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INCOME TAX ACT

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INCOME TAX ACT No.21548 20260421
INCOME TAX ACT No.21223 20260101
INCOME TAX ACT No.21065 20251001
INCOME TAX ACT No.20615 20250101
INCOME TAX ACT No.19933 20240101
INCOME TAX ACT No.19590 20240517
INCOME TAX ACT No.16104 20190101
INCOME TAX ACT No.15225 20180101
INCOME TAX ACT No.14569 20180209
INCOME TAX ACT No.14474 20170328
INCOME TAX ACT No.14389 20170101
INCOME TAX ACT No.13797 20170120
INCOME TAX ACT No.13796 20160901
INCOME TAX ACT No.13558 20160101
INCOME TAX ACT No.13426 20160125
INCOME TAX ACT No.13282 20150513
INCOME TAX ACT No.13206 20150310
INCOME TAX ACT No.12989 20150701
INCOME TAX ACT No.12852 20141223
INCOME TAX ACT No.12738 20150604
INCOME TAX ACT No.12420 20150319
INCOME TAX ACT No.12169 20140101
INCOME TAX ACT No.12153 20140101
INCOME TAX ACT No.12030 20130813
INCOME TAX ACT No.11873 20130701
INCOME TAX ACT No.11845 20130829
INCOME TAX ACT No.11652 20130623
INCOME TAX ACT No.11611 20130101
INCOME TAX ACT No.11402 20120701
INCOME TAX ACT No.11274 20120802
INCOME TAX ACT No.11146 20120101
INCOME TAX ACT No.10924 20120726
INCOME TAX ACT No.10907 20120126
INCOME TAX ACT No.10900 20120101
INCOME TAX ACT No.10898 20111026
INCOME TAX ACT No.10408 20110101
INCOME TAX ACT No.10337 20100901
INCOME TAX ACT No.10221 20110101
INCOME TAX ACT No.10175 20100923
INCOME TAX ACT No.9924 20100101
INCOME TAX ACT No.9897 20091231
INCOME TAX ACT No.9785 20100201
INCOME TAX ACT No.9774 20091210
INCOME TAX ACT No.9763 20100310
INCOME TAX ACT No.9672 20090521
INCOME TAX ACT No.9485 20090318
INCOME TAX ACT No.9346 20190101
INCOME TAX ACT No.9270 20090101
INCOME TAX ACT No.8911 20080321
INCOME TAX ACT No.8852 20080229
INCOME TAX ACT No.8825 20080101
INCOME TAX ACT No.8541 20070723
INCOME TAX ACT No.8531 20071020
INCOME TAX ACT No.8524 20080101
INCOME TAX ACT No.8435 20080101
INCOME TAX ACT No.8144 20070101
INCOME TAX ACT No.7908 20060925
INCOME TAX ACT No.7896 20070101
INCOME TAX ACT No.7873 20070101
INCOME TAX ACT No.7837 20060101
INCOME TAX ACT No.7579 20050713
INCOME TAX ACT No.7528 20050531
INCOME TAX ACT No.7335 20050114
INCOME TAX ACT No.7319 20050101
INCOME TAX ACT No.7289 20050701
INCOME TAX ACT No.7120 20050130
INCOME TAX ACT No.7006 20040101
INCOME TAX ACT No.6958 20030730
INCOME TAX ACT No.6916 20031130
INCOME TAX ACT No.6852 20030701
INCOME TAX ACT No.6781 20021218
INCOME TAX ACT No.6557 20020101
INCOME TAX ACT No.6429 20020301
INCOME TAX ACT No.6292 20010101
INCOME TAX ACT No.6276 20001101
INCOME TAX ACT No.6124 20000112
INCOME TAX ACT No.6051 20000101
INCOME TAX ACT No.5994 19990831
INCOME TAX ACT No.5580 19990101
INCOME TAX ACT No.5559 19981117
INCOME TAX ACT No.5552 19981001
INCOME TAX ACT No.5532 19980501
INCOME TAX ACT No.5503 19980401
INCOME TAX ACT No.5493 19971231
INCOME TAX ACT No.5424 19980101
INCOME TAX ACT No.5374 19980101
INCOME TAX ACT No.5291 19970714
INCOME TAX ACT No.5259 19970714
INCOME TAX ACT No.5193 19970101
INCOME TAX ACT No.5191 19970101
INCOME TAX ACT No.5155 19960814
INCOME TAX ACT No.5108 19960630
INCOME TAX ACT No.5031 19960101
INCOME TAX ACT No.4856 19950101
INCOME TAX ACT No.4803 19960101
INCOME TAX ACT No.4744 19940324
INCOME TAX ACT No.4661 19940101
INCOME TAX ACT No.4608 19940701
INCOME TAX ACT No.4561 19940101
INCOME TAX ACT No.4520 19930101
INCOME TAX ACT No.4281 19910101
INCOME TAX ACT No.4251 19900801
INCOME TAX ACT No.4238 19900731
INCOME TAX ACT No.4165 19900101
INCOME TAX ACT No.4163 19900101
INCOME TAX ACT No.4019 19890101
INCOME TAX ACT No.3930 19880101
INCOME TAX ACT No.3902 19880101
INCOME TAX ACT No.3874 19861231
INCOME TAX ACT No.3793 19860101
INCOME TAX ACT No.3576 19830101
INCOME TAX ACT No.3472 19820101
INCOME TAX ACT No.3274 19810101
INCOME TAX ACT No.3271 19810101
INCOME TAX ACT No.3175 19800101
INCOME TAX ACT No.3168 19790814
INCOME TAX ACT No.3098 19781205
INCOME TAX ACT No.3015 19780101
INCOME TAX ACT No.2933 19770101
INCOME TAX ACT No.2932 19770701
INCOME TAX ACT No.2796 19760101
INCOME TAX ACT No.2705 19750101
INCOME TAX ACT No.2636 19731220
INCOME TAX ACT No.2565 19730303
INCOME TAX ACT No.2522 19730216
INCOME TAX ACT No.2315 19720101
INCOME TAX ACT No.2169 19700101
INCOME TAX ACT No.2152 19700101
INCOME TAX ACT No.2131 19690804
INCOME TAX ACT No.2124 19690731
INCOME TAX ACT No.2051 19690101
INCOME TAX ACT No.2048 19681122
INCOME TAX ACT No.2013 19680522
INCOME TAX ACT No.1983 19680101
INCOME TAX ACT No.1966 19680101
INCOME TAX ACT No.1862 19670101
INCOME TAX ACT No.1719 19660101
INCOME TAX ACT No.1185 19630101
INCOME TAX ACT No.821 19620101
INCOME TAX ACT No.693 19610824
INCOME TAX ACT No.624 19610301
INCOME TAX ACT No.568 19610101
INCOME TAX ACT No.529 19600101
INCOME TAX ACT No.503 19590101
INCOME TAX ACT No.415 19570101
INCOME TAX ACT No.343 19541001
INCOME TAX ACT No.319 19540331
INCOME TAX ACT No.200 19510607
INCOME TAX ACT No.199 19510607
INCOME TAX ACT No.163 19510101
INCOME TAX ACT No.134 19500501
INCOME TAX ACT No.33 19490715
CHAPTER I GENERAL PROVISIONS
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Article 1 (Purpose)
The purpose of this Act is to promote balance in the burden of taxation and to contribute to effective raising of the financial revenue by reasonable taxation on income of each individual in accordance with the nature of income and capacity for the burden of each taxpayer.
[This Article Added on Dec. 31, 2009]
[Previous Article 1 moved to Article 2 <Dec. 31, 2009>]
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Article 1-2 (Definitions)
[Previous Article 59-2 moved to Article 59-5 <Jan. 1, 2014>]
1. The term "resident" means any individual who has his or her domicile or place of residence in the Republic of Korea for at least 183 days;
2. The term "nonresident" means any individual who is not a resident;
3. The term "domestic corporation" means any domestic corporation defined in subparagraph 1 of Article 2 of the Corporate Tax Act;
4. The term "foreign corporation" means any foreign corporation defined in subparagraph 3 of Article 2 of the Corporate Tax Act;
5. The term "business entity" means any resident who has business income.
(2) The classification of a domicile or place of residence and a resident or nonresident pursuant to paragraph (1) shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2009]
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Article 2 (Tax liability)
(1) Any of the following individuals shall be liable to pay income tax on his or her income under this Act:
1. A resident;
2. Any nonresident individual who has income from domestic sources.
(2) Any of the following persons shall be liable to pay withholding income tax under this Act:
1. A resident;
2. A nonresident;
3. A domestic corporation;
4. A branch or business office in the Republic of Korea (including a local office and other offices corresponding thereto; hereinafter the same shall apply) of a foreign corporation;
5. Other withholding agents prescribed by this Act.
(3) This Act shall apply to non-juristic organizations, other than organizations deemed corporations under Article 13(4) of the Framework Act on National Taxes (hereafter referred to as "entities deemed corporations"), among non-juristic entities under Article 13(1) of the same Act, considering them as one resident where they have a principal office or substantive place of business management within the Republic of Korea, and as one nonresident in other cases; provided, in cases falling under any of the following subparagraphs, each member of the relevant entity shall, according to income classifications, be obliged to pay income tax or corporate tax [limited to cases where the members thereof are corporations (including an entity deemed as a corporation) under the Corporate Tax Act; hereinafter the same shall apply in this Article] on its income respectively pursuant to this Act or the Corporate Tax Act. <Amended on Dec. 27, 2010; Jan. 1, 2013; Dec. 31, 2018>
1. Where profit distribution ratios among the members are fixed and the profit distribution ratios by member are confirmed;
2. Where profit distribution ratios among the members are not fixed, but, it is confirmed that, in fact, profit is distributed to each member.
(4) Notwithstanding paragraph (3), where profit distribution ratios only among some of all members are confirmed, or profit is distributed only to some members, an obligation to pay income tax or corporate tax shall be as classified in the following: <Added on, Dec. 31, 2018>
1. As for confirmed portions: Each relevant member shall bear an obligation to pay income tax or corporate tax:
2. As for unconfirmed portions: The relevant entity shall bear an obligation to pay income tax by deeming it either as one resident or as one non-resident.
(5) Notwithstanding paragraphs (3) and (4), where a foreign investment vehicle which falls under a non-juristic entity other than an entity deemed as a corporation (referring a vehicle established abroad which conducts investment activities with money collected through investment solicitation, and thereby acquires, disposes, or otherwise manages any investment assets with property value, distributing and attributing the profits to its investors; hereinafter the same shall apply) is deemed a beneficial owner of domestic source income pursuant to Article 119-2(1)2, such foreign investment vehicle shall be obliged to pay income tax as one non-resident. <Added on, Dec. 31, 2018>
[This Article Wholly Amended on Dec. 31, 2009]
[Moved from Article 1; previous Article 2 moved to Article 1-2 <Dec. 29, 2015>]
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Article 2-2 (Scope of tax liability)
(1) When calculating the amount of income on a joint business pursuant to Article 43, each joint business entity concerned shall be liable to pay the relevant tax; provided, where an aggregate tax is levied on the main joint business entity under Article 43(3) (hereafter referred to as "main joint business entity" in this paragraph), any person related to the main joint business entity shall be liable to pay tax jointly with the main joint business entity on the aggregate income within the limit of the amount of his or her income falling under the profit-and-loss distribution ratio pursuant to paragraph (2) of the same Article. <Amended on Jan. 1, 2012; Jan. 1, 2013>
(2) If a tax is levied on the amount of income of a predecessor pursuant to Article 44, the inheritor shall be liable to pay the tax.
(3) Where a donor is deemed to have directly transferred the assets pursuant to Article 101(2), the donor and a donee shall be jointly and severally liable to pay capital gains tax. <Amended on Dec. 29, 2020>
(4) Any person who has income subject to tax withholding pursuant to Article 127, which is not added to the tax base of global income under Article 14(3) or 14(2) pursuant to other Acts, shall be liable to pay such income tax to be withheld. <Amended on Dec. 29, 2020>
(5) In calculating the amount of capital gains on any co-owned asset, each resident who jointly owns the relevant asset shall be liable to pay the tax. <Added on Dec. 19, 2017; Dec. 29, 2020>
[This Article Wholly Amended on Dec. 31, 2009]
[Moved from Article 2 <Dec. 31, 2009>]
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Article 2-3 (Scope of tax liability for income vested in trust asset)
(1) Any income attributable to trust property shall be deemed attributable to the beneficiary who shall receive the benefit of the trust (in the event of the beneficiary's death, his or her heirs).
(2) Notwithstanding paragraph (1), in the case of a trust that meets the requirements prescribed by Presidential Decree, such as the trustor having substantial control over the trust property, the income attributable to the trust property shall be deemed attributable to the trustor. <Amended on Dec. 31, 2023>
[This Article Added on Dec. 29, 2020]
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Article 3 (Scope of taxable income)
(1) A resident shall be imposed tax on all income prescribed by this Act; provided, as for a foreign resident who has had his or her domicile or place of residence for not more than five years in total from ten years before the end of the relevant taxable period, a tax shall be imposed only on his or her income paid in or remitted to the Republic of Korea, in cases of taxable income from foreign sources.
(2) A nonresident shall be imposed tax on Korea-source income only under Article 119.
(3) When applying paragraphs (1) and (2), a partner under subparagraph 2 of Article 100-14 of the Act on Restriction on Special cases Concerning Taxation shall be imposed tax on the income distributed pursuant to Article 100-18(1) of the same Act and income generated in excess of the value of his or her stake on the distribution date of the market price of assets distributed pursuant to Article 100-22(1) of the same Act.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 4 (Classification of income)
(1) Income of a resident shall be classified as follows: <Amended on Jan. 1, 2013; Dec. 29, 2020; Dec. 31, 2024>
1. Global income:
Income excluding the income under subparagraphs 2 and 3 from all income subject to taxation under this Act, which is the sum of the following incomes:
a. Interest income;
b. Dividend income;
c. Business income;
d. Wage and salary income;
e. Pension income;
f. Other income;
2. Retirement income;
2-2. Deleted; <Dec. 31, 2024>
3. Capital gains.
(2) When classifying income under paragraph (1), profits from a trust, excluding trusts described in the following subparagraphs, shall be categorized based on the details of income generated from the property rights transferred to the trustee under Article 2 of the Trust Act or disposed of otherwise: <Amended on Jul. 25, 2011; Dec. 29, 2020; Dec. 31, 2022; Dec. 31, 2024>
1. A trust in which the trustee pays corporate tax on income attributable to the trust property under Article 5(2) of the Corporate Tax Act;
2. An investment trust as defined in Article 9(18)1 of the Financial Investment Services and Capital Markets Act (limited to a collective investment scheme as defined in Article 17(1)5 of the same Act;
3. A special account of an insurance company that runs collective investment business concurrently as defined in Article 251(1) of the Financial Investment Services and Capital Markets Act.
4. A trust in which beneficiary certificates are issued under Article 17(1)5-3.
(3) Income of a nonresident shall be classified pursuant to Article 119.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 5 (Taxable period)
(1) The taxable period of income tax shall be one year from January 1 to December 31.
(2) Where a resident dies, the taxable period shall be from January 1 to the date he or she dies.
(3) Where a resident becomes a nonresident because he or she changes his or her domicile or place of residence overseas (hereinafter referred to as "departure from the Republic of Korea"), the taxable period shall be from January 1 to the date he or she leaves the Republic of Korea.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 6 (Place for tax payment)
(1) The place for payment of income tax of a resident shall be the place of his or her domicile; provided, where he or she has no place of domicile, it shall be the place of his or her residence.
(2) The place for payment of income tax of a nonresident shall be the seat of his or her place of business in the Republic of Korea pursuant to Article 120 (hereinafter referred to as "domestic place of business"); provided, where he or she has two or more domestic places of business, the place for tax payment shall be the principal place of business in the Republic of Korea, and where he or she has no place of business in the Republic of Korea, it shall be the place where income is generated from a source in the Republic of Korea. <Amended on Jan. 1, 2013>
(3) Where the place for tax payment is obscure, it shall be determined as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 7 (Place for tax payment in cases of withholding)
(1) The place for payment of income tax withheld shall be as follows: <Amended on Jan. 1, 2012; Dec. 31, 2023>
1. Where a withholding agent is a resident: It shall be the seat of his or her principal place of business; provided, where he or she deducts withholding tax at a place of business, other than the principal place of business, it shall be the seat of such place of business, and where he or she has no place of business, it shall be the place of his or her domicile or the place of his or her residence;
2. Where a withholding agent is a nonresident: It shall be the seat of his or her principal place of business in the Republic of Korea; provided, where he or she deducts withholding tax at a place of business in the Republic of Korea, other than his or her principal place of business in the Republic of Korea, it shall be the seat of such place of business in the Republic of Korea, and where he or she has no place of business in the Republic of Korea, it shall be his or her place of settlement or his or her place of sojourn;
3. Where a withholding agent is a corporation: It shall be the seat of the head office or the principal office of such corporation;
4. Where a withholding agent is a corporation, and a branch, place of business or any other place of business of such corporation independently manages the accounting affairs according to a self-financing system: Notwithstanding subparagraph 3, it shall be the seat of such place of business (excluding cases where the seat of such place of business is located in a foreign country); provided, in cases prescribed by Presidential Decree, the seat of the head office or the principal office of such corporation may be the place for payment of the income tax withheld;
5. Where a withholding agent under Articles 156, 156-3 through 156-6, and 156-9 has no place for tax payment provided in subparagraphs 1 through 4: It shall be the place prescribed by Presidential Decree.
(2) The place for payment of income tax collected by a taxpayers association pursuant to Article 150 shall be the seat of the relevant taxpayers association.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 8 (Place for tax payment in cases of inheritance)
(1) Where an inheritor of a resident or a nonresident becomes a person liable to pay income tax on the predecessor, due to the death of the resident or the nonresident, the place for payment of such income tax shall be the place reported to the head of the competent tax office by the inheritor or a manager of tax payment as a place for tax payment, as prescribed by Presidential Decree, among the place of domicile or the place of residence of the predecessor, the inheritor or the manager of tax payment.
(2) Where a nonresident appoints a manager of tax payment, the place for payment of income tax of such nonresident shall be the seat of his or her place of business in the Republic of Korea or the place reported to the head of the competent tax office by the manager of tax payment as a place for tax payment, as prescribed by Presidential Decree, among the domicile or the place of residence of such tax manager.
(3) When a report pursuant to paragraph (1) or (2) is made, the reported place shall, thereafter, be deemed the place for payment of income tax of a resident or a nonresident.
(4) If there is no report pursuant to paragraph (1) or (2), the place for payment of income tax of a resident or a nonresident shall be in accordance with Articles 6 and 7.
(5) The place for the payment of income tax for public officials, etc., as prescribed by Presidential Decree, who do not have a domicile in the Republic of Korea shall be determined by Presidential Decree. <Amended on Dec. 31, 2019>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 9 (Designation of place for tax payment)
(1) Notwithstanding Articles 6 through 8, the Commissioner of the National Tax Service or the commissioner of the competent regional tax office may designate the place for tax payment separately, as prescribed by Presidential Decree, in any of the following cases:
1. Where a resident who has business income applies for a seat of his or her place of business as a place for tax payment;
2. As a resident, other than a resident under subparagraph 1, or a nonresident, where the place for tax payment under Articles 6 through 8 is deemed unreasonable in view of the income level of a taxpayer, or inconvenient for him or her to fulfill the tax liability.
(2) Where the place for tax payment is designated pursuant to paragraph (1) or a proposal under subparagraph 1 of the same paragraph is made, but the place for tax payment is not designated as proposed because designation of the seat of a place of business as a place for tax payment is deemed unreasonable for tax administration, the Commissioner of the National Tax Service or the commissioner of the competent regional tax office shall notify a taxpayer, his or her inheritor, a tax manager, or a taxpayers association of such purport in writing, respectively.
(3) Where the grounds for designation of a place for tax payment prescribed in paragraph (1) become extinct, the Commissioner of the National Tax Service or the commissioner of the competent regional tax office shall revoke designation of the place for tax payment.
(4) Even if designation of a place for tax payment pursuant to paragraph (1) is revoked, such revocation of designation shall not affect the validity of any return, request, claim, payment, or any other act on income tax made prior to such revocation.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 10 (Report on change of place for tax payment)
Where a place for tax payment under Articles 6 through 9 is changed, a resident or nonresident shall report to the head of a tax office having jurisdiction over the place for tax payment after such change, within 15 days from the date it is changed, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 11 (Jurisdiction over taxation)
Any income tax shall be levied by the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment pursuant to Articles 6 through 10.
[This Article Wholly Amended on Dec. 31, 2009]
CHAPTER II TAX LIABILITY ON RESIDENT'S GLOBAL INCOME AND RETIREMENT INCOME
SECTION 1 Non-Taxation
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Article 12 (Non-taxable income)
No income tax shall be levied on the following income: <Amended on Dec. 27, 2010; Jul. 25, 2011; Jul. 25, 2011; Sep. 15, 2011; Feb. 1, 2012;Jan. 1, 2013; Mar. 22, 2013; Jan. 1, 2014; Mar. 18, 2014; Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016; Mar. 20, 2018; Dec. 31, 2018; Dec. 10, 2019; Dec. 31, 2019; Jun. 9, 2020; Dec. 29, 2020; Aug. 12. 2022; Dec. 31, 2022; Aug. 8, 2023; Dec. 31, 2023; Dec. 31, 2024; Oct. 1, 2025; Dec. 23, 2025>
1. Profits of a public trust under the Public Trust Act;
2. Any of the following business income:
a. Income generated by having a person utilize a paddy field or a dry field for the production of crops;
b. House rental income of a person who owns only one house (excluding rental income from a house whose assessed value under Article 99 exceeds 900 million won and from a house located overseas) or of a person the total amount of whose gross earnings specified by Presidential Decree during the relevant taxable period does not exceed 20 million won (limited to the income accruing until the taxable period that ends on or before December 31, 2018). In such cases, necessary matters concerning calculation of the number of houses, computation of the house rental income, etc. shall be prescribed by Presidential Decree;
c. Sideline income of a farming or fishing household prescribed by Presidential Decree;
d. Income generated from manufacturing traditional liquor prescribed by Presidential Decree;
e. An amount not exceeding 30 million won a year, generated from felling or transferring forest trees in forest land, the afforestation period of which is at least 5 years. In such cases, necessary matters, such as the afforestation period and the calculation of the amount of tax, shall be prescribed by Presidential Decree;
f. Income generated from business of cultivating plants prescribed by Presidential Decree;
g. Income generated from fishing business or aquaculture business prescribed by Presidential Decree;
3. Any of the following wage and salary income or retirement income:
a. Pay received by a soldier in service prescribed by Presidential Decree;
b. Pay received by a person mobilized according to Acts, from the place of work which mobilizes him or her;
c. A medical care benefit, business suspension benefit, disability benefit, nursing benefit, survivors' benefit, special survivors' benefit, special disability benefit, funeral expenses received by a beneficiary under the Industrial Accident Compensation Insurance Act, or a benefit in the nature of compensation, reparation, or consolation received by an employee or his or her survivors in connection with any injury, disease, or death due to the provision of labor;
d. Compensation for medical treatment, compensation for business suspension, compensation for injury or disease, lump sum compensation, compensation for disability, compensation for bereaved families, compensation for missing, compensation for loss of personal belongings, funeral expenses, and funeral service expenses received by an employee, seaman, or his or her survivors under the Labor Standards Act or the Seafarers’ Act;
e. Unemployment benefits, childcare leave benefits, benefits for reduced working hours for period of childcare, maternity leave benefits, etc. received undere the Employment Insurance Act, subsidies for job change received under the Support for Discharged Soldiers Act, and childcare leave benefits received under the State Public Officials Act, the Local Public Officials Act, or the Public Officials Pension for Private School Teachers and Staff Act, or the Special Post Offices Act (including childcare leave benefits, not exceeding the amount prescribed by Presidential Decree, that are paid pursuant to the articles of incorporation or rules of the relevant institution to clerical staff appointed under Article 70-2 of the Private School Act, and to persons deemed to be faculty or staff members under Article 60-4 of the Private School Teachers and Staff Pension Act);
f. A lump sum allowance of refund (only applicable to that received due to death) or a lump sum allowance for death received under the National Pension Act;
g. Medical treatment expenses for a reason of official duties, medical treatment benefits, a lump-sum payment for permanent disability, a lump-sum payment for permanent disability unrelated to than official duties, a lump-sum payment for permanent disability unrelated to duties, compensations for disability, condolence money, compensations for death, a lump sum allowance for the bereaved family, a lump sum allowance for the bereaved family of a retired person, a lump sum of pension for the bereaved family, a lump sum of pension for the bereaved family of a retired persons, a lump-sum veteran's pension for survivors, a survivor’s lump-sum pension for line-of-duty death, additional money to pension for the bereaved family, additional money to pension for the bereaved family of a retired person, an additional payment to veteran's pension for survivors, special additional money to pension for the bereaved family, special additional money to pension for the bereaved family of a retired person, a special additional payment to veteran's pension for survivors, compensations for the bereaved family of a person who died in the course of performing duties, compensations for the bereaved family of a person who died in relation to duties, compensations for the bereaved family of a person who died in the course of performing dangerous duties, aid money for a disaster, aid money for an accident received under the Public Officials Pension Act, the Public Officials' Accident Compensation Act, the Military Pension Act, the Military Accident Compensation Act, the Pension for Private School Teachers and Staff Act, or the Special Post Offices Act, or other benefits received for a period of a leave of absence taken due to any physical or mental disability or disease;
h. School expenses prescribed by Presidential Decree;
i. Pay in the nature of reimbursement for actual expenses prescribed by Presidential Decree;
j. A salary received by a person prescribed by Presidential Decree, who works for a foreign government (including a local government of a foreign country, and a state government of a foreign country which is a federal state; hereinafter the same shall apply) or an international organization prescribed by Presidential Decree; provided, this shall only apply where the relevant foreign government does not levy income tax on a salary of a public official of the Republic of Korea who works in that country;
k. Veteran payments and educational subsidies received under the Act on the Honorable Treatment of and Support for Persons of Distinguished Services to the State or the Act on Support for Persons Eligible for Veteran’s Compensation;
l. Pension received under the Honorable Treatment of Ex-Presidents Act;
m. Pay received by military personnel or a civilian worker in the military stationed in a foreign country to perform any mission operations;
n. Where military personnel or a civilian worker in the military who serves in a war dies in the line of duty (including death caused by any war wound; hereinafter the same shall apply), pay for the taxable period to which the date he or she dies belongs;
o. Wages prescribed by Presidential Decree received for service furnished abroad or in North Korea under the Inter-Korean Exchange and Cooperation Act;
p. Insurance premium borne by the State, a local government, or an employer under the National Health Insurance Act, the Employment Insurance Act, or the Long-Term Care Insurance Act;
q. An allowance received by a worker prescribed by Presidential Decree in consideration of the level of wages, categories of work, etc., who engages in production and work related thereto, for overtime work, night-shift work, or holiday work prescribed by Presidential Decree;
r. Meals or other food provided to a worker through an in-house cafeteria or similar method, or meal allowances of 200,000 won or less per month received by a worker (limited to workers not provided with meals or other food);
s. The following benefits paid by an employer in relation to the childbirth or child care services of an employee or his or her spouse:
1) The full amount of benefits paid to an employee (excluding those in a special relationship with the employer as prescribed by Presidential Decree) or his or her spouse in up to two installments from the employer within 2 years after the date of childbirth of as prescribed by Presidential Decree (including benefits received between January 1, 2024 and December 31, 2024 for children born after January 1, 2021);
2) A benefit not exceeding 200,000 won per month for each such child, which is paid by an employer in relation to childcare for a child aged 6 years or younger, as at the start date of the relevant taxable period of an employee or his or her spouse (referring to the date on which the child reaches 6 years of age and the period preceding that date; hereafter the same shall apply in this Article and Article 59-4);
t. Pay and a lump sum allowance for retirement received by a prisoner of war of the ROK Armed Forces under the Act on the Repatriation, Treatment of the Republic of Korea Armed Forces Prisoners of War;
u. Scholarship received for labor rendered by undergraduate students, among scholarship received pursuant to Article 28(1) of the Framework Act on Education (limited to undergraduate students attending a university specified in subparagraphs 1 through 4 of Article 2 of the Higher Education Act);
v. The following compensations given in the amount specified by Presidential Decree for an employee's invention defined in subparagraph 2 of Article 2 of the Invention Promotion Act (hereinafter referred to as "compensation for employee’s invention"):
1) Compensation received by an employee, etc. under subparagraph 2 of Article 2 of the Invention Promotion Act (hereafter referred to as "employee, etc." in this Article and Articles 20 and 21) from an employer, etc. under the same subparagraph (hereafter referred to as "employer, etc." in this Article); provided, the compensation received by a person who has a special relationship with the employer, etc., as prescribed by Presidential Decree, shall be excluded herefrom;
2) Compensation that faculty or staff members of a university or students employed by the university receives from an industry-academic cooperation foundation established in the university (hereinafter referred to as "industry-academic cooperation foundation" in this Article) under Article 25 of the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act in accordance with Article 32(1)4 of that Act;
w. Benefits of a welfare nature as prescribed by Presidential Decree;
x. Income under Article 20(1)6 that satisfies all of the following requirements and does not exceed the amount prescribed by Presidential Decree:
1) Goods or services provided to, or purchased with support by, an executive officer or employee (hereinafter referred to as "executive officers, etc." in this Article and Articles 20 and 164-5) for the purpose of personal consumption, which shall not be permitted for resale during the period prescribed by Presidential Decree;
2) There shall be a uniform standard applicable to all executive officers, etc. in relation to the provision of such goods or services.
4. Any of the following pension income:
a. A pension for the bereaved family, a pension for the bereaved family of a retired person, a veteran’s pension for surviviors, a pension for the bereaved family of a person with permanent disability, a survivor’s disability pension, a pension for the bereaved family of a person who died in the course of performing official duties, a pension for the bereaved family of a person who died in relation to duties, a pension for the bereaved family of a person who died in the course of performing dangerous duties, a pension for a person with disability, a pension for a person with permanent disability, a pension for a person with permanent disability unrelated to official duties, a pension for a person with permanent disability unrelated to duties, a pension for wounds, a linked old-age pension for the bereaved family, or a linked pension for the bereaved family of a retired person received under the National Pension Act, the Public Officials Pension Act or the Public Officials' Accident Compensation Act, the Military Pension Act, the Military Accident Compensation Act, the Pension for Private School Teachers and Staff Act, the Special Post Offices Act, or the Act on Aggregation of National Pension and Occupational Pensions (hereinafter referred to as "public pension-related Acts");
b. Deleted; <Jan. 1, 2013>
c. Pensions received under the Industrial Accident Compensation Insurance Act;
d. A pension received by a prisoner of war of the ROK Armed Forces under the Act on the Repatriation, Treatment of the Republic of Korea Armed Forces Prisoners of War;
e. Deleted; <Jan. 1, 2013>
5. Other income falling under any of the following:
a. Veteran payments and educational subsidies received under the Act on the Honorable Treatment of and Support for Persons of Distinguished Services to the State or the Act on Support for Persons Eligible for Veteran’s Compensation, and settlement money, compensation, and other money and valuables received under the North Korean Refugees Protection and Settlement Support Act;
b. A reward and compensation received under the National Security Act;
c. Supplementary prizes received in connection with any decoration under the Awards and Decorations Act, and other prizes and supplementary prizes prescribed by Presidential Decree;
d. Invention remuneration for employee inventions, in an amount prescribed by Presidential Decree, which is paid, after employees, etc. or faculty or staff members of a university retire, by employers, etc. or an industry-academic cooperation foundation, or which is received by a student of a university from an industry- academic cooperation foundation established at the relevant university; provided, invention remuneration for employee inventions received by a person having a special relationship, as prescribed by Presidential Decree, with the employer, etc. or industry-academic cooperation foundation that paid such invention remuneration for employee inventions shall be excluded;
e. Consolatory payments and other money and valuables received by a prisoner of war of the ROK Armed Forces under the Act on the Repatriation, Treatment of the Republic of Korea Armed Forces Prisoners of War;
f. Income generated from transfer of paintings, calligraphic works, or antiques designated as State-designated cultural heritage under the Act on Preservation and Utilization of Cultural Heritage;
g. Income generated from transfer of paintings, calligraphic works, or antiques to a museum or a gallery;
h. The following income, out of income of a religious person referred to in Article 21(1)26:
1) School expenses specified by Presidential Decree as those paid to religion-related workers according to the Korean Standard Classification of Occupations publicly announced by the Minister of Data and Statistics under Article 22 of the Statistics Act (hereinafter referred to as "religion-related worker");
2) Meals or meal allowances specified by Presidential Decree as those provided to religion-related workers;
3) Payments specified by Presidential Decree as those paid to religion-related workers in the nature of reimbursement for actual expenses;
4) The amount granted from a religious organization with respect to childbirth of religious workers or their spouses, or childcare for their children aged 6 or under (to be determined based on the start date of the relevant taxable period), which shall not exceed 200,000 KRW per month for each such child;
5) Benefits given to religion-related workers by providing the housing facilities specified by Decree of the Ministry of Finance and Economy;
i. Allowances received by non-remunerated members of committees, etc. established under statutes, regulations, or ordinances (including members of the National Academy of Sciences and the National Academy of Arts).
[This Article Wholly Amended on Dec. 31, 2009]
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Article 13 Deleted. <Dec. 31, 2009>
SECTION 2 Calculation of Tax Base and Tax Amount
Subsection 1 Common Provisions on Calculation of Tax Amount
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Article 14 (Calculation of tax base)
(1) The tax base of a resident's global income and retirement income shall be calculated separately.
(2) The tax base of global income (hereinafter referred to as "tax base of global income") shall be the amount determined by applying the deductions under Articles 50, 51, 51-3, 51-4, and 52 (hereinafter referred to as "deductions from global income") to the aggregate (hereinafter referred to as "global income") of interest income, dividend income, business income, wage and salary income, pension income, and other income calculated under Articles 16, 17, 19, 20, 20-3, 21, 24 through 26, 27 through 29, 31 through 35, 37, 39, 41 through 46, 46-2, 47, and 47-2. <Amended on Jan. 1, 2013; Jan. 1, 2014>
(3) None of the following income shall be included when calculating the tax base of global income: <Amended on Dec. 27, 2010; Jul. 14, 2011;Jan. 1, 2013; Dec. 23, 2014; Dec. 15, 2015; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2023>
1. Non-taxable income under the Act on Restriction on Special cases Concerning Taxation or Article 12 of this Act;
2. Wage and salary income of a daily employed worker prescribed by Presidential Decree (hereinafter referred to as "daily employed worker");
3. Interest income and dividend income withheld at tax rates under Article 129(2), and excess repayment from a workplace mutual-aid association pursuant to Article 16(1)10;
4. Interest income and dividend income received from a financial company, etc. falling under any item of subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (hereinafter referred to as "financial company, etc.") by an organization making financial transactions with its name declared, as an organization which does not make distributions to its members among the organizations, other than organizations deemed corporations;
5. Income subject to separate taxation under the Act on Restriction on Special cases Concerning Taxation;
6. Interest income and dividend income (excluding dividend income under Article 17(1)8), other than those specified in subparagraphs 3 through 5, the total amount of which does not exceed 20 million won (hereinafter referred to as "standard amount of global taxation on interest income, etc.") and is withheld pursuant to Article 127;
7. House rental income of a person the total amount of whose gross earnings specified by Presidential Decree during the relevant taxable period does not exceed 20 million won (hereinafter referred to as "house rental income subject to separate taxation"). In such cases, matters necessary for calculating house rental income, etc. shall be prescribed by Presidential Decree;
8. Other income falling under any of the following (hereinafter referred to as "other income subject to separate taxation"):
a. Other income under Article 21(1)1 through 8, 8-2, 9 through 20, 22, 22-2 and 26 (excluding income under items d and e), the amount of which under paragraph (3) of the same Article does not exceed three million won and is withheld (including where such income is not withheld because it is subject to Article 127(1)6b) pursuant to Article 127; provided, where a resident with the relevant income intends to include the income when calculating the tax base of global income, such income shall be excluded from other income subject to separate taxation);
b. Other income received other than pensions under Article 21(1)21;
c. Other income under Article 21(1)27 or Article 21(2);
d. Among other income under Article 21(1)2, the lottery prize defined in Article 2 of the Lottery Tickets and Lottery Fund Act;
e. Among other income under Article 21(1), other income similar to those under item d and prescribed by Presidential Decree;
9. The following pension income, out of the pension income under Article 20-3(1)2 and 3 (excluding where a resident with the income referred to in item c intends to include it when calculating the tax base of global income; hereinafter referred to as "pension income subject to separate taxation"):
a. Pension income received as retirement income under Article 20-3(1)2a;
b. Pension income withdrawn in the amount specified in Article 20-3(1)2b or c where the requirements specified by Presidential Decree are met, for the purpose of medical treatment or due to a natural disaster or any other inevitable circumstances;
c. Pension income where the sum of any pension income other than the income referred to in items a and b does not exceed 15 million won per year;
10. Deleted. <Jan. 1, 2013>
(4) When calculating the standard amount of global taxation on interest income, etc. pursuant to paragraph (3)6, no amount to be added pursuant to the proviso to Article 17(3) shall be included in dividend income.
(5) Among income falling under paragraph (3)3 through 6, interest income shall be called as "interest income subject to separate taxation", and dividend income as "dividend income subject to separate taxation."
(6) The tax base on retirement income (hereinafter referred to as "tax base on retirement income") shall be the amount obtained by deducting the retirement income under Article 48 from the amount of retirement income under Article 22.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 15 (Order in calculation of tax amount)
Except as otherwise provided for expressly in this Act, income tax on a resident's global income and retirement income shall be calculated as follows: <Amended on Jan. 1, 2012; Jan. 1, 2014; Dec. 31, 2019; Dec. 31, 2022>
1. The calculated tax on global income and the calculated tax on retirement income under Article 55 shall be calculated, respectively, by applying the tax rate under Article 55(1) (hereinafter referred to as "basic tax rate") to each tax base calculated pursuant to Article 14;
2. The final tax on global income and the final tax on retirement income shall be calculated, respectively, by applying tax credits under Articles 56, 56-2, 57, 57-2, 58, 59 and 59-2 through 59-4 to the amount of each tax calculated under subparagraph 1. In such cases, when a dividend tax credit under Article 56 exists, the amount determined by applying tax credits under Articles 56-2, 57, 57-2, 58, 59 and 59-2 through 59-4 to the amount determined by applying the dividend tax credit to the calculated tax amount or the amount under subparagraph 2 of Article 62, whichever is greater, shall be determined as the tax amount, and the final tax shall be determined by deducting the tax amount reduced or exempted under Article 59-5, if there is such amount to be reduced or exempted;
3. The gross final tax amount on global income and the gross final tax on retirement income shall be calculated, respectively, by adding the penalty tax pursuant to Articles 81, 81-2 through 81-13 of this Act and Articles 47-2 through 47-4 of the Framework Act on National Taxes to the final tax amounts calculated pursuant to subparagraph 2.
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 2 Categories and Amount of Income
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Article 16 (Interest Income)
(1) Interest income shall consist of the following incomes generated during the relevant taxable period: <Amended on Mar. 22, 2010; Jan. 1, 2012; Dec. 20, 2016; Dec. 29, 2020; Dec. 31, 2024>
1. Interest and the discounted value of bonds or securities issued by the State or a local government;
2. Interest and the discounted value of bonds or securities issued by a domestic corporation;
2-2. Deleted; <Dec. 31, 2024>
3. Interest on deposits (including installment savings, security deposits, deposits, and postal transfer; hereinafter the same shall apply) received in the Republic of Korea;
4. Profits made from the credit fraternity or credit installments pursuant to the Mutual Savings Banks Act;
5. Interest and the discounted value of bonds or securities issued by a domestic branch or a domestic business office of a foreign corporation;
6. Interest and the discounted value of bonds or securities issued by a foreign corporation;
7. Interest of deposits received overseas;
8. Profit margins on repurchase of bonds or securities prescribed by Presidential Decree;
9. Profit margins on any of the savings insurances specified by Presidential Decree; provided, profit margins on any of the following insurances shall be excluded herefrom:
a. An insurance the duration of which is at least ten years from the day on which the initial premium is paid to the expiry date or the date of early termination, which meets the requirements prescribed by Presidential Decree;
b. A pension insurance for life that meets the requirements prescribed by Presidential Decree;
10. Excess repayment from a workplace mutual-aid association prescribed by Presidential Decree;
11. Profits made from a non-business loan;
12. Income similar to those specified in subparagraphs 1 through 11, in the nature of the price following any use of money;
13. Profits made from the conduct or trading of the relevant derivatives where the conduct or trading generating the income falling under any of subparagraphs 1 through 12 is merged with the derivatives prescribed in Article 5 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "derivatives") as prescribed by Presidential Decree.
(2) The amount of interest income shall be the total amount of income during the relevant taxable period.
(3) Necessary matters regarding the scope of interest income under the subparagraphs of paragraph (1) and of the amount of interest income under paragraph (2), shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 17 (Dividend income)
(1) Dividend income shall be the following income generated during the relevant taxable period: <Amended on Jan. 1, 2012; Dec. 19, 2017; Dec. 29, 2020; Dec. 31, 2022; Dec. 31, 2024>
1. Dividends or shares of profits or a surplus received from a domestic corporation;
2. Dividends or shares received from an organization deemed a corporation;
2-2. Dividends or shares received from a trust property deemed to be a corporation under Article 5(2) of the Corporate Tax Act (hereinafter referred to as "trust property subject to corporate tax");
3. Deemed dividends;
4. The amount treated as dividend under the Corporate Tax Act;
5. Profits from collective investment schemes prescribed by Presidential Decree, received in Korea or overseas;
5-2. Profits from derivative-linked securities or equity- or derivative-linked bonds prescribed by Presidential Decree, received in Korea or overseas;
5-3. Gains derived from beneficiary certificates prescribed by Presidential Decree, which represent the right to benefit under a trust contract for property, other than money;
5-4. Gains derived from investment contract securities prescribed by Presidential Decree, among investment contract securities under Article 4(6) of the Financial Investment Services and Capital Markets Act;
6. Dividends or shares of profits or a surplus received from a foreign corporation;
7. The amount deemed allotted pursuant to Article 27 of the Adjustment of International Taxes Act;
8. The amount equivalent to the profit-and-loss distribution ratio of joint investment business entities pursuant to Article 43(1), of the amount of income generated from joint business pursuant to Article 43;
9. Income in the nature of distributions of profit, as income similar to income referred to in subparagraphs 1, 2, 2-2, 3 through 5, 5-2 through 5-4, 6, and 7;
10. Profits from transactions or activities of derivatives, where transactions or activities generating the income referred to in any of subparagraphs 1, 2, 2-2, 3 through 5, 5-2 through 5-4, and 6 through 9 are linked to derivatives, as prescribed by Presidential Decree.
(2) Deemed dividend referred to in paragraph (1)3 means any of the following amounts, and shall be deemed paid to the relevant stockholders, employees, and other investors: <Amended on Jan. 1, 2012; Dec. 31, 2024>
1. The amount of money acquired by a stockholder through retirement of stocks or reduction of capital, the value of other assets or the amount of money acquired by an employee or investor through his or her resignation, withdrawal or reduction of investment and the value of other assets exceeding the amount disbursed by the stockholder, employee, or investor to acquire such stocks or equity interests;
2. The value of stocks or investment acquired by capitalizing all or part of a surplus fund of a corporation in the amount of capital or equity interests; provided, this shall not apply where any of the following amounts is capitalized:
a. A capital reserve prescribed by Presidential Decree pursuant to Article 459(1) of the Commercial Act;
b. A revaluation reserve under the Assets Revaluation Act (excluding the amount equivalent to the difference of revaluation of land under Article 13(1)1 of the same Act);
3. The amount of money acquired by a stockholder, an employee, an investor, or a member of a dissolved corporation (including an organization deemed a corporation) through distribution of the remaining assets by dissolution of such corporation, or the value of other assets is the amount exceeding the amount disbursed to acquire the relevant stocks, equity interests, or capital; provided, where a domestic corporation changes its organizational structure, any of the following cases shall be excluded therefrom:
a. Where a corporation changes its organizational structure under the Commercial Act;
b. Where a corporation incorporated under a special law changes its organizational structure, due to the amendment or repeal of the relevant special law, to a company under the Commercial Act;
c. Cases prescribed by Presidential Decree where a domestic corporation changes its organizational structure pursuant to other Acts;
4. The aggregate of the value of stocks or equity interests and money or other property which stockholders, employees, or investors of a corporation which has become extinct by the merger acquire from a corporation which survives merger or a corporation incorporated by the merger due to such merger, which exceed the amount disbursed to acquire stocks or equity interests of the corporation which has become extinct by such merger;
5. Where the stockholding ratio of stockholders, etc. other than a corporation, is increased because the corporation capitalizes pursuant to the items of subparagraph 2 retaining its treasury stocks or shares in investment, the value of stocks, etc. equivalent to the increased ratio of shares;
6. In cases of split of a corporation, the total value of stocks, money, and other assets (hereinafter referred to as "consideration for split") which stockholders of a corporation which is split (hereinafter referred to as "split corporation") or of the other corporation of the split and merger which has ceased to exist, acquire by the split from a corporation incorporated by the split or the other corporation of the split and merger, which exceeds the amount disbursed to acquire stocks (limited to stocks decreased due to retirement, etc. where the split corporation survives) of such split corporation or the other corporation of the split and merger which has ceased to exist.
(3) The amount of dividend income shall be the total amount in the relevant taxable period; provided, with regard to the part, excluding any of the following dividends of those dividend incomes described in paragraph (1)1, 2, 3 and 4 and dividend income prescribed by Presidential Decree of those dividend incomes described in paragraph (1)5, the amount of dividend income shall be the amount calculated by adding the amount equivalent to 11/100 of such dividend income to the total amount of income in the relevant taxable period: <Amended on Dec. 29, 2020; Dec. 31, 2023; Dec. 31, 2024; Dec. 23, 2025>
1. Deemed dividends under paragraph (2)1 (limited to dividends for which corporate tax is not imposed on the income of a corporation, which are due to a decrease in capital);
2. Deemed dividends resulting from the capitalization of gains from the retirement of treasury stocks or equity interests, as referred to in paragraph (2)2a;
3. Deemed dividends by capitalizing the net reassessed value of land under paragraph (2)2b;
4. Deemed dividends under paragraph (2)5;
5. Where dividend income is received from a corporation prescribed by Presidential Decree that has been granted a non-taxation, tax exemption, tax reduction, or income deduction of a corporate tax (including non-taxation, tax exemption, tax reduction, or income deduction under Acts other than the Act on Restriction on Special cases Concerning Taxation) to which the minimum tax under Article 132 of the Act on Restriction on Special cases Concerning Taxation does not apply, an amount calculated by multiplying the amount of such dividend income by the rate prescribed by Presidential Decree.
6. Dividends received by reducing the revaluation reserve under of paragraph (2)2b of this Article, in violation of Article 28(2) of the Assets Revaluation Act;
7. Dividends received by reducing the capital reserve falling under subparagraph 8b and c of Article 18 of the Corporate Tax Act.
(4) In applying paragraph (2)1, 3, 4, and 6, where the amount disbursed to acquire stocks or equity interests is unclear, the par value of such stocks or equity interests (in cases of the stocks without par value, referring to the amount obtained after dividing the capital of a corporation issuing the relevant stocks by the total number of issued stocks as at the date of acquisition of the relevant stocks; hereinafter the same shall apply) or the amount of equity interests shall be deemed the amount disbursed to acquire such stocks or equity interests. <Amended on Jan. 1, 2012; Dec. 31, 2024>
(5) In applying paragraph (2), matters necessary for the calculation, etc. of the acquisition value of stocks, equity interests, and other property, and the amount used to acquire the relevant stocks, equity interests, and other property shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2024>
(6) Matters necessary for the scope of dividend income under the subparagraphs of paragraph (1) and the amount of dividend income under paragraph (3) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 18 Deleted. <Dec. 31, 2009>
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Article 19 (Business income)
(1) Business income shall be the following income generated during the relevant taxable period; provided, the foregoing provisions shall not apply where tax on such business income is withheld or a final return on the tax base of such business income has been filed, by treating that income as other income under Article 21(1)8-2: <Amended on Jan. 1, 2014; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019>
1. Income generated from agriculture (excluding grain- or other food-crop-cultivating business, among crop-cultivating business; hereinafter the same shall apply), forestry, and fisheries;
2. Income generated from mining;
3. Income generated from the manufacturing industry;
4. Income generated from electricity, gas, steam, or air conditioning and supply business;
5. Income generated from water supply, sewage and waste disposal, or raw material recycling business;
6. Income generated from the construction industry;
7. Income generated from wholesale business and retail business;
8. Income generated from transportation and warehousing business;
9. Income generated from lodging business and restaurant business;
10. Income generated from information and communications business;
11. Income generated from finance business and insurance business;
12. Income generated from real estate business; provided, any income generated by providing or lending an easement or a surface right (including a right provided for the space above or below the surface of land) with respect to a public works project under Article 4 of the Act on Acquisition of and Compensation for Land for Public Works Projects shall be excluded herefrom;
13. Income generated from speciality, science, and technology service business (excluding research and development business prescribed by Presidential Decree);
14. Income generated from business facility management, business supporting service business or leasing service business;
15. Income generated from educational service business (excluding educational institutions prescribed by Presidential Decree);
16. Income generated from health business and social welfare services business (excluding social welfare business prescribed by Presidential Decree);
17. Income generated from services business related to art, sports, and leisure;
18. Income generated from an association and organization (excluding associations and organizations prescribed by Presidential Decree), repair, and other private service business;
19. Income generated from family-employed activity;
20. Income that a person subject to double-entry bookkeeping under Article 160(3) gains from transferring any of the tangible business-use assets specified by Presidential Decree, such as vehicles or delivery equipment; provided, any income constituting capital gains under Article 94(1)1 shall be excluded herefrom;
21. Income obtained from the continuous and repeated activity under a person's own calculation and responsibility for profit-making purposes, as income similar to those specified in subparagraphs 1 through 20.
(2) The amount of business income shall be calculated by deducting necessary expenses used for business from the total income in the relevant taxable period, and where the necessary expenses exceed the total income, such excess shall be referred to as "loss."
(3) Except as otherwise provided in this Act, the scope of business under each subparagraph of paragraph (1) shall be in accordance with the Korea Standard Industry Code announced by the Minister of Data and Statistics pursuant to Article 22 of the Statistics Act, and matters necessary for the scope of other business income shall be prescribed by Presidential Decree. <Amended on Oct. 1, 2025>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 20 (Wage and salary income)
(1) Wage and salary income shall consist of the following incomes generated during the relevant taxable period: <Amended on Dec. 20, 2016; Dec. 31, 2024>
1. A salary, pay, remuneration, annual allowance, wages, bonus, allowance, and other benefits in the nature similar thereto, received by offering labor;
2. Income received as a bonus pursuant to a resolution at a general meeting of stockholders or a general meeting of members of a corporation, or a deliberative organ corresponding thereto;
3. The amount treated as a bonus under the Corporate Tax Act;
4. Income received due to retirement, however, which is not included in the retirement income;
5. A compensation that an employee, etc. or a faculty or employee of a university receives for employee's invention (excluding compensations for employee's invention under Article 21(1)22-2).
6. Benefits obtained by executive officers, etc. engaged in the business place of a business entity or corporation (including affiliated companies under the Monopoly Regulation and Fair Trade Act) by being provided with, or supported in purchasing, goods or services produced or supplied by such business entity or corporation at a price lower than fair market value, as prescribed by Presidential Decree.
(2) The amount of wage and salary income shall be calculated by deducting the amount pursuant to Article 47 from the total income (excluding non-taxable income; hereinafter referred to as "total amount of pay") under the subparagraphs of paragraph (1).
(3) Matters necessary for the scope of wage and salary income shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 20-2 Deleted. <Dec. 30, 2006>
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Article 20-3 (Pension income)
(1) Pension income shall be the following income, generated during the relevant taxable period: <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 23, 2014; Dec. 31, 2023>
1. Various pensions received pursuant to the public pension-related Acts (hereinafter referred to as "public pension income");
2. Any of the following amounts of pension withdrawn in the form of pension, etc. prescribed by Presidential Decree (hereinafter referred to as "receipt of pension"; withdrawal of money other than the receipt of pension shall be referred to as "receipt other than pension"), regardless of the nature of the income, from a pension account (referring to the account specified by Presidential Decree as an account opened under the title of "pension savings" (hereinafter referred to as "pension savings account") or the account specified by Presidential Decree as an account opened in order to receive retirement pensions (hereinafter referred to as "retirement pension account"); hereinafter the same shall apply):
a. Retirement income not withheld pursuant to Article 146(2);
b. The amount contributed to a pension account for which a tax credit has been granted under Article 59-3;
c. An amount increased according to the results of the management of a pension account;
d. Other incomes prescribed by Presidential Decree, the income tax of which is deferred after they are transferred to or deposited in a pension account;
3. Income prescribed by Presidential Decree, which is similar to those specified under subparagraph 2 and is received in the form of pension.
(2) Public pension income shall be the pension income received based on either the contributions to pension and employer contributions (including contributions by the State or a local government; hereinafter the same shall apply) paid on or after January 1, 2002, or labor offered on or after January 1, 2002. <Amended on Jan. 1, 2013>
(3) The amount of pension income shall be calculated by deducting pension income under Article 47-2 from the total income under the subparagraphs of paragraph (1) (excluding income excluded from pension income under paragraph (2) and non-taxable income; hereinafter referred to as "total amount of pension").
(4) The scope and calculation method of pension income and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 21 (Other income)
(1) Other income shall consist of the following incomes, other than interest income, dividend income, business income, wage and salary income, pension income, retirement income, and capital gains: <Amended on Jul. 31, 2009; ;Dec. 27, 2010; Jan. 1, 2012;Jan. 1, 2013; Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Aug. 27, 2019; Dec. 29, 2020; Jul. 18, 2023; Dec. 31, 2024>
1. A prize, award, reward, compensation for service, or money and valuables corresponding thereto;
2. Money and other valuables obtained through any lottery ticket, premium ticket, or other lottery tickets;
3. Financial profits obtained by participating in any act (whether the relevant act is legal or illegal shall not be taken into account) prescribed by the Act on Special Cases concerning Regulation and Punishment of Speculative Acts;
4. Refunds received by a purchaser of a horse racing ticket pursuant to the Korean Racing Authority Act, a winner wager ticket pursuant to the Bicycle and Motorboat Racing Act, a bullfighting match wager ticket pursuant to the Traditional Bullfighting Match Act, and a sports promotion wager ticket pursuant to the National Sports Promotion Act (whether the relevant underlying act is legal or illegal shall not be taken into account);
5. Money and other valuables received by a person, other than an author, stage performer, sound record producer, or broadcasting business entity, in consideration of transfer or use of copyrights or neighboring rights;
6. Money and other valuables received in consideration of transfer, lease, or use of any of the following assets or rights:
a. Movie films;
b. Tapes or films for the radio and television broadcast;
c. Others prescribed by Presidential Decree, similar to those specified in items a and b;
7. Money and other valuables received in consideration of transfer or lease of mining rights, fishing rights, aquaculture rights, industrial property rights, and industrial information, industrial secrets, trademark rights, business rights (including the rights to lease a store prescribed by Presidential Decree), rights incidental to permission to collect earth, sand, and rocks, rights to develop and use underground water, and other assets or rights similar thereto;
8. Money and other valuables received as rent for a temporary lease of any goods (including securities) or premises;
8-2. Money and goods received as a usage fee not exceeding the extent prescribed by Presidential Decree by leasing goods or place through a person who conducts mail order brokerage activities pursuant to the Act on the Consumer Protection in Electronic Commerce;
9. Income generated by providing or lending an easement or a surface right (including a right provided for the space above or below the surface of land) with respect to a public works project under Article 4 of the Act on Acquisition of and Compensation for Land for Public Works Projects;
10. Income received for a breach or cancellation of a contract, which falls under any of the following:
a. Penalty;
b. Indemnity;
c. Interest received along with the return of unjust enrichment;
11. Where any compensation is received, or any new ownership is acquired, for finding any lost articles or buried property, such compensation or assets;
12. Assets, the ownership of which is acquired by possessing an object which has no owner;
13. Money and other valuables received by a person related to a resident, nonresident, or corporation prescribed by Presidential Decree from the relevant resident, nonresident, or corporation on the reason of such special relation, which are not deemed pay, a dividend, or donation, but an economic profit;
14. Money and other valuables for prize winning, allotment, or others corresponding thereto (hereinafter referred to as "prize money and other valuables, etc.") received by participating in acts using slot machines (including video games), coin tossing machines, and other similar machines and tools (hereinafter referred to as "slot machines, etc.");
15. Income received in the capacity of the original author for creative works of literature, science, fine arts, music, or photography (including illustrations or cartoons printed in periodicals under the Act on the Guarantee of Freedom and Functions of Newspapers and translation of Korean creative works or classics into foreign languages or Korean), which falls under any of the following:
a. Manuscript fees;
b. Royalties paid for use of copyrighted materials;
c. Consideration received for creative works of fine arts, music, or photography;
16. A brokerage fee on a property right;
17. An honorarium;
18. A lump sum allowance received for the cancellation of account of mutual aid fund for small corporations or small enterprises prescribed by Presidential Decree;
19. The price received for temporarily furnishing any of the following personal services (excluding services governed by subparagraphs 15 through 17):
a. Services receiving the price, such as a lecturer's fee, etc. for a lecture to many persons outside of an employment relationship;
b. Services, such as commentation, enlightenment, or screening of performances, etc. on the radio, television broadcasting, etc. for remuneration or the price in the nature similar thereto;
c. Services rendered by a lawyer, certified public accountant, tax accountant, architect, surveyor, patent lawyer, or a person having professional knowledge or special expertise using his or her knowledge or expertise for remuneration or consideration;
d. Other services rendered outside of an employment relationship for an allowance or the price in the nature similar thereto;
20. Income treated as other income pursuant to Article 67 of the Corporate Tax Act;
21. Income received in the form other than pension, regardless the nature of such income, out of the money prescribed in Article 20-3(1)2b and c;
22. Gains from exercising after retirement stock options granted before retirement, or from exercising those granted outside of an employment relationship;
22-2. A compensation for employee's invention that an employee, etc. or a faculty or employee of a university receives after retirement;
23. Bribes;
24. Money and other valuables received by means of acceptance of a bribe for good offices or acceptance of a bribe for breach of trust;
25. Deleted; <Dec. 29, 2020>
26. Income that a religion-related worker receives from any of the religious organizations specified by Presidential Decree in relation of the execution of a religious rite or any other activity as a religion-related worker (hereinafter referred to as "religious person's income");
27. Income generated by transferring or lending virtual asset as defined in subparagraph 1 of Article 2 of the Act on the Protection of Users of Virtual Assets (hereinafter referred to as "virtual assets") (hereinafter referred to as "virtual asset income").
(2) Notwithstanding paragraph (1) and Article 19(1)21, income generated from the transfer of paintings, calligraphic works, and antiques as prescribed by Presidential Decree (excluding income generated from cases prescribed by Presidential Decree, such as those having a business place) shall be classified as other income. <Added on Dec. 29, 2020>
(3) The amount of other income shall be calculated by deducting necessary expenses, from the total amount of income generated in the relevant taxable period. <Amended on Dec. 29, 2020>
(4) Where income tax is withheld from a religious person's income under paragraph (1)26 or a final return on the tax base of a religious person's income has been filed, treating the income as wage and salary income under Article 20(1), such income shall be deemed wage and salary income. <Added on Dec. 15, 2015; Dec. 29, 2020>
(5) The detailed scope and method of calculation of other income, and other necessary matters, shall be prescribed by Presidential Decree. <Amended on Dec. 15, 2015; Dec. 29, 2020>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 22 (Retirement income)
(1) Retirement income shall be the following income, generated in the relevant taxable period: <Amended on Jan. 1, 2013>
1. A lump sum allowance received pursuant to the public pension-related Acts;
2. A lump sum allowance received upon retirement based of the amount to be borne by users;
3. Other incomes prescribed by Presidential Decree, which are similar to those under subparagraphs 1 and 2.
(2) The retirement income under paragraph (1)1 shall be the lump sum payment received based on either contributions to pension or employer contributions made on or after January 1, 2002, or on the labor offered on or after January 1, 2002. <Amended on Jan. 1, 2013>
(3) The amount of retirement income shall be the sum of the income specified in each subparagraph of paragraph (1) (excluding the amount of non-taxable income); provided, if the amount of retirement income of any of the executives specified by Presidential Decree (excluding the amount under paragraph (1)1; referring to the amount after deducting the amount of retirement income specified by Presidential Decree, if the executive is entitled to receiving the retirement income, supposing that the executive retired on December 31, 2011) exceeds the amount calculated in accordance with the following formula, such excess shall be deemed wage and salary income, notwithstanding paragraph (1): <Amended on Jan. 1, 2012;Jan. 1, 2013; Dec. 23, 2014; Dec. 31, 2019>
The annual average amount of gross pay earned during the three-year period retroactive to December 31, 2019 (if the period of employment is less than three years, the applicable employment period) x 1/10 x The period of employment from January 1, 2012 to December 31, 2019/12 x 3 + The annual average amount of gross pay earned during the three-year period retroactive to the date of retirement (if the period of employment from January 1, 2020 to the date of retirement is less than three years, the applicable employment period) x 1/10 x The period of employment after January 1, 2020 x 2
(4) For the purpose of applying the proviso to paragraph (3) and the formula in paragraph (3), the employment period and gross pay shall be calculated as follows: <Amended on Dec. 23, 2014>
1. Employment period: It shall be calculated by the number of months. In such cases, a period of less than one month shall be deemed one month;
2. Gross pay: Wage and salary incomes under Article 20(1)1 and 2, including salary and bonus, (excluding non-taxable income under Article 12) shall be aggregated.
(5) Deleted. <Jan. 1, 2013>
(6) The scope and method of calculation of retirement income, and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 23 Deleted. <Dec. 30, 2006>
SECTION 3 Calculation of Amount of Income
Subsection 1 Total Amount of Income
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Article 24 (Calculation of total amount of income)
(1) The total amount of income (including the total amount of pay and pension; hereinafter the same shall apply) on each type of income of a resident shall be the total amount of the amount earned or to be earned in the relevant taxable period.
(2) In cases falling under paragraph (1), when he or she earns something, other than money, the amount of such income shall be calculated based on the value at the time of such transactions.
(3) When calculating the total amount of income, matters necessary for the scope and calculation of the amount earned or to be earned shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 25 (Special cases concerning calculation of total amount of income)
(1) Where a resident lends any real estate or any right therein and receives guaranty money, security money for lease on a deposit basis, or money in similar nature (hereafter referred to as "guaranty money, etc." in this paragraph), the amount calculated as prescribed by Presidential Decree shall be included in the total amount of income when calculating the amount of business income; provided, the cases where a resident receives guaranty money, etc. for lending a house (a house with an area of not larger than 40 square meters per unit or per household only for dwelling purpose and the assessed value of which does not exceed 200 million won for the relevant taxable period shall not be included in the number of houses until December 31, 2026) means a case specified in the following subparagraphs, and the calculation of the number of houses and other necessary matters shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2012; Jan. 1, 2014; Dec. 20, 2016; Dec. 31, 2018; Dec. 8, 2021; Dec. 31, 2023>
1. Where he or she owns at least 3 houses and the total amount of security deposits, etc. of the relevant houses exceeds 300 million won;
2. Where he or she owns 2 houses (the number of houses for which the standard market price of the relevant taxable period does not exceed 1.2 billion won shall not be included in the number of houses) and the total amount of security deposits, etc. of the relevant houses exceeds 300 million won or more, which is the amount prescribed by Presidential Decree.
(2) Even where a resident consumes any inventory assets or trees for housekeeping purposes or supplies them to his or her employees or other persons, the amount equivalent to the value thereof as at the time he or she consumes or supplies shall be included in the total amount of income when calculating the amount of business income or the amount of other income in the taxable period in which the date he or she consumes or supplies falls.
(3) Deleted. <Dec. 19, 2017>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 26 (Exclusion from total income)
(1) No amount appropriated for another tax, out of the income tax or the individual local income tax refunded or refundable to a resident, shall be included in the total income in calculating the amount of income for the relevant taxable period. <Amended on Jan. 1, 2014>
(2) No amount used to offset a loss carried forward pursuant to Article 45(3), among the value of assets received gratuitously by a resident (excluding amounts, as prescribed by Presidential Decree, that a person subject to double-entry bookkeeping as defined in Article 160 receives free of charge from the State, a local government, or a public institution, including national subsidies as defined in Article 32) and the amount of liabilities decreased by waiver or extinguishment of debts, shall be included in the total income when calculating the amount of income generated in the relevant taxable period. <Amended on Dec. 31, 2019>
(3) No amount of income carried forward from the preceding taxable period when calculating the amount of business income of a resident, shall be included in the total income when calculating the amount of income generated in the relevant taxable period.
(4) When a resident who conducts agriculture, forestry, fishery, mining, or manufacturing business uses agricultural products, prizes, livestock products, forest products, marine products, mining products, earth, sand, and rock he or she mines, catches, cultivates, harvests, or collects, or products he or she produces, as raw materials or fuel for manufacture of other products he or she produces, no amount equivalent to the part used thereof shall be included in the total income when calculating the amount of income generated in the relevant taxable period.
(5) Where a resident who conducts construction business uses goods he or she produces as materials for construction works for which he or she contracted, no amount equivalent to the part used thereof shall be included in the total income when calculating the amount of income generated in the relevant taxable period.
(6) Where a resident who conducts electricity, gas, steam, or water supply business uses the electricity, gas, steam, or water he or she produces for the power, fuel, or water for other business he or she conducts, no amount equivalent to the part used thereof shall be included in the total income when calculating the amount of income generated in the relevant taxable period.
(7) No individual consumption tax or liquor tax paid or to be paid by a resident liable to pay such individual consumption tax or liquor tax imposed on the amount earned or to be earned as his or her total income, shall be included in the total income when calculating the amount of income for the relevant taxable period; provided, this shall not apply to any tax amount he or she shall pay for raw materials, fuel, or any other goods purchased, imported, or used.
(8) No additional payments on the refund of national taxes under Article 52 of the Framework Act on National Taxes, additional dues on the local tax refund under Article 62 of the Framework Act on Local Taxes, and interest on the refund of erroneous payments, shall be included in the total income when calculating the amount of income generated during the relevant taxable period. <Amended on Dec. 27, 2010; Dec. 27, 2016>
(9) No input tax on value-added tax shall be included in the total income when calculating the amount of income generated in the relevant taxable period.
(10) No amount of tax refunded to an oil dealer pursuant to Article 106-2(2) of the Act on Restriction on Special cases Concerning Taxation, shall be included in the total income when calculating the amount of income generated in the relevant taxable period.
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 2 Necessary Expenses
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Article 27 (Calculation of necessary expenses of business income)
(1) The amount to be included in necessary expenses when calculating the amount of business income shall be the total amount of ordinary expenses generally accepted as expenses corresponding to the total income generated in the relevant taxable period. <Amended on Dec. 27, 2010>
(2) With regard to expenses corresponding to the total amount of income before the relevant taxable period and determined in such taxable period, only expenses not calculated as necessary expenses before such taxable period shall be deemed necessary expenses in such taxable period.
(3) Matters necessary for the calculation of necessary expenses shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 28 (Calculation of allowance for bad debts as necessary expenses)
(1) Where a business entity calculates an allowance for bad debts for accounts receivable, other receivables or other bonds corresponding thereto as necessary expenses, such allowance for bad debts shall be included in necessary expenses when calculating the amount of income generated in the relevant taxable period within the extent prescribed by Presidential Decree.
(2) The balance of the allowance for bad debts included in necessary expenses pursuant to paragraph (1) shall be included in the total income when calculating the amount of income in the following taxable period.
(3) Matters necessary concerning accounting treatment of an allowance for bad debts shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 29 (Calculation of reserves for retirement benefits as necessary expenses)
(1) Where a business entity has calculated a reserve for retirement benefits as necessary expenses to be appropriated for retirement benefits for employees, such reserve for retirement benefits shall be included in necessary expenses when calculating the amount of income in the relevant taxable period within the extent prescribed by Presidential Decree.
(2) Matters necessary concerning accounting treatment of reserves for retirement benefits shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 30 Deleted. <Apr. 10, 1998>
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Article 31 (Calculation of necessary expenses for value of assets acquired with gains on insurance settlement)
(1) Where a business entity acquires assets of the same kind as a replacement for destroyed tangible assets with insurance money received due to the destruction of or damage to the tangible assets, or improves the tangible assets acquired as a replacement or damaged assets, the amount equivalent to gains on insurance settlement used for the acquisition or improvement of such assets, of the value of the relevant assets, may be included in necessary expenses when calculating the amount of income generated in the taxable period to which the date he or she receives insurance money belongs, as prescribed by Presidential Decree. <Amended on Dec. 31, 2019>
(2) Where he or she is unable to acquire or improve the relevant assets pursuant to paragraph (1) in the taxable period to which the date he or she receives insurance money belongs, paragraph (1) shall apply mutatis mutandis to only such assets acquired or imported within two years from the date of commencement of the taxable period following such taxable period.
(3) Any person who intends to include the amount equivalent to gains on insurance settlement in necessary expenses pursuant to paragraph (2) shall submit a plan for use of such insurance money received to the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree. <Amended on Dec. 31, 2019>
(4) If any person who counts the amount equivalent to gains on insurance settlement in necessary expenses pursuant to paragraph (2) falls under any of the following subparagraphs, such amount shall be included in the total amount of income in the taxable period when the relevant cause thereof has taken place: <Amended on Dec. 31, 2019>
1. Where he or she fails to use the amount equivalent to gains on insurance settlement within the deadline to acquire or improve assets under paragraph (1);
2. Where he or she discontinues the relevant business in the period under paragraph (2).
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 32 (Calculation of value of assets for business acquired with national subsidies as necessary expenses)
(1) Where a business entity receives a subsidy under the Subsidy Management Act (hereinafter referred to as "national subsidy") and disburse it for the acquisition or improvement of assets for business purpose, or acquires or improves the assets for business purposes, and receives a national subsidy therefor afterwards, the amount equivalent to a national subsidy disbursed for the acquisition or improvement of assets for business purposes may be included in necessary expenses when calculating the amount of income in the taxable period to which the date he or she receives such national subsidy belongs, as prescribed by Presidential Decree. <Amended on Dec. 27, 2010; Jul. 25, 2011>
(2) Where he or she is unable to acquire or improve assets for business under paragraph (1) in the taxable period to which the date he or she receives a national subsidy belongs, paragraph (1) shall apply mutatis mutandis to only such assets acquired or imported by no later than the end of the taxable period following such taxable period. In such cases, where he or she fails to use the national subsidy by the deadline due to extenuating circumstances prescribed by Presidential Decree, such as delay in permission or approval of construction work, the end of the taxable period to which the date the relevant circumstance ceases to exist belongs shall be the deadline.
(3) Any person who intends to include a national subsidy in necessary expenses pursuant to paragraph (2) shall submit a plan for use of such national subsidy to the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree.
(4) If any person who has included a national subsidy in necessary expenses pursuant to paragraph (1) or (2) falls under any of the following, the amount equivalent to such national subsidy shall be included in the total income in the taxable period when the relevant cause thereof has taken place:
1. Where he or she fails to use the national subsidy for the acquisition or improvement of assets for business under paragraph (1) by the deadline;
2. Where he or she discontinues the relevant business by the deadline under paragraph (2).
[This Article Wholly Amended on Dec. 31, 2009]
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Article 33 (Exclusion from necessary expenses)
(1) Any of the following amounts, out of the amount that a resident has paid or shall pay for the relevant the taxable period, shall not be included in necessary expenses in calculating the amount of business income: <Amended on Dec. 27, 2010; Jan. 1, 2014; Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2022; Dec. 31, 2024>
1. Income tax (including the amount of foreign income tax in the case of applying tax credit under Articles 57 and 57-2) and individual local income tax;
2. A fine, penalty (including the amount equivalent to a fine or a penalty by notification), and fine for negligence;
3. Penalty taxes and forced collection charges under the National Tax Collection Act and other Acts related to taxes;
4. Tax (including penalty tax) paid or payable due to nonperformance of the liability for collection under Acts related to taxes;
5. Expenses for domestic affairs prescribed by Presidential Decree, and expenses related thereto;
6. An amount exceeding the amount calculated, as prescribed by Presidential Decree, as depreciation expense of depreciable assets appropriated in each taxable period;
7. An appraisal loss of assets excluding assets pursuant to the proviso to Article 39(3) and the subparagraphs of paragraph (4) of the same Article;
8. An amount in arrears of the individual consumption tax or liquor tax on the products carried out, but unsold; provided, this shall not apply where an amount equivalent to such amount of tax is added to the value of such products;
9. Input tax on value-added tax; provided, the amount of tax in cases of value-added tax exempted or in other cases prescribed by Presidential Decree, and value-added tax paid by a person eligible for simplified taxation of value-added tax shall be excluded;
10. Interest on a loan appropriated for construction funds prescribed by Presidential Decree of the loans;
11. Interest on loans with unclear creditors as prescribed by Presidential Decree;
12. Utility charges that are not mandatory under statutes and regulations or that are imposed as a disciplinary measure on the grounds of non-performance of duties or violation of prohibited or restricted acts under statutes and regulations;
13. The amount, among expenses disbursed in each taxable period, deemed not directly related to the business prescribed by Presidential Decree;
14. Prepaid expenses;
15. Compensation for damage to be paid by infringing another person's right on purpose or by gross negligence in connection with business.
(2) Where paragraph (1)5, 10, 11, and 13 are applicable at the same time, they shall be applied in the order prescribed by Presidential Decree.
(3) Matters necessary for exclusion from necessary expenses pursuant to paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 33-2 (Special cases concerning exclusion of expenses related to business-use passenger vehicles from necessary expenses)
(1) Any amount other than the amount of use for business purpose specified by Presidential Decree (hereafter referred to as "amount of business use" in this Article), among expenses specified by Presidential Decree, including depreciation cost, rents, and fuel expenses, (hereafter referred to as "expenses related to business-use passenger vehicles" in this Article and Article 81-14) reflected or paid as necessary expenses during the relevant taxable period for passenger vehicles falling under Article 1(2)3 of the Individual Consumption Tax Act (excluding passenger vehicles specified by Presidential Decree as those directly used for transportation business, motor vehicle distribution business, or any similar business; hereafter referred to as "business-use passenger vehicles" in this Article and Article 81-14) that a person subject to double-entry bookkeeping under Article 160(3) acquired or leased to use them during the relevant taxable period, shall not be included in necessary expenses when calculating the amount of business income for the relevant taxable period. <Amended on Dec. 8, 2021>
(2) In applying paragraph (1), if either of the following costs, out of the amount used for business purpose, exceeds eight million won (if the relevant taxable period is less than one year or if a person owned or leased such a vehicle during a certain period less than the relevant taxable period, the amount shall be calculated by multiplying eight million won by the number of months during the period of owing or leasing the vehicle and then by dividing the sum by 12) during the relevant taxable period, such excess (hereafter referred to as "excess of the maximum limit on depreciation cost" in this Article) shall not be included in necessary expenses for the relevant taxable period; but shall be carried over and included in necessary expenses by the method prescribed by Presidential Decree: <Amended on Dec. 19, 2017>
1. Annual depreciation cost for each business-use passenger vehicle;
2. An amount equivalent to the depreciation cost specified by Presidential Decree, out of annual rents for each business-use passenger vehicle.
(3) The amount exceeding eight million won for each business-use passenger vehicle, out of the loss incurred to a person subject to double-entry bookkeeping under Article 160(3) by disposing of a business-use passenger vehicle, shall be included in necessary expenses by carrying forward the amount or by the method prescribed by Presidential Decree.
(4) A person subject to double-entry bookkeeping under Article 160(3) who includes expenses, etc. related to business-use passenger vehicles in necessary expenses under paragraphs (1) through (3), shall submit a detailed statement of the expenses, etc. related to business-use passenger vehicles to the head of the tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree.
(5) The method for calculating the amount of business use, the method for carrying over an excess of the maximum limit on depreciation cost, and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Added on Dec. 15, 2015]
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Article 34 (Exclusion of donations from necessary expenses)
(1) "Donation" in this Article means the amount of money a business entity disburse gratuitously without direct relation to its business (including the amount of money recognized as actual gift through trade prescribed by presidential Decree) <Added on, Dec. 31, 2018>
(2) Special donations as described in subparagraph 1, out of the donations contributed by a business entity in the taxable period and the donations carried over under paragraph (5), shall be included in necessary expenses when calculating the amount of business income for the relevant taxable period within the permissible limit for necessary expenses calculated under subparagraph 2, and the amount exceeding such limit shall not be included in necessary expenses: <Amended Dec. 29, 2020; Dec. 31, 2022>
1. Special donations: any of the following donations:
a. Donations under Article 24(2) of the Corporate Tax Act;
b. If the business entity volunteers to restore a special disaster area as defined in the Framework Act on the Management of Disasters and Safety, the value of such service. In such cases, the necessary matters concerning the method of calculating the value of the service shall be prescribed by Presidential Decree;
2. The permissible limit for necessary expenses: The amount calculated by the following formula:Permissible limit for necessary expenses = A - B
┌──────────────────────┐
│ Deduction limit amount = A - B │
│ A: The amount of income for the relevant tax period before donations are included in necessary expenses (hereafter in this Article │
│ referred to as the "standard income amount") │
│ B: Carried-forward losses under Article 45 (hereinafter referred to as "carried-forward losses" in this Article) │
└────────────────────────────────┘
(3) General donations as described in subparagraph 1, out of the donations contributed by the business entity in the taxable period and the donations carried over under paragraph (5), shall be included in necessary expenses when calculating the amount of business income for the relevant taxable period within the permissible limit for necessary expenses calculated under subparagraph 2, and the amount exceeding such limit shall not be included in necessary expenses: <Amended on Dec. 29, 2020; Dec. 31, 2022>
1. General donations: Donations as prescribed by Presidential Decree in consideration of public interests, such as social welfare, culture, art, education, religion, charity, and academia (excluding donations described in paragraph (2)1);
2. The permissible limit for necessary expenses: The amount calculated by the following classification:
a. Where donations are made to a religious organization:
The amount calculated by the following classification: Item a If donations are contributed to a religious organization:Permissible limit for necessary expenses = [{A ? (B + C)} × 10/100] + [{A ? (B + C)} × the lesser of 20/100 or the total amount of donations contributed to an entity other than religious organizations] A: Base income amount; B: Amount of donations included in necessary expenses under paragraph (2); C: Losses carried forward.
b. If donations are not contributed to a religious organization:Permissible limit for necessary expenses = [A ? (B + C)} × 30/100]
Permissible limit for necessary expenses = [A ? (B + C)} × 30/100] A: Base income amount; B: Amount of donations included in necessary expenses under paragraph (2); C: Losses carried forward.
(4) The amount of donations, other than those mentioned in paragraphs (2)1 and (3)1, shall not be included in necessary expenses when calculating the amount of business income for the relevant taxable period. <Amended on Dec. 29, 2020>
(5) The amount of special donations and general donations (excluding the amount of donations to which tax deductions were made on the filing of global income tax under Article 59-4(4)) not included in necessary expenses because it exceeds the permissible limit for necessary expenses as specified in paragraphs (2)2 and (3)2, out of the donations contributed by a business entity in the relevant taxable period, may be carried forward and included in necessary expenses in each taxable period ending within ten years from the starting date of the next taxable period of the relevant taxable period, as Prescribed by Presidential Decree. <Added on Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2022>
(6) For the purpose of applying paragraphs (2) and (3), the donations made by a person who falls under Article 50(1)2 or 3 (not being subject to age restrictions, and excluding a person whose donations are subject to the basic deduction of any other resident) shall be included in donations of the relevant business entity. <Amended on Dec. 27, 2010; Dec. 20, 2016; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020>
(7) Except as provided in paragraphs (1) through (6), matters necessary for non-inclusion of donations in necessary expenses, such as the calculation of donations, and the management of entities that receive donations, shall be prescribed by Presidential Decree. <Added on, Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 35 (Exclusion of business promotion expenses from necessary expenses)
(1) "Business promotion expenses" in this Article (including the amount of money, prescribed by Presidential Decree, paid by a business entity for welfare facilities to an association or body organized by employees) means the amount of money disbursed by a business entity for treat, good relationship, or compensation, or for other purpose similar thereto, regardless of causes, to proceed smoothly its affairs with a person directly or indirectly related to the entity. <Amended on, Dec. 31, 2018; Dec. 31, 2022>
(2) Business promotion expenses which exceed the amount prescribed by Presidential Decree and do not fall under any of the following cases, out of the business promotion expenses disbursed by a business entity for one occasion of entertainment, shall not be included in necessary expenses when calculating the amount of income generated in each taxable period; provided, this shall not apply to the expenses prescribed by Presidential Decree disbursed in a foreign region and those disbursed to farmers and fishermen where it is difficult to secure evidentiary materials which can prove any of the following business promotion expenses and disbursement of which is objectively self-evident: <Amended on Jan. 1, 2012; Jun. 7, 2013; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Dec. 31, 2022>
1. Business promotion expenses disbursed by using any of the following means (hereafter referred to as "credit card, etc." in this Article):
a. A credit card prescribed in the Specialized Credit Finance Business Act (including those prescribed by Presidential Decree, as those similar to a credit card; hereinafter the same shall apply);
b. Cash receipts prescribed in Article 160-2(2)4;
2. Business promotion expenses disbursed after receiving an invoice under Article 163 of this Act or Article 121 of the Corporate Tax Act or a tax invoice under Articles 32 and 35 of the Value-Added Tax Act;
3. Business promotion expenses paid by issuing a purchaser-issued invoice under Article 163-3 or a purchaser-issued tax invoice under Article 34-2(2) of the Value-Added Tax Act;
4. Business promotion expenses paid by being issued a withholding tax receipt prescribed by Presidential Decree.
(3) Such amount exceeding the total of the sums referred to in the following subparagraphs which as belongs to business promotion expenses (excluding the amount not included in necessary expenses pursuant to paragraph (2)) paid by a business entity for the relevant taxable period, shall not be included in necessary expenses when calculating the amount of income for such taxable period: <Amended on Jan. 1, 2012;Jan. 1, 2013; Dec. 23, 2014; Dec. 31, 2018; Dec. 31, 2019; Dec 29, 2020; Dec. 31, 2022>
1. The basic limit: The amount calculated by the following formula:The basic limit amount = A × B × 1/12
┌──────────────────────┐
│ │
│ Basic limit amount = A × B × 1 │
│ │
│ 12 │
│ │
│ A: 12 million won (36 million won in the case of a small and medium enterprise under Article 6(1) of the Restriction of Special Taxation Act) │
│ B: Number of months in the relevant taxable period [the number of months shall be calculated by calendar, and a period of less than 1 month shall be deemed 1 month │
│ │
└─────────────────────────┘
2. The limit by amount of income: The amount calculated by applying the applicable rate set forth in the following table to the total amount of income (only referring to the amount of income prescribed by Presidential Decree) generated from the relevant business for the relevant taxable period; provided, in case of the amount of income generated in transactions with a specially related person prescribed by Presidential Decree, the aforesaid amount shall be replaced by the amount equivalent to 10/100 of the amount calculated by applying the applicable rate set forth in the following table:
Amount of income Applicable rate
a. Not less than 10 billion won 30/10,000
b. More than 10 billion won but not less than 50 billion won 30 million won + [(amount of income -10 billion won × 20/1000]
c. More than 50 billion won 110 million won + [(amount of income -50 billion won × 3/1000]
(4) In applying paragraph (2)1, where a sales slip, etc. is issued in the name of any member store other than the member store of credit cards, etc. that provides goods or services, the amount of such disbursement shall not be deemed business promotion expenses under paragraph (2)1. <Amended on, Dec. 31, 2018; Dec. 31, 2022>
(5) Matter necessary for the extent and calculation of business promotion expenses, and the keeping of documents evidencing disbursement thereof shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2018; Dec. 31, 2022>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2022]
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Article 36 Deleted. <Dec. 28, 1998>
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Article 37 (Calculation of necessary expenses of other income)
(1) When calculating other income, the amount to be included in necessary expenses shall be as follows: <Amended on Dec. 29, 2020; Dec. 31, 2024>
1. With regard to a refund payable to a purchaser of a horse racing ticket, winner wager ticket, bullfighting match wager ticket or sports promotion wager ticket pursuant to Article 21(1)4, the aggregate of the unit voting of the tickets won purchased by such purchaser shall be included in necessary expenses;
2. With regard to prize money and valuables, etc. under Article 21(1)14, the amount inserted into slot machines, etc. at the time of winning such prize money and valuables, etc. shall be included in necessary expenses;
3. With regard to income from virtual assets under Article 21(1)27, the actual acquisition value of the transferred virtual assets and incidental expenses incurred in relation to the acquisition, transfer, or loan of such virtual assets shall be deemed necessary expenses.
(2) In cases, other than the following cases, the aggregate amounts commonly deemed expenses corresponding to the total revenue for the relevant taxable period shall be included in necessary expenses:
1. Where paragraph (1) applies;
2. 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.
(3) With regard to expenses, corresponding to the total revenue incurred prior to the relevant taxable period, determined for the relevant taxable period, only the expenses unappropriated as necessary expenses before the taxable period shall be deemed necessary expenses for the relevant taxable period.
(4) Article 33 shall apply mutatis mutandis to the amount not to be included in necessary expenses in calculating other income.
(5) In calculating necessary expenses under paragraph (1)3, the acquisition value of virtual assets already held before January 1, 2027 shall be the larger of the market price as of December 31, 2026 and the acquisition value of such virtual assets. <Added on Dec. 29, 2020; Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
(6) Notwithstanding paragraph (1)3, where it is impracticable to verify the actual acquisition value of virtual assets acquired after January 1, 2027 due to any reasons prescribed by Presidential Decree, necessary expenses incurred in transferring the whole virtual assets in the same type of the relevant virtual assets may be determined by multiplying the total transfer value of the whole virtual assets by the rate prescribed by Presidential Decree within the limit of 50/100. In such cases, no incidental expenses shall be included in necessary expenses. <Added on Dec. 31, 2024>
(7) Except as provided in paragraphs (1)3, (5), and (6), matters necessary for calculating necessary expenses for virtual assets shall be prescribed by Presidential Decree. <Added on Dec. 29, 2020; Dec. 31, 2024>
[This Article Wholly Amended on Dec. 27, 2010]
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Article 38 Deleted. <Dec. 30, 2006>
Subsection 3 Attributed Tax Year and Value of Acquisition
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Article 39 (Year to which total income and necessary expenses are attributed)
(1) The year to which the total income and necessary expenses of a resident in each taxable period are attributed shall be the taxable period to which the date when the total amount of income and necessary expenses are determined belongs.
(2) The value of assets acquired by a resident through purchase, manufacture, etc. shall be the amount obtained by adding the incidental expenses to the value of purchasing or manufacturing cost of such assets.
(3) Where a resident increases or decreases (excluding depreciation; hereafter referred to as "appraisal" in this Article) the book value of assets and liabilities he or she possesses, when calculating income in the taxable period to which the date of such appraisal belongs and the taxable period thereafter, the book value of the relevant assets and liabilities shall be the book value before appraisal; provided, the value of inventory assets, and the value of the securities prescribed by Presidential Decree shall be the face value evaluated for each asset in the manner prescribed by Presidential Decree. <Amended on, Dec. 31, 2018>
(4) Notwithstanding paragraph (3), the book value of assets falling under any of the following subparagraphs may be reduced by method prescribed by Presidential Decree: <Amended on Dec. 31, 2019>
1. Inventory assets which cannot be sold at the normal price due to damage, decomposition, etc.;
2. Tangible assets damaged or destroyed due to a natural disaster or other reasons prescribed by Presidential Decree.
(5) Where a resident applies the corporate accounting standards generally deemed fair and appropriate or customary practices continuously to the year to which the total amount of income and necessary expenses are attributed and the acquisition and appraisal of assets and liabilities in calculating income for each taxable period, except as otherwise prescribed otherwise in this Act and the Act on Restriction on Special cases Concerning Taxation, such corporate accounting standards or customary practices shall apply.
(6) Matters necessary concerning the year to which the total income and necessary expenses are attributed pursuant to paragraph (1), calculation of the value of acquisition pursuant to paragraph (2) and appraisal of assets and liabilities pursuant to paragraphs (3) and (4) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 40 Deleted. <Dec. 31, 2009>
Subsection 4 Special Cases concerning Calculation of Amount of Income
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Article 41 (Calculation by wrongful acts)
(1) Where any act or the calculation of a resident who has dividend income (only applicable to dividend income pursuant to Article 17(1)8), business income or other income is deemed to have unreasonably reduced income tax burden due to transactions with a related person with such resident, the commissioner of a regional tax office or the head of a tax office having jurisdiction over the place for tax payment may calculate the amount of income generated in the relevant taxable period regardless of any act or the calculation by such resident. <Amended on Jan. 1, 2012>
(2) Matters necessary concerning the scope of related persons pursuant to paragraph (1) and the calculation by wrongful act shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2012>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 42 (Special cases concerning calculation of amount of income on transactions with nonresident)
(1) Where an agreement is reached on the amount involved in transactions with a nonresident residing in a foreign country or a foreign corporation overseas between a resident and a competent authority according to the agreed principles of the tax treaty entered into between Korea and the Contracting party to the Double Taxation Convention (hereinafter referred to as "tax treaties"), the commissioner of a regional tax office or the head of a tax office having jurisdiction over the place for tax payment may adjust the income of the resident for each taxable period.
(2) Matters concerning applications for adjustment of income of a resident and other matters necessary for adjustment pursuant to paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 43 (Special cases concerning calculation of joint business income)
(1) In cases of a joint business, from which business income is generated, is jointly conducted and the profits and losses thereof are distributed (including a joint business in which there are joint business entities prescribed by Presidential Decree (hereinafter referred to as "joint investment business entities") who do not participate in management but make investment only), the amount of income shall be calculated by place of joint business considering a place where the relevant business is managed (hereinafter referred to as "place of joint business") as one resident.
(2) Income generated from a joint business pursuant to paragraph (1) shall be distributed to each joint business entity according to the amount of income distributed or to be distributed by the profit-and-loss distribution ratio (where the agreed profit-and-loss distribution ratio not available, referring to the ratio of shares; hereinafter referred to as "profit-and-loss distribution ratio") agreed among the respective residents conducting the relevant joint business (including joint investment business entities; hereinafter referred to as "joint business entities").
(3) Where one resident and his or her related person prescribed by Presidential Decree are included in joint business entities, and where there are reasons prescribed by Presidential Decree, such as a false determination of the profit-and-loss distribution ratio, notwithstanding paragraph (2), the amount of income of such related person shall be deemed the amount of income of a joint business entity whose profit-and-loss distribution ratio is larger (where the profit-and-loss distribution ratio is the same with each other, referring to a person prescribed by Presidential Decree; hereinafter referred to as "major joint business entity"). <Amended on Jan. 1, 2012>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 44 (Separate calculation of amount of income in cases of inheritance)
(1) Income tax on the income of a predecessor to be levied on an inheritor shall be calculated separate from the income tax on the income of the inheritor.
(2) Where a pension account subscriber is dead and the deceased’s spouse succeeds to the relevant pension account, without the receipt other than pension, the deceased’s income amount deposited in the pension account shall be deemed the heir’s income amount and the heir’s income tax shall be calculated based on the income amount. <Added on Jan. 1, 2013>
(3) Matters necessary for the method of and procedure, etc. for succession of the pension account under paragraph (2) shall be prescribed by Presidential Decree. <Added on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 45 (Deduction of losses and losses carried forward)
(1) Any loss recorded in calculating the amount of business income generated in the relevant taxable period, according to the books recorded and kept by a business entity, shall be deducted from the amount of wage and salary income, the amount of pension income, the amount of other income, the amount of interest income, and the amount of dividend income in order when calculating the tax base of global income for such taxable period.
(2) Notwithstanding paragraph (1), any loss incurred in any of the following business (hereinafter referred to as "real estate leasing business"), shall not be deducted when calculating the tax base of global income; provided, the same shall not apply to residential house leasing business: <Amended on Dec. 23, 2014; Dec. 19, 2017>
1. Business leasing real estate or rights in real estate;
2. Business leasing factory foundations or mining foundations;
3. Business prescribed by Presidential Decree, as business leasing mining rights.
(3) Any loss from a real estate leasing business and any leftover loss after deduction pursuant to paragraph (1) and the proviso to paragraph (2) (hereinafter referred to as "loss carried forward"), shall be deducted in order, beginning with the first loss carried forward to be incurred in the taxable period according to the following classification when calculating income for the taxable period expiring within 15 years from the end of the taxable period in which the relevant loss carried forward occurs; provided, where a loss carried forward for a taxable period before the limitation period is confirmed after such limitation period of the imposition of national taxes pursuant to Article 26-2 of the Framework Act on National Taxes has passed, such loss carried forward shall not be deducted: <Amended on Dec. 23, 2014; Dec. 29, 2020>
1. A loss carried forward remaining after taking a deduction pursuant to paragraph (1) and the proviso to paragraph (2) shall be deducted from business income, wage and salary income, pension income, other income, interest income, and dividend income in this order;
2. A loss carried forward which occurs from a real estate leasing business shall be deducted from income of the real estate leasing business.
(4) Paragraph (3) shall not apply where an estimated tax return (referring to a return filed not in accordance with the books kept and recorded and evidentiary documents pursuant to Articles 160 and 161; hereinafter the same shall apply) is filed on income in the relevant taxable period or a decision for additional assessment is made pursuant to the proviso to Article 80(3); provided, this shall not apply where an estimated tax return is filed or a decision for additional assessment is made because the books and other evidentiary documents are destroyed or lost by a natural disaster or other force majeure.
(5) When deducting a loss and a loss carried forward pursuant to paragraphs (1) and (3), if any dividend income or interest income is subject to global taxation pursuant to Article 14 in the calculation of the amount of tax pursuant to Article 62, the amount of such dividend income or interest income subject to withholding tax rate shall be exempt from deduction of a loss or a loss carried forward, and with regard to the amount subject basic tax rates among such dividend income or interest income, a business entity may elect whether to take a deduction, and the amount of deduction within the extent of the amount of income.
(6) When deducting a loss and a loss carried forward pursuant to paragraphs (1) and (2), where a loss is incurred and a loss is carried forward in the relevant taxable period, the loss for the taxable period shall be first deducted from income.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 46 (Special cases concerning calculation of amount of income from bonds)
(1) Where a resident receives [(including conversion of convertible bonds to stocks, exchange of exchangeable bonds into stocks, and exercise of preemptive rights of bonds with warrant (applicable only where the issue price of new stocks is paid in such bonds with warrant), and conversion and redemption of bonds, etc. as described in Article 4(7)3, 3-2, or 3-3 of the Financial Investment Services and Capital Markets Act into stocks; hereinafter the same shall apply)] interest or the value of a discount accruing from bonds, etc. (hereafter referred to as "interest, etc." in this Article and Articles 133-2 and 156-3) from a corporation which issues bonds, securities or transferable securities falling under Article 16(1)1, 2, 5 or 6, as prescribed by Presidential Decree (hereafter referred to as "bonds, etc." in this Article and Articles 133-2 and 156-3) or sells (including cases where the ownership of bonds, etc. or the rights to receive interest income change due to donation, repayment and investment, etc., and where sale is entrusted, mediated or arranged, however, cases prescribed by Presidential Decree, such as repurchase agreement, shall be excluded; hereafter the same shall apply in Article 133-2) the relevant bonds, etc., the amount of income shall be calculated considering the amount equivalent to interest, etc. attributed to a resident, by holding period as interest income pursuant to Article 16. <Amended on Dec. 27, 2010; Jan. 1, 2012; Dec. 29, 2020; Dec. 31, 2024>
(2) When applying paragraph (1), where a relevant resident fails to prove the holding period of the relevant bonds, etc., as prescribed by Presidential Decree, income shall be calculated deeming the amount equivalent to interest, etc. in the period of withholding pursuant to Article 133-2(1) attributed to the relevant resident. <Amended on Dec. 27, 2010>
(3) A method of calculating the amount equivalent to interest, etc. pursuant to paragraphs (1) and (2) and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 46-2 (Special cases concerning calculation of interest income due to early cancellation)
Where interest income attributed to the taxable period which has already passed is reduced due to the early cancellation of a deposit or a trust contract after a taxpayer files a final tax return on the tax base of global income, the reduced amount of interest income may be deducted from interest income included in the global income for the taxable period to which the date of early cancellation belongs; provided, this shall not apply to where a taxpayer applies for reassessment of the tax base and the amount of tax pursuant to Article 45-2 of the Framework Act on National Taxes.
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 5 Wage and Salary Income Deduction, Pension Income Deduction, and Retirement Income Deduction
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Article 47 (Wage and salary income deduction)
(1) For a resident with wage and salary income, the following amount shall be deducted from gross pay that he or she receives during the relevant taxable period; provided, 20 million won shall be deducted if the amount of deduction exceeds 20 million won: <Amended on Jan. 1, 2012; Jan. 1, 2014; Dec. 31, 2019>
Total Amount of PayAmount Deducted
5 million won or less70/100 of the gross pay
Over 5 million won, but not exceeding 15 million won3.5 million won ＋ (40/100 of the amount exceeding 5 million won)
Over 15 million won, but not exceeding 45 million won7.5 million won ＋ (15/100 of the amount exceeding 15 million won)
Over 45 million won, but not exceeding 100 million won12 million won ＋ (5/100 of the amount exceeding 45 million won)
Over 100 million won14.75 million won ＋ (2/100 of the amount exceeding 100 million won)
(3) Where the total amount of pay of a resident with wage and salary income during the relevant taxable period is less than the amount deducted under paragraph (1) or (2), the total mount of pay shall be the amount deducted.
(4) Deductions pursuant to paragraphs (1) through (3) shall be referred to as "wage and salary income deduction."
(5) In cases falling under paragraph (1), where a person (excluding a person employed on a daily basis) receives wage and salary income from at least two persons, the aggregate wage and salary income shall be the total pay and the wage and salary income deductions calculated under paragraph (1) shall be taken therefrom. <Amended on Dec. 27, 2010>
(6) Deleted. <Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 47-2 (Pension income deduction)
(1) For a resident with pension income, the amount provided for in the following Table shall be deducted from his or her total pension income which he or she receives in the relevant taxable period (excluding the pension income subject to separate taxation; hereafter the same shall apply in this paragraph); provided, where the amount deducted exceeds nine million won, nine million won shall be deducted: <Amended on Jan. 1, 2013>
Total Amount of PensionAmount Deducted
3.5 million won or lessThe total amount of pension
Over 3.5 million won, but not exceeding 7 million won3.5 million won + (40/100 of the amount exceeding 3.5 million won)
Over 7 million won, but not exceeding 14 million won4.9 million won + (20/100 of the amount exceeding 7 million won)
Over 14 million won6.3 million won + (10/100 of the amount exceeding 14 million won)
[This Article Wholly Amended on Dec. 31, 2009]
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Article 48 (Retirement income deduction)
(1) For a resident with retirement income, the amount specified in subparagraph 1 shall be deducted from the amount of retirement income for the relevant taxable period, and then the amount specified in subparagraph 2 shall be deducted from the amount calculated by dividing the amount calculated above by the number of years of continuous service (a period of less than one year shall be deemed one year, and the number of years shall be calculated by the formula prescribed by Presidential Decree in cases falling under Article 22(1)1; hereinafter the same shall apply) and multiplying the divided amount by 12 (hereafter in this paragraph, referred to as "converted wages"): <Amended on Dec. 23, 2014; Dec. 31, 2022>
1. The following amount determined according to the number of years of continuous service:
Number of Years of Continuous ServiceAmount Deducted
5 years or less1 million won × the number of years of continuous service
Over 5 years, but not exceeding 10 years5 million won + 2 million won × (the number of years of continuous service － 5 years)
Over 10 years, but not exceeding 20 years15 million won + 2.5 million won × (the number of years of continuous service － 10 years)
Over 20 years40 million won + 3 million won × (the number of years of continuous service － 20 years)
Converted WagesAmount Deducted
8 million won or less100 percent of converted wages
Over 8 million won, but not exceeding 70 million won8 million won + (60 percent of the portion exceeding 8 million won)
Over 70 million won, but not exceeding 100 million won45.2 million won + (55 percent of the portion exceeding 70 million won)
Over 100 million won, but not exceeding 300 million won61.7 million won + (45 percent of the portion exceeding 100 million won)
Over 300 million won151.7 million won + (35 percent of the portion exceeding 300 million won)
(3) Deduction pursuant to paragraphs (1) and (2) shall be referred to as "retirement income deduction."
(4) Necessary matters regarding the method of calculating the retirement income tax deduction shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2013>
(5) Deleted. <Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 49 Deleted. <Dec. 30, 2006>
Subsection 6 Global Income Deduction
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Article 50 (Basic deduction)
(1) For a resident (limited to a natural person) with global income, the amount calculated by multiplying the number of persons falling under any of the following by 1,500,000 won per capita, shall be deducted from the global income of the resident for the relevant taxable period: <Amended on Dec. 15, 2015; Dec. 31, 2024>
1. The relevant resident;
2. The spouse of a resident with no annual income or with total annual income not exceeding one million won for the relevant taxable period (including the spouse with gross pay of not exceeding five million won as wage and salary income);
3. Any of the following dependents (the dependent shall not be subject to the age limit, if he or she is a person with disabilities defined in Article 51(1)2) who live together with the resident (including his or her spouse; hereafter the same shall apply in this subparagraph) and whose total annual income for the relevant taxable period does not exceed one million won (including dependants with gross pay of not exceeding five million won as wage and salary income):
a. Any lineal ascendant of a resident (where a lineal ascendant has remarried, including a lineal ascendant's spouse prescribed by Presidential Decree), who is at least 60 years old;
b. A person prescribed by Presidential Decree as a lineal descendant of a resident and an adoptee living together who is prescribed by Presidential Decree (hereinafter referred to as "adoptee"), who are not more than 20 years of age (referring to the date he or she turns 20 years of age and the preceding period; hereafter the same shall apply in this Article). In such cases, where both the relevant lineal descendant or adoptee and his or her spouse are disabled persons under Article 51(1)2, their spouses shall be included therein;
c. A brother or a sister of a resident, who is 20 or less years old, or 60 or more years old;
d. Any person prescribed by Presidential Decree among persons eligible for assistance under the National Basic Living Security Act;
e. Any person prescribed by Presidential Decree, who is reared through the foster home system under the Child Welfare Act (hereinafter referred to as "foster child").
(2) Deductions under paragraph (1) shall be referred to as "basic deduction."
(3) Where a spouse or a dependent of a resident is a dependent of another resident, deduction shall be made from the global income of either of the residents, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 51 (Additional deduction)
(1) Where any person entitled to basic deduction under Article 50 (hereinafter referred to as "person entitled to basic deduction") falls under any of the following cases, the amount stipulated in each subparagraph shall be deducted from the global income of the resident during the relevant taxable period, in addition to the basic deduction; provided, if a case falls under both subparagraphs 3 and 6, subparagraph 6 shall apply thereto: <Amended on Jan. 1, 2013; Jan. 1, 2014>
1. Where a person is 70 or more years old (hereinafter referred to as "senior citizen"), one million won per capita a year;
2. Where a person is a disabled person prescribed by Presidential Decree (hereinafter referred to as "disabled person"), two million won per capita a year;
3. Where the relevant resident (limited to a resident whose sum of global income determined when the tax base of the global income is calculated for the relevant taxable period does not exceed 30 million won) is a female with no spouse, but is the head of a household with a dependent defined in Article 50(1)3, or is a female with a spouse, 500,000 won a year;
4. Deleted; <Jan. 1, 2014>
5. Deleted; <Jan. 1, 2014>
6. Where the relevant resident has no spouse, but has his or her lineal descendant or adoptee qualified as a person entitled to basic deduction, one million won a year.
(2) Deductions under paragraph (1) shall be referred to as "additional deduction."
(3) Basic deduction and additional deduction shall be collectively referred to as "personal deduction." <Added on Jan. 1, 2014>
(4) If the aggregate of personal deductions exceeds the amount of global income, the deductions exceeding global income shall be deemed nil. <Added on Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 51-2 Deleted. <Jan. 1, 2014>
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Article 51-3 (Pension contribution deduction)
(1) Where a resident with global income has paid contributions or individual shares under public pension-related Acts (hereinafter referred to as "pension contributions"), the pension contributions paid during the relevant taxable period shall be deducted from his or her global income for the relevant taxable period. <Amended on Jan. 1, 2013; Jan. 1, 2014>
1. Deleted; <Jan. 1, 2014>
2. Deleted. <Jan. 1, 2014>
(2) Deduction under paragraph (1) shall be referred to as "pension contribution deduction."
(3) If the sum of all the following deductions exceeds the amount of global income, it shall be deemed that pension contributions amounting to the excess amount are not deducted: <Amended on Dec. 23, 2014>
1. Personal deduction referred to in Article 51(3);
2. Pension contribution deduction referred to in this Article;
3. Interest expense deduction for the reverse mortgage-backed retirement pension system referred to in Article 51-4;
4. Special income deduction referred to in Article 52;
5. Income deductions under the Act on Restriction on Special cases Concerning Taxation.
(5) Deleted. <Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 51-4 (Interest expense deduction for reverse mortgage-backed retirement pension system)
(1) Where a resident with any pension income has been paid benefits from reverse mortgage-backed retirement pension system that meets the requirements prescribed by Presidential Decree, the amount equivalent to the interest on the loan that corresponds to the benefits in the relevant taxable period shall be deducted from the pension income for the relevant taxable period (hereinafter referred to as "interest expense deduction for reverse mortgage-backed retirement pension system"). In such cases, where the interest to be deducted exceeds two million won, two million won shall be deducted, and where it exceeds the pension income, such excess shall be written off.
(2) The interest expense deduction for reverse mortgage-backed retirement pension system shall apply when the relevant resident applies therefor.
(3) Matters concerning applications for the interest expense deduction for reverse mortgage-backed retirement pension system, methods to confirm the amount equivalent to interest, and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 52 (Special income deduction)
(1) Where a resident with wage and salary income (excluding a worker employed on a daily basis; hereafter the same shall apply in this Article) pays any of the following insurance premiums that shall be borne by a worker under the National Health Insurance Act, the Employment Insurance Act, or the Long-Term Care Insurance Act, the amount of such premiums shall be deducted from his or her wage and salary income for the relevant taxable period. <Amended on Jan. 1, 2014>
1. Deleted; <Jan. 1, 2014>
2. Deleted. <Jan. 1, 2014>
(2) Deleted. <Jan. 1, 2014>
(3) Deleted. <Jan. 1, 2014>
(4) Where a resident with wage and salary income, as the head (referring to a member of a household, if the head of a household is not entitled to deduction under this paragraph or paragraph (5) of this Article, or Article 87(2) of the Restriction of Special Taxation Act, and including a foreigner as prescribed by Presidential Decree) of a household prescribed by Presidential Decree (hereafter referred to as "household" in this paragraph and paragraph (5)) with no house owned by the household as at the end of the taxable period, repays principal of the house lease loan specified by Presidential Decree and pays interest thereon in order to lease a house not larger than the size specified by Presidential Decree (including officetels used for residence, houses, and land annexed to a house, but excluding houses and officetels where the area of the land annexed to a house or officetel exceeds the area computed by multiplying the area on which the building is built by the multiplying factor specified by Presidential Decree for each region), the amount equivalent to 40/100 of such amount shall be deducted from the amount of wage and salary income for the relevant taxable period; provided, if the sum of the deductible amount and the amount under Article 87(2) of the Restriction of Special Taxation Act exceeds four million won a year, such excess (hereafter referred to as "excess" in this paragraph) shall be deemed nil. <Amended on Jan. 1, 2012;Jan. 1, 2013; Act No. 12030, Aug. 13, 2013; Jan. 1, 2014; Dec. 23, 2014; Dec. 29, 2020; Dec. 31, 2022>
1. Deleted. <Dec. 23, 2014>
2. Deleted. <Dec. 23, 2014>
(5) Where a resident with wage and salary income, as the head of a household with no house or one house owned by the household (referring to a person with wage and salary income among the members of a household, if the head of a household is not entitled to deduction under this paragraph, paragraph (4) of this Article, or Article 87(2) of the Restriction of Special Taxation Act, and including a foreigner as prescribed by Presidential Decree), has paid interest on the long-term mortgage loan specified by Presidential Decree (including a long-term mortgage loan assumed by acquiring a house; hereafter referred to as "long-term mortgage loan" in this paragraph and paragraph (6)) borrowed from a financial institution, etc. or the Housing and Urban Fund established under the Housing and Urban Fund Act by granting a mortgage over the house to acquire the house, if the assessed value of which under Article 99(1) does not exceed 600 million won at the time of acquisition, the amount of interest paid for the relevant taxable period shall be deducted from wage and salary income for the relevant taxable period according to the following standards; provided, if the sum of the amount deducted and the income deductions under paragraph (4) and Article 87(2) of the Restriction of Special Taxation Act for general savings account for housing subscription exceeds 8 million won a year (applicable to a long-term mortgage loan repayable in at least 15 years; hereafter referred to as "maximum deduction limit" in this paragraph and paragraph (6)), such excess shall be deemed nil: <Amended on Jan. 1, 2012; Aug. 13, 2013; Jan. 1, 2014; Dec. 23, 2014; Jan. 6, 2015; Jan. 19, 2016; Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2023>
1. Whether a resident is the head of a household shall be determined according to his or her status at the end of the taxable period;
2. This paragraph shall not apply where a resident owns at least two houses, including houses owned by members of his or her household, at the end of the taxable period;
3. This paragraph shall apply to the head of a household, regardless of whether he or she actually resides therein, or to a resident who is not the head of a household, only where he or she actually resides therein;
4. Where the head of a household with no house owned by it obtains the right to acquire a house under construction (hereafter referred to as "right to buy a house" in this subparagraph) with approval of the relevant project plan under the Housing Act (including a house acquired by a member of a housing association under the Housing Act or a member of an improvement association under the Act on the Improvement of Urban Areas and Residential Environments; hereafter the same shall apply in this subparagraph), if the price for the right, defined by Presidential Decree, does not exceed 600 million won, and borrows a loan from a financial company or from the Housing and Urban Fund established under the Housing and Urban Fund Act (including where the conditions of borrowing of the loan are amended before the completion of such house to convert the loan to a long-term mortgage loan when such house is completed) in order to acquire the house on condition that the loan shall be converted to a long-term mortgage loan at the time the house is completed, such loan shall be deemed a long-term mortgage loan from the date of borrowing the loan (referring to the date of amendment, if the conditions of borrowing the loan are amended) until the registration date of the preservation of ownership of the house; provided, the foregoing shall not apply during the taxable period in which a resident possesses rights to buy at least two houses simultaneously;
5. Where a resident borrows a loan before the individual house price or the multi-family house price is officially announced under the Act on the Public Announcement of Real Estate Values, the initial price officially announced under the same Act after the date of borrowing the loan shall be deemed the assessed value of the relevant house.
(6) Notwithstanding the proviso of paragraph (5), where long-term mortgage loans fall under any of the following subparagraphs, the main clause of paragraph (5) shall apply within the limit of deduction of the relevant amounts instead of 8 million won per year, if the long-term mortgage loans fall under any of the following subparagraphs: <Added on Dec. 23, 2014; Dec. 31, 2023>
1. Where interest on a long-term mortgage loan repayable in at least 15 years is paid at the fixed interest rate specified by Presidential Decree (hereafter referred to as "fixed interest rate" in this paragraph) and the loan is repaid in installments with no grace period as specified by Presidential Decree (hereafter referred to as "installments with on grace period" in this paragraph): 20 million won;
2. Where interest on a long-term mortgage loan repayable in at least 15 years is paid at the fixed interest rate or where the loan is repaid in installments with no grace period: 18 million won;
3. Where interest on a long-term mortgage loan repayable in at least 10 years is paid at the fixed interest rate or where the loan is repaid in installments with no grace period: 6 million won.
(7) Deleted. <Jan. 1, 2014>
(8) Deductions under paragraphs (1), (4), and (5) shall apply where the relevant resident files an application therefor, as prescribed by Presidential Decree, and if such deductions exceed the resident’s global income subject to aggregate taxation for the relevant taxable period, such excess shall be deemed nil. <Amended on Jan. 1, 2012; Jan. 1, 2014>
1. Deleted; <Jan. 1, 2014>
2. Deleted. <Jan. 1, 2014>
(9) Deleted. <Jan. 1, 2014>
(10) Deductions under paragraphs (1), (4), (5), and (8) shall be referred to as "special deductions." <Amended on Jan. 1, 2014>
(11) Other matters necessary for special income deductions shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
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Article 53 (Scope of dependents living together and time for determination thereof)
(1) Any dependent living together prescribed in Article 50 shall be a member of family living together with a resident specified on the resident registration card, and actually living together with the relevant resident at his or her domicile or place of residence; provided, this shall not apply to a lineal descendant or an adoptee.
(2) Even if a resident or a family member living together with a resident (excluding a lineal descendant or an adoptee) leaves temporarily his or her original domicile or place of residence because of his or her entering school or undergoing medical treatment of a disease, or rendering services or business, but falls under reasons prescribed by Presidential Decree, he or she shall be deemed a person living together with the resident under paragraph (1).
(3) Notwithstanding paragraph (1), if a lineal ascendant of a resident (including his or her spouse) among his or her dependents is living separately due to residential circumstances, the lineal ascendant shall be deemed a person living together with the resident prescribed in Article 50.
(4) Whether a person is the spouse, a dependent, a disabled person, or a senior citizen eligible for deduction under Article 50, 51, or 59-2 shall be determined according to the person's status at the end of the relevant taxable period; provided, the status of a person who dies or who has disabilities cured before the end of the taxable period shall be determined according to the status on the day immediately before the date of death or cure. <Amended on Jan. 1, 2014>
(5) Notwithstanding the main sentence of paragraph (4), if the applicable age is specified pursuant to Article 50(1)3 or 59-2 and a person attains the applicable age during the relevant taxable period, the person shall be deemed eligible for deduction. <Amended on Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 54 (Exclusion from global income deduction)
(1) Global income deduction shall not apply to a person with only interest income, dividend income, pension income, or other income subject to separate taxation. <Amended on Jan. 1, 2013>
(2) Where a person who is obliged to file a final return on the tax base in accordance with Article 70(1), 70-2(2), or 74 fails to submit the documents specified in Article 70(4)1, only the portion for the resident himself or herself of the basic deduction and the standard tax credit under Article 59-4(9) shall be deductible; provided, the foregoing shall not apply where such documents are submitted later, regardless of whether a final tax base return has been filed. <Amended on Jan. 1, 2013; Jan. 1, 2014>
(3) Where an occasional imposition is determined under Article 82, only the portion for the resident himself or herself of the basic deduction shall apply.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
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Article 54-2 (Special cases concerning income deduction for joint business)
If an amount is disbursed, paid, invested, or contributed by a related person whose income shall be added to the income of the main joint business entity for aggregate taxation under Article 43(3), when the income deduction under Article 51-3 of this Act or the Act on Restriction on Special cases Concerning Taxation or the tax credit under Article 59-3 of this Act is applicable, such amount shall be deemed an amount disbursed, paid, invested, or contributed by the main joint business entity within the maximum of the global income of the main joint business entity for aggregate taxation and shall be eligible for income deduction or tax credit in computing the global income of the main joint business entity for aggregate taxation or the tax amount for his or her global income. <Amended on Jan. 1, 2012; Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
SECTION 4 Calculation of Tax
Subsection 1 Tax Rates
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Article 55 (Tax rates)
(1) The amount of income tax on the global income of a resident (hereinafter referred to as "calculated tax on global income") shall be determined by applying any of the following rates to the tax base of global income for the relevant year: <Amended on Jan. 1, 2014; Dec. 20, 2016; Dec. 19, 2017; Dec. 29, 2020; Dec. 31, 2022>
Tax Base of Global IncomeTax Rates
14 million won or less6/100 of tax base
More than 14 million won, but not exceeding 50 million won840,000 won + (15/100 of the amount exceeding 14 million won)
More than 50 million won, but not exceeding 88 million won6,240,000 won + (24/100 of the amount exceeding 50 million won)
More than 88 million won, but not exceeding 150 million won15,360,000 won + (35/100 of the amount exceeding 88 million won)
More than 150 million won, but not exceeding 300 million won37,060,000 won + (38/100 of the amount exceeding 150 million won)
More than 300 million won, but not exceeding 500 million won94,060,000 won + (40/100 of the amount exceeding 300 million won)
More than 500 million won, but not exceeding 1 billion won174,060,000 won + (42/100 of the amount exceeding 500 million won)
More than 1 billion won384,060,000 won + (45/100 of the amount exceeding 1 billion won)
(2) The income tax on retirement income of a resident shall be calculated according to the following order (hereinafter referred to as "calculated tax on retirement income"): <Amended on Jan. 1, 2013; Dec. 23, 2014>
1. The amount calculated by applying the tax rate of paragraph (1) to the tax base of retirement income for the relevant taxable period;
2. The amount calculated by multiplying the amount of subparagraph 1 divided by 12, by the number of years of continuous service;
3. Deleted. <Dec. 23, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 2 Tax Credit
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Article 56 (Dividend tax credit)
(1) If dividend income to which the proviso to the main sentence of Article 17(3) is applicable is included in global income of a resident, the amount equivalent to the amount added to the total income in the relevant taxable period shall be deducted from the calculated tax on global income pursuant to the main sentence of the same paragraph. <Amended on Dec. 31, 2009>
(2) Deduction made under paragraph (1) shall be referred to as "tax deduction from dividend income". <Amended on Dec. 31, 2009>
(3) Deleted. <Dec. 30, 2003>
(4) When applying paragraph (1), dividend income subject to dividend tax credit shall be that included in the tax base of global income under Article 14(2), and exceeding the standard amount of global taxation on any interest income, etc. <Amended on Dec. 31, 2009>
(5) Deleted. <Dec. 30, 2006>
(6) Matters necessary to calculate the amount of dividend tax credit shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2009>
[Title Amended on Dec. 31, 2009]
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Article 56-2 (Tax credit for bookkeeping)
(1) Where a person subject to simple bookkeeping under Article 160(3) enters and calculates the amount of income according to double-entry bookkeeping and submits the documents pursuant to Article 70(4)3 when filing a final return on the tax base pursuant to Article 70 or 74, the amount equivalent to 20/ 100 of the amount calculated by multiplying the ratio of business income calculated according to the relevant book to global income by the calculated tax on global income shall be deducted from the calculated tax on global income; provided, where the amount of tax credit exceeds one million won, one million won shall be deducted.
(2) Tax credit pursuant to paragraph (1) (hereinafter referred to as "tax credit for bookkeeping") shall not apply for the following persons:
1. Where a person files a return on his or her income omitting 20/100 or more of his or her income to be reported according to the book kept and entered;
2. Where a person fails to keep the books and supporting documents concerning the tax credit for bookkeeping for five years from the end of the period for a final return on the tax base; provided, this shall not apply where he or she has unavoidable causes prescribed by Presidential Decree, such as a natural disaster.
(3) Matters necessary concerning the tax credit for bookkeeping shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 56-3 (Tax credit for transmission of issued electronic invoices)
(1) Where a business entity prescribed by Presidential Decree in consideration of its gross income, etc. issues electronic invoices under the latter part of Article 163(1) on or before December 31, 2027 (limited to where a detailed statement of issuance of electronic invoices is transmitted to the Commissioner of National Tax Service pursuant to Article 163(8)), the amount specified by Presidential Decree, in consideration of the number of issued electronic invoices, etc., may be deducted from the calculated amount of global income tax on the business income for the relevant taxable period. In such cases, the maximum deduction limit shall be one million won per year. <Amended on Dec. 8, 2021; Dec. 31, 2024>
(2) A person who wishes to be entitled to the tax credit under paragraph (1) shall file a tax return on the tax credit for the issuance of electronic invoices with 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 at the time of filing a final tax return on tax base under Article 70 or 74. <Amended on Oct. 1, 2025>
[This Article Added on Dec. 23, 2014]
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Article 57 (Foreign tax credit)
(1) Where any foreign source income is included in global income or retirement income of a resident, if he or she has paid or is to pay the amount of foreign income tax (hereafter referred to as "amount of foreign income tax" in this Article) on such foreign source income in a foreign country, the tax amount for such foreign source income may be deducted from the amount of the calculated tax on global income or on retirement income for the relevant taxable period, up to the amount calculated according to the following calculation formula (hereafter referred to as "credit limit amount" in this Article): <Amended on Dec. 29, 2020>
┌──────────────────────┐
│ │
│ Deduction limit amount = A × B │
│ ─────────────── │
│ C │
│ │
│ A: The calculated tax on global income or retirement income for the relevant taxable period, calculated pursuant to Article 55 │
│ B: Foreign-source income (where a tax reduction or exemption is applied pursuant to the Restriction of Special Taxation Act or other Acts, │
│ excluding the amount obtained by multiplying the foreign-source income subject to such tax reduction or exemption │
│ by the applicable rate of reduction or exemption) │
│ C: The global income amount or retirement income amount for the relevant taxable period │
└──────────────────────────────────────┘
(2) Where the foreign income tax paid or payable to a foreign government, when applying paragraph (1) (applicable only where the amount of foreign income is deducted from the calculated tax on global income), exceeds the credit limit amount for the relevant taxable period, such excess may be carried forward to the taxable period ending within 10 years from the starting date of the next taxable period of the relevant taxable period (hereafter referred to as "carryforward deduction period" in this Article) and deducted up to the credit limit amount of the carryforward deduction period; provided, if the amount of foreign income tax paid or payable to a foreign government is not deducted within the carryforward deduction period, the amount of foreign income tax not so deducted may be included in necessary expenses for the relevant taxable period on which the day following the end of the carryforward deduction period falls, notwithstanding Article 33(1)1. <Amended on Jan. 1, 2013; Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2022>
(3) The amount equivalent to the tax on the foreign source income of a resident which is exempted or reduced by the other country to a tax treaty shall be deemed the amount of foreign income tax subject to tax credit pursuant to paragraph (1), within the limit prescribed by such tax treaty. <Amended on Dec. 29, 2020>
(4) Where dividend of profits or a distribution of a portion of corporate earnings from a foreign corporation (hereafter referred to as "amount of dividend revenue" in this paragraph) is included in a resident's global income or retirement income, and conditions prescribed by Presidential Decree are satisfied, for example, the tax liability on income of a relevant foreign corporation is borne by a resident investor, not by the relevant foreign corporation, the amount, computed as prescribed by Presidential Decree corresponding to the amount of dividend revenue, among foreign income tax imposed on a resident investor in relation to income of the relevant foreign corporation, shall be deemed a foreign income tax subject to tax credit under paragraph (1). <Added on Dec. 27, 2010; Dec. 29, 2020>
(5) Necessary matters concerning the method of calculating foreign source income, tax credit or inclusion in necessary expenses pursuant to paragraphs (1) through (4) shall be prescribed by Presidential Decree. <Amended on Dec. 27, 2010;Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 57-2 (Special cases concerning tax credit for foreign corporate tax paid by indirect investment company, etc.)
(1) If a resident's global income amount or retirement income amount includes income that satisfies the requirements set forth in any of the following subparagraphs, the amount under paragraph (2)2 may be deducted from the calculated tax on global income or retirement income for the relevant taxable period:
1. The income shall have been received from any of the following entities (hereafter referred to as "indirect investment company, etc." in this Article and Article 129):
a. An investment company, an investment purpose company, an investment limited company, an investment limited partnership company (excluding an institutional private equity fund as defined in Article 9(19)1 of the same Act), an investment limited liability company, investment trust, investment limited partnership, and undisclosed investment association as defined in the Financial Investment Services and Capital Markets Act;
b. Corporate restructuring real estate investment trust and entrusted management real estate investment trust as defined in the Real Estate Investment Company Act;
c. Trust property deemed to be a domestic corporation under Article 5(2) of the Corporate Tax Act;
2. An indirect investment company, etc. shall have paid an amount of foreign corporate tax as defined in Article 57(1) and (6) of the Corporate Tax Act (if the indirect investment company, etc. invests in a structure that involves acquiring securities issued by any other indirect investment company, etc., and if there is an amount of foreign corporate tax paid by such other indirect investment company, etc. under the same provisions, including the relevant tax amount; hereafter referred to as "indirect investment foreign corporate tax" in this Article and Article 129 ) on the income paid to the resident.
(2) In applying paragraph (1), the income paid to a resident by an indirect investment company, etc. and the amount deducted from the calculated tax on global income or retirement income shall be the amounts specified in the following subparagraphs: <Amended on Dec. 31, 2024; Dec. 23, 2025>
1. Income received from an indirect investment company, etc.: The amount calculated based on the base price specified in Article 238(6) of the Financial Investment Services and Capital Markets Act (which means the price after deducting the amount of indirect investment foreign corporate tax; hereafter referred to as "after-tax base price" in this Article and Article 129); provided, income paid by an indirect investment company, etc. due to the sale of securities of the indirect investment company, etc. listed on the stock market under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "securities market") shall be the amount calculated as prescribed by Presidential Decree;
2. The amount deducted from the calculated tax on global income or retirement income: An amount prescribed by Presidential Decree in consideration of the amounts referred to in the following items:
a. The aggregate of the amounts calculated pursuant to Article 129(5)2 when calculating the withholding tax amount under Article 129(5) on the income referred to in subparagraph 1;
b. The aggregate amount of the amounts calculated pursuant to Article 129(8)2 when calculating the amount of withholding tax pursuant to Article 129(8) on the income referred to in subparagraph 1.
(3) Deleted. <Dec. 23, 2025>
(4) The calculation method of income received from an indirect investment company, etc. under paragraphs (1) and (2) and other matters necessary for the tax credit shall be prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
[This Article Added on Dec. 31, 2022]
[Title Amended on Dec. 23, 2025]
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Article 58 (Tax credit for casualty loss)
(1) Where a business entity is deemed to have difficulty in paying taxes, due to asset loss, by a natural disaster or any other accident (hereinafter referred to as "disasters"), equivalent to 20/100 or more of the amount of total assets (hereafter referred to as "amount of total assets" in this paragraph) prescribed by Presidential Decree in the relevant taxable period, the amount calculated (within the limit of the value of assets lost) by multiplying the amount of income tax (referring to the amount of income tax on business income; hereafter the same shall apply in this Article) under the following subparagraphs in proportion (hereafter referred to as "asset loss ratio" in this Article) to the value of such loss to the total assets before the loss shall be deducted from such tax amount. In such cases, the value of land shall not be included in the value of assets: <Amended on Dec. 29, 2020>
1. Income tax not levied as at the date of occurrence of a disaster and income tax levied yet unpaid;
2. Income tax on income in the taxable period to which the date of occurrence of a disaster belongs.
(2) In cases under paragraph (1), when any tax is to be deducted pursuant to Articles 56, 56-2, 57 and 57-2, paragraph (1) shall apply to income tax after deduction of such tax amount. <Amended on Dec. 31, 2022>
(3) Deduction made under paragraph (1) shall be referred to as "tax credit for casualty loss".
(4) Any person who intends to take a tax credit for casualty loss may file an application with the head of the competent tax office, as prescribed by Presidential Decree.
(5) When the head of the competent tax office has received an application under paragraph (4), he or she shall determine the amount of tax to be deducted, and notify it to the applicant.
(6) Paragraph (1) shall be applicable even when no application is made under paragraph (4).
(7) Where disasters occur collectively, paragraph (1) shall apply according to the asset loss ratio investigated and determined by the head of the competent tax office, as prescribed by Presidential Decree.
(8) Matters necessary for taking a tax credit for casualty loss shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 59 (Tax credit for wage and salary income)
(1) A resident with wage and salary income shall be eligible for either of the following credits against the calculated global income tax on his or her wage and salary income: <Amended on Jan. 1, 2014; Act No. 13282, May 13, 2015>
┌─────────────────┬───────────────────────┐
│ Calculated Global Income Tax Amount on Wage and Salary Income │ Amount to be Deducted │
├───────────────────┼─────────────────────┤
│ Not more than 1.3 million │ 55% of the calculated tax │
├───────────────────┼─────────────────────┤
│ More than 1.3 million won │ 715,000 + (30/100 of the amount exceeding 1.3 million won │
│ │
└─────────────────┴───────────────────────┘
(2) Notwithstanding paragraph (1), if the amount of the tax credit exceeds any of the following amounts, the excess shall be deemed nil: <Added on Jan. 1, 2014; May 13, 2015; Dec. 31, 2022>
1. If the gross pay is 33 million won or less: 740,000 won;
2. If the gross pay is more than 33 million won, but not exceeding 70 million won: 740,000 won - [(Gross pay ? 33 million won) × 8/1,000]; provided, if the amount calculated as above is less than 660,000 won, it shall be deemed 660,000 won;
3. If the gross pay is more than 70 million won, but not exceeding 120 million won: 660,000 won - [(Gross pay ? 70 million won) × 1/2]; provided, if the amount calculated as above is less than 500,000 won, it shall be deemed 500,000 won;
4. If the gross pay is more than 120 million won: 500,000 won - [(Gross pay ? 120 million won) × 1/2]; provided, if the amount calculated as above is less than 200,000 won, it shall be deemed 200,000 won.
(3) In cases of withholding taxes from the wage and salary income of a daily employed worker pursuant to Article 134(3), the amount equivalent to 55/100 of the calculated tax on the relevant wage and salary income shall be deducted from such calculated tax amount.
[This Article Wholly Amended on Jan. 1, 2012]
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Article 59-2 (Tax credit for children)
(1) A resident with global income shall be eligible for the deduction of any of the following amounts for the children (including adoptees and foster children; hereafter referred to as "children eligible for tax credit" in this Article) and grandchildren at the age of eight or more who are subject to basic deduction from the calculated tax amount on global income of such resident: <Amended on May 13, 2015; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2022; Dec. 31, 2023; Dec. 31, 2024>
1. For 1 child: 250,000 won per year;
2. For 2 children: 550,000 won per year;
3. For at least 3 children: The aggregate of 550,000 won per year and 400,000 won per year for each child besides 2 children.
(2) Deleted. <Dec. 19, 2017>
(3) If a child eligible for tax credit is born or reported as adopted during the relevant taxable period, any of the following amounts shall be deducted from the calculated tax amount on global income: <Added on May 13, 2015; Dec. 20, 2016>
1. If the child born or reported as adopted is the first child eligible for a tax credit: 300,000 won per year;
2. If the child born or reported as adopted is the second child eligible for a tax credit: 500,000 won per year;
3. If the child born or reported as adopted is at least the third child eligible for a tax credit: 700,000 won per year.
(4) The tax credits under paragraphs (1) and (3) shall be referred to as "tax credits for children." <Added on May 13, 2015; Dec. 19, 2017>
[This Article Added on Jan. 1, 2014]
[Previous Article 59-2 moved to Article 59-5 <Jan. 1, 2014>]
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Article 59-3 (Tax credit for pension accounts)
(1) A resident with global income shall be eligible for the deduction of the amount equivalent to 12/100 (or 15/100, where the amount of a resident's global income aggregated at the time of calculating the tax base of global income for the relevant taxable period does not exceed 45 million won (or where the amount of gross pay does not exceed 55 million won, if a resident has only wage and salary income)) of the amount computed by excluding the following amounts from the amount paid into his or her pension accounts (hereinafter referred to as "payments into pension accounts") from the calculated tax amount on global income for the relevant taxable period; provided, the amount exceeding six million won per year, out of the amount paid into pension savings accounts, among pension accounts, shall be deemed nil; the amount exceeding nine million won per year, out of the sum of the amount not exceeding six million won, out of the amount paid into pension savings accounts, and the amount paid into the retirement pension account, shall be deemed nil;: <Amended on Dec. 23, 2014; May 13, 2015; Dec. 20, 2016; Dec. 31, 2022>
1. Tax-deferred income, such as retirement income from which income tax has not been withheld under Article 146(2);
2. The amount paid in as a result of the transfer of a contract from a pension account to another pension account.
(2) The deduction under paragraph (1) shall be referred to as "tax credit for pension accounts."
(3) If the contract period of an individual savings account as defined in Article 91-18 of the Act on Restriction on Special Cases concerning Taxation expires and all or some of the balance of such account is transferred to a pension account in a manner prescribed by Presidential Decree, the transferred amount (hereafter referred to as "transferred amount" in this Article) shall be included in the payments into pension accounts for the taxable period on which the date of such transfer falls. <Added on Dec. 31, 2019>
(4) If there is any transferred amount, for the purpose of applying paragraph (1), notwithstanding the proviso, with the exception of the subparagraphs, of the same paragraph, the amount exceeding the sum of the lesser of 10/100 of the transferred amount or three million won (if the amount is paid over the previous taxable period and the relevant taxable period, the amount shall be three million won less the amount applied to the previous taxable period) and the amount paid into pension accounts under the proviso, with the exception of the subparagraphs, of paragraph (1), shall be deemed nil. <Added on Dec. 31, 2019>
(5) Matters necessary for the calculation method, procedures for application for tax credit for pension accounts, etc. under paragraphs (1) through (4) shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2019>
[This Article Added on Jan. 1, 2014]
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Article 59-4 (Special tax credits)
(1) If a resident with wage and salary income (excluding a daily employed worker; hereafter the same shall apply in this Article) pays, during the relevant taxable period, insurance premiums in any of the following categories, payable in accordance with an insurance contract for an insurance policy under which the amount refundable at maturity does not exceed paid-in premiums, the amount equivalent to 12/100 (or 15/100 in cases falling under subparagraph 1) of the amount paid shall be deducted from the calculated tax amount on global income during the relevant taxable period; provided, if the sum of the insurance premiums in either of the following categories exceeds one million won per year, such excess shall be deemed nil: <Amended on May 13, 2015>
1. Insurance premiums for an insurance product for the protection only of a disabled person specified by Presidential Decree, among insurance products for which a disabled person entitled to basic deduction may be designated as the insured or a beneficiary;
2. Insurance premiums for an insurance product specified by Presidential Decree, for which a person entitled to basic deduction is designated as the insured (excluding insurance premiums for an insurance product for the protection only of a disabled person under subparagraph 1).
(2) If a resident with wage and salary income pays medical expenses specified by Presidential Decree, during the relevant taxable period, for persons entitled to basic deduction (regardless of their age or income), the amount equivalent to 15/100 (or 20/100, in cases falling under subparagraph 3; 30/100, in cases falling under subparagraph 4) of the following amounts shall be deducted from the calculated tax amount on global income for the relevant taxable period: <Amended on Dec. 23, 2014; Dec. 20, 2016; Dec. 19, 2017; Dec. 8, 2021; Dec. 31, 2023>
1. The amount exceeding the amount calculated by multiplying gross pay by 3/100, out of medial expenses paid for the persons entitled to basic deduction (excluding medical expenses specified in subparagraphs 2 through 4); provided, if the amount exceeds seven million won per year, the amount shall be deemed seven million won per year;
2. Medical expenses paid for any of the following persons; provided, if medical expenses under subparagraph 1 fall short of the amount calculated by multiplying gross pay by 3/100, the shortfall shall be deducted:
a. The resident him or herself;
b. A person aged 6 or under as of the start date of the taxable period;
c. A person aged 65 or older as of the end date of the taxable period;
d. A person with disabilities;
e. A patient suffering from a severe disease, rare intractable disease, or tuberculosis, as prescribed by Presidential Decree;
3. Medical expenses paid for premature infants and congenitally abnormal infants as prescribed by Presidential Decree; provided, if the total amount of medical expenses described in subparagraphs 1 and 2 falls short of the amount calculated by multiplying the gross pay by 3/100, the shortfall shall be deducted;
4. Medical expenses incurred for infertility treatment (hereafter referred to as "infertility treatment" in this subparagraph) as prescribed by Presidential Decree (including expenses for purchasing drugs as defined in Article 2 of the Pharmaceutical Affairs Act, prescribed by a doctor in relation to infertility treatment); provided, if the total amount of medical expenses described in subparagraphs 1 through 3 falls short of the amount calculated by multiplying the gross pay by 3/100, the shortfall shall be deducted.
(3) If a resident with wage and salary income pays education expenses specified by Presidential Decree, during the relevant taxable period, for the resident him or herself and persons entitled to basic deduction (regardless of their age and income, but limited to persons who are under 18 years of age as at the end of the taxable period in cases of any of the institutions specified in subparagraph 3b), the amount equivalent to 15/100 of the following amounts shall be deducted from the calculated tax amount on global income for the taxable period; provided, the education expenses specified by Presidential Decree as those exempt from income tax or gift tax shall not be deducted: <Amended on Dec. 23, 2014; Dec. 20, 2016; Aug. 17, 2021; Dec. 31, 2022; Dec. 23, 2025>
1. The sum of the following education expenses paid for the spouse, lineal descendants, siblings, adopted children, and foster children entitled to basic deduction (hereafter referred to as "lineal descendents, etc." in this subparagraph); provided, education expenses paid to a graduate school or paid with the student loans referred to in subparagraph 2d, borrowed by lineal descendents, etc., shall be excluded herefrom, and the maximum limit for college students shall be nine million won per year per person, while the maximum limit for preschoolers and students enrolled in an elementary, secondary, or high school shall be three million won per year per person:
a. Education expenses paid to schools defined under the Early Childhood Education Act, the Elementary and Secondary Education Act, the Higher Education Act, or any other Special Act, or educational expenses paid for taking an examination mentioned in Article 34(3) of the Higher Education Act;
b. Education expenses paid for the following lifelong education facilities or courses:
1) A lifelong education facility in the form of a school graduates of which are recognized as those graduated from a high school or a lower-level school under Article 31(2) of the Lifelong Education Act, a lifelong education facility that may use the title "specialized college" under Article 31(4) of the same Act (hereinafter referred to as "specialized college"), or a lifelong education facility in the form of a distance college under Article 33 of the same Act (hereinafter referred to as "distance college");
2) An educational course specified by Presidential Decree, among the courses specified in Article 3 of the Act on Recognition of Credits or Article 5(1) of the Act on the Acquisition of Academic Degrees through Self-Education (each of such educational courses shall be referred to as "course for acquiring an academic degree" hereafter in this paragraph);
c. Education expenses paid to overseas educational institutions specified by Presidential Decree (applicable only to students specified by Presidential Decree, if the resident who pays education expenses for students enrolled in an overseas educational institution works within the Republic of Korea);
d. Education expenses paid to child chare facilities defined under the Infant Care Act for preschoolers, private teaching institutes defined under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons, or sports facilities specified by Presidential Decree (limited to the amount specified by Presidential Decree, out of expenses paid to private teaching institutes and sports facilities);
e. Education expenses paid, for a child who is under 9 years of age or an elementary school student in the second grade or lower as of the last day of the taxable period, to an academy teaching artistic skills among the academies defined in subparagraph 1 of Article 2 of the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons, which is prescribed by Presidential Decree, or to a sports facility prescribed by Presidential Decree, limited to the amount prescribed by Presidential Decree;
2. The sum of the following education expenses paid for the resident him or herself:
a. Education expenses specified in subparagraph 1a through c;
b. Education expenses paid for educational courses provided for at least one semester by a college (including courses provide by a specialized college, a distance college, and other courses for the acquisition of an academic degree) or by a graduate school and for programs for part-time enrollment under Article 36 of the Higher Education Act;
c. Tuition fees paid for training provided for the development of vocational skills by training facilities for the development of vocational skills under Article 2 of the National Lifelong Vocational Skills Development Act; provided, if any subsidy, etc. specified by Presidential Decree is granted, it shall be deducted therefrom;
d. Education expenses paid for repaying the principal of student loans specified by Presidential Decree and paying interest thereon; provided, the amount of the payments specified by Presidential Decree, including the amount additionally paid due to the late repayment of a loan, shall be excluded herefrom;
3. Special education expenses specified by Presidential Decree, out of such expenses paid to any of the following entities for persons with disabilities entitled to basic deduction:
a. A social welfare facility or a non-profit corporation specified by Presidential Decree;
b. An institution specified by Presidential Decree, among those that provide rehabilitative services for the improvement and development of functions and behavior of persons with disabilities;
c. A facility or corporation in a foreign country, which is similar to the facilities or corporations specified in item a above.
(4) If a resident (excluding persons with business income only, but including persons specified by Presidential Decree, such as those specified in Article 73(1)4) made donations during the relevant taxable period (including donations made by the persons specified in Article 50(1)2 or 3 (excluding persons entitled to basic deduction for another resident, regardless of age)), the amount equivalent to 15/100 (or 30/100 of the amount exceeding 10 million won, if the relevant amount exceeds 10 million won) of the amount calculated by subtracting the donations included in necessary expenses from the sum of the following donations (hereafter referred to as "tax credit for donations" in Article 61(2)), shall be deducted from the calculated tax amount on global income subject to aggregate taxation for the relevant taxable period (excluding the calculated tax amount on business income, if donations have been already included in necessary expenses), when calculating the amount of business income. In such cases, the donations under subparagraph 1 shall be deducted first, if donations under subparagraph 1 and donations under subparagraph 2 were made concurrently during the relevant taxable period, but the donations made on or before December 31, 2013 shall be deducted first, prior to the donations made during the relevant taxable period, if the former donations were carried over and are deducted from income for the taxable period that begins on or after January 1, 2014: <Amended on Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016; Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2022>
1. Special donations as specified in Article 34(2)1;
2. General donations as specified in Article 34(3)1. In such cases, the maximum limit on such donations shall be as follows:
a. Where donations are made to a religious organization:
Maximum limit = [The amount calculated by subtracting the donations under subparagraph 1 from the amount of global income (excluding the interest income and dividend income subject to withholding tax rates under Article 62); hereafter referred to as "amount of income" in this paragraph] x 10/100 + [20/100 of the amount of income or the amount of donations given to non-religious organizations, whichever is smaller];
b. Cases that do not fall under item a above:
Maximum limit = 30/100 of the amount of income.
(5) In applying paragraphs (1) through (3), if any amount is already paid for a person who was a resident's spouse, dependent, or disabled person who ceased to be entitled to basic deduction due to marriage, divorce, separation, employment, or any other cause before the end of the relevant taxable period or for a person aged at least 65 years at the end of the relevant taxable period, the amount calculated by applying the rates under paragraphs (1) through (3) to the amount paid until the date on which such cause arose shall be deducted from the calculated tax amount on global income during the relevant taxable period.
(6) The deductions under paragraphs (1) through (4) shall apply where a resident files an application, as prescribed by Presidential Decree.
(7) To ascertain whether educational expenses specified in paragraph (3)2d are eligible for tax credit, the Commissioner of National Tax Service may request any of the institutions specified by Presidential Decree as those which provide services for the lending and repayment of student loans, including the Korea Student Aid Foundation established under Article 6 of the Act on the Establishment of Korea Student Aid Foundation (hereafter referred to as "Korea Student Aid Foundation or any similar institution" in this paragraph), to provide the data specified by Presidential Decree, such as details of student loans and of repayment of principal and interest thereon. In such cases, upon receipt of such request, the Korea Student Aid Foundation or any similar institution shall comply therewith, except in extenuating circumstances. <Added on Dec. 20, 2016>
(8) Notwithstanding paragraph (4), where donations made between January 1, 2024 and December 31, 2024 are deducted from the total amount of calculated tax amount on global income (excluding the amount of calculated tax on business income, if there is any donation included in necessary expenses) for the relevant taxable period, if the total amount of the donations under each subparagraph of that paragraph, minus the amount included in necessary expenses when calculating business income, exceeds 30 million won, an amount equal to 10/100 shall be further deducted, an additional deduction equivalent to 10 percent of the excess amount shall be allowed. <Added on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2023>
(9) For a resident falling within any of the following subparagraphs, the amount specified below shall be deducted from the total amount of calculated tax amount on global income (hereinafter referred to as "standard tax credit"): <Amended on Dec. 29, 2020; Dec. 23, 2025>
1. For a resident with wage and salary income who fails to file an application for income deduction or tax credit under paragraph (6) of this Article or Article 52(8) of this Act, or Article 95-2(3) of the Act on Restriction on Special cases Concerning Taxation: 130,000 won per year;
2. For a resident with global income (excluding persons with wage and salary income) who fails to file an application for tax credit under Article 122-3 of the Act on Restriction on Special cases Concerning Taxation: the amount specified below:
a. For a business entity who meets the requirements specified by Presidential Decree with regard to the reporting, etc. of business accounts under Article 160-5(3) (hereinafter referred to as "compliant business entity"): 120,000 won per year;
b. For a resident other than the business entities specified in item a above: 70,000 won per year.
(10) The credits under paragraphs (1) through (9) shall be referred to as "special tax credits."
(11) Other necessary matters concerning special tax credits shall be prescribed by Presidential Decree.
[This Article Added on Jan. 1, 2014]
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Article 59-5 (Reduction or exemption of tax)
(1) When any of the following income is included in global income, the amount equivalent to the amount calculated by multiplying the calculated tax on global income by the ratio of the relevant wage and salary income or the relevant business income to the amount of global income shall be reduced or exempted from the calculated tax on global income: <Amended on Jan. 1, 2013>
1. Pay received by a foreigner dispatched to the Republic of Korea according to an agreement between the governments from the governments of both parties or the government of one party;
2. Income received by a resident who does not have Korean nationalty from an overseas navigation business of ships or airplanes prescribed by Presidential Decree; provided, this shall only apply where the same exemption applies to ships or airplanes that a Korean national operates in the country of nationality of such resident.
(2) Except as otherwise provided expressly by any Act other than this Act, paragraph (1) shall apply mutatis mutandis to the reduction or exemption of the calculated income tax, even where income tax is reduced or exempted under such Act.
[This Article Added on Dec. 31, 2009]
[Moved from Article 59-2 <Jan. 1, 2014>]
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Article 60 (Order of application of tax reduction or exemption or tax credit)
(1) For the purposes of tax-related Acts, if provisions concerning the reduction or exemption of income tax and those concerning tax credit are applied concurrently, such precedence of application shall be in the following order:
1. Reduction or exemption of income tax on income in the relevant taxable period;
2. Tax credit for which a carryforward is not recognized;
3. Tax credit for which a carryforward is recognized. In such cases, if an amount of tax is credited which occurs in the relevant taxable period and an amount is credited, yet carried forward from the preceding taxable period at the same time, the amount not credited, yet carried forward shall be credited first.
(2) Deleted. <Dec. 23, 2014>
(3) Deleted. <Dec. 23, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 61 (Methods of application where tax exemption or reduction or tax credit exceeds calculated tax amount)
(1) If the sum of tax credits under Article 59-4(1) through (3) of this Act and Article 95-2 of the Act on Restriction on Special cases Concerning Taxation exceeds the calculated tax amount on global income for the resident's wage and salary income specified by Presidential Decree for the relevant taxable period, the excess shall be deemed nil.
(2) If the sum of the tax credit for children under Article 59-2, the tax credit for pension accounts under Article 59-3, the special tax credits under Article 59-4, and the tax credits under Articles 58, 76, and 88-4(13) of the Restriction of Special Taxation Act exceeds the resident's calculated tax amount on global income, which shall be aggregated for taxation for the relevant taxable period (excluding the calculated tax amount specified by Presidential Decree on interest income and dividend income to which withholding tax rates shall apply pursuant to Article 62; hereafter referred to as "deductible standard calculated tax amount" in this Article), the excess shall be deemed nil; provided, if the excess includes the tax credit for a donation, the tax credit for the donation and the donation that is not deducted because it exceeds the maximum limit under Article 59-4(4)2 shall be calculated by carrying over the donations to the taxable years that end within 10 years from the commencement date of the taxable period immediately following the relevant taxable period and by applying the rate specified in Article 59-4(4) and shall be deducted from the deductible standard calculated tax amount. <Amended by Act No. 16104, Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2024>
(3) If the sum of the tax exemption and reduction and tax credits under this Act and the Act on Restriction on Special cases Concerning Taxation exceeds the calculated tax amount on global income, which shall be aggregated for taxation for the relevant taxable period, the excess shall be deemed nil, and it shall be deemed that the tax credit for pension accounts has not been granted up to the excess; provided, if the tax credit for casualty loss under Article 58 exceeds the amount calculated by subtracting other tax exemptions and reductions and tax credits from the calculated amount on global income tax and then adding a penalty tax to the amount so calculated, the excess shall be deemed nil.
[This Article Added on Dec. 23, 2014]
SECTION 5 Special Cases in Calculation of Tax
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Article 62 (Special case concerning calculation of tax in relation to global taxation on interest income)
If interest income and dividend income which are included in a resident's tax base of global income (hereafter referred to as "interest income, etc." in this Article) exceed the global taxation threshold (hereafter referred to as "global taxation threshold" in this Article) on interest income, etc., the calculated amount of global income tax of the relevant resident shall be the greater of the following amounts, but if such income does not exceed the global taxation threshold, the amount of subparagraph 2 shall apply. In such cases, when a resident has any dividend income under Article 17(1)8, such dividend income shall not be deemed interest income, etc.: <Amended on Dec. 27, 2010; Dec. 23, 2014; Dec. 20, 2016; Dec. 31, 2018>
1. The sum of the following tax amounts:
a. The calculated tax on the amount calculated by aggregating the excess of the global taxation threshold among the amount of interest income, etc. and the amount of other global income excluding the amount of interest income, etc.;
b. The tax amount calculated by applying the tax rate specified in Article 129(1)1d to the global taxation threshold;
2. The sum of the following tax amounts:
a. The tax amount calculated by applying the tax rates specified in Article 129(1)1 and 2 to interest income, etc.; provided, the tax rate specified for each category of income in the following shall apply to the relevant income:
1) Deleted. <Dec. 31, 2018>;
2) Income under Article 16(1)11, out of interest income, etc. not subject to tax withholding under Article 127: The tax rate specified in Article 129(1)1b;
3) Interest income, etc., exclusive of the income specified in Article 16(1)11, out of interest income, etc. not subject to tax withholding under Article 127: The tax rate specified in Article 129(1)1d;
b. The calculated tax amount on the amount of other global income excluding the interest income, etc.; provided, where the amount of relevant tax is less than an aggregate of taxes calculated (hereafter referred to as "comparative tax on global income" in this item) by applying the tax rate specified in Article 129(1)1d to the dividend income under Article 17(1)8, and the calculated tax on the amount of other global income excluding the interest income, etc. and the dividend income under Article 17(1)8, it shall be the comparative tax on global income.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 63 (Special case concerning calculations of tax on excess repayment from workplace mutual-aid association)
(1) With regard to excess repayment from a workplace mutual-aid association under Article 16(1)10 (hereafter referred to as "excess repayment from a workplace mutual-aid association" in this Article), the amount of tax shall be such amount of excess minus the following deductions to be taken in order, divided by the number of years paid (if a period of it is less than a year, it shall be deemed one year; hereinafter the same shall apply), and multiplied by the applicable tax rates and by the number of years paid: <Amended on Dec. 27, 2010>
1. The amount equivalent to 40/100 of the excess repayment from a workplace mutual-aid association;
2. The following amount determined according to the number of years paid:
<Number of Years Paid><Amount of Credit>
Five or less years300,000 won × the number of years paid
Over five years, but not exceeding ten years1.5 million won + 500,000 won × (the number of years paid － five years)
Over ten years, but not exceeding 20 yearsFour million won + 800,000 won × (the number of years paid - ten years)
Over 20 years12 million won + 1.2 million won × (the number of years paid － 20 years)
[This Article Wholly Amended on Dec. 31, 2009]
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Article 64 (Special cases concerning calculation of tax amount for real estate broker)
(1) The calculated amount of global income tax on a resident whose global income includes the profit margin earned by trading an asset referred to in Article 104(1)1 (limited to a right to buy a house), 8, or 10 or any subparagraph of Article 104(7) (hereafter referred to as "profit margin from trading houses, etc." in this Article) while engaging in a real estate trading business prescribed by Presidential Decree (hereinafter referred to as "real estate trading business") (hereinafter referred to as "real estate broker"), shall be the greater of the following tax amounts: <Amended on Dec. 23, 2014; Dec. 19, 2017; Dec. 29, 2020>
1. The calculated taxes on global income;
2. The sum of the following tax amounts:
a. The total tax amount calculated by applying the tax rate specified in Article 104 to the profit margin from trading houses, etc.;
b. The amount of tax calculated by applying the tax rate specified in Article 55 to the tax base which is calculated by deducting the total profit margin from trading houses, etc. in the relevant taxable period from the global income tax base.
(2) Matters necessary to calculate profit margin from trading houses, etc. and calculated tax on other global income on a real estate broker, shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 64-2 (Special cases concerning calculation of tax amount on house rental income)
(1) The final tax amount on global income of a resident who has house rental income subject to separate taxation shall be chosen from the following tax amounts:
1. The final tax amount on global income before applying Article 14(3)7;
2. The sum of the following tax amounts:
a. The amount of business income from housing rental income subject to separate taxation; provided, where a resident falling under Article 96(1) of the Act on Restriction on Special cases Concerning Taxation rents out a rental houses under Article 96(1), the aforesaid business income amount shall be replaced by the amount calculated by subtracting the tax amount reduced or exempted pursuant to Article 96(1) from the amount obtained by multiplying by 14/100 the amount of business income belonging to the housing rental income subject to separate taxation that is generated from the relevant rental business.
b. The amount of final tax on global income other than the amount described in a above.
(2) The amount of business income belonging to housing rental income subject to separate taxation under paragraph (1)2a shall be the amount calculated by subtracting necessary expenses (referring to 50/100 of the amount of total income) from the amount of total income, but where the amount of global income excluding housing rental income subject to separate taxation for the relevant taxable period is 20 million won less, the amount of business income shall be that calculated by additionally subtracting 2 million won; provided, in case of renting out a rental house prescribed by Presidential Decree (hereinafter referred to as "rental house" in this Article), the amount of business income generated form the relevant rental business shall be the amount calculated by subtracting the necessary expenses (referring to 60/100 of the amount of total income) from the amount of total income, but where the amount of global income excluding housing rental income subject to separate taxation for the relevant taxable period is 20 million won less, the amount of business income shall be that calculated by additionally subtracting 4 million won.
(3) In cases falling under any of the following subparagraphs, the amount as classified therein shall be paid when filing a return on the tax base for the taxable period to which the day on which the relevant cause specified therein occurs belongs; provided, this shall not apply in 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: <Amended on Dec. 29, 2020>
1. Where a business entity whose tax amount is reduced or exempted pursuant to the proviso to paragraph (1)2a has not rent out the relevant rental house for at least four years (eight years in case of a public-supported private rental house under subparagraph 4 of Article 2 of the Special Act on Private Rental Housing or a long-term general private rental house under subparagraph 5 of Article 2 of that Act): The tax amount reduced or exempted pursuant to the proviso to paragraph (1)2a;
2. Where a business entity whose tax amount is calculated by applying the proviso to paragraph (2) has not rent out the relevant rental house for at least four years: the difference between the tax amount calculated by not applying the proviso to paragraph (2) and the tax amount at the time a return is initially filed.
(4) In case of paying income tax amount pursuant to any subparagraph of paragraph (3), provisions concerning the additional amount equivalent to the interest under Article 63(3) of the Act on Restriction on Special Cases concerning Taxation shall apply mutatis mutandis; provided, the foregoing provisions shall not apply in inevitable circumstances prescribed by Presidential Decree. <Amended on Dec. 31, 2023>
(5) Matters necessary for methods for calculating the final amount on global income tax on housing rental income subject to separate taxation, and for calculating the amount of business income by type of a rental house, shall be prescribed by Presidential Decree.
[This Article Wholly Amended on, Dec. 31, 2018]
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Article 64-3 (Special cases concerning calculation of tax on other income subject to separate taxation)
(1) For the purpose of calculating the basic tax rate to the global income tax base under Article 14, if the income specified in Article 127(1)6b is not combined, the final tax on the relevant other income not so combined shall be the amount calculated by applying the tax rate mentioned in Article 129(1)6d to the amount of such other income. <Amended on Dec. 29, 2020>
(2) The final tax on the income specified in Article 21(1)27 shall be the amount calculated by multiplying the amount of the relevant other income (hereinafter referred to as "the amount of virtual asset income") minus 2.5 million won by 20/100. <Added on Dec. 29, 2020>
[This Article Added on Dec. 31, 2019]
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Article 64-4 (Special cases concerning calculation of tax on pension income)
For the final tax on global income of a resident who has pension income other than the pension income subject to separate taxation mentioned in Article 20-3(1)2 and 3, either of the following tax amounts shall be applied:
1. The amount of final tax on global income;
2. The sum of the following tax amounts:
a. The amount calculated by multiplying the pension income other than the pension income subject to separate taxation, out of the pension income described in Article 20-3(1)2 or 3 by 15/100;
b. The amount of final tax on global income other than the amount described in a above.
[This Article Added on Dec. 31, 2022]
SECTION 6 Interim Prepayment, Preliminary Return and Payment of Tax
Subsection 1 Interim Prepayment
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Article 65 (Interim prepayment)
(1) The head of a tax office having jurisdiction over the place for tax payment shall determine the amount (hereinafter referred to as "amount of interim tax prepayment"; and the fractional figure less than 1,000 won shall be ignored) equivalent to 1/2 of the amount of tax paid or payable as income tax on global income derived in the preceding taxable period (hereinafter referred to as "interim prepayment threshold") for a resident with global income (excluding a person who has income prescribed by Presidential Decree only and a person who starts a business during the taxable period and is not a business entity as at the commencement date of the relevant taxable period; hereafter the same shall apply in this Article) as tax payable for a taxable period for interim prepayment from January 1 to June 30 and collect such tax payable by November 30. In such cases, the head of a tax office having jurisdiction over the place for tax payment shall issue a payment notice of the amount of tax for interim prepayment during the period from November 1 to November 15 to the residents liable to pay the tax for interim tax prepayment. <Amended on Jan. 1, 2013; Dec. 29, 2020>
(2) Where a resident liable to pay the tax for interim prepayment notified pursuant to paragraph (1) fails to pay all or part of such tax by November 30, it shall be deemed that no payment notice has been issued for the tax unpaid which may be paid in installment pursuant to Article 77, and the head of a tax office having jurisdiction over the place for tax payment shall issue a payment notice on the tax allowed to be paid in installment between January 1 and 15 of the following year after the tax period concerned. <Amended on Jan. 1, 2012; Dec. 29, 2020>
(3) Where the income tax on the global income of a resident with global income as of the end of the interim prepayment period (hereinafter referred to as "estimated amount for interim prepayment") is less than 30/100 of the interim prepayment threshold, he or she may file a return with the head of a tax office having jurisdiction over the place for tax payment, referring the estimated amount of interim prepayment as the amount of interim tax prepayment, during the period from November 1 to 30, as prescribed by Presidential Decree.
(4) Where a resident with global income files a return pursuant to paragraph (3), a decision on the tax amount of interim prepayment pursuant to paragraph (1) shall not be deemed to have been made.
(5) Where a person subject to double-entry bookkeeping under Article 160(3) among the residents who do not have the interim prepayment threshold has business income during the interim prepayment period of the relevant taxable period, he or she shall file a return with the head of a tax office having jurisdiction over the place for tax payment, referring the estimated amount for interim prepayment as the tax amount for interim prepayment, during the period from November 1 to 30, as prescribed by Presidential Decree. <Amended on, Dec. 31, 2018>
(6) Any resident who files a return pursuant to paragraph (3) or (5) shall pay the amount for interim tax prepayment along with the return to the head of a tax office having jurisdiction over the place for tax payment, the Bank of Korea (including its branches; hereinafter the same shall apply) or a postal service office by November 30.
(7) The interim prepayment threshold under paragraph (1) shall be the amount calculated by deducting the tax refund pursuant to Article 85 (where a decision is made upon request for reassessment pursuant to Article 45-2 of the Framework Act on National Taxes, including the amount reflecting the details thereof) from the total amount of the following taxes:
1. The amount for interim tax prepayment in the preceding taxable period;
2. Tax paid by a final return pursuant to Article 76;
3. The amount of tax additionally paid under Article 85 (including the penalty tax);
4. The amount of tax paid according to a return filed after deadline (including penalty tax) pursuant to Article 45-3 of the Framework Act on National Taxes and the additional tax amount paid voluntarily (including the additional tax amount) pursuant to Article 46 of the same Act.
(8) The estimated amount for interim prepayment under paragraph (3) shall be computed according to order given in the following formulas:
1. Tax base of global income = (the amount of global income for the interim prepayment period × 2) - loss carried forward - global income deduction);
2. Calculated tax on global income = Tax base of global income × basic tax rate;
3. Estimated amount for interim prepayment =
(Calculated tax on global income / 2) - (The amount of tax reduction or exemption, or tax credit on global income, the amount of tax calculated from a preliminary return on profit margins from sale of land, etc., the amount of tax imposed occasionally, and the amount of tax withheld, by the end of the interim prepayment period)
(9) Where any omission or error is found in a tax return filed pursuant to paragraph (3) or (5) or a person liable to file a return pursuant to paragraph (5) fails to file a return, the head of a tax office having jurisdiction over the place for tax payment may correct or determine the amount of tax for interim prepayment. In such cases, the amount of tax to be corrected or determined shall be the amount computed by applying the method used for computing the estimated amount for interim prepayment under paragraph (8) mutatis mutandis.
(10) Where a real estate broker under Article 69 files a preliminary return on profit margins from sale of land, etc. on land or buildings sold during the interim prepayment period and pays tax on such profit margins, the amount of tax for interim prepayment shall be calculated by subtracting such amount reported and paid from the amount equivalent to 1/2 of the interim prepayment threshold under paragraph (1). In such cases, where the tax amount on such profit margins from sale of land, etc. reported and paid exceeds the amount equivalent to 1/2 of the interim prepayment threshold, the amount of tax for interim prepayment shall be deemed written off.
(11) Notwithstanding paragraphs (1) through (5), the head of a tax office having jurisdiction over the place for tax payment may determine the amount of tax for interim prepayment in the relevant taxable period within the extent not exceeding the following amounts, as prescribed by Presidential Decree, where the Commissioner of National Tax Service deems that there is urgent financial demand due to circumstances, such as troubles both in Korea and abroad, etc.:
1. Where interim prepayment is made pursuant to paragraph (1), the interim prepayment threshold;
2. Where interim prepayment is made pursuant to paragraphs (3) and (5), the amount which is double the estimated amount for interim prepayment under paragraph (8).
[This Article Wholly Amended on Dec. 31, 2009]
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Article 66 Deleted. <Dec. 29, 2000>
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Article 67 Deleted. <Dec. 29, 2000>
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Article 68 (Special cases concerning interim prepayment by member of taxpayers association)
Where a taxpayers association has collected and paid, each month, income tax on the relevant income of its members pursuant to Article 150 during the interim prepayment period, interim prepayment on such income shall not be made.
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 2 Preliminary Return on Profit Margin from Sale of Land and Payment
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Article 69 (Preliminary return on profit margin from sale and purchase of land, etc. and voluntary payment by real estate broker)
(1) A real estate broker shall file a return on profit margin from trading land or buildings (hereinafter referred to as "land, etc.") and the amount of tax thereon with the head of a tax office having jurisdiction over the place for tax payment by the date arriving two months from the end of the month in which the trading date falls, as prescribed by Presidential Decree. The same shall also apply where there is no profit margin from trading land, etc. or any trading loss occurs.
(2) A return under paragraph (1) shall be referred to as "preliminary return on profit margin from sale and purchase of land, etc."
(3) The calculated tax on a real estate broker's profit margin from sale and purchase of land, etc. shall be calculated by multiplying the amount obtained by deducting necessary expenses calculated by applying Article 97 mutatis mutandis, from the value of trade, by tax rates prescribed in Article 104; provided, notwithstanding Article 104(1)2 and 3, if the holding period of land, etc. is less than two years, the calculated tax shall be computed by multiplying the amount obtained as stated above by the tax rate pursuant to subparagraph 1 of the same paragraph. <Amended on Jan. 1, 2014>
(4) A real estate broker shall pay the tax calculated pursuant to paragraph (3) until the deadline for preliminary return on sales profit margin under paragraph (1) to the tax office having jurisdiction over the place for tax payment, the Bank of Korea, or a postal service office, as prescribed by Presidential Decree. <Added on Jan. 1, 2013>
(5) Articles 107(2), 114, and 114-2 shall apply mutatis mutandis to the calculation, determination, and rectification of the calculated tax on profit margin from sale and purchase of land, etc. and the penalty tax on the application of a converted acquisition value (refering to the value converted from the actual transaction value, sales case value, or appraised value in accordance with the method prescribed by Presidential Decree; the same shall also apply in Articles 97(1) and (2), 100(1), 114(7), and 114-2). <Amended on Jan. 1, 2013; Dec. 19, 2017; Dec. 31, 2019; Dec. 29, 2020>
(6) Necessary matters concerning calculation of a profit margin from transacting land, etc. and the amount of tax thereon shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 7 Final Return on Tax Base and Voluntary Payment
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Article 70 (Final return on tax base of global income)
(1) Any resident (including a resident with no tax base for global income or any loss) with the amount of global income in the relevant taxable period shall file a return on the tax base of such global income with the head of a tax office having jurisdiction over the place for tax payment, from May 1 to May 31 in the year following such taxable period, as prescribed by Presidential Decree. <Amended on Dec. 27, 2010>
(2) Paragraph (1) shall also apply where a resident has house rental income subject to separate taxation, or income as specified in Article 21(1)27 or 127(1)6b for the relevant taxable period. <Added on Dec. 23, 2014; Dec. 31, 2019; Dec. 29, 2020>
(3) A return under paragraph (1) shall be referred to as "final return on the tax base of global income."
(4) In filing a final return on the tax base of global income, a person shall file such return with the head of a tax office having jurisdiction over the place for tax payment, along with the following documents. In such cases, where any person liable for double-entry bookkeeping under Article 160(3) fails to submit the documents specified in subparagraph 3, he or she shall be deemed not to have filed a final return on the tax base of global income: <Amended on Dec. 27, 2010; Jan. 1, 2012; Jan. 1, 2014; Oct. 1, 2025>
1. Documents prescribed by Presidential Decree, which evidence that he or she is entitled to personal deduction, pension insurance premium deduction, interest expense deduction for reverse mortgage-backed retirement pension system, special income deduction, tax credit for children, tax credit for pension accounts, or special tax credits;
2. Documents prescribed by Presidential Decree, as necessary for calculating the total amount of income and the necessary expenses which form the basis of the calculation of the amount of global income;
3. Where the amount of business income is calculated on the basis of the books of account and evidentiary documents kept and entered under Articles 160 and 161, the statement of financial position, the statement of profit or loss and the attached documents thereto, the compound trial balance prepared by applying mutatis mutandis the corporate accounting standards, and the adjusted account statement prepared, as prescribed by Presidential Decree; provided, in cases of a business entity who bookkeeps pursuant to Article 160(2), the account statement of the amount of income by simple bookkeeping prescribed by Decree of the Ministry of Finance and Economy;
4. Where necessary expenses are included pursuant to Articles 28 through 32, a detailed statement thereof;
5. Where a business entity (excluding any small-scale business entity prescribed by Presidential Decree) has been supplied goods or services by another business entity (including a corporation) in connection with the business and receives verification other than evidentiary documents falling under any subparagraph of Article 160-2(2), a detailed statement of the reception of receipts prescribed by Presidential Decree (hereinafter referred to as "detailed statement of the reception of receipts");
6. Where the amount of business income is not calculated on the basis of the books of account and evidentiary documents kept and recorded pursuant to Articles 160 and 161, the account statement of estimated income prescribed by Decree of the Ministry of Finance and Economy.
(5) When deficient matters or errors exist in a return or other documents filed pursuant to paragraph (4), the head of a tax office having jurisdiction over the place for tax payment may request the supplement and rectification thereof.
(6) In cases of the business entities specified by Presidential Decree as those deemed necessary in order to ensure accurate tax adjustments for the calculation of income amounts, among persons subject to double-entry bookkeeping under Article 160(3), the adjusted account statement referred to in paragraph (4)3 shall be prepared by a person who belongs to the adjustment team specified by Presidential Decree, from among the following persons: <Added on Dec. 15, 2015; Nov. 23, 2021>
1. A certified tax accountant registered in the register of certified tax accountants under the Certified Tax Accountant Act;
2. A certified public accountant registered in the register of certified tax accountants or the register of tax agent services for certified public accountants under the Certified Tax Accountant Act;
3. An attorney-at-law registered in the register of certified tax accountants or the register of tax agent services for attorney-at-laws under the Certified Tax Accountant Act.
[This Article Wholly Amended on Dec. 31, 2009]
[This Article, which had been held constitutionally nonconforming by the Constitutional Court on Apr. 26, 2018, was amended by Act No. 18521 on Nov. 23, 2021]
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Article 70-2 (Submission of certificate of confirmation of compliant filing)
(1) Where it is deemed necessary for compliant tax payment, a business entity whose income for each type of business exceeds a certain level prescribed by Presidential Decree (hereinafter referred to as "business entity subject to confirmation of compliant filing") shall, when filing a final return on the tax base of global income under Article 70, submit a certificate of confirmation (hereinafter referred to as "certificate of confirmation of compliant filing") to the head of a tax office having jurisdiction over the place for tax payment, which is prepared by a person prescribed by Presidential Decree, such as a tax accountant, after confirming the propriety of the amount of business income calculated based on the books and supporting documents kept and recorded under Articles 160 and 161 as prescribed by Presidential Decree, in addition to the documents listed in the subparagraphs of Article 70(4).
(2) Where a business entity subject to confirmation of compliant filing submits a certificate of confirmation of compliant filing under paragraph (1), notwithstanding Article 70(1), the filing of the final tax return on the tax base of global income shall be made from May 1 and by no later than June 30 of the year following the year in which the concerned taxable period falls. <Amended on Jan. 1, 2013>
(3) When a certificate of confirmation of compliant filing submitted pursuant to paragraph (1) reveals any deficiencies or errors, the head of a tax office having jurisdiction over the place for tax payment may request the supplement and rectification thereof.
[This Article Added on May 2, 2011]
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Article 71 (Final return on tax base of retirement income)
(1) A resident with the amount of retirement income in the relevant taxable period shall file a return on the tax base of such retirement income with the head of a tax office having jurisdiction over the place for tax payment, from May 1 to May 31 in the year following such taxable period, as prescribed by Presidential Decree.
(2) Paragraph (1) shall also apply when there is no tax base of retirement income in the relevant taxable period; provided, this shall not apply to a person who pays the income tax pursuant to Articles 146 through 148.
(3) A return filed pursuant to paragraph (1) shall be referred to as a "final return on tax base of retirement income."
[This Article Wholly Amended on Dec. 31, 2009]
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Article 72 Deleted. <Dec. 30, 2006>
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Article 73 (Exception to final return on tax base)
(1) Notwithstanding Articles 70 and 71, any of the following residents may choose not to file a final return on the tax base of the relevant income: <Amended on Jan. 1, 2013; Dec. 15, 2015; Dec. 31, 2019>
1. A resident with only wage and salary income;
2. A resident with only retirement income;
3. A resident with only public pension income;
4. A resident with only business income prescribed by Presidential Decree, from which a withholding tax is deducted pursuant to Article 127;
4-2. A person with only a religious person’s income as other income subject to withholding under Article 127(1)6;
5. A resident with only income specified in subparagraphs 1 and 2;
6. A resident with only income specified in subparagraphs 2 and 3;
7. A resident with only income specified in subparagraphs 2 and 4;
7-2. A person with only income specified in subparagraphs 2 and 4-2;
8. A resident with only interest income, dividend income, pension income, and other income subject to separate taxation (excluding income not subject to withholding under Article 127; hereafter the same shall apply in this paragraph);
9. A resident falling under subparagraph 1 through 4, 4-2, 5 through 7, or 7-2 who has interest income, dividend income, pension income, and other income subject to separate taxation.
(2) Paragraph (1) shall not apply to a person (excluding a worker employed on a daily basis) with any of the following incomes paid by at least two persons; provided, this shall not apply to any person who has no tax to be voluntarily paid according to a final tax return filed pursuant to Article 76(2) after the year-end settlement under Article 137-2, 138, 144-2(6), or 145-3 and the payment of income tax under Article 148(1): <Amended on Dec. 27, 2010; Jan. 1, 2013; Dec. 15, 2015; Dec. 23, 2025>
1. Wage and salary income;
2. Public pension income;
3. Retirement income;
4. Religious persons’ income;
5. Income specified in paragraph (1)4.
(3) Paragraph (1) shall not apply to a person with wage and salary income under the items of Article 127(1)4 or retirement income falling under the proviso to Article 127(1)7; provided, this shall not apply to a person who has paid income tax pursuant to Article 152(2) in the same manner as income tax is paid by withholding tax pursuant to Articles 137, 137-2, and 138. <Amended on Dec. 27, 2010; Jan. 1, 2013>
(4) Paragraph (1) shall not apply where a withholding agent under Article 127 fails to withhold income tax from those with the income specified in any subparagraph of paragraph (2) (excluding income of a worker employed on a daily basis) pursuant to Article 137, 137-2, 138, 143-4, 144-2, 145-3, or 146. <Amended on Dec. 27, 2010; Dec. 15, 2015>
(5) Where no additional income is generated after the occasional imposition pursuant to Article 82, he or she may choose not to file a final return on the tax base.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 74 (Special cases concerning final return on tax base)
(1) If a resident dies, his or her inheritor shall file a return on the resident's tax base for the taxable period in which the date of death falls within six months from the last day of the month in which the date of commencement of inheritance falls (where the inheritor departs from the Republic of Korea during this period, the day before the date of departure), as prescribed by Presidential Decree; provided, this shall not apply to the income from the pension account succeeded by a heir pursuant to Article 44(2). <Amended on Jan. 1, 2012; Jan. 1, 2013>
(2) Paragraph (1) shall apply mutatis mutandis to cases where a resident who died between January 1 and May 31 had failed to file a final return on the tax base for the preceding taxable period of the taxable period to which the date of death belongs.
(3) Paragraphs (1) and (2) shall apply mutatis mutandis where the relevant inheritor dies without filing a final return on the tax base in the given period.
(4) Where a resident liable to file a final return on the tax base is to depart from the Republic of Korea, he or she shall file a return on the tax base for the taxable period in which the date of departure falls, by not later than the day before the date of departure.
(5) Paragraph (4) shall apply mutatis mutandis to a final return on the tax base for the preceding taxable period of the taxable period to which the date of departure belongs, where a resident departs from the Republic of Korea between January 1 and May 31.
(6) Article 70(4) and (5) shall apply mutatis mutandis to special cases concerning a final return on the tax base under paragraphs (1) through (5).
[This Article Wholly Amended on Dec. 31, 2009]
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Article 75 (Application for reduction or exemption of tax)
(1) A resident who intends to qualify for income tax reduction or exemption under Article 59-5(1) shall file an application with the head of a tax office having jurisdiction over the place for tax payment, together with a return under Article 69, 70, 70-2, or 74, as prescribed by Presidential Decree. <Amended on Jan. 1, 2013; Jan. 1, 2014>
(2) A person who intends to qualify for reduction or exemption of wage and salary income under Article 59-5(1)1 shall file an application with the head of the competent tax office, as prescribed by Presidential Decree. <Amended on Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 76 (Final tax return and payment)
(1) Any resident shall pay the amount calculated by deducting the amount of tax reduced or exempted and the amount of tax deducted from the calculated tax on global income or the calculated tax on retirement income based on the tax base of the relevant taxable period to a tax office having jurisdiction over the place for tax payment, the Bank of Korea, or a postal service office, as prescribed by Presidential Decree, by not later than the deadline for the final return on the tax base pursuant to Articles 70, 70-2, 71 and 74. <Amended on Jan. 1, 2013>
(2) Payment pursuant to paragraph (1) shall be referred to as "payment by final return" in this Chapter. <Amended on Dec. 29, 2020>
(3) When a person pays taxes by final return, he or she shall deduct the following amount of taxes: <Amended on Dec. 27, 2010>
1. The amount of tax for interim prepayment pursuant to Article 65;
2. The amount of tax calculated, determined, or corrected for a preliminary return on profit margin from sale and purchase of land, etc. pursuant to Article 69;
3. Tax imposed occasionally under Article 82;
4. The amount of a withholding tax pursuant to Article 127 (the amount of a withholding tax on the amount equivalent to interest, etc. of bonds, etc. pursuant to Article 133-2(1) shall be limited to the tax amount equivalent to interest, etc. during the holding period of the relevant resident pursuant to Article 46(1));
5. Tax collected by a taxpayers association under Article 150, and the amount deducted.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 77 (Payment in installment)
A resident whose amount of tax payable pursuant to Article 65, 69 or 76 exceeds ten million won, respectively, may pay part of such tax payable in installment, within two months after the period of payment has expired, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 8 Report and Confirmation on Present Status of Place of Business
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Article 78 (Report on present status of place of business)
(1) Any business entity (including business entities who permanently or temporarily close his or her business during the relevant taxable period) shall file a report on the present status of the relevant place of business (hereinafter referred to as "report on the present status of a place of business") with the head of a tax office having jurisdiction over the place of business, by February 10 of the following year of the relevant taxable period, as prescribed by Presidential Decree; provided, a report on the present status of a place of business shall be deemed filed in any of the following cases: <Amended on Dec. 27, 2010; Jun. 7, 2013; Dec. 23, 2014>
1. Where Article 74 applies due to the death of a business entity or his or her departure from the Republic of Korea;
2. Where a business entity defined in subparagraph 3 of Article 2 of the Value-Added Tax Act files a return pursuant to Article 48, 49, 66, or 67 of the same Act; provided, where the business entity files a return on his or her income, etc. earned from a tax-free business while concurrently engaging in a taxable business and tax-free business, etc. under the Value-Added Tax Act, a report on the present status of a place of business for the tax-free business, etc. shall be deemed filed.
(2) Any business entity liable to file a report on the present status of place of business pursuant to paragraph (1) shall file a written report that includes the following matters:
1. Personal information of the business entity;
2. Details of the amount of income by type of business;
3. Deleted; <Dec. 31, 2018>;
4. Other matters prescribed by Presidential Decree.
(3) Notwithstanding paragraph (1), a business entity prescribed by Presidential Decree, such as a person who files a return on the amount of income by joining a taxpayers’ association, need not file a report on current status of place of business. <Added on, Dec. 31, 2018>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 79 (Investigation and confirmation on present status of place of business)
The head of a tax office or the commissioner of a regional tax office having jurisdiction over the seat of a place of business who has received a report on the present status of a place of business pursuant to Article 78 may investigate and confirm the present status of the place of business or order the submission of books, documents, articles, etc. pertaining thereto and other necessary matters, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 9 Determination, Rectification, Collection and Refund
Subsection 1 Determination and Rectification of Tax Base
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Article 80 (Determination and rectification)
(1) Where a resident liable to file a final return on the tax base under Articles 70, 70-2, 71, and 74 fails to file such final return, the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment shall determine the tax base and tax amount of the resident in the relevant taxable period. <Amended on Jan. 1, 2013>
(2) Where a person who files a final return on the tax base under Articles 70, 70-2, 71, and 74 (including any person who fails to file a final return on the tax base pursuant to Article 73 in cases falling under subparagraph 2 or 3) falls under any of the following cases, the head of the tax office having jurisdiction over the relevant place for tax payment or the commissioner of the relevant regional tax office shall correct the tax base and tax amount for the relevant taxable period: <Amended on Dec. 27, 2010;Jan. 1, 2013; Jan. 1, 2014; Dec. 15, 2015>
1. Where an omission or error exists on the return;
2. Where an omission or error exists in any detail of income tax withheld under Article 137, 137-2, 138, 143-4, 144-2, 145-3, or 146 and it is deemed impracticable to collect the tax from the withholding agent due to the permanent closure of business, unknown whereabouts, etc. of the withholding agent or the withholding agent is unable to collect withholding taxes due to resignation of the relevant wage and salary income earner;
3. Where a person who has submitted a return on income deductions and tax credits for wage and salary income under Article 140 has any global income deduction or tax credit by any fraudulent means specified by Presidential Decree, such as false receipts, and it is deemed difficult for the withholding agent to ascertain such fraudulent deduction;
4. Where a person fails to submit all or part of the aggregate table of invoices by purchaser and the aggregate table of invoices by seller pursuant to Article 163(5) or the statement of payment pursuant to Articles 164 and 164-2;
5. Any of the following cases where it is determined the details of a return are false considering the scale of the facilities and the current status of the business:
a. Where a business entity obliged to use an account for business pursuant to Article 160-5(1) fails to perform such obligation;
b. Where a business entity obliged to report an account for business pursuant to Article 160-5(3) fails to perform such obligation;
c. Where a business entity who meets the requirements to become a credit card member store under Article 162-2(1) fails to join the membership of a credit card member store under the Specialized Credit Financial Business Act without just grounds;
d. Where a credit card member store which has become a member of credit card member stores because it meets the membership requirements under Article 162-2(2) refuses transactions by credit card without just grounds, in violation of Article 162-2(2), or issues a credit card sales slip falsely;
e. Where a business entity who meets the requirements under Article 162-3(1) fails to register as a cash receipt merchant without just grounds;
f. Where a business entity who has registered as a cash receipt merchant pursuant to Article 162-3(1) fails to issue a cash receipt without just grounds, in violation of Article 162-3(3) or (4), or issues it falsely.
(3) Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment determines or corrects the tax base and tax amount of the relevant taxable period pursuant to paragraphs (1) and (2), he or she shall determine or correct them based on books of account and other evidentiary documents; provided, where he or she is unable to calculate the amount of income by books of account and other evidentiary documents, due to reasons prescribed by Presidential Decree, he or she may estimate, investigate, and determine the amount of income, as prescribed by Presidential Decree.
(4) Where any omission or error is found after the determination or rectification of the tax base and tax amount, the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment shall immediately correct such tax base and tax amount.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 81 (Penalty tax for non-submission or faulty preparation of detailed statement of reception of receipts)
(1) If a business entity (excluding a small-scale business entity as prescribed by Presidential Decree?or a person whose amount of income is estimated as prescribed by Presidential Decree) falls within either of the following cases, it shall pay 1/100 of the amount paid without the statement or the amount paid with incorrect statement, as a penalty tax, in addition to the final tax amount on global income for the relevant taxable period:
1. If the entity fails to submit the detailed statement of the reception of receipts by the deadline for filing a final return on the tax base of business income;
2. If the detailed statement of the reception of receipts submitted by the entity is recognized as unclear, as prescribed by Presidential Decree.
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Wholly Amended on Dec. 31, 2019]
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Article 81-2 (Penalty tax for non-submission of certificate of confirmation of compliant filing)
(1) If a business entity subject to confirmation of compliant filing fails to submit a certificate of confirmation of compliant filing to the head of the tax office with jurisdiction over the place for tax payment by June 30 of the year following the relevant taxable period under Article 70-2(2), it shall pay the greater of the following amounts as an penalty tax in addition to the final tax amount on global income for the relevant taxable period: <Amended on Dec. 8, 2021>
1. The amount calculated according to the following formula (if the proportion of its business income to its global income is greater than 1, it is equal to 1; if it is less than 0, it is equal to 0):
Penalty tax = A × B/C × 5/100 A: Amount of calculated tax on global income; B: Amount of business income; C: Amount of global income 2. The total amount of its gross earnings from business income for the relevant taxable period multiplied by 2/10000.
2. The total amount of its gross earnings from business income for the relevant taxable period multiplied by 2/10000.
(2) For the purpose of applying paragraph (1), if the amount of calculated tax on global income becomes greater than zero due to a rectification under Article 80, the penalty tax shall be calculated based on the amount of calculated tax on global income so corrected.
(3) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income. <Added on Dec. 8, 2021>
[This Article Added on Dec. 31, 2019]
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Article 81-3 (Penalty tax for non-submission or faulty preparation of report on present status of place of business)
(1) If a business entity (referring to only a business entity that supplies goods or services primarily to consumers other than a business entity, as prescribed by Presidential Decree) falls under either of the following cases, it shall pay 5/1000 of the amount of undeclared or under-declared income as a penalty tax, in addition to the final tax amount on global income for the relevant taxable period:
1. If the entity fails to submit a report on the present status of its place of business;
2. If the entity declares less than the amount required to be declared under Article 78(2) (or the amount of income from tax-exempt business, etc., if it is deemed to have filed a report on the present status of its place of business under paragraph (1)2 of the same Article).
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-4 (Penalty tax for failure to register or report on place of joint business)
(1) If a joint business entity falls under either of the following cases regarding the registration or report on its place of joint business, it shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period:
1. If the entity fails to make a business registration in accordance with Article 87(3), or a person who is not a joint business entity falsely registers as a joint business entity: 5/1000 of the total amount of income for each taxable period regarding the failed or false registration;
2. If the entity fails to report or falsely reports information required to be reported under Article 87(4) or (5), as prescribed by Presidential Decree: 1/1000 of the total amount of income for each taxable period regarding the failed or false report.
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-5 (Penalty tax for failure in record-keeping or incorrect entries)
If a business entity (excluding a small-scale business entity prescribed by Presidential Decree) fails to keep or record books in accordance with Article 160 or 161, or if the amount of income according to the books kept and recorded falls short of the amount required to be recorded, the amount calculated according to the following formula shall be paid as a penalty tax, in addition to the final tax amount on global income for the relevant taxable period. In such cases, if the ratio of the amount of income not recorded or the amount that falls short of the amount required to be recorded to its global income is greater than 1, it is equal to 1; if it is less than 0, it is equal to 0:
[This Article Added on Dec. 31, 2019]
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Article 81-6 (Penalty tax for non-receipt or faulty receipt of evidentiary documents)
(1) If a business entity (excluding a small-scale business entity prescribed by Presidential Decree or a person whose amount of income is estimated as prescribed by Presidential Decree) receives goods or services from another business entity (including a corporation) in connection with its business and fails to receive an evidentiary document as listed in any of the subparagraphs of Article 160-2(2) or receives a faulty evidentiary document, it shall pay 2/100 of the amount corresponding to the non-receipt or faulty receipt of an evidentiary document, which is allowed to be included in necessary expenses (meaning the difference between the amount to be received in each case), as a penalty tax, in addition to the final tax amount on global income for the relevant taxable period; provided, this shall not apply to the part to which the proviso, other than the subparagraphs of, Article 160-2(2) applies.
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-7 (Penalty tax for faulty issuance, preparation, or retention of donation receipt)
(1) If a a resident or nonresident who issues a donation receipt [including electronic donation receipt as defined in Article 75-4(2) of the Corporate Tax Act?(hereinafter referred to as "electronic donation receipt"); hereinafter collectively referred to as "donation receipt"] required to include the donation in necessary expenses or deductible expenses under?Article 34?of this Act or?Article 24 of the Corporate Tax Act?or to receive a tax credit for the donation under?Article 59-4?(4) falls under any of the following cases, it shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period: <Amended on Dec. 29, 2020>
1. If a donation receipt is issued with false information (including cases where important details such as the donation amount or the donor’s personal information are omitted; hereafter the same shall apply in this subparagraph):
a. If the donation receipt is issued with a false donation amount: 5/100 of the difference between the amount stated on the receipt (or, if not stated, the amount that the person who received the receipt included as a donation in necessary expenses or used for a donation tax credit) and the amount that should be issued in each case];
b. If the donation receipt is issued with false information other than that stated in item a above: 5/100 of the amount stated on the donation receipt;
2. If a detailed statement of issuance for each donor is not prepared or retained in accordance with Article 160-3(1): 2/1000 of the amount of the relevant amount.
(2) If a penalty tax is imposed due to failure to fulfill the duty to submit a report under Article 78(3) of the Inheritance Tax and Gift Tax Act, or failure to fulfill the duty to prepare and keep books and records for property under paragraph (5)2 of the same Article, the penalty tax specified in paragraph 1(2) shall not apply.
(3) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-8 (Penalty tax for faulty report and use of business account)
(1) If a business entity falls under either of the following cases, it shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period:
1. If the entity that falls under any subparagraph of Article 160-5(1) fails to use a business account: 2/1000 of the amount corresponding to such failure;
2. If the entity fails to report a business account in accordance with Article 160-5(3) (excluding cases where it fails to report based on the place of business and uses a business account from another place of business that has already been reported): The greater of the following amounts:
a. The amount calculated as follows:
Penalty tax = A × B/C × 2/1000 A: Amount of income?for the relevant taxable period; B: Non-reporting period (referring to the the non-reporting period for the relevant taxable period, which means the number of days from the day after the reporting due date to the day before the reporting date, and if the non-reporting period spans multiple taxable periods, it applies to each taxable period); C: 365 (366 in a leap year)
b. 2/1000 of the sum of the transactions specified in the subparagraphs of Article 160-5(1).
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-9 (Penalty tax for faulty issuance of credit card and cash receipt)
(1) If a credit card member store under Article 162-2(2) refuses a transaction by credit card or issues a false credit card sales slip and receives a notification thereof from the head of the tax office having jurisdiction over the place for tax payment in accordance with the latter part of paragraph (4) of the same Article, it shall pay 5/100 (or 5,000 won if the amount calculated for each case is less than 5,000 won) of the amount of the refusal or the amount of the false issuance of the credit card sales slip for each case so notified (referring to the difference between the amount of the false issuance for each case) as a penalty tax, in addition to the final tax amount on global income for the relevant taxable period.
(2) If a business entity falls under any of the following cases, it shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period:
1. If the entity fails to register as a cash receipt merchant?in violation of Article 162-3(1) or registers after the registration deadline: An amount calculated according to the following formula:
Penalty tax = A × B/C × 1/100 A: Amount of income?for the relevant taxable period (solely pertaining to the income derived from industries eligible for registration as cash receipt merchants, and excluding income amounts prescribed by Presidential Decree, such as those recorded in invoices as defined in Article 163 and tax invoices issued under Article 32 of the Value-Added Tax Act; B: Non-registering period (which means the number of days from the day after the registration deadline to the day before the registration date, and if the non-registering period spans multiple taxable periods, it applies to each taxable period); C: 365 (366 in a leap year)
2. If the entity refuses to issue a cash receipt or issues a false cash receipt in violation of Article 162-3(3) and receives a notification of the amount to be declared from the head of the tax office having jurisdiction over the place for tax payment in accordance with the latter part of paragraph (6) of the same Article (only applicable if the amount to be issued is at least 5,000 won per case, except for cases falling under subparagraph 3): 5/100 (or 5,000 won if the amount calculated for each case is less than 5,000 won) of the amount of the refusal for each case or the amount of the false issuance for each case so notified (referring to the difference between the amount of the false issuance for each case);
3. If the entity fails to issue a cash receipt in violation of Article 162-3(4) (except for cases prescribed by Presidential Decree, such as insurance benefits under the National Health Insurance Act): 20/100 of the amount of non-issuance (or 10/100 if the error or omission is voluntarily reported to the competent tax office or a cash receipt is voluntarily issued within ten days of receiving the transaction price).
(3) The penalty tax mentioned in paragraphs (1) and (2) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-10 (Penalty tax for faulty submission of invoice)
(1) If a business entity (excluding small business entities as prescribed by Presidential Decree) falls under any of the following cases, it shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period:
1. If an invoice issued under Article 163(1) or (2) (including an electronic invoice as defined in the latter part of paragraph (1) of the same Article, hereafter the same shall apply in this Article) does not contain all or part of the information prescribed by Presidential Decree, or contains any incorrect information (except for those subject to subparagraph 2): 1/100 of the supply price;
2. If the submission of an aggregate table of invoices by purchaser and an aggregate table of invoices by seller as defined in Article 163(5) (hereafter referred to as "aggregate table of invoices" in this subparagraph) pertains to either of the following cases (excluding the sale prices or purchase prices for any portion covered by subparagraph 4): An amount as described in the following classifications:
a. If the entity fails to submit an aggregate table of invoices in accordance with Article 163(5): 5/1000 of the supply price (or 3/1000 if submitted within one month after the due date);
b. If the aggregate table of invoices does not contain all or part of the information prescribed by Presidential Decree, or contains any incorrect information (excluding the sale prices or purchase prices for any transaction confirmed as prescribed by Presidential Decree, where errors in the aggregate table of invoices resulted from inadvertence): 5/1000 of the supply price;
3. If the submission of a sum table of tax invoices by seller as defined in Article 54 of the Value-Added Tax Act (herineafter referred to as "sum table of tax invoices by seller") pertains to either of the following cases (excluding the purchase prices for any portion covered by subparagraph 4): An amount as described in the following classifications:
a. If the entity fails to submit a sum table of tax invoices by seller in accordance with Article 163-2(1): 5/1000 of the supply price (or 3/1000 if submitted within one month after the due date);
b. If the sum table of tax invoices by seller submitted by the entity does not contain all or part of the information required to be stated, or contains any incorrect information (excluding the purchase prices for any transaction confirmed as prescribed by Presidential Decree, where errors in the sum table of tax invoices by seller resulted from inadvertence): 5/1000 of the supply price;
4. If the entity falls under any of the following cases: 2/100 of the supply price (or 1/100 if, for the purpose of applying item a above, the entity required to issue an electronic invoice under Article 163(1) issues an invoice other than an electronic invoice, or if the entity issues an invoice under paragraph (1) or (2) of the same Article after the time for issuing an invoice under paragraph (7) of the same Article has passed and before January 25 of the year following the taxable period to which the supply of the relevant goods or services belongs):
a. It fails to issue an invoice under Article 163(1) or (2) at the specififed timing in paragraph (7) of the same Article;
b. It issues an invoice under Article 163(1) or (2), a credit card sales slip under Article 160-2(2)3, or a cash receipt under subparagraph 4 of the same paragraph (hereafter referred to as "invoice, etc." in this subparagraph) without supplying goods or services;
c. It receives an invoice, etc. without supplying goods or services;
d. It supplies goods or services and issues an invoice, etc. in the name of a person other than the actual supplier;
e. It receives goods or services with an invoice, etc., issued in the name of a person other than the actual supplier.
5. If the entity transmits a detailed statement of issuance of electronic invoices to the Commissioner of National Tax Service by the 25th day of the month following the end of the taxable period to which the supply of goods or services belongs after the deadline mentioned in Article 163(8) (except for the portion covered by subparagraph 4): 3/1000 of the supply price (or 1/1000, respectively, for the supply of goods or services by a business entity under Article 163(1)1 before December 31, 2016, and for the supply of goods or services by a business entity under subparagraph 2 of the same paragraph before December 31, 2018);
6. If the entity fails to transmit a detailed statement of issuance of electronic invoices to the Commissioner of National Tax Service by the 25th day of the month following the end of the taxable period to which the supply of goods or services belongs after the deadline mentioned in Article 163(8) (except for the portion covered by subparagraph 4): 5/1000 of the supply price (or 3/1000, respectively, for the supply of goods or services by a business entity under Article 163(1)1 before December 31, 2016, and for the supply of goods or services by a business entity under subparagraph 2 of the same paragraph before December 31, 2018).
(2) If a person who is not a business entity issues an invoice without supplying goods or services, or receives an invoice without being supplied with goods or services, the person who issues or receives the invoice shall be deemed a business entity, and the head of the district tax office having jurisdiction over the place of tax payment shall collect, as an additional tax, an amount equivalent to two percent of the supply value stated in the invoice from the person who issues or receives the invoice. In such cases, the calculated tax on global income under Article 15 on the business income of the person who issues or receives the invoice shall be deemed zero. <Amended on Dec. 23, 2025>
(3) The penalty tax mentioned in paragraphs (1) and (2) shall be applied even when there is no calculated tax on global income.
(4) The penalty tax mentioned in paragraphs (1) and (2) shall not apply to the portion subject to penalty tax in the following cases:
1. If the penalty tax mentioned in paragraph (1) is not applicable: The portion subject to penalty tax under Article 81-6 of this Act or Article 60(2), (3), (5), or (6) of the Value-Added Tax Act;
2. If the penalty tax mentioned in paragraph (2) is not applicable: The portion subject to penalty tax under Article 60(4) of the Value-Added Tax Act.
[This Article Added on Dec. 31, 2019]
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Article 81-11 (Penalty tax for non-submission or faulty submission of payment statement)
(1) If a person required to submit a statement of payment under Article 164 or 164-2 of this Act or Article 120 or 120-2 of the Corporate Tax Act (hereafter referred to as "payment statement" in this Article) meets any of the following criteria, the person shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period; provided, this shall not apply to the portion subject to penalty tax under Article 90-2 of the Act on Restriction on Special Cases concerning Taxation: <Amended on Dec. 29, 2020; Mar. 16, 2021; Dec. 31, 2022>
1. If the person fails to submit a payment statement or a simplified payment statement (hereafter referred to as "payment statement, etc." in this Article) by the deadline: An amount as described in the following classifications:
a. In the case of a payment statement: 1/100 (or 5/1000 of the amount of payment, if the submitted within three months after the deadline for submission has passed) of the the amount of payment for which no payment statement is submitted; provided, in the case of a payment statement for wage and salary income of a daily employed worker (hereafter referred to as "daily labor income" in this Article) in the proviso, with the exception of the subparagraphs, of Article 164(1), it shall be 25/10000 of the amount of payment for which no payment statement is submitted (125/100000 of the amount of payment if submitted within one month after the deadline for submission has passed);
b. In the case of a simplified payment statement: 25/10000 of the amount of payment for which no payment statement is submitted (125/100000 of the amount of payment if submitted within one month after the deadline for submission has passed);
2. If the payment statement, etc. submitted is unclear as prescribed by Presidential Decree, or the amount of payment stated on the payment statement, etc. submitted is inaccurate: An amount as described in the following classifications:
a. In the case of a payment statement: 1/100 of the amount of payment which is unclear or inaccurate; provided, in the case of a payment statement for daily labor income, it shall be 25/10000 of amount of payment which is unclear or inaccurate;
b. In the case of a simplified payment statement: 25/10000 of the amount of payment which is unclear or inaccurate.
(2) Notwithstanding paragraph (1)1, if a withholding agent, who makes semi-annual payments of withholding tax under Article 128(2), pays daily labor income or any income described in Article 164-3(1)2 during the period from July 1, 2021 to June 30, 2022 falls under any of the following cases, penalty tax under paragraph (1)1 shall not be imposed: <Added on Mar. 16, 2021>
1. If the agent submits a payment statement for daily labor income by the end of the month following the last month of the quarter to which the date of payment of the income (or, in the case of income subject to Article 135, the last day of the taxable period for the income) belongs (or, in the case of the agent’s suspension, closure, or dissolution of its business, by the end of the month following the last month of the quarter in which the date of suspension, closure, or dissolution occurs);
2. If the agent submits a simplified payment statement for income described in Article 164-3(1)2 by the end of the month following the last month of the half-year term to which the date of payment of the income (or, in the case of income subject to Article 144-5, the last day of the taxable period for the income) belongs (or, in the case of the agent’s suspension, closure, or dissolution of its business, by the end of the month following the last month of the half-year term in which the date of suspension, closure, or dissolution occurs).
(3) Notwithstanding paragraph (1)1b, a penalty tax under paragraph (1)1b shall not be imposed in either of the following cases: <Added on Dec. 31, 2022; Dec. 31, 2023; Dec. 23, 2025>
1. If a withholding agent pays income described in Article 164-3(1)1 during the period from January 1, 2027 to December 31, 2027 (or December 31, 2028 in the case of a withholding agent who pays withholding taxes on a half-year basis under Article 128(2)) and submits a simplified payment statement for the income by the end of the month following the last month of the half-year period to which the date of payment of the income (or, in the case of income subject to Article 135, the last day of the taxable period for the income) belongs (or, in the case of the agent's suspension, closure, or dissolution of its business, by the end of the month following the last month of the half-year term in which the date of suspension, closure, or dissolution occurs);
2. If a withholding agent pays income described in Article 164-3(1)3 during the period from January 1, 2024 to December 31, 2024 and submits a payment statement for the income by the end of February in the year following the taxable year to which the date of payment of the income belongs (or, in the case of the agent’s suspension, closure, or dissolution of its business, by the last day of the second month following the month in which the suspension, closure, or dissolution occurs).
(4) Notwithstanding paragraph (1)2, if a payment statement, etc. submitted for daily labor income or any income described in the subparagraphs of Article 164-3(1) falls under the provisions, with the exception of the items, of paragraph (1)2, and the proportion of the amount of payment subject to the provisions, with the exception of the items, of paragraph (1)2, in the total amount of each payment listed in the payment statement, etc. is less than or equal to the proportion prescribed by Presidential Decree, the penalty tax mentioned in paragraph (1)2 shall not be imposed. <Added on Mar. 16, 2021; Dec. 31, 2022>
(5) For the purpose of applying paragraph (1), a person obligated to submit a payment statement, etc. for income described in Article 164-3(1)2 (excluding business income prescribed by Presidential Decree in accordance with Article 73(1)4) or 164-3(1)3 shall not be subject to the penalty tax mentioned in paragraph (1)1b for the portion subject to the penalty tax mentioned in paragraph (1)1a, and shall not be subject to the penalty tax mentioned in paragraph (1)2b for the portion subject to the penalty tax mentioned in paragraph (1)2a. <Added on Dec. 31, 2022>
(6) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income. <Amended on Mar. 16, 2021; Dec. 31, 2022>
[This Article Added on Dec. 31, 2019]
[Title Amended on Mar. 16, 2021]
[Enforcement Date: Jan. 1, 2027]
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Article 81-12 (Penalty tax for non-registration of house rental business entity)
(1) If a business entity with house rental income fails to apply for business registration under Article 168(1) or (3) by the deadline set forth in the main clause of Article 8(1) of the Value-Added Tax Act, it shall pay a penalty tax of 2/1000 of the amount of house rental income from the date of commencement of business to the day immediately preceding the date of application for registration, in addition to the final tax amount on global income for the relevant taxable period.
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-13 (Penalty tax for faulty submission of calculation statement of reserved Income of specific foreign corporation)
(1) If a resident obligated to submit a calculation statement of reserved income of a specific foreign corporation under subparagraph 3 of?Article 34 of the Adjustment of International Taxes Act?(hereafter referred to as "calculation statement" in this paragraph) in accordance with said Article falls under either of the following cases, the resident shall pay a penalty tax of 5/1000 of the reserved income that the specific foreign corporation may distribute as dividends, in addition to the final tax amount on global income for the relevant taxable period: <Amended on Dec. 29, 2020>
1. If the resident fails to submit the calculation statement by the deadline;
2. If the calculation statement submitted is unclear, as prescribed by Presidential Decree, with partial or complete omissions.
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 31, 2019]
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Article 81-14 (Penalty tax for faulty submission of statement of expenses related to business-use passenger vehicle)
(1) If a a person subject to double-entry bookkeeping who has included expenses related to business-use passenger vehicles, etc. in necessary expenses in accordance with Article 33-2(1) through (3) fails to submit a statement of expenses related to business-use passenger vehicles, etc. (hereafter referred to as "statement" in this paragraph), or submits an inaccurate statement, the person shall pay a penalty tax as described in the following classifications, in addition to the final tax amount on global income for the relevant taxable period:
1. If the person fails to submit a statement: 1/100 of the amount included in necessary expenses by the person subject to double-entry bookkeeping, as expenses related to business-use passenger vehicles, etc. when filing a report under Article 70 or Article 70-2;
2. If the person submits an inaccurate statement: 1/100 of the amount inaccurately indicated on the statement by the person subject to double-entry bookkeeping, of the amount included in necessary expenses, as expenses related business-use passenger vehicles, etc. when filing a report under Article 70 or Article 70-2.
(2) The penalty tax mentioned in paragraph (1) shall be applied even when there is no calculated tax on global income.
[This Article Added on Dec. 8, 2021]
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Article 82 (Determination of occasional imposition)
(1) If a resident falls under any of the following cases during the taxable period, the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment may impose income tax on the resident occasionally (hereinafter referred to as "occasional imposition"):
1. Where it is deemed that he or she may evade income tax because he or she is in a state of suspension or discontinuance of business for a long time, due to business depression or other circumstances;
2. Where there are reasonable grounds to believe he or she may evade tax.
(2) Paragraph (1) shall apply considering the period from the commencement of business to the date on which any reason under the subparagraphs of paragraph (1) arises in the relevant taxable period as the period of occasional imposition. In such cases, where any reason under subparagraphs of paragraph (1) arises before the deadline for a final return pursuant to Article 70 or 70-2, and a taxpayer fails to file a final return on the tax base on the preceding taxable period, the preceding taxable period shall be included in the period of occasional imposition. <Amended on Jan. 1, 2013>
(3) Where the head of the competent tax office or the commissioner of the competent regional tax office imposes income tax occasionally under paragraphs (1) and (2), Articles 47-2 and 47-3 of the Framework Act on National Taxes shall not apply to the relevant tax and the amount of income.
(4) The head of the competent tax office or the commissioner of the competent regional tax office may impose the income tax occasionally on a person liable to taxation in the region whose domicile, place of residence or place of business are deemed to change frequently, by applying paragraphs (1) and (2) mutatis mutandis, as prescribed by Presidential Decree.
(5) Procedures for occasional imposition and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 83 (Notification of tax base and amount of tax)
Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment determines or reassesses the tax base and the amount of tax for a resident pursuant to Article 80, he or she shall notify the relevant resident or his or her inheritor of such details in writing, as prescribed by Presidential Decree; provided, he or she has determined or reassessed the tax base and tax amount pursuant to Article 42, he or she shall promptly notify such determination or reassessment.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 84 (Threshold of taxation on other income)
In any of the following cases, no income tax shall be levied on other income: <Amended on Dec. 23, 2014; Dec. 15, 2015; Dec. 29, 2020; Dec. 31, 2022>
1. In any of the following cases where the refund under Article 21(1)4 is for the sum of the amounts printed on the face of horse racing tickets, winner wager tickets, bullfighting match wager tickets, or sports promotion wager tickets in each case does not exceed 100,000 won:
a. Where the refund for each winning wager ticket does not exceed 100,000 won;
b. Where the refund for the amount of each wager unit does not exceed 100 times the amount of each wager unit, and the refund for each winning wager ticket does not exceed two million won;
2. Where the lottery prize under Article 14(3)8d (if the prize money is paid in installments in accordance with the lottery tickets and lottery fund-related statutes or regulations, the sum of the amounts paid in installments) or the prizes, etc. under Article 21(1)14 do not exceed two million won in each case;
3. Where the amount of virtual asset income in the relevant taxable period does not exceed 2.5 million won;
4. Where the amount of other income does not exceed 50,000 won per case (excluding the amount of other income under Article 21(1)21).
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 2 Collection and Refund of Tax
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Article 85 (Collection and refunds)
(1) If a resident falls under any of the following cases, the head of a tax office having jurisdiction over the place for tax payment shall collect income tax for the amount unpaid pursuant to the National Tax Collection Act: <Amended on Jan. 1, 2013>
1. Where a person liable to file a return and pay interim tax prepayment pursuant to Article 65(6) fails to pay all or part of such tax amount;
2. Where any person fails to pay all or part of income tax for the relevant taxable period pursuant to Article 76.
(2) If the amount of income tax of a resident in the relevant taxable period collected or paid pursuant to paragraph (1) or Article 76 is less than the amount of income tax determined or reassessed by the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment pursuant to Article 80, the head of a tax office having jurisdiction over the place for tax payment shall collect such shortfall. The same shall also apply to the interim tax prepayment pursuant to Article 65.
(3) Where a withholding agent fails to pay the tax withheld or is to be withheld by the deadline therefor, or underpays such tax, the head of a tax office having jurisdiction over the place for tax payment shall collect the tax due plus penalty tax pursuant to Article 47-5(1) of the Framework Act on National Taxes from a withholding agent; provided, where a withholding agent fails to deduct withholding taxes in any of the following cases, the head of a tax office having jurisdiction over the place for tax payment shall collect only penalty tax under Article 47-5(1) of the Framework Act on National Taxes: <Amended on Jan. 1, 2012;Jan. 1, 2013>
1. If the amount of income subject to withholding tax which has not been deducted is already included in the amount of tax base declared and paid by a taxpayer;
2. Where the head of the competent tax office of a taxpayer levies income tax directly on the amount of income subject to withholding which has not been deducted at source on the taxpayer and collects the same from him or her pursuant to Articles 80 and 114.
(4) Where the amount of interim tax prepayment, payment by preliminary return on profit margin from the sale and purchase of land, etc., occasional imposition, and withholding taxation pursuant to Articles 65, 69, 82, 127 and 150 exceeds the total amount of calculated tax on global income and the total amount of calculated tax on retirement income under subparagraph 3 of Article 15 respectively, the head of a tax office having jurisdiction over the place for tax payment shall refund such excess or appropriate it for other national taxes and compulsory collecction fees. <Amended on Dec. 29, 2020>
(5) Where a taxpayers association fails to collect and pay the income tax for its members each month by the deadline therefor, or underpays such income tax, the head of a tax office having jurisdiction over the taxpayers association shall collect the tax due plus surtax pursuant to Article 47-5(1) of the Framework Act on National Taxes from the taxpayers association. <Added on Jan. 1, 2012>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 85-2 (Refund from loss carryback of small or medium enterprise)
(1) Where a loss carried forward (excluding a loss carried forward which occurs in real estate leasing business; hereafter the same shall apply in this Article) in the relevant taxable period, as prescribed in Article 45(3), occurs when a resident who operates a small or medium enterprise under Article 6(1) of the Act on Restriction on Special Cases concerning Taxation calculates the amount of business income, he or she may claim a refund of the amount calculated, as prescribed by Presidential Decree (hereinafter referred to as "amount of loss carryback") within the limit of the final tax amount on global income levied on business income for such small or medium enterprise in the preceding taxable period. In such cases, when a loss is carried back in relation to loss carried forward pursuant to Article 45(3), such loss carried forward shall be deemed deducted. <Amended on Dec. 31, 2019; Dec. 29, 2020>
(2) Any person who intends to claim a loss carryback refund shall file an application to the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree, by the deadline for a final return on tax base pursuant to Article 70, 70-2 or 74. <Amended on Jan. 1, 2013>
(3) Where the head of a tax office having jurisdiction over the place for tax payment receives an application for refund of income tax pursuant to paragraph (2), he or she shall promptly determine the tax amount to be refunded and refund it pursuant to Articles 51 and 52 of the Framework Act on National Taxes.
(4) Paragraphs (1) through (3) shall apply only where the relevant resident files a return on the tax base and tax amount on the income for the taxable period in which a loss carried forward occurs and for the preceding taxable period respectively by the deadline for a final return on tax base pursuant to Article 70, 70-2 or 74. <Amended on Jan. 1, 2013>
(5) Where a person who has been refunded the income tax pursuant to paragraph (3) falls under any of the following, the head of the tax office having jurisdiction over the place for tax payment shall collect the amount of such refunding tax (in cases falling under subparagraphs 1 and 2, referring to the amount equivalent to the tax amount excessively refunded) and the interest thereon as income tax for the taxable period in which such loss carried forward occurred, as prescribed by Presidential Decree: <Amended on Jan. 1, 2012;Jan. 1, 2013; Dec. 31, 2019>
1. Where the amount of loss carried forward is reduced after rectifying the tax base and amount of an income tax for the tax period in which the amount of loss occurred;
2. Where the refunded tax amount is decreased by rectifying the tax base of global income and the tax amount for the taxable period immediately preceding the taxable period in which the amount of loss occurs;
3. Where a person has been refunded without satisfying the requirements for the small and medium enterprise under paragraph (1).
(6) Calculation of the amount of tax to be refunded by the retroactive deduction of a loss, procedures for application therefor and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 86 (Non-collection of small sum)
No income tax shall be collected in any of the following cases: <Amended on Jan. 1, 2012; Jan. 1, 2014; Dec. 8, 2021; Dec. 31, 2023>
1. Where the amount of withholding tax on income under the subparagraphs of Article 127(1) (excluding interest income under subparagraph 1 of that paragraph and business income prescribed by Presidential Decree among business income subject to withholding tax under subparagraph 3 of that paragraph) is less than 1,000 won;
2. Where the amount of tax collected by a taxpayers association pursuant to Article 150 is less than 1,000 won;
3. Deleted; <Jan. 1, 2013>
4. Where the amount of interim tax prepayment under Article 65 is less than 500,000 won.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
SECTION 10 Special Cases concerning Places of Joint Business
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Article 87 (Special cases concerning places of joint business)
(1) The amount of tax withheld from income generated at a place of joint business shall be distributed in accordance with the profit-and-loss distribution ratio of the respective joint business entities.
(2) The amount of tax related to a place of joint business as penalty tax amount pursuant to Article 81, 81-3, 81-4, 81-6, or 81-8 through 81-11 of this Act and Article 47-5 of the Framework Act on National Taxes shall be distributed according to the profit-and-loss distribution ratio of the respective joint business entities. <Amended on Dec. 27, 2010; Jan. 1, 2012; Dec. 31, 2019>
(3) Articles 160(1) and 168 shall apply to a place of joint business considering such place of joint business as one business entity.
(4) When joint business entities make business registration in relation to their place of joint business pursuant to Article 168(1) and (2) on their place of joint business, they shall file a report with the head of a tax office having jurisdiction over the seat of a place of joint business on the joint business entities (including matters concerning whether they are investment joint business entities), the agreed profit-and-loss distribution ratio, the representative joint business entity, details of shares and investment, and other necessary matters, as prescribed by Presidential Decree.
(5) Where any change is made to the details reported pursuant to paragraph (4), the representative joint business entity shall report the details of such change to the head of a tax office having jurisdiction over the seat of the relevant place of business, as prescribed by Presidential Decree.
(6) Matters necessary for a return, determination, reassessment or investigation, etc. on the amount of income for a place of joint business shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
CHAPTER II-2 (Articles 87-2 through 87-7) Deleted.
SECTION 1 Deleted
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Article 87-2 Deleted. <Dec. 31, 2024>
SECTION 2 Non-Taxation and Reduction and Exemption of Capital Gains
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Article 87-3 Deleted. <Dec. 31, 2024>
SECTION 3 Computation of Tax Base and Tax of Capital Gains
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Article 87-4 Deleted. <Dec. 31, 2024>
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Article 87-5 Deleted. <Dec. 31, 2024>
SECTION 4 Deleted.
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Article 87-6 Deleted. <Dec. 31, 2024>
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Article 87-7 Deleted. <Dec. 31, 2024>
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Article 87-8 Deleted. <Dec. 31, 2024>
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Article 87-9 Deleted. <Dec. 31, 2024>
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Article 87-10 Deleted. <Dec. 31, 2024>
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Article 87-11 Deleted. <Dec. 31, 2024>
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Article 87-12 Deleted. <Dec. 31, 2024>
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Article 87-13 Deleted. <Dec. 31, 2024>
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Article 87-14 Deleted. <Dec. 31, 2024>
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Article 87-15 Deleted. <Dec. 31, 2024>
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Article 87-16 Deleted. <Dec. 31, 2024>
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Article 87-17 Deleted. <Dec. 31, 2024>
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Article 87-18 Deleted. <Dec. 31, 2024>
SECTION 5 Deleted.
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Article 87-19 Deleted. <Dec. 31, 2024>
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Article 87-20 Deleted. <Dec. 31, 2024>
SECTION 6 Deleted.
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Article 87-21 Deleted. <Dec. 31, 2024>
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Article 87-22 Deleted. <Dec. 31, 2024>
SECTION 7 Deleted.
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Article 87-23 Deleted. <Dec. 31, 2024>
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Article 87-24 Deleted. <Dec. 31, 2024>
SECTION 8 Deleted
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Article 87-25 Deleted. <Dec. 31, 2024>
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Article 87-26 Deleted. <Dec. 31, 2024>
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Article 87-27 Deleted. <Dec. 31, 2024>
CHAPTER III RESIDENT'S TAX LIABILITIES FOR CAPITAL GAINS
SECTION 1 Definition of Transfer
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Article 88 (Definitions)
The terms used in this Chapter shall be defined as follows: <Amended on, Dec. 31, 2018; Jun. 9, 2020; Aug. 18, 2020; Dec. 29, 2020; Dec. 8, 2021; Dec. 31, 2023; Dec. 31, 2024>
1. The term "transfer" means to convey an asset to another person in return for valuable consideration, through sale, exchange, investment in kind to a corporation, etc., regardless whether the asset is registered or recorded in official records. In such cases, the amount of debt incurred by the donee in the event of a gift of encumbered property prescribed by Presidential Decree shall be deemed transferred, but none of the following cases shall be deemed transferred:
a. Where the category of land or the lot number is changed due to replotting or a parcel of land is reserved as a reserved land area under the Urban Development Act or any other Act;
b. 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 order to change the boundaries of land;
c. Where a trust is established on the assets of the trustor, and the ownership of the trust property is transferred to the trustee through a fiduciary relationship between the trustor and the trustee, in which case the trustor can be considered to have actual control and possession of the trust property, including the ability to terminate the trust or change the beneficiary;
2. The term "stocks, etc." means stocks or equity interests, including preemptive rights to new stocks and securities depository receipts prescribed by Presidential Decree;
3. The term "listed corporation" means a listed corporation defined in Article 9(15)3 of the Financial Investment Services and Capital Markets Act;
4. The term "unlisted corporation" means any corporation other than listed corporations defined in subparagraph 3;
5. The term "actual trading price" means the price at which a transfer and a transferee trade an asset at the time of the transfer or acquisition of the asset, which constitutes an amount of money and the value of other conveyed assets as the price for the transferred or acquired asset;
6. The term "one household" means a family unit composed of a resident, his or her spouse(including the person who legally divorced the resident but has relationship with that resident in which they can not be deemed actually divorced, such as sharing livelihood; hereinafter the same shall apply in this subparagraph), the persons who make a living together at the same domicile or place of residence with them (referring to lineal ascendants and descendants (including their spouses) and siblings of a resident and of his or her spouse, including the persons who moved temporarily out from the original domicile or place of residence due to schooling, medical care of a disease, or circumstances of work or business); provided, a family unit without a spouse shall be deemed one household in the cases specified by Presidential Decree;
7. The term "house" means a building used for de facto residential purposes, which has a structure prescribed by presidential decree, in which the household members can live an independent residential life regardless of whether permission is granted or how its purpose is classified in the public register. In such cases, if the purpose of use is unclear, it shall be according to the purpose of use stated in the official records;
8. The term "farmland" means land actually used for farming as paddies, fields, or orchards, irrespective of the category of land in the official cadastral register. In such cases, land used for farmer's huts, compost depots, pumping stations, water reservoirs, farm roads, irrigation ditches, etc. directly required for managing farmland shall be included;
9. The term "right to acquire a house as an association member" means the status of being selected as an occupant as a result of the authorization of a management and disposal plan under Article 74 of the Act on the Improvement of Urban Areas and Residential Environments or the authorization of a project implementation plan under Article 29 of the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement. In such casse, it is limited to those acquired as a member (including those acquired from such a member) of a improvement project association that implements a reconstruction or redevelopment project under the Act on the Improvement of Urban Areas and Residential Environments, an autonomous housing improvement project, a housing improvement project in a city block, a small-scale reconstruction project, or a small-scale redevelopment project as defined in the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement (in the case of a resident’s consensus body organized under Article 22 of the same Act, it refers to the owner of land or other property as defined in subparagraph 6 of Article 2 of the same Act), and includes the land attached thereto;
10. The term "right to buy a house" means the status of being selected as a person to be supplied with housing through a housing supply contract in accordance with the Housing Act or other Acts prescribed by Presidential Decree (including the acquisition of such status by means of sale, donation, etc.).
[This Article Wholly Amended on Dec. 20, 2016]
SECTION 2 Non-Taxation and Reduction and Exemption of Capital Gains
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Article 89 (Non-taxable capital gains)
(1) No tax on capital gains (hereinafter referred to as "capital gains tax") shall be levied on the following incomes: <Amended on Jan. 1, 2014; Dec. 20, 2016; Dec. 31, 2018; Aug. 18, 2020; Dec. 8, 2021>
1. Income generated from disposition by an adjudication of bankruptcy;
2. Income generated from exchange, division, and annexation of farmland in any of the cases prescribed by Presidential Decree;
3. Income generated from a transfer of any of the following houses (excluding high-priced houses with an aggregate actual transaction value exceeding 1.2 billion won at the time of transfer of the house and land appurtenant thereto) and land appurtenant thereto (hereafter referred to as "land appurtenant to a house" in this Article) with an area not larger than the area calculated by multiplying the area of the land on which a building is built by the multiple prescribed by Presidential Decree for each region:
a. The house that meets the criteria prescribed by Presidential Decree, where one household owns one residential house;
b. Houses specified by Presidential Decree, where a household acquires another house before it transfers one house, or owns at least two houses due to inheritance, cohabitation of parents for supporting, marriage, or other similar cause;
4. Income generated from a transfer of the right to acquire a house as an association member, where one household that owns a right to acquire a house as an association member) [referring to a household that owns an existing house that falls under subparagraph 3a as at the date of approval of the management and disposal plan under Article 74 and the date of approval of the project implementation plan under Article 29 of the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement (or the date of removal of the existing house, if the existing house is removed before such dates of approval)] meets any of the following requirements and transfers the right; provided, capital gains tax shall be levied, where an aggregate actual transaction value of the right to acquire a house as an association member exceeds 1.2 billion won:
a. Where the household does not own any other house or right to buy a house as at the date of transfer;
b. Where the household holds one house in addition to a right to acquire a house as an association member (limited to cases where it does not hold a right to buy a house) as at the date of transfer and transfers the right to acquire a house as an association member within three years from the date of acquisition of the house (including where the household is unable to transfer the house within three years due to any of the causes specified by Presidential Decree).
5. The liquidation money paid pursuant to Article 20 of the Special Act on Cadastral Resurvey due to the decrease of an area on official cadastral records as a result of the determination of a boundary under Article 18 of that Act.
(2) Notwithstanding paragraph (1), paragraph (1)3 shall not apply where one household transfers a house (including land appurtenant thereto; hereafter the same shall apply in this Article) and a right to acquire a house as an association member or a right to buy a house owned by the household; provided, the foregoing shall not apply where a household acquires a house for dwelling during the implementation period of a reconstruction project or a redevelopment project as defined in the Act on the Improvement of Urban Areas and Residential Environments or an autonomous housing improvement project, a housing improvement project in a city block, a small-scale reconstruction project, or a small-scale redevelopment project as defined in the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement, or where any of the inevitable circumstances specified by Presidential Decree exists. <Amended on Dec. 20, 2016; Feb. 8, 2017; Aug. 18, 2020; Dec. 8, 2021>
(3) The calculation of the actual transaction value and other necessary matters shall be prescribed by Presidential Decree. <Added on Dec. 8, 2021>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 90 (Reduction and exemption of capital gains tax)
(1) If the capital gains under Article 95 include an amount of capital gains eligible for tax exemption or reduction under this Act or any other tax-related Act, the calculated amount of capital gains tax shall be reduced by the amount of the reducible capital gains tax as computed by the following formula: <Amended on Dec. 20, 2016>
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│ Amount of reduction or exemption of capital gains tax = A × (B - C) × E │
│ / Transfer value │
│ D │
│ │
│ A: The calculated tax on capital gains under Article 104 │
│ B: Amount of capital gains eligible for reduction or exemption │
│ C: Basic deduction for capital gains under Article 103(2) │
│ D: Tax base for capital gains under Article 92 │
│ E: The reduction or exemption rate prescribed by this Act or other tax-related Acts │
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(2) Notwithstanding paragraph (1), where the reduction or exemption of capital gains tax is prescribed by the Act on Restriction on Special cases Concerning Taxation in the method of deducting the capital gains subject to reduction or exemption from the capital gains, the capital gains tax shall be reduced or exempted in the method of calculating the tax base of capital gains after deducting the capital gains subject to reduction or exemption from the capital gains under Article 95. <Added on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 91 (Exclusion of non-taxation, reduction or exemption of capital gains tax)
(1) The provisions concerning the non-taxation of income tax on any capital gains under this Act or other Acts shall not apply to assets transferred without registration under Article 104(3).
(2) Where a party to a contract selling or purchasing assets defined in Article 94(1)1 and 2 enters transaction prices incorrectly in a contract of sale, the amount under each of the following classifications shall be subtracted from the amount of non-taxable assets or the amount for which tax has been or to be reduced or exempted, when applying the provisions concerning non-taxation, reduction or exemption of capital gains tax on the relevant assets under this Act or other Acts:
1. Where applying provisions concerning non-taxation of capital gains tax amount under this Act or other Acts: The smaller of the calculated capital gains tax amount under Article 104(1) when provisions concerning non-taxation are not applicable, or the amount of difference between the transaction prices specified on a contract of sales and the actual transaction prices;
2. Where provisions concerning reduction or exemption of capital gains tax apply or are to apply in accordance with this Act or other Acts: The smaller of the amount of tax reduction or exemption when the provisions concerning tax reduction or exemption apply or are to apply, or the amount of difference between the transaction prices specified on a contract of sales and the actual transaction prices.
[This Article Wholly Amended on Dec. 27, 2010]
SECTION 3 Computation of Tax Base and Tax of Capital Gains
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Article 92 (Calculation of tax base and tax amount of capital gains)
(1) The tax base of capital gains of any resident (hereinafter referred to as "tax base of capital gains") shall be calculated separately from the tax base of global income and retirement income. <Amended on Dec. 29, 2020; Dec. 31, 2024>
(2) The tax base of capital gains shall be calculated in the following order:
1. Gains on transfer: To be calculated by deducting necessary expenses under Article 97 from the total revenue amount of capital gains under Article 94 (hereinafter referred to as the "transfer value");
2. Amount of capital gains: To be calculated by deducting the amount of special deduction for long-term holding under Article 95 from the gains on transfer under subparagraph 1 (hereinafter referred to as "gains on transfer");
3. Tax base of capital gains: To be calculated by deducting the basic deduction amount for capital gains under Article 103 from the amount of capital gains under subparagraph 2.
(3) Except as provided in this Act, the amount of capital gains tax shall be calculated in the following order:
1. Calculated capital gains tax amount: To be calculated by applying tax rates under Article 104 to the tax base of capital gains calculated under paragraph (2);
2. Final capital gains tax amount: If any tax is reduced or exempted under Article 90 from the calculated capital gains tax amount under subparagraph 1, it shall be calculated by deducting such tax;
3. Total final capital gains tax amount: To be calculated by adding the additional taxes under Articles 114-2 and 115 of this Act and Articles 47-2 through 47-4 of the Framework Act on National Taxes to the final capital gains tax amount under subparagraph 2.
[This Article Wholly Amended on Dec. 31, 2023]
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Article 93 Deleted. <Dec. 31, 2023>
SECTION 4 Computation of Amount of Capital Gains
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Article 94 (Scope of capital gains)
(1) Capital gains shall consist of the following incomes generated during the relevant taxable period: <Amended on Dec. 27, 2010; Jun. 3, 2014; Dec. 23, 2014; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2024>
1. Income generated from transferring land (referring to land falling under the land category subject to registration in the cadastral register under the Act on the Establishment and Management of Spatial Data) or a building (including facilities and structures annexed thereto);
2. Income generated from transferring any of the following rights or interests in real estate:
a. A right to acquire real estate (including a right to acquire a building and land appurtenant thereto upon completion of the building);
b. Superficies;
c. Rights to lease on a deposit basis and leasehold interest on real estate registered;
3. Income generated from transferring any of the following stocks, etc.:
a. Any of the following stocks, etc. of a listed corporation:
1) Stocks, etc. transferred by a majority stockholder of any of the listed corporations prescribed by Presidential Decree, taking into consideration the stockholding ratio, the total market value, etc.;
2) Stocks, etc. that any person other than the majority stockholder under sub-item 1) above transfers without trading them on the securities market; provided, stocks, etc. transferred through an all-inclusive share swap and transfer under Article 360-2 or 360-15 of the Commercial Act or by exercising a stock option for an all-inclusive share swap and transfer under Article 360-5 or 360-22 of the same Act shall be excluded herefrom;
b. Stocks, etc. of an unlisted corporation; provided, stocks, etc. of the small and medium enterprises prescribed by Presidential Decree (hereafter referred to as "small and medium enterprises" in this Chapter) and the middle-standing enterprises prescribed by Presidential Decree shall be excluded herefrom, if such stocks, etc. are transferred by a person other than majority stockholders of any of the unlisted corporations prescribed by Presidential Decree through an over-the-counter transaction under Article 286(1)5 of the Financial Investment Services and Capital Markets Act conducted by the Korea Financial Investment Association established under Article 283 of that Act, taking into consideration the stockholding ratio, the total market value, etc.;
c. Stocks, etc. issued by a foreign corporation or listed on a foreign market, which are prescribed by Presidential Decree;
4. Income generated from transferring any of the following assets (hereafter referred to as "other assets" in this Chapter):
a. Business rights transferred together with assets described in subparagraph 1 or 2 (including business rights deemed transferred together as being included in the assets according to socially accepted notion even if they have not been separately assessed, and economic profits made by obtaining authorization, permission, license, etc. from an administrative agency) transferred with fixed assets for business);
b. Rights to use, membership, and other rights, irrespective of their nomenclature, to use facilities issued to a person becoming a member of an organization contracted to be entitled to exclusively use the facilities or to use them on more favorable conditions than general users (where the rights to exclusively use facilities or to use them on more favorable conditions than general users are provided by only holding stocks, etc. of the corporation, such stocks, etc. shall be included);
c. Stocks, etc., where the value of the following assets comprises at least 50/100 of the value of total assets of a corporation and the oligopolistic stockholder (referring to the stockholder specified by Presidential Decree, taking into consideration the ratio of stocks, etc. held by the stockholder; hereafter referred to as "oligopolistic stockholder" in this Chapter) of the corporation transfers at least 50/100 of stocks, etc. of the corporation to any person other than the oligopolistic stockholder (including cases prescribed by Presidential Decree where any oligopolistic stockholder transfers at least 50/100 of stocks, etc. to another oligopolistic stockholder, who, in turn, transfers them a person other than an oligopolistic stockholder):
1) The value of the assets referred to in subparagraphs 1 and 2 (hereafter referred to as "real estate, etc." in this Article);
2) The value computed by multiplying the value of any other corporation's stocks directly or indirectly held by the relevant corporation by the holding ratio of real estate, etc. of the other corporation. In such cases, the scope of other corporations and the method for calculating the holding ratio of real estate, etc., shall be prescribed by Presidential Decree;
d. Stocks, etc. of a corporation engaging in the business specified by Presidential Decree, where the sum of the values under item c1) and 2) occupies at least 80/100 of its total assets;
e. The right to relocate under Article 12(1)2 or 3-2 of the Act on Special Measures for Designation and Management of Development Restriction Zones, transferred alongside the assets specified in subparagraph 1 (hereinafter referred to as "relocation right"); provided, this shall not apply in cases where the value of such relocation right is separately assessed and reported in accordance with the method prescribed by Presidential Decree;
5. Income accrued from transactions or acts involving financial investment instruments prescribed by Presidential Decree, such as derivatives and derivatives-linked securities (hereinafter referred to as "derivatives, etc.") (excluding profits from transactions or acts involving derivatives under Article 16(1)13 or Article 17(1)10);
6. Income arising from the transfer of the right to receive trust benefits (hereinafter referred to as "trust beneficiary rights", excluding beneficiary certificates under Article 110 of the Financial Investment Services and Capital Markets Act, investment trust beneficiary rights under Article 189 of that Act, and other beneficiary rights prescribed by Presidential Decree); provided, if the transfer of trust beneficiary rights results in the de facto transfer of dominion and control over the trust property, it shall be deemed a transfer of the trust property itself.
(2) In cases falling under both paragraph (1)3 and 4, subparagraph 4 shall apply. <Amended on Dec. 29, 2020; Dec. 31, 2024>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 95 (Amount of capital gains and special deduction for long-term holding)
(1) The amount of capital gains shall be the amount obtained by deducting the special deduction amount for long-term holding from gains on transfer. <Amended on Dec. 31, 2023>
(2) "Amount of special deduction for long-term holding" in paragraph (1) means the amount calculated by multiplying gains on the transfer of an asset (limited to the gains on the transfer of land or a building before the approval of a management and disposal plan under Article 74 of the Act on the Improvement of Urban Areas and Residential Environments or before the approval of a project implementation plan under Article 29 of the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement, where the right to acquire a house as an association member is transferred) by the deduction rate for the relevant holding period in accordance with Table 1 below, as an asset specified in Article 94(1)1 (excluding unregistered assets transferred pursuant to Article 104(3) and assets specified under Article 104(7)), the holding period of which is at least three years, or the right to acquire a house as an association member (excluding the right acquired from an association member), among the assets specified in Article 94(1)2a; provided, in cases of an asset identified as one house for one household (including land appurtenant thereto) prescribed by Presidential Decree, it means the sum of the amount calculated by multiplying the capital gain on the asset by the deduction rate for the relevant holding period in Table 2 below and the amount calculated by multiplying the deduction rate by residence period under that Table: <Amended on Jan. 1, 2012; Jan. 1, 2013; Jan. 1, 2014; Dec. 15, 2015; Feb. 8, 2017; Dec. 19, 2017; Aug. 18, 2020; Dec. 31, 2023>
Table 1
Holding PeriodDeduction Rate
At least three years, but less than four years6/100
At least four years, but less than five years8/100
At least five years, but less than six years10/100
At least six years, but less than seven years12/100
At least seven years, but less than eight years14/100
At least eight years, but less than nine years16/100
At least nine years, but less than ten years18/100
At least ten years, but less than eleven years20/100
At least eleven years, but less than twelve years22/100
At least twelve years, but less than thirteen years24/100
At least thirteen years, but less than fourteen years26/100
At least fourteen years, but less than fifteen years28/100
At least fifteen years30/100
Holding PeriodDeduction RateResidencel PeriodDeduction Rate
At least three years, but less than four years12/100At least two years, but less than three years (limited to the holding period of which is at least three years)8/100
At least three years, but less than four years12/100
At least four years, but less than five years16/100At least four years, but less than five years16/100
At least five years, but less than six years20/100At least five years, but less than six years20/100
At least six years, but less than seven years24/100At least six years, but less than seven years24/100
At least seven years, but less than eight years24/100At least seven years, but less than eight years24/100
At least eight years, but less than nine years32/100At least eight years, but less than nine years32/100
At least nine years, but less than ten years36/100At least nine years, but less than ten years36/100
At least ten years40/100At least ten years40/100
(3) Notwithstanding paragraph (1), gains on transfer and the amount of special deduction for long-term holding of assets falling under a high-priced house (including land appurtenant thereto) excluded from the object of non-taxation on capital gains under Article 89(1)3 and the right to acquire a house as an association member excluded from the object of non-taxation on capital gains under the proviso, with the exception of the items, of subparagraph 4 of the same paragraph, shall be calculated, as prescribed by Presidential Decree. <Amended on Dec. 31, 2019>
(4) The holding period of assets prescribed in paragraph (2) shall begin on the date of acquisition of the assets and end on the date of transfer of the assets; provided, in cases falling under Article 97-2(1), the period shall begin on the date the spouse or lineal ascendant or descendant who donates the asset acquired the asset, while the period shall begin on the date the decedent acquired the relevant asset, if the relevant asset is within the ratio eligible for the application of the deduction for inheritance of a family business under Article 97-2(4)1. <Amended on Jan. 1, 2014; Dec. 15, 2015; Dec. 20, 2016>
(1) The transfer value of assets under subparagraphs of Article 94(1) shall be determined with the actual trading price between the transferor and the transferee at the time of the transfer of such assets. <Amended on Dec. 20, 2016>
1. Deduction rate for each holding period: The deduction rate calculated according to the following formula; provided, if the deduction rate calculated according to the following formula is larger than 40/100, 40/100 shall apply:
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│ Deduction rate for each holding period under Table 1 of paragraph (2) corresponding to the period of holding a building other than a house + │
│ Deduction rate for each holding period under Table 2 of paragraph (2) corresponding to the period of holding a house │
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2. Deduction rate for each period of residence: The deduction rate calculated according to the following formula:
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│ Deduction rate for each residence period under Table 2 of paragraph (2) corresponding to the period of residence during the period of holding a house │
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(6) The period of holding a house under paragraph (5)1 or 2 shall be counted from the date the relevant asset is actually used for residential purposes; provided, if the date of use for residential purposes is not clear, it shall be calculated from the date when the use of the asset described on the public register is modified to housing. <Added on Dec. 31, 2023>
(7) Matters necessary to calculate the amount of capital gains shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2023>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2023]
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Article 96 (Transfer value)
(1) The transfer value of assets under subparagraphs of Article 94(1) shall be determined with the actual trading price between the transferor and the transferee at the time of the transfer of such assets. <Amended on Dec. 20, 2016>
(2) Deleted. <Dec. 20, 2016>
(3) In any of the following cases where a resident transfers any of the assets referred to in Article 94(1), the value shall be deemed the actual trading price at the time of the transfer of the asset for the purpose of applying paragraph (1) to such case: <Amended on Jan. 1, 2012; Dec. 20, 2016; Dec. 31, 2018; Dec. 23, 2025>
1. The market value under subparagraph 12 of Article 2 under the Corporate Tax Act, where assets are transferred to a corporation identified as a related party under Article 52 of the same Act (including a foreign corporation; hereafter referred to as "related party" in this paragraph) and there is an amount appropriated for bonus, dividends, etc. of the relevant resident under Article 67 of the same Act;
2. Where assets are transferred to a person other than a specially related corporation at a price higher than the market price, and any of the amounts specified in the following items exists, the amount obtained by subtracting the relevant item amount from the transfer value:
a. The amount treated as the value of donated property of the relevant resident pursuant to Article 35 of the Inheritance Tax and Gift Tax Act;
b. The amount prescribed by Presidential Decree, from among the amounts disposed of as dividends, etc. of the relevant resident pursuant to Article 67 of the Corporate Tax Act.
(4) Deleted. <Dec. 20, 2016>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 97 (Calculation of necessary expenses for capital gains)
(1) Necessary expenses that may be deducted from the transfer value when calculating capital gains of a resident shall be as follows: <Amended on Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Jun. 9, 2020>
1. Acquisition value (excluding the liquidation money collected pursuant to Article 20 of the Special Act on Cadastral Resurvey as a result of the increase of an area on official cadastral records as a result of the determination of a boundary under Article 18 of that Act); provided, the amount under item b shall apply only if it is impracticable to ascertain the actual trading price under item a:
a. The actual trading price for acquiring assets specified under Article 94(1);
b. The amount determined through the sequential application of the sales case value, appraised value, or converted acquisition value prescribed by Presidential Decree;
2. Capital expenditure, etc. prescribed by Presidential Decree;
3. Transfer expenses, etc. prescribed by Presidential Decree.
(2) Necessary expenses for capital gains under paragraphs (1) shall be calculated as follows: <Amended on Dec. 27, 2010; Dec. 19, 2017; Dec. 31, 2019>
1. Where the acquisition value is based on the actual transaction value, necessary expenses shall be the following amount plus the amount under paragraph (1)2 and 3:
a. Where it is based on paragraph (1)1a, the relevant actual transaction value;
b. Where the actual transaction value as at the time of acquisition is calculated based on the converted acquisition value pursuant to paragraph (1)1b and Article 114(7), and the acquisition value of assets (including assets inherited or donated) acquired before the date (hereafter referred to as "deemed acquisition date" in this item) on which assets are deemed acquired under Article 8 of the Addenda to the Income Tax Act (Act No. 4803), is based on the total of the actual trading price as at the time of acquisition and the amount calculated by multiplying such value by the producer price increase rate during the period of possession from the acquisition date until the day before the deemed acquisition date, such total amount;
c. Where it is based on the main sentence of paragraph (7), the relevant actual trading price;
2. Necessary expenses in other cases shall be calculated by adding the amount of each asset prescribed by Presidential Decree to the amount under paragraph (1)1b (excluding where subparagraph 1b applies), paragraph (7) (excluding where subparagraph 1c applies), or Article 114(7) (excluding where subparagraph 1b applies); provided, if the acquisition value becomes the converted acquisition value in accordance with paragraph (1)1b, and the amount under item a is smaller than that of item b, the amount specified in item b may be treated as necessary expenses:
a. The aggregate of the converted acquisition value under paragraph (1)1b and the amount prescribed by Presidential Decree in the main sentence;
b. The aggregate of the amounts under paragraph (1)2 and 3.
(3) In calculating necessary expenses pursuant to paragraph (2), if any depreciation cost for assets during the holding period of any transferred assets are included or to be included in necessary expenses, in calculating the amount of business income for each taxable period, the amount calculated by deducting such cost from the amount under paragraph (1) shall be the acquisition value thereof. <Amended on Dec. 27, 2010>
(4) Deleted. <Jan. 1, 2014>
(5) Matters necessary for calculating necessary expenses, such as the scope of the actual trading price paid for acquisition, shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2014>
(6) Deleted. <Jan. 1, 2014>
(7) In applying paragraph (1)1a, where a resident who has transferred assets pursuant to Article 94(1)1 and 2 has confirmed the actual trading price according to the method prescribed by Presidential Decree as at the time of acquisition of such assets, it shall be deemed the actual trading price as at the time of acquisition by such resident; provided, this shall not apply to any of the following cases: <Amended on Dec. 19, 2017>
1. Where the transfer value of the preceding owner on the relevant assets is corrected pursuant to Article 114;
2. Where capital gains tax on the relevant assets of the preceding owner is not imposed, and where such assets have been confirmed transferred at a price higher than the actual trading price.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 97-2 (Special cases concerning necessary expenses for capital gains)
(1) Where a resident calculates gains on the transfer of assets under Article 94(1)1 and 3 or other assets prescribed by Presidential Decree, which were donated within 10 years (or within one year in the case of assets under Article 94(1)3) retroactively from the date of transfer by his or her spouse (including where the marital relationship had been terminated at the time of transfer, but excluding where the marital relationship was terminated due to death; hereafter the same shall apply in this paragraph) or his or her lineal ascendants or descendants (excluding where such ascendants or descendants had died at the time of transfer; hereafter the same shall apply in this paragraph), the necessary expenses to be deducted from the transfer value shall be governed by Article 97(2), but the following standards shall apply: <Amended on Dec. 31, 2023; Dec. 31, 2024; Dec. 23, 2025>
1. The acquisition value shall be the amount provided in Article 97(1)1 as at the time the resident's spouse or lineal ascendant or descendant acquires the relevant asset;
2. Necessary expenses under Article 97(1)2 shall include the amount under that subparagraph that the spouse or lineal ascendants or descendants of a resident have disbursed on the relevant assets;
3. If a resident has paid or is liable to pay an amount equivalent to gift tax in relation to the relevant asset, such amount shall be included in necessary expenses.
(2) Paragraph (1) shall not apply to the following cases: <Amended on Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016>
1. Where a resident acquires an asset at least two years earlier than the date of public announcement of the approval of the relevant project, but the asset is sold under an agreement or expropriated under the Act on Acquisition of and Compensation for Land for Public Works Projects or any other Act;
2. Where a case constitutes a transfer of a house specified in any item of Article 89(1)3 (including high-priced houses ineligible for non-taxation on capital gains under the same subparagraph (including land appurtenant thereto)), if paragraph (1) applies to such case;
3. Where the final capital gains tax calculated by applying paragraph (1) is smaller than the final capital gains tax calculated without applying paragraph (1).
(3) The number of years prescribed in paragraph (1) shall be determined with the period of ownership recorded on the register.
(4) Necessary expenses that may be deducted from the sale price of an asset in calculating the gain on the transfer of an asset to which the deduction under Article 18-2(1) of the Inheritance Tax and Gift Tax Act (hereafter referred to as "deduction for inheritance of a family business" in this paragraph) was applied shall be determined in accordance with Article 97(2); provided, the acquisition value shall be calculated by aggregating the following amounts: <Amended on Dec. 19, 2017; Dec. 31, 2022>
1. The deceased's acquisition value (the amount under Article 97(1)1) x Ratio of the deduction for inheritance of a family business to the relevant asset value (hereafter referred to as "ratio of deduction for inheritance of a family business" in this Article);
2. Asset value at the beginning of inheritance x (1 - Ratio of deduction for inheritance of a family business).
(5) Matters necessary for calculating necessary expenses in applying paragraphs (1) through (4), such as the methods of calculating the amount equivalent to the gift tax and the ratio of deduction for inheritance of a family business, shall be prescribed by Presidential Decree.
[This Article Added on Jan. 1, 2014]
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Article 98 (Time of transfer or acquisition)
In calculating gains on transfer of any assets, the time of transfer and acquisition shall be the date of liquidation of the price of assets, except cases prescribed by Presidential Decree, such as cases where the date of liquidation is unclear. In such cases, if the acquisitor has agreed to pay capital gains tax and additional tax on capital gains tax for the transfer of the assets, the relevant capital gains tax and additional tax on capital gains tax shall not be included in the prices for assets. <Amended on Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 99 (Computation of assessed value)
(1) The assessed value under Article 100 or 114(7) shall be as follows: <Amended on May 28, 2013; Dec. 23, 2014; Jan. 19, 2016; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2024>
1. Land or buildings under Article 94(1)1:
a. Land:
The individual land price officially announced under the Act on the Public Announcement of Real Estate Values (hereinafter referred to as "officially announced individual land price"); provided, the value of land which has no officially announced individual land price shall be appraised by the head of the tax office having jurisdiction over the place for tax payment, according to the method prescribed by Presidential Decree, taking into account the officially announced individual land price of a similar parcel of land in the vicinity; but in cases of any of the areas specified by Presidential Decree as an area where the price of land rises sharply, the value of land shall be appraised by the multiple method;
b. Buildings:
The value calculated and publicly announced at least once each year by the Commissioner of the National Tax Service in consideration of the new construction price, structure, use, location, the year of new construction, etc. of buildings (excluding buildings falling under items c and d);
c. Officetels and commercial buildings:
The value of land and buildings computed and announced officially en bloc at least once per year by the Commissioner of the National Tax Service, taking into account the type, size, transaction status, location, etc. of buildings, with regard to officetels (including land appurtenant thereto) and commercial buildings (including land appurtenant thereto) specified by Presidential Decree in consideration of the use, area, number, etc. of partitioned units of a building, where a building is subdivided into units for separate ownership and the ownership of the land appurtenant to the building is held in common;
d. Residential houses:
Prices for individual houses and multi-unit houses under the Act on the Public Announcement of Real Estate Values; provided, in cases of multi-unit house prices, where multi-unit house prices are determined and officially announced by the Commissioner of the National Tax Service pursuant to the proviso to Article 18(1) of the same Act, such prices shall apply, and the price of a house with no individual house price or multi-unit house price shall be appraised by the head of the tax office having jurisdiction over the place for tax payment by the method prescribed by Presidential Decree, taking into account the individual house price and multi-unit house price of similar houses in the vicinity;
2. Real property rights under Article 94(1)2:
a. Rights to acquire real estate:
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets;
b. Superficies, right to lease on a deposit basis, and registered leasehold interest on real property:
The value appraised by the method prescribed by Presidential Decree, taking into consideration the remaining term, nature, details, transaction situation, etc. of the rights;
3. Stocks, etc. under Article 94(1)3a (the stocks, etc. of a stock-listed corporation prescribed by Presidential Decree shall be limited to those prescribed by Presidential Decree):
The value assessed by applying mutatis mutandis Article 63(1)1a of the Inheritance Tax and Gift Tax Act. In such cases, "2 months before or after the base date of assessment, respectively" shall be construed as "1 month before the date of transfer or acquisition."
4. Stocks, etc. of a stock-listed corporation prescribed by Presidential Decree under subparagraph 3, which do not fall under subparagraph 3, and stocks, etc. under Article 94(1)3b:
The value assessed by applying mutatis mutandis Article 63(1)1b of the Inheritance Tax and Gift Tax Act. In such cases, the reference time and appraised value shall be as prescribed by Presidential Decree, and where it is impossible to confirm the standard market price at the time of acquisition due to the loss of books, etc., the par value shall be the standard market price at the time of acquisition.
5. Preemptive rights to new stocks under Article 94(1)3:
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets;
6. Other assets under Article 94(1)4:
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets;
7. Derivatives, etc. under Article 94(1)5:
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the derivatives, etc.;
8. Trust beneficiary interests under Article 94(1)6: The value appraised by applying Article 65(1) of the Inheritance Tax and Gift Tax Act mutatis mutandis. In such cases, the appraisal period and amount shall be prescribed by Presidential Decree.
(2) "Multiple method" in the proviso to paragraph (1)1a means a method for appraisal according to the amount calculated by multiplying the officially announced individual land price as at the time of transfer or acquisition, by multiples prescribed by Presidential Decree.
(3) Matters necessary for calculating the following assessed values shall be prescribed by Presidential Decree, taking into account factors such as the type of building, transaction situation, and whether the assessed value is publicly notified: <Amended on Act No. 13796, Jan. 19, 2016; Dec. 31, 2019>
1. Where the assessed value as at the time of transfer and the assessed value as at the time of acquisition calculated pursuant to paragraph (1) are the same, the assessed value as at the time of acquisition;
2. The assessed value as at the time of acquisition of land and a house acquired before the officially announced individual land prices, individual house prices, or multi-unit house prices are publicly notified or announced pursuant to the Act on the Public Announcement of Real Estate Values;
3. The assessed value as at the time of acquisition of a building acquired before the assessed value under paragraph (1)1b is publicly notified;
4. The assessed value as at the time of acquisition of an officetel (including land appurtenant thereto), commercial building (including land appurtenant thereto), or multi-unit house acquired prior to the public publication of the assessed value under paragraph (1)1c or the proviso of paragraph (1)1d.
(4) When the Commissioner of the National Tax Service has computed the assessed value under paragraph (1)1c, he or she shall, before he or she officially makes an announcement thereof, publicly notify them according to the methods prescribed by Decree of the Ministry of Finance and Economy, such as a notice through the Internet, etc. and hear opinions from the owners or other interested persons for at least 20 days. <Amended on Oct. 1, 2025>
(5) When the Commissioner of the National Tax Service collects an opinion from the owners or other interested persons pursuant to paragraph (4), he or she shall notify the result of his or her disposition within 30 days from the date the period for advancing opinions expires.
(6) A public notification under paragraph (4) shall include the matters prescribed by Presidential Decree, such as the place for perusal of books including the assessed values, the period for advancing opinions, etc.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 99-2 (Application for reassessment and public notification of assessed value)
(1) Any owner or any other interested person who has an objection to a publicly notified assessed value pursuant to Article 99(1)1c may file in writing an application for the reassessment of the assessed value and pubic notification thereof with the Commissioner of the National Tax Service within 30 days from the date of public notification of the assessed value.
(2) The Commissioner of the National Tax Service shall notify in writing an applicant of the result of his or her disposition within 30 days from the date when the period of application under paragraph (1) expires. In such cases, when the Commissioner of the National Tax Service deems that the details of an application are appropriate, he or she shall reassess and publicly notify the assessed value pursuant to Article 99(1)1c.
(3) Where the Commissioner of the National Tax Service has discovered that the assessed value has been assessed and publicly notified incorrectly or any error in writing and other apparent errors prescribed by Presidential Decree have been made, he or she shall promptly reassess and notify it publicly.
(4) Matters necessary for applications for reassessment and public notification and procedures for disposition, etc. shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 100 (Computation of gains on transfer)
(1) In calculating gains on transfer, if the transfer value is based on the actual transaction value (if the value described in Article 96(3), or the sales case value or the appraised value applies pursuant to Article 114(7), including such sales case value, appraised value, etc.), the acquisition value shall also be based on the actual trading price (if the value described in Article 97(7), or the sales case value, the appraised value, or the converted acquisition value applies pursuant to Article 114(7), including such sales case value, appraised value, converted acquisition value, etc.) and, if the acquisition value is based on the assessed value, the acquisition value shall also be based on the assessed value. <Amended on Dec. 31, 2019>
(2) In applying paragraph (1), where the transfer value or the acquisition value is assessed, based on the actual trading price, and land, buildings, etc. are acquired or transferred simultaneously, the value of land and that of buildings, etc. shall be entered in a book separately, however, if the distinction between the value of land and that of buildings, etc. is obscure, their values shall be apportioned, as prescribed by Presidential Decree, taking into account their assessed values, etc. at the time of acquisition or transfer. In such cases, the common acquisition value and transfer expenses shall be calculated on a proportional basis of the separate values of the relevant assets.
(3) In applying paragraph (2), where land, buildings, etc. are acquired or transferred together when the value of land, buildings, etc. is at least 30/100 different from the value calculated by separately distributing them pursuant to the same paragraph, the classification of the value of land, buildings, etc. shall be deemed unclear; provided, this shall not apply to cases falling under any grounds prescribed by Presidential Decree, such as where the value is classified as prescribed by other statutes or regulations. <Added on Dec. 15, 2015; Dec. 31, 2024>
(4) Matters necessary for calculating gains on transfer shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 101 (Calculation of capital gains by wrongful acts)
(1) If it is deemed that any act or calculation of a resident with capital gains reduces the burden of taxation on such income wrongfully due to transactions with a person related to the resident, the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment may calculate the amount of income in the relevant taxable period, irrespective of such act or calculation of the resident. <Amended on Jan. 1, 2012>
(2) Where a resident donated assets to a related person prescribed in paragraph (1) (excluding cases of a spouse, lineal ascendants, or descendants governed by Article 97-2(1)) and then a person to whom such assets have been donated transfers such assets on to another person within 10 years from the date of such donation, and the amount of tax under subparagraph 1 is less than the amount of tax under subparagraph 2, the donor shall be deemed to have transferred such assets directly; provided, this shall not apply where the capital gains substantially belong to the relevant donee: <Amended on Jan. 1, 2012; Jan. 1, 2014; Dec. 31, 2022>
1. The aggregate of the gift tax of a donee (referring to the tax amount calculated by subtracting the amount of tax credited, reduced, or exempted from the calculated tax amount under the Inheritance Tax and Gift Tax Act) and the capital gains tax (referring to the final tax calculated by subtracting the amount of tax credited, reduced, or exempted from the calculated tax under this Act; hereafter the same shall apply in subparagraph 2);
2. The capital gains tax calculated considering cases where a donor transfers the assets directly.
(3) Where capital gains tax is levied on a donor pursuant to paragraph (2), notwithstanding the provisions of the Inheritance Tax and Gift Tax Act, no gift tax shall be levied on the originally-donated assets.
(4) Article 97-2(3) shall apply mutatis mutandis to the calculation of the number of years under paragraph (2). <Amended on Jan. 1, 2014>
(5) The scope of related persons under paragraph (1), and other matters necessary for calculation by wrongful acts shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2012>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 102 (Separate calculation of amount of capital gains)
(1) The amount of capital gains shall be calculated separately for each of the following incomes. In such cases, losses incurred in calculating the amount of income shall not be included in the amount of income under other subparagraphs: <Amended on Dec. 23, 2014; Dec. 29, 2020; Dec. 31, 2024>
1. Income under Article 94(1)1, 2, and 4;
2. Income under Article 94(1)3;
3. Income under Article 94(1)5.
4. Income under Article 94(1)6.
(2) In calculating the amount of capital gains pursuant to paragraph (1), where asset losses occur from transfer, such losses on transfer shall be deducted from the amount of capital gains generated from assets other than the relevant assets by each subparagraph of paragraph (1). In such cases, the method of deduction shall be prescribed by Presidential Decree in consideration of the tax rate, etc. of the amount of capital gains.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 5 Basic Deduction for Capital Gains
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Article 103 (Basic deduction for capital gains)
(1) For a resident with capital gains, 2,500,000 won per year shall be deducted from each of the following incomes, out of the capital gains for the relevant taxable period: <Amended on Dec. 23, 2014; Dec. 29, 2020; Dec. 31, 2024>
1. Income under Article 94(1)1, 2 and 4; provided, this shall not apply to the amount of capital gains of the assets transferred without registration pursuant to Article 104(3);
2. Income under Article 94(1)3;
3. Income under Article 94(1)5.
4. Income under Article 94(1)6.
(2) In applying paragraph (1), where the amount of income reduced or exempted under this Act, the Act on Restriction on Special cases Concerning Taxation, or other Acts is included in capital gains under Article 95, 2.5 million a year shall be deducted from capital gains, other than such amount of income already reduced or exempted, and shall be deducted beginning with the amount of capital gains of assets transferred first in the relevant taxable period in order, among the amount of capital gains, other than the amount of income reduced or exempted.
(3) Deduction pursuant to paragraph (1) shall be referred to as "basic deduction for capital gains".
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 6 Calculation of Tax Amount of Capital Gains
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Article 104 (Tax rates of capital gains)
(1) The amount of capital gains tax on a resident shall be calculated by applying the following tax rates to the tax base of capital gains for the relevant taxable period (hereinafter referred to as "calculated capital gains tax amount"). In such cases, when at least two tax rates, among the following tax rates, are applicable to an asset, the greatest calculated tax amount on capital gains, among the amounts calculated by applying relevant tax rates, shall be determined as the assessed tax amount: <Amended on Dec. 27, 2010; Jan. 1, 2014; Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Aug. 18, 2020; Dec. 29, 2020; Dec. 31, 2022; Dec. 31, 2024>
1. Assets under Article 94(1)1, 2, and 4:
Tax rate under Article 55(1) (in cases of rights to acquire a house, 60/100 of the tax base of capital gains);
2. Assets under Article 94(1)1 and 2, the holding period of which is at least one year, but less than one year:
40/100 of the tax base of capital gains [60/100 in cases of houses (including land appurtenant thereto, as prescribed by Presidential Decree; hereafter the same shall apply in this paragraph), association members' rights to acquire a house, and rights to buy a house]:
3. Assets under Article 94(1)1 and 2, the holding period of which is less than one year:
50/100 of the tax base of capital gains (70/100 in cases of houses, association members' rights to acquire a house, and rights to buy a house);
4. Deleted; <Aug. 18, 2020>
5. Deleted; <Jan. 1, 2014>
6. Deleted; <Jan. 1, 2014>
7. Deleted; <Jan. 1, 2014>
8. Land for non-business use under Article 104-3:
Tax Base of Capital GainsTax Rate
14 million won or less16 percent
More than 14 million won, but not exceeding 50 million won2,240,000 won + (Amount exceeding 14 million won x 25 percent)
More than 50 million won, but not exceeding 88 million won11,240,000 won + (Amount exceeding 50 million won x 34 percent)
More than 88 million won, but not exceeding 150 million won24,160,000 won + (Amount exceeding 88 million won x 45 percent)
More than 150 million won, but not exceeding 300 million won52,060,000 won + (Amount exceeding 150 million won x 48 percent)
More than 300 million won, but not exceeding 500 million won124,060,000 won + (Amount exceeding 300 million won x 50 percent)
More than 500 million won, but not exceeding 1 billion won224,060,000 won + (Amount exceeding 500 million won x 52 percent)
More than 1 billion won484,060,000 won + (Amount exceeding 1 billion won x 55 percent)
Tax Base of Capital GainsTax Rate
12 million won or less16 percent
More than 14 million won, but not exceeding 50 million won2,240,000 won + (Amount exceeding 14 million won x 25 percent)
More than 50 million won, but not exceeding 88 million won11,240,000 won + (Amount exceeding 50 million won x 34 percent)
More than 88 million won, but not exceeding 150 million won24,160,000 won + (Amount exceeding 88 million won x 45 percent)
More than 150 million won, but not exceeding 300 million won52,060,000 won + (Amount exceeding 150 million won x 48 percent)
More than 300 million won, but not exceeding 500 million won124,060,000 won + (Amount exceeding 300 million won x 50 percent)
More than 500 million won224,060,000 won + (Amount exceeding 500 million won x 52 percent)
More than 500 million won, but not exceeding 1 billion won484,060,000 won + (Amount exceeding 1 billion won x 55 percent)
More than 1 billion won2,240,000 won + (Amount exceeding 14 million won x 25 percent)
70/100 of the tax base of capital gains;
11. Assets under Article 94(1)3a and b:
a. Stocks, etc. transferred by a major shareholder prescribed by Presidential Decree in consideration of the ownership ratio, market capitalization, and other relevant factors (hereinafter referred to in this Chapter as the "major shareholder");
1) Stocks, etc. held for less than 1 year and issued by a corporation other than a small or medium-sized enterprise: 30 percent of the tax base of capital gains;
2) Stocks, etc. not falling under subitem 1);
┌────────┬──────────────────┐
│ Tax base of capital gains │ Tax rate │
├────────┼──────────────────┤
│ 300 million won or less │ 20% │
├────────┼──────────────────┤
│ Exceeding 300 million won │ 60 million won + (amount exceeding 300 million won × 25%) │
│ Over 300 million won │ 60 million won + (amount exceeding 300 million won × 25%) │
b. Stocks, etc. transferred by a person other than a major shareholder;
1) Stocks, etc. of a small or medium enterprise: 10% of the tax base of capital gains;
2) Stocks, etc. not falling under subitems 1): 20% of the tax base of capital gains;
12. Assets provided in Article 94(1)3c:
a. Stocks, etc. of small and medium enterprises:
10/100 o\f the tax base of capital gains;
10/100 of the tax base of capital gains;
20/100 of the tax base of capital gains;
13. Derivatives, etc. under Article 94(1)5:
20/100 of the tax base of capital gains;
14. Trust beneficiary interests under Article 94(1)6:
┌────────┬──────────────────┐
│ Tax base of capital gains │ Tax rate │
├────────┼──────────────────┤
│ 300 million won or less │ 20% │
├────────┼──────────────────┤
│ Exceeding 300 million won │ 60 million won + (amount exceeding 300 million won × 25%) │
│ Over 300 million won │ 60 million won + (amount exceeding 300 million won × 25%) │
(2) The holding period under paragraph (1)2, 3, and 11a shall be from the date of acquisition of the relevant assets to the date of transfer; provided, in any of the following cases, the date set for each shall be deemed the date of acquisition of the relevant assets: <Amended on Jan. 1, 2014; Dec. 20, 2016; Dec. 19, 2017; Dec. 29, 2020; Dec. 31, 2024>
1. In cases of inherited assets, the date the predecessor acquired such assets;
2. In cases of assets falling under Article 97-2(1), the date a donor acquired such assets;
3. Where stocks, etc. are newly acquired from a merging corporation, a corporation newly incorporated by division, or other corporation of such divided merger, on account of the merger or division (excluding physical division) of a corporation, the date stocks, etc. of a merged corporation, a divided corporation, or other corporation of a corporation extinguished by the division or merger are acquired.
(3) "Unregistered assets transferred" in paragraph (1)10 means that a person who has acquired assets under Article 94(1)1 and 2 transfers such assets without making registration concerning the acquisition thereof; provided, assets prescribed by Presidential Decree shall be excluded.
(4) Where any of the following real estate is transferred, the tax rate under Article 55(1) [paragraph (1)8 in cases falling under subparagraph 3 (including cases falling under the proviso of the same subparagraph)] plus 10/100 shall apply to such real estate. In such cases, where the period of ownership of the real estate is less than two years, the calculated tax amount calculated on capital gains by applying the tax rate under Article 55(1) [paragraph (1)8 in cases falling under subparagraph 3 (including cases falling under the proviso of the same subparagraph)]) plus 10/100 or the calculated tax amount calculated on capital gains by applying the tax rate under paragraph (1)2 or 3, whichever is greater, shall be determined as the calculated tax amount on capital gains: <Amended on Dec. 27, 2010;Jan. 1, 2013; Jan. 1, 2014; Dec. 23, 2014; Act 13558, Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2019>
1. Deleted; <Dec. 19, 2017>
2. Deleted; <Dec. 19, 2017>
3. Real estate located in a designated area under Article 104-2(2), which is land for non-business use under Article 104-3: Provdied, That this shll not apply if a purchase and sale contract has been concluded, and a down payment has been paid for the transfer of land before the date of the announcement of the designated area, and it is confirmed by evidentiary documents;
4. Other real estate prescribed by Presidential Decree, necessary for stabilizing the price of real estate, as the price of real estate increases or is likely to increase excessively.
(5) Where at least two assets, among those specified in Article 94(1)1, 2, and 4, are transferred during the relevant taxable period, the greater of the following amounts (if there is any amount of reduction or exemption of capital gains tax under this Act or any other tax-related Acts, it means the amount of calcaulated tax after deducting such amount of reduction or exemption is greater than the following amounts) shall be determined as the calculated capital gains tax amount. In such cases, when calculating the amount under subparagraph 2, the assets under paragraph (1)8 and 9 shall be deemed identical assets, while a parcel of land shall be deemed separate assets in calculating the amount of capital gains tax, if the parcel of land is separated into a piece of land for non-business use under Article 104-3 and a piece of land for any other use: <Added on Dec. 23, 2014; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019>
1. The calculated capital gains tax amount by applying the tax rate under Article 55(1) to the sum of tax bases of capital gains for the relevant taxable period;
2. The sum of capital gains tax amount as calculated for each asset separately under paragraphs (1) through (4) and (7); provided, where the tax rates under the same subparagraphs among the tax rates under each subparagraph of paragraphs (1), (4), and (7) apply to two or more asses, and the applicable tax rates are two or more, the aforesaid total sum of the calculated tax amounts of capital gains under the main sentence of this subparagraph shall be replaced by the total sum of the respective largest calculated tax amounts among the tax amounts calculated by applying tax rates under each relevant subparagraph of paragraph (1), (4) or (7) to the added-up capital gains tax bases of each asset.
(6) The tax rate under paragraph (1)13 may be reduced by up to 75/100 of the tax rate, as prescribed by Presidential Decree, if necessary for fostering the capital market, etc. <Added on Dec. 31, 2024>
(7) The tax rate calculated by adding 20/100 (or 30/100 in cases falling under subparagraph 3 or 4) to the tax rate under Article 55(1) shall apply where any of the following houses (including land appurtenant thereto; hereafter the same shall apply in this paragraph) is transferred. In such cases, where the holding period of the house is less than two years, the greater of the amount of capital gains tax calculated by applying the tax rate calculated by adding 20/100 (or 30/100 in cases falling under subparagraph 3 or 4) to the tax rate under Article 55(1) or the amount of capital gains tax calculated by applying the tax rate under paragraph (1)2 or 3 shall be determined as the amount of capital gains tax: <Added on Dec. 19, 2017; Aug. 18, 2020>
1. A house constituting one of two houses per household, specified by Presidential Decree, in an area subject to adjustment as defined in Article 63-2(1)1 of the Housing Act (hereafter referred to as "area subject to adjustment" in this Article);
2. A house in an area subject to adjustment, where one household owns one house and one right to acquire a house as an association member or right to buy a house; provided, the long-term rental houses, etc. specified by Presidential Decree shall be excluded herefrom;
3. A house constituting one of at least three houses per household, specified by Presidential Decree, in an area subject to adjustment;
4. A house in an area subject to adjustment, where one household owns houses or rights to acquire a house as an association member or rights to buy a house, and the total number of houses or rights is at least three; provided, the long-term rental houses, etc. specified by Presidential Decree shall be excluded herefrom.
(8) Other matters necessary for calculating the capital gains tax amount shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 104-2 (Operation of designated area)
(1) Where the increase rate of real estate price of the relevant area is higher than that of the national consumers price, and where the real estate price in the relevant area has increased excessively or is apprehended to increase excessively, taking into account the increase rate of the real estate prices, etc. on a national basis, the Minister of Finance and Economy may designate such area as a designated area according to the standard and methods prescribed by Presidential Decree. <Amended on Oct. 1, 2025>
(2) "Real estate located in a designated area" in Article 104(4)3 means real estate specified by Presidential Decree, among that located in a designated area under paragraph (1). <Amended on Dec. 20, 2016; Dec. 19, 2017>
(3) The Deliberative Committee on Stabilization of Real Estate Prices shall be established in the Ministry of Finance and Economy to deliberate on designation and cancellation of a designated area under paragraph (1) and other necessary matters. <Amended on Oct. 1, 2025>
(4) Matters necessary for standards and methods for cancelling a designated area under paragraph (1) and for composing and operating the Deliberative Committee on Stabilization of Real Estate Prices, shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 104-3 (Scope of land for non-business use)
(1) "Land for non-business use" in Articles 104(1)8 means any of the following land during the period prescribed by Presidential Decree in the period of ownership of the land: <Amended on Act No. 10221, Mar. 31, 2010;Jan. 1, 2013; Dec. 23, 2014; Act No. 13426, Jul. 24, 2015; Dec. 20, 2016>
1. Any of the following farmland:
a. Farmland, the owner of which does not reside thereon, or farmland which is not cultivated by the owner, as prescribed by Presidential Decree; provided, this shall not apply to farmland prescribed by Presidential Decree as may be owned under the Farmland Act and other Acts;
b. Farmland in a city area under the National Land Planning and Utilization Act (excluding an area prescribed by Presidential Decree; hereafter the same shall apply in this subparagraph), among the Special Metropolitan City, a Metropolitan City (excluding Guns located in a Metropolitan City; hereafter the same shall apply in this paragraph), a Special Self-Governing City (excluding Eup/Myeon areas located in a Special Self-Governing City; hereafter the same shall apply in this paragraph), a Special Self-Governing Province (excluding Eup/Myeon areas of 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), and a Si area (excluding Eup/Myeon areas in a Si in the form of urban and agricultural complex under Article 3(4) of the Local Autonomy Act; hereafter the same shall apply in this paragraph); provided, farmland for which the period prescribed by Presidential Decree has not passed from the date when farmland, the owner of which has lived and cultivated, as prescribed by Presidential Decree, has been incorporated into the city area of the Special Metropolitan City, a Metropolitan City, a Special Self-Governing City, a Special Self-Governing Province, and a Si, shall be excluded;
2. Forest land; provided, any of the following forest land shall be excluded:
a. Forest for protection of forest hereditary resources, protective forest, forest for seed collection, and experimentation forest designated by the Creation and Management of Forest Resources Act, and forest land prescribed by Presidential Decree, necessary for promoting other public interests or for protecting and nurturing forest;
b. Forest land owned by a person who lives in the location of forest land, as prescribed by Presidential Decree;
c. Forest land prescribed by Presidential Decree, which has reasonable grounds to be deemed that it has direct relations with residence or business in consideration of the landowner, location, utilization situation, possession period, area, etc.;
3. Any of the following sites for pasturage; provided, a site for pasturage prescribed by Presidential Decree, that has reasonable grounds to be deemed that it has direct relations with residence or business in consideration of the landowner, location, utilization situation, possession period, area, etc. shall be excluded:
a. A site for pasturage owned by a person conducting stock-raising business which exceeds the standard area of land for stock raising prescribed by Presidential Decree, or which is located in a city area (excluding an area prescribed by Presidential Decree; hereafter the same shall apply in this subparagraph) of the Special Metropolitan City, a Metropolitan City, a Special Self-Governing City, a Special Self-Governing Province, and a Si (excluding where the period prescribed by Presidential Decree has not elapsed from the date incorporated into the city area);
b. Land owned by a person who does not conduct stock-raising business;
4. Land excluding the following, among land, other than farmland, forest land, and a site for pasturage:
a. Land which property tax is not levied on or exempted pursuant to the Local Tax Act or related Acts;
b. Land subject to taxation of separate aggregation or separate taxation of property tax under Article 106(1)2 and 3 of the Local Tax Act;
c. Land prescribed by Presidential Decree with reasonable grounds to be deemed that it has direct relations with residence or business in consideration of the land utilization situation, whether the obligation is performed under related Acts, the amount of income, etc.;
5. Land exceeding the area computed by multiplying the area on which a house is built among land annexed to a house under Article 106(2) of the Local Tax Act by the multiple prescribed by Presidential Decree by each region;
6. Land annexed to a residential building not for permanent residence, but for vacation, summer holidays, entertainment, or any similar purpose (hereafter referred to as "villa" in this subparagraph); provided, land located in an Eup/Myeon under Article 3(3) or (4) of the Local Autonomy Act and annexed to a house in an agricultural or fishing village that meets the scope and criteria prescribed by Presidential Decree shall be excluded herefrom, but the area of land equivalent to ten times the floor area of a villa shall be deemed the land annexed to the building, if the bounds of the land annexed to the villa is unclear;
7. Other land similar to those under subparagraphs 1 through 6, prescribed by Presidential Decree, which has reasonable grounds to be deemed that it has no direct relations with residence or business of a resident.
(2) In applying paragraph (1), where land falls under any subparagraph of paragraph (1) due to the prohibition of use of such land by any Act after the acquisition or other extenuating circumstances prescribed by Presidential Decree, such land need not be deemed land for non-business use, as prescribed by Presidential Decree.
(3) In applying paragraphs (1) and (2), matters necessary for the scope, etc. of farmland, forest land, and a site for pasturage shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 7 Preliminary Return on Tax Base of Capital Gains and Payment
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Article 105 (Preliminary return on tax base of capital gains)
(1) A resident who has transferred assets prescribed in the subparagraphs of Article 94(1) (excluding subparagraphs 3c and 5 of that paragraph) shall report the tax base of capital gains calculated pursuant to Article 92(2) to the head of the tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree, within the following periods, as prescribed by Presidential Decree: <Amended on Dec. 23, 2014; Jan. 19, 2016; Dec. 20, 2016; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2024>
1. Two months from the last day of the month in which an asset is transferred, where the resident transfers the asset specified in Article 94(1)1, 2, 4, or 6; provided, where the person settles the price before he or she obtains permission for a contract for sale and purchase of land to transfer a parcel of land in an area subject to permission for a contract for sale and purchase of land under Article 10(1) of the Act on Report on Real Estate Transactions, the period shall be two months from the last day of the month in which permission is granted for the transfer (where the designation of an area subject to permission is cancelled before the permission for a contract for sale and purchase of land is obtained, referring to the date such designation is cancelled);
2. Two months from the end of the half-year in which the date of transfer falls, in cases where the resident transfers the asset specified in Article 94(1)3a and b;
3. Three months from the last day of the month in which the resident transfers an asset, where an amount of debt in a gift of encumbered property is deemed transferred under the latter part of subparagraph 1 of Article 88, notwithstanding subparagraphs 1 and 2.
(2) A return on tax base of capital gains pursuant to paragraph (1) shall be referred to as a preliminary return.
(3) Paragraph (1) shall also apply when no gains on transfer occur or any loss on transfer occurs.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 106 (Payment by preliminary return)
(1) When any resident files a preliminary return, he or she shall pay the tax amount calculated by deducting the amount of tax reduced or exempted under the Act on Restriction on Special cases Concerning Taxation and other Acts from the calculated tax under Article 107 to a tax office having jurisdiction over the place for tax payment, the Bank of Korea or a postal service office, as prescribed by Presidential Decree.
(2) Payment under paragraph (1) shall be referred to as "payment by preliminary return" in this Chapter. <Amended on Dec. 29, 2020>
(3) In cases of payment by preliminary return, where there is any amount of tax occasionally imposed pursuant to Articles 82 and 118, payment shall be made after deducting such tax.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 107 (Calculation of tax for preliminary return)
(1) A resident who files a preliminary return shall calculate the tax amount for the preliminary return by the following formula:
┌──────────────────────┐
│ Tax amount for a preliminary return = (A - B - C) x D │
│ │
│ A: Capital gains │
│ B: Special deduction for long-term holding │
│ C: Basic deduction from capital gains │
│ D. Tax rate specified in Article 104(1) │
└──────────────────────┘
(2) Where a resident who files preliminary returns on at least two occasions with regard to assets subject to progressive tax rates during the relevant taxable period intends to file a return by including the amount of the capital gains for which returns have been already filed, the tax amount to be stated in the second and subsequent preliminary returns shall be calculated as follows: <Amended on Dec. 19, 2017; Dec. 29, 2020; Dec. 31, 2024>
1. If the asset is subject to the tax rate specified in Article 104(1)1: The amount calculated by the following formula:
│ D: Tax rate specified in Article 104(1)1 │
│ Tax amount for a preliminary return = [(A + B - C) × D] - E │
│ │
│ A: The amount of capital gains on assets already reported │
│ B: The amount of capital gains on the assets reported after the second time │
│ C: Basic deduction from capital gains │
│ D: Tax rate specified in Article 104(1)1 │
│ E: The calculated tax amount for preliminary return already filed │
└──────────────────────┘
2. If the asset is subject to the tax rate under Article 104(1)8 or 9: The amount calculated by the following formula:
│ D: Tax rate specified in Article 104(1)1 │
│ Tax amount for a preliminary return = [(A + B - C) × D] - E │
│ │
│ A: The amount of capital gains on assets already reported │
│ B: The amount of capital gains on the assets reported after the second time │
│ C: Basic deduction from capital gains │
│ D: Tax rate specified in Article 104(1)8 or 9 │
│ E: The calculated tax amount for preliminary return already filed │
└──────────────────────┘
3. In cases of assets subject to tax rates under Article 104(1)11a2): The amount calculated by the following formula:
│ D: Tax rate specified in Article 104(1)1 │
│ Tax amount for a preliminary return = [(A + B - C) × D] - E │
│ │
│ A: The amount of capital gains on assets already reported │
│ B: The amount of capital gains on the assets reported after the second time │
│ C: Basic deduction from capital gains │
│ D: Tax rate specified in Article 104(1)11a2) │
│ E: The calculated tax amount for preliminary return already filed │
└──────────────────────┘
4. If the asset is subject to the tax rate under Article 104(1)14: The amount calculated by the following formula:
│ D: Tax rate specified in Article 104(1)1 │
│ Tax amount for a preliminary return = [(A + B - C) × D] - E │
│ │
│ A: The amount of capital gains on assets already reported │
│ B: The amount of capital gains on the assets reported after the second time │
│ C: Basic deduction from capital gains │
│ D: Tax rate specified in Article 104(1)14 │
│ E: The calculated tax amount for preliminary return already filed │
└──────────────────────┘
[This Article Wholly Amended on Dec. 20, 2016]
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Article 108 (Submission of real estate transfer notification certificate by Korean national residing abroad and foreigner)
When a Korean national residing abroad as defined in subparagraph 1 of Article 2 of the Act on the Immigration and Legal Status of Overseas Koreans or a foreigner as defined in subparagraph 2 of Article 2 of the Immigration Act applies for registration with the head of the registrar’s office to transfer assets specified in Article 94(1)1 and transfer the ownership thereof, they shall submit a real estate transfer notification certificate as prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2019]
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Article 109 Deleted. <Dec. 28, 1999>
SECTION 8 Final Return on Tax Base of Capital Gains and Payment
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Article 110 (Final return on tax base of capital gains)
(1) Any resident with capital gains in the relevant taxable period shall file a return on the tax base of capital gains with the head of the tax office having jurisdiction over the place for tax payment during the period from May 1 to 31 of the year following such taxable period (in cases falling under the proviso to Article 105(1)1, during the period from May 1 to 31 of the year following the taxable period in which a contract for sale and purchase of land is permitted (where the designation of an area subject to permission is cancelled before the permission for a contract for sale and purchase of land is obtained, referring to the date such designation is cancelled)), as prescribed by Presidential Decree. <Amended on Dec. 19, 2017>
(2) Paragraph (1) shall also apply where there is no tax base or there is a loss incurred in the relevant taxable period.
(3) A return on tax base of capital gains pursuant to paragraph (1) shall be referred to as a final return.
(4) Notwithstanding paragraph (1), any person who files a preliminary return may choose not to file a final return on the relevant income; provided, this shall not apply to cases prescribed by Presidential Decree, where preliminary returns on assets subject to progressive tax rates are made at least twice in the relevant taxable period.
(5) Where filing a final return, the documents necessary for calculating the transfer value and necessary expenses which are the basis of the calculation of the amount of capital gains in such return, prescribed by Presidential Decree, shall be submitted to the head of a tax office having jurisdiction over the place for tax payment.
(6) Where there are deficient matters or errors in a return and other documents submitted under paragraph (5), the head of a tax office having jurisdiction over the place for tax payment may demand the supplement thereof.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 111 (Final return and payment)
(1) Every resident shall pay the amount calculated by deducting the amount of tax reduced or exempted and tax credit from the calculated capital gains tax amount based on the tax base in the relevant taxable period to a tax office having jurisdiction over the place for tax payment, the Bank of Korea or a postal service office by the deadline for a final return pursuant to Article 110(1) (including the provisions of Article 74(1) through (4) which are applicable mutatis mutandis pursuant to Article 118), as prescribed by Presidential Decree.
(2) Payment pursuant to paragraph (1) shall be referred to as "payment by final return" in this Chapter. <Amended on Dec. 29, 2020>
(3) In cases of filing a final return and making a payment, if there are the calculated tax for preliminary return under Article 107, any tax determined or reassessed under Article 114, or the tax occasionally imposed under Articles 82 and 118, a taxpayer shall make a due payment after deducting such amount.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 112 (Payment of capital gains tax in installment)
Any resident whose tax payable under Article 106 or 111 exceeds ten million won respectively may pay in installment part of such amount payable, within two months from the end of the deadline for payment, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 112-2 Deleted. <Dec. 15, 2015>
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Article 113 Deleted. <Dec. 28, 1999>
SECTION 9 Determination, Rectification, Collection and Refund of Capital Gains
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Article 114 (Determination, rectification, and notification of tax base and tax amount on capital gains)
(1) Where any person liable to file a preliminary return under Article 105 or a final return under Article 110 fails to file such return, the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment shall determine the tax base and tax amount on capital gains for the relevant resident.
(2) Where any omission or error exists in the details of a preliminary return filed pursuant to Article 105 or a final return filed under Article 110, the head of a tax office or the commissioner of the a regional tax office having jurisdiction over the place for tax payment shall correct the tax base and tax amount on capital gains.
(3) Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment detects any omission or error in the determination or rectification after he or she determines or corrects the tax base and tax amount on capital gains, he or she shall immediately correct them again.
(4) Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment determines or corrects the tax base and tax amount on capital gains pursuant to paragraphs (1) through (3), he or she shall be based on the values pursuant to Articles 96, 97, and 97-2. <Amended on Jan. 1, 2014>
(5) Where a person liable to file a preliminary or final return on the tax base of capital gains (hereafter referred to as "person liable for a return" in this paragraph) on the transfer value and the acquisition value based on the actual transaction value by transfer of assets pursuant to Article 94(1)1 fails to file the final return and falls under any case prescribed by Presidential Decree considering the tax base and tax amount on capital gains or whether a person liable for a return has declared the actual transaction value, notwithstanding paragraph (4), the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment may determine the tax base and tax amount on capital gains by presuming the transaction value entered in the register pursuant to Article 68 of the Registration of Real Estate Act (hereafter referred to as "registered value" in this paragraph) the actual transaction value; provided, this shall not apply where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment verifies that the registered value differs from the actual transaction value. <Amended on Act No. 10580, Apr. 12, 2011; Jan. 1, 2012>
(6) Where a person files a preliminary return or a final return on the tax base on capital gains on the transfer value and the acquisition value based on the actual transaction value when applying paragraph (4), and the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment verifies the actual transaction value because the value of such return is different from the actual value, the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment shall correct the tax base and tax amount on capital gains by deeming such verified value the transfer value or acquisition value.
(7) Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment determines the transfer value or acquisition value based on the actual transaction value when applying paragraphs (4) through (6), and where he or she is unable to acknowledge or verify the actual transaction value at the time of transfer or acquisition of the relevant assets by books or other supporting documents due to grounds prescribed by Presidential Decree, he or she may determine or correct the transfer value or acquisition value through additional investigation based on the compensation value for sales and purchase, the appraised value, the conversion value, the converted acquisition value, or the assessed value, etc. as prescribed by Presidential Decree. <Amended on Dec. 31, 2019; Dec. 29, 2020>
(8) Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment determines or corrects the tax base and tax amount on capital gains of any resident pursuant to paragraphs (1) through (7), he or she shall notify such resident of such determination or rectification in writing, as prescribed by Presidential Decree.
(9) In applying paragraphs (1) through (3), the head of a tax office having jurisdiction over the place for tax payment or the commissioner of a regional tax office may, if it is necessary to ascertain any omission or error in the details of a report on gains from transfer of stocks, etc. under Article 94(1)3 and 4 and other details of transactions, inquire of an investment trader or investment broker under the Financial Investment Services and Capital Markets Act or a corporation that has issued stock certificates or investment certificates of such stocks, etc. under the Act on Real Name Financial Transactions and Confidentiality, as prescribed by Presidential Decree, notwithstanding the provisions of other Acts, such as the Act on Real Name Financial Transactions and Confidentiality. <Amended on Dec. 29, 2020; Dec. 31, 2024>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 114-2 (Penalty tax on application of appraised value or converted acquisition value)
(1) If a resident newly constructs or extends a building (in the case of an extension, limited to cases where the total floor area exceeds 85 square meters) and transfers the building within five years from the date of acquisition or extension, and declares the appraised value or the converted acquisition value of the building under Article 97(1)1b as its acquisition value, an amount equal to 5/100 of the appraised value (in the case of an extension, limited to the extended portion) or the converted acquisition value (in the case of an extension, limited to the extended portion) of the building shall be added to the final amount of tax on capital gains?determined under Article 92(3)2. <Amended on Dec. 31, 2019; Dec. 31, 2023>
(2) Paragraph (1) shall also apply where there is no capital gains tax amount calculated under Article 92(3)1. <Amended on Dec. 31, 2023>
[This Article Added on Dec. 19, 2017]
[Title Amended on Dec. 31, 2019]
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Article 115 (Obligation to keep and maintain books for stocks, etc. and penalty tax for failure to keep adequate books and records)
(1) A corporation (including small and medium enterprises) shall keep and maintain the details of trading of stocks, etc. transferred by a major shareholder of such corporation in books by each date of transaction and by each type of item, as prescribed by Presidential Decree, and maintain documentary evidence therefor, etc.; provided, if an investment trader or an investment broker under the Financial Investment Services and Capital Markets Act maintains specifications of trading, it shall be deemed that books are kept and maintained.
(2) Where a corporation fails to keep records of, or omits records of, details of trading, etc. on stocks, etc. transferred by a majority stockholder of such corporation under paragraph (1), the amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax amount by the ratio of the amount of income not recorded or omitted to the amount of capital gains (hereafter referred to as "penalty tax for failure to keep adequate books and records" in this Article) shall be added to the calculated tax; provided, where there is no calculated tax amount, an amount equivalent to 7/10,000 of the amount of such trading shall be imposed as penalty tax for failure to keep adequate books and records.
[This Article Added on Dec. 31, 2024]
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Article 115-2 (Submission of statement of changes in the list of beneficiaries)
The trustee of a trust shall prepare and maintain a statement of changes in the list of beneficiaries as prescribed by Presidential Decree, when a trust is established for a trust beneficiary interest under Article 94(1)6 or when changes occur in the beneficiaries due to the transfer, etc. of the beneficiary interest, and shall submit the statement of changes in the list of beneficiaries to the head of the tax office with jurisdiction over the place for tax payment from May 1 to May 31 (in the case of a trustee of trust property subject to corporate tax, this refers to the reporting period specified in Article 60 of the Corporate Tax Act) of the year following the taxable period in which the trust establishment or the beneficiary changes occur.
[This Article Added on Dec. 29, 2020]
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Article 116 (Collection of capital gains tax)
(1) Where a resident fails to pay all or part of the tax payable as capital gains tax in the relevant taxable period pursuant to Article 111, the head of a tax office having jurisdiction over the place for tax payment shall collect the unpaid capital gains tax in accordance with the National Tax Collection Act. The same shall also apply to cases of the tax payable by a preliminary return under Article 106. <Amended on Jan. 1, 2013>
(2) Where the head of a tax office having jurisdiction over the place for tax payment determines or corrects the tax base and tax amount of capital gains in accordance with Article 114, if the total amount of tax determined on capital gains under Article 92(3)3 exceeds the sum of the following amounts, he or she shall collect the excess tax amount (hereinafter referred to as "additional tax payable") within 30 days from the date he or she notifies the relevant resident of such excess tax amount: <Amended on Dec. 31, 2018; Dec. 31, 2023>
1. Tax paid by preliminary return pursuant to Article 106, and the tax paid by final return pursuant to Article 111;
2. The amount of tax collected pursuant to paragraph (1);
3. Tax occasionally imposed pursuant to Articles 82 and 118;
4. The amount of tax withheld pursuant to Article 156(1)5.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 117 (Refund of capital gains tax)
If the sum of the amount under each subparagraph of Article 116(2) by taxable period exceeds the total final tax on capital gains pursuant to Article 92(3)3, the head of a tax office having jurisdiction over the place for tax payment shall refund such excess tax or appropriate it for other national taxes and forced collection charges. <Amended on Dec. 29, 2020; Dec. 31, 2023>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 118 (Provisions applicable mutatis mutandis)
(1) Articles 24, 27, 33, 39, 43, 44, 46, 74, 75, and 82 shall apply mutatis mutandis to capital gains tax. <Amended on Dec. 31, 2024>
(2) Articles 118-2 through 118-4 and 118-6 shall apply mutatis mutandis to the calculation of capital gains tax on the following income: <Added on Dec. 31, 2024>
1. Income arising from the transfer of assets under Article 94(1)3c;
2. Income arising from the transfer of derivatives traded in the overseas derivatives market under Article 5(2)2 of the Financial Investment Services and Capital Markets Act, among the income under Article 94(1)5.
[This Article Wholly Amended on Dec. 29, 2020]
SECTION 10 Capital Gains Tax on Transfer of Overseas Assets
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Article 118-2 (Scope of capital gains from overseas assets)
Capital gains from transferring overseas assets of a resident (limited to the persons who have had a domicile or a place of residence in the Republic of Korea for at least five consecutive years until the date of transfer of the relevant assets) shall be any of the following incomes generated from transferring overseas assets during the relevant taxable period; provided, a gain on foreign exchange shall be excluded from the scope of capital gains, where any of the following income is an income generated from transferring an asset acquired with a loan borrowed in a foreign currency from abroad and includes a gain on foreign exchange from the loan in the foreign currency due to the fluctuation of foreign exchange rates: <Amended on Dec. 27, 2010; Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016>
1. Income generated from transferring buildings or land;
2. Income generated from transferring any of the following rights or interests in real estate:
a. A right to acquire real estate (including a right to acquire a building and land appurtenant thereto upon completion of the building);
b. Superficies;
c. A leasehold interest on a deposit basis and a right to lease real estate;
3. Deleted; <Dec. 31, 2019>
4. Deleted; <Dec. 19, 2017>
5. Income generated from transferring other assets specified by Presidential Decree, such as other assets under Article 94(1)4.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 118-3 (Value of transfer of overseas assets)
(1) The value of transfer of assets under Article 118-2 (hereafter referred to as "overseas assets" in this Section) shall be the actual transaction value of such assets at the time of transfer; provided, when it is impossible to confirm the actual transaction value, the transfer value shall be based on the market price reflecting the current status of the country where assets are located at the time of transfer, but when it is difficult to assess the market price, the transfer value shall be assessed pursuant to the method prescribed by Presidential Decree, taking into account the type and size of such assets and the circumstances at the time of the transaction.
(2) Matters concerning the assessment of the market price under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 118-4 (Calculation of necessary expenses of capital gains from overseas assets)
(1) In the calculation of gains on transfer of overseas assets, necessary expenses deductible from the transfer value shall be the sum of the following amounts:
1. The acquisition value:
The actual transaction value disbursed for the acquisition of the relevant assets; provided, when it is impracticable to confirm the actual transaction value at the time of acquisition, the acquisition value shall be based on the market price reflecting the current status of the country where transferred assets are located at the time of acquisition, but when it is difficult to assess the market price, the acquisition value shall be assessed according to the method prescribed by Presidential Decree, taking into account the type and size of such assets and the circumstances at the time of the transaction;
2. Capital expenditure prescribed by Presidential Decree;
3. Transfer cost prescribed by Presidential Decree.
(2) Matters necessary to calculate necessary expenses, such as foreign exchange of gains on transfer, the actual transaction value disbursed for acquisition, the assessment of the market price, etc. under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 118-5 (Tax rate of capital gains from overseas assets)
(1) The amount of income tax on capital gains generated from overseas assets shall be calculated by applying the tax rates set forth in Article 55(1) to the tax base of capital gains for the relevant taxable period: <Amended on Dec. 23, 2014; Dec. 31, 2019>
1. Deleted; <Dec. 31, 2019>
2. Deleted; <Dec. 31, 2019>
3. Deleted. <Dec. 19, 2017>
(2) Article 104(4) shall apply mutatis mutandis to adjusting the tax rates under paragraph (1). <Amended on Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2019>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 118-6 (Credit for foreign taxes paid on capital gains from overseas assets)
(1) Where a foreign country imposes capital gains tax on overseas assets, and a taxpayer has paid or is to pay capital gains tax for transfer of overseas assets prescribed by Presidential Decree on such capital gains (hereafter referred to as "capital gains tax on overseas assets" in this paragraph), the taxpayer may choose to apply one of the following methods: <Amended on Dec. 31, 2019>
1. Credit method for foreign taxes paid: Deducting the amount of capital gains on overseas assets from the calculated capital gains tax amount for the relevant taxable period, up to the limit calculated according to the following formula:
┌──────────────────────┐
│ │
│ Deduction limit amount = A × B │
│ ─────────────── │
│ C │
│ │
│ A: Capital gains on overseas assets for the relevant taxable period calculated under Article 118-5 │
│ Calculated tax amount │
│ B: Amount of capital gains on the relevant overseas assets │
│ C: Amount of capital gains on overseas assets in the relevant taxable period │
└──────────────────────┘
2. Inclusion method for foreign taxes paid in necessary expenses: Including capital gains tax on overseas assets paid or payable on capital gains from transfer of overseas assets in necessary expenses in the relevant taxable period.
(2) Matters necessary for tax credit and inclusion in necessary expenses under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 118-7 (Basic deduction for capital gains from overseas assets)
(1) For a resident with capital gains from the transfer of overseas assets, 2,500,000 won a year shall be deducted from capital gains for the relevant taxable period. <Amended on Dec. 23, 2014; Dec. 31, 2019>
1. Deleted; <Dec. 31, 2019>
2. Deleted; <Dec. 31, 2019>
3. Deleted. <Dec. 19, 2017>
(2) Where any income is reduced or exempted under this Act, the Act on Restriction on Special cases Concerning Taxation, or other Acts among capital gains tax in the relevant taxable period when applying paragraph (1), such amount shall be deducted from capital gains other than the amount of income reduced or exempted first, and shall be deducted from income from capital gains beginning with the first assets transferred in the relevant taxable period in the order of transfer, among capital gains other than income reduced or exempted.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
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Article 118-8 (Provisions applicable mutatis mutandis for transfer of overseas assets)
`Articles 89, 90, 92, 95, 97(3), 98, 100, 101, 105 through 107, 110 through 112, 114, 114-2, and 115 through 118 shall apply mutatis mutandis to imposing capital gains tax for the transfer of overseas assets; provided, the amount of special deduction for long-term holding under Article 95 shall not be deducted. <Amended on Dec. 27, 2010; Act No. 10900, Jul. 25, 2011; Dec. 23, 2014; Dec. 19, 2017; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2023; Dec. 31, 2024>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2019]
SECTION 11 Special Cases concerning Taxation on Domestic Stocks upon Departure of Residents
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Article 118-9 (Resident's obligation to pay taxes upon departure)
(1) Notwithstanding Article 88(1), a resident who departs from the Republic of Korea while satisfying all of the following requirements (hereinafter referred to as a "person transferring residence abroad") shall be liable to pay income tax on capital gains by deeming the stocks, etc. falling under Article 94(1)3a through c and Article 94(1)4c and d, which are owned as of the date of departure (hereinafter referred to as "stocks, etc. of a person transferring residence abroad"), to have been transferred on the date of departure. <Amended on Dec. 23, 2025>
1. The total period of domicile or residence in the Republic of Korea for 10 years before the date of departure shall be at least 5 years;
2. The person shall be a majority stockholder specified by Presidential Decree, in view of the ratio, total market value, etc. of the stocks, etc. (excluding stocks, etc. falling under Article 94(1)3c) held as at the end of the year immediately preceding the year in which the person leaves the Republic of Korea.
(2) The scope of a person transferring residence abroad, the scope of stocks, etc. of a person transferring residence abroad, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
[This Article Added on Dec. 31, 2024]
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Article 118-10 (Calculation of tax base for stocks, etc. of persons transferring residence abroad)
(1) The transfer value of stocks, etc. of a person transferring residence abroad shall be the market value as of the date of departure; provided, where it is difficult to determine the market value, it shall be determined in accordance with the method prescribed by Presidential Decree in consideration of their scale, transaction conditions, etc. <Amended on Dec. 23, 2025>
(2) Necessary expenses to be deducted from the transfer value under paragraph (1) shall be calculated in accordance with Article 97.
(3) The amount of capital gains shall be the amount obtained by deducting necessary expenses under paragraph (2) from the transfer value under paragraph (1).
(4) The tax base of capital gains shall be calculated by deducting 2,500,000 won per year from the amount of capital gains under paragraph (3).
(5) The tax base of capital gains under paragraph (4) shall be calculated separately from the tax base of global income, retirement income, and capital gains under Article 92(2).
(6) The calculation of the market value as specified in paragraph (1) and other necessary matters shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2024]
[Title Amended on Dec. 23, 2025]
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Article 118-11 (Tax rate and calculated tax amount on stocks, etc. of person transferring residence abroad)
The capital gains tax of a person transferring residence abroad shall be the amount calculated by applying the tax rates under the following subparagraphs to the tax base for capital gains under Article 118-10(4), and such amount shall be the tax amount (hereinafter referred to as the "calculated tax amount" in this Section):
1. Stocks, etc. falling under Article 94(1)3a and b and subparagraph 4c and d of that paragraph:
┌─────────────────┬───────────────────────┐
│ Tax base of capital gains │ Tax rate │
├───────────────────┼─────────────────────┤
│ 300 million won or less │ 20/100 │
├───────────────────┼─────────────────────┤
│ Exceeding 300 million won │ 60 million won + (amount exceeding 300 million won × 25/100) │
└─────────────────┴───────────────────────┘
2. Stocks, etc. provided in Article 94(1)3c:
a. Stocks, etc. of a small and medium enterprise: 10/100 of the tax base for capital gains;
b. Other stocks, etc.: 20/100 of the tax base for capital gains.
[This Article Wholly Amended on Dec. 23, 2025]
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Article 118-12 (Adjusted deduction)
(1) Where a person moving abroad actually transfers his or her stocks, etc. after leaving the Republic of Korea, and the actual transfer price is less than the transfer value under Article 118-10(1), the tax amount calculated by the following formula (hereafter referred to as "adjusted deduction" in this Section) shall be deducted from the calculated tax amount: <Amended on Dec. 23, 2025>
[Transfer value under Article 118-10(1) - Actual transfer price] x Tax rate under Article 118-11.
(2) Matters required for deduction under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2024]
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Article 118-13 (Deduction of foreign tax paid on stocks of persons moving abroad)
(1) If a person moving abroad actually transfers stocks, etc. after departing from the Republic of Korea, and is liable to pay or has paid taxes on the capital gains of such assets, the amount of foreign paid taxes calculated according to the following formula shall be deducted from the calculated tax amount, up to the limit of the adjusted deduction: <Amended on Dec. 23 2025>
Tax amount paid to a foreign government on capital gains in the relevant asset x [transfer value under Article 118-10(1) (actual transfer price in cases falling under Article 118-12(1)) - necessary expenses under Article 118-10(2)]/(actual transfer price - necessary expenses under Article 118-10(2)).
(2) The deduction under paragraph (1) shall not be applicable in any of the following cases: <Amended on Dec. 23, 2025>
1. If a foreign government permits a deduction for foreign taxes paid against the calculated tax amount;
2. Where a foreign government adjusts the acquisition price of stocks, etc. of a person moving abroad to the transfer value under Article 118-10(1).
(3) Matters necessary for deduction under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2024]
[Title Amended on Dec. 23, 2025]
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Article 118-14 (Tax credit for nonresidents' domestic source income)
(1) Where the tax is levied on a nonresident's domestic source income under subparagraph 11 of Article 119 generated from actual transfer of stocks, etc. of a person moving abroad after the person leaves the Republic of Korea, the amount under Article 156(1)7 shall be deducted from the calculated tax amount up to the amount calculated by deducting the adjusted deduction from the calculated tax amount. <Amended on Dec. 23, 2025>
(2) The deduction of tax amount payable to a foreign country under Article 118-13(1) shall not apply where the tax credit under paragraph (1) is awarded.
(3) Matters necessary for deduction under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2024]
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Article 118-15 (Tax return, payment, additional tax on stocks of person moving abroad)
(1) A person moving abroad shall file a return on his or her tax manager of tax payment for capital gains on his or her stocks, etc. and the status of the person's holding of stocks, etc. with the head of the tax office having jurisdiction over the place for tax payment by the day immediately before the date of departure. In such cases, the status of holding of stocks, etc, by the person moving abroad shall be prepared as of the day immediately before the day of filing the return. <Amended on Dec. 23, 2025>
(2) A person transferring residence abroad shall file a return on the tax base of capital gains under Article 118-10(4) within 3 months from the end of the month in which the date of departure falls (within the period for filing a final return on the tax base of capital gains as specified in Article 110(1), if the person has declared a tax manager under paragraph (1)) to the head of the tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree.
(3) When a person moving abroad files a return on the tax base of capital gains under paragraph (2), he or she shall pay the amount calculated by deducting the tax reductions and tax credits under this Act and other tax-related Acts from the calculated tax amount to the tax office having jurisdiction over the place for tax payment, the Bank of Korea, or a post office, as prescribed by Presidential Decree.
(4) Where a person moving abroad fails to file a return on the current status of holding of stocks, etc. the day immediately before the date of departure pursuant to paragraph (1) or files a return thereof by omitting a part of stocks, etc., the amount equivalent to 2/100 of the amount under following classifications shall be added to the calculated amount: <Amended on Dec. 23, 2025>
1. If the person fails to declare the holding status of the stocks, etc. by the day preceding the date of departure: The par value of the stocks, etc. owned by him or her as of the day before the date of departure (in the case of no-par value stocks, the amount calculated by dividing the capital stock of the corporation that has issued the stocks by the total number of stocks issued; hereafter the same shall apply in this Article) or the amount of the investment);
2. Where the holding status of stocks, etc. of a person transferring residence abroad is reported with omissions, the par value or investment amount of the omitted stocks, etc. of the person transferring residence abroad, as of the day immediately preceding the date of filing the report.
(5) A person who intends to be subject to the application of adjusted deduction under Article 118-12(1), deduction of taxes payable to foreign countries under Article 118-13(1) or tax credit for nonresidents' domestic source income under Article 118-14(1) may file an application for correction with the head of the competent tax office, as prescribed by Presidential decree, within two years after the date of actually transferring the stocks, etc. of the person transferring residence abroad. <Added on Dec. 23, 2025>
(6) Except as provided in paragraphs (1) through (5), matters necessary for filing a return on and paying capital gains tax on stocks, etc. of a person moving abroad shall be prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
[This Article Added on Dec. 31, 2024]
[Title Amended on Dec. 23, 2025]
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Article 118-16 (Deferment of payment)
(1) Where a person transferring residence abroad meets the requirements prescribed by Presidential Decree, such as the provision of security for tax payment and the appointment of a manager of tax payment, he or she may file an application for deferring the payment of capital gains tax with the head of the tax office having jurisdiction over the place for tax payment to have the payment of capital gains tax deferred from the date of his or her departure until he or she actually transfers his or her stocks, etc., notwithstanding Article 118-15(3). <Amended on Dec. 23, 2025>
(2) If a person transferring residence abroad who is granted a deferral of tax payment under paragraph (1) fails to transfer his or her stocks, etc. within 5 years from the date of departure (or 10 years in cases specified by Presidential Decree, such as where a person moving abroad studies abroad; hereafter in this Section the same shall apply), he or she shall pay capital gains tax on his or her stocks, etc. within 3 months from the end of the month in which the five-year period from the date of departure ends. <Amended on Dec. 23, 2025>
(3) If a person moving abroad who has tax payment deferred under paragraph (1) transfers his or her stocks, etc., such person shall pay capital gains tax on his or her stocks, etc. within three months from the end of the month in which such stocks, etc. are transferred. <Amended on Dec. 23, 2025>
(4) When a person moving abroad who has tax payment deferred under paragraph (1) pays capital gains tax on his or her stocks, etc. pursuant to paragraph (2) or (3), he or she shall pay an additional amount equivalent to interest for the period of deferment of tax payment, as prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
(5) Matters necessary for deferring the payment of capital gains tax on stocks, etc. of a person moving abroad shall be prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
[This Article Added on Dec. 31, 2024]
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Article 118-17 (Refund upon comeback)
(1) If any of the following events occurs, a person moving abroad (referring to his or her heir in cases falling under subparagraph 3) shall file an application for refunding the tax amount paid under Article 118-15 or for cancelling the tax deferred under Article 118-16 with the head of the tax office having jurisdiction over the place for tax payment within one year from the day the event occurs: <Amended on Dec. 23, 2025>
1. If the person re-enters the Republic of Korea and becomes a resident without transferring the stocks, etc. owned by him or her within 5 years from the date of departure;
2. If the person transfers domestic stocks donates the stocks, etc. owned by him or her as a gift to a resident within 5 years from the date of departure;
3. If the person's heir inherits the stocks, etc. owned by the person within 5 years from the date of departure.
(2) Upon receipt of an application under paragraph (1), the head of the tax office with jurisdiction over the place for tax payment shall refund the amount of tax paid by the person moving abroad or cancel the amount of tax pending payment without delay.
(3) Where the tax paid by a person transferring residence abroad is refunded in cases falling under paragraph (1), the amount added to the calculated tax amount under Article 118-15(4) shall not be refunded.
(4) Where the tax paid by a person transferring residence abroad is refunded in cases falling under paragraph (1)2 or 3, no additional refund of the national tax shall be added to the refund of the national tax, notwithstanding Article 52 of the Framework Act on National Taxes.
[This Article Added on Dec. 31, 2024]
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Article 118-18 (Provisions applicable mutatis mutandis to stocks of persons moving abroad)
(1) Articles 90, 92(3), 102(2), 114, 116, and 117 shall apply mutatis mutandis to capital gains tax on stocks, etc. held by a person moving abroad. <Amended on Dec. 23, 2025>
(2) The levying of capital gains tax on gains on stocks, etc. held by a person moving abroad, and other necessary matters, shall be prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
[This Article Added on Dec. 31, 2024]
[Title Amended on Dec. 23, 2025]
CHAPTER IV TAX LIABILITIES OF NONRESIDENTS
SECTION 1 Common Provisions concerning Calculation of Tax on Nonresidents
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Article 119 (Domestic source income of nonresident)
Domestic source income of a nonresident shall be classified as follows: <Amended on Dec. 27, 2010; Jan. 1, 2012;Jan. 1, 2013; Dec. 15, 2015; Dec. 20, 2016; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2022; Jul. 18, 2023; Dec. 31, 2024>
1. Domestic source interest income: Interest prescribed in Article 16(1) (excluding income under subparagraph 7 of the same paragraph), which is income falling under any of the following items; provided, interest on a loan for an overseas place of business of a resident or a domestic corporation directly borrowed by such overseas place of business shall be excluded:
a. Income received from the State, a local government (including an association of local governments; hereafter the same shall apply in Article 156(1)1a), a resident, a domestic corporation, a domestic place of business of a foreign corporation prescribed in Article 94 of the Corporate Tax Act, or a domestic place of business of a nonresident prescribed in Article 120;
b. Income received from a foreign corporation or a nonresident, which is included in losses or necessary expenses in calculating the amount of income of his or her domestic place of business, substantially in connection with such domestic place of business of the foreign corporation or the nonresident who pays such income;
2. Domestic source dividend income: Any of the following incomes received from a domestic corporation, an organization deemed a corporation, or any other person located in the Republic of Korea:
a. Deleted; <Dec. 31, 2024>
b. Dividend income under Article 17(1) (excluding income under subparagraph 6 of the same paragraph);
c. Deleted; <Dec. 31, 2024>
d. Deleted; <Dec. 31, 2024>
e. Amounts disposed of as dividends under Article 13 or 22 of the Adjustment of International Taxes Act;
3. Domestic source real estate income: Income generated from transfer, lease, or other operation of real estate in the Republic of Korea or a real property right, a mining right, a mining right by lease, a right to develop and use groundwater, a fisheries right, or a right to gather earth, sand, and stones acquired in the Republic of Korea; provided, domestic source capital gains on real estate, etc. under subparagraph 9 shall be excluded therefrom;
4. Domestic source lease income from leasing ships, etc.: Income generated from lease of a vessel, an airplane, a registered automobile, construction machine, or an industrial, commercial, or scientific machine, equipment, apparatus, and other tools and instruments prescribed by Presidential Decree to a resident, a domestic corporation, or a domestic place of business of a foreign corporation prescribed in Article 94 of the Corporate Tax Act, or a domestic place of business of a nonresident prescribed in Article 120;
5. Domestic-source business income: Income prescribed by Presidential Decree, which is generated from business conducted by a nonresident (including income taxable as domestic source business income according to tax treaties); provided, domestic source personal services income under subparagraph 6 shall be excluded therefrom;
6. Domestic source personal services income: Income generated by providing personal services specified by Presidential Decree in the Republic of Korea (including income generated by providing any of the services specified by Presidential Decree, among personal services provided in a foreign country, which is deemed generated in the Republic of Korea under a tax treaty). In such cases, when the person receiving such personal services bears the expenses specified by Presidential Decree, such as an air fare, in connection with personal services, the income means the amount from which such expenses are excluded;
7. Domestic source earned income: Income received in consideration of labor provided in the Republic of Korea and labor prescribed by Presidential Decree;
8. Domestic source retirement income: Retirement income received in consideration of labor provided in the Republic of Korea;
8-2. Domestic source pension income: Pension income received in the Republic of Korea pursuant to each subparagraph of Article 20-3(1);
9. Domestic source capital gains on real estate, etc.: Income generated by transferring any assets or rights falling under any of the following subparagraphs, which are located in the Republic of Korea; provided, this shall only apply where assets or rights that generate such income are located in the Republic of Korea:
a. Assets or rights under Article 94(1)1, 2, and 4a and b;
b. Unlisted stocks or equity shares (including deposit certificates issued on the basis of stocks or equity shares and preemptive rights to new stocks; hereafter the same shall apply in this Chapter) of a domestic corporation (hereafter referred to as "real estate stocks, etc."), where the sum of the following values is at least 50/100 of the total assets of the corporation as at the beginning of the business year in which such assets are transferred. In such cases, regarding the interpretation and application of a tax treaty, real estate stocks, etc. acknowledged as subject to taxation in the Republic of Korea under a mutual agreement with the contracting state of the tax treaty are also included in the real estate stocks, etc. defined in the former part:
i. The value of the assets under Article 94(1)1 and 2;
2) The value computed by multiplying the value of stocks owned by another corporation excessively owning real estate which is held by the domestic corporation, by the ratio of real estate owned by the other corporation. In such cases, the methods for determining whether the other corporation excessively owns real estate and for computing the ratio of real estate owned shall be prescribed by Presidential Decree;
10. Domestic source royalty income: Income generated from transfer of the consideration, right, etc., where any of the following rights, assets, or information (hereafter referred to as "rights, etc." in this subparagraph) are used in the Republic of Korea, or the consideration for the rights, etc. is paid in the Republic of Korea. In such cases, income generated from leasing industrial, commercial, or scientific machinery, equipment, apparatuses, etc. as mentioned in subparagraph 4 shall be included if the tax treaty classifies it as rental income:
a. The copyright of any scientific or artistic work (including films of motion pictures), patent right, trademark right, designs, models, drawings, secret formula or processes, films and tapes for radio or television broadcast, and other assets or rights similar thereto;
b. Information or know-how on industrial, commercial, or scientific knowledge and experience;
c. Other similar property or rights that are included in the definition of royalties in a tax treaty that provides for the eligibility of domestic source income based on the place of use (hereafter referred to in this Article as "place of use-based tax treaty") [referring to those cases where patent rights, utility model rights, trademark rights, design rights, and other rights that require registration for their exercise (hereafter referred to in this Article as "patent rights, etc.") are not registered in the Republic of Korea, but are actually practiced or used in the Republic of Korea. This includes manufacturing methods, technologies, or information contained therein relates to manufacturing or production in the Republic of Korea];
11. Domestic source capital gains on securities: Income prescribed by Presidential Decree, generated from transferring any of the following stocks, equity interests (including real estate stocks, etc. listed on the securities market), or other securities (including securities under Article 4 of the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply):
a. Stocks, equity interests, or other securities issued by a domestic corporation;
b. Stocks or equity interests issued by a foreign corporation (only applicable to those listed on the securities market);
c. Other securities issued by a domestic place of business of a foreign corporation;
12. Domestic source other income: Income falling under any of the following, other than income under subparagraphs 1 through 8, 8-2, and 9:
a. Insurance money, an indemnity, or damages received in connection with real property or other assets located in the Republic of Korea and business conducted in the Republic of Korea;
b. Income prescribed by Presidential Decree, as a penalty or an indemnity paid in the Republic of Korea;
c. Prize money, a reward, or a prize given in the Republic of Korea and other income similar thereto; provided, the prize money and supplementary prize prescribed in subparagraph 5c of Article 12 shall be excluded;
d. Income generated from buried property discovered in the Republic of Korea;
e. Income generated from the transfer of a license, permit, or other rights established by similar administrative dispositions under the Korean laws and regulations, or income generated from the transfer of domestic assets other than real estate;
f. Prize money and other valuables received by winning a lottery, a gift coupon, or a lottery ticket issued in the Republic of Korea, and refund received by a purchaser of a horse racing ticket, a winner wager ticket, a bullfighting match wager ticket, or a sports promotion wager ticket;
g. Prize money or valuables received by using slot machines, etc.;
h. The amount treated as other income pursuant to Article 67 of the Corporate Tax Act;
i. Income generated from increase in values of stocks or equity interests of a domestic corporation due to capital transaction prescribed by Presidential Decree, which are held by related nonresidents prescribed by Presidential Decree (hereafter referred to as "foreign related persons" in Article 156);
j. Income under Article 21(1)21, as a receipt other than pension received from the pension account in the Republic of Korea;
k. Damages, compensation, settlement funds, lost profits, or other similar income paid in the Republic of Korea for damages resulting from the infringement of patent rights, etc. owned by a resident of the contracting state of a place of use-based tax treaty, but not registered in the Republic of Korea. In such casse, it is limited to income paid in connection with the actual practice or use in the Republic of Korea wherein the manufacturing methods, technologies, information, etc. contained in the patent rights, etc. are related to manufacturing or production in the Republic of Korea;
l. Virtual asset income under Article 21(1)27 [If a nonresident withdraws virtual assets custodied and managed by a virtual asset business entity or similar business entity as defined in subparagraph 2 of Article 2 of the Act on the Protection of Users of Virtual Assets (hereinafter referred to as "virtual asset business entity, etc."), it shall include the amount calculated as prescribed by Presidential Decree by considering the time of withdrawal as the point of transfer];
m. Other than the provisions under items a through l, income (where the amount received by redemption of foreign currency bonds issued by the State or financial institutions, etc. incorporated under special Acts exceeds the issuance value of such foreign currency bonds, such difference shall not be included) from economic benefits, received in connection with business conducted in the Republic of Korea, personal services provided in the Republic of Korea, or assets located in the Republic of Korea, or as income similar thereto, income prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 119-2 (Special cases concerning beneficial owner in foreign investment vehicle)
(1) Where a nonresident is paid any domestic source income under Article 119 through a foreign investment vehicle, such nonresident shall be deemed the beneficial owner of such domestic source income (referring to a person who substantially has ownership of that domestic source income, such as having a right to dispose of that income by bearing legal or economic risk with respect to that domestic source income; hereinafter the same shall apply); provided, a foreign investment vehicle falls under any of the following subparagraphs (limited to cases where, in case of a foreign investment vehicle which is a non-juristic entity other than an entity deemed a corporation under Article 2(3), it falls under subparagraph 2 or of 3 of this paragraph) shall be deemed the beneficial owner of the domestic source income: <Amended on Dec. 8, 2021>
1. Where the foreign investment vehicle meets all of the following requirements:
a. It shall bear an obligation to pay taxes in the country of its establishment under a tax treaty;
b. It shall qualify for any non-taxation, tax exemption, or reduced tax rate granted under a tax treaty on domestic source income (referring to the maximum tax rate that may be imposed on a resident or a corporation of the contracting state under the tax treaty; hereinafter the same shall apply);
2. Where a tax treaty provides that a foreign investment vehicle that does not fall under subparagraph 1 shall be treated as a beneficial owner of domestic source income, and the vehicle qualifies for a non-taxation, tax exemption, or reduced tax rate under the tax treaty on domestic source income;
3. Where the foreign investment vehicle not falling under subparagraph 1 or 2 can not confirm investors in it (only limited to the portion with respect to which investors are not confirmed where it only confirms some of two or more investors, if any).
(2) Where a foreign investment vehicle is deemed the beneficial owner of domestic source income as per paragraph (1)3, any non-taxation, tax exemption, or reduced tax rate granted under a tax treaty shall not apply to such foreign investment vehicle. <Amended on Dec. 29, 2020; Dec. 8, 2021>
[This Article Added on Dec. 31, 2018]
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Article 119-3 (Special cases concerning taxation on interest and capital gains of state bonds of nonresident)
(1) Notwithstanding Article 3(2), no income tax shall be imposed on the following incomes falling within the category of non-resident income subject to withholding under Article 156(1):
1. Income derived from State bonds issued under Article 5(1) of the State Bond Act, monetary stabilization bonds as defined in the Bank of Korea Monetary Stabilization Bond Act, and bonds prescribed by Presidential Decree (hereafter referred to as "State bonds, etc." in this Article) that falls within the category of domestic source interest income as described in subparagraph 1 of Article 119;
2. Income derived from the transfer of State bonds, etc., that falls within the category of domestic source capital gains on securities as described in subparagraph 11 of Article 119.
(2) State bonds, etc. not subject to income tax under paragraph (1) shall encompass State bonds, etc. acquired, held, or transferred through foreign financial companies, etc. (hereinafter referred to as "qualified foreign financial companies, etc.") meeting the requirements set forth in Presidential Decree, and approved by the Commissioner of the National Tax Service. In such cases, necessary matters regarding the compliance of qualified foreign financial companies, etc., as well as standards, procedures, etc. for the approval and revocation thereof shall be prescribed by Presidential Decree.
(3) Where a non-resident receives income under any subparagraph of paragraph (1) through an overseas investment scheme, the relevant overseas investment scheme shall be deemed to be the beneficial owner of the income referred to in each subparagraph of paragraph (1), notwithstanding Article 119-2(1). <Added on Dec. 31, 2024>
(4) A non-resident (including a foreign investment scheme deemed a beneficial owner under paragraph (3); hereafter the same shall apply in this Article) or qualified foreign financial companies, etc. that intend to be subject to non-taxation under paragraph (1) shall file an application for non-taxation with the head of the competent tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended on Dec. 31, 2024>
(5) Article 127 shall not apply to the income referred to in the subparagraphs of paragraph (1) that a resident receives through a foreign investment vehicle, and the relevant resident shall file a return on and pay the tax directly, as prescribed by Presidential Decree: <Amended on Dec. 31, 2024>
1. Deleted; <Dec. 31, 2024>
2. Deleted. <Dec. 31, 2024>
(6) If a non-resident or a qualified foreign financial company, etc. which is not subject to non-taxation under paragraph (1) intends to be applied non-taxation, the non-resident, qualified foreign financial company, etc. or the person who pays income under the subparagraphs of paragraph (1) may file a request for rectification with the head of the competent tax office having jurisdiction over the place of tax payment. <Added on Dec. 31, 2024>
(7) Article 156-2(5) through (7) shall apply mutatis mutandis to the deadline, methods, procedures, etc. of a request for rectification under paragraph (6). In such cases, in the main clause of Article 156-2(5), "non-taxation or tax exemption has not been applied under paragraph (3)" shall be construed as "non-taxation has not been applied under Article 119-3(1)"; "a beneficial owner ... intends to be eligible for non-taxation or tax exemption" as "a non-resident or qualified financial company, etc. ... intends to be eligible for non-taxation"; and "the beneficial owner or income payer ... under paragraph (3)" as "the non-resident, qualified foreign financial company, etc., or a person who pays income under each subparagraph of paragraph (1) ... under Article 156(1)". <Added on Dec. 31, 2024>
[This Article Added on Dec. 31, 2022]
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Article 120 (Domestic place of business of nonresident)
(1) If a nonresident has a fixed place to carry out all or part of the business in the Republic of Korea, he or she shall be deemed to have a domestic place of business. <Amended on Jan. 1, 2013>
(2) Any domestic place of business prescribed in paragraph (1) shall be deemed to include any of the following places:
1. A branch, office or place of business;
2. A store or other fixed sales places;
3. A place of work, factory or warehouse;
4. A place of construction, site of construction, assembly or installation work, or a place where supervision is conducted in relation thereto, which continues to exist exceeding six months;
5. Any of the following places where services are provided by employees:
a. A place where services are carried out for a period exceeding six months in total among 12 months during which services are provided continuously;
b. A place where similar kinds of services are carried out continuously and repeatedly for two or more years, for a period not exceeding six months in total among 12 months during which services are provided continuously;
6. A mine, a quarry or a place where any submarine natural resources and other natural resources are probed or gathered (including places located on the sea bed and subsoil in the submarine area contiguous to the coast of the Republic of Korea where the Republic of Korea exercises its sovereignty outside the territorial waters under international laws).
(3) Where, even though having no fixed place under paragraph (1), a nonresident conducts business by employing a person falling under any of the following subparagraphs, or a person equivalent thereto prescribed by Presidential Decree, such resident shall be deemed to have a domestic place of business at the seat of the place of business of such person (referring to a domicile where there is no place of business, and the place of residence where there is no domicile): <Amended on, Dec. 31, 2018>
1. A person who has an authority to enter into a contract falling under any of the following items (hereinafter referred to as "contract, etc. in the name of a nonresident") on behalf of such nonresident and repeatedly exercises such authority:
a. A contract in the name of that nonresident;
b. A contract for transferring the ownership of any asset owned by that nonresident or licensing a right to uses any asset which that nonresident has a right to own or use;
c. A contract for providing services of that nonresident;
2. A person who has no authority to enter into a contract in the name of such nonresident on behalf of that non-resident, but repeatedly plays an important role (limited to cases where that nonresident enters into a contract without changing an important matters of such contract) in the course of entering into a contract.
(4) Where a place falling under any of the following subparagraphs (hereinafter referred to as "place for specific activities" in this Article) is used for activities of a preliminary or auxiliary nature for conducting the business of the nonresident, such place shall not be included in the domestic places of business under paragraph (1): <Amended on, Dec. 31, 2018; Dec. 31, 2019>
1. A fixed place used by a nonresident only for purchasing assets;
2. A fixed place used by a nonresident only for storing or keeping any assets not for sale;
3. A fixed place used by a nonresident only for any advertisement, publicity, collection and furnishing of information, market survey, and other activities similar thereto;
4. A fixed place used by a nonresident only for having another person process his or her assets.
(5) Notwithstanding paragraph (4), where a place for specific activities falls under any of the following, such place shall be included in the domestic places of business under paragraph (1): <Added on, Dec. 31, 2018; Dec. 31, 2019>
1. Where a nonresident or related person prescribed by Presidential Decree (hereinafter referred to as "related person" in this paragraph) conducts business in the same place as the place for specific activities or at any other place in the Republic of Korea, and meets all the following requirements:
a. A domestic place of business of the relevant nonresident or the related person shall be located in the same place as the place for specific activities or at any other place in the Republic of Korea;
b. The activities conducted in the place for specific activities and those conducted at the domestic place of business under item a shall be mutually complementary;
2. Where a nonresident or a related person conduct mutually complementary activities in the same place as the place for specific activities or at any other place in the Republic of Korea, and the activities in general combined with the respective activities shall not fall under activities of a preliminary or auxiliary nature, considering the business activities of the non-resident or the related person.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 121 (Method of taxation on nonresident)
(1) Income tax on a nonresident shall be calculated by separating cases where it is imposed by aggregating relevant domestic source income, from cases where it is imposed by separating such domestic source income. <Amended on Jan. 1, 2013>
(2) For a nonresident having a domestic place of business and a nonresident with any domestic source real estate income under subparagraph 3 of Article 119, tax shall be imposed by aggregating income under subparagraphs 1 through 7, 8-2 and 10 through 12 of Article 119 (excluding income to be withheld pursuant to Articles 156(1) and 156-3 through 156-6, and for a nonresident with domestic source retirement income under subparagraph 8 of Article 119 and domestic source capital gains on real estate under subparagraph 9 of Article 119, income tax shall be classified and imposed in the same method as that for a resident; provided, Article 89(1)3 and 4, and the proviso to the part other than Appendix in Article 95(2) shall not apply where tax is imposed on a nonresident prescribed by Presidential Decree with domestic source capital gains on real estate under subparagraph 9 of Article 119. <Amended on Jan. 1, 2012;Jan. 1, 2013; Dec. 31, 2018; Dec. 31, 2019>
(3) For a nonresident having no domestic place of business, income tax shall be imposed separately by each type of income under each subparagraph of Article 119 (excluding subparagraphs 8 and 9). <Amended on Jan. 1, 2013>
(4) For domestic income of a nonresident having a domestic place of business which is to be withheld pursuant to Articles 156(1) and 156-3 through 156-5, income tax shall be imposed separately by each type of income under each subparagraph (excluding subparagraphs 8 and 9) of Article 119. <Amended on Jan. 1, 2012;Jan. 1, 2013>
(5) In cases of imposing taxes pursuant to paragraphs (3) and (4) where a nonresident with domestic source personal services income under subparagraph 6 of Article 119 among income subject to withholding files a final return on the tax base of global income by applying mutatis mutandis Article 70, income tax may be imposed on the aggregate of income under each subparagraph of Article 119 (excluding subparagraphs 8 and 9). <Amended on Jan. 1, 2013; Dec. 31, 2018>
(6) In cases of a joint business where the nonresidents having a domestic place of business jointly manage their business and share the profit and loss thereof, Article 87 shall apply mutatis mutandis concerning distribution, etc. of withheld tax amount. <Added on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 2 Global Taxation on Nonresident
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Article 122 (Calculation of tax base and tax amount in cases of global taxation on nonresident)
(1) The provisions concerning the calculation of the tax base and tax amount of income tax of a resident in this Act shall apply mutatis mutandis to the calculation of the tax base and the amount of the tax on income of a nonresident under Article 121(2) or (5); provided, the deduction for any person other than the nonresident himself or herself, among the personal deductions under Article 51-2(3), the special deduction under Article 52, the tax credit for children under Article 59-2, and the special tax credit under Article 59-4 shall not apply to a nonresident. <Amended on Jan. 1, 2012;Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2018>
(2) Matters necessary for methods for calculating a tax base and an tax amount in cases of global taxation, such as calculation of necessary expenses and of interest income or dividend income when applying paragraph (1) shall be prescribed by Presidential Decree. <Added on, Dec. 31, 2018>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 123 Deleted. <Jan. 1, 2013>
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Article 124 (Return and payment by nonresident)
(1) The provisions on a return and payment by a resident in this Act shall apply mutatis mutandis to a return and payment (including interim prepayment) by a nonresident whose tax base and amount of income tax are calculated pursuant to Article 122; provided, where the amount of income to be withheld pursuant to Articles 156(7) is included in the tax base of a nonresident pursuant to Article 122 when Article 76 is applied mutatis mutandis, the amount of withholding tax shall be deemed an amount of tax deducted pursuant to Article 76(3)4. <Amended on Jan. 1, 2012;Jan. 1, 2013; Dec. 8, 2021>
(2) If a nonresident member of a non-corporate organization other than an organization deemed to be a corporation, which bears tax liability for each member under the proviso, with the exception of the subparagraphs, of Article 2(3) or subparagraph 1 of the same paragraph (hereafter referred to as "nonresident member" in this paragraph), files a final return on the tax base of global income for his or her domestic source income (limited to cases where the domestic source income of the nonresident member is only derived from income earned as a member of the organization) in accordance with Article 121(5), and if all of the following requirements are met, one resident member of the organization (hereafter referred to as "representative declarant" in this paragraph) may file a final return on the tax base of global income of the nonresident member in a consolidated manner, on behalf of the nonresident member who has given consent under subparagraph 1, as prescribed by Presidential Decree: <Added on Dec. 8, 2021>
1. All or some of the nonresident members consent to the representative declarant filing their tax base of global income on their behalf;
2. The nonresident member provides the representative declarant with a taxpayer identification number as defined in Article 36(7) of the Adjustment of International Taxes Act granted by the country where the nonresident member is a resident.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 125 (Determination and collection of tax base and tax for nonresident)
The provisions on the determination, rectification, collection and refund of income tax for a resident in this Act shall apply mutatis mutandis to the determination, rectification, collection and refund of the total domestic source income where tax is levied on the aggregate of domestic source income of a nonresident. In such cases, the amount of income withheld pursuant to Article 156(7) is included in the tax base of a nonresident pursuant to Article 122 when Article 76 is applied mutatis mutandis, such amount of withholding tax shall be deemed an amount of tax deducted pursuant to Article 76(3)4. <Amended on Jan. 1, 2012;Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 3 Separate Taxation on Nonresident
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Article 126 (Calculation of tax base and tax amount in cases of separate taxation on nonresident)
(1) The tax base for the domestic source income (excluding domestic source earned income under subparagraph 7 of Article 119 and domestic source pension income under subparagraph 8-2 of Article 119) of a nonresident under Article 121(3) and (4) shall be calculated based on the amount of each corresponding domestic source income received by the nonresident; provided, the tax base on the following income may be calculated based on the amount obtained by deducting necessary expenses, etc. from the amount of such income, as prescribed in the same subparagraphs: <Amended on Jan. 1, 2013; Dec. 31, 2018; Dec. 29, 2020>
1. As for domestic source capital gains on securities under subparagraph 11 of Article 119, the amount calculated by deducting the acquisition value and transfer expenses of the relevant securities verified as prescribed by Presidential Decree, from the amount of such income;
2. As for prize money, supplementary prize, etc. prescribed by Presidential Decree among domestic source other income under subparagraph 12 of Article 119, the amount calculated by deducting the amount prescribed by Presidential Decree from the amount of such income;
3. As for virtual asset income under subparagraph 12l of Article 119, the amount calculated by deducting the necessary expenses prescribed by Presidential Decree from the amount of income (in the case of a nonresident withdrawing virtual assets custodied and managed by a virtual asset business entity, etc., this refers to the amount prescribed by Presidential Decree that corresponds to the market value of the virtual assets at the time of withdrawal).
(2) The amount of tax on any domestic source income under paragraph (1) shall be the amount calculated by multiplying the tax base prescribed in the same paragraph by the tax rate under the subparagraphs of Article 156(1).
(3) Where a nonresident subject to the application of Article 121(3) or (4) has any income provided for in each subparagraph of Article 59-5(1), the income tax on the said income shall be deducted or exempted even where a request for deduction or exemption is not made. <Amended on Jan. 1, 2013; Jan. 1, 2014>
(4) With respect to withholding taxes under Articles 156 and 156-3 through 156-6, Article 85(3) and subparagraph 1 of Article 86 shall apply mutatis mutandis. <Added on Jan. 1, 2013>
(5) With respect to the calculation, report, payment, determination, rectification, collection, and refund of the tax base and tax amount on domestic source earned income under subparagraph 7 of Article 119 and domestic source pension income under subparagraph 8-2 of Article 119, among the domestic source income of a nonresident subject to the application of Article 121(3) or (4), the provisions concerning the calculation, etc. of the tax base and tax amount on the income tax of a resident under this Act shall apply mutatis mutandis thereto; provided, the deduction for any person other than the nonresident him or herself, among the personal deductions under Article 51(3), the special income deduction under Article 52, the tax credit for children under Article 59-2, and the special tax credit under Article 59-4 shall not be permitted, and Article 73(1) shall apply mutatis mutandis to a nonresident who paid income tax by deducting the withholding tax under Article 156-5. <Added on Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2018>
(6) Notwithstanding paragraph (1), where domestic source capital gains on securities under subparagraph 11 of Article 119 of a nonresident with no domestic place of business meets all the following requirements, the arm's length price prescribed by Presidential Decree (hereafter referred to as "arm's length price" in this paragraph) shall be the amount of such income: <Added on Jan. 1, 2013; Dec. 31, 2018>
1. The relevant transaction shall be made between a nonresident with no domestic place of business and a related nonresident (including a foreign corporation) prescribed by Presidential Decree;
2. The price of the relevant transaction under subparagraph 1 shall be less than the arm's length price, which is prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2009]
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Article 126-2 (Special cases concerning return and payment of income from transfer of securities of nonresident)
(1) Where a nonresident with no domestic place of business meets the taxation requirements prescribed in a tax treaty by transferring stocks or equity interests of the same domestic corporation on two or more occasions in the same taxable period of business (referring to the taxable period of business of the domestic corporation that issued the relevant stocks or equity interests), he or she shall file a tax return and pay the amount equivalent to the amount of a withholding tax on income which has not been withheld at the time of transfer to the head of a tax office having jurisdiction over the place for tax payment within three months from the end of the business year to which the date of transfer belongs, as prescribed by Presidential Decree.
(2) Paragraph (1) shall also apply mutatis mutandis to income of a nonresident with a domestic place of business not substantially related to or not belonging to his or her domestic place of business as income which has not been withheld at the time of his or her transfer.
(3) Where a nonresident with no domestic place of business transfers the stocks, equity interests, or other securities prescribed by Presidential Decree (hereafter referred to as "stocks, etc." in this paragraph) to any other nonresident or foreign corporation with no domestic place of business, and if prescribed by Presidential Decree, he or she shall report and pay the amount calculated by multiplying the amount of income generated from such transfer by the ratio under Article 156(1)7 to the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree, until the 10th day of the second month following the month to which the date of receipt of such amount belongs; provided, this shall not apply where a person who pays income from transfer of stocks, etc. has paid the income tax withheld from domestic source income, such as stocks, etc. of the relevant nonresident pursuant to Article 156. <Amended on, Dec. 31, 2018>
(4) Where a nonresident fails to file a return or make a payment pursuant to paragraphs (1) through (3), under-reports below the tax base, or pays less than the tax payable, the head of a tax office having jurisdiction over the place for tax payment shall collect the relevant tax by applying Article 80 mutatis mutandis.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 4 Deleted.
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Article 126-3 Deleted. <Dec. 31, 2004>
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Article 126-4 Deleted. <Dec. 31, 2024>
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Article 126-5 Deleted. <Dec. 31, 2004>
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Article 126-6 Deleted. <Dec. 31, 2004>
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Article 126-7 Deleted. <Dec. 31, 2004>
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Article 126-8 Deleted. <Dec. 31, 2004>
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Article 126-9 Deleted. <Dec. 31, 2004>
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Article 126-10 Deleted. <Dec. 31, 2004>
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Article 126-11 Deleted. <Dec. 31, 2004>
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Article 126-12 Deleted. <Dec. 31, 2004>
CHAPTER V WITHHOLDING OF TAXES
SECTION 1 Withholding of Taxes
Subsection 1 Withholding Agent and Collection/Payment
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Article 127 (Liability for withholding taxes)
(1) Any person who pays any of the following incomes (limited to persons specified by Presidential Decree, such as business entities, in cases of a person who pays income specified in subparagraph 3) to a resident or a nonresident in the Republic of Korea, shall withhold income tax from such resident or nonresident pursuant to this Section: <Amended on Dec. 31, 2009; ;Dec. 27, 2010; Dec. 15, 2015; Dec. 29, 2020; Dec. 31, 2024>
1. Interest income;
2. Dividend income;
3. Business income prescribed by Presidential Decree (hereinafter referred to as "business income subject to withholding");
4. Wage and salary income; provided, the following income shall be excluded:
a. Wage and salary income received from a foreign institution or the UN forces (excluding US forces) stationed in the Republic of Korea;
b. Wage and salary income received from a nonresident abroad or a foreign corporation (excluding a branch or a sales office thereof in the Republic of Korea); provided, the following income shall be excluded:
i. Income reflected as necessary expenses or deductible expenses in calculating the amount of domestic source income of a domestic place of business of a nonresident under Article 120(1) and (2) and the amount of domestic source income of a domestic place of business of a foreign corporation under Article 94(1) and (2) of the Corporate Tax Act;
2) Income of temporary staffing agency workers whose wage and salary income from a foreign corporation abroad (excluding a branch or a sales office thereof in the Republic of Korea) is subject to the withholding of income tax under Article 156-7;
5. Pension income;
6. Other income; provided, the following income shall be excluded:
a. Income under subparagraph 8;
b. A penalty for breach of contract or damages under Article 21(1)10 (only applicable to cases where earnest money is replaced with a penalty for breach of contract or with damages);
c. Income under Article 21(1)23, 24, or 27;
7. Retirement income; provided, income received by any person with wage and salary income falling under any item of subparagraph 4 after retirement from office shall be excluded;
8. Service charges prescribed by Presidential Decree;
9. Deleted. <Dec. 31, 2024>
(2) Paragraph (1) shall apply to an act of a person who acts for a withholding agent pursuant to paragraph (1) (limited to persons prescribed by Presidential Decree, such as business entities, in cases of income specified in paragraph (1)3) or is entrusted with withholding, considering it as an act of a person himself or herself or the mandator within the scope of authorization or delegation. <Amended on Dec. 31, 2009; ;Dec. 27, 2010>
(3) Where a financial company, etc. underwrites, trades, mediates, or represents bills, debt certificates, stocks, or collective investment securities (hereafter referred to as "bills, etc." in this Article) issued by a domestic person, paragraph (2) shall apply to such financial institution, etc., considering that there is relationship of procuration or trust between such financial company, etc. and the relevant domestic person. <Amended on Dec. 27, 2010>
(4) Where a trust business entity under the Financial Investment Services and Capital Markets Act operates, keeps, or manages trust property, paragraph (2) shall apply, considering that there is relationship of procuration or trust of tax withholding obligations between the relevant trust business entity and a person who pays income attributed to the relevant trust property. <Amended on Dec. 27, 2010>
(5) Where a foreign corporation pays income under paragraph (1)1 or 2 generated from bonds or securities it has issued to a resident, a person who acts for the foreign corporation to make such payment in the Republic of Korea or is delegated or entrusted with the authority to make such payment, shall withhold income tax on such income. <Amended on Dec. 31, 2009; ;Dec. 27, 2010>
(6) Where a business entity (including a corporation; hereafter the same shall apply in this paragraph), when receiving the fees for supplying boarding and lodging service or any service, receives service charges pursuant to paragraph (1)8 with the price and pays the same to the relevant income earner, such business entity shall withhold income tax for the service charges. <Amended on Dec. 31, 2009; ;Dec. 27, 2010>
(7) A person obliged to withhold taxes under paragraphs (1) through (6) shall be referred to as "withholding agent." <Amended on Dec. 27, 2010; Dec. 29, 2020; Dec. 31, 2024>
(8) The scope of withholding agents and other necessary matters shall be prescribed by Presidential Decree. <Added on Jan. 1, 2013; Dec. 29, 2020; Dec. 31, 2024>
[Title Amended on Dec. 31, 2009]
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Article 128 (Payment of withholding tax)
(1) A withholding agent shall pay the income tax withheld to the competent tax office, the Bank of Korea or a postal service office by no later than the 10th day of the month following the month to which the date of collection belongs, as prescribed by Presidential Decree. <Amended on Dec. 27, 2010; Dec. 29, 2020; Dec. 31, 2022; Dec. 31, 2024>
(2) A withholding agent prescribed by Presidential Decree designated in consideration of the number of regular workers, type of business, etc., may pay taxes withheld, other than the following withholding taxes, notwithstanding paragraph (1), by the 10th day of the month following the last month of the half-year term in which the date of collection of withholding taxes falls: <Amended on Dec. 27, 2010; Dec. 29, 2020; Dec. 31, 2024>
1. Taxes withheld from bonus, dividends, and other income disposed of pursuant to Article 67 of the Corporate Tax Act;
2. Withholding taxes for dividend income disposed of pursuant to Article 13 or 22 of the Adjustment of International Taxes Act;
3. Withholding taxes under Article 156-5(1) and (2).
[This Article Wholly Amended on Dec. 31, 2009]
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Article 128-2 (Special cases concerning penalty tax for late payment of withholding tax)
Where a withholding agent or any person who is to deduct withholding tax pursuant to Articles 156 and 156-3 through 156-6 is the State, a local government, or the association of local governments (hereafter referred to as the "State, etc." in this Article) and a person who receives wage and salary income from the State, etc. fails to pay or underpays the tax amount which the State, etc. should withhold, within the designated period for payment thereof because he or she got a deduction or tax credit from his or her income unjustly by inaccurately preparing a return on income deduction and tax credit for wage and salary income under Article 140(1), the State, etc. shall collect such tax amount to be collected and the penalty tax amount under Article 47-5(1) of the Framework Act on National Taxes from such wage and salary income earner and pay them. <Amended on Jan. 1, 2014>
[This Article Added on Jan. 1, 2012]
[Title Amended on Dec. 29, 2020]
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Article 129 (Withholding tax tates)
(1) A withholding agent shall withhold income tax at any of the following tax rates (hereinafter referred to as "withholding tax rate") when it pays the income specified in any subparagraph of Article 127(1): <Amended on Dec. 27, 2010;Jan. 1, 2013; Jan. 1, 2014; Dec. 23, 2014; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2024; Dec. 23, 2025>
1. With regard to interest income, the tax rate prescribed as follows:
a. Deleted; <Dec. 19, 2017>
b. 25/100 of profits made from a non-business loan; provided, interest income received through an online investment-linked financial business registered with the Financial Services Commission under the Act on Online Investment-Linked Financial Business and Protection of Users shall be 14/100;
c. The basic tax rate for excess refund from a workplace mutual-aid association under Article 16(1)10;
d. 14/100 of other interest income;
2. With regard to dividend income, the tax rate prescribed as follows:
a. 25/100 of dividend income of joint investment business entities under Article 17(1)8;
b. 14/100 of other dividend income;
3. 3/100 of any business income subject to withholding; provided, the withholding tax rate of 20/100 shall apply to the income received by a foreign professional sportsperson in compensation for providing services pursuant to a contract with a pro-sports team, among the sports club operation business under the Korean Standard Industrial Classification;
4. The basic tax rate for wage and salary income; provided, with regard to wage and salary income of a daily employed worker, 6/100;
5. The basic tax rate for the public pension income;
5-2. Any of the following tax rates for pension income received, in the form of pension, from the amount paid into a pension account or as an increase according to the outcome of operation under Article 20-3(1)2b or c. In such cases, the lowest tax rate shall apply where all the following requirements are met concurrently:
a. The following tax rates according to the age of pension income earners;
┌───────────┬─────┐
│ Age (as of pension receipt date) │ tax rate │
├─────┬─────┼─────┤
│ │ Under 70 years of age │ 5/100 │
├─────┼─────┼─────┤
│ 70 years of age or older │ under 80 years of age │ 4/100 │
├─────┼─────┼─────┤
│ 80 years of age or older │ │ 3/100 │
└─────┴─────┴─────┘
b. Deleted; <Dec. 23, 2014>
c. With respect to the pension income to be received until death in the form of pension pursuant to the life-long pension agreement prescribed by Presidential Decree, 3/100;
5-3. With respect to the pension income to be received as retirement income under Article 20-3(1)2a, a tax rate based on the following classifications. In such cases, details of the withholding tax rates for the actual number of years of pension receipt and the withholding tax rate for receipt other than pension shall be prescribed by Presidential Decree:
a. If the actual number of years of pension receipt is 10 years or less: 70/100 of the withholding tax rate for receipt other than pension;
b. If the actual number of years of pension receipt exceeds 10 years but does not exceed 20 years: 60/100 of the withholding tax rate for receipt other than pension;
c. Where the actual number of years of pension receipt exceeds 20 years: 50/100 of the withholding tax rate applicable to non-pension income;
6. With regard to other income, the tax rate prescribed as follows; provided, this shall not apply to cases to which subparagraph 8 applies:
a. Where the amount of income under Article 14(3)8d and e exceeds 300 million won, 30/100 of such excess;
b. With regard to other income under Article 21(1)18 or 21, 15/100;
c. Deleted; <Dec. 23, 2014>
d. With regard to any income other than those specified above, 20/100;
7. With regard to retirement income, the basic tax rate;
8. With regard to service charges prescribed by Presidential Decree, 5/100;
9. Deleted. <Dec. 31, 2024>
(2) Notwithstanding paragraph (1), with regard to the following interest income and dividend income, the following tax rates shall be the withholding tax rate: <Amended on Jan. 1, 2013; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2022>
1. 14/100 of any interest income generated from security deposit and the price of a successful bid paid into court pursuant to Articles 113 and 142 of the Civil Execution Act;
2. 45/100 of any income for which the real name prescribed by Presidential Decree is not verified; provided, where Article 5 of the Act on Real Name Financial Transactions and Confidentiality applies, it shall be the tax rate prescribed in the same Article.
(3) Notwithstanding paragraph (1)4 and 5, where the withholding tax rate applies to monthly wage and salary income and the public pension income, the simplified tax withholding table for wage and salary income prescribed by Presidential Decree (hereinafter referred to as "simplified tax withholding table for wage and salary income") and the simplified tax amount table for pension income prescribed by Presidential Decree (hereinafter referred to as "simplified tax withholding table for pension income") shall apply. <Amended on Jan. 1, 2013>
(4) When calculating the amount of taxes to be withheld pursuant to paragraph (1), where the amount of a foreign income tax prescribed by Presidential Decree is paid on income under Article 127(1)1 and 2 in a foreign country, the amount calculated by deducting such amount of foreign income tax from the amount of withholding tax calculated pursuant to paragraph (1), shall be the amount of a withholding tax. In such cases, if the amount of a foreign income tax exceeds the amount of a withholding tax calculated pursuant to paragraph (1), such excess shall be deemed written off: <Amended on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
1. Deleted; <Dec. 31, 2022>
2. Deleted; <Dec. 31, 2022>
3. Deleted. <Dec. 31, 2022>
(5) For the purpose of calculating the amount of withholding tax under paragraph (1), for income under Article 127(1)2 that meets the requirements specified in each subparagraph of Article 57-2(1), the withholding tax shall be determined by subtracting the amount specified in subparagraph 2 from the amount specified in subparagraph 1: <Amended on Dec. 31, 2022; Dec. 31, 2024>
1. The amount calculated by multiplying the income received from an indirect investment company, etc. (referring to the amount specified in Article 57-2(2)1; hereafter the same shall apply in this Article) by the tax rate specified in paragraph (1);
2. The amount calculated by taking into account the after-tax base price of the indirect investment foreign corporate tax, as prescribed by Presidential Decree.
(6) In applying paragraph (5), the amount under paragraph (5)2 shall be limited to the amount calculated by multiplying the income under Article 127(1)2 that satisfies the requirements set forth in the subparagraphs of Article 57-2(1) by the tax rate under paragraph (1)2b (hereinafter referred to as the "limit amount of dividend income deduction" in this Article). <Amended on Dec. 31, 2024; Dec. 23, 2025>
(7) For the purpose of applying paragraph (5), where the amount under subparagraph 2 of that paragraph exceeds the limit amount of dividend income deduction, the excess amount may be deducted, within the limit amount of dividend income deduction for the relevant income, at the time income is paid from the relevant indirect investment company, etc. during the period from the payment of the indirect investment foreign corporate tax to December 31 of the year in which the 10th anniversary of the payment date falls; provided, if the amount specified in paragraph (5)2 for income from the repurchase or transfer of all securities issued by the indirect investment company, etc. exceeds the limit amount of dividend income deduction, such excess shall not be deemed to accrue. <Added on Dec. 31, 2022; Dec. 23, 2025>
(8) In calculating the amount of withholding tax pursuant to paragraph (1), with respect to income withdrawn from a pension account that falls under Article 127(1)1 and 5 through 7 and satisfies the requirements set forth in the subparagraphs of Article 57-2(1) (hereinafter referred to as "deduction income withdrawn from a pension account" in this Article), the amount obtained by subtracting the amount under subparagraph 2 from the amount under subparagraph 1 shall be the amount of withholding tax: <Added on Dec. 23, 2025>
1. The amount calculated by applying the tax rate under the relevant item to the deduction income withdrawn from a pension account classified under the relevant item (referring to the amount under Article 57-2(2)1; hereafter the same shall apply in this Article);
a. Income under Article 127(1)1: The tax rate under paragraph (1)1d;
b. Income under Article 127(1)5: The tax rate under paragraph (1)5-2 or 5-3;
c. Income under Article 127(1)6: The tax rate under paragraph (1)6b;
d. Income under Article 127(1)7: The tax rate under paragraph (1)7;
2. The amount calculated by taking into account the after-tax base price of the indirect investment foreign corporate tax, as prescribed by Presidential Decree.
(9) In applying paragraph (8), the amount under subparagraph 2 of that paragraph shall be limited to the amount under subparagraph 1 of that paragraph (hereinafter referred to as the "limit amount of deduction for income withdrawn from a pension account" in this Article). <Added on Dec. 23, 2025>
(10) In applying paragraph (8), where the amount under paragraph (8)2 exceeds the limit amount of deduction for income withdrawn from a pension account, the excess amount may be deducted, within the limit amount of deduction for income withdrawn from a pension account for the relevant income, when deduction income withdrawn from a pension account is withdrawn from the pension account after the relevant indirect investment foreign corporate tax has been paid. <Added on Dec. 23, 2025>
(11) Except as provided in paragraphs (5) through (10), matters necessary for withholding on income paid by indirect investment companies, etc. shall be prescribed by Presidential Decree. <Added on Dec. 31, 2022; Dec. 23, 2025>
[This Article Wholly Amended on Dec. 31, 2009]
Subsection 2 Tax Withholding from Interest Income or Dividend Income
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Article 130 (Timing and methods for withholding taxes from interest income and dividend income)
When a withholding agent pays interest income or dividend income, he or she shall withhold income tax calculated by applying the withholding tax rate to such amount paid.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 131 (Special cases concerning timing for withholding taxes from interest income and dividend income)
(1) Where a corporation fails to pay dividend or distribution in the course of disposition of profits or earnings until three months pass from the date of determination of such disposition, income tax shall be withheld, considering such dividend income has been paid on the date on which three months have elapsed; provided, if dividend income is not paid by the end of February following the year of the determination in accordance with disposition determined between November 1 and December 31, income tax shall be withheld, considering the dividend income was paid on the last day of February following the year in which the date of determination of such disposition arrives.
(2) Income tax shall be withheld from dividend disposed of pursuant to Article 67 of the Corporate Tax Act, considering the dividend income has been paid on any of the following dates:
1. Where the tax base for corporate tax is determined or reassessed: The date on which a notice of changes of income prescribed by Presidential Decree is received;
2. Where the tax base for corporate tax is reported: The date of such report thereof, or report of reassessment.
(3) It shall be governed by Presidential Decree as to cases where income tax is withheld, considering the income is paid on the date different from the date of payment of interest income or dividend income, other than those defined in paragraphs (1) and (2).
[This Article Wholly Amended on Dec. 27, 2010]
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Article 132 Deleted. <Dec. 27, 2010>
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Article 133 (Issuance of withholding tax receipt on interest income, etc.)
(1) A withholding agent who pays interest income or dividend income in the Republic of Korea shall issue a withholding tax receipt determined by Decree of the Ministry of Finance and Economy, specifying the amount of such interest income or dividend income and other necessary matters to a person who receives income when he or she pays such income; provided, where a withholding agent notifies a person receiving interest income or dividend income of the amount of such interest income or dividend income and other necessary matters by March 31 of the year following the taxable period to which the date when the interest income or dividend income has made payment belongs, as prescribed by Presidential Decree, he or she shall be deemed to have issued the relevant withholding tax receipt. <Amended on Dec. 27, 2010; Jun. 9, 2020; Oct. 1, 2025>
(2) A withholding agent under paragraph (1) may choose not to issue a withholding tax receipt where the amount of payment of interest income or dividend income does not exceed the amount prescribed by Presidential Decree; provided, he or she shall issue a withholding tax receipt or notify the recipient of income thereof pursuant to paragraph (1) in cases where he or she issues a withholding tax receipt pursuant to Article 133-2(1) or the recipient of interest income or dividend income requests him or her to issue a withholding tax receipt.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 133-2 (Special cases concerning withholding tax on bonds)
(1) Where a resident or nonresident receives interest, etc. from a corporation which has issued bonds, etc. or sells the relevant bonds, etc. to a corporation who has issued or a corporation prescribed by Presidential Decree (hereafter referred to as "issuing corporation, etc." in this paragraph), Articles 127 through 133, 164 and 164-2 shall apply, deeming the amount equivalent to interest, etc. during the period of withholding according to the method of calculation of period prescribed by Presidential Decree to be interest income under Article 16 based on the date of issuance of such bonds, etc. or the preceding date of withholding as the beginning period, and the date of payment of interest, etc. or the date of sale of bonds, etc., as the closing period, while an issuing corporation, etc. of the relevant bonds, etc. shall be a withholding agent, and the timing of tax withholding shall be any date prescribed by Presidential Decree, such as the date of payment of interest, etc. or the date of sale of bonds, etc. <Amended on Dec. 27, 2010;Jan. 1, 2013>
(2) The method of calculation of the amount equivalent to interest, etc. pursuant to paragraph (1) and matters necessary for withholding in cases of repurchase agreement, etc. pursuant to Article 46(1) shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2009]
Subsection 3 Withholding Tax from Wage and Salary Income
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Article 134 (Timing and methods for withholding taxes from wage and salary income)
(1) When a withholding agent pays monthly wage and salary income, he or she shall withhold income tax according to the simplified tax withholding table for wage and salary income.
(2) Where a withholding agent falls under any of the following subparagraphs, he or she shall withhold income tax pursuant to Article 137, 137-2 or 138 and in cases of subparagraph 1, with regard to wage and salary income of February of the following year, he or she shall withhold income tax pursuant to paragraph (1): <Amended on Dec. 27, 2010>
1. When he or she pays wage and salary income from February of the year following the relevant taxable period (where he or she fails to pay wage and salary income from February until the last day of February or there is no wage and salary income in February, the last day of February; hereinafter the same shall apply);
2. When he or she pays wage and salary income from the month when a retiree retires.
(3) When a withholding agent pays wage and salary income to a worker employed on a daily basis, he or she shall withhold income tax by taking a tax credit for wage and salary income against the tax calculated by applying the withholding tax rate to the amount less the wage and salary income deduction from the wage and salary income.
(4) Deleted. <Dec. 27, 2010>
(5) If a monthly salary is paid in installment by the same employer, as a place of work of a person with wage and salary income is changed, the income tax shall be withheld from the total of such monthly salary at the new place of work by applying paragraphs (1) through (3). <Amended on Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 135 (Special cases concerning date of collection of withholding taxes)
(1) Where a withholding agent liable to pay wage and salary income fails to pay wage and salary income for January through November by December 31 in the relevant taxable period, income tax shall be withheld, deeming that such wage and salary income was paid on the 31st day of December. <Amended on Dec. 27, 2010>
(2) Where a withholding agent fails to pay wage and salary income for December by the last day of February of the following year, income tax shall be withheld, deeming that such wage and salary income was paid on the last day of February of the following year. <Amended on Dec. 27, 2010>
(3) Where a corporation fails to pay any bonus to be paid after disposition of profits or a surplus, within three months from the date of determination of such disposition, income tax shall be withheld, deeming that such bonus was paid on the date when such the three-month period expired; provided, where such disposition is determined between November 1 and December 31 but the bonus is not paid by the last day of February of the following year, income tax shall be withheld, deeming that such bonus was paid on the last day of February of the following year. <Amended on Dec. 27, 2010>
(4) Article 131(2) shall apply mutatis mutandis to the timing for withholding taxes from bonus to be disposed of pursuant to Article 67 of the Corporate Tax Act. <Amended on Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 136 (Tax withheld from bonus)
(1) Income tax which a withholding agent withholds when he or she pays a bonus or pay in the nature of a bonus (hereinafter referred to as "bonus, etc.") falling under wage and salary income shall be calculated according to the following classification. The same shall also apply to a bonus, etc. received by any person exempted from income tax on wage and salary income by applying the global income deduction:
1. Bonus, etc. to be paid in a given period:
The amount calculated by deducting the tax withheld and paid (excluding penalty tax) on wage and salary income during such period subject to payment from the amount calculated by multiplying the amount computed according to the simplified tax withholding table on the aggregate of the amount calculated by dividing the amount of such bonus, etc. by the number of months of the period subject to payment and the monthly average salary other than a bonus, etc. of such period subject to payment by the number of months of the period subject to payment shall be the amount of such tax;
2. Bonus, etc. with no period subject to payment:
The amount calculated pursuant to subparagraph 1, considering from January 1 in the taxable period in which a person has received a bonus, etc. to the month in which the date of payment of such bonus, etc. falls the period subject to payment, shall be the amount of such tax. In such cases, if he or she has received a bonus, etc. on two or more occasions in such taxable period, the amount of tax shall be calculated by considering the period from the month following the month in which the date he or she receives a bonus, etc. falls to the month in which the date he or she receives another bonus, etc. falls thereafter as the period subject to payment;
3. In the calculation of subparagraphs 1 and 2, where the period subject to payment exceeds one year, it shall be deemed one year, and where there is an odd amount less than one month, it shall be deemed one month.
(2) Income tax withheld when a withholding agent pays a bonus, etc. according to disposition of a surplus shall be calculated, as prescribed by Presidential Decree.
(3) In the calculation of tax to be collected from a bonus, etc., the method of application of the period subject to payment and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 137 (Year-end tax settlement of amount of wage and salary income tax)
(1) When a withholding agent pays wage and salary income for February of the year following the relevant taxable period or for the month in which a retiree retires, he or she shall withhold income tax as calculated in the following order (hereafter referred to as "additional tax amount" in this Article): <Amended on Jan. 1, 2014; Act No. 13206, Mar. 10, 2015>
1. Calculating global income tax base by taking global income deduction, based on the return filed by a wage and salary income earner pursuant to Article 140, from wage and salary income of the wage and salary income earner for the relevant taxable period (in cases of retirees, the period shall refer to the period up to the date of retirement; hereafter the same shall apply in this Article);
2. Determining the calculated global income tax amount by applying the basic tax rate to the global income tax base under subparagraph 1;
3. Calculating income tax by deducting taxes withheld during the relevant taxable period under Article 134(1), foreign tax credits, the tax credit for wage and salary income, the tax credit for children, the tax credit for pension accounts, and special tax credits from the calculated tax amount on global income under subparagraph 2.
(2) If the aggregate of the amounts deducted under paragraph (1)3 for taxes withheld during the relevant taxable period under Article 134(1), foreign tax credits, the tax credit for wage and salary income, the tax credit for children, the tax credit for pension accounts, and special tax credits, exceeds the calculated tax amount on global income, such excess shall be refunded to the relevant wage and salary income earner, as prescribed by Presidential Decree. <Amended on Jan. 1, 2014>
(3) When a withholding agent withholds an additional tax amount from a wage and salary income earner who fails to file a return under Article 140, by applying paragraph (1), he or she shall apply basic deduction only for the wage and salary income earner him or herself, excluding basic deduction for others, and the standard tax credit. <Amended on Jan. 1, 2014; Act No. 13206, Mar. 10, 2015>
(4) Notwithstanding paragraph (1), if an additional tax amount exceeds 100,000 won, the withholding agent may withhold the additional tax amount in installments when he or she pays wage and salary income for the period of February to April of the year following the relevant taxable period. <Added on Act No. 13206, Mar. 10, 2015>
[This Article Wholly Amended on Dec. 27, 2010]
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Article 137-2 (Year-end tax settlement of wage and salary income tax for persons who receives wages and salaries from two or more persons)
(1) Where a person who receives wages and salaries from two or more persons (excluding a person employed on a daily basis) designates a principal workplace and a secondary workplace, have a withholding tax receipt for wage and salary income under Article 143(2) issued from a withholding agent of the secondary workplace, and submit such receipt to the withholding agent of the principal workplace by the time he or she receives wage and salary for February of the year following the relevant taxable period, the withholding agent of the principal workplace shall withhold income taxes on the aggregate of wages and salaries paid at the principal workplace and secondary workplace, in accordance with Article 137.
(2) A withholding agent of a secondary workplace who issues a withholding tax receipt for wage and salary income under paragraph (1) shall withhold income taxes, computed by subtracting taxes withheld pursuant to Article 134(1) from the calculated global income tax which is obtained by applying a basic tax rate to wage and salary income for the relevant taxable period.
(3) Paragraphs (1) and (2) shall apply mutatis mutandis to the year-end tax settlement for wage and salary income tax of a person with wage and salary income under items of Article 127(1)4 and other wage and salary income, for which income taxes are collected by a taxpayers association pursuant to Article 150(3).
[This Article Added on Dec. 27, 2010]
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Article 138 (Year-end tax of wage and salary income tax for reemployed persons)
(1) Where a wage and salary income earner who retires in the middle of a taxable period and is newly hired submits a report of income deduction and tax credits for wage and salary income including wage and salary income received between January of the relevant taxable period and the month in which he or she retires arrives, in accordance with Article 140(1), the withholding agent shall withhold income taxes on the aggregate of wage and salary paid at both the former and new workplace, in accordance with Article 137. <Amended on Dec. 27, 2010; Jan. 1, 2014>
(2) Paragraph (1) shall apply mutatis mutandis to withholding income tax of a person who retires in the middle of the relevant taxable period, and is re-employed after paying the income tax pursuant to Article 137, and retires again in the middle of such taxable period.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 139 (Carryforward of shortage in collection)
Where a withholding agent deducts a withholding tax pursuant to Article 137, 137-2, or 138, if the income tax to be collected exceeds the amount of wage and salary income to be paid (excluding cases where there is no wage and salary payable for the following month), such excess shall be collected when wage and salary income is paid for the following month.
[This Article Wholly Amended on Dec. 27, 2010]
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Article 140 (Return on income deduction by wage and salary income earner)
(1) Where a wage and salary income earner intends to take deduction from global income and tax credits when he or she makes the year-end tax settlement pursuant to Article 137, he or she shall file a written report indicating the cause of the relevant deductions (hereinafter referred to as "return on income deduction and tax credits for wage and salary income") to the withholding agent before he or she receives the wage and salary income for February of the year following the relevant taxable period (or before he or she receives the wage and salary income for the month in which he or she retires, if he or she retires), as prescribed by Presidential Decree. <Amended on Dec. 27, 2010;Jan. 1, 2013; Jan. 1, 2014>
(2) The withholding agent at the principal place of work who has received a return on income deduction and tax credits for wage and salary income shall report such matters reported to the head of the competent tax office and notify a withholding agent at the secondary place of work, as prescribed by Presidential Decree. <Amended on Jan. 1, 2014>
(3) Paragraphs (1) and (2) shall not apply to a worker employed on a daily basis.
(4) Deleted. <Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
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Article 141 Deleted. <Dec. 27, 2010>
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Article 142 Deleted. <Dec. 27, 2010>
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Article 143 (Issuance of withholding tax receipt on wage and salary income)
(1) A withholding agent who pays wage and salary income shall issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, specifying the amount of wage and salary income and other necessary matters, to an wage and salary income earner, by no later than the end of February of the year following the relevant taxable period; provided, with respect to a person who retires in the middle of the relevant taxable period, he or she shall issue a withholding tax receipt by no later than the end of the month following the month in which the date of payment of wage and salary income for the month of the date of his or her retirement falls, and with respect to a worker employed on a daily basis, he or she shall issue a withholding tax receipt by no later than the end of the month following the month to which the date of payment of wage and salary income belongs. <Amended on Dec. 31, 2022; Oct. 1, 2025>
(2) Notwithstanding paragraph (1), if a person who receives wage and salary from two or more persons (excluding a person employed on a daily basis) requests a withholding agent at a secondary workplace to issue a withholding tax receipt under paragraph (1) in order to receive a year-end tax settlement pursuant to Article 137-2, the withholding agent at a secondary workplace shall immediately issue such receipt.
[This Article Wholly Amended on Dec. 27, 2010]
Subsection 3-2 Withholding Tax from Pension Income
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Article 143-2 (Timing and methods for withholding tax from pension income)
(1) When a withholding agent pays public pension income, he or she shall withhold income tax according to the simplified tax withholding table for pension income. <Amended on Jan. 1, 2013>
(2) When a withholding agent pays pension income under Article 20-3(1)2 and 3, he or she shall withhold the income tax calculated by applying the withholding tax rate under Article 129(1)5-2 to the amount paid. <Amended on Jan. 1, 2013>
(3) When a withholding agent pays public pension income for January of the year following the relevant taxable period, he or she shall withhold income tax pursuant to Article 143-4. In such cases, income tax on the public pension income for January of the following year shall be withheld pursuant to paragraph (1). <Amended on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 143-3 Deleted. <Dec. 31, 2001>
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Article 143-4 (Year-end tax settlement of public pension income tax)
(1) When a withholding agent for public pension income pays the public pension income for January of the year following the relevant taxable period, he or she shall withhold the amount left over after deducting the income tax withheld and paid during the relevant taxable period from the tax amount calculated by determining the tax base of global income with the amount calculated by applying personal deductions according to the return filed by the relevant pension income earner in accordance with Article 143-6, calculating the tax amount on global income by applying the basic tax rate to the amount calculated as above, and then applying the tax credit for children and the standard tax credit to the tax amount calculated as above. <Amended on Jan. 1, 2013; Jan. 1, 2014>
(2) In cases falling under paragraph (1), if the aggregate of the amounts deducted for the income tax already withheld and paid during the relevant taxable period, the tax credit for children, and the standard tax credit exceeds the calculated tax on global income, such excess shall be refunded to the relevant pension income earner, as prescribed by President Decree. <Amended on Jan. 1, 2014>
(3) Where a withholding agent withholds income tax pursuant to paragraph (1) from a pension income earner who fails to file a return under Article 143-6, he or she shall apply the basic deduction only for the pension income earner him or herself and the standard tax credit. <Amended on Jan. 1, 2014>
(4) Where any person who receives public pension income dies during the relevant taxable period, a withholding agent shall make the year-end tax settlement for the public pension income of the deceased person by the end of the second month following the month in which the date of his or her death falls by applying paragraphs (1) through (3) mutatis mutandis. <Amended on Jan. 1, 2013>
(5) Deleted. <Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2009]
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Article 143-5 (Carryforward of shortage in collection)
In cases of withholding taxes pursuant to Article 143-4, where the income tax to be deducted exceeds public pension income to be paid, such excess tax amount shall be deducted when the public pension income for the following month is paid. <Amended on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 143-6 (Return on income deduction by pension income earner)
(1) A person who intends to receive public pension income shall submit, to the withholding agent, a return on income deduction and tax credits for the pension income earner in the form prescribed by Decree of the Ministry of Finance and Economy (hereinafter referred to as "return on income deduction and tax credits for a pension income earner") before receiving the initial payment of the public pension income. <Added on Dec. 27, 2010;Jan. 1, 2013; Jan. 1, 2014; Oct. 1, 2025>
(2) When any person who receives public pension income intends to take personal deductions for his or her spouse or dependents and the tax credit for children, he or she shall submit, to the withholding agent, a return on income deduction and tax credits for the pension income earner by December 31 of the relevant year, as prescribed by Presidential Decree; provided, where a person submitted a return on income deduction and tax credits for the pension income earner during the relevant taxable period in accordance with paragraph (1) and there is no change in familial relationship with regard to the spouse or any of the dependents qualifying for deduction, the taxpayer may omit the submission of another return on income deduction and tax credits for the pension income earner, but if a pension income earner dies during the relevant tax period, the heir of the pension income earner shall file a return on income deduction and tax credits for the pension income by the end of the month following the month in which the pension income earner dies. <Amended on Dec. 27, 2010;Jan. 1, 2013; Jan. 1, 2014>
(3) A withholding agent who receives a return on income deduction and tax credits for a pension income earner shall report the matters stated on the return to the head of the competent tax office having jurisdiction over the relevant withholding tax, as prescribed by Presidential Decree. <Amended on Dec. 27, 2010; Jan. 1, 2014>
(4) Deleted. <Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
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Article 143-7 (Issuance of withholding tax receipts for pension income)
A withholding agent shall issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, stating the amount of such pension income and other necessary matters, to the pension income earner when it pays pension income; provided, it shall be deemed that a withholding agent issues a withholding tax receipt, where it notifies the person who receives pension income of the amount of the pension income and other necessary matters by the end of February of the year following the taxable period in which the pension income is paid (or by the end of the second month following the month in which the person dies, if such notice shall be given to a person who dies in the middle of the relevant taxable period) in accordance with the details and methods prescribed by Presidential Decree: <Amended on Jan. 1, 2013; Dec. 23, 2014; Oct. 1, 2025>
1. Deleted. <Dec. 23, 2014>
2. Deleted. <Dec. 23, 2014>
[This Article Wholly Amended on Dec. 27, 2010]
Subsection 4 Withholding Tax from Business Income
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Article 144 (Timing and methods for withholding from business income and issuance of withholding tax receipt)
(1) When a withholding agent pays business income subject to withholding, he or she shall withhold income tax calculated by applying the withholding tax rate to the amount payable and issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, stating the amount of such business income and other necessary matters, to a business income earner. <Amended on Dec. 27, 2010; Oct. 1, 2025>
(2) Paragraph (1) shall apply mutatis mutandis to cases where a withholding agent pays service charges prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 144-2 (Year-end tax settlement of business income tax except for final return on tax base)
(1) A withholding agent who pays business income under Article 73(1)4 (hereinafter referred to as "business income subject to year-end tax settlement") shall, when paying the business income for February of the year following the relevant taxable period (where the business income for February is not paid by the end of February or where there is no business income for February, the end of February; hereinafter the same shall apply in this Article) or when paying the business income for the month in which the transaction contract with the relevant business entity is terminated, calculate the calculated tax on global income by using, as the tax base for global income, the amount obtained by applying global income deductions in accordance with the details reported by the relevant business entity under Article 144-3 to the amount calculated by multiplying the amount of business income for the relevant taxable period by the rate prescribed by Presidential Decree, and after applying tax credits under this Act and the Restriction of Special Taxation Act to such calculated tax amount, withhold the remaining amount after deducting the income tax already withheld and paid for the relevant taxable period therefrom (hereinafter referred to as the "additional tax amount payable" in this Article). <Amended on Dec. 27, 2010; Dec. 23, 2025>
(2) Where the additional tax amount payable exceeds 100,000 won, the withholding agent may, notwithstanding paragraph (1), withhold the additional tax amount in installments by the time it pays the business income for February through April of the year following the relevant taxable period; provided, this shall not apply where the additional tax amount payable is withheld upon paying the business income for the month in which the transaction contract with the relevant business entity is terminated. <Added on Dec. 23, 2025>
(3) Where the additional tax amount payable to be withheld pursuant to paragraphs (1) and (2) exceeds the amount of business income to be paid (excluding where there is no business income to be paid in the following month), the excess tax amount shall be collected when the business income for the following month is paid. <Amended on Dec. 27, 2010; Dec. 23, 2025>
(4) In cases falling under paragraph (1), where the income tax already withheld and paid for the relevant taxable period exceeds the amount remaining after tax credits are deducted from the calculated global income tax for that taxable period, the excess amount shall be refunded to the relevant business entity, as prescribed by Presidential Decree. <Amended on Dec. 23, 2025>
(5) Where a withholding agent withholds tax under paragraph (1) from a business entity who fails to file a report under Article 144-3, only the portion of the basic deduction applicable to the business entity himself or herself and the standard tax credit shall apply. <Amended on Jan. 1, 2014; Dec. 23, 2025>
(6) Articles 137-2 and 138 shall apply mutatis mutandis with regard to year-end tax settlement for business income for a person who receives business income for year-end tax settlement from at least two persons, and a person who receives such business income for year-end tax settlement under a contract concluded in the middle of the relevant taxable period. <Added on Dec. 27, 2010; Dec. 23, 2025>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 144-3 (Return on income deduction for year-end tax settlement of business income earner)
Where a business entity intends to have global income deduction, the tax credit for children, the tax credit for pension accounts, and special tax credits when making the year-end tax settlement under Article 144-2, he or she shall submit a return on income deduction and tax credits for the business income earner to the withholding agent, as prescribed by Presidential Decree, before he or she receives the business income for February of the year following the relevant taxable period (referring to any time before he or she receives the business income for the month in which he or she terminated a contract made with the withholding agent, if he or she terminated the contract). <Amended on Jan. 1, 2013; Jan. 1, 2014>
[This Article Added on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
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Article 144-4 (Issuance of withholding tax receipt on business income subject to year-end tax settlement)
A withholding agent who pays business income for year-end tax settlement shall issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, stating the amount of such business income and other necessary matters, to the relevant business entity, by the end of the month following the month in which the date of year-end tax settlement falls. <Amended on Dec. 27, 2010; Oct. 1, 2025>
[This Article Added on Dec. 31, 2009]
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Article 144-5 (Special cases concerning timing for withholding tax from business income for year-end tax settlement)
(1) Where a withholding agent who is to pay business income for year-end tax settlement fails to pay business income for January through November by December 31 of the relevant taxable period, income tax shall be withheld at source, considering that such business income was paid on December 31.
(2) Where a withholding agent fails to pay business income for year-end tax settlement for December by the end of February of the following year, income tax shall be withheld at source, considering that such business income was paid at the end of February of the following year.
[This Article Added on Dec. 27, 2010]
Subsection 5 Withholding Tax from Other Income
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Article 145 (Timing and methods for withholding tax from other income and issuance of withholding tax receipt)
(1) When a withholding agent pays any other income, he or she shall withhold the income tax calculated by applying the withholding tax rate to the amount of the other income.
(2) A withholding agent who pays other income shall issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, stating the amount of other income and other necessary matters, to a recipient of such income when he or she pays the income; provided, where he or she pays other income falling under Article 21(1)15a, and 19a and b that does not exceed the amount prescribed by Presidential Decree, he or she may choose not to issue a withholding tax receipt except cases where a person who is paid requests issuance of a withholding tax receipt. <Amended on Dec. 27, 2010; Oct. 1, 2025>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 145-2 (Special cases concerning timing for withholding taxes from other income)
`Article 131(2) shall apply mutatis mutandis in relation to timing for withholding income taxes from other income disposed of in accordance with Article 67 of the Corporate Tax Act.
[This Article Added on Dec. 27, 2010]
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Article 145-3 (Year-end settlement of religious persons’ income)
(1) When a withholding agent who pays income to a religious person and withholds income tax thereon, pays the religious person's income for February of the year immediately following the relevant taxable year (or at the end of February, if no income for February is paid to a religious person by the end of February or no income is payable to a religious person for February; hereafter the same shall apply in this Article) or pays income to a religion-related worker for the month in which the affiliation with the religion-related worker terminates, he or she shall withhold the amount computed by the method prescribed by Presidential Decree from the religious person's income for the relevant taxable period.
(2) Articles 144-2 (excluding paragraph (1) of the same Article) through 144-5 shall apply mutatis mutandis to the year-end settlement of a religious person’s income under paragraph (1), the reporting of income deductions, etc., the timing of issuing a withholding tax receipt or withholding taxes. In such cases, "business income" shall be construed as "religious person’s income," "business entity" or "business income earner" as "religion-related worker," "contract for transactions" as "affiliation," and "termination" as "severance."
[This Article Added on Dec. 15, 2015]
Subsection 6 Withholding Tax From Retirement Income
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Article 146 (Timing and methods for withholding tax from retirement income and issuance of withholding tax receipt)
(1) When a withholding agent pays retirement income, he or she shall collect the income tax calculated by applying the withholding tax rate to the tax base of retirement income.
(2) Where a resident’s retirement income falls under any of the following cases, notwithstanding paragraph (1), no income tax on the relevant retirement income shall be withheld before the resident receives any payment other than pension. In such cases, where the income tax has already been withheld pursuant to paragraph (1), the resident may request for refund of the withheld tax amount: <Amended on Jan. 1, 2014>
1. Where the retirement income is in a pension account or being paid into a pension account as of the date of retirement;
2. Where the retirement income is deposited in a pension account within 60 days from the date of receiving the same after retirement.
(3) A person who pays retirement income shall issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, stating the amount of such retirement income and other necessary matters, to a recipient of retirement income by no later than the end of the month following the month in which the date of such payment falls; provided, where he or she did not withhold the income tax on the retirement income pursuant to paragraph (2), he or she shall issue the aforementioned receipt with a statement specifying the reason for not withholding the income tax. <Amended on Oct. 1, 2025>
(4) Matters necessary concerning the method of withholding tax on retirement income and the refund procedure thereof, etc. shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Jan. 1, 2013]
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Article 146-2 (Special cases concerning accrual of income and deferment of collection of income tax in cases of income-deferred retirement income)
(1) Where retirement income paid to a person who retired on or before December 31, 2012 was transferred to or deposited in the person's retirement pension account and an amount (including the amount additionally paid according to the outcome of operation, if such additional amount exists; hereinafter referred to as "income-deferred retirement income") that is deemed an income that has not accrued until the amount is actually paid to the holder of the retirement pension account remains in the account as at December 31, 2014, the total amount of the relevant income-deferred retirement income shall be deemed to be paid as retirement income on December 31, 2014 and re-deposited in the relevant retirement pension account instantly.
(2) The income tax on the retirement income deemed to be paid and re-deposited under paragraph (1) shall be deemed to have not been withheld under the former part of Article 146(2).
[This Article Added on Dec. 23, 2014]
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Article 147 (Special cases concerning timing for withholding taxes from retirement income)
(1) Where a withholding agent who is to pay retirement income fails to pay retirement income of a person who has retired from his or her service between January and November, by December 31 in the relevant taxable period, income tax shall be withheld at source, deeming that such retirement income was paid on the 31st day of December. <Amended on Dec. 27, 2010>
(2) Where a withholding agent fails to pay retirement income of a person who has retired in December by the end of February of the following year, income tax shall be withheld at source, deeming that such retirement income was paid at the end of February of the following year. <Amended on Dec. 27, 2010>
(3) Deleted. <Jan. 1, 2013>
(4) Paragraphs (1) and (2) shall not apply to retirement income under Article 22(1)1. <Amended on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 148 (Settlement of tax on retirement income)
(1) Where a retired person submits, to the withholding agent, a withholding tax receipt for any of the following retirement incomes already paid at the time when he or she received his or her retirement income, the withholding agent shall withhold the income tax settled against the sum of the retirement income already paid to the retired person and the retirement income yet to be paid by the withholding agent:
1. Retirement income already paid during the taxable period concerned;
2. Retirement income already paid under the employment agreement prescribed by Presidential Decree.
(2) Where retirement income paid to a person who retired on or before December 31, 2012 was transferred to or deposited in his or her retirement pension account and thus the retirement income does not accrue on the date of retirement, paragraph (1) may apply, deeming that the retirement income accrued on the date of retirement and the retirement income is the retirement income already paid under paragraph (1)2, notwithstanding Article 146-2. <Added on Dec. 23, 2014>
(3) Matters necessary concerning the method and procedure, etc. for settlement of retirement income tax shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Jan. 1, 2013]
[Title Amended on Dec. 23, 2014]
Subsection 7 Deleted.
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Article 148-2 Deleted. <Dec. 31, 2024>
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Article 148-3 Deleted. <Dec. 31, 2024>
SECTION 2 Tax Withholding by Taxpayers Association
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Article 149 (Organization of taxpayers association)
Any of the following residents may organize a taxpayers association, as prescribed by Presidential Decree:
1. Any person with wage and salary income falling under any item of Article 127(1)4;
2. Any business entity prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 150 (Liability of taxpayers association to collect taxes)
(1) A taxpayers association under Article 149 shall collect each month income taxes on wage and salary income or business income of its members falling under any item of Article 127(1)4.
(2) When a taxpayers association organized by business entities under subparagraph 2 of Article 149 collects income taxes on its members monthly on or before December 31, 2024 pursuant to paragraph (1), it shall collect income taxes after deducting the amount equivalent to 5/100 of such tax. <Amended on, Dec. 31, 2018; Dec. 8, 2021>
(3) When a taxpayers association organized by persons pursuant to subparagraph 1 of Article 149 collects monthly income taxes from its members on or before December 31, 2027 pursuant to paragraph (1), it shall collect income taxes after deducting the amount equivalent to 3/100 of such tax; provided, That where any person under subparagraph 1 of Article 149 files a final return on the tax base of global income pursuant to Article 70 or makes year-end tax settlement pursuant to examples of Articles 137, 137-2 and 138, he or she shall pay the amount calculated by deducting the amount equivalent to 3/100 of the calculated global income tax on wage and salary income withheld by the relevant taxpayers association or shall collect such amount as tax. <Amended on Dec. 27, 2010; Act No. 16104, Dec. 31, 2018, Dec. 8, 2021; Dec. 31, 2024>
(4) The maximum deductible amount under paragraph (2) or (3) shall be one million won per year (if the relevant taxable period is less than one year or the period of service in the relevant taxable period is less than one year, the amount obtained by multiplying one million won by the number of months in the relevant taxable period or the number of months of service and dividing it by 12). <Added on Dec. 8, 2021>
(5) Deductions under paragraphs (2) and (3) shall be referred to as "taxpayers association credit". <Amended on Dec. 8, 2021>
(6) Matters necessary to collect income taxes pursuant to paragraph (1) shall be prescribed by Presidential Decree. <Amended on Dec. 8, 2021>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 151 (Payment of tax collected by taxpayers association)
A taxpayers association shall pay the monthly income tax collected pursuant to Article 150 to a tax office having jurisdiction over the taxpayers association, the Bank of Korea or a postal service office by no later than the tenth day of the month following the month in which the date of collection falls, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 152 (Method of collection by taxpayers association)
(1) When a taxpayers association under Article 150(2) collects income tax pursuant to paragraph (1) of the same Article, it shall calculate the monthly income tax which is calculated by multiplying 12 by the amount of monthly income of its each member computed, as prescribed by Presidential Decree, taking global income deduction from the amount calculated, and applying the applicable basic tax rate to the remaining amount, and shall collect the due income tax by taking a tax credit and taxpayers association credit. In such cases, if there is a fraction less than one month, it shall be deemed one month.
(2) When a taxpayers association under Article 150(3) collects income tax pursuant to paragraph (1) of the same Article, it shall collect tax on monthly income of its members in the same manner as withholding tax is withheld from wage and salary income pursuant to Article 127, while collecting the amount computed by taking taxpayers association credit from the income tax calculated based on the simplified tax withholding table for wage and salary income under Article 134.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 153 (Management of tax payment by taxpayers association)
(1) A taxpayers association may act as a tax manager managing matters concerning returns, payments and refunds of income tax of its members.
(2) Where a taxpayers association intends to act as a tax manager of its members pursuant to paragraph (1), it shall report it to the head of a tax office having jurisdiction over the taxpayers association, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 3 Special Cases concerning Tax Withholding
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Article 154 (Exemption from tax withholding)
When a withholding agent pays non-taxable or tax-exempt income falling under each subparagraph of Article 127(1), he or she shall not withhold such income tax.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 155 (Exclusion from tax withholding)
Where income under each subparagraph of Article 127(1), on which no income tax is to be withheld because it is not paid after generated, is included in the global income and income tax is levied on such global income, and such income is paid thereafter, no income tax shall be withheld from such income.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 155-2 (Special cases concerning withholding taxes from specified money in trust)
Notwithstanding Article 130, in cases of a trust excluding the subparagraphs of Article 4(2), a person that has been authorized or delegated to withhold tax under Article 127(2) shall withhold income tax on the relevant income on a specified date (limited to within the same attribution year) within 3 months after the date the income referred to in Article 127(1)1 or 2 is attributed to the trust;
(1) If a non-resident receives domestic source income under Article 119 through a foreigner consolidated account (referring to an account opened in the name of a foreign financial investment business entity under Article 12(2)1b of Financial Investment Services and Capital Markets Act for the purpose of placing and settling securities transactions on behalf of multiple foreign investors; hereinafter the same shall apply), the person who pays such domestic source income through the foreigner consolidated account shall withhold income tax from the amount paid to the holder of the foreigner consolidated account, at an amount specified in the subparagraphs of Article 156(1).
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Article 155-3 (Special cases concerning tax withholding of collective investment scheme)
The amount of income under the subparagraphs of Article 127(1) shall not be deemed to have been paid at the time it is reverted to the collective investment property under the Financial Investment Services and Capital Markets Act.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 155-4 (Special cases concerning withholding taxes from bonus)
(1) Notwithstanding Article 127, no income tax shall be withheld on income prescribed by Presidential Decree that is treated as a bonus under Article 67 of the Corporate Tax Act for the representative, etc. of an acquired corporation, where the controlling shareholder of the corporation has been changed (hereafter referred to as "acquisition" in this Article), such as where the corporation is merged into another corporation that is not a specially related person prescribed by Presidential Decree in accordance with rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act, and such income arises from causes that occurred before the commencement of the rehabilitation proceedings. <Amended on Dec. 23, 2025>
(2) Other necessary matters regarding special cases concerning withholding of taxes from bonuses shall be prescribed by Presidential Decree.
[This Article Added on Jan. 1, 2014]
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Article 155-5 (Special cases concerning withholding taxes on income generated from transfer of paintings, calligraphic works, and antiques)
Where a withholding agent is unable to withhold taxes on income generated from the transfer of a painting, calligraphic work, or antique under Article 21(2) because it is impracticable to withhold taxes under Article 127(1) in any of the cases specified by Presidential Decree, the person who receives the income generated from the transfer of the painting, calligraphic work, or antique shall be deemed a withholding agent under Article 127(1) for the purpose of applying this Act to such person. <Amended on Dec. 29, 2020>
[This Article Added on Dec. 23, 2014]
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Article 155-6 (Exception to withholding taxes on religious persons’ income)
A person who pays income to a religious person (including cases falling under Article 21(4)) may choose not to withhold income tax pursuant to Articles 127, 134 through 143, 145, and 145-3. In such cases, a person who receives a religious person's income shall file a return on the tax base of global income under Article 70. <Amended on Dec. 29, 2020>
[This Article Added on Dec. 15, 2015]
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Article 155-7 (Special cases concerning withholding of tax on income accruing from non-real name assets)
(1) Where, by applying the tax rate under Article 129(1)1d or 2b instead of Article 5 of that Act without any deliberation or gross negligence, a withholding agent under Article 127 withholds tax on the income and dividend income to which differential taxation under Article 5 of the Act on Real Name Financial Transactions and Confidentiality applies, the actual owner of the relevant account shall, notwithstanding Article 127(1), pay an amount of shortfalls in withheld income tax (including penalty tax under Article 47-5(1) of the Framework Act on National Taxes; hereinafter the same shall apply in this Article).
(2) With respect to the amount of shortfalls in withheld income tax, the actual owner of the relevant account shall be deemed the withholding agent.
[This Article Added on Dec. 31, 2018]
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Article 156 (Special cases concerning withholding taxes from domestic source income of nonresident)
(1) Notwithstanding Article 127, any person (excluding any resident or nonresident who pays domestic source capital gains on real estate under subparagraph 9 of Article 119) who pays, to a nonresident, domestic source income under subparagraphs 1, 2, 4 through 6, and 9 through 12 of Article 119, which is neither substantially related to any domestic place of business nor attributed to such domestic place of business (including the amount paid to a nonresident who has no domestic place of business), shall withhold each of the following amounts as income tax on domestic source income of the nonresident when he or she pays such income, and pay such income tax to the competent tax office, the Bank of Korea, or a postal service office by no later than the tenth day of the month following the month in which the date of such withholding falls, as prescribed by Presidential Decree; provided, income on which a tax may be levied as domestic source business income in accordance with a tax treaty among income under subparagraph 5 of Article 119, shall be excluded: <Amended on Jan. 1, 2013; Dec. 20, 2016; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020>
1. Domestic source interest income under subparagraph 1 of Article 119: the amount as classified in the following items;
a. Interest income accrued from the bonds issued by the State, a local government, or a domestic corporation: 14/100 of the amount paid;
b. Interest income other than that prescribed in a: 20/100 of the amount paid;
2. Domestic source dividend income under subparagraph 2 of Article 119: 20/100 of the amount paid;
3. Domestic source lease income from leasing ships, etc. under subparagraph 4 of Article 119 and domestic source business income under subparagraph 5 of that Article (excluding the income that may be subject to taxation as domestic source business income pursuant to a tax treaty): 2/100 of the amount paid;
4. Domestic source personal services income under subparagraph 6 of Article 119: 20/100 of the amount paid; provided, in case of any income generated by providing any services specified by Presidential Decree which is deemed to be generated within the Republic of Korea under a tax treaty, among personal services provided in a foreign country, the amount withheld shall be 3/100 of the amount paid for such personal services;
5. Domestic source capital gains on real estate under subparagraph 9 of Article 119: 10/100 of the amount paid; provided, where the acquisition value and transfer expenses of the transferred assets are verified pursuant to Article 126(1)1, the amount withheld shall be an amount equivalent to 10/100 of the amount paid, etc. or an amount equivalent to 20/100 of capital gains on such asset, whichever is lesser;
6. Domestic source royalty income under subparagraph 10 of Article 119: 20/100 of the amount paid;
7. Domestic source capital gains on securities under subparagraph 11 of Article 119: 10/100 of the amount paid (in cases falling under Article 126(6), referring to the arm's length price under that paragraph: hereinafter the same shall apply in this subparagraph); provided, the acquisition value and transfer expenses of the relevant securities are verified pursuant to Article 126(1)1, the amount withheld is an amount equivalent to 10/100 of the amount paid or an amount equivalent to 20/100 of the amount calculated pursuant to that subparagraph, whichever is lesser;
8. Domestic source other income under subparagraph 12 of Article 119: An amount classified as follows:
a. Income specified in subparagraph 12k of Article 119: 15/100 of the amount paid;
b. Income specified in subparagraph 12l of Article 119: An amount according to the following classifications; provided, in the case of exchanging or withdrawing virtual assets, it shall be the following amount expressed in units of virtual assets, as prescribed by Presidential Decree:
i. If the necessary expenses of virtual assets are confirmed under Article 126(1)3: an amount equal to 10/100 of the amount paid or an amount equal to 20/100 of the amount calculated under the same subparagraph, whichever is less;
2) If the necessary expenses of virtual assets are not confirmed under Article 126(1)3: 10/100 of the amount paid;
c. Other income other than those referred to in items a and b: 20/100 of the amount paid (in the case of prize money, supplementary prize, etc. mentioned in Article 126(1)2, it shall be the amount calculated in accordance with the same subparagraph).
(2) Deleted. <Dec. 31, 2022>
(3) Where domestic source income prescribed in paragraph (1) is paid overseas, if the payer has a domicile, a place of residence, the head office, the principal office, or a domestic place of business (including a domestic place of business prescribed in Article 94 of the Corporate Tax Act) in the Republic of Korea, it shall be deemed that the payer pays the relevant domestic source income in the Republic of Korea, and paragraph (1) shall apply accordingly.
(4) Any person who pays domestic source income under subparagraphs 1, 5, 6, and 10 of Article 119 using foreign loan funds to a nonresident with no domestic place of business shall deduct a withholding tax pursuant to paragraph (1), each time such income is paid pursuant to the terms and conditions of payment on the contract, even where he or she does not pay such income directly according to the relevant terms and conditions of the contract. <Amended on Dec. 27, 2010>
(5) When any person who is a domestic agent of a nonresident operating a vessel or aircraft navigating to and from foreign countries and does not fall under Article 120(3) pays to the nonresident income generated from navigation of the vessel or aircraft navigating to and from foreign countries, he or she shall deduct withholding tax from the domestic source income of the nonresident pursuant to paragraph (1).
(6) Where securities under subparagraph 11 of Article 119 are transferred through an investment trader or investment broker under the Financial Investment Services and Capital Markets Act, the investment trader or investment broker shall deduct withholding tax pursuant to paragraph (1); provided, where stocks are listed on the stock market under the Financial Investment Services and Capital Markets Act, and stocks already issued are transferred, a corporation that has issued such stocks shall deduct withholding tax.
(7) Any person who pays, to a nonresident, domestic source income in return for works, such as building works, construction works, the installation or fabrication of machines, or services provided for the direction or supervision of such works or domestic source income in return for personal services provided in accordance with subparagraph 6 of Article 119 (including where such income shall be classified into business income under a tax treaty), shall deduct withholding tax under paragraph (1) from the income, even if the nonresident has a place of business in the Republic of Korea; provided, the foregoing shall not apply where a nonresident has his or her business registered under Article 168. <Amended on Jan. 1, 2013; Jan. 1, 2014>
(8) Article 84 shall apply mutatis mutandis where paragraph (1) applies to income referred to in subparagraph 12f (only applicable to a refund of a horse racing ticket, winner wager ticket, bullfighting match wager ticket, and sports promotion wager ticket) and g of Article 119.
(9) Where a nonresident receives the domestic source income under Article 119 by means of an auction under the Civil Execution Act or a public sale under the National Tax Collection Act, a withholding tax shall be collected in accordance with paragraph (1) up to the amount actually paid to the nonresident by a person who distributes the amount obtained at auction or at public sale. <Added on Dec. 27, 2010; Jan. 1, 2014>
(10) Paragraphs (1) through (9) shall apply to any act performed by a person who acts on behalf of a withholding agent under paragraphs (1) through (9) or is delegated with the authority therefrom, deeming such act to be performed by oneself or by delegating person within the scope authorized or delegated. <Added on Dec. 27, 2010>
(11) Where a financial company, etc. underwrites, trades, mediates, or represents bills, debt certificates, stocks, or collective investment securities issued by a domestic person, paragraph (10) shall apply to such financial company, etc., deeming that there is relationship of procuration or trust between such financial company, etc. and the relevant domestic person. <Added on Dec. 27, 2010>
(12) For the purpose of deducting withholding tax, a withholding agent under paragraphs (1) through (11) and (16) shall issue a withholding tax receipt prescribed by Decree of the Ministry of Finance and Economy, stating the amount of such domestic source income and other necessary matters, to a recipient of such domestic source income. <Amended on Dec. 27, 2010; Dec. 29, 2020; Oct. 1, 2025>
(13) With respect to the domestic source income under subparagraph 12i of Article 119, a domestic corporation which has issued stocks or equity interests shall deduct withholding tax at the time prescribed by Presidential Decree from a foreign related person holding such stocks or equity interests. <Amended on Jan. 1, 2012>
(14) Detailed methods for deducting withholding tax under paragraph (13) shall be prescribed by Presidential Decree. <Amended on Dec. 27, 2010>
(15) When applying paragraph (1), where a nonresident with domestic source capital gains on real estate under subparagraph 9 of Article 119 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, no income tax on such income shall be withheld. <Amended on Dec. 27, 2010; Dec. 31, 2018>
(16) Notwithstanding paragraph (1), other domestic source income of a nonresident under subparagraph 12l of Article 119 that is generated through a virtual asset business entity, etc. shall be paid to the tax office having jurisdiction over the place for tax payment, the Bank of Korea, or a postal service office, as prescribed by Presidential Decree, by the 10th day of the month following the month in which the virtual asset business entity, etc. withdraws virtual assets or cash after withholding the amount specified in paragraph (1)8b (January 10 of the following year if the withdrawal is not made from January 1 to December 31 of each year). <Added on Dec. 29, 2020>
(17) For the purpose of applying paragraph (16), the method for determining whether a person transferring, lending, or withdrawing virtual assets is subject to withholding under paragraph (1)8b shall be prescribed by Presidential Decree. <Added on Dec. 29, 2020>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 156-2 (Application for non-taxation or tax exemption under tax treaty by nonresident)
(1) If a nonresident who is the beneficial owner of the domestic source income under Article 119 (excluding domestic source business income under subparagraph 5 of that Article) intends to be qualified for non-taxation or tax exemption under a tax treaty, he or she shall submit an application for non-taxation or tax exemption and documents certifying that he or she is a beneficial owner of domestic source income (hereafter referred to as "application, etc." in this Article) to the person who pays the domestic source income (hereafter referred to as "payer of income" in this Article), as prescribed by Presidential Decree, and the payer of income shall submit the application, etc. to the head of the tax office having jurisdiction over his or her place for tax payment. <Amended on Dec. 31, 2018; Dec. 31, 2022; Dec. 31, 2024>
(2) In applying paragraph (1), where the relevant domestic source income is paid through a foreign investment vehicle specified by Presidential Decree, the foreign investment vehicle shall require the beneficial owner to submit an application, etc. as prescribed by Presidential Decree, and shall submit the application, etc. to the payer of income, accompanied with a report on the foeign investment vehicle, including the details thereof, and then the payer of income shall file the report and application with the head of the tax office having jurisdiction over the place for tax payment. <Amended on, Dec. 31, 2018; Dec. 31, 2022>
(3) The payer of income who has received an application, etc. from the beneficial owner or the foreign investment vehicle under paragraph (1) or (2) may request the application, etc. to be supplemented if it finds any omission or deficiency in the application, etc. submitted and shall withhold the amount specified in any subparagraph of Article 156(1) without applying non-taxation or tax exemption if it fails to receive the application, etc. or the report on the foeign investment vehicle from the beneficial owner or the foreign investment vehicle, or if it is impracticable to identify the beneficial owner with the documents submitted, or if there is any other ground specified by Presidential Decree. <Amended on Dec. 31, 2022>
(4) If the head of the tax office having jurisdiction over the place for tax payment who has received an application, etc. under paragraph (1) or (2), finds that any requirement is not fulfilled or that any detail of the application, etc. is not true after examination, he or she shall collect the amount of tax under Article 85(3), which is applicable mutatis mutandis pursuant to Article 126(4), from the payer of income. In such cases, if it is not possible to determine whether the requirements for non-taxation or exemption are fulfilled based on the details of the application, etc., the head may require the payer of income to supplement the relevant documents within a reasonable time limit. <Added on Dec. 31, 2022>
(5) Where a beneficial owner to whom non-taxation or tax exemption has not been applied under paragraph (3) intends to be eligible for non-taxation or tax exemption, the beneficial owner or income payer may request the head of the tax office having jurisdiction over the place of tax payment of the income payer to make a rectification within five years from the 11th of the month immediately following the month during which the tax is withheld under paragraph (3); provided, if any ground falling under any subparagraph of Article 45-2(2) of the Framework Act on National Taxes arises, a request for rectification may be filed within three months from the date on which the relevant ground occurs, notwithstanding the main sentence. <Amended on Dec. 20, 2016; Dec. 31, 2019; Dec. 31, 2022; Dec. 31, 2023>
(6) Upon receipt of an application for rectification under paragraph (5), the head of a tax office shall correct the tax base and the tax amount or shall notify the applicant that no ground exists for such rectification, within six months from the filing date of the application. <Amended on Dec. 31, 2022>
(7) Except as provided for in paragraphs (1) through (6), matters necessary for applying non-taxation or tax exemption, including the method and procedure for submitting relevant documents, such as an application, etc. and a report on the foreign investment vehicle, the duty to keep submitted documents, and the method and procedure for filing an application for rectification, shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2022>
[This Article Wholly Amended on Jan. 1, 2014]
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Article 156-3 (Special cases concerning withholding tax on bonds, etc. of nonresident)
Any person who pays interest, etc. of bonds, etc. to the nonresident subject to application of Article 156(1) or who purchases bonds, etc. from the concerned nonresident (including cases where there is a change in the ownership of bonds, etc. or in the right of receipt of interest income due to donation, repayment, investment, etc. and cases where he or she is entrusted with sale or mediates or renders a service, while excluding cases prescribed by Prescribed by Presidential Decree, such as a repurchase agreement) shall deducts withholding tax in consideration of the holding period of such nonresident, as prescribed by Presidential Decree. <Amended on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 156-4 (Special cases concerning procedures for withholding taxes from nonresidents in specific district)
(1) Where a withholding agent under Articles 156, 156-3, and 156-6 deducts withholding tax from income under subparagraph 1, 2, 9b, 10, or 11 of Article 119 as income tax among domestic source income of a nonresident located in a country or area notified publicly by the Minister of Finance and Economy, notwithstanding Article 156-2 and the provisions of non-taxation, exemption, or the reduced tax rate according to a tax treaty, he or she shall deduct withholding tax by applying tax rates under each subparagraph of Article 156(1) preferentially; provided, this shall not apply where the Commissioner of the National Tax Service approves in advance that he or she may qualify for non-taxation, tax exemption, or the reduced tax rate according to a tax treaty, as prescribed by Presidential Decree. <Amended on Jan. 1, 2012; Oct. 1, 2025>
(2) Where a person (including its agent or a tax manager under Article 82 of the Framework Act on National Taxes) that is substantially attributable to domestic source income provided in paragraph (1) intends to subject to non-taxation, tax exemption, or provisions on limited tax rate in accordance with a tax treaty on its income, it may apply a request for rectification to the head of the tax office having jurisdiction over the place of tax payment of the withholding agent within five years from the 11th of the month immediately following the month in which the tax withheld under paragraph (1) belongs, as prescribed by Presidential Decree; provided, if any ground falling under any subparagraph of Article 45-2(2) of the Framework Act on National Taxes arises, a request for rectification may be filed within three months from the date on which the relevant ground occurs, notwithstanding the main clause. <Amended on Dec. 20, 2016; Dec. 31, 2019; Dec. 31, 2023>
(3) The head of a tax office requested to make a rectification under paragraph (2) shall correct the tax base and tax amount or notify a person who has made such request of the purport that there is no reason for making a rectification within six months from the date he or she has received such request.
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 31, 2018]
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Article 156-5 (Special cases concerning tax withholding procedures related to services rendered by nonresident entertainers)
(1) With regard to remuneration or consideration which a person prescribed by Presidential Decree such as an entertainer or sportsperson who is a nonresident (hereafter referred to as "nonresident entertainer, etc." in this Article) receives for his or her service rendered in the Republic of Korea (including subparagraphs 6, 7, and 12 of Article 119; hereafter the same shall apply in this Article), any person who pays remuneration or consideration for services rendered by a nonresident entertainer, etc. in the Republic of Korea to a foreign corporation (hereafter referred to as "tax-exempt foreign corporation for an entertainer, etc." in this Article) who is not taxed for reasons, such as it has no domestic place of business or does not belong to a domestic place of business, etc. notwithstanding a tax treaty, he or she shall withhold the amount equivalent to 20/100 of such amount paid and then pay to the competent tax office, the Bank of Korea, or a postal service office, as prescribed by Presidential Decree, by the tenth day of the month following the month in which the date when such withholding tax is deducted falls. <Amended on Jan. 1, 2012; Dec. 31, 2018>
(2) Notwithstanding Article 156(1), when a tax-free foreign corporation for an entertainer, etc. pays remuneration or consideration for services rendered by a nonresident entertainer, etc., it shall withhold the amount equivalent to 20/100 of such amount paid as income tax on the recipient of domestic source income and pay such amount to the competent tax office, the Bank of Korea, or a postal service office, as prescribed by Presidential Decree, by the tenth day of the month following the month in which the date of such withholding falls. In such cases, where any person who pays consideration to a tax-free foreign corporation for an entertainer, etc. for services rendered by a nonresident entertainer, etc. in the Republic of Korea has paid income tax withheld pursuant to paragraph (1), such income tax shall be deemed to have been paid within the limit of such amount paid.
(3) Where the amount withheld and paid pursuant to paragraph (1) is larger than that pursuant to paragraph (2), a tax-free foreign corporation for an entertainer, etc. may apply for a refund of such difference to the head of the competent tax office, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 156-6 (Special cases concerning procedures for withholding taxes from nonresidents for application of reduced tax rate under tax treaty)
(1) Where a nonresident who is the beneficial owner of domestic source under Article 119 intends to apply for a reduced tax rate under the applicable tax treaty, the nonresident shall submit an application for the reduced tax rate as well as a document evidencing that he or she is a beneficial owner of the domestic source income (hereafter reffered to as "application, etc." in this Article), as prescribed by Presidential Decree, to the withholding agent under Article 156(1) (hereafter referred to as "withholding agent" in this Article). <Amended on, Dec. 31, 2018; Dec. 29, 2020; Dec. 31, 2022>
(2) For the purpose of applying paragraph (1), where the relevant domestic source income is paid through a foreign investment vehicle, the relevant foreign investment vehicle shall, as prescribed by Presidential Decree, receive an application, etc. from the beneficial owner and submit it to the withholding agent with a report on the foreign investment vehicle including details of the application for reduced tax rate. <Amended on, Dec. 31, 2018; Dec. 31, 2022>
(3) A withholding agent who has received an application, etc. from the beneficial owner or the foreign investment vehicle under paragraph (1) or (2) may request the application, etc. to be supplemented if it finds any omission or deficiency in the application, etc., submitted and shall withhold the amount specified in any subparagraph of Article 156(1) without applying the reduced tax rate if it fails to receive the application, etc. or the report on the foeign investment vehicle from the beneficial owner or the foreign investment vehicle, or if it is impracticable to identify the beneficial owner with the documents submitted, or if there is any other ground specified by Presidential Decree. <Amended on Dec. 31, 2022>
(4) A withholding agent who has received an application, etc. and a report on an overseas investment vehicle from the beneficial owner or the overseas investment vehicle pursuant to paragraph (1) or (2) shall submit the application, etc. and the report on the overseas investment vehicle so received to the head of the competent tax office having jurisdiction over the place of tax payment by the end of February of the year following the year in which the date of payment of the relevant domestic source income falls; provided, in cases where the withholding agent suspends or closes its business, by the end of the second month following the month in which the date of such suspension or closure falls. <Added on Dec. 23, 2025>
(5) Where there is an error in the limited tax rate applied pursuant to paragraphs (1) and (2), or where a beneficial owner who has not been granted the application of the limited tax rate pursuant to paragraph (3) intends to have such limited tax rate applied, the beneficial owner or the withholding agent may file a claim for rectification with the head of a tax office having jurisdiction over the place of tax payment of the withholding agent, as prescribed by Presidential Decree, within five years from the 11th day of the month following the month in which the tax amount was withheld pursuant to paragraph (3); provided, this shall not apply where any ground falling under any subparagraph of Article 45-2(2) of the Framework Act on National Taxes arises, in which case a claim for rectification may be filed within three months from the date on which such ground becomes known. <Amended on Jan. 1, 2014; Dec. 20, 2016; Dec. 31, 2019; Dec. 31, 2023; Dec. 23, 2025>
(6) Upon receipt of an application for rectification under paragraph (5), the head of a tax office shall correct the tax base and the tax amount or shall notify the applicant that no ground exists for such rectification, within 6 months from the filing date of the application. <Amended on Dec. 31, 2022; Dec. 23, 2025>
(7) In addition to matters prescribed in paragraphs (1) through (6), other matters necessary for applying reduced tax rates, such as methods and procedures for submitting application documents and others, the reports on foreign investment vehicle, or other related documents, duty of keeping submitted documents, and methods and procedures for requesting rectification, shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2022; Dec. 23, 2025>
[This Article Added on Jan. 1, 2012]
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Article 156-7 (Special cases concerning withholding tax on income of temporary staffing agency workers of foreign corporations)
(1) Notwithstanding Article 134(1), when a domestic corporation (hereinafter referred to as "hiring domestic corporation") that hires a worker from a foreign corporation (excluding a domestic branch or a domestic sales office; hereafter referred to as "foreign temporary staffing corporation" in this Article) that temporarily assigns workers from abroad under a temporary staffing contract made with the domestic corporation (hereafter referred to as "temporary staffing agency worker" in this Article) pays an amount to the temporary staffing agency worker in return for the labor provided within the Republic of Korea, the domestic corporation shall withhold an amount obtained by applying the tax rate specified in Article 18-2(2) of the Act on Restriction on Special Cases concerning Taxation to the amount paid to the worker (referring to the confirmed amount, if the hiring domestic corporation confirms the amount paid by the foreign temporary staffing corporation to the temporary staffing agency worker, as prescribed by Presidential Decree), as income tax, and shall pay the amount to the tax office having jurisdiction over withholding tax, the Bank of Korea, or any post office by not later than the tenth day of the month immediately following the month in which the amount is withheld, as prescribed by Presidential Decree. <Amended on Dec. 19, 2017; Dec. 8, 2021>
(2) When a foreign temporary staffing corporation pays wage and salary income for February of the year immediately following the relevant taxable period to a temporary staffing agency worker under paragraph (1), it shall withhold income tax on the wage and salary income for the relevant taxable period pursuant to Article 137. In such cases, the relevant provisions regarding residents and nonresidents in this Act shall apply mutatis mutandis to the computation of the tax base and tax amount of a temporary staffing agency worker for the relevant taxable period, the filing of a return on tax base and the payment of taxes, determination, rectification, collection, and refund of taxes.
(3) In cases falling under paragraph (2), a hiring domestic corporation may withhold taxes on behalf of the foreign temporary staffing corporation.
(4) Matters necessary for the scope of hiring domestic corporations who shall withhold taxes from temporary staffing agency workers and the scope of temporary staffing agency workers for the purposes of applying paragraphs (1) through (3), and the methods, procedure, etc. for submitting documents related to withholding taxes, application for refund, etc., shall be prescribed by Presidential Decree.
[This Article Added on Dec. 15, 2015]
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Article 156-8 (Special cases concerning application of tax rates on interest, dividends, and royalties)
(1) Interest, dividend, or royalty income from domestic sources of a nonresident under the provisions of a tax treaty shall be taxed at the lower of the reduced tax rate and the rate specified as below:
1. The rate specified in Article 156(1)1, 2, or 6 if the taxes subject to the tax treaty does not include local income tax;
2. If the taxes subject to the tax treaty includes local income tax, the rate specified in Article 156(1)1, 2, or 6 plus 10/100 of the income tax withheld under Article 103-18(1) of the Local Tax Act.
(2) Notwithstanding paragraph (1), if Article 156-4(1) applies, withholding shall be made in accordance with Article 156-4(1). In such cases, when correcting the tax base and the tax amount under Article 156-4(3), the lower of the reduced tax rate and the tax rate specified in either of the subparagraphs of paragraph (1) shall be applied.
[This Article Added on Dec. 29, 2020]
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Article 156-9 (Special cases concerning withholding taxes from domestic source income paid through foreigner consolidated account)
(1) If a non-resident receives domestic source income under Article 119 through a foreigner consolidated account (referring to an account opened in the name of a foreign financial investment business entity under Article 12(2)1b of Financial Investment Services and Capital Markets Act for the purpose of placing and settling securities transactions on behalf of multiple foreign investors; hereinafter the same shall apply), the person who pays such domestic source income through the foreigner consolidated account shall withhold income tax from the amount paid to the holder of the foreigner consolidated account, at an amount specified in the subparagraphs of Article 156(1).
(1) This Act shall enter into force on January 1, 1996; provided, Articles 17(2) (referring to the amended provisions of the previous Article 26(1)), 32(1) (referring to the amended provisions of the previous Article 39(1)), 47(1) (referring to the amended provisions of the previous Article 61(1)), 69(1) (referring to the amended provisions of the previous Article 90(1)), 84 (referring to the amended provisions of the previous Article 130), 99 (referring to the amended provisions of the previous Article 60), 105(1) (referring to the amended provisions of the previous Article 95(1)), 163 (referring to the amended provisions of the previous Article 189), 164(7) (referring to the amended provisions of the previous Article 193(6)) and 166 (referring to the amended provisions of the previous Article 195) shall enter into force on January 1, 1995, and the provisions of Article 16(1)11, on January 1, 1999, respectively.
(3) Where a non-resident files a request for rectification under paragraph (2), Articles 156-2(5) through (7) and 156-6(5) through (7) shall apply mutatis mutandis to the deadline, methods, procedures, etc. for filing a request for rectification. In such cases, "beneficial owner" and "beneficial owner or payer of income" in the main clause of Article 156-2(5) and "beneficial owner or payer of income" and "beneficial owner or person liable for withholding tax" in the main clause of Article 156-6(5) shall be construed as "non-resident" respectively. <Amended on Dec. 23, 2025>
[This Article Added on Dec. 31, 2023]
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Article 157 (Succession to tax withholding)
(1) Where a corporation is dissolved, if income tax to be withheld is not collected, or the remaining property is distributed without paying the income tax collected, a liquidator shall be liable to pay the income tax jointly and severally with the persons who have been distributed, within the limit of the amount distributed.
(2) Where corporations are merged, a corporation that survives the merger or a corporation established in the course of the merger shall, if a corporation which has become extinct by the merger fails to pay income tax which it is to withhold, be liable to pay such income tax.
[This Article Wholly Amended on Dec. 31, 2009]
SECTION 4 Deleted.
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Articles 158 Deleted. <Jan. 1, 2012>
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Articles 159 Deleted. <Jan. 1, 2012>
CHAPTER VI SUPPLEMENTARY PROVISIONS
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Article 160 (Keeping of and entry in books)
(1) Each business entity (including the nonresident who has a domestic place of business or the income under subparagraph 3 of Article 119; the same shall apply hereinafter) shall keep supporting documents, etc. so as to calculate the amount of income, and enter all transactions in a ledger and manage it by double-entry bookkeeping so that all transactions in relation to his or her business may be understood objectively. <Amended on Jan. 1, 2013>
(2) Where a business entity below a certain scale by type of business prescribed by Presidential Decree in consideration of a type of business, scale, etc. has faithfully entered transactions on his or her business in a simple book prescribed by Presidential Decree (hereinafter referred to as "simple book") which he or she keeps, he or she shall be deemed to have kept books and records under paragraph (1).
(3) Any business entity below a certain scale by type of business prescribed by Presidential Decree under paragraph (2) shall be referred to as "person subject to simple bookkeeping" and any business entity, other than a person subject to simple bookkeeping, shall be referred to as "person subject to double-entry bookkeeping".
(4) In cases of paragraph (1) or (2), any business entity whose business income includes income generated from real estate rental business shall conduct accounts by each type of income. In such cases, the amount of common income that cannot be divided by income and the common expenses corresponding to such common income shall be divided and entered in books in proportion to the amount of respective gross income.
(5) Any business entity having two or more places of business shall enter the details of transactions by place of business in a book so that such details may be distinguished, where different rule applies for tax reduction by each place of business pursuant to the Act on Restriction on Special cases Concerning Taxation. <Amended on Dec. 27, 2010>
(6) Deleted. <Dec. 27, 2010>
(7) Matters necessary concerning entry in and keeping of books and supporting documents pursuant to paragraphs (1) through (5) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 160-2 (Receipt and keeping of documentary evidence of disbursement of expenses)
(1) When any resident or nonresident under Article 121(2) and (5) intends to calculate necessary expenses pursuant to Article 27 or 37 in calculating the amount of business income or other income, he or she shall obtain supporting documents concerning the disbursement of such expenses and keep them for five years from the end of the period for final return; provided, any person who takes a deduction for a loss which occurred five years before the starting date of each taxable period shall keep supporting documents of the taxable period in which the relevant loss occurred until May 31 of the year after the following year of the taxable period in which he or she was allowed a deduction. <Amended on Dec. 27, 2010;Jan. 1, 2013>
(2) In cases falling under paragraph (1), where any person with business income receives goods or services related to his or her business from a business entity (including a corporation) and disburses the consideration therefor, he or she shall obtain any of the following supporting documents; provided, this shall not apply to cases prescribed by Presidential Decree: <Amended on Act No. 11873, Jun. 7, 2013>
1. An invoice under Article 163 of this Act and Article 121 of the Corporate Tax Act;
2. A tax invoice under Article 32 of the Value-Added Tax Act;
3. Credit card sales slips under the Specialized Credit Financial Business Act (if business is conducted using a means prescribed by Presidential Decree, similar to a credit card, the supporting documents thereof shall be included);
4. A receipt (hereinafter referred to as "cash receipt") stating the details of settlement of accounts, such as the date of transactions, the amount, etc., which is issued by a device issuing cash receipts to a person who is supplied with goods or services, if a business entity who has registered as an issuer of cash receipts receives the payment in cash for his or her supplying goods or services pursuant to Article 162-3(1).
(3) For the purpose of applying paragraph (2), in either of the following cases, a business entity shall be deemd to have discharged his or her obligations to obtain and keep the supporting documents under the same paragraph: <Amended on Dec. 31, 2022>
1. If it has issued and retains a purchaser-issued invoice under Article 163-3 due to the failure to obtain an invoice as mentioned in paragraph (2)1;
2. If it has issued and retains a purchaser-issued tax invoice under Article 34-2(2) of the Value-Added Tax Act due to the failure to obtain a tax invoice as mentioned in paragraph (2)2;
(4) In applying paragraphs (1) through (3), the receipt and keeping of the supporting documents on the disbursement of expenses and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 160-3 (Obligations to prepare and retain details of issuance of receipts for donation)
(1) A resident or nonresident who issues receipts for donation (hereafter referred to as "person who issues receipts for donation" in this Article) shall prepare a detailed statement of issuance for each donor in the form prescribed by Presidential Decree and shall retain it for five years from the date of issuance; provided, this shall not apply where he or she issues electronic receipts for donation. <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2020>
(2) Where the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of the competent tax office requests a person who issues receipts for donation to submit a detailed statement of issuance for each donor which he or she retains pursuant to paragraph (1), he or she shall submit such detailed statement; provided, this shall not apply where the person issues electronic receipts for donation. <Amended on Dec. 29, 2020>
(3) Any person who issues receipts for donation shall submit a sum table of donation receipts issued, stating the total number and amount, etc. of donation receipts issued in the relevant taxable period, to the head of the competent tax office under Article 168(5) by June 30 of the year following the relevant taxable period; provided, this shall not apply where the person issues electronic receipts for donation. <Amended on Dec. 29, 2020; Dec. 31, 2023>
(4) If the total amount stated in donation receipts issued for donations received in the taxable year immediately preceding the relevant taxable period is 300 million won or more and exceeds the amount prescribed by Presidential Decree, the issuer of donation receipts shall issue electronic donation receipts for donations received in the relevant taxable year, by January 10 of the year following the year in which the date of receipt of donations falls. <Added on Dec. 31, 2024>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 160-4 (Obligations of financial companies to prepare and retain details of issuance of certificates)
(1) Where a financial company, etc. issues a certificate required for taking income deduction under this Act or the Act on Restriction on Special cases Concerning Taxation, it shall prepare a detailed statement of issuance by each individual prescribed by Presidential Decree and retain it for five years from the date of issuance thereof. <Amended on Jan. 1, 2013>
(2) A financial company, etc. shall submit a detailed statement of issuance for each individual it retains pursuant to paragraph (1) to the Commissioner of the National Tax Service, if he or she requests to submit it. <Amended on Jan. 1, 2013>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 160-5 (Obligations to report and use business accounts)
(1) When any person subject to double-entry bookkeeping falls under any of the following cases in relation to transactions receiving or supplying goods or services for his or her business, he or she shall use a business account prescribed by Presidential Decree (hereinafter referred to as "business account"):
1. Where he or she settles accounts or is settled accounts of the price for transactions through a financial company, etc.;
2. Where he or she pays or is paid labor costs or rent; provided, the transactions prescribed by Presidential Decree, in which it is difficult to use a business account because of a business partner's status, shall be excluded, among transactions for which he or she pays or is paid labor costs.
(3) Any person subject to double-entry bookkeeping shall report a business account to the head of the tax office having jurisdiction over the place of business of the business entity or over the place for tax payment of the person, within six months from the commencement date of the taxable period in which the person becomes subject to double-entry bookkeeping (the commencement date of the following taxable period, if the person becomes subject to double-entry bookkeeping at the same time when the person commences the business); provided, this shall not apply where a business account has already been reported. <Amended on Dec. 27, 2010; Dec. 23, 2014>
(4) Where a person subject to double-entry bookkeeping changes or adds a business account, he or she shall report such change or addition by the deadline for a final return under Articles 70 and 70-2: <Amended on Dec. 27, 2010; Jan. 1, 2012;Jan. 1, 2013>
1. Deleted; <Jan. 1, 2012>
2. Deleted. <Jan. 1, 2012>
(5) Matters necessary for reporting, changing, and adding a business account, the method of reporting thereof, the limit of transactions for which a business account is to be used, preparation of a detailed statement, etc., shall be prescribed by Presidential Decree. <Amended on Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 161 (Keeping separate entry)
Any person who intends to have any income tax reduced or exempted pursuant to Article 59-5(1)2 shall enter the income reduced or exempted in the books separately from other income. <Amended on Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 162 (Installation and use of cash registers)
(1) Notwithstanding Article 24(1), where any business entity prescribed by Presidential Decree installs and uses a cash register, the amount of global income may be calculated based on the sum of the amount earned in the relevant taxable period.
(2) Matters necessary for the installation and use of cash registers shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 162-2 (Obligations to become member of credit card member stores and to issue credit card sales slips)
(1) Where the Commissioner of the National Tax Service deems necessary for tax management, he or she may direct a business entity falling under the requirements prescribed by Presidential Decree in consideration of a type of business, scale, etc. as a business entity supplying goods or services mainly to consumers, not to business entities, to become a member of credit card member stores defined in Article 2 of the Specialized Credit Financial Business Act.
(2) A credit card merchant (referring to a business entity that has become affiliated by satisfying the requirements under paragraph (1); hereinafter the same shall apply in this Article) shall not refuse, where it supplies goods or services in connection with its business and the counterparty intends to make payment using a credit card under Article 35(2)1a, or issue a credit card sales slip under Article 160-2(2)3 (hereinafter referred to as a "credit card sales slip" in this Article) in a manner inconsistent with the facts; provided, where a business entity falling under any of the following subparagraphs issues a credit card sales slip by aggregating the sales amounts of other business entities by a method 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 (hereinafter referred to as a "point-of-sale information management system"), it shall not be deemed that such slip has been issued inconsistently with the facts. <Amended on Dec. 27, 2010; Dec. 20, 2016; Dec. 23, 2025>
1. A business entity operating a large-scale store under subparagraph 3 of Article 2 of the Distribution Industry Development Act;
2. A business entity who operates a sports facility under subparagraph 1 of Article 2 of the Installation and Utilization of Sports Facilities Act;
3. Business entities engaged in other businesses prescribed by Presidential Decree.
(3) Any person refused transactions with a credit card by a credit card member store or issued a false credit card sales slip may report the details of such transactions to the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office.
(4) The Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office who has received a report pursuant to paragraph (3) shall notify the head of a tax office having jurisdiction over the place for tax payment of the credit card member store thereof. In such cases, the head of a tax office having jurisdiction over the place for tax payment shall notify the relevant credit card member store of the amount reported during the relevant taxable period.
(5) The Commissioner of the National Tax Service may issue orders necessary for the rectification thereof to a credit card member store which has refused transactions with a credit card or has issued a false credit card sales slip.
(6) The administrative guidance for becoming a member of credit card member stores, the method of reporting and notification of refusal of transactions with a credit card and of issuance of false credit card sales slips, and other necessary matters, shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 162-3 (Obligations to register as cash receipt merchant and to issue cash receipts for cash payment)
(1) Any business entity who supplies goods or provides services mainly to consumers, not to business entities, and meets the requirements prescribed by Presidential Decree, in consideration of the type of business, scale, etc. shall register as a cash receipt merchant within 60 days from the date on which it meets such requirements (in the case of a business entity that meets the requirements as prescribed by Presidential Decree, such as the amount of income) within three months from the end of the month in which it meets such requirements), by installing a cash receipt-issuing device in a credit card reader, etc. <Amended on Dec. 23, 2014; Dec. 31, 2019>
(2) Any business entity who has registered as a cash receipt merchant pursuant to paragraph (1) shall attach a "Cash Receipt Sticker" attached on the door, indicating a cash receipt merchant, as prescribed by the Commissioner of the National Tax Service.
(3) A business entity registered as a cash receipt merchant shall not refuse to issue a cash receipt, or issue it inconsistently with the facts, where it supplies goods or services in connection with its business and the counterparty, after paying the consideration in cash, requests the issuance of a cash receipt; provided, where a person falling under any of the subparagraphs of Article 162-2(2) issues a cash receipt by aggregating the sales amounts of other business entities by a method prescribed by Presidential Decree, such as by installing and operating a point-of-sale information management system, it shall not be deemed to have issued such cash receipt inconsistently with the facts. <Amended on Dec. 23, 2025>
(4) Where any business entity who engages in the type of business prescribed by Presidential Decree, among those business entities obliged to register as a cash receipt merchant pursuant to paragraph (1), supplies goods or provides services, the amount of transactions (including the amount of value-added tax) for each purchase of which is at least 100,000 won and receives the payment in cash, notwithstanding paragraph (3), he or she shall issue a cash receipt, as prescribed by Presidential Decree, even if the other party does not request the issuance thereof; provided, where he or she supplies goods or provides services to any person who has registered as a business entity pursuant to Article 168 of this Act, Article 111 of the Corporate Tax Act, or Article 8 of the Value-Added Tax Act and issues an invoice or a tax invoice pursuant to Article 163 of this Act, Article 121 of the Corporate Tax Act, or Article 32 of the Value-Added Tax Act, he or she may choose not to issue a cash receipt. <Amended on Jan. 1, 2013; Jun. 7, 2013; Jan. 1, 2014>
(5) If any business entity registered as a cash receipt merchant under paragraph (3) or a business entity obligated to issue cash receipts under paragraph (4) fails to issue a cash receipt or issues a false cash receipt, the other party to the transaction may report details of the transaction in cash to the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office. <Amended on Dec. 19, 2017>
(6) The Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office who receives reports pursuant to paragraph (5) shall notify the head of a tax office having jurisdiction over the place for tax payment of the relevant business entity of such fact. In such cases, the head of a tax office having jurisdiction over the place for tax payment shall notify the relevant business entity of the amount reported in the relevant taxable period.
(7) Even where a person supplied with goods or services from a business entity who has registered as a cash receipt merchant does not request for issuance of a cash receipt, the business entity may issue a cash receipt, as prescribed by Presidential Decree. <Added on Jan. 1, 2012>
(8) The Commissioner of the National Tax Service may issue, to a business entity who has registered as a cash receipt merchant, orders necessary in connection with the matters to be complied by the said business entity, such as the method of issuing cash receipts, method of posting a mark indicating the cash receipt merchant, etc. <Amended on Jan. 1, 2012>
(9) Registration of or withdrawal from a cash receipt merchant, the amount subject to issuance, the method of reporting and notification of non-issuance of cash receipts and issuance of false cash receipts, and other necessary matters, shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2012>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 163 (Preparation and issuance of invoices)
(1) Where any business entity registered as a business entity pursuant to Article 168 supplies goods or provides services, he or she shall prepare an invoice or a receipt (hereinafter referred to as "invoice, etc.") and issue it to a person to whom goods are supplied or services are provided, as prescribed by Presidential Decree. In such cases, when any of the following business entities issues an invoice, he or she shall issue the invoice by the electronic means specified by Presidential Decree (hereinafter referred to as "electronic invoice" in this Act): <Amended on Dec. 23, 2014>
1. A business entity who shall issue electronic tax invoices under Article 32(2) of the Value-Added Tax Act;
2. Any of the business entities specified by Presidential Decree, taking into consideration the amount of gross earnings, etc., except those falling under subparagraph 1.
(2) In cases of consignment sale or sale by an agent of agricultural products, livestock products, fishery products, and forest products exempted from value-added tax pursuant to Article 26(1)1 of the Value-Added Tax Act, a consignee or an agent shall be deemed to have supplied goods and he or she shall prepare and issue an invoice, etc. to a person supplied with the relevant goods; provided, this shall not apply where an invoice, etc. is issued pursuant to paragraph (1), as prescribed by Presidential Decree. <Amended on Act No. 11873, Jun. 7, 2013>
(3) With respect to the imported goods, the head of a customshouse shall issue an invoice to an importer, as prescribed by Presidential Decree.
(4) Paragraphs (1) through (3) shall not apply to cases prescribed by Presidential Decree where it is deemed inappropriate to issue an invoice, etc., such as sale of real estate, etc.
(5) A business entity shall submit aggregate tables of invoices by purchaser and by seller, which he or she has issued or received under paragraphs (1) through (3), (hereinafter referred to as "aggregate table of invoices by purchaser and an aggregate table of invoices by seller") to the head of the tax office having jurisdiction over his or her place of business by the deadline prescribed by Presidential Decree; provided, a person does not need to submit the following aggregate tables of invoices: <Amended on Dec. 23, 2014>
1. An aggregate table of invoices by seller, where an importer has received invoices issued under paragraph (3);
2. An aggregate table of invoices by purchaser and an aggregate table of invoices by seller, where a person has transmitted a detailed statement of issuance of electronic invoices issued or received by him or her to the Commissioner of the National Tax Service under paragraph (8) or (9).
(6) The tax invoices or receipts prepared and issued or aggregate tables of tax invoices by purchaser and by seller submitted under the Value-Added Tax Act shall be deemed invoices, etc. prepared and issued or aggregate tables of tax invoices by purchaser and by seller submitted under paragraphs (1) through (3) and (5).
(7) Matters necessary to prepare and issue invoices, etc. and submit an aggregate table of invoices by purchaser and an aggregate table of invoices by seller shall be prescribed by Presidential Decree.
(8) When a business entity issues an electronic invoice pursuant to the latter part of paragraph (1), he or she shall transmit a detailed statement of the electronic invoice to the Commissioner of the National Tax Service in the form prescribed by Presidential Decree by the deadline specified by Presidential Decree. <Added on Dec. 23, 2014>
(9) Any business entity, other than business entities who shall issue electronic invoices, may issue electronic invoices pursuant to the latter part of paragraph (1) and may transmit detailed statements of such electronic invoices to the Commissioner of the National Tax Service pursuant to paragraph (8). <Added on Dec. 23, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 163-2 (Submission of aggregate table of tax invoices by seller)
(1) Where a business entity obliged to file a report on the present status of his or her place of business pursuant to Article 78(1) or a business entity under Article 78(1)1 has been issued an tax invoice pursuant to Article 32(1) or (7), or 35(1) of the Value-Added Tax Act after having been supplied with goods or services, a business entity obliged to file a report on the present status of his or her place of business pursuant to Article 78(1) or the heir or a resident departing from the Republic of Korea where Article 74 applies pursuant to Article 78(1)1 or a nonresident under Article 121(2) and (5) shall submit an aggregate table of tax invoices by seller to the head of a tax office having jurisdiction over the seat of his or her place of business by no later than the deadline for reporting on the present status of his or her place of business under Article 78 (where Article 74 applies pursuant to Article 78(1)1, referring to the deadline for final return on tax base under Article 74); provided, this shall not apply where he or she has submitted it pursuant to Article 54(5) of the Value-Added Tax Act. <Amended on Jan. 1, 2012;Jan. 1, 2013; Jun. 7, 2013>
(2) Matters necessary to submit an aggregate table of tax invoices by seller shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 163-3 (Purchaser-issued invoice)
(1) Notwithstanding Article 163 of this Act or Article 121 of the Corporate Tax Act, if a resident is supplied with goods or services from a business entity or corporation registered under Article 168 and is unable to obtain an invoice due to the bankruptcy or closure of the business entity or corporation, cancellation or change of the supply contract, or any other reason prescribed by Presidential Decree, he or she may issue an invoice (hereinafter referred to as "purchaser-issued invoice") with the confirmation of the head of the tax office having jurisdiction over the place for tax payment.
(2) The object, method of issuing a purchaser-issued invoice, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Added on Dec. 31, 2022]
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Article 164 (Submission of statement of payment)
(1) Any person who pays any of the following incomes in the Republic of Korea to an individual liable to pay income tax pursuant to Article 2 (including a corporation, a person who pays income by proxy or is delegated or entrusted with the authority to make such payment pursuant to Article 127(5), a taxpayers association under Article 150, a person whose seat of main office or principal office is the place for payment of withholding tax pursuant to Article 7 of this Act or Article 9 of the Corporate Tax Act, and a business entity qualified for consolidated return as a single taxable unit under the latter part of Article 8(3) of the Value-Added Tax Act), shall submit a statement of payment to the head of a tax office having jurisdiction over withholding tax, the commissioner of a regional tax office, or the Commissioner of the National Tax Service, as prescribed by Presidential Decree, by the end of February (referring to March 10 of the following year in cases of the business income under subparagraph 3, the wage and salary income or retirement income under subparagraph 4, the income of a religious person, among other incomes under subparagraph 6, or the service charges under subparagraph 7, and referring to the end of the second month following the month in which the date of temporary or permanent closure of business or the date of dissolution falls, if the entity is temporarily or permanently closed or dissolved) of the year following the taxable period in which the date of such payment falls (with respect to income governed by Article 131, 135, 144-5, or 147, referring to the expiration date of the taxable period for the relevant income; hereafter the same shall apply in this paragraph); provided, in cases of wage and salary income of a daily employed worker prescribed by Presidential Decree among wage and salary income under subparagraph 4, a statement of payment shall be submitted by the last day of the month following the month in which the payment date thereof falls (by the last day of the month following the month in which the date of temporary or permanent closure of business or the date of dissolution falls, if such person suspends or closes its business, or is dissolved): <Amended on Dec. 27, 2010; Jan. 1, 2013; Jun. 7, 2013; Dec. 15, 2015; Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020; Mar. 16, 2021; Dec. 31, 2024>
1. Interest income;
2. Dividend income;
3. Business income subject to withholding;
4. Wage and salary income or retirement income;
5. Pension income;
6. Other income (excluding service charges under subparagraph 7);
7. Service charges prescribed by Presidential Decree;
8. Gains from long-term savings insurances prescribed by Presidential Decree;
9. Deleted. <Dec. 31, 2024>
(2) Paragraph (1) need not apply to income prescribed by Presidential Decree among income under each subparagraph of paragraph (1).
(3) Any person liable for submitting a statement of payment pursuant to paragraph (1) shall either submit the matters mentioned in a statement of payment through the information and communications network defined in subparagraph 18 of Article 2 of the Framework Act on National Taxes, or submit them by means of electronic information storage media, such as diskette. In such cases, any person who pays income prescribed by Presidential Decree among income under each subparagraph of paragraph (1) may submit a statement of payment by methods prescribed by Presidential Decree, such as a cash receipt-issuing device under Article 126-3 of the Act on Restriction on Special cases Concerning Taxation.
(4) Notwithstanding paragraph (3), the Commissioner of the National Tax Service may allow a person engaging in a specific type of business or below a specific scale to submit a statement of payment in writing in accordance with Presidential Decree.
(5) Where any of the documents related to withholding which a withholding agent has submitted after having deducted withholding taxes, as prescribed by Presidential Decree, falls under a statement of payment, with regard to such part submitted, a statement of payment shall be deemed submitted.
(6) If any statement in an aggregate table of invoices by purchaser and an aggregate table of invoices by seller submitted to the head of the tax office having jurisdiction over the place of business pursuant to Article 163(5) (including detailed statements of issued electronic invoices transmitted to the Commissioner of the National Tax Service pursuant to Article 163(8) or (9)) and in an aggregate table of tax invoices by purchaser and an aggregate table of tax invoices by seller submitted to the head of the tax office having jurisdiction over the place of business under the Value-Added Tax Act (including detailed statements of issued electronic tax invoices transmitted to the Commissioner of the National Tax Service pursuant to Article 32(3) or (5) of the Value-Added Tax Act) constitutes a statement of payment, the submission of such statement shall be deemed the submission of a statement of payment. <Amended on Dec. 23, 2014; Dec. 19, 2017>
(7) If a simplified statement of payment is submitted for income specified in Article 164-3(1)2 (excluding business income as prescribed by Presidential Decree pursuant to Article 73(1)4) or Article 164-3(1)3 it shall be deemed that a statement of payment has been submitted for the relevant portion. <Added on Dec. 31, 2022>
(8) If deemed necessary, the head of a tax office having jurisdiction over withholding tax, the commissioner of a regional tax office, or the Commissioner of the National Tax Service may request submission of a statement of payment. <Amended on Dec. 31, 2022>
(9) Any act performed by a person who acts for a payer or is delegated by him or her pursuant to paragraph (1) shall be deemed an act performed by a person himself or herself or the mandator within the limit of the authorization or delegation, and paragraph (1) shall apply thereto. <Amended on Dec. 31, 2022>
(10) Where the Commissioner of the National Tax Service receives a statement of payment on other income prescribed by Presidential Decree among other income under paragraph (1)6, he or she shall provide the details thereof to any person liable to pay tax on the relevant other income through the national tax information and communications network defined in subparagraph 19 of Article 2 of the Framework Act on National Taxes, as prescribed by Presidential Decree. <Amended on Dec. 31, 2022>
(11) Matters necessary to submit a statement of payment pursuant to paragraphs (1) through (10) shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2022>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 164-2 (Special cases concerning obligations to submit statement of payment on domestic source income of nonresidents)
(1) Any person who pays domestic source income under Article 119 to a nonresident (in the case of listing shares under the Financial Investment Services and Capital Markets Act and transferring shares already issued prior to the listing, the term referrs to the corporation that issued the shares) shall submit a statement of payment to the head of a tax office having jurisdiction over the place for tax payment, by no later than the end of February (referring to March 10 of the following year in cases of the income under subparagraph 7 or 8 of Article 119, and referring to the end of two months following the month in which the date of the suspension of his or her business or the date of the closure of his or her business falls where his or her business is suspended or closed) of the year following the taxable period in which the date of such payment falls; provided, this shall not apply where he or she pays income prescribed by Presidential Decree, such as income verified as being subject to non-taxation or tax exemption. <Amended on Jan. 1, 2013; Dec. 29, 2020>
(2) Article 164 shall apply mutatis mutandis to the submission of a statement of payment pursuant to paragraph (1).
[This Article Wholly Amended on Dec. 31, 2009]
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Article 164-3 (Submission of simplified statement of payment)
(1) A person who, in the Republic of Korea, pays any income falling under any of the following subparagraphs (including a corporation, a person who pays income by proxy or is delegated or entrusted with the authority to make such payment pursuant to Article 127(5), a taxpayers association under Article 150, a person whose seat of head office or principal office is the place for payment of a withholding tax pursuant to Article 7 of this Act or Article 9 of the Corporate Tax Act, and a per-business unit taxable entrepreneur under the latter part of Article 8(3) of the Value-Added Tax Act, except for those who have submitted a statement of payment by the deadline for a simplified statement of payment due to the suspension, closure, or dissolution of their business), shall submit a simplified statement of payment of earned income to the head of a tax office having jurisdiction over withholding tax, the commissioner of a regional tax office, or the Commissioner of the National Tax Service, as prescribed by Presidential Decree, by the last day (referring to the last day of the month following the month in which the date of suspension or closure of business or the date of dissolution falls, if such person suspends or closes its business, or is dissolved) of the month following the month in which the date of such payment (with respect to income governed by Article 135, 144-5, or 147, referring to the expiration date of the taxable period for the relevant income) falls: <Amended on Dec. 31, 2019; Mar. 16, 2021; Dec. 31, 2022>
1. Earned Income paid to employees other than daily employeed workers;
2. Business income subject to withholding of tax;
3. Other income falling within Article 21(1)19.
(2) Any person obliged to submit a simplified statement of payment pursuant to paragraph (1) shall submit the matters entered in the simplified statement of payment either through the information and communications network defined in subparagraph 18 of Article 2 of the Framework Act on National Taxes, or by means of electronic information storage media, such as diskettes. In such cases, any person who pays income prescribed by Presidential Decree among income under each subparagraph of paragraph (1) may submit a simplified statement of payment of earned income by methods prescribed by Presidential Decree, such as a cash receipt-issuing device under Article 126-3 of the Act on Restriction on Special cases Concerning Taxation. <Amended on Mar. 16, 2021>
(3) Notwithstanding paragraph (2), the Commissioner of the National Tax Service may allow a person who engages in a certain type of business or whose business scale is not larger than a certain scale to submit a simplified statement of payment in writing, as prescribed by Presidential Decree. <Amended on Mar. 16, 2021>
(4) The head of a tax office having jurisdiction over withholding tax, the commissioner of a regional tax office, or the Commissioner of the National Tax Service may, if deemed necessary, request submission of a simplified statement of payment. <Amended on Mar. 16, 2021>
(5) Matters necessary for submitting a simplified statement of payment under paragraphs (1) through (4) shall be prescribed by Presidential Decree. <Amended on Mar. 16, 2021>
[This Article Added on Dec. 31, 2018]
[Title Amended on Mar. 16, 2021]
[Enforcement Date: Jan. 1, 2027]
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Article 164-4 (Submission of transaction details of virtual assets)
(1) A virtual asset service provider under the Act on the Protection of Virtual Asset Users shall submit data necessary for the imposition of income tax, such as the details of virtual asset transactions, to the head of the tax office having jurisdiction over the place for tax payment, the commissioner of the regional tax office, or the Commissioner of the National Tax Service by the end of the second month following the end of the quarter or year in which the date of transaction falls, as prescribed by Presidential Decree. <Amended on Dec. 31, 2024>
(2) Where a virtual asset service provider under paragraph (1) fails to submit data necessary for the imposition of income tax, such as virtual asset transaction details, the Commissioner of the National Tax Service may issue an order necessary to correct the failure. <Added on Dec. 31, 2024>
[This Article Added on Dec. 29, 2020]
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Article 164-5 (Submission of statements of transactions of overseas stock options)
(1) If a domestic corporation or a foreign corporation having a domestic place of business of a foreign corporation under Article 94 of the Corporate Tax Act has any ground referred to in subparagraph 2 against a person referred to in subparagraph 1, it shall submit the documents specified in subparagraph 3 to the head of the tax office having jurisdiction over the place of tax payment by not later than March 10 of the year following the taxable period in which such ground arises (or the end of the second month after the month in which the date of the suspension, closure, or dissolution of business falls, if such cause occurs): <Amended on Dec. 31, 2024; Oct. 1, 2025>
1. Any of the following executive officers, etc. (including former executive officers, etc.; hereafter the same shall apply in this Article) who are engaged in the domestic place of business of the relevant domestic corporation or foreign corporation:
a. A resident;
b. A non-resident (limited to a person whose all or some of the income accruing from stock options under subparagraph 2a or stock-based compensation under subparagraph 2b (hereafter referred to as "stock options, etc." in this Article) constitutes domestic source income under Article 119);
2. Where an executive officer, etc. falls under any of the following cases:
a. Where he or she exercises a stock option granted by a foreign corporation which is a foreign controlling stockholder prescribed by Presidential Decree (including similar rights to acquire or purchase stocks at a predetermined price);
b. Where he or she receives stock-based compensation (referring to bonuses paid in the form of shares or cash equivalent to the value of shares, as prescribed by Presidential Decree) from a foreign corporation referred to in item a;
3. A transaction statement of stock options, etc., as prescribed by Decree of the Ministry of Finance and Economy, stating the personal details of executive officers, etc. and the details of the grant, exercise, or payment of stock options, etc.
(2) Where a domestic corporation or a foreign corporation with a domestic place of business fails to submit a transaction statement of stock options, etc. under paragraph (1)3 or submits a false statement, the head of the tax office having jurisdiction over the place of tax payment may request the submission or supplementation of the relevant documents.
(3) A person in receipt of a request to submit or supplement a transaction statement of stock options, etc. under paragraph (2) shall submit the relevant documents within 60 days from the date of receipt of such request.
[This Article Added on Dec. 31, 2023]
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Article 165 (Submission of supporting documents for income deduction and tax credits and administrative guidance thereof)
(1) Any person (if actual medical expenses are paid using medical indemnity insurance proceeds under an insurance or deduction contract, this includes the insurance company, etc. that disbursed the insurance proceeds, as well as other persons prescribed by Presidential Decree) who issues supporting documents required to get income deduction and tax credits prescribed by Presidential Decree (hereinafter referred to as "supporting documents for income deduction and tax credits") among the income deduction and tax credits under this Act or the Restriction of Special Taxation Act shall submit the supporting documents for income deduction and tax credits to the Commissioner of the National Tax Service, as prescribed by Presidential Decree, such as use of information and communications networks; provided, this shall not apply to cases prescribed by Presidential Decree, such as where a person who is issued supporting documents for income deduction and tax credits refuses to submit the supporting documents. <Amended on Jan. 1, 2014; Dec. 29, 2020>
(2) Any person who is issued supporting documents for income deduction and tax credits pursuant to paragraph (1) shall not provide them to other persons, use them for a purpose, other than tax purposes, or divulge the details thereof. <Amended on Jan. 1, 2014>
(3) Any person who is not a public official among those who become aware of the details of supporting documents for income deduction and tax credits received pursuant to paragraph (1) shall be deemed a public official when applying penal provisions under the Criminal Act or other Acts. <Amended on Jan. 1, 2014>
(4) The Commissioner of the National Tax Service may guide a person issuing supporting documents for income deduction and tax credits to submit such documents to him or her. <Amended on Jan. 1, 2014>
(5) Matters necessary for guidance under paragraph (4) shall be prescribed by Presidential Decree.
(6) Where the Commissioner of the National Tax Service has obtained consent of a person qualifying for basic deduction on providing information on supporting documents for income deduction and tax credits by methods prescribed by Presidential Decree, such as in writing, he or she may provide a resident with global income under Article 50(1) with the relevant information on his or her dependents. <Amended on Jan. 1, 2014>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Jan. 1, 2014]
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Article 165-2 Deleted. <Dec. 29, 2020>
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Article 165-3 Deleted. <Dec. 31, 2018>
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Article 165-4 2 Deleted. <Dec. 29, 2020>
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Article 166 (Use of data processing information on resident registration)
For the purpose of efficient performance of the affairs concerning the assessment and collection of any income tax, matters necessary for the use of data processing information on resident registration under the Resident Registration Act and registered data processing information under the Act on the Registration of Family Relationships shall be prescribed by Presidential Decree. <Amended on Dec. 27, 2010>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Dec. 27, 2010]
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Article 167 (Submission of certified copy of resident registration card)
(1) Where a resident files a final return on tax base, the head of a tax office having jurisdiction over the place for tax payment shall ascertain his or her spouse, a dependent eligible for deduction, a disabled person eligible for income deduction or a senior citizen eligible for income deduction by a certified copy of his or her resident registration card (referring to a family census register, where his or her family relationship is not ascertained by a certified copy of resident registration card; hereinafter referred to as "certified copy of resident registration card, etc.") through data processing information; provided, where a resident does not agree with ascertainment through data processing information by the head of a tax office having jurisdiction over the place for tax payment shall submit his or her final return on the tax base with a certified copy of resident registration card, etc. attached thereto, however, he or she may choose not to submit a certified copy of his or her resident registration card, etc. where there is no change in his or her spouse, a dependent eligible for deduction, a disabled person eligible for income deduction or a senior citizen eligible for income deduction, where he or she previously submitted a certified cope of his or her resident registration card, etc.
(2) If a nonresident files a final return on tax base, he or she shall submit a certified copy of his or her foreigner registration card or any documents corresponding thereto, to the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 168 (Registration of business entity and assignment of taxpayer code numbers)
(1) Any business entity who starts up a new business shall register his or her business with the head of the tax office having jurisdiction over the place of business, as prescribed by Presidential Decree. <Amended on, Dec. 31, 2018>
(2) Any business entity registered as a business entity pursuant to the Value-Added Tax Act shall be deemed registered pursuant to paragraph (1) concerning the relevant business.
(3) Article 8 of the Value-Added Tax Act shall apply mutatis mutandis to any business entity registered as a business entity under this Act. <Amended on Act No. 11873, Jun. 7, 2013>
(5) The head of a tax office having jurisdiction over the place of business or the seat of an association, a foundation, or any other organization, other than an organization deemed a corporation, may assign a taxpayer code number, as prescribed by Presidential Decree, to any of the following persons:
1. Any person with global income who is not a business entity;
2. Any person deemed necessary for efficient processing of tax information, and post-factum inspection on income deduction, etc., such as an organization registered under the Assistance for Non-Profit, Non-Governmental Organizations Act.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 169 (Grant of subsidy)
The Commissioner of the National Tax Service shall grant a subsidy to any person who collects and pays income tax on wage and salary income under Article 150, as prescribed by Presidential Decree. <Amended on Dec. 31, 2024>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 170 (Inquiry and investigation)
(1) If a public official who performs administrative affairs for income tax deems necessary for performing his or her duties, he or she may inquire of any of the following persons or investigate relevant books of accounts, documents, or other things, or order him or her to submit them; provided, a public official may investigate only the part related to religious persons’ income in books of accounts, documents, or other things of a religious organization with regard to religious persons’ income under Article 21(1)26 (including cases falling under Article 21(3)) or may order a religious organization to submit only the part related to religious persons’ income in books of accounts, documents, or other things of the religious organization: <Amended on Jan. 1, 2012; Dec. 15, 2015; Dec. 31, 2018; Jun. 9, 2020; Dec. 29, 2020>
1. Any person liable to pay tax or any person deemed liable to pay tax;
2. A withholding agent;
3. A taxpayers association;
4. Any person obliged to submit a statement of payment;
5. A withholding agent prescribed in Articles 156 and 156-3 through 156-6;
6. A tax manager prescribed in Article 82 of the Framework Act on National Taxes;
7. Any person deemed to do business with a person prescribed in subparagraph 1;
8. A trade association organized by persons liable to pay tax and an organization corresponding thereto;
9. Any person who issues receipts for donation.
(2) Where applying paragraph (1), a public official engaging in affairs concerning income tax applies shall not abuse his or her authority for other purpose beyond the extent necessary for performing official duties. <Added on, Dec. 31, 2018; Jun. 9, 2020>
[This Article Wholly Amended on Dec. 31, 2009]
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Article 171 (Consultation)
If it is required for returns, determination, rectification or investigation on income tax, the head of a tax office, the commissioner of a regional tax office or the Commissioner of the National Tax Service may consult matters concerning income tax, with a trade association organized by business entities and an organization corresponding thereto, or any person who is well informed of the circumstances as to the relevant business.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 172 (Perusal of documents related to sale, registration and entry)
Where the head of the competent tax office or the commissioner of the competent regional tax office, or a tax official entrusted with the authority requests the perusal or reproduction of the documents related to data under the following subparagraphs in order to ascertain the property and income of any individual, the relevant agencies shall comply with such request unless they have any justifiable grounds:
1. Data on sale, entry or registration of a house, land, factory foundation, mining industry foundation, ship, aircraft, construction machinery, automobile, etc.;
2. Data on income, assets and pay of beneficiaries, etc. under the National Basic Living Security Act;
3. Data on income, assets and pay of subscribers, etc. under the National Pension Act;
4. Data on income, assets and medical care expenses of subscribers, etc. under the National Health Insurance Act;
5. Data on wages and pay of the insured, etc. under the Employment Insurance Act;
6. Data on wages and pay of beneficiaries, etc. under the Industrial Accident Compensation Insurance Act;
7. Data prescribed by Presidential Decree, similar to the data under subparagraphs 1 through 6.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 173 (Submission of taxation data for service providers)
(1) Any person prescribed by Presidential Decree, as an individual liable to pay income tax pursuant to Article 2 who provides a place of business related to provision of services to the persons who provide services prescribed by Presidential Decree (hereafter referred to as "service provider" in this paragraph), such as chauffeur service, parcel delivery, etc. under the Korea Standard Industry Code, shall submit taxation data on the service providers, and submit them to the head of a tax office having jurisdiction over the seat of the place of business, the commissioner of a regional tax office, or the Commissioner of the National Tax Service by the end of the month following the month in which the amount of earnings or the amount of income is generated. <Amended on Aug. 10, 2021>
(2) If a person required to submit taxation data under paragraph (1) fails to do so or submits incorrect data, the Commissioner of the National Tax Service may issue orders for necessary rectifications. <Amended on Aug. 10, 2021>
(3) The State and local governments may provide necessary administrative and financial support to persons required to submit taxation data under paragraph (1) if they submit such data in good faith.
(4) Matters necessary for the method of preparing taxation data, etc. under paragraph (1), and administrative and financial support under paragraph (3) shall be prescribed by Presidential Decree. <Amended on Aug. 10, 2021>
[This Article Wholly Amended on Dec. 31, 2009]
[Title Amended on Aug. 10, 2021]
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Article 174 (Submission of materials for payment of insurance payment on loss)
When any non-life insurance company under the Insurance Business Act (hereafter referred to as "non-life insurance company" in this Article) has paid insurance as a result of a lawsuit, it shall submit the materials for the relevant insurance payment on loss, as prescribed by Presidential Decree, to the head of a tax office having jurisdiction over the non-life insurance company by no later than the end of February of the year following the taxable period in which the date of payment falls.
[This Article Wholly Amended on Dec. 31, 2009]
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Article 174-2 (Submission of detailed statements of trading of derivatives or stocks)
A financial investment business entity prescribed in Article 8(1) of the Financial Investment Services and Capital Markets Act shall submit any of the following documents to the head of the competent tax office by the end of the month following the end of the quarter in which the relevant transactions or activities took place, as prescribed by Presidential Decree; provided, the documents specified in subparagraph 3 shall be submitted to the Commissioner of the National Tax Service by two months after the end of the month in which the Commissioner of the National Tax Service requests to submit them: <Amended on Dec. 23, 2025>
1. Documents necessary for imposing capital gains tax, including detailed statements of transactions of derivatives, etc.;
2. Documents necessary for imposing capital gains tax, including detailed statements of transactions of stocks, where a financial investment business entity acts as a broker for trading stocks through over-the-counter transactions under Article 286 of the Financial Investment Services and Capital Markets Act;
3. Documents requested by the Commissioner of the National Tax Service, as prescribed by Presidential Decree, including detailed statements of transactions of stocks, etc. under each of the following items as necessary for imposing capital gains tax:
a. Stocks, etc. falling under Article 94(1)3a1);
b. Stocks, etc. falling under Article 94(1)3c.
(1) If a non-resident receives domestic source income under Article 119 through a foreigner consolidated account (referring to an account opened in the name of a foreign financial investment business entity under Article 12(2)1b of Financial Investment Services and Capital Markets Act for the purpose of placing and settling securities transactions on behalf of multiple foreign investors; hereinafter the same shall apply), the person who pays such domestic source income through the foreigner consolidated account shall withhold income tax from the amount paid to the holder of the foreigner consolidated account, at an amount specified in the subparagraphs of Article 156(1).
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Article 174-3 Deleted. <Dec. 29, 2020>
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Article 175 (Sample surveys)
(1) The head of a tax office or the commissioner of a regional tax office the having jurisdiction over the place for tax payment shall conduct a sample survey within two years from the end of the relevant taxable period to examine the appropriateness of the inclusion of donations in necessary expenses or of tax credits for the persons specified by Presidential Decree (hereafter referred to as "persons eligible for donation deduction" in this Article), among residents who were permitted to include donations in necessary expenses under Article 34 or who were permitted tax credits for donations under Article 59-4(4) or nonresidents under Article 121(2) and (5). <Amended on Jan. 1, 2013; Jan. 1, 2014>
(2) A sample survey shall be conducted on the number of persons equivalent to the rate prescribed by Presidential Decree among persons eligible for donation deduction.
(3) Matters necessary for methods of and procedures for a sample survey shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Dec. 31, 2009]
CHAPTER VII PENALITY PROVISIONS
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Article 176 Deleted. <Dec. 29, 2020>
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Article 177 (Administrative fine for violation of ordered matters)
The head of the competent tax office shall impose on and collect from a business entity (including a corporation in the case of subparagraphs 3 and 4) violating any ordered matter falling under any of the following subparagraphs an administrative fine not exceeding 20 million won: <Amended on Aug. 10, 2021; Dec. 8, 2021; Dec. 31, 2024>
1. An order to a credit card member store under Article 162-2(5);
2. An order to a cash receipt merchant under Article 162-3(8);
3. An order to a person required to submit taxation data under Article 173(2);
4. Orders issued to a virtual asset business entity under Article 164-4(2).
[This Article Added on Dec. 31, 2018]
ADDENDA <Act No. 4803, Dec. 22, 1994>
Article 1 (Enforcement date)
(1) This Act shall enter into force on January 1, 1996; provided, Articles 17(2) (referring to the amended provisions of the previous Article 26(1)), 32(1) (referring to the amended provisions of the previous Article 39(1)), 47(1) (referring to the amended provisions of the previous Article 61(1)), 69(1) (referring to the amended provisions of the previous Article 90(1)), 84 (referring to the amended provisions of the previous Article 130), 99 (referring to the amended provisions of the previous Article 60), 105(1) (referring to the amended provisions of the previous Article 95(1)), 163 (referring to the amended provisions of the previous Article 189), 164(7) (referring to the amended provisions of the previous Article 193(6)) and 166 (referring to the amended provisions of the previous Article 195) shall enter into force on January 1, 1995, and the provisions of Article 16(1)11, on January 1, 1999, respectively.
(2) The provisions of Article 47(1) (referring to the amended provisions of the previous Article 61(1)) shall enter into force on January 1, 1995, but the following amount shall be deducted from any wage and salary income accruing from January 1, 1995 to December 31, 1995, regardless of the provisions of Article 47(1). In such cases, if the amount of deduction exceeds 6,900,000 won, 6,900,000 won shall be deducted:
<Amount of Wage> <Amount of Deduction>
3,100,000 or less won Amount of wage
Over 3,100,000 won 3,100,000 won + 30/100 of the amount exceeding 3,100,000 won
Article 2 (General applicability)
This Act shall apply to the portion of income accruing for the first time after this Act enters into force; provided, the provisions of Article 69(1) (referring to the amended provisions of the previous Article 90(1)) shall apply to the first portion to be sold after January 1, 1995.
Article 3 (Applicability to capital gains)
The provisions of this Act concerning capital gains shall apply to the first portion to be transferred after the corresponding Articles enter into force.
Article 4 (Applicability to excessive refund of workplace mutual-aid association)
The provisions of Article 16(1)11 shall apply to the first portion to be paid after joining the workplace mutual-aid association, after January 1, 1999.
Article 5 (Applicability to final return, etc. on tax base)
The provisions of Articles 24 through 36, 38 through 45, 57, 70(4)3 and 4, 78 through 80, 81(1), (2) and (6), 85 and 160 shall apply to those the first return term of which arrives after January 1, 1996.
Article 6 (Applicability to deduction of housing savings, etc.)
The provisions of Article 52(1)5 shall apply to the amount of savings paid for the first time after January 1, 1996, or to the repayment of principal and interest of the loan borrowed to acquire or rent a house after January 1, 1996; provided, for a person who is to benefit from the tax credit on the housing funds repayment as prescribed in Article 6 of the previous Act on the Assistance to Residential Stability and Lump Sum-Raising Savings of Workers, on January 1, 1996, even with respect to any loan for the house acquired or rented before December 31, 1995, the provisions of item b of the said subparagraph shall apply to the amount of repayment made for the first time after January 1, 1996.
Article 7 (Applicability to withholding tax rate)
The provisions of Article 129(1) and (2) shall apply to the first payment of any income accruing after January 1, 1996.
Article 8 (Fictitious date of acquisition of transfer assets)
Any assets prescribed in subparagraph 1 of Article 94 and acquired before December 31, 1984, shall be deemed to have been acquired in January 1, 1985, and the assets prescribed in subparagraphs 2 through 5 of the said Article and prescribed by the Presidential Decree, shall be deemed to have been acquired on the date determined by the Presidential Decree.
Article 9 (Transitional measures concerning non-taxable interest)
Income tax shall not be levied on any interest accruing from the follow- ing bonds or savings:
1. National housing bonds issued by the Housing and Commercial Bank under the Housing Construction Promotion Act before January 1, 1982;
2. Bonds issued before January 1, 1983, and falling under any of the following items:
a. Industrial reconstruction bonds issued by the Government under the previous Industrial Reconstruction Bonds Act;
b. Requisition compensation bonds issued by the Government under the Act on Special Measures for Readjustment of Requisitioned Property;
c. Telegraph and telephone bonds issued by the Government under the previous Provisional Measures Act Incidental to Expansion of Communication Facilities;
d. National housing bonds issued by the Government under the Housing Construction Promotion Act;
e. Subway bonds, road bonds and waterworks bonds issued by local governments under the Local Finance Act;
f. Land development bonds issued by the Korea Land Corporation under the Korea Land Corporation Act;
3. Interest accruing from any savings in the National Savings Association before January 1, 1991.
Article 10 (Special cases concerning withholding tax rate)
The withholding tax rate of any income tax on January 1, 1991 on the interest and dividend incomes accruing before January 1, 1991, and the defense and education taxes as prescribed by the Defense Tax Act and the Education Tax Act before December 31, 1990, which are not paid, shall be subject to the conditions as prescribed in Article 16 of the Addenda of the Act No. 4281 (Amendment of the Income Tax Act).
Article 11 (General transitional measures)
Any income tax assessed or to be assessed pursuant to the previous pro- visions before the corresponding Articles of this Act enter into force, shall be governed by the previous provisions.
Article 12 (Relation with other Acts and subordinate statutes)
In cases where other Acts and subordinate statutes cite the provisions of the previous Income Tax Act as of January 1, 1996, if this Act includes the provisions corresponding thereto, the corresponding provisions of this Act shall be deemed cited in lieu of the previous provisions.
Article 13 Omitted.
ADDENDA <Act No. 4856, Dec. 31, 1994>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 1995.
Articles 2 through 11 Omitted.
ADDENDA <Act No. 5031, Dec. 29, 1995>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 1996; provided, the amended provisions of Articles 17, 56(1) and 165, and Article 8 of the Addenda of the Act (Act No. 4803) shall enter into force on January 1, 1997, and those of subparagraph 4-2 of Article 12 and Article 20-2(1)1, on January 1, 2004, respectively. <Amended on Dec. 13, 1997; Act No. 6292, Dec. 29, 2000>
Article 2 (Applicability)
This Act shall apply to the portion of income accruing on or after the date this Act enters into force.
Article 3 (Applicability concerning temporary property income)
The amended provisions of Article 4(1)1, subparagraph 4-2 of Article 12, and Article 20-2, shall apply to the first income portion accruing after the respective Article enters into force.
Article 4 (Applicability concerning application for reduction and exemption of tax amount)
The amended provisions of Article 13 shall apply to the first portion the tax base of which is returned, or the portion of pay received for furnishing any labor, after this Act enters into force.
Article 5 (Applicability concerning calculation of income amount of bonds, etc.)
(1) The amended provisions of Article 46 shall apply to the first portion the interest, etc. of which is paid, or which is transferred to a corporation, after this Act enters into force.
(2) With respect to the bonds, etc. issued before this Act enters into force, and the interest, etc. of which is paid, or which are sold to a corporation, for the first time after this Act enters into force, the provisions of Ar- ticle 46 shall apply even to the amount equivalent to the interest accruing from the issue date of such bonds, etc. or the immediately preceding with- holding day, to December 31, 1995, deeming that the interest income is reverted to the person who receives the interest, etc., but the calculation of the tax amount at the time of withholding shall be subject to the previous provisions.
Article 6 (Applicability concerning special case of calculation of interest income amount due to termination before maturity)
The amended provisions of Article 46-2 shall apply to the first portion of the interest income accruing after this Act enters into force, which is reduced by a termination before maturity.
Article 7 (Applicability concerning non-collection of small amount)
The amended provisions of Article 86 shall apply to the first portion the withholding time of which arrives after this Act enter into force.
Article 8 (Applicability concerning capital gains)
(1) The provisions on capital gains in this Act shall begin to apply to the portions transferred after the relevant provisions enter into force; provided, the amended provisions of Article 165 shall begin to apply to the portions of concluding the real estate sales contract (referring to the date of grounds for registration entered in the register) after January 1, 1997. <Amended on Dec. 30, 1996>
(2) The amended provisions of Article 112-2 shall apply to the first portion the payment term of which arrives after this Act enters into force.
(3) The amended provisions of Article 8 of the Addenda of the Act (Act No. 4803) shall apply to the first portion transferred after January 1, 1997.
Article 9 (Applicability concerning income of nonresident accruing from domestic source)
The amended provisions of subparagraph 1 of Article 119 shall apply to the first portion of the income accruing and paid after this Act enters into force.
Article 10 (Applicability concerning liability for withholding taxes)
The amended provisions of Article 127(6) shall apply to the first portion of the income accruing and paid after this Act enters into force.
Article 11 (Applicability concerning submission of statement of payment record)
The amended provisions of Article 164(1) shall apply to the first portion of the income accruing and paid after this Act enters into force.
Article 12 (Applicability concerning real estate transfer report, etc.)
The amended provisions of Article 165 shall apply to the first portion transferred after January 1, 1997.
Article 13 Omitted.
ADDENDA <Act No. 5108, Dec. 29, 1995>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 5155, Aug. 14, 1996>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Act shall apply to the taxable period on which the enforcement date of this Act falls.
Article 3 (Refund of overpayment of tax by retirees in period of assessment)
(1) When the tax amount on wage and salary income for the year 1996 was settled in the year-end accounts or the tax amount on the retirement in- come was withheld under the previous provisions due to the retirement taken place before this Act enters into force, and such tax amount exceeds the amount to be determined under the amended provisions of this Act, the refunded thereof may be made by the report of determined tax base under Article 70 or 71.
(2) Application for refund under paragraph (1) or other necessary matters shall be determined by Presidential Decree.
ADDENDA <Act No. 5191, Dec. 30, 1996>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 1997.
Article 2 (General applicability)
This Act shall apply to the portion of income accruing on or after the date this Act enters into force.
Article 3 (Applicability to dividend income of member of employee stockholder association)
The amended provisions of Article 14 shall apply to the first portion, the return period of which arrives after this Act enters into force.
Article 4 (Applicability to penalty tax due to unfaithful return, etc.)
The amended provisions of Articles 81 and 163 shall apply to the first statement of accounts on the portion of goods and services to supply or to be supplied after this Act enters into force.
Article 5 (Applicability to capital gains tax)
(1) The provisions concerning capital gains in this Act shall apply to the first portion transferred after this Act enters into force.
(2) The amended provisions of Articles 95(4) (proviso), 97(4) and (6), 101(2) and 104(2) (proviso) shall apply to the first portion which is donated by a spouse and is transferred after this Act enters into force.
(3) The amended provisions of Article 112-2 shall apply to the first portion, the payable period of which arrives after this Act enters into force.
Article 6 (Applicability to domestic source income)
The amended provisions of subparagraph 11 of Article 119 shall apply to the first portion of income paid after this Act enters into force.
ADDENDA <Act No. 5193, Dec. 30, 1996>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 1997.
Articles 2 through 15 Omitted.
ADDENDA <Act No. 5259, Jan. 13, 1997>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 13 Omitted.
ADDENDA <Act No. 5291, Jan. 13, 1997>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 5374, Aug. 28, 1997>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 1998.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 5424, Dec. 13, 1997>
(1) (Enforcement date) This Act shall enter into force on January 1, 1998.
(2) (Applicability to special deduction) The amended provisions of Article 52 shall apply to the portion paid for infant caring fees on or after the date this Act enters into force.
ADDENDA <Act No. 5493, Dec. 31, 1997>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
Article 3 (General transitional measures)
Except as otherwise expressly provided for in this Act, the former emergency order shall apply to guaranteeing confidentiality of financial transactions done before this Act enters into force, changing non-real-name financial assets to real-name assets, and withholding income tax on the income accruing from financial assets before this Act enters into force.
Articles 4 and 5 Omitted.
Article 6 (Imposition of penalty surcharges on persons changing non-real-name assets to real-name assets)
(1) If a customer changes the holder's name of any existing financial asset to his or her real name after this Act enters into force, the relevant financial institution shall withhold the amount calculated by applying 50/100 of the value of the financial asset as at the date the emergency order is enforced, as a penalty surcharge; and shall pay the amount to the Government by the tenth day of the month immediately following the month in which the amount is withheld.
(2) Where it is deemed impracticable for a customer who holds any financial asset to change the holder's name of such financial asset to his or her name, due to any circumstance specified by Presidential Decree, no penalty surcharge shall be imposed on such customer, if the customer changes the holder's name of such asset to his or her real name within one month from the day the circumstance ceases to exist, notwithstanding paragraph (1).
(3) If a financial institution fails to pay any penalty surcharge withheld or to be withheld under paragraph (1) or fails to pay the full amount of any penalty surcharge, by the deadline, the Minister of Finance and Economy shall collect an amount equivalent to 10/100 of the unpaid penalty surcharge or shortfall, as past due penalty, from such financial institution, in addition to the unpaid penalty surcharge or shortfall.
(4) The Minister of Finance and Economy may delegate his or her authority to administer the collection and payment of penalty surcharges and past due penalties and the disposal and refund of penalty surcharges and past due penalties under paragraphs (1) and (3) (hereinafter referred to as "collection, etc.") to the Commissioner of the National Tax Service.
(5) The National Tax Collection Act, the Framework Act on National Taxes, and the Income Tax Act shall apply mutatis mutandis to collecting, etc. penalty surcharges and past due penalties under paragraphs (1) and (3). In such cases, the term "national tax" shall be construed as "penalty surcharge."
Article 7 (Withholding of income tax on assets changed to real-name assets)
(1) A financial institution shall withhold the total amount of shortfalls in income tax withheld under the following on the interest and dividend income accruing from existing financial assets changed to real-name assets after this Act enters into force; and shall pay the amount to the Government by the tenth day of the month immediately following the month in which such assets are changed to real-name assets:
1. The balance calculated by subtracting the amount of income tax already withheld from the amount of income tax to be withheld by applying the withholding tax rate specified in Article 5 on the interest and dividend income accruing after this Act enters into force;
2. The balance calculated by subtracting the amount of income tax already withheld from the amount of income tax calculated by applying the withholding tax rate specified in Article 9 of the former emergency order to the interest and dividend income that accrued until before this Act enters into force, from October 13, 1993;
3. The withheld amount of income tax calculated according to Article 8(1) of the former emergency order on the interest and dividend income that accrued until October 12, 1993.
(2) The amount of income tax to be withheld under paragraph (1) shall not exceed the value of financial assets on the date such assets are changed to real-name assets.
(3) Article 158(1) of the Income Tax Act shall not apply where a financial institution has withheld and paid income tax in accordance with paragraph (1).
Articles 8 and 9 Omitted.
Article 10 (Special cases, etc. concerning tax investigation into investments, etc. in small and medium enterprises)
(1) If a resident prescribed in Article 1 of the Income Tax Act makes a contribution or investment in any of the following cases during the period specified by Presidential Decree, no investigation shall be conducted into the source, etc. of the funds related the contribution or investment, notwithstanding tax-related Acts; and the taxes that the resident becomes obligated to pay before such contribution or investment is made shall not be levied on such funds; provided, the foregoing shall not apply where a tax is imposed on any ground other than the contributed or invested funds:
1. Where a resident invests in any of the small and medium enterprises specified by Presidential Decree (limited to corporations);
2. Where a resident invests in any of the entities specified by Presidential Decree, among the investment companies for the establishment of small and medium enterprises and the small and medium starting business investment associations under the Support for Small and Medium Enterprise Establishment Act and other similar corporations or associations;
3. Where a resident invests in any of the financial institutions specified by Presidential Decree, among financial institutions financing small and medium enterprises;
4. Where a resident invests in beneficiary certificates issued by a venture business investment trust, defined in Article 13-3(1)2 of the Act on Regulation of Tax Reduction and Exemption.
(2) through (5) Omitted.
Article 11 Omitted.
Article 12 (Special cases concerning taxation on income from financial assets)
(1) Notwithstanding Article 14 of the Income Tax Act, the amounts of interest income and dividend income shall not be added in calculating the tax base of global income under Article 14(2) of the same Act for the taxable period in which January 1, 1998 falls and subsequent taxable periods thereafter; provided, the foregoing shall not apply to the amount of income under any subparagraph of Article 14(4) of the Income Tax Act.
(2) Notwithstanding Article 129(1)1a and c and (1)2 of the Income Tax Act, the withholding tax specified in the same provisions shall be 20/100; provided, the withholding tax rate for the interest income or dividend income received on or after January 1, 1998, out of the interest income or dividend income that accrued on or before December 31, 1997 (limited to those that shall not be added in calculating the tax base of global income under paragraph (1)), shall be 15/100.
(3) Paragraph (2) shall begin to apply from the first income accruing and paid after January 1, 1998.
(4) Notwithstanding Article 164 of the Income Tax Act, regarding the interest income or dividend income paid to a resident on or after January 1, 1998, a statement of payment or the duplicate of a withholding tax receipt shall not be submitted to the head of a tax office, the commissioner of a regional tax office, or the Commissioner of the National Tax Service (hereinafter referred to as the "Commissioner of the National Tax Service or other competent authority"); provided, the foregoing shall not apply to the following cases:
1. Where interest income or dividend income shall be added in calculating the tax base of global income;
2. Where any tax rate lower than the withholding tax rate specified in paragraph (2) shall apply to income tax or dividend income or where interest income or dividend income is eligible for non-taxation of income tax or exemption from or reduction of income tax;
3. Where the Commissioner of the National Tax Service or other competent authority requests a person to submit a statement of payment, etc., as prescribed by Presidential Decree, to verify the withholding tax amount or non-taxation, tax exemption or reduction, etc.
(5) The Commissioner of the National Tax Service or other competent authority shall not use a statement of payment or a statement of withholding tax regarding interest income or dividend income as a ground for taxation, except for a just cause, such as an inquiry into property of a delinquent taxpayer.
(6) Matters necessary for special cases concerning taxation on income from financial assets under paragraphs (1) through (5) shall be prescribed by Presidential Decree.
Articles 13 and 14 Omitted.
ADDENDA <Act No. 5503, Jan. 13, 1998>
Article 1 (Enforcement date)
This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Act No. 5532, Apr. 10, 1998>
(1) (Enforcement date) This Act shall enter into force on the first day of the month following the month in which the date of its promulgation falls.
(2) (Applicability to special repair appropriation fund) The amended provisions of Article 30 shall apply to the portion calculated as necessary expenses in the taxable year which terminates on or after the date this Act enters into force.
(3) (Applicability to withholding tax rate) The amended provisions of Article 129 shall apply to income paid on or after the date this Act enters into force.
(4) (Transitional measures) If there is special repair appropriation fund calculated under Article 30 of the former Act as at the time this Act enters into force, it shall be offset with the cost for special repair or be counted into the total income amount.
ADDENDA <Act No. 5552, Sep. 16, 1998>
Article 1 (Enforcement date)
This Act shall enter into force on the first day of the month following the month in which is included the day of the promulgation of this Act.
Article 2 (Applicability to withholding tax rate)
(1) The amended provisions of Article 62(1)1a2) shall apply to the taxable period in which the date this Act enters into force falls.
(2) The amended provisions of Article 129 shall apply to income paid on or after the date this Act enters into force; provided, for bonds, etc. under Article 46(1), the said Article shall apply to the bonds, etc. issued on or after the date this Act enters into force.
Article 3 Omitted.
Article 4 (Applicability following Amendment of other Acts)
(1) The amended provisions of the Act on Special Tax for Rural Development as prescribed in Article 3(1) of the Addenda shall apply to income accruing on or after the date this Act enters into force; provided, for bonds, etc. under Article 46(1), it shall apply to the portion issued on or after the date this Act enters into force.
(2) The amended provisions of the Act on Real Name Financial Transactions and Guarantee of Secrecy as prescribed in Article 3(2) of the Addenda shall apply to the portion of income paid on or after the date this Act enters into force; provided, for bonds, etc. under Article 46(1), it shall apply to the portion issued on or after the date this Act enters into force.
ADDENDA <Act No. 5559, Sep. 16, 1998>
Article 1 (Enforcement date)
This Act shall enter into force two months after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA <Act No. 5580, Dec. 28, 1998>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 1999; provided, the amended provisions of Articles 17(2) (limited to the part concerning division), 40(3)3 and 48(1)1 shall enter into force on the date of its promulgation, whereas the amended provisions of Article 81(8) through (10) shall enter into force on January 1, 2000, and the amended provisions of Articles 163(2) and 165(1), (2), and (5) shall enter into force on July 1, 1999.
Article 2 (General applicability)
This Act shall apply to all income proportions accruing on or after the date this Act enters into force; provided, the amended provisions of Articles 17(2) (limited to the part concerning division), 40(3)3 and 48(1)1 shall enter into force on or after the taxable period which includes the date this Act enters into force, and the amended provisions of Article 82(1)3 shall apply from the portion where application for occasional assessment is made on or after the date this Act enters into force.
Article 3 (Applicability to capital gains tax)
The amendments regarding capital gains in this Act, shall apply to the portion which includes the transfer on or after the date this Act enters into force.
Article 4 (Applicability to deemed dividend)
(1) The amended provisions of Article 17(2)2 shall apply to the portion which is capitalized on or after the date this Act enters into force; provided, the amended provisions of item a of the said subparagraph (limited to the marginal gain accruing from evaluation of corporations undergoing merger or that from evaluation of dividing companies) shall apply to the portions accruing from the merger on or after the date this Act enters into force or the division during the taxable period which includes the date this Act enters into force, which have been capitalized.
(2) The amended provisions of Article 17(2)6 shall apply to the portion which divides during and after the taxable period in which is included the date this Act enters into force.
Article 5 (Applicability to transfer of securities possessed by nonresident who has no domestic business place)
The amended provisions of Articles 126(3) and 156(1)4 shall apply to the portion which includes the transfer on or after the date this Act enters into force.
Article 6 (Applicability to entry and delivery of account statement of consignee of products of agriculture, livestock and forestry)
The amended provisions of Article 163(2) shall apply to the portion of goods supplied on or after July 1, 1999.
Article 7 (Special cases regarding exclusion of entertainment expenses from necessary expenses)
(1) In the application of Article 35(1)3, if the taxable period terminates before December 31, 1999 from the date this Act enters into force, the application ratio shall be as follows notwithstanding the amended chart in the said subparagraph:Income Amount Application Ratio Under 10 billion won30/10,000 Over 10 billion won: Income Amount Application Ratio Under 10 billion won30/10,000 Over 10 billion won
(2) In the application of Article 35(2) and (4), during the taxable periods which terminate before December 31, 1999 after this Act enters into force, the portion of secret expense under the previous provisions of the proviso to Article 35(3), within the limit of the amount equivalent to 10/100 of the total amount calculated under the amended provisions of Article 35(1), shall be deemed entertainment expense, and the amended provisions of Article 35(2) shall not apply thereto.
Article 8 (Refund of overpaid tax concerning premature retirement)
(1) In the application of the amended provisions of Article 48(1)1, if a taxpayer was imposed the withholding tax on the retirement income tax amount for the year 1998 of a resident where the previous provisions were applied due to his or her retirement before this Act enters into force, and the tax amount concerned exceeds the amount of tax to be paid under the amended provisions of this Act, the tax payer may be refunded the amount that was overpaid by filing a final return on tax base pursuant to Article 71.
(2) Matters necessary for the request of refund under paragraph (1) shall be determined by Presidential Decree.
ADDENDA <Act No. 5994, Aug. 31, 1999>
(1) (Enforcement date) This Act shall enter into force on the date of its promulgation.
(2) (General applicability) This act shall apply from the part of taxable period whereto the date this Act enters into force belongs.
(3) (Applicability concerning transfer report of real estate) The amended provisions of Article 165(2) shall apply from the part of transfer on or after July 1, 1999.
ADDENDA <Act No. 6051, Dec. 28, 1999>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2000; provided, the amendment provisions of Articles 14, 62 and 129, and the amended provisons of Article 12 of the Addenda of Act No. 5493, the Act on Real Name Financial Transactions and Guarantee of Secrecy under the provisions of Article 6(2) of the Addenda shall enter into force on January 1, 2001, and the amended provisions of Articles 81(1) and 87(2) shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Act shall apply to the portion of income which accrues on or after the date this Act enters into force; provided, the amended provisions of Articles 14, 62 and 129, and the provisions of Article 12 of the Addenda of the Act No. 5493, the Act on Real Name Financial Transactions and Guarantee of Secrecy under the provisions of Article 6(2) of the Addenda shall apply to the portion of income which accrues and is paid on or after January 1, 2001, and the amended provisions of Articles 81(1) and 87(2) shall apply to the portion of the first taxable period belonging to the date on which this Act is promulgated.
Article 3 (Applicability to interest and discount amount of long-term bonds)
With regard to long-term bonds under Article 62(5) which carry a period of not less than 10 years from the date of issuance to the date of final redemption, in cases where a resident, who is to be paid with interest and discount amount, which accrue before December 31, 2000, after January 1, 2001, files an application for the separate taxation on the interest income from the long-term bonds to the head of the competent district tax office pursuant to Article 62(5), the tax rate of 25/100 shall apply to the interest and discount amount which accrue before December 31, 2000.
Article 4 (Taxation special case of provisions concerning withholding tax rate and applicability)
In applying the amended provisions of item c of Article 129(1), the withholding tax rate on the interest income amount falling under each of the following subparagraphs shall be 20/100 notwithstanding the said provisions:
1. The income accruing from January 1 to December 31, 2000; provided, the income paid before December 31, 1999 shall be excluded;
2. The income paid from January 1 to December 31, 2000, which accrues after January 1, 2001.
Article 5 (Applicability to capital gains tax)
(1) The provisions concerning capital gains tax in this Act shall apply to the portion of transfer on or after the date this Act enters into force.
(2) The amended provisions of Article 99(1)1b and (3) shall apply to the portion transferred on or after January 1, 2001; provided, with regard to assets falling under Article 99(1)1b, the calculation of the assessed value of the portion of such assets transferred from January 1 to December 31, 2000 shall be governed by the previous previsions.
Article 6 Omitted.
Article 7 (Applicability following amendment of other Acts)
The amended provisions of the Act on Special Tax for Rural Development under the provisions of Article 6(1) of the Addenda and the amended provisions of Article 5 of the Act on Real Name Financial Transactions and Guarantee of Secrecy under Article 6(2) of the Addenda shall ap- ply to the portion of income accruing on or after the date this Act enters into force. In such cases, the tax rate (15/100 respectively) to be applied after January 1, 2001 shall apply to the portion of income which accrues and is paid after January 1, 2001.
ADDENDA <Act No. 6124, Jan. 12, 2000>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 6276, Oct. 23, 2000>
(1) (Enforcement date) This Act shall enter into force on the first day of the month following the month in which the date of its promulgation falls.
(2) (General applicability) This Act shall apply to the portion paid on or after the date this Act enters into force; provided, the provisions concerning contributions and the amended provisions of Article 52(1)6 from among the amended provisions of Articles 34(1) through (3) and 52(6) through (9) shall apply to starting with the portion paid in the taxable year in which the date on which this Act enters into force falls.
This Act shall enter into force on January 1, 2001; provided, the amended provisions of subparagraph 4m of Article 12, Articles 35(2), 52(1)4 and (12), and 126-2 shall enter into force on the date of its promulgation, while the amended provisions of Articles 46 and 130 shall enter into force on July 1, 2001, the amended provisions of Article 48(1)1, on January 1, 2002, the amended provisions of Articles 80(2)2, 81(5), 164(1)6 and 164-2, on July 1, 2002, the amended provisions of subparagraph 2 of Article 15, Articles 59-2, 146(1) and 148, on January 1, 2003, and the amended provisions of Article 20-3(1)3, on January 1, 2005, respectively. <Amended on Dec. 31, 2001>
ADDENDA <Act No. 6292, Dec. 29, 2000>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2001; provided, the amended provisions of subparagraph 4m of Article 12, Articles 35(2), 52(1)4 and (12), and 126-2 shall enter into force on the date of its promulgation, while the amended provisions of Articles 46 and 130 shall enter into force on July 1, 2001, the amended provisions of Article 48(1)1, on January 1, 2002, the amended provisions of Articles 80(2)2, 81(5), 164(1)6 and 164-2, on July 1, 2002, the amended provisions of subparagraph 2 of Article 15, Articles 59-2, 146(1) and 148, on January 1, 2003, and the amended provisions of Article 20-3(1)3, on January 1, 2005, respectively. <Amended on Dec. 31, 2001>
Article 2 (General applicability)
This Act shall apply to the portion of income accruing on or after the date this Act enters into force.
Article 3 (Applicability to capital gains tax)
The provisions on capital gains tax in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 4 (Applicability to place for tax payment)
The amended provisions of Article 7(1)4 shall apply to the portion paid on or after the date this Act enters into force.
Article 5 (Applicability concerning deemed dividend)
The amended provisions of Article 17(4) shall apply to stock retirement, reduction of equity capital, corporate dissolution, merger or division that is effected on or after the date this Act enters into force.
Article 6 (Applicability to retirement Pension)
The amended provisions of Article 20-3(1)3 shall apply to retirement pension paid on or after the date this Act enters into force.
Article 7 (Applicability to exclusion of entertainment expenses from necessary expenses)
The amended provisions of Article 35(5) shall apply to the portion disbursed on or after the date this Act enters into force.
Article 8 (Applicability to calculation, etc. of income from bonds, etc.)
The amended provisions of Article 46 shall apply to the portion of interest, etc. from bonds, etc. that is received or to the portion of bonds, etc. that are sold on or after the date this Act enters into force; provided, the previous provisions of the same Article shall apply till the date when interest, etc. from bonds, etc. is first paid after this Act enters into force where the period for computing the interest on bonds, etc. issued before this Act enters into force spans over the periods before and after this Act enters into force.
Article 9 (Applicability to income deduction of pension insurance premium)
(1) In applying the amended provisions of Article 51-3, 50/100 of the insurance premium paid within the relevant period shall be deducted if such premium is paid from January 1, 2001 to December 31, 2001.
(2) In applying the amended provisions of Article 51-3, retroactive contributions or retroactive charges 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 shall be excluded from pension premiums subject to deduction. <Added on Dec. 31, 2001>
Article 10 (Applicability to deduction of insurance premium and medical expenses)
The amended provisions of Article 52(1)2-2 and 3 shall apply to the portion paid on or after the date this Act enters into force.
Article 11 (Applicability to deduction of education expenses)
The amended provisions of subparagraph 4m of Article 12, Articles 35(2), and 52(1)4 and (12) shall apply to the portion paid or disbursed in the taxable period where the promulgation date of this Act belongs.
Article 12 (Applicability to interim prepayment)
The amended provisions of Articles 65 through 67 shall apply to the portion of interim prepaid tax in the interim prepayment period that commences on or after the date this Act enters into force.
Article 13 (Applicability to nonresident's domestic source income)
(1) The amended provisions of subparagraphs 9 and 12 of Article 119, the proviso to Article 126(1), and the proviso to Article 156(1)4 shall apply to the portion transferred on or after the date this Act enters into force.
(2) The amended provisions of subparagraph 13 of Article 119 and Ar- ticle 156(7) and (8) shall apply to the portion of income accrued on or after the date this Act enters into force.
Article 14 (Applicability of exception to return filing and payment of nonresident's securities capital gains tax)
The amended provisions of Article 126-2 shall apply to the portion that satisfies the criteria for taxation under tax treaties on or after the promulgation date of this Act.
Article 15 (Applicability to submission of statements of payment)
The amended provisions of Article 164 (excluding paragraph (1)6 of the same Article) shall apply to the portion paid on or after the date this Act enters into force.
Article 16 (Applicability to statements of payment on nonresidents' income)
The amended provisions of Articles 80(2)2, 81(5), 164(1)6, and 164-2 shall apply to the portion paid on or after the date this Act enters into force.
Article 17 (Special cases concerning tax credit for retirement income) (1) In applying the amended provisions of subparagraph 2 of Article 15, Articles 59-2, 146(1), and 148, the previous provisions shall apply to the taxable period that ends in the period from January 1, 2003 to December 31, 2004, notwithstanding the amended provisions. "50/100" and "240,000 won" in the previous provisions of Article 59-2 shall construed as "25/100" and "120,000 won", respectively.
Article 18 (Transitional measures concerning conversion of non-taxable income into taxable income)
Income tax shall not be imposed on income other than the taxable in- come under the amended provisions of Article 20-3 or 22 among annuities or lump sum retirement payments received under the National Pension Act, the Public Officials Pension Act, the Veterans' Pension Act, the Pension for Private School Teachers and Staff Act, or the Special Post Offices Act on or after January 1, 2002.
Article 19 (Transitional measures concerning retirement income)
The former provisions shall apply to income received for retirement on or before December 31, 2004 among the income corresponding to annuity income under the amended provisions of Article 20-3(1)3 by treating such income as subject to the former provisions of Article 22.
ADDENDA <Act No. 6429, Mar. 28, 2001>
Article 1 (Enforcement date)
This Act shall enter into force on a date which is determined by Presidential Decree, within two years of the date of its promulgation. (Proviso Omitted.)
Articles 2 through 11 Omitted.
ADDENDA <Act No. 6557, Dec. 31, 2001>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2002; provided, the amended provisions of Articles 14(3), 25(1), 51-3(4), and 81(8) shall enter into force on the date of its promulgation, and the amended pro- visions of Articles 156-2, 164-2(1), and 165, on July 1, 2002.
Article 2 (Application time limit)
The amended provisions of Article 158(4) shall apply only to the portion of income that is paid until December 31, 2002.
Article 3 (General applicability)
This Act shall apply to the portion of income accruing on or after the date this Act enters into force.
Article 4 (General applicability to capital gains tax)
The amended provisions concerning capital gains tax in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 5 (Applicability to place for tax payment)
The amended provisions of Article 7(1)4 shall apply to the portion paid on or after the date this Act enters into force.
Article 6 (Applicability to income subject to separate taxation)
The amended provisions of Article 14(3) shall apply starting with the portion of income that is accrued in the taxable period whereto belongs the date of promulgation of this Act.
Article 7 (Applicability to special case of calculation of gross income)
The amended provisions of Article 25(1) shall apply starting with the portion of income that is accrued in the taxable period whereto belongs the date of promulgation of this Act.
Article 8 (Applicability to income deduction for donation)
The amended provisions of Article 34(2) shall apply to the portion paid on or after the date this Act enters into force.
Article 9 (Applicability to exclusion of entertainment expenses from necessary expenses)
The amended provisions of Article 35(3) and (4) shall apply to the portion paid on or after the date this Act enters into force.
Article 10 (Applicability to income deduction for pension premium)
The amended provisions of Article 51-3(4) shall apply starting with the portion of taxable period whereto belongs the date of promulgation of this Act, but with respect to the pension premiums paid from January 1, 2001 to December 31, 2001, the amount equivalent to 50/100 of the premiums paid during the relevant period shall be deducted.
Article 11 (Applicability to deduction of education expenses)
The amended provisions of Article 52(1) shall apply to the portion paid on or after the date this Act enters into force.
Article 12 (Applicability to penalty tax for insufficient evidence)
The amended provisions of Article 81(8) shall apply starting with the portion of goods or services that are provided in the taxable period whereto belongs the date of promulgation of this Act.
Article 13 (Applicability to capital gains tax)
(1) The amended provisions of Article 114(4) shall apply to the portion of a report filed on or after the date this Act enters into force.
(2) In applying the amended provisions of Article 165, the previous provisions shall apply to cases where a report on real estate transfer is filed under the previous provisions before this Act enters into force, which is the portion of transfer after this Act enters into force.
Article 14 (Applicability to domestic source income, etc. of nonresidents)
(1) The amended provisions of subparagraphs 2 and 13 of Article 119 shall apply to the portion appropriated as dividend income or other income on or after the date this Act enters into force.
(2) The amended provisions of Article 120(2)5 shall apply to the portion of income accrued on or after the date this Act enters into force.
(3) The amended provisions of Article 126-2(3) shall apply to the portion of a return or payment made on or after the date this Act enters into force.
Article 15 (Applicability to application for non-taxation, etc. on domestic source income of nonresident)
The amended provisions of Article 156-2 shall apply to the portion of a non-taxation or exemption made on or after July 1, 2002.
Article 16 (Applicability to issuance of account statement on imported goods)
The amended provisions of Article 163(3) and (4) shall apply to the portion imported on or after the date this Act enters into force.
Article 17 (Applicability to statements of payment of nonresidents' income)
The amended provisions of Article 164-2(1) shall apply to the portion of payment made on or after July 1, 2002.
ADDENDA <Act No. 6781, Dec. 18, 2002>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation; provided, the amended provisions of Articles 47(2) and 52, subparagraph 3 of Article 89, Articles 95, 96(1)1, 97, and 105(1)1 shall enter into force on January 1, 2003.
Article 2 (General applicability)
This Act shall apply to the portion of a tax base return on income tax, or of a decision on income tax, made on or after August 29, 2002.
Article 3 (General applicability to capital gains tax)
The amended provisions concerning capital gains tax in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 4 (Applicability to wage and salary income deduction)
The amended provision of Article 47(2) shall apply to income accrued on or after the date this Act enters into force.
Article 5 (Applicability to basic deduction)
The amended provisions of Article 50 shall apply to the portion of a return on tax base of income tax, or of a determination on income tax, or a year-end tax settlement made on or after August 29, 2002.
Article 6 (Applicability to deduction of premiums)
The amended provisions of Article 52(1) and (5) shall apply to the portion paid on or after the date this Act enters into force.
Article 7 (Applicability to penalty tax)
The amended provisions of Article 81(7)2 shall apply starting from the taxable period whereto belongs the date of promulgation of this Act.
Article 8 (Applicability to penalty tax for non-payment or underpayment of withholding tax)
The amended provisions of Article 158 shall apply to the portion of a year-end tax settlement made on or after the date this Act enters into force.
ADDENDA <Act No. 6852, Dec. 30, 2002>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 18 Omitted.
ADDENDUM <Act No. 6916, May 29, 2003>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 6958, Jul. 30, 2003>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Special cases concerning deduction for wage and salary income and tax credit for wage and salary income)
(1) Notwithstanding the amended provisions of Article 47(1), the following amount shall be deducted from the gross pay in cases of a portion of the taxable period from January 1, 2003 to December 31, 2003:
Not more than 5 million won Gross pay
More than 5 million won, but not more than 15 million won 5 million won ＋ 475/1,000 of the amount exceeding 5 million won
More than 15 million won, but not more than 30 million won 9.75 million won ＋ 15/100 of the amount exceeding 15 million won
More than 30 million won, but not more than 45 million won 12 million won ＋ 10/100 of the amount exceeding 30 million won
More than 45 million won13.5 million won ＋ 5/100 of the amount exceeding 45 million won
(2) Notwithstanding the amended provisions of Article 59(1), the following amount shall be deducted from the calculated global income tax amount on the relevant wage and salary income in cases of a portion of the tax- able period from January 1, 2003 to December 31, 2003; provided, where the deducted tax amount exceeds 450,000 won, such excess shall be deemed written off:
Not more than 500,000 won50/100 of the calculated tax amount
More than 500,000 won 250,000 won+30/100 of the amount exceeding 500,000 won
ADDENDA <Act No. 7006, Dec. 30, 2003>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2004; provided, the amended provisions of Article 34(2)3-2 and 6 shall enter into force on the date of its promulgation, and the amended provisions of Article 99(1)1c shall enter into force on January 1, 2005.
Article 2 (General applicability)
This Act shall apply to the portion of income accrued on or after the date this Act enters into force.
Article 3 (General applicability to capital gains tax)
The amended provisions on capital gains tax under this Act shall apply to the portions transferred on or after the date this Act enters into force.
Article 4 (Applicability to non-taxable wages paid relating to child birth and upbringing)
The amended provisions of subparagraph 4q of Article 12 shall apply to the portion of income paid on or after the date this Act enters into force.
Article 5 (Applicability to calculation of tax base)
The amended provisions of Article 14(3)4 and (4) shall apply to the portion of income accrued and paid on or after the date this Act enters into force; provided, with respect to the portion of income accrued between January 1, 2001 and December 31, 2003 but obtained on or after January 1, 2004, such amended provisions shall apply to the one reported on or after the date this Act enters into force. <Amended on Dec. 31, 2004>
Article 6 (Applicability to order of tax calculations)
The amended provisions of subparagraph 2 of Article 15, Articles 56(3) and (4) and 62 shall apply to the portion of income accrued and paid on or after the date this Act enters into force; provided, with respect to the portion of income accrued between January 1, 2001 and December 31, 2003 but obtained on or after January 1, 2004, such amended provisions shall apply to the one reported on or after the date this Act enters into force. <Amended on Act No. 7319, Dec. 31, 2004>
Article 7 (Applicability to investment trust)
The amended provisions of Articles 16 and 17 shall apply from the enforcement date of the Act on Business of Operating Indirect Investment and Assets, and the previous provisions may govern the portion opened before the date the said Act enters into force.
Article 8 (Applicability to exclusion of donations from non-inclusion in necessary expenses)
(1) The amended provisions of Article 34(2)3-2 shall apply to the portion of voluntary services furnished in the taxable year whereto belongs the promulgation date of this Act.
(2) The amended provisions of Article 34(2)6 shall apply to the portion of donations in the taxable year whereto belongs the promulgation date of this Act; provided, in the case of Seoul National University Dental Hospital established under the Establishment of Seoul National University Dental Hospital Act, it shall apply to the portion of donations after the date the said Act enters into force.
Article 9 (Applicability to special deduction)
(1) The amended provisions of Article 52(1)3 through 5, (2), (3), (8) and (14) shall apply to the portion paid on or after the date this Act enters into force.
(2) The amended provisions of the main sentence of Article 52(5) shall apply to the portion of payment or borrowing on or after the date this Act enters into force.
(3) The amended provisions of Article 52(9) shall apply to the portion of occurrence of the relevant causes on or after the date this Act enters into force.
Article 10 (Applicability to assessed value)
The amended provisions of Article 99(1)1c shall apply to the portion of transfer on or after January 1, 2005.
Article 11 (Applicability to calculation of capital gains by wrongful acts)
The amended provisions of the latter part of Article 101(2) shall apply to the portion of transfer or determination on or after the date this Act enters into force.
Article 12 (Applicability to scope of domestic source income of nonresident)
(1) The amended provisions of subparagraph 4 of Article 119 shall apply to the portion of lease on or after the date this Act enters into force.
(2) The amended provisions of subparagraph 6 of Article 119 shall apply to the portion of furnishing services on or after the date this Act enters into force.
(3) The amended provisions of subparagraph 13i of Article 119 and Article 156(9) shall apply to the portion of making capital transaction on or after the date this Act enters into force.
Article 13 (Applicability to submission of statements of payment)
The amended provisions of Article 64(1), (3) and (4) shall apply to the portion of income paid on or after the date this Act enters into force.
Article 14 (Applicability to special case of duties for submission of statements of payment on nonresidents' domestic source income)
The amended provisions of the main sentence of Article 164-2(1) shall apply to the portion of domestic source income paid on or after the date this Act enters into force.
Article 15 (Transitional measures for special deduction of long-term housing mortgage loan)
The former provisions shall govern the limit of income deduction for an interest redemption of the long-term housing mortgage loan borrowed under the provisons of former Article 52(3) as at the time this Act enters into force, notwithstanding the amended provisions of main sentence of Article 52(5); provided, where a redemption period for the said loan is 15 or more years, the said provisions shall apply by considering the term "six million won per year" among the main sentence of former Article 52(5) as "ten million won per year".
Article 16 (Transitional measures for owner of three or more houses for one household)
In cases where a real estate broker or a person falling under three or more houses for one household as at the time this Act enters into force transfers a house (including a land appurtenant thereto) acquired before this Act enters into force prior to December 31, 2004, the amended provisions of Articles 64, 95 and 104(1)2-3 shall not apply; provided, the same shall not apply to cases where the relevant real estate broker or a person falling under three or more houses for one household acquires newly another housing after January 1, 2004.
Article 17 (Transitional measures concerning scope of domestic source income from industrial, commercial, or scientific machinery, equipment, apparatus)
With respect of the relevant price and the portion of incomes accruing from the transfer thereof in cases where the industrial, commercial or scientific machines, equipment, apparatuses, etc. are domestically used or their prices are domestically paid as at the time this Act enters into force, it shall be deemed the price under the former provisions of subparagraph 11c of Article 119 and the incomes accruing from their transfer, notwithstanding the amended provisions of subparagraph 4 of Article 119.
Article 18 (Transitional measures for application of withholding tax rates of long-term bonds, etc.)
In cases of the long-term bonds, etc. under the former provisions of Article 129(1)1a, the former provisions shall apply not later than the final revenue period for the said bonds, etc.
ADDENDUM <Act No. 7120, Jan. 29, 2004>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA <Act No. 7289, Dec. 31, 2004>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 7319, Dec. 31, 2004>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2005; provided, the amended provisions of Article 17(3) shall enter into force on January 1, 2006, and the amended provisions of Articles 46, 130, and 133(2) (proviso), on July 1, 2005.
Article 2 (Applicability concerning global taxation of financial income)
The amended provisions of Article 14(3)4, and 15, and the proviso of subparagraph 2a of Article 62 shall apply to the portion of income on which a report is made on or after the date this Act enters into force; the amended provisions of Article 17(2)2a, to the portion on which a debt-equity swap is carried out on or after the date this Act enters into force; and the amended provisions of Article 17(3), to the portion of dividend income which is paid on or after January 1, 2006.
Article 3 (Applicability concerning other income)
The amended provisions of subparagraph 3 of Article 84 shall apply to the portion of income paid on or after the date this Act enters into force.
Article 4 (Applicability concerning special cases regarding calculation of income amount accruing from bonds, etc.)
The amended provisions of Articles 46, 130, and 133(2) (proviso) shall apply to the portion of income on which the tax is withheld on or after July 1, 2005; provided, with respect to the bonds, etc. which are issued before July 1, 2005 and on which interest, etc. is first paid, or which are first sold to a corporation, on or after July 1, 2005, the previous provisions shall apply on the condition that the amount equivalent to the interest accrued from the issuing date of the bonds, etc. or the immediately preceding date of tax withholding to the date when the interest, etc. is first paid, or the bonds, etc. are first sold to the corporation, on or after July 1, 2005 is paid to the person who is paid the interest, etc. or who sells the bonds, etc. to the corporation, notwithstanding the amended provisions of Articles 46, 130, and 133(2) (proviso).
Article 5 (Applicability concerning capital gains tax rate)
The amended provisions of Article 118-5(1)1 shall apply to the portion of assets transferred on or after the date this Act enters into force.
Article 6 (Applicability concerning domestic source income of nonresident)
The amended provisions of subparagraph 12 of Article 119 shall apply to the portion transferred on or after the date this Act enters into force.
Article 7 (Applicability concerning penalty tax for non-payment or underpayment of withholding tax)
The amended provisions of Article 158(1) shall apply to the portion of income paid on or after the date this Act enters into force.
Article 8 (Applicability concerning duty to make and retain records on issuance of contribution receipts)
The amended provisions of Article 160-3 shall apply to the portion of a contribution made on or after the date this Act enters into force.
Article 9 (Applicability concerning duty of financial institutions to make and retain records on issuance of certificates)
The amended provisions of Article 160-4 shall apply to the portion of certificates issued for the deduction of income accrued on or after the date this Act enters into force.
Article 10 (Applicability concerning submission of statements of payment)
The amended provisions of Article 164(1) shall apply to the portion of income accrued and paid on or after the date this Act enters into force.
Article 11 (General applicability)
This Act shall apply to the portion of income accrued on or after the date this Act enters into force.
ADDENDA <Act No. 7335, Jan. 14, 2005>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 12 Omitted.
ADDENDA <Act No. 7528, May 31, 2005>
(1) (Enforcement date) This Act shall enter into force on the date of its promulgation.
(2) (Applicability regarding other income) The amended provisions of Articles 14(3)5, 21(1)23 and 24, and 127(1)5 shall apply to the portion paid on or after the date this Act enters into force.
ADDENDA <Act No. 7579, Jul. 13, 2005>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 3 (Special cases concerning Computation and public notification of assessed value of multi-unit houses without multi-unit house price)
Where there exists no multi-unit house price under the amended provisions of Article 99(1)1d as at the time this Act enters into force, the previous provisions of Article 99(1)1c shall apply to the computation and publication of the assessed value of such multi-unit house notwithstanding the mended provisions of Article 99(1)1d before the Commissioner of the National Tax Service determines and publicly notify the relevant multi-unit house price under the proviso to Article 17(1) of the Public Notice of Values and Appraisal of Real Estate Act.
Article 4 (Applicability concerning hearing opinions and application for re-computation and public notification)
The amended provisions of Articles 99(4) through (6) and 99-2 shall apply to the assessed value computed and publicly notified on or after the date this Act enters into force.
Article 5 (Transitional measures concerning multi-unit house price computed and publicly notified by Commissioner of National Tax Service)
In applying the amended provisions of Article 99(3), the multi-unit house price computed and publicly notified by the Commissioner of the National Tax Service under the previous provisions of Article 99(1)1c shall be deemed the multi-unit house price under the Public Notice of Values and Appraisal of Real Estate Act.
ADDENDA <Act No. 7837, Dec. 31, 2005>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2006; provided, the amended provisions of Article 156-4 shall enter into force on July 1, 2006, and the amended provisions of Articles 95(2) (limited to the portions of Article 104(1)2-5 through 2-8 from among the main sentence other than each subparagraph), 101(2) and 104(1) (excluding subparagraph 2-4) shall enter into force on January 1, 2007.
Article 2 (General applicability)
This Act shall apply to the portion of income accruing on or after the date this Act enters into force.
Article 3 (General applicability to capital gains tax)
The amended provisions on capital gains tax under this Act shall apply to the portions transferred on or after the date this Act enters into force.
Article 4 (Applicability concerning non-taxable income of prisoners of War of ROK Armed Forces)
The amended provisions of subparagraphs 4r, 4-3d and 5e of Article 12 shall apply to the portions paid on or after the date this Act enters into force.
Article 5 (Applicability to dividend income)
The amended provisions of Article 17(1)6-2 and 7 shall apply to the taxable period first beginning after this Act enters into force.
Article 6 (Applicability concerning exclusion of donation money from necessary expenses)
The amended provisions of Article 34(2) shall apply to the portion of donation on or after the date this Act enters into force.
Article 7 (Applicability to exclusion of entertainment expenses from necessary expenses)
The amended provisions of Article 35(2) shall apply to the portion of payment on or after the date this Act enters into force.
Article 8 (Applicability concerning deduction of pension insurance premiums on retirement pension)
The amended provisions of Article 51-3(1)3 shall apply to the portion of year-end tax settlement on or after the date this Act enters into force.
Article 9 (Applicability concerning income deduction of medical care expenses)
The amended provisions of Article 52(1) shall apply to the portion paid on or after the date this Act enters into force.
Article 10 (Applicability concerning income deduction of house-purchasing savings)
The amended provisions of Article 52(2) through (4) shall apply to the portion of subscribing for or receiving loan on or after the date this Act enters into force.
Article 11 (Applicability concerning penalty tax)
(1) The amended provisions of Article 81(4) shall apply to the portion of paying or collecting income tax on or after the date this Act enters into force.
(2) The amended provisions of Article 81(5) and (7) shall apply to the portion of submittance on or after the date this Act enters into force; provided, in cases of statements of payment of wage and salary income of a worker employed on a daily basis which has been generated and paid from the enforcement date of this Act to December 31, 2006, the penalty tax on unfaithful report under Article 81(5) shall not be levied.
(3) The amended provisions of Article 81(11) and (12) shall apply to the portion of receiving the donation on or after the date this Act enters into force.
Article 12 (Applicability concerning exclusion of non-taxation of capital gains tax on one house for one household for persons possessing occupation right of association members and house and tax rate of capital gains tax)
(1) The amended provisions of Article 89(2) and 104(1) shall apply to the portion of authorization for the management disposition plans for the housing redevelopment project or the housing reconstruction project under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents on or after January 1, 2006.
(2) The amended provisions of Articles 89(2) and 104(1) shall apply to the person who succeeds and acquires, due to the trade and inheritance, etc. on or after January 1, 2006, the position selected as the resident which has been acquired as the management disposition plans for the housing redevelopment project or the housing reconstruction project under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents have been authorized before January 1, 2006, or the position selected as the resident which has been acquired as obtaining the authorization for the housing reconstruction project under Article 33 of the Housing Construction Promotion Act (referring to what before the amendment under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Act No. 6852)), by regarding the position selected as the resident which has been acquired by secession as the occupation right of association members which has been acquired under the authorization for the management disposition plans for the housing redevelopment project or the housing reconstruction project under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents on or after January 1, 2006.
Article 13 (Applicability concerning domestic source income of nonresident)
The amended provisions of subparagraph 2 of Article 119 shall apply to the portion of disposition as dividends on or after the date this Act enters into force.
Article 14 (Applicability to special cases in withholding domestic source income of nonresidents)
The amended provisions of Article 156(11) shall apply to the portion of withholding tax on or after the date this Act enters into force.
Article 15 (Applicability concerning special cases for withholding tax on claims of nonresident)
The amended provisions of Article 156-3 shall apply to the portion of withholding tax on or after the date this Act enters into force.
Article 16 (Applicability concerning special cases for withholding tax procedures on nonresident)
The amended provisions of Article 156-4 shall apply to the portion of withholding tax on or after the date this Act enters into force.
Article 17 (Applicability concerning preparation and delivery of account statement)
The amended provisions of Article 163 shall apply to the portion of delivery on or after the date this Act enters into force.
Article 18 (Applicability concerning submission of income deduction data and administrative direction)
The amended provisions of Article 165 shall apply to the portion of payment on income deduction for which the supporting documents for income deduction are to be submitted on or after the date this Act enters into force.
Article 19 (Applicability concerning perusal of documents relating to sale, entry and registration)
The amended provisions of Article 172 shall apply to the portion of perusal or request for reproduction on or after the date this Act enters into force.
Article 20 (Transitional measures for non-taxation on farmland substitute land)
Where being subject to non-taxation under the previous provisions of subparagraph 4 of Article 89 as at the time this Act enters into force, or where transferring the farmland for being subject to an application of the same provisions, the previous provisions shall govern, notwithstanding the amended provisions.
Article 21 (Transitional measures for operation of designated area)
The area designated by the Minister of Finance and Economy under the previous provisions of Article 96(1)6-2 as at the time this Act enters into force shall be deemed the area designated under the amended provisions of Article 104-2.
Article 22 Omitted.
ADDENDUM <Act No. 7873, Mar. 3, 2006>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2007. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDUM <Act No. 7896, Mar. 24, 2006>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2007.
Articles 2 through 10 Omitted.
ADDENDUM <Act No. 7908, Mar. 24, 2006>
Article 1 (Enforcement date)
This Act shall enter into force six months after its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 8144, Dec. 30, 2006>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2007; provided, the amended provisions of Articles 35(2)2, 70(4)5, 80(2)3c through f, 81(4), (5), (10) and (11), 160-2(3), 162-2, and 162-3 shall enter into force on July 1, 2007, and the amended provisions of Articles 80(2)3a and b and 81(9) shall enter into force on January 1, 2008.
Article 2 (General applicability)
This Act shall apply to the portion of income accruing on or after the date this Act enters into force.
Article 3 (General applicability to capital gains tax)
The amended provisions concerning capital gains tax in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 4 (Applicability concerning income classification of dividend income of investment trust returns)
The amended provisions of Articles 4(2) and 17(1)5 shall apply to the portion of an investment trust established on or after the date this Act enters into force.
Article 5 (Applicability concerning deemed dividend)
The amended provisions of Article 17(2) shall apply to the portion of a debt-equity swap conducted on or after the date this Act enters into force.
Article 6 (Applicability concerning exclusion of entertainment expense from necessary expense)
The amended provisions of Article 35(2)2 shall apply to the portion paid for receiving goods or services on or after July 1, 2007.
Article 7 (Applicability concerning interest expense deduction for reverse mortgage-backed retirement pension system)
The amended provisions of Article 51-4 shall apply to an amount equivalent to the interest which accrues from a reverse mortgage-backed retirement pension received on or after the date this Act enters into force.
Article 8 (Applicability to special deduction)
(1) The amended provisions of Article 52(1) shall apply to the portion paid on or after the date this Act enters into force.
(2) The amended provisions of Article 52(4) shall apply to the portion paid by changing the borrowing conditions on or after the date this Act enters into force.
(3) The amended provisions of Article 52(8) and (9) shall apply to the portion for which an applicable reason arises on or after the date this Act enters into force.
Article 9 (Applicability concerning application for tax credit for dividend)
The amended provisions of Article 56(6) shall apply to the portion determined or reassessed on or after the date this Act enters into force.
Article 10 (Applicability concerning submission of receipt collection specification)
The amended provisions of Articles 70(4)5 and 81(5) shall apply to the portion of receipts of goods or services supplied on or after July 1, 2007.
Article 11 (Applicability concerning report on present situation of business place)
The amended provisions of Articles 78 and 81(6) shall apply to the portion of reports filed after the end of the taxable period commenced on or after the date this Act enters into force.
Article 12 (Applicability concerning reassessment)
(1) The amended provisions of Article 80(2)1-2 shall apply to the portion reassessed due to an applicable reason occurring on or after the date this Act enters into force.
(2) The amended provisions of Article 80(2)3a and b shall apply to the portion first reassessed due to an applicable reason occurring on or after January 1, 2008.
(3) The amended provisions of Article 80(2)3c through f shall apply to the portion reassessed due to an applicable reason occurring on or after July 1, 2007.
Article 13 (Applicability concerning penalty tax)
(1) The amended provisions of Articles 81(3) and 163-2(1) shall apply to the portion of tax invoices delivered on or after the date this Act enters into force.
(2) The amended provisions of Article 81(4) shall apply to the portion of supporting documents on goods or services supplied on or after July 1, 2007.
(3) The amended provisions of Article 81(7)1 shall apply to the portion of the taxable period commencing on or after the date this Act enters into force.
(4) The amended provisions of Article 81(7)2 shall apply to the portion first reported or reported for change on or after the date this Act enters into force.
(5) The amended provisions of Article 81(9) shall apply to the portion of the taxable period commencing on or after January 1, 2008.
(6) The amended provisions of Article 81(10) and (11) shall apply to the portion of transaction conducted on or after July 1, 2007.
Article 14 (Applicability concerning collection of capital gains from nonresident)
The amended provisions of Articles 85(3) and 116(2) shall apply to the portion determined or reassessed on or after the date this Act enters into force.
Article 15 (Applicability and special applicability concerning registration of business for joint business place)
(1) The amended provisions of Article 87(2) shall apply to the portion of applicable reasons occurring on or after the date this Act enters into force.
(2) The amended provisions of Article 87(4) shall apply to the portion reported on or after the date this Act enters into force.
(3) The amended provisions of Article 87(5) shall apply to the portion of report changed on or after the date this Act enters into force.
(4) Where any business entity who falls under a joint business entity under the amended provisions of Article 43 as at the time this Act enters into force has registered the relevant joint business place under Article 87(3) before December 31, 2007, the provisions of Article 81(7)1 shall not apply to the taxable period in which the date of his or her business registration falls.
Article 16 (Applicability concerning determination of tax base and tax amount of capital gains)
The amended provisions of Article 114(5), (7) and (8) (only the portion with regard to the determination of capital gains tax base and tax amount) shall apply to the portion determined on or after the date this Act enters into force.
Article 17 (Applicability concerning liability for tax withholding)
The amended provisions of Article 127(1)5 shall apply to the portion paid on or after the date this Act enters into force.
Article 18 (Applicability concerning withholding tax rate)
The amended provisions of Article 129(1)2 shall apply to the portion of income accruing and paid on or after the date this Act enters into force.
Article 19 (Applicability concerning deemed payment time of dividend income)
The amended provisions of Article 132(2) shall apply to the portion of dividend incomes deemed to have been paid on or after the date this Act enters into force.
Article 20 (Applicability concerning liability for issuance of withholding tax receipt for other income)
The amended provisions of Article 145(2) shall apply to the portion paid on or after the date this Act enters into force.
Article 21 (Applicability concerning special withholding tax on domestic source income of nonresident)
The amended provisions of the main sentence other than subparagraphs of Article 156(1) shall apply to the portion transferred on or after the date this Act enters into force.
Article 22 (Applicability concerning receiving and retaining supporting documents for disbursement of expenses)
The amended provisions of Article 160-2(3) and (4) shall apply to the portion issued for goods or services supplied on or after July 1, 2007.
Article 23 (Applicability concerning obligation to open and use business account)
The amended provisions of Article 160-5 shall apply to the portion of goods or services supplying or being supplied on or after January 1, 2007.
Article 24 (Applicability concerning obligation to registration as credit card member store and to issue credit card sales slip)
The amended provisions of Article 162-2 shall apply to the portion of goods or services supplying on or after July 1, 2007.
Article 25 (Applicability concerning obligation to register as issuer of cash receipts and to issue cash receipt)
The amended provisions of Article 162-3 shall apply to the portion of goods or services supplying on or after July 1, 2007.
Article 26 (Applicability concerning statements of payment)
The amended provisions of Article 164(1) shall apply to the portion of deadline for reporting arriving on or after the date this Act enters into force.
Article 27 (Applicability concerning submission of payment data of non-life insurance)
The amended provisions of Article 174 shall apply to the portion paid on or after the date this Act enters into force.
Article 28 (Special cases concerning opening and reporting business account)
Any business entity who is subject to double-entry bookkeeping as at the time this Act enters into force or who is subject to double-entry bookkeeping simultaneously with the commencement of business before or by March 31, 2007 may, notwithstanding the amended provisions of Article 160-5(3), open and report a business account within the period from the enforcement date of this Act to June 30, 2007.
Article 29 (Special cases concerning registration as issuer of cash receipts)
Notwithstanding the amended provisions of Article 162- 3(1), any businessman who meets the requirements of subscription for an Issuer of Cash Receipts during the period from the enforcement date of this Act to March 31, 2007 may subscribe for an Issuer of Cash Receipts within the period from the enforcement date of this Act to June 30, 2007.
Article 30 (Transitional measures concerning interest income of investment trust)
Notwithstanding the amended provisions of Article 16(1)5 and 8, the previous provisions shall govern the interest income accruing from an investment trust established before this Act enters into force.
Article 31 (Transitional measures concerning penalty tax)
Notwithstanding the amended provisions of Article 81(1) through (4), the previous provisions shall govern the penalty tax which has been levied or is to be levied under the previous provisions of Article 81(1) through (4) before this Act enters into force.
Article 32 (Transitional measures concerning reassessment and notification of capital gains tax base and tax amount)
Notwithstanding the amended provisions of Article 114, the previous provisions shall govern the reassessment and notification of the tax base and tax amount of capital gains accruing from the assets transferred before this Act enters into force.
Article 33 (Transitional measures concerning penalty tax on capital gains tax)
Notwithstanding the amended provisions of Article 115, penalty tax on capital gains tax which has been levied or is to be levied under the previous provisions of Article 115 as the transfer was made before this Act enters into force, the previous provisions shall govern.
ADDENDA <Act No. 8435, May 17, 2007>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2008. (Proviso Omitted.)
Articles 2 through 7 Omitted.
Article 8 Omitted.
Article 9 Omitted.
ADDENDA <Act No. 8524, Jul. 19, 2007>
(1) (Enforcement Date) This Act shall enter into force on January 1, 2008.
(2) (Applicability to non-taxable childcare leave benefits) The amended provisions of subparagraph 4e of Article 12 shall apply to income paid on or after the date this Act enters into force.
(3) (Applicability to income during taxable period of sincere small or medium business entities) The amended provisions of Chapter Ⅱ -2 (Articles 87-2 through 87-7) shall apply to income during the taxable period in which the enforcement date of this Act falls or thereafter.
ADDENDA <Act No. 8531, Jul. 19, 2007>
(1) (Enforcement date) This Act shall enter into force three months after the date of its promulgation.
(2) Omitted.
(3) Omitted.
ADDENDA <Act No. 8541, Jul. 23, 2007>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 41 Omitted.
Article 42 Omitted.
Article 43 Omitted.
ADDENDA <Act No. 8825, Dec. 31, 2007>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2008; provided, the amended provisions of subparagraph 4n of Article 12 and Article 52(1)1 shall enter into force on July 1, 2008.
Article 2 (General applicability)
This Act shall apply to income occurred on or after the date this Act enters into force.
Article 3 (General applicability to capital gains tax)
The amended provisions concerning capital gains tax in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 4 (Applicability to compensation)
The amended provisions of subparagraph 5d of Article 12 shall apply to the compensation received on or after the date this Act enters into force.
Article 5 (Applicability to dividend income)
The amended provisions of Article 17(2)3 shall apply to organizational restructuring made on or after the date this Act enters into force.
Article 6 (Applicability to inclusion of value of business assets acquired with national subsidies in necessary expenses)
The amended provisions of the latter part of Article 32(2) shall apply to national subsidies received on or after the date this Act enters into force.
Article 7 (Applicability to inclusion of donations in necessary expenses)
The amended provisions of Article 34(1) and (4) shall apply to donations paid on or after the date this Act enters into force.
Article 8 (Applicability to deduction of loss or loss carried forward)
The amended provisions of Article 45(3) shall apply to first additional assessment or decision of additional assessment made on or after the date this Act enters into force.
Article 9 (Applicability to additional deduction)
The amended provisions of Article 51(1)5 shall apply to the portion of the birth or adoption reported on or after the date this Act enters into force.
Article 10 (Applicability to special deduction)
(1) The amended provisions of Article 52(1)1 shall apply to the portion paid on or after July 1, 2007.
(2) The amended provisions of Article 52(1)4 (excluding a3)) shall apply to the portion paid on or after the date this Act enters into force.
(3) The amended provisions of Article 52(1)4a3) shall apply to expenditures made during the taxable period in which the promulgation date of this Act falls.
(4) The amended provisions of Article 52(2) or (4)4 shall apply to the portion borrowed newly on or after the date this Act enters into force.
(5) The amended provisions of Article 52(3) shall apply to the portion during the taxable period in which the date this Act enters into force falls.
(6) The amended provisions of Article 52(6) shall apply to the portion paid on or after the date this Act enters into force.
Article 11 (Applicability to foreign tax credit for retirement income)
The amended provisions of the main body of Article 57(1) and subparagraph 1 of the same paragraph shall apply to retirement income received, or deemed received, on or after the date this Act enters into force.
Article 12 (Applicability to exceptions of final return on tax base)
The amended proviso to Article 73(3) shall apply to income tax paid according to withholding on or after the date this Act enters into force.
Article 13 (Applicability to decision, and change or rectification)
(1) The amended provisions of Article 80(2)1-3 shall apply to change or rectification due to the relevant circumstances on or after the date this Act enters into force.
(2) The amended provisions of Article 80(2)3c shall apply to decision, change or rectification on the taxable period in which the date this Act enters into force falls.
Article 14 (Applicability to penalty tax)
(1) The amended provisions of Article 81(8) and (9)2 and (12) shall apply to the taxable period in which the date this Act enters into force falls.
(2) The amended proviso to Article 81(11) shall apply to the portion of goods or services provided on or after July 1, 2008.
Article 15 (Applicability to nonresident's domestic income source)
The amended provisions of subparagraph 12 of Article 119 shall apply to the portion transferred on or after the date this Act enters into force.
Article 16 (Applicability to special cases concerning report or payment of nonresident's capital gains on securities)
The amended provisions of Article 126-2(3) and (4) shall apply to the portion transferred on or after the date this Act enters into force.
Article 17 (Applicability to legal fiction of dividend payment)
The amended provisions of Article 132(2) shall apply to the portion deemed paid on or after the date this Act enters into force.
Article 18 (Applicability to special cases concerning procedures of withholding tax related to services performed by nonresident entertainers)
The amended provisions of Article 156-5 shall apply to the portion of services performed and compensation thereof received on or after the date this Act enters into force.
Article 19 (Applicability to liability to submit record of donation receipt issuance)
The amended provisions of Article 160-3(3) shall apply to the portion submitted on or after the date this Act enters into force.
Article 20 (Applicability to liability to open and use business account)
The amended provisions of Article 160-5(1)2 shall apply to business accounts opened, reported and used on or after the date this Act enters into force.
Article 21 (Applicability to credit card member stores' membership and liability of issuance)
The amended provisions of Article 162-2 shall apply to the portion of services or goods provided on or after the date this Act enters into force.
Article 22 (Applicability to submission of certified copy of resident registration card, etc.)
The amended provisions of Article 167(1) shall apply to the portion reported on or after the date this Act enters into force.
Article 23 (Applicability to sample surveys)
The amended provisions of Article 175 shall apply to the portion paid on or after the date this Act enters into force.
Article 24 (Transitional measures for special deduction)
For the taxable period in which the date this Act enters into force falls, medical expenses paid from December 1, 2007 to December 31, 2008 shall be deducted from wage and salary income amount, notwithstanding the amended provisions of the main body of Article 52(1).
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
Article 6 Omitted.
Article 7 Omitted.
ADDENDA <Act No. 8911, Mar. 21, 2008>
(1) (Enforcement date) This Act shall enter into force on the date of its promulgation.
(2) (Applicability to capital gains amount) The amended provisions of Article 95(2) shall apply to the portion transferred on or after the date this Act enters into force.
ADDENDA <Act No. 9270, Dec. 26, 2008>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2009; provided, the amended provisions of subparagraph 4e and n of Article 12 and Article 58(1) shall enter into force on the date of its promulgation, the amended provisions of Articles 4(2), 17(1)5, 46, 94(1)3, 114(9), 156(5) and 160(6) shall enter into force on February 4, 2009, and the amended provisions of subparagraph 5f and g of Article 12, Articles 14(3)5-2 and 21(1)25 shall enter into force on January 1, 2011.
Article 2 (General applicability)
(1) This Act shall apply to the first income generating after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall apply to transfer on or after the date this Act enters into force; provided, the amended provisions of Articles 97(4) and 101(2) shall apply to transfer after being donated on or after the date this Act enters into force.
Article 3 (Applicability to childcare leave benefits)
The amended provisions of subparagraph 4e of Article 12 shall apply to the taxable period in which the date this Act enters into force falls.
Article 4 (Applicability to deduction of loss carried forward)
The amended provisions of Article 45(2) and the proviso to Article 160-2(1) shall apply to losses accruing on or after the date this Act enters into force.
Article 5 (Applicability to tax credit for casualty loss)
The amended provisions of Article 58(1) shall apply to casualty losses that occur on or after the date this Act enters into force.
Article 6 (Applicability to deadline for payment in installments of income tax and capital gains tax)
The amended provisions of Articles 77 and 112 shall apply to the portion reported or paid on or after the date this Act enters into force.
Article 7 (Applicability to penalty tax)
(1) The amended provisions of Article 81(9) shall apply to final returns on tax base filed on or after the date this Act enters into force.
(2) The amended provisions of Article 81(11) shall apply to the deadline for registration as an Issuer of Cash Receipts that arrives on or after the date this Act enters into force.
Article 8 (Applicability to calculation of necessary expenses of capital gains)
The amended part of Article 114(7) from among the amended provisions of Article 97(3)1b shall apply to the portion determined or reassessed on or after the date this Act enters into force.
Article 9 (Applicability to withholding tax of domestic source income of nonresident)
The amended provisions of subparagraph 13c of Article 119, and Articles 126(1) and 156(1) shall apply to the portion paid on or after the date this Act enters into force.
Article 10 (Applicability to special cases for withholding tax of specified money trust)
The amended provisions of Article 155-2 shall apply to contracts signed or renewed on or after the date this Act enters into force.
Article 11 (Applicability to deadline for opening and reporting business account)
The amended provisions of Article 160-5(3) shall apply to business that commences on or after the date this Act enters into force.
Article 12 (Applicability to timing to submit statements of payment of wage and salary income)
The amended part concerning timing to submit a statement of payment of wage and salary income from among the amended provisions of the main sentence of Article 164(1) shall apply to the portion for which the deadline for submission of a statement of payment arrives on or after the date this Act enters into force.
Article 13 (Special cases concerning enforcement date of the Financial Investment Services and Capital Markets Act)
(1) "Securities market" in the amended provisions of subparagraph 9b of Article 119, the main body of subparagraph 12 of the same Article and item b of the same subparagraph shall be construed as "securities market or KOSDAQ market under the Securities and Exchange Act" until February 3, 2009.
(2) "Collective investment scheme" in the amended provisions of Article 155-2 shall be construed as "investment trust" until February 3, 2009.
(3) "Collective investment property under the Financial Investment Services and Capital Markets Act" in the amended provisions of Article 155-3 shall be construed as "property of investment company, investment trust or private equity fund under the Indirect Investment Asset Management Act" until February 3, 2009.
Article 14 (Special cases concerning tax rates of capital gains tax)
(1) Notwithstanding Article 104(1)4 through 9, the tax rate under subparagraph 1 of that paragraph (if the holding period is less than 2 years, the tax rate under subparagraph 2 or 3 of that paragraph) shall apply to income generated from the transfer of assets acquired between March 16, 2009 and December 31, 2012, notwithstanding Article 104(1)4 through 9. <Amended on Dec. 27, 2010>
(2) Deleted. <Jan. 1, 2012>
Article 15 (General transitional measures)
The former provisions shall apply to income tax (including penalty tax) imposed or to be imposed under the former provisions as at the time this Act enters into force.
ADDENDUM <Act No. 9346, Jan. 30, 2009>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2028. <Amended on Dec. 31, 2009; Jan. 1, 2013; Dec. 15, 2015; Dec. 31, 2018; Dec. 31, 2021; Dec. 31, 2024>
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 9485, Mar. 18, 2009>
(1) (Enforcement date) This Act shall enter into force on the date of its promulgation.
(2) (Applicability to deduction of expenses for purchasing school uniforms from income) The amended provisions of Article 52(1)4 shall apply to the amount spent on or after January 1, 2009.
ADDENDA <Act No. 9672, May 21, 2009>
(1) (Enforcement date) This Act shall enter into force on the date of its promulgation.
(2) (Applicability to tax rates of capital gains tax) The amended provisions of Article 104(4) and (6) shall apply to the portion transferred on or after March 16, 2009.
(3) (Applicability to special provisions on taxation concerning income accruing from transfer and Interest, including state bonds of nonresidents) The amended provisions of Article 119-2 shall apply to the portion paid or transferred on or after the date this Act enters into force.
ADDENDA <Act No. 9763, Jun. 9, 2009>
Article 1 (Enforcement date)
This Act shall enter into force nine months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
Article 7 Omitted.
Article 8 Omitted.
ADDENDA <Act No. 9774, Jun. 9, 2009>
Article 1 (Enforcement date)
This Act shall enter into force six months after its promulgation.
Articles 2 through 17 Omitted.
Article 18 Omitted.
Article 19 Omitted.
ADDENDA <Act No. 9785, Jul. 31, 2009>
Article 1 (Enforcement date)
This Act shall enter into force six months after its promulgation.
Articles 2 through 7 Omitted.
Article 8 Omitted.
Article 9 Omitted.
ADDENDA <Act No. 9897, Dec. 31, 2009>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2010; provided, the amended provisions of subparagraph 4e of Article 12, Articles 20-3(1)6, 20-3(2), 73(1)3, 129(1)5, 129(3), 143-2(1), 143-6(1) and 158(5) shall enter into force on the date of its promulgation, the amended provisions of Articles 81(11) and 162-3(4) on April 1, 2010, the amended provisions of Article 17(2)2a on July 1, 2010, the amended provisions of subparagraph 5f and g of Article 12, Articles 14(3)8, and 25(1) on January 1, 2011, the amended provisions of Articles 47(1) and 59(1) and (2) on January 1, 2012 and the amended provisions of Articles 21(1)25, 26(7) and 33(1)8 on January 1, 2013. <Amended on Dec. 27, 2010; Jan. 1, 2013>
Article 2 (General applicability)
(1) This Act shall apply to the first income generating after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 3 (Applicability to aggregated pension for old age and aggregated pension for retirement)
The amended provisions of subparagraph 4e of Article 12, Articles 20-3(1)6, 20-3(2), 73(1)3, 129(1)5, 129(3), 143-2(1), 143-6(1) and 158(5) shall apply to income generated in the taxable period in which the enforcement date of the same provisions pursuant to the proviso to Article 1 of the Addenda falls.
Article 4 (Applicability to exclusion of donations from necessary expenses and deduction of donations)
The amended provisions of Articles 34 and 52(6) and the proviso to Article 52(8) shall apply to donations made on or after the date this Act enters into force.
Article 5 (Applicability to deduction for losses carried forward)
The amended provisions of the proviso to Article 45(3) shall apply to losses carried forward, the tax base of which is reported, corrected or determined on or after the date this Act enters into force; provided, where the tax base is reported, corrected or determined before December 31, 2009 so that a loss which is not included in the tax base reported, corrected or determined may be deducted, the previous provisions shall apply thereto.
Article 6 (Applicability to income deduction of loan for fund to rent house)
The amended provisions of Article 52(4) shall apply to the first principal repaid and interest or rents paid after this Act enters into force.
Article 7 (Applicability to interim prepayment)
The amended provisions of Article 65(1) shall apply to payment in installment of interim tax prepayment in the period of interim prepayment which comes on or after the date this Act enters into force.
Article 8 (Applicability to preliminary return and payment of profit margin of land by realtor)
The amended provisions of Article 69 shall apply to land sold and purchased on or after the date this Act enters into force.
Article 9 (Applicability to final return on tax base of persons leaving the Republic of Korea)
The amended provisions of Article 74(1) and (4) shall apply to the final return on the tax base of persons leaving the Republic of Korea on or after the date this Act enters into force.
Article 10 (Applicability to penalty tax)
The amended provisions of Article 81(4) shall apply to goods or services provided and the supporting documents thereof received on or after the date this Act enters into force.
Article 11 (Applicability to special cases in relation to taxation on interest income or capital gains of state bonds, etc. of nonresidents)
The amended provision of Article 119-2(4) shall apply to income from which withholding tax is deducted on or after the date this Act enters into force.
Article 12 (Applicability to special cases in relation to withholding tax from bonds of nonresidents)
The amended provisions of Article 156-3 shall apply to bonds purchased on or after the date this Act enters into force.
Article 13 (Applicability to obligations to register as issuer of cash receipts and to issue cash receipts)
The amended provisions of Article 162-3(4) shall apply to goods or services provided on or after the date the same provisions enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 14 (Applicability to submission of statement of payment)
The amended provisions of Article 164(1) shall apply to statements of payment to be submitted on or after the date this Act enters into force.
Article 15 (Special cases to tax credit for bookkeeping)
Notwithstanding the amended provisions of Article 56-2(1), where income generated by December 31, 2010 is entered in a simple book pursuant to Article 160(2) and the amount of income is calculated according to the book, the previous provision shall apply thereto, however, the amount equivalent to 5/100 of the amount calculated by multiplying the calculated global income tax by the ratio of business income to global income shall be deducted.
Article 16 (Special cases concerning abolition of tax credit for preliminary return and payment)
(1) Notwithstanding the amended provisions of Article 108, where a resident files a preliminary return on income from transfer of assets to which the tax rate under Article 104(1)1 applies between January 1, 2010 and December 31, 2010 and pays income tax, the amount equivalent to 5/100 of the tax payable under the following subparagraphs shall be deducted from such calculated tax:
1. Where the tax base does not exceed 46 million won: Tax payable under Article 106;
2. Where the tax base exceeds 46 million won: Tax payable under Article 106, calculated considering the amount of calculated tax as 5.82 million won.
(2) Notwithstanding the amended provisions of Article 108 and paragraph (1) of this Article, where a resident files a preliminary return on income from transfer of real estate, which is to be purchased in agreement or expropriated pursuant to the Act on Acquisition of and Compensation for Land for Public Works and other Acts, the date of notification of approval of a project of which is before December 31, 2009, to a project implementor between January 1, 2010 and December 31, 2010 and pays income tax on such capital gains, the amount equivalent to 5/100 of the tax amount to be paid shall be deducted from such calculated tax amount.
Article 17 (Relation with other Acts and subordinate statutes)
Where the provisions of the previous Income Tax Act have been cited by other Acts and subordinate statutes as at the time this Act enters into force, if the provisions corresponding thereto exist in this Act, the relevant provisions of this Act shall be deemed to have been cited in place of the previous provisions.
ADDENDUM <Act No. 9924, Jan. 1, 2010>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2010.
Articles 2 through 6 Omitted.
Article 7 Omitted.
ADDENDA <Act No. 10175, Mar. 22, 2010>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 9 Omitted.
Article 10 Omitted.
ADDENDUM <Act No. 10221, Mar. 31, 2010>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2011.
Articles 2 through 6 Omitted.
Article 7 Omitted.
Article 8 Omitted.
ADDENDUM <Act No. 10337, May 31, 2010>
Article 1 (Enforcement date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted)
Articles 2 through 6 Omitted.
Article 7 Omitted.
Article 8 Omitted.
ADDENDA <Act No. 10408, Dec. 27, 2010>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2011; provided,, the amended provisions of Articles 46(1) and (2), and 133-2(1) shall enter into force on April 1, 2011, while the amended provisions of Articles 34(2) and 91(2) shall enter into force on July 1, 2011.
Article 2 (General applicability)
(1) This Act shall apply to the first income generating after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall apply to the portion transferred on or after the date this Act enters into force.
Article 3 (Applicability to national subsidy)
The amended provisions of Article 32(1) shall apply to assets to be acquired or improved on or after the date this Act enters into force.
Article 4 (Applicability to exclusion of donations from necessary expenses)
(1) The amended provisions of Article 34(1) shall apply to donations to be made on or after the date this Act enters into force.
(2) The amended provisions of Article 34(2) shall apply to donations to be made on or after the date the amended provisions of Article 34(2) enter into force pursuant to the proviso to Article 1 of the Addenda.
(3) The amended provisions of Article 34(4) shall apply to donations to be made on or after the date this Act enters into force.
Article 5 (Applicability to deduction for pension premium)
The amended provisions of Article 51-3(1)3 of shall apply to the portion paid on or after the date this Act enters into force.
Article 6 (Applicability to special deductions)
The amended provisions of Article 52(6) shall apply to donations to be made on or after the date this Act enters into force.
Article 7 (Applicability concerning report on place of business)
The amended provisions of Article 78(1) shall apply to reports to be made on status of place of business on or after the date this Act enters into force.
Article 8 (Applicability concerning penalty tax)
(1) The amended provisions of Article 81(1) shall apply to statements of payment to be submitted on or after the date this Act enters into force.
(2) The amended provisions of Article 81(3) shall apply to invoices to be received, or invoices not issued or issued, on or after the date this Act enters into force.
Article 9 (Applicability to exclusion from non-taxation or tax reduction or exemption of capital gains tax following incorrectly entering details in contracts of sale or purchase)
The amended provisions of Article 91(2) shall apply to contracts of sale or purchase to be concluded on or after the date the amended provisions of Article 91(2) enter into force pursuant to the proviso to Article 1 of the Addenda.
Article 10 (Applicability to calculation of necessary expenses of capital gains)
The amended provisions of Article 97(2)2 shall apply to reports to be made on or after the date this Act enters into force.
Article 11 (Applicability to special tax treatment for interest income and capital gains from sate bonds, etc. of nonresidents)
The amended provisions of Articles 119-2 and 145(2) shall apply to income to be accrued on or after the date this Act enters into force.
Article 12 (Applicability to timing for withholding taxes from interest income or dividend income)
The amended provisions of Article 131 shall apply to withholding taxes on or after the date this Act enters into force.
Article 13 (Applicability to withholding taxes from domestic source income of nonresident)
The amended provisions of Article 156(9) shall apply to assets to be transferred on or after the date this Act enters into force.
Article 14 (Applicability to retaining and maintaining books and records)
The amended provisions of Article 160(5) shall apply to entries to be recorded in a book on or after the date this Act enters into force.
Article 15 (Applicability to obligation to open and use business account)
The amended provisions of Article 160-5(3) shall apply to business accounts to be reported on or after the date this Act enters into force.
Article 16 (Applicability to submission of statement of payment)
The amended provisions of Article 164(1) shall apply to statements of payment to be submitted on or after the date this Act enters into force.
Article 17 (Applicability to use of data processing information on resident registration)
The amended provisions of Article 166 shall apply to registered data processing information to be used on or after the date this Act enters into force.
Article 18 (Transitional measures concerning special case in relation to calculations of tax on excess repayment from workplace mutual-aid association)
The amount to be credited under subparagraph 1 of Article 63 in relation to the excess payment incurred from the mutual aid payment made from January 1, 1999 to December 31, 2010 shall be the aggregate of the following amounts:
1. mutual-aid association× Number of months of payment prior to December 31, 2010 ×50%
Excess repayment from workplace ────────────────────
Total number of months paid
2. mutual-aid association× Number of months of payment after January 1, 2011 ×40%
Excess repayment from workplace ────────────────────
Total number of months paid
Article 19 (Transitional measures concerning compliant small and medium enterprises)
business entities, authorized as compliant small and medium enterprise under the previous provisions of Article 87-2(2) as at the time this Act enters into force, may determine the tax base and tax payable for global income for a taxable period leading up to the taxable period in which December 31, 2013 arrives by using compliant tax payment methods under the previous provisions of Articles 87-2 through 87-7, and file a return thereon and pay his or her due taxes.
Article 20 (Transitional measures concerning special tax treatment for interest income and capital gains from state bonds, etc. of nonresidents)
Notwithstanding the amended provisions of Articles 119-2 and 156(2), income incurred from State bonds, etc. acquired prior to November 12, 2010 shall be governed by the previous provisions.
ADDENDA <Act No. 10580, Apr. 12, 2011>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10625, May 2, 2011>
Article 1 (Enforcement date)
This Act shall enter into force three months after the date of its promulgation.
Article 2 (Applicability to submission of certificate of confirmation of compliant filing)
The amended provisions of Article 70-2 shall apply to the taxable period to which the enforcement date of this Act belongs onwards.
Article 3 (Applicability to penalty tax)
The amended provisions of Article 81(13) shall apply to the part for which a certificate of confirmation of compliant filing shall be submitted on or after the date this Act enters into force.
ADDENDA <Act No. 10789, Jun. 7, 2011>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
Article 6 Omitted.
ADDENDA <Act No. 10854, Jul. 14, 2011>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 10898, Jul. 25, 2011>
Article 1 (Enforcement date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10900, Jul. 25, 2011>
(1) This Act shall enter into force on January 1, 2012.
(2) (Applicability to imposition of capital gains tax on stocks, etc. among foreign assets) The amended provisions of Article 118-8 shall begin to apply from the stocks, etc. to be transferred for the first time after this Act enters into force.
ADDENDA <Act No. 10907, Jul. 25, 2011>
Article 1 (Enforcement date)
This Act shall enter into force six months after its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 10924, Jul. 25, 2011>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDUM <Act No. 11042, Sep. 15, 2011>
Article 1 (Enforcement date)
This Act shall enter into force on July 1, 2012.
Article 2 Omitted.
ADDENDA <Act No. 11146, Jan. 1, 2012>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2012; provided, the amended provisions of the proviso to Article 25(1) and the proviso to Article 52(8) other than its subparagraphs shall enter into force on the date of promulgation of this Act; the amended provisions of Article 17(1)1 and 6 and (4) shall enter into force on April 15, 2012; and the amended provisions of Article 7(1)5, the main sentence of Article 85(3) other than its subparagraphs (applicable only to the amended provisions of "Articles 156-3 through 156-6"), subparagraph 3 of Article 86, the main sentence of Article 121(2), Article 121(4), the proviso to Article 124, the proviso to Article 125, the main sentence of Article 156-4(1) (applicable only to the amended provisions of "Articles 156, 156-3, and 156-6"), Article 156-6, and subparagraph 5 of Article 170 shall enter into force on July 1, 2012.
Article 2 (General applicability)
(1) This Act shall apply to the first income generating after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall apply to the first asset to be transferred after this Act enters into force.
Article 3 (Applicability to temporary exclusion of taxation on security money for lease of small houses)
The amended provisions of the proviso to Article 25(1) shall apply to the first guaranty money, etc. to be reported after this Act enters into force.
Article 4 (Applicability to non-inclusion of entertainment expenses in necessary expenses)
The amended provisions of the proviso to Article 35(2) shall apply to the first entertainment expenses to be disbursed after January 1, 2012.
Article 6 (Applicability to income deduction of monthly rent)
The amended provisions of Article 52(4)2 shall apply to the first monthly rent to be paid after January 1, 2012.
Article 7 (Applicability to limit of income deduction of long-term mortgage loan)
The amended provisions of the proviso to Article 52(5) shall apply to the first interest to be paid, after borrowing a new loan or extending the period of repayment of an existing loan, after January 1, 2012.
Article 8 (Applicability to carried-over deduction of designated donations)
The amended provisions of the proviso to Article 52(8) other than subparagraphs shall apply to the first designated donations requested for tax deduction during the taxable period under which the date of promulgation of this Act falls.
Article 9 (Applicability to deadline for heir’s final return on tax base)
The amended provisions of Article 74(1) shall apply even to an heir whose deadline for reporting has not expired as of January 1, 2012.
Article 10 (Applicability to collection of loss carryback)
The amended provisions of Article 85-2(5) shall apply to the first amount to be collected after January 1, 2012.
Article 11 (Applicability to application of registered value to those who fail to report preliminary return of capital gains)
The amended provisions of the main sentence of Article 114(5) shall apply to the first portion to be determined after January 1, 2012.
Article 12 (Applicability to special cases concerning procedures for withholding taxes from nonresidents)
The amended provisions of the main sentence of Article 156-4(1) (applicable only to the amended portions of "subparagraph 1, 2, 9b, or 10 of Article 119") shall apply to the first domestic source income to be withheld after January 1, 2012.
Article 13 (Applicability to special cases concerning procedures for withholding taxes from nonresidents for application of reduced tax rate under tax treaty)
The amended provisions of Article 156-6 shall apply to the first domestic source income to be withheld after January 1, 2012.
Article 14 (Transitional measures concerning dividend of construction interest)
With respect to the dividend, etc. of the construction interest incurred before April 15, 2012, the former provisions shall apply thereto, notwithstanding the amended provisions of Article 17(1)1 and 6.
Article 15 (Transitional measures concerning limit of executives’ retirement income)
Where an executive retired before January 1, 2012 and his or her retirement income was generated after January 1, 2012, the former provisions shall apply to the said retirement income, notwithstanding the amended provisions of Article 22(3).
Article 16 (Transitional measures concerning extension of period of carried forward deduction of legal donations)
With respect to legal donations disbursed before January 1, 2012, the former provisions shall apply thereto, notwithstanding the amended provisions of Articles 34(3) and 52(8)1.
Article 17 (Transitional measures concerning limit of income deduction of long-term mortgage loan)
With respect to the limit of income deduction of the interest on a long-term mortgage loan borrowed before January 1, 2012, the former provisions shall apply thereto until the initial period of repayment ends, notwithstanding the amended provisions of the proviso to Article 52(5).
Article 18 (Transitional measures concerning penalty tax for non-payment or underpayment of withholding tax)
With respect to the portion which creates a duty to pay the income tax imposed before January 1, 2012, the former provisions shall apply thereto, notwithstanding the amended provisions of Article 85(3) and (5), 87(2), 128-2, 158, and 159.
ADDENDA <Act No. 11274, Feb. 1, 2012>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 11611, Jan. 1, 2013>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2013.
Article 2 (General applicability)
(1) This Act shall apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall apply to assets transferred after this Act enters into force.
Article 3 (Applicability to calculation of tax base of global income)
(1) The amended provisions of Article 14(3)6 shall apply to the portion to be paid after this Act enters into force.
(2) The amended provisions of Article 14(3)7b shall apply to the portion of income to be received in the form of the receipt, other than a pension, from a pension account subscribed after this Act enters into force.
Article 4 (Applicability to pension account)
A pension account under the amended provisions of Article 20-3(1)2 shall apply to portion to be subscribed after this Act enters into.
Article 5 (Applicability to exclusion of entertainment expenses from necessary expenses)
The amended provisions of the proviso to Article 35(1)2 shall apply to the portion of the taxable period under which the enforcement date of this Act falls.
Article 6 (Applicability to calculation of income generated from succession of pension account by spouse)
The amended provisions of Article 44(2) and the proviso to Article 74(1) shall apply to the pension account succeeded by a spouse due to the death of a subscriber to the account, after this Act enters into force.
Article 7 (Applicability to pension contribution deduction)
The amended provisions of Article 51-3(1)2 shall apply to pension contributions to be paid after this Act enters into force.
Article 8 (Applicability to special deduction)
The amended provisions of Article 52(3)1b and 2b and Article 52(4) shall apply to the portion to be paid after this Act enters into force.
Article 9 (Applicability to interim prepayment)
The amended provisions of the former part of Article 65(1) shall apply to the portion of the tax amount to be determined after this Act enters into force.
Article 10 (Applicability to submission of certificate of compliant filing)
The amended provisions of Article 70-2(2) shall apply to the portion of the final tax return to be filed after this Act enters into force.
Article 11 (Applicability to exception to final return on tax base)
The amended provisions of Article 73(2) shall apply to the portion to be reported after this Act enters into force.
Article 12 (Applicability to application for reduction or exemption of tax)
The amended provisions of Articles 75(1), 76(1), 80(1) and (2), 82(2), 85-2(2), and 160-5(4) shall apply to the portion requested, paid, determined or corrected, occasionally imposed, altered, or added after this Act enters into force.
Article 13 (Applicability to penalty tax, submission of statement of payment, and issuance of receipt for donation)
(1) The amended provisions of Article 81(1) shall apply to the portion for which a deadline for submission arrives after this Act enters into force.
(2) The amended provisions of Article 81(12) shall apply to the portion for which a receipt for donation is issued after this Act enters into force.
Article 14 (Applicability to method of reduction and exemption of capital gains tax)
The amended provisions of Article 90(2) shall apply to the portion to be reported, determined, or corrected after this Act enters into force.
Article 15 (Applicability to withholding tax rates)
(1) The amended provisions of Article 129(1)1a shall apply to the portion to be received from bonds issued after this Act enters into force.
(2) The amended provisions of Article 129(1)5, 5-2, 6 (excluding item b) and the main sentence of Article 129(2)2 shall apply to the portion to be paid after this Act enters into force.
(3) The amended provisions of Article 129(1)6b shall apply to the portion of income to be received, in the form of the receipt, other than a pension, from a pension account subscribed to after this Act enters into force.
Article 16 (Applicability to obligations to register as issuers of cash receipts and to issue cash receipts for cash payment)
The amended provisions of Article 162-3(4) shall apply to goods or services to be supplied by a business entity after this Act enters into force.
Article 17 (Applicability to submission of statement of payment)
The amended provisions of Articles 164(1) and 164-2 shall apply to the portion for which a statement of payment is submitted after this Act enters into force.
Article 18 (Applicability to pension account)
Among accounts subscribed to or contracted before this Act enters into force, the accounts, such as retirement insurance, pension savings, or other pensions under the former provisions of Article 20-3(1)3 through 5 shall be deemed pension accounts under the amended provisions of Article 20-3(1)2.
Article 19 (Transitional measures concerning pension savings)
With respect to the income received, in the form, other than a pension, by a person due to early termination of an agreement on pension savings because the said person who had previously subscribed to the pension savings under Article 86-2 of the former Act on Restriction on Special cases Concerning Taxation as at the time this Act enters into force, died after enforcement date of this Act or after expiry of the said agreement, the former provisions shall apply thereto, notwithstanding the amended provisions of Articles 20-3(1)4 and 129(1)5-2.
Article 20 (Transitional measures concerning receipt of retirement income accounts, other than pension)
Where a person transfers or deposits his or her retirement income to a retirement pension account after he or she retires before this Act enters into force, or where an additional charge is paid before this Act enters into force at the cost of the subscriber pursuant to Articles 20(2) and 25(2)3 of the Guarantee of Workers' Retirement Benefits Act, with respect to the relevant amount (including the amount additionally received according to the distributions based on performances of management of the said amount), the former provisions shall apply thereto, notwithstanding the amended provisions of Articles 21(1)21 and 22(1).
Article 21 (Transitional measures concerning amount converted to severance payment)
An amount converted to the severance payment for an employee by paying into the National Pension Fund by his or her employer pursuant to Article 75 of the amended National Pension Act (Act No. 4971) as at the time this Act enters into force shall be governed by the former provisions, notwithstanding the amended provisions of Article 22(5).
Article 22 (Transitional measures concerning retirement income)
(1) Where the retirement income of a person who retires before this Act enters into force is paid after this Act enters into force, the former provisions shall apply to the relevant retirement income, notwithstanding the amended provisions of Article 55(2).
(2) With respect to the amount calculated by multiplying the tax base on retirement income of a person who started working before this Act enters into force and retires after this Act enters into force by the ratio of number of years of continuous services done before this Act enters into force (referring to the ratio obtained by dividing the number of years of continuous services done until December 31, 2012, by the number of years of entire continuous services), the former provisions shall apply thereto, notwithstanding the amended provisions of Article 55(2).
Article 23 (Transitional measures concerning withholding tax rates)
With respect to the interest and discount amount of bonds issued before this Act enters into force, the former provisions shall apply thereto, notwithstanding the amended provisions of Article 129(1)1a.
ADDENDA <Act No. 11652, Mar. 22, 2013>
Article 1 (Enforcement date)
This Act shall enter into force three months after the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 11845, May 28, 2013>
Article 1 (Enforcement date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted)
Articles 2 through 15 Omitted.
Article 16 Omitted.
Article 17 Omitted.
ADDENDUM <Act No. 11873, Jun. 7, 2013>
Article 1 (Enforcement date)
This Act shall enter into force on July 1, 2013.
Articles 2 through 17 Omitted.
Article 18 Omitted.
Article 19 Omitted.
ADDENDA <Act No. 12030, Aug. 13, 2013>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to deduction of loans for renting house from income)
The amended provisions of Article 52(4) shall apply to the first principal repaid and interest or rents paid after this Act enters into force.
ADDENDUM <Act No. 12153, Jan. 1, 2014>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2014. (Proviso Omitted.)
Articles 2 through 18 Omitted.
Article 19 Omitted.
ADDENDA <Act No. 12169, Jan. 1, 2014>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2014; provided, the amended provisions of Article 162-3(4) shall enter into force on July 1, 2014, and the amended provisions of subparagraph 2f of Article 12 and Article 19(1)1 shall enter into force on January 1, 2015.
Article 2 (General applicability)
(1) This Act shall apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall apply to assets transferred after this Act enters into force.
Article 3 (Applicability to non-inclusion of donations in necessary expenses)
The amended provisions of Article 34(3) shall apply to donations made during the taxable period in which this Act enters into force.
Article 4 (Applicability to special income deduction)
(1) The amended provisions of Article 52(4) shall apply to principal repaid and interest paid after this Act enters into force, out of a loan borrowed for renting a house, or rents paid after this Act enters into force.
(2) The amended provisions of Article 52(5) shall apply to long-term mortgage loans borrowed after this Act enters into force.
Article 5 (Applicability to income tax rates)
The amended provisions of Article 55(1) shall apply to income generated during the taxable period in which this Act enters into force and subsequent taxable periods.
Article 6 (Applicability to tax credit for children)
The amended provisions of Article 59-2, subparagraph 2 of Article 15, Article 70(4)1, the proviso to Article 122, the proviso to Article 126(5), Articles 137(1)3 and (2), 143-4(1) and (2), 143-6(2), and 144-3 (limited to the provisions relevant to the tax credit for children under the amended provisions of Article 59-2) shall apply to the taxable period in which this Act enters into force and subsequent taxable periods.
Article 7 (Applicability to tax credit for pension accounts)
The amended provisions of Article 59-3, subparagraph 2 of Article 15, Articles 54-2, 70(4)1, 137(1) and (2), and 144-3 (limited to the provisions relevant to the tax credit for pension accounts under the amended provisions of Article 59-3) shall apply to payments made into pension accounts after this Act enters into force.
Article 8 (Applicability to special tax credits)
The amended provisions of Article 59-4, subparagraph 2 of Article 15, the main sentence of Article 54(2), Articles 70(4)1 and 81(12), the proviso to Article 122, the proviso to 126(5), Articles 137(1)3, (2), and (3), 143-4(1) through (3), 144-2(4), 144-3, 160-3(1), and 175(1) (limited to the provisions relevant to special tax credits under the amended provisions of Article 59-4) shall apply to insurance premiums, medical expenses, education expenses, and donations paid after this Act enters into force or standard tax credits for the taxable period in which this Act enters into force and subsequent taxable periods.
Article 9 (Applicability to duty to prepare and keep detailed statement of issuance of receipts for donation and penalty tax)
The amended provisions of Articles 81(12) and 160-3(1) shall apply to donations made after this Act enters into force.
Article 10 (Applicability to calculation statement of reserved Income of specific foreign corporations)
The amended provisions of Article 81(14) shall apply to the taxable period in which this Act enters into force and subsequent taxable periods.
Article 11 (Applicability to non-collection of small sum)
The amended provisions of subparagraph 4 of Article 86 shall apply to the interim prepaid tax amounts collected after this Act enters into force.
Article 12 (Applicability to special cases in calculation of necessary expenses for capital gains)
The amended provisions of Article 97-2(4) and (5) shall apply to assets acquired by inheritance and transferred after this Act enters into force.
Article 13 (Applicability to withholding tax rates)
The amended provisions of Article 129(1)6 shall apply to income received in addition to pension after this Act enters into force.
Article 14 (Applicability to special cases in withholding domestic source income of nonresidents)
(1) The amended provisions of Article 156(7) shall apply to income paid after this Act enters into force.
(2) The amended provisions of Article 156(9) shall apply to income distributed after this Act enters into force.
Article 15 (Applicability to application for non-taxation or tax exemption under tax treaty with regard to nonresidents)
The amended provisions of Article 156-2 shall apply to domestic source income paid after this Act enters into force.
Article 16 (Applicability to special cases in procedures for withholding for application of reduced tax rates under tax treaty with regard to nonresidents)
The amended provisions of Article 156-6(4) shall apply to applications filed for rectification after this Act enters into force.
Article 17 (Applicability to minimum amount for compulsory issuance of cash receipts)
The amended provisions of Article 162-3(4) shall apply to goods or services supplied after this Act enters into force.
Article 18 (Applicability to duty to submit documents about overseas corporations and fines for negligence for non-performance)
The amended provisions of Articles 165-2 and 165-3 shall apply to the taxable period in which this Act enters into force and subsequent taxable periods.
Article 19 (Special cases concerning deduction of Interest paid for long-term mortgage loans)
Notwithstanding the former provisions of Article 52(5)2, if a person who has been permitted to deduct the interest paid for a long-term mortgage loan borrowed before this Act enters into force under the former provisions of Article 52(5) owns at least two houses as a consequence of the person's acquisition of another house with another long-term mortgage loan borrowed after this Act enters into force or of the acquisition of another house by a member of his or her household after this Act enters into force, the interest paid for the long-term mortgage loan borrowed before this Act enters into force may be deducted in accordance with the amended provisions of Article 52(5)2.
Article 20 (Special cases concerning tax rates of capital gains tax)
The tax rate under Article 104(1)1 (the tax rate specified in paragraph (1)2 or 3 where the holding period of the relevant assets is less than two years) shall apply to income generated from the transfer of assets specified in Article 104(1)8 or 9 (excluding real estate situated in an area designated under Article 104-2(2)) on or before December 31, 2014. <Amended on Dec. 23, 2014>
Article 21 (Transitional measures concerning additional deduction for children)
Notwithstanding the amended provisions of Articles 14(2), 51(1)4 and 5, 51-2, and 53(4) and (5), the proviso to Article 122, the proviso to Article 126(5), and Articles 143-4(1) and 143-6(2), the former provisions shall apply to the additional deduction for children for the taxable periods before this Act enters into force.
Article 22 (Transitional measures concerning pension income)
If there remains an amount that falls under the former provisions of Article 20-3(1)2b after this Act enters into force, such amount shall be deemed an amount paid in a pension account under the amended provisions of Article 20-3(1)2b.
Article 23 (Transitional measures concerning special income deduction)
Notwithstanding the amended provisions of Articles 34(3) and 52(1) through (3) and (6) through (9), the main sentence of Article 54(2), Articles 54-2, 70(4)1, and 81(12), the proviso to Article 122, the proviso to Article 126(5), Articles 137(3), 143-4(1) through (3), 144-2(4), 160-3(1), and 175(1), the former provisions shall apply to insurance premiums, medical expenses, education expenses, and donations paid before this Act enters into force or standard deductions for the taxable periods before this Act enters into force.
Article 24 (Transitional measures concerning deduction of pension contributions)
Notwithstanding the amended provisions of Article 51-3(1) and (5), the former provisions shall apply to payments made into pension accounts before this Act enters into force.
ADDENDA <Act No. 12420, Mar. 18, 2014>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
Article 23 Omitted.
ADDENDA <Act No. 12738, Jun. 3, 2014>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 12852, Dec. 23, 2014>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2015; provided, the amended provisions of subparagraph 2b of Article 12, Article 45(2) and (3), and Article 52(4) shall enter into force on the date of its promulgation; the amended provisions of 163(1)1 on July 1, 2015; the amended provisions of Articles 48(1) and (2), 55(2), 94(1)5, 99(1)7, 102(1)3, 103(1)3, 104(1)12, 105(1), 118-2, 118-5(1), 118-7(1), 118-8, 163(1)2, and 174-2 on January 1, 2016; and the amended provisions of Articles 14(3)7, 64-2, 70(2), and 168(1) on January 1, 2019. <Amended on Dec. 20, 2016>
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) The amended provisions regarding capital gains in this Act shall apply to the transfers made after this Act enters into force.
Article 3 (Applicability to non-taxable income)
The amended provisions of subparagraph 2b of Article 12 and Articles 45(2) and (3) and 52(4) shall apply to the incomes that accrue or the losses incurred during the taxable period in which this Act is promulgated.
Article 4 (Applicability to house rental income subject to separate taxation)
The amended provisions of Articles 14(3)7, 64-2, 70(2), and 168(1) shall apply to the incomes that accrue on or after January 1, 2019. <Amended on Dec. 20, 2016>
Article 5 (Applicability to income deduction for interest expenses of long-term mortgage loans)
The amended provisions of Article 52(5) and (6) shall apply to the loans borrowed after this Act enters into force.
Article 6 (Applicability to tax credit for issuance of electronic invoices by transmission)
The amended provisions of Article 56-3 shall apply to the transactions made after this Act enters into force.
Article 7 (Applicability to increase of maximum limit on tax credit for pension accounts)
The amended provisions of Article 59-3(1) shall apply to the deposits made in a pension account after this Act enters into force.
Article 8 (Applicability to methods applicable to excess of tax exemptions or reductions and tax credits)
The amended provisions of Articles 59-3(3), 59-4(7) and (8), 60, and 61 shall apply to the year-end settlement or to the final returns filed on the tax base of global income, after this Act enters into force.
Article 9 (Applicability to tax credit for donations)
The amended provisions of Article 59-4(4) shall apply to the year-end settlement or to the final returns filed on the tax base of global income, after this Act enters into force.
Article 10 (Applicability to standard tax credits)
The amended provisions of Article 59-4(9) shall apply to the year-end settlement or the final returns filed on the tax base of global income, after this Act enters into force.
Article 11 (Applicability to special cases concerning calculation of tax in relation to global taxation on interest income)
The amended provisions of Article 62 shall apply to the dividends distributed according to a resolution on the appropriation of retained earnings at the end of a business year that begins after this Act enters into force.
Article 12 (Applicability to special cases concerning calculation of tax on excess repayment from workplace mutual-aid association)
The amended provisions of Article 63 shall apply to the repayments made in installments after this Act enters into force.
Article 13 (Applicability concerning penalty tax)
The amended provisions of Article 81(3) shall apply to the goods supplied or the services provided by a business entity who falls under Article 163(1)1 on or after January 1, 2016 and shall apply to the goods supplied or the services provided by a business entity who falls under Article 163(1)2 on or after January 1, 2017.
Article 14 (Applicability to definition of transfer)
The amended provisions of Article 88(2)2 shall apply to land exchanged after this Act enters into force.
Article 15 (Applicability to capital gains tax on derivatives)
The amended provisions of Articles 94(1)5, 99(1)7, 102(1)3, 103(1)3, 104(1)12, 105(1), 118-2, 118-5(1), 118-7(1), 118-8, and 174-2 shall begin to apply from the first trading or conduct that takes place on or after January 1, 2016.
Article 16 (Applicability to issuance of withholding tax receipts for pension income)
The amended provisions of Article 143-7 shall apply to the withholding tax receipts issued after this Act enters into force.
Article 17 (Applicability to settlement of tax amounts of retirement income)
The amended provisions of Article 148(2) shall apply to the settlement of tax amounts after this Act enters into force.
Article 18 (Applicability to special cases concerning withholding taxes on income generated from transfer of paintings, calligraphic works, and antiques)
The amended provisions of Article 155-5 shall apply to those transferred after this Act enters into force.
Article 19 (Applicability to obligations to report and use business account)
The amended provisions of Article 160-5(3) shall begin to apply from the first business account reported after this Act enters into force.
Article 20 (Applicability to obligations to register as cash receipt merchant and to issue cash receipts for cash payment)
The amended provisions of Article 162-3(1) shall apply to the business entities who meet the requirements for registering as cash receipt merchants after this Act enters into force.
Article 21 (Applicability to preparation, issuance of invoices)
The amended provisions of Article 163(1), (5), (8), and (9) shall apply to the goods supplied or the services provided by a business entity who falls under Article 163(1)1 on or after July 1, 2015 and shall apply to the goods supplied or the services provided by a business entity who falls under Article 163(1)2 on or after January 1, 2016.
Article 22 (Applicability to administrative fines for non-performance of duty to submit documents about overseas corporations)
The amended provisions of Article 165-3 shall apply to the non-performance of the duty to submit documents about the taxable period in which this Act enters into force and subsequent taxable periods.
Article 23 (Transitional measures concerning pension accounts)
The accounts of retirement insurance, pension, etc. under Article 20-3(1)3 or 5 of the former Income Tax Act (referring to the Act prior to the partial amendment to the Income Tax Act (Act No. 11611)) and the accounts of pension savings under Article 20-3(1)4 of the former Income Act, which were opened or contracted before January 1, 2013, shall be deemed retirement pension accounts and pension savings accounts under the amended provisions of Article 20-3(1)2.
Article 24 (Transitional measures concerning income deduction for interest expenses of long-term mortgage loans)
Notwithstanding the amended provisions of Article 52(5) and (6), the former provisions shall apply to the long-term mortgage loans borrowed before this Act enters into force.
Article 25 (Special cases concerning deduction of retirement income)
Notwithstanding the amended provisions of Articles 48(1) and (2) and 55(2), the calculated tax amount on retirement income where a person retires during the period from January 1, 2016 to December 31, 2019 shall be calculated by the formula applicable to the taxable period in which the person retires in the following table:
Taxable Period in which a Person RetiresCalculated Tax Amount on Retirement Income
From January 1, 2016 to December 31, 201680% of the calculated tax amount on retirement income according to the former provisions + 20% of the calculated tax amount on retirement income according to the amended provisions
From January 1, 2017 to December 31, 201760% of the calculated tax amount on retirement income according to the former provisions + 40% of the calculated tax amount on retirement income according to the amended provisions
From January 1, 2018 to December 31, 201840% of the calculated tax amount on retirement income according to the former provisions + 60% of the calculated tax amount on retirement income according to the amended provisions
From January 1, 2019 to December 31, 201920% of the calculated tax amount on retirement income according to the former provisions + 80% of the calculated tax amount on retirement income according to the amended provisions
ADDENDUM <Act No. 12989, Jan. 6, 2015>
Article 1 (Enforcement date)
This Act shall enter into force on July 1, 2015.
Articles 2 through 4 Omitted.
Article 5 Omitted.
Article 6 Omitted.
ADDENDA <Act No. 13206, Mar. 10, 2015>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to year-end settlement of income tax on wages and salaries)
The amended provisions of Article 137 shall become applicable when the wages and salaries for February of 2015 are paid.
Article 3 (Special cases concerning year-end settlement of income tax on wages and salaries)
(1) Notwithstanding the amended provisions of Article 137(4), if the additional tax amount payable at the time of year-end settlement of the income tax on wages and salaries for the taxable period of 2014 exceeds 100,000 won, the withholding agent may withhold the additional tax amount in installments until he or she pays wage and salary income for the period from March to May 2015.
(2) Notwithstanding Article 137(1), if the additional tax amount payable at the time of year-end settlement of the income tax on wages and salaries for the taxable period of 2014 does not exceed 100,000 won, the withholding agent may withhold the additional tax amount when he or she pays wage and salary income for March 2015.
ADDENDA <Act No. 13282, May 13, 2015>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation.
Article 2 (General applicability)
This Act shall apply to the incomes that accrue during the taxable period of 2014 and subsequent taxable periods.
Article 3 (Applicability to tax credit for children)
The amended provisions of Article 59-2(3) shall apply where a child is born or reported as adopted on or after January 1, 2014.
Article 4 (Applicability to tax credit for pension accounts)
The amended provisions of Article 59-3(1) shall apply to the payments into pension accounts on or after January 1, 2014.
Article 5 (Applicability to special tax credits)
The amended provisions of Article 59-4(1) shall apply to insurance premiums paid on or after January 1, 2014.
Article 6 (Special cases concerning year-end settlement of income tax on wages and salaries for taxable period of 2014)
(1) A withholding agent shall calculate income tax under Article 137(1)3 or the excess amount under Article 137(2) (hereafter referred to as "income tax or an excess after amended tax credits" in this Article) for the wage and salary income for the taxable period of 2014 by applying the amended provisions of Articles 59, 59-2, 59-3, and 59-4 (hereafter referred to as "amended provisions concerning tax credits" in this Article), based on the return filed on income deduction and tax credit for wage and salary income under Article 140 (hereafter referred to as "return already filed on income deduction and tax credit" in this Article), when he or she pays the wage and salary income for February 2015, before paying the wage and salary income for May 2015 (or at the end of May, if no wage and salary income is paid by the end of May, no wage and salary income is payable for May, or the wage and salary income for May was paid before this Act enters into force); provided, a withholding agent need not calculate income tax or an excess after amended tax credits for a resident with wage and salary income, if the resident has no final tax amount to be paid, as calculated by applying the former provisions of Articles 59, 59-2, 59-3, and 59-4 (hereafter referred to as "former provisions concerning tax credits" in this Article), based on the return already filed on income deduction and tax credit for the wage and salary income for the taxable period of 2014.
(2) If any difference (referring to the sum of two excess amounts, if an excess under 137(2) accrues by applying the amended provisions concerning tax credits pursuant to paragraph (1) in addition to income tax under Article 137(1)3, as calculated by applying the former provisions concerning tax credits) arises as to income tax under Article 137(1)3 or the excess under Article 137(2), as calculated by applying income tax or an excess after amended tax credits and former provisions concerning tax credits, the withholding agent shall refund the difference by applying Article 137(2) mutatis mutandis to such cases.
(3) For the purpose of applying the amended provisions of Article 59-2 for calculation pursuant to paragraph (1), a withholding agent shall apply the amended provisions of Article 59-2 only to the children eligible for tax credit in the return already filed on income deduction and tax credit, any resident with wage and salary income, who reported adoption on or after January 1, 2014, shall file a return on income deduction and tax credit for wage and salary income under Article 140 again with the withholding agent before the wage and salary income for May 2015 is paid (or at the end of May, if no wage and salary income is paid by the end of May, no wage and salary income is payable for May, or the wage and salary income for May was paid before this Act enters into force).
(4) The withholding agent who calculates income tax or an excess after amended tax credits shall issue a withholding tax receipt to the resident with wage and salary income by the end of May 2015.
Article 7 (Special cases concerning year-end settlement of income tax on public pensions and income tax on business income excepted from final return on tax base for taxable period of 2014)
(1) Article 6 of the Addenda shall apply mutatis mutandis to year-end settlement of income tax on public pensions for the taxable period of 2014. In such cases, "wage and salary income" shall be construed as "public pension income," "when the wage and salary income for February 2015 is paid" as "finally before December 31, 2014," "return on income deduction and tax credit for wage and salary income under Article 140" as "return on income deduction and tax credits for a pension income earner under Article 143-6," "Articles 59, 59-2, 59-3, and 59-4" as "Article 59-2," "income tax under Article 137(1)3" as "amount under Article 143-4(1)," and "Article 137(2)" as "Article 143-4(2)."
(2) Article 6 of the Addenda shall apply mutatis mutandis to year-end settlement of income tax on business income excepted from final return on tax base for the taxable period of Article 2014. In such cases, "wage and salary income" shall be construed as "business income subject to year-end settlement," "return on income deduction and tax credit for wage and salary income under Article 140" as "return on income deduction and tax credits for the business income earner subject to year-end settlement under Article 144-3," "Articles 59, 59-2, 59-3, and 59-4" as "Articles 59-2 and 59-3," "Article 137(1)3" as "Article 144-2(1), "excess under paragraph (2)" as "excess under paragraph (3)," and "Article 137(2)" as "Article 144-2(3).
Article 8 (Special cases concerning submission of statements of payment for taxable period of 2014)
A withholding agent shall submit statements of payment calculated and prepared again under Articles 6 and 7 of the Addenda to the head of the tax office having jurisdiction over withholding taxes, the commissioner of the relevant regional tax office, or the Commissioner of the National Tax Service by June 10, 2015, by applying Article 164 mutatis mutandis.
Article 9 (Special cases concerning final return on tax base of global income for taxable period of 2014)
Notwithstanding Article 70(1), a resident with wage and salary income, public pension income, or business income subject to year-end settlement may file a return on the tax base of global income for the taxable period of 2014 to the head of the tax office having jurisdiction over the place for tax payment by June 30, 2015.
ADDENDA <Act No. 13426, Jul. 24, 2015>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 37 Omitted.
Article 38 Omitted.
Article 39 Omitted.
ADDENDA <Act No. 13558, Dec. 15, 2015>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2016; provided, the amended provisions of Articles 84 and 156-7 shall enter into force on July 1, 2016; and the amended provisions of Articles 12, 14, 21, 73, 80, 145-3, 155-6, 164, and 170 on January 1, 2018.
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall begin to apply from the income accruing from the assets transferred after this Act enters into force.
Article 3 (Applicability to non-inclusion of costs of maintaining business-use passenger vehicles as necessary expenses)
The amended provisions of Articles 25(3) and 33-2 shall apply to the persons subject to business entities subject to confirmation of compliant filing under Article 70-2(1), who sells such vehicles or includes costs for such vehicles in necessary expenses or pays such costs as necessary expenses after this Act enters into force, among persons subject to double-entry bookkeeping under Article 160(3), and to other persons subject to double-entry bookkeeping, except business entities subject to confirmation of compliant filing, when they sell such vehicles or include costs for such vehicles in necessary expenses or pay such costs as necessary expenses on and after January 1, 2017.
Article 4 (Applicability to basic deduction)
The amended provisions of Article 50(1)2 and (3) shall apply where a return on tax base is filed, income tax is determined, or income tax is settled at the year end after this Act enters into force.
Article 5 (Applicability to tax credit for donations)
The amended provisions of Article 59-4(4) shall apply to the donations made after this Act enters into force.
Article 6 (Applicability to submission of statement of adjustment)
The amended provisions of Article 70(6) shall apply where a return on the tax base of global income is filed after this Act enters into force.
Article 7 (Applicability to adjustment of threshold of taxation on other income)
The amended provisions of subparagraphs 1 and 2 of Article 84 shall apply where a person becomes entitled to a refund, a prize, etc. after the enforcement date specified in the proviso to Article 1 of the Addenda.
Article 8 (Applicability to transfer of overseas assets)
The amended provisions of Article 118-2 shall apply where rectification or determination is made after this Act enters into force.
Article 9 (Applicability to special cases concerning withholding taxes on income of temporary staffing agency workers of foreign corporations)
The amended provisions of Article 156-7 shall apply to the amounts that a hiring domestic corporation pays to a temporary staffing foreign corporation after the enforcement date specified in the proviso to Article 1 of the Addenda.
Article 10 (Applicability to submission of detailed statements of stocks)
The amended provisions of subparagraph 2 of Article 174-2 shall apply to the stocks traded over the counter under Article 286 of the Financial Investment Services and Capital Markets Act through brokerage of a financial investment business entity after this Act enters into force.
Article 10-2 (Special cases concerning deferral of penalty tax on noncompliance with submission of payment statements for religious worker income)
Article 81(1) shall not apply to a statement of payment of religious persons' income under the amended provisions of Article 21(1)26 (including cases falling under the amended provisions of paragraph (3) of that Article) which is accrued and paid between January 1, 2018 and December 31, 2019.
Article 11 (Transitional measures concerning adjustment of threshold of taxation on other income)
Notwithstanding the amended provisions of subparagraphs 1 and 2 of Article 84, the former provisions shall apply where a person became entitled to a refund, a prize, etc. before the enforcement date specified in the proviso to Article 1 of the Addenda.
Article 12 (Transitional measures concerning adjustment of tax rate on capital gains from transfer of stocks of small and medium enterprises)
Notwithstanding the amended provisions of Article 104(1)11, the former provisions shall apply where the Korea Securities Depository, established pursuant to Article 294 of the Financial Investment Services and Capital Markets Act, transfers stocks issued by small and medium enterprises and deposited for safekeeping by it compulsorily under the Financial Investment Services and Capital Markets Act and the Debtor Rehabilitation and Bankruptcy Act by not later than six months after the end of the deposit period.
Article 13 (Transitional measures concerning abolition of payment in kind system)
Notwithstanding the amended provisions of Article 112-2, the former provisions shall apply to land, etc. transferred or expropriated before this Act enters into force.
ADDENDUM <Act No. 13796, Jan. 19, 2016>
Article 1 (Enforcement date)
This Act shall enter into force on September 1, 2016.
Article 2 Omitted.
Article 3 Omitted.
Article 4 Omitted.
ADDENDA <Act No. 13797, Jan. 19, 2016>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 9 Omitted.
Article 10 Omitted.
Article 11 Omitted.
ADDENDA <Act No. 14389, Dec. 20, 2016>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2017; provided, the amended provisions of Article 97-2(2) shall enter into force on July 1, 2017; and the amended provisions of Articles 81(1) and (3) and 105(1)2 and Section 11 of Chapter III (Articles 118-9 through 118-18) on January 1, 2018.
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall begin to apply from the income accruing from the assets transferred after this Act enters into force.
Article 3 (Applicability to profit margins on savings insurances)
The amended provisions of Article 16(1)9 shall apply to the contracts made after this Act enters into force.
Article 4 (Applicability to exclusion of donations from necessary expenses)
The amended provisions of Article 34(4) shall apply where a return on tax base is filed or income tax is determined after this Act enters into force.
Article 5 (Applicability to tax credit for pension account)
The amended proviso to Article 59-3(1) shall begin to apply from the first deposits paid into a pension account after this Act enters into force.
Article 6 (Applicability to special tax credit for donations)
The amended provisions of Article 59-4(4) shall apply where a return on tax base if filed or income tax is determined or settled at the year end after this Act enters into force.
Article 7 (Applicability to penalty tax)
The amended provisions of Article 81(1)1 and 2 and (3)2 and 3 shall apply to a statement of payment, an aggregate table of invoices by purchaser, or an aggregate table of invoices by seller that shall be submitted on or after January 1, 2018.
Article 8 (Applicability to preliminary return on tax base of capital gains)
The amended provisions of Article 105(1)2 shall apply to the assets transferred on or after January 1, 2018.
Article 9 (Applicability to special cases concerning capital gains tax on domestic stocks upon departure of residents)
The amended provisions of Articles 118-9 through 118-18 shall apply where a resident leaves the Republic of Korea on or after January 1, 2018.
Article 10 (Applicability to application for non-taxation or tax exemption of nonresident under tax treaty)
The amended provisions of Articles 156-2(4), 156-4(2), and 156-6(4) shall also apply where the period previously set for filing an application for correction has not elapsed as at the time this Act enters into force.
Article 11 (Special cases concerning application of tax credit for repayment of principal of student loans and payment of interest thereon as education expenses)
(1) If a resident or a lineal ascendant or spouse (hereafter referred to as "lineal ascendant or spouse" in this Article) who has a resident registered as a person eligible for basic deduction (regardless of age) deducted education expenses paid by the resident for the repayment of the principal of student loans under the amended provisions of Article 59-4(3)2d and the payment of interest thereon as a tax credit for education expenses under Article 59-4(3)1 and 2 before this Act enters into force, the same amended provisions shall not apply to the amount equivalent to the deducted amount.
(2) If the amount that the resident under paragraph (1) shall pay for the repayment of the principal of student loans and interest thereon is greater than the amount equivalent to the tax credit deducted for the education expenses, the amount that the resident has paid or shall pay for the repayment of the principal of student loans and interest thereon shall be deemed equivalent to the amount deducted by the lineal ascendant or spouse as a tax credit for education expenses for the purpose of applying paragraph (1).
Article 12 (Transitional measures concerning compensation for employee's inventions)
Notwithstanding the amended provisions of subparagraphs 3v and 5d of Article 12 and Articles 20(1)5 and 21(1)22-2, the former provisions shall apply to compensations paid for employee's inventions before this Act enters into force.
Article 13 (Transitional measures concerning tax credit for children)
Notwithstanding the amended provisions of Article 59-2(3), the former provisions shall apply where a child is born or reported as adopted before this Act enters into force.
Article 14 (Transitional measures concerning capital gains)
Notwithstanding the amended provisions of Article 95(4), the former provisions shall apply where a parcel of land for non-business use was transferred before this Act enters into force.
Article 15 (Transitional measures concerning preliminary return on tax base of capital gains)
Notwithstanding the amended provisions of Article 105(1)3, the former provisions shall apply where an encumbered asset is donated as a gift before this Act enters into force.
Article 16 (Transitional measures concerning domestic source income from Personal Services under tax treaties)
Notwithstanding the amended provisions of the former part of subparagraph 6 of Article 119 and the amended provisons of the proviso to Article 156(1)2, the former provisions shall apply where personal services were provided in a foreign country before this Act enters into force.
ADDENDA <Act No. 14474, Dec. 27, 2016>
Article 1 (Enforcement date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 12 Omitted.
Article 13 Omitted.
Article 14 Omitted.
ADDENDA <Act No. 14569, Feb. 8, 2017>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 7 Omitted.
Article 8 Omitted.
Article 9 Omitted.
ADDENDA <Act No. 15225, Dec. 19, 2017>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2018; provided, the following amended provisions shall enter into force on the dates specified as follows: <Amended on Dec. 31, 2018>
1. The amended provisions of Article 64(1) (limited to the assets subject to the tax rate specified in any subparagraph of Article 104(7)), the main sentence of Article 95(2), Article 104(4)1 and 2, Article 104(5)2, (7), and (8), and Article 104-2(2): April 1, 2018;
2. The amended provisions of Article 156-7(1): July 1, 2018;
3. The amended provisions of Article 59-2(1) and Table 1 of Article 95(2) : January 1, 2019.
4. Article 104(1)11a2) (limited to stocks, etc. of small and medium enterprises under Article 94(1)3b): January 1, 2019.
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains in this Act shall begin to apply from the income accruing from the assets transferred after this Act enters into force.
Article 3 (Applicability to scope of dividend income)
The amended provisions of Article 17(1)5-2 shall begin to apply from the dividends distributed after this Act enters into force.
Article 4 (Applicability to special cases concerning exclusion of expenses related to business-use passenger vehicles from necessary expenses)
The amended provisions of Article 33-2(2) shall begin to apply from the expenses stated in the final returns filed on the tax base of global income after this Act enters into force.
Article 5 (Applicability to special tax credits)
The amended provisions of Article 59-4(2)2 shall begin to apply from the medical expenses paid after this Act enters into force.
Article 6 (Applicability to penalty tax related to invoices and receipts)
The amended provisions of Article 81(3)4 shall begin to apply from the invoices issued for goods or services supplied after this Act enters into force or credit card sales slips or cash receipts issued or received after this Act enters into force.
Article 7 (Applicability to deadline for filing return on capital gains tax for transactions of land in area subject to permission for transactions of land)
The amended proviso to Article 105(1)1 and the amended provisions of Article 110(1) shall begin to apply where the designation of an area subject to permission for transactions of land is cancelled after this Act enters into force.
Article 8 (Applicability to scope of capital gains on overseas derivatives, etc.)
The amended provisions of Article 118(2), subparagraph 4 of Article 118-2, Article 118-5(1)3 and (2), Article 118-7(1)3, and the main sentence of Article 118-8 shall begin to apply from the capital gains stated in the final returns filed after this Act enters into force.
Article 9 (Applicability to deferment of payment by persons moving abroad)
The amended provisions of Articles 118-16(3) and (4) and 118-17(1)1 shall begin to apply where a resident departs from the Republic of Korea after this Act enters into force.
Article 10 (Applicability to withholding tax rates)
(1) The amended provisions of Article 129(1)6b shall begin to apply where a mutual aid contract is terminated after this Act enters into force.
(2) The amended provisions of Article 129(2)2 shall begin to apply from the income paid by a withholding agent after this Act enters into force.
Article 11 (Applicability to special cases concerning withholding tax on income of temporary staffing agency workers of foreign corporations)
The amended provisions of Article 156-7(1) shall begin to apply from the payments made by a hiring domestic corporation on or after July 1, 2018.
Article 12 (Applicability to submission of statement of payment)
The amended provisions of Article 164(6) shall begin to apply from the detailed statements of issued electronic invoices or electronic tax invoices transmitted after this Act enters into force.
Article 13 (Applicability to submission of documents about overseas local corporations)
The amended provisions of Article 165-2(1) shall begin to apply where a return on the tax base is filed after this Act enters into force.
Article 14 (Transitional measures concerning withholding tax rates)
Notwithstanding the amended provisions of Articles 14(3)3 and 129(1)1a, the former provisions shall apply to the interest and discount on long-term bonds issued before this Act enters into force.
ADDENDA <Act No. 15522, Mar. 20, 2018>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 28 Omitted.
Article 29 Omitted.
Article 30 Omitted.
ADDENDA <Act No. 16104, Dec. 31, 2018>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2019; provided, the amended provisions of Articles 2, 81(15), 118-11 (limited to the stocks, etc. of small and medium enterprises under Article 94(1)3b), 119-2, 129(1)1b, 156-2(2), 156-6(2), 165-3(2) and (3) (in case of paragraph (3), limited to the parts of (3) related to paragraph (2) of that Article), and 176(2) shall enter into force on January 1, 2020.
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains tax in this Act shall apply to the assets transferred after this Act enters into force.
Article 3 (Applicability concerning deduction carried forward of donations)
The amended provisions of Articles 34(4) and 61(2) shall apply beginning with the donations for which the tax base is reported or the year-end tax settlement is made after this Act enters into force, but shall also apply to the donations made after January 1, 2013.
Article 4 (Applicability to non-inclusion of entertainment expenses in necessary expenses)
The amended provisions of Articles 35(3)1 shall apply beginning with the entertainment expenses paid after this Act enters into force.
Article 5 (Applicability concerning income deduction of amount of paid interest on long-term mortgage loan)
The amended provisions of Articles 52(5) shall apply beginning with the long-term mortgage loans borrowed after this Act enters into force.
Article 6 (Applicability concerning return on interim prepayment)
The amended provisions of Articles 65(5) shall apply beginning with the returns on interim prepayment filed after this Act enters into force.
Article 7 (Applicability concerning report on place of business)
The amended provisions of Articles 78(2)3 shall apply beginning with the reports on place of business filed after this Act enters into force.
Article 8 (Applicability concerning penalty tax)
(1) The amended provisions of Article 81(1) shall apply beginning with the simplified statements on payment of earned income which are to be submitted or are submitted pursuant to the amended provisions of Article 164-3 after this Act enters into force.
(2) The amended provisions of Article 81(3)5 and 6 shall apply beginning with the goods or services provided after this Act enters into force.
(3) The amended provisions of the proviso to Article 81(9) shall apply beginning with the reports, determinations or rectifications made after this Act enters into force.
(4) The amended provisions of Article 81(11)1 shall apply beginning with cases where a business entity meets the requirements under Article 162-3(1) after this Act enters into force.
(5) The amended provisions of Article 81(11)2 and 3 shall apply beginning with the violations of obligation to issue a cash receipt after this Act enters into force.
(6) The amended provisions of Article 81(15) shall apply beginning with the business entities who start to conduct house rental business after January 1, 2020. In such cases, where a business entity starts before January 1, 2020, the amended provisions of Article 81(15) shall apply as if January 1, 2020 were the starting date of business of such business entities.
Article 9 (Applicability concerning cases of being paid liquidation money due to decrease of area on official cadastral records)
The amended provisions of Article 89(1)5 shall apply beginning with the liquidation money paid after March 17, 2012.
Article 10 (Applicability concerning extension of application scope of progressive tax rates in transferring stocks, which belong to other assets)
The amended provisions of Article 94(1)4c shall apply beginning with the stocks transferred from an oligopolistic stockholder to another oligopolistic stockholder after this Act enters into force.
Article 11 (Applicability concerning deduction from acquisition value of liquidation money collected due to increase of area on official cadastral records)
The amended provisions of Article 97(1)1 shall apply beginning with the assets transferred after this Act enters into force.
Article 12 (Applicability concerning exclusion from application of Heavy of imposition capital gains tax When transferring Status of Being Selected as Prospective Occupant of house in Area subject to adjustment)
The amended provisions of Article 104(1)4 shall apply beginning with the transfer of the status after August 28, 2018.
Article 13 (Applicability concerning special cases of capital gains tax on domestic stocks, etc. at time resident departs from Republic of Korea)
(1) The amended provisions of Articles 118-9(1), 118-11, and 118-15(1), (2) and (4) shall apply beginning with the residents departing from the Republic of Korea after this Act enters into force.
(2) The amended provisions of Articles 118-15(5) shall apply beginning with the domestic stocks, etc. of persons moving abroad transferred after this Act enters into force.
Article 14 (Applicability concerning withholding tax rates)
(1) The amended provisions of Articles 129(1)1b shall apply beginning with the income paid from the Republic of Korea after January 1, 2020.
(2) The amended provisions of Articles 129(1)3 and (2)2 shall apply beginning with the residents departing from the Republic of Korea after this Act enters into force.
Article 15 (Applicability concerning collection of income tax by taxpayer’s association from its members)
The amended provisions of Articles 150(2) and (3) shall apply beginning with the income tax collected by taxpayer’s association from its Members after this Act enters into force.
Article 16 (Applicability concerning special cases concerning withholding of tax on income accruing from non-real name assets)
The amended provisions of Articles 155-7 shall apply beginning with the income paid after this Act enters into force.
Article 17 (Applicability concerning duty to submit documents concerning overseas corporation)
(1) The amended provisions of Article 165-2(1) and (4) shall apply beginning with the materials submitted for the taxable period starting immediately after January 1, 2019.
(2) The amended provisions of Article 165-4 shall apply beginning with the non-performance of duty to submit materials for the taxable period starting immediately after January 1, 2019 where a resident acquires overseas real estate, etc. or the stocks or equity interests of a corporation which has attracted overseas direct investment.
(3) The amended provisions of Article 176(1) and (3) shall apply beginning with the non-performance of duty to submit materials for the taxable period commencing immediately after January 1, 2019.
(4) The amended provisions of Article 176(2) shall apply beginning with the non-performance of duty to submit materials for the taxable period commencing immediately after January 1, 2019.
Article 18 (Applicability concerning submission of materials concerning payment of health insurance money for actual loss)
The amended provisions of Article 174-3 shall apply beginning with the health insurance money for actual loss paid after this Act enters into force.
Article 19 (Special cases concerning non-performance of duty to submit materials concerning overseas real estate, etc.)
Notwithstanding the amended provisions of Article 165-2(1) (limited to the parts of such provisions which impose a duty to submit materials on the residents whose disposal value of each item of overseas real estate, etc. is at least 200 million won), an administrative fine under Article 165-3(2) (referring to the Act before amended by Act No. 16104) shall not imposed on a resident who disposes of overseas real estate, etc, for the period from January 1, 2019 to December 31, 2019. <Amended on Dec. 31, 2019>
Article 20 (Special cases concerning registration of business entity by house rental business entity)
A person (excluding person who is registered as a business entity pursuant to the former Article 168) who has started to conduct house rental business before this Act enters into force, but whose total amount of income prescribed by Presidential Decree for the relevant taxable period is not more than 20 million won, shall be registered as a business entity pursuant to the amended provisions of Article 168(1) by December 31, 2019.
Article 21 (Transitional measure concerning penalty tax on failure of cash receipt merchant to submit report)
Notwithstanding the amended provisions of Article 81(11)1, the former provisions shall apply to a business entity who became to fall under the requirement under Article 162-3(1) before this Act enters into force.
Article 22 (Transitional measure concerning administrative fine for non-performance of duty to submit documents concerning overseas real estate, etc.)
Notwithstanding the amended provisions of Articles 165-2(1) and 176(2), the former Articles 165-2(1) and 165-3(2) shall apply to the overseas real estate, etc. acquired for any taxable period (hereinafter referred to as “previous taxable period” in this Article) preceding to the taxable period commenced after January 1, 2019. In such cases, the materials to be submitted pursuant to the former Article 165-2(1) shall be limited to the materials related to the previous taxable period.
ADDENDA <Act No. 16568, Aug. 27, 2019>
Article 1 (Enforcement date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 14 Omitted.
Article 15 Omitted.
Article 16 Omitted.
ADDENDA <Act No. 16761, Dec. 10, 2019>
Article 1 (Enforcement date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 20 Omitted.
Article 21 Omitted.
Article 22 Omitted.
ADDENDA <Act No. 16834, Dec. 31, 2019>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2020; provided, the amended provisions of Article 94(1)4c and Article 108 shall enter into force on July 1, 2020.
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) The amended provisions concerning capital gains tax in this Act shall begin to apply to assets transferred after this Act enters into force.
Article 3 (Applicability to maximum limit of retirement income for executive)
The amended provisions of Article 22(3) shall begin to apply to income received from retirement after this Act enters into force.
Article 4 (Applicability to non-inclusion of entertainment expenses in necessary expenses)
The amended provisions of Article 35(3) shall begin to apply to expenses incurred after this Act enters into force.
Article 5 (Applicability to tax credit for pension account)
The amended provisions of Article 59-3(3) through (5) shall begin to apply to payments to pension accounts made after this Act enters into force.
Article 6 (Applicability to penalty tax for faulty inssuance, preparation, or retention of donation receipt)
The amended provisions of Article 81-7(1) shall begin to apply to donation receipts issued during the taxable period in which the effective date of this Act falls, after this Act enters into force.
Article 7 (Applicability to penalty tax for faulty submission of invoice)
(1) The amended provisions, with the exception of the subparagraphs, of Article 81-10(1) shall begin to apply to invoices, etc. for goods or services supplied after January 1, 2021, and the invoices, etc. issued without supplying goods or services or the invoices, etc. obtained without receiving goods or services, in the case of persons other than those subject to double-entry bookkeeping under Article 160(3).
(2) The amended provisions of Article 81-10(1)5 and 6 shall also apply when the entity supplies goods or services in the taxable period immediately preceding the taxable period in which the effective date of this Act falls and is required to transmit a detailed statement of electronic invoice pursuant to Article 163(8).
(3) The amended provisions of Article 81-10(2) and Article 81-10(4)2 shall begin to apply to portions for which a person subject to the amended provisions of paragraph (2) of the same Article issues an invoice without supplying goods or services, or obtains an invoice without receiving goods or services after January 1, 2021.
Article 8 (Applicability to exemption from double taxation of cpital gains tax for land transferred before date of announcement of designated area)
The amended provisions of Article 104(4) shall begin to apply to land for which a purchase and sale contract is concluded and a down payment is paid to transfer land after this Act enters into force.
Article 9 (Applicability to submission of real estate transfer notification certificate by Korean national residing abroad and foreigner)
The amended provisions of Article 108 shall begin to apply to real estate for which registration for the the transfer of ownership is filed with the head of the registry office to transfer the real estate after the effective date specified in the proviso of Article 1 of the Addenda.
Article 10 (Applicability to domestic source income of nonresident)
The amended provisions of subparagraph 10 of Article 119 and subparagraph 12k and l of the same Article shall begin to apply to income paid after this Act enters into force.
Article 11 (Applicability to special cases concerning withholding taxes from domestic source income of nonresident)
The amended provisions of Article 156(1)8 shall begin to apply to income paid after this Act enters into force.
Article 12 (Applicability to application for rectification by nonresident subject to withholding)
The amended provisions of Articles 156-2(4), 156-4(2), and 156-6(4) shall begin to apply to income paid after this Act enters into force.
Article 13 (Applicability to submission of statement of payment and simplified statement of payment of earned income)
(1) The amended provisions of the proviso, with the exception of the subparagraphs, of Article 164(1) shall also apply when a person pays the wage and salary income of a daily employed worker before this Act enters into force, or is required to submit a statement of payment after this Act enters into force if it suspends, closes, or dissolves his or her business.
(2) The amended provisions, with the exception of the subparagraphs, of Article 164-3(1) shall also apply when a person pays income described in any of the subparagraphs of the previous same paragraph before this Act enters into force, or is required to submit a statement of simplified statement of payment of earned income after this Act enters into force if it suspends, closes, or dissolves his or her business.
Article 14 (Transitional measures concerning maximum amount of retirement income)
Notwithstanding the amended provisions of Article 22(3), the former provisions shall apply to any retirement income paid after the effective date of this Act to a person who has retired before this Act enters into force.
Article 15 (Transitional measures concerning exclusion from total income)
Notwithstanding the amended provisions of Article 26(2), the previous provisions shall apply to losses incurred in taxable periods that began before January 1, 2010.
Article 16 (Transitional measures concerning penalty tax for faulty inssuance, preparation, or retention of donation receipt)
Notwithstanding the amended provisions of Article 81-7(1), the previous provisions shall apply to donation receipts issued before this Act enters into force.
Article 17 (Transitional measures concerning penalty tax for faulty submission of invoice)
Notwithstanding the amended provisions of Article 81-10(1)5 and 6, the previous provisions shall apply when a person supplies goods or services before the entry into force of this Act and is required to transmit the electronic invoice to the Commissioner of the National Tax Service pursuant to Article 163(8) (except for the case of Article 7(2) of the Addenda).
Article 18 (Transitional measures concerning scope of capital gains on overseas stocks, etc.)
Notwithstanding the amended provisions of Articles 94(1)3, 104(1) and (6), 105(1), 118(2)1, 118(2)1, subparagraph 3 of 118-2, 118-5, 118-7, and 118-8, the previous provisions shall apply to the transfer of stocks, etc. among overseas assets before this Act enters into force.
Article 19 (Transitional measures concerning transferring right to transfer with real estate)
Notwithstanding the amended provisions of Article 94(1)4e, the previous provisions shall apply when evidentiary documents confirm the fact that a purchase and sale contract was concluded and a down payment was paid before this Act enters into force.
Article 20 (Transitional measures concerning penalty tax on application of appraised value or converted acquisition value)
Notwithstanding the amended provisions of Article 114-2(1), the previous provisions shall apply when evidentiary documents confirm the fact that a purchase and sale contract was concluded and a down payment was paid before this Act enters into force.
Article 21 (Transitional measures concerning domestic source income of nonresident)
Notwithstanding the amended provisions of subparagraph 10 of Article 119 and subparagraph 12k and l of the same Article, the previous provisions shall apply to any income paid before this Act enters into force.
Article 22 (Transitional measures concerning withholding tax rate)
Notwithstanding the amended provisions of Article 129(1)5-3, the previous provisions shall apply to any pension paid before this Act enters into force.
Article 23 (Transitional measures concerning time limit to register as cash receipt merchant)
Notwithstanding the amended provisions of Article 162-3(1), the previous provisions shall apply to a business entity fulfililng the requirements for registering as a cash receipt merchant before this Act enters into force.
ADDENDUM <Act No. 17339, Jun. 9, 2020>
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Act No. 17477, Aug. 18, 2020>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2021; provided, the amended provisions of Article 104(1)1 through 4 and the amended provisions, with the exception of the subparagraphs, of Article 104(7) shall enter into force on Jun. 1, 2021.
Article 2 (General applicability)
The amended provisions of this Act regarding capital gains shall begin to apply to those transferred after this Act enters into force.
Article 3 (Applicability to capital gains tax rate)
The amended provisions of Article 104(1)1 through 4 and the amended provisions, with the exception of the subparagraphs, of Article 104(7) shall begin to apply to those transferred after June 1, 2021.
Article 4 (Applicability to exclusion of non-taxation of capital gains tax on one house for one household for person owning house and right to acquire house as association member or right to buy house, or capital gains tax rate for house in area subject to adjustment)
The amended provisions of the main clause of Article 89(2) and Article 104(7)2 and 4 shall begin to apply to rights to buy a house acquired through a housing supply contract, sale, donation, etc. after January 1, 2021.
ADDENDA <Act No. 17757, Dec. 29, 2020>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2021; provided, the amended provisions specified in the following subparagraphs shall enter into force on their respective dates: <Amended on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
1. Article 4(1)1 and 2-2, Article 16(1)2-2, 12 and 13, Article 17(1)5, 5-2, 9 and 10, the provisions, with the exception of the subparagraphs, of Article 21(1), Article 46(1) (limited to the part pertaining to Article 16(1)2-2), Articles 87-2 through 87-27, subparagraphs 2 through 4 of Article 88, Article 92(1), subparagraph 3 of Article 93, Article 94(1)3 and 5, Article 94(2), Article 99(1)3 through 5 and 7, Article 102(1)2 and 3, Article 103(1)2 and 3, Article 104(1)11 through 13, Article 104(2) and (6), the provisions, with the exception of the subparagraphs, of Article 105(1) and subparagraph 2 of the same paragraph, Article 107(2)3, Article 114(9), Article 115, Article 118, Article 118-8, Articles 118-9 through 118-18, subparagraph 1 and 2a, c and d of Article 119, Articles 126-3 through 126-12, the provisions, with the exception of the subparagraphs, of Article 127(1) and subparagraph 9 of the same paragraph, Article 127(7) and (8), Article 128(1) and the provisions, with the exception of the subparagraphs, of paragraph (2) of the same Article, Article 129(1)9, Article 148-2, Article 148-3, subparagraph 2 of Article 155-2, Article 164(1), and Article 174-2: January 1, 2025;
2. Article 14(3)8c (limited to the part pertaining to Article 21(1)27), Article 21(1)27, Article 37(1)3, (5) and (6), Article 64-3(2), Article 70(2), subparagraphs 3 and 4 of Article 84, subparagraph 12k and l of Article 119, Article 126(1)3, Article 127(1)6c, Article 156(1)8, Article 156(12), (16) and (17), and Article 164-4: January, 1, 2027;
3. The provisions, with the exception of the subparagraphs, of Article 64(1): June 1, 2021;
4. Articles 81-7(1) and 160-3: July, 1, 2021.
Article 2 (General applicability)
(1) This Act shall begin to apply to income generated after this Act enters into force.
(2) Notwithstanding paragraph (1), the amended provisions of this Act regarding capital gains shall begin to apply to those transferred after this Act enters into force.
Article 3 (Applicability to trust income)
The amended provisions of Articles 2-3, 4(2)1, and 17(1)2-2 shall begin to apply to trust income for which a trust contract is concluded after this Act enters into force.
Article 4 (Applicability to financial investment income)
The amended provisions of Article 4(1)1 and 2-2, Article 16(1)2-2, 12 and 13, the proviso of Article 17(1)5, the provisions, with the exception of the subparagraphs, of Article 21(1), Articles 87-2 through 87-27, the provisions, with the exception of the subparagraphs, of Article 127(1), Article 127(1)9, Article 127(7) and (8), Article 128(1) and the provisions, with the exception of the subparagraphs, of the same Article, Article 129(1)9, Article 148-2, Article 148-3, and subparagraph 2 of Article 155-2 shall begin to apply to income generated after January 1, 2025. <Amended on Dec. 31, 2022>
Article 5 (Applicability to virtual asset income)
(1) The amended provisions of Article 14(3)8c (limited to the part pertaining to Article 21(1)27), Article 21(1)27, Article 37(1)3, (5) and (6), Article 64-3(2), Article 70(2), subparagraph 3 of Article 84, and Article 164 -4 shall begin to apply to virtual assets transferred or lent after January 1, 2027. <Amended on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
(2) The amended provisions of Article 127(1)6c shall begin to apply to virtual asset income generated after January 1, 2027. <Amended on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
Article 6 (Applicability to income generated from transfer of paintings, calligraphic works, and antiques)
The amended provisions of Articles 21(2) and 155-5 shall begin to apply to those transferred after this Act enters into force.
Article 7 (Applicability to losses carried forward)
The amended provisions of the main clause, with the exception of the subparagraphs, of Article 45(3) shall begin to apply to losses generated during the taxable period commencing after January 1, 2023.
Article 8 (Applicability to special cases for calculating income from bonds)
The amended provisions of Article 46(1) (limited to the part pertaining to Article 16(1)2-2) shall begin to apply to interest, etc. received from bonds, etc. or income from bonds, etc. sold, after January 1, 2025. <Amended on Dec. 31, 2022>
Article 9 (Applicability to income deduction for loan for leasing house)
The amended provisions of Article 52(4) shall begin to apply to principal or interest repaid after this Act enters into force.
Article 10 (Applicability to income deduction for interest paid for long-term mortgage loan)
(1) The amended provisions of the main clause, with the exception of the subparagraphs, of Article 52(5) shall begin to apply to interest paid on any long-term mortgage loan after this Act enters into force.
(2) The amended provisions of the main clause of Article 52(5)4 shall begin to apply to loans borrowed after this Act enters into force.
Article 11 (Applicability to deduction of taxes payable to foreign countries)
If the amount of foreign income tax paid or payable to a foreign government exceeds the deductible amount and remains undeducted until immediately before the taxable period beginning after the enforcement of this Act, the amended provisions of Article 57(2) shall apply when calculating the tax base and tax amount for a taxable period beginning after this Act enters into force.
Article 12 (Applicability to special cases for calculating tax amount for real estate broker)
The amended provisions, with the exception of the subparagraphs, of Article 64(1) shall begin to apply to assets transferred after June 1, 2021.
Article 13 (Applicability to special cases for calculating tax amount on house rental income)
(1) The amended provisions of the proviso, with the exception of the subparagraphs, of Article 64-2(3) shall begin to apply to houses for which registration is cancelled after August 18, 2020.
(2) The amended provisions of Article 64-2(3)1 and 2 shall begin to apply to private rental houses for which registration is filed under Article 5 of the Special Act on Private Rental Housing after August 18, 2020.
Article 14 (Applicability to obligations to prepare and retain details of issuance of receipts for donation)
The amended provisions of Article 81-7(1) and 160-3 shall begin to apply to electronic donation receipts issued after July, 1, 2021.
Article 15 (Applicability to penalty tax for non-submission or faulty submission of simplified payment statement for earned income)
The amended provisions of Article 81-11 shall begin to apply to income declared, determined, or corrected after this Act enters into force.
Article 16 (Applicability to capital gains from stocks)
The amended provisions of subparagraph 2 of Article 88 and Article 92(1) shall begin to apply to the portions to be transferred after January 1, 2025. <Amended on Dec. 31, 2022>
Article 17 (Applicability to capital gains from trust beneficiary interests)
The amended provisions of Articles 94(1)6, 99(1)8, 102(1)4, 103(1)4, 104(1)14, 105(1)1, and 107(2)4 shall begin to apply to trust beneficiary interests transferred after this Act enters into force.
Article 18 (Applicability to submission of statement of changes in the list of beneficiaries)
The amended provisions of Article 115-2 shall begin to apply when a trust is established for a trust beneficiary interest or changes occur in the beneficiaries after this Act enters into force.
Article 19 (Applicability to expatriation tax)
19. The amended provisions of Articles 126-3 through 126-12 shall begin to apply to cases where a resident departs from the Republic of Korea after January 1, 2025. <Amended on Dec. 31, 2022>
Article 20 (Applicability to nonresident’s domestic source income)
(1) The amended provisions of subparagraph 1 of Article 119 and subparagraph 2a, c and d of the same Article shall begin to apply to income generated after January 1, 2025. <Amended on Dec. 31, 2022>
(2) The amended provisions of subparagraph 12l of Article 119 and Article 126(1)3 shall begin to apply to virtual assets transferred, lent, or withdrawn after January 1, 2027. <Amended on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
Article 21 (Applicability to special cases concerning application of tax rates on interest, dividends, and royalties)
The amended provisions of the latter part, with the exception of the items, of subparagraph 10 of Article 119 and the amended provisions of Article 156-8 (limited to the part pertaining to income generated from leasing industrial, commercial, or scientific machinery, equipment, apparatuses, etc. that is classified as royalty income in a tax treaty, and the use fee is included in the royalty income) shall begin to apply to income paid after January 1, 2013.
Article 22 (Applicability to special cases concerning withholding taxes from domestic source income of nonresident)
The amended provisions of Article 156(1)8b and Article 156(12), (16) and (17) shall begin to apply to virtual asset income generated after January 1, 2027. <Amended on Dec. 8, 2021; Dec. 31, 2022; Dec. 31, 2024>
Article 23 (Applicability to statement of payment)
The amended provisions of Article 164(1) shall begin to apply to income paid after January 1, 2025. <Amended on Dec. 31, 2022>
Article 24 (Applicability to special cases concerning obligation to submit statement of payment on nonresident’s domestic source income)
The amended provisions of Article 164-2(1) shall begin to apply to transfer values paid after this Act enters into force.
Article 25 (Applicability to submission of supporting documents for payment of medical indemnity insurance proceeds)
The amended provisions of the main clause of Article 165(1) shall also apply when supporting documents for the payment of medical indemnity insurance proceeds for a taxable period that comes before this Act enters into force are submitted after this Act enters into force.
Article 26 (Applicability to retention and submission of transaction records of financial investment instruments)
The amended provisions of Article 174-2 shall begin to apply to transactions or activities that occur after January 1, 2025. <Amended on Dec. 31, 2022>
Article 27 (Transitional measures concerning trust income)
Notwithstanding the amended provisions of Article 2-2(6), the previous provisions shall apply to income from trusts for which a trust contract has been concluded.
Article 28 (Transitional measures concerning Income from transfer of paintings, calligraphic works, and antiques)
Notwithstanding the amended provisions of Article 14(3)8c (limited to the part pertaining to Article 21(2)), 21(1)25, and 155-5, the previous provisions shall apply to those transferred before this Act enters into force.
Article 29 (Transitional measures concerning financial investment income)
Notwithstanding the amended provisions of the proviso of Article 17(1)5, Article 17(1)5-2, 9 and 10, the previous provisions shall apply to income generated before January 1, 2025. <Amended on Dec. 31, 2022>
Article 30 (Transitional measures concerning losses carried forward)
Notwithstanding the amended provisions, with the exception of the subparagraphs, of Article 45(3), the previous provisions shall apply to carried-forward losses generated during a taxable period that begins before January 1, 2020.
Article 31 (Transitional measures concerning special cases for calculating amount of income from bonds)
Notwithstanding the amended provisions of Article 46(1) (limited to the part pertaining to Article 16(1)2-2), the previous provisions shall apply to interest, etc. received from bonds, etc. or income from the sale of bonds, etc. before January 1, 2025. <Amended on Dec. 31, 2022>
Article 32 (Transitional measures concerning Interest on long-term mortgage loan)
Notwithstanding the amended provisions of the main clause of Article 52(5)4, the previous provisions shall apply to loans borrowed before this Act enters into force.
Article 33 (Transitional measures concerning global income tax rate)
Notwithstanding the amended provisions Article 55(1), the previous provisions shall apply to income generated before this Act enters into force.
Article 34 (Transitional measures concerning foreign tax credit)
Notwithstanding the amended provisions of Article 57 (limited to the part pertaining to the deletion of the inclusion method in necessary expenses), the previous provisions shall apply to taxable periods that began before this Act enters into force.
Article 35 (Transitional measures concerning terminology enhancement for penalty tax)
Notwithstanding the amended provisions of Articles 58(1)1, 85(4), and 117, the previous provisions shall apply to tax amounts for which tax liability is established before January 1, 2020.
Article 36 (Transitional measures concerning special cases for calculating tax amount on house rental income)
Notwithstanding the amended provisions of Article 64-2(3)1 and 2, the previous provisions shall apply to private rental houses for which registration is filed under Article 5 of the Special Act on Private Rental Housing before August 18, 2020.
Article 37 (Transitional measures concerning capital gains from stock and derivatives)
Notwithstanding the amended provisions of subparagraphs 2 through 4 of Article 88, subparagraph 3 of Article 93, Article 94(1)3 and 5, Article 94(2), Article 99(1)3 through 5 and 7, Article 102(1)2 and 3, Article 103(1)2 and 3, Article 104(1)11 through 13, Article 104(2) and (6), the provisions, with the exception of the subparagraphs, of Article 105(1), Article 105(1)2, Article 107(2)3, Article 114(9), Article 115, Article 118, and Article 118-8, the previous provisions shall apply to those transferred before January 1, 2025. <Amended on Dec. 31, 2022>
Article 38 (Transitional measures concerning capital gains tax rate)
Notwithstanding the amended provisions of Article 104(1)8 and 9, the previous provisions shall apply to those transferred before this Act enters into force.
Article 39 (Transitional measures concerning expatriation tax)
Notwithstanding the amended provisions of Articles 118-9 through 118-18, the previous provisions shall apply when a resident departs from the Republic of Korea before January 1, 2025. <Amended on Dec. 31, 2022>
Article 40 (Transitional measures concerning submission and retention of transaction and holding records of financial investment instruments)
Notwithstanding the amended provisions of Article 174-2, the previous provisions shall apply to transactions or activities that occur before January 1, 2025. <Amended on Dec. 31, 2022>
Article 41 (Transitional measures concerning administrative fine imposed for non-performance of duty to submit materials concerning overseas corporation)
Notwithstanding the amended provisions of Article 176, the previous provisions shall apply when acts conducted in violation of the obligations before this Act enters into force are governed by the administrative fine provisions.
Article 42 Omitted.
ADDENDA <Act No. 17758, Dec. 29, 2020>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2021.
Articles 2 through 23 Omitted.
Article 24 Omitted.
Articles 25 and 26 Omitted.
ADDENDA <Act No. 17925, Mar. 16, 2021>
Article 1 (Enforcement date)
This Act shall enter into force on July 1, 2021; provided, the amended provisions of the proviso, with the exception of the subparagraphs, of Article 164(1) of the Income Tax Act, as partially amended by Act No. 17757, shall enter into force on January, 1, 2025. <Amended on Dec. 31, 2022>
Article 2 (Applicability to penalty tax for non-submission or faulty submission of payment statement)
The amended provisions of Article 81-11(1) through (3) shall begin to apply when a payment statement or a simplified payment statement is required to be submitted or has actually been submitted for income paid after this Act enters into force, in accordance with the proviso, with the exception of the subparagraphs, of Article 164(1) or Article 164-3(1)2.
Article 3 (Applicability to submission of payment statement or simplified payment statement)
The amended provisions of the proviso, with the exception of the subparagraphs, of Article 164(1) and Article 164-3(1)2 shall begin to apply to income paid after this Act enters into force.
Article 4 (Transitional measures concerning penalty tax for non-submission or faulty submission of payment statement)
Notwithstanding the amended provisions of Article 81-11(1), the previous provisions shall apply to penalty taxes imposed or to be imposed under the previous provisions of Article 81-11(1) before this Act enters into force.
Article 5 (Transitional measures concerning submission of payment statement or simplified payment statement)
Notwithstanding the amended provisions of the proviso, with the exception of the subparagraphs, of Article 164(1) and Article 164-3(1)2, the previous provisions shall apply to income paid before this Act enters into force.
ADDENDA <Act No. 18370, Aug. 10, 2021>
Article 1 (Enforcement date)
This Act shall enter into force three months after its promulgation; provided, the amended provisions of Articles 173(2) and subparagraph 3 of Article 177 shall enter into force on January 1, 2022.
Article 2 (Applicability to submission of taxation data for service providers)
(1) The amended provisions of Article 173(1) shall enter into force where an amount of earnings or income is generated after this Act enters into force.
(2) The amended provisions of Article 173(2) shall begin to appy where a person is required to submit, or has actually submitted, taxation data for a service that generates an amount of earnings or income after this Act enters into force.
Article 3 (Applicability to administrative fine for violation of ordered matters)
The amended provisions of subparagraph 3 of Article 177 shall begin to appy where an order issued under Article 173(2) is violated after this Act enters into force.
Article 4 (Transitional measures concerning submission of taxation data for service providers)
Notwithstanding the amended provisions of Article 173(1), the previous provisions shall apply to services generating an amount of earnings or income before this Act enters into force.
ADDENDA <Act No. 18425, Aug. 17, 2021>
Article 1 (Enforcement date)
This Act shall enter into force six months after its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 18521, Nov. 23, 2021>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 18578, Dec. 8, 2021>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2022; provided, the amended provisions specified in the following subparagraphs shall enter into force on their respective dates: <Amended on Dec. 31, 2022>
1. Article 129(4) and (5), Article 87-4(2) through (4) of the Income tax Act, as partially amended by Act No. 17757, Article 87-23(3), Article 87-27(1), subparagraph 2 of Article 88, Article 126-11(3) and (4), subparagraph 2 of Article 155-2, and Article 174-2: January 1, 2025;
2. Article 56-3(1): July 1, 2022;
3. Article 89(1)3 and the proviso, with the exception of the items, of subparagraph 4 of the same paragraph: The promulgation date.
Article 2 (Applicability to tax credit for transmission of issued electronic invoices)
The amended provisions of Article 56-3(1) shall begin to apply when an electronic invoice is issued for goods or services provided after July 1, 2022.
Article 3 (Applicability to special tax credit for medical expenses)
The amended provisions of Article 59-4(2) shall begin to apply when medical expenses are paid after this Act enters into force.
Article 4 (Applicability to special tax credit for donations)
The amended provisions of Article 59-4(8) shall begin to apply when declaring a tax base, determining income tax, or making year-end tax settlements after this Act enters into force.
Article 5 (Applicability to penalty tax for faulty submission of statement of expenses related to business-use passenger vehicle)
The amended provisions of Article 81-14 shall begin to apply when the expenses, etc. related to business-use passenger vehicles are included in necessary expenses in the taxable period in which the enforcement date of this Act falls.
Article 6 (Applicability to financial investment income)
(1) The amended provisions of Article 87-4(2)1b of the Income tax Act, as partially amended by Act No. 17757, Article 87-4(3), Article 87-23(3), Article 87-27(1), and subparagraph 2 of Article 155-2 shall begin to apply to income generated after January 1, 2025. <Amended on Dec. 31, 2022>
3. Article 35(1) through (5) (excluding the amended provisions of "the purchaser-issued invoice" under paragraph (2)3 of that Article), Article 81-11(1)1b (excluding cases where a simplified statement of payment on income under Article 164-3(1)1 is not submitted), Article 81-11(3)2 and (4) (excluding the provisions on income under Article 164-3(1)1), the amended provisions on income under Article 164-3(1)3 among the amended provisions of paragraph (5) of that Article, the amended provisions on "income under subparagraph 3" among the amended provisions of Article 164(7), and the amended provisions of Article 164-3(1) (excluding the amended provisions of " income under subparagraph 1" shall be excluded): January 1, 2024;
(3) The amended provisions of Article 174-2(1) of the Income tax Act, as partially amended by Act No. 17757 (limited to the part pertaining to data on transaction records, etc.), shall begin to apply to transactions or activities that occur after January 1, 2025. <Amended on Dec. 31, 2022>
(4) The amended provisions of Article 174-2(1) of the Income tax Act, as partially amended by Act No. 17757 (limited to the part pertaining to data on holding records, etc.), shall begin to apply when the submission deadline for such data arrives after January 1, 2025. <Amended on Dec. 31, 2022>
(5) Notwithstanding the amended provisions of Article 174-2 of the Income tax Act, as partially amended by Act No. 17757, the previous provisions (referring to those before the amendment by Act No. 17757) shall apply when details of transactions or activities are submiited for those occuring before January 1, 2025. <Amended on Dec. 31, 2022>
Article 7 (Applicability to non-taxable capital gains)
(1) The amended provisions of the latter part of subparagraph 9 of Article 88 and the proviso of Article 89(2) shall begin to apply to rights to acquire a house as an association member acquired after this Act enters into force.
(2) Notwithstanding the amended provisions of Article 89(1)4a and b, the previous provisions shall apply to the requirements for non-taxation of capital gains on rights to acquire a house as an association member acquired before this Act enters into force, as described in the previous provisions of subparagraph 9 of Article 88.
(3) The amended provisions of Article 89(1)4a and b in relation to the requirements for non-taxation of capital gains on rights to acquire a house as an association member acquired after this Act enters into force, shall apply to rights to buy a house acquired after January 1, 2022.
(4) The amended provisions of the proviso, with the exception of the items, of Article 89(1)4 shall begin to apply to rights to acquire a house as an association member transferred after the enforcement date of the same amended provisions.
(5) The amended provisions of the proviso, with the exception of the items, of Article 89(1)4 shall begin to apply to the right to acquire a house as a housing association member transferred after the enforcement date of that amended provisions.
Article 8 (Applicability to final return on tax base of global income by nonresident)
The amended provisions of Article 124(2) shall begin to apply when a nonresident files a final return on the tax base of global income after this Act enters into force.
Article 9 (Applicability to withholding tax rates)
The amended provisions of Article 129(4) and (5) shall begin to apply when a withholding tax amount is calculated for income generated and paid after January 1, 2025. <Amended on Dec. 31, 2022>
Article 10 (Applicability to taxpayers association credit limit)
The amended provisions of Article 150(4) shall begin to apply when an amount deducted from income tax is calculated in respect of income generated after this Act enters into force.
Article 11 (Transitional measures concerning penalty tax for non-submission of certificate of confirmation of compliant filing)
Notwithstanding the amended provisions of Article 81-2(1) and (3), the previous provisions shall apply to the penalty tax payment for non-submission of a certificate of confirmation of compliant filing for a taxable period that began before this Act enters into force.
Article 12 (Transitional measures concerning penalty tax for faulty issuance of cash receipt)
Notwithstanding the amended provisions of Article 81-9(2)3, the previous provisions shall apply when an entity voluntarily issues a cash receipt or declares the relevant amount to a tax office before this Act enters into force.
Article 13 (Transitional measures concerning changes in requirements for foreign investment vehicle considered beneficial owner)
Notwithstanding the amended provisions of Article 119-2(1)1 and 2, the previous provisions shall apply to determining the beneficial owner of domestic source income received before this Act enters into force.
ADDENDA <Act No. 18975, Aug. 12, 2022>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2023.
Article 2 (Applicability to non-taxable income)
The amended provisions of subparagraph 3r of Article 12 shall begin to apply to meals or other food, or meal allowances received after this Act enters into force.
ADDENDA <Act No. 19196, Dec. 31, 2022>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2023: provided, the amended provisions of the following subparagraphs shall enter into force on the dates specified in the relevant subparagraphs: <Amended on Dec. 31, 2023; Dec. 23, 2025>
1. Article 17(1)5 of the Income tax Act, as partially amended by Act No. 17757, Article 37(5), subparagraph 3 of Article 87-2, Article 87-6(1)4, Article 87-12(4), Article 87-13(3), Article 87-14(1) and (3), Article 87-18(1)1c and d, Article 87-21(1)3, Article 87-21(2), Article 87-27(2), subparagraph 2c of Article 119, Article 128(1), and Article 148-2(2): January 1, 2025;
2. Subparagraph 2 of Article 15, Article 33(1)1, Article 57-2, Article 58(2), Article 87-27(1) of the Income tax Act, as partially amended by Act No. 17757, and Article 129(4) through (8) of the Income tax Act, as partially amended by Act No. 18578: January 1, 2025;
3. Article 35(1) through (5) (excluding the amended provisions of "the purchaser-issued invoice" under paragraph (2)3 of that Article), Article 81-11(1)1b (excluding cases where a simplified statement of payment on income under Article 164-3(1)1 is not submitted), Article 81-11(3)2 and (4) (excluding the provisions on income under Article 164-3(1)1), the amended provisions on income under Article 164-3(1)3 among the amended provisions of paragraph (5) of that Article, the amended provisions on "income under subparagraph 3" among the amended provisions of Article 164(7), and the amended provisions of Article 164-3(1) (excluding the amended provisions of " income under subparagraph 1" shall be excluded): January 1, 2024;
4. The amended part regarding "purchaser-issued invoices" in Article 35(2)3, Article 160-2(3), and Article 163-3: July 1, 2023.
5. The amended provisions of "income under subparagraph 1" in Articles 81-11(1)1b (limited to cases where a simplified payment statement on income under Article 164-3(1)1 is not submitted), paragraph (3)1 and (4) of that Article (limited to the provisions on income under Article 164-3(1)1), and 164-3(1): January 1, 2026;
Article 2 (General applicability)
This Act shall begin to apply to income generated after the respective applicable dates specified in Article 1 of these Addenda.
Article 3 (Applicability to special tax credit)
The amended provisions of the proviso of Article 52(4) shall begin to apply when declaring a tax base of global income, determining income tax, or making year-end tax settlements for wage and salary income in the taxable period of 2022 after this Act enters into force.
Article 4 (Applicability to special cases concerning foreign tax credit on income received from indirect investment company, etc.)
The amended provisions of Article 57-2 (including cases where the amended provisions of Article 87-27(1) of the Income tax Act, as partially amended by Act No. 17757, apply mutatis mutandis), and the amended provisions of Article 129(4) through (8) of the Income tax Act, as partially amended by Act No. 18578, shall begin to apply when declaring a tax base or withholding for income received after January 1, 2025.
Article 5 (Applicability to special tax credit for education expenses)
The amended provisions of Article 59-4(3)1a shall begin to apply to education expenses paid after this Act enters into force.
Article 6 (Applicability to penalty tax for non-submission or faulty submission of payment statement, etc.)
(1) The amended provisions of Articles 81-11(1)1b (excluding cases where a simplified payment statement on income under Article 164-3(1)1 is not submitted), Article 81-11(3)2 and (4) (excluding the provisions on income under Article 164-3(1)1), Article 164(5) (limited to the provisions on income under Article 164-3(1)3), Article 164(7) (limited to the provisions on income under Article 164-3(1)3) and Article 164-3(1) (excluding the amended provisions of "income under subparagraph 1") shall begin to apply to the cases where the payment statement, etc. on income paid after January 1, 2024 shall be submitted or is submitted. <Amended on Dec. 31, 2023>
(2) The amended provisions of Article 81-11(1)1b (limited to cases where a simplified payment statement on income under Article 164-3(1)1 is not submitted), paragraph (3)1 of that Article, paragraph (4) of that Article (limited to the part concerning income under Article 164-3(1)1), and Article 164-3(1) (limited to the amended part of “income under subparagraph 1”) shall begin to apply to cases where payment statements, etc. are required to be submitted or are submitted with respect to income paid after January 1, 2027. <Added on Dec. 31, 2023; Dec. 23, 2025>
(3) The amended provisions of Article 81-11(5) and Article 164(7) (limited to the part concerning income under Article 164-3(1)2) shall begin to apply to cases where payment statements, etc. are required to be submitted or are submitted with respect to income paid after January 1, 2023. <Amended on Dec. 31, 2023>
(4) Notwithstanding the amended provisions of Article 81-11(1)1b and Article 81-11(4), the previous provisions shall apply to a penalty tax imposed due to delayed submission of a simplified payment statement on income under Article 164-3(1)1 paid before January 1, 2027. <Amended on Dec. 31, 2023; Dec. 23, 2025>
(5) Notwithstanding the amended provisions, with the exception of the subparagraphs, of Article 164-3(1) and Article 164-3(1)1, the previous provisions shall apply to the time limits for the submission of a simplified payment statement for income described in Article 164-3(1)1 that was paid before January 1, 2027. <Amended on Dec. 31, 2023>
Article 7 (Applicability to taxation limit for lottery prize)
The amended provisions of subparagraph 2 of Article 84 shall begin to apply to payments of a lottery prize made after this Act enters into force.
Article 8 (Applicability to special cases concerning taxation on interest and capital gains of state bonds, etc. of nonresident)
The amended provisions of Article 119-3 shall begin to apply to interest payments or the transfer of State bonds, etc. made after this Act enters into force.
Article 9 (Applicability to nonresident’s application for non-taxation, etc. on domestic source income)
The amended provisions of Articles 156-2 and 156-6 shall begin to apply when a nonresident files an application for non-taxation, exemption, or a reduced tax rate after January 1, 2023.
Article 10 (Applicability to issuance of purchaser-issued invoice)
The amended provisions of Article 163-3 shall begin to apply when goods or services are provided after January 1, 2023.
Article 11 (Transitional measures concerning changes to non-taxation criteria for house rental income)
Notwithstanding the amended provisions of subparagraph 2b of Article 12, the previous provisions shall apply to non-taxation criteria for house rental income generated before this Act enters into force.
Article 12 (Transitional measures concerning changes to name of entertainment expenses)
Entertainment expenses incurred before January 1, 2024 shall be treated as business promotion expenses in accordance with the amended provisions of Article 35.
Article 13 (Transitional measures concerning retirement income deduction)
Notwithstanding the amended provisions of Article 48(1)1, the previous provisions shall apply to deductions based on the number of years of continuous service for retirement income of residents who retired before this Act enters into force.
Article 14 (Transitional measures concerning global income tax rate)
Notwithstanding the amended provisions of Article 55(1), the previous provisions shall apply to the tax rates used in calculating income tax (including where a tax rate for global income is applicable under Article 55(2), 64(1)2b, 104(1)1, 104(4), 104(5)1, 104(7), and 118-5) for a taxable period that began before this Act enters into force.
Article 15 (Transitional measures concerning tax credit for wage and salary income)
Notwithstanding the amended provisions of Article 59(2), the previous provisions shall apply to the limitation of tax credit for wage and salary income on the calculated amount of global income tax for a tax period that began before this Act enters into force.
Article 16 (Transitional measures concerning tax credit for children)
Notwithstanding the amended provisions of Article 59-2(1), the previous provisions shall apply to the age criteria for tax credit for children on the calculated amount of global income tax for a tax period that began before this Act enters into force.
Article 17 (Transitional measures concerning tax credit for pension accounts)
Notwithstanding the amended provisions of Article 59-3(1), the previous provisions shall apply to the criteria for tax credit for pension accounts on the calculated amount of global income tax for a tax period that began before this Act enters into force.
Article 18 (Transitional measures concerning calculation of necessary expenses for capital gains and calculation of capital gains by wrongful acts)
Notwithstanding the amended provisions of the former part of Article 97-2(1) and the main clause, with the exception of the subparagraphs, of Article 101(2) (including where the amended provisions of Article 87-27(2) of the Income tax Act, as partially amended by Act No. 17757, apply mutatis mutandis), the previous provisions shall apply to the calculation of necessary expenses and the calculation of capital gains obtained by wrongful acts, where an asset acquired as gift before the enforcement of this Act is transferred after this Act enters into force.
Article 19 (Transitional measures concerning capital gains tax rate)
Notwithstanding the amended provisions of Article 104(1)8 and 9, the previous provisions shall apply to the capital gains tax rates for an asset transferred before this Act enters into force.
Article 20 (Transitional measures concerning withholding tax rate)
Notwithstanding the amended provisions of Article 129(2)2, the previous provisions shall apply to the rates of withholding tax on interest and dividend income paid prior to the enactment of this Act, if the real name has not been verified.
Article 21 (Transitional measures concerning timining for issuance of withholding tax receipt on wage and salary income)
Notwithstanding the amended provisions of the proviso of Article 143(1), the previous provisions shall apply to the timing for the issuance of withholding tax receipts on wage and salary income paid before this Act enters into force.
Article 22 (Transitional measures concerning special cases for withholding tax from domestic source income of nonresident)
Notwithstanding the amended provisions of Article 156(2), the previous provisions shall apply when interest is paid or State bonds, etc. are transferred before this Act enters into force.
Article 23 Omitted.
ADDENDUM <Act No. 19563, Jul. 18, 2023>
Article 1 (Enforcement date)
This Act shall enter into force 1 year after its promulgation; provided, Article 2(6) of the Addenda shall enter into force on January 1, 2025.
Article 2 Omitted.
ADDENDA <Act No. 19590, Aug. 8, 2023>
Article 1 (Enforcement date)
This Act shall enter into force on May 17, 2024.
Articles 2 through 8 Omitted.
Article 9 Omitted.
Article 10 Omitted.
ADDENDA <Act No. 19933, Dec. 31, 2023>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2024; provided, the amended provisions specified in the following subparagraphs shall enter into force on their respective dates:
1. The amended provisions of Article 25(1)2: January 1, 2026;
2. The amended provisions of subparagraph 1 of Article 86: July 1, 2024;
3. The amended provisions of Article 95(5) and (6): January 1, 2025.
Article 2 (Applicability to non-taxable income)
(1) The amended provisions of subparagraph 2g of Article 12 shall begin to apply to incomes generated after this Act enters into force.
(2) The amended provisions of subparagraph 3e of Article 12, the proviso of item v1) of that subparagraph, the proviso of subparagraph 5d of that Article shall begin to apply to cases where income is paid after this Act enters into force.
(3) Notwithstanding the amended provisions of subparagraph 3s of Article 12 and subparagraph 5h4) of that Article, the previous provisions shall apply to the limit on non-taxable income related to childbirth and childcare that was granted before this Act enters into force.
Article 3 (Applicability to tax credit for children)
(1) The amended provisions, with the exception of the subparagraphs, of Article 59-2(1) shall begin to apply to cases where a return on the tax base of global income is filed, income tax is determined, or income tax is settled at the year end after this Act enters into force.
(2) The amended provisions of Article 59-2(1)2 and 3 shall begin to apply to the taxable period in which the enforcement date of this Act falls.
Article 4 (Applicability to tax credit for medical expenses)
The amended provisions of Article 59-4(2)2b shall begin to apply to medical expenses paid after the date this Act enters into force.
Article 5 (Applicability to calculation of additional amount equivalent to interest)
The amended provisions of the main clause of Article 64-2(4) shall begin to apply to the calculation of an additional amount equivalent to interest for the period after this Act enters into force.
Article 6 (Applicability to exceptions to non-collection of small amounts)
The amended provisions of subparagraph 1 of Article 86 shall begin to apply to cases of withholding tax on income paid after July 1, 2024.
Article 7 (Applicability to calculation of special deduction for long-term possession)
The amended provisions of Article 95(5) and (6) shall begin to apply to assets transferred after January 1, 2025.
Article 8 (Applicability to special cases on calculation of necessary expenses of capital gains)
The amended provisions of Article 97-2(1) shall begin to apply to assets transferred after this Act enters into force.
Article 9 (Applicability to period for requesting rectification for application of non-taxation, tax exemption, or limited tax rate under tax treaty)
The amended provisions of the main clause of Article 156-2(5), the main clause of Article 156-4(2), and the main clause of Article 156-6(4) shall also apply where the period for requesting rectifications under each of the respective amended provisions has not yet expired as at the time this Act enters into force.
Article 10 (Applicability to special cases concerning withholding taxes from foreigner consolidated accounts)
The amended provisions of Article 156-9 shall begin to apply to cases where domestic source income is paid to the holder of foreigner consolidated account after this Act enters into force.
Article 11 (Applicability to submission of transaction statement of overseas stock options)
The amended provisions of Article 164-5 shall begin to apply where the executive officers, etc. exercise stock options or receive stock-based compensation after this Act enters into force.
Article 12 (Transitional measures on imposition of income tax on trust income)
With respect to income attributable to trust property before this Act enters into force, the previous provisions shall apply notwithstanding the amended provisions of Article 2-3(2).
Article 13 (Transitional measures concerning increase in threshold amount for separate taxation)
Notwithstanding the amended provisions of Article 14(3)9c, the previous provisions shall apply to the threshold amount for separate taxation of pension income received before this Act enters into force.
Article 14 (Transitional measures on reduction of dividend gross-up rate)
Notwithstanding the amended provisions of the proviso, with the exception of the subparagraphs, of Article 17(3), the previous provisions shall apply to the calculation of the amount of dividend income granted before this Act enters into force.
Article 15 (Transitional measures on special case for calculating gross income from housing deposits)
Notwithstanding the amended provisions of Article 25(1)2, the previous provisions shall apply to the calculation of gross income for a taxable period that commences before this Act enters into force.
Article 16 (Transitional measures on income deduction for interest repayment on long-term housing mortgage loans)
(1) Notwithstanding the amended provisions of the main clause, with the exception of the subparagraphs, of Article 52(5) and the main clause of subparagraph 4 of that paragraph, the previous provisions shall apply to the scope of houses and pre-sale housing rights eligible for income deduction of interest repayment on long-term mortgage loans, with respect to houses or housing rights that were acquired before this Act enters into force.
(2) The limits on income deduction for interest repayment on long-term mortgage loans borrowed before this Act enters into force shall be determined according to the following classifications:
1. In the case of interest repayments made before this Act enters into force: Notwithstanding the amended provisions of the proviso, with the exception of the subparagraphs, of Article 52(5), and paragraph (6) of that Article, the previous provisions shall apply;
2. In the case of interest repayments made after this Act enters into force: The amended provisions of the proviso, with the exception of the subparagraphs, of Article 52(5), and of Article 52(6) shall apply; provided, where the application of the amended provisions of the proviso, with the exception of the subparagraphs, of Article 52(5), and of Article 52(6) to interest repayments on long-term mortgage loans borrowed before January 1, 2012 would be disadvantageous to the taxpayer, compared to the application of the amended provisions of the proviso, with the exception of the subparagraphs, of Article 52(5) in accordance with Article 17 of the Addenda to the IncomeTax Act (Act No. 11146), the previous provisions shall apply.
ADDENDA <Act No. 20615, Dec. 31, 2024>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2025; provided, the amended provisions specified in the following subparagraphs shall enter into force on their respective dates:
1. The amended provisions of Article 4(2)4, Article 17(1)5-3 and 5-4, and the amended provisions of Article 17(1)9 and 10 (limited to the part related to subparagraphs 5-3 and 5-4 of that paragraph) of the Income Tax Act (Act No. 17757): July 1, 2025;
2. The amended provisions of Articles 37(1)3, paragraphs (5), (6), and (7) of that Article, and Article 164-4(1) of the Income Tax Act (Act No. 17757): January 1, 2027;
3. The amended provisions of Article 156-2(1): January 1, 2026;
4. The amended provisions of Articles 164-4(2) and 177 of the Income Tax Act (Act No. 17757): January 1, 2028.
Article 2 (Applicability to trust income)
The amended provisions of Articles 4(2)4 and 17(1)5-3 and 5-4, and the amended provisions of Article 17(1)9 and 10 (limited to the part related to subparagraphs 5-3 and 5-4 of that paragraph) of the Income Tax Act (Act No. 17757) shall begin to apply to the portion of income paid after July 1, 2025.
Article 3 (Applicability to non-taxation of childbirth support fund of enterprises)
The amended provisions of subparagraph 3s1i) of Article 12 shall begin to apply to cases where a final return on the tax base of global income is filed or year-end tax settlement is made after this Act enters into force.
Article 4 (Applicability to non-taxation of discount amounts for executive officers)
The amended provisions of subparagraph 3x of Article 12 and Article 20(1)6 shall begin to apply to income generated after this Act enters into force.
Article 5 (Applicability to scope of income excluded from additional application of dividend income)
The amended provisions of Article 17(3)1, 6, and 7 shall begin to apply to the income acquired or received through a reduction of capital or a reduction of revaluation reserves or capital reserves occurring after this Act enters into force.
Article 6 (Applicability to methods of calculating acquisition value of virtual assets)
The amended provisions of Article 37(6) of the Income Tax Act, as partially amended by Act No. 17757, shall begin to apply to virtual assets, etc. transferred after January 1, 2027.
Article 7 (Applicability to tax credit for children)
The amended provisions of Article 59-2(1)1 through 3 shall begin to apply to the taxable period in which the enforcement date of this Act falls.
Article 8 (Applicability to special cases on calculation of necessary expenses of capital gains)
The amended provisions, with the exception of the subparagraphs, of Article 97-2(1), shall begin to apply to assets donated after this Act enters into force.
Article 9 (Applicability to calculation of capital gains)
The amended provisions of Article 100(3) shall begin to apply to transfer occuring after this Act enters into force.
Article 10 (Applicability to special taxation of interest and capital gains on State bonds of non-residents)
(1) The amended provisions of Article 119-3(3) through (5) shall begin to apply to cases where income is paid after this Act enters into force.
(2) The amended provisions of Article 119-3(6) and (7) shall begin to apply to requests for rectification filed after this Act enters into force.
Article 11 (Applicability to obligation to issue electronic donation receipts)
The amended provisions of Article 160-3(4) shall begin to apply to donations received after this Act enters into force.
Article 12 (Applicability to submission of details of virtual asset transactions)
The amended provisions of Article 164-4(2) of the Income Tax Act, as partially amended by Act No. 17757, shall begin to apply to cases where no materials are submitted on transactions that occur after January 1, 2028.
Article 13 (Transitional measures on withholding tax rates)
Notwithstanding the amended provisions of Article 129(1)3, the previous provisions shall apply to the withholding of income paid before this Act enters into force.
Article 14 (Transitional measures concerning tax credits and payment of subsidies by taxpayers associations)
(1) Notwithstanding the amended provisions of Article 150(3), the previous provisions shall apply to tax credits for income generated before this Act enters into force.
(2) Notwithstanding the amended provisions of Article 169, the previous provisions shall apply to subsidies paid to a person who has collected and paid income tax on income generated before this Act enters into force.
Article 15 (Transitional measures concerning application for non-taxation or tax exemption for non-resident under tax treaty)
Notwithstanding the amended provisions of Article 156-2(1), the previous provisions shall apply to domestic source income from personal services that arose before that amended provisions enter into force.
Article 16 Omitted.
ADDENDA <Act No. 21065, Oct. 1, 2025>
Article 1 (Enforcement date)
This Act shall enter into force on the date of its promulgation; provided, among the Acts amended pursuant to Article 7 of the Addenda, the parts amending Acts that were promulgated before the enforcement of this Act but whose enforcement dates have not yet arrived shall enter into force on the respective enforcement dates of those Acts, and the amended provisions of the following subparagraphs shall enter into force on the dates specified therein:
1. The amended provisions of the following items shall enter into force on January 2, 2026; provided, among the Acts amended pursuant to Article 7 of the Addenda (limited to the parts related to the amended provisions of items a and b), the parts amending Acts that were promulgated before the enforcement date under the main clause but whose enforcement dates under the main clause have not yet arrived shall enter into force on the respective enforcement dates of those Acts:
a. The amended provisions of Articles 19(4), 23, 29(1)1, and 30;
b. The amended provisions of Articles 12(2), 19(3), 22, and the proviso of Article 29(2) (limited to the provisions concerning the Minister of Finance and Economy and the Ministry of Finance and Economy);
c. The Acts amended pursuant to Article 7 of the Addenda (limited to the portions related to the amended provisions of items a and b).
2. Omitted.
Articles 2 through 6 Omitted.
Article 7 Omitted.
Article 8 Omitted.
ADDENDA <Act No. 21221, Dec. 23, 2025>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2026; provided, the amended provisions specified in the following subparagraphs shall enter into force on their respective dates:
1. Article 57-2(1) and (2) (limited to the part concerning the deduction from the calculated tax on retirement income and to subparagraph 2b), and Article 129(8) through (11): July 1, 2026;
2. Articles 17(3) and 118-9 through 118-18: January 1, 2027.
Article 2 (Applicability to the non-taxation of income arising from the felling or transfer of standing trees)
The amended provisions of subparagraph 2 of Article 12 shall begin to apply to income arising after the enforcement of this Act.
Article 3 (Applicability to non-taxable income received as childcare leave allowance or in connection with childbirth and childcare)
The amended provisions of subparagraphs 3 and 5 of Article 12 shall begin to apply to income paid after the enforcement of this Act.
Article 4 (Applicability to special cases of tax credit for foreign corporate tax paid by indirect investment companies)
(1) The amended provisions of Article 57-2(1) and (2) (limited to the part concerning the deduction from the calculated tax on retirement income and to subparagraph 2b) shall begin to apply to cases where the tax base of global income or the tax base of retirement income is reported with respect to income paid into a pension account from an indirect investment company, etc. after January 1, 2025 and withdrawn from the pension account after July 1, 2026.
(2) The amended provisions of Article 57-2(2) (excluding the part concerning the deduction from the calculated tax on retirement income and subparagraph 2b) and paragraph(3) shall begin to apply to cases where the tax base of global income is reported after the enforcement of this Act.
Article 5 (Applicability to special tax credit for education expenses)
The amended provisions of Article 59-4(3) shall begin to apply to cases where educational expenses are paid after the enforcement of this Act.
Article 6 (Applicability to calculation of transfer value)
The amended provisions of Article 96(3)2 shall begin to apply to assets transferred after this Act enters into force.
Article 7 (Applicability to special cases on calculation of necessary expenses of capital gains)
The amended provisions of Article 97-2(1) shall begin to apply to assets transferred after this Act enters into force.
Article 8 (Applicability to tax liability upon a resident's departure)
The amended provisions of Articles 118-9 through 118-18 shall apply where a resident leaves the Republic of Korea on or after January 1, 2027.
Article 9(Applicability to year-end tax settlement of business income tax except for final return on tax base)
The amended provisions of Article 144-2 shall apply from cases where the additional tax amount payable is withheld when the business income for February 2026 is paid (where the business income for February is not paid by the end of February or where there is no business income for February, the end of February).
Article 10 (Applicability to submission of written application for special cases of limited tax rates for nonresidents)
The amended provisions of Article 156-6(4) shall begin to apply to cases where the application for the application of the limited tax rate under a tax treaty is filed after the enforcement of this Act.
Article 11 (Applicability to issuance of credit card sales slips by credit card merchants)
The amended provisions of Article 162-2(2) shall begin to apply to cases where goods or services are supplied after the enforcement of this Act.
Article 12 (Applicability to issuance of cash receipts by cash receipt merchants)
The amended provisions of Article 162-3(3) shall begin to apply to cases where goods or services are supplied after the enforcement of this Act.
Article 13 (Applicability to submission of detailed statements of stocks)
The amended provisions of subparagraph 3 of Article 174-2 shall begin to apply to cases where transactions in stocks, etc. occur after the enforcement of this Act.
Article 14 (Transitional measures concerning increase in the gross-up rate for dividends)
Notwithstanding the amended provisions of Article 17(3), the previous provisions shall apply to the calculation of the amount of income from dividend income paid before December 31, 2026.
Article 15 (Transitional measures concerning withholding tax rates)
(1) Notwithstanding the amended provisions of Article 129(1), the previous provisions shall apply to the withholding of income paid before this Act enters into force.
(2) The amended provisions of Article 129(8) through (10) shall begin to apply to cases where tax is withheld on income paid into a pension account from an indirect investment company, etc. after January 1, 2025 and withdrawn from the pension account on or after July 1, 2026.
(3) With respect to the amount under the amended provisions of Article 129(8)2 concerning deduction income withdrawn from a pension account that was paid into a pension account from an indirect investment company, etc. after January 1, 2025 and withdrawn from the pension account before June 30, 2026, such amount may, as prescribed by Presidential Decree, be deducted within the limit amount of deduction for income withdrawn from a pension account for the relevant income when deduction income withdrawn from a pension account is withdrawn from the pension account after July 1, 2026.
ADDENDA <Act No. 21223, Dec. 23, 2025>
Article 1 (Enforcement date)
This Act shall enter into force on January 1, 2026. (Proviso Omitted.)
Articles 2 through 48 Omitted.
Article 49 Omitted.

ENFORCEMENT DECREE OF THE INCOME TAX ACT

2-column view table
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.36343 20260701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.36276 20260423
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.36129 20260227
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.36055 20260201
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.36000 20260101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35947 20260102
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35878 20251128
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35811 20251001
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35608 20250701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35498 20250719
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35349 20250228
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.35121 20250101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34990 20241112
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34881 20240915
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34873 20240910
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34728 20240731
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34657 20240710
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34591 20240627
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34488 20240517
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34265 20240229
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.34061 20240101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.33621 20230710
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.30285 20191231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.29892 20190625
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.29523 20190212
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.29242 20181023
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.29045 20180717
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28946 20180605
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28637 20180213
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28627 20180209
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28511 20180101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28440 20171121
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28293 20170919
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.28211 20170726
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27972 20170330
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27829 20170203
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27793 20170120
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27653 20161205
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27617 20161130
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27506 20160923
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27472 20160901
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27471 20160901
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27444 20160812
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27245 20160623
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.27074 20160331
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26982 20160217
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26922 20160125
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26844 20151231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26763 20151229
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26659 20160125
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26600 20151025
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26416 20150721
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26369 20150701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26344 20150701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26302 20150604
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.26067 20150203
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25945 20141231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25751 20141119
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25641 20141001
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25523 20140729
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25522 20140729
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25249 20140311
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.25193 20140221
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24823 20131105
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24709 20130909
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24697 20130829
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24640 20130628
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24638 20130701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24574 20130611
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24441 20130323
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24356 20130215
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24315 20130116
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24104 20120914
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24076 20120902
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.24017 20120805
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23987 20120726
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23964 20120722
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23887 20120629
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23723 20120413
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23588 20120202
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23356 20111208
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23218 20111014
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23139 20110915
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.23113 20110830
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22977 20110624
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22580 20110101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22560 20110205
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22516 20101209
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22493 20101118
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22395 20110101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22391 20100920
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22269 20100712
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22185 20100608
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22151 20100505
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22075 20100319
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22037 20100310
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22034 20100218
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.22003 20100201
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21934 20100101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21887 20091215
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21881 20091214
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21765 20091001
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21565 20090626
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21528 20090609
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21525 20090608
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21515 20090529
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21430 20090421
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21301 20090204
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21215 20081231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21214 20081231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21195 20081231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21148 20081206
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21138 20081128
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21062 20081007
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.21025 20080922
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.20931 20080724
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.20763 20080407
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.20720 20080229
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.20618 20080222
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19687 20060925
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19513 20060701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19507 20060612
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19463 20060430
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19327 20060209
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19254 20060101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.19010 20051201
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18988 20050805
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18903 20050701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18850 20050531
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18705 20050219
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18529 20040830
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18401 20040530
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18312 20040317
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18297 20040301
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18173 20040101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18146 20031130
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18127 20040101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18073 20030730
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18048 20030710
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.18044 20030701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17825 20030101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17751 20021001
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17555 20020330
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17456 20020101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17339 20010814
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17296 20010708
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17158 20010327
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17115 20010129
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.17032 20010101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16988 20001101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16809 20000516
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16762 20000328
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16682 20000101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16664 20000101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16556 19990918
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.16112 19990701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15969 19990101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15967 19990101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15747 19980401
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15604 19971231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15565 19980101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15500 19971025
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15486 19970930
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15191 19970101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.15138 19960822
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14999 19960513
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14988 19960427
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14860 19960101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14739 19950720
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14721 19950706
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14682 19950630
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14467 19960101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14447 19941223
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.14083 19940101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13896 19930527
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13869 19930306
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13802 19930101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13739 19921007
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13540 19920101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13194 19910101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.13062 19900731
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12994 19900901
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12899 19900103
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12877 19900101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12767 19890801
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12564 19890101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12509 19880825
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12279 19880101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.12154 19870508
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.11940 19860630
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.11812 19860101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.11775 19851005
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.11578 19841231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.11519 19841005
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.11156 19830701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.10977 19830101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.10736 19820218
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.10665 19820101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.10419 19810723
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.10412 19810723
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.10120 19810101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.9960 19800711
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.9793 19800229
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.9698 19800101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.9229 19781205
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.8960 19780424
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.8786 19780101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.8652 19770701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.8536 19770420
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.8351 19770101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.8051 19760331
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.7955 19760101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.7911 19751231
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.7863 19751113
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.7458 19750101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.7210 19740725
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.6917 19731101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.6643 19730424
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.6363 19721018
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.6311 19720803
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.6072 19720101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.5898 19720101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.5553 19710301
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.5510 19710208
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.5369 19701022
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.5286 19700820
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.4488 19700101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.4015 19690731
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.3879 19690415
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.3699 19690101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.3320 19680101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.3245 19670701
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.3097 19670601
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.2442 19660311
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.2350 19660101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.2340 19650613
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.2282 19651110
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.2067 19650304
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.1439 19590101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.1343 19630618
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.1279 19630510
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.1244 19570101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.1104 19550923
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.1099 19630101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.939 19541001
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.899 19540331
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.802 19620612
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.476 19510101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.352 19500515
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.320 19620101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.164 19610101
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.155 19490805
ENFORCEMENT DECREE OF THE INCOME TAX ACT No.124 19610824
CHAPTER I GENERAL PROVISIONS
법령 이단보기
Article 1 (Purpose)
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 by Presidential Decree No. 22034, Feb. 18, 2010]
법령 이단보기
Article 2 (Determination on Domicile and Place of Residence)
(1) A domicile under 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(2) A place of residence under Article 1-2 of the Act means a place where a person has lived for a long time besides his/her domicile, and in which there is no general living relationship as close as a domicile. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) Where a person who lives in the Republic of Korea is any of the following persons, he/she shall be deemed to have his/her domicile in the Republic of Korea:
1. When a person has an occupation which requires him/her to continually reside in the Republic of Korea for one or more years;
2. When a person has family members living with him/her in the Republic of Korea, and is deemed to continually reside in the Republic of Korea for one or more years in view of his/her occupation or property status.
(4) Where a person living or working overseas falls under any of the following subparagraphs, he/she shall be deemed to have no domicile in the Republic of Korea:
1. When a person has an occupation which usually requires him/her to continually reside abroad for one or more years;
2. When a person with a foreign nationality or citizenship under foreign laws, who has no family living together with him/her in the Republic of Korea, and is not deemed to return home to reside mainly in the Republic of Korea in view of his/her occupation or property status.
(5) In cases of a crew member of a vessel or aircraft serving an overseas route, if a place of residence of his/her family living together with the relevant crew member, or a place in which he/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.
법령 이단보기
Article 2-2 (Time when Person Becomes Resident or Nonresident)
(1) The time when a nonresident becomes a resident shall be the time falling under each of the following subparagraphs:
1. The date when he/she has a domicile in the Republic of Korea;
2. The date when a reason that it is deemed that he/she has a domicile in the Republic of Korea or that his/her domicile is located in the Republic of Korea pursuant to Article 2 (3) or (5) has occurred;
3. The date when one year has passed since he/she had a place of residence in the Republic of Korea.
(2) The time when a resident becomes a nonresident shall be the time falling under each of the following subparagraphs:
1. The next day of the date when he/she leaves Korea to move his/her domicile or place of residence outside Korea;
2. The next day of the date when a reason that it is deemed that he/she has no domicile in the Republic of Korea or that he/she has a domicile outside the Republic of Korea pursuant to Article 2 (4) or (5) has occurred.
[This Article Added by Presidential Decree No. 21301, Feb. 4, 2009]
법령 이단보기
Article 3 (Special Cases in Determination of Residents)
Public officials or residents working overseas, or executives or employees dispatched to places of business abroad or overseas local corporations (limited to cases where a domestic corporation has invested 100/100 of the total number of outstanding stocks or the investment stakes) of a domestic corporation shall be deemed residents, notwithstanding the provisions of Article 2 (4) 1. <Amended by Presidential Decree No. 21301, Feb. 4, 2009>
법령 이단보기
Article 3-2 (Distinction of the Groups Deemed Resident or Nonresident)
With respect to the non-juristic organization which is deemed a resident or a non-resident pursuant to Article 2 (3) of the Act, the Act shall apply thereto in accordance with the following classification:
1. Where the method of profit distribution or the distribution ratio among members of the non-juristic organization is determined or such profit is confirmed to be practically distributed, such members concerned shall be deemed jointly engaging in businesses and each of the members shall be taxed;
2. Where the method of profit distribution or the distribution ratio among members of the non-juristic organization is not determined or confirmed, such organization concerned shall be deemed one resident or non-resident and taxed accordingly.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
법령 이단보기
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/her departure.
(2) In cases where a person having a place of residence in the Republic of Korea returns to the Republic of Korea again after his/her departure from Korea, and where the purpose of his/her departure is deemed apparently temporary in view of the place of residence of family living together with him/her and the location of his/her property, the relevant period of his/her absence shall be deemed as the period of residence in the Republic of Korea.
(3) In cases where the period of residence in the Republic of Korea is one or more years over two taxable periods, it shall be deemed that the relevant person has a place of residence in the Republic of Korea for one or more years.
법령 이단보기
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 belonging to trust assets separately from other income. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Whether a beneficiary is specified or exists under Article 2-2 (6) of the Act shall be governed by the conditions at the time when income or expenditure related to trust assets are incurred. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) Profits from trust governed by Article 4 (2) of the Act, as specified money in trust pursuant to subparagraph 1 of Article 103 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, shall be calculated by applying Article 26-2 (6) mutatis mutandis thereto. <Added by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 20618, Feb. 22, 2008]
법령 이단보기
Article 5 (Determination of and Report on Place for Tax Payment)
(1) If a place for tax payment is unclear, the determination of a place for tax payment pursuant to Article 6 (3) of the Act shall be as follows: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 24356, Feb. 15, 2013>
1. Where a person has two or more domiciles, the place registered under the Resident Registration Act shall be the place for tax payment, and when a person has two or more places of residence, the place in which his/her living relationship is the closest shall be the place for tax payment;
2. Where a nonresident has two or more places of business and where it is difficult to determine his/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 the domestic place of business under Article 120 of the Act (hereinafter referred to as “domestic place of business”) earns income from domestic sources under subparagraph 3 or 9 of Article 119 of the Act from two or more domestic places, the place reported by such nonresident as a place for tax payment pursuant to paragraph (5) from among the places from which such income from domestic sources is generated shall be the place for tax payment;
4. Where a nonresident fails to file any 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/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 cases where a corporation falls under any of the following: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Where the location of the head office or principal office is approved by the Commissioner of the National Tax Service as the place to pay withholding tax on income that has been paid by the branch offices, business offices and other places of work of the corporation concerned. In such cases, the Commissioner of the National Tax Service may approve the place to pay the amount of income tax withheld by income;
2. Where a corporation is registered by a unit of each business operator pursuant to Article 5 (2) and (3) 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17339, Aug. 14, 2001; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
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 is an income falling under subparagraph 9 (b) 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 Ministerial Decree of Strategy and Finance (including submitting it by means of the Home Tax Service) to the head of the competent tax office. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008>
(6) The place for tax payment of a public official having no domicile in the Republic of Korea under Article 8 (5) of the Act, or of a person deemed a resident under Article 3, shall be the principal place of his/her family's living or the location of any agency to which he/she belongs.
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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 Ministerial Decree of Strategy and Finance (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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(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 Ministerial Decree of Strategy and Finance, 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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(3) The Commissioner of the National Tax Service or the commissioner of the competent regional tax office shall, where he/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, That if any causes exist for interim prepayment or occasional imposition, he/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 by Presidential Decree No. 14860, Dec. 30, 1995>
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Article 7 (Report on Change of Places for Tax Payment)
(1) A person who intends to change the place for tax payment under Article 10 of the Act shall submit a written report on change of the place for tax payment, prescribed by Ministerial Decree of Strategy and Finance (including submitting it by means of the Home Tax Service) to the head of the competent tax office having jurisdiction over such changed place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008>
(2) When a person revises the business registration under Article 11 of the Enforcement Decree of the Value-Added Tax Act as the taxpayer's domicile has been changed, he/she shall be deemed to have made the report on the change of the place for tax payment under paragraph (1). <Amended by Presidential Decree No. 18705, Feb. 19, 2005>
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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
Section 1 Non-Taxation
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Article 8-2 (Non-Taxable Income from House Rental)
(1) House under subparagraph 2 (b) of Article 12 of the Act shall include land annexed to a house. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(2) "House" in paragraph (1) means a building used for regular residence (excluding cases for residence for business), and "land annexed to a house" means land, the area of which does not exceed the larger of the following areas, annexed to a house: <Added by Presidential Decree No. 22034, Feb. 18, 2010>
1. Total floor area of a building (excluding the area of basement floors, the area used for parking of the ground, the area of a refuge safety zone pursuant to Article 34 (3) of the Enforcement Decree of the Building Act and the area for common facilities of residents under subparagraph 3 of Article 2 of the Regulations on House Building Standards);
2. The area calculated by multiplying the area on which a house is built by five times (in cases of land outside an urban area pursuant to subparagraph 1 of Article 6 of the National Land Planning and Utilization Act, ten times).
(3) When subparagraph 2 (b) of Article 12 of the Act applies, the number of houses shall be counted based on the following subparagraphs: <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
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 deemed to be owned by the holder of the largest share, and if there are two or more holders of the largest share, it shall be deemed to be owned by each such owner respectively: Provided, That where there are two or more holders of the largest share, and if 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;
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/her spouse each own houses, the total number of houses owned by them.
(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 annexed thereto shall be governed by the following classifications. In such cases, where a house and land annexed thereto are leased to two or more 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 by Presidential Decree No. 22034, 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 annexed to a house of the relevant house shall be 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 annexed 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 900 million won" in subparagraph 2 (b) 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 by Presidential Decree No. 22580, Dec. 30, 2010>
(6) In addition to matters under paragraphs (1) through (5), matters necessary for the calculation of rental income of a house shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 16664, Dec. 31, 1999]
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Article 9 (Scope of Side Business Income of Farm Households)
(1) "Sideline income of a farm household prescribed by Presidential Decree" in subparagraph 2 (c) 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 speciality manufacturing, traditional tea manufacturing, fishery, fish farming or other similar activities a farmer or a fisherman conducts as a side job: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Income from stock breeding as a side business size of a farm household in Appendix 1;
2. Income other than that under subparagraph 1, the total amount of which does not exceed 20 million won a year.
(2) "Private house lodging" in paragraph (1) other than each subparagraph means private lodging business in agricultural and fishing villages under the Rearrangement of Agricultural and Fishing Villages Act. <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006>
(3) "Specialty" in paragraph (1) other than each subparagraph means traditional food under the Food Industry Promotion Act and fishery specialities under the Agricultural and Marine Products Quality Control Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23964, Jul. 20, 2012>
(4) "Traditional tea" in paragraph (1) other than each subparagraph means tea certified by the Minister of Agriculture, Food and Rural Affairs pursuant to Article 22 of the Food Industry Promotion Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24441, Mar. 23, 2013>
(5) “Fishery, fish farming” under paragraph (1) other than each subparagraph means the coastal fishing, inland water fishery and cultivating fishery among the fishing industry classified pursuant to the Korea Standard Industrial Code publicly notified by the Commissioner of Statistics Korea (hereinafter referred to as “Korea Standard Industrial Code”). <Added by Presidential Decree No. 23588, Feb. 2, 2012>
(6) In applying paragraph (1), matters necessary for calculation of income from side business of a farm household shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 23588, Feb. 2, 2012>
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Article 9-2 (Scope of Income Generated from Manufacturing Traditional Liquor)
"Income generated from manufacturing traditional liquor prescribed by Presidential Decree" in subparagraph 2 (d) 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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24441, Mar. 23, 2013; Presidential Decree No. 24574, Jun. 11, 2013>
1. Traditional liquors under subparagraph 1-2 of Article 3 of the Liquor Tax Act;
2. Liquors undergone procedures prescribed by Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 18173, Dec. 30, 2003]
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Article 9-3 (Scope of Income from Non-taxable Timbering of Forest Trees, etc.)
(1) The afforestation period for the purpose of applying subparagraph 2 (e) of Article 12 of the Act shall be calculated as follows: <Amended by Presidential Decree No. 22034, 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 six hundred won a year, generated from cutting down or transferring forest trees in forest land" in the former part of subparagraph 2 (e) 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 six million won in each year. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 10 (Scope of Soldiers on Active Service)
"A soldier in service prescribed by Presidential Decree" in subparagraph 3 (a) of Article 12 of the Act means soldiers on active service below sergeant (including staff sergeants appointed without volunteering), riot policemen, guards or warders of correctional institutions, or others corresponding thereto, on active service who are drafted or called up, or volunteer, to discharge their obligations to serve in the military.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 11 (Scope of School Expenses)
"School expenses prescribed by Presidential Decree" in subparagraph 3 (h) of Article 12 of the Act means school expenses satisfying the following subparagraphs (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 Act on the Development of Occupational Abilities of Workers: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree Nos. 15967 & 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
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.
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Article 12 (Scope of Pay in Nature of Compensation for Actual Expenses)
"Pay in the nature of compensation for actual expenses prescribed by Presidential Decree" in subparagraph 3 (i) of Article 12 of the Act means those referred to in the following subparagraphs: <Amended by Presidential Decree No. 14682, Jun. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21148, Dec. 3, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22003, Jan. 27, 2010; Presidential Decree No. 2034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 22977, Jun. 24, 2011; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Allowances paid to unpaid members of committees under Acts and subordinate statutes, or municipal ordinances (including members of the Academy of Sciences and the Academy of Arts);
2. Food expenses received under the Seafarers Act;
3. Amount of such level as to compensate 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 relevant enterprises, in lieu of receiving reimbursement of the actual travel expenses incurred during a business trip within the city using his/her own car to perform his/her duties);
4. Clothing, caps or shoes provided as uniform to employees who shall wear uniforms under Acts and subordinate statutes, or municipal ordinances;
5. through 7. Deleted; <by Presidential Decree No. 17032, Dec. 29, 2000>
8. Working clothes received by those who work in a hospital, laboratory, financial institution, etc. factory or mine, or by those engaged 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, service in the DMZ, service at the front line sentry post, service on warships 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 allowance of 200,000 won or less per month provided to seamen under the Seafarers Act, who are stipulated by Ministerial Decree of Strategy and Finance (excluding persons to whom Articles 16 and 17 apply), and the allowance for service on warships and flight allowance provided to police officials, and allowance for service on warships, flight allowance and fire fighting allowance 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 out of subsidies for research or research activity expenses provided to a person who falls under any of the following items:
(a) Teaching staff of a school under the Early Childhood Education Act, the Elementary and Secondary Education Act, the Higher Education Act, and a school equivalent thereto (including an educational institution 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 Support of Specific Research Institutes 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 Ministerial Decree of Strategy and Finance;
(c) A person who directly engages in researching activities in a research institute attached to a small or medium enterprise or a venture enterprise defined in Article 16 (1) 1 or 3 of the Enforcement Decree of the Basic Research Promotion and Technology Development Promotion Act or in a designated research and development department established pursuant to Article 16 (2) (limited to the research and development department to be established in a small or medium enterprise or a venture enterprise);
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 to be paid to improve labor conditions of a nursing teacher, among the expenses under Article 24 (1) 7 of Enforcement Decree of the Infant Care Act;
(b) Labor costs of master teachers and teachers of the private kindergarten under Article 32 (1) 2 of Enforcement Decree of the Infant Care Act;
(c) Training allowance to be paid to the specialized doctors in order to induce supply-demand balance among the doctors in each specialized major;
14. Amount of 200,000 won or less 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 News Agency Development Act, a newspaper under the Act on the Promotion of Newspapers, etc. (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), and who is engaged 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/she receives allowance for news gathering along with his/her wages, the amount of money equivalent to 200,000 won per month shall be deemed allowance for news gathering;
15. Allowances of 200,000 won or less received each month by a worker working in a remote area prescribed by Ministerial Decree of Strategy and Finance;
16. Wages received by a worker in relation to natural disasters or other calamities;
17. Transfer support funds of 200,000 won or less per month to be temporarily paid to public officials or employees belonging to the public institutions under subparagraph 10 of Article 2 of the Special Act on Balanced National Development to be transferred to areas other than the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act.
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Article 13 Deleted. <by Presidential Decree No. 19327, Feb. 9, 2006>
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Article 14 (Scope of International Organizations)
(1) "International organization prescribed by Presidential Decree" in the main sentence of subparagraph 3 (j) 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 3 (j) of Article 12 of the Act means pay received as the price for the performance of his/her duties by a person who is not Korean, among those working for a foreign government or an international organization.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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 3 (m) 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, That where military personnel or a civilian worker in the military stationed in a foreign country is recalled home because he/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 by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 16 (Scope of Non-Taxable Wages for Workers Abroad)
(1) "Wages prescribed by Presidential Decree" in subparagraph 3 (o) of Article 12 of the Act means the following wages: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 23723, Apr. 13, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Amount of less than one million won per month (three million won per month when receiving remuneration in exchange for providing labor (including construction supervision works) on a pelagic fishing vessel, a vessel serving overseas routes, etc. or in a construction site of overseas, etc.), among the remuneration received by a person by providing labor abroad (including furnishing labor on a pelagic fishing vessel, in a vessel or aircraft serving overseas routes, or in an overseas construction work site, etc.) or in North Korea under the Inter-Korean Exchange and Cooperation Act (hereafter referred to as "overseas, etc." in this Article);
2. Amount received in excess of that to be received if the relevant worker serves in the Republic of Korea, among allowances received for service overseas, ect. by public officials, persons engaged in the Korea Trade-Investment Promotion Agency under the Korea Trade-Investment Promotion Agency Act, the Korea National Tourism Organization under the Korea National Tourism Organization Act and the Korea International Cooperation Agency under the Korea International Cooperation Agency Act.
(2) Wages under paragraph (1) shall include cases 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 by Presidential Decree No. 17032, Dec. 29, 2000>
(4) The scope of a pelagic fishery vessel, an overseas construction site, etc. under paragraph (1) 1 and of crew under paragraph (3) shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 17 (Scope of Night-Shift Allowance, etc. Received by Manufacturing Workers)
(1) "Worker prescribed by Presidential Decree" in subparagraph 3 (q) of Article 12 of the Act means any of the following persons, whose monthly fixed pay does not exceed 1.5 million won and his/her total salary under Article 20 (2) of the Act during the immediately preceeding tax period does not exceed 25 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 compensation for actual expenses pursuant to Article 12) received monthly by worker's rank: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18048, Jul. 10, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Persons providing labor in a factory or mine, prescribed by Ministerial Decree of Strategy and Finance among employees engaging in production or related areas as indicated in the Korea Standard Occupational Classification publicly notified by the Commissioner of the National Statistical Office;
2. Persons providing labor under employment by a fishing business, prescribed by Ministerial Decree of Strategy and Finance;
3. Persons stipulated by Ministerial Decree of Strategy and Finance among drivers or employees in related fields, or those engaged in delivery or transport of baggage in accordance with the Korea Standard Occupational Classification published by the Commissioner of the National Statistical Office.
(2) "An allowance received for overtime work, night-shift work or holiday work prescribed by Presidential Decree" in subparagraph 3 (q) of Article 12 of the Act means the amount of money falling under any of the following: <Amended by Presidential Decree No. 14682, Jun. 30, 1995; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, 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 by Presidential Decree No. 23588, Feb. 2, 2012>
(4) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 17-2 (Scope of Non-Taxable Meal Expenses, etc.)
"Meals or meal expenses prescribed by Presidential Decree" in subparagraph 3 (r) of Article 12 of the Act means meals or meal expenses falling under any of the following subparagraphs: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 22034, Feb. 18, 2010>
1. Meals and other food and drinks provided to workers by in-house meal services or similar means;
2. Meal costs of not more than 100 thousand won per month received by workers for whom meals and other food and drinks stipulated by subparagraph 1 are not provided.
[This Article Added by Presidential Decree No. 15138, Aug. 22, 1996]
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Article 18 (Scope of Non-Taxable Other Income)
(1) "Prizes and supplementary prizes prescribed by Presidential Decree" in subparagraph 5 (c) of Article 12 of the Act means any of the following prizes: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24315, Jan. 16, 2013; Presidential Decree No. 24441, Mar. 23, 2013>
1. Prize money and supplementary prizes received by the winners of the Academy of Sciences prizes under the National Academy of Sciences Act, or 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, ICT and Future Planning;
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 special Acts;
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 equal to or higher than a chief of the 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 a won vocational technique competition in the Republic of Korea or abroad approved by the head of the relevant central administrative agency;
10. An allowance for exemplary official received by a person selected as an exemplary official pursuant to the Regulations for Exemplary Officials;
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 person who reports a crime, as prescribed by the Commissioner of the National Police Agency;
13. Prize money and supplementary prizes granted by the State or local governments, other than those in subparagraphs 1 through 12.
(2) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 19 Deleted. <by Presidential Decree No. 22185, Jun. 8, 2010>
Section 2 Tax Base and Calculation of Tax Amount
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Article 20 (Scope of Workers Employed on a Daily Basis)
"Workers employed on a daily basis prescribed by Presidential Decree" in Article 14 (3) 2 of the Act means any person 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, and who are stipulated under the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Persons engaged in construction work, excluding a person who falls under any of the following items:
(a) Persons employed continuously for one or more years by the same employer;
(b) Persons employed continuously by the same employer in order to engage in the following jobs in general:
(ⅰ) Directly instructing or supervising persons who prepare for work or engage in manual labor;
(ⅱ) Technical work, clerical work, typing, cooking, guard, etc. required at a work site;
(ⅲ) Operating or maintaining construction machines;
2. Persons engaged in loading and unloading (including stevedores), but excluding those who fall under any of the following items:
(a) Persons not receiving remuneration for labor on days on which they provide labor, but regularly receive remuneration for labor;
(b) Persons employed by the same employer continuously in order to engage in the following jobs in general:
(ⅰ) Directly instructing or supervising persons who prepare for works or engage in manual labor;
(ⅱ) Operating or maintaining major machines;
3. Persons engaged in jobs other than subparagraph 1 or 2, and who do not remain under continuous employment by the same employer for three or more months under employment contract.
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Article 20-2 (Scope of Inevitable Cause, Etc.)
(1) “Inevitable causes as prescribed by Presidential Decree” under Article 14 (3) 7 (b) of the Act means any of the following causes:
1. Natural disaster;
2. Death or overseas relocation of a subscriber to the pension accounts under Article 20-3 (1) 2 of the Act (hereinafter referred to as “pension account”);
3. Where a treatment for at least three months is required due to disease/injury of a subscriber to the pension accounts or his/her dependent family members;
4. Where a subscriber to the pension accounts has received a court sentence of bankruptcy or a court decision for initiation of individual rehabilitation procedure pursuant to the Debtor Rehabilitation and Bankruptcy Act;
5. Suspension of business, cancelation of permission/approval of business, resolution of dissolution or sentence of bankruptcy of the financial company, etc. which deals with the pension account under Article 40-2 (1) (hereinafter referred to as “pension account administrator”).
(2) A person who intends to early terminate the pension account upon occurrence of the causes under paragraph (1) or to receive payment in the form other than pension pursuant to Article 40-3 (3) shall prepare required documents that can confirm the said causes and shall file his/her application therefor with the pension account administrator within six months from the date when the relevant cause becomes confirmed.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 21 (Scope of Income subject to Separate Taxation similar to Lottery Prize Income)
"Other income prescribed by Presidential Decree" in Article 14 (3) 7 (e) of the Act means any of the following income: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Deleted; <by Presidential Decree No. 24356, 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; <by Presidential Decree No. 23588, Feb. 2, 2012>
5. Income prescribed by Ministerial Decree of Strategy and Finance as income similar to those under subparagraphs 2 and 3.
[This Article Added by Presidential Decree No. 21301, Feb. 4, 2009]
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Article 22 Deleted. <by Presidential Decree No. 18173, Dec. 30, 2003>
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Article 22-2 (Interest Income from State Bonds, etc.)
(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, such as coupon rate, maturity, etc. of bonds to be issued additionally for a given period) 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 by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. State bonds;
2. Industrial finance bonds under Article 25 of the Korea Development Bank Act and political financial bonds under Article 23 of the Korea Finance Corporation Act;
3. Deposit protection fund bonds and compensation fund bonds for deposit protection fund bonds under Articles 26-2 and 26-3 of the Depositor Protection Act;
4. Monetary stabilization bonds of the Bank of Korea under 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, 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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Wholly Amended by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 22-2 (Interest Income from State Bonds, etc.)
(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 bonds falling under the following subparagraphs are issued in unity (referring to issuance by unifying the terms and conditions of issuance, such as coupon rate, maturity, etc. of bonds to be issued additionally for a given period) 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 by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. State bonds;
2. Industrial finance bonds under Article 25 of the Korea Development Bank Act and political financial bonds under Article 23 of the Korea Finance Corporation Act;
3. Deposit protection fund bonds and compensation fund bonds for deposit protection fund bonds under Articles 26-2 and 26-3 of the Depositor Protection Act;
4. Monetary stabilization bonds of the Bank of Korea under 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, 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 by Presidential Decree No. 19890, Feb. 28, 2007> [This Article Wholly Amended by Presidential Decree No. 19327, Feb. 9, 2006] [Enforcement Date: January 1, 2015] Article 22-2 (3)
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Article 23 Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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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 Guarantee of Secrecy and a corporation falling under any subparagraph of Article 111 (2) 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.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 25 (Profit Margins on Savings Insurance)
(1) "Profit margins on a savings insurance prescribed by Presidential Decree" in Article 16 (1) 9 of the Act means the amount calculated by deducting a paid-in insurance premium or paid-in deduction (hereafter referred to as "insurance premium" in this Article) from the insurance money and the deducted money to be received at maturity under an insurance contract, or from the refunded money (hereafter referred to as "insurance money" in this Article ) to be received as the relevant insurance contract is cancelled early: Provided, That the profit margins of any of the following insurance agreements (limited to the insurance agreements falling under any of subparagraphs 1 through 3 from the time of entering into an agreement, excluding an insurance agreement which no longer satisfies relevant requirements after entering into the insurance agreement; and even where an insurance agreement falling under subparagraphs 2 and 3 fails to satisfy relevant requirements after entering into the insurance agreement, it shall be included if it satisfies the requirement under subparagraph 1) or insurance money shall be excluded: <Amended by Presidential Decree No. 14999, May 13, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013; Presidential Decree No. 24574, Jun. 11, 2013>
1. Period from the date of the first insurance premium payment (hereafter referred to as “first payment date” in this Article) under a savings insurance contract with its total aggregate insurance premium for each insurance policyholder (referring to the sum of all savings insurance (excluding the savings insurance in subparagraphs 2 and 3) subscribed by policy holders) is maximum 200 million won to the date of maturity or early cancellation shall be at least ten years (excluding cases where receiving a partial payment of insurance premium paid before ten years elapse from the first payment date during the verified period, while the period from the first payment date to the date of maturity or early cancellation is over ten years);
2. Monthly installing savings insurance agreement which satisfies all of the following requirements:
(a) The period of time between the first payment date and the expiration date or early-termination date shall be at least ten years;
(b) A monthly installing agreement with its period of installment payment is at least five years from the first payment date;
(c) The standard insurance premium to be paid each month from the first payment date shall be evenly equal (including where the standard insurance premium is increased up to maximum 100% of the initially contracted standard insurance premium), and the period of pre-payment of the standard insurance premium shall be within six months;
3. Life-long pension insurance agreement which satisfies all of the following requirements:
(a) It shall be an insurance contract in which its policyholder receives insurance money/profit, etc. in the form of a pension from the time he/she reaches 55 years of age after expiration of the period of payment of insurance premium until his/her death;
(b) It shall be a contract which distributes insurance money/profit, etc. only in the form of a pension;
(c) It shall be that the insurance contract and its financial source for pension shall cease to exist upon occurrence of death (where the term of guarantee is not longer than the number of years of life expectancy (below decimal point will be cut off) of each gender/age shown on the statistical chart publicly notified, after approval thereof, by the Commissioner of the Statistics Korea pursuant to Article 18 of the Statistics Act and where the insurance policyholder dies within the concerned term of guarantee, referring to the time when the concerned term of guarantee terminates);
(d) It shall be that the contracting party, insured party and beneficiary of the insurance contract are the same, and early-termination of the insurance contract is prohibited from the time when the payment of the first pension money begins until the date of death;
4. Insurance money to be paid for the death, disease, injury and other bodily harm of the insured, or due to the loss or destruction of, or damage to his/her assets.
(2) "Insurance contracts" in paragraph (1) means any of the following contracts: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 16762, Mar. 28, 2000; Presidential Decree No. 17032, Dec. 29, 2000: Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19010, Aug. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 23987, Jul. 24, 2012; Presidential Decree No. 24356, Feb. 15, 2013; Presidential Decree No. 24574, Jun. 11, 2013>
1. Life insurance contracts or accident insurance contracts under 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; <by Presidential Decree No. 24356, Feb. 15, 2013>
(b) The National Federation of Fisheries Cooperatives and cooperatives under the Fisheries Cooperatives Act;
(c) Deleted; <by Presidential Decree No. 16664, Dec. 31, 1999>
(d) The National Credit Unions Federation of Korea under the Credit Unions Act;
(e) The Community Credit Cooperatives Federation under the Community Credit Cooperatives Act;
3. Postal insurance contracts under the Postal Savings and Insurance Act.
(3) When any of the following changes (with respect to any previous insurance agreement, limited to the change under subparagraph 3) is made as to the insurance agreement in paragraph (1) 1 and 2 and the insurance agreement entered into before February 15, 2013 (referring to the insurance agreement subject to application of the former provisions of Article 25 (1) pursuant to Article 35 of the Addenda of 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 insurance agreement concerned: <Added by Presidential Decree No. 24356, Feb. 15, 2013; Presidential Decree No. 24574, Jun. 11, 2013>
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.
(4) 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.
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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 by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
(2) An excess repayment pursuant to Article 16 (1) 10 of the Act shall be the amount calculated by deducting the amount of paid-in deductions from repayment received by a worker from workplace mutual-aid association according to its rules due to his/her retirement or withdrawal from office. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
(3) A profit from a non-business loan pursuant to 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/her temporary or incidental loan of money. <Added by Presidential Decree No. 22034, 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 by Presidential Decree No. 22580, Dec. 30, 2010>
(5) “Merged as prescribed by Presidential Decree” under Article 16 (1) 13 of the Act refers to the case where all of the following requirements are satisfied and being actually managed as if a single product is managed: <Added by Presidential Decree No. 23588, Feb. 2, 2012>
1. A transaction or conduct concerning the products directly developed/sold by a financial company, etc. which generate interest income (hereafter referred to as “product with interest” in this paragraph) and the derivatives contract of a financial company, etc. under Article 5 of the Financial Investment Services and Capital Markets Act must be made or done through the financial company, etc. concerned;
2. A derivative product must be the contract which transacts the money, etc. calculated on the basis of all or part of the principal amount and interest income of the product with interest (hereafter referred to as “interest income, etc.” in this paragraph), price, interest rate, index, or unit of the interest income, etc. or the index, etc. based on the said price, interest rate, index or unit;
3. A financial company, etc. under subparagraph 1 shall pay the interest income, etc. of the product with interest and the revenue generated from derivative products.
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Article 26-2 (Scope, etc. of Collective Investment Schemes)
(1) "Collective investment schemes prescribed by Presidential Decree" in Article 17 (1) 5 of the Act means a collective investment scheme meeting all the following requirements:
1. It shall be a collective investment scheme under 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 once or more each year from the date of establishment of the relevant collective investment scheme: Provided, That the distribution of any of the following profits may be reserved, and where a profit pursuant to 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) A profit calculated by changing a list of index or investing in derivatives by an exchange traded collective investment scheme pursuant to Article 234 of the Financial Investment Services and Capital Markets Act;
(b) A profit on valuation of a collective investment scheme valuated pursuant to Article 238 of the Financial Investment Services and Capital Markets Act;
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) When paragraph (1) applies, a collective investment scheme set up abroad shall be deemed a collective investment scheme even if it fails to meet the requirements referred to in the subparagraphs of paragraph (1). <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(3) Where a collective investment scheme fails to meet the requirements referred to in the subparagraphs of paragraph (1), it shall be taxed according to the following classification:
1. A profit from an investment trust, investment association or undisclosed investment under Article 9 (18) of the Financial Investment Services and Capital Markets Act shall be taxed, considering it a profit from trust, other than a collective investment scheme pursuant to Article 4 (2) of the Act;
2. A profit from an investment company, limited liability investment company, limited investment partnership, private equity fund (limited to cases where it is not governed by special taxation on a company in the same trade pursuant to Article 100-15 of the Restriction of Special Taxation Act) pursuant to Article 9 (18) of the Financial Investment Services and Capital Markets Act shall be taxed, considering it a dividend and distributed money referred to in Article 17 (1) 1 of the Act.
(4) Profits and losses from trade or valuation of securities falling under any of the following, which are securities directly acquired by a collective investment scheme or by investing in collective investment scheme under Article 9 (21) of the Financial Investment Services and Capital Markets Act, or exchange-traded derivatives under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "exchange-traded derivatives") shall not be included in profits from collective investment schemes pursuant to paragraph (1) (hereinafter referred to as "profits from collective investment schemes"): Provided, That this shall not apply to profits and losses from trade of stocks or investment certificates (limited to cases where he/she or it owns not less than 25/100 of the total number of stocks issued or the total amount of investment of a corporation which has issued stocks or investment certificates in the year in which the date of transfer arrives and during the five year period immediately preceding the year of the transfer, which are stocks listed on a stock market pursuant to Article 9 (13) of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "stock market") or investment certificates) which a nonresident or a foreign corporation has acquired through a private offering collective investment scheme pursuant to Article 249 of the Financial Investment Services and Capital Markets Act or a private offering specialized investment company which is not governed by special taxation on a company in the same trade pursuant to Article 100-15 of the Restriction of Special Taxation Act: <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
1. Securities listed on the stock market (excluding securities referred to in the following; hereafter the same shall apply in this paragraph):
(a) Bonds, etc. under Article 46 (1) of the Act;
(b) Stocks or beneficiary certificates of a foreign collective investment scheme established under foreign Acts and subordinate statutes;
2. Stocks or investment shares of a venture business under the Act on Special Measures for the Promotion of Venture Businesses;
3. Exchange-traded derivatives intended for securities referred to in subparagraph 1.
(5) Profits from trading collective investment securities under 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 by Presidential Decree No. 22580, Dec. 30, 2010>
1. Stocks or investment shares under Article 94 (1) 3 of the Act;
2. Stocks, etc. under Article 178-2 (2);
3. Collective investment securities of the collective investment scheme, designed to trace the changes in index based only on prices of stocks traded on the securities exchange as an exchange traded fund under Article 234 of the Financial Investment Services and Capital Markets Act;
4. Collective investment securities of collective investment scheme listed on a stock market under 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 one or more occasions 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) Deleted. <by Presidential Decree No. 24356, Feb. 15, 2013>
(8) 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 pursuant to Article 9 (19) of the Financial Investment Services and Capital Markets Act, which is not considered as a collective investment scheme pursuant to paragraph (1) even in cases where it meets all the requirements referred to in paragraph (1): <Amended by Presidential Decree No. 23588, 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 the related person of a resident 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/her spouse, lineal relation, brother and sister;
(b) Relationship in which one party owns directly or indirectly not less than 50/100 of stocks with voting right of the other party;
(c) Where a third party owns directly or indirectly not less than 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.
(9) Article 2 (2) of the Enforcement Decree of the Adjustment of International Taxes Act shall apply mutatis mutandis to the calculation of the indirect ownership ratio of stocks pursuant to paragraph (8) 1 (b) and (c).
(10) The method of calculation of the tax base on a profit from a collective investment scheme shall be prescribed by Ministerial Decree of Strategy and Finance.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 26-3 (Scope of Dividend Income)
(1) Distributed amount of profits from any of the following securities or certificates (including profits from the private loan under Article 469 (2) 3 of the Commercial Act) shall be included in dividend income under Article 17 (1) 9 of the Act: <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013; Presidential Decree No. 24574, Jun. 11, 2013>
1. Securities or certificates indicating a claim for payment of stock certificates or money (referring to money equivalent to the value of such stock certificates, securities or certificates) in connection with fluctuations in prices of specific stock certificates traded in the securities exchange or a foreign market similar thereto, or in numerical value of the price index of stocks;
2. Securities or certificates indicating a contractual right for making profits or evading losses according to predetermined methods in connection with fluctuations in the price, interest rate, index, unit of underlying assets under Article 4 (10) of the Financial Investment Services and Capital Markets Act, or numerical value of an index based thereon other than securities or certificates under subparagraph 1 (excluding securities or certificates indicating a right to make transactions of purchasing and selling stock certificates or giving and receiving money, only by the declaration of intention of one party concerned, according to predetermined methods in connection with fluctuations in prices of specific stock certificates traded on the securities exchange or a foreign market similar thereto or in numerical value of the price index of stocks):
(a) through (c) Deleted; <by Presidential Decree No. 24356, Feb. 15, 2013>
(2) 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 by Presidential Decree No. 22580, Dec. 30, 2010>
(3) “Merged as prescribed by Presidential Decree” under Article 17 (1) 10 of the Act refers to the case where all of the following requirements are satisfied and being actually managed as if a single product: <Added by Presidential Decree No. 23588, Feb. 2, 2012>
1. A transaction or conduct concerning the products directly developed/sold by a financial company, etc. which generate dividend income (hereafter referred to as “product with dividend” in this paragraph) and the derivatives contract of a financial company, etc. concerned must be made or done through the financial company, etc. concerned;
2. A derivative product must be the contract which transacts the money, etc. calculated on the basis of all or part of the principal amount and dividend income of the product with dividend (hereafter referred to as “dividend income, etc.” in this paragraph), price, interest rate, index, or unit of the dividend income, etc. or the index, etc. based on the said price, interest rate, index or unit;
3. A financial company, etc. under subparagraph 1 shall pay the dividend income, etc. of the product with dividend and the revenue generated from derivative products.
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 27 (Calculation of Deemed Dividends)
(1) In cases of deemed dividends under subparagraphs of Article 17 (2) of the Act, the value of property other than cash shall be based upon the amount calculated according to the following classifications: <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22185, Jun. 8, 2010>
1. Any of the following amount, if acquired assets are stocks or contributed shares (hereafter referred to as "stocks, etc." in this Article):
(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 satisfy the requirements referred to in Article 44 (2) 1 and 2 (excluding the part related to the possession of stocks, etc.) of the Corporate Tax Act and Article 46 (2) 1 and 2 (excluding the part related to the possession of stocks, etc.) of the same Act, the value of acquisition of stocks, etc. of a merged corporation, a divided corporation or the extinguished other party corporation of the division and merger (hereafter referred to as "merged corporation, etc." in this item): Provided, That 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 + Alloted number of new stocks, etc. per old stock or per unit of investment).
(3) In the calculation of 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 the 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" in this paragraph), it shall be deemed that short-term retired stocks have first been reduced or retired, and the acquisition value of such short-term retired stock 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 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 by Presidential Decree No. 24356, 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 as prescribed by Presidential Decree” under Article 17 (2) 2 (a) of the Act means the amount falling under each subparagraph of Article 17 (1) of the Corporate Tax Act: Provided, That the amount falling under any subparagraph of Article 12 (1) of the Enforcement Decree of the Corporate Tax Act shall be excluded therefrom. <Amended by Presidential Decree No. 23723, Apr. 13, 2012>
(5) In applying Article 17 (2) 2 (b) 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 the land under Article 13 (1) 1 of the Assets Revaluation Act shall be calculated by the following formula: <Added by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, 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 under paragraph (1) 1 (a) and (b) shall be the amount computed by dividing the equity capital of the corporation issuing such stocks by the total number of its issued and outstanding shares on the date falling under subparagraphs 4 and 5 of Article 46. <Added by Presidential Decree No. 17032, Dec. 29, 2000>
(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 under Article 38 (3) of the Act, 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, That this shall not apply where paragraph (3) is applicable and where the relevant stockholder establishes an amount other than the face value. <Added by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 27-2 (Scope of Reorganization of Corporations)
"Cases prescribed by Presidential Decree" in Article 17 (2) 3 (c) of the Act means the reorganization of a law firm into a law firm (with limited liability) pursuant to the Attorney-at-Law Act and the reorganization of a corporate customs broker into a customs brokerage firm pursuant to the Licensed Customs Broker Act.
[This Article Added by Presidential Decree No. 20618, Feb. 22, 2008]
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Article 27-3 (Corporations, etc. Exempted, etc. from Corporate Tax)
(1) "A corporation prescribed by Presidential Decree" in Article 17 (3) 4 of the Act means corporations falling under any of the following subparagraphs: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Corporations to which Article 51-2 of the Corporate Tax Act or Article 100-16 of the Restriction of Special Taxation Act apply;
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) 4 of the Act means a rate falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
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 (in cases 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 in cases 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
(3) "Dividend income prescribed by Presidential Decree" in the part other than the subparagraphs of Article 17 (3) of the Act means dividend income received from a private offering specialized investment company (only applicable to a company which does not fall under paragraph (1) 1) referred to in Article 9 (18) 7 of the Financial Investment Services and Capital Markets Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 16664, Dec. 31, 1999]
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Articles 28 through 30 Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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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/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/she shall plan products to be manufactured directly (including a plan, design, sample production, etc.);
2. He/she shall manufacture such products under his/her own name;
3. He/she shall take over such products and directly sell them under his/her own responsibility.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 32 (Scope of Easement, etc.)
"Rights prescribed by Presidential Decree, such as easement, etc." in the proviso to Article 19 (1) 12 of the Act means easement and superficies (including rights established on the basement or the air).
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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 by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 34 Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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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 Ministerial Decree of Strategy and Finance.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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 by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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/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, That where the relevant association or organization conducts a specific business, it shall be classified according to the details of its business.
(3) Repair business and other personal services under Article 19 (1) 18 of the Act shall include the personal service under subparagraph 1 of Article 35 of the Enforcement Decree of the Value-Added Tax Act. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17115, Jan. 29, 2001; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19010, Aug. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23987, Jul. 24, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Expenses paid in terms of confidential expenses (including expediency fund; 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 which are 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 or investment broker under the Financial Investment Services and Capital Markets Act;
5. Meal allowance, housing allowance, clothing allowance, and other salaries similar thereto;
6. Benefits gained from housing provided by an employer: Provided, That such cases are excluded for an executive who is not a stockholder nor a contributor (including an executive who is a minority stockholder among stockholders of a stock-listed corporation), an employee who is not an executive (including an employee of a non-profit corporation or private person) and a person who receives wage and salary income from the State or a local government receives such housing provided by his/her employer prescribed by Ministerial Decree of Strategy and Finance;
7. Benefits which an employee gains by borrowing money necessary for purchasing or renting housing (including the 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 (hereafter referred to as "insurance premiums, etc." in this subparagraph) 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/her spouse, or any other family member: Provided, That the following insurance premiums, etc. shall be excluded:
(a) Deleted; <by Presidential Decree No. 17032, Dec. 29, 2000>
(b) An amount of not more than 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");
(c) Deleted; <by Presidential Decree No. 24356, Feb. 15, 2013>
(d) Deleted; <by Presidential Decree No. 24356, Feb. 15, 2013>
(e) 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;
(f) Deleted; <by Presidential Decree No. 21310, 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 similar wages thereto;
15. Deleted; <by Presidential Decree No. 24356, 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 (referring to the difference between the market price at the time of exercising stock options and the actual purchase price, and stocks with preemptive rights to new stocks) gained by executives or employees of a corporation by exercising, while serving in the relevant corporation, etc., stock options granted from a relevant corporation or a related corporation Article 87 of the Enforcement Decree of the Corporate Tax Act with the said corporation (hereafter referred to as "relevant corporation, etc." in this subparagraph);
18. Deleted. <by Presidential Decree No. 20618, Feb. 22, 2008>
(2) In applying paragraph (1), the wages to be reserved for payment of retirement payment shall not be included in a salary income. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(3) A minority stockholder defined in the proviso to paragraph (1) 6 means a stockholder who owns stocks of the lesser of the amount equivalent to 1/100 of the total amount of stocks issued or the total amount of investment of the relevant corporation (hereafter referred to as "total amount of stocks issued, etc." in this Article) or 300 million won (referring to the total amount of the face value), excluding stockholders falling under any of the following subparagraphs: Provided, That in cases of a bank under the Banking Act, it refers to a stockholder who owns stocks less than the amount equivalent to 1/100 of the total amount of stocks issued, etc.: <Added by Presidential Decree No. 22034, Feb. 18, 2010>
1. A stockholder (excluding a stockholder who is the State or a local government) who owns stocks not less than 1/100 of the total amount of stocks issued, etc. of the relevant corporation, and the aggregate of whose stocks and those of his/her related party under Article 98 (1) accounts for the largest shares among the shareholders of the relevant corporation;
2. Related stockholders pursuant to Article 98 (1).
(4) Where a person falling under a minority stockholder pursuant to paragraph (3) becomes a stockholder whose total amount of the face value of stocks he/she owns is not less than 300 million won on account of capital increase of a corporation, he/she shall be deemed a minority stockholder from the date of such capital increase to the end of the year following the taxable period in which the date of capital increase falls: Provided, That this shall not apply to cases where the total amount of the face value of stocks such person owns is not less than 1/100 of the total amount of stocks issued, etc. by the relevant person after capital increase. <Added by Presidential Decree No. 22034, Feb. 18, 2010>
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Articles 39 Deleted. (by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 40 (Calculation of Public Pension Income)
(1) The 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 the 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 “base amount of taxation” in this Article) based on January 1, 2002, as a base date (hereafter referred to as “base date of taxation” in this Article and Article 42-2 (1)):
1. Out of the 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 Base Date of Taxation / 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 Base Date of Taxation / Number of months in which contributions are made
(2) Notwithstanding paragraph (1), where there exists the amount of contributions or personal share (applicable only to the amount identified in accordance with Article 201-10; hereinafter referred to as “contributions, etc. exempted from taxation”) paid without receiving the deduction of pension insurance premium under Article 51-3 of the Act after the base date of taxation, the public pension income shall be the amount obtained by deducting the contributions, etc. exempted from taxation from the base amount of taxation. In such cases, when the said contributions, etc. exempted from taxation exceeds the base amount of taxation in the taxable period concerned, the exceeded amount shall, from the next taxable period, be deducted from the base amount of taxation.
(3) In cases of returning the lump sum allowance under Article 22 (1) 1 of the Act (applicable only where retirement income tax is imposed, or in cases of non-taxable income) and receiving it in the form of a pension, the returned lump sum allowance shall be deemed as the contributions, etc. exempted from taxation.
(4) Where a person whose responsibility is to pay the 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 as 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 notified by the Minister of Health and Welfare.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 40-2 (Pension Account, Etc.)
(1) “Pension account prescribed by Presidential Decree” under the part other than the items of Article 20-3 (1) 2 of the Act means any of the following accounts:
1. An account established under the name of “pension savings” pursuant to the agreement concluded with any of the following financial institutions (hereinafter referred to as “pension savings account”):
(a) A trust agreement to be concluded with the 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 the investment brokers who were authorized pursuant to Article 12 of the Financial Investment Services and Capital Markets Act;
(c) An insurance agreement to be concluded with the institutions which handle the insurance agreement 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 the defined contribution retirement pension under subparagraph 9 of Article 2 of the Guarantee of Workers' Retirement Benefits Act;
(b) An account to be established in accordance with the individual retirement pension under subparagraph 10 of Article 2 of the Guarantee of Workers' Retirement Benefits Act;
(c) 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) A subscriber to a pension account may pay the pension insurance premium pursuant to Article 51-3 (1) 2 of the Act (hereinafter referred to as “pension insurance premium”) by satisfying the following requirements:
1. The subscriber must pay the amount of not more than 18 million won each year (where the subscriber has at least two pension accounts, referring to the aggregate amount of such accounts). In such cases, although he/she may not pay the pension insurance premium for any taxable period prior to the taxable period concerned, he/she may, in cases of an insurance agreement, pay the previous pension insurance premium before 26 months lapse from the last day of the month to which the final payment date belongs;
2. The subscriber must not pay the pension insurance premium after he/she begins receiving of the pension.
(3) “Withdrawal in the form of the pension prescribed by Presidential Decree” under Article 20-3 (1) 2 of the Act means the withdrawal from a pension account (hereinafter referred to as “receipt of pension”, and the withdrawal of money other than the form of receipt of pension shall be referred to as “receipt other than pension”) after satisfying all of the following requirements:
1. A subscriber must, after he/she reaches 55 years of age, file his/her application with the person in charge of the pension account for initiation of pension payment and then withdraw the pension money;
2. A subscriber must withdraw pension money after five years from the date of his/her subscription to the pension account: Provided, That this shall not apply where the amount of money pursuant to Article 20-3 (1) 2 (a) of the Act (including where a retirement income is withdrawn directly from the pension account; and hereinafter referred to as “deferred retirement income”) is in the pension account;
3. A subscriber must withdraw within the amount of money calculated in accordance with the below formula (hereinafter referred to as “limit of pension payment”) as at the date of initiation of taxable period (during the taxable period to which the date of initiation of pension payment belongs, referring to such date of initiation of pension payment):
[Amount of appraised value of pension account / (11 ? Number of Years of Receiving Pension)] × 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, That in any of the following cases, the year of initial pension payment shall be as follows:
1. In cases of the 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 Guarantee of Workers' Retirement Benefits Act 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/her death.
(5) The amount withdrawn from a pension account which exceeds the limit of pension payment shall be deemed the receipt other than pension.
(6) A person who intends to initiate receiving his/her pension money or to early-terminate a pension account shall submit his/her application therefor prescribed by Ministerial Decree of Strategy and Finance to a responsible pension account administrator; the pension account administrator shall submit details of disposition of the said application to the head of a tax office having jurisdiction over such matter by no later than the tenth day of the following month.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 40-3 (Order of Withdrawal, etc. from Pension Account)
(1) Where partial amount of money is withdrawn from a pension account concerned, the following amounts shall be deemed withdrawn in the following order:
1. Amount not falling under each item of Article 20-3 (1) 2 of the Act (hereinafter referred to as “tax-exempted amount”);
2. Deferred retirement income;
3. Other types of amount deposited in a pension account.
(2) The tax-exempted amount shall be deemed withdrawn in accordance with the following order: Provided, That subparagraph 3 shall be limited to the amount confirmed pursuant to Article 201-10 and deemed the tax-exempted amount from the date of such confirmation:
1. Pension insurance premium paid to the pension account concerned during the taxable period to which the date of withdrawal belongs;
2. Where, assuming only a pension account concerned exists, the amount of pension insurance premium paid to the pension account concerned exceeds the maximum amount of income deduction, such amount of excess;
3. Out of the pension insurance premium paid to the pension account concerned other than the amount under subparagraphs 1 and 2, any amount not deducted as an income deduction.
(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 receipt other than pension.
[This Article Wholly Amended by Presidential Decree No. 24356, Feb. 15, 2013]
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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 other pension account (hereafter referred to as “transferred account” in this Article), the amount transfer shall not be deemed withdrawal: Provided, That this shall not apply in any of the following cases:
1. Where a transferring of money takes place between a pension savings account and a retirement pension account;
2. Where the 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) Where the partial amount of money is transferred upon applying paragraph (1) (excluding the 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).
(3) Upon applying paragraph (1), this Decree shall apply to the date of subscription to the pension account and its related matters based on the transferred account as a standard therefor: Provided, That a pension account before transfer may be used as the aforementioned standard where a pension account is newly established and entire amount of money is transferred.
(4) 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 Ministerial Decree of Strategy and Finance.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 41 (Scope, etc. 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 the prices 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 by Presidential Decree No. 18705, 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 by Presidential Decree No. 19890, 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 fixed assets for business (referring to assets under Article 94 (1) 1 and 2 of the Act]. <Added by Presidential Decree No. 19890, Feb. 28, 2007>
(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/her status as a lessee of a store from which he/she has earned business income (excluding business income further specified by Ministerial Decree of Strategy and Finance). <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 19890, 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 by Presidential Decree No. 19890, Feb. 28, 2007>
(7) "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 by Presidential Decree No. 22034, Feb. 18, 2010>
(8) "Related person prescribed by Presidential Decree" in Article 21 (1) 13 of the Act means any of the following related persons: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. A related person defined in Article 98 (1) with whom the relevant resident is related;
2. A related person defined in Article 2 (1) of the Enforcement Decree of the Adjustment of International Taxes Act with whom the relevant nonresident is related;
3. A related person defined in Article 87 of the Enforcement Decree of the Corporate Tax Act with whom the relevant corporation is related.
(9) Economic profits under Article 21 (1) 13 of the Act shall be any of the following profits: <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
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.
(10) "Lump sum allowance received for the cancellation of 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 under Article 86-3 (4) of the Restriction of Special Taxation Act. <Added by Presidential Decree No. 22034, Feb. 18, 2010>
(11) In cases of services rendered under Article 21 (1) 19 (c) of the Act, where research management expenses are managed under university's own rules, research services performed by a professor shall be included. <Added by Presidential Decree No. 22580, Dec. 30, 2010>
(12) "Paintings and calligraphic works, and antiques prescribed by Presidential Decree" in Article 21 (1) 25 of the Act means any of the following whose value of transfer is not less than 60 million won per piece, item, or pair (referring to goods normally traded in pairs as those that two or more are used together): Provided, That works of an artist alive in the Republic of Korea as of the date of transfer shall be excluded: <Added by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Works falling under any of the following items from among paintings and calligraphic works, and curios:
(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) Curios (limited to those over 100 years after manufacturing);
2. Works prescribed by Ministerial Decree of Strategy and Finance after the Minister of Strategy and Finance 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 and calligraphic works, and curios under subparagraph 1.
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Article 42 (Special Cases, etc. for Determination of Receipt Other Than Pension concerning Deferred Retirement Income)
(1) Where the amount obtained by deducting the tax-exempted amount from the amount of received pension (where there are at least two pension accounts, referring to the aggregated amount thereof) exceeds the amount of pension income subject to separate taxation under Article 14 (3) 9 of the Act, the amount falling under deferred retirement income (the said exceeding amount shall be the limit) shall be deemed received as the receipt other than pension, notwithstanding Article 40-2 (3).
(2) With respect to the deferred retirement income deemed received as the receipt other than pension pursuant to paragraph (1), the amount obtained by deducting the tax amount which was already withheld at the time of receiving pension before being deemed received as the receipt other than pension from the amount of retirement income tax on the said deferred retirement income shall be reported/paid by applying mutatis mutandis Article 135. In such cases, the deferred retirement income tax on the portion of receipt other than pension concerned shall be deemed withheld pursuant to Article 202-2 (2).
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 42-2 (Scope of Retirement Income)
(1) The lump sum amount under Article 22 (1) 1 of the Act means the lesser amount among the following amounts. In such cases, where there exists the contributions, etc. exempted from taxation, it shall be the amount deducting the contributions, etc. exempted from taxation pursuant to Article 40 (2) and (3):
1. Aggregate amount of the contributions or personal allotment already paid after the tax base date (including the portion of user’s allotment; hereafter the same shall apply in this paragraph), and its interest plus additional interest charge;
2. Amount obtained by deducting the contributions or personal allotment already paid before the tax base date from the lump sum amount actually received.
(2) "Income prescribed by Presidential Decree" in Article 22 (1) 3 of the Act means any of the following amounts:
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, etc. of Construction Workers.
(3) “Executives prescribed by Presidential Decree” under the proviso to Article 22 (3) of the Act other than its calculation formula means the person engaging in the affairs under any of the items in Article 20 (1) 4 of the Enforcement Decree of the Corporate Tax Act.
[This Article Wholly Amended by Presidential Decree No. 24356, Feb. 15, 2013]
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Articles 43 (Special Cases concerning Determination of Retirement)
(1) Upon applying Article 22 (1) 2 of the Act, where any of the following causes occurs and a person did not actually receive any retirement payment due to occurrence of such cause, it may not be deemed as retirement:
1. Where an employee becomes an executive;
2. Where there occurs a change of organization such as merger/acquisition, a business transfer or a transfer to a corporation having direct/indirect investment relationship;
3. Where a standing executive of a corporation becomes a non-standing executive.
(2) Where a person has received his/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 when he/she received such retirement payment:
1. Where falling under any of the subparagraphs of Article 3 (1) of the Enforcement Decree of the Guarantee of Workers' Retirement Benefits Act;
2. Where a corporation’s director transfers his/her salary to the annual salary system on the condition that he/she does not receive a retirement payment thereafter;
3. Where a retirement pension system is abolished pursuant to Article 38 of the Guarantee of Workers' Retirement Benefits Act.
[This Article Wholly Amended by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 44 Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
Section 3 Date of Receipt of Total Amount of Income
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Article 45 (Date of Receipt of Interest Income)
The date of receipt of interest income shall be any of the following dates: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Interest and discounted value under Article 16 (1) 12 and 13 of the Act: The date of redemption under agreement: Provided, That 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 of receipt of such payments;
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;
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, in cases where the interest is paid due to the termination of the accounts;
(d) The date of extension, in cases 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 on which 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; <by Presidential Decree No. 19890, 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 pursuant to the agreement: Provided, That in cases 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, That in cases where the insurance is terminated before its maturity, its termination date shall be applied;
9. Refund of the excess amount by an workplace mutual-aid association:
The date of payment of the refund money of the mutual-aid association pursuant to the agreement;
9-2. Profits of non-business loans:
The date of payment of the interest pursuant to the agreement: Provided, That in cases where there is no agreement as to the interest payment date, or where the interest is paid before the date of payment pursuant to 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 possession period of 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.
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Article 46 (Date of Receipt of Dividend Income)
The date of receipt of dividend income shall be any of the following dates: <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Profits or dividends of bearer securities:
The date of receipt of the said payment;
2. Dividends derived from the disposal of surplus funds:
The resolution date for the disposal of surplus funds at the relevant corporation;
3. Deleted; <by Presidential Decree No. 24356, 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 of receipt of the said payment;
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, That 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. Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 47 Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 48 (Date of Receipt of Business Income)
The date of receipt of business income shall be any of the following dates: <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Sale of commodities (excluding real estate in cases of building construction business and real estate development and supplying business), products or other manufactured goods (hereinafter referred to as "commodities, etc."):
The date on which commodities, etc. are delivered;
2. Approval sales of commodities, etc.:
The date on which the other party expresses his/her intention to purchase: Provided, That in cases where such sale is settled by special contract or custom, unless he/she returns the goods or expresses his/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 on which the consignee sells the consigned goods;
4. Sale of commodities, etc. under a long-term installment plan prescribed by Ministerial Decree of Strategy and Finance:
The date of delivery of the commodities, etc.: Provided, That 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 in cases 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, That if the contract period is one or more years, and it is determined by Ministerial Decree of Strategy and Finance, the work progress rate as determined by the same Ordinance (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 same Ordinance, the work progress rate may serve as a standard;
6. Deleted; <by Presidential Decree No. 15969, 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 on which the supply of services has been completed, whichever comes first: Provided, That 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, in cases 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 in cases 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; <by Presidential Decree No. 15969, Dec. 31, 1998>
10. Discount of bill:
The date a decision, reconciliation, etc. is made: Provided, That in cases of contestation on a rent, with regard to the amount deposited to pay off such rent, the date specified in item (a);
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. In cases of income generated from leasing of assets, the following dates: Such fixed date; The date such payment is received;
(a) Income, the date of payment of which is fixed by agreement or custom:
(b) Income, the date of payment of which is not fixed by agreement or custom:
(c) The amount equivalent to a rent corresponding to the period already passed (including interest in arrear and other compensation for damage) which the owner, etc. is to receive by decision, reconciliation, etc. on contestation on a lease contract (excluding contestation on demand for a rent unpaid):
The expiration date of such bill: Provided, That when such bill is transferred before its expiry, the date of such transfer shall be applied;
11. Sale and purchase of assets which do not fall under subparagraphs 1 through 10 and 10-2 through 10-4:
The date on which the purchase price is fully paid: Provided, That 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.
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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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Salary:
The date on which one's labor is provided;
2. Bonuses derived from the disposal of surplus funds:
The date on which the disposal of surplus funds is decided;
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, That in cases of the actual receipt amount paid before such fixed date, such date of receipt shall be applied.
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Article 50 (Date of Receipt of Other Income, etc.)
(1) The date of receipt of other income shall be any of the following dates: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Other income under Article 21 (1) 7 of the Act (excluding other income from leasing an asset or rights):
The date on which payment is settled, the date on which the asset is delivered, the date on which the asset is utilized, or the date on which the asset makes a profit, whichever occurs first: Provided, That 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 under Article 21 (1) 10 of the Act:
The date on which breach or rescission of the contract for other income is fixed;
2. Other income under 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 pursuant to Article 21 (1) 21 of the Act:
The date of receipt other than pension;
4. Other incomes in addition to the above:
The date on which the payment is received.
(2) The date of receipt of retirement income shall be the date of retirement; provided,, among Article 22 (1) 1 of the Act, in cases of the lump sum under the National Pension Act and the retirement mutual aid under Article 42-2 (2) 3, it shall be the date of receipt of income. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(3) and (4) Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
(5) The date of receipt of pension income shall be the date as classified in the following: <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
1. Public pension income: The date as agreed to receive pension pursuant to the public pension-related Acts (hereinafter referred to as “public pension-related Acts”) in accordance with subparagraph 4 (a) of Article 12 of the Act;
2. Pension income pursuant to Article 20-3 (1) 2 of the Act: The date of receipt of pension;
3. Other pension income: The date on which the pension payment concerned is received.
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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 by Presidential Decree No. 21301, Feb. 4, 2009]
Section 4 Calculation of Income
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Article 51 (Calculation of Amount of Gross Income)
(1) and (2) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(3) The total amount of business income shall be calculated as follows: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19010, Aug. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 23987, Jul. 24, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. The total amount of income of advance rents received for leasing of real estate 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 Ministerial Decree of Strategy and Finance;
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, That 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 in cases where no payment term is stipulated therein);
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, That this shall not apply to cases of Article 26 (2) of the Act;
4-2. The following profits, dividends of gains or insurance marginal profits shall, notwithstanding the character of such income, be included in the total amount of income:
(a) Deleted; <by Presidential Decree No. 24356, Feb. 15, 2013>
(b) Deleted; <by Presidential Decree No. 24356, 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 total amount of income;
5. The amount of income related to businesses other than those under subparagraphs 1, 1-2, 1-3, 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 total amount of income.
(4) Deleted. <by Presidential Decree No. 22034, 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
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 cases 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 Ministerial Decree of Strategy and Finance.
(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 the total income from profits made from a non-business loan under Article 16 (1) 11 of the Act, if the whole or part of the principal and interest is irrecoverable from the debtor or a third party because the relevant non-business loan falls under bonds pursuant to Article 19-2 (1) 8 of the Enforcement Decree of the Corporate Tax Act before a final return on tax base under Article 70 of the Act or determination or correction of tax base and the amount of tax under Article 80 of the Act, the total amount of income shall be calculated by subtracting the principal first from the amount recovered. In such cases, if such amount recovered is short of the principal, the amount of gross income shall be deemed nonexistent. <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
(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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 24356, 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 by Presidential Decree No. 19890, Feb. 28, 2007>
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Article 52 Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
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Article 53 (Special Cases concerning Calculation of Gross Amount of Income)
(1) and (2) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(3) The amount to be included in the total amount of income pursuant to the main sentence 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 by Presidential Decree No. 22034, Feb. 18, 2010>
1. In cases of lease of a house and land annexed thereto (excluding cases leasing land annexed 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 in order)} × 60/100 × 1/365 (366 in cases of a leap year) × Interest rate prescribed by Ministerial Decree of Strategy and Finance in view of the interest rate of fixed deposit of a financial company, etc. (hereafter referred to as "interest rate of a fixed deposit" in this Article) － The total amount of interest earned, discount fees and dividends generated from the relevant rental business in the relevant taxable period;
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 by Presidential Decree No. 22034, Feb. 18, 2010>
1. In cases of lease of a house and land annexed thereto (excluding cases leasing land annexed 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 by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
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 Ministerial Decree of Strategy and Finance;
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 Ministerial Decree of Strategy and Finance (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 by Presidential Decree No. 17456, 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 by Presidential Decree No. 24356, 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 annexed thereto and the calculation of the number of houses. <Added by Presidential Decree No. 22034, 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 by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 54 (Exclusion from Total Amount of Income)
(1) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 22034, Feb. 18, 2010>
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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 shall be as prescribed in the following except as otherwise prescribed in the Act and this Decree: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010: Presidential Decree No. 22075, Mar. 15, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 23356, Dec. 8, 2011; Presidential Decree No. 24356, Feb. 15, 2013>
1. Purchase price (excluding a reduction of purchase or a purchase discount) of the raw materials for commodities or products sold and the 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 bounty and sales benefit, including cases 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 a forestry business:
(a) Purchase expenses for seeds, seedlings and fertilizers;
(b) Expenses for afforestation;
(c) Management expenses;
(d) Expenses for deforestation;
(e) Equipment expenses;
(f) Improvement expenses;
(g) Expenses for selling forest trees;
4. Expenses for the sericultural industry:
(a) Purchase expenses;
(b) Breeding expenses;
(c) Management expenses;
(d) Equipment expenses;
(e) Improvement expenses;
(f) Sale expenses;
5. Expenses for livestock and poultry:
(a) Expenses for hatchery eggs;
(b) Delivery expenses;
(c) Breeding expenses;
(d) Equipment expenses;
(e) Improvement expenses;
(f) Sales expenses;
6. Employees'salaries;
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;
8. Taxes and public charges related to business:
9. Deleted; <by Presidential Decree No. 22034, Feb. 18, 2010>
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, etc. of Construction Workers;
10-2. Charges which an employer defrays under the Guarantee of Workers' Retirement Benefits Act;
11. Insurance premiums or charges which an employer defrays under the National Health Insurance Act, the Employment Insurance Act and the Long-Term Care Insurance for the Aged Act;
11-2. Insurance premiums of an employer himself, which are defrayed as an employment-provided policyholder under the National Health Insurance Act and the Long-Term Care Insurance for the Aged Act;
11-3. Insurance premiums borne as a regional insured under the National Health Insurance Act and the Long-Term Care Insurance for the Aged 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 fixed assets for business;
15. Appraisal losses on assets;
16. Bad debt (including those which have not been subjected to a bad debt tax credit under Article 17-2 of the Value-Added Tax Act from among the accrued receivables of the output tax of the value-added tax which are irrecoverable);
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 to employees to cover expenses for at-work sports, entertainment, support for family planning or 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; <by Presidential Decree No. 20618, Feb. 22, 2008>
25. Expenses (in cases of goods (excluding goods under five thousand won per piece) donated to a specific person, limited to an amount not exceeding 30 thousand 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 corresponding to the relevant gross amount of income, which are of such nature as are similar to the expenses under subparagraphs 1 through 26.
(2) Bad debts under paragraph (1) 16 shall be those under any of Article 19-2 (1) 1 through 11 of the Enforcement Decree of the Corporate Tax. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(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 amount under each of the following from the estimated amount pursuant to Article 57 (2); and where two or more charges exist, a charge of the retirement pension whose subscription agreement was first concluded shall first be included in the necessary expenses: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 23987, Jul. 24, 2012; Presidential Decree No. 24356, 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 preceeding 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 Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
(5) Where a business operator who has included charges under paragraph (3) in necessary expenses falls under any of the following, 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 by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22580, Dec. 30, 2010 Presidential Decree No. 23987, Jul. 24, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Deleted; <by Presidential Decree No. 24356, 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; <by Presidential Decree No. 24356, Feb. 15, 2013>
4. Where the reserves revert to an employer under each subparagraph of Article 24 of the Enforcement Decree of the Guarantee of Workers' Retirement Benefits Act: Relevant reserves.
(6) Where a resident who conducts food manufacturing business and beverage manufacturing business, wholesale and retail business among manufacturing industries under the Korea Standard Industry Code donates without compensation the surplus food generated in the relevant business to a business operator pursuant to Article 2 of the Vitalization of Food Contributions Act or a person who is appointed by such business operator, the book value of such surplus food donated shall be included in necessary expenses. In such cases, such amount shall not be included in donations under Article 79 (1) 1. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) Bad debts under paragraph (2) shall be necessary expenses for the taxable period in which any of the dates prescribed by subparagraphs of Article 19-2 (3) of the Enforcement Decree of the Corporate Tax Act. <Added by Presidential Decree No. 22580, Dec. 30, 2010>
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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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 22034, Feb. 18, 2010>
(2) The credit balance under paragraph (1) shall be that falling under any of the following subparagraphs: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
1. Uncollected balance of the sale price of commodities and products, and uncollected balance of processing fees and service charges;
2. Uncollected balance of the claims accruing from normal business trades, and of the output tax of value-added tax, and those determined by Ministerial Decree of Strategy and Finance.
(3) The actual ratio of bad debts under paragraph (1) shall be the ratio calculated as follows:
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 by Presidential Decree No. 22034, 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 by Presidential Decree No. 22034, 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 Ministerial Decree of Strategy and Finance attached thereto to the head of a tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) Matters necessary for the calculation of the allowance for bad debts other than those under paragraphs (1) through (6) shall be determined by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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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 by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, 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 by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, 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. <by Presidential Decree No. 24356, 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/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 by Presidential Decree No. 22580, 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 Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
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Article 58 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 59 (Calculation of Gain on Insurance Claim for Acquisition of Fixed Assets as Necessary Expenses)
(1) The gains from insurance claim to be included in necessary expenses under Article 31 (1) of the Act shall be appropriated for the temporary depreciation reserve.
(2) "Fixed assets of the same kind" in Article 31 (1) of the Act means those same as the fixed assets whose usage or purpose is extinguished. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) The depreciation cost of fixed assets acquired by gains from insurance claim shall be offset for the temporary depreciation reserve within the limit of the temporary depreciation reserve under paragraph (1).
(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 Ministerial Decree of Strategy and Finance to the head of competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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Article 60 (Calculation of National Subsidies for Acquisition of Fixed Assets 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 fixed 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:
1. Assets to be depreciated: Temporary depreciation reserves;
2. Other assets: Advanced depreciation reserves.
(2) The depreciation cost of fixed 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, That 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 by Presidential Decree No. 24356, Feb. 15, 2013>
(3) Any business operator who intends to be governed by Article 32 (2) of the Act shall submit a final return on tax base, along with plans for the use of national subsidies determined by Ministerial Decree of Strategy and Finance, to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(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 by Presidential Decree No. 20618, 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.
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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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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 Ministerial Decree of Strategy and Finance.
(2) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 62 (Calculation of Depreciation Costs as Necessary Expenses)
(1) In cases where the depreciation costs of fixed assets for business (excluding invested assets) are appropriated to necessary expenses, the depreciation cost 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 fixed 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 assets subject to depreciation 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 by Presidential Decree No. 17032, Dec. 29, 2000>
(2) "Fixed assets for business" in paragraph (1) means assets used directly for the said business, and which fall under any of the following subparagraphs (excluding assets, the value of which does not decrease over time; hereinafter referred to as "depreciable assets"): <Amended by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 18903, Jun. 30, 2005>
1. Tangible fixed assets falling under any of the following items:
(a) Buildings (including appurtenant facilities) and structures (hereinafter referred to as "structures");
(b) Vehicles and transportation equipment, tools, instruments and furnishings;
(c) Ships and aircraft;
(d) Machines and apparatuses;
(e) Animals and plants;
(f) Tangible fixed assets similar to items (a) through (e);
2. Intangible fixed assets falling under any of the following items:
(a) Goodwill, design right, utility model right, trademark right;
(b) Patent right, fishing 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;
(d) Rights to use dam;
(e) Deleted; <by Presidential Decree No. 17825, 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 Act on the Support of the Industrial Technology Research Cooperatives 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 105-2 of the Aviation Act.
(3) In applying the provisions of paragraph (1), fixed 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 by Presidential Decree No. 18705, Feb. 19, 2005>
(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 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 by Presidential Decree No. 22034, 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, in cases 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(6) The approved short-fall amount cannot be appropriated to the disapproved amount of depreciation during the taxable period thereafter.
(7) In applying the provisions of 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 such amount as computed 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 by Presidential Decree No. 17032, Dec. 29, 2000>
(8) In cases 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 by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 63 (Useful Life and Depreciation Rate)
(1) Useful life of a depreciable asset, and the depreciation rate according to the relevant useful life shall be as any of the following subparagraphs: <Amended by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 20720, Feb. 29, 2008>
1. Assets for laboratory tests determined by Ministerial Decree of Strategy and Finance and intangible fixed assets under Article 62 (2) 2 (a) through (d): Useful life determined by Ministerial Decree of Strategy and Finance, and the consequential depreciation rate by depreciation method determined by Ministerial Decree of Strategy and Finance (hereinafter referred to as "depreciation rate");
2. Depreciable assets (excluding intangible fixed assets under Article 62 (2) 2 (f) through (h)) other than assets subject to subparagraph 1: Useful life as reported by a business 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 Ministerial Decree of Strategy and Finance (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 Ministerial Decree of Strategy and Finance 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 make a report within the reporting term under any of the subparagraphs of paragraph (2)).
(2) A report (including a report through the Home Tax Service) on the useful life under paragraph (1) shall be made on the form of report on useful life determined by Ministerial Decree of Strategy and Finance to the head of the competent tax office by not later than the term of final return on tax base of the gross income tax in the taxable period in which any of the following dates falls: <Amended by Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008>
1. In cases of a business operator who commences a new business, the commencement date of such business;
2. In cases where a business operator, other than those under subparagraph 1, newly acquires a depreciable asset whose the standard useful life by classification of asset or business type are different, or commences a business of a new type, the date of such acquisition or the commencement date of the said business.
(3) Reported useful life or standard useful life which a business operator applies by asset or by each type of business pursuant to paragraph (1) shall also continue to apply in the taxable period thereafter. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(4) Useful life under paragraphs (1) 2 and (2) shall be reported by the year. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 15969, Dec. 31, 1998]
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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 scope of useful life or change useful life which he/she has applied, with approval of the commissioner of the competent regional tax office having jurisdiction over the place for tax payment by each place of business, by adding or subtracting 50/100 of the standard useful life to or from the standard useful life: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. In cases where the assets are remarkably corroded, abraded or damaged due to the geographical and environmental peculiarities of the location of business place;
2. As a business operator in whose case three years have passed after the commencement of his/her business, where the operating rate prescribed by Ministerial Decree of Strategy and Finance (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. In cases 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. In cases where the 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 therof pursuant to paragraph (1), he/she shall file an application for approval for (change of) useful life (including submission by the Home Tax Service) prescribed by Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(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 when three months have passed from the date of receipt of the application). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(4) In cases 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/she shall do so only after three years have elapsed from the expiration of taxable period whereto the previouslychanged useful life have been applied for the first time.
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 63-3 (Useful Life of Used Assets)
(1) Where a business operator acquires an asset determined by Ministerial Decree of Strategy and Finance whose standard useful life have partially or fully elapsed (hereafter referred to as "used assets" in this Article), he/she may have such useful life as selected and reported by him/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 by Presidential Decree No. 20720, Feb. 29, 2008>
(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 by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 64 (Report on Depreciation Methods)
(1) The depreciation amount for an individual depreciable asset shall be computed by a depreciation method reported by a business operator to the head of the competent tax office having jurisdiction over the place for tax payment from among the depreciation methods under the classifications indicated in the following subparagraphs: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005>
1. Structures and intangible fixed assets (excluding assets under subparagraphs 3 and 6 through 8): Straight line method;
2. Tangible fixed assets other than structures (excluding assets under subparagraph 4): Declining balance method or straight line method;
3. Mining right (including gathering rights under the Submarine Mineral Resources Development Act): Units of production method or straight line method;
4. Tangible fixed assets for mining industry: Units of production method, declining balance method or straight line method;
5. Deleted; <by Presidential Decree No. 17825, 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.
(2) When a business operator intends to report on a depreciation method under paragraph (1), he/she shall submit a written report on depreciation methods determined by Ministerial Decree of Strategy and Finance (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, 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 by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008>
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 in subparagraph 1, newly acquires fixed assets with classification different from each subparagraph of paragraph (1), the date of such acquisition.
(3) The depreciation method which has been reported by a business operator under paragraph (1) (in cases where failed to file a report on the depreciation methods, referring to the depreciation methods under paragraph (4) 1 through 5) shall be applied continuously throughout subsequent taxable periods. <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001>
(4) Where a business operator has failed to make a report under paragraph (1), the scope of depreciation for the relevant depreciable assets shall be computed under the depreciation methods falling under any of the following subparagraphs: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002>
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 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 is available for sale or use;
5. With respect to assets under paragraph (1) 7 and 8, the method under the said subparagraph;
6. Deleted. <by Presidential Decree No. 17825, Dec. 30, 2002>
(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 by Presidential Decree No. 17825, Dec. 30, 2002>
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Article 65 (Changes in Depreciation Methods)
(1) Where a business operator falls under any of the following subparagraphs, he/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 the provisions of Article 64 (3): <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005>
1. When he/she operates a business jointly with another business operator with a different depreciation method;
2. When he/she takes over or succeeds to the business of another business operator with a different depreciation method;
3. When a foreign investor takes over or possess 20/100 or more of the total shares under the Foreign Investment Promotion Act;
4. When he/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 intends to obtain approval under paragraph (1) shall submit a written application for change of the depreciation method prescribed by Ministerial Decree of Strategy and Finance (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 by not later than three months before the end of the first taxable period whereto he/she intends to apply the depreciation method to be changed. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(3) The head of the competent tax office having jurisdiction over the place for tax payment, in receipt of a written application under paragraph (2), shall determine as to whether approval is to be granted and notify the applicant thereof by not later than the expiry of the taxable period in which the acceptance date of application falls. <Added by Presidential Decree No. 15969, Dec. 31, 1998>
(4) When the head of the competent tax office having jurisdiction over the place for tax payment intends to grant approval for the change of depreciation method due to the causes under paragraph (1) 4, he/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), the provisions of 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005>
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Article 66 (Definition of Declining Balance Method, Straight Line Method, etc.)
The terms used in Article 64 shall be defined as follows: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
1. "Declining balance method" means a depreciation method where the scope of depreciation in each taxable period is calculated by multiplying the balance obtained by deducting the amount already appropriated to necessary expenses as depreciation costs from the acquisition value of relevant depreciable assets, by the depreciation rate according to the useful life of relevant assets, diminish 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 the scope of depreciation amount in each taxable period is computed by multiplying the amount obtained by dividing the acquisition value of relevant depreciable assets by the total expected amount to be mined from a mining area to which such asset belongs, by the amount mined from such mining area during the relevant taxable period.
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Article 67 (Legal Fiction of Immediate 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 by Presidential Decree No. 15969, 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 by Presidential Decree No. 15969, Dec. 31, 1998>
1. Remodeling to change the original use thereof;
2. Installment of elevators or apparatuses for heating and cooling;
3. Installment of emergency exits in buildings, etc.;
4. Restoration of those which have lost the usefulness of original purposes of the relevant assets because buildings, machines and facilities, etc. have been damaged or lost due to disasters, etc.;
5. Others similar to those under 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, 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 24356, Feb. 15, 2013>
1. Where the amount disbursed as repair cost by individual asset is less than three 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, That this shall not apply to any of the following cases: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 22034, 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 by Presidential Decree No. 15969, Dec. 31, 1998>
(6) Where a part of production facilities is scrapped due to the renewal of facilities or underdeveloped technology, the difference between the book value and the disposition value of such assets may be included in necessary expenses in the relevant taxable period. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) Notwithstanding paragraph (4), with respect to the properties falling under any of the following, only those which have been 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 by Presidential Decree No. 4860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 22580, Dec. 30, 2010>
1. Fishing gear used for fisheries (including implements for fishing boats);
2. Motion picture films, tools (including metal molds), 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).
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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/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 by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Any business operator who has failed to appropriate the depreciation cost on depreciable assets for necessary expenses pursuant to paragraph (1), 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, That 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
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Article 69 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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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 by Presidential Decree No. 15969, Dec. 31, 1998>
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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, That 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 22034, Feb. 18, 2010>
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Article 72 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 22034, Feb. 18, 2010>
(2) through (4) Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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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/she shall prepare and retain specification on the adjustment of depreciation costs determined by Ministerial Decree of Strategy and Finance 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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) Matters necessary for the calculation of depreciation costs of depreciable assets shall be determined by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 74 (Inclusion of VAT Input Tax in Necessary Expenses)
"Amount of tax in cases prescribed by Presidential Decree" in Article 33 (1) 9 of the Act means the amount of tax falling under any of the following: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Amount of input tax under Article 17 (2) 4 of the Value-Added Tax Act (excluding the amount of tax falling under capital expenditure pursuant to Article 67 (2));
1-2. Input tax pursuant to Article 17 (2) 5 of the Value-Added Tax Act;
2. Other input tax determined by Ministerial Decree of Strategy and Finance proved as payable by the relevant business operator.
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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 fixed assets) used for the purchase, manufacturing or construction (hereafter referred to as "construction" in this Article) of fixed assets for the relevant business regardless of the pretexts, or means expenditures similar to such payments. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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 Ministerial Decree of Strategy and Finance (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, That 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 by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(3) In cases where a part of borrowed construction funds are 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 by Presidential Decree No. 22034, 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 by Presidential Decree No. 22034, 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 by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 76 (Interest on Loan, Creditor of which is Obscure)
"Interest on any loan, 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, That 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 by Presidential Decree No. 15969, Dec. 31, 1998>
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/her financial ability and property status;
3. Loan for which the details of financial transactions with the creditor and its contents are obscure.
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Article 77 Deleted. <by Presidential Decree No. 17032, Dec. 29, 2000>
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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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
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/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/her business, and mainly used by other persons (excluding his/her employees);
3. The interest paid on the amount borrowed by a business operator for acquiring assets not connected to his/her proper business;
4. Entertainment expenses paid by a business operator without any connection to his/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 Commercial 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 Ministerial Decree of Strategy and Finance.
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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 by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 79 (Scope of Donations)
(1) Donations under Article 34 of the Act shall include any of the following amounts: <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
1. The value of donated property which a business operator has given free to a person who is not in special relations under Article 98 (1), with no direct connection to his/her business;
2. The amount deemed to have been substantially donated out of such differences as are caused by 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 at a price higher than normal from him/her, 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.
(2) Donations under Article 24 (2) 1 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 by Presidential Decree No. 22580, Dec. 30, 2010>
(3) Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
(4) In applying Article 34 (3) of the Act, the amount of designated donation under paragraph (1) of the same Article (hereinafter referred to as "designated donation") which exceeds the ceiling of appropriation to necessary expenses, shall be appropriated to necessary expenses within the scope of the short-fall only when the designated and legal donation disbursed in each taxable period falls short of the ceiling of appropriation to necessary expenses under paragraphs (1) and (2) of the same Article in each taxable period carried over. <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 24356, Feb. 15, 2013>
(5) When a business operator disburses designated and legal donation, he/she shall submit a final return on tax base along with a detailed statement of donations determined by Ministerial Decree of Strategy and Finance to the head of the competent tax office. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
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Article 79-2 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 80 (Scope of Designated Donations)
(1) "Donation prescribed by Presidential Decree" in the part other than the subparagraphs of Article 34 (1) of the Act means any of the following donations: <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010: Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24441, Mar. 23, 2013>
1. Donations falling under each subparagraph of Article 36 (1) of the Enforcement Decree of the Corporate Tax Act;
2. Any of the following membership fees:
(a) Membership fees paid by a person who has joined a trade union established under the Trade Union and Labor Relations Adjustment Act or the Act on the Establishment and Operation of Teachers' Unions;
(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) Membership fees paid by a person who has joined a trade union established under the Act on the Establishment and Operation of Public Officials' Unions;
3. The amount trusted in a trust which meets all of the following requirements, established by a resident on condition that the trusted properties of the trustor shall be donated to public-service corporations, etc. under Article 16 (1) of the Inheritance Tax and Gift Tax Act due to the death of trustor or the end of the trust contract agreed:
(a) It shall be established by a resident on condition that the trusted properties of the trustor shall be donated to public-service 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) It shall be specified in contract terms that a contract shall not be canceled, or a principal shall not be partially returned after a trust is established;
(c) A trustor and a public-service corporation, etc. under item (a) shall not be related, as prescribed by subparagraph 13 of Article 20 of the Enforcement Decree of the Framework Act on National Taxes;
(d) Trust shall be established in money;
4. Deleted; <by Presidential Decree No. 22034, Feb. 18, 2010>
5. Donations for non-profit organizations registered under the Assistance for Non-profit Non-Governmental Organizations Act satisfying all the following requirements and designated by the Minister of Strategy and Finance with the recommendation of the Minister of Security and Public Administration (hereafter referred to as "private organizations eligible for donations" in this Article): Provided, That the donations granted to private organizations eligible for donations shall be only applicable to donations granted for five years from January 1 of the taxable period in which the designation date falls:
(a) In cases of dissolution, remaining property shall revert to the State, a local government or an organization having similar purposes;
(b) The ratio of membership fees and donations from individuals to income (excluding subsidies received from the State or a local government) shall exceed the ratio prescribed by Ministerial Decree of Strategy and Finance;
(c) Income shall be used for the public interest, not for the interest of the members such as mutual friendship, and the direct beneficiaries of project shall be many and unspecified;
(d) Income, such as membership fees, donations, etc. has been managed in a bankbook in the name of the non-profit organization for one or more year retrospectively from the last day of taxable period which is immediately prior to the taxable period intended for designation;
(e) It shall agree to disclosing statements of accounts by taxable period;
(f) It shall be stated in the articles of association that the Internet homepage is opened as of the date of recommendation of the Minister of Security and Public Administration, and the collection of donations a year and the actual results of practical use thereof will be disclosed by March 31 each year on the Internet homepage;
(g) It shall not engage in any election campaign under Article 58 (1) of the Public Official Election Act on behalf of a particular political party or individual under the name of the private organization eligible for donations or its representative person;
6. Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(2) The Minister of Strategy and Finance may, if a private organization eligible for donations under paragraph (1) 5 falls under any of the following, revoke the designation thereof. In such cases, he/she shall provide an opportunity to the relevant organization to submit an opinion in advance: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24441, Mar. 23, 2013>
1. If the Commissioner of the National Tax Service requests to revoke the designation of a private organization eligible for donations because the inheritance tax or gift tax is additionally imposed on the organization pursuant to Article 48 (2) and (3) of the Inheritance Tax and Gift Tax Act;
2. If the head of the competent administrative authority (including the Minister of Security and Public Administration) notifies the Minister of Strategy and Finance of an act committed by a private organization eligible for donations in violation of public purposes, such as engaging in any business in deviation from its business purposes or violating the terms and conditions of the permission for its establishment;
3. Where it 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 it violates the requirements referred to in the items of paragraph (1) 5;
5. through 7. Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(3) Private organizations eligible for donations shall submit a statement of accounts of the relevant taxable period to the Minister of Security and Public Administration within three months from the end of the relevant taxable period. <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 24441, Mar. 23, 2013>
(4) When the Minster of Security and Public Administration has received a statement of accounts pursuant to paragraph (3), he/she may reveal the following matters: <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 24441, Mar. 23, 2013>
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) Private organizations eligible for donations shall submit a statement of income prescribed by Ministerial Decree of Strategy and Finance to the Minister of Strategy and Finance within three months from the end of the relevant taxable period. <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
(6) An organization whose designation has been revoked pursuant to paragraph (2) may be re-designated after a lapse of five years from the date of revocation. <Added by Presidential Decree No. 20618, Feb. 22, 2008>
(7) Necessary matters, such as the procedures for designating private organizations eligible for donations, methods of verifying the requirements pursuant to the items of paragraph (1) 5, documents to submit, etc. shall be prescribed by Ministerial Decree of Strategy and Finance. <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Wholly Amended by Presidential Decree No. 16664, Dec. 31, 1999]
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Article 81 (Calculation of Donations and Entertainment Expenses, etc.)
(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 by Presidential Decree No. 22034, 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) When a business operator offers property other than money as a donation or entertainment expenses under Articles 34 and 35 of the Act, the value of relevant property shall be determined by the market price (or the book value if the market price is lower than the book value) at the time when it is offered: Provided, That with respect to donations under subparagraphs of Article 34 (2) 1 of the Act, such value shall be determined by its book value. <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22580, Dec. 30, 2010>
(4) Where a business operator has made a donation under Article 34 of the Act and a donation under Articles 76 and 88-4 (13) of the Restriction of Special Taxation Act, he/she shall include the relevant donations in necessary expenses in order within the limit of the amount by the following classifications: <Added by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. In cases of donations under Article 76 of the Restriction of Special Taxation Act (hereafter referred to as "political funds donation" in this paragraph) or legal donation, the amount calculated by the following formula:
The amount of income in the relevant taxable period (referring to the amount of income before donations are included in necessary expenses; hereafter the same shall apply in this paragraph) － Loss carried forward (referring to the aggregate of loss carried forward pursuant to Article 45 (3) of the Act; hereafter the same shall apply in this paragraph);
2. Deleted; <by Presidential Decree No. 22580, 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 － Legal donations) × 30/100;
3. In cases of designated donations, 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, legal donations and donations to an employee stock ownership association (hereafter referred to as "total amount of donations, etc." in this subparagraph) are deducted from income for the relevant taxable period, the deduction shall be made in order of losses carried forward, political funds donations, legal 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 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) 2 of the Act (hereinafter referred to as "voluntary services") shall be the total of the amounts calculated pursuant to the following subparagraphs: <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. The amount obtained by multiplying 50 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/her own services):
Number of service days = Total service hours ÷ 8 hours;
2. Direct expenses, such as oil expenses and material expenses, incurred incidental to the relevant voluntary services:
Market values or book value at the time of providing them.
(6) In applying Article 34 (2) 2 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 Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
(7) Where a person entitled to legal reserve claims a redemption of trusted properties in accordance with Article 1115 of the Civil Act after a person dies, who deducts donations under Article 80 (1) 3 from global income or includes them in necessary expenses, and redeems such trusted properties, the head of the competent tax office having jurisdiction of the domicile of the person entitled to the reserve shall collect the amount under subparagraph 1, multiplied by the rates under subparagraph 2, from the entitled person: <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
1. The amount of income tax equivalent to donations, as at the date of redemption of legal reserve by the person entitled to legal reserve, which a resident included in necessary expenses or deducted from taxable income during a taxable period, within the limitation period for imposition of 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.
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Article 82 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 83 (Scope of Entertainment Expenses)
(1) "Small and medium enterprises prescribed by Presidential Decree" in Article 35 (1) 1 of the Act means enterprises stipulated in Article 2 of the Enforcement Decree of the Restriction of Special Taxation Act. <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
(2) "Expense prescribed by Presidential Decree" in Article 35 (4) of the Act means, where the relevant association or organization is a corporation, expenses disbursed to such corporation, and where the relevant association or organization is not a corporation, it shall be deemed expenses in relation to assets owned by such business operator. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
(4) Deleted. <by Presidential Decree No. 14860, Dec. 30, 1995>
(5) The number of months in Article 35 (1) 1 of the Act shall be computed according to the calendar, but the number of days less than one month shall be deemed one month. <Added by Presidential Decree No. 15191, Dec. 31, 1996>
(6) "Amount prescribed by Presidential Decree" in the main sentence of the part other than the subparagraphs of Article 35 (2) of the Act means the amount by classifications under the following subparagraphs: <Added by Presidential Decree No. 15969, Dec. 31, 1998; Amended by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Expenses for congratulations or condolence: 200 thousand won;
2. Cases other than subparagraph 1: Ten thousand won.
(7) Deleted. <by Presidential Decree No. 21301, Feb. 4, 2009>
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Article 84 (Calculation, etc. of Amount of Income)
(1) "Amount of income prescribed by Presidential Decree" in the main sentence of Article 35 (1) 2 of the Act means the turnover computed according to corporate accounting standards. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
(3) "Related person prescribed by Presidential Decree" in the proviso to Article 35 (1) 2 of the Act, other than its Table, means the related party under Article 98 (1). <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
(4) "Expenditure prescribed by Presidential Decree" in the proviso to the Article 35 (2) of the Act, other than its subparagraph, means each of the following expenditures: <Added by Presidential Decree No. 23588, Feb. 2, 2012>
1. Expenditure in relevant overseas areas where it is difficult to be provided with evidentiary documents referred to in the subparagraphs of Article 35 (2) of the Act since methods of payment, other than cash, are not accepted in the place where entertainment expenses are paid (including similar places within an area where such place is located);
2. Expenditure where the farmers and fishermen (referring to the persons engaging in farm products cultivation, livestock industry, complex farming, forestry or fishing industry among the agricultural industry classified according to the Korea Standard Industry Code) directly supply goods and the payment for the goods is made through the financial company, etc. under subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (limited to where a business operator has submitted, to the head of a tax office having jurisdiction over the place for tax payment, the final return on the tax base with a letter of detailed remittances attached which specifies records of remittance, when he/she files the final return on the tax base of global income under Article 70 of the Act.)
(5) "Those prescribed by Presidential Decree" in Article 35 (2) 1 (a) of the Act means any of the following: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Debit cards under the Specialized Credit Financial Business Act;
2. Credit cards issued in a foreign country;
3. Registered prepaid cards, electronic direct payment means, registered prepaid electronic payment means or registered electronic cash IC under Article 126-2 (1) 4 of the Restriction of Special Taxation Act;
4. Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(6) "Withholding tax receipt prescribed by Presidential Decree" in Article 35 (2) 2 of the Act means a withholding tax receipt issued pursuant to Articles 144 and 145 of the Act after having received services from any person who has not made registration of business pursuant to Article 168 of the Act. <Added by Presidential Decree No. 21301, Feb. 4, 2009>
(7) Deleted. <by Presidential Decree No. 17456, Dec. 31, 2001>
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Article 85 (Calculation of Maximum Limit of Entertainment Expenses for Business Operators Having Two or More Places of Business)
(1) Where a business operator with two or more places of business has kept books 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 entertainment 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 subparagraphs (hereafter referred to as "maximum limit of entertainment expenses" in this Article): <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
1. Amount calculated by the following formula:
Amount under Article 35 (1) 1 of the Act


×		Amount of revenue of each place of business for the relevant taxable period
Aggregate 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 (1) 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 two or more places of business, the amount under Article 35 (1) 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).
(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 is in excess of 10 billion won, the priority order of the applicable rate may be selected at will by each place of business.
(4) In applying paragraph (2), when such cases take place respectively, as cases where entertainment expenses paid by each place of business in two or more places of business have failed to meet a maximum amount of entertainment expenses, or as cases where the said entertainment expenses exceed such limit, such short-fall amount and excess amount shall not be aggregated. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(5) In cases where a decision on estimation investigation or a revision has been made on the amount of revenue of a part of two or more 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 (1) 2 of the Act and paragraph (1) of this Article. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(6) In cases 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 by Presidential Decree No. 23588, Feb. 2, 2012>
{(Gross revenue amount × Applicable rate) － (Revenue amount related to special relations) × Applicable rate} ＋ {(Revenue amount related to special relations × Applicable rate) × 20/100}.
[This Article Added by Presidential Decree No. 17825, Dec. 30, 2002]
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Article 86 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 87 (Calculation of Necessary Expenses for Other Income)
"Cases prescribed by Presidential Decree" in Article 37 (2) 2 of the Act means any of the following cases:
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, That if necessary expenses actually involved exceed an amount equivalent to 80/100, the 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-service corporation governed by the Act on the Establishment and Operation of Public-Service 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) Other income under Article 21 (1) 7, 9, 15, and 19 of the Act;
(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;
2. In cases of other income under Article 21 (1) 25 of the Act, the amount equivalent to 80/100 (in cases where the holding period of paintings and antiques, it shall be 90/100) of the amount received by the resident shall be necessary expenses; provided,, if the necessary expenses actually involved exceed the amount equivalent to 80/100 of the amount (in cases where the holding period of paintings and antiques, it shall be 90/100), such excess shall also be included in necessary expenses.
[This Article Wholly Amended by Presidential Decree No. 22580, Dec. 30, 2010]
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Article 88 Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
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Article 89 (Acquisition Value of Assets, etc.)
(1) The acquisition value of the assets under Article 39 (2) of the Act shall be governed by an amount falling under any of the following subparagraphs: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 20720, Feb. 29, 2008>
1. In cases of assets purchased from another person, such amount obtained by adding acquisition tax, registration tax and other incidental expenses to the acquisition value;
2. In cases of assets acquired by one's own manufacturing, production or 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 tax), installation expenses and other incidental expenses;
3. In cases of assets falling under subparagraphs 1 and 2 whose acquisition price is obscure, and the assets other than those of subparagraphs 1 and 2, such amount obtained by adding acquisition tax, registration tax and other incidental expenses to the market price at the time of acquisition prescribed by Ministerial Decree of Strategy and Finance.
(2) The acquisition value under paragraph (1) shall not include an amount falling under any of the following subparagraphs: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
1. In cases 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 Ministerial Decree of Strategy and Finance, 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 the provisions of paragraph (1), the acquisition value shall be either the revaluation value when a revaluation has been made under the Assets Revaluation Act, or when there is an amount equivalent to the capital expenditure, the amount to be obtained by adding such amount. <Amended by Presidential Decree No. 18705, Feb. 19, 2005>
(4) The amount of deemed input tax deducted under Article 17 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 materials. <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005>
(5) The provisions of Articles 127, 156 and 164 of the Act shall not apply to the amount of depreciation of the discounted debt estimated by present value under paragraph (2) 1, and the paid interest under subparagraph 2 of the same paragraph. <Added by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 90 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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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:
1. Cost method;
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 by Presidential Decree No. 15969, 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;
6. Gross profit 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 by Presidential Decree No. 22034, 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;
3. Raw materials;
4. Stored goods.
(4) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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 Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 22034, 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.
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Article 93 (Methods of Valuation of Securities Purchased for Trade or Short-Term Investment)
When applying Article 39 of the Act, the method of valuation of securities purchased for the trade or short-term investment (including the securities deposited by an investment trader or an investment broker under the Financial Investment Services and Capital Markets Act with the Korea Exchange) shall be in accordance with a method reported by a business operator from among methods under the following subparagraphs: <Amended by Presidential Decree No. 21301, Feb. 4, 2009>
1. Specific identification method (limited to bonds);
2. Weighted average method;
3. Moving average method.
[This Article Wholly Amended by Presidential Decree No. 15191, Dec. 31, 1996]
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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 Ministerial Decree of Strategy and Finance, to the head of the competent tax office having jurisdiction over the place for tax payment.
(2) Where any person who has reported the valuation method of inventory assets, etc., intends to alter such method, he/she shall submit a report of change of the valuation method of inventory assets, etc., prescribed by Ministerial Decree of Strategy and Finance 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.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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, That 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 by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 96 (Valuation Loss of Inventory Assets and Fixed Assets)
(1) "Method prescribed by Presidential Decree" in the part other than 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:
1. Fire;
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 assets cannot be used for their inherent purpose.
[This Article Added by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 97 (Profits and Losses, etc. 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 Ministerial Decree of Strategy and Finance to a final return on the tax base.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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 by Presidential Decree No. 23588, 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, That 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, 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, That cases where he/she allows his/her lineal ascendant or descendant to use a house gratuitously and his/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/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/her total income or necessary expenses in the relevant taxable period on account of transactions with his/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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005>
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Article 99 (Special Case of Calculation of Amount of Income on Trade with Nonresident, etc.)
The provisions of Article 17 of the Enforcement Decree of the Adjustment of International Taxes Act shall apply mutatis mutandis to the application procedure for the adjustment of amount of income under Article 42 of the Act. <Amended by Presidential Decree No. 18705, Feb. 19, 2005>
[This Article Wholly Amended by Presidential Decree No. 14860, Dec. 30, 1995]
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Article 100 (Cumulative Taxation for Joint Business, etc.)
(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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
1. A person who allows the joint business to use his/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/her. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, 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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 23588, 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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
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, in light of 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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, 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, That 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.
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Article 100-2 (Succession, etc. of Pension Account)
(1) Where a heir succeeds a pension account pursuant to Article 44 (2) of the Act, it shall be deemed that the heir has subscribed to the pension account on the date he/she succeeds the income amount in the pension account concerned: Provided, That 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) A heir who intends to succeed to a pension account pursuant to Article 44 (2) of the Act shall file his/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 the 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 there is no application for succession pursuant to the former part of paragraph (2), the amount obtained by deducting the tax amount previously withheld from the date of death until the date of confirmation of death from the tax amount calculated with the sum of each of the following deemed received other than pension as of the date of confirmation of death (referring to the date confirmed by the pension account administrator; where the date of confirmation of death is before the period of application for succession, it shall be the last day of such period, and where the heir receives other than pension before the period of application for succession lapses, it shall be the date of receipt other than pension; hereafter the same shall apply in this paragraph) shall be the income tax of the deceased:
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 by Presidential Decree No. 24356, Feb. 15, 2013]
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Article 101 (Deduction of Losses and Losses Carried Forward)
(1) "Rights prescribed by Presidential Decree, such as easement, etc." in Article 45 (2) 1 of the Act means easement and superficies (including rights established on the basement or the air).
(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, That 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/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 by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 102 (Scope 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 by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 21934, Dec. 31, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Certificates of deposit issued by a financial company, etc., or certificates similar thereto: Provided, That those prescribed by Ministerial Decree of Strategy and Finance shall be excluded;
2. Deleted; <by Presidential Decree No. 22580, Dec. 30, 2010>
3. Deleted; <by Presidential Decree No. 21301, Feb. 4, 2009>
4. Bills (including bills issued, sold, or mediated by a financial company, etc., but excluding commercial bills).
(2) Even if securities under paragraph (1) are incorporated into the trust estate, etc., Article 46 of the Act shall be applied. <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, 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/her holding period from among the amount of interest, etc. in the holding period referred to in Article 193-2 (3). <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, 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 trading: <Added by Presidential Decree No. 22185, Jun. 8, 2010>
1. An agreement for a resident to sell bonds, etc., on condition that he/she repurchases them at a certain price in a given period, where such sale and purchase is confirmed through an account of the Korea Securities Depository pursuant to Article 294 of the Financial Investment Services and Capital Markets Act;
2. An agreement for a resident to lend bonds, etc., on condition that he/she redeems them in the same quantity of the same kind in a given period, where such sale and purchase is confirmed through a trading ledger (including a ledger in an electronic form) 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) In cases of sale and purchase pursuant to paragraph (4), Articles 46 and 133-2 of the Act shall apply thereto, considering that the amount equivalent to interest income generated from such bonds, etc., during the period from the date bonds, etc., are sold or lent to the date of repurchase or return on bonds, etc., shall be deemed to belong to a seller or a lender. <Added by Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
(6) and (7) Deleted. <by Presidential Decree No.22034, Feb. 18, 2010>
(8) The holding period under Article 46 (2) of the Act shall be proven by methods referred to in the following: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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. In other cases 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 Ministerial Decree of Strategy and Finance 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).
(9) Deleted. <by Presidential Decree No. 18705, Feb. 19, 2005>
(10) In applying Articles 46 and 133-2 of the Act, if bonds, etc. are sold with approval of a financial company, etc., it shall be deemed that the relevant financial company, etc. has mediated such sale. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(11) and (12) Deleted. <by Presidential Decree No. 18705, Feb. 19, 2005>
[This Article Wholly Amended by Presidential Decree No. 14860, Dec. 30, 1995]
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Article 102-2 Deleted. <by Presidential Decree No. 18705, Feb. 19, 2005>
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Article 102-3 Deleted. <by Presidential Decree No. 22185, Jun. 8, 2010>
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Article 103 Deleted. <by Presidential Decree No. 20618, Feb. 22, 2008>
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Article 104 (Wage and Salary Income Deductions)
(1) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Deleted. <by Presidential Decree No. 22580, 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/her labor. <Amended by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 105 (Years of Continuous Service)
(1) Upon applying Articles 48 (1) 2 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, That the period not included in the service period when a retirement payment is calculated shall be excluded from the years of continuous service. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
(2) "Number of years calculated by the method prescribed by Presidential Decree" in Article 48 (1) 2 of the Act means the number of years under 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 by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. In cases of lump-sum money to be paid under the National Pension Act, the number of deposit years calculated by dividing the gross 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 Veterans' 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, among the retirement income under Article 22 (1) 1 of the Act, the lump-sum amount under the Public Officials Pension Act, the Veterans' 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. In cases of lump-sum amount to be received after returning the lump sum allowance pursuant to Article 40 (3) and including the service period, the service period after the date of re-appointment or re-subscription, notwithstanding subparagraphs 2 and 3.
(3) The years of continuous service of the retirement mutual aid money under Article 42-2 (2) 3 shall be the years of payment obtained by dividing the number of months of paying the mutual aid money calculated pursuant to Article 14 (4) of the Act on the Employment Improvement, etc. of Construction Workers by 12. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
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Article 106 (Personal Deduction for Dependents, etc.)
(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 person 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 deduction for wage and salary income prescribed by Ministerial Decree of Strategy and Finance under Article 140 of the Act (hereinafter referred to as "report on income deduction for wage and salary income"), a report on income deduction for pension income under Article 143-6 (1) of the Act (hereinafter referred to as "report on income deduction for pension income") or a report on income deduction under Article 201-12: Provided, That where a person primarily entitled to personal deduction of a resident falls under the person entitled to an additional personal deduction of another resident under Article 51 (1) 4 of the Act, he/she may be deemed a person entitled to the relevant additional deduction of another resident. <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
(2) Where both two or more residents enter family members entitled to deduction under paragraph (1) in a return as his/her eligible family members for deduction, or where it is uncertain as to who is entitled to deduction for such family members, he/she shall meet the following standards: <Amended by Presidential Decree No. 22034, 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, That where no personal deduction as a dependent in the preceding taxable period has been made, he/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/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, etc., he/she shall be deemed a family member entitled to deduction of the decedent or the resident who left Korea. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(4) If the personal deduction for the decedent or the resident who left Korea exceeds the amount of income in cases of 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(5) "Person prescribed by Presidential Decree" in Article 50 (1) 3 (a) of the Act means a person who is verified that he/she is married (excluding the de facto marriage) with the lineal ascendent of the relevant resident. <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 22034, Feb. 18, 2010>
(6) "Person prescribed by Presidential Decree" in Article 50 (1) 3 (b) of the Act means any of the following persons: <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 22034, Feb. 18, 2010>
1. A lineal descendent of the resident;
2. In cases where the spouse of a resident has remarried, any person who has been delivered of during the marriage (excluding the de facto marriage) of the relevant spouse with the previous spouse.
(7) "Adoptee prescribed by Presidential Decree, living together" in Article 50 (1) 3 (b) of the Act means the child adopted under the Civil Act or the Act on Special Cases concerning Adoption, and a person who is actually in the adopted status and makes his/her living with the resident. <Added by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24017, Aug. 3, 2012>
(8) "Any person prescribed by Presidential Decree" in Article 50 (1) 3 (d) of the Act means recipients under subparagraph 2 of Article 2 of the National Basic Living Security Act. <Added by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(9) "Any person prescribed by Presidential Decree" in Article 50 (1) 3 (e) of the Act means entrusted children whom a resident has brought up in person not less than six months in the relevant taxable period: Provided, That where he/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 by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(10) Where a resident intends to receive the global income deduction for persons under paragraphs (5) through (9), he/she shall present documents prescribed by Ministerial Decree of Strategy and Finance, as prescribed by the subparagraphs of Article 107 (2). <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009>
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Article 107 (Scope of Persons with Disability)
(1) Disabled persons under Article 51 (1) 2 of the Act shall be the persons indicated in any of the following: <Amended by Presidential Decree No. 15486, Sep. 30, 1997; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005>
1. Disabled persons under the Act on Welfare of Persons with Disabilities;
2. Injured persons under the Act on the Honorable Treatment and Support of Persons, etc. of Distinguished Services to the State, and persons similar thereto without any ability to work;
3. Deleted; <by Presidential Decree No. 17456, Dec. 31, 2001>
4. Persons with serious illnesses in need of constant medical treatment, other than those of subparagraphs 1 through 3.
(2) Where any person who falls under any subparagraph of paragraph (1) intends to take deduction for a disabled person, he/she shall submit a certificate for a person with a disability prescribed by Ministerial Decree of Strategy and Finance pursuant to the following subparagraphs: Provided, That with regard to any person with a certificate for an injured person under the Act on the Honorable Treatment and Support of Persons, etc. of Distinguished Services to the State, or any person who has been issued a certificate of registration for a disabled person under the Act on Welfare of Persons with Disabilities, a copy of the relevant certificate, certificate of registration for persons with a disability or other documents proving the disability shall be submitted, and if any of the foregoing documents were submitted, a certificate for a person with a disability may not be submitted: <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15486, Sep. 30, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. When filing a final return on tax base, he/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. Those who have wage and salary income (excluding wage and salary income falling under any item of Article 127 (1) 4 of the Act) shall submit it, along with a report on wage and salary income deduction for the wage and salary income earner, to the withholding agent who makes the year-end tax settlement;
3. Those who have 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 the income deduction, 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 one or more years, submits a certificate of persons with a disability stating the period of disability under paragraph (2), he/she need not resubmit the certificate during the period of such disability: Provided, That 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 by Presidential Decree No. 17456, Dec. 31, 2001>
(4) In cases falling under the proviso to paragraph (3), he/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 by Presidential Decree No. 17456, Dec. 31, 2001>
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Article 108 (Deduction, etc. 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/her certified transcript of resident registration card whether he/she has a spouse or he/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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010>
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Article 108-2 (Deduction for Pension Insurance Premiums)
(1) A person who desires to be eligible for the application of Article 51-3 (1) 2 of the Act shall submit a certificate of pension payment prescribed by Ministerial Decree of Strategy and Finance with a withholding agent, a taxpayers association, the head of the competent tax office having jurisdiction over the place for tax payment, by no later than the date set forth in the subparagraphs of Article 113 (1). <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
(2) Where paragraph (1) is applicable, when the evidentiary documents for income deduction are submitted to the Commissioner of the National Tax Service in accordance with Article 216-3, the documents specified by Ministerial Decree of Strategy and Finance may be submitted by the date set forth in the subparagraphs of Article 113 (1). <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(3) Deleted. <by Presidential Decree No. 21301, Feb. 4, 2009>
[This Article Added by Presidential Decree No. 19890, Feb. 28, 2007]
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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 by Presidential Decree No. 21430, Apr. 21, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
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; <by Presidential Decree No. 21430, 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 900 million won.
(2) Where a mortgage-backed retirement pension was paid, the amount equivalent to the interest accrued from the pension shall be the amount stated in the certificate of interest expenses for the mortgage-backed retirement pension issued by a financial company, etc. that paid the pension or the Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act, as prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 109 (Deduction of Premium Payments)
"Premiums prescribed by Presidential Decree" in Article 52 (1) 2 (b) of the Act means those prescribed by Ministerial Decree of Strategy and Finance from among the following: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Life insurance;
2. Accident insurance;
3. Non-life insurance insuring the household against fire, theft and accident or disasters;
4. Mutual aid pursuant to the Fisheries Cooperatives Act, the Credit Unions Act, or the Community Credit Cooperatives Act;
5. Mutual aid pursuant to the Military Personnel Mutual Aid Association Act, the Korea Teachers' Credit Union Act, the Korea Local Administration Mutual Aid Association Act, the Police Mutual Aid Association Act, and the Korea Fire-Fighting Mutual Aid Association Act.
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Article 109-2 (Deduction of Premiums of Security Insurance for Disabled Persons only)
"Premiums of a guaranty insurance exclusively for the disabled prescribed by Presidential Decree" in Article 52 (1) 2 (a) of the Act means those indicated as disabled only guaranty insurance on the insurance policy or an insurance premium receipt, among the insurances falling under the subparagraphs of Article 109 (including mutual aid programs). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 110 (Deduction of Medical Expenses)
(1) "Medical expenses prescribed by Presidential Decree" in the part other than the subparagraphs of Article 52 (2) of the Act means medical expenses falling under any of the following subparagraphs, which are directly borne by the relevant laborer: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18401, May 25, 2004; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Expenses paid to medical institutions under Article 3 of the Medical Service Act for diagnosis, medical treatment or the prevention of diseases;
2. Expenses paid for the purchase of medical products under Article 2 of the Pharmaceutical Affairs Act (including herbal remedies; hereinafter the same shall apply) for the treatment and recuperation;
3. Expenses paid to directly purchase or hire supplementary aid devices for disabled persons (referring to supplementary aid devices under Article 105 of the Enforcement Decree of the Restriction of Special Taxation Act) and medical instruments prescribed by a doctor, dentist, herbal doctor, etc. (referring to medical instruments under Article 2 (1) of the Medical Appliances Act);
4. Expenses paid for a purchase of eyeglasses for vision correction or contact lenses, the prices of which are within 500 thousand won per annum per head of the persons subject to basic deduction under Article 50 (1) of the Act (not subject to any restrictions on age or income level);
5. Expenses paid for purchase of hearing aids;
6. Partial share in expenditure actually paid by the principal pursuant to Article 40 (1) of the Long-Term Care Insurance for the Aged Act.
(2) Expenses for cosmetic surgery and expenses for purchasing medical supplies for the promotion of health shall not be included in the expenses referred to in the subparagraphs of paragraph (1). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) With regard to a worker whose medical expenses to be deducted from his/her amount of gross amount at the time of a year-end tax settlement of wage and salary income tax under Article 137, 137-2 or 138 of the Act is not less than two million won per year, the withholding agent shall submit the tapes or diskettes on which the statements of payment of relevant worker's medical expenses are electronically processed to the head of the competent tax office when the statement of payment of wage and salary is submitted. <Amended by Presidential Decree No 18173, Dec. 30, 2003; Presidential Decree No 20618, Feb. 22, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
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Article 110-2 Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 110-3 (Deduction of Educational Expenses)
(1) "Educational expenses prescribed by Presidential Decree" in the main sentence of the part, other than the subparagraphs of Article 52 (3) of the Act means educational expenses falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. School fees, admission fees, childcare expenses, tuition fees and other school fees;
2. Lunch money paid to the schools, kindergartens and child care centers providing school meals pursuant to the School Meals Act, the Early Childhood Education Act, the Infant Care Act, etc., and to the private educational institute and physical training facilities (only applicable to preschool children) under Article 52 (3) 1 (d) of the Act;
3. The price for textbooks purchased at schools (only applicable to pupils of elementary schools, secondary schools and high schools);
4. Expenses for purchasing school uniforms (only applicable to pupils of secondary schools and high schools; limited to 500,000 won a year for each pupil);
5. School fees and special activity expenses (including expenses for teaching materials purchased at schools, etc.) for after school lessons or programs, etc. conducted by the schools, kindergartens and chid care centers under the Elementary and Secondary Education Act, the Early Childhood Education Act, the Infant Care Act, or by the private educational institutes and the physical training facilities (only applicable to preschool children) under Article 52 (3) 1 (d) of the Act.
(2) "Educational expenses prescribed by Presidential Decree" in the proviso to the part other than the subparagraphs of Article 52 (3) of the Act means scholarship or education funds (hereafter referred to as "scholarship, etc." in this paragraph) received during the relevant taxable period, which fall under any of the following: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22516, Dec. 7, 2010>
1. Scholarship, etc. received from an intra-company labor welfare fund under the Framework Act on Labor Welfare;
2. Scholarship, etc. received from schools that they attend;
3. Scholarship, etc. received by a student, who is an employee, from his/her job;
4. Scholarship, etc. for children, etc. paid to public officials working abroad;
5. Other scholarship, etc. received from various organizations.
(3) "Courses of study prescribed by Presidential Decree" in Article 52 (3) 1 (b) of the Act means the course of study evaluated and approved by the Minister of Education as an accredited study course under Article 3 (1) of the Act on Recognition of Credits, etc. and the course of study under Article 9 (1) 4 of the Enforcement Decree of the Act on the Acquisition of Academic Degrees through Self-Education. <Amended by Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24441, Mar. 23, 2013>
(4) "Overseas educational institutions prescribed by Presidential Decree" in Article 52 (3) 1 (c) of the Act means educational institutions located outside the Republic of Korea, equivalent to kindergartens under the Early Childhood Education Act or schools under the Elementary and Secondary Education Act or the Higher Education Act, and "students prescribed by Presidential Decree" means the students whose educational expenses were paid by a resident having Korean citizenship as of the date of termination of tax period concerned (in cases of a preschool child, elementary and middle school students, limited to any of the following persons): <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. A person qualified to study abroad at his/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, who has stayed abroad for one or more years together with the person who is responsible for supporting him/her.
(5) "Sports facilities prescribed by Presidential Decree" in Article 52 (3) 1 (d) of the Act means the following sports facilities: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Sports facilities operated by a sports facility operator under the Installation and Utilization of Sports Facilities Act (including a sports facility operator prescribed by Ministerial Decree of Strategy and Finance);
2. Sports facilities operated (including entrusted operation) by the State, a local government, or a person who operates facilities permitted or registered as the facilities for training juveniles pursuant to the Juvenile Activity Promotion Act.
(6) "Amount prescribed by Presidential Decree" in Article 52 (3) 1 (d) of the Act means tuition fees paid by preschool children after taking lessons of the training course (only applicable to the courses conducted at least once a week) conducted on a monthly basis at private teaching institutes under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons or at sports facilities under paragraph (5). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) "Subsidies, etc. prescribed by Presidential Decree" in the proviso to Article 52 (3) 2 (c) of the Act means subsidies for vocational skills development under Article 43 of the Enforcement Decree of the Employment Insurance Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23139, Sep. 15, 2011>
(8) "Expenses for special education prescribed by Presidential Decree" in the part other than the items of Article 52 (3) 3 of the Act means the expenses (excluding the amount of money supported from the State or local governments pursuant to the Act on Welfare Support for Children with Disabilities) paid for rehabilitative education of disabled persons, and "social welfare facilities and non-profit corporations prescribed by Presidential Decree" in item (a) of the same subparagraph means the following facilities and corporations: <Amended by Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22075, Mar. 15, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Social welfare facilities under the Social Welfare Services Act;
2. Non-profit corporations established under the Civil Act, which the Minister of Health and Welfare has recognized as the corporations that perform rehabilitative education to disabled persons.
(9) “Institutions prescribed by Presidential Decree” under Article 52 (3) 3 (b) of the Act means the development and rehabilitation service providers designated by local governments pursuant to Article 21 (3) of the Act on Welfare Support for Children with Disabilities. <Added by Presidential Decree No. 23588, Feb. 2, 2012>
[This Article Wholly Amended by Presidential Decree No. 20618, Feb. 22, 2008]
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Article 111 Deleted. <by Presidential Decree No. 20618, Feb. 22, 2008>
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Article 112 (Deduction for Housing Funds)
(1) "Household prescribed by Presidential Decree" in the main sentence of the part other than the subparagraphs of Article 52 (4) of the Act means a household all inclusive of a resident and his/her spouse, lineal ascendants and descendants (including their spouses), brothers and sisters of other residents and there spouses living together at the same domicile or place of residence as that of the resident. In such cases, even if the resident and his/her spouse do not make a living together, they are deemed the same household. <Added by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(2) "House not larger than a certain scale prescribed by Presidential Decree" in the main sentence of the part other than the subparagraphs of Article 52 (4) of the Act means a house of national housing scale under the Housing Act. In such cases, if the relevant house is a multi-household house, it shall be based on the exclusive area for each household. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) "Multiple prescribed by Presidential Decree" in the main sentence of the part other than the subparagraphs of Article 52 (4) of the Act means a multiple according to the following classification: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Land in an urban area under Article 6 of the National Land Planning and Utilization Act: Five times;
2. Other land: Ten times.
(4) "Loan of funds to rent a house prescribed by Presidential Decree" in Article 52 (4) 1 of the Act means any of the following loans: Provided, That a loan referred to in subparagraph 2 shall be only applicable to a person whose total pay in the relevant taxable period does not exceed 50 million won: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. A loan borrowed from a lending institution pursuant to Appendix 1-2, which meets all the following requirements:
(a) It shall be money borrowed within three months before or after the earlier date between the date of moving-in specified on a lease contract (hereafter referred to as "lease contract" in this Article) and the date of moving-in on a certified copy of resident registration card;
(b) A loan shall be deposited in the account of a lessor directly from a lending institution pursuant to Appendix 1-2;
2. Money borrowed from a resident who does not conduct credit business, etc. under Article 2 of the Act on Registration of Credit Business and Protection of Finance Users, which meets all the following requirements:
(a) It shall be money borrowed within one moth before or after the earlier date between the date of moving-in specified on a lease contract and the date of moving-in on a certified copy of resident registration card;
(b) It shall not be money borrowed at the rate of interest lower than the rate of interest prescribed by Ministerial Decree of Strategy and Finance.
(5) "Amount of monthly rent prescribed by Presidential Decree" in Article 52 (4) 2 of the Act means the amount of monthly rent paid to rent a house (hereinafter referred to as "monthly rent" in this paragraph), which meets all the following requirements: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Where a lessee has paid security money, etc., in addition to a monthly rent, he/she shall receive a fixed date pursuant to Article 3-2 (2) of the Housing Lease Protection Act in a lease contract;
2. A domicile in a lease contract shall be the same with a domicile in a certified copy of resident registration card.
(6) The amount of monthly rent shall be calculated by multiplying the amount calculated, by dividing the total of monthly rents to be paid during the period of lease of a house in a lease contract by the number of days falling under the term of a contract for lease of a house, by the number of days of rent in the relevant taxable period. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) "Long-term mortgage loan prescribed by Presidential Decree" in the main sentence of the part other than the subparagraphs of Article 52 (5) of the Act means a loan satisfying all the requirements under the following subparagraphs. In such cases, where it fails to meet the relevant requirements, Article 52 (5) of the Act shall not apply from the date such reason arises: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. The term of redemption of a loan shall be not less than 15 years. In such cases, if a transferee of the relevant house takes over, together with the acquisition of the house, the liability for long-term housing mortgage loan that the former owner of the relevant house has borrowed after creating a mortgage on the relevant house, the redemption period shall be calculated based on the date on which the former owner of relevant house has first borrowed the relevant loan;
2. The long-term housing mortgage loan is required to be borrowed within three months from the date on which 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.
(8) "Method of fixed interest rate prescribed by Presidential Decree" in the proviso to the part other than the subparagraphs of Article 52 (5) of the Act means the cases where the interest for the principal equivalent to at least 70/100 of the total borrowed money is paid in the method of a fixed interest rate during its repayment period (including where the interest rate is adjusted every five years or more), and the “method of repayment in installment with no grace period prescribed by Presidential Decree” means the case where a borrowed money of at least the amount calculated according to the below formula is repaid each year from the tax period following the tax period to which the date of borrowing belongs until the tax period to which the last day of the term of redemption of the borrowed money belongs. In this case, any term of redemption of a loan less than a year shall be deemed one year: <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
70/100 of Borrowed Money
----------------------------------------------------
Number of Years of Redemption Period
(9) Where a loan falls under any of the following, the relevant loan shall be deemed "long-term housing mortgage loan prescribed by Presidential Decree" under the main sentence of the part other than the subparagraphs of Article 52 (5) of the Act, notwithstanding paragraph (7): Provided, That in cases falling under subparagraph 2 or 4, the remaining amount of existing loan shall be its upper limit: <Amended by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18146, Nov. 29, 2003; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 21430, Apr. 21, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
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 National Housing Fund under the Housing Act for purchasing the relevant house;
2. Where a borrower of a long-term housing mortgage loan under paragraph (7) transfers the long-term housing mortgage loan within the relevant financial company, etc. or to another financial company, etc. (only applicable to cases where the relevant financial company, etc. or another financial company, etc. directly redeems the remaining amount of the existing long-term housing mortgage loan, and transfers the long-term housing mortgage loan in the form of mortgage settlement on the relevant residence). In such cases, the relevant loan shall satisfy the requirements under paragraph (7) 1, and when calculating the term of redemption, it shall be on the basis of the date of first borrowing of the long-term housing mortgage loan;
3. Where the ownership is transferred to the residence transferee immediately after the said transferee has borrowed the loan, which satisfies the requirement under paragraph (7) 1, from a financial company, etc. or the National Housing Fund under the Housing Act, by providing the residence transferor's residence as a security;
4. Where a borrower of a loan, the term of redemption of which is less than 15 years which falls under the requirements of paragraph (7) 2 and 3 pursuant to Article 52 (5) of the Act extends the term of such redemption to 15 or more years, or redeems the existing loan with a new loan borrowed with the term of redemption of not less than 15 years by settlement of mortgage on the relevant house; and the standard market price of a house pursuant to Article 99 (1) of the Act at the time of the extension of the term of redemption or a new borrowing, or the price of the ownership of a house under paragraph (15) does not exceed 300 million won, respectively;
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 National Housing Fund under the Housing Act for purchasing the relevant house with the term of redemption of not less than five years. In such cases, the relevant borrowing shall fulfill the requirements of paragraph (7) 2 and 3.
(10) When applying paragraph (7), if a transferee of the relevant house assumes the liability for long-term housing mortgage loan in connection with the house acquisition, the requirement under subparagraph 2 of the same paragraph shall not be applicable. <Amended by Presidential Decree No. 21301, Feb. 4, 2009>
(11) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(12) With respect to persons who are entitled to tax deduction for the interest on borrowings of housing fund under Article 92-4 of the Regulation of Tax Reduction and Exemption Act prior to amendment by Act No. 5584, the amended Act of the Regulation of Tax Reduction and Exemption Act, 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 the part other than the subparagraphs of Article 52 (5) of the Act, notwithstanding paragraph (7). <Added by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(13) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(14) When applying paragraph (10), where the standard market price of a house under Article 99 (1) of the Act exceeds 300 million won at the time when a transferee acquires the relevant house, it shall not be deemed "long-term housing mortgage loan prescribed by Presidential Decree" under Article 52 (3) of the Act. <Added by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 21301, Feb. 4, 2009>
(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 by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, 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 the land appurtenant thereto + Settlement balance paid;
(b) Where settlement balance is received:
Assess value of the existing building and the land appurtenant thereto Settlement balance received.
[This Article Wholly Amended by Presidential Decree No. 16988, Oct. 23, 2000]
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Article 112-2 (Income Deduction for Donations)
(1) Article 81 (4) through (6) shall apply mutatis mutandis to cases where donations made by any resident under Articles 52 (6) and (8) and 54-2 of the Act are deducted from global income.
(2) When making a year-end tax settlement for wage and salary income pursuant to Article 137, 137-2 or 138 of the Act, or for business income pursuant to Article 114-2 of the Act, a withholding agent shall submit tapes or diskettes with electronically processed data of donations records to the head of the competent tax office when submitting a statement of payment in relation a resident who obtained deduction for donations from his/her global income. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 113 (Special Deductions)
(1) Any person who intends to be governed by Article 52 of the Act shall submit the documents prescribed by Ministerial Decree of Strategy and Finance, by the date stipulated in the following subparagraphs, to a withholding agent, a taxpayers association, or the head of the competent tax office having jurisdiction over the place for tax payment: Provided, That this shall not apply to insurance premiums under Article 52 (1) 1 of the Act and donations which a withholding agent deducts from the amount of pay in a lump sum: <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
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 on which he/she receives pay for February of the year following the relevant taxable period (where he/she has retired from office, referring to the date on which he/she receives pay for the month in which the date he/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 documentary evidence for income deduction is submitted to the Commissioner of the National Tax Service pursuant to the provisions of Article 216-3, a person who intends to be governed by Article 52 of the Act, notwithstanding the main sentence of paragraph (1), may submit documents determined by Ministerial Decree of Strategy and Finance. <Added by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20720, Feb. 29, 2008>
(3) Article 47 (5) of the Act shall apply mutatis mutandis to special deduction: Provided, That a withholding agent who pays wages which form the basis of the calculation of the relevant insurance premiums shall deduct the insurance premiums under Article 52 (1) 1 of the Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
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Article 113-2 (Scope of Compliant Business Operators)
(1) "Business operator who meets the requirements prescribed by Presidential Decree, such as reporting of a business account" in the main sentence of Article 52 (9) of the Act means a business operator who meets all the following requirements: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. He/she shall be a business operator who falls under any of the following items:
(a) Any business operator who holds both membership of a credit card member store and an Issuer of Cash Receipts pursuant to Articles 162-2 and 162-3 of the Act: Provided, That any business operator, who violates Article 162-2 (2), 162-3 (3) or (4) of the Act in the relevant taxable period and has been informed of the relevant fact by the head of the competent tax office pursuant to the latter part of Article 162-2 (4) or the latter part of Article 162-3 (6) of the Act, shall be excluded;
(b) A business operator prescribed by Ministerial Decree of Strategy and Finance, including a business operator who has installed facilities for the enterprise resource planning system under subparagraph 1 of Article 5-2 of the Restriction of Special Taxation Act or those for the point-of-sale information management system under the Distribution Industry Development Act;
2. He/she shall retain and maintain account books in accordance with Article 160 (1) or (2) of the Act, and shall submit a return with the amount of income calculated in accordance with the account books (excluding the pertinent taxable period, if there is a decision to make an investigation into the estimation pursuant to the proviso to Article 80 (3) of the Act);
3. He/she shall report a banking account for business in accordance with Article 160-5 (3) of the Act, and shall use at least two-thirds of the amount that shall be transacted through the business account in accordance with paragraph (1) of the said Article during the pertinent taxable period.
(2) Necessary matters concerning the determination on whether each item of paragraph (1) 1 is met, etc. shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 114 (Scope of Those who Withdraw Temporarily)
(1) "Reasons prescribed by Presidential Decree" in Article 53 (2) of the Act means cases where a resident or his/her family living together (excluding a lineal descendant and an adoptee) leaves temporarily his/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 by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Persons who intend to receive gross income deduction for those who have left temporarily under Article 53 (2) of the Act, shall submit a list of family members living together with a person who has left temporarily (hereinafter referred to as "list of family members living together with a person who has left temporarily") prescribed by Ministerial Decree of Strategy and Finance along with the documents falling under any of the following subparagraphs (including submitting them by means of the Home Tax Service), to a withholding agent or to the head of the competent tax office having jurisdiction over the place for tax payment: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 20720, Feb. 29, 2008>
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/her work, the certificate of employment issued by the head of the relevant place of business;
4. Deleted. <by Presidential Decree No. 19507, Jun. 12, 2006>
(3) Upon receiving an application filed pursuant to the provisions of paragraph (2), the head of the competent tax office having jurisdiction over the place for tax payment shall confirm the documents of the following subparagraphs 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 any income earner files a return on the income deduction pursuant to the provisions of Article 140 of the Act, the head of the competent tax office shall request them to attach such documents: <Added by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010>
1. A certified copy of resident registration card of his/her original domicile and temporary address;
2. A copy of his/her business registration certificate (limited to cases where he/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 by Presidential Decree No. 19507, Jun. 12, 2006>
Section 5 Tax Rate and Deduction of Amount of Tax
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Article 115 Deleted. <by Presidential Decree No. 24356, Feb. 15, 2013>
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Article 116 Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
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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 amount for global taxation on interest income, etc. under Article 56 (4) of the Act, shall be governed by the amount obtained by successively aggregating the amount of interest income, etc. in the order of the following subparagraphs: <Amended by Presidential Decree No. 18705, Feb. 19, 2005>
1. Where there concurrently exist interest income and dividend income, the interest income shall be added first;
2. In applying subparagraph 1, if there concurrently exist dividend income subject to the proviso to Article 17 (3) of the Act and other dividend income, the other dividend income shall be added first.
[This Article Added by Presidential Decree No. 15191, Dec. 31, 1996]
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Article 116-3 (Tax Credit for Bookkeeping)
(1) Deleted. <by Presidential Decree No. 22034, 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 by Presidential Decree No. 22034, Feb. 18, 2010>
1. Force majeure;
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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 117 (Foreign Tax Credit)
(1) "Foreign income tax prescribed by Presidential Decree" in the part other than the subparagraphs of Article 57 (1) of the Act and in the former part of Article 129 (4) of the Act means the amount of tax under the following (excluding penalty taxes and surcharges) assessed by a foreign government: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
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) "Ratio prescribed by Presidential Decree" in Article 57 (1) 1 of the Act means the following ratio: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(Foreign source income The amount prescribed by Ministerial Decree of Strategy and Finance from among the foreign source income) / Global income in the relevant taxable period.
(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 or shall be included in necessary expenses. In such cases, any person who intends to get a deduction on tax paid in a foreign country or to have it included in necessary expenses shall file an application for foreign tax credit (including necessary expenses) prescribed by Ministerial Decree of Strategy and Finance with the head of the competent tax office having jurisdiction over the place for tax payment or a withholding agent, when he/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 by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(4) Where an application under paragraph (3) cannot be submitted along with the final return on tax base due to such causes as a delay of notification of decision on income tax on the foreign source income by the foreign government, or as the difference in the taxable periods, it may be submitted within 45 days from the date of receiving such notification of decision. <Amended by Presidential Decree No. 15969, Dec. 31, 1998>
(5) Paragraph (4) shall apply mutatis mutandis to cases 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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 21301, 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) 1 of the Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) In calculating the limit of deduction under Article 57 (1) 1 of the Act, if the overseas places of business are located in two or more foreign countries, the relevant business operator may apply it by selecting either method of separate calculation for each country, or a method of collective calculation without such separation.
(8) "Conditions prescribed by Presidential Decree are satisfied" in Article 57 (4) of the Act means any of the following cases: <Added by Presidential Decree No. 22580, 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 by Presidential Decree No. 22580, 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 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 mutatis mutandis application of the provisions concerning a resident’s global income or retirement income. In such cases, the foreign source income to which foreign income tax deduction applies pursuant to Article 57 (1) of the Act shall be the amount obtained by deducting any amount which is directly or indirectly corresponding to the foreign source income and is included in necessary expenses upon calculating one’s global income in a taxable period concerned, and Article 57 (2) of the Act shall not apply to the aforementioned deducted amount. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
(10) 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 mutatis mutandis application of the provisions concerning a resident’s global income or retirement income. In this case, the foreign source income to which foreign income tax deduction applies pursuant to Article 57 (1) of the Act shall be the amount obtained by deducting any amount which is directly or indirectly corresponding to the foreign source income and is included in necessary expenses upon calculating one’s global income in a taxable period concerned, and Article 57 (2) of the Act shall not apply to the aforementioned deducted amount. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
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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 by Presidential Decree No. 20618, 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 income 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 Ministerial Decree of Strategy and Finance (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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008>
1. In cases of income tax for which the deadline for a final return on tax base has not expired, its return deadline: Provided, That if the period from the date the disaster occurred to the deadline for return is less than one month, it shall be one month from the date of disaster occurrence;
2. In cases of unpaid income tax, and that payable, as of the date of disaster occurrence other than those of subparagraph 1, one month 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 by Presidential Decree No. 14860, Dec. 30, 1995>
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Article 119 (Calculation of Common Profits and Losses)
Where a person conducts business subject to income tax reduction or exemption pursuant to Article 59-2 (1) of the Act or other Acts and other business concurrently, common necessary expenses and the amount of common income for the tax-reduced or tax-exempt business, or other business shall be calculated separately, as prescribed by Ministerial Decree of Strategy and Finance.
[This Article Added by Presidential Decree No. 22034, Feb. 18, 2010]
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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 59-2 (1) 2 of the Act means any of the following income:
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 by Presidential Decree No. 22185, Jun. 8, 2010]
Section 6 Special Cases in Calculation of Amount of Tax
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Articles 120 and 121 Deleted. <by Presidential Decree No. 17825, Dec. 30, 2002>
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Article 121-2 Deleted. <by Presidential Decree No. 18173, Dec. 30, 2003>
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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/she constructs and sells buildings for himself/herself) and real estate development and supply business according to the Korea Standard Industry Code: Provided, That 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, 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 house or parcel of land: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 24356, Feb. 15, 2013>
1. Necessary expenses of the transferred property calculated under the provisions of Article 163 (1) through (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 by Presidential Decree No. 22580, 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 by Presidential Decree No. 22580, 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 Ministerial Decree of Strategy and Finance. <Added by Presidential Decree No. 22580, Dec. 30, 2010>
(6) The calculation of amount of tax under Article 64 of the Act and other necessary matters shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
[This Article Added by Presidential Decree No. 18173, Dec. 30, 2003]
Section 7 Interim Prepayment, Preliminary Return, and Payment of Tax
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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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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;
4. Other income determined by Ministerial Decree of Strategy and Finance.
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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 by Presidential Decree No. 17032, Dec. 29, 2000>
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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 Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 20720, Feb. 29, 2008>
(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 by Presidential Decree No. 17032, Dec. 29, 2000>
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Article 126 Deleted. <by Presidential Decree No. 15191, Dec. 31, 1996>
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Article 127 (Preliminary Return on Profit Margin from Sale and Purchase of Land, etc. 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 Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(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/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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 22034, 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.
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Article 129 (Determination, Revision and Notification of Profit Margin from Sale and Purchase of Land, etc. and Amount of Tax)
(1) Profit margin from sale and purchase of land, etc. under Article 69 of the Act shall be calculated as follows: <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, Feb. 18, 2010>
1. It shall be calculated based on documentary evidence which a real estate broker submits when making the preliminary return on profit margin from 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 by Presidential Decree No. 23588, 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/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 by Presidential Decree No. 22034, Feb. 18, 2010>
Section 8 Final Return on Tax Base and Voluntary Payment
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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 of global income and the calculation of tax for payment prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) "Documents prescribed by Presidential Decree" in Article 70 (4) 1 of the Act means those falling under any of the following: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Deleted; <by Presidential Decree No. 19507, 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 Decree 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 Ministerial Decree of Strategy and Finance, such as a detailed statement of calculation of the amount of income, etc. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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 Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
(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, That where the filer does not consent to the confirmation or it is unascertainable, by his/her certified transcript of resident registration card, as to whether he/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/her certified transcript of resident registration card or certificate of a register of familial relationship thereto. <Amended by Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22151, May 4, 2010>
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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 Ministerial Decree of Strategy and Finance, which are prepared for adjustment of the difference between the Act and corporate accounting in the calculation of the amount of income, such as the timing for attribution of income and necessary expenses, the acquisition and appraisal of assets and liabilities. <Added by Presidential Decree No. 22185, Jun. 8, 2010>
(2) In cases of a business operator prescribed by Ministerial Decree of Strategy and Finance deemed necessary for faithful tax payment, a statement of adjustment shall be prepared by 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). <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22185, Jun. 8, 2010>
(3) Documents prescribed by Ministerial Decree of Strategy and Finance shall be attached to a statement of adjustment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22185, Jun. 8, 2010>
(4) Matters necessary for the qualifications of a certified tax accountant who may prepare a statement of adjustment shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22185, Jun. 8, 2010>
(5) Any business operator who attaches a statement of adjustment prepared by a certified tax accountant, and who satisfies the requirements prescribed by Ministerial Decree of Strategy and Finance, may omit attaching the documents determined by the Commissioner of the National Tax Service from 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/she deems them necessary for the analyses, etc. of the details of returns. <Added by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22185, Jun. 8, 2010>
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Article 132 (Detailed Statement of Received Receipts, Etc.)
(1) Deleted. <by Presidential Decree No. 15969, Dec. 31, 1998>
(2) Deleted. <by Presidential Decree No. 23588, 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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 21301, Feb. 4, 2009>
(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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
1. Any business operator who has commenced a new business during the pertinent 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.
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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 in the relevant taxable period exceeds the amount classified as follows (hereinafter referred to as "business operator subject to confirmation of compliant filing"): Provided, That in cases of business operators engaging in enterprise services under Appendix 3-3 among those who engage in the businesses falling under subparagraph 1 or 2, it refers to the business operators of at least the amount under subparagraph 3: <Amended by Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013; Presidential Decree No. 24574, Jun. 11, 2013>
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 items (b) and (c): Two billion won;
2. Manufacturing business, lodging and restaurant business, electric power, gas, steam and water service business, sewage, waste disposal, raw material recycling and environment rehabilitation business, construction business (excluding non-residential building construction business, but including residential building development and supply business), transportation business, publication, film, broadcasting and telecommunications business, information service business, financial business and insurance business, commodities brokerage service: One billion won;
3. Real estate leasing service under Article 45 (2) of the Act, real estate-related service, leasing service (excluding real estate leasing service), specialized/scientific and technical services, business facility management and business support services, educational service, 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 operates a type of business falling under subparagraphs 1 through 3 of the same paragraph, it shall be governed by the amount of income computed by applying Article 208 (7) mutatis mutandis.
(3) "Person prescribed by Presidential Decree such as a tax accountant" in Article 70-2 (1) of the Act means a 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 corporation or accounting corporation (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/she shall not prepare and submit the certificate of confirmation of compliant filing with respect to the propriety of his/her business income;
(5) A business operator subject to confirmation of compliant filing shall appoint a tax accountant, etc. who will confirm the compliant filing and report such appointment in the form prescribed by Ministerial Decree of Strategy and Finance by February 10 of the following year of the relevant taxable period to the head of the competent tax office having jurisdiction over the place for tax payment.
(6) Necessary matters concerning the form and submission of a certificate of compliant filing other than the matters prescribed in paragraphs (1) through (5) shall be prescribed by the Minister of Strategy and Finance.
[This Article Added by Presidential Decree No. 22950, Jun. 3, 2011]
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Article 134 (Additional Return and Payment)
(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 to the main sentence 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 Article 192 (1) 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 by Presidential Decree No. 22034, 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 (9) of the Act files an additional return and pays 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 and pays the tax before the end of two months after the month in which the date of receipt of such notice falls), he/she shall be deemed to have filed the return and paid the tax by the deadline under Article 70 or 74 of the Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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/her salary for the period of unfair dismissal pursuant to the court’s decision, reconciliation, etc. and he/she has additionally returns and pays 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/she shall be deemed to have returned and paid by the deadline under Article 70 or 74. <Added by Presidential Decree No. 23588, Feb. 2, 2012>
(5) Where a person applies for reduction or exemption of tax when filing an additional return and paying tax pursuant to paragraphs (1) through (4), he/she shall be deemed to have applied for the tax reduction or exemption pursuant to Article 75 (1) of the Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
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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 of retirement income and the statement of payment prescribed by Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the place for tax payment.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 136 Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
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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, That 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 by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, 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/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, etc. Act, and receives the sales allowances, etc. according to his/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. Any person who receives sales allowances, etc. according to his/her sales performances in return for providing a contracted sales and delivery service for which he/she independently delivers a beverage to general consumers without opening a business place for such sales and delivery service.
(2) through (4) Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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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 Ministerial Decree of Strategy and Finance with the final return on tax base to the head of the competent tax office having jurisdiction over place for tax payment. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(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 Added by Presidential Decree No. 22580, Dec. 30, 2010]
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Article 138 (Application for Reduction and Redemption of Tax)
(1) Any person who intends to have the tax on income from overseas navigation business reduced or exempted under Articles 59-2 (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 form for the reduction or exemption of tax prescribed by Ministerial Decree of Strategy and Finance along with the final return on the tax base. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Any person who intends to have the tax on wage and salary income reduced or exempted under Articles 59-2 (1) 1 and 75 (2) of the Act shall submit an application for the reduction or exemption of the tax amount prescribed by Ministerial Decree of Strategy and Finance to the head of the competent tax office in charge of withholding tax, through the person who pays wage and salary income in the Republic of Korea, by not later than the 10th day of the month following that in which such reduction or exemption is sought. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(2) Deleted. <by Presidential Decree No. 21301, Feb. 4, 2009>
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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 exceeding 10 million won;
2. In cases where the amount of tax payable exceeds 20 million won, the amount which is 50/100 or less of such amount of tax.
Section 9 Report and Verification on Current Status of Places of Business
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Article 141 (Reporti 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 Ministerial Decree of Strategy and Finance, 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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(2) "Matters prescribed by Presidential Decree" in Article 78 (2) 4 of the Act means the following matters: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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. Details of expenses, including rents, purchase prices, and labor cost;
4. Other matters concerning the current statues of the place of business prescribed by Ministerial Decree of Strategy and Finance.
(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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 19890, Feb. 28, 2007>
(4) Deleted. <by Presidential Decree No. 23588, Feb. 2, 2012>
(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 by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 19890, Feb. 28, 2007>
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/her business.
Section 10 Determination, Revision, Collection and Refund
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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, That 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 by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, 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.
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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 by Presidential Decree No. 22034, Feb. 18, 2010>
1. Where necessary books and documentary evidence is missing or important parts thereof are insufficient or false, for the calculation of the tax base;
2. Where it is obvious that the details of record-keeping 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 record-keeping 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 and revised based on estimation under the proviso to Article 80 (3) of the Act, the amount of tax base shall be calculated by making personal deduction and special deduction under Articles 50 through 52 of the Act from the amount of income assessed under paragraph (3).
(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, That subparagraph 1-2 shall apply only to those subject to the simplified expense rate: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. The method of determining or revising, as the relevant amount of income (hereafter referred to as "standard amount of income" in this Article), the amount obtained by deducting the amount under the following items from the amount of income. In such cases, if the amount to be deducted exceeds the amount of income, the amount in excess shall be deemed non-existent: Provided, That where the standard amount of income is in excess of the amount calculated by multiplying the amount of income under subparagraph 1-2 by the multiplying factor prescribed by Ministerial Decree of Strategy and Finance, the amount calculated by multiplication of such magnitude may be decided as the amount of income until the amount of income is determined or reassessed for the taxable period in which December 31, 2015 arrives:
(a) Purchase costs (excluding those for fixed assets for business; hereafter the same shall apply in this Article) and rent expenses on fixed assets for business which are paid or payable by 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 That, in cases of a person liable to double-entry bookkeeping under Article 160 (3) of the Act, 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, 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 correcting the amount calculated by multiplying the amount of business income (hereinafter referred to as "business income subject to the year-end tax settlement") under Article 73 (1) 4 of the Act by the income rate for business income subject to the year-end tax settlement under 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 who is deemed to make the most accurate record-keeping, where the standard expense rate or the simplified expense rate is not determined, or where the books or other documentary evidence is missing or destroyed due to natural disasters and other force majeure: Provided, That the amount of income shall be determined or revised by the return under Article 70 of the Act and its attached documents in cases where no business operator exists in the same business type and where the books, 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, 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 the part other than the subparagraphs of paragraph (3) means any of the following business operators: <Added by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 22950, Jun. 3, 2011; Presidential Decree No. 24356, Feb. 15, 2013>
1. Any business operator who has commenced a business anew in the relevant taxable period, and whose income for the relevant taxable period is below the amount specified in each item of Article 208 (5) 2;
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) falls short of the amount in the following items:
(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 items (b) and (c): 60 million won;
(b) Manufacturing business, lodging and restaurant business, electric power, gas, steam and water service business, sewage, waste disposal, raw material recycling and environment rehabilitation business, construction business (excluding non-residential building construction business, but including residential building development and supply business), transportation business, publication, image, broadcast and telecommunications and information service business, financial business and insurance business, commodities brokerage service: 36 million won;
(c) Real estate leasing service under Article 45 (2) of the Act, real estate-related service, leasing service (excluding real estate leasing service), specialized/scientific and technical services, business facility management and business support service, educational service, health and social welfare services, service industry related to art, sports and leisure, associations and organizations, repair and other personal services, 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 the fixed assets for business under paragraph (3) 1 (a) and the kinds of documentary evidence under paragraph (3) 1 (a) and (b). <Added by Presidential Decree No. 17032, Dec. 29, 2000>
(6) In applying paragraph (4) 2, if a person concurrently operates a type of business falling under items (a) through (c) of the same subparagraph or has two or more places of business, it shall be governed by the amount of income computed by applying Article 208 (7) mutatis mutandis. <Added by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008>
(7) Notwithstanding paragraph (4), a business operator who falls under any of the following shall not be included in the persons subject to simplified expense rate: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. A business operator under Article 147-3;
2. A person who engages in a business that falls under Article 74 (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/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/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 three or more times and the aggregate of such amount exceeds one million won, or five or more 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) (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 amount of income assessed pursuant to paragraph (3). <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
(9) Where a person fails to submit evidentiary documents in accordance with paragraph (3) 1 (a), he/she shall submit a detailed statement on expenditure of major expenses prescribed by Ministerial Decree of Strategy and Finance. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
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Article 144 (Calculation of Amount of Income at Time of Estimation, Determination and Revision)
(1) In cases 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 the method falling under any of the following subparagraphs: <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998>
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 that is deemed to be accurate;
2. In cases where there exists any business efficiency which is 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 the criteria falling under any of the following items, which are 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. In cases 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 the end-users, the method of calculation by the criteria for observed investigation set forth by the Commissioner of the National Tax Service.
(2) In cases where the amount of other income under Article 21 (1) 7 of the Act cannot be assessed by the books and other documentary evidences, such income amounts shall be governed by the amount falling under any of the following subparagraphs: <Added by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007>
1. Deleted; <by Presidential Decree No. 18173, 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
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 total of the following amounts: <Added by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005>
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. Amount of value-added tax deducted by issuing a credit card sales slip under Article 32-2 (1) of the Value-Added Tax Act.
(4) In cases 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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 17825, Dec. 30, 2002>
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Article 145 (Standard and Simplified Expense Rates)
(1) Standard expense rate or simplified expense rate, and multiplying factor under Article 143 (3) shall be expense rates, which has been 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 a review by the Deliberation Committee of Standard Expense Rate. <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 22185, Jun. 8, 2010>
(2) The Deliberation Committee of Standard Expense Rate under paragraph (1) shall be established at the National Tax Service, and the Deputy Commissioner of the National Tax Service shall be its chairperson; and its members shall consist of eleven persons commissioned by the Commissioner of the National Tax Service at the recommendation of business colleges and universities, academic research organizations, economic organizations and financial companies, etc., and the public officials prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(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 therof) through a review by the Deliberation Committee of Standard Expense Rate 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 by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
(4) Matters necessary for the organization and operation of the Deliberation Committee of Standard Expense Rate shall be determined by the Commissioner of the National Tax Service. <Amended by Presidential Decree No. 17032, Dec. 29, 2000>
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Articles 146 and 146-2 Deleted. <by Presidential Decree No. 19890, Feb. 28, 2007>
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Article 147 (Calculation of Penalty Tax for Unfaithful Report)
(1) "Cases of obscurity prescribed by Presidential Decree" in Article 81 (1) 2 of the Act means any of the following cases: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. The domicile, name, tax payment number (in cases of substitution by the resident registration number, the resident registration number) or the business operator's registration number, the types of income, the reversion fiscal year of income or paid amount have not been stated or falsely stated in the statement of payment submitted, and the fact of payment is incapable of verification;
2. Where the securities standard code has not been stated or falsely stated on the statement of payment submitted and the payment specifications of interest and dividend income and thereby the issuer of securities is not identifiable;
3. Where the deferred retirement income tax pursuant to Article 202-2 (1) has not been stated or falsely stated on the submitted detailed statement of payment.
(2) The payment amount falling under the following subparagraphs shall not be included in the amount of obscurity under paragraph (1): <Amended by Presidential Decree No. 15969, Dec. 31, 1998>
1. The amount paid to a person who receives the tax payment number, or to a person who receives a business registration certificate, as of the payment date;
2. The payment amount other than those of subparagraph 1, for which it is confirmed that whereabouts of such receiver becomes unknown after the payment.
(3) In applying Article 81 (1) of the Act, pension income and retirement income under Articles 20-3 (2) and 22 (2) of the Act shall be deemed the paid amount in cases of pension income and retirement income. <Added by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 19890, Feb. 28, 2007>
(4) "Items prescribed by Presidential Decree" in the main sentence of Article 81 (3) 1 of the Act means items mentioned under Article 211 (1) 1 through 4 (hereafter referred to as "necessary entries" in this paragraph), and where the fact of transaction is verified in view of other entries on the relevant account statement while a part of the necessary entry field on the issued account statement is made erroneously, it shall not be deemed an account statement which is entered incorrectly under Article 81 (3) 1 of the Act. <Added by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
(5) Items to be entered in the aggregate table of invoices by seller and the aggregate table of invoices by purchaser in the main sentence of Article 81 (3) 2 of the Act means the registration number and the value of supply by customer, and "amount of sales or purchase, the transaction of which may be verified as prescribed by Presidential Decree" in the proviso to the same subparagraph, means the value of sale or purchase of the portion of transactions confirmed by the statements of account which have been issued or received. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(6) "Amount of purchase, the transaction of which may be verified as prescribed by Presidential Decree" in the proviso to Article 81 (3) 3 of the Act means the value of purchase of the portion of transactions confirmed with a tax invoice issued accordingly. <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
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Article 147-2 (Penalty Taxes for Failure to Receive Evidence and Failure to Submit Specification of Receiving Receipts)
(1) Article 81 (4) of the Act shall not apply to entertainment expenses which are not included in necessary expenses under Article 35 (2) of the Act. <Amended by Presidential Decree No. 19890, Feb. 28, 2007>
(2) "Small-scale business operator prescribed by Presidential Decree" in the proviso to Article 81 (4), and paragraphs (5) and (8) of the same Article of the Act means a business operator who falls under any subparagraph of Article 132 (4). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) "Person whose amount of income is estimated, as prescribed by Presidential Decree" in the proviso to Article 81 (4), and (5) of the Act means a person whose income is estimated in accordance with Article 143 (3): Provided, That the foregoing shall apply only to the portion of income estimated out of the amount that constitutes expenses except those under paragraph (3) 1 (a) and (b) of the same Article in cases of any person other than those subject to the simplified expense rate under Article 143 (4). <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
(4) "Cases prescribed by Presidential Decree" in Article 81 (5) of the Act means cases in which the fact of transaction cannot be confirmed because such matters have not been entered or entered differently from the fact as the trade name of counterpart of trade, name, business registration number (residents registration number in cases it substitutes for such number), date of transaction and payment amount on the submitted specification of receiving receipts. <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 147-3 (Penalty Tax for Unfaithful Reporting on Current Status of Business Place)
"Business operator prescribed by Presidential Decree" in Article 81 (6) 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. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 147-4 (Penalty Tax for Unfaithful Registration of Joint Business Place)
"Cases prescribed by Presidential Decree" in Article 81 (7) 2 of the Act means cases that fall under any of the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
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 Added by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 147-5 (Special Applicability concerning Penalty Tax in Case of Revision, etc.)
(1) In cases where a business operator ceases to correspond to a business operator under Article 208 (5) as his/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/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 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/she shall be deemed a person subject to simple bookkeeping by not later than the taxable period immediately preceding that wherein he/she has been converted to a person subject to double-entry bookkeeping. <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22580, Dec. 30, 2010>
(2) Article 81 (11) 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. <Added by Presidential Decree No. 19890, Feb. 28, 2007>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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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 by Presidential Decree No. 14860, 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 by Presidential Decree No. 22034, 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) and (5) Deleted. <by Presidential Decree No. 20618, 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 determined by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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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/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/she shall divide the tax base and amount of tax pro rata one's share, and notify by heir respectively.
(3) Deleted. <by Presidential Decree No. 17825, Dec. 30, 2002>
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Article 149-2 (Refund from Loss Carryback)
(1) "Small and medium enterprise prescribed by Presidential Decree" in the former part of Article 85-2 (1) of the Act means an enterprise prescribed in Article 2 of the Enforcement Decree of the Restriction of Special Taxation Act; and "amount of income tax prescribed by Presidential Decree" means the settled tax amount of global income of the relevant small and medium enterprise for the preceding taxable period. <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 22034, 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 Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the place for tax payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(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 cancelled 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 date of making a refund of loss carryback to the date of deciding the refund cancellation by the rate pursuant to Article 27-4 of the Enforcement Decree of the Framework Act on National Taxes: Provided, That 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
Refund amount of tax under Article 85-2 (3) of the Act×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/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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 15191, Dec. 31, 1996]
Section 11 Special Cases for Places of Joint Business
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Article 150 (Special Cases for Joint Place of Business)
(1) "Representative joint business operator" in Article 87 (4) of the Act means a person who is not a joint investment business operator and falls under the following subparagraphs: <Added by Presidential Decree No. 19890, 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, That 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, That 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 by Presidential Decree No. 19890, 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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008>
(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 Ministerial Decree of Strategy and Finance, within 15 days from the end of the taxable period on which the day when such cause or event occurred falls. <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008>
(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 by Presidential Decree No. 19890, Feb. 28, 2007>
(6) In cases where a joint business operator files a final return on tax base, he/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 by Presidential Decree No. 19890, Feb. 28, 2007>
(7) Matters necessary for places of joint business other than paragraphs (1) through (6) shall be determined by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008>
CHAPTER Ⅱ Deleted.
Section 1 Deleted.
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Articles 150-2 through 150-7 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
Section 2 Deleted.
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Articles 150-8 and 150-9 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
Section 3 Deleted.
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Article 150-10 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
CHAPTER Ⅲ RESIDENT'S TAX LIABILITIES FOR CAPITAL GAINS
Section 1 Definition of Transfer
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Article 151 (Cases Not Deemed Transfer)
(1) In applying Article 88 (1) of the Act, if the debtor concludes a contract for transfer of assets to guarantee the repayment of debts, and makes a report by attaching a copy of the contract satisfying the requirements under each of the following subparagraphs to the final return of tax base, it shall not be deemed a transfer:
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 to have been transferred.
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Article 152 (Definition of Land Substitution)
(1) "Land substitution" in Article 88 (2) of the Act means cases where a business executor offers other land in the relevant area or part of the building subject to disposition by the business executor including its co-owned share of the land on which the building stands to the land owner or the related persons in the business area after completion of business in lieu of the previous land or building (including those to be divided, combined or exchanged, according to a business execution), pursuant to the project for urban development under the Urban Development Act, the project for rearrangement of agricultural production infrastructure under the Rearrangement of Agricultural and Fishing Villages Act, and other Acts. <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21887, Dec. 15, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
(2) "Reserved land" in Article 88 (2) of the Act means the land reserved pursuant to the Acts relevant thereto by the business executor under paragraph (1) in order to use it as the land falling under each of the following, without designating it as a land for substitution: <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
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.
Section 2 Non-Taxation and Tax Reduction or Exemption for Capital Gains
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Article 153 (Non-taxation of Farmland)
(1) "Cases prescribed by Presidential Decree" in Article 89 (1) 2 of the Act means cases where any of the following farmland (excluding farmland falling under any subparagraph of paragraph (4)) is exchanged or divided or combined, and where the difference of land value of both sides of such exchange and division or combining does not exceed 1/4 of the larger value: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 19463, Apr. 28, 2006; Presidential Decree No. 21565, Jun. 26, 2009; Presidential Decree No. 22034, 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 the 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 three or more 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. <by Presidential Decree No. 19254, Dec. 31, 2005>
(3) "Location of the 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): <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
1. The area within a Si (including the administrative city established pursuant to Article 15 (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. The area within a Si/Gun/Gu adjacent to the area under subparagraph 1;
3. The area within a 20 kilometer radius from farmland.
(4) Farmland which is excluded from the farmland under paragraph (1) shall be as follows: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
1. Farmland in a residential area, commercial area or industrial area under the National Land Planning and Utilization Act from 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 area within the Special Self-Governing City), Special Self-Governing Province (excluding Eup/Myeon area within the administrative city established pursuant to Article 15 (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, where it falls under any of the following , it shall be excluded:
(a) Where there are one thousand or more land owners 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 Ministerial Decree of Strategy and Finance;
(b) In cases of extenuating circumstances prescribed by Ministerial Decree of Strategy and Finance, 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 Ministerial Decree of Strategy and Finance;
2. Where there exists a designation of the land to be substituted 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, etc. for Public Works or expropriated under other Acts, within three years after its acquisition, such land shall be deemed to have been cultivated while residing for three or more years in the location of farmland. <Amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, 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 by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 19254, Dec. 31, 2005>
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Article 154 (Scope of One House for One Household)
(1) "One house for one household prescribed by Presidential Decree" in Article 89 (1) 3 of the Act means cases where one household comprised of a resident, his/her spouse, and family members who make their living together at the same domicile or place of residence (hereinafter referred to as "one household") possess only one house in the Republic of Korea as of the date of transfer, and the holding period of relevant house is at least two years (in cases of the house owned by the resident falling under paragraph (8) 2, three years): Provided, That in any of the following cases and in which one household possesses one house in the Republic of Korea as of the transfer date, it shall not be subject to such limit on the holding period: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17751, Oct. 1, 2002; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18127, Nov. 20, 2003; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22950, Jun. 3, 2011; Presidential Decree No. 23887, Jun. 29, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Where a constructed house for lease under the Rental Housing Act is acquired and transferred, if the dwelling period from the date of rental of the relevant constructed house for rent to the date of transferring the relevant house is five or more years;
2. Any of the following cases. In such cases, the remaining house and its appurtenant land which are transferred within five years from the relevant transfer date or expropriation date shall be deemed to be included in cases of 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, etc. for Public Works or expropriated under other Acts;
(b) Where all members of a household emigrated from Korea due to emigration under the Emigration Act: Provided, That it is limited to the transfer made within two years from the date of departure in cases where one house was held as of 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 not less than a year: Provided, That it is limited to the transfer made within two years from the date of departure in cases where one house was held as of the date of departure;
3. Where a house resided in for not less than one year is transferred due to school, work, medical treatment and recuperation and other extenuating circumstances determined by Ministerial Decree of Strategy and Finance.
(2) In any of the following cases, it shall be deemed one household under paragraph (1), even if one has no spouse: <Amended by Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20720, Feb. 29, 2008>
1. Where the relevant resident is 30 or more years old;
2. Where one's spouse is deceased or divorced from him/her;
3. Where the income under the provisions of Article 4 of the Act is not less than the level of the lowest living expenses under subparagraph 6 of Article 2 of the National Basic Living Security Act, and where an independent living may be maintained while managing and maintaining the possessed house or land: Provided, That cases of a minor shall be excluded, but the same shall not apply to cases where a formation of one household is inevitable due to the minor's marriage, the decease of family members and other reasons prescribed by Ministerial Decree of Strategy and Finance.
(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 the land appurtenant to a house, such whole construction shall be deemed a house: Provided, That 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 by Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
(4) In cases under the proviso to 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(5) The calculation of holding period under paragraph (1) shall be governed by Article 95 (4) of the Act, and the residence period under the same paragraph shall be governed by the period from the moving-in date to the date of moving out as recorded on the resident registration card. <Amended by Presidential Decree No. 14860, Dec. 30, 1995>
(6) "Family" in paragraph (1) means lineal descendants and ascendents (including their spouses) and brothers and sisters of the resident and his/her spouse, and includes those who have temporarily left the original domicile or place of residence for school attendance, medical treatment, status of work or business. <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15969, Dec. 31, 1998>
(7) "Multiples prescribed by Presidential Decree by region" in Article 89 (1) 3 of the Act means the following multiples: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Land located in the urban area under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act: Five times;
2. Other land: Ten times.
(8) As for the calculation of residence period or holding period pursuant to paragraph (1), the following periods shall be aggregated: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
1. The residence period and holding period in the destroyed house and reconstructed house where the house is reconstructed due to loss by fire, collapse, wear and tear, etc. during residence period or holding period;
2. The residence period and holding period where a nonresident has been holding the house concerned for three or more years and has been 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 holding period 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 two or more houses are transferred on the same day, such transfer of houses shall be deemed to have been made in accordance with the order selected by the relevant resident. <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 19254, Dec. 31, 2005>
(10) Where one house for one household under paragraph (1) satisfies all of the following requirements, paragraph (1) shall apply by deeming that the relevant household possesses one house in the Republic of Korea for the portion of period only after the date of transfer of the immediately preceeding residential house under the latter part other than the subparagraphs of Article 155 (19): <Added by Presidential Decree No. 23218, Oct. 14, 2011>
1. Such house should have been registered as a rental house under Article 6 of the Rental Housing Act;
2. Such household should have held one immediately preceeding residential house under the latter part other than each subparagraph of Article 155 (19) during the holding period of the relevant house.
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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 by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 155 (Special Cases concerning One House for One Household)
(1) When one household having one house in the Republic of Korea becomes to temporarily possess two houses by acquiring another house (including cases where it acquires by constructing a new one by itself) before it transfers such house (hereafter referred to as “previous house” in this paragraph), if it acquires another house after at least one year from the date of acquisition of the previous house and then transfers the previous house within three years (including cases where unable to transfer within three years, and which falls under the causes determined by Ministerial Decree of Strategy and Finance) from the date of acquiring another house, it shall be deemed one house for one household, and Article 154 (1) shall be applicable. In such cases, where falling under any of Article 154 (1) 1, 2 (a) and 3, the requirements of acquiring other houses after at least one year from the date of acquiring the previous house shall not apply, and where a part of the previous house and appurtenant land is purchased by consultation or expropriated under Article 154 (1) 2 (a), if the relevant remaining house and appurtenant land are transferred within three years from the date of such transfer or expropriation, the transfer of such remaining house and appurtenant land shall be deemed to be included in the transfer or expropriation of the previous house and appurtenant land. <Amended by Presidential Decree No. 17555, Mar. 30, 2002; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 23887, Jun. 29, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
(2) Where one household which owns respectively one inherited house (including a newly-built house acquired after the completion of project execution as one succeeds to the association member's relocation right; referring to one house according to the order falling under any of the following, when the decedent has owned two or more houses at the time of commencement of inheritance) and one other house (applicable only to the other house owned at the time of inheritance; hereafter referred to as "general house" in this paragraph) in the Republic of Korea, transfers the general house, Article 154 (1) shall apply by deeming that it owns one house in the Republic of Korea; provided, where a successor and a predecessor form one household at the time of commencement of inheritance, a house shall be deemed inherited only in cases where such house is possessed by a person who owns one house and forms one household becomes the owner of two houses by combining households to provide for his/her lineal ascendants (including lineal ascendants of his/her spouse; only applicable to cases where one or all of the lineal ascendants are above 60 years old and own one house as of the date they combine households), and such house has been possessed before households are combined (hereafter the same shall apply in paragraphs (3), (7) 1 and Article 156-2 (7) 1). <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 17751, Oct. 1, 2002; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
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 two or more 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 two or more 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 two or more houses in which the decedent has never resided, and for which the holding periods are the same.
(3) In applying Article 154 (1), when a house, other than the co-inherited house (referring to one house owned jointly by many persons due to the inheritance), is transferred, the relevant co-inherited house shall not be deemed the house of the relevant resident; provided, in cases of an heir whose share in the inheritance is largest, this shall not apply, and in such cases, if there are two or more heirs having the largest shares in the inheritance, the heir falling under any of the following according to the order indicated thereunder, from among such two or more persons, shall be deemed to own the relevant co-inherited house: <Amended by Presidential Decree No. 14860, Dec. 30, 1995>
1. A person who resides in the relevant house;
2. Deleted; <by Presidential Decree No. 20618, Feb. 22, 2008>
3. The oldest person.
(4) Where a person having one house and forming one household comes to combine the households in order to live together and support a lineal ascendent (including his/her spouse's lineal ascendents and further including where one of the spouse’s lineal ascendents is less than 60 years old; hereafter the same shall apply in this Article) of 60 or more years old having one house, and consequently, one household comes to own two houses, the house which is first transferred within five years from the combining date shall be deemed one house for one household, and be governed by Article 154 (1). <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17751, Oct. 1, 2002; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
(5) Where a person having one house comes to own two houses by marrying another person having one house or where a person owning no house who serves, by living together, his/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 which is first transferred within five years from the wedding day shall respectively be deemed one house for one household, and be subject to the provisions of Article 154 (1). <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17751, Oct. 1, 2002; Presidential Decree No. 20301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
(6) Where one household having one house falling under any of the following, and another house (hereinafter referred to as "general house" in this paragraph), 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 subject to Article 154 (1): <Amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20222, Aug. 17, 2007; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22560, Dec. 29, 2010>
1. Designated cultural property under Article 2 (2) of the Cultural Heritage Protection Act and registered cultural property under Article 53 (1) of the same Act;
2. and 3. Deleted. <by Presidential Decree No. 16112, Feb. 8, 1999>
(7) Where one household having one house located in the area of an Eup (excluding the area within the urban area) or Myeon (hereafter referred to as "house in an agricultural or fishing village" in this Article) from among the areas outside of the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter referred to as "Seoul Metropolitan area" in this Article), which fall under any of the following, and another house (hereafter referred to as "general house" in this paragraph and paragraphs (11) through (13)), 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 Article 154 (1) shall be applicable to the household: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21138, Nov. 28, 2008>
1. Inherited house (limited to cases where the decedent has resided therein for five or more years after its acquisition);
2. House of rural exodus in which those who have ceased farming (including those who quit fisheries; hereafter the same shall apply in this Article) have resided for five or more years after the date of acquisition;
3. House of return to the farm which has been acquired 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 referred to as "general house" in this paragraph) due to education prescribed by Ministerial Decree of Strategy and Finance, circumstances for the job, medical treatment of a disease, or any other unavoidable cause or reason (hereafter referred to as “unavoidable cause” in this paragraph) transfers the general house to someone within three years from the date when the unavoidable cause is resolved, such household shall be deemed to own one house in the Republic of Korea and Article 154 (1) shall be applicable to the household. <Added by Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 23588, Feb. 2, 2012>
(9) "House of rural exodus" in paragraph (7) 2 means a house in which the whole or part of family members living with a resident or his/her spouse, cannot reside any longer because those who have once engaged in farming or fishing have moved into any other Si (including the administrative city established pursuant to Article 15 (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 and Metropolitan City) or an Eup/Myeon due to change of their job, and which is owned by those who have ceased farming. <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 24356, Feb. 15, 2013>
(10) "Houses of those returned to farming" in paragraph (7) 3 means houses acquired by those who intend to engage in farming or fishing (including houses acquired before returning to farming) and resided in by them, and which meet the following conditions: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009>
1. A house shall be located in a place in connection with him/her prescribed by Ministerial Decree of Strategy and Finance;
2. A house shall not fall under an expensive house under Article 156;
3. The plottage shall be 660 or less square meters;
4. A house shall be acquired for the purpose of farming or fishing, and which shall fall under any of the following items:
(a) A house shall be cases where a person owning the farmland of one thousand or more square meters acquires the house located in the seat of the relevant farmland (referring to the seat of the farmland under Article 153 (3));
(b) A house shall be acquired by a fisherman determined by Ministerial Decree of Strategy and Finance.
(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 be applicable only to one general house first transferred after a return to farming.
(12) Where the owners of houses of those return to farming, who subjects to paragraph (7), fail to engage continually in farming or fishing for three or more years from the date of returning to farming (referring to the date on which residing has begun after moving their resident registration to houses of return to farming), or fail to reside in the relevant houses during such period, general houses transferred so shall not be deemed one house for one household and the owners of houses of those return to farming 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 causing him/her to fail to engage in farming or fishing for at least three years or fail to reside in the house concerned for the said period of time belongs. In such cases, in calculating a three-year period, if any inheritance commences during such period, farming or fishing period of a decedent and that of an heir shall be aggregated: <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
Capital gain tax to be paid = Amount of tax that would have been paid had paragraph (7) not applied at the time of transferring a general house Amount of tax that was paid after application of paragraph (7) at the time of transferring a 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 Ministerial Decree of Strategy and Finance, accompanied by documents prescribed by Ministerial Decree of Strategy and Finance, 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 under subparagraph 1, the head of the competent tax office having jurisdiction over the place for tax payment shall request him/her to submit such documents: <Amended by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. The certified copy/abstract of his/her resident registration card;
2. The certified copy of the land/building ledger and register of his/her general house;
3. The certified copy of the land/building ledger and register of his/her house in an agricultural and fishing village;
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 of an agricultural and fishing village shall be determined by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(15) In applying Article 154 (1), in cases of a multi-family house falling under subparagraph 1 (c) of Appendix 1 of the Enforcement Decree of the Building Act, each divided portion of the multi-family house in which members of a household can reside independently shall be deemed one house; provided, if a multi-family house is not parcelled out by each divided portion, but is wholly transferred as one unit for sale, the entire portions of such multi-family house shall be deemed a single house. <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
(16) In applying paragraph (1), "three years" in paragraph (1) shall be construed as "five years", where a corporation in the Seoul Metropolitan area or a public agency under subparagraph 10 of Article 2 of the Special Act on Balanced National 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 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 the administrative city established pursuant to Article 15 (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 this case, the requirement of acquiring another house after at least one year from the date of acquisition of the previous house shall not be applied to the one household concerned. <Amended by Presidential Decree No. 23887, Jun. 29, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
(17) Where one household possessing any of the association member's relocation right under the main sentence of Article 89 (2) of the Act (hereinafter referred to as "association member's relocation right") (limited to the household possessing the existing house falling under Article 154 (1) as of the authorization date (when the existing house is removed before the authorization date, the removal date of the existing house) of management disposal plans under Article 48 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents) transfers the relevant association member's relocation right, if it falls under any of the following subparagraphs, it shall be deemed one house for one household under Article 154 (1) notwithstanding Article 94 (1) 2 (a) of the Act: <Amended by Presidential Decree No. 23887, Jun. 29, 2012>
1. Where no other house exists as of the date of transfer;
2. Where one house is possessed in addition to one association member's relocation right as of the date of transfer, and the association member's relocation right is transferred within three years from the date of acquisition of the relevant house (including cases prescribed by Ordinance of Ministry of Strategy and Finance, where such right is not transferred within three years).
(18) 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 possesses the inherited house, as designated by his/her share of inheritance under Articles 1009 and 1010 of the same Act; provided, where he/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 gain tax because Article 154 (1) was previously applied to him/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 by Presidential Decree No. 24356, Feb. 15, 2013>
Capital gain tax to be paid = Amount of tax that would have been paid had paragraph (2) or (3) 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
(19) Where one household having a house under Article 167-3 (1) 2 (hereafter referred to as "long-term rental house" in this Article) and another house in the Republic of Korea transfers one house concerned and meets each of the following requirements (hereafter referred to as "residential house" in this Article), Article 154 (1) shall apply by deeming that it has one house in the Republic of Korea. In such cases, where the residential house has been registered as a rental house under Article 6 of the Rental Housing Act and is a residential house (hereafter referred to as "house having an immediately preceding residential house" in this paragraph) having another residential house (where there are two or more residential houses transferred, referring to the residential house that has been transferred lastly) transferred during the holding period (hereafter referred to as "immediately preceding residential house" in this paragraph), Article 154 (1) shall apply by deeming that such household has one house in the Republic of Korea for the portion of period only after the date of transfer of the immediately preceding residential house: <Added by Presidential Decree No. 23218, Oct. 14, 2011; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Residing house: The period of residence (referring to the period of residence after the date when the relevant household registers as a rental house business operator under Article 6 of the Rental Housing Act in cases of a house having an immediately preceding residential house) shall not be less than two years;
2. Long-term rental house: The household should have registered and leased a long-term rental house as a rental house under Article 6 of the Rental Housing Act as of the date of transfer.
(20) 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), Article 19 shall apply by deeming that the relevant rental house is a long-term rental house. <Added by Presidential Decree No. 23218, Oct. 14, 2011>
(21) Where one household is no longer able to meet the lease period requirements after being subjected to paragraph (20) (including cases 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 lease period requirements in subparagraph 2, the relevant provisions thereof shall govern: <Amended by Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Calculation formula for the capital gains tax to be paid:
Amount of tax that should have been paid where not regarding the relevant rental house as a long-term rental house at the time of transfer of the residential house Amount of tax that has been paid by applying paragraph (19) at the time of transfer of the residential house
2. Special cases of calculation of lease period requirements:
(a) Where a household becomes unable to meet the lease period requirements or where unable to lease the number of units required to be leased due to unavoidable causes prescribed by Ministerial Decree of Strategy and Finance, such as expropriation under the Act on Acquisition of and Compensation for Land, etc. for Public Works, it shall be deemed to lease the relevant rental house continuously;
(b) Where there is a ground for a house redevelopment project under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter referred to as "house redevelopment project") or a house reconstruction project pursuant to the same Act (hereinafter referred to as "house reconstruction project"), in order to calculate the period of time not leasing the units required to be leased, the period of time from six months before the date of authorizing a plan for management disposal of the house concerned until six months after the date of completion of such house shall not be included.
(22) Any person who intends to be governed by Article 19 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 Ministerial Decree of Strategy and Finance, together with the following documents, to the head of the competent tax office having jurisdiction over the place for tax payment: <Added by Presidential Decree No. 23218, Oct. 14, 2011; Presidential Decree No. 23588, Feb. 2, 2012>
1. A certificate of registration as a rental business operator under Article 8 (2) of the Enforcement Decree of the Rental Housing Act;
2. A copy of the lease contract of the long-term rental house;
3. A certified copy or a copy of resident registration record card of the lessee;
4. Other documents prescribed by Ministerial Decree of Strategy and Finance.
(23) The head of the competent tax office having jurisdiction over the place for tax payment who receives a report under paragraph (22) shall confirm 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 confirmation of the document mentioned in subparagraph 1, shall have the applicant to submit the document:<Added by Presidential Decree No. 23218, Oct. 14, 2011; Presidential Decree No. 23588, Feb. 2, 2012>
1. A certified copy/extract of resident registration record card;
2. Certified copies of land/building ledger and register of the residential house;
3. A certified copy of register of a long-term rental house or certified copies of land/building ledger.
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Article 155-2 (Special Cases concerning One House for One Household on House of 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 for 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 by Presidential Decree No. 20720, Feb. 29, 2008>
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 Ministerial Decree of Strategy and Finance;
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/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 Ministerial Decree of Strategy and Finance, 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 by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010>
1. The certified copy of the land and building register of other house than the long-term mortgaged house;
2. The certified copy of the land and building register of the long-term mortgaged house.
[This Article Added by Presidential Decree No. 18705, Feb. 19, 2005]
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Article 156 (Scope of High-Priced Houses)
(1) "High-priced house, the value of which exceeds the standard prescribed by Presidential Decree" in Article 89 (1) 3 of the Act, means a house, including land appurtenant thereto, whose aggregate of actual trade values at the time of transfer [referring to the amount obtained by dividing the total of actual transaction price 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 in cases where a house and part of land appurtenant thereto are transferred or the part is held by another person] exceeds 900 million won. <Amended by Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21062, Oct. 7, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(2) In applying the provisions of paragraph (1), the actual trade values falling under the portion deemed a house under the main sentence of Article 154 (3) (including the land appurtenant thereto) shall be included.
(3) In cases of a multi-family house deemed a single house under Article 155 (15), the provisions of paragraph (1) shall apply by deeming the whole of them one house.
[This Article Wholly Amended by Presidential Decree No. 17825, Dec. 30, 2002]
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Article 156-2 (Special Cases concerning One House for One Household in Cases of Possessing House and Association Member's Relocation Right)
(1) "One household prescribed by Presidential Decree" in the main sentence of Article 89 (2) of the Act means one household pursuant to Article 154. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) "Cases prescribed by Presidential Decree" in the proviso to Article 89 (2) of the Act means cases falling under paragraphs (3) through (11). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) Where one household possessing one house in the Republic of Korea comes to temporarily possess one house and one association member's relocation right by acquiring the association member's relocation 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 acquiring the association member's relocation right which was acquired at least one year after the date of acquiring the previous house (including cases corresponding to the reasons provided by Ministerial Decree of Strategy and Finance, 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, 2 (a) and 3, the requirement of acquisition of the association member's relocation right at least one year after the date of acquiring the previous house shall not apply. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 23887, Jun. 29, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
(4) Where one household possessing one house in the Republic of Korea comes to possess temporarily one house and one association member's relocation right by acquiring the association member's relocation right before transferring the relevant house, and where the previous house is transferred after three years elapse from the date of acquiring the association member's relocation right, and when all the following requirements are satisfied, it shall be deemed one house for one household, and Article 154 (1) shall apply: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 23887, Jun. 29, 2012>
1. All members of a household shall move (including cases where some of constituents of a household may not be moved by entering school prescribed by Ministerial Decree of Strategy and Finance, status in work, medical treatment of diseases and other inevitable reasons) into a house within two years after the completion of the house acquired according to a management disposal plan of the house redevelopment project or the house reconstruction project, and continuously reside in the house for not less than one year;
2. The previous house shall be transferred within two years before or after the completion of a house acquired under a management disposal plan for the house redevelopment project or house reconstruction project.
(5) Where one household possessing 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 the house redevelopment project or the house reconstruction project for the relevant house, and transfers the substitute house by meeting all the following requirements, it shall be deemed one house for one household, and Article 154 (1) shall apply. In such cases, the restrictions of holding period or residing period under Article 154 (1) shall not be applied: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. It shall reside for not less than one year by acquiring the substitute house after the approval date of project implementation of the house redevelopment project or the house reconstruction project;
2. It shall reside for not less than one year continuously after all members of a household moving (including cases where some of constituents of a household can not move in by entering school prescribed by Ministerial Decree of Strategy and Finance, status in work, medical treatment of diseases and other inevitable reasons) into the relevant house within two years after the completion of house acquired under the management disposal plans for the house redevelopment project or the house reconstruction project: Provided, That where all members of a household depart from the Republic of Korea because they need to live in a foreign country for one or more years continuously on account of entering school or work within two years after the completion of a house, they shall continuously live in a house one or more year after returning home when there is no reason for departure from Korea (only applicable to cases where such need for departure is removed within three years after departure);
3. It shall transfer the substitute house within two years before or after the completion of house acquired under the management disposal plans for the house redevelopment project or the house reconstruction project.
(6) Where one household possessing the succeeded association member's relocation right (only applicable to the succeeded association member's relocation right in cases where the inheritee does not possess a house at the time of opening an inheritance and only applicable to one association member's relocation right in the order of the following where the inheritee possesses two or more association member's relocation rights at the time of opening an inheritance) and other houses (applicable only to the houses owned at the time of initiation of inheritance; 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, That 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/her lineal ascendants (including lineal ascendants of his/her spouse; only applicable to where any one or all of them are above 60 years old 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. One association member's relocation right for which the inheritee's holding period (referring to the aggregate period of the period of possessing a house and the period of possessing an association member's relocation right; hereafter the same shall apply in this paragraph) is the longest;
2. Where two or more association member's relocation rights exist for which the holding period of an inheritee is the same, one association member's relocation right for which the inheritee's residing period (referring to the period of residing in the house; hereafter the same shall apply in this paragraph) is the longest;
3. Where two or more association member's relocation rights exist for which the holding period of the inheritee and that resided by him/her are all same, one association member's relocation right selected by the inheritor.
(7) Where one household possessing one house under subparagraph 1, or one association member's relocation right under subparagraph 2, one house acquired by the reason other than inheritance (hereafter referred to as "general house" in this paragraph) and one member's relocation right acquired by the reason other than inheritance respectively in the Republic of Korea transfers the general house, it shall be deemed to have the general house and the association member's relocation right acquired by reason other than inheritance in the Republic of Korea, and the provisions of paragraphs (3) through (5) shall apply 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 initiation of inheritance: <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
1. Inherited house. In such cases, where an inheritee has possessed two or more 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 association member's relocation right where an inheritee has not possessed any house at the time of commencing the inheritance. In such cases, where the inheritee has possessed two or more association member's relocation rights at the time of commencing inheritance, it shall be limited to one association member's relocation right under the order under each subparagraph of paragraph (6).
(8) Where one household owns one house and one association member's relocation right, one house and two association member's relocation rights, two houses and one association member's relocation right, or two houses and two association member's relocation rights, 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 "house first transferred" in this paragraph and paragraph (9)) within five years from the date of unity falls under any of the houses under subparagraph 3, 4 or 5, it shall be deemed one house for one household, and Article 154 (1) shall apply: <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. A Person who constitutes one household by possessing any of the following items:
(a) One house;
(b) One association member's relocation right;
(c) One house and one association member's relocation right;
2. The lineal ascendant (including lineal ascendants of one’s spouse and includes where any one of them is less than 60 years old) of over 60 years old who possesses any of the following items:
(a) One house;
(b) One association member's relocation right;
(c) One house and one association member's relocation right;
3. A house which has been possessed by a person falling under subparagraph 1 (a) or 2 (a) before the date of unity;
4. A house which has been possessed by a person falling under subparagraph 1 (c) or 2 (c) before the date of unity: Provided, That it shall be limited to cases where any requirement of the following items has been fulfilled:
(a) Where an association member's relocation right possessed before the date of unity (referred to an association member's relocation right possessed by the person who has possessed the first transferred house before the date of unity; hereafter referred to as "association member's relocation right before the unity" in this paragraph) is what acquired first due to approval of management disposal plans under the provisions of Article 48 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereafter referred to as "first association member's relocation right" in paragraph (9)), the first transferred house shall be acquired after the approval date of project implementation for residing in during the implementation period of such house redevelopment project or house reconstruction project and it shall have been resided in for not less than one year after acquisition;
(b) Where an association member's relocation right before the unity is what has been acquired in succession due to a transaction, etc., the first transferred house shall be what has been possessed before acquisition of association member's relocation right before the unity;
5. A house to be acquired, thanks to the one association member's relocation right owned by a person falling under subparagraph 1 (b) or 2 (b) before the date of unity, after the date of unity in accordance with a management disposal plan for the house redevelopment project or the house reconstruction project.
(9) Where a person falling under subparagraph 1 is married with another person falling under subparagraph 1, one household owns one house and one association member's relocation right, one house and two association member's relocation rights, two houses and one association member's relocation right, or two houses and two association member's relocation rights, and the first transferred house within five years from the date of marriage falls under any of the houses under subparagraph 2, 3 or 4, it shall be deemed one house for one household, and Article 154 (1) shall apply: <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 24356, Feb. 15, 2013>
1. A person who possesses any of the following items:
(a) One house;
(b) One association member's relocation right;
(c) One house and one association member's relocation right;
2. A house possessed by a person falling under subparagraph 1 (a) before the date of marriage;
3. A house possessed by a person falling under subparagraph 1 (c) before the date of marriage: Provided, That it shall be limited to cases where any requirement of the following items is met:
(a) Where an association member's relocation right possessed before the date of marriage (referring to an association member's moving right possessed by a person who has possessed the first transferred house before the date of marriage; hereafter referred to as "association member's relocation right before the marriage" in this paragraph) is the first association member's relocation right, the first transferred house is what has been acquired after the approval date of project implementation for residing during the period of implementing a house redevelopment project or house reconstruction project, and it shall be resided in for not less than one year after acquisition;
(b) Where an association member's relocation right before marriage is what has been acquired in succession due to a transaction, etc., the first transferred house is what has been possessed before the acquisition of association member's relocation right before marriage;
4. A house to be acquired, thanks to the one association member's relocation right owned by a person falling under subparagraph 1 (b) before the date of marriage, after the date of marriage in accordance with a management disposal plan for the house redevelopment project or the house reconstruction project.
(10) Where one household possessing one house falling under Article 155 (6) 1, another house (hereafter referred to as "general house" in this paragraph) and one association member's relocation right in the Republic of Korea respectively transfers the general house, it shall be deemed possessing the general house and the association member's relocation right in the Republic of Korea, and the provisions of paragraphs (3) through (5) shall apply.
(11) Where one household possessing, from among houses in an agricultural and fishing village under the provisions of Article 155 (7), one house for ceasing farming under subparagraph 2 of the same paragraph and another house (hereafter referred to as "general house" in this Article) and one association member's relocation right in the Republic of Korea respectively transfers the general house, it shall be deemed possessing the general house and the association member's relocation right in the Republic of Korea, and the provisions of paragraphs (3) through (5) shall apply.
(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 an association member's relocation right, prescribed for by Ministerial Decree of Strategy and Finance, 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 by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 20720, Feb. 29, 2008>
1. The copy of the resident registration certificate (limited to cases where it is impossible to confirm based on the resident registration card);
2. Deleted; <by Presidential Decree No. 19507, Jun. 12, 2006>
3. The certified copy of the land and building register of a house before conversion into an association member's relocation right: Provided, That 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; <by Presidential Decree No. 19507, Jun. 12, 2006>
5. Other documents prescribed by Ministerial Decree of Strategy and Finance.
(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 subjected 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 on which the cause has occurred belongs. <Amended by Presidential Decree No. 24356, 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 an association member's relocation right 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, That where a person who has made the report does not consent to the confirmation in cases under subparagraph 1, the head of the competent tax office having jurisdiction over the place for tax payment shall request him/her to submit such documents: <Added by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010>
1. The certified copy of his/her resident registration card;
2. The certified copy of the land and building register of his/her house transferred;
3. The certified copy of the land and building register of his/her house in an agricultural and fishing village (limited to cases under paragraph (11)).
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
Section 3 Calculation of Amount of Capital Gains
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Article 157 (Scope of Securities Depository Receipts and Majority Stockholders)
(1) "Securities depository receipts prescribed by Presidential Decree" in the part other than items of Article 94 (1) 3 of the Act means securities, which are issued by a person entrusted with equity securities specified in Article 4 (2) 2 of the Financial Investment Services and Capital Markets Act in a country, other than the securities issuing country, indicating the right related to the entrusted securities. <Added by Presidential Decree No. 22580, Dec. 30, 2010>
(2) and (3) Deleted. <by Presidential Decree No. 17032, Dec. 29, 2000>
(4) "Majority stockholders prescribed by Presidential Decree" in Article 94 (1) 3 (a) of the Act means any of the following persons (hereafter referred to as "majority stockholders" in this Chapter): <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 18988, Aug. 5, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Where one stockholder or one investor (hereafter referred to as "one stockholder" in this Chapter) possessing the stocks or investment stakes of a corporation (including preemptive rights and securities depository receipts under paragraph (1); hereafter referred to as "stocks, etc." in this Chapter) and his/her related persons under Article 1-2 (1) and (3) 1 of the Enforcement Decree of the Framework Act on National Taxes (hereafter referred to as "other stockholders" in this Chapter) possess not less than 2/100 (4/100 in cases of the KOSDAQ-listed corporations' stocks, etc. and the venture enterprises' stocks, etc. under Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses to be traded under Article 178 (1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; hereafter the same apply in this Article) of the total amount of stocks, etc. of a corporation concerned as of the end of business year immediately preceding the business year to which the transfer date of stocks, etc. belongs: The relevant stockholder and other stockholders. In such cases, while it has been short of 2/100 as of the end of immediately preceding business year, but thereafter come to possess not less than 2/100 by acquiring more stocks, etc., one stockholder and other stockholders after the date of such acquisition shall be included;
2. Where the market capitalization of stocks, etc. of the relevant corporation, which are owned by one stockholder and other stockholders as of the end of the business year immediately preceding that whereto belongs the transfer date of stocks, etc., is not less than five billion won (four billion won in cases of the KOSDAQ-listed corporations' stocks, etc. and the venture enterprises' stocks, etc. under Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses to be traded under Article 178 (1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act): The relevant stockholder and other stockholders.
(5) Deleted. <by Presidential Decree No. 17032, Dec. 29, 2000>
(6) The market capitalization under paragraph (4) 2 shall be in accordance with the following amounts: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 21301, Feb. 4, 2009>
1. In cases of stocks, etc. of stock-listed corporations, the final market price as of the expiration date of the preceding business year to which the transfer date of stocks, etc. belongs: Provided, That where there is no final market price as of the expiration date of the preceding business year, it shall be in accordance with the final market price on the preceding trading day;
2. In cases of stocks, etc. other than subparagraph 1, an estimated price under Article 165 (4).
(7) When applying paragraphs (4) and (6), if a stockholder of a merged corporation has been issued new stocks of a merging corporation in the course of the merger and transfers such stocks in the business year to which the date of registration of merger belongs, the scope of majority stockholders, etc. shall be based on the present status of possession of stocks as of the date of registration of merger of the relevant merged corporation. <Added by Presidential Decree No. 22034, Feb. 18, 2010>
(8) Upon applying paragraphs (4) and (6), where a stockholder of a divided corporation receives new shares of the corporation newly established after division and transfers the shares in the business year to which the date of incorporation-registration of the newly established corporation belongs or transfers shares of the divided corporation after the date of division-registration during the business year to which the date of the division-registration belongs, concerning the scope, etc. of majority stockholders, it shall be governed by the share ownership status as of the date of division-registration of the corporation existed before the division concerned. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
(9) Where a stockholder lends stocks, etc. on the condition of redemption of the stocks, etc. after certain period of time with the same quantity and kind, the stocks, etc. shall be deemed owned by the lender during the period from the date of renting until the date of returning the stocks, etc. and paragraphs (4) and (6) shall apply thereto. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
(10) Where a resident acquires stocks, etc. of a corporation through the private offering collective investment scheme pursuant to the Financial Investment Services and Capital Markets Act, the stocks, etc. (limited to the portion calculated in proportion to the investment rate of the private offering collective investment scheme) shall be deemed owned by the resident and paragraphs (4) and (6) shall apply thereto. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
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Article 158 (Scope of Other Assets)
(1) "Assets prescribed by Presidential Decree" in Article 94 (1) 4 (c) of the Act means any of the following subparagraphs: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. In cases where one stockholder or other stockholders of a corporation falling under the following items (a) and (b) transfer 50/100 or more of the aggregate of the stocks, etc. of the relevant corporation to persons other than one stockholder and other stockholders: The relevant stocks, etc.:
(a) The corporation in which the ratio occupied by the total of asset values under Article 94 (1) 1 and 2 of the Act, from among the aggregate of assets of the relevant corporation, is 50/100 or more;
(b) The corporation in which the ratio occupied by the aggregate of the stocks, etc. owned by one stockholder and other stockholders from among the aggregate of the stocks, etc. of the relevant corporation, is 50/100 or more;
2. Deleted; <by Presidential Decree No. 14860, Dec. 30, 1995>
3. and 4. Deleted;<by Presidential Decree No. 18173, Dec. 30, 2003>
5. In cases where the stocks of the corporations falling under the following items (a) and (b) are transferred: The relevant stocks, etc.:
(a) The corporation in which the ratio occupied by the aggregate of the asset values under Article 94 (1) 1 and 2 of the Act from among the gross asset values of the relevant corporation, is 80/100 or more;
(b) The corporation which runs a sports facility business, such as golf courses and ski courses, under the Installation and Utilization of Sports Facilities Act, and the business related to recreation facilities among the tourism business under the Tourism Promotion Act, and the real estate business and the real estate development business, which are determined by Ministerial Decree of Strategy and Finance.
(2) If one stockholder and other stockholders transfer stocks, etc. over several occasions under paragraph (1) 1, the number of stocks, etc. transferred by them shall be aggregated within three years retrospectively from the date on which any of them transfers the stocks, etc. In such cases, the determination as to whether it falls under the main sentence and each subparagraph of the same paragraph shall be based on the aggregate of stocks, etc. or the aggregate of assets of the relevant corporation as of the first day of such summing-up retrospectively from the date on which any of them transfers the stocks, etc.
(3) The gross asset sums and the asset values under paragraph (1) 1 (a) and 5 (a) of the same paragraph shall be determined by the book value of the relevant corporation (in cases where the standard market value of the relevant asset, one 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 gross asset sums: <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22580, Dec. 30, 2010>
1. Amount of intangible fixed assets under Article 24 (1) 2 (f) and (g) of the Enforcement Decree of the Corporate Tax Act;
2. Aggregate amount of cash, financial assets (referring to financial assets under Article 22 of the Inheritance Tax and Gift Tax Act) and loans 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.
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Article 159 (Calculation of Gains on Transfer of Onerous Donation)
(1) In calculating gains on transfer on deemed transfer, in cases of onerous donation under the latter part of Article 88 (1) of the Act, its acquisition value and transfer value shall be based on the following subparagraphs:
1. Acquisition value:
2. Transfer value:
The value calculated by multiplying the value (where the value of transfer has been calculated according to the standard market price, the acquisition value shall be also calculated according to the standard market price) pursuant to Article 97 (1) 1 of the Act by the ratio of the part equivalent to the amount of debt to the value of donation;
The value calculated by multiplying the value evaluated pursuant to Articles 60 through 66 of the Inheritance Tax and Gift Tax Act by the ratio of the part equivalent to the amount of debt to the value of donation.
(2) When applying paragraph (1), where a donee takes over debts of a donor as cases where onerous donation is made for assets subject to capital gains tax and assets not subject to capital gains tax, the amount of debts shall be calculated by the following formula:
The amount of debts =The total amount of debts ×The value of assets subject to taxation
The value of total assets donated
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 159-2 (Special Deduction for Long-term Possession)
"One house for one household prescribed by Presidential Decree" in the proviso to the main body of Article 95 (2) of the Act means the relevant house (including the house deemed one house for one household under the provisions of Articles 155, 155-2, 156-2 and other provisions) where one household possesses one house in the Republic of Korea as of the transfer date. <Amended by Presidential Decree No. 20618, Feb. 22, 2008>
[This Article Wholly Amended by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 160 (Calculation of Gains, etc. on Transfer of High-Priced Houses)
(1) The gains from the transfer of an asset corresponding to a high-priced 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 900 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 by Presidential Decree No. 16556, Sep. 18, 1999; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009>
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 － 900 million 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 longterm holding deduction amount under Article 95 (2) of the Act ×Transfer value － 900 million 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).
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Article 161 (Calculation of Amount of Capital Gains, etc. on House having Immediately Preceding Residental House, etc.)
(1) The amount of capital gains for one house for one household under Article 154 (10) and a house having an immediately preceding residential house under the latter part other than the subparagraphs of Article 155 (19) (hereafter referred to as "house having an immediately preceding residential house, etc." in this Article) shall be calculated according to the following formula:
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 of the house having an immediately preceding residential house, etc. at the time of acquisition thereof.
The standard market price of the house having an immediately preceding residential house, etc. at the time of transfer thereof The standard market price of the house having an immediately preceding residential house, etc. at the time of acquisition thereof.
(2) Notwithstanding paragraph (1), if a house having an immediately preceding residential house, etc. is a high-priced house under Article 156 (1), the amount of capital gains on the relevant house having an immediately preceding residential house, etc. shall be calculated according to Article 95 (1) and (3) of the Act and Article 160 of this Decree on condition that "900 million won" shall be replaced by such amount as obtained by the following formula in applying Article 160 (1): <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
1. Amount of capital gains for the period of ownership before the date of transferring the immediately preceding residental 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 of the house having an immediately preceding residential house, etc. at the time of acquisition thereof.
The standard market price of the house having an immediately preceding residential house, etc. at the time of transfer thereof The standard market price of the house having an immediately preceding residential house, etc. at the time of acquisition thereof.
2. Amount of capital gains for the period of ownership after the date of transferring the immediately preceding residental 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 thereof 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. ×Amount of Transfer ? 900 million won
The standard market price of the house having an immediately preceding residential house, etc. at the time of transfer thereof The standard market price of the house having an immediately preceding residential house, etc. at the time of acquisition thereof.Amount of Transfer
(3) Where the 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) and (2) of the Act, the amount exceeding said amount shall be deemed to be non-existent. <Amended by Presidential Decree No. 24356, 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 by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 23218, Oct. 14, 2011]
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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 by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Where the date on which 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 Ministerial Decree of Strategy and Finance, 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 the structures of self-construction, the delivery date of a certificate of the completion of inspection for use: Provided, That if it has been actually used or a permit for use has been obtained before an inspection for use, it shall be the date of actual use or the date of approval for use, and in cases of the structures built without obtaining any construction permit, it shall be the date of actual use;
5. With respect to assets acquired by inheritance or donation, it shall be the date on which such inheritance commences or on which the donation is received;
6. Where acquiring the ownership of real estate under Article 245 (1) of the Civil Act, the date on which 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, etc. for Public Works 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;
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, paragraph (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, That 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 on which public announcement is made for land substitution;
10. In cases of Article 158 (2), the date on which the 50/100 or more of aggregate value of stocks, etc. of the relevant corporation is transferred in the course of transferring stock, etc. by one shareholder and other shareholders. In such cases, the value of transfer shall be based on the value of transfer as at the date on which they actually transfer stocks, etc.
(2) through (4) Deleted. <by Presidential Decree No. 22580, 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 by Presidential Decree No. 22580, Dec. 30, 2010>
(6) "Assets prescribed by Presidential Decree" in Article 8 of the Addenda of the amended Income Tax Act (Act No. 4803) means the following assets: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005>
1. Assets under Article 94 (1) 2 and 4 of the Act, which have been acquired before December 31, 1984;
2. Deleted; <by Presidential Decree No. 14860, Dec. 30, 1995>
3. Assets under Article 94 (1) 3 of the Act, which have been acquired before December 31, 1985.
(7) "Date prescribed by Presidential Decree" in Article 8 of the Addenda of the amended Income Tax Act (Act No. 4803) means the following dates: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005>
1. In cases of assets under Article 94 (1) 2 and 4 of the Act: January 1, 1985;
2. Deleted; <by Presidential Decree No. 14860, Dec. 30, 1995>
3. In cases of assets 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 95 of the Act. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 162-2 (Value of Transfer)
(1) Deleted. <by Presidential Decree No. 17032, Dec. 29, 2000>
(2) Cases where the transfer price of an asset is based on an actual transaction price under Article 96 (2) 5 of the Act shall be any of the following cases where real estate is acquired or transferred in an unfair manner, such as the preparation of false contract document, the false transfer of resident registration, etc.: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22580, Dec. 30, 2010>
1. Where real estate has been traded in violation of the Act on the Registration of Real Estate under Actual Titleholder's Name;
2. Where a broker under the Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act has transferred real estate which has been directly acquired in violation of the same Act;
3. Where real estate has been acquired under a minor's title (excluding the acquisition by an inheritance or donation), and transferred thereafter;
4. Where real estate has been transferred or acquired not less than three times during the period within a year retrospective from the date of transferring the real estate by the constituents of a household, and where the aggregate of actual transaction price exceeds 300 million won;
5. Where the gains on a transfer based on the standard market price by trade unit exceed 100 million won.
(3) Where the right pertaining to a license for gathering earth, sand or stones and the right to the development and use of underground water (hereafter referred to as the "right, etc. to the development and use of underground water" in this paragraph) are transferred together with the land or building under Article 94 (1) 1 of the Act (hereafter referred to as "land, etc." in this paragraph), and where the acquisition price or the transfer price of the right, etc. to the development and use of underground water and the land, etc. is inseparable, such acquisition price or transfer price shall be calculated by applying mutatis mutandis the criteria under each subparagraph of Article 51 (8). In such cases, "forest trees" shall be construed as "right, etc. of the development and use of underground water", and "forest land" as "land, etc." <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 20618, Feb. 22, 2008>
(4) In applying Article 96 (4) of the Act, if the real estate acquired by inheritance is transferred within one year after its aquisition, or a transfer is made within one year after its aquisition due to extenuating circumstances, such as an expropriation under the Act on Acquisition of and Compensation for Land, etc. for Public Works and other Acts (including a purchase through consultation), and which is deemed not to be a transaction under the purpose of gains from short-term trade in view of the circumstances of acquisition or transfer of real estate and its real status of use, it may be governed by the standard market price through consultation under Article 176-2 (5). <Added by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005>
(5) "Cases prescribed by Presidential Decree" in Article 96 (2) 9 of the Act means cases where one household possessing two or more houses transfers a house (including land appurtenant thereto). In such cases, Article 155 (15) shall apply mutatis mutandis to the calculation of the number of houses of a multi-family house (only applicable to cases where residents select), Article 167- 3 (2) 2 shall apply mutatis mutandis to the calculation of the number of houses of a house jointly inherited, and Article 154 (9) shall apply mutatis mutandis to the method of determination of a house transferred in cases where two houses or more are transferred on the same day. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(6) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 16664, Dec. 31, 1999]
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Articles 162-3 through 162-5 Deleted. <by Presidential Decree No. 19254, Dec. 31, 2005>
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Article 163 (Necessary Expenses for Transferred Assets)
(1) "Actual transaction value for the acquisition" in the main sentence of Article 97 (1) 1 (a) of the Act means the aggregate of the following amounts: <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Values corresponding to the cost for acquisition computed by applying mutatis mutandis Article 89 (1) (including the discounted debt estimated by the present value under Article 89 (2) 1, but excluding the amount exceeding the market price calculated by wrongful acts);
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 the calculation of 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, That 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/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.
(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 the calculation of 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(3) "Capital expenditure, etc. prescribed by Presidential Decree" in Article 97 (1) 2 of the Act means what falls under any of the following: <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 19687, Sep. 22, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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 the calculation of each amount of income in the year wherein such cost and expenses are paid;
3. Expenses paid for the change of intended usage, improvement, or convenience in use of the transferred asset;
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 Ministerial Decree of Strategy and Finance, which are equivalent to subparagraphs 1 through 3, 3-2 and 3-3.
(4) Deleted. <by Presidential Decree No. 17032, 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: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. The following Expenses as expenses directly paid for transfer of assets under the subparagraphs of Article 94 (1) of the Act;
(a) Securities transaction taxes paid pursuant to the Securities Transaction Tax Act;
(b) Expenses for preparation of a report of tax base on capital gains tax and for preparation of a contract;
(c) Notarial fees, stamp charges and brokerage;
(d) Expenses prescribed by Ministerial Decree of Strategy and Finance as expenses similar to expenses under items (a) through (c);
2. Marginal loss incurred by selling national housing bonds and land development bonds purchased under the Acts and subordinate statutes in acquiring the asset under Article 94 (1) 1 of the Act, before their maturity. In such cases, the marginal loss shall, in cases where such bonds are transferred to any person other than a financial institution specified by Ministerial Decree of Strategy and Finance (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 other than its items means each of the following amounts: <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18988, Aug. 5, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
1. Land:
Publicly announced individual land prices at the time of its acquisition under Article 99 (1) 1 (a) of the Act × 3/100 (3/1,000 in cases of unregistered transferred assets under Article 104 (3) of the Act);
2. Buildings:
(a) Building under Article 99 (1) 1 (c) of the Act (including its appurtenant land) and housing under item (d) of the same subparagraph:
Value under Article 99 (1) 1 (c) or (d) of the Act at the time of its acquisition × 3/100 (3/1,000 in cases of unregistered transferred assets under Article 104 (3) of the Act);
(b) Building other than those under item (a):
Value under Article 99 (1) 1 (b) of the Act at the time of its acquisition × 3/100 (3/1,000 in cases of unregistered transferred assets under Article 104 (3) of the Act);
3. Assets under Article 94 (1) 2 (b) and (c) of the Act (excluding unregistered transferred assets under Article 104 (3) of the Act):
Standard market price at the time of its acquisition × 7/100;
4. Assets other than those of subparagraphs 1 through 3:
Standard market price at the time of its acquisition × 1/100.
(7) "Assets prescribed by Presidential Decree" in Article 97 (4) of the Act means assets under Article 94 (1) 4 (b) of the Act. <Added by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 22034, Feb. 18, 2010>
(8) The amount equivalent to gift tax under Article 97 (4) and (5) of the Act shall be that which is calculated by multiplying the assessed amount of gift tax on the assets donated to a resident by his/her spouse or a lineal ascendant or descendant (referring to the assessed amount of gift tax under Article 56 of the Inheritance Tax and Gift Tax Act) by the rate occupied by the relevant assets value transferred pursuant to Article 97 (4) of the Act (referring to the taxable value for gift tax whereon a gift tax is levied) in the taxable value for gift tax under Article 47 of the Inheritance Tax and Gift Tax Act. In such cases, the amount equivalent to the gift tax to be included in necessary expenses shall be limited to the balance obtained by deducting the amount under Article 97 (1) and (2) of the Act from the transfer value. <Added by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009>
(9) In applying the main sentence of Article 97 (1) 1 (a) of the Act to the asset inherited or donated (excluding the donations under the provisions of Articles 33 through 42 of the Inheritance Tax and Gift Tax Act), the assessed value under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the commencement date of inheritance or the date of donation shall be deemed the actual transaction price at the time of its acquisition: Provided, That in any of the following cases, it shall be governed by the provisions of each of the following subparagraphs: <Added by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 18988, Aug. 5, 2005; Presidential Decree No. 19254, Dec. 31, 2005>
1. In cases of the land inherited or donated under the Public Notice of Values and Appraisal of Real Estate Act before a publicly announced individual land price was published on August 30, 1990, the larger amount between the value assessed under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of commencing an inheritance or of donation, and the value under the provisions of Article 164 (4);
2. In cases of the building inherited or donated before the standard market value of the building was published under the provisions of Article 61 (1) 2 through 4 of the Inheritance Tax and Gift Tax Act, the larger amount between the value assessed under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of commencing an inheritance or of donation, and the value under the provisions of Article 164 (5) through (7).
(10) The main sentence of Article 97 (1) 1 (a) of the Act shall apply according to the following subparagraphs: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 23588, Feb. 2, 2012>
1. Where gift tax has been taxed pursuant to Articles 33 through 42 and 45-3 of the Inheritance Tax and Gift Tax Act, the value of donated asset concerned (where gift tax has been taxed pursuant to Article 45-3 of the same Act, referring to the deemed profit from the gift), or the increase or decrease thereof shall be added to or subtracted from the acquisition value;
2. Where the asset pursuant to the subparagraphs of Article 94 (1) of the Act has been acquired from a related person (including a foreign corporation) pursuant to Article 52 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 that has been 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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Deleted; <by Presidential Decree No. 21934, Dec. 31, 2009>
2. Verifying the actual selling price of the real estate under Article 27 (1) of the Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act (referring to the selling price of a residential house under Article 80-2 (1) of the Housing Act in cases of a residential house subject to the reporting on the transaction of residential houses under Article 80-2 of the said Act; hereafter referred to as "actual selling price" in this subparagraph) by a method prescribed by Ministerial Decree of Strategy and Finance: Provided, That 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 conversion value prescribed by Presidential Decree" in Article 97 (1) 1 (b) of the Act means the prices under Article 176-2 (2) through (4). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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 under Article 97 (1) 1 of the Act. <Added by Presidential Decree No. 17032, Dec. 29, 2000>
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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) 1 (a) 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 9 (2) of the Public Notice of Values and Appraisal of Real Estate Act 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 institution on such land by entrusting two or more appraisal institutions with appraisal: <Amended by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 21881, Dec. 14, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22395, Sep. 20, 2010>
1. Newly registered land under the Act on Land Survey, Waterway Survey and Cadastral Records;
2. Any land partitioned or merged under the Act on Land Survey, Waterway Survey and Cadastral Records;
3. Any land, the lot number of which under the Act on Land Survey, Waterway Survey and Cadastral Records 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) "Area prescribed by Presidential Decree" in the proviso to Article 99 (1) 1 (a) of the Act means the area 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(3) In applying Article 99 (1) 1 (a) of the Act, if it is acquired or transferred prior to a public notice of the new standard market price, it shall be governed by the immediately preceding standard market price. <Amended by Presidential Decree No. 16664, Dec. 31, 1999>
(4) The standard market price at the time of aquisition 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 Public Notice of Values and Appraisal of Real Estate Act, 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:
Individually
assessed official land price on the
basis of January 1, 1990		Standard market value at the time of acquisition
×

Values computed by dividing the standard market value as of August 30, 1990 and that decided immediately before it, by 2
(5) The standard market price of the building acquired before a public notice of the standard market price under Article 99 (1) 1 (b) of the Act, at the time of its acquisition, shall be the price computed under the following formula:
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 of the collective housing, officetel and buildings for commercial use (including the land attached therewith), which has been acquired before a public notice of the standard market price under Article 99 (1) 1 (c) and the proviso to Article 99 (1) 1 (d) of the Act, shall be the amount computed under the following formula. In such cases, if there exists no amount under Article 99 (1) 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 applying mutatis mutandis the provisions of paragraph (5):
Standard market price first notified publicly on the relevant asset by the Commissioner of the National Tax Service

×Aggregate of the prices under Article 99 (1) 1 (a) and (b) of the Act at the time of acquisition
Aggregate of the prices under Article 99 (1) 1 (a) and (b) of the Act at the time of public notice of the standard market price first notified publicly by the Commissioner of National Tax Service on the relevant asset (where the price at the time of acquisition and that at the time of pubic notice of the standard market price first notified publicly are identical, the provisions of 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 Public Notice of Values and Appraisal of Real Estate Act (including the land appurtenant thereto) shall be the value calculated by the following formula. In such cases, if there exists no value under Article 99 (1) 1 (b) 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). <Amended by Presidential Decree No. 24441, Mar. 23, 2013>
Housing price first announced publicly by the Minister of Land, Infrastructure and Transport on the relevant housing × Aggregate of the prices under Article 99 (1) 1 (a) and (b) of the Act at the time of acquisition / Aggregate of the prices under Article 99 (1) 1 (a) and (b) of the Act at the time of public announcement of housing price first announced publicly by the Minister of Land, Infrastructure and Transport on the relevant housing (where the value at the time of acquisition and the value at the time of first public announcement of housing price are identical, the provisions of 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 Ministerial Decree of Strategy and Finance in view of the retention period of the 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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(9) Where the value falling under any of the following is lower than the value under Article 99 (1) 1 (a) 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 by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 18988, Aug. 5, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 24356, Feb. 15, 2013>
1. In cases of purchasing through consultation, expropriation under the Act on Acquisition of and Compensation for Land, etc. for Public Works 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 and commercial buildings (including land annexed thereto) prescribed by Presidential Decree" in Article 99 (1) 1 (c) of the Act means officetels 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(11) "Amount appraised by the methods prescribed by Presidential Decree" in the proviso to Article 99 (1) 1 (d) 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 institution on such land by entrusting two appraisal institutions or more with appraisal: <Added by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22395, Sep. 20, 2010>
1. In cases of an individual house having no individual housing price under the Public Notice of Values and Appraisal of Real Estate Act, a neighboring house having similar usefulness, such as the structure, use and status of usage, shall be deemed to be 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 (7) of the same Act;
2. In cases of a collective house having no collective housing price under the Public Notice of Values and Appraisal of Real Estate Act, 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 by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010>
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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 by Presidential Decree No. 18988, Aug. 5, 2005]
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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/she shall do so by way of statement on the Internet.
[This Article Added by Presidential Decree No. 18988, Aug. 5, 2005]
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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) 2 (a) 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(2) "Value appraised by the method prescribed by Presidential Decree" in Article 99 (1) 2 (b) 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(3) "Stocks, etc. prescribed by Presidential Decree" in Article 99 (1) 3 of the Act means stocks, etc. falling under Article 53 (2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. In such cases, "six months before or after the evaluation base date (three months in cases of stocks or investment shares subject to gift tax)" in the proviso to the same paragraph shall be construed as "one month before the date of acquisition or transfer". <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
(4) The appraisal base date and evaluated amount under the latter part of Article 99 (1) 4 of the Act shall be as follows: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. The appraised value per share shall be the weighted average value calculated by applying the weight ratio of 3 to 2 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, That 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 under Article 158 (1) 1 (a):
(a) Net amount of profit or loss for each week of the business year immediately prior to the business year on which the date of transfer or acquisition falls / The interest rate determined and publicly announced by the Minister of Strategy and Finance, taking into consideration the current yield from trading corporate bonds with maturity of three years guaranteed by a financial institution under subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Guarantee of Secrecy;
(b) Book value of the corporation as of the end of the business year immediately preceding the business year on which the date of transfer or acquisition falls (or the standard market price under Article 99 (1) 1 (a) 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) 1 (e) of the Enforcement Decree of the Corporate Tax Act, notwithstanding subparagraph 1;
3. The value of stocks, etc. falling under any of the following items shall be the valuation in accordance with the formula under subparagraph 1 (b), notwithstanding the provisions of the main body 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 in which case 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 that suffered a loss (referring to the total amount of losses which is or shall be attributed to each business year under the Corporate Tax Act less the total amount of profits which is or shall be attributed to the business year) continuously for three years from the business year on which the date of transfer or acquisition falls;
4. In applying subparagraph 1 (b), "total number of outstanding stocks" shall mean the total number of outstanding stocks as of the end of the business year immediately preceding the business year on which the date of transfer or acquisition falls.
(5) The standard market price at the time of acquisition shall, notwithstanding paragraph (4), be in accordance with a value computed 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 in the KOSDAQ Market, a value computed by applying mutatis mutandis paragraph (9) shall be an appraised value under paragraph (4) as of the date listing stocks in the KOSDAQ Market:
[An average amount of daily final market prices in the KOSDAQ Market published for one month after the date of listing stocks in the KOSDAQ Market] × (an appraised value under paragraph (4) as of the acquisition date / an appraised value under paragraph (4) as of the date of listing stocks in the KOSDAQ Market).
(6) The standard market price at the time of acquisition shall be in accordance with a value computed by applying mutatis mutandis paragraph (5) where stocks, etc. fall under stocks, etc. of a listed stock corporation as of the transfer date of stocks, etc., but do not fall, at the time of the acquisition, under stocks, etc. of a listed stock corporation and stocks, etc. under paragraph (3). In such cases, "date of listing on the KOSDAQ Market" shall be construed as "listing date," and "final value in quotation of stocks in the KOSDAQ Market" as "final value in quotation of stocks in the Korea Exchange." <Amended by Presidential Decree No. 21301, Feb. 4, 2009>
(7) "Value appraised by the method prescribed by Presidential Decree" in Article 99 (1) 5 of the Act means the value appraised by applying Article 58-2 (2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act mutatis mutandis. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(8) "Value appraised by the method prescribed by Presidential Decree" in Article 99 (1) 6 of the Act means the value appraised according to the following subparagraphs: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Stocks, etc. under Article 158 (1) 1 and 5 of this Decree and Article 94 (1) 4 (b) of the Act:
The value appraised under Article 99 (1) 3 and 4 of the Act;
2. Goodwill under Article 94 (1) 4 (a) of the Act:
Valuation 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) 4 (b) of the Act (excluding stocks, etc.):
A standard amount of market price announced pursuant to the Local Taxes: Provided, That in cases 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 Ministerial Decree of Strategy and Finance.
(9) Where the standard market price at the time of transfer computed under Article 99 (1) 3 and 4 of the Act and the standard market price at the time of acquisition are the same, the standard market price at the time of transfer shall, notwithstanding Article 99 (1) 3 and 4 of the Act, be the value computed by the method prescribed by Ministerial Decree of Strategy and Finance in view of the retention period of the relevant asset and the increase rate of the standard market prices. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(10) In assessing the goodwill under paragraph (8) 2, if the equity capital is not verifiable by the documentary evidence presented by the transferor, it shall be the higher amount of those computed by each of the following formulas: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
1.Amount of business income;
PER of equity capital prescribed by Ministerial Decree of Strategy and Finance
2.Amount of revenue
Equity capital turnover rate prescribed by Ministerial Decree of Strategy and Finance
(11) When applying paragraph (10), the amount of business income and the amount of income shall be deemed to have been 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, That where the business transferred starts anew in the year when 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 by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 166 (Computation, etc. of Gains from Transfer)
(1) In computing the gains from transfer under Article 100 of the Act, where a member of a consolidation project cooperative, who executes a housing redevelopment project or a housing reconstruction project, transfers the title selected as an occupant, acquired by furnishing (including cases of furnishing buildings or land only) his/her existing building and its appurtenant land to the relevant cooperatives, the gains from transfer obtained by such member shall be computed by the formula under any of the following: <Amended by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18044, Jun. 30, 2003; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19245, Dec. 31, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. When the settlement balance is paid:
[Transfer value － (Appraised value of the existing building and its appurtenant land ＋ Settlement balance paid) － Necessary expenses under Article 97 (1) 2 and 3 of the Act] (hereafter referred to as "marginal gain from transfer after authorization for management and disposition plan" in this Article) + [(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)] (hereafter referred to as "marginal gain from the transfer before authorization for management and disposition plan" in this Article);
2. When the settlement balance is received: Sum of the amount under each of the following items
(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))] × [(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 the gain from transfer in accordance with Article 100 of the Act, if a member of a renovation project association that executes a housing redevelopment project or a housing reconstruction project provides an existing house and its appurtenant land to the association and thereafter transfers the house and its appurtenant land acquired in accordance with the management and disposition plan, the marginal gain from the actual selling price shall be calculated by any of the following formulas: <Added by Presidential Decree No. 19890, Feb. 28, 2007>
1. When the settlement balance is paid:
[Marginal gain from the transfer after authorization on the management and disposition plan × Settlement balance paid ÷ (Appraised value of the existing building and its appurtenant land + Settlement balance paid)] (hereafter referred to as "marginal gain from the transfer of the settlement balance paid" in this Article) + {[Marginal gain from the transfer after authorization on the management and disposition plan × Appraised value of the existing building and its appurtenant land ÷ (Appraised value of the existing building and its appurtenant land + Settlement balance paid)] + Marginal gain from the transfer before authorization on the management and disposition plan} (hereafter referred to as "marginal gain from the transfer of an existing building" in this Article);
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 not verifiable, the amount computed by the following formula shall govern: <Amended by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18850, May 31, 2005; Presidential Decree No. 19890, Feb. 28, 2007>
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 by Presidential Decree No. 19890, Feb. 28, 2007>
1. The price stipulated by the management and disposition plan under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents: Provided, That 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 on 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 the transfer under paragraphs (1) and (2) 1 in calculating the capital gains under Article 95 of the Act, the holding period shall be that set forth in the following: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 24356, Feb. 15, 2013>
1. Holding period when deducting the special long-term holding deduction amount from the marginal gain before authorization of the management and disposition plan under paragraph (1) 1 and paragraph (1) 2 (b): The period from the date of acquisition of the existing building and its appurtenant land to the date of authorization of the management and disposition plan;
2. Holding period when deducting the special long-term holding deduction amount from the marginal gain from the 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 of authorization on the management and disposition plan to the date of transfer of the newly built house and its appurtenant land;
(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 of acquisition of the existing building and its appurtenant land to the date of transfer of the newly built house and its appurtenant land.
(6) In applying Article 100 (2) of the Act, if the distinction between the value of land and that of buildings, etc. is obscure, it shall be computed proportionately under the proviso to Article 48-2 (4) of the Enforcement Decree of the Value-Added Tax Act. <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007>
(7) In computing the margin from transfer under Article 100 of the Act, where a member of a consolidation project cooperative, which executes a housing redevelopment project or a housing reconstruction project, offers the existing building and the land appurtenant thereto to the relevant cooperative, and transfers the newly-built building and the land appurtenant thereto which have been acquired pursuant to the management and disposition plan, 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 by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18044, Jun. 30, 2003; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 18850, May 31, 2005; Presidential Decree No. 18988, Aug. 5, 2005; Presidential Decree No. 19245, Dec. 31, 2005>
1. Margin from transfer from the date of acquisition of the existing building and the land appurtenant thereto to the date preceding the authorization date of the management and disposition plan: Standard market price of the existing building and the land appurtenant thereto as of the date preceding the authorization date of the management and disposition plan (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 the land appurtenant thereto as of the date of acquiring the existing building and the land appurtenant thereto － Necessary expenses for an existing building and the land appurtenant thereto (referring to that under Article 163 (6); hereafter the same shall apply in this paragraph);
2. Margin from transfer from the authorization date of the management and disposition plan to the date preceding the completion date of the newly-built building (referring to the acquisition date under Article 162 (1) 4): Standard market price of the land appurtenant to the existing building as of the date preceding the completion date of the newly-built building － Standard market price of the land appurtenant to the existing building as of the authorization date of management disposal plan;
3. Margin from transfer from the completion date of the newly-built building to the transfer date of the newly-built building: Standard market price of the newly-built building and the land appurtenant thereto as of the transfer date of the newly-built building － Standard market price of the newly-built building and the land appurtenant thereto as of the completion date of the newly-built building (where there exists the standard market price under Article 99 (1) 1 (c) and (d) of the Act as of the transfer date of the newly-built house, the standard market price calculated by applying mutatis mutandis the provisions of Article 164 (6) and (7)) － Necessary expenses for the newly-built building and the land appurtenant thereto (limited to the portion which is increased more than the land appurtenant to the existing building).
[This Article Added by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 167 (Calculation of Capital Gains by Wrongful Acts)
(1) and (2) Deleted. <by Presidential Decree No. 16664, Dec. 31, 1999>
(3) "Cases where it is deemed that any act reduces the burden of taxation wrongfully" in Article 101 (1) of the Act means any of the following occasions: Provided, That the foregoing shall apply only where the difference between the market price and actual transaction price exceeds 300 million won or reaches an amount equivalent to or more than 5/100 of the market price: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 23588, Feb. 2, 2012>
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 the 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 by Presidential Decree No. 23588, 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 64 of the Inheritance Tax and Gift Tax Act, Articles 49 through 59 of the Enforcement Decree of the same Act and Article 101 of the Restriction of Special Taxation Act. In such cases, "period within six months before the date of appraisal standard (three months in cases of gift property)" in the main sentence of Article 49 (1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be construed as "respective period of three months before and after the date of transfer or acquisition", and "in cases of inheritance or gift" in Article 101 of the Restriction of Special Taxation Act shall be construed as "in cases of transfer". <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 19890, Feb. 28, 2007>
(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, the provisions of Article 101 (1) of the Act shall not apply: Provided, That the same shall not apply to cases where it is admitted that capital gains tax has been reduced by false or other illegal means. <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005>
(7) Deleted. <by Presidential Decree No. 16664, Dec. 31, 1999>
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Article 167-2 (Aggregating, etc. 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 by Presidential Decree No. 18173, Dec. 30, 2003]
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Article 167-3 (Scope of Houses Falling under Three or More Houses for One Household)
(1) "Three or more houses for one household prescribed by Presidential Decree" in Article 104 (1) 4 of the Act means houses owned by one household having three houses or more in the Republic of Korea (houses in subparagraph 1 shall not be included in the calculation of the number of houses), which do not fall under any of the following: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 18850, May 31, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 20931, Jul. 24, 2008; Presidential Decree No. 21062, Oct. 7, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22391, Sep. 20, 2010; Presidential Decree No. 22811, Mar. 29, 2011; Presidential Decree No. 23356, Dec. 8, 2011; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Housing located in areas other than the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter referred to as "Seoul Metropolitan area" in this Article) and the Metropolitan City (excluding areas falling under any of the following items), for which the aggregate of standard market prices of relevant housing and land appurtenant thereto does not exceed 300 million won when the relevant housing or any other housing is transferred:
(a) Gun belonging to the Metropolitan City, and Eup/Myeon under Article 3 (3) and (4) of the Local Autonomy Act;
(b) Areas prescribed by Ministerial Decree of Strategy and Finance by taking into account the distribution rate and price of housing and their trend, etc. in the relevant area within the Seoul Metropolitan area;
2. Housing leased after registration of the rental house by a resident who has made registration of a business under Article 168 of the Act and of a lease business under Article 6 of the Rental Housing Act (hereafter referred to as "registration of business operator, etc." in this Article), which falls under any of the following items (hereafter referred to as "long-term rental house" in this Article): Provided, That when a resident failing to make registration of a business under Article 168 of the Act has made registration under the same paragraph of the same Article by not later than June 30, 2004 while he/she made registration of a lease business under Article 6 of the Rental Housing Act as of October 29, 2003 (hereafter referred to as "standard date for existing business operators" in this Article), it shall be deemed that he/she has made registration of a business under Article 168 of the Act on the date of registration of the rental business under Article 6 of the Rental Housing Act:
(a) Housing leased for not less than five years by a resident leasing at least one house purchased for leasing pursuant to subparagraph 3 of Article 2 of the Rental Housing Act in the Seoul Metropolitan area, and the aggregate of standard market prices of relevant housing and land appurtenant thereto do not exceed 600 million won (300 million won in cases of housing located outside the Seoul Metropolitan area), when the ownership of the relevant housing or general houses under subparagraph 10 is acquired:
(b) National housing leased for not less than five years by a resident making a lease of two or more national houses after making registration of business operator, etc. before the standard date for existing business operators (limited to a lease after registration of rental house before the standard date for existing business operators), and the aggregate of standard market prices of relevant housing and land appurtenant thereto do not exceed 300 million won, when the ownership of the relevant housing or general houses under the provisions of subparagraph 10 is acquired;
(c) Housing leased for not less than five years or made a parcelling-out conversion (including cases where selling to the rental businesses under the Rental Housing Act) by a resident who leases two or more constructed rental houses whose site area is less than 298 square meters under the Rental Housing Act and the total area of house is less than 149 square meters (including the portions deemed a house under the main sentence of Article 154 (3) and the area of basement exclusively used for residence, and referring to the exclusive use area in cases of multi-unit houses). In such cases, it refers to the residence for which the aggregate of standard market prices of the relevant house and the land appurtenant thereto (where there exists the house price under the Public Notice of Values and Appraisal of Real Estate Act, it refers to the said price) is not exceeding 600 million won, when the ownership of the relevant housing or general houses under subparagraph 10 is acquired;
(d) Housing satisfying all the following requirements as purchased rental housing under subparagraph 3 of Article 2 of the Rental Housing Act (limited to housing for which the first contract for sale in lot has been made from June 11, 2008 to June 30, 2009 and the earnest money has been paid for as unsold housing (referring to housing being supplied by method of first-come first-served because a contract for sale in lot has not been made by June 10, 2008 in a housing complex where the contract date for an occupant according to the public announcement for invitation of occupants has passed as housing being supplied pursuant to Article 38 of the Housing Act by business under the same Article)). In such cases, a resident who transfers the relevant housing shall file the final return or preliminary return on tax base of the taxable year in which the transfer date falls 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:
(ⅰ) Plottage is 298㎡ or less, 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-unit houses) of housing shall be 147㎡ or less;
(ⅱ) Housing shall be rented for five or more years;
(ⅲ) The total amount of standard market prices for the relevant housing and land annexed thereto shall not exceed 300 million won at the time of acquiring ownership thereof;
(ⅳ) Housing shall be located in an area other than the Seoul Metropolitan area;
(ⅴ) The number of purchased-rental houses that meets all the requirements (ⅰ) through (ⅳ) (hereafter referred to as "unsold purchased-rental house" in this Article) shall be five or more in the one Si/Gun (where the number of purchasedrental houses under item (a) is five or more or where the number of purchased-rental houses under item (b) is two or more, the total number of purchased-rental houses under item (a) or (b) and unsold purchased-rental houses shall be five or more (if the number of purchased-rental houses under item (b) is added thereto, it is limited only to cases where unsold purchased-rental houses is located in one Si/Gun));
3. National housing leased for not less than five years (hereafter referred to as "long-term rental housing subject to reduction or exemption" in this Article), 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. Housing (hereafter referred to as "long-term houses for employees" in this Article) whose relevant free provision period is not less than 10 years (hereafter referred to as "compulsory free provision period" in this Article), which is the housing owned by an employer and provided gratuitously to employees (excluding those in special relations with the relevant employer pursuant to Article 1-2 (1) of the Enforcement Decree of the Framework Act on National Taxes);
5. New construction housing whose capital gains tax is reduced or exempted under the provisions of Articles 99 and 99-3 of the Restriction of Special Taxation Act;
6. Cultural property housing falling under the provisions of Article 155 (6) 1;
7. Inherited housing falling under Article 155 (2) (limited to cases where five years have not elapsed since the date of receiving an inheritance);
8. Housing where three years have not elapsed since the date of acquisition, which are those acquired due to an exercise of mortgage or in substitution for credit reimbursement;
8-2. Housing used by the constituents of one household as a family child care center (hereafter referred to as "long-term family child care center" in this Article) for not less than five years after obtaining authorization from the head of a Si/Gun/Gu (referring to the head of an autonomous Gu) under Article 13 of the Infant Care Act and making a business registration under the provisions of Article 168 of the Act (hereafter referred to as "compulsory use period" in this Article), and six months has not elapsed since the date of ceasing its usage as a family nurturing facility;
9. Small housing falling short of the specific size prescribed by Ministerial Decree of Strategy and Finance by taking account of the value and floor space, etc. of the housing;
10. Relevant housing where one household possesses only one house except for the housing falling under subparagraphs 1 through 8 and 8-2 (hereafter referred to as "general house" in this Article).
(2) In applying paragraph (1), the number of houses shall be calculated as follows: <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
1. Multi-family house: The number of houses shall be calculated by applying mutatis mutandis Article 155 (15). In such cases, the proviso to Article 155 (15) shall apply only where it is selected by the resident; and the small housing under paragraph (1) 9 and Article 167-4 (3) 3 and the housing prescribed by Ministerial Decree of Strategy and Finance pursuant to Article 167-5 (1) 8 and Article 167-6 (3) 8 shall be deemed one house in its entirety even where the resident does not select;
2. Jointly 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 not less than two, any person pursuant to the order of each subparagraph of Article 155 (3) shall be deemed to possess the relevant jointly 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 a 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 by Presidential Decree No. 18705, 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 referred to as "compulsory lease period, etc." in this Article) 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 referred to as "long-term rental houses, etc." in this Article) under paragraph (1) 2 through 4 or 8-2, paragraph (1) 10 shall apply by regarding the relevant rental houses, or the houses for employees, or the family child care centers (hereafter referred to as "rental houses, etc." in this Article) as long-term rental houses, etc. under paragraph (1). <Amended by Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 23356, Dec. 8, 2011>
(5) When the causes that one household subjected to paragraph (4) becomes unable to satisfy the requirements for a compulsory lease period, etc. of the long-term rental houses, etc. (including cases where the period failing to lease the number of compulsory rental houses under the provisions of 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 by Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Calculation formula for the capital gains tax to be paid
Amount of tax that should have been paid where not regarding the relevant rental house as the long-term rental houses, 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 on the tax rate pursuant to 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/she is unable to lease the number of units required to be leased due to the unavoidable causes prescribed by Ministerial Decree of Strategy and Finance such as expropriation under the Act on Acquisition of and Compensation for Land, etc. for Public Works, 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 house redevelopment project or the house reconstruction project, in order to calculate the period of time not leasing the units required to be leased, the period of time from six months before the date of authorizing a plan for management disposal of the house concerned until six months after the date of completion of such house shall not be included.
(6) In applying paragraphs (1) through (5), where two or more 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 Ministerial Decree of Strategy and Finance together with the following documents: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 23356, Dec. 8, 2011>
1. A registration certificate of a lease business under the provisions of Article 6 of the Rental Housing Act or an authorization certificate of the child care center under Article 13 of the Infant Care Act;
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;
4. Deleted; <by Presidential Decree No. 19507, Jun. 12, 2006>
5. Other documents prescribed by Ministerial Decree of Strategy and Finance.
(8) Upon receiving an application filed pursuant to the provisions of paragraph (7), the head of the competent tax office having jurisdiction over the place for tax payment shall confirm a certified copy of the register of the rental house, etc. or a certified copy of the house and building register thereof by mutual use of the administrative information provided for in Article 36 (1) of the Electronic Government Act: <Added by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010>
(9) Notwithstanding paragraph (1), where a person having at least one house comes to own three or more 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 concerned 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, That 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 by Presidential Decree No. 23588, Feb. 2, 2012>
[This Article Added by Presidential Decree No. 18173, Dec. 30, 2003]
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Article 167-4 (Scope of Houses Excluded from Three or More Houses or Relocation Rights for One Household)
(1) "One household prescribed by Presidential Decree" in Article 104 (1) 5 of the Act means one household under Article 154. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) In calculating the number of houses (including the land annexed to the house; hereafter the same shall apply in this Article) and association member's relocation rights possessed by one household in Article 104 (1) 5 of the Act, the houses or the association member's relocation rights located in an area other than the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter referred to as "Seoul Metropolitan area" in this Article) and Metropolitan Cities (excluding the area falling under any of the following subparagraphs), of which the standard market price or the value (referring to the price of previous houses under Article 48 (1) 4 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents) does not exceed 300 million won at the time of transfer of relevant house or other houses, shall not be included therein: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. A Gun belonging to a Metropolitan City and an Eup/Myeon under Article 3 (3) and (4) of the Local Autonomy Act;
2. Areas prescribed by Ministerial Decree of Strategy and Finance by taking account of the housing provision rate, housing price, and their trends, etc. of the relevant area from among the Seoul Metropolitan area.
(3) "Cases prescribed by Presidential Decree" in Article 104 (1) 5 of the Act means the houses possessed by one household possessing three or more houses and association member's relocation rights in the Republic of Korea, which fall under any of the following: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Houses under paragraph (2);
2. Houses falling under any of Article 167-3 (1) 2 through 8 and 8-2;
3. Small houses less than a specific scale prescribed by Ministerial Decree of Strategy and Finance by taking into account the price and area, etc. of houses;
4. Where one household possesses only one house with the exception of houses falling under subparagraphs 1 and 2, the relevant house.
(4) In applying paragraphs (2) and (3), Article 167-3 (2) through (7) shall apply mutatis mutandis.
(5) Where a person who owns at least one house or association member's relocation right comes to own at least three aggregate number of house and association member's relocation right under Article 104 (1) 5 of the Act as of the date of marriage by marrying a person having at least one house or association member's relocation right, if the said person transfers the concerned house within five years from the date of the marriage, the number of house and association member's relocation right owned by the one household concerned shall be calculated by deducting the number of house and association member's relocation right owned by the transferor’s spouse as of the date of such transfer: Provided, That this shall not apply to any houses to be transferring after the date of acquisition of a new house or association member's relocation right where the house or the association member's relocation right was acquired within five years from the date of marriage. <Added by Presidential Decree No. 23588, Feb. 2, 2012>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 167-5 (Scope of Houses in Cases of Two Houses for One Household whereon Capital Gains Tax is Overtaxed)
(1) "Houses falling under two houses for one household prescribed by Presidential Decree" in Article 104 (1) 6 of the Act means houses possessed by one household possessing two houses in the Republic of Korea (houses falling under subparagraph 1 shall not be included in the calculation of the number of houses), which do not fall under any of the following: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21062, Oct. 7, 2008; Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 21195, Dec. 31, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 23887, Jun. 29, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. A house, as that located in any of the following areas within the Seoul metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter referred to as "Seoul Metropolitan area" in this Article) and in an area outside the Seoul Metropolitan area, of which the total amount of standard market price of the relevant house and the land annexed thereto does not exceed 300 million won at the time when the relevant house or other house is transferred;
(a) A Gun belonging to a Metropolitan City and an Eup/Myeon under Article 3 (3) and (4) of the Local Autonomy Act;
(b) An area prescribed by Ministerial Decree of Strategy and Finance taking into account the housing supply rate, housing prices and such housing trend, etc. of the relevant area;
2. A house falling under any of Article 167-3 (1) 2 through 8 and 8-2;
3. Where a household possesses two houses by acquiring one house (limited to a house, of which the total amount of the standard market price under Article 99 of the Act does not exceed 300 million won at the time of acquisition, and which is located in the same Si/Gun where the school, the place of work or the place for medical treatment is located) because one of the members of the household moves into another Si (including the Special Metropolitan City, Metropolitan Cities, Special Self-Governing City and the administrative city established pursuant to Article 15 (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 subparagraph)/Gun due to the entrance into a school, circumstances of duties, medical treatment or other extenuating circumstances prescribed by Ministerial Decree of Strategy and Finance, the relevant house (limited to cases where it has been resided for not less than one year after the acquisition and for which three years have not elapsed from the date on which the relevant circumstances have been settled);
3-2. A house situated outside of the Seoul Metropolitan area under Article 155 (8);
4. Where a person who possesses one house and constitutes one household joins the household in order to care for a lineal ascendant (including the lineal ascendants of his/her spouse and further including where one of the lineal ascendents is less than 60 years old) over 60 years old who possesses one house by living together, and accordingly one household possesses two houses (limited to cases where five years have not elapsed from the date of joining), relevant houses;
5. Where a person who possesses one house has married another person who possesses one house, and accordingly one household possesses two houses (limited to cases where five years have not elapsed from the date of marriage), relevant houses;
6. Houses for which a lawsuit on ownership is in progress, or which are acquired as a result of the relevant lawsuit (limited to cases where three years have not elapsed from the date of final decision due to a lawsuit);
7. Where one household possessing one house temporarily possesses two houses by acquiring another house before transferring the relevant house (including cases to acquire by constructing by him/herself), the previous house (limited to cases where three years have not elapsed from the date of acquiring another house (including cases where three years have elapsed, and which fall under circumstances prescribed by Ministerial Decree of Strategy and Finance));
8. Houses prescribed by Ministerial Decree of Strategy and Finance by taking into account the price and area, etc. of houses;
9. Where one household possesses only one house with exception of houses falling under subparagraphs 1 through 6, the relevant house.
(2) In applying the provisions of paragraph (1), Article 167-3 (2) through (8) shall apply mutatis mutandis. <Amended by Presidential Decree No. 21062, Oct. 7, 2008>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 167-6 (Scope of Houses Excluded from Two Houses and Association Member's Relocation Rights for One Household)
(1) "One household prescribed by Presidential Decree" in Article 104 (1) 7 of the Act means one household under Article 154. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) In calculation of the number of houses (including land appurtenant thereto; hereafter the same shall apply in this Article) and association member's relocation rights possessed by one household under Article 104 (1) 7 of the Act, houses and association members' relocation rights shall not be included in the calculation, if the houses and the rights concern the following areas and areas outside the Seoul Metropolitan area, among the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act (hereafter referred to as "Seoul Metropolitan area" in this Article), and if the standard market value of houses and the value of the association member's relocation rights (referring to the price of the previous house under Article 48 (1) 4 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents) do not exceed 300 million won as at the time of transfer of the relevant houses or other houses: <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
1. Guns under Metropolitan Cities and Eups/Myeons defined in Article 3 (3) and (4) of the Local Autonomy Act;
2. Areas prescribed by Ordinance of Ministry of Strategy and Finance, in consideration of the housing distribution rates, housing prices and trends thereof in the relevant area.
(3) "Cases prescribed by Presidential Decree" in Article 104 (1) 7 of the Act means houses possessed by one household possessing one house and one association member's relocation right respectively in the Republic of Korea, which fall under any of the following: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21138, Nov. 28, 2008; Presidential Decree No. 21159, Dec. 31, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Houses subject to an application of the provisions of Article 154 (1) by regarding as one house for one household under the provisions of Article 156-2 (3) through (5) whereon capital gains tax is levied;
2. Houses falling under any of Article 167-3 (1) 2 through 8 and 8-2;
3. Houses falling under paragraph (2);
4. Where one household possesses one house and one association member's relocation right as any of constituents of one household acquires one house (limited to a house of which total amount does not exceed 300 million won at the time of acquisition based on the standard market price under Article 99 of the Act, and which is located in the same Si/Gun where the school, the place of work or the place for medical treatment is located) in order to move his/her residence to another Si (including the Special Metropolitan City, Metropolitan Cities, Special Self-Governing City and the administrative city established pursuant to Article 15 (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 subparagraph)/Gun due to the entrance into a school, circumstances of duties, medical treatment or other extenuating circumstances prescribed by Ministerial Decree of Strategy and Finance, the relevant house (limited to cases where it has been resided in for not less than one year after acquisition, and three years have not elapsed from the date on which the relevant circumstances have been terminated);
4-2. A house situated outside of the Seoul Metropolitan area under Article 155 (8);
5. Where one household possesses one house and one association member's relocation right as a person owning one house or one association member's relocation right and constituting one household joins the households in order to care, by living together, for the lineal ascendant possessing one house or one association member's relocation right (including the lineal ascendant of his/her spouse and further including where one of the lineal ascendents is less than 60 years old) over 60 years old, the relevant house (limited to cases where five years have not elapsed from the date of joining);
6. Where one household possesses one house and one association member's relocation right as a person possessing one house or one association member's relocation right marries another person possessing one house or one association member's relocation right, the relevant house (limited to cases where five years have not elapsed from the date of marriage);
7. Houses for which the lawsuit on ownership is in progress, or which are acquired as a result of relevant lawsuit (limited to cases where three years have not elapsed from the date of final decision due to a lawsuit);
8. Houses prescribed by Ministerial Decree of Strategy and Finance by taking into account the price and area, etc. of houses.
(4) In applying the provisions of paragraphs (2) and (3), Article 167-3 (2) through (7) shall apply mutatis mutandis.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 167-7 (Scope of Stocks of Corporation Excessively Possessing Land for Non-business Use)
"Assets prescribed by Presidential Decree" in Article 104 (1) 9 of the Act means stocks, etc. falling under Article 158 (1) 1 or 5, 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 amount of assets of the relevant corporation exceeds 50/100. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 167-8 (Scope of Small and Medium Enterprises)
"Small and medium enterprises prescribed by Presidential Decree" in Article 104 (1) 11 (a) of the Act means enterprises falling under the small and medium enterprises under Article 2 of the Framework Act on Small and Medium Enterprises as of the date of transfer of stocks, etc. <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 168 (Scope, etc. of Assets Excluding Unregistered Transfer)
(1) "Assets prescribed by Presidential Decree" in the proviso to Article 104 (3) of the Act means those falling under any of the following subparagraphs: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010>
1. Assets acquired under a long-term installment, whose registration for an acquisition of such assets at the time of transfer is impossible under the term of such contract;
2. Assets whose registration for an acquisition of such assets at the time of transfer is impossible 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. One house for one household stipulated in Article 89 (1) 3 of the Act, whose registration is impossible as it fails to obtain a construction permit under the Building Act;
5. Asset for which a registration for a transfer of title under an inheritance has not been made, and which is transferred to the project operator under Article 18 of the Act on Acquisition of and Compensation for Land, etc. for Public Works;
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 construction business operator has acquired for the price for construction service under the Urban Development Act.
(2) In applying Article 104 (1) 1 of the Act, if any amount of tax paid or payable by the majority stockholder is included in the computed tax on capital gains from stocks, etc. under Article 158 (1) 1, the computed tax on capital gains shall be the amount computed by subtracting such tax paid or payable. <Added by Presidential Decree No. 17032, Dec. 29, 2000>
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Article 168-2 Deleted. <by Presidential Decree No. 21525, Jun. 8, 2009>
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Article 168-3 (Criteria, etc. for Designation of Designated Areas)
(1) "Designated area" in Article 104-2 (1) of the Act means, from among areas falling under any of the following subparagraphs, an area for which the Minister of Land, Infrastructure and Transport makes a request for a designation (including cases where the head of a related central administrative agency makes a request through the Minister of Land, Infrastructure and Transport), as he/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 Strategy and Finance by undergoing deliberation by the Deliberative Committee on Stabilization of Real Estate Prices under the provisions of Article 168-4. In such cases, as for an area falling under any of the following subparagraphs or for which the Minister of Land, Infrastructure and Transport has not made any request for designation, the Minister of Strategy and Finance shall refer it to the Deliberative Committee on Stabilization of Real Estate Prices and undergo its deliberation after receiving its reasons from the Minister of Land, Infrastructure and Transport: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 23113, Aug. 30, 2011; Presidential Decree No. 24441, Mar. 23, 2013>
1. Area for which 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, which falls under any of the following items:
(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. The area wherein the increasing ratio of land price for the immediately preceeding month is higher than 130/100 of the increasing ratio of national consumer price, which falls under any of the following items:
(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 requirements of the following items, which is the area wherein the development project under subparagraph 2 of Article 2 of the Restitution of Development Gains Act (including the development project whereon development allotment money is not levied) and the house reconstruction project (hereinafter referred to as "development project, etc.") are in progress (including cases where the head of a central administrative agency or the head of a local government have announced the relevant development project, etc.):
(a) The increasing ratio of house transaction price for immediately preceeding 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 preceeding month shall be higher than 130/100 of the increasing ratio of national house trade price;
4. The area falling under any of the following items, which is the district for housing site development under the Housing Site Development Promotion Act, the scheduled area and the peripheral area of the construction project for administration-centered complex city under the Special Act on the Construction of Multifunctional Administrative City in Yeongi-Gongju Area for Follow-up Measures for New Administrative Capital, or other area scheduled for promotion of large-scale development projects prescribed by Ministerial Decree of Strategy and Finance (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 Strategy and Finance deems it necessary, he/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 by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24441, Mar. 23, 2013>
(3) "Real estate prescribed by Presidential Decree" in Article 104-2 (2) of the Act means real estate falling under any of subparagraphs 1 through 3 among the following subparagraphs, however, any house falling under subparagraph 4 shall be excluded. In such cases, in cases of a multi-family house deemed an individual house pursuant to Article 155 (15) when subparagraph 4 applies, it shall be based on the portion divided to allow one household to reside independently: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Cases of designated areas under paragraph (1) 1 through 3: Houses (including the land annexed thereto);
2. Cases of designated areas under paragraph (1) 2: Real estate other than subparagraph 1;
3. Cases of designated areas under paragraph (1) 4: Real estate of subparagraphs 1 and 2;
4. Houses falling under any of the following items (excluding officetels under subparagraph 14 (b) of Appendix 1 of the Enforcement Decree of the Building Act; hereafter the same shall apply in this Article); provided, houses located in an area designated and publicly announced as readjustment area under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (including the project sites of the reconstruction association receiving authorization for establishment under the Housing Construction Promotion Act before amendment as Act No. 6916, the amended Act under the Housing Act) shall be excluded:
(a) Apartments under the provisions of Appendix 1 of the Enforcement Decree of the Building Act, whose exclusive use area does not exceed 60 square meters and whose standard market price under the provisions of Article 99 of the Act at the time of transfer shall not exceed 40 million won;
(b) Multi-family house and multi-household house under Appendix 1 of the Enforcement Decree of the Building Act, whose exclusive use area does not exceed 85 square meters and whose standard market price at the time of transfer under Article 99 of the Act shall not exceed 100 million won;
(c) Individual houses under Appendix 1 of the Enforcement Decree of the Building Act, whose site area does not exceed 170 square meters, and the total area of house (including the portion deemed a house under the provisions of the main sentence of Article 154 (3) and the area of underground room used for exclusive use for residence; hereafter the same shall apply in this Article) does not exceed 85 square meters and the standard market price under Article 99 of the Act at the time of transfer shall not exceed 100 million won.
(4) When the Minister of Strategy and Finance has designated a designated area under the provisions of paragraph (1), he/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 by Presidential Decree No. 20720, Feb. 29, 2008>
(5) When the Commissioner of the National Tax Service has received the notice under paragraph (4), he/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 paragraph (4).
(7) Where there exists a request for revocation of designation by the Minister of Land, Infrastructure and Transport as he/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 cases where the head of a related central administrative agency requests through the Minister of Land, Infrastructure and Transport), the Minister of Strategy and Finance shall revoke the designated area after undergoing deliberation by the Deliberative Committee on Stabilization of Real Estate Prices. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24441, Mar. 23, 2013>
(8) Paragraphs (2) and (4) through (6) shall apply mutatis mutandis to a revocation of designation under paragraph (7).
(9) Designated areas under the provisions of 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 the administrative city established pursuant to Article 15 (2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City) /Gun/Gu: Provided, That for the areas under paragraph (1) 3 and 4 and the permission districts under the provisions of Article 117 of the National Land Planning and Utilization Act, only the relevant area may be designated as a designated area. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(10) Notwithstanding paragraph (9), a part of areas from among the administrative districts corresponding to the area which has been designated as the designated area or area scheduled for a designation may be excluded from the relevant designated area after undergoing a 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.
(11) Statistics of the increasing ratio of national consumer price, increasing ratio of house trade price, increasing ratio of national house transaction, increasing ratio of land price and increasing ratio of national land price under paragraph (1) shall be based on the statistics approved by the Commissioner of the National Statistical Office on the preparation of statistics in accordance with Article 8 of the Statistics Act. In such cases, where there exist only the statistics of increasing ratio of transaction price for apartment houses under Appendix 1 of the Enforcement Decree of the Building Act, it shall be deemed the statistics of increasing ratio of the house transaction price for the relevant area, and where there exist no statistics of increasing ratio of real estate price of the immediately preceeding month, it shall be based on the statistics of the month before the last one.
(12) In applying paragraph (1), where the number corresponding to 130/100 of the increasing ratio of the national consumer price as provided for in subparagraph 1 through 3 of the same paragraph, 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 as provided for in subparagraph 4 of the same paragraph is a negative number, it shall be made as zero.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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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 Strategy and Finance designated by the Minister of Strategy and Finance, 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 Strategy and Finance from among the public officials of the Vice Minister level of related Ministries, the public officials in general service who belong to the Senior Civil Service, and the persons having the profound knowledge and experience in economy and real estate. <Amended by Presidential Decree No. 19513, Jun. 12, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24441, Mar. 23, 2013>
(3) Meetings of the Deliberative Committee shall be held with the attendance of a majority of all incumbent members, and resolutions shall require the consent of a majority of those present.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-5 (Designation Procedures, etc. 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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-6 (Criteria for Period of Land for Non-business Use)
"Period prescribed by Presidential Decree" in the main body of Article 104-3 (1) of the Act means the period falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Where the holding period of land is not less than 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 20/100 of the holding period of land. In such cases, the calculation of period shall be based on the number of days;
2. Where the holding period of land is not less than 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 20/100 of the holding period of land. In such cases, the calculation of period shall be made by the number of days;
3. Where the holding period of land is less than three years, the period falling under all of the following items: Provided, That in cases 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 20/100 of the holding period of land. In such cases, the calculation of period shall be made by the number of days.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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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, That where the factual current status are not obvious, it shall be based on the current status stated on the public registers.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-8 (Scope, etc. of Farmland)
(1) "Farmland" in Article 104-3 (1) 1 of the Act means the paddy field, ordinary field and orchard, which are land used for actual cultivation without any relations to the land category on cadastral books. In such cases, the portion of land, such as the farm hut, compost hut, pumping station, swamp, farming road, water channel, which are directly required for farmland management, shall be included.
(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) 1 (a) of the Act means the farmland excluding the farmland where a person for whom the resident registration has been made and who actually resides in a region within the same Si (including the administrative city established pursuant to Article 15 (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 farmland, in a Si/Gun/Gu adjacent thereto or in a place within a 20 kilometer radius of the farmland (hereinafter referred to as "residing in village") makes self cultivation under subparagraph 5 of Article 2 of the Farmland Act (hereinafter referred to as "self cultivation"). <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
(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) 1 (a) of the Act means any of the following cases: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21565, Jun. 26, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22395, Sep. 20, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Farmland falling under Article 6 (2) 2, 3, 9 and 10 (a) or (c) of the Farmland Act;
2. Farmland acquired by inheritance under Article 6 (2) 4 of the Farmland Act, which is the land for which three years have not elapsed from the date of commencing the inheritance;
3. Farmland possessed at the time of ceasing farming under Article 6 (2) 5 of the Farmland Act, which is the land for which three years have not elapsed from the date of giving up farming;
4. Farmland possessed by a person who has obtained permission for exclusive use of farmland under Article 6 (2) 7 of the Farmland Act or who has made a report on exclusive use of farmland, or the farmland for which a consultation on exclusive use of farmland under Article 6 (2) 8 of the same Act has been completed, which is the land used for relevant purpose for exclusive use;
5. Farmland acquired under Article 6 (2) 10 (d) through (f) of the Farmland Act, which is the land used for relevant business purposes;
6. Farmland possessed by a clan (limited to that acquired before December 31, 2005);
7. Land meeting all of the following requirements, on which it is impossible for an owner (including a person engaged together in farming while living together with the owner among the family members under the provisions of Article 154 (6)) to make self cultivation due to disease, age, enrollment, school attendance, appointment of public offices by election, and other inevitable reasons provided by Ministerial Decree of Strategy and Finance:
(a) It is required to be farmland for which an owner has resided in a village and made self cultivation continuously for not less than five years retrospectively from the date on which the reasons occur and the owner has resided in a village after the occurrence of such reasons. In such cases, where a family member under Article 154 (6), who lived together with the owner at the time of occurrence of such reason, resides in the location of the farmland, the owner shall be deemed to reside in a village;
(b) It is required to rent or rent 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 which has been leased on entrustment (limited to farmland entrusted by individuals) or has been leased without compensation by the Korea Rural Community Corporation under Article 3 of the Korea Rural Community Corporation and Farmland Management Fund Act for eight or more years pursuant to Article 24-4 (1) of the same Act;
9-2. Farmland being self cultivated by a person residing in village whose resident registration has been made in a place within a 80 kilometer radius of the farmland concerned and the farmland was acquired pursuant to the proviso to Article 119 (1) 2 of the Enforcement Decree of the National Land Planning and Utilization Act replacing the farmland which was subject to eminent domain pursuant to the Special Act on Support, etc. for Pyeongtaek-si, etc. Following Relocation of U.S. Military Bases in Korea;
10. Farmland possessable under the Farmland Act and other Acts, which is prescribed by Ministerial Decree of Strategy and Finance.
(4) "Area prescribed by Presidential Decree" in the main sentence of Article 104-3 (1) 1 (b) of the Act means green areas and development restriction zones prescribed in the National Land Planning and Utilization Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(5) "Farmland, the owner of which has lived and cultivated" in the proviso to Article 104-3 (1) 1 (b) of the Act means any of the following farmland:
1. Farmland cultivated by oneself while residing in a village for not less than one year retrospectively from the date of incorporation into an urban area under the main sentence of Article 104-3 (1) 1 (b) 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) 1 (b) of the Act means two years.
(7) Any person intending to be subject to application of paragraph (3) 7 shall submit the documents prescribed by Ministerial Decree of Strategy and Finance within a deadline for the tax base return on capital gains tax under Article 105 or 110 of the Act. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-9 (Scope, etc. 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) 2 (a) of the Act means any of the following forest land: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 20763, Apr. 3, 2008, Presidential Decree No. 21025, Sep. 22, 2008; Presidential Decree No. 21528, Jun, 9, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22073, Mar. 9, 2010>
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. Forest land falling under any of the following items, which is the forest land within a mountainous district under the Management of Mounttainous District Act; provided, the forest land passing two years from the date of incorporation into an urban area, which is the forest land within an urban area under the National Land Planning and Utilization Act (excluding preservation greenbelts under Article 30 of the Enforcement Decree of the same Act; hereafter the same shall apply in this subparagraph), shall be excluded:
(a) Forest land in operation with approval for 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 possessed 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 Urban Parks, Green Areas, etc. Act;
6. Forest land within a cultural property protection district under the Cultural Heritage Protection Act;
7. Land within a precinct possessed by the traditional Buddhist temple under the Preservation and Support of Traditional Buddhist Temples Act;
8. Forest land within a development restriction district under the Act on Special Measures for Designation and Management of Areas of Restricted Development;
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 Ministerial Decree of Strategy and Finance, which are necessary for 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) 2 (b) of the Act means forest land possessed by a person whose resident registration has been made and who actually resides in a region within the same Si (including the administrative city established pursuant to Article 15 (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 20 kilometers in a straight line from the farmland. <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
(3) "Forest land prescribed by Presidential Decree" in Article 104-3 (1) 2 (c) of the Act means any of the following forest land: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22395, Sep. 20, 2010>
1. Forest land used by the successor to a forestry operator under the Forestry and Mountain Villages Development Promotion Act for the production of seeds for forests, 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 the production of seed for forest or sapling for forest;
3. Forest land used for the business to create or manage and operate the natural recreation forest under the Forestry Culture and Recreation Act;
4. Forest land used for the business to create or manage and operate the arboretum under the Creation and Furtherance of Arboretums Act;
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, which is 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 a residence or business by taking into account the land owner, location, utilization situations, possession period, area, etc., which is prescribed by Ministerial Decree of Strategy and Finance.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-10 (Scope, etc. 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 the part other than the items of Article 104-3 (1) 3 of the Act means a site falling under any of the following subparagraphs: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22395, Sep. 20, 2010>
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, possession period and area, etc., which are prescribed by Ministerial Decree of Strategy and Finance.
(3) "Standard area of land for stock raising prescribed by Presidential Decree" in Article 104-3 (1) 3 (a) of the Act means the area of land calculated by applying the standard area by livestock and the number of livestock as provided for in Appendix 1-3. <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(4) "Area prescribed by Presidential Decree" in Article 104-3 (1) 3 (a) of the Act means green areas and development restriction zones pursuant to the National Land Planning and Utilization Act. <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(5) "Period prescribed by Presidential Decree" in Article 104-3 (1) 3 (a) of the Act means two years. <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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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) 4 (c) of the Act means land falling under any of the following subparagraphs: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21881, Dec. 14, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22395, Sep. 20, 2010>
1. Cases falling under any of the following items, for athletic facilities, such as athletic places and sports grounds:
(a) Land for athletic facilities for exclusive use by players:
(ⅰ) Land within the standard area of athletic facilities for exclusive use by players, prescribed by Ministerial Decree of Strategy and Finance, for athletic facilities continuously provided for the players' exclusive use by a person who has established an at-work athletic contest department under the National Sports Promotion Act: Provided, That the same shall not apply where an at-work athletic contest department does meet the requirements for players, leaders, etc. prescribed by Ministerial Decree of Strategy and Finance;
(ⅱ) Land within the standard area prescribed by Ministerial Decree of Strategy and Finance, for athletic facilities directly used for players' training by a person operating athletic contest business;
(b) Land for athletic facilities for employees:
(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. Land for parking lots, which falls under any of the following items:
(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, That 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 possess automobiles indispensible for business (excluding a passenger car, two-wheel automobile and omnibus for employees' commuter automobile), for persons other than businesses under Article 101 (3) 1 of the Enforcement Decree of the Local Tax Act: Provided, That 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:
3. Land created by an implementation of civil investment project provided by the Act on Private Participation in Infrastructure by a project entity designated under the same Act and land created by a project entity under other Acts, prescribed by Ministerial Decree of Strategy and Finance: Provided, That 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, That land exceeding the standard area prescribed by Ministerial Decree of Strategy and Finance shall be excluded;
5. Land owned for executing 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 and 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 Ministerial Decree of Strategy and Finance, and shall be within the standard area prescribed by Ministerial Decree of Strategy and Finance;
(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 Ministerial Decree of Strategy and Finance, for recreation facility business prescribed by Ministerial Decree of Strategy and Finance, such as specialized recreation business and complex recreation business under the Tourism Promotion Act;
7. Land for depository, etc.:
8. Land for aggregate collection place:
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 over the ratio prescribed by Ministerial Decree of Strategy and Finance;
11. Land falling under any of the following items, for a fish farm under the Act on Land Survey, Waterway Survey and Cadastral Records 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 overland sea-water breeding fisheries and seed production fisheries permitted under the Fisheries Act;
(b) Land used by persons who have received a license or permission under the Inland Water Fisheries 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, permitted, or reported fisheries;
(c) Land other than items (a) and (b) for which the ratio of amount of income for one year to the value of land is over the ratio prescribed by Ministerial Decree of Strategy and Finance;
12. In cases of land prescribed by Ministerial Decree of Strategy and Finance, 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 over the ratio prescribed by Ministerial Decree of Strategy and Finance;
13. Land (limited to smaller than 660 square meters) falling under the standard prescribed by Ministerial Decree of Strategy and Finance 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 Ministerial Decree of Strategy and Finance.
(2) In applying the provisions of paragraph (1) 2 (c), 10, 11 (c) 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 periods, but it shall be the larger of any of the ratio in each of the following subparagraphs. In such cases, where the amount of income generated from the relevant land may be classified by lots of land, the ratio of amount of income shall be calculated by lots:
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 preceeding taxable period) ÷ (Land value in the relevant taxable period + Land value in the immediately preceeding taxable period).
(3) "Amount of annual income" in paragraph (2) means the amount calculated by the methods provided for in each of the following subparagraphs:
1. It shall be the amount of income of 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 the money for lease on deposit basis or guarantee money is received, the amount calculated by applying mutatis mutandis the formula provided for in Article 49-2 (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 or prohibition of use of land under the Acts and subordinate statutes and 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 the provisions of 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 whose acquisition timing is late;
(b) Where the acquisition time is same, land selected by residents;
2. Where buildings or facilities exist on land:
(a) Land whose acquisition timing 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 the provisions of Article 104-3 (1) of the Act, where one or more buildings (including facilities, etc.; hereafter the same shall apply in this paragraph) are on the 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 / Floor area of many buildings.
(7) When 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 Commissioner of the National Statistical Office under the Statistics Act except cases where there exist special provisions in this Decree. <Amended by Presidential Decree No. 21301, Feb. 4, 2009>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-12 (Scope of Land Annexed to House)
"Multiple prescribed by Presidential Decree by each region" in Article 104-3 (1) 5 of the Act means the following multiples: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. The land within an urban area under subparagraph 1 of Article 6 of the National Land Planning and Utilization Act: Five times;
2. Other lands: Ten times.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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Article 168-13 (Scope of Villas and Standard for Application)
"Agricultural and fishing village house falling under the scope and standard prescribed by Presidential Decree and land annexed thereto" in Article 104-3 (1) 6 of the Act means a house and land annexed thereto, satisfying all of the following requirements: <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
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 be not more than 100 million won of the standard market prices;
3. It shall be located in the area excluding the area corresponding to any item of Article 99-4 (1) 1 (a) (i) through (iv) of the Restriction of Special Taxation Act.
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
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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 by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009>
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. After acquiring the land, the land within protection districts designated under the Cultural Heritage Protection Act: Period designated as protection districts;
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 Ministerial Decree of Strategy and Finance 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 aquisition or utilization situations, etc.: Period prescribed by Ministerial Decree of Strategy and Finance.
(2) As for the 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 by Presidential Decree No. 20720, Feb. 29, 2008>
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 Ministerial Decree of Strategy and Finance, such as cases where a specific period is required for transfer of land.
(3) Any of the following Land shall not be deemed land for non-business use pursuant to Article 104-3 (2) of the Act: <Amended by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21062, Oct. 7, 2008; Presidential Decree No. 21195, Dec. 31, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 24356, Feb. 15, 2013>
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 not less than eight years while living in the location of land prescribed by Ministerial Decree of Strategy and Finance, which are inherited or donated by the relevant lineal ascendant or spouse: Provided, That 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 not less than 20 years before December 31, 2006, which are transferred not later than December 31, 2009;
3. Land which is purchased by means of consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land, etc. for Public Works and other Acts, and of which business authorization is published before December 31, 2006 or of which acquisition date (referring to the date of acquisition of the relevant land by an ancestor in cases of land inherited; and where Article 97 (4) of the Act applies, referring to the date of acquisition of the relevant asset by the spouse or lineal ascendant and descendant who has donated) is five years before the business authorization is published;
4. Farmland falling under Article 104-3 (1) 1 (b) of the Act and any of the following:
(a) Farmland possessed 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 Ministerial Decree of Strategy and Finance 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/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 by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 19254, Dec. 31, 2005]
Section 4 Preliminary Return on Tax Base of Capital Gains and Payment thereof
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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 the tax base of capital gains and a statement of account of payment prescribed by Ministerial Decree of Strategy and Finance along with the documents attached thereto according to the following classifications to the head of the competent tax office having jurisdiction over the place for tax payment: <Amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 21934, Dec. 31, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Documents falling under each of the following items where assets under Article 94 (1) 1 and 2 of the Act are transferred:
(a) and (b) Deleted; <by Presidential Decree No. 19507, 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; <by Presidential Decree No. 21934, Dec. 31, 2009>
(f) A specification of capital expenditures and transfer expenses, etc.;
(g) A specification of the depreciation expenses;
2. Documents falling under each of the following items where assets under Article 94 (1) 3 and 4 of the Act are transferred:
(a) A copy of a contract for sales and purchase of the relevant assets;
(b) A specification of transfer expenses, etc.;
(c) In cases of majority stockholders, etc. of a corporation (including corporations other than listed corporations; hereafter the same shall apply in this Chapter), a specification of stock transactions stipulated by Ministerial Decree of Strategy and Finance;
(d) In cases of one stockholder of a corporation and other stockholders who fall under the latter part of Article 157 (4) 1, the written report on majority stockholders, etc. stipulated by Ministerial Decree of Strategy and Finance.
(2) The head of the competent tax office having jurisdiction over the place for tax payment who receives a preliminary return referred to in paragraph (1), shall confirm the documents related to the transfer of assets provided for in Article 94 (1) 1 and 2 of the Act by mutual use of the administrative information provided for in Article 36 (1) of the Electronic Government Act: <Added by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 21215, Dec. 31, 2008; Presidential Decree No. 22151, May 4, 2010>
1. The certified copies of the land register and the building register;
2. The certified copy of the land and building register book.
[This Article Wholly Amended by Presidential Decree No. 17456, Dec. 31, 2001]
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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 Ministerial Decree of Strategy and Finance.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 171 Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 172 Deleted. <by Presidential Decree No. 16664, Dec. 31, 1999>
Section 5 Final Return on Tax Base of Capital Gains and Payment thereof
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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 of capital gains and a statement of account of payment prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(2) "Documents prescribed by Presidential Decree" in Article 110 (5) of the Act means the following documents: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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 has failed to file a preliminary return under Article 105 of the Act shall attach an account statement of capital gains determined by Ministerial Decree of Strategy and Finance);
3. Where the amount of income is calculated under Article 101 of the Act, an account statement of the non-inclusion among necessary expenses.
(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 file 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(4) "Cases prescribed by Presidential Decree" in the proviso to Article 110 (4) of the Act means cases falling under any of the following subparagraphs: <Added by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, Feb. 18, 2010>
1. Where a person, who has made two or more preliminary returns on the assets subject to progressive rates in the current year, fails to file a return summing up the amount of capital gains already reported under Article 107 (2) of the Act;
2. Where the computed amount of tax for capital gains already reported varies if Article 103 (2) of the Act is applied to cases where the rights on the land, building or real estate, and other assets under Article 94 (1) 1, 2 and 4 of the Act are transferred twice or more;
3. Where the computed amount of tax for capital gains already reported varies if Article 103 (2) of the Act is applied to cases where the stocks, etc. under Article 94 (1) 3 of the Act are transferred twice or more.
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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 of capital gains and a statement of account of payment attached thereto.
(2) Where a person has submitted a statement of payment with a final return on the tax base of capital gains and a statement of account of payment attached thereto to the Bank of Korea or a postal service office pursuant to paragraph (1), he/she shall be deemed to have filed a return under Article 110 (1) of the Act.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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.
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Article 175-2 (Payment of Capital Gains Tax in Kind)
(1) Bonds under Article 112-2 (1) of the Act means the compensation bonds issued by the operator of a project under Article 63 of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects. <Amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005>
(2) Receipt value of the bonds to be appropriated as payment in kind under Article 112-2 (1) of the Act shall be governed by the amount assessed by applying mutatis mutandis Article 63 (1) 2 of the Inheritance Tax and Gift Tax Act. <Amended by Presidential Decree No. 18705, Feb. 19, 2005>
(3) The payment of capital gains tax in kind under Article 112-2 (1) of the Act shall be limited to cases where the paid amount of tax in the year wherein the land, etc. are transferred exceeds ten million won, with limiting to the amount of tax on the gains from transfer which have accrued from the transfer to, or the expropriation by, the operator of the public project under the said paragraph of the said Article.
(4) A person who intends to pay capital gains tax in kind under paragraph (3) shall file an application with the head of the competent tax office having jurisdiction over the place for tax payment by not later than ten days prior to the return deadline under Articles 105 and 110 of the Act, as prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(5) The head of the competent tax office having jurisdiction over the place for tax payment shall, upon receipt of an application under paragraph (4), assess the receipt value of the bonds under paragraph (2) by not later than the return deadline under Articles 105 and 110 of the Act, and shall notify the applicant of the status of a decision on such payment in kind.
(6) "Cases prescribed by Presidential Decree" in the proviso to Article 112-2 (1) of the Act means cases where the Minister of Strategy and Finance deems it necessary for the adjustment of revenue or currency. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 15191, Dec. 31, 1996]
Section 6 Decision on and Revision of Capital Gains, and Collection and Refund thereof
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Article 176 (Decision and Revision on Tax Base for Capital Gains and Amount of Tax)
(1) Deleted. <by Presidential Decree No. 16664, 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, That 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 by Presidential Decree No. 16664, 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 by Presidential Decree No. 16664, 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 by Presidential Decree No. 16664, 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 filing reassesses the actual transaction value" in the main sentence of Article 114 (5) of the Act means any of the following cases: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
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 500,000 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 not less than 500,000 won, but all 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.
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Article 176-2 (Estimated Decision and Revision)
(1) "Grounds prescribed by Presidential Decree" in the main sentence of Article 114 (7) of the Act means any of the following cases: <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Where the books, sales contract, receipts and other evidentiary documents required for verification of the actual transaction price at the time of transfer or acquisition do not exist or their key parts are incomplete;
2. Where the details of books, sale contract, receipts and other evidential documents are apparently false in light of the value of example sales and the appraised values as assessed by a certified public appraisal corporation under the Public Notice of Values and Appraisal of Real Estate Act (hereafter referred to as "certified public appraisal corporation" in this Article).
(2) "Value of acquisition converted by the method prescribed by Presidential Decree" in Article 114 (7) of the Act means the value of acquisition converted by the method referred to in the following: <Amended by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18988, Aug. 5, 2005; Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. In cases of stocks, etc. under Article 94 (1) 3 of the Act or other assets in Article 94 (1) 4 of the Act, the amount calculated by the following formula:
Actual transaction price at the time of transfer, 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 rights to acquire the land, building and real estate under Article 96 (1) and (2) 1 through 9 of the Act (subparagraph 6 shall apply only to the assets acquired before a fictitious acquisition date under paragraph (4)), the amount 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 (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, That 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 by Presidential Decree No. 19254, Dec. 31, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
1. Where there are transaction examples of assets bearing the identity or similarity with the relevant assets (excluding stocks, etc. of listed stock corporations) within three months before and after the date of transfer or acquisition respectively, such amount;
2. Where there exist the appraisal prices which are appraised by two or more certified public appraisal corporations on the relevant assets (excluding stocks, etc.) within three months before and after the date of transfer or acquisition respectively, and deemed to bear credibility (limited to those whose standard date of appraisal is within three months before and after the date of transfer or acquisition respectively), the average value of such appraisal prices;
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 of 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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, 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) The Commissioner of the National Tax Service may, where he/she 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, let him/her 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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 16664, Dec. 31, 1999]
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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 tax notice. 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 by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 20618, Feb. 22, 2008>
(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/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.
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Article 177-2 (Inquiry on Particulars, etc. 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 by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009>
1. Personal matters of the traders;
2. Purpose of use;
3. Details of the requested data.
[This Article Added by Presidential Decree No. 16664, Dec. 31, 1999]
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Article 178 (Methods for Retaining Books and Records on Stocks, etc.)
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 by Presidential Decree No. 22580, Dec. 30, 2010]
Section 7 Capital Gains Tax on Transfer of Overseas Assets
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Article 178-2 (Scope of Real Property Rights)
(1) "Real property rights prescribed by Presidential Decree" in subparagraph 2 of Article 118-2 of the Act means the following rights (including unregistered transferred assets): <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Superficies, lease on a deposit basis, and leasehold;
2. Rights to acquire real estate (including the rights to acquire a building upon completion of its construction and its appurtenant land).
(2) "Stocks, etc. prescribed by Presidential Decree" in subparagraph 3 of Article 118-2 of the Act means stocks, etc. (including securities depository receipts under Article 157 (1) issued by a foreign depository institution) issued by a foreign corporation (excluding the stocks, etc. listed on the securities exchange and stocks, etc. under paragraph (3)) and stocks, etc. issued by a domestic corporation and listed in a foreign market similar to the securities exchange. <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
(3) "Assets prescribed by Presidential Decree" in subparagraph 4 of Article 118-2 of the Act means other assets pursuant to Article 94 (1) 4 of the Act, located overseas. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(4) Article 158 (2) and (3) shall apply mutatis mutandis to cases of levying capital gains tax under paragraph (3).
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 178-3 (Calculation of Market Value of Overseas Assets)
(1) In cases of calculating the market value of overseas assets under the provisos to Article 118-3 (1) and 118-4 (1) 1 of the Act, if the value falling under any of the following subparagraphs is confirmed, such value shall be the market value of the relevant assets: Provided, That the provisions of subparagraphs 2 through 4 shall not apply to such cases as the stocks, etc. under Article 178-2 (2), and the assets under Article 94 (1) 4 (b) of the Act and Article 158 (1) 1 and 5 of this Decree (in cases of assets under Article 94 (1) 4 (b) of the Act, limited to the stocks, etc. under the same subparagraph) from among the assets under Article 178-2 (3): <Amended by Presidential Decree No. 18173, Dec. 30, 2003>
1. Values assessed by a foreign government (including local governments) in connection with a 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 a certified public appraisal institution 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 subparagraphs: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
1. In cases of real estate and real property rights, the assessment of the value of an overseas asset by applying mutatis mutandis Articles 61, 62, 64 and 65 of the Inheritance Tax and Gift Tax Act: Provided, That if an 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 not appropriate, it means an assessment by a certified public appraisal institution established under the Act on Publication of Real Estate Prices and Their Appraisal and Evaluation;
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) 1 (a) of the same Article shall be construed as "one month before the date of transfer or acquisition".
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 178-4 (Necessary Expenses for 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 sentence of Article 118-4 (1) 1 of the Act.
(2) Deleted. <by Presidential Decree No. 18173, 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, 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 by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 178-5 (Conversion into Foreign Currency for Gains from Transfer)
(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 by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, 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 said subparagraph shall be deemed the date of receiving or paying the price of transfer or acquisition. <Added by Presidential Decree No. 17456, Dec. 31, 2001>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 178-6 (Foreign Tax Credit)
(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 sentence of Article 118-6 (1) of the Act means an amount of tax falling under any of the following subparagraphs, which has been imposed by a foreign government (including a local government) on capital gains from overseas assets: <Amended by Presidential Decree No. 22034, 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 transfer amount of income 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 Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
CHAPTER Ⅳ TAX LIABILITIES OF NONRESIDENTS
Section 1 Common Provisions concerning Calculation of Amount of Tax on Nonresidents
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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 by Presidential Decree No. 22034, 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, That in cases of a nonresident who conducts the business both in or outside the Republic of Korea, income referred to in the following subparagraphs shall be deemed income generated from the business conducted in the Republic of Korea: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Where a nonresident transfers the inventory assets in the Republic of Korea (including cases 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 cases where the relevant inventory assets are transferred after manufacturing, etc. in the Republic of Korea), when presumed that he/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, from 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 cases where the relevant inventory assets are transferred after manufacturing, etc. abroad), when it is presumed that he/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, from 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, from 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, from 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 Ministerial Decree of Strategy and Finance 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 fixed 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 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, from 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 equipments by nonresidents.
(3) Notwithstanding paragraph (2), the income accruing overseas and falling under each of the following, which revert to a domestic place of business, shall be deemed included in the income accruing from domestic sources under subparagraph 5 of Article 119 of the Act: <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 20720, Feb. 29, 2008>
1. Income accruing from investing in the securities overseas, loaning cash to a person located abroad, or other similar activities;
2. Income accruing from renting, permitting for use, transferring or exchanging the asset or the rights overseas;
3. Income accruing from issuing, acquiring, transferring or exchanging the assets overseas, such as the stocks or bonds;
4. Other income determined by Ministerial Decree of Strategy and Finance.
(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/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, the provisions of the same paragraph shall apply, deeming that the relevant inventory assets are transferred in the Republic of Korea: <Amended by Presidential Decree No. 18173, 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/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 services referred to in the following: <Amended by Presidential Decree No 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010>
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 service directly paid to an airline, accommodation business or restaurant business with regard to the provision of manpower service. <Added by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010>
(8) "Wages received in consideration of labor prescribed by Presidential Decree" in subparagraph 7 of Article 119 of the Act means the following wages: <Amended by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010>
1. Wages received by the crew of ships sailing overseas, pelagic fisheries ship and aircraft operated by a resident or a domestic corporation;
2. Wages received in the capacity of executive of a domestic corporation.
(9) Deleted. <by Presidential Decree No. 24356, Feb. 15, 2013>
(10) Deleted. <by Presidential Decree No. 21301, Feb. 4, 2009>
(11) "Income prescribed by Presidential Decree" in the part other than the items of subparagraph 11 of Article 119 of the Act means income referred to in the following: <Amended by Presidential Decree No. 15500, Oct. 25, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 17339, Aug. 14, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Income generated from the transfer of the securities or equity shares by a nonresident: Provided, That with respect to the income generated from transfer of the stocks or equity shares through the securities exchange (including cases 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/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, That the income subject to a 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, That such income shall be excluded as those subject to a 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 exchange-traded derivatives, shall not be deemed a domestic source income. <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009>
(13) "Income prescribed by Presidential Decree" in subparagraph 12 (b) 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 by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010>
(14) Article 158 (3) shall apply mutatis mutandis to the calculation of the total amount of assets and the value of assets under subparagraph 9 (b) 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 by Presidential Decree No. 21301, Feb. 4, 2009>
(15) "Related nonresident prescribed by Presidential Decree" in subparagraph 12 (i) of Article 119 of the Act means a related nonresident falling under any of the following: <Amended by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Special relation with a resident or a domestic corporation under Article 2 (1) 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 (8) 1 (a) or (b).
(16) "Income generated from increase in the value due to capital transaction prescribed by Presidential Decree" in subparagraph 12 (i) 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 of the items of Article 88 (1) 8 or subparagraph 8-2 of the same paragraph 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 to 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 cases 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 two or more 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 two or more investment schemes, the investment ratio of each investment scheme shall be aggregated to compute the investment ratio.
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Article 179-2 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 179-3 Deleted. <by Presidential Decree No. 23588, Feb. 2, 2012>
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Article 180 (Scope of Agent, etc. of Nonresident)
"Persons prescribed by Presidential Decree" in Article 120 (3) of the Act means persons falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Persons who always keep the assets of a nonresident, and customarily delivers or transfers them;
2. Persons as intermediaries, dealers on general consignment and other independent agents, who conduct the activities of important parts of business such as conclusion of contracts, mainly for the specified nonresident only (including cases where he/she displays activity in the normal phases of his/her 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).
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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, That when Article 89 (1) 3 of the Act applies, a nonresident who meets the requirements referred to in Article 154 (1) 2 (b) and (c) shall be excluded. <Amended by Presidential Decree No. 24356, 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 subparagraph 1 of Article 3-2 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 by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Newly inserted by Presidential Decree No. 22034, Feb. 18, 2010]
Section 2 Global Taxation on Nonresidents
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Article 181 (Calculation of Tax Base and Amount of Tax in Global Taxation)
(1) The calculation of the tax base and amount of tax in cases of global taxation under Article 122 of the Act shall be as follows: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 23588, Feb. 2, 2012>
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 entertainment expenses under Articles 34 and 35 of the Act, such contribution or entertainment expenses 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 2 (a) 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 fixed assets under Article 62 (2) 2 (e) 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 fixed assets of a nonresident;
10. Interest income or dividend income under subparagraphs 1 and 2 of Article 119 of the Act shall be confined 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 Ministerial Decree of Strategy and Finance, shall not be included in necessary expenses under Article 27 of the Act. <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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Article 181-2 (Calculation of Domestic Source Income concerning the Transaction between Domestic Place of Business and Main Office, Etc.)
(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 by Presidential Decree No. 24356, Feb. 15, 2013>
(2) Upon applying paragraph (1), expenses incurred due to the inside trading shall be limited to those actually disbursed within the scope of the arm’s length price in accordance with an agreement, etc. and shall be included in necessary expenses, and the expenses prescribed by Ministerial Decree of Strategy and Finance such as the interest incurred due to fund transactions shall not be included in the necessary expenses. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
(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 by Presidential Decree No. 24356, Feb. 15, 2013>
(4) Upon applying paragraphs (1) through (3), methods of calculating the domestic source income generated from the inside trading, 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 a detailed statement of the inside trading, submission of documents such as the statement of calculating distribution of expenses, and other necessary matters shall be prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 182 (Report and Payment by Nonresident)
In global taxation on domestic source income of nonresidents under Article 124 of the Act, the provisions concerning the report and payment by residents among this Decree shall apply mutatis mutandis to reports and payments with regard thereto.
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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/her agent, not later than the date for a tax collection through withholding on a withholding agent: <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 23588, 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, That 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, That 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 by Presidential Decree No. 15969, 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 by Presidential Decree No. 21301, 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, That where necessary expenses actually involved exceed an amount of money equivalent to 80/100, the exceeding amount shall be also included. <Added by Presidential Decree No. 21301, Feb. 4, 2009>
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Article 183-2 (Concept, etc. 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 5 of the Adjustment of International Taxes Act and Article 4 of the Enforcement Decree of the same Act mutatis mutandis. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
(2) "Related nonresident prescribed by Presidential Decree" in Article 126 (6) 1 of the Act means any of the following relationship: <Amended by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. A nonresident, and his/her spouse, linear blood relatives and siblings;
2. Where a nonresident owns directly or indirectly not less than 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 mutatis mutandis shall be the arm's length price. <Amended by Presidential Decree No. 17339, Aug. 14, 2001; Presidential Decree No. 22034, Feb. 18, 2010>
(4) With regard to the calculation of the indirect ownership ratio of the stocks under paragraph (2) 2, Article 2 (2) of the Enforcement Decree of the Adjustment of International Taxes Act shall apply mutatis mutandis. <Added Amended by Presidential Decree No 19327, Feb. 9, 2006>
(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 by Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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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 Ministerial Decree of Strategy and Finance, by not later than the payment deadline for the withholding tax under Article 156 (1) of the Act. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 17032, Dec. 29, 2000]
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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/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 paragraph (1), shall submit a settlement return on capital gains from transfer of securities by nonresident determined by Ministerial Decree of Strategy and Finance, 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 by Presidential Decree No. 20720, Feb. 29, 2008>
(3) "Cases prescribed by Presidential Decree, such as transferring to another nonresident or a foreign corporation with no domestic place of business" in the main sentence of Article 126-2 (3) of the Act means cases of transferring the following securities: <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009>
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 Ministerial Decree of Strategy and Finance. <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
[Wholly Amended by Presidential Decree No. 17032, Dec. 29, 2000]
CHAPTER Ⅴ WITHHOLDING TAX
Section 1 Withholding Tax
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Article 184 (Scope of Business Income Subject to Withholding Tax)
(1) "Business income prescribed by Presidential Decree" in Articles 127 (1) 3 of the Act means income generated by providing services under Article 12 (1) 5 and 14 of the Value-Added Tax Act: Provided, That income falling under any of the following subparagraphs shall be excluded: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Income amounting to the ratio of the price for medicines calculated as prescribed by Ministerial Decree of Strategy and Finance out of business income earned by providing the service of compounding medicines under subparagraph 4 of Article 29 of the Enforcement Decree of the Value-Added Tax Act;
2. Income earned by providing services under subparagraph 1 (f) of Article 35 of the Enforcement Decree of the Value-Added Tax Act.
(2) Deleted. <by Presidential Decree No. 21301, Feb. 4, 2009>
(3) Any person who is liable to withhold income tax when withholding tax pursuant to Article 127 (1) 3 and (2) of the Act shall be a person falling under any of the following subparagraphs: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, Feb. 18, 2010>
1. A business operator;
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.
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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 in cases where a business operator (including a corporation) provides services falling under any of the following subparagraphs, and enters service charges of a person providing services under subparagraph 1 (f) of Article 35 of the Enforcement Decree of the Value-Added Tax Act, along with such provided value (in cases of a business operator subject to Article 25 of the Value-Added Tax Act, referring to a consideration for provision; hereafter the same shall apply in this Article), on an invoice, tax invoice, receipt, or sales slip of credit card transaction, separately from such provided value (only applicable to cases where service charge are not appropriated as his/her own amount of income), and where the amount of service charges separately entered exceeds 20/100 of the value provided: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20516, Dec. 31, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Services of food or lodging;
1-2. Massage clinics, barbershops, sports massage places and other services provided at the 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 Ministerial Decree of Strategy and Finance.
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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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 by Presidential Decree No. 24356, Feb. 15, 2013]
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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 Ministerial Decree of Strategy and Finance (including submitting it by means of the Home Tax Service) to the head of the competent tax office in charge of withholding. <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008>
(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 by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15565, Dec. 31, 1997>
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Article 186 (Special Cases concerning Payment of Withholding Taxes)
(1) "A withholding agent prescribed by Presidential Decree" in Article 128 (2) of the Act means any person liable for withholding, the number of whose regular employees is not more than 20 in the preceding taxable period (excluding a person conducting a financial and insurance business) who has obtained approval for semiannual payment of the withholding tax on income falling under the subparagraphs of Article 127 (1) of the Act from the head of the competent tax office in charge of withholding or who has been designated, as determined by the Commissioner of the National Tax Service. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
(2) The number of regular employees in the preceding taxable period under paragraph (1) shall be the average number of persons employed on a regular basis as of the end of each month from January to December of the preceding taxable period. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) A person who intends to obtain approval under paragraph (1) shall file an application with the head of the competent tax office in charge of withholding from the first to the last day of the month immediately preceding the semi-annual period wherein he/she intends to pay the withheld amount of tax semi-annually. <Amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999>
(4) The head of the competent tax office in charge of withholding who has received an application under paragraph (3) shall make a decision on 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 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/she shall be deemed to have obtained approval. <Amended by Presidential Decree No. 22034, 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 by Presidential Decree No. 15969, Dec. 31, 1998>
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Article 187 (Scope of Long-term Bonds)
(1) "Long-term bonds prescribed by Presidential Decree" in Article 129 (1) 1 (a) of the Act means bonds, etc. under Article 46 of the Act, which are bonds, etc., the period of which from the issuance date of the relevant bonds, etc., to the date agreed on the redemption of all the principal in lump sum is ten or more years, and the conditional bonds which may be converted into or exchanged with stocks, or be redeemed early before the end of such period shall be excluded.
(2) Any person who intends to be subject to separate taxation pursuant to Article 129 (1) 1 (a) of the Act shall, not later than the time of income under Article 45, submit an application for separate taxation on interest income of long-term bonds prescribed by Ministerial Decree of Strategy and Finance to the relevant financial company, etc., or the payers of interest, etc.: Provided, That where interest is paid on two or more occasions, he/she shall be deemed to have applied for a separate taxation even if he/she does not submit again the application to the relevant financial company, etc., or the payers of interest, etc., and where he/she intends not to be subject to separate taxation, he/she shall, not later than the time of income of the following interest income, submit an application for withdrawal of separate taxation on the long-term bonds prescribed by Ministerial Decree of Strategy and Finance.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 187-2 (Scope of Life-Long Pension Agreement)
“Life-long pension agreement prescribed by Presidential Decree” under Article 129 (1) 5-2 (c) of the Act means an agreement in which a subscriber to the agreement can receive pension until the date of his/her death without any right to early terminate the agreement.
[This Article Newly inserted by the Presidential Decree No. 24356, Feb. 15, 2013]
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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 by Presidential Decree No. 15604, Dec. 31, 1997; Presidential Decree No. 8705, 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 by Presidential Decree No. 22034, Feb. 18, 2010>
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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 by Presidential Decree No. 22034, 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 by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Wholly Amended by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 190 (Special Cases concerning Timing for Withholding Tax from Interest Income)
Income tax shall be withheld from the following interest income, considering that income was paid on the date under each of the following: <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22493, Nov. 15, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Interest and the discounted value of the bills sold or mediated by financial companies, etc., the short-term electronic bonds, etc. under Article 2 of the Act on Issuance and Distribution of Short-Term Electronic Bonds, etc. (hereafter referred to as “short-term electronic bonds, etc.” in this subparagraph), and the cover notes sold by banks under Article 2 of the Banking Act (including banks under Article 61 (2) 2 through 4 of the Enforcement Decree of the Corporate Tax Act; hereafter referred to as "bank" in this Article) and mutual savings banks under the Mutual Savings Banks Act, traded by the passbook in custody (in cases of cover notes sold by a bank, including cover notes which are not traded by the passbook in custody): Provided, That it shall be only applicable to cases where any person who receives interest and discounted value of the relevant bills and short-term electronic bonds, etc. has selected to withhold on the date of said discount sale where such bills and short-term electronic bonds 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:
The date of discount sale;
1-2. Income under subparagraph 1 (b) 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;
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 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;
2. Other interest income:
The dates prescribed by subparagraphs 1 through 5, 7 through 9, 9-2 and 10 of Article 45.
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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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
1. Deemed dividend:
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; <by Presidential Decree No. 22580, Dec. 30, 2010>
4. Other dividend income:
The dates prescribed in the subparagraphs of Article 46.
[This Article Wholly Amended by Presidential Decree No. 17032, Dec. 29, 2000]
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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 25 (6) of the Enforcement Decree of the Adjustment of International Taxes Act) in determining or revising 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 commissioner of the competent regional tax office who determines or revises the amount of the corporate income to the relevant corporation by a notice of change in the amount of income determined by Ministerial Decree of Strategy and Finance within 15 days from the date of such determination or revision: Provided, That where the location of the relevant corporation is obscure, or where it is impracticable to forward such notice, the relevant stockholder and the resident subjected to the disposition of the relevant bonus or other income shall be notified thereof. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 23588, Feb. 2, 2012; Presidential Decree No. 24356, Feb. 15, 2013>
(2) and (3) Deleted. <by Presidential Decree No. 22580, 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 relevant resident who has been given disposition on the relevant bonus or other income of the fact (the details of changes in the amount of income shall not be included) that he/she notified where he/she notified the relevant corporation of the notice of changes in amount of income. <Added by Presidential Decree No. 20618, Feb. 22, 2008>
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Article 193 (Delivery of Withholding Tax Receipts)
(1) and (2) Deleted. <by Presidential Decree No. 22580, 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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 22034, Feb. 18, 2010>
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 financial companies, etc. notify, upon receipt of an application from the receiver of the interest income or dividend income, him/her of the details of such payment and the business registration number, etc. of a withholding agent by post, via information communications using the electronic data processing system, or via facsimile telegraph.
(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 by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, Feb. 18, 2010>
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Article 193-2 (Withholding Taxes on Bonds, etc.)
(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).
(3) The amount equivalent to interest, etc. (hereafter referred to as "amount equivalent to interest, etc. in the holding period" in this Article and Article 207-3) under Articles 46 and 133-2 (1) of the Act means the amount calculated by applying any of the following rates according to the formula of interest, etc. agreed in the period for calculation or interest, etc., to the holding period from the date of purchase to the date of sale of the relevant bonds, etc.: Provided, That 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 convertible bonds or exchangeable bonds has failed to pay a check, the amount equivalent to interest, etc. of the holding period of a person who converts or exchanges shall be deemed nil; and where there is an agreement to pay interest after the demand of 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 Ministerial Decree of Strategy and Finance: <Amended by Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
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 subparagraph 1, a rate calculated by adding up the discount rate and deducting the premium rate when a corporation issues the relevant bonds at a coupon rate.
(4) Deleted. <by Presidential Decree No. 22580, 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 by Presidential Decree No. 24356, Feb. 15, 2013>
[This Article Added by Presidential Decree No. 22034, Feb. 18, 2010]
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Article 193-3 Deleted. <by Presidential Decree No. 22185, Jun. 8, 2010>
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Article 194 (Application of Simplified Tax Withholding Table for Wage and Salary Income)
(1) In cases where income tax is collected through withholding under Article 134 (1) of the Act, the tax on wage and salary income shall be collected by withholding on the basis of the amount of tax indicated on a corresponding column in Appendix 2, the simplified tax withholding table for wage and salary income. <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 17032, Dec. 29, 2000>
(2) In cases of paragraph (1), where the withholding agent in the secondary working place makes a tax withholding, the tax rate indicated on a corresponding column shall apply by considering that there exist only a basic deduction for the relevant principal of employee and a standard deduction. <Amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15138, Aug. 22, 1996; Presidential Decree No. 19890, Feb. 28, 2007>
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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, That 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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Wholly Amended by Presidential Decree No. 15191, Dec. 31, 1996]
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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 Ministerial Decree of Strategy and Finance (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, it shall be deemed that the book for tax withholding for wage and salary income is kept and recorded. <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 15138, Aug. 22, 1996; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010>
(3) A withholding agent shall collect, as the income tax, the amount obtained by deducting the following amounts from the computed amount of tax on global income under paragraph (2): Provided, That in cases where the aggregate of the following amounts exceeds the computed amount of tax for global income, the portion of such excess shall be refunded: <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
1. Amount of tax to be withheld under Article 134 (1) of the Act (excluding the additional amount of tax);
2. Amount of foreign tax credit and tax credit for wage and salary in come.
(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 by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009>
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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/her principal workplace and secondary workplace by the end of the relevant taxable period, and submit a report on workplace (or change) prescribed by Ordinance of Ministry of Strategy and Finance to the withholding agent of the principal workplace.
[This Article Wholly Amended by Presidential Decree No. 22580, Dec. 30, 2010]
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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 by Presidential Decree No. 22034, Feb. 18, 2010>
(2) Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 198 (Report on Income Deduction by Wage and Salary Income Earner)
(1) Any person with wage and salary income (excluding wage and salary income falling under any item of Article 127 (1) 4 of the Act) shall submit a report on income deduction of a wage and salary income earner to a withholding agent by not later than the date on which the wage and salary income for February of the following year of the relevant taxable period (in cases of retirement, by not later than the date on which the wage and salary income for the month whereto belongs the date of his/her retirement). <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(2) A wage and salary income earner shall submit a report on income deduction of a wage and salary income earner, along with a certified transcript of resident registration card; provided,, where the person has submitted a certified transcript of resident registration card, and there is no change in relation to a spouse or dependents qualifying for deduction, submission thereof may be omitted. <Added by Presidential Decree No. 22580, Dec. 30, 2010>
(3) In submitting a report under paragraph (1), if there exists any person falling 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 deduction of a wage and salary income earner. <Amended by Presidential Decree No. 15191, Dec. 31, 1996>
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Articles 199 and 200 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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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 taxes exists to be paid under withholding by a withholding agent, it shall be refunded, as prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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Articles 201-2 through 201-4 Deleted. <by Presidential Decree No. 22185, Jun. 8, 2010>
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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 by Presidential Decree No. 17032, Dec. 29, 2000]
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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 Ministerial Decree of Strategy and Finance (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, it shall be deemed that the book for tax withholding for pension income is kept and recorded. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(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, by making, as the tax base, the amount obtained by performing the pension income deduction, basic deduction, additional deduction and standard deduction from the aggregate of pension income by income earner which have been paid in the relevant taxable period. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
(3) A withholding agent shall collect the amount, as income tax, obtained by deducting the following amounts from the assessed amount of tax on gross income under paragraph (2): Provided, That if the aggregate of the following amounts exceed the assessed amount of tax on gross income, such excess portions shall be refunded:
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.
[This Article Added by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 201-7 (Report on Income Deduction by Pension Income Earner)
(1) Where a person with pension income submits a report on income deduction of pension income pursuant to Article 143-6 (1) and (2) of the Act, Article 198 (2) shall apply mutatis mutandis to submission of a certified transcript of resident registration card. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(2) In submitting a report on income deduction for pension income pursuant to Article 143-6 (1) and (2) of the Act, if there exists any person falling 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 deduction for pension income. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(3) A withholding agent who pays public pension income may prepare a report on income deduction of pension income earner and publish it on the information and communications network, and the pension income earner may submit the report on income deduction of pension income earner concerned through the information and communications network. <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
(4) Where a pension income earner has confirmed that there is no error in the report on income deduction that the withholding agent prepared (including cases where there are errors and the pension income earner has corrected the relevant errors), the report on income deduction shall be deemed a report prepared and submitted firsthand by the pension income earner concerned. <Added by Presidential Decree No. 20618, Feb. 22, 2008>
(5) When a pension income earner requests to peruse and correct the report on income deduction of pension income earner, the withholding agent shall allow it. <Added by Presidential Decree No. 20618, Feb. 22, 2008>
[This Article Added by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 201-8 Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 201-9 Deleted. <by Presidential Decree No. 24356, Feb. 15, 2013>
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Article 201-10 (Issuance, etc. of Written Confirmation of Income Deduction for Confirming Amount of Tax-Exemption)
(1) Where any of the following persons (hereafter referred to as “pension income earner, etc.” in this Article) has an amount of tax-exemption (in cases of a public pension income, referring to an amount contributing to tax-exemption, etc.; hereafter the same shall apply in this Article) and intends to have it confirmed, he/she shall request the head of the competent tax office to issue a written confirmation of income deduction such as a written confirmation of deduction of pension insurance premium and submit it to the withholding agent:
1. A person who intends to receive various pension money and lump sum payment pursuant to the public pension-related Acts;
2. A person who intends to withdraw money from a pension account;
3. A person who intends to receive the other income pursuant to Article 21 (1) 18 of the Act.
(2) Where a withholding agent who has received a written confirmation of income deduction, such as a written confirmation of deduction of pension insurance premium pursuant to paragraph (1), shall, if the amount of paid pension insurance premium, etc. (excluding the amount previously confirmed as an amount of tax-exemption; hereafter referred to as the “paid amount subject to confirmation” in this Article) exceeds the amount of income deduction, confirm the excess as an amount of tax-exemption.
(3) Where a pension income earner, etc. submits a certificate of pension payment of other pension accounts (excluding the pension accounts in which receipt of pension has been started or early terminated) together with a written confirmation of income deduction, such as a written confirmation of deduction of pension insurance premium, a withholding agent shall confirm the lesser amount of those under each of the following as the relevant pension account’s amount of tax-exemption, notwithstanding paragraph (2):
1. Where the sum of the relevant pension account’s paid amount subject to confirmation and that of other pension accounts exceeds the amount of income deduction received, the exceeding amount;
2. A relevant pension account’s paid amount subject to confirmation.
(4) The written confirmation of income deduction, such as a written confirmation of deduction of pension insurance premium under paragraph (1), shall be prescribed by Ordinance of Ministry of Strategy and Finance, and where a pension income earner, etc. requests issuance of a written confirmation of income deduction such as a written confirmation of deduction of pension insurance premium and a certificate of pension payment, the head of the competent tax office having jurisdiction over such matters and the pension account administrator shall immediately issue the same.
[This Article Wholly Amended by Presidential Decree No. 24356, Feb. 15, 2013]
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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/she shall submit an application for year-end tax settlement for business income prescribed by Ordinance of Ministry of Strategy and Finance by the end of the relevant taxable period for which he/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 by Presidential Decree No. 22580, Dec. 30, 2010 Presidential Decree No. 24356, Feb. 15, 2013>
(2) Deleted. <by Presidential Decree No. 22580, 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/she shall submit a waiver of the year-end tax settlement of the tax amount of business income prescribed by Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 22580, Dec. 30, 2010>
(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 Ministerial Decree of Strategy and Finance 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").
(5) Article 201 shall apply mutatis mutandis to cases where the excess amount pursuant to Article 144-2 (3) of the Act is refunded to the relevant business operator.
(6) Deleted. <by Presidential Decree No. 22580, 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 Ministerial Decree of Strategy and Finance and record it every month. In such cases, where he/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/she shall be deemed to prepare and record a withholding book for business income.
(8) and (9) Deleted. <by Presidential Decree No. 22580, 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/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/she shall comply with examples of the year-end tax settlement of the tax amount of wage and salary income.
[This Article Added by Presidential Decree No. 22185, Jun. 8, 2010]
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Article 201-12 (Return, etc. on Income Deduction for Business Income subject to Year-end Tax Settlement)
Any business operator who intends to obtain deductions on global income pursuant to Article 144-3 of the Act shall submit a return on income deduction prescribed by Ministerial Decree of Strategy and Finance with a certified transcript of resident registration card pursuant to Article 167 (1) of the Act attached thereto to a withholding agent.
[This Article Added by Presidential Decree No. 22185, Jun. 8, 2010]
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Article 202 (Amount of Other Income subject to Tax Withholding)
(1) Amount of other income under Article 145 (1) of the Act shall be the amount obtained 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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 19890, 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 by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, 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, That when it has not been received until the date when three months have passed since the expiration of the taxable period of the relevant partnership enterprise, it shall be withheld on the date when three months have passed. <Added by Presidential Decree No. 21301, Feb. 4, 2009>
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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 receipt other than pension, 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 receipt other than pension ÷ 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 receipt other than pension“ 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 receipt other than pension concerned:
Aggregate amount of deferred retirement income tax × (Aggregate
amount of withdrawn retirement income ÷ Aggregate amount of
deferred retirement income)
(4) 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 Ministerial Decree of Strategy and Finance to the person who has received as a receipt other than pension.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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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) other than its subparagraphs (hereafter referred to as “applicant for refund” in this Article) shall submit a statement of the taxation deferred account prescribed by Ministerial Decree of Strategy and Finance to the withholding agent.
(2) A withholding agent who has received the application for refund pursuant to paragraph (1) shall deem the amount of tax calculated according to the formula under Article 202-2 (1) as the amount of tax to be refunded; and where the amount of income tax to be refunded exceeds the amount of income tax to be withheld and paid in the month of refund, it shall be adjusted from the amount of income tax to be withheld and paid from the following month: Provided, That where a withholding agent submits the application for refund of the withholding tax prescribed by Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the affairs of withholding tax, the head of the competent tax office shall refund the surplus.
(3) The amount of tax to be refunded pursuant to paragraph (2) shall be refunded in the method of transfer to, or deposit in, the pension account stated in the statement of the taxation deferred account, and the relevant amount of tax to be refunded shall be included in deferred retirement income: Provided, That where an applicant for refund has submitted a statement of the taxation deferred account, due to business closure, etc. of the withholding agent concerned, to the head of the competent tax office having jurisdiction over the affairs of withholding tax, the head of the competent tax office may refund directly to the applicant for refund.
(4) Where a retirement income tax is not withheld or refunded pursuant to Article 146 (2) of the Act, a withholding agent concerned shall without delay notify the detailed statement of payment under Article 164 of the Act to the pension account administrator.
[This Article Added by Presidential Decree No. 24356, Feb. 15, 2013]
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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 on the sum of previously paid retirement income and the retirement income to be paid by the person concerned.
(2) The years of continuous service in cases of settlement of retirement income pursuant to paragraph (1) 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.
(3) “Employment agreement prescribed by Presidential Decree” under Article 148 (1) 2 of the Act means, as an agreement to be entered into with an employer for the purpose of providing labor, a single number of agreement having the same employer (including cases where not deemed retirement pursuant to Article 43 (1)).
[This Article Wholly Amended by Presidential Decree No. 24356, Feb. 15, 2013]
Section 2 Special Cases of Tax Withholding by Taxpayers Association
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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 requirements in the following subparagraphs: <Amended by Presidential Decree No. 22034, 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 50 or more taxpayers to become its members, and obtain consent 2/3 or more of them: Provided, That 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 20 or more 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, That this shall not apply to cases 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 a person falling under any of the following subparagraphs: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Distributors of agricultural, livestock, and marine products: Provided, That persons subject to double-entry bookkeeping under Article 160 of the Act shall be excluded;
2. Stall keepers;
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 subparagraphs, it shall be dissolved: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Where agreed by not less than one half 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, That in cases of the proviso to paragraph (1) 1, this shall not apply.
(4) The commissioner of the competent regional tax office may, in cases where a taxpayers association falls under any of the following subparagraphs, 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 the organization and operation of taxpayers associations under paragraph (1) shall be determined by the Commissioner of the National Tax Service.
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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 Ministerial Decree of Strategy and Finance to the relevant members. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(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 by Presidential Decree No. 17032, Dec. 29, 2000; Presidential Decree No. 22034, 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 Ministerial Decree of Strategy and Finance to the head of the competent tax office. <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
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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 Ministerial Decree of Strategy and Finance to the head of the competent tax office having jurisdiction over the location of the taxpayers association. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
(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
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Article 207 (Payment of Withheld Taxes on Nonresident)
(1) Article 185 shall apply mutatis mutandis to the payment of the withheld taxes under Article 156 of the Act: Provided, That where a withholding agent has no domicile, place of residence, head 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 by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 24356, Feb. 15, 2013>
(2) When an amount to be withheld is computed pursuant to Article 156 (1) 4 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 by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
(3) "Period prescribed by Presidential Decree" in Article 156 (13) of the Act means any of the following dates: <Added by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
1. Cases under Article 88 (1) 8 (a) and (1) 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 of making a registration of the said division or merger through division;
2. Cases under Article 88 (1) 8 (b), (c) and (1) 8-2 of the Enforcement Decree of the Corporate Tax Act (excluding cases of merger/division): The date of determining a retirement of stocks, a decrease of capital or a conversion into capital.
(4) Any domestic corporation which has issued stocks or equity shares shall deduct a withholding tax from income pursuant to subparagraph 12 (i) of Article 119 of the Act at the time prescribed in paragraph (3). <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
(5) "Has paid income tax on such income in advance, or proves that such income is non-taxable or below taxation threshold, as prescribed by Presidential Decree" in Article 156 (15) of the Act means cases where a nonresident submits an application for confirmation of return and payment (tax exemption or below taxation) of capital gains tax prescribed by Ministerial Decree of Strategy and Finance 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 by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
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Article 207-2 (Application for Non-Taxation, etc. on Domestic Source Income of Nonresident)
(1) Any nonresident (including nonresidents who desire to file an application with modified details, where details of an application for non-taxation or exemption have been changed due to changes in the details of a contract after filing an application for non-taxation or exemption) who intends to file an application for non-taxation or exemption under Article 156-2 of the Act shall submit a written application for non-taxation or exemption stipulated by Ministerial Decree of Strategy and Finance (hereafter referred to as "written application for non-taxation or exemption" in this Article) to an income payer, who, in turn, shall submit it to the head of the competent tax office having jurisdiction over the place for tax payment of the income payer, by not later than the ninth date of the month following that whereto belongs the date of paying the first income. <Amended by Presidential Decree No. 21525, Jun. 8, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
(2) When submitting a written application for non-taxation and 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, That when nonresidents wish to submit a copy of passport and a certification of immigration under Article 88 of the Immigration Control 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 income under subparagraph 12 (f) 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/she omit the submission of such certificate or documents. <Amended by Presidential Decree No. 22580, Dec. 30, 2010>
(3) Any nonresident may cause his/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 by Presidential Decree No. 18705, Feb. 19, 2005>
(4) Where a financial company, etc. takes over, trades, mediates or stands proxy for bonds, etc. of a nonresident pursuant to Article 46 of the Act, paragraph (1) shall apply, deeming that there is relation of proxy or entrustment between such financial company, etc. and a nonresident. <Amended by Presidential Decree No. 22034, 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, deeming the investment trader or investment broker, or the corporation issuing stocks has relations of proxy or delegation with a nonresident. <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
(6) In cases not subject to paragraphs (4) and (5), where any income payer does not hold a domicile, place of residence, head office, principal office or domestic place of business (including a domestic place of business of a foreign corporation), one may file a written application for non-taxation or exemption without submitting to the income payer, and the income recipient may directly submit it to the head of the competent tax office having jurisdiction over the place for tax payment, notwithstanding paragraph (1). <Amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 24356, Feb. 15, 2013>
(7) With respect to the domestic source income under Article 119 of the Act, which falls under any of the following, a written application for non-taxation or exemption may not be filed, notwithstanding paragraph (1): <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 21525, Jun. 8, 2009; Presidential Decree No. 22580, Dec. 30, 2010>
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; <by Presidential Decree No. 21301, Feb. 4, 2009>
3. Other domestic source income stipulated by Ministerial Decree of Strategy and Finance.
[This Article Added by Presidential Decree No. 17456, Dec. 31, 2001]
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Article 207-3 (Special Cases in Tax Withholding concerning 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 pursuant to the Act, the Restriction of Special Taxation Act or tax treaty (hereafter referred to as "applicable tax rates" in this Article) on the payment amount, etc. of the interest, etc., he/she shall withhold the amount calculated by applying the following tax rates. In such cases, if the applicable tax rate under subparagraph 1 is higher than the tax rate under 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 under subparagraph 1 is lower than the tax rate under 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 by Presidential Decree No. 21301, 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 under Article 129 (1) 1 of the Act concerning the amount from which the amount equivalent to the interest, etc. for the holding period under 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 of the calculation of the amount equivalent to interest, etc. for the holding period and of proving the holding period, and Article 207 (1) shall apply mutatis mutandis to payment of the amount of withholding tax. <Amended by Presidential Decree No. 22034, 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 trading: <Amended by Presidential Decree No. 22185, Jun. 8, 2010>
1. Repurchase agreement for a nonresident to sell bonds, etc., on condition that he/she repurchases them at a certain price in a given period, where such transaction is confirmed through an account of the Korea Securities Depository pursuant to Article 294 of the Financial Investment Services and Capital Markets Act;
2. Repurchase agreement for a nonresident to lend bonds, etc., on condition that he/she redeems them in the same quantity of the same kind in a given period, where such transaction is confirmed through a trading ledger (including a ledger in an electronic form) prepared by a bond borrowing and lending intermediary institution.
(4) In cases of trading pursuant to paragraph (3), the amount equivalent to interest income generated from such bonds, etc., during the period from the date bonds, etc. are sold or lent to the date bonds, etc. are repurchased or redeemed shall be deemed to belong to a seller or a lender, and Articles 46, 133-2 and 156-3 of the Act shall apply thereto. <Amended by Presidential Decree No. 22185, Jun. 8, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
(5) and (6) Deleted. <by Presidential Decree No. 22185, Jun. 8, 2010>
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 207-4 (Procedure of Prior Approval for Applying Non-Taxation, Exemption and 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 Ministerial Decree of Strategy and Finance with the Commissioner of the National Tax Service with the following documents attached thereto: Provided, That 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 by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
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. Reports, audit reports, financial statements and attached documents submitted to the tax authority of the contracting state for the last three years (where three years have not elapsed, the period between the date of establishment and the date of application).
(2) When the Commissioner of the National Tax Service receives an application for prior approval under paragraph (1), and where any person to receive income under subparagraph 1, 2, 10 or 11 of Article 119 of the Act (hereafter referred to as "domestic source income" in this Article and Article 207-5) directly or indirectly is an effective holder of the ownership of the income who owns the right to dispose of the income by taking legal or economic risks concerning the relevant domestic source income (hereinafter referred to as "effective owner") and is a resident of the relevant contracting state, the Commissioner of the National Tax Service may issue a prior approval. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(3) When deemed necessary to supplement concerning the details of the 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 made in writing, including all the following matters:
1. Matters to be supplemented;
2. Reasons to request for supplement;
3. Supplement period;
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, That in cases recognized by the Commissioner of the National Tax Service, documents prepared in English only may be submitted. <Added by Presidential Decree No. 21301, Feb. 4, 2009>
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 207-5 (Procedure of Correctional Claim for Applying Non-Taxation, Exemption and Limited Tax Rate under Tax Treaty)
(1) Any person who desires to claim correction under Article 156-4 (2) of the Act shall file a correctional claim for applying special cases in withholding tax prescribed by Ministerial Decree of Strategy and Finance with the head of the competent tax office having jurisdiction over the place for tax payment of the withholding agent with the documents under Article 207-4 (1) 1 through 4. In such cases, documentary evidence shall be submitted along with its translated Korean version, and in any cases recognized by the Commissioner of the National Tax Service, only English version may be submitted. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) Where any person who received domestic source income for which correctional claim is filed under paragraph (1) is an effective owner of the relevant domestic source income, the head of the competent tax office shall make correction.
(3) When it is deemed necessary to supplement concerning the details of correctional claim 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 including all the following matters:
1. Matters to be supplemented;
2. Reasons to request for supplement;
3. Supplement period;
4. Other necessary matters.
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 207-6 Deleted. <by Presidential Decree No. 23588, Feb. 2, 2012>
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Article 207-7 (Payment of Amount of Tax Withheld Related to Supply of Services by Nonresident Entertainers, etc. and Procedures for Refund thereof)
(1) "Nonresident entertainer, etc." in Article 156-5 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.
(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/she shall submit the following documents to the head of the competent tax office: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
1. Report of status of performance of withholding prescribed by Ministerial Decree of Strategy and Finance;
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 by Presidential Decree No. 20720, Feb. 29, 2008>
1. Statement of payment of income from the supply of services of nonresident entertainers, etc. prescribed by Ministerial Decree of Strategy and Finance;
2. Report of status of performance of withholding prescribed by Ministerial Decree of Strategy and Finance.
(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 Ministerial Decree of Strategy and Finance together with the following documents: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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/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 by Presidential Decree No. 24356, 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, That where the head of a tax
office acknowledges, only the documents made out in English may be submitted.
[This Article Added by Presidential Decree No. 20618, Feb. 22, 2008]
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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 the application for limited tax rate on his/her domestic source income prescribed by Ministerial Decree of Strategy and Finance (hereafter referred to as “application for limited tax rate” in this Article) to the withholding agent before he/she receives the domestic source income concerned: Provided, That 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.
(2) “Foreign investment vehicle prescribed by Presidential Decree” under Article 156-6 (2) of the Act means the legal entity established in foreign countries (hereinafter referred to as “foreign investment vehicle”) which engages in investment activities such as soliciting/funding investment, managing investment target assets having property value by acquiring, disposing or in other methods of management, and returning results of such investment activities through distributing them to investors.
(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 Ministerial Decree of Strategy and Finance (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, That 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:
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 as 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 Guarantee of Workers' Retirement Benefits Act, etc.;
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. A foreign investment vehicle prescribed as an effective owner under a tax treaty.
(6) The application for limited tax rate or the report on foreign investment vehicle submitted pursuant to paragraph (1) or (3) may not be re-submitted within three years from the date when it was first submitted; provided,, upon occurrence of any changes thereof, details of such changes shall be submitted no later than the time when the person concerned receives his/her domestic source income for the first time after the date of such changes.
(7) “Causes prescribed by Presidential Decree” under Article 156-6 (3) of the Act means any of the following causes. In such cases, subparagraph 2 or 3 shall be limited to the portion in which such cause occurs:
1. Where the application for limited tax rate or the report on foreign investment vehicle was not submitted;
2. Where a person who has submitted his/her application for limited tax rate or the report on foreign investment vehicle fails to respond to the request for supplementation thereof;
3. Where it is impracticable to find out the effective owner through the previously-submitted application for limited tax rate or the report on foreign investment vehicle (excluding the publicly subscribed foreign collective investment vehicle).
(8) A withholding agent and a foreign investment vehicle shall keep 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 by Presidential Decree No. 23588, Feb. 2, 2012]
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Article 207-9 (Procedure for Correctional Claim for Applying Limited Tax Rate on Non-Resident)
(1) Any person who intends to claim correction pursuant to Article 156-6 (4) of the Act shall file a correctional claim for application of the limited tax rate prescribed by Ministerial Decree of Strategy and Finance with the head of the competent tax office having jurisdiction over the place for tax payment of the withholding agent, with attachment of the following documents that can prove he/she is the effective owner of domestic source income. In such cases, documentary evidence shall be submitted along with its translated Korean version, and in any cases recognized by the Commissioner of the National Tax Service, only English version may be submitted:
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 by Presidential Decree No. 23588, Feb. 2, 2012]
CHAPTER Ⅵ SUPPLEMENTARY PROVISIONS
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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) and (4) Deleted. <by Presidential Decree No. 15969, 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, That business operators under Article 147-3 hereof and Article 74 (2) 7 of the Enforcement Decree of the Value-Added Tax Act shall be excluded herefrom: <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 22950, Jun. 3, 2011; Presidential Decree No. 24356, Feb. 15, 2013>
1. A business operator commencing a new business in the relevant taxable period;
2. A business operator whose aggregate of the revenue amount in the preceding taxable period (including the revenue amount increased by determination or correction) falls short of the following amount:
(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, lodging and restaurant business, electricity, gas, steam and water supply business, sewage, waste disposal, raw material recycling and environment rehabilitation business, construction business (excluding non-residential building construction business, but including residential building development and supply business), transportation business, publication, image, broadcast and telecommunications and information service 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-related service, leasing service (excluding real estate leasing service), specialized, scientific and technical service business, business facility management and business supporting service, educational service, health and social welfare service, 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. <by Presidential Decree No. 22034, 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 two or more places of business, it shall be governed by the amount of revenue calculated by the following formula: <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 19890, Feb. 28, 2007; >
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. <by Presidential Decree No. 18173, Dec. 30, 2003>
(9) "Simple book prescribed by Presidential Decree" in Article 160 (2) of the Act means books stating matters referred to in the following subparagraphs, determined by the Commissioner of the National Tax Service: <Added by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 22034, 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 fixed assets;
4. Other matters of reference.
(10) Deleted. <by Presidential Decree No. 22580, Dec. 30, 2010>
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Article 208-2 (Receipt and Retainment of Documentary Evidence of Expenditure, etc.)
(1) "Cases prescribed by Presidential Decree" in the proviso to the main sentence of Article 160-2 (2) of the Act means any of the following cases: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
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 a business operator subject to Article 25 of the Value-Added Tax Act), and who is not a credit card merchant under the Specialized Credit Financial 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 engaged in crop production business, livestock industry, composite agriculture of crop production and stock farming, forestry or fishery from 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, and 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 cases where a tax withholding is made);
9. Other cases determined by Ministerial Decree of Strategy and Finance.
(2) "Means prescribed by Presidential Decree" in Article 160-2 (2) 3 of the Act means those falling under the subparagraphs of Article 84 (5). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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 by Presidential Decree No. 22034, Feb. 18, 2010>
(4) Where any of the following evidential data are kept, it shall be deemed to accept and retain credit card sale slips and cash receipts: <Added by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Detailed statement of monthly use of credit card issued by a business operator falling under any of the following items (hereafter referred to as "credit card business operator, etc." in this Article) and detailed statement of monthly use of 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 Financial Business Act;
(b) An electronic financial business operator under the Electronic Financial Transaction 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 kept in the enterprise resource planning system.
(5) The data evidencing expenditure falling under any of the following may not be kept notwithstanding Article 160-2 (1) of the Act: <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
1. Cash receipt;
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 211 (8).
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 208-3 (Obligation to Prepare and Retain Detailed Statement of Issuing Receipts of Donations)
(1) "Detailed statement of issuance by each donor prescribed by Presidential Decree" in Article 160-3 (1) of the Act means that the details of the following subparagraphs are wholly included therein: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Name, resident registration number and domicile of the relevant donator;
2. Amount of donation;
3. Date when the donation was made;
4. Date when the receipt of donation was issued;
5. Other matters prescribed by Ministerial Decree of Strategy and Finance.
(2) The detailed statement of issuance of receipts for donations under Article 160-3 (3) of the Act shall be pursuant to the form prescribed by Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Wholly Amended by Presidential Decree No. 20618, Feb. 22, 2008]
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Article 208-4 (Obligation of Financial Companies, etc. to Prepare and Retain Details of Issuing Certificates )
"Detailed statement of issuance for each individual prescribed by Presidential Decree" in Article 160-4 (1) of the Act means those including all the following details: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Name, resident registration number and domicile of the relevant individual;
2. Any of the following amount:
(a) Payment amount of deposit of objects of income deduction or payment amount of insurance premium;
(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 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 Ministerial Decree of Strategy and Finance.
[This Article Added by Presidential Decree No. 18705, Feb. 19, 2005]
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Article 208-5 (Reporting, etc. 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 by Presidential Decree No. 22034, 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 Guarantee of Secrecy (hereafter referred to as "financial institution" in this Article);
2. It shall not be used for any purpose other than business;
3. and 4. Deleted. <by Presidential Decree No. 20618, 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 two or more places of business.
(3) Each place of business may report two or more business accounts. <Amended by Presidential Decree No. 22580, 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 cases where the payments are settled by any of the following means through intermediation of, entrustment, etc. to, a financial institution: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, 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 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 business partner's status" in Article 160-5 (1) 2 of the Act means transactions made with persons falling under any of the following subparagraphs: <Added by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 21765, Oct. 1, 2009; Presidential Decree No. 22034, 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 Use and Protection of Credit Information Act due to default on an obligation related to financial transaction;
2. Illegal immigrants;
3. Workers employed on a daily basis engaged in the construction work 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) and (7) Deleted. <by Presidential Decree No. 21301, 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 by Presidential Decree No. 20618, 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 Ministerial Decree of Strategy and Finance shall be filed with the head of the competent tax office having jurisdiction over the relevant place of business within the pertinent period. <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
(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 by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22580, Dec. 30, 2010>
[This Article Added by Presidential Decree No. 19890, Feb. 28, 2007]
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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 Ministerial Decree of Strategy and Finance.
[This Article Wholly Amended by Presidential Decree No. 22034, Feb. 18, 2010]
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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 is able to prepare and issue receipts pursuant to Article 211 (2) 2 and 3 of this Decree or Article 79-2 of the Enforcement Decree of the Value-Added Tax Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(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.
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Article 210-2 (Admission to Membership of Credit Card Member Stores, etc.)
(1) "Business operator falling under the requirements prescribed by Presidential Decree" in Article 162-2 (1) of the Act means a business operator running a type of business serving consumers (hereinafter referred to as "type of business serving consumers") pursuant to 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 by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008>
1. Business operators whose total amount of income (including the amount of income that increased because of determination or revision) of the immediately previous taxable period exceeds 24 million won;
2. Business operators under Article 147-3;
3. Business operators under Article 74 (2) 7 of the Enforcement Decree of the Value-Added Tax Act.
(2) When a person to whom a credit card member store has refused transactions with credit card, or to whom a credit card member store has issued a credit card sales slip with a false description, intends to report the details of such transaction in accordance with Article 162-2 (3) of the Act, the person shall file a report stating the following matters along with accompanying documents or materials that can prove the related facts with the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office within one month after the transactions have been refused or the sales slip has been issued with a false description: <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
1. Name of a reporter;
2. Trade name of the credit card member store;
3. Date, details of the transaction, and amount related to such refusal of transactions with credit card or issuance of a credit card sales slip with a false description.
(3) The head of the competent tax office having jurisdiction over the place for tax payment shall, whenever he/she notifies the relevant credit card member store of the amount reported for the pertinent taxable period in accordance with the latter part of Article 162-2 (4) of the Act, notify it within two months after the end of the taxable period. <Added by Presidential Decree No. 19890, Feb. 28, 2007>
(4) The Commissioner of the National Tax Service shall determine, within the scope necessary for management of tax payment, detailed matters necessary for those obligated to become a member of credit card member stores, procedures for designation of those obligated to become such member, procedures for a written report, etc. by a consumer on transactions refused by credit card and procedures for notifying the relevant reporter of the result of confirmation on such case reported. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 15969, Dec. 31, 1998]
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Article 210-3 (Registration as Cash Receipt Merchant, etc.)
(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 conducts business serving consumers: Provided, That if a business operator, prescribed by Ministerial Decree of Strategy and Finance, has difficulty in registering as a cash receipt merchant, he/she shall be excluded: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24574, Jun. 11, 2013>
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 147-3;
3. A business operator under Article 74 (2) 7 of the Enforcement Decree of the Value-Added Tax Act;
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 two or more 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 one won or more for each transaction. <Amended by Presidential Decree No. 20618, Feb. 22, 2008>
(7) When a person who has received a cash receipt with a false description or whose request for issuance of a cash receipt is refused by a cash receipt merchant intends to report the said transaction pursuant to Article 162-3 (5) of the Act, he/she shall submit a report specifying matters under each of the following with attachment of the documents or materials that can prove relevant facts, within five years from the date of receipt of such false receipt or refusal of issuance, to the Commissioner of the National Tax Service/the commissioner of the competent regional tax office or the head of the competent tax office: <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
1. Name of the reporting person;
2. Business name of the cash receipt merchant;
3. Date, details and amount of the transaction in which a cash receipt was issued with a false description or a request for issuance of a cash receipt was refused.
(8) The head of the competent tax office having jurisdiction over the place for tax payment shall notify to the responsible cash receipt merchant the reported amount of the tax period concerned within the reporting deadline classified in accordance with the following subparagraphs, pursuant to Article 162-3 (6) of the Act: <Added by Presidential Decree No. 23588, Feb. 2, 2012>
1. Where a report is received during the tax period concerned: Within two months after the tax period ends;
2. Where a report is received after the tax period concerned lapsed: Within two months from the date of such reporting.
(9) "Business operator who conducts business prescribed by Presidential Decree" in Article 162-3 (4) of the Act means a business operator who conducts business pursuant to Appendix 3-3. <Added by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
(10) Where a cash receipt is issued pursuant to the main sentence of Article 162-3 (4) or Article 162-3 (7) of the Act, an unregistered cash receipt may be issued within five days from the day when the issuer receives cash after he/she provided goods or services. <Amended by Presidential Decree No. 23588, Feb. 2, 2012>
(11) The Commissioner of the National Tax Service shall determine, within the scope necessary for management of tax payment, detailed matters necessary for registration of a store mandated to register as a cash receipt merchant, its withdrawal, procedures for reporting and notification concerning refusal of issuance of a cash receipt, a method to issue an unregistered cash receipt where a consumer does not wish to have it issued, etc. <Amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23588, Feb. 2, 2012>
[This Article Added by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 211 (Preparation and Issuance of Account Statement)
(1) Where a business operator provides goods or services, he/she shall prepare two account statements stating the matters falling under the following, and issue any of them to the person receiving the goods or services: <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 24356, Feb. 15, 2013>
1. Registration number, name or title of the business operator who provides;
2. Registration number, name or title of the person who receives;
3. Value of provision;
4. Preparation date;
5. Other reference matters.
(2) Where an operator of a business falling under any of the following provides goods or services, he/she may issue a receipt, notwithstanding paragraph (1): Provided, That if the business operator receiving goods or services shows his/her certificate of business registration and requests an issuance of account statement under paragraph (1), such account statement shall be issued: <Amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
1. Business subject to Article 79-2 (1) and (2) of the Enforcement Decree of the Value-Added Tax Act;
2. Business stipulated in Article 79-2 (1) and (2) of the Enforcement Decree of the Value-Added Tax Act, and which is exempted from value-added tax;
3. Business determined by Ministerial Decree of Strategy and Finance, 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 25 of the Value-Added Tax Act provides goods or services on which value-added tax is levied, he/she shall not issue an account statement notwithstanding paragraphs (1) and the proviso to paragraph (2), but issue a receipt. <Added by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 24356, Feb. 15, 2013>
(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 by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
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 from among those under Article 12 (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;
4. Other goods or services for which an issuance of a tax account statement or receipt is exempted under Articles 57 and 79-2 of the Enforcement Decree of the Value-Added Tax 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 by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 24356, 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 under paragraph (1). <Added by Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 24356, Feb. 15, 2013>
(7) Where a business operator issues an invoice stating each of the following (hereinafter referred to as “electronic invoice”) pursuant to the methods under Article 53-2 (4) of the Enforcement Decree of the Value-Added Tax Act and retains it, it shall be deemed that he/she has issued an invoice under paragraph (1): <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(8) Where an electronic invoice is issued pursuant to paragraph (7), the issuer may transmit to the Commissioner of the National Tax Service a detailed statement of issuance of electronic invoice specifying matters under each subparagraph of paragraph (1) by no later than the day following the date of issuance of the electronic invoice. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(9) With respect to the registration concerning the business operator who issues/transmits electronic invoices pursuant to paragraphs (7) and (8) and establishes/operates each equipment and system, unless otherwise provided for in this Decree, Article 53-2 of the Enforcement Decree of the Value-Added Tax Act shall apply mutatis mutandis thereto. In such casesm “electronic tax invoice” shall be deemed “electronic invoice.” <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(10) Other than those stipulated in paragraphs (7) and (8), necessary matters concerning issuance procedures and storage requirements of electronic invoices, etc. shall be determined by Ministerial Decree of Strategy and Finance. <Added by Presidential Decree No. 24356, Feb. 15, 2013>
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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 Ministerial Decree of Strategy and Finance by the deadline specified in Article 78 of the Act. <Amended by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 15565, Dec. 31, 1997; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 22580, Dec. 30, 2010>
(2) Articles 16 and 20 of the Value-Added Tax Act and Articles 54 through 59, 66, 66-2, and 67 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), except for cases otherwise provided for in this Decree. <Amended by Presidential Decree No. 18705, Feb. 19, 2005>
(3) "Cases where an invoice, etc. is issued, as prescribed by Presidential Decree" in the proviso to Article 163 (2) of the Act means cases where he/she issues an invoice pursuant to paragraph (2) in the name of a consignor or his/her name. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(4) Where an invoice is delivered by deeming that a consignee or an agent has provided the goods under the main sentence of Article 163 (2) of the Act, such fact shall be written in addition on the invoice. <Added by Presidential Decree No. 15969, Dec. 31, 1998>
(5) Where a person has issued or received issuance of electronic invoice pursuant to Article 211 (7) and transmitted a detailed statement of issuance of electronic invoice pursuant to Article 211 (8) to the Commissioner of the National Tax Service by no later than 11th day of the month following the month of termination of the taxation period to which the period of supply of the goods or services concerned belongs, he/she may choose not to submit an aggregate table of invoices by seller and an aggregate table of invoices by purchaser notwithstanding paragraph (1). <Added by Presidential Decree No. 24356, Feb. 15, 2013>
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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. <by Presidential Decree No. 19327, Feb. 9, 2006>
[This Article Added by Presidential Decree No. 17456, Dec. 31, 2001]
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Article 212-3 (Submission of Aggregate Table of Tax Invoices by Purchaser)
As to the submission of an aggregate table of tax invoices by purchaser, etc. under Article 163-2 of the Act, Articles 66 and 66-2 of the Enforcement Decree of the Value-Added Tax Act shall apply mutatis mutandis.
[This Article Added by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 213 (Submission of Statements of Payment)
(1) Statements of payment under Article 164 (1) of the Act 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, using a statement of payment determined by Ministerial Decree of Strategy and Finance by income earner receiving such payment. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
(2) Deleted. <by Presidential Decree No. 22034, Feb. 18, 2010>
(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 the withholding, the commissioner of the competent regional tax office, or the Commissioner of the National Tax Service: <Added by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, 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 Door-to-Door Sales, etc. Act;
3. Where the amount of interest income (excluding the interest income from the bond, etc. pursuant to Article 46 (1) of the Act) annually paid by financial company, etc. to a resident for each account is not more than one million won.
(4) Deleted. <by Presidential Decree No. 24356, Feb. 15, 2013>
(5) "Worker employed on a daily basis prescribed by Presidential Decree" in the proviso to the part other than the subparagraphs of Article 164 (1) of the Act means a worker employed on a daily basis pursuant to Article 20. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(6) "Gains from long-term savings insurance prescribed by Presidential Decree" in Article 164 (1) 8 of the Act means gains on insurance (excluding cases 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 by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 213-2 (Submission through Device Issuing Cash Receipts, etc.)
(1) "Income prescribed by Presidential Decree" in the latter part of Article 164 (3) of the Act means income falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
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. In such cases, a statement of payment under Article 164 of the Act shall be deemed to have been submitted: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Year to which pay or salary is attributed;
2. Resident registration number of the worker on a daily base or the resident;
3. Amount of pay or salary;
4. Income tax (referring to determined amount).
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 214 (Exemption, etc. from Submission of Statements of Payment)
(1) Article 164 (1) of the Act shall not apply to any of the following income: <Amended by Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Other income non-taxable under subparagraph 5 of Article 12 of the Act;
2. Other income falling under Article 21 (1) 2 of the Act whose amount of prize does not exceed 100 thousand won per item;
2-2. Income under subparagraph 3 (a) through (g), (k), (l), (n), (p), (r) and (t) of Article 12 of the Act;
2-3. Income under subparagraphs 2 through 4 and 8 of Article 12;
3. Other income determined by Ministerial Decree of Strategy and Finance.
(2) Deleted. <by Presidential Decree No. 19327, 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) is not more than ten persons: Provided, That any person falling under any of the following subparagraphs shall be excluded: <Amended by Presidential Decree No. 18173, Dec. 30, 2003; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Finance and insurance business operators on the Korea Standard Industry Code list;
2. The State, local governments or local governments associations;
3. Corporations;
4. Persons subject to double-entry bookkeeping under Article 160 (3) of the Act.
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Article 215 (Special Cases in Relation to Submission of Statements of Payment)
(1) A withholding agent shall, where he/she intends to submit details on withholding tax and other related documents in lieu of a statement of payment by pursuant to Article 164 (5) of the Act, 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 by Presidential Decree No. 22034, Feb. 18, 2010>
(2) With respect to a resident whose gross wage and salary income is not more than the aggregate amount of deduction of wage and salary income, the basic deduction for the principal and the standard deduction, a withholding agent may submit a statement of payment of wage and salary income determined by the Commissioner of the National Tax Service in lieu of a statement of payment under Article 164 of the Act: Provided, That it shall be only applicable to a resident having no secondary place of work, and it shall be 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 in year. <Amended by Presidential Decree No. 15138, Aug. 22, 1996; Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(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 Ministerial Decree of Strategy and Finance may be submitted in lieu of a statement of payment under Article 164 (1) of the Act. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
(4) Deleted. <by Presidential Decree No. 17032, Dec. 29, 2000>
(5) With respect to a business operator whose amount of revenue of business income for which a year-end tax settlement is performed under Article 144-2 of the Act (referring to the amount of income converted in year) is not more than the aggregate of the basic reduction for the principal and the standard reduction, "statement of payment of business income" determined 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 by Presidential Decree No. 15191, Dec. 31, 1996; Presidential Decree No. 20618, Feb. 22, 2008>
(6) "Other income prescribed by Presidential Decree" in Article 164 (9) of the Act means other income under Article 21 (1) 15 (a) and 19 (a) and (b) of the Act. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(7) The Commissioner of the National Tax Service shall, upon receiving a statement of payment of other income under paragraph (6), provide residents with the details of the relevant other income through the Home Tax Service under 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, the Commissioner of the National Tax Service shall, whenever there is any change in the details due to an error, etc., correct the details and notify the relevant taxpayer thereof. <Added by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
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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 extend its submission deadline pursuant to each of the following subparagraphs: <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008>
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 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 Ministerial Decree of Strategy and Finance), 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 Ministerial Decree of Strategy and Finance) may be extended by not later than the end of the month following that whereto belongs the date on which the 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 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 of the Act. <Amended by Presidential Decree No. 20618, Feb. 22, 2008>
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Article 216-2 (Special Cases concerning Duty to Submit Statements of Payment of Nonresidents' Domestic Source Income, etc.)
(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 Ministerial Decree of Strategy and Finance (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, That this shall not apply to income falling under any of the following: <Amended by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 19327, Feb. 9, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Domestic source income on which income tax is not levied or exempted under the Act or the Restriction of Special Taxation Act (excluding cases where an application for non-taxation or tax exemption is not filed under the Act or the Restriction of Special Taxation Act);
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 subparagraphs 5 and 6 of Article 119 of the Act (excluding the income withheld at source under Article 156 of the Act);
5. Income falling under subparagraph 12 (f) 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 Ministerial Decree of Strategy and Finance as other income deemed that there is no effect in presentation of a statement of payment.
(2) Deleted. <by Presidential Decree No. 17825, Dec. 30, 2002>
(3) Where income tax is withheld at source pursuant to Article 46 or 156 (6) of the Act, the relevant withholding agent shall submit a statement of payment for the amount paid. <Added by Presidential Decree No. 17456, Dec. 31, 2001; Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 23588, Feb. 2, 2012>
(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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
(5) Deleted. <by Presidential Decree No. 19327, Feb. 9, 2006>
(6) Articles 215 and 216 shall apply mutatis mutandis to the presentation of a statement of payment for a domestic source income, etc. of a nonresident. <Amended by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 22034, Feb. 18, 2010>
[This Article Added by Presidential Decree No. 17032, Dec. 29, 2000]
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Article 216-3 (Submission of Documentary Evidence of Income Deduction and Administrative Guidance therefor)
(1) "Income deduction prescribed by Presidential Decree" in Article 165 (1) of the Act means income deduction on the payment amount falling under any of the following: <Amended by Presidential Decree No. 19890, Feb. 28, 2007; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree No. 23356, Dec. 8, 2011; Presidential Decree No. 24356, Feb. 15, 2013>
1. Pension insurance premium under Article 51-3 (1) 2 of the Act;
1-2. Interest expenses for mortgage-backed retirement pension under Article 51-4 of the Act;
2. Insurance premiums under Article 52 (1) 2 of the Act;
3. Medical expenses under Article 52 (2) of the Act and Article 122-3 of the Restriction of Special Taxation Act: Provided, That medical expenses under Article 110 (1) 3 through 5 shall be excluded;
4. Educational expenses under Article 52 (3) of the Act, which have been paid to an agency falling under any of the following:
(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 Act on the Development of Occupational Abilities of Workers;
4-2. Educational expenses under Article 122-3 of the Restriction of Special Taxation Act, which have been paid to an agency in subparagraph 4 (a) through (c);
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;
6. The amount deposited in any of the following savings:
(a) Deleted; <by Presidential Decree No. 24356, Feb. 15, 2013>
(b) Deleted; <by Presidential Decree No. 24356, 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;
7. through 7-3. Deleted; <by Presidential Decree No. 22034, Feb. 18, 2010>
8. Amount of use of credit card, etc. under Article 126-2 of the Restriction of Special Taxation Act.
(2) Any person who issues documentary evidence of income deduction under Article 165 (1) of the Act shall submit documentary evidence of income deduction to an 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.
(3) A data concentration institution under paragraph (2) shall submit documentary evidence of income deduction to the Commissioner of the National Tax Service, as prescribed by the Commissioner of the National Tax Service.
(4) "Cases prescribed by Presidential Decree, such as cases where a person issued supporting documents for income deduction refuses to submit the supporting documents, etc." in the proviso to Article 165 (1) of the Act means cases where any person for whom documentary evidence of income deduction is issued refuses to submit documents concerning the details of his/her medical expenses until a data concentration institution submits documentary evidence for income deduction to the Commissioner of the National Tax Service under paragraph (3). <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
(5) The Commissioner of the National Tax Service may, within the necessary boundary concerning income deduction, prescribe necessary matters concerning guidance, such as submission guideline with regard to any person who issues documentary evidence of income deduction.
(6) "Cases where consent has been obtained by methods prescribed by Presidential Decree, such as in writing" in Article 165 (6) of the Act means cases where a person subject to basic deduction under Article 50 of the Act provides information with consent by a method falling under any of the following: <Added by Presidential Decree No. 21301, Feb. 4, 2009; Presidential Decree No. 24076, Aug. 31, 2012>
1. Consent in writing;
2. Consent by electronic document under subparagraph 1 of Article 2 of the Act on Electronic Documents and Transactions bearing an authorized digital signature under subparagraph 3 of Article 2 of the Digital Signature Act;
3. Consent pursuant to 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.
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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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 Ministerial Decree of Strategy and Finance. 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 by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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Article 218 (Utilization and Furnishing of Computerized Information Data on Resident Registration, etc.)
(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, etc. of Family Relationship to furnish, by utilizing the computerized media, the computerized information data on resident registration or family relationship registration. <Amended by Presidential Decree No. 18705, Feb. 19, 2005; Presidential Decree No. 22580, 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 by Presidential Decree No. 22580, Dec. 30, 2010>
[This Article Wholly Amended by Presidential Decree No. 14860, Jun. 30, 1995]
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Article 219 (Submission of Certified Copy of Foreigner's Registration Card)
Where a nonresident files a final return on the tax base, he/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.
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Article 220 (Assignment of Inherent Code Number)
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 by Presidential Decree No. 20618, Feb. 22, 2008>
[This Article Wholly Amended by Presidential Decree No. 19327, Feb. 9, 2006]
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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 2/100 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.
(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 31 of the relevant taxable period: Provided, That he/she may apply for the portion of December by not later than the end of February of the following year. <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
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Article 222 (Query and Inspection)
If a public official engaged in taxation affairs performs an investigation on income tax, and where he/she examines the books, documents, and other articles, he/she shall produce an inspector's certificate determined by Ministerial Decree of Strategy and Finance to parties concerned. <Amended by Presidential Decree No. 15747, Apr. 1, 1998; Presidential Decree No. 20720, Feb. 29, 2008>
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Article 223 (Inspection of Pension Income Documents, etc.)
"Data prescribed by Presidential Decree" in subparagraph 7 of Article 172 of the Act means data falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22034, Feb. 18, 2010>
1. Data concerning refund money paid based on the amount of paid-in deduction in workplace mutual-aid association under Article 26;
2. Data concerning pension income paid based on pension contribution or employer charges deposited before December 31, 2001, or based on the provision of work before December 31, 2001 under the Public Officials Pension Act, the Veterans' Pension Act, the Pension for Private School Teachers and Staff Act or the Special Post Offices Act.
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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Article 224 (Scope of Service Providers and Places of Business Providers, etc.)
(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 by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Chauffeur service;
2. Parcel delivery services;
3. Nursing services;
4. Caddie services;
5. Dispatch services;
6. Services similar to those under subparagraphs 1 through 6 directly provided by any person who is engaged in work concerning personal services under the Korea Standard Industry Code or the Korea Standard Occupational Classification and prescribed by Ministerial Decree of Strategy and Finance.
(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: Provided, That cases where a withholding agent withholds tax under Article 127 (7) of the Act and Article 184 (3) of this Decree shall be excluded: <Amended by Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 22034, Feb. 18, 2010>
1. Golf course business operator;
2. Hospital business operator;
3. Employment agency business operator;
4. Any person who provides a place of business related to the provision of services to a service provider under each subparagraph of paragraph (1) or any person who intermediates or relays such services.
(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 Ministerial Decree of Strategy and Finance, personal information of the service provider, period of service provision, price for providing the service, etc. and submit it: Provided, That this shall not apply when it is impossible to identify the price of the services provided. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 19327, Feb. 9, 2006]
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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 Ministerial Decree of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
[This Article Added by Presidential Decree No. 19890, Feb. 28, 2007]
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Article 226 (Sample Survey, etc.)
(1) "Persons prescribed by Presidential Decree" in Article 175 (1) of the Act means the residents whose income deduction of donations or amount of inclusion in necessary expenses is one or more million won or the non-residents under Article 121 (2) and (5) of the Act. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(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 5/1,000 of donation deducted persons or persons whose necessary expenses have been included, who are liable for sample survey. <Amended by Presidential Decree No. 24356, Feb. 15, 2013>
(3) The Commissioner of the National Tax Service shall formulate a framework plan for sample survey each year and submit it to the Minister of Strategy and Finance by the end of August of each year. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 24356, Feb. 15, 2013>
(4) The sample survey shall be performed by means of an on-site survey, written survey, etc., and matters necessary for the procedures may be prescribed by Presidential Decree.
[This Article Added by Presidential Decree No. 20618, Feb. 22, 2008]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 1996: Provided, That 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, That 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 assets 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 Ordinance of the Prime Minister 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 Article 9 (1) 2, with respect to the sideline income of a farm-house accruing from January 1, 1995 to December 31, 1995, "12 million won per annum" in the same provisions shall be construed as "8 million won per annum", and shall be applied as such.
Article 9 (General Transitional Measures)
The income tax to have been levied or leviable under the previous provisions before this Decree enters into force shall 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 provisions 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. 14682, Jun. 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 to the portion of incomes received in the month whereto belongs the date of promulgation.
ADDENDA <Presidential Decree No. 14721, Jul. 6, 1995>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 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 and 3 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, That 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, That with respect to the assets acquired before December 31, 1995, they may governed by the previous provisions. <Amended by Presidential Decree No. 15191, 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, That 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, extends 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, That 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, That 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, That 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 Gain on 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 4 (b) 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, That 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, That 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 1 (c) 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)
The 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.
Articles 2 and 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, That 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 taxable period first commenced after this Decree enters into force: Provided, That 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 to the portion first transferred 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 reported 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, etc. 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, That 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, That the amended provisions of Articles 27 (limited to the part concerning division), 27-2 (limited to the part concerning division), 38 (1) 12 (e), 105 (2), 110-2, and 112 (4) shall enter into force on the date of promulgation, while those of Articles 147-2 and 147-3 shall enter into force on January 1, 2000, and those of Article 212 shall enter into force on July 1, 1999.
Article 2 (General Applicability)
This Decree shall apply to the portion of incomes first accrued after this Decree enters into force: Provided, That the amended provisions of Articles 27 (limited to the part concerning division), 27-2 (limited to the part concerning division), 38 (1) 12 (e), 105 (2), 110-2 and 112 (4) shall apply from the portion of the taxable period whereto belongs the date this Decree enters into force, while the amended provisions of Articles 48 and 51 (3) and (5) shall apply from the portion of delivery of commodities, etc. or supply of services for the first time after this Decree enters into force, and those of Article 98 shall apply to the portion first traded after this Decree enters into force, and those of Article 144 (1) shall apply to the portions first determined or revised after this Decree enters into force, and those of Article 148 (4) and (5) shall apply to the portion of first applying for an occasional imposition after this Decree enters into force.
Article 3 (Applicability concerning Assessment of Stocks, etc. Received due to Capital Decrease)
The amended provisions of Article 27 (3) shall apply to the portion of receiving deemed dividends due to the retirement of stocks, etc. for the first time after this Decree enters into force.
Article 4 (Applicability concerning Scope of Wage and Salary Income)
The amended provisions of Articles 38 (1) 7 and 98 (2) 2 (proviso) shall apply to the portion of first receiving the loan of funds after this Decree enters into force.
Article 5 (Applicability concerning Inclusion of Depreciation Cost in Necessary Expenses)
(1) The amended provisions of Articles 62 through 73-2 shall apply to the portion of first depreciation after this Decree enters into force.
(2) The amended provisions concerning financial lease in Article 62 (3) shall apply to the portion of first receiving a loan after this Decree enters into force.
Article 6 (Applicability concerning Acquisition Value, etc. of Asset)
The amended provisions of Article 89 shall apply to the portion of first acquisition after this Decree enters into force.
Article 7 (Applicability concerning Submission of Specification of Ac cepting Receipts)
The amended provisions of Article 132 (3) shall apply to the portion of first accepting the receipts after this Decree enters into force.
Article 8 (Applicability concerning Preparation and Delivery of Invoices, etc.)
The amended provisions of Article 211 shall apply to the portion of goods or services first provided or received after this Decree enters into force.
Article 9 (Applicability concerning Preparation and Delivery of Invoices by Trustee of Agricultural, Livestock, Fishery and Forestry Products)
The amended provisions of Article 212 (3) and (4) shall apply to the portion of goods first provided after July 1, 1999.
Article 10 (Applicability concerning Capital Gains)
(1) The amended provisions concerning capital gains in this Decree shall apply to the portion of first transfer after this Decree enters into force.
(2) In cases 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 on which 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 of Act No. 5580, the Amended Act among Income Tax Act, 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 the Ministerial Decree 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 concerning Concept of Arm's Length Price)
The amended provisions of Article 183-2 shall apply to the portion of first 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 Article 98 (2) 2 (proviso), 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 of the amended 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 of 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 Example in Including Depreciation Cost in Necessary Expenses)
(1) A business operator retaining a depreciable asset as of 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) In cases 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 of 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/she shall apply not later than the date on which 3 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 of the date this Decree enters into force shall be deemed the acquisition price as of the date of commencing the relevant taxable period.
(6) The accumulated depreciation amount by individual property for the depreciable assets retained as of the date this Decree enters into force shall be governed by one of the following subparagraphs:
1. Assets acquired before December 31, 1994: The depreciation reserve by individual property which has been appropriated as of 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 of the date this Decree enters into force: Provided, That 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) In cases where there exists the denied depreciation amount before the date this Decree enters into force, from among depreciation costs of depreciable assets retained as of 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 subparagraphs:
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 of subparagraph 3 of the same Article: by each property) before the amended 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 Jan. 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 of the date this Decree enters into force: Provided, That 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 amended 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 of the amended Regulation of Tax Reduction and Exemption Act (Act No. 4806), as of 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 Service)
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 amended 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 under Article 2 of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, he/she shall be deemed a business operator falling under Article 208 (5) not later than December 31, 2001, where the ratio occupied in the gross turnover by the amounts, for which an intermediary wholesaler has issued invoices by each taxable period ending in the period from January 1, 2002 to December 31, 2013, is not less than the ratios falling under any of the followings, he/she shall be deemed a business operator falling under Article 208 (5) during the relevant taxable period, and where the ratio occupied in the gross turnover by the amounts, for which an intermediary wholesaler has issued invoices by each taxable period ending in the period from January 1, 2002 to December 31, 2013, falls short of the ratios falling under any of the following subparagraphs, the penalty tax for unfaithful report on invoices shall be imposed by deeming the difference between the amount calculated by applying the ratios falling under any of the following subparagraphs to the gross turnover by each taxable period and the amount for which invoices are issued, as provision value: <Amended by Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24356, Feb. 15, 2013>
1. Intermediary wholesalers of central wholesale markets located in the Seoul Special Metropolitan City under the Act on Distribution and Price Stabilization of Agricultural and Fishery Products:
Taxable PeriodRatio
Jan. 1, 2002 ~ Dec. 31, 200210/100
Jan. 1, 2003 ~ Dec. 31, 200320/100
Jan. 1, 2004 ~ Dec. 31, 200440/100
Jan. 1, 2005 ~ Dec. 31, 200540/100
Jan. 1, 2006 ~ Dec. 31, 200640/100
Jan. 1, 2007 ~ Dec. 31, 200745/100
Jan. 1, 2008 ~ Dec. 31, 200850/100
Jan. 1, 2009 ~ Dec. 31, 200955/100
Jan. 1, 2010 ~ Dec. 31, 201060/100
Jan. 1, 2011 ~ Dec. 31, 201165/100
Jan. 1, 2012 ~ Dec. 31, 201270/100
Jan. 1, 2013 ~ Dec. 31, 201375/100
2. Intermediary wholesalers other than those under subparagraph 1:
Taxable PeriodRatio
Jan. 1, 2002 ~ Dec. 31, 200210/100
Jan. 1, 2003 ~ Dec. 31, 200320/100
Jan. 1, 2004 ~ Dec. 31, 200440/100
Jan. 1, 2005 ~ Dec. 31, 200520/100
Jan. 1, 2006 ~ Dec. 31, 200620/100
Jan. 1, 2007 ~ Dec. 31, 200725/100
Jan. 1, 2008 ~ Dec. 31, 200830/100
Jan. 1, 2009 ~ Dec. 31, 200935/100
Jan. 1, 2010 ~ Dec. 31, 201040/100
Jan. 1, 2011 ~ Dec. 31, 201145/100
Jan. 1, 2012 ~ Dec. 31, 201250/100
Jan. 1, 2013 ~ Dec. 31, 201355/100
[This Article Wholly Amended by Presidential Decree No. 19327, Feb. 9, 2006]
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, That 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, That 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 pertaining to capital gains in this Decree shall apply from 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, That 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) 2 (b) and 164 (5) shall apply from the portion of first transfer after January 1, 2001: Provided, That 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) 2 (b).
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.
Articles 2 through 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, That 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 sub-
scribed before this Decree enters into force, terminates his/her installment savings subscribed 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/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, That 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 by Presidential Decree No. 17456, 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, etc. 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.
(2) The amended provisions of Article 63-3 shall apply from the portion first acquired in 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, That 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, etc. 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, etc. 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 Scope 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 by Presidential Decree No. 17456, 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.
ClassificationIncome Amount
Each taxable period ending from Jan. 1, 2002 to Dec. 31, 2003Each 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.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 17296, Jul. 7, 2001>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 8, 2001.
Articles 2 and 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 refund 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, That 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 income 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, etc.)
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 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, etc. 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, Delivery, etc. 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, etc.)
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 the owning of 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, That 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 provisions 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, etc. 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, That 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) 2 (f) 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, etc.)
The amended provisions of Articles 62 (2) 2 (h), 63 (1) 2 and 64 (1) 8 shall apply from the portion of depreciation incurred during the taxable 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, etc. 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, etc.)
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, That 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, That the amended provisions of Articles 38 (1) 8 (a) (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 etc.)
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, etc. 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, That 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 Expanses Excluded from Wage and Salary Income)
(1) The amended provisions of Article 38 (1) 8 (a) (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, etc.)
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, etc.)
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 Deduction of Medical Expenses)
(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, etc.)
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, That 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) 8 (a) 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, 200415
Jan. 1, 2005 Dec. 31, 200510
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, etc.)
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, That 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 apply starting from the portion of income generated in the taxable period in which the date this Decree enters into force falls.
Article 3 (Applicability concerning Scope etc. 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 etc. 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, That 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, etc. 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, etc. 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, That 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, etc.)
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 Appendixs 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) 2 (c) 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.
(4) Omitted.
ADDENDA <Presidential Decree No. 19010, Aug. 19, 2005>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 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, That 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 to the portion of transfer first made 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, That 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 of this Decree concerning capital gains tax shall apply to the portion first transferred 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, etc. 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, etc. 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, etc.)
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) 2 (a).
(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) 2 (b) 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.
Articles 2 and 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, That 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 provisons of Article 143 (4) 2 and (7) shall enter into force on January 1, 2008.
Article 2 (General Applicability)
This Decree shall apply to the incomes accruing during the taxable period in which the date this Decree enters into force falls and thereafter.
Article 3 (General Applicability to 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, etc.)
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 to Deduction of Medical Expenses)
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 paragraph (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 2 (b) 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, etc.)
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, etc.)
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) 4 (a).
Article 22 (Transitional Measures concerning Simplified Tax Withholding Table for Wage and Salary Income)
The excessively collected amount as calculated by subtracting the aggregate of the tax amounts calculated by applying the amended provisions of Appendix 2 from the aggregate of tax amounts 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 apply to income paid on or after the date 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 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
Articles 2 and 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 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 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, That 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 apply to income that accrues in the taxable period in which the date this Decree enters into force falls.
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, That 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, etc. 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, etc.)
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, etc. 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, etc.)
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, etc. 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, Operation, etc. 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 Strategy and Finance 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 8 Omitted.
ADDENDA <Presidential Decree No. 20763, Apr. 3, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on April 7, 2008.
Articles 2 through 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 to transfer made on or after the date 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 to transfer made on or after the date 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 to transfer made on or after the date 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.
Articles 2 and 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 to transfer made on or after the date 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 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, That 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 by Presidential Decree No. 22034, Feb. 18, 2010>
Article 2 (General Applicability)
This Decree shall apply to income accruing in the taxable period in which the date this Decree enters into force falls.
Article 3 (General Applicability to Capital Gains Tax)
This Decree shall apply to transfer made on or after the date 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, That 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, etc. 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).
[This Article Added by Presidential Decree No. 22034, Feb. 18, 2010]
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 Commissio
ner of the National Tax Service at
the time of acquisition
Value announced by the Commissioner 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:
Standard amount of market price as at the time this Decree enters into force×
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
(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:
The first standard market price announced by the Commissioner of the National Tax Service for the relevant assets×


Producer Price Index in the month to which the acquisition date belongs
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
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 Mortgagebacked 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.)
Articles 2 and 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.
Articles 2 and 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, That ……<omitted.> …… the amended provisions of Article 3 of the Addenda shall enter into force on the date of its promulgation.
Articles 2 through 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 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 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, That 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, etc. 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, That 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/her seal impression pursuant to the previous Article 169 (1) 1 (e) 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, That the amended provisions of the proviso to Article 113-2 (1) 1 (a) (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) 2 (a) (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 apply to income generated in the taxable period in which the date this Decree enters into force falls.
Article 3 (General Applicability concerning Capital Gains Tax)
This Decree shall apply to transfer made on or after the date 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, etc.)
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, etc. of Collective Investment Scheme)
The amended provisions of Article 26-2 (1) 2 (a) (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) 2 (a) 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 Housing Fund Deduction)
(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 Becoming 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, etc. 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 Applicability, etc. concerning Special Cases in Relation to One House for One Household)
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 provisons 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.
Articles 2 and 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, That 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, etc. 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) 2 (a) 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 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 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 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, That 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 apply to income derived during the taxable period in which this Decree enters into force falls.
Article 3 (General Applicability concerning Capital Gains Tax)
This Decree shall apply to transfer made on of after the date this Decree enters into force.
Article 4 (Applicability concerning Scope, etc. of Collective Investment Scheme)
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, etc. 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-Service 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, etc. 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, etc. 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/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.
[This Article Added by Presidential Decree No. 23588, Feb. 2, 2012]
ADDENDA <Presidential Decree No. 22811, Mar. 29, 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 the portion transferred on or after the date 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) 2 (a) (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) 2 (a) (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, That 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.
Articles 2 and 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 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) 2 (a) on a change of the amount of rental housing and the amended provisions of Article 167-3 (1) 2 (c) 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, That 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 begin to apply from the portion of income generating during the tax period to which the enforcement date of this Decree belongs.
(2) The amended provisions concerning capital gains shall, among the amended provisions of this Decree, begin to apply from the portion to be transferred for the first time 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, Etc.)
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, etc. of the Housing Lease Business Operator)
The amended provisions of Articles 155 (21) 2 (b) and 167-3 (5) 2 (b) 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, Etc. 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, etc. 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/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, That 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 portion of income generating during the tax period to which the enforcement date of this Decree belongs.
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 begin to apply from the portion to be transferred for the first time 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.
Articles 2 through 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 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 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.)
Articles 2 through 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 to 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 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, That 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 begin to apply from the portion of income generated during the tax period to which the enforcement date of this Decree belongs.
(2) The amended provisions, among the provisions of this Decree, concerning capital gains shall begin to apply from the portion to be transferred for the first time 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, Etc.)
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, That 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, etc. 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, etc. 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, Etc.)
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 receipt other than pension.
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, etc.)
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, Etc.)
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, etc. 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 receipt other than pension, 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 4 (b) of Article 45.
Article 39 (Transitional Measures concerning Retirement Insurance, Etc.)
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 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, That 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 portion of an income generated during the taxable period to which the enforcement date of this Decree belongs.
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.