| (1) | If the tax base amount of a domestic juristic person for a business year includes any income from sources overseas, and if it has paid or will pay such foreign corporate tax on the income as determined by the Presidential Decree, it may choose to have any of the following methods applied, regardless of the provisions of subparagraph 3 of Article 16: |
| 1. | A method deducting the foreign corporate tax amount from the corporate tax amount for the business year concerned, in the limit of the amount calculated by multiplying the corporate tax amount for the business year calculated under Article 22 by the ratio of the income from sources overseas to the tax base amount for the business year (hereinafter in this Article referred to as a “credit limit”); and |
| 2. | A method including the foreign corporate tax amount paid or to be paid on the income from sources overseas, as a loss, in calculating the income amount in the business year concerned. |
| (2) | If the foreign corporate tax amount paid or to be paid to a foreign government exceeds the credit limit, the amount in excess may be carried forward to business years ending within five years following the business year concerned, and deductable in the limit of the credit limit for the business year to which it is brought forward. |
| (3) | If a domestic juristic person having income from sources overseas enjoys tax exemption or reduction on the income from sources overseas in the other country of a tax treaty, such amount of exemption or reduction shall be considered as the foreign corporate tax amount which enjoys the tax credit or inclusion as loss as referred to in paragraph (1), within the limit as determined by the tax treaty. |
| (4) | If any income amount of a domestic juristic person in a business year includes any share of profits or distribution of surplus received from its foreign subsidiary company (hereinafter in this Article referred to as “received dividends”), the amount of the foreign corporate tax amount levied on the income of such foreign subsidiary company, which is corresponding to the received dividends and calculated as prescribed by the Presidential Decree, shall be considered as the foreign corporate tax amount which enjoys the tax credit or inclusion as a loss as referred to in paragraph (1), within the limit as determined by the tax treaty. 〈Added by Act No. 5033, Dec. 29, 1995〉 |
| (5) | For the purpose of paragraph (4), the term “foreign subsidiary company” means a foreign corporation to which domestic corporations have invested 20/100 or more of the total stocks issued or total shares invested and which satisfies such requirements as determined by the Presidential Decree. Added by Act No. 5033, Dec. 29, 1995 |
| (6) | Matters necessary for the tax credit or inclusion as loss as referred to in paragraphs (1) and (4), shall be determined by the Presidential Decree.〈Amended by Act No. 5033, Dec. 29, 1995> |
[This Article Wholly Amended by Act No. 4804, Dec. 22, 1994]