INCOME TAX ACT

Expand Act No. 11873, Jun. 7, 2013 

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 by Act No. 9897, Dec. 31, 2009]
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 Article 1-2 (Definitions)  
(1) The definitions of terms used in this Act shall be as follows: <Amended by Act No. 10408, Dec. 27, 2010>
1. The term "resident" means any individual who has his or her domicile or has his or her place of residence in the Republic of Korea for not less than one year;
2. The term "nonresident" means any individual who is not a resident;
3. The term "domestic corporation" means any domestic corporation as defined in subparagraph 1 of Article 1 of the Corporate Tax Act;
4. The term "foreign corporation" means any foreign corporation as defined in subparagraph 3 of Article 1 of the Corporate Tax Act;
5. The term "business operator" 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 by Act No. 9897, 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 "organizations deemed corporations"), among non-juristic organizations under Article 13 (1) of the same Act, considering them as a resident where they have a principal office or substantive place of business management within the Republic of Korea as prescribed by Presidential Decree or as a nonresident in other cases. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2000]
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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 operator concerned shall be liable to pay the relevant tax: Provided, That where an aggregate tax is levied on the main joint business operator under Article 43 (3) (hereafter referred to as "main joint business operator" in this paragraph), any person related to the main joint business operator shall be liable to pay tax jointly with the main joint business operator on the aggregate income within the limit of the amount of his or her income falling under the ratio of profit and loss distribution pursuant to paragraph (2) of the same Article. <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, 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.
(4) Where it is deemed that a donor has directly transferred the property pursuant to Article 101 (2), the donor and a donee shall be jointly and severally liable to pay capital gains tax.
(5) 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.
(6) Income which becomes vested as trust assets shall be deemed vested in a beneficiary (referring to a truster of the trust or his or her successor, if a beneficiary is not specifically designated or does not exist).
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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, That 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 Restriction of Special Taxation Act 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 by Act No. 9897, Dec. 31, 2009]
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 Article 4 (Classification of Income)  
(1) Income of a resident shall be classified as follows: <Amended by Act No. 11611, Jan. 1, 2013>
1. Global income: Sum of each of the following incomes after deducting income under subparagraphs 2 and 3 from all the taxable incomes under this Act:
(a) Interest income;
(b) Dividend income;
(c) Business income;
(d) Wage and salary income;
(e) Pension income;
(f) Other income;
2. Retirement income;
3. Capital gains.
(2) When classifying income pursuant to paragraph (1), profits from trust (excluding special accounts of an insurance company that runs a collective investment business concurrently under Article 251 of the Financial Investment Services and Capital Markets Act), other than a collective investment scheme under Article 17 (1) 5, shall be classified according to the details of income generated from the property rights transferred to a trustee pursuant to Article 2 of the Trust Act or disposed of otherwise. <Amended by Act No. 10924, Jul. 25, 2011>
(3) Income of a nonresident shall be classified pursuant to Article 119.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, 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, That 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, That 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 by Act No. 11611, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 7 (Place for Tax Payment in Cases of Withholding, etc.)  
(1) The place for payment of income tax withheld shall be as follows: <Amended by Act No. 11146, Jan. 1, 2012>
1. Where a withholding agent is a resident: It shall be the seat of his or her principal place of business: Provided, That 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, That 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 and 156-3 through 156-6 has no place for tax payment prescribed 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 by Act No. 9897, Dec. 31, 2009]
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 Article 8 (Place for Tax Payment in Cases of Inheritance, etc.)  
(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 payment of income tax of a public official who has no domicile in the Republic of Korea shall be a place prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 10408, Dec. 27, 2010; Act No. 10907, Jul. 25, 2011; Act No. 10924, Jul. 25, 2011; Act No. 11042, Sep. 15, 2011; Act No. 11274, Feb. 1, 2012; Act No. 11611, Jan. 1, 2013; Act No. 11652, Mar. 22, 2013>
1. Profits of a public trust under Article 106 of the 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 with one house only (excluding rental income from a house whose standard market price under Article 99 exceeds 900 million won, and from a house located overseas). 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 farm household prescribed by Presidential Decree;
(d) Income generated from manufacturing traditional liquor prescribed by Presidential Decree;
(e) An amount not exceeding six million won a year, generated from cutting down or transferring forest trees in forest land, the afforestation period of which is at least five years. In such cases, necessary matters, such as the afforestation period and the calculation of the amount of tax, etc., shall be 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) An unemployment benefit, childcare leave benefit, benefits for reduction of working hours during period of infant care, maternity leave benefit, etc. received under the Employment Insurance Act, support funds for a change of occupation under the Support for Discharged Soldiers Act, and a childcare leave allowance received by a public official under the State Public Officials Act or the Local Public Officials Act or by a person governed by the Pension for Private School Teachers and Staff Act or the Special Post Offices Act pursuant to the relevant Acts and subordinate statutes;
(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, a lump sum allowance for medical treatment, compensation for disability, condolence money, compensation for death, compensation for bereaved families, a lump sum allowance for the bereaved family, a lump sum allowance of pension for the bereaved family, additional money to bereaved family pension, special additional money to bereaved family pension, contribution for accident, and compensation for accident, or pay received while on leave due to physical or mental disability or disease 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;
(h) School expenses prescribed by Presidential Decree;
(i) Pay in the nature of compensation 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, That 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 and Support of Persons, etc. 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 carry out 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 falls in action 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 Act on Long-Term Care Insurance for the Aged;
(q) An allowance received by a worker prescribed by Presidential Decree in consideration of the level of wages, categories of work, etc., who are engaged in production and work related thereto, for overtime work, night-shift work, or holiday work prescribed by Presidential Decree;
(r) Meals or meal expenses prescribed by Presidential Decree;
(s) The amount of money not exceeding 100,000 won a month, as an allowance received from an employer in connection with childbirth of a worker or a spouse of a worker or childcare of a child of six years old and under (to be determined based on the date of commencement of the relevant taxable period);
(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);
4. Any of the following pension income:
(a) A survivors' pension, a disability pension, a disability pension, a wounded veteran's pension, an aggregated pension for old age and the bereaved family or an aggregated pension for retirement and the bereaved family received under the National Pension Act, Public Officials Pension Act, the Military Pension Act, the Pension for Private School Teachers and Staff Act, 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; <by Act No. 11611, 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 ROK Armed Forces Prisoners of War;
(e) Deleted; <by Act No. 11611, 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 and Support of Persons, etc. 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 Act on the Protection and Settlement Support of Residents Escaping from North Korea;
(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) The following compensation received for an invention developed in the course of duties pursuant to subparagraph 2 of Article 2 of the Invention Promotion Act:
(ⅰ) Compensation received by an employee from his or her employer, pursuant to Article 15 of the Invention Promotion Act;
(ⅱ) Compensation received by a faculty member of a university from the industry-academic cooperation foundation established in the university to which he or she belongs, under the Industrial Education and Industry-Academia-Research Cooperation Promotion Act, pursuant to Article 32 of the same Act;
(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 ROK Armed Forces Prisoners of War;
(f) Income generated from transfer of paintings, calligraphic works, or antiques designated as State-designated heritage under the Cultural Heritage Protection Act;
(g) Income generated from transfer of paintings, calligraphic works, or antiques to a museum or a gallery.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 13 Deleted. <by Act No. 9897, Dec. 31, 2009>  
Section 2 Calculation of Tax Base and Tax Amount
Subsection 1 General Provisions on Calculation of Tax
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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 of deductions applied (hereinafter referred to as "deduction from global income") pursuant to Articles 50, 51, 51-2 through 51-4 and 52 to the total amount (hereinafter referred to as "amount of global income") of the amount of interest income, the amount of dividend income, the amount of business income, the amount of wage and salary income, the amount of pension income and the amount of other income calculated pursuant to 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 by Act No. 11611, Jan. 1, 2013>
(3) The amount of any of the following income shall not be included when calculating the tax base of global income: <Amende by Act No. 10408, Dec. 27, 2010; Act No. 10854, Jul. 14, 2011; Act No. 11611, Jan. 1, 2013>
1. Non-taxable income under the Restriction of Special Taxation Act or Article 12 of this Act;
2. Wage and salary income of a worker employed on a daily basis (hereinafter referred to as "worker employed on a daily basis") prescribed by Presidential Decree;
3. Interest income and dividend income withheld at tax rates under Article 129 (1) 1 (a) or paragraph (2) of the same Article, and excess repayment from 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 Restriction of Special Taxation Act;
6. Interest income and dividend income (excluding dividend income pursuant to 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. Other income falling under each of the following (hereinafter referred to as "other income subject to separate taxation"):
(a) Other income under Article 21 (1) 1 through 22 (excluding income under item (b), (d) and (e)), the amount of which under paragraph (2) of the same Article does not exceed three million won and is withheld pursuant to Article 127 (excluding cases where a resident with the relevant income intends to include the income when calculating the tax base of global income);
(b) Among the other income under Article 21 (1) 21, the other income received due to inevitable grounds prescribed by Presidential Decree;
(c) Other income under Article 21 (1) 25;
(d) Among the other income under Article 21 (1) 2, the lottery prize under Article 2 of the Lottery Tickets and Lottery Fund Act;
(e) Among the other income under Article 21 (1), the other income similar to those under item (d) and prescribed by Presidential Decree;
8. Deleted; <by Act No. 11611, Jan. 1, 2013>
9. Where the sum of pension income under Article 20-3 (1) 2 and 3 does not exceed 12 million won a year, such pension income (excluding cases where a resident receiving such income intends to include it when calculating the tax base of global income; hereinafter referred to as "pension income subject to separate taxation");
10. Deleted. <by Act No. 11611, Jan. 1, 2013>
(4) When calculating the standard amount of global taxation on interest income, etc. pursuant to paragraph (3) 6, the amount to be added pursuant to the proviso to the part other than the subparagraphs of Article 17 (3) shall not 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 by Act No. 9897, Dec. 31, 2009]
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 Article 15 (Order in Calculation of Tax)  
Except as otherwise provided for in this Act, income tax on a resident's global income and retirement income shall be calculated as follows: <Amended by Act No. 11146, Jan. 1, 2012>
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 (hereinafter referred to as "basic tax rate") under Article 55 (1) 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 making tax credits under Articles 56, 56-2 and 57 through 59 from each amount of tax calculated pursuant to subparagraph 1. In such cases, when dividend tax credit has been made pursuant to Article 56, the amount of tax shall be determined by taking credits from the amount remaining after deducting tax credits from the calculated tax, or the amount under subparagraph 2 of Article 62, whichever is greater, pursuant to Article 56-2 and 57 through 59, and if there is any tax reduced or exempt pursuant to Article 59-2, the final tax shall be determined after deducting such amount;
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 Article 81 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 by Act No. 9897, Dec. 31, 2009]
Subsection 2 Categories and Amount of Income
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 Article 16 (Interest Income)  
(1) Interest income shall be the following income, generated during the relevant taxable period: <Amended by Act No. 10175, Mar. 22, 2010; Act No. 11146, Jan. 1, 2012>
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;
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 a savings insurance prescribed by Presidential Decree;
10. Excess repayment from workplace's mutual-aid association prescribed by Presidential Decree;
11. Profits made from a non-business loan;
12. Income similar to those under 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 derivative products where the conduct or trading generating the income falling under any of subparagraphs 1 through 12 is merged with the derivative products under Article 5 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as “derivative products”) 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 pursuant to paragraph (2) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 17 (Dividend Income)  
(1) Dividend income shall be income under each of the following income generated during the relevant taxable period: <Amended by Act No. 11146, Jan. 1, 2012>
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;
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;
6. Dividends or shares of profits or a surplus received from a foreign corporation;
7. The amount deemed allotted pursuant to Article 17 of the Adjustment of International Taxes Act;
8. The amount equivalent to the ratio of profit and loss distribution of joint investment business operators 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 pursuant to subparagraphs 1 through 7;
10. Profits made from the conduct or trading of the relevant derivative products where the conduct or trading generating the income falling under any of subparagraphs 1 through 9 is merged with the derivative products are merged 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 by Act No. 11146, Jan. 1, 2012>
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 investment;
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 investment: Provided, That 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, investment or capital: Provided, That 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 established 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 total value and money of stocks or investment 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 investment of the corporation which has become extinct by such merger;
5. Where the ratio of stockholding 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, That with regard to the part, excluding dividends falling under any of the following among dividend income pursuant to paragraph (1) 1 through 4 and dividend income prescribed by Presidential Decree among dividend income pursuant to paragraph (1) 5, the amount of dividend income shall be the amount calculated by adding the amount equivalent to 11/100 (12/100 for dividend income from January 1, 2009, to December 31, 2009) of such dividend income to the total amount of income in the relevant taxable period:
1. Deemed dividend by capitalizing gains on retirement of treasury stocks or shares in investment under paragraph (2) 2 (a);
2. Deemed dividend by capitalizing the net reassessed value of land under paragraph (2) 2 (b);
3. Deemed dividends under paragraph (2) 5;
4. Where any dividend income is received from a corporation prescribed by Presidential Decree, among corporations eligible for a non-taxation, exemption, reduction and exemption, or income deduction of corporate income tax to which the minimum tax under Article 132 of the Restriction of Special Taxation Act does not apply (including non-taxation, exemption, reduction and exemption, or income deduction pursuant to Acts, other than the Restriction of Special Taxation Act), the amount calculated by multiplying the amount of such dividend income by the rate prescribed by Presidential Decree.
(4) In applying paragraph (2) 1, 3, 4 and 6, where the amount disbursed to acquire stocks or investment is not clear, the par value of such stocks or investment (in cases of the stocks without par value, referring to the amount obtained after dividing the capital of a stock-issuing corporation concerned as at the date of acquisition of the stocks concerned by the total number of issued stocks; hereinafter the same shall apply) or the amount of investment shall be deemed the amount disbursed to acquire such stocks or investment. <Amended by Act No. 11146, Jan. 1, 2012>
(5) When applying paragraph (2), matters necessary for the assessment of the price of stocks or shares in investment shall be prescribed by Presidential Decree.
(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 by Act No. 9897, Dec. 31, 2009]
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 Article 18 Deleted. <by Act No. 9897, 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:
1. Income generated from agriculture (excluding 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 water supply business;
5. Income generated from sewage, waste disposal, raw material recycling and environment restoration business;
6. Income generated from the construction industry;
7. Income generated from wholesale business and retail business;
8. Income generated from transportation business;
9. Income generated from lodging business and restaurant business;
10. Income generated from publication business, visual image business, broadcasting and telecommunications business, information service business;
11. Income generated from banking business and insurance business;
12. Income generated from real estate business and leasing business: Provided, That income generated by lending rights prescribed by Presidential Decree, such as easement, etc. shall be excluded;
13. Income generated from speciality, science and technology service business (excluding research and development business prescribed by Presidential Decree; hereinafter the same shall apply);
14. Income generated from business facility management business and business supporting service business;
15. Income generated from educational service business (excluding educational institutions prescribed by Presidential Decree; hereinafter the same shall apply);
16. Income generated from health business and social welfare services business (excluding social welfare business prescribed by Presidential Decree; hereinafter the same shall apply);
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; hereinafter the same shall apply), repair and other private service business;
19. Income generated from family-employed activity;
20. Income obtained from the continuous and repeated activity under a person's own calculation and responsibility for profit making purposes, as income similar to income pursuant to subparagraphs 1 through 19.
(2) The amount of business income shall be the amount 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 a "loss".
(3) Except cases otherwise provided for 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 Commissioner of the Statistics Korea pursuant to Article 22 of the Statistics Act, and matters necessary for the scope of other business income shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 20 (Wage and Salary Income)  
(1) Wage and salary income shall be the following income, generated during the relevant taxable period:
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 employees 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.
(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 by Act No. 9897, Dec. 31, 2009]
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 Article 20-2 Deleted. <by Act No. 8144, Dec. 30, 2006>  
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 Article 20-3 (Pension Income)  
(1) Pension income shall be the following income, generated in the relevant taxable period: <Amende by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. Various pensions received pursuant to the public pension-related Acts (hereinafter referred to as “public pension income”);
2. Pensions received where the money falling under each of the following, regardless of the nature thereof, is withdrawn in the form of the pension 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”) from the pension accounts prescribed by Presidential Decree (hereinafter referred to as “pension account”):
(a) Retirement income not withheld pursuant to Article 146 (2);
(b) Amount after taking income deduction pursuant to Article 51-3 (1) 2;
(c) Amount that is increased due to profits from management of pension account;
(d) Other incomes prescribed by Presidential Decree, whose income tax is deferred after they are transferred to or deposited in the pension account;
3. Income prescribed by Presidential Decree that is similar to those under subparagraph 2 and 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 by Act No. 11611, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 21 (Other Income)  
(1) Other income shall be income, other than interest income, dividend income, business income, wage and salary income, pension income, retirement income and capital gains, provided for as follows: <Amended by Act No. 9785, Jul. 31, 2009; Act No. 10408, Dec. 27, 2010; Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
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 act concerned is legal or illegal shall not be taken into account) prescribed by the Act on Special Cases concerning Regulation and Punishment of Speculative Acts, etc.;
4. Refunds received by a purchaser of a horse racing ticket pursuant to the Korean Racing Association 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 underlying act concerned 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 operator, 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:
(a) Movie films;
(b) Tapes or films for the radio and television broadcast;
(c) Others prescribed by Presidential Decree, which are similar to those under items (a) and (b);
7. Money and other valuables received in consideration of transfer or lease of mining rights, fishing 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;
9. Money and other valuables received for establishment or lease of servitude or superficies (including rights established under the ground or in air space);
10. A penalty or indemnity received by breach or cancellation of a contract;
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 or 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) and 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 newspapers under the Act on the Promotion of Newspapers, etc. and the illustrations or cartoons printed in periodicals under the Act on the Promotion of Periodicals, Including Magazines, and translation of Korean creative works or classics into foreign languages or Korean) that falls under any of the following items:
(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 personal services (excluding services governed by subparagraphs 15 through 17) falling under any of the following items:
(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) 2 (b) and (c);
22. Gains from exercising after retirement stock options granted before retirement, or from exercising those granted outside of an employment relationship;
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. Income generated from transfer of paintings, calligraphic works, and antiques prescribed by Presidential Decree.
(2) The amount of other income shall be the amount obtained by deducting necessary expenses, from the total amount of income generated in the relevant taxable period.
(3) The detailed scope and method of calculation of other income, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11611, 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 prescirbed by Presidnetial 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 by Act No. 11611, Jan. 1, 2013>
(3) The amount of retirement income shall be the total amount of income pursuant to each subparagraph of paragraph (1) (excluding the amount of non-taxable income): Provided, That where the amount of retirement income of executives prescribed by Presidential Decree (excluding the amount under paragraph (1) 1; and in cases of any amount of retirement income receivable, assuming the executives retired on December 31, 2011, referring to the amount deducting the said amount) exceeds the amount calculated in accordance with the following calculation formula, the exceeding amount shall be deemed an earned income, notwithstanding paragraph (1): <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
Annual average amount of the total salary earned during the previous three years prior to the date of retirement (where the period of an employment concerned is less than three years, it shall be the period of such employment calculated by month; and where the period of such employment is less than one month, it shall be one month) x 1/10 x The period of employment after January 1, 2012/12 x 3
(4) Upon applying the calculation formula in the proviso to paragraph (3), the employment period shall be calculated based on the number of months, and where the period of such employment is less than one month, it shall be deemed one month. <Amended by Act No. 11611, Jan. 1, 2013>
(5) Deleted. <by Act No. 11611, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 23 Deleted. <by Act No. 8144, 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 by Act No. 9897, 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 the right on such real estate, etc. and receives guaranty money, security money for lease on a deposit basis, or money in the nature similar thereto (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, That where he or she receives guaranty money, etc. for lending of a house, it means cases where he or she owns three or more houses (a house of 85 square meter or less per each house (ho) or household being used only for the purpose of residing, whose base price for the tax period concerned is 300 million won or less, shall not be included in the number of houses until December 31, 2013) and the total amount of guaranty money, etc. of such house concerned exceeds 300 million won, the calculation of the number of houses and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 11146, Jan. 1, 2012>
(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 to which the date he or she consumes or supplies belongs.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 26 (Exclusion from Total Income)  
(1) The amount appropriated for another tax among the amount of income tax or local income tax repaid or to be repaid to a resident shall not be included in the total income when calculating the amount of income generated in the relevant taxable period.
(2) The amount used to offset a loss carried forward pursuant to Article 45 (3), among the value of assets received gratuitously by a resident, and the amount of liabilities decreased by waiver or extinguishment of debts, shall not be included in the total amount of income when calculating the amount of income generated in the relevant taxable period.
(3) The amount of income carried forward from the preceding taxable period when calculating the amount of business income of a resident shall not 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, the amount equivalent to the part used thereof shall not be included in the total amount of 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 work for which he or she contracted, the amount equivalent to the part used thereof shall not 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, the amount equivalent to the part used thereof shall not be included in the total income when calculating the amount of income generated in the relevant taxable period.
(7) The individual consumption tax, liquor tax, and traffic, energy and environment tax paid or to be paid by a resident liable to pay such individual consumption tax, liquor tax, and traffic, energy and environment tax imposed on the amount earned or to be earned as his or her total income, shall not be included in the total income in the calculation of the amount of income generated during the corresponding year: Provided, That this shall not apply to any amount of tax he or she owes for raw materials, fuel or other goods purchased, imported or used. <Amended by Act No. 8144, Dec. 30, 2006; Act No. 8825, Dec. 31, 2007>
(7) The individual income tax and liquor tax which any resident liable to individual consumption tax and liquor tax has paid or is to pay according to the amount he or she earned or to be earned shall not be included in the total income when calculating the amount of income generated in the relevant taxable period: Provided, That this shall not apply to any amount of tax he or she owes for raw materials, fuel or other goods purchased, imported or used. <<Enforcement Date: Jan. 1, 2013>>
(9) The output tax shall not be included in the total income when calculating the amount of income generated in the relevant taxable period.
(10) Any amount of tax an oil dealer refunded pursuant to Article 106-2 (2) of the Restriction of Special Taxation Act shall not be included in the total income when calculating the amount of income generated in the relevant taxable period.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 10408, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 28 (Calculation of Allowance for Bad Debts as Necessary Expenses)  
(1) Where a business operator 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 by Act No. 9897, Dec. 31, 2009]
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 Article 29 (Calculation of Reserves for Retirement Benefits as Necessary Expenses)  
(1) Where a business operator 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 by Act No. 9897, Dec. 31, 2009]
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 Article 30 Deleted. <by Act No. 5532, Apr. 10, 1998>  
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 Article 31 (Calculation of Necessary Expenses in Acquisition of Fixed Assets with Gains on Insurance Settlement)  
(1) Where a business operator acquires fixed assets of the same kind as a replacement for the destroyed assets with insurance money received due to the destruction of or damage to fixed assets, or improves the fixed assets acquired as a replacement or damaged assets, gains on insurance settlement used for the acquisition or improvement of such fixed 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.
(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 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.
(4) If any person who counts gains on insurance settlement in necessary expenses pursuant to paragraph (2) falls under any of the following subparagraphs, the amount equivalent to gains on insurance settlement shall be included in the total amount of income in the taxable period when the relevant cause thereof has taken place:
1. Where he or she fails to use gains on insurance settlement within the deadline to acquire or improve fixed assets under paragraph (1);
2. Where he or she discontinues the relevant business in the period under paragraph (2).
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 32 (Calculation of Value of Assets for Business Acquired with National Subsidies as Necessary Expenses)  
(1) Where a business operator 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 by Act No. 10408, Dec. 27, 2010; Act No. 10898, Jul. 25, 2011; Act No. 10907, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 33 (Exclusion from Necessary Expenses)  
(1) The amount which falls under any of the following subparagraphs, among the amount a resident has paid or is to pay in the taxable period shall not be included in necessary expenses when calculating the amount of business income: <Amended by Act No. 10408, Dec. 27, 2010>
1. Income subject to income tax and 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 disposition fees for arrears 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, liquor tax, or traffic, energy and environment tax on the products carried out, but unsold: Provided, That this shall not apply where an amount equivalent to such amount of tax is added to the value of such products;
8. An amount in arrears of the individual consumption tax or liquor tax on the products carried out, but unsold: Provided, That this shall not apply where an amount equivalent to such amount of tax is added to the value of such products; <<Enforcement Date: Jan. 1, 2013>>
9. VAT input 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 any loan, the creditor of which is obscure;
12. Utility charges that are not mandatory under Acts and subordinate statutes or those imposed as a disciplinary measure for non-performance of duties or violation of prohibited or restricted acts under Acts and subordinate statutes;
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 by Act No. 9897, Dec. 31, 2009]
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 Article 34 (Exclusion of Donations from Necessary Expenses)  
(1) As a donation made by a business operator in the relevant taxable period, the amount in excess of any of the following amount (hereafter referred to as "permissible limit in necessary expenses" in this Article), among the donations prescribed by Presidential Decree in consideration of public interests, such as social welfare, culture, arts, education, religion, charity, etc. (hereinafter referred to as "designated donation"), and a donation, other than a designated donation, shall not be included in necessary expenses when calculating the amount of business income in the relevant taxable period: <Amended by Act No. 10408, Dec. 27, 2010>
1. Where an amount has been donated to any religious organization:
Permissible limit in necessary expenses = [the amount of income in the relevant taxable period (referring to income before adding donations and designated donations pursuant to paragraph (2) in necessary expenses; hereafter the same shall apply in this Article) - donations included in necessary expenses pursuant to paragraph (2) and a loss carried forward under Article 45 (hereafter referred to as "legal donations, etc." in this paragraph)] × 10/100 + [the lesser of the amount of income in the taxable period - legal donations, etc.) × 20/100 or the amount paid other than to religious organizations];
2. Cases other than subparagraph 1:
Permissible limit in necessary expenses = (the amount of income in the relevant taxable period - legal donations, etc.) × 30/100.
(2) Paragraph (1) shall not apply to any of the following donations (hereinafter referred to as "legal donations"): Provided, That where the total legal donations exceed the amount obtained by deducting a loss carried forward pursuant to Article 45 from the amount of income generated in the relevant taxable period, such excess shall not be included in necessary expenses when calculating the amount of income generated in the relevant taxable period: <Amended by Act No. 10221, May 31, 2010; Act No. 10408, Dec. 27, 2010>
1. Donations under Article 24 (2) of the Corporate Act;
2. Where a person has performed voluntary services in order to restore the special disaster areas under the Framework Act on the Management of Disasters and Safety, the value of such voluntary services. In such cases, necessary matters concerning methods for determining the value of the voluntary services shall be prescribed by Presidential Decree;
3. through 10. Deleted. <by Act No. 10408, Dec. 27, 2010>
(3) The amount of donations (excluding the amount deducted when a global income tax return is filed under Articles 52 (6) and 54-2) not included in necessary expenses because it exceeds the permissible limit in necessary expenses pursuant to paragraphs (1) and (2) may, as prescribed by Presidential Decree, be included in necessary expenses, carried over to each taxable period which ends within the period pursuant to the following subparagraphs from the commencement date of the taxable period following the relevant taxable period: <Amended by Act No. 11146, Jan. 1, 2012>
1. A legal donation: Three years;
2. A designated donation: Five years.
(4) Where paragraphs (1) and (2) apply, donations made by any person who falls under Article 50 (1) 2 or 3 (excluding a person eligible for another resident's basic deduction) shall be included in donations made by the relevant business operator. <Amended by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 35 (Exclusion of Entertainment Expenses from Necessary Expenses)  
(1) The amount of entertainment expenses (excluding the amount not included in necessary expenses pursuant to paragraph (2)) disbursed by a business operator in the relevant taxable period, exceeding the total of the following amounts shall not be included in necessary expenses when calculating the amount of income generated in the relevant taxable period: <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
1. The amount calculated by multiplying 12 million won (18 million won in cases of small and medium enterprises prescribed by Presidential Decree) by the number of months of the relevant taxable period, and dividing it by 12;
2. The amount calculated by multiplying the total income (only applicable to income prescribed by Presidential Decree) in the relevant taxable period on the relevant business by applicable rates pursuant to the following table: Provided, That with regard to income generated from transactions with a related person prescribed by Presidential Decree, it shall be the amount equivalent to 10/100 of the amount calculated by multiplying the applicable rates pursuant to the following table:
Amount of IncomeApplicable Rates
Not more than 10 billion won20/10,000
Over 10 billion won but not more than 50 billion won 20 million won + (10/10,000 of the amount exceeding 10 billion won)
Over 50 billion won 60 million won + (3/10,000 of the amount exceeding 50 billion won)
(2) Entertainment expenses which exceed the amount prescribed by Presidential Decree of the entertainment expenses disbursed by a business operator for one occasion of entertainment and do not fall under any of the following cases shall not be included in necessary expenses when calculating the amount of income generated in each taxable period: Provided, That 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 entertainment expenses and disbursement of which is objectively self-evident: <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11873, Jun. 7, 2013>
1. Entertainment expenses disbursed by using the means falling under any of the following items (hereafter referred to as "credit card, etc." in this Article):
(a) A credit card under the Specialized Credit Financial Business Act (including those prescribed by Presidential Decree, as those similar to a credit card; hereinafter the same shall apply);
(b) Cash receipts under Article 160-2 (2) 4;
2. Entertainment 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 Article 32 of the Value-Added Tax Act, or after issuing a purchaser-issued tax invoice under Article 126-4 (1) of the Restriction of Special Taxation Act or a withholding tax receipt prescribed by Presidential Decree.
(4) "Entertainment expenses" in paragraphs (1) and (2) means entertainment expenses, social expenses, a recompense, and other expenses in the nature similar thereto regardless of the pretext thereof, disbursed by a business operator in connection with his or her business (including expenses prescribed by Presidential Decree, among the expenses for welfare facilities disbursed by a business operator to an association or an organization formed by employees).
(5) In applying paragraph (2) 1, where any person has been issued a sales slip, etc. in the name of a member store different from a member store of credit cards, etc. providing goods or services, the amount of such expenditure shall not be included in entertainment expenses pursuant to paragraph (2) 1.
(6) Necessary matters concerning the scope of entertainment expenses and keeping of materials evidencing expenditure, etc. shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 36 Deleted. <by Act No. 5580, 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:
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.
(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 expneses 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.
[This Article Wholly Amended by Act No. 10408, Dec. 27, 2010]
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 Article 38 Deleted. <by Act No. 8144, 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, etc.)  
(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 That, the value of inventory assets shall be the face value evaluated for each asset in the manner prescribed by Presidential Decree.
(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:
1. Stock assets which cannot be sold at the normal price due to damage, decomposition, etc.;
2. Fixed 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 Restriction of Special Taxation Act, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 40 Deleted. <by Act No. 9897, 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 by Act No. 11146, 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 by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 42 (Special Cases concerning Calculation of Amount of Income on Transactions with Nonresident, etc.)  
(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 by Act No. 9897, 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 operators prescribed by Presidential Decree (hereinafter referred to as "joint investment business operators") 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 operator 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 operators; hereinafter referred to as "joint business operators").
(3) Where one resident and his or her related person prescribed by Presidential Decree are included in joint business operators, 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 operator 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 operator"). <Amended by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, 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. <Amended by Act No. 11611, Jan. 1, 2013>
(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 by Act No. 11611, 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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 45 (Deduction of Losses and Losses Carried Forward)  
(1) Any loss recorded in the calculation of the amount of business income generated in the relevant taxable period, according to the books recorded and kept by a business operator 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 a business (hereinafter referred to as "real estate leasing business") falling under any of the following subparagraphs shall not be deducted when calculating the tax base of global income:
1. Real estate or business leasing rights on real estate: Provided, That business leasing rights prescribed by Presidential Decree, such as easement, etc. shall be excluded;
2. Factory foundation or mining foundation leasing business;
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) (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 ten years from the end of the taxable period in which the relevant loss carried forward occurs: Provided, That 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:
1. A loss carried forward remaining after taking a deduction pursuant to paragraph (1) 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 supporting 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, That this shall not apply where an estimated tax return is filed or a decision for additional assessment is made because the books and other supporting 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 operator 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 there is a loss carried forward in the relevant taxable period, the loss for the taxable period shall be first deducted from income.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 46 (Special Cases concerning Calculation of Amount of Income on Bonds, etc.)  
(1) Where a resident receives (including the conversion of convertible bonds to stocks, the exchange of exchangeable bonds to stocks and the exercise of preemptive rights of the bond with warrant (applicable only where the cost for new stock issuance is paid by the bond with warrant concerned; 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 and 6, 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 by Act No. 10408, Dec. 27, 2010; Act No. 11146, Jan. 1, 2012>
(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 by Act No. 10408, 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 by Act No. 9897, 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, That 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 by Act No. 9897, 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) With regard to a resident with wage and salary income, the following amount shall be deducted from the total pay which he or she receives in the relevant taxable period: <Amended by Act No. 9270, Dec. 26, 2008; Act No. 11146, Jan. 1, 2012>
Total Amount of PayAmount Deducted
5 million won or less80/100 of the total pay
Over 5 million won, but not more than 15 million won4 million won ＋ (50/100 of the excess of 5 million won)
Over 15 million won, but not more than 30 million won 9 million won ＋ (15/100 of the excess of 15 million won)
Over 30 million won, but not more than 45 million won 11.25 million won ＋ (10/100 of the excess of 30 million won)
Over 45 million won
12.75 million won ＋ (5/100 of the excess of 45 million won)
(2) Notwithstanding paragraph (1), the amount deducted on a worker employed on a daily basis shall be 100,000 won per day.
(3) Where the total amount of pay of a resident who has 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 "wage and salary income deduction".
(5) In cases of paragraph (1), where a person (excluding a person employed on a daily basis) receives wage and salary income from two or more persons, the aggregate wage and salary income shall be the total pay and income deductions under paragraph (1) shall be taken therefrom. <Amended by Act No. 10408, Dec. 27, 2010>
(6) Deleted. <by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, 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, That where the amount deducted exceeds nine million won, nine million won shall be deducted: <Amended by Act No. 11611, 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
more than 7 million won		3.5 million won + (40/100 of the
amount exceeding 3.5 million won)
Over 7 million won but not more
than 14 million won		4.9 million won + (20/100 of the
amount exceeding 7 million won)
Over 14 million won
6.3 million won + (10/100 of the
amount exceeding 14 million won)
(2) The deduction under paragraph (1) shall be referred to as "pension income deduction".
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 48 (Retirement Income Deduction)  
(1) For a resident with any retirement income, the following amount shall be deducted in order from the retirement income in the relevant taxable period: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. The amount equivalent to 40/100 of retirement income;
2. The following amount determined by the number of years of continuous service (which shall be deemed one year if he or she retires before one year elapses, and in cases under Article 22 (1) 1, it shall mean the number of years calculated by the method prescribed by Presidential Decree; hereinafter the same shall apply):
Number of Years of Continuous ServiceAmount Deducted
5 years or less300,000 won × the number of years of continuous service
Over 5 years, but not more than 10 years1.5 million won + 500,000 won × (the number of years of continuous service － 5 years)
Over 10 years, but not more than 20 years4 million won + 800,000 won × (the number of years of continuous service － 10 years)
Over 20 years12 million won + 1.2 million won × (the number of years of continuous service － 20 years)
(2) Where the amount of retirement income in the relevant taxable period is less than the amount deducted pursuant to the subparagraphs of paragraph (1), such amount of retirement income shall be the amount deducted.
(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 by Act No. 11611, Jan. 1, 2013>
(5) Deleted. <by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 49 Deleted. <by Act No. 8144, Dec. 30, 2006>  
Subsection 6 Global Income Tax 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 subparagraphs by 1.5 million won per capita shall be deducted from the global income of the resident in the relevant taxable period:
1. The relevant resident;
2. A spouse of a resident with no annual income, or with total annual income not exceeding one million won;
3. A dependent (where the dependent is a disabled person under Article 51 (1) 2, he or she shall not be subject to the age limit) falling under any of the following items, and living together with a resident (including his or her spouse; hereafter the same shall apply in this subparagraph), whose total annual income does not exceed one million won:
(a) Any lineal ascendant of a resident (in cases where a lineal ascendant has remarried, including a lineal ascendant's spouse prescribed by Presidential Decree), who is 60 or more years old;
(b) Any lineal descendant of a resident prescribed by Presidential Decree or any adoptee prescribed by Presidential Decree, living together with the resident (hereinafter referred to as "adoptee"), who is 20 or less years old. In such cases, if the relevant lineal descendant or adoptee and his or her spouse are disabled persons pursuant to Article 51 (1) 2, such spouse shall be included;
(c) A brother or a sister of a resident, who is 20 or less years old, or 60 or more 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 by Act No. 9897, Dec. 31, 2009]
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 Article 51 (Additional Deduction)  
(1) Where any person entitled to basic deduction (hereinafter referred to as "person entitled to basic deduction") pursuant to Article 50 falls under any of the following, the amount stipulated in each subparagraph shall be deducted from the global income of a resident in the relevant taxable period, in addition to the basic deduction: Provided, That where falling under both subparagraphs 3 and 6, subparagraph 6 shall apply thereto: <Amended by Act No. 11611, Jan. 1, 2013>
1. Where a person is 70 years old or older (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 is a female with no spouse and is the head of a household with dependents under Article 50 (1) 3, or a female spouse, 500,000 won per capita a year;
4. Where a person is a lineal descendant, adoptee or foster child, six years old or under, one million won per capita a year;
5. Where a person is a lineal descendant who was born, or an adoptee reported, in the relevant taxable period, two million won per capita a year;
6. Where the relevant resident has no spouse but has his or her lineal descendant or adoptee qualified as the person entitled to basic deduction, one million won a year;
(2) Deductions under paragraph (1) shall be referred to as "additional deduction".
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 51-2 (Additional Deduction for Households with Multiple Children)  
(1) Where the number of children eligible for basic deduction of a resident (excluding a worker employed on a daily basis) with wage and salary income or business income is two, one million won per year, and where the number of eligible children is over two, the sum of one million won and two million won a year per capita exceeding two persons shall be deducted, in addition to the basic deduction, from the wage and salary income or business income of the resident for the relevant taxable period, respectively (hereinafter referred to as "additional deduction for households with multiple children").
<Amended by Act No. 10408, Dec. 27, 2010>
(2) The basic deduction, the additional deduction and the additional deduction for households with multiple children shall be referred to as "personal deductions".
(3) Where the aggregate personal deductions exceed the amount of global income, such excess shall be written off.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 51-3 (Pension Contribution Deduction)  
(1) Where a resident with global income has paid any of the following amounts (hereinafter referred to as “pension contributions”), the pension contributions paid in the relevant taxable period shall be deducted from his or her global income in the relevant taxable period: Provided, That where the total paid amount of the pension contributions under subparagraph 2 exceeds four million won a year, the excess shall be deemed zero: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. Contributions or individual shares pursuant to the public pension-related Acts;
2. Amount of money paid by a resident into the pension account, not falling under any of the following:
(a) The retirement income whose income tax was not withheld pursuant to Article 146 (2) and other incomes against which taxation was deferred;
(b) Amount of money paid into a pension account from the other pension account due to transfer of the concerned pension contract.
(2) Deduction under paragraph (1) shall be referred to as "pension contribution deduction".
(3) Where the total pension contribution deduction exceeds the global income, such excess shall be written off.
(5) Necessary matters concerning the method of calculation, etc. of the deduction of pension contributions under paragraphs (1) through (3) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 52 (Special Deduction)  
(1) Where any 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 in the relevant taxable period, such amount shall be deducted from the wage and salary income in the taxable period:
1. Premiums borne by an employee under the National Health Insurance Act, the Employment Insurance Act, or the Long-Term Care Insurance for the Aged Act;
2. Each of the following premiums paid according to an insurance contract by which the maturity repayment does not exceed the paid-in premiums: Provided, That where the total premiums, by each of the following premiums, exceeds one million won a year, respectively, such excess shall be written off:
(a) Premiums of a guaranty insurance exclusively for the disabled prescribed by Presidential Decree, as an insurance exclusively for the disabled, the insured or a beneficiary of which is a disabled person entitled to basic deduction;
(b) Premiums prescribed by Presidential Decree (excluding premiums of a guaranty insurance exclusively for the disabled pursuant to item (a)), the insured of which are the persons entitled to basic deduction.
(2) Where a resident with wage and salary income pays medical expenses prescribed by Presidential Decree for the persons entitled to basic deduction (not subject to the limit of age and income) in the relevant taxable period, the following amount shall be deducted from wage and salary income in the relevant taxable period:
1. The amount exceeding the amount calculated by multiplying the total pay by 3/100, as medical expenses paid for persons entitled to the basic deduction, excluding those under subparagraph 2: Provided, That where such amount exceeds seven million won a year, it shall be seven million won a year;
2. Medical expenses paid for the relevant resident, a person who is 65 years old or older as of the end of the taxable period and any disabled person: Provided, That where medical expenses under subparagraph 1 are less than the amount calculated by multiplying the total pay by 3/100, such less amount shall be deducted.
(3) Where a resident with wage and salary income has paid educational expenses prescribed by Presidential Decree for such resident and a person entitled to the basic deduction (not subject to age limit; and with respect to the facilities under subparagraph 3 (b), applicable only to the persons whose age is less than 18 as of the date when the tax period is elapsed) in the relevant taxable period, the following amount shall be deducted from wage and salary income in the relevant taxable period: Provided, That educational expenses prescribed by Presidential Decree, on which income tax or gift tax is non-taxable, shall not be deducted: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 10789, Jun. 7, 2011; Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
1. The total educational expenses under the following items paid for a spouse, lineal descendents, brothers and sisters, adoptees and foster children entitled to the basic deduction: Provided, That educational expenses paid to a graduate school shall be excluded, and the limit is nine million won a year per capita in cases of university students and three million won a year per capita in cases of preschool children and elementary school, secondary school and high school students:
(a) Educational expenses paid to schools under the Early Childhood Education Act, the Elementary and Secondary Education Act, the Higher Education Act and other special Acts;
(b) Educational expenses paid to the life-long educational institutions that can use the name of a college major (hereinafter referred to as “college major”) and the life-long educational institutions in the form of cyber colleges (hereinafter referred to as "cyber college") under the Life-long Education Act, and to courses of study (hereafter referred to as "degree courses" in this paragraph) prescribed by Presidential Decree under the Act on Recognition of Credits, etc. and the Act on the Acquisition of Academic Degrees through Self-Education;
(c) Educational expenses paid to overseas educational institutions prescribed by Presidential Decree (only applicable to students prescribed by Presidential Decree, where a resident who pays educational expenses for students enrolled in an overseas educational institution works in the Republic of Korea);
(d) Educational expenses paid to child care centers under the Infant Care Act, private teaching institutes under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons, or sports facilities prescribed by Presidential Decree for preschool children (only applicable to the amount prescribed by Presidential Decree, in cases of expenses paid to private teaching institutes or sports facilities);
2. The total educational expenses under the following items paid for the relevant resident:
(a) Educational expenses falling under subparagraph 1 (a) through (c);
(b) Educational expenses paid for courses of study amounting to one or more semester at a university (including a college major, cyber college and degree course) or a graduate school, and for an hour-based program under Article 36 of the Higher Education Act;
(c) Tuition fees paid for vocational education and training conducted by a vocational education and training institution under Article 2 of the Act on the Development of Workplace Skills of Workers: Provided, That subsidies, etc. prescribed by Presidential Decree shall be excluded;
3. Expenses for special education prescribed by Presidential Decree paid to any of the following for the disabled (not subject to the income threshold) who are entitled to the basic deduction:
(a) Social welfare facilities and non-profit corporations prescribed by Presidential Decree;
(b) Facilities providing development and rehabilitation services for functional improvement and behavior development of disabled persons;
(c) Overseas facilities or corporations, similar to facilities or corporations under item (a).
(4) Where a resident with wage and salary income, as the head of a household prescribed by Presidential Decree (hereafter referred to as "household" in paragraph (5)) that does not own a house as of the end of the taxable period, pays any of the following amounts to rent a house not larger than a certain scale prescribed by Presidential Decree (including land attached to a house; where such annexed land exceeds the area computed by region by multiplying the multiple prescribed by Presidential Decree by the area where a building is built, the relevant house shall be excluded; hereafter referred to as "house of the national housing scale" in this Article), the amount equivalent to 40/100 of such amount in cases falling under subparagraph 1 and the amount equivalent to 50/100 of such amount in cases falling under subparagraph 2 shall be deducted from the wage and salary income in the relevant taxable period: Provided, That the sum of amount deducted and the amount pursuant to Article 87 (2) of the Restriction of Special Taxation Act exceeds three million won a year, such excess shall be deemed written off: <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
1. The amount of repayment of the principal and interest of a loan of funds to rent a house prescribed by Presidential Decree;
2. The amount of monthly rent prescribed by Presidential Decree paid by a person whose total amount of pay in the relevant taxable period is not more than 50 million won.
(5) Where the head of a household (referring to a person with wage and salary income among members of a household, where the head of a household is not entitled to deduction pursuant to paragraph (4) of this Article, Article 87 (2) of the Restriction of Special Taxation Act, and this paragraph) who does not own a house, as a resident with wage and salary income, has paid interest on a long-term mortgage loan (including a long-term mortgage loan inherited by acquisition of a house of the national housing scale; hereafter referred to as "long-term mortgage loan" in this paragraph) prescribed by Presidential Decree that he or she has extended from a financial institution, etc., or the National Housing Fund established under the Housing Act after settlement of mortgage on such house to acquire the house, as a house of the national housing scale, the standard market price of which under Article 99 (1) does not exceed three hundred million won at the time of acquisition, the amount of interest repaid in the relevant taxable period shall be deducted from the wage and salary income for the relevant taxable period according to the following standards: Provided, That where the sum of the amount deducted and the amount pursuant to paragraph (4) and Article 87 (2) of the Restriction of Special Taxation Act exceeds five million won a year (referring to 15 million won, if the interest of a long-term mortgage loan is paid in the method of fixed interest rate prescribed by Presidential Decree or if the principal or the principal and its interest are paid in the method of repayment in installment with no grace period prescribed by Presidential Decree), such excess shall be deemed written off: <Amended by Act No. 11146, Jan. 1, 2012>
1. Determination as to whether he or she is the head of a household shall be in accordance with the conditions as of the end of the taxable period;
2. This shall not apply where the period he or she owns two or more houses, including a house owned by a member of the household, as of the end of the taxable period or in the relevant taxable period exceeds three months;
3. This shall apply to the head of a household regardless of whether he or she actually lives therein, and this shall apply to a resident who is not the head of a household only where he or she actually lives therein;
4. Where the head of a household who does not own a house obtains the right, the price of which prescribed by Presidential Decree is 300 million won or less, as the right (hereafter referred to as "right to sell a house in lots" in this subparagraph) which enables him or her to obtain a house of the national housing scale (including a house which a member of a housing association under the Housing Act and a rearrangement business association under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents obtains or he or she obtains through such association; hereafter the same shall apply in this subparagraph) built with approval of a business plan under the Housing Act and borrows money (including where the conditions of borrowing of the relevant loan before the completion of such house are changed on condition that it shall be converted to a long-term mortgage loan when such house is completed) from a financial institution, etc., or the National Housing Fund under the Housing Act to obtain such house on condition that such loan shall be converted to a long-term mortgage loan at the time such house is completed, such loan shall be deemed a long-term mortgage loan from the date of such borrowing (where the conditions of borrowing are changed, referring to the date of such change) to the date of registration of the ownership preservation of such house: Provided, That where a resident becomes in possession of two or more rights to sell a house in lots, this shall not apply to the taxable period to which such period of possession belongs;
5. Where he or she has borrowed money before the individual house price and the multi-unit house price under the Public Notice of Values and Appraisal of Real Estate Act are officially announced, the first price officially announced pursuant to the same Act after the date of borrowing shall be deemed the standard market price of the relevant house.
(6) The amount calculated by subtracting donations included in necessary expenses when calculating business income from the following aggregate donations, made by a resident (including donations made by those falling under Article 50 (1) 2 and 3 (excluding those to whom the basic deduction of another resident is applied)) in the relevant taxable period, shall be deducted from the global income subject to the aggregate taxation in the relevant taxable period (where donations have been included in necessary expenses when calculating business income, it shall be based on the amount of income remaining after donations have been included in necessary expenses, and interest income and dividend income to which the withholding tax rate is applied pursuant to Article 62 shall be excluded). In such cases, where donations under subparagraph 1 and donations under subparagraph 2 are made simultaneously, donations under subparagraph 1 shall be deducted first: <Amended by Act No. 10408, Dec. 27, 2010>
1. Legal donations;
2. Designated donations. In such cases, the limit of the amount of a designated donation shall be in accordance with the following classification:
(a) Where there is the amount donated to a religious organization:
The limit = [Referring to the amount calculated by deducting the donation under subparagraph 1 from global income (in cases of business income, the amount of income before donations are included in necessary expenses shall be the basis, and interest income and dividend income to which the withholding tax rate is applicable pursuant to Article 62 shall be excluded); hereafter referred to as "amount of income" in this paragraph] × 10/100 + [the lesser of 20/100 of income, or donations made to an organization, other than a religious organization];
(b) Cases, other than under item (a):
The limit = 30/100 of the amount of income.
(7) When applying paragraphs (1) through (3), if any amount is already paid for an ex-spouse, a dependant, a disabled person or a person who is 65 years old or older as at the end of the taxable period, who becomes no longer entitled to basic deduction due to marriage, divorce, separation, employment, etc., before the end of the taxable period, the amount paid until the date on which the relevant causes have occurred shall be deducted from the wage and salary income in the relevant taxable period.
(8) Deductions under paragraphs (1) through (7) shall apply where the relevant resident has made an application, as prescribed by Presidential Decree, and where such deduction exceeds his or her global income subject to the aggregate taxation in the relevant taxable period, such excess shall be deemed written off: Provided, That where donations are included in such excess, he or she may deduct the relevant donations and the designated donation not deducted because it exceeded the amount of limit under paragraph (6) 2 from the global income or include in necessary expenses pursuant to Article 34 (3) by carrying them over to each taxable period which ends within the period pursuant to the following from the taxable period following the relevant taxable period: <Amended by Act No. 11146, Jan. 1, 2012>
1. In cases of a legal donation: Three years;
2. In cases of a designated donation: Five years.
(9) For a person who fails to file an application pursuant to the main sentence of paragraph (8) as a resident with wage and salary income or a business operator who meets the requirements prescribed by Presidential Decree (hereinafter referred to as "compliant business operator"), such as reporting of a business account under Article 160-5 (3), one million won a year shall be deducted, and for a person who has the global income (excluding a compliant business operator) as a resident who has no wage and salary income, 600,000 won a year shall be deducted (hereinafter referred to as "standard deduction"): Provided, That where global income subject to the aggregate taxation in the relevant taxable period is less than the amount deducted, such amount of global income shall be the amount deducted. <Amended by Act No. 10408, Dec. 27, 2010>
(10) Deductions under paragraphs (1) through (9) shall be referred to as "special deduction".
(11) Other matters necessary for special deduction shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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, That 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) Determination as to whether a spouse, dependent, disabled person or senior citizen is entitled to deduction pursuant to Articles 50, 51 and 51-2 shall depend upon the situation as at the end of the taxable period: Provided, That where a person who died or whose disability was healed before the end of the taxable period, the determination shall depend upon the situation on the day preceding the day of death or healing.
(5) Notwithstanding the main sentence of paragraph (4), where the applicable age is determined pursuant to Articles 50 (1) 3, 51 (1) 4 and 51-2, and there is the day falling under the applicable age in the taxable period of the relevant taxable period, he or she shall be deemed entitled deduction.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11611, Jan. 1, 2013>
(2) Where a person liable to file a final return on the tax base pursuant to Article 70 (1), 70-2 (2) or 74 fails to submit documents pursuant to Article 70 (4) 1, only the portion for the resident himself or herself and the standard deduction among the basic deduction shall apply: Provided, That where such documents are submitted subsequently regardless of submission of the final tax base return, the same shall not apply. <Amended by Act No. 11611, Jan. 1, 2013>
(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 by Act No. 9897, Dec. 31, 2009]
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 Article 54-2 (Special Cases concerning Income Deduction for Joint Business)  
Where the income deduction under Article 51-3, 52 (6) or the Restriction of Special Taxation Act is applicable, if any amount is disbursed, paid, invested, contributed, etc. by a related person whose income is aggregated with the income of the main joint business operator for aggregate taxation pursuant to Article 43 (3), such amount shall be deemed an amount disbursed, paid, invested, contributed, etc. by the main joint business operator within the extent of the income aggregated with the income of the main joint business operator for taxation, and the income deduction may be allowed when calculating the amount of global income of the main joint business operator subject to aggregate taxation. <Amended by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
Section 4 Calculation of Tax
Subsection 1 Tax Rates
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 Article 55 (Tax Rates)  
(1) As for income tax on the global income of a resident, the amount calculated by applying the following tax rates to the tax base of global income in the relevant year (hereinafter referred to as "calculated tax on global income") shall be the amount tax thereof: <Amended by Act No. 11146, Jan. 1, 2012>
Tax Base of Global Income Tax Rates
12 million won or less6/100 of tax base
Over 12 million won, but not more than 46 million won720,000 won + (15/100 of the
excess of 12 million won)
Over 46 million won, but not more than 88 million won5.82 million won + (24/100 of the excess of 46 million won)
Over 88 million won, but not more than 300 million won
15.9 million won + (35/100 of the excess of 88 million won)
Over 300 million won90.1 million won + (38/100 of the excess of 300 million won)
(2) The income tax on retirement income of a resident shall be the amount calculated according to the following orders (hereinafter referred to as "calculated tax on retirement income"): <Amended by Act No. 11611, Jan. 1, 2013>
1. Amount obtained after dividing the tax base of retirement income for the relevant taxable period by the number of years of continuous service;
2. Amount obtained after applying the tax rate under paragraph (1) to the amount obtained after multiplying 5 by the amount under subparagraph 1;
3. Amount obtained after multiplying the number of years of continuous service by the amount obtained after dividing the amount under subparagraph 2 by 5.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009>
(2) Deduction made under paragraph (1) shall be referred to as "tax deduction from dividend income". <Amended by Act No. 9897, Dec. 31, 2009>
(3) Deleted. <by Act No. 7006, 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 by Act No. 9897, Dec. 31, 2009>
(5) Deleted. <by Act No. 8144, Dec. 30, 2006>
(6) Matters necessary to calculate the amount of dividend tax credit shall be prescribed by Presidential Decree. <Amended by Act No. 9897, 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, That 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, That 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 by Act No. 9897, Dec. 31, 2009]
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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 foreign income tax prescribed by Presidential Decree on such foreign source income in a foreign country, he or she may choose any of the following options:
1. Deducting the amount of foreign income tax from the calculated tax on global income or on retirement income for the relevant taxable period within the limit (hereafter referred to as "credit limit" in this Article) of the amount calculated by multiplying the calculated tax on global income or on retirement income for the relevant taxable period calculated pursuant to Article 55 by the ratio (referring to the ratio prescribed by Presidential Decree, where the tax exemption or reduction is allowed pursuant to the Restriction of Special Taxation Act or other Acts) of the foreign source income to the amount of global income or the amount of retirement income in such taxable period;
2. Including the amount of foreign income tax on the foreign source income paid or payable in necessary expenses in the calculation of income in the relevant taxable period.
(2) Where the foreign income tax paid or payable to a foreign government, when applying paragraph (1) 1 (applicable only where the foreign source income is deducted from the calculated tax on global income), exceeds the credit limit, such excess may be carried forward to the taxable period to be completed within five years from the taxable period following the relevant taxable period, and deducted within the credit limit for the taxable period to which it is carried forward. <Amended by Act No. 11611, Jan. 1, 2013>
(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 the tax credit or inclusion in necessary expenses pursuant to paragraph (1), within the limit prescribed by such tax treaty.
(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 or inclusion in necessary expenses under paragraph (1). <Added by Act No. 10408, Dec. 27, 2010>
(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 by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 58 (Tax Credit for Casualty Loss)  
(1) Where a business operator 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:
1. Income tax not levied as at the date of occurrence of a disaster and income tax levied yet unpaid (including any penalty tax);
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 and 57, paragraph (1) shall apply to income tax after deduction of such tax amount.
(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 by Act No. 9897, Dec. 31, 2009]
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 Article 59 (Tax Credit for Wage and Salary Income)  
(1) For a resident with wage and salary income, the following amount shall be credited against the calculated tax on global income on the relevant wage and salary income: Provided, That where the deducted tax amount exceeds 500,000 won, such excess shall be deemed written off:
Calculated tax on global income on wage and salary incomeAmount of credit
500,000 won or less
55/100 of the calculated tax
Over 500,000 won275,000 won + (30/100 of the
excess of 500,000 won)
(2) Where a withholding tax under Article 134 (3) is deducted from wage and salary income of a worker employed on a daily basis, 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 by Act No. 11146, Jan. 1, 2012]
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 Article 59-2 (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 by Act No. 11611, 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, That 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) Where income tax is reduced or exempted pursuant to the law in addition to this Act, except as otherwise prescribed in such law, the income tax calculated by applying paragraph (1) mutatis mutandis shall be reduced or exempted.
[This Article Added by Act No. 9897, Dec. 31, 2009]
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 Article 60 (Order of Application, etc. of Tax Reduction or Exemption or Tax Credit)  
(1) For the purposes of the Acts related to taxes, 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) If the sum of an amount of reduction or exemption and the amount of tax credit pursuant to paragraph (1) 1 and 2 exceeds the income tax payable (excluding the penalty tax), such excess shall be deemed written off.
(3) When applying paragraph (2), in cases of amount of tax credit to be taken pursuant to Article 58, the amount of penalty tax shall be included in the amount of income tax payable.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 61 Deleted. <by Act No. 6781, Dec. 18, 2002>  
<This Article is deleted due to the decision of unconstitutionality made by the Constitutional Court on August 29, 2002 by Act No. 6781, Dec. 18, 2002>
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 any interest income and dividend income which are included in the global income tax base of a resident (hereafter referred to as "interest income, etc." in this Article) exceeds the global taxation threshold (hereinafter in this Article referred to as "global taxation threshold") on any interest income, etc., the calculated amount of global income tax of the relevant resident shall be the following amounts, whichever is larger, and if such income does not exceed the global taxation threshold, it shall be the amount under subparagraph 2. In such cases, when there is any dividend income under Article 17 (1) 6-3, such dividend income shall not be deemed interest income, etc.: <Amended by Act No. 10408, Dec. 27, 2010>
1. The amount obtained by adding up the tax under the following items:
(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 amount of tax calculated by applying the tax rate under Article 129 (1) 1 (d) to the global taxation threshold;
2. The amount obtained by aggregating the amounts of tax under the following items:
(a) The amount of tax calculated by applying the tax rates under Article 129 (1) 1 and 2 to the interest income, etc.: Provided, That the tax rate under Article 129 (1) 1 (d) shall apply to income not subject to tax withholding under Article 127;
(b) The calculated tax amount on the amount of other global income excluding the interest income, etc.: Provided, That 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 under Article 129 (1) 1 (d) 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 by Act No. 9897, Dec. 31, 2009]
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 Article 63 (Special Case concerning Calculations of Tax on Excess Repayment from Workplace Mutual-Aid Association)  
With regard to excess repayment from a workplace mutual-aid association (hereafter referred to as "excess repayment from a workplace mutual-aid association" in this Article) pursuant to Article 16 (1) 10, 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 by Act No. 10408, 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 more than ten years 1.5 million won + 500,000 won × (the number
of years paid － five years)
Over ten years, but not more than 20 yearsFour million won + 800,000 won × (the number of years paid - ten years)
Over 20 years
12 million won + 1.2 million won × (the number
of years paid － 20 years)
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 64 (Special Cases concerning Calculation of Tax for Real Estate Broker)  
(1) The calculated global income tax for a resident conducting real estate trading business prescribed by Presidential Decree (hereinafter referred to as "real estate broker") whose amount of global income includes profit margin from trading houses or land falling under any of Article 104 (1) 4 through 8 and 10 (hereafter referred to as "profit margin from trading houses, etc." in this Article) shall be the larger of either of the following amount of taxes:
1. The calculated taxes on global income;
2. The total amount of taxes pursuant to the following items:
(a) The total of the tax amount calculated by applying the tax rate under Article 104 to the profit margin from trading houses, etc.;
(b) The amount of tax calculated by applying the tax rate under 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 by Act No. 9897, Dec. 31, 2009]
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 operator 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 tax 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 by Act No. 11611, Jan. 1, 2013>
(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 tax 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 tax 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 by Act No. 11146, Jan. 1, 2012>
(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 resident who does not have the interim prepayment threshold has global 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.
(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 of 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		)－(the amount of tax reduced or exempted, amount of tax credit, calculated tax for a preliminary return on profit margins from sale and purchase of land, etc., the tax amount imposed on occasions and the withholding tax amount on the global income by the expiration date of the interim prepayment period)
2


(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 by Act No. 9897, Dec. 31, 2009]
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 Articles 66 and 67 Deleted. <by Act No. 6292, 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 by Act No. 9897, Dec. 31, 2009]
Subsection 2 Preliminary Return on Profit Margin from Sale and Purchase of Land, etc. 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 to 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 pursuant to 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 the necessary expenses calculated by applying Article 97 mutatis mutandis, from the value of trade, by tax rates prescribed in the subparagraphs of Article 104 (1): Provided, That notwithstanding Article 104 (1) 2 and 3, where the holding period of land, etc. is less than two years, the calculated tax shall be the amount computed by multiplying the amount obtained as stated above by the tax rate pursuant to subparagraph 1 of the same paragraph.
(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 by Act No. 11611, Jan. 1, 2013>
(5) Articles 107 (2) and 114 shall apply mutatis mutandis to the calculation, determination and correction of the calculated tax on profit margin from sale and purchase of land, etc. <Amended by Act No. 11611, Jan. 1, 2013>
(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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, 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 to 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 by Act No. 10408, Dec. 27, 2010>
(2) Deleted. <by Act No. 10408, Dec. 27, 2010>
(3) A return pursuant to paragraph (1) shall be referred to as "final return on the tax base of global income".
(4) When 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, attaching the documents under the following subparagraphs. In such cases, where any person liable for double-entry bookkeeping under Article 160 (3) fails to submit the documents under subparagraph 3, he or she shall not be deemed to have filed a final return on the tax base of global income: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11146, Jan. 1, 2012>
1. Documents prescribed by Presidential Decree, which attest that he or she is entitled to personal deduction, pension insurance premium deduction, interest expense deduction for reverse mortgage-backed retirement pension system and special deduction;
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 and supporting documents kept and entered under Articles 160 and 161, the statement of financial position, the income statement 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, That in cases of a business operator who keeps records of books pursuant to Article 160 (2), the account statement of the amount of income by simple bookkeeping prescribed by Ministerial Decree of Strategy and Finance;
4. Where necessary expenses are included pursuant to Articles 28 through 32, a detailed statement thereof;
5. Where a business operator (excluding any small-scale business operator prescribed by Presidential Decree) has been supplied goods or services by another business operator (including a corporation) in connection with the business and receives verification other than the supporting documents falling under any subparagraph of Article 160-2 (2), a detailed statement of the reception of receipts (hereinafter referred to as "detailed statement of the reception of receipts") prescribed by Presidential Decree;
6. Where the amount of business income is not calculated on the basis of the books and supporting documents kept and recorded pursuant to Articles 160 and 161, the account statement of estimated income prescribed by Ministerial Decree of Strategy and Finance.
(5) When there are deficient matters or errors 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 correction thereof.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 operator whose income for each type of business exceeds a certain level prescribed by Presidential Decree (hereinafter referred to as "business operator 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 operator 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 by Act No. 11611, 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 correction thereof.
[This Article Added by Act No. 10625, 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 to 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, That this shall not apply to a person who pays the income tax pursuant to Articles 146 through 148.
(3) A return pursuant to paragraph (1) shall be referred to as a "final return on tax base of retirement income".
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 72 Deleted. <by Act No. 8144, 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 by Act No. 11611, Jan. 1, 2013>
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;
5. A resident with only income under subparagraphs 1 and 2;
6. A resident with only income under subparagraphs 2 and 3;
7. A resident with only income under subparagraphs 2 and 4;
8. A resident with only interest income, dividend income, pension income and other income subject to separate taxation;
9. A resident falling under subparagraphs 1 through 7 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 wage and salary income, public pension income, retirement income, or income pursuant to paragraph (1) 4 paid by two or more persons: Provided, That this shall not apply to any person who has no tax payable for a final tax return and payment under Article 76 (2) after he or she has paid income tax pursuant to 148 (1) and the year-end tax settlement pursuant to Article 137-2, 138 or 144-2 (5). <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
(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 subparagraph 7 of the same paragraph: Provided, That 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 tax withholding tax pursuant to Articles 137, 137-2 and 138. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
(4) Paragraph (1) shall not apply where a withholding agent under Article 127 fails to withhold income tax from those with wage and salary income (excluding income of a worker employed on a daily basis), pension income, retirement income, or income under paragraph (1) 4, pursuant to Article 137, 137-2, 138, 143-4, 144-2, or 146. <Amended by Act No. 10408, Dec. 27, 2010>
(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 by Act No. 9897, 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, That this shall not apply to the income from the pension account succeeded by a heir pursuant to Article 44 (2). <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, 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 by Act No. 9897, 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 pursuant to Article 59-2 (1) shall file an application with the head of a tax office having jurisdiction over the place for tax payment, together with a return pursuant to Article 69, 70, 70-2 or 74, as prescribed by Presidential Decree. <Amended by Act No. 11611, Jan. 1, 2013>
(2) A person who intends to qualify for reduction or exemption of wage and salary income pursuant to Article 59-2 (1) 1 shall file an application with the head of the competent tax office, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11611, Jan. 1, 2013>
(2) Payment pursuant to paragraph (1) shall be referred to as "payment by final return".
(3) When a person pays taxes by final return, he or she shall deduct the following amount of taxes: <Amended by Act No. 10408, 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 by Act No. 9897, 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 by Act No. 9897, 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 operator (including business operators who have shut down or temporarily closed 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 seat of the place of business, by February 10 of the following year of the relevant taxable period, as prescribed by Presidential Decree: Provided, That this shall not apply to any of the following cases: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11873, Jun. 7, 2013>
1. Where Article 74 applies due to the death of a business operator or his or her departure from the Republic of Korea;
2. Where a business operator under 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.
(2) Any business operator 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 operator;
2. Details of the amount of income by type of business;
3. Present status of facilities;
4. Other matters prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009]
Section 9 Determination, Correction, Collection and Refund
Subsection 1 Determination and Correction of Tax Base
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 Article 80 (Determination and Correction)  
(1) Where a resident liable to file a final return on the tax base under Articles 70, 70-2, 71 and 74 fails to make 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 concerned in the relevant taxable period. <Amended by Act No. 11611, Jan. 1, 2013>
(2) Where a person who has filed a final return on the tax base under Articles 70, 70-2, 71 and 74 (in cases falling under subparagraphs 2 and 3, including any person who fails to file a final return on the tax base pursuant to Article 73) falls under any of the following cases, 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 the tax amount in the relevant taxable period: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. Where an omission or error exists on the return;
2. Where an omission or error exists in the withholding of income taxes made pursuant to Article 137, 137-2, 138, 143-4, 144-2 or 146, where it is deemed difficult to collect tax from a withholding agent due to the discontinuance of his or her business, unknown whereabouts, etc. or difficult for him or her to collect withholding taxes due to resignation of wage and salary income earners;
3. Where a person who submitted a report on income deduction for wage and salary income under Article 140 has taken global income deduction by unjustifiable means prescribed by Presidential Decree, such as receiving false receipts, etc. and the withholding agent is deemed to have difficulty in ascertaining wrongfulness of such deduction;
4. Where a person fails to submit all or part of the aggregate table of invoices by seller and the aggregate table of invoices by purchaser 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 operator obliged to use an account for business pursuant to Article 160-5 (1) fails to perform such obligations;
(b) Where a business operator obliged to report an account for business pursuant to Article 160-5 (3) fails to perform such obligation;
(c) Where a business operator 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 justifiable 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 justifiable grounds, in violation of paragraph (2) of the same Article, or issues a credit card sales slip falsely;
(e) Where a business operator who meets the requirements under Article 162-3 (1) fails to register as a cash receipt merchant without justifiable grounds;
(f) Where a business operator who has registered as aa cash receipt merchant pursuant to Article 162-3 (1) fails to issue cash receipts without justifiable grounds, in violation of paragraph (3) or (4) of the same Article, 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 due taxes of the relevant taxable period pursuant to paragraphs (1) and (2), he or she shall determine or correct them based on books and other supporting documents: Provided, That where he or she is unable to calculate the amount of income by books and other supporting 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 correction of the tax base and tax, 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.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 81 (Penalty Tax)  
(1) Where any person obliged to submit a statement of payment pursuant to Article 164 or 164-2 of this Act or Articles 120 and 120-2 of the Corporate Tax Act falls under any of the following cases, the amount determined under the following classifications shall be aggregated with the calculated tax: Provided, That this shall not apply to the amount on which penalty is charged pursuant to Article 90-2 of the Restriction of Special Taxation Act: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. Where he or she fails to submit the relevant statement of payment by the deadline: The amount equivalent to 2/100 (where he or she submits a statement of payment within three months after the deadline for submission, referring to 1/100 of the amount paid) of the amount paid for which a statement of payment is not submitted;
2. Where a statement of payment submitted falls under the cases of obscurity prescribed by Presidential Decree, or the amount paid entered on the statement of payment is incorrect: The amount equivalent to 2/100 of the amount of payment which is unaccounted for or falsely recorded on the statement of payment.
(2) Deleted. <by Act No. 11146, Jan. 1, 2012>
(3) Where any person obliged for double-entry bookkeeping pursuant to Article 160 (3) falls under any of subparagraphs 1 through 3, the amount equivalent to 1/100 (where he or she submits a statement of payment within one month after the deadline for submission in cases falling under subparagraphs 2 and 3, referring to 5/1,000 of the value of supply) of the value of supply thereof shall be aggregated with the calculated tax, and the amount equivalent to 2/100 of the value of supply in cases falling under subparagraph 4 shall be aggregated with the calculated tax: Provided, That this shall not apply to the amount on which penalty tax is imposed pursuant to Article 60 (2), (3), (5) or (6) of the Value-Added Tax Act: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11873, Jun. 7, 2013>
1. Where a taxpayer fails to enter all or part of the items prescribed by Presidential Decree on an invoice issued under Article 163 (1) or (2) or falsely enters them: Provided, That this shall not apply to an invoice to which subparagraph 2 applies;
2. Where a taxpayer fails to submit the aggregate table of invoices by seller and the aggregate table of invoices by purchaser under Article 163 (5), or fails to enter all or some items to be entered on the aggregate table submitted, or enters them falsely: Provided, That this shall not apply to the amount of sales or purchase, the transaction of which may be verified as prescribed by Presidential Decree, as cases the items entered in the aggregate table of tax invoices by seller and the aggregate table of tax invoices by purchaser have been entered in error and the amount governed by subparagraph 4;
3. Where a taxpayer fails to submit the aggregate table of tax invoices by purchaser under Article 54 of the Value-Added Tax Act (hereinafter referred to as "aggregate table of tax invoices by purchaser") pursuant to Article 163-2 (1) or omits all or some items to be entered in the aggregate table of tax invoices by purchaser, or enters them falsely: Provided, That this shall not apply to the amount of purchase, the transaction of which may be verified as prescribed by Presidential Decree, as the items entered in the aggregate table of tax invoices by purchaser have been entered in error, and the amount governed by subparagraph 4;
4. In any of the following cases:
(a) Where an invoice under Article 163 (1) or (2) is not issued;
(b) Where an invoice under Article 163 (1) or (2) is issued when a taxpayer has supplied no goods or services;
(c) Where an invoice under Article 163 (1) or (2) is issued when a taxpayer has received no goods or services;
(d) Where an invoice is issued for goods or services supplied in the name of a person, other than the supplier of goods or services;
(e) Where an invoice is issued for goods or services received in the name of a person, other than the supplier of goods or services.
(4) Where a business operator (excluding a small-scale business operator prescribed by Presidential Decree, or any person whose amount of income is estimated, as prescribed by Presidential Decree) is supplied goods or services from another business operator (including any corporation) in relation to his or her business and fails to receive a supporting document falling under any subparagraph of Article 160-2 (2) or receives a false supporting document, the amount equivalent to 2/100 of the amount for which he or she fails to receive a supporting document or receives a false supporting document (referring to the difference from the amount receivable according to the case) shall be added to the calculated tax: Provided, That this shall not apply where the proviso to the part other than the subparagraphs of Article 160-2 (2) applies.
(5) Where a business operator (excluding a small-scale business operator prescribed by Presidential Decree, or any person whose amount of income is estimated, as prescribed by Presidential Decree) fails to submit a specification of reception of receipts under Article 70 (4) 5 by the deadline for a final return on the tax base or it is deemed the submitted specification of reception of receipts is a case of obscurity prescribed by Presidential Decree, the amount equivalent to 1/100 of the amount paid without the specification or of the amount paid with the obscure specification shall be added to the calculated tax.
(6) Where a business operator (only applicable to a business operator prescribed by Presidential Decree, who mainly supplies goods or services to consumers, not to business operators) who fails to report on the present status of a place of business pursuant to Article 78 or under-reports the amount of income to be reported pursuant to paragraph (2) of the same Article, the amount equivalent to 5/1,000 of the amount of income unreported or under-reported shall be added to the calculated tax for the relevant taxable period.
(7) Where any business operator falls under any of the following, in relation to the registration or report for any place of joint business, any of the following amounts shall be added to the calculated tax for the relevant taxable period:
1. Where any joint business operator fails to register the business pursuant to Article 87 (3) or any person who is not a joint business operator falsely registers as a joint business operator: 5/1,000 of the total amount of income for each taxable period during which no registration or a false registration is made;
2. Where any joint business operator fails to report details to be reported pursuant to Article 87 (4) and (5) or falsely reports, prescribed by Presidential Decree: 1/1,000 of the total amount of income for each taxable period during which no report or a false report is made.
(8) Where any business operator (excluding any small-scale business operator prescribed by Presidential Decree) fails to keep and enter the books under Articles 160 and 161 or any amount of income entered in the books is less than the amount which should have been entered, an amount equivalent to 20/100 of the amount calculated by multiplying the calculated tax by the ratio (1, if the relevant ratio exceeds 1; 0, if it is smaller than 0) of the amount of income which is not entered in the books or the amount of income less than the amount which should have been entered to the amount of global income shall be added to the calculated tax.
(9) Where a business operator falls under any of the following, each of the following amounts shall be added to the calculated tax: <Amended by Act No. 10408, Dec. 27, 2010>
1. Where he or she fails to use a business account when he or she falls under any subparagraph of Article 160-5 (1): An amount equivalent to 2/1,000 of the amount for which no business account has been used;
2. Where he or she fails to report a business account pursuant to Article 160-5 (3): The larger of the following items:
(a) An amount equivalent to 2/1,000 of the amount of income during the period during which a business account has not been reported (referring to the number of days from the day following the deadline for reporting until the day before the date on which a business account is reported; hereafter referred to as "unreported period" in this subparagraph. In such cases, where the unreported period extends over two or more taxable periods, the unreported period shall apply to each taxable period) in the taxable period. In such cases, the amount of income during the unreported period shall be calculated pursuant to the following formula:
The amount of income = The amount of income of the relevant taxable period × Unreported period / 365 (366 in a leap year)
(b) An amount equivalent to 2/1,000 of the total transactions pursuant to the subparagraphs of Article 160-5 (1).
(10) Where a credit card member store under Article 162-2 (2) refuses transactions by credit card or issues credit card sales slips falsely, and as a result thereof, receives a notice from the head of the competent tax office pursuant to the latter part of Article 162-2 (4), the amount (where the amount calculated for each purchase is less than 5,000 won, referring to 5,000 won) equivalent to 5/100 of each amount notified for which credit card transaction is refused or the amount for which a false credit card sales slip is issued (referring to the difference from the amount which should have been issued for each purchase) shall be added to the calculated tax for the relevant taxable period.
(11) Where a business operator obliged to register as a cash receipt merchant pursuant to Article 162-3 (1) fails to perform such obligation, or such registered store fails to issue a cash receipt or issues it falsely, in violation of paragraph (3) or (4) of the same Article, any of the following amount shall be added to the calculated tax for the relevant taxable period: Provided, That in cases falling under subparagraph 2, this shall not apply where the amount of the cash receipt issued is less than 5,000 won for each purchase: <Amended by Act No. 10408, Dec. 27, 2010>
1. Where a store fails to register as a cash receipt merchant: An amount equivalent to 1/100 of the amount of income (applicable only to the amount of income of types of business mandated to register as a cash receipt merchant) during the period he or she did not register as a cash receipt merchant (referring to the number of days from the day following the deadline for registration under Article 162-3 until the day before the day on which the store registered; hereafter referred to as "unregistered period" in this subparagraph. In such cases, where the unregistered period extends over two or more taxable periods, the unregistered period shall apply to each taxable period). In such cases, the amount of income during the unregistered period shall be calculated pursuant to the following formula:
The amount of income = The amount of income of the relevant taxable period × Unregistered period / 365 (366 in a leap year)
2. Where a store fails to issue a cash receipt or issues it falsely, and, as a result thereof, he or she receives a notice from the head of the competent tax office pursuant to the latter part of Article 162-3 (6): An amount (where the amount calculated for each purchase is less than 5,000 won, referring to 5,000 won) equivalent to 5/100 of the amount for each purchase for which a cash receipt was not issued or of the amount for each purchase for which the cash receipt was issued falsely (referring to the difference from the amount for each purchase that should have been issued).
(12) Where any person who issues a receipt for donation (hereinafter referred to as "receipt for donation") required to include such donation in necessary expenses or to take an income deduction for donation pursuant to Articles 34 and 52 (6) of this Act make false entries (including where the receipt for donation is issued without stating donated amount, donator’s personal information or other important matters; hereafter the same shall apply in this paragraph) in a receipt for donation or fails to prepare and keep a detailed statement of issuance by donor pursuant to Article 160-3 (1), the following amount shall be added to the calculated tax, and where penalty tax is levied due to a failure to perform the obligation to submit a report pursuant to Article 78 (3) of the Inheritance Tax and Gift Tax Act or to a failure to keep and retain books on the property contributed pursuant to paragraph (5) of the same Article, subparagraph 2 shall not apply: <Amended by Act No. 11611, Jan. 1, 2013>
1. In cases of a receipt for donation:
(a) Where the receipt is issued after the amount of donation on the receipt is falsely stated: The amount equivalent to 2/100 of the amount issued falsely (referring to the difference between the amount entered actually on a receipt (where no amount is stated on a receipt, referring to the corresponding amount when the person, who received a receipt for donation, included the donations in his or her necessary expenses or took income deduction for donations) and the amount that should have been issued for each purchase);
(b) Cases, other than item (a), such as issuance of a receipt for donation with its personal information, etc. of a donor falsely stated: The amount equivalent to 2/100 of the amount entered on the receipt;
2. Cases where a detailed statement of issuance by donor is not kept or retained: The amount equivalent to 2/1,000 of the amount for which a detailed statement of issuance is not kept or retained.
(13) Where a business operator subject to confirmation of compliant filing fails to submit a certificate of confirmation of compliant filing by June 30 of the following year during the taxable period under Article 70-2 (2) to the head of a tax office having jurisdiction over the place for tax payment, the amount equivalent to 5/100 of the amount calculated by multiplying the calculated tax on global income by the ratio (where the relevant ratio is larger than one, one shall be adopted, and where the relevant ratio is smaller than zero, the ratio shall be zero) of the amount of business income to the amount of global income shall be added to the final tax amount. <Added by Act No. 10625, May 2, 2011>
(14) Paragraphs (1), (3) through (7), and (9) through (12) shall apply where no calculated tax is assessed. <Amended by Act No. 10625, May 2, 2011>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 11611, 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 by Act No. 9897, 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, That 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 by Act No. 9897, Dec. 31, 2009]
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 Article 84 (Threshold of Taxation on Other Income)  
If other income falls under any of the following subparagraphs, no income tax shall be imposed on such income:
1. Where the sum of the amount, as a refund pursuant to Article 21 (1) 4, indicated on the face of horse racing tickets, winner wager tickets, bullfighting match wager tickets or sports promotion wager tickets by case does not exceed 100 thousand won and a refund per unit wager does not exceed one hundred times the unit voting amount;
2. Where winning prizes, etc. pursuant to Article 21 (1) 14 are less than five million won by case;
3. Where the amount of other income is 50,000 or less won by case.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11611, 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, That 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 by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
1. Where 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, penalty taxes and disposition fee for arrears.
(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 by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 85-2 (Refund from Loss Carryback)  
(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 and medium enterprise prescribed by Presidential Decree 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 amount of income tax (referring to the amount of income tax prescribed by Presidential Decree) levied on business income for such small and 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.
(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 by Act No. 11611, 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 by Act No. 11611, 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) as income tax for the taxable period in which such loss carried forward occurred, as prescribed by Presidential Decree: <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
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 by Act No. 9897, Dec. 31, 2009]
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 Article 86 (Non-Collection of Small Sum)  
No income tax shall be collected in the following cases: <Amended by Act No. 11146, Jan. 1, 2012>
1. Where the amount of withholding tax pursuant to Article 127 (excluding paragraph (1) 1 of the same Article) is under 1,000 won;
2. Where the amount of tax collected by a taxpayers association pursuant to Article 150 is under 1,000 won;
3. Deleted; <by Act No. 11611, Jan. 1, 2013>
4. Where the amount of interim tax prepayment pursuant to Article 65 is under 200,000 won.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 operators.
(2) The amount of tax related to a place of joint business as penalty tax amount pursuant to Articles 81 (1), (3) through (7), and (9) through (11), 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 operators. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11146, Jan. 1, 2012>
(3) Articles 160 (1) and 168 shall apply to a place of joint business considering such place of joint business as one business operator.
(4) When joint business operators 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 operators (including matters concerning whether they are investment joint business operators), the agreed profit-and-loss distribution ratio, the representative joint business operator, 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 operator 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 by Act No. 9897, Dec. 31, 2009]
CHAPTER II TAX LIABILITY ON RESIDENT'S GLOBAL INCOME AND RETIREMENT INCOME
Section 1 Non-Taxation
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 Articles 87-2 and 87-3 Deleted. <by Act No. 10408, Dec. 27, 2010>  
Section 2 Calculation of Tax Base and Tax Amount
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 Articles 87-4 through 87-6 Deleted. <by Act No. 10408, Dec. 27, 2010>  
Section 3 Calculation of Amount of Income
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 Article 87-7 Deleted. <by Act No. 10408, Dec. 27, 2010>  
CHAPTER III RESIDENT'S TAX LIABILITIES FOR CAPITAL GAINS
Section 1 Definition of Transfer
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 Article 88 (Definition of Transfer)  
(1) "Transfer" under Article 4 (1) 3 and this Chapter means that, regardless of registration or registry on assets, such assets are actually transferred at a cost due to sale, exchange, investment in kind in a corporation, etc. In such cases, where a donee takes over any debts of a donor on the conditional donation (excluding cases falling under the main sentence of Article 47 (3) of the Inheritance Tax and Gift Tax Act), in cases of any part equivalent to the amount of debts of the donation, the assets thereof shall be deemed actually transferred at a cost.
(2) Where land category or lot number is changed or land is designated as a reserved land due to disposition of land substitution under the Urban Development Act or other Acts, it shall not be deemed the transfer pursuant to paragraph (1). <Amended by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
Section 2 Non-Taxation and Reduction and Exemption of Capital Gains
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 Article 89 (Non-Taxable Capital Gains)  
(1) No capital gains tax (hereinafter referred to as "capital gains tax") shall be levied on the following income:
1. Income generated from disposition by an adjudication of bankruptcy;
2. Income generated from exchange, division and annexation of farmland falling under cases prescribed by Presidential Decree;
3. Income generated from transfer of one house for one household prescribed by Presidential Decree (excluding a high-priced house, the value of which exceeds the standard prescribed by Presidential Decree) and land annexed to such house (hereafter referred to as "land annexed to a house" in this Article) within the area calculated by multiplying the area of land on which a building is built by multiples prescribed by Presidential Decree by region.
(2) Notwithstanding paragraph (1), paragraph (1) 3 shall not apply where one household prescribed by Presidential Decree possesses a house (including land annexed to the house; hereafter the same shall apply in this Article) and the position as an occupant acquired with approval for a management disposition plan under Article 48 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents [limited to the position that has been acquired as a member of a maintenance and improvement project association implementing a housing reconstruction project or a housing redevelopment project under the same Act (including the position acquired from such association member); including the land appurtenant thereto; hereinafter referred to as "occupation right of an association member"], and transfers the relevant house; provided, this shall not apply where it acquires a house to reside during the implementation period of the housing reconstruction project or the housing redevelopment project under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents or if any unavoidable grounds exist prescribed by Presidential.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 90 (Reduction and Exemption of Capital Gains Tax)  
(1) If the amount of income to be reduced or exempted pursuant to this Act or other Acts, is included in capital gains under Article 95, the amount of capital gains tax to be reduced or exempted shall be calculated by multiplying the amount, computed by applying the tax rate under Article 104 to the tax base of capital gains under Article 92 (2), by the ratio of the amount remaining after taking basic deduction for capital gains from the qualified income for tax reduction and exemption pursuant to Article 103 (2), to the tax base of capital gains. <Amended by Act No. 11611, Jan. 1, 2013>
(2) Notwithstanding paragraph (1), where the reduction or exemption of capital gains tax is prescribed by the Restriction of Special Taxation Act 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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, 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 pursuant to this Act or other Acts: The smaller of the calculated capital gains tax 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 by Act No. 10408, Dec. 27, 2010]
Section 3 Computation of Tax Base and Tax of Capital Gains
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 Article 92 (Calculation of Tax Base 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 tax base of retirement income.
(2) The tax base of capital gains shall be the amount obtained by making the basic deduction of capital gains pursuant to Article 103 from the amount of capital gains calculated pursuant to Articles 94 through 99, 99-2, 100 through 102 and 118.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 93 (Order in Calculation of Amount of Capital Gains Tax)  
Except as otherwise provided for in this Act, capital gains tax shall be calculated as follows: <Amended by Act No. 11146, Jan. 1, 2012>
1. The calculated tax on capital gains shall be obtained by applying the tax rate under Article 104 to the tax base of capital gains under Article 92 (2);
2. When tax is reduced or exempted pursuant to Article 90 from the tax calculated pursuant to subparagraph 1, the final tax on capital gains shall be calculated by deducting such tax amount;
3. The gross amount of tax on capital gains shall be the final tax calculated pursuant to subparagraph 2 plus penalty tax under Article 115 of this Act and Articles 47-2 through 47-4 of the Framework Act on National Taxes.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
Section 4 Computation of Amount of Capital Gains
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 Article 94 (Scope of Capital Gains)  
(1) Capital gains shall be the following income generated in the relevant taxable period: <Amended by Act No. 10408, Dec. 27, 2010>
1. Income generated from transfer of land (referring to land falling under land category subject to registration in the cadastral register under the Act on Land Survey, Waterway Survey and Cadastral Records) or a building (including facilities and structures annexed to a building);
2. Income generated from transfer of real property rights falling under any of the following items:
(a) Rights to acquire real estate (when a building is completed, including the rights to acquire such building and land annexed thereto);
(b) Superficies;
(c) Rights to lease on a deposit basis and leasehold interest on real estate registered;
3. Income generated from transfer of stocks or investment shares falling under any of the following items (including preemptive rights to new stocks, and securities depository receipts prescribed by Presidential Decree; hereafter referred to as "stocks, etc." in this Chapter):
(a) Transfer of stocks, etc. of a stock listed corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "stock listed corporation"), by its majority stockholders (hereafter referred to as "majority stockholders" in this Chapter) prescribed by Presidential Decree considering the ratio of stocks owned, the total market value thereof, etc. and transfer of stocks not depending on trading in the securities market under the same Act (hereinafter referred to as "securities market");
(b) Stocks, etc. of a corporation which is not a stock listed corporation;
4. Income generated from transfer of any of the following assets (hereafter referred to as "other assets" in this Chapter):
(a) Business rights (including business rights deemed to have been transferred with assets included therein 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 (referring to assets referred to in subparagraphs 1 and 2);
(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 (in cases where the rights to exclusively use facilities or to use them on more favorable conditions than general users are provided by only possessing stocks, etc. of the corporation, such stocks, etc. shall be included);
(c) Assets prescribed by Presidential Decree, taking into account members of stockholders, the current status of holding real estate, or types of business, etc. of a corporation which has issued the stock certificates or investment certificates of stocks, etc.
(2) Where paragraph (1) 3 and 4 are applicable at the same time, subparagraph 4 shall apply.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 95 (Amount of Capital Gains)  
(1) The amount of capital gains shall be calculated by deducting the amount of special deduction for long-term holding from the amount (hereinafter referred to as "gains on transfer") obtained by deducting necessary expenses under Article 97 from the total of capital gains under Article 94 (hereinafter referred to as "transfer value").
(2) "Amount of special deduction for long-term holding" in paragraph (1) means the amount calculated by multiplying gains on transfer of assets (where transferring the occupation right of an association member, it shall be limited to the gains on transfer of the housing before authorizing a management and disposition plan under Article 48 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions) by the deduction rate by holding period in accordance with Table 1 below, as assets pursuant to Article 94 (1) 1 (excluding the unregistered assets transferred pursuant to Article 104 (3) and the land for non-business use under Article 104-3), the holding period of which is not less than three years and the occupation right of an association member among the assets under Article 94 (1) 2 (a) (excluding the occupation right acquired from the association members): Provided, That in cases of assets related to one house for one household (including land annexed thereto) prescribed by Presidential Decree, it means the amount calculated by multiplying transfer value of such assets by the deduction rate by holding period in accordance with Table 2 below: <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
[Table 1]
Holding PeriodDeduction Rate
Three or more years, but under four years10/100
Four or more years, but under five years12/100
Five or more years, but under six years15/100
Six or more years, but under seven years18/100
Seven or more years, but under eight years21/100
Eight or more years, but under nine years24/100
Nine or more years, but under ten years27/100
Over ten years30/100
[Table 2]
Holding PeriodDeduction Rate
Three or more years, but under four years24/100
Four or more years, but under five years32/100
Five or more years, but under six years40/100
Six or more years, but under seven years48/100
Seven or more years, but under eight years56/100
Eight or more years, but under nine years64/100
Nine or more years, but under ten years72/100
Over ten years80/100
(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 pursuant to Article 89 (1) 3 shall be calculated, as prescribed by Presidential Decree.
(4) The holding period of assets prescribed in paragraph (2) shall be from the date of acquisition to the date of transfer of such assets: Provided, That in cases under Article 97 (4), it shall be calculated from the date a spouse who donated, or a lineal ascendent or lineal descent acquires, the relevant assets.
(5) Matters necessary for the calculation of the amount of capital gains shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 96 (Transfer Value)  
(1) The transfer value of assets under the subparagraphs of Article 94 (1) shall be the actual transaction value between a transferor and a transferee at the time of transfer of such assets (hereinafter referred to as "actual transaction value").
(2) Notwithstanding paragraph (1), where assets under Article 94 (1) 1 and 2 are transferred by not later than December 31, 2006, the transfer value of such assets shall be based on the standard market price at the time of transfer of such assets except for the following cases:
1. Where assets are a house (including land annexed thereto) falling under the category of high-priced house pursuant to Article 89 (1) 3;
2. Where assets are rights to acquire real estate under Article 94 (1) 2 (a);
3. Where assets are transferred without registration under Article 104 (3);
4. Where assets are real estate within one year after acquisition;
5. Where assets are cases falling under the standard prescribed by Presidential Decree, where real estate is acquired or transferred by unlawful means, such as preparation of a false contract, a false change of the resident registration, etc.;
6. Where a transferor files a return on the actual transaction value at the time of the transfer and acquisition with the head of a tax office having jurisdiction over the place for tax payment with supporting documents attached, by not later than the deadline for the final return under Article 110 (1);
7. Where assets are real estate located in the designated area under Article 104-2 (2);
8. Where assets are land for non-business use under Article 104-3;
9. Other cases prescribed by Presidential Decree, taking into account types of the relevant assets, the holding period, the number of assets held, a scale and a method of transactions, etc.
(3) In applying paragraph (1) and the subparagraphs of paragraph (2), where a resident transfers assets under the subparagraphs of Article 94 (1) and falls under any of the following, such value shall be deemed the actual transaction value at the time of transfer of the relevant assets: <Amended by Act No. 11146, Jan. 1, 2012>
1. Where assets are transferred to a related person (including a foreign corporation; hereafter referred to as "related person" in this paragraph) under Article 52 of the Corporate Tax Acts, and there is the amount treated as a bonus, dividend, etc. of the relevant resident pursuant to Article 67 of the same Act, the market price under Article 52 of the same Act;
2. Where assets are transferred to a person, other than a related person, at the price higher than the market price, and there is the amount deemed the value of donated assets of the relevant resident pursuant to Article 35 of the Inheritance Tax and Gift Tax Act, the amount after deducting the value of donated assets from such transfer value.
(4) In applying paragraph (2) 4, the standard market price may be applied to assets, as prescribed by Presidential Decree, where such assets are transferred within one year from the acquisition thereof due to extenuating circumstances, such as expropriation and purchasing on agreement, etc. under the Act on Acquisition of and Compensation for Land, etc. for Public Works or other Acts.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 97 (Calculation of Necessary Expenses for Capital Gains)  
(1) Necessary expenses to be deducted from the transfer value when calculating gains on transfer of a resident shall be as follows:
1. Acquisition value:
(a) The actual transaction value for the acquisition of assets under subparagraphs of Article 94 (1): Provided, That in cases falling under the main sentence of Article 96 (2), the standard market price at the time of the acquisition of such assets;
(b) In cases of the main sentence of item (a), if the actual transaction value at the time of the acquisition is unascertainable, the reward value for dealing, the appraisal value or the conversion 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 by Act No. 10408, Dec. 27, 2010>
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 the main sentence of paragraph (1) 1 (a), the relevant actual transaction value;
(b) Where the actual transaction value at the time of acquisition is calculated based on the conversion value pursuant to paragraph (1) 1 (b) 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 of the amended Income Tax Act (Act No. 4803), is based on the total of the actual transaction value as at the time of the acquisition and the amount obtained 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 transaction value;
2. Necessary expenses in other cases shall be the amount obtained by adding the amount of each asset prescribed by Presidential Decree to the amount under the proviso to paragraph (1) 1 (a), item (b) of the same subparagraph (excluding cases where subparagraph 1 (b) applies), paragraph (7) (excluding cases where subparagraph 1 (c) is applicable) or Article 114 (7) (excluding cases where subparagraph 1 (b) is applicable); provided,, if the acquisition value becomes the conversion value in accordance with Article 1 (2) (b), 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 conversion value under paragraph (1) 1 (b) 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 obtained by deducting such cost from the amount under paragraph (1) shall be the acquisition value thereof. <Amended by Act No. 10408, Dec. 27, 2010>
(4) Where a resident calculates gains on transfer of assets pursuant to Article 94 (1) 1 donated by his or her spouse (including cases where a marriage relationship terminates as at the time of transfer, but excluding cases where the marriage relationship terminates due to death; hereafter the same shall apply in this paragraph), lineal ascendant or descendant, or other assets prescribed by Presidential Decree within five years retroactively to the date of transfer, necessary expenses to be deducted from the gains on transfer shall be calculated under paragraph (2) except for cases where assets, which were donated two years retroactively from the date of public announcement of business authorization, purchased in consultation or expropriated in accordance with the Act on Acquisition of and Compensation for Land, etc. for Public Works or other Acts, but the acquisition value shall be the amount falling under any item of paragraph (1) 1 as at the time of the acquisition by such spouse, lineal ascendant or descendant. In such cases, amounts equivalent to gift tax paid or to be paid by a resident on the assets donated shall be included in necessary expenses, notwithstanding paragraph (2). <Amended by Act No. 10408, Dec. 27, 2010>
(5) Matters necessary for the calculation of necessary expenses, such as the scope of the actual transaction value necessary for the acquisition and the calculation of the amount equivalent to gift tax, etc. shall be prescribed by Presidential Decree.
(6) The number of years prescribed in paragraph (4) shall be in accordance with the period of ownership entered on the register.
(7) In applying the main sentence of paragraph (1) 1 (a), where a resident who has transferred assets pursuant to Article 94 (1) 1 and 2 has confirmed the actual transaction value according to the method prescribed by Presidential Decree at the time of the acquisition of such assets, it shall be deemed the actual transaction value at the time of the acquisition by such resident: Provided, That this shall not apply to cases where any of the following cases arises:
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 transfer value.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 99 (Computation of Standard Market Price)  
(1) The standard market price pursuant to Article 96 (2), the proviso to Article 97 (1) 1 (a), Articles 100 and 114 (7) shall be as follows:
1. Land or buildings under Article 94 (1) 1:
(a) Land:
(b) Buildings:
(c) Officetel and commercial buildings:
(d) House:
2. Real property rights under Article 94 (1) 2:
(a) Rights to acquire real estate:
(b) Superficies, right to lease on a deposit basis and registered leasehold interest on real property:
3. Stocks, etc. under Article 94 (1) 3 (a) [in cases of stocks, etc. of a KOSDAQ listed corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "KOSDAQ listed corporation"), only applicable to stocks, etc. prescribed by Presidential Decree]:
4. Stocks, etc. not applicable to subparagraph 3 of the stocks, etc. of a KOSDAQ listed corporation and those under Article 94 (1) 3 (b):
5. Preemptive rights to new stocks under Article 94 (1) 3:
6. Other assets under Article 94 (1) 4:
The officially assessed individual land price under the Public Notice of Values and Appraisal of Real Estate Act (hereinafter referred to as "officially assessed individual land price"): Provided, That the value of land which has no officially assessed individual land price shall be appraised by the head of a tax office having jurisdiction over the place for tax payment, according to the method prescribed by Presidential Decree, taking into account the officially assessed individual land price of similar land in the vicinity, and in cases of an area prescribed by Presidential Decree, where the price of land rises sharply, the price of land shall be appraised by the multiple method;
The value calculated and announced publicly once or more 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));
With regard to officetels and commercial buildings (including land annexed thereto) prescribed by Presidential Decree in consideration of the use, area, number, etc. of partitioned units of a building, where a building is owned as partitioned by unit and land annexed to a building is held in common, the value of land and buildings computed and announced officially en bloc once or more per year by the Commissioner of the National Tax Service taking into account the type, size, transaction status, location, etc. of buildings;
Individual house prices and multi-unit house prices under the Public Notice of Values and Appraisal of Real Estate Act: Provided, That in cases of multi-unit house prices, where multi-unit house prices are determined and announced officially by the Commissioner of the National Tax Service pursuant to the proviso to Article 17 (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 a tax office having jurisdiction over the place for tax 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;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred asset;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the remaining term, nature, details, transaction situation, etc. of the rights;
The value appraised by applying Article 63 (1) 1 (a) or (b) of the Inheritance Tax and Gift Tax Act mutatis mutandis. In such cases, "two months before or after the base date of appraisal" in the same item shall be construed as "one month before the date of transfer date or acquisition";
The value appraised by applying Article 63 (1) 1 (c) of the Inheritance Tax and Gift Tax Act mutatis mutandis. In such cases, the basic period of appraisal and the appraised value shall be prescribed by Presidential Decree, however, where the standard market price at the time of the acquisition cannot be confirmed due to losing a book, etc., the face value shall be the standard market price at the time of acquisition;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets.
(2) "Multiple method" in the proviso to paragraph (1) 1 (a) means a method for appraisal according to the amount calculated by multiplying the officially assessed individual land price at the time of transfer or acquisition, by multiples prescribed by Presidential Decree.
(3) Matters necessary for the calculation of the standard market prices under the following subparagraphs shall be prescribed by Presidential Decree:
1. Where the standard market price at the time of transfer and the standard market price at the time of acquisition calculated pursuant to paragraph (1) are the same, the standard market price at the time of acquisition;
2. The standard market price at the time of acquisition of land and a house acquired before the officially assessed individual land prices, individual house prices or multi-unit house prices are publicly notified or announced pursuant to the Public Notice of Values and Appraisal of Real Estate Act;
3. The standard market price at the time of acquisition of a building acquired before the standard market price under paragraph (1) 1 (b) is publicly announced.
(4) When the Commissioner of the National Tax Service has assessed a standard market price under paragraph (1) 1 (c), he or she shall, before he or she officially makes an announcement thereof, publicly notify them according to the methods prescribed by Ministerial Decree of Strategy and Finance, such as a notice through the Internet, etc. and hear opinions of the owners or other interested persons for not less than 20 days.
(5) When the Commissioner of the National Tax Service receives 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 standard market prices, the period for advancing opinions, etc.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 99 (Computation of Standard Market Price)  
(1) The standard market price pursuant to Article 96 (2), the proviso to Article 97 (1) 1 (a), Articles 100 and 114 (7) shall be as follows:
1. Land or buildings under Article 94 (1) 1:
(a) Land:
(b) Buildings:
(c) Officetel and commercial buildings:
(d) House:
2. Real property rights under Article 94 (1) 2:
(a) Rights to acquire real estate:
(b) Superficies, right to lease on a deposit basis and registered leasehold interest on real property:
3. Stocks, etc. under Article 94 (1) 3 (a) [in cases of stocks, etc. of a KOSDAQ listed corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "KOSDAQ listed corporation"), only applicable to stocks, etc. prescribed by Presidential Decree]:
4. Stocks, etc. not applicable to subparagraph 3 of the stocks, etc. of a KOSDAQ listed corporation and those under Article 94 (1) 3 (b):
5. Preemptive rights to new stocks under Article 94 (1) 3:
6. Other assets under Article 94 (1) 4:
The officially assessed individual land price under the Public Notice of Values and Appraisal of Real Estate Act (hereinafter referred to as "officially assessed individual land price"): Provided, That the value of land which has no officially assessed individual land price shall be appraised by the head of a tax office having jurisdiction over the place for tax payment, according to the method prescribed by Presidential Decree, taking into account the officially assessed individual land price of similar land in the vicinity, and in cases of an area prescribed by Presidential Decree, where the price of land rises sharply, the price of land shall be appraised by the multiple method;
The value calculated and announced publicly once or more 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));
With regard to officetels and commercial buildings (including land annexed thereto) prescribed by Presidential Decree in consideration of the use, area, number, etc. of partitioned units of a building, where a building is owned as partitioned by unit and land annexed to a building is held in common, the value of land and buildings computed and announced officially en bloc once or more per year by the Commissioner of the National Tax Service taking into account the type, size, transaction status, location, etc. of buildings;
Individual house prices and multi-unit house prices under the Public Notice of Values and Appraisal of Real Estate Act: Provided, That in cases of multi-unit house prices, where multi-unit house prices are determined and announced officially by the Commissioner of the National Tax Service pursuant to the proviso to Article 17 (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 a tax office having jurisdiction over the place for tax 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;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred asset;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the remaining term, nature, details, transaction situation, etc. of the rights;
The value appraised by applying Article 63 (1) 1 (a) or (b) of the Inheritance Tax and Gift Tax Act mutatis mutandis. In such cases, "two months before or after the base date of appraisal" in the same item shall be construed as "one month before the date of transfer date or acquisition";
The value appraised by applying Article 63 (1) 1 (c) of the Inheritance Tax and Gift Tax Act mutatis mutandis. In such cases, the basic period of appraisal and the appraised value shall be prescribed by Presidential Decree, however, where the standard market price at the time of the acquisition cannot be confirmed due to losing a book, etc., the face value shall be the standard market price at the time of acquisition;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets;
The value appraised by the method prescribed by Presidential Decree, taking into consideration the kind, scale, transaction situation, etc. of the transferred assets.
(2) "Multiple method" in the proviso to paragraph (1) 1 (a) means a method for appraisal according to the amount calculated by multiplying the officially assessed individual land price at the time of transfer or acquisition, by multiples prescribed by Presidential Decree.
(3) Matters necessary for the calculation of the standard market prices under the following subparagraphs shall be prescribed by Presidential Decree:
1. Where the standard market price at the time of transfer and the standard market price at the time of acquisition calculated pursuant to paragraph (1) are the same, the standard market price at the time of acquisition;
2. The standard market price at the time of acquisition of land and a house acquired before the officially assessed individual land prices, individual house prices or multi-unit house prices are publicly notified or announced pursuant to the Public Notice of Values and Appraisal of Real Estate Act;
3. The standard market price at the time of acquisition of a building acquired before the standard market price under paragraph (1) 1 (b) is publicly announced.
(4) When the Commissioner of the National Tax Service has assessed a standard market price under paragraph (1) 1 (c), he or she shall, before he or she officially makes an announcement thereof, publicly notify them according to the methods prescribed by Ministerial Decree of Strategy and Finance, such as a notice through the Internet, etc. and hear opinions of the owners or other interested persons for not less than 20 days.
(5) When the Commissioner of the National Tax Service receives 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 standard market prices, the period for advancing opinions, etc.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 99-2 (Application for Reassessment and Public Notification of Standard Market Price)  
(1) Any owner or any other interested person who has an objection to a publicly notified standard market price pursuant to Article 99 (1) 1 (c) may file in writing an application for the reassessment of the standard market price and pubic notification thereof with the Commissioner of the National Tax Service within 30 days from the date of public notification of the standard market price.
(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 standard market price pursuant to Article 99 (1) 1 (c).
(3) Where the Commissioner of the National Tax Service has discovered that the standard market price 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 by Act No. 9897, 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 (including the value pursuant to Article 96 (3), and where the reward value for trading or the appraised value applies pursuant to Article 114 (7), including such reward value for trading, appraised value, etc.), the acquisition value shall also be based on the actual transaction value (including the value pursuant to Article 97 (7), and where the reward value for trading, the appraised value or the conversion value applies pursuant to Article 114 (7), including such reward value for trading, appraised value, conversion value, etc.) and, if the acquisition value is based on the standard market price, the acquisition value shall also be based on the standard market price.
(2) In applying paragraph (1), where the transfer value or the acquisition value is assessed, based on the actual transaction value, 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 standard market prices, 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) Matters necessary for the calculation of gains on transfer shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11146, Jan. 1, 2012>
(2) Where a resident has donated assets to a related person prescribed in paragraph (1) (excluding cases of a spouse, lineal ascendants or descendants governed by Article 97 (4)) and then a person to whom such assets have been donated transfers such assets on to another person within five years from the date of such donation, and the amount of tax under subparagraph 1 is less than the tax amount under subparagraph 2, the donor shall be deemed to have transferred such assets directly: Provided, That this shall not apply where the capital gains substantially belongs to the relevant donee: <Amended by Act No. 11146, Jan. 1, 2012>
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 (6) shall apply mutatis mutandis to the calculation of the number of years pursuant to paragraph (2).
(5) The scope of related persons under paragraph (1), and other matters necessary for the calculation by wrongful acts shall be prescribed by Presidential Decree. <Amended by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, 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 by each type of income as follows. In such cases, a loss which occurs in calculating the amount of income shall not be included in income under the other subparagraphs:
1. Income under Article 94 (1) 1, 2 and 4;
2. Income under Article 94 (1) 3.
(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 by Act No. 9897, 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 any capital gains, 2.5 million won a year per source of income under the following subparagraphs shall be deducted respectively from the amount of capital gains in the relevant taxable period:
1. Income under Article 94 (1) 1, 2 and 4: Provided, That 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.
(2) In applying paragraph (1), where the amount of income reduced or exempted under this Act, the Restriction of Special Taxation Act 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 by Act No. 9897, Dec. 31, 2009]
Section 6 Calculation of Tax Amount of Capital Gains
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 Article 104 (Tax Rates of Capital Gains)  
(1) For capital gains tax on a resident, the amount of tax thereof shall be calculated (hereinafter referred to as "calculated tax on capital gains") by applying the following tax rates to the tax base of capital gains in the relevant taxable period. In such cases, if a single property is subject to two or more tax rates among those under the following subparagraphs, the highest rate among them shall be applied: <Amended by Act No. 10408, Dec. 27, 2010>
1. Assets under Article 94 (1) 1, 2 and 4: Tax rate under Article 55 (1);
2. Assets under Article 94 (1) 1 and 2, the holding period of which is not less than one year, but less than two years: 40/100 of the tax base of capital gains;
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;
4. Three or more houses for one household prescribed by Presidential Decree (including land annexed thereto; hereafter the same shall apply in this Article): 60/100 of the tax base of capital gains;
5. Where one household prescribed by Presidential Decree holds houses and occupation rights of association members under Article 89 (2), where the number of houses and occupation rights is not less than three, such houses (excluding cases prescribed by Presidential Decree): 60/100 of the tax base of capital gains;
6. Two houses for one household prescribed by Presidential Decree: 50/100 of the tax base of capital gains;
7. Where one household prescribed by Presidential Decree holds respectively one house and one occupation right as an association member under Article 89 (2), such house (excluding cases prescribed by Presidential Decree): 50/100 of the tax base of capital gains;
8. Land for non-business use under Article 104-3: 60/100 of the tax base of capital gains;
9. Assets prescribed by Presidential Decree in consideration of the current status of possession of land for non-business use under Article 104-3 among the assets under Article 94 (1) 4 (c): 60/100 of the tax base of capital gains;
10. Unregistered assets transferred: 70/100 of the tax base of capital gains;
11. Assets under Article 94 (1) 3:
(a) Stocks, etc. of a corporation, other than small and medium enterprises prescribed by Presidential Decree (hereafter referred to as "small and medium enterprises" in this Chapter), which have been held for less than one year by majority stockholders: 30/100 of the tax base of capital gains;
(b) Stocks, etc. of small and medium enterprises: 10/100 of the tax base of capital gains;
(c) Other stocks, etc.: 20/100 of the tax base of capital gains.
(2) The holding period under paragraph (1) 2, 3 and 11 (a) shall be from the date of acquisition to the transfer date of the relevant assets: Provided, That the respective given dates shall be the date of acquisition of the relevant assets if the relevant assets fall under any of the following subparagraphs:
1. In cases of inherited assets, the date the predecessor acquired such assets;
2. In cases of assets falling under Article 97 (4), 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.
(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 obtaining registration concerning the acquisition thereof: Provided, That assets prescribed by Presidential Decree shall be excluded.
(4) Where real estate falling under any of the following subparagraphs is transferred by no later than December 31, 2013, tax rates added by 10/100 to tax rates under Article 55 (1) shall apply to such real estate, in lieu of tax rates under paragraph (1) 1, when paragraph (6) applies: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. Three or more houses for one household (including land annexed thereto; hereafter the same shall apply in this paragraph) under paragraph (1) 4, as real estate located in a designated area under Article 104-2 (2);
2. Where one household under paragraph (1) 5 holds houses located in a designated area under Article 104-2 (2), and occupation rights as an association member and the number of houses and occupation rights is not less than three, the relevant houses;
3. Land for non-business use under Article 104-3 located in a designated area under Article 104-2 (2);
4. Other real estate prescribed by Presidential Decree, necessary for stabilization of the price of real estate, as the price of real estate increases or is likely to increase excessively.
(5) Other matters necessary for the calculation of the calculated tax on capital gains shall be prescribed by Presidential Decree.
(6) Tax rates under paragraph (1) 1 (tax rates under paragraph (1) 2 or 3 in cases of assets held for less than two years), instead of tax rates prescribed in paragraph (1) 4 through 9, shall apply to income generated from transfer of assets under paragraph (1) 4 through 9 by no later than December 31, 2013. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, 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 Strategy and Finance may designate such area as a designated area according to the standard and methods prescribed by Presidential Decree.
(2) "Real estate located in a designated area" in Articles 96 (2) 7 and 104 (4) 1 through 3 means the real estate prescribed by Presidential Decree among the real estate located in a designated area under paragraph (1).
(3) The Deliberative Committee on Stabilization of Real Estate Prices shall be established in the Ministry of Strategy and Finance to deliberate on designation and cancellation of a designated area under paragraph (1) and other necessary matters.
(4) Matters necessary for the standard and methods of the cancellation of a designated area under paragraph (1) and for the members and operation of the Deliberative Committee on Stabilization of Real Estate Prices shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 96 (2) 8 and 104 (1) 8 means any of the following lands during the period prescribed by Presidential Decree among the period of owning the relevant land: <Amended by Act. No. 9763, Jun 9, 2009; Act No. 10221, Mar. 31, 2010; Act No. 11611, Jan. 1, 2013>
1. Paddy fields, ordinary fields, and orchards (hereafter referred to as "farmland" in this Article), which fall under any of the following:
(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, That 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 paragraph) 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 the Eup/Myeon area located in a Special Self-Governing City; hereafter the same shall apply in this paragraph), a Special Self-Governing Province (excluding Eup/Myeon area of 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) and a Si area (excluding the Eup/Myeon area 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, That 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, That forest land falling under any of the following shall be excluded:
(a) A seed collection forest and an experimentation forest designated pursuant to the Creation and Management of Forest Resources Act, a forest protection area under Article 7 of the Forest Protection 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. A site for pasturage which falls under any of the following: Provided, That 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 a 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 cases 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. A building for residence used for the purposes, such as rest, summering, recreation, etc. not for the usual residence (hereafter referred to as "villa" in this subparagraph) and land annexed thereto: Provided, That this shall not apply to agricultural and fishing village houses located in a Eup/Myeon under Article 3 (3) and (4) of the Local Autonomy Act and falling under the scope and standard prescribed by Presidential Decree and land annexed thereto, and where the boundary of land annexed to a villa is unclear, land which is ten times the floor area of such building shall be regarded as land annexed;
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 by Act No. 9897, 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 transfers assets prescribed in each subparagraph of Article 94 (1) shall file a return on the tax base of capital gains calculated pursuant to Article 92 (2) to the head of a tax office having jurisdiction over the place for tax payment in the period according to the following classification, as prescribed by Presidential Decree:
1. Where he or she transfers assets under Article 94 (1) 1, 2, and 4, two months from the last day of the month to which the transfer date belongs: Provided, That where he or she settles the price before he or she obtains permission for a contract for sale and purchase of land when transferring land in the area subject to permission for a contract for sale and purchase of land under Article 117 (1) of the National Land Planning and Utilization Act, two months from the last day of a month to which the date of such permission belongs;
2. Where he or she transfers assets under the items of Article 94 (1) 3, two months from the last day of a quarter to which the date of such transfer belongs.
(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 by Act No. 9897, 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 Restriction of Special Taxation Act 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".
(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 by Act No. 9897, Dec. 31, 2009]
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 Article 107 (Calculation of Tax for Preliminary Return)  
(1) The tax payable for preliminary return shall be the amount calculated by applying the tax rate under Article 104 (1) to the amount obtained by making the special deduction for long-term holding and the capital gains basic deduction from gains on transfer.
(2) Where a preliminary return is filed twice or more on assets subject to progressive tax rates in the relevant taxable period, where a resident intends to file a return by including the amount of capital gains already returned, the amount calculated by the following formula shall be the calculated tax for a preliminary return to be filed after the second preliminary return:
The calculated tax for a preliminary return = [(tax base of capital gains already filed + tax base of capital gains filed after the second preliminary return) × tax rate under Article 104 (1) 1 and 11 (a)] - the calculated tax for a preliminary return already filed.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 108 Deleted. <by Act No. 9897, Dec. 31, 2009>  
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 Article 109 Deleted. <by Act No. 6051, 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 to the head of a tax office having jurisdiction over the place for tax payment from May 1 to 31 of the year following such taxable period (from May 1 to 31 of the year following the taxable period to which the date of permission for a contract for sale and purchase of land belongs, in cases falling under the proviso to Article 105 (1) 1) as prescribed by Presidential Decree.
(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, That this shall not apply to cases prescribed by Presidential Decree, where preliminary returns on assets subject to progressive tax rates are made twice or more 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 by Act No. 9897, 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 tax on capital gains 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.
(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 by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 112-2 (Payment of Capital Gains Tax in Kind)  
(1) Where a person has difficulty in paying in cash capital gains tax on income generated by transferring land, etc. to a person who carries out public works for public works to which the Act on Acquisition of and Compensation for Land, etc. for Public Works applies or by expropriating such land, etc. pursuant to other Acts, he or she may pay such capital gains tax with the bonds issued as the purchase price of the relevant land, etc.: Provided, That this shall not apply to cases prescribed by Presidential Decree.
(2) Matters necessary for the scope of payment in kind, the assessment of bonds subject to payment in kind and procedures for payment in kind under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 113 Deleted. <by Act No. 6051, Dec. 28, 1999>  
Section 9 Determination, Correction, Collection and Refund of Capital Gains
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 Article 114 (Determination, Correction and Notification of Tax Base and Tax 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 the amount of tax on capital gains for the relevant resident.
(2) Where there are any omissions or errors 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 the amount of tax 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 omissions or errors in the determination or correction after he or she determines or corrects the tax base and the amount of tax 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 the amount of tax on capital gains pursuant to paragraphs (1) through (3), he or she shall be based on the values pursuant to Articles 96 and 97.
(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 the amount of tax 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 the amount of tax 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, That 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 by Act No. 10580, Apr. 12, 2011; Act No. 11146, Jan. 1, 2012>
(6) Where a person files a preliminary return or a final return on the tax base or the amount of tax 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 the amount of tax 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 (referring to the acquisition value converted from the actual transaction value, the compensation value for sales and purchase or the appraised value by the method prescribed by Presidential Decree) or the standard market price, etc. as prescribed by Presidential Decree.
(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 the amount of tax on capital gains of any resident pursuant to paragraphs (1) through (7), he or she shall notify such resident of such determination or correction in writing, as prescribed by Presidential Decree.
(9) Where the head of a tax office or the commissioner of a regional tax office having jurisdiction over the place for tax payment needs to ascertain whether there are any omissions or errors in the details of a return on gains on transfer of stocks, etc. pursuant to Article 94 (1) 3 and 4 and the appropriateness of details of sales and purchase when applying paragraphs (1) through (3), notwithstanding the provisions of other Acts, such as the Act on Real Name Financial Transactions and Guarantee of Secrecy, etc. he or she may make inquiries of any investment trader or investment broker and any corporation that issued certificates of stocks, etc. or investment certificates under the Financial Investment Services and Capital Markets Act about such matters, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by each date of transaction and by each type of item, as prescribed by Presidential Decree, and maintain documentary evidence therefor, etc: Provided That, if a 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 and records 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 pursuant to paragraph (1), the amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax 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, That where there is no calculated tax, the 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 Wholly Amended by Act No. 10408, Dec. 27, 2010]
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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 by Act No. 11611, 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 the amount of tax on capital gains tax pursuant to Article 114, if the aggregate of the calculated tax on capital gains under subparagraph 3 of Article 93 exceeds the aggregate of the following amounts, he or she shall collect such excess tax (hereinafter referred to as "additional tax payable") from the relevant resident within 30 days from the date of notification:
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) 4.
[This Article Wholly Amended by Act No. 9897, 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 subparagraph 3 of Article 93, 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, penalty taxes and expenses for disposition on default.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 118 (Provisions Applicable Mutatis Mutandis)  
Section 10 Capital Gains Tax on Transfer of Overseas Assets
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 Article 118-2 (Scope of Capital Gains)  
Capital gains from the transfer of overseas assets of a resident (only applicable to those who have had a domicile or a place of residence in the Republic of Korea for not less than five consecutive years up to the date of transfer of the relevant assets) shall be any of the following income generated from the transfer of overseas assets in the relevant taxable period: <Amended by Act No. 10408, Dec. 27, 2010>
1. Income generated from the transfer of buildings or land;
2. Income generated from the transfer of real property rights prescribed by Presidential Decree;
3. Income generated from the transfer of stocks, etc. prescribed by Presidential Decree;
4. Income generated from the transfer of other assets prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 118-3 (Value of Transfer)  
(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, That 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 by Act No. 9897, Dec. 31, 2009]
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 Article 118-4 (Calculation of Necessary Expenses of Capital Gains)  
(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:
2. Capital expenditure prescribed by Presidential Decree;
3. Transfer cost prescribed by Presidential Decree.
The actual transaction value disbursed for the acquisition of the relevant assets: Provided, That when it is impossible 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) 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 by Act No. 9897, Dec. 31, 2009]
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 Article 118-5 (Tax Rate of Capital Gains)  
(1) The amount of income tax on capital gains generated from overseas assets shall be calculated by applying the following tax rates to the tax base of capital gains generated in the relevant taxable period. In such cases, when two or more tax rates under the following subparagraphs apply to one asset, the highest tax rate shall apply:
1. Assets under subparagraphs 1, 2, and 4 of Article 118-2: Tax rates under Article 55 (1);
2. Assets under subparagraph 3 of Article 118-2:
(a) Stocks, etc. of small and medium enterprises: 10/100 of the tax base of capital gains;
(b) Other stocks, etc.: 20/100 of the tax base of capital gains.
(2) Article 104 (4) shall apply mutatis mutandis to the adjustment of tax rates under paragraph (1).
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 118-6 (Foreign Tax Credit)  
(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 "tax on capital gains from transfer of overseas assets" in this paragraph), the taxpayer may choose to apply one of the following methods:
1. Crediting capital gains tax on overseas assets against capital gains tax in the relevant taxable period within the limits of the amount calculated by multiplying capital gains tax for the relevant taxable period calculated pursuant to Article 118-5 by the ratio of the amount of capital gains tax on overseas assets to the amount of capital gains in such taxable period;
2. Including capital gains tax on overseas assets paid or payable on capital gains from transfer of overseas assets in necessary expenses in calculating the amount of capital gains 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 by Act No. 9897, Dec. 31, 2009]
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 Article 118-7 (Basic Deduction for Capital Gains)  
(1) For a resident with capital gains from the transfer of overseas assets, 2.5 million won a year shall be deducted from capital gains in the relevant taxable period by each of the following income, respectively:
1. Income under subparagraphs 1, 2 and 4 of Article 118-2;
2. Income under subparagraph 3 of Article 118-2.
(2) Where any income is reduced or exempted under this Act, the Restriction of Special Taxation Act 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 by Act No. 9897, Dec. 31, 2009]
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 Article 118-8 (Provisions Applicable Mutatis Mutandis)  
Articles 89, 90, 92, 93, 95, 97 (3), 98, 100, 101, 105 through 107 (excluding the stocks, etc. under subparagraph 3 of Article 118-2, among the overseas assets), 110 through 112, and 114 through 118 shall apply mutatis mutandis to imposition of capital gains tax for the transfer of overseas assets: Provided, That the amount of special deduction for long-term holding under Article 95 shall not be deducted. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 10900, Jul. 25, 2011; Act No. 10907, Jul. 25, 2011>
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 by Act No. 10408, Dec. 27, 2010; Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
1. Interest prescribed in Article 16 (1) (excluding income under subparagraph 7 of the same paragraph), which is income defined as follows: Provided, That 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) 3), 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. Dividend income prescribed in each subparagraph of Article 17 (1) (excluding subparagraph 6) received from a domestic corporation, an organization deemed a corporation, or other domestic sources, and the amount treated as dividends pursuant to Articles 9 and 14 of the Adjustment of International Taxes Act;
3. 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, That capital gains under subparagraph 9 shall be excluded;
4. 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. Income generated from business conducted by a nonresident (including income taxable as domestic source business income according to tax treaties), prescribed by Presidential Decree: Provided, That income falling under subparagraph 6 shall be excluded;
6. Income generated from providing personal services prescribed by Presidential Decree in the Republic of Korea. In such cases, where any person receiving such personal services bears expenses prescribed by Presidential Decree, such as an air fare, in connection with personal services, it means the amount excluding such expenses;
7. Income received in consideration of labor provided in the Republic of Korea and labor prescribed by Presidential Decree;
8. Retirement income received in consideration of labor provided in the Republic of Korea;
8-2. Pension income received in the Republic of Korea pursuant to each subparagraph of Article 20-3 (1);
9. Income from transfer of assets or rights falling under any of the following: Provided, That 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 and 2, and subparagraph 4 (a) and (b) of the same paragraph;
(b) Stocks or investment shares not listed on the securities market (hereafter referred to as "real estate stocks, etc." in this Article) of a corporation whose total assets under Article 94 (1) 1 and 2 is 50/100 or more of the total assets of such corporation as of the commencement date of the business year in which the date of transfer falls, among the stocks and investment shares (including certificates of deposit and preemptive rights to new stocks issued on the basis of stocks and investment shares; hereafter the same shall apply in this Chapter) of a domestic corporation;
10. Income generated from transfer of the consideration, right, etc., where rights, assets or information (hereafter referred to as "rights, etc." in this subparagraph) falling under any of the following are used in the Republic of Korea, or the consideration for the rights, etc. is paid in the Republic of Korea; Provided, That where a double taxation avoidance agreement on income prescribes whether such income is a domestic source income based on the place of its use, the consideration for the rights, etc. used overseas shall not be deemed a domestic source income, even if it is paid in the Republic of Korea. In such cases, rights required to be registered (hereafter referred to as "patent right, etc." in this subparagraph) to exercise rights, such as the patent right, utility model right, trademark right, and design right, shall be deemed to have been used in the Republic of Korea, regardless of whether the patent right, etc. have been registered in the Republic of Korea in cases where the relevant patent right, etc. were registered outside the Republic of Korea, and have been used for manufacture, sale, etc. in the Republic of Korea:
(a) The copyright of any scientific or artistic work (including films of motion pictures), patent right, trademark right, designs, models or drawings, or 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;
11. Income prescribed by Presidential Decree, generated from the transfer of stocks, investment shares (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) falling under any of the following:
(a) Stocks, investment shares, or other securities issued by a domestic corporation;
(b) Stocks or investment shares issued by a foreign corporation (only applicable to those listed on the securities market) and other securities issued by a domestic place of business of a foreign corporation;
12. Income falling under any of the following, other than income under subparagraphs 1 through 11:
(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, That the prize money and supplementary prize prescribed in subparagraph 5 (c) 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 investment shares of a domestic corporation due to capital transaction prescribed by Presidential Decree, which are possessed 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) Other than the provisions under items (a) through (i), income (where the amount received by redemption of foreign currency bonds issued by the State or financial institutions established 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 by Act No. 9897, Dec. 31, 2009]
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 Article 119-2 Deleted. <by Act No. 10408, Dec. 27, 2010>  
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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 by Act No. 11611, 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 a nonresident having no domestic place of business conducts business by employing a person prescribed by Presidential Decree in the Republic of Korea who is authorized to enter into any contract on his or her behalf and repeatedly exercises such authority, or a person similar thereto, he or she shall be deemed to have a domestic place of business at the seat of such person's place of business (a domicile where there is no place of business, and the place of residence where there is no domicile).
(4) The following places shall not be included in domestic places of business prescribed in paragraph (1):
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 for any advertisement, publicity, collection and furnishing of information, market survey, and other activities in the preliminary and auxiliary nature for carrying on his or her business;
4. A fixed place used by a nonresident only for having another person process his or her assets.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11611, Jan. 1, 2013>
(2) For a nonresident having a domestic place of business and a nonresident with 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 income under subparagraphs 8 and 9 of Article 119, income tax shall be classified and imposed in the same method as that for a resident: Provided, That 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 income under subparagraph 9 of Article 119. <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
(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 by Act No. 11611, 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 by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
(5) In cases of imposing taxes pursuant to paragraphs (3) and (4) where a nonresident with 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 by Act No. 11611, Jan. 1, 2013>
(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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
Section 2 Global Taxation on Nonresident
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 Article 122 (Calculation of Tax Base and Tax in Cases of Global Taxation on Nonresident)  
The provisions on the calculation of the tax base and the amount of tax on income of a resident in this Act shall apply mutatis mutandis to the calculation of the tax base and the amount of tax on income of a nonresident prescribed in Article 121 (2) or (5): Provided, That deduction for a person, other than the nonresident himself or herself, among personal deduction under Article 51-2 (2), and special deduction under Article 52 shall not apply. <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 123 Deleted. <by Act No. 11611, Jan. 1, 2013>  
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 Article 124 (Return and Payment by Nonresident)  
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, That 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 by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 125 (Determination and Collection of Tax Base and Tax for Nonresident)  
The provisions on the determination, correction, collection and refund of income tax for a resident in this Act shall apply mutatis mutandis to the determination, correction, 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 by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
Section 3 Separate Taxation on Nonresident
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 Article 126 (Calculation of Tax Base and Tax in Cases of Separate Taxation on Nonresident)  
(1) The tax base for the domestic source income of a nonresident under Article 121 (3) and (4) (excluding subparagraphs 7 and 8-2 of Article 119) shall be calculated based on the amount of each corresponding domestic source income received by the nonresident: Provided, That 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 by Act No. 11611, Jan. 1, 2013>
1. As for domestic source income prescribed in 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 the domestic source income prescribed in subparagraph 12 of Article 119, the amount calculated by deducting the amount prescribed by Presidential Decree from the amount of such income.
(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 59-2 (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 by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
(4) With respect to the withholding tax under Articles 156 and 156-3 through 156-6, Article 85 (3) and subparagraph 1 of Article 86 shall apply mutatis mutandis. <Added by Act No. 11611, Jan. 1, 2013>
(5) With respect to the calculation, report and payment, determination/rectification, collection and refund of the tax base and tax on the domestic source income pursuant to subparagraphs 7 and 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 under this Act concerning the calculation, etc. of the tax base and the amount of tax on the income of a resident shall apply mutatis mutandis thereto: Provided, That the deduction of those persons other than nonresidents among the personal deductions under Article 51-2 (2) and the additional deduction under Article 52 shall not be made, and Article 73 (1) shall apply mutatis mutandis to the nonresident who has paid income tax by deducting withholding tax under Article 156-5. <Added by Act No. 11611, Jan. 1, 2013>
(6) Notwithstanding paragraph (1), where domestic source income under subparagraph 11 of Article 119 of a nonresident with no domestic place of business meets 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 by Act No. 11611, Jan. 1, s2013>
1. Transactions between a nonresident with no domestic place of business and a related nonresident (including a foreign corporation) prescribed by Presidential Decree;
2. Where the price of transactions under subparagraph 1 is less than the arm's length price, which is prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
[Title Amended by Act No. 11611, Jan. 1, 2013]
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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 investment shares 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 investment shares), 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 stocks, investment shares, or other securities (hereafter referred to as "stocks, etc." in this paragraph) to another nonresident or a 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) 5 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, That 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.
(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 by Act No. 9897, Dec. 31, 2009]
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 income (limited to persons prescribed by Presidential Decree, such as business operators, in cases of a person who pays income defined 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 by Act No. 9897, Dec. 31, 2009; Act No. 10408, Dec. 27, 2010>
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, That any of 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 foreign corporation (excluding a domestic branch or a domestic place of business) or a nonresident abroad: Provided, That income appropriated for necessary expenses or losses in calculating the amount of domestic source income of a domestic place of business of a nonresident pursuant to Article 120 (1) and (2) and of a domestic place of business of a foreign corporation pursuant to Article 94 (1) and (2) of the Corporate Tax Act shall be excluded;
5. Pension income;
6. Other income: Provided, That any of 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 or 24;
7. Retirement income: Provided, That 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.
(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 operators, in cases of income defined 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 by Act No. 9897, Dec. 31, 2009; Act No. 10408, 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 by Act No. 10408, Dec. 27, 2010>
(4) Where a trust business operator 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 operator and a person who pays income attributed to the relevant trust property. <Amended by Act No. 10408, Dec. 27, 2010>
(5) Where a foreign corporation pays income under paragraph (1) 1 and 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 by Act No. 9897, Dec. 31, 2009; Act No. 10408, Dec. 27, 2010>
(6) Where a business operator (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 operator shall withhold income tax for the service charges. <Amended by Act No. 9897, Dec. 31, 2009; Act No. 10408, Dec. 27, 2010>
(7) A person obliged to withhold taxes pursuant to paragraphs (1) through (6) shall be referred to as "withholding agent". <Amended by Act No. 10408, Dec. 27, 2010>
(8) Scope, etc. of the withholding agent and other necessary matters shall be prescribed by Presidential Decree. <Added by Act No. 11611, Jan. 1, 2013>
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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 by Act No. 10408, Dec. 27, 2010>
(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 arrive: <Amended by Act No. 10408, Dec. 27, 2010>
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 Articles 9 and 14 of the Adjustment of International Taxes Act;
3. Withholding taxes under Article 156-5 (1) and (2).
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 128-2 (Special Cases concerning Penalty Tax for Non-payment or Underpayment 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. did not pay or underpaid the tax amount which the State, etc. should withhold, within the designated period of time for payment thereof because he or she got a deduction from his or her income unjustly by inaccurately preparing a report on income deduction for wage and salary income pursuant to 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.
[This Article Added by Act No. 11146, Jan. 1, 2012]
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 Article 129 (Withholding Tax Rates)  
(1) When a withholding agent pays income pursuant to each subparagraph of Article 127 (1) and withholds income tax, the tax rate applicable (hereinafter referred to as "withholding tax rate") shall be based on the following classifications: <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
1. With regard to interest income, the tax rate prescribed as follows:
(a) With regard to interest and the discounted value of long-term bonds prescribed by Presidential Decree, where any resident who has continuously owned such long-term bonds for at least three years applies for separate taxation to the relevant financial institution, etc. or such payer, as prescribed by Presidential Decree, 30/100 of the interest and the discounted amount that has been accrued after three years passed from the date when the resident concerned purchased the long-term bonds;
(b) 25/100 of any profits accruing from a loan for non-business;
(c) The basic interest rate for excess refund from a place of work's 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 operators pursuant to Article 17 (1) 8;
(b) 14/100 of other dividend income;
3. 3/100 of any business income subject to withholding;
4. The basic tax rate for wage and salary income: Provided, That with regard to wage and salary income of a worker employed on a daily basis, 6/100;
5. The basic tax rate for the public pension income;
5-2. With respect to the pension income other than subparagraph 5, the tax rate in the following classification. In such cases, upon satisfying more than one requirement under the following at the same time, the lower tax rate shall apply:
(a) Tax rates in the following table according to the age of pension income earners;
Age(As of the date of receiving pension)Tax Rates
At least 55 years of age
Less than 70 years of age
At least 70 years of age
Less than 80 years of age		5/100
5/100
4/100
4/100
At least 80 years of age3/100
(b) With respect to the retirement income received in the form of pension pursuant to Article 20-3 (1) 2 (a), 3/100 of the pension income;
(c) With respect to the pension income to be received until death in the form of pension pursuant to the life-long pension agreement as prescribed by Presidential Decree, 4/100;
6. With regard to other income, the tax rate prescribed as follows: Provided, That this shall not apply to cases where subparagraph 8 applies;
(a) Where the amount of income falling under Article 14 (3) 7 (d) and (e) exceeds 300 million won, 30/100 of such excess;
(b) 15/100 of other income under Article 14 (3) 7 (b);
(c) 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.
(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 by Act No. 11611, Jan. 1, 2013>
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. 38/100 of any income for which the real name prescribed by Presidential Decree is not verified: Provided, That where Article 5 of the Act on Real Name Financial Transactions and Guarantee of Secrecy 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 by Act No. 11611, 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.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 10408, Dec. 27, 2010]
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 Article 132 Deleted. <by Act No. 10408, 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 Ministerial Decree of Strategy and Finance, 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, That 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 the end of March 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 by Act No. 10408, Dec. 27, 2010>
(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, That 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 by Act No. 9897, Dec. 31, 2009]
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 Article 133-2 (Special Cases concerning Withholding Tax on Bonds, etc.)  
(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 by Act No. 10408, Dec. 27, 2010; Act No. 11611, 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 by Act No. 9897, 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 by Act No. 10408, 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. <by Act No. 10408, 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 by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 10408, 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 by Act No. 10408, 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, That 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 by Act No. 10408, 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 by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 136 (Tax Withheld from Bonus, etc.)  
(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 by Act No. 9897, 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 in the following order:
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 by applying the basic tax rate to the global income tax base under subparagraph 1;
3. Income tax shall be the calculated global income tax under subparagraph 2 less tax credits, such as withholding taxes under Article 134 (1), foreign tax credit and tax credit for wage and salary income.
(2) If the aggregate of tax credits of withholding taxes under Article 134 (1), foreign tax credit and tax credit for wage and salary income for the relevant taxable period as prescribed by paragraph (1) 3, exceeds the calculated global income tax, such excess shall be refunded to the wage and salary income earner, as prescribed by Presidential Decree.
(3) When a withholding agent withholds income tax from an wage and salary income earner who fails to file a return under Article 140, by applying paragraph (1), he or she shall apply deduction for the wage and salary income earner himself or herself and the standard deduction only among basic deduction.
[This Article Wholly Amended by Act No. 10408, 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 by Act No. 10408, 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 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), a 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 by Act No. 10408, Dec. 27, 2010>
(2) Paragraph (1) shall apply mutatis mutandis to tax withholding of 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 by Act No. 9897, 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 by Act No. 10408, Dec. 27, 2010]
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 Article 140 (Report on Income Deduction by Wage and Salary Income Earner)  
(1) Where a wage and salary income earner intends to take deduction from global income 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 deduction (hereinafter referred to as "report on income deduction for wage and salary income") to a withholding agent before he or she receives wage and salary income for February of the year following the relevant taxable period (where he or she retired, before he or she receives wage and salary income for the month in which the date he or she retired falls), as prescribed by Presidential Decree. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
(2) A withholding agent at the principal place of work who has received a report on income deduction 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.
(3) Paragraphs (1) and (2) shall not apply to a worker employed on a daily basis.
(4) Deleted. <by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Articles 141 and 142 Deleted. <by Act No. 10408, 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 Ministerial Decree of Strategy and Finance, 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, That 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 last month of the quarter to which the date of payment of wage and salary income belongs (referring to the end of February of the following year in cases of wage and salary income paid in the fourth quarter).
(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 by Act No. 10408, 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 by Act No. 11611, 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 by Act No. 11611, 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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 143-3 Deleted. <by Act No. 6557, 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 remaining after deducting the income tax withheld and paid in the relevant taxable period from the global income tax, which is computed based on the tax base of global income, the amount calculated by making the basic reduction, additional reduction and standard reduction according to the return filed by such pension income earner pursuant to Article 143-6 from the amount of pension income in the relevant taxable period of a person who receives pension income. <Amended by Act No. 11611, Jan. 1, 2013>
(2) In cases of paragraph (1), if the income tax withheld and paid in the relevant taxable period exceeds the calculated global income tax, such excess shall be refunded to the relevant pension income earner, as prescribed by President Decree.
(3) Where a withholding agent withholds income tax pursuant to paragraph (1) from an pension income earner who fails to file an income tax return under Article 143-6, he or she shall apply the basic deduction for such pension income earner himself or herself and the standard deduction only.
(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 by Act No. 11611, Jan. 1, 2013>
(5) Deleted. <by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, 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 a withholding agent, a report on income deduction for pension income earner prescribed by Ministerial Decree of Strategy and Finance (hereinafter referred to as "report on income deduction for pension income earner") before receiving the first-time public pension income. <Added by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
(2) When any person who receives public pension income intends to take basic deduction and additional deduction for his or her spouse or dependents, he or she shall submit, to a withholding agent, a return on income deduction for pension income earner by December 31 of the relevant year, as prescribed by Presidential Decree: Provided, That where a person submits a report on income deduction for pension income earner in the relevant taxable period pursuant to paragraph (1) and there is no change in familial relationship of spouse or dependent qualifying for deduction, the taxpayer may choose not to submit a report on income deduction for pension income earner; where a pension income earner dies in the relevant taxable period, a successor shall submit such return by the end of the month following the month in which the date of death of the predecessor falls. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
(3) A withholding agent who receives a return on income deduction for pension income earner shall report the matters returned to the head of the competent tax office having jurisdiction over withholding tax, as prescribed by Presidential Decree.
(4) Deleted. <by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 143-7 (Issuance of Withholding Tax Receipts for Pension Income)  
A withholding agent who pays pension income shall issue a withholding tax receipt prescribed by Ministerial Decree of Strategy and Finance, stating the amount of such pension income and other necessary matters, to a pension income earner by the deadline classified as follows: Provided, That with regard to a person who dies in the middle of the relevant taxable period, a withholding agent shall issue a withholding tax receipt by the end of two months after the month in which the date of his or her death falls: <Amended by Act No. 11611, Jan. 1, 2013>
1. Public pension income: By the end of February of the year following the relevant taxable period in which the date of payment arrives;
2. Pension income under Article 20-3 (1) 2 and 3: At the time pension income is paid.
[This Article Wholly Amended by Act No. 10408, Dec. 27, 2010]
Sub-Section 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 Ministerial Decree of Strategy and Finance, stating the amount of such business income and other necessary matters, to a business income earner. <Amended by Act No. 10408, Dec. 27, 2010>
(2) Paragraph (1) shall apply mutatis mutandis to cases where a withholding agent pays service charges prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 144-2 (Year-end Tax Settlement of Business Income Tax Except for Final Return on Tax Base)  
(1) When a withholding agent who pays business income pursuant to Article 73 (1) 4 (hereinafter referred to as "business income for year-end tax settlement") pays business income for February of the year following the relevant taxable period (where he or she fails to pay business income for February by the end of February or there is no business income for February, it shall be the end of February; hereafter the same shall apply in this Article) or business income for the month in which a contract for transactions with the relevant business operator is cancelled, he or she shall calculate the global income tax based on the tax base of global income which is calculated by making the global income deduction according to the return filed by such business operator pursuant to Article 144-3 from the amount calculated by multiplying the amount of business income in the relevant taxable period by the rate prescribed by Presidential Decree, take a tax credit pursuant to this Act and the Restriction of Special Taxation Act, take the amount left and withhold taxes after deducting the income tax withheld and paid in the relevant taxable period therefrom. <Amended by Act No. 10408, Dec. 27, 2010>
(2) In cases of paragraph (1), where income tax to be collected exceeds the amount of business income payable (excluding cases where there is no business income payable for the following month), such excess shall be collected when business income of the following month is paid. <Amended by Act No. 10408, Dec. 27, 2010>
(3) In cases of paragraph (1), where the income tax withheld and paid in the relevant taxable period exceeds the amount calculated by making the tax deduction from the calculated relevant global income tax, such excess shall be refunded to the relevant business operator, as prescribed by Presidential Decree.
(4) Where a withholding agent deducts a withholding tax from a business operator who fails to file a return pursuant to Article 144-3 pursuant to paragraph (1), he or she shall apply deduction for such business operator himself or herself and the standard deduction only among basic deduction.
(5) 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 two or more 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 by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 144-3 (Report, etc. of Income Deduction for Business Income Earner who Makes Year-end Tax Settlement)  
Where the relevant business operator intends to take global income deduction when he or she makes year-end tax settlement pursuant to Article 144-2, he or she shall submit a report on income deduction of the business income earner who makes year-end tax settlement to a withholding agent, as prescribed by Presidential Decree, before he or she receives business income for February of the year following the relevant taxable period (where he or she cancels a contract with the withholding agent, it shall be before he or she receives business income for the month in which he or she cancels a contract). <Amended by Act No. 11611, Jan. 1, 2013>
[This Article Added by Act No. 9897, Dec. 31, 2009]
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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 Ministerial Decree of Strategy and Finance, stating the amount of such business income and other necessary matters, to the relevant business operator, by the end of the month following the month in which the date of year-end tax settlement falls. <Amended by Act No. 10408, Dec. 27, 2010>
[This Article Added by Act No. 9897, 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 by Act No. 10408, Dec. 27, 2010]
Sub-Section 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 Ministerial Decree of Strategy and Finance, stating the amount of other income and other necessary matters, to a recipient of such income when he or she pays the income: Provided, That where he or she pays other income falling under Article 21 (1) 15 (a), and 19 (a) 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 by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 145-2 (Special Cases concerning Timing for Withholding Taxes from Other Income)  
Subsection 6 Withholding Tax From Retirement Income
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 Article 146 (Timing and Methods for Withholding Tax from Retirement Income and Issuance, etc. 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, notwithstanding paragraph (1), no income tax on the concerned retirement income shall be withheld until the receipt other than pension is made. 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:
1. Where the retirement income is in a pension account or being paid into a pension account;
2. Where the retirement income is deposited into a pension account within 60 days from the date of receiving the same.
(3) A person who pays retirement income shall issue a withholding tax receipt prescribed by Ministerial Decree of Strategy and Finance, 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, That 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.
(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 by Act No. 11611, Jan. 1, 2013]
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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 by Act No. 10408, 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 by Act No. 10408, Dec. 27, 2010>
(3) Deleted. <by Act No. 11611, Jan. 1, 2013>
(4) Paragraphs (1) and (2) shall not apply to retirement income under Article 22 (1) 1. <Amended by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 148 (Settlement of Tax on Retirement Income)  
(1) Where a retired person submits, to the withholding agent, the withholding tax receipt for any of the following retirement incomes that were previously received 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 received during the taxable period concerned;
2. Retirement income already received under the employment agreement prescribed by Presidential Decree.
(2) Matters necessary concerning the method and procedure, etc. for settlement of retirement income tax shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 11611, Jan. 1, 2013]
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 operator prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 operators under subparagraph 2 of Article 149 collects income taxes on its members monthly pursuant to paragraph (1), it shall collect income taxes after deducting the amount equivalent to 10/100 of such tax.
(3) When a taxpayers association organized by persons pursuant to subparagraph 1 of Article 149 collects monthly income taxes from its members pursuant to paragraph (1), it shall collect income taxes after deducting the amount equivalent to 10/100 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 10/100 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 by Act No. 10408, Dec. 27, 2010>
(4) Deductions under paragraphs (2) and (3) shall be referred to as "taxpayers association credit".
(5) Matters necessary to collect income taxes pursuant to paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 155-2 (Special Cases concerning Withholding Taxes from Specified Money in Trust, etc.)  
In cases of trust other than collective investment scheme under Article 4 (2), notwithstanding Article 130, any person who deducts a withholding tax by proxy or who has been entrusted to deduct withholding tax pursuant to Article 127 (2) shall deduct a withholding tax from such income on a specified date (limited to a date within the same year of reversion) within three months from the date when income under each subparagraph of Article 127 (1) 1 and 2 is reverted in trust. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 9897, Dec. 31, 2009]
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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 income 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 amount 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, That 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 by Act No. 11611, Jan. 1, 2013>
1. With respect to income under subparagraphs 4 and 5 of Article 119, 2/100 of the amount paid;
2. With respect to income under subparagraph 6 of Article 119, 20/100 of the amount paid;
3. With respect to income under subparagraphs 1, 2, 10 and 12 of Article 119, 20/100 of the amount paid (as for the prize money, supplementary prize, etc. under Article 126 (1) 2, it shall be an amount calculated according to the same subparagraph): Provided, That in cases of interest income generated from bonds issued by the State, local governments and domestic corporations of income under subparagraph 1 of Article 119, it shall be 14/100 of the amount paid;
4. With respect to income under subparagraph 9 of Article 119, 10/100 of the amount paid: Provided, That where the acquisition value and transfer expenses of the assets transferred are verified, it shall be the lesser of an amount equivalent to 10/100 of the amount paid, or an amount equivalent to 20/100 of gains from transfer of such assets;
5. With respect to income under subparagraph 11 of Article 119, 10/100 of the amount paid (in cases falling under Article 126 (3), referring to the "arm's length price" under the same paragraph; hereafter referred to as "amount paid, etc." in this subparagraph): Provided, That if the acquisition value and transfer expenses of the relevant securities are verified pursuant to Article 126 (1) 1, it shall be the lesser of an amount equivalent to 10/100 of the amount paid, etc., or an amount equivalent to 20/100 of the amount calculated pursuant to the same subparagraph.
(2) In cases of urgency due to concerns over causing instability in financial markets and difficulties in implementing monetary policies, such as undermining soundness in a foreign exchange sector due to increasing fluctuation in foreign capital inflow, income tax may be reduced or zero rated for the following income among income of nonresidents, as prescribed by Presidential Decree. In such cases, the Minister of Strategy and Finance shall report, in advance, the tax rate to be reduced and the needs for such reduction to the Standing Committee of the National Assembly: <Added by Act No. 10408, Dec. 27, 2010>
1. State bonds and bonds prescribed by Presidential Decree issued in accordance with Article 3 (1) of the State Bond Act (hereafter referred to as "State bonds, etc." in this Article), among income under subparagraph 1 of Article 119;
2. Income incurred from transfer of State bonds, etc., among income under subparagraph 11 of Article 119.
(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 in cases where he or she does not pay such income directly according to the relevant terms and conditions of the contract. <Amended by Act No. 11611, Jan. 1, 2013>
(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, That 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 generated from building or construction, installation or assembly of a machine, etc., other work or from providing services regarding the direction, supervision, etc. of such work or domestic source income pursuant to subparagraph 6 of Article 119, shall deduct withholding tax pursuant to paragraph (1), even if the nonresident has a domestic place of business: Provided, That this shall not apply where such nonresident has made his or her registration of business operator pursuant to Article 168. <Amended by Act No. 11611, Jan. 1, 2013>
(8) Article 84 shall apply mutatis mutandis to cases where paragraph (1) is applied to income referred to in subparagraph 12 (f) (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 domestic source income is incurred under subparagraphs 9 through 12 of Article 119 by transferring assets located in the Republic of Korea by means of an auction under the Civil Execution Act, or a public sale of the National Tax Collection Act, a withholding tax shall be collected in accordance with paragraph (1) up to the amount actually paid to the relevant nonresident by a person who distributes the amount obtained at auction or at public sale. <Added by Act No. 10408, Dec. 27, 2010>
(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 by Act No. 10408, 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 by Act No. 10408, Dec. 27, 2010>
(12) For the purpose of tax withholding, a withholding agent under paragraphs (1) through (11) shall issue a withholding tax receipt prescribed by Ministerial Decree of Strategy and Finance, stating the amount of such domestic source income and other necessary matters, to a recipient of such domestic source income. <Amended by Act No. 10408, Dec. 27, 2010>
(13) With respect to the domestic source income under subparagraph 12 (i) of Article 119, a domestic corporation which has issued stocks or investment shares shall deduct a withholding tax at the time prescribed by Presidential Decree from a foreign related person holding such stocks or investment shares. <Amended by Act No. 11146, Jan. 1, 2012>
(14) Detailed methods of withholding tax under paragraph (13) shall be prescribed by Presidential Decree. <Amended by Act No. 10408, Dec. 27, 2010>
(15) When applying paragraph (1), where a nonresident with income under subparagraph 9 of Article 119 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, income tax on such income shall not be withheld.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 156-2 (Application for Non-Taxation, etc. where Nonresident is Eligible for Non-Taxation, etc. of Domestic Source Income)  
Any nonresident who intends to apply for non-taxation or tax-exemption for his or her domestic source income under Article 119 (excluding income under subparagraphs 5 and 6 of the same Article) according to a tax treaty shall file an application therefor with the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 156-4 (Special Cases concerning Procedures for Withholding Taxes from Nonresidents)  
(1) Where a withholding agent under Articles 156, 156-3 and 156-6 deducts withholding tax from income under subparagraph 1, 2, 9 (b), 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 Strategy and Finance, 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, That 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 by Act No. 11146, Jan. 1, 2012>
(2) Where any person to whom domestic source income prescribed in paragraph (1) is attributed (including his or her agent or a tax manager under Article 82 of the Framework Act on National Taxes) intends to apply for non-taxation, tax exemption or reduced tax rate according to a tax treaty on such income, he or she may request a correction to the head of a tax office having jurisdiction over the place for tax payment of a withholding agent, as prescribed by Presidential Decree, within three years from the last day of the month in which the date when the tax amount has been withheld pursuant to paragraph (1) falls.
(3) The head of a tax office requested to make a correction under paragraph (2) shall correct the tax base and the amount of tax or notify a person who has made such request of the purport that there is no reason for making a correction within six months from the date he or she has received such request.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 nonresident entertainer or sportsman (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 by Act No. 11146, Jan. 1, 2012>
(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 by Act No. 9897, 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 to whom domestic source income prescribed in Article 119 is substantially attributed (hereafter referred to as “real income earner” in this Article) intends to apply for a reduced tax rate under the applicable tax treaty (hereafter referred to as “reduced tax rate” in this Article), he or she shall submit an application for the reduced tax rate as prescribed by Presidential Decree to the withholding agent under Article 156 (1) (hereafter referred to as “withholding agent” in this Article).
(2) Upon applying paragraph (1), where the domestic source income concerned is paid through the foreign investment vehicles prescribed by Presidential Decree (hereafter referred to as “foreign investment vehicle” in this Article), the foreign investment vehicle concerned shall, as prescribed by Presidential Decree, receive an application for reduced tax rate from the real income earner and submit to the withholding agent the report on the foreign investment vehicle and details of the application for reduced tax rate.
(3) Where a withholding agent fails to receive the application for reduced tax rate or the report on foreign investment vehicle from the real income earner or from the foreign investment vehicle concerned, or is unable to figure out the real income earner by reviewing submitted documents or any ground prescribed by Presidential Decree arises, he or she shall deduct the withholding tax under each subparagraph of Article 156 (1), without applying the reduced tax rate.
(4) Where a real income earner who has failed to be benefited of the reduced tax rate under paragraph (3) intends to apply for the reduced tax rate, he or she may file an application for rectification with the head of a tax office having jurisdiction over the place for tax payment of his or her withholding agent, as prescribed by Presidential Decree, within three years from the last day of the month in which the date when the tax amount has been withheld pursuant to paragraph (3) falls.
(5) The head of a tax office requested to make a rectification pursuant to paragraph (4) shall, within six months from the date he or she has received such request, correct the tax base and the amount of tax or notify the person who has made such request of the purport that there is no reason for making a rectification.
(6) In addition to the matters prescribed in paragraphs (1) through (5), other matters necessary for applying reduced tax rate such as method/procedure of submitting the application for reduced tax rate, the report on foreign investment vehicle or other related documents, duty of keeping submitted documents and method/procedure of requesting rectification of the said documents shall be prescribed by Presidential Decree.
[This Article Added by Act No. 11146, Jan. 1, 2012]
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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 by Act No. 9897, Dec. 31, 2009]
Section 4 Penalty Tax for Non-payment or Underpayment of Withholding Tax
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 Articles 158 and 159 Deleted. <by Act No. 11146, Jan. 1, 2012>  
CHAPTER VI SUPPLEMENTARY PROVISIONS
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 Article 160 (Keeping of and Entry in Books)  
(1) Each business operator (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 by Act No. 11611, Jan. 1, 2013>
(2) Where a business operator 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 operator 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 operator, 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 operator 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 operator 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 Restriction of Special Taxation Act. <Amended by Act No. 10408, Dec. 27, 2010>
(6) Deleted. <by Act No. 10408, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 160-2 (Receipt and Keeping of Documentary Evidence of Disbursement of Expenses, etc.)  
(1) When any resident or the 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 date of end of the period for final return: Provided, That 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 by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
(2) In cases of paragraph (1), where any person with business income receives goods or services related to his or her business from a business operator (including a corporation) and disburses the consideration therefor, he or she shall obtain the following supporting documents: Provided, That this shall not apply to cases prescribed by Presidential Decree: <Amended by 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 operator 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) In applying paragraph (2), where a business operator fails to obtain a tax invoice under subparagraph 2 of the same paragraph and he or she has issued and keeps a tax invoice issued by a purchaser under Article 126-4 (1) of the Restriction of Special Taxation Act, he or she shall be deemed to have discharged his or her obligations to obtain and keep the supporting documents under paragraph (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 by Act No. 9897, Dec. 31, 2009]
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 Article 160-3 (Obligations to Prepare and Retain Details of Issuance of Receipts for Donation)  
(1) Any person who issues receipts for donation required to be included in necessary expenses or to take an income deduction pursuant to Articles 34 and 52 (6) to residents or to the nonresidents under Article 121 (2) and (5) shall prepare a detailed statement of issuance by each donor prescribed by Presidential Decree and retain it for five years from the date of issuance. <Amended by Act No. 11611, Jan. 1, 2013>
(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 by donor which he or she retains pursuant to paragraph (1), he or she shall submit such detailed statement.
(3) Any person who issues receipts for donation shall submit a detailed statement of issuance of receipts for donation stating the total number of receipts for donation issued and the total amount thereof, etc. during the relevant taxable period, to the head of the competent tax office pursuant to Article 168 (5) by June 30 of the year following the relevant taxable period.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 160-4 (Obligations, etc. of Financial Companies, etc. 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 Restriction of Special Taxation Act, 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 by Act No. 11611, 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 by Act No. 11611, Jan. 1, 2013>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 160-5 (Obligations, etc. to Report and Use Business Account)  
(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, That the transactions prescribed by Presidential Decree, in which it is difficult to use a business account because of 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 within five months from the commencing date of the taxable period in which he or she becomes a person subject to double-entry bookkeeping (the commencing date of the following taxable period in cases where he or she becomes a person subject to double-entry bookkeeping at the same time of his or her business commencement), and file a report thereon with the head of a tax office having jurisdiction over a place of business of the relevant business operator: Provided, That this shall not apply to cases where a business account has already been reported. <Amended by Act No. 10408, Dec. 27, 2010>
(4) Any person subject to double-entry bookkeeping shall, where he or she changes or adds a business account, report such change or addition by the deadline for a final return under Articles 70 and 70-2. <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013>
1. Deleted; <Amended by Act No. 11146, Jan. 1, 2012>
2. Deleted. <Amended by Act No. 11146, 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 by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 161 (Keeping Separate Entry)  
Any person who intends to have any income tax reduced or exempted pursuant to Article 59-2 (1) 2 shall enter income reduced or exempted in the books separately from other income.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 162 (Installation and Use of Cash Registers)  
(1) Notwithstanding Article 24 (1), where any business operator 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 by Act No. 9897, 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) The Commissioner of the National Tax Service may, where he or she finds it necessary for tax management, direct a business operator falling under the requirements prescribed by Presidential Decree in consideration of a type of business, scale, etc. as a business operator supplying goods or services mainly to consumers, not to business operators, to become a member of credit card member stores under Article 2 of the Specialized Credit Financial Business Act.
(2) Where a credit card member store (referring to a business operator who joined membership by meeting the requirements under paragraph (1); hereafter the same shall apply in this Article) supplies goods or services in connection with its business and the other party intends to settle accounts for the price with credit card under Article 35 (2) 1 (a), the credit card member store shall not refuse it or issue a credit card sales slip under Article 160-2 (2) 3 (hereafter referred to as "credit card sales slip" in this Article) falsely: Provided, That where any person who operates a superstore under subparagraph 3 of Article 2 of the Distribution Industry Development Act or sports facilities under subparagraph 1 of Article 2 of the Installation and Utilization of Sports Facilities Act (hereafter referred to as "superstore, etc." in this paragraph) issues a credit card sales slip after aggregating the sales of other business operators in the relevant superstore, etc. (only applicable to cases where business operators have entered into a prior contract among themselves where a person who operates the superstore, etc. operates the point-of-sale system under subparagraph 11 of Article 2 of the Distribution Industry Development Act), he or she shall not be deemed to have issued a credit card sales slip falsely. <Amended by Act No. 10408, Dec. 27, 2010>
(3) Any person refused transactions with 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 correction thereof to a credit card member store which refuses transactions with credit card or has issued a credit card sales slip falsely.
(6) The administrative guidance for becoming a member of credit card member stores, the method of reporting and notification of refusal of transactions with 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 by Act No. 9897, Dec. 31, 2009]
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 Article 162-3 (Obligations, etc. to Register as Cash Receipt Merchant and to Issue Cash Receipts for Cash Payment)  
(1) Any business operator meeting the requirements prescribed by Presidential Decree in consideration of a type of business, scale, etc. who supplies goods or services mainly to consumers, not to business operators, shall register as a cash receipt merchant within three months from the date he or she meets such requirements by installing a device issuing cash receipts in a credit card reader, etc.
(2) Any business operator 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) Where any business operator who has registered as a cash receipt merchant supplies goods or services in relation to his or her business and the other party thereof requests to issue a cash receipt after making a payment in cash, he or she shall not refuse to issue a cash receipt therefor or issue it falsely.
(4) Where any business operator who engages in the type of businesses prescribed by Presidential Decree, among those business operators obliged to register as a cash receipt merchant pursuant to paragraph (1), supplies goods or services, the amount of transactions (including the amount of value-added tax) for every purchase of which is not less than 300 thousand 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, That where he or she supplies goods or services to any person who has registered as a business operator 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 by Act No. 11611, Jan. 1, 2013; Act No. 11873, Jun. 7, 2013>
(5) Where any business operator who has registered as a cash receipt merchant fails to issue cash receipts or issue them falsely pursuant to paragraph (3) or (4), the other may report the details of such cash transactions to the Commissioner of the National Tax Service, the commissioner of a regional tax office or the head of a tax office.
(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 operator 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 operator of the amount reported in the relevant taxable period.
(7) Even where a person who has been supplied with goods or services from the business operator who has registered as a cash receipt merchant does not request for issuance of a cash receipt, the business operator may issue a cash receipt as prescribed by Presidential Decree. <Added by Act No. 11146, Jan. 1, 2012>
(8) The Commissioner of the National Tax Service may issue to a business operator who has registered as a cash receipt merchant orders necessary in connection with the matters to be complied by the said business operator, such as the method of issuing cash receipts, method of posting a mark indicating the Issuer of Cash Receipts, etc. <Amended by Act No. 11146, 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 by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 163 (Preparation, Issuance, etc. of Invoices)  
(1) Where any business operator registered as a business operator pursuant to Article 168 supplies any goods or services, he or she shall prepare an invoice or a receipt (hereinafter referred to as "invoice, etc.") and issue it to a person supplied such goods or services, as prescribed by Presidential Decree.
(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 who is supplied with the relevant goods: Provided, That this shall not apply to cases where an invoice, etc. is issued pursuant to paragraph (1), as prescribed by Presidential Decree. <Amended by Act No. 11611, Jan. 1, 2013; 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 operator shall submit an aggregate table of invoices by seller he or she has issued and an aggregate table of invoices by purchaser he or she has been issued pursuant to paragraphs (1) through (3) (hereinafter referred to as "aggregate table of invoices by seller or aggregate table of invoices by purchaser"), to the head of a tax office having jurisdiction over the seat of his or her place of business by the deadline prescribed by Presidential Decree: Provided, That an importer who has received an invoice pursuant to paragraph (3) may choose not to submit the aggregate table of such statements of accounts by purchaser.
(6) The portion for which tax invoices or receipts are prepared and issued or an aggregate table of tax invoices by seller and an aggregate table of tax invoices by purchaser are submitted under the Value-Added Tax Act shall be deemed that invoices, etc. have been prepared and issued or an aggregate table of tax invoices by seller and an aggregate table of tax invoices by purchaser have been submitted pursuant to paragraphs (1) through (3) and (5).
(7) Matters necessary to prepare and issue invoices, etc. and submit an aggregate table of invoices by seller and an aggregate table of invoices by purchaser shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 163-2 (Submission of Aggregate Table of Tax Invoices by Purchaser)  
(1) A business operator 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 the nonresident under Article 121 (2) and (5) shall, where the business operator obliged to file a report on the present status of his or her place of business pursuant to Article 78 (1) or the business operator under Article 78 (1) 1 has been issued an tax invoice pursuant to Article 32 (1), (7) or 35 (1) of the Value-Added Tax Act after having been supplied with goods or services, submit an aggregate table of tax invoices by purchaser 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, That this shall not apply to cases where he or she has submitted it pursuant to Article 54 (5) of the Value-Added Tax Act. <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11873, Jun. 7, 2013>
(2) Matters necessary to submit an aggregate table of tax invoices by purchaser shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 164 (Submission of Statement of Payment)  
(1) Any person who pays any of the following income 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 operator 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 or the service charges under subparagraph 7, and referring to the end of the month following the month in which the date of suspension or the date of closure falls where business is suspended or closed) 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; hereinafter the same shall apply in this paragraph): Provided, That in cases of wage and salary income of a worker employed on a daily basis prescribed by Presidential Decree among wage and salary income under subparagraph 4, a statement of payment shall be submitted by the end of the month following the last month of the quarter in which the payment date thereof falls (referring to the end of February of the following taxable period for wage and salary income paid in the 4th quarter): <Amended by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013; Act No. 11873, Jun. 7, 2013>
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.
(2) Paragraph (1) may 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 under 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 device issuing cash receipts under Article 126-3 of the Restriction of Special Taxation Act.
(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 to have been submitted.
(6) Where any statement of payment submitted among an aggregate table of invoices by seller and an aggregate table of invoices by purchaser submitted to the head of a tax office having jurisdiction over the seat the place of business pursuant to Article 163 (2) and an aggregate table of tax invoices by seller and an aggregate table of tax invoices by purchaser submitted to the head of a tax office having jurisdiction over the seat of the place of business under the Value-Added Tax Act corresponds to statement of payment, a statement of payment shall be deemed to have been submitted.
(7) The head of a tax office having jurisdiction over withholding tax, the commissioner of a regional tax office, the Commissioner of the National Tax Service may, when he or she deems it necessary, request submission of a statement of payment.
(8) 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.
(9) 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 under subparagraph 19 of Article 2 of the Framework Act on National Taxes, as prescribed by Presidential Decree.
(10) Matters necessary to submit a statement of payment pursuant to paragraphs (1) through (9) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 164-2 (Special Cases concerning Obligations to Submit Statement of Payment on Domestic Source Income, etc. of Nonresidents)  
(1) Any person who pays domestic source income under Article 119 to a nonresident 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, That 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 by Act No. 11611, Jan. 1, 2013>
(2) Article 164 shall apply mutatis mutandis to the submission of a statement of payment pursuant to paragraph (1).
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 165 (Submission of Supporting Documents for Income Deduction and Administrative Guidance)  
(1) Any person who issues supporting documents required to get a deduction on income tax prescribed by Presidential Decree (hereinafter referred to as "supporting documents for income deduction") among the income deduction under this Act or the Restriction of Special Taxation Act shall submit the supporting documents for income deduction to the Commissioner of the National Tax Service, as prescribed by Presidential Decree, such as use of information and communications network, etc.: Provided, That this shall not apply to cases prescribed by Presidential Decree, such as cases where a person issued supporting documents for income deduction refuses to submit the supporting documents, etc.
(2) Any person issued supporting documents for income deduction 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.
(3) Any person who is not a public official among those who become aware of the details of supporting documents for income deduction received pursuant to paragraph (1) shall be deemed a public official when applying the penal provisions under the Criminal Act or other Acts.
(4) The Commissioner of the National Tax Service may guide a person issuing supporting documents for income deduction to submit such documents to him or her.
(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 by methods prescribed by Presidential Decree, such as in writing, he or she may provide a resident with global income under Article 50 (1) the relevant information on his or her dependents.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 166 (Use of Data Processing Information, etc. 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, etc. of Family Relationship shall be prescribed by Presidential Decree. <Amended by Act No. 10408, Dec. 27, 2010>
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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, That 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 by Act No. 9897, Dec. 31, 2009]
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 Article 168 (Registration of Business Operators and Assignment of Taxpayer Code Numbers)  
(1) Any business operator who starts a new business shall register his or her business with the head of a tax office having jurisdiction over the seat of the place of business.
(2) Any business operator who has made registration of business operator pursuant to the Value-Added Tax Act shall be deemed to have made registration pursuant to paragraph (1) concerning the relevant business.
(3) Article 8 of the Value-Added Tax Act shall apply mutatis mutandis to any business operator who makes registration of business operator under this Act. <Amended by Act No. 11873, Jun. 7, 2013>
(4) Deleted. <by Act No. 5191, Dec. 30, 1996>
(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 operator;
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 by Act No. 9897, 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 pursuant to Article 150, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 170 (Inquiry and Investigation)  
Any public official engaged in business concerning income tax may, if it is necessary for conducting his or her business, inquire of any of the following persons or investigate the relevant books, documents, and other things, or order him or her to present them: <Amended by Act No. 11146, Jan. 1, 2012>
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 statement of payment;
5. A withholding agent pursuant to Articles 156 and 156-3 through 156-6;
6. A tax manager pursuant to 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.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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 Article 171 (Consultation)  
If it is required for returns, determination, correction 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 operators and an organization corresponding thereto, or any person who is well informed of the circumstances as to the relevant business.
[This Article Wholly Amended by Act No. 9897, 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 by Act No. 9897, Dec. 31, 2009]
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 Article 173 (Cooperation for Collection of Taxation Data)  
(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 faithfully prepare the 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 February of the year following the taxable period in which the amount of earnings or the amount of income is generated.
(2) The Commissioner of the National Tax Service may guide persons obliged to submit taxation data pursuant to paragraph (1) so that they may submit such data faithfully.
(3) Matters necessary for a method of preparation of taxation data, etc. under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
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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 by Act No. 9897, Dec. 31, 2009]
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 Article 175 (Sample Surveys)  
(1) The head of a tax office having jurisdiction over the place for tax payment or the commissioner of the competent regional tax office shall conduct a sample survey within two years from the end of the relevant taxable period, to examine appropriateness of the inclusion in necessary expenses or income deduction for persons prescribed by Presidential Decree (hereafter referred to as "person eligible for donation deduction" in this Article) among the residents who include donations in necessary expenses or take income deduction for donations pursuant to Articles 34 and 52 (6) of the Act or the nonresidents under Article 121 (2) and (5). <Amended by Act No. 11611, Jan. 1, 2013>
(2) A sample survey shall be conducted on the number of persons equivalent to the rate prescribed by Presidential Decree among the persons whose donations are tax deductible.
(3) Matters necessary for methods of and procedures for a sample survey shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]
ADDENDA
Article 1 (Enforcement Date)
(1) This Act shall enter into force on January 1, 1996: Provided, That Articles 17 (2) (referring to the amended provisions of the previous Ar- ticle 26 (1)), 32 (1) (referring to the amended provisions of the previous Article 39 (1)), 47 (1) (referring to the amended provisions of the pre- vious 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 pre- vious Article 60), 105 (1) (referring to the amended provisions of the pre- vious Article 95 (1)), 163 (referring to the amended provisions of the pre- vious 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 wonAmount 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, That 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 prin- cipal and interest of the loan borrowed to acquire or rent a house after January 1, 1996: Provided, That 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.
[This Article Wholly Amended by Act No. 5031, Dec. 29, 1995]
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 Properties;
(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 Hous- ing 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; and
3. Interest accruing from any savings in the National Savings Associ- ation 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 Article 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, That 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 by Act No. 5424, Dec. 13, 1997; Act No. 6292, Dec. 29, 2000>
Article 2 (Applicability)
This Act shall apply to the first income portion accruing after 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 calcula- tion 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 with- holding time of which arrives after this Act enter into force.
Article 8 (Applicability concerning Capital Gains)
(1) The provisions of this Act concerning capital gains shall apply to the first portion transferred after the respective Article enters into force: Provided, That the amended provisions of Article 165 shall apply to the first portion entering into the real estate transfer contract (referring to the date causing registration entered on the register) after January 1, 1997. <Amended by Act No. 5191, 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 form 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 trans- ferred 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 Assess- ment)
(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 ex- ceeds 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 mat- ters 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 first portion of income accruing after 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 5 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.
Articles 2 through 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 12 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 is included the day of the promul- gation of this Act.
(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) 1 (a) (ⅱ) 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, That 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 Devel-
opment 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, That 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, That 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 prom- ulgation.
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, That 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, That 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 in- cludes 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 por- tion which is capitalized on or after the date this Act enters into force: Provided, That 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
Under 50 billion won 		30 million won + 15/10,000 of an amount exceeding 10 billion won
Over 50 billion won
90 million won + 4/10,000 of an amount exceeding 50 billion won
(2) In the application of Article 35 (2) and (4), during the taxable pe- riods 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, That 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, That 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, That 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) 1 (b) and (3) shall apply to the portion transferred on or after January 1, 2001: Provided, That with regard to assets falling under Article 99 (1) 1 (b), the calculation of a standard market price for 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, That 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.
(3) (Transitional Measures concerning Tax Credit Applied to Interest Redemption of Housing Lease Funds, etc.) The previous provisions of Article 52 (1) 5 shall apply to any resident with wage and salary income and subject to the application of the previous provisions of Article 52 (1) 5 as at the time this Act enters into force by the end of the taxable year in which the date of December 31, 2005 falls and in the application of the annual limit of income deduction amount, "1.8 million won per year" in the main sentence of previous Article 52 (1) 5 shall be construed as "3 million won per year". In such cases, when a resident with wage and salary income becomes subject to the application of the amended provisions of Article 52 (2) through (5), he or she may make him or herself subject to such application at his or her choice in each taxable year.
ADDENDA <Act No. 6292, Dec. 29, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2001: Provided, That the amended provisions of subparagraph 4 (m) 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 by Act No. 6557, Dec. 31, 2001>
Article 2 (General Applicability)
This Act shall apply to income that accrues 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 to 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, That 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, the retroactive contributions or retroactive charges 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 shall be excluded from the pension premiums subject to deduction. <Added by Act No. 6557, 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, etc.)
The amended provisions of subparagraph 4 (m) 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 (Exception to Deduction of Retirement Income Tax)
(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 annu- ities 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 annu- ity 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 Presi- dential Decree, within two years of the date of its promulgation. (Proviso Omitted.)
[This Act shall enter into force on March 1, 2002 in accordance with Presidential Decree No. 17519, February, 25, 2002]
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, That 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 por- tion of income that is paid until December 31, 2002.
Article 3 (General Applicability)
This Act shall apply to the portion of income accrued 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, etc. 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 pro- visions 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, That 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, etc.)
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 prom- ulgation.
Articles 2 through 18 Omitted.
ADDENDA <Act No. 6916, May 29, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promul- gation. (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:
<Gross Pay><Amount to be Deducted>
Not more than 5 million wonGross 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 won
13.5 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, That where the deducted tax amount exceeds 450,000 won, such excess shall be deemed written off:
<Calculated Global Income Tax Amount on Wage and Salary Income><Amount to be Deducted>
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, That 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) 1 (c) shall enter into force on January 1, 2005.
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 ap-
ply to the portion 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 4 (q) 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, That 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 by Act No. 7319, 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, That 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 pro- visions shall apply to the one reported on or after the date this Act enters into force. <Amended by Act No. 7319, Dec. 31, 2004>
Article 7 (Applicability to Investment Trust)
The amended provisions of Articles 16 and 17 shall apply from the en- forcement date of the Act on Business of Operating Indirect Invest- ment 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, That 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 Standard Market Price)
The amended provisions of Article 99 (1) 1 (c) 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 13 (i) 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, etc.)
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, That 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, That 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 for Scope of Domestic Source Income for Industrial, Commercial or Scientific Machines, Equipment, Appa- ratuses, etc.)
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 subpara- graph 11 (c) 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) 1 (a), the former provisions shall apply not later than the final revenue period for the said bonds, etc.
ADDENDA <Act No. 7120, Jan. 29, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promul-
gation.
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 promul- gation.
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, That 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 2 (a) 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) 2 (a), 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, That 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 pre- vious provisions shall apply on the condition that the amount equiv- alent 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 cor-
poration, 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, notwithstand- ing the amended provisions of Articles 46, 130, and 133 (2) (proviso).
Article 5 (Applicability concerning Capital Gains Tax Rates)
The amended provisions of Article 118-5 (1) 1 shall apply to the por- tion 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 Notifica- tion of Standard Market Price 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) 1 (d) as at the time this Act enters into force, the previous provisions of Article 99 (1) 1 (c) shall apply to the computation and publication of standard market price of such multi-unit house notwithstanding the mended provisions of Article 99 (1) 1 (d) 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 standard market price 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) 1 (c) 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, That 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 portions of income generated on or after the date this Act enters into force.
Article 3 (General Applicability concerning 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 4 (r), 4-3 (d) and 5 (e) of Article 12 shall apply to the portions paid on or after the date this Act enters into force.
Article 5 (Applicability concerning 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 concerning 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 Pre- miums 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 of payment on or after the date this Act enters into force.
Article 10 (Applicability concerning Income Deduction of House-purchasing Savings, etc.)
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, That 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 inheri- tance, 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 concerning Special Cases for Withholding Taxes for Domestic Source Income of Nonresident)
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 etc. 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, etc. 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, etc. 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 Sub- stitute 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.
ADDENDA <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.
ADDENDA <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.
ADDENDA <Act No. 7908, Mar. 24, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promul- gation.
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, That the amended provisions of Articles 35 (2) 2, 70 (4) 5, 80 (2) 3 (c) 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)
3 (a) 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 concerning Capital Gains Tax)
The amended provisions concerning capital gains tax under 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 concerning 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) 3 (a) 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) 3 (c) 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 operator who falls under a joint business operator 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, etc.)
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, etc. 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, etc. 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 operator 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 Invest- ment 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 Noti- fication 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 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 4 (e) 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 Operators) 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) and (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 43 Omitted.
ADDENDA <Act No. 8825, Dec. 31, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2008: Provided, That the amended provisions of subparagraph 4 (n) 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 provisions on capital gains tax in this Act shall apply to the transfer occurred on or after the date this Act enters into force.
Article 4 (Applicability to Compensation)
The amended provisions of subparagraph 5 (d) 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 (a) (ⅲ)) shall apply to the portion paid on or after the date this Act enters into force.
(3) The amended provisions of Article 52 (1) 4 (a) (ⅲ) 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 subpara- graph 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 Correction)
(1) The amended provisions of Article 80 (2) 1-3 shall apply to change or correction due to the relevant circumstances on or after the date this Act enters into force.
(2) The amended provisions of Article 80 (2) 3 (c) shall apply to decision, change or correction 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 En- tertainers)
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, etc.)
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 7 Omitted.
ADDENDA <Act No. 9270, Dec. 26, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2009: Provided, That the amended provisions of subparagraph 4 (e) 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 5 (f) 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 income accruing on or after the date 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, That 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 4 (e) 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) 1 (b) 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 13 (c) 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, etc.)
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 subpara- graph 9 (b) 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) With regard to income accruing from transfer of assets that have been acquired from March 16, 2009 to December 31, 2012, notwithstanding the provisions of Article 104 (1) 4 through 9, tax rates under subparagraph 1 of the same paragraph (tax rates under subparagraph 2 or 3 of the same paragraph in cases of assets held for less than two years) shall apply. <Amended by Act No. 10408, Dec. 27, 2010>
(2) Deleted. <by Act No. 11146, Jan. 1, 2012>
[This Article Wholly Amended by Act No. 9672, May 21, 2009]
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.
ADDENDA <Act No. 9346, Jan. 30, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2013.
Articles 2 and 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 8 Omitted.
ADDENDA <Act No. 9774, Jun. 9, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 19 Omitted.
ADDENDA <Act No. 9785, Jul. 31, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA <Act No. 9897, Dec. 31, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2010: Provided, That the amended provisions of subparagraph 4 (e) 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) 2 (a) on July 1, 2010, the amended provisions of subparagraph 5 (f) 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 by Act No. 10408, Dec. 27, 2010; Act No. 11611, Jan. 1, 2013>
Article 2 (General Applicability)
(1) This Act shall apply to income generated on or after the date this Act enters into force.
(2) The amended provisions on 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 4 (e) 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, That 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 payment of a repayment and interest or a monthly rent on or after the date 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, etc. 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 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, etc. 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.
ADDENDA <Act No. 9924, Jan. 1, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2010.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 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 10 Omitted.
ADDENDA <Act No. 10221, Mar. 31, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2011.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 10337, May 31, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 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 income accrued on or after the date 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 to Report on Present Status of 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 to 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 State 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. Excess repayment from workplace mutual-aid association× Number of months of payment prior to December 31, 2010 ×50%
Total number of months paid
2. Excess repayment from workplace mutual-aid association× Number of months of payment after January 1, 2011 ×40%
Total number of months paid
Article 19 (Transitional Measures concerning Compliant Small and Medium Enterprises)
Business operators, 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 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.)
Articles 2 and 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. (Proviso Omitted.)
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 the date of its promulgation.
Articles 2 and 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.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 11042, Sep. 15, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2012.
Article 2 (Amendment of Other Acts) Omitted.
ADDENDA <Act No. 11146, Jan. 1, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2012: Provided, That the amended provisions of the proviso to Article 25 (1) and of 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 17 (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 “Article 156-3 through 156-6”), subparagraph 3 of Article 86, 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 begin to apply from the income generating for the first time after this Act enters into force.
(2) The amended provisions concerning capital gains shall, among the provisions of this Act, begin to apply from the asset to be transferred for the first time 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 begin to apply from the guaranty money, etc. to be reported for the first time after this Act enters into force.
Article 4 (Applicability to Exclusion of Entertainment Expenses from Necessary Expenses)
The amended provisions of the proviso to Article 35 (2) shall begin to apply from the entertainment expenses to be disbursed for the first time after January 1, 2012.
Article 6 (Applicability to Income Deduction of Monthly Rent)
The amended provisions of Article 52 (4) 2 shall begin to apply from the monthly rent to be paid for the first time after January 1, 2012.
Article 7 (Applicability to the Limit of Income Deduction of Long-Term Mortgage Loan)
The amended provisions of the proviso to Article 52 (5) shall begin to apply from the interest to be paid, after borrowing a new loan or extending the period of repayment of an existing loan, for the first time after January 1, 2012.
Article 8 (Applicability to the Carried-Over Deduction of Designated Donations)
The amended provisions of the proviso to Article 52 (8) other than its subparagraphs shall begin to apply from the designated donations requested for tax deduction for the first time 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 the 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 begin to apply from the amount to be collected for the first time after January 1, 2012.
Article 11 (Applicability to Application of Registered Value to the Person who Failed to Report Preliminary Return of Capital Gains)
The amended provisions of the main sentence of Article 114 (5) shall begin to apply from the portion to be determined for the first time 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, 9 (b), 10 or 11 of Article 119”) shall begin to apply from the domestic source income to be withheld for the first time 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 begin to apply from the domestic source income to be withheld for the first time after January 1, 2012.
Articles 14 (Transitional Measures concerning Dividend, etc. of Construction Interest)
With respect to the dividend, etc. of the construction interest incurred before April 15, 2012, the former provisions of this Act shall apply thereto, notwithstanding the amended provisions of Article 17 (1) 1 and 6.
Articles 15 (Transitional Measures concerning Limit of Director’s Retirement Income)
Where a director retired before January 1, 2012 and his or her retirement income was generated after January 1, 2012, the former provisions of this Act shall apply to the said retirement income, notwithstanding the amended provisions of Article 22 (3).
Articles 16 (Transitional Measures concerning Extension of Period of Carried Forward Deduction, etc. of Legal Donation)
With respect to the legal donation disbursed before January 1, 2012, the former provisions of this Act shall apply thereto, notwithstanding the amended provisions of Article 52 (8) 1.
Articles 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 of this Act shall apply thereto until the initial period of repayment ends, notwithstanding the amended provisions of Articles 34 (3) and 52 (8) 1.
Articles 18 (Transitional Measures concerning Penalty Tax for Non-Payment or Underpayment of Withholding Tax, Etc.)
With respect to the portion which creates a duty to pay the income tax imposed before January 1, 2012, the former provisions of this Act 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.)
Articles 2 and 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 begin to apply from the income generating after this Act enters into force.
(2) The amended provisions concerning capital gains shall, among the provisions of this Act, begin to apply from the portion to be transferred after this Act enters into force.
Article 3 (Applicability to Calculation of the Tax Base of Global Income)
(1) The amended provisions of Article 14 (3) 6 shall begin to apply from the portion to be paid after this Act enters into force.
(2) The amended provisions of Article 14 (3) 7 (b) shall begin to apply from the portion of income to be received in the form of the receipt other than pension from the pension account subscribed after this Act enters into force.
Article 4 (Applicability to Pension Account)
A pension account pursuant to the amended provisions of Article 20-3 (1) 2 shall begin to apply from the 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 begin to apply from the portion of the taxable period under which the enforcement date of this Act falls.
Article 6 (Applicability to Calculation, etc. of Income Generated from Succession of Pension Account by Spouse)
The amended provisions of Article 44 (2) and the proviso to 74 (1) shall begin to apply from the pension account succeeded by a spouse due to the death of the subscriber to the account.
Article 7 (Applicability to Pension Contribution Deduction)
The amended provisions of Article 51-3 (1) 2 shall begin to apply from the pension contributions to be paid after this Act enters into force.
Article 8 (Applicability to Special Deduction)
The amended provisions of Article 52 (3) 1 (b) and 2 (b) and Article 52 (4) shall begin to apply from the portion to be paid after this Act enters into force.
Article 9 (Applicability to Interim Prepayment)
The amended provisions of the front part of Article 65 (1) shall begin to apply from 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 begin to apply from 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 begin to apply from the portion to be reported after this Act enters into force.
Article 12 (Applicability to Application for Reduction or Exemption of Tax, Etc.)
The amended provisions of Articles 75 (1), 76 (1), 80 (1) and (2), 82 (2), 85-2 (2), 160-5 (4) shall begin to apply from 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 begin to apply from the portion if its deadline for submission arrives after this Act enters into force.
(2) The amended provisions of Article 81 (12) shall begin to apply from the portion if its receipt for donation is issued after this Act enters into force.
Article 14 (Applicability to Method, etc. of Reduction and Exemption of Capital Gains Tax)
The amended provisions of Article 90 (2) shall begin to apply from 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) 1 (a) shall begin to apply from the portion to be received from the bond 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 begin to apply from the portion to be paid after this Act enters into force.
(3) The amended provisions of Article 129 (1) 6 (b) shall begin to apply from the portion of income to be received, in the form of the receipt other than pension, from the 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, Etc.)
The amended provisions of Article 162-3 (4) shall begin to apply from the goods or services to be supplied by a business operator 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 begin to apply from the statement of payment to be submitted after this Act enters into force.
Article 18 (Applicability to Pension Account)
Among the accounts subscribed to or contracted before enforcement date of this Act, the accounts such as retirement insurance, pension savings or other pensions pursuant to the former provisions of Article 20-3 (1) 3 through 5 shall be deemed the pension account pursuant to the amended provisions of Article 20-3 (1) 2.
Articles 19 (Transitional Measures concerning Pension Savings)
With respect to the income received, in the form other than pension, by a person due to early termination of an agreement on pension savings because the said person who had previously subscribed, before enforcement date of this Act, to the pension savings under Article 86-2 of the former Restriction of Special Taxation Act died after enforcement date of this Act or after expiry of the said agreement, the former provisions of this Act shall apply thereto, notwithstanding the amended provisions of Article 20-3 (1) 4 and 129 (1) 5-2.
Articles 20 (Transitional Measures concerning the Receipt Other than Pension)
Where a person transfers or deposits his or her retirement income to the retirement pension account after he or she retires before enforcement of this Act, or where an additional charge is paid before enforcement of this Act 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 aforementioned amount concerned (including the amount additionally received according to the distributions based on performances of management of the said amount), the former provisions of this Act shall apply thereto, notwithstanding the amended provisions of Articles 21 (1) 21 and 22 (1).
Articles 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 provisions of the National Pension Act (Act No. 4971) as at the time of enforcement of this Act shall be governed by the former provisions of this Act, notwithstanding the amended provisions of Article 22 (5).
Articles 22 (Transitional Measures concerning Retirement Income)
(1) Where the retirement income of a person who retires before enforcement of this Act is paid after enforcement of this Act, the former provisions of this Act shall apply to the retirement income concerned, 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 enforcement of this Act and retires after enforcement of this Act by the ratio of number of years of continuous services done before enforcement of this Act (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 of this Act shall apply thereto, notwithstanding the amended provisions of Article 55 (2).
Articles 23 (Transitional Measures concerning Withholding Tax Rates)
With respect to the interest and discount amount of the bond to be issued
before enforcement of this Act, the former provisions of this Act shall apply thereto, notwithstanding the amended provisions of Article 129 (1) 1 (a).
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.
Articles 2 and 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 17 Omitted.
ADDENDA <Act No. 11873, Jun. 7, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2013.
Articles 2 through 19 Omitted.

Last updated : 2016-02-18