and unsold purchased-rental houses shall be at least five (if the number of purchased-rental houses under item b is added thereto, it is limited only to where unsold purchased-rental houses is located in one Si/Gun);
6) The relevant house shall not be a buy-to-rent private housing where the rental property is an apartment under subparagraph 5 of Article 2 of the previous Special Act on Private Rental Housing or short-term private rental housing under subparagraph 6 of that Act, whose registration is applied for under Article 5 of that Act (including the report on changes in registered matters to add houses to be rented) after July 11, 2020;
7) The relevant house shall not be a house whose report is submitted to change a short-term private rental housing under subparagraph 6 of Article 2 of the previous Special Act on Private Rental Housing registered under Article 5 of that Act into a long-term private rental housing, etc. after July 11, 2020;
| e. | A house which is rented for at least 10 years and belongs to long-term rental housing, etc., among buy-to-rent private housing under subparagraph 3 of the Special Act on Private Rental Housing, in cases where the total amount of standard market prices of such house and land appurtenant thereto does not exceed 600 million won (or 300 million won, if it is located outside of the Seoul Metropolitan area) as at the date of commencement of rental of the house and annual increase rate of the fees, etc. does not exceed 5/100 (the request for the increased amount of fees, etc. shall not be made within one year after the contract for lease is entered into or agreed fees, etc. are increased, and if a rental business entity mutually converses between rental deposit and monthly fees while claiming the increase of fees, etc., the provisions concerning conversion under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis); provided, any of the following houses shall be excluded: |
1) A long-term private rental house under subparagraph 5 of Article 2 of the Special Act on Private Rental Housing [excluding cases where one household acquires a house (including a right to acquire a house) before the public announcement date of the relevant area subject to adjustment or the fact of having entered into a sale contract and having paid a contract deposit to acquire a house before that public announcement date is confirmed through evidential documents] in an area subject to adjustment, which one household acquires while owning one house in the Republic of Korea;
2) A buy-to-rent private housing whose rental property is an apartment among long-term private rental housing under the previous Special Act on Private Rental Housing whose registration of a rental business entity under Article 5 of the Special Act on Private Rental Housing (including the report on changes in registered matters to add houses to be rented) before July 11, 2020;
3) A house whose report is submitted to change a short-term private rental housing under subparagraph 6 of Article 2 of the previous Special Act on Private Rental Housing registered under Article 5 of that Act into a long-term private rental housing, etc. after July 11, 2020;
| f. | A house which is a house rented for at least 10 years or converted for sale (including sale to a rental business operator under the same Act) by a person who rents two or more units of a house built for rental which belongs to long-term rental housing, etc., among privately constructed rental housing under subparagraph 2 of Article 2 of the Special Act on Private Rental Housing, and the plottage and total floor space (including the area deemed a house under the main sentence of Article 154(3) and the area of basement exclusively used for residence) of which do not exceed 298 square meters and 149 square meters, respectively, in cases where the total amount (referring to the price of a house under the Act on the Public Announcement of Real Estate Values, if such price is available) of standard market prices of such house and land appurtenant thereto does not exceed 600 million won as at the date of commencement of rental of that house and annual increase rate of rental deposit or fee does not exceed 5/100 (; the request for the increased amount of fees, etc. shall not be made within one year after the contract for lease is entered into or agreed fees, etc. are increased, and if a rental business entity mutually converses between rental deposit and monthly fees while claiming the increase of fees, etc., the provisions concerning conversion under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis); provided, a house whose report is submitted to change a short-term private rental housing under subparagraph 6 of Article 2 of the previous Special Act on Private Rental Housing registered under Article 5 of that Act into a long-term private rental housing, etc. after July 11, 2020 shall be excluded; |
| g. | A house that is transferred within one year after the cancellation of registration where the registration of a long-term rental housing under items a and c through e (limited to the houses applicable to Article 5(1) of the Addenda of the Special Act on Private Rental Housing, which is partially amended by Act. No. 17482) is cancelled due to the application for the cancellation of registration within the mandatory rental period of a rental business entity pursuant to Article 6(1)11 of the Special Act on Private Rental Housing (limited to the cases where the relevant house is rented for more than 1/2 of the mandatory rental period under Article 43 of that Act). In such cases, in addition to the requirement for the rental period, the other requirements under the relevant items shall be met; |
| h. | A house that falls under buy-to-rent private housing under subparagraph 3 of Article 2 of the Special Act on Private Rental Housing, which is a short-term private rental housing under subparagraph 6-2 of that Article and satisfies all of the following requirements: |
1) The house shall be rented for at least 6 years;
2) The sum of the standard market prices of the house and the land appurtenant thereto shall be not more than 400 million won (or 200 million won, in the case of an area outside the Seoul Metropolitan Area) as of the commencement date of rental of the relevant house;
3) The rate of increase in rent, etc. compared to the immediately preceding lease contract shall not exceed 5 percent. In such cases, no increase in rent, etc. may be requested within one year from the conclusion of the lease contract or from the agreed increase in rent, etc., and where a rental business operator requests an increase in rent, etc. while converting between the rental deposit and monthly rent, the standards prescribed under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis;
4) The house shall not be a short-term private rental housing unit under subparagraph 6-2 of Article 2 of the Special Act on Private Rental Housing located in an adjustment target area and newly acquired by a member of the household while the household owns 1 or more houses in the Republic of Korea; provided, a house (including a right to acquire a house) acquired before the date of public announcement of an adjustment target area (or, in the case of an adjustment target area already publicly announced, September 13, 2018), or a house for which it is confirmed by supporting documents that a sales contract was concluded and a down payment was paid to acquire such house (including a right to acquire a house), shall not be deemed a house located in an adjustment target area;
| i. | Where there are 2 or more houses that fall under privately constructed rental housing units under subparagraph 2 of Article 2 of the Special Act on Private Rental Housing, which are short-term private rental housing units under subparagraph 6-2 of that Article and satisfy all of the following requirements, such houses: |
1) The site area shall not exceed 298 square meters, and the total floor area of the house (including the area deemed a house under the main clause of Article 154(3) and the area of any basement used exclusively for residential purposes and, in the case of an apartment house, meaning the exclusive area) shall not exceed 149 square meters;
2) The house shall be rented for at least 6 years;
3) The aggregate of the standard market prices of the house and the land appurtenant thereto shall not exceed 600 million won at the time when the lease of two or more houses commenced (or, in the case of a house for which the lease commenced after the date when the lease of two or more houses commenced, at the time when the lease of that house commenced);
4) The rate of increase in rent, etc. compared to the immediately preceding lease contract shall not exceed 5 percent. In such cases, no increase in rent, etc. may be requested within one year from the conclusion of the lease contract or from the agreed increase in rent, etc., and where a rental business operator requests an increase in rent, etc. while converting between the rental deposit and monthly rent, the standards prescribed under Article 44(4) of the Special Act on Private Rental Housing shall apply mutatis mutandis;
| 3. | A national house leased for at least 5 years (hereafter in this Article, referred to as "long-term rental house subject to reduction or exemption"), which are rental houses whose capital gains tax is reduced or exempted under Articles 97, 97-2, and 98 of the Restriction of Special Taxation Act; |
| 4. | A house (hereafter in this Article, referred to as "long-term houses for employees") whose relevant free provision period is at least ten years (hereafter in this Article, referred to as "compulsory free provision period"), which is owned by an employer and provided gratuitously to employees (excluding those in special relations with the relevant employer defined in Article 1-2(1) of the Enforcement Decree of the Framework Act on National Taxes); |
| 5. | A house on which capital gains tax is reduced or exempted under Articles 77, 98-2, 98-3, 98-5 through 98-8, 99, 99-2 and 99-3 of the Restriction of Special Taxation Act; |
| 6. | A national heritage house specified in Article 155(6)1; |
| 7. | An inherited house falling under Article 155(2) (limited to where five years have not elapsed since the date of receiving an inheritance); |
| 8. | A house where three years have not elapsed since the date of acquisition, which was acquired due to an exercise of mortgage or in substitution for credit reimbursement; |
| 8-2. | A house falling under the following items, which is used by a member of one household as a child care center for at least five years (hereafter in this Article, referred to as "compulsory use period") after obtaining the authorization or entrustment specified in the relevant item and being assigned a taxpayer code number under Article 168 of the Act and six months has not elapsed since the date of ceasing its usage as a child care center. In such cases, where the relevant house is converted from those under item a to those under item b or vice versa, the respective use periods shall be aggregated when applying the compulsory use period: |
| a. | A child care center that is operated after obtaining the authorization under Article 13(1) of the Child Care Act; |
| b. | A child care center that is operated with the entrustment from the State or local governments pursuant to Article 24(2) of the Child Care Act; |
| 9. | Deleted; <Feb. 13, 2018>; |
| 10. | The relevant house where one household owns only one house except for houses falling under subparagraphs 1 through 8 and 8-2 (hereafter in this Article, referred to as "general house"); |
| 11. | A house located in an area subject to adjustment, with respect to which the fact of having entered into a sale contract for transfer and having been paid a contract deposit before public announcement date of such area subject to adjustment is confirmed through evidential documents; |
| 12. | It shall be any of the following housing: |
| a. | A house acquired between January 10, 2024 and December 31, 2027, which meets all of the following criteria: |
1) The exclusive area shall be not more than 60 square meters;
2) The acquisition value shall be not more than 600 million won (300 million won in cases of housing located in an area outside the Seoul Metropolitan Area);
3) Its construction shall have been completed during the period from January 10, 2024 to December 31, 2027;
4) It shall not fall under an apartment (excluding an apartment which is an urban residential housing under the Housing Act);
5) It shall meet other requirements prescribed by Decree of the Ministry of Finance and Economy;
| b. | A house acquired between January 10, 2024 and December 31, 2026, which is an unsold housing unit after completion of construction that meets all of the following criteria: |
1) The exclusive area shall be not more than 85 square meters;
2) The acquisition value shall be not more than 700 million won;
3) The relevant house shall be located in an area other than the Seoul Metropolitan area;
4) It shall meet other requirements prescribed by Decree of the Ministry of Finance and Economy;
| c. | A house acquired after January 1, 2026, which satisfies all of the following requirements: |
1) The house shall be located in a population-declining area as defined in subparagraph 12 of Article 2 of the Special Act on Local Autonomy, Decentralization, and Balanced Regional Development (hereinafter referred to as a "population-declining area" in this subparagraph) at the time of acquisition; provided, housing located in the Seoul Metropolitan Area (meaning areas other than border regions as defined in subparagraph 1 of Article 2 of the Special Act on Support for Border Regions) or in a Metropolitan City (excluding Gun located within a Metropolitan City) is excluded;
2) The house shall not be located in the same Si/Gun/Gu as a house owned before acquiring the relevant house (or, where a right to move into a housing association apartment or a pre-sale right is held before acquiring the relevant house, the house supplied through such rights).
3) The sum of the value of the house and the land appurtenant thereto (meaning the standard market price under Article 99(1) of the Act) shall not exceed 400 million won as of the acquisition date of the relevant house (or 900 million won, in the case of a depopulation area outside the Seoul Metropolitan Area);
| d. | A house located in an area of concern for depopulation under subparagraph 12-2 of Article 2 of the Special Act on Local Autonomy Decentralization and Balanced Regional Development (hereafter in this subparagraph referred to as an "area of concern for depopulation"), which is acquired after January 1, 2026 and satisfies all of the following requirements: |
1) It shall be located, at the time of acquisition, in an area of concern for depopulation that is outside the Seoul Metropolitan Area; provided, houses located in a Metropolitan City (excluding Gun in a Metropolitan City) shall be excluded;
2) The house shall not be located in the same Si/Gun/Gu as a house owned before acquiring the relevant house (or, where a right to move into a housing association apartment or a pre-sale right is held before acquiring the relevant house, the house supplied through such rights).
3) The sum of the value of the house and the land appurtenant thereto (meaning the standard market price under Article 99(1) of the Act) shall not exceed 400 million won as of the acquisition date of the relevant house;
| 12-2. | A house whose holding period under Article 95(4) of the Act is at least 2 years (in cases where an association member of an improvement project association implementing a redevelopment project, reconstruction project, or small-scale reconstruction project, etc. provides the existing building and land appurtenant thereto to the association and transfers a newly built house and land appurtenant thereto acquired pursuant to a management and disposal plan, etc., the holding period shall be counted from the date of acquisition of the existing building and land appurtenant thereto) and which falls under any of the following items: |
| a. | A house that is transferred by May 9, 2026; |
| b. | A house affixed to land appurtenant to a house subject to permission under Article 11 of the Act on Report on Real Estate Transactions (hereafter in this subparagraph referred to as "land transaction permission"), which satisfies all of the following requirements: |
1) Land transaction permission concerning the land appurtenant to the relevant house shall have been obtained for the purpose of transferring the relevant house;
2) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
3) It shall be transferred within 4 months from the date of conclusion of the sales contract under 2) (or within 6 months, in the case of a house located in an area under the following table):
┌────────────┬───────────────────────┐
│ 1. Seoul Special Metropolitan City │ Seongdong-gu, Mapo-gu, Gangdong-gu, Yeongdeungpo-gu, Yangcheon-gu, │
│ │ Dongjak-gu, Gwangjin-gu, Jung-gu, Jongno-gu, Seodaemun-gu, │
│ │ Gangseo-gu, Nowon-gu, Seongbuk-gu, Guro-gu, Dongdaemun-gu, │
│ │ Gwanak-gu, Eunpyeong-gu, Jungnang-gu, Geumcheon-gu, Gangbuk-gu, │
│ │ Dobong-gu │
├───────┼───────────────────────┤
│ 2. Gyeonggi-do │ Jangan-gu, Paldal-gu, and Yeongtong-gu of Suwon-si; Sujeong-gu, Jungwon- │
│ │ gu, and Bundang-gu of Seongnam-si; Dongan-gu of Anyang-si; Gwacheon- │
│ │ si; Suji-gu of Yongin-si; Gwangmyeong-si; Hanam-si; and Uiwang-si │
└───────┴───────────────────────┘
| c. | A house affixed to land appurtenant to a house not subject to land transaction permission, which satisfies all of the following requirements: |
1) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
2) It shall be transferred within 4 months from the date of conclusion of the sales contract under 1) [or within 6 months, in the case of a house located in an area under the table in item b3)];
| 13. | A house applicable to Article 154(1), which meets all the requirements under Article 154(1) as if one household owned one house within the Republic of Korea pursuant to Article 155 or the Act on Restriction on Special Cases concerning Taxation or as if one household owned one house. |
| (2) | For the purposes of paragraph (1), the number of houses shall be calculated as follows: <Amended on Feb. 2, 2012; Feb. 21, 2014; Feb. 13, 2018> |
| 1. | Multi-unit house: The number of houses shall be calculated by applying Article 155(15) mutatis mutandis. In such cases, the proviso to Article 155(15) shall apply only where the resident chooses to do so; |
| 2. | Co-inherited house: The number of houses shall be calculated by making them owned by the inheritor having the largest inheritance shares, but if persons having the largest inheritance shares are at least two, any person pursuant to the order of each subparagraph of Article 155(3) shall be deemed to own the relevant co-inherited house; |
| 3. | House which is an inventory asset owned by a real estate sales business operator: It shall be included in a calculation of the number of houses. |
| (3) | Article 97 of the Enforcement Decree of the Restriction of Special Taxation Act shall apply mutatis mutandis to calculation of lease period of the long-term lease housing under paragraph (1)2. In such cases, it shall be deemed to have commenced the lease from the date of making a lease after a registration of business was made and then a registration of rental house was made. <Amended on Feb. 19, 2005> |
| (4) | Even where a general house under paragraph (1)10 is transferred before one household satisfies the requirements for a compulsory lease period, compulsory gratuitous period, or compulsory use period (hereafter in this Article, referred to as "compulsory lease period, etc.") for long-term rental houses, long-term rental houses subject to reduction or exemption, long-term houses for employees, or long-term child care centers (hereafter in this Article, referred to as "long-term rental houses, etc.") under paragraph (1)2 through 4 or 8-2, paragraph (1)10 shall apply as if the relevant rental houses, houses for employees, or child care centers (hereafter in this Article, referred to as "rental houses, etc.") construed as long-term rental houses, etc. under paragraph (1). <Amended on Dec. 31, 2005; Dec. 8, 2011; Feb. 15, 2022; Feb. 28, 2023> |
| (5) | When the causes that one household subjected to paragraph (4) becomes unable to satisfy the requirements for a compulsory lease period, etc. of a long-term rental house, etc. (including where the period failing to lease the number of compulsory rental houses under each item of paragraph (1)2 and paragraph (1)3, passes six months) have occurred, the amount calculated in accordance with the formula under subparagraph 1 shall be reported and paid as capital gains tax within two months from the last day of the month to which the date of occurrence of such causes belongs. In such cases, where falling under the special cases of calculation of the compulsory lease period, etc. in subparagraph 2, the relevant provisions thereof shall govern: <Amended on Feb. 2, 2012; Feb. 15, 2013; Feb. 13, 2018; Feb. 11, 2020; Oct. 7, 2020; Feb. 15, 2022; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | Calculation formula for the capital gains tax to be paid: |
Amount of tax that should have been paid under the tax rate specified in Article 104 of the Act, where not regarding the relevant rental house, etc. as the long-term rental house, etc. under paragraph (1)2 through 4 and 8-2 at the time of transfer of the general house - Amount of tax that has been paid under the tax rate specified in Article 104 of the Act by applying paragraph (4) at the time of transfer of the general house;
| 2. | Special cases concerning calculation of compulsory lease period, etc.: |
| a. | Where a household becomes unable to meet the requirements such as the compulsory lease period, etc. or where he or she is unable to lease the number of units required to be leased due to the unavoidable causes prescribed by Decree of the Ministry of Finance and Economy, such as expropriation under the Act on Acquisition of and Compensation for Land for Public Works Projects, it shall be deemed to continuously lease/use the relevant rental house, etc. or use it without paying rent; |
| b. | Where there is a ground for the housing redevelopment project, housing reconstruction project or small-scale reconstruction project, in order to calculate the period not leasing the units required to be leased, the period from six months before the date of authorizing management and disposal plan, etc. of the relevant house until six months after the date of completion of such house shall not be included; |
| c. | Where there is a ground for remodeling under Article 2 of the Housing Act, in order to calculate the period not leasing the units required to be leased, the period from six months before the date of approving a project plan under Article 15 of that Act or the date of permitting remodeling under Article 66 of that Act until six months after the date of completion of such house shall not be included; |
| d. | Where the registration of a long-term rental housing under paragraph (1)2a and c through e (limited to the houses applicable to Article 5(1) of the Addenda of the Special Act on Private Rental Housing, which is partially amended by Act. No. 17482) is cancelled due to the application for the cancellation of registration within the mandatory rental period of a rental business entity pursuant to Article 6(1)11 of the Special Act on Private Rental Housing (limited to the cases where the relevant house is rented for more than 1/2 of the mandatory rental period under Article 43 of that Act) and the requirement for the rental period under the relevant item, the relevant requirements shall be deemed to be met on the date when the registration is cancelled; |
| e. | When a house which is newly acquired due to the destruction of the original long-term rental house rented as a result of a redevelopment project, reconstruction project or small-scale reconstruction project, etc. or is newly acquired as a result of remodeling under Article 2 of the Housing Act falls under any of the following cases, and thus, it fails to meet the relevant requirements for the rental period, the relevant requirements for the rental period shall be deemed to be met on the date when the registration of the original house (referring to the house before the new acquisition due to the reconstruction, etc.; hereafter in this item, the same shall apply); provided, where the period not leasing the units required to be leased (referring to the period calculated pursuant to the provisions, with the exception of the subparagraphs, of this paragraph) exceeds six months, the requirements for the rental period shall not be deemed to not been met: |
1) For a newly acquired house, where an application for registration (including cases where the changes in registered matters are reported to add houses to be rented) as a rental business entity is made under Article 5 of the previous Special Act on Private Rental Housing after July 11, 2020 for buy-to-rent private housing whose rental property is an apartment among long-term private rental housing under subparagraph 5 of Article 2 of the previous Special Act on Private Rental Housing or short-term private rental housing under subparagraphs 6 of Article 2 of the previous Special Act on Private Rental Housing;
2) Where a newly acquired house is an apartment (where the original house is registered as a short-term private rental housing, referring to all houses) and the application for the registration of a rental business entity under Article 5 of the Special Act on Private Rental Housing is not made.
| (6) | In applying paragraphs (1) through (5), where at least two houses are transferred on the same day, Article 154(9) shall apply mutatis mutandis to the said determination methods. |
| (7) | Any person who intends to obtain an application of paragraphs (1)2, 3, and 8-2 and (4) shall submit, to the head of the competent tax office having jurisdiction over the place for tax payment, a written return on tax base for the taxable year whereto belongs the date of transferring the relevant rental houses, etc. or general houses and a written application prescribed by Decree of the Ministry of Finance and Economy together with the following documents: <Amended on Feb. 19, 2005; Dec. 31, 2005; June 12, 2006; Feb. 29 2008; Dec. 8, 2011; Dec. 28, 2015; Feb. 11, 2020; Feb. 15, 2022; Dec. 30, 2025> |
| 1. | Deleted; <Feb. 17, 2021> |
| 2. | A copy of the lease contract; |
| 3. | A certified copy of a resident registration or a copy of resident registration certificate of the lessee. In such cases, it shall be substituted with submitting the details of inspection on move-in household inspected pursuant to Article 29(1) of the Resident Registration Act; |
| 4. | A copy of entrustment contract certificates in cases of national or public child care centers; |
| 5. | Other documents prescribed by Decree of the Ministry of Finance and Economy. |
| (8) | Upon receiving an application filed pursuant to paragraph (7), the head of the competent tax office having jurisdiction over the place for tax payment shall confirm the following matters; provided, if an applicant fails to consent to the confirmation of the documents under subparagraph 2, the applicant shall submit such documents: <Added on Jun. 12, 2006; Dec. 31, 2008; May 4, 2010; Feb. 13, 2018; Feb. 17, 2021; Sep. 26, 2023> |
| 1. | A registration certificate of the rental house, etc. or a registration certificate of the house and building thereof; |
| 2. | A certificate of registration as rental business entity under Article 4(5) of the Enforcement Decree of the Special Act on Private Rental Housing or a certificate of authorization of child care center under Article 13 of the Child Care Act. |
| (9) | Notwithstanding paragraph (1), where a person having at least one house comes to own at least three houses for one household prescribed by Presidential Decree under paragraph (1) as of the date of marriage by marrying a person having at least one house and transfers the relevant house within five years from the date of the marriage, the number of houses owned by the one household concerned shall be calculated by deducting the number of houses owned by the transferor’s spouse (referring to the number of houses under paragraph (1)) as of the date of such transfer; provided, this shall not apply to any houses to be transferring after the date of acquisition of a new house where the house was acquired within five years from the date of marriage. <Added on Feb. 2, 2012> |
| (10) | The verification procedure for houses falling under paragraph (1)12 and 12-2 and other necessary matters shall be prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 29, 2024; Dec. 30, 2025; Feb. 27, 2026> |
[This Article Added on Dec. 30, 2003]
| Article 167-4 (Scope of houses excluded from at least three houses, right to acquire house or pre-completion apartment ownership for one household) |
| (1) | Deleted. <Feb. 3, 2017> |
| (2) | In calculating the number of houses owned by one household (including land attached to the house; hereafter the same shall apply in this Article) and the occupancy rights of association members or the right of sale in lots under Article 104(7)4 of the Act, the following houses, occupancy rights or right of sale by union members shall not be included: <Amended on Feb. 29, 2008; Feb. 18, 2010; Feb. 21, 2014; Feb. 13, 2018; Feb. 17, 2021; Feb. 29, 2024> |
| 1. | Houses, the right to acquire a house as an association member, or the pre-completion apartment ownership located outside the Seoul Metropolitan area Metropolitan Cities and the Special Self-Governing City (excluding areas falling under a Gun belonging to a Metropolitan City, an Eup or Myeon under Article 3(3) and (4) of the Local Autonomy, or an Eup or Myeon under Article 6(3) of the Special Act on the Establishment of Sejong Special Self-Governing City), of which the standard market price or the value of the right to acquire a house as an association member (referring to the price of previous houses under Article 74(1)5 of the Act on the Improvement of Urban Areas and Residential Environments) or the value of the pre-completion apartment ownership [referring to supply prices under the contract for supply of houses (excluding the prices on the option items)] does not exceed 300 million won at the time of transfer of the relevant house or other houses; |
| 2. | A cultural property house falling under Article 167-3(1)12; |
| (3) | "Long-term rental houses, etc. prescribed by Presidential Decree" in the proviso to Article 104(7)4 of the Act means a house falling under any of the following subparagraphs which is one owned by any one household whose total number of domestic houses, rights to acquire a house as an association member, or pre-completion apartment ownerships is at least three: <Amended on Feb. 29, 2008; Feb. 18, 2010; Feb. 21, 2014; Feb. 13, 2018; Oct. 23, 2018; Feb. 11, 2020; Feb. 17, 2021; May 31, 2022; Feb. 28, 2023; Feb. 29, 2024; Feb. 28, 2025; Feb. 27, 2026> |
| 1. | Houses provided for in paragraph (2); |
| 2. | Houses falling under any of Article 167-3(1)2 through 8 and 8-2; |
| 3. | Deleted.;<Feb. 13, 2018> |
| 4. | Where one household owns only one house with the exception of houses falling under subparagraphs 1 and 2, the relevant house; |
| 5. | A house located in an area subject to adjustment, with respect to which the fact of having entered into a sale contract for transfer and having been paid a contract deposit before public announcement date of such area subject to adjustment is confirmed through evidential documents; |
| 6. | A cultural property house falling under Article 167-3(1)12; |
| 6-2. | A house whose holding period under Article 95(4) of the Act is at least 2 years (in cases where an association member of an improvement project association implementing a redevelopment project, reconstruction project, or small-scale reconstruction project, etc. provides the existing building and land appurtenant thereto to the association and transfers a newly built house and land appurtenant thereto acquired pursuant to a management and disposal plan, etc., the holding period shall be counted from the date of acquisition of the existing building and land appurtenant thereto) and which falls under any of the following items: |
| a. | A house that is transferred by May 9, 2026; |
| b. | A house affixed to land appurtenant to a house subject to permission under Article 11 of the Act on Report on Real Estate Transactions (hereafter in this subparagraph referred to as "land transaction permission"), which satisfies all of the following requirements: |
1) Land transaction permission concerning the land appurtenant to the relevant house shall have been obtained for the purpose of transferring the relevant house;
2) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
3) It shall be transferred within 4 months from the date of conclusion of the sales contract under 2) (or within 6 months, in the case of a house located in an area under the following table):
┌────────────┬───────────────────────┐
│ 1. Seoul Special Metropolitan City │ Seongdong-gu, Mapo-gu, Gangdong-gu, Yeongdeungpo-gu, Yangcheon-gu, │
│ │ Dongjak-gu, Gwangjin-gu, Jung-gu, Jongno-gu, Seodaemun-gu, │
│ │ Gangseo-gu, Nowon-gu, Seongbuk-gu, Guro-gu, Dongdaemun-gu, │
│ │ Gwanak-gu, Eunpyeong-gu, Jungnang-gu, Geumcheon-gu, Gangbuk-gu, │
│ │ Dobong-gu │
├───────┼───────────────────────┤
│ 2. Gyeonggi-do │ Jangan-gu, Paldal-gu, and Yeongtong-gu of Suwon-si; Sujeong-gu, Jungwon- │
│ │ gu, and Bundang-gu of Seongnam-si; Dongan-gu of Anyang-si; Gwacheon- │
│ │ si; Suji-gu of Yongin-si; Gwangmyeong-si; Hanam-si; and Uiwang-si │
└───────┴───────────────────────┘
| c. | A house affixed to land appurtenant to a house not subject to land transaction permission, which satisfies all of the following requirements: |
1) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
2) It shall be transferred within 4 months from the date of conclusion of the sales contract under 1) [or within 6 months, in the case of a house located in an area under the table in item b3)];
| 7. | A house applicable to Article 154(1), which meets all the requirements under Article 154(1) as if one household owned one house within the Republic of Korea pursuant to Articles 155, 156-2 or 156-3 or the Act on Restriction on Special Cases concerning Taxation or as if one household owned one house. |
| (4) | In applying paragraphs (2) and (3), paragraph (8) through (10) shall apply mutatis mutandis. <Amended on Feb. 13, 2018; Feb. 29, 2024> |
| (5) | Where the aggregate of houses, rights to acquire a house as an association member or pre-completion apartment ownership under Article 104(7)4 of the Act, owned by a household, becomes at least three on the date of marriage, where a person having at least one house, one right to acquire a house as an association member or one pre-completion apartment ownership marries a person having at least one house, one right to acquire a house as an association member or one pre-completion apartment ownership and the household transfers the house within five years from the date of marriage, the number of houses one house, right to acquire a house as an association member or pre-completion apartment ownership owned by the household shall be calculated by deducting the number of houses and one house, a right to acquire a house as an association member or pre-completion apartment ownership under paragraph (2), owned by the transferor’s spouse as of the date of such transfer; provided, this shall not apply to any houses to be transferred after the date of acquisition of a new house, a right to acquire a house or pre-completion apartment ownership where the house or the right to acquire a house or pre-completion apartment ownership was acquired within five years from the date of marriage. <Added on Feb. 2, 2012; Feb. 21, 2014; Feb. 13, 2018; Feb. 17, 2021> |
[This Article Added on Dec. 31, 2005]
[Title Amended on Feb. 17, 2021]
[Previous Article 167-4 moved to Article 167-8 <Dec. 31, 2005>]
| Article 167-5 (Scope of land appurtenant to houses owned for short period) |
"Land prescribed by Presidential Decree" in Article 104(1)2 of the Act means land within an area calculated by multiplying the area on which the relevant house is affixed by the multiple classified by region under the following subparagraphs; in such cases, in applying the use district under the relevant subparagraph, where all or part of the land appurtenant to a house is purchased by consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land for Public Works Projects, or otherwise expropriated under other statutes (limited to cases where the relevant land is acquired before the date of public notice of project approval), the use district of the relevant land as of the day before the date of public notice of project approval shall apply: <Amended on Feb. 11, 2020; Nov. 28, 2025>
| 1. | The land within an urban area under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act: The following multiples: |
| a. | Land in a residential area, commercial area, and industrial area among land in the Seoul Metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter in this subparagraph, referred to as the "Seoul Metropolitan area"): Three times; |
| b. | Land in a green area among the land in the Seoul Metropolitan area: Five times; |
| c. | Land outside of the Seoul Metropolitan area: Five times; |
| 2. | Land in any other area: Ten times. |
[This Article Wholly Amended on Feb. 17, 2016]
| Article 167-6 Deleted. <Feb. 17, 2021> |
| Article 167-7 (Scope of stocks of corporation excessively owning land for non-business use) |
"Assets prescribed by Presidential Decree" in Article 104(1)9 of the Act, means stocks, etc. falling under Article 94(1)4c or d of the Act of a corporation whose ratio of the value of land for non-business use under Article 55-2(2) of the Corporate Tax Act to the total assets of the relevant corporation is at least 50/100. <Amended on Feb. 15, 2013; Feb. 3, 2017>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 167-8 (Scope of majority stockholders and small and medium enterprises) |
| (1) | "Majority stockholders prescribed by Presidential Decree" in Article 104(1)11a of the Act, means any the following persons (hereafter in this Chapter, referred to as "majority stockholders"): |
| 1. | Majority stockholders of a listed corporation; |
| 2. | Stockholders of a listed corporation falling under any of the following items: |
| a. | A single shareholder and other shareholders of a non-stock-listed corporation, where the aggregate shareholding ratio of such shareholder and other shareholders is at least 4 percent as of the end of the business year immediately preceding the business year in which stocks, etc. are transferred. In such cases, where such ratio is less than 4 percent as of the end of the immediately preceding business year but reaches at least 4 percent thereafter through the acquisition of stocks, etc., a single shareholder and other shareholders of a non-stock-listed corporation shall be included from the date of such acquisition; |
| b. | A single shareholder and other shareholders of a non-stock-listed corporation, where the aggregate market value of the stocks, etc. of the relevant corporation held by such shareholder and other shareholders is at least 1 billion won as of the end of the business year immediately preceding the business year in which such stocks, etc. are transferred (4 billion won in the case of stocks, etc. of a venture enterprise under Article 2(1) of the Act on Special Measures for the Promotion of Venture Businesses that are traded pursuant to Article 178(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act). |
| (2) | In calculating the total market value under Paragraph 1(2), the market value shall be determined based on the appraised value under Article 165(4). |
| (3) | Where a stockholder of a merged corporation receives new stocks of the merging corporation upon a merger and transfers the stocks during the business year in which the merger is registered, the scope of majority stockholders for the purpose of applying paragraphs (1)2 and (2) shall be determined according to the status of stockholding as at the registration date of the merger of the merged corporation. |
| (4) | Where a stockholder of a divided corporation receives new stocks of the newly established corporation upon a merger and transfers the stocks during the business year in which the establishment is registered or transfers stocks of the divided corporation on or after the registration date of the division during the business year in which the division is registered, the scope of majority stockholders for the purpose of applying paragraphs (1)2 and (2) shall be determined according to the status of stockholding as at the registration date of the division of the corporation prior to the division. |
| (5) | Where a stockholder lends stocks, etc. on condition that the same quantity of such stocks, etc. of the same class shall be returned, such stocks, etc. shall be deemed the lender's stocks, etc. during the period from the date the stocks, etc. are lent until the date they are returned, in applying paragraphs (1)2 and (2). |
| (6) | Where a resident acquires stocks, etc. of a corporation through a privately placed fund under the Financial Investment Services and Capital Markets Act, such stocks, etc. (limited to those calculated in proportion to the ratio of investment of the privately placed fund) shall be deemed owned by the resident, in applying paragraphs (1)2 and (2). |
[This Article Added on Dec. 31, 2024]
| Article 167-9 (Flexible tax rate of capital gains tax on derivatives, etc.) |
The tax rate of capital gains tax on derivatives, etc. specified in Article 104(1)13 of the Act shall be 10/100 pursuant to Article 104(6) of the Act.
[This Article Added on Dec. 31, 2024]
| Article 167-10 (Scope of houses constituting one of two houses for one household subject to imposition of heavy taxation of capital gains tax) |
| (1) | "A house constituting one of two houses per household, prescribed by Presidential Decree" in Article 104(7)1 of the Act means a house which does not fall under any of the following subparagraphs and is owned by one household owning two houses (not including house falling under subparagraph 1 or 12 when calculating the number of houses) in the Republic of Korea: <Amended on Oct. 23, 2018; Feb. 11, 2020; Feb. 17, 2021; May 31, 2022; Feb. 28, 2023; Feb. 29 2024; Feb. 28, 2025; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | A house which is located in an area other than Seoul Metropolitan Area and metropolitan cities and the Special Self-Governing City (excluding Guns belonging to a metropolitan city, Eups and Myeons under Article 3(3) and (4) of the Local Autonomy Act, and Eups and Myeons under Article 6(3) of the Special Act on the Establishment of Sejong Special Self-Governing City) in cases where the total amount of the standard market prices of such house and land appurtenant thereto do not exceed 300 million won as at the date of transferring that house or any other house; |
| 2. | A house falling under any of Article 167-3(1)2 through 8, and 8-2; |
| 3. | A house which comes to constitute one of two houses per household because any member of the household acquires one house (limited to a house which is located in the same Si/Gun as the seat of the school, the seat of the workplace, or the place of treating or recuperating a disease, and the total amount of the standard market price under Article 99 of the Act of which does not exceed 300 million won) for the purpose of moving the residence to other Si (including the Special Metropolitan City, Metropolitan Cities, the Special Self-Governing City, and an administrative city established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; hereinafter the same shall apply in this subparagraph) or Gun due to his or her school attendance, working-related circumstances, disease recuperation, or other inevitable ground prescribed by Decree of the Ministry of Finance and Economy; |
| 4. | A house located outside the Seoul Metropolitan Area under Article 155(8); |
| 5. | Deleted; <Feb. 28, 2023> |
| 6. | Deleted; <Feb. 28, 2023> |
| 7. | A house concerning which a lawsuit is underway or which is acquired as a result of a law suit (limited to case where three years have not passed since the final and decisive judgment on a lawsuit is rendered); |
| 8. | Deleted; <Feb. 28, 2023> |
| 9. | A house whose standard market price under Article 99 of the Act is not more than three hundred million won; provided, the following houses are excluded: Houses (excluding houses transferred to the relevant project implementer in case of a residential environment improvement project) located in an area designated and publicly announced as an improvement zone under the Act on the Improvement of Urban Areas and Residential Environments (including a project site of a rebuilding association to which establishment permission is granted pursuant to the previous Housing Construction Promotion Act) or in a project zone under the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement; |
| 10. | A house in case one household owns that one house alone, excluding houses falling under any of subparagraphs 1 through 7; |
| 11. | A house located in an area subject to adjustment, with respect to which the fact of having entered into a sale contract for transfer and having been paid a contract deposit before public announcement date of such area subject to adjustment is confirmed through evidential documents; |
| 12. | A cultural property house falling under Article 167-3(1)12; |
| 12-2. | A house whose holding period under Article 95(4) of the Act is at least 2 years (in cases where an association member of an improvement project association implementing a redevelopment project, reconstruction project, or small-scale reconstruction project, etc. provides the existing building and land appurtenant thereto to the association and transfers a newly built house and land appurtenant thereto acquired pursuant to a management and disposal plan, etc., the holding period shall be counted from the date of acquisition of the existing building and land appurtenant thereto) and which falls under any of the following items: |
| a. | A house that is transferred by May 9, 2026; |
| b. | A house affixed to land appurtenant to a house subject to permission under Article 11 of the Act on Report on Real Estate Transactions (hereafter in this subparagraph referred to as "land transaction permission"), which satisfies all of the following requirements: |
1) Land transaction permission concerning the land appurtenant to the relevant house shall have been obtained for the purpose of transferring the relevant house;
2) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
3) It shall be transferred within 4 months from the date of conclusion of the sales contract under 2) (or within 6 months, in the case of a house located in an area under the following table):
┌────────────┬───────────────────────┐
│ 1. Seoul Special Metropolitan City │ Seongdong-gu, Mapo-gu, Gangdong-gu, Yeongdeungpo-gu, Yangcheon-gu, │
│ │ Dongjak-gu, Gwangjin-gu, Jung-gu, Jongno-gu, Seodaemun-gu, │
│ │ Gangseo-gu, Nowon-gu, Seongbuk-gu, Guro-gu, Dongdaemun-gu, │
│ │ Gwanak-gu, Eunpyeong-gu, Jungnang-gu, Geumcheon-gu, Gangbuk-gu, │
│ │ Dobong-gu │
├───────┼───────────────────────┤
│ 2. Gyeonggi-do │ Jangan-gu, Paldal-gu, and Yeongtong-gu of Suwon-si; Sujeong-gu, Jungwon- │
│ │ gu, and Bundang-gu of Seongnam-si; Dongan-gu of Anyang-si; Gwacheon- │
│ │ si; Suji-gu of Yongin-si; Gwangmyeong-si; Hanam-si; and Uiwang-si │
└───────┴───────────────────────┘
| c. | A house affixed to land appurtenant to a house not subject to land transaction permission, which satisfies all of the following requirements: |
1) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
2) It shall be transferred within 4 months from the date of conclusion of the sales contract under 1) [or within 6 months, in the case of a house located in an area under the table in item b3)];
| 13. | Deleted; <Feb. 28, 2023> |
| 14. | Deleted; <Feb. 28, 2023> |
| 15. | A house applicable to Article 154(1), which meets all the requirements under Article 154(1) as if one household owned one house within the Republic of Korea pursuant to Article 155 or the Act on Restriction on Special Cases concerning Taxation or as if one household owned one house. |
| (2) | In applying paragraph (1), Article 167-3(2) through (8) and (10) shall apply mutatis mutandis. <Amended on Feb. 29, 2024> |
[This Article Added on Feb. 13, 2018]
| Article 167-11 (Scope of houses excluded from two houses for one household, rights to buy house as association members or pre-completion apartment ownership) |
| (1) | "Long-term rental houses, etc. prescribed by Presidential Decree" in the proviso of Article 104(7)2 of the Act means a house falling under any of following subparagraphs, which are owned by one household which owns one house and one Right to buy a house as an association member or pre-completion apartment ownership in the Republic of Korea: <Amended on Dec. 23, 2018; Feb. 11, 2020; Feb. 17, 2021; May 31, 2022; Feb. 28, 2023; Feb. 29, 2024; Feb. 28, 2025; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Deleted; <Feb. 28, 2023> |
| 2. | A house falling under any of Article 167-3(1)2 through 8, and 8-2; |
| 3. | A house falling under paragraph (2); |
| 4. | Where one household owns one house and one right to acquire a house as an association member or one house and one pre-completion apartment ownership by acquiring one house (limited to a house which is located in the same Si/Gun as the seat of the school, the seat of the workplace, or the place of treating or recuperating a disease, and the total amount of the standard market price under Article 99 of the Act of which does not exceed 300 million won) because any member of one household acquires one house for the purpose of moving the residence to another Si (including the Special Metropolitan City, Metropolitan Cities, the Special Self-Governing City, and an administrative city established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; hereinafter the same shall apply in this subparagraph) or Gun due to his or her school attendance, working-related circumstances, disease recuperation, or other inevitable ground prescribed by Decree of the Ministry of Finance and Economy, the relevant house (limited to cases where the household has resided in the house for more than one year after acquiring it and three years has not elapsed from the date when the relevant ground is resolved); |
| 5. | A house located outside the Seoul Metropolitan Area under Article 155(8); |
| 6. | Deleted; <Feb. 28, 2023> |
| 7. | Deleted; <Feb. 28, 2023> |
| 8. | A house concerning which a lawsuit is underway or which is acquired as a result of a law suit (limited to case where three years have not passed since the final and decisive judgment on a lawsuit is rendered); |
| 9. | A house whose standard market price under Article 99 of the Act is not more than three hundred million won; provided, the following houses are excluded: Houses (excluding houses transferred to the relevant project implementer in case of a residential environment improvement project) located in an area designated and publicly announced as an improvement zone under the Act on the Improvement of Urban Areas and Residential Environments (including a project site of a rebuilding association to which establishment permission is granted pursuant to the previous Housing Construction Promotion Act) or in a project zone under the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement; |
| 10. | A house located in an area subject to adjustment, with respect to which the fact of having entered into a sale contract for transfer and having been paid a contract deposit before the public announcement date of such area subject to adjustment is confirmed through evidential documents; |
| 11. | A cultural property house falling under Article 167-3(1)12; |
| 12. | A house whose holding period under Article 95(4) of the Act is at least 2 years (in cases where an association member of an improvement project association implementing a redevelopment project, reconstruction project, or small-scale reconstruction project, etc. provides the existing building and land appurtenant thereto to the association and transfers a newly built house and land appurtenant thereto acquired pursuant to a management and disposal plan, etc., the holding period shall be counted from the date of acquisition of the existing building and land appurtenant thereto) and which falls under any of the following items: |
| a. | A house that is transferred by May 9, 2026; |
| b. | A house affixed to land appurtenant to a house subject to permission under Article 11 of the Act on Report on Real Estate Transactions (hereafter in this subparagraph referred to as "land transaction permission"), which satisfies all of the following requirements: |
1) Land transaction permission concerning the land appurtenant to the relevant house shall have been obtained for the purpose of transferring the relevant house;
2) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
3) It shall be transferred within 4 months from the date of conclusion of the sales contract under 2) (or within 6 months, in the case of a house located in an area under the following table):
┌────────────┬───────────────────────┐
│ 1. Seoul Special Metropolitan City │ Seongdong-gu, Mapo-gu, Gangdong-gu, Yeongdeungpo-gu, Yangcheon-gu, │
│ │ Dongjak-gu, Gwangjin-gu, Jung-gu, Jongno-gu, Seodaemun-gu, │
│ │ Gangseo-gu, Nowon-gu, Seongbuk-gu, Guro-gu, Dongdaemun-gu, │
│ │ Gwanak-gu, Eunpyeong-gu, Jungnang-gu, Geumcheon-gu, Gangbuk-gu, │
│ │ Dobong-gu │
├───────┼───────────────────────┤
│ 2. Gyeonggi-do │ Jangan-gu, Paldal-gu, and Yeongtong-gu of Suwon-si; Sujeong-gu, Jungwon- │
│ │ gu, and Bundang-gu of Seongnam-si; Dongan-gu of Anyang-si; Gwacheon- │
│ │ si; Suji-gu of Yongin-si; Gwangmyeong-si; Hanam-si; and Uiwang-si │
└───────┴───────────────────────┘
| c. | A house affixed to land appurtenant to a house not subject to land transaction permission, which satisfies all of the following requirements: |
1) It shall be confirmed by evidentiary documents that a sales contract was concluded and the down payment was received by May 9, 2026 in order to transfer the relevant house;
2) It shall be transferred within 4 months from the date of conclusion of the sales contract under 1) [or within 6 months, in the case of a house located in an area under the table in item b3)];
| 13. | A house applicable to Article 154(1), which meets all the requirements under Article 154(1) as if one household owned one house within the Republic of Korea pursuant to Article 155 or the Act on Restriction on Special Cases concerning Taxation or as if one household owned one house. |
| (2) | In calculating the number of houses possessed by one household (including land attached to the house; hereafter the same shall apply in this Article) and the occupancy rights of association members or the right of sale in lots under Article 104(7)2 of the Act, the following houses, occupancy rights or right of sale by union members shall not be included: <Amended on Feb. 17, 2021; Feb. 29, 2024> |
| 1. | Houses, the right to acquire a house as an association member, or the pre-completion apartment ownership located outside the Seoul Metropolitan area Metropolitan Cities and the Special Self-Governing City (excluding areas falling under a Gun belonging to a Metropolitan City, an Eup or Myeon under Article 3(3) and (4) of the Local Autonomy, or an Eup or Myeon under Article 6(3) of the Special Act on the Establishment of Sejong Special Self-Governing City), of which the standard market price or the value of the right to acquire a house as an association member (referring to the price of previous houses under Article 74(1)5 of the Act on the Improvement of Urban Areas and Residential Environments) or the value of the pre-completion apartment ownership [referring to supply prices under the contract for supply of houses (excluding the prices on the option items)] does not exceed 300 million won at the time of transfer of the relevant house or other houses; |
| 2. | A cultural property house falling under Article 167-3(1)12; |
| (3) | In applying paragraphs (1) and (2), Article 167-3(2) through (8) and (10) shall apply mutatis mutandis. <Amended on Feb. 29, 2024> |
[This Article Added on Feb. 13, 2018]
[Title Amended on Feb. 17, 2021]
| Article 168 (Scope of assets excluding unregistered transfer) |
| (1) | "Assets prescribed by Presidential Decree" in the proviso to Article 104(3) of the Act, means the following: <Amended on Dec. 31, 1998; Dec. 31, 1999; Dec. 30, 2002; Feb. 19, 2005; Dec. 31, 2005; Feb. 9, 2006; Feb. 18, 2010; Feb. 21, 2014; Feb. 18, 2020> |
| 1. | Assets acquired under a long-term installment, whose registration for acquisition of such assets at the time of transfer is impracticable under the terms of such contract; |
| 2. | Assets whose registration for acquisition of such assets at the time of transfer is impracticable under the provisions of Acts or a decision of the court; |
| 3. | Land stipulated in Article 89(1)2 of the Act, and Articles 69(1) and 70(1) of the Restriction of Special Taxation Act; |
| 4. | A house falling under any item of Article 89(1)3 of the Act, which is an asset unregistrable because no building permit under the Building Act has been obtained; |
| 5. | Deleted; <Feb. 13, 2018> |
| 6. | Land transferred without registration of its acquisition because an urban development project under the Urban Development Act is not completed; |
| 7. | Land transferred before the public notification of disposition of land substitution for land compartmentalization, allotted by the authorities in recompense for development outlay which a constructor has acquired for the price for construction services under the Urban Development Act. |
| (2) | In applying Article 104(1)1 of the Act, if any amount of tax paid or payable by a majority stockholder is included in the calculated tax on capital gains from stocks, etc. under Article 94(1)4c of the Act, the calculated tax on capital gains shall determined with the amount computed by subtracting such tax paid or payable. <Added on Dec. 31, 2024> |
[Title Amended on Dec. 29, 2000]
| Article 168-2 Deleted. <Jun. 8, 2009> |
| Article 168-3 (Criteria for designation of designated areas) |
| (1) | "Designated area" in Article 104-2(1) of the Act means from among any of the following areas, an area for which the Minister of Land, Infrastructure and Transport makes a request for a designation (including where the head of a related central administrative agency makes a request through the Minister of Land, Infrastructure and Transport), as he or she determines that there exists a possibility for continuing a rise of real estate prices in the relevant area, or concerns over spreading to other areas by taking into consideration national real estate price trends and the relevant area's characteristics, etc. and which is designated by the Minister of Finance and Economy by undergoing deliberation by the Deliberative Committee on Stabilization of Real Estate Prices under Article 168-4: <Amended Feb. 29, 2008; Aug. 30, 2011; Mar. 23, 2013; Feb. 13, 2018; Jan. 5, 2021; Dec. 30, 2025> |
| 1. | Any of the following areas wherein the increasing ratio of the house transaction price for immediately preceding month of the month whereto the designation day belongs (hereafter referred to as "immediately preceding month" in this paragraph) is higher than 130/100 of the increasing ratio of the national consumer price: |
| a. | The area wherein the increasing ratio of the monthly-average house transaction price for two months retrospectively from the immediately preceding month is higher than 130/100 of the increasing ratio of national transaction price of houses; |
| b. | The area wherein the increasing ratio of the annual average house transaction price for one year retrospectively from the immediately preceding month is higher than the annual average national transaction price of houses for three years retrospectively from the immediately preceding month; |
| 2. | Any of the following areas wherein the increasing ratio of land price for the immediately preceding month is higher than 130/100 of the increasing ratio of national consumer price: |
| a. | The area wherein the increasing ratio of monthly average land price for two months retrospectively from the immediately preceding month is higher than 130/100 of the increasing ratio of national land price; |
| b. | The area wherein the increasing ratio of annual average land price for one year retrospectively from the immediately preceding month is higher than the increasing ratio of annual average national land price for three years retrospectively from the immediately preceding month; |
| 3. | The area equipped with all the following requirements, wherein a development project defined in subparagraph 2 of Article 2 of the Restitution of Development Gains Act (including a development project whereon development allotment money is not levied) or a house reconstruction project (hereinafter referred to as "development project, etc.") is in progress (including where the head of a central administrative agency or the head of a local government has announced the relevant development project, etc.): |
| a. | The increasing ratio of house transaction price for immediately preceding month shall be higher than 130/100 of the increasing ratio of national consumer price; |
| b. | The increasing ratio of house transaction price for the immediately preceding month shall be higher than 130/100 of the increasing ratio of national house trade price; |
| 4. | Any of the following areas which is a district for housing site development under the Housing Site Development Promotion Act, a scheduled area or peripheral area of a project for constructing a administration-centered complex city under the Special Act on the Construction of Administrative City in Yeongi-Gongju Area for Follow-up Measures for New Administrative Capital, or any other area scheduled for promoting large-scale development projects prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "scheduled districts, etc." in this subparagraph). In such cases, where the administrative agency announces the proposed place for scheduled districts, etc., the relevant proposed place shall be deemed scheduled districts, etc.: |
| a. | The area where the increasing ratio of house transaction price for the immediately preceding month is higher than the increasing ratio of national consumer price; |
| b. | The area where the increasing ratio of land price for the immediately preceding month is higher than the increasing ratio of national consumer prices. |
| (2) | Where the Minister of Finance and Economy deems necessary, he or she may refer the matters for designation of designated areas to the Deliberative Committee on Stabilization of Real Estate Prices without any request from the Minister of Land, Infrastructure and Transport, notwithstanding paragraph (1). <Amended on Feb. 29, 2008; Mar. 23, 2013; Dec. 30, 2025> |
| (3) | "Real estate prescribed by Presidential Decree" in Article 104-2(2) of the Act, means real estate falling under any of the following subparagraphs: <Amended on Feb. 18, 2010; Feb. 15, 2013; Feb. 13, 2018> |
| 1. | Deleted; <Feb. 13, 2018>; |
| 2. | Cases of designated areas under paragraph (1)2: Real estate other than houses (including their ancillary land); |
| 3. | Cases of designated areas under paragraph (1)4: Real estate other than houses (including their ancillary land); |
| 4. | Deleted. <Feb. 13, 2018> |
| (4) | When the Minister of Finance and Economy has designated a designated area under paragraph (1), he or she shall announce publicly the relevant details without delay, and notify the Commissioner of the National Tax Service of the details of public announcement. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| (5) | When the Commissioner of the National Tax Service has received the notice under paragraph (4), he or she shall take measures so as to enable perusal of such details by the general public. |
| (6) | Designation of designated areas shall be effective from the date of public announcement of the designation of designated areas under paragraph (4). |
| (7) | Where there exists a request to revoke designation by the Minister of Land, Infrastructure and Transport as he or she admits that the designation reasons are revoked, such as a stabilization of real property price in the relevant area, after a designation of a designated area under paragraph (1) (including where the head of a related central administrative agency requests through the Minister of Land, Infrastructure and Transport), the Minister of Finance and Economy shall revoke the designated area after undergoing deliberation by the Deliberative Committee on Stabilization of Real Estate Prices. <Amended on Feb. 29, 2008; Mar. 23, 2013; Dec. 30, 2025> |
| (8) | Paragraphs (2) and (4) through (6) shall apply mutatis mutandis to a revocation of designation under paragraph (7). |
| (9) | Designated areas under paragraph (1) shall be designated by the unit of administrative districts of the Special Metropolitan City, a Metropolitan City, Special Self-Governing City, Do, Special Self-Governing Province, or Si (including an administrative Si established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City)/Gun/Gu; provided, for the areas referred to in paragraph (1)3 and 4 and the permission districts under Article 10 of the Act on the Public Announcement of Real Estate Values, only the relevant area may be designated as a designated area. <Amended on Feb. 15, 2013; Jan. 22, 2016; Feb. 17, 2021> |
| (10) | Notwithstanding paragraph (9), a part of areas from among the administrative districts corresponding to the area designated as the designated area or area scheduled for designation may be excluded from the relevant designated area after undergoing deliberation by the Deliberative Committee on Stabilization of Real Estate Prices by taking account of the tendency of real estate price in the relevant area and the special character of area, etc. <Amended on Jan. 5, 2021> |
| (11) | Statistics of the inflation rate of national consumer price, the inflation rate of housing sale price, the inflation rate of national housing sale price, the inflation rate of land price, and the inflation rate of national land price under paragraph (1) shall be based on the statistics approved by the Minister of Data and Statistics with regard to the preparation of statistics in accordance with Article 18 of the Statistics Act. In such cases, if only statistics of the inflation rate of sale price for apartments in Appendix 1 to the Enforcement Decree of the Building Act are available for a certain area, the statistics shall be deemed statistics of the inflation rate of the housing sale price in the relevant area, while statistics for the second immediately preceding month shall apply, if statistics of the inflation rate of real restate price for the immediately preceding month are unavailable. <Amended on Feb. 3, 2017; Oct. 1, 2025> |
| (12) | In applying paragraph (1), where the number corresponding to 130/100 of the increasing ratio of the national consumer price provided for in paragraph (1)1 through 3, the number corresponding to 130/100 of the increasing ratio of the national house trade price, or the number corresponding to 130/100 of the increasing ratio of the national land price is less than 5/1,000, respectively, it shall be made 5/1,000, and where the number corresponding to the increasing ratio of national consumer price provided for in paragraph (1)4 is a negative number, it shall be made as zero. |
[This Article Added on Dec. 31, 2005]
| Article 168-4 (Organization and operation of Deliberative Committee on Stabilization of Real Estate Prices) |
| (1) | The Deliberative Committee on Stabilization of Real Estate Prices under Article 104-2(3) of the Act (hereafter referred to as "Deliberative Committee" in this Article), shall be organized by 12 or less members, including one chairperson and one vice chairperson. |
| (2) | The chairperson of the Deliberative Committee shall be the Vice Minister of Finance and Economy designated by the Minister of Finance and Economy; and the vice chairperson shall be the Vice Minister of Land, Infrastructure and Transport designated by the Minister of Land, Infrastructure and Transport; and the members shall be the persons appointed or commissioned by the Minister of Finance and Economy from among the public officials of the Vice Minister level of related Ministries, the public officials in general service who belong to the Senior Executive Service, and persons with profound knowledge and experience in economy and real estate. <Amended on Jun. 12, 2006; Feb. 29, 2008; Mar. 23, 2013; Dec. 30, 2025> |
| (3) | Meetings of the Deliberative Committee shall be held with the attendance of a majority of all incumbent members, and resolutions shall be passed with the concurrent vote of at least a majority of those present. |
| (4) | When a committee member falls under any of the following cases, the Minister of Finance and Economy may remove or dismiss such committee member: <Added on Dec. 31, 2015; Dec. 30, 2025> |
| 1. | If a committee member is unable to perform his or her duties due to a mental or physical disorder; |
| 2. | If a committee member engages in any misconduct in connection with his or her duties; |
| 3. | If a committee member is deemed unsuitable as a member due to neglect of a duty, loss of dignity, or on any other ground; |
| 4. | If a committee member voluntarily admits that he or she has difficulty in performing his or her duties. |
[This Article Added on Dec. 31, 2005]
| Article 168-5 (Designation procedures for designated areas) |
In applying the provisions of Articles 168-3 and 168-4, necessary matters for designation procedures for designated areas, application methods of statistics, terms of office of the members of the Deliberative Committee, and duties of the chairperson and the operation of the Deliberative Committee shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2025>
[This Article Added on Dec. 31, 2005]
| Article 168-6 (Criteria for period of land for non-business use) |
"The period prescribed by Presidential Decree" in Article 104-3(1) of the Act, means any of the following periods. In such cases, the period shall be calculated by days: <Amended Feb. 4, 2009; Feb. 18, 2010; Feb. 3, 2015; Feb. 17, 2016>
| 1. | Where the holding period of land is at least five years, the period falling under all of the following items: |
| a. | Period exceeding two years among five years immediately before the transfer date; |
| b. | Period exceeding one year among three years immediately before the transfer date; |
| c. | Period exceeding the period corresponding to 40/100 of the holding period of land; |
| 2. | Where the holding period of land is at least three years, but less than five years, the period falling under all of the following items: |
| a. | Period exceeding the period deducting three years from the holding period of land; |
| b. | Period exceeding one year among three years immediately before the transfer date; |
| c. | Period exceeding the period corresponding to 40/100 of the holding period of land; |
| 3. | Where the holding period of land is less than three years, the period falling under all of the following items; provided, where the holding period of land is less than two years, item a shall not apply: |
| a. | Period exceeding the period deducting two years from the holding period of land; |
| b. | Period exceeding the period corresponding to 40/100 of the holding period of land. |
[This Article Added on Dec. 31, 2005]
| Article 168-7 (Determination of land category) |
In applying the provisions of Article 104-3 of the Act, the determination of farmland, forest land, site for pasturage and other land shall be governed by the factual current situations, with the exception of cases specially provided for in this Decree; provided, where the factual current status are not obvious, it shall be based on the current status stated on the public registers.
[This Article Added on Dec. 31, 2005]
| Article 168-8 (Scope of farmland) |
| (1) | Deleted. <Feb. 3, 2017> |
| (2) | "Farmland, the owner of which does not reside thereon, or farmland which is not cultivated by the owner" in the main sentence of Article 104-3(1)1a of the Act, means any farmland other than farmland that a person who actually resides in the location of farmland under Article 154(3) (hereinafter referred to as "residing in the farmland area") cultivates by him or herself, as defined in Article 66(13) of the Enforcement Decree of the Restriction of Special Taxation Act (hereinafter referred to as "self-cultivation"). In such cases, Article 66(14) of the Enforcement Decree of the Restriction of Special Taxation Act shall apply mutatis mutandis to the judgment on the period of self-cultivation. <Amended on Feb. 22, 2008; Feb. 15, 2013; Feb. 3, 2015; Jan. 22, 2016; Feb. 17, 2016; Feb. 28, 2023> |
| (3) | "Farmland prescribed by Presidential Decree as may be owned under the Farmland Act and other Acts" in the proviso to Article 104-3(1)1a of the Act, means any of the following farmland: <Amended on Feb. 22, 2008; Feb. 29, 2008; Jun. 26, 2009; Feb. 18, 2010; Sep. 20, 2010; Feb. 2, 2012; Feb. 3, 2015; Feb. 3, 2017; Feb. 13, 2018; May 4, 2021; Dec. 30, 2025> |
| 1. | Farmland falling under Article 6(2)2, 9, or 10a or c of the Farmland Act; |
| 2. | Farmland acquired by inheritance under Article 6(2)4 of the Farmland Act, for which three years have not elapsed from the date of commencing the inheritance; |
| 3. | Farmland owned at the time of ceasing farming under Article 6(2)5 of the Farmland Act, for which three years have not elapsed from the date of ceasing farming; |
| 4. | Farmland owned by a person who has obtained permission for, or has reported on, exclusive use of farmland under Article 6(2)7 of the Farmland Act, or farmland for which a consultation on exclusive use of farmland under Article 6(2)8 of the same Act has been completed, which is used for relevant purpose for exclusive use; |
| 5. | Farmland acquired under Article 6(2)10d through f of the Farmland Act, which is used for relevant business purposes; |
| 6. | Farmland owned by a clan (limited to that acquired before December 31, 2005); |
| 7. | Land meeting all of the following requirements, where it is impracticable for the owner (including any person engaging in farming while living together with the owner among persons who make a living together, as referred to in subparagraph 6 of Article 88 of the Act) to cultivate it by him or herself due to illness, age, military service, schooling, appointment to a public office by election, or any other inevitable event specified by Decree of the Ministry of Finance and Economy: |
| a. | The farmland has been cultivated by the owner him or herself, while living in the rural village continuously for at least five years retrospectively from the date the relevant event occurs, and the owner resides in the rural village even after the occurrence of such event. In such cases, if the person who lived together with the owner, as referred to in subparagraph 6 of Article 88 of the Act, at the time such event occurred, resides in the rural area where the farmland is situated, the owner shall be deemed to reside in the rural area; |
| b. | The owner has leased or rented for use the farmland pursuant to Article 23 of the Farmland Act; |
| 8. | Farmland used directly by social welfare corporations, etc., schools, etc., religious and/or ancestral rites organizations, or political parties under Articles 22, 41, 50, and 89 of the Restriction of Special Local Taxation Act for the purpose of its business; |
| 9. | Farmland leased on entrustment (limited to farmland entrusted by individuals) or leased without compensation by the Korea Rural Community Corporation under Article 3 of the Korea Rural Community Corporation and Farmland Management Fund Act for at least eight years pursuant to Article 24-4(1) of the same Act; |
| 9-2. | Farmland self-cultivated by a person residing a rural area at a straight distance not exceeding 80 kilometers from farmland that he or she acquired in accordance with Article 10(1)3 of the Enforcement Decree of the Act on Report on Real Estate Transactions as substitute for farmland expropriated under the Special Act on Support for Pyeongtaek-si Following Relocation of U.S. Military Bases in Korea; |
| 10. | Farmland possessable under the Farmland Act and other Acts, which is prescribed by Decree of the Ministry of Finance and Economy. |
| (4) | "Area prescribed by Presidential Decree" in the main sentence of Article 104-3(1)1b of the Act, means green areas and development restriction zones prescribed in the National Land Planning and Utilization Act. <Amended on Feb. 18, 2010> |
| (5) | "Farmland, the owner of which has lived and cultivated" in the proviso to Article 104-3(1)1b of the Act, means any of the following farmland: <Amended on Feb. 3, 2017> |
| 1. | Farmland cultivated by oneself while residing in a rural area for at least one year retrospectively from the date of incorporation into an urban area under the main sentence of Article 104-3(1)1b of the Act; |
| 2. | Farmland falling under any subparagraph of paragraph (3). |
| (6) | "Period prescribed by Presidential Decree" in the proviso to Article 104-3(1)1b of the Act, means three years. <Amended on Feb. 3, 2015> |
| (7) | Any person intending to be subject to application of paragraph (3)7 shall submit the documents prescribed by Decree of the Ministry of Finance and Economy within a deadline for the tax base return on capital gains tax under Article 105 or 110 of the Act. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 31, 2005]
| Article 168-9 (Scope of forest land) |
| (1) | "Forest land prescribed by Presidential Decree, necessary for promoting other public interests or for protecting and nurturing forest" in Article 104-3(1)2a of the Act, means any of the following forest land: <Amended on Feb. 28, 2007; Feb. 29, 2008; Apr. 3, 2008; Sep. 22, 2008; Jun, 9, 2009; Feb. 18, 2010; Mar. 9, 2010; Feb. 3, 2015; May 7, 2024; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | Protected forest areas under the Forest Protection Act, seed-growing forest or experimental forest under the Creation and Management of Forest Resources Act; |
| 2. | Any of the following forest land within a mountainous district under the Mountainous Districts Management Act; provided, the forest land that was incorporated into an urban area under the National Land Planning and Utilization Act (excluding green conservation areas under Article 30 of the Enforcement Decree of the same Act; hereafter in this subparagraph, the same shall apply) at least three years ago and is now included in the urban area shall be excluded herefrom: |
| a. | Forest land in operation with authorization of a forest management plan under the Creation and Management of Forest Resources Act; |
| b. | Forest land within a special forestry project area under the Creation and Management of Forest Resources Act; |
| 3. | Buddhist temple forest or forest owned by a village; |
| 4. | Forest land within a park nature preservation district and a park natural environment district under the Natural Parks Act; |
| 5. | Forest land within an urban park under the Act on Urban Parks, Green Areas; |
| 6. | Forest land within a protection zone under the Designated cultural heritage and State-registered cultural heritage pursuant to Act on Preservation and Utilization of Cultural Heritage, and a protection zone pursuant to the Act on Preservation and Utilization of Natural Heritage; |
| 7. | Traditional temple preservation land owned by a traditional temple under the Korean Traditional Temples Preservation and Support Act; |
| 8. | Forest land within a development restriction district under the Act on Special Measures for Designation and Management of Development Restriction Zones; |
| 9. | Forest land in military bases or military facility zones under the Protection of Military Bases and Installations Act; |
| 10. | Forest land within contiguous zones under the Road Act; |
| 11. | Forest land within railway protection districts under the Railroad Safety Act; |
| 12. | Forest land within flood management areas under the River Act; |
| 13. | Forest land within water supply source protection districts under the Water Supply and Waterworks Installation Act; |
| 14. | Other forest land prescribed by Decree of the Ministry of Finance and Economy, necessary for the public interest or the protection and fostering of forests. |
| (2) | "Forest land owned by a person who lives in the location of forest land" in Article 104-3(1)2b of the Act, means forest land owned by a person whose resident registration has been made and who actually resides in a region within the same Si (including a Special Self-Governing City and an administrative Si established pursuant to Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; hereafter the same shall apply in this Article)/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this Article) as the location of the forest land, in the Si/Gun/Gu adjacent thereto, or in a place within 30 kilometers in a straight line from the farmland. <Amended on Feb. 22, 2008; Feb. 15, 2013; Feb. 3, 2015; Jan. 22, 2016; Feb. 28, 2023> |
| (3) | "Forest land prescribed by Presidential Decree" in Article 104-3(1)2c of the Act, means any of the following forest land: <Amended on Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Sep. 20, 2010; Jul. 20, 2015; Jan. 5, 2021; Dec. 30, 2025> |
| 1. | Forest land used by the successor to a forestry operator under the Forestry and Mountain Villages Development Promotion Act for producing seeds for forest, saplings for forest, mushrooms, plants in pots, wild flowers, edible herbs, and other forest products; |
| 2. | Forest land used by a seed and sapling production business operator under the Creation and Management of Forest Resources Act for producing seeds for forest or saplings for forest; |
| 3. | Forest land used for the business to create, manage, or operate the natural recreation forest under the Forestry Culture and Recreation Act; |
| 4. | Forest land used for the business to create, manage, or operate an arboretum under the Act on the Creation and Furtherance of Arboretums and Gardens; |
| 5. | Forest land used directly by a forest fraternity for its proper purpose; |
| 6. | Forest land used directly by social welfare corporations, etc., schools, etc., religious and/or ancestral rites organizations, and political parties under Articles 22, 41, 50, and 89 of the Restriction of Special Local Taxation Act for the purpose of its business; |
| 7. | Inherited forest land, for which three years have not elapsed from the date of commencing inheritance; |
| 8. | Forest land owned by a clan (limited to what has been acquired before December 31, 2005); |
| 9. | Other forest land having a direct relation with residence or business by taking into account the land owner, location, utilization situations, ownership period, area, etc., which is prescribed by Decree of the Ministry of Finance and Economy. |
[This Article Added on Dec. 31, 2005]
| Article 168-10 (Scope of sites for pasturage) |
| (1) | "Site for pasturage" in Article 104-3(1)3 of the Act, means barns used for stock raising and land with annexed facilities, grassland, and grazing field. |
| (2) | "Site for pasturage prescribed by Presidential Decree, that has reasonable grounds to be deemed that it has direct relations with residence or business" in the proviso to Article 104-3(1)3 of the Act, means any of the following sites: <Amended on Feb. 29, 2008; Feb. 18, 2010; Sep. 20, 2010; Jan. 5, 2021; Dec. 30, 2025> |
| 1. | Inherited site for pasturage, for which three years have not elapsed from the date of commencing such inheritance; |
| 2. | Site for pasturage owned by a clan (limited to that acquired before December 31, 2005); |
| 3. | Site for pasturage used directly by a social welfare corporation, etc., school, etc., religious and/or ancestral rites organization, and a political party under Articles 22, 41, 50, and 89 of the Restriction of Special Local Taxation Act for the purpose of its business; |
| 4. | Other sites for pasturage having a direct relation with residence or business by taking into account the land owner, location, utilization situations, ownership period, area, etc., which are prescribed by Decree of the Ministry of Finance and Economy. |
| (3) | "Standard area of land for stock raising prescribed by Presidential Decree" in Article 104-3(1)3a of the Act, means the area of land calculated by applying the standard area by livestock and the number of livestock provided for in Appendix 1-3. <Amended on Feb. 22, 2008; Feb. 18, 2010> |
| (4) | "Area prescribed by Presidential Decree" in Article 104-3(1)3a of the Act, means green areas and development restriction zones provided for in the National Land Planning and Utilization Act. <Added on Feb. 22, 2008; Feb. 18, 2010> |
| (5) | "Period prescribed by Presidential Decree" in Article 104-3(1)3a of the Act, means three years. <Amended on Feb. 22, 2008; Feb. 18, 2010; Feb. 3, 2015> |
[This Article Added on Dec. 31, 2005]
| Article 168-11 (Scope of other land used for business) |
| (1) | "Land prescribed by Presidential Decree with reasonable grounds to be deemed that it has direct relations with residence or business" in Article 104-3(1)4c of the Act, means any of the following land: <Amended on Feb. 29, 2008; Dec. 14, 2009; Feb. 18, 2010; Sep. 20, 2010; Jun. 1, 2015; Jun. 21, 2016; Feb. 13, 2018; Jan. 5, 2021; Feb. 17, 2021; Dec. 30, 2025> |
| 1. | Any of the following land for athletic facilities, such as athletic places and sports grounds: |
| a. | Land for athletic facilities for exclusive use by players: |
| (1) | Land within the standard area of athletic facilities for exclusive use by players, prescribed by Decree of the Ministry of Finance and Economy, for athletic facilities continuously provided for players' exclusive use by a person who has established an at-work athletic contest department under the National Sports Promotion Act; provided, the same shall not apply where an at-work athletic contest department does meet the requirements for players, leaders, etc. prescribed by Decree of the Ministry of Finance and Economy; |
| (2) | Land within the standard area prescribed by Decree of the Ministry of Finance and Economy, for athletic facilities directly used for players' training by a person operating athletic contest business; |
| b. | Land for athletic facilities for employees: |
Land within the standard area of athletic facilities for employees, prescribed by Decree of the Ministry of Finance and Economy, among land for athletic facilities established for employees' welfare; provided, the same shall not apply where it does not meet the standards for athletic facilities for employees, prescribed by Decree of the Ministry of Finance and Economy;
| c. | Land used directly by a person operating athletic installation business under the Installation and Utilization of Sports Facilities Act for the relevant business, equipped with adequate facilities and equipment under the same Act; |
| d. | Land used directly by a person operating contest place operation business for the relevant business; |
| 2. | Any of the following land for parking lots: |
| a. | Land within the standard area for installing annexed parking lots under the Parking Lot Act (excluding parking lots annexed to houses; hereafter the same shall apply in this item), for annexed parking lots under the same Act; provided, land for annexed parking lots within land for a recreation facility business under subparagraph 6 shall be governed by subparagraph 6; |
| b. | Land for parking lots of automobile for business which is provided to the business required to own automobiles indispensable for business (excluding a passenger car, two-wheel automobile, and omnibus for employees' commuter automobile), for persons other than business operators under Article 101(3)1 of the Enforcement Decree of the Local Tax Act; provided, it shall be limited to the land within the area which is 1.5 times the aggregate of areas calculated by multiplying the lowest standard area for the garage possession per each type of cars prescribed by the Passenger Transport Service Act or the Trucking Transport Business Act by the number of automobiles for business by each car type the person owns (hereinafter referred to as "standard area for the lowest garage"); |
| c. | Land for business operating parking lots: |
Land owned by a person engaging in business operating parking lots, and used as an off-street parking lot under the Parking Lot Act, for which the ratio of the amount of income for one year to the value of land is at least the ratio prescribed by Decree of the Ministry of Finance and Economy;
| 3. | Land created by implementing a civil investment project provided by the Act on Public-Private Partnerships in Infrastructure by a project entity designated under the same Act and land created by a project entity under other Acts, prescribed by Decree of the Ministry of Finance and Economy; provided, land for which two years have elapsed from the date of completing creation of such land shall be excluded; |
| 4. | Land for juvenile training facilities under the Juvenile Activity Promotion Act, satisfying the standards for facilities and equipment under the same Act; provided, land exceeding the standard area prescribed by Decree of the Ministry of Finance and Economy shall be excluded; |
| 5. | Land owned for conducting reserve forces training for employees etc., satisfying all the following requirements: |
| a. | Land category shall not be a site or land for factory; |
| b. | It shall not be located within a residential area, commercial area, or industrial area of an urban area under the National Land Planning and Utilization Act; |
| c. | It shall be equipped with the facility standard prescribed by Decree of the Ministry of Finance and Economy, and shall be within the standard area prescribed by Decree of the Ministry of Finance and Economy; |
| d. | It shall be owned by a person entrusted to train reserve forces by the commander of an entrusted military unit; |
| 6. | Land within the standard area prescribed by Decree of the Ministry of Finance and Economy, for recreation facility business prescribed by Decree of the Ministry of Finance and Economy, such as specialized recreation business and complex recreation business under the Tourism Promotion Act; |
| 7. | Land for depositories, etc.: |
Land within 120/100 of the maximum area annually used to separately store and keep articles in depositories, open storage areas, stockpiling yards, etc. (including land appurtenant to buildings for warehouses subject to a permit for construction thereof or reporting thereon under the Building Act, but constructed without obtaining a permit therefor or reporting thereon);
| 8. | Land for aggregate collection places: |
Land used to extract aggregates by a person obtaining a permit therefor from the head of a Si/Gun/Gu (limited to the head of an autonomous Gu) under the Aggregate Extraction Act, as permitted;
| 9. | Land used for relevant business by a person operating wastes disposal business with permission under the Wastes Control Act; |
| 10. | Mineral spring (referring to the eruption hole erupting warm water or medicinal water, etc. from underground and a site for maintaining it as land used for manufacturing business of refreshing drinks and hot spring business, etc.) for which the ratio of the amount of income for one year to the value of land is at least the ratio prescribed by Decree of the Ministry of Finance and Economy; |
| 11. | Any of the following land for a fish farm under the Act on the Establishment and Management of Spatial Data or swamp (referring to dams, reservoirs, small ponds, and naturally formed marshes, and sites for their maintenance used for inland water fish-breeding business, fishing place operation business, etc.): |
| a. | Land used for business of cultivation in inland seawater with permission granted under Article 43(1)1 of the Aquaculture Industry Development Act or business of fisheries seed production with permission granted under the Fisheries Seed Industry Promotion Act; |
| b. | Land used by persons who have received a license or permission under the Inland Water Fisheries Act and the Aquaculture Industry Development Act (limited to inland aquaculture industry under Article 10(1)7 of that Act and inland aquaculture business on land, etc. under Article 43(1)2 of that Act) from the head of a Si/Gun/Gu (referring to the head of an autonomous Gu, and in cases of Han River of Seoul Special City, referring to the agency in charge of duties for Han River management; hereafter the same shall apply in this item) or has reported to the head of a Si/Gun/Gu for the relevant licensed (including aquaculture business license), permitted (including permission for aquaculture business), or reported fisheries; |
| c. | Land, other than that specified in items a and b, for which the ratio of amount of income for one year to the value of land is at least the ratio prescribed by Decree of the Ministry of Finance and Economy; |
| 12. | In cases of land prescribed by Decree of the Ministry of Finance and Economy, for business manufacturing blocks, stone work sets, and clay pipes, business for flower sale facilities, business growing landscape plants, schools teaching automobile maintenance, heavy equipment maintenance, heavy equipment driving, or courses for agricultural businesses, and other similar land, for which the ratio of the amount of income for one year to the value of land is at least the ratio prescribed by Decree of the Ministry of Finance and Economy; |
| 13. | Land (limited to smaller than 660 square meters) falling under the standard prescribed by Decree of the Ministry of Finance and Economy by taking into account as to whether it is possible to newly construct a house, which is one lot on bare land (referring to land which does not fall under subparagraphs 1 through 12, and not used for any purposes) owned by one household which does not own any house; |
| 14. | Other land similar to subparagraphs 1 through 13, with reasonable grounds to be deemed to have a direct relation with business by taking into account land utilization, implementation of the related Acts and subordinate statutes, etc., prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | In applying paragraph (1)2c, 10, 11c, and 12, the ratio of amount of income for one year to the land value (hereafter referred to as "income amount ratio" in this paragraph) shall be calculated by taxable period, but it shall be the larger of the following ratios. In such cases, where the amount of income generated from the relevant land may be classified by lot of land, the ratio of amount of income shall be calculated by lot: |
| 1. | Ratio obtained by dividing the annual amount of income in the relevant taxable period by the land value in the relevant taxable period; |
| 2. | (Annual amount of income in the relevant taxable period + Amount of annual income in the immediately preceding taxable period) ÷ (Land value in the relevant taxable period + Land value in the immediately preceding taxable period). |
| (3) | "Amount of annual income" in paragraph (2) means the amount calculated by any of the following methods: <Amended on Jun. 28, 2013> |
| 1. | It shall be the amount of income for one taxable period of the business related to the relevant land, buildings, facilities, etc., and where a contract for a lease on deposit basis or rent on the relevant land, buildings, facilities, etc. is concluded and money for lease on deposit basis or guarantee money is received, the amount calculated by applying mutatis mutandis the formula provided for in Article 65(1) of the Enforcement Decree of the Value-Added Tax Act shall be added up; |
| 2. | Where the relevant actual reversion is undividable as the amount of income for one taxable period is related jointly to the relevant land, buildings, facilities, etc. (hereafter referred to as "relevant land, etc." in this subparagraph) and other land, buildings, facilities, etc. (hereafter referred to as "other land, etc." in this subparagraph), the amount of income for one taxable period related to the relevant land, etc. shall be calculated by the following formula: |
Amount of income for one taxable period related to the relevant land, etc.= Amount of income for one taxable period related jointly to the relevant land, etc. and other land, etc. × (Value of the relevant land in the relevant taxable period ÷ Aggregated amount of value of the relevant land and value of other land in the relevant taxable period);
| 3. | Where the period for operating business on the relevant land during one taxable period is less than one year due to a newly opening of business, discontinuance of business, transfer of land, prohibition of use of land under statutes, or other inevitable reasons, the annual amount of income shall be calculated by converting the amount of income during the relevant period into one year. |
| (4) | "Land value of the relevant taxable period" in paragraphs (2) and (3) means the standard market price of the completion date of the relevant taxable period (where transferring during the taxable period, the date of transfer). |
| (5) | In applying Article 104-3(1) of the Act, where multitude lots of land in connection are used in bundle for one usage, and its total area exceeds the area to become the standard for determination whether corresponding to land for non-business use (hereafter referred to as "standard area" in this paragraph), the whole or part of the land under the order of each item of the relevant subparagraph according to the following classification shall be deemed the portion to exceed the standard area: |
| 1. | Where no buildings nor facilities exist on land: |
| a. | Land, the acquisition timing of which is late; |
| b. | Where the acquisition timing is same, land selected by residents. |
| 2. | Where buildings or facilities exist on land: |
| a. | Land, the acquisition timing of which is late from among land excluding the floor area of buildings or horizontal reflection area of facilities; |
| b. | Where the acquisition timing is same, land selected by residents. |
| (6) | In applying Article 104-3(1) of the Act, where at least one building (including facilities, etc.; hereafter the same shall apply in this paragraph) are on land, and the portion used for the residence and specific business of a resident (including a partial building used for residence and specific business among a number of buildings; hereafter referred to as "specific usage portion" in this paragraph) and the different portion are located altogether in the buildings, the calculation of an area, etc. of annexed land of the specific usage portion from among the building's floor area and the annexed land's area (hereafter referred to as "annexed land's area, etc." in this paragraph) shall be made under the following formula: |
| 1. | Where one building is used for complex usage: |
Annexed land's area, etc. of specific usage portion = Annexed land's area, etc. of a building × Total area of specific usage portion / Total area of a building;
| 2. | Where many buildings of different usage are located in the same boundary: |
Annexed land's area of specific usage portion = All annexed land's area of many buildings × Floor area of specific usage portion / All floor area of many buildings.
| (7) | In applying Article 104-3(1) of the Act, the classification of business types shall be based on the Korea Standard Industry Code publicly announced by the Minister of Data and Statics under the Statistics Act, except as otherwise expressly provided for in this Decree. <Amended on Feb. 4, 2009; Oct. 1, 2025> |
[This Article Added on Dec. 31, 2005]
| Article 168-12 (Scope of land appurtenant to house) |
"The multiple prescribed by Presidential Decree by region" in Article 104-3(1)5 of the Act means the multiple classified by region under the following subparagraphs; in such cases, in applying the use district under the relevant subparagraph, where all or part of the land appurtenant to a house is acquired by consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land for Public Works Projects, or otherwise expropriated under other statutes (limited to cases where the relevant land is acquired before the date of public notice of project approval), the use district of the relevant land as of the day before the date of public notice of project approval shall apply: <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 11, 2020; Nov. 28, 2025>
| 1. | The land within an urban area under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act: The following multiples: |
| a. | Land in a residential area, commercial area, and industrial area among land in the Seoul Metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter in this subparagraph, referred to as the "Seoul Metropolitan area"): Three times; |
| b. | Land in a green area among the land in the Seoul Metropolitan area: Five times; |
| c. | Land outside of the Seoul Metropolitan area: Five times; |
| 2. | Other lands: Ten times. |
[This Article Added on Dec. 31, 2005]
| Article 168-13 (Scope of villas and standard for application) |
"Land annexed to a house in an agricultural or fishing village that meets the scope and criteria prescribed by Presidential Decree" in the proviso to Article 104-3(1)6 of the Act, means land annexed to a house that meets all the following requirements: <Amended on Feb. 18, 2010; Dec. 30, 2010; Feb. 3, 2015>
| 1. | Total area of a building shall be within 150 square meters and the area of land annexed to the building shall be within 660 square meters; |
| 2. | Value of the building and its annexed land shall not exceed 200 million won of the standard market prices; |
| 3. | It shall be located in an area excluding that corresponding to any of Article 99-4(1)1a1) through 4) of the Restriction of Special Taxation Act. |
[This Article Added on Dec. 31, 2005]
| Article 168-14 (Criteria for determination of land not deemed land for non-business use having inevitable reasons) |
| (1) | Land falling under any of the following pursuant to Article 104-3(2) of the Act shall be deemed land not falling under any subparagraph of Article 104-3(1) of the Act during the period provided for in the relevant subparagraphs, and it shall be determined whether it falls under land for non-business use under the provisions of the same paragraph (hereinafter referred to as "land for non-business use"): <Amended on Feb. 22, 2008; Feb. 29, 2008; Feb. 4, 2009; Jan. 5, 2021; May 7, 2024; Dec. 30, 2025> |
| 1. | After acquiring the land, its use has been prohibited or restricted under Acts and subordinate statutes: Period for which its use has been prohibited or restricted; |
| 2. | Land within a protection zone designated under the Act on the Preservation and Utilization of Cultural Heritage or the Act on the Preservation and Utilization of Natural Heritage after the land is acquired: Period of time designated as a protection zone; |
| 3. | Land falling under subparagraphs 1 and 2, which has been inherited: Period calculated pursuant to subparagraphs 1 and 2 from the date the inheritance commenced; |
| 4. | Other land falling under inevitable reasons prescribed by Decree of the Ministry of Finance and Economy, taking into account other legal restriction due to public interest, restructuring of an enterprise, or an inevitable reason, the current status of land, reasons for acquisition, or utilization situations, etc.: Period prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | As for land falling under any of the following pursuant to Article 104-3(2) of the Act, the date provided for in each relevant subparagraph shall be deemed the transfer date, and it shall be determined whether it falls under land for non-business use by applying the provisions of Article 168-6: <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Land transferred under the auction under the Civil Execution Act: First auction date; |
| 2. | Land transferred under the public sale under the National Tax Collection Act: First public sale date; |
| 3. | Other land falling under inevitable reasons prescribed by Decree of the Ministry of Finance and Economy, such as cases where a specific period is required for transfer of land. |
| (3) | None of the following land shall be deemed land for non-business use under Article 104-3(2) of the Act: <Amended Feb. 9, 2006; Feb. 29, 2008; Oct. 7, 2008; Dec. 31, 2008; Feb. 4, 2009; Feb. 15, 2013; Feb. 21, 2014; Jan. 5, 2021; May 4, 2021; Dec. 30, 2025> |
| 1. | Farmland, forest land, and site for pasturage inherited before December 31, 2006, which are transferred not later than December 31, 2009; |
| 1-2. | Farmland, forest land, and site for pasturage which a lineal ascendant or a spouse has cultivated directly for at least eight years while living in the location of land prescribed by Decree of the Ministry of Finance and Economy, which are inherited or donated by the relevant lineal ascendant or spouse; provided, land in an urban area (excluding a green belt zone and a development restriction zone) under the National Land Planning and Utilization Act at the time of transfer shall be excluded; |
| 2. | Farmland, forest land, and site for pasturage owned for at least 20 years before December 31, 2006, which are transferred not later than December 31, 2009; |
| 3. | Any of the following land, which is to be purchased through negotiation or expropriated under the Act on Acquisition of and Compensation for Land for Public Works Projects or any other Act: |
| a. | Land whose date of notification of the approval of a project was not later than December 31, 2006; |
| b. | Land whose date of acquisition (referring to the date on which the decedent acquired the land, if the land was conveyed by inheritance, or the date on which the spouse or lineal ascendent or descendent who conveyed by gift acquired the relevant asset) was at least five years before the date of notification of the approval of a project; |
| 4. | Any of the following farmland falling under Article 104-3(1)1b of the Act: |
| a. | Farmland owned by a clan (limited to that acquired before December 31, 2005); |
| b. | Farmland acquired by inheritance, which is transferred within five years from the date of commencing the inheritance; |
| 5. | Other land falling under inevitable reasons prescribed by Decree of the Ministry of Finance and Economy, taking into account the statutory restrictions under Acts and subordinate statutes due to public interest, restructuring of an enterprise, or inevitable reasons, current status of land, reasons for acquisition or utilization status, etc. |
| (4) | Upon calculating the period of cultivating pursuant to paragraph (3)1-2, where a lineal ascendant cultivated the land inherited or donated from his or her spouse, the period during which the lineal ascendant’s spouse directly had cultivated the land while residing in the location of such land after acquisition of the same shall be deemed the period of cultivation by the lineal ascendant. <Added on Feb. 15, 2013> |
[This Article Added on Dec. 31, 2005]
[Title Amended on Jan. 5, 2021]
SECTION 4 Preliminary Return on Tax Base of Capital Gains and Payment thereof
| Article 169 (Preliminary return on tax base of capital gains) |
| (1) | Any person who intends to file a preliminary return under Article 105(1) of the Act shall submit a preliminary return on tax base and the computation of capital gains prescribed by Decree of the Ministry of Finance and Economy, along with the following documents, to the head of the tax office having jurisdiction over the place for tax payment: <Amended on Dec. 30, 2002; Feb. 19, 2005; Dec. 31, 2005; Jun. 12, 2006; Feb. 28, 2007; Feb. 29, 2008; Feb. 4, 2009; Dec. 31, 2009; Feb. 18, 2010; Feb. 21, 2014; Feb. 17, 2016; Feb. 11, 2020; Feb. 17, 2021; Dec. 31, 2022; Dec. 31, 2024; Dec. 30, 2025> |
| 1. | The following documents, where assets specified in Article 94(1)1, 2 and 6 of the Act are transferred: |
| a. | Deleted; <Jun. 12, 2006> |
| b. | Deleted; <Jun. 12, 2006> |
| c. | A certificate of scheduled land of substitution, an application for verification of temporary grade, and documents, etc. verifying the details of management and dispositions; |
| d. | A copy of a contract for sale and purchase of the relevant assets; |
| e. | Deleted; <Dec. 31, 2009> |
| f. | A specification of capital expenditures and transfer expenses, etc.; |
| g. | A specification of depreciation expenses; |
| 2. | Where an asset is transferred under Article 94(1)3a and b of the Act, the following documents: |
| a. | A copy of a contract for sale and purchase of the relevant assets; provided, a detailed statement issued by a financial investment business entity under Article 8(1) of the Financial Investment Services and Capital Markets Act shall be submitted instead where stocks traded under Article 178(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act are transferred; |
| b. | A specification of transfer expenses, etc.; |
| c. | In cases of one stockholder of a corporation and other stockholders who fall under the latter part of Article 157(4)1, a written report on majority stockholders in the form prescribed by Decree of the Ministry of Finance and Economy. |
| d. | In cases of a single shareholder deemed a majority shareholder of a stock-listed corporation or a non-stock-listed corporation, and other shareholders of such corporations pursuant to Article 157(9), a report on majority shareholders in the form prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | Upon receipt of a preliminary return under paragraph (1), the head of the tax office having jurisdiction over the place for tax payment shall verify the following documents related to the transfer of assets under Article 94(1)1 and 2 of the Act by matching them against administrative information available for sharing under Article 36(1) of the Electronic Government Act; provided the head of the tax office may request a taxpayer to submit the following documents, if it is impracticable to verify the relevant documents by matching them against administrative information available for sharing: <Added on Jun. 12, 2006; Dec. 31, 2008; May 4, 2010; Feb. 17, 2016; Feb. 13, 2018> |
| 1. | The certified copies of the land register and the building register; |
| 2. | The land and building registration certificate. |
[This Article Wholly Amended on Dec. 31, 2001]
| Article 170 (Preliminary return and payment) |
Any person who intends to file a preliminary return and pay tax pursuant to Article 106(1) of the Act shall submit a preliminary return on the tax base of capital gains along with a preliminary return on the tax base of capital gains and a statement of account of payment prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025>
[This Article Wholly Amended on Feb. 18, 2010]
| Article 171 (Application and issuance of real estate transfer notification certificate) |
A person who shall submit a real estate transfer notification certificate to the head of the registrar's office pursuant to Article 108 of the Act shall apply for the issuance of the real estate transfer notification certificate by submitting a written application prescribed by Decree of the Ministry of Finance and Economy to the head of a tax office. In such cases, where the person is verified for the issuance of a certificate of seal imprint for the sale of real estate by the head of a tax office pursuant to the proviso of Article 13(3) of the Enforcement Decree of the Certification of Seal Imprint Act, he or she shall be deemed to have submitted the real estate transfer notification certificate under Article 108 of the Act. <Amended on Dec. 30, 2025>
[This Article Added on Feb. 11, 2020]
| Article 172 Deleted. <Dec. 31, 1999> |
SECTION 5 Final Return on Tax Base of Capital Gains and Payment thereof
| Article 173 (Final return on tax base of capital gains) |
| (1) | In filing a final return pursuant to Article 110(1) of the Act, the documents referred to in the subparagraphs of paragraph (2) shall be attached to a final return on the tax base and the computation of capital gains prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 18, 2010; Dec. 30, 2025> |
| (2) | "Documents prescribed by Presidential Decree" in Article 110(5) of the Act, means the following documents: <Amended on Apr. 1, 1998; Dec. 31, 1999; Jun. 12, 2006; Feb. 29, 2008; Feb. 18, 2010; Feb. 3, 2015; Dec. 30, 2025> |
| 1. | Documents provided for in each subparagraph of Article 169(1) and (2); |
| 2. | A copy of the notification under Article 177(1) (a person who fails to file a preliminary return under Article 105 of the Act shall attach an account statement of capital gains determined by Decree of the Ministry of Finance and Economy); |
| 3. | Where the amount of income is calculated under Article 101 of the Act, an account statement of non-inclusion among necessary expenses; |
| 4. | Deleted. <Feb. 17, 2016> |
| (3) | Where any person who has file a final return falls under Article 96(3) of the Act on account of a change in the amount of capital gains because such amount included in the gross revenue is disposed of as dividend, bonus, or other income when a corporation files a return on the tax base of corporate tax under the Corporate Tax Act, or the head of a tax office determines or corrects the tax base of corporate tax after the end of the deadline for a final return, if the relevant corporation (where a resident has received the notification pursuant to the proviso to Article 192(1), referring to the relevant resident) files an additional return and pays tax (including the return on refund) by the end of two months after the month in which the date it receives a notice of change in the amount of income under Article 192(1) arrives (where the amount of capital gains has been changed by a return made by a corporation under the Corporate Tax Act, referring to the deadline for a return on corporate tax by the relevant corporation), it shall be deemed to have filed a return and paid tax by the deadline under Article 110 of the Act. <Amended on Feb. 18, 2010> |
| (4) | Capital gains tax shall be deemed to be reported and paid by the deadline under Article 110 of the Act, where the amount of capital gains initially reported is changed as a result of an administrative litigation instituted by any person who has filed a final return on the tax base of capital gains with respect to compensation value for expropriation based on the expropriation of land, etc. under the Act on Acquisition of and Compensation for Land for Public Works Projects or other Act, and the amount of capital gains is additionally reported and paid by the end of the month immediately after the month to which the final and decisive date of judgement on that litigation belongs. <Added on Feb. 13, 2018> |
| (5) | "Cases prescribed by Presidential Decree" in the proviso of Article 110(4) of the Act means any of the following: <Added on Dec. 29, 2000; Feb. 18, 2010; Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021; Dec. 31, 2024> |
| 1. | Where a person who has filed an estimated report on the asset subject to progressive tax rate two or more times for the relevant year fails to file a report by adding the amount of capital gains already reported pursuant to Article 107(2) of the Act; |
| 2. | Where a right on land, a building, or real estate, any other assets and beneficial interests of a trust under Article 94(1)1, 2, 4, and 6 of the Act has been transferred at least two times, and, in case of applying Article 103(2) of the Act, the amount of calculated tax on capital gains therefrom initially reported is changed; |
| 3. | Where stocks, etc. under Article 94(1)3a and b have been transferred two or more times, and, in case of applying Article 103(2) of the Act, the amount of calculated tax on capital gains therefrom initially reported therefrom is changed; |
| 4. | Where at least two of land, buildings, rights on real estate and other assets under Article 94(1)1, 2, and 4 of the Act have been transferred, and, in case of applying Article 104(5) of the Act, the amount of calculated tax on capital gains therefrom initially reported therefrom is changed. |
[Title Amended on Dec. 31, 1999]
| Article 174 (Procedures for payment of final tax return) |
| (1) | Any person who intends to file a final return and to pay tax pursuant to Article 111 of the Act shall file a final tax return and pay tax to the head of the competent tax office having jurisdiction over the place for tax, or pays tax to the Bank of Korea or a postal service office, with a statement of payment under the National Tax Collection Act along with a final return on the tax base and the computation of capital gains attached thereto. |
| (2) | Where a person has submitted a statement of payment with final return on the tax base and the computation of capital gains attached thereto to the Bank of Korea or a postal service office pursuant to paragraph (1), he or she shall be deemed to have filed a return under Article 110(1) of the Act. |
[This Article Wholly Amended on Feb. 18, 2010]
| Article 175 (Payment of capital gains tax in installment) |
The amount of tax payable in installments under Article 112 of the Act shall be governed by each of the following subparagraphs:
| 1. | In cases where the amount of tax payable does not exceed 20 million won, the amount in excess of ten million won; |
| 2. | In cases where the amount of tax payable exceeds 20 million won, the amount not exceeding 50/100 of the relevant amount of tax. |
| Article 175-2 Deleted. <Feb. 17, 2016> |
SECTION 6 Decision on and Revision of Capital Gains, and Collection and Refund thereof
| Article 176 (Decision and revision on tax base for capital gains and amount of tax) |
| (1) | Deleted. <Dec. 31, 1999> |
| (2) | The tax base and amount of tax under Article 114 of the Act shall be determined or revised by the head of the competent tax office having jurisdiction over the place for tax payment; provided, where the Commissioner of the National Tax Service deems particularly important, it shall be determined or revised by the commissioner of the competent regional tax office. <Amended on Dec. 31, 1999> |
| (3) | In cases falling under the proviso to paragraph (2), the head of the competent tax office having jurisdiction over the place for tax payment shall promptly forward the documents necessary for the determination or revision of the relevant tax base, amount of tax or the amount of capital gains to the commissioner of the competent regional tax office. <Amended on Dec. 31, 1999> |
| (4) | The commissioner of the competent regional tax office who has examined, determined, or revised the amount of capital gains under the proviso to paragraph (2) shall promptly notify the head of the competent tax office having jurisdiction over the place for tax payment, of the matters of such examination, decision, or revision. <Amended on Dec. 31, 1999> |
| (5) | "Cases prescribed by Presidential Decree, considering the tax base and amount of tax on capital gains or whether a person liable for a return has declared the actual transaction value" in the main sentence of Article 114(5) of the Act means any of the following cases: <Added on Feb. 28, 2007; Feb. 18, 2010; Feb. 2, 2012; Feb. 21, 2014> |
| 1. | Where the amount of capital gains tax calculated to be paid by presuming the value entered in the register as the actual selling price is less than three million won; |
| 2. | Where the amount of capital gains tax calculated to be paid by presuming the value entered in the register as the actual selling price is at least three million won, but both of the following requirements are met: |
| a. | The head of the competent tax office or commissioner of the competent regional tax office having jurisdiction over the place for tax payment has issued a notice to a person liable for filing, stating that the tax base and amount for capital gains should be determined by presuming the value entered in the register as the actual selling price, unless the person files the tax base return after the term under Article 45-3 of the Framework Act on National Taxes (hereafter referred to as "return after the term" in this Article) along with the accompanying documents specified in Article 173(2); |
| b. | The person liable for filing fails to file the return after the term within 30 days of the date on which such notice under item a is delivered. |
[Title Amended on Dec. 31, 1999]
| Article 176-2 (Estimated determination and revision) |
| (1) | "Grounds prescribed by Presidential Decree" in Article 114(7) of the Act, means any of the following cases: <Amended on Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010; Dec. 30, 2010; Feb. 3, 2015; Feb. 17, 2016; Aug. 31, 2016; Jan. 21, 2022> |
| 1. | Where the books of account, sales contract, receipts, and other evidentiary documents required for verifying the actual transaction price at the time of transfer or acquisition do not exist or their key parts are incomplete; |
| 2. | Where any description of books of account, sale contracts, receipts, and other evidential documents are apparently false in light of prices in previous transactions, the values appraised by an appraisal corporation, etc. defined in the Act on Appraisal and Certified Appraisers (hereafter in this Article, referred to as "appraisal corporation, etc."). |
| (2) | "Value of acquisition converted by the method prescribed by Presidential Decree" in Article 114(7) of the Act, means the value converted by the method referred to in the following: <Amended on Dec. 29, 2000; Dec. 31, 2001; Dec. 30, 2002; Dec. 30, 2003; Aug. 5, 2005; Dec. 31, 2005; Feb. 22, 2008; Feb. 18, 2010; Feb. 3, 2017; Feb. 11, 2020; Feb. 15, 2022; Dec. 31, 2024> |
| 1. | In cases of stocks, etc. under Article 94(1)3 of the Act, or other assets under subparagraph 4 of the same paragraph, the value calculated by the following formula: |
┌────────────────────────────┐
│ Actual transaction price at time of transfer, the price of transaction examples │
│ under paragraph (3)1, or appraisal price under paragraph (3)2 × (Standard │
│ market price at the time of acquisition / Standard market price at the time of │
│ transfer │
│ │
└────────────────────────────┘
| 2. | In cases of the right to acquire the land, building, and real estate under Article 96(1)1 and 2a of the Act, the amount calculated by the following formula. In such cases, if the acquired house and the land appurtenant thereto are transferred in package before the individual housing price and multi-family housing price under the Act on the Public Announcement of Real Estate Values (including the price for land appurtenant thereto) are initially announced to the public, the standard price at the time of acquisition in the following formula shall be computed according to Article 164(7) |
┌────────────────────────────┐
│ Actual transaction price at time of transfer, the price of transaction examples │
│ under paragraph (3)1, or appraisal price under paragraph (3)2 × (Standard │
│ market price at the time of acquisition / Standard market price at the time of │
│ transfer (in cases of falling under Article 164(8), standard market price at the │
│ time of transfer under the same paragraph)) │
└──────────────────────────────────────┘
| (3) | Where the transfer price or the acquisition price is decided by estimation or revised under Article 114(7) of the Act, it shall be based on the amount computed by successively applying the following methods (in cases of the right of acquisition of new stocks, subparagraph 3 shall not apply); provided, where the value of transaction examples under subparagraph 1 or the appraised value under subparagraph 2 is the value, etc. from the transaction with a related party under Article 98(1), and is deemed objectively unfair, the relevant value shall not be applied: <Amended on Dec. 31, 2005; Feb. 22, 2008; Feb. 4, 2009; Feb. 2, 2012; Feb. 15, 2013; Feb. 3, 2015; Feb. 11, 2020; Jan. 21, 2022> |
| 1. | Where there are transaction examples of assets bearing the identity or similarity with the relevant assets (excluding stocks, etc. of listed corporations) within three months before and after the date of transfer or acquisition respectively, such amount; |
| 2. | Where prices for the relevant assets (excluding stocks, etc.) are appraised by at least two appraisal corporations, etc. within three months before and after the date of transfer or acquisition respectively and the appraised prices (limited to those appraised as at a reference date of appraisal within three months respectively before and after the date of transfer or acquisition) are acceptable as reliable, the average value of such appraised prices; provided, in cases where the standard market prices of assets (excluding stocks, etc.) are less than one billion won (excluding stocks, etc.) and the standard market prices are appraised by one appraisal corporation, etc. within three months before and after the date of transfer or acquisition, respectively, and the appraised prices are acceptable as reliable, it shall be the appraised prices (limited to those appraised as at a reference date of appraisal within three months respectively before and after of the date of transfer or acquisition); |
| 3. | Acquisition price converted under paragraph (2); |
| 4. | Standard market value. |
| (4) | When applying paragraph (3)1 through 3 to the assets (including the assets inherited or donated) acquired before the date under Article 8 of the Addenda to the Income Tax Act (Act No. 4803) (hereinafter referred to as "date of fictitious acquisition"), the acquisition value as of the date of fictitious acquisition shall be a larger value of the values under the following: <Amended on Feb. 19, 2005; Feb. 4, 2009> |
| 1. | Prices under paragraph (3)1 through 3 as of the date of fictitious acquisition; |
| 2. | Where the actual transaction price at the time of acquisition or the price under paragraph (3)1 and 2 is confirmed, the price which sums up the actual transaction price of the relevant assets or the price under paragraph (3)1 and 2, and the amount computed by multiplying the said price by the rising rate of the producers' price during the retention period from the acquisition date to the date immediately preceding the fictitious acquisition date. |
| (5) | Where the Commissioner of the National Tax Service deems it necessary for the head of the competent tax office or commissioner of the competent regional tax office having jurisdiction over the domicile in making a decision or revision of the amount of capital gains, he or she may ensure fairness in such decision or revision by consulting with persons of extensive learning and experience in the appraisal and evaluation of real estate pursuant to Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1999]
| Article 177 (Notification of tax base and amount of tax for capital gains) |
| (1) | In making a notification under Article 114(8) of the Act, it shall be made in writing stating the tax base, tax rate, amount of tax and other necessary matters on a notice of payment. In such cases, if the commissioner of a regional tax office has determined or revised the tax base and the amount of tax, such purport shall be mentioned in addition. <Amended on Dec. 31, 1999; Feb. 22, 2008; Feb. 17, 2021> |
| (2) | The provisions of paragraph (1) shall be applied to cases where no payable tax exists. |
| (3) | The head of the competent tax office having jurisdiction over the place for tax payment shall, in cases where he or she levies capital gains tax of the decedent on two or more heirs, distribute the tax base and amount of tax among them based on their shares, and notify thereof by heir, respectively. |
[Title Amended on Dec. 31, 1999]
| Article 177-2 (Inquiry on particulars of stock transactions) |
When applying Article 114(9) of the Act, the head of the competent tax office or commissioner of the competent regional tax office having jurisdiction over the place for tax payment shall request, by a written document stating the matters falling under the following subparagraphs, the representative of an investment trader or an investment broker under the Financial Investment Services and Capital Markets Act and a corporation which has issued stock certificates or contribution certificates to furnish the transaction particulars of the stocks, etc. and other necessary matters: <Amended on Feb. 22, 2008; Feb. 4, 2009>
| 1. | Personal matters of the traders; |
| 3. | Details of the requested data. |
[This Article Added on Dec. 31, 1999]
| Article 177-3 (Preparation of statement of changes in List of beneficiaries of trust) |
The statement of changes in the list of beneficiaries of trust under Article 115-2 of the Act shall be prepared according to the form prescribed by Decree of the Ministry of Finance and Economy and shall include the following: <Amended on Dec. 30, 2025>
| 1. | The name or title and address of a trustor; |
| 2. | The name or title and address of a trustee; |
| 3. | The name or title and address of a beneficiary; |
| 4. | The current statues of holding beneficial interests or beneficial certificates by beneficiary and the details thereof; |
| 5. | The changes in beneficiaries during a taxable period. |
[This Article Added on Feb. 17, 2021]
| Article 178 (Methods for retaining books and records on stocks) |
When retaining records of trading details of stocks, etc. in a book, and managing them pursuant to Article 115(1) of the Act, each entry shall be recorded in a separate form by each item of stock; and with regard to retaining records by each item, trading details shall be recorded in relation to the date of trading, volume, unit price, value of acquisition, value of transfer, transaction fees, securities transaction tax, special rural development tax, etc.
[This Article Added on Dec. 31, 2024]
SECTION 7 Capital Gains Tax on Transfer of Overseas Assets
| Article 178-2 (Scope of capital gains from overseas assets) |
| (1) | Deleted. <Feb. 3, 2017> |
| (2) | Deleted. <Feb. 11, 2020> |
| (3) | Deleted. <Feb. 13, 2018> |
| (4) | "Assets prescribed by Presidential Decree" in subparagraph 5 of Article 118-2 of the Act, means transferred assets without registered, which are located in a foreign country and consist of other assets under Article 94(1)4 of the Act and real property rights under subparagraph 2 of Article 118-2 of the Act. <Amended on Feb. 3, 2015; Feb. 3, 2017> |
| (5) | Article 158(2) through (4) shall apply mutatis mutandis where it is intended to levy capital gains tax pursuant to subparagraph 5 of Article 118-2 of the Act. <Added on Feb. 3, 2015; Feb. 13, 2018; Feb. 12, 2019> |
[This Article Added on Dec. 31, 1998]
[This Article Wholly Amended on Feb. 3, 2017]
| Article 178-3 (Calculation of market value of overseas assets) |
| (1) | If any of the following values is confirmed in calculating the market value of an overseas asset under the provisos of Article 118-3(1) and Article 118-4(1)1 of the Act, such value shall be deemed the market value of the relevant asset; provided, subparagraphs 2 to 4 shall not apply to stocks, etc. under Article 157-3 or to assets under Article 178-2(4) that fall under Article 94(1)4b through d of the Act (limited, in cases of assets under item b of that subparagraph, to stocks, etc. under items c and d of that subparagraph): <Amended on Dec. 30, 2003; Feb. 3, 2017; Feb. 13, 2018; Feb. 11, 2020; Feb. 17, 2021; Jan. 21, 2022; Dec. 31, 2024> |
| 1. | Values assessed by a foreign government (including local governments) in connection with taxation on the transfer of overseas assets; |
| 2. | Actual transaction prices taking place within six months before and after the date of transfer or acquisition of overseas assets; |
| 3. | Values assessed by an appraisal corporation, etc. within six months before and after the date of transfer or acquisition of overseas assets; |
| 4. | Compensation price of an overseas asset which has been fixed by an expropriation, etc. within six months before and after the date of transfer or acquisition of overseas assets. |
| (2) | "Method prescribed by Presidential Decree" in the provisos to Articles 118-3(1) and 118-4(1)1 of the Act, means the method of assessment according to any of the following: <Amended on Dec. 31, 1999; Feb. 19, 2005; Feb. 18, 2010; Feb. 3, 2015; Aug. 31, 2016; Jan. 21, 2022> |
| 1. | In cases of real estate and real property rights, the assessment of the value of overseas assets by applying mutatis mutandis Articles 61, 62, 64, and 65 of the Inheritance Tax and Gift Tax Act; provided, if the assessment of the value of overseas assets by applying mutatis mutandis Articles 61, 62, 64, and 65 of the Inheritance Tax and Gift Tax Act is inappropriate, it means an assessment made by an appraisal corporation, etc. under the Act on Appraisal and Certified Appraisers; |
| 2. | In cases of a computation of the values of securities, an assessment by applying mutatis mutandis the evaluation method under Article 63 of the Inheritance Tax and Gift Tax Act. In such cases, "two months respectively before and after the standard date of appraisal" in paragraph (1)1a of the same Article shall be construed as "one month before the date of transfer or acquisition." |
[This Article Added on Dec. 31, 1998]
| Article 178-4 (Necessary expenses for capital gains of overseas assets) |
| (1) | The provisions of Article 163(1) and (2) shall apply mutatis mutandis to cases of computing the actual transaction price required for acquisition under the main clause of Article 118-4(1)1 of the Act. |
| (2) | Deleted. <Dec. 30, 2003> |
| (3) | "Capital expenditure prescribed by Presidential Decree" in Article 118-4(1)2 of the Act means expenditure falling under any subparagraph of Article 163(3). <Amended on Feb. 18, 2010; Feb. 15, 2013> |
| (4) | "Transfer cost prescribed by Presidential Decree" in Article 118-4(1)3 of the Act means cost falling under any subparagraph of Article 163(5). <Amended on Feb. 18, 2010; Feb. 15, 2013> |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 11, 2020]
| Article 178-5 (Conversion into foreign currency for gains from transfer of overseas assets) |
| (1) | In cases of calculating gains from transfer under Article 118-4(2) of the Act, it shall be computed under the standard exchange rate or arbitrated exchange rate pursuant to the Foreign Exchange Transactions Act as of the date of receiving or paying a transfer price and necessary expenses. <Amended on Dec. 31, 2001; Feb. 19, 2005> |
| (2) | In applying the provisions of paragraph (1), in cases of a condition of long-term installment arrangement under Article 162(1)3, the dates of transfer and acquisition under the that subparagraph shall be deemed the date of receiving or paying the price of transfer or acquisition. <Added on Dec. 31, 2001> |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 11, 2020]
| Article 178-6 Deleted. <Feb. 13, 2018> |
| Article 178-7 (Foreign tax credit on capital gains of overseas assets) |
| (1) | "Capital gains tax for transfer of overseas assets prescribed by Presidential Decree" (hereafter referred to as "capital gains tax for transfer of oversea assets" in this Article) in the main clause of Article 118-6(1) of the Act, means any of the following tax amounts imposed by a foreign government (including a local government) on capital gains from overseas assets: <Amended on Feb. 18, 2010> |
| 1. | Amount of tax imposed by taking the amount of capital gains of an individual as the tax base; |
| 2. | Additional amount of tax on the tax imposed by taking the amount of capital gains of an individual as the tax base. |
| (2) | A person who intends to receive the deduction of capital gains tax of overseas assets or to have it included in necessary expenses under Article 118-6(1) of the Act, shall submit an application form for the deduction (inclusion in necessary expenses) of capital gains tax of overseas assets prescribed by Decree of the Ministry of Finance and Economy within the term of final return under Article 110 of the Act (including a preliminary return under Article 105 of the Act) to the head of the competent tax office having jurisdiction over the place over tax payment. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 11, 2020]
[Moved from Article 178-6 <Feb. 3, 2017>]
SECTION 8 Special Cases concerning Taxation on Domestic Stocks upon Departure of Residents
| Article 178-8 (Scope of majority stockholders) |
| (1) | "A majority stockholder prescribed by Presidential Decree" in Article 118-9(1)2 of the Act, means a person referred to in any subparagraph of Article 167-8(1). <Amended on Feb. 27, 2026> |
| (2) | Among stocks, etc. falling under Article 94(1)3c of the Act (hereafter in this Article and Article 178-9 referred to as "overseas stocks, etc."), overseas stocks, etc. falling under any of the following subparagraphs shall be excluded from stocks, etc. under Article 118-9(1) of the Act (hereafter referred to as "stocks, etc. of a person transferring residence abroad"): <Added on Feb. 27, 2026> |
| 1. | Overseas stocks, etc. owned by a person transferring residence abroad at the time of departure, the aggregate transfer value of which under Article 118-10(1) of the Act is not more than 500 million won; |
| 2. | Overseas stocks, etc. owned by a foreign executive officer or employee who provided labor in the Republic of Korea for at least 80 percent of the period from 10 years before the date of departure to the date of departure, during which he or she had a domicile or residence in the Republic of Korea (excluding daily workers and limited to a foreigner who departs from the Republic of Korea within 6 months from the date on which the provision of labor in the Republic of Korea ends; hereafter in this Article referred to as a "foreign worker"); |
| 3. | Overseas stocks, etc. owned by the spouse of a foreign worker and his or her lineal descendants aged 20 or younger (including the day on which they attain 20 years of age), acquired before the date on which such foreign worker began to provide labor in the Republic of Korea. |
[This Article Added on Dec. 31, 2024]
[Title Amended on Feb. 27, 2026]
| Article 178-9 (Market value as at date of departure) |
| (1) | The market value under the main sentence of Article 118-10(1) of the Act, shall be the trading price of the relevant stocks, etc. as at the date of departure of the person moving abroad under Article 118-9(1) of the Act (hereinafter referred to as "person moving abroad"). |
| (2) | "Method prescribed by Presidential Decree" in the proviso to Article 118-10(1) of the Act, means the following methods: <Amended on Feb. 27, 2026> |
| 1. | Stocks, etc. of a listed corporation: Standard market price under Article 99(1)3, 5 and 6 of the Act; |
| 2. | Stocks, etc. of an unlisted corporation: The value calculated by applying the following methods in the order: |
| a. | Where the relevant stocks, etc. are traded within three months before and after the date of departure, the value; |
| b. | Standard market value under Article 99(1)4 through 6 of the Act; |
| 3. | Overseas stocks, etc.: The market value as calculated pursuant to Article 178-3. |
[This Article Added on Dec. 31, 2024]
| Article 178-10 (Tax credits) |
A person who intends to claim the adjustment deduction under Article 118-12(1) of the Act, the foreign tax credit under Article 118-13(1) of the Act, or the tax credit for a nonresident's domestic source income under Article 118-14(1) of the Act shall submit, within 2 years from the date on which the stocks, etc. of a person transferring residence abroad are actually transferred, an application for tax credit in the form prescribed by Decree of the Ministry of Finance and Economy to the head of the tax office having jurisdiction over the place of tax payment (including submission through the national tax information and communications network; hereafter in this Section the same shall apply). <Amended on Dec. 30, 2025; Feb. 27, 2026>
[This Article Added on Dec. 31, 2024]
| Article 178-11 (Return and payment on stocks owned by persons transferring residence abroad) |
| (1) | A person who intends to report the tax manager and the status of holding of stocks, etc. of a person moving abroad in accordance with Article 118-15(1) of the Act, shall file a report on the tax manager and a report on the status of holding of stocks, etc. of a person moving abroad in the forms prescribed by Decree of the Ministry of Finance and Economy, with the head of the tax office having jurisdiction over the place for tax payment. <Amended on Dec. 30, 2025; Feb. 27, 2026> |
| (2) | A person who intends to file a return on the capital gains tax base under Article 118-15(2) of the Act shall submit a return on the capital gains tax base and a payment statement in the form prescribed by Decree of the Ministry of Finance and Economy to the head of the tax office having jurisdiction over the place of tax payment. <Amended on Dec. 30, 2025> |
| (3) | A person who intends to pay the tax by self assessment in accordance with Article 118-15(3) of the Act, shall pay it to the head of the tax office having jurisdiction over the place for tax payment, along with a return of the tax base of capital gains, or shall pay it the Bank of Korea or a post office, along with a payment statement under Article 5 of the National Tax Collection Act, which shall be accompanied by a return of the tax base of capital gains and a payment calculation sheet in the forms prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
| (4) | A person who intends to file an application for correction pursuant to Article 118-15(5) of the Act shall submit a written request for correction prescribed by Decree of the Ministry of Finance and Economy to the head of the tax office having jurisdiction over the place for tax payment, together with application for tax credit under Article 178-10. <Amended on Dec. 30, 2025> |
[This Article Added on Dec. 31, 2024]
[Title Amended on Feb. 27, 2026]
| Article 178-12 (Deferment of payment) |
| (1) | "If a person relocating overseas meets the requirements prescribed by Presidential Decree, such as providing security for tax payment or having a tax manager" in Article 118-16(1) of the Act means the cases meeting all the following requirements: |
| 1. | The person shall provide security under Article 18 of the National Tax Collection Act; |
| 2. | A tax manager shall be reported to the head of the tax office having jurisdiction over the place for tax payment in accordance with Article 118-15(1) of the Act. |
| (2) | "Cases prescribed by Presidential Decree, such as where a person moving abroad studies abroad" in Article 118-16(2) of the Act, means where a person moving abroad studies abroad, as defined in subparagraph 1 of Article 2 of the Regulations on Studying Abroad. |
| (3) | An amount equivalent to interest under Article 118-16(4) of the Act, shall be computed by the following formula: |
┌───────────────────────────────┐
│ Interest-equivalent amount = amount under Article 118-15(3) of the Act × the number of days from the day following the due date for filing │
│ to date of payment × the interest rate under the main clause of Article 43-3(2) of the Enforcement Decree of the Framework Act on National Taxes │
│ as of the date of application for payment deferral │
└───────────────────────────────┘
| (4) | A person who wishes to be eligible for deferment of payment under Article 118-16(1) of the Act, shall file an application for deferment of payment in the form prescribed by Decree of the Ministry of Finance and Economy, with the head of the tax office having jurisdiction over the place for tax payment, at the time he or she files a return on tax base of capital gains and the payment calculation sheet under Article 178-11(2). <Amended on Dec. 30, 2025> |
[This Article Added on Dec. 31, 2024]
CHAPTER IV TAX LIABILITIES OF NONRESIDENTS
SECTION 1 Common Provisions concerning Calculation of Amount of Tax on Nonresidents
| Article 178-13 Deleted. <Dec. 31, 2024> |
| Article 179 (Scope of domestic source income of nonresidents) |
| (1) | "Tools and instruments prescribed by Presidential Decree" in subparagraph 4 of Article 119 of the Act means vehicular contrivances, tools, appliances, and fixtures. <Amended on Feb. 18, 2010> |
| (2) | "Income prescribed by Presidential Decree" in the main sentence of subparagraph 5 of Article 119 of the Act means the following income generated from business conducted in the Republic of Korea from among the businesses under Article 19 of the Act; provided, in cases of a nonresident who conducts the business both in or outside the Republic of Korea, the following income shall be deemed income generated from the business conducted in the Republic of Korea: <Amended on Apr. 1, 1998; Dec. 31, 1998; Dec. 29, 2000; Dec. 30, 2003; Feb. 19, 2005; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Feb. 12, 2019; Feb. 11, 2020; Dec. 30, 2025> |
| 1. | Where a nonresident transfers the inventory assets in the Republic of Korea (including where the relevant inventory assets are transferred after manufacturing, etc. in the Republic of Korea) without manufacturing, processing, fostering and any other activities to increase values thereof in a foreign country on the inventory assets acquired abroad by transfer (hereafter referred to as "manufacturing, etc." in this Article), all income accruing from such transfer in the Republic of Korea; |
| 2. | Where a nonresident transfers in the Republic of Korea the inventory assets on which a manufacturing, etc. has been made abroad (including where the relevant inventory assets are transferred after manufacturing, etc. in the Republic of Korea), when presumed that he or she had acquired the relevant asset under ordinary transaction conditions with others who have engaged in manufacturing, etc. overseas, where transferring such assets (including cases of transfer after a manufacturing, etc. in the Republic of Korea), the income which would be accrued from such transfer, among the income accruing from such transfer; |
| 3. | Where a nonresident transfers overseas the inventory assets on which a manufacturing, etc. has been made in the Republic of Korea (including where the relevant inventory assets are transferred after manufacturing, etc. abroad), when it is presumed that he or she had transferred the relevant inventory asset produced in the Republic of Korea under ordinary trade conditions to others overseas, the income which would accrue from such manufacturing, etc. in the Republic of Korea, among income accruing from such transfer; |
| 4. | Where a nonresident concludes a contract for the construction, installation, assembly and other operations overseas, or where performing operation in the Republic of Korea by providing the necessary persons or materials, all income accruing from the relevant operation; |
| 5. | Where a nonresident operates accident insurance business or life insurance business both in the Republic of Korea and abroad, the income accruing from the insurance contracts which have been concluded through the business office related to the relevant business or the agent for concluding the insurance contracts, in the Republic of Korea, among the income accruing from the relevant business; |
| 6. | Where a nonresident operating a publishing business or broadcasting business engages in the business related to advertisement both in the Republic of Korea and abroad for others, the income accruing from the advertisement performed in the Republic of Korea, among the income accruing from the business related to the relevant advertisement; |
| 7. | Where a nonresident runs the international transport business by ships both in the Republic of Korea and abroad, the income accruing from the business in the Republic of Korea of the relevant nonresident which are assessed on the basis of the amount of income accruing in connection with the passengers boarding or the cargos shipped in the Republic of Korea; |
| 8. | Where a nonresident operates the international transport business by aircraft both in the Republic of Korea and abroad, the income accruing from the business in the Republic of Korea of the relevant nonresident which are computed by the method as determined by Decree of the Ministry of Finance and Economy in consideration of the amount of income and expenses in connection with the passengers boarding or the cargos shipped in the Republic of Korea, the value of tangible and intangible assets for a domestic business, and other levels, etc. of contributions of such domestic business to the income accruing from the relevant transport business; |
| 9. | Where a nonresident operates businesses other than those specified in subparagraphs 1 through 8 both in the Republic of Korea and abroad, when assumed that a separate independent business operator runs each business by dividing the business related to the relevant one into a domestic business and a foreign one, and that a transaction has been made between these independent business operators under the transaction price based on the ordinary conditions of transaction, the income accruing in relation to such domestic business which are assessed in consideration of the factors determined to be reasonable in measuring the income accruing from such domestic business, or the amount of income, expenses, and earnings, etc. relevant to such domestic business, among the income accruing from such business; |
| 10. | Income accruing from investment or similar activity in the stocks or equity shares issued by a foreign corporation which are listed in the securities exchange; |
| 11. | Income accruing from the transfer of industrial, commercial or scientific machinery, installation, apparatus, transport appliances, tools, utensils and equipment by nonresidents. |
| (3) | Notwithstanding paragraph (2), incomes accruing overseas, which revert to a domestic place of business, shall be deemed included in domestic source business income under subparagraph 5 of Article 119 of the Act: <Added on Dec. 31, 1998; Dec. 30, 2003; Feb. 29, 2008; Feb. 12, 2019; Feb. 11, 2020> |
| 1. | Deleted; <Feb. 11, 2020> |
| 2. | Deleted; <Feb. 11, 2020> |
| 3. | Deleted; <Feb. 11, 2020> |
| 4. | Deleted; <Feb. 11, 2020> |
| (4) | Where a nonresident performs overseas the advertisement, propagation, collection, and provision of information, market survey, and other activities of preliminary or supplementary nature for the business run in the Republic of Korea, or where he or she performs these activities in the Republic of Korea for the business run overseas, it shall be deemed that no income accrue from such activities. |
| (5) | Where the inventory assets under paragraph (2)1 through 3 fall under any of the following cases, the same paragraph shall apply as if the relevant inventory assets were transferred in the Republic of Korea: <Amended on Dec. 30, 2003> |
| 1. | Where the inventory assets are located in the Republic of Korea immediately before their transfer to the transferee, or where they are managed through the business run by the relevant nonresident in his or her domestic place of business, who is the transferor; |
| 2. | Where a contract for the transfer of the relevant inventory assets is concluded in the Republic of Korea; |
| 3. | Where the important portions from among activities such as taking orders or making negotiations for concluding contracts for the transfer of relevant inventory assets are performed in the Republic of Korea. |
| (6) | "Personal services prescribed by Presidential Decree" in the former part of subparagraph 6 of Article 119 of the Act means any of the following services, and "services prescribed by Presidential Decree, among personal services provided in a foreign country" means the services referred to in subparagraph 2, among those provided overseas: <Amended on Feb. 9, 2006; Feb. 18, 2010; Feb. 3, 2017> |
| 1. | Services provided by lawyers, certified public accountants, tax consultants, architects, registered surveyors, patent attorneys, and other similar professionals; |
| 2. | Services provided by persons of professional knowledge or special skill in the field of scientific technology or business management and other similar ones, making use of such knowledge or skill; |
| 3. | Services provided by professional athletes; |
| 4. | Services provided by actors, musicians, and other entertainers. |
| (7) | "Expenses prescribed by Presidential Decree, such as an air fare" in the latter part of subparagraph 6 of Article 119 of the Act, means air fares, accommodation expenses, or meal expenses which the person provided with manpower services actually paid to an airline, accommodation business, or restaurant business (including cases where expenses are paid through a person who provides manpower services) with regard to the provision of manpower services. <Added on Feb. 9, 2006; Feb. 18, 2010; Feb. 11, 2020> |
| (8) | "Income received in consideration of labor prescribed by Presidential Decree" in subparagraph 7 of Article 119 of the Act, means the following wages: <Amended on Feb. 9, 2006; Feb. 18, 2010; Feb. 3, 2015> |
| 1. | Wages received by the crew of ships sailing overseas, pelagic fisheries ships, and aircraft operated by a resident or a domestic corporation; |
| 2. | Wages received in the capacity of executive of a domestic corporation; |
| 3. | An amount appropriated for bonus under the Corporate Tax Act. |
| (9) | The determination on whether a corporation excessively owns real property of another corporation, as referred to in the latter part of subparagraph 9b2) of Article 119 of the Act, shall be based on whether the ratio of real property owned by the other corporation, as calculated by the following formula, is at least 50/100: <Added on Feb. 17, 2016> |
┌──────────────────┐
│ The value of assets owned │
│ by another corporation, │
│ as referred to in Article 94(1)1 and 2 │
│ of the Act / The total asset value │
│ of another corporation │
└──────────────────┘
| (10) | Deleted. <Feb. 4, 2009> |
| (11) | "Income prescribed by Presidential Decree" in subparagraph 11 of Article 119 of the Act, means the following income: <Amended on Oct. 25, 1997; Dec. 31, 1998; Dec. 31, 1999; Dec. 29, 2000; Aug. 14, 2001; Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012> |
| 1. | Income generated from the transfer of the securities or equity shares by a nonresident; provided, with respect to the income generated from transfer of the stocks or equity shares through the securities exchange (including where the stocks are transferred by intermediation under Article 78 of the Financial Investment Services and Capital Markets Act), cases where the relevant transferor and a related person under Article 98(1) with him or her possess, in the year to which the transfer date of the relevant stocks or equity shares belongs and for the period of the preceding five years, less than 25/100 of the total amount of outstanding stocks or that of equity shares of a corporation which has issued continuously such stocks or equity shares (in cases of the stocks or equity shares issued by a foreign corporation, the total amount of stocks or equity shares listed in the securities exchange) shall be excluded; |
| 2. | Income generated from transfer of securities other than stocks and equity shares by a nonresident having a domestic place of business; provided, the income subject to taxation under subparagraph 1 of Article 119 of the Act at the time of transfer of the relevant securities, shall be excluded; |
| 3. | Income generated from transfer of securities other than the stocks or equity shares by a nonresident, having no domestic place of business, to a domestic corporation, a resident, or the place of business of a nonresident or foreign corporation; provided, such income shall be excluded as those subject to taxation under subparagraph 1 of Article 119 of the Act at the time of transfer of relevant securities. |
| (12) | An income acquired by a nonresident, having no domestic place of business, through derivatives falling under any of the following subparagraphs, shall not be deemed a domestic source income: <Added on Dec. 31, 1998; Dec. 31, 1999; Feb. 19, 2005; Feb. 9, 2006; Feb. 4, 2009; Feb. 12, 2019> |
| 1. | Exchange-traded derivatives under Article 5(2) of the Financial Investment Services and Capital Markets Act; |
| 2. | Over-the-counter derivatives under Article 5(3) of the Financial Investment Services and Capital Markets Act the purpose of transaction of which is risk avoidance under Article 186-2 of the Enforcement Decree of that Act. |
| (13) | "Income prescribed by Presidential Decree" in subparagraph 12b of Article 119 of the Act, means the compensation for losses due to violation or termination of a contract on property rights, and which are the value of money or other valuables indemnified in excess of the losses in relation to the payment itself forming the original contract terms in spite of whatever pretext. <Amended on Dec. 29, 2000; Feb. 9, 2006; Feb. 18, 2010> |
| (14) | Article 158(4) and (5) shall apply mutatis mutandis to the calculation of the total amount of assets and the value of assets under subparagraph 9b of Article 119 of the Act. In such cases, "transfer date" shall be construed as "beginning date of the business year to which the transfer date belongs." <Amended on Feb. 4, 2009; Feb. 12, 2019; Feb. 11, 2020> |
| (15) | "Related nonresident prescribed by Presidential Decree" in subparagraph 12i of Article 119 of the Act, means any of the following related nonresidents: <Amended on Feb. 9, 2006; Feb. 22, 2008; Feb. 18, 2010; Feb. 17, 2021; Dec. 31, 2024> |
| 1. | Special relation with a resident or a domestic corporation under Article 2(2) of the Enforcement Decree of the Adjustment of International Taxes Act; |
| 2. | Special relation with a nonresident or a foreign corporation under Article 26-2(7)1a or b. |
| (16) | "Income generated from increase in the value due to capital transaction prescribed by Presidential Decree" in subparagraph 12i of Article 119 of the Act means income generated from the profits distributed to a nonresident who is a stockholder, etc. by another related stockholder under the subparagraphs of paragraph (15) due to the transactions falling under any item of Article 88(1)8 or Article 88(1)8-2 of the Enforcement Decree of the Corporate Tax Act. |
| (17) | The amount equivalent to compensation money such as dividends, etc. received by a nonresident having no place of business in the Republic of Korea by making the loan trade of securities (excluding bonds, etc. under Article 102; hereafter the same shall apply in this paragraph) under the Financial Investment Services and Capital Markets Act with the nonresident and foreign corporation having no place of business in the Republic of Korea, shall not be deemed a domestic source income. |
| (18) | Where the proviso of paragraph (11)1 applies, where a nonresident acquires or invests in (hereinafter referred to as "investment") stocks (hereafter referred to as "stocks" in this paragraph) of domestic corporations or foreign corporations (limited to foreign corporations listed on a securities market) through an investment scheme (referring to where a stockholder or investor of a corporation, other than the corporation, directly bears the tax liabilities for income derived from transfer of stocks or investment shares for tax purposes in a resident country; hereinafter the same shall apply), the ratio of ownership or investment of such stocks (hereinafter referred to as "investment ratio") shall be computed as follows: |
| 1. | Where a nonresident makes an investment through an investment scheme (hereinafter referred to as "indirect investment") only: The investment ratio of investment scheme. In such cases, where a nonresident has made an investment through at least two investment schemes, the investment ratio by each investment scheme shall be aggregated; |
| 2. | Where a nonresident makes an indirect and direct investment at the same time, not through investment schemes (hereafter referred to as "direct investment" in this subparagraph): The larger of the following rates computed as follows: |
| a. | The aggregate of investment ratios of indirect and direct investments by nonresident. In such cases, the nonresident's indirect investment ratio shall be computed by multiplying the ratio of nonresident's investment in investment scheme by the investment ratio of investment scheme; |
| b. | The investment ratio by investment scheme. In such cases, if investment is made through at least two investment schemes, the investment ratio of each investment scheme shall be aggregated to compute the investment ratio. |
| (19) | "Amount calculated as prescribed by Presidential Decree" in subparagraph 12l of Article 119 of the Act means the amount of virtual asset income calculated pursuant to Article 126(1)3 of the Act as if the relevant virtual assets were transferred at the time of withdrawing the virtual assets. <Added on Mar. 8, 2022> |
| Article 179-2 (Requirements for approval of qualified foreign financial companies) |
| (1) | A foreign financial company, etc. intending to obtain approval as a qualified foreign financial company, etc. under the former part of Article 119-3(2) of the Act (hereafter referred to as "qualified foreign financial company, etc.") from the Commissioner of the National Tax Service shall be a foreign corporation having its headquarters or principal office in a country with which the Republic of Korea has concluded a tax treaty, and shall be a corporation recognized by the Governor of the Financial Supervisory Service as performing business similar to that of the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act. <Amended on Dec. 31, 2024> |
| (2) | A foreign financial company intending to be approved as a qualified foreign financial company, etc. shall submit an application for approval of a qualified foreign financial company, etc., which is specified by Decree of the Ministry of Finance and Economy, to the Commissioner of the National Tax Service via the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act. <Amended on Dec. 30, 2025> |
| (3) | Upon receipt of the application under paragraph (2), the Commissioner of the National Tax Service shall grant approval of a qualified foreign financial company, etc., in cases of a corporation falling under paragraph (1). In such cases, the Commissioner of the National Tax Service may seek advice on whether an applicant is a corporation falling under paragraph (1) from the Korea Securities Depository. <Amended on Dec. 31, 2024> |
| (4) | Where a qualified foreign financial company, etc. falls under any of the following, the Commissioner of the National Tax Service may revoke the approval of a qualified foreign financial company, etc.: <Amended on Dec. 31, 2024> |
| 1. | Where it obtains approval by fraud or other improper means, such as false indications on application documents; |
| 2. | Where it has taxes in arrears and it is deemed significantly difficult to collect them; |
| 3. | Where it is deemed inappropriate to perform the business of a qualified foreign financial company, etc., such as non-compliance with the duties under each subparagraph of Article 179-3(1); |
| 4. | Where a qualified foreign financial company, etc. requests the Commissioner of the National Tax Service to revoke its approval as a qualified foreign financial company, etc. |
[This Article Added on Dec. 31, 2022]
| Article 179-3 (Matters to be observed by qualified foreign financial companies) |
| (1) | Qualified foreign financial companies, etc. shall perform the following duties: <Amended on Dec. 31, 2024; Feb. 28, 2025> |
| 1. | A qualified foreign financial company, etc. shall retain and keep materials regarding the personal information, such as the name, nationality, and place of residence, of non-residents (including a foreign investment vehicle deemed to be the beneficial owner pursuant to Article 119-3(3) of the Act; hereafter the same shall apply in this Article and Article 179-4) who acquire, hold, or transfer government bonds, etc. (hereafter referred to as "government bonds, etc." in this Article and Article 179-4) through such qualified foreign financial company, etc. (hereafter referred to as "personal information" in this Article); provided, where a non-resident acquires, holds, or transfers government bonds, etc. through a qualified foreign financial company, etc. via a foreign financial company, etc. that performs custodial services for securities issued in a country other than the relevant country (hereafter referred to as an "intermediary foreign custodial financial company, etc." in this Article and Article 179-4), the qualified foreign financial company, etc. may request such intermediary foreign custodial financial company, etc. to submit materials regarding the personal information of the relevant non-resident; |
| 2. | Deleted; <Feb. 28, 2025> |
| 3. | Deleted; <Feb. 28, 2025> |
| 4. | Where the Commissioner of the National Tax Service or an income payer (meaning a person that pays any of the income set forth in the subparagraphs of Article 119-3(1) of the Act; hereafter referred to as "income payer" in Article 179-4) requests the submission of the materials under subparagraph 1, the qualified foreign financial company, etc. shall submit such materials within 30 days from the date of such request (or within 60 days in cases falling under the proviso of that subparagraph); |
| 5. | Where the Commissioner of the National Tax Service specifies conditions when granting approval of qualified foreign financial company, etc., the relevant qualified foreign financial company, etc. shall comply with such conditions. |
| (2) | Deleted. <Feb. 28, 2025> |
[This Article Added on Dec. 31, 2022]
[Title Amended on Dec. 31, 2024]
| Article 179-4 (Application for non-taxation on interest income and capital gains of state bonds of nonresident) |
| (1) | An application for tax exemption by a non-resident under Article 119-3(4) of the Act (including a foreign investment vehicle deemed to be the beneficial owner pursuant to paragraph (3) of that Article; hereafter the same shall apply in this Article) shall be made in accordance with the procedures classified in the following subparagraphs: in such cases, where a non-resident intends to apply for tax exemption on other interest or capital gains arising from government bonds, etc. after having obtained tax exemption pursuant to such application, the procedures classified in the following subparagraphs need not be followed again if there is no change in the details of the original application: <Amended on Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Where income set forth in the subparagraphs of Article 119-3(1) of the Act arising from government bonds, etc. acquired, held, or transferred without going through a qualified foreign financial company, etc. is paid to a non-resident: Procedures in the order of the following items: |
| a. | A non-resident shall submit to the income payer an application for tax exemption for non-residents prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "application for tax exemption for non-residents" in this Article); |
| b. | The income payer shall submit an application for tax exemption for non-residents received pursuant to item a to the head of the tax office having jurisdiction over the place of tax payment by the 9th day of the month following the month in which the relevant income is paid; |
| 2. | Where income set forth in the subparagraphs of Article 119-3(1) of the Act arising from government bonds, etc. acquired, held, or transferred through a qualified foreign financial company, etc. (including cases going through an intermediary foreign custodial financial company, etc.) is paid to a non-resident: Procedures in the order of the following items: |
| a. | The qualified foreign financial company, etc. shall prepare an application for tax exemption for qualified foreign financial companies, etc. prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "application for tax exemption for qualified foreign financial companies, etc." in this Article) and submit it to the income payer; |
| b. | The income payer shall submit the application for tax exemption for qualified foreign financial companies, etc. received pursuant to item a to the head of the tax office having jurisdiction over the place of tax payment by the 9th day of the month following the month in which the relevant income is paid. |
| (2) | Deleted. <Feb. 28, 2025> |
| (3) | Deleted. <Feb. 28, 2025> |
| (4) | The nonresident and the qualified foreign financial company, etc. may file an application under paragraph (1) through their agents (including a tax manager under Article 82 of the Framework Act on National Taxes). <Amended on Feb. 28, 2025> |
| (5) | Where a financial company, etc. underwrites, trades, brokers, or acts on behalf of a non-resident with respect to government bonds, etc. of the non-resident, paragraphs (1) and (4) shall apply by deeming that an agency or mandate relationship exists between such financial company, etc. and the non-resident. <Amended on Feb. 28, 2025> |
| (6) | Where an investment trader or investment broker under the Financial Investment Services and Capital Markets Act withholds taxes regarding the transfer of State bonds, etc. pursuant to the main clause of Article 156(6) of the Act, paragraphs (1) through (4) shall apply deeming that the investment trader or investment broker had a relationship of agency or delegation with the nonresident. <Amended on Feb. 28, 2025> |
| (7) | In cases where paragraph (5) or (6) does not apply and the address, domicile, main office, principal office, actual management place for the business or domestic place of business of an income payer is not located in the Republic of Korea, notwithstanding paragraph (1), a foreign investment vehicle, a nonresident or a qualified foreign financial company, etc. may directly submit a written application falling under the following classifications to the head of the competent tax office having jurisdiction over the place for tax payment: <Amended on Feb. 28, 2025> |
| 1. | Deleted; <Feb. 28, 2025> |
| 2. | In the case of a non-resident: The application for tax exemption for non-residents that shall be submitted to the income payer pursuant to paragraph (1)1a; |
| 3. | In the case of a qualified foreign financial company, etc.: The application for tax exemption for qualified foreign financial companies, etc. that shall be submitted to the income payer pursuant to paragraph (1)2a. |
[This Article Added on Dec. 31, 2022]
| Article 179-5 (Return and payment on income from state bonds by residents) |
| (1) | Deleted. <Feb. 27, 2026> |
| (2) | A resident investing in a foreign investment vehicle falling under Article 119-3(5) of the Act shall report the income under each subparagraph of paragraph (1) of that Article and pay taxes pursuant to Articles 17, 70, and 76 of the Act. <Amended on Feb. 27, 2026> |
[This Article Added on Feb. 28, 2023]
| Article 180 (Scope of agent of nonresident) |
| (1) | "Persons prescribed by Presidential Decree" in Article 120(3), with the exception of its subparagraph, of the Act means those falling under any of the following subparagraphs: <Amended on Feb. 18, 2010; Feb. 12, 2019; Feb. 27, 2026> |
| 1. | Persons who always keep the assets of a nonresident, and customarily delivers or transfers them; |
| 2. | A person who, as a broker, general commission agent, or other agent of an independent status, performs activities constituting an important part of the business, such as the conclusion of contracts, wholly or almost wholly for a non-resident having a special relationship as defined in Article 2(1)3 of the Adjustment of International Taxes Act (including where such person acts in the ordinary course of its own business); |
| 3. | Persons who collect insurance premiums or underwrite insurances on the insured article in the Republic of Korea, for nonresidents who operate insurance business (excluding reinsurance business). |
| (2) | "Related person prescribed by Presidential Decree" in the main sentence of Article 120(5)1, with the exception of its items, of the Act means persons falling under any subparagraphs of Article 183-2(2). <Added on Feb. 12, 2019> |
[Title Amended on Feb. 12, 2019]
| Article 180-2 (Method of taxation on nonresident) |
| (1) | "Nonresident prescribed by Presidential Decree" in the proviso to Article 121(2) of the Act means a nonresident referred to in Article 1-2(1)2 of the Act; provided, when Article 89(1)3 of the Act applies, a nonresident who meets the requirements referred to in Article 154(1)2b and c shall be excluded. <Amended on Feb. 15, 2013> |
| (2) | Where being taxed pursuant to Article 121(3) and (4) of the Act, the group deemed as the nonresident falling under the main sentence of Article 2(3), with the exception of its subparagraphs, of the Act shall be subject to application of the Act and this Decree and be taxed concerning the profits distributed to each member of the group. <Added on Feb. 15, 2013; Feb. 12, 2019> |
[This Article Added on Feb. 18, 2010]
[Title Amended on Feb. 15, 2013]
SECTION 2 Global Taxation on Nonresidents
| Article 181 (Calculation of tax base and amount of tax in global taxation) |
| (1) | The calculation methods of the tax base and amount of tax in cases of global taxation under Article 122(1) of the Act shall be as follows: <Amended on Dec. 31, 1999; Dec. 31, 2001; Feb. 2, 2012; Feb. 12, 2019; Feb. 11, 2020; Feb. 28, 2023> |
| 1. | In the calculation of necessary expenses for allowance for bad debt under Article 28 of the Act, such bad debt shall be confined to that concerning the business operated domestically by a nonresident; |
| 2. | In the calculation of necessary expenses for allowance for severance benefits under Article 29 of the Act, employees shall be limited to those who work regularly in the Republic of Korea for business operated domestically by a relevant nonresident; |
| 3. | Expenses under Article 33(1)1 through 4 and 12 of the Act shall include those imposed by a foreign government or foreign local government; |
| 4. | In the calculation of necessary expenses for contribution or business promotion expenses, etc. under Articles 34 and 35 of the Act, such contribution or business promotion expenses, etc. shall be confined to those concerning the business operated domestically; |
| 5. | Sale of the commodities, etc. under the long-term installment plan under subparagraph 4 of Article 48 shall be confined to that concerning the business operated domestically by a nonresident; |
| 6. | Construction, manufacturing and other services (including contracted construction and reservation sale) under subparagraph 5 of Article 48 shall be confined to those concerning the business operated domestically by a nonresident; |
| 7. | Depreciable assets under Article 62(2)1 and 2a through d shall be confined to those located in the Republic of Korea from among depreciable assets of a nonresident; |
| 8. | Inventory assets or securities under Articles 91 and 93 shall be confined to those located in the Republic of Korea among the relevant assets of a nonresident; |
| 9. | Intangible assets under Article 62(2)2e through g shall be confined to those to be reverted to the business operated domestically by a nonresident, or those concerning the assets in the Republic of Korea of a relevant nonresident, from among intangible assets of a nonresident; |
| 10. | Domestic source interest income under subparagraphs 1 of Article 119 of the Actor and domestic source dividend income under subparagraphs 2 of that Article shall be limited to those received in the Republic of Korea. |
| (2) | Those unrelated to the accrual of domestic source income from among the expenses, such as sales costs, general management costs and other expenses incurred at a domestic place of business, which are determined by Decree of the Ministry of Finance and Economy, shall not be included in necessary expenses under Article 27 of the Act. <Added on Dec. 31, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| Article 181-2 (Calculation of domestic source income concerning the transaction between domestic place of business and main office) |
| (1) | In determining the amount of income for each taxable period of a nonresident's domestic place of business, calculation of domestic source income in accordance with the transaction (hereinafter referred to as "inside trading") between a domestic place of business and its main office in a foreign country or other branches (hereafter referred to as "main office, etc." in this Article) shall be the amount calculated based on the arm’s length price under Article 183-2(1) (hereafter referred to as "arm’s length price" in this Article) unless otherwise provided for by this Act and this Decree. <Added on Feb. 15, 2013> |
| (2) | In applying paragraph (1), expenses incurred due to the inside trading shall be limited to those necessarily or reasonably related to the income attributable to the domestic place of business within the scope of the arm's length price and shall be included in necessary expenses; and the expenses prescribed by Decree of the Ministry of Finance and Economy such as interest incurred due to fund transactions shall not be included in the necessary expenses; provided, the same shall not apply to cases where the interest incurred due to fund transactions may be included in the necessary expenses in accordance with a tax treaty. <Amended on Feb. 11, 2020; Dec. 30, 2025> |
| (3) | In determining the amount of income for each taxable period of a nonresident's domestic place of business, the joint expenses among those of the main office, etc. which are reasonably related to accrual of domestic source income of the relevant domestic place of business shall be included in the necessary expenses by distributing to the domestic places of business. <Amended on Feb. 15, 2013> |
| (4) | When a nonresident calculates the amount of domestic source income generated from the inside trading pursuant to paragraphs (1) and (2), the nonresident shall submit the documents prescribed by Decree of the Ministry of Finance and Economy, including the detailed statement of inside trading and the statement of calculating the distribution of expenses, etc. to the head of the competent tax office having jurisdiction over the place for tax payment within six months from the last day of the month to which the end date of the taxable period under Article 5 of the Act belongs and shall retain and keep the evidentiary documents concerning on the calculation. <Added on Feb. 11, 2020; Feb. 15, 2022; Dec. 30, 2025> |
| (5) | In applying paragraphs (1) through (4), procedures for, and methods of, calculating the domestic source income generated from the inside trading and capitals, the scope of expenses to be distributed to domestic places of business and the method of distributing such expenses, methods of distributing expenses for each business type, methods of converting a foreign currency into Korean won upon distributing expenses and other necessary matters shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 15; Feb. 11, 2020; Dec. 30, 2025> |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 15, 2013]
| Article 182 (Return and payment by nonresident) |
| (1) | In global taxation on domestic source income of nonresidents under Article 124 of the Act, the provisions concerning the return and payment by residents under this Decree, except for the matters specified in paragraph (2) shall apply mutatis mutandis to reports and payments with regard thereto. <Amended on Feb. 15, 2022> |
| (2) | When a representative declarant files a final return on the tax base of global income of the nonresident member in a consolidated manner under Article 124(2) of the Act, he or she shall submit documents for the final return prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over his or her place for tax payment; provided, if the representative declarant is not a member of an entity that is obliged to pay income tax on its income for each member pursuant to the proviso, with the exception of the subparagraphs, of Article 2(3) of the Act or paragraph 4(1) of that Article, he or she shall submit such documents to the head of the competent tax office having jurisdiction over the place for tax payment of the relevant entity. <Added on Feb. 15, 2022; Dec. 30, 2025> |
| Article 183 (Calculation of tax base and amount of tax in cases of separate taxation on nonresident) |
| (1) | "Acquisition value and transfer expenses of the relevant securities verified, as prescribed by Presidential Decree" in Article 126(1)1 of the Act, means any of the following amounts, after confirming the acquisition value and transfer expenses of such securities by the receipt for investment amount or payment for the stocks, the transfer certificate, the receipt for purchase price, and other data proving the amount required for the investment, acquisition and transfer, which are to be submitted by the transferor of the securities under Article 179(11) or his or her agent, not later than the date for a tax collection through withholding on a withholding agent: <Amended on Dec. 31, 1998; Dec. 29, 2000; Feb. 19, 2005; Feb. 4, 2009; Dec. 30, 2010; Feb. 2, 2012> |
| 1. | Amount actually spent directly for the acquisition or transfer of relevant securities (including taxes, public charges or brokerage fees directly required following such acquisition or transfer); provided, where such securities are equity shares or stocks, and they contain those acquired by transferring the whole or part of surplus funds of the corporation to the amount of contribution or capital, it shall be the amount computed by applying mutatis mutandis Article 14(2) of the Enforcement Decree of the Corporate Tax Act; |
| 2. | The acquisition value of the securities transferred by the heir, donee and other persons corresponding thereto shall be the amount computed under subparagraph 1, by regarding the original decedent of relevant transferred property, the donor and other persons corresponding to them as the transferor of relevant securities; provided, where the relevant securities have been subjected to taxation under the Inheritance Tax and Gift Tax Act, the market value at the time of inheritance or donation of the relevant securities; |
| 3. | The value of securities acquired in the course of capital transactions falling under any item of Article 88(1)8 of the Enforcement Decree of the Corporate Tax Act or subparagraph 8-2 of the same paragraph shall be the amount, computed pursuant to subparagraph 1, plus the amount in Article 179(16). |
| (2) | In applying paragraph (1), the acquisition value to be deducted from the transfer value at the time of transfer of relevant securities by a nonresident retaining the securities of same item whose acquisition values are mutually different (in cases of bonds, referring to those of same item whose issuance conditions such as the face value, issuance date and maturity date, interest rate, etc. are identical), shall be calculated by the moving average method under Article 92(2)5. <Amended on Dec. 31, 1998> |
| (3) | "Prize money, supplementary prizes, etc. prescribed by Presidential Decree" in Article 126(1)2 of the Act means prize money and supplementary prizes under subparagraph 1 of Article 87. <Added on Feb. 4, 2009> |
| (4) | "Amount prescribed by Presidential Decree" in Article 126(1)2 of the Act means an amount equivalent to 80/100 of an amount of money received by a nonresident; provided, where necessary expenses actually involved exceed an amount of money equivalent to 80/100, the exceeding amount shall be also included. <Added on Feb. 4, 2009> |
| (5) | "Amount prescribed by Presidential Decree" in Article 126(1)3 of the Act means the amount calculated by multiplying the value of one virtual asset indicated by a virtual asset service provider and those similar thereto (hereinafter referred to as a "virtual asset service provider, etc.") that keep and manage such virtual asset as at the time of withdrawing the virtual asset by nonresident by the number of the virtual assets withdrawn. <Added on Mar. 8, 2022; Feb. 28, 2025> |
| (6) | "Necessary expenses prescribed by Presidential Decree" in Article 126(1)3 of the Act means the amount calculated by applying mutatis mutandis the provisions on the calculation of necessary expenses for virtual assets under Article 37(1)3 and (5) of the Act and Article 88(2) through (4) of this Decree. In such cases, the valuation method shall be the amount calculated by applying the moving average method under Article 92(2)5 to each virtual asset address of a user under Article 7(1)3 of the Act on the Protection of Virtual Asset Users; provided, where a non-resident directly deposits virtual assets with a virtual asset business operator, etc., the acquisition value of the deposited virtual assets shall be the amount obtained by multiplying the value per unit of the relevant virtual asset indicated by the relevant virtual asset business operator, etc. at the time of deposit by the quantity of the deposited virtual assets. <Added on Mar. 8, 2022; Feb. 28, 2025> |
| (7) | In calculating the amounts of income and necessary expenses under paragraphs (5) and (6), where the value of virtual assets is not indicated as a monetary amount, the relevant amount shall be calculated by applying Article 88(3) and (4) mutatis mutandis. In such cases, "exchange transaction" shall be construed as "deposit or withdrawal of virtual assets." <Added on Mar. 8, 2022> |
| Article 183-2 (Concept of arm's length price) |
| (1) | "Arm's length price prescribed by Presidential Decree" in the part other than the subparagraphs of Article 126(6) of the Act means the value computed by applying the method under Article 8 of the Adjustment of International Taxes Act and Article 5 through 16 of the Enforcement Decree of the same Act mutatis mutandis. <Amended on Feb. 18, 2010; Feb. 15, 2013; Feb. 17, 2021> |
| (2) | "Related nonresident prescribed by Presidential Decree" in Article 126(6)1 of the Act means any of the following relationship: <Amended on Feb. 9, 2006; Feb. 18, 2010; Feb. 15, 2013> |
| 1. | A nonresident, and his or her spouse, linear blood relatives, and siblings; |
| 2. | Where a nonresident owns directly or indirectly at least 50% of the stocks with voting rights of a foreign corporation. |
| (3) | Where the arm's length price under paragraph (1) is incomputable, the value assessed by applying Article 99(1)3 through 5 of the Act and Article 63(3) of the Inheritance Tax and Gift Tax Act mutatis mutandis shall be deemed the arm's length price. <Amended on Aug. 14, 2001; Feb. 18, 2010; Feb. 21, 2014> |
| (4) | With regard to the calculation of the indirect ownership ratio of stocks under paragraph (2)2, Article 2(3) of the Enforcement Decree of the Adjustment of International Taxes Act shall apply mutatis mutandis. <Added on Feb. 9, 2006; Feb. 17, 2021> |
| (5) | "Cases prescribed by Presidential Decree" in Article 126(6)2 of the Act means where the amount of difference between normal and transaction prices is at least 300 million won or at least the amount equivalent to 5/100 of the arm’s length price. <Added on Feb. 2, 2012; Feb. 15, 2013> |
[This Article Added on Dec. 31, 1998]
| Article 183-3 (Filing of data concerning OTC trading of securities by nonresidents) |
Where transfer of securities falling under Article 126(6)1 of the Act has been made without undergoing the securities exchange, the payer of income accruing from transfer of the relevant securities shall submit an examination paper on stock transfer value between the outside persons in special relations prescribed by Decree of the Ministry of Finance and Economy, by not later than the payment deadline for the withholding tax under Article 156(1) of the Act. <Amended on Feb. 29, 2008; Feb. 4, 2009; Feb. 2, 2012; Feb. 15, 2013; Dec. 30, 2025>
[This Article Added on Dec. 29, 2000]
| Article 183-4 (Special examples to return and payment by nonresidents on capital gains from transfer of securities) |
| (1) | A nonresident shall report and pay the amount equivalent to the withholding tax on income which has not been withheld, from among the income accruing from the transfer of stocks or equity shares, because he or she has failed to satisfy the tax base under the tax treaty at the time of transfer under Article 126-2 of the Act, to the head of the competent tax office having jurisdiction over the location of the domestic corporation issuing the relevant securities. |
| (2) | A nonresident who intends to report and pay the amount equivalent to the withholding tax on income which has not been withheld from among income accruing from the transfer of stocks or equity shares under para- graph (1), shall submit a settlement return on capital gains from transfer of securities by nonresident determined by Decree of the Ministry of Finance and Economy, by dividing the gross amount of transferred stocks of the relevant corporation which has been transferred in the same business year from the gross amount of transferred stocks for which the withholding tax has not been collected. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| (3) | "Stocks, investment shares, or other securities prescribed by Presidential Decree" in the main sentence of Article 126-2(3) of the Act means the securities falling under any of the following subparagraphs: <Added on Feb. 22, 2008; Feb. 4, 2009; Feb. 12, 2019> |
| 1. | Securities, such as stocks, etc. taxed pursuant to Article 18(4)1 and 2 of the Enforcement Decree of the Restriction of Special Taxation Act; |
| 2. | Securities (referring to those traded outside foreign securities markets) denominated in Korean won, which are traded in foreign countries. |
| (4) | Any nonresident who intends to make a report and payment pursuant to Article 126-2(3) of the Act shall make a report and payment to the head of the competent tax office having jurisdiction over the location of the domestic corporation that issued securities, such as the relevant stocks, etc. by preparing a return of nonresident on income from the transfer of securities prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 22, 2008; Feb. 29, 2008; Dec. 30, 2025> |
[This Article Added on Dec. 29, 2000]
| Article 183-5 Deleted. <Dec. 31, 2024> |
| Article 183-6 Deleted. <Dec. 31, 2024> |
| Article 183-7 Deleted. <Dec. 31, 2024> |
| Article 183-8 Deleted. <Dec. 31, 2024> |
| Article 183-9 Deleted. <Dec. 31, 2024> |
CHAPTER V WITHHOLDING TAX
SECTION 1 Withholding Tax
| Article 184 (Scope of business income subject to withholding tax) |
| (1) | "Business income prescribed by Presidential Decree" in Article 127(1)3 of the Act means income generated by providing services under Article 26(1)5 and 15 of the Value-Added Tax Act; provided, the following shall be excluded from such income: <Amended on Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Jun. 28, 2013; Feb. 29, 2024; Dec. 30, 2025> |
| 1. | Income amounting to the ratio of the price for medicines, calculated by the formula prescribed by Decree of the Ministry of Finance and Economy, to the business income earned by providing services of compounding medicines, as defined as follows: |
| a. | Dispensing services directly provided by a doctor or dentist pursuant to Article 23(4) of the Pharmaceutical Affairs Act, among the services prescribed in subparagraph 1 of Article 35 of the Enforcement Decree of the Value-Added Tax Act; |
| b. | Dispensing services under subparagraph 4 of Article 35 of the Enforcement Decree of the Value-Added Tax Act; |
| 2. | Income earned by providing services under subparagraph 1f of Article 42 of the Enforcement Decree of the Value-Added Tax Act. |
| (2) | Deleted. <Feb. 4, 2009> |
| (3) | Any person liable to withhold income tax when withholding tax pursuant to Article 127(1)3 and (2) of the Act shall be any of the following persons: <Amended on Dec. 30, 1995; Dec. 31, 1998; Feb. 19, 2005; Feb. 28, 2007; Feb. 18, 2010> |
| 2. | A taxpayer liable to corporate tax; |
| 3. | The State, a local government, or the local governments association; |
| 4. | A corporation established under the Civil Act and other Acts; |
| 5. | An organization deemed a corporation under Article 13(4) of the Framework Act on National Taxes. |
| Article 184-2 (Income from service charges) |
"Service charges prescribed by Presidential Decree" in Articles 127(1)8, 129(1)8, 144(2), and 164(1)7 of the Act means service charges exceeding 20/100 of the price for services provided by a business operator (including corporations), where a business operator provides any of the following services and issues an invoice, tax invoice, receipt, or sales slip of a credit card transaction in which service charges for the persons who provide services, as referred to in subparagraph 1f of Article 42 of the Enforcement Decree of the Value-Added Tax Act, are entered separately in addition to the price for such services (referring to the consideration for services provided, where a business operator is subject to Article 61 of the Value-Added Tax Act; hereafter the same shall apply in this Article) (applicable only where service charges are not counted as the business operator's income): <Amended on Dec. 31, 1999; Dec. 30, 2003; Feb. 19, 2005; Dec. 31, 2007; Feb. 29, 2008; Feb. 18, 2010; Jun. 28, 2013; Dec. 30, 2025>
| 1. | Services of food or lodging; |
| 1-2. | Massage clinics, barbershops, sports massage places, and other services provided at places similar thereto; |
| 2. | Services provided at taxable entertaining places under Article 1(4) of the Individual Consumption Tax Act; |
| 3. | Other services determined by Decree of the Ministry of Finance and Economy. |
[This Article Added on Dec. 31, 1998]
| Article 184-3 (Proxy and delegation of duty to withhold retirement income tax) |
| (1) | Upon making payment of a retirement income, a relationship of representation or delegation of the duty of withholding tax shall be deemed established between the financial companies, etc. falling under each of the following (hereafter referred to as "financial companies, etc." in this Article) and users, and Article 127(2) of the Act shall apply thereto: |
| 1. | A pension public corporation and a pension management group established in order to handle public pension plans pursuant to relevant public pension Acts; |
| 2. | A pension account administrator. |
| (2) | Where the financial companies, etc. and users, who are representing or entrusted with the affairs of withholding tax, make payment of retirement income, respectively, Article 148 of the Act shall apply mutatis mutandis to the settlement, etc. of said retirement income tax. |
[This Article Wholly Amended Feb. 15, 2013]
| Article 184-4 (Representation and delegation of duties of withholding tax on income generated from stocks deposited in Korea Securities Depository) |
By deeming that there is a relationship of representation or delegation of the duty of withholding tax between the person classified in the following subparagraphs and the person who has issued the relevant stocks, etc., Article 127(2) of the Act shall apply to the income and dividend income accrued from the stocks, etc. deposited in the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act [referring to stocks etc. under Article 294(1) of such Act (excluding the trust property to which Article 127(4) of the Act applies); hereinafter referred to as "stocks, etc." in this Article]:
| 1. | In case of the stocks, etc. owned by the person who has opened an account at the Korea Securities Depository (hereinafter referred to as "depositor" in this Article) pursuant to Article 309 of the Financial Investment Services and Capital Markets Act: the Korea Securities Depository; |
| 2. | In case of the stocks, etc. deposited from an investor to a depositor pursuant to Article 309 of the Financial Investment Services and Capital Markets Act: the depositor. |
[This Article Added on Feb. 12, 2019]
| Article 184-5 Deleted. <Dec. 31, 2024> |
| Article 185 (Payment of withholding taxes) |
| (1) | A withholding agent under Article 127 of the Act shall pay the withheld income tax to the competent tax office in charge of withholding, the Bank of Korea, or a postal service office along with a statement of payment under the National Tax Collection Act, within the deadline under Article 128 of the Act, and submit a report on the status of withholding determined by Decree of the Ministry of Finance and Economy (including submitting it by means of the Home Tax Service) to the head of the competent tax office in charge of withholding. <Amended on Dec. 31, 1996; Dec. 31, 1997; Apr. 1, 1998; Mar. 17, 2004; Feb. 19, 2005; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | A report on the status of withholding under paragraph (1) shall also contain the information on those who are not subject to any tax to be collected through withholding. <Amended on Dec. 31, 1996; Dec. 31, 1997> |
| Article 186 (Special cases concerning payment of withholding taxes) |
| (1) | "Withholding agent prescribed by Presidential Decree" in Article 128(2) of the Act, means any of the following withholding agents who have obtained approval from the head of the tax office having jurisdiction over withholding tax for semi-annual payment of the withholding tax on the income specified under Article 127(1) of the Act or who are designated, as determined by the Commissioner of the National Tax Service: <Amended on Feb. 18, 2010; Dec. 30, 2010; Feb. 3, 2015; Feb. 17, 2016; Dec. 29, 2017; May 4, 2021> |
| 1. | A withholding agent (excluding persons engaging in financial or insurance business) with not more than 20 full-time employees during the immediately preceding year (referring to the semi-annual term in which the application is filed, in cases of a business operator who commenced a new business; hereafter the same shall apply in this Article); |
| 2. | A religious organization. |
| (2) | The number of full-time employees during the immediately preceding year under paragraph (1)1 shall be the average number of persons employed on a regular basis as at the end of each month from January to December of the immediately preceding year. <Amended on Feb. 18, 2010; Feb. 17, 2016; Dec. 29, 2017; May 4, 2021> |
| (3) | A person who intends to obtain approval under paragraph (1) shall file an application with the head of the competent tax office having jurisdiction over withholding tax from the first to the last day of the month immediately preceding the semi-annual period wherein he or she intends to pay the withheld amount of tax semi-annually. <Amended on Dec. 31, 1998; Dec. 31, 1999> |
| (4) | The head of the competent tax office having jurisdiction over withholding tax in receipt of an application under paragraph (3) shall determine whether to approve in consideration of the degree of faithfulness of a report and payment of the amount withheld by a relevant withholding agent; and then shall notify thereof by not later than the end of the month following the half year to which the date of application belongs. In such cases, where a withholding agent has not been notified of whether approved within the period, he or she shall be deemed to have obtained approval. <Amended on Feb. 18, 2010> |
| (5) | Other matters necessary for the semi-annual payment of withheld amount of tax shall be determined by the Commissioner of the National Tax Service. <Amended on Dec. 31, 1998> |
| Article 187 Deleted. <Feb. 17, 2021> |
| Article 187-2 (Scope of life-long pension agreement) |
"Life-long pension agreement prescribed by Presidential Decree" under Article 129(1)5-2c of the Act means an agreement in which a subscriber to the agreement can receive pension until the date of his or her death without any right to early terminate the agreement.
[This Article Added on Feb. 15, 2013]
| Article 187-3 (Withholding tax rate for receipt of pension as retirement income) |
| (1) | The actual number of years of pension receipt under the latter part of the provisions, with the exception of the items, of Article 129(1)5-3 of the Act shall be determined by adding up the years from the taxable period to which the date of the next pension payment belongs, starting from the taxable period to which the first pension payment belongs; provided, in any of the following cases, the actual number of years of pension receipt shall be calculated according to the following classifications: <Added on Feb. 11, 2020> |
| 1. | Where there are more than two pension accounts: Calculating the actual number of years for each pension account; |
| 2. | In cases of transfer under Article 40-4(1) and (2): Calculating the actual number of years based on the number of years calculated by subtracting the number of years of taxable periods in which the pension is received in duplicate from the number of years aggregating the actual number of years of pension receipt for each pension account calculated pursuant to subparagraph 1. |
| (2) | The withholding tax rate for the non-pension payment under the latter part, with the exception of the items, of Article 129(1)5-3 of the Act shall be the rate computed by dividing the withholding tax rate calculated pursuant to Article 202-2(2) through (4) by the amount of non-pension payment, assuming that the pension income under the former part, with the exception of the items, of that subparagraph has been received as non-pension payments. <Amended on Feb. 11, 2020; Feb. 28, 2025> |
[This Article Added on Feb. 3, 2015]
[Title Amended on Feb. 11, 2020]
| Article 188 (Real name for interest or dividend income) |
| (1) | "Real name prescribed by Presidential Decree" in Article 129(2) of the Act means the real name under subparagraph 4 of Article 2 of the Act on Real Name Financial Transactions and Guarantee of Secrecy. <Amended on Dec. 31, 1997; Feb. 19, 2005> |
| (2) | Any person whose real name is not confirmed pursuant to paragraph (1) shall be deemed a resident under Article 2 of the Act, and shall be subject to Article 129(2) of the Act. <Amended on Feb. 18, 2010> |
| Article 189 (Simplified tax withholding table) |
| (1) | "Simplified tax withholding table for wage and salary income prescribed by Presidential Decree" in Article 129(3) of the Act shall be as Appendix 2. <Amended on Feb. 18, 2010> |
| (2) | "Simplified tax withholding table for pension income prescribed by Presidential Decree" in Article 129(3) of the Act shall be as Appendix 3. <Amended on Feb. 18, 2010> |
[This Article Wholly Amended on Dec. 29, 2000]
| Article 189-2 (Withholding tax from income received from indirect investment companies) |
| (1) | The amount subtracted in calculating the amount of withholding tax of a resident pursuant to Article 129(5)2 of the Act shall be the amount determined by multiplying the rate calculated in accordance with the following formula from the indirect investment foreign corporate tax for each resident under Article 117-2(1): <Amended on Feb. 27, 2026> |
| 1. | Where the withholding tax rate under Article 129(1) of the Act is less than the foreign withholding tax rate that applies to indirect investment foreign corporate tax: |
┌───────────────────────────────┐
│ │
│ │
│ (The withholding tax rate under Article 129(1) of the Act │
│ / The foreign withholding tax rate │
that is applied to the indirect investment foreign corporate tax) │
│ - The withholding tax rate under ? The withholding tax rate under │
│ Article 129(1) of the Act │
└───────────────────────────────┘
| 2. | Where the withholding tax rate under Article 129(1) of the Act is equal to or greater than the foreign withholding tax rate:1 - The withholding tax rate under Article 129(1) of the Act |
┌─────────────────────────┐
│ │
│ │
│ 1 - The withholding tax rate under Article 129(1) of the Act │
└─────────────────────────┘
| (2) | For the purposes of applying paragraph (1), the foreign withholding tax rate shall be the sum of the rates calculated according to the following formula for each investment target in which the indirect investment company, etc. has invested by any of the methods prescribed in the subparagraphs of Article 117-2(1). <Added on Feb. 27, 2026> |
┌───────────────────────────────┐
│ │
│ │
│ │
│ A × C │
│ │
│ B │
│ │
│ A: Indirect foreign corporate tax amount calculated according to each subparagraph of Article 117-2(1) │
│ corresponding to income arising from the relevant investment target │
│ B: The total amount of foreign corporate tax on indirect investment by investment target │
│ C: Foreign withholding tax rate for each investment target │
│ (foreign tax paid by the indirect investment company, etc. in the │
│ immediately preceding business year or accounting period ÷ amount │
│ of foreign-source income corresponding to such foreign tax paid). │
│ If such rate cannot be calculated, the relevant foreign withholding │
│ tax rate shall be 14/100. │
│ │
│ │
└───────────────────────────────┘
| (3) | In applying paragraph (1), where income paid from an individual comprehensive asset management account under Article 91-18(1) of the Act on Restriction on Special Cases concerning Taxation includes income paid from two or more indirect investment companies, etc., the sum of the indirect investment foreign corporation tax amounts for each such indirect investment company, etc. shall be the indirect investment foreign corporation tax amount of the relevant individual comprehensive asset management account, and the calculation shall be made on the basis that the foreign withholding tax rate is 14/100. <Added on Feb. 28, 2025> |
| (4) | The amount under Article 129(8)2 of the Act shall be the cumulative aggregate of the amounts calculated in accordance with the following formula each time an indirect investment company, etc. pays income. <Added on Feb. 27, 2026> |
┌─────────────────────────┐
│ under Article 117-2(1) │
│ resident-specific │
│ indirect investment foreign corporation tax │
│ amount × 0.55 │
└──────────────────┘
[This Article Added on Feb. 28, 2023]
| Article 190 (Special cases concerning timing for withholding tax from interest income) |
Income tax shall be withheld from any of the following interest incomes, as the relevant income is deemed paid on the following dates: <Amended on Dec. 30, 1995; Dec. 31, 1997; Dec. 31, 1998; Dec. 31, 1999; Feb. 19, 2005; Feb. 9, 2006; Feb. 4, 2009; Feb. 18, 2010; Nov. 15, 2010; Dec. 30, 2010; Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2015; Feb. 12, 2019; Jun. 25, 2019>
| 1. | Interest and the discounted value of bills sold or mediated by financial companies, etc., short-term bonds, etc. under Article 59 of the Act on Electronic Registration of Stocks and Bonds (hereinafter referred to as "short-term bonds, etc." in this subparagraph), and cover notes sold by banks defined in Article 2 of the Banking Act (including banks provided for in Article 61(2)2 through 4 of the Enforcement Decree of the Corporate Tax Act; hereafter in this Article, referred to as "bank") and mutual savings banks under the Mutual Savings Banks Act, traded by the passbooks in custody (in cases of cover notes sold by a bank, including cover notes which are not traded by the passbooks in custody); provided, the foregoing shall apply only where any person who receives interest and discounted value of the relevant bills and short-term electronic bonds, etc. chooses to withhold on the date of said discount sale where such bills are deposited, from the date of issuance thereof to the date of expiry, in the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act, or the short-term bonds, etc, are kept electronically registered, from the date of issuance thereof to the date of expiry, with the electronic registries under subparagraph 6 of Article 2 of the Act on Electronic Registration of Stocks and Bonds: The date of discount sale; |
The date of discount sale;
| 1-2. | Domestic source interest income provided for in subparagraph 1b of Article 119 of the Act, in cases of withholding tax under Article 156 of the Act: The closing date of return deadline for the tax base (where the return period is prolonged under Article 97(2) of the Corporate Tax Act, the closing date of such prolonged return period) for the income in the current business year or the taxable period of the foreign corporation paying the relevant income or of the nonresident; |
The closing date of return deadline for the tax base (where the return period is prolonged under Article 97(2) of the Corporate Tax Act, the closing date of such prolonged return period) for the income in the current business year or the taxable period of the foreign corporation paying the relevant income or of the nonresident;
| 1-3. | Income distributed pursuant to Article 100-18(1) of the Restriction of Special Taxation Act, which has not been paid until the date three months have passed after the end of the taxable period for the relevant partner enterprise: The date three months have passed after the end of the taxable period for the relevant partner enterprise; |
The date on which three months have passed after the end of the taxable period for the relevant partner enterprise;
| 1-4. | Gains exceeding payments, where the repayment by a workplace mutual-aid association is paid in installments: The date the gains exceeding payments are transferred into principal under a special agreement that the gains shall be transferred into principal; |
| 2. | Other interest income: The dates prescribed by subparagraphs 1 through 5, 7 through 9, 9-2, and 10 of Article 45. |
The date provided for in subparagraphs 1 through 5, 7 through 9, 9-2 and 10 of Article 45
[Title Amended on Dec. 30, 2010]
| Article 191 (Special cases concerning timing for withholding tax from dividend income) |
Income tax shall be withheld from the following dividend income, considering that income was paid on the date under each of the following subparagraphs: <Amended on Feb. 19, 2005; Feb. 28, 2007; Feb. 22, 2008; Feb. 4, 2009; Feb. 18, 2010; Dec. 30, 2010>
The date stipulated in subparagraph 4 or 5 of Article 46;
| 2. | Dividend distributed to joint investment business operators, which has not been paid until the date on which three months have passed since the end of the taxable period: |
The date on which three months have passed after the end of the taxable period;
| 3. | Income distributed pursuant to Article 100-18(1) under the Restriction of Special Taxation Act, which has not been paid until the date on which three months have passed after the end of the taxable period for the relevant partner enterprise: |
The date on which three months have passed after the end of the taxable period for the relevant partner enterprise;
| 3-2. | Deleted; <Dec. 30, 2010> |
| 4. | Other dividend income: |
The dates prescribed in the subparagraphs of Article 46.
[This Article Wholly Amended on Dec. 29, 2000]
[Title Amended on Dec. 30, 2010]
| Article 192 (Notification of notice on changes in amount of income Derived from disposal of income) |
| (1) | Dividend income, bonus and other income which are disposed of (including cases where deemed disposed of pursuant to Article 49 of the Enforcement Decree of the Adjustment of International Taxes Act) in determining or revising the amount of corporate income by the head of a tax office or the commissioner of a regional tax office under the Corporate Tax Act shall be notified by the head of the competent tax office or the head of the competent regional tax office who determines or revises the amount of corporate income to the relevant corporation by a notice of change in the amount of income prescribed by Decree of the Ministry of Finance and Economy; provided, where the location of the relevant corporation is obscure, or where it is impracticable to forward such notice, the relevant stockholder and the resident subject to the disposition of the relevant bonus or other income shall be notified thereof. <Amended on Apr. 1, 1998; Dec. 30, 2002; Feb. 19, 2005; Feb. 29, 2008; Feb. 2, 2012; Feb. 15, 2013; Feb. 17, 2021; Dec. 30, 2025> |
| (2) | Deleted. <Dec. 30, 2010> |
| (3) | Deleted. <Dec. 30, 2010> |
| (4) | The head of a tax office or the commissioner of a regional tax office shall notify the relevant stockholder and the resident subject to the disposition of the relevant bonus or other income of the fact that the head of a tax office or the commissioner of a regional tax office notified the relevant corporation of the notice of change in the amount of income pursuant to paragraph (1) (the details of changes in the amount of income shall not be included). <Added on Feb. 22, 2008> |
[Title Amended on Dec. 30, 2010]
| Article 193 (Delivery of withholding tax receipts) |
| (1) | Deleted. <Dec. 30, 2010> |
| (2) | Deleted. <Dec. 30, 2010> |
| (3) | "Cases of notifying, as prescribed by Presidential Decree" in the proviso to Article 133(1) of the Act means cases falling under any of the following subparagraphs. In such cases, if the total annual amount of interest income and dividend income received, particulars of amount of withholding tax, and the business registration number, trade name or name of the corporation of a withholding agent (hereafter referred to as "business registration number, etc." in this Article) are recorded or notified, it shall be deemed that a withholding tax receipt is delivered: <Amended on Dec. 30, 1995; Dec. 31, 1997; Dec. 31, 1998; Dec. 31, 1999; Feb. 18, 2010; Feb. 28, 2025> |
| 1. | Where financial companies, etc. enter the details of such payment and the business registration number, etc. of a withholding agent on a passbook or a specification of financial transactions of the person who received interest income or dividend income, and makes a notification thereof; |
| 2. | Where a financial company, etc., upon application by a person receiving interest income or dividend income, notifies such person of the details of the payment and the business registration number, etc. of the withholding agent by mail or by electronic transmission medium under subparagraph 13 of Article 2 of the Act on Promotion of Information and Communications Network Utilization and Information Protection. |
| (4) | "Where the amount does not exceed the amount prescribed by Presidential Decree" in the main sentence of Article 133(2) of the Act means cases where the amount of interest income or dividend income accruing in one year by account falls short of one million won. <Amended on Dec. 29, 2000; Feb. 18, 2010> |
| Article 193-2 (Withholding taxes on bonds) |
| (1) | "Corporation prescribed by Presidential Decree" in Article 133-2(1) of the Act, means corporations (including the State, a local government, and a place of business in the Republic of Korea of a foreign corporation) under Article 2 of the Corporate Tax Act. |
| (2) | "Method of calculation of period prescribed by Presidential Decree" in Article 133-2(1) of the Act, means the method calculating the holding period from the date following the issuance date of the relevant bonds, etc., or the preceding date of withholding (hereafter referred to as "date of purchase" in this Article) to the date of sale (where a corporation is entrusted with sale, mediate or arrange the sale, the date of actual sale shall be deemed the date of sale) or the date of payment of interest, etc. (hereafter referred to as "date of sale" in this Article) by the number of days. |
| (3) | The amount equivalent to interest, etc. under Articles 46 and 133-2(1) of the Act (hereafter referred to as "amount equivalent to interest, etc. in the holding period" in this Article and Article 207-3), means the amount calculated by applying any of the following rates according to the formula of interest, etc. agreed for the period of calculation or interest, etc., to the holding period from the date of purchase to the date of sale of the relevant bonds, etc. (including an increase in principal according to the calculation method prescribed by Decree of the Ministry of Finance and Economy in cases of inflation-linked treasury bonds); provided, where there is a separate guaranteed yield to maturity when applying the rate of interest to convertible bonds, exchangeable bonds, or bonds with warrants, such guaranteed yield maturity shall be the rate of interest; where there is the conditional rate of interest, such conditional rate of interest shall be the rate of interest from the date such condition is satisfied; where the market prices of stocks are lower than the value of conversion or exchange on the date conversion or exchange is requested where convertible bonds or exchangeable bonds are converted or exchanged into stocks after a corporation which issued the convertible bonds or exchangeable bonds becomes bankrupt, the amount equivalent to interest, etc. of the holding period of a person who converts or exchanges the stocks shall be deemed nil; and where there is an agreement to pay interest after the request for conversion or exchange into stocks, the relevant rate of interest agreed shall apply from the date of request for conversion or exchange, as prescribed by Decree of the Ministry of Finance and Economy: <Amended on Jun. 8, 2010; Dec. 30, 2010; Feb. 17, 2016; Dec. 30, 2025> |
| 1. | Where a corporation issues bonds referred to in subparagraphs of Article 22-2(1) and (2) in an open market, a coupon rate; |
| 2. | In cases of bonds, etc., other than those specified in subparagraph 1, a rate calculated by adding up the discount rate and deducting the premium rate when a corporation issues the relevant bonds, etc. at a coupon rate. |
| (4) | Deleted. <Dec. 30, 2010> |
| (5) | "Date prescribed by Presidential Decree, such as the date of payment of interest, etc. or the date of sale of bonds, etc." in Article 133-2(1) of the Act, means the date of payment of the amount equivalent to interest, etc. of the relevant bonds, etc., or the date of sale of the relevant bonds, etc., and where the relevant bonds, etc. are inherited or donated, the date means the date of commencement of inheritance and the date of donation. |
| (6) | Where a resident or a nonresident sells the bonds, etc. withheld on the date prescribed in subparagraph 1 of Article 190 during the period of calculating interests through the intermediation by a relevant financial company, etc., the financial company, etc. concerned shall be deemed to have newly sold the bond, etc. concerned on the date of the early sale, calculate the interest, etc. and shall withhold tax thereof. <Added on Feb. 15, 2013> |
[This Article Added on Feb. 18, 2010]
| Article 193-3 Deleted. <Jun. 8, 2010> |
| Article 194 (Application of simplified tax withholding table for wage and salary income) |
| (1) | A withholding agent who withholds income tax pursuant to Article 134(1) of the Act shall collect the tax according to the tax amount specified in the relevant section in the Simplified Tax Withholding Table for Wage and Salary Income in Appendix 2 for wage and salary income; provided, if an employee applies for withholding an amount equivalent to 120/100 or 80/100 of the tax amount specified in the relevant section in the Simplified Tax Withholding Table for Wage and Salary Income in Appendix 2, the tax may be withheld according to the application. <Amended on, Jun. 30, 2015> |
| (2) | Where a withholding agent in a secondary working place withholds the tax in cases falling under paragraph (1), the relevant employee shall be deemed entitled only to the basic deduction for him or her and standard tax credits and shall apply the tax rate applicable to such cases. <Amended on Dec. 30, 1995; Aug. 22, 1996; Feb. 28, 2007; Feb. 21, 2014> |
| (3) | In any of the following cases, an employee shall prepare an application for the adjustment of the withheld amount of income tax in the form prescribed by Decree of the Ministry of Finance and Economy and submit it to the withholding agent or shall state the rate of the withheld tax amount in the report on income deduction and tax credits for the wage and salary income earner and submit it in accordance with Article 140(1) of the Act. In such cases, the changed rate of the withheld tax amount shall apply to wage and salary income paid on and after the date of submission of such documents: <Added on, Jun. 30, 2015; Feb. 17, 2016; Dec. 30, 2025> |
| 1. | Where it is intended to change the rate of the withheld tax amount under the proviso to paragraph (1); |
| 2. | Where it is intended to change the changed rate of the withheld tax amount under subparagraph 1 to any other rate of the withheld tax amount under paragraph (1). |
| (4) | Where an employee changes the rate of the withheld tax amount in any of the cases falling under paragraph (3), the changed rate shall apply to wage and salary income paid during the period from the date of change until the end of the relevant taxable period. <Added on, Jun. 30, 2015> |
[Title Amended on Dec. 29, 2000; Jun. 30, 2015].
| Article 195 (Tax withholding on bonuses, etc.) |
| (1) | In applying Article 136(1) of the Act, the calculation of the period subject to payment of the bonus, etc. and of the amount of tax shall be based on any of the following subparagraphs: |
| 1. | The bonus, etc. paid in the month, which is not the last month of the period subject to payment, shall be deemed the bonus without any period subject to payment; |
| 2. | In cases where the bonuses with mutually different periods subject to payment as stipulated in Article 136(1)1 and 2 of the Act are paid in the same month, such amount of tax shall be calculated by applying subparagraph 1 of the same paragraph after computing the period subject to payment by the following formula; provided, if there exist any fractions short of one month in calculating the period subject to payment, it shall be deemed one month: |
┌───────────────────────────┐
│ Period subject to payment = │
│ Aggregate of periods subject to payment of bonuses, etc. │
│ paid in the same month │
│ / Number of bonuses, etc. │
│ paid in the same month │
└───────────────────────────┘
| (2) | In applying Article 136(2) of the Act, the amount of tax to be withheld when paying the bonus, etc. by a disposal of the surplus funds, shall be the amount calculated by applying the basic tax rate to the bonus, etc. |
| (3) | Other matters necessary for calculating the amount of tax to be collected on the bonuses, etc. shall be determined by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
[This Article Wholly Amended on Dec. 31, 1996]
| Article 196 (Year-end tax settlement for wage and salary income tax) |
| (1) | A withholding agent who pays the monthly wage and salary income pursuant to Article 134 of the Act, shall prepare and record a book for tax withholding for wage and salary income prescribed by Decree of the Ministry of Finance and Economy (hereinafter referred to as "book for tax withholding for wage and salary income"). In such cases, if the book for tax withholding for wage and salary income is recorded and kept in computerized tapes or diskettes so as to be retrieved at any time, the book for tax withholding for wage and salary income shall be deemed kept and recorded. <Amended on Dec. 31, 1996; Apr. 1, 1998; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| (2) | A withholding agent shall make the amount, as the tax base, which is obtained by making income deduction under the Act and the Restriction on Special Taxation Act, from the aggregate of wage and salary income by earner which is paid in the relevant taxable period by the book for tax withholding for wage and salary income, and calculate the computed amount of tax of global income by applying the basic tax rate. <Amended on Aug. 22, 1996; Dec. 31, 2001; Feb. 19, 2005; Feb. 18, 2010> |
| (3) | A withholding agent shall collect, as income tax, the amount obtained by deducting the following amounts from the computed tax amount on global income under paragraph (2); provided, if the aggregate of the following amounts exceeds the computed tax amount on global income, such excess shall be refunded: <Amended on Dec. 30, 2010; Feb. 21, 2014> |
| 1. | The tax amount to be withheld under Article 134(1) of the Act (excluding an additional tax); |
| 2. | The amount of tax credits which include foreign tax credits, tax credits on wage and salary income, and special tax credits. |
| (4) | With respect to a worker's wage and salary paid by a person, other than a withholding agent, by providing labor to the withholding agent (including a refund under Article 38(1)16), the relevant withholding agent shall make a year-end tax settlement by including the relevant amount in wage and salary income. <Added on Dec. 31, 2001; Feb. 19, 2005; Feb. 4, 2009> |
| Article 196-2 (Report on workplace of persons receiving wages and salaries from two or more persons) |
Any person who receives wages and salaries from two or more employers, shall determine his or her principal workplace and secondary workplace by the end of the relevant taxable period, and submit a report on workplace (or change) prescribed by Decree of the Ministry of Finance and Economy to the withholding agent of the principal workplace. <Amended on Dec. 30, 2025>
[This Article Wholly Amended on Dec. 30, 2010]
| Article 197 (Year-end tax settlement for wage and salary income of reemployed persons) |
| (1) | In cases where an wage and salary income earner who has retired in the middle of the relevant taxable period is newly employed at another workplace, a withholding agent of such new workplace shall have the relevant wage and salary income earner submit the withholding tax receipts for wage and salary income at the former workplace, and a copy of the book for tax withholding for wage and salary income, and conduct the year-end tax settlement by applying Article 196 mutatis mutandis to the aggregate of wage and salary income at the former workplace. <Amended on Feb. 18, 2010> |
| (2) | Deleted. <Dec. 30, 2010> |
| Article 198 (Wage and salary income earners’ reporting on income deductions and tax credits) |
| (1) | Any person with wage and salary income (excluding wage and salary income specified in any item of Article 127(1)4 of the Act), shall submit (including submission through the Home Tax Service network) a report on income deductions and tax credits for the wage and salary income earner to a withholding agent by not later than the date the person receives the wage and salary for February of the year immediately following the relevant taxable period (or by not later than the date a person receives the wage and salary for the month in which he or she retires, if the person retires). <Amended on Dec. 31, 1996; Feb. 4, 2009; Feb. 18, 2010; Feb. 21, 2014; Feb. 17, 2016> |
| (2) | A wage and salary income earner shall submit a report on income deductions and tax credits for the wage and salary income earner, along with a certified transcript of the relevant resident registration card; provided, the certified transcript of the relevant resident registration card need not be submitted, if the person has already submitted the same certified transcript of the resident registration card and there is no change in the spouse or dependents eligible for deductions. <Added on Dec. 30, 2010; Feb. 21, 2014> |
| (3) | In submitting a report under paragraph (1), if a person falls under Article 53(2) of the Act, a status list of cohabiting family members of a temporary withdrawer shall be attached to a report on income deductions and tax credits for the wage and salary income earner. <Amended on Dec. 31, 1996; Feb. 21, 2014> |
[Title Amended on Feb. 21, 2014]
| Article 199 Deleted. <Dec. 30, 2010> |
| Article 200 Deleted. <Dec. 30, 2010> |
| Article 201 (Refund of wage and salary income through year-end tax settlement) |
| (1) | Where a withholding agent makes a refund to a wage and salary income earner for excessive or under-payment in income taxes which have been already paid by the withholding agent at source, in making the year-end tax settlement for the amount of tax on wage and salary income, such refund amount shall be adjusted and refunded out of the income taxes to be paid under withholding by the withholding agent. |
| (2) | In cases of paragraph (1), if no income tax exists to be paid under withholding by a withholding agent, it shall be refunded, as prescribed by Decree of the Ministry of Finance and Economy. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| Articles 201-2 through 201-4 Deleted. <Jun. 8, 2010> |
| Article 201-3 Deleted. <Jun. 8, 2010> |
| Article 201-4 Deleted. <Jun. 8, 2010> |
| Article 201-5 (Application of simplified tax withholding table for pension income) |
When withholding income tax under Article 143-2(1) of the Act, such withholding shall be made on the basis of the amount of tax indicated on the corresponding column of Appendix 3, the simplified tax withholding table for pension income.
[This Article Added on Dec. 29, 2000]
| Article 201-6 (Year-end tax settlement for pension income tax) |
| (1) | A withholding agent who pays a monthly pension income under Article 143-2 of the Act shall retain and record a book for tax withholding for pension income determined by Decree of the Ministry of Finance and Economy (hereinafter referred to as "book for tax withholding for pension income"). In such cases, if the book for tax withholding for pension income is recorded and kept in computerized tapes or diskettes so as to be retrieved at any time, the book for tax withholding for pension income shall be deemed kept and recorded. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| (2) | A withholding agent who pays public pension income shall compute the assessed amount of tax on gross income by applying the basic tax rate to the tax base determined by making pension income deductions and personal deductions for dependents from the aggregate of pension income of each income earner which has been paid during the pertinent taxable period according to the book for tax withholding on pension income. <Amended on Feb. 18, 2010; Dec. 30, 2010; Feb. 15, 2013; Feb. 21, 2014> |
| (3) | A withholding agent shall collect, as income tax, the amount obtained by deducting the following amounts from the assessed amount of tax on gross income under paragraph (2); provided, if the aggregate of the following amounts exceeds the assessed amount of tax on gross income, such excess shall be refunded: <Amended on Feb. 21, 2014> |
| 1. | Amount of tax to be withheld under Article 143-2(1) of the Act (excluding the additional amount of tax); |
| 2. | Foreign tax credit for pension income; |
| 3. | Tax credits for children; |
[This Article Added on Dec. 29, 2000]
| Article 201-7 (Pension income earners’ reporting on income deductions and tax credits) |
| (1) | Where a pension income earner submits a report on income deductions and tax credits for the pension income earner pursuant to Article 143-6(1) and (2) of the Act, Article 198(2) shall apply mutatis mutandis to the submission of a certified transcript of the relevant resident registration card. <Amended on Dec. 30, 2010; Feb. 21, 2014> |
| (2) | If a pension income earner has a person who falls under Article 53(2) of the Act when he or she submits a report on income deductions and tax credits for his or her pension income pursuant to Article 143-6(1) and (2) of the Act, the report on income deductions and tax credits for his or her pension income shall be accompanied by a list of family members who temporarily moved out but live together. <Amended on Dec. 30, 2010; Feb. 21, 2014> |
| (3) | A withholding agent who pays public pension income shall prepare a report on income deductions and tax credits for each pension income earner and may post the report on an information and communications network, and a pension income earner may submit the report on income deductions and tax credits for the pension income earner through the information and communications network. <Added on Feb. 22, 2008; Dec. 30, 2010; Feb. 15, 2013; Feb. 21, 2014> |
| (4) | If a pension income earner confirms that there is no error in the report on income deductions and tax credits prepared by the withholding agent (including where there is an error, but the pension income earner has corrected the error), the report on income deductions and tax credits shall be deemed prepared and submitted by the pension income earner him or herself. <Added on Feb. 22, 2008; Feb. 21, 2014> |
| (5) | Upon receipt of a request from a pension income earner to allow him or her to inspect and correct the report on income deductions and tax credits on his or her pension income, the withholding agent shall allow such request. <Added on Feb. 22, 2008; Feb. 21, 2014> |
[This Article Added on Dec. 29, 2000]
[Title Amended on Feb. 21, 2014]
| Article 201-8 (Issuance of withholding tax receipts for pension income) |
"If such notice shall be given in accordance with the details and methods prescribed by Presidential Decree" in the proviso to Article 143-7 of the Act, means where notice is given through an information and communications network (limited to where the relevant pension income earner has applied for it) or in writing or by facsimile with regard to the total amount of annually received pension income; details of the withholding tax amount; and the business registration number and trade name or corporation name of the withholding agent.
[This Article Added on Feb. 3, 2015]
| Article 201-9 Deleted. <Feb. 15, 2013> |
| Article 201-10 (Issuance of written confirmation of income deductions and tax credits for confirming tax-exempt amount) |
| (1) | If any of the following persons (hereafter referred to as "pension income earner" in this Article) has a tax-exempt amount (referring to tax-exempt contributions, etc. in cases of public pension income; hereafter the same shall apply in this Article) and intends to have it confirmed, he or she shall request the head of the competent tax office to issue a written confirmation of income deductions and tax credits on pension contributions, etc. and then submit it to the withholding agent: <Amended on Feb. 21, 2014> |
| 1. | A person who intends to receive various pension money and lump sum payment pursuant to public pension-related Acts; |
| 2. | A person who intends to withdraw money from a pension account; |
| 3. | A person who intends to receive other income pursuant to Article 21(1)18 of the Act. |
| (2) | Upon receipt of a written confirmation of income deductions and tax credits on pension contributions, etc. under paragraph (1), a withholding agent shall confirm an excess amount as tax-exempt, if the pension contributions, etc. already paid (excluding the amount already confirmed as tax-exempt; hereafter referred to as "paid amount subject to confirmation" in this Article) exceed the amount of income deductions and tax credits. <Amended on Feb. 21, 2014> |
| (3) | Upon receipt of a written confirmation of income deductions and tax credits on pension contributions, etc. under paragraph (1), a withholding agent (limited to a pension account administrator) shall confirm the smaller of the following amounts, as tax-exempt for the relevant pension account, notwithstanding paragraph (2), if the details of payments in other pension accounts held by the pension income earner, etc. are confirmed through the agency collecting data on tax- favored savings under Article 89-2(1) of the Restriction of Special Taxation Act: <Amended on Feb. 21, 2014; Feb. 3, 2017> |
| 1. | The excess amount, if the aggregate of the amount paid to the relevant pension account subject to confirmation and the amount paid to other pension accounts exceeds the amount of tax credits received; |
| 2. | A relevant pension account’s paid amount subject to confirmation. |
| (4) | The form of the written confirmation of income deductions and tax credits on pension contributions, etc. under paragraph (1) shall be prescribed by Decree of the Ministry of Finance and Economy, and the head of the competent tax office and the relevant pension account administrator shall immediately issue a written confirmation of income deductions and tax credits on pension contributions, etc. and a written confirmation of pension payments, upon receipt of a request from a pension income earner, etc. to issue such documents. <Amended on Feb. 21, 2014; Dec. 30, 2025> |
| (5) | The relevant pension account administrator shall keep information on pension payments necessary to issue a written confirmation of pension payments pursuant to paragraph (4) without a specific retention period. <Added on Feb. 11, 2020> |
[This Article Wholly Amended Feb. 15, 2013]
[Title Amended on Feb. 21, 2014]
| Article 201-11 (Year-end tax settlement for tax amount of business income) |
| (1) | Where a withholding agent responsible for tax withholding of business income under Article 137(1)2 and 3 intends to make a year-end tax settlement under Article 144-2(1) of the Act, he or she shall submit an application for year-end tax settlement for business income prescribed by Decree of the Ministry of Finance and Economy by the end of the relevant taxable period for which he or she wishes to make a year-end tax settlement, to the head of the competent tax office having jurisdiction over the relevant place of business. <Amended on Dec. 30, 2010 Presidential Decree No. 24356, Feb. 15, 2013; Dec. 30, 2025> |
| (2) | Deleted. <Dec. 30, 2010> |
| (3) | Where a withholding agent who has submitted an application for year-end tax settlement for business income pursuant to paragraph (1) intends not to make the year-end tax settlement, he or she shall submit a waiver of the year-end tax settlement of the tax amount of business income prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the relevant place of business by the expiration date of the relevant taxable period. <Amended on Dec. 30, 2010; Dec. 30, 2025> |
| (4) | "Amount calculated by multiplying the amount of business income in the relevant taxable period by the rate prescribed by Presidential Decree" in Article 144-2(1) of the Act means the amount calculated by multiplying the amount of income paid in the relevant taxable period by the rate prescribed by Decree of the Ministry of Finance and Economy in consideration of the income rate of income calculated according to the standard expense rate and simplified expense rate of the relevant type of business (hereinafter referred to as "income rate of business income subject to year-end tax settlement"). <Amended on Dec. 30, 2025> |
| (5) | Article 201 shall apply mutatis mutandis to cases where the excess amount pursuant to Article 144-2(4) of the Act is refunded to the relevant business operator. <Amended on Feb. 27, 2026> |
| (6) | Deleted. <Dec. 30, 2010> |
| (7) | A withholding agent under Article 144-2(1) of the Act shall prepare a withholding book for business income prescribed by Decree of the Ministry of Finance and Economy and record it every month. In such cases, where he or she records and keeps a withholding book for business income in data processed tape or disc, etc., and makes it ready for output at all times, he or she shall be deemed to prepare and record a withholding book for business income. <Amended on Dec. 30, 2025> |
| (8) | Deleted. <Dec. 30, 2010> |
| (9) | Deleted. <Dec. 30, 2010> |
| (10) | Where any person who has business income subject to year-end tax settlement files a final return on the tax base of global income pursuant to Article 70 of the Act, he or she may return the amount calculated pursuant to paragraph (4) as the amount of income of business income subject to year-end tax settlement. |
| (11) | Except cases where there are special provisions on the year-end tax settlement of the tax amount of business income in this Decree, he or she shall comply with examples of the year-end tax settlement of the tax amount of wage and salary income. |
[This Article Added on Jun. 8, 2010]
| Article 201-12 (Report on income deductions and tax credits on business income subject to year-end tax settlement) |
A business operator who wishes to be eligible for global income deductions, tax credits for children, tax credits on pension accounts, and special tax credits under Article 144-3 of the Act shall submit a report on income deductions and tax credits to the relevant withholding agent in the form prescribed by Decree of the Ministry of Finance and Economy, along with a certified transcript of the relevant resident registration card under Article 167(1) of the Act. <Amended on Feb. 21, 2014; Dec. 30, 2025>
[This Article Added on Jun. 8, 2010]
[Title Amended on Feb. 21, 2014]
| Article 202 (Amount of other income subject to tax withholding) |
| (1) | The amount of other income under Article 145(1) of the Act shall be calculated by deducting, from the relevant amount paid, the amount verifiable as necessary expenses commensurate with the said amount by the withholding agent, or necessary expenses under Article 87. <Amended on Dec. 30, 1995; Feb. 28, 2007> |
| (2) | "Amount prescribed by Presidential Decree" in the proviso to Article 145(2) of the Act, means one million won (referring to an amount before deducting necessary expenses). <Added on Feb. 28, 2007;Feb. 18, 2010> |
| (3) | When income tax is withheld pursuant to Article 145(1) of the Act, an income distributed pursuant to Article 100-18(1) of the Restriction of Special Taxation Act shall be withheld on the date when received; provided, when it has not been received until the date three months have passed since the expiration of the taxable period of the relevant partnership enterprise, it shall be withheld on the date such three months have passed. <Amended onFeb. 4, 2009> |
| (4) | Where a withholding agent withholds income tax pursuant to Article 145(1) of the Act, the applicable tax amount specified in the simplified table of tax amounts on income of religious persons in Appendix 3-4 shall be withheld from each religious person's income. <Amended on Dec. 29, 2017> |
| Article 202-2 (Calculation of deferred retirement income tax and withholding tax) |
| (1) | The retirement income tax not withheld or which is refunded pursuant to Article 146(2) of the Act (hereafter referred to as "deferred retirement income tax" in this Article) shall be the amount calculated according to the following formula (the amount of retirement income in the case of the refund shall be the amount deducting the amount of tax already withheld) |
┌──────────────────────┐
│ Retirement Income Tax × │
│ (Amount falling under each subparagraph of Article 146(2) of the Act │
│ │
│ ÷ Amount of Retirement Income) │
└──────────────────────┘
| (2) | Where a person receives deferred retirement income as a non-pension withdrawal, a withholding agent shall withhold the amount of deferred retirement income calculated according to the following formula |
┌───────────────────────┐
│ Amount of deferred retirement income tax │
│ at the time of a receipt other than pension │
│ × (Amount of deferred retirement income received │
│ as a non-pension withdrawal ÷ Amount of deferred retirement income │
│ at the time of a receipt other than pension) │
└───────────────────────┘
| (3) | "Amount of deferred retirement income tax at the time of a non-pension withdrawal" in the formula under paragraph (2) shall be the amount obtained by deducting the amount of tax on the aggregate amount of withdrawn deferred retirement income (hereafter referred to as "aggregate amount of withdrawn deferred retirement income" in this paragraph) from the aggregate amount of deferred retirement income tax before the non-pension withdrawal concerned |
┌──────────────────────┐
│ Aggregate amount of deferred retirement income tax │
│ × (Aggregate amount of withdrawn retirement income │
│ ÷ Aggregate amount of deferred retirement income) │
└──────────────────────┘
| (4) | In applying the formula under paragraph (3), where the retirement income tax amount has been settled pursuant to Article 148 of the Act before the relevant non-pension withdrawal, the deferred retirement income tax amount after settlement calculated pursuant to the former part of Article 203(5) shall be the cumulative deferred retirement income tax amount, and deferred retirement income withdrawn before such settlement shall not be included in the cumulative deferred retirement income amount nor in the cumulative withdrawn retirement income amount. <Added on Feb. 28, 2025> |
| (5) | A withholding agent who pays deferred retirement income shall, no later than the last day of the month following the month to which the date of payment of deferred retirement income belongs, issue the withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy to the person who has received as a non-pension withdrawal. <Amended on Feb. 28, 2025; Dec. 30, 2025> |
[This Article Added on Feb. 15, 2013]
| Article 202-3 (Procedure for refund of retirement income tax) |
| (1) | A person who intends to apply for the refund pursuant to the latter part of Article 146(2) of the Act (hereafter in this Article, referred to as "applicant for refund"), shall file a report on taxation-deferred account in the form prescribed by Decree of the Ministry of Finance and Economy with the pension account administrator, when retirement income is paid to or deposited in the pension account. <Amended Feb. 3, 2015; Dec. 30, 2025> |
| (2) | Upon receipt of a report on taxation-deferred account under paragraph (1), the pension account administrator shall submit the report to the withholding agent, and the withholding agent shall compute the refundable tax amount by the formula prescribed in Article 202-2(1), but refund it after adjusting the refundable tax amount from the income tax to be withheld and paid in the following month and thereafter, if the refundable income tax exceeds income tax to be withheld and paid in the month in which it is to be refunded; provided, if the withholding agent files an application for refund of the withholding tax in the form prescribed by Decree of the Ministry of Finance and Economy with the head of the competent tax office in charge of withholding the tax, the head of the competent tax office shall refund the excess. <Amended Feb. 3, 2015; Dec. 30, 2025> |
| (3) | The amount of tax to be refunded under paragraph (2) shall be refunded by transferring to or depositing in the pension account stated in the report on taxation-deferred account, and the relevant amount of tax to be refunded shall be included in deferred retirement income; provided, if the pension account administrator submits the report on taxation-deferred account to the head of the competent tax office in charge of withholding the tax from the withholding agent, due to business closure of the withholding agent or any other event, the head of the competent tax office may refund the refundable tax amount directly to the applicant. <Amended Feb. 3, 2015> |
| (4) | Where a retirement income tax is not withheld or refunded pursuant to Article 146(2) of the Act, the relevant withholding agent shall promptly notify the detailed statement of payment under Article 164 of the Act to the pension account administrator. |
[This Article Added on Feb. 15, 2013]
| Article 202-4 (Year-end settlement of religious persons’ income) |
| (1) | "Amount computed by the method prescribed by Presidential Decree" in Article 145-3(1) of the Act, means the balance of the amount that a religion-related worker received during the relevant taxable period after deducting necessary expenses under subparagraph 3 of Article 87 from the afore-mentioned amount and then deducting income tax already withheld and paid during the relevant taxable period after calculating the tax amount on global income, based on the amount to which deductions on global income, as reported in accordance with Articles 145-3(2) and 144-3 of the Act as the tax base of global income, and then applying tax credits under this Act and the Restriction of Special Taxation Act to the calculated tax amount on global income. |
| (2) | Articles 201-11 (excluding paragraph (4) of the same Article) and 201-12 shall apply mutatis mutandis to year-end settlement of a religious person's income, reporting of income deductions and tax credits, etc. In such cases, "business income" shall be construed as "religious person's income;" "business operator" or "business income earner" as "religion-related worker;" "application for year-end settlement of income tax on business income" as "application for year-end settlement of income tax of a religious person;" and "withholding book for business income" as "withholding book for religious person's income." |
[This Article Added on Feb. 17, 2016]
| Article 203 (Settlement of retirement income tax) |
| (1) | The retirement income tax to be settled pursuant to Article 148(1) of the Act shall be the amount obtained by deducting the amount of tax on the retirement income previously paid from the amount of retirement income tax calculated on the sum of the retirement income already paid and the retirement income to be paid by the person concerned (hereafter referred to as the "cumulative retirement income"). <Amended on Feb. 28, 2025> |
| (2) | Notwithstanding paragraph (1), where a retiree who has deferred retirement income among retirement income already paid receives retirement income, and the tax on the cumulative retirement income is less than the tax on the retirement income already paid, the retirement income tax to be settled pursuant to Article 148(1) of the Act shall be the amount calculated in accordance with the following formula; in such cases, the withholding agent shall request the retiree under the former part to submit pension account status data prescribed by Decree of the Ministry of Finance and Economy issued by a pension account administrator, and the retiree who has received such request shall submit the relevant pension account status data to the withholding agent or have the pension account administrator submit it to the withholding agent. <Added on Feb. 28, 2025; Nov. 28, 2025; Dec. 30, 2025> |
┌───────────────────────────────┐
│ │
│ │
│ A - (B + C + D) │
│ A: retirement income tax amount on the cumulative retirement income │
│ B: deferred retirement income tax amount before settlement* │
│ C: amount of tax withheld on the retirement income paid before settlement (excluding the │
│ refunded withholding tax pursuant to the latter part of Article 146(2) of the Act and │
│ the withholding tax on deferred retirement income withdrawn before settlement) │
│ D: amount of withholding tax calculated pursuant to Article 202-2(2) through (4), on the │
│ assumption that all deferred retirement income withdrawn before settlement is │
│ received as non-pension withdrawals │
│ │
│ * = E × F │
│ deferred retirement income tax amount before ─── │
│ settlement G │
│ │
│ E: retirement income tax amount on the cumulative retirement income │
│ F: amount obtained by deducting the cumulative deferred retirement income withdrawn before │
│ settlement from the cumulative deferred retirement income before settlement │
│ G: cumulative retirement income │
│ │
│ │
└───────────────────────────────┘
| (3) | The years of continuous service in cases of settlement of retirement income pursuant to paragraphs (1) and (2) shall be calculated in accordance with the number of months obtained by deducting the number of months for the overlapped period from the number of months aggregating the years of continuous service for the period of already paid and to be paid retirement income. <Amended on Feb. 28, 2025> |
| (4) | "Employment agreement prescribed by Presidential Decree" in Article 148(1)2 of the Act means an agreement entered into with one and the same employer for providing labor (including agreements entered into in cases falling under any subparagraph of Article 43(1)). <Amended on Feb. 17, 2016; Feb. 28, 2025> |
| (5) | Where a withholding agent settles the retirement income tax pursuant to the former part of paragraph (2), the withholding agent shall calculate the amount obtained by adding the deferred retirement income tax amount before settlement in the formula under paragraph (2) and the deferred retirement income tax amount calculated pursuant to Article 202-2(1) in respect of the retirement income to be paid by the withholding agent at the time of settlement (hereafter referred to as the "deferred retirement income tax amount after settlement"), and shall immediately notify the pension account administrator by reflecting such amount in the statement of payment under Article 164 of the Act. In such cases, where deferred retirement income is held in, or to be deposited into, two or more pension accounts, the deferred retirement income tax amount after settlement for each pension account shall be the amount apportioned out of the total deferred retirement income tax amount after settlement in proportion to the deferred retirement income for each pension account (excluding deferred retirement income withdrawn before settlement). <Added on Feb. 28, 2025> |
| (6) | A pension account administrator who receives the notification pursuant to the former part of paragraph (5) shall reflect the deferred retirement income tax amount after settlement for each pension account in preparing the pension account status data under the latter part of paragraph (2) and calculating the withholding tax pursuant to Article 202-2(2) through (4). <Added on Feb. 28, 2025> |
| (7) | Where the retirement income already received under Article 148(1) of the Act, from among the retirement income referred to in each subparagraph of that paragraph, includes retirement income arising overseas (hereafter in this paragraph referred to as "foreign-source retirement income"), and the retiree submits to the withholding agent a final return on the tax base of retirement income and payment statement under Article 135 for such foreign-source retirement income, he or she shall be deemed to have submitted the withholding tax certificate under the main clause of Article 148(1) of the Act. <Added on Feb. 27, 2026> |
[This Article Wholly Amended Feb. 15, 2013]
| Article 203-2 Deleted. <Dec. 31, 2024> |
| Article 203-3 Deleted. <Dec. 31, 2024> |
| Article 203-4 Deleted. <Dec. 31, 2024> |
| Article 203-5 Deleted. <Dec. 31, 2024> |
SECTION 2 Special Cases of Tax Withholding by Taxpayers Association
| Article 204 (Organization and operation of taxpayers association) |
| (1) | Any person who intends to organize a taxpayers association pursuant to Article 149 of the Act shall obtain approval from the commissioner of the competent regional tax office through the head of the competent tax office having jurisdiction over the relevant taxpayers association, after satisfying the following requirements: <Amended on Feb. 18, 2010> |
| 1. | A taxpayers association for persons with wage and salary income falling under any item of Article 127(1)4 of the Act shall have at least 50 taxpayers to become its members, and obtain consent from at least 2/3 of them; provided, where its members fall short of 50 persons due to regional peculiarities, a taxpayers association may be organized with such persons falling short thereof; |
| 2. | A taxpayers association of business operators under subparagraph 2 of Article 149 of the Act shall have at least 20 taxpayers to become its members; |
| 3. | Its purpose shall be limited to the management of tax payment under Article 153 of the Act, and the affairs related to the tax payment; |
| 4. | Affiliation with and secession from a taxpayers association shall not be compulsory; provided, this shall not apply where inflicting damage on other members with regard to tax payment, for which the articles of incorporation or bylaws of the relevant taxpayers association stipulate otherwise. |
| (2) | "Business operator prescribed by Presidential Decree" in subparagraph 2 of Article 149 of the Act, means any of the following: <Amended on Feb. 22, 2008; Feb. 18, 2010; Feb. 17, 2016> |
| 1. | Distributors of agricultural, livestock, and marine products; provided, persons subject to double-entry bookkeeping shall be excluded herefrom; |
| 3. | Other business operators deemed necessary by the Commissioner of the National Tax Service. |
| (3) | Where a taxpayers association falls under any of the following cases, it shall be dissolved: <Amended on Feb. 18, 2010> |
| 1. | Where agreed by at least 1/2 of its members; |
| 2. | Where the number of members of the taxpayers association under paragraph (1)2 and of the taxpayers association for persons with wage and salary income falling under any item of Article 127(1)4 of the Act is less than 20 and 50, respectively; provided, in cases of the proviso to paragraph (1)1, this shall not apply. |
| (4) | Where a taxpayers association falls under any of the following cases, the commissioner of the competent regional tax office may order it to be dissolved: |
| 1. | Where it fails to satisfy any requirement falling under any subparagraph of paragraph (1); |
| 2. | Where deemed that there exists any activity impeding tax administration. |
| (5) | Matters necessary for organizing and operating taxpayers associations under paragraph (1) shall be determined by the Commissioner of the National Tax Service. |
| Article 205 (Payment of amount of tax collected by taxpayers associations) |
| (1) | In cases where a taxpayers association collects income tax from its members under Article 150 of the Act, it shall issue receipts determined by Decree of the Ministry of Finance and Economy to the relevant members. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | The provisions of Article 185(1) and (2) shall apply mutatis mutandis to cases where a taxpayers association pays income tax for each month collected from its members. |
| (3) | "Monthly income of its each member computed, as prescribed by Presidential Decree" in Article 152(1) of the Act, means the amount obtained by deducting the amount, which is the monthly income multiplied by the simplified expense rate, from the monthly income of each member. <Amended on Dec. 29, 2000; Feb. 18, 2010> |
| (4) | When a taxpayers association (limited to agricultural, livestock and fisheries associations) pays amount of monthly tax withheld, it shall submit (including submission through the Home Tax Service) a report on the status of performance of collection by taxpayers association and detailed statement of changes in the members of taxpayers association prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office. <Added on Feb. 22, 2008; Feb. 29, 2008; Dec. 30, 2025> |
| Article 206 (Tax management of taxpayers association) |
| (1) | In applying Article 153 of the Act, if a taxpayers association intends to become the tax manager for its members, the association shall submit a report on the selection of tax manager determined by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the location of the taxpayers association. <Amended on Apr. 1, 1998; Feb. 29, 2008; Dec. 30, 2025> |
| (2) | In cases of paragraph (1), a document stating the purport that the relevant association members have selected the taxpayers association as their tax manager, and jointly signed by them, shall be attached to the relevant report. |
SECTION 3 Special Cases of Tax Withholding
| Article 206-2 (Special provisions concerning tax withholding from bonus) |
| (1) | "Person with a special relationship prescribed by Presidential Decree" in Article 155-4(1) of the Act means a corporation in a management control relationship under Article 1-2(3)2 of the Enforcement Decree of the Framework Act on National Taxes. <Added on Feb. 27, 2026> |
| (2) | "Income prescribed by Presidential Decree" in Article 155-4(1) of the Act means income treated as a bonus under Article 106(1)1b of the Enforcement Decree of the Corporate Tax Act. <Amended on Feb. 27, 2026> |
[This Article Added on Feb. 21, 2014]
| Article 206-3 (Special cases concerning withholding tax on income generated from transfer of paintings, calligraphic works, and antiques) |
"Cases prescribed by Presidential Decree" in Article 155-5 of the Act, means where the withholding agent who is a transferee is a non-resident or a foreign corporation without a domestic place of business.
[This Article Added on Feb. 3, 2015]
| Article 207 (Payment of withholding taxes on nonresident) |
| (1) | Article 185 shall apply mutatis mutandis to the payment of the withholding taxes under Article 156 of the Act; provided, where a withholding agent has no domicile, place of residence, main office, principal office, or domestic place of business (including domestic places of business of a foreign corporation), a tax manager under Article 82 of the Framework Act on National Taxes shall be appointed and reported to the head of the competent tax office. <Amended on Dec. 30, 2002; Feb. 19, 2005; Feb. 15, 2013> |
| (2) | "Services prescribed by Presidential Decree, among personal services provided in a foreign country" in the proviso to Article 156(1)4 of the Act means the services specified in Article 179(6)2, among those provided overseas. <Added on Feb. 3, 2017; Feb. 12, 2019> |
| (3) | When an amount to be withheld is computed pursuant to Article 156(1)5 of the Act, where a transferee withholds pursuant to Article 156(1) of the Act after a transferor reported and paid the income tax pursuant to Article 121(2) of the Act, the amount to be withheld shall be an amount after deduction of an amount reported and paid by the relevant transferor. <Added on Feb. 4, 2009; Feb. 18, 2010; Feb. 12, 2019> |
| (4) | "Amount prescribed by Presidential Decree" in the proviso of Article 156(1)8b of the Act means the amount of the virtual assets equivalent to the amount withheld in accordance with the following formula: <Added on Mar. 8, 2022>The amount of the virtual assets equivalent to the amount withheld = The amount calculated in accordance with Article 156(1)8b1) or 2) / The value of one virtual asset indicated by a virtual asset service provider retaining and managing the virtual assets as at the time of exchange or withdrawal of the virtual assets |
┌─────────────────────────────────┐
│ The amount of the virtual assets equivalent to the amount withheld = │
│ The amount calculated in accordance with Article 156(1)8b1) or 2) │
│ / The value of one virtual asset │
│ indicated by a virtual asset service provider │
│ retaining and managing the virtual assets │
│ as at the time of exchange or withdrawal of the virtual assets │
│ │
│ Note: When applying the denominator of this formula, │
│ the amount of value of exchanging or withdrawing the virtual assets whose value │
│ is not represented as a monetary amount shall be calculated by applying mutatis mutandis Article 88(3) and (4) │
└─────────────────────────────────┘
| (5) | "Period prescribed by Presidential Decree" in Article 156(13) of the Act, means any of the following dates: <Added on Dec. 30, 2003; Feb. 19, 2005; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012; Feb. 17, 2021> |
| 1. | Cases falling under Article 88(1)8a and 8-2 of the Enforcement Decree of the Corporate Tax Act (limited to cases of merger/division): Where a corporation has been extinguished due to a merger, the date of making a registration of the said merger, and where a corporation is extinguished or continues to exist due to a division or merger through division, the date the said division or merger through division is registered; |
| 2. | Cases falling under Article 88(1)8b and c, and 8-2 of the Enforcement Decree of the Corporate Tax Act (excluding cases of merger/division): The date a retirement of stocks, a decrease of capital, or a conversion into capital is determined. |
| (6) | Any domestic corporation which has issued stocks or equity shares shall deduct a withholding tax from domestic source other income pursuant to subparagraph 12i of Article 119 of the Act at the date prescribed in paragraph (5). <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 3, 2017; Feb. 12, 2019; Feb. 17, 2021> |
| (7) | "Where a nonresident has pre-paid income tax on such income, or evidences that such income is non-taxable or below taxation threshold, as prescribed by Presidential Decree" in Article 156(15) of the Act, means where a nonresident submits an application for confirmation of return and payment (tax exemption or below taxation) of capital gains tax prescribed by Decree of the Ministry of Finance and Economy to the head of the competent tax office having jurisdiction over the place for tax payment pursuant to Article 6(2) of the Act with a copy of a register and transaction agreement concerning the relevant real estate attached, and forward the confirmation to the withholding agent. <Added on Feb. 9, 2006; Feb. 22, 2008; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Feb. 2, 2012; Feb. 17, 2021; Dec. 30, 2025> |
| (8) | A virtual asset service provider, etc. shall pay the amount to be paid per person in accordance with the following formular at each time of withdrawal of the virtual assets retained and managed by the virtual asset service provider, etc. to the head of the competent tax office having jurisdiction over the place for tax payment, the Bank of Korea, or a postal service office on a monthly basis: <Added on Mar. 8, 2022> |
┌────────────────────────────────┐
│ │
│ The amount to be paid per person = (A - D) × B / C │
│ A: The cumulative amount per person of the amounts withheld │
│ by a virtual asset service provider, etc. under Article 156(1)8b of the Act │
│ │
│ (in cases of withholding taxes by exchanging or withdrawing virtual assets, │
│ referring to the amount expressed as units of the virtual assets under paragraph (4), │
│ which are sold in cash upon exchange or withdrawal │
│ B: The cumulative amount of virtual assets or cash per person. │
│ In such cases, the amount of withdrawing virtual assets means the amount under Article 183(5). │
│ │
│ C: The total amount of assets per person, which are retained and managed by a virtual asset service provider, etc. │
│ D: The cumulative amount of the amounts to be paid per person which is calculated as at the time of the preceding withdrawal │
└────────────────────────────────┘
| (9) | In applying the formula under paragraph (8), when any loss on virtual asset transactions is incurred to a nonresident, a virtual asset service provider, etc. shall reduce or adjust the cumulative amount withheld pursuant to Article 156(1)8b of the Act (referring to the value of A in the formula under paragraph (8); hereafter in this paragraph, "cumulative amount withheld"), reflecting the portion of such loss in accordance with the following formula: <Added on Mar. 8, 2022>The cumulative amount withheld based on the time when a loss is incurred = The cumulative amount withheld based on the time when any loss is incurred ? (The lesser between 20/100 of the amount of loss and z) |
┌───────────────────────────────┐
│ The cumulative amount withheld based on the time when a loss is incurred = │
│ The cumulative amount withheld based on the time when any loss is incurred │
│ - (The lesser between 20/100 of the amount of loss and z) │
│ │
│ Z: The cumulative amount withheld based on the transaction immediately preceding the time when a loss is incurred - │
│ The cumulative amount to be paid per person, which is calculated as at the time of withdrawal immediately preceding the time when a loss is incurred │
└───────────────────────────────┘
| (10) | A virtual asset service provider, etc. shall pay the amount equivalent to the amount reduced pursuant to paragraph (9) to the nonresident who is incurred losses. <Added on Mar. 8, 2022> |
| (11) | Pursuant to Article 156(17) of the Act, a virtual asset service provider, etc. shall, before first performing withholding under paragraph (16) of that Article for each taxpayer, obtain from a person who transfers, lends, or withdraws virtual assets documentary evidence necessary to verify whether the taxpayer is subject to withholding, and confirm whether the relevant taxpayer is subject to withholding. <Amended on Feb. 28, 2025> |
| (12) | A virtual asset service provider, etc. shall confirm whether any list of persons subject to withholding taxes is changed, every three years from when it confirms whether they are subject to withholding taxes. <Added on Mar. 8, 2022> |
| Article 207-2 (Application for non-taxation or exemption under tax treaties for nonresidents) |
| (1) | Where the substantive owner of domestic source income (referring to the substantive owner under the main sentence of Article 119-2(1), with the exception of its subparagraphs, of the Act; hereinafter the same shall apply) wishes to be eligible for non-taxation or exemption under Article 156-2(1) of the Act, he or she shall file an application for non-taxation or exemption in the form prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "application for non-taxation or exemption" in this Article) with the relevant income payer, and the income payer shall submit the application to the head of the tax office having jurisdiction over the place for tax payment of the income payer by not later than the ninth day of the month immediately following the month in which the relevant income is paid. <Amended on Jun. 8, 2009; Feb. 18, 2010; Dec. 30, 2010; Feb. 21, 2014; Feb. 3, 2017; Feb. 12, 2019; Dec. 30, 2025> |
| (2) | When submitting an application for non-taxation or exemption, a nonresident shall attach a resident certificate issued by the competent authority of the relevant nonresident's resident country, or documents determined and publicly announced by the Commissioner of the National Tax Service; provided, when a nonresident wishes to submit a copy of passport and a certification of immigration under Article 88 of the Immigration Act (limited to a certification that proves immigration for the recent one year from the date of arrival in the Republic of Korea) with regard to domestic source other income under subparagraph 12f and g of Article 119 of the Act, in lieu of the resident certificate or documents determined and publicly announced by the Commissioner of the National Tax Service, he or she may omit the submission of such certificate or documents. <Amended on Dec. 30, 2010; Feb. 12, 2019> |
| (3) | Any nonresident may cause his or her agent (including a tax manager under Article 82 of the Framework Act on National Taxes) to file an application for non-taxation or exemption under paragraph (1). <Amended on Feb. 19, 2005> |
| (4) | Where a financial company, etc. acquires, trades, mediates, or stands proxy for bonds, etc. of a nonresident pursuant to Article 46 of the Act, paragraph (1) shall apply as if there was relation of proxy or entrustment between such financial company, etc. and a nonresident. <Amended on Feb. 18, 2010> |
| (5) | Where an investment trader, an investment broker, or a corporation issuing stocks under the Financial Investment Services and Capital Markets Act withholds on transfer of securities pursuant to Article 156(6) of the Act, paragraph (1) shall apply as if the investment trader, the investment broker, or the corporation issuing stocks had relations of proxy or delegation with a nonresident. <Amended on Feb. 4, 2009; Feb. 2, 2012> |
| (6) | In cases not subject to paragraphs (4) and (5), where any income payer does not have a domicile, place of residence, main office, principal office, or domestic place of business (including domestic place of business of a foreign corporation), the real income earner of domestic resource income may directly submit an application for non-taxation or exemption to the head of the tax office having jurisdiction over the place for tax payment, rather than to the relevant income payer, notwithstanding paragraph (1). <Amended on Dec. 30, 2002; Feb. 19, 2005; Feb. 15, 2013; Feb. 21, 2014> |
| (7) | With respect to any of the following domestic source incomes falling under Article 119 of the Act, a written application for non-taxation or exemption may be omitted, notwithstanding paragraph (1): <Amended on Feb. 19, 2005; Feb. 29, 2008; Feb. 4, 2009; Jun. 8, 2009; Dec. 30, 2010; Dec. 30, 2025> |
| 1. | Domestic source income on which the income tax is not levied or exempted under the Act or the Restriction of Special Taxation Act; |
| 2. | Deleted; <Feb. 4, 2009> |
| 3. | Other domestic source income stipulated by Decree of the Ministry of Finance and Economy. |
| (8) | Deleted. <Feb. 12, 2019> |
| (9) | If a real income earner of domestic source income wishes to be eligible for the application of paragraph (1) where the domestic source income is paid through a foreign investment vehicle, such foreign investment vehicle shall submit to the relevant income payer a report on the foreign investment vehicle in the form prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "report on the foreign investment vehicle" in this Article), prepared according to an application submitted by the real income earner for non-taxation or exemption and including a statement of the real income earner, with the application submitted for non-taxation or exemption, and the income payer shall submit the documents to the head of the tax office having jurisdiction over the place for tax payment of the income payer by not later than ninth day of the month immediately following the month in which the income is paid; provided, the foregoing shall not apply where a publicly subscribed foreign collective investment vehicle defined under the proviso to Article 207-8(3) (hereafter referred to as "publicly subscribed foreign collective investment vehicle" in this Article) submits the following documents: <Added on Feb. 21, 2014; Dec. 30, 2025> |
| 1. | Documents evidencing matters specified under Article 207-8(3); |
| 2. | A report of the foreign investment vehicle, including details about the number of real income earners of the foreign investment vehicle in each country and the total investment amount; |
| 3. | An application prepared in the name of the foreign investment vehicle for non-taxation or exemption. |
| (10) | If a foreign investment vehicle (hereafter in this Article, referred to as "primary foreign investment vehicle") invests in another foreign investment vehicle (hereafter in this Article, referred to as "secondary foreign investment vehicle"), the primary foreign investment vehicle shall submit a report on the foreign investment vehicle, prepared according to an application submitted by the secondary foreign investment vehicle for non-taxation or exemption for each real income earner and statements thereof (referring to a document evidencing that the secondary foreign investment vehicle is a publicly subscribed foreign collective investment vehicle, if it is the case, and details about the number of real income earners of the foreign investment vehicle in each country and the total investment amount), along with applications submitted for non-taxation or exemption. If at least two foreign investment vehicles are involved in a serial investment relationship in such cases, the immediately preceding invested foreign investment vehicle shall be deemed the primary foreign investment vehicle, and the investing foreign investment vehicle shall be deemed the secondary foreign investment vehicle. <Added on Feb. 21, 2014> |
| (11) | For the purposes of paragraph (1) or (9), a person who falls under any subparagraph of Article 207-8(5) shall be deemed a real income earner. <Added on Feb. 21, 2014> |
| (12) | An application for non-taxation or exemption or a report on a foreign investment vehicle, which has been submitted in accordance with paragraph (1) or (9), need not be submitted again within three years from the filing date of the application or report; provided, if a change occurs in any fact therein, the change shall be reported in accordance with paragraph (1) or (9) by the ninth day of the month immediately following the month in which the first payment of income is made after the change occurs. <Added on Feb. 21, 2014> |
| (13) | "If the payer of income has not received an application for non-taxation or tax exemption or a report on an overseas investment vehicle, or it is impracticable to identify the real income earner with the documents submitted, or there is any other ground prescribed by Presidential Decree" in Article 156-2(3) of the Act, means any of the following cases. In such cases, subparagraph 2 or 3 shall apply only to the relevant portion of each case, and subparagraph 3 shall not apply to a publicly subscribed foreign collective investment vehicle: <Newly on Feb. 21, 2014> |
| 1. | Where no application for non-taxation or tax exemption or no report on a foreign investment vehicle has been submitted; |
| 2. | Where the application for non-taxation or tax exemption or the report on a foreign investment vehicle was submitted, but has not been supplemented properly according to a request for supplementation and rectification; |
| 3. | Where it is impracticable to identify the real income earner with the application for non-taxation or tax exemption or the report on an overseas investment vehicle submitted. |
| (14) | Each income payer and foreign investment vehicle shall retain applications for non-taxation or tax exemption, reports on a foreign investment vehicle, and other relevant documents for five years from the day immediately after the due date specified in paragraph (1). In such cases, upon receipt of a request from the head of the tax office having jurisdiction over the place for tax payment of the income payer, the income payer shall submit the relevant documents. <Added on Feb. 21, 2014> |
| (15) | A person who intends to request a correction pursuant to Article 156-2(5) of the Act (excluding cases where it applies mutatis mutandis pursuant to Article 119-3(7) of the Act) shall request such correction by submitting to the head of the tax office having jurisdiction over the place of tax payment of the income payer an application for correction for the application of non-taxation or exemption prescribed by Decree of the Ministry of Finance and Economy, with the documents under the following subparagraphs attached thereto to prove that the person is the beneficial owner of the domestic source income; in such cases, evidentiary documents shall be submitted together with Korean translations; provided, where recognized by the Commissioner of the National Tax Service, only documents prepared in English may be submitted: <Added on Feb. 21, 2014; Feb. 28, 2023; Dec. 30, 2025; Feb. 27, 2026> |
| 1. | An application for non-taxation or exemption; |
| 2. | A certificate of resident issued by the competent authority of the country in which the concerned effective owner resides. |
| (16) | A person who intends to request a correction pursuant to Article 156-2(5) of the Act as applied mutatis mutandis pursuant to Article 119-3(7) of the Act shall request such correction by submitting to the head of the tax office having jurisdiction over the place of tax payment of the income payer an application for correction for the application of non-taxation prescribed by Decree of the Ministry of Finance and Economy, with the documents under the following subparagraphs attached thereto to prove that the person is the beneficial owner of the domestic source income: <Added on Feb. 27, 2026> |
| 1. | An application for non-taxation for non-residents under Article 179- 4(1)1a or an application for non-taxation for a qualified foreign financial company, etc. under Article 179-4(1)2a; |
| 2. | A certificate of residence issued by the competent authority of the country of residence of the relevant non-resident (including a foreign investment vehicle deemed to be a beneficial owner pursuant to Article 119-3(3) of the Act; hereafter in this subparagraph the same shall apply), a copy of the passport, or any other document proving that the person is a non-resident; |
| (17) | Article 207-5(2) through (4) shall apply mutatis mutandis to procedures for filing an application for correction under paragraphs (15) and (16). <Added on Feb. 21, 2014; Feb. 27, 2026> |
[This Article Added on Dec. 31, 2001]
[Title Amended on Feb. 21, 2014]
| Article 207-3 (Special cases concerning withholding tax on interest, etc. accrued on bonds, etc. of nonresidents) |
| (1) | Where a person who pays interest, etc. accrued on bonds, etc. to a nonresident governed by Article 156(1) of the Act, or a person who purchases bonds, etc. from a nonresident before receiving interest, etc. accrued on bonds, etc. applies tax rates specified under the Act, the Restriction of Special Taxation Act, or a tax treaty (hereafter in this Article, referred to as "applicable tax rates") on the payment amount, etc. of the interest, etc., he or she shall withhold the amount calculated by applying the following tax rates. In such cases, if the applicable tax rate specified in subparagraph 1 is higher than the tax rate specified in Article 129(1)1 of the Act, and the relevant nonresident fails to prove the holding period of the bonds, etc., the whole amount paid shall be deemed the amount equivalent to the interest, etc. for the holding period of the nonresident; and if the applicable tax rate specified in subparagraph 1 is lower than the tax rate specified in Article 129(1)1 of the Act, and the nonresident fails to prove the holding period of the bonds, etc., the amount equivalent to the interest, etc. for the holding period of the nonresident shall be deemed non-existent: <Amended Feb. 4, 2009> |
| 1. | Tax rate applicable to the relevant nonresident concerning the amount equivalent to the interest, etc. accrued during the holding period of the nonresident out of the amount paid; |
| 2. | Tax rate specified in Article 129(1)1 of the Act concerning the amount from which the amount equivalent to the interest, etc. for the holding period specified in subparagraph 1 has been subtracted out of the amount paid. |
| (2) | When applying paragraph (1), Article 190 shall apply mutatis mutandis to the timing for payment of interest, etc. on bonds, etc. of a nonresident; Articles 102 and 193-2 shall apply mutatis mutandis to the calculation of the holding period of bonds, etc., methods for calculating the amount equivalent to interest, etc. for the holding period and for proving the holding period; and Article 207(1) shall apply mutatis mutandis to payment of the amount of withholding tax. <Amended on Feb. 18, 2010> |
| (3) | "Cases prescribed by Presidential Decree, such as a repurchase agreement" in Article 156-3 of the Act, means any of the following transactions or a mixture of the following transactions: <Amended on Jun. 8, 2010; Feb. 17, 2016> |
| 1. | A transaction by which a nonresident sells bonds, etc. on condition that he or she shall repurchase them at a certain price in a given period (including where a series of such transactions are made successively), where the transaction is verified through an account in the Korea Securities Depository pursuant to Article 294 of the Financial Investment Services and Capital Markets Act; |
| 2. | A transaction by which a nonresident lends bonds on condition that he or she shall have them returned in the same quantity of the same kind in a given period (including where a series of such transactions are made successively), where the transaction is verified through a trading ledger (including a ledger in an electronic form) prepared by a bond borrowing and lending intermediary institution. |
| (4) | Articles 46, 133-2, and 156-3 of the Act shall apply to a transaction under paragraph (3) as if the amount equivalent to interest income accruing from bonds, etc., during the period from the date such bonds, etc., are sold or lent to the date the bonds, etc. are repurchased or returned belongs to the seller or lender (referring to the initial seller or initial lender, where a series of such transactions are made successively or where a mixture of transactions referred to in paragraph (4) are made). <Amended on Jun. 8, 2010; Feb. 15, 2013; Feb. 17, 2016> |
| (5) | Deleted. <Jun. 8, 2010> |
| (6) | Deleted. <Jun. 8, 2010> |
[This Article Added on Feb. 9, 2006]
| Article 207-4 (Procedure of prior approval for applying non-taxation, exemption, or limited tax rate under tax treaty) |
| (1) | Any person who intends to obtain prior approval under the proviso to Article 156-4(1) of the Act shall file an application for prior approval of special cases in tax withholding prescribed by Decree of the Ministry of Finance and Economy with the Commissioner of the National Tax Service with the following documents attached thereto; provided where the details have become different from the first reported details due to change in the details of a contract after having obtained prior approval pursuant to paragraph (2), an application for prior approval shall be filed again: <Amended on Feb. 29, 2008; Feb. 4, 2009; Feb. 2, 2012; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Resident certificates issued by the counterpart state in a tax treaty (hereinafter referred to as "contracting state"); |
| 2. | Method of financing investment funds to obtain the relevant domestic source income; |
| 3. | Specification of disposal or its plan after receiving the relevant domestic source income; |
| 4. | Financial statements (including accompanying documents), tax returns, or audit reports submitted to the tax authority of the contracting State during the most recent 3 years (or, where 3 years have not elapsed since establishment, during the period from the date of establishment to the date of application). |
| (2) | Upon receipt of an application for prior approval under paragraph (1), the Commissioner of the National Tax Service may issue the prior approval, if the applicant is the real earner of the income under subparagraph 1, 2, 10, or 11 of Article 119 of the Act and a resident of the relevant contracting state. <Amended on Feb. 18, 2010; Feb. 3, 2017> |
| (3) | When deemed necessary to supplement concerning the details of an application for prior approval under paragraph (1), the Commissioner of the National Tax Service may request for supplement by determining a period not exceeding 30 days. In such cases, the supplement period shall not be included in the period under paragraph (5). |
| (4) | The request for supplement under paragraph (3) shall be in written documents, stating all the following matters: |
| 1. | Matters to be supplemented; |
| 2. | Reasons to request for supplement; |
| 4. | Other necessary matters. |
| (5) | The Commissioner of the National Tax Service shall inform whether to approve or not within three months from the date of receiving the application under paragraph (1). |
| (6) | Where it is confirmed that the submitted documents are false, the Commissioner of the National Tax Service shall cancel the prior approval. |
| (7) | When applying paragraph (1), documents attached to an application for prior approval of special cases in tax withholding shall be submitted together with their Korean translation; provided, in cases approved by the Commissioner of the National Tax Service, documents prepared in English only may be submitted. <Added on Feb. 4, 2009> |
[This Article Added on Feb. 9, 2006]
| Article 207-5 (Procedures for requesting correction for applying non-taxation, tax exemption, or limited tax rate under tax treaty) |
| (1) | Any person who intends to request a correction under Article 156-4(2) of the Act shall file a request for correction for the application of special cases in withholding the tax in the form prescribed by Decree of the Ministry of Finance and Economy with the head of the tax office having jurisdiction over the place for tax payment of the withholding agent with the documents specified in Article 207-4(1)1 through 4. In such cases, evidentiary documents shall be submitted, along with translations in Korean, but only documents in English may be submitted if the Commissioner of the National Tax Service approves to do so. <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| (2) | Upon receipt of a request for correction under paragraph (1) from a person who received income under subparagraph 1, 2, 10, or 11 of Article 119 of the Act, the head of the competent tax office shall make the correction if the person is the real earner of the relevant domestic source income. <Amended on Feb. 3, 2017> |
| (3) | When deemed necessary to supplement any of the details of a request for correction under paragraph (1), the head of the competent tax office may request for supplement by determining a period not exceeding 30 days. In such cases, the supplement period shall not be included in the period under Article 156-4(3) of the Act. |
| (4) | The request for supplement under paragraph (3) shall be in written documents, stating all the following matters: |
| 1. | Matters to be supplemented; |
| 2. | Reasons to request for supplement; |
| 4. | Other necessary matters. |
[This Article Added on Feb. 9, 2006]
| Article 207-6 Deleted. <Feb. 28, 2023> |
| Article 207-7 (Payment of amount of tax withheld related to supply of services by nonresident entertainers, etc. and procedures for refund thereof) |
| (1) | The phrase "persons prescribed by Presidential Decree such as nonresident entertainers and sportsperson" in Article 156-5(1) of the Act encompass not only entertainers or athletes who supply services in the Republic of Korea at a non-taxable foreign entertainment, etc. corporation (hereinafter referred to as "non-taxable foreign entertainment, etc. corporation") but also managers, coaches, illumination engineers, cinematographers and sound engineers who assist the supply of services by entertainers or athletes in the Republic of Korea and persons who supply similar services. <Amended Feb. 12, 2019> |
| (2) | Where a person who pays remuneration or consideration to a non-taxable foreign entertainment, etc. corporation pays withholding tax collected pursuant to Article 156-5(1) of the Act, he or she shall submit the following documents to the head of the competent tax office: <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| 1. | A report on performance of withholding the tax in the form prescribed by Ministerial Decree of the Finance and Economy; |
| 2. | Contract related to the supply of services between a person who pays remuneration or consideration to the relevant non-taxable foreign entertainment, etc. corporation and the relevant non-taxable foreign entertainment, etc. corporation. |
| (3) | Where a non-taxable foreign entertainment, etc. corporation pays withholding tax collected pursuant to Article 156-5(2) of the Act, it shall submit the following documents to the head of the competent tax office in charge of the withholding of the person who has paid remuneration or consideration to the non-taxable foreign entertainment, etc. corporation: <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Statement of payment of income from the supply of services of nonresident entertainers, etc. prescribed by Decree of the Ministry of Finance and Economy; |
| 2. | A report on performance of withholding the tax in the form prescribed by Ministerial Decree of the Finance and Economy. |
| (4) | When a non-taxable foreign entertainment, etc. corporation intends to receive refund pursuant to Article 156-5(3) of the Act, it shall apply to the head of the competent tax office by submitting an application for refund of amount of tax withheld of the non-taxable foreign entertainment, etc. corporation prescribed by Decree of the Ministry of Finance and Economy together with the following documents: <Amended on Feb. 29, 2008; Dec. 30, 2025> |
| 1. | Contract related to the supply of services between a non-taxable foreign entertainment, etc. corporation and a nonresident entertainer, etc.; |
| 2. | Documents evidencing remuneration or consideration paid to the nonresident entertainer, etc. |
| (5) | The head of a tax office who has received an application for refund pursuant to paragraph (4) shall determine whether to grant refund, and when there is tax refund, he or she shall add the amount to the tax refund, which is calculated according to the period between the day after the day when payment of withholding tax was made pursuant to Article 156-5(1) of the Act and the day when the decision of refund is made, and to the interest rate pursuant to Article 43-3(2) of the Enforcement Decree of the Framework Act on National Taxes. <Amended Feb. 15, 2013> |
| (6) | When documents prescribed in the subparagraphs of paragraphs (2), (3) and (4) are submitted, those made out in English shall be submitted with the Korean translation as well; provided, where the head of a tax office acknowledges, only the documents made out in English may be submitted. |
[This Article Added on Feb. 22, 2008]
| Article 207-8 (Special cases concerning nonresidents in withholding procedure for application of limited tax rate under tax treaty) |
| (1) | An effective owner of the relevant domestic source income who seeks application of the limited tax rate pursuant to Article 156-6(1) of the Act shall submit an application for limited tax rate on his or her domestic source income prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "application for limited tax rate" in this Article) to the withholding agent before he or she receives the domestic source income concerned; provided, in cases of the domestic source income received through the account opened in the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act by a foreign securities depository under subparagraph 5 of Article 296 of the same Act, one may choose not to submit the application for limited tax rate. <Amended on Dec. 30, 2025> |
| (2) | Deleted. <Feb. 12, 2019> |
| (3) | Upon applying paragraph (1), where the domestic source income is paid through a foreign investment vehicle, the foreign investment vehicle concerned shall receive the application for limited tax rate from its effective owner and submit the report on foreign investment vehicles prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "report on foreign investment vehicle" in this Article), with the detailed statement of effective owner attached thereto, to the withholding agent before it receives its domestic source income concerned; provided, this shall not apply where a foreign investment vehicle satisfies all of the following requirements (hereafter referred to as "publicly subscribed foreign collective investment vehicle" in this Article) and has submitted the report on foreign investment vehicle with attachment of the documents that can identify matters under the following, the number of effective owners in each country to which the foreign investment vehicle concerned belongs and the detailed statement of total amount of investment: <Amended on Dec. 30, 2025> |
| 1. | A foreign investment vehicle similar to the collective investment vehicle under the Financial Investment Services and Capital Markets Act and registered or approved pursuant to the Acts of the country of the contractual counter-party; |
| 2. | A security must be issued without the method of private subscription and the number of investors must be at least 100 persons (where an investor is another foreign investment vehicle, such foreign investment vehicle shall be deemed one person) as of the date of expiry of the immediately preceeding accounting period (where a foreign investment vehicle is newly established, referring to the date of submission of the report on foreign investment vehicle); |
| 3. | A foreign investment vehicle not falling under the foreign investment vehicle whose treaty benefits is excluded pursuant to the tax treaty concerned. |
| (4) | Where any other foreign investment vehicle (hereafter referred to as "secondary foreign investment vehicle" in this Article) invests in a foreign investment vehicle (hereafter referred to as "primary foreign investment vehicle" in this Article), the primary foreign investment vehicle shall receive, from the secondary foreign investment vehicle, the report on foreign investment vehicle attached with the detailed statement of effective owners (where the secondary foreign investment vehicle concerned is a publicly subscribed foreign collective investment vehicle, referring to the documents confirming such facts, the number of effective owners in each country to which the foreign investment vehicle concerned belongs and the detailed statement of total amount of investment) and submit the said report. In such cases, where multiple number of foreign investment vehicles are in a relationship of series of investments, the target foreign investment vehicle invested shall be deemed a primary foreign investment vehicle and the one investing in the said foreign investment vehicle shall be deemed a secondary foreign investment vehicle. |
| (5) | Upon applying paragraphs (1) and (3), where falling under any of the following, it shall be deemed an effective owner: |
| 1. | A pension established in a foreign country pursuant to the laws of country of the contractual counter-party equivalent to the National Pension Act, the Public Officials Pension Act, the Military Pension Act, the Act on Pension for Private School Teachers and Staffs, and the Act on the Guarantee of Workers' Retirement; |
| 2. | A fund established in a foreign country pursuant to the laws of country of the contractual counter-party which does not distribute its profits to its investors; |
| 3. | Deleted. <Feb. 12, 2019>. |
| (6) | An application for a limited tax rate or a report on a foreign investment vehicle, submitted pursuant to paragraph (1) or (3), need not be submitted again within three years from the filing date of the application or report; provided, if a change occurs in any detail thereof, the change shall be reported in accordance with paragraph (1) or (3) before the first payment of domestic source income is made after the date on which such change occurs. <Amended on Feb. 21, 2014> |
| (7) | "Ground prescribed by Presidential Decree" in Article 156-6(3) of the Act means any of the following. In such cases, subparagraph 2 or 3 shall apply only to the relevant portion of each case, and subparagraph 3 shall not apply to a publicly subscribed foreign collective investment vehicle: <Amended on Feb. 21, 2014> |
| 1. | Where no application for a limited tax rate or no report on a foreign investment vehicle has been submitted; |
| 2. | Where the application for a limited tax rate or the report on a foreign investment vehicle was submitted, but has not been supplemented properly according to a request for supplementation and rectification; |
| 3. | Where it is impracticable to identify the real income earner with the application for a limited tax rate or the report on a foreign investment vehicle submitted. |
| (8) | A withholding agent and a foreign investment vehicle shall retain the application for limited tax rate, the report on foreign investment vehicle and other relevant materials, for five years from the day immediately following the deadline for payment of withholding tax pursuant to Article 156(1) of the Act, and shall submit the said materials to the head of a tax office having jurisdiction over the withholding agent’s place for tax payment if the head of the tax office requests submission of the same. |
[This Article Added on Feb. 2, 2012]
| Article 207-9 (Procedure for correctional claim for applying limited tax rate on non-resident) |
| (1) | A person who intends to request a correction pursuant to Article 156-6(5) of the Act shall request such correction by submitting to the head of the tax office having jurisdiction over the place of tax payment of the withholding agent an application for correction for the application of a limited tax rate prescribed by Decree of the Ministry of Finance and Economy, with the documents under the following subparagraphs attached thereto to prove that the person is the beneficial owner of the domestic source income. In such cases, evidentiary documents shall be submitted together with Korean translations, yet, where recognized by the Commissioner of the National Tax Service, only documents prepared in English may be submitted: <Amended on Dec. 30, 2025; Feb. 27, 2026> |
| 1. | An application for limited tax rate pursuant to Article 207-8(1); |
| 2. | A certificate of resident issued by the competent authority of the country in which the concerned effective owner resides. |
| (2) | With respect to the procedure for correctional claim pursuant to paragraph (1), Article 207-5(2) through (4) shall apply mutatis mutandis. |
[This Article Added on Feb. 2, 2012]
| Article 207-10 (Scope of withholding agents for income of temporary staffing agency workers of foreign corporations and special procedures therefor) |
| (1) | A hiring domestic corporation referred to in Article 156-7 of the Act shall be a domestic corporation that meets all the following requirements: <Amended on Feb. 13, 2018; Feb. 15, 2022> |
| 1. | The sum of amounts paid to a foreign temporary staffing corporation under Article 156-7(1) of the Act (hereafter in this Article, referred to as "foreign temporary staffing corporation") in consideration of labor shall fall under any of the following cases: |
| a. | The amount paid in consideration of labor under the contract for temporary staffing agency workers concluded with a foreign temporary staffing corporation shall exceed two billion won; |
| b. | The sum of amounts paid to a foreign temporary staffing corporation by a hiring domestic corporation in the immediately preceding business year shall exceed two billion won; |
| 2. | Sales for the immediately preceding business year shall be at least 150 billion won or total assets as at the end of the immediately preceding business year shall be at least 500 billion won; |
| 3. | It shall engage in air transportation business, construction business, or building of ships and floating structure, and financial service activities, except insurance and pension funding under the Korea Standard Industrial Classification. |
| (2) | Temporary staffing agency workers referred to in Article 156-7 of the Act shall be workers who belong to a foreign temporary staffing corporation and who are temporarily assigned to a hiring domestic corporation to provide labor to the hiring domestic corporation. |
| (3) | Where a hiring domestic corporation pays withheld tax amounts in accordance with Article 156-7(1) of the Act, it shall submit the following documents to the head of the tax office in charge of withholding the tax: <Amended on Dec. 30, 2025> |
| 1. | A report on performance of withholding the tax in the form prescribed by Ministerial Decree of the Finance and Economy; |
| 2. | A statement of employment contracts made with temporary staffing agency workers in the form prescribed by Decree of the Ministry of Finance and Economy; |
| 3. | A contract made between the hiring domestic corporation and the foreign temporary staffing corporation for providing services. |
| (4) | Where a foreign temporary staffing corporation (referring to a hiring domestic corporation, if the hiring domestic corporation withholds the tax on behalf of the foreign temporary staffing corporation pursuant to Article 156-7(3) of the Act) withholds income tax on wage and salary income of temporary staffing agency workers pursuant to Article 156-7(2) of the Act, it shall submit the following documents to the head of the tax office in charge of withholding the tax: <Amended on Dec. 30, 2025> |
| 1. | A statement of payments of wage and salary income in the form prescribed by Decree of the Ministry of Finance and Economy; |
| 2. | An application for refund of withheld tax in the form prescribed by Decree of the Ministry of Finance and Economy; |
| 3. | Contracts made between the foreign temporary staffing corporation and temporary staffing agency workers for providing services; |
| 4. | Evidentiary documents concerning remunerations or prices paid by the foreign temporary staffing corporation to temporary staffing agency workers. |
| (5) | When the documents specified in paragraphs (3)3 and (4)3 and 4 are submitted, documents written in English shall be accompanied by translations in Korean. |
[This Article Added on Feb. 17, 2016]
CHAPTER VI SUPPLEMENTARY PROVISIONS
| Article 208 (Preparing and retaining records) |
| (1) | The books under Article 160(1) of the Act means those of the bookkeeping form, which doubly records and computes in full the asset status of business and the fluctuations in the profit and loss transactions. |
| (2) | In any of the following cases, it shall be deemed to have the books under paragraph (1) kept and recorded: |
| 1. | Where the asset status of business and the fluctuations in the profit and loss transactions are recorded in full, as the slips entered doubly with an average of debit and credit and the evidential documents therefor are completely furnished; |
| 2. | Where the books under paragraph (1) or the slips under subparagraph 1 and the evidential documents therefor are kept in the computerized tapes or diskettes. |
| (3) | Deleted. <Dec. 31, 1998> |
| (4) | Deleted. <Dec. 31, 1998> |
| (5) | "Business operator below a certain scale by type of business prescribed by Presidential Decree" in Article 160(2) and (3) of the Act means any of the following business operators; provided business operators under Article 147-2 hereof and Article 109(2)7 of the Enforcement Decree of the Value-Added Tax Act shall be excluded herefrom: <Added on Dec. 31, 1998; Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010; Dec. 30, 2010; Jun. 3, 2011; Feb. 15, 2013; Jun. 28, 2013; Feb. 21, 2014; Feb. 13, 2018; Feb. 11, 2020; Dec. 30, 2025> |
| 1. | A business operator commencing a new business in the relevant taxable period; |
| 2. | A business operator whose total revenue for the preceding taxable period (including the revenue increased by determination or correction, but excluding revenue generated from the transfer of business-use tangible assets under Article 19(1)20 of the Act) falls short of the following amount; provided, in cases of a micro-business defined by Decree of the Ministry of Finance and Economy, the term refers to a business operator whose total revenue falls short of the amount specified by Decree of the Ministry of Finance and Economy, taking into consideration the current situation of the relevant business sector: |
| a. | Agriculture, forestry, fishery, mining, wholesale, and retail business (excluding commodities brokerage service), real estate sale business under Article 122(1), and other business not falling under items b and c: 300 million won; |
| b. | Manufacturing business, lodging and restaurant business, electricity, gas, steam and air conditioning supply business, water supply business, sewage, waste disposal, raw material recycling business, construction business (excluding non-residential building construction), real estate development and supply business (limited to residential building development and supply business), transportation business and storage business, Information and communication business, financial and insurance business, and commodities brokerage service: 150 million won; |
| c. | Real estate leasing service under Article 45(2) of the Act, real estate leasing business, real estate activities business (excluding real estate sale business under Article 122(1)), specialized, scientific, and technical service business, business facilities management and business support services and rental and leasing activities business, educational service business, health and social welfare service business, service industry related to art, sports, and leisure, associations and organizations, repair and other personal service business, and family-employed activity: 75 million won. |
| (6) | Deleted. <Feb. 18, 2010> |
| (7) | In applying paragraph (5)2, if one concurrently operates the types of business under items a through c of the same subparagraph, or has at least two places of business, it shall be governed by the amount of revenue calculated by the following formula: <Added on Dec. 31, 1998; Feb. 28, 2007; Feb. 13, 2018> |
Amount of revenue of primary business (referring to the business with the largest amount of revenue; hereafter the same shall apply in this paragraph) ＋ Amount of revenue of business types other than primary business × (Amount under each item of paragraph (5)2 against the primary business / Amount under each item of paragraph (5)2 against the business kinds other than the primary business).
| (8) | Deleted. <Dec. 30, 2003> |
| (9) | "Simple book prescribed by Presidential Decree" in Article 160(2) of the Act means books stating the following matters, determined by the Commissioner of the National Tax Service: <Added on Dec. 31, 1998; Feb. 28, 2007; Feb. 18, 2010> |
| 1. | Matters regarding revenue, such as the turnover; |
| 2. | Matters regarding the payment of expenditures; |
| 3. | Matters regarding an increase or decrease of business-use tangible and intangible assets; |
| 4. | Other matters of reference. |
| (10) | Deleted. <Dec. 30, 2010> |
[Title Amended on Feb. 18, 2010]
| Article 208-2 (Receipt and retainment of documentary evidence of expenditure) |
| (1) | "Cases prescribed by Presidential Decree" in the proviso to Article 160-2(2) of the Act, means any of the following cases: <Amended on, Dec. 31, 1999; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Jun. 28, 2013; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | Where an amount per trade of goods or services provided (including value-added tax) does not exceed 30,000 won; |
| 2. | Where a trade counterpart is a business operator located in the area of an Eup or Myeon (limited to business operators subject to Article 36(1)2 of the Value-Added Tax Act), and who is not a credit card merchant under the Specialized Credit Finance Business Act; |
| 3. | Where any financial or insurance services are received; |
| 4. | Where any trade is made with a nonresident or a foreign corporation having no place of business in the Republic of Korea; |
| 5. | Where any goods or services are directly provided by a farmer or fisherman (referring to a person engaging in crop production business, livestock industry, composite agriculture of crop production and stock farming, forestry, or fishery among agriculture according to the Korea Standard Industry Code, and excluding a corporation); |
| 6. | Where any goods or services are provided by the State, local governments, or local governments associations; |
| 7. | Where any goods or services are provided by non-profit corporations (including foreign non-profit corporations, but excluding parts related to profit-making business); |
| 8. | Where any services are provided by a business income earner subject to tax withholding under Article 127(1)3 of the Act (limited to where a tax withholding is made); |
| 9. | Other cases determined by Decree of the Ministry of Finance and Economy. |
| (2) | "Means prescribed by Presidential Decree" in Article 160-2(2)3 of the Act, means those falling under the subparagraphs of Article 83(4). <Amended on Feb. 18, 2010; Feb. 12, 2019> |
| (3) | A business operator shall retain and manage evidential documents related to trade falling under any subparagraph of paragraph (1), separate from evidential documents falling under any subparagraph of Article 160-2(2) of the Act. <Amended on Feb. 18, 2010> |
| (4) | Where any of the following evidential data are retained, it shall be deemed to accept and retain credit card sale slips and cash receipts: <Added on Dec. 30, 2002; Dec. 30, 2003; Feb. 19, 2005; Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010> |
| 1. | Detailed statement of monthly use of a credit card issued by any of the following business operators (hereafter in this Article, referred to as "credit card business operator, etc.") and detailed statement of monthly use of a registered prepaid card under Article 126-2(1)4 of the Restriction of Special Taxation Act: |
| a. | A credit card business operator under the Specialized Credit Finance Business Act; |
| b. | An electronic finance business operator under the Electronic Financial Transactions Act; |
| c. | The National Credit Union Federation of Korea under the Credit Unions Act; |
| d. | The Korea Federation of Savings Banks under the Mutual Savings Banks Act; |
| 2. | Information on transaction (only applicable to cases of meeting the requirements of the subparagraphs of Article 65-7 of the Enforcement Decree of the Framework Act on National Taxes) of credit cards, Cash Receipts, debit cards, registered prepaid cards, electronic direct payment instruments, inscribed prepaid electronic payment instruments, and inscribed electronic monies under Article 126-2(1)4 of the Restriction of Special Taxation Act, which have been transmitted by credit card business operators, etc. and are retained in the enterprise resource planning system. |
| (5) | The following data evidencing expenditure need not be retained, notwithstanding Article 160-2(1) of the Act: <Added on Feb. 22, 2008; Feb. 15, 2013; Feb. 17, 2016> |
| 2. | Credit card sales slip registered with business credit cards in the Cash Receipt homepage of the National Tax Service; |
| 3. | Sales slip of cargo trucker's welfare card; |
| 4. | Electronic receipt for which a detailed statement of issuance has been transmitted pursuant to Article 163(8) of the Act. |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 18, 2010]
| Article 208-3 (Obligation to prepare and retain detailed statement of issuing receipts of donations) |
| (1) | "Detailed statement of issuance for each donor in the form prescribed by Presidential Decree" in Article 160-3(1) of the Act means a statement of the following facts: <Amended on Feb. 29, 2008; Feb. 18, 2010; Feb. 21, 2014; Feb. 12, 2019; Dec. 30, 2025> |
| 1. | Name, resident registration number, and address of the relevant donor (or the trade name, business registration number, and the location of the main office under the main sentence of Article 7(6)2 of the Enforcement Decree of the Corporate Tax Act, if the donor is a corporation); |
| 3. | Date the donation was made; |
| 4. | Date the receipt of donation was issued; |
| 5. | Other matters prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | Appendix of the total issuance of donation receipts under Article 160-3(3) of the Act shall be pursuant to the form prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Feb. 29, 2024; Dec. 30, 2025> |
| (3) | "Amount prescribed by Presidential Decree" in Article 160-3(4) of the Act means 300 million won. <Added on Feb. 28, 2025> |
[This Article Wholly Amended on Feb. 22, 2008]
| Article 208-4 (Obligation of financial companies to prepare and retain details of issuing certificates) |
"Detailed statement of issuance by individual prescribed by Presidential Decree" in Article 160-4(1) of the Act, means those including all the following details: <Amended on Feb. 28, 2007; Feb. 29, 2008; Feb. 18, 2010; Feb. 15, 2013; Feb. 17, 2016; Dec. 30, 2025>
| 1. | Name, resident registration number, and domicile of the relevant individual; |
| 2. | Any of the following amount: |
| a. | The amount paid in a savings account eligible for income deduction or the amount paid for insurance premiums eligible for income deduction; |
| b. | Repaid amount of the principal and interest eligible for income deduction or interest (including the amount equivalent to the interest accrued from mortgage-backed retirement pension under Article 51-4 of the Act); |
| c. | Utilized amount by credit card, debit card, registered prepaid card, electronic direct payment instruments, inscribed prepaid electronic payment instruments, and inscribed electronic monies subject to income tax deduction under Article 126-2(1) of the Restriction of Special Taxation Act; |
| 3. | Other matters prescribed by Decree of the Ministry of Finance and Economy. |
[This Article Added on Feb. 19, 2005]
[Title Amended on Feb. 18, 2010]
| Article 208-5 (Reporting of business accounts) |
| (1) | "Business account prescribed by Presidential Decree" in Article 160-5(1) of the Act, means an account that meets all of the following requirements: <Amended on Feb. 18, 2010> |
| 1. | It shall be an account opened at a financial institution that falls under any item of subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (hereafter in this Article, referred to as "financial institution"); |
| 2. | It shall not be used for any purpose other than business; |
| 3. | Deleted; <Feb. 22, 2008> |
| 4. | Deleted. <Feb. 22, 2008> |
| (2) | A business account for each place of business shall be reported separately to the head of the competent tax office having jurisdiction over each place of business. In such cases, a single account may be reported as a business account for at least two places of business. |
| (3) | Each place of business may report at least two business accounts. <Amended on Dec. 30, 2010> |
| (4) | The scope of the transactions for which a business account shall be used in accordance with Article 160-5(1)1 of the Act, shall include where the payments are settled by any of the following means through intermediation of, entrustment, etc. to, a financial institution: <Amended on Feb. 22, 2008; Feb. 18, 2010> |
| 1. | Remittance or money transfer between accounts; |
| 2. | Making and receiving the payment for a transaction by a check under Article 1 of the Check Act (limited to a check, the issuer of which is a business operator); |
| 3. | Making and receiving the payment for a transaction by a bill of exchange of a promissory note under Articles 1 and 75 of the Bills of Exchange and Promissory Notes Act; |
| 4. | Making and receiving the payment for a transaction by a credit card, debit card, registered prepaid card, electronic direct payment instrument, inscribed prepaid electronic payment instrument, or inscribed electronic money pursuant to Article 126-2(1) of the Restriction of Special Taxation Act. |
| (5) | "Transactions prescribed by Presidential Decree, in which it is difficult to use a business account because of a business partner's status" in the proviso to Article 160-5(1)2 of the Act, means transactions made with any of the following persons: <Added on Feb. 22, 2008; Oct. 1, 2009; Feb. 18, 2010> |
| 1. | Persons under intensive management and utilization by a comprehensive credit information collection agency pursuant to Article 25(2)1 of the Credit Information Use and Protection Act due to default on an obligation related to financial transaction; |
| 3. | Workers employed on a daily basis engaged in construction works pursuant to subparagraph 1 of Article 20, who are not liable to join the national pension pursuant to the National Pension Act (applicable until December 31, 2009). |
| (6) | A business account opened by a district housing association under subparagraph 11a of Article 2 of the Housing Act jointly with a registered business operator, which is a joint project operator under Article 5 of the same Act, shall be deemed a business account under Article 160-5(1) of the Act. <Added on Feb. 3, 2017> |
| (7) | Deleted. <Feb. 4, 2009> |
| (8) | A person subject to double-entry bookkeeping shall keep and maintain records of the amount of transactions for which a business account is required to be used during the pertinent taxable period for each place of business, the amount actually used, and the amount not used separately. <Amended on Feb. 22, 2008> |
| (9) | When the reporting, change, or addition of a business account is made in accordance with Article 160-5(3) and (4) of the Act, a report (report on change or addition) of a business account prescribed by Decree of the Ministry of Finance and Economy shall be filed with the head of the competent tax office having jurisdiction over the relevant place of business within the pertinent period. <Amended on Feb. 22, 2008; Feb. 29, 2008; Dec. 30, 2010; Dec. 30, 2025> |
| (10) | The Commissioner of the National Tax Service may prescribe detailed matters necessary for reporting of a business account, the preparation of statement, etc. within the scope required for tax management. <Amended on Feb. 22, 2008; Dec. 30, 2010> |
[This Article Added on Feb. 28, 2007]
[Title Amended on Dec. 30, 2010]
| Article 209 (Method of separate calculation of common profits and losses) |
The method of separate calculation of assets, liabilities and profits and losses, in cases of separate recording in a book pursuant to Article 161 of the Act, shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025>
[This Article Wholly Amended on Feb. 18, 2010]
[Title Amended on Feb. 15, 2013]
| Article 210 (Installment and use of cash registers) |
| (1) | "Person prescribed by Presidential Decree" in Article 162(1) of the Act means a business operator who can prepare and issue receipts pursuant to Article 211(2)2 and 3 of this Decree or Article 36(1)1 of the Value-Added Tax Act and Article 73 of the Enforcement Decree of the same Act. <Amended on Feb. 18, 2010; Jun. 28, 2013> |
| (2) | The Commissioner of the National Tax Service may, within the scope necessary for securing the tax payment, determine the distribution of cash registers, the manufacturing and distribution of tapes, and other necessary matters. |
| Article 210-2 (Admission to membership of credit card member stores) |
| (1) | "Business operator falling under the requirements prescribed by Presidential Decree" in Article 162-2(1) of the Act means a business operator engaging in a business of serving consumers (hereinafter referred to as "type of business serving consumers"), as specified in Appendix 3-2, by supplying goods or services to consumers, who fall under any of the following subparagraphs, and who are designated as those obligated to become a member of a credit card member stores by the head of the competent tax office having jurisdiction over the place of business or the commissioner of the competent regional tax office, as prescribed by the Commissioner of the National Tax Service in view of the type and scale of the business: <Amended on Feb. 19, 2005; Feb. 28, 2007; Feb. 22, 2008; Jun. 28, 2013; Feb. 11, 2020; Jan. 5, 2021> |
| 1. | A business operator whose aggregate amount of revenue for the immediately preceding taxable period (including the amount of revenue increased by determination or rectification; hereafter the same shall apply in this Article) reaches or exceeds 24 million won; |
| 2. | A business operator under Article 147-2; |
| 3. | Business operators under Article 109(2)7 of the Enforcement Decree of the Value-Added Tax Act. |
| (2) | "Methods prescribed by Presidential Decree, such as installing and operating a point of sale information management system under subparagraph 12 of Article 2 of the Distribution Industry Development Act" in the proviso, with the exception of the subparagraphs, of Article 162-2(2) of the Act means methods involving the installation and operation of any of the following facilities or systems: <Added on Feb. 27, 2026> |
| 1. | A point of sale information management system under subparagraph 12 of Article 2 of the Distribution Industry Development Act; |
| 2. | Enterprise resource planning facilities under subparagraph 1 of Article 5-2 of the Act on Restriction on Special Cases concerning Taxation. |
| (3) | "A business operator engaged in a business prescribed by Presidential Decree" in Article 162-2(2)3 of the Act means a business operator who operates a travel business under Article 3(1)1 of the Tourism Promotion Act. <Added on Feb. 27, 2026> |
| (4) | Where a credit card merchant refuses a credit card transaction, or issues a credit card sales slip containing details different from the truth, and the person who was refused such transaction or who received such falsely issued credit card sales slip intends to report the details of such transaction pursuant to Article 162-2(3) of the Act, he or she shall submit to the Commissioner of the National Tax Service, the Commissioner of Regional Tax Service, or the head of a tax office, within 1 month from the date on which the transaction was refused or the credit card sales slip was falsely issued, a report containing the following matters, accompanied by documents or materials proving the relevant facts. <Added on Feb. 28, 2007; Feb. 4, 2009; Feb. 18, 2010; Feb. 27, 2026> |
| 1. | Name of the reporting person; |
| 2. | Name of the credit card merchant; |
| 3. | The date on which the credit card transaction was refused or the credit card sales slip was falsely issued, and the details and amount of the transaction. |
| (5) | Where the head of the tax office having jurisdiction over the place of tax payment notifies the relevant credit card merchant of the reported amount for the relevant taxable period pursuant to the latter part of Article 162-2(4) of the Act, he or she shall do so within 2 months after the end of that taxable period. <Added on Feb. 28, 2007; Feb. 27, 2026> |
| (6) | The Commissioner of the National Tax Service shall determine, within the scope necessary for tax administration, detailed matters concerning persons required to become credit card merchants, procedures for designating such persons, procedures for consumers to file written reports, etc. on refusal of credit card transactions, and procedures for notifying the relevant reporter of the results of the verification of such reports. <Amended on Feb. 18, 2010; Feb. 27, 2026> |
[This Article Added on Dec. 31, 1998]
[Title Amended on Feb. 28, 2007]
| Article 210-3 (Registration as cash receipt merchant) |
| (1) | "Business operator meeting the requirements prescribed by Presidential Decree" in Article 162-3(1) of the Act means any of the following business operators who engage in a business of serving consumers; provided if a business operator, prescribed by Decree of the Ministry of Finance and Economy, has difficulty in registering as a cash receipt merchant, he or she shall be excluded: <Amended on Feb. 22, 2008; Feb. 29, 2008; Feb. 18, 2010; Jun. 11, 2013; Jun. 28, 2013; Feb. 11, 2020; Dec. 30, 2025> |
| 1. | A business operator whose aggregate amount of revenue for the immediately preceding taxable period (including the amount of revenue increased by determination or rectification; hereafter the same shall apply in this Article) reaches or exceeds 24 million won; |
| 2. | A business operator under Article 147-2; |
| 3. | A business operator under Article 109(2)7 of the Enforcement Decree of the Value-Added Tax Act; provided, ferry business shall be excluded herefrom; |
| 4. | A business operator who runs the types of business under Appendix 3-3. |
| (2) | Where paragraph (1)1 is applicable, the revenue amount of a business operator who concurrently engages in a type of business for consumers and another type of business different from that for consumers shall be determined only by the amount of revenue from the type of business for consumers, while the amount of revenue of a business operator who has at least two places of business for the type of business for consumers shall be determined by summing up the amount of revenue from each place of business. |
| (3) | Where paragraph (1)1 is applicable, the revenue amount of a business operator who commenced a new business during the immediately preceding taxable period shall be calculated by multiplying the amount of revenue during the immediately preceding taxable period by the number of months, during which the business has been carried on (the number of days less than one month shall be treated as one month), by 12. |
| (4) | A business operator who falls under paragraph (1)1 shall register as a cash receipt merchant by no later than March 31 of the pertinent year. |
| (5) | A business operator registered as a cash receipt merchant under paragraph (4) may, if the aggregate of the revenue of such registered store does not reach 24 million won during a taxable period, opt out of the membership of a cash receipt merchant on or after January 1 of the following year. In such cases, such person shall not post a "Cash Receipt Sticker" on the door. |
| (6) | The amount subject to the issuance of cash receipts shall be at least one won for each transaction. <Amended on Feb. 22, 2008> |
| (7) | "Method prescribed by Presidential Decree" in the proviso of Article 162-3(3) of the Act means the method under Article 210-2(2). <Added on Feb. 27, 2026> |
| (8) | Where a person who has not received a cash receipt from, or has received a cash receipt containing details different from the truth from, a business operator registered as a cash receipt merchant pursuant to Article 162-3(3) of the Act or a business operator required to issue cash receipts pursuant to paragraph (4) of that Article (hereafter in this Article referred to as "cash receipt merchants, etc.") intends to report the details of such transaction pursuant to Article 162-3(5) of the Act, he or she shall submit to the Commissioner of the National Tax Service, the Commissioner of a Regional Tax Office, or the head of a tax office, within five years from the date on which the issuance of the cash receipt was refused or the cash receipt was falsely issued, a report containing the following matters, accompanied by documents or materials proving the relevant facts: <Amended on Feb. 2, 2012; Feb. 28, 2025; Feb. 27, 2026> |
| 1. | Name of the reporting person; |
| 2. | Trade name of the cash receipt merchant business operator, etc.; |
| 3. | Date on which issuance of a cash receipt was refused or a cash receipt was falsely issued, and the details and amount of the transaction. |
| (9) | Pursuant to Article 162-3(6) of the Act, the head of the tax office having jurisdiction over the place of tax payment shall notify the relevant cash receipt merchant, etc. of the reported amount for the relevant taxable period by the deadline applicable under each of the following subparagraphs: <Added on Feb. 2, 2012; Feb. 28, 2025; Feb. 27, 2026> |
| 1. | Where a report is received during the relevant taxable period: Within 2 months after the end of that taxable period; |
| 2. | Where a report is received after the relevant taxable period has ended: Within 2 months from the date of receipt of the report. |
| (10) | "Requirements prescribed by Presidential Decree, such as the amount of gross receipts" in Article 162-3(1) of the Act means cases where a person is subject to mandatory registration as a cash receipt merchant pursuant to paragraph (1)1. <Added on Feb. 11, 2020; Feb. 27, 2026> |
| (11) | In applying Article 162(3)1 of the Act, the date on which the requirements are met shall be the last day of the immediately preceding taxable period, in cases falling under paragraph (1)1, and, in cases where a new business operator falls under paragraph (1)2 through 4, the date on which the business in the relevant line of business is commenced. <Added on Feb. 11, 2020; Feb. 27, 2026> |
| (12) | "Business operator engaged in a business prescribed by Presidential Decree" in Article 162-3(4) of the Act means a business operator engaged in a business specified in Appendix 3-3. <Added on Feb. 18, 2010; Feb. 2, 2012; Feb. 11, 2020; Feb. 27, 2026> |
| (13) | Where a cash receipt is issued pursuant to the main clause of Article 162-3(4) or paragraph (7) of that Article of the Act, it may be issued on an anonymous basis within 5 days from the date on which goods or services are supplied and the payment therefor is received in cash; provided, where a business operator falling under Article 210-2(3) has difficulty issuing a cash receipt on the date on which the payment is received in cash because the supply of goods or services is not completed on that date, the cash receipt may be issued within 5 days from the date on which the supply of goods or services is completed. <Amended on Feb. 2, 2012; Feb. 11, 2020; Feb. 27, 2026> |
| (14) | The Commissioner of the National Tax Service shall determine, within the scope necessary for tax administration, detailed matters concerning registration and withdrawal of persons required to become cash receipt merchants, procedures for reporting and notification regarding refusal to issue cash receipts, and methods of issuing cash receipts on an anonymous basis where a consumer does not wish to receive a cash receipt. <Amended on Feb. 18, 2010; Feb. 2, 2012; Feb. 11, 2020; Feb. 27, 2026> |
[This Article Added on Feb. 28, 2007]
| Article 211 (Preparation and issuance of account statement) |
| (1) | Where a business operator provides goods or services, he or she shall produce two copies of an invoice, stating the following matters, and issue one of them to the person receiving the goods or services: <Amended on Dec. 31, 1996; Feb. 15, 2013; Feb. 3, 2015> |
| 1. | Registration number, and name or title of the business operator who provides goods or services; |
| 2. | Registration number, and name or trade name of the person who receives goods or services; provided, if the person to whom goods or services are provided is not a business operator nor a registered business operator, the code number under Article 168(5) of the Act or the resident registration number of the person to whom goods or services are provided shall be stated instead; |
| 5. | Other reference matters. |
| (2) | Where an operator of any of the following business provides goods or services, he or she may issue a receipt, notwithstanding paragraph (1); provided, if a business operator receiving goods or services presents his or her certificate of business registration and requests an issuance of account statement under paragraph (1), such account statement shall be issued: <Amended on Dec. 31, 1999; Dec. 31, 2001; Feb. 19, 2005; Feb. 29, 2008; Feb. 15, 2013; Jun. 28, 2013; Dec. 30, 2025> |
| 1. | Business subject to Article 36(1)1 of the Value-Added Tax Act and Article 73(1) and (2) of the Enforcement Decree of the same Act; |
| 2. | Business stipulated in Article 36(1)1 of the Value-Added Tax Act and Article 73(1) and (2) of the Enforcement Decree of the same Act, and which is exempted from value-added tax; |
| 3. | Business determined by Decree of the Ministry of Finance and Economy, and which provides goods or services mainly to consumers who are not business operators; |
| 4. | Where land and structures are provided. |
| (3) | Where a business operator subject to Article 36(1)2 of the Value-Added Tax Act provides goods or services on which the value-added tax is levied, he or she shall not issue an account statement notwithstanding paragraph (1) and the proviso of paragraph (2), but shall issue a receipt. <Added on Dec. 31, 1999; Feb. 19, 2005; Feb. 15, 2013; Jun. 28, 2013; Feb. 28, 2023> |
| (4) | With regard to supply of the following goods or services, an invoice or a receipt need not be issued, notwithstanding paragraphs (1) through (3): <Amended on Dec. 31, 1998; Dec. 31, 1999; Feb. 19, 2005; Feb. 18, 2010; Feb. 15, 2013; Jun. 28, 2013; Feb. 28, 2023> |
| 1. | Goods or services provided by stall keepers, itinerant vendors, or persons who conduct business by utilizing vending machines, etc.; |
| 2. | Services provided by urban buses, of those under Article 26(1)7 of the Value-Added Tax Act; |
| 3. | Goods or services transacted with a nonresident or a foreign corporation having no domestic place of business; provided, goods or services transacted with a liaison office of a foreign corporation under Article 94(2)1 of the Corporate Tax Act shall be excluded herefrom; |
| 4. | Other goods or services for which an issuance of a tax account statement or receipt is exempted under Article 36(1)1 of the Value-Added Tax Act and Articles 71 and 73 of the Enforcement Decree of the same Act. |
| (5) | With respect to cases where a business operator receives an issuance of a withholding tax receipt from a person receiving services pursuant to Article 144 of the Act, it shall be deemed to have delivered an invoice under paragraph (1). <Added on Dec. 31, 1997; Feb. 15, 2013> |
| (6) | Any business operator may, after reporting to the Commissioner of the National Tax Service, issue an invoice indicating the matters to be stated under paragraph (1)1 through 4, other matters deemed necessary, and that the invoice has been reported to the Commissioner of the National Tax Service. In such cases, such invoice shall be deemed an invoice specified in paragraph (1). <Added on Dec. 31, 1997; Dec. 31, 2001; Feb. 15, 2013> |
| (7) | Deleted. <Feb. 17, 2016> |
| (8) | Deleted. <Feb. 17, 2016> |
| (9) | Deleted. <Feb. 17, 2016> |
| (10) | Deleted. <Feb. 17, 2016> |
| (11) | Deleted. <Feb. 17, 2016> |
| (12) | Deleted. <Feb. 17, 2016> |
[Title Amended on Feb. 15, 2013]
| Article 211-2 (Issuance of electronic invoices) |
| (1) | "Electronic means prescribed by Presidential Decree" in the latter part of Article 163(1) of the Act means issuance by any of the electronic methods specified in Article 68(5) of the Enforcement Decree of the Value-Added Tax Act. <Amended on Feb. 11, 2020> |
| (2) | "Business operators prescribed by Presidential Decree" in Article 163(1)2 of the Act means business operators whose gross revenue for each place of business during the second preceding taxable period is at least 80 million won (including business operators whose gross revenue for each place of business during a subsequent taxable period is less than 80 million won). <Amended on Feb. 13, 2018; Feb. 17, 2021; Feb. 15, 2022; Feb. 28, 2023> |
| (3) | An individual business operators obligated to issue electronic invoices pursuant to Article 163(1) of the Act shall issue electronic invoices from the date falling under the following classifications: <Amended on Feb. 13, 2018; Feb. 17, 2021; Feb. 15, 2022; Feb. 28, 2023> |
| 1. | A business operator falling under Article 163(1)1 of the Act: The date on which electronic tax invoices shall be issued pursuant to Article 68(2) of the Enforcement Decree of the Value-Added Tax Act; |
| 2. | A business operator falling under Article 163(1)2 of the Act: On July 1 of the taxable period immediately after the taxable period in which gross revenue for each place of business is at least 80 million won; provided, if gross revenue for each place of business reaches at least 80 million won as a result of a revised return filed pursuant to Article 45 of the Framework Act on National Taxes or a decision or correction made under Article 80 of the Act (hereafter in this paragraph, referred to as "revised return or a decision or correction"), the electronic invoices shall be issued on the date when the next taxable period commences following the taxable period in which a revised return is filed or a decision or correction is made. |
| (4) | "Deadline prescribed by Presidential Decree" in Article 163(8) of the Act, means the day immediately after the date an electronic invoice is issued. |
| (5) | "Detailed statement of issuance of electronic invoices in the form prescribed by Presidential Decree" in Article 163(8) of the Act, means a statement in which the matters specified under Article 211(1) are described for each issued invoice. |
| (6) | Except as provided in this Decree, Article 68 of the Enforcement Decree of the Value-Added Tax Act shall apply mutatis mutandis to the issuance and transmission of electronic invoices under Article 163 of the Act, the registration of business operators who establish and operate relevant facilities and systems, and the notification of persons subject to mandatory issuance of electronic invoices. In such cases, "electronic tax invoices" shall be deemed "electronic invoices." <Amended on Feb. 27, 2026> |
| (7) | Except as provided in paragraphs (1) through (6), matters necessary for the procedures for issuing electronic invoices, etc. shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Dec. 30, 2025> |
[This Article Added on Feb. 17, 2016]
| Article 212 (Submission of aggregate table of invoices by seller and aggregate table of invoices by purchaser) |
| (1) | A business operator shall submit an aggregate table of invoices by seller and an aggregate table of invoices by purchaser prescribed by Decree of the Ministry of Finance and Economy by the deadline specified in Article 78 of the Act. <Amended on Dec. 31, 1996; Dec. 31, 1997; Apr. 1, 1998; Dec. 31, 1999; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2010; Dec. 30, 2025> |
| (2) | Except as otherwise expressly provided for in this Decree, Articles 32 through 35 and 54 of the Value-Added Tax Act and Articles 69 through 72 and 97 through 99 of the Enforcement Decree of the same Act shall apply mutatis mutandis to the preparation and delivery of an invoice under Article 211 and the submission of an aggregate table of invoices by seller or an aggregate table of invoices by purchaser under paragraph (1). <Amended on Feb. 19, 2005; Jun. 28, 2013> |
| (3) | "Where an invoice, etc. is issued, as prescribed by Presidential Decree" in the proviso to Article 163(2) of the Act, means where he or she issues an invoice pursuant to paragraph (2) in the name of a consignor or his or her name. <Amended on Feb. 18, 2010> |
| (4) | Where an invoice is delivered by deeming that a consignee or an agent has provided goods under the main sentence of Article 163(2) of the Act, such fact shall be written in addition on the invoice. <Added on Dec. 31, 1998> |
| (5) | With respect to cases where a business operator receives an issuance of a withholding tax receipt from a person receiving services and a withholding agent submits payment statement, it shall be deemed to have submitted an aggregate table of invoices by seller and an aggregate table of invoices by purchaser. <Added on Feb. 11, 2020> |
| Article 212-2 (Importation invoices) |
| (1) | Invoices issued under Article 163(3) of the Act shall be governed, as determined and publicly announced by the Commissioner of the Korea Customs Service by applying mutatis mutandis the provisions of Article 211(1). |
| (2) | Deleted. <Feb. 9, 2006> |
[This Article Added on Dec. 31, 2001]
| Article 212-3 (Submission of aggregate table of tax invoices by purchaser) |
The provisions of Articles 97 and 98 of the Enforcement Decree of the Value-Added Tax Act shall apply mutatis mutandis to the submission, etc. of an aggregate table of tax invoices by purchaser under Article 163-2 of the Act. <Amended on Jun. 28, 2013; Sep. 9, 2013>
[This Article Added on Feb. 28, 2007]
| Article 212-4 (Subject matter and method of issuing purchaser-issued invoice) |
| (1) | The term "reasons prescribed by Presidential Decree" in Article 163-3(1) of the Act means the case where a business operator or a corporation (hereafter referred to as "supplier" in this Article) who has supplied goods or services falls under any of the following subparagraphs: <Added on Feb. 29, 2024> |
| 1. | Where the whereabouts are unknown or the contact is lost; |
| 2. | Where the Commissioner of the National Tax Service deems it difficult to obtain an invoice due to the suspension of business or other unavoidable reasons; |
| (2) | A resident (hereafter in this Article, referred to as an "applicant") intending to issue a purchaser-issued invoice under Article 163-3(1) of the Act (hereafter in this Article, referred to as a "purchase-issued invoice") shall file an application for transaction confirmation prescribed by Decree of the Ministry of Finance and Economy with the head of the tax office having jurisdiction over the applicant, along with a document objectively evidencing the fact of transaction, within six months after the end of the taxable period during which the relevant goods or services are supplied falls. <Amended on Feb. 29, 2024; Dec. 30, 2025> |
| (3) | The transactions subject to the application for transaction confirmation under paragraph (2) shall be the cases where the value of supply per transaction is not less than 50,000 won. <Amended on Feb. 29, 2024> |
| (4) | The head of the competent tax office in receipt of the application under paragraph (2) may request the applicant to correct the application within 7 days from the date of its filling, specifying a period of time, if it includes an incorrect information on the personal information of the supplier or there is a flaw in how the application for is filled out. <Amended on Feb. 29, 2024> |
| (5) | Where the applicant fails to comply with the request for correction within a period time specified under paragraph (4) or falls under any of the following cases, the head of the tax office having jurisdiction over the applicant shall determine to refuse to confirm the fact of transaction: <Amended on Feb. 29, 2024> |
| 1. | Where it is clear that the deadline for application specified in paragraph (2) has passed; |
| 2. | Where the application clearly reveals that the transaction has been made with an entity whose business was unregistered, suspended or closed at the time of transaction. |
| (6) | If the head of the tax office having jurisdiction over the applicant does not determine to refuse the confirmation pursuant to paragraph (5), he or she shall forward the application and the evidentiary documents submitted to the head of the tax office having jurisdiction over the supplier, within seven days from the date on which the application for transaction confirmation is filed (where the request for correction is made pursuant to paragraph (4), the date such correction is made). <Amended on Feb. 29, 2024> |
| (7) | The head of the tax office having jurisdiction over the supplier in receipt of an application forwarded under paragraph (6) shall verify the fact of transaction based on the details of the application and evidentiary documents submitted. In such cases, the burden of proving the fact and the details of transaction shall rest on the applicant. <Amended on Feb. 29, 2024> |
| (8) | The head of the tax office having jurisdiction over the supplier shall verify the fact of transaction by the end of the month following the month in which the date of application falls and then give notice to the heads of the tax offices having jurisdiction over the supplier and the applicant according to the following classifications; provided, where an unavoidable reason prescribed by Decree of the Ministry of Finance and Economy exists, such as the supplier's default or temporary absence, the period of verifying the fact of transaction may be extended by up to 20 days: <Amended on Feb. 29, 2024; Dec. 30, 2025> |
| 1. | Where the fact of transaction is verified: Notice of confirmation of transaction between the supplier and the recipient, including their business registration number, the date of preparation, the value of supply, etc.; |
| 2. | Where the fact of transaction is not verified: Notice of non-confirmation of transaction. |
| (9) | The head of the tax office having jurisdiction over the applicant shall, upon receipt of the notice under paragraph (8) from the head of the tax office having jurisdiction over the supplier, immediately give notice to the applicant of the result of verification. <Amended on Feb. 29, 2024> |
| (10) | The applicant in receipt of the notice on the transaction confirmation under paragraph (8)1 from the head of the tax office having jurisdiction over the applicant pursuant to paragraph (9) shall issue a purchaser-issued invoice prepared on the basis of the date of transaction confirmed by the head of the tax office having jurisdiction over the supplier and deliver it to the supplier. <Amended on Feb. 29, 2024> |
| (11) | Notwithstanding paragraph (10), when the applicant and the supplier receive the notice under paragraph (8)1 from the head of the competent tax office, the applicant shall be deemed to have delivered a purchaser-issued invoice to the supplier. <Amended on Feb. 29, 2024> |
| (12) | The form of a list of total purchaser-issued invoices to be submitted pursuant to Article 84(5)3 of the Enforcement Decree of the Value-Added Tax Act when a business operator intends to be entitled to deduction of fictitious input tax amount under Article 42 of the Value-Added Tax Act shall be specified by Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2024; Dec. 30, 2025> |
[This Article Added on Feb. 28, 2023]
| Article 213 (Submission of statements of payment) |
| (1) | Statements of payment under Article 164(1) of the Act and simplified statements of payment under Article 164-3(1) of the Act shall be classified for each income earner paid the income, and their forms shall be prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 12, 2019; May 4, 2021; Dec. 30, 2025> |
| (2) | Deleted. <Feb. 28, 2023> |
| (3) | In any of the following cases, a statement of payment on the aggregate amount paid annually to each income earner shall be submitted to the head of the competent tax office in charge of tax withholding, the commissioner of the competent regional tax office, or the Commissioner of the National Tax Service: <Added on Dec. 30, 2002; Feb. 19, 2005; Feb. 22, 2008; Feb. 18, 2010; Feb. 15, 2013> |
| 1. | Where the National Health Insurance Corporation under the National Health Insurance Act, and the Korea Labor Welfare Corporation under the Industrial Accident Compensation Insurance Act, pay expenses for medical care benefits, etc. to medical institutions under the Medical Service Act or pharmacies under the Pharmaceutical Affairs Act; |
| 2. | Where a multi-level marketing distributor pays supporting allowances to multi-level marketing sellers under the Act on Door-to-Door Sales; |
| 3. | Where the amount of interest income (excluding the interest income from bonds, etc. pursuant to Article 46(1) of the Act) annually paid by a financial company, etc. to a resident for each account does not exceed one million won. |
| (4) | Where a person obligated to submit a statement of payment under Article 164(1) of the Act submits a report on confirmation of details of employment to the Minister of Employment and Labor in accordance with the latter part of Article 7(1) of the Enforcement Decree of the Employment Insurance Act, the person shall be deemed to have submitted a statement of payment in accordance with the proviso to Article 164(1) of the Act. <Added on Feb. 3, 2015> |
| (5) | "Worker employed on a daily basis prescribed by Presidential Decree" in the proviso of Article 164(1) of the Act, means a worker employed on a daily basis pursuant to Article 20. <Amended on Feb. 18, 2010> |
| (6) | "Gains from long-term savings insurances prescribed by Presidential Decree" in Article 164(1)8 of the Act, means gains on insurance (excluding where a person receives insurance money for death, illness, injury, and other physical wound, or loss or destruction of assets of the insured) that do not fall under Article 16(1)9 of the Act. <Amended on Feb. 18, 2010> |
[Title Amended on May 4, 2021]
| Article 213-2 (Submission through device issuing cash receipts) |
| (1) | "Income prescribed by Presidential Decree" in the latter part of Article 164(3) and Article 164-3(2) of the Act means income falling under any of the following subparagraphs: <Amended on Feb. 18, 2010; Feb. 12, 2019> |
| 1. | Wage and salary income paid to a worker on a daily base under Article 213(5); |
| 2. | Wage and salary income paid to a resident under Article 215(2). |
| (2) | "Methods prescribed by Presidential Decree, such as a device issuing Cash Receipts" in the latter part of Article 164(3) of the Act means submission of all the following matters through a device issuing Cash Receipts under Article 126-3 of the Restriction of Special Taxation Act: <Amended on Feb. 22, 2008; Feb. 18, 2010; Feb. 12, 2019> |
| 1. | Reversion fiscal year of salary; |
| 2. | Resident registration number of the worker on a daily base or the resident; |
| 4. | Income tax (referring to determined amount). |
| (3) | "Methods prescribed by Presidential Decree, such as a cash receipt-issuing device" in the latter part of Article 164-3(2) of the Act means submission of all the following matters through cash receipt-issuing machines under Article 126-3 of the Restriction of Special Taxation Act: <Added on Feb. 12, 2019; May 4, 2021> |
| 1. | Reversion fiscal year of salary; |
| 2. | Resident Registration Number of an income earner; |
[This Article Added on Feb. 9, 2006]
| Article 214 (Exemption from submission of statements of payment) |
| (1) | Article 164(1) of the Act shall not apply to any of the following income: <Amended on Feb. 9, 2006; Feb. 22, 2008; Feb. 29, 2008; Feb. 18, 2010; Dec. 29, 2017; Feb. 17, 2021; Feb. 28, 2023; Dec. 30, 2025> |
| 1. | Other income non-taxable under subparagraph 5 of Article 12 of the Act; provided, money and goods specified in Article 19(3)3 shall be excluded herefrom; |
| 2. | Deleted; <Feb. 28, 2023> |
| 2-2. | Income falling under subparagraph 3a through g,k,l,n,p,t, and w of Article 12 of the Act; |
| 2-3. | Income falling under subparagraphs 2 through 4 and 8 of Article 12; |
| 3. | Other income prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | Deleted. <Feb. 9, 2006> |
| (3) | "Person engaging in a specific type of business or below a specific scale" in Article 164(4) of the Act, means a person who has submitted statements of payment of less than 50 pages in the preceding taxable year or a person, the number of whose regular employees (referring to the average number of persons based on the current status as at the end of each month) does not exceed ten persons; provided, any of the following persons shall be excluded: <Amended on Dec. 30, 2003; Feb. 22, 2008; Feb. 18, 2010; Feb. 17, 2016> |
| 1. | A person engaged in financial and insurance activities under the Korean Standard Industrial Classification; |
| 2. | The State, a local government or an association of local governments; |
| 4. | A person liable to double-entry bookkeeping. |
| (4) | A person entitled to submit a simplified statements of payment in writing pursuant to Article 164-3(3) of the Act shall be one whose number of statements of payment submitted in the immediately previous taxable year pursuant to Article 164(1) is less than 5 or one whose number of full-time workers is not more than five; provided, the following persons shall be excluded: <Added on Feb. 12, 2019; May 4, 2021> |
| 1. | A person engaged in financial and insurance activities under the Korean Standard Industrial Classification; |
| 2. | The State, a local government or an association of local governments; |
| 4. | A person liable to double-entry bookkeeping. |
[Title Amended on May 4, 2021]
| Article 215 (Special cases in relation to submission of statements of payment) |
| (1) | Where a withholding agent intends to submit details on withholding tax and other related documents in lieu of a statement of payment pursuant to Article 164(5) of the Act, he or she shall submit a duplicate of the relevant withholding tax receipt to the head of the competent tax office having jurisdiction over the withholding by the deadline under Article 164 of the Act. <Amended on Feb. 18, 2010> |
| (2) | With respect to a resident whose gross wage and salary income does not exceed the aggregate of the wage and salary income deductions and the basic deduction for the resident him or herself, the relevant withholding agent may submit a statement of payment of wage and salary income in the form prescribed by the Commissioner of the National Tax Service in lieu of a statement of payment under Article 164 of the Act; provided, it shall be only applicable to a resident having no secondary place of work, and applied to a person who is employed or retires during the taxable period, on the basis of the amount of gross pay which is converted to an annual figure. <Amended on Aug. 22, 1996; Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010; Feb. 21, 2014> |
| (3) | With respect to interest income under Article 16(1) of the Act or dividend income under Article 17(1) of the Act, a statement of payment of the interest income or the dividend income determined by Decree of the Ministry of Finance and Economy may be submitted in lieu of a statement of payment under Article 164(1) of the Act. <Amended on Apr. 1, 1998; Feb. 22, 2008; Feb. 29, 2008; Dec. 30, 2025> |
| (4) | Deleted. <Dec. 29, 2000> |
| (5) | With respect to a business operator whose business income for which the year-end tax settlement shall be made under Article 144-2 of the Act (referring to the amount of income converted an annual figure) does not exceed the aggregate of the basic deductions for the business operator him or herself, a "statement of payment of business income" in the form prescribed by the Commissioner of the National Tax Service may be submitted in lieu of a statement of payment under Article 164 of the Act. <Added on Dec. 31, 1996; Feb. 22, 2008; Feb. 21, 2014> |
| (6) | "Other income prescribed by Presidential Decree" in Article 164(10) of the Act means other income under Article 21(1)15a and 19a and b of the Act. <Amended on Feb. 18, 2010; Feb. 28, 2023> |
| (7) | Upon receiving a statement of payment of other income under paragraph (6), the Commissioner of the National Tax Service shall provide residents with the details of the relevant other income through the Home Tax Service defined in subparagraph 19 of Article 2 of the Framework Act on National Taxes so that such details can be used by residents for filing a final return on the tax base of global income. In such cases, whenever there is any change in the details due to an error, etc., the Commissioner of the National Tax Service shall correct the details and notify the relevant taxpayer thereof. <Added on Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010> |
[Title Amended on Feb. 22, 2008]
| Article 216 (Extension of deadline for submission of statements of payment) |
| (1) | In cases where natural disasters or other special causes have occurred, the relevant head of the competent tax office in charge of tax withholding, the commissioner of the competent regional tax office, or the Commissioner of the National Tax Service may exempt a submission of a statement of payment under Article 164 of the Act or a simplified statement of payment under Article 164-3 of the Act extend its submission deadline pursuant to each of the following subparagraphs: <Amended on Apr. 1, 1998; Feb. 22, 2008; Feb. 29, 2008; Feb. 12, 2019; May 4, 2021; Dec. 30, 2025> |
| 1. | In cases where the books and other evidential documents are destroyed or lost due to inevitable causes, such as natural disasters, a submission of the statement of payment or the simplified statement of payment for the period from the portion in the month preceding that in which such causes have occurred, to the portion in the month preceding that in which the relevant business has been restored to its original conditions (in cases of Article 164(3) of the Act, the portion for the period determined by Decree of the Ministry of Finance and Economy), may be exempted; |
| 2. | In cases where the books and other evidential documents are seized or detained by the competent authorities, the deadline for submission of a statement of payment for the portion of current month in which the relevant causes have occurred and the portion of preceding month thereof (in cases of Article 164(3) of the Act, the portion of the period determined by Decree of the Ministry of Finance and Economy) may be extended by not later than the end of the month following that whereto belongs the date on which the statement of payment or the simplified statement of payment has been brought in such status as capable of being submitted. |
| (2) | A person who intends to obtain an exemption or extension of a submission of a statement of payment or a simplified statement of payment under paragraph (1), shall apply to the head of the competent tax office in charge of tax withholding, the commissioner of the competent regional tax office or the Commissioner of the National Tax Service within the deadline under Article 164 or 164-3 of the Act. <Amended on Feb. 22, 2008; Feb. 12, 2019; May 4, 2021> |
[Title Amended on May 4, 2021]
| Article 216-2 (Special cases concerning duty to submit statements of payment of nonresidents' domestic source income) |
| (1) | A person who pays domestic source income under Article 119 of the Act to a nonresident shall submit a statement of payment prescribed by Decree of the Ministry of Finance and Economy (hereafter referred to as "statement of payment" in this Article) to the head of the competent tax office having jurisdiction over the place for tax payment pursuant to Article 164-2 of the Act; provided this shall not apply to any of the following income: <Amended on Dec. 31, 2001; Feb. 19, 2005; Feb. 9, 2006; Feb. 29, 2008; Feb. 4, 2009; Feb. 18, 2010; Feb. 15, 2013; Feb. 21, 2014; Feb. 28, 2025; Dec. 30, 2025> |
| 1. | Domestic source income eligible for non-taxation or exemption from income tax under the Act or the Restriction of Special Taxation Act; provided, the following domestic source income shall be excluded herefrom: |
| a. | Domestic source income under Article 21(1) of the Restriction of Special Taxation Act; |
| b. | Domestic source income under Article 21-2(1) of the Restriction of Special Taxation Act; |
| c. | Domestic source income under Article 121-2(3) of the Restriction of Special Taxation Act (referring to the domestic source income earned before the Restriction of Special Taxation Act is partially amended by Act No. 12173); |
| 2. | Income in a substantial relation with the domestic place of business or reverted to the said place of business (excluding income withheld at source under Article 46 of the Act), which are the domestic source income under subparagraphs 1, 2, 4, 10, 11, and 12 of Article 119 of the Act (excluding income under items f and g of the said subparagraph); |
| 3. | Domestic source income under subparagraphs 3 of Article 119 of the Act; |
| 4. | Domestic source income under subparagraph 5 of Article 119 of the Act (excluding the income withheld at source under Article 156 of the Act); |
| 5. | Income falling under subparagraph 12f and g of Article 119 of the Act; |
| 6. | Domestic source income for which an application for non-taxation or exemption has been filed under Article 156-2 of the Act; |
| 7. | Income for which an amount of withholding tax is less than 1,000 won (excluding the income under subparagraphs 9 and 11 of Article 119 of the Act); |
| 8. | Income prescribed by Decree of the Ministry of Finance and Economy as other income deemed that there is no effect in presentation of a statement of payment. |
| (2) | Deleted. <Dec. 30, 2002> |
| (3) | Where income tax is withheld at source pursuant to Article 46 or 156(6) or (16) of the Act, the relevant withholding agent shall submit a statement of payment for the amount paid. <Added on Dec. 31, 2001; Feb. 4, 2009; Feb. 2, 2012; Feb. 17, 2021; Feb. 15, 2022; Mar. 8, 2022> |
| (4) | A statement of payment with respect to income specified in subparagraphs 1, 2, and 11 of Article 119 of the Act and in Article 156-5 of the Act may be separately prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 22, 2008; Feb. 29, 2008; Feb. 18, 2010; Dec. 30, 2025> |
| (5) | Deleted. <Feb. 9, 2006> |
| (6) | Articles 215 and 216 shall apply mutatis mutandis to the presentation of a statement of payment for domestic source income, etc. of a nonresident. <Amended on Feb. 4, 2009; Feb. 18, 2010> |
[This Article Added on Dec. 29, 2000]
[Title Amended on Feb. 22, 2008]
| Article 216-3 (Submission of evidentiary documents for income deduction and tax credits and administrative guidance therefor) |
| (1) | "Income deduction and tax credits on income tax prescribed by Presidential Decree" in the main sentence of Article 165(1) of the Act means additional deduction on disabled persons under Article 107(1)1 and 2 and income deduction and tax credits on the payment of the following amounts: <Amended on Feb. 28, 2007; Feb. 22, 2008; Feb. 18, 2010; Dec. 8, 2011; Feb. 15, 2013; Feb. 21, 2014; Feb. 3, 2015; Dec. 5, 2016; Dec. 29, 2017; Feb. 13, 2018; Feb. 17, 2021; Feb. 15, 2022; Feb. 17, 2022; Feb. 28, 2023; Nov. 12, 2024> |
| 1. | Payments into pension accounts under Article 59-3(1) of the Act; |
| 1-2. | Interest expenses of the mortgage-backed retirement pension under Article 51-4 of the Act; |
| 2. | Insurance premiums under Article 59-4(1) of the Act; |
| 3. | Medical expenses under Article 59-4(2) of the Act and Article 122-3 of the Restriction of Special Taxation Act; provided, medical expenses under Article 118-5(1)4 and 5 shall be excluded herefrom; |
| 4. | Educational expenses under Article 59-4(3) of the Act, which have been paid to any of the following institutions: |
| a. | Kindergartens under the Early Childhood Education Act; |
| b. | Schools under the Elementary and Secondary Education Act, the Higher Education Act, and special Acts; |
| c. | Child care centers under the Infant Care Act; |
| d. | Facilities for the development and training of occupational abilities under the National Lifelong Vocational Skills Development Act; |
| 4-2. | Educational expenses under Article 122-3 of the Restriction of Special Taxation Act, which have been paid to an agency in subparagraph 4a through c; |
| 4-3. | Educational expenses paid to repay principal of and interest on student loans under Article 59-4(3)2d of the Act; |
| 5. | The amount of repayment of the principal and interest of a loan to rent a house and the amount of repayment of interest of a long-term mortgage loan under Article 52(4)1 and (5) of the Act; |
| 5-2. | The amount of interest paid for a lease on a deposit basis without a large sum of key money under Article 99-7 of the Restriction of Special Taxation Act; |
| 6. | The amount deposited in any of the following savings or trusts: |
| a. | Venture business investment trusts under Article 16(1)2 of the Restriction of Special Taxation Act; |
| b. | Deleted; <Feb. 15, 2013> |
| c. | Mutual aid installments under Article 86-3 of the Restriction of Special Taxation Act; |
| d. | Subscription deposit and general house subscription deposit under Article 87(2) of the Restriction of Special Taxation Act; |
| e. | Long-term stock savings under Article 91-9(1) of the Restriction of Special Taxation Act; |
| f. | Long-term collective investment securities savings under Article 91-16(1) of the Restriction of Special Taxation Act; |
| 7. | Monthly rents paid to a public housing project operator under the Special Act on Public Housing among the monthly rents under Article 95-2 of the Act on Restriction on Special Cases concerning Taxation; |
| 7-2. | Deleted; <Feb. 18, 2010> |
| 7-3. | Deleted; <Feb. 18, 2010> |
| 8. | Amount of use of credit cards, etc. under Article 126-2 of the Restriction of Special Taxation Act; |
| 9. | Pension insurance premiums paid under the National Pension Act, out of pension insurance premiums under Article 51-3(1) of the Act; |
| 10. | Insurance premiums that employees are liable to pay under the National Health Insurance Act, the Employment Insurance Act, and the Long-Term Care Insurance Act, under Article 52(1) of the Act. |
| (2) | A person who issues evidentiary documents for income deduction and tax credits under Article 165(1) of the Act, shall submit said documents to the Commissioner of the National Tax Service or the institution referred to in Appendix 4 (hereafter referred to as "data concentration institution" in this Article), as prescribed by the Commissioner of the National Tax Service. <Amended on Feb. 21, 2014; Feb. 15, 2022> |
| (3) | The data concentration institution referred to in paragraph (2) shall submit evidentiary documents for income deduction and tax credits to the Commissioner of the National Tax Service, as prescribed by the Commissioner of the National Tax Service. <Amended on Feb. 21, 2014> |
| (4) | "Cases prescribed by Presidential Decree, such as where a person who is issued evidentiary documents for income deduction and tax credits refuses to submit the evidentiary documents" in the proviso to Article 165(1) of the Act, means where a person who is issued evidentiary documents for income deduction and tax credits refuses to submit documents concerning the details of his or her medical expenses and the relevant documents until before the data concentration institution submits the evidentiary documents for income deduction and tax credits to the Commissioner of the National Tax Service under paragraph (3). <Amended on Feb. 18, 2010; Feb. 21, 2014; Feb. 3, 2015> |
| (5) | The Commissioner of the National Tax Service may prescribe necessary matters concerning guidance, such as information about the submission of documents for the persons who issue evidentiary documents for income deduction and tax credits, within the extent necessary for income deduction and tax credits. <Amended on Feb. 21, 2014> |
| (6) | "Where consent has been obtained by methods prescribed by Presidential Decree, such as in writing" in Article 165(6) of the Act, means where a person subject to basic deduction under Article 50 of the Act provides information with consent by any of the following methods: <Added on Feb. 4, 2009; Aug. 31, 2012; Dec. 8, 2020> |
| 2. | Consent by electronic document defined in subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions bearing an authorized digital signature defined in subparagraph 2 of Article 2 of the Digital Signature Act (limited to those that can identify the real name of the signatory); |
| 3. | Consent through communications determined by the Commissioner of the National Tax Service as wire and wireless communications by which security and stability on information providers can be secured. |
| (7) | "Persons prescribed by Presidential Decree" in the main clause of Article 165(1) of the Act means any of the following persons: <Added on Feb. 17, 2021> |
| 1. | An insurance company under the Insurance Business Act; |
| 2. | A person conducting mutual aid business under the Fisheries Cooperatives Act, the Credit Unions Act; or the Community Credit Cooperatives Act; |
| 3. | Mutual aid associations under the Military Personnel Mutual Aid Association Act, the Korea Teachers’ Credit Union Act, the Public Officials Benefit Association Act, the Police Mutual Aid Association Act, and the Korea Fire Officials Credit Union Act; |
[This Article Added on Feb. 9, 2006]
[Title Amended on Feb. 21, 2014]
| Article 216-4 (Submission of virtual asset transaction details) |
A virtual asset service provider required to submit materials necessary for the imposition of income tax, including virtual asset transaction details, pursuant to Article 164-4 of the Act shall submit to the head of the tax office having jurisdiction over the place of tax payment, the Commissioner of a Regional Tax Office, or the Commissioner of the National Tax Service a detailed statement of virtual asset transactions and a summary table of virtual asset transactions prescribed by Decree of the Ministry of Finance and Economy. <Amended on Feb. 28, 2025; Dec. 30, 2025>
[This Article Added on Mar. 8, 2022]
[Title Amended on Feb. 28, 2025]
| Article 216-5 (Submission of statements of transactions on overseas stock options) |
| (1) | "Foreign corporation that is a controlling foreign corporation prescribed by Presidential Decree" in Article 164-5(1)2a of the Act means a foreign corporation classified as follows: |
| 1. | Where executive officers, etc. referred to in Article 164-5(1)1 of the Act (hereinafter referred to as "executive officers, etc." in this Article) are engaged in a domestic corporation: A foreign corporation falling under Article 45(1)1 of the Enforcement Decree of the Adjustment of International Taxes Act; |
| 2. | Where executive officer, etc. are engaged in the domestic business place of a foreign corporation under Article 94 of the Corporate Tax Act: A foreign corporation falling under Article 45(2)1 or 2 of the Enforcement Decree of the Adjustment of International Taxes Act. |
| (2) | "Things prescribed by Presidential Decree" in Article 164-5(1)2b of the Act means bonuses paid to executive officers, etc., which satisfy all of the following requirements: |
| 1. | The payment shall be made with stocks or money equivalent to the value of stocks; |
| 2. | The payment shall be granted in accordance with the operating standards, etc. of share-based compensation prepared in advance. |
[This Article Added on Feb. 29, 2024]
| Article 217 (Preparation and keeping of books for tax withholding for interest and dividend) |
A withholding agent who pays interest income or dividend income in the Republic of Korea shall prepare and record a book for tax withholding for interest and dividend determined by Decree of the Ministry of Finance and Economy. In such cases, if the book for tax withholding for interest and dividend is placed in such status as is capable of outputting at any time, by recording and keeping the said book in the computerized tapes or diskettes, it shall be deemed that the book for tax withholding for the interest and dividend is kept and recorded. <Amended on Dec. 30, 2025>
[This Article Wholly Amended on Dec. 31, 2024]
| Article 217-2 Deleted. <Feb. 12, 2019> |
| Article 217-3 Deleted. <Feb. 12, 2019> |
| Article 217-4 Deleted. <Feb. 12, 2019> |
| Article 217-5 Deleted. <Feb. 17, 2021> |
| Article 218 (Utilization and furnishing of computerized information data on resident registration) |
| (1) | The Commissioner of the National Tax Service shall, where deemed necessary for the affairs of imposing and collecting income tax, request the head of an institution in charge of guiding and supervising the affairs of resident registration under the Resident Registration Act or the head of an agency entrusted with guidance and supervision (hereafter referred to as "head of the supervisory agency of the affairs concerning resident registration" in this Article) or the Minister of National Court Administration under Article 11 of the Act on the Registration of Family Relationships to furnish, by utilizing the computerized media, the computerized information data on resident registration or family relationship registration. <Amended on Feb. 19, 2005; Dec. 30, 2010> |
| (2) | Upon receipt of a request under paragraph (1), the head of the supervisory agency of the affairs concerning resident registration or the Minister of National Court Administration shall furnish the computerized information data on resident registration or family relationship registration unless extenuating circumstances exist. <Amended on Dec. 30, 2010> |
[This Article Wholly Amended on Jun. 30, 1995]
[Title Amended on Dec. 30, 2010]
| Article 219 (Submission of certified copy of foreigner's registration card) |
Where a nonresident files a final return on the tax base, he or she shall submit a final return on the tax base along with a certified copy of the foreigner's registration card or other similar documents to the head of the competent tax office having jurisdiction over the place for tax payment.
| Article 220 (Assignment of registration of business operator and inherent code number) |
| (1) | A person who intends to make registration of business operator pursuant to Article 168(1) shall submit an application for registration of business operator for each place of business to the head of the competent tax office having jurisdiction over the location of the relevant place of business within 20 days from the commencement date of the business, as prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 12, 2019; Dec. 30, 2025> |
| (2) | Among persons intending to make registration of business operator pursuant to Article 168(1) of the Act. a person who intends to run house rental business shall attach a statement of rental houses prescribed by Decree of the Ministry of Finance and Economy when submitting an application for registration of business operator under paragraph (1). In such cases, a copy of the certificate of registration of rental business operator under Article 4(6) of the Enforcement Decree of the Special Act on Private Rental Housing may be attached in lieu of a statement of rental houses. <Added on Feb. 12, 2019; Sep. 26, 2023; Dec. 30, 2025> |
| (3) | Where any person submits an application under Article 4(4) under the Enforcement Decree of the Special Act on Private Rental Housing, together with an application for registration of business operator under paragraph (1), to make registration of business operator when filing an application for registration of business operator with the Special Self-Governing City Mayor, the Special Self-Governing Province Governor, or the head of a Si/Gun/Gu (in cases of the head of a Gu, referring to the head of an autonomous Gu pursuant to Article 5 of the Special Act on Private Rental Housing, he or she shall be deemed to make registration of business operator under Article 168(1) of the Act. In such cases, the deadline for issuance under the main sentence of Article 11(5) of the Enforcement Decree of the Value-Added Tax Act shall be calculated beginning with the day when the application for registration of business operator reaches the Home Tax Service. <Added Feb. 12, 2019; Sep. 26, 2023> |
| (4) | The inherent code number under Article 168(5) of the Act shall be assigned by the head of the competent tax office having jurisdiction over the location of the relevant place of business, association and foundation, other than an organization deemed a corporation, or any other organization. <Amended on Feb. 22, 2008; Feb. 12, 2019> |
[This Article Wholly Amended on Feb. 9, 2006]
[Title Amended on Feb. 12, 2019]
| Article 221 (Payment of subsidies) |
| (1) | The Commissioner of the National Tax Service shall grant subsidies to a taxpayers association, within the scope of the amount equivalent to 1/100 through 10/100 of the income amount of tax collected and paid every month by the taxpayers association under Article 150 of the Act, in view of the amount of tax collected and paid by the taxpayers association, the number of its members, peculiarity of the kinds of business, its operational expenses, etc.; provided he or she shall not pay the amount exceeding the amount calculated by multiplying the number of members from which the taxpayers association collects and pays tax monthly by the amount specified by Decree of the Ministry of Finance and Economy in view of the expenses for tax audit, etc. <Amended on Feb. 11, 2020; Dec. 30, 2025> |
| (2) | Any person who intends to receive subsidies pursuant to paragraph (1) shall file an application therefor with the head of the competent tax office having jurisdiction over the place for tax payment by not later than December 20 of the relevant taxable period; provided, he or she may apply for the portion of December by not later than the end of February of the following year. <Amended on Feb. 18, 2010; Feb. 3, 2015> |
| Article 222 (Query and inspection) |
| (1) | If a public official in charge of taxation affairs performs an investigation on income tax, and where he or she examines the books of account, documents, and other articles, he or she shall produce an investigator's certificate determined by Decree of the Ministry of Finance and Economy to parties concerned. <Amended on Apr. 1, 1998; Feb. 29, 2008Dec. 29, 2017; Feb. 15, 2022; Dec. 30, 2025> |
| (2) | Where a religious organization duly prepares and keeps records of the amount of money paid and goods supplied to its religion-related workers by separating them from expenses disbursed in connection with other religious activities pursuant to Article 41(16), any public official in charge of taxation affairs shall not inspect the books of account or documents that a religious organization prepares and keeps by separating records of the amount of money paid and goods supplied to its religion-related workers from records of expenses disbursed in connection with other religious activities nor shall order a religious organization to submit such books of account or documents, when the public official inquires of or investigates such religious organization under Article 170 of the Act. <Added on Dec. 29, 2017; Feb. 12, 2019> |
| (3) | Where a public official in charge of taxation affairs intends to exercise his or her authority to inquire of or investigate into a tax return on a religious person's income under Article 170 of the Act in connection with an omission or error in such tax return, such public official shall inform the religious person about how to file a revised return pursuant to Article 45 of the Framework Act on National Taxes. <Added on Dec. 29, 2017> |
| Article 223 (Inspection of pension income documents) |
"Data prescribed by Presidential Decree" in subparagraph 7 of Article 172 of the Act, means any of the following data: <Amended on Feb. 18, 2010; Feb. 3, 2015>
| 1. | Data concerning refund money paid on the basis of the amount of paid-in deduction in a workplace mutual-aid association under Article 26; |
| 2. | Data concerning pension income paid on the basis of pension contribution or employer charges deposited before December 31, 2001 or on the basis of the provision of labor before December 31, 2001 under the Public Officials Pension Act, the Military Pension Act, the Pension for Private School Teachers and Staff Act, or the Special Post Offices Act. |
[This Article Added on Feb. 9, 2006]
| Article 224 (Scope of service providers and places of business providers) |
| (1) | "Services prescribed by Presidential Decree, such as chauffeur service, parcel delivery, etc." in Article 173(1) of the Act means services falling under any of the following subparagraphs: <Amended on Feb. 29, 2008; Feb. 18, 2010; Nov. 9, 2021; Dec. 30, 2025> |
| 2. | Parcel delivery services; |
| 6. | Services similar to those under subparagraphs 1 through 5 directly provided by any person who is engaged in work concerning personal services under the Korea Standard Industry Code or the Korea Standard Classification of Occupation and prescribed by Decree of the Ministry of Finance and Economy. |
| (2) | "Person prescribed by Presidential Decree, such as a person who provides a place of business related to provision of services" in Article 173(1) of the Act means any person falling under any of the following subparagraphs in relation to the provision of the services falling under each subparagraph of paragraph (1) (excluding the cases where the income generated from the provision of the relevant service is subject to withholding income taxes under Article 127 of the Act); in such cases, if any person falls under the both of subparagraph 1 and subparagraph 2, it means the person under subparagraph 2. <Amended on Nov. 9, 2021> |
| 1. | A person who provides a place of business related to the provision of services to a person who provides services under the subparagraphs of paragraph (1), including a golf course business operator and hospital business operator; |
| 2. | A person who acts as an agent or a broker of the services under the subparagraphs of paragraph (1), including an employment agency business operator and a labor platform operator under Article 77-7(1) of the Employment Insurance Act (hereafter in this subparagraph, referred to as a "labor platform operator"). In such cases, where a person who acts as an agent or a broker of the relevant service enters into a contract for the use of labor platform under Article 77-7(1) of the Employment Insurance Act with a labor platform operator and acts an agent or a broker under such contract, the labor platform operator shall be deemed to be the person who acts as an agent or a broker of the relevant service. |
| (3) | Any person who shall prepare and submit taxation data concerning the revenue or amount of income of a service provider under Article 173(1) of the Act shall fill in the taxation data submission specifications of the place of business provider, etc. prescribed by Decree of the Ministry of Finance and Economy, personal information of the service provider, period of service provision, price for providing the service, etc. and submit it; provided this shall not apply when it is impossible to identify the price of the services provided. <Amended on Feb. 29, 2008; Nov. 9, 2021; Dec. 30, 2025> |
[This Article Added on Feb. 9, 2006]
| Article 225 (Submission of material concerning payment of non-life insurance) |
The material concerning the payment of non-life insurance under Article 174 of the Act shall be submitted in accordance with a notice of the result of the litigation filed for the claim of damage prescribed in Decree of the Ministry of Finance and Economy. <Amended on Feb. 29, 2008; Dec. 30, 2025>
[This Article Added on Feb. 28, 2007]
| Article 225-2 (Submission, etc. of detailed statements of trading of derivatives, etc. or stocks, etc. of financial investment business entities) |
| (1) | In applying subparagraphs 1 and 2 of Article 174-2 of the Act, a financial investment business entity prescribed in Article 8(1) of the Financial Investment Services and Capital Markets Act (hereafter in this Article, referred to as "financial investment business entity") shall submit the following documents to the head of the tax office having jurisdiction over its head office or principal place of business in the forms prescribed by Decree of the Ministry of Finance and Economy for each person whose capital gains tax shall be compulsorily reported with regard to derivatives, etc. referred to in Articles 159-2 of this Decree and stocks, etc. traded under Article 178(1) of the Enforcement Decree of the same Act: <Amended on Dec. 30, 2025> |
| 1. | In cases falling under subparagraph 1 of Article 174-2 of the Act: Detailed statements of transactions of derivatives; |
| 2. | In cases falling under subparagraph 2 of Article 174-2 of the Act: Detailed statements of transactions of stocks, etc. |
| (2) | Where the Commissioner of the National Tax Service makes a request pursuant to subparagraph 3a of Article 174-2 of the Act, the Commissioner shall notify the financial investment business entity of a list of large stockholders of the listed corporation, and such financial investment business entity shall submit to then Commissioner of the National Tax Service detailed statements of transactions of stocks, etc. prescribed by Decree of the Ministry of Finance and Economy with respect to the stocks traded by the relevant major shareholders so notified. <Added on Dec. 30, 2025; Feb. 27, 2026> |
| (3) | Where the Commissioner of the National Tax Service requests data pursuant to subparagraph 3b of Article 174-2 of the Act, a financial investment business entity shall submit to the Commissioner of the National Tax Service a detailed statement of transactions in overseas stocks, etc. prescribed by Decree of the Ministry of Finance and Economy. <Added on Feb. 27, 2026> |
| (4) | Where a financial investment business entity fails to submit the data under paragraphs (1) through (3) within the specified period, the head of the competent tax office or the Commissioner of the National Tax Service may request the relevant financial investment business entity to submit such data. In such cases, the financial investment business entity so requested shall comply therewith, unless there is a justifiable reason not to do so. <Amended on Feb. 27, 2026> |
[This Article Wholly Amended on Dec. 31, 2024]
| Article 225-3 Deleted. <Feb. 17, 2021> |
| Article 226 (Sample survey) |
| (1) | "Persons prescribed by Presidential Decree" in Article 175(1) of the Act means residents whose tax credit for donations or expenses eligible for inclusion in necessary expenses are at least one million won, or non-residents defined in Article 121(2) and (5) of the Act. <Amended on Feb. 15, 2013; Feb. 21, 2014> |
| (2) | "Number of persons equivalent to the rate prescribed by Presidential Decree" in Article 175(2) of the Act means the number of persons equivalent to 1/100 of persons eligible for donation deduction or persons eligible for inclusion in necessary expenses, who are liable for sample survey. <Amended on Feb. 15, 2013; Feb. 11, 2020> |
| (3) | The Commissioner of the National Tax Service shall formulate a master plan for sample survey each year and submit it to the Minister of Finance and Economy by the end of August of each year. <Amended on Feb. 29, 2008; Feb. 15, 2013; Dec. 30, 2025> |
| (4) | Sample surveys shall be performed by means of an on-site survey, written survey, etc., and matters necessary for procedures may be prescribed by Presidential Decree. |
[This Article Added on Feb. 22, 2008]
CHAPTER VII PENALTY PROVISIONS
| Article 227 Deleted. <Feb. 17, 2021> |
| Article 228 (Criteria for imposition of administrative fines) |
| (1) | The criteria for imposing administrative fines pursuant to Article 177 of the Act shall be as shown in Appendix 5. <Amended on Feb. 17, 2021> |
| (2) | The head of a tax office having jurisdiction over the relevant place for tax payment; may aggravate or abate an administrative fine within the extent of 1/2 of the amount of the relevant fine under the Appendix 5 in consideration of the severity of the violation, the frequency of violations, motives for the violation and the consequences thereof; provided, even the aggravated amount of an administrative fine shall not exceed the upper limit of an administrative fine under Article 177 of the Act. <Amended on Feb. 17, 2021> |
[This Article Added on Feb. 12, 2019]
ADDENDA <Presidential Decree No. 14467, Dec. 31, 1994>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 1996; provided, the provisions of Articles 9, 17, 18(1)8 and (2), subparagraph 2 of Article 22, Article 38(1)8 (proviso), Articles 45 through 101, 117, 127 through 132, 134, 141 through 146, 148 through 150, 153(4) and (5), 155(1), (7) through (14), 161, 163(1), (2), (5) and (6), 164, 165, 166(1) and (2), 167(5), 169, 208, 211, 212, 218 and 223 shall enter into force on January 1, 1995; and the provisions of Article 26 shall enter into force on January 1, 1999.
Article 2 (General applicability, etc.)
| (1) | This Decree shall apply to the portion of incomes accruing during the taxable period first commenced after this Decree enters into force; provided, the provisions of Articles 127 through 129 shall apply to the portion first traded after January 1, 1995. |
| (2) | The provisions concerning capital gains in this Decree shall apply to the portion first transferred after this Decree enters into force, notwithstanding the provisions of paragraph (1). |
Article 3 (Applicability concerning gains on insurance of savings nature)
The provisions of Article 25 shall apply to the income accruing after January 1, 1996, from among the insurance contract first concluded after October 1, 1994.
Article 4 (Applicability concerning refund for amount in excess of workplace mutual aid association)
The provisions of Article 26 shall apply to the refund received by a retirement or secession, after first joining in the workplace mutual aid association after January 1, 1999.
Article 5 (Applicability concerning depreciation)
The provisions of Articles 62 through 73 and 89 shall apply to the as- sets acquired first acquired after this Decree enters into force.
Article 6 (Applicability concerning special cases of calculation of gross income amount on deposit for lease, etc.)
In applying Article 53, with respect to the real estate for lease which has been acquired or built prior to December 31, 1990, the amount determined by Prime Ministerial Decree shall be deemed the amount equivalent to the construction costs.
Article 7 (Transitional measures on method of depreciation)
| (1) | With respect to the asset subject to the previous provisions of Article 92 as of the date this Decree enters into force, the previous provisions shall govern until the depreciation of relevant asset is completed. |
| (2) | With respect to the residual value of the asset whose depreciation is completed before December 31, 1993 under the previous provisions of Article 87, a business operator selects a period of over three years from among the period of five years beginning from the taxable period which terminates after December 31, 1994, and then includes the equally divided amount in the necessary expenses. |
| (3) | With respect to the residual value of the asset whose depreciation is not completed as of January 1, 1994, a business operator selects a period of over 3 years from among the period of five years beginning from the taxable period following that wherein the depreciation on the relevant asset is completed, and then the equally divided amount shall be included in the necessary expenses. |
Article 8 (Special cases for sideline income of farmhouse)
In applying subparagraph 2 of Article 9(1), with respect to income from farmers' sideline businesses accrued from January 1, 1995 to December 31, 1995, the relevant provisions shall apply with the words "12 million won per year" deemed to read "8 million won per year."
Article 9 (General transitional measures)
Any income tax levied or leviable under the previous provisions before this Decree enters into force shall be governed by the previous provisions.
Article 10 (Relationship with other Acts)
In cases where other Acts cite the previous provisions of the Enforcement Decree of the Income Tax Act as of January 1, 1996, and there exists a provision in this Decree corresponding thereto, the corresponding pro- visions of this Decree shall be deemed cited in lieu of the previous provisions.
Article 11 (Relationship with previous provisions)
In cases where the provisions entering into force on January 1, 1995 under the proviso to Article 1 of the Addenda are in conflict with the provisions of the Enforcement Decree of the Income Tax Act before this Decree enters into force, the previous provisions shall not apply.
ADDENDA <Presidential Decree No. 14862, Dec. 30, 1995>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability) The amended provisions of subparagraph 14 of Article 12 and Article 17(2) shall apply, beginning with the payment received in the month to which the date of promulgation belongs. |
ADDENDA <Presidential Decree No. 14721, Jul. 6, 1995>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 14739, Jul. 20, 1995>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 14860, Dec 30, 1995>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 1996; provided, the amended provisions of Article 162(6)1 and (7)1 shall enter into force on January 1, 1997.
Article 2 (General applicability)
This Decree shall apply to the income accrued during the taxable period first commenced after this Decree enters into force; provided, the amended provisions of Articles 62, 63, 67, 72, 73(2), 84(3), 141(1) and the provisions of Article 17(1) of the Addenda of this Decree shall apply to the portion for which the report term first arrived after this Decree enters into force.
Article 3 (Applicability concerning calculation of gains from securities investment trust)
In the calculation of profit and loss on the sales or evaluation of the securities which is not included in the gain of the securities investment trust under the amended provisions of Article 23(3), with respect to the securities retained as the relevant securities investment trust asset as of the date this Decree enters into force, it shall be calculated by making the value as of the date this Decree enters into force calculated by the method under Article 16 of the Enforcement Decree of the Securities Investment Trust Business Act as the acquisition value of such securities.
Article 4 (Applicability concerning profit margins on savings insurance)
The amended provisions of Article 25(2)2 shall apply to the insurance contract first concluded after this Decree enters into force.
Article 5 (Applicability concerning receipt date of interest income)
The amended provisions of Article 45 shall apply to the portion whose receipt date first arrived after this Decree enters into force.
Article 6 (Applicability concerning calculation of amount equivalent to interest during retention period of bonds, etc.)
The amended provisions of Article 102 shall apply to cases where the bonds, etc. are first sold or the interest is first received after this Decree enters into force.
Article 7 (Applicability concerning deduction for insurance premium)
The amended provisions of Article 109 shall apply to the insurance premium first paid after this Decree enters into force.
Article 8 (Applicability concerning capital gains)
| (1) | The amended provisions for capital gains in this Decree shall apply to the portion first transferred after this Decree enters into force. |
| (2) | The amended provisions of Articles 153(4), 155(1) and (15), 164(11) and 166 shall apply to the determination of the amount of capital gains after this Decree enters into force. |
| (3) | The amended provisions of Article 162(6)1 and (7)1 shall apply to the portion first transferred after January 1, 1997. |
| (4) | The amended provisions of Article 163(6) shall apply to the portion first transferred after this Decree enters into force; provided, with respect to the assets acquired before December 31, 1995, they may governed by the previous provisions. <Amended on Dec. 31, 1996> |
Article 9 (Applicability concerning long-term savings)
The amended provisions of Article 187(2) shall apply to the portion first joined in the long-term savings after this Decree enters into force; provided, with respect to the savings joined before the date this Decree enters into force, which satisfies the conditions indicated in the amended provisions of Article 187(2), it shall apply to the payment of incomes accrued after this Decree enters into force.
Article 10 (Applicability concerning tax withholding on interest income)
The amended provisions of subparagraph 1 of Article 190 shall apply to the interest and the discount amount of the notes first sold or mediated after this Decree enters into force.
Article 11 (Applicability concerning calculation of amount equivalent to interests during retention period of bonds, etc.)
| (1) | With respect to the bonds, etc. issued before this Decree enters into force, the amount equivalent to the interest during the retention period shall be calculated by regarding the issuance date of the relevant bonds, etc. (in cases of the tax withholding before the date this Decree enters into force, the date of tax withholding) as the purchase date as prescribed in Article 102(4). |
| (2) | In applying the amended provisions of Article 102(5), with respect to the bonds issued before December 31, 1995 for which a method of interest calculation is agreed by compound interest mode, but traded by simple interest mode from the issuance date to before December 31, 1995, the amount equivalent to the interest during the retention period may be calculated by the previous simple interest mode not later than the maturity date of the relevant bonds. |
Article 12 (Transitional measures on interest and discount amount of notes subject to tax withholding on date of discount sales)
In cases where the calculation period for interests and discount amounts of the bonds, etc. subject to the tax withholding on the date of discount sales under the previous provisions of subparagraph 1 of Article 190, ex- tends over the period before and after this Decree enters into force, the withholding tax amount and the amount equivalent to the interest during the retention period shall be settled in the revenue period as stipulated in Article 45 concerning the relevant notes, etc.
Article 13 (Transitional measures on capital gains tax)
| (1) | In cases where the farmland, which has fallen under the previous provisions of Article 153(3) as of the date this Decree enters into force, comes not to satisfy such requirements due to the amended provisions of the same paragraph, the previous provisions shall govern. |
| (2) | In applying the amended provisions of Article 154(1)3, with respect to a house transferred not later than December 31, 1996 as the inevitable causes under the previous provisions have occurred before this Decree enters into force, the previous provisions shall govern. |
Article 14 (Special cases concerning payment of withheld tax amount on amount equivalent to interest for retention period of bonds, etc.)
In paying the tax amount withheld under Article 46(2) of the Act, the tax amount withheld from January 1, 1996 to January 31, 1996 may be paid not later than March 10, 1996.
Article 15 (Special cases concerning inclusion of deposit money for wastes in necessary expenses)
| (1) | The amended provisions of Article 55(6) shall apply to the portion first deposited in the taxable period whereto belongs the date this Decree enters into force. |
| (2) | The deposit money prior to the taxable period whereto belongs the date this Decree enters into force, which is not refunded as of the date this Decree enters into force, shall be included in necessary expenses in the calculation of incomes for the taxable period whereto belongs the date this Decree enters into force or for the taxable period thereafter. |
Article 16 (Special cases concerning application of rate of credit card use)
In applying the amended provisions of Article 84(4), the use rate of credit card of a small and medium enterprise under Article 83(1), which has a business place in the area of a Special Metropolitan City or a Metropolitan City, shall be 50/100 not later than December 31, 1996.
Article 17 Omitted.
ADDENDA <Presidential Decree No. 14988, Apr. 27, 1996>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 14999, May 13, 1996>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability concerning Gain on Savings Insurance) The amended provisions of Article 25(1)1 shall apply to the insurance contract first concluded after this Decree enters into force. |
ADDENDA <Presidential Decree No. 15138, Aug. 22, 1996>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability concerning tax credit for wage and salary income of workers employed on daily basis) The amended provisions of Article 119 shall apply to the taxes withheld after this Decree enters into force. |
| (3) | (Applicability concerning Transfer of Stocks by Off-Board Registered Corporation) Article 157(5) shall apply to the portion first transferred after this Decree enters into force; provided the amended provisions of subparagraphs 2 and 3 of the same paragraph of the same Article shall be applied to the portion first transferred after July 1, 1996. |
| (4) | (Refund) Where any tax amount to be refunded has occurred due to the final return on tax base under Article 3 of the Addenda of Act No. 5155, the head of a tax office shall refund it within 30 days after the expiry of term for the final return on the tax base. |
ADDENDA <Presidential Decree No. 15191, Dec. 31, 1996>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 1997; provided, the amended provisions of subparagraph 12 of Article 12, Article 77, subparagraph 3-2 of Article 90, and Article 97(1) shall enter into force on the date of its promulgation, and the amended provisions of Article 184(1) shall enter into force on July 1, 1997.
Article 2 (General applicability)
This Decree shall apply to the portion of incomes accrued in the taxable period first commenced after this Decree enters into force; provided, the amended provisions of subparagraph 12 of Article 12, Article 77, subparagraph 3-2 of Article 90, and Article 97(1) shall apply to the portion of incomes in the taxable period whereto belongs the date this Decree enters into force; and the amended provisions of Articles 152, Articles 153(6), 155, 156, 158, 163, 164, 165, 166, 175-2 and 224, and Article 8(4) of the Addenda of Presidential Decree No. 14860 shall apply to the portion first transferred after this Decree enters into force.
Article 3 (Applicability concerning calculation of gains from securities investment trust)
In calculating the profit and loss incurred by the sales or evaluation of the securities which are not included in the gain or dividend of the securities investment trust under the amended provisions of Article 23(3), with respect to the securities retained as the securities investment trust asset as of the date this Decree enters into force, it shall be calculated by regarding the value as of the date this Decree enters into force, which is computed by the method under Article 14 of the Enforcement Decree of the Securities Investment Trust Business Act, as the acquisition value of such securities.
Article 4 (Applicability concerning receipt date of private pension savings)
The amended provisions of subparagraph 4b of Article 45 shall apply to cases where the private pension savings is first terminated or where the income is first paid in the forms other than pension, after this Decree enters into force.
Article 5 (Applicability concerning long-term contract)
The amended provisions of subparagraph 2 of Article 90 shall apply to the contract first concluded after this Decree enters into force.
Article 6 (Applicability concerning taxation for exchange bonds and mediation of sales of bonds, etc.)
The amended provisions of Article 102(5) shall apply to the exchange bonds first issued after this Decree enters into force; and the amended provisions of paragraph (9) of the same Article shall apply to the bonds first sold after this Decree enters into force.
Article 7 (Applicability concerning penalty taxes, etc.)
The amended provisions of Articles 147, 211 and 212 shall apply to the portion of goods or services supplied or received first after this Decree enters into force; provided, the amended provisions of Article 147 shall apply to the portion of goods or services supplied or received first after January 1, 1999 by an intermediate wholesaler under Article 2 of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products.
Article 8 (Applicability concerning non-taxation on farmland in area for large-scale development project)
The amended provisions of Article 153(4) shall apply to the determination of the amount of capital gains after this Decree enters into force.
Article 9 (Applicability concerning scope of business income subject to tax withholding)
The amended provisions of Article 184(1) shall apply to the portion of incomes first paid after January 1, 1997.
Article 10 (Applicability concerning long-term savings)
The amended provisions of Article 187(2) shall apply to the portion of joining in the long-term savings first after this Decree enters into force; provided, in cases of savings joined before this Decree enters into force, which meets the requirements under the amended provisions of Article 187(2), this shall apply to the portion of payment of the incomes accrued after this Decree enters into force.
Article 11 (Transitional measures on special cases in calculation of gross income amounts)
In applying the amended provisions of Article 53(3), the real estate for lease acquired before December 31, 1990 shall be deemed acquired on December 31, 1990.
Article 12 (Transitional measures on evaluation of securities)
In cases where securities are assessed by the valuation at cost or market under the previous provisions of subparagraph 1c of Article 93 as of the date this Decree enters into force, and there exist any balance in the securities valuation reserves which are appropriated as the necessary expenses, the amount obtained by deducting the balance in the relevant securities valuation reserves from the book value of the relevant securities shall be deemed the acquisition value of the relevant securities.
Article 13 (Transitional measures on exchange rate adjustment account of claims and debts in foreign currency)
The previous provisions of Article 158(3)1 shall apply to the balance in the exchange rate adjustment account under the previous provisions of Article 158(3)1 as at the time this Decree enters into force.
Article 14 (General transitional measures)
Any income tax levied or leviable under the previous provisions before this Decree enters into force shall be governed by the previous provisions.
ADDENDA <Presidential Decree No. 15486, Sep. 30, 1997>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 15500, Oct. 25, 1997>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability) The amended provisions of Article 179(8) shall apply to the portion first transferred after this Decree enters into force. |
ADDENDA <Presidential Decree No. 15565, Dec. 31, 1997>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 1998; provided, the amended provisions of Articles 68, 77, 97 and 112 of this Decree and Article 10 of the Addenda shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply to the portion of incomes accruing in the tax- able period first commenced after this Decree enters into force; provided, the amended provisions of Articles 68, 77, 97 and 112 shall apply to the portion of taxable period whereto belongs the date this Decree enters into force.
Article 3 (Applicability concerning capital gains tax)
The amended provisions concerning capital gains tax in this Decree shall apply from the portion of first transfer after this Decree enters into force.
Article 4 (Applicability concerning submission of documents attached to adjusted account statement)
The amended provisions of Article 131 shall apply to the portion first reported after this Decree enters into force.
Article 5 (Applicability concerning investigation and confirmation following report on current status of business place)
The amended provisions of Article 141 shall apply to the portion first re- ported after this Decree enters into force.
Article 6 (Applicability concerning calculation of income amount at time of determination and revision by estimation)
The amended provisions of Article 144 shall apply to the portion first determined or revised after this Decree enters into force.
Article 7 (Applicability concerning delivery of withholding tax receipts and invoices)
The amended provisions of Articles 193, 211 and 212 shall apply to the portion first delivered or submitted after this Decree enters into force.
Article 8 (General transitional measures)
Any income tax levied or leviable under the previous provisions before this Decree enters into force shall be governed by the previous provisions.
Article 9 (Transitional measures on acquisition of stocks, etc. of association-registered corporation)
Any stocks or investment shares acquired in conformity with the previous provisions of Article 157(5)4 before this Decree enters into force shall be deemed to have been acquired in conformity with the amended provisions of Article 157(5)4.
Article 10 (Special cases for inclusion of public imposts in necessary expenses)
In applying the amended provisions of Article 77, the public imposts falling under the amended provisions of Article 77 from among those under the previous provisions of Article 77(1) shall not be deemed public imposts falling under the amended provisions of Article 77 not later than December 31, 2000.
ADDENDA <Presidential Decree No. 15604, Dec. 31, 1997>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 10 Omitted.
ADDENDA <Presidential Decree No. 15747, Apr. 1, 1998>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability concerning to Savings Insurance) The amended provisions of Article 25(1)1 shall apply to the portion of first receiving the insurance money after this Decree enters into force; provided the portion of concluding an insurance contract before December 31, 1995 shall be governed by the previous provisions. |
| (3) | (Applicability concerning Capital Gains Tax) The amended provisions of Article 155(1) shall apply to the portion first transferred after this Decree enters into force. |
ADDENDA <Presidential Decree No. 15967, Dec. 31, 1998>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 1999.
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 15969, Dec. 31, 1998>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 1999; provided, the amended provisions of Articles 27 (limited to the part concerning division), 27-2 (limited to the part concerning division), 38(1)12e, 105(2), 110-2, and 112(4) shall enter into force on the date of its promulgation; the amended provisions of Articles 147-2 and 147-3 on January 1, 2000; and the amended provisions of Article 212 on July 1, 1999.
Article 2 (General applicability)
This Decree shall begin to apply from the first income accrued after this Decree enters into force; provided, the amended provisions of Articles 27 (limited to the part concerning division), 27-2 (limited to the part concerning division), 38(1)12e, 105(2), 110-2 and 112(4) shall begin to apply from the first portion of the taxable period whereto belongs the date this Decree enters into force; the amended provisions of Articles 48 and 51(3) and (5) shall begin to apply from the first portion of delivery of commodities, etc. or supply of services after this Decree enters into force; the amended provisions of Article 98 shall begin to apply from the first portion traded after this Decree enters into force; the amended provisions of Article 144(1) shall begin to apply from the first portion determined or revised after this Decree enters into force; and the amended provisions of Article 148(4) and (5) shall begin to apply from the first application for occasional imposition after this Decree enters into force.
Article 3 (Applicability to assessment, etc. of stocks, etc. received due to capital decrease)
The amended provisions of Article 27(3) shall begin to apply to the first portion of receiving deemed dividends due to the retirement of stocks, etc. after this Decree enters into force.
Article 4 (Applicability to scope of wage and salary income)
The amended provisions of Article 38(1)7 and the proviso to Article 98(2)2 shall begin to apply from the first portion of receiving the loan of funds after this Decree enters into force.
Article 5 (Applicability to inclusion of depreciation cost in necessary expenses)
| (1) | The amended provisions of Articles 62 through 73-2 shall begin to apply from the first portion of depreciation after this Decree enters into force. |
| (2) | The amended provisions concerning financial lease in Article 62(3) shall begin to apply from the first portion of receiving a loan after this Decree enters into force. |
Article 6 (Applicability to acquisition value, etc. of assets)
The amended provisions of Article 89 shall begin to apply from the first portion of acquisition after this Decree enters into force.
Article 7 (Applicability to submission of specification of accepting receipts)
The amended provisions of Article 132(3) shall begin to apply from the first portion of accepting the receipts after this Decree enters into force.
Article 8 (Applicability to preparation and delivery of invoices, etc.)
The amended provisions of Article 211 shall begin to apply from the first portion of goods or services provided or received after this Decree enters into force.
Article 9 (Applicability to preparation and delivery of invoices by trustee of agricultural, livestock, fishery, and forestry products)
The amended provisions of Article 212(3) and (4) shall begin to apply from the first portion of goods provided after July 1, 1999.
Article 10 (Applicability to capital gains)
| (1) | The amended provisions for capital gains in this Decree shall apply to the portion first transferred after this Decree enters into force. |
| (2) | Where a stockholder or an investor and the persons who are the relatives or in other special relationship under Article 20 of the Enforcement Decree of the Framework Act on National Taxes add up the stocks or investment shares transferred by them, within three years retrospectively from the date they have transferred the stocks or investment shares, under the amended provisions of Article 157(6), the period prior to the date this Decree enters into force shall not be included. |
Article 11 (Refund of excessively paid taxes to halfway retiree)
| (1) | Residents who intend to obtain a refund of excessively paid taxes under Article 8 of the Addenda to the Income Tax Act (Act No. 5580), shall attach the documents capable of verifying that such amount is the retirement allowance received by the worker retired under Article 31 of the Labor Standards Act, at the time of final return on tax base, as determined by Decree of the Ministry of Finance and Economy. |
| (2) | Where the refundable tax amount occurs by a final return on tax base under paragraph (1), the head of a tax office shall make the refund within 30 days after the expiry of time limit for the final return on tax base. |
Article 12 (Applicability to concept of arm's length price)
The amended provisions of Article 183-2 shall begin to apply from the first portion of transfer after this Decree enters into force.
Article 13 (Transitional measures on scope of wage and salary income)
In applying the amended provisions of Article 38(1)7 and the proviso to Article 98(2)2, if there exists a loan made before the date this Decree enters into force, the previous provisions shall apply to the relevant funds not later than December 31, 2001.
Article 14 (Transitional measures on receiving time of business income)
In applying the amended provisions of Articles 48 and 51(3) and (5), the previous provisions shall apply to the portion of delivery of commodities, etc. or of provision of services before the date this Decree enters into force.
Article 15 (Transitional measures on special repair reserves)
In applying the amended provisions of Article 58, if the special repair reserves are offset with the costs or counted in the gross income amount under paragraph (4) of the Addenda to the Income Tax Act (Act No. 5532), the previous provisions of Article 58 shall apply.
Article 16 (Transitional measures on evaluation of assets and liabilities in foreign currency)
In applying the amended provisions of Article 97, the balance in the foreign exchange adjustment account as at the date this Decree enters into force shall be counted into the gross income amount or the necessary expenses under the previous provisions.
Article 17 (Special cases concerning including depreciation cost in necessary expenses)
| (1) | A business operator retaining a depreciable asset as at the date this Decree enters into force shall report on the method of depreciation to be applied to the said asset under the amended provisions of Article 64, not later than the time limit for a final return on tax base in the relevant taxable period, to the head of the competent tax office having jurisdiction over the place for tax payment. |
| (2) | Where a business operator liable for a report under paragraph (1) fails to do so, the amended provisions of Article 64(4) shall apply to the method of depreciation of the said depreciable asset. |
| (3) | A business operator retaining depreciable assets as at the date this Decree enters into force shall, under the amended provisions of Articles 63 and 63-2, report on the useful life to be applied to the assets falling under the amended provisions of Article 63(1)2, not later than the time limit for a final return on tax base in the relevant taxable period, to the head of the competent tax office having jurisdiction over the place for tax payment; and where intending to obtain approval under the amended provisions of Article 63-2(1), he or she shall apply not later than the date three months elapse prior to the expiry of the relevant taxable period, to the commissioner of the competent regional tax office having jurisdiction over the place for tay payment. In such cases, the assets falling under the amended provisions of Article 63(1)1 shall be governed by the useful life under the same amended provisions. |
| (4) | Where a business operator liable for a report under paragraph (3) fails to do so, the standard useful life under the amended provisions of Article 63(1)2 shall apply to the useful life of such depreciable assets. |
| (5) | In applying the amended provisions of Articles 62 through 73-2, the acquisition price of depreciable assets retained as at the date this Decree enters into force shall be deemed the acquisition price as at the date of commencing the relevant taxable period. |
| (6) | The accumulated depreciation amount by individual property for the depreciable assets retained as at the date this Decree enters into force shall be governed by any of the following: |
| 1. | Assets acquired before December 31, 1994: The depreciation reserve by individual property which has been appropriated as at the date this Decree enters into force; |
| 2. | Assets acquired after January 1, 1995: The accumulated depreciation amount by individual property calculated by applying mutatis mutandis the previous provisions of Article 73, by deeming that the individual property has been transferred as at the date this Decree enters into force; provided, if the specification of depreciation adjustment by individual property is prepared and kept, it may be done by the accumulated depreciation amount of the relevant individual property. |
| (7) | Where the depreciation amount is denied before the date this Decree enters into force, among depreciation costs of depreciable assets retained as at the date this Decree enters into force, the calculation of the amount, for which post-approval has not been granted, shall be governed by one of the following: |
| 1. | In cases of assets acquired before December 31, 1994: The amount calculated by multiplying the denied depreciation amount of each subparagraph of Article 81 (in cases falling under subparagraph 3 of the same Article: by each property) before the Enforcement Decree of the Income Tax Act (Presidential Decree No. 14467) enters into force, by the rate occupied, by the denied depreciation amount of individual property, in the aggregate amount of denied depreciation amount of individual property; |
| 2. | In cases of assets acquired after January 1, 1995: The denied depreciation amount by individual property calculated by applying mutatis mutandis the previous provisions of Article 73 by deeming that the individual asset is transferred as at the date this Decree enters into force; provided, if the specification of depreciation adjustment is prepared and kept by each asset, it may be done by the amount calculated by multiplying the denied depreciation amount by same useful life, by the rate occupied, by the denied depreciation amount of individual asset within the same useful life, in the aggregate of the denied depreciation amount of individual asset within the same useful life. |
| 2. | In cases of assets acquired after January 1, 1995: The denied depreciation amount by individual property calculated by applying mutatis mutandis the previous provisions of Article 73 by deeming that the individual asset is transferred as at the date this Decree enters into force; provided, if the specification of depreciation adjustment is prepared and kept by each asset, it may be done by the amount calculated by multiplying the denied depreciation amount by same useful life, by the rate occupied, by the denied depreciation amount of individual asset within the same useful life, in the aggregate of the denied depreciation amount of individual asset within the same useful life. |
| (8) | With respect to the assets subject to Article 92 before the Enforcement Decree of the Income Tax Act (Presidential Decree No. 14467) enters into force, the previous provisions shall govern not later than the completion of the depreciation of the said asset. |
| (9) | With respect to the counting in the necessary expenses, etc., for the special depreciation costs of the assets subject to Article 11 of the Addenda to the Regulation of Tax Reduction and Exemption Act (Act No. 4806), as at the date this Decree enters into force, the amended provisions of previous Article 68 shall govern. |
Article 18 (Transitional measures following conversion of taxation of value-added tax on manpower services)
With respect to the tax withholding in cases of paying the price after January 1, 1999 while receiving before December 31, 1998 a provision of such manpower services as are excluded from the scope of business incomes to be withheld as provided for in Article 184(1), under Article 12(1)13 of the Value-Added Tax Act (Act No. 5585) and the amended provisions of Article 35 of the Enforcement Decree of the same Act, it shall be governed by the previous examples.
Article 19 (Special cases of application for penalty tax for unfaithful reports in relation to failure to issue invoices)
In applying penalty tax for unfaithful report under Article 81(3) of the Act, with respect to an intermediary wholesaler defined in Article 2 of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, such wholesaler shall be deemed a business operator under Article 208(5) until December 31, 2001, and such wholesaler shall be deemed a business operator under Article 208(5) for the relevant taxable period if the ratio of the amount in the aggregate table of invoices by purchaser for the invoices issued for each taxable period ending in the period from January 1, 2002 to December 31, 2019, as submitted to the head of the competent tax office, to gross sales (hereafter in this Article, referred to as "invoice issuance ratio") is at least any of the following rates, while penalty tax for unfaithful report shall be imposed upon such wholesaler as if the difference between the amount calculated by applying any of the following rates to gross sales for each taxable period and the amount stated in the aggregate table of invoices by purchaser was the value provided, if the invoice issuance ratio for each taxable period ending in the period from January 1, 2002 to December 31, 2019 falls short of any of the following ratios: <Amended by Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013; Presidential Decree No. 27829, Feb. 3, 2017>
| 1. | Intermediary wholesalers of central wholesale markets located in Seoul Special Metropolitan City under the Act on Distribution and Price Stabilization of Agricultural and Fishery Products; |
| Taxable Period | Ratio | | Jan. 1, 2002 ~ Dec. 31, 2002 | 10/100 | | Jan. 1, 2003 ~ Dec. 31, 2003 | 20/100 | | Jan. 1, 2004 ~ Dec. 31, 2004 | 40/100 | | Jan. 1, 2005 ~ Dec. 31, 2005 | 40/100 | | Jan. 1, 2006 ~ Dec. 31, 2006 | 40/100 | | Jan. 1, 2007 ~ Dec. 31, 2007 | 45/100 | | Jan. 1, 2008 ~ Dec. 31, 2008 | 50/100 | | Jan. 1, 2009 ~ Dec. 31, 2009 | 55/100 | | Jan. 1, 2010 ~ Dec. 31, 2010 | 60/100 | | Jan. 1, 2011 ~ Dec. 31, 2011 | 65/100 | | Jan. 1, 2012 ~ Dec. 31, 2012 | 70/100 | | Jan. 1, 2013 ~ Dec. 31, 2013 | 75/100 |
|
| Taxable Period | Ratio | | Jan. 1, 2002 ~ Dec. 31, 2002 | 10/100 | | Jan. 1, 2003 ~ Dec. 31, 2003 | 20/100 | | Jan. 1, 2004 ~ Dec. 31, 2004 | 40/100 | | Jan. 1, 2005 ~ Dec. 31, 2005 | 20/100 | | Jan. 1, 2006 ~ Dec. 31, 2006 | 20/100 | | Jan. 1, 2007 ~ Dec. 31, 2007 | 25/100 | | Jan. 1, 2008 ~ Dec. 31, 2008 | 30/100 | | Jan. 1, 2009 ~ Dec. 31, 2009 | 35/100 | | Jan. 1, 2010 ~ Dec. 31, 2010 | 40/100 | | Jan. 1, 2011 ~ Dec. 31, 2011 | 45/100 | | Jan. 1, 2012 ~ Dec. 31, 2012 | 50/100 | | Jan. 1, 2013 ~ Dec. 31, 2013 | 55/100 |
|
ADDENDA <Presidential Decree No. 16112, Feb. 8, 1999>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 1999.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 16556, Sep. 18, 1999>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (General applicability) This Decree shall apply from the taxable period whereto belongs the date this Decree enters into force. |
| (3) | (Applicability concerning capital gains) The amended provisions pertaining to capital gains in this Decree shall apply to the portion of the first transfer after this Decree enters into force. |
| (4) | (Transitional measure on simplified tax rate table) Excessively collected amount, which is calculated by deducting the aggregate tax amount computed by applying the amended provisions of Appendix 2, from the aggregate tax amount withheld under the previous Appendix 2 for the relevant taxable period before the date this Decree enters into force, shall be adjusted from the income tax to be withheld and paid by a withholding agent after this Decree enters into force. In such cases, in applying the amended provisions of Appendix 2, the monthly wage amount may be governed by the amount derived from dividing the aggregate wage amount for the relevant taxable period before the date this Decree enters into force, by the number of continuous service months (the number of days less than a month shall be deemed one month). |
ADDENDA <Presidential Decree No. 16664, Dec. 31, 1999>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2000; provided, the amended provisions of item c of Article 25(2) and subparagraph 4 of Article 109 shall enter into force on July 1, 2000, and the amended provisions of Articles 25(1)1, 53(1), 187 and 214, and the provisions of Article 8 of the Addenda shall enter into force on January 1, 2001.
Article 2 (General applicability)
This Decree shall apply from the portion of incomes first accrued after this Decree enters into force; provided, the amended provisions of Articles 187 and 214 shall apply from the portion of incomes first accrued and paid after January 1, 2001.
Article 3 (Applicability concerning insurance of savings nature)
The amended provisions of Article 25(1)1 shall apply from the portion of a first conclusion of an insurance contract after January 1, 2001.
Article 4 (Applicability concerning foreign tax credit)
The amended provisions of Article 117(2) shall apply from the portion first returned after this Decree enters into force.
Article 5 (Applicability concerning domestic source income of nonresident)
The amended provisions of Article 179(9) shall apply from the portion first transferred after this Decree enters into force.
Article 6 (Applicability concerning insurance of savings nature)
In applying the amended provisions of Article 25(1)1, with respect to the portion of insurance contracts concluded before December 31, 2000, the previous provisions shall apply not later than the expiration date of contract terms of relevant insurances.
Article 7 (Applicability concerning capital gains)
| (1) | The amended provisions for capital gains in this Decree shall apply to the portion first transferred after this Decree enters into force. |
| (2) | In cases where the aggregate of the stocks or investment shares transferred from January 1 to December 31, 1999 by a stockholder or an investor and the persons who are the relatives or in other special relationship under Article 20 of the Enforcement Decree of the Framework Act on National Taxes, and of the stocks or investment shares transferred by them within three years from the relevant date of transfer, falls under the provisions of the previous Article 157(4) through (6), the previous provisions shall apply to a levy of the capital gains tax on the stocks or investment shares transferred from January 1 to December 31, 1999. |
| (3) | The amended provisions of Article 162(1)3 shall apply from the portion of the earliest date from among the date of first registration for passage of title (including a registration and an entry of a change of holders) after this Decree enters into force, the receipt date, the delivery date, or the date of usufruct; provided the previous provisions shall apply to the portion for which the time of transfer or acquisition has arrived under the previous provisions as at the time this Decree enters into force. |
| (4) | The amended provisions of Articles 163(6)2b and 164(5) shall apply from the portion of first transfer after January 1, 2001; provided the previous provisions shall apply to the computation of the necessary expenses for the portion transferred from January 1 to December 31, 2000 among the assets falling under the amended provisions of Article 163(6)2b. |
Article 8 Omitted.
Article 9 (Applicability following amendment of other Acts and subordinate statutes)
The provisions of Article 8 of the Addenda shall apply from the portion of incomes first accrued and paid after January 1, 2001.
ADDENDA <Presidential Decree No. 16682, Dec. 31, 1999>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2000.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 16762, Mar. 28, 2000>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 16809, May 16, 2000>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability) The amended provisions of Articles 22-2 and 102(5) shall apply from the portion of interest incomes of the State bonds first issued at the open market after this Decree enters into force. |
ADDENDA <Presidential Decree No. 16988, Oct. 23, 2000>
Article 1 (Enforcement date)
This Decree shall enter into force on the first day of the following month of that whereto belongs the date of its promulgation.
Article 2 (Applicability)
The amended provisions of Article 23(3) shall apply from the portion first accrued and paid after this Decree enters into force.
Article 3 (Applicability concerning scope of long-term housing mortgage loan subject to income deduction)
In applying the amended provisions of Article 112(6), the amended provisions of subparagraph 2 of the same paragraph shall not apply to the housing mortgage loan which has been borrowed before this Decree enters into force.
Article 4 (Transitional measures on installment savings subscribed)
| (1) | The amount paid in the relevant installment savings subscribed (limited to 2.4 million won by taxable period) until December 31, 2005 (where the contract period for relevant installment savings subscribed expires prior to December 31, 2005, until the expiry of relevant contract period) by a person who has subscribed for the installment savings under the Regulations on Housing Supply (hereinafter referred to as "installment savings subscribed") before this Decree enters into force, shall be deemed the amount paid in the savings under Article 52(2)1 of the Act; provided, where the amount paid after January 1, 2000 as at the time this Decree enters into force exceeds 2.4 million won, such amount shall be the limit (where the relevant amount exceeds 4.5 million won, such excess amount shall be deemed non-existent). |
| (2) | Where a person who has subscribed for the installment savings before this Decree enters into force, terminates his or her installment savings and subscribes again after this Decree enters into force, the provisions of paragraph (1) shall not apply. |
Article 5 (Transitional measures on income deduction applied to redemption of principal and interest of house lease fund)
| (1) | Where a person who has subscribed for the installment savings before this Decree enters into force redeems not later than December 31, 2005 the principal and interest of a loan borrowed from the relevant savings institution in order to lease a house of national housing scale after this Decree enters into force, the redemption amount of such principal and interest shall be deemed the redemption amount under Article 52(2)2 of the Act. |
| (2) | Where a person who has subscribed for the installment savings before this Decree enters into force, terminates his or her installment savings and subscribes again after this Decree enters into force, the provisions of paragraph (1) shall not apply. |
ADDENDA <Presidential Decree No. 17032, Dec. 29, 2000>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2001; provided, the amended provisions of Articles 16, 42-2(1)5, 63-3, 79-2(3), 110-3(1), 112(10), 137(1) (proviso to other portions than each subparagraph), 137(1)3 and 183-4 shall enter into force on its promulgation date; the amended provisions of Article 102, 102-2 and 183-3 shall enter into force on July 1, 2001; the amended provisions of Article 25(2)2, 105(2), 129(1)2, 143, 145, 201-3(1), 205(3) shall enter into force on January 1, 2002; and the amended provisions of Article 216-2 shall enter into force on July 1, 2002, and the amended provisions of Article 40-3(1) shall enter into force on January 1, 2005. <Amended on Dec. 31, 2001>
Article 2 (General applicability)
This Decree shall apply from the portion of incomes first accruing after this Decree enters into force.
Article 3 (Applicability concerning capital gains tax)
The amended provisions pertaining to capital gains in this Decree shall apply from the portion first transferred after this Decree enters into force.
Article 4 (Applicability concerning scope of non-taxable wages of workers overseas)
The amended provisions of Articles 16 and 42-2(1)5 shall apply from the portion paid in the taxable period whereto belongs the date this Decree enters into force.
Article 5 (Applicability concerning calculation of profit of securities investment trust)
The amended provisions of Article 23(3) shall apply from the portion first accrued and paid after this Decree enters into force.
Article 6 (Applicability concerning insurance of savings nature)
The amended provisions of Article 25(2)2 shall apply from the portion of first concluding a mutual aid contract after this Decree enters into force.
Article 7 (Applicability concerning evaluation of stocks, etc. received in capital decrease, etc.)
The amended provisions of Article 27(1), (6) and (7) shall apply from the portion of receiving a deemed dividend in capital decrease, etc. after this Decree enters into force.
Article 8 (Applicability concerning inclusion of depreciation costs in necessary expenses)
| (1) | The amended provisions of Article 62(1) and (7) shall apply from the portion first depreciated after this Decree enters into force. |
| (1) | The amended provisions of Article 79-2(3) shall apply from the portion of the taxable period whereto belongs the date this Decree enters into force. |
Article 9 (Applicability concerning income deduction for contribution)
| (1) | The amended provisions of Article 79-2(3) shall apply from the portion of the taxable period whereto belongs the date this Decree enters into force. |
| (2) | The amended provisions of subparagraph 4 of Article 80 shall apply from the portion first paid after this Decree enters into force. |
Article 10 (Applicability concerning scope of bonds, etc.)
The amended provisions of Article 102 shall apply from the portion of first receiving the interest of the bonds, etc. or first sold after this Decree enters into force; provided, where the bonds, etc. issued before this Decree enters into force have their interest calculation period extended over the period before and after this Decree enters into force, the previous provisions of Article 102 shall apply not later than the first payment date of interest, etc. of the relevant bonds, etc. after this Decree enters into force.
Article 11 (Applicability concerning request for refund following sale of bonds, etc. by residents, etc.)
The amended provisions of Article 102-2 shall apply from the portion of newly commencing the computing period for interests, etc. of the bonds, etc. after this Decree enters into force.
Article 12 (Applicability concerning premium deduction of insurance for exclusive security of persons with disabilities)
The amended provisions of Article 109-2 shall apply from the portion of first concluding an insurance contract after this Decree enters into force.
Article 13 (Applicability concerning medical expense deduction)
The amended provisions of Article 110(1)3 shall apply from the portion first paid after this Decree enters into force.
Article 14 (Applicability concerning education expense deduction)
The amended provisions of Article 110-3(1) shall apply from the portion of taxable period whereto belongs the date this Decree enters into force.
Article 15 (Applicability concerning exception to final return on tax base)
The amended provisions of Article 137(1) (proviso to other portions than each subparagraph) and (3) shall apply from the portion of the taxable period whereto belongs the date this Decree enters into force.
Article 16 (Applicability concerning calculation of income amount at time of determination and revision by estimation)
The amended provisions Article 143 and 145 shall apply from the portion of determining or revising the income first accruing after this Decree enters into force.
Article 17 (Applicability concerning nonresidents' domestic source income)
| (1) | The amended provisions of Articles 179(8), (10) and (13), 183(1), and 183-3 shall apply from the portion first transferred after this Decree enters into force. |
| (2) | The amended provisions of Article 179(1) and (12) shall apply from the portion of incomes first accrued after this Decree enters into force. |
Article 18 (Applicability concerning exception to return on nonresidents' capital gains of securities)
The amended provisions of Article 183-4 shall apply from the portion of first satisfying the taxation criteria as stipulated in the tax treaty after the promulgation date of this Decree.
Article 19 (Applicability concerning ccope of long-term bonds, etc.)
The amended provisions of Article 187(1) shall apply from the portion of incomes accrued and paid by the trust first established after this Decree enters into force.
Article 20 (Applicability concerning submission of statements of payment on nonresidents' income)
The amended provisions of Article 216-2 shall apply from the portion first paid on or after July 1, 2002. <Amended on Dec. 31, 2001>
Article 21 (Exception to persons subject to simplified expense rate)
In applying the amended provisions of each item of Article 143(4)2, in cases of each taxable period which ends within the period from the date this Decree enters into force to December 31, 2005, the relevant income amount shall be as follows, notwithstanding the amended provisions of each item of the same subparagraph.
| Classification | Income Amount | | Each taxable period ending from Jan. 1, 2002 to Dec. 31, 2003 | Each taxable period ending from Jan. 1, 2004 to Dec. 31, 2005 | | a. Farming, hunting and forestry (including forest income), fishery, mining, wholesale and retail, real property trading, and other business not falling under items b and c | 150 million won | 90 million won | | b. Manufacturing, lodging, restaurant, electric power, gas, tap water, construction, consumer goods repair, transportation, warehousing, communications, financing, and insurance business | 90 million won | 60 million won | | c. Real property rental, business support, education, health and social welfare, social and individual service, and household service business | 60 million won | 48 million won |
|
Article 22 (Transitional measures on group retirement insurance contract)
With respect to the group retirement insurance contracts under the previous provisions of Article 25(2) as at the time this Decree enters into force, the previous provisions shall govern.
ADDENDA <Presidential Decree No. 17115, Jan. 29, 2001>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 17158, Mar. 27, 2001>
Article 1 (Enforcement date)
This Decree shall enter into force on March 27, 2001.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 17296, Jul. 7, 2001>
Article 1 (Enforcement date)
This Decree shall enter into force on July 8, 2001.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 17339, Aug. 14, 2001>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability concerning Application for Refund of Tax Amount on Interests, etc. of Foreign Currency Bonds, etc.) The amended provisions of Article 102-2(1) shall apply from the portion of first application for re- fund after this Decree enters into force. |
| (3) | (Applicability concerning Electronic Over-the-Counter Transaction of Nonresident) The amended provisions of Article 179(10)1 (proviso) shall apply from the portion of first transfer after this Decree enters into force. |
ADDENDA <Presidential Decree No. 17456, Dec. 31, 2001>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2002; provided, the amended provisions of Articles 53, 112(7), 196(4), 214(1)2 of this Decree and Article 19 of the Addenda of the amended Enforcement Decree of the Income Tax Act (Presidential Decree No. 15969), shall enter into force on the date of its promulgation, and the amended provisions of Articles 163(11), 207-2, 214(1)4, 216-2 and 224 on July 1, 2002.
Article 2 (General applicability)
This Decree shall apply from the portion of incomes first accruing after this Decree enters into force.
Article 3 (General applicability concerning capital gains tax)
The amended provisions concerning capital gains tax in this Decree shall apply from the portion of first transfer after this Decree enters into force.
Article 4 (Applicability concerning Approval for tax payment place)
The amended provisions of Article 5(3) shall apply from the portion of first tax withholding of income tax after this Decree enters into force.
Article 5 (Applicability concerning deduction of premiums)
The amended provisions of Articles 38(1), 55(1)12, subparagraph 5 of Article 109, and Article 110(1) shall apply from the portion of first payment of premiums, etc. after this Decree enters into force.
Article 6 (Applicability concerning special case of calculation of gross revenue amount)
The amended provisions of Article 53(1) and (2) shall apply from the portion of revenues accruing in the taxable period whereto belongs the date of promulgation of this Decree.
Article 7 (Applicability concerning scope of designated donations)
The amended provisions of subparagraph 5 of Article 80 shall apply from the portion of first payment after this Decree enters into force.
Article 8 (Applicability concerning deduction of housing funds)
The amended provisions of Article 112(7) shall apply from the cases of transfer of long-term housing mortgage loan in the taxable period whereto belongs the date of promulgation of this Decree.
Article 9 (Applicability concerning period of transfer and acquisition)
In applying the amended provisions of Article 162(1)1, the time of acquisition shall apply from the portion of first acquisition after this Decree enters into force, and the time of transfer from the portion of the first transfer after this Decree enters into force, respectively.
Article 10 (Applicability concerning year-end tax settlement of wage and salary income)
The amended provisions of Article 196(4) shall apply from the portion of taxable period whereto belongs the date of promulgation of this Decree.
Article 11 (Applicability concerning application for non-taxation on domestic source income of nonresident)
The amended provisions of Article 207-2 shall apply from the portion of first non-taxation or exemption after July 1, 2002.
Article 12 (Applicability concerning preparation and delivery of invoices)
The amended provisions of Articles 211 and 212-2 shall apply from the portion of first provision or import declaration after this Decree enters into force.
Article 13 (Applicability concerning exemption of submission of statements of payment)
The amended provisions of Article 214(1)2 shall apply from the portion of incomes accruing in the taxable period whereto belongs the date of promulgation of this Decree, and the amended provisions of subparagraph 4 of the same paragraph shall apply from the portion of first payment of incomes after July 1, 2002.
Article 14 (Applicability concerning penalty tax for unfaithful report on failure to issue invoices)
The amended provisions of Article 19 of the Addenda of the amended Enforcement Decree of the Income Tax Act (Presidential Decree No. 15969) shall apply from the portion of the taxable period whereto belongs the date of promulgation of this Decree.
Article 15 (Transitional measures for evaluation of carryover property)
With respect to the inclusion of business start-up expenses, research and development expenses and value of donated property for use benefits in the necessary expenses, the provisions of previous Article 96 shall govern, notwithstanding the amended provisions of Article 62(2).
ADDENDA <Presidential Decree No. 17555, Mar. 30, 2002>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability) This Decree shall apply from the portion of first transfer after this Decree enters into force. |
| (3) | (Transitional Measures following Shortening of Overlapping Owning Period) Where a household owning one house in the Republic of Korea under previous Article 155(1) as at the time this Decree enters into force acquires another house before transferring such house, if the period for allowing owning two houses for one household under previous Article 155(1) has not been expired, in cases where the previous house is transferred not later than the date falling under any of the following subparagraphs, it shall be deemed one house for one household, and the provisions of Article 154(1) shall apply: |
| 1. | Where the period from the date of acquiring another house to the date this Decree enters into force is not in excess of one year, the date on which one year elapses from the date this Decree enters into force; provided, where the previous house satisfies the possessing period under Article 154(1) (where falling under the provisions of subparagraph 1 of the same paragraph, referring to the dwelling period under the same subparagraph; hereafter referred to as "possessing period, etc." in this subparagraph), it shall be the date whichever comes faster between the date on which six months are added to the date satisfying the possessing period, etc., or the date on which two years elapse from the acquisition date of acquiring another house; |
| 2. | Where the period from the date of acquiring another house to the date this Decree enters into force exceeds one year, the date on which two years elapse from the date of acquiring another house. |
ADDENDA <Presidential Decree No. 17751, Oct. 1, 2002>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 3 (Transitional measures for one house for one household)
| (1) | In cases where the relevant house is transferred not later than the day on which one year elapsed after this Decree enters into force or where applied by the provisions or paragraph (3) of the Addenda of the amended Enforcement Decree of the Income Tax Act (Presidential Decree No. 17555), the previous provisions shall apply, notwithstanding the amended provisions of Article 154(1). |
| (2) | In cases where one household possesses two houses under the pro- visions of Article 155(4) and (5) as at the time this Decree enters into force, any house transferred ahead (limited to cases where the possessing period of relevant house is three or more years) on the day of joining together for the support by living together, or within two years from the wedding day, shall be deemed one house for one household, and the previous provisions shall apply, notwithstanding the amended provisions of Article 154(1). |
Article 4 (Transitional measures for scope of luxurious house)
| (1) | In cases where a contract for house trade has been concluded before this Decree enters into force and the house is transferred not later than the day on which two months elapsed from the date this Decree enters into force, the previous provisions shall apply, notwithstanding the amended provisions of subparagraph 2 of Article 156. |
| (2) | In cases where one household possessing three or more houses before this Decree enters into force has concluded a contract for trade and transfers them not later than the day on which two months elapsed from the date this Decree enters into force, the previous provisions shall apply, notwithstanding the amended provisions of Article 162-2. |
ADDENDA <Presidential Decree No. 17825, Dec. 30, 2002>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2003; provided, the amended provisions of Articles 38(1), 62(2)2, 63, 64 (excluding paragraph (1)5), 143(3)1, 146-2 and 208-2(4) shall enter into force on the date of its promulgation.
Article 2 (Valid period)
The amended provisions of Article 143(3)1 (proviso) shall take effect from the taxable period whereto belongs the date of promulgation of this Decree to December 31, 2004.
Article 3 (General applicability)
This Decree shall apply from the portion of incomes first accruing after this Decree enters into force.
Article 4 (General applicability concerning capital gains tax)
The amended provisions concerning capital gains tax in this Decree shall apply from the portion of first transfer after this Decree enters into force.
Article 5 (Applicability concerning scope of wage and salary income)
The amended provisions of Article 38(1) shall apply from the portion of income accruing during the taxable period whereto belongs the date of promulgation of this Decree.
Article 6 (Applicability concerning receipt date of business income)
The amended provisions of subparagraph 8 of Article 48 shall apply from the portion of first report or decision after this Decree enters into force.
Article 7 (Applicability concerning depreciation of development costs)
The amended provisions of Articles 62(2)2f and 64(1)6, (4)4 and 5 shall apply from the development costs incurred during the taxable period whereto belongs the date of promulgation of this Decree.
Article 8 (Applicability concerning depreciation of right to utilize frequency)
The amended provisions of Articles 62(2)2h, 63(1)2 and 64(1)8 shall apply from the portion of depreciation incurred during the tax- able period whereto belongs the date of promulgation of this Decree.
Article 9 (Applicability concerning deduction of medical expenses)
The amended provisions of Article 110(2) shall apply from the portion of first payment after this Decree enters into force.
Article 10 (Applicability concerning deduction for housing funds)
The amended provisions of Article 112(7)2 shall apply from the portion of first transfer of long-term housing mortgage loan after this Decree enters into force.
Article 11 (Applicability concerning tax credit for loss by disasters)
The amended provisions of Article 118(3) shall apply from the portion of first application after this Decree enters into force.
Article 12 (Applicability concerning income amount by standard expense rate)
The amended provisions of Article 143(3)1 (proviso) shall apply from the portion of incomes accruing from the taxable period whereto belongs the date of promulgation of this Decree to December 31, 2004.
Article 13 (Applicability concerning penalty tax for unfaithful payment)
The amended provisions of Article 146-2 shall apply from the portion of incomes accruing during the taxable period whereto belongs the date of promulgation of this Decree.
Article 14 (Applicability concerning fictitious payment date of income obtained by disposal of incomes)
The amended provisions of Article 192(1) shall apply from the portion of making the income disposal due to first determination or revision after this Decree enters into force.
Article 15 (Applicability concerning tax withholding on nonresident)
| (1) | The amended provisions of Article 207 and 216-2(2) shall apply from the portion of first payment of incomes after this Decree enters into force. |
| (2) | The amended provisions of Article 207-2(1), (2) and (6) shall apply from the portion of filing the written application for non-taxation or exemption after this Decree enters into force. |
Article 16 (Applicability concerning reception and preservation of evidential data on expenditures)
The amended provisions of Article 208-2(4) shall apply from the portion of taxable period whereto belongs the date of promulgation of this Decree.
Article 17 (Applicability concerning importation invoices)
The amended provisions of Article 212-2(2) shall apply from the portion of first import after this Decree enters into force.
Article 18 (Applicability concerning submission of computer data on statements of payment)
The amended provisions of Article 214(3) shall apply from the portion of first submission of statements of payment after this Decree enters into force.
Article 19 (Transitional measures for inherited houses)
With regard to a house inherited before this Decree enters into force, in cases where the relevant house is transferred not later than the day on which two years have elapsed after this Decree enters into force, the previous provisions shall govern notwithstanding the amended provisions of Article 155(2).
Article 20 (Transitional measures for scope of high-priced houses)
In cases where a trade contract has been concluded before this Decree enters into force, and the relevant house is transferred not later than the day on which two years have elapsed after date Decree enters into force, which is a high-priced house falling under each subparagraph of Article 159-2, the previous provisions shall govern notwithstanding the amended provisions of Article 156.
ADDENDA <Presidential Decree No. 18044, Jun. 30, 2003>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2003.
Articles 2 through 13 Omitted.
ADDENDA <Presidential Decree No. 18048, Jul. 10, 2003>
| (1) | (Enforcement Date) This Decree shall enter into force on the date of its promulgation; provided the amended provisions of Article 17(1)3 shall take effect on July 1, 2003. |
| (2) | (Applicability concerning Scope of Night Work Allowances, etc. Paid to Workers of Production Duties) The amended provisions of Article 17(1)3 shall apply from the portion of incomes accruing after July 1, 2003. |
| (3) | (Applicability concerning Petty Stockholders) The amended provisions of Article 40(1) shall apply from the portion of incomes accrued and paid in the taxable year whereto belongs the date this Decree enters into force. |
| (4) | (Transitional Measures for Petty Stockholders) Notwithstanding amended provisions of Article 40(1), the previous provisions shall govern the incomes received by a person in the capacity of a petty stockholder, who corresponds to the petty stockholder pursuant to the previous provisions before this Decree enters into force, or those received not later than the taxable year whereto belongs the date this Decree enters into force. |
ADDENDA <Presidential Decree No. 18073, Jul. 30, 2003>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability) The amended provisions of Appendix 2 shall apply beginning with the first income incurred after this Decree enters into force. |
ADDENDA <Presidential Decree No. 18127, Nov. 20, 2003>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2004.
Article 2 (General applicability)
This Decree shall apply starting with the portion of transfers after this Decree enters into force.
Article 3 (Transitional measures for temporary two houses for one household)
| (1) | Where one household temporarily owns two houses under the provisions of Article 155(1) as at the time this Decree enters into force, and where it transfers the previous house within one year from the date of acquiring another house under the same paragraph of the same Article, the previous provisions shall govern, notwithstanding the amended provisions of Article 154(1). |
| (2) | Where one household owns two houses under the provisions of Article 155(4) and (5) as at the time this Decree enters into force, the house first transferred within two years from the date of joining for a support of parents by living together or from the date of wedding, the previous provisions shall govern by considering the said house as one house for one household, notwithstanding the amended provisions of Article 154(1). |
ADDENDA <Presidential Decree No. 18146, Nov. 29, 2003>
Article 1 (Enforcement date)
This Decree shall enter into force on November 30, 2003. (Proviso Omitted.)
Articles 2 through 15 Omitted
ADDENDA <Presidential Decree No. 18173, Dec. 30, 2003>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2004; provided, the amended provisions of Articles 38(1)8a (excluding the matters concerning research institutes attached to small and medium enterprises or venture enterprises), 81(5) and (6) and 110(1)3 shall enter into force on the date of its promulgation; the amended provisions of Article 23, subparagraph 6 of Article 45, subparagraph 7 of Article 46, and 102(1)3 shall enter into force on January 5, 2004; and the amended provisions of Articles 112-2(2) and 164(9) shall enter into force on January 1, 2005.
Article 2 (General applicability)
This Decree shall apply from the portion of incomes accruing after this Decree enters into force.
Article 3 (General applicability concerning capital gains tax)
The amended provisions concerning capital gains tax in this Decree shall apply from the portion of transfer after this Decree enters into force.
Article 4 (Applicability concerning special case of interest income of deposit insurance fund bonds)
The amended provisions of subparagraph 3 of Article 22-2 shall apply from the portion of issuance after this Decree enters into force.
Article 5 (Applicability concerning scope of investment trust)
The amended provisions of Article 23 shall apply from the portion of establishment of investment trusts after this Decree enters into force; provided, the previous provisions may continuously apply to the investment trust established before January 5, 2004, notwithstanding the amended provisions of Article 23.
Article 6 (Applicability concerning marginal profits of insurance of savings-nature insurance)
The amended provisions of Article 25(1)1 shall apply from the portion of concluding the insurance contract and deduction contract after this Decree enters into force.
Article 7 (Applicability concerning research subsidy and research activities expenses excluded from wage and salary income)
| (1) | The amended provisions of Article 38(1)8a (excluding the matters concerning research institutes attached to small and medium enterprises or venture enterprises) shall apply from the portion of taxable year whereto belongs the date this Decree enters into force, and the matters concerning research institutes attached to small and medium enterprises or venture enterprises shall apply from the portion of incomes accruing after this Decree enters into force. |
| (2) | The amended provisions of Article 38(3) shall apply from the portion of submission after this Decree enters into force. |
Article 8 (Applicability concerning revenue period of interest income, dividend income and business income)
The amended provisions of Articles 45, 46 and 48 shall apply from the portion of arrival of revenue period of interest income, dividend income and business income after this Decree enters into force.
Article 9 (Applicability concerning necessary expenses for real estate rental income)
The amended provisions of Article 55(1)11-2 shall apply from the portion of premiums of national health insurance whose payment liability incurs after this Decree enters into force.
Article 10 (Applicability concerning scope of deductions of donations)
The amended provisions of subparagraph 5 of Article 80, and Article 81(4) shall apply from the portion of making donations after this Decree enters into force.
Article 11 (Applicability concerning income deduction from voluntary services)
The amended provisions of Article 81(5) and (6) shall apply from the portion of providing the voluntary services in the taxable year whereto belongs the date this Decree enters into force.
Article 12 (Applicability concerning repayment accompanying additional issuance of state bonds)
The amended provisions of Article 102-2(3) shall apply from the portion of issuing bonds after this Decree enters into force.
Article 13 (Applicability concerning medical expense deduction)
| (1) | The amended provisions of Article 110(1)3 shall apply from the portion of payments in the taxable year whereto belongs the date this Decree enters into force. |
| (2) | The amended provisions of Article 110(3) shall apply from the portion of paying medical expenses after this Decree enters into force. |
Article 14 (Applicability concerning deduction of educational expenses for credit-recognition study course)
The amended provisions of Article 110-3(1) shall apply from the portion of paying educational expenses after this Decree enters into force.
Article 15 (Applicability concerning special deduction of long-term housing mortgage loan)
The amended provisions of Article 112(6)1 and (7) shall apply from the portion of borrowing the long-term housing mortgage loan after this Decree enters into force; provided, in cases of borrowing from the National Housing Fund under the Housing Act from among the matters for grace period out of the amended provisions of Article 112(6)1, it shall apply from the portion of borrowing after April 1, 2004.
Article 16 (Applicability concerning submission of data on income deduction of donations)
The amended provisions of Article 112-2(2) shall apply from the portion of making donations after this Decree enters into force.
Article 17 (Applicability concerning payment of estimated tax on gains from sale of land, etc. by real estate brokers)
The amended provisions of Article 127(2) shall apply from the payment of estimated tax on the gains from the sale of land, etc. after this Decree enters into force.
Article 18 (Applicability concerning calculation of capital gains by wrongful acts)
The amended provisions of Article 167(6) shall apply from the portion of arrival of a deadline for tax base return of capital gains tax after this Decree enters into force.
Article 19 (Applicability concerning scope of domestic source income of nonresident)
The amended provisions of Article 179(1) and (9) shall apply from the portion of leasing or transferring after this Decree enters into force.
Article 20 (Applicability concerning submission of statements of payment through computer media)
The amended provisions of Article 214(3) shall apply from the portion of paying the income after this Decree enters into force.
Article 21 (Special applicability concerning research subsidy or research activities expenses to be excluded from wage and salary income)
| (1) | The amended provisions of Article 38(1)8a shall apply to the taxable years until year 2006, but the ratio falling under the respective taxable period on the following table shall apply to the ratio to calculate the limit of the research subsidy or research activities expenses to be excluded from wage and salary income during the period from January 1, 2004 to December 31, 2006:Taxable PeriodRatio (%)Jan. 1, 2004 - Dec. 31, 200415Jan. 1, 2005 - Dec. 31, 200510Jan. 1, 2006 - Dec. 31, 2006 5 |
| Taxable Period | Ratio (%) | | Jan. 1, 2004 - Dec. 31, 2004 | 15 | | Jan. 1, 2005 - Dec. 31, 2005 | 10 | | Jan. 1, 2006 - Dec. 31, 2006 | 5 |
|
| (2) | Notwithstanding the amended provisions of Article 38(3), the evidential documents for the research subsidy or research activities expenses paid in the fiscal year of 2003 shall be submitted by not later than the end of May, 2004. |
Article 22 (Transitional measures for revenue period of interest income, dividend income and business income)
Notwithstanding the amended provisions of Articles 45, 46 and 48, the previous provisions shall govern, notwithstanding the amended provisions, the incomes whose revenue period arrives after this Decree enters into force, which are those for which a part of them has already faced with the arrival of revenue period under the previous provisions before this Decree enters into force.
Article 23 (Transitional measures for application of deductible expenses recognition for voluntary services donations)
Notwithstanding the amended provisions of Article 81(6), a verification of voluntary services donated in the fiscal year 2003 shall be made in accordance with the written verification of donations set by the Minister of Government Administration and Home Affairs.
Article 24 (Transitional measures for special case of non-taxable retaining period for one house for one household)
In cases where a house falling under the previous provisions of Article 155(17) as at the time this Decree enters into force is transferred not later than December 31, 2004, the previous provisions shall govern notwithstanding the amended provisions of Article 155(17).
Article 25 (Transitional measures for application of withholding on long-term bonds)
The previous provisions shall govern the long-term bonds or long-term deposits under the previous provisions of Article 187 as at the time this Decree enters into force, notwithstanding the amended provisions of Article 187.
ADDENDA <Presidential Decree No. 18297, Feb. 28, 2004>
Article 1 (Enforcement date)
This Decree shall enter into force on March 1, 2004.
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 18312, Mar. 17, 2004>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 18401, May 25, 2004>
Article 1 (Enforcement date)
This Decree shall enter into force on May 30, 2004.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 18529, Aug. 30, 2004>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability) This Decree shall apply from the portion of transfer after this Decree enters into force. |
ADDENDA <Presidential Decree No. 18705, Feb. 19, 2005>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 27-2 shall enter into force on January 1, 2006, and the amended provisions of Articles 102, 102-2, 102-3 and 147 shall enter into force on July 1, 2005.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (Applicability concerning scope of investment trust)
The amended provisions of Article 23 shall apply starting from the portion of investment trust to be established after this Decree enters into force.
Article 4 (Applicability concerning insurance margin of saving nature insurance)
The amended provisions of Article 25 shall apply starting from the portion of joining in the taxable period in which the date this Decree enters into force falls.
Article 5 (Applicability concerning corporations subject to exemption from corporate tax)
The amended provisions of Article 27-2 shall apply starting from the portion of incomes paid on or after January 1, 2006.
Article 6 (Applicability concerning scope of credits, etc.)
The amended provisions of Articles 102 and 102-2 shall apply starting from the portion of incomes to be withheld on or after July 1, 2005; provided, the previous provisions shall govern, notwithstanding the amended provisions of Articles 102 and 102-2, where the bonds etc. issued before July 1, 2005, and whose interests, etc. have been received on or after July 1, 2005 or which have been transferred to the corporations.
Article 7 (Applicability concerning withholding on and refund methods for transactions, etc. of trade of bonds cum repurchase conditions)
The amended provisions of Article 102-3 shall apply starting from the portion of sale under the trade transactions of the bonds cum repurchase conditions on or after July 1, 2005.
Article 8 (Applicability concerning submission of documents of final report on tax base of global income)
The amended provisions of Article 130 shall apply starting from the portion of reporting after this Decree enters into force.
Article 9 (Applicability concerning voluntary payment of additional reports)
The amended provisions of Article 134 shall apply starting from the portion of voluntary payment of additional reports in the taxable period in which the date this Decree enters into force falls.
Article 10 (Calculation of penalty tax for unfaithful reports)
The amended provisions of Article 147 shall apply starting from the portion of incomes to be paid on or after July 1, 2005.
Article 11 (Applicability concerning special cases of one house per one household)
The amended provisions of Article 155-2 shall apply starting from the portion of transfer in the taxable period in which the date this Decree enters into force falls.
Article 12 (Applicability concerning standard of designated area)
The amended provisions of Article 162-3(3) shall apply starting from the portion of transfer in the taxable period in which the date this Decree enters into force falls.
Article 13 (Applicability concerning amount equivalent to compensation money of loan transactions of securities)
The amended provisions of Article 179(16) shall apply starting from the portion of amount equivalent to compensation money to be paid after this Decree enters into force.
Article 14 (Applicability concerning obligation for preparation and retainment of details of issuance of donation money receipts)
The amended provisions of Article 208-3 shall apply starting from the portion of donation in the taxable period in which the date this Decree enters into force falls.
Article 15 (Applicability concerning obligation for preparation and retainment of details of issuance of certificates by financial institutions)
The amended provisions of Article 208-4 shall apply starting from the portion issued for income deduction of incomes generated after the taxable period in which the date this Decree enters into force falls.
Article 16 (Transitional measures concerning scope of investment trust)
The amended provisions of Article 23 shall apply starting from the incomes generated after the date of closing accounts to arrive first after this Decree enters into force to the investment trust which has been established before the date this Decree enters into force; provided, with regard to the investment trust failing to make additional trusts, which is the investment trust (excluding cases of extending the period of trust contract) having been established before the date this Decree enters into force and having provided the period of trust contract in the trust article under Article 28 of the Indirect Investment Asset Management Business Act, the previous provisions may be applicable, notwithstanding the amended provisions of Article 23.
Article 17 (Transitional measures concerning simplified tax withholding table)
With regard to the amount of excess collection calculated by deducting the total amount of tax amount having been calculated by applying the amended provisions of Appendices 2 and 3 from the total amount of tax amount having been withheld under the previous Tables 2 and 3 for the relevant taxable period before the date this Decree enters into force, a withholding agent may adjust it from income tax to be paid by making the withholding after this Decree enters into force.
ADDENDA <Presidential Decree No. 18850, May 31, 2005>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (General applicability) This Decree shall apply from the portion of transfer after this Decree enters into force. |
| (3) | (Applicability concerning Scope of Long-term Rental Houses) The amended provisions of Article 167-3(1)2c shall apply to houses for which approval or inspection of use has been obtained or undergone after this Decree enters into force. |
| (4) | (Transitional measures concerning application of special cases of one house for one household to members of association of housing reconstruction) For the cooperative members of a housing reconstruction cooperative which has been granted project execution permission under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents before this Decree enters into force, the previous provisions shall govern the application of special cases of one house for one household and the computation of transfer marginal profits, notwithstanding the amended provisions of Articles 155 and 166. |
ADDENDA <Presidential Decree No. 18903, Jun. 30, 2005>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2005.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 18988, Aug. 5, 2005>
| (1) | (Enforcement date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Applicability concerning Scope of Majority Stockholders) The amended provisions of Article 157(4) shall apply to stocks, etc. transferred after this Decree enters into force. |
| (3) | (Transitional Measures concerning Scope of Majority Stockholders) Where persons who do not fall under majority stockholders under the previous Article 157(4)2 as of the date this Decree enters into force become to fall under the requirements of majority stockholders under the amended provisions of Article 157(4)2, the previous provisions shall govern not later than the completion date of business year in which the date this Decree enters into force falls, notwithstanding the amended provisions of Article 157(4)2. |
ADDENDA <Presidential Decree No. 19010, Aug. 19, 2005>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 19254, Dec. 31, 2005>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2006; provided, the amended provisions of Articles 167-5 through 167-7 shall enter into force on January 1, 2007.
Article 2 (General applicability concerning capital gains tax)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 19327, Feb. 9, 2006>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Articles 168 and 168-14 shall enter into force on January 1, 2006, the amended provisions of Article 162-2(2) shall enter into force on January 30, 2006, the amended provisions of Articles 26-2, 207-4 and 207-5 shall enter into force on July 1, 2006, and the amended provisions of Articles 57 and 214 (limited to the portion on other incomes) shall enter into force on January 1, 2007.
Article 2 (General applicability)
This Decree shall apply to the portion of incomes first accruing during the taxable period in which the date this Decree enters into force falls.
Article 3 (General applicability concerning capital gains tax)
The amended provisions concerning capital gains tax in this Decree shall apply from the portion of first transfer after this Decree enters into force.
Article 4 (Applicability concerning method of calculating profit of specified money in trust)
The amended provisions of Article 26-2 shall apply to the portion of income first occurred and paid after this Decree enters into force.
Article 5 (Applicability concerning scope of dividend income)
The amended provisions of Article 26-3 shall apply to the portion first occurring after this Decree enters into force.
Article 6 (Applicability concerning retirement income)
The amended provisions of Article 42-2(5) shall apply to the portion first transferred or paid in after the Guarantee of Workers' Retirement Benefits Act enters into force.
Article 7 (Applicability concerning calculation of necessary expenses in employer's contribution to retirement pension)
The amended provisions of Article 55(1) and (3) through (5) shall apply to the portion for the taxable period reported after this Decree enters into force.
Article 8 (Applicability and special applicability concerning reserves for retirement benefits)
| (1) | The amended provisions of Article 57(1) and (2) shall apply to the portion included in necessary expenses in the taxable period in which the date this Decree enters into force falls. |
| (2) | In applying the amended provisions of Article 57(2), with regard to the portion included in necessary expenses in the taxable period in which the date this Decree enters into force falls and the following taxable period, notwithstanding the amended provisions of the same paragraph of the same Article, "30/100" in the same paragraph of the same Article shall be construed as "35/100". |
Article 9 (Applicability concerning scope of designated donations)
The amended provisions of Article 80(1)5 shall apply to the portion first donated in the taxable period in which the date this Decree enters into force falls.
Article 10 (Applicability concerning calculation of donations, entertainment expenses, etc.)
The amended provisions of Article 81(7) shall apply to the portion first donated in the taxable period in which the date this Decree enters into force falls.
Article 11 (Applicability concerning scope of entertainment expenses)
The amended provisions of Articles 83(6) and 84(4) shall apply to the portion first expended in the taxable period in which the date this Decree enters into force falls.
Article 12 (Applicability concerning interest amount payable on long-term housing mortgage loan)
| (1) | The amended provisions of Article 112(11) and (12) shall apply to the portion of the existing debt first redeemed or housing purchased in the taxable period in which the date this Decree enters into force falls. |
| (2) | The amended provisions of Article 112(13) shall apply to the portion first borrowed in the taxable period in which the date this Decree enters into force falls. |
Article 13 (Applicability concerning special deduction)
The amended provisions of Article 113 shall apply to the portion paid for income deduction concerning income first occurring in the taxable period in which the date this Decree enters into force falls.
Article 14 (Applicability concerning submission of specification of reception of receipt)
The amended provisions of Article 132(3) shall apply to the portion of expenses first expended in the taxable period in which the date this Decree enters into force falls.
Article 15 (Applicability concerning determination and revision through estimation of income amount)
The amended provisions of the proviso to Article 143(3)1 shall apply to the portion for the taxable period first reported after this Decree enters into force.
Article 16 (Applicability concerning special cases for one house for one household)
The amended provisions of Article 155(16) shall apply to the portion of houses first transferred by officers, employers or employees of corporations or public institutions which moved to the regions other than the Seoul Metropolitan area after this Decree enters into force.
Article 17 (Applicability concerning scope of domestic source income of nonresident)
The amended provisions of Article 179(7) shall apply to the portion of income first occurring after this Decree enters into force.
Article 18 (Applicability concerning revenue amount following transfer of securities by nonresident)
The amended provisions of Article 183-2(2) and (4) shall apply to the portion first transacted after this Decree enters into force.
Article 19 (Applicability concerning withholding pension income)
The amended provisions of Articles 201-8 and 201-9 shall apply to the portion first withheld after this Decree enters into force.
Article 20 (Applicability concerning withholding retirement income)
The amended provisions of Article 203(4) through (9) shall apply to the portion of retirement benefits first paid after this Decree enters into force.
Article 21 (Applicability concerning exemption from withholding capital gains of nonresident)
The amended provisions of Article 207(4) shall apply to the portion first withheld after this Decree enters into force.
Article 22 (Applicability concerning special cases in withholding interest, etc. on bonds, etc. of nonresident)
The amended provisions of Article 207-3 shall apply to the portion first withheld after this Decree enters into force.
Article 23 (Applicability concerning special cases in withholding procedure for nonresident)
The amended provisions of Articles 207-4 and 207-5 shall apply to the portion first withheld after July 1, 2006.
Article 24 (Applicability concerning importation invoices)
The amended provisions of Article 212-2 shall apply to the portion first imported in the taxable period in which the date this Decree enters into force falls.
Article 25 (Applicability concerning submission of statements of payment)
The amended provisions of Articles 213(2) and (5), and 214(1) and (2) shall apply to the portion first occurring and paid after this Decree enters into force.
Article 26 (Applicability concerning special cases in obligation to submit statements of payment on domestic source income of nonresident)
The amended provisions of Article 216-2 shall apply to the submission of statements of payment on capital gains first occurring after this Decree enters into force.
Article 27 (Special cases concerning submission and administrative guidance of documentary evidence of income deduction)
The amended provisions of Article 216-3 shall apply to the portion paid for income deduction concerning income occurring in the taxable period in which the date this Decree enters into force falls.
Article 28 (Applicability concerning inspection of pension income data)
The amended provisions of Article 223 shall apply to the portion first requested for inspection or copying in the taxable period in which the date this Decree enters into force falls.
Article 29 (Applicability concerning penalty tax for unfaithful reports against non-delivery of invoices)
The amended provisions of Article 19 of the Addenda of the amended Enforcement Decree of the Income Tax Act (Presidential Decree No. 15969), shall apply to the portion in the taxable period first reported after this Decree enters into force.
Article 30 (Transitional measures concerning scope of one house for one household)
| (1) | Where a house and its appurtenant land acquired after the public notice date for the project approval in the area for which public notice for project approval is made as at the time this Decree enters into force are transferred by December 31, 2007, the previous provisions shall apply notwithstanding the amended provisions of Article 154(1)2a. |
| (2) | Where all members of a household move out of the Republic of Korea due to such conditions as emigration under the Emigration Act, study or work needing continuous overseas residence for not less than a year as at the time this Decree enters into force, and the house is transferred by December 31, 2007, the previous provisions shall apply notwithstanding the amended provisions of Article 154(1)2b and c. |
Article 31 (Transitional Measures concerning Scope of Housing Falling under Three or More Houses for One Household)
Where a house used by the members of a household as a family nurture facility under the Infant Care Act for not less than five years as at the time this Decree enters into force is transferred by July 31, 2006, the previous provisions shall apply notwithstanding the amended provisions of Article 167-3(1)8-2.
Article 32 Omitted.
ADDENDA <Presidential Decree No. 19463, Apr. 28, 2006>
Article 1 (Enforcement date)
This Decree shall enter into force on April 30, 2006.
Article 2 Omitted.
Article 3 Omitted.
ADDENDUM <Presidential Decree No. 19507, Jun. 12, 2006>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 19513, Jun. 12, 2006>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2006.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 19687, Sep. 22, 2006>
| (1) | (Enforcement date) This Decree shall enter into force on September 25, 2006. |
| (2) | (General applicability) This Decree shall apply to the portion of transfer first after this Decree enters into force. |
ADDENDA <Presidential Decree No. 19890, Feb. 28, 2007>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Articles 132(4), 147-2(2) (limited to the provisions related to the additional tax on no evidence preparation and the additional tax on no submission of specification of reception of receipts in Article 81(4) and (5) of the Act), 184(1) and (2), 210-2(2) and (3), and 210-3 shall enter into force on July 1, 2007, while the amended provisions of Article 143(4)2 and (7) shall enter into force on January 1, 2008.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (General applicability concerning capital gains tax)
This Decree shall apply to the assets transferred on or after the date this Decree enters into force.
Article 4 (Applicability to interest income from state bonds)
The amended provisions of Article 22-2(3) shall apply to the bonds issued on or after the date this Decree enters into force.
Article 5 (Applicability to calculation of dividend income)
The amended provisions of Article 27-2(1)2 shall apply to dividend income paid on or after the date this Decree enters into force.
Article 6 (Applicability to scope of pension income)
The amended provisions of Article 40-3(3)1 shall apply to pension income paid on or after the date this Decree enters into force.
Article 7 (Applicability to scope of retirement benefit income)
The amended provisions of Article 42-2(3)1 shall apply to retirement benefit income paid on or after the date this Decree enters into force.
Article 8 (Applicability to time for receiving dividend income)
The amended provisions of subparagraphs 3-2 and 7 of Article 46 shall apply to dividend income paid on or after the date this Decree enters into force.
Article 9 (Applicability to inclusion of necessary expenses)
The amended provisions of Article 55(1)24-2 and 25 shall apply to the expenses disbursed on or after the date this Decree enters into force.
Article 10 (Applicability to scope of designated donations)
The amended provisions of Article 80(2) shall apply to the grounds arising on or after the date this Decree enters into force.
Article 11 (Applicability to calculation of donations and entertainment expenses)
The amended provisions of Article 81(3) shall apply to donations, entertainment expenses, etc. disbursed on or after the date this Decree enters into force.
Article 12 (Applicability to disaffirmation of calculation by wrongful acts)
The amended provisions of the proviso to Article 98(2) shall apply to the transactions made with a related person on or after the date this Decree enters into force.
Article 13 (Applicability concerning medical expense deduction)
The amended provisions of Article 110(2) shall apply to the calculation of the aggregate of medical expenses spent during the year in which the date this Decree enters into force falls and thereafter.
Article 14 (Applicability to deduction of housing funds)
The amended provisions of the former part of Article 112(7)4 and para- graph (11) of the said Article shall apply to the repayment period extended for existing loans on or after the date this Decree enters into force.
Article 15 (Applicability to determination and rectification of estimation)
The amended provisions of Article 143(4)2 and 7 shall apply to the taxable period that begins on January 1, 2008.
Article 16 (Applicability to collection of withholding tax on business income)
The amended provisions of Article 184(1) and (2) shall apply to the withholding tax collected on business incomes on or after July 1, 2007.
Article 17 (Applicability to settlement of tax on retirement benefit income)
The amended provisions of Article 203(4)1-2 shall apply to those withdrawn early before maturity on or after the date this Decree enters into force.
Article 18 (Applicability to duty of financial institutions to prepare and retain details of certificates issued)
The amended provisions of subparagraph 2b of Article 208-4 shall apply to the details of the issuance prepared and issued for each resident on or after the date this Decree enters into force.
Article 19 (Applicability to reporting on refusal to issue credit card sales slip)
The amended provisions of Articles 210-2(2) and 210-3(7) shall apply to the goods and services supplied on or after July 1, 2007.
Article 20 (Applicability to submission of evidencing documents for income deduction)
The amended provisions of Article 216-3(1)1-2 shall apply to the amount equivalent to the interest paid for deduction of the income accruing during the taxable period in which the date this Decree enters into force falls.
Article 21 (Transitional measures concerning special exception of one house for one household)
As to a person who owns a farm house for returning to the rural area, which was acquired before the date this Decree enters into force, the former provisions shall apply, notwithstanding the amended provisions of Article 155(10)4a.
Article 22 (Transitional measures concerning simplified tax withholding table for wage and salary income)
The amount collected in excess, as calculated by subtracting the aggregate of the amount of tax calculated by applying the amended provisions of Appendix 2 from the aggregate of amount of tax withheld in accordance with the former Appendix 2 for the pertinent taxable period before this Decree enters into force may be subtracted by a withholding agent from income tax that shall be withheld and paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 20212, Aug. 6, 2007>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning simplified tax withholding table for wage and salary income)
This Decree shall begin to apply from the portion of income to be paid after this Decree enters into force.
Article 3 (Transitional measures concerning subtraction of withholding tax excessively collected in accordance with simplified tax withholding table for wage and salary income)
The amount collected in excess, as calculated by subtracting the aggregate of the amount of tax calculated by applying the amended provisions of Appendix 2 from the aggregate of amount of tax withheld in accordance with the former Appendix 2 for the pertinent taxable period before this Decree enters into force may be subtracted by a withholding agent from income tax that shall be withheld and paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 20222, Aug. 17, 2007>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 7 Omitted.
Article 8 Omitted.
Article 9 Omitted.
ADDENDA <Presidential Decree No. 20323, Oct. 15, 2007>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 20330, Oct. 17, 2007>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 9 Omitted.
Article 10 Omitted.
Article 11 Omitted.
ADDENDA <Presidential Decree No. 20516, Dec. 31, 2007>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2008.
Articles 2 through 5 Omitted.
Article 6 Omitted.
Article 7 Omitted.
ADDENDA <Presidential Decree No. 20618, Feb. 22, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Articles 55(1)11 and 11-2, 110(1)6, 192, 201-10 and 210-3(6) shall enter into force on July 1, 2008.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (General applicability concerning capital gains tax)
This Decree shall apply to assets transferred on or after the date this Decree enters into force; provided, the amended provision of Article 168-10(4) shall apply to assets transferred on or after January 1, 2008.
Article 4 (Applicability concerning place for tax payment of business to file consolidated return as single taxable unit)
The amended provisions of Article 5(3)2 shall also apply to a person who has been approved as a business to file a consolidated return as a single taxable unit as at the time this Decree enters into force.
Article 5 (Applicability concerning allowance for compensation of actual expenses)
The amended provisions of subparagraph 15 of Article 12 shall apply to income paid on or after the date this Decree enters into force.
Article 6 (Applicability concerning scope of wage and salary income)
The amended provisions of Articles 38(1)12, 55(1)10 and 108-2 shall apply to shares in expenses paid in the taxable period in which the date this Decree enters into force falls.
Article 7 (Applicability concerning retirement income)
The amended provisions of Article 42-2(5) shall apply to the portion transferred or received on or after the date this Decree enters into force.
Article 8 (Applicability concerning scope of donation)
The amended provisions of Article 80(2) shall apply to the portion to which disqualification for designation occurs on or after the date this Decree enters into force.
Article 9 (Applicability concerning submission of statements of payment related to income deduction of donation)
The amended provisions of Article 112-2(2) shall apply to statements of payment submitted on or after the date this Decree enters into force.
Article 10 (Applicability concerning voluntary payment by additional report)
The amended provisions of Article 134 shall apply to the portion notified on or after the date this Decree enters into force.
Article 11 (Applicability concerning application of standard expense rate and simplified expense rate)
The amended provision of Article 145(3) shall apply to the portion that is decided after review by the Deliberative Committee of Standard Expense Rate for the final return of tax base for the taxable period in which the date this Decree enters into force falls.
Article 12 (Applicability concerning special cases of one house for one household)
The amended provisions of Article 155(16) shall apply to the portion transferred to an area outside the Metropolitan area on or after the date this Decree enters into force.
Article 13 (Applicability concerning deemed payment date of dividend income, bonus and other income obtained by disposal of income)
The amended provisions of Article 192 shall apply to the portion notified on or after the date the same provisions enter into force.
Article 14 (Applicability concerning supply of data on income deduction for calculation of pension amount of income)
The amended provisions of Article 201-10 shall apply to the portion requested on or after the date the same provisions enter into force.
Article 15 (Applicability concerning settlement of amount of tax on retirement income)
The amended provisions of Article 203(4) shall apply to the portion in which an employee retires, withdraws the retirement pension early before maturity or the income tax is refunded on or after the date this Decree enters into force.
Article 16 (Applicability concerning submission of report of status of performance of collection by taxpayers association)
The amended provisions of Article 205 shall apply to the portion submitted on or after the date this Decree enters into force.
Article 17 (Applicability concerning retainment of data evidencing expenditure)
The amended provisions of Article 208-2(5) shall apply to the portion received on or after the date this Decree enters into force.
Article 18 (Applicability concerning opening of business account)
| (1) | The amended provisions of Article 208-5(1) shall apply to the portion opened and reported on or after the date this Decree enters into force. |
| (2) | The amended provisions of Article 208-5(4) and (5) shall apply to the portion for which a business account has to be used during the taxable period in which the date this Decree enters into force falls. |
Article 19 (Applicability concerning amount subject to issuance of cash receipts)
The amended provisions of Article 210-3(6) shall apply to Cash Receipts issued on or after the date the same provisions enter into force.
Article 20 (Applicability concerning exemption from submission of statements of payment)
The amended provisions of Article 214(1) shall apply to the portion submitted on or after the date this Decree enters into force.
Article 21 (Transitional measures concerning organization and operation of taxpayers association)
| (1) | Notwithstanding the amended provisions of Article 204(2), the previous provision shall apply until December 31, 2008 to a taxpayers association approved as at the time this Decree enters into force. |
| (2) | A taxpayers association approved as at the time this Decree enters into force shall submit a detailed statement of members of the taxpayers association by not later than December 31, 2008 to the head of the competent tax office. |
Article 22 (Transitional measures concerning simplified tax withholding table for wage and salary income)
Where an amount of tax has been withheld pursuant to the former Appendix 2 from the income occurred after January 1, 2008, the amount collected in excess as gained by subtracting the total amount of tax calculated by applying the amended provisions of Appendix 2 from the total amount of the relevant amount of tax withheld may be withheld and the income tax liable for payment may be deducted by the same. In such cases, the amount announced by the Minister of Finance and Economy may be used as the amount collected in excess.
Article 23 (Transitional measures concerning simplified tax withholding table for pension income)
The amount collected in excess as gained by subtracting the total of amount of tax calculated by applying the amended provisions of Appendix 3 from the total amount of withheld tax concerned pursuant to the former Appendix 3 on the income generated after January 1, 2008 may be subtracted by a withholding agent from income tax that shall be withheld and paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 20720, Feb. 29, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
Article 8 Omitted.
ADDENDA <Presidential Decree No. 20763, Apr. 3, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on April 7, 2008.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 20931, Jul. 24, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
ADDENDA <Presidential Decree No. 21025, Sep. 22, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 21062, Oct. 7, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
ADDENDA <Presidential Decree No. 21138, Nov. 28, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
ADDENDA <Presidential Decree No. 21148, Dec. 3, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on December 6, 2008.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 21195, Dec. 31, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 3 (Applicability to house acquired for purpose of actual demand from which imposition of heavy taxation of capital gains tax is excluded)
The part concerning the value of a house acquired from among the amended provisions of Articles 167-5(1)3 and 167-6(3)4 shall apply to houses acquired and transferred on or after the date this Decree enters into force.
Article 4 (Applicability to criteria for judgement of land not regarded as land for non-business use due to unavoidable reason)
The amended provisions of Article 168-14(3) shall apply to land transferred in the taxable year in which the date this Decree enters into force falls.
ADDENDA <Presidential Decree No. 21214, Dec. 31, 2008>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDUM <Presidential Decree No. 21215, Dec. 31, 2008>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 21301, Feb. 4, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Articles 102(1)2 and 3 and 184(2) shall enter into force on April 1, 2009, the amended provisions of Article 5(3)2 on January 1, 2010, and the amended provisions of Articles 41(10) and 87(2) on January 1, 2011. <Amended on Feb. 18, 2010>
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (General applicability concerning capital gains tax)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 4 (Applicability to scope of collective investment schemes)
| (1) | The amended provisions of Article 23(1)3 shall apply to the settlement of accounts made on or after the enforcement date of the amended provisions of Article 23(1)3 under the proviso to Article 1 of the Addenda. |
| (2) | The amended provisions of the proviso to Article 23(4) shall apply to acquisition on or after the date this Decree enters into force. |
Article 5 (Applicability to computation of necessary expenses for income from lease of real estate)
| (1) | The amended provisions of Article 55(1)1-2 and 25 shall apply to necessary expenses spent in the taxable period in which the date this Decree enters into force falls. |
| (2) | The amended provisions of Article 55(1)11-3 shall apply to insurance premiums, the payment duty of which occurs, in the taxable period in which the date this Decree enters into force falls. |
Article 6 (Applicability to computation of donations)
The amended provisions of Article 81(4)3 shall apply to final returns on tax base on or after the date this Decree enters into force.
Article 7 (Applicability to scope of entertainment expenses)
The amended provisions of Article 83(6) and (7) shall apply to entertainment expenses spent in the taxable period in which the date this Decree enters into force falls.
Article 8 (Applicability to scope, etc. of bonds, etc.)
The amended provisions of Article 102(1)2 shall apply to transactions of bonds on or after the enforcement date of the amended provisions of Article 102(1)2 under the proviso to Article 1 of the Addenda.
Article 9 (Applicability to deduction of housing funds)
| (1) | The amended provisions of Article 112(1) and (8) shall apply to repayment made on or after January 1, 2009. |
| (2) | The amended provisions Article 112(7) and (9) shall apply to repayment made on or after January 1, 2009; provided, with respect to the repayment satisfying the necessary conditions of the previous grace period before October 21, 2008, the amended provisions of Article 112(7) and (9) shall apply to repayment made on or after October 21, 2008. |
Article 10 (Applicability to presentation of documents for special deduction)
The amended provisions of Article 113 shall apply to the presentation of documents for the amount spent on or after January 1, 2008.
Article 11 (Applicability to tax credit for bookkeeping)
The amended provisions of Article 116-3(1)1 shall apply to final returns on tax base on or after the date this Decree enters into force.
Article 12 (Applicability to voluntary payment of tax amount of final return on tax base)
The amended provisions of Article 139 shall apply to the tax amount of final return on tax base and voluntary payment thereof on or after the date this Decree enters into force.
Article 13 (Applicability to special cases on one house for one household)
The amended provisions of Articles 155(4) (limited to the part concerning age of lineal ascendants), 156-2(8)2, 167-5(1)4 and 167-6(3)5 shall apply to the combination of households for living together with and supporting lineal ascendants.
Article 14 (Applicability to scope of domestic source income of nonresident)
The amended provisions of Article 179(16) shall apply to income from dividend of profits on or after the date this Decree enters into force.
Article 15 (Applicability to kinds of prizes and supplementary prizes for which necessary expenses are recognized and scope of deduction of necessary expenses)
The amended provisions of Article 183(3) and (4) shall apply to necessary expenses spent in the taxable period in which the date this Decree enters into force falls.
Article 16 (Applicability to scope of business income subject to withholding tax)
The amended provisions of Article 184(2) shall apply to business income to be withheld on or after the enforcement date of the amended provisions of Article 184(2) under the proviso to Article 1 of the Addenda.
Article 17 (Applicability to special cases on payment of withholding tax amount)
The amended provisions of Article 186(1) shall apply to the withholding tax amount, the payment by half year of which has been approved or designated by the Commissioner of the National Tax Service on or after the date this Decree enters into force.
Article 18 (Applicability to year-end tax settlement of wage and salary income tax amount)
The amended provisions of Articles 196, 198 and 199 shall apply to the year-end tax settlement of wage and salary income tax amount on or after the date this Decree enters into force.
Article 19 (Applicability to payment of withholding tax amount on nonresident)
The amended provisions of Article 207(2) shall apply to transfer made on or after the date this Decree enters into force.
Article 20 (Applicability to presentation of application for non-taxation and exemption by nonresident)
The amended provisions of Article 207-2(7) shall apply to transfer or lease made on or after the date this Decree enters into force.
Article 21 (Applicability to procedures for prior approval for application of non-taxation, exemption or limited tax rate under tax treaty)
The amended provisions of Article 207-4(1) and (7) shall apply to an application for prior approval on or after the date this Decree enters into force.
Article 21-2 (Transitional measures concerning scope of collective investment scheme)
With regard to investment trust created or established by the previous provisions of the Indirect Investment Asset Management Business Act (referring to the same Act before repealed by the Financial Investment Services and Capital Markets Act (Act No. 8635)) as at the time this Decree enters into force, notwithstanding the amended provisions of Article 23, the previous provisions shall apply until such investment trust is registered with the Financial Services Commission as collective investment scheme pursuant to Article 29(1) of the Addenda of the Financial Investment Services and Capital Markets Act (Act No. 8635).
Article 22 (Special cases to computation of standard market price of assets other than land and buildings)
| (1) | The standard market price at the time of acquisition of a golf course membership card acquired before the amended provisions of Article 165(8)3 enter into force shall be the value according to the following formula: |
Standard amount of market price under the Local Tax Act as at the time this Decree enters into force (hereafter referred to as "standard amount of market price" in this Article) × Value announced by the Commissioner of the National Tax Service at the time of acquisition/Value announced by the Commissio- ner of the National Tax Service as at the time this Decree enters into force
| (2) | The standard market price at the time of acquisition of a facilities pass acquired other than a golf course membership card before the amended provisions of Article 165(8)3 enter into force shall be the value according to the following formula: |
Producer Price Index surveyed by the Bank of Korea in the month to which the acquisition date belongs (hereafter the same shall apply in this Article) Producer Price Index in the month to which the date when the standard amount of market price has been announced belongs as at the time this Decree enters into force
──────────────────────
Producer Price Index in the month to which the first date when the Commissioner has announced the standard market price of the relevant assets belongs
| (3) | When applying the formula under paragraph (1), in cases where there is no value announced by the Commissioner of the National Tax Service at the time of acquisition, the standard market price shall be the value according to the following formula: |
Article 23 (Special cases following amendment of simplified tax withholding table for wage and salary income)
In cases where there is an amount of tax withheld pursuant to the previous Appendix 2 for an income having accrued after January 1, 2009, an excess of withholding computed by subtraction of the total amount of tax computed by application of the amended provisions of Appendix 2 from the total amount of the relevant withholding tax amount may be subtracted from income tax to be withheld and paid after this Decree enters into force.
Article 24 (Special cases following amendment of simplified tax withholding table for pension income)
In cases where there is an amount of tax withheld pursuant to the previous Appendix 3 for an income having accrued after January 1, 2009, an excess of withholding computed by subtraction of the total amount of tax computed by application of the amended provisions of Appendix 3 from the total amount of the relevant withholding tax amount may be subtracted from income tax to be withheld and paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 21430, Apr. 21, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to deduction of interest expenses for mortgage-backed retirement pension)
The amended provisions of Article 108-3(1)2 and 3 shall apply to the taxable year in which the date this Decree enters into force falls.
Article 3 (Applicability to special deduction of long-term housing mortgage loan)
The amended provisions of Article 112(9)5 shall apply to borrowing made on or after February 12, 2009.
ADDENDA <Presidential Decree No. 21515, May 29, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
ADDENDUM <Presidential Decree No. 21525, Jun. 8, 2009>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 21528, Jun. 9, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 21565, Jun. 26, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on June 30, 2009; provided, ……<omitted.> …… the amended provisions of Article 3 of the Addenda shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 21765, Oct. 1, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 21881, Dec. 14, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
Article 6 Omitted.
Article 7 Omitted.
ADDENDA <Presidential Decree No. 21887, Dec. 15, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 10 Omitted.
Article 11 Omitted.
Article 12 Omitted.
ADDENDA <Presidential Decree No. 21934, Dec. 31, 2009>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2010; provided, the amended provisions of Articles 23(1) and 102(1) shall enter into force on July 1, 2010.
Article 2 (Applicability concerning scope of collective investment schemes)
The amended provisions of Article 23(1) shall apply to the settlement of accounts made on or after the date this Decree enters into force.
Article 3 (Applicability concerning scope of bonds, etc.)
The amended provisions of Article 102(1) shall apply to profits made on or after the date this Decree enters into force; provided, where profits made after this Decree enters into force are for retrieval of loss (referring to cases where profits made after this Decree enters into force is less than the loss incurred before this Decree enters into force at the time of purchasing bonds), the amended provisions of Article 102(1) shall apply to profits made after retrieval of such loss.
Article 4 (Applicability concerning presentation of certificate of seal impression)
The amended provisions of Article 169(1) shall apply to income tax return made on or after the date this Decree enters into force.
Article 5 (Transitional measures concerning necessary expenses for transferred assets)
Notwithstanding the amended provisions of Article 163(11), the previous provisions shall apply to a resident who has confirmed the actual market value at the time of the acquisition of assets pursuant to the main sentence of the part other than the subparagraphs of Article 97(7) of the Act by presenting a certificate of his or her seal impression pursuant to the previous Article 169(1)1e as at the time this Decree enters into force.
ADDENDA <Presidential Decree No. 22003, Jan. 27, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on February 1, 2010.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 22034, Feb. 18, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the proviso to Article 113-2(1)1a (only applicable to the part which violates Article 162-3(4) of the Act), Article 210-3(8) and Appendix 3-3 shall enter into force on April 1, 2010, the amended provisions of Articles 26-2(1)2a (only applicable to the amount of profit calculated by investment in derivatives), 27(4) and 216-2 on July 1, 2010, the amended provisions of Articles 53, 80(2), 143(4) and 208(5) on January 1, 2011, and the amended provisions of Article 16(1)2 on July 1, 2011.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (General applicability concerning capital gains tax)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 4 (Applicability concerning scope of non-taxable wages of overseas workers)
The amended provisions of Article 16(1)2 shall apply to income generated on or after the date the amended provisions of Article 16(1)2 enters into force pursuant to the proviso to Article 1 of the Addenda.
Article 5 (Applicability concerning interest income from state bonds)
The amended provisions of Article 22-2(2) shall apply to bonds issued on or after the date this Decree enters into force.
Article 6 (Applicability concerning scope of collective investment scheme)
The amended provisions of Article 26-2(1)2a (only applicable to the amount of profit calculated by investment in derivatives) shall apply to the settlement of accounts on or after the date the amended provisions of Article 26-2(1)2a enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 7 (Applicability concerning designation of private organizations subject to donation and cancellation of designation)
| (1) | The amended provisions of Article 80(1)5 shall apply to private organizations subject to donation designated on or after the date this Decree enters into force. |
| (2) | The amended provisions of Article 80(2) shall apply to private organizations subject to donation for which the requirements for cancellation of designation occur on or after the date the amended provisions of Article 80(2) enter into force pursuant to the proviso to Article 1 of the Addenda. |
Article 8 (Applicability concerning medical expense deduction)
The amended provisions of Article 110(2) shall apply to expenses disbursed in the taxable period in which the date this Decree enters into force falls.
Article 9 (Applicability concerning educational expense deduction)
The amended provisions of Article 110-3(1) shall apply to expenses disbursed in the taxable period in which the date this Decree enters into force falls.
Article 10 (Applicability concerning deduction for housing funds)
| (1) | The amended provisions of Article 112(4) shall apply to the principal and interest repaid by borrowing of house rental funds in the taxable period in which the date this Decree enters into force falls. |
| (2) | The amended provisions of Article 112(5) shall apply to the amount of monthly rent paid in the taxable period in which the date this Decree enters into force falls. |
Article 11 (Applicability concerning calculation of business income subject to year-end tax settlement)
The amended provisions of Articles 143(3)1-3 and 201-3(3) shall apply to income determined or reassessed, or final returns filed on the tax base of global income on income generated in 2009 on or after the date this Decree enters into force.
Article 12 (Applicability concerning Requirements of public offering collective investment scheme)
The amended provisions of Article 179-3 shall apply to income withheld on or after the date this Decree enters into force.
Article 13 (Applicability to special cases in relation to payment of withholding tax)
The amended provisions of Article 186(4) shall apply to applications for approval for semi-annual payment of withholding taxes on or after the date this Decree enters into force.
Article 14 (Applicability concerning legal fiction of timing for payment of dividends, bonuses and other income by disposition of income)
The amended provisions of Article 192(3) shall apply to income on which the tax base of corporate tax and the amount of tax thereof are reported or changes thereto are reported on or after the date this Decree enters into force.
Article 15 (Applicability concerning special cases in relation to withholding taxes for interest, etc. on bonds, etc. of nonresident)
The amended provisions of Article 207-3(3) and (4) shall apply to bonds sold to a third party on or after the date this Decree enters into force.
Article 16 (Applicability concerning decoming credit card member stores)
The amended provisions of Article 210-2(2) shall apply to transactions by credit card refused or credit card sale slips issued falsely on or after the date this Decree enters into force.
Article 17 (Applicability concerning obligations to issue cash receipts)
The amended provisions of Article 210-3(8) shall apply to transactions providing goods or services on or after the date the amended provisions of Article 210-3(8) enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 18 (Applicability concerning special cases in relation to obligations to submit statements of payment on domestic source income of nonresident)
The amended provisions of Article 216-2 shall apply to domestic source income paid on or after the date the amended provisions of Article 216-2 enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 19 (Special cases concerning one family, one house) When applying the amended provisions of the proviso to the main sentence of Article 155(2) and the proviso to the main sentence of Article 156-2(6), where households live together with a lineal ascendant to support such lineal ascendant (only applicable to a woman) before February 4, 2009, "60 years old" shall be construed as "55 years old".
Article 20 (Transitional measures concerning simplified tax withholding table for wage and salary income)
Where there is any tax withheld on income incurred on and after January 1, 2010 pursuant to the previous provisions of Appendix 2, a withholding agent may deduct the excess collected which is computed by deducting the aggregate of tax payable, calculated pursuant to the amended provisions of Appendix 2, from the aggregate of withholding taxes, from income tax to be withheld and paid after this Decree enters into force.
Article 21 (Transitional measures concerning simplified tax withholding table for pension income)
Where there is the tax amount withheld pursuant to the previous Appendix 3 on income generated after January 1, 2010, a withholding agent may deduct the excess collected amount calculated by deducting the total amount of the tax amount calculated by applying the amended provisions of Appendix 3 from the total amount of the relevant withholding tax amount from the income tax to be withheld and paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 22073, Mar. 9, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on March 10, 2010.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 22075, Mar. 15, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on March 19, 2010. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 22151, May 4, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on May 5, 2010.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 22185, Jun. 8, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 27(1) and Appendix 3-3 shall enter into force on July 1, 2010.
Article 2 (General applicability)
This Decree shall apply to income generated in the taxable period in which the date this Decree enters into force falls.
Article 3 (Applicability concerning calculation of deemed dividend)
The amended provisions of Article 27(1) shall apply to the calculation of deemed dividend generated by merger, division or division and merger on or after the date the amended provisions of Article 27(1) enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 4 (Applicability concerning scope of repurchase agreement)
The amended provisions of Articles 102(4) and (5) and 207-3(3) and (4) shall apply to bond, etc. sold or lent on or after the date this Decree enters into force.
Article 5 (Applicability concerning obligations to issue cash receipts)
The amended provisions of Appendix 3-3 shall apply to transactions supplying goods or services on or after the date the amended provisions of Appendix 3-3 enter into force pursuant to the proviso to Article 1 of the Addenda.
ADDENDA <Presidential Decree No. 22269, Jul. 12, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 22391, Sep. 20, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability)
The amended provisions of Article 167-3(1)2a shall apply to houses transferred on or after the date this Decree enters into force.
ADDENDA <Presidential Decree No. 22395, Sep. 20, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2011.
Articles 2 through 7 Omitted.
Article 8 Omitted.
Article 9 Omitted.
ADDENDA <Presidential Decree No. 22493, Nov. 15, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on November 18, 2010.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 22516, Dec. 7, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on December 9, 2010.
Articles 2 through 6 Omitted.
Article 7 Omitted.
Article 8 Omitted.
ADDENDA <Presidential Decree No. 22560, Dec. 29, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on February 5, 2011.
Articles 2 through 4 Omitted.
Article 5 Omitted.
Article 6 Omitted.
ADDENDA <Presidential Decree No. 22568, Dec. 29, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2011.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 22580, Dec. 30, 2010>
Article 1 (Enforcement date)
This Decree shall enter into force on February 5, 2011; provided, the amended provisions of Articles 80(1)3 and 81 (limited to provisions concerning abolition of special donations) shall enter into force on July 1, 2011.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (General applicability concerning capital gains tax)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 4 (Applicability to scope of collective investment schemes)
The amended provisions of Article 26-2 shall apply to the settlement and distribution, cancellation and dissolution of collective investment schemes, and sale and redemption of collective investment securities on or after the date this Decree enters into force.
Article 5 (Applicability concerning scope of dividend income)
The amended provisions of Article 26-3(2) shall apply to stocks lent by loan transactions on or after the date this Decree enters into force.
Article 6 (Applicability concerning exclusion of retirement insurance, insurance premiums and installments of trust from necessary expenses)
The amended provisions of Article 55 (excluding paragraphs (2) and (7)) shall apply to the payment or expenditure of insurance premiums and installments on or after the date this Decree enters into force.
Article 7 (Applicability concerning donation trust by public interest corporations)
The amended provisions of Article 80(1)3 shall apply to the expenditure of donations on or after the date such provisions enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 8 (Applicability concerning submission of aggregate table of invoices by seller and aggregate table of invoices by purchaser)
The amended provisions of Article 212(1) shall apply to the aggregate table of invoices by seller and aggregate table of invoices by purchaser submitted for the taxable period in which the date this Decree enters into force falls.
Article 9 (Transitional measures for abolition of special donations)
Notwithstanding the amended provisions of Articles 80(1)3 and 81, the previous provisions shall apply to special donations under Article 73 of the Restriction of Special Taxation Act which have been spent prior to the date of enforcement under the proviso to Article 1 of the Addenda.
Article 10 (Transitional measures concerning exclusion of retirement insurance, insurance premiums and installments of trust from necessary expenses)
| (1) | Notwithstanding the amended provisions of Article 55, insurance premiums and installments of retirement insurance and trust included in necessary expenses according to the previous provisions before this Decree enters into force, shall not be reversed into the total income. |
| (2) | Notwithstanding the amended provisions of Article 55, profits incurred from operation of reserves of retirement insurance premiums or retirement trust installment included in necessary expenses according to the previous provisions before this Decree enters into force, may be included in necessary expenses. |
Article 11 (Transitional measures concerning compliant small and medium enterprises)
A business operator approved as a compliant small and medium enterprise in accordance with the previous provisions of Article 87-2(2) of the Act as at the time this Decree enters into force, may compute the tax base and tax payable for global income for the taxable period leading up to the period in which December 31, 2013 arrives by the compliant tax payment methods under the previous provisions of Articles 150-2 through 150-10, and file a tax return and pay his or her tax due, accordingly.
Article 12 (Transitional measures concerning determination and correction based on estimation)
With respect to the business operator who, before enforcement date of this Decree, reported beginning of a construction by stating any date prior to December 31, 2010, as the actual or scheduled date of beginning of the construction on the documentary report of beginning of construction under the Building Act, Housing Act or other Acts, and then newly initiates the construction business or the business of developing and supplying real estate (excluding the case of re-sale of purchased real property) classified under the Korea Standard Industrial Code, the previous provisions shall apply thereto notwithstanding the amended provisions of Article 143(4)1.
ADDENDA <Presidential Decree No. 22811, Mar. 31, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
Article 3 (Transitional measures concerning lease period of long-term lease housing excluded from overtaxation of capital gains tax)
| (1) | Notwithstanding the amended provisions of Article 167-3(1)2a (hereinafter referred to as "amended provisions"), in cases of housing which meets all the requirements other than the lease period requirements (hereinafter referred to as "requirements other than the lease period") in accordance with the previous provisions of Article 167-3(1)2a (hereinafter referred to as "previous provisions") before this Decree enters into force, it shall be deemed to meet the lease period requirements on the earlier date between the date when the lease period requirements are met under the previous provisions and the date when the lease period requirements (which shall be calculated from the first lease date after this Decree enters into force) are met under the amended provisions. |
| (2) | In cases of housing which fails to meet the requirements other than the lease period under the previous provisions before this Decree enters into force, the lease period of the housing shall be calculated from the first lease date after it meets all the requirements other than the lease period under the amended provisions after this Decree enters into force. |
ADDENDA <Presidential Decree No. 22950, Jun. 3, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 133 shall enter into force on August 3, 2011.
Article 2 (Applicability concerning scope of retirement income)
The amended provisions of Article 42-2(5) shall apply to taxation deferred accounts transferred on or after the date this Decree enters into force.
Article 3 (Applicability concerning scope of one house for one household)
The amended provisions of Article 154(1) shall apply to houses transferred on or after the date this Decree enters into force.
ADDENDA <Presidential Decree No. 22977, Jun. 24, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 23113, Aug. 30, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 23139, Sep. 15, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 23218, Oct. 14, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply to houses transferred on or after the date this Decree enters into force.
Article 3 (Applicability concerning change of amount of rental housing excluded from overtaxation of capital gains tax)
The amended provisions of Article 167-3(1)2a on a change of the amount of rental housing and the amended provisions of Article 167-3(1)2c shall apply to houses registered as rental housing under Article 6 of the Rental Housing Act on or after the date this Decree enters into force.
ADDENDA <Presidential Decree No. 23356, Dec. 8, 2011>
Article 1 (Enforcement date)
This Decree shall enter into force on December 8, 2011 (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 23588, Feb. 2, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 18(1)11, 207-8 and 207-9 shall enter into force on July 1, 2012, Article 110-3(8) and (9) on August 5, 2012, and Article 133(1) on January 1, 2013.
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall apply to assets transferred after this Decree enters into force. |
Article 3 (Applicability to designation of private organizations eligible for donations)
The amended provisions of Article 80(1)5 shall begin to apply from the portion which designates or re-designates the private organizations eligible for donations for the first time after this Decree enters into force.
Article 4 (Applicability to deduction of overseas educational expenses)
The amended provisions of Article 110-3(4) shall begin to apply from the portion to be paid during the tax period to which the enforcement date of this Decree belongs.
Article 5 (Applicability to deduction of educational expenses for disabled person)
The amended provisions of Article 110-3(8) and (9) shall begin to apply from the portion of expenses to be paid, during the tax period to which August 5, 2012, belongs, to the institutions designated by a local government pursuant to the Act on Welfare Support for Children with Disabilities (including the institutions designated before August 5, 2012 by local governments as prescribed by the Minister of Health and Welfare in favor of disabled person’s development and rehabilitation service).
Article 6 (Applicability to deduction for housing funds)
The amended provisions of the proviso to Article 112(4) shall begin to apply from the portion for repaying the debts incurred for renting houses during the taxable period to which the enforcement date of this Decree belongs.
Article 7 (Applicability to the profit from sale and purchase of land, etc.)
The amended provisions of Article 129(2) shall begin to apply from the portion of the sale and purchase of land, etc. made during the taxable period to which the enforcement date of this Decree belongs.
Article 8 (Applicability to change in criteria for the business operator subject to confirmation of compliant filing)
The amended provisions of the proviso to Article 133(1) shall begin to apply from the portion for which the certificate of confirmation of compliant filing is submitted for the first time after January 1, 2013.
Article 9 (Applicability to additional return and paying tax due to court decision)
The amended provisions of Article 134(4) shall begin to apply from the salary for the period of wrongful dismissal to be received for the first time after this Decree enters into force pursuant to the court’s decision, mediation, etc.
Article 10 (Applicability to favorable tax rate on the house acquired outside of Seoul Metropolitan Area due to education or other unavoidable cause)
The amended provisions of Article 155(8) shall begin to apply from the portion for which the unavoidable cause is resolved after this Decree enters into force.
Article 11 (Applicability to transfer of residential house of the housing lease business operator)
The amended provisions of Articles 155(21)2b and 167-3(5)2b shall further apply to the house reconstruction project or the house redevelopment project for which, at the time this Decree enters into force, six months (where the registration date falls within the six months, referring to the date of registration) has not lapsed from the date of authorization of completion under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents.
Article 12 (Applicability to tax rate on capital gains on the Person who owns three or more houses for one household due to marriage)
The amended provisions of Article 167-3(9) and 167-4(5) shall begin to apply from the portion, the capital gains tax of which is determined or corrected for the first time after November 24, 2011.
Article 13 (Applicability to notification of notice on changes in amount of income due to disposal of income)
The amended provisions of the main sentence of Article 192(1) shall begin to apply from the income to be disposed, through determining or correcting thereof, for the first time after this Decree enters into force.
Article 14 (Applicability to application for return of retirement income tax)
The amended provisions of the proviso to Article 203(5) shall begin to apply from the portion for which a deferred tax report and a detailed payment statement are submitted by a resident to the head of the competent tax office in charge of withholding tax for the first time after this Decree enters into force.
Article 15 (Applicability to notification of detailed payment statement of retirement income)
The amended provisions of Article 203(8) shall begin to apply from the portion which is not withheld or returning any withheld tax for the first time after this Decree enters into force.
Article 16 (Applicability to the deadline for reporting failure/refusal of issuance of cash receipt and the period of issuance of unregistered cash receipt)
The amended provisions of Article 210-3(7), (8) and (10) shall begin to apply from the portion which a business operator supplies goods or services for the first time after this Decree enters into force.
Article 17 (Transitional measures concerning simplified tax withholding table for wage and salary income)
With respect to the income generated after January 1, 2012, where there is any tax withheld pursuant to the previous Appendix 2, any excessive tax amount calculated by subtracting the aggregate tax amount obtained after applying the amended provisions of Appendix 2 from the aggregate withheld tax amount concerned may be withheld after this Decree enters into force by a withholding agent for him or her to deduct it from the income tax to be paid.
ADDENDA <Presidential Decree No. 23723, Apr. 13, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 27(4) shall enter into force on April 15, 2012.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
ADDENDA <Presidential Decree No. 23887, Jun. 29, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Decree shall apply from the portion first transferred after this Decree enters into force.
ADDENDA <Presidential Decree No. 23964, Jul. 20, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on July 22, 2012.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 23987, Jul. 24, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on July 26, 2012.
Articles 2 through 4 Omitted.
Article 5 Omitted.
Article 6 Omitted.
ADDENDA <Presidential Decree No. 24017, Aug. 3, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on August 5, 2012.
Articles 2 through 4 Omitted.
Article 5 Omitted.
Article 6 Omitted.
ADDENDA <Presidential Decree No. 24076, Aug. 31, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on September 2, 2012. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 24104, Sep. 14, 2012>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning simplified tax withholding table for wage and salary income)
This Decree shall begin to apply from the portion of income to be paid after this Decree enters into force.
Article 3 (Transitional measures concerning deduction of excessively collected withholding tax pursuant to simplified tax withholding table for wage and salary income)
| (1) | Where an amount of tax is withheld on the income generated after January 1, 2012 pursuant to the previous Appendix 2, a withholding agent concerned may deduct the excessively collected tax (hereafter referred to as "excessively collected tax" in this Article), calculated by deducting the sum of tax calculated by applying the amended provisions of Appendix 2 from the sum of relevant withholding tax, from the amount of income tax to be withheld after enforcement of this Decree (limited only to the amount of withholding tax on the wage and salary income). |
| (2) | Upon applying paragraph (1), where the due date for payment under Article 128 of the Act tax withheld by a withholding agent pursuant to the previous Appendix 2 has not yet arrived, the withholding agent may refund the excessively collected tax concerned to the relevant wage and salary incomer earner before the withholding tax concerned is paid. In this case, if the amount of excessively collected tax exceeds the amount of withholding tax to be paid, the refund shall be made within the limit of the tax to be paid, and the remaining excessively collected tax may be deducted from the income tax to be withheld after this Decree enters into force (limited only to the amount of withholding tax on wage and salary income). |
ADDENDA <Presidential Decree No. 24315, Jan. 16, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 24356, Feb. 15, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Articles 208-2(5), 211(7) through (10) and 212(5) shall enter into force on April 1, 2013, Article 157(4)1 and 2 (limited to the portion extending the scope of major shareholders) on July 1, 2013, Articles 51(8), 133(1), 143(4), 181-2 and 208(5) on January 1, 2014, and Article 22-2(3) on January 1, 2015.
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall apply to assets transferred after this Decree enters into force. |
Article 3 (Applicability to distinction of the groups deemed resident or nonresident)
The amended provisions of Article 3-2 shall begin to apply from the taxable period to which the enforcement date of this Decree belongs.
Article 4 (Applicability to interest income from state bonds)
The amended provisions of Article 22-2(3) shall begin to apply from the bond to be issued after January 1, 2015.
Article 5 (Applicability to profit margins on savings insurance)
The amended provisions of Article 25 shall begin to apply from the portion for which an agreement is to be concluded after this Decree enters into force; provided, the amended provisions of Article 25(3)3 shall begin to apply from the portion to be changed after this Decree enters into force.
Article 6 (Applicability to calculation of public pension income)
The amended provisions of Article 40 shall begin to apply from the portion of public pension income to be paid after this Decree enters into force.
Article 7 (Applicability to pension account)
| (1) | The amended provisions of Article 40-2(1) shall begin to apply from the portion of pension account to be subscribed during the taxable period to which the enforcement date of this Decree belongs. |
| (2) | The amended provisions of Article 40-2(2) shall begin to apply from the portion to be paid during the taxable period to which the enforcement date of this Decree belongs. |
| (3) | The amended provisions of Article 40-2(3)1, 2 and 40-2(6) shall begin to apply from the portion of the pension the payment of which is initiated or pension account is early terminated after this Decree enters into force. |
Article 8 (Applicability to withdrawal of pension account)
| (1) | The amended provisions of Article 40-2(3)3, (4) and (5) and Article 42 shall begin to apply from the portion to be withdrawn during the taxable period to which the enforcement date of this Decree belongs. |
| (2) | The amended provisions of Article 40-3 shall begin to apply from the portion to be withdrawn after this Decree enters into force. |
Article 9 (Applicability to transferring money into pension account)
The amended provisions of Article 40-4 shall begin to apply from the portion of pension account to be transferred after this Decree enters into force.
Article 10 (Applicability to scope of retirement income)
The amended provisions of Article 42-2(1)1, 2 and (2)3 shall begin to apply from the portion of income generated after this Decree enters into force.
Article 11 (Applicability to special case concerning determination of retirement)
The amended provisions of Article 43(2) shall begin to apply from the portion of retirement income the interim payment of which is made after this Decree enters into force.
Article 12 (Applicability to calculation of amount of gross income of the forestry)
The amended provisions of Article 51(8) shall begin to apply from the portion to be transferred after January 1, 2014.
Article 13 (Applicability concerning calculation of necessary expenses for business income)
The amended provisions of Article 55(1)19 shall begin to apply from the portion to be reported after this Decree enters into force.
Article 14 (Applicability concerning years of continuous service)
The amended provisions of Article 105(3) shall begin to apply from the portion of income generated after this Decree enters into force.
Article 15 (Applicability to deduction of interest expenses for mortgage-backed retirement pension)
The amended provisions of Article 108-3(1)1 shall begin to apply from the portion equivalent to the amount of interest expenses incurred during the taxable period to which the enforcement date of this Decree belongs.
Article 16 (Applicability to deduction of educational expenses)
The amended provisions of Article 110-3(1) shall begin to apply from the portion to be paid during the taxable period to which the enforcement date of this Decree belongs.
Article 17 (Applicability to submission of certificate of confirmation of compliant filing)
The amended provisions of Article 133(1) shall begin to apply from the portion for which a certificate of confirmation of compliant filing is submitted with respect to the income generated during the taxable period beginning after January 1, 2014.
Article 18 (Applicability to determination and revision based on estimation)
The amended provisions of Article 143(4) shall begin to apply from the portion to be determined and revised based on estimation with respect to the income generated during the taxable period beginning after January 1, 2014.
Article 19 (Applicability to form for the detailed statement on expenditure of major expenses)
The amended provisions of Article 143(9) shall begin to apply from the portion to be reported after this Decree enters into force.
Article 20 (Applicability to inherited house subject to application of special cases concerning one house for one household)
The amended provisions of Articles 155(2), 156-2(6) and (7) shall begin to apply from the portion to be acquired and transferred after this Decree enters into force.
Article 21 (Applicability to report and payment pursuant to exclusion of application of special cases concerning one house for one household)
The amended provisions of Articles 155(12), (18), (21), 156-2(13) and 167-3(5) shall begin to apply from the portion for which an obligation to report thereof occurs after this Decree enters into force.
Article 22 (Applicability to determination of major shareholders subject to tax on gains from transfer of stocks)
| (1) | The amended provisions of Article 157(4)1 (limited only to the portion concerning the scope of specially related persons) shall begin to apply from the portion to be transferred after this Decree enters into force. |
| (2) | The amended provisions of Article 157(4)1 and 2 (limited only to the portion extending the scope of major shareholders who are subject to the tax on gains from transfer of stocks) shall begin to apply from the portion to be transferred after the date of termination of the business year to which July 1, 2013, belongs. |
| (3) | The amended provisions of Article 157(8) shall begin to apply from the portion of corporation to be divided after this Decree enters into force. |
| (4) | The amended provisions of Article 157(9) shall begin to apply from the portion of stocks, etc. rented after this Decree enters into force; provided, with respect to the stocks, etc. rented before enforcement of this Decree and failed to be returned until the date immediately preceeding the date of enforcement of this Decree, the amended provisions of Article 157(9) shall apply after the date of termination of the business year to which the enforcement date of this Decree belongs. |
| (5) | The amended provisions of Article 157(10) shall begin to apply from the portion of acquiring the collective investment securities of a private offering collective investment scheme; provided, with respect to the collective investment securities of a private offering collective investment scheme acquired before this Decree enters into force, the said amended provisions shall begin to apply after the date of termination of the business year to which the enforcement date of this Decree belongs. |
Article 23 (Applicability to change of method of appraising acquisition value of the right of acquisition of new stocks)
The amended provisions of Article 176-2(3) shall begin to apply from the portion of transferring the right of acquisition of new stocks after this Decree enters into force.
Article 24 (Applicability concerning calculation of tax base and tax amount upon imposing global income tax)
The amended provisions of Article 181-2 shall begin to apply from the taxable period beginning after January 2014.
Article 25 (Applicability to special cases on timing for collecting withholding tax from interest income)
The amended provisions of subparagraph 1 of Article 190 shall begin to apply from the portion to be issued after this Decree enters into force.
Article 26 (Applicability to collection of withholding taxes on bonds)
The amended provisions of Article 193-2(6) shall begin to apply from the portion to be sold after this Decree enters into force.
Article 27 (Applicability to collection of withholding tax on deferred retirement income)
The amended provisions of Article 202-2(2) and (3) shall begin to apply from the portion of retirement income, which is generated during the taxable period to which the enforcement date of this Decree belongs, to be received as a non-pension withdrawal.
Article 28 (Applicability to preparing and retaining records)
The amended provisions of Article 208(5) shall begin to apply from the portion for which a record is kept and prepared with respect to the income to be generated during the taxable period beginning after January 1, 2014.
Article 29 (Applicability to issuance and transmission of electronic receipt)
The amended provisions of Articles 208-2(5), 211(7) through (10) and 212(5) shall begin to apply from the portion to be transacted after April 1, 2014.
Article 30 (Applicability to submission of detailed statements of payment)
The amended provisions of Article 213(3)3 shall begin to apply from the portion of interest income to be paid during the taxable period to which the enforcement date of this Decree belongs.
Article 31 (Applicability to special cases of duty to submit detailed statements of payment of nonresidents' domestic source income)
The amended provisions of Article 216-2(1) shall begin to apply from the portion for which the due date of submission thereof arrives after this Decree enters into force.
Article 32 (Applicability to sample survey on amount of donation)
The amended provisions of Article 226(2) and (3) shall begin to apply from the portion of amount to be donated during the taxable period to which the enforcement date of this Decree belongs.
Article 33 (Applicability to special cases of the penalty tax for failure to issue cash receipts)
The amended provisions of Article 19 of the proviso to Enforcement Decree of Income Tax Act, Presidential Decree No. 15969 (including the portions partially amended pursuant to Enforcement Decree of Income Tax Act, Presidential Decree No. 17456; Enforcement Decree of Income Tax Act, Presidential Decree No. 19327; and Enforcement Decree of Income Tax Act, Presidential Decree No. 22580) shall begin to apply from the portion transacted after January 1, 2013.
Article 34 (Transitional measures concerning interest income from state bonds)
With respect to the bond issued before January 1, 2015, the previous provisions shall apply thereto notwithstanding the amended provisions of Article 22-2(3).
Article 35 (Transitional measures concerning profit margins on savings insurance)
With respect to the portion of agreement concluded before enforcement of this Decree, the previous provisions shall apply thereto notwithstanding the amended provisions of Article 25(1), (2) and (3) (excluding the portion of amended provisions of paragraph (3)3).
Article 36 (Transitional measures concerning public pension income)
With respect to the payment of a public pension income which was begun before enforcement of this Decree pursuant to the previous provisions, the previous provisions of Article 40-3 shall apply thereto notwithstanding the amended provisions of Article 40.
Article 37 (Transitional measures concerning timing of deferred retirement income)
Where a retirement income, the tax imposition on which was deferred pursuant to the previous provisions of Articles 42-2(1)6, 42-2(5), 50(2), 105(3) and 115, is received after this Decree enters into force as a non-pension withdrawal, the previous provisions shall apply thereto notwithstanding the amended provisions.
Article 38 (Transitional measures concerning timing of receipt from individual pension savings)
With respect to the interest income generated before this Decree enters into force from individual pension savings which is subject to the income tax pursuant to Article 86(2) of the Restriction of Special Taxation Act, the previous provisions shall apply thereto notwithstanding the amended provisions of subparagraph 4b of Article 45.
Article 39 (Transitional measures concerning retirement insurance)
Where a group retirement insurance, a retirement insurance or a trust entrusted with retirement lump sum that was contracted before this Decree enters into force (hereafter referred to as "retirement insurance, etc." in this Article) generates its management profits and where the retirement insurance, etc. is provided as a security or reverted to users, the previous provisions shall apply thereto notwithstanding the amended provisions of Article 51 and 55.
Article 40 (Transitional measures concerning the amount converted to retirement allowances)
With respect to an amount appropriated, before this Decree enters into force, for the amount to be converted to retirement allowances pursuant to the National Pension Act, the previous provisions shall apply thereto notwithstanding the amended provisions of Article 57(3).
Article 41 (Transitional measures concerning special cases on timing of collecting withholding tax on interest income)
With respect to the bills and short-term electronic bonds issued before this Decree enters into force, the previous provisions shall apply thereto notwithstanding the amended provisions of subparagraph 1 of Article 190.
ADDENDA <Presidential Decree No. 24441, Mar. 23, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 24574, Jun. 11, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 210-3(1)4, Appendix 3-2 and 3-3 shall enter into force on Oct 1, 2013, and the amended provisions of Article 133(1) shall enter into force on January 1, 2014.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (Applicability to submission of certificate of confirmation of compliant filing)
The amended provisions of Article 133(1) shall begin to apply from the portion of income for which a certificate of confirmation of compliant filing is submitted with respect to the income generated during the taxable period to which the enforcement date pursuant to the proviso to Article 1 of Addenda belongs.
Article 4 (Applicability to registration as issuers of cash receipts)
The amended provisions of Article 210-3(1)4 and Appendix 3-3 (limited to cases of applying in connection with the amended provisions of Article 210-3(1)4 concerning the registration as issuer of cash receipt) shall begin to apply from the portion of supplying goods and services after the enforcement date pursuant to the proviso to Article 1 of Addenda.
Article 5 (Applicability to the business types obliged to issue cash receipts)
The amended provisions of Appendix 3-3 (limited to the case of applying in connection with the Article 210-3(9) which is concerning the business types obliged to issue cash receipts, as a business type added as the one obliged to issue cash receipts pursuant to the amendment provisions of Appendix 3-3) shall begin to apply from the portion of supplying goods and services after January 1, 2014.
ADDENDA <Presidential Decree No. 24638, Jun. 28, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2013. (Proviso Omitted.)
Articles 2 through 15 Omitted.
Article 16 Omitted.
Article 17 Omitted.
ADDENDA <Presidential Decree No. 24640, Jun. 28, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to deduction of education expenses)
The amended provisions of Article 110-3(1)5 shall apply to amounts paid for purchasing books for after-school classes in elementary, secondary, and high schools after this Decree enters into force.
Article 3 (Applicability to scope of majority stockholders)
The amended provisions of Article 157(4) shall apply where stocks, etc. are transferred after this Decree enters into force.
ADDENDA <Presidential Decree No. 24697, Aug. 27, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on August 29, 2013. (Proviso Omitted.)
Articles 2 through 11 Omitted.
Article 12 Omitted.
Article 13 Omitted.
ADDENDUM <Presidential Decree No. 24709, Sep. 9, 2013>
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of subparagraph 4 of Appendix 3-3 shall enter into force on October 1, 2013.
ADDENDA <Presidential Decree No. 24823, Nov. 5, 2013>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2015; provided, the amended provisions of Article 63(2) through (6) shall enter into force on the date of its promulgation.
Article 2 (Applicability to scope of money and other valuables that persons engaging in religious service receive, of honorariums classified as other income)
The amended provisions of Article 41(10) and subparagraph 1d of Article 87 shall apply to income accruing after this Decree enters into force.
Article 3 (Applicability to special provisions concerning useful life of assets for facilities investment invested by business operators)
The amended provisions of Article 63(2) through (6) shall apply to the taxable period pertinent to the enforcement date of the proviso to Article 1 of the Addenda and subsequent taxable periods thereafter.
ADDENDA <Presidential Decree No. 25193, Feb. 21, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 55(1)10-3 shall enter into force on July 22, 2014, and the amended provisions of Articles 9-4, 16(1)2, 38(1)19, and the proviso to Article 81(3) shall enter into force on January 1, 2015.
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall apply to assets transferred after this Decree enters into force. |
Article 3 (Applicability concerning gains on insurance of savings nature)
| (1) | The amended provisions of Article 25(1)3c and e shall apply to insurance contracts executed after this Decree enters into force. |
| (2) | The amended proviso to Article 25(3) shall apply to contracts amended after this Decree enters into force. |
Article 4 (Applicability to scope of dividend income)
The amended provisions of Article 26-3 shall apply to dividends distributed after this Decree enters into force.
Article 5 (Applicability to value of stocks with no face value)
The amended provisions of Article 27(6) shall apply to stocks issued with no face value after this Decree enters into force.
Article 6 (Applicability to scope of conversion of firms)
The amended provisions of Article 27-2 shall apply to firms converted on or after January 31, 2014.
Article 7 (Applicability to special provisions concerning conversion of payments exceeding maximum tax credit for pension accounts into payments for pertinent year)
The amended provisions of Articles 40-2(2) (limited to matters relevant to the amended provisions of Article 118-3) and 118-3 shall apply to applications filed for the conversion of excess payments, etc. on or after May 1, 2014.
Article 8 (Applicability to withdrawal of medical expenses from pension accounts)
The amended provisions of the part other than the subparagraphs of Article 40-2(3), the latter part of the same paragraph, and Article 40-2(7) through (10) shall apply to amounts withdrawn for medical expenses from a pension account after this Decree enters into force.
Article 9 (Applicability to calculation of tax credits for pension accounts)
The amended provisions of Article 40-3(4) (limited to matters for which the filing date of an application for the initiation of pension payment shall be deemed the beginning of the taxable period, if the application for the initiation of pension payment was filed during the taxable period in which the contribution was paid) shall apply where an application for the initiation of pension payment is filed and pension payments are withdrawn on or after May 1, 2014.
Article 10 (Applicability to special provisions concerning judgment on pension payment from pension accounts due to exceptional situation as non-pension payment)
The amended provisions of Article 42(3) shall apply to payments withdrawn after this Decree enters into force from a pension account opened on or after January 1, 2013; provided, the foregoing shall not apply to pension income received upon death from a pension account opened under Article 86-2 of the former Restriction of Special Taxation Act (referring to the Restriction of Special Taxation Act before partially amended by Act No. 11614) before March 1, 2013.
Article 11 (Applicability to calculation of total gains)
The amended provisions of the former part of Article 51(7) shall apply to final returns filed after this Decree enters into force.
Article 12 (Applicability to special provisions concerning useful life)
The amended provisions of Article 63-2(1)1 shall apply to applications filed for approval for a change of useful life after this Decree enters into force.
Article 13 (Applicability to scope of designated donations)
| (1) | The amended provisions of Article 80(1)5a,c, and g and Article 80(6) shall apply where a private organization is designated or re-designated as a private organization eligible for donations after this Decree enters into force. |
| (2) | The amended provisions of Article 80(1)5f shall apply to funds collected or utilized during the taxable period in which this Decree enters into force and subsequent taxable periods thereafter. |
| (3) | The amended provisions of Article 80(2) shall apply where the designation of a private organization eligible for donations is revoked after this Decree enters into force. |
Article 14 (Applicability to calculation of donations)
| (1) | The amended proviso to Article 81(3) shall apply to donations offered on or after January 1, 2015. |
| (2) | The amended provisions of Article 81(7) shall apply to amounts additionally collected after this Decree enters into force from a person to whom a tax credit for a donation has been given under Article 80(1)3. |
Article 15 (Applicability to method for settlement of tax amount on pension accounts upon death)
The amended provisions of Article 100-2(4) shall apply where a tax amount is settled after this Decree enters into force.
Article 16 (Applicability to deduction of housing loans)
The amended provisions of the latter part of Article 112(4)1a, the latter part of Article 112(4)2a, and Article 112(5) shall apply to loans lent after this Decree enters into force.
Article 17 (Applicability to special provisions concerning calculation of tax on excess repayment from workplace mutual-aid association)
The amended provisions of Article 120 shall apply to installments paid after this Decree enters into force.
Article 18 (Applicability to submission of certificate of compliant filing)
The amended provisions of Article 133(5) shall apply to returns filed on the income of the taxable period in which this Decree enters into force and subsequent taxable periods thereafter.
Article 19 (Applicability to special provisions concerning calculation of necessary expenses of capital gains)
The amended provisions of Article 163-2(3) shall apply to inherited assets transferred on or after January 1, 2014.
Article 20 (Applicability to scope of land appurtenant to houses owned for short period)
The amended provisions of Article 167-5 shall apply to land transferred on or after January 1, 2014.
Article 21 (Applicability to determination of tax base and tax amount on capital gains)
The amended provisions of Article 176(5) shall apply where the notice that a tax base and a tax amount have been determined or are to be determined is given after this Decree enters into force.
Article 22 (Applicability to obligation to prepare and retain detailed statement of issuing receipts of donations)
The amended provisions of Article 208-3(1)1 shall apply to donations received after this Decree enters into force.
Article 23 (Applicability to simplified tax withholding table for wage and salary income)
The amended provisions of Appendix 2 shall apply to incomes paid after this Decree enters into force.
Article 24 (Applicability to types of business serving consumers)
The amended provisions of Appendix 3-2 shall apply to goods or services supplied or provided after this Decree enters into force.
Article 25 (Applicability to types of business subject to obligation to issue cash receipts)
The amended provisions of Appendix 3-3 shall apply to goods or services supplied or provided after this Decree enters into force.
Article 26 (Transitional measures concerning calculation of donations)
Notwithstanding the amended provisions of Article 81(7), the former provisions shall apply to donations paid, as referred to Article 80(1)3, before January 1, 2014, where such donations are deducted from the amount of global income or are included in necessary expenses.
ADDENDA <Presidential Decree No. 25249, Mar. 11, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 25522, Jul. 28, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on July 29, 2014.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 25523, Jul. 28, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on July 29, 2014.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 25641, Sep. 26, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on October 1, 2014.
Article 2 (Applicability to special provisions concerning useful life and depreciation rates for depreciation of assets for facilities Investment of small and medium enterprises)
| (1) | The amended provisions of Article 63(5) and (6) shall apply to assets for facilities investment acquired by a small or medium enterprise defined in Article 2 of the Enforcement Decree of the Restriction of Special Taxation Act, after this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Article 63(5) and (6), the former provisions shall apply to assets for facilities investment acquired by a business operator from September 1, 2013 to March 31, 2014. |
ADDENDA <Presidential Decree No. 25751, Nov. 19, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of a Presidential Decree, promulgated before this Decree enters into force, but the date they are to enter into force, has not yet arrived, among the Presidential Decrees amended under Article 5 of the Addenda, shall enter into force on the date the relevant Presidential Decree enters into force, respectively.
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 25945, Dec. 30, 2014>
Article 1 (Enforcement date)
This Decree shall enter into force on the date the merger is registered under Article 4(6) of the Addenda to the Korea Development Bank Act (Act No. 12663).
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 26067, Feb. 3, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 3-3 of Appendix (limited to cases falling under Article 162-3(4) of the Act as business operators obliged to register as a cash receipt merchant) shall enter into force on May 1, 2015; the amended provisions of Articles 43(2)2, 159-2, 161-2, 167-9, 173(2)4, 178-2(3) through (5), 211(8), and 225-2 on January 1, 2016; and the amended provisions of Articles 20(2) and 122-2 on January 1, 2017.
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall begin to apply from the first transfer made after this Decree enters into force. |
Article 3 (Applicability to requirements for withdrawal for purpose of medical treatment or due to inevitable circumstances)
| (1) | The amended provisions of Article 20-2(1), (3), and (4) shall begin to apply from the withdrawals made during the taxable period in which this Decree enters into force and subsequent taxable periods. |
| (2) | The amended provisions of Article 20-2(2) shall begin to apply from withdrawals made after this Decree enters into force. |
Article 4 (Applicability to calculation of tax on excess amount of repayment by workplace mutual-aid association)
The amended provisions of Article 26(2), subparagraph 9 of Article 45, Article 120, and subparagraph 1-4 of Article 190 shall begin to apply from the repayments paid in installments by a workplace mutual-aid association after this Decree enters into force.
Article 5 (Applicability to scope of changes of organizational structure)
The amended provisions of Article 27-2 shall begin to apply from decisions or corrections made after this Decree enters into force.
Article 6 (Applicability to scope of wage and salary income)
The amended provisions of Article 38(2) shall begin to apply from the portions reserved after this Decree enters into force.
Article 7 (Applicability to pension accounts)
| (1) | The amended provisions of Article 40-2(2)2 and (6) shall begin to apply where the date it is agreed to commence the receipt of pension becomes due or where an application is filed for initiating the receipt of pension or for terminating a pension account, after this Decree enters into force. |
| (2) | The amended provisions of Article 40-2(3) shall begin to apply from withdrawals made during the taxable period in which this Decree enters into force and subsequent taxable periods. |
Article 8 (Applicability to special cases concerning determination of retirement)
| (1) | The amended provisions of Article 43(1)2 shall begin to apply where a person is transferred to another corporation after this Decree enters into force. |
| (2) | The amended provisions of Article 43(2)2 shall begin to apply where an interim payment for retirement income is paid on or after January 1, 2016. |
Article 9 (Applicability to payment of small amounts for expenses for advertising and publicity)
The amended provisions of Article 55(1)25 shall begin to apply from expenses paid during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 10 (Applicability to calculation of necessary expenses for business income)
The amended provisions of Article 55(1)27 shall begin to apply from expenses paid during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 11 (Applicability to reporting of depreciation methods)
The amended provisions of Article 64(1)3 and subparagraph 3 of Article 66 shall begin to apply from waste landfill facilities acquired after this Decree enters into force.
Article 12 (Applicability to change of depreciation methods)
The amended provisions of Article 65(2) and (3) shall begin to apply from applications filed for changing a depreciation method during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 13 (Applicability to submission of statements of income of private organizations eligible for donations)
The amended provisions of Article 80(5) shall begin to apply from statements of income submitted after this Decree enters into force.
Article 14 (Applicability to tax credits for taxes paid in foreign countries)
The amended provisions of Article 117(4) shall begin to apply from applications filed on or after January 1, 2015, but shall also apply where a person received the notice of determination from a foreign country on or before December 31, 2014 and 45 days have not passed since the date the person received the notice of determination as at December 31, 2014.
Article 15 (Applicability to determination and rectification of estimation)
The amended provisions of Article 176-2(1)2 and (3)2 shall begin to apply from appraisals conducted after this Decree enters into force.
Article 16 (Applicability to calculation of market value of overseas assets)
The amended provisions of Article 178-3(2)1 shall begin to apply from appraisals conducted after this Decree enters into force.
Article 17 (Applicability to special cases concerning payment of withholding taxes)
The amended provisions of Article 186(1) shall begin to apply from applications filed after this Decree enters into force.
Article 18 (Applicability to procedures for refund of retirement income tax)
The amended provisions of Article 202-3 shall begin to apply from applications filed for refund after this Decree enters into force.
Article 19 (Applicability to payment of subsidies to taxpayers associations)
The amended provisions of Article 221(2) shall begin to apply from applications filed for the payment of a subsidy after this Decree enters into force.
Article 20 (Applicability to simplified tax rate table)
The amended provisions of Appendix 3 shall begin to apply from income paid after this Decree enters into force.
Article 21 (Applicability to submission of evidentiary documents for income deduction and tax credits)
The amended provisions of Appendix 4 shall begin to apply from documents submitted for income deduction and tax credits after this Decree enters into force.
Article 22 (Special cases concerning tax credits for taxes paid in foreign countries)
| (1) | With respect to the amount left over without being deducted under Article 57(2) of the Act until the taxable period immediately preceding the taxable year that commences on or after January 1, 2015, in excess of limits on deduction, out of the foreign income tax amounts paid or to be paid to foreign governments, by applying the method of computing it in a lump sum without separating it for each country under the former provisions of Article 117(7) before this Decree enters into force, the amount shall be apportioned to each country in proportion to the ratio chosen from among the following ratios at the time of computing the tax base and tax amount for the taxable period in which this Decree enters into force, and then the amended provisions of Article 117(7) shall apply to such cases: |
| 1. | The ratio of the overseas source income from each country to the sum of overseas source income from all countries during the taxable period in which this Decree enters into force. In such cases, if the overseas source income from a country is nil or a negative figure, the overseas source income from the country shall be deemed nill; |
| 2. | The ratio of the foreign income tax amount for each country to the sum of the foreign income tax amounts for all countries during the taxable period in which this Decree enters into force. In such cases, if the foreign income tax amount for a certain country is nil or a negative figure, the foreign income tax amount for the country shall be deemed nill. |
| (2) | If the overseas source income and the foreign income tax amount are all nill or negative figures and thus it is impracticable to apportion them to each country in accordance with the latter part of paragraph (1)1 and the latter part of paragraph (1)2 in applying paragraph (1), the amount left over without being deducted in accordance with Article 57(2) of the Act shall be apportioned to each country in proportion to the applicable ratio in the initial taxable period in which any of the ratios specified in paragraph (1) emerges, and then the amended provisions of Article 117(7) shall apply to such cases. |
Article 23 (Transitional measures concerning calculation of tax amount on excess amounts of repayment by workplace mutual-aid associations)
Notwithstanding the amended provisions of subparagraph 9 of Article 45, Article 120(1), and subparagraph 1-4 of Article 190, the former provisions shall apply to the time to recognize the receipt of gains exceeding payments of a worker to which the repayment of a workplace mutual-aid association has been paid in installments before this Decree enters into force, the method of computing the tax amount, and the time to withhold the tax.
ADDENDA <Presidential Decree No. 26302, Jun. 1, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on June 4, 2015.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 26344, Jun. 30, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2015.
Article 2 (Applicability to selection of method for withholding tax from wage and salary income)
The amended proviso to Article 194(1) and the amended provisions of Article 194(3) and (4) shall begin to apply from persons who apply for changing the method of withholding the tax from the income paid after this Decree enters into force.
Article 3 (Applicability to simplified tax withholding table for wage and salary income)
The amended provisions of Appendix 2 shall begin to apply from income paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 26369, Jun. 30, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2015.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 26416, Jul. 20, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on July 21, 2015.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 26600, Oct. 23, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on October 25, 2015. (Proviso Omitted.)
Articles 2 through 8 Omitted.
Article 9 Omitted.
ADDENDA <Presidential Decree No. 26659, Nov. 20, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on January 25, 2016. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 26763, Dec. 28, 2015>
Article 1 (Enforcement date)
This Decree shall enter into force on December 29, 2015.
Articles 2 through 8 Omitted.
Article 9 Omitted.
Article 10 Omitted.
ADDENDUM <Presidential Decree No. 26844, Dec. 31, 2015>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 26922, Jan. 22, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on January 25, 2016.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 26982, Feb. 17, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided the amended provisions of Articles 26-2(1), 78-3(5) (limited to business operators subject to confirmation of compliant filing under Article 70-2(1) of the Act (based on gross revenue for the immediately preceding taxable period)), 157(4) (excluding where stocks, etc. of any corporation other than listed corporations under the Financial Investment Services and Capital Markets Act are involved), and 157(5) shall enter into force on April 1, 2016; the amended provisions of Article 40-4 on June 1, 2016; the amended provisions of Article 207-10 and Appendix 3-3 (limited to the types of business subject to issuance of cash receipts under Article 162-3(4) of the Act) on July 1, 2016; the amended provisions of Article 55(1)7-2 (limited to business operators who are not subject to confirmation of compliant filing (based on gross revenue for the taxable period immediately preceding the taxable period in which a sale takes place), among persons subject to double-entry bookkeeping), Article 78-3(1), (2), and (4) through (11) (limited to business operators who are not subject to confirmation of compliant filing (based on gross revenue for the immediately preceding taxable period), among persons subject to double-entry bookkeeping), Article 78-3(3) (limited to business operators who are not subject to confirmation of compliant filing (based on gross revenue for the taxable period immediately preceding the taxable period in which acquisition takes place), among persons subject to double-entry bookkeeping), Article 157(4) (limited to where stocks, etc. of any corporation other than listed corporations under the Financial Investment Services and Capital Markets Act are involved), Article 211(7) through (12), and Article 211-2 on January 1, 2017; and the amended provisions of Articles 19, 41(14) and (15), and 42-2(4)4, subparagraph 3 of Article 87, and Articles 186(1) and (2), 202(4), and 202-4 shall enter into force on January 1, 2018.
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall begin to apply from transfers made after this Decree enters into force. |
Article 3 (Applicability to calculation of period of residence)
The amended provisions of Article 4(4) shall begin to apply from returns filed after this Decree enters into force.
Article 4 (Applicability to scope of collective investment schemes)
The amended provisions of Article 26-2(1) shall also apply to profits from the sale of collective investment property, accruing before this Decree enters into force, but settled and distributed after this Decree enters into force.
Article 5 (Applicability to calculation of deemed dividends)
The amended provisions of Article 27(1)1b shall begin to apply from income paid after this Decree enters into force.
Article 6 (Applicability to transferring money to pension accounts)
The amended provisions of Article 40-4 shall begin to apply from transfers (including where the receipt of pension has commenced) made on or after June 1, 2016.
Article 7 (Applicability to special cases concerning exclusion of expenses incurred in relation to business-use passenger vehicles from necessary expenses)
| (1) | The amended provisions of Article 55(1)7-2 shall begin to apply from sales made during the taxable period to which the enforcement dates specified in the main sentence of Article 1 of the Addenda belongs, in cases of business operators subject to confirmation of compliant filing under Article 70-2(1) of the Act (based on gross revenue for the taxable period immediately preceding the taxable period in which relevant sales take place); and shall begin to apply from sales made on or after January 1, 2017 in cases of any business operator other than business operators subject to confirmation of compliant filing, among persons subject to double-entry bookkeeping. |
| (2) | The amended provisions of Article 78-3(1), (2), and (4) through (11) shall begin to apply from the portion included in necessary expenses during the taxable period to which the enforcement dates specified in the main sentence of Article 1 of the Addenda belong, in cases of business operators subject to confirmation of compliant filing under Article 70-2(1) of the Act (based on gross revenue for the immediately preceding taxable period); and shall begin to apply from the portion included in necessary expenses during the taxable period to which January 1, 2017 belongs, in cases of any business operator other than business operators subject to confirmation of compliant filing, among persons subject to double-entry bookkeeping. |
| (3) | The amended provisions of Article 78-3(3) shall begin to apply from passenger vehicles acquired during the taxable period to which the enforcement dates specified in the main sentence of Article 1 of the Addenda belong, in cases of business operators subject to confirmation of compliant filing under Article 70-2(1) of the Act (based on gross revenue for the taxable period immediately preceding the taxable period in which such vehicles are acquired); and shall begin to apply from passenger vehicles acquired on or after January 1, 2017, in cases of any business operator other than business operators subject to confirmation of compliant filing, among persons subject to double-entry bookkeeping. |
Article 8 (Applicability to special cases concerning scope of bonds and withholding tax from interest on bonds of nonresidents)
The amended provisions of Articles 102(4) and (5) and 207-3(3) and (4) shall begin to apply where the tax is withheld from interest income accruing from bonds, etc. after this Decree enters into force.
Article 9 (Applicability to application for special income deductions and special tax credits)
The amended provisions of Articles 113(2) and 198(1) shall begin to apply where evidentiary documents related to special income deductions and special tax credits or a return for income and tax credits of a wage and salary income earner is filed after this Decree enters into force.
Article 10 (Applicability to houses of persons returning to rural area)
The amended proviso to Article 155(7) and the amended provisions of Article 155(10) shall begin to apply from houses acquired by a person returning to a rural area after this Decree enters into force.
Article 11 (Applicability to necessary expenses for transferred assets)
The amended provisions of Article 163(3) shall begin to apply from expenses incurred after this Decree enters into force.
Article 12 (Applicability to flexible tax rate of capital gains tax on derivatives, etc.)
The amended provisions of Article 167-9 shall begin to apply from the portion transferred during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 13 (Applicability to preliminary return on tax base of capital gains)
| (1) | The amended provisions of Article 169(1)2a shall begin to apply from the portion transferred during the taxable period in which this Decree enters into force and subsequent taxable periods. |
| (2) | The amended provisions of Article 169(2) shall also apply where a preliminary return on the tax base of capital gains was filed as at the time this Decree enters into force and the head of the tax office having jurisdiction over the place for tax payment verifies the documents related to the transfer of assets. |
Article 14 (Applicability to final return on tax base of capital gains)
The amended provisions of Article 173(2)4 shall begin to apply from returns filed after this Decree enters into force.
Article 15 (Applicability to application of simplified tax withholding table for wage and salary income)
The amended provisions of Article 194(3) shall begin to apply from returns filed for deductions during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 16 (Applicability to settlement of retirement income tax)
The amended provisions of Article 203(3) shall begin to apply from retirement income settled according to the withholding receipt submitted with regard to the retirement income after this Decree enters into force.
Article 17 (Applicability to period for compulsory issuance of electronic invoices)
The amended provisions of Article 211-2 shall begin to apply from goods or services provided on after January 1, 2017.
Article 18 (Applicability to types of business obligated to issue cash receipts)
The amended provisions of Appendix 3-3 (limited to types of business subject to compulsory issuance of cash receipts, which are added under the amended provisions of Appendix 3-3 and shall apply in relation to Article 210-3(9)) shall begin to apply from goods or services provided on or after July 1, 2016.
Article 19 (Applicability to business use ratio of business-use passenger vehicles)
| (1) | The business use ratio under the amended provisions of Article 78-3(4) for the period from January 1, 2016 to March 31, 2016 shall be deemed the same as the business use ratio calculated for the period from April 1, 2016 to the end of the relevant taxable period according to the same paragraph; provided, the business use ratio may be calculated by aggregating mileages, if a business operator proves business use by a separate record. |
| (2) | Where a business-use passenger vehicle is disposed of or a lease agreement thereof terminates, on or before March 31, 2016, the business use ratio until the business-use passenger vehicle is disposed of or the lease agreement thereof terminates from January 1, 2016 shall be deemed 100/100. |
Article 20 (Transitional measures concerning money transfer to pension account)
Notwithstanding the amended provisions of Article 40-4, the former provisions shall apply to full transfer (including where the receipt of pension has commenced) of the amount in a pension account to another pension account before June 1, 2016.
Article 21 (Transitional measures concerning special cases concerning scope of bonds and withholding tax from interest on bonds of nonresidents)
Notwithstanding the amended provisions of Articles 102(4) and (5) and 207-3(3) and (4), the former provisions shall apply to the interest income that have accrued from bonds, etc. before this Decree enters into force.
Article 22 (Transitional measures concerning houses of persons returning to rural area)
Notwithstanding the amended proviso to Article 155(7) and the amended provisions of Article 155(10), the former provisions shall apply where a person returning to a rural area acquired a house before this Decree enters into force.
Article 23 (Transitional measures concerning scope of securities depository receipts and majority stockholders)
Notwithstanding the amended provisions of Article 157(4) and (5), the former provisions shall apply to the scope of majority stockholders where stocks, etc. are transferred before this Decree enters into force.
Article 24 (Transitional measures concerning necessary expenses for transferred assets)
Notwithstanding the amended provisions of Article 163(3), the former provisions shall apply to capital expenditure, etc. before this Decree enters into force.
Article 25 (Transitional measures concerning transfer of tangible assets transferred along with land and buildings)
Notwithstanding the amended provisions of Article 166(6), the former provisions shall apply where a ship or any machine or device is transferred along with land or a building before this Decree enters into force.
Article 26 (Transitional measures concerning settlement of retirement income tax)
Notwithstanding the amended provisions of Article 203(3), the former provisions shall apply where income tax on retirement income is settled and withheld before this Decree enters into force.
Article 27 (Transitional measures concerning period of compulsory issuance of electronic invoices)
Notwithstanding the amended provisions of Articles 211(7) through (12) and 211-2, the former provisions shall apply to goods or services provided on or before December 31, 2016.
Article 28 (Transitional measures concerning types of business subject to compulsory issuance of cash receipts)
Notwithstanding the amended provisions of Appendix 3-3 (limited to the types of business subject to compulsory issuance of cash receipts, which are added under the amended provisions of Appendix 3-3 and shall apply in relation to Article 210-3(9)), the former provisions shall apply to goods or services provided on or after July 1, 2016.
ADDENDA <Presidential Decree No. 27074, Mar. 31, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 157(4)1 shall enter into force on April 1, 2016.
Article 2 (Transitional measures concerning houses of persons returning torural area)
Notwithstanding the amended provisions of Article 155(10)4b and (12), the former provisions shall apply where a person who returned to a rural area acquired a house before this Decree enters into force.
Article 3 (Transitional measures concerning scope of securities depository receipts and majority stockholders)
Notwithstanding the amended provisions of Article 157(4)1, the former provisions shall apply where stocks are transferred before the enforcement date specified in the proviso to Article 1 of the Addenda.
ADDENDA <Presidential Decree No. 27245, Jun. 21, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on June 23, 2016.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Presidential Decree No. 27444, Aug. 11, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on August 12, 2016.
Articles 2 through 6 Omitted.
Article 7 Omitted.
Article 8 Omitted.
ADDENDA <Presidential Decree No. 27471, Aug. 31, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on September 1, 2016.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 27472, Aug. 31, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on September 1, 2016.
Articles 2 through 5 Omitted.
Article 6 Omitted.
Article 7 Omitted.
ADDENDA <Presidential Decree No. 27506, Sep. 22, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on September 23, 2016.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 27617, Nov. 29, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on November 30, 2016.
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 27653, Dec. 5, 2016>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to submission of evidentiary documents for income deductions and tax credits)
The amended provisions of Article 216-3(1)9 and 10 shall begin to apply where evidentiary documents are submitted for income deductions for the income accruing during the taxable period in which this Decree enters into force.
ADDENDA <Presidential Decree No. 27793, Jan. 17, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on January 20, 2017.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 27829, Feb. 3, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 55(6) shall enter into force on February 4, 2017; the amended provisions of Articles 159-2(1) and 201-10(3) on April 1, 2017; the amended provisions of Appendix 3-3 (limited to cases falling under Article 162-3(4) of the Act in connection with the types of business subject to compulsory issuance of cash receipts) on July 1, 2017 (or January 1, 2019 in cases falling subparagraph 5x of Appendix 3-3); and the amended provisions of Section 8 of Chapter III (Articles 178-8 through 178-12) on January 1, 2018.
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall begin to apply from transfers made after this Decree enters into force. |
Article 3 (Applicability to scope of interest income and dividend income)
The amended provisions of Articles 26(5) and 26-3(5) shall begin to apply from contracts made on derivatives after this Decree enters into force.
Article 4 (Applicability to pension accounts)
The amended provisions of the proviso to Article 40-2(3) shall begin to apply from retirement income deposited in pension accounts after this Decree enters into force.
Article 5 (Applicability to calculation of necessary expenses for business income)
The amended provisions of the former part of Article 55(6) shall begin to apply from donations made on or after February 4, 2017.
Article 6 (Applicability to submission of statement of income)
The amended provisions of Article 80(5) shall begin to apply from statements of income submitted after this Decree enters into force.
Article 7 (Applicability to tax credits for taxes paid to foreign countries)
The amended provisions of Article 117(4) shall begin to apply from cases filed on or after January 1, 2017, but shall also apply where the taxpayer received the notice of determination from a foreign government on or before December 31, 2016 and two months have not passed since the taxpayer received the notice of determination as of December 31, 2016.
Article 8 (Applicability to tax credit for educational expenses)
The amended provisions of Article 118-6(9) and (10) shall begin to apply from student loans repaid during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 9 (Applicability to scope of majority stockholders and small and medium enterprises)
The amended provisions of Article 167-8(1)2 shall begin to apply where stocks are transferred during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 10 (Applicability to issuance of written confirmation of income deductions and tax credits)
The amended provisions of Article 201-10(3) shall begin to apply where a written confirmation of income deductions and tax credits for pension insurance premiums, etc. is submitted to a withholding agent on or after April 1, 2017.
Article 11 (Applicability to reporting of business accounts)
The amended provisions of Article 208-5(6) shall begin to apply where a business account is reported after this Decree enters into force.
Article 12 (Applicability to institutions lending house rental loans)
The amended provisions of Appendix 1-2 shall begin to apply where a loan is repaid during the taxable period in which this Decree enters into force and subsequent taxable periods.
Article 13 (Applicability to simplified tax amount table for wage and salary income)
The amended provisions of the Appendix 2 shall apply beginning with the portion withheld after this Decree enters into force.
Article 14 (Applicability to registration as cash receipt merchant and types of business subject to compulsory issuance of cash receipts)
| (1) | The amended provisions of Appendices 3-2 and 3-3 (limited to where the provisions shall apply in connection with Article 210-3(1)4 concerning registration as a cash receipt merchant) shall begin to apply where goods or services are provided after this Decree enters into force. |
| (2) | The amended provisions of Appendix 3-3 (limited to where the provisions shall apply in connection with 210-3(9) concerning types of business subject to compulsory issuance of cash receipts, as added to the amended provisions of Appendix 3-3) shall begin to apply where goods or services are provided on or after July 1, 2017 (or January 1, 2019 in cases falling under subparagraph 5x of Appendix 3-3). |
Article 15 Omitted.
ADDENDA <Presidential Decree No. 27972, Mar. 29, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on March 30, 2017.
Articles 2 through 8 Omitted.
Article 9 Omitted.
Article 10 Omitted.
ADDENDA <Presidential Decree No. 28211, Jul. 26, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, among the Presidential Decrees amended pursuant to Article 8 of the Addenda, the amendment to a Presidential Decree, promulgated before this Decree enters into force, whose enforcement dates have yet to arrive, shall enter into force on the dates the respective Presidential Decrees enter into force.
Articles 2 through 7 Omitted.
Article 8 Omitted.
ADDENDA <Presidential Decree No. 28293, Sep. 19, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to requirements for non-taxation on one house per household)
| (1) | The amended provisions of Article 154(1), (2), and (8)3 shall begin to apply from the houses transferred after this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Article 154(1), (2), and (8)3 and paragraph (1) of this Article, the former provisions shall apply to the following houses: |
| 1. | A house acquired on or before August 2, 2017; |
| 2. | A house in which case it is proved by evidencing documents that a sale and purchase agreement was entered into and down payment was paid on or before August 2, 2017 (limited to where the household to which the resident of the house belongs did not own any house as at the date of payment of the down payment); |
| 3. | A house acquired after August 3, 2017, but transferred to another person before this Decree enters into force. |
ADDENDA <Presidential Decree No. 28440, Nov. 21, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 28511, Dec. 29, 2017>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2018.
Article 2 (General applicability)
This Decree shall begin to apply from the income accruing in the taxable period in which this Decree enters into force and in subsequent taxable periods thereafter.
Article 3 (Applicability to tax credit for educational expenses)
The amended provisions of Articles 118-6(14)3 and 216-3(1)4-3 shall begin to apply from year-end tax settlement for each taxable period after this Decree enters into force.
ADDENDA <Presidential Decree No. 28627, Feb. 9, 2018>
Article 1 (Enforcement date)
This Decree shall enter into force on February 9, 2018.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 28637, Feb. 13, 2018>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the following subparagraphs shall enter into force on the date falling under the following classifications:
| 1. | The amended provisions of subparagraphs 1 and 1-2 of Article 87, Articles 165(4), 167-3, 167-4, 167-9, 167-10, 167-11 and 168-3: April 1, 2018; |
| 2. | The amended provisions of Article 207-10(1): July 1, 2018; |
| 3. | The amended provisions of Articles 80(2)1, 131-2(1), 133(1) (limited to cases where the name of type of business is changed according to the revision of the Korean Standard Industrial Classification), 143(4), 208(5), and Appendices 3 and 3-3: January 1, 2019. |
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning capital gains in this Decree shall begin to apply from transfers made after this Decree enters into force. |
Article 3 (Applicability to scope of Tangible fixed assets for business)
The amended provisions of Article 37-2 shall apply beginning with the income generated during the taxable period to which January 1, 2020 belongs where any tangible fixed asset for business falls under the category of construction machinery under Appendix 1 of the Enforcement Decree of the Construction Machinery Management Act.
Article 4 (Applicability to calculation of necessary expenses at time of transferring tangible fixed assets for business)
The amended provisions of Article 55(1)7-2 shall apply beginning with the asset transferred during the taxable period to which the enforcement date of this Decree belongs.
Article 5 (Applicability to legal fiction of immediate depreciation at time of relocation of place of business)
The amended provisions of Article 67(6)2 shall apply beginning with the relocation of a place of business during the taxable period to which the enforcement date of this Decree belongs.
Article 6 (Applicability to legal fiction of depreciation at time of taxation by estimation)
The amended provisions of Article 68(2) and (3) shall apply beginning with the income which is generated during the taxable period to which the enforcement date of this Decree belongs, and for which an account statement of estimated income is filed or which is determined by estimation and corrected.
Article 7 (Applicability to calculation of business use ratio of relevant business-use passenger vehicle)
The amended provisions of Article 78-3(6) and (11) shall apply beginning with the global income with respect to which a final return on the tax base of global income is filed after this Decree enters into force.
Article 8 (Applicability to adjustment of ratio of necessary expenses for other income)
The amended provisions of subparagraphs 1 and 1-2 of Article 87 shall apply beginning with the income whose date of receipt under Article 50(1)1 and 4 arrives after April 1, 2018.
Article 9 (Applicability to tax credit for insurance premiums)
The amended provisions of Article 118-4(2)6 shall apply beginning with the insurance premiums paid during the taxable period to which the enforcement date of this Decree belongs.
Article 10 (Applicability to tax credit for medical expenses)
The amended provisions of Article 118-5(1)6 shall apply beginning with the beneficiary's pro rata share paid during the taxable period to which the enforcement date of this Decree belongs.
Article 11 (Applicability to Scope of Business Operators subject to External Tax Adjustment)
The amended provisions of Article of Article 131-2(1) shall apply beginning with the income which is generated during the taxable period commenced after January 1, 2019 and is subject to external tax adjustment.
Article 12 (Applicability to submission of certificate of confirmation of compliant filing and report of appointment)
| (1) | The provisions concerning the change of types of business resulting from the revision of the Korean Standard Industrial Classification, among the amended provisions of Article of Article 133(1)2 and 3, shall apply beginning with the income which is generated during the taxable period commenced after January 1, 2019, and for which a certificate of confirmation of compliant is filed. |
| (2) | The amended provisions of Article of Article 133(5) shall apply beginning with the income which is generated during the taxable period to which the enforcement date of this Decree and for which a report is filed. |
Article 13 (Applicability to determination by estimation and correction)
The amended provisions of Article 143(4) shall apply beginning with the income which is generated during the taxable period commencing after January 1, 2019 and is determined by estimation or corrected.
Article 14 (Applicability to calculation of amount of income at time of determination by estimation and correction)
The amended provisions of Article 144(3)4 shall apply beginning with the income generated during the taxable period to which the enforcement date of this Decree belongs, the amount of which is determined by estimation and corrected.
Article 15 (Applicability to Treatment as Submission of Report on Relocated Joint Place of Business, Etc. )
The amended provisions of Article 150(3) and (4) shall apply beginning with an application for registration of business operator or a report of correction of the registration of business operator filed after this Decree enters into force.
Article 16 (Applicability to special cases of non-taxation of general house in case of inheriting house, etc.)
The amended provisions of Articles 155(2) and 156-2(6) and 7 shall apply beginning with the house or association member's relocation right donated after this Decree enters into force.
Article 17 (Applicability to scope of large stockholders of unlisted corporation)
The amended provisions of Articles 157(6) and 157-2 shall apply beginning with the transfer made during the taxable period to which the enforcement date of this Decree belongs.
Article 18 (Applicability to derivatives, etc.)
The amended provisions of Articles 159-2(1)5 and 161-2(5) shall apply beginning with the final return filed during the taxable period to which the enforcement date of this Decree belongs.
Article 19 (Applicability to necessary expenses for capital gains)
The amended provisions of Article 163(3) and the main sentence of that Article (5) shall apply beginning with the transfer made after April 1, 2018; provided, Article 24 of the Addenda of the Partial Amendment to the Enforcement Decree (Presidential Decree No. 26982) of the Income Tax Act shall apply to the expenditure made before February 16, 2016, which belongs to capital expenditure, etc.
Article 20 (Applicability to Additional Report and Payment Following Increase of Compensation Money for Expropriation)
The amended provisions of Articles 173(4) shall apply beginning with the judicial judgment which becomes final and decisive after this Decree enters into force.
Article 21 (Applicability to Scope of Withholding Agents, etc. for Income of Temporary Staffing Agency Workers of Foreign Corporations, Special Procedures therefor, etc.)
The amended provisions of Article 207-10(1)1 shall apply beginning with the return for service paid to a foreign temporary staffing corporation after July 1, 2018.
Article 22 (Applicability to keeping and recording of books)
The amended provisions of Article 208(5) shall apply beginning with the books kept and recorded with respect to the income generated during the taxable period commencing after January 1, 2019.
Article 23 (Applicability to issuance of electronic invoices)
The amended provisions of Article 211-2(2) and (3)2 shall apply beginning with the goods and services provided after July 1, 2019 on the basis of the gross revenue by place of business of the goods and services provided during the taxable period to which the enforcement date of this Decree belongs.
Article 24 (Applicability to submission of evidentiary documents for income deduction and tax credits and administrative guidance therefor)
The amended provisions of Article 216-3(1)6 shall apply beginning with the evidential documents for income deduction issued after this Decree enters into force.
Article 25 (Applicability to simplified tax withholding table for wage and salary income)
The amended provisions of the Appendix 2 shall apply beginning with the portion withheld after this Decree enters into force.
Article 26 (Applicability to type of business serving sonsumers)
The amended provisions of Appendix 3-2 shall apply beginning with the goods or services provided after January 1, 2019.
Article 27 (Applicability to type of business obligated to issue cash receipts)
The amended provisions of Appendix 3-3 shall apply beginning with the goods or services provided after January 1, 2019.
Article 28 (Transitional measure concerning calculation of total amount of income from establishment or leasing easements or superficies)
Notwithstanding the amended provisions of Article 51(3)1, the previous provisions shall apply where the receipt time of other income under Article 50(1)4 arrives before the taxable period to which the enforcement date of this Decree belongs in case of receiving advance rents for the establishment or leasing of easement or superficies.
ADDENDUM <Presidential Decree No. 28946, Jun. 5, 2018>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 29045, Jul. 16, 2018>
Article 1 (Enforcement date)
This Decree shall enter into force on July 17, 2018.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 29242, Oct. 23, 2018>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of Article 159-3 shall enter into force January 1, 2020.
Article 2 (Applicability to requirements for non-taxation on one house per household)
| (1) | The amended provisions of Article 155(1) shall apply beginning with the transfer made after this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Article 155(1) and the paragraph (1) of this Article, the previous provisions shall apply to the following houses: |
| 1. | Where one household owning a previous house acquires a new house (including a right to acquire a new house; hereinafter the same shall apply in this paragraph) in an area subject to adjustment; |
| 2. | Where the fact that one household owning a previous house located in an area subject to adjustment has entered into a sales contract and paid a contract deposit to acquire a new house located in an area subject to adjustment before September 13, 2018 is confirmed through evidential documents. |
Article 3 (Applicability to applicability to special deduction for long-term possession)
The amended provisions of Article 159-3 shall apply beginning with the house transferred after its enforcement date under the proviso to Article 1 of the Addenda.
Article 4 (Applicability to scope of houses falling under at least three houses for one household)
| (1) | The amended provisions of Article 167-3(1)2e shall apply beginning with the house transferred after this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Article 167-3(1)2e, and the paragraph (1) of this Article, the former provisions shall apply to cases falling under any of the following subparagraphs: |
| 1. | Cases of acquiring a house (including a right to acquire a house; hereinafter the same shall apply in this paragraph) before September 13, 2018; |
| 2. | Cases where the fact that one household owning a house has entered into a sale contract and paid a contract deposit to acquire other house before September 13, 2018 is confirmed through evidential documents. |
Article 5 (Applicability to exclusion from imposition of heavy taxation of capital gains tax on household owning two or more houses)
The amended provisions of Articles 167-3(1)11, 167-4(3)5, 167-10(1)11, and 167-11(1)10 shall apply beginning with the houses transferred after August 28, 2018.
ADDENDA <Presidential Decree No. 29523, Feb. 12, 2019>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the following subparagraphs shall enter into force on the date falling under the following classifications:
| 1. | The amended provisions of Articles 159-2(1) and 161-2(1), (2) and (5): April 1, 2019; |
| 2. | The amended provisions of Articles 3-2, 180-2(2), 207-2(1) and (8), 207-8(2) and (3), 217-3 (limited to provisions thereof related to Article 165-3(2) of the Act), 217-4(1) and (2) (limited to provisions related to Article 165-3(2) of the Act), 227(1) (limited to provisions related to Article 176(2) of the Act) and (2), 228(1) and (2) (limited to provisions related to Article 176(2) of the Act), and Appendices 3-3 and 5: January 1, 2020; |
| 3. | The amended provisions of Article 154(5): January 1, 2021. |
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning the capital gains tax in this Decree shall apply beginning with the transfer made after this Decree enters into force. |
Article 3 (Applicability to payment of pension insurance premiums)
The amended provisions of Article 40-2(2)1 shall apply beginning with the payment made during the taxable period to which the enforcement date of this Decree belongs.
Article 4 (Applicability to legal fiction of depreciation at time of taxation by estimation)
The amended provisions of Article 68(2) and (4) shall apply beginning with the income for which an account statement of estimated income amount is submitted or which is determined by estimation or corrected, after this Decree enters into force.
Article 5 (Applicability to tax credit for medical expenses)
The amended provisions of Article 118-5(1)7 shall apply beginning with the medical expenses paid in return for postnatal and recuperative care during the taxable period to which the enforcement date of this Decree belongs.
Article 6 (Applicability to special cases of capital gains tax for house lease business operators)
The amended provisions of Articles 154(1)4, 155(20)2 and 167-3(1)2 (including cases where Article 167-10(1)2 shall apply) shall apply beginning with the lease contract concluded or the existing lease contract renewed, after this Decree enters into force.
Article 7 (Applicability to non-taxation requirements for residential house of house lease business operator)
| (1) | The amended provisions of Articles 154(10)2 and 155(20) (excluding subparagraph 2 thereof) shall apply beginning with the house acquired after this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Articles 154(10)2 and 155(20) (excluding subparagraph 2 thereof), and the paragraph (1) of this Article, the previous provisions shall apply to houses falling under any of the following subparagraphs: |
| 1. | A house in which a house lease business operator is residing at the time this Decree enters into force; |
| 2. | A house with respect to which the fact that the house lease business operator has entered into a sale contract and paid a contract deposit before this Decree enters into force to acquire it as the house for residence is confirmed through evidential documents. |
Article 8 (Applicability to application by person moving abroad for adjusted deduction)
The amended provisions of Article 178(10) shall apply beginning with the domestic stocks, etc. of a person moving abroad transferred after January 1, 2019.
Article 9 (Applicability to types of business obligated to issue cash receipts)
The amended provisions of Appendix 3-3 shall apply beginning with the goods or services provided after January 1, 2020.
Article 10 (Special cases concerning criteria for imposition of administrative fines)
Notwithstanding Appendix 5, Appendix 5-2 shall apply until December 31, 2019.
ADDENDA <Presidential Decree No. 29892, Jun. 25, 2019>
Article 1 (Enforcement date)
This Decree shall enter into force on September 16, 2019. <Proviso Omitted.>
Articles 2 through 8 Omitted.
Article 9 Omitted.
Article 10 Omitted.
ADDENDA <Presidential Decree No. 30285, Dec. 31, 2019>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 30395, Feb. 11, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the following subparagraphs shall enter into force on the date falling under the following classifications:
| 1. | The amended provisions of Article 78-3(4) and (5), the latter part, with the exception of the subparagraphs of Article 117(2), and the attached Tabe 3-3 (excluding matters on title): January, 1, 2021; |
| 2. | The amended provisions of Article 158(7) and Article 171: July 1, 2020; |
| 3. | The amended provisions of Article 154(7)1 and 160(1), subparagraph 1 of Article 167-5 and subparagraph 1 of Article 168-12: January 1, 2020. |
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning the capital gains tax in this Decree shall apply beginning with the transfer made after this Decree enters into force. |
Article 3 (Applicability to determination of and reporting on place for tax payment)
The amended provisions of Article 5(3)1 shall apply beginning with the report on the place for tax payment after this Decree enters into force.
Article 4 (Applicability to scope of pay in nature of reimbursement for actual expenses)
The amended provisions of subparagraph 9 of Article 12 shall apply beginning with the year-end tax settlement or the final return on tax base of global income after this Decree enters into force.
Article 5 (Applicability to scope of total pays in calculating limit of retirement income of executives)
The amended provisions of Article 42-2(7) shall apply beginning with the income paid in retirement after this Decree enters into force.
Article 6 (Applicability to Special Cases concerning Determination of Retirement)
The amended provisions of Article 43(1)4 shall apply beginning with the cases where any reason falling under the amended provisions occurs after this Decree enters into force.
Article 7 (Applicability to exclusion of expenses related to business-use passenger vehicles from necessary expenses)
| (1) | The amended provisions of Article 78-3(4) and (5) shall apply beginning with the cases where any expenses are incurred in relation to business-use passenger vehicles after January 1, 2021. |
| (2) | The amended provisions of Article 78-3(8) and (10) shall apply beginning with the portion of which 10 years have passed since this Decree enters into force from the date on which the business-use passenger vehicle is disposed of or the lease contract is terminated. |
Article 8 (Applicability concerning scope of donation)
The amended provisions of Article 79(4) shall apply beginning with the year-end tax settlement or the final return on tax base of general income after this Decree enters into force.
Article 9 (Applicability to Calculation of Donation)
The amended provisions of the proviso of Article 81(3) shall apply beginning with the year-end tax settlement or the final return on tax base of general income, but the donation that is contributed during the preceding taxable period but is carried over shall be governed by the previous provisions, notwithstanding the amended provisions.
Article 10 (Applicability to calculation of house rental income subject to separate taxation)
The amended provisions of Article 122-2(1)3 shall apply beginning with the lease contract renewed or newly concluded after this Decree enters into force and, in cases of mutual conversion between rental deposit and monthly fees, shall apply beginning with the conversion made after this Decree enters into force.
Article 11 (Applicability to Scope of Business Operators subject to External Tax Adjustment)
The amended provisions of Article 131-2(1)1 shall apply beginning with the external tax adjustment made after this Decree enters into force.
Article 12 (Applicability to system for confirming compliant filing)
The amended provisions of Article 133 shall apply beginning with the certificate of confirmation of compliant filing submitted after this Decree enters into force.
Article 13 (Applicability to calculation of amount of income of persons subject to simplified expense Rate)
The amended provisions of Article 143(1)1-2 shall apply beginning with the income of which tax base is determined or revised after this Decree enters into force.
Article 14 (Applicability to Refund from Loss Carryback)
The amended provisions of Article 149-2(4) shall apply beginning with the cases where the revocation of a refund from loss carryback is determined after this Decree enters into force.
Article 15 (Applicability to requirements for non-taxation concerning temporary two houses for one household in area subject to adjustment)
| (1) | The amended provisions of Article 155(1) shall apply beginning with the transfer made after this Decree enters into force. |
| (2) | In any of the following cases, the precious provisions shall apply, notwithstanding paragraph (1): |
| 1. | Where one household owning the previous house in an area subject to adjustment acquires a new house (including rights to acquire a new house; hereafter in this paragraph the same shall apply) in an area subject to adjustment before December 16, 2019; |
| 2. | Where the fact that one household owning the previous house in an area subject to adjustment enters into a sale and purchase agreement to acquire a new house in an area subject to adjustment before December 16, 2019 and pays downpayment is verified by evidencing documents. |
Article 16 (Applicability to requirements for special cases concerning capital gain taxes of housing rental business entities)
The amended provisions of Article 155(20)2 and 167-3(1)2 (including cases applying Article 167-10(1)2) shall apply beginning with the lease contract renewed or newly concluded after this Decree enters into force and, in cases of mutual conversion between rental deposit and monthly fees, shall apply beginning with the conversion made after this Decree enters into force.
Article 17 (Applicability to simplification of documents submitted when applying for reduction for special cases concerning taxation on capital gain taxes of long-term rental housing)
The amended provisions of Article 155(23)3 and 167-3(7)3 shall apply beginning with the return on tax base of capital gain tax filed after this Decree enters into force.
Article 18 (Applicability to Exemption from Imposition of Heavy Taxation of Capital Gain Tax of Persons Owning Multiple Houses in Area subject to Adjustment)
The amended provisions of Article 167-3(1)12, 167-4(3)6, 167-10(1)12 and 167-11(1)11 shall apply beginning with the transfer made after December 17, 2019.
Article 19 (Applicability to domestic source personal service income of nonresidents)
The amended provisions of Article 179(7) shall apply beginning with the income paid after this Decree enters into force.
Article 20 (Applicability to Persons Eligible to Reduction of Withholding Tax Rate of Profits from Non-Business Loan)
The amended provisions of Article 187 shall apply beginning with the portion registered pursuant to Article 5 of the Act on Online Investment-Linked Financial Business and Protection of Users after that Act enters into force.
Article 21 (Applicability to keeping information on pension payments)
The amended provisions of Article 201-10(5) shall also apply to the information on pension payments retained as of the enforcement of this Decree.
Article 22 (Applicability to scope of persons subject to double-entry bookkeeping)
The amended provisions of the main clause, with the exception of the items, of Article 208(5)2 shall apply beginning with the cases where the account book is prepared or kept regarding the income during the taxable period to which the enforcement date of this Decree belongs.
Article 23 (Applicability to Submission of Aggregate Table of Invoices by Seller and Aggregate Table of Invoices by Purchaser)
The amended provisions of Article 212(5) shall apply beginning with the final return on tax base of general income filed after this Decree enters into force.
Article 24 (Applicability to submission of simplified statements of payment of earned income)
The amended provisions of Article 213(2) shall also apply to the cases where a simplified statement of payment of earned income shall be submitted after this Decree enters into force when any income falling under any subparagraph of Article 164-3(1) of the Act is paid or the business is suspended, closed, or dissolved before this Decree enters into force.
Article 25 (Applicability to submission of material concerning payment of health insurance money for actual loss)
The amended provisions of Article 225-3 shall also apply where the health insurance money for actual loss is paid before this Decree enters into force.
Article 26 (Applicability to sample survey on donation)
The amended provisions of Article 226(2) shall apply beginning with the donation contributed after this Decree enters into force.
Article 27 (Applicability to Simplified Tax Withholding Table for Wage and Salary Income)
The amended provisions of the Appendix 2 shall apply beginning with the portion withheld after this Decree enters into force.
Article 28 (Applicability to entities obligated to issue cash receipts)
The amended provisions of the Appendix 3-3 (excluding the matters concerning the title) shall apply beginning with the goods or services supplied after January 1, 2021.
Article 28-2 (Special cases concerning purchase of insurance for business-use passenger vehicles)
In applying the amended provisions of Article 78-3(4), any of the following cases shall be deemed to have purchased motor vehicle insurance policies only for business use from January 1, 2021:
| 1. | Where the existing motor vehicle insurance policies purchased after January 1, 2021 expires and the motor vehicle insurance policies only for business use is purchased after January 1, 2021; |
| 2. | Where the business- use passenger vehicle is disposed of or its lease contract expires before the motor vehicle insurance purchased before January 1, 2021 (limited to the insurance whose maturity arrives after January 1, 2021) expires. |
Article 29 (Transitional measures concerning determination of and reporting on place for tax payment)
Notwithstanding the amended provisions of Article 5(3)1, the former provisions shall apply where the procedure for obtaining approval from the Commissioner of the National Tax Service under the former provisions of Article 5(3)1 is in progress as of the time when this Decree enters into force.
Article 30 (Transitional Measures concerning Calculation of Number of Houses of Housing Rental Business Entities)
Notwithstanding the amended provisions of Article 8-2(3)2 and 4, the former provisions shall apply to the income generated before the taxable period to which the enforcement date of this Decree belongs.
Article 31 (Transitional measures concerning scope of sideline income of farm households)
Notwithstanding the amended provisions of Article 9(1), (5), and (9), the former provisions shall apply to the income generated before the taxable period to which the enforcement date of this Decree belongs.
Article 32 (Transitional Measures concerning Scope of Total Pays in Calculating Limit of Retirement Income of Executives)
Notwithstanding the amended provisions of Article 42-2(7), the former provisions shall apply to the income paid after this Decree enters into force, which is received after retirement before this Decree enters into force.
Article 33 (Transitional measures concerning special cases concerning determination of retirement)
Notwithstanding the amended provisions of Article 43(1)4, the former provisions shall apply where any event falling under such amended provisions occurs before this Decree enters into force.
Article 34 (Transitional measures concerning legal fiction of immediate depreciation)
Notwithstanding the amended provisions of Article 67(7)2, the former provisions shall apply to the income generated before the taxable period to which the enforcement date of this Decree belongs.
Article 35 (Transitional measures concerning special cases concerning exclusion of expenses related to business-use passenger vehicles from necessary expenses)
Notwithstanding the amended provisions of Article 78-3(4) and (5), the former provisions shall apply where any expense related to business-use passenger vehicles incurs before January 1, 2021.
Article 36 (Transitional Measures concerning Necessary Expenses on Capital Gains on Calligraphic Works and Antiques)
Notwithstanding the amended provisions of subparagraph 2 of Article 87, the former provisions shall apply to the income generated before the taxable period to which the enforcement date of this Decree belongs.
Article 37 (Transitional measures concerning refund from loss carryback)
Notwithstanding the amended provisions of Article 149-2(4), the former provisions shall apply where the revocation of refund from loss carryback is determined before this Decree enters into force.
Article 38 (Transitional measures concerning scope of one house for one household)
| (1) | Notwithstanding the amended provisions of Article 154(1), the former provisions shall apply the transfer made before this Decree enters into force. |
| (2) | Where one household owning one house in an area subject to adjustment as a resident files an application for business registration under Article 168(1) of the Act and registration as a rental business entity under Article 5(1) of the Special Act on Private Rental Housing to rent the relevant house before December 16, 2019, notwithstanding the amended provisions of Article 154(1), the former provisions shall apply even though the relevant house is transferred after this Decree enters into force. |
Article 39 (Transitional Measures concerning Adjustment of Scope of Appurtenant Land)
Notwithstanding the amended provisions of Article 154(7)1, subparagraph 1 of Article 167-5, and subparagraph 1 of Article 168-12, the former provisions shall apply to the assets transferred before January 1, 2022.
Article 40 (Transitional measures concerning scope of small and medium enterprises)
Notwithstanding the amended provisions of Article 157-2(1) and (3), the former provisions shall apply to the stocks transferred before this Decree enters into force.
Article 41 (Transitional Measures concerning Scope of Oligopolistic Stockholders)
Notwithstanding the amended provisions of Article 158(1), the former provisions shall apply to stocks transferred before this Decree enters into force.
Article 42 (Transitional measures concerning calculation of gains on transfer of high-priced houses)
Notwithstanding the amended provisions of Article 160(1), the former provisions shall apply to the assets transferred before January 1, 2022.
Article 43 (Transitional Measures concerning Payment of Subsidies)
Notwithstanding the amended provisions of Article 221(1), the former provisions shall apply where the application for subsidies is filed before this Decree enters into force.
ADDENDA <Presidential Decree No. 30423, Feb. 18, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 30704, May 26, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on May 27, 2020.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 30977, Aug. 26, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on August 28, 2020.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 31083, Oct. 7, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (General applicability)
The amended provisions on capital gains tax in this Decree shall apply beginning with the transfer made after this Decree enters into force.
Article 3 (Applicability to special cases concerning one house for one household)
| (1) | The amended provisions of Article 155(22)2d shall apply beginning with the portion whose registration is cancelled after August 18, 2020. |
| (2) | The amended provisions of Article 155(23) shall also apply to the transfer of the residing house which is made after the cancellation of registration on or after August 18, 2020 but before the enforcement of this Decree. |
Article 4 (Applicability to Scope Houses falling under at least Three Houses for One Household)
| (1) | The amended provisions of the provisions, with the exception of the items, of Article 167-3(1)2 and item g of that subparagraph shall also apply to the transfer of the residing house which is made after the cancellation of registration on or after August 18, 2020 but before the enforcement of this Decree. |
| (2) | The amended provisions of the main clause, with the exception of Article 167-3(1)2e1) through 3) and item e of that subparagraph (limited to the part related to lease period requirement of long-term private rental housing) shall also apply to the private rental housing whose registration is filed (including cases where any report on changes in registered matters is made to add a house to be rented) pursuant to Article 5 of the Special Act on Private Rental on or after August 18, 2020 but before the enforcement of this Decree. |
| (3) | The amended provisions of Article 167-3(5)2d shall also apply to the transfer of a general house after its registration is cancelled on or after August 18, 2020 but before the enforcement of this Decree. |
Article 5 (Transitional measures concerning scope of houses falling under at least three houses for one household)
In the case of private rental housing that was applied for registration pursuant to Article 5 of the Special Act on Private Rental Housing before August 18, 2020 (including notification of changes to the registration to add additional housing to be rented), the previous provisions shall apply, notwithstanding the provisions of Article 167-3(1)2e1) through 3) and the amendments to the same subparagraph (limited to the part concerning the rental period requirements for long-term general private rental housing).
ADDENDA <Presidential Decree No. 31101, Oct. 8, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on October 8, 2020.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 31222, Dec. 8, 2020>
Article 1 (Enforcement date)
This Decree shall enter into force on December 10, 2020.
Article 2 Omitted.
Article 3 Omitted.
ADDENDUM <Presidential Decree No. 31380, Jan. 5, 2021>
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 31442, Feb. 17, 2021>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided the amended provisions of each of the following subparagraphs shall enter into force on the date specified in the relevant subparagraph: <Amended on Dec. 31, 2022>
| 1. | The amended provisions of Article 159-2(1)2 and 161-2(4): April 1, 2021; |
| 2. | The amended provisions of Article 167-6: June 1, 2021; |
| 3. | The amended provisions of the proviso, with the exception of the items, of Article 80(1)5 (limited to the part concerning designated period), Article 88, 179(19), 183(5) and (6), 216-2(3), 216-4 and the Appendix 3-3: January 1, 2022; |
| 4. | The amended provisions of Article 211-2(2) and paragraph (3)2 of that Article: July 1, 2022; |
| 5. | The amended provisions of Article 4-2(3), 23, 26-2 (excluding the part concerning the amendment of the Enforcement Decree of the Adjustment of International Taxes Act), 26-3, subparagraph 3-2 of Article 45, Article 46, 150-2 through 150-35, 152-2, 157-3, 165(3) through (7) and (9), 167-9, 168(2), 169(1)2, 173(5)3, 178, 178-3, 178-8 through 178-10, 178-13, 179(15)2, 183-5 through 183-9, 184-5, 203-2 through 203-5, 217(2) and 225-2: January 1, 2023. |
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated in the taxable period to which the date of enforcement of this Decree belongs. |
| (2) | The amended provisions concerning the capital gains tax in this Decree shall apply beginning with the transfer made after this Decree enters into force. |
Article 3 (Applicability to calculation of necessary expenses for business income)
The amended provisions of Article 55(1)25 shall apply beginning with the portion spent after January 1 2021.
Article 4 (Applicability to Designation and Revocation of Non-Profit Organizations)
| (1) | The amended provisions of the proviso, with the exception of the items, of Article 80(1)5 (limited to the part concerning designated period) shall apply beginning with the cases where a non-profit organization is designated after January 1, 2022. |
| (2) | The amended provisions of the proviso of Article 80(1)5c shall apply beginning with the cases where a non-profit organization is designated after January 1, 2022. |
| (3) | The amended provisions of Article 80(1)5f shall apply beginning with the public notice made after January 1, 2021. |
| (4) | The amended provisions of Article 80(2)1 and 6 shall apply beginning with the request for revocation of designation made after this Decree enters into force. |
Article 5 (Applicability to scope of entertainment expenses)
The amended provisions of Article 83(2)2 shall apply beginning with the portion spent as entertainment expenses after January 1 2021.
Article 6 (Applicability to deduction for housing funds)
| (1) | The amended provisions of the former part of Article 112(10)4 shall apply beginning with the extension of repayment period or the repayment of the existing loan using the loan newly borrowed after this Decree enters into force. |
| (2) | The amended provisions of Article 112(14) shall apply beginning with cases where the transferee of the house acquires long-term mortgage loan after this Decree enters into force. |
Article 7 (Applicability to Special Cases concerning Calculation of Business Income with respect to House Rental Income subject to Separate Taxation)
The amended provisions of Article 122-2(3) through (5) shall apply beginning with the income whose tax base is returned after this Decree enters into force.
Article 8 (Applicability to payment of tax by interim prepayment)
The amended provisions of subparagraph 4 of Article 123 shall apply beginning with the interim prepayment after this Decree enters into force.
Article 9 (Applicability to scope of one house for one household)
The amended provisions of the proviso of Article 154(5) shall apply beginning with the donation or the change of use by one household owning more than two houses after this Decree enters into force.
Article 10 (Applicability to special cases concerning one house for one household in cases of owning house and pre-completion apartment ownership)
| (1) | The amended provisions of Article 155(2), 156-2(6) through (9) and (15), 156-3, 1 67-4(2), (3) and (5) and 167-11(1) and (2) shall apply beginning with the pre-completion apartment ownership acquired after January 1, 2021. |
| (2) | The amended provisions of Article 155(2), 156-2(6) through (9) and (15), 156-3, 167-4(2), (3), and (5), and 167-11(1) and (2) shall apply beginning with the transfer made after January 1, 2021. |
Article 11 (Applicability to Contract for Differences)
The amended provisions of Article 159-2(1)2 and 161-2(4) shall apply beginning with the income generated after April 1 2021.
Article 12 (Applicability to issuance of electronic invoices)
| (1) | The amended provisions of Article 211-2(2) and the main clause of paragraph (3)2 of that Article shall begin to apply to the goods or services supplied after July 1, 2022 based on the total revenue of the goods or services for each place of business in the taxable period to which January 1, 2021 belongs. |
| (2) | Notwithstanding the amended provisions of Article 211-2(2) and the main clause of Article 211(3)2, the amended provisions shall apply deeming "100 million won" in those amended provisions as "200 million won," respectively from July 1, 2022 to June 30, 2023. |
| (3) | Notwithstanding the amended provisions of Article 211-2(3)2, in cases where the total revenue per business place for the period from January 1, 2021, to December 31, 2021, has been changed due to amended returns or other corrections, the term "1 billion won" in the amended provisions shall be construed as "2 billion won" for the application of the same provisions. |
| (4) | In cases where the total revenue per business place prior to December 31, 2020, has been changed due to amended returns or other corrections, the previous regulations shall apply notwithstanding the amended provisions of Article 211-2(3)2. |
Article 13 (Applicability to submission of evidentiary documents for income deduction and tax credits and administrative guidance therefor)
The amended provisions of Article 216-3(1)7 shall apply beginning with those submitted after this Decree enters into force.
Article 14 (Applicability to preparation and keeping of books for tax withholding for interest and dividend)
The amended provisions of Article 217(2) shall apply beginning with the income generated after January 1 2025. <Amended on Dec. 31, 2022>
Article 15 (Applicability to simplified tax withholding table for wage and salary income)
The amended provisions of the Appendix 2 shall apply beginning with the portion withheld after this Decree enters into force.
Article 16 (Applicability to types of business obligated to issue cash receipts)
The amended provisions of the Appendix 3-3 shall apply beginning with the goods or services supplied after January 1 2021.
Article 16-2 (Special cases concerning timing of revenue from settlement transactions for difference)
With respect to income arising from the transaction or conduct of an over-the-counter derivative instrument that meets all of the requirements of Article 150-21(1)5 concluded before January 1, 2025, which is payable under the contract, including dividend income arising from the underlying asset, other than trading gains under the agreement, and which has not been taxed before January 1, 2025, the time of receipt of the income shall be the date of settlement of the payment under Article 98 of the Act, notwithstanding the proviso of Article 150-8(1)4.
Article 17 (Transitional measures concerning scope of pay in nature of reimbursement for actual expenses)
Notwithstanding the amended provisions of subparagraph 1 of Article 12, the former provisions shall apply to the income generated before January 1, 2021.
Article 18 (Transitional measures concerning scope of night-shift allowance received by manufacturing workers)
Notwithstanding the amended provisions of Article 17(1)4, the former provisions shall apply to the income generated before January 1, 2021.
Article 19 (Transitional measures concerning scope of pay in nature of welfare benefits)
| (1) | Notwithstanding the amended provisions of Article 17-4 and 38(1)6, 7, and 12, the former provisions shall apply to the income generated before January 1, 2021. |
| (2) | Notwithstanding the amended provisions of Article 17-4 and 38(1)6, 7, and 12, the former provisions shall apply to the income of a foreign worker subject to special cases concerning taxation under the Act on Restriction on Special Cases concerning Taxation, which is generated before January 1, 2022. |
Article 20 (Transitional Measures concerning Scope of Non-Taxable Other Income)
Notwithstanding the amended provisions of Article 18(1)10, the former provisions shall apply to the income generated before January 1, 2021.
Article 21 (Transitional measures concerning calculation of necessary expenses for business income)
Notwithstanding the amended provisions of Article 55(1)25, the former provisions shall apply to the portion spent before January 1, 2021.
Article 22 (Transitional Measures concerning Designation of Non-Profit Organizations)
| (1) | Notwithstanding the amended provisions of the proviso, with the exception of the items, of Article 80(1)5, the former provisions shall apply to the non-profit organizations designated before January 1, 2021. |
| (2) | Notwithstanding the amended provisions of Article 80(1)5e, the former provisions shall apply to the non-profit organizations designated before this Decree enters into force. |
Article 23 (Transitional Measures concerning Scope of Entertainment Expenses)
Notwithstanding the amended provisions of Article 83(2)2, the former provisions shall apply to the entertainment expenses spent before January 1, 2021.
Article 24 (Transitional measures concerning deduction for housing funds)
| (1) | Notwithstanding the amended provisions of Article 55(1)25, the former provisions shall apply to the extension of repayment period or the repayment of the existing loan using the loan newly borrowed before this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Article 112(14), the former provisions shall apply to the portion where the transferee of the house acquires long-term mortgage loan before this Decree enters into force. |
Article 25 Deleted. <Feb. 15, 2022>
ADDENDA <Presidential Decree No. 31472, Feb. 19, 2021>
Article 1 (Enforcement date)
This Decree shall enter into force on February 19, 2021.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 31659, May 4, 2021>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2021; provided, the amended provisions of Article 168-8(3)1 and 168-14(3)3 shall enter into force on the date of its promulgation.
Article 2 (Applicability to penalty tax on negligence in submitting payment statement)
The amended provisions of Article 147-7(1)2 shall apply beginning with the cases where the payment statement or simplified payment statement of the income paid after this Decree enters into force.
Article 3 (Applicability to scope of farmland)
| (1) | The amended provisions of Article 168-8(3)1 shall apply beginning with the farmland transferred after January 1, 2022. |
| (2) | Notwithstanding Article 168-8(3)1 and paragraph (1) above, the former provisions shall apply to where the farmland under Article 6(2)3 of the Farmland Act falls under the farmland to be purchased through consultation or expropriated under the Act on Acquisition of and Compensation for Land for Public Works and other statutes to implement projects whose public notice of project approval is given before the enforcement date of the proviso of Article 1 of the Addenda. |
Article 4 (Applicability to criteria for determination of land not deemed land for non-business use having inevitable reasons)
The amended provisions of Article 168-14(3)3b shall apply beginning with the land to be purchased through consultation or expropriated according to the project whose public notice of project approval is given after the enforcement date of the proviso of Article 1 of the Addenda.
Article 5 (Applicability to submission of simplified statements of payment)
The amended provisions of Article 213(2)2 shall apply beginning with the cases where the business is suspended, closed, or dissolved after this Decree enters into force and a simplified statement of payment of income under Article 164-3(1)2 of the Act, which is paid after this Decree enters into force, shall be submitted.
Article 6 (Applicability to submission through device issuing cash receipts)
The amended provisions of Article 213-2(3)1 shall apply beginning with the cases where the matters indicated on the simplified statement of payment are submitted through a device issuing cash receipts with regard to the income paid after this Decree enters into force.
ADDENDA <Presidential Decree No. 31740, Jun. 8, 2021>
Article 1 (Enforcement date)
This Decree shall enter into force on June 9, 2021.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 32104, Nov. 9, 2021>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2022.
Article 2 (Applicability to submission of taxation data on service providers)
| (1) | The amended provisions of the latter part, with the exception of the subparagraphs, of Article 224(2) shall apply beginning with the cases where the taxation data on services whose revenue or amount of income is generated are submitted after this Decree enters into force. |
| (2) | The amended provisions of the latter part of Article 224(2)2 shall apply beginning with the cases where a labor platform operator acts as an agent or a broker of services after this Decree enters into force. |
ADDENDA <Presidential Decree No. 32352, Jan. 21, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on January 21, 2022.
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 32420, Feb. 15, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the following subparagraphs shall enter into force on the date falling under the following classifications: <Amended on Dec. 31, 2022>
| 1. | The amended provisions of Article 40-2(1)2c: April 14, 2022; |
| 2. | The amended provisions of Article 116-4 and Article 211-2(2) of the Enforcement Decree of the Income Tax Act, which is partially amended by Presidential Decree No. 31442, paragraph (2) of that Article and the amended provisions of Articles 12 and 25 of the Addenda: July 1, 2022; |
| 3. | The amended provisions of Article 129(4)1, 152-2, 157-2, 159-2, 161-2, 162(6)3, 162(7)3, 165(8)1, 167-8, 176-2(2)1, 178-11, and 178-2, the amended provisions of Article 150-9(1) and (3), 150-13(3) and (4), 150-14(1), 150-17(8), the latter part, with the exception of the subparagraphs, of Article 150-21(1), Article 150-21(1)5, 150-22(1)2a1), 150-22(3), 150-25, 184-5(2)1, 203-2(4) through (16), 203-4(1) and 225-2 of the Enforcement Decree of the Income Tax Act, which is amended by Presidential Decree No. 31442: January 1, 2024; |
| 4. | The amended provisions of the Appendix 3-3: January 1, 2023. |
Article 2 (General applicability)
| (1) | This Decree shall apply beginning with the income generated during the taxable period to which the enforcement date of the relevant provisions under Article 1 of the Addenda. |
| (2) | The amended provisions concerning capital gains tax of this Decree shall apply beginning with the transfer made after the enforcement date of the relevant provisions under Article 1 of the Addenda. |
Article 3 (Applicability to requirements for withdrawal of pension income exempt from tax base of general income)
The amended provisions of Article 20-2(1)1d and paragraph (2) of that Article shall apply beginning with the withdrawal from a pension account after this Decree enters into force.
Article 4 (Applicability to Profits from Private Equity Funds Available only to Institutional Investors)
The amended provisions of Article 26-2(3) and (4) and 27-3(3) shall apply beginning with the income generated after October 21, 2021.
Article 5 (Applicability to order of withdrawal from pension account)
The amended provisions of Article 40-3(2) shall also apply where the transferred amount under Article 59-3(3) of the Act is deposited to a pension account before this Decree enters into force and is withdrawn in the taxable period to which the date of withdrawal belongs.
Article 6 (Applicability to calculation of necessary expenses for business income)
The amended provisions of Article 55(2) shall apply beginning with bonds confirmed by the Korea Trade Insurance Corporation as unrecoverable after this Decree enters into force.
Article 7 (Applicability to tax credit for loss by disasters)
The amended provisions of Article 118(3) shall also apply where a disaster occurs before this Decree enters into force and three months have not passed since the date on which such disaster occurs as of the time this Decree enters into force.
Article 8 (Applicability to calculation of gains on transfer of high-price houses)
The amended provisions of Article 155(1), 156, 160, and 161 shall apply beginning with the transfer made after December 8, 2021.
Article 9 (Applicability to expansion of scope of improvement projects subject to application of rights to acquire house as association member)
The amended provisions of Article 155(18)4 and 5, 156-2(4)1 and 2, 156-2(5), 156-2(7)3b, 156-2(8)4a, 156-2(8)5, 156-2(9)3a, 156-2(9)4, 156-3(5)3b, the provisions, with the exception of the subparagraphs, of Article 166(1), the provisions, with the exception of the subparagraphs, of Article 166(2), the provisions, with the exception of the subparagraphs, of Article 166(7) shall apply beginning with the right to acquire a house as an association member acquired after January 1, 2022.
Article 10 (Applicability to Deadline for Submission of Data on Transactions of domestic place of business and Main office of Nonresidents)
The amended provisions of Article 181-2(4) shall also apply where the obligation to submit data on the taxable period that commences before this Decree enters into force occurs and the deadline for submission specified in the former provisions is not due before this Decree enters into force.
Article 11 (Applicability to application for basic deduction on financial investment income)
The amended provisions of Article 203-2(6) of the Enforcement Decree of the Income Tax Act, which is partially amended by Presidential Decree No. 31442, shall also apply where the application for basic deduction on financial investment income generated after January 1, 2025 is filed with a financial company, etc. before January 1, 2025. <Amended on Dec. 31, 2022>
Article 12 (Transitional measures concerning special cases concerning one house for one household in cases of owning house and right to acquire house as association member or pre-completion apartment ownership)
Notwithstanding the amended provisions of the provisions, with the exception of the subparagraphs, of Article 156-2(4) or the provisions, with the exception of the subparagraphs, of Article 156-3(3), the former provisions shall apply to the application of special cases concerning one house for one household in cases where the right to acquire a house as an association member or pre-completion apartment ownership is acquired before this Decree enters into force.
Article 13 (Transitional measures concerning computation of standard market prices of assets, other than land and buildings)
Notwithstanding the amended provisions of Article 207-10(1)1a and b, the former provisions shall apply to the computation of standard market prices of assets, other than land and buildings transferred before January 1, 2025. <Amended on Dec. 31, 2022>
Article 14 (Transitional measures concerning scope of withholding agents for income of temporary staffing agency workers of foreign corporations)
Notwithstanding the amended provisions of Article 207-10(1)1a and b, the former provisions shall apply to the scope of hiring domestic corporations withholding taxes on amounts paid in consideration of labor during the business year commenced before April 1, 2022.
ADDENDA <Presidential Decree No. 32447, Feb. 17, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on February 18, 2022.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 32449, Feb. 17, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on February 18, 2022.
Article 2 Omitted.
Article 3 Omitted.
ADDENDUM <Presidential Decree No. 32516, Mar. 8, 2022>
This Decree shall enter into force on January 1, 2027. <Amended on Dec. 31, 2022; Dec. 31, 2024>
ADDENDA <Presidential Decree No. 32654, May 31, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to calculation of holding period of houses)
| (1) | The amended provisions of Article 154(5) shall apply beginning with the transfer of a house made after May 10, 2022. |
| (2) | Notwithstanding the amended provisions of Article 154(5), the former provisions shall apply to the calculation of the holding period when a house is transferred before May 10, 2022. |
Article 3 (Applicability concerning Requirements for Non-Taxation on Temporarily Owning Two Houses in Area subject to Adjustment)
| (1) | The amended provisions of Article 155(1)2 shall apply beginning with the cases where the previous house is transferred after May 10, 2022. |
| (2) | Notwithstanding the amended provisions of Article 155(1)2, the former provisions shall apply to the requirements for non-taxation when the previous house is transferred before May 10, 2022. |
Article 4 (Applicability to Exemption from Imposition of Heavy Taxation of Capital Gain Tax of Persons Owning Multiple Houses in Area subject to Adjustment)
The amended provisions of Article 167-3(1)12-2, 167-4(3)6-2, 167-10(1)12-2 and 167-11(1)12 shall apply beginning with the transfer of a house made after May 10, 2022.
ADDENDA <Presidential Decree No. 32830, Aug. 2, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to win-win rental housing)
The amended provisions of Article 155-3(1), (3) and (4) shall also apply to the houses for which a win-win lease agreement is entered into on or after December 20, 2021, but before the enforcement date of this Decree.
ADDENDA <Presidential Decree No. 32931, Oct. 4, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force three months after its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 32964, Oct. 27, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to flexible tax rates on interest income or capital gains from state bonds and monetary stabilization bonds of nonresidents)
The amended provisions of Article 207-6 shall apply to the cases where any interest is paid or the State bonds and monetary stabilization bonds are transferred from October 17, 2022 to December 31, 2022.
ADDENDA <Presidential Decree No. 33207, Dec. 31, 2022>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2023; provided, the amended provisions of Article 150-14(1) and 203-2(15) and (16) of the Enforcement Decree of the Income Tax Act, which is amended by Presidential Decree No. 32420, and the amended provisions of Article 150-18(1) and 150-20 of the Enforcement Decree of the Income Tax Act, which is amended by Presidential Decree No. 31442 shall enter into force on January 1, 2025.
Article 2 (Transitional Measures concerning Change in Scope of Majority Stockholders)
Notwithstanding the amended provisions of Article 157(4) through (6), 157(12), 158(1), the former part of Article 162(1)10, Article 167-8(1)2 and 169(1)2d, the former provisions shall apply to the scope of majority stockholders, other stockholders and oligopolistic stockholders, timing of the transfer of stocks, etc. and preliminary return on tax base of capital gains when the stocks, etc. are transferred before this Decree enters into force.
ADDENDA <Presidential Decree No. 33267, Feb. 28, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided the amended provisions of the following subparagraphs shall enter into force on the date specified in the relevant subparagraphs:
| 1. | The following amended provisions: January 1, 2025; |
| a. | The amended provisions of 26-2(1), (4) and (5), 150-6, 150-7, 150-8(1), 150-12, 150-13(1), 150-15, 150-18(1) and (2), 150-19(4) and (6), 150-20, 150-22(1)2c, 150-26(1) through (3), 150-27(1)1, 178-13, and subparagraph 2 of 183-5 of the Enforcement Decree of the Income Tax Act, which is amended by Presidential Decree No. 31442; |
| b. | The amended provisions of Article 117-2 and 189-2; |
| c. | The amended provisions of Article 150-17(1) through (8) and 203-2(6) through (19) of the Enforcement Decree of the Income Tax Act, which is amended by Presidential Decree No. 31442 (including the provisions amended by the Income Tax Act, which is partially amended by Presidential Decree No. 32420); |
| d. | The amended provisions of Article 150-21(1)5b, 165(8), and 184-5(2)1 of the Enforcement Decree of the Income Tax Act, which is partially amended by Presidential Decree No. 32420; |
| 2. | The amended provisions of Article 40-2(2)1c, 40-2(7) through (12), 211(4)3, 211-2(2) and (3), and 212-4: July 1, 2023; |
| 3. | The amended provisions of subparagraph 4 of Article 78, Article 78-3(4), 81, 83, 85, 147-7(4), 157(4) and (6), 181(1)4, 213(2), and the Appendices 3-2 and 3-3: January 1, 2024. |
Article 2 (Applicability to scope of non-taxable meal allowance)
The amended provisions of Article 19(2)2 shall apply beginning with the income generated in the taxable period to which the enforcement date of this Decree belongs.
Article 3 (Applicability to profits from collective investment schemes whose transaction and profits or losses are non-taxable)
The amended provisions of Article 26-2(4) shall apply beginning with the profits settled and distributed by a collective investment scheme after this Decree enters into force.
Article 4 (Applicability to Payment of Housing Differences into Pension Account)
The amended provisions of Article 40-2(2)1c and 40-2(7) through (12) shall also apply to the transfer of a house before the enforcement date under subparagraph 2 of Article 1 of the Addenda.
Article 5 (Applicability to inclusion of foreign income tax in necessary expenses)
| (1) | The amended provisions of Article 117(10) shall apply beginning with the foreign income tax on foreign source income generated after January 1, 2023. |
| (2) | Notwithstanding the amended provisions of Article 117(10), the former provisions shall apply to the inclusion of foreign income tax on foreign source income generated before January 1, 2023 in necessary expenses. |
Article 6 (Applicability to tax credit for educational expenses)
The amended provisions of Article 118-6(1)7 shall apply beginning with the cases where the educational expenses are paid after January 1, 2023.
Article 7 (Applicability to criteria for amount of income of persons subject to simplified expense rate)
| (1) | The amended provisions of Article 143(4)2 shall apply beginning with the income generated in the taxable period to which the enforcement date of this Decree belongs. |
Article 8 (Applicability to special cases concerning one house for one household)
| (1) | The amended provisions of Article 155(1), 156-2(4)1 and 2, 156-2(5)2 and 3 and 156-3(3)1 and 2 shall apply beginning with the transfer of a house made after January 12, 2023. |
| (2) | Notwithstanding the amended provisions of Article 155(1), 156-2(4)1 and 2, 156-2(5)2 and 3 and 156-3(3)1 and 2, the former provisions shall apply to the transfer of a house made before January 12, 2023. |
Article 9 (Applicability to computation of standard market price of assets other than land and buildings)
The amended provisions of Article 165(4)3c and d and the latter part of Article 165(8)1 shall apply beginning with the transfer of stocks, etc. made after the enforcement date of this Decree.
Article 10 (Applicability to scope of houses subject to imposition of heavy taxation of capital gains tax)
The amended provisions of Article 167-10(1)15 and 167-11(1)13 shall apply beginning with the transfer of a house made after the enforcement date of this Decree.
Article 11 (Applicability to requirements for foreign investment vehicles equivalent to foreign public equity fund)
The amended provisions of Article 179-5(1) shall apply beginning with the cases where the interest is paid or the State bonds, etc. are transferred after January 1, 2023.
Article 12 (Applicability to Issuance of Payment Statement or Account Statement of Liaison Office of Foreign Corporation)
The amended provisions of the proviso of Article 211(4)3 shall apply beginning with the goods or services supplied after the enforcement date under subparagraph 2 of Article 1 of the Addenda.
Article 13 (Applicability to issuance of electronic invoices)
| (1) | The amended provisions of Article 211-2(2) and (3) shall apply beginning with the goods or services supplied after the enforcement date under subparagraph 2 of Article 1 of this Addenda. In such cases, the total amount of income per place of business under Article 211-2(2) and the main clause of Article 211(3)2 shall be determined based on the taxable period to which January 1, 2022 belongs. |
| (2) | Notwithstanding the amended provisions of Article 211-2(2) and the main clause of Article 211(3)2, the amended provisions shall apply as if "80 million won" in the amended provisions construed as "100 million won," respectively from July 1, 2023 to June 30, 2024. |
| (3) | Notwithstanding the amended proviso of Article 211-2(3)2, the same amended provisions shall apply as if "80 million won" under the same amended provisions construed as "100 million won" in cases where the total amount of income per place of business from January 1, 2022 to December 31, 2022 is altered due to revised return, etc. |
Article 14 (Applicability to Exemption from Submission of Statements of Payment)
The amended provisions of Article 214(1)2 and 2-2 shall apply beginning with the cases where the income is paid in the taxable period to which the enforcement date of this Decree belongs.
Article 15 (Applicability to submission of evidentiary documents for income deduction and tax credit)
The amended provisions of Article 216-3(1)10 shall apply beginning with the cases where the evidentiary documents are submitted for income deduction on income generated in the taxable period to which the enforcement date of this Decree belongs.
Article 16 (Applicability to simplified tax withholding table for wage and salary income and pension income)
The amended provisions of the Appendices 2 and 3 shall apply beginning with the tax withheld after this Decree enters into force.
Article 17 (Applicability to types of business serving consumers)
The amended provisions of the Appendix 3-2 shall apply beginning with the goods or services supplied after the Enforcement Date of this Decree.
Article 18 (Applicability to types of business obligated to issue cash receipts)
The amended provisions of the Appendix 3-3 shall apply beginning with the goods or services supplied after the enforcement date under subparagraph 3 of Article 1 of the Addenda.
Article 19 (Transitional measures concerning tax liability on trust income)
Notwithstanding the amended provisions of Article 4-2(4), the former provisions shall apply to the tax liability on income vested to trust assets before this Decree enters into force.
Article 20 (Transitional measures concerning exclusion of expenses related to business-use passenger vehicles from necessary expenses)
Notwithstanding the amended provisions of Article 78-3(4), the former provisions shall apply to the expenses related to business-use passenger vehicles incurred before the enforcement date under subparagraph 3 of Article 1 of the Addenda.
Article 21 (Transitional measures concerning scope of major stockholders)
Notwithstanding the amended provisions of Article 157(4) and (6), the former provisions shall apply to the scope of major stockholders where the stocks, etc. are transferred before the enforcement date under subparagraph 3 of Article 1 of the Addenda.
Article 22 (Transitional measures concerning scope of capital gains)
Notwithstanding the amended provisions of Article 158(4)2, the former provisions shall apply to the scope of capital gains where the stocks are transferred before this Decree enters into force.
Article 23 (Transitional measures concerning computation of standard market price of stocks)
Notwithstanding the amended provisions of Article 165(4)3c, the former provisions shall apply to the computation of standard market price where the stocks, etc. are transferred before this Decree enters into force.
Article 24 (Transitional measures concerning receipt and retainment of documentary evidence of expenditure)
Notwithstanding the amended provisions of Article 208-2(1)2, the former provisions shall apply to the receipt and retainment of documentary evidence of expenses where goods or services are supplied before this Decree enters into force.
ADDENDA <Presidential Decree No. 33382, Apr. 11, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force on June 5, 2023.
Articles 2 through 4 Omitted.
Article 5 Omitted.
ADDENDA <Presidential Decree No. 33621, Jul. 7, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force on July 10, 2023
Articles 2 through 11 Omitted.
Article 12 Omitted.
Articles 13 and 14 Omitted.
ADDENDA <Presidential Decree No. 33736, Sep. 26, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force on October 1, 2003.
Article 2 (Applicability to changes in scope of donations determined in consideration of public interest)
| (1) | The amended provisions of Article 80(1)2a shall begin to apply to the union dues paid to the labor union after this Decree enters into force. |
| (2) | Notwithstanding the amended provisions of Article 80(1)2, the former provisions shall apply to membership fees paid to the labor union before this Decree enters into force. |
ADDENDA <Presidential Decree No. 33764, Sep. 26, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force on September 29, 2023.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 34061, Dec. 28, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2024.
Article 2 (Transitional measures concerning change of scope of majority shareholders)
In cases where stocks, etc. have been transferred before this Decree enters into force, the former provisions shall apply, notwithstanding the main clause and proviso of Article 157(4)2 and the amended provisions of Article 157(5)1 and 2.
ADDENDA <Presidential Decree No. 34265, Feb. 29, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided the amended provisions of the following subparagraphs shall enter into force on the date specified in the relevant subparagraphs:
| 1. | The amended provisions of Articles 149-3 and 184(1): July 1, 2024; |
| 2. | The amended provisions of the former part of Article 159-4, subparagraphs 10 and 12 of Appendix 3-2, and subparagraphs 2 and 5 of Appendix 3-3: January 1, 2025; |
| 3. | The amended provisions of Appendix 2: March 1, 2024; |
Article 2 (Applicability to expansion of scope of non-taxable benefits for overseas workers)
The amended provisions of Article 16(1)1 and 2 shall begin to apply to the incomes received during the taxable period to which the enforcement date of this Decree belongs.
Article 3 (Application of the increase in the tax exemption limit for compensation for employee inventions)
The amended provisions of Articles 17-3(1) and 18(2) shall begin to apply to the incomes received during the taxable period to which the enforcement date of this Decree belongs.
Article 4 (Applicability to adjustment of scope of welfare benefits)
| (1) | The proviso of subparagraph 2 of Article 17-4 and the amended provisions of each item of the same subparagraph shall begin to apply to the incomes accrued after this Decree enters into force. |
| (2) | The amended provisions of subparagraph 2-2 of Article 17-4 shall begin to apply to the incomes generated in the taxable period to which the enforcement date of this Decree belongs. |
Article 5 (Applicability to expansion of scope of business income necessary expenses)
The amended provisions of Article 55(1)11-4 and 11-5 shall begin to apply to the insurance premiums paid during the taxable period to which the enforcement date of this Decree belongs.
Article 6 (Applicability to adjustment of scope of inclusion of donations in necessary expenses)
The amended provisions of Article 81(4) shall begin to apply to year-end tax settlements or final returns on global income tax base after January 1, 2024.
Article 7 (Applicability to relief of requirements for interest expense deductions on mortgage-backed retirement pension)
The amended provisions of Article 108-3(1)3 shall begin to apply to year-end tax settlements or final returns on global income tax base after January 1, 2024.
Article 8 (Applicability to income deductions for repayment of interest on long-term housing mortgage loans)
| (1) | The amended provisions of Article 112(10)2 shall begin to apply to year-end tax settlements or final returns on global income tax base after January 1, 2024. |
| (2) | In cases where the repayment period for a long-term housing mortgage loan is extended or a new loan is taken, or a debt is assumed before January 1, 2024, the previous regulations shall apply to the income deduction for the repayment of interest, notwithstanding the amended provisions of the former part of Article 112(10)4 and paragraph (14) of the same Article. |
Article 9 (Applicability to expansion of scope of foreign tax credit)
The amended provisions of the proviso, with the exception of the subparagraphs, of Article 117(1) shall begin to apply to the amount of foreign income tax paid or to be paid after August 8, 2023.
Article 10 (Applicability to expansion of tax credit for medical expenses)
The amended provisions of Article 118-5(1)6-2 and 7 shall begin to apply to the expenses incurred or paid during the taxable period to which the enforcement date of this Decree belongs.
Article 11 (Applicability to temporary exclusion from increased capital gains tax for multiple homeowners)
| (1) | The amended provisions, with the exception of the subparagraphs, of Article 167-3(1) and the subparagraph 12 of that paragraph shall begin to apply to the transfer of housing after this Decree enters into force. |
| (2) | The amended provisions of Article 167-4(2)2 and paragraph (3)6 of that Article shall begin to apply to the transfers of housing after this Decree enters into force. |
| (3) | The amended provisions, with the exception of the subparagraphs, of Article 167-10(1) and the subparagraph 12 of that paragraph shall begin to apply to the transfer of housing after this Decree enters into force. |
| (4) | The amended provisions of Article 167-11(1)11 and paragraph (2)2 of that Article shall begin to apply to the transfer of housing after this Decree enters into force. |
Article 12 (Applicability to reduction of scope of business income subject to withholding tax)
The amended provisions of Article 184(1)1a shall begin to apply where business income is paid after July 1, 2024.
Article 13 (Applicability to expansion of crounds for issuance of purchaser's invoices)
The amended provisions of Article 212-4(1) shall begin to apply to the issuance of invoices issued by purchasers after this Decree enters into force.
Article 14 (Applicability to adjustment of simplified tax withholding table for earned income)
The amended provisions of Appendix 2 shall begin to apply to the withholding tax after March 1, 2024.
Article 15 (Applicability to expansion of type of business serving consumers)
The amended provisions of subparagraphs 10 and 12 of Appendix 3-2 shall apply to the supply of goods or services after January 1, 2025.
Article 16 (Applicability to expansion of types of business obligated to issue cash receipts)
The amended provisions of subparagraphs 2 and 5 of Appendix 3-3 shall begin to apply to the supply of goods or services after January 1, 2025.
Article 17 (Transitional measures concerning scope of sideline income of farm households)
Notwithstanding the amended provisions of Article 9(1), the former provisions shall apply to income accrued before January 1, 2024.
Article 18 (Transitional measures concerning calculation of value of volunteer services)
Notwithstanding the amended provisions of Article 81(5), the former provisions shall apply to the value of volunteer services provided before this Decree enters into force.
Article 19 (Transitional measures concerning judgment of period of residence in co-inherited house)
Notwithstanding the amended provisions of Articles 154(12) and the latter part of Articles 159-4, the former provisions shall apply to judgment on the residence period of a house transferred before this Decree enters into force.
ADDENDA <Presidential Decree No. 34488, May 7, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on May 17, 2024.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 34591, Jun. 25, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on June 27, 2024.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 34657, Jul. 2, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on July 10, 2024. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 34728, Jul. 23, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on July 31, 2024.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 34873, Sep. 10, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Scope of Profits from Collective Investment Schemes Not Subject to Taxation on Profit or Loss from Transactions and Assessment)
The amended provisions of Article 26-2(4)2a shall begin to apply to the portions of stocks, beneficiary certificates, exchange-traded securities, or exchange-traded derivatives subject thereto acquired by collective investment schemes after this Decree enters into force.
Article 3 (Applicability to Scope Houses Equivalent to Three or More Houses per Household)
The amended provisions of Article 167-3(1)12a4) shall begin to apply to cases where houses are transferred during the taxable period in which this Decree enters into force.
ADDENDA <Presidential Decree No. 34881, Sep. 10, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on September 15, 2024.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 34990, Nov. 12, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Special Cases on One House per Household)
The amended provisions of Articles 155(5), and 156-2(9) shall begin to apply to cases where houses are transferred after this Decree enters into force.
Article 3 (Applicability to Submission of Evidentiary Documents for Income Deductions and Tax Credits)
The amended provisions of Article 216-3(1)3 and subparagraph 3 of Appendix 4 shall begin to apply where evidentiary documents are submitted for income deductions for the income accruing during the taxable period in which this Decree enters into force.
ADDENDA <Presidential Decree No. 35121, Dec. 31, 2024>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2025.
Article 2 (Transitional measures concerning approval of qualified foreign financial companies)
Any foreign financial company, etc. that obtained approval as a qualified foreign financial company, etc. pursuant to the former Article 179-2(1) and (3) before this Decree enters into force shall be deemed to have obtained approval pursuant to the amended provisions of Article 179-2(1) and (3).
ADDENDA <Presidential Decree No. 35349, Feb. 28, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the following subparagraphs shall enter into force on the date falling under the following classifications: <Amended on Nov. 28, 2025>
| 1. | The amended provisions of Articles 4(3), 53(1), 107(2), 216-2(1), and Appendix 3-3: January 1, 2026; |
| 2. | The amended provisions of Article 26-2(1)2, paragraph (4)2 of that Article, paragraph (5)2 of that Article, Article 26-3(8) through (11), Article 46(9), and Article 189-2(3): July 1, 2025; |
| 3. | The amended provisions of Article 183(5) and (6), Article 207(11), and Article 216-4 of the Enforcement Decree of the Income Tax Act, partially amended by Presidential Decree No. 32516: January 1, 2027; |
| 4. | The amended provisions of Article 88 of the Enforcement Decree of the Income Tax Act, partially amended by Presidential Decree No. 32516 (including the contents respectively amended by Enforcement Decree of the Income Tax Act, partially amended by Presidential Decree No. 33207, and Enforcement Decree of the Income Tax Act, partially amended by Presidential Decree No. 35121): January 1, 2027; |
| 5. | The amended provisions of Article 167-3(1)2i and j: June 4, 2025; |
| 6. | The amended provisions of Appendix 5: January 1, 2028; |
| 7. | The amended provisions of Articles 187-3(2), 202-2(4), and 203: July 1, 2026. |
Article 2 (Applicability to calculation of period of residence)
| (1) | The amended provisions of Article 4(2) shall begin to apply from cases where a person departs from the country in the taxable period in which this Decree enters into force. |
| (2) | The amended provisions of Article 4(3) shall begin to apply to income arising in taxable periods commencing after January 1, 2026. |
Article 3 (Applicability to expansion of scope of non-taxable benefits for overseas workers)
The amended provisions of Article 16(1)2 shall begin to apply to the incomes received during the taxable period to which the enforcement date of this Decree belongs.
Article 4 (Applicability to scope of non-taxable religious income)
The amended provisions of Article 19(3)2 shall begin to apply to the incomes received during the taxable period to which the enforcement date of this Decree belongs.
Article 5 (Applicability to profit margins on savings insurance)
The amended provisions of Article 25 shall begin to apply to income paid after the enforcement of this Decree.
Article 6 (Applicability to retained distributable profits of collective investment vehicles)
The amended provisions of Article 26-2(1)2 and paragraph (5)2 of that Article shall begin to apply to profits arising after July 1, 2025.
Article 7 (Applicability to contribution of gains from transfer of pension real estate to a pension account)
The amended provisions of Article 40-2(2)1 and paragraphs (7) through (11) of that Article shall begin to apply to cases where pension real estate is transferred in the taxable period in which this Decree enters into force.
Article 8 (Applicability to scope of depreciable assets)
The amended provisions of Articles 62(2)2, 63(1)2, 64(1)1 and 9, and paragraph (4)6 of that Article shall begin to apply to cases where depreciation is made in the taxable period in which this Decree enters into force.
Article 9 (Applicability to scope of contributions prescribed in consideration of public interest)
| (1) | The amended provisions of Article 80(1)2 shall begin to apply to year-end tax settlements or final returns on global income tax base after January 1, 2025. |
| (2) | The amended provisions of Article 80(8) shall begin to apply to cases where, after this Decree enters into force, a public interest organization is designated or its designation is revoked, or it comes to fall under any of the subparagraphs of Article 80(2). |
Article 10 (Applicability to submission of documentary evidence for persons with disabilities)
The amended provisions of Article 107(2) shall begin to apply to year-end tax settlements or final returns on global income tax base after January 1, 2026.
Article 11 (Applicability to income deduction for borrowings for housing lease funds)
The amended provisions of Article 112(4)1 shall begin to apply to year-end tax settlements or final returns on global income tax base after January 1, 2025.
Article 12 (Applicability to special cases of foreign tax credit for income paid from indirect investment companies)
| (1) | The amended provisions of Article 117-2(2), (4), and (5), and Article 189-2(2) shall begin to apply to cases where, after this Decree enters into force, an indirect investment foreign corporation tax amount is credited or withheld on income paid from indirect investment companies, etc. |
| (2) | Notwithstanding the amended provisions of Article 117-2(2), (4), and (5), the previous provisions shall apply to the foreign tax credit in cases where a final return on the global income tax base for the relevant taxable period is filed with respect to income accrued before this Decree enters into force. |
Article 13 (Applicability to scope of one house per household exempt from capital gains tax)
The amended provisions of Articles 154(1) and 159-4 shall begin to apply to cases where a sales contract is concluded after this Decree enters into force.
Article 14 (Applicability to transfer of residential house of the housing lease business operator)
The amended provisions of Article 155(20) shall begin to apply to cases where housing is transferred after this Decree enters into force.
Article 15 (Applicability to scope of housing excluded from housing constituting three or more houses owned by one household)
| (1) | The amended provisions of Article 167-3(1)2f shall begin to apply to cases where long-term general private rental housing, etc. that is registered as private rental housing after this Decree enters into force is transferred. |
| (2) | The amended provisions of Article 167-3(1)2i and j shall begin to apply to cases where short-term private rental housing that is registered as private rental housing after June 4, 2025 is transferred. |
Article 16 (Applicability to applications for tax exemption on interest income and capital gains from government bonds, etc. of nonresidents)
The amended provisions of Article 179-4 shall begin to apply to cases where an application for tax exemption is filed after this Decree enters into force.
Article 17 (Applicability to withholding tax rates on receipt of retirement income pension)
The amended provisions of Article 187-3(2) shall begin to apply to cases where tax is withheld on income paid after July 1, 2026. <Amended on Nov. 28, 2025>
Article 18 (Applicability to calculation of withholding tax on income paid by indirect investment companies)
The amended provisions of Article 189-2(3) shall begin to apply to cases where tax is withheld on income paid after July 1, 2025.
Article 19 (Applicability to settlement of retirement income tax) tjd
The amended provisions of Article 202-2(4) and Article 203(1) through (6) shall begin to apply to income paid upon retirement after July 1, 2026 (including cases deemed retirement under Article 43(2)). <Amended on Nov. 28, 2025; Feb. 27, 2026>
Article 20 (Applicability to type of business obligated to issue cash receipts)
The amended provisions of the Appendix 3-3 shall begin to apply to the goods or services supplied after January 1 2026.
Article 21 (Transitional measures concerning dividends from reduction of capital reserves)
Notwithstanding the amended provisions of Article 26-3(6), the dividend amount of income received before this Decree enters into force shall be governed by the previous provisions.
Article 22 (Transitional measures concerning obligation to submit statements of payment for non-residents' domestic-source personal service income)
With respect to the obligation to submit payment statements for Korea-source personal service income accrued before January 1, 2026, the previous provisions shall apply notwithstanding the amended provisions of Article 216-2(1)4.
Article 23 (Transitional measures concerning payment of subsidies)
With respect to the payment of grants claimed before this Decree enters into force, the previous provisions shall apply notwithstanding the amended provisions of Article 221(1).
ADDENDA <Presidential Decree No. 35498, May 7, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on July 19, 2025.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 35608, Jun. 30, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on July 1, 2025; provided, the amended provisions of Article 40-2 shall enter into force on the date of promulgation.
Article 2 (Applicability to contribution of housing differentials to pension account)
The amended provisions of Article 40-2(2) and (8) shall begin to apply to cases where housing is acquired after the enforcement date under the proviso of Article 1 of the Addenda.
Article 3 (Transitional measures concerning profit margins on savings insurance)
With respect to any guaranteed insurance contract concluded before the enforcement of this Decree, which contains provisions for receiving the reduced amount of insurance proceeds in installments in the form of an annuity, the former provisions shall apply notwithstanding the amended provisions of Article 25.
ADDENDUM <Presidential Decree No. 35811, Oct. 1, 2025>
This Decree shall enter into force on the date of its promulgation; provided, among the Presidential Decrees amended pursuant to this Decree, the amendment to a Presidential Decree, promulgated before this Decree enters into force, whose enforcement dates have yet to arrive, shall enter into force on the dates the respective Presidential Decrees enter into force.
ADDENDA <Presidential Decree No. 35878, Nov. 28, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to scope of land appurtenant to houses)
The amended provisions of Articles 154(7), 167-5, and 168-12 shall begin to apply to cases where a transfer is made after this Decree enters into force.
Article 3 (Applicability to Submission of Evidentiary Documents for Income Deductions and Tax Credits)
The amended provisions of subparagraph 3 of Appendix 4 shall begin to apply where evidentiary documents are submitted for income deductions for the income accruing during the taxable period in which this Decree enters into force.
ADDENDA <Presidential Decree No. 35947, Dec. 30, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on January 2, 2026; provided, the amended provisions of a Presidential Decree, promulgated before this Decree enters into force, but the date they are to enter into force, has not yet arrived, among the Presidential Decrees amended under Article 6 of the Addenda, shall enter into force on the date the relevant Presidential Decree enters into force, respectively.
Articles 2 through 5 Omitted.
Article 6 Omitted.
ADDENDA <Presidential Decree No. 36000, Dec. 31, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on January 1, 2011.
Article 2 (Transitional measures concerning dividends from reduction of capital reserves)
Notwithstanding the amended provisions of Article 26-3(6), the dividend amount of income received before this Decree enters into force shall be governed by the previous provisions.
ADDENDA <Presidential Decree No. 36055, Jan. 27, 2026>
Article 1 (Enforcement date)
This Decree shall enter into force on February 1, 2026.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 36129, Feb. 27, 2026>
Article 1 (Enforcement date)
This Decree shall enter into force on the date of its promulgation; provided, the amended provisions of the following subparagraphs shall enter into force on the date specified in the relevant subparagraphs:
| 1. | The amended provisions of Articles 178-8, 178-9(2)3, 178-10, 178-11, and Appendix 3-3: January 1, 2027; |
| 2. | The amended provisions of Article 117-2(3) through (5) (limited to the part concerning the amount of pension income and interest income deductible from the calculated global income tax amount and the part concerning deductions from the calculated retirement income tax amount), Article 189-2(4), and Article 203(7) of the Enforcement Decree of the Income Tax Act, partially amended by Presidential Decree No. 35349: July 1, 2026; |
| 3. | The amended provisions of Appendix 2: March 1, 2026; |
Article 2 (Applicability to tax-exempt childcare leave benefits)
The amended provisions of Article 10-2 shall begin to apply to childcare leave benefits received in the taxable period in which this Decree enters into force.
Article 3 (Applicability to scope of night-shift allowance received by manufacturing workers)
The amended provisions of the former part, with the exception of the subparagraphs, of Article 17(1) shall begin to apply to salary received in the taxable period in which this Decree enters into force.
Article 4 (Applicability to profits from comprehensive investment accounts)
The amended provisions of Article 26-3(12) and (13) shall begin to apply to income paid after this Decree enters into force.
Article 5 (Applicability to receipt date of business income)
The amended provisions of subparagraph 1 of Article 48 shall begin to apply to cases where goods, etc. are sold in taxable periods commencing after this Decree enters into force.
Article 6 (Applicability to calculation of amount of gross income from business activities)
The amended provisions of Article 51(3)4-3 shall begin to apply to cases where the tax base and tax amount are reported, determined, or corrected after this Decree enters into force.
Article 7 (Applicability to special cases concerning exclusion of expenses incurred in relation to business-use passenger vehicles from necessary expenses)
The amended provisions of Article 78-3(4)3 and paragraph (5) of that Article shall begin to apply to cases where the tax base and tax amount are reported, determined, or corrected after this Decree enters into force.
Article 8 (Applicability to special case concerning one house per household for return-to-farm housing)
The amended provisions of Article 155(10)4c shall begin to apply to cases where housing is transferred after this Decree enters into force.
Article 9 (Applicability to time of acquisition of increased area recorded in the cadastral record)
The amended provisions of Article 162(1)9-2 shall begin to apply to cases where the tax base and tax amount are reported, determined, or corrected after this Decree enters into force.
Article 10 (Applicability to special provisions concerning calculation of necessary expenses of capital gains)
The amended provisions of Article 163-2(3) and (4) shall begin to apply to cases where asset is transferred after this Decree enters into force.
Article 11 (Applicability to excluded housing for households owning three or more houses)
The amended provisions of Article 167-3(1)12b2) shall begin to apply to cases where completed but unsold housing is acquired after this Decree enters into force.
Article 12 (Applicability to settlement of tax on foreign-source retirement income)
The amended provisions of Article 203(7) of the Enforcement Decree of the Income Tax Act, partially amended by Presidential Decree No. 35349, shall begin to apply to cases where retirement income tax is settled after July 1, 2026.
Article 13 (Applicability to issuance of cash receipts by cash receipt merchants)
The amended provisions of Article 210-3(13) shall begin to apply to cases where goods or services are provided after this Decree enters into force.
Article 14 (Applicability to small-scale sideline livestock farming by farming households)
The amended provisions of Appendix 1 shall begin to apply to cases where a final return on the global income tax base is filed after this Decree enters into force.
Article 15 (Applicability to adjustment of simplified tax withholding table for earned income)
The amended provisions of Appendix 2 shall begin to apply to the withholding tax after March 1, 2026.
Article 16 (Applicability to types of business obligated to issue cash receipts)
The amended provisions of the Appendix 3-3 shall begin to apply to the goods or services supplied after January 1 2027.
Article 17 Omitted.