ACT ON RESTRICTION ON SPECIAL CASES CONCERNING LOCAL TAXATION
Act No. 10220, Mar. 31, 2010
Amended by Act No. 10252, Apr. 12, 2010
Act No. 10333, May 31, 2010
Act No. 10356, jun. 8, 2010
Act No. 10361, jun. 8, 2010
Act No. 10369, jun. 10, 2010
Act No. 10417, Dec. 27, 2010
Act No. 10470, Mar. 29, 2011
Act No. 10628, May 18, 2011
Act No. 11029, May 18, 2011
Act No. 10654, May 19, 2011
Act No. 10789, jun. 7, 2011
Act No. 10890, Jul. 21, 2011
Act No. 10932, Jul. 25, 2011
Act No. 11042, Sep. 15, 2011
Act No. 11093, Nov. 22, 2011
Act No. 11138, Dec. 31, 2011
Act No. 11141, Dec. 31, 2011
Act No. 11241, Jan. 26, 2012
Act No. 11397, Mar. 21, 2012
Act No. 11487, Oct. 2, 2012
Act No. 11618, Jan. 1, 2013
Act No. 11690, Mar. 23, 2013
Act No. 11716, Mar. 23, 2013
Act No. 11762, May 10, 2013
Act No. 11999, Aug. 6, 2013
Act No. 12175, Jan. 1, 2014
Act No. 12251, Jan. 14, 2014
Act No. 12329, Jan. 21, 2014
Act No. 12506, Mar. 24, 2014
Act No. 12686, May 28, 2014
Act No. 12844, Nov. 19, 2014
Act No. 12955, Dec. 31, 2014
Act No. 12989, Jan. 6, 2015
Act No. 13248, Mar. 27, 2015
Act No. 13288, May 18, 2015
Act No. 13383, jun. 22, 2015
Act No. 13426, Jul. 24, 2015
Act No. 13435, Jul. 24, 2015
Act No. 13442, Jul. 24, 2015
Act No. 13448, Jul. 24, 2015
Act No. 13498, Aug. 28, 2015
Act No. 13499, Aug. 28, 2015
Act No. 13605, Dec. 22, 2015
Act No. 13609, Dec. 22, 2015
Act No. 13613, Dec. 22, 2015
Act No. 13637, Dec. 29, 2015
Act No. 13729, Jan. 6, 2016
Act No. 13805, Jan. 19, 2016
Act No. 13854, Jan. 27, 2016
Act No. 14095, Mar. 22, 2016
Act No. 14111, Mar. 29, 2016
Act No. 14115, Mar. 29, 2016
Act No. 14122, Mar. 29, 2016
Act No. 14198, May 29, 2016
Act No. 14226, May 29, 2016
Act No. 14477, Dec. 27, 2016
Act No. 14474, Dec. 27, 2016
Act No. 14476, Dec. 27, 2016
Act No. 14481, Dec. 27, 2016
Act No. 14567, Feb. 8, 2017
Act No. 14569, Feb. 8, 2017
Act No. 14839, Jul. 26, 2017
Act No. 14939, Oct. 24, 2017
Act No. 15012, Oct. 31, 2017
Act No. 15309, Dec. 26, 2017
Act No. 15295, Dec. 26, 2017
Act No. 15356, Jan. 16, 2018
Act No. 15460, Mar. 13, 2018
Act No. 15523, Mar. 20, 2018
Act No. 15830, Oct. 16, 2018
Act No. 15881, Dec. 11, 2018
Act No. 16008, Dec. 24, 2018
Act No. 16041, Dec. 24, 2018
Act No. 16057, Dec. 24, 2018
Act No. 16133, Dec. 31, 2018
Act No. 16172, Dec. 31, 2018
Act No. 16407, Apr. 30, 2019
Act No. 16413, Apr. 30, 2019
Act No. 16568, Aug. 27, 2019
Act No. 16652, Nov. 26, 2019
Act No. 16596, Nov. 26, 2019
Act No. 19634, Aug. 16, 2023
CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to operating local finance soundly and to realizing fair taxation by efficiently implementing local tax policy, by prescribing matters concerning reducing and exempting local tax and exceptions to local tax and matters concerning restrictions thereon.
| (1) | The definitions of terms used in this Act shall be as follows: <Amended on Jan. 1, 2014; Dec. 31, 2014; Dec. 29, 2015; Jan. 19, 2016; Dec. 27, 2016; Dec. 26, 2017; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | The term "unique duty" means a duty individually prescribed by statutes or a duty stipulated as an object in the corporate register; |
| 3. | The term "multi-family housing" means multi-family housing defined in subparagraph 3 of Article 2 of the Housing Act, other than dormitories; |
| 6. | The term "exceptions to local tax" means the reduction of tax rates, tax reduction or exemption, tax credits, deductions from the tax base (including exclusion from heavy taxation, and reclassification of property tax assessable subject matter), etc.; |
| 8. | The term "direct use" means the owner's (including a trustee defined in Article 2 of the Trust Act but limited to cases where the trust is registered) direct use of the relevant real estate, motor vehicles, construction machinery, ships, aircraft, etc. to suit the purpose or usage for his/her business or work (excluding the cases where they are used by renting, except for the cases where renting is specified as his/her purpose business or business affairs in this Act); |
| 8-2. | The term “sale and donation” means the transfer of ownership by a person whose local tax is reduced under this Act, whether for a fee or at no charge, such as sale or purchase, exchange, or donation of the relevant real estate, vehicles, ships, etc.: Provided, That the transfer of ownership prescribed by Presidential Decree shall be excluded herefrom; |
| 9. | The term "national" is a resident or a domestic corporation subject to the Local Tax Act; |
| 10. | The term "taxable year" means a taxable period or business year under the Local Tax Act; |
| 14. | The term “tax carried forward" means, where an individual transfers fixed assets, etc. used for the relevant business (hereafter in this subparagraph, referred to as "fixed assets, etc. for former business") to a corporation by investment in kind, etc., and the corporation that has acquired such fixed assets, etc. for former business, transfers them, the payment made by the corporation as corporate local income tax in the equivalent of the amount of individual local income tax calculated under Article 103-3 of the Local Tax Act (hereinafter referred to as "amount of individual local income tax calculated on capital gains") calculated deeming no other asset has been transferred by the individual during the taxable period in which the date of transfer of the fixed assets, etc. falls, for former business to the corporation, instead of individual local income tax on capital gains to be imposed on the individual under Article 103 of the Local Tax Act (hereinafter referred to as "individual local income tax on capital gains"). |
| Article 2-2 (Principle for Special Cases concerning Local Taxation) |
Where the Minister of the Interior and Safety and local governments intend to prescribe special cases concerning local taxation, they shall comprehensively consider the following matters: <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Jan. 15, 2020>
| 1. | The public interest for the purpose of special cases concerning local taxation and connectivity of business affairs of local governments; |
| 2. | Effects on local development in accordance with the socio-economic policies of the State and contribution to balanced regional development; |
| 4. | The ability of the person entitled to special cases concerning local taxation’ |
| 5. | Persons entitled to special cases concerning local taxation and the specificity and clarity of items of taxation; |
| 6. | Financial status of local governments; |
| 7. | Minimizing duplication of budgetary support including subsidies from the Sate and local governments and special cases concerning local taxation; |
| 8. | Minimizing special cases concerning local taxation imposed for specific purposes, such as local source and facility tax. |
[This Article Newly Inserted on Dec. 27, 2010]
| Article 3 (Restrictions on Special Cases concerning Local Taxation) |
| (2) | If the head of a relevant administrative agency intends to amend Acts to change the scope of an exception for corporations, etc. granted exceptions to local tax as prescribed by this Act, he/she shall pre-consult with the Minister of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017> |
| Article 4 (Local Tax Reduction or Exemption under Municipal Ordinance) |
| (1) | Where any of the following cases arises, local governments may grant reduction of a local tax rate, tax reduction or exemption, or tax credits (hereafter in this Article and Article 182, referred to as "local tax reduction or exemption") for up to three years: Provided, That no local tax reduction or exemption prescribed by this Act: <Amended on Dec. 27, 2010; Jan. 1, 2014; Mar. 24, 2014; Jan. 15, 2020; Jun. 8, 2021> |
| 1. | When deemed necessary to reduce or exempt local tax for the public interest, including providing support for people's livelihood, improving habitats of farming and fishing villages, supporting to expand public transportation, etc.; |
| 2. | When deemed necessary to reduce or exempt local tax for developing specific areas and providing support to specific industries and facilities; |
| (2) | Notwithstanding paragraph (1), no local government shall be allowed to grant any of the following local tax reductions or exemptions: Provided, That if in cases prescribed by Presidential Decree, taking into account the financial status of the State and local governments, the necessity for emergent control over disasters, the types of tax items and the equality in taxation, the local taxes falling under subparagraph 1 may be reduced or exempt: <Newly Inserted on Dec. 27, 2010; Mar. 23, 2013; Jan. 1, 2014; Nov. 19, 2014; Jul. 26, 2017; Jan. 15, 2020; Jun. 8, 2021; Mar. 14, 2023> |
| 1. | Local tax reduction or exemption by extending the reduction or exemption of local taxes prescribed in this Act (referring to extending the reduction rate or reduced amount of local taxes or extending the persons entitled to local tax reduction or exemption or the tax items or period related thereto); |
| 5. | Matters prescribed and publicly announced by the Minister of the Interior and Safety, as prescribed by Presidential Decree, which are local tax reduction or exemption, etc. substantially compromising impartiality of taxation or inappropriate local tax reduction or exemption, etc. in light of the national economic policy. |
| (3) | If a local government intends to reduce or exempt local tax (excluding reductions or exemptions delegated by this Act or the Act on Restriction on Special Cases concerning Taxation), it shall prescribe the same by municipal ordinance following deliberation by the relevant local tax deliberation committee prescribed in Article 147 of the Framework Act on Local Taxes. In such cases, where a local government intends to establish, extend, or modify local tax reduction or exemption on at least the scale prescribed by Presidential Decree, it shall request a tax-related specialized institution, corporation, or organization prescribed by Presidential Decree to analyze and evaluate the expediency, result, efficiency, etc. of reduction or exemption and utilize the report on such analysis and evaluation as deliberative materials. <Amended on Dec. 27, 2010; Dec. 31, 2014; Dec. 27, 2016> |
| (4) | Notwithstanding paragraphs (1) and (3), the head of a local government may reduce or exempt local tax for a person to whom reduction or exemption of local tax is deemed necessary due to a natural disaster or a special ground prescribed by Presidential Decree, following a resolution by the relevant local council. <Amended on Dec. 27, 2010; Dec. 29, 2015> |
| (5) | Local governments shall rationalize matters concerning local tax reduction or exemption, and the heads of local governments shall submit the results of rationalization to the Minister of the Interior and Safety. In such cases, the Minister of the Interior and Safety may utilize the results of rationalization to formulate, etc. a policy on local tax reduction or exemption. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017> |
| (6) | Where a local government reduces or exempts local tax in accordance with paragraphs (1) through (3), it shall prescribe the same by municipal ordinance within the amount (hereafter in this Article, referred to as "extent of local tax reduction or exemption") calculated by multiplying the amount of local taxes collected as at the closing of accounts for the year before the previous year, by a rate prescribed by Presidential Decree. <Newly Inserted on Dec. 27, 2010> |
| (7) | Where the amount of local tax reduced or exempted by municipal ordinance under paragraph (6) exceeds the extent of local tax reduction or exemption, a local government may prescribe local tax reduction or exemption for the proceeding year by municipal ordinance within the extent of local tax reduction or exemption curtailed or rationalized, as prescribed by Presidential Decree: Provided, That where it is to be prescribed in excess of the extent of local tax reduction or exemption, prescribed by municipal ordinance with permission from the Minister of the Interior and Safety, such local tax reduction or exemption shall be excluded from that subject to curtailing or rationalization of local tax reduction or exemption. <Newly Inserted on Dec. 27, 2010; Mar. 23, 2013; Nov. 19, 2014; Dec. 29, 2015; Jul. 26, 2017> |
| (8) | Where local tax reduction or exemption prescribed in paragraph (1) is prescribed by municipal ordinance, paragraphs (2) (excluding the proviso and subparagraph 1 thereof), (6), and (7) shall not apply to Jeju Special Self-Governing Province. <Newly Inserted on Dec. 27, 2010; Dec. 29, 2015; Jan. 15, 2020> |
[Title Amended on Dec. 27, 2010]
| Article 5 (Preparation of Local Tax Disbursement Reports) |
| (1) | The head of each local government shall prepare a report on the outcomes of financial assistance granted pursuant to exceptions to local tax, such as local tax reduction or exemption, for the immediately preceding fiscal year and on the amount estimated for the relevant fiscal year (hereinafter referred to as "local tax disbursement report"), and shall submit such report to the relevant local council. |
| (2) | Methods, etc. for preparing a local tax disbursement report shall be determined by the Minister of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017> |
CHAPTER II REDUCTION AND DEDUCTION
SECTION 1 Support for Agriculture and Fisheries
| Article 6 (Reduction or Exemption for Farmland of Self-Employed Farmers) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2023 on farmland prescribed by Presidential Decree (hereafter in this Section, referred to as “farmland”) acquired for direct cultivation according to the standards prescribed by Presidential Decree, or on woodland acquired for creating farmland as prescribed by relevant statutes, by a person who has engaged in farming for at least two years, or an agricultural business successor and young farmer as agricultural business successor of a youth startup referred to in Article 8 of the Act on Fostering and Support for Next Generation Farmers or Fishers and Young Farmers or Fishers (hereafter in this Article, referred to as "self-employed farmer"), as prescribed by Presidential Decree: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Dec. 29, 2015Dec. 27, 2016; Dec. 26, 2017; May 19, 2020; Dec. 29, 2020; Dec. 28, 2021> |
| 1. | Where the relevant person fails to cultivate such farmland directly or commence creating farmland, as a self-employed farmer, without just grounds, within two years from the date of acquisition; |
| 2. | Where such farmland is sold, donated, or used for any other purpose, after having been cultivated directly for less than two years. |
| (2) | Acquisition tax shall be reduced by 50/100 until December 31, 2023 on any of the following agricultural facilities that meet the standards prescribed by Presidential Decree and are acquired by a self-employed farmer to use directly for agriculture: <Amended on Dec. 31, 2014; Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020> |
| 1. | Facilities for sericulture or mushroom growing, and fixed greenhouses; |
| 3. | Warehouses (applicable only to cold stores, ambient temperature warehouses, and warehouses to store agricultural machinery) and facilities to sort and treat agricultural products. |
| (3) | Registration license tax shall be exempted until December 31, 2021 on a license to occupy and use a road, river, or public waters, which is obtained by a self-employed farmer to use for cultivation. <Amended on Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018> |
| (4) | Acquisition tax shall be reduced by 50/100 until December 31, 2024, on farmland acquired for direct cultivation or direct use in accordance with the standards prescribed by Presidential Decree by a farmer who moves to a rural community defined in subparagraph 5 of Article 3 of the Framework Act on Agriculture, Rural Community and Food Industry, as prescribed by Presidential Decree (hereafter in this paragraph, referred to as "returning farmers") within three years from the date returning to farming prescribed by Presidential Decree (hereafter in this paragraph, referred to as "date returning to farming"), on woodland acquired for creating farmland, as prescribed by relevant statutes, such as the Farmland Act, and agricultural facilities under paragraph (2) (in cases where a person acquiring farmland, woodland and agricultural facilities becomes a returning farmer within 60 days from the date of acquisition, including such farmland, woodland and agricultural facilities): Provided, That where a returning farmer falls under any of the following cases without just grounds, the reduced portion of acquisition tax shall be collected as a penalty, but in cases falling under subparagraphs 3 and 4, the reduced portion of acquisition tax only on the portion corresponding thereto, shall be collected as a penalty: <Newly Inserted on Dec. 27, 2010; Dec. 31, 2011; Dec. 31, 2014; Jun. 22, 2015Dec. 27, 2016; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021> |
| 1. | Where such returning farmer changes his/her resident registration address to an area, other than a Special Self-Governing City, Special Self-Governing Province, or Si/Gun/Gu (referring to an autonomous Gu in cases of Gus; hereinafter the same shall apply) in which the acquired farmland or woodland is located; a Si/Gun/Gu adjacent to such area; or an area within a 30-kilometer radius from such farmland or woodland, within three years from the date returning to farming; |
| 2. | Where such returning farmer engages in an industry, other than agriculture defined in subparagraph 1 of Article 3 of the Framework Act on Agriculture, Rural Community and Food Industry (hereafter in this paragraph, referred to as "agriculture") within three years from the date returning to farming: Provided, That excluded herefrom shall be where such returning farmer concurrently engages in the food industry and agriculture defined in subparagraph 8 of Article 3 of the Framework Act on Agriculture, Rural Community and Food Industry; |
| 3. | Where such returning farmer fails to directly engage in cultivation within two years from the date such farmland was acquired, or fails to commence creating farmland within two years from the date such woodland was acquired; |
| 4. | Where such returning farmer sells or donates such farmland or woodland or uses it for any other purpose, after having been cultivated for less than three years. |
| Article 7 (Reduction or Exemption for Agricultural Machinery) |
| (1) | Acquisition tax shall be exempted until December 31, 2023 on agricultural machinery defined in the Agricultural Mechanization Promotion Act, such as automatic cultivators for direct use in agriculture (including where it is used for transporting agricultural products, etc. for farming). <Amended on Dec. 29, 2015; Dec. 24, 2018; Dec. 29, 2020> |
| (2) | Acquisition tax and property tax shall be respectively exempted until December 31, 2023 on well facilities for supplying agricultural water. <Amended on Dec. 29, 2015; Dec. 24, 2018; Dec. 29, 2020> |
| Article 8 (Exemption for Expansion and Development of Farmland) |
| (1) | Acquisition tax shall be exempted until December 31, 2025, on farmland acquired by implementing an agricultural infrastructure improvement project prescribed in the Rearrangement of Agricultural and Fishing Villages Act and on reclaimed farmland acquired by implementing a farmland expansion and development project prescribed in the same Act: Provided, That if the Korea Rural Community Corporation incorporated under the Korea Rural Community Corporation and Farmland Management Fund Act (hereafter in this Article and Article 13, referred to as the “Korea Rural Community Corporation) acquires them, acquisition tax shall not be exempted. <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (2) | Acquisition tax shall be exempted until December 31, 2025, on farmland exchanged, subdivided, or combined pursuant to the Rearrangement of Agricultural and Fishing Villages Act or the Korea Rural Community Corporation and Farmland Management Fund Act and on farmland exchanged, subdivided, or combined within an agricultural promotion area: Provided, That if the Korea Rural Community Corporation exchanges, subdivides or combines farmland, acquisition tax shall not be exempted. <Amended Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (3) | Acquisition tax shall be exempted until December 31, 2025 on the acquisition of woodland exchanged, subdivided, or combined, by a person who engages in forestry or by a successor to forestry to directly engage in forestry, as prescribed by Presidential Decree, and where a person who engages in forestry or a successor to forestry acquires a mountain conservation district (limited to where an area not exceeding 990,000 square meters is acquired; but where any mountain conservation district is additionally acquired, limited to where the total area aggregated with the area of mountain conservation district already owned does not exceed 990,000 square meters) designated pursuant to the Mountainous Districts Management Act, acquisition tax thereon shall be reduced by 50/100 until December 31, 2025. <Amended on Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020; Mar. 14, 2023> |
| (4) | Acquisition tax on farmland acquired by filling or reclaiming land from public waters in accordance with the Public Waters Management and Reclamation Act shall be imposed, by applying a tax rate of 8/1,000 until December 31, 2021, notwithstanding the tax rate in Article 11 (1) 3 of the Local Tax Act: Provided, That where such farmland is used for any other purpose within two years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty. <Amended on Dec. 29, 2015; Dec. 26, 2017 Dec. 24, 2018> |
| Article 9 (Reduction or Exemption for Self-Employed Fishermen) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2023 on fishing rights, fish farming rights, and fishing vessels (excluding fishing vessels specified in paragraph (2)), land (referring to the land, for which the category is officially registered as fish farm under Article 67 of the Act on the Establishment and Management of Spatial Data) for use for any of the following fisheries, and buildings prescribed by Presidential Decree, which are acquired by a person prescribed by Presidential Decree among those engaging in fishery (including fish farming; hereinafter the same shall apply), of by a successor to fisheries and young fisher as fisheries business successor of a youth startup referred to in Article 8 of the Act on Fostering and Support for Next Generation Farmers or Fishers and Young Farmers or Fishers to directly engage in fishery according to the standards prescribed by Presidential Decree: <Amended on Nov. 22, 2011; Dec. 29, 2015Dec. 26, 2017, Aug. 27, 2019; May 19, 2020; Dec. 29, 2020; Jan. 11, 2022> |
| (2) | Acquisition tax, property tax, and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act, shall be exempted until December 31, 2025 on a small fishing vessel of less than 20 tons. <Amended on Dec. 29, 2015; Jan. 15, 2020; Mar. 14, 2023> |
| (3) | Acquisition tax shall be exempted until December 31, 2025 on fishing rights and fish farming rights acquired on application; and where a license arising from registration other than for establishment, among licenses concerning fishing rights and fish farming rights are newly obtained or such license is modified, registration license tax on the license shall be exempted until December 31, 2025. <Amended on Dec. 29, 2015; Aug. 27, 2019; Jan. 15, 2020; Mar. 14, 2023> |
| Article 10 (Reduction or Exemption concerning Loans to Farmers, Fishermen) |
| (1) | Registration license tax shall be reduced by 50/100 until December 31, 2025, on the registration of security (including registration of security for a small fishing vessel of less than 20 tons) provided when any of the following cooperatives, the federation thereof, etc. provide a farmer or fisherman who registers business information on agriculture or fisheries pursuant to Article 4 (1) of the Act on Fostering and Supporting Agricultural and Fisheries Business Entities (including agricultural partnerships, fisheries partnerships, and agricultural companies; hereafter in this Article, the same shall apply) with a loan: Provided, That in cases of a federation of cooperatives, the NongHyup Bank, or the Suhyup Bank, it shall be limited to where farming funds, fishery funds, forestry funds, or funds for cattle breeding are financed: <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021; Mar. 14, 2023> |
| 2. | A cooperative (including fishing community fraternities) and the Suhyup Bank incorporated pursuant to the Fisheries Cooperatives Act; |
| 4. | A credit union and federation thereof incorporated pursuant to the Credit Unions Act; |
| (2) | The pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) and the pro rata employee portion of resident tax shall be exempted until December 31, 2024, on a place of business used directly by a farmer or fisherman for farming, forestry, cattle breeding, aquaculture, catching fish, etc. <Amended on Dec. 29, 2015Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021> |
| Article 11 (Reduction or Exemption for Agricultural Corporations) |
| (1) | Acquisition Tax shall be reduced by 75/100 until December 31, 2023, on farmland acquired within two years (in cases of youth agricultural corporation prescribed by Presidential Decree, within four years) from the date of registration for corporation to use for farming in accordance with the standards prescribed by Presidential Decree by a corporation prescribed by Presidential Decree taking into account the management status from among any of the following agricultural corporations (hereafter in this Article, referred to as “agricultural corporation): <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 26, 2017; Jan. 15, 2020; Dec. 29, 2020> |
| (2) | Acquisition tax on real estate acquired by an agricultural corporation to use directly for farming, distribution, and processing shall be reduced by 50/100; and property tax on real estate used directly for the relevant use as at the tax base date shall be reduced by 50/100 until December 31, 2023, respectively. <Amended Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Dec. 29, 2020> |
| (3) | When any reduction or exemption is applied under paragraph (1) or (2), the reduced or exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Newly Inserted on Dec. 31, 2014; Dec. 27, 2016> |
| 1. | Where the real estate has not been used directly for the relevant purpose without just grounds, within one year from the date of acquisition; |
| 2. | Where the real estate has been sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than three years; |
| (4) | Registration license tax on registration to incorporate an agricultural corporation shall be exempted until December 31, 2020. <Newly Inserted on Dec. 26, 2017> |
| Article 12 (Reduction or Exemption for Fisheries Corporations) |
| (1) | Acquisition tax on real estate acquired by any of the following fisheries corporations (hereafter in this Article, referred to as "fisheries corporation") to use directly for fisheries, distribution, and processing, shall be reduced by 50/100; and property tax on real estate used directly for the relevant purpose as at the tax base date shall be reduced by 50/100 until December 31, 2023, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015Dec. 27, 2016; Dec. 26, 2017; Dec. 29, 2020> |
| (2) | Registration license tax on registration to incorporate a fisheries corporation shall be exempted until December 31, 2020. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017> |
| (3) | When any reduction or exemption is applied under paragraph (1), the reduced or exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Newly Inserted on Dec. 27, 2016> |
| 1. | Where the real estate has not been used directly for the relevant purpose without just grounds, within one year from the date of acquisition; |
| 2. | Where the real estate has been sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than three years; |
| Article 13 (Reduction or Exemption for Agricultural Projects of Korea Rural Community Corporation) |
| (1) | The following registrations made by the Korea Rural Community Corporation shall be exempted from registration license tax until the date provided for in the relevant subparagraphs, respectively: <Amended on Jul. 21, 2011; Jan. 1, 2013; Jan. 15, 2020> |
| (2) | Local taxes on real estate acquired by the Korea Rural Community Corporation shall be reduced or exempted until December 31, 2019, as follows: Provided, That where real estate under subparagraphs 1, 1-2, 1-3, 2, 3 and 5 is used for any other purpose within two years from the date of acquisition or is sold or donated to a person other than farmers, agricultural corporations and persons to be fostered as professional farmers under Article 18 (1) 1 of the Korea Rural Community Corporation and Farmland Management Fund Act, the reduced portion of acquisition tax shall be collected (excluding subparagraphs 4 and 4-2) as a penalty. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015;, Dec. 27, 2016; Dec. 26, 2017; Jan. 15, 2020; Mar. 14, 2023> |
| 1-2. | Acquisition tax shall be reduced by 50/100 and property tax shall be reduced by 75/100, respectively, on land for agricultural infrastructure and facilities thereof, of the State or local governments acquired and owned according to a rearrangement plan for agricultural infrastructure of the State or local governments under the Agricultural and Fishing Villages Improvement Act; |
| 4. | Acquisition tax shall be reduced by 25/100 on real estate acquired temporarily by the Korea Rural Community Corporation to use directly for living environment improvement projects defined in subparagraph 10 of Article 2 of the Agricultural and Fishing Villages Improvement Act, to supply to a third party in accordance with the plans of the State or local governments; |
| (3) | Public facilities, appurtenant land thereto, and a public site for public facilities to be gratuitously reverted to the State or local governments pursuant to relevant statutes, as real estate in a housing site development zone or a complex construction project zone, among real estate acquired under paragraph (2) 4, shall be exempted from property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) until December 31, 2024. In such cases, the scope of public facilities and appurtenant land thereto shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| Article 14 (Reduction or Exemption for Agricultural and Fishery Projects, etc. of Agricultural Cooperatives) |
| (1) | Acquisition tax shall be reduced by 25/100 until December 31, 2023, on the following real estate (including real estate allowed to be used as facilities for distributing agricultural and fishery products by distribution subsidiaries prescribed in Article 70 (1) of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products; hereafter in this paragraph, the same shall apply) acquired by the National Agricultural Cooperative Federation, the National Federation of Fisheries Cooperatives, or the National Forestry Cooperatives Federation to use directly for the projects of purchase, sale, etc.; and property tax shall be reduced by 25/100 until December 31, 2020, on real estate used directly for such projects as at the tax base date: <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020> |
| 1. | Land and buildings for projects for purchase, sale, storing, processing, and trade; |
| 2. | Land and buildings for projects for production and inspection; |
| 3. | Land and buildings for facilities for educating farmers and fishermen. |
| (2) | Acquisition tax shall be reduced by 25/100 until December 31, 2016, on real estate directly acquired by the National Agricultural Cooperative Federation, the National Federation of Fisheries Cooperatives, the National Forestry Cooperatives Federation, or the Korea Tobacco Growers Organization to use for projects for education, guidance, and assistance for members and projects for facilities to be used jointly. <Amended on Jan. 1, 2013; Dec. 31, 2014; Mar. 14, 2023> |
| 1. | Deleted; <Dec. 31, 2014> |
| 2. | Deleted. <Dec. 31, 2014> |
| (3) | Acquisition tax shall be exempted until December 31, 2023, on real estate acquired by a cooperative (including a corporation for joint business among cooperatives) incorporated pursuant to the Agricultural Cooperatives Act; cooperative (including a fishing village union and a corporation for joint business among cooperatives) incorporated pursuant to the Fisheries Cooperatives Act; forestry cooperative (including a forestry union and a corporation for joint business among cooperatives) incorporated pursuant to the Forestry Cooperatives Act; or tobacco growers' cooperative to use directly for its unique duties; and property tax shall be exempted until December 31, 2020 on real estate used directly for its unique duties as at the tax base date. <Amended on Mar. 21, 2012; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Dec. 29, 2020; Mar. 14, 2023> |
| (4) | The pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) and pro rata employee portion of resident tax shall be reduced by 50/100 until December 31, 2014, on a cooperative (including a corporation for joint business among cooperatives) incorporated pursuant to the Agricultural Cooperatives Act; cooperative incorporated pursuant to the Forestry Cooperatives Act; forestry cooperative incorporated pursuant to the Forestry Cooperatives Act; or tobacco growers' cooperative. <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2020> |
| (5) | None of the aforementioned provisions for reduction or exemption shall apply to the Federations of the cooperatives prescribed in paragraphs (3) and (4). <Amended on Dec. 29, 2015> |
| Article 14-2 (Reduction for Projects for Purchase, Sale of Nonghyup Agribusiness Group, etc.) |
| 1. | Land and buildings for projects for purchase, sale, keeping, processing, and trade; |
| 2. | Land and buildings for projects for production and inspection; |
| 3. | Land and buildings for facilities for educating farmers and fishermen. |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 15 (Reduction or Exemption for Agro-Fisheries Projects of the Korea Agro-Fisheries and Food Trade Corporation) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2023, on real estate acquired by the Korea Agro-Fisheries and Food Trade Corporation incorporated pursuant to the Korea Agro-Fisheries and Food Trade Corporation Act or any distribution subsidiary prescribed in Article 70 (1) of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, to use directly for distribution facilities of agricultural and fishery products, including a general agro-fishery products market; and facilities for education and training on the distribution of agricultural and fishery products (including where the relevant real estate is used by a wholesale market corporation, market wholesaler, or intermediate wholesaler defined in subparagraphs 7 through 9 of Article 2 of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products or other retailers for its unique duties; hereafter in this Article, the same shall apply); and property tax shall be reduced by 50/100 until December 31, 2020, on real estate used directly for such facilities as at the tax base date. <Amended on Jul. 25, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020; Mar. 14, 2023> |
| (2) | Local taxes shall be reduced or exempted until December 31, 2025 on a local government-invested public corporation incorporated pursuant to Article 49 of the Local Public Enterprises Act (hereafter in this Article referred to as "local agricultural and marine products corporation") to facilitate distributing agricultural and marine products and to maintain reasonable prices, as prescribed in the following: <Amended on Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired by a local agricultural and marine products corporation to use directly for managing wholesale markets and carrying out distribution business for agricultural and marine projects shall be reduced by an amount calculated by multiplying 100/100 (where a municipal ordinance proscribes otherwise within 100/100, such rate shall apply ) of acquisition tax by the proportion of investment made by local government prescribed by Presidential Decree (hereafter in this Article, referred to as “proportion of investment made by local governments”), or exempted; |
| 2. | Deleted; <Mar. 14, 2023> |
| 3. | Property tax on real estate used directly by a local agricultural and marine projects corporation for managing wholesale markets and carrying out distribution business as at the tax base date shall be reduced by an amount calculated by multiplying 100/100 (where a municipal ordinance prescribes otherwise within 100/100, such rate shall apply) of property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) by the proportion of investment made by the local government, or exempted. |
[Title Amended on Jul. 25, 2011]
| Article 16 (Reduction or Exemption for Improvement of Housing in Agricultural and Fishing Villages) |
| (1) | Acquisition tax shall be reduced or exempted until December 31, 2024, as determined according to the following subparagraphs, on a residential building with the total floor area of not exceeding 150 square meters (where such building is acquired by extending an existing building, such building is limited to cases where the total area aggregated with the total floor area of the residential building already owned does not exceed 150 square meters; hereafter in this Article, the same shall apply), acquired by a person who is subject to housing improvement in accordance with a plan for a project prescribed by Presidential Decree, for the purpose that such person and such person's family can reside in such building at all times (referring to cases where such person continues to reside in such building after filing a move-in report under the Resident Registration Act) in accordance with the improvement plan for housing: Provided, That in cases of acquiring a residential building in accordance with an improvement plan for housing within an over-concentration limitation zone, it shall be limited to a person who is proved by a resident registration card, etc. under the Resident Registration Act that he or she has been residing continuously in the relevant Si/Gun/Gu as at the date of acquisition; <Amended on Dec. 28, 2021> |
| 1. | Where the amount of acquisition tax does not exceed 2.8 million won: Exemption of the total tax amount; |
| 2. | Where the amount of acquisition tax exceeds 2.8 million won: Deduction of 2.8 million won. |
| (2) | For the purposes of paragraph (1), the reduced or exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| 1. | Where the relevant person fails to commence residing at all times in the relevant house until three months pass from the date of acquisition without just ground; |
| 2. | Where the relevant person fails to reside at all times in the relevant house before two years pass from the date he or she has commenced to reside in the relevant house at all times; |
| 3. | Where the relevant person sells, donates, or uses the relevant house for any other purpose (including lease) after he or she continues to reside in the relevant house for less than two years. |
[This Article Wholly Amended on Dec. 24, 2018]
SECTION 2 Support for Social Welfare
| Article 17 (Reduction or Exemption for Motor Vehicles for Persons with Disabilities) |
| (1) | Acquisition tax and motor vehicle tax on only one motor vehicle falling under any of the following subparagraphs shall be exempted, respectively, until December 31, 2024, if such vehicle is acquired and registered by a person with a disability prescribed by Presidential Decree (excluding persons of distinguished service to the State, etc. referred to in Article 29 (4); hereafter in this Article, referred to as "person with a disability") to use for prosthesis or occupational activities and if an application to reduce or exempt acquisition tax, or motor vehicle tax prescribed in Article 125 (1) of the Local Tax Act (hereinafter referred to as "motor vehicle tax"), on such vehicle, is filed first: <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Any of the following passenger motor vehicles: |
| (a) | Passenger motor vehicle with an engine displacement not exceeding 2,000 cubic centimeters; |
| (b) | Passenger motor vehicle prescribed by Presidential Decree with a seating capacity between seven and ten passengers. In such cases, the seating capacity of a passenger motor vehicle, the structure of which has been altered in accordance with the Motor Vehicle Management Act, for the convenience of mobility of a person with a disability, shall be based on the seating capacity before the structure is altered; |
| (c) | Motor vehicle reclassified from a cargo motor vehicle to a passenger motor vehicle as of January 1, 2006 under the Motor Vehicle Management Act (excluding a motor vehicle classified as a passenger motor vehicle since before December 31, 2005); |
| 2. | Van with a seating capacity not more than 15 passengers; |
| 3. | Cargo motor vehicle with a load capacity not exceeding one ton; |
| 4. | Two-wheeled motor vehicle with an engine displacement not exceeding 250 cubic centimeters. |
| (2) | Where a person with a disability acquires a substitute motor vehicle as prescribed by Presidential Decree, acquisition tax and motor vehicle tax on the relevant motor vehicle shall be exempted as prescribed in paragraph (1). <Newly Inserted on Dec. 27, 2016; Dec. 24, 2018> |
| (3) | For the purposes of paragraphs (1) and (2), where a person with a disability or a person jointly registered with a person with a disability transfers ownership without just grounds, such as death, marriage, emigration, cancellation of a driving license, or other reasons similar thereto, or separate himself or herself from his or her original household to be registered as a member of another household within one year from the date a motor vehicle is registered, the exempted portion of acquisition tax shall be collected as a penalty: Provided, That excluded herefrom shall be where the ownership of a person eligible to be jointly registered with a person with a disability has been transferred to the person with a disability; where a person eligible to be jointly registered with a person with a disability has obtained a share of the ownership of the person with a disability; or where the registration of ownership has been exchanged between persons eligible to be jointly registered. <Amended on Dec. 27, 2016> |
| Article 17-2 (Reduction or Exemption for Supporting Persons Affected by Hansen's Disease and Their Farming Settlements) |
| (1) | Where a person affected by Hansen's disease or a person who had been affected by Hansen's disease and has since been completely healed (hereafter in this Article, referred to as "person affected by Hansen's disease") acquires any of the following real estate within an area prescribed by Presidential Decree, taking the purpose of residence, residential types, etc. into consideration, among the areas where persons affected by Hansen's disease settle and reside collectively for treatment, rehabilitation, self-support, etc. (hereafter in this Article, referred to as "farming settlement of persons affected by Hansen's disease"), acquisition tax on such real estate shall be exempted until December 31, 2024: <Amended on Jan. 1, 2014Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | A house (limited to those with an exclusive use area not exceeding 85 square meters); |
| 2. | Real estate for cattle shed; |
| 3. | Real estate to be used directly for rehabilitation projects for persons affected by Hansen's disease (limited to where such real estate is acquired by the representative of a farming settlement of persons affected by Hansen's disease or by a person affected by Hansen's disease). |
| (2) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (2) of the Local Tax Act shall be exempted until December 31, 2024, respectively, on real estate within a farming settlement of persons affected by Hansen's disease (referring to real estate prescribed in each subparagraph of paragraph (1)) owned by a person affected by Hansen's disease as at the tax base date. <Amended on Jan. 1, 2014; Dec. 29, 2015; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021> |
[This Article Newly Inserted on Dec. 31, 2011]
| Article 18 (Reduction or Exemption for the Korea Employment Agency for Disabled) |
Acquisition tax shall be reduced by 25/100 until December 31, 2025, on real estate (excluding real estate for profit-making business) acquired by the Korea Employment Agency for the Disabled, under the Act on the Employment Promotion and Vocational Rehabilitation of Persons with Disabilities, to use directly for the projects prescribed in Article 43 (2) 1 through 11 of the same Act; and property tax shall be reduced by 25/100 until December 31, 2019, on real estate used directly for such projects as at the tax base date, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023>
| Article 19 (Reduction or Exemption for Child Care Centers and Kindergartens) |
| (1) | Acquisition tax shall be exempted until December 31, 2024 on real estate acquired to use directly for a child care center prescribed in the Infant Care Act or a kindergarten prescribed in the Early Childhood Education Act (hereafter in this Article, referred to as "kindergarten, etc."); and acquisition tax shall be reduced by 50/100 until December 31, 2024 on real estate acquired by a business owner who shall establish a workplace childcare center under Article 14 of the Child Care Act to entrust the operation of the workplace childcare center to a corporation, organization or individual under Article 24 (3) of that Act. <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| (2) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) shall be exempted until December 31, 2024 on the following real estate: <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Real estate used directly by the owner thereof for a kindergarten, etc. as at the tax base date; |
| 2. | Real estate used for kindergarten, etc. as at the tax base date, which is prescribed by Presidential Decree, based upon the relationship, etc. between the owner and the user of the relevant real estate. |
[This Article Wholly Amended on Dec. 31, 2011]
[Title Amended on Dec. 29, 2015]
| Article 19-2 (Reduction or Exemption for Welfare Facilities for Children) |
Acquisition tax on real estate acquired to establish and operate a regional center for children under Article 52 (1) 8 of the Child Welfare Act and property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) on real estate used directly for a regional center for children as at the tax base date shall be exempted until December 31, 2023, respectively. <Amended on Dec. 29, 2020> [This Article Newly Inserted on Dec. 26, 2017]
| Article 20 (Reduction or Exemption for Welfare Facilities for Elderly Persons) |
Local taxes shall be reduced or exempted until December 31, 2023 as follows, on real estate acquired to establish and operate a welfare facility for elderly persons under Article 31 of the Welfare of Older Persons Act: <Amended on Jan. 1, 2014; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Jan. 15, 2020; Dec. 29, 2020> | 1. | Acquisition tax shall be exempted on real estate acquired to use for a free welfare facility for elderly persons prescribed by Presidential Decree; and property tax shall be reduced by 50/100 on real estate used directly for welfare facilities for elderly persons (in cases of a religious organization, including where the representative thereof or a religious corporation that is not the owner of the relevant real estate, uses the relevant real estate for welfare facilities for elderly persons; hereafter in this Article, the same shall apply) as at the tax base date: Provided, That where real estate (including appurtenant facilities) is used for a social gathering hall for elderly persons for pastimes as at the tax base date, property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (3) of the same Act on such real estate shall be exempted, respectively; |
| 2. | Acquisition tax shall be reduced by 25/100 on real estate acquired to use for a welfare facility for elderly persons other than those referred to in subparagraph 1; and property tax shall be reduced by 25/100 on real estate used directly for a welfare facility for elderly persons other than those referred to in subparagraph 1 as at the tax base date. |
| Article 21 (Reduction or Exemption for Youth Organizations) |
| (1) | Acquisition tax shall be reduced by 75/100 until December 31, 2023 on real estate acquired by any of the following corporations or organizations to use directly for its unique duties, and property tax shall be exempted until December 31, 2023 on real estate used directly for its unique duties as at the tax base date: <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020; Mar. 14, 2023> |
| 3. | Sea Explorers of Korea, prescribed in the Act on the Support for Sea Explorers of Korea; |
| 4. | Youth organizations prescribed by Presidential Decree, similar to those prescribed in subparagraphs 1 through 3. |
| (2) | Acquisition tax shall be exempted until December 31, 2023 on real estate acquired by a nonprofit corporation permitted to establish a youth training facility prescribed in the Juvenile Activity Promotion Act; and property tax shall be reduced by 50/100 until December 31, 2023 on real estate used directly for such facility as at the tax base date. <Amended on Jan. 21, 2014; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020> |
| Article 22 (Reduction or Exemption for Social Welfare Corporations) |
| (1) | Acquisition tax shall be reduced or exempted until December 31, 2025 on real estate acquired by a corporation or organization established to implement social welfare programs under the Social Welfare Services Act (hereafter in this Article, referred to as “social welfare programs”), as prescribed in the following: <Amended on Mar. 14, 2023> |
| 1. | Acquisition tax shall be exempted on corporations and organizations prescribed by Presidential Decree as a social welfare corporation under the Social Welfare Services Act (hereafter in this Article, referred to as “social welfare corporations”) or a corporation or organization established for the purpose of promoting and improving rights and interests of persons affected by Hansen’s Disease; |
| 2. | Acquisition tax shall be reduced by 25/100 on corporations and organizations prescribed by Presidential Decree as a corporation or organization establishing and operating social welfare facilities under the Social Welfare Services Act (hereafter in this Article, referred to as “social welfare facilities”): Provided, That acquisition tax shall be exempted on social welfare facilities where inmates and users of social welfare facilities do not bear expenses for admission and use. |
| (2) | Where a corporation or organization subject to the reduction or exemption of acquisition tax pursuant to paragraph (1) falls under any of the following subparagraphs, the reduced portion of acquisition tax shall be collected as a penalty: <Newly Inserted on Mar. 14, 2023> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used directly for the relevant purpose without just grounds within three years from the date of acquisition; |
| 3. | Where such real estate is sold, donated, or used for any other purpose, after having been used for the relevant purpose for less than two years. |
| (3) | Real estate (including land appurtenant to a building prescribed by Presidential Decree) used by a corporation or organization falling under the subparagraphs of paragraph (1) (hereafter in this Article, referred to as “social welfare corporation, etc.”) directly for the relevant social welfare programs (in cases of a religious organization, including cases where the representative thereof or a religious corporation that is not the owner of the relevant real estate uses the relevant real estate for social welfare programs; hereafter in this Article, the same shall apply) as at the tax base date shall be reduced or exempted from property tax, respectively, as prescribed in the following subparagraphs: Provided, That where such property is used commercially, or a fee is charged for the use thereof; or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof shall be exempted.<Amended on Dec. 31, 2011; Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2014; Dec. 29, 2015; Jan. 15, 2020; Mar. 14, 2023> |
| 2. | Property tax shall be reduced by 50/100 on a corporation or organization falling under paragraph (1) 2: Provided, That in cases of social welfare facilities where inmates and users of the social welfare facilities do not bear expenses for admission and use thereof, property tax shall be reduced by 50/100. |
| (4) | When reducing or exempting acquisition tax or property tax pursuant to paragraph (1) or (3), the head of a local government may additionally reduce such tax by the rate prescribed by municipal ordinance within the scope of 50/100, taking into account the financial status of the relevant region. <Newly Inserted on Mar. 14, 2023> |
| (5) | A license to be used by a social welfare corporation, etc. directly for the social welfare programs shall be exempted from registration license tax until December 31, 2025 and the social welfare corporation, etc. (including corporations and organizations prescribed by Presidential Decree among the corporations and organization establishing and operating institutions providing activity assistant services under the Act on Activity Assistant Services for Persons with Disabilities) shall be exempted from the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act; hereafter in this paragraph, the same shall apply) and pro rata employee portion of resident tax until December 31, 2025: Provided, That the pro rata business place portion and the pro rata employee portion of resident tax prescribed by Presidential Decree, which are related to profit-making business shall not be exempted: <Amended on Dec. 31, 2011; Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (6) | Where generated electricity, etc. is supplied to a social welfare corporation, etc. gratuitously, the portion of such electricity, etc. shall be exempted from local resource and facility tax prescribed in Article 146 (1) or (2) of the Local Tax Act until December 31, 2019. <Amended on Dec. 31, 2011Jan. 1, 2013; Dec. 31, 2014; Jan .15, 2020; Mar. 14, 2023> |
| (7) | The registration for establishment and the registration of merger of social welfare corporations shall be exempted from registration license tax; and the place of business of the relevant social welfare facility managed by a person who operates a social welfare facility under the same Act shall be exempted from the pro rata business place portion (limited to the tax amount imposed pursuant to Article 81 (1) 1 of the Local Tax Act) of resident tax, respectively until December 31, 2025. <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (8) | Notwithstanding paragraphs (1) through (7), acquisition tax and property tax on real estate purchased or used by a social welfare corporation to operate a medical institution shall be reduced, respectively, as follows: <Newly Inserted on Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2014; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired to use directly for medical services shall be reduced by 30/100 [40/100 in cases of specialized hospitals for infectious diseases designated under Article 8-2 of the Infectious Disease Control and Prevention Act (hereinafter referred to as “specialized hospitals for infectious diseases”)] until December 31, 2024; |
| 2. | Property tax on real estate used directly for medical services as at the tax base shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases) until December 31, 2024; |
| 3. | Deleted. <Dec. 28, 2021> |
[Title Amended on Dec. 31, 2011]
| Article 22-2 (Reduction or Exemption for Support for Childbirth and Parenting) |
| (1) | Where a person who raises at least three children (hereafter in this Article, referred to as "person raising several children") under 18 years of age (based on the record in the family relation register; adopted children and the spouse's children shall be included, but adopted children shall be excluded from the number of children of biological parents) acquires and registers any of the following motor vehicles (motor vehicle classification shall be governed by Article 3 of the Motor Vehicle Management Act) until December 31, 2024 for the purpose of raising children, acquisition tax on a motor vehicle shall be exempted for one motor vehicle for which an application for reduction or exemption is filed first, but acquisition tax of less than 1,400,000 won calculated under Article 12 (1) 2 of the Local Tax Act on a motor vehicle falling under subparagraph 1 (b) shall be exempted; and where acquisition tax exceeds 1,400,000 won, 1,400,000 won shall be deduced: Provided, That this shall not apply where at least one person among the persons raising several children owns any motor vehicle for which acquisition tax is reduced or exempted previously or where the joint registration with a person, other than his or her spouse and children (in cases of the joint registration with children, limited to the cases falling under paragraph (2) 3) has been made: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Any of the following passenger motor vehicles: |
| (a) | Passenger motor vehicle with a seating capacity between seven and ten passengers; |
| (b) | Passenger motor vehicle, other than that prescribed in item (a); |
| 2. | Van with a seating capacity not exceeding 15 passengers; |
| 3. | Cargo motor vehicle with a load capacity not exceeding one ton; |
| 4. | Two-wheeled motor vehicle with an engine displacement not exceeding 250 cubic centimeters. |
| (2) | Where a person raising several children registers a motor vehicle falling under any subparagraph of paragraph (1) by not later than December 31, 2024 after acquiring such motor vehicle by any of the following methods, acquisition tax on the relevant motor vehicle shall be reduced or exempted as prescribed in paragraph (1): <Amended on Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Where the person registers a motor vehicle after acquiring the motor vehicle by substitution, as prescribed by Presidential Decree; |
| 2. | Where a person raising several children transfers and registers the ownership of a motor vehicle, with acquisition tax reduced or exempted, to his or her spouse; |
| 3. | Where the spouse and children of a person raising several children register the ownership of a motor vehicle, with acquisition tax reduced or exempted, after being transferred from the person raising several children in accordance with the statutory share of inheritance under Article 1009 of the Civil Act due to the death of such person. |
| (3) | Where the ownership of a motor vehicle, with acquisition tax reduced or exempted pursuant to paragraphs (1) and (2), is transferred without just grounds, such as death, marriage, emigration, cancellation of a driving license, or other reasons similar thereto, within one year from the date the motor vehicle is registered, the reduced or exempted portion of acquisition tax shall be collected as a penalty: Provided, That no reduced or exempted portion of acquisition tax shall be collected as a penalty, where a person raising several children for whom acquisition tax is reduced or exempted pursuant to the main sentence of paragraph (1), transfers the ownership of the relevant motor vehicle to his/her spouse. <Amended on Dec. 27, 2016> |
| (4) | Where a motor vehicle falls under any of the following cases with the acquisition tax reduced or exempted pursuant to paragraphs (1) and (2), the owner shall be deemed not to own the motor vehicle and the provisions of acquisition tax reduction or exemption under paragraphs (1) and (2) shall apply regardless of whether such motor vehicle is registered in the owner's name: <Amended on Dec. 27, 2016> |
| 1. | Motor vehicle, the sale of which is verified as having been mediated as a used motor vehicle by a motor vehicle dealer under the Motor Vehicle Management Act (excluding a used vehicle which is returned to the owner without being sold); |
| 2. | Motor vehicle that the Special Self-Governing City Mayor, Special Self-Governing Province Governor, or the head of a Si/Gun/Gu (referring to the head of an autonomous Gu in cases of the head of a Gu; hereinafter referred to as "head of a Si/Gun") deems irretrievable or unusable because the relevant motor vehicle ceases to exist or has been destroyed or damaged due to a natural disaster, fire, traffic accident, etc.; |
| 3. | Motor vehicle that a motor vehicle scrapper prescribed by the Motor Vehicle Management Act certifies that the motor vehicle has been scrapped; |
| 4. | Motor vehicle, declared as exported, to the head of a customs house under the Customs Act and has been exported. |
[This Article Newly Inserted on Dec. 27, 2010]
| Article 22-3 (Exemption for Microfinance Foundation) |
Registration license tax shall be exempted until December 31, 2016, on the registration to incorporate (including registration to increase total investment or total property) the Microfinance Foundation [including a business execution organization established with permission from the Financial Services Commission only to perform support business for the financial livelihoods of ordinary people defined in subparagraph 5 of Article 2 of the Microfinance Support Act after August 1, 2008, among business execution organizations (limited to those prescribed by Presidential Decree) defined in subparagraph 6 of Article 2 of the same Act] established pursuant to the Microfinance Support Act. <Amended on Dec. 31, 2014Dec. 29, 2015; Mar. 22, 2016> [This Article Newly Inserted on Dec. 27, 2010]
| Article 22-4 (Reduction or Exemption for Social Enterprises) |
| 1. | Acquisition tax shall be reduced by 50/100 on real estate acquired to use directly for its unique duties: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| (b) | Where such real estate is not used directly for the relevant purposes without just grounds, within one year from the date of acquisition; |
| (c) | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years; |
| 2. | Deleted; <Dec. 28, 2021> |
| 3. | Property tax shall be reduced by 25/100 on real estate used directly for its unique duties as at the tax base date. |
[This Article Newly Inserted on Dec. 31, 2011]
| Article 23 (Reduction or Exemption to Increase Rights and Interests) |
| (1) | Acquisition tax shall be reduced by 25/100 on real estate acquired by a legal aid corporation prescribed in the Legal Aid Act, to use directly for its unique duties; and property tax shall be reduced by 25/100 on real estate used directly for its unique duties as at the tax base date, until December 31, 2025, respectively. |
| (2) | Acquisition tax shall be reduced by 25/100 on real estate acquired by the Korea Consumer Agency referred to in the Framework Act on Consumers, to use directly for its unique duties, and property tax shall be reduced by 25/100 on real estate used directly for its unique duties as at the tax base date, until December 31, 2025, respectively. |
[This Article Wholly Amended on Mar. 14, 2023]
| Article 24 (Reduction or Exemption for the National Pension Service) |
| (1) | Local taxes shall be reduced or exempted until December 31, 2014, as follows, on real estate acquired by the National Pension Service under the National Pension Act, to use directly for the duties prescribed in Article 25 of the same Act: <Amended on Jan. 1, 2013> |
| 2. | Acquisition tax and property tax shall be reduced by 50/100 on real estate for other national pension services entrusted pursuant to subparagraph 7 of Article 25 of the National Pension Act. |
| (2) | Local taxes shall be reduced or exempted until December 31, 2014, as follows, on real estate acquired by the Government Employees Pension Service under the Public Officials Pension Act, to use directly for services prescribed in Article 17 of the same Act: <Amended on Jan. 1, 2013; Mar. 20, 2018> |
| Article 25 (Reduction or Exemption for Workers' Welfare) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2014, on real estate acquired by any of the following corporations, to construct multi-family housing for its members prescribed by Presidential Decree: <Amended on Jan. 1, 2013> |
| 3. | Public Officials Benefit Association established pursuant to the Public Officials Benefit Association Act; |
| (2) | Registration to incorporate a corporation for a fund and registration to modify a corporation for a fund under the Framework Act on Labor Welfare shall be exempted from registration license tax until December 31, 2016. <Amended on Jun. 8, 2010; Jan. 1, 2013; Dec. 29, 2015> |
| Article 26 (Reduction or Exemption for Trade Unions) |
Real estate (excluding real estate for profit-making business; hereafter in this Article, the same shall apply) acquired by a trade union established pursuant to the Trade Union and Labor Relations Adjustment Act, to use directly for its unique duties, shall be exempted from acquisition tax; and real estate used directly for its unique duties as at the tax base date shall be exempted from property tax until December 31, 2024, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015Dec. 24, 2018; Dec. 28, 2021>
| Article 27 (Reduction or Exemption for Support for Korea Workers' Compensation and Welfare Service) |
| (2) | Acquisition tax on real estate acquired by the Korea Workers' Compensation and Welfare Service to use directly for medical business and rehabilitation business prescribed in Article 11 (1) 5-2 and 5-3 and Article 11 (2) of the Industrial Accident Compensation Insurance Act, and property tax on real estate used directly for such duties as at the tax base date, shall be reduced respectively as follows: <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax and property tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases), respectively, until December 31, 2024; |
| 2. | Deleted. <Dec. 28, 2021> |
| Article 28 (Reduction or Exemption for Support for Industrial Human Resources) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2014, on land (limited to that less than ten times the projected horizontal area of a building) and a building acquired to use directly for a vocational skill training facility (including a lodging facility; hereafter in this paragraph, the same shall apply) under the National Lifelong Vocational Skills Development Act; and property tax shall be exempted until December 31, 2014, on real estate used directly for a vocational skill training facility as at the tax base date. <Amended on Jan. 1, 2013; Aug. 17, 2021> |
| (2) | Acquisition tax shall be reduced by 25/100 on real estate acquired by the Korea Occupational Safety and Health Agency established pursuant to the Korea Occupational Safety and Health Agency Act, to use directly for projects prescribed in subparagraphs 2 and 6 of Article 6 of that Act; and property tax shall be reduced by 25/100 on real estate used directly for projects as at the tax base date, until December 31, 2025, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (3) | Acquisition tax shall be reduced by 25/100 on real estate acquired by the Human Resources Development Service of Korea established pursuant to the Human Resources Development Service of Koare Act, to use directly for projects prescribed in subparagraph 1 of Article 6 of that Act until December 31, 2025. <Newly Inserted on Jan. 15, 2020; Mar. 14, 2023> |
| Article 29 (Reduction or Exemption for Persons of Distinguished Service to State) |
| (1) | Acquisition tax shall be exempted until December 31, 2023, on the following real estate acquired by a person who receives loans (including where loans are received within 60 days from the date the real estate is acquired) under the Act on the Honorable Treatment of and Support for Persons of Distinguished Service to the State; the Act on Support for Persons Eligible for Veteran's Compensation; the Act on the Honorable Treatment of Persons of Distinguished Service to the May 18 Democratization Movement and Establishment of Related Organizations; or the Act on Honorable Treatment of Persons of Distinguished Service during Special Military Missions and Establishment of Related Organizations: <Amended on Aug. 4, 2011; Sep. 15, 2011; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020; Jan. 5, 2021> |
| 1. | A house (including the portion exceeding a loan) with an area for exclusive use not exceeding 85 square meters; |
| 2. | Real estate (excluding the portion exceeding a loan), other than that prescribed in subparagraph 1. |
| (2) | Organizations specified under subparagraph 1 shall be exempt from local taxes specified under subparagraph 2 until December 31, 2023: <Amended on Dec. 31, 2011; Jan. 1, 2014; Dec. 31, 2014; Dec. 22, 2015; Dec. 26, 2017; Jan. 15, 2020; Dec. 29, 2020> |
| 1. | Organizations to be granted exemption: |
| (a) | The Korea Disabled Veterans Association; the Korea War Veterans' Bereaved Family Association; the Korea Veterans' Wives Association; the Korea Liberation Association; the April Revolution Association; the April Revolution Victims' Bereaved Family Association; the Persons of Distinguished Service to April Revolution Association; the Association of Student Volunteer Army from Residents in Japan; or the Korea Association of Persons of Distinguished Service established pursuant to the Act on the Establishment of Associations by Persons of Distinguished Service to the State; |
| 2. | Subject-matter of exemption: |
| (a) | Acquisition tax on real estate acquired to use directly for its unique duties; |
| (b) | Registration license tax on a license to use directly for its unique duties; |
| (d) | The pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) and pro rata employee portion of resident tax on the relevant organization. |
| (3) | Acquisition tax, property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act), and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act shall be exempted until December 31, 2023, respectively, on real estate acquired and owned by seriously-injured persons classified as Grade 1 in the wound classification table as prescribed by Presidential Decree and residing in the self-support villages of persons of distinguished service to the State designated by the Minister of Patriots and Veterans Affairs; their bereaved families; or organizations consisting of such seriously-injured persons and bereaved families. <Amended on Dec. 31, 2014; Dec. 26, 2017; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (4) | Acquisition tax and motor vehicle tax shall be exempted until December 31, 2024, respectively, on only one motor vehicle falling under any of the following subparagraphs, if such vehicle is acquired and registered (including where any of such vehicles is acquired by substitution as prescribed by Presidential Decree) by a person who has rendered distinguished service to the State referred to in the Act on the Honorable Treatment of and Support for Persons of Distinguished Service to the State and been classified as any of Grades 1 through 7 in the wound classification table or by any other person prescribed by Presidential Decree (hereinafter referred to as "person who has rendered distinguished service to the State, etc."), to use for prosthesis or occupational activities, and if an application to reduce or exempt acquisition tax or motor vehicle tax on such vehicle, is first filed: Provided, That where acquisition tax or motor vehicle tax reduction or exemption is granted for a motor vehicle for a person with a disability pursuant to Article 17 shall be excluded herefrom: <Newly Inserted on Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Any of the following passenger motor vehicles: |
| (a) | Passenger motor vehicle with an engine displacement not exceeding 2,000 cubic centimeters; |
| (b) | Passenger motor vehicle prescribed by Presidential Decree with a seating capacity between seven and ten passengers; |
| (c) | Motor vehicle reclassified from a cargo motor vehicle to a passenger motor vehicle as of January 1, 2006 under the Motor Vehicle Management Act (excluding a motor vehicle classified as a passenger motor vehicle since before December 31, 2005); |
| 2. | Van with a seating capacity not exceeding 15 passengers; |
| 3. | Cargo motor vehicle with a load capacity not exceeding one ton; |
| 4. | Two-wheeled motor vehicle with an engine displacement not exceeding 250 cubic centimeters. |
| (5) | For the purposes of paragraph (4), where a person who has rendered distinguished service to the State, etc. or a person jointly registered with a person who has rendered distinguished service to the State, etc. transfers ownership without just grounds, such as death, marriage, emigration, cancellation of a driving license, or grounds similar thereto, or establishes a branch family within one year from the date of registration of a motor vehicle, the exempted portion of acquisition tax shall be collected as a penalty: Provided, That this shall not apply where the ownership of a person eligible to be jointly registered with a person who has rendered distinguished service to the State, etc. has been transferred to the person who has rendered distinguished service to the State, etc.; where a person eligible to be jointly registered with a person who has rendered distinguished service to the State, etc. has obtained a share of the ownership of the person who has rendered distinguished service to the State, etc.; or where the registration of ownership has been exchanged between persons eligible to be jointly registered. <Newly Inserted on Dec. 29, 2015> |
| Article 30 (Reduction or Exemption for the Korea Veterans Health Service) |
| (1) | Acquisition tax shall be reduced by 25/100 on real estate acquired by the Korea Veterans Health Service established pursuant to the Korea Veterans Health Service Act to use directly for projects prescribed in subparagraphs 2 through 9 of Article 6 of the same Act; and property tax shall be reduced by 25/100 on real estate used directly for the relevant projects as at the tax base date, until December 31, 2025, respectively. <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (2) | Acquisition tax on real estate acquired by veterans hospitals prescribed in Article 7 (1) of the Korea Veterans Health Service Act to use directly for medical profession and property tax on real estate used directly for the relevant business as at the tax base date shall be reduced, respectively, as follows: <Amended on Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax and property tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases) until December 31, 2024, respectively; |
| 2. | Deleted. <Dec. 28, 2021> |
| (3) | Acquisition tax on real estate acquired by the Independence Hall of Korea established pursuant to the Independence Hall of Korea Act, to use directly for the duties prescribed in Article 6 (1) of the same Act; property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) on real estate (excluding the portion used for any other purpose where the relevant real estate is used for any other purpose simultaneously) used directly for the relevant duties as at the tax base date; and the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) of resident tax on the relevant corporation, shall be exempted, respectively, until December 31, 2021. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021> |
| Article 31 (Reduction or Exemption for Rental Housing) |
| (1) | Where a public housing unit business operator under the Special Act on Pubic Housing or a rental business entity under the Special Act on Private Rental Housing [referring to where a person is registered as a rental business entity with the relevant real estate for rent as the object of rent {excluding cases where they are buy-to-rent housing leased out apartments among long-term private rental housing defined in subparagraph 5 of Article 2 of the Special Act on Private Rental Housing (hereafter in this Article, referred to as “long-term private rental housing”) whose registration of rental business entity is filed pursuant to Article 5 of that Act (referring to the Act before being amended by Act No. 17482) on or after July 11, 2020 or short-term private rental housing defined in subparagraph 6 of Article 2 of that Act (hereafter in this Article, referred to as “short-term private rental housing”) or cases where short-term private rental housing which is registered pursuant to Article 5 of Act is changed and reported as publicly-funded private rental housing defined in subparagraph 4 of Article 2 of that Act or long-term private rental housing pursuant to Article 5 (3) of that Act on or after July 11, 2020} within 60 days from the date of acquisition of real estate for rent, but in cases of land, including cases where a person is registered as a rental business entity with the relevant real estate for rent as the object of rent within one year and six months from the date of acquisition of the land, which is within 60 days from the date on which the project plan is approved pursuant to Article 15 of the Housing Act or the building permission is granted pursuant to Article 11 of the Building Act; hereafter in this Article, referred to as “rental business entity”] constructs multi-family housing (including facilities appurtenant thereto and welfare facilities for rent of which the total amount of rental income arising therefrom is appropriated to cover management expenses for houses for rent; hereafter in this Article, the same shall apply) for rental purposes, local taxes on such multi-family housing shall be reduced until December 31, 2024 as specified in the following: Provided, That where the construction of multi-family housing does not commence without just grounds, within two years from the date of acquisition of land, such cases shall be excluded: <Amended on Dec. 31, 2011; Mar. 21, 2012; Jan. 1, 2013; Jul. 24, 2015; Aug. 28, 2015; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Aug. 12, 2020; Dec. 29, 2020; Dec. 28, 2021> |
| 1. | Where a unit of the multi-family housing with an area for exclusive use not exceeding 60 square meters, is acquired, acquisition tax shall be exempted; |
| 2. | Where at least 20 units of housing for lease (hereafter in this Article, referred to as "house for long-term lease") with an area for exclusive use between 60 and 85 square meters, are acquired for lease for at least 10 years under the Special Act on Private Rental Housing or the Special Act on Public Housing, or a rental business entity who holds at least 20 units of housing for long-term lease, additionally acquires houses for long-term lease (where he or she becomes a holder of at least 20 units of housing for long-term lease through additional acquisition, including the excess units of housing beginning from the 20th unit), acquisition tax shall be reduced by 50/100. |
| (2) | Where a rental business entity first purchases multi-family housing or officetel (including land appurtenant thereto; hereafter in this Article referred to as “officetel”) among quasi-housing defined in subparagraph 1 of Article 2 of the Special Act on Private Rental Housing from the building owner for rent, local taxes shall be reduced or exempted until December 31, 2024, as prescribed in the following subparagraphs: Provided, That where the value as at the time of acquisition under Article 10-3 of the Local Tax Act exceeds 300 million won (600 million won in cases of the Seoul metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act), it shall be excluded from the reduction or exemption: <Newly Inserted on Aug. 12, 2020; Dec. 28, 2021> |
| 1. | Where a unit of the multi-family housing or officetel with an area for exclusive use not exceeding 60 square meters, is acquired, acquisition tax shall be exempted; |
| 2. | Where at least 20 units of housing for long-term lease are acquired for lease, or a rental business entity who holds at least 20 units of housing for long-term lease, additionally acquires houses for long-term lease (where he or she becomes a holder of at least 20 units of housing for long-term lease through additional acquisition, including the excess units of housing beginning from the 20th unit), acquisition tax shall be reduced by 50/100. |
| 1. | Where it is used or sold or donated for any other purpose than for lease; |
| (4) | Where a rental business entity, etc. prescribed by Presidential Decree directly uses at least two units of multi-family housing or officetels [excluding cases where they are buy-to-rent housing leased out apartments or short-term private rental housing among long-term private rental housing whose registration of rental business entity is filed (including the report of change of registered matters to add houses to be rented) under Article 5 of the Special Act on Private Rental Housing (referring to the Act before being amended by Act No. 17482) on or after July 11, 2020 or cases where short-term private rental housing registered pursuant to Article 5 of that Act is changed and reported as publicly-funded private rental housing or long-term rental housing on or after July 11, 2020] for lease as at the tax base date in the Republic of Korea, as prescribed by Presidential Decree, property tax shall be reduced or exempted until December 31, 2024 as follows: Provided, That multi-family housing whose value publicly announced pursuant to Article 4 (1) of the Local Tax Act or calculated by the head of a Si or Gun exceeds 300 million won (600 million won in cases of Seoul metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act and officetels whose assessed value under Article 4 of the Local Tax Act exceeds 200 million won (400 million won in cases of Seoul metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act) shall be excluded from reduction or exemption: <Amended on Dec. 27, 2010; Mar. 21, 2012; Jan. 1, 2013; Aug. 28, 2015; Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018; Aug. 12, 2020; Dec. 28, 2021; Mar. 14, 2023> |
| 2. | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) shall be reduced by 50/100 on multi-family housing (excluding multi-family housing under paragraph 1) or officetel for lease with an area for exclusive use not exceeding 60 square meters; |
| 3. | Property tax shall be reduced by 25/100 on multi-family housing or officetel for lease with an area for exclusive use between 60 and 85 square meters. |
| (5) | For the purposes of paragraph (4), where the registration of a rental business entity is cancelled pursuant to Article 6 of the Special Act on Private Rental Housing or multi-family housing or officetel for lease is sold or donated during the mandatory rental period under Article 43 (1) of that Act or Article 50-2 (1) of the Special Act on Public Housing, the reduced or exempted portion of property tax for a period within five years retrospectively from the extinction date of the ground for reduction or exemption thereof, shall be collected as a penalty: Provided, That any of the following cases shall be excluded from collection as a penalty. <Newly Inserted on Dec. 24, 2018; Jan. 15, 2020; Aug. 12, 2020; Dec. 28, 2021> |
| 2. | Other cases prescribed by Presidential Decree. |
| (6) | Acquisition tax and property tax shall be reduced by 25/100 and 50/100, respectively, until December 31, 2024, respectively, on a house or building prescribed by Presidential Decree, which have been purchased and supplied pursuant to Article 43 (1) of the Special Act on Public Housing by the Korea Land and Housing Corporation incorporated pursuant to the Korea Land and Housing Corporation Act (hereinafter referred to as the “Korea Land and Housing Corporation”): Provided, That the reduced portion of acquisition tax and property tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010Dec. 31, 2011; Jan. 1, 2013; Jan. 14, 2014; Dec. 31, 2014; Aug. 28, 2015; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Aug. 12, 2020; Dec. 28, 2021> |
| 1. | Where such house is not used directly for the relevant purposes without just grounds, within one year from the date of purchase; |
| 2. | Where such house is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (7) | Houses or buildings subject to reduction or exemption of property tax under paragraph 6 shall include the houses or buildings that are newly built and supplied by the Korea Land and Housing Corporation after changing or demolishing the number of units or structure, etc. by purchasing them pursuant to Article 43 (1) of the Special Act on Public Housing. <Newly Inserted on Dec. 28, 2021> |
| Article 31-2 (Reduction or Exemption for Unsold Housing Units after Completion of Construction) |
| (1) | Where a house meeting each of the following requirements sold by a business entity prescribed in Article 54 (1) of the Housing Act (hereafter in this Article, referred to as "unsold housing unit after completion of construction"), is acquired by a first-time buyer by not later than December 31, 2016, acquisition tax shall be reduced by 25/100: <Amended on Dec. 29, 2015; Jan. 19, 2016> |
| 2. | That the price announced in the invitation to occupants prescribed in the Housing Act does not exceed 600 million won, and the area for exclusive use by its occupant does not exceed 149 square meters and no one has lived therein (including a residential building and appurtenant land); |
| 3. | That a lease contract is concluded by no later than December 31, 2011, and it has been leased for at least two years. |
| (2) | Acquisition tax shall be reduced by 25/100 on an unsold housing unit after completion of construction meeting the requirements under paragraph (1) 1 and 2 acquired by no later than December 31, 2011, for lease for at least five years: Provided, That where such housing unit is sold, donated, or used for any other purpose without just grounds, after having been leased for less than five years, the reduced or exempted portion of acquisition tax shall be collected as a penalty. <Amended on Dec. 31, 2011> |
| (3) | For the purposes of paragraph (1) or (2), procedures, methods, etc. for confirming an unsold housing unit after completion of construction, leasing period, etc., shall be determined by the Minister of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Dec. 29, 2015; Jul. 26, 2017> |
| (4) | Notwithstanding the requirements prescribed in paragraph (1) 2, a local government may additionally reduce acquisition tax on an unsold housing unit after completion of construction, by up to 25/100, including where it prescribes by municipal ordinance a different selling price and area for exclusive use by its occupants according to the trend of the housing market of the relevant area, financial conditions, etc. In such cases, where the requirements for selling price and area for exclusive use by its occupant do not fall under the requirements prescribed in paragraph (1) 2, the reduction rate prescribed in paragraph (1) or (2) shall be deemed not granted. |
| (5) | Where a local government prescribes local tax reduction by municipal ordinance pursuant to paragraph (4), Article 4 (1) (main sentence), (3) (latter part), (6), and (7) shall not apply. |
[This Article Newly Inserted on Mar. 29, 2011]
| Article 31-3 (Reduction or Exemption for Long-Term Private Rental Housing) |
| (1) | Where a person who intends to rent publicly-funded private rental housing defined in subparagraph 4 of Article 2 of the Special Act on Private Rental Housing [excluding cases where short-term private rental housing defined in subparagraph 6 of Article 2 of the Special Act on Private Rental Housing (referring to the Act before being amended by Act No. 17482) which is registered pursuant to Article 5 of that Act is changed and reported as publicly-funded private rental housing pursuant to Article 5 (3) of that Act on or after July 11, 2020] or long-term private rental housing defined in subparagraph 5 of that Article [excluding cases where buy-to-rent private housing or short-term private rental housing that is leased out apartments , among long-term private rental housing whose registration of a rental business entity is filed (including cases where the change of registered matters is reported to add houses to be rented) pursuant to Article 5 of the Special Act on Private Rental Housing (referring to the Act before being amended by Act No. 17482) on or after July 11, 2020 is changed and reported as long-term private rental housing pursuant to paragraph (3) of that Article on or after July 11, 2020] , directly uses for rental purposes as at the tax base date, at least two households of multi-family housing for rental purposes in the Republic of Korea as prescribed by Presidential Decree or a multi-unit house prescribed by Presidential Decree (referring to cases where the area of each household unit for exclusive use does not exceed 40 square meters; hereafter in this Article, referred to as "multi-unit house"), or directly uses for rental purposes as at the tax base date, at least two households of officetel among the quasi-housing referred to in subparagraph 1 of Article 2 of the same Act (hereafter in this Article, referred to as "officetel"), he or she shall be granted a reduction or exemption of local taxes until December 31, 2024, as follows: Provided, That multi-family housing whose value publicly announced pursuant to Article 4 (1) of the Local Tax Act or calculated by the head of a Si or Gun exceeds 300 million won (600 million won in cases of Seoul metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act and officetels whose assessed value under Article 4 of the Local Tax Act exceeds 200 million won (400 million won in cases of the Seoul Metropolitan area defined in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act) shall be excluded from reduction or exemption: <Amended on May 28, 2014; Aug. 28, 2015; Dec. 29, 2015Jan. 16, 2018; Dec. 24, 2018; Aug. 12, 2020; Dec. 28, 2021> |
| 1. | In cases of multi-family housing, a multi-unit house, or an officetel for rental purposes with an area for exclusive use not exceeding 40 square meters, property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) shall be exempted; |
| 2. | In cases of multi-family housing, a multi-unit house, or an officetel for rental purposes with an area for exclusive use of between 40 and 60 square meters, property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act), shall be reduced by 75/100; |
| 3. | In cases of multi-family housing, a multi-unit house, or an officetel for rental purposes with an area for exclusive use of between 60 and 85 square meters, property tax shall be reduced by 50/100. |
| (2) | For the purposes of paragraph (1), where the registration of a rental business entity is cancelled pursuant to Article 6 of the Special Act on Private Rental Housing or a multi-family housing, a multi-unit house or an officetel is sold or donated during the mandatory rental period under Article 43 (1) of that Act, the reduced or exempted portion of property tax for a period within five years retrospectively from the extinction date of the ground for reduction or exemption thereof, shall be collected as a penalty: Provided, any of the following cases shall be excluded from collection of a penalty. <Amended on Aug. 28, 2015; Dec. 29, 2015; Dec. 27, 2016; Jan. 16, 2018; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021> |
| 2. | Other cases prescribed by Presidential Decree. |
[This Article Newly Inserted on Aug. 6, 2013]
| Article 31-4 (Reduction or Exemption for Real Estate Investment Companies Investing in Housing Lease Business) |
| (1) | Acquisition tax shall be reduced by 20/100 until December 31, 2021, on real estate acquired for lease (limited to real estate acquired to build or purchase multi-family housing defined in subparagraph 3 of Article 2 of the Housing Act (including officetels among quasi-housing defined in subparagraph 4 of Article 2 of the same Act; hereafter in this Article, the same shall apply)) by an entrusted management real estate investment trust defined in subparagraph 1 (b) of Article 2 of the Real Estate Investment Company Act (where the State, local governments, Korea Land and Housing Corporation, or local corporations has or have invested, whether solely or jointly, in all stocks issued by the relevant real estate investment company, referring to where the ratio of the stocks held thereby exceeds 50/100). In such cases, the tax rates prescribed in the main sentence of Article 13 (2) of the Local Tax Act and in Article 13 of the same Act, shall not apply. <Amended on Dec. 29, 2015; Jan. 19, 2016; Dec. 27, 2016; Dec. 24, 2018> |
| (2) | Where a real estate investment company prescribed in paragraph (1) directly uses at least two units of multi-family housing for lease (including where such company leases such units by entrustment pursuant to Article 22-2 or 35 of the Real Estate Investment Company Act) in the Republic of Korea as at the tax base date, local taxes shall be reduced or exempted until December 31, 2021, as follows: <Amended on Dec. 29, 2015; Dec. 24, 2018> |
| 1. | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act), shall be reduced by 40/100 on a unit of multi-family housing for lease with an area for exclusive use not exceeding 60 square meters; |
| 2. | Property tax shall be reduced by 15/100 on a unit of multi-family housing for lease with an area for exclusive use not exceeding 85 square meters. |
| (3) | For the purposes of paragraph (1), the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| 1. | Where the construction does not commence without just grounds, within two years from the date of acquisition of land; |
| 2. | Where the relevant real estate has not been used directly for the relevant purpose without just grounds, within one year from the date of purchase; |
| 3. | Where the real estate has been sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than two years. |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 31-5 (Reduction or Exemption for Persons Concluded Agreements to Sell Houses for Rental Purposes of Public Housing Project Operators) |
| (1) | Acquisition tax shall be reduced by 10/100 until December 31, 2024 on real estate acquired by a person who concludes an agreement to build houses for lease by a public housing project operator under the Special Act on Public Housing (hereafter in this Article, referred to as “public housing project operator”) and sell them to the public housing project operator for constructing the relevant houses, etc. <Amended on Mar. 14, 2023> |
| (2) | Where a person who concludes an agreement to build houses for lease by a public housing project operator and sell them to the public housing project operator constructs and first acquires the relevant houses, acquisition tax shall be reduced by 10/100 until December 31, 2024. <Amended on Mar. 14, 2023> |
| (3) | In any of the following cases, the acquisition tax reduced pursuant to paragraphs (1) and (2) shall be collected as a penalty: |
| 1. | Where he or she fails to commence the construction of houses for lease by a public housing project operator within one year from the date of acquisition of real estate pursuant to paragraph (1); |
| 2. | Where he or she fails to sell the houses, etc. first acquired pursuant to paragraph (2) to a public housing project operator within six months. |
[This Article Newly Inserted on Dec. 28, 2021]
| Article 32 (Reduction or Exemption for Acquisition of Small-Scale Multi-Family Housing by the Korea Land and Housing Corporation) |
| (1) | Acquisition tax and property tax shall be reduced by 25/100 until December 31, 2024, respectively, on real estate for small-scale multi-family housing prescribed by Presidential Decree, which is acquired and owned for lease by the Korea Land and Housing Corporation (hereafter in this Article, referred to as "small-scale multi-family housing"). <Amended on Jan. 1, 2013Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| (2) | Acquisition tax shall be reduced by 25/100 until December 31, 2016, on real estate for small-scale multi-family housing acquired by the Korea Land and Housing Corporation for sale in lots. <Amended on Jan. 1, 2013; Dec. 31, 2014> |
| (3) | For the purposes of paragraph (1) or (2), where the construction of small-scale multi-family housing does not commence within the period prescribed by Presidential Decree after acquisition of land or where such land is used for other than that of small-scale multi-family housing, the reduced or exempted portion of acquisition tax and property tax shall be collected as a penalty. <Amended on Dec. 29, 2015> |
| Article 32-2 (Reduction or Exemption for Resuming Projects for Neglected Buildings by the Korea Land and Housing Corporation) |
Acquisition tax shall be reduced by 35/100 on real estate acquired by the Korea Land and Housing Corporation to resume construction in accordance with a plan for the maintenance of buildings neglected for a long period after discontinuance of construction referred to in Article 6 of the Act on Special Measures for the Maintenance of Buildings Neglected for Long Period after Discontinuance of Construction (limited to where the income received upon completing construction of buildings is to be credited to the fund for the maintenance of buildings neglected for a long period after discontinuance of construction referred to in Article 13 of the same Act); and property tax shall be reduced by 25/100 on real estate used directly for such projects as at the tax base date, until December 31, 2021, respectively. <Amended on Dec. 24, 2018> [This Article Newly Inserted on Dec. 29, 2015]
| Article 33 (Reduction or Exemption for Increase in Supply of Houses) |
| (1) | The multi-family housing (including facilities appurtenant to the relevant multi-family housing and welfare facilities thereof, but excluding welfare facilities sold in lots or leased; hereafter in this Article, the same shall apply) of at least five households for which an each household area for exclusive use does not exceed 60 square meters (excluding land appurtenant to the relevant multi-family housing; hereafter in this paragraph, the same shall apply), built to sell in lots by a housing construction proprietor prescribed by Presidential Decree, and the multi-family housing which has been changed to houses for lease under Article 31 due to a reason, such as remaining unsold after such housing was constructed, shall be exempted from acquisition tax until December 31, 2014. <Amended on Jan. 1, 2013; Jan. 1, 2014> |
| (2) | Where a person becomes qualified as one household owning only one house by acquiring (excluding acquisition due to succession or donation, and original acquisition) a house for the low income bracket prescribed by Presidential Decree to reside therein at all times (referring to continuous residence therein after filing a move-in report under the Resident Registration Act after the date of acquisition or continuous residence therein from the date of acquisition after filling a move-in report under the Resident Registration Act before the date of acquisition; hereafter in this Article, the same shall apply) (including where a person becomes qualified as one household owning only one house by selling previous houses for a reason other than donation, within 60 days from the date he or she acquires the relevant house), such house shall be exempted from acquisition tax until December 31, 2024. <Amended on Dec. 27, 2010; Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (3) | For the purposes of paragraph (2), the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Newly Inserted on Dec. 24, 2018> |
| 1. | Where he or she fails to commence residing in the relevant house at all times until three months pass from the date of acquisition without just ground; |
| 2. | Where he or she fails to reside in the relevant house at all times before two years pass from the date he or she has commenced residence at all times; |
| 3. | Where he or she sells, donates, or uses the relevant house for any other purpose (including lease) after he or she has resided in the relevant house at all times for less than two years. |
| Article 34 (Reduction or Exemption for Guarantee for Sale of Houses by the Korea Housing and Urban Guarantee Corporation) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2016, on houses acquired by the Korea Housing and Urban Guarantee Corporation prescribed by the Housing and Urban Fund Act (hereinafter referred to as the "Korea Housing and Urban Guarantee Corporation") to guarantee the sale of houses prescribed in Article 26 (1) 2 of the same Act, contracted for sale. <Amended on Jan. 1, 2013; Jan. 6, 2015; Dec. 29, 2015; Dec. 27, 2016> |
| (2) | Deleted. <Jan. 1, 2014> |
| (3) | Deleted. <Jan. 1, 2014> |
| (4) | A real estate investment company shall be exempted from acquisition tax on a house which the real estate investment company defined in subparagraph 1 (a) and (b) of Article 2 of the Real Estate Investment Company Act (hereafter in this Article, referred to as "real estate investment company"), acquires for lease until December 31, 2014; and property tax on the house which the real estate investment company acquires shall be imposed at 1/1,000 until December 31, 2014, notwithstanding the tax rate referred to in Article 111 (1) 3 (b) of the Local Tax Act: Provided, That where the real estate investment company fails to comply with, or violates, any of the terms and conditions of a contract prescribed in paragraph (5) without just grounds, after it has been granted an acquisition tax exemption or a property tax reduction, the reduced or exempted portion of acquisition tax and property tax shall be collected as a penalty. <Newly Inserted on May 10, 2013> |
| (5) | Where a real estate investment company seeks to be granted an acquisition tax exemption or a property tax reduction pursuant to paragraph (4), the real estate investment company shall enter into each of the following contracts: <Newly Inserted on May 10, 2013> |
| 1. | A contract by and between the real estate investment company and a lessee: |
| (a) | A contract under which the real estate investment company leases a house to a lessee of the relevant house (hereafter in this Article, referred to as "lessee") by purchasing the house (including where it purchases a share in the ownership of the house) of a person who owns one house per household (referring to a household which consists of the head of household and its members (limited to a spouse, lineal ascendant, or lineal descendant) stated on a resident registration card for each household as at the date of acquisition of the house), the area for exclusive use of which does not exceed 85 square meters, for a period of at least five years; |
| (b) | A contract under which a lessee is granted a right to repurchase the relevant house (including where the lessee repurchases the house even before the expiration of the period of lease) on a preferential basis after the expiration of the period of lease prescribed in item (a); |
| 2. | A contract by and between the real estate investment company and the Korea Land and Housing Corporation: A contract prescribed in the terms and conditions on which the Korea Land and Housing Corporation covenants to purchase a house where a lessee fails to exercise a right to purchase the relevant house on a preferential basis prescribed in subparagraph 1 (b). |
| (6) | Deleted. <Jan. 1, 2014> |
| (7) | Acquisition tax shall be reduced by 50/100 on unsold housing units and appurtenant land (hereafter in this paragraph, referred to as "unsold housing units, etc.") directly acquired by a corporate restructuring real estate investment company defined in subparagraph 1 (c) of Article 2 of the Real Estate Investment Company Act or a real estate fund defined in subparagraph 2 of Article 229 of the Financial Investment Services and Capital Markets Act (including general private equity fund referred to in Article 9 (19) 2 of the same Act which invest in real estate prescribed in subparagraph 2 of Article 229 of the same Act in excess of 80/100 of the syndicate property; hereinafter the same shall apply) from project undertakers prescribed in the Housing Act by December 31, 2016; and property tax on unsold housing units, etc. acquired, shall be imposed at the rate of 1/1,000 until December 31, 2016, notwithstanding the tax rate referred to in Article 111 (1) 3 (b) of the Local Tax Act. <Newly Inserted on Jan. 1, 2014; Dec. 29, 2015; Apr. 20, 2021> |
[Title Amended on Jan. 6, 2015]
| Article 35 (Reduction or Exemption for Houses subject to Reverse Annuity Mortgage) |
| (1) | Where to guarantee a reverse annuity mortgage pursuant to the Korea Housing Finance Corporation Act, the Korea Housing Finance Corporation incorporated pursuant to that Act or a finance company that pays an annuity pursuant to that Act files for any registration of a house provided as a security, which meets the criteria for providing guarantees for reverse annuity mortgages reviewed and adopted under Article 9 (2) 5 of that Act by the Housing Finance Management Committee established pursuant to Article 9 (1) of that Act (including officetels used for residential purposes among quasi-housing defined in subparagraph 4 of Article 2 of the Housing Act; hereafter in this Article, the same shall apply), and a person who provides the house as a security assumes registration license tax, such registration license tax shall be reduced until December 31, 2024, as prescribed in the following subparagraphs: <Amended on Jan. 1, 2013; Dec. 29, 2015; Jan. 15, 2020; Dec. 28, 2021> |
| 1. | Where registration of a house provided as a security is filed for a house of a person owning one house for one household prescribed by Presidential Decree (hereafter in this Article, referred to as “one house for one household”), whose assessed value of a house under Article 4 of the Local Tax Act (hereafter in this Article, referred to as “assessed value”) is less than 500 million won, registration license tax shall be reduced by 75/100; |
| 2. | Registration other than those under subparagraph 1: Reduction falling under the following classifications: |
| (a) | If the amount of registration license tax is not more than three million won, such registration license tax shall be reduced by 75/100; |
| (b) | If the amount of registration license tax exceeds three million won, 2.25 million won shall be deducted. |
| (2) | Property tax on a house (limited to cases of only one house for one household) provided as security for a reverse annuity mortgage under paragraph (1) shall be reduced or exempted until December 31, 2024, as follows: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021> |
| 1. | In cases of a house with an assessed value not exceeding 500 million won, property tax shall be reduced by 25/100; |
| 2. | Where the assessed value of a house exceeds 500 million won, 25/100 of the amount of property tax on a house with the assessed value at 500 million won in the relevant year, shall be deducted. |
| (3) | Property tax on a housing unit (limited to one house for one household) provided as security by a person who acquires a reverse annuity mortgage to be paid money for living, etc. by means of pension from a financial institution under subparagraph 11 of Article 2 of the Korea Housing Finance Corporation Act, shall be reduced until December 31, 2021, as follows: <Newly Inserted on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Jan. 15, 2020> |
| 1. | In cases of a housing unit with an officially announced price, etc. not exceeding 500 million won, property tax shall be reduced by 25/100; |
| 2. | In cases of a housing unit with an officially announced price, etc. exceeding 500 million won, 25/100 of the amount of property tax on a housing unit with an officially announced price, etc. valued at 500 million won in the relevant year, shall be reduced. |
| Article 35-2 (Reduction or Exemption on Farmland Eligible for Stabilization Fund for Old Life of Farmers) |
| 1. | In cases of farmland with an officially announced price under Article 4 (1) of the Local Tax Act or the price calculated by the head of a Si/Gun (hereafter in this Article, referred to as "officially announced land price, etc.") not exceeding 600 million won, such farmland shall be exempted from property tax; |
| 2. | Where the officially announced land price, etc. exceeds 600 million won, 100/100 of the amount of property tax on farmland with an officially announced price, etc. valued at 600 million won in the relevant year, shall be deducted. |
[This Article Newly Inserted on Jan. 1, 2013]
| Article 35-3 (Deduction of Amount of Property Tax on Housing with Housing Mortgage Loan for Lessee's Preparation of Funds for Lease on Deposit Basis) |
| (1) | Where a person who owns a housing unit being used as a rental housing unit as at the tax base date of property tax after a rental contract has been concluded between the lessor and the lessee, fulfills each of the following requirements, the amount of tax calculated by applying 1/1,000 to 60/100 of the amount of housing mortgage loan, shall be deducted until December 31, 2016, from the amount of property tax calculated by applying the tax rate prescribed in Article 111 (1) 3 (b) of the Local Tax Act: Provided, That if any of the following requirements is violated during the relevant period of lease, the portion of property tax so deducted shall be collected as a penalty: <Amended on Dec. 29, 2015> |
| 1. | Where the lessee is a non-home-owning householder as at the contract date and his/her annual income for the immediately preceding year (including his/her spouse's income) does not exceed 60 million; |
| 2. | Where the deposit for leasing housing on a deposit basis does not exceed 200 million won (or 300 million won in cases of the Seoul Metropolitan area); |
| 3. | Where the amount of housing mortgage loan does not exceed 30 million won (or 50 million won in cases of the Seoul Metropolitan area); |
| 4. | Where a contract for housing mortgage loan is concluded with a finance company, etc. defined in subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (hereafter in this Article, referred to as "finance company, etc.") in accordance with the rental contract form prescribed by the Minister of Land, Infrastructure, and Transport, on condition that the deposit for lease on a deposit basis prescribed in subparagraph 2, be fully or partially funded by the lessor through a housing mortgage loan and the interest thereon shall be borne by the lessee; |
| 5. | Where a housing mortgage loan handled by a finance company, etc. is provided through a bankbook indicating a loan for lease on a deposit basis. |
| (2) | Where an amount of property tax is deducted pursuant to paragraph (1), the portion relevant to the ratio of amount of tax deducted in the amount of property tax calculated (if the ratio calculated as a percentage contains any fraction below the decimal point, such fractions of a value shall be rounded down to the nearest whole number), shall be deemed the reduction rate of property tax. |
| (3) | For the purposes of paragraph (1), the criteria prescribed by the Minister of the Interior and Safety prescribed in Article 36-2 (4) shall apply mutatis mutandis to methods for verifying a non-home-owning householder and his/her income during the immediately preceding year. <Amended on Nov. 19, 2014; Jul. 26, 2017> |
[This Article Newly Inserted on Aug. 6, 2013]
| Article 36 (Reduction or Exemption for Assistance to Supply of Houses to Persons without House) |
Real estate for the construction of houses acquired by a corporation prescribed by Presidential Decree, which is a public interest corporation incorporated pursuant to the Act on the Establishment and Operation of Public Interest Corporations, to supply houses to persons without a house, shall be exempted from acquisition tax; and real estate used directly for such duties as at the tax base date, shall be exempted from property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) until December 31, 2024, respectively: Provided, That where the construction of houses does not commence within two years from the date of acquisition without just grounds, or such real estate is used for any other purpose, the exempted portion of acquisition tax shall be collected as a penalty. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021>
| Article 36-2 (Reduction or Exemption of Acquisition Tax for Newlywed Couple who Purchases First House in Life) |
| (1) | Where a person as a person for whom five years have not passed from the wedding day (based on the wedding day entered in a report of marriage under the Act on Registration of Family Relations) or a person who is to be married within three months from the date a house is acquired (hereafter in this Article, referred to as "newlywed couple"), who meets the following requirements, purchases a house (referring to a house referred to in Article 11 (1) 8 of the Local Tax Act; hereafter in this Article, the same shall apply) through a transaction with compensation (excluding a gift subject to charge) to reside therin, acquisition tax shall be reduced by 50/100 until December 31, 2020: <Amended on Jan. 15, 2020; Dec. 28, 2021> |
| 1. | As the newlywed couple as at the date the house is acquired, none of the relevant person and his or her spouse (including a person who will become his or her spouse; hereafter in this Article, the same shall apply) shall have owned a house until the date the house is acquired. In such cases, where the relevant person or his/her spouse owns or has owned a house prescribed by Presidential Decree as at the time of acquiring the house, the newly couple shall be deemed that they have no record of ownership of any house; |
| (2) | Where a person exempted from acquisition tax pursuant to paragraph (1) falls under any of the following cases, the reduced portion of acquisition tax shall be collected as a penalty: |
| 1. | Where the newlywed couple expected to be married fails to marry within three months from the date the house is acquired; |
| 2. | Where he or she fails to be qualified as one household owning only one house within three months from the date the house is acquired; |
| 3. | Where he or she sells or donates the house for which a reduction or exemption of acquisition tax has been granted, or uses it for any other purpose (including lease) without just grounds, within three years from the date the house is acquired. |
| (3) | For the purposes of paragraph (1), the combined income of a newlywed couple in the immediately preceding year shall be the aggregate of all incomes of the newlywed couple, including their wages and bonuses. |
| (4) | For the purposes paragraphs (1) and (3), detailed criteria for the income of a newlywed couple in the immediately preceding year, verification of whether a newlywed owns a house, and other relevant matters shall be determined and publicly notified by the Minister of the Interior and Safety. |
| (5) | The Minister of the Interior and Safety or the head of a local government may request the head of the relevant agency to provide data necessary to verify the combined income of a newlywed couple referred to in paragraph (3). In such cases, the head of the relevant agency in receipt of such request shall comply therewith, except in extenuating circumstances. |
[This Article Newly Inserted on Dec. 24, 2018]
| Article 36-3 (Reduction or Exemption for First-Time Home Buyer) |
| (1) | Where the principal and the spouse thereof (including a foreign spouse whose marriage is confirmed in the family Relations Register under the Act on Registration of Family Relations; hereafter in this Article, the same shall apply) have not owned a house (referring to housing under Article 11 (1) 8 of the Local Tax Act; hereafter in this Article, the same shall apply) as of the date of acquisition of housing and acquire housing whose value at the time of acquisition under Article 10-3 of the Local Tax Act is not more than 1.2 billion, through a transaction for consideration (excluding gift of encumbered property), local taxes shall be reduced or exempted until December 31, 2025, as prescribed in the following subparagraphs: Provided, That cases where the acquirer is a minor shall be excluded herefrom: <Amended on Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Where the amount of acquisition tax calculated by applying the tax rate under Article 11 (1) 8 of the Local Tax Act (hereafter in this Article, referred to as “calculated amount of tax”) is not more than two million won, the acquisition tax shall be exempted; |
| 2. | Where the calculated amount of tax exceeds two million won, two million won shall be deducted from the calculated amount of tax. |
| (2) | Where more than two persons acquire housing jointly, the total amount of reduction or exemption under paragraph (1) shall be less than two million won. <Amended on Mar. 14, 2023> |
| (3) | The phrase “have not owned a house” in paragraph (1) means any of the following cases: <Amended on Dec. 28, 2021; Jun. 1, 2023> |
| 1. | Where a person held co-owned shares of a house due to inheritance (including holding only co-owned shares of the land appurtenant to a house), but disposed of all the shares; |
| 2. | Whew a person who owns any of the following houses, which is constructed in an area other than an urban area defined in Article 6 of the National Land Planning and Utilization Act (referring to the urban areas as of the date of acquisition) or in an administrative district of Myeon (excluding the Seoul metropolitan area) has resided in the area located in the house, but moves to another area (referring to the areas other than a Special City, Metropolitan City, Special Self-Governing City, Special Self-Governing Province and Si/Gun, which is located in the relevant house). In such cases, it shall be limited to cases where the house is disposed of before the date of acquisition of the house subject to tax reduction or exemption or within three months from the date of acquisition of the house subject to tax reduction or exemption; |
| (a) | A detached house that received approval for use over 20 years ago; |
| (b) | A detached house with a floor area not exceeding 85 square meters; |
| (c) | A house acquired due to inheritance; |
| 3. | Where a person owns or disposes of a house with an area for exclusive use not exceeding 20 square meters: Provided, That cases where the person owned or has owned more than two houses with an area for exclusive use not exceeding 20 square meters shall be excluded herefrom; |
| 4. | Where a person owns or disposes of a house whose assessed value calculated under Article 4 (2) of the Local Tax Act is not more than one million won as of the date of acquisition; |
| 5. | Where a person owns or disposes of a house affected by Jeonse fraud pursuant to Article 36-4 (1). |
| (4) | Where a person whose acquisition tax is reduced or exempted pursuant to paragraph (1) falls under any of the following cases, the acquisition tax reduced or exempted shall be collected as a penalty: <Amended on Dec. 28, 2021> |
| 1. | Where the person fails to commence residing at all times (referring to residing continuously after filing a move-in report under the Resident Registration Act after the date of acquisition or residing continuously from the date of acquisition after filing a move-in report under that Act before the date of acquisition; hereafter in this Article, the same shall apply) within three months from the date on which the house is acquired, without justifiable reasons prescribed by Presidential Decree; |
| 2. | Where the person additionally acquires (including acquiring only the land appurtenant to a house) a house within three months from the date on which the house is acquired: Provided, That an additional acquisition due to inheritance shall be excluded herefrom; |
| 3. | Where the person has resided continuously for less than three years in the relevant house and sells or donates (excluding selling or donating shares to his or her spouse) such house or uses it for other purposes (including rental). |
| (5) | In applying paragraph (3), specific criteria for confirming whether a person has had no house shall be specified by the Minister of the Interior and Safety. <Amended on Mar. 14, 2023> |
| (6) | Deleted. <Mar. 14, 2023> |
[This Article Newly Inserted on Aug. 12, 2020]
| Article 36-4 (Reduction or Exemption for Support for Jeonse Fraud Victims) |
| (1) | Where a Jeonse fraud victim under the Special Act on Support for Jeonse Fraud Victims and Housing Stabilization (hereafter in this Article, referred to as “Jeonse fraud victims”) acquires a house affected by Jeonse frauds (hereafter in this Article, referred to as a “house affected by Jeonse fraud”), acquisition tax shall be reduced or exempted until December 31, 2026, as prescribed in the following subparagraphs: |
| 1. | Where the amount of acquisition tax calculated pursuant to the Local Tax Act (hereafter in this Article, referred to as “calculated amount of tax”) is less than two million won, the acquisition tax shall be exempted; |
| 2. | Where the calculated amount of tax exceeds two million won, two million won shall be deducted from the calculated amount of tax. |
| (2) | Where a Jeonse fraud victim holds a house affected by Jeonse frauds, property tax shall be reduced for three years from the date on which the liability to pay property tax is first established, as prescribed in the following subparagraphs: |
| 1. | In cases of a house affected by Jeonse frauds with an area of exclusive use not exceeding 60 square meters, property tax shall be reduced by 50/100; |
| 2. | In cases of a house affected by Jeonse frauds with an area of exclusive use exceeding 60 square meters, property tax shall be reduced by 25/100. |
| (3) | Registration license tax shall be exempted until December 31, 2026 on leasehold registration in accordance with the leasehold registration order filed by a Jeonse fraud victim to protect the leasehold of the principal. |
| (4) | Where a public housing project operator defined in Article 4 of the Special Act on Public Housing acquires a house affected by Jeonse frauds pursuant to Article 25 (3) of the Special Act on Support for Jeonse Fraud Victims and Housing Stabilization, acquisition tax shall be reduced by 50/100 until December 31, 2026 on the relevant house affected by Jeonse frauds. |
[This Article Newly Inserted on Jun. 1, 2023]
| Article 37 (Reduction or Exemption for National University Hospitals) |
| (1) | Acquisition tax on real estate acquired by any of the following corporations to use directly for its unique duties shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases); and property tax on real estate used directly for its own duties as at the tax base date shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases) until December 31, 2024, respectively: <Amended on May 31, 2010; Dec. 27, 2010; Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2014; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021> |
| 2. | Seoul National Dental Hospital established pursuant to the Establishment of Seoul National University Dental Hospital Act; |
| 5. | National Medical Center established pursuant to the Act on Establishing and Administrating the National Medical Center; |
| 7. | Korea Institute of Radiological and Medical Sciences established under the Radiation and Radioisotope Use Promotion Act |
| (2) | Deleted. <Dec. 28, 2021> |
[Title Amended on Dec. 25, 2018]
| Article 38 (Special Taxation for Medical Institutions) |
| (1) | Acquisition tax on real estate acquired by any medical institution established pursuant to Article 48 of the Medical Service Act to use directly for medical services and property tax on real estate used directly for medical services as at the tax base date, shall be reduced, respectively, as follows: <Amended on Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax shall be reduced by 30/100 (40/100 in cases of specialized hospitals for infectious diseases), and property tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases), until December 31, 2024, respectively; |
| 2. | Deleted. <Dec. 28, 2021> |
| (2) | Hospitals affiliated with medical colleges (including colleges of oriental medicines, dental colleges, and veterinary colleges) established pursuant to Article 4 of the Higher Education Act, shall be exempted from the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) and the pro rata employee portion of resident tax until December 31, 2014. <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2020> |
| (3) | Deleted. <Dec. 24, 2018> |
| (4) | Acquisition tax on real estate acquired by any religious organization (limited to cases of as an incorporated foundation established under the Civil Act) to use directly for medical services by establishing a medical institution under the Medical Service Act and property tax on real estate used directly for medical services as at the tax base date, shall be reduced, respectively, as follows: <Newly Inserted on Dec. 31, 2011; Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2014; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax shall be reduced by 30/100 (40/100 in cases of specialized hospitals for infectious diseases) and property tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases), until December 31, 2024, respectively; |
| 2. | Deleted. <Dec. 28, 2021> |
| (5) | Where at least two Sis and Guns consolidate into a Si which becomes the seat of a Do government, as prescribed in Article 5 (1) of the Local Autonomy Act, notwithstanding paragraphs (1) and (4), the pre-consolidation reduction rate may apply to the previous Sis (excluding the Si, which is the seat of a Do government) and Guns by up to five years, from the time the consolidated local government is established, as prescribed by ordinance of the consolidated local government. <Newly Inserted on Dec. 31, 2011; Jan. 12, 2021> |
| Article 38-2 (Reduction or Exemption for Local Medical Centers) |
Acquisition tax on real estate acquired by any local medical center established under the Act on the Establishment and Management of Local Medical Centers to use directly for medical services and property tax on real estate used directly for medical services as at the tax base date, shall be reduced, respectively, as follows: <Amended on Dec. 28, 2021> | 1. | Acquisition tax and property tax shall be reduced by 75/100 (85/100 in cases of specialized hospitals for infectious diseases), respectively; |
| 2. | Deleted. <Dec. 28, 2021> |
[This Article Newly Inserted on Dec. 24, 2018]
| Article 39 (Reduction or Exemption for Assistance to National Health Insurance Projects) |
| (1) | Local taxes on real estate acquired by the National Health Insurance Corporation under the National Health Insurance Act, to use directly for its unique duties, shall be reduced until December 31, 2014, as follows: <Amended on Dec. 21, 2011; Jan. 1, 2013> |
| 2. | Acquisition tax shall be reduced by 50/100 on real estate acquired by the National Health Insurance Corporation to use for duties prescribed in Article 14 (1) 6 of the National Health Insurance Act; and property tax shall be reduced by 50/100 on real estate used directly for such duties as at the tax base date. |
| (2) | Local taxes on real estate acquired by the Health Insurance Review and Assessment Service under the National Health Insurance Act, to use directly for its unique duties, shall be reduced until December 31, 2014, as follows: <Amended on Dec. 31, 2011; Jan. 1, 2013> |
| 1. | Acquisition tax shall be exempted on real estate acquired by the Health Insurance Review and Assessment Service to use directly for the duties prescribed in Article 63 (1) 1 of the National Health Insurance Act; and property tax shall be reduced by 50/100 on real estate used directly for such duties as at the tax base date; |
| 2. | Acquisition tax shall be reduced by 50/100 on real estate acquired by the Health Insurance Review and Assessment Service, to use directly for the duties prescribed in Article 63 (1) 2 of the National Health Insurance Act; and property tax shall be reduced by 25/100 on real estate used directly for such duties as at the tax base date. |
| Article 40 (Reduction or Exemption for National Health Promotion Service Providers) |
| (1) | Acquisition tax shall be reduced by 75/100 on real estate acquired by any of the following corporations to use directly for its unique duties; and property tax shall be reduced by 50/100 on real estate used directly for such duties as at the tax base date, until December 31, 2024, respectively: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| (2) | Deleted. <Dec. 28, 2021> |
| Article 40-2 (Reduction or Exemption of Acquisition Tax on Housing Transactions) |
| (1) | Where a person falls under any of the following due to the acquisition of a house the price of which at the time of acquisition under Article 10 of the Local Tax Act (referring to the Act before being amended by Act No. 18655) does not exceed 900 million won, by means of a transaction for value from January 1, 2013 to June 30, 2013, acquisition tax calculated by applying the tax rate referred to in Article 11 (1) 7 (b) of the same Act, shall be reduced by 75/100; where a person falls under any of the following due to the acquisition of a house the price of which exceeds 900 million won, but does not exceed 1.2 billion won, or becomes an owner of at least two houses not falling under subparagraph 2 due to the acquisition of a house the price of which does not exceed 1.2 billion won, acquisition tax calculated by applying the tax rate referred to in Article 11 (1) 7 (b) of the same Act, shall be reduced by 50/100; and where a person acquires a house the price of which exceeds 1.2 billion won, acquisition tax calculated by applying the tax rate referred to in Article 11 (1) 7 (b) of the same Act, shall be reduced by 25/100, respectively: Provided, That where he/she fails to reduce his/her holdings to only one house without just grounds within three years from the date of acquisition of a house the price of which does not exceed 900 million won after he/she has acquired such house in the state referred to in subparagraph 2 and has been granted an acquisition tax reduction, one-third of the reduced portion of acquisition tax shall be collected as a penalty: <Amended on Dec. 28, 2021> |
| 1. | Where he/she reduces his/her holdings to only one house; |
| 2. | Where he/she temporarily reduces his/her holdings to two houses prescribed by Presidential Decree. |
| (2) | Where a person falls under any of the following due to the acquisition of a house the price of which at the time of acquisition under Article 10 of the Local Tax Act (referring to the Act before being amended by Act No. 18655) does not exceed 900 million won, by means of a transaction for value from July 1, 2013 to December 31, 2013, acquisition tax calculated by applying the tax rate referred to in Article 11 (1) 7 (b) of the same Act, shall be reduced by 50/100: Provided, That where he/she fails to reduce his/her holdings to only one house without just grounds within three years from the date of acquisition of a house after he/she has acquired such house in the state referred to in subparagraph 2 and has been granted an acquisition tax reduction, the reduced portion of acquisition tax shall be collected as a penalty: <Amended on Dec. 28, 2021> |
| 1. | Where he/she reduces his/her holdings to only one house; |
| 2. | Where he/she temporarily reduces his/her holdings to two houses prescribed by Presidential Decree. |
[This Article Wholly Amended on Mar. 23, 2013]
| Article 40-3 (Reduction or Exemption for the Korean Red Cross) |
Acquisition tax on real estate acquired by the Korean Red Cross under the Organization of the Republic of Korea National Red Cross Act to use directly for its unique duties and property tax on real estate used directly for its unique duties, shall be reduced, respectively, as follows: <Amended on Dec. 27, 2016; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021; Mar. 14, 2023> | 1. | Acquisition tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases) on real estate acquired to use directly for medical services among activities prescribed in subparagraph 4 of Article 7 of the same Act (including nursing services and blood services; hereafter in this Article, referred to as "medical services"); and property tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases) on real estate used directly for medical services as at the tax base date, until December 31, 2024, respectively; |
| 2. | Deleted; <Dec. 28, 2021> |
| 3. | Acquisition tax on real estate acquired to use directly for any business other than medical services referred to in subparagraph 1 (hereafter in this Article, referred to as "business other than medical services") shall be reduced by 50/100; and property tax on real estate used directly for any business other than medical services as at the tax base date shall be reduced by 50/100, respectively, until December 31, 2023. |
[This Article Newly Inserted on Dec. 29, 2015]
SECTION 3 Support for Education, Science, Technology
| Article 41 (Exemption for Schools and Foreign Educational Institutions) |
| (1) | Real estate (excluding dormitories prescribed by Presidential Decree) acquired by a school prescribed in the Elementary and Secondary Education Act or the Higher Education Act, or by a person operating a foreign educational institution prescribed in the Special Act on Establishment and Management of Foreign Educational Institutions in Free Economic Zones and Jeju Free International City or the Special Act on the Development of Enterprise Cities (hereafter in this Article, referred to as "schools, etc."), to use directly for the relevant business, shall be exempted from acquisition tax until December 31, 2024: Provided, That the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 27, 2016; Dec. 26, 2017; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where it is not used for any of the relevant purposes without just grounds, within three years from the date of acquisition; |
| 3. | Where it is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (2) | Real estate (including land appurtenant to a building prescribed by Presidential Decree) used by schools, etc. directly for the relevant business as at the tax base date, shall be exempted from property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act, respectively, until December 31, 2024: Provided, That where such property is used commercially, or a fee is charged for the use thereof, or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof shall be exempted. <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021> |
| (3) | A license used by a school, etc. directly for its business shall be exempted from registration license tax; and a school, etc. shall be exempted from the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act; hereafter in this paragraph, the same shall apply) and pro rata employee portion of resident tax, respectively, until December 31, 2024: Provided, That no pro rata business place portion and pro rata employee portion of resident tax prescribed by Presidential Decree, shall be exempted when such business is related to profit-making business of a school, etc. <Amended on Dec. 31, 2011; Jan. 1, 2013; Jan. 1, 2014; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021> |
| (4) | Where generated electric power, etc. is supplied to schools, etc. gratuitously, such portion shall be exempted from local resource and facility tax prescribed in Article 146 (1) and (2) of the Local Tax Act until December 31, 2021. <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Jan. 15, 2020> |
| (5) | An educational foundation prescribed in the Private School Act and a national school established as a national university foundation by the State, shall be exempt from registration license tax on registration for establishment, registration for consolidation, and registration for alteration following the transfer of State-owned property or public property to a national university corporation; and such school shall be exempt from pro rat business place portion of resident tax (limited to a tax amount imposed pursuant to Article 81 (1) 1 of the Local Tax Act), respectively, until December 31, 2024. <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021> |
| (6) | Where real estate donated before the relevant school, etc. is converted into a national university corporation, is permitted for the donator to use without compensation according to a contract he or she has concluded, the real estate shall be exempted from property tax (including an amount imposed under Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act, respectively, during the period of such use without compensation, until December 31, 2021. <Newly Inserted on Jan. 1, 2013; Dec. 24, 2018; Jan. 15, 2020> |
| (7) | Notwithstanding paragraphs (1) through (6), acquisition tax on real estate acquired by an academic teaching hospital affiliated with a medical college (including a college of oriental medicine, a dental college, and a veterinary college) established pursuant to Article 4 of the Higher Education Act, to use directly for medical services and property tax on real estate directly used for its medical services as at the tax base date, shall be reduced respectively as follows: <Amended on Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax shall be reduced by 30/100 (40/100 in cases of specialized hospitals for infectious diseases) and property tax shall be reduced by 50/100 (60/100 in cases of specialized hospitals for infectious diseases), until December 31, 2024, respectively; |
| 2. | Deleted. <Dec. 28, 2021> |
| Article 42 (Reduction or Exemption for Dormitories) |
| (1) | Acquisition tax on real estate acquired by a school prescribed in the Elementary and Secondary Education Act or the Higher Education Act, or by a person operating a foreign educational institution prescribed in the Special Act on Establishment and Management of Foreign Educational Institutions in Free Economic Zones and Jeju Free International City or the Special Act on the Development of Enterprise Cities (hereafter in this Article, referred to as "schools, etc."), to use for dormitories prescribed by Presidential Decree (limited to dormitories referred to in subparagraphs 4 and 4-2 of Article 19 of the Korea Foundation for the Promotion of Private School Act), and property tax and pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act; hereafter in this Article the same shall apply) of resident tax on real estate used for the relevant purposes as at the base tax date, shall be exempted, respectively, until December 31, 2024: Provided, That the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010 Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021> |
| 1. | Where it is not used for any of the relevant purposes without just grounds, within three years from the date of acquisition; |
| 2. | Where it is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (2) | Motor vehicles, machinery, aircraft, standing trees, and vessels acquired by a person who has established, and is managing, a school prescribed in Article 11 of the Framework Act on Education to use for experiments and practical training of students, shall be exempted from acquisition tax; and aircraft and vessels used for experiments and practical training of students as at the tax base date, shall be exempted from property tax until December 31, 2024, respectively: Provided, That the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Where it is not used for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 2. | Where it is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (3) | Acquisition tax shall be reduced by 75/100 on real estate acquired by an industry-academic cooperation foundation established and managed pursuant to Article 25 of the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act, to use directly for its unique duties; and property tax shall be reduced by 75/100 on real estate used directly for its unique duties as at the tax base date, until December 31, 2023, respectively. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 27, 2016; Dec. 26, 2017; Dec. 29, 2020> |
| (4) | An industry-academic cooperation foundation prescribed in paragraph (3) shall be exempted from the pro rata business place portion and pro rata employee portion of resident tax until December 31, 2014: Provided, That no pro rata business place portion and pro rata employee portion of resident tax prescribed by Presidential Decree, shall be exempted when related to profit-making business. <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2020> |
| (5) | Deleted. <Dec. 31, 2011> |
| Article 43 (Exemption for Lifelong Educational Organizations) |
| (1) | Acquisition tax shall be exempted until December 31, 2019, on real estate acquired by a lifelong educational organization operating an educational facility under the Lifelong Education Act (hereafter in this Article, referred to as "lifelong educational organization"), to use directly for the relevant business. |
| (2) | Property tax on real estate (including land appurtenant to a building prescribed by Presidential Decree) used directly by a lifelong educational organization for the relevant business as at the tax base date shall be exempted until December 31, 2019: Provided, That where such property is used commercially, or a fee is charged for the use thereof; or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof, shall be exempted. |
| (3) | Acquisition tax on real estate acquired by any lifelong educational organization during the period from January 1, 2020 to December 31, 2024 to use directly for the relevant business, and property tax on real estate (including land appurtenant to buildings prescribed by Presidential Decree) acquired during the same period and used directly for the relevant business as at the tax base date, shall be reduced, respectively, as follows: <Amended on Dec. 28, 2021> |
| 1. | Acquisition tax on the relevant real estate shall be reduced by 50/100; |
| 2. | Property tax shall be reduced by 50/100 for five years from the date the first liability to pay property tax on the relevant real estate arises after the date the relevant real estate is acquired: Provided, That where such property is used commercially, or a fee is charged for the use thereof; or part of such property is not used directly for its original purpose, no reduction in property tax on such property or part thereof, shall be granted. |
| (4) | For the purposes of paragraphs (1) and (3) 1, the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| 1. | Where the relevant real estate is used for commercially within five years from the date of acquisition; |
| 2. | Where it is not used directly for the relevant purpose until three years pass from the date of acquisition without just grounds; |
| 3. | Where it is sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than two years. |
[This Article Wholly Amended on Dec. 24, 2018]
| Article 44 (Reduction or Exemption for Lifelong Educational Facilities) |
| (1) | Acquisition tax on real estate acquired to use for a lifelong educational facility prescribed by Presidential Decree and property tax on real estate (excluding the portion used for any other purpose, where the relevant facility is used for any other purpose at the same time) used directly for a lifelong educational facility as at the tax base date, shall be reduced or exempted, respectively, as follows: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax and property tax shall be exempted, respectively, until December 31, 2019; |
| 2. | Acquisition tax and property tax on real estate acquired during the period from January 1, 2020 to December 31, 2024 shall be reduced, respectively, as follows: |
| (a) | Acquisition tax on the relevant real estate shall be reduced by 50/100; |
| (b) | Property tax shall be reduced by 50/100 for five years from the date the first liability to pay property tax on the relevant real estate arises after the date the relevant real estate is acquired. |
| (2) | A lifelong education facility under paragraph (1), which is eligible for using the name of major college pursuant to Article 31 (4) of the Lifelong Education Act (hereafter in this Article, referred to as “major college”), shall be exempted from local tax until December 31, 20204, as prescribed in the following subparagraphs: <Newly Inserted on Dec. 29, 2020; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired by a major college for direct use for the relevant projects: Provided, That in the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| (a) | Where such real estate is used commercially within five years from the date of acquisition; |
| (b) | Where such real estate is not used directly for the relevant purpose without just grounds within three years from the date of acquisition; |
| (c) | Where such real estate is sold, donated, or used for any other purpose, after having been used for the relevant purpose for less than two years. |
| 2. | Property tax (including the amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax under Article 146 (3) of the Local Tax Act on real estate (including land appurtenant to a building under the main clause of Article 41 (2)) used by a major college directly for the relevant projects as of the tax base date: Provided, that where the relevant property is used for profit-making business and the relevant property is used for consideration, such property and, where the part of the relevant property is not used directly for its intended purpose, the part of the property shall not be exempted herefrom; |
| 3. | Registration license tax on license used by a major college directly for its projects and pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act; hereafter in this paragraph, the same shall apply) and pro rata employee portion of resident tax on the major college: Provided, That pro rata business place portion and employee portion (Whether it is related to profit-making business shall be governed by the proviso of Article 41 (3)) shall not be exempted herefrom. |
| (3) | Acquisition tax shall be reduced by 75/100 on real estate acquired by an industry-academic cooperation foundation established and operated pursuant to Article 25 of the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act for direct use in its unique business in relation to the operation of a major college, and property tax shall be reduced by 75/100 on real estate for direct use in its unique business as of the tax base date, until December 31, 2023, respectively. <Newly Inserted on Mar. 14, 2023> |
| (4) | Acquisition tax shall be reduced by 50/100 until December 31, 2024 on real estate acquired for direct use in a public occupational training establishment defined in subparagraph 3 (a) of Article 2 of the National Lifelong Vocational Skill Development Act; and property tax shall be reduced by 50/100 until December 31, 2024 on real estate (where the relevant establishment is used for any other purpose, the portion related thereto shall be excluded) used directly for a public occupational training establishment as of the tax base date. <Newly Inserted on Dec. 29, 2020; Aug. 17, 2021; Dec. 28, 2021; Mar. 14, 2023> |
| (2) | For the purposes of paragraphs (1) and (4), the reduced or exempted portion of acquisition tax and property tax shall be collected as a penalty in any of the following cases: <Newly on Dec. 24, 2018; Dec. 29, 2020; Mar. 14, 2023> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used directly for the relevant purpose without just grounds within three years from the date of acquisition; |
| 3. | Where such real estate is sold, donated, or used for any other purpose, after having been used for the relevant purpose for less than two years. |
[Title Amended on Dec. 29, 2020]
| Article 44-2 (Reduction or Exemption for Museums) |
| (1) | Acquisition tax on real estate (excluding the portion used for any other purpose, where the relevant facility is used for any other purpose at the same time) acquired to use by a museum or art museum prescribed by Presidential Decree and property tax used directly by the relevant museum or art museum as at the tax base date, shall be exempted, respectively, from the date the relevant real estate is acquired until December 31, 2024. <Amended on Dec. 28, 2021> |
| (2) | Acquisition tax on real estate (excluding the portion used for any other purpose, where the relevant facility is used for any other purpose at the same time) acquired to use by a library or science museum prescribed by Presidential Decree and property tax used directly by the relevant library or science museum as at the tax base date, shall be exempted, respectively, until December 31, 2024. <Amended on Dec. 28, 2021> |
[This Article Wholly Amended on Dec. 24, 2018]
| Article 45 (Reduction or Exemption for Academic Societies and Scholarship Corporations) |
| (1) | Real estate acquired by an academic society prescribed by Presidential Decree, to use directly for its scientific research, shall be exempted from acquisition tax; and real estate used directly for its scientific research as at the tax base date, shall be exempted from property tax , until December 31, 2024, respectively: Provided, That this shall not apply to organizations referred to in Article 45-2. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Jan. 15, 2020; Dec. 28, 2021> |
| (2) | Local taxes on a scholarship corporation established under the Act on Establishment and Operation of Public Interest Corporation shall be reduced or exempted until December 31, 2024, as prescribed in the following subparagraphs: <Amended on Jan. 15, 2020; Dec. 28, 2021> |
| 1. | Acquisition tax shall be exempted on real estate acquired by a scholarship corporation for direct use in scholarship projects; and property tax shall be exempted on real estate used directly for scholarship projects as at the tax base date, respectively; |
| 2. | Acquisition tax shall be reduced by 80/100 on real estate for lease acquired by a scholarship corporation for the purpose of paying scholarships and property tax shall be reduced by 80/100 on real estate used for the relevant rental purposes as at the tax base date, respectively. |
| (3) | The reduced or exempted portion of acquisition tax shall be collected as a penalty in any of the following cases after reduction or exemption from acquisition tax pursuant to paragraphs (1) and (2): <Newly Inserted on Jan. 15, 2020> |
| 1. | Where such real estate is not used directly for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 2. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than two years; |
| 3. | Where such real estate falls under grounds prescribed by Presidential Decree, such as cancellation of establishment permission under relevant statutes within three years from the date of acquisition |
[Title Amended on Jan. 15, 2020]
| Article 45-2 (Exemption for Research Institutes for Support of Research on Basic Science) |
[This Article Newly Inserted on Dec. 26, 2017]
| Article 46 (Reduction for Support for Promotion of Research and Development) |
| (1) | Acquisition tax shall be reduced by 35/100 [50/100 in cases of a research institute affiliated with an enterprise to conduct research on new growth or source technologies prescribed by Presidential Decree (hereafter in this Article, referred to as a “research institute affiliated with an enterprise in relation to new growth or source technologies”)] on real estate (limited to land appurtenant to an area within seven times the projected horizontal area of the building; hereafter in this Article, the same shall apply) acquired by an enterprise to use directly for a research institute affiliated with the enterprise prescribed by Presidential Decree (hereafter in this Article, referred to as "research institute affiliated with an enterprise"), ; and property tax shall be reduced by 35/100 (50/100 in cases of a research institute affiliated with an enterprise related to new growth or source technologies) on real estate used directly for a research institute affiliated with an enterprise as at the tax base date, until December 31, 2025, respectively. <Amended on Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Jan. 15, 2020; Mar. 14, 2023> |
| (2) | Notwithstanding paragraph (1), acquisition tax shall be reduced by 35/100 on real estate acquired by an enterprise group, etc. subject to limitations on mutual investment prescribed in Article 31 (1) of the Monopoly Regulation and Fair Trade Act, to use directly for a research institute affiliated therewith, to be installed outside an over-concentration limitation zone prescribed in Article 6 (1) 1 of the Seoul Metropolitan Area Readjustment Planning Act; and property tax shall be reduced by 35/100 (50/100 in cases of a research institute affiliated with an enterprise related to new growth or source technologies) on real estate used directly for a research institute affiliated therewith as at the tax base date, until December 31, 2025, respectively. <Amended on Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (3) | Notwithstanding paragraph (1), acquisition tax shall be reduced by 50/100 (65/100 in cases of a research institute affiliated with an enterprise related to new growth or source technologies) on real estate acquired by a middle-standing enterprise under Article 10 (1) 1 (a) (ii) of the Act on Special Cases concerning Taxation, to use directly for a research institute affiliated therewith; and property tax shall be reduced by 50/100 (65/100 in cases of a research institute affiliated with an enterprise related to new growth or source technologies) on real estate used directly for a research institute affiliated therewith as at the tax base date, until December 31, 2025, respectively. <Amended on Dec. 28, 2021; Mar. 14, 2023> |
| (4) | Notwithstanding paragraph (1), acquisition tax shall be reduced by 60/100 (75/100 in cases of a research institute affiliated with an enterprise related to new growth or source technologies) on real estate acquired by a small or medium enterprise defined in Article 2 (1) of the Framework Act on Small and Medium Enterprises (hereafter in this Chapter, referred to as "small or medium enterprise"), to use directly for a research institute affiliated therewith; and property tax shall be reduced by 50/100 (65/100 in cases of a research institute affiliated with an enterprise related to new growth or source technologies) on real estate used directly for a research institute affiliated therewith as at the tax base date, until December 31, 2025, respectively. <Amended on Dec. 29, 2015; Dec. 27, 2016; Jan.15, 2020; Dec. 28, 2021; Mar. 14, 2023> |
| (5) | For the purposes of paragraphs (1) through (4), where any research institute falls under any of the following cases, the reduced portion of acquisition tax and property tax shall be collected as a penalty: <Amended on Dec. 26, 2017; Jan. 15, 2020; Dec. 28, 2021> |
| 3. | Where the relevant enterprise spends research and development expenses for new growth or source technologies but fails to receive the result of deliberation that the technology under the research and development falls under attached Table 7 of the Enforcement Decree of the Act on Special Cases concerning Taxation, from the deliberation committee for new growth or source technologies under Article 9 (11) of that Act within three years from the date on which it obtains recognition as a research institute affiliated with an enterprise (limited to the portion additionally reduced as a research institute affiliated with an enterprise in relation to new engine or source technologies); |
| 3. | Where it is closed or used for any other purpose before the lapse of four years after its establishment without just grounds. |
[This Article Wholly Amended on Dec. 31, 2014]
| Article 47 (Reduction for the Korea Environment Corporation) |
Acquisition tax shall be reduced until December 31, 2025, as follows, on real estate acquired by the Korea Environment Corporation incorporated pursuant to the Korea Environment Corporation Act, to use directly for projects prescribed in Article 17 (1) of the same Act; and property tax shall be reduced by 25/100 on real estate used directly for its projects as at the tax base date, until December 31, 2025: <Amended on Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Dec. 28, 2021; Mar. 14, 2023> [This Article Wholly Amended on Dec. 31, 2014]
| Article 47-2 (Reduction for Buildings Certified as Green Architecture) |
| (1) | Acquisition tax on a building (limited to the portion of a building defined in Article 2 (1) 2 of the Building Act; hereafter in this Article, the same shall apply) newly built (including expansion or remodeling; hereafter in this Article, the same shall apply) meeting all of the following requirements (including any building that meets all of the following requirements within 70 days from the date of acquisition), shall be reduced by the scope between 3/100 and 10/100 until December 31, 2023, as prescribed by Presidential Decree: <Amended on Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020> |
| (2) | Acquisition tax on a newly-built building, which has obtained the certification of a zero-energy building pursuant to Article 17 of the Green Buildings Construction Support Act (hereafter in this Article, referred to as "certification of a zero-energy building") (including any building that obtains the certification of a zero-energy building within 100 days from the date of acquisition) shall be reduced by the scope of between 15/100 and 20/100 until December 31, 2023, as prescribed by Presidential Decree. <Amended on Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020> |
| (3) | Acquisition tax on a newly-built energy-efficient environmentally-friendly house prescribed by Presidential Decree shall be reduced by 10/100 until December 31, 2023. <Newly Inserted on Dec. 26, 2017; Dec. 29, 2020> |
| (4) | The reduced portion of acquisition tax on any building falling under the following cases, among buildings for which acquisition tax has been reduced pursuant to paragraph (1) or (2), shall be collected as a penalty: <Amended on Dec. 24, 2018> |
| 1. | If acquisition tax has been reduced on condition to meet the requirements prescribed in each subparagraph of paragraph (1) within 70 days from the date of acquisition, cases where such requirements are not met within 70 days; |
| 2. | If acquisition tax has been reduced on condition to meet the requirements to obtain certification of a zero-energy building within 100 days from the date of acquisition, cases where certification of zero-energy building is not obtained within 100 days; |
| 3. | Cases where any certification of green architecture, energy efficiency rating or zero-energy building is revoked within three years from the date of acquisition. |
| (5) | Property tax on a building meeting at least the criteria prescribed by Presidential Decree, certified as green architecture or energy efficiency rating, shall be reduced by the scope of between 3/100 and 15/100 until December 31, 2018 only once, as prescribed by Presidential Decree, for five years from the date of such certification (or from the date of construction completion where it is certified before the date construction of such building is completed): Provided, That this shall not apply where certification of green architecture or certification of an energy efficiency rating has been revoked as at the tax base date. <Amended on Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018> |
| (6) | For the purposes of paragraph (5), where the date green architecture is certified and the date an energy efficiency rating is certified differ, the period during which reduction is granted shall be calculated based on the earlier of the two dates; and the detailed method for calculating the amount of tax to be reduced shall be prescribed by Presidential Decree. <Amended on Dec. 26, 2017> |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 47-3 (Reduction for Buildings Certified as Using New and Renewable Energy) |
| (1) | Acquisition tax on a newly-built building for business certified as a building using new and renewable energy pursuant to Article 12-2 (1) of the Act on the Promotion of the Development, Use and Diffusion of New and Renewable Energy, shall be reduced by a rate prescribed by Presidential Decree, based upon the rate of supply of new and renewable energy, by between 5/100 and 15/100 of acquisition tax until December 31, 2015. |
| (2) | Where certification of a building using new and renewable energy is revoked within three years from the date of acquisition thereof, among the buildings for which acquisition tax is reduced under paragraph (1), the reduced portion of acquisition tax shall be collected as a penalty. |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 47-4 (Reduction or Exemption for Buildings with Seismic Performance) |
| (1) | In cases of a building exempt from the examination of its structural safety prescribed in Article 48 (2) of the Building Act or exempt from the examination of its structural safety under the Building Act as at the time it was constructed (limited to the portion of a building defined in Article 2 (1) 2 of the Building Act; hereafter in this Article, the same shall apply), with seismic performance verified under Article 16-2 of the Act on the Preparation for Earthquakes and Volcanic Eruptions, local taxes shall be reduced or exempted until December 31, 2021, as follows: Provided, That the same shall not apply to property tax after the ownership of such building is transferred: <Amended on Jul. 24, 2015; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Where any construction works defined in Article 2 (1) 8 of the Building Act are conducted, 50/100 of acquisition tax shall be reduced; and 50/100 of property tax shall be reduced for five years from the date the first liability to pay property tax on such building arises; |
| 2. | Where any substantial repair defined in Article 2 (1) 9 of the Building Act is conducted, the relevant building shall be exempted from acquisition tax; and property tax thereon shall be exempted for five years from the date the first liability to pay property tax on such building arises. |
| (2) | For the purposes of paragraph (1), Article 47-2 (6) shall apply mutatis mutandis to the method for calculating the amount of property tax. <Amended on Dec. 31, 2014; Dec. 26, 2017; Dec. 24, 2018> |
| (3) | Acquisition tax shall be reduced by the rate prescribed by Presidential Decree within the scope from 5/100 to 10/100, until December 31, 2024, on a newly-constructed building that is certified as an earthquake-safe facility pursuant to Article 16-3 (1) of the Act on the Prevention on Earthquakes and Volcanic Eruptions: Provided, That the building subject to the reduction of local tax pursuant to paragraph (1) shall not be governed by the main clause. <Amended on Dec. 29, 2020; Dec. 28, 2021> |
[This Article Newly Inserted on Aug. 6, 2013]
[Title Amended on Dec. 24, 2018]
[Moved from Article 92-3 <Dec. 31, 2014>]
| Article 48 (Reduction or Exemption for National Park Management Projects) |
Acquisition tax shall be reduced by 25/100 on real estate acquired by the Korea National Park Service under the Korea National Park Service Act, to use directly for park management projects, including installation, maintenance, management, etc. of park facilities; and property tax shall be reduced by 25/100 on real estate used directly for such projects as at the tax base date, until December 31, 2025, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015; May 29, 2016; Dec. 27, 2016; Oct. 16, 2018; Jan. 15, 2020; Mar. 14, 2023>
| Article 49 (Reduction or Exemption for Preventing Marine Pollution) |
Local taxes shall be reduced until December 31, 2025, as follows, on real estate (excluding rental real estate; hereafter in this Article, the same shall apply) acquired by the Korea Marine Environment Corporation under the Marine Environment Management Act, to use directly for projects prescribed in Article 97 of the same Act, and on ships acquired to use for preventing marine pollution and for managing the marine environment: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Oct. 31, 2017; Jan. 15, 2020; Mar. 14, 2023> | 3. | Acquisition tax and property tax shall be reduced by 25/100, respectively, on ships equipped with marine pollution prevention facilities. |
| Article 49-2 (Reduction for Radio Stations for 5G Mobile Communications) |
Registration license tax shall be reduced by 50/100 until December 31, 2023, on the license for radio stations established by a domestic corporation in the areas other than over-concentration limitation zones to provide IMT-2020 services.
[This Article Newly Inserted on Dec. 29, 2020]
SECTION 4 Support for Culture and Tourism
| Article 50 (Exemption for Religious Organizations and Confucian Temples) |
| (1) | Acquisition tax shall be exempted on real estate acquired by a religious organization or Confucian temple, to use directly for religious activities or memorial service for ancestors: Provided, That the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Dec. 29, 2015; Dec. 27, 2016> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used for the relevant purposes without just grounds, within three years from the date of acquisition; |
| 3. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (2) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act, shall be exempted, respectively, on real estate (including land appurtenant to a building prescribed by Presidential Decree) used directly by a religious organization or Confucian temple prescribed in paragraph (1), for the relevant business (including where a religious organization or Confucian temple uses a third party's real estate gratuitously for the relevant business) as at the tax base date: Provided, That where such property is used commercially, or a fee is charged for the use thereof; or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof, shall be exempted. <Amended on Jan. 1, 2014; Dec. 29, 2015; Jan. 15, 2020> |
| (3) | Registration license tax shall be exempted on a license for a religious organization or Confucian temple prescribed in paragraph (1), to use directly for its business; and the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act; hereafter in this paragraph, the same shall apply) and pro rata employee portion of resident tax, shall be exempted, respectively, on the relevant organization: Provided, That no pro rata business place portion and pro rata employee portion of resident tax prescribed by Presidential Decree, shall be exempted when related to profit-making business. <Amended on Jan. 1, 2014; Dec. 29, 2015; Dec. 29, 2020> |
| (4) | Where generated electric power, etc. is supplied gratuitously to a religious organization or Confucian temple, local resource and facility tax prescribed in Article 146 (1) and (2) of the Local Tax Act, shall be exempted. <Amended on Dec. 29, 2015; Dec. 26, 2017>> |
| (5) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act), shall be exempted on the forest of a temple and on the traditional temple preservation area defined in subparagraph 3 of Article 2 of the Korean Traditional Temples Preservation and Support Act, owned by a traditional temple prescribed in subparagraph 1 of the same Article: Provided, That where such property is used commercially, or a fee is charged for use thereof; or part of such property is not used directly for its original purpose, no such tax on such property or part thereof, shall be exempted. <Amended on Dec. 29, 2015; Dec. 26, 2017> |
| (6) | The pro rata business place portion (limited to a tax amount imposed pursuant to Article 81 (1) 1 of the Local Tax Act of resident tax shall be exempted on churches, catholic churches, Buddhist temples, Buddhist shrines, Confucian temples, etc. in which religious ceremonies are performed, among the places of business of a corporation. <Amended on Dec. 29, 2015; Dec. 29, 2020> |
[Title Amended on Dec. 29, 2015]
| Article 51 (Reduction or Exemption for Newspaper or Communications Business) |
The pro rata business place portion (limited to a tax amount imposed pursuant to Article 81 (1) 1 of the Local Tax Act) and pro rata employee portion of resident tax on a place of business conducting newspaper or communications business to which the Act on the Promotion of Newspapers applies, shall be reduced, respectively, by 50/100 until December 31, 2024. <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 29, 2015; Dec. 24, 2018; Dec. 29, 2020; Dec. 28, 2021>
| Article 52 (Special Taxation for Support for Culture and Arts) |
| (1) | Real estate acquired by a culture and arts organization prescribed by Presidential Decree (hereafter in this paragraph, referred to as "culture and arts organization") for direct use in culture and arts projects, shall be exempted from acquisition tax; and real estate used directly for culture and arts projects as at the tax base date, shall be exempted from property tax until December 31, 2024, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Dec. 28, 2021> |
| (2) | Real estate acquired by a sports organization prescribed by Presidential Decree for direct use in sports promotion projects, shall be exempted from acquisition tax; and real estate used directly for sports promotion projects as at the tax base date, shall be exempted from property tax until December 31, 2024, respectively. <Amended on Jan. 15, 2020; Dec. 28, 2021> |
| (2) | Acquisition tax on a library established pursuant to the Libraries Act, shall be imposed at 20/1,000 until December 31, 2019, notwithstanding the tax rate prescribed in Article 11 (1) of the Local Tax Act; and registration license tax on the registration or enrollment of such library, shall be exempted until December 31, 2019: Provided, That the exempted portion of acquisition tax and registration license tax shall be collected as a penalty in any of the following cases: <Amended by Act No. 10417, Dec. 27, 2010; Act No. 11138, Dec. 31, 2011; Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (3) | If real estate falls under any of the following cases after being exempted from acquisition tax pursuant to paragraphs (1) and (2), the exempted portion of acquisition tax shall be collected as a penalty: <Newly Inserted on Jan. 15, 2020> |
| 1. | Where such real estate is not used for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 2. | Where such real estate is sole or donated or used for any other purpose, after having been used directly for the relevant purposes for less than two years; |
| 3. | Where such real estate falls under grounds prescribed by Presidential Decree, such as cancellation of establishment permission under relevant statutes within three years from the date of acquisition. |
| Article 53 (Reduction or Exemption for Social Organizations) |
Real estate acquired by a national trust corporation prescribed by the Act on the National Trust of Cultural Heritages and National Environment Assets, to use directly for its unique duties, shall be exempted from acquisition tax; and real estate used directly for its unique duties as at the tax base date, shall be exempted from property tax, until December 31, 2024, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Jan. 15, 2020; Dec. 28, 2021; Mar. 14, 2023>
| Article 54 (Special Taxation for Tourist Complexes) |
| (1) | Acquisition tax on real estate acquired by an implementer of a tourism complex development project prescribed in Article 55 (1) of the Tourism Promotion Act, to implement a tourism complex development project, shall be reduced by 25/100 until December 31, 2025, and a rate of up to 25/100 prescribed by municipal ordinance, in consideration of circumstances such as creating a tourism complex in the relevant area, financial situation, etc., may be further reduced: Provided, That the reduced acquisition tax shall be collected as a penalty in any of the following cases, but in cases under subparagraphs 2 through 4, only the relevant portion shall be collected as a penalty: <Amended on Dec. 31, 2011; Jan. 1, 2014; Dec. 31, 2014; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 3. | Where the implementer fails to sell in parcel or lease such tourism complex within three years from the date on which he or she have undergone a completion inspection under Article 68-2 of the Tourism Promotion Act, without just grounds; |
| 4. | Where such real estate is sold or donated, or used for any other purpose after having been used directly for the relevant purposes for less than two years. |
| (3) | No tax rate prescribed in Article 13 (1) through (4) of the Local Tax Act shall apply to real estate acquired to operate hotel business prescribed in Article 3 (1) 2 (a) of the Tourism Promotion Act, when acquisition tax is imposed by no later than December 31, 2014, limited to where a local municipal ordinance provides for the application of the standard tax rate in such real estate, notwithstanding Article 4 (2) 1; and no tax rate prescribed in Article 28 (2) and (3) of the Local Tax Act shall apply to the registration of a corporation (including where capital or amount of investment is increased within five years after the year of incorporation), when registration license tax is imposed by not later than December 31, 2014, limited to where a local municipal ordinance provides for the application of the standard tax rate in such real estate, notwithstanding Article 4 (2) 1: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011Jan. 1, 2014> |
| 1. | Where such real estate is not used for the relevant purposes without just grounds, within three years from the date of acquisition; |
| 2. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (4) | Deleted. <Jan. 1, 2014> |
| (5) | Acquisition tax on real estate acquired by the following foundations, enterprises, or project undertakers, to use directly for their unique duties and property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) on real estate used for their unique duties as at the tax base date, may be reduced or exempted until December 31, 2019, respectively, as prescribed by a local municipal ordinance. In such cases, the rate of reduction or exemption shall be determined at within 50/100 (or 100/100 in cases falling under subparagraph 1): <Amended on Jan. 1, 2014; Dec. 29, 2015; Dec. 27, 2016> |
| 1. | Acquisition tax shall be exempted until December 31, 2017, where the athlete villages are acquired by constructing them among facilities directly related to the Games, located in Pyeonchang-gun; |
| Article 55 (Reduction or Exemption for Cultural Heritage) |
| (1) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) on land (excluding a historical place that the owner uses or profits from) designated as a historical place pursuant to the Act on Conservation and Utilization of Cultural Heritage shall be exempted: Provided, That where such property is used commercially, or a fee is charged for the use thereof, or part of such property is not used directly for its original purpose, such taxes on such property or part thereof shall be exempted. <Amended on Dec. 29, 2015; Aug. 8, 2023> |
| 2. | Property tax shall be reduced by 50/100 on State-registered cultural heritage referred to in Article 6 (1) of the Act on Conservation and Utilization of Morder and Contemporary Cultural Heritage and on land appurtenant thereto. |
[Title Amended on Aug. 8, 2023]
[Enforcement Date: Sep. 15, 2024] Article 55
SECTION 5 Support for Corporate Structure, Financial Adjustment
| Article 56 (Reduction or Exemption for Support for Credit Guarantee of Enterprises) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2014, on real estate acquired by the Korea Credit Guarantee Fund under the Credit Guarantee Fund Act, to use directly for credit guarantee duties prescribed in Article 23 (1) 2 of the same Act. <Amended on Jan. 1, 2013> |
| (3) | Local taxes shall be reduced until December 31, 2025, as follows, on a credit guarantee foundation established pursuant to the Regional Credit Guarantee Foundation Act: <Newly Inserted on Dec. 31, 2011; Jan. 1, 2014; Dec. 29, 2015; Dec. 27, 2016> |
| 2. | Deleted; <Dec. 27, 2016> |
| 3. | Property tax shall be reduced by 50/100 on real estate used directly for credit guarantee duties as at the tax base date. |
| Article 57 Deleted. <Dec. 31, 2014> |
| Article 57-2 (Reduction or Exemption for Merger and Split-off of Enterprises) |
| (1) | Acquisition tax on property for business acquired by not later than December 31, 2024 by transfer in the course of a merger prescribed by Presidential Decree as a merger that falls under Article 44 (2) or (3) of the Corporate Tax Act, shall be reduced by 50/100 (or 60/100, where a merger takes place between small and medium enterprises referred to in Article 2 (1) of the Framework Act on Small and Medium Enterprises, or where a corporation merges with a corporation engaged in technology innovative business prescribed by Presidential Decree); however, if the relevant property falls under the proviso to Article 15 (1) 3 of the Local Tax Act, acquisition tax calculated after deducting an amount determined in the following subparagraphs, shall be reduced: Provided, That the reduced portion of acquisition tax shall be collected as a penalty, where any ground prescribed under Article 44-3 (3) of the Corporate Tax Act arises (excluding cases falling under the proviso of the same paragraph) within three years from the date the merger is registered: <Amended on Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | In cases of property acquired under Article 13 (1) of the Local Tax Act, an amount calculated by applying 300/100 of the base rate for heavy taxation referred to in the same Article (hereinafter referred to as "base rate for heavy taxation"); |
| (2) | Property acquired by any of the following corporations in the course of a merger under Article 44 (2) of the Corporate Tax Act, shall be exempted from acquisition tax until December 31, 2024; and registration license tax on the registration of property acquired in the course of a merger, within three years from the date of a merger, shall be reduced by 50/100 until December 31, 2024: Provided, That the exempted portion of acquisition tax shall be collected as a penalty, where any ground prescribed under Article 44-3 (3) of the Corporate Tax Act arises (excluding cases falling under the proviso to the same paragraph) within three years from the date the merger is registered: <Amended on Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| 4. | Deleted. <Dec. 24, 2018> |
| (3) | Acquisition tax on any of the following property acquired until December 31, 2024 shall be reduced by 75/100: Provided, That in cases falling under subparagraph 1, acquisition tax shall be reduced by 75/100 until December 31, 2019, 50/100 until December 31, 2020, and 25/100 until December 31, 2024, respectively; and in cases falling under subparagraph 7, acquisition tax shall be exempted. <Amended on Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| 4. | Deleted; <Dec. 28, 2021> |
| 5. | Property for business (excluding property transferred to a small and medium enterprise falling under lease and supply of real estate in accordance with the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea pursuant to Article 22 of the Statistics Act) acquired by a corporation newly incorporated by or surviving consolidation among small or medium enterprises prescribed in Article 31 of the Restriction of Special Taxation Act: Provided, That the reduced portion of acquisition tax shall be collected as a penalty, where any ground prescribed under paragraph (7) of the same Article arises within five years from the date the property for business is acquired; |
| 6. | Deleted; <Dec. 24, 2018> |
| (4) | Acquisition tax on fixed assets for business acquired (excluding lease and supply of real estate in accordance with the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea pursuant to Article 22 of the Statistics Act) until December 31, 2024 due to investment in kind, transfer, or acquisition of business prescribed in Article 32 of the Restriction of Special Taxation Act, shall be reduced by 75/100: Provided, That where the relevant business is closed, the relevant property is disposed of (including lease), or the relevant stocks are disposed of within five years from the date of acquisition without just grounds prescribed by Presidential Decree, the reduced portion of acquisition tax shall be collected as a penalty. <Amended on Dec. 29, 2015; Dec. 24, 2018; Aug. 12, 2020; Dec. 28, 2021> |
| (5) | In any of the following cases, acquisition tax shall be exempted until December 31, 2024, deeming that an oligopolistic stockholder has acquired the real estate, etc. (referring to real estate, etc. referred to in Article 7 (1) of the Local Tax Act) of the relevant corporation prescribed in Article 7 (5) of the same Act: <Amended on Dec. 22, 2015; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Nov. 26, 2019; Dec. 29, 2020; Aug. 17, 2021; Dec. 28, 2021> |
| 2. | Where a financial institution acquires stocks or shares of a corporation due to conversion of a loan extended to the relevant corporation to an investment; |
| 5. | Where the Korea Asset Management Corporation acquires stocks or shares in the course of converting investment of non-performing loans undertaken pursuant to Article 26 (1) 1 (a) of the Act on the Establishment of Korea Asset Management Corporation; |
| (6) | Where the National Agricultural Cooperative Federation incorporated under the Agricultural Cooperatives Act (hereafter in this Article, referred to as the "Federation"), restructures its business under the same Act, registration license tax on the registrations classified in subparagraphs 1 and 2, shall be exempted until December 31, 2017; and in cases falling under subparagraph 3, acquisition tax shall be exempted: <Amended on Dec. 27, 2016> |
| 2. | Where for-profit business is transferred under Article 6 of the Addenda to the Agricultural Cooperative Act (Act No. 10522): any of the following registrations: |
| (a) | Registration to incorporate a for-profit subsidiary split off from the Federation; |
| (7) | Where the Korea Development Bank merges with the KDB Financial Group Incorporated and the Korea Finance Corporation incorporated under the Korea Finance Corporation Act pursuant to Article 3 (1) of the Addenda to the Korea Development Bank Act (Act No. 12663), registration license tax on the registration of the relevant capital increase, shall be reduced by 90/100 until December 31, 2015. |
| (8) | Where a domestic corporation falling under Article 4 (1) of the Special Act on the Corporation Revitalization promotes restructuring of the enterprise, such as a merger, in accordance with an enterprise restructuring plan approved, or the amendment of which is approved, by the head of the competent authority, as prescribed in Article 10 or 12 of that Act, registration license tax on the registration of the relevant corporation, shall be reduced by 50/100 until December 31, 2024: Provided, That the reduced portion of registration license tax shall be collected as a penalty, where the approval of the enterprise restructuring plan is cancelled pursuant to Article 13 of the same Act. <Newly Inserted on Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Jan .15, 2020; Dec. 28, 2021> |
| (9) | Where the National Federation of Fisheries Cooperatives incorporated under the Fisheries Cooperatives Act (hereafter in this paragraph, referred to as the "Federation"), is split off as prescribed by Presidential Decree, local taxes shall be exempted as follows: <Newly Inserted on Dec. 29, 2015> |
| 1. | Acquisition tax on property acquired by a subsidiary newly incorporated in the course of the split-off as prescribed by Presidential Decree (hereafter in this paragraph, referred to as the "Suhyup Bank") by the relevant split-off, shall be exempted until December 31, 2016; |
| 2. | Registration license tax on registration to incorporate the Suhyup Bank, shall be exempted until December 31, 2016. |
| (10) | Where a merger takes place between financial companies falling under Article 44 (2) of the Corporate Tax Act after obtaining authorization from the Financial Services Commission under Article 4 of the Act on the Structural Improvement of the Financial Industry, acquisition tax on property acquired by a financial institution in the course of the merger shall be reduced by 50/100 until December 31, 2024 and registration license tax on property registered within three years after the acquisition thereof in the course of the merger shall be reduced by 50/100 until December 31, 2024: Provided, That reduced portion of acquisition tax shall be collected as a penalty, where any ground prescribed in subparagraphs of Article 44-3 (3) of the Corporate Tax Act occurs (excluding cases falling under the proviso to the same paragraph) within three years from the date the merger is registered: <Newly Inserted on Dec. 24, 2018> |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 57-3 (Reduction or Exemption for Improvement of Financial Structure of Enterprises) |
| (1) | Any of the following property acquired shall be exempted from acquisition tax until December 31, 2024: <Amended on Dec. 22, 2015; Dec. 29, 2015; Dec. 24, 2018; Feb. 18, 2020; Dec. 28, 2021> |
| 3. | Property that a cooperative prescribed in the Fisheries Cooperatives Act or a mutual finance depositor protection fund prescribed in the Act on the Prevenetion of Insolvency and Structural Improvement of Fisheries Cooperatives, acquires from an insolvent cooperative in receipt of a determination to take timely corrective measures prescribed in Article 4-2 of that Act (limited to an order to transfer a business or contract) or a determination to transfer contracts prescribed in Article 10 (2) of the same Act; |
| (2) | Property acquired by the Korea Asset Management Corporation pursuant to Article 26 (1) 3 (a) and (b) of the Act on the Establishment of Korea Asset Management Corporation, shall be exempted from acquisition tax until December 31, 2024. <Amended on Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018; Nov. 26, 2019; Aug. 17, 2021; Dec. 28, 2021> |
| (3) | Where the Korea Asset Management Corporation acquires assets owned by a small or medium enterprise pursuant to Article 26 (1) 2 (d) of the Act on the Establishment of Korea Asset Management Corporation, acquisition tax shall be reduced by 50/100 until December 31, 2023. <Newly Inserted on Dec. 26, 2017; Nov. 26, 2019; Dec. 29, 2020; Aug. 17, 2021> |
| (4) | Where a small or medium enterprise that sells assets to the Korea Asset Management Corporation pursuant to paragraph (3) acquires the assets within ten years from the date of sale, acquisition tax shall be exempted until December 31, 2023. <Newly Inserted on Dec. 28, 2021> |
| (5) | Where the Korea Asset Management Corporation acquires the asset of a small or medium enterprise after fulfilling the requirements prescribed by Presidential Decree, until December 31, 2023, with a condition to lease such asset to support the normalization of management of the small or medium enterprise and leases such asset to the relevant small and medium enterprise, property tax shall be reduced by 50/100 for five years from the date the first tax liability arises regarding the relevant asset. <Newly Inserted on Dec. 26, 2017; Dec. 29, 2020; Dec. 28, 2021> |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 57-2 (Reduction or Exemption for Support for Residential Stabilization) |
Acquisition tax shall be reduced by 50/100 until December 31, 2023 on housing acquired by the Korea Asset Management Corporation established under the Act on Establishment of Korea Asset Management Corporation from a person who is delinquent on his or her mortgage payment (hereafter in this Article, referred to as “person in arrears”) with a condition to enter into a lease contract with the person in arrears to have the person live continuously in the housing in order to support the payment of debt and residential stabilization; and where the housing is acquired after January 1, 2021 and is leased to the relevant person in arrears as at the tax base date, property tax shall be reduced by 50/100 for five years from the date the first tax liability arises regarding the relevant housing.
[This Article Newly Inserted on Dec. 29, 2020]
| Article 58 (Special Taxation for Venture Businesses) |
| (1) | Acquisition tax and property tax shall be reduced by 50/100 until December 31, 2023, respectively, on real estate acquired (including acquisition through the exercise of right of redemption prescribed in Article 41 of the Industrial Cluster Development and Factory Establishment Act) to sell in lots or lease after development and construction of a facility to cluster venture businesses or an area to cluster new technology-based businesses, designated pursuant to the Act on Special Measures for the Promotion of Venture Businesses: Provided, That the reduced portion of acquisition tax and property tax shall be collected as a penalty, where a facility to cluster venture businesses or an area to cluster new technology-based businesses is not developed and constructed within three years from the date of acquisition, without just grounds; where the designation of a facility to cluster venture businesses or an area to cluster new technology-based businesses is cancelled within five years from the date such real estate is acquired; or where such real estate is used for any other purpose within five years from the date it meets the requirements prescribed in Article 17-3 or 18 (2) of the Act on Special Measures for the Promotion of Venture Businesses. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020> |
| (2) | When acquisition tax, registration license tax, and property tax are imposed on a person (excluding persons not constituting a venture business, among those who occupy a facility to cluster venture businesses) who occupies a facility to cluster venture businesses designated pursuant to the Act on Special Measures for the Promotion of Venture Businesses or a technopark constructed pursuant to the Act on Special Cases concerning Support of Technoparks, the tax rate prescribed in Articles 13 (1) through (4), 28 (2) and (3), and 111 (2) of the Local Tax Act, shall not apply until December 31, 2023. <Amended on Dec. 27, 2010; Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 29, 2020> |
| (3) | Acquisition tax shall be reduced by 50/100 until December 31, 2023, on real estate acquired by a person (including persons who intend to lease real estate for factories prescribed by Presidential Decree to small or medium business operators) who intends to construct or expand a building prescribed by Presidential Decree, as an industrial building or a building for a research facility or pilot production (hereafter in this Article, referred to as "industrial building, etc."), in an area to cluster new-technology based businesses designated pursuant to Article 17-2 of the Act on Special Measures for the Promotion of Venture Businesses; and property tax on such real estate shall be reduced by 50/100 for three years from the date the first liability to pay property tax on such real estate arises: Provided, That the reduced portion of acquisition tax or property tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 27, 2016; Dec. 26, 2017; Dec. 29, 2020> |
| 1. | Where such real estate is not used for the relevant purposes without just grounds, within three years from the date of acquisition; |
| 2. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| 2. | Property tax shall be reduced by 35/100 until December 31, 2025 on real estate used directly for its unique duties in a venture business development and promotion zone prescribed in subparagraph 1 as at the tax base date. In such cases, the head of a local government may additionally reduce it by the rate prescribed by municipal ordinance up to 15/100, in consideration of the financial status, etc. of the relevant area. |
| Article 58-2 (Reduction or Exemption for Knowledge Industry Centers) |
| 1. | Acquisition tax shall be reduced by 35/100 on real estate acquired to use directly for facilities prescribed in Article 28-5 (1) 1 and 2 of the Industrial Cluster Development and Factory Establishment Act (hereafter in this Article, referred to as "business facilities") by new construction or expansion (including land appurtenant to the newly constructed or expanded portion; hereafter in this Article, the same shall apply) and real estate acquired by new construction or expansion to sell it in parcels or rent for business facilities (limited to cases of sale in parcels or rent for small or medium enterprises defined in Article 2 of the Framework Act on Small and Medium Enterprises; hereafter in this Article, the same shall apply): Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| (a) | Where such real estate is acquired for direct use and falls under any of the following cases: |
| (i) | Where construction works do not begin without just grounds, within one year from the date of acquisition; |
| (ii) | Where the person fails to use such real estate directly for business facilities without just grounds, within one year from the date of acquisition; |
| (iii) | Where such real estate is sold or donated, or used for any other purpose, after having been used directly for the relevant purpose for less than four years; |
| (b) | Where such real estate is acquired to sell in parcel or lease and falls under any of the following cases: |
| (i) | Where construction works do not begin without just grounds, within one year from the date of acquisition; |
| (ii) | Where the person fails to sell in parcel or lease business facilitates within five years from the date of acquisition or uses it for any other purpose; |
| 2. | Property tax shall be reduced by 35/100 on real estate used directly for business facilities, or used directly for the duties of sale in parcels or for the duties of lease for such business facilities as at the tax base date for five years from the date the first liability to pay property tax on such real estate arises. |
| 1. | Acquisition tax shall be reduced by 35/100 on real estate acquired by no later than December 31, 2025, to use directly for business facilities: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: |
| (a) | Where such real estate is not used for the relevant purposes without just grounds, within one year from the date of acquisition; |
| (b) | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than four years; |
| 2. | Property tax shall be reduced by 35/100 until December 31, 2025 on real estate used directly for business facilities as at the tax base date for five years from the date the first liability to pay property tax on such real estate arises. |
[This Article Newly Inserted on Dec. 31, 2011]
| Article 58-3 (Reduction or Exemption for Small or Medium Start-Up Enterprises) |
| (1) | Acquisition tax on real estate acquired by a small or medium enterprise incorporated in areas other than over-concentration limitation zones by not later than December 31, 2023 within four years (five years in cases of a youth start-up enterprise prescribed by Presidential Decree) from the date prescribed by Presidential Decree (hereafter in this Article, referred to as the “date of incorporation”) shall be reduced as prescribed in the following subparagraphs: <Amended on Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 75/100 on real estate acquired to continue the type of business that the enterprise has originally engaged in as at the date of incorporation; |
| 2. | Property tax on real estate (in cases of land appurtenant to a building, applicable only to the portion not exceeding the standard area for factory site prescribed by Presidential Decree or not exceeding the applicable multiple for each special-purpose area prescribed by Presidential Decree) used directly for the type of business that the enterprise has originally engaged in as at the date of incorporation) shall be exempted for three years from the date of incorporation; and shall be reduced by 50/100 for the following two years. |
| (2) | Local taxes on real estate acquired by an enterprise that is verified as a venture business pursuant to Article 25 of the Act on Special Measures for the Promotion of Venture Business (hereafter in this Article, referred to as a “small or medium startup enterprise”) within three years from the date of incorporation, among venture businesses defined in Article 2 (1) of that Act, which are incorporated by December 31, 2023, shall be exempted for four years (five years in cases of a youth startup venture enterprise prescribed by Presidential Decree) from the date the enterprise is verified for the first time (hereafter in this Article, referred to as “date of verification”), as prescribed in the following subparagraphs: <Amended on Dec. 29, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 75/100 on real estate acquired to continue the type of business that the enterprise has originally engaged in as at the date of incorporation; |
| 2. | Property tax on real estate (in cases of land appurtenant to a building, applicable only to the portion not exceeding the standard area for factory site prescribed by Presidential Decree or not exceeding the applicable multiple for each special-purpose area prescribed by Presidential Decree) used directly for the type of business that the enterprise has originally engaged in as at the date of incorporation shall be exempted for three years from the date of verification; and shall be reduced by 50/100 for the following two years. |
| (3) | Any of the following registrations shall be exempted from registration license tax: <Amended on Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017> |
| 1. | Registration to incorporate a small or medium start-up enterprise incorporated by not later than December 31, 2020 (including where the amount of capital or investment increases within four years from the date of incorporation); |
| (4) | The scope of small or medium start-up enterprises and small or medium start-up venture businesses shall be limited to small or medium enterprises operating the following types of business; in such cases, the type of business under subparagraphs 1 through 8 shall be those under the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statics Korea pursuant to Article 22 of the Statics Act: <Amended on Dec. 27, 2016; Dec. 24, 2018; Aug. 17, 2021> |
| 2. | Manufacturing business; |
| 3. | Construction business; |
| 4. | Information and communications business: Provided, That any of the following businesses shall be excluded herefrom: |
| (a) | Video viewing room operation business; |
| (b) | News agency business; |
| (c) | Business selling or brokering blockchain-based crypto assets specified in the classification system for the blockchain industry publicly notified by the Commissioner of the Statics Korea pursuant to Article 22 of the Statics Act; |
| 5. | Any of the following professional, scientific, and technical businesses (including engineering business prescribed by Presidential Decree: |
| (a) | Research and development business; |
| (b) | Advertising business; |
| (c) | Other scientific and technical service business; |
| (d) | Specialized design business; |
| (e) | Market research and public opinion polling business; |
| 6. | Any of the following business facilities management and business support services, rental and leasing businesses: |
| (a) | Business facilities management and landscape services; |
| (b) | Businesses of employment placement agencies and provision of human resources; |
| (c) | Security and guard services; |
| (d) | Security systems services; |
| 7. | Exhibition, convention, and trade fair organization agencies (excluding self-employed artists); |
| 8. | Water supply, sewage, waste management and materials recovery; |
| 9. | Logistics industry prescribed by Presidential Decree; |
| 11. | Tourist accommodation business, international conference business, and amusement facilities business under the Tourism Promotion Act, or tourist facilities business prescribed by Presidential Decree; |
| (5) | For the purposes of paragraphs (1) through (4), no reduction or exemption for a small or medium start-up venture business shall apply, where it is granted exemption of local tax as a small or medium start-up enterprise. <Newly Inserted on Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (1) through (4), none of the following cases shall be deemed a new business startup: <Newly Inserted on Dec. 27, 2016> |
| 1. | Where a previous business is succeeded to by a merger, division, investment in kind, or acquisition of business, or where a business of the same type is conducted through an acquisition or purchase of the assets used in the previous business: Provided, That where the assets used for the previous business are acquired or purchased to operate the same type of business and the ratio of the total value of the relevant assets to the total value of business assets prescribed by Presidential Decree, including land, buildings, and machinery, is less than 50/100 and falls short of the ratio determined by Presidential Decree, as at the time the business has commenced pursuant to Article 5 (2) of the Value-Added Tax Act, such cases shall be excluded; |
| 2. | Where a new corporation is incorporated by converting a business operated by a resident, into a corporation; |
| 3. | Where a business of the same type as the previous business closed is re-started following the closure of the previous business; |
| 4. | Where it is difficult to deem that a new business has been started, as it involves expanding the existing business or adding another business line, etc. |
| (7) | In any of the following cases, the reduced portion of acquisition tax pursuant to paragraph (1) 1 and (2) 1 shall be collected as a penalty: Provided, That this shall not apply in cases of consolidation under Article 31 (1) of the Act on Restriction on Special Cases concerning Taxation(hereafter in this Article, referred to as "consolidation among small or medium enterprises") and conversion into a corporation under Article 32 (1) of the same Act (hereafter in this Article, referred to as "conversion into a corporation"): <Newly Inserted on Dec. 27, 2016; Dec. 29, 2020> |
| 1. | Where the real estate is not used directly for the relevant business without just grounds, within three years from the date of acquisition; |
| 2. | Where the real estate is used for any other purpose, sold, or donated within three years from the date of acquisition; |
| 3. | Where the real estate is used for any other purpose, sold, or donated without being used directly for the relevant business for two consecutive years from the date of its first use. |
| (8) | Where any small or medium start-up enterprises or small or medium start-up venture businesses are consolidated among small or medium enterprises or converted into corporations before the period of reduction prescribed in paragraph (1) 1 and (2) 1 passes, such corporations are eligible for the application of paragraph (1) 1 and (2) 1 for the period of reduction, as prescribed by Presidential Decree: Provided, That the same shall apply only to property for business acquired before such consolidation among small or medium enterprises or conversion into corporations. <Amended on Dec. 27, 2016; Dec. 29, 2020> |
| (9) | A person seeking tax reduction or exemption for a small or medium start-up enterprise or a small or medium start-up venture business prescribed in paragraphs (1) through (4), shall submit an application for tax reduction or exemption prescribed by Ordinance of the Ministry of the Interior and Safety, to the head of the competent local government. <Amended on Dec. 27, 2016; Jul. 26, 2017> |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 59 (Reduction or Exemption for the Korea SMEs and Startups Agency) |
| (1) | Acquisition tax shall be reduced by 25/100 until December 31, 2025, on real estate for educational facilities acquired by the Korea SMEs and Startups Agency under the Small and Medium Enterprises Promotion Act, to train specialized technical human resources. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 26, 2017; Dec. 31, 2018; Dec. 29, 2020; Mar. 14, 2023> |
| (2) | Acquisition tax shall be reduced by 50/100 on real estate acquired by the Korea SMEs and Startups Agency under the Small and Medium Enterprises Promotion Act, to sell in lots or to rent to any small or medium business operator; and property tax shall be reduced by 50/100 on real estate used directly for the relevant business as at the tax base date, until December 31, 2019, respectively: Provided, That where it fails to sell in lots or to rent to any small or medium business operator within five years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 31, 2018; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (3) | Acquisition tax shall be reduced by 50/100 until December 31, 2025, on real estate for factories (excluding where the real estate already used for the relevant business, is acquired by succession; and where business has been suspended for at least 60 days as at the tax base date) first acquired by a person whose plan to engage in cooperation has been approved pursuant to Article 29 of the Small and Medium Enterprises Promotion Act (in cases of an over-concentration limitation zone and a Metropolitan area, limited to where approval has been obtained in an industrial complex prescribed in the Industrial Cluster Development and Factory Establishment Act), to use directly for the relevant business; and property tax on such real estate for factories that are used directly for the relevant business as at the tax base date shall be reduced by 50/100 for three years from the date the first liability for property tax on such real estate arises: Provided, That where such real estate is not used directly for factories without just ground within one year from the date of acquisition or such real estate is transferred for any other purpose than for factory or used for any other purpose within five years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 26, 2017; Dec. 29, 2020; Mar. 14, 2023> |
| (4) | Deleted. <Dec. 29, 2020> |
[Title Amended on Dec. 31, 2018]
| Article 60 (Special Taxation for Small and Medium Enterprise Cooperatives) |
| (1) | Acquisition tax shall be reduced by 50/100 until December 31, 2025, on real estate for joint facilities acquired by an association of small or medium enterprises (including business cooperatives, a federation, and a central association) established pursuant to the Small and Medium Enterprise Cooperatives Act for manufacturing, processing, taking orders on, selling, or transporting, goods of small or medium enterprises: Provided, That in cases of a cooperative or business cooperative established by merchants of a traditional market, as copartners, under the Special Act on the Development of Traditional Markets and Shopping Districts, and a cooperative and business cooperative established by business operators prescribed by Presidential Decree as copartners, acquisition tax shall be reduced by 75/100 until December 31, 2025. <Amended Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020; Mar. 14, 2023> |
| (2) | Acquisition tax on the acquisition of a newly-built building acquired by the Korea Federation of Small and Medium Business established pursuant to the Small and Medium Enterprise Cooperatives Act, for its central association, members, etc. to use, shall be imposed at 20/1,000 until December 31, 2022, notwithstanding the tax rate prescribed in Article 11 (1) 3 of the Local Tax Act: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020> |
| 1. | Where such building is used commercially within five years from the date of acquisition; |
| 2. | Where such building is not used directly for the relevant purposes without just grounds, within one year from the date of registration; |
| 3. | Where such building is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| 1. | Acquisition tax shall be reduced by 75/100 on real estate acquired by a person designated as an operator of a business incubator, to use directly for a business incubator; and property tax shall be reduced by 50/100 on such property, until December 31, 2023, respectively; |
| (4) | Local taxes shall be reduced until December 31, 2025, as follows, on a corporation prescribed by Presidential Decree, established by the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Special Self-Governing City Mayor, a Do Governor, or a Special Self-Governing Province Governor, to provide comprehensive support, such as providing information on management, industrial technology, and trade, to local small or medium enterprises defined in subparagraph 1 of Article 2 of the Act on the Fostering of Local Small and Medium Enterprises and Promotion of Their Innovation: <Newly Inserted on Dec. 31, 2011; Jan. 1, 2014; Dec. 29, 2015; Mar. 29, 2016; Dec. 27, 2016; Jan. 15, 2020; Jul. 27, 2021; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 50/100 on real estate acquired to use directly for its unique duties; |
| 2. | Deleted; <Dec. 27, 2016> |
| 3. | Property tax shall be reduced by 50/100 on real estate used directly for its unique duties as at the tax base date. |
| Article 61 (Reduction or Exemption for Urban Gas Business, etc.) |
| (1) | Acquisition tax and property tax shall be reduced by 50/100 until December 31, 2016, respectively, on gas pipelines acquired by the Korea Gas Corporation incorporated pursuant to the Korea Gas Corporation Act or by an urban gas service provider permitted pursuant to Article 3 of the Urban Gas Business Act, to use directly for urban gas business: Provided, That in cases of gas pipelines in the Special Metropolitan City and Metropolitan Cities, such taxes shall not be reduced. <Amended on Jan. 1, 2013; Dec. 29, 2015> |
| (2) | Acquisition tax and property tax shall be reduced by 50/100 until December 31, 2016, respectively, on heat transfer tubes acquired by the Korea District Heating Corporation incorporated pursuant to the Integrated Energy Supply Act or a district heating service provider permitted pursuant to Article 9 of the Integrated Energy Supply Act, to use directly for heat supply business: Provided, That in cases of heat transfer tubes in the Special Metropolitan City and Metropolitan Cities, such taxes shall not be reduced. <Amended on Jan. 1, 2013; Dec. 29, 2015> |
| Article 62 (Reduction or Exemption for Support for Mining) |
| (1) | Registration license tax shall be exempted until December 31, 2024 on a newly obtained or modified license, which relates to establishment, modification, transfer or other registration of a mining right. <Amended on Dec. 24, 2018; Dec. 28, 2021> |
| (2) | Acquisition tax shall be exempted until December 31, 2021 on the mining right to be obtained upon an application and standing trees acquired for use in mining. <Amended on Dec. 29, 2015; Dec. 24, 2018> |
| (3) | Property tax shall be reduced by 25/100 until December 31, 2019, on buildings and appurtenant land thereto (limited to such land, the area of which is within seven times the projected horizontal area of buildings) used by the Korea Mine Rehabilitation and Mineral Resources Corporation incorporated pursuant to the Korea Mine Rehabilitation and Mineral Resources Corporation Act directly for training facilities for masonry trainees or for facilities for training on commission of miners prescribed in Article 5 (1) 5 of the Mining Safety Act as at the tax base date. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Jan. 6, 2016; Dec. 27, 2016; Mar. 9, 2021> |
| Article 62-2 (Reduction and Exemption to Gas Stations among Oil Selling Business) |
Where a gas station, among petroleum sales business under Article 10 of the Petroleum and Alternative Fuel Business Act, enters into a contract for purchasing petroleum products with the Korea National Oil Corporation under the Korea National Oil Corporation Act, and meets requirements prescribed by Presidential Decree, such as the compulsory purchasing rates of petroleum products purchased from the Korea National Oil Corporation, property tax on real estate used directly for sale of oil products, shall be reduced by 50/100 until December 31, 2014. [This Article Newly Inserted on Jan. 1, 2013]
SECTION 6 Support for Transportation and Traffic
| Article 63 (Reduction or Exemption for Railroad Facilities) |
| (1) | Acquisition tax shall be reduced by 25/100 on real estate for railroad facilities defined in subparagraph 2 of Article 3 of the Framework Act on Railroad Industry Development (excluding facilities defined in items (e) and (f) of the same subparagraph; hereafter in this paragraph, referred to as "railroad facilities") acquired by the Korea National Railway incorporated pursuant to the Korea National Railway Act (hereafter in this paragraph, referred to as the "Korea National Railway”) until December 31, 2025. <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Jan. 15, 2020; Jun. 9, 2020; Mar. 14, 2023> |
| 1. | Deleted. <Dec. 27, 2016> |
| 2. | Deleted. <Dec. 27, 2016> |
| (2) | Any of the following property acquired by the Korea National Railway, shall be exempted from acquisition tax and property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) until December 31, 2025, respectively: <Newly Inserted on Dec. 27, 2016; Mar. 13, 2018; Jan. 15, 2020; Jun. 9, 2020; Jan. 12, 2021; Mar. 14, 2023> |
| (3) | Local taxes on the Korea Railroad Corporation incorporated pursuant to the Korea Railroad Corporation Act shall be reduced until December 31, 2025, as prescribed in the following subparagraphs: <Amended on Jan. 15, 2020; Mar. 14, 2023> |
| (4) | Acquisition tax shall be exempted on land acquired following conclusion and subdivision of land incorporated into a railroad construction site due to a railroad construction project; and registration license tax shall be exempted on the registration of division. <Amended on Dec. 29, 2015> |
| (5) | Local taxes shall be reduced or exempted, as prescribed in the following subparagraphs, on a local government-invested public corporation under Article 49 of the Local Public Enterprise Act, which are incorporated for the purpose of performing urban railroad business (hereafter in this Article, referred to as the “urban railroad corporation”) defined in subparagraph 4 of Article 2 of the Urban Railroad Act (hereafter in this paragraph, referred to as “urban railroad business”): <Amended on Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired by a urban railroad corporation to use directly for the urban railroad business and on rolling stocks shall be reduced by an amount calculated by multiplying 100/100 (where a municipal ordinance prescribes otherwise within 100/100, such rate shall apply hereto) of acquisition tax by the investment proportion of a local government prescribed by Presidential Decree (hereafter in this Article, referred to as “investment proportion of a local government); |
| 2. | Registration license tax on registration of an urban railroad corporation and the registration of establishment of divided superficies, shall be reduced by an amount calculated by multiplying 100/100 (where a municipal ordinance prescribes otherwise within 100/100, such rate shall apply thereto) of registration license tax by the investment proportion of the relevant local government; |
| 3. | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) on real estate used by an urban railroad corporation directly for the urban railroad business as at the tax base date, shall be reduced by an amount calculated by multiplying 100/100 (where a municipal ordinance prescribes otherwise within 100/100, such rate shall apply thereto) of property tax by the investment proportion of the local government. |
| Article 64 (Special Taxation for Support for Marine Transportation and Ports) |
| (1) | Acquisition tax on a ship acquired to register as an international ship under the International Ship Registration Act shall be imposed after subtracting 20/1,000 from the tax rate prescribed in Article 12 (1) 1 of the Local Tax Act until December 31, 2024, and property tax on a ship registered as an international ship as at the tax base date shall be reduced by 50/100 until December 31, 2024: Provided, That where such ship is not registered as an international ship within six months from the date of acquisition of such ship, the reduced or exempted portion of acquisition tax shall be collected as a penalty. <Amended on Jan. 1, 2013Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| (2) | Acquisition tax on a cargo ship prescribed by Presidential Decree, acquired to place on a coastal line, and on an ocean-going ship prescribed by Presidential Decree, acquired to put on an international line only, shall be imposed after subtracting 10/1,000 from the tax rate prescribed in Article 12 (1) 1 of the Local Tax Act until December 31, 2024; property tax on a ship used to transport cargos as at the tax base date shall be reduced by 50/100; and property tax on a ship put on an international line shall be reduced by 50/100 for five years from the date the first liability to pay property tax on the relevant ship arises after the date the relevant ship is acquired: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Where such ship is not used directly for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 2. | Where such ship is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (3) | Acquisition tax on a ship fueled by natural gas among cargo ships prescribed by Presidential Decree, acquired to put on a costal line, shall be imposed after subtracting 20/1,000 from the tax rate prescribed in Article 12 (1) 1 of the Local Tax Act until December 31, 2024: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: <Newly Inserted on Dec. 27, 2016; Jan. 15, 2020; Dec. 28, 2021> |
| 1. | Where such ship is not used directly for the relevant purposes without just grounds within one year from the date of acquisition; |
| 2. | Where such ship is sold or donated, or used for any other purpose after having being used directly for the relevant purposes for less than two years. |
| (4) | Deleted. <Dec. 31, 2011> |
| Article 64-2 (Reduction or Exemption for Radio Stations of Intelligent Maritime Transport Information Services) |
[This Article Newly Inserted on Dec. 29, 2020]
| Article 65 (Special Taxation for Air Transport Service) |
Acquisition tax on an aircraft acquired by a person who has obtained a license or registered his or her business under the Aviation Business Act to use for domestic air transport service, international air transport service, small-scale air transport service, or aircraft rental services, shall be imposed after subtracting 12/1,000 from the tax rate prescribed in Article 12 (1) 4 of the Local Tax Act until December 31, 2024; and property tax on an aircraft used directly for such services as at the tax base date, shall be reduced by 50/100 for five years from the date the first liability to pay property tax arises after the date the relevant aircraft is acquired: Provided, That property tax on an aircraft acquired by a person whose total amount of assets is at least the amount prescribed by Presidential Decree shall be reduced by 50/100 until December 31, 2023 for five years from the date the first liability to pay property tax on the relevant aircraft arises after the relevant aircraft is acquired. <Amended on Dec. 28, 2021> [This Article Wholly Amended on Dec. 24, 2018]
| Article 66 (Reduction or Exemption for Replacement Motor Vehicles) |
| (1) | Acquisition tax shall be exempted on a motor vehicle, etc. (including machinery and equipment; hereafter in this paragraph, referred to as "motor vehicle, etc.") of the same kind provided in exchange for, the motor vehicle, etc. (referring to a motor vehicle of the same kind prescribed in Article 3 of the Motor Vehicle Management Act in cases of motor vehicles) returned according to the standards for settlement of consumer disputes under the Framework Act on Consumers or the mediation of the Motor Vehicle Safety and Defect Deliberation Council under the Motor Vehicle Management Act due to manufacturing defects: Provided, That where the tax amount imposed on a motor vehicle, etc. acquired through exchange exceeds the tax amount already paid for acquisition of the previous motor vehicle, etc., such excess shall be imposed as acquisition tax. <Amended on Dec. 29, 2015; Dec. 26, 2017; Dec. 28, 2021> |
| 1. | Where the amount of acquisition tax does not exceed 400,000 won, acquisition tax shall be exempted until December 31, 2024; |
| 2. | Where the amount of acquisition tax exceeds 400,000 won, 400,000 won shall be deducted from the assessed amount of acquisition tax, until December 31, 2024. |
| (4) | Where a motor vehicle publicly notified pursuant to subparagraph 2 of Article 2 of the Act on Promotion of Development and Distribution of Environment-Friendly Motor Vehicles (excluding trucks under paragraph (5)) as an electric vehicle defined in subparagraph 3 of the same Article or as a hydrogen electric vehicle defined in subparagraph 6 of the same Article is acquired, if the amount of acquisition tax does not exceed 1.4 million won acquisition tax shall be exempted and if the amount of acquisition tax exceeds 1.4 million won, 1.4 million won shall be deducted from the assessed amount of acquisition tax<Newly Inserted on Dec. 31, 2011; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 31, 2018; Jan. 15, 2020; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Deleted; <Jan. 1, 2020> |
| 2. | Deleted. <Jan. 1, 2020> |
| Article 66-2 (Reduction or Exemption of Acquisition Tax for Replacement of Decrepit Diesel Vehicles) |
| (1) | Where a person who owns (based on the date of registration) as of January 1, 2017 a motor vehicle for passengers and freight or freight motor vehicle, fueled by diesel and newly registered as at December 31, 2006, (excluding used motor vehicles acquired by a person registered for motor vehicle transaction business pursuant to the Motor Vehicle Management Act for sale or purchase; hereafter in this paragraph, referred to as "decrepit diesel vehicles"), acquires a motor vehicle for passengers and freight or freight motor vehicle under his/her name (limited to newly manufactured motor vehicles; hereafter in this paragraph, referred to as "newly manufactured vehicle") and newly registers it by no later than June 30, 2017 after scrapping it and cancelling its registration, acquisition tax on such motor vehicle shall be reduced by 50/100. In such cases, acquisition tax on only one newly manufactured vehicle, shall be reduced for each decrepit diesel vehicle. |
| (2) | Where the reduced amount of acquisition tax under paragraph (1) does not exceed one million won per vehicle, the total amount of acquisition tax shall be exempted; and when the reduced amount of acquisition tax exceeds one million won, one million won shall be deducted from assessed tax. |
[This Article Newly Inserted on Dec. 27, 2016]
| Article 67 (Special Taxation for Minicars) |
| (1) | Where a motor vehicle of a size prescribed by Presidential Decree is acquired as a noncommercial passenger motor vehicle prescribed by Presidential Decree, among passenger motor vehicles specified in Article 3 (1) of the Motor Vehicle Management Act, acquisition tax on such motor vehicle shall be reduced or exempted until December 31, 2024 as follows: Provided, That where it is used for commercial purpose within one year from the date of acquisition, the reduced or exempted portion of acquisition tax shall be collected as a penalty: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 26, 2017; Dec. 24, 2018; Dec. 28, 2021>1. Where the amount of acquisition tax does not exceed 750,000 won, the total amount of acquisition tax shall be exempted; |
| 2. | Where the amount of acquisition tax exceeds 750,000 won, 750,000 won shall be deducted from the assessed amount of acquisition tax. |
| (2) | Where a motor vehicle of a size prescribed by Presidential Decree is acquired, among vans or cargo motor vehicles specified in Article 3 (1) of the Motor Vehicle Management Act (excluding towed motor vehicles, for which the detailed criteria of classification under Article 3 of the same Act is met for cargo motor vehicles for special tasks), such motor vehicle shall be exempted from acquisition tax until December 31, 2024. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (3) | Notwithstanding Article 127 (1) 1 of the Local Tax Act, motor vehicle tax on a motor vehicle prescribed by Ordinance of the Ministry of the Interior and Safety, which is a noncommercial passenger motor vehicle and can hold seven to ten passengers, shall be imposed at the tax rate for small general buses prescribed in Article 127 (1) 4 of the same Act until December 31, 2024. In such cases, it shall be limited to a motor vehicle registered or enrolled as a new motor vehicle under the Motor Vehicle Management Act, as at December 31, 2007. <Amended on Mar. 23, 2013; Nov. 19, 2014; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jul. 26, 2017; Dec. 24, 2018; Dec. 28, 2021> |
| Article 68 (Reduction or Exemption for Used Motor Vehicles for Sale or Export) |
| (1) | A used motor vehicle or used construction machinery (hereafter in this Article, referred to as "used motor vehicle, etc.") acquired (excluding acquisition under Article 7 (4) of the Local Tax Act; hereafter in this Article, the same shall apply) by any of the following persons for sale or purchase, shall be exempted from acquisition tax and motor vehicle tax, respectively, until December 31, 2024. In such cases, a motor vehicle tax exemption shall be granted regarding the period in which such used motor vehicle, etc. is registered in the name of any of the following persons: <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| (3) | Acquisition tax on used ships, used machinery and equipment, and used aircraft acquired for export by a person engaging in foreign trade under the Foreign Trade Act, shall be imposed after subtracting 20/1,000 from the tax rate prescribed in Article 12 (1) 1, 3, and 4 of the Local Tax Act until December 31, 2024; and acquisition tax on used motor vehicles acquired for export by a person engaging in foreign trade under the Foreign Trade Act, shall be exempted until December 31, 2024. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (4) | Where any used ship, used machinery and equipment, used aircraft or used motor vehicle referred to in paragraph (3) is not exported within two years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty. <Newly Inserted on Dec. 24, 2018> |
| Article 69 (Reduction or Exemption for Traffic Safety) |
| Article 70 (Reduction or Exemption for Support for Transportation Service) |
| (1) | Where a person who has obtained a license or registered for passenger transport services pursuant to Article 4 of the Passenger Transport Service Act, acquires a motor vehicle to use directly for any of the following services among the passenger transport services under Article 3 of the same Act, acquisition tax shall be reduced by 50/100 until December 31, 2024: <Amended on Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Intracity bus transportation services, rural bus transportation services, community bus transportation services, or intercity bus transportation services; |
| 2. | General taxi transportation services or individual taxi transportation services. |
| (2) | Deleted. <Nov. 19, 2014> |
| (3) | Where a person who has obtained a license or registered for passenger transport services pursuant to Article 4 of the Passenger Transport Service Act acquires a natural gas bus to use directly for passenger transport services under Article 3 of the same Act, acquisition tax shall be exempted until December 31, 2020, and shall be reduced by 75/100 from January 1, 2021 to December 31, 2024. <Amended on Dec. 24, 2018; Dec. 28, 2021> |
| Article 71 (Reduction or Exemption for Logistics Complexes) |
| (1) | Acquisition tax shall be reduced by 35/100 on real estate acquired by a facilitator of logistics complex development business prescribed in Article 27 of the Act on the Development and Management of Logistics Facilities, to develop a logistics complex designated under Article 22 (1) of the same Act (hereafter in this Article, referred to as “logistics facilities”); and property tax shall be reduced by 25/100 on real estate used directly for the relevant business as at the tax base date, until December 31, 2025, respectively. In such cases, the head of a local government may additionally reduce the rate of property tax prescribed by municipal ordinance up to 10/100, in consideration of the financial status, etc. of the relevant area. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (2) | Acquisition tax shall be reduced by 50/100 until December 31, 2025, on real estate for logistics facilities prescribed by Presidential Decree (hereafter in this paragraph, referred to as “real estate for logistics facilities”) acquired by a person who intends to directly operate logistics business prescribed by Presidential Decree (hereafter in this paragraph, referred to as “logistics business”) in a logistics complex; and property tax shall be reduced by 35/100 on real estate for logistics facilities acquired by no later than December 31, 2019 and used directly for logistics business as at the tax base date, for five years from the date of acquisition thereof. <Amended on Jan. 15, 2020; Mar. 14, 2023 > |
| 1. | Acquisition tax shall be reduced by 25/100 on real estate acquired by a complex logistics terminal business operator to implement the project authorized pursuant to Article 9 (1) of the Act on the Development and Management of Logistics Facilities until December 31, 2025: Provided, That where such real estate is not used directly for such project without just grounds within three years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty; |
| 2. | Property tax shall be reduced by 25/100 on real estate used by a complex logistics terminal business operator directly for the complex logistics terminal business as at the tax base date, until December 31, 2023. |
| (4) | Deleted. <Dec. 27, 2016> |
| (5) | Deleted. <Dec. 27, 2016> |
| Article 72 (Special Taxation for Special Post Offices) |
| (1) | Acquisition tax on real estate acquired by a person designated by the Minister of Science and ICT pursuant to Article 3 of the Special Post Offices Act (including persons who succeed to the designation of a special post office pursuant to Article 3-3 of that Act; hereafter in this Article, referred to as “designee”) to use (cases where a person falling under subparagraph 2 of Article 4 of that Act is appointed as a postmaster of a special post office shall be deemed to be used directly by the designee; hereafter in this Article, the same shall apply) directly for special post office business shall be imposed after subtracting 20/1,000 from the tax rate prescribed in Article 11 (1) of the Local Tax Act until December 31, 2025: Provided, That the reduced portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Dec. 31, 2014; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used directly for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 3. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (2) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) shall be exempted until December 31, 2025, on real estate (including cases where the designation of a special post office is succeeded pursuant to Article 3-3 of the Special Post Offices Act and the real estate under the name of a designee is directly used gratuitously) used by a designee directly for a special post office business as at the tax base date; and the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) and pro rata employee portion of resident tax on the special post office shall be exempted until December 31, 2025, respectively,: Provided, That where such property is used commercially, or a fee is charged for use thereof; or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof, shall be exempted. <Amended on Jan. 1, 2014; Dec. 31, 2014; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (3) | Real estate acquired by the Special Post Office Pension Service established pursuant to the Special Post Offices Act, to use directly for the duties prescribed in Article 16 (1) of the same Act, shall be exempted from local taxes until December 31, 2014, as follows: <Amended on Jan. 1, 2013> |
SECTION 7 Support for National Land and Regional Development
| Article 73 (Reduction or Exemption for Acquisition of Substitute Land due to Expropriation of Land) |
| (1) | Where a person (including persons who have sold to an implementer of a public project, real estate, etc. necessary for the relevant public project to which the Act on Acquisition of and Compensation for Land for Public Works Projects applies and persons subject to the measures for relocation prescribed in Articles 78 (1) through (4) and 81 of the same Act) whose real estate (including ships, fishing rights, fish farming rights, and mining rights; hereafter in this Article, referred to as "real estate, etc.") has been purchased, expropriated, or removed by another person (including persons whose construction plan under Article 55 (1) of the Tourism Promotion Act has been approved and the implementers of projects for rearranging agricultural and fishing villages under Article 56 of the Rearrangement of Agricultural and Fishing Villages Act) who was granted approval for a project which enables him/her to expropriate land, etc. under the relevant statutes, including the Act on Acquisition of and Compensation for Land, for Public Works Projects, the National Land Planning and Utilization Act, and the Urban Development Act; enters into a contract on real estate to be acquired as a substitute or is granted permission for construction after the contract date or the announcement date (including the date a construction plan is announced under the Tourism Promotion Act and the date a development plan is announced under the Rearrangement of Agricultural and Fishing Villages Act) of the relevant project approved, and acquires real estate, etc. to substitute for the previous real estate, etc. (referring to the time when a contract of purchase in lots is signed where one purchases a house under construction) in an area classified as follows, within one year (or two years in cases of farmland under Article 6 (1)) from the date compensation money is last received (where substitute acquisition is impossible due to the circumstances of a person who was granted approval for a project, referring to the date acquisition is possible; where one is compensated with land under Article 63 (1) of the Act on Acquisition of and Compensation for Land for Public Works Projects, referring to the date acquisition of such land is possible; where one is compensated with bonds under Article 63 (6) and (7) of the same Act, referring to the date repayment period expires), acquisition tax on such acquisition shall be exempted: Provided, That where the total value of real estate, etc. newly acquired exceeds that of the previous real estate, etc., acquisition tax shall be imposed on such excess; and the standards and methods for calculating excess, etc. shall be prescribed by Presidential Decree: <Amended on Dec. 27, 2010; Dec. 29, 2015; Dec. 27, 2016; Aug. 27, 2019> |
| 1. | Real estate, etc. other than farmland: |
| (a) | An area in the Special Metropolitan City, a Metropolitan City, the Special Self-Governing City, a Do, or the Special Self-Governing Province where real estate, etc. is purchased, expropriated, or removed; |
| (b) | An area other than that prescribed in item (a), in the Special Self-Governing City or a Si/Gun/Gu adjacent to the Special Self-Governing City or a Si/Gun/Gu where real estate, etc. is purchased, expropriated, or removed; |
| (c) | An area in the Special Metropolitan City, a Metropolitan City, the Special Self-Governing City, or a Do adjacent to the Special Metropolitan City, a Metropolitan City, the Special Self-Governing City, or a Do where real estate, etc. is purchased, expropriated, or removed: Provided, That in cases of any designated area under Article 104-2 (1) of the Income Tax Act, such designated area shall be excluded; |
| 2. | Farmland (including a house acquired at a price less than 50/100 of the total amount of compensation by a self-employed farmer under Article 6 (1) to cultivate farmland): |
| (a) | An area prescribed in subparagraph 1; |
| (2) | Notwithstanding paragraph (1), where a person acquires real estate subject to taxation under Article 13 (5) of the Local Tax Act or an absentee land owner prescribed by Presidential Decree acquires substitute real estate, acquisition tax shall be imposed. <Amended on Dec. 27, 2010> |
| (3) | Acquisition tax shall be exempted on real estate acquired by exercising a right to repurchase under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects. <Amended on Dec. 29, 2015> |
| Article 73-2 (Reduction or Exemption for Real Estate for Gratuitous Donation) |
| (1) | Acquisition tax shall be reduced or exempted, as determined in the following subparagraphs, on real estate or infrastructure acquired on condition that real estate or infrastructure owned by the State, etc. shall be transferred gratuitously or that the right to use the real estate or infrastructure subject to reversion or gratuitous donation shall be transferred gratuitously, in return for reversion or donation (hereafter in this Article, referred to as "reversion, etc.") to the State, local government, or local government association (hereafter in this Article, referred to as the "State, etc."), among real estate and infrastructure referred to in Article 9 (2) of the Local Tax Act: <Amended on Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Acquisition tax shall be exempted until December 31, 2020; |
| 2. | Acquisition tax shall be reduced by 50/100 from January 1, 2021 to December 31, 2024. |
| (2) | In cases falling under paragraph (1), where real estate or infrastructure is sold or donated to another person without fulfilling the conditions of reversion, etc. to the State, etc. or where conditions are changed not to revert, etc. to the State, etc., the reduced or exempted portion of acquisition tax shall be collected as a penalty. <Amended on Dec. 24, 2018> |
[This Article Newly Inserted on Dec. 29, 2015]
| Article 74 (Reduction or Exemption for Urban Development Projects) |
| (1) | Deleted. <Mar. 14, 2023> |
| (2) | Deleted. <Mar. 14, 2023> |
| (3) | Acquisition tax shall be reduced by 75/100 until December 31, 2025, on land allotted by authorities in recompense for development outlay or reserved land acquired by the implementer of an urban development project under the Urban Development Act in the course of the implementation of the relevant urban development projects. <Amended on Jan. 15, 2020; Mar. 14, 2023> |
| (4) | Acquisition tax shall be reduced or exempted until December 31, 2025, on housing acquired in the course of the implementation of a residential environment improvement project defined in subparagraph 2 (a) of Article 2 of the Act on the Improvement of Urban Areas and Residential Environments (hereafter in this Article, referred to as “residential environment improvement project”), as prescribed in the following subparagraphs: Provided, That where such housing becomes real estate falling under Article 13 (5) 1 through 4 of the Local Tax Act or is constructed in violation of relevant statutes, the reduced portion of acquisition tax shall be collected as a penalty: <Newly Inserted on Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 75/100 on housing acquired by the implementer of a residential environment development project to develop sites for the residential environment development project; |
| 3. | Acquisition tax shall be exempted on housing acquired in a method of directly repairing it by the owner of real estate pursuant to Article 23 (1) 1 of the Act on the Improvement of Urban Areas and Residential Environments as at the date of public notice of the designation of an improvement zone for a residential environment improvement project under that Act or housing with an area for exclusive area not exceeding 85 square meters acquired in the course of the implementation of a residential environment improvement project under subparagraph 4 of that paragraph. |
| (5) | Acquisition tax on real estate acquired in the course of the implementation of a redevelopment project under the Act on the Improvement of Urban Areas and Residential Environments (hereafter in this Article, referred to as “redevelopment project”) shall be reduced util December 31, 2025, as prescribed in the following subparagraphs: Provided, That where such real estate falls under Article 13 (5) 1 through 4 of the Local Tax Act within five years from the date of acquisition or is constructed in violation of relevant statutes and a person who is subject to the reduction of acquisition tax temporarily becomes a person owning two houses prescribed by Presidential Decree pursuant to subparagraph 3 fails to be a person owning one house for one household prescribed by Presidential Decree within three years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty: <Newly Inserted on Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 50/100 on real estate acquired by the implementer of a redevelopment project to develop sites for the redevelopment project; |
| 3. | Where the owner of real estate becomes a person owning one house for one household prescribed by Presidential Decree by acquiring a house in accordance with the implementation of a redevelopment project as at the date of public notice on the designation of an improvement zone for a redevelopment project (including cases where the person temporarily owns two houses as prescribed by Presidential Decree), acquisition tax shall be reduced as prescribed in the following items: |
| (a) | Where the owner acquires a house with an area for exclusive use not exceeding 85 square meters, acquisition tax shall be reduced by 75/100; |
| (b) | Where the owner acquires a house with an area for exclusive use exceeding 85 square meters, acquisition tax shall be reduced by 50/100. |
| Article 74-2 (Reduction or Exemption for Urban Public Housing Complex Project) |
| (2) | The standards and methods for calculating the excess, etc. under the proviso of paragraph (1) shall be prescribed by Presidential Decree. |
| (3) | Acquisition tax on real estate acquired in accordance with a complex project and a regeneration project implemented in a residential innovation district (hereafter in this paragraph, referred to as “complex project, etc.”) shall be reduced or exempted until December 31, 2024, as prescribed in the following subparagraphs: Provided, That where such real estate falls under Article 13 (5) 1 through 4 of the Local Tax Act within five years from the date of acquisition or it is constructed in violation of relevant statutes and a person who temporarily owns two houses as prescribed by Presidential Decree and becomes subject to reduction of acquisition tax fails to become a person owning one house for one household as prescribed by Presidential Decree within three years from the date of acquisition, the reduced portion of acquisition tax shall be collected as a penalty: |
| 1. | The real estate acquired by the implementer of a complex project, etc. to implement such project shall be governed by the following classifications: |
| (a) | Where the implementer acquires real estate owned by a person who enters into an agreement on compensation in kind, acquisition tax shall be exempted; |
| (b) | Where the implementer acquires real estate owned by a person who does not enter into an agreement on compensation in kind, acquisition tax shall be reduced by 50/100; |
| (c) | Where the owner of real estate becomes a person owning one house for one household as prescribed by Presidential Decree by acquiring a house due to the implementation of a complex project, etc. as at the date of public notice on the designation of a complex district of a complex project under the Special Act on Public Housing or the designation of a residential regeneration innovation district of a regeneration project implemented in an innovation district under the Special Act on Promotion of and Support for Urban Regeneration (including cases where the owner temporarily owns two houses as prescribed by Presidential Decree as at the time of acquisition), acquisition tax shall be reduced as prescribed in the following items: |
| (a) | In cases of acquiring a house with an area for exclusive use not exceeding 60 square meters, acquisition tax shall be reduced by 75/100; |
| (b) | In cases of acquiring a house with an area for exclusive use between 60 and 85 square meters, acquisition tax shall be reduced by 50/100. |
[This Article Newly Inserted on Dec. 28, 2021]
| Article 75 (Reduction or Exemption for Regional Development Projects) |
Real estate acquired by a person designated as a project implementer to implement a development project announced pursuant to the Balanced Regional Development and Support for Local Small and Medium Enterprises Act in an area designated as a development promotion zone under Article 9 of the same Act, shall be exempted from acquisition tax until December 31, 2015; and property tax on such real estate shall be reduced by 50/100 for five years from the date the first liability to pay property tax on such real estate arises: Provided, That where such real estate is not used directly for the project, is sold or donated within three years from the date of acquisition, without just grounds, the reduced or exempted portion of acquisition tax and property tax shall be collected as a penalty. <Amended on Dec. 27, 2010; Jan. 1, 2013>
| Article 75-2 (Reduction or Exemption for Start-Up Businesses in Enterprise City Development Zones or Regional Development Project Zones) |
| (1) | Acquisition tax and property tax on real estate acquired to operate any of the following businesses, the category of business of which, the amount of investment in which, and the number of employees of which meet the criteria prescribed by Presidential Decree, shall be subject to a reduction rate prescribed by municipal ordinance by up to 50/100 until December 31, 2025, respectively: <Amended on Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Business operated by an enterprise which starts a new business or newly establishes a place of business (excluding where it relocates any existing place of business) in an enterprise city development zone defined in subparagraph 2 of Article 2 of the Special Act on the Development of Enterprise Cities by no later than December 31, 2019, in the place of business located in such zone; |
| (2) | The amount of local taxes reduced pursuant to paragraph (1) may be collected as a penalty, as prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 29, 2015]
| Article 75-3 (Reduction or Exemption for Small and Medium Enterprises within Crisis Areas) |
| (1) | Acquisition tax shall be reduced by 50/100 (where a municipal ordinance prescribes otherwise within 50/100, such rate shall apply) on real estate acquired by a small or medium enterprise engaging in any type of business referred to in subparagraphs of Article 58-3 (4) in any region or area falling under the following subparagraphs, for which such enterprise obtains approval on a plan for business conversion defined in subparagraph 2 of Article 2 of the Special Act on the Promotion of Business Conversion in Small and Medium Enterprises, within the period designated as a crisis area, until December 31, 2024, and uses directly for the converted business within three years from the date of approval on such plan for business conversion pursuant to Article 8 of the same Act; and property tax on real estate used directly by a small or medium enterprise that has obtained approval on a plan for business conversion until December 31, 2024, for such converted business as at the tax base date, shall be reduced by 50/100 (where a municipal ordinance prescribes otherwise within 50/100, such rate shall apply) for five years from the date the first liability to pay property tax arises after the date of business conversion: <Amended on Dec. 28, 2021; Mar. 14, 2023> |
| 3. | A special area for responding to industrial crisis designated under Article 10 (1) of the Special Act on Response to Local Industrial Crisis and Recovery of Local Economy; |
| (2) | The reduced acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Mar. 14, 2023> |
| 1. | Where the real estate is not used directly for the relevant business without just grounds, within three years from the date of acquisition; |
| 2. | Where the real estate is used for any other purpose, sold, or donated within three years from the date of acquisition; |
| 3. | Where the real estate has not been used directly for the relevant business for two consecutive years from the date of the first use of the real estate, and is sold or donated, or used for any other purpose. |
| (3) | Where a small or medium enterprise for which a reduction or exemption has been granted pursuant to Article 58-3, becomes subject to reduction as prescribed in paragraph (1), no penalty shall be collected pursuant to the main sentence of Article 58-3 (7). |
[This Article Newly Inserted on Dec. 24, 2018]
| Article 75-4 (Reduction or Exemption for Returned Districts) |
| (1) | Acquisition tax on property for business acquired to start a business prescribed by Presidential Decree in a returned district and an area adjacent to a returned district defined in Article 2 of the Special Act on Support for Areas Adjacent to Districts Granted to the United States Armed Forces in Korea or real estate acquired to newly establish a place of business prescribed by Presidential Decree (including the relocation of the existing place of business) shall be exempted until December 31, 2025; Provided, That where such property or real estate is not used directly for the relevant business without just grounds within three years from the date of acquisition or is sold or donated, the reduced portion of acquisition tax shall be collected as a penalty. |
| (2) | A person who intends to seek application of paragraph (1) shall apply for reduction or exemption as prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 28, 2021]
| Article 75-5 (Reduction or Exemption for Depopulation Regions) |
| (1) | Local taxes shall be reduced or exempted on real estate acquired to start the types of business prescribed by Presidential Decree in a depopulation region designated under the Special Act on Support for Depopulation Regions or real estate acquired to newly establish a place of business prescribed by Presidential Decree (including the relocation of the existing place of business), as prescribed in the following subparagraphs: |
| 1. | Acquisition tax shall be exempted until December 31, 2025; |
| 2. | Acquisition tax on real estate used directly for the relevant purposes as at the tax base date shall be exempted five years from the date the first liability for property tax on such real estate arises; and shall be reduced by 50/100 for the following three years. |
| (2) | Where a person for whom local taxes are reduced pursuant to paragraph (1) falls under any of the following cases, the reduced portion of acquisition tax and property tax shall be collected as a penalty: |
| 1. | Where such rea estate is not used directly for the relevant purposes without just grounds within one year from the date of acquisition; |
| 2. | Where such real estate is sold or donated, or used for any other purpose, after having being used directly for the relevant purposes for less than two years. |
[This Article Newly Inserted on Mar. 14, 2023]
| Article 76 (Reduction or Exemption for Land for Housing Site Development) |
| (1) | Acquisition tax shall be reduced by 20/100 until December 31, 2019, on real estate acquired temporarily by the Korea Land and Housing Corporation, to use for projects prescribed by Presidential Decree, for supplying to a third party in accordance with a plan of the State or a local government. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016> |
| (2) | Public facilities, appurtenant land, and a public site to be devolved to the State or a local government gratuitously pursuant to relevant statutes, being real estate in a housing site development project zone or complex construction project zone, among real estate acquired by the Korea Land and Housing Corporation to use directly for projects prescribed by Presidential Decree for supplying to a third party, shall be exempted from property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) until December 31, 2024. In such cases, the scope of public facilities and appurtenant land shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (3) | Deleted. <Dec. 31, 2011> |
| Article 77 (Reduction or Exemption for Land for Constructing Complexes by the Korea Water Resources Corporation) |
| (1) | Acquisition tax shall be reduced by 30/100 until December 31, 2019, on land for constructing complexes acquired by the Korea Water Resources Corporation incorporated pursuant to the Korea Water Resources Corporation Act, to sell in lots pursuant to a plan of the State or a local government. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016> |
| (2) | Public facilities, appurtenant land, and a public site to be devolved on the State or a local government gratuitously pursuant to relevant statutes, being real estate in a housing site development project zone or complex construction project zone, among real estate acquired by the Korea Water Resources Corporation incorporated pursuant to the Korea Water Resources Corporation Act, to sell in lots pursuant to a plan of the State or a local government, shall be exempted from property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) until December 31, 2024. In such cases, the scope of public facilities and appurtenant land shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| Article 78 (Reduction for Industrial Complexes) |
| (1) | Acquisition tax shall be reduced by 35/100 on real estate acquired by an implementer of an industrial complex development project prescribed in Article 16 of the Industrial Sites and Development Act or a project implementer prescribed in Article 4 of the Act on Special Cases concerning Support of Technoparks, to construct an industrial complex or technopark; and property tax on land on which construction works are underway, shall be reduced by 35/100 (or 60/100 in cases of an industrial complex outside of the Seoul Metropolitan area), until December 31, 2025, respectively: Provided, That the reduced portion of acquisition tax and property tax shall be collected as a penalty in any of the following cases: <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Where an industrial complex or technopark is not constructed within three years from the date of acquisition of such real estate acquired to construct an industrial complex or technopark, without just grounds, the reduced portion of acquisition tax and property tax shall be collected as a penalty; |
| 2. | Where an industrial complex or technopark is not constructed without just grounds within three years from the date of acquisition (where the land is acquired before the public notice on approval of implementation plan under Article 19-2 of the Industrial Sites and Development Act) of land acquired to construct an industrial complex or technopark, the reduced portion of property tax shall be collected as a penalty. |
| (2) | Local taxes shall be reduced, as follows, on real estate acquired and owned by a project implementer under paragraph (1) for sale in lots or lease for an industrial building, etc. prescribed by Presidential Decree (hereafter in this Article, referred to as "industrial buildings, etc."), after developing and constructing an industrial complex or technopark: <Amended on Apr. 12, 2010; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 35/100 on an industrial building, etc. acquired by a project implementer prescribed in paragraph (1) by not later than December 31, 2025 by construction or expansion; and property tax on such industrial building, etc. shall be reduced by 35/100 (or 60/100, in cases of an industrial complex outside of Seoul Metropolitan area), respectively: Provided, That where the industrial building, etc. is not sold in lots or leased for the relevant purpose without just grounds, within three years from the date of acquisition, the reduced portion of local taxes shall be collected as a penalty; |
| 2. | Property tax on land, after a development projected is completed thereon, acquired and owned (including where approval for use is obtained or it is actually used) by a project implementer prescribed in paragraph (1) until December 31, 2025, shall be reduced by 35/100 (or 60/100, in cases of an industrial complex outside of the Seoul Metropolitan area) for five years from the date the first liability to pay property tax arises: Provided, That where the land is not sold in lots or leased for the relevant purpose without just grounds, within three years from the date a development projected is completed, the reduced portion of property tax shall be collected as a penalty. |
| (3) | Local taxes shall be reduced, as follows, on real estate acquired and owned by a project implementer prescribed in paragraph (1) for direct use after developing and creating an industrial complex or technopark: <Amended on Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax shall be reduced by 35/100 on an industrial building, etc. acquired by a project implementer prescribed in paragraph (1) by not later than December 31, 2025 by construction or expansion; and property tax on such industrial building, etc. shall be reduced by 35/100 (or 60/100, in cases of an industrial complex outside of the Seoul Metropolitan area), respectively, for five years from the date the first liability to pay property tax on such industrial building, etc. arises: Provided, That the reduced portion of local taxes shall be collected as a penalty in any of the following cases: |
| (a) | Where the industrial building, etc. is not used directly for the relevant purpose without just grounds, within three years from the date of acquisition; |
| (b) | Where the industrial building, etc. is sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than two years; |
| 2. | Property tax on land, after a development projected is completed thereon, acquired and owned (including where approval for use is obtained or it is actually used) by a project implementer prescribed in paragraph (1) until December 31, 2025, shall be reduced by 35/100 (or 60/100, in cases of an industrial complex outside of the Seoul Metropolitan area) for five years from the date the first liability to pay property tax arises: Provided, That the reduced portion of property tax shall be collected as a penalty in any of the following cases: |
| (a) | Where the land is not used directly for the relevant purpose without just grounds, within three years from the date a development projected is completed; |
| (b) | Where the land is sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than two years. |
| (4) | Local taxes on real estate acquired by a person other than a project implementer prescribed in paragraph (1), in an area specified in each item of subparagraph 1 (hereinafter referred to as "industrial complex, etc."), shall be reduced as prescribed under subparagraph 2: <Amended on Dec. 31, 2011; Jan. 1, 2013; Jan. 1, 2014; Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Areas eligible for local tax reduction: |
| (c) | Technoparks created pursuant to the Act on Special Cases concerning Support of Technoparks; |
| 2. | Details of local tax reduction: |
| (a) | Acquisition tax on land acquired to newly construct industrial buildings, etc. and industrial buildings, etc. acquired (including lease to a small or medium enterpriser after acquisition) through construction or expansion shall be reduced by 50/100 until December 31, 2025; |
| (b) | Acquisition tax on industrial buildings, etc. acquired after substantial repair (limited to cases falling under Article 2 (1) 9 of the Building Act) in any industrial complex, etc., shall be reduced by 25/100 until December 31, 2025; |
| (c) | Property tax on real estate prescribed in item (a), shall be reduced by 35/100 (or 75/100, in cases of an industrial complex outside of the Seoul Metropolitan area) for five years from the date the first tax liability on such real estate arises. |
| (5) | In any of the following cases, acquisition tax and property tax on the relevant portion reduced or exempted pursuant to paragraph (4), shall be collected as a penalty: <Newly Inserted on Dec. 31, 2011; Dec. 28, 2021> |
| 1. | Where real estate is not used directly for the relevant purposes without just grounds, within three years (four years in cases of acquiring real estate during the period from January 1, 2019 to December 31, 2020) from the date of acquisition; |
| 2. | Where real estate is sold (excluding where the relevant industrial complex management institution or technopark management institution resells it), donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (6) | Deleted. <Jan. 15, 2020> |
| (7) | Deleted. <Dec. 28, 2021> |
| (8) | In reducing acquisition tax under paragraph (4), the head of a local government may additionally reduce it by the rate prescribed by municipal ordinance by up to 25/100 (or 15/100, where acquisition tax is reduced under paragraph (4) 2 (b)), taking into account the economic conditions, etc. of the relevant region. In such cases, the main sentence of Article 4 (1), and Article 4 (6) and (7) shall not apply. <Newly Inserted on Dec. 31, 2014; Dec. 27, 2016> |
| Article 78-2 (Reduction or Exemption for Korea Industrial Complex Corporation) |
Where the Korea Industrial Complex Corporation prescribed in the Industrial Cluster Development and Factory Establishment Act (hereafter in this paragraph, referred as the "Korea Industrial Complex Corporation"), acquires real estate to perform a project prescribed in Article 45-13 (1) 3 or 5 of the same Act (including acquisition due to exercise of a right to redeem prescribed in Article 41 of the same Act), 35/100 of acquisition tax and 50/100 of property tax shall be reduced (or 75/100 of property tax shall be reduced in cases of an industrial complex in an area other than the Seoul Metropolitan area) until December 31, 2025, respectively: Provided, That where the real estate is not used by the Korea Industrial Complex Corporation for a project prescribed in Article 45-13 (1) 3 or 5 of the Industrial Cluster Development and Factory Establishment Act without just grounds, within three years from the date of acquisition thereof, the reduced portion of acquisition tax and property tax shall be collected as a penalty. <Amended on Dec. 8, 2020; Mar. 14, 2023> [This Article Newly Inserted on Jan. 15, 2020]
| Article 78-3 (Reduction or Exemption for Foreign Investment) |
| (1) | Where a foreign-invested company or foreigner-contributed non-profit corporation defined in Article (2) 1 6 of the Foreign Investment Promotion Act (hereafter in this Article, referred to as “foreign-invested company”) files an application for tax reduction or exemption (hereafter in this Article, referred to as “application for tax reduction or exemption”) on foreign investment falling under Article 121-2 (1) of the Act on Restriction on Special Cases concerning Taxation (hereafter in this Article, referred to as “foreign investment”) pursuant to Article 121-2 (6) of that Act by not later than December 31, 2025 and is granted tax reduction or exemption pursuant to paragraph (8) of that Act (hereafter in this Article, referred to as “decision to grant tax reduction or exemption”), local taxes shall be reduced as prescribed in the following subparagraphs: Provided, That where a local government extends the reduction period up to 15 years or raises the reduction rate as prescribed by municipal ordinance, the period and rate prescribed by municipal ordinance shall apply, notwithstanding the following subparagraphs: <Amended on Mar. 14, 2023> |
| 1. | In cases of real estate acquired by a foreign-invested company to use directly for the business reported pursuant to Article 5 (1) or (2) of the Foreign Investment Promotion Act (hereafter in this Article, referred to as “business reported on foreign investment”) within five years (three years in cases of businesses subject to tax reduction or exemption under Article 121-2 (1) 2-2 through 2-9 and 3 of the Act on Restriction on Special Cases concerning Taxation) from the commencement date of business prescribed by Presidential Decree (hereafter in this Article, referred to as “commencement date of business”), 100/100 of the tax amount (hereafter in this Article, referred to an “amount of tax subject to reduction or exemption on acquisition tax”) calculated by multiplying the calculated amount of acquisition tax under the Local Tax Act by foreign investment ratio prescribed by Presidential Decree (hereafter in this Article, referred to as “foreign investment ratio”) shall be reduced or exempted; and, in cases of real estate acquired within the following two years, 50/100 of the amount of tax subject to reduction or exemption on acquisition tax shall be reduced; |
| 2. | In cases of real estate used by a foreign-invested company directly for the business reported for foreign investment as at the tax base date, 100/100 of the amount of tax (hereafter in this Article , referred to as an “amount of tax subject to reduction or exemption on property tax”) calculated by multiplying the calculated amount of property tax under the Local Tax Act by foreign investment ratio shall be reduced or exempted for five years (three years in cases of business subject to tax reduction or exemption under Article 121-2 (1) 2-2 through 2-9 and 3 of the Act on Restriction on Special Cases concerning Taxation) from the date the first liability for property tax arises after the commencement date of business; and 50/100 of the amount of tax subject to reduction or exemption on property tax shall be reduced for the following two years. |
| (2) | Local taxes shall be reduced or exempted, as prescribed in the following subparagraphs, on real estate used by a foreign-invested company that is granted tax reduction or exemption after filing an application for tax reduction or exemption on foreign investment by not later than December 31, 2025, to use directly for the businesses under the subparagraphs of Article 121-2 (1) of the Act on Restriction on Special Cases concerning Taxation before the commencement date of business or real estate used directly as at the tax base date, notwithstanding paragraph (1): Provided, That where a local government extends the reduction period up to 15 years or raises the reduction rate as prescribed by municipal ordinance, the period and rate prescribed by municipal ordinance shall apply, notwithstanding subparagraph 2: <Amended on Mar. 14, 2023> |
| 1. | In cases of real estate acquired after the date on which the decision to grant tax reduction is received, 100/100 of the tax amount subject to reduction on acquisition tax shall be reduced or exempted; |
| 2. | 100/100 of the amount of tax subject to reduction or exemption on property tax shall be reduced for five years (three years in cases of businesses subject to tax reduction or exemption under Article 121-2 (1) 2-2 through 2-9 and 3 of the Act on Restriction on Special Cases concerning Taxation) from the date the first liability for property tax arises after the relevant real estate is acquired pursuant to subparagraph 1; and 50/100 of the tax amount subject to reduction on property tax shall be reduced for the following two years. |
| (3) | Notwithstanding paragraphs (1) and (2), local taxes shall be reduced or exempted, as prescribed in the following subparagraphs, on foreign investment falling under the methods prescribed by Presidential Decree, such as transfer of business among foreign investment in the businesses under Article 121-2 (1) 1 of the Act on Restriction on Special Cases concerning Taxation: Provided, That where a local government extends the reduction period up to 10 years or raises the reduction rate as prescribed by municipal ordinance, the period and rate prescribed by municipal ordinance shall apply, notwithstanding the following subparagraphs: <Amended on Mar. 14, 2023> |
| 1. | Local taxes on real estate used by a foreign-invested company that receives the decision to grant tax reduction or exemption after filing an application for tax reduction or exemption on foreign investment by not later than December 31, 2025, to use directly for the businesses under the subparagraphs of Article 121-2 (1) of the Act on Restriction on Special Cases concerning Taxation and real estate used directly for the relevant business as at the tax base date shall be reduced or exempted as prescribed in the following classifications: |
| (a) | In cases of real estate acquired within three years from the commencement date of business, 50/100 of the amount of tax subject to reduction or exemption on acquisition tax shall be reduced; and in cases of real estate acquired within the following two years, 30/100 of the amount of tax subject to reduction or exemption on acquisition tax shall be reduced; |
| (b) | 50/100 of the amount of tax subject to reduction or exemption on property tax shall be reduced; and 30/100 of the amount of tax subject to reduction or exemption on property tax shall be reduced for the following two years; |
| 2. | Local taxes on real estate acquired by a foreign-invested company that is granted tax reduction or exemption after filing an application for tax reduction or exemption on foreign investment by not later than December 31, 2025, to use directly for the businesses under the subparagraphs of Article 121-2 (1) of the Act on Restriction on Special Cases concerning Taxation before the commencement date of business and real estate used directly for the relevant business as at the tax base date shall be reduced or exempted as prescribed in the following classifications: |
| (a) | In cases of real estate acquired after the date the tax reduction or exemption is decided, 50/100 of the amount of tax subject to reduction or exemption on acquisition tax shall be reduced; |
| (b) | 50/100 of the amount of tax subject to reduction or exemption on property tax shall be reduced for three years from the date the first liability for property tax arises after the relevant real estate is acquired; and 30/100 of the amount of tax subject to reduction or exemption on property tax shall be reduced for the following two years. |
| (5) | Where a foreign-invested company is granted a tax reduction or exemption after filing an application for reduction or exemption after the deadline for application for tax reduction or exemption expires, paragraphs (1) through (3) shall apply only to the remaining period after the date on which the tax reduction or exemption is decided. In such cases, even if the foreign-invested company have already paid the amount of tax before the decision to grant a tax reduction or exemption, the amount of tax shall not be refunded. |
| (6) | In applying paragraphs (1) through (3), in cases of any of the following foreign investment, the amount equivalent to holding ratio (where the holding ratio is less than 5/100, it shall be deemed 5/100) of stocks or equity shares calculated as prescribed by Presidential Decree (hereafter in this Article, referred to as “stocks, etc.”), the amount equivalent to lending, or the amount of foreign investment shall not be deemed to be subject to tax reduction or exemption: <Amended on Dec. 22, 2020> |
| 1. | Where a foreign corporation or foreign company (hereafter in this paragraph, referred to as “foreign corporation, etc.”) makes foreign investment and falls under any of the following cases: |
| (a) | Where a national of the Republic of Korea (excluding a person residing permanently in a foreign country by obtaining permanent residency or permission to stay in lieu of permanent residency) or Korean corporation (hereafter in this paragraph, referred to as “national of the Republic of Korea, etc.”) owns at least 5/100 of voting stocks, etc. of the relevant foreign corporation, etc. directly or indirectly; |
| (b) | Where a national of the Republic of Korea, etc. is a stockholder that appoints the representative director of the relevant foreign corporation, etc. or the majority of directors solely or in accordance with the agreement or contract, etc. with other stockholders; |
| (a) | A foreign-invested company; |
| (b) | A national of the Republic of Korea, etc. who directly or indirectly owns at least 5/100 of voting stocks, etc. of a foreign-invested company; |
| (c) | A nation of the Republic of Korea, etc. who is a stockholder that appoints the representative director of a foreign-invested company or the majority of directors solely or in accordance with the agreement or contract, etc. with other stockholders; |
| (7) | When a foreign-invested company increases its capital, paragraphs (1) through (6) shall apply mutatis mutandis to tax reduction or exemption for the increased capital; in such cases, the commencement date of business under paragraphs (1) through (3) shall be deemed the date on which the registration on changes of capital increase is filed: Provided, That in cases of an application for tax reduction or exemption falling under the standards prescribed by Presidential Decree, the consultation with the Minister of the Interior and Safety or the head of a local government under Article 121-2 (8) of the Act on Restriction on Special Cases concerning Taxation may be omitted. |
| (8) | When calculating the amount of tax subject to reduction or exemption on acquisition tax and property tax for a foreign-invested company pursuant to paragraph (7), the following stocks, etc. shall be reduced or exempted during the remaining period of reduction or exemption and at the ratio of reduction or exemption for the relevant remaining period in the same manner as tax reduction or exemption is granted to stocks, etc. based on which such stocks, etc. are acquired: |
| (9) | In calculating the amount of tax subject to reduction or exemption on acquisition tax and property tax for a foreign-invested company pursuant to paragraph (7), where a foreign-invested company continues using the fixed assets for business purposes of the business whose period of tax reduction or exemption under paragraphs (1) through (3) expires in the business subject to tax reduction or exemption for the portion of capital increase under paragraph (7) (hereafter in this paragraph, referred to as “business for the portion of capital increase”) or in circumstances prescribed by Presidential Decree, the amount calculated by the following formula shall be the amount of tax subject to reduction or exemption on acquisition tax and property tax for the business for the portion of capital increase: |
The amount of tax subject to reduction or exemption on acquisition tax and the amount of tax subject to reduction or exemption on property tax × (The value of the fixed assets for business purposes newly acquired or installed after the date the registration on changes of capital increase is filed / The total value of the fixed assets for business purposes for the business for the portion of capital increase)
| (10) | Notwithstanding paragraph (7), where a foreign-invested company increases its capital within the reported foreign investment amount confirmed when the tax reduction or exemption is decided prior to the third anniversary from the first notice concerning the decision on the tax reduction or exemption is served after reporting the foreign investments, even if no application is filed for tax reduction or exemption, the foreign-invested company shall be deemed to be granted a tax reduction or exemption for the portion of the increased capital. |
| (11) | Where the first contribution (including capital increase; hereafter in this paragraph, the same shall apply) is not made until the third anniversary of the date the first notice of the decision to grant tax reduction or exemption is served after reporting foreign investment, the effect of the decision to grant tax reduction or exemption becomes invalid; and where the first contribution is made within three years from the date the first notice of the decision to grant tax reduction or exemption is served after reporting foreign investment, but the relevant business does not commence to the fifth anniversary of the first notice of the decision to grant tax reduction or exemption is served, paragraphs (1) through (3) shall apply as if the business commenced at the fifth anniversary of the date the first notice of decision to grant tax reduction or exemption is served. |
| (12) | In any of the following cases, the head of a local government shall collect the reduced portion of acquisition tax and property tax pursuant to paragraphs (1) through (3) as a penalty. In such cases, the scope of the amount of tax to be collected and methods for application in cases falling under multiple grounds for additional tax collection; and other necessary matters shall be prescribed by Presidential Decree: |
| 1. | Where a foreign investor transfers stocks, etc., which he/she owns to a nation of the Republic of Korea or a Korean corporation pursuant to this Act after the acquisition tax or property tax is reduced or exempted pursuant to paragraphs (1) and (3); |
| 2. | Where the ratio of stocks, etc. of a foreign investor falls short of the ratio of stocks, etc. at the time of reduction or exemption after the acquisition tax or property tax is reduced or exempted pursuant to paragraphs (2) and (3); |
| 4. | Where the relevant foreign-invested company closes its business; |
| 6. | Where such real estate is not used directly for the relevant purposes without just grounds, within three years from the date of acquisition |
| 7. | Where such real estate is sold or donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (13) | Notwithstanding paragraph (12), in any of the following cases, the amount of tax reduced may not be collected as a penalty, as prescribed by Presidential Decree: |
| 1. | Where the registration of a foreign-invested company is revoked as the foreign-invested company is dissolved due to a merger; |
| 2. | Where any capital goods imported with customs duties, etc. exempted pursuant to Article 121-3 of the Act on Restriction on Special Cases concerning Taxation have been used but are used for any other purpose than their original purposes or disposed of as they become unusable for their original purposes due to a natural disaster or other force majeure events, or depreciation, technological advancement, and other changes in economic conditions; |
| 4. | Where a foreign-invested company meets the relevant criteria for tax reduction or exemption by delivering the object of investment within the performance period extended by the relevant Mayor/Do Governor under the Foreign Investment Promotion Act; |
| 5. | Where the purpose of tax reduction exemption is deemed achieved, which is prescribed by Presidential Decree. |
| (14) | Where a foreign-invested company granted tax reduction or exemption falls under any of the subparagraphs of paragraph (12) 3 through 7, the reduction or exemption under paragraphs (1) through (3) shall not apply during the relevant taxable year and the remaining reduction period, as prescribed by Presidential Decree.(15) The procedures, etc. for application for tax reduction or exemption and decision to grant tax reduction or exemption under paragraphs (1) through (14) shall be governed by the provisions of Article 121-2 (6) through (8) of the Act on Restriction on Special Cases concerning Taxation. |
[This Article Newly Inserted on Jan. 15, 2020]
| Article 79 (Reduction or Exemption for Relocating Corporations to Provinces) |
| (1) | Where a corporation having its main office or principal office established in a large city prescribed by Presidential Decree (hereafter in this Section, referred to as a “large city”) and directly engaging in business, sells, or terminates a lease agreement of, its main office or principal office and then relocates its main office or principal office to an area other than an over-concentration limitation zone, real estate acquired to directly engage in the relevant business shall be exempted from acquisition tax until December 31, 2024; and such real estate shall be exempted from property tax for five years from the date the first liability to pay property tax on such real estate arises, and shall be reduced by 50/100 for three years thereafter: Provided, That the reduced or exempted portion of acquisition tax and property tax shall be collected as a penalty in any of the following cases: <Amended on Jan. 1, 2013Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Where such corporation is dissolved after relocating (excluding dissolution in the course of a merger, split-off, or merger after split-off) or such corporation incorporates a corporation manufacturing the products that it manufactured when it was located in the over-concentration limitation zone before relocating while being granted a tax reduction or exemption; |
| 2. | Where the relevant real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant business for less than two years. |
| (2) | Where a corporation registered in a large city relocates its main office or principal office to an area other than an over-concentration limitation zone, the registration of such corporation and the registration of real estate following such relocation, shall be exempted from registration license tax until December 31, 2024. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (3) | The scope of a main office or principal office to be relocated to an area other than an over-concentration limitation zone, and standards for application of reduction, exemption, etc. prescribed in paragraphs (1) and (2), shall be prescribed by Ordinance of the Ministry of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Dec. 28, 2021> |
| Article 80 (Reduction or Exemption for Relocating Factories to Provinces) |
| (1) | Real estate acquired by a person, who operated a business with factory facilities in a large city and has closed such factory and has relocated to any area other than an over-concentration limitation zone where it is not prohibited or restricted to establish a factory, to continue the relevant business, shall be exempted from acquisition tax until December 31, 2024; and such real estate shall be exempted from property tax for five years from the date the first liability to pay property tax on such real estate arises, and shall be reduced by 50/100 for three years thereafter: Provided, That the reduced or exempted portion of acquisition tax and property tax shall be collected as a penalty in any of the following cases: <Amended Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| 1. | Where such person re-establishes in a large city, a factory manufacturing products that he or she manufactured when he or she was located in the large city before relocating, while being granted local tax reduction or exemption; |
| 2. | Where the relevant real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant business for less than two years. |
| (2) | The type of business and size of a factory and standards for applying exemption, reduction, etc. prescribed in paragraph (1), shall be prescribed by Ordinance of the Ministry of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017> |
| Article 81 (Reduction or Exemption for Relocating Public Agencies to Provinces) |
| (1) | Acquisition tax on real estate acquired by a relocating public agency defined in the Special Act on the Construction and Development of Innovation Cities (hereafter in this Article, referred to as “relocating public agency”) for the purposes of relocation after obtaining approval of a plan for relocation to provinces from the Minister of Land, Infrastructure and Transport under Article 4 of the same Act, shall be reduced by 50/100 until December 31, 2025; and property tax on such real estate shall be reduced by 50/100 for five years from the date the first liability to pay property tax on such real estate arises. <Amended on Mar. 14, 2023> |
| (2) | The corporate registration of a relocating public agency shall be exempted from registration license tax until December 31, 2025. <Amended on Mar. 14, 2023> |
| (3) | Where a person prescribed under subparagraph 1 becomes qualified as one household owning only one house prescribed by Presidential Decree by acquiring a house to reside in the relevant area, acquisition tax shall be reduced or exempted until December 31, 2025, as prescribed under subparagraph 2: <Amended on Dec. 31, 2011; Jan. 1, 2013; May 18, 2015Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar.14, 2023> |
| 1. | Persons eligible for reduction or exemption: |
| (a) | Executives and employees relocating along with relocating public agencies; |
I Public officials belonging to the National Agency for Administrative City Construction (limited to those who belonged to the agency before December 31 2019);
| 2. | Details of reduction or exemption: |
| (a) | A house with an area for exclusive use by its occupants, not exceeding 85 square meters: To be exempted; |
| (b) | A house with an area for exclusive use by its occupants, between 85 and 102 square meters: To be reduced by 750/1,000; |
| (c) | A house with an area for exclusive use by its occupant, between 102 and 135 square meters: To be reduced by 625/1,000. |
| (4) | Where a person granted acquisition tax reduction or exemption pursuant to paragraph (3) falls under any of the following cases without just grounds, such as death; marriage;; old-aged retirement; or change of work area due to service in a dispatched division, the reduced or exempted portion of acquisition tax shall be collected as a penalty: Provided, That in cases of a dispatched division, the reduced portion of acquisition tax shall be collected as a penalty only in cases under subparagraphs 1 and 3 (limited to sale and donation of the relevant house). <Newly Inserted on Dec. 31, 2011; Dec. 29, 2015; Dec. 26, 2017; Mar. 14, 2023> |
| 1. | Where he/she sells or donates a house before the date the relocating public agency or central administrative agency, etc. (referring to the earlier of the date of registration or the date services begin, in cases of relocating public agencies, and referring to the date services begin, in cases of central administrative agencies, etc.; hereafter in this Article, the same shall apply) relocate; |
| 2. | Where he/she fails to begin residing continuously in a house (referring to continuous residence therein after filing a move-in report under the Resident Registration Act; hereafter in this Article, the same shall apply) within three months from the date the house is acquired; |
| 3. | Where he/she sells or donates the relevant house or uses it for any other purpose (including lease), after residing in the house continuously for less than three years. |
| (5) | Where a person who is an executive or employee, or public official (including a person specially provided with a house upon the head of an agency to which he/she belongs deeming him/her eligible for a house) belonging to a relocating public agency, central administrative agency, etc., the National Agency for Administrative City Construction, or the Sejong Government Complex Management Office (hereafter in this paragraph, referred to as "agency eligible for reduction or exemption") under paragraph (3) 1, and who contracted to acquire a house in the relevant district, but was not granted a reduction in or exemption from acquisition tax under paragraph (3), because he/she was obliged to work for an agency other than an agency eligible for reduction or exemption due to the official announcement of appointment at the time of acquisition of such house, returns to an agency eligible for reduction or exemption after he/she has completed the period of services within three years, an amount calculated by subtracting the amount of tax to be paid if an acquisition tax reduction or exemption granted under paragraph (3) 2 is applied to such house, from the amount of tax already paid, shall be refunded to him/her. <Newly Inserted on Jan. 1, 2013; Dec. 29, 2015> |
| (6) | Where a person who has received a refund under paragraph (5) falls under any of the following cases, the amount of tax refunded shall be collected as a penalty. In such cases, “the date a house is acquired” in paragraph (4) 2 shall be construed as “the date he/she returns to an agency eligible for reduction or exemption.” <Newly Inserted on Mar. 14, 2023> |
[Title Amended on Dec. 31, 2011]
| Article 81-2 (Reduction or Exemption for Relocation of Koreans Employed by United States Forces Korea to Pyeongtaek) |
| (1) | Acquisition tax shall be reduced or exempted as prescribed in each item of subparagraph 2 until December 31. 2024, where a person falling under any item of subparagraph 1 becomes qualified as one household owning only one house (limited to the first house acquired in the relevant region) prescribed by Presidential Decree, by acquiring the house to reside in Pyeongtaek-si, due to the relocation of a U.S. army base in the Republic of Korea (limited to cases of relocation from a region other than Pyeongtaek-si to Pyeongtaek-si), under the Memorandum of Agreement between the Government of the Republic of Korea and the Government of the United States of America regarding the Agreed Recommendation for Implementation of the Agreement between the Republic of Korea and the United States of America on the Relocation of United States Forces from the Seoul Metropolitan Area, and under the Agreement between the Republic of Korea and the United States of America for the Land Partnership Plan: <Amended on Dec. 28, 2021> |
| 1. | Persons eligible for reduction or exemption: |
| (a) | Korean workers relocating to Pyeongtaek-si due to the relocation of U.S. army bases in Korea, among civilian employees of the Unites States Armed Forces under Article 17 of the Agreement under Article IV of the Mutual Defense Treaty between the Republic of Korea and the United States of America, regarding Facilities and Areas and the Status of United States Armed Forces in the Republic of Korea and civilian employees of the invited contractors who are legal entities under Article 15 of the same Agreement; |
| (b) | Korean workers relocating to Pyeongtaek-si along with U.S. army bases in the Republic of Korea, among civilian personnel employed under Article 1 of the Agreement between the Republic of Korea and the United States of America regarding the Status of the Korean Service Corps; |
| 2. | Details of reduction and exemption: |
| (a) | A house with an area for exclusive use not exceeding 85 square meters: Acquisition tax shall be exempted; |
| (b) | A house with an area for exclusive use exceeding 85 square meters but not exceeding 102 square meters: Acquisition tax shall be reduced by 750/1,000; |
| (c) | A house with an area for exclusive use exceeding 102 square meters but not exceeding 135 square meters: Acquisition tax shall be reduced by 625/1,000. |
| (2) | Where a person for whom acquisition tax has been reduced or exempted pursuant to paragraph (1) sells or donates the relevant house, or uses it for any other purpose (including lease) within two years from the acquisition date of the house without just grounds, such as death, marriage, relocation to a foreign country, old-aged retirement, or dispatched service, the reduced or exempted portion of acquisition tax shall be collected as a penalty. |
[This article Newly Inserted on Dec. 24, 2018]
| Article 82 (Reduction or Exemption for Improvement of Housing in Development Restriction Zones) |
Where a person (in cases of a person verified as having resided in the over-concentration limitation zone for at least one year by resident registration card by household, etc. under the Resident Registration Act) residing in a development restriction zone prescribed in Article 3 of the Act on Special Measures for Designation and Management of Development Restriction Zones and his or her family, acquires, for residing at all times, a house to be improved pursuant to a community village improvement plan, with an area for exclusive use by its occupants, not exceeding 100 square meters, in an area subject to the designation of a community village zone, property tax on such house (and land appurtenant thereto shall be limited to the portion not exceeding seven times the projected horizontal area of the residential building), shall be exempted for five years from the date the first liability to pay property tax arises after the acquisition of such residential building until December 31, 2024. <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021>
| Article 83 (Reduction or Exemption for Market Improvement Projects) |
| (1) | Real estate acquired by a person (hereafter in this Article, referred to as "market improvement project implementer") intending to promote a market improvement project in a market improvement zone approved pursuant to Article 37 of the Special Act on the Development of Traditional Markets and Shopping Districts, to use directly for such project, shall be exempted from acquisition tax until December 31, 2024; and property tax thereon shall be reduced by 50/100 for five years from the date the first liability to pay property tax on such real estate arises: Provided, That property tax on land, reduction or exemption shall begin to apply from the date construction works begin. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (2) | Where a person prescribed by Presidential Decree acquires real estate as his or her first acquisition from a market improvement project implementer in a market improvement zone under paragraph (1), acquisition tax on such real estate (excluding houses) shall be exempted until December 31, 2024; and property tax on a building acquired due to the implementation of a market improvement project, shall be reduced by 50/100 for five years from the date the first liability to pay property tax on such building arises. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (3) | Where approval of a project promotion plan is cancelled pursuant to Article 38 of the Special Act on the Development of Traditional Markets and Shopping Districts; where real estate is not used directly for the project, within three years from the date of acquisition of such real estate, without just grounds; or where real estate is sold, donated, or used for any other purpose, the portion of acquisition tax reduced or exempted pursuant to paragraphs (1) and (2) shall be collected as a penalty. <Amended on Dec. 27, 2010; Dec. 29, 2015> |
| Article 84 (Reduction or Exemption for Land with Restricted Private Rights) |
| (1) | Property tax on land, buildings, and houses (limited to the relevant parts, respectively) prescribed in subparagraph 3 of Article 104 of the Local Tax Act, for which the projects for urban or Gun planning facilities defined in subparagraph 7 of Article 2 of the National Land Planning and Utilization Act have not been implemented for at least ten consecutive years after the relevant topographical map was publicized pursuant to Article 32 of the same Act, shall be reduced by 50/100 until December 31, 2024; and the amount of tax to be imposed pursuant to Article 112 of the Local Tax Act, shall be exempted. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 24, 2018; Dec. 28, 2021> |
| (2) | In cases of land (including land appurtenant to a house) for public facilities defined in subparagraph 13 of Article 2 of the National Land Planning and Utilization Act, for which the determination of an urban or Gun management plan and a topographical map concerning the urban or Gun management plan have been publicized pursuant to Articles 30 and 32 of the same Act, property tax on the relevant portion of land, for which such plan has not been implemented as at the tax base date, shall be reduced by 50/100 until December 31, 2024. <Amended on Dec. 31, 2014; Dec. 29, 2015; Dec. 27, 2016; Dec. 24, 2018; Dec. 28, 2021> |
| (3) | In cases of land on which construction, etc. is restricted pursuant to Article 45 of the Railroad Safety Act, property tax on the relevant portion shall be reduced by 50/100 until December 31, 2024. <Amended on Dec. 31, 2014; Dec. 24, 2018; Dec. 28, 2021> |
SECTION 8 Support for Public Administration, etc.
| Article 85 (Reduction or Exemption for the Korea Rehabilitation Agency) |
| (1) | Acquisition tax on real estate acquired by the Korea Rehabilitation Agency under the Act on Probation, Etc. or a non-profit corporation permitted for relief and rehabilitation projects under the same Act, to use directly for relief and rehabilitation projects, shall be reduced by 25/100; and property tax on real estate used directly for such projects as at the tax base date, shall be reduced by 25/100 until December 31, 2025, respectively. <Amended on Jan. 1, 2013; Dec. 29, 2015; Dec. 27, 2016; Mar. 14, 2023> |
| Article 85-2 (Reduction or Exemption for Local Public Enterprises) |
| (1) | Local taxes shall be reduced or exempted until December 31, 2025 (in cases under subparagraph 4, December 31, 2024), as follows, on a local government-invested public corporation established pursuant to Article 49 of the Local Public Enterprises Act (hereafter in this Article, referred to as a “local government-invested public corporation”): <Amended on Jan. 1, 2014; Dec. 29, 2015; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired by a local government-invested public corporation to use directly for the business (including other business necessarily incidental thereto; hereafter in this Article, referred to as “purpose business”) directly related to the establishment purposes shall be reduced by an amount calculated by multiplying 50/100 (where a municipal ordinance prescribes otherwise within 50/100, such rate) of acquisition tax by the investment ratio of the local government prescribed by Presidential Decree (hereafter in this Article, referred to as “investment ratio of a local government); |
| 2. | Deleted; <Jan. 15, 2020> |
| 3. | Property tax on real estate used by a local government-invested public corporation directly for its purpose business (excluding real estate for business referred to in Article 2 (1) 7 and 8 of the Local Public Enterprises Act) as at the tax base date, shall be reduced by an amount calculated by multiplying 50/100 (where a municipal ordinance prescribes otherwise within 50/100, such rate) of property tax, by the investment ratio of the local government; |
| 4. | Public facilities, appurtenant land, and a public site to be devolved on the State or a local government gratuitously pursuant to relevant statutes, being real estate in a housing site development project zone or complex construction project zone among real estate for business defined in Article 2 (1) 7 and 8 of the Local Public Enterprises Act, shall be exempted from property tax . In such cases, the scope of public facilities, appurtenant land, and a public site, shall be prescribed by Presidential Decree. |
| (2) | Local taxes shall be reduced until December 31, 2019, as follows, on a local public agency established pursuant to Article 76 the Local Public Enterprises Act (hereafter in this Article, referred to as “local public agency”): <Amended on Jan. 1, 2014; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired by a local public agency to use directly for its purpose business, shall be reduced by 100/100 (where a municipal ordinance prescribes otherwise within 100/100, such rate shall apply thereto); |
| 2. | Deleted; <Jan. 15, 2020> |
| 3. | Property tax on real estate used by a local public agency directly for its purpose business as at the tax base date, shall be reduced by 100/100 (where a municipal ordinance prescribes otherwise within 100/100, such rate). |
| (3) | Local taxes shall be reduced until December 31, 2025, as follows, on a local government-invested or -funded institution designated and publicly notified pursuant to Article 5 of the Act on the Operation of Local Government Invested or -Funded Institutions (hereafter in this paragraph, referred to as a “local government-invested or -funded institution”): <Amended on Jan. 1, 2020; Mar. 14, 2023> |
| 1. | Acquisition tax on real estate acquired by a local government-invested or -funded institution to use directly for its purpose business, shall be reduced by an amount calculated by multiplying 50/100 (where a municipal ordinance prescribes otherwise within 50/100, such rate) of acquisition tax, by the investment ratio of the local government; |
| 2. | Property tax on real estate used by a local government-invested or -funded institution directly for its purpose business as at the tax base date shall be reduced by an amount calculated by multiplying 50/100 (where a municipal ordinance prescribes otherwise within 50/100, such rate), by the investment ratio of the local government. |
| (4) | Deleted. <Jan. 15, 2020> |
[This Article Newly Inserted on Dec. 31, 2011]
| Article 86 (Reduction or Exemption for Rental Housing to U.S. Forces Servicemen in Korea) |
Acquisition tax shall be exempted until December 31, 2016, on real estate acquired by the Korea Land and Housing Corporation, to rent to U.S. Forces Servicemen in Korea; and property tax shall be reduced by 50/100 until December 31, 2016, on real estate used as rental housing as at the tax base date. <Amended on Jan. 1, 2013; Dec. 29, 2015>
| Article 87 (Reduction or Exemption for Community Credit Cooperatives) |
| (1) | Local taxes shall be reduced or exempted, as follows, on credit unions incorporated pursuant to the Credit Unions Act (excluding the National Credit Union Federation of Korea; hereafter in subparagraphs 1 and 2, referred to “s "credit unions"): <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020> |
| 1. | Acquisition tax shall be exempted on real estate acquired by a credit union to use directly for the duties prescribed in Article 39 (1) 1 of the Credit Unions Act; and property tax shall be exempted on real estate used directly for such duties as at the tax base date, until December 31, 2023, respectively; |
| 2. | Acquisition tax on real estate acquired by a credit union to use directly for the duties prescribed in Article 39 (1) 2 or 4 of the Credit Unions Act and property tax on real estate used directly for such duties as at the base tax date shall be exempted, until December 31, 2023, respectively; |
| 3. | Acquisition tax shall be reduced by 25/100 on real estate acquired by the National Credit Union Federation of Korea incorporated pursuant to the Credit Unions Act, to use directly for the duties prescribed in Article 78 (1) 1 and 2 of the same Act; and property tax shall be reduced by 25/100 on real estate used directly for its business as at the tax base date, until December 31, 2017, respectively. |
| (2) | Local taxes shall be reduced or exempted, as follows, on community credit cooperatives incorporated pursuant to the Community Credit Cooperatives Act (excluding the Korean Federation of Community Credit Cooperatives; hereafter in subparagraphs 1 and 2, referred to as "community credit cooperatives"): <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 31, 2014; Dec. 29, 2015; Dec. 26, 2017; Dec. 29, 2020> |
| 1. | Acquisition tax shall be exempted on real estate acquired by a community credit cooperative to use directly for the duties prescribed in Article 28 (1) 1, and property tax shall be exempted on real estate used directly for such duties as at the tax base date, until December 31, 2023, respectively; |
| 3. | Acquisition tax shall be reduced by 25/100 on real estate acquired by the Korean Federation of Community Credit Cooperatives incorporated pursuant to the Community Credit Cooperatives Act, to use directly for the duties prescribed in Article 67 (1) 1 and 2 of the same Act; and property tax shall be reduced by 25/100 on real estate used directly for its business as at the tax base date, until December 31, 2017, respectively. |
| Article 88 (Reduction or Exemption for Saemaeul Movement Organizations) |
| (1) | Real estate acquired by a Saemaul movement organization, to which the Support of the Saemaul Movement Organization Act applies, to use for its unique duties, shall be exempted from acquisition tax; and real estate used directly for its unique duties as at the tax base date, shall be exempted from property tax until December 31, 2025, respectively. <Amended on Jan. 1, 2013; Dec. 31, 2014; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| (2) | Real estate acquired by the Korea Freedom Federation under the Korea Freedom Federation Support Act to use directly for its unique duties shall be exempted from acquisition tax; and real estate used directly for its unique duties as at the tax base date shall be exempted from property tax until 31, 2025, respectively. <Amended on Dec. 28, 2021; Mart. 14, 2023> |
| Article 89 (Exemption for Political Parties) |
| (1) | Acquisition tax shall be exempted until December 31, 2025, on real estate acquired by a political party established pursuant to the Political Parties Act (hereafter in this Article, referred to “s "political pa”ty"), to use directly for any relevant business: Provided, That the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Dec. 31, 2014; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used directly for the relevant purposes without just grounds, within three years from the date of acquisition; |
| 3. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (2) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act, shall be exempted until December 31, 2025, respectively, on real estate (including land appurtenant to buildings prescribed by Presidential Decree) used by a political party directly for the relevant business as at the tax base date: Provided, That where such real estate is used commercially, or a fee is charged for use thereof; or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof, shall be exempted. <Amended on Dec. 31, 2014; Dec. 29, 2015; Jan. 15, 2020; Mar. 14, 2023> |
| (3) | Registration license tax shall be exempted on a license used by a political party directly for its business; and the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act; hereafter in this paragraph, the same shall apply) and pro rata employee portion of resident tax shall be exempted on a political party, until December 31, 2025, respectively: Provided, That no pro rata business place portion and pro rata employee portion of resident tax prescribed by Presidential Decree, shall be exempted when related to profit-making business. <Amended on Jan. 1, 2014; Dec. 31, 2014; Dec. 29, 2015; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| (4) | Where generated electricity, etc. is supplied to a political party gratuitously, local resource and facility tax prescribed in Article 146 (1) and (2) of the Local Tax Act on such portion, shall be exempted until December 31, 2019. <Amended on Dec. 31, 2014; Jan. 15, 2020> |
| Article 90 (Exemption for Village Associations) |
| (1) | Where real estate and ships are acquired for joint ownership of the residents of a community, such as a village association prescribed by Presidential Decree (hereinafter referred to as "village association, etc."), acquisition tax thereon shall be exempted until December 31, 2025: Provided, That the exempted portion of acquisition tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010Dec. 31, 2011; Dec. 31, 2014; Dec. 27, 2016; Dec. 26, 2017; Jan. 15, 2020; Mar. 14, 2023> |
| 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used directly for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 3. | Where such real estate is sold or donated (excluding cases of gratuitous donation to the State or a local government to use for the relevant purpose), or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| (2) | Property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) and local resource and facility tax prescribed in Article 146 (3) of the Local Tax Act, shall be exempted on real estate owned by a village association, etc.; and the pro rata business place portion (limited to an amount of tax imposed pursuant to Article 81 (1) 2 of the Local Tax Act) and pro rata employee portion of resident tax, shall be exempted on the village association, etc., until December 31, 2025, respectively: Provided, That where such real estate or woodland is used commercially, or a fee is charged for use thereof; or part of such property is not used directly for its original purpose, no such taxes on such property or part thereof, shall be exempted. <Amended on Jan. 1, 2014; Dec. 31, 2014; Jan. 15, 2020; Dec. 29, 2020; Mar. 14, 2023> |
| Article 91 (Special Taxation for Real Estate for Dormitories for Offspring of Diplomats Abroad) |
Acquisition tax on land and buildings for a dormitory of offspring of diplomats abroad, owned by the Korean Council on Foreign Relations, an incorporated association, shall be imposed after applying 20/1,000 until December 31, 2025, notwithstanding the tax rate prescribed in Article 11 (1) of the Local Tax Act; and registration license tax on the registration of such real estate, shall be exempted until December 31, 2022: Provided, That the reduced or exempted portion of acquisition tax and registration license tax shall be collected as a penalty in any of the following cases: <Amended on Dec. 27, 2010; Dec. 31, 2011; Dec. 27, 2016; Jan. 15, 2020; Mar. 14, 2023> | 1. | Where such real estate is used commercially within five years from the date of acquisition; |
| 2. | Where such real estate is not used directly for the relevant purposes without just grounds, within one year from the date of acquisition; |
| 3. | Where such real estate is sold, donated, or used for any other purpose, after having been used directly for the relevant purposes for less than two years. |
| Article 92 (Reduction or Exemption for Substitute Acquisition due to Natural Disasters) |
| (1) | Where a building, ship, motor vehicle, machinery, or equipment has been severely damaged or destroyed due to a natural disaster or force majeure, and thus any of the following acquisitions is to be made within two years from the date of severe damage or destruction, acquisition tax thereon shall be exempted: Provided, That where the gross floor area of a newly acquired building, exceeds that of the previous building; where the tonnage of a newly constructed ship, of a ship converted to a different type of ship, or of a substitute ship acquired, exceeds that of the previous ship; or where the price of a newly acquired motor vehicle, machinery, or equipment, exceeds that (referring to the purchase price of new products) of the previous motor vehicle, machinery, or equipment, acquisition tax shall be imposed on such excess: <Amended on Dec. 29, 2015; Dec. 24, 2018> |
| 1. | Where a building is constructed or repaired for restoration; |
| 2. | Where a ship is built or converted to a different type of ship; |
| 3. | Where a substitute building, ship, motor vehicle, machinery, or equipment, is acquired. |
| (2) | Registration license tax shall be exempted on the registration of cancellation or on the enrollment of cancellation of a severely damaged or destroyed building, ship, motor vehicle, machinery, or equipment due to a natural disaster or force majeure, and on a license for construction permit for new construction or repair within two years from the date of severe damage or destruction, to restore a severely damaged or destroyed building. <Amended on Dec. 27, 2010; Dec. 29, 2015; Dec. 24, 2018> |
| (3) | Motor vehicle tax shall be exempted on a motor vehicle recognized by the head of a Si/Gun, irretrievable or unusable because such motor vehicle has been misplaced, severely damaged, or destroyed due to a natural disaster, fire, traffic accident, etc. <Amended on Dec. 29, 2015> |
| Article 92-2 (Tax Credits for Payment by Automatic Transfer) |
| (1) | The following amounts shall be subtracted from the amount of local tax to be imposed pursuant to the Local Tax Act on a taxpayer who applies for the payment of local tax (excluding local taxes that are occasionally imposed and collected) under Article 35 (1) 3 of the Framework Act on Local Taxes by electronic service under Article 30 (1) of that Act (hereafter in this Article, referred to as "payment by electronic services") or by automatic payment under Article 23 (2) of that Act (hereafter in this Article, referred to as "automatic payment”"), by no later than the end of the month before the month in which the payment deadline falls: <Amended on Dec. 27, 2016; Dec. 26, 2017; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Where he/she applies for payment by electronic service only or automatic payment only: Amount prescribed by municipal ordinance between 250 won and 800 won per tax notice; |
| 2. | Where he/she applies for both the payment by electronic service and automatic payment: Amount prescribed by municipal ordinance between 500 won and 1,600 won per tax notice. |
| (2) | The tax credit prescribed in paragraph (1) shall be limited to the standard amount of small debts uncollectable under the Local Tax Act among the amount of local tax to be imposed pursuant to the same Act. |
| (3) | Where a person granted the tax credit pursuant to paragraph (1) fails to pay the local tax by the payment deadline, the amount of the tax credit granted shall be collected as a penalty. |
[This Article Newly on Dec. 27, 2010]
[Title Amended on Dec. 26, 2017]
| Article 92-3 Previous Article 92-3 Moved to Article 47-4 <Dec. 31, 2014> |
CHAPTER III SPECIAL PROVISIONS ON LOCAL INCOME TAXES
SECTION 1 Credit, Reduction, and Exemption of Global Income Tax
| Article 93 (Tax Credit for Bookkeeping) |
| (1) | Where a person subject to simple bookkeeping under Article 160 (3) of the Income Tax Act enters and calculates the amount of income according to double-entry bookkeeping, and submits the documents pursuant to Article 70 (4) 3 of the Income Tax Act, when filing a final return on the tax base pursuant to Article 95 of the Local Tax Act, the equivalent of 20/100 of the amount calculated by multiplying the ratio of business income calculated according to the relevant book of account to global income by the amount of individual local income tax calculated on global income (hereinafter referred to “s "amount of individual local income tax calculated on global income"), shall be deducted from the amount of individual local income tax calculated on global income: Provided, That where the amount of the tax credit exceeds 100,000 won, 100,000 won shall be deducted. |
| (2) | No tax credit prescribed in paragraph (1) (hereinafter referred to as "tax credit for bookkeeping"), shall apply to any of the following cases: |
| 1. | Where a person files a return on his/her income omitting at least 20/100 of his/her income to be reported according to the book of account kept and recorded; |
| 2. | Where a person fails to keep the books of account and evidential documents concerning the tax credit for bookkeeping for five years from the end of the period for a final return on the tax base: Provided, That this shall not apply in extenuating circumstances prescribed by Presidential Decree, such as a natural disaster. |
| (3) | Matters necessary for the tax credit for bookkeeping shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 94 (Tax Credit for Wages and Salary Income) |
| (1) | For a resident or non-resident with wage and salary income, the following amount shall be deducted from the assessed individual local income tax on global income taxation on the relevant wage and salary income: <Amended by Act No. 12506, Mar. 24, 2014; Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
Assessed individual local income tax on global income on wage and salary incomeAmount of creditNot exceeding 130,000 won55/100 of the calculated tax Over 130,000 won71,500 won + 30/100 of the excess of 130,000 won
| (2) | Notwithstanding paragraph (1), where the tax deduction exceeds the amount classified as follows, such excess shall be deemed written off: <Newly Inserted by Act No. 12506, Mar. 24, 2014; Act No. 14477, Dec. 27, 2016> |
| 1. | Where the total pay does not exceed 33 million won: 74,000 won; |
| 2. | Where the total pay exceeds 33 million won, but does not exceed 70 million won: 74,000 w?n - [(total p?y - 33 million won) x 8/10,000]: Provided, That if the above amount is less than 66,000 won, it shall be 66,000 won; |
| 3. | Where the total pay exceeds 70 million won: 66,000 w?n - [(total p?y - 70 million won) x 1/20]: Provided, That if the above amount is less than 50,000 won, it shall be 50,000 won. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 95 (Dividend Tax Credit) |
| (1) | If any dividend income to which the proviso to the main sentence of Article 17 (3) of the Income Tax Act applies, is included in global income of a resident or non-resident, the equivalent of 10/100 of the amount added to the total income in the relevant taxable period, shall be deducted from the assessed individual local income tax on global income pursuant to the proviso to the main sentence of the same paragraph. <Amended by Act No. 12955, Dec. 31, 2014> |
| (2) | Deduction made under paragraph (1) shall be referred to “s "dividend tax credit." |
| (3) | Dividend income eligible for dividend tax credit for the purposes of paragraph (1), shall be the dividend income included in the tax base of global income prescribed in Article 14 (2) of the Income Tax Act, exceeding the standard amount of global taxation on any interest income, etc. |
| (4) | Matters necessary for calculating, etc. the dividend tax credit shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 96 (Tax Credit for Casualty Loss) |
| (1) | Where a business operator is deemed to lack means to pay taxes, due to asset loss, by a natural disaster or any other accident (hereinafter referred to as "disasters"), equivalent to at least 20/100 of the amount of total assets prescribed by Presidential Decree (hereafter in this paragraph, referred to as "amount of total assets") in the relevant taxable period, the amount calculated (within the value of assets lost) by multiplying the following amount of individual local income tax (referring to the amount of individual local income tax on business income; hereafter in this Article, the same shall apply) in proportion (hereafter in this Article, referred to as "asset loss ratio") to the value of such loss, to the total assets before the loss, shall be deducted from such amount of tax. In such cases, the value of land shall not be included in the value of assets: |
| 1. | Individual local income tax being income tax not levied as at the date a disaster occurs and income tax levied but yet unpaid (including any penalty surcharge); |
| 2. | Individual local income tax on income in the taxable period attributable to the date a disaster occurs. |
| (2) | In cases falling under paragraph (1), when any tax is to be deducted pursuant to Article 93, 95, or 97, paragraph (1) shall apply to individual local income tax after deducting such amount of tax. |
| (3) | Deduction made under paragraph (1) shall be referred to “s "tax credit for casualty loss." |
| (4) | Any person who intends to be granted a tax credit for casualty loss may file an application with the head of a local government having jurisdiction over the place for tax payment, as prescribed by Presidential Decree: Provided, That where the application for a tax credit for casualty loss is filed with the head of a tax office having jurisdiction over the place for tax payment pursuant to Article 58 of the Income Tax Act, it shall be deemed that the application for a tax credit on individual local income tax is also applied. <<Period of Validity of Proviso: Dec. 31, 2016>> |
| (5) | When the head of a local government having jurisdiction over the place for tax payment receives an application under paragraph (4), he/she shall determine the amount of tax to be deducted and notify the applicant thereof. |
| (6) | Paragraph (1) shall apply even when no application is made under paragraph (4). |
| (7) | Where disasters occur consecutively, paragraph (1) shall apply according to the asset loss ratio investigated and determined by the head of a local government having jurisdiction over the place for tax payment, as prescribed by Presidential Decree. |
| (8) | Matters necessary for a tax credit for casualty loss shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 97 (Foreign Tax Credit, etc. for Global Income) |
| (1) | Where any foreign source income is included in global income or retirement income of a resident, if he/she has paid or is to pay foreign income tax prescribed by Presidential Decree on such foreign source income in a foreign country, and has deducted it from the amount of tax calculated on global income or retirement income under Article 57 (1) 1 of the Income Tax Act, he/she may be eligible to deduct the equivalent of 10/100 of such deducted amount from the amount of individual local income tax calculated on global income or on retirement income: Provided, That the main sentence hereof shall not apply where the resident has handled the matter pursuant to Article 57 (1) 2 of the Income Tax Act. |
| (2) | Where the equivalent of 10/100 of the foreign income tax paid or payable to a foreign government for the purposes of paragraph (1), exceeds 10/100 of the credit limit under Article 57 (1) 1 of the Income Tax Act, such excess may be carried forward to the taxable period to be completed within five years from the taxable period following the relevant taxable period, and deducted within the credit limit for the taxable period to which it is carried forward. |
| (3) | Where a foreign country has imposed capital gains tax on overseas assets, if the amount of paid tax is deducted against the capital gains pursuant to Article 118-6 (1) 1 of the Income Tax Act, the relevant person shall be eligible to deduct the equivalent of 10/100 of such deducted amount from the amount of individual local income tax calculated on capital gains. |
| (4) | Matters necessary for the tax credit, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 97-2 (Child Tax Credit) |
| (1) | With respect to children eligible for basic deduction, of a resident with global income (including adoptees and foster children), the amount classified as follows shall be deducted from the amount of individual local income tax calculated on global income: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | For one child: 15,000 won a year; |
| 2. | For two children: 30,000 won a year; |
| 3. | For at least three children: An amount calculated by adding 30,000 won a year per child exceeding two persons to 30,000 won a year. |
| (2) | If the number of children eligible for deduction, who are aged six or less, is at least two, 15,000 won a year per child exceeding one person shall be deducted from the amount of individual local income tax calculated on global income. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
| (3) | If any children eligible for deduction, are born or reported as adopted during the relevant taxable period, the amount classified as follows shall be deducted from the amount of individual local income tax calculated on global income: <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
| 1. | If a child born or reported as adopted, is the first child: 30,000 won a year; |
| 2. | If a child born or reported as adopted, is the second child: 50,000 won a year; |
| 3. | If a child born or reported as adopted, is the third child or a child thereafter: 70,000 won a year. |
| (4) | The deductions prescribed in paragraphs (1) through (3) shall be referred to “s "child tax credit." <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12506, Mar. 24, 2014]
| Article 97-3 (Tax Credit for Pension Account) |
| (1) | The equivalent to 12/1,000 of the amount excluding the following amounts from that deposited in a pension account (hereinafter referred to as "amount deposited in a pension account") of a resident or non-resident with global income, shall be deducted from the amount of individual local income tax calculated on global income in the relevant taxable period: Provided, That where the amount deposited in a pension account exceeds four million won a year, such excess shall be written off; and where the amount calculated by adding the amount not exceeding four million won deposited in an annuity savings account and the amount deposited in a retirement pension account, exceeds seven million won a year, such excess shall be written off: <Amended by Act No. 12955, Dec. 31, 2014> |
| 2. | Amount paid by transferring a pension account contract to another pension account contract. |
| (2) | The deduction prescribed in paragraph (1) shall be referred to “s "tax credit for pension account." |
| (3) | Deleted. <by Act No. 12955, Dec. 31, 2014> |
| (4) | Matters necessary for the procedures, etc. for application for a tax credit for pension accounts, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12506, Mar. 24, 2014]
| Article 97-4 (Special Tax Deduction) |
| (1) | Where any resident with wage and salary income (excluding a daily employed worker; hereafter in this Article, the same shall apply), pays the following insurance premiums in the relevant taxable period for an insurance contract under which the insurance premiums to be refunded at maturity do not exceed the premiums paid, the equivalent of 12/1,000 (or 15/1,000 in cases falling under subparagraph 1) of such amount shall be deducted from the amount of individual local income tax calculated on global income in the relevant taxable period: Provided, That where the total of each of the following relevant premiums, exceeds one million won a year, respectively, such excess shall be written off, as relevant: <Amended on Dec. 27, 2016> |
| 1. | Premiums of a guaranty insurance exclusively for persons with disabilities prescribed by Presidential Decree, as an insurance exclusively for persons with disabilities, the insured or a beneficiary thereby is a person with a disability entitled to a basic deduction; |
| 2. | Premiums prescribed by Presidential Decree (excluding premiums of a guaranty insurance exclusively for persons with disabilities prescribed in subparagraph 1), the insured thereby are the persons entitled to a basic deduction. |
| (2) | Where a resident with wage and salary income pays medical expenses prescribed by Presidential Decree, for persons entitled to a basic deduction (exempt from age and income limits) in the relevant taxable period, the equivalent of 15/1,000 of the following amounts shall be deducted from the amount of individual local income tax calculated on global income in the relevant taxable period: <Amended on Dec. 31, 2014> |
| 1. | The excess of the amount calculated by multiplying the total pay by 3/100, as medical expenses (excluding medical expenses prescribed in subparagraph 2) paid for persons entitled to a basic deduction: Provided, That where such amount exceeds seven million won a year, it shall be seven million won a year; |
| 2. | Medical expenses and subfertility treatment expenses prescribed by Presidential Decree paid for the relevant resident, a person who is at least 65 years old as at the end of the taxable period, or a person with a disability: Provided, That where medical expenses prescribed in subparagraph 1, are less than the amount calculated by multiplying the total pay by 3/100, such shortfall shall be deducted. |
| (3) | Where a resident with wage and salary income has paid educational expenses prescribed by Presidential Decree, for such resident and a person entitled to a basic deduction (exempt from age limit, but applicable only to a person less than 18 years old as at the end of the taxable period, in cases of institutions prescribed in subparagraph 3 (b)) in the relevant taxable period, the equivalent of 15/1,000 of the following amounts shall be deducted from the amount of individual local income tax calculated on global income in the relevant taxable period: Provided, That no educational expenses prescribed by Presidential Decree as those entitled to exemption of income tax or gift tax, shall be deducted: <Amended on Dec. 31, 2014; Dec. 27, 2016; Aug. 17, 2021> |
| 1. | The total of the following educational expenses paid for a spouse, lineal descendent, brother and sister, adoptee, and foster child entitled to a basic deduction: Provided, That educational expenses paid to a graduate school or paid with a student loan referred to in subparagraph 2 (d) shall be excluded; and the limit shall be nine million won a year per person in cases of university students and three million won a year per person in cases of preschool children and elementary school, secondary school, and high school students: |
| (b) | Educational expenses paid to any of the following life-long educational institutions or courses: |
| (iii) | An educational course prescribed by Presidential Decree (hereafter in this paragraph, referred to “s "academic degree course") among distance lifelong educational establishments prescribed in Article 33 of the Lifelong Education Act (hereinafter referred to as "distance college"); |
| (c) | Educational expenses paid to overseas educational institutions prescribed by Presidential Decree (only applicable to students prescribed by Presidential Decree, where a resident who pays educational expenses for students enrolled in an overseas educational institution works in the Republic of Korea); |
| (d) | Educational expenses paid to childcare centers prescribed in the Infant Care Act, private teaching institutes prescribed in the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons, or sports facilities prescribed by Presidential Decree for preschool children (only applicable to the amount prescribed by Presidential Decree, in cases of expenses paid to private teaching institutes or sports facilities); |
| 2. | The total of the following educational expenses paid for the relevant resident: |
| (a) | Educational expenses falling under subparagraph 1 (a) through (c); |
| (b) | Educational expenses paid for courses of study equivalent to at least one semester at a university (including a major college, distance college, and academic degree course) or a graduate school, and for an hour-based program prescribed in Article 36 of the Higher Education Act; |
| (d) | The amount of principal and interest redeemed of a student loan prescribed by Presidential Decree (excluding an amount additionally paid due to redemption in arrears); |
| 3. | Expenses for special education prescribed by Presidential Decree paid to any of the following persons, for persons with disabilities (exempt from the income limit) entitled to a basic deduction: |
| (a) | Social welfare facilities and non-profit corporations prescribed by Presidential Decree; |
| (b) | Institutions prescribed by Presidential Decree that provide development and rehabilitation services for the functional improvement and behavioral development of persons with disabilitI; |
| (c) | Overseas facilities or corporations, similar to those prescribed in item (a). |
| (4) | Where any donation [including donations made by those falling under Article 50 (1) 2 and 3 (exempt from age limit) of the Income Tax Act (excluding those to whom the basic deduction of another resident is applied)] is made by a resident (excluding persons only with business income, but including persons prescribed by Presidential Decree, such as those falling under Article 73 (1) 4 of the Income Tax Act) in the relevant taxable period, the equivalent (hereafter in this Article, ref“rred to as "tax credit ”or donation") of 15/1,000 (where the relevant amount exceeds 20 million won, 30/1,000 of the excess) of the amount calculated by deducting the amount of donation included in the necessary expenses when calculating the amount of business income from the aggregate of the following donations, shall be deducted from the amount of individual local income tax calculated on global income accumulatively imposed for the relevant taxable period (where any donation is included in the necessary expenses, excluding the amount of tax calculated on business income). In such cases, if the donations prescribed in subparagraphs 1 and 2 both are made, the donation prescribed in subparagraph 1 shall be deducted first; and where donations made as at December 31, 2013 are to be deducted from income by carrying forward to the taxable period that commences as of January 1, 2014, they shall be deducted prior to the deduction of the donations made in the relevant taxable period: <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| 2. | Designated donation: In such cases, the maximum designated donation shall be classified as follows: |
| (a) | Where any donations are made to religious organizations: |
Maximum = [Referring to an amount calculated by deducting the amount of donation referred to in subparagraph 1 from the global income (excluding interest income and dividend income subject to withholding tax rates under Article 62 of the Income Tax Act); hereafter in this paragraph, referred to as "amount of income"] x 10/100 + (The lesser of 20/100 of the amount of income, and the amount paid to organizations other than religious organizations); | (b) | In cases other than those prescribed in item (a): |
Maximum = 30/100 of the amount of income.
| (5) | For the purposes of paragraphs (1) through (3), if any amount is already paid for a former spouse, a dependant, a person with a disability, or a person who is at least 65 years old as at the end of the taxable period, who ceases to be entitled to a basic deduction due to marriage, divorce, separation, employment, etc., before the end of the taxable period, the amount calculated by applying the rate prescribed in paragraphs (1) through (3), to the amount paid until the date the relevant ground arises, shall be deducted from the amount of individual local income tax calculated on global income in the relevant taxable period. |
| (6) | Deductions made under paragraphs (1) through (4) shall apply where the relevant resident files an application therefor, as prescribed by Presidential Decree. |
| (7) | Deleted. <Dec. 31, 2014> |
| (8) | Deleted. <Dec. 31, 2014> |
| (9) | For a person who fails to apply for income deduction or tax credit pursuant to paragraph (6) hereof, Article 52 (8) of the Income Tax Act, or Article 95-2 (2) of the Act on Restriction on Special Cases concerning Taxation as a resident with wage and salary income, 13,000 won a year shall be deducted; a business operator who, meeting the requirements prescribed by Presidential Decree, such as reporting a business account prescribed in Article 160-5 (3) of the Income Tax Act (hereinafter referred to as "compliant business operator"), fails to apply for a tax credit under Article 122-3 of the Restriction of Special Taxation Act, 12,“00 won a year shall be deducted; and for a person who has global income (excluding a compliant business operator) as a resident with no wage and salary income, 7,000 won a year shall be deducted (hereinafter referred to as "standard deduction"), from the amount of individual local income tax calculated on global income, respectively. <Amended on Dec. 31, 2014; Dec. 27, 2016> |
| (10) | Deductions made under paragraphs (1) through (6) and (9) shall be construed as "special tax deduction." <Amended on Dec. 31, 2014> |
| (11) | Other matters necessary for special tax deduction shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Mar. 24, 2014]
| Article 98 (Tax Reduction or Exemption for Pay) |
| (1) | When any of the following income is included in global income, the equivalent of the amount calculated by multiplying the amount of individual local income tax calculated on global income, by the ratio of the relevant wage and salary income or the relevant business income to the amount of global income, shall be reduced or exempted: |
| 1. | Pay received by a foreigner dispatched to the Republic of Korea under an agreement between the governments from the governments of both parties or the government of one party; |
| 2. | Income received by a resident non-Korean national from an overseas ship or airplane navigation business prescribed by Presidential Decree: Provided, That this shall only apply where the same exemption applies to ships or airplanes that a Korean national operates in the country of nationality of such resident, etc. |
| (2) | Even where individual local income tax is reduced or exempted pursuant to any other statute, except as otherwise expressly provided for in such statute, the individual local income tax calculated by applying paragraph (1) mutatis mutandis, shall be reduced or exempted. |
| (3) | Matters necessary for applying for tax reduction or exemption, etc. under paragraph (1), shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 12506, Mar. 24, 2014> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 2 Special Provisions on Small or Medium Enterprises
| Article 99 (Tax Credit for Investment by Small or Medium Enterprises) |
| (1) | Where a national operating a small or medium enterprise prescribed by Presidential Decree (hereinafter referred to as "small or medium enterprise") or a middle-standing enterprise prescribed by Presidential Decree, newly listed on the securities market under the Financial Investment Services and Capital Markets Act (hereafter in this Article, referred to as "securities market") for the first time (hereafter in this Article, referred to as "newly listed middle-standing” enterprise") between January 1, 2015 and December 31, 2015, makes investment in any of the following assets (excluding any investment in used items or through lease prescribed by Presidential Decree) as at December 31, 2018 (in cases of a small or medium enterprise newly listed on the securities market for the first time (hereafter in this Article, referred to as "newly listed small or medium enterprise") and a newly listed middle-standing enterprise, in the taxable year in which the date of listing falls and until the taxable year that ends within three years from the date the following taxable year commences), the equivalent of 3/1,000 (or 4/1,000 in cases of a newly listed small or medium enterprise and a newly listed middle-standing enterprise) of the relevant investment, shall be deducted from the individual local income tax [limited to individual local income tax on business income (excluding income accrued from real estate leasing business under Article 45 (2) of the Income Tax Act; hereinafter the same shall apply except for Articles 166 and 172)] for the taxable year in which such investment is completed: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Business assets prescribed Presidential Decree including machinery and equipment (hereinafter referred to as "business assets"); |
| 2. | Facilities for the point-of-sale data management system under the Distribution Industry Development Act (hereinafter referred to as "facilities for the point-of-sale data management system"); |
| (2) | Where any investment under paragraph (1) is made over at least two taxable years, paragraph (1) may apply to the amount invested in each relevant taxable year in which such investment is made. |
| (3) | Matters necessary for calculating amounts invested under paragraph (2), shall be prescribed by Presidential Decree. |
| (4) | A national who seeks application of paragraphs (1) and (2) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 100 (Tax Reduction or Exemption for Small or Medium Start-up Enterprises) |
| (1) | A small or medium enterprise established in an area outside the overconcentration control district of the Seoul Metropolitan area (hereinafter referred to as "small or medium start-up enterprise") and a national designated as an operator of business incubator under Article 53 (1) of the Support for Small and Medium Enterprise Establishment Act, as at December 31, 2018, shall be granted a reduction of an amount of tax equivalent to 50/100 of individual local income tax on income generated from the relevant business in the taxable year in which the first income accrues from relevant business (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the relevant business commences, the taxable year falling on the fifth anniversary) and also within the four subsequent taxable years from the beginning of the subsequent taxable year. <Amended on Dec. 27, 2016; Dec. 28, 2021> |
| (2) | Enterprises prescribed by Presidential Decree among venture businesses defined in Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses (hereinafter referred to as "venture business"), certified as a venture business by no later than December 31, 2018, under Article 25 of the same Act within three years from establishment (hereinafter referred to as "small or medium start-up venture businesses"), shall be granted a reduction of an amount of tax equivalent to 50/100 of individual local income tax on income generated from the relevant business in the taxable year in which the first income accrues after such certification (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date it is certified as a venture business, the taxable year falling on the fifth anniversary) and also within the four subsequent taxable years from the beginning of the subsequent taxable year: Provided, That cases to which paragraph (1) applies shall be excluded, and where any of the following grounds exists during the period of reduction, reduction shall not be applicable from the tIxI year in which the date classified as follows, falls: <Amended on Dec. 27, 2016> |
| 1. | Where the verification of a venture business is revoked: Date of revocation; |
| (4) | Small or medium enterprises, for which the taxable year in which the date of incorporation falls and subsequent three taxable years, have not passed, falling under new energy technology small or medium enterprises prescribed by Presidential Decree (hereinafter referred to as "new energy technology small or medium enterprises") as at December 31, 2015, shall be granted a reduction of an amount of tax equivalent to 50/100 of individual local income tax on income generated from the relevant business in the taxable year in which the first income accrues after falling under new energy technology small or medium enterprises (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date of falling under new energy technology small or medium enterprises, the taxable year falling on the fifth anniversary) and also within the four subsequent taxable years from the beginning of the subsequent taxable year: Provided, That cases to which paragraphs (1) and (2) are applicable shall be excluded herefrom, and where such enterprises cease to fall under the new energy technology small or medium enterprises during the period of reduction, such enterprises shall not be granted a tax reduction from the taxable year in which such enterprises cease to fall under the new energy technology small or medium enterprises. |
| (5) | For the purposes of paragraph (4), methods for calculating income generated from the relevant business, shall be prescribed by Presidential Decree. |
| (6) | For the purposes of paragraphs (1) through (5), none of the following cases shall be deemed a new business startup: Provided, That subparagraph 3 shall not apply where a resurgent small or medium entrepreneur referred to in Article 99-6 (1) of the Act on Restriction on Special Cases concerning Taxation starts a new business, or obtains designation or verification under this Article by no later than December 31, 2018: <Amended on Dec. 27, 2016> |
| 1. | Where a previous business is succeeded to by a merger, division, investment in kind, or acquisition of business or where a business of the same type is conducted through an acquisition or purchase of the assets used in the previous business: Provided, That where the assets used for the previous business are acquired or purchased to operate the same type of business and the ratio of the total value of the relevant assets to the total value of business assets prescribed by Presidential Decree, including land, buildings, and machinery, is less than 50/100 and falls short of the ratio determined by Presidential Decree, such cases shall be excluded; |
| 2. | Where a new corporation is incorporated by converting a business operated by a resident into a corporation; |
| 3. | Where a business of the same type as the one before its closure is conducted by re-starting a business after its closure; |
| 4. | Where it is difficult to deem that a new business has been started, as it involves expanding the existing business or adding another business line, etc. |
| (7) | Where an enterprise to which reduction or exemption is granted pursuant to paragraph (1), (2), or (4), ceases to fall under a small or medium enterprise on the grounds prescribed by Presidential Decree, such as merging with an enterprise which is not a small or medium enterprise under the Framework Act on Small and Medium Enterprises, no reduction or exemption shall be granted from the taxable year in which the relevant grounds arise. <Amended on Dec. 27, 2016> |
| (8) | A national who seeks application of paragraphs (1), (2), and (4) and a resurgent small or medium entrepreneur who seeks application of the proviso to paragraph (6), shall apply for tax reduction or exemption, as prescribed by Presidential Decree. <Amended on Dec. 27, 2016> |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 101 (Special Tax Reduction or Exemption for Small or Medium Enterprises) |
| (1) | Any small or medium enterprise engaging in a type of business eligible for reduction or exemption under the following subparagraph 1, shall be allowed the reduction or exemption of the equivalent of the amount of tax calculated by multiplying the reduction or exemption ratio specified in subparagraph 2 by individual local income tax on income accrued from the relevant place of business until the taxable year ending as at December 31, 2017: <Amended on Dec. 27, 2016; Dec. 11, 2018; Apr. 20, 2021; Aug. 17, 2021> |
| 1. | Types of business subject to tax reduction or exemption: |
| (a) | Crop-cultivating business; |
| (e) | Manufacturing business; |
| (f) | Sewage and waste disposal (including recycling), raw material recycling, and environmental restoration business; |
| (g) | Construction business; |
| (h) | Wholesale and retail business; |
| (i) | Passenger transport business; |
| (k) | Movie, video, and broadcasting program production business; movie, video, and broadcasting program production-related service business; movie, video, and broadcasting program distribution business; audio publishing and original recording business; |
| (l) | Broadcasting business; |
| (m) | Telecommunications business; |
| (n) | Computer programming, system integration and management business; |
| (o) | Information service business; |
| (p) | Research and development business; |
| (q) | Advertising business; |
| (r) | Other scientific technology service business; |
| (s) | Packaging and charging business; |
| (t) | Specialized design business; |
| (u) | Creation and art-related service business (excluding individual artists); |
| (v) | Entrusted manufacturing business by OEM method prescribed by Presidential Decree; |
| (w) | Engineering business; |
| (z) | Business operating a motor vehicle maintenance factory prescribed by Presidential Decree; |
| (zb) | Business operating a medical institution under the Medical Service Act (excluding clinics, dental clinics, and herb clinics; hereafter in this Article, referred to as "medical service business"); |
| (zc) | Tourist business under the Tourism Promotion Act (excluding casinos, tourist amusement restaurants, and amusement restaurants for exclusive use by foreigners); |
| (zd) | Business operating welfare facilities for elderly persons under the Welfare of Older Persons Act; |
| (zf) | Human resource supply and placement business (including business supplying agricultural laborers); |
| (zg) | Call center and telemarketing service business; |
| (zj) | Business cleaning buildings and industrial facilities; |
| (zk) | Security and escort business; |
| (zl) | Market research and public opinion-polling business; |
| (zm) | Social welfare service business; |
| (zo) | Industries defined in subparagraph 1 (b) of Article 2of the Research Industry Promotion Act; |
| (zp) | Individual care worker and other similar service business, social educational facility, staff-training center, and other technical and vocational training institute, and library, historic site, and other similar leisure-related service business (excluding business operating reading rooms); |
| (zr) | New and renewable energy power generation business under the Act on the Promotion of the Development, Use and Diffusion of New and Renewable Energy; |
| (zs) | Security system service; |
| 2. | Tax reduction or exemption ratio: |
| (a) | A place of business where a small enterprise prescribed by Presidential Decree (hereafter in this Article, referred to as "small enterprise") operates wholesale business, retail business, or medical service business (hereafter in this Article, referred to as "wholesale business, etc."): 10/100; |
| (b) | A place of business where a small enterprise operates, with the exception of wholesale business, etc., the type of business subject to tax reduction or exemption referred to in subparagraph 1, in the Seoul Meopolitan area: 20/100; |
| (c) | A place of business where a small enterprise operates, with the exception of wholesale business, etc., the type of business subject to tax reduction or exemption referred to in subparagraph 1, in an area other than the Seoul Metropolitan area: 30/100; |
| (d) | A place of business where a medium enterprise, other than small enterprises, (hereafter in this Article, referred to as "medium enterprise"), operates wholesale business, etc., in an area other than the Seoul Metropolitan area: 5/100; |
| (e) | A place of business where a medium enterprise operates knowledge-based business prescribed by Presidential Decree in the Seoul Metropolitan area: 10/100; |
| (f) | A place of business where a medium enterprise operates, with the exception of wholesale business, etc., the type of business subject to tax reduction or exemption referred to in subparagraph 1, in an area other than the Seoul Metropolitan area: 15/100. |
| (3) | A national who seeks application of paragraph (1) or (2) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. <Amended on Dec. 27, 2016> |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 101-2 (Tax Credit for Amount Paid in Mutually-Beneficial Settlement) |
| (1) | Where a national operating a small or medium enterprise has ever paid a purchase price (referring to a purchase price under Article 7-2 (3) 1 of the Restriction of Special Taxation Act; hereafter in this Article, the same shall apply) through a mutually-beneficial settlement system prescribed by Presidential Decree (hereafter in this Article, referred to as "mutually-beneficial settlement system") among purchase prices paid to small or medium enterprises as at December 31, 2022, and fulfills each of the following requirements, the amount calculated pursuant to paragraph (2) shall be deducted from individual local income tax (limited to income tax on business income): Provided, That where the amount to be deducted exceeds 10/100 of individual local income tax for the relevant taxable year, the maximum deduction shall be 10/100 thereof: <Amended on Dec. 29, 2020> |
| 1. | The ratio of the amount of semi-cash settlement prescribed by Presidential Decree out of the purchase prices paid in the relevant taxable year, shall not have decreased as compared with the immediately preceding taxable year; |
| 2. | The amount of promissory notes paid for purchase prices in the relevant taxable year, shall not have increased as compared with the immediately preceding taxable year. |
| (2) | The amount to be deducted pursuant to paragraph (1) shall be the aggregate of the amounts referred to in subparagraphs 1 and 2: |
| 1. | Amounts, the payment deadlines of which fall within 15 days from the dates of preparation of tax invoices, etc. (referring to tax invoices, etc. under Article 7-2 (1) 2 of the Restriction of Special Taxation Act; hereafter in this Article, the same shall apply) among the amounts paid through the mutually-beneficial settlement system x 2/10,000; |
| 2. | Amounts, the payment deadlines of which fall on a date exceeding 15 days but not exceeding 60 days from the date of preparation of tax invoices, etc. among the amounts paid through the mutually-beneficial settlement system x 1/10,000. |
| (3) | A national who seeks application of paragraph (1) or (2) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 27, 2016]
SECTION 3 Special Provisions on Research and Human Resources Development
| Article 102 (Tax Credit for Research and Human Resources Development Expenses) |
| (1) | Where research and human resources development expenses are incurred by a national in each taxable year, 10/100 of an amount calculated by adding the following amounts, shall be deducted from individual local income tax (limited to individual local income tax on business income) for the relevant taxable year. In such cases, subparagraph 1 shall apply only to research and human resources development expenses incurred as at December 31, 2018: <Amended by Act No. 12506, Mar. 24, 2014; Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| 1. | As for research and development expenses in the field of new growth or for obtaining original technology prescribed by Presidential Decree (hereafter in this Article, referred to as "research and development expenses for new growth and original technology") among research and human resources development expenses, an amount calculated by multiplying research and development expenses for new growth and original technology incurred in the relevant taxable year, by the rates classified as follows: |
| (a) | In cases of small or medium enterprises: 30/100; |
| (b) | In cases other than small or medium enterprises: The rate calculated by the following formula (30/100 shall be the limit): |
20/100 + (the ratio of research and development expenses for new growth and original technology to the revenue of the relevant taxable year x a specific multiple prescribed by Presidential Decree);
| 2. | Deleted; <by Act No. 14477, Dec. 27, 2016> |
| 3. | In cases of research and human resources development expenses of a national not falling under subparagraph 1, or not selecting subparagraph 1 (hereafter in this Article, referred to as "general research and human resources development expenses"), the equivalent of any of the following items that he/she selects: Provided, That an amount falling under item (b) where general research and human resources developments expenses are not incurred within the four years preceding the date the relevant taxable year commences or where general research and human resources developments expenses incurred in the immediately preceding taxable year, are less than the average annual amount of general research and human resources development expenses incurred for four years preceding the date the relevant taxable year commences: |
| (a) | Where general research and human resources development expenses incurred in the relevant taxable year, exceed general research and human resources development expenses incurred in the immediately preceding taxable year, the equivalent of 40/100 of such excess (or 50/100 in cases of small or medium enterprises); |
| (b) | An amount calculated by multiplying general research and human resources development expenses incurred in the relevant taxable year, by the rate classified as follows: |
| (i) | In cases of small or medium enterprises: 25/100; |
| (ii) | Where a small or medium enterprise first ceases to fall under a small or medium enterprise, as prescribed by Presidential Decree: Rates classified as follows: |
| a. | From the date the taxable year during which it first ceases to fall under a small or medium enterprise, until the taxable year which ends within three years thereafter: 15/100; |
| b. | Until the taxable year that ends within two years since the period referred to in a.: 10/100; |
| (iii) | Where a middle-standing enterprise prescribed by Presidential Decree (hereinafter referred to as "middle-standing enterprise") does not fall under (ⅱ): 8/100; |
| (iv) | Cases not falling under any of (i) through (iii): The rate calculated by the following arithmetic formula (3/100 shall be the limit): |
2/100 + percentage of general research and human resources development expenses to revenues in the relevant taxable year x 1/2.
| (2) | The classification and calculation of the annual average of general research and human resources development expenses incurred during four preceding years under paragraph (1) 3, and other necessary matters, shall be prescribed by Presidential Decree. |
| (3) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
| (4) | A national who seeks application of paragraph (1) 1 shall keep separate accounts of general research and human resources development expenses; research and development expenses for new growth and original technology, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 103 (Tax Credit for Investment in Facilities for Research and Human Resources Development) |
| (1) | Where a national makes investment in facilities for research and human resources development (excluding any investment in used facilities and through leases prescribed by Presidential Decree) by no later than December 31, 2018, the equivalent of 1/1,000 (or 3/1,000 in cases of a middle-standing enterprise prescribed by Presidential Decree, and 6/1,000 in cases of a small or medium enterprise) of such amount invested, shall be allowed to be deducted from his/her individual local income tax (limited to individual local income tax on business income) for the taxable year in which such investment is completed. <Amended by Ac“ No. 14477, Dec. 27, 2016> |
| (2) | "Facilities for research and human resources development" in paragraph (1), means any of the following: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Facilities for research and experimenting prescribed by Presidential Decree; |
| 2. | Facilities for vocational training prescribed by Presidential Decree; |
| 3. | Deleted. <by Act No. 14477, Dec. 27, 2016> |
| (3) | Where the investment under paragraph (1) is made over at least two taxable years, paragraph (1) may apply to each amount invested for each taxable year in which such investment is made. |
| (4) | Matters necessary for calculating the amount invested under paragraph (3) shall be prescribed by Presidential Decree. |
| (5) | A national who seeks application of paragraph (1) or (3) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 104 (Special Taxation for Income from Technology Transfer, etc.) |
| (1) | As for any income accrued by a small or medium enterprise or a middle-standing enterprise prescribed by Presidential Decree from the transfer (excluding transfer to a related party prescribed by Presidential Decree) of a patent right, utility model, confidential know-how, or technology prescribed by Presidential Decree (hereafter in this Article, referred to as "patent right, etc.") researched and developed autonomously by itself, to a national by no later than December 31, 2018, an amount of tax equivalent to 50/100 of the individual local income tax on the relevant income, shall be reduced. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Where a national obtains patent rights, etc. by no later than December 31, 2018, from a national who has autonomously researched and developed patent rights, etc. (excluding where such patent right, etc. is obtained from a related party prescribed by Presidential Decree), an amount calculated by multiplying the acquisition cost by a rate classified as follows, shall be deducted from individual local income tax (limited to individual local income tax on business income) for the relevant taxable year. In such cases, the deductible amount shall not exceed 10/100 of the individual local income tax for the relevant taxable year: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Where a small or medium enterprise obtains patent rights, etc.: 10/100; |
| 2. | Where a national other than a small or medium enterprise, obtains patent rights, etc.: 5/100 (limited to where he/she obtains patent rights, etc. from a small or medium enterprise). |
| (3) | Individual local income tax shall be reduced by 25/100 on income accrued by a small or medium enterprise from lending patent rights, etc. until December 31, 2018 (excluding where they are lent to a related party prescribed by Presidential Decree). <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
| (4) | A national who seeks application of paragraphs (1) through (3) shall apply for tax reduction or exemption or for a tax credit, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 105 (Reduction or Exemption of Individual Local Income Tax, etc. for High-Tech Enterprises, etc. Moving to Special Research and Development Zones) |
| (1) | Where any of the following enterprises located in a special research and development zone defined in subparagraph 1 of Article 2 of the Special Act on Promotion of Special Research and Development Zones, engages in business prescribed by Presidential Decree, such as in the biotech industry or information and communications industry (hereafter in this Article, referred to as "business entitled to reduction or exemption") at the place of business located in the relevant zone (hereafter in this Article, referred to as "place of business entitled to reduction or exemption"), the individual local income tax shall be reduced or exempted, as prescribed in paragraphs (2) through (6): <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | With respect to income generated from business entitled to reduction or exemption, operated by an enterprise which meets the requirements referred to in paragraph (1), the equivalent of 100/100 of the individual local income tax for the taxable year ending within three years after the beginning of the taxable year in which the first income accrues from the said business (if no income accrues from the said business until the taxable year falling on the fifth anniversary from the date of such designation or registration, the taxable year falling on the fifth anniversary), and the equivalent of 50/100 of the individual local income tax for the taxable year ending within two years thereafter, shall be reduced or exempted, respectively. |
| (3) | Where the total of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) applies, exceeds the aggregate of amounts prescribed in subparagraphs 1 and 2, the amount of tax shall be reduced or exempted by up to the ceiling of such aggregate (hereafter in this Article, referred to as "reduction or exemption ceiling"): Provided, That where the enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business") and the aggregate of the income tax or corporate tax reduced or exempted for income accrued from the relevant service business during the period of reduction or exemption to which paragraph (2) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | The number of workers at ordinary times in the relevant taxable year at the place of business entitled to reduction or exemption x one million won; |
| (b) | 2/100 of the cumulative investments under subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | The number of workers at ordinary times in the relevant taxable year at the place of business entitled to reduction or exemption x two million won; |
| (b) | 10/100 of the cumulative investments under subparagraph 1. |
| (4) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted in each taxable year pursuant to paragraph (2), the amount under paragraph (3) 1 shall be applied first and then the amount under paragraph (3) 2 shall be applied. |
| (5) | Where the number of workers at ordinary times each taxable year at the place of business entitled to a reduction or exemption during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax credit was granted, an enterprise that has its individual local income tax reduced or exempted under paragraph (3) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (3) and (5), the scope of workers at ordinary times, method for calculating the number of workers at ordinary times, and other necessary matters, shall be prescribed by Presidential Decree. |
| (7) | Any person who seeks application of paragraph (2) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
| (8) | Where the reduction or exemption ceiling applies pursuant to the proviso to paragraph (3), the relevant enterprise shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 106 (Reduction or Exemption of Individual Local Income Tax for Foreign Engineers) |
| (1) | A foreign engineer prescribed by Presidential Decree shall be granted a tax reduction equivalent to 50/100 of the individual local income tax on the earned income derived from the services provided to a national within Korea, received until the month falling on the second anniversary from the date (applicable only to the period until December 31, 2018) such foreign engineer began providing his/her services in Korea, falls. <Amended by Act No. 12955, Dec. 31, 2014> |
| (2) | Deleted. <by Act No. 12955, Dec. 31, 2014> |
| (3) | Any person who seeks application of paragraph (1) shall apply for reduction or exemption, as prescribed by Presidential Decree. <Amended by Act No. 12955, Dec. 31, 2014> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 106-2 (Special Taxation for Foreign Workers) |
[This Article Newly Inserted by Act No. 12506, Mar. 24, 2014]
SECTION 4 Special Provisions on International Capital Transactions
| Article 107 (Special Taxation for Introduction of Public Loans) |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 108 (Exemption from Individual Local Income Tax on Interest Income, etc. from International Financial Transactions) |
| (1) | A person who is paid any of the following income (excluding residents' domestic business places), shall be exempted from individual local income tax: <Amended by Act No. 12955, Dec. 31, 2014> |
| 1. | Interest and commission on the foreign currency bonds issued overseas by the State, a local government, or a domestic corporation; |
| 2. | Interest and commission paid on the foreign currency receivables recoverable in foreign currency, which a foreign exchange business handling institution under the Foreign Exchange Transactions Act, borrows from a foreign financial institution to conduct the foreign exchange business as prescribed by the same Act; |
| 3. | Interest and commission paid on the foreign currency bills or foreign currency deposit certificates issued or sold overseas by finance companies, etc. prescribed by Presidential Decree, as prescribed by the Foreign Exchange Transactions Act. |
| (2) | Any income accrued from an overseas transfer by a non-resident of the securities prescribed by Presidential Decree, issued by the State, a local government, or a domestic corporation, shall be exempted from individual local income tax. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 5 Special Provisions on Investment Promotion
| Article 109 (Tax Credit for Investing, etc. in Facilities for Increasing Productivity) |
| (1) | Where a national invests in any of the following facilities (excluding investing in used facilities and through leases prescribed by Presidential Decree) by no later than December 31, 2017, to increase productivity, the equivalent of 3/1,000 of such amount invested (or 5/1,000 in cases of a middle-standing enterprise prescribed by Presidential Decree; and 7/1,000 in cases of a small or medium enterprise), shall be deducted from his/her individual local income tax (limited to individual local income tax on business income): <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Facilities for improving and automating processes, prescribed by Presidential Decree; |
| 2. | High-technology equipment prescribed by Presidential Decree; |
| 3. | Computers and peripherals, software, telecommunications facilities, and other tangible and intangible facilities, used to manage the supply chain, including material procurement, production planning, and inventory management, in electronic format, with the depreciation period of at least two years (hereinafter referred to as "facilities for supply chain management system"); |
| 4. | Computers and peripherals, software, telecommunications facilities, and other tangible and intangible facilities, used to manage customer relationship, including integrating and analyzing data on customers and marketing, in electronic format, with the depreciation period of at least two years (hereinafter referred to as "facilities for customer relationship management system"); |
| 5. | Computers and peripherals, software, telecommunications facilities, and other tangible and intangible facilities, used to strategically and efficiently manage logistics processes, including purchasing, management of orders, transportation, production, warehouse management, inventory management, and distribution network, with the depreciation period of at least two years; |
| 6. | Systems prescribed by Presidential Decree, such as knowledge management systems to systematize and share knowledge possessed by the executives or employees hired by nationals. |
| (2) | Where any small or medium enterprises use, via the Internet, facilities falling under paragraph (1) 3 and 4, owned by another person by no later than December 31, 2017, to increase its productivity, the equivalent of 7/1,000 of their usage fees shall be deducted from its individual local income tax (limited to individual local income tax on business income). <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | Article 103 (1), (3), and (4) shall apply mutatis mutandis to the methods for granting a tax credit under paragraph (1) or (2). |
| (4) | A national who seeks application of paragraphs (1) and (2) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 110 (Tax Credit for Investing in Safety Facilities) |
| (1) | Where a national invests, by no later than December 31, 2017, in facilities prescribed by Presidential Decree (excluding investing in used facilities and through leases prescribed by Presidential Decree) as deemed necessary for the purposes of industrial policies and safety policies, falling under any of the following facilities (in cases falling under subparagraph 1, including items; hereafter in this Article, the same shall apply), the equivalent of 3/1,000 [or 5/1,000 in cases of a middle-standing enterprise prescribed by Presidential Decree; and 7/1,000 in cases of a small or medium enterprise (or 10/1,000, where a small or medium enterprise invests in the facilities stipulated in subparagraph 7)] of such amount invested, shall be deducted from the individual local income tax (limited to individual local income tax on business income). In such cases, Article 103 (1), (3), and (4) shall apply mutatis mutandis to the methods for granting a tax credit: <Amended on Dec. 27, 2016; Nov. 30, 2021; Jan. 4, 2022> |
| 1-2. | Fire-fighting systems defined in Article 2 of the Act on Installation and Management of Firefighting Systems (excluding fire-fighting systems to be installed in specific fire-fighting objects pursuant to Article 12 of that Act) and other fire-fighting-related items prescribed by Presidential Decree; |
| 1-3. | Seismic retrofit facilities; |
| 2. | Facilities installed in a trustee company by a truster company under the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises; |
| 3. | Industrial disaster prevention facilities; |
| 4. | Mining safety facilities; |
| 5. | Facilities reinforced or expanded by an individual designated as person under priority management under the Act on Emergency Preparedness, to perform his/her emergency preparedness duties i’ compliance with the Government's order to reinforce and expand such facilities; |
| 7. | Facilities installed to prevent technology from being illegally transferred; |
| 8. | Facilities installed to develop overseas resources. |
| (2) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 111 (Tax Credit for Investing in Energy-Saving Facilities) |
| (1) | Where a national invests (excluding investing made in used facilities and through leases prescribed by Presidential Decree) in energy-saving facilities prescribed by Presidential Decree by no later than December 31, 2019, the equivalent of 1/1,000 (or 3/1,000 in cases of a middle-standing enterprise prescribed by Presidential Decree; and 6/1,000 in cases of a small or medium enterprise) of the relevant amount invested, shall be deducted from the individual local income tax (limited to individual local income tax on business income). <Amended by Act No. 12506, Mar. 24, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | For the purposes of paragraph (1), Article 103 (1), (3), and (4) shall apply mutatis mutandis to the methods for granting a tax credit. |
| (3) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 112 (Tax Credit for Investing in Facilities for Environmental Conservation) |
| (1) | Where a national invests (excluding investing in used facilities and through leases prescribed by Presidential Decree) in any facility for environmental conservation prescribed by Presidential Decree by no later than December 31, 2019, the equivalent of 3/1,000 (or 5/1,000 in cases of a middle-standing enterprise; and 10/1,000 in cases of a small or medium enterprise) of the amount invested, shall be deducted from the individual local income tax (limited to individual local income tax on business income). In such cases, Article 103 (1), (3), and (4) shall apply mutatis mutandis to the methods for granting a tax credit. <Amended by Act No. 12506, Mar. 24, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 113 (Tax Credit for Investing in Facilities to Improve Quality Control of Medical Supplies) |
| (1) | Where a national invests (excluding investing in used facilities and through leases prescribed by Presidential Decree) in facilities to improve the quality control of medical supplies prescribed by Presidential Decree by no later than December 31, 2019, the equivalent of 3/1,000 (or 5/1,000 in cases of a middle-standing enterprise; and 7/1,000 in cases of a small or medium enterprise) of the amount invested, shall be deducted from the individual local income tax (limited to individual local income tax on business income). In such cases, Article 103 (1), (3), and (4) shall apply mutatis mutandis to the methods for granting a tax credit. <Amended by Act No. 12506, Mar. 24, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 113-2 (Tax Credit for Investing in Facilities to Commercialize New Growth Technology) |
| (1) | Where a national invests (excluding investing in used facilities and through leases prescribed by Presidential Decree) in facilities to commercialize new growth technology prescribed by Presidential Decree by no later than December 31, 2018, and fulfills each of the following requirements, the equivalent of 7/1,000 (or 8/1,000 in cases of a middle-standing enterprise prescribed by Presidential Decree; and 10/1,000 in cases of a small or medium enterprise) of the amount invested, shall be deducted from the individual local income tax (limited to individual local income tax on business income): |
| 1. | The ratio of research and human resources development expenses to the income of the taxable year immediately preceding the taxable year in which the relevant investment is commenced, shall be at least 5/100; and research and development expenses, etc. for a new growth and original technology, shall fulfill the requirements prescribed by Presidential Decree; |
| 2. | The number of workers at ordinary times in the relevant taxable year shall not have been decreased from the number of workers at ordinary times in the immediately preceding taxable year: Provided, That a tax credit shall be granted even if the number of workers at ordinary times in the relevant taxable year is decreased as compared with that in the immediately preceding year, but ten million won per decreased number of workers at ordinary times shall be deducted from the amount of tax eligible for deduction (if the relevant amount is a negative number, it shall be deemed nil). |
| (2) | Where the number of workers at ordinary times each taxable year during the period from the end of the taxable year in which a tax deduction was granted until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax deduction was granted, is decreased as compared with the number of workers at ordinary times in the taxable year in which the tax deduction was granted, a person granted the deduction of individual local income tax pursuant to paragraph (1) or Article 174 (4), shall pay the equivalent of the amount of tax deducted as individual local income tax, as prescribed by Presidential Decree. |
| (3) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
| (4) | For the purposes of paragraphs (1) through (3) hereof or Article 174 (4), the methods for determining new growth technology, original technology, etc., the scope and number of workers at ordinary times, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 113-3 (Tax Credit for Production Cost of Video Contents) |
| (1) | Where a national prescribed by Presidential Decree incurs any cost prescribed by Presidential Decree, to produce any of the following broadcasting programs or motion pictures prescribed by Presidential Decree (hereafter in this Article” referred to as "video contents") (hereafter “n this Article, referred to as "production cost of video contents") by no later than the taxable year in which December 31, 2019 falls, among costs incurred in Korea, the equivalent of 7/1,000 (or 10/1,000 in cases of a small or medium enterprise) of the production cost of the relevant video contents, shall be deducted from the individual local income tax (limited to individual local income tax on business income) for the taxable year in which the relevant video contents are first broadcast or shown in a movie theater, as prescribed by Presidential Decree: |
| (2) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
| (3) | For the purposes of paragraph (1), the scope of video contents, methods for calculating production cost, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 114 (Tax Credit for Employment-Creating Investment) |
| (1) | Where a national makes an investment prescribed by Presidential Decree (excluding investing in used goods and through leases prescribed by Presidential Decree, and investing within the overconcentration control district of the Seoul Metropolitan area; hereafter in this Article, the same shall apply) by no later than December 31, 2017; and the number of workers at ordinary times in the relevant taxable year, has not decreased as compared with the number of workers at ordinary times in the immediately preceding taxable year, the aggregate of the amounts calculated according to the following classification, shall be deducted from the individual local income tax (limited to individual local income tax on business income) each taxable year in which the relevant investment is made: Provided, That in cases of a small or medium enterprise, subparagraph 1 shall apply even where the number of workers at ordinary times in the relevant taxable year has decreased as compared with the number of workers at ordinary times in the immediately preceding taxable year. In such cases, the amount of deduction shall be the amount calculated by deducting one million won per number of workers at ordinary times decreased from the amount referred to in subparagraph 1; and if the relevant amount is a negative number, it shall be deemed nil: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Basic amount of deduction: For a small or medium enterprise, the equivalent of 3/1,000 of the relevant amount invested shall be deducted; and for a middle-standing enterprise prescribed by Presidential Decree (hereafter in this Article, referred to as "middle-standing enterprise"), the following relevant amount shall be deducted: |
| (b) | The equivalent of 2/1,000 of the relevant amount invested, where investing in a region outside the Seoul Metropolitan area; |
| 2. | Additional amount of deduction: The equivalent of 3/1,000 (or 4/1,000 in cases of a small or medium enterprise or a middle-standing enterprise) of the relevant amount invested, and the equivalent of 4/1,000 (or 5/1,000 in cases of a small or medium enterprise or a middle-standing enterprise) of the relevant amount invested, where investing in a region outside the Seoul Metropolitan area, but where a national operates a service business prescribed by Presidential Decree, the additional amount of deduction shall be the amount calculated by adding thereto the equivalent of 1/1,000 of the relevant amount invested, respectively: Provided, That where such amount exceeds the amount calculated by subtracting the amount prescribed in item (d) from the aggregate of the amounts prescribed in items (a) through (c) in the order, such excess shall be deemed nonexistent: |
| (a) | Number of graduates from schools prescribed by Presidential Decree which provide vocational education and training, such as high schools operating the aligned curricula directly linked to industry demand as schools provided for in Article 2 of the Elementary and Secondary Education Act among the workers at ordinary times who have first entered into an employment contract in the relevant taxable year (hereinafter referred to as "high schools, etc. aligned to industry demand") x 2 million won (or 2.5 million won in cases of a small or medium enterprise); |
| (b) | Number of youth workers, workers with disabilities, and workers aged at least 60 among the workers at ordinary times excluding those in item (a) who have first entered into an employment contract in the relevant taxable year x 1.5 million won (or 2 million won in cases of small or medium enterprise); |
| (c) | (Number of the workers at ordinary times in the relevant taxable year - number of the workers at ordinary times in the immediately preceding taxable year - number of?graduates referred to in item (a) - number of youth workers, workers with disabilities, and workers aged at least 60 referred to in item (b)) x 1 million won (or 1.5 million one in cases of a small or medium enterprise); |
| (d) | 10/100 of the amount of deduction carried forward in the relevant taxable year under Article 174 (3). |
| (2) | Where the number of workers at ordinary times each taxable year during the period from the end of the taxable year in which a tax deduction was granted until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax deduction was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax deduction was granted, a person granted the deduction of the individual local income tax pursuant to paragraph (1), shall pay the equivalent of the amount of tax deducted as individual local income tax, as prescribed by Presidential Decree. |
| (3) | For the purposes of paragraph (1) or (2) hereof or Article 174 (3), the scope of workers at ordinary times, youth workers, workers with disabilities, and workers aged at least 60; the method for calculating the number of workers at ordinary times, graduates from high schools, etc. aligned to industry demand, youth workers, workers with disabilities, and workers aged at least 60; and other necessary matters, shall be prescribed by Presidential Decree. |
| (4) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 6 Special Provisions on Employment Support
| Article 115 (Tax Deductions for Small or Medium Enterprises having Reinstated Graduates of High Schools, etc. Aligned to Industry Demand after Performing their Military Service) |
| (1) | Where a small or medium enterprise has employed a person prescribed by Presidential Decree, from among graduates of high schools, etc. aligned to industry demand, if such employee is reinstated by no later than December 31, 2017, after performing the military service prescribed by Presidential Decree (applicable only where he is reinstated within one year after completion of the military service), the equivalent of 1/100 of the labor cost prescribed by Presidential Decree and paid to the reinstated person for two years from the date reinstated, shall be deducted from the individual local income tax (applicable only to individual local income tax on business income) for the relevant taxable year. |
| (2) | A small or medium enterprise that seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 115-2 (Tax Credit for Small or Medium Enterprises Re-Employing Career-Interrupted Women) |
| (1) | Where a small or medium enterprise enters into an employment contract with a woman who fulfills each of the following requirements (hereafter in this Article and Article 118 (1) 1, referred to as "career-interrupted woman") for at least one year by not later than December 31, 2017, the equivalent of 1/100 of the personnel expenses prescribed by Presidential Decree, which are paid to the relevant career-interrupted woman until the month falling on the second anniversary from the date of re-employment, shall be deducted from the individual local income tax (applicable only to individual local income tax on business income) for the relevant taxable year: |
| 1. | She shall have served at the relevant small or medium enterprise for at least one year (limited to where the fact is verified that the relevant small or medium enterprise has withheld wage and salary income tax of the career-interrupted woman, as prescribed by Presidential Decree); |
| 2. | She shall have retired from the relevant small or medium enterprise due to pregnancy, childbirth, or infant care prescribed by Presidential Decree; |
| 3. | At least three years, but less than ten years shall have passed from the date she retires from the relevant small or medium enterprise; |
| 4. | She shall not be a largest stockholder or largest investor (in cases of an individual business, referring to the representative) of the relevant small or medium enterprise or a person prescribed by Presidential Decree as related to such person. |
| (2) | A small or medium enterprise that seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 115-3 (Tax Credit for Enterprises which have Increased Wage and Salary Income) |
| (1) | Where a national fulfills each of the following requirements, the equivalent of 5/1,000 (or 1/100 in cases of a small or medium enterprise or a middle-standing enterprise prescribed by Presidential Decree) of the portion of wages increased beyond the mean of portions increased during the immediately preceding three years, shall be deducted from the individual local income tax (applicable only to individual local income tax on business income) for the relevant taxable year, until the taxable year in which December 31, 2017 falls: |
| 1. | The increase rate of average wage of workers at ordinary times prescribed by Presidential Decree (hereafter in this Article, referred to as "workers at ordinary times") in the relevant taxable year, shall be larger than the mean increase rate of average wage in the immediately preceding three taxable years (hereafter in this Article, referred to as "mean increase rate of average wage in the immediately preceding three taxable years"); |
| 2. | The number of workers at ordinary times in the relevant taxable year, shall be at least the number of workers at ordinary times in the immediately preceding taxable year. |
| (2) | The portion of wages increased beyond the mean of portions increased in the immediately preceding three years, referred to in paragraph (1), shall be an amount calculated by the following formula: |
The portion of wages increased beyond the mean of portions increased during the immediately preceding three years = [average wage of workers at ordinary times in the relevant taxable year - average wage of workers at ordinary times in the immediately preceding taxable year x (1 + the mean increase rate of average wage in the immediately preceding three taxable years)] x number of workers at ordinary times in the immediately preceding taxable year.
| (3) | Where a national fulfills each of the following requirements, the equivalent of 5/1,000 (or 1/100 in cases of a middle-standing enterprise prescribed by Presidential Decree; and 2/100 in cases of a small or medium enterprise) of the aggregate of increased wages of workers who have been converted to regular workers and fulfill requirements prescribed by Presidential Decree, such as work period and type of employment, (hereafter “r in this Article, referred to as "workers converted to regular workers"), shall be deducted from the individual local income tax (applicable only to individual local income tax on business income) for the relevant taxable year, until the taxable year in which December 31, 2017 falls: |
| 1. | There shall have been any worker converted to a regular worker during the relevant taxable year; |
| 2. | The number of workers at ordinary times in the relevant taxable year, shall be at least the number of workers at ordinary times in the immediately preceding taxable year. |
| (4) | Where any national granted a deduction of individual local income tax pursuant to paragraph (3), terminates labor relations with a worker converted to a regular worker during the period from the end of the taxable year in which the deduction was granted until the end of the taxable year falling on the first anniversary from the end of the taxable year in which the tax deduction was granted, he/she shall pay an amount calculated as prescribed by Presidential Decree as individual local income tax when he/he files a tax return for the taxable year in which such labor relations terminate. |
| (5) | Notwithstanding paragraph (1), a small or medium enterprise which fulfills each of the following requirements may deduct the equivalent of 10/1,000 of the portion of wage increased beyond the increased portion of the average wage of all small or medium enterprises, in lieu of the amount prescribed in paragraph (1), from individual income tax (applicable only to individual local income tax on business income) until the taxable year in which December 31, 2017 falls: |
| 1. | The increase rate of average wage of workers at ordinary times in the relevant taxable year, shall be larger than the rate prescribed by Presidential Decree, based upon the increase rate of wages of all small or medium enterprises; |
| 2. | The number of workers at ordinary times in the relevant taxable year, shall be at least the number of workers at ordinary times in the immediately preceding taxable year; |
| 3. | The increase rate of the average wage in the immediately preceding taxable year, must not be a negative number. |
| (6) | The portion of wages increased beyond the increased portion of all small or medium enterprises, referred to in paragraph (5), shall be an amount calculated by the following formula: |
The portion of wages increased beyond the increased portion of average wage of all small or medium enterprises = [average wage of workers at ordinary times in the relevant taxable year - average wage of workers at ordinary times in the immediately preceding taxable year x (1 + a rate prescribed by Presidential Decree, based upon the increase rate of wages of all small or medium enterprises)] x number of workers at ordinary times in the immediately preceding taxable year.
| (7) | A national who seeks application of paragraph (1) or (3) shall apply for a tax credit, as prescribed by Presidential Decree. |
| (8) | For the purposes of paragraphs (1) through (4), the scope of wages; methods for calculating the increase rate of average wage and the mean increase rate of average wage in the immediately preceding three taxable years; the aggregate of increased wages of workers converted to regular workers; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 115-4 (Tax Credit for Enterprises which have Increased Employment of Youths) |
| (1) | Where the number of youth regular workers prescribed by Presidential Decree (hereafter in this Article, referred to as "number of youth regular workers") of a national (excluding a national who operates a type of business prescribed by Presidential Decree, such as a consumptive service business) in the relevant taxable year during the period until the taxable year in which December 31, 2017 falls, is increased as compared with the number of youth regular workers in the immediately preceding taxable year, an amount calculated by multiplying the increased number of persons (limited to the smaller of the increased number of regular workers prescribed by Presidential Decree (hereafter in this Article, referred to as "whole regular workers") and the increased number of workers at ordinary times prescribed by Presidential Decree (hereafter in this Article, referred to as "workers at ordinary times"), by 200,000 won (or 500,000 won, in cases of a small or medium enterprise or a middle-standing enterprise prescribed by Presidential Decree), shall be deducted from the individual local income tax (applicable only to individual local income tax on business income) for the relevant taxable year. |
| (2) | Where the number of youth regular workers, the number of whole regular workers, or the number of workers at ordinary times each taxable year during the period from the end of the taxable year in which a tax deduction was granted until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax deduction was granted, has been decreased as compared with the number of such workers of the taxable year in which the tax deduction was granted, a person granted the deduction of the individual local income tax pursuant to paragraph (1), shall pay the equivalent of the amount of tax deducted as individual local income tax, as prescribed by Presidential Decree. |
| (3) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
| (4) | For the purposes of paragraphs (1) and (2), methods for calculating the number of youth regular workers, all regular workers, and workers at ordinary times, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 115-5 (Reduction or Exemption of Individual Local Income Tax on Amount Received from Performance Compensation Fund for Core Personnel of Small or Medium Enterprises) |
| (1) | Where any core personnel of small or medium enterprises defined in subparagraph 6 of Article 2 of the Special Act on Support for Human Resources of Small and Medium Enterprises (excluding persons prescribed by Presidential Decree, such as the largest shareholder, etc. of the relevant enterprise; hereafter in this Article, referred to as "core personnel"), join mutual aid programs of the Performance Compensation Fund for Core Personnel of Small and Medium Enterprises under Article 35-2 of the same Act (hereafter in this Article, referred to as ”the "Performance Compensation Fund") by no later than December 31, 2018; pay mutual aid funds for at least five years; and receive mutual benefit funds from the relevant Performance Compensation Fund, the endowments borne by the relevant small or medium enterprise pursuant to subparagraph 1 of Article 35-3 of the same Act (hereafter in this Article, referred to as "endowments"), shall be subject to the imposition of individual local income tax, construing it as wage and salary income prescribed in Article 20 of the Income Tax Act, but an amount of tax equivalent to 50/100 of individual local income tax shall be reduced. |
| (2) | Of mutual benefit funds, an amount excluding mutual aid funds and endowments paid by core personnel, shall be subject to the imposition of individual local income tax, construing it as interest income prescribed in Article 16 (1) of the Income Tax Act. |
| (3) | Except as otherwise expressly provided for in paragraph (1), methods for calculating reduction or exemption of individual local income tax; procedures for applying reduction or exemption; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 116 (Reduction or Exemption of Individual Local Income Tax for Persons Employed in Small or Medium Enterprises) |
| (1) | Where youths prescribed by Presidential Decree (hereafter in thi” paragraph, referred to as "youths"); persons aged at least 60; or persons with disabilities, are employed by small or medium enterprises prescribed by Presidential Decree (including non-profit corporations) and falling under Article 2 of the Framework Act on Small and Medium Enterprises (hereafter in this Article, referred ”to as "small or medium enterprises") from January 1, 2012 (from January 1, 2014, in cases of persons aged at least 60 or persons with disabilities), through December 31, 2018, the amount of tax equivalent to 70/100 of individual local income tax, shall be reduced or exempted (up to 150,000 won for each taxable period), regarding the income earned from such small or medium enterprises until the month falling on the third anniversary from the date of employment (referring to the second anniversary from the date reinstated, where a youth is reinstated within one year after providing the military service prescribed by Presidential Decree, to a small or medium enterprise for which he/she has provided labor before providing the military service; and referring to the fifth anniversary from the date of initial employment, where a youth is reinstated within three years from the date of initial employment). In such cases, the period for reduction or exemption of individual local income tax shall be calculated from the first date of employment on which individual local income tax is reduced or exempted, regardless of whether a person granted a reduction or exemption of individual local income tax is employed by another small or medium enterprise or re-employed by the relevant small or medium enterprise. <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | Workers who seek application of paragraph (1) shall apply therefor, as prescribed by Presidential Decree. |
| (3) | Where a person liable for special collection becomes aware that a worker who applied for tax reduction or exemption under paragraph (1), has failed to meet the requirements prescribed in paragraph (1), but is unable to specially collect the amount under-collected by applying paragraph (1), due to the retirement of the relevant worker, he/she shall notify the head of the local government having jurisdiction over the place for tax payment of such fact, and the head of the local government having jurisdiction over the place for tax payment shall immediately impose and collect from such worker an amount calculated by multiplying the amount under-collected by applying paragraph (1), by 105/100, as individual local income tax. |
| (4) | Except as otherwise expressly provided for in paragraphs (1) through (3), procedures for applying for the reduction or exemption of individual local income tax; documents to be submitted; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 117 (Tax Credit Subsequent to Conversion to Regular Workers) |
| (1) | Where any small or medium enterprise converts fixed-term workers or part-time workers under the Act on the Protection of Fixed-Term and Part-Time Workers; workers dispatched under the Act on the Protection of Temporary Agency Workers; or fixed-term workers or part-time workers employed by a subcontractor prescribed in the Fair Transactions in Subcontracting Act, who were employed as at June 30, 2016, to workers whose labor contract is indefinite; where the business owner directly employs them under the Act on the Protection of Temporary Agency Workers; or where a principal contractor prescribed in Article 2 (2) 2 of the Fair Transactions in Subcontracting Act, directly employs them by entering into indefinite labor contracts (hereafter in this Article, referred to as "conversion to regular workers") until December 31, 2017, an amount calculated by multiplying the number of workers converted to regular workers by 200,000 won, shall be deducted from individual local income tax (limited to individual local income tax on business income) for the relevant taxable year. <Amended by Act No. 14477, Dec. 27, 2016; Act No. 16413, Apr. 30, 2019> |
| (2) | Where a person granted a deduction of individual local income tax pursuant to paragraph (1), terminates labor relations with the relevant regular workers before one year passes from the date of conversion to regular workers, he/she shall pay an amount calculated by adding the equivalent to interest calculated as prescribed by Presidential Decree to the equivalent to the amount of tax deducted, when filing a tax return for the taxable year in which such labor relations terminate, as individual local income tax. |
| (3) | For the purposes of paragraph (1), matters necessary for applying for a tax credit, etc. shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 118 (Tax Credit of Social Insurance Premiums for Increased Number of Employees in Small or Medium Enterprises) |
| (1) | Where the number of workers at ordinary times in the relevant taxable year of small or medium enterprises surpasses that of the immediately preceding taxable year during the period until the taxable year in which December 31, 2018 falls, the aggregate of the following amounts shall be deducted from individual local income tax (limited to individual local income tax on business income) for the relevant taxable year: <Amended by Act No. 12506, Mar. 24, 2014; Act No. 14477, Dec. 27, 2016> |
| 1. | The equivalent to social insurance premiums paid by a user for the increased number of employees who are youth workers and career-interrupted women (hereafter in this Article, referred to as "youth workers, etc.") at ordinary times: Number of increased employees who are youth workers, etc. at ordinary times prescribed by Presidential Decree x amount prescribed by Presidential Decree to be paid by a user as social insurance premiums for the increased number of employees who are youth workers, etc. at ordinary times x 10/100; |
| 2. | The equivalent to social insurance premiums paid by a user for the increased number of employees who are workers at ordinary times excluding youth workers, etc.: Number of increased employees who are workers at ordinary times prescribed by Presidential Decree excluding youth workers, etc. x amount prescribed by Presidential Decree to be paid by a user as social insurance premiums for the increased number of employees at ordinary times excluding youth workers, etc. at ordinary times x 5/100 (or 75/1,000 in cases of a small or medium enterprise operating a new-growth service business prescribed by Presidential Decree). |
| (2) | Social insurance under paragraph (1) means any of the following: |
| (3) | For the purposes of paragraph (1), matters necessary for applying for a tax credit; the scope of workers at ordinary times and youth workers, etc. at ordinary times; methods for calculating the increased number of employment of youth workers, etc. at ordinary times where a tax credit is applied pursuant to Article 115-2; and other necessary matters, shall be prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 7 Special Provisions on Corporate Restructuring
| Article 119 (Tax Carried Forward, etc. of Individual Local Income Tax on Capital Gains on Consolidation among Small or Medium Enterprises) |
| (1) | Where small or medium enterprises to be extinguished by consolidation among small or medium enterprises engaging in the types of business prescribed by Presidential Decree, transfer fixed assets for business prescribed by Presidential Decree (hereinafter referred to as "fixed assets for business"), to a corporation newly incorporated in the course of consolidation or a corporation surviving such consolidation (hereafter in this Article, referred to as "consolidated corporation"), tax carried forward may be imposed on such fixed assets for business. |
| (2) | The scope of and requirements for consolidation among small or medium enterprises subject to paragraph (1), shall be prescribed by Presidential Decree. |
| (3) | A national who seeks application of paragraph (1) shall apply for tax to be carried forward, as prescribed by Presidential Decree. |
| (4) | Where a national to whom paragraph (1) has been applied, falls under any of the following cases before five years from the date of transfer of fixed assets used for business, he/she shall pay the tax carried forward under paragraph (1) (referring to the amount that excludes tax already paid by a consolidated corporation), as individual local income tax on capital gains, within two months from the last day of the month in which such ground arises. In such cases, matters necessary for the guidelines for judgment of discontinuation of business and others shall be prescribed by Presidential Decree: <Amended by Act No. 12955, Dec. 31, 2014> |
| 1. | Where the consolidated corporation discontinues the business succeeded from a small or medium enterprise to be extinguished; |
| 2. | Where a national to whom paragraph (1) has been applied, disposes of at least 50/100 of the stocks or equity shares of the consolidated corporation acquired by consolidation. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 120 (Tax Carried Forward of Individual Local Income Tax on Capital Gains for Conversion into Corporation) |
| (1) | Where a resident converts his/her business into a corporation (excluding a corporation engaging in a consumptive service business prescribed by Presidential Decree), by investing fixed assets for business as investment in kind; or in accordance with the method of business transfer or acquisition prescribed by Presidential Decree, tax carried forward may apply to such fixed assets for business. |
| (2) | Paragraph (1) shall apply only where the capital of a newly-incorporated corporation exceeds the amount prescribed by Presidential Decree. |
| (3) | Any resident who seeks application of paragraph (1) shall apply for tax to be carried forward, as prescribed by Presidential Decree. |
| (4) | Where a corporation incorporated pursuant to paragraph (1) falls under any of the following cases before five years from the date of its incorporation, a resident to whom paragraph (1) has applied, shall pay the amount of tax carried forward under paragraph (1) (referring to the amount that excludes the amount of tax already paid by the relevant corporation), as individual local income tax on capital gains, within two years from the last day of the month in which such ground arises. In such cases, matters necessary for the guidelines for judgment of discontinuation of business, etc. shall be prescribed by Presidential Decree: <Amended by Act No. 12955, Dec. 31, 2014> |
| 1. | Where a corporation incorporated pursuant to paragraph (1), discontinues business succeeded from a resident to whom paragraph (1) has been applied; |
| 2. | Where a resident to whom paragraph (1) has been applied, disposes of at least 50/100 of the stocks or equity shares acquired by conversion into a corporation. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 121 (Tax Reduction or Exemption for Enterprises Undergoing Trade Adjustment Assistance whose Business is Converted) |
| (1) | Where a business proprietor transfers fixed assets for business used directly for the pre-conversion business (hereafter in this Article, referred to as "fixed assets for the pre-conversion business") by no later than December 31, 2018, and acquires the fixed assets for business, to be used directly for the converted business within one year from the date of transfer to convert business that an enterprise undergoing trade adjustment assistance under Article 6 of the Act on Trade Adjustment Assistance (hereafter in this Article and Article 122, referred to as "enterprise undergoing trade adjustment assistance") has operated (hereafter in this Article, referred to as "pre-conversion business"), into business falling under any subparagraph of Article 6 (3) of the Act on Restriction on Special Cases concerning Taxation (hereafter in this Article, referred to as "converted business"), regarding the proceeds from transfer occurred from the transfer of the building and appurtenant land for the pre-conversion business (hereafter in this Article, referred to as "transfer value of pre-conversion business"), an amount of tax equivalent to 50/100 of the individual local income tax on capital gains, may be reduced or exempted, as prescribed by Presidential Decree: Provided, That the main sentence hereof shall not apply where a resident is granted deferred taxation under Article 33 (2) of the Restriction of Special Taxation Act. <Amended on Dec. 27, 2016; Oct. 19, 2021> |
| (2) | Where any national to whom the application of paragraph (1) was applied, fails to convert his/her business or discontinues or closes his/her converted business within three years from the date he/she commences his/her converted business, he/she shall pay the amount of tax reduced or exempted as individual local income tax on capital gains, when calculating his/her income of the business year in which the relevant ground arises. In such cases, the equivalent of the interest calculated as prescribed by Presidential Decree shall be paid in addition to the individual local income tax on capital gains; and the amount of relevant tax shall be deemed the amount of tax payable pursuant to Article 103-7 of the Local Tax Act. |
| (3) | For the purposes of paragraphs (1) and (2), the scope of business conversion and fixed assets for business; submission of application for tax reduction or exemption, and detailed statement of gains on transfer of fixed assets for business; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 122 (Tax Reduction or Exemption for Small or Medium Enterprises and Enterprises Undergoing Trade Adjustment Assistance whose Business is Converted) |
| (1) | Where any nationals who operate small or medium enterprises convert business that they have operated continuously for at least five years or business that an enterprise undergoing trade adjustment assistance has operated (hereafter in this Article, referred to as "pre-conversion business"), into business falling under any subparagraph of Article 6 (3) of the Act on Restriction on Special Cases concerning Taxation (hereafter in this Article, referred to as "converted business") in an area outside the overconcentration control district of the Seoul Metropolitan area (in cases of an enterprise undergoing trade adjustment assistance, including cases of converting its business within the overconcentration control district of the Seoul Metropolitan area), by no later than December 31, 2018 (in cases of the establishment of a new factory, by no later than December 31, 2020), according to the following subparagraphs, they shall be granted a reduction of an amount of tax equivalent to 50/100 of the individual local income tax on income derived from the converted business in the taxable year in which the first income accrues from such business (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date of business conversion, the taxable year falling on the fifth anniversary) after the date of converting the business prescribed by Presidential Decree (hereafter in this Article, referred to as "date of business conversion") and also within the three subsequent taxable years from the beginning of the subsequent taxable year: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Where they transfer or discontinue the pre-conversion business and convert it into the converted business within one year (in cases of the establishment of a new factory, within three years) after the date of such transfer or discontinuance; |
| 2. | Where they reduce the size of the pre-conversion business and add the converted business, as prescribed by Presidential Decree. |
| (2) | For the purposes of paragraph (1) 2, the tax reduction or exemption under the same paragraph shall not apply to the taxable year prescribed by Presidential Decree, during the period for reduction. |
| (3) | Where any national to whom paragraph (1) was applied, fails to convert his/her business or discontinues or closes his/her converted business within three years from the date of business conversion, he/she shall pay, as individual local income tax, the amount of tax reduced at the time of calculating the income amount for the taxable year in which such ground arises. |
| (4) | Where the amount of individual local income tax reduced pursuant to paragraph (1) is paid in accordance with paragraph (3), the additional amount equivalent to the interest calculated as prescribed by Presidential Decree shall be paid in addition to the individual local income tax; and the relevant amount of tax shall be deemed the amount of tax payable pursuant to Article 95 of the Local Tax Act. |
| (5) | Any national who seeks application of paragraph (1) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 123 (Special Taxation of Individual Local Income Tax for Transfer of Assets by Stockholders, etc.) |
| (1) | Where stockholders, etc. who are residents transfer assets owned by themselves and donate the transfer proceeds thereof to the relevant corporation as at December 31, 2018, when stockholders, etc. donate assets to a corporation under Article 40 (1) of the Restriction of Special Taxation Act, they shall be granted exemption of the individual local income tax on capital gains on the equivalent to the amount of donation prescribed by Presidential Decree (hereafter in this Article, referred to as "equivalent to proceeds from transfer") among proceeds from transfer accruing from the transfer of the relevant assets. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Where a corporation in receipt of donated assets under paragraph (1), falls under any subparagraph of Article 40 (4) of the Restriction of Special Taxation Act, the amount of tax exempted under paragraph (1) shall be collected in addition to the amount of corporate local income tax to be paid by the relevant corporation. <Newly Inserted by Act No. 12506, Mar. 24, 2014> |
| (3) | The additional amount equivalent to the interest calculated, as prescribed by Presidential Decree, shall be added to the amount of tax to be paid by a corporation under paragraph (2); and the relevant amount of tax shall be deemed the amount of tax to be paid under Article 103-23 (3) of the Local Tax Act: Provided, That the same shall not apply to cases falling under the proviso to Article 40 (4) 3 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 12506, Mar. 24, 2014> |
| (4) | For the purposes of paragraphs (1) through (3), matters necessary for applying for tax reduction or exemption, etc. shall be prescribed by Presidential Decree. <Amended by Act No. 12506, Mar. 24, 2014> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 8 Special Provisions on Balanced Regional Development
| Article 124 (Tax Reduction or Exemption for Small or Medium Enterprises Relocated Outside Overconcentration Control District of Seoul Metropolitan Area) |
| (1) | Where a small or medium enterprise (limited to a national) which has continued to operate its business with its factory and facilities in the overconcentration control district of the Seoul Metropolitan area for at least two years, relocates the entire factory and facilities to an area outside the overconcentration control district of the Seoul Metropolitan area as prescribed by Presidential Decree and starts its business there as at December 31, 2017 (if its headquarters or principal office is located in the overconcentration control district of the Seoul Metropolitan area, only applicable where the relevant headquarters or principal office is relocated as well), an amount of tax equivalent to 100/100 of individual local income tax on the income derived from the factory after relocation for the taxable year in which the first income accrues from the relevant factory since the date of relocation (where no income accrues until the taxable year falling on the fifth anniversary from the date of relocation, the taxable year falling on the fifth anniversary from the date of relocation) and for the six subsequent taxable years (or four years, if it is relocated to a growth management region under Article 6 (1) 2 of the Seoul Metropolitan Area Readjustment Planning Act, a sanctuary under Article 6 (1) 3 of the same Act, a Metropolitan City located in an area other than the Seoul Metropolitan area, or an area prescribed by Presidential Decree) from the commencing date of the following taxable year; and an amount of tax equivalent to 50/100 of individual local income tax for the taxable years ending within three years thereafter (or two years thereafter, if it is relocated to a growth management region under Article 6 (1) 2 of the Seoul Metropolitan Area Readjustment Planning Act, a sanctuary under Article 6 (1) 3 of the same Act, a Metropolitan City located in an area other than the Seoul Metropolitan area, or an area prescribed by Presidential Decree), shall be reduced or exempted. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Where a small or medium enterprise entitled to reduction or exemption under paragraph (1), falls under any of the following cases, it shall pay, as individual local income tax, the amount of tax calculated as prescribed by Presidential Decree at the time it files the tax return on the individual local income tax for the taxable year in which the relevant ground arises: |
| 1. | Where business is discontinued within three years from the date of commencing the business by relocating the factory: Provided, That this shall not apply where it arises from a merger, split-off, or merger through split-off; |
| 2. | Where it does not fall under cases where business is started by relocating its factory to an area outside the overconcentration control district of the Seoul Metropolitan area, as prescribed by Presidential Decree; |
| 3. | Where a factory which produces the same products as those produced at the factory relocated pursuant to paragraph (1), or its head office is installed within the overconcentration control district of the Seoul Metropolitan area during the period entitled to reduction or exemption under paragraph (1). |
| (3) | Where the amount of individual local income tax reduced or exempted under paragraph (1) is paid under paragraph (2), the provisions concerning the additional amount equivalent to the interest under Article 122 (4) shall apply mutatis mutandis thereto. |
| (4) | Any person who seeks application of paragraph (1) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
| (5) | A small or medium enterprise that seeks application of paragraph (1) shall have conducted the same type of business in the factory before its relocation as that conducted in the factory after its relocation, based on the classification prescribed by Presidential Decree. |
| (6) | Where an enterprise to which reduction or exemption is granted pursuant to paragraph (1), ceases to fall under a small or medium enterprise on the grounds prescribed by Presidential Decree, such as merging with an enterprise which is not a small or medium enterprise under the Framework Act on Small and Medium Enterprises, no reduction or exemption shall be granted from the taxable year in which the relevant grounds arise. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 125 (Tax Reduction or Exemption for Enterprises, etc. Located in Agro-Industrial Complex) |
| (1) | Individual local income tax on any income accruing from the relevant business operated by any of the following persons, shall be reduced or exempted, by applying mutatis mutandis Article 100 (1): <Amended on Dec. 31, 2014; Mar. 29, 2016; Dec. 27, 2016; Jul. 27, 2021> |
| 1. | Any national engaging in a project for developing sources of income for agricultural and fishing villages, after relocating to an agro-industrial complex prescribed by Presidential Decree by no later than December 31, 2018, among those falling under the Industrial Sites and Development Act; |
| 2. | A small or medium enterprise engaging in business after relocating to an area prescribed by Presidential Decree as area for special support for small and medium enterprises designated under Article 23 of the Act on the Fostering of Local Small and Medium Enterprises and Promotion of Their Innovation, by not later than December 31, 2018 |
| (2) | Any person who seeks application of paragraph (1) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly on Jan. 1, 2014]
| Article 126 (Exemption from Individual Local Income Tax for Members of Agricultural Partnership) |
| (1) | Of the dividends that a member of an agricultural partnership prescribed in the Act on Fostering and Supporting Agricultural and Fisheries Business Entities (hereinafter referred to as "agricultural partnership") receives from the agricultural partnership by no later than December 31, 2018, the entire dividend derived from business of growing crops and other food crops (hereinafter referred to as "food-crop growing business") and an amount of dividend derived from income other than income from food-crop growing business, shall be exempted from individual local income tax within the limits prescribed by Presidential Decree. In such cases, the calculation of the dividend derived from income from food-crop growing business and the dividend derived from income other than food-crop growing business, shall be governed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | An amount of tax equivalent to 100/100 of individual local income tax on capital gains on the income derived by agricultural personnel prescribed by Presidential Decree by contributing farmland or grassland the permission for creation of which is obtained pursuant to Article 5 of the Grassland Act (hereinafter referred to as "grassland") to an agricultural partnership as an investment in kind by no later than December 31, 2018, shall be reduced or exempted: Provided, That where the relevant farmland or grassland is incorporated into a residential area, commercial area, or industrial area under the National Land Planning and Utilization Act (hereafter from this Article to Article 131, referred to as "residential area, etc."); or where it is designated as land reserved for substitution for land other than farmland or grassland, prior to a disposition for land substitution pursuant to the Urban Development Act or other statutes, an amount of tax equivalent to 100/100 of individual local income tax on capital gains, shall be exempted only on the amount of income prescribed by Presidential Decree, earned as at the date of incorporation into a residential area, etc. or as at the date of designation of land reserved for land substitution. <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (3) | Where any person for whom the individual local income tax on capital gains is reduced under paragraph (2), transfers his/her contribution shares to a third party within three years from the date of the equity investment, the amount calculated as prescribed by Presidential Decree shall be paid as individual local income tax on capital gains as at the time he/she files the tax return for the taxable year in which the date of such transfer falls: Provided, That this shall not apply to cases prescribed by Presidential Decree. <Amended by Act No. 12955, Dec. 31, 2014> |
| (4) | An amount equivalent to interest calculated as prescribed by Presidential Decree shall be added when the individual local income tax on capital gains reduced under paragraph (2) is paid under the main sentence of paragraph (3). <Amended by Act No. 12955, Dec. 31, 2014> |
| (5) | Where agricultural personnel prescribed by Presidential Decree invest in an agricultural partnership with real estate (excluding farmland and grassland referred to in paragraph (2)) used directly for crop-cultivation, stock-breeding, or forestry prescribed in subparagraph 1 of Article 3 of the Framework Act on Agriculture, Rural Community and Food Industry, as at December 31, 2018, they shall be eligible for tax carried forward. <Amended by Act No. 13383, Jun. 22, 2015; Act No. 14477, Dec. 27, 2016> |
| (6) | Any person who seeks application of paragraph (1), (2), or (5) shall apply therefor, as prescribed by Presidential Decree. |
| (7) | Where agricultural personnel to whom paragraph (5) was applied, dispose of at least 50/100 of the stocks or equity shares acquired through investment in kind within three years from the date of investment, the amount of tax carried forward under paragraph (7) (referring to the amount excluding the amount of tax already paid by the relevant agricultural partnership), shall be paid as individual local income tax on capital gains as prescribed by Presidential Decree within two months from the end of the month of disposal. <Amended by Act No. 12955, Dec. 31, 2014> |
| (8) | Matters necessary for the standards for determining, etc. disposal of at least 50/100 of stocks or equity shares where an amount of tax carried forward under paragraph (5), is paid pursuant to paragraph (7), shall be prescribed by Presidential Decree; and an amount equivalent to interest calculated as prescribed by Presidential Decree shall be added thereto. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 127 (Exemption, etc. from Individual Local Income Tax for Members of Fisheries Partnership) |
| (1) | Of the dividends that a member of a fisheries partnership prescribed in the Act on Fostering and Supporting Agricultural and Fisheries Business Entities (hereinafter referred to as "fisheries partnership") receives from the fisheries partnership by no later than December 31, 2018, an amount within the limits prescribed by Presidential Decree, shall be exempted from individual local income tax. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | An amount of tax equivalent to 100/100 of individual local income tax on capital gains on the income derived from investment in kind with land, etc. for fisheries prescribed by Presidential Decree (hereafter in this Article, referred to as "land, etc. for fisheries") in a fisheries partnership and in a fisheries company prescribed in the Act on Fostering and Supporting Agricultural and Fisheries Business Entities made by fisheries personnel prescribed by Presidential Decree as at December 31, 2018, shall be reduced or exempted: Provided, That where the relevant land, etc. for fisheries is incorporated into a residential area, etc.; or where it is designated as land reserved for substitution for land other than land, etc. for fisheries, prior to a disposition for land substitution pursuant to the Urban Development Act or other statutes, an amount of tax equivalent to 100/100 of individual local income tax on capital gains shall be exempted only on the amount of income prescribed by Presidential Decree, earned as at the date of incorporation into a residential area, etc. or as at the date of designation of land reserved for land substitution. <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (3) | Where a person for whom individual local income tax on capital gains is reduced under paragraph (2), transfers his/her equity shares to a third party within three years from the date of the equity investment, an amount of tax calculated as prescribed by Presidential Decree shall be paid as individual local income on capital gains as at the time he/she files a tax return on the individual local income tax for the taxable year in which the date of such transfer falls: Provided, That this shall not apply where prescribed by Presidential Decree. <Amended by Act No. 12955, Dec. 31, 2014> |
| (4) | Article 126 (4) and (6) shall apply mutatis mutandis to the application for tax reduction and exemption under paragraphs (1) and (2) and the payment of the amount of tax under the main sentence of paragraph (3). <Amended by Act No. 12955, Dec. 31, 2014> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 128 (Exemption, etc. from Individual Local Income Tax on Capital Gains for Agricultural Personnel, etc.) |
| (1) | An amount of tax equivalent to 100/100 of individual local income tax on capital gains income derived from investment in kind with farmland or grassland in an agricultural company prescribed in the Act on Fostering and Supporting Agricultural and Fisheries Business Entities (hereinafter referred to as "agricultural company"; and in this paragraph, an agricultural company shall be limited only to a company that meets the requirements for an agricultural corporation under the Farmland Act) made by agricultural personnel prescribed by Presidential Decree as at December 31, 2018, shall be reduced or exempted: Provided, That where the relevant farmland or grassland is incorporated into a residential area, etc.; or where it is designated as land reserved for substitution for land other than farmland or grassland, etc., prior to a disposition for land substitution pursuant to the Urban Development Act or other statutes, an amount of tax equivalent to 100/100 of individual local income tax on capital gains, shall be exempted only on the amount of income prescribed by Presidential Decree, earned as at the date of incorporation into a residential area, etc. or as at the date of designation of land reserved for land substitution. <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | Where agricultural personnel prescribed by Presidential Decree invest in an agricultural company with real estate (excluding farmland and grassland referred to in paragraph (1)) used directly for crop-cultivation, stock-breeding, or forestry, prescribed in subparagraph 1 of Article 3 of the Framework Act on Agriculture, Rural Community and Food Industry as at December 31, 2018, they shall be eligible for the application of tax carried forward. In such cases, Article 126 (7) and (8) shall apply mutatis mutandis. <Amended by Act No. 13383, Jun. 22, 2015; Act No. 14477, Dec. 27, 2016> |
| (3) | Of the dividends that a resident who has invested in an agricultural company receives from the agricultural company by no later than December 31, 2018, the whole amount of dividends derived from income from food-crop growing business shall be exempted from individual local income tax. <Amended by Act No. 14477, Dec. 27, 2016> |
| (4) | Any person who seeks application of paragraphs (1) through (3) shall apply therefor, as prescribed by Presidential Decree. |
| (5) | Article 126 (3), (4), and (6) shall apply mutatis mutandis to reduction or exemption of individual local income tax on capital gains income referred to in paragraph (1). <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 129 (Reduction or Exemption of Individual Local Income Tax on Capital Gains for Self-Cultivating Farmland) |
| (1) | Individual local income tax on capital gains shall be exempted if the capital gains are derived from transferring land prescribed by Presidential Decree among that cultivated directly by a method prescribed by Presidential Decree by a resident prescribed by Presidential Decree who resides at a place where farmland is located for at least eight years [for at least three years where farmland entitled to the directly paid subsidy for the transfer of management prescribed by Presidential Decree is transferred, as at December 31, 2018, to the Korea Rural Community Corporation under the Korea Rural Community Corporation and Farmland Management Fund Act or a corporation prescribed by Presidential Decree whose main business line is agriculture (hereafter in this Article, referred to as "agricultural corporation")]: Provided, That where the relevant land is incorporated into a residential area, etc.; or where it is designated as land reserved for land substitution, other than farmland, prior to a disposition for land substitution under the Urban Development Act or other statutes, the individual local income tax on capital gains shall be exempted only on the amount of income prescribed by Presidential Decree, earned as at the date of incorporation into a residential area, etc. or as at the date of designation of land reserved for land substitution. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Where an agricultural corporation transfers the land in question within three years from the date of acquisition of such land, or where any ground prescribed by Presidential Decree arises, the relevant corporation shall pay the equivalent to the amount of tax exempted pursuant to paragraph (1) as corporate local income tax, at the time of filing its tax return for the taxable year in which such ground arises. |
| (3) | Any person who seeks application of paragraph (1) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 130 (Reduction or Exemption of Individual Local Income Tax on Capital Gains for Site for Livestock Stables) |
| (1) | Individual local income tax on capital gains shall be exempted if the relevant income is derived by a resident prescribed by Presidential Decree, who resides where a stable used for breeding livestock and appurtenant land (hereafter in this Article, referred to as "site for livestock stables") are located, from the transfer of the site for livestock stables (within 1,650 square meters per person) prescribed by Presidential Decree, used directly for breeding livestock by a method prescribed by Presidential Decree for at least eight years as at December 31, 2017, for business closure: Provided, That where the relevant land is incorporated into a residential area, etc.; or where it is designated as land reserved for land substitution for a site other than for livestock stables, prior to a disposition for land substitution pursuant to the Urban Development Act or other statutes, the individual local income tax on capital gains shall be exempted only on the amount of income prescribed by Presidential Decree, earned as at the date of incorporation into a residential area, etc. or as at the date of designation of land reserved for land substitution. <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | Where a resident whose individual local income tax on capital gains has been exempted pursuant to paragraph (1), re-commences livestock business within five years after transferring the relevant site for livestock stables, the amount of tax exempted shall be additionally collected: Provided, That this shall not apply where prescribed by Presidential Decree, such as inheritance. |
| (3) | Any person who seeks application of paragraph (1) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
| (4) | For the purposes of paragraphs (1) through (3), the period for holding a site for livestock stables; the scope of business closure; the method for calculating the amount of tax reduced or exempted; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 131 (Reduction or Exemption of Individual Local Income Tax on Capital Gains for Substitute Land for Farmland) |
| (1) | Individual local income tax on capital gains shall be exempted if the relevant income is derived by a resident prescribed by Presidential Decree, who resides in the location of farmland, from the exchange of land cultivated directly by a method prescribed by Presidential Decree, under the necessity of cultivation, for farmland falling under cases prescribed by Presidential Decree: Provided, That where the land in question is incorporated into a residential area, etc.; or where it is designated as land reserved for land substitution for a site other than farmland, prior to a disposition for land substitution pursuant to the Urban Development Act or other statutes, the individual local income tax on capital gains shall be exempted only on the amount of income prescribed by Presidential Decree, earned as at the date of incorporation into a residential area, etc., or as at the date of designation of land reserved for land substitution. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Paragraph (1) shall not apply where any land transferred or acquired pursuant to paragraph (1) is incorporated into a residential area, etc.; or where it is designated as land reserved for land substitution, other than as farmland, prior to a disposition for land substitution taken pursuant to the Urban Development Act or other statutes, which is land prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | Any person who seeks reduction or exemption as prescribed in paragraph (1) shall apply therefor, as prescribed by Presidential Decree. |
| (4) | Where a resident granted a reduction or exemption of individual local income tax on capital gains under paragraph (1), fails to fulfill the requirements prescribed in paragraph (1) due to grounds prescribed by Presidential Decree, he/she shall pay the reduced or exempted individual local income tax on capital gains within two months from the end of the month in which such ground arises. |
| (5) | Where the individual local income tax on capital gains reduced or exempted under paragraph (1) is paid under paragraph (4), an amount equivalent to the interest calculated as prescribed by Presidential Decree shall be added thereto. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 131-2 (Special Taxation of Individual Local Income Tax on Capital Gains on Sale, etc. of Farmland for Revival of Management) |
| (1) | Where a farmer defined in Article 2 of the Farmland Act (hereafter in this Article, referred to as "agricultural personnel") has transferred farmland that he/she cultivated under Article 24-3 (1) of the Korea Rural Community Corporation and Farmland Management Fund Act and agricultural facilities attached to such farmland (hereafter in this Article, referred to as "farmland, etc.") to the Korea Rural Community Corporation under Article 3 of the same Act (hereafter i“ this Article, referred to as the "Korea Rural Community Corporation"), cultivates it directly on a lease, and repurchases the relevant farmland, etc. within the rental period under Article 24-3 (3) of the same Act, he/she shall be eligible to a refund of the individual local income tax on capital gains that he/she has paid for the income derived from the transfer of the relevant farmland, etc., as prescribed by Presidential Decree. |
| (3) | A person who intends to receive a refund under paragraph (1) shall apply for a refund, as prescribed by Presidential Decree. |
| (4) | For the purposes of paragraphs (1) and (2), where the repurchased farmland, etc. is retransferred, the method for applying reduction or exemption of individual local income tax on capital gains on self-cultivating farmland under Article 129, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12506, Mar. 24, 2014]
SECTION 9 Special Provisions on Support for Public Works Projects
| Article 132 (Reduction or Exemption of Individual Local Income Tax on Capital Gains on Land, etc. for Public Works Projects) |
| (1) | An amount of tax equivalent to 10/100 (or 15/100 where a portion of the transfer price of land, etc. is paid in bonds prescribed by Presidential Decree, but 30/100 (or 40/100 where the bond maturity is at least five years) in cases of income derived from purchase by mutual agreement or expropriation under Acts prescribed by Presidential Decree, such as the Special Act on Public Housing; and in cases of which a special agreement is made to retain the bonds until a maturity of at least three years, as prescribed by Presidential Decree) of the individual local income tax on capital gains, shall be reduced for any of the following income derived by December 31, 2018, from the transfer of land, etc. acquired within two years retroactively from the date the project approval is publicly announced (or the date of transfer, where transfer is implemented before the date the project approval is publicly announced) granted for the area for public project wherein the relevant land, etc. is located: <Amended by Act No. 12506, Mar. 24, 2014; Act No. 13498, Aug. 28, 2015; Act No. 14477, Dec. 27, 2016> |
| 1. | Income derived from the transfer to an implementer of a public works project on such land, etc. as necessary for the public works project to which the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects applies; |
| 2. | Income derived from the transfer to an implementer of a project under the Act on the Maintenance and Improvement of Urban Areas and Residential Environments on such land, etc. as located in an area to be maintained and improved under the same Act (excluding such area to be maintained and improved as unaccompanied by infrastructure to be maintained and improved); |
| 3. | Income derived from the expropriation of land, etc. under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects or other statutes. |
| (2) | Where a resident transfers land, etc. he/she owns for at least two years (referring to land, etc. necessary for public works projects under paragraph (1) 1 or land, etc. within an area to be maintained and improved under subparagraph 2 of the same paragraph; hereafter in this paragraph, the same shall apply) to the implementer of a public works project under paragraph (1) 1 and a project implementer (hereafter in this Article, referred to as "project implementer") before being designated as a project implementer under subparagraph 2 of the same paragraph (hereafter in this paragraph, referred to as "project implementer before designation") as at December 2015, and files a tax return (including an interim return) on individual local income for the taxable period not later than the statutory period of the return, if the project implementer before designation is designated as the project implementer within five years from the date the land, etc. is transferred, the individual local income tax on capital gains under paragraph (1) may be reduced or exempted, as prescribed by Presidential Decree. In such cases, the calculation of the individual local income tax on capital gains to be reduced or exempted shall be governed by the applicable Act as at the time of transfer, although the reduction or exemption rate, etc. is changed. |
| (3) | In any of the following cases, the relevant project implementer shall pay the equivalent of the amount of tax reduced or exempted under paragraph (1) or (2) as local income tax, at the time of his/her tax return for the taxable year in which such case occurs: <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14567, Feb. 8, 2017> |
| 1. | Where an implementer of a public works project prescribed in paragraph (1) 1 fails to undertake the public works project within three years from the date he/she obtained authorization, etc. to implement the same; |
| 2. | Where a project implementer under paragraph (1) 2 fails to obtain authorization for the implementation plan of the project, or to complete the project, under the Act on the Maintenance and Improvement of Urban Areas and Residential Environments by the deadline prescribed by Presidential Decree. |
| (4) | Where a person who had contracted a special agreement to retain relevant bonds until maturity as prescribed in paragraph (1) and had an amount of tax equivalent to 30/100 (or 40/100 in cases of bonds with a maturity of at least five years) of individual local income tax on capital gains reduced or exempted, has breached such special agreement, the equivalent of 10/100 (or 20/100 in cases of bonds with a maturity of at least five years) of individual local income tax on capital gains out of the amount of tax reduced or exempted, shall be collected immediately. <Amended by Act No. 12506, Mar. 24, 2014> |
| (5) | Article 122 (4) concerning an additional amount equivalent to the interest shall apply mutatis mutandis where the amount of tax reduced or exempted under paragraph (1) 1 or 2 or (2) is paid under paragraph (3); and Article 126 (4) shall apply mutatis mutandis where the amount of tax reduced or exempted under paragraph (1) is collected under paragraph (4). |
| (6) | Where a project implementer intends to be granted a tax reduction or exemption as prescribed in paragraph (1) 1 or 2, he/she shall apply for reduction or exemption, as prescribed by Presidential Decree. |
| (7) | Any person who seeks reduction or exemption under paragraph (1) 3 shall apply therefor, as prescribed by Presidential Decree. |
| (8) | For the purposes of paragraphs (1) and (4), the terms and conditions of the special agreement to retain related bonds until maturity, and other necessary matters, shall be prescribed by Presidential Decree. |
| (9) | For the purposes of paragraphs (1) and (2), regarding land, etc. inherited or donated to which Article 97-2 (1) of the Income Tax Act applies, the date an ancestor or donator acquired the relevant land, etc. shall be deemed the date of acquisition of the relevant land, etc. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 133 (Reduction or Exemption of Individual Local Income Tax on Capital Gains for Land, etc. subject to Purchase following Designation of Development Restriction Zones) |
| 1. | Land, etc. owned by a resident prescribed by Presidential Decree residing in the location of the relevant land, etc. from the date of acquisition to the date purchase is claimed or the date of purchase by consultation after he/she acquired the relevant land, etc. prior to the date it is designated as a development restriction zone: An amount of tax equivalent to 40/100 of the individual local income tax on capital gains; |
| 2. | Land, etc. owned by a resident prescribed by Presidential Decree residing in the location of the relevant land, etc. from the date of acquisition to the date purchase is claimed or the date of purchase by consultation after he/she acquired the relevant land, etc. 20 years prior to the date purchase is claimed or the date of purchase by consultation: An amount of tax equivalent to 25/100 of the individual local income tax on capital gains. |
| (2) | Any income derived from transfer of the relevant land, etc. on which the designation of a development restriction zone is cancelled, through purchase by consultation or expropriation under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects or other statutes, by no later than December 31, 2017, shall be entitled to the reduction of or exemption from the following amount of tax: Provided, That this shall be limited to where approval for a project is publicly announced in accordance with the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects or other statutes within one year (or five years when the relevant area is designated as an area prescribed by Presidential Decree, such as designation of a free economic zone prescribed in the Act on Designation and Management of Free Economic Zones, prior to the cancellation of designation of development restriction zones) from the date the designation of a development restriction zone is cancelled: <Amended by Act No. 12506, Mar. 24, 2014; Act No. 12955, Dec. 31, 2014> |
| 1. | Land, etc. owned by a resident prescribed by Presidential Decree residing in the location of the relevant land, etc. from the date of acquisition to the date the project approval is publicly announced after he/she has acquired the relevant land, etc. prior to the date it is designated as a development restriction zone: An amount of tax equivalent to 40/100 of the individual local income tax on capital gains; |
| 2. | Land, etc. owned by a resident prescribed by Presidential Decree residing in the location of the relevant land, etc. from the date of acquisition to the date the project approval is publicly announced after he/she has acquired the relevant land, etc. 20 years before the date the project approval is publicly announced: An amount of tax equivalent to 25/100 of the individual local income tax on capital gains. |
| (3) | For the purposes of paragraph (1) or (2), regarding land, etc. inherited, the date an ancestor acquired the relevant land, etc., shall be deemed the date of acquisition of the relevant land, etc. |
| (4) | For the purposes of paragraph (1) or (2), application for reduction or exemption; calculation of the period of residence; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 134 (Tax Reduction or Exemption for Relocating Factories in Areas Subject to Planned Development of Administrative City and Innovation Cities, to Rural Areas) |
| (1) | Where any national conducting business with his/her factory facilities installed within an area subject to the planned development of the Administrative City under the Special Act on the Construction of Administrative City in Yeongi-Gongju Area for Follow-up Measure of New Administrative Capital or an area subject to the planned development of an innovation city under the Special Act on the Construction and Development of Innovation Cities (hereafter in this Article, referred to as "Administrative City, etc."), relocates to an area outside the Administrative City, etc. prescribed by Presidential Decree (hereafter in this Article, referred to as "rural area") and commences business there, regarding the income accruing from the previous business, he/she shall be granted a reduction of an amount of tax equivalent to 50/100 of the individual local income tax on the income generated from the previous business in the taxable year in which the first income accrues after the date of relocation (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date of relocation, the taxable year falling on the fifth anniversary) and also within the three subsequent taxable years from the beginning of the subsequent taxable year.<Amended by Act No. 15309, Dec. 26, 2017> |
| (2) | Any national who seeks application of paragraph (1) shall apply for tax reduction or exemption, as prescribed by Presidential Decree, together with a tax return of the relevant taxable year. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 135 (Reduction or Exemption of Individual Local Income Tax, etc. for Social Enterprises and Standard Workplaces for Persons with Disabilities) |
| (1) | Any national accredited as a social enterprise by no later than December 31, 2019, as prescribed in subparagraph 1 of Article 2 of the Social Enterprise Promotion Act, shall be granted a tax reduction or exemption equivalent to 100/100 of individual local income tax on the income accrued from the relevant business in the taxable year in which the first income accrues after such accreditation (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date of accreditation, the taxable year falling on the fifth anniversary) and also within the two subsequent taxable years from the beginning of the subsequent taxable year; and further shall be granted a tax reduction equivalent to 50/100 of the individual local income tax for the two subsequent taxable years thereafter. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Any national accredited as a standard workplace for persons with disabilities under subparagraph 8 of Article 2 of the Act on the Employment Promotion and Vocational Rehabilitation of Persons with Disabilities by no later than December 31, 2019, shall be granted a tax reduction or exemption equivalent to 100/100 of the individual local income tax on the income accrued from the relevant business in the taxable year in which the first income accrues from such business (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date of accreditation, the taxable year falling on the fifth anniversary) and also within the two subsequent taxable years from the beginning of the immediately following taxable year; and further shall be granted a tax reduction equivalent to 50/100 of the individual local income tax for the two subsequent taxable years thereafter. <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | For the purposes of paragraph (1), where the accreditation of a social enterprise is revoked pursuant to Article 18 of the Social Enterprise Promotion Act because it falls under any of the following cases during the period of tax reduction or exemption, the relevant national shall not be eligible for the reduction or exemption of the individual local income tax under paragraph (1) from the relevant taxable year: |
| 1. | Where it obtains accreditation fraudulently or deceptively; |
| (4) | For the purposes of paragraph (2), where the relevant standard workplace for persons with disabilities falls under any of the following cases during the period of tax reduction or exemption, the relevant national shall not be eligible for the reduction or exemption of the individual local income tax under paragraph (2) from the relevant taxable year: |
| (5) | Where any national granted a tax reduction or exemption pursuant to paragraph (1) or (2) falls under paragraph (3) 1 or (4) 1, he/she shall pay the amount of tax reduced or exempted, with an additional amount calculated by applying the additional amount equivalent to interest prescribed by Presidential Decree, as individual local income tax, at the time of filing a tax return for the taxable year in which such ground arises. |
| (6) | Any person who seeks application of paragraph (1) or (2) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 136 (Reduction or Exemption of Individual Local Income Tax on Capital Gains for Mountainous Areas Transferred to State) |
| (1) | Where a national transfers a mountainous area prescribed in the Mountainous Districts Management Act (excluding a mountainous area located in an urban area prescribed in the National Land Planning and Utilization Act; hereafter in this paragraph, referred to as "mountainous area") which he/she owns for at least two years to the State by December 31, 2017, pursuant to Article 18 of the State Forest Administration and Management Act, an amount of tax equivalent to 10/100 of individual local income tax on capital gains on the income accrued from such transfer, shall be reduced. <Amended by Act No. 12506, Mar. 24, 2014; Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | Any person who seeks application of paragraph (1) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 10 Special Provisions on Stabilization of National Living
| Article 137 (Tax Credit for Investment in Facilities for Promotion of Workers' Welfare) |
| (1) | If a national prescribed by Presidential Decree acquires (including new construction, expansion, repair, or purchase; hereafter in this Article, the same shall apply) any of the following facilities by no later than December 31, 2018, to promote the welfare of his/her employees, such as residential stability, the equivalent of 7/1,000 (or 10/1,000 where a national who acquires such facilities is a small or medium enterprise, or where facilities referred to in subparagraph 1 or 2 which are housing units prescribed by Presidential Decree outside of the Seoul Metropolitan area, or facilities referred to in subparagraph 3 are acquired) of the acquisition price of the relevant facilities (excluding the purchase price of land appurtenant to such facilities), shall be deducted from his/her individual local income tax (limited to individual local income tax on business income) for the taxable year in which the date of acquisition falls: <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| 1. | National housing to be rented to employees who do not own a house (excluding executives who are equity investors); |
| 2. | Dormitory for employees; |
| 4. | Facilities prescribed by Presidential Decree as those for improving convenience of person with a disability, elderly persons, pregnant women, etc.; |
| 5. | Facilities prescribed by Presidential Decree as those for the rest or health training, etc. of employees; |
| (2) | Matters necessary for calculating a tax credit, where national housing under paragraph (1) 1 is acquired together with other houses, or where a dormitory under paragraph (1) 2 is acquired together with other buildings, shall be prescribed by Presidential Decree. |
| (3) | Any national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
| (4) | Where a person granted a deduction of individual local income tax under paragraph (1) or (2), diverts the relevant assets to other purposes within five years from the date work is completed or date the relevant assets are purchased, he/she shall pay, as individual local income tax, such amounts obtained by adding the additional amount equivalent to the interest calculated as prescribed by Presidential Decree, to the equivalent to the amount of tax deduction on the relevant assets, at the time of filing a tax return on the individual local income tax for the taxable year in which the date of such diversion falls; and the relevant amount of tax shall be deemed the amount of tax payable under Article 95 of the Local Tax Act. <Amended by Act No. 12955, Dec. 31, 2014> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 137-2 (Tax Credit for Monthly Rents) |
Where the amount of monthly rents paid is deducted from the assessed global income pursuant to Article 95-2 (1) of the Restriction of Special Local Taxation Act, the equivalent of 12/100 of the amount deducted shall be deducted from the individual local income tax assessed on global income for the relevant taxable year. <Amended by Act No. 14477, Dec. 27, 2016> [This Article Newly Inserted by Act No. 12955, Dec. 31, 2014]
| Article 138 (Tax Reduction or Exemption for Small-Housing Rental Business Operators) |
| (1) | Where a resident prescribed by Presidential Decree, leases at least three rental houses prescribed by Presidential Decree (hereafter in this Article, referred to as "rental houses"), an amount of tax equivalent to 30/100 [or 75/100 in cases of publicly-funded rental housing defined in subparagraph 4 of Article 2 of the Special Act on Private Rental Housing or long-term private rental housing defined in subparagraph 5 of Article 2 of the same Act (hereafter in this Article, referred to as "long-term private rental housing, etc.")] of the individual local income tax on income accrued from the relevant rental business until the taxable year ending as at December 31, 2019, shall be reduced. <Amended by Act No. 14477, Dec. 27, 2016; Act No. 15356, Jan. 16, 2018> |
| (2) | Where any national granted a reduction of individual local income tax under paragraph (1), fails to lease at least three rental houses as prescribed by Presidential Decree for at least four years (or eight years in cases of long-term private rental housing, etc.), he or she shall pay the amount of tax reduced as individual local income tax, at the time he or she files a tax return for the taxable year in which such ground arises. <Amended by Act No. 14477, Dec. 27, 2016; Act No. 15356, Jan. 16, 2018> |
| (3) | Where the individual local income tax reduced pursuant to paragraph (1), is paid in accordance with paragraph (2), Article 122 (4) on the additional amount equivalent to the interest shall apply mutatis mutandis: Provided, That the same shall not apply in extenuating circumstances prescribed by Presidential Decree. |
| (4) | Any person who seeks reduction or exemption of individual local income tax as prescribed in paragraph (1), shall apply therefor, as prescribed by Presidential Decree. |
| (5) | For the purposes of paragraphs (1) through (4), the number of rental houses; application for tax reduction or exemption; and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 139 (Reduction or Exemption of Individual Local Income Tax on Capital Gains for Long-Term Rental Houses) |
| (1) | If a resident prescribed by Presidential Decree, transfers any of the following national housing (including land appurtenant thereto not exceeding twice the gross floor area of the relevant building) after the lease for at least five years since its commencement as at December 31, 2000, 50/100 of the individual local income tax on capital gains on income accrued from the transfer of such housing unit (hereinafter referred to as "rental house"), shall be reduced: Provided, That in cases of a rental house rented for at least five years among the constructed rental housing under the Special Act on Private Rental Housing or the Special Act on Public Housing; and of a rental house (only applicable to a house not occupied at the time it is acquired) rented for at least five years from acquisition and commencement of rent after January 1, 1995, among the purchased rental housing under the same Act; and of a rental house rented for at least ten years, individual local income tax on capital gains shall be exempted: <Amended by Act No. 13499, Aug. 28, 2015> |
| 1. | Houses newly built during the period between January 1, 1986 and December 31, 2000; |
| 2. | Multi-family houses newly built as at December 31, 1985, not occupied as at January 1, 1986. |
| (3) | Any person who seeks reduction or exemption of individual local income tax on capital gains as prescribed in paragraph (1), shall report on the matters concerning the rental house and apply for tax reduction or exemption, as prescribed by Presidential Decree. |
| (4) | The method for calculating the rental period for a rental house under paragraph (1), and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 140 (Exemption of Individual Local Income Tax on Capital Gains for Newly-Built Rental Houses) |
| (1) | Where a resident prescribed by Presidential Decree, transfers any of the following national housing (including land appurtenant thereto not exceeding twice the gross floor area of the relevant building) after renting it for at least five years, individual local income tax on capital gains on the income accrued from the transfer of the relevant house (hereafter in this Article, referred to as "newly-built rental house"), shall be exempted: <Amended by Act No. 13499, Aug. 28, 2015> |
| (a) | A house newly built between August 20, 1999 and December 31, 2001; |
| (b) | A multi-family house newly built as at August 19, 1999, not occupied as at August 20, 1999; |
| 2. | Among the following purchased rental houses under the Special Act on Private Rental Housing or the Special Act on Public Housing, a rental house acquired as of August 20, 1999 (limited to where a contract for sale is concluded and a down payment is made during the period between August 20, 1999 and December 31, 2001), and its lease is commenced (limited to a house not occupied at the time it is acquired): |
| (a) | A house newly built as of August 20, 1999; |
| (b) | A house falling under subparagraph 1 (b). |
| (2) | Article 139 (2) through (4) shall apply mutatis mutandis to a newly-built rental house. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 140-2 (Reduction of Individual Local Income Tax on Capital Gains for Long-Term Private Rental Housing) |
[This Article Newly Inserted by Act No. 12955, Dec. 31, 2014]
| Article 140-3 (Special Taxation for Land Transferred to Rental Business Operators) |
| (1) | Where a resident transfers his or her land to a rental business entity defined in subparagraph 7 of Article 2 of the Special Act on Private Rental Housing (hereafter in this Article, referred to as "rental business entity") that intends to construct at least 300 units of public-funded private rental housing until December 31, 2018, an amount of tax equivalent to 10/100 of the individual local income tax on capital gains on income accruing from the transfer of relevant land, shall be reduced. <Amended by Act No. 15356, Jan. 16, 2018> |
| (2) | A person who seeks application of paragraph (1) shall apply for tax reduction, as prescribed by Presidential Decree. |
| (3) | Where a rental business entity falls under any of the following cases, he or she shall pay the equivalent of the amount of tax reduced pursuant to paragraph (1) as individual local income tax on capital gains at the time he or she files a tax return for the taxable year in which such ground arises: <Amended by Act No. 15356, Jan. 16, 2018> |
| 1. | Where the rental business entity is designated as the implementer of a project for developing publicly-funded private rental housing pursuant to Article 23 of the Special Act on Private Rental Housing: Where the relevant land fails to obtain designation as a supply promotion district pursuant to Article 22 of the Special Act on Private Rental Housing within the period prescribed by Presidential Decree from the date the relevant land is transferred; or where he or she fails to acquire by construction, public-funded private rental housing on at least 50/100 of the area of the site supplied with compensation within a supply promotion district within the period prescribed by Presidential Decree from the date a supply promotion district is designated, although the relevant land was designated as a supply promotion district; |
| 2. | In cases of a rental business entity other than a rental business entity referred to in subparagraph 1: Where he or she fails to obtain approval of a project plan pursuant to Article 15 of the Housing Act or a building permit pursuant to Article 11 of the Building Act (hereafter in this Article, referred to a” "approval of a project plan, etc.") to construct public-funded private rental housing on the relevant land within the period prescribed by Presidential Decree from the date the relevant land is transferred; or where the ratio of the gross floor area of the public-funded private rental housing to the gross floor area of all buildings within the project site, falls below 50/100 within the period prescribed by Presidential Decree from the date of obtaining approval of the project plan, etc., although he or she has obtained approval of the project plan, etc. |
| (4) | Provisions on an amount equivalent to the interest to be paid additionally pursuant to Article 121 (2), shall apply mutatis mutandis where the amount of tax reduced or exempted under paragraph (1) is paid under paragraph (3). |
[This Article Newly Inserted by Act No. 14477, Dec. 27, 2016]
| Article 141 (Special Taxation for Unsold Housing Units) |
| (1) | Where a resident has acquired a unit of national housing unsold in lots, prescribed by Presidential Decree (hereafter in this Article, referred to as "unsold housing unit"), during the period between November 1, 1995 and December 31, 1997 (including where a contract for sale is concluded and a down payment is made by no later than December 31, 1997), and transfers it after owning and renting it for at least five years, he/she may, as regards the individual local income tax on capital gains accruing from the transfer of relevant house, select one of the following methods as applicable thereto: |
| 1. | Method for calculating the tax base and amount of individual local income tax on capital gains pursuant to the Local Tax Act, and paying the individual local income tax on capital gains, accordingly. In such cases, the rate of the individual local income tax on capital gains shall be 20/1,000, notwithstanding Article 103-3 of the Local Tax Act; |
| 2. | Method for calculating the tax base and amount of individual local income tax on global income pursuant to the Local Tax Act, and paying the individual local income tax on global income, accordingly. In such cases, the provisions of Article 19 (2) of the Income Tax Act shall apply mutatis mutandis to calculating the amount of income accrued from the transfer of the relevant house. |
| (2) | For the purposes of paragraph (1), judgment of one house per household falling under any item of Article 89 (1) 3 of the Income Tax Act; application for special taxation; and other matters necessary for the special taxation on an unsold housing unit, shall be prescribed by Presidential Decree. <Amended by Act No. 12506, Mar. 24, 2014> |
| (3) | Where a resident has acquired an unsold national housing unit prescribed by Presidential Decree, during the period between March 1, 1998 and December 31, 1998 (including where a purchase contract is concluded and the contract deposit is paid by no later than December 31, 1998), and transfers it after owning and renting it for at least five years, paragraph (1) shall apply mutatis mutandis to the individual local income tax on income accrued from the transfer of the relevant house. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 142 (Special Taxation of Individual Local Income Tax on Capital Gains, etc. for Acquisition of Unsold Local Housing Units) |
| (1) | Notwithstanding Article 103-3 (1) 3 of the Local Tax Act, the tax rate prescribed in Article 103-3 (1) 1 of the same Act shall apply to the income accrued from the transfer of unsold housing units prescribed by Presidential Decree and located outside the Seoul Metropolitan area (hereafter in this Article, referred to as "unsold local housing units"), acquired (including where a purchase contract is concluded and the contract deposit is paid by no later than December 31, 2010) by a resident during the period between November 3, 2008 and December 31, 2010. <Amended by Act No. 12506, Mar. 24, 2014> |
| (2) | For the purposes of Article 90 of the Local Tax Act, no unsold local housing unit subject to paragraph (1) shall be deemed a house owned by the relevant resident. <Amended by Act No. 12506, Mar. 24, 2014> |
| (3) | For the purposes of paragraphs (1) and (2), a final tax return and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 143 (Special Taxation of Individual Local Income Tax on Capital Gains for Acquirers of Unsold Housing Units) |
| (1) | Where a resident or a non-resident having no domestic place of business under Article 120 of the Income Tax Act, first contracts to purchase an unsold housing unit prescribed by Presidential Decree (hereafter in this Article, referred to as "unsold housing unit") located in an area outside Seoul Special Metropolitan City (excluding designated areas under Article 104-2 (1) of the Income Tax Act) with the relevant project entity who supplies houses pursuant to Article 54 of the Housing Act (where a project entity supplies less than 20 housing units, including the relevant housing builder), and then acquires it during the following periods (including where a purchase contract is concluded and the contract deposit is paid by no later than February 11, 2010), an amount of tax equivalent to 100/100 (or 60/100, in cases of areas located in the metropolitan overconcentration control district) of the individual local income tax on capital gains regarding any income accrued from the transfer of such housing unit within five years from the date of acquisition, shall be reduced or exempted: <Amended by Act No. 13805, Jan. 19, 2016> |
| 1. | In cases of residents: Period between February 12, 2009 and February 11, 2010; |
| 2. | In cases of non-residents: Period between March 16, 2009 and February 11, 2010. |
| (2) | For the purposes of paragraph (1), a house built directly by the person whose construction is commenced (where the date of commencement is uncertain, it shall be based on the date an application for commencement is submitted) and for which approval for use or inspection for use (including approval for temporary use) has been obtained from February 12, 2009, to February 11, 2010, shall be included: Provided, That the same shall not apply in the following cases: <Amended by Act No. 14569, Feb. 8, 2017> |
| 1. | A house acquired by a member of a rearrangement project association implementing a redevelopment project or reconstruction project under the Act on the Maintenance and Improvement of Urban Areas and Residential Environments or a small-scale reconstruction project under the Act on Special Cases concerning Unoccupied House or Small-Scale Housing Improvement according to the relevant management and disposal plans; |
| 2. | A house demolished and then reconstructed after being lost by fire, collapsing, being worn-out, etc. while occupied or owned. |
| (3) | For the purposes of Article 90 of the Local Tax Act, no unsold local housing unit subject to paragraph (1) or (2) shall be deemed a house owned by the relevant resident. <Amended by Act No. 12506, Mar. 24, 2014> |
| (5) | For the purposes of paragraph (1) or (2), application for special taxation and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 144 (Special Taxation of Local Income Tax on Capital Gains on Acquisition of Houses by Non-Residents) |
Where a non-resident having no domestic place of business under Article 120 of the Income Tax Act, acquires (including where a purchase contract is concluded and the contract deposit is paid by no later than February 11, 2010) a house other than unsold housing units under Article 143 (1) during the period between March 16, 2009 and February 11, 2010, and transfers it, the amount of tax equivalent to 10/100 of the individual local income tax on capital gains on the income accruing from such transfer, shall be reduced. [This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 145 (Special Taxation of Individual Local Income Tax on Capital Gains for Acquirers of Unsold Housing Units Located in Areas outside Seoul Metropolitan Area) |
| (1) | Where a resident or a non-resident having no domestic place of business under Article 120 of the Income Tax Act, transfers an unsold housing unit prescribed by Presidential Decree (hereafter in this Article, referred to as "unsold housing unit") located in an area outside the Seoul Metropolitan area as at February 11, 2010, within five years from the date of acquisition, and has been acquired (including where a purchase contract is concluded and the contract deposit is paid by no later than April 30, 2011) after first contracting to purchase the same with the relevant business entity, etc. who supply houses as prescribed in Article 54 of the Housing Act, by no later than April 30, 2011, the amount of tax calculated by multiplying the individual local income tax on capital gains on the income from such transfer, by the following reduction rate according to the discount rate of selling price (referring to the selling price notified in the public announcement of invitation to occupants under the Housing Act; hereafter in this Article, the same shall apply), shall be reduced or exempted: <Amended by Act No. 13805, Jan. 19, 2016> |
| 1. | Where the discount rate of selling price does not exceed 10/100: 60/100; |
| 2. | Where the discount rate of selling price exceeds 10/100, but does not exceed 20/100: 80/100; |
| 3. | Where the discount rate of selling price exceeds 20/100: 100/100. |
| (2) | For the purposes of Article 90 of the Local Tax Act, no unsold housing unit subject to paragraph (1) shall be deemed a house owned by the relevant resident. <Amended by Act No. 12506, Mar. 24, 2014> |
| (4) | For the purposes of paragraph (1), the method for calculating the discount rate of selling price of an unsold housing unit, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 146 (Special Taxation of Individual Local Income Tax on Capital Gains for Acquirers of Unsold Housing Units after Completion) |
| (1) | Where a resident or a non-resident having no domestic place of business under Article 120 of the Income Tax Act (hereafter in this Article, referred to as "non-resident"), transfers any of the following houses, the amount of tax equivalent to 50/100 of individual local income tax on capital gains on the income accrued from the transfer of the house within five years from the date of acquisition, shall be reduced (limited to a house satisfying the requirement referred to in subparagraph 1): <Amended by Act No. 13499, Aug. 28, 2015; Act No. 13805, Jan. 19, 2016> |
| 1. | An unsold housing unit after completion prescribed by Presidential Decree (hereafter in this Article, referred to as "unsold housing unit after completion") which a project entity who supplies housing pursuant to Article 54 of the Housing Act or other project implementers prescribed by Presidential Decree (hereafter in this Article, referred to as "project entity, etc."), has leased for at least two years by contracting to lease, by no later than December 31, 2011, and which a resident or non-resident has acquired after first contracting to purchase the same with the relevant project entity, etc.; |
| 2. | An unsold housing unit after completion that a resident or non-resident acquired by first contracting to purchase the same with a project entity, etc., has leased for at least five years (limited to where a resident or non-resident contracts to lease, by no later than December 31, 2011, after completing business registration under Article 168 of the Income Tax Act and the registration of rental business operator under Article 5 of the Special Act on Private Rental Housing). |
| (2) | For the purposes of Article 90 of the Local Tax Act, no house subject to paragraph (1) shall be deemed a house owned by the relevant resident. <Amended by Act No. 12506, Mar. 24, 2014> |
| (4) | For the purposes of paragraph (1), procedures for verifying an unsold housing unit after completion and the rental period thereof, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 147 (Special Taxation of Individual Local Income Tax on Capital Gains for Acquirers of Unsold Housing Units) |
| (1) | Where a national first contracts to purchase (limited to where a contract deposit is paid) an unsold housing unit prescribed by Presidential Decree as at September 24, 2012, the acquisition value of which does not exceed 900 million won (hereafter in this Article, referred to "unsold housing unit"), with the relevant project entity supplying housing under Article 54 of the Housing Act or any other project implementer prescribed by Presidential Decree, or acquires a house through such contract during the period between September 24, 2012 and December 31, 2012, individual local income tax on capital gains on the income accrued from the transfer of such housing unit within five years from the date of acquisition, shall be exempted. <Amended by Act No. 13805, Jan. 19, 2016> |
| (3) | For the purposes of paragraph (1), application for special taxation and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 148 (Special Taxation of Individual Local Income Tax on Capital Gains for Acquirers of Newly-Built Houses, etc.) |
| (1) | Where a resident or a non-resident acquires a newly-built house, an unsold housing unit, or a house classified as one house per household, the acquisition value of which does not exceed 600 million won or the gross floor area (area for exclusive use, in cases of multi-family houses) of which does not exceed 85 square meters and which is prescribed by Presidential Decree, by first contracting to purchase the same with a project entity supplying housing under Article 54 of the Housing Act during the period between April 1, 2013 and December 31, 2013, or any other person prescribed by Presidential Decree and acquiring it under the same contract (including where the contract deposit is paid by December 31, 2013, after contracting to purchase the same), individual local income tax on capital gains accrued from the transfer of the relevant house within five years from the date of acquisition thereof, shall be exempted. <Amended by Act No. 13805, Jan. 19, 2016> |
| (3) | Paragraph (1) shall not apply to an area prescribed by Presidential Decree wherein the price of real estate has risen or is likely to rise sharply, in light of the inflation of the national consumer prices and of the national trade prices of housing. |
| (4) | Any person who seeks application of paragraph (1) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
| (5) | For the purposes of paragraph (1), application for special taxation and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
SECTION 11 Special Provisions on Other Local Income Taxes
| Article 149 (Reduction or Exemption of Tax on Income from Forest Development) |
| (1) | As for income accrued by no later than December 31, 2018, from the deforestation or transfer of a forest or a seed-collection forest newly-afforested by a national according to a forest management plan or a project for special forest business zone under the Creation and Management of Forest Resources Act (including any designated development projects in a designated development area provided for in Article 2 of the Addenda to the amended Forestry Act (Act No. 4206), which is the designated development area designated by the former Forestry Act prior to the enforcement of the amended Forestry Act), or a forest protection area afforested by a national for at least ten years under Article 7 of the Forest Protection Act, an amount of tax equivalent to 50/100 of individual local income tax, shall be reduced. <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Any person who seeks application of paragraph (1) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 150 (Tax Credit for Third Party Logistics Expense) |
| (1) | Where the third party logistics expense incurred by a national who engages in manufacturing business and satisfies each of the following requirements each taxable year until the taxable year that ends as at December 31, 2018, exceeds the third party logistics expense incurred for the immediately preceding taxable year, the equivalent of 3/1,000 (or 5/1,000 in cases of a small or medium enterprise) of such excess, shall be deducted from individual local income tax (limited to individual local income tax on business income): Provided, That where the amount deducted exceeds 10/100 of the individual local income tax for the pertinent taxable year, 10/100 shall be the limit: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | The third party logistics expense incurred for each taxable year shall be at least 30/100 of the logistics expense incurred for each taxable year; |
| 2. | The ratio of the third party logistics expense to the logistics expense incurred for the pertinent taxable year shall not be lower than the ratio for the immediately preceding taxable year. |
| (2) | Where the third party logistics expense incurred in the relevant taxable year, exceeds 30/100 of the logistics expenses incurred in the relevant taxable year when the third party logistics expense incurred in the immediately preceding taxable year is below 30/100 of the logistics expenses incurred in the immediately preceding taxable year or nonexistent, notwithstanding paragraph (1), the equivalent of 3/1,000 (or 5/1,000 in cases of a small or medium enterprise) of such excess, shall be deducted from individual local income tax (limited to individual local income tax on business income): Provided, That where the amount deducted exceeds 10/100 of individual local income tax for the relevant taxable year, 10/100 shall be the limit. <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | A national who seeks application of paragraph (1) or (2) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 151 (Tax Credit on Aligned Educational Expenses, etc. for Universities or Colleges) |
| (1) | Where a school prescribed in Article 2 of the Higher Education Act (hereafter in this Article, referred to as "university or college"), establishes and operates a school prescribed by Presidential Decree as a school that provides industrial education or where a high school, etc. aligned to industry demand establishes and operates a vocational education and training curriculum or department according to a contract with a national pursuant to Article 8 of the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act, and the relevant national pays expenses (hereafter in this Article, referred to as "aligned educational expenses") as its operating expenses by December 31, 2019, Article 102 shall appl“ mutatis mutandis. In such cases, "general research and human resources development expenses" shall be construe” as "aligned educational expenses." <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | Where a national contributes to a university, college, or high school, etc. aligned to industry demand, the facilities for research and human resources development prescribed by Presidential Decree by December 31, 2019, Article 103 shall apply mutatis mutandis. <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | For the purposes of paragraphs (1) and (2), where a national pays or contributes to a university or college located in the Seoul Metropolitan area, he/she shall be deemed to have paid or contributed 5/100 of the relevant amount. |
| (4) | Where a national who has entered into a prior employment contract, etc. prescribed by Presidential Decree with a high school, etc. aligned to industry demand, conducts vocational education and training to enrolled students in the relevant high school, etc. aligned to industry demand, and pays them expenses prescribed by Presidential Decree, such as field training allowances (hereafter in this Article, referred to as "field training allowances, etc.") by December 31, 2019, Article 102 shall appl“ mutatis mutandis. In such cases, "general research and human development expenses" shall be construed ”s "field training allowances, etc." <Amended by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 152 (Tax Reduction or Exemption for Overseas Korean Enterprises on their Return to Korea) |
| (1) | Where a person prescribed by Presidential Decree, including Korean nationals, falls under any of the following cases and commences business or establishes a new place of business in the Republic of Korea (excluding the Seoul Metropolitan area; hereafter in this Article, the same shall apply) by not later than December 31, 2018, the individual local income tax shall be reduced or exempted pursuant to paragraph (2) or (3): <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Where he/she relocates his/her place of business operated overseas for at least two years, to the Republic of Korea, as prescribed by Presidential Decree; |
| 2. | Where he/she is a small or medium enterprise that returns to the Republic of Korea, partially downsizing or maintaining his/her place of business operated overseas for at least two years, or a middle-standing enterprise prescribed by Presidential Decree with no place of business in the Republic of Korea (including an enterprise with a place of business in the Republic of Korea, in cases of partial downsizing prescribed by Presidential Decree, such as reducing output). |
| (2) | In cases falling under paragraph (1) 1, an amount of tax equivalent to 100/100 of the individual local income tax on the income to be accrued in the place of business after such relocation, shall be exempted in the taxable year in which the first income accrues from the relevant place of business from the date of relocation (where no income accrues until the taxable year falling on the fifth anniversary from the date of relocation, the taxable year falling on the fifth anniversary from the date of relocation) and also within the four subsequent taxable years for the date the following taxable year commences; and an amount of tax equivalent to 50/100 of the individual local income tax on the income, shall be reduced within the two subsequent taxable years thereafter. <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | In cases falling under paragraph (1) 2, an amount of tax equivalent to 100/100 of the individual local income tax on the income to be accrued in the place of business after so returning, shall be exempted in the taxable year in which the first income accrues from the relevant place of business after the date of return (where no income accrues until the taxable year falling on the fifth anniversary from the date of return, the taxable year falling on the fifth anniversary from the date of return) and also within the two subsequent taxable years for the date the following taxable year commences; and an amount of tax equivalent to 50/100 of the individual local income tax on the income, shall be reduced within the two subsequent taxable years thereafter. <Amended by Act No. 14477, Dec. 27, 2016> |
| (4) | Where a national granted a reduction or exemption of individual local income tax under paragraph (1), falls under any of the following cases, he/she shall pay the amount of tax calculated as prescribed by Presidential Decree, as individual local income tax, when filing a tax return for the taxable year in which such ground arises: |
| 1. | Where he/she closes his/her business or dissolves the corporation within three years from the date the business is commenced by relocating or returning the overseas place of business to the Republic of Korea: Provided, That this shall not apply to the cases of merger, split-off, or merger after split-off; |
| 2. | Where he/she fails to commence a business by relocating or returning the overseas place of business to the Republic of Korea, as prescribed by Presidential Decree. |
| (5) | Article 122 (4) shall apply mutatis mutandis to an additional amount equivalent to interest when paying the amount of individual local income tax reduced or exempted under paragraph (1) pursuant to paragraph (4). |
| (6) | For the purposes of paragraphs (1) through (5), matters concerning the application for reduction or exemption of an amount of tax, and other necessary matters, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 153 (Reduction or Exemption of Individual Local Income Tax, etc. for Foreign Investment) |
| (2) | The reduction or exemption of individual local income tax for a foreign-capital-invested company defined in Article 2 (1) 6 of the Foreign Investment Promotion Act (hereafter in this Article, referred to a” "foreign-capital-invested company"), shall be granted only to income derived by operating a business eligible for reduction or exemption under paragraph (1) (income eligible for reduction or exemption of business referred to in Article 121-2 (1) 1 of the Restriction of Special Taxation Act, shall be prescribed by Presidential Decree); and the period of reduction or exemption and the amount of tax eligible for reduction or deduction, shall be as follows. In such cases, when calculating the amount of tax eligible for reduction or deduction, where the foreign-capital-invested company merges with a domestic corporation (excluding a foreign-capital-invested company which is in the period of reduction or exemption) during the period of reduction or exemption, and thereby the foreign investment ratio (referring to a foreign investment ratio calculated as prescribed by Presidential Decree, based upon the types, etc. of stocks issued by the foreign-capital-invested company; hereafter in this Chapter, the same shall apply) in the relevant merged corporation is decreased, the foreign investment ratio of the foreign-capital-invested company before it is merged, shall apply: <Amended on Dec. 27, 2016> |
| 1. | Income derived from a business eligible for reduction or exemption under Article 121-2 (1) 1 and 2 of the Restriction of Special Taxation Act, shall be entitled to the reduction of the whole amount calculated by multiplying the equivalent of individual local income tax on such business income (referring to the amount calculated by multiplying the aggregate of the amount of tax calculated, by a percentage of the gross tax base which is represented by such income derived by operating the business referred to in the subparagraphs of paragraph (1)), by the ratio of foreign investment (hereafter in this paragraph and paragraph (8), referred to as "”mount of tax entitled to reduction") for the taxable years ending within five years from the commencement date of the taxable year in which the first income accrues from such business after such business commences (when no income accrues from the relevant business until the taxable year falling on the fifth anniversary from the date such business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the amount of tax entitled to reduction, shall be reduced for the two subsequent taxable years thereafter, respectively; |
| 2. | Income derived from a business eligible for reduction or exemption under Article 121-2 (1) 2-2 through 2-9 and 3 of the Restriction of Special Taxation Act, shall be entitled to the reduction of the whole amount of the amount of tax entitled to reduction for the taxable years ending within three years from the commencement date of the taxable year in which the first income accrues from such business after the date such business commences (when no income accrues from the relevant business until the taxable year falling on the fifth anniversary from the date such business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the amount of tax entitled to reduction or exemption, shall be reduced for the two subsequent taxable years thereafter, respectively. |
| (3) | Any foreign-capital-invested company that intends to be entitled to tax reduction or exemption under paragraph (2) or (8), shall apply for tax reduction or exemption, to the head of the relevant local government, by no later than the closing date of the taxable year in which the business of relevant foreign-capital-invested company commences; and where any amendment has been made to business details for which the decision on the reduction or exemption of individual local income tax is made under paragraph (4), if it intends to have any reduction or exemption applied to the amended business, it shall apply for amendment to details of tax reduction or exemption, to the head of the relevant local government, by no later than the second anniversary from the date a ground for the relevant amendment arises; and where a decision on amendment to details of tax reduction or exemption is made thereon, the details of relevant decision on amendment shall apply only to the remainder of the original reduction or exemption period: Provided, That a person who has applied for reduction or exemption to the Minister of Economy and Finance under Article 121-2 of the Restriction of Special Taxation Act, shall be deemed to have applied therefor, to the head of the relevant local government. |
| (4) | Upon receipt of an application for reduction or exemption or for amendment to details of reduction or exemption of individual local income tax under paragraph (3), the head of a local government shall decide on whether the amount of tax can be reduced or exempted, the details of reduction or exemption can be amended, or the business can be entitled to the tax reduction or exemption in consultation with the head of the related central government agency, and shall notify the applicant thereof, accordingly: Provided, That the same shall not apply where a person has applied for reduction or exemption, to the Minister of Economy and Finance under the proviso to paragraph (3). <Amended on Dec. 27, 2016> |
| (6) | Where a foreign-capital-invested company obtains a decision on reduction or exemption under paragraph (4) by applying for reduction or exemption after an expiry of the deadline for application for reduction or exemption under paragraph (3), paragraphs (1), (2), and (8) shall apply only to the taxable year in which the date of such application falls, and to the remainder of a reduction or exemption period thereafter. In such cases, where any amount of tax has already been paid by the foreign-capital-invested company prior to a decision on reduction or exemption under paragraph (4), the relevant amount of tax shall not be refunded. |
| (7) | For the purposes of this Article, in any of the following foreign investment, the equivalent of the holding ratio (where the holding ratio is less than 5/100, it shall be deemed 5/100) of stocks or equity shares (hereafter in this Chapter, referred to as "stocks, etc.") calculated as prescribed by Presidential Decree, the equivalent of the loan, or an amount invested by a foreigner, shall not be deemed eligible for tax reduction or exemption: <Amended on Dec. 27, 2016; Dec. 22, 2020> |
| 1. | Where a foreign corporation or foreign enterprise (hereafter in this paragraph, referred to as "foreign corporation, etc.") makes a foreign investment and falls under any of the following cases: |
| (a) | Where a Korean national (excluding a person permanently residing overseas who has obtained a permanent residency or similar sojourn permit corresponding to the permanent residency in his/her domicile) or a Korean corporation (hereafter in this paragraph, referred to as "Korean national, etc."), holds directly or indirectly at least 5/100 of the voting stocks, etc. of the relevant foreign corporation, etc.; |
| (b) | Where a Koran national, etc. is the stockholder who has appointed the representative director or a majority of directors of the relevant foreign corporation, etc. unilaterally or pursuant to an agreement, contract, etc. with other stockholders; |
| (a) | A foreign-capital-invested company; |
| (b) | A Korean national, etc. directly or indirectly holding at least 5/100 of the voting stocks, etc. of the foreign-capital-invested company; |
| (c) | A Korean national, etc. who is the stockholder who has appointed the representative director or a majority of directors of the foreign-capital-invested company unilaterally or pursuant to an agreement, contract, etc. with other stockholders; |
| 3. | Where a foreigner makes a foreign investment through a state or region prescribed by Presidential Decree among the states or regions that have not concluded tax treaties defined in Article 2 (1) 7 of the Adjustment of International Taxes Act or investment guarantee agreements with the Republic of Korea. |
| (8) | With respect to foreign investment falling under a method prescribed by Presidential Decree, such as acquisition of business, among the foreign investment in the business prescribed in Article 121-2 (1) 1 of the Restriction of Special Taxation Act, notwithstanding the period of reduction or exemption and the rate of reduction or exemption prescribed in paragraph (2), the reduction or exemption of individual local income tax for a foreign-capital-invested company shall be granted only to the income accruing from operating a business entitled to reduction or exemption under Article 121-2 (1) 1 of the same Act, but 50/100 of the amount of tax entitled to the reduction or exemption for the taxable year ending within three years from the commencement date of the taxable year in which the first income accrues from such business (when no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date such business commences, the taxable year falling on the fifth anniversary); and 30/100 of the amount of tax entitled to the reduction or exemption shall be reduced for the two subsequent taxable years thereafter, respectively. <Amended on Dec. 27, 2016> |
| (9) | Where the initial investment (including capital increase) is not made by the third anniversary from the date the first notice concerning the decision on the reduction or exemption of individual local income tax is served after reporting the foreign investment, the effect of the decision on the reduction or exemption of individual local income tax provided for in paragraph (4), shall be invalid; and where the initial investment is made within three years from the date the first notice concerning the decision on the reduction or exemption of individual local income tax is served, but it fails to commence business by the fifth anniversary from the date the first notice concerning the decision on the reduction or exemption of tax is served, paragraphs (2), (8), and (15) of this Article shall apply, deeming the business to have commenced on the fifth anniversary from the date the first notice concerning the decision on the reduction or exemption of tax is served. <Amended on Dec. 27, 2016> |
| (10) | Where the sum of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) or (8) applies, exceeds the aggregate of the following amounts, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling") shall be such aggregate: <Amended on Mar. 24, 2014; Dec. 27, 2016> |
| 1. | A ceiling based on the investment of an amount classified as follows: |
| 2. | The aggregate of the following amounts based on employment: Provided, That the equivalent of 20/100 of the cumulative foreign investments shall be the ceiling; however, in cases falling under Article 121-2 (1) 1 or 2 the Restriction of Special Taxation Act, the equivalent of 40/100 of the cumulative foreign investments shall be the ceiling; and in cases falling under paragraph (1) 2-2 through 2-9, or 3, or (12) 1 of the same Article, the equivalent of 30/100 of the cumulative foreign investments shall be the ceiling: |
| (a) | Number of graduates from high schools, etc. aligned to industry demand among workers at ordinary times at the relevant foreign-capital-invested company in the relevant taxable year × two million won; |
| (b) | Number of youth workers, workers with disabilities, and workers aged at least 60 among workers at ordinary times at the relevant foreign-capital-invested company other than those referred to in item (a) in the relevant taxable year x 1.5 million won; |
| (c) | (Number of workers at ordinary times in the relevant taxable year - number of graduates referred to in item (a) - number of youth workers, workers with disabilities, and workers aged at least 60 referred to in item (b) x one million won. |
| (11) | When applying the reduction or exemption ceiling to individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (2) or (8), an amount prescribed in paragraph (10) 1 shall be first applied and then an amount prescribed in paragraph (10) 2 shall be applied. |
| (12) | Where the number of workers at ordinary times each taxable year during the period from the end of the taxable year in which a tax reduction or exemption of individual local income tax was granted until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, a foreign-capital-invested company granted a reduction or exemption of its individual local income tax under paragraph (10) 2, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. |
| (13) | For the purposes of paragraphs (10) and (12), the scope of workers at ordinary times; method for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (14) | Where a foreign-capital-invested company keeps separate accounts of the business referred to in Article 121-2 (1) 1 of the Act on Restriction on Special Cases concerning Taxation and business other than that referred to in the same Article 121-2 (1) 1 among business referred to in subparagraphs of Article 121-2 (1) of the same Act at the same place of business, by applying mutatis mutandis Article 143 of the same Act, the reduction or exemption prescribed in paragraph (2) of this Article, shall apply to each of such business: Provided, That the period of reduction or exemption for each business shall be reckoned from the commencement date of the taxable year in which the first income entitled to reduction or exemption accrues at the relevant place of business (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the relevant business commences, the taxable year falling on the fifth anniversary). <Newly Inserted on Dec. 27, 2016> |
| (15) | Where the total of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) or (8) applies, exceeds 10/100 of the aggregate of amounts prescribed in subparagraphs of Article 121-2 (14) of the Restriction of Special Taxation Act, individual local income tax shall be reduced by up to 10/100 of such aggregate (hereafter in this Article, referred to as "reduction ceiling"); and the application of the reduction ceiling shall be subject to paragraphs (15) through (17) of the same Article. <Newly Inserted on Dec. 27, 2016> |
| (16) | When a tax return is filed for the taxable year in which a ground falling under any subparagraph of Article 121-5 (1) of the Act on Restriction on Special Cases concerning Taxation arises, a foreign-capital-invested company granted a reduction of or exemption of individual local income tax under paragraph (2) or (8), shall pay as individual local income tax, an amount calculated by adding an additional charge equivalent to interest calculated as prescribed by Presidential Decree to the amount of tax calculated as prescribed by Presidential Decree; and such amount of tax shall be deemed the amount of tax payable pursuant to Article 95 of the Local Tax Act. |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 154 (Reduction or Exemption of Individual Local Income Tax for Enterprises that Occupy Jeju Science Park) |
| (1) | Where enterprises that occupy the Jeju Science Park designated under Article 161 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City (hereafter in this Chapter, referred to as the "Jeju Science Park") by December 31, 2018, operate business prescribed by Presidential Decree, such as biotech industry or information and communications industry (hereafter in this Article, referred to as "business entitled to tax reduction or exemption"), regarding the income accruing from the business entitled to tax reduction or exemption, an amount of tax equivalent to 100/100 of the individual local income tax for the three taxable years from the commencement date of the taxable year in which the first income accrues from the relevant business after the date the relevant business commences (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the relevant business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the individual local income tax for the two subsequent taxable years thereafter, shall be reduced or exempted. <Amended by Act No. 13426, Jul. 24, 2015; Act No. 14477, Dec. 27, 2016> |
| (2) | Where the sum of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (1) applies, exceeds the aggregate of the amounts prescribed in subparagraphs 1 and 2, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling"), shall be such aggregate: Provided, That where the enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business"); and where the sum of the individual local income tax reduced or exempted for income accruing from the relevant service business during the period of reduction or exemption to which paragraph (1) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business in the Jeju Science Park in the relevant taxable year (hereafter in this Article, referred to as "places of business entitled to tax reduction or exemption") x one million won; |
| (b) | 2/100 of the cumulative investments prescribed in subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business entitled to tax reduction or exemption, in the relevant taxable year x two million won; |
| (b) | 10/100 of the cumulative investments prescribed in subparagraph 1. |
| (3) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (1), an amount prescribed in paragraph (2) 1 shall be first applied and then an amount prescribed in paragraph (2) 2 shall be applied. |
| (4) | Where the number of workers at ordinary times each taxable year at the place of business entitled to a reduction or exemption of the individual local income tax during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, an enterprise granted a reduction or exemption of individual local income tax under paragraph (2) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (5) | For the purposes of paragraphs (2) and (4), the scope of workers at ordinary times; method for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (6) | Any person who seeks application of paragraph (1) shall apply for reduction or exemption, as prescribed by Presidential Decree. |
| (7) | An enterprise to which the reduction or exemption ceiling for service business applies pursuant to paragraph (2), shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 155 (Reduction or Exemption of Individual Local Income Tax for Enterprises that Occupy Jeju Investment Promotion Zone or Jeju Free Trade Zone) |
| (1) | With respect to investment that meets the standards prescribed by Presidential Decree as investment to conduct any of the following businesses (hereafter in this Article, referred to as "business entitled to tax reduction or exemption"), individual local income tax shall be reduced or exempted pursuant to paragraphs (2) through (6): <Amended by Act No. 13426, Jul. 24, 2015; Act No. 14477, Dec. 27, 2016> |
| 2. | Business conducted at a place of business in the relevant area by enterprises that occupy the Free Trade Zone designated in Jeju Special Self-Governing Province pursuant to Article 4 of the Act on Designation and Management of Free Trade Zones (hereafter in this Chapter, referred to as the "Jeju Free Trade Zone"), by no later than December 31, 2018; |
| 3. | Development projects collectively planned, financed, designed, constructed, marketed, leased, sold in lots, etc. by the development project entity of the Jeju Investment Promotion Zone to develop the Jeju Investment Promotion Zone. |
| (2) | With respect to income accruing from business entitled to tax reduction or exemption falling under any subparagraph of paragraph (1), in the three subsequent taxable years from the commencement date of the taxable year (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the business commences, the taxable year falling on the fifth anniversary) in which the first income accrues from the relevant business entitled to tax reduction or exemption after the date the relevant business commences, in cases falling under paragraph (1) 1 and 2, an amount of tax equivalent to 100/100 of the individual local income tax, and in cases falling under paragraph (1) 3, an amount of tax equivalent to 50/100 of the individual local income tax, shall be reduced or exempted, respectively; and in the two subsequent taxable years thereafter, in cases falling under paragraph (1) 1 and 2, an amount of tax equivalent to 50/100 of the individual local income tax, and in cases falling under paragraph (1) 3, an amount of tax equivalent to 25/100 of the individual local income tax, shall be reduced or exempted, respectively. |
| (3) | Where the sum of the individual income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) applies, exceeds the aggregate of the amounts prescribed in subparagraphs 1 and 2, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling"), shall be such aggregate: Provided, That where the enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business"); and where the sum of the individual local income tax reduced or exempted for income accruing from the relevant service business during the period of reduction or exemption to which paragraph (2) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at a place of business under any subparagraph of paragraph (1) in the relevant taxable year (hereafter in this Article, referred to as "place of business entitled to tax reduction or exemption") x one million won; |
| (b) | 2/100 of the cumulative investments prescribed in subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business entitled to tax reduction or exemption, in the relevant taxable year x two million won; |
| (b) | 10/100 of the cumulative investments prescribed in subparagraph 1. |
| (4) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (2), an amount prescribed in paragraph (3) 1 shall be first applied and then an amount prescribed in paragraph (3) 2 shall be applied. |
| (5) | Where the number of workers at ordinary times each taxable year at the place of business entitled to a reduction or exemption of individual local income tax during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, an enterprise granted a reduction or exemption of individual local income tax under paragraph (3) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (3) and (5), the scope of workers at ordinary times; method for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (7) | Any person who seeks application of paragraph (2) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
| (8) | An enterprise to which the reduction or exemption ceiling for service business applies pursuant to the proviso to paragraph (3), shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
| (9) | Where any ground provided for in the subparagraphs of Article 121-12 (1) of the Restriction of Special Taxation Act, arises to a company that occupies the Jeju Investment Promotion Zone or Jeju Free Trade Zone, the reduced or exempted portion of individual local income tax for such company that occupies the Jeju Investment Promotion Zone or Jeju Free Trade Zone, shall be collected as a penalty, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 156 (Reduction or Exemption of Individual Local Income Tax for Start-Up Enterprises, etc. Located in Enterprise City Development Zones, etc.) |
| (1) | Individual local income tax shall be reduced or exempted for the investment made to operate any of the following businesses (hereafter in this Article, referred to as "business entitled to tax reduction or exemption") and for which the type of the business and the amount of the investment meet the standards prescribed by Presidential Decree pursuant to paragraphs (2) through (8): <Amended by Act No. 12506, Mar. 24, 2014; Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| 1. | Business operated in a place of business by an enterprise which commences business or establishes a place of business (excluding where an existing place of business is relocated) in an enterprise city development zone by no later than December 31, 2018; |
| (2) | With respect to income accruing from business entitled to tax reduction or exemption of an enterprise falling under paragraph (1), an amount of tax equivalent to 100/100 of the individual local income tax in cases falling under paragraph (1) 1, 3, and 5, and an amount of tax equivalent to 50/100 of the individual local income tax in cases falling under paragraph (1) 2, 4, 6, and 7, shall be reduced or exempted for the three subsequent taxable years from the commencement date of the taxable year in which the first income accrues from the relevant business entitled to tax reduction or exemption after commencing business (when no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the individual local income tax in cases falling under paragraph (1) 1, 3, and 5, and an amount of tax equivalent to 25/100 of the individual local income tax in cases falling under paragraph (1) 2, 4, 6, and 7, shall be reduced or exempted for the two subsequent taxable years thereafter, respectively. <Amended by Act No. 14477, Dec. 27, 2016> |
| (3) | Where the sum of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) applies, exceeds the aggregate of the amounts prescribed in subparagraphs 1 and 2, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling"), shall be such aggregate: Provided, That where an enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business"); and where the sum of the individual local income tax reduced or exempted for income accruing from the relevant service business during the period of reduction or exemption to which paragraph (2) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at a place of business where business falling under any subparagraph of paragraph (1) is operated in the relevant taxable year (hereafter in this Article, referred to as "place of business entitled to tax reduction or exemption") x one million won; |
| (b) | 2/100 of the cumulative investments prescribed in subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business entitled to tax reduction or exemption, in the relevant taxable year x two million won; |
| (b) | 10/100 of the cumulative investments prescribed in subparagraph 1. |
| (4) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (2), an amount prescribed in paragraph (3) 1 shall be first applied and then an amount prescribed in paragraph (3) 2 shall be applied. |
| (5) | Where the number of workers at ordinary times each taxable year at a place of business entitled to a reduction or exemption during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, an enterprise granted a reduction or exemption of individual local income tax under paragraph (3) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (3) and (5), the scope of workers at ordinary times; methods for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (7) | For the purposes of paragraphs (1) through (6), Article 100 (6) shall apply mutatis mutandis to the scope of business startup. |
| (8) | Any person who seeks application of paragraph (2) shall apply for tax reduction or exemption, as prescribed by Presidential Decree. |
| (9) | An enterprise to which the reduction or exemption ceiling for service business applies pursuant to the proviso to paragraph (3), shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
| (10) | Where any start-up enterprise, etc. located in an enterprise city development zone, etc. the individual local income tax of which has been reduced or exempted pursuant to paragraph (2) or (3), falls under any subparagraph of Article 121-19 (1) of the Restriction of Special Taxation Act, the reduced or exempted portion of individual local income tax shall be collected as a penalty; and where it falls under Article 121-19 (1) 3 of the same Act, paragraph (2) shall not apply for the relevant taxable year and the remaining period of reduction or exemption. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 157 (Reduction or Exemption, etc. of Individual Local Income Tax for Enterprises that Occupy Investment Promotion Zone for Asian Cultural Hub City) |
| (1) | Where an enterprise that occupies an investment promotion zone designated under Article 16 of the Special Act on the Development of Asian Cultural Hub City, by no later than December 31, 2018, makes an investment, the category of business and amount invested of which meet the standards prescribed by Presidential Decree, to conduct business in such investment promotion zone, individual local income tax on such investment shall be reduced or exempted pursuant to paragraphs (2) through (6). <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | For income accruing from business entitled to a tax reduction or exemption under paragraph (1), an amount of tax equivalent to 100/100 of the individual local income tax for the three subsequent taxable years from the commencement date of the taxable year in which the first income accrues from the relevant business entitled to a tax reduction or exemption after the date the relevant business commences (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the relevant business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the individual local income tax for the two subsequent taxable years thereafter, shall be reduced or exempted. |
| (3) | Where the sum of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) applies, exceeds the aggregate of the amounts prescribed in subparagraphs 1 and 2, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling"), shall be such aggregate: Provided, That where an enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business"); and where the sum of the individual local income tax reduced or exempted for income accruing from the relevant service business during the period of reduction or exemption to which paragraph (2) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at a place of business within an investment promotion zone under paragraph (1), in the relevant taxable year (hereafter in this Article, referred to as "place of business entitled to tax reduction or exemption") x one million won; |
| (b) | 2/100 of the cumulative investments prescribed in subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business entitled to tax reduction or exemption, in the relevant taxable year x two million won; |
| (b) | 10/100 of the cumulative investments prescribed in subparagraph 1. |
| (4) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (2), an amount prescribed in paragraph (3) 1 shall be first applied and then an amount prescribed in paragraph (3) 2 shall be applied. |
| (5) | Where the number of workers at ordinary times each taxable year, at a place of business entitled to a reduction or exemption during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, an enterprise granted a reduction or exemption of individual local income tax under paragraph (3) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (3) and (5), the scope of workers at ordinary times; method for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (7) | Where no investment satisfying the standards for the reduction or exemption of individual local income tax referred to in paragraph (1), is made within two years from the end of the taxable year in which the first income accrues from the relevant business entitled to tax reduction or exemption (where no income accrues from the relevant business by the taxable year falling on the third anniversary from the date the relevant business commences, the taxable year falling on the third anniversary), the head of the competent local government shall collect as a penalty, the reduced or exempted portion of individual local income tax under paragraphs (1) through (6), as prescribed by Presidential Decree. |
| (8) | In cases falling under paragraph (7), paragraph (2) shall not apply to the relevant taxable year and the remaining period of reduction or exemption. |
| (9) | Any person who seeks reduction or exemption of individual local income tax under paragraph (2), shall apply therefor, as prescribed by Presidential Decree. |
| (10) | An enterprise to which the reduction or exemption ceiling for service business applies pursuant to the proviso to paragraph (3), shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 158 (Reduction or Exemption of Individual Local Income Tax for Enterprises, etc. Incorporated in Financial Hubs) |
| (1) | Where an enterprise is incorporated or a place of business is established (excluding where an existing place of business is relocated) in a financial hub (excluding financial hubs located in the overconcentration control district of the Seoul Metropolitan area) designated under Article 5 (5) of the Act on the Creation and Development of Financial Hubs by no later than December 31, 2018, and operates finance business or insurance business meeting the requirements prescribed by Presidential Decree (hereafter in this Article, referred to as "business entitled to tax reduction or exemption") in a place of business located in such zone (hereafter in this Article, referred to as "place of business entitled to tax reduction or exemption"), individual local income tax shall be reduced or exempted pursuant to paragraphs (2) through (6). <Amended by Act No. 14477, Dec. 27, 2016> |
| (2) | For income accruing from business entitled to a reduction or exemption in a place of business located in the zone of financial hub under paragraph (1), an amount of tax equivalent to 100/100 of the individual local income tax for the three subsequent taxable years from the commencement date of the taxable year in which the first income accrues from the relevant business entitled to tax reduction or exemption after the date the relevant business commences (where no income accrues from the relevant business by the taxable year falling on the fifth anniversary from the date the relevant business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the individual local income tax for the two subsequent taxable years thereafter, shall be reduced or exempted. |
| (3) | Where the sum of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) applies, exceeds the aggregate of the following amounts, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling"), shall be such aggregate: Provided, That where an enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business"); and where the sum of the individual local income tax reduced or exempted for income accruing from the relevant service business during the period of reduction or exemption to which paragraph (2) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at a place of business entitled to reduction or exemption, in the relevant taxable year x one million won; |
| (b) | 2/100 of the cumulative investments prescribed in subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business entitled to tax reduction or exemption, in the relevant taxable year x two million won; |
| (b) | 10/100 of the cumulative investments prescribed in subparagraph 1. |
| (4) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (2), the amount prescribed in paragraph (3) 1 shall be applied first and then the amount prescribed in paragraph (3) 2 shall be applied. |
| (5) | Where the number of workers at ordinary times each taxable year, at a place of business entitled to a reduction or exemption of individual local income tax during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the second anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, an enterprise granted a reduction or exemption of individual local income tax under paragraph (3) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (3) and (5), the scope of workers at ordinary times; method for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (7) | Where no investment satisfying the standards for tax reduction or exemption referred to in paragraph (1), is made within two years from the end of the taxable year in which the first income accrues from the relevant business entitled to tax reduction or exemption (where no income accrues from the relevant business by the taxable year falling on the third anniversary from the date the relevant business commences, the taxable year falling on the third anniversary), the head of the competent local government shall collect as a penalty, the reduced or exempted portion of individual local income tax under paragraphs (1) through (6), as prescribed by Presidential Decree. |
| (8) | In cases falling under paragraph (7), paragraph (2) shall not apply to the relevant taxable year and the remaining period of reduction or exemption. |
| (9) | Any person who seeks reduction or exemption of individual local income tax under paragraph (2), shall apply therefor, as prescribed by Presidential Decree. |
| (10) | An enterprise to which the reduction or exemption ceiling for service business applies pursuant to the proviso to paragraph (3), shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 159 (Reduction or Exemption of Individual Local Income Tax for Enterprises that Occupy High-Tech Medical Complexes) |
| (1) | Where an enterprise that occupies a high-tech medical complex designated under Article 6 of the Special Act on the Promotion of High-Tech Medical Complexes until December 31, 2019, conducts business prescribed by Presidential Decree, such as health and medical technology business (hereafter in this Article, referred to as "business entitled to reduction or exemption"), at a place of business located at such high-tech medical complex (hereafter in this Article, referred to as "place of business entitled to reduction or exemption"), the individual local income tax shall be reduced or exempted pursuant to paragraphs (2) through (6). <Amended by Act No. 14477, Dec. 27, 2016; Act No. 16407, Apr. 30, 2019> |
| (2) | For income accruing from business entitled to reduction or exemption operated at a place of business entitled to reduction or exemption referred to in paragraph (1), an amount of tax equivalent to 100/100 of the individual local income tax for the three subsequent taxable years from the commencement date of the taxable year in which the first income accrues from the relevant business entitled to tax reduction or exemption after the date the relevant business commences (where no income accrues from the relevant business until the taxable year falling on the fifth anniversary from the date the relevant business commences, the taxable year falling on the fifth anniversary); and an amount of tax equivalent to 50/100 of the individual local income tax for the two subsequent taxable years thereafter, shall be reduced or exempted. |
| (3) | Where the sum of the individual local income tax reduced or exempted during the period of reduction or exemption to which paragraph (2) applies, exceeds the aggregate of the amounts prescribed in subparagraphs 1 and 2, the ceiling on the tax reduction or exemption (hereafter in this Article, referred to as "reduction or exemption ceiling"), shall be such aggregate: Provided, That where an enterprise operates a service business prescribed by Presidential Decree (hereafter in this Article, referred to as "service business"); and where the sum of the individual local income tax reduced or exempted for income accruing from the relevant service business during the period of reduction or exemption to which paragraph (2) applies, exceeds the greater of the aggregate of the amounts prescribed in subparagraphs 1 and 2, and of the amount prescribed in subparagraph 3, the amount of tax may be reduced or exempted by up to such greater amount: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | 5/100 of the cumulative investments prescribed by Presidential Decree; |
| 2. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at a place of business entitled to reduction or exemption, in the relevant taxable year x one million won; |
| (b) | 2/100 of the cumulative investments prescribed in subparagraph 1; |
| 3. | The lesser of the following amounts: |
| (a) | Number of workers at ordinary times at places of business entitled to tax reduction or exemption, in the relevant taxable year x two million won; |
| (b) | 10/100 of the cumulative investments prescribed in subparagraph 1. |
| (4) | When applying the reduction or exemption ceiling to the individual local income tax to be reduced or exempted each taxable year pursuant to paragraph (2), an amount prescribed in paragraph (3) 1 shall be first applied and then an amount prescribed in paragraph (3) 2 shall be applied. |
| (5) | Where the number of workers at ordinary times each taxable year, at a place of business entitled to a reduction or exemption during the period from the end of the taxable year in which the tax reduction or exemption was granted, until the end of the taxable year falling on the third anniversary from the end of the taxable year in which the tax reduction or exemption was granted, has decreased as compared with the number of workers at ordinary times in the taxable year in which the tax reduction or exemption was granted, an enterprise granted a reduction or exemption of individual local income tax under paragraph (3) 2 or 3, shall pay the equivalent of the amount of tax reduced or exempted as individual local income tax, as prescribed by Presidential Decree. <Amended by Act No. 14477, Dec. 27, 2016> |
| (6) | For the purposes of paragraphs (3) and (5), the scope of workers at ordinary times; method for calculating the number of workers at ordinary times; and other necessary matters, shall be prescribed by Presidential Decree. |
| (7) | Any person who seeks reduction or exemption of individual local income tax under paragraph (2), shall apply therefor, as prescribed by Presidential Decree. |
| (8) | An enterprise to which the reduction or exemption ceiling for service business applies pursuant to the proviso to paragraph (3), shall keep separate accounts of service business and other types of business, by applying mutatis mutandis Article 143 of the Restriction of Special Taxation Act. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 160 (Tax Credits for Increased Revenue, etc. of Gold Trading Business Operators and Business Operators of Copper Scrap, etc.) |
| (1) | Where the gross income and deductible expenses settled for or by a gold trading business operator (limited to a business operator who intends to supply or to be supplied with, or intends to import the products prescribed in Article 106-4 (1) 3 of the Restriction of Special Taxation Act) or business operator of copper scrap, etc. respectively under Article 106-4 or 106-9 of the Act on Restriction on Special Cases concerning Taxation through a gold trading account or account for trading copper scrap, etc. referred to in Article 106-4 or 106-9 of the same Act (hereafter in this paragraph, referred to as "gross income an” deductible expenses paid by a purchaser"), are included in the gross income and deductible expenses returned by business place at the time of filing a tax return (hereafter in this paragraph, referred toas "gross income and deductible expenses"), the operator may obtain a tax credit for any of the following amounts from that of individual local income tax for the relevant taxable year until the taxable year ending as at December 31, 2018. In such cases, no tax credit shall exceed the amount calculated by deducting the amount of individual local income tax calculated on global income for the immediately preceding taxable year from the amount of individual local income tax calculated on global income for the relevant taxable year: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | If the aggregate of gross income and deductible expenses paid by the purchaser returned by business place when he/she files a tax return, exceeds the aggregate of gross income and deductible expenses paid by the purchaser for the immediately preceding taxable year: An amount calculated by multiplying the ratio occupied by the equivalent of 50/100 of such excess (which shall not exceed the total of the increased amount of gross income and deductible expenses by business place) in the total amount of gross income and deductible expenses, by the rate of individual local income tax on global income. In such cases, where the purchaser has not paid any amount of gross income and deductible expenses in the immediately preceding taxable year, the aggregate of gross income and deductible expenses for the immediately preceding taxable year, shall be deemed the aggregate of gross income and deductible expenses paid by the purchaser for the immediately preceding taxable year; |
| 2. | An amount calculated by multiplying the ratio occupied by the equivalent of 5/100 of the aggregate of gross income and deductible expenses paid by the purchaser returned by business place when filing a tax return in the aggregate of gross income and deductible expenses, by the amount of individual local income tax calculated on global income. |
| (2) | For the purposes of paragraph (1), matters necessary for calculating the amount of the tax credit, and other necessary matters, shall be prescribed by Presidential Decree. |
| (3) | Any person who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 161 (Tax Credit for Cash Receipt Merchants) |
| (1) | A business operator who has cash receipt-issuing machines connected with credit card terminals, etc. (hereafter in this Article, referred to as "cash receipt merchant") who issues cash receipts under paragraph (2) (limited to cash receipts for less than 5,000 won for each transaction, and referring to cash receipts approved for issuance through the telephone network), shall be entitled to the tax credit equivalent to the amount calculated by multiplying the number of cash receipts issued during the pertinent taxable period by the amount prescribed by Presidential Decree (hereafter in this Article, referred to as "tax credit amount") for the individual local income tax calculated for the pertinent taxable period. In such cases, no tax credit amount shall exceed the amount of tax calculated. |
| (2) | "Cash receipt" in paragraph (1) means receipts which, in cases of cash settlement, a cash receipt merchant issues the person supplied with goods or service by means of cash receipt-issuing machines in exchange for the supply of such goods or service, stating the details of the settlement, such as the date, time, and amount of the trading. |
| (3) | The methods and procedures for granting a tax credit, etc. under paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 162 (Tax Credit for Gold Bullion Traded in Spot Gold Market) |
| (1) | Where a business operator prescribed by Presidential Decree who supplies gold bullion prescribed by Presidential Decree (hereafter in this Article, referred to as "gold bullion") (hereafter in this Article, referred to a” "entrepreneur who supplies gold bullion"), supplies the gold bullion deposited at a safekeeping agency prescribed by Presidential Decree through a spot gold market prescribed by Presidential Decree (hereafter in this Article, referred to as "spot gold market") by not later than December 31, 2015, or where an entrepreneur who has purchased gold bullion in the spot gold market (hereafter in this paragraph, referred to as “entrepreneur who purchases gold bullion"), withdraws the relevant gold bullion from the safekeeping agency by not later than December 31, 2015, regarding the relevant value of supply or amount of purchase (hereafter in this paragraph, referred to as "amount used in the spot gold market": Provided, That if the entrepreneur who supplies gold bullion and the entrepreneur who purchases gold bullion are in special relationship prescribed by Presidential Decree, the relevant amount shall be excluded), an amount selected from any of the following subparagraphs, shall be deducted from individual local income tax (applicable only to individual local income tax on business income; hereafter in this paragraph, the same shall apply) for the taxable year in which the date of supply or purchase (referring to the date goods are supplied under Article 15 of the Value-Added Tax Act), falls: Provided, That if the amount used in the spot gold market during the immediately preceding taxable year is less than the amount used during the year before the immediately preceding taxable year, an amount calculated by applying subparagraph 2, shall be deducted from individual local income tax of the relevant taxable year: <Amended by Act No. 12506, Mar. 24, 2014> |
| 1. | Where the amount used in the spot gold market exceeds the amount used in the spot gold market during the immediately preceding taxable year, an amount calculated by multiplying the amount of individual local income tax calculated on global income, by the ratio of such excess (hereafter in this subparagraph, referred to as "excess of the amount used") to the sales amount of the relevant taxable year: Provided, That where the spot gold market is first utilized while no amount is used in the spot gold market during the immediately preceding taxable year, the amount used in the spot gold market during the relevant taxable year shall be deemed the excess of the amount used; |
| 2. | An amount calculated by multiplying the amount of individual local income tax calculated on global income, by the ratio of the equivalent of 5/100 of the amount used in the spot gold market during the relevant taxable year to the sales amount of the relevant taxable year. |
| (2) | For the purposes of paragraph (1), matters necessary for calculating, etc. the amount of a tax credit, and for applying for a tax credit, shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 163 (Reduction or Exemption of Individual Local Income Tax on Capital Gains) |
[This Article Wholly Amended by Act No. 12955, Dec. 31, 2014]
| Article 164 (Tax Credit for Political Funds) |
With respect to political funds donated by a resident to a political party (including its supporters' association under the Political Funds Act and the election commissions) under the same Act, the equivalent of 10/100 of the tax credit amount prescribed in Article 76 (1) of the Restriction of Special Taxation Act, shall be deducted from the amount of individual local income tax calculated for the relevant taxable year in which they have been disbursed. <Amended by Act No. 12506, Mar. 24, 2014> [This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 165 (Tax Credits for Electronic Commerce of Petroleum Products) |
| (1) | Where any person prescribed by Presidential Decree, such as a petroleum refiner defined in subparagraph 7 of Article 2 of the Petroleum and Alternative Fuel Business Act, supplies or is supplied with petroleum products defined in subparagraph 2 of Article 2 of the Petroleum and Alternative Fuel Business Act, by no later than December 31, 2019, through an electronic payment network prescribed by Presidential Decree, an amount classified as follows shall be deducted from individual local income tax (limited to individual local income tax on business income) in the taxable year in which the date of supply or the date of receiving petroleum products (referring to the date goods are supplied under Article 15 of the Value-Added Tax Act), falls: Provided, That where the deduction exceeds 10/100 of the individual local income tax for the relevant taxable year, such excess shall be deemed nonexistent: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | A person who supplies petroleum products: The equivalent of 1/10,000 of the supply price (referring to the supply price under Article 29 of the Value-Added Tax Act; hereafter in this paragraph, the same shall apply); |
| 2. | A person who is supplied with petroleum products: The equivalent of 2/10,000 of the supply price. |
| (2) | A national who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 166 (Tax Credit for Expenses Incurred in Verifying Faithful Reporting) |
| (1) | For a business operator entitled to a tax credit for expenses incurred in verifying faithful reporting under Article 126-6 of the Restriction of Special Taxation Act, the equivalent of 10/100 of the tax credit amount prescribed in paragraph (1) of the same Act, shall be deducted from individual local income tax for the relevant taxable year; and where an amount deducted under paragraph (2) of the same Act is collected as a penalty, an amount of tax equivalent to the amount deducted from individual local income tax, shall also be collected as a penalty. |
| (2) | Any person who seeks application of paragraph (1) shall apply for a tax credit, as prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 167 (Special Taxation of Corporate Local Income Tax on Association Corporation) |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 167-2 (Tax Credit, or Reduction of or Exemption from Individual Local Income Tax) |
| (1) | Where income tax is deducted, reduced, or exempted under the Income Tax or Act on Restriction on Special Cases concerning Taxation (including tax credits carried forward under Article 144 of the Act on Restriction on Special Cases concerning Taxation, but excluding tax credit under Article 104-8 (1) of that Act)), individual local income tax equivalent to 10/100 of the deducted, reduced, or exempted amount (where any of Articles 127 through 129, 132, and 133 of the Act on Restriction on Special Cases concerning Taxation applies, referring to the amount resulting after applying such provisions) shall be deducted, reduced, or exempted, notwithstanding the provisions of tax credit, reduction, and exemption of individual local income tax prescribed in this Chapter and Article 180 of this Act. <Amended on Dec. 29, 2015; Dec. 28, 2021> |
| (2) | Where income tax is eligible for carried-forward taxation under the Act on Restriction on Special Cases concerning Taxation, notwithstanding the details of carried-forward taxation on individual local income tax prescribed in this Chapter, carried-forward taxation shall apply to individual local income corresponding thereto. <Newly Inserted on Jan. 15, 2020> |
| (3) | Where income tax is paid on grounds for collecting as a penalty, the deducted, reduced or exempted, or carried forward portion of income tax under the Income Tax Act or the Restriction of Special Taxation Act, the deducted, reduced, or exempted, or carried forward portion of individual local income tax pursuant to paragraph (1), shall also be paid. In such cases, where the equivalent of interest is added under the Income Tax Act or the Act on Restriction on Special Cases concerning Taxation to the income tax payable, the equivalent of 10/100 of the added amount shall be added to the individual local income tax. <Amended on Jan. 15, 2020> |
[This Article Newly Inserted on Dec. 31, 2014]
[Title Amended on Jan. 15, 2020]
[In the amended provisions of Article 167-2, paragraphs (1) and (2) of this Article shall apply until December 31, 2023 in accordance with Article 2 of the Addenda to Act No. 12955 (Dec. 31, 2014).]
| Article 167-3 (Tax Credit for Electronic Filing of Individual local Income Tax) |
| (1) | Where a taxpayer files a return on individual local income tax prescribed by Presidential Decree through a method of electronic filing under Article 25 of the Framework Act on Local Taxes (hereafter in this Article, referred to as “electronic filing”), the amount prescribed by Presidential Decree shall be deducted from the amount of tax to be paid. In such cases, if the amount of tax to be paid is negative, such amount shall be deemed zero. |
| (2) | Where the head of a local government having jurisdiction over the place of tax payment sends a statement of payment of individual local income tax on global income pursuant to Article 95 (4) of the Local Tax Act and a taxpayer pays the relevant amount of tax by filing deadline, the amount under paragraph (1) shall be deducted. |
[This Article Newly Inserted on Dec. 28, 2021]
[Previous Article 167-3 moved to Article 167-4 <Dec. 28, 2021>]
| Article 167-4 (Special Cases concerning Collection of Amount of Delinquent individual Local Income Tax from Small Private Enterprises) |
| (1) | The head of a local government may ex officio apply to the resident the following special cases concerning the collection of delinquent taxes (hereafter in this Article, referred to as “special cases concerning collection of delinquent individual local income tax”) on the amount for which the extinctive prescription of authority to collect local taxes has not been completed, out of the amount of delinquent individual local income tax on global income of the resident eligible for the special cases concerning the amount of delinquent global income tax and value-added tax (hereafter in this Article, referred to as “national taxes”) under Article 99-10 of the Act on Restriction on Special Cases concerning Taxation (hereafter in this Article, referred to as “special cases concerning collection of delinquent amount of national taxes”): <Amended on Dec. 28, 2021> |
| 2. | If the installments of the delinquent amount of national taxes are permitted, permission to pay individual local income tax on global income in installments. In such cases, the number of installments and payment period shall be applied in the same manner as the national taxes are collected, and the amount in installments shall be based on the same percentage as the national taxes. |
| (3) | Where the head of a tax office or the commissioner of a regional tax office decides or revokes special cases concerning the collection of delinquent national taxes, he/she shall immediately notify the relevant data to the head of a tax office having jurisdiction over the place for tax payment in the form prescribed by the Minister of the Interior and Safety. |
| (4) | Where the head of a tax office having jurisdiction over the place for tax payment decides special cases concerning the collection of delinquent individual local income tax or revokes such decision, he/she shall immediately give notice prescribed by the Minister of the Interior and Safety to the relevant resident. |
[This Article Newly Inserted on Apr. 20, 2021]
SECTION 12 Restriction, etc. on Special Provisions on Taxation of Local Income Tax
| Article 168 (Elimination of Duplicative Support) |
| (1) | Where any of Articles 99, 103, 109 through 114, 137, and 151 (2), applies to the assets invested by a national prescribed in this Act, the following amounts shall be deducted from the amount so invested or acquired: |
| 1. | Where a national receives contributions or other assets from the State, local governments, public institutions prescribed in the Act on the Management of Public Institutions, or local public enterprises prescribed in the Local Public Enterprises Act (hereafter in this Article, referred to as the "State, etc.") for investing in assets, and invests them: The equivalent of the amount of contribution, etc. invested: |
| 2. | Where a national obtains a loan from a finance company, etc. falling under any item of subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality (hereafter in this Article, referred to as "finance company, etc.") for investing in assets, and invests the loan, and the State, etc. fully or partially pays the interest payable to the finance company, etc. on behalf of the national: The equivalent of the cost of interest paid by the State, etc., calculated as prescribed by Presidential Decree; |
| 3. | Where a national obtains a loan from the State, etc. for investing in assets, and invests it: The equivalent of the amount of subsidy for interest granted by the State, etc., calculated as prescribed by Presidential Decree. |
| (2) | Where Articles 99, 103, 109 through 114, 137, and 151 (2) concurrently apply to the assets invested by a national prescribed in this Act, and Articles 114 and 118 concurrently apply in the same taxable year, he/she may select only one of them as applicable. |
| (3) | For the purposes of Article 99, 103, 109 through 114, 118, 137, 150, or 151 (2) where individual local income tax is reduced or exempted pursuant to Article 153 for any national in the same taxable year, the equivalent of 10/100 of the amount calculated by multiplying the deductible tax under the relevant provisions by the rate of the stocks or stakes owned by a national investor, among the total issued stocks or stakes of the relevant enterprise, shall be deducted. |
| (4) | Where a national is eligible in the same taxable year, both for the reduction or exemption of local income tax prescribed in Articles 100, 101, 105, 122, 124 through 128, 135 (1) and (2), 152 (1), and 154 through 159 and for the deduction of local income tax under Articles 99, 103, 109 through 114, 118, 137, 150, 151, 160, 162, and 165, he/she may select only one such provision as applicable. <Amended by Act No. 12955, Dec. 31, 2014> |
| (5) | Where at least two of the provisions regarding reduction or exemption of local income tax prescribed in Articles 100, 101, 105, 122, 124, 125, 135 (1) and (2), and 152 through 159, apply to the same business place of a national in the same taxable year, he/she may select only one such provision as applicable. |
| (6) | Where at least two provisions for reducing or exempting individual local income tax on capital gains, concurrently apply to a resident's transfer of land, etc., only one provision for reduction or exemption selected by the resident shall apply: Provided, That where part of land, etc. is subject to the application of specific provisions for reduction or exemption, the remaining parts of such land, etc. may be subject to other provisions for reduction or exemption. |
| (7) | A resident who transfers a house to a third person and consequently becomes subject to Articles 142 and 143 of this Act simultaneously, may select one of them as applicable. |
| (8) | For the purposes of paragraphs (3) and (4), if separate accounting is kept between the business entitled to reduction or exemption under Article 143 of the Restriction of Special Taxation Act and any other business, and the provisions on deduction is applied to such other business, the relevant tax reduction or exemption shall not be entitled to duplicative support. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 169 (Exclusion from Reduction or Exemption in Cases of Estimated Taxation, etc.) |
| (1) | Articles 99, 102, 103, 104 (2), 109 through 115, 117, 118, 137, 150, 151, 160, 162, and 165 shall not apply where an amount of tax is estimated pursuant to the proviso to Article 80 (3) of the Income Tax Act: Provided, That even when an amount of tax is estimated, Articles 99 and 114 of this Act (limited to where evidentiary documents for investments are submitted), shall apply only to residents. <Amended by Act No. 12955, Dec. 31, 2014> |
| (2) | No tax reduction or exemption prescribed in Articles 100, 101, 104 (1), 105, 122, 124 through 128, 135 (1) and (2), 138, 149, 152 (1), and 154 through 159, shall apply, where a decision is made pursuant to Article 97 of the Local Tax Act; or where a return is filed after the given period pursuant to Article 51 of the Framework Act on Local Taxes. <Amended by Act No. 14474, Dec. 27, 2016> |
| (3) | Articles 100, 101, 104 (1), 105, 122, 124 through 128, 135 (1) and (2), 138, 149, 152 (1), and 154 through 159 shall not apply to any under-reported amount prescribed by Presidential Decree, where correction (excluding correction due to any cause falling under any subparagraph of paragraph (4)) is made pursuant to Article 97 of the Local Tax Act; and where an amended tax return is filed foreknowing that the tax base and amount of tax filed will be corrected. |
| (4) | No tax reduction or exemption prescribed in Articles 100, 101, 104 (1), 105, 122, 124 through 128, 135 (1) and (2), 149, 152, and 154 through 159, shall apply to the relevant place of business of the relevant taxable period, where a business operator falls under any of the following cases: Provided, That this shall not apply where the business operator has any just ground for failing to fulfill his/her duty prescribed in subparagraph 1 or 2: |
| (a) | Where he/she refuses to transact by a credit card or issues a false credit card sales slip; |
| (b) | Where he/she refuses a request to issue a cash receipt or issues a false cash receipt. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 170 (Exclusion, etc. from Reduction or Exemption of Individual Local Income Tax on Capital Gains) |
| (1) | Where a transaction party who trades any asset referred to in Article 94 (1) 1 or 2 of the Income Tax Act, enters the different transaction price in the transaction contract from the actual transaction price, and thereby the reduction or exemption is restricted pursuant to Article 91 (2) of the same Act, the reduction or exemption of individual local income tax on capital gains shall be restricted; and the equivalent of 10/100 of the amount excluded under the subparagraphs of Article 91 (2) of the same Act, shall be deducted from the unassessed amount, the amount reduced or exempted, or the amount to be reduced or exempted. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 171 (Exclusion from Tax Reduction or Exemption for Investment in Overconcentration Control District of Seoul Metropolitan Area) |
| (1) | With respect to fixed business assets (excluding any digital broadcasting equipment prescribed by Presidential Decree and any information and communications equipment prescribed by Presidential Decree) acquired to use in a place of business located within the overconcentration control district of the Seoul Metropolitan area, which are subject to the enlarged investment prescribed by Presidential Decree, by any national operating his/her business within the overconcentration control district of the Seoul Metropolitan area as at December 31, 1989, and by any small or medium enterprise commencing its business by newly establishing such place of business within the overconcentration control district of the Seoul Metropolitan area or relocating its existing place of place (including the place of business established as at December 31, 1989; hereafter in this Article, the same shall apply) into such district as of January 1, 1990 (hereafter in this paragraph, referred to as "small or medium enterprise, etc. since 1990"), Articles 99 (1) 1 and 2, 103 (2) 3, 109 (1) 1 and 2, and 110 (excluding paragraph (1) 5 and 7 of the same Article, and limited to where any small or medium enterprise, etc. since 1990, has invested), shall not apply: Provided, That this shall not apply where the enlarged investment is made within an industrial complex or industrial area prescribed by Presidential Decree. |
| (2) | Where any person who is not a small or medium enterprise, commences his/her business by newly establishing a place of business within the overconcentration control district of the Seoul Metropolitan area or relocates his/her existing place of business into such district as of January 1, 1990, Articles 103 (2) 3, 109 (1) 1 and 2, and 110 (excluding paragraph (1) 5 and 7 of the same Article), shall not apply to his/her fixed business assets (excluding any digital broadcasting equipment prescribed by Presidential Decree and any information and communications equipment prescribed by Presidential Decree) acquired to use in the relevant place of business located within the overconcentration control district of the Seoul Metropolitan area. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 172 (Exclusion from Reduction of or Exemption from Amount of Tax, etc. Short of Minimum Tax) |
| (1) | In calculating individual local income tax on business income of a resident (including any income accruing from the relevant real estate leasing business only where Article 16 of the Restriction of Special Taxation Act applies; hereafter in this paragraph, the same shall apply) and on business income of a non-resident accruing from his/her domestic place of business (excluding additional tax and the tax collected as a penalty surcharge prescribed by Presidential Decree; referring to individual local income tax to which tax deduction, etc. prescribed by Presidential Decree has not been applied), where the amount of tax after applying any of the following reduction, exemption, etc., falls short of the amount of tax (hereinafter referred to as "minimum amount of individual local income tax") calculated by multiplying the business income (including the amount of reserves under subparagraph 1, which has been included in the gross income pursuant to the related provisions) to which inclusion in the deductible expenses, income deduction, etc. prescribed in Article 132 (2) 1 and 2 of the Restriction of Special Taxation Act have not been applied by 45/100 (or 35/100 for the portion, the calculated amount of tax of which does not exceed three million), no reduction, exemption, etc. shall apply to the portion equivalent to such insufficient amount of tax: <Amended by Act No. 12955, Dec. 31, 2014> |
| 1. | Amount of the tax credit prescribed in Articles 99, 102 (applicable only to a person who is not a small or medium enterprise), 103, 104 (2), 109 through 115, 117, 118, 137, 150, 151, 160, 161, 162, and 165; |
| 2. | Exemption or reduction of individual local income tax prescribed in Articles 100, 101, 104 (1), 105, 108, 122, 124 (excluding where relocated to outside the Seoul Metropolitan area), 125, 138, 149, and 159. |
| (2) | For the purposes of this Act, where reduction, exemption, etc. listed in the subparagraphs of paragraphs (1), and other reduction, exemption, etc. are simultaneously applicable, reduction, exemption, etc. listed in the subparagraphs of paragraphs (1) shall apply preferentially. |
| (3) | Matters necessary for applying the minimum tax under paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 173 (Composite Ceiling on Reduction or Exemption of Individual Local Income Tax on Capital Gains) |
| (1) | Among the aggregate of individual local income tax on capital gains for an individual to be reduced or exempted pursuant to Article 121, 126 through 131, 132, 133, or 136, the greater of the following amounts shall not be reduced or exempted. In such cases, the aggregate of individual local income tax on capital gains reduced or exempted shall be aggregated in order of assets transferred: <Amended by Act No. 12506, Mar. 24, 2014; Act No. 12955, Dec. 31, 2014> |
| 1. | The greater of the following amounts calculated by taxable period: |
| (a) | Where the aggregate of individual local income tax on capital gains to be reduced or exempted pursuant to Article 121, 131, 132 (limited to where the reduction rates of 15/100 and 20/100 apply), 133, or 136, exceeds ten million won by taxable period, the equivalent of the excess; |
| (b) | Where the aggregate of individual local income tax on capital gains to be reduced or exempted pursuant to Article 121, 126 through 131, 132, 133, or 136, exceeds 20 million won by taxable period, the equivalent of the excess; |
| 2. | The greater of the following amounts calculated as the aggregate for five taxable periods. In such cases, the aggregate of individual local income tax on capital gains to be reduced or exempted for five taxable periods, shall be calculated as the aggregate of individual local income tax on capital gains, to be reduced or exempted in the relevant taxable period and the amount of individual local income tax on capital gains reduced or exempted for the preceding four taxable periods: |
| (a) | Where the aggregate of individual local income tax on capital gains to be reduced or exempted pursuant to Article 131, of the five taxable periods, exceeds ten million won, the equivalent of the excess; |
| (b) | Where the aggregate of individual local income tax on capital gains to be reduced or exempted pursuant to Articles 131 and 132 (limited to where the reduction rates of 15/100 and 20/100 are applicable) for the five taxable periods, exceeds 20 million won, the equivalent of the excess; |
| (c) | Where the aggregate of individual local income tax on capital gains to be reduced or exempted pursuant to Articles 126 through 131 and 132 for the five taxable periods, exceeds 30 million won, the equivalent of the excess. |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 174 (Tax Credit Carried-Forward) |
| (1) | Among the amounts of individual local income tax to be deducted pursuant to Articles 99, 102, 103, 104 (2), 109 through 115, 117, 118, 137, 150, 151, 160, 162, 165, and 166, the equivalent of the portions attributable to such events, as no tax amount is payable for the relevant taxable year or as being not deducted because the tax amount falls below the minimum amount of individual local income tax under Article 172, shall be carried forward to each taxable year ending within five years from the date the taxable year following the relevant taxable year commences (or seven years from the date the taxable year following the relevant taxable year commences, in cases of the equivalent of the portions subject to the deduction under Article 99, but unable to be deducted until the taxable year falling on the fifth anniversary from the date of incorporation of the small or medium enterprise; or ten years where the amount of tax subject to deduction under Article 102 is unable to be deducted until the taxable year falling on the fifth anniversary from the date of incorporation of the small or medium enterprise), and shall be deducted from individual local income tax [applicable only to individual local income tax on business income (where Article 126-6 of the Restriction of Special Taxation Act applies, including the income accruing from real estate leasing business under Article 45 (2) of the Income Tax Act)] in each taxable year to which such portions have been carried forward. <Amended by Act No. 12955, Dec. 31, 2014; Act No. 14477, Dec. 27, 2016> |
| (2) | If the amounts to be deducted from individual local income tax for each taxable year, which are deductible under Articles 99, 102, 103, 104 (2), 109 through 115, 117, 118, 137, 150, 151, 160, 162, 165, and 166, and the undeducted amounts carried forward pursuant to paragraph (1), overlap with each other, the undeducted amounts carried forward pursuant to paragraph (1) shall be deducted first, and if any un-deducted amounts carried forward overlap, the deduction shall be made successively in the order they overlap. <Amended by Act No. 12955, Dec. 31, 2014> |
| (3) | Notwithstanding paragraph (1), the undeducted amount for the taxable year during which the relevant investment has been made pursuant to the proviso to Article 114 (1) 2 and the amount paid as individual local income tax under Article 114 (2), shall be carried forward to each taxable year that ends within five years from the commencement date of the taxable year following the taxable year during which the relevant investment is made, and they shall be deducted from individual local income tax (limited to individual local income tax on business income) carried forward for each taxable year within the aggregate calculated in the following order. In such cases, the number of workers ordinarily working in the taxable year subject to deduction carried forward, shall exceed the largest of the number of workers ordinarily working under each item of subparagraph 3: <Amended by Act No. 14477, Dec. 27, 2016> |
| 1. | Number of graduates from high schools, etc. aligned to industry demand among workers ordinarily working who have entered into their first employment contract in the taxable year subject to deduction carried forward x two million won (or 2.5 million won in cases of a small or medium enterprise); |
| 2. | Number of youth workers, workers with disabilities, and workers aged at least 60 among workers ordinarily working, other than those in subparagraph 1 who have entered into their first employment contract in the taxable year subject to deduction carried forward x 1.5 million won (or two million won in cases of a small or medium enterprise); |
| 3. | (Number of the workers ordinarily working in the taxable year subject to deduction carried forward - number of graduates referred to in subparagraph 1 - number of youth workers, workers with disabilities, and workers aged at least 60 referred to in subparagraph 2 - the largest of the following numbers) x one million won (or 1.5 million won in cases of a small or medium enterprise): |
| (a) | Number of workers ordinarily working in the taxable year immediately preceding the taxable year subject to deduction carried forward; |
| (b) | Number of workers ordinarily working in the taxable year immediately preceding the taxable year during which the relevant investment is made using the amount carried forward; |
| (c) | Where the individual local income tax is paid due to decrease of the number of workers ordinarily working under Article 114 (2), the number of workers ordinarily working in the taxable year (where the number of workers ordinarily working decreases for two consecutive taxable years, the second taxable year) during which such number of workers ordinarily working, decreases. |
| (4) | Notwithstanding paragraph (1), an amount paid as individual local income tax pursuant to Article 113-2 (2) shall be carried forward to each taxable year ending within five years from the commencement date of the taxable year following the relevant taxable year in which the relevant investment is made, and shall be deducted from individual local income tax (applicable only to individual local income tax on business income) in each taxable year to which such portions have been carried forward: Provided, That the limit of the amount to be deducted shall be the amount calculated by multiplying the number of workers at ordinary times by one million won. In such cases, the number of workers at ordinary times in the taxable year to which such portions for deduction have been carried forward shall exceed the largest number among the number of workers at ordinary times calculated by applying mutatis mutandis each item of paragraph (3) 3. <Newly Inserted by Act No. 14477, Dec. 27, 2016> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 175 (Additional Collection of Reduced or Exempted Tax Amounts) |
Where any person granted a deduction of individual local income tax prescribed in Article 99, 103, 109 through 114, or 137, has disposed of the relevant assets (including cases of lease, and excluding cases prescribed by Presidential Decree) prior to the date two years (or five years, in cases of buildings, facilities, etc. prescribed by Presidential Decree) elapse from the date the investment is completed under the same Article, he/she shall pay the individual local income tax, adding the additional amount equivalent to the interest calculated as prescribed by Presidential Decree, to the equivalent of the amount of tax deducted on the relevant assets, when filing a tax return for the taxable year in which the relevant assets are disposed of, and the relevant amount of tax shall be deemed the amount of tax payable under Article 95 of the Local Tax Act. <Amended by Act No. 12955, Dec. 31, 2014> [This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 176 (Order of Application, etc. of Tax Reduction or Exemption and Tax Credit) |
| (1) | Where the provisions on reduction or exemption of individual local income tax and on tax credit are applied simultaneously, they shall be applied in the following order: |
| 1. | Reduction of or exemption from individual local income tax on the income of the relevant taxable year; |
| 2. | Tax credit not to be carried forward; |
| 3. | Tax credit allowed to be carried forward. In such cases, where the amount of the tax credit incurred during the relevant taxable period and undeducted amount carried forward from the previous taxable period exist simultaneously, the undeducted amount carried forward shall be deducted first. |
| (2) | and (3) Deleted. <by Act No. 12955, Dec. 31, 2014> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 176-2 (Method of Application, etc. when Amount of Tax Reduced, Exempted, or Deducted Exceeds Amount of Tax Calculated) |
| (1) | Where the aggregate of child tax credits prescribed in Article 97-2, tax credit for pension account under Article 97-3, and special tax deduction under Article 97-4, exceeds the amount of individual local income tax calculated on global income of a resident which is accumulatively imposed for the relevant taxable period (excluding the amount of tax calculated, prescribed by Presidential Decree on interest income and dividend income subject to withholding tax rates under Article 62 of the Income Tax Act; hereafter in this Article, referred to as "amount of tax for deduction calculated"), such excess shall be written off: Provided, That where the amount of the tax credit for donations is included in the relevant amount of excess, such amount of donations and the equivalent of 10/100 of the designated donations undeductable for exceeding the maximum prescribed in Article 59-4 (4) 2 of the Income Tax Act, shall be carried forward each taxable year for up to five years from the date the taxable year following the relevant taxable year commences; and the equivalent of 10/100 of the amount of the tax credit under Article 61 (3) of the Income Tax Act, shall deducted from the amount of tax for deduction calculated. |
| (2) | Where the aggregate of the tax credits prescribed in Articles 97-4 (1) through (3) and 137-2, exceeds the amount of individual local income tax calculated on global income of a resident for the relevant taxable period prescribed by Presidential Decree, such excess shall be written off. |
| (3) | Where the aggregate of the amounts of tax reduced, exempted, and deducted under this Act, exceeds the amount of individual local income tax calculated on global income which is accumulatively imposed for the relevant taxable period, such excess shall be written off; and the tax credit for pension account shall be deemed unused within the amount of excess: Provided, That where the amount of the tax credit for casualty loss under Article 96 exceeds the amount calculated by deducting other reductions, exemptions, and deductions of tax from the amount of individual local income tax calculated on global income and adding additional tax, such excess shall be written off. |
[This Article Newly Inserted by Act No. 12955, Dec. 31, 2014]
CHAPTER IV SUPPLEMENTARY PROVISIONS
| Article 177 (Subject Matter of Exclusion from Reduction or Exemption) |
For the purpose of reduction or exemption under this Act, any of the following real estate, etc. shall be excluded from the subject matter of reduction or exemption: <Amended on Jan. 15, 2020>
| 1. | Deleted; <Mar. 14, 2023> |
| 2. | Land, buildings and standing timbers on the land subject to divisional registration among real estate for membership golf courses under the Installation and Utilization of Sports Facilities Act. In such cases, real estate actually used for golf course without registered shall be included; |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 177-2 (Restrictions on Special Provisions on Reduction or Exemption of Local Tax) |
| (1) | Where acquisition tax or property tax is exempted under this Act (referring to where the reduction rate of tax is 100/100 among special provisions for local tax; and where the reduction rate of tax is the full reduction of the tax rate for the relevant taxable subject-matter under the Local Tax Act; hereafter in this Article, the same shall apply), the reduction rate (referring to the reduction rate to which the tax rates prescribed in Article 13 (1) through (4) of the Local Tax Act are not applied) equivalent to 85/100 shall apply, notwithstanding provisions for exemption from acquisition tax or property tax under this Act: Provided, That the same shall not apply in any of the following cases: <Amended on Dec. 29, 2015; Dec. 27, 2016; Dec. 26, 2017; Dec. 24, 2018; Dec. 28, 2021; Mar. 14, 2023> |
| 1. | Where the amount of acquisition tax (in cases of real estate acquired in yearly installments, referring to the aggregate of the amount of tax each time; in cases of real estate acquired from the same owner within one year or adjacent real estate acquired within one year, referring to the aggregate of the amount of acquisition tax calculated for each real estate) and property tax calculated under the Local Tax Act, falls under any of the following items: |
| (a) | Acquisition tax: Not exceeding two million won; |
| (b) | Property tax: Not exceeding 500,000 won (referring to the amount calculated before applying the upper limit of the tax burden under Article 122 of the Local Tax Act); |
| 2. | Reduction or exemption prescribed in Articles 7 through 9, 13 (3), 16, 17, and 17-2, subparagraph 1 of Article 20, Articles 29, 30 (3), 33 (2), 35-2, 36, 41 (1) through (6), 44 (2), 50, 55, 57-2 (2) (limited to until December 31, 2020), 62, 63 (2) and (4), 66, 73, 74-2 (1), 76 (2), 77 (2), 82, 85-2 (1) 4, and 92. |
| (2) | Paragraph (1) shall also apply where acquisition tax or property tax is exempted pursuant to a local municipal ordinance for reduction or exemption pursuant to Article 4: Provided, That this shall not apply to reduction or exemption delegated by the Restriction of Special Taxation Act. <Newly Inserted on Dec. 27, 2016; Dec. 26, 2017> |
| (3) | Notwithstanding paragraph (2), applicability of paragraph (1) and timing for application thereof, may be prescribed by a local municipal ordinance for reduction or exemption. <Newly Inserted on Dec. 27, 2016> |
[This Article Newly Inserted on Dec. 31, 2014]
| Article 178 (Collection of Acquisition Tax Reduced or Exempted as Penalty) |
| (1) | For the purpose of tax reduction or exemption for real estate, except as otherwise expressly provided for in this Act, the reduced or exempted portion of acquisition tax for the relevant part, shall be collected as a penalty, in any of the following cases: <Amended on Jan. 15, 2020> |
| 1. | Where it is not used directly for the original purpose without just grounds, within one year from the date of acquisition; |
| 2. | Where it is sold, donated, or used for any other purpose, after having been used directly for the original purpose for less than two years. |
| (2) | Where a person eligible for reduction of acquisition tax on real estate pursuant to this Act falls under grounds for collection as a penalty prescribed in paragraph (1) or other provisions in this Act and shall pay the reduced portion of taxes, the person shall additionally pay the amount equivalent to interest calculated as prescribed by Presidential Decree; and the relevant amount of tax shall be deemed the amount of tax to be paid pursuant to Article 20 of the Local Tax Act: Provided, That if any unavoidable ground prescribed by Presidential Decree, such as bankruptcy, etc. exists, the amount equivalent to interest shall not be added. <Newly Inserted on Jan. 15, 2020> |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 179 (Application of Reduction Rate of Property Tax on Land) |
Where any provisions on reducing or exempting property tax on land are provided for in this Act or other statutes, an amount calculated by multiplying the tax base amount of land subject to the reduction or exemption by the relevant reduction rate, shall be reduced or exempted.
[This Article Newly Inserted on Jan. 1, 2014]
| Article 180 (Elimination of Duplicative Special Cases) |
Where at least two special cases concerning local taxes are applicable to the same taxable subject-matter and the same tax item, only one that provides for the highest amount of tax to be reduced shall apply: Provided, That where Articles 73, 74-2 (1), 92 and 92-2 are applicable with other special cases concerning local taxes, both relevant special cases shall apply, but in cases of duplicative application among Articles 73, 74-2 (1) and 92, only one of them that provides for the highest amount of tax to be reduced shall apply. [This Article Wholly Amended on Mar. 14, 2023]
| Article 180-2 (Special Provisions on Exclusion from Application of Heavy Taxation Rate of Local Tax) |
| (1) | In imposing acquisition tax prescribed in the Local Tax Act on the acquisition of any of the following real estate, no tax rate prescribed in the main sentence of Article 13 (2) and Article 13 (3) of the same Act, shall apply until December 31, 2024: <Amended on Dec. 29, 2015; Dec. 24, 2018; Dec. 28, 2021> |
| (2) | In imposing registration license tax prescribed in the Local Tax Act on any of the following registration for incorporation (including where the amount of capital or investment increases within five years from the date of its incorporation), no tax rate prescribed in Article 28 (2) and (3) of the same Act, shall apply until December 31, 2024: <Amended on Jul. 24, 2015; Aug. 28, 2015; Dec. 29, 2015; Dec. 24, 2018; Apr. 20, 2021; Dec. 28, 2021> |
| 4. | A special-purpose corporation prescribed by Presidential Decree; |
| 6. | A company specializing in a cultural industry defined in subparagraph 21 of Article 2 of the Framework Act on the Promotion of Cultural Industries; |
[This Article Newly Inserted by Act No. 12955, Dec. 31, 2014]
| Article 181 (Ex Ante and Ex Post Management of Special Cases of Taxation of Local Taxes) |
| (1) | The Minister of the Interior and Safety shall formulate a master plan on special taxation of local taxes and its restriction and notify the heads of central administrative agencies thereof by no later than the last day of February each year, following deliberation by the committee for deliberation on local finance management prescribed in Article 27-2 of the Local Finance Act and the State Council. <Amended on Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017; Aug. 16, 2023> |
| (2) | Where the heads of central administrative agencies intend to reduce or exempt any local tax under their jurisdictions, they shall submit a recommendation for reduction or exemption of a local tax (hereafter in this Article, referred to as "recommendation for reduction or exemption of a local tax"), including the expediency for reduction or exemption; tax item and tax rate; period of reduction or exemption; estimation of increase or decrease in local tax revenue; the relevant business plan; budgetary document; analysis of business income and expenditure; plans to downscale or discontinue the existing reduction or exemption of local taxes to cover the reduced or exempted amount; and the means to bear tax burden, to the Minister of the Interior and Safety by no later than March 31 (in cases falling under paragraph (7), by no later than February 20) each year. <Amended on Nov. 19, 2014; Jul. 26, 2017; Dec. 26, 2017; Dec. 24, 2018> |
| (3) | The heads of central administrative agencies shall submit their opinions on the analysis of impacts resulting from the reduction of or exemption from local taxes and as to whether such tax reduction or exemption system is to be maintained (hereafter in this Article, referred to as "evaluation statement on reduction of or exemption from local taxes") regarding the matters for special taxation of local taxes prescribed by Presidential Decree, to the Minister of the Interior and Safety by no later than March 31 (in cases falling under the latter part of paragraph (6), by no later than February 20) each year. <Amended on Nov. 19, 2014; Jul. 26, 2017; Dec. 26, 2017> |
| (4) | Where the heads of central administrative agencies intend to request the establishment, extension, abolition, etc. of a system for reduction or exemption of a local tax by municipal ordinance, they shall submit a recommendation for reduction or exemption of a local tax or an evaluation statement on reduction or exemption of a local tax, to the heads of the relevant local governments. |
| (5) | The Minister of the Interior and Safety shall gather consensus from each local government on the recommendation for reduction of or exemption from local taxes or an evaluation statement on reduction of or exemption from local taxes, submitted under paragraphs (2) and (3). <Amended on Dec. 31, 2014; Jul. 26, 2017> |
| (6) | The Minister of the Interior and Safety may conduct an evaluation of major special exception on local taxes. In such cases, any special provisions on local tax prescribed by Presidential Decree and the time limit for the application of which falls in the relevant year, may be evaluated as to the achievement of its goal, economic effect, impact on local finance, etc. by outsourcing it to a tax-related survey and research institution, within budgetary limits. <Newly on Dec. 31, 2014; Dec. 29, 2015; Jul. 26, 2017; Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020> |
| (7) | Where the Minister of the Interior and Safety intends to newly introduce any special provisions on local tax, the expected amount of reduction or exemption of which is at least a specific amount prescribed by Presidential Decree, he or she shall conduct a feasibility assessment on the necessity, timeliness and anticipated impacts of the exception on local tax; such exception's impact on local finance; and anticipated issues, by outsourcing such feasibility assessment to a tax-related survey and research institution. <Newly Inserted on Dec. 26, 2017; Dec. 24, 2018; Dec. 29, 2020> |
| (8) | The Minister of the Interior and Safety may designate an institution that performs professional assessment and research in connection with a recommendation for reduction of or exemption from local taxes, an evaluation statement on reduction of or exemption from local taxes and the evaluation referred to in paragraphs (6) and (7) and contribute expenses necessary for the operation, etc. thereof. <Newly Inserted on Dec. 31, 2014; Jul. 26, 2017; Dec. 26, 2017> |
| (9) | If deemed necessary in connection with an evaluation statement on reduction of or exemption from local taxes or an evaluation prescribed in paragraphs (6) and (7), the Minister of the Interior and Safety may gather consensus or information from the heads of the relevant central administrative agencies, etc. In such cases, the heads of the relevant central administrative agencies, etc. shall cooperate in such gathering, except in extenuating circumstances. <Newly Inserted on Dec. 31, 2014; Jul. 26, 2017; Dec. 26, 2017> |
| (10) | Matters necessary for formulating a master plan on special taxation of local taxes and its restriction; submitting recommendations for reduction of or exemption from local taxes or evaluation statements on reduction of or exemption from local taxes; gathering opinions from local governments; scope of major special taxation of local taxes; designating an examination and research institution prescribed in paragraphs (1) through (9); and other necessary matters, shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 31, 2014; Dec. 26, 2017> |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 182 (Autonomous Adjustment of Rate of Reduction by Local Governments) |
| (1) | Where the period of reduction or exemption of a local tax among the local taxes under this Act is extended, a local government may adjust the reduction rate of such local tax under the relevant Article, within 50/100 by municipal ordinance, taking into account the financial status of the local government, ability to bear tax burden of those subject to the reduction or exemption, etc. In such cases, an exemption shall be deemed a reduction rate of 100/100. |
| (2) | Notwithstanding paragraph (1), no local government may adjust to lower the rate of reduction of local taxes of matters prescribed by Presidential Decree and necessary for the protection of social vulnerable class, public interest, and other matters requiring uniform reduction or exemption of local taxes on a national scale, etc. <Amended by Act No. 13637, Dec. 29, 2015> |
[This Article Newly Inserted by Act No. 12175, Jan. 1, 2014]
| Article 183 (Application for Reduction or Exemption) |
| (1) | A person who seeks reduction or exemption of a local tax, shall apply therefor, as prescribed by Presidential Decree: Provided, That the head of a local government may reduce or exempt a local tax ex officio when he or she is aware of the object of reduction or exemption. |
| (2) | Upon receipt of an application for reduction or exemption of a local tax under paragraph (1), the head of a local government shall provide guidance on the matters related to the reduction or exemption of local taxes to a person who applies for the reduction or exemption of local taxes (including an entrusted person) as prescribed by Ordinance of the Ministry of the Interior and Safety. <Amended on Dec. 29, 2020> |
[This Article Newly Inserted on Jan. 1, 2014]
| Article 184 (Submission of Data for Reduction and Exemption) |
A person granted a reduction or exemption of a local tax, shall submit data related to reduction or exemption to the head of the competent local government, as prescribed by Presidential Decree.
[This Article Newly Inserted on Jan. 1, 2014]
ADDENDA <Act No. 10220, Mar. 31, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2011.
Article 2 (Transitional Measures concerning the Cultural Heritage Protection Act)
Article 3 (General Transitional Measures)
The former provisions shall apply to the local tax reduced or exempted, or to be imposed, reduced, or exempted pursuant to the former provisions of the Local Tax Act (including municipal ordinance under Article 9 of the former Local Tax Act).
Article 3-2 (Transitional Measures concerning Former Municipal Ordinance on Reduction and Exemption)
Where tax exemptions, unequal assessment, and partial assessment have been prescribed by municipal ordinance pursuant to Article 9 of the former Local Tax Act with permission from the Minister of Public Administration and Security, as at the time this Act enters into force, notwithstanding the amended provisions of Article 4, tax exemptions, unequal assessment, and partial assessment shall apply pursuant to such municipal ordinance until such municipal ordinance is abolished.
[This Article Newly Inserted by Act No. 10417, Dec. 27, 2010]
Article 4 Omitted.
Article 5 (Relationship with other Statutes)
Where the former Local Tax Act or provisions thereof are cited by other statutes as at the time this Act enters into force, this Act or corresponding provisions hereof shall be deemed cited in lieu of the former provisions, if provisions corresponding thereto exist herein.
ADDENDA <Act No. 10252, Apr. 12, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation: Provided, That Article 6 (12) of Addenda shall enter into force on January 1, 2011. Articles 2 through 6 Omitted.
ADDENDA <Act No. 10333, May 31, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 10356, Jun. 8, 2010>
| (1) | (Enforcement Date) This Act shall enter into force on July 1, 2010: Provided, That paragraph (2) of Addenda shall enter into force on January 1, 2011. |
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: Provided, That Article 11 (11) of Addenda shall enter into force on January 1, 2011. Articles 2 through 12 Omitted.
ADDENDA <Act No. 10369, Jun. 10, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That Article 2 (3) of Addenda shall enter into force on January 1, 2011. Articles 2 and 3 Omitted.
ADDENDA <Act No. 10417, Dec. 27, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2011: Provided, That the amended provisions of Articles 92-2 and 96, shall enter into force on March 1, 2011. Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Municipal Ordinance on Local Tax Reduction or Exemption)
The amended provisions of Article 4 shall begin to apply from the first case in which a municipal ordinance on local tax reduction or exemption, is enacted or amended after this Act enters into force. Article 4 (Applicability to Collection of Local Tax as Penalty following Donation)
Article 5 (Applicability to Collection of Acquisition Tax as Penalty on Cargo Ships and Ocean-Going Ships)
The amended provisions of the proviso to Article 64 (2), shall begin to apply from the first acquisition tax reduced or exempted after this Act enters into force. Article 6 (Applicability to Reduction or Exemption for Substitute Acquisition of Farmland due to Expropriation, etc. of Land)
The amended provisions of the main sentence of Article 73 (1), shall begin to apply from the first portion for which two years have not passed after this Act enters into force, from the date the last compensation money was received. Article 7 (Applicability to Local Municipal Ordinance on Voluntary Adjustment of Rate of Local Tax Reduction or Exemption)
The amended provisions of Article 97-2 shall begin to apply from the first case where the period of local tax reduction or exemption is extended as prescribed by this Act after this Act enters into force. Article 8 (Transitional Measures concerning Curtailing or Rationalization of Amount of Local Tax Reduction or Exemption)
Matters prescribed by Presidential Decree in consideration of economic policy, etc. of the State among the matters of local tax reduction or exemption prescribed by municipal ordinance pursuant to Article 9 of the former Local Tax Act [referring to the Local Tax Act effective through December 31, 2010, before it was amended by the wholly amended Local Tax Act (Act No. 10221), and the partially amended Local Tax Act (Act No. 10416); hereinafter the same shall apply] as at the time this Act enters into force, shall be deemed local tax reduction or exemption prescribed by municipal ordinance with permission from the Minister of Public Administration and Security under the amended provisions of the proviso to Article 4 (7). Article 9 (Transitional Measures concerning Collection of Acquisition Tax and Registration Tax as Penalty on Farmland and Woodland from Persons Returning to Farming)
Article 261 (3) of the former Local Tax Act shall apply to collecting the reduced or exempted portion of acquisition tax and registration tax on the farmland and woodland as a penalty from a person returning to farming as at December 31, 2010, notwithstanding the amended provisions of Article 6 (4). Article 10 (Transitional Measures concerning Collection of Acquisition Tax and Registration Tax as Penalty on Motor Vehicles from Persons Raising Several Children)
Article 273-3 of the former Local Tax Act shall apply to collecting the reduced or exempted portion of acquisition tax and registration tax on motor vehicles as a penalty, which was acquired and registered by a person raising several children as at December 31, 2010, notwithstanding the amended provisions of Article 22-2.
ADDENDA <Act No. 10470, Mar. 29, 2011>
| (1) | (Enforcement Date) This Act shall enter into force on the date of its promulgation. |
| (2) | (Applicability to Reduction or Exemption for Rental Housing, etc.) The amended provisions of Article 31 (5) shall begin to apply from the first house acquired after this Act enters into force. |
| (3) | (Applicability to Reduction or Exemption for Unsold Housing Units after Completion of Construction) The amended provisions of Article 31-2 shall begin to apply from the first unsold housing unit after construction is completed as at the time this Act enters into force. |
| (4) | (Special Cases concerning Acquisition Tax Reduction or Exemption under Municipal Ordinance on Reduction or Exemption) Where a local government grants acquisition tax reduction or exemption by municipal ordinance pursuant to the amended provisions of Articles 31 (5) and 31-2, it may set the timing for application thereof, to coincide with the date this Act enters into force. |
ADDENDA <Act No. 10628, May 18, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 10654, May 19, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Acquisition Tax Reduction or Exemption on Transaction of Houses)
The amended provisions of Article 40-2 shall begin to apply from the first acquisition made after March 22, 2011.
ADDENDA <Act No. 10789, Jun. 7, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA <Act No. 10890, Jul. 21, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10932, Jul. 25, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 11029, Aug. 4, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 11042, Sep. 15, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2012.
Article 2 Omitted.
ADDENDA <Act No. 11093, Nov. 22, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 11138, Dec. 31, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2012: Provided, That the amended provisions of Articles 10 (1) and 57 (3) shall enter into force on March 2, 2012. Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Acquisition Tax Reduction or Exemption for Transactions of Houses)
The amended provisions of Article 40-2 shall begin to apply from the first house acquired after this Act enters into force. Article 4 (Applicability to Collection of Acquisition Tax as Penalty following Revocation of Certification, etc. of Environmentally Friendly Architecture)
The amended provisions of Article 47 (5) shall begin to apply from the first portion with acquisition tax reduced pursuant to the amended provisions of Article 47 (4) after this Act enters into force. Article 5 (Applicability to Property Tax Reduction or Exemption for Environmentally Friendly Architecture, etc.)
For the purposes of the amended provisions of Article 47 (6), buildings or houses for which five years have not passed from the date certification is obtained as at the tax base date of property tax, among those for which certification of environmentally friendly architecture or certification of energy efficiency rating is obtained before this Act enters into force, shall be included. Article 5-2 (Transitional Measures concerning Property Tax Reduction or Exemption for Venture Businesses, etc.)
[This Article Newly Inserted by Act No. 11397, Mar. 21, 2012]
Article 6 (Special Applicability to Reduction or Exemption for Knowledge Industry Centers, etc.)
Article 7 (Applicability to Relocating Public Agencies, etc.)
| (1) | The amended provisions of Article 81 (3) shall also apply where the period from the date a residential building and appurtenant land, are acquired, to the date this Act enters into force, is less than 60 days. |
| (2) | The amended provisions of Article 81 (4) shall begin to apply from the first person granted acquisition tax reduction after this Act enters into force. |
Article 8 (Special Applicability to Application of Reduction or Exemption for Local Public Corporations)
Notwithstanding the amended provisions of Article 85-2, local tax imposed on any local government-invested public corporation for real estate sold in parcels by such corporation before this Act enters into force, which has an intention to engage in housing business or land development business as at the time this Act enters into force, shall be reduced as follows: | 1. | An amount calculated by multiplying 100/100 of acquisition tax by the proportion [referring to the rate of the stocks held (including stocks in which a local government is deemed to have invested pursuant to Article 53 (4) of the Local Public Enterprises Act) by a local government to all stocks issued by the relevant local government-invested public corporation; hereafter in this Article, the same shall apply] of stocks held by a local government, shall be reduced; |
| 2. | An amount calculated by multiplying 100/100 of property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act) by the proportion of stocks held by a local government, shall be reduced or exempted. |
Article 9 (Transitional Measures concerning Period of Property Tax Reduction or Exemption for Real Estate Acquired by Complex Logistics Terminal Business Operators according to Project Plans)
Article 10 (Applicability to Notification of whether to Reduce or Exempt Local Tax, etc.)
The amended provisions of Article 98 shall begin to apply from the first portion for which local tax reduction or exemption is determined after this Act enters into force.
ADDENDA <Act No. 11141, Dec. 31, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on September 1, 2012. (Proviso Omitted.)
Articles 2 through 22 Omitted.
ADDENDA <Act No. 11241, Jan. 26, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 11397, Mar. 21, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 31 (1) and (3) shall enter into force on April 27, 2012. Article 2 (General Applicability)
This Act shall apply to the first case for which tax liability arises after this Act enters into force.
ADDENDA <Act No. 11487, Oct. 2, 2012>
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 from the first house acquired as of September 24, 2012.
Article 3 (Applicability to Reduction of or Exemption from Acquisition Tax During Transition from Owning Two Houses Temporarily)
The amended provisions of proviso to Article 40-2 shall begin to apply from the first liability for tax payment arising as of January 1, 2011.
ADDENDA <Act No. 11618, Jan. 1, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2013.
Article 2 (General Applicability)
This Act shall apply to a case in which liability arises for taxation after this Act enters into force.
Article 3 (Applicability to Extension of Deadline for Transfer or Cancellation of Registration of Existing Motor Vehicles of Persons Raising Several Children)
The amended provisions of Article 22-2 (2) shall apply where a person has cancelled or transferred registration, or cancels or transfers registration of, an existing motor vehicle within 60 days from the date of registration of a motor vehicle acquired for replacement, as at the time this Act enters into force. Article 4 (Applicability to Collection of Reduced or Exempted Amount of Tax on Korea Industrial Complex Corporation, as Penalty)
The amended provisions of the proviso to Article 78 (2) shall apply to real estate acquired by the Korea Industrial Complex Corporation after this Act enters into force. Article 5 (Applicability to Acquisition Tax Reductions and Exemptions for Relocation of Public Institutions, etc. to Provinces)
The amended provisions of Article 81 (3) and (5) shall apply to a building for residence and appurtenant land acquired after November 30, 2011. Article 6 (General Transitional Measures)
The former provisions shall apply to local taxes imposed, reduced, or exempted, or to be imposed, reduced, or exempted, pursuant to the former provisions, as at the time this Act enters into force.
Article 7 (Transitional Measures concerning Collection of Reduced or Exempted Portion of Acquisition Tax on Transactions of Housing, as Penalty)
Notwithstanding the amended provisions of Article 40-2, the former provisions shall apply to collecting as a penalty, the portion of acquisition tax reduced or exempted on a house pursuant to the former Article 40-2, before this Act enters into force. Article 8 (Transitional Measures concerning Collection of Reduced or Exempted Portion of Acquisition Tax on Imported Motor Vehicles for Research and Development, as Penalty)
Notwithstanding the amended provisions of Article 46, where a person uses a motor vehicle imported for research and development before this Act enters into force, for other than the purpose of research and development within two years after the acquisition thereof, the head of a local government shall collect as a penalty, the portion of acquisition tax exempted pursuant to the former provisions.
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. 11716, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Reduction of and Exemption from Acquisition Tax on Transactions of Housing)
The amended provisions of Article 40-2 shall apply to the houses acquired after January 1, 2013.
ADDENDA <Act No. 11762, May 10, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Exemption from Acquisition Tax on First Acquisition of Housing in One's Life)
The amended provisions of Article 36-2 shall apply to the houses acquired for the first time in one’s life after April 1, 2013. Article 3 (Applicability to Additional Collection of Exempted Acquisition Tax on First Acquisition of Housing in One's Life)
When the amended provision of the proviso to Article 36-2 (1) is applied, such amended provision shall be applied considering acquisition tax has been reduced pursuant to Article 40-2.
ADDENDA <Act No. 11999, Aug. 6, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 31-3 shall enter into force on December 5, 2013. Article 2 (Applicability to Exemption from Acquisition Tax on First Acquisition of Housing in One's Life)
The amended provisions of Article 36-2 shall apply to houses acquired on or after April 1, 2013. Article 3 (Applicability to Reduction or Exemption for Buildings with Aseismatic Capacity)
The amended provisions of Article 92-3 shall apply to buildings, the aseismatic capacity of which is confirmed through construction or substantial repair after this Act enters into force.
ADDENDA <Act No. 12175, Jan. 1, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2014: Provided, That the amended provisions of Article 34 (7) shall enter into force on the date of its promulgation. Article 2 (Validity)
The proviso to Article 96 (4) of this Act shall apply from the time this Act enters into force, until December 31, 2016. Article 3 (General Applicability)
This Act shall begin to apply from the first portion regarding which a duty to pay tax arises with the commencement of the taxable period after this Act enters into force.
Article 4 (Applicability to Reduction or Exemption for Acquisition, etc. of Unsold Housing Units, etc. of Corporate Restructuring Real Estate Investment Companies)
The amended provisions of Article 34 (7) shall begin to apply from the first portion regarding which a duty to pay tax arises after this Act enters into force. Article 5 (Special Provisions for Enactment of Local Municipal Ordinances)
Local municipal ordinances prescribed in the amended provisions of Articles 93 through 167 of this Act, shall take effect as of January 1, 2017. Article 6 (General Applicability)
Local taxes imposed, reduced, or exempted, or to be imposed, reduced, or exempted under the former provisions, as at the time this Act enters into force, shall be governed by the former provisions.
Article 7 (Transitional Measures concerning Collection of Exempted Portion of Acquisition Tax for Guarantee for Sale of Houses, etc., as Penalty)
Where a residential building and land appurtenant thereto acquired by the Korea Housing Guarantee Co., Ltd. before this Act enters into force, is not sold or leased within three years from the date of acquisition without just grounds, the portion of acquisition tax exempted under the former provisions shall be collected as a penalty, notwithstanding the amended provisions of Article 34 (2). Article 8 (Transitional Measures concerning Collection of Reduced or Exempted Portion of Acquisition Tax for Real Estate to Develop Rest Hot Spring, as Penalty)
Where a person who has acquired real estate to develop a rest hot spring before this Act enters into force, fails to use it directly for the rest hot spring within one year from the date of acquisition without just grounds, the portion of acquisition tax reduced or exempted under the former provisions, shall be collected as a penalty, notwithstanding the amended provisions of Article 54 (4). Article 9 (Transitional Measures concerning Reduction or Exemption for Industrial Complexes, etc.)
Where a person who has acquired real estate to construct an industrial building, etc. in an industrial complex, etc. before this Act enters into force, leases it to small or medium business proprietors without constructing a building for factories, the former provisions shall apply, notwithstanding the amended provisions of Article 78 (4).
ADDENDA <Act No. 12251, Jan. 14, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 12329, Jan. 21, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 12506, Mar. 24, 2014>
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 from the first portion regarding which a duty to pay tax arises after this Act enters into force: Provided, That, in cases of local income tax, it shall begin to apply from the first portion of income or transfer generated in the taxable year in which this Act enters into force.
Article 3 (Special Provisions for Enactment of Local Municipal Ordinances)
Local municipal ordinances prescribed in the amended provisions of Articles 94, 97-2 through 97-4, 98, 102, 103, 106-2, 111 through 113, 118, 123, 131-2, 132, 133, 136, 141 through 143, 145 through 148, 153, 156, 162, and 164 shall take effect as of January 1, 2017.
ADDENDUM <Act No. 12686, May 28, 2014>
This Act shall enter into force on the date of its promulgation.
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 amended provisions of an Act among the Acts amended under Article 6 of the Addenda, promulgated before this Act enters into force, but the date they are to enter into force, has not yet arrived, shall enter into force on the date the relevant Act enters into force, respectively. Articles 2 through 7 Omitted.
ADDENDA <Act No. 12955, Dec. 31, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2015: Provided, That the amended provisions of Articles 126 (2) through (4) and (7), 127 (2) through (4), 128 (1), and 173 shall enter into force on July 1, 2015; and the amended provisions of Article 67 (2) on January 1, 2016. Article 2 (Period of Validity of Individual Local Income Tax)
The amended provisions of Article 167-2 shall apply until December 31, 2016. Article 3 (General Applicability)
| (1) | This Act shall begin to apply from the first portion regarding which a duty to pay tax arises after this Act enters into force. |
| (2) | Special provisions on local income tax under Chapter III shall begin to apply from the first portion transferred after this Act enters into force, or from the first portion for a taxable year commencing after this Act enters into force. |
Article 4 (Applicability to Reduction of Registration License Tax on Merger of the Korea Development Bank, etc.)
Article 5 (Applicability to Tax Credit for Wages and Salary Incomes, etc. of Non-Residents)
The amended provisions of Articles 94 (1), 95 (1), main sentence of Article 97-3 (1), and Article 97-3 (3) shall begin to apply from the first portion for which year-end tax adjustments are made, or for which final returns on the tax base of global income are filed, after this Act enters into force. Article 6 (Applicability to Expansion of Limit of Deduction for Pension Account)
The amended provisions of the proviso to Article 97-3 (1), shall begin to apply from the first portion deposited in pension accounts after this Act enters into force. Article 7 (Applicability to Special Tax Deduction)
The amended provisions of Article 97-4 shall begin to apply from the first portion for which year-end tax adjustments are made, or for which final returns on the tax base of global income are filed, after this Act enters into force. Article 8 (Applicability to Reduction or Exemption of Individual Local Income Tax for Youth Workers Employed in Small or Medium Enterprises)
The amended provisions of Article 116 (1) shall begin to apply from the first reinstatement made after this Act enters into force. Article 9 (Applicability to Tax Credit, Reduction, or Exemption of Individual Local Income Tax)
The amended provisions of Article 167-2 shall begin to apply from the first portion transferred, or from the first portion for which year-end tax adjustments are made, or for which final returns on the tax base of global income are filed, after this Act enters into force. Article 10 (Applicability to Collection of Reduced or Exempted Amount of Tax as Penalty)
The amended provisions of Article 175 shall begin to apply from the first investment made after this Act enters into force. Article 11 (Applicability to Methods for Application, etc. when Amount of Tax Reduced, Exempted, or Deducted Exceeds Amount of Tax Calculated)
The amended provisions of Articles 176 and 176-2 shall begin to apply from the first portion for which year-end tax adjustments are made, or for which final returns on the tax base of global income are filed, after this Act enters into force. Article 12 (Applicability to Restriction on Special Provisions on Exemption from Local Tax)
The amended provisions of Article 177-2 shall begin to apply from the date classified as follows: | 1. | Articles 11 (1), 13 (2) 1, 2, 3, and 5, 13 (3), 18, 23, 26, 30 (1) and (3), 31-3 (1) 1, 33 (2), 36, 40, 42 (1), 44, 45 (1), 52 (1), 54 (5) 1, 57-3, 67 (1) and (2), 75, 83 (1), 85 (1), and 86: January 1, 2016; |
| 2. | Articles 15 (2), 27 (2), 63 (4), 64, 68 (1), and 85-2 (2): January 1, 2017; |
| 3. | Articles 6 (4), 16, 42 (2), 53, 70 (3), 82, and 83 (2): January 1, 2019; |
| 4. | Articles 22 (1) and (2), 72 (1) and (2), 89, and 90: January 1, 2020; |
| 5. | Exemptions excluding those prescribed in subparagraphs 1 through 4: January 1, 2015. |
[This Article Wholly Amended by Act No. 13637, Dec. 29, 2015]
Article 13 (Special Provisions on Application of Heavy Tax Rate following Reduction or Adjustment of Reduction of or Exemption from Local Tax)
Heavy tax rate prescribed in Articles 13 and 28 of the Local Tax Act applicable to the amended provisions of Articles 22 (6), 34, 38, 41 (7), 42 (3), 46, 57-2, 57-3, 58, 58-3, 59, 60, and 71, under which local tax has been exempted under the former Restriction of Special Taxation Act and the former Restriction of Special Local Taxation Act as at the time this Act enters into force, but partially or fully converted to taxable subject-matter due to this Act entering into force, shall apply from January 1, 2016: Provided, That the heavy tax rate prescribed in Articles 13 and 28 of the Local Tax Act on the amended provisions of Article 37, shall apply from January 1, 2017. Article 14 (General Transitional Measures)
Local tax imposed, reduced, or exempted, or to be imposed, reduced, or exempted under the former provisions before this Act enters into force, shall be governed by the former provisions.
Article 15 (Transitional Measures concerning Collection of Exempted Portion of Acquisition Tax and Property Tax on Agricultural Corporations as Penalty)
Notwithstanding the amended provisions of Article 11 (3), the former provisions shall apply where real estate acquired by an agricultural corporation to use for farming before this Act enters into force, is sold, donated, or used for any other purpose, after having been used directly for the relevant purpose for less than two years. Article 16 (Transitional Measures concerning Collection of Exempted Portion of Acquisition Tax on First Acquisition of Housing in One's Life as Penalty)
Notwithstanding the amended provisions of Article 36-2, the provisions of the proviso to the former Article 36-2 (1) shall apply where a person who has acquired the first housing unit in his/her life under the former provisions before this Act enters into force, falls under the proviso to the former Article 36-2 (1). Article 17 (Transitional Measures concerning Merger of Financial Institutions, etc.)
Notwithstanding the amended provisions of Article 57-2 (2), financial institutions merged under the former Article 57 (1) before this Act enters into force shall be governed by the former Article 57 (1) until December 31, 2015. Article 18 (Transitional Measures concerning Period of Reduction of or Exemption from Property Tax for Enterprises that Occupy Areas for Clustering New-Technology Based Businesses, etc.)
Notwithstanding the amended provisions of Articles 58 (3) and 59 (3), the period of reduction of or exemption from property tax on real estate acquired by an enterprise that occupies an area for clustering new-technology based businesses, etc. before this Act enters into force, shall be governed by the former provisions. Article 19 (Transitional Measures concerning Reduction of or Exemption from Individual Local Income Tax for Foreign Engineers)
Notwithstanding the amended provisions of Article 106 (2), foreign engineers providing services in Korea before this Act enters into force, shall be governed by the former provisions. Article 20 (Transitional Measures concerning Tax Reduction or Exemption for Enterprises, etc. that Occupy Agro-Industrial Complexes)
| (2) | Where either of the former provisions of Article 125 (1) 2 or the amended provisions of Article 156 is chosen for application under the proviso to paragraph (1), the same provisions shall continuously apply during the period of reduction or exemption. |
Article 21 (Transitional Measures concerning Tax Credit for Investment in Facilities to Promote Workers' Welfare)
Notwithstanding the amended provisions of Article 137 (4), the former provisions shall govern where any facility to promote workers' welfare is acquired (including new construction, expansion, repair, or purchase), before this Act enters into force. Article 22 (Transitional Measures concerning Reduction or Exemption of Individual Local Income Tax for Start-Up Enterprises, etc. Located in Enterprise City Development Zones, etc.)
| (1) | Notwithstanding the amended provisions of Article 156 (1) 3 and 4, the former provisions may apply where tax reduction or exemption has been granted under the former Article 156 (1) 3 or 4, before this Act enters into force. |
| (2) | Where either of the former provisions or the amended provisions is chosen for application under paragraph (1), the same provisions shall continuously apply during the period of reduction or exemption. |
Article 23 (Transitional Measures concerning Project Finance Companies)
Where a company falling under Article 51-2 (1) 9 of the Corporate Tax Act, was incorporated and registered as at January 1, 2010 pursuant to Article 76 of the Addenda to the Restriction on Special Taxation Act (Act No. 9921), the reduction or exemption of acquisition tax on real estate acquired by the relevant company, shall be governed by the former provisions. Article 24 (Special Provisions on Tax Rate Reduced for Research Institutes Affiliated with Enterprises)
Notwithstanding the amended provisions of Article 46, acquisition tax and property tax shall be respectively reduced by 75/100 until December 31, 2016, where a person who has acquired real estate to use directly for a research institute affiliated with an enterprise before this Act enters into force, is recognized as a research institute affiliated with a company after filing a report thereon to the Minister of Science, ICT and Future Planning under Article 14 (1) 2 of the Basic Research Promotion and Technology Development Support Act, by not later than December 31, 2016. Article 25 (Special Provisions for Tax Rate Reduced for Enterprises that Occupy Industrial Complexes, etc.)
Notwithstanding the amended Act of this Act, the former provisions shall apply until December 31, 2017 to real estate acquired under Article 78 (4) by a person who intends to construct an industrial building, etc. [including persons who intend to construct factory buildings (referring to buildings defined in Article 2 (1) 2 of the Building Act) and lease them to small or medium business operators] or substantially repair such buildings, etc., within an area where Article 78 (4) 1 is applied, after contracting to purchase the same in lots with the project implementer specified in Article 78 (1), by not later than December 31, 2015. Article 26 Omitted.
ADDENDA <Act No. 12989, Jan. 6, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2015.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 13248, Mar. 27, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 13288, May 18, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That---<Omitted>---Article 9 of the Addenda shall enter into force on the date of its promulgation Articles 2 through 9 Omitted.
ADDENDA <Act No. 13383, Jun. 22, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 13426, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 39 Omitted.
ADDENDA <Act No. 13435, Jul. 24, 2015>
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. 13442, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Article 3 Omitted.
ADDENDA <Act No. 13448, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 20 Omitted.
ADDENDA <Act No. 13498, Aug. 28, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force four months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 13499, Aug. 28, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force four months after the date of its promulgation.
Articles 2 through 16 Omitted.
ADDENDA <Act No. 13605, Dec. 22, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 13609, Dec. 22, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 13613, Dec. 22, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 13637, Dec. 29, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2016: Provided, That the amended provisions of the proviso to Article 181 (6) shall enter into force on January 1, 2017. Article 2 (General Applicability)
| (1) | This Act shall begin to apply from the first tax liability arising after this Act enters into force. |
| (2) | Special provisions on local income tax under Chapter III, shall begin to apply from the first portion transferred after this Act enters into force, or from the first portion for a taxable year commencing, after this Act enters into force. |
Article 3 (Applicability to Collection of Reduced or Exempted Portions of Acquisition Tax on Rental Housing, etc. as Penalty)
Where any ground to collect the reduced or exempted portion of acquisition tax as a penalty, arises after this Act enters into force, to a person for whom acquisition tax was reduced or exempted pursuant to the former Article 31 (1) 2 before this Act enters into force, the portion of acquisition tax reduced or exempted by applying the obligatory lease period under the amended provisions of Article 31 (1) 2, shall be collected as a penalty. Article 4 (Applicability to Collection of Reduced or Exempted Amount of Tax for Relocation of Corporations to Provinces as Penalty)
The amended provisions of the proviso to Article 79 (1), Article 79 (1) 2, the proviso to Article 80 (1), and Article 80 (1) 2 shall begin to apply from the first corporation, etc. relocated after this Act enters into force. Article 5 (Applicability to Restrictions on Special Provisions on Exemption of Local Tax)
The amended provisions of Article 177-2 shall begin to apply from the date classified as follows: | 2. | Articles 22-2, 43, 54 (6), 57-2 (3) 5 and 7, (4), and (5), 60 (3) 1-2, 73-2, 74 (3) 4 and 5, 79, and 80: January 1, 2019; |
| 4. | Exemptions other than those prescribed in subparagraphs 1 through 3: January 1, 2016. |
Article 6 (General Transitional Measures)
Local tax imposed, reduced, or exempted, or to be imposed, reduced, or exempted under the former provisions, as at the time this Act enters into force, shall be governed by the former provisions.
Article 7 (Transitional Measures concerning Collection of Reduced or Exempted Portion of Acquisition Tax on Farmland, etc. as Penalty)
Where any ground for collecting the reduced or exempted portion of acquisition tax as a penalty, arises pursuant to the proviso to and subparagraphs of the former Article 6 (1) after this Act enters into force, to a person who completed the course of an agriculture specialized school or department, or an enrolled student thereof and was granted a reduction or exemption of acquisition tax for acquisition of farmland, etc., in accordance with the main sentence of the former Article 6 (1) before this Act enters into force, the portion of acquisition tax reduced or exempted pursuant to the former provisions, shall be collected as a penalty, notwithstanding the amended provisions of the main sentence of Article 6 (1). Article 8 Omitted.
ADDENDA <Act No. 13729, Jan. 6, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 13805, Jan. 19, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on August 12, 2016.
Articles 2 through 22 Omitted.
ADDENDA <Act No. 13854, Jan. 27, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 14095, Mar. 22, 2016>
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. 14111, Mar. 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 14115, Mar. 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 26 Omitted.
ADDENDA <Act No. 14122, Mar. 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 14198, May 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 14226, May 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 14474, Dec. 27, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 14 Omitted.
ADDENDA <Act No. 14476, Dec. 27, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 14477, Dec. 27, 2016>
Article 1 (Enforcement Date)
Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Collection of Reduced or Exempted Portion of Acquisition Tax, etc. as Penalty)
The amended provisions of Articles 11 (3) 3 and 12 (3) and the provisos to Article 57-2 (2) and (3) 5, shall begin to apply from the first portion for which a reduction or exemption is granted after this Act enters into force. Article 4 (Applicability to Collection of Reduced or Exempted Portion of Local Tax as Penalty)
The amended provisions of Article 22 (1) 1, proviso to Article 22-2 (3), Articles 41 (1) 1, 43 (1) 1, 50 (1) 1, 52 (2) 1, 60 (2) 1, 72 (1) 1, 89 (1) 1, 90 (1) 1, and subparagraph 1 of Article 91, shall also apply where the reduced or exempted portion of local tax before this Act enters into force, is collected as a penalty after this Act enters into force. Article 5 (Applicability to Reduction or Exemption of Local Tax for Buildings or Houses, with Aseismatic Capacity Verified)
Articles 6 through 8 Deleted. <by Act No. 15295, Dec. 26, 2017>
Article 9 (Applicability to Restrictions on Special Provisions on Exemption of Local Tax)
| 1. | Articles 22-2, 42 (2), 43, 53, 54 (6), 57-2 (3) 5 and 7, (4), (5), and (6) 3, 60 (3) 1-2, 70 (3), 73-2, 74 (3) 4 and 5, 79, 80, and 83 (2): January 1, 2019; |
| 2. | Articles 15 (2), 22 (1) and (2), 63 (5), 72 (1) and (2), 74 (1), 85-2 (2), 88 (1), 89, and 90: January 1, 2020; |
| 3. | Exemptions other than those prescribed in subparagraphs 1 and 2: January 1, 2017. |
Article 10 (Special Provisions on Reduced Tax Rate for Knowledge Industry Centers)
Article 11 (Special Provisions on Reduced Tax Rate for Residential Environment Improvement Projects)
Notwithstanding the amended provisions of this Act, housing units acquired by the implementer of a housing redevelopment project pursuant to Article 74 (3) 3 to implement a residential environment improvement project referred to in subparagraph 2 (a) of Article 2 of the Act on the Maintenance and Improvement of Urban Areas and Residential Environments, shall be subject to the former rate of reduction or exemption until December 31, 2017. Article 12 (Special Provisions on Reduced Tax Rate for Starting New Businesses, etc. in Enterprise City Development Zones)
Notwithstanding the amended provisions of this Act, real estate acquired by an enterprise which starts a new business or newly establishes a place of business or by a project implementer, to operate business prescribed in Article 75-2 (1) 1 or 2 in an enterprise city development zone, shall be subject to the former rate of reduction or exemption until December 31, 2017. Article 13 (Special Provisions on Reduced Tax Rate for Implementers of Industrial Complex Development Projects, etc.)
Notwithstanding the amended provisions of this Act, real estate acquired by a project implementer referred to in Article 78 (1) through (3) and the Korea Industrial Complex Corporation referred to in Article 78 (6), to perform relevant projects, shall be subject to the former rate of reduction or exemption until December 31, 2017. Article 14 (Special Provisions on Reduced Tax Rate for Relocating Public Agencies, etc.)
Article 15 (General Transitional Measures)
Local tax imposed, reduced, or exempted, or to be imposed, reduced, or exempted under the former provisions, as at the time this Act enters into force, shall be governed by the former provisions.
Article 16 (Transitional Measures concerning Collection of Reduced or Exempted Portion of Acquisition Tax on Farmland, etc. of Self-Employed Farmers as Penalty)
Collection of a reduced or exempted portion of acquisition tax as a penalty, where any ground for such collection prescribed in the former Article 6 (1) 2, arises after this Act enters into force, to farmland, etc. for which acquisition tax was reduced or exempted pursuant to the main sentence of the former Article 6 (1) before this Act enters into force, shall be governed by the former provisions, notwithstanding the amended provisions of Article 6 (1) 2. Article 17 (Transitional Measures concerning Exemption of Property Tax for Improvement of Housing in Agricultural and Fishing Villages)
Where a person who has improved a house by his/her personal effort before this Act enters into force, is granted an exemption of acquisition tax on the relevant house pursuant to the former Article 16, the reduction or exemption of property tax on the relevant house shall be governed by the former provisions, notwithstanding the amended provisions of Article 16. Article 18 (Transitional Measures, etc. concerning Collection of Reduced or Exempted Portion of Local Tax for Small or Medium Start-Up Enterprises, etc. as Penalty)
| (1) | Notwithstanding the amended provisions of the main sentence of Article 58-3 (7) and subparagraphs of the same paragraph, collection of a reduced or exempted portion of acquisition tax as a penalty pursuant to the main sentence of the former Article 58-3 (1) and subparagraphs of the same paragraph before this Act enters into force, shall be governed by the proviso to the former Article 58-3 (1): Provided, That where consolidation is effected under Article 31 (1) of the Restriction of Special Taxation Act, or where a business is converted into a corporation under Article 32 (1) of the same Act, after this Act enters into force, no acquisition tax shall be collected as a penalty pursuant to the amended provisions of the proviso to Article 58-3 (7). |
| (2) | The amended provisions of Article 58-3 (8) shall apply where a person for whom property tax was reduced or exempted pursuant to the former Article 58-3 (2) before this Act enters into force, converts a business into a corporation under Article 32 (1) of the Restriction of Special Taxation Act after this Act enters into force, but before the end of the period of reduction or exemption prescribed in the same paragraph. |
Article 19 (Transitional Measures concerning Collection of Reduced or Exempted Portion for International Ships, etc. in Special District for Registration of Ships as Penalty)
Notwithstanding the amended provisions of Article 64-2, collection of a portion of local tax reduced or exempted pursuant to the main sentence of the former Article 64-2 (1) before this Act enters into force, as a penalty, shall be governed by the former provisions. Article 20 (Transitional Measures concerning Collection of Portions Reduced or Exempted for Start-Up Businesses, etc. in Regional Development Project Zones)
Notwithstanding the amended provisions of Article 75-2 (1) 3 and 4, collection of a portion of local tax reduced or exempted pursuant to the former Article 75-2 (1) before this Act enters into force, as a penalty, shall be governed by the former provisions. Article 21 (Transitional Measures concerning Reduction or Exemption for Relocating Public Agencies, etc. to Provinces)
ADDENDA <Act No. 14481, Dec. 27, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2017. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Act No. 14567, Feb. 8, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 40 Omitted.
ADDENDA <Act No. 14569, Feb. 8, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 9 Omitted.
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 the amended parts of the Acts which were promulgated before this Act enters into force but the enforcement dates of which have not yet arrived among the Acts amended pursuant to Article 5 of the Addenda shall respectively enter into force on the enforcement dates of such Acts. Articles 2 through 6 Omitted.
ADDENDA <Act No. 14939, Oct. 24, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2018.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 15012, Oct. 31, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 15295, Dec. 26, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2018: Provided, That the amended provisions of Articles 47-2 (1) and 66 (1) shall enter into force on January 1, 2019. Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Reduction or Exemption for Improvement, etc. of Financial Structure of Enterprises)
The amended provisions of Article 57-3 shall also apply to assets acquired before this Act enters into force and under lease. In such cases, the period of reduction of property tax on the relevant assets shall be the remaining period which does not exceed five years from the date the first liability to pay property tax on the relevant assets arises as at the time this Act enters into force. Article 4 (Applicability to Reduction of Property Tax on Small and Medium Start-up Enterprises, etc.)
Notwithstanding the amended provisions of Article 58-3 (2), a small or medium start-up enterprise or a small or medium start-up venture business incorporated before this Act enters into force shall be governed by the former provisions. Article 5 (Applicability to Collection of Acquisition Tax Exempted for Minicars, etc. as Penalty)
The amended provisions of the proviso to Article 67 (1) shall begin to apply from the first exemption received after this Act enters into force. Article 6 (Applicability to Collection of Acquisition Tax Exempted for Village Associations, etc. as Penalty)
The amended provisions of Article 90 (1) 3 shall begin to apply from the first gratuitous donation made after this Act enters into force. Article 7 (Applicability to Restriction on Special Provisions on Reduction or Exemption of Local Tax)
| 1. | Articles 22-2, 42 (2), 43, 53, 57-2 (3) 5 and 7, 57-2 (4) and (5), 60 (3) 1-2, 70 (3), 73-2, 74 (3) 4 and 5, and Articles 79, 80 and 83 (2): January 1, 2019; |
| 2. | Articles 15 (2), 22 (1) and (2), 63 (5), 72 (1) and (2), 74 (1), 85-2 (2), 88 (1), 89, and 90: January 1, 2020; |
| 3. | Exemptions other than those prescribed in subparagraphs 1 and 2: January 1, 2018. |
Article 8 (General Transitional Measures)
Any local tax which is, or which is to be, imposed, reduced, or exempted pursuant to the former provisions shall be governed by the former provisions.
ADDENDA <Act No. 15309, Dec. 26, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 15356, Jan. 16, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 13 Omitted.
ADDENDA <Act No. 15460, Mar. 13, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 15523, Mar. 20, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 37 Omitted.
ADDENDA <Act No. 15830, Oct. 16, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 15881, Dec. 11, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Act No. 16008, Dec. 24, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2019. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Act No. 16041, Dec. 24, 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 from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Collection of Local Tax as Penalty on Acquisition, etc. of Houses for Low Income Bracket)
The amended provisions of Articles 16 (2), 31-3 (2), 33 (3), 36-2 (2), 44 (2), 47-2 (4), and 68 (2) shall begin to apply from the first case where a reduction or exemption is granted after this Act enters into force. Article 4 (Applicability to Reduction and Exemption for Relocation of Koreans Employed by United States Forces Korea to Pyeongtaek)
The amended provisions of Article 81-2 shall also apply where less than 60 days pass for a person eligible for a reduction or exemption after his or her acquisition of a house, and the amended provisions of paragraph (2) of the same Article shall begin to apply from the first case where the reduction or exemption is granted after this Act enters into force. Article 5 (Applicability to Application of Reduction or Exemption of Property Tax for Medical Institutions, etc.)
| (1) | The amended provisions of Articles 22 (6) 3 (b), 27 (2) 2 (b), 30 (2) 2 (b), 37 (2) 2, and 38 (1) 2 (b) and (4) 2 (b), subparagraph 2 (b) of Article 38-2, Article 40 (2) 2, subparagraph 2 (b) of Article 40-3, and Article 41 (7) 2 (b), shall also apply, respectively, where five years have not passed, as at January 1, 2021, from the date the first liability to pay property tax arises on the relevant real property acquired until December 31, 2020. In such cases, the period for reduction of property tax shall be the remaining period, as at January 1, 2021, which has not passed five years from the date the first liability to pay property tax on the relevant real estate has arisen. |
| (2) | The amended provisions of Articles 43 (3) 2 and 44 (1) 2 (b) shall also apply, respectively, where five years have not passed, as at January 1, 2020, from the date the first liability to pay property tax arises on the relevant real property acquired until December 31, 2019. In such cases, the period for reduction of property tax shall be the remaining period, as at January 1, 2020, which has not passed five years from the date the first liability to pay property tax on the relevant real estate has arisen. |
Article 6 (Applicability to Application of Reduction or Exemption of Property Tax for Placing on Coastal Line)
The provisions on the reduction of property tax among the amended provisions of Article 64 (2), excluding its subparagraphs, shall also apply where five years have not passed, as at the time this Act enters into force, from the date the first liability to pay property tax arises as on the relevant ship, acquisition tax on which has been reduced before this Acts enters into force. In such cases, the period for reduction of property tax on the relevant ship shall be the remaining period, as at the time this Act enters into force, which has not passed five years from the date the first liability to pay property tax on the relevant real estate has arisen. Article 7 (Applicability to Application of Reduction or Exemption of Property Tax for Air Transport Service Provider, etc.)
The provisions on the reduction of property tax among the amended provisions of the main sentence of Article 65, shall also apply where five years have not passed, as at the time this Act enters into force, from the date the first liability to pay property tax arises on the relevant aircraft (excluding the aircraft acquired by a person falling under the amended provisions of the proviso of the same Article), acquisition tax on which has been reduced before this Acts enters into force. In such cases, the period for reduction of property tax for the relevant aircraft shall be the remaining period, as at the time this Act enters into force, which has not passed five years from the date the first liability to pay property tax on the relevant real estate has arisen. Article 8 (General Transitional Measures)
Local taxes imposed, reduced or exempted, or to be imposed, reduced or exempted, pursuant to the former provisions as at the time this Act enters into force, shall be governed by the former provisions.
Article 9 (Transitional Measures concerning Amendment of Criteria for Reduction for Improvement of Housing in Agricultural and Fishing Villages)
| (1) | Where a person selected as a person subject to housing improvement according to a project plan under the former provisions of Article 16 before this Act enters into force, acquires a house after this Act enters into force, the standards for areas of such housing shall be governed by the amended provisions or former provisions of Article 16, whichever are more favorable. |
| (2) | Notwithstanding the amended provisions of Article 16, the former provisions shall govern the reduction or exemption of property tax on a house, on which acquisition tax has been reduced or exempted pursuant to the former provisions of Article 16 and for which five years have not passed, as at the time this Act enters into force, from the date the first liability to pay property tax has arisen after the acquisition of such house. |
Article 10 (Transitional Measures concerning Collection of Acquisition Tax on All-Inclusive Transfer, etc. of Assets, as Penalty)
Notwithstanding the amended provisions of Article 57-2 (3) 6 and (4), the former provisions shall govern the collection of acquisition tax reduced or exempted before this Act enters into force, as a penalty. Article 11 (Transitional Measures concerning Reduction or Exemption of Acquisition Tax on Real Estate, etc. for Gratuitous Donation)
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 and 3 Omitted.
ADDENDA <Act No. 16133, Dec. 31, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 16172, Dec. 31, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 16407, Apr. 30, 2019>
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. 16413, Apr. 30, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
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. 16652, Nov. 26, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 16865, Jan. 15, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, that the amended provisions of Article 9 (2) (limited to the part citing Article 146 of the Local Tax Act), 17-2 (2), the proviso of subparagraph 1 of Article 20, the main clause of Article 22 (2) (limited to the part citing Article 146 of the Local Tax Act), Article 22 (4), 29 (2) 2 (c), 29 (3), the main clause of 41 (2), Article 41 (4) and (6), the main clause of Article 50 (2), Article 50 (4), 53, the main clause of Article 89 (2) (limited to the part citing Article 145 of the Local Tax Act), Article 89 (4), and the main clause of Article 90 (2) (limited to the part citing Article 146 of the Local Tax Act) shall enter into force on January 1, 2021. Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after January 1, 2020.
Article 3 (Applicability to Collection of Reduction or Exemption as Penalty from Cultural and Arts Organizations and Sports Organizations)
The amended provisions of Article 52 (3) shall begin to apply from the first case where acquisition tax is exempted after January 1, 2020. Article 4 (Applicability to Collection of Reduction or Exemption as Penalty from Ships Fueled by Natural Gas)
The amended provisions of the proviso of Article 64 (3) and the subparagraphs of that paragraph shall begin to apply form the first case where acquisition tax is reduced or exempted after January 1, 2020. Article 5 (Applicability to Reduction or Exemption for Urban Development Projects)
Article 6 (Applicability to Reduction or Exemption for Foreign Investment)
Article 7 (Applicability to Collection of Reduced Acquisition Tax as Penalty)
The amended provisions of Article 178 (2) shall begin to apply from the first cases where acquisition tax is reduced on real estate after this Act enters into force. Article 8 (Special Cases concerning Reduction or Exemption for Previous Agricultural Corporations)
Notwithstanding the amended provisions of provisions, with exemption of the subparagraphs, of Article 11 (1), acquisition tax shall be exempted on farmland acquired by an agricultural corporation whose registration for incorporation is made before January 1, 2020 within two years from the date of registration for incorporation to use for farming, woodland acquired to create farmland pursuant to relevant statutes and facilities falling under any of the subparagraphs of Article 6 (2). In such cases, Article 11 (3) shall apply to collecting the reduced portion of acquisition tax as a penalty. Article 9 (Special Cases concerning Reduction or Exemption for Korea Institute of Radiological and Medical Sciences)
Acquisition tax on real estate acquired by the Korea Institute of Radiological and Medical Sciences under the amended provisions of Article 37 (1) 7 to use directly for its unique duties, whose first liability to pay property tax on the relevant real estate arises less than five years ago, shall be reduced (excluding cases where such real estate is not used for its unique duties as at the tax base date) by 50/100 from January 1, 2021 for five years from the date the first liability to pay property tax on the relevant real estate arises after the acquisition of the relevant real estate. In such cases, the period for reduction or exemption of property tax shall be the remainder of five years from the date the first liability to pay property tax on the relevant real estate, beginning on January 1, 2021. Article 10 (General Transitional Measures)
The former provisions shall apply to the local taxes reduced or exempted, or to be imposed, reduced, or exempted pursuant to the former provisions as January 1, 2020.
Article 11 (Transitional Measures concerning Reduction or Exemption for Former Agricultural Corporations)
| (1) | Notwithstanding the amended provisions of provisions, with exception of the subparagraphs, of Article 11 (1), acquisition tax and property tax on real estate acquired by a corporation falling under any subparagraphs of Article 11 (1) and real estate used directly for the relevant purposes as at the tax base date shall be reduced by 50/100 until December 31, 2020, respectively, pursuant to paragraph (2) of that Article. In such cases, paragraph (3) shall apply to collecting the reduced portion of acquisition tax, as a penalty. |
| (2) | Notwithstanding the amended provisions of provisions, with exception of the subparagraphs, of Article 11 (1), registration license tax on the incorporation registration of a corporation falling under the subparagraphs of Article 11 (1) shall be exempted until December 31, 2020 pursuant to paragraph (4) of that Article. |
Article 12 (Transitional Measures concerning Collection of Reduction or Exemption as Penalty on Rental Housing)
Notwithstanding the amended provisions of Article 31 (4), the former provisions shall apply to collecting the property tax reduced or exempted before January 1, 2020 as a penalty. Article 13 (Transitional Measures concerning Collection of Reduction or Exemption as Penalty on Long-Term Private Rental Housing)
Notwithstanding the amended provisions of Article 31-3 (2), the former provisions shall apply to collecting the property tax reduced or exempted before January 1, 2020, as a penalty. Article 14 (Transitional Measures concerning Collection of Reduction or Exemption as Penalty on Scientific Research Organizations and Scholarship Organizations)
Notwithstanding the amended provisions of Article 45 (3), the former provisions shall apply to collecting the acquisition tax reduced or exempted before January 1, 2020, as a penalty. Article 15 (Transitional Measures concerning Collection of Reduction or Exemption as Penalty on Libraries)
Notwithstanding the amended provisions of Article 52 (2), the former provisions shall apply to collecting the acquisition tax and registration license tax reduced or exempted before January 1, 2020, as a penalty. Article 16 (Transitional Measures concerning Reduction or Exemption on Real Estate for Logistics Facilities)
Notwithstanding the amended provisions of Article 71 (2), the former provisions shall apply to the reduction or exemption of property tax on real estate for logistics facilities acquired before January 1, 2020. Article 17 (Transitional Measures concerning Reduction or Exemption and Collection as Penalty for Urban Development Projects)
Article 18 (Transitional Measures concerning Reduction or Exemption on Start-Up Businesses in Enterprise City Development Zones or Regional Development Project Zones)
Notwithstanding the amended provisions of Article 75-2, the former provisions shall apply to the criteria for reduction or exemption on real estate acquired by a project operator who starts a new business or newly establishes a place of business within an enterprise city development zone, etc. before January 1, 2020. Article 19 (Transitional Measures concerning Collection of Reduction or Exemption as Penalty on Industrial Complexes)
Notwithstanding the amended provisions of Article 78 (1) and (6), the former provisions shall apply to collection the acquisition tax and property tax reduced or exempted before January 1, 2020, as a penalty.
ADDENDA <Act No. 17039, Feb. 18, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDA <Act No. 17278, May 19, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 17460, Jun. 9, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 17474, Aug. 12, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Reduction or Exemption for Rental Housing)
| (1) | The amended provisions of Article 31 (2) shall begin to apply from the first case where a rental business entity acquires multi-family housing or officetels for rent after this Act enters into force. |
| (2) | The amended provisions of Article 31 (4) shall begin to apply from the first case where a rental business entity acquires and registers multi-family housing and officetels for rent after this Act enters into force or newly register the multi-family housing and officetels held before this Act enters into force. |
Article 3 (Applicability to Reduction or Exemption for Long-Term Private Rental Housing)
The amended provisions of Article 31-3 (1) shall begin to apply from the first cases where a person intends to rent publicly-funded private rental housing defined in subparagraph 4 of Article 2 of the Special Act on Private Rental Housing and long-term private rental housing defined in subparagraph 5 of that Article acquires or registers multi-family housing and officetels for rent after this Act enters into force or newly registers the multi-family housing and officetels held before this Act enters into force. Article 4 (Applicability to Reduction or Exemption for First-Time Home Buyers)
The amended provisions of Article 36-3 shall begin to apply form the first acquisition after July 10, 2020. Article 5 (Applicability to Reduction or Exemption for Merger and Spilt-off of Enterprises)
The amended provisions of Article 57-2 (4) shall begin to apply from the first cases where the fixed assets for business use are acquired after this Act enters into force. Article 6 (Transitional Measures concerning Reduction or Exemption for Rental Housing)
| (1) | The former provisions shall apply to reduction or exemption of acquisition tax on multi-housing and officetels acquired by a rental business entity for rent before this Act enters into force. |
| (2) | The former provisions shall apply to reduction or exemption of property tax on multi-housing and officetels registered by a rental business entity for rent before this Act enters into force |
Article 7 (Transitional Measures concerning Reduction or Exemption for Long-Term Private Rental Housing)
The former provisions shall apply to reduction or exemption of property tax on multi-family housing and officetels acquired and registered for rend by a person who intends to rent publicly-funded private rental housing defined in subparagraph 4 of Article 2 of the Special Act on Private Rental Housing and long-term private rental housing defined in subparagraph 5 of that Article befor this Act enters into force.
ADDENDA <Act No. 17598, Dec. 8, 2020>
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. 17651, Dec. 22, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2021. (Proviso Omitted.)
Articles 2 through 32 Omitted.
ADDENDA <Act No. 17771, Dec. 29, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2021: Provided, That the amended provisions of Article 64-2 shall enter into force on January 30, 2021. Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Reduction or Exemption for Radio Stations for 5G Mobile Communications)
Article 4 (Applicability to Reduction or Exemption for Small or Medium Start-up Enterprises)
The amended provisions of Article 58-3 (1), (2) and (4) shall begin to apply from the first incorporation after this Act enters into force. Article 5 (Applicability to Reduction or Exemption for Radio Stations of Intelligent Maritime Transport Information Services)
Article 6 (Transitional Measures concerning Collection of Reduction or Exemption as Penalty on Farmland of Returning Farmers)
Notwithstanding the amended provisions of Article 6 (1) 1, the former provisions shall apply to collecting the acquisition tax reduced or exempted before this Act enters into force. Article 7 (Transitional Measures concerning Reduction or Exemption of Acquisition Tax on Long-Term Rental Housing)
Article 8 (Transitional Measures concerning Reduction or Exemption for Major Colleges)
| (1) | Where property tax is reduced or exempted pursuant to Article 44 (1) before this Act enters into force, the former provision may apply, notwithstanding the amended provisions of Article 44 (2). |
| (2) | Where the former provisions or the amended provisions are applicable to the reduction or exemption of property tax under paragraph (1), the same provisions shall continuously apply during the period of reduction or exemption by selecting one of them. |
Article 9 (Transitional Measures concerning Reduction or Exemption for Small or Medium Start-up Enterprises)
Notwithstanding the amended provisions of Article 58-3 (1), (2) and (4), the former provisions shall apply to the reduction of local taxes on an enterprise that starts a business before this Act enters into force. Article 10 (Transitional Measures concerning Reduction or Exemption for Korea SMEs and Startups Agency)
| (1) | Notwithstanding the amended provisions of the main clause of Article 59 (3), the former provisions shall apply to the reduction of property tax on real estate for factories acquired before this Act enters into force. |
| (2) | Notwithstanding the amended provisions of Article 59 (2) through (4), the former provisions shall apply to collecting the acquisition tax and property tax reduced or exempted before this Act enters into force, as a penalty. |
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.
Articles 2 through 26 Omitted.
ADDENDA <Act No. 17883, Jan. 5, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA <Act No. 17893, Jan. 12, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 23 Omitted.
ADDENDA <Act No. 17919, Mar. 9, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 18075, Apr. 20, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 18091, Apr. 20, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Special Cases concerning Delinquent Tax of Small Private Enterprises)
ADDENDA <Act No. 18128, Apr. 20, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 10 Omitted.
ADDENDUM <Act No. 18209, Jun. 8, 2021>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 18358, Jul. 27, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 18425, Aug. 17, 2021>
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. 18437, Aug. 17, 2021>
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. 18503, Oct. 19, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 Omitted.
ADDENDA <Act No. 18522, Nov. 30, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Act No. 18656, Dec. 28, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2020: Provided, that the amended provisions of Article 2 (1) 8-2, the proviso, with the exception of the subparagraphs, of Article 31 (2), Article 36-2 (1) 3, the main clause, with the exception of the subparagraphs, of Article 36-3 (1) (limited to the part under Article 10-3 of the Local Tax Act), the main clause, with the exception of the subparagraphs, of Article 40-2 (1), the main clause, with the exception, of Article 40-2 (2) and Article 75-4 shall enter into force on January 1, 2023; and the amended provisions of Article 2 of the Addenda of the Act on Restriction on Special Cases concerning Local Taxation, which is partially amended by Act No. 12955, shall enter into force on the date of its promulgation. Article 2 (General Applicability)
This Act shall begin to apply from the first tax liability arising after this Act enters into force.
Article 3 (Applicability to Reduction or Exemption for Farmland of Self-Employed Farmers)
| (1) | The amended provisions of Article 6 (1) shall begin to apply from the first case where farmland prescribed by Presidential Decree or woodland to create such farmland is acquired pursuant to that paragraph after this Act enters into force. |
| (2) | The amended provisions of Article 6 (4) shall apply even though 60 days have not passed since a person who acquires farmland, woodland to create farmland, and agricultural facilities as at the time of the enforcement of this Act became a returning farmer. |
Article 4 (Applicability to Reduction or Exemption for Rental Housing)
| (1) | The amended provisions of Article 31 (1) and (4) shall begin to apply from the first tax liability arising after this Act enters into force: Provided, That the part concerning the Local Tax Act within the amended provisions of Article 31 (4) shall begin to apply from the first case where a rental business entity acquires multi-family housing and officetels for rent and registers them after this Act enters into force or a rental business entity newly registers multi-family housing and officetels held before this Act enters into force. |
| (2) | Notwithstanding the amended provisions of Article 31 (5), the former provisions shall apply to collecting the property tax reduced or exempted before this Act enters into force, as a penalty. |
| (3) | The amended provisions of Article 31 (7) shall begin to apply from the first case where the Korea Land and Housing Corporation newly builds and supplies houses or buildings by changing or demolishing the number of units or structures, etc. after purchasing them pursuant to Article 43 (1) of the Special Act on Public Housing after this Act enters into force. |
Article 5 (Applicability to Reduction or Exemption for Long-Term Private Rental Housing)
| (1) | The amended provisions of Article 31-3 (1) shall begin to apply from the first tax liability arising after this Act enters into force: Provided, That the part concerning Article 4 of the Local Tax Act within the amended provisions of Article 31-3 (1) shall begin to apply from the first case where a person who intends to rent publicly-funded private rental housing defined in subparagraph 4 of Article 2 of the Special Act on Private Rental Housing and long-term private rental housing defined in subparagraph 5 of that Article acquires multi-family housing and officetels for rent and registers them after this Act enters into force or newly registers multi-family housing and officetels held before this Act enters into forced. |
| (2) | Notwithstanding the amended provisions of Article 31-3 (2), the former provisions shall apply to collecting the property tax reduced or exempted before this Act enters into force as a penalty. |
Article 6 (Applicability to Reduction or Exemption for Persons Concluded Agreements to Sell Houses for Rental Purposes of Public Housing Project Operators)
The amended provisions of Article 31-5 (1) and (2) shall begin to apply from the first case where an agreement is concluded to sell houses, etc. to a public housing project operator after this Act enters into force. Article 7 (Applicability to Reduction or Exemption for Houses subject to Reverse Annuity Mortgage)
The amended provisions of Article 35 (1) 2 (a) and (b) shall begin to apply from the first case where with respect to registration of a house provided as a security, which meets the criteria for providing guarantees for reverse annuity mortgages, a person who provides the house as a security assumes registration license tax after this Act enters into force. Article 8 (Applicability to Reduction or Exemption for Real Estate to Be Used for Research Institutes Affiliated with Middle-Standing Enterprises)
The amended provisions of Article 46 (3) shall begin to apply from the first case where a middle-standing enterprise falling under Article 10 (1) 1 (a) (ii) of the Act on Restriction of Special Cases concerning Taxation acquires real estate to use directly for a research institute affiliated with the enterprise after this Act enters into force. Article 9 (Applicability to Reduction or Exemption for Buildings with Seismic Performance)
The amended provisions of the main clause of Article 47-4 (3) shall also apply to the buildings that were certified as an earthquake-safe facility less than 180 days ago. Article 10 (Applicability to Reduction or Exemption for Re-Acquisition of Assets by Small or Medium Enterprises)
The amended provisions of Article 57-3 (4) shall also apply to small or medium enterprises that sell assets to the Korea Asset Management Corporation pursuant to paragraph (3) of that Article as at the time this Act enters into force. Article 11 (Applicability to Tax Credit for Electronic Filing of Individual Local Income Tax)
Article 12 (Transitional Measures concerning Collection of Reduction or Exemption of Acquisition Tax as Penalty on First-Time Home Buyers)
Notwithstanding the amended provisions of Article 36-3 (4) 1 through 3, the former provisions shall apply to collecting the acquisition tax reduced or exempted before this Act enters into force as a penalty. Article 13 (Transitional Measures concerning Reduction or Exemption of Property Registered after acquisition due to Merger between Financial Companies)
Notwithstanding the amended provisions of the main clause of Article 57-2 (10), the former provisions shall apply to the reduction of registration license tax on property registered within three years from the date of merger when the merger between financial companies is made before this Act enters into force. Article 14 (Transitional Measures concerning Imposition of Acquisition Tax on Replacement Motor Vehicles)
Notwithstanding the amended provisions of the proviso of Article 66 (1), the former provisions shall apply to the imposition of acquisition tax on the excess where the value of motor vehicles, etc. acquired through exchange before this Act enters into force exceeds the value of the previous motor vehicles, etc. Article 15 (Transitional Measures concerning Reduction or Exemption for Relocating Corporations and Factories to Provinces)
| (1) | Notwithstanding the amended provisions of Article 79 (1), where a corporation directly engaging in business by establishing its head office or main office in a large city before this Act enters into force relocates its head office or main office to an area other than over-concentration limitation zones, the former provisions shall apply to the reduction, exemption, and collection as a penalty on acquisition tax and property tax. |
| (2) | Notwithstanding the amended provisions of Article 79 (2), the former provisions shall apply to the exemption of registration license tax where the corporation registered in a large city before this Act enters into force relocates its head office or main office in an area other than over-concentration limitation zones. |
| (3) | Notwithstanding the amended provisions of Article 80 (1), the former provisions shall apply to the reduction, exemption, and collection as a penalty on acquisition tax and property tax where a person directly engaging in business with factory facilities equipped with in a large city before this Act enters into force closes such factory and relocates its factory to an area other than over-concentration limitation zones, where the establishment of a factory is not prohibited or restricted. |
Article 16 (Transitional Measures concerning Tax Credit for Payment through Automatic Transfer)
The former provisions shall apply to tax credit for taxpayers who files for payment of local taxes by electronic services and automatic transfer before municipal ordinance is promulgated or amended pursuant to the amended provision of Article 92-2 (1) 1 and 2.
ADDENDA <Act No. 18661, Dec. 28, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 18682, Jan. 4, 2022>
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. 18755, Jan. 11, 2022>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 40 Omitted.
ADDENDA <Act No. 19228, Mar. 4, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation: Provided, That among the Acts amended pursuant to Article 7, the amended parts of the Acts that are promulgated before this Act enters into force but their enforcement dates have not yet arrived shall enter into force on the enforcement date prescribed in each relevant Act. Articles 2 through 8 Omitted.
ADDENDA <Act No. 19230, Mar. 14, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 16 Omitted.
ADDENDA <Act No. 19231, Mar. 14, 2023>
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. 19232, Mar. 14, 2023>
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 from the tax liability arising after January 1, 2023.
Article 3 (Applicability to Collection of Reduced Acquisition Tax as Penalty from Korea Rural Community Corporation)
The amended provisions of the proviso of Article 13 (2) shall begin to apply from the first case where acquisition tax is reduced after January 1, 2023. Article 4 (Applicability to Reduction or Exemption of Property Tax on Multi-Family Housing for Lease)
The amended provisions of Article 31 (4) 2 shall also apply to cases where the tax liability on multi-family housing or officetels for leas arises in 2022 and they fall under the requirements under the amended provisions. Article 5 (Applicability to Reduction or Exemption of Acquisition Tax for First-Time Home Buyers)
The amended provisions of Article 36-3 shall begin to apply from the first acquisition after June 21, 2022. Article 6 (Applicability to Collection of Reduced Acquisition Tax as Penalty from Implementer of Tourism Complex Development Project)
The amended provisions of the proviso of Article 54 (1) shall begin to apply from the first case where acquisition tax is reduced after January 1, 2023. Article 7 (Applicability to Reduction or Exemption of Local Taxes for Relocating Public Agencies to Provinces)
| (1) | The amended provisions of Article 81 (1) shall begin to apply from the first case where real estate is acquired after January 1, 2023. |
| (2) | The amended provisions of Article 81 (2) shall begin to apply from the first case where a public agency is relocated to a province after January 1, 2023. |
Article 8 (Special Cases concerning Reduction or Exemption of Property Tax for Knowledge Industry Centers)
Notwithstanding the amended provisions of Article 58-2 (1) 2 and 58-2 (2) 2, where real estate is acquired pursuant to the former provisions of Article 58-2 (1) 1 and 58-2 (2) 2 before January 1, 2023, property tax shall be reduced by 35/100 for five years from January 1, 2023. Article 9 (Transitional Measures concerning Reduction or Exemption of Local Taxes on Social Welfare Corporations)
| (1) | Notwithstanding the amended provisions of Article 22 (1) and (2), the acquisition tax exempted pursuant to the former provisions of the main clause, with the exception of the subparagraph, of Article 22 (1) before January 1, 2023 shall be collected as a penalty pursuant to the former provisions of the proviso, with the exception of the subparagraphs, of Article 22 (1). |
| (2) | Notwithstanding the amended provisions of Article 22 (3), where property tax (including an amount imposed pursuant to Article 112 of the Local Tax Act; hereafter in this paragraph, the same shall apply) and local source and facility tax for firefighting under Article 146 (3) of the Local Tax Act of the year 2022 are exempted pursuant to the former provisions of Article 22 (2) before January 1, 2023 (including cases where real estate acquired from June 2, 2022 to December 31, 2022 and exempted from acquisition tax pursuant to the former provisions of Article 22 (1) is used directly for the relevant social welfare programs), property tax and local source and facility tax for firefighting shall be exempted until December 31, 2024, pursuant to the former provisions of Article 22 (2). |
Article 10 (Transitional Measures concerning Collection of Reduced Acquisition Tax as Penalty from Persons Establishing Knowledge Industry Centers)
Article 11 (Transitional Measures concerning Reduction or Exemption for Urban Development Projects)
| (2) | Acquisition tax shall be reduced until December 31, 2025 on a person subject to the imposition of acquisition tax pursuant to paragraph (1) pursuant to the former provisions of Article 74 (5) 3. |
| (3) | Where real estate equivalent to liquidation money is acquired before January 1, 2023 and acquisition tax on the relevant real estate is reduced pursuant to the former provisions of Article 74 (5) 3 or acquisition tax is reduced pursuant to paragraph (2), the reduced portion of acquisition tax shall be collected as a penalty pursuant to the proviso, with the exception of the subparagraphs, of Article 74 (5). |
Article 12 (Transitional Measures concerning Collection of Reduced or Exempted Acquisition Tax as Penalty from Executives and Employees of Public Agencies Relocated to Provinces)
Notwithstanding the amended provisions of Article 81 (4) and (6), the former provisions shall apply to collecting the reduced portion of acquisition tax for executives or employees of a public agency relocated to a province or a public official of a central administrative agency before January 1, 2023, as a penalty. Article 13 (Transitional Measures concerning Exclusion of Duplicative Reduction or Exemption)
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. 19422, Jun. 1, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability to Reduction or Exemption for Support for Jeonse Fraud Victims)
| (1) | The amended provisions of Article 36-3 (3) 5 and Article 36-4 (1) through (3) shall also apply to the cases where a Jeonse fraud victim under the Special Act on Support for Jeonse Fraud Victims and Housing Stabilization acquires a house affected by Jeonse frauds or completes the leasehold registration before this Act enters into force. |
| (2) | The amended provisions of Article 36-4 (4) shall also apply to the cases where a public housing project operator under Article 4 of the Special Act on Public Housing acquires a house affected by Jeonse frauds before this Act enters into force pursuant to Article 25 (3) of the Special Act on Support for Jeonse Fraud Victims and Housing Stabilization. |
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.
ADDENDA <Act No. 19634, Aug. 16, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 7 Omitted.