CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to fairly imposing inheritance tax and gift tax, to ensuring that tax obligations are properly carried out, and to smoothly raising public revenue by prescribing matters concerning requirements and procedures for taxation of inheritance tax and gift tax.
[This Article Newly Inserted on Dec. 15. 2015]
[Previous Article 1 moved to Article 3 <Dec. 15, 2015>]
The terms used in this Act are defined as follows: <Amended on Dec. 22, 2020>
| 1. | The term "inheritance" means inheritance under Part 5 of the Civil Act, which includes the following: |
| (b) | A gift that becomes effective upon the death of a donor under Article 562 of the Civil Act (including a gift where a donor dies while a donated debt is being repaid, which is owed by a decedent to his or her heir within 10 years prior to the date of commencement of inheritance, or is owed by a decedent to a person other than his or her heir within five years prior to the date of commencement of inheritance; hereinafter referred to as " donation mortis causa"); |
| (c) | Distribution of inherited property to a person who has been living in the same household with a decedent under Article 1057-2 of the Civil Act, to a person who has been nursing a decedent and to a person who has had a special relationship with a decedent (hereinafter referred to as "specially related person"); |
| (e) | A trust with successive beneficiaries as provided in Article 60 of the Trust Act (hereinafter referred to as “trust with successive beneficiaries”) |
| 2. | The term "date of commencement of inheritance" means the date of a decedent’ death: Provided, That where inheritance commences as the decedent is declared missing, it means the date on which the decedent’ disappearance is declared; |
| 3. | The term "inherited property" means all the property that is in the hands of a decedent, which includes the following articles and rights: Provided, That those that are exclusively personal to the decedent and cease to exist following the death of the decedent are excluded: |
| (a) | All the articles having economic value that can be converted into money; |
| (b) | All the legal or de facto rights having property value; |
| 5. | The term "legatee" means any of the following persons; |
| (a) | A person to whom a bequest is made; |
| (b) | A person who acquires property through donation mortis causa; |
| (c) | A person who acquires a beneficial interest in a trust as a will substitute or trust with successive beneficiaries; |
| 6. | The term "donation" means a gratuitous transfer (including transfer of property at a remarkably low price) of any tangible or intangible property or rights having economic value to another person by a direct or indirect manner, regardless of the title, form, purpose, etc. of relevant act or transaction, or an increase in the value of another person's property: Provided, That bequests, donations mortis causa, trusts as a will substitute, and trusts with successive beneficiaries are excluded; |
| 7. | The term "donated property" means all the property or profits that pass into the hands of a donee, which includes the following articles, rights, and profits: |
| (a) | All the articles that can be converted into money and have economic value; |
| (b) | All the legal or de facto rights that have property value; |
| (c) | All the economic profits that can be converted into money; |
| 8. | The term "resident" means a person who has an address in Korea or a domicile in Korea for not less than 183 days, and the term "non-resident" means a person other than a resident. In such cases, the definitions of resident and non-resident, matters necessary to determine whether a person is a resident and a non-resident, and other matters shall be prescribed by Presidential Decree; |
| 9. | The term "donee" means a resident (including a non-profit corporation, the head office or main office of which is located in Korea) or a non-resident (including a non-profit corporation, the head office or main office of which is located in a foreign country) who obtains donated property; |
| 10. | The term "specially related person" means a person in a relationship prescribed by Presidential Decree, such as a lineal relationship, economic relationship, controlling management relationship with a principal. In such cases, the principal shall be deemed specially related to the specially related person. |
[This Article Newly Inserted on Dec. 15. 2015]
[Previous Article 2 moved to Article 4 <Dec. 15, 2015>]
| Article 3 (Property Subject to Inheritance Tax) |
Inheritance tax shall be imposed on the following property pursuant to this Act as of the date of commencement of inheritance: <Amended on Dec. 20, 2016>
| 1. | Where a decedent is a resident: All the inherited property; |
| 2. | Where a decedent is a non-resident: All the inherited property in Korea. |
[This Article Wholly Amended on Dec. 15. 2015]
[Moved from Article 1; previous Article 3 Moved to Article 3-2 <Dec. 15, 2015>]
| Article 3-2 (Obligation to Pay Inheritance Tax) |
| (1) | An heir (excluding a profit-making corporation from among specially related persons) or a legatee (excluding a profit-making corporation) shall have an obligation to pay an amount calculated by multiplying a rate prescribed by Presidential Decree by the value of property each has received or is to receive from among inherited property (including donated property an heir or a legatee has received from among the donated property added to inherited property pursuant to Article 13). |
| (2) | Where a specially related person or a legatee is a profit-making corporation and an heir or his or her lineal descendant exists among shareholders or investors (hereinafter referred to as "shareholder, etc.") of the profit-making corporation, the heir or his or her lineal descendant is obliged to pay an amount corresponding to his or her equity calculated as prescribed by Presidential Decree. |
| (3) | An heir or a legatee shall be jointly and severally liable to pay inheritance tax under paragraph (1) within the limits of property each has received or is to receive. |
[This Article Wholly Amended on Dec. 15. 2015]
[Moved from Article 3 <Dec. 15, 2015>]
| Article 4 (Property Subject to Gift Tax) |
| (1) | Gift tax shall be imposed on any of the following donated property pursuant to this Act: <Amended on Dec. 20, 2016> |
| 1. | Property or profits gratuitously transferred; |
| 2. | Profits generated by receiving property or interest by means of transfer at a remarkably low price: Provided, That in cases of a transaction between persons who are not specially related, it shall be limited to where good cause does not exist as a transactional practice; |
| 3. | Profits where the value of property increases after the property is obtained: Provided, That in cases of a transaction between persons who are not specially related, it shall be limited to where good cause does not exist as a transactional practice; |
| 4. | Where Articles 33 through 39, 39-2, 39-3, 40, 41-2 through 41-5, 42, 42-2, or 42-3 are applicable, the property or profits therefrom; |
| 5. | Where Article 44 or 45 is applicable, the property or profits thereunder; |
| 6. | Where the amount of donated property can be calculated by applying mutatis mutandis the provisions listed in subparagraph 4, such as cases in which economic substance is the same as in the provisions listed in subparagraph 4, the property or profits thereunder. |
| (2) | Where Articles 45-2 through 45-5 are applicable, gift tax shall be imposed on the property or profits, by deeming that the property or profits have been donated. |
| (3) | With regard to any property a certain heir obtains in excess of the original share of inheritance as a result of distributing inherited property in consultation with other joint heirs after the share of each heir is fixed by registration, recording, entry of change of a holder in the register, etc. (hereinafter referred to as "registration, etc.") of the inherited property as inheritance commences, gift tax shall be imposed thereon, by deeming that it has been donated by an heir whose share of inheritance decreased due to such distribution: Provided, That where property is obtained in excess of the original share due to distribution by the deadline to file a return of inheritance tax base prescribed in Article 67 and where good cause prescribed by Presidential Decree exists, such as nullification or revocation of the original distribution of inherited property, no gift tax shall be imposed. <Amended on Jun. 9, 2020> |
| (4) | Where a donee returns donated property (excluding money) to a donor according to an agreement between interested parties by the deadline to file a gift tax base prescribed in Article 68 (excluding cases where a tax base and tax amount are determined pursuant to Article 76 before returning the donated property), donation shall be deemed not to have existed from the beginning; and where a donee returns donated property to a donor or re-donates donated property to a donor within three months past the deadline to file a gift tax base prescribed in Article 68, no gift tax shall be imposed on the returned property or re-donated property. <Amended on Jun. 9, 2020> |
[This Article Wholly Amended on Dec. 15. 2015]
[Moved from Article 2; previous Article 4 moved to Article 4-2 <Dec. 15, 2015>]
| Article 4-2 (Obligation to Pay Gift Tax) |
| (1) | A donee is obliged to to pay gift tax on donated property according to the following classifications: <Amended on Dec. 20, 2016; Dec. 31, 2018> |
| 1. | Where the donee is a resident (including a non-profit corporation, the head office or main office of which is located in the Republic of Korea; hereafter in this paragraph the same applies): All the donated property subject to gift tax pursuant to Article 4; |
| 2. | Where the donee is a non-resident (including a non-profit corporation, the head office or main office of which is located in a foreign country; hereafter in paragraph (6) and Article 6 (2) and (3) the same applies): All the donated property in the Republic of Korea subject to gift tax pursuant to Article 4. |
| (2) | Notwithstanding paragraph (1), where any property is deemed to be donated pursuant to Article 45-2 (including cases where the title holder of such property is a profit-making corporation), the actual owner of such property is obliged to pay gift tax on such property. <Newly Inserted on Dec. 31, 2018> |
| (3) | Where income tax under the Income Tax Act or corporate tax under the Corporate Tax Act is imposed on the donee with respect to donated property under paragraph (1), no gift tax shall be imposed. This shall also apply to cases in which income tax or corporate tax is not imposed, or is reduced or exempted pursuant to the Income Tax Act, the Corporate Tax Act or any other statutes. <Amended on Dec. 31, 2018> |
| (4) | Where corporate tax under the Corporate Tax Act is imposed on property or profits donated to a profit-making corporation (including cases where corporate tax is not imposed, or is reduced or exempted pursuant to the Corporate Tax Act or any other statutes), no gift tax shall be imposed on the shareholders, etc. of the relevant corporation, excluding cases prescribed in Articles 45-3 through 45-5. <Amended on Dec. 31, 2018> |
| (5) | Notwithstanding paragraph (1), where Articles 35 through 37 or Article 41-4 apply and paragraph 6 (2) is applicable to a donee, the gift tax shall be fully or partially exempted. <Amended on Dec. 31, 2018; Dec. 31, 2019> |
| (6) | A donor shall be jointly and severally liable to pay gift tax to be paid by a donee in any of the following cases: Provided, That this shall not apply to cases falling under any of Articles 4 (1) 2 and 3, 35 through 39, 40, 41-2 through 41-5, 42, 42-2, 42-3, 45, 45-3 through 45-5, and 48 (only applicable in cases prescribed by Presidential Decree, where a contributor of a public-interest corporation is not responsible for the operation of the relevant public-interest corporation): <Amended on Dec. 31, 2018; Dec. 29, 2020; Dec. 21, 2021> |
| 1. | Where the domicile or residence of the donee is unknown and it is difficult to secure a gift tax claim; |
| 2. | Where the donee is deemed to be unable to pay gift tax and it is difficult to secure a gift tax claim, even though the gift tax is collected forcibly; |
| 3. | Where the donee is a non-resident; |
| 4. | Deleted. <Dec. 31, 2018> |
| (7) | Where a donor is required to pay gift tax pursuant to paragraph (6), the head of the relevant tax office shall notify the donor of the ground therefor. <Amended on Dec. 31, 2018> |
| (8) | This Act shall apply to an association, foundation, or other organization without any legal personality, by deeming it an entity falling under any of the following subparagraphs: <Amended on Dec. 31, 2018> |
| 2. | In other cases not falling under subparagraph 1: A resident or non-resident. |
| (9) | Where an actual owner fails to pay gift tax, additional dues, or a forced collection charge under Article 45-2, and there is a shortage in the amount to be collected even though the gift tax, additional dues or the forced collection charge are collected forcibly from any other property of the actual owner, such gift tax, additional dues, or forced collection charge may be collected from the actual owner as a person liable to pay tax, whose property is deemed donated to a title holder pursuant to Article 45-2, as prescribed in the National Tax Collection Act. <Newly Inserted on Dec. 31, 2018; Dec. 29, 2020> |
[This Article Wholly Amended on Dec. 15. 2015]
[Moved from Article 4; previous Article 4-2 Deleted <Dec. 15, 2015>]
| Article 5 (Location of Inherited Property) |
| (1) | The location of any inherited property or donated property shall be a place determined according to the following classifications: <Amended on Jan. 1, 2013; Dec. 15. 2015; Dec. 20, 2016; Aug. 27, 2019; Dec. 22, 2020; Dec. 21, 2021; Dec. 31, 2022> |
| 1. | Real estate or a right thereto: The location of such real estate; |
| 2. | A mining claim or mining concession right: The location of the mining area; |
| 3. | A fishery right, an aquaculture license, or a right to enter fishing grounds: The coast closest to fishing grounds; |
| 4. | A vessel: The location of the registry of the vessel; |
| 5. | Aircraft: The location of the hangar of the aircraft; |
| 6. | Stocks or equity shares (hereafter in this Article, Article 18-2, Article 18-3, Article 22, Article 39, Article 39-2, Article 39-3, Article 41-2, Article 41-3, Article 41-5, Article 60, Article 63, Article 72-2, and Article 82 referred to as "stocks, etc.") or debentures: The location of the head or main office of the corporation that has issued such stocks, etc., or debentures, or in which such stocks, etc., or debentures have been invested: Provided, That with regard to stocks, equity shares, or debentures issued by a foreign corporation in the Republic of Korea pursuant to domestic Acts, the location of the place of business of the financial company, etc. handling the relevant transactions as defined in subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (hereinafter referred to as “financial company, etc.”); |
| 7. | A monetary trust handled by a person managing a trust business subject to the application of the Financial Investment Services and Capital Markets Act: The location of the place of business that has accepted the relevant trust property: Provided, That with regard to trust property, other than a monetary trust, the location of the trusted property; |
| 8. | Financial property prescribed by Presidential Decree, other than subparagraphs 6 and 7: The location of the business place of the financial company, etc. handling such property; |
| 9. | A monetary claim: The location of the domicile of the debtor: Provided, That this shall not apply in cases falling under subparagraphs 6 through 8; |
| 10. | Tangible property or movables, other than those prescribed in subparagraphs 2 through 9: The location of such tangible property, or the place where the movables are located; |
| 11. | Any right requiring registration, including trademark rights, patent rights, etc.: The location of the administrative body with which such rights are registered; |
| 12. | A copyright (including publishing rights and neighboring rights): Where the subject work of the copyright has been published, the place of such publication; |
| 13. | A right to the business of a person who owns any other place of business, excluding property prescribed in subparagraphs 1 through 12: The location of his or her place of business. |
| (2) | The location of property not stipulated in any subparagraph of paragraph (1) shall be the domicile of the person who holds a right to such property. |
| (3) | Any determination on the location of property prescribed in paragraphs (1) and (2) shall be made, based on circumstances existing as at the time of commencement of inheritance or donation. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 6 (Jurisdiction over Taxation) |
| (1) | Inheritance tax shall be imposed by the head of a tax office (referring to the Director of the Regional Tax Office with respect to matters deemed specifically important by the Commissioner of the National Tax Service; hereinafter referred to as "head of a tax office, etc.") having jurisdiction over the place of the domicile of a decedent (referring to the decedent's residence if his or her domicile does not exist or is unknown; hereinafter referred to as "place of inheritance"): Provided, That when the place of inheritance is in an overseas location, inheritance tax shall be imposed by the head of a tax office, etc. having jurisdiction over the place where the inherited property is located, and where the inherited property extends over jurisdictions of the heads of two or more tax offices, etc., inheritance tax shall be imposed by the head of a tax office, etc. having jurisdiction over the place where the main property is located. |
| (2) | Gift tax shall be imposed by the head of a tax office, etc. having jurisdiction over the place of the domicile of a donee (referring to the donee's residence if his or her domicile does not exist or is unknown; hereafter in this paragraph the same applies): Provided, That in any the following cases, gift tax shall be imposed by the head of a tax office, etc. having jurisdiction over the domicile of the donor: <Amended on Dec. 31, 2018> |
| 1. | Where the donee is a non-resident; |
| 2. | Where the domicile and residence of the donee are unclear; |
| 3. | Where the property is deemed donated pursuant to Article 45-2. |
| (3) | Where any of the following is applicable, gift tax shall be imposed by the head of a tax office, etc. having jurisdiction over the place where the donated property is located: <Amended on Jan. 1, 2014; Dec. 15. 2015> |
| 1. | Where a donee and a donor are both non-residents; |
| 2. | Where address or domicile of both a donee and a donor is unclear; |
| 3. | Where a donee is a non-resident or his or her address or domicile is unclear, and a certain person is regarded as a donor pursuant to Articles 38 (2), 39 (2), 39-3 (2), 45-3, and 45-4. |
[This Article Wholly Amended on Jan. 1, 2010]
CHAPTER II CALCULATION OF BASE AND AMOUNT OF INHERITANCE TAX
SECTION 1 Inherited Property
| Article 7 Deleted. <Dec. 15, 2015> |
| Article 8 (Insurance Proceeds Deemed Inherited Property) |
| (1) | Insurance proceeds on a life insurance or non-life insurance policy receivable upon the death of the decedent under an insurance contract, the policyholder of which is the decedent shall be deemed to be inherited property. |
| (2) | Where a decedent has practically paid the insurance premium although the decedent is not a policyholder, paragraph (1) applies deeming that the decedent is the policyholder. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 9 (Trust Property Deemed Inherited Property) |
| (1) | Property placed in a trust by a decedent shall be deemed inherited property from the decedent: Provided, That the value of a right to receive profits from a trust, which is the value of the property donated to the beneficiary of the trust under Article 33 (1,) is not deemed to be inherited property. <Amended on Dec. 22, 2020> |
| (2) | Where a decedent holds a right to receive profits accruing from a trust from a third party due to the trust, the value corresponding to such profits shall be included in inherited property. |
| (3) | Where a person newly acquires a beneficial interest in a trust with successive beneficiaries upon the death of the beneficiary of the trust with successive beneficiaries, the value of the person’s right to receive profits from the trust is included in the inherited property of the deceased beneficiary. <Newly Inserted on Dec. 22, 2020> |
| (4) | Determinations as to holding of a right to receive profits from a trust and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 22, 2020> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 10 (Retirement Allowances Deemed Inherited Property) |
Retirement grants, allowances, cash awards for merit, pensions, or others similar ones payable to a decedent, which are actually paid upon the death of the decedent, shall be deemed inherited property: Provided, That none of the following shall be deemed inherited property: <Amended on May 20, 2010; Mar. 20, 2018; Dec. 10, 2019>
| 1. | A bereaved family pension or a lump sum return to be paid upon the death of the decedent pursuant to the National Pension Act; |
| 2. | A survivors' pension, a survivors’ disability pension, a survivors’ pension for a public official who died in the line of duty, a survivors’ pension for official duties, a survivors’ pension for a public official who died in the line of duty while under danger, an additional payment to a survivors' pension, a lump-sum survivors' pension, a lump-sum payment to survivors, a survivors’ compensation for a public official who died in the line of duty, a survivors' compensation for official duties, or a survivors’ compensation for a public official who died in the line of duty while under danger, which is paid pursuant to the Public Officials Pension Act, the Public Officials' Accident Compensation Act, or the Pension for Private School Teachers and Staff Act; |
| 3. | A veteran's pension for survivor, survivor’s disability pension, survivor’s pension for line-of-duty death, an additional payment to veteran's pension for survivors, a lump-sum veteran’s pension for survivors, survivor’s lump-sum pension for line-of-duty death, a lump-sum payment on retirement to survivors, disability compensation or death compensation paid under the Military Pension Act or the Military Accident Compensation Act; |
| 4. | A bereaved family compensation pension, lump-sum bereaved family compensation, lump-sum benefits for a bereaved family, special allowances for a bereaved family, or a pension for a pneumoconiosis bereaved family to be paid pursuant to the Industrial Accident Compensation Insurance Act; |
| 5. | Bereaved family compensation or disaster compensation or others similar thereto to be paid by the employer to the bereaved family members of an employee who has died in the course of performing his or her duty, by applying mutatis mutandis the Labor Standards Act, etc.; |
| 6. | Those prescribed by Presidential Decree, which are similar to subparagraphs 1 through 5. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 11 (Non-Taxation of Inheritance Tax on War Dead) |
Where inheritance commences because a person is killed in action or dies while performing his or her official duties prescribed by Presidential Decree, or dies from an injury incurred in action or while performing his or her official duties or dies of disease caused by such injury, no inheritance tax shall be imposed.
[This Article Wholly Amended on Dec. 20, 2016]
| Article 12 (Non-Taxable Inherited Property) |
The following property is exempt from inheritance tax: <Amended on Jun. 8, 2010; Jun. 9, 2020>
| 1. | Property bequeathed (including donations becoming effective due to the death of the decedent; hereinafter referred to as "bequest, etc.") to the State, local governments, or public organizations prescribed by Presidential Decree (hereinafter referred to as "public organization"); |
| 2. | Deleted; <Dec. 31, 2022> |
| 5. | Intra-company labor welfare fund pursuant to the Framework Act on Labor Welfare, or other property similar to such fund bequeathed, etc. to organizations prescribed by Presidential Decree; |
| 6. | Socially accepted and recognized disaster relief funds and goods, medical fees, or other property similar thereto that are property prescribed by Presidential Decree; |
| 7. | Inherited property an heir donates to the State, a local government, or a public organization by the filing deadline specified in Article 67. |
[This Article Wholly Amended on Jan. 1, 2010]
SECTION 3 Taxable Value of Inherited Property
| Article 13 (Taxable Value of Inherited Property) |
| (1) | The taxable value of inherited property shall be an amount calculated by adding the following property value to the value of inherited property, less the amount calculated under Article 14 therefrom. In such cases, if the amount calculated under Article 14 exceeds the value of inherited property, the excess amount shall be deemed nil: <Amended on Jan. 1, 2013> |
| 1. | The value of property donated by a decedent to his or her heir within 10 years prior to the date of commencement of inheritance; |
| 2. | The value of property donated by a decedent to a person other than his or her heir within five years prior to the date of commencement of inheritance. |
| (2) | Where inheritance commences upon the death of a non-resident for purposes of paragraph (1) 1 and 2, the value of property referred to in each subparagraph of paragraph (1) shall be added to the taxable value of inherited property only if the property that is in the Republic of Korea is donated. |
| (3) | The value of property referred to in Articles 46, 48 (1), 52, and 52-2 (1) and the value of donated property excluded from aggregation under Article 47 (1) shall not be included in the value of donated property to be added to the taxable value of inherited property pursuant to paragraph (1). |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 14 (Public Imposts Deducted from Value of Inherited Property) |
| (1) | Where inheritance commences upon the death of a resident, the following values or expenses related to a decedent or inherited property as of the date of commencement of inheritance shall be deducted from the value of inherited property: |
| 3. | Debts (excluding donated debts owed by the decedent to his or her heir within 10 years prior to the date of commencement of inheritance, and donated debts owed by the decedent to a person other than his or her heir within five years prior to the date of commencement of inheritance; hereafter in this Article the same applies). |
| (2) | Where inheritance commences upon the death of a non-resident, the following values or expenses shall be deducted from the value of inherited property: <Amended on Jun. 10, 2010> |
| 1. | Public imposts pertaining to the inherited property concerned; |
| 2. | Debts secured with liens, pledges, right to lease on a deposit basis, right of lease (including cases of conclusion of de facto rental contract), right to property transferred for security for the purposes of the inherited property concerned, debts secured as mortgages or security right prescribed by the Act on Security over Movable Property, Claims, Etc.; |
| 3. | Public imposts and debts for business that are verified by books and records kept at the place of business in the Republic of Korea, if any, as at the time of the decedent's death. |
| (3) | The scope of the public imposts and funeral expenses deducted from the value of inherited property pursuant to paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| (4) | The amount of debts deducted from the value of inherited property pursuant to paragraphs (1) and (2) shall be an amount substantiated according to the methods prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 15 (Presumption of Inheritance to Property Disposed of Prior to Date of Commencement of Inheritance) |
| (1) | Where a decedent has either disposed of his or her property or repaid his or her debts in any of the following cases, such property or debts shall be presumed to have been inherited, and thus, shall be included in the taxable value of inherited property under Article 13: |
| 1. | Where the amount calculated by disposing of the property of the decedent, or that calculated by withdrawing from the property of the decedent is not less than 200 million won calculated according to the types of property within one year prior to the date of commencement of inheritance or not less than 500 million won calculated according to the types of property within two years prior to the date of commencement of inheritance, and the use of such amount is not objectively and clearly verified, as prescribed by Presidential Decree; |
| 2. | Where the total amount of debts repaid by the decedent is either not less than 200 million won within one year before the date of commencement of inheritance, or 500 million won within two years before the date of commencement of inheritance, and the use of such amount is not objectively and clearly verified, as prescribed by Presidential Decree. |
| (2) | Where it is deemed that the heir is not obliged to repay any debt owed by the decedent to a person other than the State, a local government, a financial company, etc. prescribed by Presidential Decree, as prescribed by Presidential Decree, such debt shall be added to the taxable value of inherited property under Article 13. <Amended on Jan. 1, 2013> |
| (3) | The calculation of the amounts, etc. either received by disposing of property under paragraph (1) 1, or withdrawn from such property, and the classification of property types shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
SECTION 4 Non-Inclusion of Property Contributed for Public-Interest in Taxable Value
| Article 16 (Non-Inclusion of Property Contributed to Public-Interest Corporations in Taxable Value of Inherited Property) |
| (1) | The value of property contributed by the filing deadline of an inheritance tax return prescribed in Article 67 (where there are unavoidable reasons prescribed by Presidential Decree, such as the establishment of a public-interest corporation, etc. being delayed for any legal or administrative reason, referring to six months from the last day of the month to which the date such ground ceases to exist belongs), which is the value of property contributed by a decedent or his or her heir among the inherited property to a person who conducts business prescribed by Presidential Decree (hereinafter referred to as "public-interest corporation, etc."), such as business related to religion, charity, academic studies, in consideration of public-interest, shall not be included in the taxable value of inherited property. <Amended on Dec. 20, 2016; Jun. 9, 2020> |
| (2) | Notwithstanding paragraph (1), where a domestic corporation contributes its voting stocks or equity shares (hereafter in this Article referred to as "stocks, etc.") to a public-interest corporation, etc., and the sum of the contributed stocks, etc. and stocks, etc. prescribed in subparagraph 1 exceeds the percentage prescribed in subparagraph 2 of the total number of outstanding voting stocks or the total amount of capital invested (excluding its treasury shares and equity shares; hereafter in this Article referred to as "total number of outstanding stocks, etc.") of the domestic corporation, the value of such excess shall be included in the taxable value of inheritance tax: <Amended on Dec. 19, 2017; Dec. 22, 2020; Dec. 31, 2022> |
| 1. | Stocks, etc.: The following stocks, etc.: |
| (a) | Stocks, etc. of the same domestic corporation owned by the contributor as at the time a donor makes a donation; |
| (b) | Stocks, etc. of the same domestic corporation which the contributor and his or her related party have contributed to a public-interest corporation, etc. other than the relevant public-interest corporation, etc.; |
| (c) | Stocks, etc. of the same domestic corporation owned by another public-interest corporation, etc. to which an heir and his or her related party have contributed his property; |
| 2. | Percentage: 10/100: Provided, That the percentage specified in each item if any of the following is applicable: |
| (a) | Where he or she makes a contribution to a public-interest corporation, etc. which satisfies all of the following requirements (excluding public-interest corporations, etc. falling under item (b) or item (c)): 20/100: |
| i) | It shall not exercise voting rights of stocks, etc. contributed; |
| ii) | It shall aim at charity, the promotion of learning or social welfare; |
| (b) | A public-interest corporation, etc. which has a special relationship with a business group subject to limitations on cross shareholding under Article 31 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as "business group subject to limitations on cross shareholding"): 5/100 |
| (c) | A public-interest corporation, etc. which does not satisfy the requirements provided in the subparagraphs of Article 48 (11): 5/100 |
| (3) | Notwithstanding paragraph (2), in any of the following cases, even if a donation exceeds the percentage prescribed in paragraph (2) 2 of the total number of outstanding stocks, etc. of the domestic corporation, no value of such excess shall be included in the taxable value of inheritance tax: <Amended on Dec. 20, 2016; Dec. 19, 2017; Dec. 22, 2020> |
| 1. | Where he or she contributes stocks, etc. of the domestic corporation which does not have a special relationship with a contributor to a public-interest corporation, etc. that falls under the proviso, with the exception of subparagraphs, of Article 49 (1) and does not have a special relationship with a business group subject to limitations on cross shareholding, in which case the competent authority deems the contribution necessary in order to efficiently engage in the intended business of the public-interest corporation, etc.; |
| 2. | Where he or she contributes stocks, etc. in excess of percentages prescribed in the items of paragraph (2) 2 of the total number of outstanding stocks, etc. to a public-interest corporation, etc. (including cases where a public-interest corporation receives stocks, etc. contributed within three months from the date of its incorporation, and meet the relevant requirements within two years from the date when the business year in which it is incorporated ends) which does not have a special relationship with a business group subject to limitations on cross shareholding and meet the requirements provided in the subparagraphs of Article 48 (11) and, in which case the public-interest corporation, etc. sells stocks, etc. (excluding cases where it sells stocks, etc. to a person who has contributed stocks, etc. or a person who has a special relationship with him or her) which have been contributed, in excess of the designated percentage within three years from the date it holds stocks, etc. in excess of the designated percentage; |
| 3. | Where he or she contributes stocks, etc. of a domestic corporation pursuant to the Act on the Establishment and Operation of Public-Interest Corporations and other statutes and regulations. |
| (4) | Where the value of property contributed to a public-interest corporation, etc. is not included in the taxable value of inherited property under paragraphs (1) through (3), and any of the following is applicable, the value prescribed by Presidential Decree shall be included in the taxable value of inherited property: <Newly Inserted on Dec. 20, 2016; Dec. 19, 2017> |
| 1. | Where property not included in the taxable value of inherited property and all or some of profits generated from the property are vested in an heir (including a person who has a special relationship with the heir); |
| 2. | In cases falling under paragraph (3) 2, where a public-interest corporation does not sell stocks, etc. (excluding cases where it sells stocks, etc. to a person who has contributed stocks, etc. or a person who has a special relationship with him or her) which have been contributed, in excess of percentages prescribed in the items of paragraph (2) 2 of the total number of outstanding stocks, etc. within three years from the date it holds stocks, etc., in excess of the designated percentage. |
| (5) | Methods for contributing inherited property prescribed in paragraphs (1) through (4), the scope of the total number of outstanding stocks, etc., methods for calculating the value in excess of the percentage prescribed in paragraph (2) 2 of the total number of outstanding stocks, etc., the scope of public-interest corporations, etc. which do not have a special relationship with a business group subject to limitations on cross shareholding, the scope of domestic corporations which do not have a special relationship with a contributor to the relevant public-interest corporation, etc., the scope of public-interest corporations, etc. which meet requirements prescribed in paragraph (2) 2 (a), and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 20, 2016; Dec. 19, 2017; Dec. 22, 2020> |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 20, 2016]
| Article 17 (Non-Inclusion of Property Placed in Public Trust in Taxable Value of Inheritance) |
| (1) | The value of inherited property, a decedent or his or her heir contributes to a public-interest corporation, etc. through a public trust subject to the Public Trust Act, being a trust for such purposes as religious, charitable, academic or other public-interest (hereafter in this Article referred to as "public trust") shall not be included in the taxable value of inheritance. <Amended on Jul. 25, 2011; Mar. 18. 2014> |
| (2) | For purposes of paragraph (1), the scope and operation of public trusts, time of contribution to trusts, and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
SECTION 5 Inheritance Deduction
| Article 18 (Basic Deduction) |
Where inheritance commences upon the death of a resident or non-resident, 200 million won shall be deducted from the taxable value of inheritance tax.
[This Article Wholly Amended on Dec. 31, 2022]
| Article 18-2 (Deduction for Succession to Family Business) |
| (1) | Where inheritance commences upon the death of a resident and such inheritance qualifies for succession to a family business (hereinafter referred to as “succession to a family business”) [which means a small and medium enterprise prescribed by Presidential Decree or a middle-standing enterprise prescribed by Presidential Decree (excluding any enterprise whose average sales in the three taxable periods of income tax or the three business years of corporate tax immediately preceding the taxable period of income tax or business year of corporate tax in which inheritance commences is 500 billion won or more; hereinafter in this Article the same applies) that is managed by a decedent for at least 10 consecutive years; hereinafter in this Article the same applies], an amount corresponding to the value of inherited property on succession to the family business is deducted from the taxable value of inheritance tax. In such cases, the amount to be deducted shall not exceed the following amount: |
| 1. | Where the decedent has managed the enterprise for a period of at least 10 consecutive but not exceeding 20 years: 30 billion won; |
| 2. | Where the decedent has managed the enterprise for a period of at least 20 years but not exceeding 30 years: 40 billion won; |
| 3. | Where the decedent has managed the enterprise for a period of at least 30 years: 60 billion won. |
| (2) | Notwithstanding paragraph (1), where a family business falls within middle-standing enterprises and the value of property other than the inherited property on succession to the family business an heir inherits or is to inherit exceeds the amount calculated by multiplying the amount to be paid by the heir as inheritance tax by the percentage prescribed by Presidential Decree, deductions prescribed in paragraph (1) (hereinafter referred to as “deduction for succession to a family business”) do not apply to the inherited property on succession to the family business the heir inherits or is to inherit. |
| (3) | An heir who intends to receive a deduction for succession to a family business shall submit documents supporting that the succession qualifies for succession to a family business to the head of the tax office having jurisdiction over the place of tax payment, pursuant to Article 67 (2). |
| (4) | For purposes of paragraphs (1) and (2), the scope of succession to a family business, such as requirements for decedents and heirs, and the methods for filing an application in cases of inheriting stocks, etc., the scope of inherited property on succession to a family business and inherited property other than inherited property on succession to a family business, methods for calculating amounts to be paid as inheritance tax by heirs who succeeds or is to succeeds to a family business, and other necessary matters shall be prescribed by Presidential Decree. |
| (5) | Where an heir who has received a deduction for succession to a family business falls under any of the following within five years from the date of commencement of inheritance without good cause prescribed by Presidential Decree, an amount (referring to an amount additionally multiplied by the rate of disposal of property for the family business in cases falling under subparagraph 1) calculated by multiplying an amount deducted under paragraph (1) by the percentage prescribed by Presidential Decree in consideration of the period of up to the relevant date shall be included in the taxable value of inheritance tax at the time of commencement of the inheritance for the purposes of imposing inheritance tax. In such cases, an amount corresponding to interest calculated as prescribed by Presidential Decree shall be added to the inheritance tax to be imposed: |
| 1. | Where the heir has disposed of at least 40/100 of the property for the family business; |
| 2. | Where the heir ceases to engage in the family business; |
| 3. | Where the equity of the heir who has inherited stocks, etc. has decreased: Provided, That this shall not apply where the heir’s equity has decreased as the heir pays inherited stocks, etc. in kind under Article 73, however, in which cases, the heir shall be the largest shareholder or the largest investor referred to in Article 22 (2); |
| 4. | Where both of the following subparagraphs are satisfied: |
| (a) | Where the average of the total number of regular employees prescribed by Presidential Decree (hereafter in this Article referred to as “regular employees”) for five years from the date of commencement of inheritance falls short of 90/100 of the average of numbers of regular employees in the two taxable periods of income tax or two business years of corporate tax immediately preceding the taxable period of income tax or the business year of corporate tax, in which inheritance commences: |
| (b) | Where the amount of total salaries prescribed by Presidential Decree (hereafter in this item referred to as “total salaries”) for five years from the date of commencement of inheritance short of 90/100 of total salaries in the two taxable periods of income tax or two business years of corporate tax immediately preceding the taxable period of income tax or the business year of corporate tax, in which inheritance commences. |
| (6) | The heir who has received a deduction for succession to a family business shall submit the details about property for the family business, the family business, and equity to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. |
| (7) | For purposes of paragraph (5), the scope of property for a family business, methods for calculating the rate of disposal of property for a family business, methods for determining whether the heir engages in a family business and the heir’s equity has decreased, calculation of the average of the numbers of regular employees, and other necessary matters shall be prescribed by Presidential Decree. |
| (8) | The following applies if a decedent or his or her heir has been sentenced to imprisonment with labor or a fine prescribed by Presidential Decree for tax evasion or accounting fraud in relation to the management of the decedent or heir’s family business (referring to committing any offences prescribed in Article 3 (1) of the Punishment of Tax Offenses Act or Article 39 (1) of the Act on External Audit of Stock Companies for a limited period of 10 years before the date of commencement of inheritance or five years from the date of commencement of inheritance; hereafter in Article 18-3 the same applies) and such sentence becomes final: |
| 1. | Where the sentence imposed on the decent or heir becomes final before a tax base and tax rate are determined under Article 76: Do not apply a deduction for succession to a family business: |
| 2. | Where the sentenced imposed on the heir becomes final after the heir has received a deduction for succession to a family business: To include the amount of such deduction in the taxable value of inheritance tax at the time of commencement of inheritance and impose the inheritance tax accordingly. In such cases, an amount corresponding to interest calculated as prescribed by Presidential Decree shall be added to the inheritance tax to be imposed. |
| (9) | Where paragraph (5) or paragraph (8) 2 is applicable to an heir, a person liable to pay inheritance tax shall file a return with the head of a tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within six months from the last day of the month during which any subparagraph of paragraph (5) or paragraph (8) 2 becomes applicable to the heir, and pay the inheritance tax and an amount corresponding to interest to the head of the tax office having jurisdiction over the place of tax payment, the Bank of Korea, or any postal office: Provided, That this shall not apply where the person has already paid the inheritance tax and an amount corresponding to interest imposed under paragraph (5) or paragraph (8) 2. |
| (10) | Where there is any capital gains tax paid or payable under Article 97-2 (4) of the Income Tax Act when imposing inheritance tax under paragraph (5) or paragraph (8) 2, an amount corresponding to the capital gains tax calculated as prescribed by Presidential Decree is deducted from the calculated amount of inheritance tax: Provided, That where the amount remaining after such deduction is negative, it is deemed zero. |
[This Article Newly Inserted on Dec. 31, 2022]
| Article 18-3 (Deduction for Succession to Farming) |
| (1) | Where inheritance commences upon the death of a resident and the inheritance qualifies for succession to farming prescribed by Presidential Decree [including stocking farming, fishing farming, and forestry; hereafter in this Article the same applies] (hereinafter referred to as “succession to farming”), an amount (which shall not exceed the maximum of three billion won) corresponding to the value of the inherited property on succession to farming shall be deducted from the taxable value of inheritance tax. |
| (2) | An heir who intends to receive a deduction for succession to farming under paragraph (1) (hereinafter referred to as “deduction for succession to farming”) shall submit documents supporting that the succession qualifies for succession to farming to the head of the tax office having jurisdiction over the place of tax payment, pursuant to Article 67 (2). |
| (3) | For purposes of paragraph (1), the scope of succession to farming, such as requirements for decedents and heirs, and the methods of filing an application in cases of inheriting stocks, etc., and other necessary matters shall be prescribed by Presidential Decree. |
| (4) | Where an heir who has received a deduction for succession to farming falls under any of the following subparagraphs within five years from the date of commencement of inheritance without good cause prescribed by Presidential Decree, an amount calculated by multiplying an amount deducted under paragraph (1) by the percentage prescribed by Presidential Decree in consideration of the period of up to the relevant date is included in the taxable value of inheritance tax at the time the inheritance commences for the purposes of imposing inheritance tax. In such cases, an amount corresponding to interest calculated as prescribed by Presidential Decree shall be added to the inheritance tax to be imposed: |
| 1. | Where the heir has disposed of the inherited property eligible for a deduction for succession to farming (hereinafter referred to as “inherited property on succession to farming”); |
| 2. | Where the heir ceases to engage in farming. |
| (5) | For purposes of paragraph (4), the scope of inherited property on succession to farming, methods of determining whether the heir engages in farming, and other necessary matters shall be prescribed by Presidential Decree. |
| (6) | The following applies if a decedent or his or her heir has been sentenced to imprisonment with labor or a fine prescribed by Presidential Decree for tax evasion or accounting fraud in relation to the management of the decedent or heir’s farming and such sentence becomes final: |
| 1. | Where the sentence imposed on the decent or heir becomes final before a tax base and tax rate are determined under Article 76: Do not apply a deduction for succession to farming: |
| 2. | Where the sentenced imposed on the heir becomes final after the heir has received a deduction for succession to farming: To include the amount of such deduction in the taxable value of inheritance tax at the time of commencement of inheritance and impose the inheritance tax accordingly. In such cases, an amount corresponding to interest calculated as prescribed by Presidential Decree is added to the inheritance tax to be imposed. |
| (7) | Where paragraph (4) or paragraph (6) 2 is applicable to an heir, a person liable to pay inheritance tax shall file a return with the head of a tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within six months from the last day of the month during which any subparagraph of paragraph (4) or paragraph (6) 2 becomes applicable to the heir, and pay the inheritance tax and an amount corresponding to interest to the head of the tax office having jurisdiction over the place of tax payment, the Bank of Korea, or any postal office: Provided, That this shall not apply where the person has already paid the inheritance tax and an amount corresponding to interest imposed under paragraph (4) or paragraph (6) 2. |
[This Article Newly Inserted on Dec. 31, 2022]
| Article 18-4 (Exclusion of Simultaneous Application of Deduction for Succession to Family Business and Deduction for Succession to Farming) |
[This Article Newly Inserted on Dec. 31, 2022]
| Article 19 (Inheritance Deduction for Surviving Spouse) |
| (1) | The actual amount inherited by a surviving spouse as inheritance commences upon the death of a resident shall be deducted from the taxable value of inherited property within the limit of a smaller amount of the following: <Amended on Dec. 20, 2016> |
| 1. | Ceiling amount calculated in accordance with the following formula: |
Ceiling amount = (A-B+C) x D-E
A: Value of inherited property prescribed by Presidential Decree;
B: Value of property bequeathed, etc. to a legatee who is not an heir among the inherited property;
C: Value of property prescribed in Article 13 (1) 1; D: Spouse's statutory share in inheritance prescribed in Article 1009 of the Civil Act (where any of coheirs has renounced his or her inheritance, referring to the spouse's statutory share in inheritance unless such person has renounced his or her inheritance); E: Gift tax base prescribed in Article 55 (1) on the property donated to the spouse in advance among donated property added to the inherited property pursuant to Article 13. | (2) | An inheritance deduction for a surviving spouse under paragraph (1) shall apply where the inherited property is divided (in cases requiring the registration, entry, or change of holders, limited to those who have completed registration, entry, or change of holders; hereafter in this Article the same applies) by the date on which nine months elapse from the following day of the filing deadline of an inherited tax base return prescribed in Article 67 (hereafter in this Article referred to as "division deadline of the inherited property of a spouse"): Provided, That an heir shall report the fact that the inherited property has been divided, if any, to the head of the tax office having jurisdiction over the place of tax payment by no later than the division deadline of the inherited property of a spouse. <Amended on Dec. 22, 2020> |
| (3) | Notwithstanding paragraph (2), if it is not feasible to divide the inherited property of a spouse by the division deadline of the inherited property of a spouse due to any unavoidable reason prescribed by Presidential Decree, and the inherited property is divided and a report thereon is filed by the date on which six months elapse from the following day of the division deadline of the inherited property of a spouse (if there exists any inevitable ground, such as filing of a lawsuit or an administrative appeal, the date on which the lawsuit or administrative appeal is concluded) (where the tax base and amount of tax prescribed in Article 76 are decided after six months from the following day of the division deadline of the inherited property of a spouse, it refers to the date of such decision), the inherited property of the spouse is deemed to have been divided by the division deadline of the inherited property of a spouse: Provided, That this shall be limited to such cases where an heir reports the unavoidable reason to the head of the tax office having jurisdiction over the place of tax payment by the division deadline of the inherited property of a spouse, as prescribed by Presidential Decree. <Amended on Jan. 1, 2014; Dec. 31, 2019; Jun. 9, 2020> |
| (4) | Where no actual amount is inherited by the surviving spouse or the amount inherited by the surviving spouse is less than 500 million won in cases falling under paragraph (1), 500 million won shall be deducted, notwithstanding paragraph (2). |
[This Article Wholly Amended on Jan. 1, 2010]
[Paragraph (3) of this Article was amended by Act No. 12168 promulgated on January 1, 2014 pursuant to the decision on unconstitutionality by the Constitutional Court made on May 31, 2012]
| Article 20 (Other Personal Deduction) |
| (1) | Where inheritance commences upon the death of a resident and any of the following is applicable, an amount corresponding to the following shall be deducted from the taxable value of inheritance. In such cases, where a person falling under subparagraph 1 falls under subparagraph 2, or where a person falling under subparagraph 4 falls under subparagraphs 1 through 3 or Article 19, the sum of such amounts shall be deducted from the taxable value of inheritance: <Amended on Dec. 27, 2010; Dec. 15. 2015; Dec. 20, 2016; Dec. 31, 2022> |
| 1. | With respect to one child (including a fetus), 50 million won; |
| 2. | With respect to a minor (including a fetus) among heirs (excluding a spouse) and family members living together, an amount calculated by multiplying 10 million won by the number of years until he or she becomes 19 years of age; |
| 3. | With respect to a person who is at least 65 years of age among heirs (excluding a spouse) and family members living together, 50 million won; |
| 4. | With respect to a person with a disability among heirs and family members living together, an amount calculated by multiplying 10 million won by the number of years of life expectancy by gender and by age according to the statistical chart approved and publicly notified by the Commissioner of the Statistics Korea pursuant to Article 18 of the Statistics Act as at the date inheritance commences. |
| (2) | The scope of cohabiting family members referred to in paragraph (1) 2 through 4, and of a person with a disability referred to in paragraph (1) 4, and matters necessary to submit supporting documents to receive deductions under paragraph (1) shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2022> |
| (3) | For purposes of paragraph (1) 2 through 4, a period of less than one year shall be calculated as one year. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 21 (Blanket Deduction) |
| (1) | Where inheritance commences upon the death of a resident, the heir or legatee may deduct, from the taxable value, whichever is the larger of the total amount of deductions stipulated under Article 18 and Article 20 (1), and 500 million won: Provided, That where no return is filed under Article 67 of this Act or Article 45-3 of the Framework Act on National Taxes, 500 million shall be deducted therefrom. <Amended on Dec. 31, 2019; Dec. 31, 2022> |
| (2) | For purposes of paragraph (1), where the surviving spouse of the decedent is the sole heir, only the total amount of the deductions stipulated under Articles 18 and 20 (1) shall be deducted. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 22 (Inheritance Tax Deduction for Financial Property) |
| (1) | Where the value of financial property prescribed by Presidential Decree (hereafter in this Article referred to as "value of net financial property") less a financial debt prescribed by Presidential Decree remains among the value of the inherited property as of the date of commencement of inheritance when inheritance takes place upon the death of a resident, the amount according to the following classifications shall be deducted from the taxable value of inherited property, but when such amount exceeds 200 million won, 200 million shall be deducted therefrom: |
| 1. | Where the value of the net financial property exceeds 20 million won: whichever is the larger of an amount corresponding to 20/100 of the value of the relevant net financial property and 20 million won; |
| 2. | Where the value of the net financial property is not more than 20 million won: the value of the relevant net financial property. |
| (2) | The financial property under paragraph (1) does not include stocks, etc. held by the largest shareholder or largest investor prescribed by Presidential Decree and financial property in another person's name that is not reported by the filing deadline of an inheritance tax base return under Article 67. <Amended on Dec. 15. 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 23 (Casualty Loss Deduction) |
| (1) | Where inheritance commences upon the death of a resident and inherited property is destroyed or damaged due to any disaster prescribed by Presidential Decree within the filing deadline under Article 67, the value of the loss shall be deducted from the taxable value of inherited property: Provided, That this shall not apply where the amount corresponding to the value of the loss can be compensated for by such means as receiving insurance proceeds or exercising a right of indemnity. |
| (2) | An heir or legatee who intends to get a loss deduction pursuant to paragraph (1) shall submit a statement specifying the value and details of the loss and supporting documents to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 23-2 (Inheritance Tax Deduction for House in which Decedent and Heir Have Lived Together) |
| (1) | Where inheritance commences upon the death of a resident and all of the following requirements are met, an amount corresponding to 100/100 of the value of an inherited house (referring to the value including the value of land annexed to the house prescribed in Article 89 (1) 3 of the Income Tax Act, but excluding the amount of debt secured by the house and land annexed to the house as of the date of commencement of inheritance) shall be deducted from the taxable value of inheritance: Provided, That the deductible amount shall be limited to 600 million won: <Amended on Dec. 27, 2010; Jan. 1, 2013; Jan. 1, 2014; Dec. 15. 2015; Dec. 20, 2016; Dec. 31, 2019; Dec. 21, 2021> |
| 1. | That a decedent and his or her heir (limited to the decedent’s lineal descendant and the spouse of the lineal descendant who becomes an heir under Article 1003 (2) of the Civil Act; hereafter in this Article the same applies) shall have lived together in one and the same house continuously for at least 10 years retroactively from the date of commencement of inheritance (excluding the period during which the heir has been a minor); |
| 2. | That while a decedent and his or her heir have formed a household continuously for at least 10 years retroactively from the date of commencement of inheritance, they shall have met the requirements of one house for one household prescribed by Presidential Decree (hereafter in this Article referred to as “one house for one household”). In such cases, if there exists a period during which they have not owned a house, such period shall be included in the period meeting the requirements of one house for one household under the fore part; |
| 3. | That it shall be a house inherited by an heir who owns no house or has been living together with the decedent while owning one house jointly with the decedent under the same household as of the date of commencement of inheritance. |
| (2) | Where a decedent and his or her heir have not been able to live together due to any ground prescribed by Presidential Decree for purposes of paragraph (1), they are deemed to have lived together continuously, but the period during which they have not lived together shall not be included in the period of living together under that paragraph. |
| (3) | Where one household temporarily owns two houses, methods of determining a house in which family members live together, and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 20, 2016> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 24 (Limitation on Deduction to Be Applied) |
The amount deductible under Article 18, Article 18-2, Article 18-3, Articles 19 through 23, and Article 23-2 shall be limited to an amount calculated by subtracting any of the following values from the taxable value of inheritance under Article 13: Provided, That subparagraph 3 is applicable if the taxable value of inheritance exceeds 500 million won: <Amended on Dec. 27, 2010; Dec. 15. 2015; Dec. 31, 2022> | 1. | Value of the property bequeathed, etc. to any person other than the heir with higher priority; |
| 2. | Value of the property inherited to the heir in line, due to the renunciation of inheritance by the heir with higher priority; |
| 3. | Value of the donated property added to the taxable value of inherited property under Article 13 (where any amount is deducted under Article 53 or 54, referring to the value minus the deducted amount from the value of such donated property). |
[This Article Wholly Amended on Jan. 1, 2010]
SECTION 6 Tax Base and Tax Rate
| Article 25 (Tax Base and Minimum Threshold of Inheritance Tax) |
| (1) | The tax base of inherited property shall be the amount minus the following amount from the taxable value of inherited property pursuant to Article 13: <Amended on Dec. 31, 2022> |
| 2. | Appraisal and assessment fees of inherited property prescribed by Presidential Decree. |
| (2) | When the tax base is less than 500,000 won, no inheritance tax shall be imposed. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 26 (Inheritance Tax Rates) |
Inheritance tax shall be the amount (hereinafter referred to as "calculated amount of inheritance tax") calculated by applying the following tax rates to the tax base of inherited property under Article 25: | Tax Bases | Tax Rates | | 100 million won and less | 10/100 of the tax base | Over 100 million won,
but not more than 500 million won | 10 million won + (20/100 of amount exceeding 100 million won) | Over 500 million won,
but not more than 1 billion won | 90 million won + (30/100 of amount exceeding 500 million won) | Over 1 billion won,
but not more than 3 billion won | 240 million won + (40/100 of amount exceeding 1 billion won) | | Over 3 billion won | 1 billion 40 million won + (50/100 of amount exceeding 3 billion won) |
|
[This Article Wholly Amended on Jan. 1, 2010]
| Article 27 (Extra Taxation on Generation-Skipping Inheritance) |
Where an heir or legatee is a lineal descendant, other than a child of a decedent, an amount corresponding to 30/100 (40/100 where the value of inheritance an heir or a legatee who is a lineal descendant of a decedent other than a child and is a minor has received or is to receive, exceeds two billion won) of the amount calculated by multiplying the proportion of the property the heir or legatee has received or is to receive among inheritance (including donated property received by an heir or a legatee among the donated property added to inheritance pursuant to Article 13; hereafter in this Article the same applies) by the amount of inheritance tax calculated under Article 26: Provided, That the same shall not apply to inheritance by representation under Article 1001 of the Civil Act. <Amended on Dec. 15. 2015; Dec. 20, 2016> [This Article Wholly Amended on Jan. 1, 2010]
| Article 28 (Gift Tax Credit) |
| (1) | The amount of gift tax (referring to the calculated amount of gift tax on the donated property as at the time of donation) on the donated property added to inherited property pursuant to Article 13 shall be deducted from the calculated amount of inheritance tax: Provided, That this shall not apply where no gift tax is imposed on the donated property added to the taxable value of inheritance due to the expiry of the period stipulated under Article 26-2 (4) or (5) of the Framework Act on National Taxes, and where the taxable value of inheritance does not exceed 500 million won. <Amended on Dec. 15. 2015; Dec. 31, 2019> |
| (2) | The ceiling amount of gift tax to be deducted under paragraph (1) shall be calculated by multiplying the rate of tax base of donated property that is added in the tax base of inherited property (including the donated property to be added to the inherited property under Article 13; hereafter in this paragraph the same applies) by the calculated amount of inheritance tax. In such cases, where the donee of such donated property is the heir or legatee, within limits of the amount calculated by multiplying the rate of the tax base of the donated property that is added to the tax base calculated, as prescribed by Presidential Decree, in inherited property received or to be received by such heir or legatee, by the amount of inheritance tax to be paid by each respective heir or legatee, a deduction shall be made from the amount of inheritance tax to be paid by each. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 29 (Foreign Tax Credit) |
Where inheritance tax is to be imposed upon the death of a resident and inheritance tax has been imposed on any inherited property in a foreign country pursuant to statutes and regulations of such foreign country, an amount corresponding to the imposed inheritance tax shall be deducted from the calculated amount of inheritance tax, as prescribed by Presidential Decree.
[This Article Wholly Amended on Jan. 1, 2010]
| Article 30 (Tax Credit for Short-Term Re-Inheritance) |
| (1) | Where inheritance re-commences upon the death of a heir or legatee within 10 years after the commencement of inheritance, an amount corresponding to inheritance tax previously imposed on the inherited property (including donated property that the heir or legatee receives among donated property added to inherited property under Article 13; hereafter in this Article the same applies) to be re-inherited among the inherited property on which the inheritance tax previously imposed shall be deducted from the calculated amount of inheritance tax. <Amended on Dec. 31, 2019> |
| (2) | The amount of tax to be deducted under paragraph (1) shall be calculated by multiplying the amount calculated under subparagraph 1 by the credit rate under subparagraph 2: <Amended on Dec. 31, 2019> |
| Value of
re-inherited property | × | Taxable value of previously inherited property | | | Calculated amount of previous inheritance tax | × | | | Value of previously Inherited property | | Taxable value of previously inherited property |
|
| Period of re-inheritance | Credit Rates | | Within one year | 100 percent | | Within two years | 90 percent | | Within three years | 80 percent | | Within four years | 70 percent | | Within five years | 60 percent | | Within six years | 50 percent | | Within seven years | 40 percent | | Within eight years | 30 percent | | Within nine years | 20 percent | | Within 10 years | 10 percent |
|
| (3) | An amount of tax deducted under paragraph (1) shall not exceed the calculated amount of inheritance tax, less an amount of gift tax deducted under Article 28 and an amount of tax paid in a foreign country under Article 28. <Amended on Dec. 31, 2019> |
[This Article Wholly Amended on Jan. 1, 2010]
CHAPTER III CALCUALATION OF BASE AND AMOUNT OF GIFT TAX
SECTION 1 Donated Property
| Article 31 (General Principles for Calculation of Value of Donated Property) |
| (1) | The value of donated property (hereinafter referred to as "value of donated property") shall be calculated according to the following methods: |
| 1. | Where property or profits are earned by gratuitous transfer: An amount corresponding to the market value of donated property (referring to the value assessed pursuant to Chapter IV; hereafter in this Article, Articles 35 and 42 the same applies); |
| 2. | Where property or profits are earned by transfer at a substantially low price or are transferred at a substantially high price: An amount corresponding to the difference between the market value and the price actually paid: Provided, That this shall be limited to where the difference between the market value and the price actually paid is 300 million won or more or the difference is 30/100 or more of the market value; |
| 3. | Where the value of property increases after the property is acquired: The amount of increase in the value of property calculated according to the methods prescribed by Presidential Decree, which is the difference between the market value of property before and after reasons for increase occur: Provided, That this shall be limited to where the amount of increase in the value of property is 300 million won or more or is 30/100 or more of the amount prescribed by Presidential Decree, in consideration of the acquisition price of such property, etc. |
| (2) | Notwithstanding paragraph (1), where Article 4 (1) 4 through 6 and paragraph (2) of that Article are applicable, the value of donated property shall be calculated in accordance with the relevant provisions. |
[This Article Wholly Amended on Dec. 15, 2015]
| Article 32 (Time of Acquisition of Donated Property) |
The time of acquisition of donated property means the date prescribed by Presidential Decree, such as the date on which the property is transferred or actually used except in cases where Articles 33 through 39, 39-2, 39-3, 40, 41-2 through 41-5, 42, 42-2, 42-3, 44, 45, and 45-2 through 45-5 apply. [This Article Wholly Amended on Dec. 15, 2015]
| Article 33 (Donation of Profit from Trust) |
| (1) | Where a trustor has designated another person as a beneficiary to receive all or part of profits from a trust in a trust agreement, and where any of the following is applicable, the value of a right to receive the profits from the trust is the value of property donated to the beneficiary deeming the date prescribed by Presidential Decree, such as the date on which the principal and profits are actually paid to the beneficiary, to be the date of donation: <Amended on Jan. 1, 2014; Dec. 15, 2015> |
| 1. | Where the beneficiary receives principal where the beneficiary is allowed to hold a right to receive the principal; |
| 2. | Where the beneficiary receives profits where the beneficiary is allowed to hold a right to receive the profits. |
| (2) | Where a beneficiary is not specified or no beneficiary exists, a trustor or his or her heir shall be deemed a beneficiary, and where a beneficiary is either specified or exists, paragraph (1) shall apply by deeming that a new trust exists. <Amended on Dec. 15, 2015> |
| (3) | The method of calculating the value of donated property where principal and profits are received in several installments for purposes of paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 34 (Donation of Insurance Proceeds) |
| (1) | Where an event (including payment of insurance proceeds at maturity) insured by life insurance or non-life insurance occurs, the following amount shall be the value of donated property by deeming the date on which relevant insurance event occurs to be the date of donation: <Amended on Dec. 15, 2015> |
| 1. | Where a beneficiary of insurance proceeds is different from the payer of insurance premiums (including cases in which a person other than a beneficiary of insurance proceeds has paid part of the premiums): An amount corresponding to the insurance proceeds corresponding to the premiums paid by a person other than a beneficiary of insurance proceeds; |
| 2. | Where a beneficiary has paid premiums after having been donated property during the period of insurance contract: An amount calculated by subtracting the premiums paid out of donated property from an amount corresponding to insurance proceeds corresponding to the premiums paid out of donated property. |
| (2) | Paragraph (1) shall not apply if insurance proceeds are deemed to be inherited property under Article 8. |
| (3) | Deleted. <Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 35 (Donation of Profit from Acquisition at Low Price or Transfer at High Price) |
| (1) | Where property (excluding property prescribed by Presidential Decree, such as convertible bonds; hereafter in this Article the same applies) is acquired at a price below the market value or is transferred at a price above the market value between specially related persons, and where the difference between the price actually paid or received and the market value is the same as or above the standard amount prescribed by Presidential Decree (hereafter in this paragraph referred to as "standard amount"), an amount calculated by subtracting the standard amount from the difference between the price actually paid or received and the market value, by regarding the date of acquisition or the date of transfer of the relevant property as the date of donation, shall be the price of property donated to the person who earns profits from such acquisition or transfer. |
| (2) | Where property is acquired or transferred between persons, other than specially related persons, at a price significantly lower or higher than the market value without good cause, as a transactional practice, and where the difference between the price actually paid or received and the market value is at least the standard amount prescribed by Presidential Decree, an amount calculated by subtracting the amount prescribed by Presidential Decree from the difference between the price actually paid or received and the market value, by regarding the day of acquisition or the day of transfer of the relevant property as the date of donation, shall be the price of property donated to the person who earns profits from such acquisition or transfer. |
| (4) | For purposes of paragraphs (1) and (2), determination of the date of acquisition or the date of transfer and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 15, 2015]
| Article 36 (Donation Resulting from Exemption from Financial Obligation) |
| (1) | Where a person is given exemption from a financial obligation by a creditor, or a financial obligation is taken over or repaid by a third party, an amount (referring to an amount calculated by subtracting an indemnity from the aforementioned amount where the indemnity has been paid) corresponding to the profits from the exemption, takeover or repayment (hereafter in this Article referred to as "exemption, etc."), by regarding the date of such exemption, etc. as the date of donation, shall be the value of property donated to the person who earns profits from the exemption, etc. <Amended on Dec. 15, 2015> |
| (2) | For purposes of paragraph (1), determination of the date on which exemption, etc. are given, and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 37 (Donation of Profit Accruing from Gratuitous Use of Real Estate) |
| (1) | Where a person gets profits by using another person's real estate gratuitously (excluding a house in which the person lives together with the owner of the real estate and land appurtenant thereto), an amount corresponding to such profits shall be the value of property donated to the person who uses the real estate gratuitously by regarding the date on which the person start using the real estate gratuitously as the date of donation: Provided, That where the amount corresponding to such profits is less than the standard amount prescribed by Presidential Decree, such case shall be excluded. <Amended on Jan. 1, 2010; Dec. 31, 2011; Dec. 15, 2015> |
| (2) | Where a person gets profits as he or she borrows money, etc. using another person's real estate as security gratuitously, an amount corresponding to the profits shall be the value of property donated to the person who uses the real estate as security by regarding the day on which the real estate begins to be held as security as the date of donation: Provided, That where the amount corresponding to such profits is less than the standard amount prescribed by Presidential Decree, such cases shall be excluded therefrom. <Newly Inserted on Dec. 15, 2015> |
| (3) | In cases of a transaction between persons, other than specially related persons, paragraphs (1) and (2) shall apply, limited to where good cause does not exist as a transactional practice. <Newly Inserted on Dec. 15, 2015> |
| (4) | For purposes of paragraphs (1) and (2), determination of the date on which real estate begins to be used gratuitously and the date on which real estate begins to be held as security, methods of calculating profits from the use of real estate gratuitously and from the use of land as security, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2010; Dec. 31, 2011; Dec. 15, 2015> |
[Title Amended on Jan. 1, 2010]
| Article 38 (Donation of Profit from Merger) |
| (1) | Where a large shareholder, etc. prescribed by Presidential Decree (hereafter in this Article and Article 39-2 referred to as "large shareholder, etc.") of a corporation that ceases to exist or is absorbed, or of a newly formed or of a surviving corporation following a merger between corporations in a special relationship prescribed by Presidential Decree (including spin-off and subsequent merger; hereafter in this Article the same applies) gets profits from the merger, an amount corresponding to such profits shall be the value of property donated to the large shareholder, etc. who gets the profits by regarding the date of merger as the date of donation: Provided, That where the amount corresponding to such profits is less than the standard amount prescribed by Presidential Decree, such cases shall be excluded therefrom. <Amended on. 31, 2011; Dec. 15, 2015> |
| (2) | For purposes of paragraph (1), where persons who donate profits from merger are shareholders, etc. other than a large shareholder, etc. and the number of such shareholders, etc. is at least two, the profits shall be deemed to have been earned from a shareholder or an investor. <Amended on Dec. 15, 2015> |
| (3) | For purposes of paragraph (1), the method of calculating profits from merger and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 39 (Donation of Profit from Capital Increase) |
| (1) | Where a person gets any of the following profits as a corporation issues new stocks or equity shares (hereafter in this Article referred to as "new stocks") to increase its capital (including the amount of investment; hereinafter the same applies), an amount corresponding to the profits shall be the value of property donated to the person who gets the profits by regarding the day prescribed by Presidential Decree, such as the day on which the price of stocks is paid, as the date of donation: <Amended on Dec. 31, 2011; Dec. 15, 2015; Dec. 20, 2016> |
| 1. | Where new stocks are issued at a price below the market value (referring to the price assessed under Articles 60 and 63; hereafter in this Article, Articles 39-2, 39-3 and 40 the same applies): Any of the following profits: |
| (a) | Where a shareholder, etc. of the relevant corporation renounces, in whole or in part, their right to be allotted new stocks (hereafter in this Article referred to as "preemptive right"), and where such corporation allots such renounced new stocks (hereafter in this paragraph referred to as "forfeited stocks") (excluding where a listed corporation prescribed by the Financial Investment Services and Capital Markets Act allots such new stocks through public offering (excluding cases prescribed by Presidential Decree) prescribed in Article 9 (7) of that Act; hereafter in this paragraph the same applies), profits from the allotment of forfeited stocks earned by those who are allotted the forfeited stocks; |
| (b) | Where a shareholder, etc. of the relevant corporation has renounced, in whole or in part, their preemptive right, and where the corporation does not allot the forfeited stocks, profits from the acquisition of the new stocks earned by persons specially related to those who renounce acquiring the new stocks; |
| (c) | Profits earned by persons, who are not shareholders, etc. of the relevant corporation, by being directly allotted new stocks by the relevant corporation (including cases in which they directly take over or acquire the relevant new stocks from an underwriter prescribed in Article 9 (12) of the Financial Investment Services and Capital Markets Act and through methods prescribed by Presidential Decree; hereafter in this paragraph the same applies); |
| (d) | Profits earned by shareholders, etc. of the relevant corporation by being directly allotted new stocks in excess of the number of stocks, etc. they are entitled to, under equal conditions, in proportion to the number of stocks, etc. owned by them; |
| 2. | Where new stocks are issued at a price above the market value: Any of the following profits: |
| (a) | Where a shareholder, etc. of the relevant corporation renounces, in whole or in part, their preemptive right, and where the relevant corporation allots forfeited stocks, profits earned by the shareholder, etc. who renounces taking over new stocks that are allotted to them as a person who has a special relationship with them takes over such forfeited stocks that are allotted to him or her; |
| (b) | Where a shareholder, etc. of the relevant corporation renounces, in whole or in part, their preemptive right, and where the relevant corporation does not allot forfeited stocks, profits earned by the shareholder, etc. who renounces taking over new stocks as new stocks are taken over by another shareholder, etc. who has a special relationship with the shareholder, etc. who renounces taking over new stocks; |
| (c) | Where a person who is not a shareholder, etc. of the relevant corporation takes over new stocks after being allotted new stocks directly by the relevant corporation, profits earned by a shareholder, etc. of the relevant corporation who is specially related to the aforementioned person; |
| (d) | Profits earned by a shareholder, etc. of the relevant corporation as another shareholder, etc. of the relevant corporation, who is specially related to the aforementioned shareholder, etc. of the relevant corporation, is directly allotted new stocks in excess of the number of stocks they are entitled to be allotted, under equal conditions, in proportion to the number of stocks possessed by them; |
| 3. | Where a corporation issues classes of shares (hereafter in this subparagraph referred to as "convertible shares") prescribed in Article 346 of the Commercial Act when subparagraphs 1 and 2 apply: Profits classified as follows generated by converting to different classes of shares after the issuance thereof: |
| (a) | Where the corporation issues convertible shares at the value lower than the market price: Profits earned by a person to whom shares were issued because the value of shares which were issued or will be issued to him or her exceeds the value of convertible shares as at the time the convertible shares are issued; |
| (b) | Where the corporation issues convertible shares at the value higher than the market price: Profits earned by a person who has a special relationship with a person to whom shares were issued because the value of shares which were issued or will be issued to him or her becomes lower than the value of convertible shares as at the time the convertible shares are issued. |
| (2) | In applying paragraph (1) 1, where the number of minority shareholders prescribed by Presidential Decree (hereafter in this paragraph and Article 39-3 referred to as "minority shareholder") who donate profits is at least two, profits shall be calculated by deeming the number of minority shareholders to be one. <Amended on Dec. 15, 2015> |
| (3) | In applying paragraphs (1) and (2), the method of calculating profits and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 39-2 (Donation of Profit from Capital Reduction) |
| (1) | Where a corporation retires its stocks, etc. to reduce its capital and where the following profits are earned by retiring the stocks, etc. of some of the shareholders, the profits shall be the value of property donated to a person who earns the profits by regarding the date of general shareholders' meeting on which a resolution to retire stocks is passed as the date of donation: Provided, That where an amount corresponding to the profits is below the standard amount prescribed by Presidential Decree, such cases shall be excluded: <Amended on Dec. 15, 2015> |
| 1. | Where stocks, etc. are retired at a price below the market value: Profits earned by a large shareholder, etc. who have a special relationship with the shareholders, etc. whose stocks, etc. are retired; |
| 2. | Where stocks, etc. are retired at a price above the market value: Profits earned by a shareholder, etc. who retire stocks, etc. and have a special relationship with the large shareholder, etc. |
| (2) | In applying paragraph (1), the method of calculating profits and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 39-3 (Donation of Profit from Investment in Kind) |
| (1) | Where a person earns any of the following profits from investment in kind, an amount corresponding to such profits shall be the value of property donated to the person who earns such profits by regarding the day on which an investment in kind is made as the date of donation: <Amended on Dec. 31, 2011; Dec. 15, 2015> |
| 1. | Profits earned by taking over stocks, etc. at a price below the market value by a person who makes an investment in kind; |
| 2. | Profits earned by taking over stocks, etc. at a price above the market value by a shareholder, etc. who are specially related to a person who makes an investment in kind. |
| (2) | In applying paragraph (1) 1, where the number of minority shareholders is two or more among shareholders, etc. who are not persons making an investment in kind, profits shall be calculated regarding the number of minority shareholders as one. <Newly Inserted on Jan. 1, 2014; Dec. 15, 2015> |
| (3) | The method of calculating profits under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Jan. 1, 2014; Dec. 15, 2015> |
[This Article Wholly Amended on 1, 2010]
| Article 40 (Donation of Profit from Conversion of Convertible Bonds into Stocks) |
| (1) | Where any of the following profits is earned by taking over, acquiring or transferring convertible bonds, bonds with warrants (referring to warrants if they are detachable) or other bonds (hereafter in this Article and Article 41-3 referred to as "convertible bonds, etc.") with a right to conversion into stocks, exchange for stocks or takeover of stocks, or by converting convertible bonds, etc. into stocks, exchanging convertible bonds, etc. for stocks or taking over stocks (hereafter in this Article referred to as "conversion into stocks, etc."), an amount corresponding to such profits shall be the value of property donated to a person who earns such profits: Provided, That where the amount corresponding to such profits is below the standard amount prescribed by Presidential Decree, such case is excluded: <Amended on Dec. 31, 2011; Dec. 15, 2015; Dec. 20, 2016> |
| 1. | Any of the following profits earned by taking over or acquiring convertible bonds, etc. on the date of takeover or acquisition: |
| (a) | Profits earned from the acquisition of convertible bonds, etc. from a specially related person at a price below the market value; |
| (b) | Profits earned by the largest shareholder of a corporation issuing convertible bonds, etc. (excluding a stock market listed corporation prescribed by the Financial Investment Services and Capital Markets Act that issues convertible bonds, etc. through public offering of securities (excluding cases prescribed by Presidential Decree) or by other shareholder who is specially related to the largest shareholder, as he or she takes over or acquires (including cases in which he or she accepts or acquires convertible bonds, etc. from an underwriter prescribed in Article 9 (12) of the Financial Investment Services and Capital Markets Act and through other methods prescribed by Presidential Decree; hereafter in this paragraph referred to as "takeover, etc.") convertible bonds, etc. from the corporation at a price below the market value in excess of the number of convertible bonds, etc. he or she is entitled to be allotted, under equal conditions, in proportion to the number of stocks in possession; |
| (c) | Profits earned by a person specially related to the largest shareholder of a corporation issuing convertible bonds, etc. (excluding a shareholder of the corporation) as he or she takes over, etc. the convertible bonds, etc. from the corporation at a price below the market value; |
| 2. | Any of the following profits earned by converting, etc. convertible bonds, etc. into stocks on the day conversion into stocks, etc. is made: |
| (a) | Where the convertible bonds, etc. have been acquired from the specially related person, the profits earned as the value of the stocks received or to be received with the convertible bonds, etc. exceeds the value of conversion, exchange or acceptance (hereafter in this paragraph referred to as "conversion value, etc."); |
| (b) | Where the largest shareholder of the corporation issuing the convertible bonds, etc. or other shareholders who are the specially related parties of the largest shareholder have accepted, etc. the convertible bonds, etc. from the relevant corporation in excess of the number entitled to be allotted, under equal conditions, in proportion to the number of stocks they possessed, the profits earned as the value of the stocks received or to be received with the convertible bonds, etc. exceeds the value of the conversion value, etc.; |
| (c) | Where a non-shareholder of the corporation issuing the convertible bonds, etc. who is a specially related person of the largest shareholder has accepted, etc. the convertible bonds, etc. from the relevant corporation, the profits earned as the value of the stocks received or to be received with the convertible bonds, etc. exceeds the value of the conversion value, etc.; |
| (d) | Where the convertible bonds, etc. are converted into or exchanged with the stocks, or the stocks are accepted, the profits earned by the specially related person of those to whom the relevant stocks are delivered, as the value of stocks delivered against the convertible bonds, etc. becomes less than the conversion value, etc.; |
| (e) | Deleted; <Dec. 15, 2015> |
| 3. | Where the methods and profits are similar to those stipulated in subparagraph 1 or 2, the profits earned directly or indirectly from a specially related person, by conducting the transaction of the convertible bonds, etc. or by converting the convertible bonds, etc. into the stocks. |
| (2) | The largest shareholder prescribed in paragraph (1), the value of stocks received or to be received and the method of calculating profits, determination on the date of donation and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 41 Deleted. <Dec. 15, 2015> |
| Article 41-2 (Donation of Profit from Excess Dividend) |
| (1) | Where a corporation allots or distributes a profit or surplus fund (hereafter in this paragraph referred to as "dividend, etc.") and the largest shareholder or largest investor prescribed by Presidential Decree in the corporation (hereafter in this Article referred to as "largest shareholder, etc.") receives dividends, etc. in an amount more than the proportion of stocks, etc. he or she possesses, as the largest shareholder, etc. renounce, in whole or in part, the dividends, etc. that they are eligible to receive or as they receive the dividends, etc. in an inequitable condition in proportion to the stocks, etc. they possess, the amount of dividends, etc. that the person specially related to the largest shareholder, etc. receives in an inequitable condition in proportion to the stocks, etc. in possession (hereafter in this Article referred to as "excess dividends"), less an amount corresponding to income tax on the excess dividends, shall be the value of property donated to the person specially related to the largest shareholder, etc. deeming the date on which the allotted or distributed amount is paid to be the date of donation, notwithstanding Article 4-2 (3). <Amended on Dec. 31, 2018; Dec. 22, 2020, Dec. 21, 2021> |
| (2) | A person who has gift tax imposed on excess dividends pursuant to paragraph (1) shall pay an amount of gift tax under subparagraph 2 less an amount of gift tax under subparagraph 1, to the head of the relevant tax office, as prescribed by Presidential Decree when paying income tax (including where there is no tax payable): Provided, That, if an amount of gift tax under subparagraph 1 exceeds an amount of gift tax under subparagraph 2, the person can receive a refund of the excess: <Amended on Dec. 22, 2020> |
| 1. | An amount of gift tax calculated based on the value of donated property under paragraph (1); |
| 2. | An amount of gift tax on excess dividends reflecting an amount of actual income tax (hereafter in this Article referred to as “adjusted value of donated property”). |
| (3) | The filing deadline of a gift tax base return on the adjusted value of donated property under paragraph (2) means a period from May 1 to 31 (or June 3 in cases of business entities subject to confirmation of compliant filing that have submitted a certificate of confirmation of compliant filing under Article 70-2 (2) of the Income Tax Act) of the following year of the year during which excess dividends accrue. <Amended on Dec. 22, 2020; Dec. 21, 2021> |
| (4) | The methods for calculating excess dividends, an amount corresponding to income tax on excess dividends, and the adjusted value of donated property, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 22, 2020> |
[This Article Newly Inserted on Dec. 15, 2015]
| Article 41-3 (Donation of Profit from Listing of Stocks) |
| (1) | Where a person specially related to any of the following persons who are deemed to be in a position to use undisclosed information on the management, etc. of a corporation (hereafter in this Article and Article 41-5 referred to as "largest shareholder, etc.") is donated stocks, etc. of the corporation or acquires the stocks, etc. pursuant to paragraph (2), and where the person earns profits in excess of the original taxable value of gift (excluding cases of acquiring the stocks, etc. with the donated property pursuant to paragraph (2) 2), or in excess of acquisition value when the value of such stocks, etc. increases as they are listed on the stock market (hereafter in this Article referred to as "stock market") prescribed by Presidential Decree, which is the stock market prescribed in Article 8-2 (4) 1 of the Financial Investment Services and Capital Markets Act within five years from the day on which the person is donated or acquires such stocks, etc., an amount corresponding to the profits shall be the value of property donated to the person who earns the profits: Provided, That cases where an amount corresponding to the profits is below the standard amount prescribed by Presidential Decree are excluded: <Amended on Dec. 31, 2011; May 28, 2013; Dec. 15, 2015; Dec. 20, 2016> |
| 1. | The largest shareholder or the largest investor prescribed in Article 22 (2); |
| 2. | A person prescribed by Presidential Decree who owns at least 25/100 of the total number of outstanding stocks of a domestic corporation or of the total amount of investment in a domestic corporation. |
| (2) | Donation or acquisition of stocks, etc. under paragraph (1) means any of the following: <Newly Inserted on Dec. 15, 2015> |
| 1. | Where stocks, etc. of the relevant corporation are donated by the largest shareholder, etc. or are acquired from the largest shareholder, etc. at a cost; |
| 2. | Where stocks, etc. of the relevant corporation are acquired with donated property (referring to the property donated by the largest shareholder, etc. within three years retroactively from the date stocks, etc. are acquired at a cost; hereafter in this Article and Article 41-5 the same applies). |
| (3) | The profits prescribed in paragraph (1) shall be calculated, based on the date when three months elapse from the day on which relevant stocks are listed (referring to the date of death, date of donation or date of transfer if a person who owns the stocks, etc. dies, donates or transfers the stocks, etc. within three months from the day on which the stocks, etc. are listed; hereafter in this Article and Article 68 referred to as "adjustment base date"). <Amended on Dec. 15, 2015> |
| (4) | With regard to a person who earns profits prescribed in paragraph (1), the gift tax base and the amount of gift tax shall be adjusted by adding the profits to the original taxable value of gift (where the stocks, etc. have been acquired with the donated property, referring to the taxable value of such donated property; hereafter in this Article the same applies): Provided, That where the value of the stocks, etc. as at the adjustment base date is below the original taxable value of gift and the difference is corresponding to or above the standard prescribed by Presidential Decree, the amount of gift tax corresponding to the difference (referring to the original amount of gift tax paid as at the time the donation is received) may be refunded. <Amended on Dec. 15, 2015> |
| (5) | The date on which stocks, etc. are listed under paragraph (1) means the date on which trading of stocks, etc. commences on the stock market. <Amended on May 28, 2013; Dec. 15, 2015; Dec. 20, 2016> |
| (6) | In applying paragraph (2) 2, where acquisition of stocks, etc. with donated property is uncertain since the donated property and other property are mixed, the stocks, etc. shall be presumed to have been acquired with the donated property. In such cases, if the stocks, etc. have been acquired with the money borrowed by offering the donated property as security, such stocks, etc. shall be deemed to have been acquired with the donated property. <Amended on Dec. 15, 2015> |
| (7) | Paragraph (2) shall include cases in which new stocks are taken over or allotted, as new stocks are issued to increase the capital of a corporation after stocks, etc. have been received as a gift or have been acquired. <Amended on Dec. 15, 2015> |
| (8) | Where convertible bonds, etc., which were received as a gift or were acquired at a cost, have been converted into stocks, etc. (including cases of taking over or acquiring convertible bonds, etc. directly from an issuing corporation) and the convertible bonds, etc. are converted into stocks, etc. within five years, paragraphs (1) through (6) shall apply by deeming that the converted stocks, etc. were received as a gift or were acquired as at the time the convertible bonds, etc. were received as a gift or were acquired. In such cases, where the convertible bonds, etc. are not converted into stocks, etc. by the adjustment base date, paragraphs (1) through (5) shall apply, deeming that such convertible bonds, etc. were converted into stocks, etc. on the adjustment base date; and where the convertible bonds, etc. have not been converted into stocks, etc. by the expiration date of convertible bonds, etc., the amount of gift tax imposed based on the adjustment base date shall be refunded. <Amended on Dec. 15, 2015> |
| (9) | Where the amount of gift tax is deemed to have been reduced by fraud or other improper means, paragraphs (1) and (2) shall apply even to a gift between persons who are not specially related. In such cases, provisions concerning the period shall be deemed nonexistent in paragraph (1). <Amended on Dec. 15, 2015> |
| (10) | The method of calculating profits prescribed in paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 15, 2015]
| Article 41-4 (Donation of Profit from Gratuitous Loan of Money) |
| (1) | Where a person borrowed money from another person at no cost or at an interest rate below the fair interest rate, the amount specified below shall be the value of property donated to the person who borrowed such money on the day on which he or she borrowed such money: Provided, That where the amount according to the following is below the standard amount prescribed by Presidential Decree, such case shall be excluded: <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 15, 2015> |
| 1. | Where money is borrowed at no cost: An amount calculated by multiplying the amount of borrowed money by fair interest rate; |
| 2. | Where money is borrowed at an interest rate below fair rate: An amount calculated by deducting an amount corresponding to the interest actually paid from the amount calculated by multiplying the amount of borrowed money by fair interest rate. |
| (2) | In applying paragraph (1), where loan period is not specified, the amount of gift shall be calculated by regarding the period as one year; where loan period is not less than one year, the amount of gift shall be calculated by regarding that money is newly borrowed each year on the day next to the day that is one year from the beginning of the loan period. <Newly Inserted on Dec. 15, 2015> |
| (3) | In cases of a transaction between persons who are not specially related, paragraph (1) shall apply limited to where good cause does not exist as a transactional practice. <Amended on Dec. 15, 2015> |
| (4) | The fair interest rate under paragraph (1), judgment of the date of donation and other necessary matters shall be prescribed by Presidential Decree. <Amended on 11130, Dec. 31, 2011; Act No. 13557, Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 41-5 (Donation of Profit from Listing of Stocks Following Merger) |
| (1) | Where a person, to whom any of the following is applicable, who is specially related to the largest shareholder, etc. of a corporation and was donated or acquired stocks, etc. of the corporation, earns profits in excess of the original taxable value of gift (excluding cases of acquisition of stocks, etc. with donated property) or acquisition value as the corporation that issued the stocks, etc. merges with a listed corporation having a special relationship prescribed by Presidential Decree with the aforementioned corporation within five years from the date he or she was donated or acquired the stocks, etc. and thus the value of the stocks, etc. increases, an amount corresponding to the profits shall be the value of property donated to the person who earns the profits: Provided, That where the amount corresponding to the profits is below the standard amount prescribed by Presidential Decree, such cases shall be excluded: <Amended on 11130, Dec. 31, 2011; Dec. 15, 2015> |
| 1. | Where the person was donated stocks, etc. of the relevant corporation by the largest shareholder, etc. or acquired the stocks, etc. from the largest shareholder, etc. at a cost; |
| 2. | Where the person acquired stocks, etc. of the relevant corporation with donated property from a person who was not the largest shareholder, etc.; |
| 3. | Where the person acquired stocks, etc. of another corporation with donated property, of which stocks, etc. are possessed by the largest shareholder, etc., from a person other than the largest shareholder, etc., and thus became the largest shareholder, etc. of the another corporation when stocks, etc. possessed by the largest shareholder, etc. and the aforementioned person who is specially related to the largest shareholder, etc. are totaled up. |
| (2) | Article 41-3 (3) through (9) shall apply mutatis mutandis to the donation of profits from the listing, etc. of stocks, etc., following merger under paragraph (1). In such cases, the term "listing date" shall be deemed "date of merger registration". <Amended on Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 42 (Donation of Profit from Use of Property or Provision of Services) |
| (1) | Were a person earns any of the following profits by using property or providing services, an amount corresponding to the profits (referring to the difference between the market value and the price actually paid) shall be the value of property donated to the person who earns the profits: Provided, That where the amount corresponding to the profits is below the standard amount prescribed by Presidential Decree, such cases shall be excluded: <Amended on Dec. 15, 2015> |
| 1. | Profits earned by paying another person a price below the market value or by using another person's property (excluding real estate and money; hereafter in this Article the same applies) at no cost; |
| 2. | Profits earned by allowing another person to use property after receiving a price higher than the market value; |
| 3. | Profits earned by paying another person a price below the market value or by being provided with services at no cost; |
| 4. | Profits earned by providing another person with services at a price above the market value. |
| (2) | In applying paragraph (1), where the period of using property or the period of providing services is not specified, such period shall be one year, and where such period is one year or more, the person shall be deemed to newly use or to newly allow another person to use the property, or the person shall be deemed to newly provide services to another person or to be newly provided with services by another person each year on the day next to the day that is one year from the beginning of such period. <Amended on Dec. 15, 2015> |
| (3) | In cases of a transaction between persons other than those specially related, paragraph (1) shall apply only to cases where good cause does not exist as a transactional practice. <Amended on Dec. 15, 2015> |
| (4) | For purposes of paragraph (1), determination of the date of donation, method of calculating profits, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
| (5) | Deleted. <Dec. 15, 2015> |
| (6) | Deleted. <Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 15, 2015]
| Article 42-2 (Donation of Profit from Corporate Reorganization) |
| (1) | Where profits are earned as equity share or the value thereof is changed due to comprehensive exchange or transfer of stocks, takeover or transfer of business, exchange of business, corporate reorganization, etc., an amount (referring to the difference between the assessed value of property before and after change in the equity share or the value thereof) corresponding to the profits shall be the value of donated property of the person who earns profits: Provided, That where the amount corresponding to the profits is below the standard amount prescribed by Presidential Decree, such case shall be excluded. |
| (2) | In cases of a transaction between persons other than those specially related, paragraph (1) shall apply only to cases where good cause does not exist as a transactional practice. |
| (3) | Matters necessary for the method of calculating difference between the assessed value of property before and after change in the equity share, the value thereof, etc. shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 15, 2015]
| Article 42-3 (Donation of Profit from Increase in Value of Property After Acquisition of Property) |
| (1) | Where a person, who is deemed to be unable to perform a certain act by his or her own exertions in consideration of his or her occupation, age, income and possessions, earns profits due to a reason prescribed by Presidential Decree (hereafter in this Article, referred to as "reason for increase in the value of property"), such as implementation of a development project, change in the form and quality, partition of co-owned property, authorization of or permission for business, etc., within five years from the date he or she acquired property for following reasons, an amount corresponding to the profits shall be the value of property donated to the person who earns such profits: Provided, That cases where the amount corresponding to the profits is below the standard amount prescribed by Presidential Decree are excluded: |
| 1. | Where he or she is donated property by a specially related person; |
| 2. | Where he or she acquires property related to undisclosed internal information at a cost after he or she learns undisclosed internal information on the management, etc. of a corporation from a specially related person; |
| 3. | Where he or she acquires property with funds borrowed from a specially related person or with funds borrowed as he or she offers the property of a specially related person as security. |
| (2) | The amount calculated as prescribed by Presidential Decree, in consideration of the value of relevant property at the time of occurrence of reasons for increase in the value of property, acquisition price (referring to the taxable amount of gift in the case of donated property), usual increase in value, contribution to increasing value by a person who acquires property, etc., shall be the profits under paragraph (1). In such cases, where the property is transferred before the day reasons for increase in the value of property occur, the date of transfer shall be deemed the day on which reasons for increase in the value of property occur. |
| (3) | Where gift tax is deemed to have been reduced by fraud or other improper means, paragraph (1) shall apply even to a donation between persons other than those specially related. In such cases, provisions concerning period under paragraph (1) shall be deemed not to be in existence. |
[This Article Newly Inserted on Dec. 15, 2015]
| Article 43 (Special Cases concerning Imposition of Gift Tax) |
| (1) | Where two or more of the provisions of Articles 33 through 39, 39-2, 39-3, 40, 41-2 through 41-5, 42, 42-2, 42-3, 44, 45, and 45-3 through 45-5 apply simultaneously to a single donation, only one of the provisions according to which the greatest profits are obtained shall be applicable. <Amended on Dec. 15, 2015> |
| (2) | In calculating profits under Articles 31 (1) 2, 35, 37 through 39, 39-2, 39-3, 40, 41-2, 41-4, 42, and 45-5 if the same transaction, etc. are repeated within one year retroactively from the date of donation, profits shall be calculated by aggregating profits (referring to the difference between the market value and the price actually paid) acquired from respective transactions, etc. <Amended on Jan. 1, 2013; Dec. 15, 2015; Dec. 31, 2019> |
| (3) | The method of calculating profits under paragraph (2) and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 15, 2015> |
[This Article Newly Inserted on Dec. 27, 2010]
SECTION 2 Presumption and Legal Fiction of Donation
| Article 44 (Presumption of Donation of Property Transferred to Spouse) |
| (1) | Any property transferred to a spouse or a lineal ascendant or descendant (hereafter in this Article referred to as "spouse, etc.") shall be deemed the value of property donated to the spouse, etc. by presuming that the spouse, etc. has received the donation of the value of the property when the transferor has transferred such property. |
| (2) | Where any property transferred to a specially related person (hereafter in this paragraph and paragraph (4) referred to as "transferee") has been re-transferred to the spouse, etc. of the original transferor within three years from the date of acquisition, the value of property as at the time the transferee has retransferred such property shall be deemed the value of property donated to the spouse, etc. of the original transferor, by presuming that the spouse, etc. received the donation of the value of such property: Provided, That this shall not apply where the aggregate of determined amounts of tax prescribed by the Income Tax Act borne by the original transferor and transferee is larger than the amount of gift tax where the spouse, etc. is presumed to have been donated the property at the time the transferor transferred the property. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
| (3) | Paragraphs (1) and (2) shall not apply if the relevant property falls under any of the following subparagraphs: <Amended on May 28, 2013> |
| 1. | Where the relevant property is disposed of by an auction procedure under a court decision; |
| 2. | Where the relevant property is disposed of by the declaration of bankruptcy; |
| 5. | Cases prescribed by Presidential Decree where the fact that the relevant property is transferred to the spouse, etc. in return for consideration is clearly recognized. |
| (4) | Where gift tax has been imposed on the relevant spouse, etc. under the main clause of paragraph (2), income tax arising from the transfer of the relevant property shall not be imposed on the original transferor and transferee, notwithstanding the provisions of the Income Tax Act. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 45 (Presumption of Donation of Fund to Acquire Property) |
| (1) | Where, in cases prescribed by Presidential Decree, a person is deemed to be unable to acquire property by his or her own exertions in consideration of his or her occupation, age, income, possessions, etc., the funds used to acquire the property shall be the value of property donated to him or her presuming that he or she was donated the funds at the time he or she acquired the property. <Amended on Dec. 15, 2015> |
| (2) | Where, in cases prescribed by Presidential Decree, a person is deemed to be unable to pay back debts (including partial repayment; hereafter in this paragraph the same applies) by his or her own exertions in consideration of his or her occupation, age, income, possessions, etc., the funds used to pay back the debts shall be deemed the value of property donated to him or her presuming that he or she was donated the funds for repayment at the time he or she paid back the debts. <Amended on Dec. 15, 2015> |
| (3) | Paragraphs (1) and (2) shall not apply where the funds for acquisition or repayment is corresponding to or less than the amount prescribed by Presidential Decree by taking into account the occupation, age, income, property status, etc., and the source of the funds for acquisition or repayment is sufficiently verified. |
| (4) | Any property held in an account whose real holder has been verified pursuant to Article 3 of the Act on Real Name Financial Transactions and Confidentiality or in an account whose real holder has been verified in any other similar way pursuant to statutes and regulations of the relevant foreign country shall be presumed to have been acquired by the title holder of the property for purposes of applying paragraph (1). <Newly Inserted on Jan. 1, 2013> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 45-2 (Legal Fiction of Property Registered in Name of Another Person as Donation) |
| (1) | Where the actual owner and the title holder of any property (excluding land and buildings: hereafter in this Article the same applies) requiring registration, etc. to transfer or exercise a right thereto are different persons, an amount corresponding to the value of such property (where the property requires change of a title, referring to the value assessed on the basis of the day on which ownership is obtained) shall be deemed donated by the actual owner to the title holder as at the day on which the property is registered, etc. in the name of the title holder (where such property requires transfer of a title, referring to the day next to the last day of the year following the year in which the day on which ownership is obtained falls), notwithstanding Article 14 of the Framework Act on National Taxes: Provided, That this shall not apply in any of the following cases: <Amended on Dec. 31, 2011; Dec. 15, 2015; Dec. 31, 2018> |
| 1. | Where the property is registered, etc. in the name of another person or the property title is not transferred to the actual owner who obtains ownership without any intention of avoiding taxes; |
| 2. | Deleted; <Dec. 15, 2015> |
| 4. | Where a non-resident makes a registration, etc. in the name of a legal representative or administrator of the property. |
| (2) | Deleted. <Dec. 31, 2018> |
| (3) | Where a person registers, etc. his or her property in the name of another person, or a person does not change a name on property title to actual owner, he or she shall be presumed to have an intention of avoiding taxes: Provided, That where he or she does not change name on property title to actual owner and where any of the following is applicable, he or she shall not be presumed to have an intention of avoiding taxes: <Amended on Dec. 15, 2015> |
| 2. | Where, in cases of obtaining ownership through inheritance, an heir files a return in which the property is included in the taxable value of inheritance as he or she files a return corresponding to any of the following: Provided, That where he or she files a revised return knowing beforehand that inheritance tax base and tax amount are to be determined or corrected, or files a return after deadline, such case is excluded: |
| (a) | A return of the inheritance tax base prescribed in Article 67; |
| (4) | Where a shareholder register or an employee register is not prepared for purposes of paragraph (1), whether property title has been changed shall be determined with documents concerning shareholders, etc. and a report on changes in the ownership of stocks, etc. submitted to the head of a tax office having jurisdiction over the place of tax payment prescribed in Articles 109 (1) and 119 of the Corporate Tax Act. In such cases, the date of donation means the date prescribed by Presidential Decree, such as the date of ownership transfer stated in the gift tax base return or capital gains tax base return. <Amended on Dec. 15, 2015; Dec. 31, 2019> |
| (5) | Deleted. <Dec. 15, 2015> |
| (7) | Deleted. <Dec. 31, 2011> |
[This Article Wholly Amended Jan. 1, 2010]
| Article 45-3 (Legal Fiction of Profit from Transaction with Specially Related Corporation as Donation) |
| (1) | Where a corporation falls under subparagraph 1, a controlling shareholder of the corporation (hereafter in this Article and Article 68 referred to as "beneficiary corporation") and relatives of the controlling shareholder [limited to a shareholder in whose case a percentage of shares he or she directly or indirectly holds (hereafter in this Article referred to as "shareholding ratio") out of the total number of outstanding stocks of or the total amount of capital invested in a beneficiary corporation exceeds the shareholding ratio prescribed by Presidential Decree (hereafter in this Article referred to as "minimum shareholding ratio"); hereafter in this Article the same applies] shall be deemed to have received donations of profits prescribed in subparagraph 2 (hereafter in this Article and Article 55 referred to as "profits deemed donated"), respectively. In such cases, where the beneficiary corporation satisfies the requirements prescribed by Presidential Decree, such as keeping separate accounting for each business division, the transaction ratio with a specially related corporation, the net operating profit less adjusted taxes, etc. can be calculated for each business division, as prescribed by Presidential Decree for purposes of subparagraphs 1 and 2: <Amended on Dec. 19, 2017; Dec. 29, 2020; Dec. 31, 2022> |
| 1. | Where a corporation falls under any of the following: |
| (a) | Where the corporation is a small and medium enterprise prescribed by Presidential Decree (hereafter in this Article referred to as "small and medium enterprise") or a middle-standing enterprise prescribed by Presidential Decree (hereafter in this Article referred to as "middle-standing enterprise"): Where a percentage of sales (including sales made in transactions prescribed by Presidential Decree, which are cross transactions between business groups subject to disclosure under Article 31 of the Monopoly Regulation and Fair Trade Act) to a corporation in a special relationship prescribed by Presidential Decree (hereafter in this Article referred to as "specially-related corporation") with a controlling shareholder in the corporation (hereafter in this Article referred to as "ratio of transactions with a specially related corporation"), out of the sales of the corporation in the business year (referring to the sales calculated in accordance with the accounting standards for enterprises referred to in Article 43 of the Corporate Tax Act; hereafter in this Article the same applies) exceeds the percentage prescribed by Presidential Decree (hereafter in this Article referred to as "percentage of normal transactions"), in consideration of the size, etc. of the corporation; |
| (b) | Where the corporation is not a small and medium enterprise or middle-standing enterprise: Where the corporation falls under any of the following: |
| i) | Where the corporation falls under a ground prescribed in item (a); |
| ii) | Where the sales to a specially-related corporation exceeds the amount prescribed by Presidential Decree, in consideration of the size, etc. of the corporation, in which case a ratio of transactions with the specially-related corporation exceeds 2/3 of the percentage of normal transactions; |
| 2. | Profits: Amounts calculated in accordance with formulas classified as follows: |
| (a) | Where a beneficiary corporation falls under a small and medium enterprise: |
| Net operating profit less adjusted taxes of the beneficiary corporation × Ratio of transactions with a specially-related corporation exceeding the percentage of normal transactions × Shareholding ratio exceeding the minimum shareholding ratio |
|
| Net operating profit less adjusted taxes of the beneficiary corporation × Ratio of transactions with a specially-related corporation exceeding 50/100 of the percentage of normal transactions × Shareholding ratio exceeding 50/100 of the minimum shareholding ratio |
|
| Net operating profit less adjusted taxes of the beneficiary corporation × Ratio of transactions with a specially-related corporation exceeding 5/100 × Shareholding ratio |
|
| (2) | For the purpose of calculating the profit deemed donated, where controlling shareholders and relatives of the controlling shareholders simultaneously invest in the beneficiary corporation directly and invest in the same corporation indirectly through a corporation prescribed by Presidential Decree, each amount calculated respectively in accordance with the formula prescribed in paragraph (1) shall be added up. |
| (3) | Profits deemed donated shall be calculated each business year of a beneficiary corporation, and the closing date of the relevant business year of a beneficiary corporation shall be deemed the date of donation. |
| (4) | Sales prescribed by Presidential Decree, such as sales arising from transactions between the beneficiary corporation that is a small and medium enterprise and the specially related corporation that is a small and medium enterprise shall be excluded from sales prescribed in paragraph (1). <Newly Inserted on Jan. 1, 2014> |
| (5) | Methods for determining where a shareholder is a controlling shareholder, the scope of relatives of a controlling shareholder, calculation of the ratio of transactions with a specially related corporation, calculation of the net operating profit less adjusted taxes, calculation of shareholding ratio of stocks, and calculation of profits deemed donated under paragraph (1) shall be prescribed by Presidential Decree. <Amended on Dec. 15, 2015; Dec. 31, 2019> |
[This Article Newly Inserted on Dec. 31, 2011]
| Article 45-4 (Legal Fiction of Profit from Business Opportunity Provided by Specially Related Corporation as Donation) |
| (1) | Where a corporation (hereafter in this Article referred to as "beneficiary corporation") at least 30/100 of whose stocks are directly or indirectly held by a controlling shareholder and his or her relatives (hereafter in this Article referred to as "controlling shareholder, etc.") is provided with business opportunities in the manner prescribed by Presidential Decree by another corporation having a special relationship prescribed by Presidential Decree with the controlling shareholder, etc. (excluding a small and medium enterprise prescribed by Presidential Decree and a corporation prescribed by Presidential Decree), the controlling shareholder, etc. of the beneficiary corporation shall be deemed to have been donated an amount (hereafter in this Article referred to as "profits deemed donated") calculated according to the following formula on the last day of the business year (hereafter in this Article referred to as "year of commencing business") in which the day (hereafter in this Article referred to as "day when business opportunities are provided") on which business opportunities are provided falls. <Amended on Dec. 20, 2016; Dec. 31, 2019> |
| [{Profits of the beneficiary corporation during the year of commencing business, accrued from the provided business opportunities X Shareholding ratio of stocks held by controlling shareholder, etc.)? Corresponding amount among paid corporate tax for the year of commencing business} ÷ Number of months in the year of commencing business X 12] X 3 |
|
| (2) | The filing deadline of a gift tax base under paragraph (1) shall be the day when three months elapse from the end of the month in which the filing deadline of a tax base return prescribed in Article 60 (1) of the Corporate Tax Act falls. |
| (3) | By the business year (hereafter in this Article referred to as "adjustment business year") in which the day when two years elapse from the date when business opportunities are provided falls, the controlling shareholder, etc. of a beneficiary corporation to which profits deemed donated under paragraph (1) accrues, shall pay the difference between gift tax on an amount (hereafter in this Article referred to as "adjusted profits deemed donated") calculated according to the following formula and gift tax on profits deemed donated that was paid pursuant to paragraph (2) reflecting actual profits accrued from business opportunities provided to the beneficiary corporation, to the head of a tax office having jurisdiction over the place of tax payment: Provided, That where the adjusted profits deemed donated are less than the original profits deemed donated, the controlling shareholder, etc. may be refunded with gift tax (tax amount paid pursuant to paragraph (2) shall be the limit) corresponding to the difference. <Amended on Jun. 9, 2020> |
| [(Sum of profits of the beneficiary corporation from the year of commencing business until the adjustment business year, accrued from business opportunities provided) X Shareholding ratio of stocks held by controlling shareholder, etc.]? Corresponding amount among paid corporate tax from the year of commencing business until the adjustment business year |
|
| (4) | The shareholding ratio of stocks held by the controlling shareholder, etc. prescribed in paragraphs (1) and (3) shall be applicable, based on the last day of the year of commencing business. |
| (5) | The filing deadline of a gift tax base return under paragraph (3) shall be the day when three months elapse from the last day of the month in the adjustment business year in which the filing deadline of a tax base return under Article 60 (1) of the Corporate Tax Act falls. |
| (6) | Matters necessary to determine whether a shareholder is a controlling shareholder, to calculate the shareholding ratio of stocks in possession under paragraphs (1) and (3), to calculate profits earned by a beneficiary corporation accruing from business opportunities provided and to calculate a corresponding amount among paid corporate tax, method of adjustment, procedures therefor, etc. shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2019> |
[This Article Newly Inserted on Dec. 15, 2015]
| Article 45-5 (Legal Fiction of Profit from Transaction with Specific Corporation as Donation) |
| (1) | Where a corporation (hereafter in this Article and Article 68 referred to as “specific corporation”) at least 30/100 of the stocks of which is held directly or indirectly by its controlling shareholder and his or her relatives (hereafter in this Article referred to as “controlling shareholder, etc.”) conducts any of the following transactions with a specially related person of the controlling shareholder, etc., an amount calculated by multiplying the profits of the specific corporation by the shareholding ratio of the shareholder, etc. in the specific corporation is deemed to have been donated to the shareholder, etc. of the specific corporation deeming the date of the transaction to be the date of donation: |
| 1. | Being provided with property or services without consideration; |
| 2. | Transferring or being provided with, property or services at a substantially low price in view of ordinary trading practices; |
| 3. | Transferring or providing, property or services at a substantially high price in view of ordinary trading practices; |
| 4. | Other transactions prescribed by Presidential Decree that are similar to subparagraphs 1 through 3. |
| (2) | Where the amount of gift tax calculated under paragraph (1) exceeds an amount deducting a corresponding amount of corporate tax paid by the specific corporation from a corresponding amount of gift tax payable when the controlling shareholder, etc., directly receives a donation, an excess shall be deemed nil. |
| (3) | Methods for determining whether a shareholder is a controlling shareholder, determination of the date of donation, calculation of profits of the specific corporation, and the scopes of a substantially low price and a substantially high price under paragraph (1), calculation of an excess under paragraph (2), and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 31, 2019]
SECTION 3 Taxable Value of Donated Property
| Article 46 (Donated Property Not Subject to Taxation) |
No gift tax shall be imposed on any of the following: <Amended on Jun. 8, 2010; Dec. 15, 2015; Dec. 20, 2016>
| 1. | The value of property donated by the State or a local government; |
| 2. | Where an employee of a domestic corporation who has joined an employee association (hereinafter referred to as "employee stock ownership association") satisfying requirements prescribed by Presidential Decree acquires shares of the relevant corporation through the employee stock ownership association and members of such association meet the criteria for a minority shareholder prescribed by Presidential Decree, the value corresponding to the profits accrued from the difference between the acquisition value of such shares and their current market value; |
| 4. | The value of property donated to an intra-company labor welfare fund pursuant to the Framework Act on Labor Welfare, or other similar associations prescribed by Presidential Decree; |
| 5. | Socially recognized disaster relief funds and goods, medical treatment expenses, education fees or others similar thereto that are prescribed by Presidential Decree; |
| 6. | The value of property donated to the Credit Guarantee Fund pursuant to the Credit Guarantee Fund Act or other similar associations prescribed by Presidential Decree; |
| 7. | The value of property donated to the State, local governments, or public organizations; |
| 8. | Insurance proceeds of an insurance policy prescribed by Presidential Decree, whereunder the beneficiary of insurance proceeds is a person with a disability; |
| 9. | The value of property, such as donations, articles, etc. given to the bereaved family members of persons who provided distinguished services to the State prescribed by the Act on the Honorable Treatment of and Support for Persons, etc. of Distinguished Service to the State or the bereaved family members of persons wounded or killed for a righteous cause prescribed by the Act on Honorable Treatment of and Support for Persons Who Died or Was Injured for Public Good; |
| 10. | Where a not-for-profit corporation inherits assets, rights and obligations of another not-for-profit corporation because another not-for-profit corporation has been dissolved or its business has changed due to alterations of statutes and regulations that constitute the basis for the incorporation thereof, the value of the relevant assets the not-for-profit corporation inherits. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 47 (Taxable Value of Gift) |
| (1) | The taxable value of gift shall be the aggregate of values of donated property under this Act as of the date of donation (excluding the value of donated property under Articles 31 (1) 3, 40 (1) 2 and 3, 41-3, 41-5, 42-3, 45, 45-2 through 45-4 (hereinafter referred to as "donated property excluded from aggregation"), less the amount acquired by the donee as debts (including debts prescribed by Presidential Decree, such as debts related to the donated property) secured with the donated property. <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 15, 2015; Dec. 31, 2018; Dec. 21, 2021> |
| (2) | Where the aggregate of the value of the property donated to the same person (where a donor is a lineal ascendant, including the spouse of such lineal ascendant) within 10 years prior to the relevant date of donation is not less than 10 million won, such value shall be added to the taxable value of donated property: Provided, That this shall not apply to the donated property excluded from aggregation. |
| (3) | With respect to a conditional gift between spouses, or between lineal ascendants and descendants (including cases presumed to be a gift under Article 44) in applying paragraph (1), even if the donee takes over the debts of the donor, the amount of the debts shall be presumed not to be taken over by the donee: Provided, That this shall not apply where the amount of debts is objectively recognized, as prescribed by Presidential Decree, such as debts to the State or a local government. |
[This Article Wholly Amended on Jan. 1, 2010]
SECTION 4 Non-Inclusion in Taxable Value of Property Contributed for Public Interest
| Article 48 (Non-Inclusion in Taxable Value of Property Contributed to Public-Interest Corporation) |
| (1) | No value of property contributed to a public-interest corporation, etc. shall be included in the taxable value of gift: Provided, That where voting stocks or equity shares (hereafter in this Article referred to as "stocks, etc.") of a domestic corporation are contributed to a public-interest corporation, etc., in which case the sum of the contributed stocks, etc. and the following stocks, etc. exceeds the percentage referred to in Article 16 (2) 2 of the total number of outstanding stocks with voting rights or the total amount of equity shares (excluding treasury stocks and its own equity shares; hereinafter referred to as "total number of outstanding stocks, etc.") of the domestic corporation (excluding cases falling under the subparagraphs of Article 16 (3)), the value of such excess shall be included in the taxable value of gift tax: <Amended on Dec. 31, Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017> |
| 1. | Stocks, etc. of the same domestic corporation, which are owned by the relevant public-interest corporation, etc. as at the time the contributor makes contributions; |
| 2. | Stocks, etc. of the same domestic corporation, which are contributed by the contributor and his or her specially related person to a public-interest corporation, etc. other than the relevant public-interest corporation, etc.; |
| 3. | Stocks, etc. of the same domestic corporation, which are owned by another public-interest corporation, etc. to which the contributor or a person who has a special relationship with him or her has contributed property. |
| (2) | Where a public-interest corporation, etc. to which property is contributed pursuant to paragraph (1) and Article 16 (1) fall under any of subparagraphs 1 through 4, 6, and 8, the head of the competent tax office, etc. shall immediately impose gift tax on the public-interest corporation, etc. deeming that such public-interest corporation, etc. have received a gift in the value prescribed by Presidential Decree on the date on which the relevant cause arises, and the head of the tax office, etc. shall impose an additional tax under Article 78 (9) when such public-interest corporation, etc. fall under subparagraph 5 or 7: Provided, That among property contributed from many unspecified persons, property prescribed by Presidential Decree, the value of which is difficult to be calculated according to its contributors, is excluded: <Amended on Dec. 27, 2010; Jul. 25, 2011; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Dec. 22, 2020> |
| 1. | Where the public-interest corporation, etc. uses the contributed property for purposes other than direct public-interest projects, etc. (including cases where the public-interest corporation, etc. operates such property for profit or for-profit projects to appropriate for direct public-interest projects; hereafter in this subparagraph the same applies) or fails to use such property for direct public-interest projects within three years or fails to continue to use such property for direct public-interest project upon expiration of thee-year period from the date on which such property is contributed: Provided, That this shall not apply where there is any unavoidable reason prescribed by Presidential Decree, such as taking a long time for the public-interest corporation, etc. to use it for direct public-interest projects, etc., and such fact is reported to the head of the tax office having jurisdiction over the place of tax payment as at the time a report under paragraph (5) is submitted and such property is used for direct public-interest projects, etc. within one year from the date of disappearance of such reason; |
| 2. | Where a public-interest corporation, etc. uses the contributed property (including cases where the public-interest corporation, etc. operates such property for profits or for-profit projects, and where any operating income accrues therefrom; hereafter in this subparagraph and paragraph (3) the same applies) and the proceeds from the sale of the contributed property (including property increased due to the proceeds from the sale thereof but excluding the amount expended to pay utility bills prescribed by Presidential Decree; hereafter in this Article the same applies) to acquire stocks, etc. of a domestic corporation, in such cases where the sum of the acquired stocks, etc. and the following shares exceeds the percentage referred to in Article 16 (2) 2, out of the total number of outstanding stocks, etc. of the domestic corporation: Provided, That this shall not apply where the contribution meets requirements prescribed by Presidential Decree, in such cases where the contribution falls under Article 16 (3) 1 or 3 (in such cases, "contribution" shall be construed as "acquisition") and an industry-academia cooperation organization prescribed in the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act acquires stocks, etc.: |
| (a) | Stocks, etc. of a domestic corporation that are the same as those owned by the relevant public-interest corporation, etc. as at the time the stocks, etc. are acquired; |
| (b) | Stocks, etc. of a domestic corporation that are the same as those contributed by a contributor in a special relationship with the relevant domestic corporation to a public-interest corporation, etc., other than the relevant public-interest corporation, etc.; |
| (c) | Stocks, etc. of the same domestic corporation owned by another public-interest corporation, etc. to which a contributor who has a special relationship with the relevant domestic corporation has contributed property; |
| 3. | Where a public-interest corporation, etc. operates the contributed property for profits or for-profit projects and uses operating income accrued therefrom for purposes other than direct public-interest projects; |
| 4. | Where a public-interest corporation, etc. fails to use the proceeds from the sale of the contributed property, as prescribed by Presidential Decree, by the date on which three years have elapsed from the date of sale; |
| 5. | Where a public-interest corporation, etc. uses the operating income prescribed in subparagraph 3 short of the standard amount prescribed by Presidential Decree, or uses the proceeds from sale under subparagraph 4 short of the standard amount prescribed by Presidential Decree for three years from the date of sale; |
| 6. | Where a public-interest corporation, etc. which satisfies the requirements prescribed in Article 16 (2) 2 (a) (excluding public-interest corporations, etc. falling under item (b) and (c) of that subparagraph) exercises voting rights of stocks, etc. contributed, in violation subitem i) of that item; |
| 7. | Where a public-interest corporation, etc. (excluding public-interest corporations, etc. prescribed by Presidential Decree in consideration of the sizes of their assets and characteristics of their business) use an amount that falls short of an amount (hereinafter referred to as "standard amount" in Article 78 (9) 3) calculated by multiplying 1/100 (or 3/100 if a public-interest corporation, etc. falling under Article 16 (2) 2 (a) hold more than 10/100 of the total number of outstanding stocks, etc.) of the value of contributed property prescribed by Presidential Decree for its direct public-interest project (excluding any projects subject to income tax under the Income Tax Act or subject to corporate tax under the Corporate Tax Act); |
| 8. | Other cases where a public-interest corporation, etc. fails to operate the contributed property or to conduct direct public-interest projects, as prescribed by Presidential Decree. |
| (3) | Where a public-interest corporation, etc. permits any of the following persons to use or make a profit from the contributed property under paragraph (1), the property acquired with the contributed property as the principal money, and the proceeds from the sale of the contributed property by means of lease, loan for consumption, loan for use, etc., gift tax shall be promptly imposed on the public-interest corporation, etc. by deeming that the value prescribed by Presidential Decree is contributed to the public-interest corporation, etc.: Provided, That this shall not apply to cases prescribed by Presidential where the public-interest corporation, etc. is provided with services in connection with direct public-interest projects and pays normal prices therefor, etc.: <Amended on Dec. 31, 2011; Dec. 31, 2018> |
| 1. | Contributor and his or her relatives; |
| 2. | Any other public-interest corporation, etc. to whom the contributor makes a contribution; |
| 3. | Persons prescribed by Presidential Decree as the specially related parties of those stipulated in subparagraph 1 or 2. |
| (4) | [Previous Paragraph (4) moved to Paragraph (14) <Dec. 22, 2020>] |
| (5) | Where a public-interest corporation, etc. has received any property contributed pursuant to paragraph (1) and Article 16 (1), the public-interest corporation, etc. shall submit a report on the plan and progress on the use of such contributed property, to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. |
| (6) | When the head of a tax office levies inheritance tax or gift tax on a public-interest corporation, etc., he or she shall inform the competent authority of the public-interest corporation, etc. of such fact. |
| (7) | When the competent authority of a public-interest corporation, etc. grants an incorporation license to the public-interest corporation, etc., revokes the granted incorporation license, issues a corrective order to the public- service corporation, etc., or discovers that the public-interest corporation, etc. falls under the proviso of paragraph (1), (2), or (3) as a result of supervision, it shall notify the head of the tax office having jurisdiction over the place of tax payment of such fact, as prescribed by Presidential Decree. |
| (8) | Where a contributor or his or her specially related person becomes a director of a public-interest corporation, etc. prescribed by Presidential Decree and thus the number of directors exceeds one-fifth of the current number of directors (where the current number of directors is less than five, it shall be deemed five), or becomes an executive or employee (excluding director; hereinafter the same applies) thereof, an additional tax prescribed in Article 78 (6) shall be imposed: Provided, That where a contributor or a person specially related to him or her becomes a director and thus the number of directors exceeds 1/5 of the current number of directors of a public-interest corporation, etc for any unavoidable reason prescribed by Presidential Decree, such as death, and where a director is recruited to fill the vacancy or replaced within two months from the date such ground occurs, no additional tax shall be imposed. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
| (9) | Where a public-interest corporation, etc. (excluding a public-interest corporation, etc. established by the State or a local government, a corresponding public-interest corporation, etc. prescribed by Presidential Decree, and a public-interest corporation, etc. satisfying the requirements of the subparagraphs of paragraph (11)) own stocks, etc. of a domestic corporation in a special relationship prescribed by Presidential Decree, in which case the value of the stocks, etc. of the domestic corporation exceeds 30/100 of the total value of its property (or 50/100 in cases of a public-interest corporation, etc. that undergo external audit under Article 50 (3), open and uses an exclusive account under Article 50-2, and disclose closing statements, etc. under Article 50-3), the additional tax prescribed in Article 78 (7) shall be imposed. In such cases, the calculation of the value of such excess stocks, etc. of the domestic corporation shall be prescribed by Presidential Decree. <Amended on Dec. 20, 2016; Dec. 22, 2020> |
| (10) | Where a public-interest corporation, etc. advertises or publicizes without reasonable consideration for the purpose of increasing the profits of a domestic corporation in a special relationship with it, the additional tax prescribed in Article 78 (8) shall be imposed. In such cases, the scope of a domestic corporation in a special relationship, the methods of advertisement and public relations, and other necessary matters shall be prescribed by Presidential Decree. |
| (11) | Where a public-interest corporation, etc. ceases to satisfy any of the following requirements after having received a contribution of stocks, etc. in excess of 5/100 of the total number of outstanding stocks, etc. of a domestic corporation (including acquiring stocks, etc. with the contributed property and proceeds from sale of such property), a corresponding amount shall be included in the taxable value of inherited or donated property under Article 16 (2) or 48 (1), or gift tax shall be immediately imposed on it under Article 48 (2), as prescribed by Presidential Decree: <Amended on Dec. 22, 2020> |
| 1. | To use at least an amount calculated by multiplying the operating income referred to in paragraph (2) 3 by the percentage prescribed by Presidential Decree for a direct public-interest project; |
| 2. | To at least an amount calculated by multiplying the value of contributed property referred to in paragraph (2) 7 by the percentage prescribed by Presidential Decree for a direct public-interest project; |
| 3. | To satisfy other requirements prescribed by Presidential Decree, such as the composition of directors in a public-interest corporation. |
| (12) | Where a public-interest corporation, etc. referred to in any subparagraph of Article 16 (3) or the proviso of Article 48 (2) 2 becomes ineligible for a public-interest corporation, etc. referred to in the provisions, with the exception of the subparagraphs, of Article 49 (1), or hold the stocks, etc. of a domestic corporation in a special relationship with the relevant contributor in excess of 5/100 of the total number of outstanding stocks, etc. of the domestic corporation, the relevant amount shall be included in the taxable value of inheritance tax under Article 16 (2) or gift tax under Article 48 (1), or gift tax shall be imposed immediately under Article 48 (2). <Newly Inserted on Dec. 22, 2020> |
| (13) | A public-interest corporation, etc. prescribed by Presidential Decree, such as one that receives a contribution of the stocks, etc. of a domestic corporation in excess of 5/100 of the total number of outstanding stocks, etc. under Article 16 (2), shall report whether it has fulfilled its obligation in the taxable period or business year to the commissioner of a regional tax office, as prescribed by Presidential Decree. <Newly Inserted on Dec. 22, 2020> |
| (14) | Criteria for determining whether the contributed property is used for direct public-interest projects, criteria for determining whether the contributed property is for profits or for profit-making projects, methods for calculating the values of stocks, etc. exceeding the percentage specified in Article 16 (2) 2 of the total number of outstanding stocks, etc., the scope of contributors in a special relationship with the relevant domestic corporation, detailed matters about inclusion in the taxable value of inheritance tax or gift tax or immediate imposition of gift tax, matters about reporting whether a public-interest corporation, etc. has fulfilled its obligation, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 20, 2016; Dec. 19, 2017; Dec. 22, 2020> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 49 (Upper Limits of Holding Stocks by Public-Interest Corporation) |
| (1) | Where a public-interest corporation, etc. owns voting stocks or equity shares (hereafter in this Article referred to as "stocks, etc.") of the same domestic corporation in excess of 5/100 of the total number of outstanding stocks or the total amount of equity shares (hereafter in this Article referred to as “total number of outstanding stocks, etc.”) as of December 31, 1996, the public-interest corporation, etc. shall cause itself to hold such stocks. etc. not in excess of 5/100 of the total number of the stocks issued, etc. (hereinafter referred to as "upper limit of holding stocks, etc.") by any of the following deadlines: Provided, That this shall not apply to a public-interest corporation, etc., a public-interest corporation, etc. established with a fund contributed by the State or a local government, and a corresponding public-interest corporation, etc. prescribed by Presidential Decree: <Amended on Dec. 20, 2016; Dec. 22, 2020> |
| 1. | Where the ratio of the stocks, etc. held by the public-interest corporation, etc. exceeds 5/100 of the total number of outstanding stocks, etc. but is not more than 20/100 thereof: By December 31, 1999; |
| 2. | Where the ratio of the stocks, etc. held by the public-interest corporation, etc. exceeds 20/100 of the total number of outstanding stocks, etc: By December 31, 2001. |
| (2) | For purposes of paragraph (1), other necessary matters, such as the methods of calculating the upper limits of holding stocks, etc. shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 50 (Public-Interest Corporation’s Obligation to Undergo Tax Verification and Audit) |
| (1) | A public-interest corporation, etc. shall undergo tax verification (hereinafter referred to as "tax verification by outside experts") as to whether the contributed property is used for public-interest projects by taxable period or business year by appointing at least two attorneys-at-law, certified public accountants, or certified tax accountants who meet standards prescribed by Presidential Decree: Provided, That any public-interest corporation, etc. prescribed by Presidential Decree in consideration of the size of its assets and characteristics of its business need not undergo tax verification by outside experts. <Amended on Dec. 20, 2016> |
| (2) | A public-interest corporation, etc. that has undergone tax verification by outside experts pursuant to paragraph (1) shall report the findings thereof to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. In such cases, the head of the competent tax office shall make the findings on the tax verification by outside experts as to whether the public-interest corporation, etc. uses the contributed property for public-interest projects available for perusal by the public. |
| (3) | A public-interest corporation, etc. shall undergo an audit conducted by an auditor as defined in subparagraph 7 of Article 2 of the Act on External Audit of Stock Companies for each taxable period or business year: Provided, That this does not apply to any of the following public-interest corporations, etc.: <Amended on Dec. 31, 2018; Dec. 31, 2019> |
| 1. | A public-interest corporation, etc., with property and income less than the scale prescribed by Presidential Decree; |
| 2. | A public-interest corporation, etc. prescribed by Presidential Decree in consideration of the characteristics of its business. |
| (4) | Where a public-interest corporation, etc. prescribed by Presidential Decree in consideration of the size of its assets has undergone an audit for four consecutive taxable periods or business years under paragraph (3), the Minister of Economy and Finance may require the public-interest corporation, etc. to undergo an audit conducted by an auditor designated by that Minister for the two consecutive taxable periods or business year beginning from the following taxable period of business year. In such cases, the Minister of Economy and Finance may entrust all or some of the designation duties to the Commissioner of the National Tax Service. <Newly Inserted on Dec. 31, 2019; Dec, 31, 2022> |
| (5) | The Minister of Economy and Finance may review audit reports and accompanying financial statements disclosed by public-interest corporations, etc. obliged to undergo an audit under paragraphs (3) and (4). In such cases, the Minister of Economy and Finance may entrust all or some of the review duties to a corporation or an association specialized in audits and review, as prescribed by Presidential Decree.<Newly Inserted on Dec. 31, 2019> |
| (6) | For purposes of paragraphs (1) through (5), items for tax verification, procedures and methods for tax verification, the preparation of reports, procedures for reporting findings of tax verification, methods of conducting audits, procedures and methods for appointment of auditors, review tasks and actions to be taken based on review findings, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2019> |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 20, 2016]
| Article 50-2 (Public-Interest Corporation's Obligation to Open and Use Exclusive Account) |
| (1) | Where revenue and expenditure received or disbursed in connection with a direct public-interest project by a public-interest corporation, etc. fall under any of the following subparagraphs, the public-interest corporation, etc. (excluding public-interest corporations, etc. prescribed by Presidential Decree in consideration of the characteristics of their business; hereinafter the same applies) shall use an exclusive account (hereinafter referred to as "exclusive account") for the direct public-interest project prescribed by Presidential Decree: <Amended on Jan. 1, 2013> |
| 1. | Where revenue and expenditure related to a direct public-interest project is received or settled through a financial company, etc. prescribed by Presidential Decree; |
| 2. | Where donations, contributions or membership fees are received: Provided, That this shall be excluded in cases prescribed by Presidential Decree where cash is received directly; |
| 3. | Where personnel expenses and rent are paid; |
| 4. | Where expenses for a direct public-interest project prescribed by Presidential Decree, such as donations, scholarship, research expenses, etc. are paid: Provided, That it shall be limited to where such expenses exceed one million won; |
| 5. | Where the money calculated by disposing of property for profit-making or profit-making projects and other operating income are transferred to the accounting of a proper purpose business (applicable only when the transfer of funds, such as cash, is accompanied). |
| (2) | A public-interest corporation, etc. shall separately prepare and keep detailed statements in any cases not falling under any of the subparagraphs of paragraph (1) in connection with direct public-interest projects: Provided, That this shall not apply to revenue and expenditure prescribed by Presidential Decree, including cases where evidentiary documents falling under Article 160-2 (2) 3 or 4 of the Income Tax Act are prepared. |
| (3) | A public-interest corporation, etc. shall open an exclusive account within three months from the date it qualifies as a public-interest corporation, etc., and shall report thereon to the head of the tax office having jurisdiction over the place of tax payment of the public-interest corporation, etc.: Provided, That a public corporation may report the opening of an exclusive account by June 30, 2019, where it fails to file such report pursuant to the main clause of this Article, and the sum of the two amounts specified in (A) and (B) as follows is less than 500 million won: (A) the amount of income (referring to the amount of income under the Income Tax Act related to the relevant public project or the amount of income related to profit-making business subject to corporate taxation under the Corporate Tax Act) for the taxable period of income tax or for the business year of corporate tax to which January 1, 2016, January 1, 2017, or January 1, 2018 belongs; and (B) the value amount of property contributed for such taxable period of income tax or for such business year of corporate tax. <Amended on Dec. 31, 2018> |
| (4) | Where a public-interest corporation, etc. intends to change an exclusive account or open an additional exclusive account, it shall report thereon, as prescribed by Presidential Decree. |
| (5) | The opening, reporting, change and addition of exclusive accounts of a public-interest corporation, etc. and the method of reporting, extent of using exclusive accounts, necessary matters for preparing detailed statements shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 50-3 (Public-Interest Corporation’s Obligation to Disclose Closing Documents) |
| (1) | A public-interest corporation, etc. (excluding public-interest corporations, etc. prescribed by Presidential Decree in consideration of the characteristics of their business, hereafter in this Article the same applies) shall disclose the following documents, etc. (hereafter in this Article referred to as "closing documents, etc.") by posting them on the website of the National Tax Service within four months from the last day of the taxable period or business year of that public-interest corporation, etc., as prescribed by Presidential Decree: Provided, That a public-interest corporation, etc. prescribed by Presidential Decree in consideration of the size of its assets may disclose the closing documents, etc. in a simplified manner, as prescribed by Presidential Decree. <Amended on Dec. 27, 2010; Dec. 20, 2016; Dec. 31, 2018; Dec. 31, 2019> |
| 2. | Details of collection and disbursement of donations; |
| 3. | Matters concerning the representative, directors, contributors, location, and intended projects of the relevant public-interest corporation, etc.; |
| 4. | Details of use of income accrued from operating the contributed property; |
| 5. | An audit report and accompanying financial statements, in cases of a public-interest corporation, etc. obliged to undergo an audit pursuant to Article 50 (3); |
| 6. | Matters prescribed by Presidential Decree, such as stock holding status |
| (2) | Where a public-interest corporation, etc. fails to disclose the closing documents, etc. pursuant to paragraph (1) or where any erroneous information is included in the disclosure, the Commissioner of the National Tax Service, the commissioner of the regional tax office or the head of the tax office having jurisdiction over the placement of tax payment may request the public-interest corporation, etc. to disclose the closing documents or to correct such erroneous information within a specified period not exceeding one month. <Amended on Dec. 31, 2022> |
| (3) | The Commissioner of the National Tax Service may provide the closing documents, etc. disclosed by a public-interest corporation, etc. to any person prescribed by Presidential Decree. <Newly Inserted on Dec. 31, 2011> |
| (4) | Disclosure of the closing documents, etc. and the procedures for requesting correction thereof, under paragraphs (1) and (2), and other matters shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011> |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 20, 2016]
| Article 50-4 (Accounting Standards Applied to Public-Interest Corporation) |
| (1) | Public-interest corporations, etc. (excluding public-interest corporations, etc. prescribed by Presidential Decree in consideration of the characteristics of their business) shall comply with accounting standards prescribed by Presidential Decree when it fulfills its obligations to undergo an audit under Article 50 (3) and to disclose its closing documents, etc. under Article 50-3. |
| (2) | Matters necessary for the operation of the accounting system, procedures for the operation thereof, etc., such as the formulation and amendment of accounting standards prescribed in paragraph (1), shall be prescribed by Presidential Decree. <Amended on Jun. 9, 2020> |
[This Article Newly Inserted on Dec. 20, 2016]
| Article 51 (Duty to Prepare and Keep Books and Records) |
| (1) | A public-interest corporation, etc. shall prepare books and records concerning the contributed property and details on the operation of public-interest projects by taxable period of income tax or by business year of corporate tax, and keep significant evidentiary documents related to such books and records. |
| (2) | Books, records and significant evidentiary documents under paragraph (1) shall be preserved for 10 years from the last day of the taxable period of income tax or the business year of corporate tax. |
| (3) | Books, records and significant evidentiary documents concerning profit-making projects of a public-interest corporation, etc. prepared and kept pursuant to Article 160 of the Income Tax Act and the proviso of Article 112 of the Corporate Tax Act shall be deemed books, records and significant evidentiary documents prepared and kept pursuant to paragraph (1). In such cases, the books, records and significant evidentiary documents include anything stored in a microfilm, magnetic disk, diskette, or any other information storage device. |
| (4) | Necessary matters concerning the preparation and keeping of books, records and evidentiary documents under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 52 (Non-Inclusion of Property Placed in Public Trust in Taxable Value) |
The property among donated property that a donor contributes to a public-interest corporation, etc. through a public trust prescribed by the Public Trust Act for religious, charitable, academic or other public-interest purposes shall not be included in the taxable value of gift. In such cases, Article 17 (2) shall apply mutatis mutandis. <Amended on Jul. 25, 2011; Mar. 18. 2014> [This Article Wholly Amended on Jan. 1, 2010]
| Article 52-2 (Non-Inclusion in Taxable Value of Property Donated to Person with Disability) |
| (1) | Where a person with a disability prescribed by Presidential Decree (hereafter in this Article referred to as “person with a disability”) receives donation of an asset (referring to an asset prescribed by Presidential Decree, which can be placed in a trust managed by a trust business entity prescribed by the Financial Investment Services and Capital Markets Act; hereafter in this Article the same applies), places the donated asset in a trust designating him or herself as the beneficiary, and the trust (hereafter in this Article referred to as “self-settled trust”) meets all of the following requirements, the value of the donated asset shall not be included in the taxable value of gift tax: |
| 2. | The person with a disability shall be the beneficiary who receives all profits accruing from the trust; |
| 3. | The term of the trust shall be until the time of death of the person with a disability: Provided, That where the term of trust expires before the death of that person shall be extended by up to the time of his or her death. |
| (2) | Where an individual places an asset in a trust designating a person with a disability as the beneficiary and the trust (hereafter in this Article “third party trust”) meets all of the following requirements, profits (including a withdrawn amount if the principal of the trust is withdrawn under the proviso of paragraph (4); hereafter in this Article the same applies) from the trust donated to the person with a disability shall not be included in the taxable value of gift tax: |
| 1. | The asset shall be placed in a trust managed by a trust business entity; |
| 2. | The person with a disability shall be the beneficiary to receive all profits accruing from the trust: Provided, That the same does not apply to any residue after the death of that person with a disability; |
| 3. | The following details shall be included in the trust agreement: |
| (a) | The residue will vest in that person with a disability if the trust is revoked or expires before the death of such person; |
| (b) | The beneficiary cannot be changed before the death of that person with a disability; |
| (c) | The tustor’s status in the trust will transfer to that person with a disability if the trustor dies before the death of such person with a disability. |
| (3) | The sum of the values (referring to the sum of the values of donated assets while the person with a disability is alive) of donated assets under paragraph (1) and the sum (referred to the sum of the values of principal at the time of creation of third party trusts designating that person with a disability as the beneficiary while such person is alive) is limited to 500 million won. |
| (4) | Where any of the following is applicable to a person with a disability who has created a self-settled trust with an asset donated under paragraph (1), the head of the competent tax office, etc. shall immediately impose gift tax on the person with a disability, deeming that the value of that asset is donated to the person with a disability on the date prescribed by Presidential Decree: Provided, That this does not apply where a person with a disability prescribed by Presidential Decree among persons with disabilities withdraws from the principal of the trust for purposes prescribed by Presidential Decree, such as paying his or her medical expenses, or for any unavoidable reason prescribed by Presidential Decree: |
| 1. | Where the trust is revoked or expires: Provided, That cases where the person renews the trust within one month from the date of revocation or the date of expiration are excluded; |
| 2. | Where the beneficiary is changed during the term of the trust; |
| 3. | Where it is verified that all or some profits from the trust vest in any person other than the person with a disability; |
| 4. | Where the principal in the trust has decreased. |
| (5) | A person who wishes to be eligible under paragraph (1) or paragraph (2) shall apply to the head of the tax office having jurisdiction over the place of tax payment by the filing deadline (referring to the filing deadline of profits from the first donated trust in cases of a third party trust), prescribed in Article 68, as prescribed by Presidential Decree. |
| (6) | Where a person who wishes to be eligible under paragraph (2) has filed a return under Article 68 or an application under paragraph (5) about profits from the first trust donated to the person, such person need not file a return under Article 68 or an application under paragraph (5) about profits (limited to profits not included in the taxable value under paragraph (2)) from the trust donated as the beneficiary of the third-party trust after the first donation. |
| (7) | Methods for calculating the amount of gift tax under paragraph (4), and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 31, 2019]
SECTION 5 Donation Deduction
| Article 53 (Gift Deduction) |
Where a resident receives a donation from any of the following persons, an amount stipulated in the following classifications shall be deducted from the taxable value of gift. In such cases, if the sum of an amount for which a donee has received a deduction within 10 years before receiving the relevant donation and an amount deductible from the value of the relevant donation exceeds any of the following amounts, the excess portion is not entitled to deduction: <Amended on Dec. 31, 2011; Jan. 1, 2014; Dec. 15, 2015>
| 1. | Where a donation is received from a spouse: 600 million won; |
| 2. | Where a donation is received from a lineal ascendant (including a spouse in a marital relationship (excluding any de facto marriage; hereafter in this Article the same applies) with any lineal ascendant of the donee): 50 million won: Provided, That where a minor receives a donation from his or her lineal ascendant, 20 million won shall be deducted; |
| 3. | Where a donation is received from a lineal descendant (including any lineal descendant of the spouse in a marital relationship with the donee): 50 million won; |
| 4. | Where a donation is received from a relative by blood within the sixth degree or a relative by marriage within the fourth degree, other than those prescribed by subparagraphs 2 and 3: 10 million won. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 54 (Provisions to be Applied Mutatis Mutandis) |
Article 23 shall apply mutatis mutandis to deduction of the taxable value of donated property where the donated property is destroyed or damaged due to a disaster. In such cases, "when inheritance commences due to the death of a resident" in Article 23 (1) shall be construed as "when property is donated by a third party"; "Article 67" as "Article 68"; "inherited property" as "donated property"; "taxable value of inherited property" as "taxable value of donated property"; and "heir or legatee" in Article 23 (2) shall be construed as "donee". [This Article Wholly Amended on Jan. 1, 2010]
SECTION 6 Tax Base and Tax Rate
| Article 55 (Tax Base and Minimum Threshold of Gift Tax) |
| (1) | The gift tax base shall be an amount calculated by deducting an appraisal and assessment fee for the donated property prescribed by Presidential Decree from any of the following amounts: <Amended on Dec. 31, 2011; Dec. 15, 2015; Dec. 31, 2018> |
| 1. | Deeming property registered in the name of another person to have been donated pursuant to Article 45-2: The amount of the property registered in the name of another person; |
| 2. | Deeming profits under Article 45-3 or 45-4 to have been donated: Profits deemed donated; |
| 3. | Donated property excluded from aggregation, excluding those stipulated in subparagraphs 1 and 2: An amount derived by deducting 30 million won from the value of the relevant donated property; |
| 4. | In cases other than those stipulated in subparagraphs 1 through 3: The amount derived by deducting the amount under Articles 53 and 54 from the taxable value of gift under Article 47 (1). |
| (2) | When the tax base is less than 500,000 won, no gift tax shall be imposed. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 56 (Gift Tax Rate) |
Gift tax shall be the amount calculated (hereinafter referred to as "calculated amount of gift tax") by applying the tax rate specified in Article 26 to the tax base calculated under Article 55. [This Article Wholly Amended on Jan. 1, 2010]
| Article 57 (Extra Taxation on Donation to Lineal Descendant) |
| (1) | Where a donee is a lineal descendant who is not an offspring of a donor, an amount corresponding to 30/100 (40/100 where a donee is a lineal descendant of a donor and, at the same time, is a minor while not being an offspring of the donor, and where the value of donated property exceeds two billion won) of the calculated amount of gift tax shall be added: Provided, That where a lineal descendant of a donor who is the closest relative thereof dies, and where a lineal descendant who is the closest relative of the dead person receives the donation, this shall not apply. <Amended on Dec. 15, 2015> |
| (2) | Necessary matters, such as the method of calculating extra tax, etc. shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 15, 2015> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 58 (Credit of Amount of Tax Already Paid or to be Paid) |
| (1) | The amount of gift tax (referring to the calculated amount of the gift tax on the relevant donated property as at the time of donation) paid or payable with respect to the value of the donated property (referring to the aggregate of the values of the donated property when two or more donations are made) added to the taxable value of donated property pursuant to Article 47 (2) shall be deducted from the calculated amount of gift tax: Provided, That this shall not apply where no gift tax is imposed on the donated property added to the taxable value of donated property due to the expiration of the period specified in Article 26-2 (4) or (5) of the Framework Act on National Taxes. <Amended on Dec. 31, 2019> |
| (2) | In cases under paragraph (1), the amount of gift tax to be deducted shall be limited to that calculated by multiplying the calculated amount of gift tax by the ratio of the tax base of donated property added to the tax base of aggregated amounts of the value of relevant donated property and of the value of the donated property added under Article 47 (2). |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 59 (Deduction of Amount of Tax Paid in Foreign Country) |
If gift tax is imposed on any donated property in a foreign country pursuant to any statutes and regulations of the foreign country when a person receives a donation of property from a third person, an amount corresponding to the imposed gift tax shall be deducted from the calculated amount of gift tax, as prescribed by Presidential Decree.
[This Article Wholly Amended on Jan. 1, 2010]
CHAPTER IV ASSESSMENT OF PROPERTY
| Article 60 (Principles of Assessment) |
| (1) | The value of property on which inheritance tax or gift tax is imposed pursuant to this Act shall be based on its market value as of the date of commencement of inheritance or as of the date of donation (hereinafter referred to as "base date of assessment"). In such cases, the following values are deemed market values in the following cases: <Amended on Dec. 20, 2016; Dec. 22, 2020; Jul. 18, 2023> |
| 1. | In cases of stocks, etc. prescribed by Presidential Decree (excluding stocks, etc. referred to in Article 63 (2)) among stocks, etc. of listed companies traded in a securities market prescribed by Presidential Decree, being securities markets provided in the Financial Investment Services and Capital Markets Act: Values assessed by the method provided in Article 63 (1) 1 (a); |
| 2. | In cases of virtual assets as defined in subparagraph 1 of Article 2 of the Act on the Protection of Virtual Assets Users: Values assessed by the method provided in Article 65 (2). |
| (2) | The current market price prescribed in paragraph (1) shall be the value deemed to be normally established when many and unspecified persons engage in transactions freely, and include what is accepted as the current market price, as prescribed by Presidential Decree, such as the price of expropriation, price of public auction, and appraised value. |
| (3) | Where it is impracticable to calculate the current market price in applying paragraph (1), the value assessed by the methods stipulated in Articles 61 through 65, based on the kinds, scale, transaction circumstances, etc. of the relevant property, shall be deemed the current market price. |
| (4) | For purposes of paragraph (1), the value of the donated property added to the value of the inherited property pursuant to Article 13 shall be based on the current market price as of the date of donation. |
| (5) | In determining the appraised value prescribed in paragraph (2), requests shall be made for at least two appraisal institutions (in cases of real estate whose value is not more than the amount prescribed by Presidential Decree, at least one appraisal institution), as prescribed by Presidential Decree. In such cases, where grounds prescribed by Presidential Decree exist, such as that the value appraised by an appraisal institution is below 80/100 of the value appraised by another appraisal institution, etc., the head of the competent tax office or the Director of a regional National Tax Service may designate the relevant appraisal institution as an appraisal institution whose appraisal of market price is not approved within a fixed period not exceeding one year following procedures prescribed by Presidential Decree, as prescribed by Presidential Decree, and the value appraised by an appraisal institution designated as an appraisal institution whose appraisal of market price is not approved while it is designated as such shall not be deemed a market price. <Newly Inserted on Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017> |
[This Article Wholly Amended on Jan. 1, 2010]
[Enforcement Date: Jul. 19, 2021] Article 60
| Article 61 (Assessment of Real Estate) |
| (1) | Real estate shall be assessed by any of the following methods: <Amended on Jan. 1, 2014; Jan. 19, 2016; Dec. 20, 2016> |
| 1. | Land: The officially assessed individual land prices prescribed in the Act on the Public Announcement of Real Estate Values (hereinafter referred to as “officially assessed individual land prices”): Provided, That the value of land, the officially assessed individual price of which has yet to be established (specific assessment criteria shall be prescribed by Presidential Decree), shall be an amount assessed by the head of the tax office having jurisdiction over the place of tax payment in a manner prescribed by Presidential Decree, based on the officially assessed individual land price of similar land adjacent thereto, and the value of land in an area where land price rises sharply, which is prescribed by Presidential Decree, shall be an amount assessed by using a multiplication method; |
| 2. | Building: The price calculated and publicly notified by the Commissioner of the National Tax Service at least once a year, based on the construction costs, structure, purposes of use, location, year of construction, etc. of the relevant building (excluding buildings falling under subparagraph 3 or 4); |
| 3. | Officetel and commercial buildings: For an officetel and a commercial building (including land attached thereto) under sectional ownership in which the attached land is jointly owned and which is prescribed by Presidential Decree, based on the purpose of use and size of the building, the number of buildings under sectional ownership, etc., the prices of land and buildings calculated and publicly notified by the Commissioner of the National Tax Service collectively at least once a year, based on the type, scale, transaction situation, location, etc. of the relevant building; |
| 4. | Housing: The individual housing price or collective housing price prescribed in the Act on the Public Announcement of Real Estate Values (if any collective housing price is determined and publicly notified by the Commissioner of the National Tax Service pursuant to the proviso of Article 18 (1) of that Act, referring to such price; hereafter in this subparagraph referred to as “publicly notified housing price”): Provided, That in either of the following cases, the price shall be an amount assessed by the head of the tax office having jurisdiction over the place of tax payment in a manner prescribed by Presidential Decree, in consideration of the publicly notified housing price of similar housing adjacent thereto: |
| (a) | Where there is no publicly notified housing price for the relevant housing; |
| (b) | Where it is inappropriate that the relevant housing is assessed, based on its publicly notified housing price, because it is substantially repaired or remodeled under Article 2 (1) 9 or 10 of the Building Act after the public notification of the price. |
| (2) | "Multiplication method" in the proviso of paragraph (1) 1 means a method of calculation, based on amounts calculated by multiplying officially assessed individual land price by a rate prescribed by Presidential Decree. |
| (3) | The value of superficies, a right to acquire real estate and a right to use a specific facility shall be an amount assessed according to methods prescribed by Presidential Decree, based on the remaining period, nature, substance, transaction circumstances, etc. of such right. |
| (4) | The value of other facilities or structures shall be an amount assessed according to methods prescribed by Presidential Decree, based on the value required to rebuild or reacquire such facilities or structures as of the base date of assessment. |
| (5) | The value of property, the lease contract of which is de facto concluded or the leasehold of which is registered, shall be the larger of the assessed value based on its rent, etc. according to methods prescribed by Presidential Decree and the value assessed under paragraphs (1) through (4). <Amended on Dec. 15, 2015> |
| (6) | Articles 99 (4) through (6) and 99-2 of the Income Tax Act shall apply mutatis mutandis to the hearing of opinions of owners and any other interested persons about the value calculated and publicly notified by the Commissioner of the National Tax Service pursuant to paragraph (1) 3 as well as an application for re-calculation and public notification. |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Jan. 1, 2010]
| Article 62 (Assessment of Vessel and other Tangible Asset) |
| (1) | Vessels, aircraft, vehicles, machinery/equipment, and standing timber subject to application of the Standing Timber Act shall be assessed according to methods prescribed by Presidential Decree, in consideration of the types, size, circumstances of transactions, etc. of the relevant assets. |
| (2) | Goods, products, paintings/writings, antiques, animals subject to ownership and any other tangible assets shall be assessed according to methods prescribed by Presidential Decree, in consideration of the types, size, circumstances of transactions, etc. of the relevant assets. |
| (3) | The value of property the lease contract of which is de facto concluded or the leasehold of which is registered shall be the larger of the assessed value based on its rent, etc. according to methods prescribed by Presidential Decree and the value assessed under paragraphs (1) and (2). |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 63 (Assessment of Securities) |
| (1) | Securities shall be assessed by any of the following methods: <Amended on May 28, 2013; Dec. 20, 2016> |
| 1. | Assessment of shares of stock, etc.: |
| (a) | With regard to stocks, etc. prescribed by Presidential Decree (hereafter in this subparagraph referred to as "exchange-listed shares") among shares of corporations listed on the stock exchange, traded in the securities market prescribed by Presidential Decree, which is provided for in the Financial Investment Services and Capital Markets Act, the average amount (where it is inappropriate to calculate the average amount for two months before and after the base date of assessment because any grounds for the increase of capital, merger, etc. arise during that period, the average amount shall be calculated for the period as prescribed by Presidential Decree during the period of two months before and after the base date of assessment) of closing market prices (irrespective of whether trading was conducted or not) on a daily basis in the stock exchange permitted pursuant to the Financial Investment Services and Capital Markets Act publicly announced for two months before and after the base date of assessment (where the base date of assessment is no trading day prescribed by Presidential Decree, such as a public holiday, the base date of assessment shall be the day before the date): Provided, That where profits generated from a merger are calculated pursuant to Article 38, market prices of exchange-listed shares owned by a corporation that ceases to exist or is acquired, or newly incorporated or surviving corporation through a merger (including a merger after division) shall be closing market prices in the stock exchange as of the base date of assessment; |
| (b) | Stocks, etc. other than those prescribed in item (a) shall be assessed in accordance with the methods prescribed by Presidential Decree, based on the assets, earnings, etc. of the relevant corporation; |
| (c) | Deleted; <Dec. 20, 2016> |
| 2. | Securities other than those prescribed in subparagraph 1, such as government bonds and public bonds, shall be assessed in accordance with the methods prescribed by Presidential Decree, based on the type, size, transaction circumstances, etc. of the relevant property. |
| (2) | Notwithstanding paragraph (1) 1, any of the following stocks, etc. shall be assessed by the methods prescribed by Presidential Decree, based on the business feasibility, transaction circumstances, etc. of the relevant corporation: <Amended on May 28, 2013; Dec. 15, 2015; Dec. 22, 2020> |
| 1. | Stocks, etc. of a corporation that has reported on its securities to the Financial Services Commission for the purpose of public offer within the period prescribed by Presidential Decree; |
| 2. | Of the stocks, etc. mentioned in paragraph (1) 1 (b), stocks, etc. of a corporation that has applied for listing to the securities market prescribed by Presidential Decree being one prescribed by the Financial Investment Services and Capital Markets Act within the period prescribed by Presidential Decree for the purpose of trading its stocks, etc. on the securities exchange; |
| 3. | Of the stocks of a corporation listed on an exchange, new stocks acquired as a result of an increase in capital of the relevant corporation, but not listed as of the base date of assessment. |
| (3) | For purposes of paragraph (1) 1, paragraph (2), and Article 60 (2), stocks, etc. (excluding the stocks, etc. prescribed by Presidential Decree, such as those of a small and medium enterprise prescribed by Presidential Decree, a middle-standing enterprise prescribed by Presidential Decree, and a corporation that has continued to have deficits under Article 14 (2) of the Corporate Tax Act within three business years prior to the business year in which the base date of assessment falls) of the largest shareholder or the largest investor prescribed by Presidential Decree and a shareholder, etc. who are specially related to the largest shareholder or the largest investor (hereafter in this paragraph referred to as "largest shareholder, etc.") shall be calculated by adding 20/100 of the value assessed under paragraphs (1) 1 and (2) or the value recognized under Article 60 (2) to such value. In such cases, the method of calculating stocks, etc. held by the largest shareholder, etc. shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011; Dec. 15, 2015; Dec. 20, 2016; Dec. 31, 2019; Dec. 31, 2022> |
| (4) | Deposits, savings, installment savings, etc. shall be assessed, based on the value calculated by deducting an amount corresponding to the withholding tax prescribed in Article 127 (1) of the Income Tax Act from the aggregate of the total amount of deposits and receipts as of the base date of assessment and the amount of accrued interest receivable as of the base date of assessment. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 64 (Value of Intangible Property Right) |
The value of an intangible property right shall be the larger of the following amounts:
| 1. | An amount derived by deducting the depreciation cost specified in the Corporate Tax Act accruing from the date of acquisition to the base date of assessment from the acquisition cost of the property; |
| 2. | An amount assessed according to the methods prescribed by Presidential Decree in consideration of future economic earnings, etc. |
[This Article Wholly Amended on Jan. 1, 2014]
| Article 65 (Assessment of Other Conditional Right) |
| (1) | The value of a conditional right, a right with an undetermined duration, a right to receive profits accruing from a trust, a right in pending litigation, and a right to receive periodic payments prescribed by Presidential Decree shall be assessed according to methods prescribed by Presidential Decree, based on the nature, substance, remaining duration, etc. of the relevant right. |
| (2) | Any virtual asset as defined in subparagraph 1 of Article 2 of the Act on the Protection of Virtual Assets Users shall be assessed by the methods prescribed by Presidential Decree in consideration of the trading scale and trading methods of the virtual asset. <Newly Inserted on Dec. 22, 2020; Jul. 28, 2023> |
| (3) | Other assets or properties, the assessment methods of which are not prescribed by this Act, shall be assessed by applying mutatis mutandis the assessment methods provided for in paragraph (1) and Articles 60 through 64. <Amended on Dec. 22, 2020> |
[This Article Wholly Amended on Jan. 1, 2010]
[Enforcement Date: Jul. 19, 2024] Article 65
| Article 66 (Special Cases concerning Assessment of Property for which Mortgage is Created) |
Notwithstanding Article 60, the value of any of the following property shall be the value assessed as prescribed by Presidential Decree based on the amount of claims secured by such property, or the value assessed according to Article 60, whichever is larger: <Amended on Jun. 10, 2010; Dec. 31, 2018> | 2. | Property transferred for security; |
| 3. | Property registered as leasehold on a deposit basis (including property leased in return for lease deposit); |
| 4. | Property concerning which a trust agreement prescribed by Presidential Decree is concluded for the purpose of securing the performance of obligation by the trustor. |
[This Article Wholly Amended on Jan. 1, 2010]
CHAPTER V RETURN AND PAYMENT
| Article 67 (Inheritance Tax Base Return) |
| (1) | An heir or a legatee obliged to pay inheritance tax pursuant to Article 3-2 shall file a return on the taxable value of inheritance and inheritance tax base under Articles 13 and 25 (1) to the head of a tax office having jurisdiction over the place of tax payment within six months from the last day of the month in which the date of commencement of the inheritance falls, as prescribed by Presidential Decree. <Amended on Dec. 15, 2015> |
| (2) | A return under paragraph (1) shall be accompanied by what is prescribed by Presidential Decree, such as documents substantiating the kinds, quantities, and assessed values of inherited property, division of property, various deductions, etc. necessary for the calculation of the tax base of inherited property. |
| (3) | With respect to the executor of a will or the administrator of inherited property, the period stipulated under paragraph (1) shall apply only when he or she is designated or appointed within such period, reckoning from the date of his or her designation or appointment. <Amended on Jan. 1, 2014> |
| (4) | Where a decedent or his or her heir has established a domicile in a foreign country, the period stipulated under paragraph (1) shall be nine months. |
| (5) | Where an heir is not determined by the filing deadline under paragraph (1), a document stating the inheritance relationship with the determined heir shall be submitted to the head of the tax office having jurisdiction over the place of tax payment within 30 days from the date on which the heir is determined, in addition to a return filed under paragraph (1). |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 68 (Gift Tax Base Return) |
| (1) | A person obliged to pay gift tax pursuant to Article 4-2 shall file a return on the taxable value of gift and gift tax base under Articles 47 and 55 (1) to the head of a tax office having jurisdiction over the place of tax payment within three months from the last day of the month in which the date of donation falls, as prescribed by Presidential Decree: Provided, That the deadline to file adjusted gift tax base following the listing of unlisted stocks or merger, etc. of corporations pursuant to Articles 41-3 and 41-5 shall be the day three months from the last day of the month in which the adjustment base date falls, and the deadline to file gift tax base under Articles 45-3 and 45-5 shall be the day three months from the last day of the month in which the deadline to file tax base under Article 60 (1) of the Corporate Tax Act by a beneficiary corporation or a specific corporation falls. <Amended on Dec. 31, 2011; Dec. 15, 2015> |
| (2) | A return filed under paragraph (1) shall be accompanied by what is prescribed by Presidential Decree, such as documents substantiating the kinds, quantities and assessed values of donated property, various deductions, etc. necessary for the calculation of the tax base of donated property. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 69 (Deduction of Reported Amount of Tax) |
| (1) | Where the tax base of inherited property is reported pursuant to Article 67, an amount corresponding to 3/100 of the amount derived from deducting any of the following amounts from the calculated amount of inheritance tax (including amounts added to the tax amount calculated pursuant to Article 27) shall be deducted from the calculated amount of inheritance tax: <Amended on Dec. 20, 2016; Dec. 19, 2017> |
| 1. | An amount, the collection of which is deferred pursuant to Article 74; |
| 2. | An amount that is deducted, reduced or exempted from the amount of tax calculated pursuant to this Act or other Acts. |
| (2) | Where gift tax base is filed pursuant to Article 68, an amount corresponding to 3/100 of the amount calculated by deducting following amount from the calculated amount of gift tax (including an amount added to the calculated amount of tax pursuant to Article 57) shall be deducted from the calculated amount of gift tax: <Amended on Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017> |
| 1. | An amount, the collection of which is deferred pursuant to Article 75; |
| 2. | An amount that is deducted, reduced or exempted from the amount of tax calculated pursuant to this Act or other statutes. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 70 (Voluntary Payment) |
| (1) | A person who reports inheritance tax or gift tax pursuant to Article 67 or 68 shall pay an amount calculated by deducting any of the following amounts from the calculated amount of each tax to the tax office having jurisdiction over the place of tax payment, the Bank of Korea, or the post office, by the respective filing deadline, as prescribed by Presidential Decree: <Amended on Dec. 31, 2022> |
| 2. | An amount to be deducted under the provisions, with the exception of the subparagraphs, of Article 69 (1); |
| 3. | An amount to be deducted under Article 69 (2) in cases of gift tax; |
| 4. | An amount regarding which an application for payment in annual installments is filed under Article 71; |
| 5. | An amount regarding which an application for deferred payment is filed under Article 72-2; |
| 6. | An amount regarding which an application for payment in kind is filed under Article 73. |
| (2) | Where the amount payable under paragraph (1) exceeds 10 million won, part of such amount may be paid in installments within two months after the payment deadline expires, as prescribed by Presidential Decree: Provided, That this shall not apply where payment in annual installments is permitted under Article 71. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 71 (Payment in Annual Installments) |
| (1) | Where the amount of inheritance tax or gift tax exceeds 20 million won, the head of the tax office having jurisdiction over the place of tax payment may permit the payment of such tax in annual installments upon an application by a taxpayer, as prescribed by Presidential Decree. In such cases, the taxpayer shall provide security, and where the taxpayer applies for permission for payment in annual installments by providing security stipulated in subparagraphs 1 through 4 of Article 18 (1) of the National Tax Collection Act, such taxpayer shall be deemed to have been permitted to pay in annual installments on the date of such application. <Amended on Dec. 11, 2020; Dec. 21, 2021> |
| (2) | The period for which payment in annual installments is made under paragraph (1) shall be a period applied for by the relevant taxpayer within the period classified in the following: Provided, That the period for which payment in annual installments is made shall be determined so that the amount of the tax to be paid in each installment exceeds 10 million won: <Amended on Dec. 15, 2015; Dec. 19, 2017; Dec. 31, 2019; Dec. 21, 2021; Dec. 31, 2022> |
| 1. | In cases of inheritance tax: the period for each item of inherited property classified in the following: |
| (a) | In cases of inherited property prescribed by Presidential Decree (including property prescribed by Presidential Decree, such as property directly used for a private kindergarten as defined in subparagraph 3 of Article 7 of the Early Childhood Education Act: hereafter in this Article the same applies) where an heir has received a deduction for succession to farming under Article 18-2 or has succeeded to a small and medium enterprise or middle-standing enterprise satisfying the requirements prescribed by Presidential Decree: 20 years from the date on which permission to pay inheritance tax in annual installments is granted or 10 years from the 10th anniversary of the date on which permission to pay inheritance tax in annual installments is granted; |
| (b) | In cases of other inherited properties: 10 years from the date on which permission to pay inheritance tax in annual installments is granted; |
| 2. | In cases of gift tax: Five years from the date on which permission to pay inheritance tax in annual installments is granted. |
| (3) | For purposes of paragraph (2), the method of calculating the amount of annual installment payments shall be prescribed by Presidential Decree. |
| (4) | Where a taxpayer who has obtained permission for payment in annual installments under paragraph (1) falls under any of the following subparagraphs, the head of a tax office having jurisdiction over the place of tax payment may revoke or modify permission for payment in annual installments, as prescribed by Presidential Decree, and accordingly collect all or part of the amount related to payment in annual installments: <Amended on Dec. 15, 2015; Dec. 19, 2017; Dec. 31, 2019; Jun. 9, 2020; Dec. 22, 2020> |
| 1. | Where the taxpayer fails to pay the amount of tax to be paid in annual installments by the designated deadline for payment (referring to the scheduled payment date of tax to be paid in annual installments where he or she is deemed to have been permitted under the latter part of paragraph (1)); |
| 2. | Where the taxpayer changes security or fails to comply with an order issued by the head of the competent tax office that is necessary for the preservation of security; |
| 3. | Where the taxpayer falls under any subparagraph of Article 9 (1) of the National Tax Collection Act, and thus it is deemed that the entire amount of tax related to the payment in annual installments cannot be collected by the deadline for payment in annual installments; |
| 4. | Where the taxpayer falls under grounds prescribed by Presidential Decree, such as where that taxpayer closes down the business he or she succeeded to or does not engage in such business any longer; |
| 5. | Cases prescribed by Presidential Decree, such as property prescribed by Presidential Decree, such as property directly used for a private kindergarten as defined in subparagraph 3 of Article 7 of the Early Childhood Education Act, is not used directly for the relevant business. |
| (5) | Where the head of the tax office having jurisdiction over the place of tax payment either grants permission for payment in annual installments pursuant to paragraph (1) (excluding cases where the taxpayer is deemed to have been permitted under the latter part of paragraph (1)), or cancels permission for payment in annual installments pursuant to paragraph (4), he or she shall notify the taxpayer of such fact. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 72 (Additional Dues on Payment in Annual Installments) |
A person granted permission for payment in annual installments under Article 71 shall pay any of the following amounts in addition to the amount of tax to be paid in each installment: <Amended on Dec. 22, 2020> | 1. | With respect to the first tax installment, an amount calculated by multiplying the rate prescribed by Presidential Decree by the number of days until the deadline for payment of the tax installments in question, beginning on the day immediately after the filing deadline under Articles 67 and 68 or the deadline for payment specified in the tax payment notice, and then the sum shall be multiplied by the total amount of tax for which payment in annual installments is permitted; |
| 2. | With respect to tax installments, other than that under subparagraph 1, an amount calculated by multiplying the rate prescribed by Presidential Decree by the number of days until the deadline for payment of the relevant tax installment from the following day of the deadline for payment of the immediately preceding tax installment, and then the sum shall be multiplied by the balance derived by deducting the total amount of the tax installments paid up to the immediately preceding tax installment, from the total amount of tax for which payment in annual installments is permitted. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 72-2 (Deferred Payment of Inheritance Tax on Succession to Family Business) |
| (1) | Where a taxpayer who satisfies all of the following requirements applies for deferred payment of inheritance tax, the head of the tax office having jurisdiction over the place of tax payment may permit the deferred payment of an amount prescribed by Presidential Decree: |
| 1. | That an heir shall have succeeded to a family business as provided in Article 18-2 (1) (limited to small and medium enterprises); |
| 2. | That the heir shall have not received a deduction for succession to a family business. In such cases, where the heir has received a deduction for succession to faming in lieu of a deduction for succession to a family business under Article 18-4, such heir is deemed to have received a deduction for succession to a family business. |
| (2) | A taxpayer who intends to obtain permission for deferred payment under paragraph (1) shall provide security. |
| (3) | Where an heir falls under any of the following cases without good cause prescribed by Presidential Decree, the head of the tax office having jurisdiction over the place of tax payment shall revoke or modify permission granted under paragraph (1), and collect an amount specified in the relevant subparagraph and an amount corresponding to interest calculated as prescribed by Presidential Decree: |
| 1. | Where the heir has succeeded to a family business subject to the Income Tax Act and disposes of at least 40/100 of the property for such family business: An amount calculated as prescribed by Presidential Decree in consideration of the ratio of disposal out of the deferred tax; |
| 2. | Where the heir ceases to engage in the family business: A full amount of the deferred tax; |
| 3. | Where the equity of the heir who has inherited stocks, etc. has decreased: The following relevant amount: |
| (a) | Where decreased within five years from the date of commencement of inheritance: A full amount of the deferred tax; |
| (b) | Where decreased five years after the date of commencement of inheritance: An amount calculated as prescribed by Presidential Decree in consideration of the ratio of decrease in equity out of the deferred tax; |
| 4. | Where the heir falls under any item of Article 18-2 (5) 4 (in which cases “90/100” referred to in items (a) and (b) of that subparagraph is deemed “70/100”): A full amount of the deferred tax; |
| 5. | Where inheritance commences upon the death of the heir: A full amount of the deferred tax. |
| (4) | Where an heir who has obtained permission for deferred payment under paragraph (1) falls under any subparagraph of paragraph (3), the heir shall file a report with the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, and pay inheritance tax and an amount corresponding to interest to the tax office having jurisdiction over the place of tax payment, the Bank of Korea, or the post office within six months from the last day of the month in which the relevant date falls: Provided, That this does not apply where the inheritance tax and an amount corresponding to interest has been already collected under paragraph (3) |
| (5) | Where a person who has obtained permission for deferred payment under paragraph (1) falls any of the following, the head of the tax office having jurisdiction over the place of tax payment may revoke or modify the permission, and may collect a portion or all of the deferred tax and an amount corresponding to interest calculated as prescribed by Presidential Decree: |
| 1. | Where the person fails to comply with an order given by the head of the tax office having jurisdiction over the place of tax payment as necessary to change security or replenish security; |
| (6) | A person liable to pay deferred tax and an amount corresponding to interest under paragraph (3) 3 or 5 (including where that provisions apply mutatis mutandis under paragraph (7)) may apply for permission for deferred payment of such tax and amount corresponding to interest to the head of the tax office having jurisdiction over the place of tax payment, notwithstanding paragraphs (3) and (4), if any of the following is applicable: |
| 2. | Where the person falls under paragraph (3) 5 and an heir who newly succeeded to a family business has received a deduction for such family business or has obtained permission for deferred payment under paragraph (1). |
| (7) | Paragraph (2) through (5) (excluding paragraph (3) 4) apply mutatis mutandis to deferred payment under paragraph (6). In such cases, the “full amount of the deferred tax” in paragraph (3) 3 (a) is deemed to be an “amount calculated as prescribed by Presidential Decree in consideration of the ratio of decrease in share out of the deferred tax”, and where the person has obtained permission for deferred payment under paragraph (6) 1, an “heir” is deemed to be a “donee”, “inherited” to be “donated”, and the “date of commencement of inheritance” to be the “date of donation” in paragraphs (3) through (5). |
| (8) | For purposes of paragraphs (1) through (7), procedures for applying for deferred payment, matters about provision of security, matters concerning whether to impose a late-payment penalty in relation to the time when permission for deferred payment is granted, methods for determining whether an heir engages in family business, and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 31, 2022]
| Article 73 (Payment in Kind) |
| (1) | The head of a tax office having jurisdiction over the place of tax payment may permit payment in kind upon a request by a person under an obligation to pay tax, as prescribed by Presidential Decree, where all of the following requirements are met: Provided, That the head of a tax office having jurisdiction over the place for tax need not permit payment in kind if management and disposal of the property for which an application for payment in kind has been filed are deemed inappropriate. <Amended on May 28, 2013; Jan. 1, 2014; Dec. 15, 2015; Dec. 19, 2017; Dec. 31, 2019> |
| 1. | That the value of real estate and securities (limited to property that can be appropriated for payment in kind prescribed by Presidential Decree, such as real estate located in Korea, etc.) among inherited property (including donated property which an heir and a legatee has received among donated property that is added to inherited property pursuant to Article 13) shall exceed 1/2 of the value of the inherited property; |
| 2. | That the amount of inheritance tax due shall exceed 20 million won; |
| 3. | That the amount of inheritance tax due shall exceed the value (excluding the value of donated property added to inherited property under Article 13) of financial properties prescribed by Presidential Decree among the value of inherited property. |
| (2) | The scope of properties appropriable for payment in kind, cases where management and disposal are deemed inappropriate, and other matters necessary for procedures of payment in kind and application for payment in kind shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2011> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 73-2 (Payment in Kind with Cultural Heritage) |
| (1) | A taxpayer may apply for payment in kind with cultural heritage to the head of the tax office having jurisdiction over the place of tax payment if the property the taxpayer inherited include a cultural heritage or work of art prescribed by Presidential Decree (hereafter in this Article referred to as “cultural heritage, etc.”) and the taxpayer satisfies all of the following requirements: <Amended on Aug. 8, 2023> |
| 1. | That the amount of inheritance tax payable shall exceed 20 million won; |
| 2. | That the amount of inheritance tax payable shall exceed the value (excluding the value of donated property added to inherited property under Article 13) of financial assets prescribed by Presidential Decree among the value of inherited property. |
| (2) | Where an application for payment in kind is filed under paragraph (1), the head of the tax office having jurisdiction over the place of tax payment shall notify the Minister of Culture, Sports and Tourism of the details of the application for payment in kind, as prescribed by Presidential Decree. |
| (3) | Where payment in kind is deemed necessary as the cultural heritage, etc. applied for payment in kind has historic, academic, or artistic value or for other reasons, the Minister of Culture, Sports, and Tourism shall request the payment in kind with such cultural heritage, etc. to the head of the tax office having jurisdiction over the place of tax payment in accordance with the procedures prescribed by Presidential Decree. <Amended on Aug. 8, 2023> |
| (4) | Upon receipt of a request under paragraph (3), the head of the tax office having jurisdiction over the place of tax payment shall permit payment in kind if he or she deems that the relevant cultural heritage, etc. has little risk of causing a loss to the National Funds in accordance with the procedures prescribed by Presidential Decree. <Amended on Aug. 8, 2023> |
| (5) | An amount of tax payable regarding which an application for payment in kind can be applied under paragraph (1) shall not exceed an amount of inheritance tax payable on the value of cultural heritage, etc. appropriated for payment in kind among inherited properties. <Amended on Aug. 8, 2023> |
| (6) | Other matters necessary for applying for payment in kind and procedures for permission shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 21, 2021]
[Title Amended on Aug. 8, 2023]
| Article 74 (Deferred Collection of Inheritance Tax on Designated Cultural Heritage) |
| (1) | Where inherited property includes any of the following, the head of the tax office having jurisdiction over the place of tax payment shall defer the collection of the amount of inheritance tax on the value of such inherited property that is to be imposed, as calculated under Presidential Decree: <Amended on Feb. 4, 2010; Dec. 24, 2018; Nov. 26, 2019; Dec. 31, 2022; Mar. 21, 2023> |
| 2. | Among museum objects or art gallery objects (hereafter in this Article referred to as "museum object, etc.") registered under the Museum and Art Gallery Support Act, property being exhibited or preserved in a museum or an art gallery (referring to those qualified as public-interest corporations, etc. in cases of private museums or private art galleries) under that Act; |
| 3. | State-designated cultural heritages and Si or Do-designated cultural heritages under the Cultural Heritage Protection Act, and land prescribed by Presidential Decree (hereafter in this Article referred to as “State-designated cultural heritage, etc.”), being land in any protection zone designated under that Act; |
| 4. | Natural monuments, scenic spots, and Si or Do natural heritages designed under the Act on Preservation and Utilization of Natural Heritage, and land prescribed by Presidential Decree (hereafter in this Article referred to as “natural monument, etc.”), being land in any protection zone designated under that Act. |
| (2) | Where an heir or a legatee to whom a cultural heritage resource, etc., a museum object, etc. State-registered cultural heritage, etc., or a natural monument, etc. has been inherited either transfers such property for consideration or withdraws the museum object, etc. for any reason prescribed by Presidential Decree, the head of the tax office having jurisdiction over the place of tax payment shall immediately collect inheritance tax, the collection of which is deferred. <Amended on Dec. 31, 2022; Mar. 21, 2023; Aug. 8, 2023> |
| (3) | Where inheritance takes place again due to the death of the heir or legatee who owns a cultural heritage resource, etc., a museum object, etc. State-registered cultural heritage, etc., or a natural monument, etc. during the period for which collection is deferred under paragraph (1), the head of the tax office having jurisdiction over the place of tax payment shall cancel a decision to impose the amount of inheritance tax, the collection of which has been deferred, and shall not re-impose the cancelled amount of inheritance tax. <Amended on Dec. 31, 2022; Mar. 21, 2023; Aug. 8, 2023> |
| (4) | A person who intends to obtain permission for deferred collection under paragraph (1) shall provide security corresponding to such deferred amount of inheritance tax. In such cases, Article 71 shall apply mutatis mutandis to the provision of security. |
| (5) | Notwithstanding paragraph (4), a person who intends to obtain permission for deferred collection of inheritance tax on State-designated cultural heritage, etc. referred to in paragraph (1) 3 or a natural monument, etc. referred to in subparagraph 4 of that paragraph need not provide security corresponding to such deferred amount of inheritance tax. <Newly Inserted on Dec. 31, 2022; Mar. 21, 2023; Aug. 8, 2023> |
| (6) | A person who need not provide security under paragraph (5) shall submit a holding status statement of State-designated cultural heritage, etc. or natural monument, etc. to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, by the end of each year, and the head of the tax office having jurisdiction over the place of tax payment shall inspect whether the holding status is appropriate. <Newly Inserted on Dec. 31, 2022; Mar. 21, 2023; Aug. 8, 2023> |
| (7) | Where a person who need not provide security under paragraph (5) transfers State-designated cultural heritage, etc. or natural monument, etc. for consideration shall report such transfer to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, seven days prior to the date of such transfer. <Newly Inserted on Dec. 31, 2022; Mar. 21, 2023; Aug. 8, 2023> |
| (8) | For purposes of paragraph (1), cases where an heir exhibits or preserves museum objects or art gallery objects, among inherited property at a museum or an art gallery under the Museum and Art Gallery Support Act, as prescribed by Presidential Decree by the filing deadline specified in Article 67 (where a museum or art gallery is established and any inevitable ground exists, it means six months from the last day of the month during which such reason ceases to exist.). <Amended on Dec. 31, 2022> |
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 31, 2022; Aug. 8, 2023]
| Article 75 (Provisions to be Applied Mutatis Mutandis) |
Article 74 (1) (excluding subparagraphs 1, 3, and 4) and paragraphs (2) through (4) of that Article shall apply mutatis mutandis to the deferment of collection of gift tax on museum objects, etc. In such cases, in Article 74 (1), the term "inherited property" shall be construed as "donated property", the term "amount of inheritance tax" as "amount of gift tax", and in paragraph (2) of that Article, the term "heir or legatee who has received inheritance" shall be construed as "donee", the term "inheritance tax" as "gift tax", and in paragraph (3) of that Article, the term "heir or legatee" shall be construed as "donee", the term "where inheritance recommences" as "where inheritance commences", and in paragraphs (3) and (4) of that Article, the term "amount of inheritance tax" shall be construed as "amount of gift tax", respectively. <Amended on Dec. 31, 2022; Mar. 21, 2023> [This Article Wholly Amended on Jan. 1, 2010]
CHAPTER VI DETERMINATION AND CORRECTION
| Article 76 (Determination and Correction) |
| (1) | The head of the competent tax office, etc. shall determine the tax base and amount of tax based on a report filed pursuant to Article 67 or 68: Provided, That if a taxpayer fails to file a report, or an omission or error exists in the reported tax base or amount of tax, the head of the competent tax office, etc. shall determine the tax base and amount of tax after conducting an investigation thereon. |
| (2) | Where a ground falling under any of the subparagraphs of Article 9 (1) of the National Tax Collection Act exists, the head of the competent tax office, etc. may determine the tax base and the amount of tax at any time even before the reporting deadline under Articles 67 and 68 expires, notwithstanding paragraph (1). <Amended on Dec. 22, 2020> |
| (3) | The head of the competent tax office, etc. shall determine the tax base and the amount of tax within a period (hereinafter referred to as a "statutory deadline for determination") prescribed by Presidential Decree from the date on which he or she has received a report under paragraph (1): Provided, That where the head of the competent tax office, etc. is unable to make a determination within that period due to any extenuating circumstance, such as taking a long time to conduct an investigation of the inherited or donated property, an assessment of its value, etc., he or she shall notify the heir, legatee, or donee of such circumstance. |
| (4) | Where the head of the competent tax office, etc. is either unable to determine the tax base or amount of tax pursuant to paragraph (1) or (2), or discovers an omission or error in the determined tax base or amount of tax, he or she shall promptly investigate such tax base and amount of tax and make a determination or correction. |
| (5) | Where the value of the inherited property determined pursuant to paragraph (1) or (2) is not less than three billion won in applying paragraph (4), and the value of real estate, stocks, or other primary property prescribed by Presidential Decree that are retained by the heir significantly increases compared to that as at the time of commencement of inheritance within a period prescribed by Presidential Decree after the commencement of inheritance, the head of the competent tax office, etc. shall investigate as to whether any omission or error exists in the determined tax base and the amount of tax, as prescribed by Presidential Decree: Provided, That this shall not apply where the heir has proven the source of the funds for the increased property, as prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 77 (Notification of Determined Tax Base and Amount) |
As prescribed by Presidential Decree, the head of a tax office, etc. shall notify an heir, legatee, or donee of tax base and the amount of tax determined pursuant to Article 76. In such cases, if two or more heirs or legatees exist, the head of a tax office, etc. shall notify all of the heirs or legatees. <Amended on Dec. 15, 2015> [This Article Wholly Amended on Jan. 1, 2010]
| Article 78 (Additional Tax) |
| (1) | Deleted. <Dec. 30, 2006> |
| (2) | Deleted. <Dec. 30, 2006> |
| (3) | Where a public-interest corporation, etc. fails to submit a report required under Article 48 (5), or the details of the report submitted are unclear as prescribed by Presidential Decree, the head of the competent tax office, etc. shall collect an amount corresponding to 1/100 of the amount of inheritance tax or gift tax to be imposed on the portion that a report is not submitted or the reported details are unclear. <Amended on Jan. 1, 2010> |
| (4) | Where a public-interest corporation, etc. continues possessing stocks, etc. in excess of the upper limits of holding stocks, etc. prescribed in Article 49 (1) even after the deadline stipulated under each subparagraph of that paragraph expires, the head of the competent tax office, etc. shall impose an amount corresponding to 5/100 of the current market value of shares with voting rights or equity stakes (hereafter in this paragraph and paragraph (7) referred to as "stocks, etc.") in excess of the upper limits of holding stocks, etc. as of the last day of the deadline stipulated in each subparagraph of that paragraph (in cases of a public-interest corporation, etc, governed by the proviso, with the exception of the subparagraphs, of Article 49 (1) as of the last day of the taxable period of income tax or business year of corporate tax during which the public-interest corporation, etc. fails to meet the standards under the same proviso), as of the last day of each year, in addition to an amount of tax payable by such public-interest corporation, etc., as prescribed by Presidential Decree. In such cases, the period for imposition of additional tax shall not exceed 10 years. <Amended on Jan. 1, 2010; Dec. 20, 2016> |
| (5) | Where a public-interest corporation, etc. falls under any of the following, the head of the competent tax office, etc. shall collect an amount calculated (if, in cases falling under subparagraph 1, the amount calculated is less than one million won, it shall be deemed one million won) by multiplying 7/10,000 by the aggregate of the amount of income in the taxable period of income tax or the business year of corporate tax prescribed by Presidential Decree and the value of the property received through contribution during the relevant taxable period or the business year as the inheritance tax or gift tax: Provided That this shall not apply in cases prescribed by Presidential Decree, based on the characteristics of the public-interest corporation, etc., the scale of the property received through contribution, and the operational performance, etc. of public-interest projects: <Amended on Jan. 1, 2010; Jan. 1, 2014; Dec. 20, 2016; Dec. 31, 2022> |
| 1. | Where it fails to perform its reporting duty, etc. on tax verification by outside experts pursuant to Article 50 (1) and (2); |
| 2. | Where it fails to perform its duty to prepare and keep books and records pursuant to Article 51; |
| 3. | Where it fails to undergo an audit pursuant to Article 50 (3) or (4) (including where it has undergone an audit conducted by any auditor other than the auditors designated under Article 50 (4). |
| (6) | Where directors, or executives and employees exist in excess of the number of directors stipulated under Article 48 (8), the head of the competent tax office, etc. shall impose the full amount corresponding to direct expenses and indirect expenses prescribed by Presidential Decree that are incurred in connection with such persons, in addition to the amount of tax payable by the public-interest corporation, etc. each year, as prescribed by Presidential Decree. <Amended on Jan. 1, 2010> |
| (7) | Where a public-interest corporation, etc. holds the stocks, etc. in excess of the upper limits of holding stocks, etc. of a domestic corporation prescribed in Article 48 (9), the head of the competent tax office, etc. shall impose an amount corresponding to 5/100 of the current market value of the stocks, etc. excessively held by the public-interest corporation, etc. as at the end of each business year, in addition to the amount of tax payable by such public-interest corporation, etc., as prescribed by Presidential Decree. <Amended on Jan. 1, 2010> |
| (8) | Where a public-interest corporation, etc. advertises or publicizes pursuant to Article 48 (10), the head of the competent tax office, etc. shall impose an amount corresponding to expenses directly incurred in connection with such acts, in addition to the amount of tax payable by the public-interest corporation, etc., as prescribed by Presidential Decree. <Amended on Jan. 1, 2010> |
| (9) | Where a public-interest corporation, etc. falls under any of the following, the head of the competent tax office, etc. shall impose an amount corresponding to 10/100 of the amount classified as follows, in addition to the amount of tax payable by the public-interest corporation, etc., as prescribed by Presidential Decree: <Amended on Jan. 1, 2010; Dec. 20, 2016> |
| 1. | Where the public-interest corporation, etc. fails to use operating income less than the base amount prescribed by Presidential Decree pursuant to Article 48 (2) 5: |
| 2. | Where the public-interest corporation, etc. fails to use the proceeds from the sale less than the base amount prescribed by Presidential Decree pursuant to Article 48 (2) 5: Unused amount among the proceeds from the sale; |
| 3. | Where the public-interest corporation, etc. falls under Article 48 (2) 7: Amount calculated by subtracting the amount directly used for public-interest project from the base amount. |
| (10) | Where a public-interest corporation, etc. falls under any of the following subparagraphs, the head of the competent tax office, etc. shall impose the amount in the relevant subparagraph, in addition to the amount of tax payable by the public-interest corporation, etc., as prescribed by Presidential Decree: <Amended on Jan. 1, 2010; Dec. 21, 2021> |
| 1. | Where a public-interest corporation, etc. fails to use an exclusive account in cases falling under any subparagraph of Article 50-2 (1): Amount corresponding to 5/1,000 of the amount that has not occupied an exclusive account; |
| 2. | Where a public-interest corporation, etc. fails to open or report an exclusive account prescribed in Article 50-2 (3): Whichever is the larger of the following items: |
| (a) | An amount calculated in accordance with the following formula; |
Amount corresponding to 5/1,000 of the total amount of revenue relating to a direct public-interest project of each taxable period or business year during which an exclusive account has not been opened or reported;
A x B/C x 5/1,000
A: The total amount of income related to a direct public-interest project during each taxable period or business year;
B: The period for which the public-interest corporation, etc. does not open or report an exclusive account during each taxable period or business year, expressed as the number of days from the following day of the reporting deadline to the day before that on which a report is made
C: The number of days during each taxable period or business year
| (b) | Amount corresponding to 5/1,000 of the total amount of transactions conducted under the subparagraphs of Article 50-2 (1). |
| (11) | Where a public-interest corporation, etc. fails to comply with a request by the Commissioner of the National Tax Service for providing public notice or making a correction by the specified deadline under Article 50-3 (2) as the public-interest corporation, etc. fails to provide public notice on the closing documents, etc. pursuant to Article 50-3, or erroneous information is included in the details of the public notice, the head of the competent tax office, etc. shall impose an amount corresponding to 5/1,000 of the total assets of the public-interest corporation, etc. as at the last day of the taxable period or business year subject to public notice, in addition to the amount of tax payable by such public-interest corporation, etc., as prescribed by Presidential Decree: Provided, That an additional tax under the provisions, with the exception of the subparagraphs of Article 50-3 (1) shall not be imposed with respect to any public notice on the closing documents, etc. for any taxable period or business year that began before Dec. 31, 2022. <Amended on Jan. 1, 2010; Dec. 31, 2019; Dec. 31, 2022> |
| (12) | Where a person obligated to submit payment statements, etc. prescribed in Article 82 (1), (3), (4), or (6) fails to do so or submits them with omissions, or unclear matters prescribed by Presidential Decree are included in the submitted payment statements, etc., the head of the competent tax office, etc. shall collect an amount corresponding to 2/1,000 (2/10,000 in cases falling under Article 82 (3) and (4)) of the amount corresponding to those that are not submitted, omitted or unclear, in addition to income tax or corporate tax. In such cases, the additional tax shall be collected even if no amount of tax is calculated. <Amended on Jan. 1, 2010; Dec. 27, 2010> |
| (13) | Where payment statements, etc. are submitted within one month after the deadline for submission has expired in applying paragraph (12), an amount corresponding to 1/1,000 (1/10,000 in cases falling under Article 82 (3) and (4)) shall be collected, in addition to income tax or corporate tax. In such cases, the additional tax shall be collected even if no amount of tax is calculated. <Amended on Jan. 1, 2010; Dec. 27, 2010> |
| (14) | Where a public-interest corporation, etc. fails to report as required under Article 48 (13), the head of the competent tax office, etc. shall impose an amount corresponding to 5/1,000 of the total amount of its assets as of the last day of the taxable period or business year subject to reporting, being an amount prescribed by Presidential Decree, in addition to the tax payable by that public-interest corporation, etc. <Newly Inserted on Dec. 22, 2020> |
| (15) | Where a person who need not provide security for tax payment under Article 74 (5) falls under any of the following, the head of the competent tax office, etc. shall collect an amount referred to in each subparagraph from that person: <Newly Inserted on Dec. 31, 2022; Aug. 8, 2023> |
| 1. | An amount corresponding to 1/100 of the amount of inheritance tax, the collection of which is deferred where the person fails to submit a holding status statement of State-designated cultural heritage, etc. or natural monument, etc. as required under Article 74 (6); |
| 2. | An amount corresponding to 20/100 of the amount of inheritance tax, the collection of which is deferred where the person fails to report the transfer of State-designated cultural heritage, etc. or natural monument, etc. as required under Article 74 (7). |
| Article 79 (Special Cases concerning Request for Correction) |
| (1) | Where any of the following cases occurs in respect of a person who has filed inheritance tax base return and tax amount under Article 67, or a person who has received a determination or collection of the tax base of inherited property and the amount of inheritance tax under Article 76, such person may request a determination or correction within six months from the date on which such case occurs, as prescribed by Presidential Decree: |
| 1. | Where the value of property inherited to each heir is changed as of the date of commencement of inheritance due to any ground prescribed by Presidential Decree, such as a lawsuit. to request the recovery of inheritance with respect to the inherited property; |
| 2. | Where the value of the inherited property significantly decreases by the date on which one year has elapsed since the commencement of inheritance due to any ground prescribed by Presidential Decree, such as expropriation of the inherited property. |
| (2) | In any of the following cases, a request for determination or correction may be made within three months from the date on which the relevant reason occurs, as prescribed by Presidential Decree: <Amended on Dec. 20, 2016> |
| 1. | Where a person, on whom gift tax prescribed in Article 37 has been determined or corrected, inherits or receives the donation of the relevant real estate from the real estate owner during the gratuitous use period of real estate prescribed by Presidential Decree, or no longer gratuitously uses the relevant real estate due to any ground prescribed by Presidential Decree; |
| 2. | Where a person in whose case gift tax prescribed in Article 41-4 has been determined or corrected, inherits or receives the donation of the relevant money from the lender during the loan period prescribed in paragraph (2) of that Article, or is unable to borrow the relevant money without needing to repay it or at an interest rate lower than the reasonable interest rate for any grounds prescribed by Presidential Decree; |
| 3. | Where a person, in whose case gift tax prescribed in Article 42 has been determined or corrected because he or she borrowed money, etc. using other's property without compensation as collateral, inherits or receives the donation of the relevant property from the provider of the property during the period of use of the property prescribed in paragraph (2) of that Article, or is unable to borrow the relevant money without needing to repay it or at an interest rate lower than the reasonable interest rate for any grounds prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 1, 2010]
CHAPTER VII SUPPLEMENTARY PROVISIONS
| Article 80 (Provision of Data) |
| (1) | For the imposition and collection of inheritance tax and gift tax, the Commissioner of the National Tax Service may request the chief of the office of court administration to furnish computerized information data on registration matters concerning family relationship prescribed in Article 9 of the Act on Registration, etc. of Family Relations. In such cases, the chief of the office of court administration who has received such request shall actively comply with it unless there is a compelling reason not to do so. |
| (2) | The Minister of the Interior and Safety, the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Do Governor, a Special Self-Governing Province Governor, or a Special Self-Governing City Mayor shall furnish data concerning land, buildings and houses subject to the imposition of property tax to the Commissioner of the National Tax Service each year, as prescribed by Presidential Decree. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Dec. 21, 2021> |
[This Article Wholly Amended on Dec. 27, 2010]
| Article 81 Deleted. <Dec. 31, 2007> |
| Article 82 (Submission of Payment Statements) |
| (1) | Any of the following persons living in the Republic of Korea shall submit payment statements or details on the modification of titles to the head of the competent tax office, as prescribed by Presidential Decree: <Amended on Jan. 1, 2014> |
| 1. | A person who pays insurance proceeds (including surrender value and early withdrawal) or deals with modification of title of a life or non-life insurance policy stipulated under Articles 8 and 34; |
| 2. | A person who pays retirement grants, allowances, merit pay, or others (excluding pensions) similar thereto stipulated under Article 10. |
| (2) | A person equipped with computer processing facilities among those referred to in paragraph (1) 1 shall submit payment statements via an information and communications network as defined in subparagraph 18 of Article 2 of the Framework Act on National Taxes or in electronic information storage devices, such as diskettes, as prescribed by Presidential Decree. <Amended on Jan. 1, 2014; Dec. 31, 2019> |
| (3) | The following persons shall submit the details of the transfer or change of title to the head of the competent tax office, as prescribed by Presidential Decree: <Amended on Dec. 22, 2020> |
| 1. | A person (including a person entrusted with duties to verify the transfer or change of title by the State or a local government, and a person engaging in investment trading business referred to in Article 6 (1) 1 of the Financial Investment Services and Capital Markets Act or investment brokerage business referred to in subparagraph 2 of that paragraph) who deals with the transfer or change of titles to the any of the following; |
| (f) | Titles, etc. to use specified establishments; |
| (4) | A person who deals with trust business shall submit a detailed statement on any trust, the trustor of which is different from its beneficiary, among the trusted property, to the head of the competent tax office, as prescribed by Presidential Decree. |
| (6) | A corporation that issues convertible bonds, etc. stipulated under Article 40 (1) (excluding a listed-stock corporation prescribed by the Financial Investment Services and Capital Markets Act that issues convertible bonds, etc. through public offering of securities pursuant to Article 9 (7) of that Act, but including an underwriter under that Act) shall submit details on the issuance of the relevant convertible bonds, etc. and on their underwriters to the head of the competent tax office, as prescribed by Presidential Decree. |
| (7) | A financial investment business entity as defined in Article 8 (1) of the Financial Investment Services and Capital Markets Act shall submit a transfer statement to the head of the competent tax office, as prescribed by Presidential Decree, if stocks, etc. are transferred between securities accounts managed by the financial investment business entity (excluding transfer of stocks, etc. through conveyance). <Newly Inserted on Dec. 21, 2021> |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 83 (General Inquiry about Financial Property) |
| (1) | When the head of the competent tax office, etc. conducts an investigation in order to determine or correct inheritance tax or gift tax pursuant to Article 76, the Commissioner of the National Tax Service (including the Commissioner of the Regional Tax Office; hereafter in this Article the same applies) may request the heads of financial companies, etc. to inquire en bloc about taxation data on any of the following financial property, notwithstanding Article 4 of the Act on Real Name Financial Transactions and Confidentiality: <Amended on Jul. 14, 2011; Jan. 1, 2013; Dec. 15, 2015> |
| 1. | A person suspected of evading inheritance tax or gift tax in light of his or her occupation, age, property state, status of income return, etc.; |
| 2. | An heir/decedent or donor/donee subject to the application of Article 85 (1) (hereafter in this Article referred to as "decedent, etc."). |
| (2) | The head of a financial company, etc., in receipt of a request for inquiry about financial property under paragraph (1), shall promptly submit the requested taxation data to the Commissioner of the National Tax Service. <Amended on Jul. 14, 2011> |
| (3) | When the Commissioner of the National Tax Service makes an inquiry about the taxation data to the head of a financial company, etc. pursuant to paragraph (1), he or she shall do so in writing stating the following matters: <Amended on Jul. 14, 2011> |
| 1. | Personal details of the decedent, etc.; |
| 3. | Details of data requested, etc. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 84 (Questioning and Investigation) |
A public official engaged in tax affairs may ask questions to any of the following persons or may investigate or order the submission of, relevant books, documents or other things if necessary to conduct an investigation and duties in connection with inheritance tax or gift tax. In such cases, the public official engaged in tax affairs shall not abuse his or her authority for any other purpose beyond the scope necessary to perform his or her duties when asking questions, conducting an investigation, or ordering the submission of, the books, documents or other things. <Amended on Dec. 31, 2018; Jun. 9, 2020>:
| 1. | A taxpayer or a person deemed to have a tax liability; |
| 2. | An decedent, or a person either deemed to have given or received property to/from a person under subparagraph 1, or deemed to have a right to receive or give such property; |
| 3. | A person liable to submit payment statements, etc., stipulated under Article 82. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 85 (Collection and Management of Taxation Data by Each Taxpayer) |
| (1) | For the purpose of efficiently carrying out the affairs of imposing and collecting inheritance tax or gift tax on/from persons prescribed by Presidential Decree, in consideration of the scale of their property, income levels, etc., the Commissioner of the National Tax Service shall annually manage taxation data submitted by taxpayers, etc. pursuant to tax laws, or property data, including real estate, financial property, etc. collected for taxation and collection purposes by each taxpayer through a computer system so that such data can be used for the aforesaid purposes. |
| (2) | The Commissioner of the National Tax Service shall neither use the taxation data of property collected and managed under paragraph (1) for purposes other than taxation, nor provide or divulge such data to any third party, and no person shall request the provision or use of taxation data of property under paragraph (1) to the Commissioner of the National Tax Service: Provided, That this shall not apply to any case falling under the subparagraphs of Article 81-13 (1) of the Framework Act on National Taxes. <Amended on Dec. 27, 2010> |
| (3) | The provision of and request for taxation data of property pursuant to the proviso of paragraph (2) shall be made to the extent that the essence of guaranteeing confidentiality for taxpayers is not harmed by clearly stating the specific purpose of such provision or request, and the provided taxation data of property shall be used only for the original purposes requested, and shall not be divulged to any third party. |
| (4) | A person who requests the taxation data of property to the Commissioner of the National Tax Service pursuant to the proviso of paragraph (2) shall do so in writing stating the following matters: |
| 1. | Personal details of the taxpayer, etc.; |
| 3. | Details of the requested taxation data of property. |
| (5) | Detailed matters necessary for the management and operation of the computer system for each taxpayer pertaining to the taxation data of property under paragraph (1) shall be prescribed by the Commissioner of the National Tax Service. |
[This Article Wholly Amended on Jan. 1, 2010]
| Article 86 (Prohibition on Imposition of Value-Added Tax) |
No local government or other public organization may impose value-added tax on inheritance tax or gift tax.
[This Article Wholly Amended on Jan. 1, 2010]
ADDENDA <Act No. 5193, Dec. 30, 1996>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1997.
Article 2 (General Applicability)
This Act shall begin to apply to succession which commences or property being donated, after this Act enters into force.
Article 3 (Applicability to Non-Taxation of Designated Cultural Heritage)
Among designated cultural heritage whose taxes were deferred from collection, pursuant to the previous provisions of Article 8-3 (1) 1, where, as at the time this Act enters into force, there is heritage which falls under one of the amended provisions of subparagraph 2 of Article 12, the head of tax office concerned shall revoke the impose decision on the amount of such inheritance taxes whose collection was deferred and the amount of such revoked inheritance taxes shall not again be imposed. Article 4 (Applicability to Post-Management of Public-Interest Corporation)
| (1) | The amended provisions of Articles 16 (1) and 48 (1) and (2) 1 through 3 and 5, and paragraph (3) of that Article shall begin to apply to the occurrence of the main taxable cause, with respect to property received, through contribution, pursuant to the previous provisions, as at the time this Act enters into force. |
| (2) | The amended provisions of Article 48 (2) 4 shall begin to apply to the sale of property received, through contribution, under the previous provisions, as at the time this Act enters into force. |
Article 5 (Applicability to Succession Deductions of Farmland, Grazing Land, and Forest Land)
As at the time this Act enters into force, should an inheritance deduction, pertaining to farmland, grazing land, forest land, etc., be received, pursuant to the provisions of the previous Article 11-3 (1) and (2), in case which falls under the provisions of the previous Article 11-3 (4), after the enforcement of this Act, inheritance tax shall be imposed, pursuant to the previous provisions. Article 6 (Applicability to Deductions of Gift Tax Amount Deducted from Tax Assessment)
The amended provisions of Articles 28 and 58 shall begin to apply to the inheritance tax or gift tax being determined after the enforcement of this Act. Article 7 (Applicability to Stocks under Assumed Names being Converted Back to Names of True Owners)
With respect to stocks, etc. either entered in the register of stockholders or in the register of members under the names of third parties, or entered with a change of holders at the time this Act enters into force, the amended provisions of Article 43 (1) 2 shall begin to apply to the stocks, etc. which is being converted back to the name of the true owner, after the enforcement of this Act. Article 8 (Applicability to Tax Verifications by outside Experts concerning Public-Interest Corporations)
| (1) | The amended provisions of Articles 50 and 51 shall begin to apply to the tax whose taxable period or fiscal year commences the earliest, after the enforcement of this Act. |
| (2) | A public-interest corporation, etc. incorporated prior to the enforcement of this Act shall receive an initial tax verification by outside experts with respect to the period up to the expiration date of the taxable period or the fiscal year within which falls the day previous to the date on which it becomes two years after the enforcement of this Act. |
| (3) | A public-interest corporation, etc. incorporated at the outset, after the enforcement of this Act, shall receive an initial tax verification by outside experts with respect to the period up to the expiration date of the taxable period or the fiscal year within which falls the date on which two years has elapsed from the incorporation date of the public-interest corporation, etc. concerned. |
Article 9 (Transitional Measures concerning Appraisals)
| (1) | The amended provisions of Article 61 (1) 1 being applicable with respect to property for which the succession commenced prior to December 31, 1990, the appraisal of the lands among such inherited property reported within the report deadline of the inheritance tax shall be based on the value appraised pursuant to one of the following subparagraphs, as of the date of commencement of succession: |
| 1. | Concerning specific regions, as determined by the Commissioner of the National Tax Service, the value appraised in accordance with a multiplication method, pursuant to the provisions of Article 9 (1) of the amendment to the Inheritance Tax Act of Act No. 4022; |
| 2. | With respect to regions besides those of subparagraph 1, the current base value used taxation prescribed by the Local Tax Act prior to it being amended to Act 4995. |
| (2) | Appraised values, prior to the enforcement of this Act, pertaining to properties having values appraised pursuant to the provisions of the previous Article 9 (2), shall be regarded as values appraised pursuant to the amended provisions of Article 61 (2), and appraisals, after the enforcement of this Act, pertaining to buildings assessed and publicly notified by the Commissioner of the National Tax Service, pursuant to the amended provisions of Article 61 (2), shall begin to apply to those buildings either being donated or unto which succession commences, after January 1, 1998. |
Article 10 (Applicability to Payment in Kind and Payment by Annual Installments)
The amended provisions of Articles 71 and 73 shall begin to apply to the tax for which payment in kind and payment by annual installments is applied. Article 11 (Applicability to Submissions of Payment Statements)
The amended provisions of Article 82 (1) through (4) shall begin to apply to payments to be made or such fact being handled after this Act enters into force. Article 12 (Applicability to General Inquiry into Financial Property)
The amended provisions of Article 83 shall begin to apply to the first inheritance tax being determined, after the enforcement of this Act. Article 13 (General Transitional Measures)
Prior to the enforcement of this Act, any inheritance taxes or gift taxes imposed or to be imposed with respect to successions which commenced or property donated shall be pursuant to the previous provisions.
Article 14 Omitted.
Article 15 (Relationship to Other Statutes and Regulations)
In case, at the time of the enforcement of this Act, the previous Inheritance Tax Act or a provision thereof has been cited in other statutes and regulations, and if, among this Act, there is a provision falling into such statutes and regulations, then the citation shall be regarded as having been of this Act or a provision falling into this Act, in place of the previous provisions.
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 13 Omitted.
Article 14 (Applicability to Amendment to Other Statutes)
ADDENDA <Act No. 5498, Jan. 8, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Act No. 5582, Dec. 28, 1998>
| (1) | (Enforcement Date) This Act shall enter into force on January 1, 1999. |
| (2) | (General Applicability) This Act shall apply to successions commencing or donations made on or after the enforcement date of this Act. |
| (3) | (Applicability on Notification of Data on Taxables of Aggregate Land Tax) The amended provisions of Article 80 (3) shall begin to apply to the aggregate land taxes imposed (including those which are subject to non-taxation, reduced or exempted, and not collectable because the amount is too small) on or after the enforcement date of this Act. |
| (4) | (Transitional Measures Following Extension of Total Period) In the imposition of the inheritance and gift taxes the duty for payment of which is established after the enforcement of this Act, the value of a donation for which the total period has not passed under the previous provisions of Articles 13 (1), 14 (1) 3, 47 (2), and 53 (1) shall, notwithstanding their amendments, be the total value of donations made prior to the enforcement of this Act calculated by applying the total period under the respective previous provisions concerned, and the value of the donation for which the total period has passed under the previous provisions of Articles 13 (1), 14 (1) 3, 47 (2), and 53 (1) shall not include the value of a donation made prior to the enforcement of this Act as prescribed by the amendments to those Articles. |
ADDENDA <Act No. 6048, Dec. 28, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2000: Provided, That the amended provisions of Article 78 (4) shall enter into force on the date its promulgation and the amended provisions of Article 61 (1) 2 shall enter into force on July 1, 2000. Article 2 (General Applicability)
This Act shall begin to apply to the portion of any inheritance or any donation made for the first time after the enforcement of this Act: Provided, That the amended provisions of Article 41-3 shall begin to apply to the portion of the stocks, etc. and convertible bonds, etc. acquired for the first time after the enforcement of this Act. Article 3 (Applicability to Additional Tax in Case of Excess Number of Directors of Public-Interest Corporation)
The amended provisions of Article 48 (8) through (10) and Article 78 (6) through (8) shall apply to the portion of the business year commencing for the first time after the enforcement of this Act. Article 4 (Applicability to Payment in Annual Installments and Payment in Kind)
The amended provisions of Articles 71 through 73 shall apply to the portion of any payment in annual installments and any payment in kind for which an application is filed for the first time after the enforcement of this Act. Article 5 (Transitional Measures concerning Tax Rates Change)
In imposing any inheritance tax and any gift tax that come into a tax payment liability after the enforcement of this Act, where the portion of a donation made prior to the enforcement of this Act is taxed by adding up in accordance with the provisions of Articles 13 and 47 and such added-up tax base exceeds 3 billion won, a tax amount to be calculated shall be calculated according to the classification falling under any of the following subparagraphs notwithstanding the amended provisions of Article 26: | 1. | An amount added up by an amount falling under any of the following items in case that the portion of any donation prior to the enforcement of this Act exceeds 3 billion won: |
| (a) | A tax amount calculated according to the previous provisions of Article 26 with respect to the portion of any donation made prior to the enforcement of this Act; |
| (b) | An amount calculated by multiplying a tax base corresponding to a property inherited or donated after the enforcement of this Act by 50/100; |
| 2. | An amount added up by the amount falling under any of the following items in case that the portion of a donation made prior to the enforcement of this Act falls short of 3 billion won: |
| (a) | With respect to the portion of any donation made prior to the enforcement of this Act, a tax amount calculated according the previous provisions of Article 26; |
| (b) | An amount calculated by deducting the amount of (a) from an amount calculated by applying the tax rates described in the provisions of Article 26 with 3 billion won taken as a tax base; |
| (c) | An amount calculated by multiplying the balance resulting from the deduction of 3 billion won from a tax base added up by the portion of a donation made prior to the enforcement of this Act by 50/100. |
Article 6 (Transitional Measures concerning Legal Fiction of Loan as Donation)
In applying the amended provisions of Articles 41 and 41-4, any person who receives financial loans, property and rendering of services, etc. as at the day that this Act is enforced shall be deemed to receive them anew on January 1, 2000. Article 7 (Transitional Measures concerning Possession Standard of Stocks)
| (1) | Where any public-interest corporation, etc. that holds the stocks, etc. in excess of the possession standard of the stocks, etc. in accordance with the amended provisions of Article 48 (1) and (2) 2 as at the day that this Act is enforced disposes of such excess stocks, etc. by December 31, 2001, the amended provisions of Article 78 (4) shall not apply thereto. |
| (2) | Where any public-interest corporation, etc. in which contributors and any specially related parties of such contributors hold office as directors in excess of 1/5 of the fixed number of directors in accordance with the amended provisions of Article 48 (8) as at the day that this Act is enforced reduces the excess number of directors corresponding to not less than 50/100 by December 31, 2000 and the remaining excess number of directors by December 31, 2001, the amended provisions of Article 78 (6) shall not apply thereto. |
| (3) | Where any public-interest corporation, etc. that holds the stocks, etc. in excess of the possession standard of the stocks, etc. for domestic corporations in accordance with the amended provisions of Article 48 (9) as at the day that this Act is enforced disposes of not less than 50/100 of such excess stocks, etc. by December 31, 2000 and the remaining stocks, etc. by December 31, 2001, the amended provisions of Article 78 (7) shall not apply thereto. |
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. 6301, Dec. 29, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2001: Provided, That the amendments to Articles 48 (2) 3, 4, 4-2 and 78 (9) shall enter into force on the date of its promulgation. Article 2 (General Applicability)
This Act shall begin to apply to the portion of inheritance first commenced or first gifted after the enforcement of this Act.
Article 3 (Applicability to Non-taxable Inherited Property)
The amendments to subparagraph 2 of Article 12 and Article 74 (1) 1 shall begin to apply to the portion of decision on the inheritance tax first done after the enforcement of this Act. Article 4 (Applicability to Permit for Excessive Possession of Stocks by Public-Interest Corporation)
| (1) | The amendments to Articles 16 (2), 48 (1) and (2) 2 shall begin to apply to the portion of decision on the inheritance tax or the gift tax first done after the enforcement of this Act. |
| (2) | The amendments to Articles 48 (2) 3, 4, 4-2 and 78 (9) shall begin to apply to the portion of business year within which falls the date of promulgation of this Act. |
Article 5 (Applicability to Profits from Conversion of Convertible Bonds into Stocks)
| (1) | The amended provisions of Article 40 (1) 2 shall begin to apply to the portion of first acceptance or acquisition of the convertible bonds, etc. after the enforcement of this Act. |
| (2) | The amended provisions of Article 82 (6) shall begin to apply to the portion of first issuance of the convertible bonds, etc. after the enforcement of this Act. |
Article 6 (Applicability to Payment in Installments and Annual Installments)
The amended provisions of Articles 70 (2) and 71 (2) 2 shall begin to apply to the portion of first application for the payment in installments and annual installments after the enforcement of this Act. Article 7 (Applicability to Application for Payment of Deposits by Heirs Who are Non-Residents)
The amended provisions of Article 81 (3) shall begin to apply to the portion of first application for payment of inherited property to the financial institution by the heirs, etc. who are non-residents after the enforcement of this Act.
ADDENDA <Act No. 6780, Dec. 18, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2003: Provided, That the amended provisions of Articles 16 (2) and (4), and 48 (2) and (4) shall enter into force on the date of its promulgation. Article 2 (General Applicability)
This Act shall begin to apply to the portion of inheritance first commenced or first gifted after the enforcement of this Act.
Article 3 (Applicability to Permit for Excessive Possession of Stocks by Public-Interest Corporation)
The amended provisions of Articles 16 (2) and (4), 48 (2) and (4) shall begin to apply to the portion of business year during which this Act is promulgated. Article 4 (Applicability to Legal Fiction of Insurance Money as Donation)
The amended provisions of Article 34 (1) shall begin to apply to the portion of paying the premiums with the money first donated after the enforcement of this Act. Article 5 (Applicability to Legal Fiction of Title Trust Property as Donation)
The amended provisions of Article 41-2 (1) and (2) shall begin to apply to the portion of ownership first acquired after the enforcement of this Act. Article 6 (Applicability to Legal Fiction of Profits from Listing of Stocks or Equity Shares as Donation)
The amended provisions of Articles 41-3 and 41-5 shall begin to apply to the portion of the stocks, etc. first donated or acquired with compensation after the enforcement of this Act. Article 7 (Applicability to Deferment of Collection of Cultural Heritage Data)
The amended provisions of Article 74 (1) through (3) shall begin to apply to the portion of application first filed after the enforcement of this Act. Article 8 (Applicability to Additional Tax)
The amended provisions of Article 78 (2) 2 shall begin to apply to the portion for which the deadline of payment first arrives after the enforcement of this Act. Article 9 (Transitional Measures concerning Title Trust Property)
With regard to the portion whose ownership has been acquired before the enforcement of this Act, and the change of holders under amended provisions of Article 41-2 (1) and (2) has not been made as of the date of enforcement of this Act, it shall be deemed to have acquired an ownership on the date of enforcement of this Act. Article 10 (Transitional Measures concerning Deduction of Property Donated by Spouse)
In case where the amount deducted under the previous provision for the portion of donation before the enforcement of this Act exceeds 300 million won, such excessive amount shall be deducted from the taxable amount of gift taxes, notwithstanding the amended provisions of Article 53 (1) 1. Article 11 (Applicability to Disputed Case against Assessment of Value of Inherited Property)
With regard to the dispositions to be made by applying the provisions of Article 9 (1) of the previous Inheritance Tax Act (referring to the Act prior to the amendment by Act No. 4805 on December 22, 1994), and those to have been made (limited to those against which any objection, request for examination, request for adjudication, or administrative litigation, has been instituted), the provisions of Article 9 (1) and (2) of the previous Inheritance Tax Act (referring to what has been Amended on 4805) shall be applicable.
ADDENDA <Act No. 7010, Dec. 30, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2004.
Article 2 (General Applicability)
This Act shall begin to apply to the portion of commencing inheritance or of donating after the enforcement of this Act.
Article 3 (Applicability to Donation of Insurance Money)
The amended provisions of Article 34 (1) shall begin to apply to the portion of paying the premiums with the assets donated after the enforcement of this Act. Article 4 (Applicability to Donation of Benefits Accompanying Transfer at Lower or Higher Prices)
The amended provisions of Article 35 shall begin to apply to the portion of taking over or transferring after the enforcement of this Act. Article 5 (Applicability to Donation of Benefits Accompanying Gratuitous Use of Real Estate)
The amended provisions of Article 37 shall begin to apply to the portion of using real estate gratuitously after the enforcement of this Act. In such cases, with regard to the portion of gratuitous use of real estate from prior to the enforcement of this Act, and the portion of continued gratuitous use at the time of the enforcement of this Act, it shall be deemed to newly use the real estate on the date of enforcement of this Act. Article 6 (Applicability to Donation of Benefits Accompanying Investment in Kind)
The amended provisions of Articles 39-3 shall begin to apply to the portion of investments in kind after the enforcement of this Act. Article 7 (Applicability to Deferment of Term of Merger Relating to Donations of Profits, Such as Listing Due to Merger)
The amended provisions of Article 41-5 (1) shall begin to apply to the portion of receiving a donation of stocks, etc. or acquiring for value after the enforcement of this Act. Article 8 (Applicability to Donation of Other Benefits)
| (1) | The amended provisions of Article 42 (1) 1 and 2 shall begin to apply to the portion of using the assets or letting to use and of providing service or receiving its provision after the enforcement of this Act. |
| (2) | The amended provisions of Article 42 (1) 3 shall begin to apply to the portion of trade to increase or decrease the corporate capital (including the investment amount), or the portion of making the transfer or takeover of business, exchange of business and organizational change of corporation etc. after the enforcement of this Act. |
| (3) | The amended provisions of Article 42 (4) shall begin to apply to the portion of occurrence of causes for increasing the assets value under that paragraph after acquiring the assets due to the causes falling under each of that paragraph, after the enforcement of this Act. |
Article 9 (Applicability to Adjustment of Double Taxation of Gift Tax and Income Tax Relating to Presumption of Donations at Time of Transfer to Spouse)
The amended provisions of proviso of Article 44 (2) and (4) shall begin to apply to the portion of determining the gift tax after the enforcement of this Act. Article 10 (Applicability to Legal Fiction of Donation of Title Trust Assets)
Article 11 (Applicability to Deferment of Period for Payment by Annual Installments for Inherited Property of Family Business)
The amended provisions of Article 71 (2) 2 shall begin to apply to the portion of filing an application for payment by annual installments after the enforcement of this Act. Article 12 (Applicability to Additional Taxes)
The amended provisions of Article 78 (1) and (2) shall begin to apply to the portion of arrival of the deadline for payment after the enforcement of this Act. Article 13 (Applicability to Submission of Issuance of Convertible Bonds and Details of Undertakers)
The amended provisions of Article 82 (6) shall begin to apply to the portion of issuing the convertible bonds, etc. after the enforcement of this Act.
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. 7580, 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 begin to apply to the portion of any inheritance that is first commenced and any donation that is first made after its promulgation.
Article 3 (Special Cases concerning Appraised Value of Collective Housing Whose Prices Are Nonexistent)
Where the prices of the collective housing prescribed by the amended provisions of Article 61 (1) 4 are nonexistent at the time of the enforcement of this Act, the previous provisions of Article 61 (3) shall apply to the calculation and the publication of the prices of the collective housing on or before the time that the Commissioner of the National Tax Office determines and publishes the prices of the relevant collective housing pursuant to the provisions of the proviso of Article 17 (1) of the Act on the Public Announcement of Values and Appraisal of Real Estate, notwithstanding the amended provisions of Article 61 (1) 4. Article 4 (Applicability to Hearing of Opinions and Application Filed for Recalculation and Publication)
The amended provisions of Article 61 (8) shall begin to apply to the portion that is first calculated and published after the enforcement of this Act.
ADDENDA <Act No. 8139, Dec. 30, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2007. (Proviso Omitted.)
Articles 2 through 15 Omitted.
Article 16 (Transitional Measures concerning Amendment to Other Statutes)
The additional tax that was imposed or is to be imposed pursuant to the provisions of the tax-related Act falling under each of the following subparagraphs before this Act enters into force, shall be governed by the previous provisions of the corresponding tax-related Act, notwithstanding the corresponding tax-related Act amended by Article 15 (1) through (7) of the Addenda:
ADDENDA <Act No. 8346, Apr. 11, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 8347, Apr. 11, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
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. 8828, Dec. 31, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2008: Provided, That the amended provisions of Articles 48 (9) and 78 (10) shall enter into force on January 1, 2009. Article 2 (General Applicability)
This Act shall begin to apply to the first case where inheritance commences or a gift is made after this Act enters into force.
Article 3 (Applicability to Contribution and Acquisition of Stocks of Public-Interest Corporation)
The amended provisions of the main clause of Article 16 (2), with the exception of its subparagraphs, the proviso of Article 48 (1), with the exception of its subparagraphs, and paragraphs (2) 2 and (11) of that Article shall begin to apply to the first case where stocks, etc. are contributed to a public-interest corporation, etc., or a public-interest corporation, etc. acquires stocks, etc. after this Act enters into force. Article 4 (Applicability to Additional Tax to Stocks of Domestic Corporation in Special Relationship held by Public-Interest Corporation)
The amended provisions of Article 48 (9) shall begin to apply to the first case where taxation period or business year begins after January 1, 2009. Article 5 (Applicability to Tax Verification of Public-Interest Corporation by Outside Experts)
The amended provisions of Article 50 (1) and (3) shall begin to apply to the first case where taxation period or business year begins after this Act enters into force. Article 6 (Applicability to Responsibility of Establishment and Use of Exclusive Account by Public-Interest Corporation)
The amended provisions of Article 50-2 shall begin to apply to the first case where revenue or expenditure received or disbursed by a public-interest corporation, etc. after this Act enters into force. Article 7 (Applicability to Responsibility of Publicly Announcing Statement of Accounts of Public-Interest Corporation)
The amended provisions of Article 50-3 shall begin to apply to the first case where taxation period or business year begins after this Act enters into force. Article 8 (Applicability to Payment in Annual Installments)
The amended provisions of Article 71 (1), (2) and (4) shall begin to apply to the first case where payment in annual installments is applied over the portion for which inheritance commences or a gift is made after this Act enters into force. Article 9 (Applicability to Payment in Kind)
The amended provisions of the main clause of Article 73 (1) shall begin to apply to the first case where payment in kind is applied over the portion for which inheritance commences or a gift is made after this Act enters into force. Article 10 (Applicability to Additional Tax)
| (1) | The amended provisions of Article 78 (10) shall begin to apply to the first case where taxation period or business year begins after January 1, 2009. |
| (2) | The amended provisions of Article 78 (11) shall begin to apply to the first case where taxation period or business year begins after this Act enters into force. |
Article 11 (Applicability to Notification of Taxable Data of Property Tax)
The amended provisions of Article 80 (3) shall begin to apply to the first case where that is notified to the Commissioner of the National Tax Service after this Act enters into force. Article 12 (Applicability to Submission of Payment Detail)
| (1) | The amended provisions of Article 82 (1) 1 shall begin to apply to the first case where a payment is made this Act enters into force. |
| (2) | The amended provisions of Article 82 (3) shall begin to apply to the first case where the details of the change of names or of modification are submitted after this Act enters into force. |
Article 13 (Special Cases concerning Establishment and Report of Exclusive Account of Public-Interest Corporation)
Where a corporation falls under public-interest corporations, etc. as at the time this Act enters into force or falls under public-interest corporations, etc. before March 31, 2008, it may open and report an exclusive account between the date this Act enters into force and June 30, 2008, notwithstanding the amended provisions of Article 50-2 (3).
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. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 9269, Dec. 26, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2009.
Article 2 (General Applicability)
This Act shall begin to apply to the first inheritance or donation that commences or is made after this Act enters into force.
Article 3 (Applicability to Appraisal of Securities)
The amended provisions of Article 63 (3) shall begin to apply to the first securities inherited or donated, that are appraised after this Act enters into force. Article 4 (Applicability to Payment by Annual Installments)
The amended provisions of Article 71 (1), (4) and (5) shall begin to apply to the first payment in annual installments applied after this Act enters into force. Article 5 (Applicability to Additional Tax)
The amended provisions of Article 78 (12) and (13) shall begin to apply to the first obligation to submit payment details, etc. that arises after this Act enters into force.
ADDENDA <Act No. 9916, Jan. 1, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2010.
Article 2 (General Applicability)
This Act shall begin to apply to the first inheritance commencing or donation made after this Act enters into force.
Article 3 (Applicability to Special Cases concerning Requests for Correction)
The amended provisions of Article 79 (2) shall begin to apply to the first decision or correction made after this Act enters into force.
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. 10000, Feb. 4, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 10305, May 20, 2010>
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. 10361, Jun. 8, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Act No. 10366, Jun. 10, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force two years after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 10411, Dec. 27, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2011.
Article 2 (General Applicability)
This Act shall begin to apply to the first case of commencing inheritance or receiving a donation after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Property Contributed to Public-Interest Corporation in Taxable Value of Inheritance)
The amended provisions of Article 16 (2), with the exception of its subparagraphs, shall begin to apply to the first contribution of stocks, etc. made to public-interest corporation, etc. after this Act enters into force. Article 4 (Applicability to Additional Tax)
The amended provisions of Article 78 (12) and (13) shall begin to apply to the first decision or correction made after this Act enters into force.
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. 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. 11130, Dec. 31, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2012.
Article 2 (General Applicability)
This Act shall begin to apply to the first case of commencing inheritance or receiving a donation after this Act enters into force.
Article 3 (Applicability to Profits Deemed Donated through Transactions with Specially Related Corporations)
The amended provisions of Articles 2 (2), 4 (4), 45-3, 47 (1), 55 (1), and 68 (1) shall begin to apply to the transactions with a specially related corporation occurred in the first business year after this Act enters into force.
ADDENDA <Act No. 11609, Jan. 1, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2013.
Article 2 (General Applicability)
This Act shall begin to apply to inheritance or donation that commences after this Act enters into force.
Article 3 (Applicability to Requirements for Conscientious Public-Interest Corporations regarding Non-Inclusion of Property Contributed to Public-Interest Corporations in Taxable Value of Inheritance and Gift)
The amended provisions of Article 16 (2) shall begin to apply to the taxable period of income tax or the business year of corporate tax beginning on or after the date this Act enters into force; and if a corporation corresponds to a conscientious public-interest corporation, etc. under the previous provisions as at the time this Act enters into force, it shall be deemed a conscientious public-interest corporation, etc. for purposes of applying this Act until the end of the first taxable period of income tax or the first business year of corporate tax that begins on or after the date this Act enters into force. Article 4 (Applicability to Presumption of Donation of Property Held in Accounts whose Real Holder has been Verified)
The amended provisions of Article 45 (4) shall begin to apply to reporting, determination, or correction made on or after the date this Act enters into force. Article 5 (Applicability to Legal Fiction as Donation of Profits through Transactions with Specially Related Corporations)
The amended provisions of Article 45-3 shall begin to apply to transactions with a specially related corporation made in a business year that comes on or after the date this Act enters into force.
ADDENDA <Act No. 11690, Mar. 23, 2013>
Article 1 (Enforcement Date)
| (1) | This Act shall enter into force on the date of its promulgation. |
Articles 2 through 7 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. 12168, Jan. 1, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2014.
Article 2 (General Applicability)
This Act shall begin to apply to property the inheritance of which commences or which is donated on or after the date this Act enters into force.
Article 3 (Applicability to Jurisdiction over Taxation)
The amended provisions of Article 6 (3) shall begin to apply to reporting, determination, or correction made on or after the date this Act enters into force. Article 4 (Applicability to Post-Management of Inheritance Deductions for Family Businesses)
The amended provisions of Article 18 (5) and (8) shall begin to apply to the taxable period or business year beginning on or after the date this Act enters into force. Article 5 (Applicability to Inheritance Deductions for Surviving Spouse)
The amended provisions of the main clause of Article 19 (3) shall begin to apply to the inherited property of which division is reported on or after the date this Act enters into force. Article 6 (Applicability to Legal Fiction as Donation of Profits through Transactions with Specially Related Corporations)
The amended provisions of Article 45-3 shall begin to apply to profits whose deadline of reporting arrives on or after the date this Act enters into force. Article 7 (Applicability to Payment in Kind)
The amended provisions of the main clause of Article 73 (1) shall begin to apply to payment in kind applied for on or after the date this Act enters into force. Article 8 (Applicability to Additional Taxes Following Non-Performance of Tax Verification by Public-Interest Corporations)
The amended provisions of Article 78 (5) shall begin to apply to the taxable period or business year beginning on or after the date this Act enters into force.
ADDENDA <Act No. 12420, Mar. 18, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 12844, Nov. 19, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That the parts that amend Acts among the Acts amended pursuant to Article 6 of Addenda, which were promulgated before this Act enters into force but of which enforcement date has not arrived, shall enter into force on the date respective Acts enter into force. Articles 2 through 7 Omitted.
ADDENDA <Act No. 13557, Dec. 15, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2016.
Article 2 (General Applicability)
This Act shall begin to apply to cases in which inheritance commences or donation is received after this Act enters into force.
Article 3 (Applicability to Deeming Property Registered in Name of Another Person to Have Been Donated)
| (1) | The amended provisions of Article 45-2 (1), with the exception of its subparagraphs, shall begin to apply to cases in which donation is deemed to be made after this Act enters into force. |
| (2) | The amended provisions of Article 45-2 (3) shall begin to apply to cases in which a report is filed after this Act enters into force. |
Article 4 (Applicability to Deeming Profits Accruing from Business Opportunities Provided by Specially Related Corporations to Have Been Donated)
The amended provisions of Article 45-4 shall begin to apply to cases in which business opportunities are provided in a business year that begins after this Act enters into force. Article 5 (Applicability to Reasons for Special Cases concerning Imposition of Additional Tax on Public-Interest Corporations)
The amended provisions of the proviso of Article 48 (8) shall begin to apply to cases in which the amount of inheritance tax or gift tax is determined or corrected after this Act enters into force. Article 6 (Applicability to Cases Eligible for Payment in Kind and Requirements for Payment in Kind)
| (1) | The amended provisions of Article 73 (1) shall begin to apply to cases in which application for payment in kind is filed after this Act enters into force. |
| (2) | Notwithstanding the amended provisions of Article 73 (1), previous provisions shall apply to cases in which application for payment in kind is filed before this Act enters into force. |
Article 7 (Applicability to Notification of Determination of Tax Base and Amount of Tax)
The amended provisions of the latter part of Article 77 shall begin to apply to cases in which the head of a tax office, etc. make notification after this Act enters into force. Article 8 (Special Cases concerning Donation of Profits from Gratuitous Loans of Money)
Where less than 100 million won is borrowed at no cost or at an interest rate below fair interest rate for a period of one year or more, the amended provisions of Article 41-4 shall begin to apply on the day on which a new loan is deemed to have been taken out pursuant to the latter part of the previous Article 41-4 (1), with the exception of its subparagraphs. Article 9 (Special Cases concerning Donation of Profits from Use of Property, Provision of Services)
| (1) | Where a person uses property of less than 100 million won without paying compensation to another person or after paying him or her a price below the market value, or allows another person to use such property after receiving a price higher than the market value, and where the period of use of the property is one year or more, the amended provisions of Article 42 shall apply on the day on which the property is deemed to be newly used pursuant to previous Article 42 (2) after this Act enters into force. |
| (2) | Where a person is provided with services by another person, of which price usual among a large number of unspecified persons is less than 10 million won, without paying compensation to him or her or after paying him or her a price below the market value or a person provides services to another person at a price above the market value, and where the period of being provided with or providing such services is one year or more, the amended provisions of Article 42 shall apply on the day on which the person is deemed to have newly provided or to have been newly provided with such services pursuant to previous Article 42 (2) after this Act enters into force. |
Article 10 (Transitional Measures concerning Donation of Profits through Transactions with Specific Corporations)
Where a person having a special relationship with the shareholders, etc. of a specific corporation has transactions with the specific corporation before this Act enters into force, previous Article 41 shall apply notwithstanding the amended provisions of Article 45-5. In such cases, the amended provisions of the proviso of Article 68 (1) shall apply to the deadline to file gift tax base, notwithstanding the main body of Article 68 (1). Article 11 (Transitional Measures concerning Reasons for Special Cases concerning Deeming Property Registered in Name of Another Person to Have Been Donated)
Previous provisions shall apply to property registered in the name of another person to which pervious Article 45-2 (1) 2 is applicable before this Act enters into force, notwithstanding the amended provisions of Article 45-2.
ADDENDA <Act No. 13796, Jan. 19, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on September 1, 2016.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 14388, Dec. 20, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2017: Provided, That the details of amendment with regard to a public-interest corporation, etc. which does not have a special relationship with a business group subject to limitations on cross shareholding among Article 16 (2), the proviso of Article 48 (1) and paragraph (2) 2 of that Article, and the amended provisions of Article 60 (5) shall enter into force on July 1, 2017, and the amended provisions of Articles 48 (2) 7, 50-3 (1), 50-4 (1), and 78 (9) shall enter into force on January 1, 2018. Article 2 (General Applicability)
This Act shall begin to apply to cases where inheritance takes place or donation is made after this Act enters into force.
Article 3 (Applicability to Non-Inclusion of Property Donated to Public-Interest Corporations in Taxable Value of Inherited Property)
The amended provisions of Article 16 shall begin to apply to any donation made after this Act enters into force: Provided, That the details of amendment with regard to a public-interest corporation, etc. which does not have a special relationship with a business group subject to limitations on cross shareholding among the amended provisions of Article 16 (2), with the exception of its subparagraphs, shall begin to apply to any donation made after July 1, 2017. Article 4 (Applicability to Deduction for Family Business Succession and Farming Succession)
The amended provisions of the latter part of Article 18 (5), with the exception of its subparagraphs, shall begin to apply to the period in which income tax is imposed or the business year in which corporate tax is imposed, which commences after this Act enters into force. Article 5 (Applicability to Donation of Profits Following Capital Increase)
| (1) | The amended provisions of Article 39 (1) 1 (c) shall begin to apply to the underwriting or acquisition of new shares after this Act enters into force. |
| (2) | The amended provisions of Article 39 (1) 3 shall begin to apply to the issuance of new shares after this Act enters into force. |
Article 6 (Applicability to Donation of Profits Following Conversion of Convertible Bonds to Shares)
The amended provisions of Article 40 (1) 1 (b) shall begin to apply to the underwriting or acquisition of convertible bonds, etc. after this Act enters into force. Article 7 (Applicability to Deemed Donation of Profits through Trading with Corporation in Special Relationship)
The amended provisions of Article 45-3 (1) shall begin to apply to any donation on which the deadline for reporting has come after this Act enters into force. Article 8 (Applicability to Deemed Donation of Profits Generated from Business Opportunity Provided by Corporation in Special Relationship)
The amended provisions of Article 45-4 (1) shall begin to apply to any donation on which the deadline for reporting has come after this Act enters into force. Article 9 (Applicability to Non-Inclusion of Property Donated to Public-Interest Corporations in Taxable Value of Property)
| (1) | The amended provisions of Article 48 (1), (2) 2 and (11) shall begin to apply to property donated or acquired after this Act enters into force: Provided, That the details of amendment with regard to a public-interest corporation, etc. which does not have a special relationship with a business group subject to limitations on cross shareholding among the amended provisions of the proviso of Articles 48 (1) and the main clause of paragraph (2) 2 of that Article, shall begin to apply to property donated or acquired after July 1, 2017. |
| (2) | The amended provisions of Article 48 (2) 4 shall begin to apply to property donated during the period in which income tax is imposed or the business year in which corporate tax is imposed, which commences after this Act enters into force. |
| (3) | The amended provisions of Articles 48 (2) 7 and 78 (9) shall begin to apply to property donated during the period in which income tax is imposed or the business year in which corporate tax is imposed, which commences after January 1, 2018. |
Article 10 (Applicability to Obligations of Public-Interest Corporations to Undergo Tax Verification and Audit)
The amended provisions of the proviso of Article 50 (1) and 78 (5) 3 shall begin to apply to property donated during the period in which income tax is imposed or the business year in which corporate tax is imposed, which commences after this Act enters into force. Article 11 (Applicability to Public Announcement of Financial Statements of Public-Interest Corporations)
The amended provisions of Article 50-3 (1) shall begin to apply to financial statements, etc. for the period in which income tax is imposed or the business year in which corporate tax is imposed, which commences after January 1, 2018. Article 12 (Applicability to Accounting Standards Applied to Public-Interest Corporations)
The amended provisions of Article 50-4 (1) shall begin to apply to accounting standards for the period in which income tax is imposed or the business year in which corporate tax is imposed, which commences after January 1, 2018. Article 13 (Applicability to Special Cases concerning Demand for Correction)
The amended provisions of Article 79 (2) 3 shall also apply where the relevant ground arises before this Act enters into force. Article 14 (Applicability to Submission of Detailed Statements of Payments)
The amended provisions of Article 82 (3) shall begin to apply to cases where a depositor deposits foreign currency securities, which were deposited in him or her by investors, again in the Korea Securities Depository after this Act enters into force. Article 15 (Special Cases concerning Non-Inclusion of Property Donated to Public-Interest Corporations in Taxable Value of Property)
The amended provisions of Articles 48 (2) 7 and 78 (9) shall apply to a public-interest corporation, etc. which owns shares with voting rights, etc. of a domestic corporation, in excess of 5/100 of the total number of outstanding stocks, etc. of the domestic corporation, which has a special relationship with a business group subject to limitations on cross shareholding as at the time the amended provisions of Articles 48 (2) 7 and 78 (9) enter into force. Article 16 (Transitional Measures concerning Donation of Profits Following Listing of Shares)
Notwithstanding the amended provisions of Article 41-3 (1), the previous provision thereof shall apply to cases where stocks, etc. were listed on the stock exchange before this Act enters into force. Article 17 (Transitional Measures concerning Designation of Appraisal Institutions Whose Appraisal of Market Price Is not Approved)
Notwithstanding the amended provisions of the latter part of Article 60 (5), the previous provisions thereof shall apply to cases where an appraisal institution is requested to appraise the market price before July 1, 2017.
ADDENDA <Act No. 14839, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That among Acts amended pursuant to Article 5 of the Addenda, the amended parts of Acts which were promulgated before this Act enters into force, but the enforcement dates of which have not arrived, shall enter into force on the enforcement dates of the relevant Acts, respectively. Articles 2 through 6 Omitted.
ADDENDA <Act No. 15224, Dec. 19, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2018: Provided, That the amended provisions of Article 52-2 (2) and (4), and 60 (5) shall enter into force on April 1, 2018, and the amended provisions of Article 18 (3) on January 1, 2019. Article 2 (General Applicability)
This Act shall begin to apply to cases where inheritance takes place or a person receives a donation after this Act enters into force.
Article 3 (Applicability to Deductions for Family Business Succession and Farming Succession)
The amended provisions of Article 18 (8) shall begin to apply to cases where grounds prescribed in the subparagraphs of paragraph (6) of that Article arise after this Act enters into force. Article 4 (Applicability to Imposition of Gift Tax on Property Donated to Public-Interest Corporations Which Has not Been Included in Amount of Tax Assessed)
The amended provisions of Article 48 (2), with the exception of its subparagraphs, and subparagraph 6 of that paragraph shall begin to apply to cases where the public-interest corporation, etc. exercises voting rights of stocks, etc. after this Act enters into force. Article 5 (Applicability to Non-Inclusion of Property Donated to Persons with Disabilities in Amount of Tax Assessed)
The amended provisions of the proviso of Article 52-2 (2), with the exception of its subparagraphs, and paragraph (4) of that Article shall begin to apply to money the public-interest corporation, etc. withdraws from its bank account after April 1, 2018. Article 6 (Applicability to Determination of Appraised Price)
The amended provisions of Article 60 (5) shall begin to apply to cases where the head of a tax office entrusts an appraisal institution with the appraisal of property after April 1, 2018. Article 7 (Applicability to Payment in Kind)
The amended provisions of Article 73 (1) 1 shall begin to apply to cases where a taxpayer files an application for payment of inheritance tax in kind after this Act enters into force. Article 8 (Special Cases concerning Deductions from Amount of Tax Return Filed)
Where a taxpayer files a tax return on property, for which inheritance takes place or which is donated to him or her during the period from January 1 to December 31, 2018 pursuant to Articles 67 and 68, notwithstanding the amended provisions of Article 69 (1) and (2), Article 69 shall apply to deductions from the amount of a tax return filed by altering "3/100" to "5/100", respectively. Article 9 (Transitional Measures concerning Non-Inclusion of Property Donated to Public-Interest Corporations in Amount of Inheritance Tax Assessed)
Notwithstanding the amended provisions of Article 16, the previous provisions thereof shall apply where stocks, etc. of a domestic corporation have been donated to the public-interest corporation, etc. before this Act enters into force. Article 10 (Transitional Measures concerning Profits Deemed Donated through Transactions with Corporations That Have Special Relationship)
Notwithstanding the amended provisions of Article 45 (3), the previous provision thereof shall apply to profits deemed donated pursuant to the previous provisions of Article 45-3 before this Act enters into force. Article 11 (Transitional Measures concerning Non-Inclusion of Property Donated to Public-Interest Corporations in Amount of Gift Tax Assessed)
Notwithstanding the amended provisions of the proviso of Article 48 (1), paragraphs (2) 2 and (4) of that Article, the previous provisions thereof shall apply where stocks, etc. of a domestic corporation have been donated to the public-interest corporation, etc. before this Act enters into force.
ADDENDA <Act No. 15522, Mar. 20, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 30 Omitted.
ADDENDA <Act No. 16057, Dec. 24, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 3 Omitted.
ADDENDA <Act No. 16102, Dec. 31, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2019.
Article 2 (General Applicability)
This Act shall begin to apply to cases where inheritance commences or a donation is received on or after this Act enters into force.
Article 3 (Applicability to Obligation to Pay Gift Tax for Property Registered in Name of Any Other Person, Which Is Deemed Donated)
The amended provisions of Articles 4-2 (2), (6) and (9), 6 (2), 45-2 (1) and (2), 47 (1), and 55 (1) 3 shall begin to apply to portions deemed by legal fiction donated on or after this Act enters into force. Article 4 (Applicability to Imposition of Inheritance Tax at Time of Disposing of Property for Family Business Which Receives Deduction for Family Business Succession)
The amended provisions of the former part of the main clause of Article 18 (6) shall begin to apply to the portion of property for family business which is disposed of on or after this Act enters into force. Article 5 (Applicability to Obligations of Public-Interest Corporations to Publicly Announce Statement of Settlement of Accounts)
The amended provisions of Article 50-3 (1) 5 and 6 shall begin to apply to the portion of the statement of settlement of accounts, etc., the public announcement of which is made on or after this Act enters into force. Article 6 (Applicability to Obligation to Pay Gift Tax for Property Registered in Name of Any Other Person, Which Is Deemed Donated)
Notwithstanding the amended provisions of Articles 4-2 (2), (6) and (9), 6 (2), 45-2 (1) and (2), 47 (1), and 55 (1) 3, the previous provisions shall apply to portions deemed by legal fiction donated on or after this Act enters into force, as an actual owner has obtained ownership of the relevant property but failed to transfer the property title to him or her as the actual owner before this Act enters into force.
ADDENDA <Act No. 16568, Aug. 27, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 16 Omitted.
ADDENDA <Act No. 16596, Nov. 26, 2019>
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. 16761, Dec. 10, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 22 Omitted.
ADDENDA <Act No. 16846, Dec. 31, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2020: Provided, That the amended provisions of Article 48 (2) 7 shall enter into force on January 1, 2021, and the amended provisions of Article 50 (4) through (6) on January 1, 2022. Article 2 (General Applicability)
This Act shall begin to apply to inheritance or donation taking place after this Act enters into force.
Article 3 (Applicability to Post-Management of Deduction for Succession to Family Business)
| (1) | The amended provisions of Article 18 (6) 1 (d) and item (e) of that subparagraph (excluding a part concerning the period for post-management) shall begin to apply to a person who receives a deduction for succession to a family business under Article 18 (2) 1 (hereinafter referred to as “deduction for succession to a family business”) after this Act enters into force. |
| (2) | Notwithstanding paragraph (1), an heir who satisfies all of the following requirements (hereinafter referred to as “heir under post-management”) is eligible under the amended provisions of Article 18 (6) 1 (d) (limited to a part concerning the scope of regular employees) and item (e) of that subparagraph (limited to a part concerning the scope of regular employees), as prescribed by Presidential Decree: |
| 1. | That the heir has received a deduction for succession to a family business before this Act enters into force; |
| 2. | That the period for post-management specified in the former part, with the exception of the subparagraphs, of the previous Article 18 (6) and subparagraph 1 (e) of that paragraph has not expired as at the time this Act enters into force; |
| 3. | That inheritance tax and an amount corresponding to interest have not imposed before this Act enters into force (excluding where inheritance tax and an amount corresponding to interest have been imposed in consideration of the ratio of disposal of property for their family businesses for falling under Article 18 (6) 1 (a)). |
| (3) | Notwithstanding paragraph (1), the amended provisions of Article 18 (6) 1 (d) (hereafter in this paragraph limited to a part that adds the standard for the amount of total salaries) and item (e) of that subparagraph (limited to a part that adds the standard for the amount of total salaries and that keeps the base number of employees applied to middle-standing enterprise) shall also apply to an heir under post-management. In such cases, the amended provisions of Article 18 (6) 1 (d) shall begin to apply to inheritance tax imposable in taxable periods or business years that begin after this Act enters into force. |
Article 4 (Applicability to Exclusion from Deduction for Succession to Family Business in cases of Tax Evasion or Accounting Fraud)
The amended provisions of Article 18 (9) through (11) shall begin to apply to decedents or heirs who evade tax or commit accounting fraud after this Act enters into force if inheritance takes place after this Act enters into force. Article 5 (Applicability to Blanket Deductions)
Article 6 (Applicability to Public-Interest Corporations’ Mandatory Spending for Public-Interest Projects)
The amended provisions of Article 48 (2) 7 shall begin to apply to taxable periods or business years that begin after January 1, 2021. Article 7 (Applicability to Public-Interest Corporations’ Obligation to Undergo Audits)
| (1) | The amended provisions of Article 50 (3) 1 shall begin to apply to taxable periods or business years that begin after this Act enters into force. |
| (2) | The amended provisions of Article 50 (4) through (6) shall begin to apply to taxable periods or business years that begin after January 1, 2022. In such cases, four consecutive taxable periods or business years in the application of the amended provisions of Article 50 (4) shall be calculated by including the taxable period or business year before the amended provisions of Article 50 (4) first apply. |
Article 8 (Applicability to Public-Interest Corporations’ Obligation to Disclose Closing Documents)
The amended provisions of Article 50-3 (1) shall begin to apply to taxable periods or business years that begin after this Act enters into force. Article 9 (Applicability to Non-Inclusion in Taxable Value of Property Donated to Persons with Disabilities)
The amended provisions of Article 52-2 shall begin to apply to properties to be placed in trusts after this Act enters into force. Article 10 (Applicability to Submission of Payment Statements)
The amended provisions of Article 82 (2) shall begin to apply to payment statements to be submitted after this Act enters into force. Article 11 (Transitional Measures concerning Period for Post-Management of Deductions for Succession to Family Business)
Notwithstanding the amended provisions of the former part, with the exception of the subparagraphs, of Article 18 (6), and subparagraph 1 (e) of that paragraph (limited to a part concerning the period for post-management), the previous provisions shall apply to inheritance that has commenced before this Act enters into force. Article 12 (Transitional Measures concerning Special Taxation of Gift Tax)
Notwithstanding the amended provisions of Article 43 (2), profits accruing from excess dividends under Article 41-2 before this Act enters into force shall not be added to the same transactions, etc. within one year.
ADDENDUM <Act No. 17339, Jun. 9, 2020>
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Act No. 17654, Dec. 22, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2021: Provided, That the amended provisions of Article 48 (11) 2, Article 60 (1) 2, and Article 65 (2) shall enter into force on January 1, 2022. Article 2 (General Applicability)
This Act shall begin to apply to inheritance and donation that takes place after this Act enters into force.
Article 3 (Applicability to Requirements for Public-Interest Corporations)
The amended provisions of Article 16 (2) 2, (3), and (5), Article 48 (2), (9), and (11) through (14), and the proviso of Article 49 (1) shall begin apply to taxable periods or business years (or January 1, 2022 in cases of Article 48 (11) 2) that begin after this Act enters into force. Article 4 (Applicability to Inheritance Deductions for Surviving Spouses)
The amended provisions of Article 19 (2) shall begin to apply to determinations or corrections to be made after this Act enters into force. Article 5 (Transitional Measures concerning Requirements for Public-Interest Corporations)
Notwithstanding the amended provisions of Article 16 (2) 2, (3), and (5), Article 48 (2), (9), and (11) through (14), and the proviso of Article 49 (1), the previous provisions shall apply to taxable periods or business years that has begun before this Act enters into force (or January 1, 2022 in cases of Article 48 (11) 2). Article 6 (Transitional Measures concerning Donation of Profits from Excess Dividends)
Notwithstanding the amended provisions of Article 41-2, the previous provisions shall apply to donations made before this Act enters into force.
ADDENDA <Act No. 17758, Dec. 29, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force January 1, 2021.
ADDENDA <Act No. 17799, Dec. 29, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 26 Omitted.
ADDENDA <Act No. 18591, Dec. 21, 2021>
Article 1 (Enforcement Date)
Article 2 (General Applicability)
This Act shall begin to apply to inheritance or donation that takes place after this Act enters into force.
Article 3 (Applicability to Houses in which Decedents and Heirs Have Lived Together Eligible for Inheritance Deductions)
The amended provisions of Article 23-2 (1) 1 shall also apply to cases where inheritance has commenced before this Act enters into force and the inheritance tax base and amount are determined or corrected after this Act enters into force. Article 4 (Applicability to Donation of Profits from Acquisition at Low Price or Transfer at High Price)
The amended provisions of Article 35 (3) shall also apply to cases where property is acquired or transferred during the period beginning on February 17, 2021 and ending before this Act enter into force. Article 5 (Applicability to Payment in Kind with Cultural Heritage)
The amended provisions of Article 73-2 shall begin to apply to inheritance that takes place after that amended provisions enter into force. Article 6 (Applicability to Standards for Imposition of Additional Tax due to Public-Interest Corporations’ Failure to Open and Report Exclusive Account)
The amended provisions of Article 78 (10) 2 (a) shall also apply to cases where additional tax is imposed on public-interest corporations, etc. after this Act enters into force if such public-interest corporations, etc. has failed to open and report an exclusive account as required under Article 50-2 (3) before this Act enters into force. Article 7 (Applicability to Submission of Information by Financial Investment Business Entities)
The amended provisions of Article 82 (7) shall begin to apply to transfers of stocks, etc. via securities accounts after this Act enters into force.
ADDENDA <Act No. 19195, Dec. 31, 2022>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2023.
Article 2 (General Applicability)
This Act shall begin to apply to inheritance or donation that takes place after this Act enters into force.
Article 3 (Applicability to Legal Fiction of Profits from Transactions with Specially Related Corporations as Donation)
The amended provisions of the latter part, with the exception of the subparagraphs, of Article 45-3 (1) shall also apply to profits deemed to be donated have accrued before this Act enters into force, if a gift tax base return on such profits is filed under Article 68 (1) after this Act enters into force. Article 4 (Applicability to Request for Correction due to Public-Interest Corporations’ Failure to Fulfill Obligation to Disclose)
The amended provisions of Article 50-3 (2) shall also apply to cases where public-interest corporations, etc. have failed to fulfill their obligation to disclose before this Act enters into force. Article 5 (Applicability to Additional Tax due to Public-Interest Corporations’ Failure to Fulfill Obligation to Undergo Audits)
The amended provisions of Article 78 (5) 3 shall begin to apply where auditors are designated for public-interest corporations, etc. under Article 50 (4) after this Act enters into force. Article 6 (Transitional Measures concerning Non-Taxation on State-Designated Cultural Heritages)
Notwithstanding the amended provisions of subparagraph 2 of Article 12, the previous provisions shall apply to the imposition of no inheritance tax on the property referred to in subparagraph 2 of the previous Article 12, if inheritance has commenced before this Act enters into force. Article 7 (Transitional Measures concerning Deductions for Succession to Family Business)
| (1) | Notwithstanding the amended provisions of Article 18-2, the previous Article 18 shall apply to deductions for succession to family businesses, if succession has commended before this Act enters into force. |
| (2) | Notwithstanding paragraph (1), the amended provisions of Article 18-2 (5) and (8) shall also apply to heirs who satisfy all of the following requirements (hereinafter referred to as “heir under post-management”), and heirs who receive a deduction for succession to a family business after this Act enters into force in whose case inheritance has commenced before this Act enters into force: Provided, That the amended provisions of Article 18-2 (5) and (8) shall apply to heirs on whom inheritance tax and an amount corresponding to interest are imposed in consideration of the ratio of disposal of property for their family businesses for falling under the previous Article 18 (6) 1 (a) only before this Act enters into force if they satisfy the requirements of subparagraphs 1 and 2: |
| 1. | That they have received a deduction under the previous Article 18 (2) 1 before this Act enters into force; |
| 2. | That the period for post-management specified in the former part, with the exception of the subparagraphs, of the previous Article 18 (6), subparagraph 1 (e) of that paragraph, and the provisions, with the exception of the subparagraphs, of paragraph (9) of that Article has not expired as at the time this Act enters into force; |
| 3. | That inheritance tax and an amount corresponding to interest under the previous Article 18 (6) and paragraph (9) 2 of that Article have not imposed before this Act enters into force. |
| (3) | Notwithstanding paragraph (2), it is more advantageous to apply the previous Article 18 (6) 1 (e) to heirs under post-management than to apply the amended provisions of Article 18-2 (5) 4, the previous Article 18 (6) 1 (e) shall apply to heirs. |
Article 8 (Transitional Measures concerning Deductions for Succession to Farming)
| (1) | Notwithstanding the amended provisions of Article 18-3 (1), the previous Article 18 (2) 2 shall apply to limits on deductions for succession to farming where inheritance has commenced before this Act enters into force. |
| (2) | The amended provisions of Article 18-3 (6) and (7) shall begin to apply to persons who evade tax or commit accounting fraud after this Act enters into force where inheritance commences after this Act enters into force. |
Article 9 (Transitional Measures concerning Periods for Payment in Annual Installments)
Notwithstanding the amended provisions of Article 71 (2) 1 (a), the previous provisions shall apply to the period for which inheritance tax can be paid in annual installments where inheritance has commenced before this Act enters into force.
ADDENDA <Act No. 19251, Mar. 21, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA <Act No. 19590, Aug. 8, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force on May 17, 2024.
Articles 2 through 10 Omitted.