Statutes of the Republic of Korea

No. 21698
Promulgation Date 2009-08-21
Ministry of Finance and Economy

ALL

CHAPTER Ⅰ GENERAL PROVISIONS

Article 1 (Definition)

Article 2 (Scope of Profit-Making Business)

Article 3 (Starting Date of Business Year)

Article 4 (Report on Change of Fiscal Year)

Article 5 (Scope of Date of Registration of Merger)

Article 6 (Scope of Place of Tax Payment)

Article 7 (Place of Tax Payment for Person Responsible for Collecting Withholding Taxes)

Article 8 (Designation and Notification of Place of Tax Payment)

Article 9 (Report on Change of Place of Tax Payment)

CHAPTER Ⅱ CORPORATE TAX ON INCOME FOR EACH BUSINESS YEAR OF DOMESTIC CORPORATION

Section 1 Tax Base and Its Calculation

Sub-Section 1 General Provisions

Article 10 (Deduction of Losses)

Sub-Section 2 Calculation of Earnings

Article 11 (Scope of Earnings)

Article 12 (Calculation of Merger Evaluation Marginal Profit)

Article 13 (Legal Fiction of Time of Dividend Payment or Distribution of Funds)

Article 14 (Evaluation of Value of Assets)

Article 15 (Amount in Excess of Face Value of Issued Stocks)

Article 16 (Earnings Carried Forward)

Article 17 Deleted.

Article 17-2 (Exclusion of Holding Company’s Received Dividend Amount from Earnings)

Article 17-3 (Exclusion of Ordinary Corporations’ Received Dividend Amount from Earnings)

Article 18 (Deficits Carried Forward)

Sub-Section 3 Calculation of Losses

Article 19 (Scope of Expense)

Article 19-2 (Non-inclusion of Bad Debt Loss in Loss)

Article 20 (Scope of Piece Rates, etc.)

Article 21 (Scope of Negligence)

Article 22 (Inclusion of Value-Added Purchase Tax Amounts in Calculation of Losses)

Article 23 Deleted.

Article 24 (Scope of Depreciable Assets)

Article 25 (Method of Appropriation of Depreciation Costs as Losses)

Article 26 (Calculation of Scope of Depreciation Amount)

Article 27 (Change of Method of Depreciation)

Article 28 (Lifespan and Depreciation Rate)

Article 29 (Special Cases and Changes of Lifespan)

Article 29-2 (Lifespan of Used Assets, etc.)

Article 30 (Legal Fiction of Depreciation)

Article 31 (Legal Fiction of Instant Depreciation)

Article 32 (Disposition of Disapproved Depreciation Amount)

Article 33 (Detailed Statement on Depreciation Costs)

Article 34 (Regulations concerning Depreciation Costs)

Article 35 (Scope of Donations)

Article 36 (Scope, etc. of Designated Donations)

Article 37 (Value of Donations)

Article 38 (Scope of Inclusion of Donations in Calculation of Losses)

Article 39 (Scope of Small and Medium Enterprises)

Article 40 (Standard for Calculation of Revenue Amount of Entertainment Expenses)

Article 41 (Use of Credit Cards, etc. for Entertainment Expenses)

Article 42 (Scope of Entertainment Expenses)

Article 42-2 Deleted.

Article 43 (Non-Inclusion of Bonuses in Calculation of Losses)

Article 44 (Non-Inclusion of Retirement Benefits in Calculation of Losses)

Article 44-2 (Non-Inclusion of Retirement Insurance Premium in Calculation of Losses)

Article 45 (Non-Inclusion of Welfare Expenses in Calculation of Losses)

Article 46 (Non-Inclusion of Travel Expenses in Calculation of Losses)

Article 47 Deleted.

Article 48 (Non-Inclusion of Joint Expenses in Calculation of Losses)

Article 49 (Scope of Non-Business Related Assets)

Article 50 (Non-Business Related Expenses)

Article 51 (Scope of Interest on Debentures for which Creditor is Obscure)

Article 52 (Scope of Interest on Loans Appropriated for Construction Capital)

Article 53 (Non-Inclusion of Interest Paid on Non-Business Related Assets in Calculation of Losses)

Article 54 Deleted.

Article 55 (Order of Application of Non-Inclusion of Paid Interest in Calculation of Losses)

Sub-Section 4 Inclusion of Reserve Funds and Appropriated Funds in Calculation of Losses

Article 56 (Inclusion of Proper Purpose Business Reserve Fund in Calculation of Losses)

Article 57 (Inclusion of Liability Reserve Fund in Calculation of Losses)

Article 58 Deleted.

Article 59 Deleted.

Article 60 (Inclusion of Retirement Benefits Payment Fund in Calculation of Losses)

Article 61 (Inclusion of Allowance for Bad Debts in Calculation of Losses)

Article 62 Deleted.

Article 63 (Inclusion of Account for Write-off Indemnity Receivables in Calculation of Losses)

Article 64 (Inclusion of Treasury Subsidies, etc. in Calculation of Losses)

Article 65 (Inclusion of Construction Charges in Calculation of Losses)

Article 66 (Inclusion of Insurance Marginal Profits in Calculation of Losses)

Article 67 Deleted.

Sub-Section 5 Time of Accrual of Earnings and Losses

Article 68 (Business Year in which Earnings and Losses Accrue from Sales of Assets)

Article 69 (Business Year in which Earnings and Losses Accrue from Provision of Services)

Article 70 (Business Year of Reversion of Interest Income)

Article 71 (Business Year of Accrual of Other Earnings and Losses such as Rental Fees)

Article 72 (Acquisition Value of Assets)

Article 73 (Scope of Assets and Liabilities Subject to Evaluation)

Article 74 (Evaluation of Inventories)

Article 75 (Evaluation of Securities, etc.)

Article 76 (Evaluation of Foreign Assets and Liabilities)

Article 77 Deleted.

Article 78 (Inventory Evaluation Marginal Losses)

Article 79 (Corporate Accounting Standards and Scope of Practices)

Sub-Section 6 Special Cases concerning Mergers and Divisions

Article 80 (Inclusion of Reasonable Amount for Merger Evaluation Marginal Profits in Calculation of Losses)

Article 81 (Succession to Deficits Carried Forward on Following Merger)

Article 82 (Inclusion of Reasonable Amount for Division Evaluation Marginal Profits in Calculation of Losses)

Article 83 (Inclusion of Reasonable Amount for Assets Transfer Marginal Profits from Spin-off in Calculation of Losses)

Article 83-2 (Inclusion of Amount Equivalent to Transfer Gain from Asset Following Investment in Kind in Calculation of Losses)

Article 84 (Special Cases concerning Calculation of Income Amount for Corporations which Continue to Exist after Division)

Article 84-2 (Succession of Amount of Deficit Carried Forward as Result of Division)

Article 85 (Succession to Assets and Liabilities upon Merger and Division)

Article 86 (Inclusion of Reasonable Amount of Assets Transfer Marginal Profits from Exchange in Calculation of Losses)

Sub-Section 6-2 Income Deduction

Article 86-2 (Income Deduction for Special Purpose Companies, etc.)

Sub-Section 7 Special Cases concerning Calculation of Income Amount

Article 87 (Scope of Person with Special Relationship)

Article 88 (Type of Wrongful Calculation)

Article 89 (Scope of Market Price, etc.)

Article 90 (Submission of Detailed Statement on Transactions between Persons with Special Relationship)

Article 91 (Special Cases concerning Calculation of Income Amount from Transactions with Foreign Corporations)

Section 2 Calculation of Tax Amount

Article 92 (Calculation of Number of Months)

Article 92-2 (Special Cases concerning Taxation of Income Accruing from Transfer of Land, etc.)

Article 92-3 (Standards for Period of Idle Lands)

Article 92-4 (Judgment on Land Category)

Article 92-5 (Scope, etc. of Farmland)

Article 92-6 (Scope, etc. of Forests and Fields)

Article 92-7 (Scope, etc. of Ranch Area)

Article 92-8 (Scope of Other Lands Used for Business)

Article 92-9 (Scope of Land Attached to Housing)

Article 92-10 (Scope of Resort Villas and Applicable Standards)

Article 92-11 (Criteria, etc. for Judging Lands that are Not Deemed Idle Lands on Grounds of Inevitability)

Article 93 Deleted.

Article 94 (Deduction of Tax Amount Paid in Foreign Country)

Article 94-2 (Special Case of Deduction of Tax Amount Paid Abroad by Private Equity Company, etc.)

Article 95 (Tax Deduction Amount for Losses in Disasters)

Article 95-2 (Tax Deduction, etc. for Agricultural Income Tax)

Article 95-3 (Method of Tax Deduction following Correction due to Wrongful Accounting Handling)

Article 96 (Calculation of Amount of Tax Reduction/Exemption or Tax Deduction)

Section 3 Report and Payment

Article 97 (Report on Tax Base)

Article 98 (Special Cases for Appropriation of Reserve Fund as Losses)

Article 99 (Special Cases for Tax Base Report of Non-Profit Domestic Corporations)

Article 99-2 (Special Cases for Taxation of Income Accruing from Transfer of Assets by Non-profit Domestic Corporations)

Article 100 (Interim Prepayment)

Article 101 (Payment)

Article 102 (Payment in Kind)

Section 4 Settlement, Correction, and Collection

Sub-Section 1 Determination and Correction of Tax Base

Article 103 (Settlement and Correction)

Article 103-2 (Disposition of Warning, Attention, etc. due to Wrongful Accounting Handling)

Article 104 (Estimated Settlement and Correction)

Article 105 (Calculation of Business Revenue Amount at Time of Estimated Settlement or Correction)

Article 106 (Disposition of Income)

Article 107 (Special Cases concerning Estimation of Tax Base and Calculation of Tax Amount)

Article 108 (Determination of Occasional Imposts)

Article 109 (Notification of Tax Base and Tax Amount)

Sub-Section 2 Collection and Return of Tax Amount

Article 110 (Calculation of Amount Returned by Retroactive Deduction of Losses)

Article 110-2 (Calculation of Tax Refund following Correction due to Wrongful Accounting Handling)

Article 111 (Withholding)

Article 112 Deleted.

Article 113 (Amount Subject to Tax Withheld at Source on Amount Equivalent to Interest during Holding Period of Bonds, etc.)

Article 114 Deleted.

Article 114-2 (Tax Withheld at Source and Refund, etc. in Bond Transactions with Repurchase Agreement)

Article 115 (Payment of Withholding Tax Amount)

Article 116 (Succession to Duty to Pay Withholding Tax)

Article 117 (Issuance of Withholding Receipt)

Article 118 Deleted.

Article 119 (Rate of Additional Tax on Nonpayment)

Article 120 (Application of Additional Taxation)

CHAPTER Ⅱ-2 CORPORATE TAX ON INCOME OF FAITHFUL SMALLER CORPORATIONS FOR EACH BUSINESS YEAR

Section 1 Tax Base and Its Calculation

Article 120-2 (Application of Method of Faithful Tax Payment)

Article 120-3 (Establishment, etc. of Business Account)

Article 120-4 (Request, etc. for Application of Faithful Tax Payment Method)

Article 120-5 (Cancellation of Approval on Application of Faithful Tax Payment Method)

Article 120-6 (Faithful Tax Payment Advisory Committee)

Article 120-7 (Special Cases concerning Calculation of Depreciation)

Article 120-8 (Special Cases concerning Calculation of Reserve for Retirement Allowance)

Section 2 Calculation of Tax

Article 120-9 (Deduction of Standard Tax Amount)

Article 120-10 (Tax Deduction for Increase in Revenue)

Section 3 Report and Payment

Article 120-11 (Report, Payment, etc.)

CHAPTER Ⅱ-3 CORPORATE TAX ON INCOME FOR EACH CONSOLIDATED BUSINESS YEAR

Section 1 General Provisions

Article 120-12 (Corporation, etc. Excluded from Application of Consolidated Tax Return System)

Article 120-13 (Request, etc. for Application of Consolidated Tax Return System)

Article 120-14 (Cancellation, etc. of Consolidated Tax Return System)

Article 120-15 (Report of Abandonment of Consolidated Tax Return System)

Article 120-16 (Report of Change of Consolidated Corporation)

Section 2 Tax Base and Calculation Thereof

Article 120-17 (Tax Base)

Article 120-18 (Deferment of Gain or Loss from Transfer of Asset between Consolidated Corporations)

Article 120-19 (Non-Inclusion of Received Dividend in Earnings of Consolidated Corporation)

Article 120-20 (Non-Inclusion of Donation in Earnings of Consolidated Corporation)

Article 120-21 (Non-Inclusion of Entertainment Expense in Loss of Consolidated Corporation)

Section 3 Calculation of Tax Amount

Article 120-22 (Calculation of Calculated Tax Amount of Consolidated Corporation)

Article 120-23 (Reduced or Exempted Tax Amount of Consolidated Corporation)

Section 4 Return and Payment

Article 120-24 (Return of Consolidated Tax Amount)

Article 120-25 (Consolidated Interim Prepayment)

CHAPTER Ⅲ CORPORATE TAX ON LIQUIDATION INCOME OF DOMESTIC CORPORATIONS

Section 1 Tax Base and Its Calculation

Article 120-26 (Scope of Organizational Change for Corporations)

Article 121 (Calculation of Liquidation Income Amount from Dissolution)

Article 122 (Calculation of Amount of Liquidation Income due to Merger)

Article 123 (Calculation of Amount of Liquidation Income due to Division)

Section 2 Report and Payment

Article 124 (Settlement Report)

Article 125 (Interim Report)

Article 126 (Payment)

Article 127 (Duty to Pay Taxes on Liquidation Income)

CHAPTER Ⅳ CORPORATE TAX ON INCOME FOR EACH BUSINESS YEAR OF FOREIGN CORPORATION

Section 1 Tax Base and Its Calculation

Article 128 (Calculation of Tax Base)

Article 129 (Calculation of Income Amount Generated in Korea)

Article 129-2 (Calculation of Transfer Income Amount for Foreign Corporation, etc. having No Place of Business)

Article 129-3 (Calculation of Profit and Loss of Interest Following Money Transaction between Main Office and Branch of Foreign Corporation)

Article 130 (Division of Headquarters Expenses)

Article 131 (Scope of Normal Price)

Article 131-2 (Submission by Foreign Corporations of Data concerning Trading of Securities at Over-the-Counter Market)

Article 132 (Scope of Income Generated from Sources in Korea)

Article 132-2 (Qualifications and Approval for Qualified Foreign Financial Institutions and Matters to be Observed)

Article 133 (Scope of Domestic Place of Business)

Section 2 Calculation of Tax Amount

Article 134 (Calculation of Income Amount Subject to Taxation of Domestic Place of Business)

Article 135 (Tax Deduction Amount for Losses in Disaster of Foreign Corporation)

Section 3 Report, Payment, Settlement, Correction, and Collection

Article 136 (Report of Foreign Corporation)

Article 136-2 Deleted.

Article 137 (Withholding for Foreign Corporations)

Article 138 (Withholding for Investment Broker, etc.)

Article 138-2 (Special Cases on Report, Payment of Tax, etc. on Securities Transfer Income of Foreign Corporations)

Article 138-3 (Special Cases for Withholding Tax on Interest, etc. on Bonds, etc. by Foreign Corporations)

Article 138-4 (Application for Non-Taxation, etc. by Foreign Corporation on Income Generated from Sources in Korea)

Article 138-5 (Procedures for Prior Approval for Application of Non-Taxation, Tax Exemption and Restricted Tax Rates in Tax Treaty)

Article 138-6 (Procedures for Claiming Correction for Application of Non-Taxation, Tax Exemption or Restricted Tax Rate Pursuant to Tax Treaty)

Article 139 (Special Cases to Report and Payment by Foreign Corporation concerning Personal Service Income)

CHAPTER Ⅴ Deleted.

CHAPTER Ⅵ SUPPLEMENTARY PROVISIONS

Article 152 (Report on Establishment or Foundation of Corporation)

Article 153 (Report on Person Responsible for Management)

Article 154 (Registration of Business)

Article 155 (Bookkeeping by Double Entry)

Article 155-2 (Obligations, etc. to Prepare Detailed Statement of Issuance of Donation Receipts and to Keep Them)

Article 156 (Separate Accounting)

Article 157 Deleted.

Article 158 (Receipt and Safekeeping of Documentary Evidence of Expenditures)

Article 159 (Participation, etc. in Credit Card Affiliation)

Article 159-2 (Participation, etc. in Cash Receipt Affiliation)

Article 160 (Making and Keeping List of Stockholders, etc.)

Article 161 (Submission of Detailed Statement on Change of Stocks, etc.)

Article 162 (Submission of Detailed Statement of Payment)

Article 162-2 (Special Cases on Duties of Submitting Detailed Statement of Payment on Foreign Corporation’s Income from Domestic Sources)

Article 163 (Special Cases concerning Submission of Detailed Statement of Payment)

Article 163-2 (Submission, etc. of Aggregate Tax Invoice for Individual Suppliers)

Article 164 (Making and Issuing of Invoice)

Article 165 (Inquiry and Investigation)

ADDENDA

ADDENDA <Presidential Decree No. 16658, Dec. 31, 1999>

ADDENDA <Presidential Decree No. 16703, Feb. 7, 2000>

ADDENDA <Presidential Decree No. 16762, Mar. 28, 2000>

ADDENDA <Presidential Decree No. 16810, May 16, 2000>

ADDENDA <Presidential Decree No. 17033, Dec. 29, 2000>

ADDENDA <Presidential Decree No. 17338, Aug. 14, 2001>

ADDENDA <Presidential Decree No. 17457, Dec. 31, 2001>

ADDENDA <Presidential Decree No. 17791, Dec. 5, 2002>

ADDENDA <Presidential Decree No. 17826, Dec. 30, 2002>

ADDENDA <Presidential Decree No. 18146, Nov. 29, 2003>

ADDENDA <Presidential Decree No. 18174, Dec. 30, 2003>

ADDENDUM <Presidential Decree No. 18312, Mar. 17, 2004>

ADDENDA <Presidential Decree No. 18324, Mar. 22, 2004>

ADDENDA <Presidential Decree No. 18706, Feb. 19, 2005>

ADDENDA <Presidential Decree No. 18736, Mar. 8, 2005>

ADDENDA <Presidential Decree No. 18903, Jun. 30, 2005>

ADDENDA <Presidential Decree No. 18945, Jul. 15, 2005>

ADDENDA <Presidential Decree No. 19010, Aug. 19, 2005>

ADDENDA <Presidential Decree No. 19214, Dec. 30, 2005>

ADDENDA <Presidential Decree No. 19255, Dec. 31, 2005>

ADDENDA <Presidential Decree No. 19328, Feb. 9, 2006>

ADDENDA <Presidential Decree No. 19494, May 30, 2006>

ADDENDA <Presidential Decree No. 19815, Dec. 30, 2006>

ADDENDA <Presidential Decree No. 19891, Feb. 28, 2007>

ADDENDA <Presidential Decree No. 20619, Feb. 22, 2008>

ADDENDA <Presidential Decree No. 20720, Feb. 29, 2008>

ADDENDA <Presidential Decree No. 20763, Apr. 3, 2008>

ADDENDA <Presidential Decree No. 20799, Jun. 5, 2008>

ADDENDA <Presidential Decree No. 20849, Jun. 20, 2008>

ADDENDA <Presidential Decree No. 20930, Jul. 24, 2008>

ADDENDA <Presidential Decree No. 21025, Sep. 22, 2008>

ADDENDA <Presidential Decree No. 21063, Oct. 7, 2008>

ADDENDA <Presidential Decree No. 21302, Feb. 4, 2009>

ADDENDA <Presidential Decree No. 21431, Apr. 21, 2009>

ADDENDA <Presidential Decree No. 21526, Jun. 8, 2009>

ADDENDA <Presidential Decree No. 21528, Jun. 9, 2009>

ADDENDA <Presidential Decree No. 21566, Jun. 26, 2009>

ADDENDA <Presidential Decree No. 21698, Aug. 21 2009>