SPECIAL TAX TREATMENT CONTROL ACT Wholly Amended by Act No. 5584, Dec. 28, 1998 Amended by Act No. 5960, Mar. 31, 1999 Act No. 5980, Apr. 30, 1999 Act No. 5982, May 24, 1999 Act No. 5996, Aug. 31, 1999 Act No. 6045, Dec. 28, 1999 Act No. 6054, Dec. 28, 1999 Act No. 6055, Dec. 28, 1999 Act No. 6073, Dec. 31, 1999 Act No. 6136, Jan. 12, 2000 Act No. 6194, Jan. 21, 2000 Act No. 6273, Oct. 21, 2000 Act No. 6297, Dec. 29, 2000 Act No. 6299, Dec. 29, 2000 Act No. 6305, Dec. 29, 2000 Act No. 6312, Dec. 29, 2000 Act No. 6372, Jan. 16, 2001 Act No. 6480, May 24, 2001 Act No. 6501, Aug. 14, 2001 Act No. 6510, Aug. 14, 2001 Act No. 6519, Nov. 21, 2001 Act No. 6538, Dec. 29, 2001 Act No. 6689, Apr. 20, 2002 Act No. 6705, Aug. 26, 2002 Act No. 6708, Aug. 26, 2002 Act No. 6762, Dec. 11, 2002 Act No. 6852, Dec. 30, 2002 Act No. 6867, May 10, 2003 Act No. 6916, May 29, 2003 Act No. 7003, Dec. 30, 2003 Act No. 7030, Dec. 31, 2003 Act No. 7066, Jan. 20, 2004 Act No. 7191, Mar. 12, 2004 Act No. 7210, Mar. 22, 2004 Act No. 7216, Jul. 26, 2004 Act No. 7220, Oct. 5, 2004 Act No. 7240, Oct. 22, 2004 Act No. 7281, Dec. 31, 2004 Act No. 7284, Dec. 31, 2004 Act No. 7311, Dec. 31, 2004 Act No. 7322, Dec. 31, 2004 Act No. 7332, Jan. 5, 2005 Act No. 7428, Mar. 31, 2005 Act No. 7577, Jul. 13, 2005 Act No. 7601, Jul. 13, 2005 Act No. 7678, Aug. 4, 2005 Act No. 7775, Dec. 29, 2005 Act No. 7839, Dec. 31, 2005 Act No. 7845, Jan. 2, 2006 Act No. 7849, Feb. 21, 2006 Act No. 7949, Apr. 28, 2006 Act No. 8050, Oct. 4, 2006 Act No. 8086, Dec. 26, 2006 Act No. 8138, Dec. 30, 2006 Act No. 8146, Dec. 30, 2006 Act No. 8347, Apr. 11, 2007 Act No. 8362, Apr. 11, 2007 Act No. 8367, Apr. 11, 2007 Act No. 8371, Apr. 11, 2007 Act No. 8387, Apr. 27, 2007 Act No. 8466, May 17, 2007 Act No. 8493, Jun. 1, 2007 Act No. 8572, Aug. 3, 2007 Act No. 8827, Dec. 31, 2007 Act No. 8852, Feb. 29, 2008 Act No. 8966, Mar. 21, 2008 Act No. 8986, Mar. 28, 2008 Act No. 9088, Jun. 5, 2008 Act No. 9131, Sep. 26, 2008 Act No. 9272, Dec. 26, 2008 Act No. 9276, Dec. 29, 2008 Act No. 9353, Jan. 30, 2009 Act No. 9366, Jan. 30, 2009 Act No. 9370, Jan. 30, 2009 Act No. 9347, Jan. 30, 2009 Act No. 9432, Feb. 6, 2009 Act No. 9512, Mar. 25, 2009 Act No. 9584, Apr. 1, 2009

The purpose of this Act is to contribute to the sound development of national economy by ensuring fair taxation and implementing efficient tax policies through prescribing matters concerning special cases of taxation, such as tax reduction or exemption, excessive taxation, etc., along with matters concerning restriction on such special cases.

(1) For the purposes of this Act, the definitions of the terms used herein shall be as follows: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005>1. The term “national” means a resident under the Income Tax Act and a domestic corporation under the Corporation Tax Act;2. The term “taxable year” means a taxable period under the Income Tax Act or a business year under the Corporation Tax Act;3. The term “tax base return” means the final tax base return under Articles 70 through 72, 74, and 110 of the Income Tax Act, and the tax base return under Article 60 of the Corporation Tax Act;4. The term “gross income” means gross incomes under Article 24 of the Income Tax Act, or revenues under Article 14 of the Corporation Tax Act;5. The term “deductible expenses” means necessary expenses under Article 27 of the Income Tax Act, or deductible expenses under Article 14 of the Corporation Tax Act;6. The term “taxation carried forward” means that, where an individual transfers his fixed assets, etc. used for the purposes of business (hereafter in this subparagraph referred to as the “fixed assets, etc. for a previous business”) to a corporation as investment in kind, etc., an income tax on such income as derived from the transfer under Article 94 of the Income Tax Act (hereinafter referred to as the “transfer income tax”) shall not be imposed on the individual transferring these fixed assets, etc., but the corporation acquiring such assets, etc. shall, if it is to transfer these fixed assets, etc. used for the purposes of the business concerned, pay as the corporation tax an amount equivalent to the calculated transfer income tax under Article 104 of the same Act, which is calculated deeming that no other assets had been transferred during the taxable period whereto belongs the date on which the individual transferred the fixed assets, etc. for a previous business to such corporation;7. The term “taxation deferment” means that, where any individual transfers the fixed assets used for his business (hereafter referred to as the “fixed assets, etc. for the previous business” in this subparagraph) in order to relocate his factory, etc. and acquires the fixed assets used for other business (hereafter referred to as the “fixed assets, etc. for the new business” in this subparagraph) in use of the transfer value, the transfer income tax shall not be levied on the amount that is calculated by the following formula (in cases where the acquisition value of the fixed assets, etc. for the new business exceeds the transfer value of the fixed assets, etc. for the previous business, the marginal profit that accrues from the transfer of the fixed assets, etc. for the previous business shall be the ceiling; hereinafter referred to as the “deferred amount of taxation”) from among the marginal profit that accrues from the transfer of the fixed assets, etc. for the previous business, but when the fixed assets, etc. for the new business are transferred, an amount that is obtained by subtracting the deferred amount of the taxation from the acquisition value of the fixed assets, etc. for the new business shall be deemed the acquisition value and then the transfer income tax shall be levied thereon:The marginal profit that accrues from the transfer of the fixed assets, etc. for the previous business × (the acquisition value of the fixed assets, etc. for the new business / the transfer value of the fixed assets, etc. for the previous business).8. The term “special taxation” means a tax reduction or exemption, such as the application of special tax rates, reduction of or exemption from a tax amount, tax credits, income deduction, inclusion of reserves in deductible expenses, etc. in cases where the specified conditions are satisfied, as well as an excessive taxation, such as inclusion in gross income or non-inclusion in deductible expenses, etc. for specific purposes;9. The term “Seoul Metropolitan area” means the Seoul Metropolitan area provided for in subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act; and10. The term “over-concentration control zone of the Seoul Metropolitan area” means the over-concentration control zone provided for in Article 6 (1) 1 of the Seoul Metropolitan Area Readjustment Planning Act.(2) Except as otherwise provided for in this Act, the definitions of any terms other than those provided for in paragraph (1) shall be subject to the examples of the same terms as used in such Acts as set forth in Article 3 (1) 1 through 19.(3) Except as specifically provided for in this Act, the classification of types of business used in this Act shall be subject to the Korea Standard Industrial Classification publicly announced by the Commissioner of the Korea National Statistical Office under Article 22 of the Statistics Act: Provided, That the types of business that become otherwise ineligible for the special taxation under this Act due to a change in the Korea Standard Industrial Classification shall remain eligible for the special taxation applicable to the relevant types of business under the previous Korea Standard Industrial Classification for the taxable year during which such change in the Korea Standards Industrial Classification occurs and the immediately following taxable year. <Newly Inserted by Act No. 6538, Dec. 29, 2001; Act No. 8387, Apr. 27, 2007; Act No. 8827, Dec. 31, 2007>

(1) The special taxation shall be provided for in this Act, the Basic Act for National Taxes, treaties, and the Acts falling under any of the following subparagraphs: <Amended by Act No. 6054, Dec. 28, 1999; Act No. 7210, Mar. 22, 2004; Act No. 7849, Feb. 21, 2006; Act No. 8138, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Income Tax Act;2. Corporation Tax Act;3. Inheritance Tax and Gift Tax Act;4. Value-Added Tax Act;5. Individual Consumption Tax Act;6. Liquor Tax Act;7. Stamp Tax Act;8. Securities Transaction Tax Act;9. National Tax Collection Act;10. Transportation Energy Environment Tax Act;11. Customs Act;12. Local Tax Act;13. Provisional Import Surtax Act;14. Deleted; <by Act No. 6538, Dec. 29, 2001>15. The Act for the Coordination of International Tax Affairs;16. Act on Real Name Financial Transactions and Guarantee of Secrecy;17. Deleted; <by Act No. 6299, Dec. 29, 2000>18. Education Tax Act;19. Special Tax Law for Rural Development;20. Deleted; <by Act No. 5982, May 24, 1999>21. Inter-Korean Exchange and Cooperation Act;22. Act on Lump Sum-Raising Savings of Farming and Fishing Households;23. Act on Designation and Management of Free Trade Zones;24. Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities (limited to the taxes of the Jeju Special Self-Governing Province); and25. Comprehensive Real Estate Holding Tax Act.(2) The additional penalty tax and the transfer income tax shall not be included in the scope of taxes to be reduced or exempted under this Act, the Basic Act for National Taxes, treaties, and the Acts referred to in each subparagraph of paragraph (1), except as otherwise prescribed in the relevant Acts or treaties. <Amended by Act No. 6538, Dec. 29, 2001>

(1) In cases where a national operating a small or medium enterprise prescribed by Presidential Decree (hereinafter referred to as a “small or medium enterprise”) makes investment in the assets falling under any of the following subparagraphs (excluding any investment in the used assets) not later than December 31, 2009, an amount equivalent to 3/ 100 of the amount of the investment concerned shall be deducted from his income tax (limited to the income tax on business income) or corporation tax for the taxable year whereto belongs the date on which such investment is completed: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Business assets specified by 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”); and3. Facilities used in the information protection system under subparagraph 4 of Article 2 of the Framework Act on Informatization Promotion, of which the depreciation period is two years or longer (hereinafter referred to as “facilities for information protection system”).(2) In cases where the investment as provided for in paragraph (1) is made over two or more taxable years, the provisions of paragraph (1) may, in each taxable year in which such investment is made, apply to the amount invested for the taxable year concerned.(3) Such matters as may be necessary for the calculation of invested amounts under paragraph (2) shall be determined by Presidential Decree.(4) A national who desires to be eligible for the application of the provisions of paragraphs (1) and (2) shall make an application for tax credit under the conditions as prescribed by Presidential Decree.

Where such small or medium enterprisers as prescribed by the Presidential Decree invest the contribution, etc. for supporting projects of informatization of the small or medium enterprises, which is paid not later than December 31, 2009 pursuant to Article 18 of the Technological Renovation Promotion of Small and Medium Enterprise Act, Article 19 of the Industrial Technology Innovation Promotion Act, and Article 34 (2) of the Framework Act on Informatization Promotion, in any of the following facilities, such contribution, etc. may be included in deductible expenses by applying mutatis mutandis the provisions of Article 32 of the Income Tax Act and Article 36 of the Corporation Tax Act. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7949, Apr. 28, 2006; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Computers, their peripheral devices, software, telecommunications facilities and other tangible and intangible facilities used for the management of human and material resources of an enterprise including information about purchasing, design, construction works, production, inventory, personnel and business information in an electrical format, of which the depreciation period is two years or longer (hereinafter referred to as “facilities for enterprise resource planning”);2. Computers and their peripheral devices, software, telecommunications facilities and other tangible and intangible facilities used for demand forecast, contract, providing services, selling merchandise, delivery, settlement of payments, customer management or such in an electronic format, of which the depreciation period is two years or longer (hereinafter referred to as “facilities for electronic commerce”); and3. Any facilities other than those under subparagraphs 1 and 2, but used for informatization of an enterprise, as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6538, Dec. 29, 2001]

(1) A small or medium enterprise which is established in an area outside the over-concentration control zone of the Seoul Metropolitan area (hereinafter referred to as the “small or medium start-up enterprise”) and a national who is designated as an operator of a start-up business support center under Article 6 (1) of the Support for Small and Medium Enterprise Establishment Act, on or before December 31, 2009 shall be allowed the reduction of, or the exemption from, a tax amount equivalent to 50/100 of the income tax or corporation tax on incomes derived from the business concerned for the taxable year in which income has been derived for the first time from such business (where no income is derived from the business concerned by the taxable year whereto belongs the date on which five years have passed since the beginning of the business, the taxable year whereto belongs the date on which five years have passed) and also for the subsequent taxable years that will end within three years after the beginning of the following taxable year. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6194, Jan. 21, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7220, Oct. 5, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8086, Dec. 26, 2006; Act No. 8146, Dec. 30, 2006; Act No. 8362, Apr. 11, 2007>(2) A venture business under Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses (hereinafter referred to as a “venture business”) which is prescribed by Presidential Decree and which is certified as a venture business on or before December 31, 2009 under Article 25 of the same Act within 3 years after its formation (hereinafter referred to as a “small or medium start-up venture enterprise”), shall be allowed the reduction of, or an exemption from, a tax amount equivalent to 50/100 of the income tax or corporation tax on incomes derived from the business concerned for a taxable year whereto belongs the date on which income has been derived for the first time since such certification (where no income is derived from the business concerned by the taxable year whereto belongs the date on which five years have passed since such certification, the taxable year whereto belongs the date on which five years have passed) and for the subsequent taxable years that will end within three years after the beginning of the following taxable year: Provided, That any case to which paragraph (1) is applicable shall be excluded and in addition the same reduction or exemption shall not be given if such certification as a venture business is revoked during a reduction and exemption period, beginning with the taxable year whereto belongs the date of such revocation. <Newly Inserted by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(3) The scope of newly established small and medium enterprises and newly established small and medium venture enterprises shall be small and medium enterprises conducting the types of business under the following subparagraphs: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7220, Oct. 5, 2004; Act No. 7322, Dec. 31, 2004; Act No. 9272, Dec. 26, 2008>1. Mining business;2. Manufacturing business;3. Construction business;4. Restaurant business;5. Publishing business;6. Video and audio documentary production and distribution business (excluding video watching room operation business);7. Broadcasting business;8. Telecommunications business;9. Computer programming, system integration and management business;10. Information service business (excluding business providing news);11. Research and development business;12. Advertising business;13. Other scientific technology service business;14. Specialized design business;15. Exhibition and event agency business;16. Service business related to creation and art(excluding self-supporting artists);17. Engineering business prescribed by Presidential Decree (hereinafter referred to as “engineering business”);18. Distribution industry prescribed by Presidential Decree (hereinafter referred to as “distribution industry”);19. Business running private institutes teaching vocational technique under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons;20. Tourist accommodation business, international conference business, amusement facilities business under the Tourism Promotion Act and tourist facilities business prescribed by Presidential Decree;21. Business running welfare facilities for the aged under the Welfare of the Aged; and22. Industry in wartime under the Act on the Development of Industry in Wartime.(4) In applying the provisions of paragraphs (1) through (3), such cases as fall under any of the following subparagraphs shall not be regarded as the startup of a new business: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7322, Dec. 31, 2004>1. Where a previous business is succeeded to by a merger, division, investment in kind, or an acquisition of business or where a business of the same type is carried on through a takeover or purchase of the assets that have been used in a previous business: Provided, That in cases where the assets that are used for the previous business are taken over or purchased to run the same type of business and the ratio of the total value of the relevant assets to the total value of business assets, including lands, buildings and machinery, etc., which are determined by Presidential Decree, is not more than 50/100 and falls short of the ratio that is determined by Presidential Decree, such cases shall be excluded;2. Where a new corporation is founded by converting a business run by a resident into a corporation;3. Where a business of the same type as the one before its closure is conducted by starting a business again after its closure; and4. Where it is difficult to deem that a new business has been started, as it is the case with the expansion of the existing business or addition of another business line, etc.(5) Any national who desires to be eligible for the application of paragraphs (1) and (2) shall make an application for tax reduction or exemption as prescribed by Presidential Decree. <Amended by Act No. 5996, Aug. 31, 1999>

(1) Any of the small or medium enterprises which is engaged in a type of business eligible for reduction or exemption under the following subparagraph 1 shall be allowed the reduction of, or the exemption from, an amount equivalent to the tax amount computed by applying the reduction or exemption ratio under subparagraph 2 to the income tax or corporation tax on incomes accruing from the relevant business place for the taxable year ending on or before December 31, 2011: Provided, That in cases where the principle office or the main office of any domestic corporation is located in the Seoul Metropolitan area, all of its business places shall be deemed located in the Seoul Metropolitan area and the tax reduction or exemption ratio referred to in subparagraph 2 shall apply thereto: <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7577, Jul. 13, 2005; Act No. 7839, Dec. 31, 2005; Act No. 8371, Apr. 11, 2007; Act No. 8466, May 17, 2007; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Types of business subject to tax reduction or exemption:(a) Crops cultivating business;(b) Livestock business;(c) Fishery;(d) Mining;(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 from among transportation business;(j) Publishing 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 self-supporting artists);(v) Entrusted manufacturing business by OEM method prescribed by Presidential Decree;(w) Engineering business;(x) Distribution Industry;(y) Business running private institutes teaching vocational technique under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons;(z) Business running an automobile maintenance factory prescribed by Presidential Decree (hereafter referred to as “automobile maintenance factory” in this Article);(za) Ship management business under the Marine Transportation Act;(zb) Business running a medical institution under the Medical Service Act (excluding clinics, dental clinics and herb clinics; hereafter referred to as “medical service business” in this Article);(zc) Tourist business under the Tourism Promotion Act (excluding casinos, tourist amusement restaurants, amusement restaurants for exclusive use of foreigners; hereafter referred to as the “tourist business” in this Article);(zd) Business running welfare facilities for the aged under the Welfare of the Aged Act; and(ze) Industry in wartime under the Act on the Development of Industry in Wartime.2. Tax reduction or exemption ratio:(a) The business place where a small enterprise prescribed by Presidential Decree (hereafter referred to as a “small enterprise” in this Article) runs the wholesale business, the retail business, the medical service business, the automobile maintenance business and the tourist business (hereafter referred to as the “wholesale business, etc.” in this Article): 10/100;(b) The business place where a small enterprise runs, with the exception of the wholesale business, etc., the type of business subject to the tax reduction or exemption referred to in subparagraph 1 in the Seoul Metropolitan area: 20/100;(c) The business place where a small enterprise runs, with the exception of the wholesale business, etc., the type of business subject to the tax reduction or exemption referred to in subparagraph 1 in an area other than the Seoul Metropolitan area: 30/100;(d) The business place where a medium enterprise (hereafter referred to as a “medium enterprise” in this Article) other than small enterprises, runs the wholesale business, etc. in an area other than the Seoul Metropolitan area: 5/100;(e) The business place where a medium enterprise runs the knowledge-based business prescribed by Presidential Decree in the Seoul Metropolitan area: 10/100; and(f) The business place where a medium enterprise runs, with the exception of the wholesale business, etc., the type of business subject to the tax reduction or exemption referred to in subparagraph 1 in an area other than the Seoul Metropolitan area: 15/100.(2) Any national who intends to be governed by paragraph (1) shall make an application for tax reduction or exemption as prescribed by Presidential Decree. <Amended by Act No. 9272, Dec. 26, 2008>

(1) In cases where the amount (hereafter in this Article referred to as the “payment amount including bill of exchange, etc.”) falling under any of the following subparagraphs is included in the purchase price (including the purchase price that is paid by any national who runs his enterprise that is not a small or medium enterprise to any other small or medium enterprise in use of the network loan system; hereafter the same shall apply in this Article) that is paid by any national who runs the small or medium enterprise to any other small or medium enterprise on or before December 31, 2010, an amount that is computed in accordance with paragraph (2) shall be deducted from the income tax (limited to the income tax on the income accruing from the business) or the corporation tax: Provided, That if the deductible amount is in excess of 10/100 of the income tax or the corporation tax for the relevant taxable year, the ceiling of such deductible amount shall be 10/100: <Amended by Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 9131, Sep. 26, 2008>1. The amount that is settled by means of bill of exchange or a written request for the collection of sale proceeds;2. The amount that is spent by an exclusive-use card for corporate purchase, on which an agreement is concluded to the effect that the time limit for the payment of the purchase price to the selling enterprise is within 60 days from the date on which the tax invoice, etc. (referring to the tax invoice, the account statement and the receipt under the Value-Added Tax Act, the Income Tax Act and the Corporation Tax Act; hereafter in this paragraph the same shall apply) on the relevant transaction is prepared and a credit card business operator is not entitled to exercise his right to claim its repayment against the selling enterprise;3. The amount that is paid by making use of a loan against security of credit sales claims, on which an agreement is concluded to the effect that the time limit for repayment of loans extended to the purchasing enterprise is within 60 days from the date on which the tax invoice, etc. is prepared and the relevant financial institution cannot exercise the right to claim its repayment against the selling enterprise;4. The amount that is paid by making use of the purchase loan system, on which an agreement is concluded to the effect that the time limit for the price settlement by the purchasing enterprise is within 60 days from the date on which the tax invoice, etc. is prepared and the relevant financial institution cannot exercise the right to claim the repayment against the selling enterprise; and5. The amount (limited to the amount loaned to the selling enterprise) that is paid by making use of the network loan system, on which an agreement is concluded to the effect that the time limit for the price settlement by the purchasing enterprise is within 60 days from the date on which the tax invoice, etc. is prepared and the relevant financial institution exercises the right to claim the repayment against the selling enterprise prior to the date on which the tax invoice, etc. is prepared and the relevant financial institution exercises the right to claim the repayment against the purchasing enterprise after the date on which the tax invoice, etc. is prepared.(2) The amount that is deductible pursuant to paragraph (1) shall be an amount obtained by adding the amount referred to in subparagraph 1 to the amount referred to in subparagraph 2 (if the relevant amount is a negative figure, such amount shall be deemed a zero): <Amended by Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8493, Jun. 1, 2007; Act No. 9131, Sep. 26, 2008; Act No. 9272, Dec. 26, 2008>1. [The payment amount including bill of exchange, etc. for which the payment deadline, the repayment deadline or the time limit for the price settlement is within 30 days from the date on which the tax invoice, etc. is prepared － the amount of promissory note that is settled to pay the purchase price (limited to an amount that is smaller than or the same as the payment amount including bill of exchange, etc., for which the payment deadline, the repayment deadline or the time limit for the price settlement is within 30 days from the date on which the tax invoice, etc. is prepared)] × 4/1,000 [5/1,000 up to the part of the taxable period for which liability for tax payment is constituted prior to December 31, 2009, 3/1,000 in the case of the purchase price paid to a small or medium enterprise by any national who runs an enterprise which is not a small or medium enterprise by making use of the network loan system (4/1,000 up to the part of the taxable period for which liability for tax payment is constituted prior to December 31, 2009)]; and2. [The payment amount including bill of exchange, etc. for which the payment deadline, the repayment deadline or the time limit for the price settlement is longer than 30 and shorter than 60 days from the date on which the tax invoice, etc. is prepared － the amount of promissory note that is settled to pay the purchase price (limited to an amount that remains after being subtracted in subparagraph 1)] × 1/1,000 (15/10,000 up to the part of the taxable period for which liability for tax payment is constituted prior to December 31, 2009).(3) The definitions of terms used in paragraphs (1) and (2) shall be as follows: <Amended by Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007>1. The term “purchase price” means the amount paid by a purchasing enterprise for the goods supplied or the services provided by a selling enterprise in connection with its ordinary business activities consistent with its business objectives;2. The term “sale proceeds” means the amount received by a selling enterprise for the goods supplied or the services provided to a purchasing enterprise in connection with its ordinary business activities consistent with its business objectives;3. The term “bill of exchange” means a bill issued, in the form of payable at sight, by a selling enterprise for getting the sale proceeds paid, by designating a purchasing enterprise as the payer and the sale proceeds as the payable amount, pursuant to the terms and forms set forth by the Governor of the Bank of Korea in connection with the loans for financing business purchases;4. The term “written request for collection of sale proceeds” means a document prepared in electronic forms and transmitted by a selling enterprise to his bank for getting the sale proceeds paid pursuant to the terms and forms set forth by the Governor of the Bank of Korea in connection with the loans for financing business purchases;5. The term “exclusive-use card for business purchase” means a credit card or debit card received by a purchasing enterprise from a credit card company under the Specialized Credit Financial Business Act in order to pay the purchase price, which is not usable at any general credit card member shops and is issued for the only purpose of paying the purchase price to the relevant selling enterprise under the contract among the purchasing enterprise, the selling enterprise and the credit card company;6. The term “loan against security of credit sales claims” means a loan extended to a selling enterprise by a financial institution on the security of the credit sales claims to a purchasing enterprise in order to receive a payment of sale proceeds, and redeemed by the purchasing enterprise for its purchase price, under the conditions as determined by the Governor of the Bank of Korea;7. The term “purchase loan system” means the settlement method by which any purchasing enterprise enters into a loan ceiling agreement with any financial institution under which such purchasing enterprise settles the purchase price for selling enterprises using the amount of loans extended by such financial institution by making use of the data processing system and the purchasing enterprise repays loans to the financial institution on or before the date of maturity; and8. The term “network loan system” means the settlement method by which any selling enterprise enters into a loan ceiling agreement with any financial institution and such selling enterprise gets loans from such financial institution based on the order book of the purchasing enterprise and the purchasing enterprise repays loans to such financial institution by means of electronic settlement.(4) A national who desires to be eligible for the application of paragraphs (1) and (2) shall file an application for tax credit under the conditions as prescribed by Presidential Decree. <Amended by Act No. 6501, Aug. 14, 2001>(5) Necessary matters concerning order books and the procedures for furnishing information pertaining to loans, etc. among purchasing enterprises, financial institutions and selling enterprises in the application of paragraph (1) 5 shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 7839, Dec. 31, 2005>[This Article Newly Inserted by Act No. 6273, Oct. 21, 2000]

(1) In cases where a national donates a facility prescribed by the Presidential Decree including an automation facility, which has been used for his own business, to a small or medium enterprise or transfers such facility at any price lower than its fair market price under Article 52 (2) of the Corporation Tax Act (hereafter referred to as “market price” in this Article) on or before December 31, 2009, the amount of the following subparagraphs shall be included in his deductible expenses, in calculating his income for the relevant taxable year: <Amended by Act No. 8827, Dec. 31, 2007>1. If he donates such facility: The market price of the facility donated; or2. If he transfers such facility at any price lower than the market price: The value calculated by subtracting the transfer price from the market price of the asset transferred (or the book value, if the market price is lower than the book value).(2) The amount equivalent to the value of a facility donated to a small or medium enterprise under paragraph (1) may be included in deductible expenses, applying Article 32 of the Income Tax Act and Article 36 of the Corporation Tax Act mutatis mutandis. <Amended by Act No. 8827, Dec. 31, 2007>(3) The requirements for small or medium enterprises subject to the application of paragraphs (1) and (2) and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

The amount of income dividend (limited to that received by stocks with no voting right) which a domestic corporation has received as a result of investment in small and medium enterprises in collaborative cooperation under Article 2 of the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises by December 31, 2010 shall not be included in the gross income when calculating the amount of income in each business year.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) When a national has accumulated reserves for research and human resources development to appropriate them for expenses necessary for research development and human resources development (hereinafter referred to as “research and human resources development” until the taxable year which is completed on or before December 31, 2013, the relevant amount shall be included in deductible expenses when calculating the amount of income within the extent of the amount calculated by multiplying the amount of income of the relevant taxable year (referring to turnover calculated pursuant to enterprise accounting standards under Article 43 of the Corporation Tax Act) by 3/100.(2) Reserves for research and human resources development included in the deductible expenses pursuant to paragraph (1) shall be included in the gross income according to the following subparagraphs:1. For reserves equivalent to the amount used for expenses prescribed by Presidential Decree (hereinafter referred to as “research and human resources development expenses”) of the expenses involved in research and human resources development until the completion date of the taxable year to which the date when three years have passed belongs after the completion date of the taxable year when the relevant reserves have been included in the deductible expenses, the amount calculated by multiplying the amount given by the reserves divided by 36, by the number of months of the taxable year shall be included in the gross income when the amount of income of each taxable year is calculated from the taxable year to which the date when three years have passed belongs.2. If reserves included in the deductible expenses exceed the amount to be included in the gross income pursuant to subparagraph 1, the reserves equivalent to the exceeding part shall be included in the gross income when the amount of income of the taxable year is calculated, to which the date when three years have passed belongs after the completion date of the taxable year when such reserves have been included in the deductible expenses: Provided, That the amount not used for research and human resources development due to a change in a business plan or such after reserves were included in the deductible expenses may be included in the gross income before the taxable year to which the date when such three years have passed belongs.(3) If a reason falling under any of the following subparagraphs arises to any national who has reserves for research and human resources development included in the deductible expenses pursuant to paragraph (1), the total amount of reserves for research and human resources development not included in the gross income shall be included in the gross income when the amount of income of the taxable year, to which the date when such a reason arose belongs, is calculated:1. When the relevant business has been discontinued; and2. When a juristic person has been dissolved: Provided, That this shall not apply to cases where a juristic person is dissolved due to merger or division (including division and merger), and a juristic person merged, a juristic person newly established due to division or the other juristic person of division and merger has succeeded to the relevant reserves for research and human resources development.(4) In cases where reserves for research and human resources development are included in the gross income pursuant to paragraph (2) 2 or (3), with respect to reserves equivalent to the amount not used for research and human resources development from among the relevant reserves, the additional amount equivalent to interest calculated as prescribed by Presidential Decree shall be paid as the income tax or corporation tax when a report of tax base of the relevant taxable year is made, and the relevant amount of tax shall be deemed to be the amount of tax to be paid pursuant to Article 76 of the Income Tax Act or Article 64 of the Corporation Tax Act.(5) The term “research and development” under paragraph (1) means activities to achieve scientific or technical development, “human resources development” means activities educating and training executives or employees employed by a national, and the specific scope thereof shall be prescribed by Presidential Decree.(6) Any national who intends to be governed by paragraph (1) shall present a detailed statement of reserves for research and human resources development.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) If expenses for research and human resources development in each taxable year has been incurred by a national [excluding any national who runs the consumptive service business, including gambling rooms, dance halls, entertainment bars, etc., prescribed by Presidential Decree (hereinafter referred to as the “consumptive service business”)], the amount set forth in each of the following subparagraphs shall be deducted from his income tax (limited to income tax on business income) or corporation tax for the relevant taxable year: <Amended by Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. For a small or medium enterprise: Any amount chosen from the amounts provided for in the following items:(a) Where expenses for research and human resources development incurred for the relevant taxable year exceed the annual average of such expenses paid during four preceding years retroactively from the date on which the taxable year concerned begins, an amount equivalent to 50/100 of such excessive amount; and(b) An amount computed by multiplying expenses for research and human resources development incurred for the relevant taxable year by 25/100; and2. For a national other than those under subparagraph 1: The amount computed by adding up the amounts under items (a) and (b) below: Provided, That if the ratio of expenses for research and human resources development to the amount of revenue for the relevant taxable year (referring to the sales calculated according to the corporate accounting standards under Article 43 of the Corporation Tax Act; hereafter the same shall apply in this Article) is higher than or equivalent to the ratio of expenses for research and human resources development to the amount of revenue for the preceding taxable year, or expenses for research and human resources development of the relevant taxable year are higher than or equivalent to the preceding year, the amount chosen from the total amount of items (a) and (b) or the amount of item (c) shall be deducted:(a) Where research and human resources development expenses prescribed by Presidential Decree entrusted to a university or college, or a small or medium enterprise (hereinafter referred to as “research and human resources development expenses entrusted to a small or medium enterprise, etc.”), which are incurred for the relevant taxable year, exceed the annual average of such expenses paid during four preceding years retroactively from the date on which the taxable year concerned begins, an amount equivalent to 50/100 of such excessive amount;(b) Where research and human resources development expenses, other than the research and human resources development expenses entrusted to a small or medium enterprise, etc., which are incurred for the relevant taxable year, exceed the annual average of such expenses, other than the research and human resources development expenses entrusted to a small or medium enterprise, etc., which are paid during four preceding years retroactively from the date on which the taxable year concerned begins, an amount equivalent to 40/100 of such excessive amount; and(c) The amount calculated by multiplying research and human resources development expenses incurred for the relevant taxable year by the ratio (which shall not exceed 6/100) calculated with the following formula:3/100 + Ratio of research and human resources development expenses to the amount of revenue for the relevant taxable year × 1/2(2) The classification and calculation of the annual average of research and manpower development expenses incurred during four preceding years under paragraph (1) 1 and 2 and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 8146, Dec. 30, 2006>(3) A national who desires to be eligible for the application of paragraph (1) shall make an application for tax credit under the conditions as prescribed by Presidential Decree.

(1) In cases where a national is paid a contribution and other assets (hereafter referred to as the “research and development contribution, etc.” in this Article), not later than December 31, 2009, for the purposes of conducting research and development, etc. in accordance with the Technology Development Promotion Act and other Acts prescribed by Presidential Decree and does the account of the research and development contribution, etc. by classification in such a manner as prescribed by Presidential Decree, he may choose not to include an amount equivalent to the research and development contribution, etc. in the gross income, in calculating his income for the relevant taxable year.(2) The amount not included in the gross income pursuant to paragraph (1) shall be included in the gross income according to the methods as set forth in the following subparagraphs:1. Where the research and development contribution, etc. is disbursed for meeting the research and development expenses concerned: The method of including an amount equivalent to the disbursed amount in the gross income, in calculating the income for the taxable year whereto belongs the date of such disbursement; and2. Where the research and development contribution, etc. is disbursed for acquiring assets used for the research and development concerned: The method of including an amount equivalent to the disbursed amount in the gross income in such a manner as prescribed by Presidential Decree.(3) Where a national who has not included an amount equivalent to the research and development contribution, etc. in the gross income pursuant to paragraph (1) spends the research and development contribution, etc. for other purposes than the research and development or his business is discontinued or dissolved before the research and development contribution, etc. is spent on the research and development, the amount not spent shall be included in the gross income, in calculating the income for the taxable year whereto belongs the date on which such a cause occurs: Provided, That this shall not include the cases where a corporation, etc. that is newly incorporated after a merger or division takes over the amount, and the amount shall be deemed not to be included by the said corporation, etc. in the gross income pursuant to paragraph (1).(4) With respect to the amount to be included in the gross income pursuant to paragraph (3), the latter part of Article 33 (3) shall apply mutatis mutandis.(5) In the application of paragraphs (1) through (4), the submission of a specification of the non-inclusion of contributions in the gross income and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In case where a national makes investment in facilities for research and manpower development or facilities for the commercialization of new technology (excluding any investment made by used facilities) not later than December 31, 2009, an amount equivalent to 10/100 of such investment amount shall be allowed to be deducted from his income tax (limited to the income tax on business income) or corporation tax for the taxable year whereto belongs the date on which such investment has been completed. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 9131, Sep. 26, 2008>(2) For the purposes of paragraph (1), the term “facilities for research and manpower development or facilities for the commercialization of new technology” means those falling under any of the following subparagraphs: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002>1. Facilities for research or experimentation determined by Presidential Decree;2. Facilities for vocational training determined by Presidential Decree; and3. Business assets for the commercialization of such new technology determined by Presidential Decree.(3) In case where the investment under paragraph (1) is made over two or more taxable years, the provision of paragraph (1) may apply to each amount invested for each taxable year wherein such investment is made.(4) Such matters as may be necessary for computing the amount of investment under paragraph (3) shall be determined by Presidential Decree.(5) A national who desires to be eligible for the application of paragraph (1) or (3) shall make an application for tax credit under the conditions prescribed by Presidential Decree.

(1) Deleted. <by Act No. 7839, Dec. 31, 2005>(2) In case where any national obtains any patent right, any utility model right, any secret know-how that is prescribed by Presidential Decree or any technology that is also prescribed by Presidential Decree (hereafter referred to as the “patent right, etc.” in this Article) on or before December 31, 2009 from another national who has established, registered and held such patent right, etc. after having researched and developed them (excluding a case where such patent right, etc. is obtained from a person in a special relationship who is prescribed by the Presidential Decree), an amount equivalent to 3/100 of the value of its acquisition (7/100 in the case of a small or medium enterprise) shall be allowed to be deducted from his income tax (limited to the income tax on business income) or corporation tax for the taxable year concerned. In this case, the deductible amount may not exceed 10/100 of the income tax or corporation tax for the taxable year concerned. <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>(3) A national who desires to be eligible for the application of paragraph (2) shall file an application for the tax credit under the conditions as prescribed by Presidential Decree. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7839, Dec. 31, 2005>

(1) In cases where an enterprise located in a special research and development zone pursuant to subparagraph 1 of Article 2 of the Special Act on the Fosterage of Daedeok Special Research and Development Zone, etc., which falls under any one the following subparagraphs, operates the business as prescribed by Presidential Decree, such as biotech industry or information and communications industry (hereafter referred to as the “business subject to reduction or exemption” in this Article), within a business place located in the zone concerned, the corporation tax or the income tax shall be reduced or exempted in accordance with paragraphs (2) and (3):1. A high-tech enterprise designated not later than December 31, 2009 pursuant to subparagraph 3 of Article 2 of the Special Act on the Fosterage of Daedeok Special Research and Development Zone, etc.; and2. A research institute-run enterprise established with approval not later than December 31, 2009 pursuant to Article 9 (1) of the Special Act on the Fosterage of Daedeok Special Research and Development Zone, etc.(2) With respect to the income generated from the business subject to reduction or exemption operated by an enterprise which meets the requirements of paragraph (1), an amount equivalent to 100/100 of the corporation tax or the income tax for the taxable year ending within 3 years after the beginning of the taxable year in which the first income has been generated from the said business (if no income has been derived from the said business not later than the taxable year whereto belongs the date on which five years have passed since such designation or approval, it refers to the taxable year whereto belongs the date on which the five years have passed), and an amount equivalent to 50/100 of the corporation tax or the income tax for the taxable year ending within 2 years thereafter, shall be reduced or exempted, respectively.(3) Any person who intends to be eligible for the application of paragraph (2) shall file an application for reduction or exemption as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The corporation tax shall not be imposed on transfer marginal profit from transfer of stocks or stakes falling under any of the following subparagraphs: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6705, Aug. 26, 2002; Act No. 6762, Dec. 11, 2002; Act No. 7577, Jul. 13, 2005; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Stocks or stakes acquired by an investment company for the establishment of small and medium enterprises (hereinafter referred to as an “investment company for the establishment of small and medium enterprises”) under the Support for Small and Medium Enterprise Establishment Act by its investment in a founder (hereinafter referred to as a “founder”) or a venture business under the same Act not later than December 31, 2009;2. Stocks or stakes acquired by a new technology project financing business operator (hereinafter referred to as a “new technology project financing business operator”)under the Specialized Credit Financial Business Act by its investment in a new technology business operator under the Korea Technology Credit Guarantee Fund Act (hereinafter referred to as a “new technology business operator”) or in a venture business not later than December 31, 2009; and3. Stocks or stakes acquired by an investment company for the establishment of small and medium enterprises, a limited liability company by the Commercial Act under Article 4-3 (1) 3 of the Act on Special Measures for the Promotion of Venture Businesses (hereinafter referred to as a “limited liability company for investment in venture business”) or a new technology project financing business operator in return for its or his investment in a founder, a new technology business operator, or a venture business not later than December 31, 2009 through an association (hereinafter referred to as an “association for investment in establishment, etc.”) falling under any of the following items:(a) Small and medium enterprise establishment investment association under the Support for Small and Medium Enterprise Establishment Act (hereinafter referred to as the “small and medium enterprise establishment investment association small or medium start-up business investment association”);(b) Korea venture business investment association under Article 4-3 of the Act on Special Measures for the Promotion of Venture Businesses (hereinafter referred to as the “Korea venture business investment association”);(c) New technology business investment association under the Specialized Credit Financial Business Act (hereinafter referred to as the “new technology business investment association”); and(d) Component and material-specialized business investment association under the Act on Special Measures for the Promotion of Specialized Enterprises, etc. for Component and Material (hereinafter referred to as the “component and material-specialized business investment association”).4. Stocks or stakes acquired by a corporation prescribed by Presidential Decree as a corporation managing and operating funds or a corporation running a mutual aid business (hereafter referred to as a “corporation operating funds, etc.” in this Article) by its investment in a founder, a new technology business operator, and a venture business through an association for investment in establishment, etc. not later than December 31, 2009.(2) When paragraph (1) is applied, an investment shall be made by a method falling under any of the following subparagraphs either in the form of a direct acquisition of the stocks or stakes of a founder, a new technology business operator, or a venture business by an investment company for the establishment of small and medium enterprises, a limited liability company for investment in venture business, a new technology project financing business operator or a corporation operating funds, etc. or in the form of an acquisition thereof through an association for investment in establishment, etc., however, cases where stocks or stakes owned by others are acquired by purchase shall be excluded: <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7577, Jul. 13, 2005; Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>1. Method of paying a share capital at the time of the incorporation of the relevant enterprise;2. Method of paying subscription money for new shares issued by the relevant enterprise for the purpose of the increase of its capital within seven years from its incorporation;3. Method of acquiring stocks or stakes of the relevant enterprise at the time of the capitalization of its surplus within seven years from its incorporation; and4. Method of acquiring stocks or stakes of the relevant enterprise at the time of the conversion of its liabilities into capital within seven years from its incorporation.(3) The corporation tax shall not be imposed on any dividend income which any founder, any new technology business operator or any venture business pays to an investment company for the establishment of small and medium enterprises, a limited liability company for investment in venture business and a new technology project financing business operator not later than December 31, 2009 by its investment pursuant to paragraph (1) 1 through 3. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(4) Such matters as may be necessary for computing transfer marginal profits and dividend income under the provisions of paragraphs (1) through (3) shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 9272, Dec. 26, 2008>

(1) The provisions of Article 94 (1) 3 of the Income Tax Act shall not apply to the transfer of stocks or stakes falling under any of the following subparagraphs (with respect to the stocks or stakes falling under subparagraphs 1, 2, 2-2, 3, 4 and 6, it shall be limited to the acquisition thereof by the method falling under any of the subparagraphs of Article 13 (2)): Provided, That in the case of acquisition of the stocks or stakes falling under subparagraphs 1, 2, 2-2, 3, 4, and 6, this shall not apply to the acquisition by purchase of such stocks or stakes owned by other persons: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7577, Jul. 13, 2005; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Stocks or stakes acquired by investing in a small or medium start-up business investment company or a specialized credit financing company that has registered only the new technology project financing business under Article 3 (2) of the Specialized Credit Financial Business Act;2. Stocks or stakes acquired by a small and medium enterprise establishment investment association through its investment in a founder or a venture business;2-2. Stocks or stakes acquired by the Korea venture business investment association through its investment in a founder or a venture business;3. Stocks or stakes acquired by a new technology business investment association through its investment in a new technology business operator or a venture business;4. Stocks or stakes determined by Presidential Decree, which are acquired by investing in a venture business (including cases of acquisition by investing in a venture business through an association under Article 13 of the Act on Special Measures for the Promotion of Venture Businesses);5. Deleted; <by Act No. 8827, Dec. 31, 2007>6. Stocks or stakes acquired by a component and materials-specialized business investment association through its investment in a founder, a new technology business operator or a venture business; and7. Stocks of venture businesses traded by the method under subparagraph 1 (b) of Article 3 of the Securities Transaction Tax Act (limited to those transferred by the persons who are not the large stockholders under Article 94 (1) 3 (a) of the Income Tax Act).(2) Deleted. <by Act No. 9272, Dec. 26, 2008>(3) Deleted. <by Act No. 7003, Dec. 30, 2003>(4) With respect to such income as falling under any of the following subparagraphs, the association concerned shall withhold the income tax from such income when it pays such income to its members or partners: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7577, Jul. 13, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008; Act No. 9584, Apr. 1, 2009>1. Dividend income derived by a small and medium enterprise establishment investment association from its investment in a founder or a venture business;1-2. Dividend income derived by the Korea venture business investment association from its investment in a founder or a venture business;2. Dividend income derived by a new technology business investment association from its investment in a new technology business operator or a venture business;3. Dividend income derived by a corporate restructuring association registered in accordance with Article 15 of the Industrial Development Act (referring to the Industrial Development Act prior to the whole amendment by Act No. 9584) from its investment in an enterprise subject to restructuring under Article 14 (4) of the same Act; and4. Dividend income derived by a component and materials-specialized business investment association from its investment in a founder, a new technology business operator, or a venture business.(5) With respect to such income as attributable to a small or medium start-up business investment association, the Korea venture business investment association, a new technology business investment association, a corporate restructuring association, or a component and materials-specialized business investment association, which falls under any subparagraphs of Article 16 (1) of the Income Tax Act or Article 17 (1) 5 of the same Act, the association concerned shall withhold the income tax or corporation tax from such income when it pays such income to its members or partners, notwithstanding the Income Tax Act and the Corporation Tax Act. <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6538, Dec. 29, 2001; Act No. 7577, Jul. 13, 2005>(6) In the case of the income falling under paragraphs (4) and (5), the gross income less expenses disbursed by the association concerned (limited to the expenses relative to gross income) shall be treated as the interest income or dividend income, notwithstanding the provisions of Article 16 (2) of the Income Tax Act and the main sentence of Article 17 (3) of the same Act.(7) The provisions of paragraphs (4) through (6) shall apply only to the income derived until December 31, 2009. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(8) The provisions of paragraph (1) 1 through 4, 6 and 7 shall apply only to the portion acquired until December 31, 2009. <Newly Inserted by Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>

(1) In cases where a resident makes a contribution or investment falling under any of the following subparagraphs, an amount (not exceeding 30/100 of the amount of global income for the relevant taxable year) equivalent to 10/100 of the amount of contribution or investment that is made not later than December 31, 2010 shall be deducted from his global income for a taxable year he chooses from the taxable year whereto belongs the date of such contribution or investment till the taxable year whereto belongs the date on which two years have passed since the contribution or investment: Provided, That this shall not apply in cases where he makes contribution or investment in the manner of taking over other persons’ contribution shares, investors’ equities, or beneficiary certificates: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7577, Jul. 13, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Where he contributes to a small and medium enterprise establishment investment association, the Korea venture business investment association, a new technology business investment association or a component and materials-specialized business investment association;2. Where he invests in beneficiary certificates issued by a venture business investment trust determined by Presidential Decree (hereafter referred to as the “venture business investment trust” in this Article);3. Where he invests the amount that was contributed to an association under Article 13 of the Act on Special Measures for the Promotion of Venture Businesses, in a venture business as prescribed by Presidential Decree; and4. Where he invests in a venture business under the Act on Special Measures for the Promotion of Venture Businesses.(2) In cases where a resident to whom income deduction was allowed under the main sentence of paragraph (1) falls under any of the following subparagraphs prior to the elapse of 5 years from the date of contribution or investment, the head of tax office having jurisdiction over the area of his residence or the withholding agent shall additionally collect an amount of tax on the portion of income deduction that was allowed to the resident as prescribed by Presidential Decree: Provided, That this shall not apply to the death of a contributor or investor or any other case arising from such causes as determined by Presidential Decree: <Amended by Act No. 7003, Dec. 30, 2003>1. Where he transfers or collects his contribution shares as provided for in paragraph (1) 1;2. Where he transfers or resells beneficiary certificates issued by a venture business investment trust as provided for in paragraph (1) 2; and3. Where he transfers or collects contribution shares or investor’s equities as provided for in paragraph (1) 3 and 4.(3) Deleted. <by Act No. 8146, Dec. 30, 2006>(4) In applying the provisions of paragraphs (1) and (2), the limits and calculation of deductible amounts, application for income deduction, and other necessary matters shall be prescribed by Presidential Decree.

(1) A foreign engineer prescribed by Presidential Decree shall be entitled to the exemption from income tax on earned income derived from the offer of his services to a national within Korea until the month whereto belongs the date on which five years have passed since the first date on which the foreign engineer concerned offered his services in Korea (limited to a case where services are offered prior to December 31, 2009). <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(2) A foreign engineer shall be eligible for the exemption from income tax on earned income derived from the offer of his services to a national within Korea under a contract for the introduction of technologies pursuant to the Foreign Investment Promotion Act: Provided, That this shall be limited to the earned income of a foreign engineer derived from the offer of his service connected with such technologies as provided for in the same Act, for which royalties are exempted from income tax or corporation tax, until the month whereto belongs the date on which five years have passed since the date of delivery of the certificate of report (limited to a case where the date of delivery is prior to December 31, 2009) on a contract for the introduction of such technologies. <Amended by Act No. 8146, Dec. 30, 2006>(3) Anyone who desires to be eligible for the application of paragraph (1) or (2) shall file an application for tax exemption under the conditions as prescribed by Presidential Decree.

(1) Foreign executives or employees (excluding laborers hired on daily basis; hereinafter referred to as the “foreign workers”) shall be eligible for an exemption from income tax on an amount equivalent to 30/100 of their gross pay referred to in Article 20 (2) of the Income Tax Act which is derived by performing their services in Korea not later than December 31, 2009. <Amended by Act No. 8146, Dec. 30, 2006>(2) With respect to income tax on earned income of foreign workers which is derived by the offer of their services in Korea not later than December 31, 2012, an amount computed by multiplying the relevant income by 15/100 may be adopted as the amount of such income tax, notwithstanding the provisions of Article 55 (1) of the Income Tax Act. In such cases, provisions concerning income taxation, such as tax exemption (including the case as provided in paragraph (1)), deduction, reduction or exemption, and tax credit under the Income Tax Act as well as this Act shall not be applicable. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(3) In applying the provisions of paragraph (2), the earned income thereunder shall not be added up in the calculation of tax base of global income as referred to in Article 14 (2) of the Income Tax Act.(4) Any foreign worker who desires to be eligible for the application of the special taxation as provided in paragraph (2) shall make an application therefor as prescribed by Presidential Decree.[This Article Wholly Amended by Act No. 7003, Dec. 30, 2003]

(1) Taxes to be borne by a lender under subparagraph 10 of Article 2 of the Introduction and Management of Public Loans Act (hereafter in this Article referred to as a “lender”) in direct connection with the introduction of public loans under subparagraph 6 of Article 2 of the abovementioned Act (hereafter in this Article referred to as the “public loans”) shall be abated or exempted under conditions stipulated by a public loan agreement under subparagraph 7 of Article 2 of the abovementioned Act (hereafter in this Article referred to as the “public loan agreement”).(2) The income tax or corporation tax on royalties or service fees paid to any foreigner in connection with the introduction of a public loan shall be abated or exempted under such terms and conditions as prescribed by the relevant public loan agreement.(3) The tax abatement or exemption under paragraphs (1) and (2) may be denied if so requested by a lender or technology licensor.

(1) A person who is paid an income falling under any of the following subparagraphs (excluding residents and domestic corporations) shall be exempted from the income or corporation tax: <Amended by Act No. 8827, Dec. 31, 2007>1. Interest and commission on the foreign currency bonds issued by the State, local governments, or domestic corporations;2. Interest and commission paid on the foreign currency liabilities redeemable in foreign currency, which a foreign exchange business handling institution under the Foreign Exchange Transactions Act borrows from a foreign financial institution under such conditions as prescribed by the said Act; and3. Interest and commission paid on the foreign currency bills or foreign currency deposit certificates issued or sold overseas by such a financial institution as prescribed by Presidential Decree (hereafter referred to as a “financial institution” in this Article) under the conditions as prescribed by the Foreign Exchange Transactions Act.(2) Deleted. <by Act No. 6762, Dec. 11, 2002>(3) Any income accruing from an overseas transfer, by a non-resident or a foreign corporation, of the securities as prescribed by the Presidential Decree that are issued by the State, local governments or domestic corporations, shall be exempted from the income tax or corporation tax. <Amended by Act No. 6045, Dec. 28, 1999>

(1) In cases where a domestic corporation’s income for each business year ending on or before December 31, 2009 includes any dividend income from its investment in overseas resources development projects as prescribed by Presidential Decree pursuant to the Foreign Exchange Transactions Act (including a resources processing business under the foreign capital inducement conditions set forth by the host country), the portion of such dividend exempted from the tax of the host country shall be exempted from corporation tax. <Amended by Act No. 7003, Dec. 30, 2003; ActNo. 8146, Dec. 30, 2006>(2) In cases where paragraph (1) above and Article 57 (3) of the Corporation Tax Act are concurrently applicable to such dividend income received by a domestic corporation, only one of them shall be selected and applied thereto.

(1) In cases where a national makes an investment in the facilities falling under any of the following subparagraphs (excluding any investment in used items) not later than December 31, 2009 in order to increase productivity, an amount equivalent to 3/100 of such investment amount (7/100 in the case of a small or medium enterprise) shall be deducted from his income tax (limited to the income tax on his business income) or corporation tax: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Facilities prescribed by Presidential Decree which belong to those for the improvement and automation of processes;2. Equipment prescribed by Presidential Decree which belongs to high-technology equipment;3. Deleted; <by Act No. 6297, Dec. 29, 2000>4. Facilities for enterprise resource planning;5. Facilities for electronic commerce;6. Computers and their peripheral devices, software, telecommunications facilities and other tangible and intangible facilities used for the management of the supply network, including material procurement, production planning, and inventory management, in an electronic format, of which the depreciation period is two years or longer (hereinafter referred to as the “facilities for the supply network management system”) ; and7. Computers and their peripheral devices, software, telecommunications facilities and other tangible and intangible facilities used for the management of customer relations, including integration and analysis of data on customers and marketing, in an electronic format, of which the depreciation period is two years or longer (hereinafter referred to as the “facilities for the customer relations management system”); and8. Computers and their peripheral devices, software, telecommunications facilities, and other tangible and intangible facilities used for the strategic and efficient management of logistics process, including purchasing, management of orders, production, warehouse management, inventory management, and distribution network, of which the depreciation period is two years or longer (hereinafter referred to as the “facilities for the logistics management data system”).(2) In cases where any small or medium enterprise uses, by means of Internet, facilities falling under paragraph (1) 4 through 7, which are owned by any other person on or before December 31, 2009, in order to increase its productivity, an amount equivalent to 7/100 of their use fees shall be deducted from its income tax (limited to the income tax on business income) or corporation tax. <Newly Inserted by Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>(3) The provisions of Article 11 (1), (3) and (4) shall apply mutatis mutandis to the method of tax credit in accordance with the provisions of paragraph (1) or (2). <Newly Inserted by Act No. 7322, Dec. 31, 2004>(4) A national who intends to be eligible for the application of paragraphs (1) and (2) shall apply for tax credit under the conditions as prescribed by Presidential Decree. <Amended by Act No. 7322, Dec. 31, 2004>

(1) In cases where a national makes an investment, not later than December 31, 2009, in the facilities prescribed by Presidential Decree (excluding any investment in used items) as deemed necessary for the purposes of industrial policies, which belong to the facilities falling under any of the following subparagraphs, an amount equivalent to 3/100 of such investment amount shall be deducted from its income tax (limited to income tax on business income) or corporation tax. In this case, the provisions of Article 11 (1), (3) and (4) shall apply mutatis mutandis to the methods of tax credit: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>1. Deleted; <by Act No. 6297, Dec. 29, 2000>2. Deleted; <by Act No. 8827, Dec. 31, 2007>3. Facilities for a distribution business to be run under the Distribution Industry Development Act;4. Facilities installed in a trustee company by a truster company under the Act on the Protection of the Business Sphere of Small and Medium Enterprises and Promotion of Their Cooperation;5. Industrial disaster prevention facilities;6. Mining safety facilities;7. Facilities reinforced or expanded by an individual designated as person under priority management under the Emergency Resources Management Act, in order to carry out his emergency preparedness duties in compliance with the Government’s order to reinforce and expand such facilities;8. Facilities for preventing hazardous elements, which are installed by a relevant business operator subject to standards for the priority control of hazardous elements under Article 9 of the Processing of Livestock Products Act or Article 48 of the Food Sanitation Act;9. Facilities installed to prevent technology from being illegally transferred; and10. Facilities installed to develop overseas resources.(2) Any national who intends to be eligible for the application of paragraph (1) shall apply for tax credit as prescribed by Presidential Decree.

(1) In cases where a national makes an investment (excluding any investment made by used goods), not later than December 31, 2009 in the energy-economizing facilities prescribed by Presidential Decree, the amount equivalent to 20/100 of the relevant invested amount shall be deducted from the income tax (limited to the income tax on his business income) or corporation tax. In such cases, the provisions of Article 11 (1), (3) and (4) shall apply mutatis mutandis to the methods of tax credit. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 9131, Sep. 26, 2008>(2) Any national who intends to be eligible for the application of paragraph (1) shall apply for tax credit as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6297, Dec. 29, 2000]

(1) In cases where a national makes an investment (excluding any investment in used goods) in any facility for environmental conservation prescribed by Presidential Decree not later than December 31, 2010, the amount equivalent to 8/100 (10/100 up to the part of the taxable period for which liability for tax payment is constituted prior to December 31, 2009) of the investment amount shall be deducted from the income tax (limited to the income tax on his business income) or the corporation tax. In such cases, Article 11 shall apply mutatis mutandis to the methods of tax credit. <Amended by Act No. 9272, Dec. 26, 2008>(2) Any national who intends to be governed by paragraph (1) shall apply for tax deduction as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a national makes an investment (excluding any investment in used goods) in any facility for improved quality management of medicines prescribed by Presidential Decree not later than December 31, 2010, the amount equivalent to 5/100 (7/100 up to the part of the taxable period for which liability for tax payment is constituted prior to December 31, 2009) of the investment amount shall be deducted from the income tax (limited to the income tax on his business income) or the corporation tax. In such cases, Article 11 shall apply mutatis mutandis to the methods of tax credit. <Amended by Act No. 9272, Dec. 26, 2008>(2) Any national who intends to be governed by paragraph (1) shall apply for tax deduction as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where the Government deems it necessary for business adjustment, a tax amount equivalent to an amount computed by multiplying an amount of money not exceeding 10/100 of an investment prescribed by Presidential Decree (excluding any investment in used items) by the rate prescribed by Presidential Decree shall be deducted from income tax (limited to income tax on business income; hereafter the same shall apply in this paragraph) or corporation tax for a taxable year prescribed by Presidential Decree: Provided, That with respect to an investment made from July 1, 2003 to December 31, 2004, an amount equivalent to the 15/100 of the amount of such investment shall be deducted from income tax or corporation tax. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004>(2) When a domestic corporation is to make a mid-year prepayment under Article 63 of the Corporation Tax Act (excluding the case of a mid-year prepayment under the proviso of Article 63 (1) and Article 63 (4) of the same Act), the corporation may, if it has made an investment whereto paragraph (1) is applicable during the same period of the mid-year prepayment, be allowed to pay as its mid-year prepayment a tax amount left by subtracting the amount of temporary investment tax deduction for such investment from the full tax amount to be paid for the same mid-year prepayment. In such cases, if a tax amount for a mid-year prepayment left by subtracting the amount of temporary investment tax deduction is less than 50/100 of the minimum tax amount for the immediate preceding year of taxation which was assessed under the provisions of Article 132, the amount of temporary investment tax deduction equivalent to the lacking portion of such minimum tax amount shall not be allowed to be subtracted. <Newly Inserted by Act No. 6501, Aug. 14, 2001>(3) When a resident is to make a mid-year prepayment under Article 65 of the Income Tax Act, such resident may, if he has made an investment whereto paragraph (1) is applicable during the same period of the mid-year prepayment, fix as his mid-year prepayment a tax amount left by subtracting the amount of temporary investment tax deduction for such investment (limited to the tax on business income of the full tax amount for the mid-year prepayment; hereafter in this paragraph the same shall apply) from the full tax amount to be paid for the same mid-year prepayment and thereby file a tax return for his mid-year prepayment with the head of the tax office having jurisdiction over the place wherein tax is paid within the period from the 1st to the 30th of November. If an amount equivalent to a mid-year prepayment tax on business income left by subtracting the amount of temporary investment tax deduction is less than 50/100 of the minimum tax on business income for the immediate preceding year of taxation which was assessed under the provision of Article 132, the amount of temporary investment tax deduction equivalent to the deficiency of such minimum tax amount shall not be allowed to be subtracted. <Newly Inserted by Act No. 6501, Aug. 14, 2001>(4) If a resident has filed a tax return under paragraph (3), he shall be deemed to have filed a tax return under the provision of Article 65 (3) of the Income Tax Act and thereby the same Act (excluding the latter part of Article 65 (9)) shall apply in this case. <Newly Inserted by Act No. 6501, Aug. 14, 2001>(5) A national who intends to be eligible for the application of paragraphs (1) through (4) shall apply for tax credit under the conditions as prescribed by Presidential Decree. <Amended by Act No. 6501, Aug. 14, 2001>

With respect to interest derived from social infrastructure bonds and flood control bonds as determined by Presidential Decree, which mature in 15 or more years from the date of their issue and are issued not later than December 31, 2009, notwithstanding Article 14 of the Income Tax Act, such interest income shall not be added in calculating the global income tax base; on the other hand, it shall be subject to the application of the tax rate as provided in Article 129 (1) 1 (c) of the same Act.<Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>

(1) If a national acquires, or begins to invest in, a fixed asset as determined by Presidential Decree not later than June 30, 2004 in order to use it for business purposes, he may, whether or not depreciation cost for the asset concerned has been included in the item of deductible expenses in settling accounts for each taxable year, include such depreciation cost in deductible expenses within the limits of an amount computed under the conditions as prescribed by Presidential Decree (hereafter in this Article referred to as the “amount not exceeding the limits of depreciation”) in calculating the amount of income for the taxable year concerned.(2) A national who desires to be eligible for the application of the special case of the inclusion of depreciation cost in deductible expenses under paragraph (1) shall apply for such special case under the conditions prescribed by Presidential Decree.(3) In applying the provisions of paragraph (1), such matters as may be necessary concerning the period of asset acquisition, the initiation of investment, inclusion of depreciation cost in deductible expenses, methods for settling the amount exceeding the limits of depreciation, etc. shall be determined by Presidential Decree.[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) In cases where a small or medium enterprise converts fixed-term workers and part-time workers under the Act on the Protection, etc. of Fixed-Term and Part-Time Workers, and dispatched workers under the Protection, etc. of Dispatched Workers Act employed by itself as of December 31, 2007 into workers who have concluded labor contract without fixed period of time or the business owner who has used them directly employs them pursuant to the Protection, etc. of Dispatched Workers Act by December 31, 2009 (hereinafter referred to as the “conversion into regular workers” in this Article), the amount of money calculated by multiplying the number of workers falling under the conversion into regular workers by 300,000 won shall be deducted from the income tax (limited to the income tax on business income) or the corporation tax of the relevant taxable year.(2) In cases where a person whose income tax or corporation tax has been deducted pursuant to paragraph (1) terminates the labor relations with the regular workers concerned before one year has passed from the date of conversion to regular workers, he/she shall pay the amount equivalent to the tax amount deducted at the time when returning the tax base of the taxable year to which the date when the labor relations have been terminated belongs, by adding the amount to equivalent to interest calculated as prescribed by Presidential Decree thereto as the income tax or corporation tax.(3) A small or medium enterprise which intends to be governed by paragraph (1) shall submit an application for deduction of tax amount prescribed by Ordinance of the Ministry of Strategy and Finance together with report of the tax base in the relevant taxable year.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) In cases where a small and medium enterprise under Article 2 of the Framework Act on Small and Medium Enterprises satisfies all the requirements under the following subparagraphs, an amount calculated based on the formula under paragraph (2) may be deducted from the income amount or the gross income amount of each business year until the taxable year to which December 31, 2010 belongs:1. Where there is any difficulty in management as prescribed by Presidential Decree, such as that the turnover of the relevant taxable year has decreased more than a certain ratio to the turnover of the preceding taxable year;2. Where the number of full-time employees in the relevant taxable year has not been decreased more than a certain ratio prescribed by Presidential Decree comparing with the number of full-time employees of the preceding taxable year; and3. Where the total amount of annual income per full-time employee in the relevant taxable year calculated as prescribed by Presidential Decree has decreased comparing with that of the preceding taxable year.(2) An amount to be deducted pursuant to paragraph (1) shall be calculated based on the following formula:(The total amount of annual income per full-time employee in the preceeding taxable year − the total amount of annual income per full-time employee in the relevant taxable year) × the number of full-time employees of the relevant taxable year × 50/100.(3) When applying paragraphs (1) and (2), the scope of full-time employees and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9512, Mar. 25, 2009]

(1) In cases where any resident aged 18 or older takes the donation of any property (the ceiling of the taxable value of gift tax shall be three billion won; hereafter referred to as the “start-up business fund” in this Article), other than those prescribed by Presidential Decree including land and buildings, from his parent aged 60 or older (including a parent of his father or mother, in cases where his father or mother is dead at the time when such donation is made; hereafter the same shall apply in this Article) on or before December 31, 2010 for the purpose of starting up a small or medium enterprise prescribed by Presidential Decree (hereafter referred to as a “small or medium enterprise eligible for the start-up business fund” in this Article), the gift tax whose tax rate is set at 10/100 after deducting 500 million won from the taxable value of the gift tax shall be levied, notwithstanding Articles 53 (1) and 56 of the Inheritance Tax and Gift Tax Act. In cases where anyone takes the donation of the start-up business fund not less than 2 times or from each of his parents, each of the taxable value of the gift tax shall be added up and the added-up amount shall be applied. <Amended by Act No. 8827, Dec. 31, 2007>(2) Anyone who has taken the donation of the start-up business fund shall commence his business within one year from the date on which he takes the donation thereof. The case falling under any of the following subparagraphs shall not be deemed as the start-up business:1. Where anyone succeeds the previous business by means of merger, division, investment in kind or acquisition by transfer of the business or runs the same type of business after taking over or purchasing the assets that are used for the previous business;2. Where any resident incorporates a new corporation after converting the business that has been run by him into a corporation;3. Where anyone runs the same type of business as the previous business after resuming the business after discontinuing the business; and4. Where it is difficult to deem that a new business is commenced because anyone expands his business or adds other business and other similar case that is prescribed by Presidential Decree.(3) In cases where anyone who has commenced his business pursuant to the provisions of paragraph (2) after taking the donation of the start-up business fund uses a new start-up business fund in connection with the original start-up business after taking the donation of such new start-up business fund, the provisions of paragraph (2) 3 and 4 shall not apply to such case.(4) Anyone who takes the donation of the start-up business fund shall use all of such start-up business fund for the relevant purpose by the date on which 3 years lapse from the date on which he takes the donation of such start-up business fund.(5) Anyone who takes the donation of the start-up business fund shall, when he commences his business pursuant to the provisions of paragraph (2), submit the details of the spending of the start-up business fund to the head of tax office having jurisdiction over the place where the gift tax is paid on the date that is set by Presidential Decree. In this case, where he fails to submit the details of the spending of the start-up business fund to the head of the relevant tax office or the details of the spending of the start-up business fund are unclear, an amount that is calculated by multiplying 3/1,000 by the non-submitted portion or the unclear portion shall be levied as the additional tax on the failure to submit the details of the spending of the start-up business fund.(6) In cases where the donated start-up business fund falls under any of the following subparagraphs, the gift tax and the inheritance tax shall be levied on the amount that is provided for in each subparagraph pursuant to the Inheritance Tax and Gift Tax Act. In this case, an amount equivalent to the interest that is calculated under the conditions as prescribed by Presidential Decree shall be added to the gift tax to be levied: <Amended by Act No. 8827, Dec. 31, 2007>1. Where the start-up business is not commenced pursuant to the provisions of paragraph (2): The start-up business fund;2. Where the start-up business fund is used for running any business that does not fall within the categories of small or medium enterprises eligible for the start-up business fund: The start-up business fund spent for the business that does not fall within the categories of small or medium enterprises eligible for the start-up business fund;3. Where the newly donated start-up business fund is not spent pursuant to the provisions of paragraph (3): The start-up business fund that is not spent for the relevant purpose;4. Where the start-up business fund (including the increased value portion that accrues from the start-up business; hereinafter referred to as the “start-up business fund, etc.”) has been spent for the business purpose other than the relevant business purpose within 10 years after the start-up business fund is donated: The start-up business fund, etc. that has been spent for the business purpose other than the relevant business purpose; and5. Where the business has been discontinued within 10 years after the business is commenced and other case that is prescribed by Presidential Decree: The start-up business fund and other amount that is prescribed by Presidential Decree.(7) In the application of the provisions of Article 3 (3) of the Inheritance Tax and Gift Tax Act, the start-up business fund shall be deemed the donated property that is added to the inherited property.(8) In the application of the provisions of Article 13 (1) 1 of the Inheritance Tax and Gift Tax Act, the start-up business fund shall be added to the taxable value of the inheritance tax regardless of the period ranging from the date on which the start-up business fund is donated to the date on which the inheritance commences and in the application of the provisions of subparagraph 3 of Article 24 of the same Act, the start-up business fund shall not be deemed the value of the donated property that is added to the taxable value of the inheritance tax.(9) In cases where the provisions of Article 28 of the Inheritance Tax and Gift Tax Act are applied to the amount of the gift tax on the start-up business fund, the amount of the gift tax on the start-up business fund shall be deducted from the calculated tax amount of the inheritance tax, notwithstanding the provisions of paragraph (2) of the same Article. In this case, where the amount of the gift tax to be deducted exceeds the calculated tax amount of the inheritance tax, the amount of the gift tax equivalent to the difference between them shall not be refunded.(10) In cases where the gift tax is levied on the start-up business fund, the value of other property than the start-up business fund that is donated by the same person (including his spouse) shall not be added to the taxable value of the gift tax on the start-up business fund, notwithstanding the provisions of Article 47 (2) of the Inheritance Tax and Gift Tax Act and even when a return of the tax base of the gift tax on the start-up business fund is filed, the tax credit for return provided for in the provisions of Article 69 (2) of the same Act and the annual installment payment provided for in the provisions of Article 71 (1) of the same Act shall not be applied.(11) Anyone who intends to make him eligible for the application of the provisions of paragraph (1) shall file an application for the special case by the deadline for filing a return of the tax base of the gift tax. In this case, if he fails to file the application for the special case by the return deadline, the provisions governing the special case shall not apply to him.(12) The taxation of the gift tax and the inheritance tax shall be governed by the Inheritance Tax and Gift Tax Act unless the taxation thereof is prescribed otherwise in this Article.(13) Article 30-6 shall not apply to the residents to whom paragraph (1) shall apply. <Newly Inserted by Act No. 8827, Dec. 31, 2007>[This Article Newly Inserted by Act No. 7839, Dec. 31, 2005]

(1) In cases where any resident aged 18 or old takes the donation of stocks or equity shares of a family business (the ceiling of the taxable vale of gift tax shall be three billion won; hereafter referred to as “stocks, etc.” in this Article) for the purpose of succeeding to the family business from his parent aged 60 or older (including a parent of his father or mother, in cases where his father or mother is dead at the time when such donation is made; hereafter the same shall apply in this Article), who has engaged in the family business under Article 18 (2) 1 of the Inheritance Tax and Gift Tax Act continuously for ten years or longer, on or before December 31, 2010, and succeeds the family business as prescribed by Presidential Decree, the gift tax shall be levied at the tax rate of 10/100 after deducting 500 million won from the taxable value subject to the gift tax, notwithstanding Articles 53 (1) and 56 of the Inheritance Tax and Gift Tax Act.(2) In cases where the successor to whom stocks, etc. have been donated under paragraph (1) does not succeed to the family business as prescribed by Presidential Decree or where the successor to whom stocks, etc. have been donated and who succeeds to the family business falls under any of the following subparagraphs without justifiable grounds prescribed by Presidential Decree within ten years from the date on which such donation is made, the gift tax shall be levied against the taxable value of the stocks, etc. in accordance with the Inheritance Tax and Gift Tax Act. In this case, the amount equivalent to an interest calculated as prescribed by Presidential Decree shall be levied in addition to the gift tax:1. In cases where the successor does not engage in the family business or suspend or close down the family business; and2. In cases where the equities of the successor to whom stocks, etc. have been donated are reduced.(3) The provisions of Article 30-5 (7) through (12) shall apply mutatis mutandis to the donation of the stocks, etc. under paragraph (1). In this case, the term “start-up business fund” shall be construed as “stocks, etc.”.(4) Necessary matters concerning the method of applying special taxation of the gift taxes in cases where Articles 41-3, 41-5, and 42 of the Inheritance Tax and Gift Tax Act shall be applicable, the method of applying the deductible for inheritance of a family business in cases where inheritance proceedings commence after the stocks, etc. were conveyed as a gift, and the extent of donors and donees shall be prescribed by the Presidential Decree.(5) Article 30-5 shall not apply to the residents to whom paragraph (1) shall apply.[This Article Newly Inserted by Act No. 8827, Dec. 3, 2007]

(1) In cases where a small or medium enterprise to be extinguished by a consolidation between the small or medium enterprises operating the type of business that is prescribed by Presidential Decree, transfers its fixed assets for business as prescribed by Presidential Decree (hereinafter referred to as the “fixed assets for business”) to a corporation newly incorporated by consolidation or a surviving corporation after consolidation (hereafter referred to as the “consolidated corporation” in this Article) not later than December 31, 2009, the said fixed assets for business may be subjected to a carryover taxation. <Amended by Act No. 8146, Dec. 30, 2006>(2) The scope of and requirements for a consolidation between small or medium enterprises subjected to the application of paragraph (1) shall be prescribed by Presidential Decree.(3) A national who intends to be subjected to the application of paragraph (1) shall file an application for a carryover taxation under the conditions as prescribed by Presidential Decree.(4) In cases where a small or medium start-up enterprise and a small or medium start-up venture enterprise under Article 6 (1) and (2) or a national subjected to tax reduction or exemption under Article 64 (1), makes a consolidation under paragraph (1) prior to the expiration of the tax reduction or exemption period under Article 6, 64 or 121, the consolidated corporation may be subjected to the application of Article 6, 64 or 121 during the remaining tax reduction or exemption period under the conditions as prescribed by Presidential Decree: Provided, That the provisions of Article 121 shall apply only to the business assets acquired before the consolidation under paragraph (1). <Amended by Act No. 5996, Aug. 31, 1999>(5) In cases where a small or medium enterprise relocated outside the Seoul Metropolitan area under Article 63, or an incorporated agricultural corporation under Article 68 makes a consolidation under paragraph (1) prior to the expiration of the tax reduction or exemption period under Article 63 or 68, the consolidated corporation may be subjected to the application of Article 63 or 68 during the remaining tax reduction or exemption period under the conditions as prescribed by Presidential Decree. <Amended by Act No. 6538, Dec. 29, 2001>(6) In cases where a national having the undeductible tax amount under Article 144 makes a consolidation under paragraph (1), the consolidated corporation may succeed such undeductible tax amount of the relevant national and be subjected to the tax deduction under the conditions as prescribed by Presidential Decree.

(1) In cases where a resident converts his business into a corporation (excluding a corporation operating a consumptive service business), not later than December 31, 2009, by making an investment in kind of the fixed assets for business, or in accordance with a method of business transfer or takeover prescribed by Presidential Decree, the relevant fixed assets for business may be subjected to a carryover taxation. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>(2) The provisions of paragraph (1) shall apply only to cases where the capital of the newly-established corporation is in excess of the amount prescribed by Presidential Decree.(3) Any national who intends to be governed by paragraph (1) shall apply for the carryover taxation as prescribed by Presidential Decree.(4) The provisions of Article 31 (4) through (6) shall apply mutatis mutandis to a corporation to be established under paragraph (1).

(1) In cases where any national who runs a small or medium enterprise transfers his fixed assets for business that are used directly for the pre-conversion business (hereafter referred to as the “fixed assets for the pre-conversion business” in this Article) on or before December 31, 2010 and acquires the fixed assets for business that are used directly for the converted business within one year from the transfer date in order to convert a business that an enterprise under trade adjustment assistance under Article 6 of the Act on Trade Adjustment Assistance Following the Free Trade Agreements (hereafter referred to as an “enterprise under trade adjustment assistance” in this Article and Article 33-2) has run (hereafter referred to as the “pre-conversion business” in this Article) into a business falling under any of the subparagraphs of Article 6 (3) of this Act, with respect to the marginal profit that accrues from the transfer of the fixed assets for the pre-conversion business, he may choose not to include an amount that is calculated as prescribed by Presidential Decree in the gross income in calculating his income amount for the relevant business year. In such cases, not less than the amount obtained by equally dividing the relevant amount shall be included in the gross income during the period of each of three business years from the business year whereto belongs the date on which three years lapse after the end of the business year to which the transfer date belongs. <Amended by Act No. 8827, Dec. 3, 2007; Act No. 9272, Dec. 26, 2008>(2) In the application of the provisions of paragraph (1), any resident may be eligible for the reduction and exemption of the tax amount or the deferment of the taxation in the way falling under each of the following subparagraphs:1. The way of reducing and exempting the tax amount equivalent to 50/100 of the transfer income tax as prescribed by Presidential Decree in cases where the machinery and equipment of the converted business are acquired with the transfer value of the business buildings of the pre-conversion business and the land attached thereto (hereafter referred to as the “transfer value of the pre-conversion business” in this Article); and2. The way of deferring the taxation as prescribed by Presidential Decree in cases where the business buildings of the converted business and the land attached thereto are acquired with the transfer value of the pre-conversion business.(3) In cases where any national who is eligible for the application of the provisions of paragraphs (1) and (2) does not convert his business or discontinues or shuts down his converted business within 3 years from the date on which he begins running his converted business, he shall include an amount that is calculated as prescribed by Presidential Decree in the gross income when he calculates his income amount of the business year during which the relevant grounds occur or pay the reduced and exempted tax amount or taxation-deferred tax amount as the transfer income tax. In such cases, the corporation tax or the transfer income tax that is added by an amount equivalent to the interest that is calculated as prescribed by Presidential Decree when he files a return of the tax base of the relevant taxable year, and the relevant tax amount shall be deemed the tax amount that has to be paid pursuant to the provisions of Article 64 of the Corporation Tax Act and Article 111 of the Income Tax Act.(4) In the application of the provisions of paragraphs (1) through (3), the scope of the business conversion, the scope of the fixed assets for business, the details of the marginal profit that accrues from the transfer of the fixed assets for business, the filing of the written application for reducing and exempting the tax amount and the written application for deferring the taxation and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7839, Dec. 31, 2005]

(1) In cases where any national who runs a small or medium enterprise converts the business that he has continued to run without interruption for at least five years and the business that an enterprise under trade adjustment assistance has run (hereafter referred to as the “pre-conversion business” in this Article) into a business falling under any of the subparagraphs of Article 6 (3) (hereafter referred to as the “converted business” in this Article) outside the over-concentration control zone of the Seoul Metropolitan area (in cases of an enterprise under trade adjustment assistance, including a case of converting its business within the over-concentration control zone of the Seoul Metropolitan area), not later than December 31, 2009 (in the case of the establishment of a new factory, not later than December 31, 2011) according to the following subparagraphs, a tax amount equivalent to 50/100 of the income tax or corporation tax on incomes derived from the converted business for the taxable year whereto belongs the date on which the first income is derived from such business (where no income is derived from the business concerned by the taxable year whereto belongs the date on which five years pass from the date of business conversion, the taxable year whereto belongs the date on which the five years pass) since the date of converting the business prescribed by Presidential Decree (hereafter referred to as the “date of business conversion” in this Article) and also for the subsequent taxable years that end within three years after the beginning of the following taxable year shall be reduced or exempted: <Amended by Act No. 8827, Dec. 3, 2007; Act No. 9272, Dec. 26, 2008>1. Where he transfers or discontinues the pre-conversion business and converts it into the converted business within one year (in the case of the establishment of a new factory, within three years) after the date of such transfer or discontinuance; and2. Where he reduces the size of the pre-conversion business and adds the converted business as prescribed by Presidential Decree.(2) In the application of the provisions of paragraph (1) 2, the reduction or exemption of the income tax or corporation tax pursuant to the said paragraph shall not apply to the taxable year determined by Presidential Decree during the period in which the income tax or corporation tax is reduced or exempted.(3) In cases where any national to whom the provisions of paragraph (1) were applied does not convert his business or discontinues or shuts down his converted business within 3 years from the date of the business conversion, he shall pay, as the income tax or corporation tax, the tax amount reduced or exempted at the time of calculating the income amount for the taxable year whereto belongs the date on which such a cause occurs.(4) In cases where the income tax or corporation tax reduced or exempted pursuant to paragraph (1) is paid in accordance with paragraph (3), the provisions of Article 40 (2) concerning the additional amount equivalent to the interest shall apply mutatis mutandis. <Amended by Act No. 8827, Dec. 3, 2007>(5) Any national who desires to be eligible for the application of the provisions of paragraph (1) shall make an application for the reduction or exemption of tax amount as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where a national incorporates a holding company (including a financial holding company under the Financial Holding Companies Act; hereafter in this Article referred to as a “holding company”) under the Monopoly Regulation and Fair Trade Act or converts an existing domestic corporation into a holding company pursuant to investment in kind of stocks, the comprehensive exchange of stocks under Article 360-2 of the Commercial Act and the comprehensive transfer of stocks under Article 360-15 of the same Act (hereafter in this Article referred to as “investment in kind, etc.”) not later than December 31, 2009, the transfer income tax or corporation tax on an amount equivalent to the marginal profits from the transfer of stocks acquired by the investment in kind, etc. from among the value of stocks acquired by the investment in kind, etc., may be allowed to be deferred until the relevant national disposes of the stocks of such holding company as prescribed by Presidential Decree. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(2) In cases where a national invests his stocks in kind in a domestic corporation that has been converted into a holding company (including a domestic corporation converted into a holding company pursuant to paragraph (1); hereafter in this Article referred to as a “converted holding company”) by means of investment in kind or division (only applicable to division satisfying the requirements under the subparagraphs of Article 46 (1) or Article 47 (1) of the Corporation Tax Act; hereafter in this Article referred to as the “division”), or exchanges his stocks with the treasury stocks of the relevant converted holding company (hereafter in this Article referred to as the “treasury stock exchange”), not later than December 31, 2009, by satisfying all the requirements of the following subparagraphs, the transfer income tax or corporation tax on an amount equivalent to the marginal profits from the transfer of stocks acquired by the investment in kind or treasury stock exchange, from among the stock values of the holding company emerged by conversion acquired by such investment in kind or treasury stock exchange may be allowed to be deferred until such a national disposes of the stocks of such holding company emerged by conversion as prescribed by Presidential Decree: <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. It is required that as a corporation the possession percentage of stocks of which by a converted holding company is under the percentage prescribed by the main sentence other than the items of Article 8-2 (2) 2 of the Monopoly Regulation and Fair Trade Act (hereafter in this Article referred to as a “subsidiary under the percentage of stakes”), stocks of corporations falling under the following items shall be subject to investment in kind or exchange of treasury stocks:(a) When it becomes a converted holding company, other domestic corporation invested by the relevant converted holding company; and(b) A corporation newly established or merged by division of a converted holding company and a corporation continuing to exist after division.2. It is required that stocks should be invested in kind or exchanged with the treasury stocks of a converted holding company within two years from the date on which it became a converted holding company; and3. It is required that, in case of the treasury stocks exchange, all the stockholders of the subsidiary affiliated by lower stock holding ratio should be allowed to participate in such treasury stock exchange and this fact should be publicly noticed as prescribed by Presidential Decree.(3) In case where any cause falling under one of the following subparagraphs occurs after a national has been subject to a deferred taxation of transfer income tax or corporation tax under paragraph (1) or (2), such deferred transfer income tax or corporation tax shall be paid as prescribed by Presidential Decree. In such cases, if it falls under subparagraphs 3 and 4, an amount equivalent to the interest computed as prescribed by Presidential Decree shall be paid in addition to the relevant payable transfer income tax or corporation tax: <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7839, Dec. 31, 2005>1. Where a holding company newly formed or emerged by conversion under paragraph (1) or a holding company emerged by conversion under paragraph (2) is not a holding company any longer: Provided, That this shall not apply to such cases determined by Presidential Decree and the cases where it is not a holding company any longer due to an amendment of the Acts and subordinate statutes governing the standards for holding companies, such as the Monopoly Regulation and Fair Trade Act, etc.;2. Where a resident who has been subject to a deferred taxation of transfer income tax donates the stocks of a holding company or a holding company emerged by conversion that he acquires by means of an investment in kind or treasury stock exchange, or where the inheritance of such stocks is duly executed;3. Where a holding company emerged by conversion retains the stocks of a subsidiary affiliated by lower stock holding ratio at the level lower than the ratio as stipulated by the main sentence of Article 8-2 (2) 2 of the Monopoly Regulation and Fair Trade Act until the date on which 2 years have passed since the day next to that on which the abovementioned company was converted into a holding company; or4. Where a resident and his relatives (hereafter in this paragraph referred to as the “largest stockholder”), who hold the number of stocks representing in the aggregate the largest portion of the total number of stocks issued by a holding company emerged by conversion as of the date of the treasury stock exchange (in case of such exchange done on several occasions, the date on which two years have passed since the conversion of this company into such holding company), make a treasury stock exchange and thereby become an executive member of the relevant subsidiary company under the Monopoly Regulation and Fair Trade Act.(4) In cases where any stockholder who has been deferred the taxation of the income tax or corporation tax by transfer of his stocks to a financial holding company (hereafter in this paragraph referred to as an “intermediary holding company”) controlled by other financial holding company or by exchange of his stocks with those of an intermediary holding company pursuant to paragraph (1) exchanges stocks of the intermediary holding company which he has received in return for such exchange of stocks or transfer of stocks with stocks of the financial holding company controlling the intermediary holding company not later than December 31, 2009, with respect to the income tax or corporation tax the taxation of which has been deferred from the first, notwithstanding paragraph (1), taxation may be deferred again as prescribed by Presidential Decree until the relevant stockholder transfers stocks of the financial holding company which he has received in return for such exchange of stocks. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(5) In applying the provisions of paragraphs (1) through (3), such matters as may be necessary concerning the calculation of the transfer margin of stocks, submission of the detailed statement of the investment in kind, etc. shall be prescribed by Presidential Decree. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>[This Article Wholly Amended by Act No. 6297, Dec. 29, 2000]

(1) In cases where a domestic corporation, which has continued to run its business without interruption for not less than 5 years, establishes a new foreign corporation by investing in kind the stocks or equities (hereafter in this Article referred to as the “stocks, etc.”) of a foreign affiliated company (referring to a foreign corporation in which a domestic corporation contributes not less than 20/100 of the total issued stocks or total contribution amount as of the date of investment in kind; hereafter in this Article the same shall apply), or invests in kind in a foreign corporation already established, not later than December 31, 2009, as regards the amount equivalent to the transferred margin of the stocks, etc. of a foreign affiliated company accruing from such investment in kind, the amount computed by multiplying the amount, which is obtained by dividing such amount by 36, by the number of months in the relevant business year shall be included in gross income in calculating the income amount for respective business year, from the business year whereto belongs the day on which 4 years elapse since the relevant transfer date. <Amended by Act No. 8146, Dec. 30, 2006>(2) In case where a domestic corporation, which has invested in kind the stocks, etc. of a foreign affiliated company under paragraph (1), transfers the stocks, etc. acquired through an investment in kind before including the entire amount of transfer margin of relevant stocks, etc., the amount calculated by the methods as prescribed by Presidential Decree, which is the amount equivalent to the rate of transferred stocks, etc. among the amount that has not yet been included in gross income, shall be included in gross income, and where a domestic corporation or a foreign corporation that has been invested in kind the stocks, etc. of a foreign affiliated company by the former, closes the business or is dissolved, the entire amount of that which has not yet been included in gross income shall be included in gross income in calculating the income amount for the business year whereto belongs the date on which the relevant causes have occurred: Provided, That this shall not apply to the case falling under any of the following subparagraphs:1. Where a merged corporation through a merger or division of a domestic corporation, the newly-established corporation through a division, or the counterpart corporation of divided merger transfers the stocks, etc. acquired by an investment in kind by the relevant domestic corporation; and2. Where a domestic corporation invests in kind the stocks, etc. of a foreign corporation, which has been acquired through an investment in kind of the stocks, etc. of a foreign affiliated company, in another foreign corporation within one month.(3) Any domestic corporation which intends to be subjected to an application of paragraph (1) shall submit a specification of transfer margin from an investment in kind of the stocks, etc. to the head of the tax office having jurisdiction over the place of tax payment as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6538, Dec. 29, 2001]

(1) In cases where the stockholders, etc. of a corporation prescribed by Presidential Decree (hereafter referred to as the “stockholders, etc.” in this Section) transfer on or before December 31, 1999 their properties (limited to those acquired on or before December 31, 1997, including real estate, stocks, contribution shares, or others as prescribed by Presidential Decree; hereafter the same shall apply in this Article), and donate the proceeds of such transfer to the relevant corporation by satisfying the requirements of the following subparagraphs, the tax amount equivalent to 100/100 of the transfer income tax corresponding to the donated amount (limited to the amount calculated as prescribed by Presidential Decree in view of the stockholding ratio, etc. by the stockholders, etc.) from among the transfer proceeds, shall be abated or exempted on incomes derived from the transfer of such property: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. The relevant corporation (excluding a small or medium enterpriser prescribed by Presidential Decree) shall obtain an approval for its plan for improvement of financial structure or self-help plan (including a modified approval for the approved details; hereafter the same shall apply in this Article), according to the following classifications:(a) In case of a corporation that is not a financial institution prescribed by Presidential Decree (hereafter referred to as a “financial institution” in this Article and Article 44): It shall submit to an organization composed of financial institutions having the claims against the relevant corporation (hereinafter referred to as the “consultative council of financial institutions”) a plan for improvement of financial structure that includes the transfer of the properties of stockholders, etc. in order to redeem the liabilities to the financial institution (including the liabilities succeeded from the financial institutions to other persons), which are prescribed by Presidential Decree (hereinafter referred to as the “liabilities to financial institutions”), the details of the donated proceeds from such transfer, and the plan for redemption of liabilities to financial institutions, and obtain its approval therefor; or(b) In case of a financial institution: It shall submit to the head of its supervisory agency a self-help plan that includes the transfer of properties of stockholders, etc., the details of the donated proceeds from such transfer, the plan for the use of donated amount, etc., and obtain its approval therefor;2. The stockholders, etc. shall transfer the properties, and donate the proceeds of such transfer to the relevant corporation within the time limit prescribed by Presidential Decree from the date of such transfer (the date prescribed by Presidential Decree, in case of long-term installment terms): Provided, That in cases where the relevant corporation is not a small or medium enterpriser prescribed by Presidential Decree (hereafter referred to as a “small or medium enterpriser” in this Article), it shall be limited only to a case where it has complied with its plan for improvement of financial structure or a self-help plan approved under subparagraph 1; and3. The relevant corporation shall use the entire amount donated by the stockholders, etc. for the redemption of its liabilities to financial institutions (referring to the use according to a self-help plan, in cases where the relevant corporation is a financial institution) within the time limit prescribed by Presidential Decree from the date of receiving such donation (where there exists any inevitable cause prescribed by Presidential Decree, the date next to that on which such cause disappears).(2) In cases where a corporation granted a property donation under paragraph (1) falls under any of the following subparagraphs, the amount equivalent to the tax amount calculated under the conditions as prescribed by Presidential Decree and the additional amount equivalent to the interest calculated under the conditions as prescribed by Presidential Decree from among the transfer income tax amount reduced or exempted under paragraph (1), shall be paid as the corporation tax at the time of filing the tax base for the taxable year wherein such cause occurs. In this case, the relevant tax amount shall be deemed the tax amount payable under Article 64 of the Corporation Tax Act: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>1. Where the relevant corporation discontinues the relevant business or is dissolved within three years from the date of receiving the proceeds of a property transfer: Provided, That this shall not apply to the case where a merged corporation, a corporation newly established by division, or the counterpart corporation to a merger through division succeeds the relevant real estate, or where there exists any inevitable cause prescribed by Presidential Decree, such as bankruptcy; and2. Where the debt ratio of the relevant corporation (excluding financial institutions and small or medium enterprisers) increases higher than the standard debt ratio during the period of within three years since the redemption of liabilities to the financial institutions.(3) A corporation granted a donation of property transfer proceeds under paragraph (1) shall make an application for reduction or exemption under the conditions as prescribed by Presidential Decree.(4) The financial institutions consultative council that has approved a plan for improvement of financial structure or self-help plan under paragraph (1) or the head of its supervisory agency shall submit the contents and performance results of the plan for improvement of financial structure or self-help plan to the Commissioner of the National Tax Service, under the conditions as prescribed by Presidential Decree.(5) The scope of stockholders, etc., the date of transfer, and the matters concerning the contents and approval, etc. of a plan for improvement of financial structure or a self-help plan under paragraph (1), the computation of the debt ratio and standard debt ratio under paragraph (2), and other necessary matters shall be prescribed by the Presidential Decree.

(1) Where any person who has acquired on or before December 31, 1999 the real estate eligible for reduction or exemption from the transfer income tax under Article 40 (1) (hereafter in this Article, referred to as the “real estate subject to restructuring”) transfers the relevant real estate within 5 years from the date of its acquisition, the tax amount equivalent to 50/100 of the transfer income tax on the income accruing from such transfer shall be reduced or exempted, and where he transfers the relevant real estate subject to restructuring after the lapse of 5 years from the date of its acquisition, the amount equivalent to 50/100 of the transfer incomeaccruing for 5 years from the date of its acquisition shall be subtracted from his income amount subject to the taxation of the transfer income tax. <Amended by Act No. 6538, Dec. 29, 2001>(2) Any person who intends to be eligible for the application of paragraph (1) shall make an application for reduction or exemption as prescribed by Presidential Decree.(3) The confirmation of real estate subject to restructuring, and the calculation of transfer income amount accruing for 5 years from the date of its acquisition under paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.

(1) Where any corporation that has been subject to a decision to authorize the rehabilitation plan pursuant to the Debtor Rehabilitation and Bankruptcy Act has been exempted from a part of its debts owed to a financial institution, or where any company with symptoms of insolvency problems that has entered into an agreement on implementing a management normalization program under the Corporate Restructuring Promotion Act has been exempted from a part of its debts owed to a creditor financial institution under the same Act (including a case where it has been exempted from a part of its debt in connection with the exercise of the right to request their purchase of claims by opposing creditors under Article 29 of the same Act) with meeting the requirements of the following subparagraphs, not later than December 31, 2009, an amount equivalent to the debts from which it was exempted (limited to an amount exceeding the deficit determined by Presidential Decree; hereafter referred to as the “gains from debt exemption” in this Article) shall be added to its gross income not for the business year concerned and for three business years after the end of the business year concerned but for each of three business years following the preceding three business years in equally divided portions of such amount: <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7428, Mar. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8572, Aug. 3, 2007>1. It is required that the amount of debts to be exempted should be included in the decision to authorize the rehabilitation plan as well as in the agreement on implementing the management normalization program: Provided, That the same shall not apply to the amount of debts that was exempted in connection with the right to request their purchase of claims by an opposing creditor under the Corporate Restructuring Promotion Act; and2. It is required that the financial institution and creditor financial institution under the Corporate Restructuring Promotion Act that has granted debt exemption should not be the specially related persons as provided for in Article 52 (1) of the Corporation Tax Act.(2) Deleted. <by Act No. 7839, Dec. 31, 2005>(3) In cases where any company entering into an agreement under the Corporate Restructuring Investment Companies Act is exempted from a part of debts in the process of having its debt converted into investment shares by the corporate restructuring investment company, such gains from debt exemption shall be included in the gross income by applying mutatis mutandis the provisions of paragraph (1). <Amended by Act No. 6762, Dec. 11, 2002>(4) In cases where any corporation exempted from its debts under paragraph (1) discontinues its business or is dissolved before the gains from debt exemption are fully included in its gross income, the total amount not included in its gross income shall be added to the gross income in calculating its income for the business year whereto belongs the date on which any of such causes occurs. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005>(5) Financial institutions and creditor financial institutions provided for in the Corporate Restructuring Promotion Act (excluding any corporate restructuring investment company provided for in the Corporate Restructuring Investment Company Act) that have exempted a corporation from debts under paragraph (1) shall include the amount equivalent to debts so exempted in deductible expenses in computing their incomes for the business year concerned. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005>(6) In applying the provisions of paragraphs (1) and (3) through (5), matters concerning the submission of a specification of debts exemption and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005>[This Article Wholly Amended by Act No. 6045, Dec. 28, 1999]

(1) In cases where a stockholder (referring to a stockholder who holds not less than 10/100 of the total number of stocks that are issued by the relevant corporation; hereafter in this Article the same shall apply) of a corporation, that is a joint-stock company, (hereafter in this Article referred to as the “affiliated corporation”) exchanges his own stocks with the treasury stocks of a venture business (excluding the stock-listed corporations under the Securities and Exchange Act; hereafter in this Article the same shall apply) or receives stocks which are newly issued by the venture business in return for his investment in kind not later than December 31, 2009, after meeting the requirements as set forth in the following subparagraphs, the taxation of a transfer income tax on the margin accruing from the exchange or acquisition of the new stocks may, under the conditions as prescribed by Presidential Decree, be allowed to be deferred until the stockholder concerned disposes of such stocks acquired by the exchange of his own stocks with the treasury stocks or the investment in kind (hereafter in this Article referred to as the “stock exchange, etc.”): <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>1. It is required that a plan for strategic alliance between the venture business and the affiliated corporation should be worked out as prescribed by Presidential Decree and that stock exchange, etc. should be made according to such a plan;2. It is required that a person as determined by Presidential Decree who is specially related with a stockholder of the affiliated corporation should not be in any special relationship as determined by Presidential Decree with the largest stockholder as determined by the Presidential Decree of the venture business; and3. It is required that the affiliated corporation and the venture business should conclude a contract stipulating that the stocks acquired by the stockholder of the affiliated corporation through stock exchange, etc. and the stocks acquired by the venture business through stock exchange, etc. must be held for not less than one year respectively.(2) Where the stockholder of the affiliated corporation who was allowed to defer a transfer income tax under paragraph (1) violates the provisions of paragraph (1) 3, he shall, under the conditions as prescribed by Presidential Decree, pay the transfer income tax that was allowed to be deferred.(3) Any person who desires to be allowed to defer transfer income tax under paragraph (1) shall apply therefor under the conditions as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) Where a stockholder (referring to the stockholder who holds not less than 10/100 of the total number of stocks that are issued by the relevant corporation; hereafter in this Article the same shall apply) of any small or medium corporation (hereafter in this Article referred to as a “partnership logistics corporation”) that runs the logistics business exchanges his own stocks with the treasury stocks of any other small or medium corporation (excluding any stock-listed corporation and any KOSDAQ-listed corporation under the Securities and Exchange Act; hereafter in this Article referred to as a “partnership counterpart logistics corporation”) that runs the logistics business or receives stocks which are newly issued by the partnership counterpart logistics corporation in return for his investment in kind on or before December 31, 2009 after meeting the requirements falling under each of the following subparagraphs, the taxation of a transfer income tax on the marginal profits accruing from such exchange or the acquisition of new stocks may be deferred by the time when the relevant stockholder disposes of the stocks of the partnership counterpart logistics corporation, which he acquires by means of stock exchange or investment in kind (hereafter in this Article referred to as “stock exchange, etc.”) under the conditions as prescribed by the Presidential Decree: <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>1. It is required that the strategic partnership program should be facilitated between the partnership logistics corporation and the partnership counterpart logistics corporation and their stocks should be exchanged according to such strategic partnership program under the conditions as prescribed by Presidential Decree;2. It is required that any stockholder of the partnership logistics corporation or anyone who is specially related with the relevant stockholder should not be specially related with the largest stockholder of the partnership counterpart logistics corporation; and3. It is required that the partnership logistics corporation and the partnership counterpart logistics corporation enter into an agreement that any stockholder of the partnership logistics corporation should hold any stock that is acquired through the stock exchange, etc. and the partnership counterpart logistics corporation should hold any stock that is acquired through the stock exchange, etc. for not less than one year.(2) In the application of paragraph (1), matters concerning the scope of the logistics business, the scope of the largest stockholder and the scope of the specially related person shall be determined by Presidential Decree.(3) The provisions of Article 46-2 (2) and (3) shall apply mutatis mutandis to the special taxation for the stock exchange, etc. for the strategic partnership of logistics corporations. In this case, the “affiliated corporation” shall be deemed the “partnership logistics corporation”.[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) With respect to an amount equivalent to the marginal profit that accrues from the transfer of the self-distribution facilities prescribed by Presidential Decree (hereafter referred to as the “self-distribution facilities” in this Article) on or before December 31, 2009, which is derived by a domestic corporation falling under a small or medium enterprise that has continued to run its business without interruption for not less than one year, the amount calculated pursuant to the Presidential Decree shall not be required to be included in the gross income in calculating its income for the business year concerned. In this case, not less than the amount obtained by equally dividing the relevant amount shall be included in the gross income during the period of each of three business years from the business year whereto belongs the date on which three years lapse after the end of the business year to which the transfer date belongs.(2) In cases where any domestic corporation to whom the provisions of paragraph (1) were applied discontinues or shuts down its business within three years from the date on which the self-distribution facilities were transferred or fails to satisfy the requirements that fall under any of the following subparagraphs, it shall include the amount calculated pursuant to the Presidential Decree in the gross income at the time of calculating the income amount for the business year whereto belongs the date on which such a cause occurs. In this case, with respect to the amount to be included in the gross income, the provisions of the latter part of Article 33 (3) shall apply mutatis mutandis: <Amended by Act No. 8827, Dec. 31, 2007>1. It is required that the distribution expenses (hereafter referred to as the “third party distribution expenses” in this Article and Article 104-14) disbursed to persons other than the specially related persons provided for in Article 52 (1) of the Corporation Tax Act out of the distribution expenses defrayed during respective business years for the period fixed by Presidential Decree after the self-distribution facilities are transferred be not less than 70/100 of the total distribution expenses; and2. It is required that the third party distribution expenses disbursed during respective business years for the period fixed by the Presidential Decree be not less than an amount obtained by multiplying the marginal profit that accrues from the transfer of the self-distribution facilities by the rates referred to in items (a) and (b):(a) Tax rate provided for in Article 55 of the Corporation Tax Act; and(b) Interest rate prescribed by Presidential Decree in consideration of the interest rates to which the financial institutions applies.(3) In the application of paragraphs (1) and (2), the scope of distribution expenses, the submission of a specification of the transfer margin, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

In case where a domestic corporation is merged with any such distribution-specialized corporation as determined by Presidential Decree (hereafter referred to as the “distribution-specialized corporation” in this Article) after dividing the section of distribution business on or before December 31, 2009, which meets all the requirements of the following subparagraphs, and a corporation that is newly incorporated after such division or a counterpart corporation of the merger through division appraises and succeeds to the assets of the divided corporation or the extinguished counterpart corporation of the merger through division, an amount equivalent to the marginal profit that accrues from the division appraisal of the relevant assets in the value of the assets acquired by succession (limited to those determined by Presidential Decree) may be included in the deductible expenses at the time of calculating the income amount of the business year whereto belongs the date on which the division is registered pursuant to the main sentence of Article 46 (1) (with the exception of its subparagraphs) of the Corporation Tax Act: Provided, That this shall not apply to the cases where the divided corporation, the corporation that is newly incorporated after such division or the counterpart corporation of the merger through division falls under any such specially related person as provided for in Article 52 (1) of the Corporation Tax Act:1. It is required that the domestic corporation that has continued to run its business without interruption for not less than one year as of the date on which the division is registered be divided as prescribed by Presidential Decree; and2. It is required that the domestic corporation falls under Article 46 (1) 2 and 3 of the Corporation Tax Act.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

In cases where a corporation which is engaged in the logistics industry (hereafter referred to as the “logistics corporation” in this Article) is merged with any other logistics corporation on or before December 31, 2009, which meets all the requirements of the following subparagraphs, the deficits of the merged corporation provided for in subparagraph 1 of Article 13 of the Corporation Tax Act as of the date on which the merger is registered may be deducted in calculating the tax base for each business year of the merging corporation pursuant to Article 45 of the abo vementioned Act within the scope of the amount determined by Presidential Decree:1. It is required that the corporation meet all the requirements referred to in subparagraphs of Article 44 (1) of the Corporation Tax Act;2. It is required that the merging corporation succeed to the assets of the merged corporation in its book value;3. It is required that the stocks or equities received by the stockholders, employees, or investors of the merged corporation be not less than 3/100 of the total number of stocks issued by, or the total amount of owner’ equity in, the merging corporation as of the date when the merging corporation makes the merger registration; and4. It is required that the corporation falls under Article 45 (1) 3 of the Corporation Tax Act.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

Where any corporation (including a venture business) merges with a venture business, not later than December 31, 2009, after meeting such requirements as set forth in the following subparagraphs, the deficit of the mergee corporation as of the date of merger registration pursuant to subparagraph 1 of Article 13 of the Corporation Tax Act may be deducted in calculating the tax base of the merger corporation for each business year in accordance with Article 45 of the same Act within the limits of an amount as determined by Presidential Decree: <Amended by Act No. 8146, Dec. 30, 2006>1. It is required that it should meet the requirements as set forth in each subparagraph of Article 44 (1) of the Corporation Tax Act. In this case, in applying subparagraph 1 of the same paragraph, where one year has passed since it acquired relevant assets or paid expenses for the purpose of carrying out such projects as research and development, etc., the venture business shall be deemed to have continued to run its business without interruption for not less than one year;2. It is required that it should comply with all the requirements as set forth in subparagraphs 2 through 4 of Article 46-6; and3. and 4. Deleted. <by Act No. 8146, Dec. 30, 2006>[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) In cases where any domestic corporation holds new redundant assets as a result of a merger (including a merger through division) on or before December 31, 2010 and any merger corporation transfers the redundant assets within one year from the date on which its merger register is effected and acquires new business assets with the transfer price by the end of the business year whereto belongs the date on which the redundant assets are transferred (in cases where the period ranging from the date on which the merger register is effected to the end of the business year whereto belongs the date on which the redundant assets are transferred is not more than one year, referring to the date on which one year expires), with respect to the marginal profit that accrues from the transfer of the relevant redundant assets (including the marginal profit that accrues from the merger appraisal of the relevant redundant assets and the marginal profit that accrues from the division appraisal of the relevant redundant assets), an amount that is calculated as prescribed by Presidential Decree may not be included in the gross income in the calculation of its amount of income for the relevant business year. In such cases, not less than the amount obtained by equally dividing the relevant amount shall be included in the gross income during the period of each of 3 business years from the business year whereto belongs the date on which 3 years lapse after the last day of the business year to which the transfer date belongs. <Amended by Act No. 8827, Dec. 31, 2007>(2) In cases where any domestic corporation that is subject to the application of the provisions of paragraph (1) fails to acquire new fixed assets for business within the deadline provided for in the provisions of the same paragraph and discontinues or shuts down the relevant business within three years from the date on which the merger register is effected, the amount that is calculated as prescribed by Presidential Decree shall be included in the gross income in the calculation of the amount of income of the business year to which the date on which the relevant grounds occur belongs. In such cases, the provisions of the latter part of Article 33 (3) shall apply mutatis mutandis to the amount that is included in the gross income.(3) In the application of the provisions of paragraph (1), the scope of the redundant assets, the scope of the fixed assets for business, the submission of the details of the marginal profit from transfer and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7839, Dec. 31, 2005]

Where any financial institution under subparagraph 1 of Article 2 of the Act on the Structural Improvement of the Financial Industry (hereafter referred to as an “underwriting financial institution” in this Article) takes over the debts that exceed the value of assets of an insolvent financial institution (hereafter referred to as an “insolvent financial institution”) under subparagraph 3 of Article 2 of the same Act, not later than December 31, 2009, pursuant to an order for a contract transfer among the timely corrective measures in accordance with Article 10 of the same Act (hereafter referred to as the “timely corrective measures” in Articles 117, 119 and 120) or a decision on a contract transfer under Article 14 (2) of the same Act (hereafter referred to as the “decision on contract transfer” in Articles 117, 119 and 120) and satisfies any requirement of the following subparagraphs, it shall include in its deductible expenses the values of transferred debts that exceed the values of transferred assets (hereafter referred to as the “net debts” in this Article), in calculating its income for the relevant business year: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 8146, Dec. 30, 2006>1. It is required that the underwriting financial institution should be compensated for the amount equivalent to the net debts by the Korea Deposit Insurance Corporation under Article 3 of the Depositor Protection Act (hereinafter referred to as the “Korea Deposit Insurance Corporation”); and2. It is required that the value of assets and debts transferred to the underwriting financial institution should be the value confirmed by the Governor of the Financial Supervisory Service.

(1) and (2) Deleted. <by Act No. 8146, Dec. 30, 2006>(3) Deleted. <by Act No. 6538, Dec. 29, 2001>(4) In cases where any self-managed real estate investment company provided for in subparagraph 1 (a) of Article 2 of the Real Estate Investment Company Act (hereafter referred to as a “self-managed real estate investment company” in this Article) builds new housing units below the size prescribed by Presidential Decree (hereinafter referred to as the “national housing units”), or carries on lease business by purchasing national housing units which have never been occupied by any tenants at the time of their acquisition, not later than December, 31, 2009, it shall be allowed to deduct an amount equivalent to the 50/100 of the income amount that has been derived from the lease of the national housing units from its income amount for the business year wherein the first income was derived from such lease business (in cases where there was no income derived from the lease business not later than the business year whereto belongs the date on which five years lapse after the beginning date of the business, it refers to the business year whereto belongs the date on which the five years lapse) and for each of five business years from the beginning date of the business year following the business year concerned. <Newly Inserted by Act No. 6538, Dec. 29, 2001; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>(5) Deleted. <by Act No. 8146, Dec. 30, 2006>(6) In applying the provisions of paragraph (4), such matters as may be necessary for the calculation of the amount of income deduction, application for income deduction, etc. shall be prescribed by Presidential Decree. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 8146, Dec. 30, 2006>[This Article Newly Inserted by Act No. 6501, Aug. 14, 2001]

With respect to the business year whereto belongs profits derived, and losses incurred, by a corporation from investing, not later than December 31, 2004, in an association determined by Presidential Decree which has been organized for the purposes of the stabilization of the securities market or the investment trust market through investment, etc. in the listed securities, the business year whereto belongs the date on which the association concerned has such profits and losses actually shared by such corporation shall, notwithstanding Article 40 of the Corporation Tax Act, become the business year whereto belongs such profits and losses. <Amended by Act No. 7003, Dec. 30, 2003>

(1) Deleted. <by Act No. 6538, Dec. 29, 2001>(2) Where any domestic corporation which runs its business with its factory and facilities installed in a large city prescribed by Presidential Decree (hereinafter referred to as a “large city”) transfers the site and buildings of such factory on or before December 31, 2011 in order to re-locate such factory to outside of the large city (hereafter referred to as the “rural area” in this Article), an amount computed as prescribed by Presidential Decree within the limits of the marginal profits accruing from such transfer less the carryover deficits under subparagraph 1 of Article 13 of the Corporation Tax Act as of the end of the business year immediately preceding the year whereto belongs the date of transfer, may not be added to its gross income in calculating its income for the relevant business year. In such cases, the relevant amount that exceeds the equally divided amount shall be included in the gross income during the period of five business years from the business year whereto belongs the date on which five years lapse after the date on which the business year to which the transfer date belongs comes to an end. <Newly Inserted by Act No. 5996, Aug. 31, 1999; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(3) Deleted. <by Act No. 6538, Dec. 29, 2001>(4) In cases where a domestic corporation subjected to paragraph (2) fails to commence a business by acquiring a local factory as prescribed by Presidential Decree or discontinues its business, or is dissolved before such entire amount not included in gross income is fully added to its gross income, the amount calculated as prescribed by Presidential Decree from among the amount not added to its gross income in calculating the income for the business year whereto belongs the date on which such cause occurs shall be added to its gross income. In such cases, the latter part of Article 33 (3) shall apply mutatis mutandis to the amount added to its gross income (excluding any amount added to its gross income, when such corporation discontinues its business or is dissolved due to a merger or a division and a merger through division). <Newly Inserted by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 8827, Dec. 31, 2007>(5) Deleted. <by Act No. 6538, Dec. 29, 2001>(6) Any domestic corporation which intends to be governed by paragraph (2) shall submit to the head of a tax office having jurisdiction over the place of tax payment a detailed statement of transfer margin of land or buildings (hereinafter referred to as "land, etc.") as prescribed by Presidential Decree. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 9272, Dec. 26, 2008>

(1) and (2) Deleted. <by Act No. 6538, Dec. 29, 2001>(3) Where any corporation whose headquarters or principal office is located in the over-concentration control zone of the Seoul Metropolitan area transfers the site and buildings of the headquarters or principal offices in question on or before December 31, 2011 in order to relocate this headquarters or principal offices to outside of the over-concentration control zone of the Seoul Metropolitan area, an amount computed as prescribed by Presidential Decree within the limits of the margin gained from such transfer less the carryover deficits under subparagraph 1 of Article 13 of the Corporation Tax Act as of the end of the business year immediately preceding the year whereto belongs the date of transfer, may not be added to its gross income in calculating the income for the relevant business year. In such cases, the relevant amount that exceeds the equally divided amount shall be included in the gross income during the period of five business years from the business year whereto belongs the date on which five years lapse after the date on which the business year to which the transfer date belongs comes to an end. <Newly Inserted by Act No. 5996, Aug. 31, 1999; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) Deleted. <by Act No. 6538, Dec. 29, 2001>(5) In cases where a corporation subjected to paragraph (3) falls under any of the following subparagraphs before such entire amount as not included in gross income is fully added to its gross income, the amount calculated as prescribed by Presidential Decree from among the amount not added to its gross income in calculating the income for the business year whereto belongs the date on which such cause occurs shall be added to its gross income. In such cases, the latter part of Article 33 (3) shall apply mutatis mutandis to the amount added to its gross income (excluding any amount added to its gross income as such corporation discontinues its business or is dissolved due to a merger or a division and a merger through division): <Newly Inserted by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 8827, Dec. 31, 2007>1. Where it does not fall under the case where its headquarters or principal offices have been relocated to outside of the over-concentration control zone of the Seoul Metropolitan area as prescribed by Presidential Decree;2. Where it has located offices in excess of the standards prescribed by Presidential Decree in the over-concentration control zone of the Seoul Metropolitan area;3. Where it has spent the proceeds from the disposal of site and building of the headquarters or principal office in the over-concentration control zone of the Seoul Metropolitan area for any purpose other than those prescribed by Presidential Decree; and4. Where it discontinues its business or is dissolved.(6) Any domestic corporation which intends to be eligible for the application of paragraph (3) shall submit to the head of the tax office having jurisdiction over the place of tax payment a specification, etc. of transfer margin of land, etc., as prescribed by Presidential Decree. <Amended by Act No. 6538, Dec. 29, 2001>

(1) In cases where a small or medium enterprise (limited to a national) which has continued to run its business with its factory and facilities in the over-concentration control zone of the Seoul Metropolitan area without interruption for not less than two years relocates the entire factory and facilities to an area outside the over-concentration control zone of the Seoul Metropolitan area as prescribed by Presidential Decree and starts its business there on or before December 31, 2011 (if its headquarters or principal office is located in the over-concentration control zone of the Seoul Metropolitan area, only applicable to the cases where the relevant headquarters or principal office concerned is relocated as well), a tax amount equivalent to 100/100 of income tax or corporation tax on the income derived from the factory after relocation for the taxable year whereto belongs the date of such relocation and for the taxable years ending within four years from the commencing date of the following taxable year, and a tax amount equivalent to 50/100 of income tax or corporation tax on the income derived from the factory after relocation for the taxable years ending within two years thereafter, shall be reduced or exempted. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>(2) In cases where a small or medium enterprise subjected to an application of reduction or exemption under paragraph (1) falls under any of the following subparagraphs, it shall pay, as its income tax or corporation tax, the amount calculated as prescribed by Presidential Decree at the time of a tax base return for the taxable year wherein the relevant causes have occurred: <Newly Inserted by Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002>1. Where a business is discontinued or a corporation is dissolved within 3 years from the date of commencing the business by relocating the factory: Provided, That this shall not apply to the cases where it has been caused by a merger, division or merger through division;2. Where it fails to commence a business by relocating its factory to an area other than the over-concentration control zone of the Seoul Metropolitan area as prescribed by Presidential Decree; and3. 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 over-concentration control zone of the Seoul Metropolitan area during the period subjected to reduction or exemption under paragraph (1).(3) In cases where the amount of income tax or corporation tax reduced or exempted under paragraph (1) is paid under paragraph (2), the provisions concerning the amount equivalent to the interest of Article 40 (2) shall be applied mutatis mutandis. <Newly Inserted by Act No. 6538, Dec. 29, 2001>(4) Any person who intends to be eligible for the application of paragraph (1) shall make an application for the reduction or exemption as prescribed by Presidential Decree.

(1) Any corporation that meets the requirements as set forth in the following subparagraphs (hereafter referred to as a “corporation relocated to an area other than the Seoul Metropolitan area” in this Article) may be eligible for the reduction of or exemption from corporation tax under the provisions of paragraphs (2) through (4): Provided, That this shall not apply to any corporation operating a consumptive service business and any such real estate business and construction business as prescribed by Presidential Decree: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. It is required that it should be a corporation which has continued to run a business with its factory and facilities, or has continued to maintain its headquarters or principal office (hereafter referred to as the “head office” in this Article) without interruption for three years or more within the over-concentration control zone of the Seoul Metropolitan area; and2. It is required that it should, as prescribed by Presidential Decree, relocate its entire factory and facilities or its head office to outside of the Seoul Metropolitan area and start business there on or before December 31, 2011 (in case of the relocation of such factory and facilities to another Metropolitan City, only applicable to an industrial complex under the Industrial Sites and Development Act; hereafter the same shall apply in this Article) or that it should build a new factory or head office in an area outside the Seoul Metropolitan area and start business on or before December 31, 2014 (only applicable to the cases where it acquires a site for its factory or head office on or before December 31, 2011, and submits a relocation plan at the time of filing the tax base return for the taxable year whereto belongs the date of December 31, 2011).(2) Any corporation relocated to an area other than the Seoul Metropolitan area shall be entitled to the abatement or exemption of the corporation tax on its incomes under subparagraphs 1 through 3, by the full amount for the taxable year during which it is relocated through the taxable years that end within four years from the commencement date of the taxable year immediately following thereafter, and by the tax amount equivalent to 50/100 of the corporation tax for the taxable years that end within two years consecutively following the afore-said four years: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. If the factory is relocated, income derived from the source of the factory concerned;2. If the head office is relocated, income equivalent to an amount computed by multiplying the amount under item (a) by the smaller of ratio referred to in item (b) or (c) by each taxable year:(a) Amount obtained by subtracting the marginal profits accruing from any land or building or the right to acquire real estate from the tax base for the taxable year concerned;(b) Ratio of the total amount of salaries paid for the taxable year concerned to the employees working at the relocated head office after relocation to the total annual amount of salaries paid to the entire employees of the corporation; or(c) Ratio of the number of employees working at the relocated head office in the relevant taxable year to the total number of employees working in the entire corporation; and3. If the factory and head office are relocated together, income equivalent to the amount computed by summing up the incomes of subparagraphs 1 and 2: Provided, That it shall be within the limits of the total amount of income for the taxable year concerned.(3) When paragraph (2) 2 is applied, the term “number of employees working at the relocated head office” means the number of employees obtained by subtracting the annual average number of full-time employees who work at the head office in the taxable year whereto belongs the date on which three years retroactively lapse from the relocation date from the annual average number (referring to the number of employees obtained by adding up the number of employees as of the end of every month and dividing the added-up number of employees by the number of relevant months, and excluding the number of employees who move into the head office after having worked at the head office in the area other than the Seoul Metropolitan area after the taxable year to which the date on which two years retroactively lapse from the relocation date belongs) of full-time employees who work at the head office (hereafter referred to as the “relocated head office” in this Article) that is relocated to an area other than the Seoul Metropolitan area, and the term “number of employees working in the entire corporation” means the annual average number of full-time employees working in the entire corporation. <Amended by Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>(4) When paragraph (2) 2 is applied, in the case falling under any of the following subparagraphs during the period in which the corporation tax is reduced or exempted, such corporation tax may not be reduced or exempted in accordance with paragraph (2) beginning from the relevant taxable year: <Amended by Act No. 7322, Dec. 31, 2004; Act No. 9272, Dec. 26, 2008>1. Deleted. <by Act No. 9272, Dec. 26, 2008>2. Where the ratio of the number of officers prescribed by Presidential Decree (hereafter referred to as the “officers” in this Article) working at the relocated head office to the total number of officers working at the head office within the Seoul Metropolitan area and at the relocated head office falls short of 50/100.(5) The provisions of Article 60 (2), (4) and (6), or 61 (3), (5) and (6) shall apply mutatis mutandis to the corporation tax on the transfer margin accruing from the transfer of the factory or head office within the over-concentration control zone of the Seoul Metropolitan area by a corporation relocated to an area other than the Seoul Metropolitan area. <Amended by Act No. 6762, Dec. 11, 2002>(6) A parcel of land annexed to the building site of a factory owned (including a parcel of land of which the ownership is transferred due to a merger, split-off, or a merger after split-off) by a corporation relocated to an area other than the Seoul Metropolitan area (limited to the relocation of its factory) before it relocates shall be deemed to be entitled to the application of Article 182 (1) 3 (a) of the Local Tax Act for five years, beginning on the relocation date of the factory, if the parcel of land is entitled to the application of Article 182 (1) 3 (a) of the Local Tax Act as of the relocation date: Provided, That the same shall not apply when the corporation discontinues the relevant business after commencing the operation of the relocated factory. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(7) When a corporation relocated to an area other than the Seoul Metropolitan area which has been allowed reduction of or exemption from corporation tax under paragraph (2) falls under any of the following subparagraphs, an amount computed under the conditions as prescribed by Presidential Decree shall be paid as corporation tax at the time of the filing of its tax base return for the taxable year in which such cause occurs: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004>1. Where the corporation closes its business, or it is dissolved, within 3 years from the date on which it has started business after relocating its factory or head office: Provided, That the same shall not apply to the case where it is brought about by a merger, division, or a merger through division;2. Where the corporation fails to relocate its factory or head office to an area other than the Seoul Metropolitan area and start business under the conditions as prescribed by Presidential Decree;3. Where the corporation sets up in the Seoul Metropolitan area its head office or a factory producing the same products as those produced at the factory relocated under paragraph (1);4. Deleted; <by Act No. 6538, Dec. 29, 2001>5. Where the corporation, which has relocated its head office, maintains an office, the size of which is larger than the standards prescribed by Presidential Decree in the Seoul Metropolitan area; and6. Where such relocated head office falls under paragraph (4) 2.(8) The provisions concerning an additional amount equivalent to interest as referred to in Article 40 (2) shall apply mutatis mutandis to the case where the amount of corporation tax for which reduction or exemption was allowed under paragraph (2) is paid pursuant to paragraph (7). <Amended by Act No. 6538, Dec. 29, 2001>(9) If a corporation relocated to an area other than the Seoul Metropolitan area, to which Article 182 (1) 3 (a) of the Local Tax Act has been applied for five years from the date of relocation pursuant to paragraph (6) in relation to a parcel of the land annexed to the building site of the factory before it relocates, falls under any of paragraph (7) 1 through 3, the property tax and the comprehensive real estate holding tax together with the interest added up thereto shall be levied additionally as prescribed by Presidential Decree. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(10) In applying the provisions of paragraphs (1) through (5) and (7), the method of calculating a period, scope of salaries, applications for tax reduction or exemption, and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>[This Article Newly Inserted by Act No. 6045, Dec. 28, 1999]

(1) The income tax or corporation tax on any income accruing from the relevant business operated by any person falling under any of the following subparagraphs shall be reduced or exempted, by applying mutatis mutandis to Article 6 (1): <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>1. Any national operating a project for developing the income sources of agricultural and fishing villages, after moving to an agro-industrial complex prescribed by Presidential Decree not later than December 31, 2009 from among those under the Industrial Sites and Development Act; and2. A small or medium enterprise operating a business after moving to the development promotion districts pursuant to Articles 9 and 50 of the Balanced Regional Development and Support for Local Small and Medium Enterprises Act (hereafter in this paragraph referred to as the “development promotion districts”) and in a district or area as prescribed by Presidential Decree in terms of the areas for special support for local small and medium enterprises, not later than December 31, 2009 (including a national operating a tourist accommodations business and comprehensive resort business in compliance with the Tourism Promotion Act, and a livestock business, in cases where such national is selected as a development project operator and locating in an abandoned mines-neighboring area in accordance with the Special Act on the Assistance to the Development of Abandoned Mine Areas, from among the development promotion districts).(2) Any person who wishes to be subjected to the application of paragraph (1) shall apply for the reduction or exemption as prescribed by Presidential Decree.

(1) For an agricultural association corporation pursuant to the Framework Act on Agriculture, Rural Community and Food Industry (hereinafter referred to as the “agricultural association corporation”), the amount within the extent prescribed by Presidential Decree from among the total amount of income accruing from the crops cultivating business (hereinafter referred to as the “agricultural income”) and income other than the agricultural income shall be exempted from the corporation tax until the taxable year ending on or before December 31, 2009. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(2) Of the total amount of dividends that a member of the agricultural association corporation receives from the agricultural association corporation not later than December 31, 2009, the entire amount of dividend derived from agricultural income and an amount of dividend derived from incomes other than the agricultural income, shall be allowed to be exempted from the income tax within the limits determined by Presidential Decree. In such cases, the calculation of the dividend derived from agricultural income and the dividend derived from incomes other than agricultural income shall be governed by the provisions of Presidential Decree. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(3) Notwithstanding the provisions of Article 129 of the Income Tax Act, the rate of withholding tax on an income received not later than December 31, 2009 which is a dividend other than the amount that is allowed an exemption from income tax under paragraph (2), as part of (the total amount of) dividend paid by the agricultural association corporation to its members, shall be 5/100; thereupon, resident tax shall not be imposed; and such dividend shall not be added to the global income in calculating the tax base of global income under Article 14 (4) of the Income Tax Act. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(4) Any income derived by a farmer as determined by Presidential Decree from the contribution of farmland or grassland pursuant to the Grassland Act (hereinafter referred to as the “grassland”) to the agricultural association corporation as an investment in kind on or before December 31, 2009 shall be exempted from the transfer income tax. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(5) In cases where any person exempted from the transfer income tax under paragraph (4) transfers his contribution shares to another person within three years from the date of the equity investment, the amount calculated as prescribed by Presidential Decree shall be paid as the transfer income tax at the time when he has filed the tax base return for the taxable year whereto belongs the date of such transfer: Provided, That this shall not apply in such cases as determined by Presidential Decree. <Amended by Act No. 6297, Dec. 29, 2000>(6) An amount equivalent to interest calculated as prescribed by Presidential Decree shall be added when the transfer income tax exempted under the provision of paragraph (4) is paid under the provision of main sentence of paragraph (5). <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 9272, Dec. 26, 2008>(7) In cases where any farmer prescribed by Presidential Decree makes an in-kind investment in any agricultural association corporation with real estate (excluding the farmland and the grassland referred to in paragraph (4)) that is directly used to run the business of growing crops, the livestock business and the forest business provided for in subparagraph 1 of Article 3 of the Framework Act on Agriculture and Rural Community on or before December 31, 2009, he shall be eligible for the application of carry-over taxation. <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>(8) Anyone who intends to make him eligible for the application referred to in paragraphs (1), (2), (4) and (7) shall file an application therefor under the conditions as prescribed by Presidential Decree. <Newly Inserted by Act No. 7322, Dec. 31, 2004>

(1) For a fishery partnership corporation stipulated in the Fisheries Act (hereinafter referred to as the “fishery partnership corporation”), an amount of its income for each business year not later than the taxable year ending on or before December 31, 2009, shall be allowed to be exempted from corporation tax within the limits as determined by Presidential Decree. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(2) Of the dividend that a partner of the fishery partnership corporation receives from the fishery partnership corporation not later than December 31, 2009, an amount shall be allowed to be exempted from income tax within the limits as determined by Presidential Decree. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(3) Notwithstanding the provisions of Article 129 of the Income Tax Act, the rate of withholding tax on an income received not later than December 31, 2009 which is a dividend other than the amount that is allowed an exemption from income tax under paragraph (2), as part of (the total amount of) dividend paid by the fishery partnership corporation to its partners, shall be 5/100; thereupon, resident tax shall not be imposed; and such dividend shall not be added to the global income in calculating the tax base of global income in accordance with the provisions of Article 14 (2) of the Income Tax Act. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(4) Any income derived by a fisherman as determined by the Presidential Decree from the contribution of lands for the use of fishery, etc. as determined by Presidential Decree to the fishery partnership corporation as an investment in kind on or before December 31, 2009 shall be exempted from the transfer income tax. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(5) In case where a person who has been allowed exemption from the transfer income tax under paragraph (4) transfers his contribution shares to another person within three years from the date of the equity investment, an amount calculated under the conditions as prescribed by Presidential Decree shall be paid as transfer income tax at the time when he has filed the tax base return for the taxable year whereto belongs the date of such transfer: Provided, That this shall not apply to such case as determined by Presidential Decree. <Amended by Act No. 6297, Dec. 29, 2000>(6) The provisions of Article 66 (6) and (8) shall apply mutatis mutandis with respect to application for tax exemption under paragraphs (1), (2) and (4), and the payment of the tax amount under the text of paragraph (5). <Amended by Act No. 6297, Dec. 29, 2000; Act No. 8146, Dec. 30, 2006>

(1) For an incorporated agricultural corporation provided for in the Framework Act on Agriculture and Rural Community (hereinafter referred to as the “incorporated agricultural corporation”), the corporation tax on agricultural income shall be allowed to be exempted, and the corporation tax on the income, other than agricultural income, prescribed by Presidential Decree shall be eligible for reduction or exemption by the application mutatis mutandis of Article 6 (1), not later than the taxable year ending on or before December 31, 2009. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(2) Any income derived by a farmer as determined by Presidential Decree from the contribution of farmland or grassland to an incorporated agricultural corporation (limited to such case as meeting requirements for a farming corporation provided for in the Farmland Act) as an investment in kind on or before December 31, 2009 shall be exempted from the transfer income tax. In this case, the provisions of Article 66 (5) through (8) shall apply mutatis mutandis. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>(3) In case where a farmer prescribed by Presidential Decree makes an in-kind investment in any incorporated agricultural corporation with real estate (excluding the farmland and the grassland referred to in paragraph (2)) that is directly used to run the business of growing crops, the livestock business and the forest business under subparagraph 1 of Article 3 of the Framework Act on Agriculture and Rural Community on or before December 31, 2009, he shall be eligible for the application of carry-over taxation. <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>(4) With respect to the total amount of a dividend derived from agricultural income as part of a dividend received by a resident, on or before December 31, 2009, who has invested in the incorporated agricultural corporation, the income tax shall be exempted; and the dividend derived from the income other than the agricultural income shall not be added to the global income in calculating the tax base of global income in accordance with the provisions of Article 14 (2) of the Income Tax Act. In such cases, the amount of the dividend derived from the agricultural income and the dividend derived from the income other than the agricultural income shall be calculated in accordance with Presidential Decree. <Newly Inserted by Act No. 8146, Dec. 30, 2006>(5) Anyone who intends to make himself eligible for the application referred to in paragraphs (1), (3) and (4) shall file an application therefor as prescribed by Presidential Decree. <Amended by Act No. 8146, Dec. 30, 2006>

(1) With respect to income derived from the transfer of such land prescribed by Presidential Decree from among the land subject to the taxation of the agricultural income tax (including any land subject to non-taxation, tax reduction or exemption, or non-collection of small tax amount) that have been directly cultivated by a resident prescribed by Presidential Decree who resides in the location of his farmland for not less than 8 years [for not less than three years in cases where the farmland that is subject to the direct payment subsidy for the transfer of management that is prescribed by Presidential Decree is transferred to the Korea Rural Community Corporation under the Korea Rural Community Corporation and Farmland Management Fund Act and any corporation whose main business line is agriculture, which is prescribed by Presidential Decree (hereafter referred to as the “agricultural corporation” in this Article) on or before December 31, 2010], a tax amount equivalent to 100/100 of the transfer income tax shall be exempted or reduced: Provided, That where the land in question is incorporated into the residential area, commercial area or industrial area under the National Land Planning and Utilization Act (hereafter in this Article referred to as the “residential area, etc.”), or is designated as reserved land substitution as land other than farmland prior to the disposal of land substitution under the Urban Development Act and other Acts, as much as the amount of income prescribed by Presidential Decree which has been earned not later than the date of incorporation into the residential area, etc., or date of the designation of reserved land substitution shall be eligible for a reduction of or exemption from a tax amount equivalent to 100/100 of transfer income tax. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7775, Dec. 29, 2005; Act No. 7839, Dec. 31, 2005; Act No. 9276, Dec. 29, 2008>(2) In cases where an agricultural corporation transfers the land in question within 3 years from the date of the acquisition of such land, or where such causes determined by Presidential Decree occur, the corporation concerned shall pay as corporation tax the amount equivalent to the tax amount exempted under the provisions of paragraph (1) at the time of filing its tax base return for the taxable year in which such cause occurs. <Newly Inserted by Act No. 6762, Dec. 11, 2002>(3) Any person who desires to be eligible for the application of paragraph (1) shall apply for tax reduction or exemption as prescribed by Presidential Decree.[This Article Wholly Amended by Act No. 6538, Dec. 29, 2001]

(1) With respect to the income that accrues from the substitute land for the farmland, which is tilled directly by any resident determined by Presidential Decree who resides in the location of the farmland, is prescribed by Presidential Decree out of the need to till the farmland and is subject to the taxation (including the non-taxation, the reduction and exemption and the non-collection of small amount) of the agricultural income tax, the tax amount equivalent to 100/100 of the transfer income tax shall be reduced and exempted.(2) The provisions of paragraph (1) shall not apply to cases where any land that is transferred or acquired pursuant to the provisions of paragraph (1) is included in the residental area, etc. under the National Land Planning and Utilization Act and is designated by Presidential Decree as the reserved land substitution other than the farmland prior to the disposition of the land substitution is taken pursuant to the Urban Development Act and other Acts.(3) Anyone who intents to make him eligible for the reduction and exemption referred to in the provisions of paragraph (1) shall file an application for such reduction and exemption under the conditions as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7839, Dec. 31, 2005]

(1) In case where a farmland, grassland, or forest land (including equities acquired from the contribution of the farmland, grassland, or forest land to an agricultural partnership corporation as an investment in kind; hereafter in this Article referred to as the “farmland, etc.”) that have been directly cultivated by a resident determined by Presidential Decree (hereafter in this Article referred to as the “self-cultivating farmer”) who resides in the location of the farmland, etc., which meets all the requirements set forth in the following subparagraphs, is given to his lineal descendant determined by Presidential Decree (hereafter in this Article referred to as the “farming offspring”), on or before December 31, 2011, who resides in the location of and directly cultivates the farmland, etc., a tax amount equivalent to 100/100 of the gift tax on the value of the farmland, etc. shall be exempted or reduced:1. Farmland, etc. which falls under any one of the following items:(a) Farmland: The farmland subject to the taxation (including the cases of non-taxation, reduction or exemption, or non-collection of small tax amount) of the agricultural income tax pursuant to the Local Tax Act, whose area is not more than 29,700㎡;(b) Grassland: The grassland provided for in the Grassland Act, whose area is not more than 148,500㎡; and(c) Forest land: The forest land (including the forest reserve, the seed-gathering forest and the forest gene resource protection forest; hereafter in this item the same shall apply) whose management plan is authorized or which is designated as a special forest project zone and newly afforested for not less than five years pursuant to the Creation and Management of Forest Resources Act, as part of the preserved mountainous district under the Management of Mountainous Districts Act, whose area is not more than 297,000㎡: Provided, That in the case of a forest land afforested for not less than 20 years, its area shall be extended to not more than 990,000㎡, including the forest land which is afforested for not less than five years, whose area is not more than 297,000㎡;2. Farmland, etc. which is located outside of the residential area, commercial area and industrial area under Article 36 of the National Land Planning and Utilization Act; and3. Farmland, etc. which is located outside of the area prearranged for the housing site development under the Housing Site Development Promotion Act or the area designated as a development project zone pursuant to Presidential Decree.(2) In cases where the farmland, etc. for which the gift tax is reduced or exempted under paragraph (1) is transferred within 5 years from the date when such farmland, etc. has been given the tax reduction or exemption without any justifiable reasons as prescribed by Presidential Decree, such as the death of farming offspring, or the farming offspring discontinues to directly cultivate the relevant farmland, etc. without any justifiable reason as prescribed by Presidential Decree, such as a disease or school attendance, an amount equivalent to the gift tax on such farmland, etc. that is reduced or exempted shall be immediately collected.(3) In cases where the transfer income tax is reduced or exempted pursuant to paragraph (1), due to its transfer, its acquisition time shall be deemed the day on which the self-cultivating farmer has acquired the farmland, etc., and the expenses involved, the expenses required at the time of the acquisition of the farmland, etc. by the self-cultivating farmer, notwithstanding the provisions of the Income Tax Act.(4) In cases where the tax amount reduced or exempted pursuant to paragraph (1) is collected in accordance with paragraph (2), Article 66 (6) shall apply mutatis mutandis. <Amended by Act No. 9272, Dec. 26, 2008>(5) In the application of the provisions of Article 3 (3) of the Inheritance Tax and Gift Tax Act, the farmland, etc. on which the gift tax is reduced or exempted pursuant to paragraph (1) shall neither be deemed the donated property that is added to the inherited property, nor be included in the value of the donated property that is added to the taxable value of the inheritance tax in accordance with Article 13 (1) of the abovementioned Act.(6) The farmland, etc. on which the gift tax is reduced or exempted pursuant to paragraph (1) shall not be included in the value of the property donated by the self-cultivating farmer (including his spouse) and added up within ten years before the date of such donation pursuant to Article 47 (2) of the Inheritance Tax and Gift Tax Act.(7) A farming offspring who desires to be eligible for the reduction or exemption of the gift tax pursuant to paragraph (1) shall make an application for such reduction or exemption by the deadline for filing a return of the tax base of the gift tax, as prescribed by Presidential Decree. <Amended by Act No. 9272, Dec. 26, 2008>(8) In the application of the provisions of paragraphs (1) through (7), the methods of calculating the period of holding and the value of acquisition of the farmland, etc. on which the gift tax is reduced or exempted and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The corporation tax on incomes for each business year of a corporation falling under any of the following subparagraphs (hereafter in this Article referred to as the “taxation on the current net income”) shall, notwithstanding the provisions of Articles 13 and 55 of the Corporation Tax Act, be levied until the business year ending on or before December 31, 2012 by applying the tax rate of 9/100 to the total amount computed by adding the amount of donation (limited to donation related to its profit-making business) which has not been added to deductible expenses under Article 24 of the Corporation Tax Act and the amount of entertainment expenses (limited to expenses related to its profit-making business) which have not been added to deductible expenses under Article 25 of the same Act to the current net income on its closing financial statements of the concerned corporation (referring to the current net income before the deduction of corporation tax, etc.): Provided, That if the corporation concerned waives the application of taxation on the current net income as prescribed by Presidential Decree, the taxation on the current net income shall not be applied for each business year coming thereafter: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7311, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Credit unions established under the Credit Unions Act, and community credit cooperatives established under the Community Credit Cooperatives Act;2. Cooperatives and cooperative joint business corporations established and incorporated pursuant to the Agricultural Cooperatives Act;3. Deleted; <by Act No. 6045, Dec. 28, 1999>4. Fisheries cooperatives established under the Fisheries Cooperatives Act (including fishery village cooperatives);5. Cooperatives, business cooperatives, and the national federation of cooperatives established under the Small and Medium Enterprise Cooperatives Act;6. Forestry cooperatives established under the Forestry Cooperatives Act (including forestry village cooperatives);7. Tobacco producers cooperatives established under the Tobacco Producers Cooperatives Act; and8. Consumer cooperatives established under the Consumer Cooperatives Act.(2) The provisions of Articles 5 through 14, 22 through 25, 25-2 through 25-4, 26, 30, 31 (4) through (6), 32 (4), 33, 33-2, 63, 63-2, 63-3, 64, 66 through 68, 84, 94, 102, 104-14, and 104-15 shall not apply to the corporations under subparagraphs of paragraph (1) (excluding the corporations that have waived the application of the taxation on the current net income pursuant to the proviso to paragraph (1)). <Amended by Act No. 8827, Dec. 31, 2007>(3) Any corporation falling under each subparagraph of paragraph (1) (excluding those that have waived the application of taxation on the current net income under the proviso to paragraph (1)) may choose not to adopt double entry system for their bookkeeping.(4) In the application of paragraph (1), where a cooperative under subparagraph 4 of the same paragraph and a forestry cooperative under subparagraph 6 of the same paragraph are supported with funds (referring to any support provided in such a way as to repay funds after depositing such funds loaned by the mutual financing depositors protection fund without any interest under the Act on the Structural Improvement of Fisheries Cooperatives, in the National Federation of Fisheries Cooperatives, or under the Act on the Structural Improvement of Forestry Cooperatives, in the National Forestry Cooperatives Federation and being paid the interest on a regular basis) for the improvement of financial structure, not later than December 31, 2010, pursuant to Article 7 (1) 3 of the Structural Improvement of Fisheries Cooperatives Act and Article 7 (1) 3 of the Structural Improvement of Forestry Cooperatives and does the account of such funds by classification as prescribed by Ordinance of the Ministry of Strategy and Finance, the interest that accrues from the deposit of such funds needs not be deemed the income when calculating its current net income. In such cases, when the cooperative disburses the interest and adds the amount of such interest to the item of expenses (when disbursed for the acquisition of assets, referring to appropriation in the depreciation cost or the book value at the time of such disbursement), the amount of such interest shall not be deemed expenses. <Newly Inserted by Act No. 8146, Dec. 30, 2006; Act No. 8852, Feb. 29, 2008; Act No. 9272, Dec. 26, 2008>(5) Such matters as may be necessary concerning the calculation, etc. of the amounts of the donation and entertainment expenses of the association corporations, etc. under paragraph (1), which have not been included in deductible expenses, shall be determined by Presidential Decree. <Newly Inserted by Act No. 6297, Dec. 29, 2000>

(1) If a national has disbursed donations falling under any of the following subparagraphs on or before December 31, 2009 (on or before December 31, 2010 in case of donation under subparagraph 14), the amount paid as donations shall be allowed to be deducted from the global income amount for the relevant taxable year or to be included in deductible expenses within the limit of an amount computed by multiplying the income amount less the carryover deficits by 50/100 (100/100 in the case under subparagraph 14) in calculating the amount of income for the relevant taxable year. In such cases, the deductible amount shall be up to the amount computed by multiplying the global income amount less donations under Article 34 (2) of the Income Tax Act by 50/100 (100/100 in the case under subparagraph 1) when deducting the amount paid as donations from the global income amount, and the donations of subparagraph 1 shall be deemed the donations under Article 34 (2) of the Income Tax Act when calculating the limited amount of donations to be included in deductible expenses: <Amended by Act No. 5960, Mar. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6136, Jan. 12, 2000; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7220, Oct. 5, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9088, Jun. 5, 2008; Act No. 9272, Dec. 26, 2008>1. Donations that are disbursed to the Culture and Arts Promotion Fund under the Culture and Arts Promotion Act;2. Donations that are disbursed by corporations to the hospitals falling under each of the following items for the expenses of facilities, education and research of such hospitals:(a) The hospital that is operated by any private school under the Private School Act;(b) The national university-affiliated hospitals under the Act on the Establishment of National University-Affiliated Hospitals;(c) The Seoul National University Hospital under the Establishment of Seoul National University Hospital Act;(d) The Seoul National University Dental Hospital under the Establishment of Seoul National University Dental Hospital Act;(e) The hospital that is operated by the Korean National Red Cross under the Organization of the Korean National Red Cross Act;(f) The National Cancer Center under the National Cancer Center Act; and(g) The local medical center under the Act on the Establishment and Operation of Local Medical Centers;3. Donations that are disbursed by an enterprise to an intra-company labor welfare fund for improving the welfare of its employees under the Intra-Company Labor Welfare Fund Act;4. Donations that are disbursed to the Independence Memorial Hall established under the Independence Memorial Hall of Korea Act;5. Donations that are disbursed to the institutions falling under each of the following items:(a) Specific research institutions under the Support of Specific Research Institutions Act;(b) The Korea Institute of Industrial Technology and the Korea Institute of Oriental Medicine that are established pursuant to the Act on the Establishment, Operation and Fosterage of Government-Invested Research Institutions in the Fields of Science and Technology;(c) The specialized production technology research institutions that are established pursuant to the Industrial Technology Innovation Promotion Act;(d) The Korea Foundation for Advancement of Science and Creativity that is established pursuant to the Framework Act on Science and Technology;(e) The Support Headquarters for Special Research and Development District under the Special Act on the Support of the Daedeok Special Research and Development District, etc.;(f) The Korea Occupational Safety and Health Agency established pursuant to the Korea Occupational Safety and Health Agency Act; and(g) The Korea Agency for Digital Opportunity and Promotion established pursuant to the Act on the Narrowing of Digital Divide;6. Donations that are disbursed to a community chest established under the Community Chest of Korea Act (limited to donations that are disbursed by a corporation);7. Donations that are disbursed to such research institutes as determined by Presidential Decree from among the government-invested research institutes subject to the Act on the Establishment, Operation and Fosterage of Government-Invested Research Institutions (limited to the specific research institutes and research institutes attached thereto under the previous Support of Specific Research Institutes Act prior to the enforcement of the same Act under Act No. 5733, Act prior to the enforcement of the same Act under Act No. 5733, which belong to the government-invested research institutes);8. Donations that are disbursed to the Educational Broadcasting System established under the Korea Educational Broadcasting System Act;9. Donations that are disbursed to the Korea Foundation that is established pursuant to the Korea Foundation Act;10. Donations that are disbursed to nonprofit-making corporations which carry out projects to provide meals to undernourished children or to promote the welfare of poor families’ children, for the purposes of supporting such projects;11. An amount trusted in a trust that was created by a resident under a condition that the property trusted by the trustor shall be donated to a public corporation, etc. under Article 16 (1) of the Inheritance Tax and Gift Tax Act on the death of the trustor or the expiration of the agreed trust contract period and that meets the requirements prescribed by Presidential Decree, such as prohibition against terminating the trust contract after signing the contract or returning part of the principal;12. Donations that are disbursed to a national trust under the Act on the National Trust of Cultural Heritages and National Environment Assets;13. Donations that are disbursed to a museum or an art gallery under the Museum and Art Gallery Support Act for the materials of such museum or art gallery under Article 2 of the same Act;14. Donations disbursed to schools under Article 2 of the Higher Education Act as facility expenses, education expenses, scholarships or research funds; and15. Donations disbursed to the organizing committees under the following items:(a) The Organizing Committee for Expo 2012 Yeosu Korea established under the Special Act on Assistance to the Expo 2012 Yeosu Korea (hereinafter referred to as the “Organizing Committee for Expo 2012 Yeosu Korea”); and(b) The Organizing Committee for the 13th IAAF World Champions in Athletics-Daegu 2011 (hereinafter referred to as the “Organizing Committee for the 13th IAAF World Champions in Athletics-Daegu 2011”) and the Organizing Committee for the Asian Games-Incheon 2014 (hereinafter referred to as the “Organizing Committee for the Asian games-Incheon 2014”) established under the Assistance to the 13th IAAF World Championships in Athletics-Daegu 2011 and the Asian Games-Incheon 2014 Act.(2) and (3) Deleted. <by Act No. 8146, Dec. 30, 2006>(4) The amount of donations under paragraph (1) which has not been included in deductible expenses shall, under the conditions as prescribed by Presidential Decree, be carried over to a taxable year ending within one year (or three years in cases of donations under paragraph (1) 15) from the beginning date of the taxable year after the taxable year concerned and be included in deductible expenses. <Newly Inserted by Act No. 7003, Dec. 30, 2003; Act No. 7220, Oct. 5, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(5) In applying the provisions of paragraph (1), the provisions of Article 52 (6) and (10) of the Income Tax Act shall apply mutatis mutandis to the case where a resident deducts his donations from the amount of global income for the taxable year concerned: Provided, That if there is an amount that exceeds the maximum amount allowed for deduction from the global income under the latter part of paragraph (1) when the donations under paragraph (1) 15 are deducted from the amount of global income for the taxable year concerned, such an excess amount shall be carried over and deducted from the amount of global income over the taxable years that end within three years from the beginning of the taxable year immediately following the taxable year concerned, under the conditions as prescribed by Presidential Decree. <Newly Inserted by Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8827, Dec. 31, 2007>(6) In cases where a person who holds a right to a residual estate claims and receives the return of a trust property in accordance with Article 1115 of the Civil Act after the person who deducted donations under paragraph (1) 15 from his global income or included such donations in his deductible expenses is dead, the head of the tax office having jurisdiction over the domicile of the right holder of the residual estate shall additionally collect the amount calculated by the formula prescribed by Presidential Decree on the right holder of the residual estate. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(7) In applying the provisions of paragraph (1), such matters as may be necessary for the calculation, etc. of the amount of donations allowed to be deducted from incomes and to be added to deductible expenses shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7220, Oct. 5, 2004; Act No. 8146, Dec. 30, 2006>

(1) In cases where Article 29 of the Corporation Tax Act applies to a corporation falling under any of the following subparagraphs not later than the business year ending on or before December 31, 2009, notwithstanding paragraph (1) 4 of the same Article, the income derived from profit-making businesses of the relevant corporation (in cases under subparagraphs 4 and 5, only applicable to the relevant businesses and profit-making businesses being conducted for users in the relevant institutions) may be included in the deductible expenses as reserves for its business with a proper purpose: <Amended by Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8347, Apr. 11, 2007; Act No. 9272, Dec. 26, 2008>1. Educational foundations under the Private School Act, industry-academic cooperation foundations under the Promotion of Industrial Education and Industry-Academic Cooperation Act, and non-profit corporations under Article 32 of the Civil Act which operate lifelong educational facilities in the form of cyber-university under the Lifelong Education Act;2. Social welfare foundations under the Social Welfare Services Act;3. A corporation falling under any of the following items:(a) National university-affiliated hospitals under the Act on the Establishment of National University-affiliated Hospitals;(b) Seoul National University Hospital under the Establishment of Seoul National University Hospital Act;(c) Seoul National University Dental Hospital under the Establishment of Seoul National University Dental Hospital Act;(d) National Cancer Center under the National Cancer Center Act;(e) Local medical centers under the Act on the Establishment and Operation of Local Medical Centers; and(f) Hospital that is operated by the Korean National Red Cross pursuant to the Organization of the Korean National Red Cross Act;4. Foundations operating libraries registered under the Libraries Act;5. Foundations operating museums or art galleries registered under the Museum and Art Gallery Support Act;6. Foundations prescribed by Presidential Decree as cultural and arts organizations permitted or authorized by the Government; and7. Organizing committees for international events under the items of Article 73 (1) 15.(2) In applying the provisions of Article 29 of the Corporation Tax Act to a corporation falling under any of the following subparagraphs not later than the business year ending on or before December 31, 2011, an amount prescribed by Presidential Decree out of income derived from a profit-making business of the corporation concerned may be allowed to be included in its deductible expenses as reserves for business proper to its specific purpose: <Amended by Act No. 6045, Dec. 29, 1999; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. National Agricultural Cooperative Federation established under the Agricultural Cooperatives Act;2. National Federation of Fisheries Cooperatives established under the Fisheries Cooperatives Act; and3. National Forestry Cooperatives Federation established under the Forestry Cooperatives Act.(3) In cases where a non-profit corporation prescribed by Presidential Decree from among the corporations which manage and operate the Funds established under such Acts as set forth in the attached Table 2 of the State Finance Act derives an income from the transfer of the stocks of any stock-listed corporation under the Financial Investment Services and Capital Markets Act, which have been acquired through payments of the relevant Funds, not later than the business year ending on or before December 31, 2009, the entire amount of such income may, notwithstanding Article 29 (1) 4 of the Corporation Tax Act, be included in its deductible expenses as reserves for business with a proper purpose. <Newly Inserted by Act No. 6480, May 24, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8050, Oct. 4, 2006; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>

(1) With respect to political funds donated by a resident to a political party (including its supporters’ association under the Political Fund Act and the election commissions) under the same Act, one hundred thousand won or less shall be deducted, by 100/110 of the donated amount, from his income tax amount for the relevant taxable year wherein it has been disbursed, and the amount which is in excess of one hundred thousand won, if any, shall be either deducted from his income amount, or added to his deductible expenses within the scope of the income amount less the carryover deficits, in calculating his income amount. <Amended by Act No. 8146, Dec. 30, 2006>(2) The inheritance tax or the gift tax shall not be imposed on the political funds donated under paragraph (1). <Amended by Act No. 7322, Dec. 31, 2004>(3) With respect to any political fund other than the political funds referred to in paragraph (1), anyone who takes the donation of such political fund shall be deemed to have succeeded to such political fund or have been given such political fund, and the inheritance tax or the gift tax shall be levied on him, notwithstanding the provisions of subparagraph 4 of Article 12 and subparagraph 3 of Article 46 of the Inheritance Tax and Gift Tax Act and other tax-related Acts. <Newly Inserted by Act No. 7322, Dec. 31, 2004>[This Article Wholly Amended by Act No. 7191, Mar. 12, 2004]

Land, etc. for Public Work Projects)(1) A tax amount equivalent to 20/100 (the rate shall be 25/100 in cases where a portion of the transfer price of land, etc. is paid in the bonds prescribed by Presidential Decree, while it shall be 30/100 in cases where a special agreement is made to keep the bonds until the maturity in the manner prescribed by Presidential Decree) of the transfer income tax shall be allowed to be reduced with respect to an income falling under any of the following subparagraphs that is derived on or before December 31, 2009 from the transfer of the land, etc. which was acquired within two years retroactively from the date of a notice of authorization for the public work project (the date of transfer, if transfer is made before the date of a notice of authorization for the public work project) granted for the area for public work project wherein the land, etc. in question is located: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 6852, Dec. 30, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Income derived from the transfer to a person executing the public work project of such land, etc. as is necessary for the public work project to which the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor applies;2. Income derived from the transfer to a person executing the public work project under the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents of such land, etc. as located in the area for maintenance and improvement under the same Act (excluding such area for maintenance and improvement as unaccompanied by infrastructure for maintenance and improvement); and3. Income derived from the expropriation of land, etc. under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and other Acts.(2) In cases where a person executing the public work project concerned falls under any of the following subparagraphs, he shall pay an amount equivalent to the tax amount reduced or exempted under paragraph (1) as income tax or corporation tax at the time of his tax base return for the taxable year in which he is found in such a case: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6852, Dec. 30, 2002; Act No. 7003, Dec. 30, 2003>1. Where a person executing the public work project under paragraph (1) 1 fails to undertake the public works within three years from the date on which he obtained authorization, etc. for the implementation of the works; and2. Where a person executing public work project under paragraph (1) 2 fails to obtain authorization for the implementation of the works, or to complete such works, under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residentswithin the time limit prescribed by Presidential Decree.(3) If a person who had the tax amount equivalent to 30/100 of the transfer income tax reduced or exempted under special agreement signed by him under paragraph (1) to keep related bonds until the maturity breaches the special agreement, the amount equivalent to 5/100 of the transfer income tax out of the reduced or exempted tax amount shall be levied immediately. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) The provisions concerning an additional amount equivalent to the interest as referred to in Article 40 (2) shall apply mutatis mutandis to cases where the tax amount reduced or exempted under paragraph (1) 1 or 2 is paid under paragraph (2), and the provisions of Article 66 (6) shall be mutatis mutandis to cases where the tax amount reduced or exempted under paragraph (1) is levied under paragraph (3). <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(5) When the executor of the relevant public work project or maintenance and improvement project intends to be eligible for the reduction or exemption of tax amount under paragraph (1) 1 or 2, he shall apply for such reduction or exemption as prescribed by Presidential Decree. <Amended by Act No. 6852, Dec. 30, 2002; Act No. 7003, Dec. 30, 2003>(6) Any person who desires to be eligible for reduction or exemption under paragraph (1) 3 shall apply for such reduction or exemption as prescribed by Presidential Decree.(7) In the application of paragraphs (1) and (3), the terms and conditions of the special agreement to keep related bonds until the maturity, the methods of notifying a breach of such special agreement or a term or condition thereof to the National Tax Service, and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(8) In cases where paragraph (1) is appled, with respect to land, etc. inherited, the date when an ancestor acquired the relevant land, etc. shall be deemed the date of acquisition of the relevant land, etc. <Newly Inserted by Act No. 9272, Dec. 26, 2008>

(1) In cases where a resident who transferred a parcel of land acquired at least two years, counting retroactively, before the public notice date of approval on a public project under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (or before the date of transfer, if the parcel of land was transferred before the public notice date of approval on the project) due to the execution of the public project and to whom another parcel of land developed as a result of the execution of the public project is conveyed as part of the transfer price of the land (hereafter referred to as “compensation by substitute land” in this Article) under the proviso of Article 63 (1) of the same Act except subparagraphs, on or before December 31, 2009, the margin gained from such transfer may be entitled to the deferment of the transfer income tax as prescribed by Presidential Decree.(2) Paragraph (1) shall apply only to cases where the executor of the relevant public project notifies the National Tax Service of the details of the compensation by substitute land in the manner prescribed by Presidential Decree.(3) If any resident who has the taxation of transfer income tax deferred under paragraph (1) falls under any of the following subparagraphs, he shall pay the amount of the transfer income tax deferred and the interest added up thereto as prescribed by Presidential Decree:1. If the compensation agreed to be paid by substitute land is paid in cash or any other cause prescribed by Presidential Decree occurs; and2. If the ownership transfer registration of the land acquired through the compensation by substitute land does not show that the cause of the registration is the substitution of land.(4) Any person who desires to have the taxation under paragraph (1) deferred shall file an application as prescribed by Presidential Decree.(5) In applying the provisions of paragraphs (1) through (3), the requirements and method of compensation by substitute land, the grounds and method of the payment of the tax amount deferred, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) Any income derived from transfer of the relevant land, etc. in the areas of restricted development designated under Article 3 of the Act on Special Measures for Designation and Management of Areas of Restricted Development (hereafter referred to as the “areas of restricted development” in this Article) through claim for purchase of land under Article 17 of the same Act or purchase by consultation under Article 20 of the same Act not later than December 31, 2011 shall be reduced of and exempted from the amount of tax under the following subparagraphs: <Amended by Act No. 9512, Mar. 25, 2009>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 of claim for purchase or the date of purchase by consultation after he acquired the relevant land, etc. prior to the date of designation of the areas of restricted development: An amount of tax equivalent to 50/100 of the transfer income tax; and2. 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 of claim for purchase or the date of purchase by consultation after he acquired the relevant land, etc. 20 years prior to the date of claim for purchase or the date of purchase by consultation: An amount of tax equivalent to 30/100 of the transfer income tax.(2) Any income derived from transfer of the relevant land, etc., which is excluded from areas of restricted development, through purchase by consultation or expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and other Acts, not later than December 31, 2011 shall be reduced of or exempted from taxes falling under each of the following subparagraphs: Provided, That this shall be limited to cases where the approval on project is publicly notified in accordance with the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and other Acts within one year (five years when the relevant area is designated as areas prescribed by Presidential Decree prior to the cancellation of designation of areas of restricted development, such as designation of free economic zones under the Act on Designation and Management of Free Economic Zones) from the date of cancellation of the designation of areas of restricted development: <Newly Inserted by Act No. 9512, Mar. 25, 2009>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 public notice date of approval on project after he has acquired the relevant land, etc. prior to the date of designation of areas of restricted development: An amount of tax equivalent to 50/100 of the transfer income tax; and2. 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 public notice date of approval on project after he has acquired the relevant land, etc. 20 years before the public notice date of approval on project: An amount of tax equivalent to 30/100 of the transfer income tax.(3) When paragraphs (1) and (2) are applied, with respect to land, etc. inherited, the date when an ancestor acquired the relevant land, etc. shall be deemed the date of acquisition of the relevant land, etc. <Amended by Act No. 9512, Mar. 25, 2009>(4) When paragraphs (1) and (2) are applied, application for reduction and exemption, calculation of the period of residence, and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 9512, Mar. 25, 2009>[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) In cases where any national who runs business with his factory and facilities installed within the area subject to the planned development of the Multi-functional Administrative City under the Special Act on the Construction of a Multi-functional Administrative City in Yeongi-Gongju Area for Follow-up Measure of New Administrative Capital or an area subject to the development plan of an innovation city under the Special Act on the Construction and Support of Innovation Cities Following Relocation of Public Agencies (hereafter referred to as the “Multi-functional Administrative City, etc.” in this Article) transfers the site and buildings of such factory to any project operator under the same Act, on or before December 31, 2009, in order to relocate such factory to outside (hereafter referred to as a “rural area” in this Article) of the Multi-functional Administrative City, etc. prescribed by Presidential Decree, he may choose not to include an amount equivalent to the transfer margins accruing from such transfer in the gross income, or may be eligible for the deferment of the taxation, in the way falling under each of the following subparagraphs: <Amended by Act No. 8827, Dec. 31, 2007>1. Domestic corporation: The way that it shall not include the amount that is calculated as prescribed by Presidential Decree in the gross income when the amount of income of the relevant business year is calculated. In such cases, not less than the amount obtained by equally dividing the relevant amount shall be included in the gross income during the period of each of five business years from the business year whereto belongs the date on which five years lapse after the end of the business year to which the transfer date belongs; and2. Resident: The way that he shall be eligible for the deferment of the taxation as prescribed by Presidential Decree.(2) In cases where any national to whom paragraph (1) was applied fails to relocate his factory to a rural area or discontinues or shuts down his business within three years from the date on which his factory is transferred, as prescribed by Presidential Decree, he shall include the amount calculated as prescribed by Presidential Decree, in the gross income, when he calculates his income amount for the business year whereto belongs the date on which the relevant ground occurs, or shall pay the taxation-deferred tax amount as the transfer income tax. In such cases, with respect to the amount to be included in the gross income or paid as the transfer income tax, the latter part of Article 33 (3) shall apply mutatis mutandis.(3) In cases where a national who has been conducting a business with factory facilities in multi-functional administrative city, etc. moves to a rural area and starts business there, with respect to the income accruing from the previous business, an amount of tax equivalent to 50/100 of the income tax or corporation tax for the income accruing from the previous business in the taxable year to which the date when the first income accrued after the date of movement belongs (in cases where no income accrues from the relevant business until the taxable year to which the date when five years have passed from the date of movement belongs, the taxable year to which the date when five years have passed belongs) and until the taxable year which expires within three years from the commencement date of the following taxable year, shall be reduced and exempted. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(4) In the application of paragraphs (1) and (2), the submission of a specification of the transfer margins and other necessary matters shall be prescribed by Presidential Decree.(5) Any national who intends to be governed by paragraph (3) shall present an application for reduction of and exemption from a tax amount prescribed by Ordinance of the Ministry of Strategy and Finance together with a report of tax base of the relevant taxable year. <Newly Inserted by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where a domestic corporation invests the land located in an enterprise city development project zone in kind, not later than December 31, 2009, in the enterprise determined by Presidential Decree that takes exclusive charge of the enterprise city development project (hereafter in this Article referred to as the “enterprise that takes exclusive charge of the enterprise city development project”) pursuant to subparagraph 3 of Article 2 of the Special Act on the Development of Enterprise Cities, an amount equivalent to the transfer margin accruing from such investment of land in kind may be included in the deductible expenses, as prescribed by Presidential Decree, in calculating its amount of income for the relevant business year, and thereby may be subject to taxation deferment until the domestic corporation disposes of the stocks acquired by such investment in kind.(2) In cases where a domestic corporation which has been subject to a deferred levy of the corporation tax pursuant to paragraph (1) purchases the developed land in lots from the enterprise that takes exclusive charge of the enterprise city development project and pays the price of such purchase with the stocks acquired by the investment in kind, the corporation tax which has been subject to the taxation deferment shall not be levied notwithstanding the provisions of paragraph (1), and the imposition of the corporation tax may be again deferred, as prescribed by Presidential Decree, until the land purchased in lots is transferred.(3) In cases where a domestic corporation includes the amount equivalent to the transfer margin in the deductible expenses pursuant to paragraph (1) and thereafter the enterprise in exclusive charge of the enterprise city development project that has received the investment of land in kind discontinues or shuts down its business, it shall include the total amount of those which are not added to the gross income, in the gross income, when it calculates its income amount for the business year whereto belongs the date on which the relevant ground occurs.(4) In cases where a domestic corporation acquires stocks by investment in an enterprise exclusively responsible for the development of enterprise cities projects with subsidies from the Tourism Promotion and Development Fund under Article 5 (3) 4 of the Tourism Promotion and Development Fund Act not later than December 31, 2009, the relevant stocks may be deemed assets used for business under Article 36 (1) of the Corporation Tax Act and be included in the deductible expenses by applying the same Article mutatis mutandis. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(5) In applying the provisions of paragraphs (1) and (2), the calculation of transfer margin subject to an inclusion in deductible expenses, the methods of taxation deferment, the submission of a specification of investment in kind, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where a development project operator (limited to any foreign investment enterprise referred to in Article 2 (1) 6 of the Foreign Investment Promotion Act) under Article 9 (1) of the Special Act on Designation and Management of Free Economic Zones invests its land in kind in the domestic corporation determined by Presidential Decree, not later than December 31, 2009, an amount equivalent to the transfer margin accruing from such investment of land in kind may be included in the deductible expenses, under the conditions as prescribed by Presidential Decree, in calculating its income amount for the relevant business year, and thereby may be subject to taxation deferment until the development project operator disposes of the stocks acquired by such investment in kind.(2) In cases where a domestic corporation includes the amount equivalent to the transfer margin in the deductible expenses pursuant to paragraph (1) and thereafter the domestic enterprise that has received the investment of land in kind discontinues or shuts down its business, it shall include the total amount of those which are not added to the gross income, in the gross income, when it calculates its income amount for the business year whereto belongs the date on which the relevant ground occurs.(3) In applying the provisions of paragraph (1), the calculation of transfer margin subject to an inclusion in deductible expenses, the methods of taxation deferment, the submission of a specification of investment in kind, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where a person who operates the workplace nursery facilities the Infant Care Act (hereafter in this Article referred to as the “previous nursery facilities”) transfers the previous nursery facilities on or before December 31, 2009 and then acquires new workplace nursery facilities (hereafter referred to as the “new nursery facilities” in this Article) within one year from the date of such transfer, he may choose not to include an amount equivalent to the transfer margins accruing from the transfer of such previous nursery facilities in the gross income, or may be eligible for the deferment of the taxation, in the way falling under each of the following subparagraphs:1. Corporation: The way that it shall not include the amount that is calculated under the conditions as prescribed by Presidential Decree in the gross income when the income amount for the relevant business year is calculated. In this case, not less than the amount obtained by equally dividing the relevant amount shall be included in the gross income during the period of each of three business years from the business year whereto belongs the date on which three years lapse after the end of the business year to which the transfer date belongs; and2. Individual: The way that he shall be eligible for the deferment of the taxation as prescribed by Presidential Decree.(2) In cases where any person to whom paragraph (1) was applied fails to acquire new nursery facilities or shuts down his new nursery facilities within 3 years from the commencing date of operating the new nursery facilities, he shall include the amount that is calculated as prescribed by Presidential Decree, in the gross income, when he calculates his income amount for the business year whereto belongs the date on which the relevant ground occurs, or shall pay the deferred amount of tax as the transfer income tax. In such cases, with respect to the amount to be included in the gross income or paid as the transfer income tax, the latter part of Article 33 (3) shall apply mutatis mutandis.(3) In the application of paragraphs (1) and (2), the scope of nursery facilities, the submission of a specification of the transfer margins, an application for taxation deferment, and a specification of the inclusion of the equally divided amounts in the gross income, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) Any national accredited as a social enterprise on or before December 31, 2010 under subparagraph 1 of Article 2 of the Social Enterprise Promotion Act shall be entitled to abatement or exemption of tax amount equivalent to 40/100 (50/100 up to the part of the taxable period for which liability for tax payment is constituted on or before December 31, 2009) of the corporation tax or the income tax on the income generated from the relevant business for the taxable year in which the business generates the income for the first time (or the taxable year on which the fifth anniversary of the date of accreditation falls, if the business fails to generate any income until the taxable year on which the fifth anniversary of the date of accreditation falls) and for the taxable years that end within three years from the commencement date of the immediately following taxable year. <Amended by Act No. 9272, Dec. 26, 2008>(2) When paragraph (1) is applied, if authentication of a social enterprise has been revoked pursuant to Article 18 of the Social Enterprise Promotion Act because it falls under any of the following subparagraphs during the period of reduction of or exemption from the tax amount, the corporation tax or income tax shall not be reduced or exempted under paragraph (1) from the taxable year concerned: <Newly Inserted by Act No. 9272, Dec. 26, 2008>1. It has obtained authentication by deceit or other unjust means; and2. It has failed to meet the requirements for authentication under Article 8 of the Social Enterprise Promotion Act.(3) When any national who has been reduced of or exempted from the tax amount pursuant to paragraph (1) falls under paragraph (2) 1, he shall pay the tax amount reduced and exempted at the time of return of tax base of the taxable year when such a reason has arisen, with an additional amount calculated by applying the provision on the additional amount equivalent to interest from among Article 40 (2) as the corporation tax or income tax. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(4) Any person who intends to be governed by paragraph (1) shall file an application for reduction or exemption as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where the land and buildings of a factory that has been operated within the area subject to a plan for public works for two years or longer, counting retroactively, from the public notice date of approval on the public works are transferred to the executor of the public works on or before December 31, 2009 upon the execution of the public works pursuant to the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor in order to relocate the factory to the area prescribed by Presidential Decree, the amount equivalent to the margin gained from such transfer of the land and buildings of the factory may not be included in the gross income or the transfer income tax on such margin may be paid in installments in the way falling under each of the following subparagraphs:1. Domestic corporation: The was that it shall not include the amount calculated by the formula prescribed by Presidential Decree in the gross income when the income amount of the relevant business year is calculated. In such cases, not less than the amount obtained by equally dividing the relevant amount shall be included in the gross income during the period of three business years from the business year whereto belongs the date on which three years lapse after the end of the business year to which the transfer date belongs; and2. Resident: The way that the transfer income tax calculated by the formula prescribed by Presidential Decree shall not be deemed as the transfer income tax payable by the time limit for the final return of the tax base for the relevant year to which the transfer date belongs. In such cases, not less than the amount obtained by equally dividing the relevant amount shall be paid for the period of three years from the date on which three years lapse after the end of time limit for the final return of the tax base of transfer income tax for the relevant year to which the transfer date belongs.(2) If any national who benefited from the application of paragraph (1) does not relocate the factory as prescribed by Presidential Decree or closes down or dissolves the related business within three years from the transfer date of the factory, the amount calculated by the formula prescribed by Presidential Decree shall be included in the gross income at the time of calculating the income for the business year to which belongs the date such an event occurs or pay the tax amount allowed to pay installments as the transfer income tax. In such cases, the latter part of Article 33 (3) shall apply mutatis mutandis to the amount to be included in the gross income or the tax amount payable.(3) In applying paragraphs (1) and (2), the matters concerning the submission of the transfer margin statement and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) An amount of money equivalent to transfer marginal profit accruing from transfer of the site and buildings of a factory not later than December 31, 2011 by small and medium enterprises which have been conducting a business with factory facilities for more than ten years to move the relevant factory to the area other than the areas prescribed by Presidential Decree needs not be included in the gross income or the transfer income tax may be paid in installments by methods of the following subparagraphs:1. Domestic corporations: A method that does not include the amount calculated as prescribed by Presidential Decree in the gross income when calculating the amount of income of the relevant business year. In such cases, the relevant amount more than the equal amount in the period of two business years from the business year to which the date when two years have passed belongs after the date when the business year to which the date of transfer belongs expires; and2. Residents: A method that does not deem the transfer income tax calculated as prescribed by Presidential Decree to be the transfer income tax to be paid by the deadline of the final report of tax base of transfer income tax of the relevant year to which the date of transfer belongs. In such cases, the relevant tax amount more than the equal amount in the period of two years from the date when two years have passed after the date when the deadline of the final report of tax base of transfer income tax of the relevant year to which the date of transfer belongs expires.(2) In cases where any national who is governed by paragraph (1) has not relocated a factory as prescribed by Presidential Decree or has discontinued or dissolved the relevant business within three years from the transfer date of the relevant factory, when calculating the amount of income of the business year to which the date when the relevant reason has arisen belongs, the amount calculated as prescribed by Presidential Decree shall be included in the gross income or the tax amount to be paid in installments shall be paid as the transfer income tax. In such cases, the latter part of Article 33 (3) shall apply mutatis mutandis to the amount to be included in the gross income or the tax amount to be paid.(3) In cases where paragraphs (1) and (2) are applied, matters necessary for presentation of a detailed statement of transfer marginal profit or such shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) In cases where any resident has opened a new savings account as determined by Presidential Decree which is repaid in the form of an annuity after the expiry of the term of his savings deposit contract (hereinafter referred to as the “private annuity savings”) not later than December 31, 2000, an amount equivalent to 40/100 of the savings deposit amount for the year concerned shall be allowed to be deducted from his global income for the year concerned: Provided, That if the deduction amount exceeds 720,000 won, 720,000 won shall be deducted. <Amended by Act No. 6297, Dec. 29, 2000>(2) In cases where a person who has opened a private annuity savings account receives an annuity payment pursuant to the stipulations of savings contract, income tax shall not be imposed on such income derived from the savings, but in cases where the person terminates such savings contract prior to the expiry of the term of savings deposit contract (excluding a case where such deposits are transferred through an account transfer to a private annuity savings in another financial institution; hereafter in this Article, the same shall apply) or is paid in a form other than an annuity payment after the expiry of the term of savings deposit contract, income derived from such savings shall be treated as interest income referred to in Article 16 (1) 3 of the Income Tax Act and therefore income tax shall be imposed: Provided, That this shall not apply in cases where such contract is terminated or he is repaid in a manner other than the annuity payment due to his death, emigration, and other reasons as determined by Presidential Decree. <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000>(3) In cases where a person who was allowed an income deduction under paragraph (1) terminates such private annuity savings contract before the expiry of the term of such contract as determined by Presidential Decree, the financial institution handling such private annuity savings (hereinafter referred to as the “private annuity savings institution”) shall additionally collect, from the relevant savings amount, an amount equivalent to 4/100 of the amount of savings deposits up to that time (limited to the smaller of the two amounts, 72,000 won per annum and refund by termination of contract; hereinafter referred to as the “tax amount additionally collected for termination”), which shall be paid to the head of tax office having jurisdiction over withholding taxes not later than the 10th of the month after the month whereto belongs the date of termination of contract: Provided, That if the person who was allowed an income deduction proves that the tax amount of or from which a reduction or exemption was allowed by such income deduction falls short of the tax amount additionally collected due to the termination of contract, an amount equivalent to the tax amount of or from which the actual reduction or exemption was allowed shall be collected in addition. <Amended by Act No. 7003, Dec. 30, 2003>(4) In cases where a person who has opened an account for private annuity savings falls under any of the following subparagraphs, the provisions of the text of paragraph (3) shall not apply:1. Where he proves that he has not been subjected to the income deduction for the relevant private annuity savings; or2. Where the private annuity savings contract is terminated due to his death, emigration overseas and other reasons prescribed by Presidential Decree.(5) In cases where a private annuity savings institution fails to pay the tax amount collected additionally for termination of private annuity savings under paragraph (3) within the time limit, or pays it short of the payable tax amount, the said institution shall pay the amount equivalent to 10/100 of the unpaid or insufficient tax amount as additional tax in addition to the tax amount collected additionally for termination.(6) Deleted. <by Act No. 6538, Dec. 29, 2001>(7) Other necessary matters for the income deduction of, or non-taxation of income tax for, private annuity savings shall be prescribed by Presidential Decree.

(1) In cases where a resident has opened an account for savings as prescribed by Presidential Decree which is repaid in the form of an annuity after the expiry of such a savings contract (hereinafter referred to as the “annuity savings”), the smaller whichever between the savings deposit amount of the relevant year and 3 million won shall be deducted from his global income amount for the relevant year: Provided, That when the total amount of the savings deposit amount of the relevant year and the deposit amount provided for in the main sentence of Article 51-3 (1) 3 of the Income Tax Act exceeds 3 million won a year, the excess amount shall be deem nonexistent. <Amended by Act No. 7839, Dec. 31, 2005>(2) Incomes accruing from the annuity savings under paragraph (1) shall be considered to have accrued at the time when the account holder is actually paid such incomes.(3) In cases where a person holding an account for annuity savings receives an annuity payment pursuant to the details of savings contract, the income tax shall be imposed on the amount computed by the following formula by regarding it as the annuity income. In this case, anyamount paid additionally according to the operational performance of annuity savings shall be considered to be contained in the received amount of annuity: <Amended by Act No. 6762, Dec. 11, 2002>Annuity income = Received amount of annuity × [1 － (Cumulative total of saving deposits in excess of the amount of actual income deduction / Total paid or expected annuity amount as prescribed by Presidential Decree)].(4) In cases where a person holding an account for annuity savings terminates the savings deposit contract before the maturity, or he is paid in any form other than the annuity payment after its maturity, the income tax shall be imposed on the amount computed by the following formula, by treating it as miscellaneous incomes under Article 21 of the Income Tax Act: Provided, That if the contract is terminated before the maturity because of the death of the account holder or if the savings deposit is paid in any form other than annuity because of the death of the account holder after the maturity, the amount calculated by the following formula shall be regarded as the annuity income under paragraph (3) and thus the income tax shall be levied on the amount: <Amended by Act No. 6762, Dec. 11, 2002; Act No. 8827, Dec. 31, 2007>Miscellaneous incomes = Amount received upon termination or in a form other than annuity × [1 － (Cumulative total of savings deposits in excess of the amount of actual income deduction / Total paid or expected amount as prescribed by Presidential Decree)].(5) In cases where a person holding an account for annuity savings terminates the savings deposit contract within 5 years from the date of signing the savings deposit contract, the amount calculated by multiplying the cumulative total of his savings deposit every year (limited to a maximum of 3 million won) by 2/100 shall be imposed as an additional tax for termination: Provided, That this shall not apply to the case where such contract is terminated due to his death or such other reasons as prescribed by Presidential Decree. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7839, Dec. 31, 2005>(6) In cases where a person holding an account for annuity savings terminates the account before its maturity, or is repaid in a form other than the annuity payment after its maturity, the financial institution handling such annuity savings under paragraph (1) (hereinafter referred to as the “annuity savings institution”) shall additionally collect the income tax under paragraph (4) and the additional tax for termination under paragraph (5) from the relevant savings amount, and shall pay them to the head of tax office having jurisdiction over the tax withholding not later than the 10th of the month following that whereto belongs the date of such termination.(7) In cases where the tax amount payable under paragraph (6) is not paid within the time limit or is underpaid, the annuity savings institution shall pay an amount equivalent to 10/100 of such unpaid or underpaid tax amount in addition to the payable tax amount.(8) In cases where a holder of annuity savings account transfers his contract to an annuity savings in another financial institution through an account transfer, it shall not be deemed a contract termination.(9) The income tax under paragraph (4) and the additional tax for termination under paragraph (5) shall not exceed a refund that the person having an annuity savings account receives as a result of the termination of his savings contract. <Newly Inserted by Act No. 7003, Dec. 30, 2003>(10) Deleted. <Amended by Act No. 8146, Dec. 30, 2006>(11) Matters necessary for the deduction of, or non-taxation, etc. on, the incomes accruing from the annuity savings shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6297, Dec. 29, 2000]

(1) With respect to any mutual-aid installment which a resident has paid not later than December 31, 2010 after joining the mutual aid for small enterprises and small commercial and industrial businessmen under Article 115 of the Small and Medium Enterprise Cooperatives Act (hereafter referred to as the “mutual aid for small enterprises and small commercial and industrial businessmen” in this Article), as prescribed by Presidential Decree, the smaller of the mutual-aid installment paid for the relevant year and 3 million won shall be deducted from his global income amount for the relevant year.(2) Incomes accruing from the mutual aid for small enterprises and small commercial and industrial businessmen under paragraph (1) shall be considered to have accrued at the time when the person who has joined the mutual aid for small enterprises and small commercial and industrial businessmen is actually paid such incomes.(3) With respect to incomes accruing from the mutual aid for small enterprises and small commercial and industrial businessmen under paragraph (1), the income tax shall be imposed by regarding them as the interest income under Article 16 (1) of the Income Tax Act.(4) In cases where the mutual aid contract for small enterprises and small commercial and industrial businessmen is terminated before any cause prescribed by Presidential Decree, such as business closure, accrues, the income tax shall be imposed on the amount computed by the following formula, by treating it as miscellaneous incomes under Article 21 of the Income Tax Act: Provided, That where the contract is terminated due to any cause prescribed by Presidential Decree, such as emigration, the provisions of paragraph (3) shall apply:Miscellaneous incomes = Amount refunded upon termination － Cumulative total of the amounts paid in excess of the amount of actual income deduction.(5) In cases where the mutual aid contract for small enterprises and small commercial and industrial businessmen is terminated within five years from the date of joining the mutual aid, the Korea Federation of Small and Medium Business under the Small and Medium Enterprise Cooperatives Act (hereafter referred to as the “Korea Federation of Small and Medium Business” in this Article) shall additionally collect an additional tax for termination calculated by multiplying the amount paid each year (such amount shall not exceed three million won) by 2/100 and the income tax under paragraph (4) from the relevant amount of refund and pay them to the head of tax office having jurisdiction over the tax withholding, not later than the 10th of the month following that whereto belongs the date of such termination: Provided, That where the contract is terminated due to any such cause as prescribed by the Presidential Decree such as emigration, etc., the additional tax for termination shall not be imposed. <Amended by Act No. 8827, Dec. 31, 2007>(6) In cases where the tax amount payable under paragraph (5) is not paid within the time limit or is underpaid, the Korea Federation of Small and Medium Business shall pay an amount equivalent to 10/100 of such unpaid or underpaid tax amount in addition to the payable tax amount.(7) The income tax under paragraph (4) and the additional tax for termination under paragraph (5) shall not exceed a refund that the person who has joined the mutual aid for small enterprises and small commercial and industrial businessmen receives as a result of the termination of the mutual aid contract for small enterprises and small commercial and industrial businessmen.(8) Necessary matters regarding the methods, procedures, etc. for the deduction of incomes of the persons who have joined the mutual aid for small enterprises and small commercial and industrial businessmen shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8493, Jun. 1, 2007]

(1) An income tax shall not be imposed on interest income and dividend income derived from the savings account opened for the purchase of a housing unit (hereafter referred to as “long-term savings for housing purchase” in this Article) on or before December 31, 2009, if the account meets the following requirements: <Amended by Act No. 9272, Dec. 26, 2008>1. A person who can open the account as a resident of 18 years of age or older, shall fall under any of the following items at the time of opening such account:(a) A householder of a household (hereafter in this Article referred to as a "household") prescribed by Presidential Decree; and(b) A householder with only one house owned, the size of which shall be equivalent to or smaller than the size prescribed by Presidential Decree (hereafter referred to as a “house of national housing size” in this Article) and the standard market value of which under Article 99 (1) of the Income Tax Act (hereafter referred to as the “standard market price” in this Article) shall be 300 million won or less at the time of opening the account; and2. Such requirements as prescribed by Presidential Decree, including the limit on installment savings and the contract term, shall be satisfied.(2) In cases where a resident who has his earned income (excluding daily-paid workers) and falls under any of the following subparagraphs during the taxable year deposits in the long-term savings for housing purchase and other savings account specified by Presidential Decree (hereafter referred to as the “housing purchase savings” in this Article) for the relevant year, the amount equivalent to 40/100 of the installments deposited in such savings shall be deducted from the earned income for the relevant year:1. A householder with no house owned; and2. A householder with only one house owned, the size of which shall be the national housing size and the standard market value of which shall be 300 million won or less at the time of opening the account: Provided, That the same shall be applicable only in cases where the standard market price of the house is 300 million won or less at the time of acquiring a house if the householder acquires the house after opening the account.(3) If there is no price for individual housing or collective housing available under the Public Notice of Values and Appraisal of Real Estate Act, which is applicable to the house owned, the amount calculated by the method prescribed by Presidential Decree shall be deemed to be the standard market price in applying paragraphs (1) and (2): Provided, That in cases of paragraph (1), the tax base for the acquisition tax under Article 111 (1) and (2) of the Local Tax Act may be deemed to be the standard market price for the house in question.(4) If the aggregate of the amounts deducted in accordance with paragraph (2) above and Article 52 (2) of the Income Tax Act exceeds three million won in a year or if the aggregate of the amounts deducted in accordance with paragraph (2) above and Article 52 (2) and (3) of the Income Tax Act exceeds ten million won (15 million won when long-term house mortgage borrowing under Article 52 (3) of the Income Tax Act meets the requirements prescribed by Presidential Decree) in a year, such excess amount shall not be deducted from the earned income for the pertinent year. In such cases, it shall be determined as of the end of the pertinent taxable year whether or not the account holder is a householder. <Amended by Act No. 9272, Dec. 26, 2008>(5) If a person who signed a contract on the long-term savings for housing purchase withdraws the principal, interest, or such from the account or terminates the contract within seven years from the contract date of the savings account, the financial institution handling the savings account shall additionally collect the tax amount abated or exempted on the ground that the income tax is not levied on such interest income an dividends income: Provided, That the same shall not apply in cases where the savings contract is terminated because of the account holder’s death or emigration to a foreign country or any other ground prescribed by Presidential Decree.(6) If a worker who holds an account of long-term savings for housing purchase and has benefited from the deduction from his income under paragraph (2) terminates the account of long-term savings for housing purchase before the lapse of five years from the date of opening the saving account, the financial institution handling the savings account shall additionally collect the amount equivalent to 4/100 (or at the rate of 8/ 100, in cases where such savings account is terminated within one year from the date of opening the savings account) of the installment savings deposited until then (the amount shall not exceed 300,000 won per year, but the amount shall not exceed 600,000 won per year, if the savings account is terminated within one year from the date of opening the savings account; hereafter referred to as “additional tax amount collectible upon termination” in this Article) from the amount in the savings account, and shall pay such amount to the head of the tax office having jurisdiction over the withholding tax not later than the tenth day of the month immediately following the month to which the date the account is terminated belongs: Provided, That if the person who has benefited from the deduction from his income proves the fact that the tax amount abated or exempted by the income deduction does not reach the additional tax amount collectible upon termination, the tax amount actually abated or exempted shall be additionally collected.(7) Article 86 (4) and (5) shall apply mutatis mutandis to the additional tax amount collectible upon termination of the account of long-term savings for housing purchase. In this case, the term “private annuity savings” shall be construed as “long-term savings for housing purchase”.(8) The identification and management of the persons eligible for the long-term savings for housing purchase shall be made in accordance with the following subparagraphs:1. The Commissioner of the National Tax Service shall examine whether an account holder of the long-term savings for housing purchase meets the requirements under subparagraphs of paragraph (1) at the time when he opens the account and shall notify the financial institution handling the savings account of the result within the period of time prescribed by Presidential Decree; and2. The Commissioner of the National Tax Service shall examine whether an account holder of the long-term savings for housing purchase meets all the requirements under subparagraphs of paragraph (1) (excluding the requirement that the standard market price shall be 300 million won or less) as of the end of the taxable year on which the seventh anniversary of the contract date of the long-term savings for housing purchase falls and as of the end of every third taxable year after the afore-mentioned taxable year, and shall notify the financial institution handling the account of the result. In this case, the savings account shall be deemed as terminated as of the date on which the notice is delivered if the person does not fall under any subparagraph of paragraph (1) (excluding the requirement that the standard market price shall be 300 million won or less), but the provisions of paragraphs (5), (6), and (7) shall not apply.(9) The procedure for opening and termination of an account of the long-term savings for housing purchase, the procedure for income deduction, and other necessary matters shall be prescribed by the Presidential Decree.[This Article Wholly Amended by Act No. 8827, Dec. 31, 2007]

(1) In cases where any resident opens the saving account satisfying all the requirements under any of the following subparagraphs not later than December 31, 2002 (limited to opening an account in the financial institution handling the savings falling under any item of subparagraph 1; hereinafter referred to as the “high-yield high-risk trust savings”), the income tax shall not be imposed on his interest income or dividend income paid from the relevant saving accounts:1. It shall be the savings falling under each of the following items:(a) Securities investment savings account opened by the truster company under the Securities Investment Trust Business Act;(b) Trust savings account opened by the financial institutions licensed for a trust business under the Trust Business Act; or(c) Saving account for acquiring the stocks issued by the securities investment companies under the Securities Investment Company Act;2. It shall be the savings incorporating the securities, etc. prescribed by Presidential Decree, which are those under Article 46 (1) of the Income Tax Act, by the rate in excess of that as prescribed by Presidential Decree; and3. Principal of the savings per head shall be less than 30 million won.(2) The contract period of the high-yield high-risk trust savings shall be for one year or more but for 3 years or less, and the provisions of paragraph (1) shall not apply to the incomes accruing after the elapse of 3 years from the date of concluding the savings contract.(3) In cases where the person who has opened the high-yield high-risk trust savings terminates or withdraws the savings account or transfers its right within one year from the date of concluding the savings contract, the withholding agent shall withhold the tax amount at source which is calculated by applying the tax rate under Article 129 of the Income Tax Act: Provided, That this shall not apply to the case of death, emigration overseas or an unavoidable reason prescribed by Presidential Decree of the account opener.(4) Deleted. <by Act No. 6538, Dec. 29, 2001>(5) Matters necessary for the methods of opening the high-yield high-risk trust savings and others for the non-taxation of income tax, etc. shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6501, Aug. 14, 2001]

(1) In case where a resident has paid a deposit after opening the saving account satisfying each requirement under any of the following subparagraphs not later than March 31, 2002 (limited to an opening an account in a financial institution handling the savings falling under any item of subparagraph 1; and hereinafter referred to as the “long-term securities savings”), the amount corresponding to 5/100 for the deposited amount for the relevant taxable year, and to 7/100 for the deposited amount for the immediately preceding year, shall be deducted from the computed tax amount from global income for the relevant taxable year:1. It shall be the savings corresponding to any of the following items:(a) Securities savings under Article 50 of the Securities and Exchange Act;(b) Securities investment trust savings established by a truster company under the Securities Investment Trust Business Act;(c) Trust savings established by a financial institution licensed for a trust business under the Trust Business Act; and(d) Savings for acquiring the stocks issued by a securities investment company under the Securities Investment Company Act;2. It shall be the savings retaining not less than 70/100 of the stocks corresponding to any of the following items (excluding the stocks of securities investment companies):(a) Stocks listed on the securities market under the Securities and Exchange Act; and(b) Stocks registered as the object of trade on the Association brokerage market under the Securities and Exchange Act;3. It shall be the savings of deferment forms whose principal per head is not more than 50 million won when the savings falling under any item of subparagraph 1 are added thereto; and4. The savings shall be maintained for not less than 1 year from the payment date of deposits (2 years, where the tax deduction is granted over 2 taxable years).(2) The income tax shall not be levied on the interest income or dividend income accrued from the long-term securities savings: Provided, That this shall not apply to the interest income or dividend income accrued after an elapse of 2 years from the payment date of deposits (3 years, where the savings are maintained for not less than 2 years).(3) The tax deduction and non-taxation on the long-term securities savings shall be applied by savings account.(4) The trade turnover ratio of the long-term securities savings shall be within 4 times of that as prescribed by Presidential Decree.(5) The ratio of stock retaining under paragraph (1) 2 shall refer to the ratio of the entire stock assessment value (based on the closing price on every day) against the assessment value of payment amount of deposits or that of the gross amount of savings opened, whose average for each year is not less than 70/100, and the ratio under the same subparagraph shall be deemed to have been met, in case where the assessment value of the payment amount of deposits falls short of the payment amount of deposits, or that of the gross amount of savings opened falls short of the gross amount of savings opened due to a low quote of stocks for 2 months from the payment date of deposits or from the date ofopening the savings, and under the status of not less than 70/100 of the stock retaining ratio.(6) Where the person who has opened the long-term securities savings terminates the savings (including the case where he withdraws the deposits or transfers the right thereof; hereafter in this paragraph, the same shall apply) before the period under paragraph (1) 4 arrives from the payment date of deposits, or where he retains the stocks falling short of the ratio under paragraph (1) 2, or where he exceeds the trade turn-over ratio under paragraph (4), the withholding agent shall collect the tax amount falling under any of the following subparagraphs, and pay it to the head of tax office in charge of withholding taxes not later than the date of terminating the savings contract or the 10th of the month next to that whereto belongs the expiration date of the period under paragraph (1) 4 (hereafter in this paragraph, referred to as the “terminating date, etc.”): Provided, That this shall not be applicable in the cases where the savings opener dies or emigrates overseas and under other inevitable causes as prescribed by Presidential Decree, or where the savings have been maintained not less than 1 year, to the portion subjected to the tax deduction and non-taxation for 1 year from the payment date of deposits:1. Tax amount calculated by applying the tax rate under Article 129 of the Income Tax Act; and2. The amount equivalent to 5/100 of the paid amount of deposits for the year immediately preceding that whereto belongs the terminating date, etc., and to 7/100 of the paid amount of deposits of the year preceding the year immediately preceding that whereto belongs the terminating date, etc.: Provided, That where it is attested that the deducted tax amount falls short of 5/100 or 7/100, such deducted amount shall be the limit.(7) The person opening the long-term securities savings who intends to be subjected to the tax deduction under paragraph (1) shall obtain certificates of payment of long-term securities savings necessary for being subject to tax deduction from the institutions handling such savings, and submit them to the withholding agent or the head of the tax office having jurisdiction over the place of residence at the time of year-end settlement of earned income taxes or filing of a final return on tax base for global income.(8) Where such institution handling the savings fails to pay the tax amount under paragraph (6) within the deadline, or pays it in short of payable tax amount, the relevant institution handling the savings shall pay the tax amount to the head of the tax office in charge of tax withholding together with the additional amount equivalent to 10/100 of the unpaid or insufficient tax amount.(9) Matters necessary for the non-taxation and tax deduction, etc. on the long-term securities savings shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6519, Nov. 21, 2001]

(1) Deleted. <by Act No. 7839, Dec. 31, 2005>(2) Notwithstanding Article 129 of the Income tax Act, the tax rate of 5/100 shall be applied to the dividends that are paid by any ship investment company under the provisions of Article 13 of the Ship Investment Company Act (hereinafter referred to as a “ship investment company”) to a resident on or before December 31, 2010 with respect to the stocks in his possession by ship investment company with par values not exceeding 300 million won. In such cases, the dividend income of the stocks possessed (in cases where the par value exceeds 300 million won, such exceeding stocks possessed shall be included) shall not be included in global income in calculating global income tax base under Article 14 (2) of the Income Tax Act. <Amended by Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>(3) In cases where stock certificates of a ship investment company have been deposited in an investment trader or an investment broker, if a ship investment company intends to pay the dividend income, it shall, immediately after the resolution of dividend, notify an investment trader or an investment broker of a detailed statement of the income subject to separate taxation under paragraph (2) classified by stockholder, investment trader or investment broker directly or through the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as the “Korea Securities Depository”), and the investment trader or investment broker notified shall withhold according to the details notified. <Amended by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) If the stocks of a ship investment company are not deposited in an investment trader or an investment broker, the ship investment company shall divide the dividends to each stockholder into the income subject to the separate taxation under the former part of paragraph (2) and the income subject to the separate taxation to which the tax rate under Article 129 of the Income Tax Act applies directly or through its stock transfer agency to collect the withholding tax accordingly. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(5) In cases where the withholding agent under paragraphs (3) and (4) pays the dividends of the ship investment company concerned directly, he shall submit to the head of the tax office having jurisdiction over the withholding tax a detailed statement of the separate taxation of the ship investment company as prescribed by Ordinance of the Ministry of Strategy and Finance no later than the end of the month immediately following the end of the quarter on which the payment date of the dividends falls. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 8852, Feb. 29, 2008; Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) In cases where any worker who earns the annual gross income (excluding non-taxable income) not exceeding 30 million won opens, not later than December 31, 2002, a savings account prescribed by Presidential Decree (hereafter referred to as the “worker-preferred savings” in this Article) in terms of saving for three years or longer within the limit of 1.5 million won by quarter, no income tax shall be imposed on the interest income or dividend income accruing from the relevant savings. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>(2) In cases where any person holding an account for worker-preferred savings terminates his worker-preferred savings contract within 3 years from the date of concluding a savings contract, the income tax shall be imposed on the interest income or dividend income paid due to such termination to the relevant person holding such an account: Provided, That this shall not apply to the cases where such termination is made due to his death, emigration overseas, or other inevitable causes prescribed by Presidential Decree.(3) Deleted. <by Act No. 6538, Dec. 29, 2001>(4) Matters necessary for the conclusion of a worker-preferred savings contract and non-taxation of the income tax shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 6045, Dec. 28, 1999>

(1) In cases where any resident falling under any of the following subparagraphs subscribes to the savings amounting to not more than 30 million won per capita (hereafter referred to as “livelihood savings” in this Article), not later than December 31, 2011, which are prescribed by Presidential Decree, the income tax shall not be levied on interest income or the dividend income accruing from the relevant savings: <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 8367, Apr. 11, 2007; Act No. 9272, Dec. 26, 2008>1. Any aged man of 60 years of age or over who is a resident;2. Any disabled person who is registered in accordance with Article 32 of the Welfare of Disabled Persons Act;3. Any person who has rendered a distinguished service to independence and is registered under Article 6 of the Act on the Honorable Treatment of Persons of Distinguished Services to Independence, his bereaved family or his family;4. Any wounded person who is registered in accordance with Article 6 of the Act of the Honorable Treatment and Support of Persons, etc. of Distinguished Services to the State;5. Any recipient under subparagraph 2 of Article 2 of the National Basic Living Security Act;6. Any patient who suffers from aftereffects of defoliants under subparagraph 3 of Article 2 of the Act on Assistance, etc. to Patients Suffering from Actual or Potential Aftereffects of Defoliants; and7. Any wounded person of the 5․18 Democratization Movement under subparagraph 2 of Article 4 of the Act on the Honorable Treatment of Persons of Distinguished Services to the 5․18 Democratization Movement.(2) Deleted. <by Act No. 6538, Dec. 29, 2001>(3) Matters necessary for the conclusion of a livelihood savings contract and non-taxation of the income tax, etc. shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6273, Oct. 21, 2000]

(1) In cases where the members of an employee stock ownership association under the Framework Act on Worker’s Welfare (hereinafter referred to as the “members of an employee stock ownership association”) make contributions to the employee stock ownership association under the same Act (hereinafter referred to as the “employee stock ownership association”) in order to acquire the treasury stocks of their own company, the contributions for the year concerned and four million won, whichever is smaller, shall be allowed to be deducted from the amounts of their earned income for the year concerned. <Amended by Act No. 7003, Dec. 30, 2003>(2) The income tax shall not be imposed on income derived from the funds of the employee stock ownership association under Article 35 of the Framework Act on Worker’s Welfare or from the treasury stocks retained by the employee stock ownership association.(3) In cases where the members of an employee stock ownership association have received through the employee stock ownership association their shares of treasury stocks which were acquired with a contribution of the relevant corporation pursuant to Article 33 of the Framework Act on Worker’s Welfare or through a purchase of stocks at the securities market or such under the Financial Investment Services and Capital Markets Act, the income tax shall not be imposed. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(4) Notwithstanding the provisions of paragraph (3), in cases where the treasury stocks alloted by the employee stock ownership association to its members are contributed by the corporation concerned or acquired with a contribution by such corporation, the income tax shall be imposed on the portion of their stocks exceeding the limits set by Presidential Decree. In such cases, when the treasury stocks alloted pursuant to Article 33 of the Framework Act on Worker’s Welfare are collected by the employee stock ownership association from its members and thereby there is an amount to be deducted from their earned income for the taxable period which has already passed, the members concerned may deduct the amount from their earned income at the time of the year-end settlement of their earned income for the taxable period whereto belongs the date of such collection. <Newly Inserted by Act No. 8146, Dec. 30, 2006>(5) In cases where the member of an employee stock ownership association withdraws his shares of treasury stocks allotted by the employee stock ownership association, an amount calculated under Presidential Decree (hereafter in this Article referred to as the “withdrawn amount”) with respect to the withdrawn treasury stocks less the treasury stocks falling under the following subparagraphs (hereafter in this Article referred to as the “withdrawn stocks that are taxable”) shall be construed as the earned income under Article 20 of the Income Tax Act and thereby the income tax shall be imposed on such amount. In such cases, the date on which such treasury stocks are withdrawn shall be treated as the time of the earning of such income, and the corporation concerned shall withhold as a tax an amount computed by applying the tax rate under Article 55 (1) of the Income Tax Act to the withdrawn amount: <Amended by Act No. 8146, Dec. 30, 2006>1. Treasury stocks acquired with a contribution that was not deducted from any income under paragraph (1);2. Treasury stocks falling under the former part of paragraph (4); and3. Treasury stocks given gratuitously to the members of the employee stock ownership association through the incorporation of surplus into capital.(6) In cases where the member of an employee stock ownership association withdraws any amount from the withdrawn stocks that are taxable, the income tax shall not be levied on the amount falling under any of the following subparagraphs according to the period during which the treasury stocks are held. In such cases, the period of holding the treasury stocks shall be the period from the day following the last day of the period during which the stocks are to be compulsorily deposited in the employee stock ownership association member’s account opened with a securities finance company under the Financial Investment Services and Capital Markets Act (hereafter in this Article referred to as the “securities finance company”) to the date of withdrawal: <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. An amount equivalent to 50/100 of the withdrawn amount in cases where the withdrawn stocks that are taxable are held for the period ranging from not less than 2 years to less than 4 years; and2. An amount equivalent to 75/100 of the withdrawn amount in cases where the withdrawn stocks that are taxable are held for not less than 4 years.(7) In cases where the member of an employee stock ownership association withdraws a contribution without spending it on the purchase of treasury stocks, such amount (excluding a contribution which was not deducted from any income under paragraph (1)) shall be included in the withdrawn amount in accordance with paragraph (5). <Amended by Act No. 8146, Dec. 30, 2006>(8) In cases where the member of an employee stock ownership association acquires treasury stocks with a contribution exceeding the amount of deducted income under paragraph (1) from the corporation concerned at a lower price than the one determined by Presidential Decree, the difference between the acquired price and the one determined by Presidential Decree shall be construed as earned income accruing at the time of the receipt of his share of treasury stocks through the employee stock ownership association, and thereby the income tax shall be imposed on such difference. <Newly Inserted by Act No. 6762, Dec. 11, 2002>(9) With respect to any dividend income that is deposited in a securities finance company by the members of an employee stock ownership association after acquiring such dividend income through the employee stock ownership association, no income tax shall be levied on the dividend income if the requirements falling under any of the following subparagraphs are met: Provided, That in cases where the dividend income is withdrawn within one year from the deposit date, such dividend income that is paid before the deposit date shall be deemed the relevant dividend income that is paid on the date of deposit, and the income tax shall be levied thereon: <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>1. It is required to be confirmed by a stock depository certificate issued by a securities finance company that the treasury stocks held by the members of an employee stock ownership association are deposited in such securities finance company as of the base date on which the dividend is paid;2. It is required that the members of an employee stock ownership association be minority stockholders under Article 20 (3) of the Income Tax Act; and3. It is required that the total amount of the face value of the treasury shares that are held by each of the members of the employee stock ownership association be not more than 18 million won (30 million won on or before December 31, 2008).(10) With respect to the dividend income accruing from the treasury stocks that are held by workers who acquire equities in accordance with Articles 21-2, 107 (2), 112 (2), 112-10 (2) and 147 of the Agricultural Cooperatives Act, no income tax shall be levied thereon if the requirements falling under each of the following subparagraphs are met: Provided, That in case where the treasury shares are not held for not less than one year from the date on which they are acquired, the dividend income that is paid before the relevant grounds occur shall be deemed the relevant dividend income that is paid on the date on which the relevant grounds occur, and the income tax shall be levied thereon: <Amended by Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>1. It is required that the workers be minority shareholders provided for in Article 20 (3) of the Income Tax Act; and2. It is required that the total amount of face value of the treasury shares that are held by each worker be not more than 18 million won (30 million won on or before December 31, 2008).(11) The withholding agent shall furnish a detailed statement of non-taxation on the dividend income paid to the members of an employee stock ownership association and the workers pursuant to paragraphs (9) and (10) to the head of tax office having jurisdiction over withholding taxes, under the conditions as prescribed by Presidential Decree. <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>(12) Such matters as may be necessary concerning income deduction for a contribution of the members of the employee stock ownership association, non-taxation on dividend, taxation on the withdrawn treasury stocks, calculation of the period for which treasury stocks have been held, keeping records of treasury stocks, etc. shall be determined by Presidential Decree.(13) A donation made to an employee stock ownership association (excluding donations made by the members of an employee stock ownership association) shall be allowed either to be deducted from the amount of global income for the taxable year concerned (within the limits of an amount computed by multiplying 30/100 by the amount of global income less the donations under Article 34 (2) of the Income Tax Act, and the donations under Article 73, successively) or to be included in deductible expenses within the limits of an amount computed by multiplying 30/ 100 by the amount of income less a carryover deficit in calculating income for the taxable year concerned. <Newly Inserted by Act No. 7003, Dec. 30, 2003>(14) In the event that the member of an employee stock ownership association withdraws his holding treasury stocks on the ground of his retirement and transfers them to the employee stock ownership association, if the following requirements are met, the provisions of Article 94 (1) 3 of the Income Tax Act shall not apply thereto. In such cases, when the transfer margins exceed 30 million won, the same shall not apply to such excess amount: <Newly Inserted by Act No. 7216, Jul. 26, 2004>1. It is required that the member of the employee stock ownership association hold the treasury stocks, which he has acquired through the employee stock ownership association, for not less than one year;2. It is required that the member of the employee stock ownership association have deposited the treasury stocks, which he holds, for not less than one year in a securities finance company as of the date of their transfer; and3. It is required that the total amount of the face value of the treasury stocks, which are held by the members of the employee stock ownership association, be not more than 18 million won.[This Article Wholly Amended by Act No. 6538, Dec. 29, 2001]

No income tax shall be imposed on dividends (limited to those paid not later than December 31, 2012) derived from an equity capital not exceeding ten million won for each person and determined by Presidential Decree in a financial institution which has farmers, fishermen, and other residents having mutual ties as its partners, members, etc. as well as on dividends (limited to those paid not later than December 31, 2012) the partners, members, etc. receive from the financial institution concerned in proportion to their records of taking services from the financial institution. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>[This Article Wholly Amended by Act No. 7003, Dec. 30, 2003]

(1) In cases where a resident having an earned income has paid a deposit amount not later than December 31, 2001 by opening a savings account with the maximum savings principal of 30 million won or less per head (limited to one account per head; hereinafter referred to as the “employee stock savings”) which falls under any of the following subparagraphs, the amount equivalent to 5/100 of a deposit amount to the employeestock savings paid in the relevant fiscal year shall be deducted from his calculated global income tax for the relevant taxable year (to the utmost limit of his calculated global income tax on relevant earned income):1. Securities investment savings under Article 50 of the Securities and Exchange Act;2. Securities investment trust savings established by any truster company under the Securities Investment Trust Business Act;3. Savings for acquiring stocks issued by the securities investment companies under the Securities Investment Company Act; or4. Trust savings accounts established by financial institutions that are licensed for the trust business under the Trust Business Act.(2) No income tax shall be imposed on the interest and dividend incomes accruing from the employee stock savings.(3) Savings period of the employee stock savings shall be from not less than one year (referring to one year from the date on which the last installment is deposited in the case of installment savings forms; hereafter in this Article the same shall apply) to not more than three years, and the provisions of paragraph (2) shall not apply to the income accruing after the lapse of three years from the date of contracting the savings account.(4) The average of daily stock holding ratio of the employee stock savings shall be higher than those under the following subparagraphs. In this case, the stock holding ratio shall be the amount arrived by dividing the evaluated value of stocks held (referring to the amount evaluated on the basis of the closing prices; hereafter in this paragraph the same shall apply) by the total evaluated value of the relevant savings, and in case where any losses are incurred on the deposited or invested principal, it may be considered to hold the stocks corresponding to the ratio falling under any of the following subparagraphs:1. 30/100 in case of savings under paragraph (1) 1; or2. 50/100 in case of savings under paragraph (1) 2 through 4.(5) Where the whole or part of the principal, interest, dividend, or stocks are withdrawn from the employee stock savings account, the relevantsavings account shall be considered to have been terminated: Provided, That in case of paragraph (1) 2 and 3, if the account is transferred to another account of securities investment trust or to stocks of another securities investment company that are sold by the identical selling company, it shall not be considered to have been terminated.(6) Where any person fails to satisfy the requirements subject to paragraph (4) at the employee stock savings account within 1 year from the relevant savings deposit date (referring to the date of establishing the account, in cases of paragraph (1) 2 through 4; hereinafter the same shall apply), or where a holder of an employee stock savings account terminates his account within the period of less than 1 year from the date of paying the relevant deposit amount, the financial institution handling the employee stock savings account (hereinafter referred to as the “savings institution”) shall additionally collect the amount obtained by multiplying the amount paid during the preceding year by 5/100 (if it is evidenced that the tax amount deducted in the preceding year falls below 5/100 of the savings amount paid in the preceding year, the tax amount deducted in the preceding year) and the amount obtained by multiplying the interest income and dividend income paid within one year by the rate as stipulated in Article 129 (1) 1 (c) of the Income Tax Act (hereafter in this Article referred to as the “tax amount additionally collected for termination”), and pay them to the head of tax office having jurisdictionover withholding taxes, not later than the 10th of the month next to that whereto belongs the date on which 1 year elapses from the date of paying deposit amount, or the date of terminating such savings account: Provided, That this shall not apply to the cases where the account is terminated by an inevitable cause as prescribed by Presidential Decree, such as the death or overseas emigration of the account holder.(7) Deleted. <by Act No. 6538, Dec. 29, 2001>(8) Any employee who intends to be subjected to the tax amount deduction under paragraph (1) shall obtain the employee stock savings deposit certificate indicating the savings deposit amount for the relevant fiscal year, that is required for tax deduction, from the savings institution, and submit it to the withholding agent or the head of the tax office having jurisdiction over his domicile, at the time of filing the year-end settlement of his earned income or the final return of his global income tax base.(9) Any savings institution shall, where it has collected the tax amount additionally collected for termination under paragraph (6), notify in writing the account holder of its details.(10) Where any savings institution fails to pay the tax amount additionally collected for termination under paragraph (6) within the time limit, or underpays the payable tax amount, the relevant savings institution shall pay an additional tax amount corresponding to 10/100 of the unpaid or insufficient tax amount to the head of the tax office having jurisdiction over withholding taxes.(11) The provisions of paragraphs (1) through (10) shall apply to the case where a holder of an employee stock savings account intends to deposit additionally for one year or more the amount elapsing one year or more from the date of deposit, which is paid during the preceding year, by treating the same as the employee stock savings which are newly deposited in the relevant fiscal year. In such cases, the account holder shall furnish the savings institution with an application for extension of savings account period as prescribed by Ordinance of the Ministry of Strategy and Finance. <Amended by Act No. 8852, Feb. 29, 2008>(12) Matters necessary for the tax deduction, non-taxation of income tax, etc. for the employee stock savings shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6297, Dec. 29, 2000]

(1) Where a resident opens a savings account, not later than December 31, 2011, which satisfies all the requirements falling under the following subparagraphs (hereinafter referred to as the “tax-favored comprehensive savings”), the tax rate of withholding tax which applies to the interest or dividend income accruing from the relevant savings shall be 95/1,000 (9/100 for the part accrued not later than December 31, 2009), notwithstanding Article 129 of the Income Tax Act, and the interest or dividend income accruing from such savings shall not be included in global income in calculating the tax base for global income notwithstanding the provisions of Article 14 of the Income Tax Act, and shall be exempted from the resident tax under the Local Tax Act: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. It is required that an account holder apply for tax credit when he opens an account of installment savings or deferred savings (including collective investment securities savings, mutual aid, insurance, savings in securities and savings in bonds as prescribed by Presidential Decree) handled by a financial institution falling under any of the items of subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Guarantee of Secrecy (hereafter referred to as a “financial institution” in this Article);2. It is required that the contract term be not less than one year; and3. It is required that the total sum of contracted amount of the tax-favored comprehensive savings opened at all financial institutions should not exceed an amount falling under any of the following items: Provided, That the interest and dividend, etc. accruing from the tax-favored comprehensive savings that are added to the principal shall be deemed the tax-favored comprehensive savings, but they shall not be added to the calculation of the limit per capita of the total contracted amount:(a) A person who is aged 20 years or more: Ten million won per capita; and(b) A person who falls under any subparagraph of Article 88-2 (1): 30 million won per capita.(2) through (6) Deleted. <by Act No. 6538, Dec. 29, 2001>(7) Where an account holder terminates or withdraws his tax-favored comprehensive savings, or transfers the right thereof, within 1 year from its contract date, the relevant withholding agent shall withhold as a tax the difference between the tax amount withheld at source by applying the main sentence of paragraph (1) and the tax amount calculated under Article 129 of the Income Tax Act: Provided, That this shall not apply to the cases where there exists any unavoidable ground prescribed by Presidential Decree, including an account holder’s death or emigration overseas.(8) The method of calculating the total sum of the tax-favored comprehensive savings contracts, the method of their operation and management and other necessary matters shall be prescribed by Presidential Decree.[This Article Wholly Amended by Act No. 6045, Dec. 28, 1999]

(1) The financial institutions, etc. handling such savings as falling under any of the following subparagraphs (hereafter referred to as a “tax-favored savings handling institution” in this Article) shall immediately notify such an agency as determined by Presidential Decree (hereinafter referred to as the “tax-favored savings data concentration center”) of the name and resident registration number of each depositor; conclusion, termination, and transfer of rights pertaining to savings contract; and other matters concerning contract modifications by types of savings (hereinafter referred to as the “tax-favored savings data”) by means of electrical communications media, such as computers: <Amended by Act No. 6867, May 10, 2003; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>1. Private annuity savings, annuity savings, long-term savings for housing purchase, high-yield high-risk trust savings, long-term securities savings, worker-preferred savings, livelihood savings, capital investment, employee stock savings, taxfavored comprehensive savings, deposits in cooperatives, etc., long-term stock savings and long-term corporate debenture savings under Articles 86, 86-2, 87, 87-2, 87-3, 88, 88-2, 88-5, 88-6, 89, 89-3, 91-9 and 91-10;2. Deleted; and <by Act No. 7003, Dec. 30, 2003>3. Savings to create a sizable sum of money for farming and fishing households under the Act on Lump Sum-Raising Savings of Farming and Fishing Households.(2) A tax-favored savings handling institution shall notify the tax-favored savings data concentration center not later than the 20th day of the month after the end of each quarter of year of the number of depositors, the number of accounts, and the amount of deposits by types of savings.(3) The Commissioner of the National Tax Service may demand an inquiry about or perusal of depositors’ tax-favored savings data, or demand the submission of such data, from the tax-favored savings data concentration center.(4) A tax-favored savings handling institution may ask the tax-favored savings data concentration center for the total of contract amounts for the tax-favored savings accounts opened by a depositor to other tax-favored savings handling institutions (including the beneficiaries in the case of trust, and the insured and beneficiaries in the case of insurance; hereafter the same shall apply in this Article) and may, upon receipt of a written request or consent of a depositor, inquire about the details of the total of contract amounts and inform the depositor thereabout. <Amended by Act No. 8827, Dec. 31, 2007>(5) The tax-favored savings data concentration center shall immediately deal with or process the tax-favored savings data notified by the tax-favored savings handling institutions, and build an information network on the contract amounts of tax-favored savings and details thereof by types of savings and by depositors; and thus shall comply with any request or inquiry under paragraph (3) or (4). <Amended by Act No. 8827, Dec. 31, 2007>(6) The tax-favored savings data concentration center shall preserve the tax-favored savings data for three years after the year in which individual tax-favored savings contracts have been terminated; and persons engaged in either the tax-favored savings handling institutions or the tax-favored savings data concentration center (hereafter referred to as the “persons engaged in financial institutions, etc.” in this Article) shall not be allowed to provide or divulge to another person any information or data related to the tax-favored savings of depositors (hereafter in this Article referred to as the “data, etc.”) without a written request or consent of the depositor concerned; and likewise nobody shall request the persons engaged in financial institutions, etc. to provide the data, etc.: Provided, That such cases under paragraph (3) of this Article and each subparagraph of Article 4 (1) of the Act on Real Name Financial Transactions and Guarantee of Secrecy shall be excluded therefrom.[This Article Wholly Amended by Act No. 6538, Dec. 29, 2001]

(1) With respect to such deposits as prescribed by Presidential Decree (limited to a deposit not exceeding 30 million won for each person; hereinafter referred to as the “deposits in the cooperative, etc.”) in a financial institution which has farmers, fishermen, and other residents having mutual ties as its partners, members, etc., which are made by residents who are aged 20 years or more at the time of deposit, no income tax shall be imposed on an interest income derived from such deposits in the cooperative, etc. for the period ranging from January 1, 2007 to December 31, 2012; the tax rate of 5/100 shall, notwithstanding Article 129 of the Income Tax Act, apply to an interest income derived from such deposits in the cooperative, etc. for the period ranging from January 1, 2013 to December 31, 2013; and such income shall neither be included in the calculation of the global income tax base pursuant to Article 14 (2) of the Income Tax Act nor be subject to the resident tax under the Local Tax Act: Provided, That for persons prescribed by Presidential Decree, notwithstanding Article 129 of the Income Tax Act, the tax rate of 14/1,000 shall apply to the income accruing from January 1, 2010 to December 31, 2012, and the tax rate of 6/100 shall apply to the income accruing from January 1, 2013 to December 31, 2013. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(2) With respect to an interest income derived from deposits in the cooperative, etc. on or after January 1, 2014, the tax rate of 9/100 (95/1,000 for persons prescribed by Presidential Decree) shall apply, notwithstanding the provisions of Article 129 of the Income Tax Act, and such income shall neither be included in the calculation of the global income tax base pursuant to Article 14 (2) of the same Act nor be subject to the resident tax under the Local Tax Act. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(3) Deleted. <by Act No. 6538, Dec. 29, 2001>[This Article Newly Inserted by Act No. 6297, Dec. 29, 2000]

(1) In cases where anyone who is liable to furnish the tax-favored data and notify the tax-favored savings data in accordance with the provisions of Articles 87-5 (5), 88-4 (11), 89-2 (1), 91 (7), 91-4 (4), 91-6 (4), and 91-8 (2) fails to furnish the relevant tax-favored data and to notify the relevant tax-favored savings data within the period fixed under each relevant Article (in the case of Article 89-2 (1), the fixed period means 15 days from the date on which the grounds of notification occur) or the furnished tax-favored data or the notified tax-favored savings data fall under the grounds of ambiguity that are prescribed by Presidential Decree, 2,000 won per contracted or terminated case of such failure and such ambiguity shall be added to the payable tax. <Amended by Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007>(2) In applying the provisions of paragraph (1), the tax amount equivalent to 50/100 of additional tax shall be mitigated in cases where such data are submitted or notified by the end of the month following the month whereto belongs the closing date of the period for submission of the tax-favored data or notification of the tax-favored savings data. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7322, Dec. 31, 2004>[This Article Newly Inserted by Act No. 6045, Dec. 28, 1999]

(1) In cases where a resident has held stocks (excluding stocks of a corporation falling under any of the subparagraphs of Article 51-2 (1) of the Corporation Tax Act; hereafter in this Article referred to as the “listed stocks”) of a stock-listed corporation under the Financial Investment Services and Capital Markets Act (hereafter in this Article referred to as a “listed stock corporation”) for three years or over since such stocks were listed in the stock market and receives the dividend income not later than December 31, 2010 from the relevant corporation for stocks he has held for three years or over, no income tax shall be imposed on the dividend income which a resident falling under subparagraph 1 receives from the relevant corporation, and the withholding tax rate shall be 5/100 for the dividend income which a resident falling under subparagraph 2 receives from the relevant corporation notwithstanding Article 129 of the Income Tax Act, and the relevant dividend income shall not be added up to the tax base of global income under Article 14 (2) of the Income Tax Act: Provided, That this shall not apply in cases where a resident holding stocks of a corporation falls under a dominant stockholder prescribed by Presidential Decree of the relevant corporation or its specially interested person: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Any resident who holds listed stocks not more than 30 million won by each corporation on the basis of the total amount of par values (including stocks he has held under three years); and2. Any resident who holds listed stocks more than 30 million won but not more than one hundred million won by each corporation on the basis of the total amount of par values (including stocks he has held under three years).(2) Deleted. <by Act No. 7003, Dec. 30, 2003>(3) The stock-holding period under paragraph (1) shall range from the date on which an entry is made in the investors’account book pursuant to Article 310 of the Financial Investment Services and Capital Markets Act to the basic date of dividend of the relevant corporation: Provided, That in such a case as falling under any of the following subparagraphs, it shall range from the date as provided in each subparagraph to the basic date of dividend of the relevant corporation: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Where reserves are incorporated into capital or dividends are paid in the form of stocks under the Commercial Act: the date on which he becomes a holder of new stocks under the Commercial Act;2. Where stocks are replaced due to the merger or division of the corporation, the consolidation or split of stocks or the all-inclusive swap or transfer of stocks: the date on which an entry of old stocks is made in the customers’ account book;3. Where stocks are inherited: the date on which an entry of the inheritor is made in the customers’ account book; and4. Where stocks of the relevant corporation acquired through its employee stock ownership association under the Framework Act on Worker’s Welfare are withdrawn from the securities finance company and are entrusted with an investment trader or an investment broker (they shall be calculated by the individual member of the association): the date on which he acquires such stocks.(4) In cases where there exist any changes in the number of the retained stocks of the same kinds during the period of holding stocks, it shall be deemed that the stocks acquired later were transferred first and thereby the provisions of paragraphs (1) and (3) shall be applied. <Amended by Act No. 7003, Dec. 30, 2003>(5) In cases where a listed stock corporation pays dividends accruing from stocks, it shall divide the stockholders as of the basic date of the relevant dividends into those who own stocks whose total par value is not more than 30 million won as a group of stockholders eligible for non-taxation and those who own stocks those total par value is more than 30 million won but not more than 100 million won as a group of stockholders subject to a separate taxation and thereby notify the Korea Securities Depository of their names and resident registration numbers, respectively and the Korea Securities Depository shall, in turn, notify an investment trader or an investment broker which has deposited the certificates of such stocks of their names and resident registration numbers by the relevant corporation. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(6) An investment trader or an investment broker shall apply the provisions of paragraphs (1), (3), and (4) only to those who have been notified under paragraph (5). <Amended by Act No. 7003, Dec. 30, 2003; Act No. 9272, Dec. 26, 2008>(7) An investment trader or an investment broker shall, as prescribed by Presidential Decree, submit a detailed statement of non-taxation and that of separate taxation on dividend income accruing from the long-held stocks to the head of the tax office having jurisdiction over withholding taxes. <Amended by Act No. 9272, Dec. 26, 2008>[This Article Wholly Amended by Act No. 6480, May 24, 2001]

(1) Notwithstanding Article 17 (1) of the Income Tax Act, the amount of dividend income that is paid to a resident by any investment company, any private equity fund and any specific purpose company (hereafter referred to as an “investment company” in this Article) under the Indirect Investment Asset Management Business Act shall not include any amount paid by the investment company concerned from gains derived from trading or evaluation of securities falling under any of the following subparagraphs or from trading in futures contracts on the securities under subparagraphs 1 and 2 which belong to those futures contracts under the Futures Trading Act: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7577, Jul. 13, 2005; Act No. 8493, Jun. 1, 2007>1. Securities listed on the securities market under the Securities and Exchange Act (excluding bonds, etc. under Article 46 (1) of the Income Tax Act; hereafter the same shall apply in this paragraph);2. Securities registered as items for trading in the KOSDAQ market under the Securities and Exchange Act;3. Stocks and equities issued by a venture business; and4. Deleted. <by Act No. 7577, Jul. 13, 2005>(2) Notwithstanding Article 17 (1) of the Income Tax Act, the amount of dividend income received by a resident from a collective investment scheme (limited to an organization that meets the requirements under Article 17 (1) 5 of the Income Tax Act; hereafter referred to as a “collective investment scheme”) and an investment purpose company (hereafter in this Article referred to as a “collective investment scheme, etc.”) shall not include the profit and loss generated, not later than December 31, 2009, by transaction or appraisal of stocks issued and transacted overseas (limited to those listed in a foreign market similar to the securities market under the Financial Investment Services and Capital Markets Act) as stocks acquired by the relevant collective investment scheme, etc., through its direct investment or investment of collective investment securities only under Article 9 (21) of the Financial Investment Services and Capital Markets Act. In such cases, the special case concerning the deduction of the tax amount paid abroad pursuant to Article 57-2 of the Corporation Tax Act shall not apply. <Newly Inserted by Act No. 8493, Jun. 1, 2007; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(3) The amount of dividend paid with gains not included in the amount of dividend income pursuant to paragraphs (1) and (2) (hereinafter referred to as the “marginal profits from the transfer of securities”) shall be calculated by multiplying the total amount of dividend an investment company pays to its shareholders by a ratio of the cumulative total of marginal profits from the transfer of securities of the investment company concerned to the cumulative total of the gross profits as of the basic date of dividend payment (referring to the date of dissolution in the case of the dissolution of an investment company and referring to the date of repurchase in the case of the repurchase of stocks; hereafter the same shall apply in this Article). <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8493, Jun. 1, 2007>(4) Where the cumulative total of profits other than marginal profits from the transfer of securities exceeds the cumulative total of gross profits as of the date of dissolution or repurchase in cases where an investment company dissolves or repurchases its stocks, the amount of dividend income shall, without regard to the actual amount paid by the investment company concerned, be the amount calculated by multiplying the profits other than marginal profits from the transfer of securities by a ratio of the stocks or equities owned by stockholders concerned (referring to the repurchased stocks or equities, in the case of repurchase) to the total sum of stocks or equities of such investment company. <Amended by Act No. 7003, Dec. 30, 2003>(5) Any investment company shall open the accounts by separating marginal profits from the transfer of securities from profits other than marginal profits from the transfer of securities. In this case, the common expenses shall be subtracted from the profit other than the marginal profit from the transfer of securities in the relevant business year. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004>(6) Any investment company shall open the accounts by separating the cumulative total of its marginal profits from the transfer of securities from the cumulative total of the profits other than marginal profits from the transfer of securities at each time of the year-end book-closing and of the payment of dividends. In such case, the provisions of latter part of paragraph (5) shall apply mutatis mutandis with respect to the allocation of various taxes and public imposts, such as the corporation tax, etc. in calculating the respective cumulative total. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8493, Jun. 1, 2007>(7) In cases where the investment company settles the accounts and divides profits among its shareholders, or where the open-type investment company pays the price for the repurchase of treasury stocks to its shareholders (including the repurchase of its equity stocks made by a closed-type investment company on shareholders’ request for their repurchase in an effort to be converted into an open-type investment company; hereafter in this Article the same shall apply), an amount left by subtracting the initial issuing value of its stocks (if the book-closing was made on or before the closing basic date or repurchase date after the issuance of the stocks concerned, referring to the initial issuing value after the last closing basic date) from the issuing value of its stocks on the closing basic date or on the repurchase date shall be treated as dividend under Article 17 (1) of the Income Tax Act and thereby the provisions of paragraphs (1) through (6) shall apply. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8493, Jun. 1, 2007>(8) In cases where a collective investment scheme repurchases its collective investment stocks, transfer of collective investment stocks by an investor to the relevant collective investment scheme shall not be deemed to be transfer under the Income Tax Act and the Securities Transaction Tax Act. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 9272, Dec. 26, 2008>(9) In the application of paragraphs (1) and (2), necessary matters shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 8493, Jun. 1, 2007>[This Article Newly Inserted by Act No. 5996, Aug. 31, 1999]

(1) With regard to the dividend income received by the residents possessing the stocks of a social fundamental facilities investment and lending company under the Act on Private Participation in Infrastructure (hereinafter referred to as an “investment and lending company”) on or before December 31, 2010, it shall not be added up in the calculation of global income tax base under Article 14 (2) of the Income Tax Act. In such cases, with regard to the dividend income of possessed stocks whose aggregate amount of face values of the relevant stocks possessed is not more than 100 million won by investment and lending companies, the withholding tax rate shall be 6/100 (5/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) notwithstanding the provisions of Article 129 of the Income Tax Act, and when the aggregate amount of face values of the relevant stocks possessed exceeds 300 million won by investment and lending companies, the withholding tax rate under Article 129 (1) 2 of the Income Tax Act shall apply to the dividend income from the possessed stocks portions of such excesses. <Amended by Act No. 9272, Dec. 26, 2008>(2) If an investment and lending company the stocks of which are deposited in an investment trader or an investment broker intends to distribute its dividend income, it shall, after it adopts a resolution on distribution of dividends, notify the statement of income subject to separate taxation under paragraph (1), as prepared for each stockholder and each securities company, to an investment trader or an investment broker with which stockholders entrust to sell or purchase stocks, directly or through the Korea Securities Depository, and the investment trader or investment broker securities notified shall, upon receiving such notice, collect the withholding tax accordingly. <Amended by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(3) If the stocks of an investment and lending company are not deposited in an investment trader or an investment broker, the investment and lending company shall separate the income subject to the separate taxation from the dividends to each stockholder, and shall collect the withholding tax, directly or through its stock transfer agency. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) When the withholding agent under paragraphs (2) and (3) pays the dividend income of the investment and lending company concerned directly, he shall submit to the head of the tax office having jurisdiction over the withholding tax the statement of separate taxation on the dividend income of the investment and lending company as prescribed by Ordinance of the Ministry of Strategy and Finance not later than the end of the month immediately following the end of the quarter on which the payment date of the dividend income falls. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 8852, Feb. 29, 2008>[This Article Newly Inserted by Act No. 7577, Jul. 13, 2005]

(1) The rate of the tax withheld at source of any interest income and any dividend income that are paid to any resident by the fund or the company falling under any of the following subparagraphs on or before December 31, 2008, which operates the public construction and rental housing under the Rental Housing Act after investing his investment property therein in a ratio not lower than the certain ratio set by the Presidential Decree shall be 14/100, notwithstanding the provisions of Article 129 of the Income Tax Act, and the relevant interest income and dividend income shall not be added up to the tax base of the global income provided for in the provisions of Article 14 (2) of the Income Tax Act:1. The real estate indirect investment fund provided for in the provisions of subparagraph 3 of Article 27 of the Indirect Investment Asset Management Business Act (hereafter referred to as the “real estate indirect investment fund” in this Article); and2. The real estate investment company consigned to manage the real estate provided for in the provisions of subparagraph 1 (b) of Article 2 of the Real Estate Investment Company Act (hereafter referred to as the “real estate investment company consigned to manage the real estate” in this Article).(2) Ways to levy taxes on the interest income and the dividend income that are paid by the real estate indirect investment fund and the real estate investment company consigned to manage the real estate and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7839, Dec. 31, 2005]

(1) With regard to the dividend income received by the residents possessing the stocks of an overseas resources development investment company and a specialized overseas resources development investment company under Article 13 of the Overseas Resources Development Business Act (hereinafter referred to as an “overseas resources development investment company, etc.”) from the overseas resources development investment company, etc., on or before December 31, 2011, it shall not be added up in the calculation of global income tax base under Article 14 (2) of the Income Tax Act. In this case, with regard to the dividend income of the possessed stocks whose aggregate amount of face values is not more than 300 million won by overseas resources development investment company, etc., the income tax shall neither be levied until December 31, 2008, nor shall the provisions of Article 51-2 (2) of the Corporation Tax Act apply, and the withholding tax rate shall be 5/100 from January 1, 2009 to December 31, 2011.(2) If an overseas resources development investment company, etc. whose stocks are deposited in an investment trader or an investment broker intends to distribute its dividend income, it shall, after it adopts a resolution on distribution of dividend income, notify the statement of non-taxable income and income subject to separate taxation under paragraph (1), as prepared for each stockholder and each securities company, to each securities company to which stockholders commission to sell or purchase the stocks, directly or through the Korea Securities Depository, and an investment trader or an investment broker shall, upon receiving such notice, carry out the process of non-taxation or collect the withholding tax accordingly. <Amended by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(3) If the stocks of an overseas resources development investment company, etc. are not deposited in an investment trader or an investment broker, the overseas resources development investment company, etc. shall divide the dividend income to each stockholder into the non-taxable income and the income subject to separate taxation, and shall collect the withholding tax, directly or through its stock transfer agency. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) When the withholding agent under paragraphs (2) and (3) pays the dividend income of an overseas resources development investment company, etc. directly, he shall submit to the head of the tax office having jurisdiction over the withholding tax, a statement of non-taxable income and income subject to separate taxation on the dividend income of the overseas resources development investment company, etc. as prescribed by Ordinance of the Ministry of Strategy and Finance no later than the end of the month immediately following the end of the quarter on which the payment date of the dividend income falls. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 8852, Feb. 29, 2008>[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where a resident opens an account, not later than December 31, 2009, in the investment trust, etc. as determined by Presidential Decree into which the bonds, etc. prescribed by Presidential Decree are incorporated in a ratio not lower than the certain ratio (hereinafter referred to as the “high-yield, high-risk investment trust, etc.”), with regard to the interest income or dividend income paid by the investment trust, etc. in which the investment amount per capita is not more than 100 million won, the tax rate of 5/100 shall apply, notwithstanding the provisions of Article 129 of the Income Tax Act, and it shall not be added up in the calculation of global income tax base under Article 14 (2) of the Income Tax Act. <Amended by Act No. 8827, Dec. 31, 2007>(2) In cases where a non-resident who has no domestic business place under Article 120 of the Income Tax Act or a foreign corporation which has no domestic business place under Article 94 of the Corporation Tax Act, as prescribed by Presidential Decree, opens an account, not later than December 31, 2009, in the high-yield, high-risk investment trust, etc., with regard to the dividend income paid by the investment trust, etc., the tax rate of 5/100 shall apply, notwithstanding the provisions of Article 156 of the Income Tax Act and Article 98 of the Corporation Tax Act: Provided, That with respect to an amount equivalent to the ratio of a foreign corporation’s stocks or equities held by the national (excluding the person who has acquired permanent residentship, or a stay permit which can be substituted for permanent residentship, of a foreign country in which he resides) or corporation of the Republic of Korea (hereafter referred to as the “national, etc. of the Republic of Korea” in this paragraph), as prescribed by Presidential Decree, the provisions of Article 156 of the Income Tax Act and Article 98 of the Corporation Tax Act shall apply.(3) The contract period of the high-yield high-risk investment trust, etc. shall be for one year or more but for three years or less, and the provisions of paragraphs (1) and (2) shall not apply to the income accruing after the elapse of 3 years from the date of concluding the contract.(4) In cases where the person who has subscribed to the high-yield high-risk investment trust, etc. cancels or redeems the high-yield high-risk investment trust, etc. or transfers his right to such trust, etc. within one year from the date of concluding the contract, the withholding agent shall withhold at source the tax amount which is calculated by applying the tax rate under Articles 129 and 156 of the Income Tax Act and Article 98 of the Corporation Tax Act: Provided, That this shall not apply to the case of death, emigration overseas or an unavoidable reason prescribed by Presidential Decree of a person who has subscribed to the trust, etc.(5) The methods of subscribing to the high-yield high-risk investment trust, etc., the methods of calculating the holding ratio and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The income tax shall not be levied until December 31, 2010 on the amount calculated by the formula prescribed by Presidential Decree out of the donations under subparagraph 2 made from the dividend income distributed to a resident by a collective investment scheme (hereinafter referred to as a "collective investment scheme for public donation") that satisfies all the following requirements. In such cases, global income deduction or inclusion of necessary expenses under Articles 73 and 88-4 (13) of this Act and Articles 34 and 52 (6) of the Income Tax Act shall not apply: <Amended by Act No. 9272, Dec. 26, 2008>1. It shall be a collective investment scheme under the Financial Investment Services and Capital Markets Act; and2. It shall contribute all or part of its profit as the donations under Article 73 (1) of this Act or Article 34 (1) and (2) of the Income Tax Act.(2) The withholding agent responsible for the dividend income derived from a collective investment scheme for public donation under paragraph (1) shall submit to the head of the tax office having jurisdiction over the withholding tax, a statement of non-taxable dividend income from the investment trust for public donation as prescribed by Ordinance of the Ministry of Strategy and Finance not later than the end of the month immediately following the end of the quarter in which the dividend income is distributed. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a resident has paid savings after opening a savings deposit (hereinafter referred to as a “long-term stock-type savings”) which satisfy all the requirements of the following subparagraphs not later than December 31, 2009, an amount calculated by multiplying an amount paid in the relevant taxable year by deductible rates of the subparagraphs of paragraph (2) shall be deducted from the total amount of income of the relevant taxable year (limited to the total amount of income of the relevant taxable year):1. It shall be savings for acquisition of stocks or beneficiary certificates of an investment company or an investment trust under the Financial Investment Services and Capital Markets Act (excluding special account of an insurance company under Article 251 of the same Act) investing not less than 60/100 of the total assets in stocks which are issued and traded in Korea (limited to stocks listed in the securities market under Financial Investment Services and Capital Markets Act);2. The term of contract of a savings deposit shall be not less than three years, and its principal, interest, dividend, stocks or profit-making securities shall not be withdrawn within three years from the opening date of the savings deposit account; and3. It shall be an installment savings deposit which shall be paid within three million won by quarter per capita (referring to the total amount of long-term stock-type savings deposits in all the financial institutions). In such cases, installments after the relevant quarter shall not be paid in advance or installments before the relevant quarter shall not be paid afterward.(2) Rates of income deduction of long-term stock-type savings shall be as the following subparagraphs:1. An amount paid up to 12 months including the month to which the opening date of a saving deposit account belongs (excluding an amount paid before the opening date of the account): 20/100;2. An amount paid from 13th month to 24th month: 10/100; and3. An amount paid from 25th month to 36th month: 5/100.(3) The income tax shall not be imposed on the interest income and dividend income accruing from an amount paid after the opening of a long-term stock-type savings deposit account: Provided, That this shall not apply in cases where the income accrues after three years have passed from the opening date of a savings deposit account.(4) In cases where a resident has opened several accounts of long-term stock-type savings deposit, the total amount paid in all the accounts shall not exceed the amounts under the following subparagraphs:1. An amount paid up to 12 months including the month to which the opening date of a savings deposit account belongs (excluding an amount paid before the opening date of the account): 12 million won;2. An amount paid from 13th month to 24th month: 12 million won; and3. An amount paid from 25th month to 36th month: 12 million won.(5) In cases where the whole or part of principal, interest, dividend, stocks or profit-making securities or such has been withdrawn, it shall be deemed that the relevant contract has been terminated.(6) In cases where any person who has opened a long-term stock-type savings deposit account terminates a contract within the period of three years from the opening date of the relevant savings deposit account, a financial institution dealing in long-term stock-type savings (hereafter in this Article referred to as an “institution dealing in savings”) shall additionally collect the total amount obtained by adding up amounts under the following subparagraphs (hereafter referred to in this Article as an “additional collection tax amount by termination”) and pay it to the head of a tax office controlling withholding not later than 10th of the following month of the month to which the termination date of a savings contract belongs: Provided, that this shall not apply in cases where it has been terminated by any unavoidable reasons prescribed by Presidential Decree, such as death, emigration overseas or such:1. A tax amount reduced and exempted because the income tax has not been imposed on the interest income and dividend income; and2. The total amount obtained by adding up amounts under the following items on the basis of the termination date of a savings contract: Provided, That in cases where any person who has received deduction from his income proves that the amount reduced and exempted by the relevant income deduction is less than the amount in the main sentence, an amount equivalent to the tax amount actually reduced and exempted shall be additionally collected:(a) An amount having multiplied an amount paid falling under paragraph (2) 1 by 5/100;(b) An amount having multiplied an amount paid falling under paragraph (2) 2 by 24/1,000; and(c) An amount having multiplied an amount paid falling under paragraph (2) 3 by 12/1,000.(7) Any resident who intends to receive deduction from his income pursuant to paragraph (1) shall, when he makes a year-end settlement of an amount of earned income tax, etc. or a final report on tax base of the total income, present a certificate of payment of long-term stock-type savings issued by an institution dealing in the savings, the amount of savings paid in the relevant year specified therein necessary for receiving deduction from the income, to a person responsible for withholding or the head of a tax office having jurisdiction over a place of domicile.(8) In cases where an institution dealing in the savings has collected an additional collection tax amount by termination pursuant to paragraph (6), it shall notify a person who has opened such a savings deposit account of its details in writing.(9) In cases where an institution dealing in the savings has failed to pay an additional collection tax amount by termination under paragraph (6) within the payment period or has paid an amount that falls short of the amount required, the relevant institution dealing in the savings shall pay tax amount to which an amount equivalent to 10/100 of the amount unpaid or amount come short has been added up to the head of a tax office controlling withholding.(10) In cases where Articles 86, 86-2 and 87 are applied, deduction from the income under paragraph (1) shall not apply.(11) When paragraph (1) 1 is applied, everyday possession rate from the establishment date of an investment company or an investment trust shall be not less than 60/100 of the total amount of assets: Provided, That this shall not apply in cases where the possession rate has been prescribed by Presidential Decree.(12) In cases where a resident renews an existing contract as long-term stock-type savings satisfying the requirements under paragraph (1), it shall be deemed that he has newly opened a long-term stock-type savings deposit account on the date of contract renewal.(13) Matters necessary for deduction of the income from long-term stock-type savings, non-taxation on the income tax or such shall be prescribed by Presidential Decree[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) No income tax shall be imposed on the interest income or dividend income accruing from the amount paid not later than December 31, 2009 by any resident who opened a savings deposit account (hereafter referred to in this Article as “long-term corporate debenture-type savings”) satisfying all the requirements under the following subparagraphs: Provided, That this shall not apply in cases where the income accrues after three years from the opening date of the savings deposit account:1. It shall be savings for acquisition of stocks or profit-making securities (limited to acquisition of stocks or profit-making securities by method of subscription under Article 9 (7) of the same Act or by method of sale under paragraph (9) of the same Article of the same Act) of an investment company or an investment trust (excluding special accounts of an insurance company under Article 251 of the Financial Investment Services and Capital Markets Act) under the same Act investing in debentures or corporate bills issued and traded in Korea prescribed by Presidential Decree not less than 60/100 of the total amount of assets;2. The term of contract of savings shall be not less than three years and its principal, interest, dividend, stocks or profit-making securities or such shall not be withdrawn within three years; and3. It shall be deferred savings paid within 50 million won per capita (referring to the total amount of long-term corporate debenture-type savings in all the financial institutions).(2) In cases where the whole or part of principal, interest, dividend, stocks or profit-making securities or such has been withdrawn from the account of long-term corporate debenture-type savings, it shall be deemed that the relevant contract has been terminated.(3) In cases where any person who has opened a long-term corporate debenture-type savings deposit account terminates the contract within three years from the opening date of the savings deposit account, a financial institution dealing in long-term corporate debenture-type savings (hereafter referred to in this Article as an “institution dealing in savings”) shall additionally collect the tax amount reduced and exempted because the income tax has not been imposed on the interest income and dividend income and pay it to the head of a tax office controlling withholding not later than 10th of the following month of the month to which the termination date of a savings contract belongs: Provided, That this shall not apply in cases where a saving contract has been terminated by unavoidable reasons prescribed by Presidential Decree, such as death, overseas emigration or such.(4) In cases where an institution dealing in savings has additionally collected the tax amount reduced and exempted pursuant to paragraph (3), it shall notify a person who has opened a savings deposit account of its details in writing.(5) In cases where an institution dealing in savings has failed to pay the tax amount additionally collected pursuant to paragraph (3) within the period fixed or has paid tax amount below the amount required, the relevant institution dealing in savings shall pay the amount to which an amount equivalent to 10/100 of the tax amount unpaid or tax amount come short is added up to the head of a tax office controlling withholding.(6) When paragraph (1) 1 is applied, the average possession rate of every three months from the establishment date of an investment company or an investment trust (referring to the rate obtained by dividing the total of everyday rate of the appraised amount of corporate debentures or corporate bills accounting for in the appraised amount of an investment company or an investment trust for three months by the total days of the same period) shall be not less than 60/100 of the total amount of assets: Provided, That this shall not apply in cases where it has been prescribed by Presidential Decree.(7) In cases where a resident renews an existing contract as long-term corporate debenture-type savings satisfying the requirements under paragraph (1), it shall be deemed that he has newly opened a long-term corporate debenture-type savings deposit account on the date of contract renewal. In such cases, the amount to be converted into long-term corporate debenture-type savings from among the amount paid before the date of contract renewal shall be determined and such contract shall be renewed.(8) Matters necessary for non-taxation, etc. on the income tax of long-term corporate debenture-type savings shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) In cases where a resident opens an account in an investment trust, investment company, and real estate investment company prescribed by Presidential Decree (hereafter referred to as “investment trust, etc. of houses unsold in lots” in this Article) as established for the purpose of making a direct or indirect investment in houses unsold in lots prescribed by Presidential Decree (hereafter referred to as “houses unsold in lots” in this Article) not later than December 31, 2009, any dividend income derived from up to 100 million won of invested amount for each grade of the relevant investment trust of unsold housing from among the dividend incomes distributed before December 31, 2012 shall be exempted from the income tax. In such cases, when the invested amount exceeds 100 million won, any dividend income derived from the exceeding amount shall not be added to the global income tax base under Article 14 (2) of the Income Tax Act.(2) In cases where it is unlikely to distribute dividend incomes not later than December 31, 2012 due to delaying the disposal of houses unsold in lots as prescribed by Presidential Decree, paragraph (1) shall apply to the dividend incomes distributed not later than December 31, 2013.(3) In cases where a withholding agent withholds dividend incomes distributed by investment trust, etc. of houses unsold in lots, the withholding agent shall submit detailed statements of non-taxation and separate taxation on the dividend incomes of investment trust, etc. of houses unsold in lots prescribed by Ordinance of the Ministry of Strategy and Finance to the head of the tax office having jurisdiction over the place of tax payment by the last day of the next month after the end of the quarter to which the date for distributing such dividend incomes belongs.(4) Methods of opening an account for investment trust, etc. of houses unsold in lots and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9512, Mar. 25, 2009]

(1) If a national as determined by Presidential Decree acquires (including a new construction or purchase; hereafter in this Article the same shall apply) facilities falling under any of the following subparagraphs not later than December 31, 2009 in order to promote the welfare of his employees, such as residential stability, etc., an amount equivalent to 7/100 of the price for the acquisition of the facilities concerned (excluding the price for the purchase of the land attached to such facilities) shall be deducted from his income tax (limited to the income tax on business income) or corporation tax for the taxable year whereto belongs the date of acquisition: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006>1. National housing to be rented to such employees as having no houses (excluding the executives who are equity investors);2. Dormitory for employees;3. Nursery facilities in a workplace under the Infant Care Act; or4. Facilities for the promotion of convenience of disabled persons, aged persons, or pregnant women which are determined by Presidential Decree.(2) Matters necessary for the calculation of the tax credit, in cases 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 intends to benefit from paragraph (1) shall apply for the tax credit as prescribed by Presidential Decree.(4) In cases where any person for whom the income tax or corporation tax was deducted under paragraphs (1) and (2) diverts the relevant assets to other purposes within 3 years from the date of work completion or of purchase of the relevant assets, he shall pay as the income tax or corporation tax such amounts as are obtained by adding the additional amount equivalent to the interests calculated as prescribed by Presidential Decree, to the amount equivalent to the tax-deduction amount on the relevant assets, at the time of the filing of tax base return for taxable year whereto belongs the date of such diversion; and the relevant tax amount shall be regarded as the tax amount to be paid under Article 76 of the Income Tax Act or Article 64 of the Corporation Tax Act. <Newly Inserted by Act No. 6762, Dec. 11, 2002>

(1) If a resident (excluding executives prescribed by Presidential Decree) retires not later than December 31, 2009 and has his retirement income under Article 22 (1) of the Income Tax Act, an amount equivalent to 30/100 of the calculated retirement income shall be deducted form the calculated retirement income: Provided, That when the deducted tax amount exceeds an amount calculated by multiplying the length of service under Article 48 (1) 2 of the Income Tax Act by 240,000 won, the exceeding amount shall be deemed to be non existent.(2) Notwithstanding paragraph (1), cases prescribed by Presidential Decree, such as where an employee becomes an executive, shall not be governed by paragraph (1).[This Article Newly Inserted by Act No. 9512, Mar. 25, 2009]

(1) If a resident as prescribed by Presidential Decree transfers national housing falling under any of the following subparagraphs (including the land appurtenant thereto which is not larger than twice of the total floor area of the relevant building) after the lease for not less than five years since its commencement on or before December 31, 2000, the tax amount equivalent to 40/100 (50/100 for the transfer not later than December 31, 2009) of the transfer income tax on the income accruing from the transfer of the relevant house (hereinafter referred to as the “rental house”) shall be reduced or exempted: Provided, That the tax amount equivalent to 80/100 (100/100 for the transfer not later than December 31, 2009) shall be reduced or exempted, in the case of a rental house rented for five years or more out of the constructed rental houses under the Rental Housing Act, and of a rental house rented for five or more years since its acquisition and the commencement of its lease after January 1, 1995 (only applicable to a house that has not been occupied at the time of its acquisition), and of a rental house rented for ten or more years, from among the purchased rental houses under the same Act: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 9272, Dec. 26, 2008>1. Houses newly built during the period from January 1, 1986 to December 31, 2000; and2. Apartment houses newly built on or before December 31, 1985 that had not been occupied as of January 1, 1986.(2) In applying the provisions of Article 89 (1) 3 of the Income Tax Act, a rental house shall not be regarded as a house owned by the relevant resident. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005>(3) Any person who intends to be subjected to the abatement or exemption of the transfer income tax under paragraph (1) shall make a report on the matters concerning the rental house and apply for the tax abatement or exemption as prescribed by Presidential Decree. <Amended by Act No. 6538, Dec. 29, 2001>(4) The calculation of the rental period for a rental house under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree.

(1) Where a resident as prescribed by Presidential Decree transfers a national housing falling under any of the following subparagraphs (including the appurtenant land not exceeding twice the total floor area of the relevant building) after renting it for not less than five years, 80/100 of the transfer income tax on the income accruing from the transfer of the relevant house (hereafter in this Article referred to as the “newly-built rental house”) shall be reduced and exempted (exempted for the transfer not later than December 31, 2009): <Amended by Act No. 6538, Dec. 29, 2001; Act No. 9272, Dec. 26, 2008>1. A newly-built rental house under the Rental Housing Act, falling under any of the following items:(a) A house newly built between August 20, 1999 to December 31, 2001; or(b) An apartment house newly built on or before August 19, 1999 that has not been occupied as of August 20, 1999; and2. From among the purchased rental houses under the Rental Housing Act which fall under any of the following subparagraphs, a rental house acquired on or after August 20, 1999 (limited to the case where a sales contract is concluded and a down payment is made during the period from August 20, 1999 to December 31, 2001) and its lease is commenced (limited to the house which has not been occupied at the time of acquisition):(a) A house newly built on or after August 20, 1999; or(b) A house falling under item (b) of subparagraph 1.(2) The provisions of Article 97 (2) through (4) shall apply mutatis mutandis to a newly-built rental house.[This Article Newly Inserted by Act No. 6045, Dec. 28, 1999]

(1) In case where a resident has acquired a national housing unsold in lots as prescribed by Presidential Decree (hereafter in this Article referred to as the “houses unsold in lots”), during the period from November 1, 1995 to December 31, 1997 (including the case where a sales contract is concluded and a down payment is made not later than December 31, 1997), and transfers it after holding and renting it for 5 or more years, he may, as regards any income accruing from the transfer of relevant house, select one of the methods falling under the following subparagraphs as applicable thereto:1. The method of calculating his tax base and tax amount on transfer income pursuant to Articles 92 and 93 of the Income Tax Act, and paying the transfer income tax accordingly. In this case, the transfer income tax rate shall be 20/100, notwithstanding Article 104 (1) of the said Act; or2. The method of calculating his tax base and tax amount on global income pursuant to Articles 14 and 15 of the Income Tax Act, and paying the global income tax accordingly. In this case, the provisions of Article 19 (2) of the Income Tax Act shall apply mutatis mutandis to the calculation of his income amount accruing from the transfer of relevant house.(2) In applying the provisions of paragraph (1), the matters necessary for the special taxation on the houses unsold in lots, such as the judgement of one house for one household under the provisions of Article 89 (1) 3 of the Income Tax Act, or an application for the special taxation, etc., shall be prescribed by Presidential Decree. <Amended by Act No. 7839, Dec. 31, 2005>(3) In cases where a resident has acquired national housing unsold in lots as prescribed by Presidential Decree, during the period from March 1, 1998 to December 31, 1998 (including the case where a sales contract is concluded and a down payment is made not later than December 31, 1998), and transfers it after holding and renting it for 5 years or more, the provisions of paragraph (1) shall apply mutatis mutandis to any income accruing from the transfer of relevant house.

(1) Notwithstanding the main sentence other than the Tables in Article 95 (2) of the Income Tax Act and the provisions of Article 104 (1) 2 and subparagraphs 2-2 through 2-6 of Article 104 (1) of the same Act, the provisions of the following subparagraphs shall apply to the long-term possession special deductible amount and tax rate for the income accruing from the transfer of houses unsold located outside the Seoul Metropolitan area and prescribed by Presidential Decree (hereafter referred to as “houses unsold in the country”in this Article), acquired (including cases where a sales contract has been concluded and an earnest money has been paid by December 31, 2010) by a resident for the period from November 3, 2008 to December 31, 2010:1. Long-term possession special deductible amount: An amount calculated by multiplying the transfer marginal profit by the deductible rates by period of possession under Table 2 in Article 95 (2) of the Income tax Act; and2. Tax rate: A tax rate under Article 104 (1) 1 of the Income tax Act.(2) Articles 55-2 (1) 2 and 95-2 of the Corporation Tax Act shall not apply to the income accruing from transfer of houses unsold in the country satisfying the requirements of the main sentence other than the subparagraphs of paragraph (1) by a corporation: Provided, That in case of unregistered transfer, this shall not apply.(3) The calculated tax amount of total income for the income accruing from transfer of houses unsold in the country satisfying the requirements of the main sentence other than the subparagraphs of paragraph (1) by a resident conducting a real estate transaction business shall be the calculated tax amount of total income under Article 55 (1) of the Income Tax Act notwithstanding Article 64 (1) of the same Act.(4) When the provisions of Article 89 (1) 3 and 104 (1) 2-3 through 2-6 of the Income Tax Act are applied, houses unsold in the country governed by paragraph (1) shall not be deemed to be a house owned by the relevant resident. <Newly Inserted by Act No. 9512, Mar. 25, 2009>(5) When the provisions of paragraphs (1) through (4) are applied, a final report of tax base and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 9512, Mar. 25, 2009>[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) In cases where a resident enters into a sales contract of a house unsold in lots prescribed by Presidential Decree (hereafter referred to as “houses unsold in lots” in this Article) as located in the areas outside Seoul Special Metropolitan City (excluding designated areas under Article 104-2 of the Income Tax Act) with the relevant project undertaker who supplies houses pursuant to Article 38 of the Housing Act (in cases where a project undertaker supplies not more than 20 houses, including the relevant housing builder) for the first time and then acquires it from February 12, 2009 to February 11, 2010 (including cases where a resident enters into a sales contract and then pays contract deposit not later than February 11, 2010), a tax amount equivalent to 100/100 (in case of areas located in the metropolitan overpopulation control area, 60/100) of the transfer income tax with respect to any income accrued from transfer of such house within five years from the date of acquisition shall be reduced or exempted, and if the house unsold in lots is transferred five years after the date of acquisition, the transfer income amount derived for five years since the date of acquisition (in case of areas located in the metropolitan overpopulation control area, an amount equivalent to 60/100 of the transfer tax income) shall be deducted from the income subject to the transfer income tax of the relevant house. In such cases, when the amount reduced or exempted exceeds the income subject to the transfer income tax, the exceeding amount shall be deemed to be non existent.(2) When applying paragraph (1), a house built by the resident himself whose construction is commenced (in cases where the date of commencement is uncertain, it shall be based on the date on which an application for commencement is submitted) and for which the approval for use or inspection for use (including approval for temporary use) has been obtained from February 12, 2009 to February 11, 2010 shall not be included: Provided, That the same shall not apply to cases falling under each of the following subpragraphs:1. A house acquired by a member of rearrangement project association conducting housing redevelopment projects or housing reconstruction projects under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents according to the relevant management and disposal plans; and2. A house which has been demolished and then reconstructed due to loss by fire, collapse, worn-out, etc. while residing or owning.(3) When applying the provisions Article 89 (1) 3 and 104 (1) 2-3 through 2-6 of the Income Tax Act, the houses governed by paragraphs (1) and (2) shall not be deemed to be a house owned by the relevant resident.(4) Notwithstanding the provisions of Article 95 (2) and 104 (1) 2, 2-2 through 2-6 of the Income Tax Act, the provisions under each of the following subparagraphs shall apply to the long-term possession special deductible amount and tax rate for the income derived from transferring the houses governed by paragraphs (1) and (2):1. Long-term possession special deductible amount: An amount calculated by multiplying the transfer marginal profit by the deductible rates for each period of possession under Table 1 in Article 95 (2) of the Income Tax Act (Table 2 in cases falling under the proviso to paragraph (2) of the same Article); and2. Tax rate: A tax rate under Article 104 (1) 1 of the Income tax Act.[This Article Newly Inserted by Act No. 9512, Mar. 25, 2009]

(1) In cases where a resident (excluding any housing developer) has acquired a newly-built house falling under any of the following subparagraphs (including the appurtenant land less than twice the total floor area of relevant building; hereafter in this Article the same shall apply) and transfers it within five years from the date of its acquisition, the tax amount equivalent to 100/100 of transfer income tax on the income amount accruing from such transfer shall be exempted, and where he transfers the relevant newly-built house after the elapse of five years from the date of its acquisition, the amount of transfer incomes accrued during years from the date of acquisition of such newly-built house shall be deducted from his income amount subject to the levy of transfer income tax: Provided, That this shall not apply to the case where such a newly-built house corresponds to an expensive house that is excluded from the non-taxable objects for the transfer income tax pursuant to Article 89 (1) 3 of the Income Tax Act: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6762, Dec. 11, 2002; Act No. 6852, Dec. 30, 2002; Act No. 6916, May 29, 2003; Act No. 7839, Dec. 31, 2005>1. A house which is constructed by himself (including any house acquired by a housing cooperative’s member under the Housing Act, or a cooperative for maintenance and improvement projects’ member under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents) and for which the approval for use or inspection for use (including approval for temporary use) has been obtained during the period from May 22, 1998 to June 30, 1999 (it shall be from May 22, 1998 to December 31, 1999 in the case of national housing; hereafter in this Article referred to as the “newly-built house acquisition period”); or2. A house acquired from a housing developer by a person who first concludes a sales contract and makes a down payment within the newly-built house acquisition period (including a house as prescribed by Presidential Decree that has been acquired through a housing cooperative under the Housing Act, or a cooperative for maintenance and improvement projects under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents): Provided, That a house that has been occupied by another person as of the date of a sales contract, or that has any reasons as prescribed by Presidential Decree during the newly-built house acquisition period shall be excluded.(2) In applying the provisions of Article 89 (1) 3 of the Income Tax Act, a newly-built house subject to paragraph (1) shall not be regarded as a house owned by the resident only in cases where the relevant resident holding the newly-built house and any other house transfers the other house except the newly-built house not later than December 31, 2007. <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>(3) Any person who intends to be eligible for the application of paragraph (1) shall make an application for tax reduction or exemption as prescribed by Presidential Decree.(4) The calculation of transfer income amount accruing for 5 years from the date of acquisition of a newly-built house under paragraph (1) orother necessary matters shall be prescribed by Presidential Decree.

(1) In cases where a resident (excluding a housing developer) has acquired a newly-built house falling under any of the following subparagraphs (including the land appurtenant to the relevant house, of which size is equal to or smaller than twice the total floor area of relevant building; hereafter in this Article the same shall apply) which is located at an area other than the area prescribed by Presidential Decree wherein the price of real estate skyrockets or is likely to skyrocket, in view of the rising ratio of the national consumer prices and of the national trade prices of housing, and transfers it within 5 years from its acquisition, the tax amount equivalent to 80/100(100/100 for transfer not later than December 31, 2009) of the transfer income tax on the income accruing from such transfer shall be reduced or exempted, and where he transfers the relevant newly-built house after the elapse of 5 years from its acquisition, the amount of transfer incomes accrued for 5 years from the date of its acquisition shall be deducted from the income amount subject to the levy of transfer income tax: Provided, That this shall not apply to the case where the relevant newly-built house corresponds to an expensive house that is excluded from the non-taxable objects for transfer income tax under the provisions of Article 89 (1) 3 of the Income Tax Act: <Amended by Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 6852, Dec. 30, 2002; Act No. 6916, May 29, 2003; Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>1. In case of a newly-built house acquired from a housing developer: A newly-built house acquired by a person who has first concluded a sales contract with a housing developer and paid a down payment (including a house as prescribed by Presidential Decree that is acquired through a housing cooperative under the Housing Act, or a cooperative for maintenance and improvement projects under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents) within the period from May 23, 2001 to June 30, 2003 (hereafter in this Article referred to as the “newly-built house acquisition period”): Provided, That any house that has been occupied as of the sales contract date, or subjected to the causes as prescribed by Presidential Decree during the newly-built house acquisition period shall be excluded; or2. In case of a newly-built house constructed by himself (including a house that is acquired by a member thereof as prescribed by Presidential Decree through a housing cooperative under the Housing Act, or a cooperative for maintenance and improvement projects under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents): A newly-built house for which the approval for use or inspection for use (including the approval for temporary use) has been obtained during the newly-built house acquisition period.(2) In applying the provisions of Article 89 (1) 3 of the Income Tax Act, a newly-built house subject to paragraph (1) shall not be considered a house owned by the resident only in cases where the relevant resident holding the newly-built house and any other house transfers the other house except the newly-built house not later than December 31, 2007. <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006>(3) A person who intends to be eligible for the application of paragraph (1) shall apply for the reduction or exemption as prescribed by Presidential Decree.(4) In applying the provisions of paragraph (1), the calculation of the transfer income amount accruing for 5 years from the acquisition date of a newly-built house and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6297, Dec. 29, 2000]

(1) In case a household that is made up of a resident and his spouse which shall be prescribed by Presidential Decree (hereafter in this Article referred to as a “household”) acquires a house falling under any of the following subparagraphs (hereafter in this Article referred to as a “house in agricultural and fishing villages”) in the period from August 1, 2003 (January 1, 2009 for a house in one’s native place) to December 31, 2011 (hereafter in this Article referred to as the “period for acquisition of a house, etc. in agricultural and fishing villages”) and owns it for not less than three years and thereafter transfers another house the same household has owned before the acquisition of such a house in agricultural and fishing villages (hereafter referred to as the “ordinary house” in this Article), the relevant house in agricultural and fishing villages shall not be deemed a house owned by the relevant one household, and thereby Article 89 (1) 3 of the Income Tax Act shall apply to such case: <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. A house satisfying all the requirements of the following items:(a) It shall be located in Eup/Myeon under Articles 3 (3) and (4) of the Local Autonomy Act at the time of acquisition, as areas except an area falling under any of the following:(ⅰ) Seoul Metropolitan area: Provided, That areas prescribed by Presidential Decree shall be excluded from among the border areas under Article 2 of the Border Area Support Act in consideration of price trends of real estate;(ⅱ) Urban area under Article 6 of the National Land Planning and Utilization Act and permitted zone under Article 117 of the same Act;(ⅲ) Designated area under Article 104-2 (1) of the Income Tax Act; and(ⅳ) Other areas, such as tourist facilities complex, etc., prescribed by Presidential Decree because the price stabilization of real estate is deemed necessary;(b) Its lot area shall be within 660 square meters and its floor area shall be within the standards prescribed by Presidential Decree; and(c) The total amount of the price of a house and land annexed thereto (referring to the standard market price under Article 99 of the Income Tax Act) shall not exceed 200 million won at the time of acquisition of the relevant house.2. A house satisfying all the requirements of the following items (hereafter in this Article referred to as a “house in native place”):(a) It shall be a house located in one’s native place prescribed by Presidential Decree;(b) It shall be located in urban areas prescribed by Presidential Decree (excluding the following areas) in consideration of population, etc. at the time of acquisition;(ⅰ) Seoul Metropolitan area;(ⅱ) Designated area under Article 104-2 (1) of the Income Tax Act; and(ⅲ) Other areas, such as tourist facilities complex, etc., prescribed by Presidential Decree because the price stabilization of real estate is deemed necessary;(c) Its lot area shall be within 660 square meters and its floor area shall be within the standards prescribed by Presidential Decree; and(d) The total amount of the price of a house and land annexed thereto (referring to the standard market price under Article 99 of the Income Tax Act) shall not exceed 200 million won at the time of acquisition of the relevant house.(2) Deleted. <by Act No. 8827, Dec. 31, 2007>(3) In cases where both the house, etc. in agricultural and fishing villages that a household acquires and the ordinary house that it has owned are located at the same Eup/Myeon in terms of the administrative zone or at Eup/Myeon bordering thereon, the provisions of paragraph (1) shall not apply. <Amended by Act No. 9272, Dec. 26, 2008>(4) The provisions of paragraph (1) shall also apply even if a household transfers the ordinary house before fulfilling such requirements that the house, etc. in agricultural and fishing villages be owned for three or more years as referred to in paragraph (1). <Amended by Act No. 9272, Dec. 26, 2008>(5) In cases where a household that was subject to the application of the special case of transfer income tax under paragraph (4) fails to own the house, etc. in agricultural and fishing villages for not less than three years, the tax amount which a person eligible for the application of the special taxation would have paid if he had not been allowed such application of the special taxation and which shall be calculated as prescribed by Presidential Decree shall be paid as transfer income tax at the time of the filing of tax base return for the taxable year in which the household fails to own such a house: Provided, That the same shall not apply if there is any unavoidable reason prescribed by Presidential Decree, such as an expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor. <Amended by Act No. 9272, Dec. 26, 2008>(6) Any person who intends to be governed by the special taxation under the provisions of paragraphs (1) and (4) shall apply for such special taxation as prescribed by Presidential Decree.(7) Such matters as may be necessary concerning the lot area of a house in agricultural and fishing villages, etc., method of assessment of its acquisition price, calculation of the holding period of its ownership, and criteria for decision on whether a house meets requirements for the house in agricultural and fishing villages, etc. shall be prescribed by Presidential Decree. <Amended by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

In case an employer as referred to in subparagraph 10 of Article 2 of the Korea Housing Finance Corporation Act (hereafter in this Article referred to as an “employer”) assists his employees who do not have their own houses, not later than December 31, 2009, with the funds required for the acquisition or rent of houses of which sizes are not larger than those of the national housing units provided for in the Housing Act, an amount determined by Presidential Decree out of the total amount of such assisted funds shall be included in the deductible expenses, and no income tax shall be imposed on such assisted funds that the employees with no houses of their own receive from their employer. <Amended by Act No. 7030, Dec. 31, 2003; Act No. 8146, Dec. 30, 2006>[This Article Wholly Amended by Act No. 7003, Dec. 30, 2003]

In order to heighten low-income workers’ willingness to work and supplement their income, the tax credit for earned income shall be determined and refunded, applying the earned income tax credit system provided in Articles 100-3 through 100-13.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) A resident who has such an earned income under Article 20 of the Income Tax Act during the taxable period of the income tax and meets all requirements of the following subparagraphs may file an application for the earned income tax credit for the taxable period of the income tax concerned: <Amended by Act No. 9272, Dec. 26, 2008>1. It is required that the resident support one or more persons who share the same livelihood with him and meet all requirements of the following items (hereafter in this Section, referred to as “dependent children”):(a) They shall be the resident’s children or adopted children living together, who are prescribed by Presidential Decree: Provided, That they shall include the resident’s grandchildren or siblings who have no parent or no parent with ability to support, as prescribed by Presidential Decree;(b) They shall be under the age of 18: Provided, That if they are disabled persons prescribed by Presidential Decree, they shall not be subject to the age limit; and(c) Their total amount of annual income shall not exceed one million won;2. It is required that the total amount of annual income of the resident (including his spouse; hereafter the same shall apply in this Article), as prescribed by Presidential Decree, be less than seventeen million won;3. It is required that no members of the household concerned (hereafter referred to as “household members” in this Section), including the resident, as prescribed by Presidential Decree, own a house; and4. It is required that the total asset amount of land, buildings, automobiles, savings accounts and other properties prescribed by Presidential Decree, which are held by the household members including the resident, be less than one hundred million won.(2) Notwithstanding the provisions of paragraph (1), the resident who falls under any of the following subparagraphs during the taxable period of the income tax concerned may not file an application for the earned income tax credit: <Amended by Act No. 8827, Dec. 31, 2007>1. A person who has been provided with subsidies for all or part of his salary for three months or longer pursuant to Article 7 (1) 1, 2, or 4 of the National Basic Living Security Act;2. A foreigner: Provided, That this shall not include a person who is married to a person having the nationality of the Republic of Korea; and3. A dependent child of another resident.(3) When paragraph (1) 3 is applied, in cases where any member of a household owns a small house prescribed by Presidential Decree, it shall be deemed that he does not own a house. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(4) The base date of holding a house and property pursuant to paragraph (1) 3 and 4, the methods of their evaluation, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The persons who share the same livelihood as prescribed in Article 100-3 (1) 1 shall be the family members who live together under the resident registration card and physically live together with the resident at his domicile or temporary domicile: Provided, That this shall not apply to his lineal descendants.(2) Even though a resident or his dependent child who is not his lineal descendant leaves temporarily his original domicile or temporary domicile, to enter school or receive any medical treatment for a disease, or under any circumstances of service or business, he shall be considered as a person living together as referred to in Article 100-3 (1) 1.(3) The determination on whether a person falls under a dependent child as prescribed in Article 100-3 (1) 1 shall depend upon the situation as of the end of the taxable period in the relevant year: Provided, That with respect to a person who is dead, or whose handicap is healed, before the end of the taxable period in the relevant year, it shall depend upon the situation as of the day preceding the day of death or healing.(4) In cases where a day on which a dependent child is under the age of 18, belongs to the taxable period in the relevant year, he shall be deemed to be under the age of 18, notwithstanding the provisions of the main sentence of paragraph (3).(5) In cases where a dependent child of a resident falls under a dependent child of another resident at the same time, he shall be deemed to be a dependent child of either resident.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The bounty on labor shall be calculated according to the classification under the following subparagraphs, based on the amount of income under the subparagraphs of Article 20 (1) of the Income Tax Act (excluding non-taxable income and earned income prescribed by Presidential Decree; hereafter in this Section referred to as the “gross amount of wages”). In such cases, when the amount of bounty on labor is less than 1,000 won, it shall be deemed that the amount of bounty on labor is nil: <Amended by Act No. 9272, Dec. 26, 2008> Subparagraph
Gross Amount of Wages
Bounty on Labor
1
Less than eight million won
Amount obtained by multiplying the gross amount of pay by 15/100
2
Not less than eight million
won but less than twelve
million won
One million and two hundred thousand won
3
Not less than twelve million
won but less than seventeen
million won
Amount obtained by multiplying the amount left by subtracting the gross amount of pay from seventeen million won by 24/100
(2) In the application of paragraph (1), when the spouse of a resident (excluding a non-resident; hereafter the same shall apply in this paragraph) has an earned income, the gross amount of wages shall be calculated by adding, to the gross amount of wages of the principal income earner of the resident and the resident’s spouse as prescribed by Presidential Decree (hereafter referred to as the “principal income earner” in this Section), the gross amount of wages of the principal income earner’s spouse.(3) Notwithstanding the provisions of paragraph (1), the bounty on labor shall be calculated by applying the table of the calculation of the bounty on labor prescribed by Presidential Decree by the range of the gross amount of wages.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) Any resident (in the case of falling under Article 100-5 (2), referring to the resident who is the principal income earner) who intends to receive the bounty on labor shall file an application for the bounty on labor stating the matters under the following subparagraphs, with the head of the tax office having jurisdiction over the place wherein tax is paid, accompanied by the documentary evidence prescribed by Presidential Decree as necessary for examining the eligibility for application for the bounty on labor, in the period for a final return on tax base for global income pursuant to Article 70 or 74 of the Income Tax Act: <Amended by Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Qualifications for application; and2. Amount of the bounty on labor calculated pursuant to Article 100-5.(2) In the application of paragraph (1), in the case of the resident’s death, his inheritor may file an application for the bounty on labor to be paid to the resident. In such cases, it shall be deemed that a resident has made an application for the bounty on labor.(3) Paragraph (1) shall apply only in cases where the resident has filed both a final return on tax base for global income (including a final return on tax base for global income filed by the resident’s spouse) and an application for the bounty on labor under paragraph (1) in the period for a final return on tax base for global income pursuant to Article 70 or 74 of the Income Tax Act. <Amended by Act No. 9272, Dec. 26, 2008>(4) When a person who has failed to file a final return on tax base for global income pursuant to Article 73 of the Income Tax Act makes an application for the bounty on labor under paragraph (1), a final return on tax base for global income pursuant to Article 70 or 74 of the Income Tax Act shall be deemed to be filed in the application of this Section.(5) When a daily-paid worker referred to in Article 14 (3) 2 of the Income Tax Act makes an application for the bounty on labor under paragraph (1) in relation to his wages, a final return on tax base for global income pursuant to Article 70 or 74 of the Income Tax Act shall be deemed to be filed in the application of this Section, notwithstanding the provisions of Article 14 (3) of the Income Tax Act.(6) The procedure for application for the bounty on labor, the application form, and the matters concerning the submission of materials for examination of eligibility for application, and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 8827, Dec. 31, 2007>[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The head of the tax office having jurisdiction over the place wherein tax is paid shall, upon receipt of an application for a grant for the encouragement of labor pursuant to Article 100-6 (1), determine the grant for the encouragement of labor, under the conditions as prescribed by Presidential Decree, within three months after the elapse of the deadline for filing a final return on tax base for global income pursuant to Article 70 or 74 of the Income Tax Act: Provided, That where it is hard to determine the grant for the encouragement of labor within three months due to any such cause as prescribed by Presidential Decree, the period of determination of the grant for the encouragement of labor may be extended within the limit of one month.(2) The grant for the encouragement of labor determined pursuant to paragraph (1) shall be deemed to be the income tax amount already paid, in the relevant year, by a person who has filed an application for the grant for the encouragement of labor (hereinafter referred to as the “applicant”) pursuant to Article 100-6 (1).[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In case where a total of both the amount of a grant for the encouragement of labor determined pursuant to Article 100-7 and the income tax amount already paid in the relevant year (excluding the grant for the encouragement of labor determined pursuant to Article 100-7; hereafter in this paragraph the same shall apply) exceeds the income tax amount payable in the relevant year, the head of the tax office having jurisdiction over the place wherein tax is paid shall refund the excess, and in case where there is no income tax amount payable in the relevant year, shall refund both the amount of the grant for the encouragement of labor and the income tax amount already paid in the relevant year, as the refundable tax amount, applying mutatis mutandis Article 51 of the Basic Act for National Taxes.(2) With respect to the tax amount to be refunded pursuant to paragraph (1) (if the tax amount to be refunded exceeds the grant for the encouragement of labor determined pursuant to Article 100-7, the excess shall be excluded), the provisions of Article 52 of the Basic Act for National Taxes shall not apply.(3) The head of the tax office having jurisdiction over the place wherein tax is paid shall, upon determination of a grant for the encouragement of labor, notify the applicant of the fact of such determination within 30 days from the date on which such determination is rendered and refund the tax amount to be refunded, if any, within the said period, under the conditions as prescribed by Presidential Decree.(4) The methods of calculation, and the procedures of refund, of the refundable tax amount, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In case where an applicant (including the inheritor referred to in Article 100-6 (2); hereafter in this paragraph, the same shall apply) has filed an application falsely stating, willfully or by gross negligence, the matters relating to the application requirements for grants for the encouragement of labor as set by Presidential Decree, the head of the tax office having jurisdiction over the place wherein tax is paid shall not refund (including the case of deduction from the tax amount to be paid; hereafter in this Section the same shall apply) grants for the encouragement of labor to the applicant for two years (for five years, if he has filed the false application in any deceitful or other wrongful manner) from the year whereto belongs the date on which such a fact is ascertained (from the next year, if the grant for the encouragement of labor is refunded pursuant to Article 100-8 in the year whereto belongs the date on which such a fact is ascertained).(2) The provisions of paragraph (1) shall also apply to the person who has solicited the applicant to file an application falsely stating the matters relating to the application requirements for grants for the encouragement of labor pursuant to paragraph (1).(3) The head of the tax office having jurisdiction over the place wherein tax is paid shall notify the person subject to restriction on the refund of the grant for the encouragement of labor pursuant to paragraph (1) or (2) of the reasons why and the period when the refund of the grant for the encouragement of labor is restricted, under the conditions as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) The head of the tax office having jurisdiction over the place wherein tax is paid shall correct the grants for the encouragement of labor if there is any omission or error in the determination of the grants for the encouragement of labor pursuant to Article 100-7 (1).(2) In case where the grant for the encouragement of labor requested by the applicant exceeds the grant for the encouragement of labor pursuant to Article 100-7, the provisions of Article 47-4 of the Basic Act for National Taxes shall not apply.(3) In case where the amount of the grant for the encouragement of labor pursuant to Article 100-7 are reduced due to any correction under paragraph (1), and thereby the tax amount paid by the applicant is short of the tax amount to be paid or the tax amount refunded to the applicant exceeds the tax amount to be refunded, an amount calculated by applying the following formula shall be added to the income tax amount to be paid or deducted from the income tax amount refunded in excess:The shortage of the tax amount or the tax amount refunded in excess × The period from the next day of the time limit of application or the day of refund through the day of notification of tax payment × The interest rate prescribed by Presidential Decree in consideration of the interest rates, etc. that the financial institutions apply to overdue loans.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

A public official who is engaged in the duties of determination, etc. of grants for the encouragement of labor may confirm necessary matters concerning the application qualifications for the grants for the encouragement of labor, the determination of the grants for the encouragement of labor, etc. with respect to a person falling under any one of the following subparagraphs, and investigate the books, documents and other articles concerned or order their submission: <Amended by Act No. 9272, Dec. 26, 2008>1. An applicant (including the inheritor referred to in Article 100-6 (2)), his dependent children, and his household members referred to in Article 100-3 (1) 3;2. A person responsible for withholding under Article 127 of the Income Tax Act; and3. A person responsible for presentation of a detailed statement of payment under Article 164 of the Income Tax Act.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where the head of the tax office having jurisdiction over the place wherein tax is paid needs to verify the details of the financial transactions conducted by the applicant and his dependent children (including the household members referred to in Article 100-3 (1) 3) to determine or correct the bounty on labor, the Commissioner of the National Tax Service (including the Commissioner of the competent Regional Tax Office; hereafter the same shall apply in this Article) may request the head of the financial institution concerned to submit data relating to the details of the financial transactions in the form of a document or through the information and communications networks under subparagraph 18 of Article 2 of the Basic Act for National Taxes (hereafter referred to as the “information and communications networks” in this Article) as prescribed by Presidential Decree, notwithstanding the provisions of Article 4 of the Act on Real Name Financial Transactions and Guarantee of Secrecy, and the head of the financial institution shall transmit such data through the information and communications networks or submit them by means of electronic record media including diskettes and magnetic tapes.(2) The Commissioner of the National Tax Service shall neither use the data submitted pursuant to paragraph (1) for any other purpose than provided for in paragraph (1) nor provide them to any other agency.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

The Commissioner of the National Tax Service may request a State agency, a local government or any other organization or institution prescribed by Presidential Decree to provide him with such data specified by Presidential Decree as necessary for examining the eligibility for application for the earned income tax credit pursuant to Article 100-3. In this case, the person so requested shall provide him with such data, unless any justifiable ground exists. <Amended by Act No. 8827, Dec. 31, 2007>[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

The definitions of the terms used in this Section shall be as follows:1. The term “partnership firm” means an organization established by two or more persons who invest money, an asset, labor, or any other resource to run it as a joint business and share the income or loss incurred while running the joint business;2. The term “partner” means to a resident, non-resident, domestic corporation, or foreign corporation who has invested in a partnership firm;3. The term “allocation” means an action to imputing the income, deficit, or similar of a partnership firm to the partners’ income, deficit, or similar, regardless of whether or not any asset is actually distributed, at the end of each taxable year;4. The term “income or deficit of a partnership firm by partner groups” means the income or deficit for the pertinent taxable year as calculated in accordance with the Income Tax Act or the Corporation Tax Act by classifying partners into four groups of residents, non-residents, domestic corporations, and foreign corporations (hereinafter referred to as “partner groups”) and treating each group of a partnership firm as a single resident, non-resident, domestic corporation, or foreign corporation;5. The term “allocation rate of income or loss for each partner group” means the rate calculated by summing up the rates of income or loss allocated to all partners who belong to a partner group;6. The term “amount of income or deficit allocable to a partner group” means the amount calculated by multiplying the amount of income or deficit of a partnership firm for partner groups by the allocation rate of income or loss for each partner group;7. The term “value of equity shares” means a book value of equity shares in a partnership firm held by partners for the purpose of taxation, which shall serve as the basis in computation of taxable income at the time of transferring the equity shares in the partnership firm or distributing assets of the partnership firm; and8. The term “distribution” means an act of actually conveying an asset of a partnership firm to its partners.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

A partnership firm and its partners shall be eligible for the special taxation under the provisions of this Section (hereafter referred to as “special taxation for partnership firms” in this Section), if such firm is an organization falling under any of the following subparagraphs and files an application for eligibility pursuant to Article 100-17: Provided, That a partner of a partnership firm may not be eligible, as a partnership firm, for the special taxation for partnership firms, if the partner itself has benefitted from the special taxation for partnership firms: <Amended by Act No. 9272, Dec. 26, 2008>1. An association under the Civil Act (excluding an investment association under Article 9 (18) 5 of the Financial Investment Services and Capital Markets Act);2. An undisclosed association under the Commercial Act (excluding an undisclosed investment association under Article 9 (18) 6 of the Financial Investment Services and Capital Markets Act);3. An unlimited partnership company and a limited partnership company under the Commercial Act (excluding an investment limited partnership company of investment limited partnership companies under Article 9 (18) 4 of the Financial Investment Services and Capital Markets Act, which is not a private equity fund specialized company under subparagraph 7 of the same paragraph); and4. An organization prescribed by Presidential Decree as the one similar to any organization of subparagraphs 1 through 3 or as an organization engaging mainly in providing a human resources service.(2) As to the partnership firms eligible for the special taxation for partnership firms and their partners, the provisions of this Section shall apply prior to the provisions of respective tax-related Acts.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) Notwithstanding the provisions of Article 1 (1) of the Income Tax Act and Article 2 (1) and (2) of the Corporation Tax Act, partnership firms shall be exempted from the income tax or the corporation tax on the incomes under Article 3 of the Income Tax Act and each subparagraph of Article 3 (1) of the Corporation Tax Act.(2) Partners shall have the duty to pay the income tax or the corporation tax on the partnership firm’s income as allocated in accordance with Article 100-18.(3) In cases where a domestic corporation is governed by the special provisons on taxation for partnership firms, the relevant domestic corporation (hereinafter referred to as a “corporation converted into a partnership firm”) shall be liable to pay the amount calculated by applying the tax rate under Article 55 (1) of the Corporation Tax Act to the tax base calculated as prescribed by Presidential Decree based on the amount of the liquidation income by dissolution under Article 79 (1) of the Corporation Tax Act as corporation tax (hereinafter referred to as “corporation tax on quasi-liquidation income”). <Newly Inserted by Act No. 9272, Dec. 26, 2008>(4) A corporation converted into a partnership firm shall report the tax base and tax amount of corporation tax on quasi-liquidation income to the head of a tax office having jurisdiction over a place of tax payment by the date when three months has passed after the completion date of the preceding business year of the first business year governed by the special provisions on taxation for partnership firms. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(5) A corporation converted into a partnership firm shall pay the tax amount of corporation tax on quasi-liquidation income in equal amount or higher for three years from the deadline of report under paragraph (4). <Newly Inserted by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) A firm shall, if it desires to become eligible for the special taxation for partnership firms, file an application with the head of the competent tax office prescribed by Presidential Decree.(2) A partnership firm eligible for the special taxation for partnership firms may waive such special taxation prescribed by Presidential Decree: Provided, That it shall not waive the special taxation for partnership firms during the period of time between the taxable year in which it benefits from the special taxation initially and the taxable year that ends within four years from the first day of the taxable year immediately following the aforementioned first taxable year.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) The income or deficit subject to allocation to each partner group shall be allocated to each partner of the partner group in proportion to the allocation rate of income or loss among the partners at the end of each taxable year: Provided, That no deficit may be allocated to a partner who has invested in the partnership firm but has not participated in its management, specified by Presidential Decree (hereafter referred to as a “passive partner” in this Section).(2) The deficit allocated to each partner under paragraph (1) may not exceed the value of equity shares held by each partner as of the end of the pertinent taxable year of the partnership firm. In such cases, the portion of deficit exceeding the value of equity shares held by a partner shall be carried over to and allocated over the taxable years that end within ten years after the first day of the taxable year immediately following the pertinent taxable year prescribed by Presidential Decree. <Amended by Act No. 9272, Dec. 26, 2008>(3) Each partner shall, when he calculates the tax base of the income tax or the corporation tax for the taxable year to which the ending date of taxable year of the partnership firm belongs, regard the income or deficit allocated to him under paragraph (1) as the gross income or deductible expenses classified by Presidential Decree: Provided, That a passive partner shall regard the allocated income as the income under Articles 17 (1), subparagraph 2 of Article 119 of the Income Tax Act and subparagraph 2 of Article 93 of the Corporation Tax Act. <Amended by Act No. 9272, Dec. 26, 2008>(4) The amounts relating to a partnership firm as specified in the following subparagraphs shall be allocated to each partner in proportion to the allocation rate of income or loss among partners at the end of each taxable year: Provided, That the amount under subparagraph 4 shall be allocated only to the partners that are domestic corporations or foreign corporations:1. Tax credits and tax amounts abated or exempted under the Corporation Tax Act and this Act;2. Tax amounts withheld under Article 73 of the Corporation Tax Act for the income generated by the partnership firm;3. Additional taxes under Article 76 of the Corporation Tax Act and Article 100-25 of this Act; and4. The corporation tax for the transfer income of land, etc. under Article 55-2 of the Corporation Tax Act.(5) Each partner shall, when he files a return on the income tax or the corporation tax for the taxable year to which the ending date of taxable year of the partnership firm belongs, to pay the tax, deduct the amounts under paragraph (4) 1 and 2 out of the amount allocated under paragraph (4) from the income tax or the corporation tax of the partner, and shall add the amounts under subparagraphs 3 and 4 of the same paragraph to the income tax or the corporation tax of the partner.(6) The matters concerning the determination of the allocation rate of income or loss and the calculation of income, deficit, etc. of a partnership firm, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a partner makes a transaction with his partnership firm as a third party, not as a partner, both the partnership firm and the partner shall include the profit or loss incurred from the transaction in the gross income or the deductible expenses in calculating the income for the pertinent taxable year.(2) If it is found that a partnership firm or a partner, to whom paragraph (1) shall apply, understates the income dishonestly, the head of the tax office having jurisdiction over the tax payment place may apply Article 52 of the Corporation Tax Act mutatis mutandis to the calculation of the income in question. In this case, the partnership firm and the partner shall be regarded as specially related persons as defined in paragraph (1) of the said Article.(3) The criteria for judgment on the transactions made as a third party, the scope of inclusion in gross income and deductible expenses, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) If a partner receives dividends distributed from the income of his partnership firm or if any event prescribed by Presidential Decree occurs, the value of equity shares held by the partner shall be adjusted and raised higher accordingly.(2) If a partner receives an asset distributed by his partnership firm or if any event prescribed by Presidential Decree occurs, the value of equity shares held by the partner shall be adjusted and reduced accordingly.(3) The adjustable amount of equity shares, the order of adjustment, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a partner transfers his equity shares in his partnership firm to other persons, the income derived from the transfer of the equity shares shall be regarded as the one derived from the transfer of an asset under Article 94 (1) 3 or 4 (b) of the Income Tax Act and thus the transfer income tax or the corporation tax shall be levied on such income pursuant to the Income Tax Act or the Corporation Tax Act.(2) The calculation method of the transfer income of equity shares and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a partner receives assets distributed by his partnership firm and the market value of the distributed assets exceeds the value of stakes held by the partner on the date of distribution, the excessive amount shall be regarded as the income under Article 17 (1) of the Income Tax Act in calculating his income for the taxable year to which the date of distribution belongs.(2) In cases where a partner receives assets distributed by his partnership firm as a consequence of such a cause specified by Presidential Decree such as the dissolution of partnership firm, etc. and the market value of the distributed assets does not reach the value of stakes held by the partner, the deficient amount shall be regarded as a loss incurred in the transfer of assets under Article 94 (1) 3 or 4 (c) of the Income Tax Act in calculating his income for the taxable year to which the date of distribution belongs.(3) An amount equivalent to the value of stakes of the relevant partner on the date of distribution from among the market value of assets distributed by a partnership firm in cases under paragraphs (1) and (2) shall not be included in the gross income when calculating the tax base of income tax or corporation tax of the taxable year to which the date of distribution of the relevant partner belongs. <Newly Inserted by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) Every partnership firm shall report the details of calculation and allocation of its income for the pertinent taxable year to the head of the competent tax office, as prescribed by Presidential Decree, not later than the fifteenth day of the third month from the end of the month to which the ending date of the taxable year belongs.(2) Paragraph (1) shall also apply to the partnership firms that has no income generated or deficit incurred during the respective taxable year.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) A partnership firm shall collect the income tax or the corporation tax equivalent to the amount calculated by the following tax rates on the income distributed to the partner that is a non-resident or a foreign corporation, and shall pay it to the head of the tax office having jurisdiction over the place of tax payment by the time limit for filing a return under Article 100-23 (1) (or the tenth day of the month immediately following the month in which the income is distributed or the time limit under Article 100-23 (1), whichever is earlier, in cases where an amount for which the return under Article 100-23 has not been filed is distributed): <Amended by Act No. 9272, Dec. 26, 2008>1. Tax rates under Article 156 (1) 3 of the Income Tax Act and Article 98 (1) 3 of the Corporation Tax Act in case of a passive partner: Provided, That in cases where the proviso to paragraph (3) is applied, tax rates under the subparagraphs of Article 156 (1) of the Income Tax Act and the subparagraphs of Article 98 (1) of the Corporation Tax Act; and2. The highest tax rate of the tax rates under the following items in case of a partner other than a passive partner:(a) If a partner is a non-resident: The tax rate under Article 55 of the Income Tax Act; and(b) If a partner is a foreign corporation: The tax rate under Article 55 of the Corporation Tax Act.(2) Every partnership firm that withholds taxes in accordance with paragraph (1) shall submit a statement of payments in accordance with Article 164-2 of the Income Tax Act and Article 120-2 of the Corporation Tax Act. In such cases, such income shall be deemed as the one that the partnership firm has paid to the partner that is either a non-resident or a foreign corporation, at the time of filing a return under Article 100-23 (or at the time of distributing it, in cases where an amount for which a return under Article 100-23 has not been filed is distributed).(3) Proviso to Article 100-18 (3) shall apply to the classification of income distributed to a passive partner: Provided, That when it is deemed that a passive partner has reduced the income tax or corporation tax unjustly by his having been distributed the income through a partnership firm not by having been paid the income directly, the classification of income under the proviso to Article 100-18 (3) shall not apply, but the classification of income under Article 119 of the Income Tax Act or Article 93 of the Corporation Tax Act shall apply based on the income received by a partnership firm. <Amended by Act No. 9272, Dec. 26, 2008>(4) A non-resident who has income under paragraph (1) 2 and a partner who is a foreign corporation shall make a final report of tax base of the income tax by applying the provisons of Articles 121 through 125 of the Income Tax Act mutatis mutandis or a report of tax base of the corporation tax by applying Articles 91, 92, 95, 95-2 and 97 mutatis mutandis: Provided, That in cases where a partnership firm has withheld and paid the income tax or corporation tax pursuant to paragraph (1), it needs not make a final report of tax base or a report of tax base. <Amended by Act No. 9272, Dec. 26, 2008>(5) In cases where the income classified by application of the proviso to paragraph (3) is that under subparagraph 3 of Article 119 of the Income Tax Act, subparagraph 3 of Article 93 of the Corporation Tax Act or that under subparagraph 9 of Article 119 of the Income Tax Act, subparagraph 7 of Article 93 of the Corporation Tax Act, it shall not be withheld with tax rates under the proviso to paragraph (1) 1 but shall comply with the methods under the following subparagraphs: <Amended by Act No. 9272, Dec. 26, 2008>1. In case of the income under subparagraph 3 of Article 119 of the Income Tax Act or subparagraph 3 of Article 93 of the Corporation Tax Act: Method for a partner to make a report and pay by applying paragraph (4) mutatis mutandis; and2. In case of the income under subparagraph 9 of Article 119 of the Income Tax Act or subparagraph 7 of Article 93 of the Corporation Tax Act: Method for a partnership firm to withhold with tax rates under paragraph (1) 1 and a partner to make a report and pay by applying paragraph (4) mutatis mutandis.(6) When applying paragraphs (1) 2 and (4), a place where a partnership firm conducts a business shall be deemed a domestic place of business of a non-resident or a partner who is a foreign corporation. <Amended by Act No. 9272, Dec. 26, 2008>(7) Articles 156-2 through 156-5 of the Income Tax Act, Articles 98-3 through 98-5 of the Corporation Tax Act and Article 29 of the Act for the Coordination of International Tax Affairs shall apply mutatis mutandis to the application method of withholding under paragraph (1) 1, (3) and (5) 2. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(8) In cases where a non-resident or a partner who is a foreign corporation has a domestic place of business (excluding cases where it is deemed as a domestic place of business pursuant to paragraph (6); hereafter the same shall apply in this paragraph) under Article 120 of the Income Tax Act or Article 94 of the Corporation Tax Act and the income distributed to a partner is that reverting to the domestic place of business, the provisions under paragraphs (1) through (7) shall not apply to the income, and the relevant tax amount shall be reported and paid after adding it up to tax base of the domestic place of business. <Newly Inserted by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) If a partnership firm fails to file a return under Article 100-23 (1) or files a return with an amount of income less than the one that should be reported fairly, the head of the competent tax office shall levy the amounts of the following subparagraphs as an additional tax. In such cases, the calculation method of the income that shall be reported fairly shall be prescribed by Presidential Decree:1. If no return has been filed: 4/100 of the income that shall be reported fairly; and2. If the return filed states an amount of income less than the one that shall be reported fairly: 2/100 of the understated amount of income.(2) If a partnership firm fails to pay a tax that it has already withheld or is obligated to withhold under Article 100-24 by the time limit or pays tax amount less than the one that it owes to pay, the head of the competent tax office shall levy the greater amount of those of the following subparagraphs (which shall not exceed 10/100 of the tax amount not paid or the one paid less) as the additional tax:1. Tax amount not paid or paid less × Time period from the date following the time limit for payment to the date of voluntary payment or the date of notice of payment demand × Interest rate prescribed by Presidential Decree, reflecting the interest rate that financial institutions apply to overdue loans; and2. 5/100 of the tax amount not paid or paid less.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

In cases of partnership firms that are not corporations, with regard to the matters prescribed by Presidential Decree, including the taxable year, tax payment place, business registration, tax credits, abatement and exemption of tax amount, tax withholding, additional tax, transfer income of land, etc., such partnership firms shall be deemed as a single domestic corporation and the relevant provisions of the Corporation Tax Act and this Act shall apply mutatis mutandis to such partnership firms.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

In order to relieve a burden caused by high oil prices, refund money for oil prices under Articles 100-28 through 100-34 shall be paid to labor income earners or business income earners by method of refund of the income tax.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) A person falling under any of the following subparagraphs as a person who has provided his/her labor or a person who has conducted his/her business during the period from January 1, 2008 through December 31, 2008 (hereinafter referred to as the “period subject to payment” in this Section) as a resident under Article 1 (1) 1 of the Income Tax Act may by payed refund money for oil prices:1. A person whose amount of gross wages (hereinafter referred to as the “amount of gross wages” in this Section) under Article 20 (2) of the Income Tax Act during the period of base income is not more than 36 million won as a person who has only labor income under Article 20 of the said Act, from among the total income under Article 4 (1) 1 of the same Act during the period of base income; and2. A person whose amount of total income (hereinafter referred to as the “amount of total income” in this Section) based on Article 14 (2) of the Income Tax Act is not more than 24 million won as a person who has the total income under Article 4 (1) 1 of the same Act during the period of base income of the persons not falling under subparagraph 1.(2) The term “period of base income” in this Section means the period from January 1, 2007 through December 31, 2007: Provided, That in case of a person who has no amount of gross wages or amount of total income during the period from January 1, 2007 through December 31, 2007 as a case of commencing to provide labor or conduct a business after January 1, 2008, it means the period from January 1, 2008 through December 31, 2008.(3) A person who falls under any of the following subparagraphs shall not receive refund money for oil prices notwithstanding paragraph (1):1. A person who has only pay of a soldier in service under subparagraph 4 (a) of Article 12 of the Income Tax Act during the period subject to payment;2. A person subject to payment of subsidies connected with oil prices prescribed by Presidential Decree as a farmer or a fisherman or an owner of truck, etc.; and3. A person whose amount of gross wages during the period of base income exceeds 36 million won.(4) The term “person who has provided labor” in the part other than each of subparagraphs of paragraph (1) means a person whose payment details under Article 164 of the Income Tax Act have been submitted or is to be submitted after his/her year-end settlement of accounts (including cases where he/she is to make the year-end settlement of accounts) under Article 137 of the same Act as a person who has labor income under Article 20 of the same Act during the period subject to payment.(5) In cases where a person who has not joined an association of tax payment under Article 149 of the Income Tax Act has made the final report on tax base pursuant to Article 70 of the same Act as a person who has class B labor income under Article 20 (1) 2 of the same Act, notwithstanding paragraph (4), he/she shall be deemed a person who has provided labor of the part other than each of subparagraphs of paragraph (1).(6) A person whose amount of gross wages is not more than 36 million won as a person who has only wages of a daily worker under Article 14 (3) 2 of the Income Tax Act (limited to a person whose payment details have been submitted under Article 164 of the same Act) from among the total income under Article 4 (1) 1 of the same Act during the period from July 1, 2007 through June 30, 2008, notwithstanding paragraphs (1) and (4), he/she may receive refund money for oil prices: Provided, That this shall not apply to a person whose amount of gross wages during the period concerned is less than the amount of money prescribed by Presidential Decree in consideration of the minimum wage, etc.(7) The term “person who has conducted a business” in the part other than each of subparagraphs of paragraph (1) means a person who is registered as a business operator under Article 168 of the Income Tax Act as a person who has business income under Article 19 of the same Act during the period subject to payment (including a person who has newly registered as a business operator and who has close his/her business): Provided, That a person who has income falling under Article 127 (1) 3 of the same Act shall be deemed a person who has conducted a business even if he/she has not made registration of a business operator.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) Refund money for oil prices of a person falling under Article 100-28 (1) shall be an amount of money calculated according to the division of the following subparagraphs. In such cases, actual amount of refund shall be calculated by multiplying refund money for oil prices by the number of labor provided months or business conducted months during the period subject to payment divided by 12:1. A person falling under Article 100-28 (1) 1; Category
Refund money for
oil prices
Person whose amount of gross wages during the period of base income is not more than 30 million won.
240,000 won
Person whose amount of gross wages during the period of base income is over 30 million won but not more than 32 million won.
180,000 won
Person whose amount of gross wages during the period of base income is over 32 million won but not more than 34 million won.
120,000 won
Person whose amount of gross wages during the period of base income is over 34 million won but not more than 36 million won.
60,000 won
2. A person falling under Article 100-28 (1) 2; Category
Refund money for
oil prices
Person whose amount of total income during the period of base income is not more than 20 million won.
240,000 won
Person whose amount of total income during the period of base income is over 20 million won but not more than 21 million and 300 thousand won
180,000 won
Person whose amount of total income during the period of base income is over 21 million and 300 thousand won but not more than 22 million and 600 thousand won
120,000 won
Person whose amount of total income during the period of base income is over 22 million and 600 thousand won but not more than 24 million won
60,000 won
(2) When applying paragraph (1), in cases where the labor income or the amount of gross wages under Article 20 of the Income Tax Act during the period of base income is calculated, the amount of wages of a daily worker under Article 14 (3) 2 of the same Act shall not be included.(3) Refund money for oil prices of a person falling under Article 100-28 (6) shall be the amount of money calculated according to the following division based on the amount of gross wages from July 1, 2007 through June 30, 2008. In such cases, an actual amount of refund shall be calculated by multiplying refund money for oil prices by the number of labor provided months converted through the amount of money prescribed by Presidential Decree divided by 12 in consideration of the minimum wage, etc.: Category
Refund money for
oil prices
Person whose amount of gross wages is not more than 30 million won.
240,000 won
Person whose amount of gross wages is over 30 million won but not more than 32 million won.
180,000 won
Person whose amount of gross wages is over 32 million won but not more than 34 million won.
120,000 won
Person whose amount of gross wages is over 34 million won but not more than 36 million won.
60,000 won
(4) Specific method of calculation of the number of labor provided months and business conducted months under paragraphs (1) and (3) shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) A person who intends to receive refund money for oil prices shall apply for refund of refund money for oil prices according to the methods of the following subparagraphs:1. A person falling under Article 73 (1) of the Income Tax Act at the time of application shall make an application to the head of tax office having jurisdiction over withholding taxes under Article 7 of the same Act through a person responsible for withholding (including an association of tax payment organized by a person falling under subparagraph 1 of Article 149 of the same Act; hereinafter the same shall apply in this Section) under Article 127 of the same Act on October 2008; and2. A person not falling under subparagraph 1 at the time of application shall make an application to the head of a district tax office in the place of tax payment under Article 6 of the Income Tax Act in November 2008.(2) When falling under any of the following subparagraphs, notwithstanding paragraph (1), he/she shall make an application as prescribed by Presidential Decree:1. In cases where he/she is unable to make an application through a person responsible for withholding because he/she has discontinued his/her business, etc.;2. In cases where he/she is unable to make an application pursuant to paragraph (1) as a case of having newly provided labor or having newly made registration of a business operator or a case of having retired from his/her office or having discontinued his/her business during the period subject to payment; and3. In cases where he/she has not joined an association of tax payment under Article 149 of the Income Tax Act as a person who has only class B labor income under Article 20 (1) 2 of the same Act.(3) In cases where a person falling under paragraph (1) 2 has made an application by the method under paragraph (1) 1, it shall be deemed that he/she has made an application on November 2008.(4) Procedure for application for refund money for oil prices and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) The head of the competent tax office who has received an application for refund of refund money for oil prices pursuant to Article 100-30 (hereinafter referred to as the “head of the competent tax office” in this Section) shall decide refund money for oil prices as prescribed by Presidential Decree.(2) The head of the competent tax office who has decided refund money for oil prices pursuant to paragraph (1) shall refund such money within one month from the date of expiration of a term of application by applying mutatis mutandis Article 51 of the Basic Act for National Taxes (excluding the contents on appropriation): Provided, That when falling under the reasons prescribed by Presidential Decree as a case difficult to reimburse refund money for oil prices within one month, a term of refund of refund money for oil prices may be extended within the extent of one month.(3) In cases where the head of the competent tax office has refunded refund money for oil prices pursuant to paragraph (2) or when he/she has decided not to reimburse refund money for oil prices pursuant to paragraph (1), he/she shall notify an applicant of such contents within a term under paragraph (2). In such cases, in cases where an applicant has made an application pursuant to Article 100-30 (1) 1, the head of the competent tax office may notify en bloc a person responsible for withholding by the method of electronic transmission, when an applicant has made an application pursuant to subparagraph 2 of the same paragraph, he/she may take the measures prescribed by Presidential Decree in lieu of notification.(4) Refund money for oil prices decided pursuant to paragraph (1) shall be deemed the amount of income tax already paid in the year concerned by a person who has made an application for refund money for oil prices pursuant to Article 100-30.(5) The provisions of Article 52 of the Basic Act for National Taxes and Article 24 of the National Tax Collection Act shall not apply to refund money for oil prices decided pursuant to paragraph (1).(6) Method of decision, procedure for refund of refund money for oil prices and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

Notwithstanding Articles 100-30 and 100-31, the head of the competent tax office may decide and reimburse refund money for oil prices to a person falling under Article 100-28 (6) as prescribed by Presidential Decree. In such cases, Article 100-31 (4) and (5) shall apply mutatis mutandis.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) In cases where the amount of money decided and refunded pursuant to Article 100-31 is different from the amount of money that should be actually refunded, and prescribed by Presidential Decree, the head of the competent tax office shall correct refund money for oil prices.(2) In cases where refund money for oil prices decided pursuant to Article 100-31 has been changed due to correction under paragraph (1), the head of the competent tax office shall collect or refund such difference as prescribed by Presidential Decree.(3) In cases where the amount of money decided and refunded pursuant to Article 100-31 has become more than the amount of money that should be actually refunded due to retirement of a person who has received refund money for oil prices during the period subject to payment, a person responsible for withholding shall withhold such difference at the time of the year-end settlement of accounts for the retired person concerned and pay it to the competent tax office of withholding, the Bank of Korea or a communication agency by tenth of the following month of the month to which the date of retirement belongs.(4) Other matters necessary for correction of refund money for oil prices and collection of excessive refund money for oil prices shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) In cases where refund money for oil prices claimed by an applicant for refund money for oil prices exceeds that under Article 100-29 or it falls under the provisions of Article 100-33 (1) through (3), Articles 47-4 and 47-5 (2) shall not apply.(2) In cases where an unjust amount of refund has arisen because an applicant for refund money for oil prices has made an excessive application by unjust method, the head of the competent tax office shall collect in addition the amount of money equivalent to 40/100 of such amount of refund excessively claimed as additional tax.(3) In cases where an unjust amount of refund has arisen due to an unjust act by a person responsible for withholding as a case of application through a person responsible for withholding pursuant to Article 100-30 (1) 1, the head of the competent tax office shall make an additional collection of the amount of money equivalent to 40/100 of the unjust amount of refund from a person responsible for withholding.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

In the application of the provisions of Article 63 of the Inheritance Tax and Gift Tax Act, in cases where shares or equities of the largest shareholder or largest investor under Article 63 (3) of the same Act and those of the shareholder or investor who has a special relationship with the former are inherited or gifted on or before December 31, 2009, such shares and such equities shall be based on the values that are appraised in accordance with the provisions of Article 63 (1) 1 and (2) of the same Act, notwithstanding the provisions of Article 63 (3) of the same Act. <Amended by Act No. 8146, Dec. 30, 2006>[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) As regards the incomes accruing from the reforestation or transfer of a 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 of the amended Forestry Act, Act No. 4206, which is the designated development area designated by the previous Forestry Act prior to the enforcement of the amended Forestry Act), or a seed-collection forest, a preserving forest, or a forest genetic resources protection forest that he has afforested for over 10 years, not later than December 31, 2009, the tax amount equivalent to 50/100 of the income tax or corporation tax shall be reduced or exempted. <Amended by Act No. 7678, Aug. 4, 2005; Act No. 8146, Dec. 30, 2006>(2) Any person who intends to be subjected to the application of paragraph (1) shall apply for the reduction or exemption under the conditions as prescribed by Presidential Decree.

(1) No income tax or corporation tax shall be levied on the subsidies falling under any of the following subparagraphs which are paid not later than December 31, 2009: <Amended by Act No. 8146, Dec. 30, 2006>1. Subsidies granted under Article 4 (1) of the Special Act on Assistance to Fisherman, etc. and Development of Fisheries following the Conclusion of Fisheries Agreement to the fishermen, etc. under the same Act (hereafter referred to as the “fishermen, etc.” in this Article); and2. Unemployment subsidies granted to fishing vessel crews under Article 5 (1) of the Special Act on Assistance to Fisherman, etc. and Development of Fisheries following the Conclusion of Fisheries Agreement.(2) Subsidies granted to the fishermen, etc. for renovation of their fishing vessels and gears and fishing operation expenses, not later than December 31, 2009, pursuant to Article 4 (3) of the Special Act on Assistance to Fisherman, etc. and Development of Fisheries following the Conclusion of Fisheries Agreement (hereafter referred to as the “fishery subsidies” in this paragraph) shall not be included in the gross income in calculating their income amount, and any disbursement of the relevant fishery subsidies or any depreciation of business assets acquired with the fishery subsidies shall not be added to the deductible expenses. <Amended by Act No. 8146, Dec. 30, 2006>[This Article Newly Inserted by Act No. 6045, Dec. 28, 1999]

(1) As regards the stocks which are traded by intermediation or proxy under Article 2 (8) 8 of the Securities and Exchange Act, the provisions of Article 94 of the Income Tax Act shall be applied by deeming that they are traded at the securities market or the Association brokerage market.(2) The provisions of Article 8 of the Securities Transaction Tax Act and of Article 5 (1) 5 of the Special Tax Law for Rural Development shall be applied, by deeming that the listed stocks are traded at the securities market, and that the Association-registered ones are traded at the Association brokerage market, from among the stocks traded under the conditions as determined by Article 2 (8) 8 of the Securities and Exchange Act.[This Article Newly Inserted by Act No. 6480, May 24, 2001]

(1) In cases where anyone who is liable to furnish an information return and other document in lieu of such information return, which is prescribed by Presidential Decree pursuant to Articles 164 and 164-2 of the Income Tax Act and Articles 120 and 120-2 of the Corporation Tax Act (excluding any information return on interest income and dividend income, and other document in lieu thereof; hereafter in this Article referred to as “information return, etc.”) directly furnishes the information return, etc. by making use of the national tax information and communications network provided for in subparagraph 19 of Article 2 of the Basic Act for National Taxes (hereafter in this Article referred to as the “national tax information and communications network”), an amount that is determined by Presidential Decree taking into account the number of submission cases, etc. shall be deducted from the payable tax amount of the income tax or the corporation tax on which the tax base and the tax amount are first returned after the lapse of the deadline for furnishing the information return, etc.(2) In cases where any certified tax accountant provided for in the Certified Tax Accountant Act (including any tax accounting corporation provided for in the Certified Tax Accountant Act and any accounting corporation provided for in the Certified Public Accountant Act; hereafter the same shall apply in this paragraph) furnishes the information return, etc. by making use of the national tax information and communications network on behalf of anyone who is liable to furnish such information return, etc. under paragraph (1), an amount that is determined by Presidential Decree taking into account the number of submission cases, etc. shall be deducted from the payable tax amount of the income tax or the corporation tax to be paid by the certified tax accountant on which the tax base and the tax amount are first returned after the lapse of the deadline for furnishing the information return, etc. <Amended by Act No. 7839, Dec. 31, 2005>[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) In cases where any dividend from profits or allocation of surplus (hereafter referred to as the “paid dividend” in this Article) paid by a foreign affiliated company (referring to a foreign corporation of which a domestic corporation directly invests in 20/100 or more of total outstanding stocks or contributes to 20/100 or more of total equity capital; in the case of a foreign corporation engaged in overseas resources development business under Article 22, including a case where the total amount of a direct investment by a domestic corporation accounts for 5/ 100 or more of the total number of the issued stocks or the total amount of equity capital in the foreign corporation concerned; hereafter the same shall apply in this Article) is included in the amount of income for each business year of the domestic corporation and where such dividend or allocation falls under each of the following subparagraphs, notwithstanding the provisions of Article 57 (4) of the Corporation Tax Act, such dividend or allocation shall be treated as a foreign corporation tax either to be subjected to the tax credit or to be included in the deductible expenses under Article 57 (1) of the same Act: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8827, Dec. 31, 2007>1. It is required that the dividend or surplus should have been received from a country or an area with which Korea has concluded a tax agreement that does not adopt any system of indirect foreign tax deduction or with which Korea has not concluded any tax agreement yet; and2. It is required that the domestic corporation should have held stocks or equities in its foreign affiliated company for 6 or more consecutive months as of the date fixed for the dividend or allocation of surplus.(2) The corporation tax amount to be subjected to the tax credit or to be included in the deductible expenses under paragraph (1) shall be calculated as prescribed by Presidential Decree, which is equivalent to the paid dividend from among the foreign corporation taxes imposed on the incomes of a foreign affiliated company.(3) The amount equivalent to the foreign corporation taxes which are tax-deducted under the provisions of paragraphs (1) and (2) shall be the earnings under Article 15 of the Corporation Tax Act.[This Article Newly Inserted by Act No. 6762, Dec. 11, 2002]

(1) With respect to the urban reconstruction association authorized to be formed before June 30, 2003 under Article 44 (1) of the Housing Construction Promotion Act (referring to the Act prior to its amendment by Act No. 6852) and registered as a corporation under Article 18 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereafter in this Article, referred to as the “urban conversion and improvement work association”), the Income Tax Act shall, notwithstanding Article 2 of the Corporation Tax Act, apply by treating such association and its members as the place of joint business and the co-operators of business respectively under Articles 87 (1) and 43 (3) of the Income Tax Act: Provided, That the same shall not apply in cases the urban conversion and improvement work association files the tax base and tax amount of its income for the taxable year concerned with the head of the tax office having jurisdiction over the place of tax payment in accordance with Article 60 of the Corporation Tax Act.(2) With respect to the association formed pursuant to Article 18 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (including the urban conversion and improvement work association; hereafter in this Article, referred to as the “urban improvement work association”), the Corporation Tax Act (excluding the provisions of Article 29 of the same Act) shall, notwithstanding Article 1 of the Corporation Tax Act, apply by treating such association as a non-profit domestic corporation until the business year ending before December 31, 2010. In such cases, the urban conversion and improvement work association shall be only applicable in cases where it has been reported under the proviso to paragraph (1). <Amended by Act No. 9272, Dec. 26, 2008>(3) With respect to the lots and buildings (limited to those constructed by the execution of the urban improvement work concerned; hereafter in this Article, the same shall apply) which are, according to the prescribed management and disposition schedule, provided by the urban improvement work association to its members in return for their previous land, after such urban improvement work has been completed under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, the provision of such lots and buildings shall not be treated as the supply of goods under Article 6 of the Value-Added Tax Act.(4) In cases where the urban improvement work association has transferred to other persons the rights of ownership of all the lots and buildings constructed by such urban improvement work according to the prescribed management and disposition schedule and has alloted or delivered to another persons even the residual properties without paying national taxes along with additional charges or expenses for disposition on default, those persons to whom such residual properties were alloted or delivered shall, only if there is no sufficient amount collectable even by a disposition on default with respect to the urban improvement work association, bear the secondary taxpayer’s responsibility for the lacking portion of the total amount to be collected. In such cases, the secondary taxpayer’s responsibility shall be limited to as much as the price of such residual properties alloted or delivered to them.(5) In applying the provisions of paragraph (2), such matters as may be necessary concerning the scope of the works, etc. excluded from the application of taxable income under Article 3 of the Corporation Tax Act with respect to the urban improvement work association shall be determined by Presidential Decree.[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) If a taxpayer returns the tax base of the income tax or corporation tax as determined by Presidential Decree in the manner of a direct tax return by electronic method under Article 5-2 of the Basic Act for National Taxes (hereafter in this Article referred to as the “tax return by electronic method”), an amount determined by Presidential Decree shall be deducted from the payable tax amount. In this case, the negative payable tax shall be deemed nonexistent.(2) If a taxpayer returns the value-added tax as determined by Presidential Decree in the manner of a direct tax return by electronic method, an amount determined by Presidential Decree shall be either deducted from the payable tax amount or added to the refundable amount: Provided, That with respect to persons who is eligible for the simplified taxation provided for in Article 25 of the Value-Added Tax Act, when the deductible tax amount is in excess of an amount obtained by adding or subtracting the amount provided for in Articles 26 (3), 26-2 and 26-3 of the same Act to or from the payable tax amount, the excess amount shall be deemed nonexistent. <Amended by Act No. 7322, Dec. 31, 2004>(3) In cases where any certified tax accountant provided for in the Certified Tax Accountant Act (including any tax accounting corporation provided for in the Certified Tax Accountant Act and any accounting corporation provided for in the Certified Public Accountant Act; hereafter the same shall apply in this paragraph) has filed all the required tax returns under paragraphs (1) and (2) by electronic method during the immediate preceding taxable year on behalf of a taxpayer, an amount determined by Presidential Decree shall be deducted from the amount of income tax or corporation tax to be paid by the certified tax accountant concerned. <Amended by Act No. 7839, Dec. 31, 2005>[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) The tax base of the corporation tax for shipping enterprises (hereafter in this Article referred to as “shipping enterprises”) that run the ocean shipping business provided for in the Marine Transport Act and meet the requirements that are prescribed by Presidential Decree from among domestic corporations may be an amount obtained by adding up the amount that is computed according to the method falling under each of the following subparagraphs, not later than December 31, 2009: <Amended by Act No. 8146, Dec. 30, 2006>1. With respect to the income that is prescribed by the Presidential Decree as being accruing from ocean shipping activities (hereafter in this Article referred to as “shipping income”), the total amount of individual ship standard profit (hereafter in this Article referred to as the “standard ship profit”) that is computed by applying the following formula, notwithstanding the provisions of Articles 13 through 54 of the Corporation Tax Act:Standard individual ship profit = individual ship tonnage × the one-day shipping profit per ton × the number of navigation days × the use rate; and2. With respect to the income other than shipping income (hereafter in this Article referred to as the “non-shipping income”), an amount that is computed in accordance with Articles 13 through 54 of the Corporation Tax Act.(2) Any corporation that intends to make it applicable to the special case of computing the tax base for shipping enterprises referred to in paragraph (1) (hereafter in this Article referred to as the “special case of computing the tax base”) shall file an application for the application of the special case of computing the tax base under the conditions as prescribed by Presidential Decree and the corporation is required to keep it subject to the application of the special case of computing the tax base for 5 consecutive business years from the business year to which the special case of computing the tax base is applicable (hereinafter referred to as the “period for the application of the special case of computing the tax base”).(3) In the application of the provisions of paragraph (1), any loss incurred by the non-shipping income shall not be aggregated into the standard ship profit, and the spacial cases of taxation such as exclusion from taxation, the exemption of tax amount, the tax break amount, the tax credit or the income deduction, etc. provided for in this Act, the Basic Act for National Taxes, treaties and Acts provided for in each subparagraph of Article 3 (1) shall not apply to the shipping income.(4) In cases where any income withheld at source pursuant to Article 73 of the Corporation Tax Act is included in the shipping income, the amount of the withholding tax on such income shall not be deducted from the computed tax amount as the tax already paid in the Corporation Tax Act.(5) The deficit carried over that accrues prior to the application of the special case of computing the tax base shall not be deducted from the amount referred to in paragraph (1).(6) In cases where any corporation subject to the application of the special case of computing the tax base has failed to meet the requirements referred to in paragraph (1) for not less than 2 business years during the period for the application of the special case of computing the tax base, such corporation shall be excluded from the application of the special case of computing the tax base, starting with the business year during which such failure occurs twice, for the remaining period during which the special case of computing the tax base is applied and then for the next five business years. <Amended by Act No. 7839, Dec. 31, 2005>(7) In cases where any domestic corporation subject to the application of the special case of computing the tax base makes an interim tax prepayment pursuant to Article 63 (4) of the Corporation Tax Act, the tax base for such interim tax prepayment shall be an amount computed pursuant to the provisions of paragraphs (1) through (5) and the provisions of Article 63 (4) 1 and 2 of the same Act shall apply only to the part related to non-shipping income.(8) In the application of the provisions of paragraph (1), one navigation-day profit per ton shall be determined by Presidential Decree within the scope of not exceeding 30 won per ton of ship taking into account the tonnage of ship, the income of shipping enterprises, the payment records of the corporation tax and the examples of foreign operations, etc.(9) The method of computing the standard individual ship profit, including the number of navigation days, the usage rate, etc., the method of computing the income of each business year to which the special case of computing the tax base is not applicable but the Corporation Tax Act is applicable, the method of performing separate accounting, and other matters concerning the application of the special case of computing the tax base, etc. shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) In cases where a financial institution receives back its residual property from a Non-performing Loan Resolution Fund not later than December 31, 2009 in accordance with the proviso to Article 2 (5) of the Addenda of the Act on the Efficient Disposal of Non-performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation (Act No. 5371) and then intends to acquire stocks by investing it in a corporation prescribed by the Minister of Strategy and Finance as having purposes of supporting rehabilitation of the financially marginalized until the end of the next business year of the business year to which the date of receiving such refund belongs, the amount to be invested from among the refund amount shall be included in deductible expenses when calculating the income amount in the business year to which the date of receiving such refund belongs. In such cases, the amount shall be appropriated to advanced depreciation allowance of the relevant stocks.(2) The advanced depreciation allowance appropriated pursuant to paragraph (1) shall be included in the gross income in whole in the business year to which the date when the relevant stocks are disposed of (in cases where there is any stock acquired through other methods other than the stocks acquired using the refund amount under paragraph (1), it shall be deemed that the stocks acquired using the refund amount under paragraph (1) have been disposed earlier than others) or the relevant corporation is dissolved belongs, but, in case of partial disposal of stocks, an amount calculated based on the following formula shall be included in the gross income: Advanced depreciation allowance
×
The number of stocks disposed from among the stocks acquired using the refund amount under paragraph (1)
The number of stocks acquired using the refund amount under paragraph (1)
(3) Where a financial institution which has included the amount to be invested pursuant to paragraph (1) in the deductible expenses fails to make contributions, or closes or dissolves its business, the amount failed to be contributed shall be included in the gross income when calculating the income amount of the business year to which the date when such reasons occurs belongs, and in such cases, Article 9 (4) shall apply mutatis mutandis to the amount to be paid as corporation tax: Provided, That in case of merger or split-off, when a merger survived after a merger or split or a corporation subject to split-off (hereafter referred to as “merger corporation, etc.” in this paragraph) succeeds to the amount failed to be contributed, such amount shall be excluded, and in such cases, the amount shall be deemed to have been included in the deductible expenses by the merger corporation, etc. pursuant to paragraph (1).(4) A financial institution which intends to be governed by paragraph (1) shall submit a tax base return on corporation tax of the relevant taxable year to the head of the tax office having jurisdiction over the place of tax payment, accompanying with plans for contribution of refund amount from a non-performing loan resolution fund.[This Article Newly Inserted by Act No. 9512, Mar. 25, 2009]

(1) In cases where there is a house or a parcel of land (hereafter referred to as “subject house or land” in this Article) owned by an individual Confucian school or an individual religious organization prescribed by Presidential Decree (hereafter referred to as an “individual organization” in this Article), but registered on or before January 4, 2005 in the name of a Confucian school foundation under the Properties of Confucian Schools Act or a religious organization prescribed by Presidential Decree (hereafter referred to as the “Confucian school foundation, etc.” in this Article), to which the individual organization belongs, without an intention to evade a tax among the houses or parcels of land owned by such individual organization, the individual organization that actually owns the subject house or land may be regarded as the person who owes the duty to pay the property tax for the portions of both house and land as of the tax base date and thus may file a return on the comprehensive real estate holding tax for such property, notwithstanding Articles 7 (1) and 12 (1) of the Comprehensive Real Estate Holding Tax Act. In this case, the subject house or land shall be deemed as owned by the individual organization only for the purposes of taxation of the comprehensive real estate holding tax.(2) In cases where an individual organization files a return on the comprehensive real estate holding tax under paragraph (1), the Confucian school foundation, etc. shall have the duty to pay the comprehensive real estate holding tax jointly with the individual organization within the limit of the official announced value of the subject house or land.(3) In cases where an individual organization files a return on the comprehensive real estate holding tax under paragraph (1), it shall be deemed that the Confucian school foundation, etc. does not own the subject house or land in filing a return on the comprehensive real estate holding tax.(4) The methods of calculation, filing a return, and payment of the comprehensive real estate holding tax under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where the third party distribution expense out of the distribution expense spent by a national who engages in a manufacturing business and satisfies all the following requirements for each taxable year until the taxable year that ends on or before December 31, 2010 exceeds the third party distribution expense spent for the immediately preceding taxable year, the income tax (limited to the income tax levied on business income) or the corporation tax shall be reduced by an amount equivalent to 25/1,000 (3/100 until the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the excess amount: Provided, That the tax credit shall not exceed 10/100, in cases where the reduced amount exceeds 10/ 100 of the income tax or the corporation tax for the pertinent taxable year: <Amended by Act No. 9272, Dec. 26, 2008>1. The third party distribution expense spent for each taxable year shall be 50/100 or more of the distribution expense spent for each taxable year; and2. The ratio of the third party distribution expense to the distribution expense spent for the pertinent taxable year shall not be lower than the ratio for the immediately preceeding taxable year.(2) In cases where the third party distribution expense out of the distribution expense spent for the pertinent taxable year, to which paragraph (1) becomes applicable for the first time, exceeds 50/100, the income tax (limited to the income tax levied on business income) or the corporation tax shall be reduced by an amount equivalent to 25/1,000 (3/100 until the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the excess amount: Provided, That the tax credit shall not exceed 10/100 of the income tax or the corporation tax, in cases where the reduced amount exceeds 10/100. <Amended by Act No. 9272, Dec. 26, 2008>(3) A national who desires to become eligible for the special credit under paragraph (1) shall file an application for the tax credit as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a business operator specializing in development of overseas resources under subparagraph 4 of Article 2 of the Overseas Resources Development Business Act (hereafter referred to as an “overseas resources development business operator” in this Article) makes any of the following investments or contributions on or before December 31, 2010 in order to develop mineral resources, the income tax (limited to the income tax levied on business income) or the corporation tax shall be reduced by an amount equivalent to 25/1,000 (3/100 until the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the invested or contributed amount: Provided, That the same shall not apply in cases where such investment or contribution is made through acquiring invested assets or equity shares of a national or a foreign affiliated company of a national (referring to a foreign corporation of which a national directly invests in 100/100 of total outstanding stocks or contributes to 100/100 of total equity capital; hereafter the same shall apply in this Article): <Amended by Act No. 9272, Dec. 26, 2008>1. Investment for acquiring a mining concession and a mining right by lease;2. Investment for acquiring a mining concession or a mining right, which involves contribution to a foreign corporation prescribed by Presidential Decree; and3. Direct overseas investment in a foreign affiliated company of a national, which is prescribed by Presidential Decree pursuant to Article 3 (1) 16 (a) of the Foreign Exchange Transactions Act: Provided, That the same shall apply only in cases where the foreign affiliated company of the national acquires a mining concession or a mining right by lease in the manner set forth in subparagraphs 1 and 2.(2) In cases where a person who has had the tax deduction pursuant to the main sentence other than the subparagraphs of paragraph (1) falls under any of the following subparagraphs, he shall pay the income tax or the corporation tax with an amount equivalent to the reduced tax amount and an additional amount equivalent to the interest for the tax credit given for the relevant investment or contribution, as calculated by a formula prescribed by Presidential Decree, at the time of tax base return for the taxable year to which the date when such a reason has arisen belongs. In such cases, such tax amount shall be deemed as the one payable under Article 76 of the Income Tax or Article 64 of the Corporation Tax Act: <Amended by Act No. 9272, Dec. 26, 2008>1. In cases where assets invested or stakes invested under the subparagraphs of paragraph (1) are transferred or withdrawn before five years have passed from the date of investment or date of contribution; and2. In cases where a mining right or a mining right by lease is not acquired until the date when three years have passed from the date of investment or the date of contribution.(3) A person who desires to become eligible for the special taxation under paragraph (1) shall file an application for the tax credit as prescribed by Presidential Decree.(4) In cases where an overseas resources development business operator acquired stocks or equity shares as a direct overseas investment under Article 3 (1) 16 of the Foreign Exchange Transactions Act with a subsidy granted pursuant to the Act on the Special Accounts for Energy and Resources-related Projects, such stocks or equity shares shall be deemed as business assets under Article 36 (1) of the Corporation Tax and may be included in the deductible expenses, applying the same Article mutatis mutandis.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where an educational foundation under the Higher Education Act transfers any of its primary assets for profit-making prescribed by Presidential Decree (hereinafter referred to as “primary assets for profit-making”) to someone else on or before December 31, 2010 and acquires another primary assets for profit-making within one year from the date of transfer, an amount calculated by the formula prescribed by Presidential Decree out of the margin gained from the transfer of the previously-owned primary assets for profit-making may not be included in the gross income in calculating its income for the pertinent business year. In such cases, such amount shall be included in the gross income in equal installments or more over the period of three business years, beginning on the business year on which the third anniversary of the end of the business year in which such transfer was made falls.(2) In cases where an educational foundation benefited from the special taxation under paragraph (1) but has not acquired another primary asset for profit-making, an amount calculated by Presidential Decree shall be included in the gross income in calculating its income for the business year in which such cause occurred. In such cases, the latter part of Article 33 (3) shall apply mutatis mutandis to the amount that shall be included in the gross income.(3) In the application of paragraphs (1) and (2), the matters concerning the submission of a statement of transfer margin and other necessary matters shall be prescribed by Presidential Decree.(4) An amount contributed by a corporation, which was established with a fund fully contributed by an educational foundation under the Higher Education Act, to the educational foundation on or before December 31, 2010, shall be included in the deductible expenses within the limit of an amount calculated by subtracting the amount of subparagraph 2 from that of subparagraph 1:1. The amount of income for the pertinent business year (referring to the amount of income before the donation under Article 24 of the Corporation Tax Act are included in the deductible expenses); and2. The aggregate of deficits under subparagraph 1 of Article 13 of the Corporation Tax Act and the aggregate of the donations under Article 24 of the same Act and the donations under Article 73 of this Act.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a financial institution contributes dormant deposit to the Micro-finance Foundation pursuant to Article 21 of the Establishment. etc. of Micro-finance Foundation Act by December 31, 2008, such amount of contribution shall be included in deductible expenses when calculating the amount of income in the relevant taxable year.(2) A financial institution who intends to be governed by paragraph (1) shall submit a detailed statement of contribution of dormant deposit prescribed by Ordinance of the Ministry of Strategy and Finance together with report of tax base of the corporation tax in the relevant taxable year.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) In cases where a school under Article 2 of the Higher Education Act (hereafter in this Article referred to as “schools”) establishes and operates vocational education and training curricula or a department according to a contract with a national pursuant to Article 8 of the Promotion of Industrial Education and Industry-Academic Cooperation Act and the relevant national pays expenses (hereafter in this Article referred to as “specific educational expenses”) as its operation expenses, Article 10 shall apply mutatis mutandis. In such cases, “research and human resources development expenses” shall be deemed “specific educational expenses”.(2) In cases where a national contributes facilities for research and human resources development prescribed by Presidential Decree, Article 11 shall apply mutatis mutandis.(3) When applying paragraphs (1) and (2), in cases where a national pays or contributes to a school located in Seoul Metropolitan area, it shall be deemed that he has paid or contributed an amount multiplied by 50/100 of the relevant amount.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) It shall be deemed that land for which a business plan is to be approved under the Housing Act within five years from the date of its acquisition from among the land which any housing construction business operator who made registration of a housing construction business operator pursuant to Housing Act (including a housing association under Article 32 of the Housing Act, a main body of business who is an employer and a project undertaker under the provisions of Articles 7 through 9 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents; hereinafter referred to as a “housing construction business operator”) has acquired for construction of housing is not included in the scope of land subject to adding up to tax base under Article 13 (1) of the Comprehensive Real Estate Holding Tax Act.(2) Any person who intends to be governed by paragraph (1) shall make a report of the present status of possession of land to the head of a tax office having jurisdiction over the place of tax payment from September 16 to September 30 of the relevant year as prescribed by Presidential Decree.(3) In cases where a housing construction business operator has failed to obtain approval for a business plan under the Housing Act for housing construction under the same Act within five years from the date when he has acquired land pursuant to paragraph (1), a comprehensive real estate holding tax amount and an additional amount equivalent to interest shall be additionally collected as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) A zero tax rate shall, as prescribed by Presidential Decree, apply to the value-added tax on the provision of goods or services falling under any of the following subparagraphs. In such cases, subparagraphs 3 and 3-2 shall apply only to goods or services provided not later than December 31, 2009, and subparagraphs 5 and 6, only to those provided not later than December 31, 2011: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6708, Aug. 26, 2002; Act No. 7003, Dec. 30, 2003; Act Nos. 7311 & 7322, Dec. 31, 2004; Act No. 7577, Jul. 13, 2005; Act No. 7839, Dec. 31, 2005; Act No. 7845, Jan. 2, 2006; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Supplies of the defense industry (including those used for operational purposes by the police) under the Defense Acquisition Program Act that are furnished by defense contractors designated under the abovementioned Act, the test products produced and supplied by an individual designated as a person under priority management under the Emergency Resources Management Act, and services provided through the mobilization of resources;2. Petroleum products supplied to the military units and organizations established under the Act on the Organization of National Armed Forces;3. Urban railway construction services that are furnished directly to the person falling under any of the following items:(a) The State or local governments;(b) The Urban Railroad Corporation subject to the application of the Urban Railroad Act (limited to the cases where urban railroads can be constructed under the Municipal Ordinance of a local government);(c) Deleted; <by Act No. 7601, Jul. 13, 2005>(d) The Korea Rail Network Authority under the Korea Rail Network Authority Act; and(e) Any project undertaker under subparagraph 7 of Article 2 of the Act on Private Participation in Infrastructure;3-2. Infrastructure facilities and construction services that are installed and rendered by any project undertaker under subparagraph 7 of Article 2 of the Act on Private Participation in Infrastructure to the State or any local government in a manner under subparagraphs 1 through 3 of Article 4 of the same Act in order that such undertaker intends to run the business on which the value-added tax is levied;4. Protection appliances for disabled persons, special information and communication devices for disabled persons, and the special applications software determined by Presidential Decree which is necessary for the use of information and communication devices by disabled persons;5. Machinery or materials for agriculture, livestock industry, or forestry which are supplied to farmers and persons engaged in forestry as determined by Presidential Decree (including those supplied by cooperatives and their federation established under the Agricultural Cooperatives Act, the Tobacco Producers Cooperatives Act, or the Forestry Cooperatives Act) and which fall under any of the following items:(a) Fertilizers under the Fertilizer Control Act as determined by Presidential Decree;(b) Agricultural chemicals under the Agrochemicals Control Act as determined by Presidential Decree;(c) Farming machines as determined by Presidential Decreewhich may supplement insufficient manpower in agricultural villages and contribute to the increase of agricultural productivity;(d) Machinery and materials for livestock industry as determined by Presidential Decree which may supplement insufficient livestock industry manpower and contribute to improvement in the productivity of livestock industry;(e) Animal feed under the Control of Livestock and Fish Feed Act (excluding the animal feed exempted from the value-added tax under Article 12 of the Value-Added Tax Act);(f) Machinery and materials for forestry as determined by the Presidential Decree which may contribute to the protection and promotion of development of forests; and(g) Machinery and materials used to produce environment-friendly farm commodities provided for in the Environment-Friendly Agriculture Fosterage Act, which are prescribed by Presidential Decree; and6. Fishing machinery and materials falling under any of the following items which are designed to be used in both coastal or inshore fishing and inland water fishing and supplied to fishermen as determined by Presidential Decree (including those supplied by cooperatives and fishing village mutual savings clubs established under the Fisheries Cooperatives Act, and by cooperatives and their federation established under the Agricultural Cooperatives Act):(a) Fish feed under the Control of Livestock and Fish Feed Act (excluding the fish feed exempted from the value-added tax under Article 12 of the Value-Added Tax Act); and(b) Other items as determined by Presidential Decree.(2) In case where any person other than the farmers referred to in other portions than each item of paragraph (1) 5, has been provided with the machinery and materials and animal feed for the livestock industry under items (d) and (e) of the same subparagraph (hereafter in this paragraph referred to as the “machinery and materials for the livestock industry, etc.”) under unjustifiable application of the zero tax rate to the value-added tax, the head of competent tax office shall additionally collect from the person provided with such machinery and materials for the livestock industry, etc. the value-added tax amount equivalent to 10/100 of the supply price of such machinery and materials for the livestock industry, etc. and the additional tax equivalent to 10/00 of such tax amount. <Newly Inserted by Act No. 6762, Dec. 11, 2002>

(1) The head of tax office falling under any of the following subparagraphs (hereafter in this Article referred to as the “head of competent tax office”) may, with respect to the machinery and materials purchased by the farmers and fishermen as prescribed by Presidential Decree (hereafter in this Article referred to as the “farmers and fishermen”) for using in the farming or fishing industry (limited to the machinery and materials to be bought from the general taxable persons under Article 3 (4) of the Value-Added Tax Act) as prescribed by Presidential Decree, refund the amount of value-added tax charged at the time of purchasing the machinery and materials to the relevant farmers or fishermen under the conditions as prescribed by Presidential Decree:1. Where an application for refund is made through an agent for refund under paragraph (3), the head of tax office having jurisdiction over the business place of the agent for refund; and2. In other cases than subparagraph 1, the head of tax office having jurisdiction over the business place of the relevant farmers or fishermen.(2) The general taxable persons providing the machinery and materials under paragraph (1) shall, notwithstanding the provisions of Article 32 of the Value-Added Tax Act, issue a tax invoice when the farmers and fishermen who purchase the relevant machinery and materials request such issuance.(3) Any farmers and fishermen who intend to receive the refund under paragraph (1) shall file an application for refund through persons falling under any of the following subparagraphs (hereafter in this Article referred to as the “agent for refund”): Provided, That those as prescribed by Presidential Decree may file an application for refund directly with the head of tax office having jurisdiction over the business place: <Amended by Act No. 7311, Dec. 31, 2004>1. Cooperatives under the Agricultural Cooperatives Act;2. Cooperatives under the Fisheries Cooperatives Act; and3. Tobacco producers cooperatives under the Tobacco Producers Cooperatives Act.(4) The agent for refund shall, where a person applying for refund falls under any of the following subparagraphs, notify the head of competent tax office thereof:1. Where deemed that he is not a farmer or fisherman; and2. Where deemed that an application for refund is made by false or other illegal methods when taking account of the cultivated area or the size of facilities of a farmer or fisherman.(5) The head of competent tax office shall, where a person who has received a refund of value-added tax under paragraph (1) falls under any of the following subparagraphs, additionally collect as the value-added tax the relevant refunded value-added tax and the additional amount equivalent to the interest as calculated under the conditions as prescribed by Presidential Decree:1. Where farmers and fishermen fail to use the machinery and materials for which the value-added tax amount has been refunded under paragraph (1) for the original purposes or transfer them to other people than the farmers or fishermen;2. Where farmers and fishermen have received a refund of value-added tax with a tax invoice falling under any of the following items:(a) A tax invoice issued without any provision of goods;(b) A tax invoice issued in the name of other business place than that of providing the goods;(c) A tax invoice issued after the taxable period whereto belongs the period for providing the goods;(d) A tax invoice amended at will by the relevant farmers or fishermen which has been justifiably issued; and(e) Other tax invoices as prescribed by Presidential Decree indicating differently from the fact; and3. Where persons who do not correspond to farmers or fishermen have received a refund of value-added tax under paragraph (1).(6) The head of competent tax office shall, where the provisions of paragraph (5) 3 are applied as an agent for refund fails to notify under paragraph (4), collect from the relevant agent for refund the amount equivalent to 10/100 of refunded tax amount as a penalty tax.(7) No farmer or fisherman shall, where he falls under any of the following subparagraphs, be entitled to receive a refund under paragraph (1) for 2 years from the date of notifying the additional tax amount satisfying the relevant requirements:1. Where any value-added tax has been additionally collected for 3 or more times within the latest 2 years under paragraph (5); and2. Where the total amount of additionally collected tax amounts under paragraph (5) is not less than 2 million won, which exceeds the amount as prescribed by Presidential Decree.(8) The agent for refund may, in relation to the proxy of refund of value-added tax, collect the amount as prescribed by Presidential Decree as the fees from persons receiving the refund in order to appropriate it for the preparation and submission of a written application for refund, keeping the ledger for refund management, distribution of refunded money, etc.(9) Matters necessary for the refund procedures, documents to be submitted, etc. in applying the provisions of paragraphs (1) through (8) shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6538, Dec. 29, 2001]

(1) The value-added tax on the provision of goods or services falling under any of the following subparagraphs shall be exempted. In such cases, the provisions of subparagraphs 1 through 3 and 9 shall apply only to the portion that is supplied on or before December 31, 2009, subparagraphs 4-2 and 11 shall apply only to the portion that is supplied on or before December 31, 2011 and the provisions of subparagraph 8 shall apply only to the portion for which an implementation agreement is concluded on or before December 31, 2010: <Amended by Act No. 5980, Apr. 30, 1999; Act No. 5996, Aug. 31, 1999; Act Nos. 6297 & 6305, Dec. 29, 2000; Act No. 6480, May 24, 2001; Act No. 6708, Aug. 26, 2002; Act No. 6916, May 29, 2003; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 8852, Feb. 29, 2008; Act No. 9272, Dec. 26, 2008>1. Petroleum products supplied directly to the National Federation of Fisheries Cooperatives established under the Fisheries Cooperatives Act in order to be used for such independent power generation for the remote island areas as verified by the Minister of Knowledge Economy (including an agency given the delegation of authority under Article 98 of the Electric Utility Act) to which the electricity business operator under Article 2 of the same Act is unable to supply electricity or finds it difficult to supply electricity for a considerable period of time;2. Food services (limited to meals) provided by the operator of a business place prescribed by Presidential Decree, such as factories, mines, construction sites, and the places similar thereto, or of a school under Article 2 of the Elementary and Secondary Education Act or Article 2 of the Higher Education Act (hereafter referred to as a “business place, etc.” in this subparagraph) through direct operation of a dining hall within the premises of the business place, etc., for the purpose of the welfare of its employees or students; or food services (limited to meals) supplied by a school meal supplier entrusted by the head of a school falling under any subparagraph of Article 4 of the School Meals Act directly to the school concerned in a manner of the entrusted meal service under Article 10 of the same Act. In such cases, such matters as may be necessary concerning the exemption from the value-added tax on entrusted meal service, such as the certification of the supply price of entrusted meal service, etc. shall be prescribed by Presidential Decree;3. Management of agriculture or fisheries, and services for farming or fishing operation, executed vicariously as prescribed by Presidential Decree;4. National housing prescribed by Presidential Decree and services for the construction thereof (including the remodelling services prescribed by Presidential Decree);4-2. General management services, security services and cleaning services prescribed by Presidential Decree supplied to housing other than national housing from among the apartment housing under subparagraph 2 of Article 2 of the Housing Act by a main body of management under subparagraph 12 of Article 2 of the Housing Act (excluding item (a) of the same subparagraph; hereafter in this Article referred to as a "main body of management"), a corporation that obtained permission of security services business under Article 4 (1) of the Security Services Industry Act (hereafter in this Article referred to as a "security services business operator") or a person who has made a report of sanitary management services business pursuant to Article 3 (1) of the Public Health Control Act (hereafter in this Article referred to as a "cleaning business operator);4-3. General management services, security services and cleaning services prescribed by Presidential Decree supplied to national housing from among the apartment housing under subparagraph 2 of Article 2 of the Housing Act by a main body of management, a security services business operator or a cleaning services business operator;4-4. Deleted; <by Act No. 7003, Dec. 30, 2003>5. Deleted; <by Act No. 6045, Dec. 28, 1999>6. Goods and services determined by Presidential Decree which are supplied by an organization performing governmental affairs determined by Presidential Decree on behalf of the Government;7. Railroad facilities under subparagraph 2 of Article 3 of the Framework Act on the Development of Railroad Industry (hereafter in this subparagraph referred to as “railroad facilities”) which the Korea Rail Network Authority under the Korea Rail Network Authority Act reverts to the State and then supplies the State by means of establishing its right to manage such railroad facilities pursuant to Article 26 of the same Act;8. A right to management and operation of facilities provided by a school in relation to the school facilities (limited to the school facilities under Article 2 of the Higher Education Act) built by applying mutatis mutandis the method prescribed in subparagraph 1 of Article 4 of the Act on Private Participation in Infrastructure and held by a person recommended by either the Minister of Education, Science and Technology or his designee, and services provided by the person so recommended, using such school facilities;9. Buses supplied for the purposes of urban bus transportation and village shuttle service under the Passenger Transport Service Act, which use natural gas as their fuel;10. Articles used for the treatment of rare diseases which belong to the items under subparagraphs 4 and 5 of Article 91 of the Customs Act and which are determined by Presidential Decree; and11. Diapers and powdered milk for infants (excluding those exempt from value-added tax pursuant to Article 12 of the Value-Added Tax Act).(2) Import of goods falling under any of the following subparagraphs shall be exempted from value-added tax. In such cases, subparagraphs 9 and 10 shall apply to goods only an import declaration of which is filed not later than December 31, 2011, subparagraph 11 shall apply to goods only an import declaration of which is filed not later than December 31, 2012, and subparagraph 12 shall apply to goods only an import declaration of which is filed not later than December 31, 2014: <Amended by Act No. 6136, Jan. 12, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>1. Anthracite coal;2. Deleted; <by Act No. 6538, Dec. 29, 2001>3. Ships to be used for taxable businesses;4. Bonded warehouse construction articles under the Customs Act to be used for taxable businesses;5. and 6. Deleted; <by Act No. 7003, Dec. 30, 2003>7. and 8. Deleted; <by Act No. 6297, Dec. 29, 2000>9. Machinery and materials used for agricultural or livestock industry directly imported by farmers under subparagraph 5 of Article 105, and machinery and materials used for fishing industry directly imported by fishermen under subparagraph 6 of Article 105, which are determined by Presidential Decree; and10. Goods to be used for production and construction of athletic facilities and for athletic management of the 13th IAAF World Championships in Athletics to be held in 2011 by the Organizing Committee of the 13th IAAF World Championships in Athletics-Daegu 2011 or the local government, but domestic production of which is difficult;11. Goods to be used for production and construction of facilities related to the EXPO Yeosu Korea to be held in 2012 and for management of the EXPO by the Organizing Committee of the EXPO 2012 Yeosu Korea, but domestic production of which is difficult; and12. Goods to be used for production and construction of athletic facilities and for athletic management of the 17th Asian Games to be held in 2014 by the Organizing Committee of the Asian games-Incheon 2014 or the local government, but domestic production of which is difficult.(3) Deleted. <by Act No. 9272, Dec. 26, 2008>(4) Deleted. <by Act No. 9272, Dec. 26, 2008>(5) The provisions of Article 25 (1) 1 of the Value-Added Tax Act shall not apply to the private taxicab business, the delivery and individual trucking business, the road trucking business, the barbering business, the beauty art business and other businesses prescribed by Presidential Decree as being similar thereto, to which the simplified taxation of the value-added tax is applied. <Newly Inserted by Act No. 7322, Dec. 31, 2004>

(1) Among the following petroleum products (referring to the petroleum products under the Petroleum and Petroleum Substitute Fuel Business Act; hereafter referred to as “tax-free petroleum” in this Article), the value-added tax on the supplies delivered on or before June 30, 2012 and the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax on the supplies released from a manufacturing place or a bonded area on or before the afore-stated date shall be reduced or exempted as prescribed by Presidential Decree, while the value-added tax on the supplies delivered during the period of time between July 1, 2012 and December 31, 2012 and the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax on the supplies released from a manufacturing place or a bonded area during the afore-stated period of time shall be abated by 75/100 of each tax under the conditions as prescribed by Presidential Decree:1. Petroleum products required by a farmer, a forestry person, or a fishery person specified by Presidential Decree (hereafter referred to as “farmer, forester, or fisher” in this Article) for the purposes of agriculture, forestry, or fisheries, which are prescribed by Presidential Decree; and2. Petroleum products supplied directly to the Korea Shipping Association established pursuant to the Korea Shipping Association Act for the use in passenger ships operating on coastal waters.(2) In cases where certain petroleum products delivered to a petroleum distributor (hereafter referred to as a “petroleum distributor” in this Article) prescribed by Presidential Decree, including a gas station, with the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax already levied thereon and supplied to a farmer, forester, or fisher falls under paragraph (1) 1, the petroleum distributor may file an application under the conditions as prescribed by Presidential Decree to have the refund of the tax amount otherwise exempted or have the tax amount payable or collectible reduced by the amount.(3) A farmer, forester, or fisher who desires to have tax-free petroleum supplied shall file a report on the current status of agricultural machines, forestry machines, or ships and facilities prescribed by Presidential Decree in possession (hereafter referred to as “agricultural machines, etc.” in this Article) and the fact that the person has engaged in agriculture, forestry, or fisheries, under the conditions as prescribed by Presidential Decree, with a cooperative under the Agricultural Cooperatives Act, a cooperative under the Forestry Cooperatives Act, or a cooperative under the Fisheries Cooperatives Act (hereafter referred to as a “cooperative acting as an institution responsible for control of tax-free petroleum” in this Article), and shall also file a report on a change within thirty days from the day on which such a change occurs, if any change in the reported matters occurs, such as the acquisition or transfer of an agricultural machine, etc., the death of the farmer, forester, or fisher, and giving up the agricultural, forestry, or fishery business.(4) A farmer, forester, or fisher who desires to have tax-free petroleum supplied shall obtain a card for purchasing tax-free petroleum or a delivery order prescribed by Presidential Decree and issued by a cooperative acting as an institution responsible for control of tax-free petroleum (hereafter referred to as “tax-free petroleum purchase cards, etc.” in this Article).(5) A farmer, forester, or fisher who intends to use tax-free petroleum for agricultural machines, etc. shall comply with the following provisions:1. In cases where any agricultural machine or ship specified by Presidential Decree is used, a device prescribed by Presidential Decree shall be installed thereon to make it possible to check the consumption, and shall submit the documents prescribed by Presidential Decree to make it possible to check the consumption; and2. In cases where any agricultural machine specified by Presidential Decree or a facility for agriculture or fishery is used, the documents prescribed by Presidential Decree shall be submitted to make it possible to check the outcome of production and other matters.(6) Every cooperative acting as an institution responsible for control of tax-free petroleum shall issue tax-free petroleum purchase cards, etc., taking into consideration the current status of agricultural machines, etc. possessed by farmers, foresters, or fishers, and the business size of agriculture, forestry, or fisheries.(7) The National Agriculture Cooperative Federation under the Agricultural Cooperatives Act, the National Forestry Cooperatives Federation under the Forestry Cooperatives Act, and the National Federation of Fisheries Cooperatives (hereafter referred to as the “national federations acting as institutions responsible for control of tax-free petroleum” in this Article) may, if necessary for carrying out the control of tax-free petroleum efficiently and preventing illegal distribution, designate petroleum distributors who are allowed to sell tax-free petroleum to farmers, foresters, or fishers, upon receiving an application from each petroleum distributor, under the conditions as prescribed by the Presidential Decree.(8) The national federations and cooperatives acting as institutions responsible for control of tax-free petroleum (hereafter referred to as “institutions responsible for tax-free petroleum” in this Article) may disclose the details of tax-free petroleum supplied to farmers, foresters, and fishers through their Internet homepages.(9) If it is discovered that a farmer, forester, or fisher to whom tax-free petroleum had been supplied by a tax-free petroleum purchase cards, etc. issued under paragraph (4) used it for any purpose other than agriculture, forestry, or fishery, the head of the competent tax office shall impose the aggregate of the amounts calculated according to the following subparagraphs on such a person additionally:1. The tax amount abated or exempted from the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax; and2. The additional tax equivalent to 40/100 of the abated or exempted tax amount under subparagraph 1.(10) A farmer, forester, or fisher (including the spouse and lineal ascendants and descendants who engage in production activities and make a living jointly and together with the farmer, forester, or fisher) shall, if he falls under any of the following subparagraphs, be banned from using tax-free petroleum for two years from the day on which the relevant facts are known to an institution responsible for control of tax-free petroleum:1. If he files a report under paragraph (3) by falsity or in any other fraudulent way or fails to file a report on a change;2. If he transfers the tax-free petroleum purchase card, etc. issued under paragraph (4) or the petroleum products supplied by such tax-free petroleum purchase card, etc. to other persons; and3. If there occurs a cause to impose the abated or exempted tax amount additionally pursuant to paragraph (9).(11) The head of the competent tax office shall, if a cooperative acting as an institution responsible for control of tax-free petroleum falls under subparagraph 1, levy on the cooperative an amount equivalent to 40/100 of the tax amount abated or exempted from the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax on the petroleum products as an additional tax or shall, if such cooperative falls under subparagraph 2, levy on the cooperative an amount equivalent to 20/100 of the tax amount abated or exempted from the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax on the petroleum products as an additional tax:1. If it issues a tax-free petroleum purchase card, etc. by falsity or in a fraudulent way; and2. If it mistakenly issues a tax-free petroleum purchase card, etc. to a farmer, forester, or fisher without examining the relevant documentary evidence or due to its poor management or issues a tax-free petroleum purchase card, etc. to any person who is not a farmer, forester, or fisher.(12) In cases where any person who is not a farmer, forester, or fisher has been issued a tax-free petroleum purchase card, etc. pursuant to paragraph (4) or has taken over the petroleum products supplied to a farmer, forester, or fisher by a tax-free petroleum purchase card, etc., or a tax amount to be repaid or deducted which a petroleum sales business operator has applied for pursuant to paragraph (2) exceeds a tax amount to be repaid or deducted which he is to apply for, the head of the competent tax office shall levy an amount calculated according to the following subparagraphs additionally on the person: <Amended by Act No. 9272, Dec. 26, 2008>1. The aggregate of amounts calculated according to the following items, in cases where the person has a tax-free petroleum purchase card, etc. issued from a cooperative acting as an institution responsible for control of tax-free petroleum or acquires a tax-free petroleum purchase card, etc. from a farmer, forester, or fisher:(a) An amount equivalent to the tax amount abated or exempted from the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax payable, if the person has the petroleum products supplied by the tax-free petroleum purchase card, etc. at the time of issuance or acquisition of such card, etc.;(b) The additional tax amounting to 40/100 of the tax amount abated or exempted under item (a); and2. The aggregate of amounts calculated according to the following items, in cases where the person acquires the petroleum products supplied to a farmer, forester, or fisher by a tax-free petroleum purchase card, etc.: and(a) The tax amount abated or exempted from the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax on the petroleum products; and(b) The additional tax amounting to 40/100 of the tax amount abated or exempted under item (a).3. In cases where a tax amount to be repaid or deducted which a petroleum sales business operator has applied for pursuant to paragraph (2) exceeds a tax amount to be repaid or deducted which he is to apply for, the total amount obtained by adding up amounts under the following items: Provided, That item (b) shall only apply in cases where an application is made by an unjust method:(a) A tax amount reduced of or exempted from value-added tax, individual consumption tax and traveling tax for the relevant petroleum products; and(b) An additional tax amount equivalent to 40/100 of a tax amount reduced or exempted pursuant to item (a).(13) In cases where there occurs a cause to levy the abated or exempted tax amount under paragraph (12) additionally on a petroleum distributor, any national federation acting as an institution responsible for control of tax-free petroleum concerned may revoke the designation of the petroleum distributor, under which the distribution of tax-free petroleum was allowed, and the petroleum distributor whose designation is revoked shall be banned from distributing tax-free petroleum for three years from the revocation date of the designation.(14) In cases where a petroleum distributor on whom there occurs a cause to levy the abated or exempted tax amount additionally under paragraph (12) transfers his petroleum distribution business completely or is dead, or in cases where a petroleum distributor that is a corporation is merged with another petroleum distributor, paragraph (13) shall also apply to the transferee, successor, or the corporation surviving the merger or newly established as a consequence of the merger: Provided, That the same shall not apply in cases where such transferee or corporation proves that the transferee or corporation did not know that there had occurred such cause to levy the abated or exempted tax amount on the former petroleum distributor additionally.(15) The annual maximum quantity of each petroleum product under paragraph (1) 1 shall be determined by the Minister of Strategy and Finance, upon the application by the Minister for Food, Agriculture, Forestry and Fisheries or the Minister of the Korea Forest Service. <Amended by Act No. 8852, Feb. 29, 2008>(16) Every national federation acting as an institution responsible for control of tax-free petroleum shall ensure to issue tax-free petroleum purchase cards, etc. under paragraph (4) and control the use of them within the limit of the annual maximum quantity of petroleum products under paragraph (15) (hereafter referred to as the “annual maximum quantity of tax-free petroleum products” in this paragraph), and the head of the competent tax office shall, if the tax-free petroleum purchase cards, etc. so issued have caused the supply of the petroleum products under paragraph (1) 1 to exceed the annual maximum quantity of tax-free petroleum products, assume that the petroleum products that exceed the annual maximum quantity of tax-free petroleum products have been supplied to any national federation acting as an institution responsible for control of tax-free petroleum products, and shall levy the tax amount abated or exempted from the value-added tax, the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax on the national federation acting as an institution responsible for control of tax-free petroleum products.(17) Any cooperative under the Agricultural Cooperatives Act may charge an amount prescribed by Presidential Decree, as a fee, on the persons to whom tax-free petroleum purchase cards, etc. are issued to appropriate the fee for the expenses required for issuing tax-free petroleum purchase cards, etc., keeping control books, electronic processing, and other process in connection with the supply of tax-free petroleum products to farmers or fishers.(18) A cooperative acting as an institution responsible for control of tax-free petroleum products shall, whenever it discovers while carrying on the affairs relating to the control of tax-free petroleum products that a cause to levy the tax amount abated or exempted or the additional tax under paragraphs (9), (11), and (12) additionally occurs, suspend immediately the issuance and use of tax-free petroleum purchase cards, etc., and shall notify the head of the competent tax office of the fact without delay.(19) The head of the competent tax office shall, whenever he becomes aware that a cause to levy the tax amount abated or exempted under paragraphs (9) through (14) occurs, notify the cooperative acting as an institution responsible for control of tax-free petroleum products of the fact without delay.(20) Each institution responsible for control of tax-free petroleum products may request administrative agencies, etc. to furnish it with informative data concerning death, giving up farming, or any other event in order to efficiently carry on the affairs relating to the control of tax-free petroleum products, and the administrative agencies, etc. shall, upon receiving such request, provide the institution responsible for control of tax-free petroleum products with such informative data, unless any justifiable ground exists to the contrary.(21) Necessary matters concerning the procedure for supply and control of tax-free petroleum under the provisions of paragraphs (1) through (20), the method of issuance and use of tax-free petroleum purchase cards, etc., and the procedure for levying the abated or exempted tax amount, an amount equivalent to the abated or exempted tax amount, and the additional tax shall be prescribed by Presidential Decree.[This Article Wholly Amended by Act No. 8827, Dec. 31, 2007]

(1) The value-added tax shall be exempted not later than December 31, 2010 pursuant to the classifications under paragraph (3) for the supply of gold bullions falling under any of the following subparagraphs (hereafter referred to as the “tax-free gold bullions” in this Article), which are the metals equipped with the forms, purity, etc. prescribed by Presidential Decree (hereafter referred to as the “gold bullions” in this Article): <Amended by Act No. 7577, Jul. 13, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Gold bullions supplied by the wholesalers or refiners of gold bullions prescribed by Presidential Decree (hereafter referred to as “gold bullion wholesalers, etc.” in this Article) to the gold craftsmen, etc. prescribed by Presidential Decree (hereafter referred to as “gold craftsmen, etc.” in this Article) who have received tax-free recommendation from a person prescribed by Presidential Decree (hereafter referred to as a “recommender of trading the tax-free gold bullions” in this Article);2. Gold bullions supplied by the gold bullion wholesalers, etc. and the financial institutions prescribed by Presidential Decree (hereafter referred to as the “financial institutions” in this Article) to the financial institutions having received tax-free recommendation from any recommender of trading the tax-free gold bullions; or gold bullions supplied by the financial institutions pursuant to the consumption loan for gold bullion, or those refunded to them;3. Gold bullions supplied by transaction of exchange-traded derivatives traded in the derivatives market under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "transaction of exchange-traded derivatives"): Provided, That the same shall not apply to the cases where any person other than the gold craftsmen, etc. (including the financial institutions) takes over the actual objects of gold bullions; and4. Gold bullions supplied by a financial institution to gold craftsmen, etc. having received tax-free recommendation from any recommender of trading tax-free gold bullions.(2) The value-added tax shall be exempted not later than December 31, 2010 for the gold bullions imported by the gold craftsmen, etc. and financial institutions upon receipt of tax-free import recommendation from a person prescribed by Presidential Decree (hereafter referred to as a “recommender of importing the tax-free gold bullions” in this Article). <Amended by Act No. 7577, Jul. 13, 2005; Act No. 8827, Dec. 31, 2007>(3) Special cases in the Value-Added Tax Act shall apply to the tax-free gold bullions under paragraph (1), pursuant to the provisions falling under any of the following subparagraphs:1. The provisions of Article 12 of the Value-Added Tax Act shall apply mutatis mutandis to the cases where the financial institutions supply the tax-free gold bullions; and2. In cases where an entrepreneur other than the financial institution supplies the tax-free gold bullions, the Value-Added Tax Act shall apply to the relevant entrepreneur by regarding him as the taxable entrepreneur for value-added tax. In such cases, the input tax amount of value-added tax which has been borne by the relevant entrepreneur at the time of purchasing the relevant gold bullions in connection with supply of the tax-free gold bullions, shall not be regarded as the input tax amount deductible under Article 17 of the Value-Added Tax Act, but such input tax amount of value-added tax may be subject to deduction as has been borne in connection with the purchase of the tax-free gold bullions refined and supplied by the gold bullion refiners from among the gold bullion wholesalers, etc., and of the tax-free gold bullions refunded by the relevant entrepreneur to the financial institution under the consumption loan for gold bullion under paragraph (1) 2.(4) The collecting agent of value-added tax prescribed by Presidential Decree (hereafter referred to as a “value-added tax collecting agent” in this Article) shall, in case of falling under any of the following subparagraphs, collect the value-added tax from the person subject to collection of value-added tax prescribed by Presidential Decree (hereafter referred to as a “person subject to collection of value-added tax” in this Article) at the time of supply as prescribed by Presidential Decree, and pay it to the head of the tax office having jurisdiction over the business place, the Bank of Korea, or postal offices not later than the end of the month next to that whereto belongs the date of collection as prescribed by Presidential Decree: <Amended by Act No. 9272, Dec. 26, 2008>1. Where the financial institution fails to receive any refund of gold bullions supplied under the consumption loan for gold bullion; and2. Where any person other than the gold craftsmen, etc. (including financial institutions) takes over the actual objects of gold bullions, in the case of transaction of exchange-traded derivatives of gold bullions.(5) In applying the provisions of paragraph (4), the value-added tax collecting agent shall deliver a receipt for collecting value-added tax on gold bullions at the time of collecting the value-added tax, as prescribed by Presidential Decree.(6) In cases where any person who has made a tax-free import of gold bullions under paragraph (2) for the purpose, etc. of supplying the gold bullions to the gold craftsmen, etc. under paragraph (1) fails to supply the relevant imported gold bullions for the relevant purpose, the director of the competent customs office shall collect the value-added tax related to the import from the importer, and deliver a tax invoice: Provided, That the same shall not apply to the case as prescribed by Presidential Decree.(7) Any person who has made a tax-free supply (excluding the supply by a person who has transacted exchange-traded derivatives through a financial investment business entity under Article 8 of the Financial Investment Services and Capital Markets Act) or import of gold bullions under paragraphs (1) and (2), a recommender of trading the tax-free gold bullions, a recommender of importing the tax-free gold bullions, and financial institutions, shall file a report with the head of the competent tax office having jurisdiction over the business place on the details of trades of the tax-free gold bullions (including trade transacting exchange-traded derivatives of gold bullions through a financial investment business entity; hereafter in this Article the same shall apply), and the details of recommendations not later than the end of the month next to that ending each quarter as prescribed by Presidential Decree; and shall record on the books by classifying the details of trading the tax-free gold bullions, those of imports, and those of recommendations for tax exemption; and shall keep the aforementioned books for five years from the end of business year whereto belongs the date of supplying the tax-free gold bullions, date of imports, and date of recommendations. <Amended by Act No. 9272, Dec. 26, 2008>(8) The amounts collected by the head of the tax office having jurisdiction over the business place or the director of the competent customs office pursuant to the classifications listed in each of the following subparagraphs, shall be deemed to have been collected as the value-added tax by referring to the practices of collecting the national taxes:1. Where the gold bullions recommended for tax exemption from the recommender of trading the tax-free gold bullions under paragraph (1) 1 are supplied to other person than the recommended persons, the amount equivalent to 10/100 of the value-added tax amount on the relevant gold bullions shall be collected as the additional tax;2. Where the gold bullion are supplied under paragraph (1) 2, if it falls under any of the following items, the amount equivalent to 10/100 of the value-added tax amount on the relevant gold bullions shall be collected as the additional tax:(a) Where the gold bullion wholesalers, etc. and financial institutions supply the gold bullions recommended for tax exemption by the recommender of trading the tax-free gold bullions to other person than the recommended financial institutions; and(b) Where, when an entrepreneur redeems the gold bullions borrowed under the consumption loan for gold bullion, the gold bullions are supplied to other person than the financial institution from which they have been borrowed;3. Where the value-added tax collecting agent liable to collect and pay the value-added tax under paragraph (4) has failed to collect and pay the value-added tax from the person subjected to collection of such tax, such amount shall be collected as are obtained by adding theamount equivalent to 10/100 of unpaid tax amount to the said tax amount;4. As the person who has made the tax-free import of the gold bullions under paragraph (2) for the purpose of supplying the gold bullions to the gold bullion craftsmen, etc. under paragraph (1) has failed to supply the relevant gold bullions for relevant purposes, where the director of the competent customs office collects the value-added tax under paragraph (6), such amount shall be collected as are obtained by adding the amount equivalent to 10/100 of unpaid tax amount to the said tax amount; and5. Where any person who is liable to faithfully perform the obligation to report, record on books, manage and keep the details, etc. of trading the tax-free gold bullions under paragraph (7) has failed to do so, the amount fixed under each of the following items shall be collected as the additional tax. In this case, the provisions of item (b) shall apply to the case where it falls simultaneously under items (a) and (b):(a) When the books under paragraph (7) have not been kept or recorded, or the trading amount and recommended amount of the tax-free gold bullions pursuant to the kept or recorded books fall short of the trading amount and recommended amount to be recorded on the books, the amount equivalent to 1/100 of such insufficient trading amount and recommended amount of the tax-free gold bullions (5/1,000 in the case of the recommender of trading the tax-free gold bullions, or the recommender of importing the tax-free gold bullions); and(b) When the details of trading and recommendation of the tax-free gold bullions are not reported under paragraph (7) to the head of tax office having jurisdiction over the business place, or they fall short of the trading amount and recommended amount of the tax-free gold bullions to be reported, the amount equivalent to 1/ 100 of such unreported or insufficient trading amount and recommended amount of the tax-free gold bullions (5/1,000 in the case of the recommender of trading the tax-free gold bullions, or the recommender of importing the tax-free gold bullions).(9) Any portion of the value-added taxes collected under paragraph (4) from a general taxable person for value-added tax, or any portion for which a tax invoice has been delivered under paragraph (6), may be subject to a deduction as an input tax amount by applying mutatis mutandis the provisions of Article 17 of the Value-Added Tax Act.(10) Where a financial institution fails to obtain a redemption of the gold bullions supplied under the consumption loan for gold bullion, if the person failing to redeem the relevant gold bullions falls under the causes as prescribed by Presidential Decree, no value-added tax shall be collected, notwithstanding the provisions of paragraph (4).(11) The head of competent tax office may, if it is deemed necessary to preserve any value-added tax, ask such gold bullion wholesalers, etc. as prescribed by Presidential Decree and gold craftsmen, etc. to furnish security. <Amended by Act No. 7322, Dec. 31, 2004>(12) In the application of paragraphs (1) through (11), necessary matters concerning methods of and procedures for exempting gold bullions from taxes, the delivery of tax invoices, additional collection, collection, return, post management, the amount of a security for the tax payment of gold bullions, the period of such security, the time for offering the security for the tax payment, the procedures therefor and the revocation thereof shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 7322, Dec. 31, 2004>[This Article Newly Inserted by Act No. 6762, Dec. 11, 2002]

(1) Any business operator who intends to supply gold bullions or the gold-related products prescribed by Presidential Decree (hereafter referred to as “gold-related products” in this Article) or to be supplied with such gold bullions or gold-related products (hereafter referred to as a “gold business operator” in this Article and Article 122 (5)) or any business operator who intends to import gold-related products shall open an account for gold transactions as prescribed by Presidential Decree (hereafter referred to as a “gold trading account” in this Article). <Amended by Act No. 9272, Dec. 26, 2008>(2) Notwithstanding Article 15 of the Value-Added Tax Act, the valued-added tax shall not be levied on any gold-related product supplied by a gold business operator to another gold business operator.(3) A gold business operator to whom another gold business operator supplies a gold-related product shall pay the amount of subparagraph 1 to the supplying business operator and the amount of subparagraph 2 to the person designated by Presidential Decree respectively through a gold trading account: Provided, That in cases where the value of gold-related products is settled by methods prescribed by Presidential Decree, such as a loan of corporate purchase fund, etc., only an amount under subparagraph 2 shall be paid on account: <Amended by Act No. 9272, Dec. 26, 2008>1. The price for the gold-related product; and2. The amount calculated by applying the tax rate under Article 14 of the Value-Added Tax Act to the tax base under Article 13 of the aforementioned Act (hereafter referred to as the “value-added tax amount” in this Article).(4) Notwithstanding Article 19-2 of the Value-Added Tax Act, value-added tax for import of gold-related products may be paid by methods prescribed by Presidential Decree by making use of an account for transaction of gold. <Newly Inserted by Act No. 9272, Dec. 26, 2008>(5) Paragraphs (3) and (4) shall not apply in cases where the value-added tax is exempted pursuant to Article 106-3. <Amended by Act No. 9272, Dec. 26, 2008>(6) If a gold business operator to which a gold-related product is supplied fails to pay the value-added tax amount under paragraph (3) 2, the tax amount stated in the tax invoice, which is issued and delivered by another gold business operator who supplied the gold-related product, shall not be deemed as the tax amount for purchasing deductible from the tax amount for sales, notwithstanding Article 17 of the Value-Added Tax Act. <Amended by Act No. 9272, Dec. 26, 2008>(7) In cases where the payment for a gold-related product is settled between gold business operators without using a gold trading account under paragraph (3), an amount equivalent to 20/100 of the price for the gold-related product shall be levied on both the gold business operator who supplies the product and the gold business operator to whom the product is supplied as an additional tax.<Amended by Act No. 9272, Dec. 26, 2008>(8) If a gold business operator who has a gold-related product supplied fails to pay the value-added tax amount under paragraph (3), the head of the competent tax office shall levy on the gold business operator an amount calculated by multiplying the value-added tax by the interest rate prescribed by Presidential Decree for the period of time from the day immediately following the day on which the gold-related product is supplied to the day on which the value-added tax amount is paid (which shall not exceed the time limit for filing a tax base return under Articles 18, 19, and 27 of the Value-Added Tax Act) in addition to the value-added tax amount.<Amended by Act No. 9272, Dec. 26, 2008>(9) The value-added tax amount paid by the business operator supplied under paragraph (3) may be either deducted from the tax amount payable by the gold business operator who supplies the gold-related product or added to the refundable tax amount.<Amended by Act No. 9272, Dec. 26, 2008>(10) If the ratio of output supplies of gold-related products supplied by a gold business operator for the pertinent preliminary and final return periods to the input supplies of those are equivalent to or lower than the ratio prescribed by Presidential Decree, the head of the competent tax office may hold off the refund: Provided, That the same shall not apply to any of the following cases: <Amended by Act No. 9272, Dec. 26, 2008>1. If the refundable amount is equivalent to or less than the amount prescribed by Presidential Decree; and2. If there is any ground to deem that default on tax payment or tax evasion is not likely to occur, as prescribed by Presidential Decree.(11) The scope of gold business operators who are obligated to use a gold trading account, the method of depositing in a gold trading account, the disposal of the value-added tax amounts deposited, and other matters necessary for implementation of the purchaser payment system under paragraphs (1) through (10) shall be prescribed by Presidential Decree. <Amended by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) In cases where a business operator who engages in collecting secondhand gold products prescribed by Presidential Decree (hereinafter referred to as “gold scrap”) acquires gold scraps from consumers and other persons prescribed by Presidential Decree to supply them to other business operators on or before December 31, 2009, an amount calculated by multiplying the acquisition price for such gold scraps by 3/100 may be subtracted, as an input tax amount, from the output tax amount under Article 17 (1) of the Value-Added Tax Act.(2) The acquisition price for gold scraps under paragraph (1) shall not exceed an amount calculated by multiplying the tax base for the value-added tax related to the gold scraps supplied by the business operator who collects the gold scraps during the pertinent taxable year by 80/100. In such cases, if there is any input tax amount already reflected as a tax credit for gold scraps at the time of filing a preliminary return under Article 18 of the Value-Added Tax Act and the time of filing a return for refund under Article 24 (2) of the same Act, such tax credit shall be settled at the time of filing the final return under Article 19 of the same Act.(3) The tax credit for input supplies under paragraph (1) shall not apply if there is no payable tax amount calculated according to the Value-Added Tax Act.(4) In the application of the provisions of paragraphs (1) through (3), the scope of business operators who engage in collecting gold scraps, the method of applying the tax credit for input supplies, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) Gold bullions refiners prescribed by Presidential Decree shall submit a statement on production and release of gold bullions prescribed by Presidential Decree, as an accompanying document attached to the tax base return form at the time of filing a tax base return for the value-added tax under Articles 18, 19, and 27 of the Value-Added Tax Act.(2) The director of customs office shall, whenever a gold-related product prescribed by Presidential Decree is imported, submit the details of the relevant import declaration to the head of the tax office having jurisdiction over the importer’s place of business not later than the end of the month following the month in which the import declaration is filed.[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) 90/100 of the amount of the payable value-added tax shall be reduced for general taxicab business operators under the Passenger Transport Service Act by the taxable period ending on or before December 31, 2011. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(2) The relieved tax amount referred to in paragraph (1) shall be used for improving the treatment and welfare of general taxicab drivers under the Passenger Transport Service Act as prescribed by the Minister of Land, Transport and Maritime Affairs. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 8852, Feb. 29, 2008>(3) In cases where the Minister of Land, Transport and Maritime Affairs confirms that a general taxicab business operator under the Passenger Transport Service Act has failed to use the amount of the reduced tax under paragraph (1) pursuant to paragraph (2) within six months from the end of the time limit for payment by report of the value-added tax so reduced, he shall forthwith notify it to the Commissioner of the National Tax Service or the head of the tax office having jurisdiction over the general taxicab business operator, and the Commissioner of the National Tax Service or the head of the tax office having jurisdiction over the general taxicab business operator so notified shall additionally collect a total of the amounts calculated pursuant to the following subparagraphs: <Newly Inserted by Act No. 8146, Dec. 30, 2006; Act No. 8852, Feb. 29, 2008>1. Amount equivalent to the reduced tax amount not used for improving the treatment and welfare of general taxicab drivers provided for in the Passenger Transport Service Act;2. Amount equivalent to the interest on the amount equivalent to the reduced tax amount referred to in subparagraph 1 calculated by applying the following formula:Amount equivalent to the interest = Amount equivalent to the reduced tax amount referred to in subparagraph 1 × Period (days) from the next day of the end of the time limit for payment by report of the value-added tax reduced pursuant to paragraph (1) through the day of notification of the additionally collected tax amount × 3/ 10,000; and3. Additional tax amount corresponding to 20/100 of the amount equivalent to the reduced tax amount referred to in subparagraph 1.[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) With respect to the goods that foreign tourists, etc. purchase from business operators prescribed by Presidential Decree in order to take out of Korea, the zero rating of the value-added tax may apply, or the amount of the value-added tax on the relevant goods may be refunded under the conditions as prescribed by Presidential Decree.(2) With respect to the goods that foreign tourists, etc. purchase at the shops prescribed by Presidential Decree in order to take out of Korea, the individual consumption tax may be exempted, or the individual consumption tax on the relevant goods may be refunded under the conditions as prescribed by Presidential Decree. <Amended by Act No. 8827, Dec. 31, 2007>(3) In cases where the goods exempted from the value-added tax or the individual consumption tax (including the application of the zero rating of the value-added tax) or subject to the refund thereof under paragraphs (1) and (2) are not taken out of Korea, the value-added tax or the individual consumption tax shall be collected under the conditions as prescribed by Presidential Decree. <Amended by Act No. 8827, Dec. 31, 2007>(4) In applying paragraphs (1) through (3), the scope of foreign tourists, etc., the scope of the subjected goods, the procedure for purchase and sale, refund of the tax amount, and other necessary matters shall be prescribed by Presidential Decree.(5) The Commissioner of the National Tax Service, the Commissioner of the competent Regional Tax Office, or the head of the competent tax office may, if deemed necessary for preventing unlawful transactions, give a necessary order to the business operators under paragraph (1) or the shops under paragraph (2), under the conditions as prescribed by Presidential Decree. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(6) If a foreign corporation or non-resident that has no business place in Korea, but operates a business in a foreign country (hereafter referred to as a “foreign businessman” in this Article), purchases or receives the provision of the goods or services falling under any of the following subparagraphs for its business in Korea, the value-added tax on such goods or services may be refunded to the relevant foreign businessman under the conditions as prescribed by Presidential Decree: Provided, That this shall not apply to the case where the refunded amount to the relevant foreign businessman for one calendar year is less than the amount prescribed by Presidential Decree:1. Food and lodging services;2. Advertisement services; and3. Other goods or services prescribed by Presidential Decree.(7) Any value-added tax imposed on goods or services (excluding any goods or services subject to Article 11 of the Value-Added Tax Act) that are purchased at or furnished by a duty-free shop prescribed by Presidential Decree by or to foreign diplomats stationed in Korea andother persons corresponding to them as prescribed by Presidential Decree (hereafter referred to as the “diplomats, etc.” in this Article) may be refunded to such diplomats, etc. within the limit of 1 million won per year under the conditions as prescribed by Presidential Decree. <Amended by Act No. 6045, Dec. 28, 1999>(8) The refund of the value-added tax under paragraph (6) or (7) shall be allowable only when the relevant foreign country makes the same refunds to Korean businessmen, diplomats or diplomatic missions. <Amended by Act No. 8827, Dec. 31, 2007>

(1) Where a businessman who collects the waste resources and used goods for recycling purposes acquires any waste resources and used goods from the State, local governments or other persons prescribed by Presidential Decree, and manufactures or processes, or supplies them, not later than December 31, 2009, an amount calculated by multiplying the acquired value of the recycled waste resources by 6/100, and an amount calculated by multiplying the acquired value of the used goods by 10/110 may be deducted, as his input tax amount, from his output tax amount under Article 17 (1) of the Value-Added Tax Act. <Amended by Act No. 7577, Jul. 13, 2005; Act No. 8146, Dec. 30, 2006>(2) In applying the provisions of paragraph (1), where a businessman who collects the waste resources for recycling purposes is subject to the special case of deduction of the input tax amount of the value-added tax on such waste resources, the input tax amount calculated within the limit of the amount computed by subtracting the input value of such waste resources (excluding the input value of the businessman’s fixed business assets) purchased with receiving a tax invoice from the amount obtained by multiplying the tax base of the value-added tax on such waste resources supplied by the businessman during the relevant taxable period at the time of filing the final return of the value-added tax by 80/100 (90/100 in the case of the waste resources acquired not later than December 31, 2007) may be deducted from the output tax amount. In this case, an amount, if any, already deducted as the input tax amount of such waste resources at the time of filing the preliminary return under Article 18 of the Value-Added Tax Act and the return of refund under Article 24 (2) of the said Act shall be adjusted at the time of filing the final return under Article 19 of the said Act. <Newly Inserted by Act No. 8146, Dec. 30, 2006>(3) In applying the provisions of paragraphs (1) and (2), the scope of businessmen collecting the waste resources and used goods for recycling, the scope of the waste resources and used goods for recycling, method of deducting the input tax amount, and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 8146, Dec. 30, 2006>

(1) Individual consumption tax shall be reduced and exempted for automobiles satisfying the requirements of the items of subparagraph 2 of Article 2 of the Act on Promotion of the Development and Popularization of Environment-Friendly Automobiles as hybrid automobiles under subparagraph 5 of Article 2 of the same Act.(2) An amount of reduction of and exemption from the individual consumption tax under paragraph (1) shall be as the following subparagraphs:1. The total amount of the individual consumption tax in cases where the amount of the individual consumption tax is not more than one million won; and2. One million won in cases where the amount of the individual consumption tax exceeds one million won.(3) Paragraph (1) shall apply to automobiles only which are taken out of a place of manufacturing or a bonded area from July 1, 2009 to December 31, 2012.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) Any domestic passenger car purchased by a diplomat stationed in Korea as prescribed by Presidential Decree, and any similar car purchased for business, on the recommendation by the competent Minister, by a foreign non-government assistance organization registered under the agreement, shall be exempted from the individual consumption tax. <Amended by Act No. 8827, Dec. 31, 2007>(2) Any national who intends to take a domestic passenger car under paragraph (1) out of the manufacturing place shall obtain approval of the head of the competent tax office as prescribed by Presidential Decree.

(1) Petroleum products falling under any of the following subparagraphs shall be exempted from the individual consumption tax or the transportation energy environment tax. In the case of petroleum products falling under subparagraph 2, the same shall apply only to those products shipped out of the manufacturing place or the bonded area not later than December 31, 2009: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Petroleum products under Article 105 (1) 2;2. Petroleum products under Article 106 (1) 1; and3. and 4. Deleted. <by Act No. 6297, Dec. 29, 2000>(2) The portion of biodiesel mixed with a kind of fuel, which can be used as a substitute for the petroleum products publicly notified by the Minister of Knowledge Economy pursuant to Article 29 (2) 6 of the Petroleum and Petroleum Substitute Fuel Business Act and which is released from a manufacturing place or a bonded area on or before December 31, 2010, shall be exempted from the transportation energy environment tax. <Newly Inserted by Act No. 8827, Dec. 31, 2007; Act No. 8852, Feb. 29, 2008>

(1) Where a person, who owns an automobile with engine displacement below 1000 cc prescribed by Presidential Decree which is an automobile for passengers or for passengers riding together (hereafter in this Article referred to as a “compact car”) under Article 3 of the Automobile Management Act and meets all of the following subparagraphs, purchases oil provided for in paragraph (3) (hereafter in this Article referred to as “oil”) to use it as fuel for the relevant car on or before December 31, 2009, the head of the tax office having jurisdiction over the place of business of a credit card company referred to in paragraph (5) (hereafter in this Article referred to as the “head of the competent tax office”) may refund the tax amount under paragraph (3) from among the transportation energy environment tax and individual consumption tax imposed on the relevant fuel: <Amended by Act No. 9131, Sep. 26, 2008>1. Where total number of the passenger automobiles or the automobiles for passengers riding together owned by the owner of the relevant compact car and his family members living together as listed in the resident registration card is one respectively; and2. Where the owner of the relevant compact car is not a handicapped person or a person of distinguished services to the State who is eligible for the benefits from the support project under Article 3 (1) 10-2 of the Enforcement Decree of the Act on the Special Accounts for Energy and Resources-related Projects.(2) Where a person, as an individual who owns a small truck (including compact truck the displacement of which is below 1,000 cc; hereinafter referred to as a “small truck” in this Article) the maximum loading weight prescribed by Presidential Decree of which is not heavier than one ton as a truck under Article 3 of the Automobile Management Act, who fully satisfies the necessary conditions of the following subparagraphs, purchases oil to use it as fuel for the relevant automobile by June 30, 2009, the head of the competent tax office may refund an amount of tax under paragraph (3) of the transportation energy environment tax and the individual consumption tax imposed on the oil concerned: Provided, That where the same person owns not less than two small trucks, the amount of tax may be refunded for one small truck only of them: <Newly Inserted by Act No. 9131, Sep. 26, 2008>1. Where the small truck concerned is not that used for a business for which permission of trucking transport business has been obtained under Article 3 of the Trucking Transport Business Act; and2. Where falling under paragraph (1) 2.(3) The tax amount under any of the following subparagraphs shall be refunded in accordance with paragraphs (1) and (2), and the upper limit of refundable tax amount per year shall be prescribed by Presidential Decree: <Amended by Act No. 9131, Sep. 26, 2008>1. In the case of gasoline or diesel under Article 2 (1) of the Transportation Energy Environment Tax Act: 250 won per liter that is imposed as transportation energy environment tax; or2. In the case of butane from among petroleum gases under Article 1 (2) 4 (f) of the Individual Consumption Tax Act: The total amount of individual consumption tax imposed on the relevant article.(4) Any person who intends to receive a refund of transportation energy environment tax and individual consumption tax pursuant to paragraphs (1) and (2) (hereafter in this Article referred to as an “eligible person”) shallget an oil purchase card for refund issued by the credit card company provided for in subparagraph 2-2 of Article 2 of the Specialized Credit Financial Business Act that is designated by the Commissioner of the National Tax Service (hereafter in this Article referred to as the “credit card company”) as prescribed by Presidential Decree. In such cases, an oil purchase card for refund shall be issued by only one credit card company. <Amended by Act No. 9131, Sep. 26, 2008>(5) Where any eligible person who has got an oil purchase card for refund purchases oil with the relevant card, the credit card company may receive the refund of the tax amount under paragraph (3) or the deduction from the payable tax amount by submitting an application for the relevant oil to the head of the competent tax office. <Amended by Act No. 9131, Sep. 26, 2008>(6) Where any person who has got an oil purchase card for refund is not an eligible person anymore, he shall immediately return the oil purchase card for refund to the credit card company. In this case, the credit card company shall without delay notify the Commissioner of the National Tax Service of such fact.(7) Where any eligible person uses oil purchased with his oil purchase card for refund for other purpose than the fuel of the relevant car, the head of the tax office having jurisdiction over his domicile shall collect the aggregate of the amounts calculated according to each of the following subparagraphs from the eligible person:1. The refunded tax amount for oil used for other purpose than the fuel of the relevant automobile; and2. The additional tax amount equivalent to 40/100 of the refunded tax amount under subparagraph 1.(8) Where an eligible person uses oil purchased with an oil purchase card for refund for other purpose than the fuel of the relevant car or transfers his oil purchase card for refund to any other person, the Commissioner of the National Tax Service or the credit card company shall exclude him from the eligible persons on the date he or it becomes aware of such fact.(9) Where the credit card company receives a refund or deduction in excess of tax amount refundable under paragraph (3) by false or other unlawful means, the head of the competent tax office provided for in paragraph (5) shall collect the aggregate of the excessively refunded tax amount and the additional tax amount equivalent to 40/100 of such excessively refunded tax amount from the credit card company. <Amended by Act No. 9131, Sep. 26, 2008>(10) The head of the tax office having jurisdiction over the domicile of a person falling under any one of the following subparagraphs shall collect the aggregate of the refunded tax amount calculated by applying mutatis mutandis paragraph (7) and the additional tax amount equivalent to 40/100 of such refunded tax amount: <Amended by Act No. 9131, Sep. 26, 2008>1. A person who has acquired an oil purchase card for refund from an eligible person and used it;2. A person, other than eligible persons, who had been issued an oil purchase card for refund and used it; or3. A person who has used an oil purchase card for refund even after he was not eligible person anymore.(11) The Commissioner of the National Tax Service may request the related administrative agencies, etc. to offer data necessary for the efficient administration of eligible persons to the relevant Commissioner or the credit card company, and the related administrative agencies, etc. so requested shall comply with such request unless there exist any justifiable grounds to the contrary.(12) Matters necessary for procedures for refund and documents for submission pursuant to paragraphs (1) through (11) shall be prescribed by Presidential Decree. <Amended by Act No. 9131, Sep. 26, 2008>[This Article Newly Inserted by Act No. 8986, Mar. 28, 2008]

(1) Butane from among petroleum gases provided for in Article 1 (2) 4 (f) of the Individual Consumption Tax Act (hereafter in this Article referred to as “LPG”) that is supplied to automobiles for general taxicab business or private taxicab business under Article 3 (2) of the Passenger Transport Service Act and subparagraph 2 (c) and (d) of Article 3 of the Enforcement Decree of the Passenger Transport Service Act on or before April 30, 2010 shall be exempted from individual consumption tax and education tax.(2) Any general taxicab businessman and any private taxicab businessman (in this Article referred to as a “taxicab businessman”) who intend to be eligible for the exemption from individual consumption tax and education tax pursuant to paragraph (1) shall get an oil purchase card for tax exemption (hereafter in this Article referred to as a “tax-free oil purchase card for a taxi”) issued by the credit card company, provided for in subparagraph 2-2 of Article 2 of the Specialized Credit Financial Business Act, that is designated by the Commissioner of the National Tax Service (hereafter in this Article referred to as the “credit card company”) under the conditions as prescribed by Presidential Decree.(3) Where any taxicab businessman who has got a tax-free oil purchase card for a taxi purchases LPG with the relevant card, the credit card company may receive the refund of the tax amount exempted under paragraph (1) or the deduction from the payable tax amount by submitting an application for the relevant LPG to the head of the competent tax office.(4) Where any person who has got a tax-free oil purchase card for a taxi is no taxicab businessman anymore, he shall immediately return the tax-free oil purchase card for a taxi to the credit card company. In this case, the credit card company shall without delay notify the Commissioner of the National Tax Service of such fact.(5) Where any taxicab businessman uses LPG purchased with his tax-free oil purchase card for a taxi for other purpose than the taxicab business, the head of the tax office having jurisdiction over his domicile shall collect the aggregate of the amounts calculated according to each of the following subparagraphs from the taxicab businessman:1. The tax amount exempted for LPG used for other purpose than the taxicab business; and2. The additional tax amount equivalent to 40/100 of the tax amount exempted under subparagraph 1.(6) Where a taxicab businessman uses LPG purchased with a tax-free oil purchase card for a taxi for other purpose than the taxicab business or transfers his tax-free oil purchase card for a taxi to any other person, the Commissioner of the National Tax Service or the credit card company shall exclude him from the list of persons eligible to get a tax-free oil purchase card for a taxi from the date when he or it becomes aware of such fact.(7) Where the credit card company receives an excessive refund or deduction of tax amount exempted under paragraph (1) by false or other unlawful means, the head of the competent tax office provided for in paragraph (3) shall collect the aggregate of the excessively refunded tax amount and the additional tax amount equivalent to 40/100 of such excessively refunded tax amount from the credit card company.(8) The head of the tax office having jurisdiction over the domicile of any person falling under any of the following subparagraphs shall collect the aggregate of the exempted tax amount calculated by applying mutatis mutandis paragraph (5) and the additional tax amount equivalent to 40/100 of such exempted tax amount:1. A person who had acquired a tax-free oil purchase card for a taxi from a taxicab businessman and used it;2. A person, other than taxicab businessmen, who had been issued a tax-free oil purchase card for a taxi and used it; or3. A person who has used a tax-free oil purchase card for a taxi even after he was no taxicab businessman anymore.(9) The Commissioner of the National Tax Service may request the related administrative agencies, etc. to offer data necessary for the efficient administration of taxicab businessmen to the Commissioner or the credit card company, and the related administrative agencies, etc. so requested shall comply with such request unless there exist any justifiable grounds to the contrary.(10) Matters necessary for procedures for refund and documents for submission pursuant to paragraphs (1) through (9) shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8986, Mar. 28, 2008]

An act of admission (limited to a case of admission on or before December 31, 2010) to a membership golf course (hereinafter referred to as a “golf course” in this Chapter) under Article 21 of the Installation and Utilization of Sports Facilities Act located outside the Seoul Metropolitan area shall be exempted from the individual consumption tax. In such cases, a golf course that extend throughout the Seoul Metropolitan area and outside the Seoul Metropolitan area, where the area of which located outside the Seoul Metropolitan area of its whole area is more than 1/2, shall be deemed a golf course located outside the Seoul Metropolitan area.[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

The Metropolitan City Mayor, the head of Si or Gun (excluding the head of Gun under the jurisdiction of Metropolitan City) shall take necessary measures as prescribed by Presidential Decree so that the special provisions on taxation for admission to a golf course under Article 112 may contribute to the promotion of tourism of the area concerned. <Amended by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 9131, Sep. 26, 2008]

(1) If the petroleum products under Article 106-2 (1) 2 and the goods under Articles 110 and 111 are not used for the original purpose or are transferred within five years from the date of carrying them into Korea as tax-free goods (including cases where taxes are abated or exempted; hereafter referred to as “tax exemption” in this Article), the exempted tax amount shall be collected. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 8827, Dec. 31, 2007>(2) If the petroleum products on which the individual consumption tax or the transportation energy environment tax is levied become eligible for tax exemption under Article 106-2 (1) 2 or 111, the relevant tax amount to be exempted may be refunded, or deducted from the tax amount to be paid or collected. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 8138, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(3) The Individual Consumption Tax Act or the Transportation Energy Environment Tax Act shall apply mutatis mutandis, depending on the relevant goods, to the tax exemption procedures for the individual consumption tax or the transportation energy environment tax under Articles 106-2 (1) 2, 110 and 111 (including the dispositions in cases where the tax exemption procedures are not implemented), to the procedures for collecting the tax amount under paragraph (1), and to the procedure for the refund or tax credit under paragraph (2). <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 8138, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>

(1) Goods (limited to those manufactured domestically) sold to the military personnel, military service officials, and the awardees of military merit medals of TaeGeuk and Ulji as prescribed by the Presidential Decree, at stores operated directly by the military authorities, shall be exempted from the individual consumption tax and the liquor tax.<Amended by Act No. 8827, Dec. 31, 2007>(2) The Minister of National Defense shall determine the ceiling of tax exemption by item every year in consultation with the Minister of Strategy and Finance not later than December 31 of the preceding year. <Amended by Act No. 8852, Feb. 29, 2008>(3) Any goods exempted from tax under paragraph (1) shall carry the marking that they are tax-free goods on themselves or their packagesand containers under the conditions as stipulated by the Commissioner of the National Tax Service.(4) An amount equivalent to the liquor tax amount on liquors to be used as raw materials for manufacturing the liquors that are exempted from taxes under paragraph (1), shall be refunded or deducted, but the provisions of Article 35 (3) of the Liquor Tax Act shall apply mutatis mutandis thereto. <Amended by Act No. 6055, Dec. 28, 1999>(5) Matters necessary for the scope of goods subject to tax exemption, procedures for tax exemption, and collection thereof under paragraph (1)shall be prescribed by Presidential Decree.

(1) Any liquor which a person operating an entertainment restaurant exclusive for foreign military personnel stationed in Korea and foreign seafarers, from among the tourist-use facility businesses under the Tourism Promotion Act, provides at the relevant restaurant, shall be exempted from the liquor tax.(2) An amount equivalent to the liquor tax amount on liquors to be used as raw materials for manufacturing the liquors exempted from taxes under paragraph (1), shall be refunded or deducted, but the provisions of Article 35 (3) of the Liquor Tax Act shall apply mutatis mutandis thereto. <Amended by Act No. 6055, Dec. 28, 1999>(3) The provisions of Article 31 of the Liquor Tax Act shall apply mutatis mutandis to the procedures for exempting the liquor tax under paragraph (1). <Amended by Act No. 6055, Dec. 28, 1999>

(1) Documents falling under any one of the following subparagraphs shall be exempted from the stamp tax: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act Nos. 7311 & 7322, Dec. 31, 2004; Act No. 7775, Dec. 29, 2005; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008; Act No. 9276, Dec. 29, 2008>1. through 4. Deleted; <by Act No. 6538, Dec. 29, 2001>5. Consumption loan deeds or contracts on bills prepared by the respective copartners (including members or the members of fishing village cooperatives) of the credit associations established under the Credit Unions Act, community credit funds established under the Community Credit Cooperatives Act, agricultural cooperatives established under the Agricultural Cooperatives Act, cooperative associations and fishing village cooperatives established under the Fisheries Cooperatives Act, tobacco producers cooperative associations established under the Tobacco Producers Cooperatives Act, and forestry cooperatives established under the Forestry Cooperatives Act, in order to obtain loans from the relevant cooperatives (including fishing village cooperatives) or their Federations: Provided, That the same shall not apply where the total amount of loans extended to the same person exceeds 50 million won;6. Children’s deposit passbooks and copartners’ deposit or installment savings certificates and passbooks (including the members of fishing village cooperatives under the Fisheries Cooperatives Act) which are prepared by the credit associations established under the Credit Unions Act, community credit funds established under the Community Credit Cooperatives Act, agricultural cooperatives established under the Agricultural Cooperatives Act, cooperative associations and fishing village cooperatives established under the Fisheries Cooperatives Act, tobacco producers cooperative associations established under the Tobacco Producers Cooperatives Act, and forestry cooperatives established under the Forestry Cooperatives Act;7. Certificates or documents attesting the establishment, transfer, alteration or termination of property rights due to the rural and fishing villages rearrangement projects implemented under the Rearrangement of Agricultural and Fishing Village Act; the agricultural management scale optimizing projects, such as farmland sale and purchase, lease, exchange, division and consolidation, etc. implemented pursuant to the Korea Rural Community Corporation and Farmland Management Fund Act; the rural and fishing villages settlement zone projects implemented under the Act on the Special Measures for Development of Agricultural and Fishing Villages; and the farming and fish farming scale expansion projects, such as purchase and rents, etc. of farmland which are supported under Article 4 of the Special Act on the Support of Farmers and Fishermen following the Conclusion of Free Trade Agreement;8. Deleted; <by Act No. 6538, Dec. 29, 2001>9. Documents prepared in order to obtain rural village housing improvement loans, or to purchase housing construction materials on credit from the agricultural cooperatives established under the Agricultural Cooperatives Act;10. Deleted; <by Act No. 6538, Dec. 29, 2001>11. Documents prepared in connection with farmland development projects implemented under the Public Waters Reclamation Act;12. through 14. Deleted; <by Act No. 6538, Dec. 29, 2001>15. Deleted; <by Act No. 7003, Dec. 30, 2003>16. Deleted; <by Act No. 6538, Dec. 29, 2001>17. Deleted; <by Act No. 6297, Dec. 29, 2000>18. Deleted; <by Act No. 7003, Dec. 30, 2003>19. Certificates, passbooks, contracts, etc. prepared by a business founder under the Support for Small and Medium Enterprise Establishment Act (limited to those who have founded a business of such category under Article 3 of the same Act) in order to obtain loans from a financial institution determined by Presidential Decree within two years from the date of foundation in connection with the business concerned;20. Documents prepared by the Organizing Committee for the 13th IAAF World Championships in Athletics-Daegu 2011;21. Documents prepared by the Organizing Committee for the EXPO 2012 Yeosu Korea; and22. Documents prepared by the Organizing Committee for the Asian Games-Incheon 2014.(2) The provisions of paragraph (1) 5, 6, 7, 9, 11 and 19 shall apply only to the taxation documents prepared not later than December 31, 2009, subparagraph 20 shall apply only to the taxation documents prepared not later than December 31, 2011, subparagraph 21 shall apply only to the taxation documents prepared not later than December 31, 2012 and subparagraph 22 shall apply only to the taxation documents prepared not later than December 31, 2014. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>

(1) The cases falling under any of the following subparagraphs shall be exempted from the securities transaction tax: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6073, Dec. 31, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6480, May 24, 2001; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7577, Jul. 13, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8852, Feb. 29, 2008; Act No. 9272, Dec. 26, 2008>1. Where a small or medium enterprise start-up investment company or a small or medium enterprise start-up investment association transfers stock certificates or stakes acquired by making direct investments in a business founder or a venture business;2. Where a new technology business financier or a new technology business investment association transfers stock certificates or stakes acquired by making direct investments in a new technology business operator;2-2. Deleted; <by Act No. 8146, Dec. 30, 2006>2-3. Where the Korea Venture Business Investment Association transfers stock certificates or stakes acquired by making investments in a business founder or a venture business;3. Where a collective investment business entity incorporates stock certificates into, or withdraws them from, investment trust assets in the management of investment trust under the Financial Investment Services and Capital Markets Act (limited to the investment trust that meets the requirements prescribed by Presidential Decree, such as the issuance of beneficiary certificates in the manner of public offering pursuant to Article 9 (7) and (9) of the same Act);4. Where in the management of the investment trust under subparagraph 3, a trust business operator transfers stock certificates belonging to the relevant investment trust assets through the securities market (hereafter in this Article referred to as the “securities market”) under the Financial Investment Services and Capital Markets Act or electronic securities intermediation (hereafter in this Article referred to as "electronic securities intermediary transactions") prescribed by Article 78 of the same Act;5. Where a collective investment business entity under subparagraph 3 (excluding merchant banks running collective investment business pursuant to Article 336 of the Financial Investment Services and Capital Markets Act) transfers stock certificates in its possession through the securities market or electronic securities intermediary transactions;6. Where a foreign corporation formed with the aim of stock investment transfers the stock certificates that it has acquired with permission, etc. of the Minister of Strategy and Finance for the stock investment in Korea pursuant to the Foreign Exchange Transactions Act or the Financial Investment Services and Capital Markets Act, through the securities market or electronic securities intermediary transactions;7. Where an insolvent financial institution, or an insolvent cooperative under subparagraph 3 of Article 2 of the Act on the Structural Improvement of Agricultural Cooperatives or a cooperative in danger of insolvency under subparagraph 4 of Article 2 of the same Act (hereinafter referred to as the “insolvent agricultural cooperative”) transfers stock certificates or stakes in its possession through the timely adoption of corrective measures (including the timely adoption of corrective measures under Article 4 of the Act on the Structural Improvement of Agricultural Cooperatives; hereafter in this subparagraph, the same shall apply) or through a decision to transfer a contract, or where a financial institution or the cooperative or its National Federation under subparagraphs 1 and 2 of Article 2 of the Act on the Structural Improvement of Agricultural Cooperatives retransfers such stock certificates or stakes, which they have acquired by transfer from an insolvent financial institution or an insolvent agricultural cooperative through the timely adoption of corrective measures or a decision to transfer a contract;7-2. Where an insolvent cooperative association under subparagraph 3 of Article 2 of the Act on the Structural Improvement of Fisheries Cooperatives or a cooperative association in danger of insolvency under subparagraph 4 of Article 2 of the same Act (hereinafter referred to as the “insolvent fisheries cooperative”) transfers stock certificates or stakes in its possession through the timely adoption of corrective measures (including the timely adoption of corrective measures under Article 4 of the same Act; hereafter in this subparagraph, the same shall apply) or through a decision to transfer a contract, or where the cooperative or its National Federation under subparagraphs 1 and 2 of Article 2 of the same Act retransfers such stock certificates or equity shares, which it has acquired by transfer from an insolvent fisheries cooperative through the timely adoption of corrective measures or a decision to transfer a contract;7-3. Where an insolvent cooperative under subparagraph 3 of Article 2 of the Structural Improvement of Forestry Cooperatives Act or an insolvent alarming cooperative under subparagraph 4 of the same Article (hereinafter referred to as an "insolvent forestry cooperative") transfers stock certificates or stakes in its possession pursuant to timely corrective measures (including timely corrective measures under Article 4 of the same Act; hereafter the same shall apply in this subparagraph) or determination on novation and where a cooperative under subparagraph 1 of Article 2 or the National Federation under subparagraph 2 of Article 2 transfers stock certificates or stakes again after it has taken over stock certificates or stakes from an insolvent forestry cooperative pursuant to timely corrective measures or determination on novation;8. Where the Korea Deposit Insurance Corporation or a reorganization financing institution under Article 36-3 of the Depositor Protection Act (hereinafter referred to as the “reorganization financing institution”) transfers stock certificates or stakes acquired through the conversion into investment of non-performance claims taken over from financial institutions falling under any of the following items or acquired directly from financial institutions in order to perform problem-solving services, etc. in aid of insolvent financial institutions pursuant to Article 18 (1) 4 or 36-5 (1) of the Depositor Protection Act:(a) An insolvent financial institution under subparagraph 5 of Article 2 of the Depositor Protection Act;(b) A financial institution in danger of insolvency under subparagraph 5-2 of Article 2 of the Depositor Protection Act; and(c) A financial institution provided with fund assistance under Article 38 of the Depositor Protection Act;9. Where the Korea Asset Management Corporation established under the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation (hereinafter referred to as the “Korea Asset Management Corporation”) transfers stock certificates or stakes acquired through the conversion into investment of non-performance claims taken over from an insolvent financial institution or acquired directly from an insolvent financial institution in order to perform problem-solving services in aid of insolvent financial institutions;10. Where an investment company under the Financial Investment Services and Capital Markets Act (limited to the investment company that meets the requirements prescribed by Presidential Decree, such as the issuance of stocks in the manner of public offering pursuant to Article 9 (7) and (9) of the same Act) transfers stock certificates through the securities market or electronic securities intermediary transactions;11. and 12. Deleted; <by Act No. 8146, Dec. 30, 2006>13. Deleted; <by Act No. 6538, Dec. 29, 2001>14. Where stocks are transferred for the purposes of the establishment of a new corporation under Article 47-2 of the Corporation Tax Act, a merger satisfying the requirements under each subparagraph of Article 44 (1) of the same Act, or a division satisfying the requirements under each subparagraph of Article 46 (1) or Article 47 (1) of the same Act;15. Where, of the stockholders or investors of a small or medium enterprise of which checks were dishonored (hereafter in this Article referred to as the “small or medium enterprise dishonoring its checks”), the controlling stockholders, investors, and persons specially related therewith transfer all of their stocks or equity shares to the employees of such enterprise (including its labor union) in such a manner as determined by Presidential Decree;16. Where the stockholders of a financial institution, etc. or a financial institution under Article 2 (1) 1 of the Financial Holding Companies Act and stockholders of a company which has close relations with financial business or a financial holding company under the same Act (hereinafter referred to as a “financial holding company”) transfers or exchanges stocks pursuant to Article 38-2;17. Deleted; <by Act No. 8146, Dec. 30, 2006>18. Where the Fund subject to Article 74 (3) transfers its purchased stock certificates through the securities market or electronic securities intermediary transactions;19. Where the mutual financing depositors protection fund and the agricultural cooperative’s property management company established under the Act on the Structural Improvement of Agricultural Cooperatives, transfer stock certificates or stakes acquired through the conversion into investment of the non-performance claims taken over from an insolvent agricultural cooperative or acquired directly from an insolvent agricultural cooperative in order to perform problem-solving services in aid of the insolvent agricultural cooperative;19-2. Where the Mutual Financing Depositors Protection Fund under the Act on the Structural Improvement of Fisheries Cooperatives transfers stock certificates or stakes acquired through the conversion into investment of the non-performance claims taken over from an insolvent fisheries cooperative association or acquired directly from an insolvent fisheries cooperative association in order to perform problem-solving services in aid of the insolvent fisheries cooperative association; and19-3. Where the Mutual Financial Depositors Protection Fund under the Structural Improvement of Forestry Cooperatives Act transfers stock certificates or stakes acquired by conversion of insolvent credit which it had taken over from an insolvent forestry cooperative to perform liquidation business of such insolvent forestry cooperative into investment or acquired directly.(2) The provisions of paragraph (1) shall, in the cases of the following subparagraphs, apply only to such stocks or equities as traded by transfer, withdrawal, incorporation, investment in kind, transfer of stocks, or exchange of stocks not later than the time limits specified in such subparagraphs: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6480, May 24, 2001; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Paragraph (1) 1, 2, 2-3, 15, and 18: December 31, 2009;2. Paragraph (1) 3, 4, 5, and 10: December 31, 2009;3. Deleted; and <by Act No. 6538, Dec. 29, 2001>4. Paragraph (1) 16: December 31, 2009.(3) The scope of controlling stockholders, investors and persons specially related therewith under paragraph (1) 15 shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 5996, Aug. 31, 1999>(4) Any person who intends to be eligible for the application of paragraph (1) shall apply for tax exemption as prescribed by Presidential Decree.

(1) Customs duties may be reduced for the articles that are difficult to be produced in Korea from among those falling under any of the following subparagraphs: <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7284, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Goods imported on or before December 31, 2009 for the construction works for high-speed railroads;2. Deleted; <by Act No. 6538, Dec. 29, 2001>3. Machinery and materials for the production of new and renewable energy and for the utilization thereof that are imported on or before December 31, 2009 pursuant to the provisions of subparagraph 1 of Article 2 of the Act on the Promotion of the Development and Use of New and Renewable Sources of Energy (including the machines and tools used for the manufacturing of the same machinery and materials);4. and 5. Deleted; <by Act No. 7003, Dec. 30, 2003>6. and 7. Deleted; <by Act No. 6538, Dec. 29, 2001>8. and 9. Deleted; <by Act No. 7003, Dec. 30, 2003>10. Digital television broadcasting equipment imported by a broadcasting business operator under subparagraph 3 of Article 2 of the Broadcasting Act or by an internet multimedia broadcasting business operator under subparagraph 5 of Article 2 of the Internet Multimedia Broadcast Services Act (limited to the equipment the import of which is reported not later than December 31, 2010);11. Goods imported by the Organizing Committee of the EXPO 2012 Yeosu Korea under Article 4 of the Special Act on Assistance to the EXPO 2012 Yeosu Korea for production and construction of facilities related to the EXPO or for management of the EXPO under subparagraph 1 of Article 2 of the same Act;12. Goods imported by the Organizing Committee of the 13th IAAF World Championships in Athletics-Daegu 2011 under Article 3 of the Assistance to the 13th IAAF World Championships in Athletics-Daegu 2011 and the Asian Games-Incheon 2014 Act, the local government or a construction contractor of facilities related to the same Athletics for production and construction of facilities related to the Athletics and for athletic management under Article 2 of the same Act (including machinery and materials for scientific training of athletes participating in the same Athletics); and13. Goods imported by the Organizing Committee for the Asian Games-Incheon 2014 under Article 3 of the Assistance to the 13th IAAF World Championships in Athletics-Daegu 2011 and the Asian Games-Incheon 2014, the local government or a construction contractor of facilities related to the same Games for production and construction of facilities related to the Games and for management of the Games under Article 2 of the same Act (including machinery and materials for scientific training of athletes participating in the same Games).(2) The articles eligible for the reduction of customs duties under paragraph (1) and the reduction rates thereof shall be determined by Ordinance of the Ministry of Strategy and Finance. <Amended by Act No. 8852, Feb. 29, 2008>(3) Where the articles for which customs duties were reduced under paragraph (1) are used for other purposes than those specified in subparagraphs of paragraph (1) during such a period as fixed by the Commissioner of the Korea Customs Service within 3 years from the date on which their import declaration was accepted (including a case where such articles have failed to be used for the relevant purposes throughout the period as fixed by the Commissioner of the Korea Customs Service), or where such articles are transferred to a person who is to use them for other purposes than the original purposes, the reduced customs duties shall be collected forthwith from such person who abused them for other purposes or such person who transferred them; however, if such customs duties are not collectible from the transferor, they shall be collected forthwith from the transferee: Provided, That the same shall not apply in cases where such articles were destroyed due to the occurrence of natural disasters or by such other causes as may be unavoidable or were exterminated with the approval of the director of the customshouse in advance. <Amended by Act No. 6762, Dec. 11, 2002>(4) The provisions of Article 103 (1) (proviso) of the Customs Act shall not apply to cases where the customs duties are collected under paragraph (3). <Amended by Act No. 6305, Dec. 29, 2000>

(1) Registrations at the registry office or other official registrations falling under any of the following subparagraphs shall be allowed to be exempted from the registration tax (in the cases of subparagraphs 13, 28, and 29, 50/100 of such tax shall be reduced). In such cases, the tax rate under Article 138 (1) of the Local Tax Act shall not apply: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6073, Dec. 31, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7066, Jan. 20, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008; Act No. 9584, Apr. 1, 2009>1. Registration of an investment in kind under the Act on the Contribution In-kind of State Properties;2. Registration of the property taken over by merger prescribed by Presidential Decree;3. Registration of the business assets taken over by a corporation established by, or surviving after, a consolidation or merger between the small or medium enterprises under Article 31;4. Deleted; <by Act No. 8146, Dec. 30, 2006>5. Where a corporation determined by Presidential Decree which belongs to the corporations established under a special Act, is reorganized into a company under the Commercial Act due to amendment or abrogation of the relevant special Act, the registration of the establishment of such corporation and the registration of the business assets acquired through such reorganization;6. Registration of the properties acquired by the Korea Asset Management Corporation (limited to such properties as determined by Presidential Decree);7. Registration of the assets acquired through investment in kind under Article 47-2 of the Corporation Tax Act;8. Deleted; <by Act No. 8827, Dec. 31, 2007>9. Deleted. <by Act No. 9272, Dec. 26, 2008>10. Registration of the properties acquired by such division as meets the requirements under subparagraphs of Article 46 (1) of the Corporation Tax Act (Article 47 (1) of the aforementioned Act in the case of a physical division);11. Registration of the properties acquired through the asset exchange under Article 50 of the Corporation Tax Act;12. Registration of the properties taken over by a financial institution under subparagraph 1 of Article 2 of the Act on the Structural Improvement of the Financial Industry, the Korea Asset Management Corporation, the Korea Deposit Insurance Corporation, or a reorganization financing institution from an insolvent financial institution subject to an order for timely adoption of corrective measures (limited to an order for business transfer or contract transfer) or a decision on contract transfer;13. Registration falling under any of the following items, which is made in cases where a special asset-backed investment management company under subparagraph 5 of Article 2 of the Asset-Backed Securitization Act (including a foreign corporation specialized in the asset-backed investment trust business; hereinafter referred to as the “special asset-backed investment management company”) takes over properties for asset-backed investment from an asset holder under subparagraph 2 of Article 2 of the aforementioned Act or from another special asset-backed investment management company, or manages, operates, or disposes of the properties that were taken over, not later than December 31, 2009 according to an asset-backed investment management plan registered under Article 3 of the aforementioned Act:(a) Registration for the transfer of the ownership of real estate;(b) Registration for the transfer of mortgages; and(c) Registration or provisional registration concerning an application for auction, provisional seizure, or provisional disposition;14. Deleted; <by Act No. 7322, Dec. 31, 2004>15. Registration which is made in cases where the Korea Deposit Insurance Corporation makes investment under Articles 8, 11 and 12 of the Act on the Structural Improvement of the Financial Industry;16. Registration falling under any of the following items, which is made in case the Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act (hereinafter referred to as the “Korea Housing Finance Corporation”) takes over housing mortgage credits from financial institutions or manages, operates, or disposes of the housing mortgage credits that were taken over, not later than December 31, 2009, according to a credit-backed securitization plan registered pursuant to Article 23 of the aforementioned Act:(a) Registration for the transfer of mortgages;(b) Registration or provisional registration concerning an application for auction, provisional seizure, or provisional disposition; and(c) Registration for the transfer of housing ownership by the exercise of mortgages;16-2. Deleted; <by Act No. 8146, Dec. 30, 2006>17. Registration of the properties acquired by the Savings Deposit Insurance Corporation or a reorganization financing institution (limited to properties determined by Presidential Decree);18. Deleted; <by Act No. 7003, Dec. 30, 2003>19. Registration which is made in cases where a financial holding company takes the transfer of stocks or exchanges stocks pursuant to Article 38;20. Registration falling under any of the following items, which is made in cases where a corporate restructuring investment company takes over assets under an agreement entered into pursuant to subparagraph 8 of Article 2 of the Corporate Restructuring Investment Companies Act from a creditor financial institution under subparagraph 1 of the same Article of the same Act, or manages, operates or disposes of the taken-over assets, not later than December 31, 2009:(a) Registration for the transfer of mortgages; and(b) Registration or provisional registration concerning an application for auction, provisional seizure, or provisional disposition;21. and 22. Deleted; <by Act No. 7003, Dec. 30, 2003>23. Registration of the properties acquired by the agricultural cooperative’s property management company under the Act on the Structural Improvement of Agricultural Cooperatives (limited to the properties as prescribed by Presidential Decree);24. Registration of the properties taken over by the cooperative under the Agricultural Cooperatives Act, the mutual financing depositors protection fund and the agricultural cooperative’s property management company under the Act on the Structural Improvement of Agricultural Cooperatives, from insolvent agricultural cooperatives subjected to orders for timely adoption of corrective measures (limited to the order on a business transfer or a contract transfer) or a decision on contract transfer;25. Registration of the properties acquired by the mutual financing depositors protection fund under the Act on the Structural Improvement of Agricultural Cooperatives (limited to the properties as prescribed by Presidential Decree);26. Registration of the properties acquired by the cooperative association under the Fisheries Cooperatives Act and the mutual financing depositors protection fund under the Act on the Structural Improvement of Fisheries Cooperatives from insolvent fisheries cooperatives subjected to orders for timely adoption of corrective measures (limited to orders for a business transfer or a contract transfer) or a decision on contract transfer;27. Registration of the properties acquired by the mutual financing depositors protection fund under the Act on the Structural Improvement of Fisheries Cooperatives (limited to the properties as determined by Presidential Decree);28. Registration of the properties (limited to the properties sold by an enterprise in the process of restructuring for the purpose of its restructuring or financial structure improvement) acquired by the Korea Asset Management Corporation from a corporation and its affiliated enterprises (hereafter referred to as “enterprises in the process of restructuring” in this subparagraph) seeking a corporate restructuring or an improvement of financial structure, including merger, conversion, reorganization, etc. under Article 26 (1) 5 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of the Korea Asset Management Corporation;29. Registration of the properties (limited to the properties sold by an enterprise subject to corporate restructuring for the purpose of its restructuring) acquired by a corporate restructuring association registered in accordance with Article 15 of the Industrial Development Act (referring to the Industrial Development Act prior to the whole amendment by Act No. 9584) from an enterprise subject to corporate restructuring under Article 14 (4) of the same Act on or before December 31, 2009; and30. Deleted. <by Act No. 8146, Dec. 30, 2006>(2) Deleted. <by Act No. 9272, Dec. 26, 2008>(3) Registration falling under any of the following subparagraphs shall be exempted from the registration tax: Provided, That in the case of subparagraph 1, if the relevant property is not used directly for the relevant business, is used for other purpose or is disposed of (including its rent; hereafter the same shall apply in this paragraph) without any justifiable grounds within two years from the date on which the property is registered or if the relevant property is not used directly for the relevant business, is used for other purpose or is disposed of without any justifiable grounds for two years from the date on which the property is first used, the tax amount exempted therefrom shall be additionally collected: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6762, Dec. 11, 2002; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Registration of business property that any small or medium start-up enterprise or any small or medium start-up venture enterprise acquires to run its business within four years from the date of the starting of business (referring to the date on which it is certified as a venture enterprise, in case of the small or medium start-up venture enterprise; hereinafter the same shall apply);2. Registration of incorporation of newly established small and medium enterprises (including increased capital or contribution within four years from the establishment date of business);2-2. Registration due to change of domicile of a corporation or domicile of the representative director within four years from the establishment date of newly established small and medium enterprises; and3. Registration of the incorporation within 6 months from the date when a small or medium enterprise has been certified as a venture business in the process of starting business pursuant to Article 2 (1) 4 (a) of the Act on Special Measures for the Promotion of Venture Businesses.(4) Registration of business properties acquired through the investment in kind or the business transfer or takeover pursuant to Article 32 shall be exempted from the registration tax: Provided, That, if such business is closed or the properties concerned are disposed of (including its rent) within two years from the date of registration without any justifiable ground prescribed by Presidential Decree, the amount of tax exempted there from shall be additionally collected. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 8146, Dec. 30, 2006>(5) Where a corporation is formed in order to carry out a structural reorganization for the electric power industry and the gas industry as prescribed by Presidential Decree, the tax rate under Article 138 (1) of the Local Tax Act shall not apply, and an amount equivalent to 50/100 of the tax amount computed by applying the tax rate under Article 137 (1) 1 of the same Act shall be reduced, in imposing registration tax on registration to make it incorporated. <Newly Inserted by Act No. 6045, Dec. 28, 1999; Act No. 6538, Dec. 29, 2001>(6) With respect to the registration of real estate falling under any of the following subparagraphs (excluding the real estate falling under any of subparagraphs of Article 112 (2) of the Local Tax Act; hereafter the same shall apply in this paragraph and Article 120 (4)), a tax amount equivalent to 50/100 of the registration tax shall be reduced. In such cases, the tax rate under Article 138 (1) of the Local Tax Act shall not apply: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 8966, Mar. 21, 2008; Act No. 9272, Dec. 26, 2008>1. Any real estate that is acquired on or before December 31, 2009 by a real estate investment company under the Real Estate Investment Company Act (hereafter referred to as a “real estate investment company” in this Article and Article 120);2. Any real estate that is acquired on or before December 31, 2009 as collective investment property of a real estate collective investment scheme (hereinafter referred to as a “real estate collective investment scheme”) prescribed by the Financial Investment Services and Capital Markets Act;3. Any real estate that is acquired by any company under Article 51-2 (1) 6 of the Corporation Tax Act (hereafter referred to as a “project financial investment company” in this Article and Article 120 (4)); and4. Any real estate that is acquired on or before December 31, 2009 by a special-purpose corporation under Article 17 (1) 2 of the Rental Housing Act.(7) Where any investment company, any ship investment company, any corporate restructuring investment company, any real estate investment company, any special-purpose corporation under Article 17 (1) 2 of the Rental Housing Act, any project financial investment company, any private equity fund or special purpose company under the Financial Investment Services and Capital Markets Act, or any company specializing in a cultural industry under the Framework Act on the Promotion of Cultural Industries registers its incorporation (including a case where they increase their capitals or investments within 5 years after their incorporation) on or before December 31, 2009, the tax rate under Article 138 (1) of the Local Tax Act shall not apply to such registration. <Newly Inserted by Act No. 6273, Oct. 21, 2000; Act No. 6480, May 24, 2001; Act No. 6501, Aug. 14, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 8966, Mar. 21, 2008; Act No. 9272, Dec. 26, 2008>

(1) The acquisition of properties falling under any of the following subparagraphs shall be exempted from the acquisition tax (it shall be allowed a reduction of 50/100 thereof in the cases of subparagraphs 12, 24 and 25): <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6073, Dec. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7066, Jan. 20, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Properties invested in kind under the Act on the Contribution In kind of State Properties;2. Business properties which are taken over by a corporation formed by, or surviving after, consolidation or merger between the small or medium enterprises under Article 31;3. Deleted; <by Act No. 8146, Dec. 30, 2006>4. Business properties acquired through an organizational change under Article 119 (1) 5;5. Properties acquired by the Korea Asset Management Corporation pursuant to Article 119 (1) 6;6. Properties acquired through an investment in kind under Article 47-2 of the Corporation Tax Act;7. Deleted; <by Act No. 8827, Dec. 31, 2007>8. Deleted; <by Act No. 9272, Dec. 26, 2008>9. Properties acquired through a corporate division satisfying requirements set forth in subparagraphs of Article 46 (1) of the Corporation Tax Act (Article 47 (1) of the same Act, in the case of the split-off);10. Properties acquired through an asset exchange under Article 50 of the Corporation Tax Act;11. Properties taken over by a financial institution under subparagraph 1 of Article 2 of the Act on the Structural Improvement of the Financial Industry, the Korea Asset Management Corporation, the Korea Deposit Insurance Corporation, or a reorganization financing institution from an insolvent financial institution subject to orders for timely adoption of corrective measures (limited to an order for business transfer or contract transfer) or a decision on contract transfer;12. Real estate acquired by an asset-backed investment management company on or before December 31, 2009 pursuant to Article 119 (1) 13;13. Deleted; <by Act No. 7322, Dec. 31, 2004>14. Deleted; <by Act No. 8146, Dec. 30, 2006>15. Housing acquired by the Korea Housing Finance Corporation in accordance with Article 119 (1) 16;15-2. Deleted; <by Act No. 8146, Dec. 30, 2006>16. Properties acquired by the Savings Deposit Insurance Corporation or a reorganization financing institution pursuant to Article 119 (1) 17;17. and 18. Deleted; <by Act No. 7003, Dec. 30, 2003>19. Properties acquired by the agricultural cooperative’s property management company under the Act on the Structural Improvement of Agricultural Cooperatives under Article 119 (1) 23;20. Properties taken over by the cooperatives under the Agricultural Cooperatives Act, the mutual financing depositors protection fund, and the agricultural cooperative’s property management company under the Act on the Structural Improvement of Agricultural Cooperatives, from insolvent agricultural cooperatives subject to orders for timely adoption of corrective measures (limited to an order on business transfer or contract transfer) or a decision on contract transfer;21. Properties acquired by the mutual financing depositors protection fund under the Act on the Structural Improvement of Agricultural Cooperatives in accordance with Article 119 (1) 25;22. Properties acquired by the cooperative association under the Fisheries Cooperatives Act and the mutual financing depositors protection fund under the Act on the Structural Improvement of Fisheries Cooperatives from insolvent fisheries cooperatives subjected to orders for timely adoption of corrective measures (limited to orders for a business transfer or a contract transfer) or a decision on contract transfer;23. Properties acquired by the mutual financing depositors protection fund under the Act on the Structural Improvement of Fisheries Cooperatives in accordance with Article 119 (1) 27;24. Properties acquired by the Korea Asset Management Corporation in accordance with Article 119 (1) 28; and25. Properties acquired by the special company for corporate restructuring or the corporate restructuring association on or before December 31, 2009 in accordance with Article 119 (1) 29.(2) Deleted. <by Act No. 9272, Dec. 26, 2008>(3) Business properties acquired by any small or medium start-up enterprise or any small or medium start-up venture enterprise in order to operate the business concerned within four years from the date of starting such business shall be exempted from the acquisition tax: Provided, That if the relevant property is not used directly for the relevant business, is used for other purpose or is disposed of (including its rent; hereafter the same shall apply in this paragraph) without any justifiable grounds within two years from the date on which the property is acquired or if the relevant property is not used directly for the relevant business, is used for other purpose or is disposed of without any justifiable grounds for two years from the date on which the property is first used, the tax amount exempted therefrom shall be additionally collected. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6762, Dec. 11, 2002; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8827, Dec. 31, 2007>(4) With respect to the real estate falling under any of the following subparagraphs, a tax amount equivalent to 50/100 of the acquisition tax shall be reduced: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 8966, Mar. 21, 2008; Act No. 9272, Dec. 26, 2008>1. Any real estate acquired by a real estate investment company on or before December 31, 2009;2. Any real estate acquired on or before December 31, 2009 as collective investment property of a real estate collective investment scheme;3. Any real estate that is acquired by any project financial investment company; and4. Any real estate that is acquired on or before December 31, 2009 by a special-purpose corporation under Article 17 (1) 2 of the Rental Housing Act.(5) Business properties acquired through the investment in kind or the business transfer or takeover pursuant to Article 32 shall be exempted from acquisition tax: Provided, That, if such business is closed, or such properties are disposed of (including their rent), within two years from the date of acquisition without such justifiable reasons determined by Presidential Decree, the tax amount reduced or exempted shall be additionally collected. <Amended by Act No. 6762, Dec. 11, 2002; Act No. 8146, Dec. 30, 2006>(6) Article 105 (6) of the Local Tax Act shall not apply to the relevant oligopoly stockholder in cases where a stockholder falls under an oligopoly stockholder under subparagraph 2 of Article 22 of the same Act by a reason falling under any of the following subparagraphs: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6073, Dec. 31, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 9272, Dec. 26, 2008>1. Deleted. <by Act No. 9272, Dec. 26, 2008>2. Where a stockholder acquires stocks or equity shares from an insolvent financial institution through a takeover by a third party, an order for contract transfer, or a decision on contract transfer under Article 10 of the Act on the Structural Improvement of the Financial Industry;3. Deleted. <by Act No. 9272, Dec. 26, 2008>4. Where a financial institution acquires stocks or equity shares of a corporation in connection with the conversion of its loans to the corporation into equity investments;5. Deleted. <by Act No. 9272, Dec. 26, 2008>6. Deleted. <by Act No. 9272, Dec. 26, 2008>7. Where the securities transaction tax is exempted under Article 117 (1) 15;8. Where a corporation becomes a holding company under the Monopoly Regulation and Fair Trade Act (including a financial holding company) or a holding company acquires stocks of its subsidiary under the same Act or the Financial Holding Companies Act;9. Where the Savings Deposit Insurance Corporation or a reorganization financing institution acquires stocks or equity shares pursuant to Articles 36-5 (1), 38 and 38-2 of the Depositor Protection Act;10. Where the Korea Asset Management Corporation acquires stocks or equity shares through the conversion into equity investment of the claims taken over pursuant to Article 26 (1) 1 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation;11. Where a corporate restructuring investment company acquires stocks or equity shares of an enterprise that has entered into an agreement under the Corporate Restructuring Investment Companies Act;12. Where the agricultural cooperative’s property management company under the Act on the Structural Improvement of Agricultural Cooperatives acquires stocks or equity shares through the conversion into investment of the non-performing assets taken over under subparagraph 3 (c) of Article 30 of the same Act; and13. Where a corporate restructuring association acquires stocks or equity shares of an enterprise subject to corporate restructuring.

With respect to any business property owned by any small or medium start-up enterprise or any small or medium start-up venture enterprise, which is used directly for the relevant business (in the case of any land attached to a building, the portion of such land that are not wider than the standard factory location area prescribed by Presidential Decree or that are not more than the applicable multiplication rate by specific use area prescribed by Presidential Decree), a tax amount equivalent to 50/100 of the property tax shall be abated or exempted for five years from the date of the starting of business. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7332, Jan. 5, 2005; Act No. 8146, Dec. 30, 2006>

(1) A foreigner’s investment to carry on a business falling under any of the following subparagraphs (referring to the foreigner’s investment under Article 2 (1) 4 of the Foreign Investment Promotion Act; hereafter in this Chapter, the same shall apply), which meets the standards prescribed by Presidential Decree, shall be eligible for the reduction of or exemption from each of corporation tax, income tax, acquisition tax, registration tax and property tax under paragraphs (2) through (5) and (12): <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act Nos. 7281 & 7322, Dec. 31, 2004; Act No. 7332, Jan. 5, 2005; Act No. 7849, Feb. 21, 2006; Act No. 9272, Dec. 26, 2008>1. Business of industrial support service that is vital to the strengthening of the international competitiveness of domestic industries and business accompanying a high-level technology;2. Businesses going through deliberation and resolution of the committees under the following items as businesses which are conducted by foreign investment enterprises moving into the foreign investment zone under Article 18 (1) 2 of the Foreign Investment Promotion Act and businesses which are conducted by foreign investment enterprises from among the businesses under subparagraph 2-2, Article 121-8 (1) or 121-9 (1) 1:(a) In case of business under subparagraph 2-2, the Free Economic Zones Committee under Article 25 of the Special Act on Designation and Management of Free Economic Zones;(b) In case of business under Article 121-8 (1), the Jeju Special Self-Governing Province Supporting Committee under Article 7 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities; and(c) In case of business under Article 121-9 (1) 1, the Jeju Free International Cities Master Plan Council under Article 226 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities.2-2. Business that is run by a foreign-capital invested company located in a free economic zone as referred to in subparagraph 1 of Article 2 of the Special Act on Designation and Management of Free Economic Zones;2-3. Business that is run by a foreign-capital invested company which is a free economic zone development project undertaker under Article 9 (1) of the Special Act on Designation and Management of Free Economic Zones;2-4. Business that is run by a foreign-capital invested company designated as an undertaker of the project for the development of Jeju investment promotion zone in accordance with Article 217 of the Special Act on the Establishment of Jeju Special Self-GoverningProvince and the Development of Free International Cities;2-5. Business that is run by any foreign-capital invested company located in the foreign investment area under Article 18 (1) 1 of the Foreign Investment Promotion Act;2-6. Business that is run by any foreign-capital invested company located in any enterprise city development zone under subparagraph 2 of Article 2 of the Special Act on the Development of Enterprise Cities (hereinafter referred to as the “enterprise city development zone”);2-7. Business that is run by any foreign-capital invested company designated as an undertaker of the enterprise city development project (hereinafter referred to as the “undertaker of the enterprise city development project”) in accordance with Article 10 (1) of the Special Act on the Development of Enterprise Cities and that implements the enterprise city development project under subparagraph 3 of Article 2 of the same Act; and3. Business to which a tax reduction or exemption is inevitably allowed in order to attract foreigners’ investment and which is prescribed by Presidential Decree.(2) The reduction of or exemption from corporation tax or income tax on the foreign-capital invested company under Article 2 (1) 6 of the Foreign Investment Promotion Act (hereafter in this Chapter, referred to as the “foreign-capital invested company”) shall be applicable only to income derived by carrying on a business eligible for reduction or exemption under paragraph (1); however, for the taxable years ending within five years from the beginning date of the taxable year wherein an income has been derived from such business for the first time since the date of the starting of such business (when no income accrues from the relevant business by the taxable year whereto belongs the date on which 5 years lapse from the commencement of the business, the taxable year to which the date on which 5 years lapse belongs), the foreign-capital invested company shall be allowed an exemption from the total of an amount (hereafter in this paragraph and paragraph (12) 1 and 2, referred to as the “tax amount subject to reduction or exemption”) obtained by multiplying an amount equivalent to corporation tax or income tax on such business income (referring to the amount obtained by multiplying the gross computed tax amount by a percentage of the gross tax base which is represented by such income derived by carrying on the business falling under any subparagraphs of paragraph (1)) by the ratio of the foreigner’s investment (referring to the ratio of the investment of foreigners calculated under the Presidential Decree taking into account the kinds of stocks issued by the foreign-capital invested company; hereafter in this Chapter, the same shall apply); for the taxable year ending within two years thereafter, a tax amount equivalent to 50/100 of the tax amount subject to reduction or exemption shall be reduced: Provided, That with respect to income derived by carrying on a business eligible for reduction or exemption under paragraph (1) 2-2, 2-3, 2-4 through 2-7 and 3, it shall be exempted from the total of the tax amount subject to reduction or exemption for the taxable years ending within three years from the taxable year wherein an income has been derived from the operation of such business for the first time since the date of the starting of the business (when no income accrues from the relevant business by the taxable year whereto belongs the date on which 5 years lapse from the commencement of the business, the taxable year to which the date on which 5 years lapse belongs) for the taxable year ending within two years thereafter, a tax amount equivalent to 50/100 of the tax amount subject to reduction or exemption shall be reduced. In this case, if a foreign-capital invested company is merged during the period of tax reduction or exemption with a domestic corporation (excluding any other foreign-capital invested company under the application of the period of tax reduction or exemption) and thereby there occurs a decrease in the ratio of foreigner’s investment in the merged corporation concerned, the ratio of foreigner’s investment in the foreign-capital invested company before the merger shall be applied in computing the tax amount subject to reduction or exemption. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005>(3) The corporation tax or income tax on dividends derived from stocks or equities (hereafter in this Chapter, referred to as the “stocks, etc.”) acquired by a foreign investor under Article 2 (1) 5 of the Foreign Investment Promotion Act (hereafter in this Chapter, referred to as the “foreign investor”) shall be reduced or exempted in proportion to a percentage of the gross income for each taxable year of the foreign-capital invested company concerned which is represented by income derived from its operation of the business eligible for reduction of or exemption from corporation tax or income tax under paragraph (1); however, for a period for which the total tax amount subject to reduction of or exemption from corporation tax or income tax is exempted under paragraph (2), he shall be allowed an exemption from the total tax amount, and for a period for which a tax amount equivalent to 50/100 of the tax amount subject to reduction of or exemption from corporation tax or income tax is reduced under paragraph (2), he shall be allowed a reduction of a tax amount equivalent to 50/100.(4) With respect to acquisition tax, registration tax and property tax on the properties acquired and held by a foreign-capital invested company in order to carry on a reported business, an amount of such tax shall be reduced or a specified amount shall be deducted from its tax base in such manner as set forth in the following subparagraphs: Provided, That where a local government extends the period of reduction, exemption, or deduction up to 15 years or increases the rate of reduction, exemption or deduction within the extended period under the conditions as prescribed by the Municipal Ordinance as referred to in Article 9 of the Local Tax Act, such reduction, exemption, or deduction shall, notwithstanding the provisions of subparagraphs 1 and 2, be governed by such extended period or increased rate: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7332, Jan. 5, 2005>1. As for acquisition tax, registration tax, or property tax, a foreign-capital invested company shall, within five years from the date of the starting of business, be allowed an exemption from the total of an amount (hereafter in this paragraph, paragraphs (5) and (12) 3 and 4, referred to as the “tax amount subject to reduction or exemption”) obtained by multiplying a computed amount of tax on the properties concerned by the ratio of foreigner’s investment and a tax amount equivalent to the 50/100 of the tax amount subject to reduction or exemption shall be reduced within two years thereafter: Provided, That with respect to acquisition tax, registration tax, and property tax on the properties acquired and held in order to carry on a business eligible for reduction or exemption under paragraph (1) 2-2, 2-3, 2-4 through 2-7 and 3, the foreign-capital invested company shall, within three years from the date of the starting of business, be allowed an exemption from the total of the tax amount subject to reduction or exemption; within two years thereafter, it shall be allowed a reduction of a tax amount equivalent to 50/100 of the tax amount subject to reduction or exemption; and2. As for property tax on land, a foreign-capital invested company shall be allowed to deduct from tax base the total of an amount (hereafter in this paragraph, paragraphs (5) and (12) 3 and 4, referred to as the “amount subject to deduction”) obtained by multiplying a tax base on the properties by the ratio of foreigner’s investment for five years from the date of the starting of business; for two years thereafter, an amount equivalent to the 50/100 of the amount subject to deduction shall be deducted from the tax base: Provided, That with respect to property tax on the properties acquired and held in order to carry on a business eligible for reduction or exemption under paragraph (1) 2-2, 2-3, 2-4 through 2-7 and 3, the foreign-capital invested company shall, for three years from the date of the starting of business, be allowed to deduct the total of the amount subject to deduction from the tax base; for two years thereafter, an amount equivalent to the 50/100 of the amount subject to deduction shall be deducted from the tax base.(5) If a foreign-capital invested company acquires and holds a property before the date of the starting of business in order to carry on any business falling under each subparagraph of paragraph (1), notwithstanding paragraph (4), it shall be allowed a reduction of or exemption from acquisition tax, registration tax and property tax on such properties, or a specified amount shall be deducted from its tax base, in such manner as set forth in the following subparagraphs: Provided, That where a local government extends the period of reduction, exemption, or deduction up to 15 years or increases the rate of reduction, exemption or deduction within the extended period under the conditions as prescribed by the Municipal Ordinance as referred to in Article 9 of the Local Tax Act, such reduction, exemption or deduction shall, notwithstanding the provisions of subparagraphs 2 and 3, be governed by such extended period or increased rate: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7332, Jan. 5, 2005>1. For the acquisition tax and registration tax on the property acquired after the date on which a decision on tax reduction or exemption under paragraph (8) was notified, the total tax amount subject to reduction or exemption shall be exempted;2. For property tax for five years from the date of the acquisition of such properties, the total tax amount subject to reduction or exemption shall be exempted, and for two years thereafter, the amount equivalent to 50/100 of the tax amount subject to reduction or exemption shall be reduced: Provided, That with respect to property tax on the properties acquired and held in order to carry on a business eligible for reduction or exemption under paragraph (1) 2-2, 2-3, 2-4 through 2-7 and 3, the foreign-capital invested company shall, for three years from the date of the acquisition of the properties, be allowed an exemption from the total of the tax amount subject to reduction or exemption; for two years thereafter, it shall be allowed a reduction of the amount equivalent to 50/100 of the tax amount subject to reduction or exemption; and3. For the property tax on land, the entire amount subject to deduction for 5 years from the date of acquiring the relevant property, and the amount equivalent to 50/100 of the amount subject to deduction for two years thereafter, shall be deducted from the tax base: Provided, That for the property tax on the properties acquired and held in order to carry on a business eligible for reduction or exemption under paragraph (1) 2-2, 2-3, 2-4 through 2-7 and 3, the entire amount subject to deduction for three years from the date of the acquisition of the properties concerned, and the amount equivalent to 50/100 of the amount subject to deduction for two years thereafter shall be deducted from the tax base.(6) Any foreign investor or a foreign-capital invested company that intends to be subjected to the tax reduction or exemption under paragraphs (2) through (5) and (12) shall make an application for tax reduction or exemption to the Minister of Strategy and Finance not later than the closing date of the taxable year whereto belongs the date of commencing the business of relevant foreign-capital invested company: Provided, That, where any foreign investor or foreign-capital invested company alters the business contents subjected to a decision on tax reduction or exemption under paragraph (8) and intends to have any reduction or exemption applied to the modified business, he or it shall make an application for modification of contents of tax reduction or exemption to the Minister of Strategy and Finance not later than the date on which 2 years elapse from the date on which the causes for the relevant modification occur, and where a decision on modification of the contents of tax reduction or exemption is made thereon, the content of relevant decision on modification shall apply only to the remainder of the original reduction or exemption period. <Amended by Act No. 6583, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005; Act No. 8852, Feb. 29, 2008>(7) A foreigner (referring to the “foreigner” under Article 2 (1) 1 of the Foreign Investment Promotion Act), foreign investor or foreign-capital invested company may request the Minister of Strategy and Finance to confirm whether a business intended to run is subject to tax reduction or exemption under paragraph (1), before making a report under Article 5 (1) of the Foreign Investment Promotion Act. <Amended by Act No. 8852, Feb. 29, 2008>(8) The Minister of Strategy and Finance shall, upon receipt of an application for tax reduction or exemption, or for modification of contents of tax reduction or exemption under paragraph (6), or a request for the confirmation in advance under paragraph (7), decide on whether the tax amount can be reduced or exempted, the contents of reduction or exemption can be modified, or the business can be subject to the tax reduction or exemption in consultation with the competent Minister, and shall notify the applicant accordingly: Provided, That he shall consult with the head of local government having jurisdiction over the relevant business place about the reduction or exemption of the acquisition tax, registration tax and property tax under paragraphs (4), (5) and (12) 3 and 4. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7332, Jan. 5, 2005; Act No. 8852, Feb. 29, 2008>(9) The provisions of paragraphs (2) through (5) and (12) shall not apply to the foreigner’s investment under Article 2 (1) 8 (g) of the Foreign Investment Promotion Act, or Article 6 of the same Act. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>(10) Where a foreign investor or foreign-capital invested company obtains a decision on reduction or exemption under paragraph (8) by applying for reduction or exemption after an expiry of the time limit for application for reduction or exemption under paragraph (6), the provisions of paragraphs (1) through (5) and (12) shall apply only to the taxable year whereto belongs the date of such application, and to the remainder of reduction or exemption period thereafter. In this case, where there exists any tax amount already paid prior to a decision on reduction or exemption under paragraph (8), the relevant tax amount shall not be refunded. <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>(11) Where a Korean national (excluding a person permanently residing overseas who has obtained a denizenship or similar sojourn permit in his residence country) or a domestic corporation (hereafter in this paragraph, referred to as “Korean national, etc.”) owns directly or indirectly the voting stocks or equities of a foreign corporation or foreign enterprise, and the relevant foreign corporation or foreign enterprise makes a foreigner’s investment eligible for tax reduction or exemption under this Article through Article 121-4, the portion that is prescribed by Presidential Decree taking into account the stockholding ratio of the Korean national, etc. in the relevant foreign corporation or foreign enterprise shall not be considered to be subject to tax reduction or exemption. <Newly Inserted by Act No. 6297, Dec. 29, 2000>(12) With respect to the foreigner’s investment which is made in such a method as prescribed by Presidential Decree such as business take-over from among the foreigner’s investment in the business stipulated in paragraph (1) 1, the corporation tax, income tax, acquisition tax, registration tax and property tax shall be respectively reduced or exempted under the conditions as stipulated in the following subparagraphs, notwithstanding the reduction or exemption period, deduction period and reduction or exemption ratio or deduction ratio under paragraphs (2) through (5): Provided, That in applying the provisions of subparagraphs 3 and 4, where the local government extends the reduction or exemption period or deduction period up to 10 years under the conditions as determined by the Municipal Ordinance under Article 9 of the Local Tax Act, or elevates the reduction or exemption ratio or deduction ratio within the extended period, it shall be governed by such period and ratio, notwithstanding the provisions of subparagraphs 3 and 4: <Newly Inserted by Act No. 6538, Dec. 29, 2001; Act No. 7332, Jan. 5, 2005; Act No. 7839, Dec. 31, 2005>1. The reduction of or exemption from the corporation tax and income tax on a foreign-capital invested company shall be applicable only to the income accruing from carrying on the business subject to reduction or exemption under paragraph (1) 1, but 50/100 of the tax amount subject to the reduction or exemption for the taxable year ending within 3 years from the beginning date of the taxable year wherein an income has been derived from such business for the first time (when no income accrues from the relevant business by the taxable year whereto belongs the date on which 5 years lapse from the date on which the business commences, the taxable year to which the date on which 5 years lapse belongs), and 30/100 of the tax amount subject to reduction or exemption for the taxable year ending within 2 years thereafter, shall be respectively reduced or exempted;2. Corporation tax or income tax on the dividend accruing from the stocks acquired by foreign investors shall be reduced or exempted pursuant to the ratio of revenues of the foreign-capital invested company accrued from carrying on the business subject to an reduction or exemption of corporation tax or income tax under paragraph (1) 1 to the revenues for each taxable year of the said company; however, for the period wherein the tax amount equivalent to 50/100 of the tax amount subject to reduction or exemption of corporation tax or income tax is reduced under subparagraph 1, the tax amount equivalent to 50/100 shall be reduced; for the period wherein the tax amount equivalent to 30/100 of the tax amount subject to reduction or exemption of corporation tax or income tax is reduced under subparagraph 1, the tax amount equivalent to 30/100 shall be reduced;3. For the acquisition tax, registration tax and property tax on the properties acquired and retained for carrying on the business under paragraph (1) 1 by the foreign-capital invested company, the said tax amount shall be reduced or exempted or a specified amount shall be deducted from its tax base according to the classifications falling under each of the following items:(a) For the acquisition tax, registration tax and property tax, 50/100 of the tax amount subject to reduction or exemption for 3 years from the date of commencing the business, and 30/100 of the tax amount subject to reduction or exemption for 2 years thereafter, shall be respectively reduced; and(b) For the property tax on land, 50/100 of the amount subject to deduction for 3 years from the date of commencing the business, and 30/100 of the amount subject to deduction for 2 years thereafter, shall be respectively deducted from the tax base; and4. For the acquisition tax, registration tax and property tax on any properties acquired and retained by the foreign-capital invested company prior to the date of commencing the business for the purpose of using them in such business as provided for in paragraph (1) 1, the said tax amount shall be reduced or exempted or a specified amount shall be deducted from its tax base pursuant to the classifications falling under each of the following items:(a) For the acquisition tax and registration tax on the property acquired after the date of receiving a decision of tax reduction or exemption under paragraph (8), 50/100 of the tax amount subject to reduction or exemption shall be reduced;(b) For the property tax, 50/100 of the tax amount subject to reduction or exemption for 3 years from the date of acquiring the relevant property, and 30/100 of that subject to reduction or exemption for 2 years thereafter, shall be respectively reduced; and(c) For the property tax on land, 50/100 of the amount subject to deduction for 3 years from the date of acquiring the relevant property, and 30/100 of the amount subject to deduction for 2 years thereafter, shall be respectively deducted from the tax base.(13) In case where first investments (including capital increase) are not made by the date on which 3 years lapse from the date on which the first notice concerning the decision on the tax reduction or exemption is served after reporting the foreign investments, the effect of the decision on the tax reduction or exemption provided for in the provisions of paragraph (8) shall be made invalid. <Newly Inserted by Act No. 7839, Dec. 31, 2005>[This Article Newly Inserted by Act No. 5982, May 24, 1999]

(1) Of the following capital goods which are needed for the use of the businesses as set forth in Article 121-2 (1) 1 and 2 (referring to the “capital goods” under Article 2 (1) 9 of the Foreign Investment Promotion Act; hereafter the same shall apply in this Chapter), those as determined by Presidential Decree, which are imported in obedience to the contents as reported under Article 5 (1) of the Foreign Investment Promotion Act, shall be exempted from customs duties, individual consumption tax, and value-added tax thereon: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8827, Dec. 31, 2007>1. Capital goods that a foreign-capital invested company brings in with a foreign or domestic means of payment it has obtained as equity investment from a foreign investor; and2. Capital goods that a foreign investor brings in as objects for investment purposes falling under Article 2 (1) 8 of the Foreign Investment Promotion Act (hereafter referred to as the “objects for investment purposes” in this Chapter).(2) Of the capital goods which are needed for the use of the businesses as set forth in Article 121-2 (1) 2-2, 2-3, 2-4, 2-5 and 3, those as determined by Presidential Decree, which are imported according to their contents as reported under Article 5 (1) of the Foreign Investment Promotion Act, shall be exempted from customs duties thereon. <Newly Inserted by Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004>(3) Where a foreign investor or a foreign-capital invested company intends to be eligible for the exemption from customs duties, individual consumption tax, and value-added tax under paragraph (1) or the exemption from customs duties under paragraph (2), he or it shall make an application for tax exemption under the conditions as prescribed by Ordinance of the Ministry of Strategy and Finance. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 8827, Dec. 31, 2007; Act No. 8852, Feb. 29, 2008>(4) The provisions of paragraph (1) shall not apply to the case of a foreigner’s investment under Article 6 of the Foreign Investment Promotion Act.[This Article Newly Inserted by Act No. 5982, May 24, 1999]

(1) Where a foreign-capital invested company increases its capital, the provisions of Articles 121-2 and 121-3 shall apply mutatis mutandis to the tax reduction or exemption for the portion of relevant capital increase: Provided, That the consultation with the competent Minister or the head of the local government under Article 121-2 (8) may be omitted for an application for tax reduction or exemption that meets the standards as prescribed by Presidential Decree.(2) As regards the stocks, etc. acquired by a foreign investor due to the capitalization of a reserve, a reserve for revaluation under Article 7 (1) 1 of the Foreign Investment Promotion Act or of the reserves under other Acts or subordinate statutes, the reduction or exemption shall be made during the remainder of their reduction or exemption period and by the ratio of reduction or exemption for the relevant remaining period, in conformity with the examples of reduction or exemption for the stocks, etc. which form a ground for such occurrences.(3) In applying the provisions of paragraph (1), the date of commencing a business shall be the date on which a modified registration on the capital increase is filed.(4) Notwithstanding the provisions of paragraph (1), in case where any foreign-capital invested company increases its capital within the scope of the reported foreign investment amount that is confirmed when the decision on the tax reduction or exemption is made prior to the date on which 3 years lapse from the date on which 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 reducing or exempting the tax pursuant to the provisions of Article 121-2 (6), the foreign-capital invested company shall be deemed eligible for the decision on the tax reduction or exemption provided for in the provisions of Article 121-2 (8) for the portion of the increased capital. <Newly Inserted by Act No. 7839, Dec. 31, 2005>[This Article Newly Inserted by Act No. 5982, May 24, 1999]

(1) In case where any foreign investor or any foreign-capital invested company for whom or for which the corporation tax or the income tax is reduced or exempted pursuant to the provisions of Article 121-2 (2) and (12) falls under any case of the following subparagraphs, such foreign investor or such foreign-capital invested company shall pay the income tax or the corporation tax that is added by the tax amount that is calculated under the conditions as prescribed by Presidential Decree and the additional amount equivalent to the interest that is calculated under the conditions as prescribed by Presidential Decree at the time when he or it files a return of the tax base of the taxable year whereto belongs the date on such case accrues and the relevant tax amount shall be deemed the payable tax amount pursuant to the provisions of Article 76 of the Income Act or the provisions of Article 64 of the Corporation Tax: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005>1. Where a registration is revoked under Article 21 (3) of the Foreign Investment Promotion Act;2. Where the standards for tax reduction or exemption under the main sentence of Article 121-2 (1) become not satisfied;3. Where a person, who has received a corrective order under Article 28 (5) of the Foreign Investment Promotion Act as he failed to implement the contents of reports, fails to comply with it;4. Where a foreign investor transfers the stocks, etc. which he owns under this Act to a national or a corporation of the Republic of Korea;5. Where the relevant foreign-capital invested company closes down its business; and6. Where the payment of investment in subject matters and the introduction of loans provided for in Article 2 (1) 4 (b) of the Foreign Investment Promotion Act fall short of the standards for the tax reduction or exemption provided for in Article 121-2 (1) within 3 years after making a report on foreign investment.(2) The director of customs office or the head of tax office shall additionally collect the customs duties, individual consumption tax and value-added tax that have been exempted under Article 121-3, under the conditions as prescribed by Presidential Decree, in any case of the following subparagraphs: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7322, Dec. 31, 2004; Act No. 8827, Dec. 31, 2007>1. Where a registration is revoked under Article 21 (3) of the Foreign Investment Promotion Act;2. Where the subject-matter of investment is used for other purpose than the reported ones or disposed of;3. Where a foreign investor transfers the stocks, etc. which he owns under this Act to a national or a corporation of the Republic of Korea;4. Where the relevant foreign-invested enterprise closes down its business; and5. Where the payment of investment in subject matters and the introduction of loans under Article 2 (1) 4 (b) of the Foreign Investment Promotion Act fall short of the standards for the tax reduction or exemption under Article 121-2 (1) within 3 years after making a report on foreign investment.(3) The head of local government shall, as prescribed by Presidential Decree, additionally collect the acquisition tax, registration tax and property tax that have been abated or exempted under Article 121-2 (4), (5) and (12), in the case of the following subparagraphs. In such cases, the tax amount equivalent to the amount commensurate with the relevant insufficient ratio shall be collected additionally, in the case of subparagraph 1: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7322, Dec. 31, 2004; Act No. 7332, Jan. 5, 2005>1. Where the ratio of the stocks, etc. of foreign investors falls short of the ratio of the stocks, etc, at the time of abatement or exemption, after the taxes have been abated or exempted under Article 121-2 (5) and (12);2. Where a foreign investor transfers the stocks, etc. which he owns under this Act to a national or a corporation of the Republic of Korea after the taxes are abated or exempted under Article 121-2 (4) and (12);3. Where a registration is revoked under Article 21 (3) of the Foreign Investment Promotion Act;4. Where the relevant foreign-invested enterprise closes down its business; and5. Where the payment of investment in subject matters and the introduction of loans under Article 2 (1) 4 (b) of the Foreign Investment Promotion Act fall short of the standards for the tax reduction or exemption under Article 121-2 (1) within 3 years after making a report on foreign investment.(4) The scope of tax amount to be additionally collected under paragraphs (1) through (3) shall be prescribed by Presidential Decree.(5) In cases where it falls under any of the followings subparagraphs, notwithstanding the provisions of paragraphs (1) through (3), the reduced or exempted tax amount needs not be additionally collected as prescribed by Presidential Decree: <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9272, Dec. 26, 2008>1. Where the registration of a foreign-invested enterprise is revoked as it is dissolved by a merger;2. Where any capital goods, that were imported with their customs duties, etc. exempted under Article 121-3 and have been used therefrom, become unusable for their original purposes due to a natural disaster or other unavoidable causes, or depreciation, technological advancement, and other fluctuations in economic conditions, and are used for other purposes than original ones or disposed of under the approval of the Minister of Strategy and Finance;3. Where a foreign-invested enterprise transfers the stocks, etc. to a national or a corporation of the Republic of Korea in order to make itself publicly held under the Financial Investment Services and Capital Markets Act; or4. Where it is prescribed by Presidential Decree in cases where the purpose of tax abatement or exemption has been achieved in addition to subparagraphs 1 through 3.[This Article Newly Inserted by Act No. 5982, May 24, 1999]

(1) Where an agreement meeting the standards prescribed by Presidential Decree has been concluded, which imports a high level technology vital to strengthening the international competitiveness of the domestic industry, the corporation tax or income tax on royalties for such technical license that the licenser receives under the details of relevant agreement shall be exempted for 5 years from the date (limited to the cases where the said date is not later than December 31, 2009) on which such royalties are agreed to be paid for the first time under such an agreement. <Amended by Act No. 8146, Dec. 30, 2006>(2) Where the licenser who provides the technology under a technology license agreement intends to be eligible for the tax exemption under paragraph (1), he shall make an application for exemption to the Minister of Strategy and Finance under as determined by Ordinance of the Ministry of Strategy and Finance. <Amended by Act No. 8852, Feb. 29, 2008>(3) Where the licenser who provides the technology under a technology license agreement obtains a confirmation of tax exemption under paragraphs (1) and (2) by applying for exemption after the time limit for application for tax exemption under paragraph (2) expires, the provisions of paragraph (1) shall apply only to the taxable year wherein the relevant application is filed and the remainder of exemption period thereafter. In this case, where there exists any tax amount already paid by the licenser providing the technology under a technology license agreement prior to receiving the confirmation of exemption under paragraphs (1) and (2), the relevant tax amount shall not be refunded. <Newly Inserted by Act No. 6297, Dec. 29, 2000>[This Article Newly Inserted by Act No. 5982, May 24, 1999]

The Minister of Strategy and Finance may, under the conditions as prescribed by Presidential Decree, delegate or entrust parts of his authority under the provisions of this Chapter to the Commissioner of the National Tax Service, Commissioner of Korea Customs Service, and other heads of institutions related to foreigner’s investment as prescribed by Presidential Decree. <Amended by Act No. 8852, Feb. 29, 2008>[This Article Newly Inserted by Act No. 5982, May 24, 1999]

(1) In cases where the companies located, not later than December 31, 2009, in the Jeju high-tech science and technology complex (hereafter referred to as the “Jeju high-tech science and technology complex” in this Chapter) which is designated under Article 216 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities operate the business as prescribed by Presidential Decree, such as biotech industry or information and communications industry (hereafter referred to as the “business subject to tax reduction or exemption” in this Article), with respect to the income generated from the business subject to tax reduction or exemption, a tax amount equivalent to 100/100 of the corporation tax or the income tax for the taxable year ending within 3 years from the date of commencing the taxable year in which the first income has been generated from the said business after the date of commencing the business (if the first income has not been generated from the aforementioned business not later than the taxable year whereto belongs the date on which five years have passed since the date of commencing the business, it refers to the taxable year whereto belongs the date on which the five years have passed), and an amount equivalent to 50/100 of the corporation tax or the income tax for the taxable year ending within 2 years thereafter, shall be reduced or exempted, respectively. <Amended by Act No. 7849, Feb. 21, 2006; Act No. 8146, Dec. 30, 2006>(2) Any person who intends to be subjected to the provisions of paragraph (1) shall file an application for reduction or exemption as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) With respect to investment that meets the standards prescribed by Presidential Decree as investment to conduct a business falling under any of the following subparagraphs (hereafter in this Article, Articles 121-11 and 121-12 referred to as a "business subject to tax reduction and exemption"), the corporation tax, income tax, acquisition tax, registration tax and property tax shall be reduced or exempted pursuant to paragraphs (2) and (3): <Amended by Act No. 7332, Jan. 5, 2005; Act No. 7849, Feb. 21, 2006; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Businesses which are conducted at a place of business in the relevant area by enterprises moving not later than December 31, 2009 into the Jeju Investment Promotion Zone (hereafter in this Chapter referred to as the "Jeju Investment Promotion Zone") designated pursuant to Article 217 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities;2. Businesses which are conducted at a place of business in the relevant area by enterprises moving not later than December 31, 2009 into the Free Trade Zone to be designated in Jeju Special Self-Governing Province pursuant to Article 4 of the Act on Designation and Management of Free Trade Zone (hereafter in this Chapter referred to as the “Jeju Free Trade Zone”); and3. Development projects the planning, finance, design, construction, marketing, lease, sale in lots or such of which are collectively performed by the development project undertaker of the Jeju Investment Promotion Zone to develop the Jeju Investment Promotion Zone.(2) With respect to the income earned from a business subject to tax reduction or exemption falling under any of the subparagraphs of paragraph (1), in the taxable year which expires within three years from the commencement date of the taxable year (the taxable year to which the date when five years have passed belongs when no income has been earned until the taxable year to which the date when five years have passed from the commencement date of business belongs) when the first income is generated from the relevant business subject to tax reduction and exemption after the commencement date of business, in cases under paragraph (1) 1 and 2, a tax amount equivalent to 100/100 of the corporation tax or income tax, in cases under paragraph (1) 3, a tax amount equivalent to 50/100 of the corporation tax or income tax shall be reduced or exempted respectively, and in the taxable year which expires within the next two years, in cases under paragraph (1) 1 and 2, a tax amount equivalent to 50/100 of the corporation tax or income tax, in cases under paragraph (1) 3, a tax amount equivalent to 25/100 of the corporation tax or income tax shall be reduced or exempted respectively. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(3) With respect to the properties acquired or retained in order to conduct a business subject to tax reduction or exemption under paragraph (1) 1 and 2, the acquisition tax, registration tax and property tax shall be reduced or exempted or a specific amount shall be deducted from the relevant tax base pursuant to classifications under any of the following subparagraphs: Provided, That if the period of reduction, exemption or deduction has been extended up to 10 years, or the rate of reduction, exemption or deduction has been elevated, as stipulated by Municipal Ordinance of local government, it shall be based on such period and rate: <Amended by Act No. 7332, Jan. 5, 2005; Act No. 9272, Dec. 26, 2008>1. The total amount of tax shall be reduced or exempted in the case of the acquisition tax and registration tax;2. The total amount of tax for 3 years from the date of commencing the business, and the tax amount equivalent to 50/100 for 2 years thereafter, shall be reduced or exempted in the case of the property tax; and3. Amount equivalent to the whole tax base of the relevant property for 3 years from date of commencing the business, and an amount equivalent to 50/100 for 2 years thereafter, shall be deducted from the tax base respectively, in the case of the property tax on land.(4) Any person who intends to be subjected to an application of the provisions of paragraph (2) shall file an application therefor under the conditions as prescribed by Presidential Decree, and Article 292 of the Local Tax Act shall apply mutatis mutandis to the application for reduction or exemption of the local tax under paragraph (3).[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) With respect to the goods as prescribed by Presidential Decree from among those to be imported by the companies located in the Jeju high-tech science and technology complex, not later than December 31, 2009, for the use in its research and development, the customs duties thereon shall be exempted. <Amended by Act No. 8146, Dec. 30, 2006>(2) The provisions of Article 118 (3) and (4) shall apply mutatis mutandis to the goods subjected to an exemption from customs duties under the provisions of paragraph (1).[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) With respect to the goods as prescribed by Presidential Decree from among the capital goods to be imported by the companies located in the Jeju investment promotion zone, not later than December 31, 2009, for the direct use in the business subject to tax reduction or exemption (referring to the capital goods provided for in Article 2 (1) 9 of the Foreign Investment Promotion Act, and excluding those for repair or replacement), the customs duties thereon shall be exempted: Provided, That except for the goods to be imported by the foreign investors or foreign-invested enterprises for the purpose of foreign investment pursuant to the Foreign Investment Promotion Act, they shall be limited to the goods which are difficult to be produced in Korea. <Amended by Act No. 8146, Dec. 30, 2006>(2) The provisions of Article 118 (3) and (4) shall apply mutatis mutandis to the goods subjected to an exemption from customs duties under the provisions of paragraph (1).[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) The head of the tax office, the director of the customs office or the head of local government shall additionally collect the corporation tax, income tax, acquisition tax, registration tax, property tax and customs duties which have been reduced or exempted under Article 121-9 or 121-11, in the cases falling under any of the following subparagraphs, as prescribed by Presidential Decree: Provided, That subparagraphs 4 and 5 shall apply only to the case of additional collection of acquisition tax and registration tax: <Amended by Act No. 7332, Jan. 5, 2005; Act No. 7849, Feb. 21, 2006; Act No. 9272, Dec. 26, 2008>1. Where the designation of the Jeju investment promotion zone has been terminated pursuant to Article 218 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities;2. Where a permit for location has been revoked pursuant to Article 15 of the Act on Designation and Management of Free Trade Zone;3. Where a company located in the relevant Jeju investment promotion zone or Jeju free trade zone has discontinued its business;4. Where it fails to obtain designation as the Jeju investment promotion zone under Article 217 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities within three years from the date of acquiring the business properties without any justifiable grounds prescribed by Presidential Decree; and5. Where the business properties have not been directly used for the business subject to reduction or exemption or sold within three years from the date of commencing the business without any justifiable grounds prescribed by Presidential Decree.(2) Scope of tax amounts to be additionally collected pursuant to paragraph (1) shall be prescribed by Presidential Decree. <Amended by Act No. 9272, Dec. 26, 2008>[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) Where travellers in Jeju-do as prescribed by Presidential Decree (hereafter referred to as “Jeju-do travellers” in this Article) purchase the goods prescribed by Presidential Decree (hereafter referred to as “duty-free goods” in this Article) at the sales place of duty-free goods under Article 177 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free InternationalCities (hereafter referred to as “designated duty-free shops” in this Article), and carry them out to other areas than Jeju-do, the value-added tax, individual consumption tax, liquor tax, customs duties and tobacco consumption tax (hereafter referred to as the “value-added tax, etc.” in this Article) shall be exempted (referring to applying zero rating in the case of value-added tax; hereafter the same shall apply in this Article). <Amended by Act No. 7849, Feb. 21, 2006; Act No. 8827, Dec. 31, 2007>(2) Designated duty-free shops shall be deemed to be the bonded sales place licensed under Article 174 of the Customs Act. In this case, the duty-free goods to be carried out to other areas than Jeju-do under the provisions of paragraph (1) may be sold at the relevant bonded sales place, notwithstanding the provisions of Article 196 (1) of the Customs Act.(3) The value-added tax, individual consumption tax, liquor tax and tobacco consumption tax shall be exempted under the conditions as prescribed by Presidential Decree in cases where an entrepreneur supplies duty-free goods to designated duty-free shops. <Amended by Act No. 8827, Dec. 31, 2007>(4) Duty-free goods to be sold at designated duty-free shops shall be those whose sales price is equivalent to US$ 400 and is not more than the price prescribed by Presidential Decree. <Amended by Act No. 7839, Dec. 31, 2005>(5) Limit of the amount of duty-free goods to be bought by Jeju-do travellers at designated duty-free shops shall be equivalent to US$ 400 per time, as prescribed by Presidential Decree, and such goods may be purchased up to six times a year. <Amended by Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007>(6) Purchased amount and price by kind of duty-free goods, sales procedures for duty-free goods, exemption procedures for value-added tax, etc. on duty-free goods, control procedures for non-carried-out goods, collection of the reduced or exempted tax amount due to unjustifiable purchase of duty-free goods, restriction on utilization of the designated duty-free shops, and other necessary matters for exemption of value-added tax, etc., shall be prescribed by Presidential Decree. <Amended by Act No. 6762, Dec. 11, 2002>[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) With respect to any admission activities (limited to those done not later than December 31, 2009) into golf courses located within Jeju Special Self-Governing Province, no individual consumption tax shall be imposed, notwithstanding the provisions of Article 1 (3) 4 of the Individual Consumption Tax Act. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(2) Deleted. <by Act No. 8827, Dec. 31, 2007>(3) The Governor of Jeju Special Self-Governing Province shall take the necessary measures under the conditions as prescribed by the Presidential Decree, so as to get the special taxation for the golf courses in Jeju Special Self-Governing Province under paragraph (1) to serve to the activation of tourism in the Jeju Free International City. <Amended by Act No. 8827, Dec. 31, 2007>[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) With respect to a vessel to be acquired, not later than December 31, 2009, for a registration as an international vessel pursuant to Article 4 of the International Ship Registration Act, which falls under any of the following subparagraphs, the acquisition tax and local education tax thereon shall be exempted: Provided, That where it fails to register as an international vessel within 6 months from the date of vessel acquisition, the reduced or exempted acquisition tax and local education tax shall be additionally collected: <Amended by Act No. 7849, Feb. 21, 2006; Act No. 8146, Dec. 30, 2006>1. Vessel having the special shipping registration zone under Article 221 (1) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities as her port of shipment; and2. Foreign vessel prescribed by Presidential Decree.(2) With regard to the vessels registered as international vessels which make the special shipping registration zone under paragraph (1) 1 as their port of shipment as of the tax base date which arrives on or before December 31, 2009, the property tax and joint facility tax thereon shall be exempted. <Amended by Act No. 8146, Dec. 30, 2006>[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) With respect to the real estate to be acquired, not later than December 31, 2009, by the Jeju Free International City Development Center established under Article 261 of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities (hereafter referred to as the “Development Center” in this Article) in order to carry on the business under Article 265 of the same Act (including the case where the Development Center makes a lease; hereafter the same shall apply in this Article), the acquisition tax and registration tax thereon shall be exempted, and with respect to the real estate to be used in such business as of the tax base date which arrives on or before December 31, 2009, the property tax, urban planning tax, and joint facility tax thereon shall be exempted, and with respect to the Development Center, the business place tax thereon shall be exempted. <Amended by Act No. 7332, Jan. 5, 2005; Act No. 7849, Feb. 21, 2006; Act No. 8146, Dec. 30, 2006>(2) With regard to the incorporation registration of the Development Center, the registration tax thereon shall be exempted.[This Article Newly Inserted by Act No. 6689, Apr. 20, 2002]

(1) The corporation tax, the income tax, the acquisition tax, the registration tax, and the property tax shall be reduced and exempted for the investment that is made to run the business falling under any of the following subparagraphs (hereafter referred to as the “business subject to the tax reduction or exemption” in this Chapter) and for which the type of the business and the amount of the investment meet the standards prescribed by Presidential Decree under the conditions provided for in paragraphs (2) through (4): <Amended by Act No. 8146, Dec. 30, 2006>1. The business that is run by any enterprise in its business place located in an enterprise city development zone not later than December 31, 2009; and2. The business that is run by any enterprise city development project undertaker who implements such project pursuant to subparagraph 3 of Article 2 of the Special Act on the Development of Enterprise Cities.(2) With respect to any income accruing from the business subject to the tax reduction or exemption of the enterprise falling under paragraph (1), a tax amount equivalent to 100/100 of the corporation tax or the income tax in the case of paragraph (1) 1 and a tax amount equivalent to 50/100 of the corporation tax or the income tax in the case of paragraph (1) 2 shall be each reduced and exempted for the taxable year ending within 3 years from the date of commencing the taxable year (when no income accrues from the relevant business by the taxable year whereto belongs the date on which 5 years have passed from the date on which the business commences, the taxable year whereto belongs the date on which the 5 years have passed) during which the income first accrues from the relevant business subject to the tax reduction or exemption after the starting of business, and a tax amount equivalent to 50/100 of the corporation tax or the income tax in the case of paragraph (1) 1 and a tax amount equivalent to 25/100 of the corporation tax or the income tax in the case of paragraph (1) 2 shall be each reduced or exempted for the taxable year ending within two years thereafter.(3) With respect to the acquisition tax, the registration tax, the property tax and the aggregate land tax on the property that is acquired and held in order to run the business subject to the tax reduction or exemption referred to in paragraph (1), local governments may prescribe the tax reduction or exemption ratio, the deduction ratio, the tax reduction or exemption period and the deduction period within the scope of 15 years in their respective Municipal Ordinances after obtaining permission therefor from the Minister of Public Administration and Security in accordance with Article 9 of the Local Tax Act. <Amended by Act No. 8852, Feb. 29, 2008>(4) Anyone who intends to make him eligible for the application of the provisions of paragraph (2) shall file an application for the tax reduction or exemption under the conditions as prescribed by Presidential Decree and the provisions of Article 292 of the Local Tax Act shall apply mutatis mutandis to the reduction or exemption or deduction application for the local tax referred to in paragraph (3).[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) The individual consumption tax shall not be levied on the admission activities (limited to the admission activities done not later than December 31, 2009) into golf courses that are opened in tourism-leisure-type enterprise cities (hereafter referred to as “tourism-leisure-type enterprise cities” in this Article) provided for in subparagraph 1 (c) of Article 2 of the Special Act on the Development of Enterprise Cities, notwithstanding the provisions of Article 1 (3) 4 of the Individual Consumption Tax Act. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(2) The Metropolitan City Mayor and the head of Si or Gun (excluding the head of Gun located in the area under the jurisdiction of the Metropolitan City) having jurisdiction over the tourism-leisure-type enterprise cities shall take necessary measures to get the special taxation for golf courses located in tourism-leisure-type enterprise cities referred to in paragraph (1) to serve to the activation of tourism in such tourism-leisure-type enterprise cities under the conditions as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) The head of the tax office shall, in the case falling under any of the following subparagraphs, additionally collect the corporation tax or the income tax that is reduced or exempted pursuant to the provisions of Article 121-17 under the conditions as prescribed by Presidential Decree:1. Where the designation of any enterprise city development zone is canceled pursuant to Article 7 of the Special Act on the Development of Enterprise Cities;2. Where no investment meeting the standards for the tax reduction or exemption provided for in the provisions of Article 121-17 (1) is made within two years from the end of the taxable year (when no income accrues from the relevant business by the taxable year whereto belongs the date on which three years have lapsed from the date on which the business commences, the taxable year whereto belongs the date on which the three years have lapsed) during which first income accrues from the relevant business subject to the tax reduction or exemption; and3. Where any enterprise located in an enterprise city development zone discontinues its business.(2) When any enterprise falls under paragraph (1) 2, the provisions of Article 121-17 (2) shall not apply thereto during the relevant taxable year and the remaining tax reduction or exemption period.(3) The additional collection of the acquisition tax, the registration tax, the property tax and the aggregate land tax may be prescribed by Municipal Ordinances after obtaining the permission therefor from the Minister of Public Administration and Security in accordance with the provisions of Article 9 of the Local Tax Act. <Amended by Act No. 8852, Feb. 29, 2008>[This Article Newly Inserted by Act No. 7322, Dec. 31, 2004]

(1) For the investment the category of business and investment amount of which meet the standards prescribed by Presidential Decree as the investment to conduct a business in the investment promotion zone by an enterprise moving into the investment promotion zone under Article 16 of the Special Act on the Development of an Asian Cultural Hub City not later than December 31, 2012, the corporation tax, income tax, acquisition tax, registration tax and property tax shall be reduced and exempted respectively pursuant to the provisions of paragraphs (2) through (4).(2) For the income accrued from a business subject to tax reduction and exemption under paragraph (1), a tax amount equivalent to 100/100 of the corporation tax or income tax of the taxable year expiring within three years from the commencement date of the taxable year (the taxable year to which the date when five years have passed belongs when no income has been earned until the taxable year to which the date when five years have passed from the commencement date of business belongs) when the first income accrued from the relevant business subject to tax reduction and exemption after the commencement date of the business and an amount equivalent to 50/100 of the corporation tax or income tax of the taxable year expiring within the next two years shall be reduced and exempted.(3) For the acquisition tax, registration tax and property tax for the property acquired and possessed to conduct a business subject to tax reduction or exemption under paragraph (1), a local government may prescribe rates of tax reduction or exemption, rates of deduction, a period for tax reduction or exemption and a period for deduction within the extent of 15 years pursuant to Article 9 of the Local Tax Act with permission of the Minister of Public Administration and Security as Municipal Ordinance.(4) Any person who intends to be eligible for tax reduction of or exemption from the corporation tax or income tax pursuant to paragraph (2) shall apply for such reduction or exemption as prescribed by Presidential Decree, and shall apply Article 292 of the Local Tax Act mutatis mutandis to an application for reduction or exemption or deduction of local taxes under paragraph (3).[This Article Newly Inserted by Act No. 9353, Jan. 30, 2009]

(1) In cases where the amount of the brokerage commission that is paid according to the return of the details of a transaction contract under Article 27 (2) of the Act on the Business of Certified Real Estate Agents and Return of Transactions of Real Estate (hereafter in this Article referred to as the “returned amount of revenues”) is included in the amount of revenues (hereinafter in this paragraph referred to as the “amount of revenues”) by business place that is returned by any certified real estate agent under the same Act (hereafter referred to as the “certified real estate agent” in this Article) when he files a return of the tax base, the chosen amount from the amount falling under any of the following subparagraphs may be deducted from the income tax or the corporation tax of the relevant taxable year by the taxable year that comes to an end before December 31, 2010. In such cases, the amount of the deducted tax shall be the ceiling of the amount that is obtained by deducting the calculated tax amount of the global income or the calculated amount of the corporation tax of the immediately preceding taxable year from the calculated tax amount of the global income or the calculated tax amount of the corporation tax of the relevant taxable year: <Newly Inserted by Act No. 7839, Dec. 31, 2005; Act No. 9272, Dec. 26, 2008>1. In cases where the returned amount of revenues by business place at the time that a return of the tax base is filed exceeds the returned amount of revenues of the immediately preceding year, the amount obtained by multiplying the rate of the amount equivalent to 40/100 (50/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the excess amount (limited to the increased portion of the amount of revenues by business place) among the amount of revenues by the calculated tax amount of the global income or the calculated amount of the corporation tax. In cases where the returned amount of revenues of the immediately preceding year is nonexistent, the amount of revenues of the immediately taxable year shall be deemed the returned amount of revenues of the immediately preceding year; and2. The amount obtained by multiplying the rate of the amount equivalent to 4/100 (5/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the returned amount of revenues among the amount of revenues by business place when the return of tax base is filed by the calculated tax amount of the global income or the calculated amount of the corporation tax.(2) If there are revenues by credit cards (including those similar to credit cards and prescribed by Presidential Decree; hereafter in this Article the same shall apply), by the point-of-sale data management system equipment, by the radio frequency identification system prescribed by Presidential Decree (hereinafter referred to as the “radio frequency identification system”), by the data center provided for in Presidential Decree (hereafter in this Article referred to as the “data center”) or by electronic commerce (hereafter in this paragraph referred to as the “revenue by electronic commerce, etc.”) not later than December 31, 2010, which are earned by a resident (hereafter in this Article referred to as a “business operator”) who derives income from the lease of real estate or from business (hereafter in this Article referred to as the “business income, etc.”) and who is prescribed by Presidential Decree, from among those business operators who are running credit card member stores under the Specialized Credit Financial Business Act, or who are furnished with the point-of-sale data management system equipment, the radio frequency identification system, or the data center, or which are earned by a person who is engaged in trading in goods or services by electronic means prescribed by Presidential Decree (hereinafter referred to as the “electronic commerce”) through cyber malls under the Framework Act on Electronic Commerce and who is prescribed by Presidential Decree, an amount chosen from among those amounts computed by such methods as set forth in the following subparagraphs may be deducted from his income tax for the relevant taxable year: <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>1. Where the revenue by electronic commerce, etc. by business place as reported at the time of filing the final return of global income tax base exceeds the revenue by electronic commerce, etc. during the immediately preceding taxable year, an amount obtained by multiplying the computed amount of global income tax on business income, etc. of the relevant place of business by a percentage of the gross revenue of the relevant place of business which is represented by an amount equivalent to 40/100 (50/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of such excessive amount (limited to the increased portion of gross revenue by business place); and2. An amount obtained by multiplying the computed amount of global income tax on business income, etc. of the relevant place of business by a percentage of the gross revenue of the relevant place of business which is represented by an amount equivalent to 4/100 (5/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the revenue by electronic commerce, etc. by place of business as reported at the time of the filing of the final return of global income tax base.(3) In applying the provisions of paragraph (2), if the same business place has two or more of such forms of revenues as those by credit cards, by the point-of-sale data management system equipment, by the radio frequency identification system, by the data center, and by electronic commerce, the provisions of subparagraph 1 or 2 of the same paragraph shall be applicable only to one form of revenue that is selected by a business operator. <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 6501, Aug. 14, 2001; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006>(4) Where the revenue amount received through financial institutions (including the revenues by credit cards), out of the gross revenue amounts by business place of the relevant business as reported by a business operator prescribed by Presidential Decree who receives his revenues through financial institutions at the time of filing his final return on the global income tax base, exceeds the gross revenue amount of the relevant business place for the immediately preceding taxable year, the amount obtained by multiplying the computed global income tax amount on the business income, etc. of the relevant business place by the rate of the amount equivalent to 40/100 (50/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of such excessive amount (it shall be up to the increased portion of gross revenues by business place) among the gross revenues of the relevant business place shall be deducted from the income tax for the relevant taxable year. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6501, Aug. 14, 2001; Act No. 9272, Dec. 26, 2008>(5) In cases where the gross income and deductible expenses which a gold business operator declares in his tax base return for each place of business (hereafter referred to as “gross income and deductible expenses” in this paragraph) includes the gross income and the deductible expenses paid or received for a gold-related product through his gold tradingaccount in accordance with Article 106-4 (hereafter referred to as “gross income and deductible expenses paid by a purchaser” in this paragraph), the business operator may choose any of the following options for a taxable year that ends on or before December 31, 2010 to have a tax credit for the income tax or the corporation tax for the pertinent taxable year. In such cases, the amount of tax credit shall not exceed an amount calculated by subtracting the computed amount of the global income tax or the corporation tax for the immediately preceding taxable year from the computed amount of the global income tax or the corporation tax for the pertinent taxable year: <Newly Inserted by Act No. 8827, Dec. 31, 2007> ≪Enforcement Date: Jan. 1, 2009; Act No. 9272, Dec. 26, 2008>1. If the aggregate of the gross income and deductible expenses paid by a purchaser for each place of business as declared at the time of filing the tax base return exceeds the aggregate of the gross income and deductible expenses paid by the purchaser for the immediately preceding taxable year: An amount calculated by multiplying the computed amount of the global income tax or the corporation tax by the ratio of the amount equivalent to 40/100 (50/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the excess amount (which shall not exceed the increased portion of the aggregate of the gross income and deductible expenses for each place of business) to the aggregate of the gross income and deductible expenses. In such cases, if there is no gross income or deductible expenses paid by the purchaser during the immediately preceding taxable year, the aggregate of the gross income and deductible expenses for the immediately preceding taxable year shall be regarded as the aggregate of the gross income and deductible expenses paid by the purchaser for the immediately preceding taxable year; and2. An amount calculated by multiplying the computed amount of the global income tax or the corporation tax by the ratio of the amount equivalent to 4/100 (5/100 up to the part of the taxation period for which liability for tax payment is constituted on or before December 31, 2009) of the aggregate of the gross income and deductible expenses paid by a purchaser for each place of business as declared at the time of filing the tax base return to the aggregate of the gross income and deductible expenses.(6) In applying paragraphs (2) 1 and (4), the deductible tax amount shall be up to the increased portion of the computed tax amount prescribed by Presidential Decree. <Amended by Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001>(7) Where a business operator is given tax credit under paragraph (4) for the business income, etc. of the same business place, he shall not be eligible for the tax credit under paragraph (2). <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>(8) Where a business operator is given the tax credit for the revenue amount by credit cards under paragraph (2) out of the business income, etc. of the same business place, he shall not be subjected to the tax credit referred to in the provisions of paragraph (1) and the reduction or exemption of the special tax amount provided for in the provisions of Article 7. <Newly Inserted by Act No. 6501, Aug. 14, 2001; Act No. 7839, Dec. 31, 2005>(9) In applying paragraphs (1) through (5), matters necessary for the calculation, etc. of tax credit amount shall be prescribed by the Presidential Decree. <Newly Inserted by Act No. 6501, Aug. 14, 2001; Act No. 6538, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007>(10) A person who intends to be eligible for the application of paragraphs (1) through (5) shall make an application for tax credit under the conditions as prescribed by Presidential Decree. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007>

(1) A business operator who meets all the following requirements (limited to any person who has business income) shall be entitled to the deduction of medical expenses and education expenses (hereafter referred to as “medical expenses, etc.” in this Article) under Article 52 (1) 3 and 4 (excluding item (b) (ⅲ)) of the Income Tax Act from the business income for the relevant taxable period until the taxable period to which December 31, 2009 belongs. In this case, if the deductible medical expenses, etc. exceed the corresponding business income, such excess amount shall be deemed as none:1. The person shall be a business operator who falls under any of the following items:(a) A business operator who becomes a credit card merchant or cash receipt merchant under Article 162-2 or 162-3 of the Income Tax Act (excluding a business operator who refuses to issue a credit card sales slip or a cash receipt or issues such slip or receipt with any description different from the true facts during the pertinent taxable period); and(b) A business operator who has introduced facilities for enterprise resource planning or point-of-sale information management system or a business operator whose revenue are transparently disclosed, as prescribed by Presidential Decree;2. The person shall apply the double-entry bookkeeping system in accordance with Article 160 (1) of the Income Tax Act in keeping, and making entries in, account books, calculating his income, and filing a return (excluding the pertinent taxable period, in cases where it is decided to make an estimated assessment pursuant to the proviso of Article 80 (3) of the Income Tax Act);3. The person shall open and report his business account in accordance with Article 160-5 (3) of the Income Tax Act, and shall disburse at least two-thirds of the amount that he is required to disburse through the business account during the pertinent taxable period in accordance with Article 160-5 (1) of the said Act;4. The person shall file a return with his revenue for the pertinent taxable period in excess of his annual average revenue for immediately preceding three taxable periods by at least 10/100 of the annual average revenue: Provided, That the same shall not apply in cases where the revenue has increased due to a cause prescribed by Presidential Decree, including the relocation of place of business, and change of business type;5. The person shall be the one who has engaged in the business without interruption for at least three years as of the beginning of the pertinent taxable period; and6. The person shall meet the requirements prescribed by Presidential Decree, considering the past records of default on national taxes, punishment for tax criminal cases, breaches of a duty to issue and receive tax invoices, account statements, etc., and omission of income amount.(2) The deductible medical expenses under paragraph (1) shall be calculated by applying Article 52 (1) 3 of the Income Tax Act mutatis mutandis. In this case, the term “gross salary amount” in Article 52 (1) 2 (a) and (b) of the Income Tax Act shall be construed as “business income amount”.(3) If a business operator who has benefits from the deduction under paragraph (1) falls under any of the following subparagraphs, the tax amount equivalent to the deducted amount shall be additionally levied in full amount:1. If the revenue understated for the pertinent taxable period amounts to 20/100 or more of the amount rectified later (including a case corrected by filing a return for correction); and2. If the necessary expenses overstated at the time of calculating the business income for the pertinent taxable period amounts to 20/100 or more of the necessary expenses rectified later (including a case corrected by filing a return for correction).(4) A business operator on whom a tax amount was levied additionally pursuant to paragraph (3) shall not be entitled to the deduction of medical expenses, etc. for three taxable periods from the following taxable period in which such tax amount was additionally levied.(5) Necessary matters concerning the criteria for judgment on whether a person meets the requirements under items of paragraph (1) 1 and the procedure for application for deduction shall be prescribed by the Presidential Decree, in addition to the provisions of paragraphs (1) through (4).[This Article Newly Inserted by Act No. 8827, Dec. 31, 2007]

(1) Where the annual aggregate (excluding any amount spent overseas) of the amounts falling under any of the following subparagraphs (hereafter referred to as the “amount drawn on credit cards, etc.” in this Article) which are paid by a resident having the earned income (excluding daily-paid workers; hereafter the same shall apply in this Article) for the goods or services he has received not later than December 31, 2009 from a corporation (including a domestic business place of a foreign corporation) or from a business operator under Article 28 of the Income Tax Act (including a domestic business place of a non-resident) exceeds 20/100 of the total amount of his pay for the taxable year concerned under Article 20 (2) of the Income Tax Act, an amount equivalent to 20/ 100 of such excess amount (limited to the smaller of the two amounts, 5 million won per annum and an amount equivalent to 20/100 of the total amount of his pay for the taxable year concerned; hereafter referred to as the “deductible income amount for credit cards, etc.” in this Article) shall be deducted from the gross amount of his earned income for the taxable year concerned: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. An amount paid for goods or services by using credit cards, debit cards, or prepayment cards (limited to the prepayment cards of which the real names are verifiable in accordance with the Presidential Decree; hereafter referred to as the “registered prepayment cards” in this Article) under Article 2 of the Specialized Credit Financial Business Act;1-2. An amount paid for a price by using an electronic debit payment means, an electronic prepaid payment means (limited to those of which the real names are verifiable in accordance with the Presidential Decree; hereafter referred to as “registered electronic prepaid payment means” in this Article),or an electronic money (limited to those of which the real names are verifiable in accordance with the Presidential Decree; hereafter referred to as “registered electronic money” in this Article) under Article 2 of the Electronic Financial Transaction Act;2. An amount stated in a cash receipt as provided for in Article 126-3 (including the fact of cash transaction confirmed pursuant to Article 126-5; hereafter referred to as a “cash receipt” in this Article); and3. Lecture fees, etc., paid through Giro system as prescribed by Presidential Decree, to the private teaching institutes under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons.(2) In applying the provisions of paragraph (1), the amount drawn on credit cards, etc. by a spouse or lineal ascendants and descendents as determined by Presidential Decree (including the spouse’s lineal ascendants) of a resident having earned income may be added to the deductible income amount for credit cards, etc. of such resident.(3) If the amount drawn on credit cards, etc. falls under any of the following subparagraphs, such amount shall not be added to the amount drawn on credit cards, etc. in applying the provisions of paragraph (1): <Amended by Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>1. Where it falls under such expenses as related to the real property rental income or business income, or where it falls under expenses incurred by a corporation;2. Where it falls under the abnormal uses of credit cards, debit cards, electronic debit payment means, registered prepayment cards, registered electronic prepaid payment means, registered electronic money, or cash receipts as prescribed by Presidential Decree, such as feigning the sales of goods or the provision of services, etc.;3. Where a newly-delivered automobile is purchased by using a credit card, debit card, electronic debit payment means, registered prepayment card, registered electronic prepaid payment means, registered electronic money, or cash receipt on or after December 1, 2002; and4. Other cases prescribed by Presidential Decree.(4) In applying paragraph (3) 2, where the withholding agent under Article 127 (5) of the Income Tax Act pays the tax amount as it falls short of the payable tax amount to be withheld at source on account of the reasons prescribed by Presidential Decree, the additional tax for unfaithfulness in withholding under Article 158 of the Income Tax Act shall not be levied.(5) The Commissioner of the National Tax Service may order the credit card business operators under Article 2 of the Specialized Credit Financial Business Act to take care of matters necessary for the income deduction on the amount using credit cards, etc., such as the notification of amounts using credit cards, etc.(6) Any person who intends to be subjected to paragraph (1) shall make an application for the income deduction as prescribed by Presidential Decree.(7) The amount drawn on credit cards, etc. shall be the aggregate of the amounts used, recorded, or paid off during the pertinent taxable period. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(8) Necessary matters for the method of verifying the amounts drawn on credit cards, etc. and deductible from income, and other matters necessary for an income deduction for the amounts drawn on credit cards, etc. shall be prescribed by Presidential Decree. <Amended by Act No. 6045, Dec. 28, 1999; Act No. 8827, Dec. 31, 2007>[This Article Newly Inserted by Act No. 5996, Aug. 31, 1999]

(1) A cash receipt service operator (hereafter referred to as a “cash receipt service operator” in this Article) who is granted approval for providing cash receipt service by the Commissioner of the National Tax Service as prescribed by Presidential Decree as a business operator who is provided with the system which can approve and transmit cash receipt settlement by wire may be offered tax deduction from the amount of the value-added tax to be paid for the relevant taxable period, or may be given back as part of the refunded tax amount, up to the amount prescribed by Presidential Decree according to the number of installed cash receipt issuance machines, the number of cases of cash receipt account settlement of the operators who have cash receipt issuance machines connected with credit card terminals (hereafter referred to as a “cash receipt merchant” in this Article), and the number of detailed statements of payment submitted in the manner under the latter part of Article 164 (3) of the Income Tax Act, which are prescribed by Presidential Decree. <Amended by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>(2) A cash receipt merchant under paragraph (1) who issues cash receipts under paragraph (4) (limited to the ones for less than 5,000 won for each transaction, and referring to the ones approved for issuance through the telephone network) until December 31, 2010 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 referred to as “tax credit amount” in this Article) for the income tax calculated for the pertinent taxable period. In this case, the tax credit amount shall not exceed the calculated income tax amount. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(3) A cash receipt service operator shall forward the Commissioner of the National Tax Service the details of cash settlement, such as the date and amount of trading, the identity of the traders and the personal information on cash receipt merchants, under the conditions as prescribed by Presidential Decree.(4) The term “cash receipts” in paragraph (1) means receipts which, in the case of cash settlement, a cash receipt merchant issues the person who is supplied with goods or service by means of cash receipt issuance machines in exchange for the supply of such goods or service, stating the details of the settlement such as the date, amount, etc. of the trading.(5) The Commissioner of the National Tax Service may, if necessary to give tax deduction to the persons receiving cash receipts or otherwise to operate the cash receipt system, ask the providers and users of credit information under Article 2 of the Use and Protection of Credit Information Act to furnish their names and resident registration numbers and other information as prescribed by Presidential Decree, under Article 14 of the said Act.(6) The issuance methods and forms of cash receipts, the methods and procedures of tax credit under paragraph (2), and other necessary matters for the operation of the cash receipt system shall be prescribed by Presidential Decree. <Amended by Act No. 8827, Dec. 31, 2007>[This Article Newly Inserted by Act No. 7003, Dec. 30, 2003]

(1) Notwithstanding the provisions of Article 16 of the Value-Added Tax Act, in cases where a business operator registered as a person liable for tax payment, as prescribed by Presidential Decree, fails to issue a tax invoice at the time of conducting a transaction pursuant to Article 9 of the Value-Added Tax Act in exchange for the supply of goods or services, the person who is supplied with such goods or services may issue a tax invoice (hereinafter referred to as the “purchaser-issued tax invoice”) subject to a confirmation by the head of the competent tax office under the conditions as prescribed by Presidential Decree.(2) The value-added tax amount stated on the purchaser-issued tax invoice issued pursuant to paragraph (1) shall be deemed the deductible input tax amount in accordance with Articles 17 (1) and 26 (3) of the Value-Added Tax Act under the conditions as prescribed by the Presidential Decree.(3) Other than those under paragraphs (1) and (2), the objects and methods of issuance of purchaser-issued tax invoices and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) In cases where the person who receives goods or services supplied by a business operator prescribed by Presidential Decree fails to be issued a cash receipt referred to in Article 126-3 (3) in spite of the cash settlement of the price thereof, he shall be deemed to be issued a cash receipt in accordance with Article 126-3 (3) subject to the confirmation of such cash transaction by the head of the competent tax office under the conditions as prescribed by Presidential Decree.(2) In cases where a cash receipt is deemed to be issued in accordance with paragraph (1), the relevant amount shall not be subject to the tax credit for the use of credit cards, etc. pursuant to Article 32-2 (1) of the Value-Added Tax Act with respect to the business operator who has failed to issue such a cash receipt.(3) Other than those under paragraphs (1) and (2), the report of cash transaction, the methods of the confirmation thereof, and other necessary matters shall be prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 8146, Dec. 30, 2006]

(1) Deleted. <by Act No. 8146, Dec. 30, 2006>(2) Where Articles 5, 11, 24, 25, 25-2 through 25-4, 26, 94 and 104-18 (2) are all applicable to the assets invested by a national under this Act, he may select only one of them as applicable. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(3) In applying the provisions of Articles 5, 11, 24, 25, 25-2 through 25-4, 26, 94, 104-14, 104-15 and 104-18 (2) if the income tax or the corporation tax is reduced or exempted pursuant to Article 121-2 or 121-4 for any national in the same taxable year, an amount obtained by multiplying the deductible tax amount pursuant to 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. <Amended by Act No. 5982, May 24, 1999; Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) Where a national is, in the same taxable year, eligible both for the reduction or exemption of income tax or corporation tax under Articles 6, 7, 12-2, 31 (4) and (5), 32 (4), 33-2, 63, 63-2 (2), 64, 66 through 68, 85-6, 121-8, 121-9 (2) and 121-17 (2), and for the deduction of income tax or corporation tax under Articles 5, 11, 24, 25, 25-2 through 25-4, 26, 94, 104-14, 104-15 and 104-18 (2) he may select only one of them as applicable. <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(5) Where two or more provisions from among the provisions concerning reduction or exemption of income tax or corporation tax pursuant to Articles 6, 7, 12-2, 31 (4) and (5), 32 (4), 33-2, 63, 63-2 (2), 64, 85-6, 121-8, and 121-9 (2) and Article 121-2 or 121-4 are applicable to the same business place of a national in the same taxable year, he may select only one of them as applicable. <Amended by Act No. 5982, May 24, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(6) Where two or more provisions from among the provisions concerning reduction or exemption of acquisition tax and property tax pursuant to Article 120 (3), 121, 121-2, 121-4, 121-9 (3) or 121-17 (3) are applicable to the same business place of a national in the same taxable year, he may select only one of them as applicable. <Amended by Act No. 5982, May 24, 1999; Act No. 5996, Aug. 31, 1999; Act No. 6689, Apr. 20, 2002; Act No. 7322, Dec. 31, 2004; Act No. 7332, Jan. 5, 2005; Act No. 8827, Dec. 31, 2007>(7) Where two or more provisions for reduction or exemption of the transfer income tax are concurrently applicable to a resident’s transfer of land, etc., only one provision for reduction or exemption selected by the resident shall apply: Provided, That, where a part of land, etc. is subject to the application of a specific provision for reduction or exemption , the remaining parts of such land, etc. may be subject to the application of other provisions for reduction or exemption. <Newly Inserted by Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001>(8) A resident who transfers land, etc. to someone else and consequently to whom Articles 77 and 85-7 shall be applicable at the same time may select one of them as applicable. <Newly Inserted by Act No. 8827, Dec. 31, 2007>(9) A resident who transfers a house to someone else and consequently to whom Articles 98-2 and 98-3 shall be applicable at the same time may select one of them as applicable. <Newly Inserted by Act No. 9512, Mar. 25, 2009>

(1) The provisions of Articles 5, 7-2, 10, 11, 12 (2), 24, 25, 25-2 through 25-4, 26, 30-2, 94, 104-14, 104-15 and 104-18 (2) shall not apply to the cases where any tax amount is estimated pursuant to the proviso to Article 80 (3) of the Income Tax Act or the proviso to Article 66 (3) of the Corporation Tax Act: Provided, That, even when a tax amount is estimated, Articles 5 and 26 (limited to the cases where the documentary evidences for investments are submitted) shall apply only to residents. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9131, Sep. 26, 2008; Act No. 9272, Dec. 26, 2008>(2) The provisions of Articles 6, 7, 12-2, 31 (4) and (5), 33-2, 63, 63-2 (2), 64, 66 through 68, 102, 121-8, 121-9 (2), and 121-17 (2) shall not apply to the cases where a decision is made pursuant to Article 80 (1) of the Income Tax Act or Article 66 (1) of the Corporation Tax Act, or where a return is made after the given period pursuant to Article 45-3 of the Basic Act for National Taxes. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(3) The provisions of Articles 6, 7, 12-2, 31 (4) and (5), 33-2, 63, 63-2 (2), 64, 66 through 68, 102, 121-8, 121-9 (2), and 121-17 (2) shall not apply to such an under-reported amount as prescribed by Presidential Decree, in cases where correction (excluding correction due to any cause falling under any of the subparagraphs of paragraph (4)) is made pursuant to Article 80 (2) of the Income Tax Act or Article 66 (2) of the Corporation Tax Act and where an amended tax return is filed after receiving a notice on the tax audit pursuant to the provisions of Article 81-7 of the Basic Act for National Taxes. <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(4) The provisions of Articles 6, 7, 12-2, 31 (4) and (5), 33-2, 63, 63-2 (2), 64, 66 through 68, 102, 121-8, 121-9 (2), and 121-17 (2) shall not apply to the relevant taxable period, in cases where a business operator falls under any of the following subparagraphs: Provided, That this shall not apply to the cases where the business operator has any justifiable ground for failing to fulfill the duty of subparagraph 1 or 2: <Newly Inserted by Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Where the business operator fails to open a business account in violation of Article 160-5 (3) of the Income Tax Act;2. Where the business operator fails to become a cash receipt merchant in violation of Article 162-3 (1) of the Income Tax Act or Article 117-2 (1) of the Corporation Tax Act; and3. Where the business operator who has become a credit card merchant under Article 162-2 (2) of the Income Tax Act and Article 117 of the Corporation Tax Act or a cash receipt merchant under Article 162-3 (1) of the Income Tax Act or Article 117-2 of the Corporation Tax Act falls under the time prescribed by Presidential Decree in consideration of such number of times, amount, etc. as cases where he falls under any of the following items:(a) Where he has refused to transact by a credit card or issued a credit card sales slip different from the fact; and(b) Where he has refused a request for issuance of a cash receipt or issued it different from the fact.

The provisions of non-taxation, reduction or exemption of transfer income tax shall not be applicable to the unregistered transfer assets under Article 104 (3) of the Income Tax Act.[This Article Wholly Amended by Act No. 6538, Dec. 29, 2001]

(1) With respect to the fixed business assets (excluding any digital broadcasting equipment prescribed by Presidential Decree and any information and communications equipment prescribed by Presidential Decree) acquired for using them in a business place located within the over-concentration control zone of the Seoul Metropolitan area, which are subjected to the enlarged investment prescribed by Presidential Decree, by any national running his business within the over-concentration control zone of the Seoul Metropolitan area since before December 31, 1989 and by any small or medium enterprise commencing its business by newly establishing such a business place within the over-concentration control zone of the Seoul Metropolitan area or relocating its existing business place (including the business place established before December 31, 1989; hereafter the same shall apply in this Article) into such zone on or after January 1, 1990 (hereafter referred to as a “small or medium enterprise, etc. since 1990” in this paragraph), Articles 5 (1) 1 and 2, 11 (2) 3, 24 (1) 1 and 2, 25 (excluding paragraph (1) 7 and 9 of the same Article, and limited to the cases where any small or medium enterprise, etc. since 1990 has made an investment) shall not apply: Provided, That this shall not apply in cases where the enlarged investment is made within such an industrial complex or a manufacturing area as prescribed by Presidential Decree. <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(2) Where any person, who is not a small or medium enterpriser, commences his business by newly establishing a business place within the overconcentration control zone of the Seoul Metropolitan area or relocates his existing business place into such zone on or after January 1, 1990, Articles 11 (2) 3, 24 (1) 1 and 2, 25 (excluding paragraph (1) 7 and 9 of the same Article) shall not apply to his fixed business assets (excluding any digital broadcasting equipment prescribed by Presidential Decree and information and communications equipment prescribed by Presidential Decree) acquired for using them in the relevant business place located within the over-concentration control zone of the Seoul Metropolitan area. <Amended by Act No. 7322, Dec. 31, 2004; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>[This Article Wholly Amended by Act No. 7003, Dec. 30, 2003]

(1) In calculating the corporation tax on the income of a domestic corporation (excluding incorporated associations, etc. governed by Article 72 (1)) for each business year, and on the incomes generated from sources in Korea of a foreign corporation governed by Article 91 (1) of the Corporation Tax Act for each business year (excluding the corporation tax on the transfer income of land, etc. under Article 55-2 of the Corporation Tax Act, a tax amount additionally paid to the corporation tax and the additional penalty tax pursuant to Article 96 of the Corporation Tax Act, and the additionally collected tax amount prescribed by Presidential Decree, and referring to the corporation tax without making the tax deduction prescribed by Presidential Decree), if the tax amount after being subjected to reduction, exemption, etc. as listed in each of the following subparagraphs falls short of the tax amount as calculated by multiplying the tax base without adding a charge to deductible expenses and making tax deduction of income, etc. under subparagraphs 1 and 2 (including the amount of reserves under subparagraph 1, which has been added to gross income pursuant to the related provisions; hereafter referred to as the “tax base” in this Article) by 13/100 (10/100 in the portion of the tax base amounting to not more than 100 billion won and 7/100 in the case of small or medium enterprises), the portion equivalent to such insufficient tax amount shall not be subjected to reduction or exemption, etc.: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6045, Dec. 28, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7220, Oct. 5, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9131, Sep. 26, 2008; Act No. 9272, Dec. 26, 2008>1. Reserves for research and human resources development and special depreciation expenses included in the deductible expenses in calculating the amount of income for each business year pursuant to Articles 9 and 30;2. Deductible income amounts, amounts added to deductible expenses, amounts not added to gross income, and non-taxable amounts pursuant to Articles 8, 8-2, 10-2, 13, 14, 55-2 (4), 60 (2), 61 (3), and 63-2 (5);3. Amounts of tax credit pursuant to Articles 5, 7-2, and 10 (limited to the amount calculated by subtracting from the estimated amount of tax credit of a person, who is not a small or medium enterpriser, for the relevant taxable year the amount which is obtained by multiplying such estimated amount of tax credit by the rate of the employment cost of the persons with doctor’s and master’s degrees, which is prescribed by Presidential Decree, among such estimated amount of tax credit; hereafter the same shall apply in this Article), 11, 12 (2), 24, 25, 25-2 through 25-4, 26, 30-2, 31 (6), 32 (4), 94, 104-8, 104-14, 104-15 and 104-18; and4. Exemption and relief of the corporation tax pursuant to Articles 6, 7, 12-2, 21, 31 (4) and (5), 32 (4), 33-2, 63 (excluding the cases of being relocated to an area other than the Seoul Metropolitan area), 64, 68 (limited to any income other than the agricultural income), 85-6 and 102.(2) In calculating the income tax on a resident’s business income (including the rental income from the relevant real estate, in cases where Articles 16, 30 and 122 are applicable; hereafter the same shall apply in this paragraph) and a non-resident’s business income accruing from a domestic business place (excluding the additional penalty tax and the tax amount collected additionally prescribed by Presidential Decree, and referring to the income tax without making the tax credit, etc. as prescribed by Presidential Decree on the business income), if the tax amount after being subjected to any reduction or exemption, etc. falling under any of the following subparagraphs falls short of the tax amount calculated by multiplying the calculated tax amount on the business income in cases where a charge to deductible expenses and tax deduction, etc. under subparagraphs 1 and 2 have not been made (including the amount of reserves under subparagraph 1, which has been added to gross income pursuant to the related provisions) by 35/100, no reduction or exemption, etc. shall be applicable to the portion equivalent to such insufficient tax amount: <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 6762, Dec. 11, 2002; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7220, Oct. 5, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9131, Sep. 26, 2008; Act No. 9272, Dec. 26, 2008>1. Reserves for research and human resources development and special depreciation expenses included in the deductible expenses in calculating the income amount for each business year pursuant to Articles 9 and 30;2. Amounts added to deductible expenses and amounts of tax deduction pursuant to Articles 8, 10-2, 16, 86-3, and 122-3;3. Amounts of tax credit pursuant to Articles 5, 7-2, 10, 11, 12 (2), 24, 25, 25-2 through 25-4, 26, 30-2, 31 (6), 32 (4), 94, 104-8, 104-14, 104-15, 104-18, 122, and 126-3 (2); and4. Exemption and relief of the income tax pursuant to Articles 6, 7, 12-2, 21, 31 (4) and (5), 32 (4), 33-2, 63 (excluding the cases of being relocated to an area other than the Seoul Metropolitan area), 64, 85-6 and 102.(3) Matters necessary for applying the minimum tax under paragraphs (1) and (2) shall be prescribed by Presidential Decree.

(1) From among the total amount of transfer income taxes for an individual to be reduced or exempted pursuant to Articles 33, 43, 69, 70, 77, 77-3 or Article 29 of the Addenda of Act No. 6538, a larger amount of amounts under the following subparagraphs shall not be reduced or exempted. In such cases, the total amount of transfer income taxes reduced or exempted shall be added up in order of transfer of assets: <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. A larger amount of amounts under the following items calculated by taxation period:(a) In cases where the total amount of transfer income taxes to be reduced or exempted pursuant to Articles 33, 43, 70, 77, 77-3 or Article 29 of the Addenda of Act No. 6538 exceeds 100 million won by taxation period, an amount equivalent to the exceeding part; and(b) In cases where the total amount of transfer income taxes to be reduced or exempted pursuant to Articles 33, 43, 69, 70, 77, 77-3 or Article 29 of the Addenda of Act No. 6538 exceeds 200 million won by taxation period, an amount equivalent to the exceeding part.2. A larger amount of amounts under the following items calculated as the total amount of the five taxation periods. In such cases, the total amount of transfer income taxes to be reduced or exempted in five taxation periods shall be calculated as the total amount of transfer income tax amount to be reduced or exempted in the relevant taxation period and transfer income tax amount reduced or exempted in the preceding four taxation periods:(a) In cases where the total amount of transfer income taxes to be reduced or exempted pursuant to Article 70 of the five taxation periods exceeds 100 million won, an amount equivalent to the exceeding part; and(b) In cases where the total amount of transfer income taxes to be reduced or exempted pursuant to Articles 69 and 70 of the five taxation periods exceeds 300 million won, an amount equivalent to the exceeding part.(2) Deleted. <by Act No. 9272, Dec. 26, 2008>(2) Where the total amount of the gift tax to be reduced or exempted pursuant to the provisions of Article 71 for five years exceeds 100 million won (hereafter referred to as the “ceiling of gift tax reduction or exemption” in this paragraph), an amount equivalent to such excessive portion shall not be reduced or exempted. In such cases, the ceiling of gift tax reduction or exemption shall be calculated according to the total amount of both the gift tax amount to be reduced or exempted and the gift tax amount reduced or exempted for five years before the date of such gift. <Newly Inserted by Act No. 8146, Dec. 30, 2006; Act No. 9272, Dec. 26, 2008>

(1) Deleted. <by Act No. 7839, Dec. 31, 2005>(2) As regards the corporation falling under each of the following subparagraphs, the amount of entertainment expenses added to deductible expenses in calculating its amount of income for each business year pursuant to Article 25 (1) of the Corporation Tax Act shall be an amount equivalent to 70/100 of the total amount referred to in the main sentence of the same Article and same paragraph: <Amended by Act No. 8827, Dec. 31, 2007>1. Deleted; <by Act No. 8827, Dec. 31, 2007>2. Government-contributed institutions prescribed by Presidential Decree; and3. Corporations in which the corporations under subparagraph 2 have invested, as prescribed by Presidential Decree.(3) The reception expenses disbursed by a national as the cultural expenses prescribed by Presidential Decree (hereafter referred to as the “cultural entertainment expenses” in this paragraph) not later than December 31, 2011, which exceed such an amount prescribed by Presidential Decree, shall be included in deductible expenses within the limits of an amount equivalent to 10/100 of the ceiling of entertainment expenses for a national (referring to the total of the amounts under subparagraphs of Article 25 (1) of the Corporation Tax Act or the total of the amounts under subparagraphs of Article 35 (1) of the Income Tax Act; hereafter the same shall apply in this paragraph) when calculating an amount of income for the taxable year concerned, notwithstanding the ceiling of entertainment expenses for a national. <Newly Inserted by Act No. 8493, Jun. 1, 2007; Act No. 9272, Dec. 26, 2008>

(1) Where a domestic corporation (excluding a non-profit domestic corporation) retaining the borrowings in excess of the standards prescribed by Presidential Decree taking into account the ratio of borrowings, etc. to the equity capital of such domestic corporation which runs a real estate rental business as its principal business receives the deposits, money for lease on a deposit basis, or similar ones by leasing the real estate except such houses as prescribed by Presidential Decree, or rights on the relevant real estate, the amount calculated as prescribed by Presidential Decree shall be added to gross income under Article 15 (1) of the Corporation Tax Act. <Amended by Act No. 6538, Dec. 29, 2001; Act No. 7839, Dec. 31, 2005>(2) In applying paragraph (1), the scope of borrowings, criteria for judging the principal business or other necessary matters shall be prescribed by Presidential Decree.

(1) Deleted. <by Act No. 7003, Dec. 30, 2003>(2) Any person who owns a submarine mining right under subparagraph 4 of Article 2 of the Submarine Mineral Resources Development Act (hereafter referred to as the “submarine mining concessionaire” in this Article) shall be exempted from the taxes under the following subparagraphs: <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7332, Jan. 5, 2005; Act No. 8138, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>1. Resident tax and business place tax imposed in connection with its exploratory or extracting projects for submarine minerals;2. Customs duties, value-added tax, individual consumption tax, and transportation energy environment tax on machinery, equipment and materials imported for its exploratory or extracting projects for submarine minerals;3. Individual consumption tax, and transportation energy environment tax on machinery, equipment and materials purchased in Korea for its exploratory or extracting projects for submarine minerals;4. Property tax, acquisition tax, and automobile tax imposed on properties used or required for its exploratory or extracting projects for submarine minerals; and5. Taxes imposed on services provided by the State or a local government, or taxes imposed in connection therewith.(3) Any machinery, equipment and materials that a submarine mining concessionaire’s agent or a contractor imports in the name of the relevant submarine mining concessionaire for a direct use for an exploratory or extracting project shall be exempted from the customs duties, value-added tax, individual consumption tax, and transportation energy environment tax. <Amended by Act No. 8138, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007; Act No. 9272, Dec. 26, 2008>(4) Deleted. <by Act No. 7003, Dec. 30, 2003>(5) Salaries that a submarine mining concessionaire, his agent or contractor pays to a foreigner employed to explore and develop submarine crude oil shall be exempted from the income tax not later than the business year wherein a submarine mining concessionaire pays the corporation tax for the first time. <Amended by Act No. 7003, Dec. 30, 2003>(6) The provisions of paragraphs (2), (3), and (5) shall apply to the portion for which the tax payment duty becomes effective on or before December 31, 2013. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 9272, Dec. 26, 2008>

(1) Where real estate registered in its actual titleholder’s name pursuant to Article 11 of the Act on the Registration of Real Estate under Actual Titleholder’s Name is only one case, and its value is 50 million won or less, and where it falls under any of the following subparagraphs, any taxes already exempted, imposed insufficiently or not imposed, shall not be additionally collected. In such cases, the scope of real estate registered in the actual titleholder’s name and the calculation of its value shall be prescribed by Presidential Decree:1. Where a name transferor and a household sharing a livelihood with him has been subjected to non-taxation following a transfer under one house for one household pursuant to subparagraph 3 of Article 89 of the Income Tax Act prior to the enforcement of this Act, and where he is no longer eligible for non-taxation on the date of transfer of the relevant house due to its registration in the actual title-holder’s name; or2. Where any gift tax, for which a tax payment duty becomes effective prior to the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name, is imposed on a titleholder pursuant to Article 32-2 of the previous Inheritance Tax Act (referring to that prior to the amendment by Act No. 5193, December 30, 1996).(2) Deleted. <by Act No. 7003, Dec. 30, 2003>

(1) For the income from domestic source under subparagraph 5 of Article 119 of the Income Tax Act or subparagraph 5 of Article 93 of the Corporation Tax Act accruing from transfer of inventory assets which a non-resident who has no domestic place of business under Article 120 of the Income Tax Act or a foreign corporation under Article 94 of the Corporation Tax Act (hereafter in this Article referred to as a “non-resident, etc.”) manufactured or took over overseas after keeping them in a bonded area under Article 154 of the Customs Act or in distribution facilities under Article 2 (1) 4 of the Framework Act on Logistics Policies located in a Free Trade Zone under subparagraph 1 of Article 2 of the Act on Designation and Management of Free Trade Zones, the income tax under Article 156 (1) of the Income Tax Act or the corporation tax under Article 98 (1) of the Corporation Tax Act shall be exempted.(2) Any non-resident, etc. who intends to be governed by paragraph (1) shall apply for exemption as prescribed by Presidential Decree.[This Article Newly Inserted by Act No. 9272, Dec. 26, 2008]

(1) The Minister of Strategy and Finance shall establish a basic plan on special taxation and its restriction and notify the heads of the central administrative agencies thereof not later than March 31 each year. <Amended by Act No. 8852, Feb. 29, 2008>(2) The heads of the central administrative agencies shall submit a recommendation for tax reduction or exemption including the objectives of, and policy effects expected from such tax reduction or exemption, estimated revenue effects by year, related statistical data, etc. (hereafter referred to as the “recommendation for tax reduction or exemption” in this Article) with respect to the matters for which such reduction or exemption is deemed necessary for the efficient implementation of economic and social policies, etc., to the Minister of Strategy and Finance not later than May 31 of each year. <Amended by Act No. 8852, Feb. 29, 2008>(3) The heads of the central administrative agencies shall submit a written opinion on the analysis of effects by the tax reduction or exemption and on whether such reduction or exemption system is to be maintained (hereafter referred to as the “written assessment of tax reduction or exemption” in this Article) with respect to the matters of special taxation prescribed by Presidential Decree, to the Minister of Strategy and Finance not later than May 31 each year. <Amended by Act No. 8852, Feb. 29, 2008>(4) The submission of a recommendation for and a written assessment of tax reduction or exemption under paragraphs (1) through (3) and other necessary matters shall be determined by the Minister of Strategy and Finance. <Amended by Act No. 8852, Feb. 29, 2008>

(1) Where a national concurrently runs a business subject to the provisions of Articles 6, 7, 12-2, 31 (4) and (5), 32 (4), 33-2, 55-2 (4), 63, 63-2 (2), 64, 68, 102, 121-2, 121-4, 121-8, 121-9 (2), 121-17 (2), and 122 of this Act, and Articles 11 and 12 (4) of the Addenda of the amended Regulation of Tax Reduction and Exemption Act (Act No. 5584) and other businesses, he shall make a separate accounting as prescribed by Presidential Decree. <Amended by Act No. 6045, Dec. 28, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 6689, Apr. 20, 2002; Act No. 7216, Jul. 26, 2004; Act No. 7220, Oct. 5, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8146, Dec. 30, 2006; Act No. 8827, Dec. 31, 2007>(2) A national who runs a consumptive service business and other businesses at the same time shall make a separate accounting of his assets, liabilities, profits and losses by dividing them into each business as prescribed by Presidential Decree. <Amended by Act No. 6762, Dec. 11, 2002>

(1) From among the tax amounts to be deducted pursuant to Articles 5, 7-2, 10, 11, 12 (2), 24, 25, 25-2 through 25-4, 26, 30-2, 94, 104-5, 104-8, 104-14, 104-15 and 104-18 of this Act, and Article 12 (2) (limited to the amended provisions of former Article 37) of the Addenda of the amended Regulation of Tax Reduction and Exemption Act (Act No. 5584), the amount equivalent to the portions of such events as there exists no tax amount payable for the relevant taxable year or as being not deducted by the application of the minimum tax under Article 132, shall be carried over to each taxable year ending within five years from the starting day of the taxable year next to the relevant taxable year, and shall be deducted from his income tax (only applicable to the income tax on the business income) or corporation tax in each taxable year whereto such portions have been carried over. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9131, Sep. 26, 2008; Act No. 9272, Dec. 26, 2008>(2) If the amounts to be deducted from the income tax or corporation tax for each taxable year, which are deductible under Articles 5, 7-2, 10, 11, 12 (2), 24, 25, 25-2 through 25-4, 26, 30-2, 94, 104-5, 104-8, 104-14, 104-15 and 104-18 of this Act, and Article 12 (2) (limited to the amendments to previous Article 37) of the Addenda of the amended Regulation of Tax Reduction and Exemption Act (Act No. 5584), and the non-deducted amounts carried over pursuant to paragraph (1), overlap with each other, the non-deducted amounts carried over pursuant to paragraph (1) shall be deducted first, and if any overlap occurs between the non-deducted amounts carried over, the deduction shall be made successively in the order of their occurrence. <Amended by Act No. 5996, Aug. 31, 1999; Act No. 6297, Dec. 29, 2000; Act No. 6538, Dec. 29, 2001; Act No. 7003, Dec. 30, 2003; Act No. 7216, Jul. 26, 2004; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005; Act No. 8827, Dec. 31, 2007; Act No. 9131, Sep.26, 2008; Act No. 9272, Dec. 26, 2008>

In cases where any person subjected to deduction of the income tax or corporation tax under Articles 5, 11, 24 through 26, and 94 of this Act and Article 12 (2) (limited to the provisions of the previous Article 37) of the Addenda of the amended Regulation of Tax Reduction and Exemption Act (Act No. 5584), has disposed of the relevant assets (including a case of lease, and excluding the cases prescribed by Presidential Decree) prior to the date on which 2 years elapse from the date on which the investment is completed under the same Article, he shall pay the income tax or corporation tax by adding the additional amount equivalent to the interests calculated as prescribed by Presidential Decree to the amount equivalent to the tax-deducted amount on the relevant assets; and the relevant tax amount shall be deemed to be the tax amount to be paid under Article 76 of the Income Tax Act or Article 64 of the Corporation Tax Act. <Amended by Act No. 7003, Dec. 30, 2003; Act No. 7322, Dec. 31, 2004; Act No. 7839, Dec. 31, 2005>[This Article Wholly Amended by Act No. 6762, Dec. 11, 2002]

ADDENDA

This Act shall enter into force on January 1, 1999: Provided, That the amendments to Articles 38, 39 and 45 through 48 shall enter into force on the date of its promulgation.

(1) The amendments related to the income tax and corporation tax in this Act shall apply starting with the taxable year that first starts after this Act enters into force.(2) The amendments relating to the transfer income tax and its special surtax in this Act shall apply starting with the portion first transferred after this Act enters into force.(3) The amendments relating to the value-added tax in this Act shall apply starting with the portion of goods or services first supplied or purchased, or goods declared for import after this Act enters into force.(4) The amendments relating to the special consumption tax in this Act shall apply starting with the portion whose taxable period first arrives after this Act enters into force.(5) The amendments relating to the liquor tax in this Act shall apply starting with the portion first shipped out of a factory or a bonded area after this Act enters into force.(6) The amendments relating to the inheritance or gift tax in this Act shall apply starting with the portion for which an inheritance first commences or is donated after this Act enters into force.(7) The amendments relating to the stamp tax in this Act shall apply starting with taxable documents first prepared after this Act enters into force.(8) The amendments relating to the securities transaction tax in this Act shall apply starting with the portion first transferred, withdrawn, incorporated, entrusted or invested in kind after this Act enters into force.(9) The amendments relating to the customs in this Act shall apply starting with the portion first declared for import after this Act enters into force.(10) The amendments relating to the local taxes in this Act shall apply starting with the portion first acquired, registered or on which the property tax or aggregate land tax is first imposed and collected after this Act enters into force.

The amendments to Articles 4, 9, 28, 30, 58, 59, and 75 shall apply to the reserves first charged to deductible expenses after this Act enters into force: Provided, That the amendments relating to the payment of an amount equivalent to interest under the provisions of Articles 4 (4), 9 (4), 28 (4), 30 (2), 58 (4), 59 (5) and 75 (4) shall apply startingwith the portion that is first added to gross income after this Act enters into force. In this case, the amounts added to gross income under Articles 4, 8, 28, 29, 41, 42 and 61-2 of the previous Regulation of Tax Reduction and Exemption Act shall be deemed the amount added to gross income under this Act.

The amendments to Articles 5, 11, 24 through 26, 62, 65 (2), 94, 103 and 126 shall apply starting with the portion first invested after this Act enters into force.

The amendments to Article 12 shall apply starting with the portion first transferred, provided or leased after this Act enters into force.

(1) The amendments to Articles 36 (2) 1, 37 (2) 1, 40 (1) 3 and 41 (1) 3 shall apply starting with the portion of real estate first transferred or donated prior to the enforcement date of this Act, but whose redemption date of liabilities to financial institutions has not arrived.(2) In applying the amendments to Articles 37 (2) 2, 40 (2) 2, 41 (3) 2 and 42 (2) 3 to real estate transferred prior to the enforcement date of this Act, the said amendments shall apply starting on the date on which such real estate is transferred.(3) The amendments to Articles 40 (1) 1 and 2, and 41 (1) 2 and (4) shall apply starting with the portion first transferred or donated on or after February 24, 1998.

Where a person obtains any tax abatement or exemption under Article 127, 128, 132, 134, 144 and 145 in the taxable year that commences prior to the enforcement date of this Act, such abated or exempted tax amount shall be considered a tax amount abated and exempted under Article 112, 117, 118, 120, 121 and 123 of the previous Regulation of Tax Reduction and Exemption Act.

(1) The amendments to Articles 13, 14 (1) 2 through 4 and 14 (2) shall apply starting with the portion of stocks or contribution shares first acquired after this Act enters into force.(2) The amendments to Articles 14 (4) and (5), 20 (limited to the portion collected by withholding at source), 29, 89 and 91 shall apply starting with the portion whose tax withholding time first arrives after this Act enters into force.(3) The amendments to Article 15 shall apply to stock options first granted after this Act enters into force.(4) The amendments to Article 16 shall apply starting with the portion first contributed or invested after this Act enters into force.(5) The amendments to Article 17 (1) shall apply starting with investment or loan loss reserves first charged to deductible expenses after this Act enters into force. In this case, the balance in such investment or loan loss reserve accounts that are charged to deductible expenses under Article 14 (1) of the previous Regulation of Tax Reduction and Exemption Act at the time this Act enters into force shall be deemed an investment or loan loss reserve under this Act.(6) The amendments to Articles 21 and 22 (limited to the portions relating to the enforcement of the Foreign Exchange Transactions Act) shall apply starting with the portion that first becomes applicable under the Foreign Exchange Transactions Act after this Act enters into force.(7) The amendments to the proviso of Article 21 (1) shall apply starting with the portion of bonds denominated in foreign currency first issued after this Act enters into force.(8) The amendments to Article 23 shall apply starting with the portion first transferred after this Act enters into force.(9) The amendments to Article 38 shall apply starting with the portion first invested in kind in the business year whereto belongs the date on which this Act enters into force.(10) The amendments to Article 39 shall apply starting with the portion of liabilities first assumed, performed, abated or exempted in the business year whereto belongs the date on which this Act enters into force.(11) The amendments to Article 45 shall apply starting with the portion of liabilities first exempted or equity capital decreased in the business year whereto belongs the date on which this Act enters into force.(12) The amendments to Article 46 shall apply starting with the portion of stocks transferred or taken over or liabilities accepted or performed or real estate donated in the taxable year whereto belongs the date on which this Act enters into force.(13) The amendments to Article 47 shall apply starting with the portion of stocks exchanged in the business year whereto belongs the date on which this Act enters into force.(14) The amendments to Article 48 (4) shall apply starting with the portion of bad debt allowances that are charged to deductible expenses in the business year whereto belongs the date on which this Act enters into force.(15) The amendments to Article 100 (1) shall apply to housing subsidies first paid after this Act enters into force.(16) The amendments to Article 135 shall apply only to the business year commencing on or before December 31, 1999 with respect to assets provided for in paragraph (1) 2 of the said Article.(17) The amendments to Article 141 shall apply starting with the portion first converted to an actual name titleholder after this Act enters into force.(18) The amendments to Article 146 shall apply starting with the portion for which a cause for an additional collection first occurs after this Act enters into force (including the portion for which a cause for the additional collection occurs after this Act enters into force among the abated or exempted tax amounts under the previous Regulation of Tax Reduction and Exemption Act).

(1) The national taxes and local taxes imposed or taxable pursuant to the previous provisions prior to the enforcement date of this Act shall be governed by the previous provisions.(2) The national taxes and local taxes abated or abatable pursuant to the previous provisions prior to the enforcement date of this Act shall be governed by the previous provisions.(3) The Acts and subordinate statutes that cite the previous Regulation of Tax Reduction and Exemption Act and its articles or clauses at the time this Act enters into force shall be deemed the respective corresponding articles or clauses of this Act.

The reserves that have been charged to deductible expenses in calculating incomes for each taxable year pursuant to Articles 4, 8, 28, 29, 41, 42 and 61-2 of the previous Regulation of Tax Reduction and Exemption Act at the time this Act enters into force shall be added to gross income pursuant to the previous provisions.

(1) Patents, utility models, or technical know-how leased prior to the enforcement date of this Act shall be governed by the provisions of Article 11 of the previous Regulation of Tax Reduction and Exemption Act until the relevant lease term expires.(2) A national who is subject to Articles 6, 34, 46, 50, 51 (1), 53 and 96 of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act shall be governed by the provisions of Articles 6, 34, 63, 64, 65 (1), 68 and 101 of this Act, respectively, from the taxable year first starting after this Act enters into force and limited to the remaining abatement or exemption period.

(1) The previous provisions shall apply to adding to gross income of the amount charged to deductible expenses pursuant to Articles 24-2 and 40-4 of the previous Regulation of Tax Reduction and Exemption Act.(2) Where an enterprise designated as the enterprise subject to rationalization pursuant to Article 39 (1) of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act satisfies the rationalization standards under paragraph (2) of the said Article, the provisions of Articles 35 through 37 of the previous Regulation of Tax Reduction and Exemption Act shall govern.(3) Capital increases subjected to Article 93 of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act shall be governed by the previous provisions during the remaining deduction period under the same Act.(4) A small or medium business subjected to Article 54 of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act shall be governed by the previous provisions during the remaining abatement or exemption period under the same Act.(5) Borrowings for housing funds subjected to Article 92-4 of the previous Regulation of Tax Reduction and Exemption Act at the time this Act enters into force shall be governed by the previous provisions until their redemption is completed.(6) Reserves for a mine closure subjected to Article 123-2 of the previous Regulation of Tax Reduction and Exemption Act at the time this Act enters into force shall be governed by the previous provisions.

(1) Long-term household savings under Article 80-3 of the previous Regulation of Tax Reduction and Exemption Act shall, limited to those whose contracts are concluded on or before December 31, 1998, be governed by the previous provisions not later than the expiration of the relevant savings contracts.(2) Employee stock savings under Article 80-4 of the previous Regulation of Tax Reduction and Exemption Act shall, limited to those whose contracts are concluded and the deposit amounts are paid on or before December 31, 1998, be governed by the previous provisions not later than the expiration of such savings contracts.

(1) The carry-over taxation on the assets subjected to an application of the carry-over taxation pursuant to Articles 31, 32 and 40-4 of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act, shall be governed by the previous provisions.(2) The tax abatement or exemption, deferment, post management thereof and additional collection on the assets subjected to tax abatement or exemption, etc. pursuant to Articles 33, 40-8, 43, 44, 70, 71 and 75 (2) of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement of this Act, shall be governed by the previous provisions.(3) Rental houses whose rental starts under previous Article 67 while the Regulation of Tax Reduction and Exemption Act (Act No. 4806) is in force, shall be governed by the previous provisions.(4) With respect to land, etc. transferred under previous Articles 31 through 33, 43, 44, 68, 70 and 71 (including where applied mutatis mutandis in Article 75 (2)) while the Regulation of Tax Reduction and Exemption Act (Act No. 5417) is in force, the tax abatement or exemption, special treatment of transfer value, deferment and additional collection of tax, etc. shall be governed by the previous provisions.

(1) The post management and tax collection for land, etc. subject to an exemption of the gift tax pursuant to Article 58 of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act, shall be governed by the previous provisions.(2) Any land, etc. subject to exemption from the gift tax pursuant to Article 58 (1) of the previous Regulation of Tax Reduction and Exemption Act at the time this Act enters into force, and that a self-cultivating farmer donates to his children engaged in farming not later than December 31, 2006, shall be exempted from the gift tax pursuant toArticle 58 (2) through (5) of the previous Regulation of Tax Reduction and Exemption Act. <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003>

(1) The post management and tax collection for land, etc. subject to exemption from the transfer income tax and gift tax under previous Articles 56 and 57 while the Amendment Act to the Regulation of Tax Reduction and Exemption Act (Act No. 5195) is in force, shall be governed by previous Articles 56 and 57.(2) Any land, etc. subject to exemption from the transfer income tax and gift tax under previous Articles 56 (1) and 57 (1) (limited to those located within an agricultural promotion area under the Farmland Act) while the Amendment Act to the Regulation of Tax Reduction and Exemption Act (Act No. 5195) is in force, and that are transferred or donated not later than December 31, 2006, shall be exempted from the transfer income tax or gift tax pursuant to previous Article 56 (2) through (5) or 57 (2) through (4). <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003>(3) Any fishing ships and fishing rights subject to exemption from the gift tax under previous Article 57 (1) while the Regulation of Tax Reduction and Exemption Act (Act No. 5195) is in force, and that are donated not later than December 31, 2006, shall be exempted from the gift tax pursuant to previous Article 57 (2) through (4). <Amended by Act No. 6297, Dec. 29, 2000; Act No. 7003, Dec. 30, 2003>

Foreign investments that have been excluded from tax abatement or exemption pursuant to Article 47 (3) and (4) of the previous Regulation of Tax Reduction and Exemption Act prior to the enforcement date of this Act, shall be governed by the previous provisions.

ADDENDA <Act No. 5960, Mar. 31, 1999>

This Act shall enter into force on April 1, 1999.

ADDENDA <Act No. 5980, Apr. 30, 1999>(1) (Enforcement Date) This Act shall enter into force on July 1, 1999.(2) (Application Examples) The amendments to Article 106 (1) 2 shall apply starting with the portion first supplied after this Act enters into force.ADDENDA <Act No. 5982, May 24, 1999>

This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)

ADDENDA <Act No. 5996, Aug. 31, 1999>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 126-2 shall enter into force on the first day of the month next to that whereto belongs the date of promulgation.

(1) The amended provisions of Articles 6 and 31 shall apply starting with a start-up first established or venture business first confirmed after the enforcement of this Act: Provided, That they shall apply starting with the taxable period first commences after January 1, 2001 with respect to the nationals that established a new enterprise after August 31, 1997, and has been confirmed as a venture business not later than August 30, 1999. In this case, this shall apply only to the remaining abatement or exemption period if any income first accrues on or before December 31, 2000. <Amended by Act No. 6297, Dec. 29, 2000>(2) The amended provisions of Article 63 shall apply starting with the portion of factory facilities first relocated after this Act enters into force.

(1) The amended provisions of Article 8-2 shall apply starting with the taxable year whereto belongs the date this Act enters into force.(2) The amended provisions of Articles 60 and 61 shall apply starting with the portion first transferred after this Act enters into force.

(1) The amended provisions of Article 16 shall apply starting with the portion of contributions or investments first made after this Act enters into force.(2) The amended provisions of Article 126-2 shall apply starting with the portion of payments by credit or debit cards first disbursed after the enforcement date of this Act. In this case, as regards the income deduction on the amount spent by credit cards, etc. from the date this Act enters into force to November 30, 1999, in case where the amount spent by credit cards, etc. exceeds 10/100 of the gross earned income during the same period, the amount equivalent to 10/100 of the excessive amount (up to a maximum of 1 million won) shall be deducted from the earned income for the relevant taxable year.

The amended provisions of Articles 27 and 62 shall apply starting with equity investments or acquisitions made first after this Act enters into force.

(1) The amended provisions of Articles 37, 47-2 and 49 shall apply starting with a merger first effected in the taxable year whereto belongs the date this Act enters into force.(2) The amended provisions of Articles 38 and 42 shall apply starting with investments in kind made in the taxable year whereto belongs the date this Act enters into force.(3) The amended provisions of Article 38-2 shall apply starting with investments in kind or transfers first effected after this Act enters into force.(4) The amended provisions of Article 39 shall apply starting with the portion of a guaranteed liabilities first assumed or performed after this Act enters into force.(5) The amended provisions of Article 44 shall apply starting with the taxable year whereto belongs the date this Act enters into force.(6) The amended provisions of Article 99 (1) shall apply starting with the portion first transferred on or after July 1, 1999.

The amended provisions of Article 91-2 shall apply starting with the taxable year whereto belongs the date this Act enters into force.

(1) The amended provisions of Article 106 shall apply starting with the portion first supplied after this Act enters into force.(2) The amended provisions of Articles 112-2 and 113 shall apply starting with the portion first shipped out of factories or bonded areas after this Act enters into force.

The amended provisions of Article 117 shall apply starting with stocks or contribution shares first transferred after this Act enters into force.

The amended provisions of Articles 119 through 121 shall apply starting with the portion first acquired after this Act enters into force.

The amended provisions of Articles 127, 128, 132, 144, 145 and 146 shall apply starting with the taxable year whereto belongs the date this Act enters into force.

(1) A small or medium enterprise subjected to the previous provisions of Articles 6 and 63 at the time this Act enters into force shall be governed by the previous provisions.(2) The acts performed by the Minister of Finance and Economy pursuant to the previous provisions of Article 50 (2) 1 prior to the enforcement of this Act shall be deemed the acts performed by the Chairman of the Financial Supervisory Commission.(3) The addition to gross income of the reserves charged to deductible expenses pursuant to the previous provisions of Articles 58 and 59 at the time this Act enters into force, and additional collection thereof, shall be governed by the previous provisions.(4) In applying the amendments to Article 87 (2), the previous provisions shall apply to the savings deposited on or before December 31, 1998.

ADDENDA <Act No. 6045, Dec. 28, 1999>

This Act shall enter into force on January 1, 2000: Provided, That the amended provisions of Articles 14, 16, 41-2, 44, 48 (4), 86 (2), 104-2, 117 (1) 2-2 and the amended provisions of subparagraph 3 of Article 4 of the Special Tax Law for Rural Development among the amended provisions of Article 16 of these Addenda, shall enter into force on the day of its promulgation, while the amendment to Articles 50, 72 (1) 2, 3, and 7, Articles 74 and 84 (excluding those concerning the farmland improvement cooperatives and the Agriculture Infrastructure Corporation), subparagraphs 5 and 6 of Article 105 and Article 116 shall enter into force on July 1, 2000, and the amended provisions of subparagraph 4 of Article 4 and Article 5 of the Special Tax Law for Rural Development among the amended provisions of Articles 89, 89-2 and 90 and the amended Article 16 of these Addenda shall enter into force on January 1, 2001.

(1) The amended provisions concerning the income tax and corporation tax in this Act shall apply starting with the portion of taxable year first commencing after this Act enters into force.(2) The amended provisions concerning the transfer income tax and special surtax in this Act shall apply starting with the portion of a transfer first effected after this Act enters into force.(3) The amended provisions concerning the value-added tax in this Act shall apply starting with the portion of goods or services first supplied or purchased after this Act enters into force.(4) The amended provisions concerning the special consumption tax in this Act shall apply starting with the portion of taxable period first arriving after this Act enters into force.(5) The amended provisions concerning the stamp tax in this Act shall apply starting with the portion of taxable documents first prepared after this Act enters into force.(6) The amended provisions concerning the customs in this Act shall apply starting with the portion of imports first declared after this Act enters into force.

The amended provisions of Articles 14 and 16 shall apply starting with the portion of equity investments in a corporate restructuring cooperative, or of acquisition of stocks or contribution shares by such a cooperative during the taxable period whereto belongs the date this Act enters into force.

The amended provisions of Article 21 (3) shall apply starting with the portion of securities first transferred after this Act enters into force.

(1) The amended provisions of Article 38 shall apply starting with the portion of investments in kind first made after this Act enters into force.(2) The amended provisions of Article 41-2 (1) and (2) shall apply starting with the portion of assets donated gratuitously during the business year first closed after this Act enters into force, and the amended provisions of the same Article (3) shall apply starting with the portion of assets first donated after the date on which a petition is filed for commencement of liquidation proceedings, etc.(3) The amended provisions of Article 44 shall apply starting with the portion of liabilities exempted in the business year closing first after this Act enters into force: Provided, That the decreased liability excluded from adding to gross income and included in ductible expenses which satisfy the requirements under each subparagraph of previous Article 44 (1) shall be governed by the previous provisions.(4) The amended provisions of Article 48 (4) shall apply starting with the portion of bad debt allowances charged to deductible expenses in the business year whereto belongs the date on which this Act enters into force.(5) The amended provisions of Article 120 (5) 8 shall apply starting with the portion of stocks first acquired after this Act enters into force.

(1) The amended provisions of Article 63-2 (2) shall apply starting with the portion of the taxable year whereto belongs the date on which a factory or head office is first relocated after this Act enters into force: Provided, That such cases are excluded where a site or building has been transferred prior to the enforcement of this Act, and such relocationis made after this Act enters into force.(2) The amended provisions of Article 63-2 (3) and (4) shall apply starting with the portion of first transfer after this Act enters into force: Provided, That such portions are excluded where a relocation is made prior to the enforcement of this Act and a transfer is effected after this Act enters into force.

(1) The amended provisions of Article 86 (2) shall apply starting with the portion of tax-favored savings terminated or withdrawn in other forms than annuity payments in the taxable period whereto belongs the date on which this Act enters into force.(2) The amended provisions of Article 89 shall apply starting with the portion of savings contracts first concluded after this Act enters into force.(3) The amended provisions of Article 90-2 shall apply starting with the portion of savings contracts first concluded or terminated after this Act enters into force.

The amended provisions of Article 104-2 shall apply starting with the portion of subsidies granted or received in the taxable year whereto belongs the date on which this Act enters into force.

(1) The amended provisions of subparagraph 3-2 of Article 105 shall apply starting with the portion of adoption of donations first made to the State or local governments after this Act enters into force.(2) The amended provisions of Article 107 shall apply starting with the portion of first supplied or purchased after this Act enters into force.

The amended provisions of Article 117 shall apply starting with the portion of stock certificates or equity shares first transferred after this Act enters into force.

The amended provisions of Articles 119 and 120 shall apply starting with the portion of registration or acquisition first effected after this Act enters into force.

(1) Persons who establish the tax-favored savings accounts as of December 31, 2000 under the previous provisions of Article 89 (1) 1 (excluding the cases where the amended provisions of Article 89-2 are applicable), 3 (excluding the national stocks trust), 4, 5, 6 or 8 shall be deemed the holders of tax-favored comprehensive savings accounts under the amended provisions of Article 89. In case where the total contracted amount of said savings accounts exceeds the limit for tax-favored comprehensive savings under the amended provisions of Article 89 (1) 3, such excessive portion shall also be deemed the tax-favored comprehensive savings not later than the expiration of the same savings.<Amended by Act No. 6297, Dec. 29, 2000>(2) Any financial institutions handling the tax-favored comprehensive savings under paragraph (1) shall notify the tax-favored savings data center of the name and resident registration number by holder of the said savings account, and other particulars including the conclusion and termination of savings contracts, and right transfers not later than December 31, 2000. <Amended by Act No. 6273, Oct. 21, 2000; Act No. 6297, Dec. 29, 2000>(3) Deleted. <by Act No. 6297, Dec. 29, 2000>

In applying Article 84 (2), the use period of facilities by the previous farmland improvement cooperatives or their national federation at the time this Act enters into force, shall be considered the period used by the Agriculture Infrastructure Corporation.

(1) The provisions of previous Article 90 shall apply only to incomes accruing on or before December 31, 2000 from the household livelihood fund savings under the same Article.(2) The amended provisions of Article 90-2 shall apply to the tax-favored savings data on the household livelihood fund savings under the provisions of previous Article 90 (2).

The previous provisions shall apply to the goods and services subjected to exemption from the value-added tax under the provisions of previous Article 106 (1) 5 at the time this Act enters into force.

The amended provisions of subparagraph 3 of Article 4 of the Special Tax Law for Rural Development in the amended provisions of Article 16 of these Addenda, shall apply starting with the taxable year whereto belongs the date this Act enters into force, and the amended provisons of subparagraph 4 of Article 4 and Article 5 of the same Act shall apply starting with the portion of a payment of income accruing after January 1, 2001.

In the case of the abatement or exemption for the interest and dividend income accruing from the savings under the provisions of previous Article 89 (1) 4 from among the amended provisions of subparagraph 4 of Article 4 of the Special Tax Law for Rural Development, the previous provisions shall apply, not later than the expiry of the same savings, to the portion of opening an account for such savings until December 31, 2000.

ADDENDA <Act No. 6054, Dec. 28, 1999>(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.(2) Omitted.ADDENDA <Act No. 6055, Dec. 28, 1999>

This Act shall enter into force on January 1, 2000. <Proviso Omitted.>

ADDENDA <Act No. 6073, Dec. 31, 1999>

This Act shall enter into force on the date of its promulgation.

ADDENDA <Act No. 6136, Jan. 12, 2000>

This Act shall enter into force two months after the date of its promulgation.

ADDENDA <Act No. 6194, Jan. 21, 2000>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 6273, Oct. 21, 2000>

This Act shall enter into force on the date of its promulgation: Provided, That the matters related to financial holding companies in the amended provisions of Articles 38, 52-2, 117, 119 and 120 shall enter into force on the date on which the Financial Holding Companies Act enters into force, while the amended provisions of Article 89 (2) shall enter intoforce on January 1, 2001.

The amended provisions of Article 7-2 (1) shall apply starting with the portion first settled or issued after this Act enters into force: Provided, That the portion issued before the enforcement date of this Act shall be excluded in calculating the amount under paragraph (1) 2 of the same Article.

The amended provisions of Articles 45-2 and 106 (3) shall apply starting with the portion of a corporate division effected first after this Act enters into force.

The amended provisions of Article 52-2 shall apply starting with the portion of stocks transferred or exchanged first after this Act enters into force.

The amended provisions of Article 55 (4) shall apply starting with the portion first transferred or dividend income first paid after this Act enters into force.

The amended provisions of Article 72-2 shall apply starting with the business year whereto belongs the date this Act enters into force.

(1) The amended provisions of Article 73 (1) 12 shall apply starting with the portion first disbursed after this Act enters into force.(2) The amended provisions of Article 74 (1) 10 shall apply starting with the portion of taxable year whereto belongs the date this Act enters into force.

The amended provisions of Article 88-2 shall apply starting with the portion of savings accounts first opened after this Act enters into force, and the amended provisions of Article 88-3 shall apply starting with the portion of income first paid after this Act enters into force.

The amended provisions of Article 117 (1) 8, 16 and 17 shall apply starting with the portion of stocks sold, transferred or exchanged first after this Act enters into force.

The amended provisions of Article 119 (1) 18 through 20 and paragraph (6) of the same Article shall apply starting with the portion of registration first effected after this Act enters into force.

The amended provisions of Article 120 (5) 8 and 11 shall apply starting with the portion of stocks or equity shares first acquired after this Acts enters into force.

The amended provisions of the text of Articles 128 (1), 132 (1) 3, 144 (1) and 145 (1) shall apply starting with the portion of taxable year whereto belongs the date this Act enters into force.

The amended provisions of Article 13 of these Addenda shall apply starting with the portion of income first paid after this Act enters into force.

ADDENDA <Act No. 6297, Dec. 29, 2000>

This Act shall enter into force on January 1, 2001: Provided, That the amended provisions of Articles 6, 72-2 (2) and 88-6 shall enter into force on its promulgation date, the portions concerning the donations in the amended provisions of Article 72 (1) and (4), on January 1, 2003, the amended provisions of Article 106-2, on January 1, 2002, and the amended provisions of Articles 121-2 (9), 121-5 (1) 1, (2) 1 and (3) 3, on February 1, 2001. <Amended by Act No. 6538, Dec. 29, 2001>

(1) The amended provisions concerning the income tax and corporation tax in this Act shall apply starting with the portion of taxable year first starting after this Act enters into force.(2) The amended provisions concerning the transfer income tax and special surtax in this Act shall apply starting with the portion first transferred after this Act enters into force.(3) The amended provisions concerning the value-added tax in this Act shall apply starting with the portion of goods or services first supplied or purchased, goods declared for import after this Act enters into force.(4) The amended provisions concerning the special consumption tax in this Act shall apply starting with the portion first shipped out of a manufacturing place or a bonded area, or declared for import after this Act enters into force.

The amended provisions of Articles 5 (1), 24, 25 and 25-2 shall apply starting with the portion first invested after this Act enters into force.

The amended provisions of Article 6 shall apply starting with the taxable year whereto belongs the enforcement date of this Act.

The amended provisions of Article 12 shall apply starting with the portion first transferred, leased, provided or acquired after this Act enters into force.

The amended provisions of Article 13 (excluding paragraph (1) 3 of the same Article) and Article 14 shall apply starting with the portion of stocks or contribution shares first acquired after this Act enters into force, and the amended provisions of Article 13 (1) 3 shall apply starting with the portion of stocks or contribution shares first transferredafter this Act enters into force.

The amended provisions of Article 15 shall apply starting with the portion of income accruing from exercising the stock option first granted after this Act enters into force.

The amended provisions of Article 29 shall apply starting with the portion of income first received after this Acts enters into force.

The amended provisions concerning the payment of the abated or exempted tax and an amount equivalent to interest thereof in the amended provisions of Articles 33, 35 through 37, 40, 42, 46, 60, 61, 63-2, 66, 67, 70, 71, 77, 79 through 81, 82 and 83, shall apply starting with the portion for which the relevant cause first occurs after this Act entersinto force.

The amended provisions of Articles 38 and 38-2 shall apply starting with the portion of stocks invested in kind or exchanged first after this Act enters into force.

The amended provisions of Article 43-2 shall apply starting with the taxable year whereto belongs the date on which the land, etc. are first transferred after this Acts enters into force.

The amended provisions of Articles 45-2 and 106 (3) shall apply starting with the portion first divided or converted into equity investment after this Act enters into force.

(1) The amended provisions of Article 63-2 (excluding paragraph (7) of the same Article) shall apply starting with the portion of factories or head offices first relocated after this Act enters into force.(2) The amended provisions of Article 64 (1) 2 shall apply starting with the portion of projects first started for locating in the abandoned mine promotion zone after this Act enters into force.

The provisions of Articles 66 (4) and 68 (2) shall apply starting with the portion of grassland first invested in kind to a agricultural partnership corporation or an corporation of agricultural business after this Act enters into force.

The amended provisions of Article 72-2 (2) shall apply starting with the taxable year whereto belongs the promulgation date of this Act.

The amended provisions of Article 73 shall apply starting with the portion first disbursed after this Act enters into force.

The amended provisions of Article 81-2 shall apply starting with the portion first determined after this Act enters into force.

(1) The amended provisions of Article 86 (2) and (6) shall apply starting with the portion of private pension savings accounts first transferred after this Act enters into force.(2) The amended provisions of Article 86-2 shall apply starting with the portion of savings accounts first opened after this Act enters into force.

(1) The amended provisions of Article 87 shall apply starting with the portion of savings accounts first terminated after this Act enters into force.(2) The amended provisions of Article 88-2 (1) shall apply starting with the portion of savings accounts first opened after this Act enters into force.(3) The amended provisions of Articles 88-4 and 88-5 shall apply starting with the portion of dividend income first paid after this Act enters into force.(4) The amended provisions of Article 88-6 shall apply starting with the portion of savings accounts first opened in the taxable year whereto belongs the promulgation date of this Act.(5) The amended provisions of Article 89-3 shall apply starting with the portion of income first accruing after this Act enters into force.(6) The amended provisions of Article 90-2 shall apply starting with the portion of tax-favored savings data for which a submission duty first effected after this Act enters into force.(7) The amended provisions of Article 91-2 (1) shall apply starting with the portion of income first accrued and paid after this Act enters into force, and the amended provisions of paragraph (6) of the same Article shall apply starting with the portion of profits first distributed or the portion of payment made for repurchase after this Act enters into force.(8) The amended provisions of Article 92 shall apply starting with the portion of income first paid after this Act enters into force.

The amended provisions of Article 99-2 shall apply starting with the portions first transferred on or after September 1, 2000.

The amended provisions concerning Article 104-3 in Articles 104-3 and 132 (1) 1 shall apply starting with the portion first reported after this Act enters into force.

The amended provisions of Article 116 shall apply starting with the portion of taxable documents first prepared after this Act enters into force.

The amended provisions of Article 118 (1) 10 shall apply starting with the portion first declared for import after this Act enters into force.

The amended provisions of Articles 119 and 120 shall apply starting with the portion first registered or acquired after this Act enters into force.

The amended provisions of the latter part of Article 121-2 (2) shall apply starting with the portion of merger first effected after this Act enters into force.

The amended provisions of Article 121-2 (10) or 121-6 (3) shall apply starting with the portion first applied for tax abatement or exemption after this Act enters into force.

The amended provisions of Article 127 (7) shall apply starting with the portion first applied for abatement or exemption of the transfer income tax or special surtax after this Act enters into force.

The exemption of value-added tax on “those prescribed by the Presidential Decree among the items listed in subparagraph 6” in the text of previous Article 106 (1) shall be applied only to the portions supplied not later than June 30, 2001, notwithstanding the previous time limit applicable.

The amended provisions of Article 8-2 shall apply to small or medium enterprises, whose stocks are listed on the Korea Stock Exchange or registered with the Korea Securities Dealers Association (KOSDAQ) at the time this Act enters into force, by treating them as listed or registered on the date on which this Act enters into force.

(1) The amended provisions of Articles 9 and 10 shall apply to the amount incurred, but not disbursed, among technology development reserves under the provisions of previous Article 9 or technology and manpower development expenses under Article 10, by treating them as having incurred in the taxable year first commenced after this Act enters intoforce.(2) The previous provisions of subparagraphs 3 and 6 of Article 146 shall apply to the additional collection of amounts deducted under the previous provisions of Articles 27, 27-2, 65 (2), 103 and 126 at the time this Act enters into force.

The previous provisions shall apply to the inclusion in gross income of the reserves charged to deductible expenses pursuant to the previous provisions of Article 30 at the time this Act enters into force. In this case, the amended provisions of Article 4 (4) shall apply mutatis mutandis to the payment of additional amount equivalent to the interest on the amount added to gross income.

The previous provisions shall apply to the additional collection of the special surtax or transfer income tax abated or exempted pursuant to the previous provisions of Articles 38-2 and 46-2 at the time this Act enters into force: Provided, That the amended provisions of Article 33 (2) and (4) shall apply mutatis mutandis in case where an event falling under any of the subparagraphs of previous Articles 38-2 (3) and 46-2 (2) occurs after this Act enters into force.

Notwithstanding the amended provisions of Article 37 (1), the amount equivalent to special surtax shall be exempted where land, etc. are transferred not later than December 31, 2001 according to a plan for improvement of financial structure or corporate improvement program approved under the previous provisions of Article 37 (1) at the time this Act enters into force.

Corporate improvement programs approved by the corporate restructuring committee under the previous provisions of Article 45-2 at the time this Act enters into force shall be regarded as approved by the creditor financial institutions consultative council under this Act.

The previous provisions shall, only for the remaining tax abatement period, apply to the clinics and general hospitals subject to the previous provisions of Article 65 (1) at the time this Act enters into force.

(1) Account holders for deposit in cooperatives, etc. under the amended provisions of Article 89-3 as of December 31, 2004 shall be treated as having established a tax-favored comprehensive savings account under Article 89, but where the total sum of the said deposit and the contract amount of tax-favored comprehensive savings exceeds the limit of tax-favored comprehensive savings under Article 89 (1) 3, such excessive portions shall also be treated as the tax-favored comprehensive savings not later than the expiration of such deposit account.(2) Financial institutions handling the deposits in cooperatives, etc. shall notify the tax-favored savings data center of the account holder’s name, resident registration number, conclusion or termination of savings contracts, and details of rights transfer under Article 89 (2) notlater than December 31, 2004.

The previous provisions of Article 113 (1) shall apply to the additional collection of the special consumption tax exempted under the previous provisions of subparagraphs 9 and 10 of Article 109 at the time this Act enters into force.

The previous provisions of Articles 119 (1) 7 and 120 (1) 6 shall apply to the exemption of registration tax and acquisition tax on the assets acquired through a corporate division under the previous provisions of Article 38-2 at the time this Act enters into force.

The previous provisions of Articles 127, 128, 132, 144 and 145 shall apply to the abated or exempted tax under the amended provisions of Article 25-2 in the taxable years that start before an enforcement of this Act and end after an enforcement of this Act, by treating such tax as having been abated or exempted under previous Article 25.

In applying the amended provisions of Article 121-2 (10) or 121-6 (3), where applications for tax abatement or exemption are filed before this Act enters into force, but a decision on tax abatement or exemption or a verification of tax exemption has not been obtained not later than the date this Act enters into force, such applications for tax abatement or exemption and for tax exemption shall be regarded as having been filed on the date this Act enters into force.

The abated or exempted tax amount (excluding the amount falling under each subparagraph of previous Article 145 (4) and the text of previous Article 145 (6)) subjected to the provisions of previous Article 145 (1) and (6) at the time this Act enters into force for the small or medium corporations, shall be deemed to have been first abated or exempted in the taxable year first commencing after the enforcement of this Act, but notwithstanding the amendments to Article 145 (5), it shall be used for an investment in the fixed assets or for repaying the borrowings not later than the end of the taxable year whereto belongs December 31, 2005. <Amended by Act No. 6538, Dec. 29, 2001>

ADDENDA <Act No. 6299, Dec. 29, 2000>

This Act shall enter into force on September 1, 2001.

ADDENDA <Act No. 6305, Dec. 29, 2000>

This Act shall enter into force on January 1, 2001.

ADDENDA <Act No. 6312, Dec. 29, 2000>

This Act shall enter into force on January 1, 2001. <Proviso Omitted.>

ADDENDA <Act No. 6372, Jan. 16, 2001>

This Act shall enter into force on the date of its promulgation.

ADDENDA <Act No. 6480, May 24, 2001>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 106 (1) 4-2, 119 (6) shall enter into force on July 1, 2001, and the amended provisions of Article 106 (1) 4-3 on January 1, 2004.

The amended provisions of Articles 74 (3) shall apply to the portion of incomes first accruing after the enforcement date of this Act.

The amended provisions of Articles 88-4 and 91 shall be applied to the portion of incomes first paid after the enforcement date of this Act.

The amended provisions of Article 104-4 shall be applied to the portion of transfer of stocks first made after the enforcement date of this Act.

The amended provisions of Article 106 shall be applied to the portion of services first provided after the enforcement date of this Act.

The amended provisions of Article 117 shall be applied to the portion of transfer of stocks first made after the enforcement date of this Act.

The amended provisions of Article 119 shall be applied to the portion of establishment registration first made after the enforcement date of this Act.

ADDENDA <Act No. 6501, Aug. 14, 2001>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 7-2 shall enter into force on November 1, 2001.

The amended provisions of Article 7-2 shall apply from the portion offirst using the corporate card meant exclusively for paying business purchases on or after November 1, 2001.

The portions related to the investment loss reserves among the amended provisions of Article 8-3 and of Article 55-2 shall apply from the portion of taxable year whereto belongs the date of promulgation of this Act.

The amended provisions of Article 26 (2) through (4) shall apply from the portion of intermediate prepayment first made after the enforcement of this Act.

(1) The portions related to Article 94 (1) 3 of the Income Tax Act among the amended provisions of Article 55 (4), 55-2 (3) and 55-2 (4) and the amended provisions of Articles 56, 78 (1) 11 and 14 and 99-3 (1) shall apply from the portion first transferred after the enforcement of this Act.(2) The amended provisions of Article 78 (2) shall apply from the portion first commencing the lease on or after May 7, 2001.

The portion related to the dividend among the amended provisions of Article 55-2 (4) shall apply from the portion of dividend first accruing after the enforcement of this Act.

The amended provisions of Article 87-2 shall apply from the portion of savings first opened after the enforcement of this Act.

(1) The amended provisions of Article 119 (1) and (7) shall apply from the portion of registration first filed after the enforcement of this Act.(2) The amended provisions of Articles 119 (6) and 120 (4) shall apply from the portion of acquisition first made after the enforcement of this Act.

The amended provisions of Article 122 shall apply to the portion of revenue amount by credit card for the taxable year whereto belongs the date of promulgation of this Act.

The amended provisions of Article 126-2 (1) shall apply to the portion of using the credit cards or debit cards in the taxable year whereto belongs the date of promulgation of this Act.

With respect to the amount using the corporate card meant exclusively for paying business purchases which have been used at the time of enforcement of the amended provisions of Article 7-2, the previous provisions shall govern, notwithstanding the amended provisions of Article 7-2.

Where the Small Business Corporation transfers on or before December 31, 2003 to the end-user occupants the apartment-type factory built by it on or before May 7, 2001 under the Industrial Placement and Factory Construction Act, the previous provisions shall govern with respect to the abatement or exemption of special surtax, notwithstanding the amended provisions of Article 78 (1).

Where any person has acquired a newly-built house under the previous provisions of Article 99-3 (1) on or before May 23, 2001, and transfers the said house after the enforcement of this Act, the previous provisions shall govern with respect to the abatement or exemption of transfer income tax and the calculation of revenue amounts subject to imposition of transfer tax, notwithstanding the amended provisions of Article 99-3 (1).

ADDENDA <Act No. 6510, Aug. 14, 2001>

This Act shall enter into force on January 1, 2002.

ADDENDA <Act No. 6519, Nov. 21, 2001>(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.(2) (Application Examples to Tax Deduction and Non-Taxation on Long-Term Stocks Savings) The amended provisions of Article 87-3 shall be applicable from the portion of deposits paid in the taxable year whereto belongs the enforcement date of this Act.ADDENDA <Act No. 6538, Dec. 29, 2001>

This Act shall enter into force on January 1, 2002: Provided, That the amendments to Articles 5-2,15 (1) and (2), 16 (3), 23 (1), 38 (3) through (5), 38-3, 45-2, 72-2 (2), 73 (1) 15, 74 (1) 12, 86-2 (10), 88-5 (2), 89 (1), 117 (1) 4 through 6, 10 and 18, 119 (1) 18, and 144 (2) shall enter into force on the date of its promulgation, the amendment to Article 106-2 (3) and (4) on July 1, 2002, and the amendments to Articles 106 (2) 2, 121-2 (excluding the portion concerning investment ratio of foreigners in the former part of paragraph (2)), and 121-5 on January 1, 2003, respectively.

(1) The amendments to the income tax and corporation tax from among this Act shall apply starting with the taxable year first commencing after this Act enters into force.(2) The amendments to the transfer income tax from among this Act shall apply starting with the portion of transfer first made after this Act enters into force.(3) The amendments to the value-added tax from among this Act shall apply starting with the portion of supply, or being supplied, of goods or services, or the portion of goods declared for import, first made after this Act enters into force.(4) The amendments to the special consumption tax and traffic tax from among this Act shall apply starting with the portion of carried out from the manufacturing place of bonded area, or the portion of import declaration, first made after this Act enters into force.(5) The amendments to the stamp tax from among this Act shall apply starting with the portion of preparing the taxable documents, first made after this Act enters into force.(6) The amendments to the securities transaction tax from among this Act shall apply starting with the portion of transferring the stocks or equity shares, first made after this Act enters into force.(7) The amendments to the customs duties from among this Act shall apply starting with the portion of import declaration, first made after this Act enters into force.(8) The amendments to the acquisition tax and registration tax from among this Act shall apply starting with the portion of acquisition or registration, first made after this Act enters into force.

The amendments to Articles 5 (1), 11 (1), 24 (1) and 130 (excluding the portion concerning business places) shall apply starting with the portion of investments after September 3, 2001, which is the portion of tax base return (excluding a return after term under Article 45-3 of the Basic Act for National Taxes), first made after this Act entersinto force.

The amendments to Article 5-2 shall apply from the taxable year whereto belongs the date of promulgation of this Act.

The amendments to Article 6 (4) shall apply from the portion of commencing a business after this Act enters into force.

(1) The amendments to Article 7-2 shall apply from the portion of paying the purchase price by using an exclusive-use card for business purchase or by utilizing a loan system on security of credit sale claims, first made after this Act enters into force.(2) The amendments to Article 7-3 shall apply from the portion of purchase first made after this Act enters into force.

The amendments to Articles 13 and 14 (1) 6, (2), (4) 4 and (5) shall apply from the portion of acquiring the stocks or equity shares or of being paid the dividend income first made after this Act enters into force, and the amendments to the text of other portions than each subparagraph of Article 14 (1) shall apply from the portion of transferring the stocks or equity shares, first made after this Act enters into force.

The amendments to Article 15 (1) and (2) shall apply from the portion of being granted in the taxable year whereto belongs the date of promulgation of this Act.

(1) The amendments to Article 16 (1) shall apply from the portion of contribution or investment fist made after this Act enters into force.(2) The amendments to Article 16 (3) shall apply from the portion of contribution or investment in the taxable year whereto belongs the date of promulgation of this Act.

(1) The amendments to Articles 23 (1), 38 (3) through (5) and 45-2 shall apply from the taxable year whereto belongs the date of promulgation of this Act.(2) The amendments to Article 34 shall apply from the portion of business conversion first made after this Act enters into force.

The amendments to Article 38-3 shall apply from the portion of investment in kind in the business year whereto belongs the date of promulgation of this Act.

(1) The amendments to Article 55 (1) shall apply from the portion of transferring the stocks or equity shares or of being paid the dividend income, first made after this Act enters into force.(2) The amendments to Article 55-2 (4) shall apply from the portion of lease income accruing in the business year commenced first after this Act enters into force. In this case, if the lease income first accrues before December 31, 2001, it shall apply only to the remaining abatement of exemption period.

The amendments to Articles 63 and 63-2 (1) shall apply to the portion of relocating a factory or main office, first made after this Act enters into force.

The amendments to Article 72-2 (2) shall apply from the portion of being paid in the business year whereto belongs the date of promulgation of this Act.

(1) The amendments to Article 73 (1) (excluding subparagraph 15) shall apply from the portion of disbursement first made after this Act enters into force.(2) The amendments to Articles 73 (1) 15 and 74 (1) 12 shall apply from the portion of disbursement or of inclusion in deductible expenses in the taxable year whereto belongs the date of promulgation of this Act.

The amendments to Article 86-2 (10) shall apply from the portion of payment in the taxable year whereto belongs the date of promulgation of this Act.

The amendments to Article 88-4 shall apply from the portion of contribution first made after this Act enters into force.

The amendments to Articles 88-5 (2) and 89 (1) shall apply from the portion of incomes accruing in the taxable year whereto belongs the date of promulgation of this Act.

(1) The amendments to Articles 117 (1) 4 through 6, 10 and 18 shall apply from the portion of transfer first made in the taxable year whereto belongs the date of promulgation of this Act.(2) The amendments to Article 117 (1) 14 and (2) 3 shall apply from the portion of a decision or revision first made after this Act enters into force.

(1) The amendments to Article 119 (1) 18 shall apply from the portion of the business year whereto belongs the date of promulgation of this Act.(2) The amendments to Articles 119 (1) 21, 22 and 120 (1) 17 and 18 shall apply from the portion of a registration or acquisition first made after this Act enters into force by the corporation first established after this Act enters into force.

(1) The amendments to Articles 121-2 (excluding the portion concerning the ratio of foreign investments in the former part of paragraph (2)) and 121-5 shall apply from the portion of foreign investments first reported after January 1, 2003.(2) The portion concerning the ratio of foreign investments from among the amendments to the former part of Article 121-2 (2) shall apply from the portion of investments first made after this Act enters into force.

The portion concerning business places from among the amendments to Article 130 (1) shall apply from the portion of commencing a business by newly installing a business place within the Seoul Metropolitan area or of installing by relocating the existing business place, first made after this Act enters into force.

The amendments to Article 144 (2) shall apply from the portion subjected to a deduction in the taxable year whereto belongs the date of promulgation of this Act.

(1) The amendments to Article 145 (5) shall apply from the portion of repayment of the borrowings first made after this Act enters into force.(2) The amendments to Article 146 shall apply from the portion of revision first made after this Act enters into force.

(1) With regard to the transfer subject to the carried-over taxation under previous Article 2 (1) 6 at the time of enforcement of this Act, the previous provisions shall govern, notwithstanding the amendments to Article 2 (1) 6.(2) With regard to the abatement or exemption, carried-over taxation, deferment of taxation and additional collection of transfer income tax and special surtax in the case of transfer of land, etc. under previous Articles 33, 35 through 38, 42, 43, 46-2, 48, 50, 51, 55-2 (3), 56, 60, 61, 63-2, 69 through 71, 77 through 81, 82 through 85, 97 and 97-2, the previous provisions shall govern.(3) The abatement or exemption of transfer income tax for a person who has acquired on and before December 31, 1999 the real estate subject to abatement or exemption of transfer income tax or special surtax under the provisions of previous Articles 36 (1), 37 (1) and 42 (1), shall be governed by the previous provisions, notwithstanding the amendments to Article 43.

With regard to a person subjected to previous Article 34 (1) at the time of enforcement of this Act, the previous provisions shall apply, notwithstanding the amendments to Article 34 (1).

With regard to an inclusion in gross income of the securities investment loss reserves which have been included in deductible expenses under previous Article 54 (1) and (2) at the time of enforcement of this Act, the previous provisions shall govern, notwithstanding the amendments to Article 54 (1) and (2).

(1) With regard to an exemption of transfer income tax on the transfer of farmland subjected to an incorporation into other living area, commercial area or industrial area under the provisions of the Urban Planning Act, or to a designation of scheduled land substitution as other land than farmland before the disposition of land substitution under the Urban Development Act and other Acts, the previous provisions shall govern, notwithstanding the amendments to the proviso of Article 69 (1).(2) With regard to the integrated limit of abatement or exemption of transfer income in case where a resident has been subjected to abatement or exemption of transfer income tax on the transfer income (including the transfer income under paragraph (1)) accruing from the transfer of self-cultivating farmland under the amendments to Article 69 from January 1, 2002 to December 31, 2003, the previous provisions shall govern, notwithstanding the amendments to Article 133 (2) and (3). In this case, the term “300 million won” in Article 133 (2) and (3) shall be read as “200 million won”.

With regard to a resident subjected to a construction permit for building an apartment-style factory at the time of enforcement of this Act, the previous provisions shall govern, notwithstanding the amendments to Article 78 (2) and (3).

With regard to the house purchase savings subscribed not later than December 31, 2001 under previous Article 89-2, the previous provisions shall govern not later than the maturity of relevant savings contract, and with regard to the relevant interest incomes, they shall not be included in the tax base for global incomes, notwithstanding Article 14 of theIncome Tax Act.

(1) With regard to a national carrying on the livestock industry under previous Article 101 (1) at the time of enforcement of this Act, the previous provisions shall govern, notwithstanding the amendments to Article 101.(2) Where a national carrying on the livestock industry is subjected to income deduction under paragraph (1), he shall not be subject to the special tax abatement or exemption for a small or medium enterprise under Article 7 and the tax credit for temporary investment under Article 26.

(1) With regard to an exemption of special consumption tax on those imported from foreign countries as the domestic production under previous subparagraphs 7, 8 and 13 of Article 109 is difficult, the previous provisions shall govern only on the portion of being carried out from the bonded area, or of being declared for importation, not later than December 31, 2003.(2) With regard to the additional collection of special consumption tax which has been subjected to, or is to be subjected to, an exemption under previous Article 109 at the time of enforcement of this Act, the provisions of previous Article 113 (1) and (3) shall govern.

ADDENDA <Act No. 6689, Apr. 20, 2002>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 121-13 shall enter into force on September 1, 2002.

The amended provisions of Article 104-5 shall apply from the portion of incomes paid first after the enforcement of this Act.

(1) The amended provisions of Articles 121-8 (1) and 121-9 (2) shall apply from the taxable year whereto belongs the enforcement date of this Act.(2) The amended provisions related to the acquisition tax and registration tax from among the amended provisions of Article 121-9 (3) shall apply from the portion of first acquisition after the enforcement of this Act, and the amended provisions related to the property tax shall apply to the portion of constituting the tax liability first after the enforcement of this Act. <Amended by Act No. 7332, Jan. 5, 2005>

(1) The amended provisions related to value-added tax from among the amended provisions of Article 121-13 shall apply from the portion of supplying the goods or receiving them or of filing an import declaration first after September 1, 2002.(2) The amended provisions related to the special consumption tax, liquor tax and tobacco consumption tax from among the amended provisions of Article 121-13 shall apply from the portion of goods carried out from a manufacturing place or of filing an import declaration first after September 1, 2002.

(1) The amended provisions of Article 121-14 (1) shall apply from the portion of admissions into a golf course first after the enforcement of this Act.(2) The amended provisions related to the acquisition tax from among the amended provisions of Article 121-14 (2) shall apply from the portion of acquisition first after the enforcement of this Act, and the amended provisions related to the property tax shall apply from the portion of constituting the tax liability first after the enforcement of this Act. <Amended by Act No. 7332, Jan. 5, 2005>

The amended provisions related to the acquisition tax and local education tax from among the amended provisions of Article 121-15 shall apply from the portion of acquisition after the enforcement of this Act, and the amended provisions related to the property tax and joint facility tax shall apply from the portion of constituting the tax liability first after the enforcement of this Act.

(1) The amended provisions related to the acquisition tax and registration tax from among the amended provisions of Article 121-16 (1) shall apply from the portion of acquisition after the enforcement of this Act,and the amended provisions related to the property tax, urban planning tax and joint facility tax shall apply from the portion of constituting the tax liability first after the enforcement of this Act. <Amended by Act No. 7332, Jan. 5, 2005>(2) The amended provisions of Article 121-16 (2) shall apply from the portion of registration first after the enforcement of this Act.

ADDENDA <Act No. 6705, Aug. 26, 2002>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 6708, Aug. 26, 2002>(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation: Provided, That the amendments to Article 105 shall enter into force on January 1, 2003.(2) (Application Example) The amendments to Article 105 shall apply from the portion first provided or being provided after January 1, 2003, and the amendments to Article 106 shall apply from the portion first provided after the enforcement date of this Act.ADDENDA <Act No. 6762, Dec. 11, 2002>

This Act shall enter into force on January 1, 2003: Provided, That the amendments to Articles 38-2 (3) 1 (proviso), 94 (4), 145 and 146 shall enter into force on the date of its promulgation, the amendment to Article 106-3 shall enter into force on July 1, 2003, and the amendment to Article 126-2 shall enter into force December 1, 2002.

(1) The amendments relating to the income tax and corporation tax in this Act shall apply starting with the taxable year that first starts after this Act enters into force.(2) The amendments relating to the transfer income tax in this Act shall apply starting with the portion first transferred after this Act enters into force.

The amendment to Article 6 shall apply starting with the portion first start-up or first confirmed as a venture business after this Act enters into force.

The amendment to Article 7-2 (1) shall apply starting with the portion first settled, used or utilized after this Act enters into force.

The amendment to Article 8 shall apply starting with the portion first donated or transferred after this Act enters into force.

The amendments to Articles 11, 24, and 25-2 shall apply starting with the portion first invested after this Act enters into force.

The amendment to Article 12 (2) shall apply starting with the portion first acquired after this Act enters into force.

The amendment to Article 14 (2) shall apply starting with the portion first acquiring the stocks or equity shares after this Act enters into force.

The amendment to Article 18-2 shall apply starting with the portion of incomes first accruing after this Act enters into force.

The amendment to Article 21 (2) shall apply starting with the portion of paying or receiving the incomes first accruing after this Act enters into force.

The amendment to Article 32 (1) shall apply starting with the portion first invested in kind or transferring business after this Act enters into force.

(1) The amendment to Article 38-2 (excluding the proviso of paragraph (3) 1) shall apply starting with the portion first invested in kind after this Act enters into force.(2) The amendment to the proviso of Article 38-2 (3) 1 shall apply starting with the portion of taxable year whereto belongs the date of promulgation of this Act.

The amendment to Article 44 shall apply starting with the portion first subjected to debt exemption after this Act enters into force.

The amendment to Article 61 shall apply starting with the portion first transferred in order to relocate the corporate headquarters outside the over concentration control region of the Seoul Metropolitan area after this Act enters into force.

(1) The amendment to Article 63 shall apply starting with the portion first commencing a business by moving the factory outside the over-concentration control region of the Seoul Metropolitan area after this Act enters into force.(2) The amendment to Article 63-2 shall apply starting with the portion first commencing a business by moving the factory outside the Seoul Metropolitan area after this Act enters into force.

The amendment to Article 86-2 shall apply starting with the portion first receiving an annuity payment or terminating it after this Act enters into force.

The amendment to Article 88-4 (7) shall apply starting with the portion first acquiring the treasury stocks after this Act enters into force, and the amendment to paragraph (9) of the same Article shall apply starting with the portion of incomes first accruing after this Act enters into force.

The amendment to Article 91-3 shall apply starting with the portion first transferred or receiving dividends after this Act enters into force.

The amendment to Article 104-6 shall apply starting with the portion of revenue distribution first received after this Act enters into force.

(1) The amended provisions relating to value-added taxes in the amendments to Articles 105 (2), 106-2 and 106-3 shall apply starting with the portion first supplying or receiving the goods or services, or first declaring the import of goods, after this Act enters into force.(2) The amended provisions relating to the special consumption tax and traffic tax in the amendment to Articles 106-2 shall apply starting with the portion first carrying out from the manufacturing place or bonded area or first declaring an import after this Act enters into force.

The amendment to Article 117 shall apply starting with the portion first transferred after this Act enters into force.

The amendments to Articles 119 and 120 shall apply starting with the portion first registered or acquired after this Act enters into force.

The amendment to Article 126-2 shall apply starting with the portion first using the credit cards, etc. after December 1, 2002.

The amendment to Article 130 shall apply starting with the portion first invested after this Act enters into force.

(1) The amendment to Article 145 shall apply starting with the portion of receiving the abatement or exemption, etc. in the taxable year to which the promulgation date of this Act belongs.(2) The amendment to Article 146 shall apply starting with the portion of causes for the additional collection first occurred after this Act enters into force.

With respect to a corporation which has transferred the site and buildings of its factory or head office by December 31, 2003 in order to move its factory outside a large city or its head office outside the Seoul Metropolitan area under the previous Articles 60 and 61 at the time of enforcement of this Act, the special cases of taxation of corporation tax may be applied under the previous provisions, notwithstanding the amended provisions of Articles 60 and 61.[This Article Wholly Amended by Act No. 7003, Dec. 30, 2003]

Where a small or medium enterprise concludes a contract for purchase of land and factory facilities located outside Seoul Metropolitan area, gets permission for building a new factory, or starts the substantial relocation of its factory facilities in the Seoul Metropolitan area outside such area not later than December 31, 2003 and has commenced its business activities not later than December 31, 2003 by moving all its factory facilities in the Seoul Metropolitan area outside such area under the previous Article 63 at the time of enforcement of this Act, the tax abatement or exemption may be applied under the previous provisions, notwithstanding the amended provisions of Article 63.[This Article Wholly Amended by Act No. 7322, Dec. 31, 2004]

The amount exceeding the limit of addition to deductible expenses which has not been added to deductible expenses under Article 73 (1) at the time of enforcement of this Act, the previous provisions shall govern, notwithstanding the amendments to Article 73 (3) and (4).

(1) In case where a newly-built house for which a down payment has been made after first concluding a sales contract with the housing developer, or a house newly constructed by himself for which the approval for use or inspection for use (including the approval for temporary use) has been given under the previous Article 99 (1) or 99-3 (1) prior to the enforcement of this Act, is transferred after the enforcement of this Act, the previous provisions shall apply to the abatement or exemption of the transfer income tax and the calculation of income amounts subject to imposition of transfer income tax, notwithstanding the amendments to Article 99 (1) or 99-3 (1). In this case, the standard for the deluxe house at the time of the date on which the down payment has been made after concluding a sales contract, or the approval for use or inspection for use has been received for the house newly constructed by himself.(2) In case where the approval for use or inspection for use (including the approval for temporary use) has been received prior to June 30, 2003 for the newly-built house under Article 99-3 (1) 2, after undertaking the works on the relevant newly-built house prior to the enforcement of this Act, the previous provisions shall apply, notwithstanding the amendment to Article 99-3 (1).

In applying the amendment to Article 106-3, with regard to a tax invoice delivered to a general taxable person for value-added tax after receiving the supply of gold metals prior to the enforcement date of this Act, it may be subject to a deduction as the input tax amount by applying Article 17 of the Value-Added Tax Act, notwithstanding the amendment to paragraph (3) of the same Article.

In case where the tax base and tax amount of income tax or value-added tax have been corrected or re-corrected after the enforcement of this Act for the businessmen who have filed a bona fide return under the previous Articles 123 and 125 at the time of enforcement of this Act, the previous provisions shall apply, notwithstanding the amendments to Articles 123 and 125.

With regard to the fixed business assets acquired by a national carrying on the business in other area than Seoul Metropolitan area as stipulated in the previous Article 130 at the time of enforcement of this Act in order to use them at the relevant business place after the enforcement of this Act, the previous provisions shall apply, notwithstanding the amendment to Article 130.

ADDENDA <Act No. 6852, Dec. 30, 2002>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 6867, May 10, 2003>(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.(2) (Application Example to Opening of Long-Term Stock Savings) The amendment to Article 87-4 shall also apply to the savings opened at the time of enforcement of this Act. In this case, the relevant savings shall be deemed to have been opened on the enforcement date of this Act.(3) (Application Example to Non-Taxation on Long-Term Stock Savings) The amendment to Article 87-4 shall apply from the portion of incomes accruing first after the enforcement date of this Act.ADDENDA <Act No. 6916, May 29, 2003>

This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)

ADDENDA <Act No. 7003, Dec. 30, 2003>

This Act shall enter into force on January 1, 2004: Provided, That the amended provisions of Articles 44 and 73 (3) shall enter into force on the date of its promulgation; the amended provisions of the main sentences of Articles 121-2 (2), (4) 1 and 2, and (5) 2 and 3, on January 1, 2005; and the amended provisions of Articles 126-2 (1) (limited to the portion related to cash receipts) and 126-3 (limited to the portion related to tax credit for the cases of cash receipt account settlement in paragraph (1)), on the date as set by Presidential Decree.

(1) The amendments relating to the income tax and corporation tax in this Act shall apply starting with the taxable year that first starts after this Act enters into force.(2) The amendments relating to the transfer income tax and securities transaction tax in this Act shall apply starting with the portion first transferred after this Act enters into force.(3) The amendments relating to the gift tax in this Act shall apply starting with the portion first donated after this Act enters into force.(4) The amendments relating to the value-added tax in this Act shall apply starting with the portion of goods or service first given or taken, or the portion of goods whose importation is first declared, after this Act enters into force.(5) The amendments relating to the special consumption tax and traffic tax in this Act shall apply starting with the portion which is first carried out of the manufacturing place or bonded area, or whose importation is first declared, after this Act enters into force.(6) The amendments relating to the stamp tax in this Act shall apply starting with the taxation documents first prepared after this Act enters into force.(7) The amendments relating to the customs duties in this Act shall apply starting with the portion whose importation is first declared after this Act enters into force.(8) The amendments relating to the acquisition tax and registration tax in this Act shall apply starting with the portion which is first acquired or registered after this Act enters into force.

The amendments to Articles 6 (1) and (2), 64 (1), and 68 (1) shall apply with respect to the small or medium started-up enterprises incorporated or confirmed as venture businesses, the enterprises located in agro-industrial complexes, or the corporations of agricultural business incorporated, after this Act enters into force.

The amendments to Article 7 (1) 2 shall apply starting with the taxable year which first ends after this Act enters into force.

The amendments to Article 10-2 shall apply with respect to the expenses for overseas training incurred after this Act enters into force.

The amendments to Article 15 (2) 4 shall apply with respect to the stock options exercised after this Act enters into force.

The amendments to Article 18-2 shall apply starting with the taxable year to which the enforcement date of this Act belongs.

The amendments to Article 24 (1) 1 and 2 shall apply with respect to the investments made after this Act enters into force.

(1) The amendments to the proviso of Article 26 (1) shall apply with respect to the investments made on or after July 1, 2003: Provided, That with respect to the portion of investment which has commenced on or after July 1, 2000 and has not been completed as of July 1, 2003, the amendments to the proviso of Article 26 (1) shall also apply to the portion of investment made on or after July 1, 2003.(2) In applying the amendments to the proviso of Article 26 (1), if the investment is not completed as of June 30, 2004, the portion of investment made by June 30, 2004 shall be deemed to be completed as of June 30, 2004.(3) In applying the amendments to Article 26 (1), if a tax base return is made in accordance with the Income Tax Act or the Corporation Tax Act by applying the tax credit rate prior to the enforcement of this Act, the request for rectification may be made pursuant to Article 45-2 of the Basic Act for National Taxes, or the carried-over deduction, pursuant to Article 144 of this Act.

The amendments to Article 29 shall apply with respect to the bonds issued after this Act enters into force.

The amendments to Article 30 shall apply with respect to the fixed assets acquired, or in which an investment is commenced, on or after July 1, 2003, on which a tax base return (excluding the return after term provided in Article 45-3 of the Basic Act for National Taxes) is filed on or after the enforcement date of this Act: Provided, That with respect to a corporation for which the time limit of a tax base return under Article 60 of the Corporation Tax Act has already expired before the enforcement of this Act, such amendments shall apply, according to an application for special cases of the inclusion of depreciation cost in deductible expenses under the amendments to Article 30 (2), starting with the taxable year following the taxable year to which the date of acquisition or the date of commencement of investment concerned belongs.

The amendments to Article 44 shall apply starting with the portion of debt exemption first made in the taxable year to which the promulgation date of this Act belongs.

The amendments to Article 46-2 shall apply with respect to the stock exchange, etc. effected after this Act enters into force.

The amendments to Article 47-3 shall apply with respect to the tax base returns (excluding the return after term provided in Article 45-3 of the Basic Act for National Taxes) made after this Act enters into force.

The amendments to Articles 63 and 63-2 shall apply with respect to the moving of factories and head offices outside the overconcentration control zone of the Seoul Metropolitan area or outside the Seoul Metropolitan area which is effected after this Act enters into force.

(1) The amendments to Article 73 (1) 2 shall apply with respect to the contributions made after this Act enters into force: Provided, That with respect to the Seoul National University Dental Hospital under the Establishment of Seoul National University Dental Hospital Act, such amendments shall apply starting with the portion of contributions first made after the said Act enters into force.(2) The amendments to Article 73 (3) shall apply starting with the taxable year to which the promulgation date of this Act belongs.

The amendments to Article 74 (1) 1 and 3 shall apply with respect to the incomes accrued after this Act enters into force: Provided, That with respect to the Seoul National University Dental Hospital under the Establishment of Seoul National University Dental Hospital Act, such amendments shall apply starting with the portion of income first accrued after the said Act enters into force.

The amendments to Article 87-5 shall apply with respect to the incomes accrued and paid on or after January 1, 2004.

(1) The amendments to Article 88-4 (1) shall apply with respect to the contributions made after this Act enters into force.(2) The amendments to Article 88-4 (5) shall apply with respect to the stocks withdrawn after this Act enters into force.(3) The amendments to Article 88-4 (12) shall apply with respect to the contributions made after this Act enters into force.

The amendments to Article 91 shall apply with respect to the dividend incomes paid after this Act enters into force.

The amendments to Article 92 shall apply with respect to the incomes accrued and paid on or after January 1, 2004.

The amendments to Article 94 shall apply with respect to the facility investments made after this Act enters into force.

The amendments to Article 99-4 shall apply with respect to the general housing transferred on or after August 1, 2003.

The amendments to Article 104-6 (1) shall apply with respect to the paid dividends received after this Act enters into force.

The amendments to Article 104-7 shall apply starting with the taxable year to which the enforcement date of this Act belongs: Provided, That the amendments to Article 104-7 (1) through (3) and (5) shall applystarting with the taxable year to which the promulgation date of this Act belongs.

The amendments to Article 104-8 shall apply with respect to the electronic tax returns filed after this Act enters into force.

The amendments to Articles 121-2 and 121-3 shall apply with respect to the applications for reduction of or exemption from corporation tax, etc. made after this Act enters into force.

(1) Where a foreign-invested enterprise that is located in a free economic zone as referred to in subparagraph 1 of Article 2 of the Act on Designation and Management of Free Economic Zones prior to the enforcement of this Act intends to be eligible for the reduction of or exemption from taxes under the amendments to the proviso of Article 121-2 (2), it shall file an application therefor not later than December 31, 2004, notwithstanding the main sentence of Article 121-2 (6).(2) Where a foreign-invested enterprise which intends to be put under application of the amendments to Article 121-3 (2) makes an application for the reduction of or exemption from customs duties, which are already paid prior to the enforcement of this Act, during the period from the enforcement date of this Act to December 31, 2004, the corresponding amount shall be refunded.

The amendments to Article 122 (2) 2 shall apply starting with the taxable year to which the enforcement date of this Act belongs.

The amendments to Article 126-2 (1) and (3) shall apply with respect to the amounts drawn on credit cards, etc. on or after December 1, 2003: Provided, That with respect to the income deduction for the amounts stated in the cash receipts, such amendments shall apply with respect to the cash receipts issued on or after the enforcement date of the amendments to Article 126-2 (1).

(1) The amendments to Article 126-3 concerning tax credits on the installation of cash receipt issuance machines shall apply with respect to the issuance machines installed on or after January 1, 2004.(2) The amendments to Article 126-3 concerning tax credits for the cases of cash receipt account settlement shall apply with respect to the cash receipts issued on or after the enforcement date of the amendments.

The amendments to Article 130 shall apply with respect to the investments made after this Act enters into force.

The amendments to Article 132 (1) 1 and (2) 1 shall apply with respect to the tax base returns (excluding the return after term provided in Article 45-3 of the Basic Act for National Taxes) which are filed on or after the enforcement date of this Act.

The amendments to Article 140 (1) and (4) shall apply with respect to the submarine mineral resources development on which tax liability is established on or after the enforcement date of this Act.

The amendments made according to the enforcement of the Act on the Business of Operating Indirect Investment Assets concerning investment trust, investment companies, etc. shall apply with respect to the investment trust, investment companies, etc. established or incorporated on or after the enforcement date of the said Act, and the investment trust, investment companies, etc. established or incorporated before the enforcement date of the said Act shall be governed by the previous provisions.

With respect to the persons whose tax amount is reduced or exempted under the previous Articles 6 (1) and (2), 64 (1), and 68 (1) at the time of entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions.

With respect to income derived from the transfer, lending, or provision of secret technical processes or formulae under the previous Article 12 (1) 2 at the time of entry into force of this Act, the previous provisions shall apply until the contract period of such lending or provision ends, notwithstanding the amended provisions.

(1) With respect to the small or medium enterprises whose tax amount is reduced or exempted under the previous Article 63 at the time of entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions.(2) With respect to the corporations whose tax amount is reduced or exempted under the previous Article 63-2 at the time of entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions.(3) Where, at the time of the entry into force of this Act, a corporation starts the substantial relocation of itself outside the Seoul Metropolitan area in such a manner as commencing its business by relocating its factory and head office located in the over-concentration control zone of the Seoul Metropolitan area outside such area, transferring, removing, or closing its factory and head office located in the over-concentration control zone of the Seoul Metropolitan area, concluding a contract for transfer of its factory and head office located in the over-concentration control zone of the Seoul Metropolitan area, or entering into a contract for purchase of its factory and head office or getting permission for the building of a new factory located outside the Seoul Metropolitan area, in order to put itself under the application of the previous Article 63-2, the previous provisions shall apply, notwithstanding the amended provisions.

With respect to the persons whose acquisition tax, registration tax, and property tax are reduced or exempted under the previous Article 100 (2) and (4) at the time of entry into force of this Act, the additional collection of such taxes shall be governed by the previous provisions. <Amended by Act No. 7332, Jan. 5, 2005>

With respect to the foreigner’s investment for which the corporation tax, etc. is reduced or exempted under the previous Article 121-2 at the time of entry into force of this Act, the previous provisions shall apply in regard of the period of such reduction or exemption, notwithstanding the amended provisions of the main sentences of Article 121-2 (2), (4) 1 and 2, and (5) 2 and 3.

Carried-over losses incurred in any business year that starts within 10 years prior to the starting date of each business year under the previous Article 140 (4) at the time of entry into force of this Act shall be governed by the previous provisions, notwithstanding the amended provisions.Article 42 (Transitional Measures for Carried-over Deduction of Tax Credit)The tax amount subject to deduction under the previous Article 144 (1) at the time of entry into force of this Act shall be governed by the previous provisions, notwithstanding the amended provisions of Article 144 (1).

ADDENDA <Act No. 7030, Dec. 31, 2003>

This Act shall enter into force on March 1, 2004. <Proviso Omitted.>

ADDENDA <Act No. 7066, Jan. 20, 2004>(1) (Enforcement Date) This Act shall enter into force on March 1, 2004.(2) (Application Example) The amendments to Articles 119 (1) and 120 (1) shall apply with respect to the portion of acquisition and registration made on or after the enforcement date of this Act.ADDENDA <Act No. 7191, Mar. 12, 2004>

This Act shall enter into force on the date of its promulgation.

ADDENDA <Act No. 7210, Mar. 22, 2004>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 7216, Jul. 26, 2004>

This Act shall enter into force on the date of its promulgation.

(1) The amended provisions concerning the income tax and the corporation tax in this Act shall apply, starting with the portion of the taxable year that first commences after the enforcement of this Act.(2) The amended provisions concerning the value-added tax in this Act shall apply, starting with the portion of goods or services that is first supplied and rendered, or the portion of goods or services on which an import declaration is first filed after the enforcement of this Act.

(1) The amended provisions of the proviso of Article 26 (1) of the Act shall apply, starting with the portion of investment that is made after July 1, 2004: Provided, That with respect to any investment that is in progress as of July 1, 2004 and such investment starts to be made after July 1, 2000, the amended provisions of the proviso of the same paragraph shall apply to the portion of investment that is made after July 1, 2004.(2) In the application of the amended provisons of the proviso of Article 26 (1), if any investment is not completed as of December 31, 2004, the portion of such investment that is made by December 31, 2004 shall be deemed to be completely made as of December 31, 2004.

The amended provisions of Article 30-3 shall apply, starting with the amount of loss that is incurred in the taxable year belonging to the date of the enforcement of this Act.

The amended provisions of Article 30-4 shall apply, starting with the portion of the taxable year belonging to the date of the enforcement of this Act.

The amended provisions of Article 88-2 (1) shall apply, starting with the portion of livelihood savings that are first subscribed after the date of the enforcement of this Act.

The amended provisions of Article 88-4 (13) shall apply, starting with the portion that is first transferred after the enforcement of this Act.

The amended provisions of Article 106 (1) 4-2 and 4-3 shall apply, starting with the portion of the taxable period during which the tax base is returned after July 1, 2004.

The amended provisions of Articles 119 (3) 1 and 2 and 120 (3) shall apply, starting with the portion that is registered or acquired after July 1, 2004 and the amended provisions of Articles 119 (6) 3, 119 (7) and 120 (4) 3 shall apply, starting with the portion that is registered or acquired after the enforcement of this Act.

The amended provisions of Article 121 shall apply, starting with the portion that is acquired after July 1, 2004.

The amended provisions of Article 132 (2), with the exception of each subparagraph thereof, shall apply, starting with the portion on which a final return on the tax base is filed after the enforcement of this Act.

The amended provisions of Article 88-2 (1) shall apply to the portion of livelihood savings that are subscribed pursuant to the previous provisions of Article 88-2 (1), beginning on the date of the enforcement of this Act.

ADDENDA <Act No. 7220, Oct. 5, 2004>(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.(2) (Application Example concerning Reduction or Exemption of Tax Amount for Small or Medium Start-up Enterprises, etc.) The amended provisions of Article 6 shall begin to apply to a start-up business on and after July 1, 2004.(3) (Application Example concerning Special Case of Taxation for Contribution) The amended provisions of Article 73 shall begin to apply to the portion disbursed in the taxable year whereto belongs the date of enforcement of this Act.(4) (Application Example concerning Inclusion of Cultural Business Reserve in Deductible Expenses) The amended provisions of Article 104-9 shall begin to apply to the portion to be included in deductible expenses in the taxable year whereto belongs the date of enforcement of this Act.ADDENDA <Act No. 7240, Oct. 22, 2004>

This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)

ADDENDA <Act No. 7281, Dec. 31, 2004>

This Act shall enter into force on January 1, 2005. <Proviso Omitted.>

ADDENDA <Act No. 7284, Dec. 31, 2004>

This Act shall enter into force six months after the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 7311, Dec. 31, 2004>

This Act shall enter into force six months after the date of its promulgation: Provided That the amended provisions of Article 13 of the Addenda shall enter into force on the date of its promulgation.

ADDENDA <Act No. 7322, Dec. 31, 2004>

This Act shall enter into force on January 1, 2005: Provided, That the amended provisions falling under each of the following subparagraphs shall enter into force on the date that is set in the relevant subparagraph:1. The amended provisions of Articles 63-2, 72, 92, 105 (1) 3 (d) and 106 (1) 7 shall enter into force on the date of its promulgation;2. The amended provisions of Article 106-3 shall enter into force on April 1, 2005;3. The amended provisions of Articles 55-2, 119 (6) and (7) and 120 (4) 1 (limited to the portion of the real estate investment company) shall enter into force on April 23, 2005; and4. The amended provisions of Articles 121-2 (limited to the portion of the enterprise city development zone and the enterprise city development project undertaker), 121-17, 121-18 and 121-19 shall enter into force on the date on which the Special Act on the Development of Enterprise Cities enters into force.[Enforcement Date of the Special Act on the Development of Enterprise Cities (Act No. 7310); May 1, 2005]

The amended provisions of Article 5-3 shall apply, starting with the portion of the small and medium enterprise management consulting coupons that are first purchased and furnished after the enforcement of this Act.

The amended provisions of Article 6 shall apply, starting with any small or medium enterprise that is first incorporated after the enforcement of this Act.

The amended provisions of Article 7-2 shall apply, starting with the portion of the bill that is first settled, used or utilized after the enforcement of this Act.

The amended provisions of Article 17 shall apply, starting with the portion of causes for inclusion in the gross income that first occurs after the enforcement of this Act.

The amended provisions of Article 24 shall apply, starting with the portion of cost that is first incurred after the enforcement of this Act.

The amended provisions of Article 25 shall apply, starting with the portion of investment that is first made after the enforcement of this Act.

The amended provisions of Article 25-2 shall apply, starting with the portion of investment that is frist made after the enforcement of this Act.

The amended provisions of Article 63-2 shall apply, starting with the portion of any head office that is first relocated from the over-concentration control zone of Seoul Metropolitan area to any area other than the Seoul Metropolitan area during the taxable year whereto belongs the date on which this Act is promulgated.

The amended provisions of Article 72 shall apply, starting with the taxable year whereto belongs the date on which this Act is promulgated.

The amended provisions of Article 76 shall apply, starting with the portion of any political fund that is first contributed after the enforcement of this Act.

The amended provisions of Article 85 shall apply, starting with the portion for which the deadline for a final tax return of the tax base on the transfer income first arrives after the enforcement of this Act.

The amended provisions of Article 88-2 (1) shall apply, starting with the livelihood savings that are first subscribed after the enforcement of this Act.

The amended provisions of Article 88-4 (8) through (10) shall apply, starting with the portion of the dividend income that is first paid after the enforcement of this Act.

The amended provisions of Article 89 shall apply, starting with the portion of income that first accrues after the enforcement of this Act.

The amended provisions of Article 90-2 shall apply, starting with the portion of savings that are first subscribed after the enforcement of this Act.

The amended provisions of Article 92 shall apply, starting with the portion of lottery prize won in the taxable year whereto belongs the date on which this Act is promulgated.

The amended provisions of Article 104 shall apply, starting with the portion of cost that is first incurred after the enforcement of this Act.

The amended provisions of Article 104-5 shall apply, starting with the portion that is first furnished after the enforcement of this Act.

The amended provisions of Article 104-8 (2) shall apply, starting with the portion of any electronic return that is first made after the enforcement of this Act.

The amended provisions of Article 104-11 (2) shall apply, starting with the portion of any dividend that is paid by the personnel company applicable to the special case of taxation after the enforcement of this Act.

The amended provisions of Article 105 (1) 3 (d) shall apply, starting with the portion of construction services that are rendered directly to the Korea Rail Network Authority after a contract is concluded prior to the enforcement of this Act.

The amended provisions of Article 105 (1) 3 (e) shall apply, starting with the portion of the value-added tax that is determined, corrected or re-corrected for any project undertaker who enters into an implementation agreement with the competent administrative agency in accordance with the Act on Private Participation in Infrastructure prior to the enforcement of this Act.

The amended provisions of Article 106 (1) 7 shall apply, starting with the portion of railroad facilities that revert to the State during the taxable year whereto belongs the date on which this Act is promulgated.

The amended provisions of Article 106-4 shall apply, starting with the portion of the taxation period during which the return of the tax base is filed after the enforcement of this Act.

The amended provisions of Articles 119 (6) and (7) and 120 (4) 1 (limited to the portion related to the real estate investment company) shall apply, starting with the portion that is registered or acquired after April 23, 2005.

(1) The amended provisions of Articles 121-2 (excluding the portion concerning any enterprise city development zone and any enterprise city development project undertaker) and 121-3 shall apply, starting with the portion of foreigner’s investment that is first reported after the enforcement of this Act: Provided, That with respect to any foreign-invested enterprise that is already located in any foreign investment zone provided for in Article 18 (1) 1 of the Foreign Investment Promotion Act, the amended provisions shall apply, starting with the portion of any foreign investment that is reported in order to increase its capital after the enforcement of this Act.(2) The amended provisions of Article 121-2 (limited to the portion concerning any enterprise city development zone and any enterprise city development project undertaker) shall apply, starting with the portion of any foreigner’s investment that is reported after the enforcement of the Special Act on the Development of Enterprise Cities that is enacted in accordance with Act No. 7310.

The amended provisions of Article 121-5 shall apply, starting with the portion of any foreigner’s investment that is first reported after the enforcement of this Act.

The amended provisions of Article 126-2 shall apply, starting with the portion of any amount that is spent by making use of any credit card, etc. after December 1, 2004: Provided, That with respect to the portion of any amount that is spent by making use of cash receipt, the amended provisions shall apply, starting with the portion of any amount that is spent after January 1, 2005.

The amended provisions of Article 128 (3) shall apply, starting with the portion of an amended tax return that is made after the enforcement of this Act.

The amended provisions of Article 130 shall apply, starting with the portion that is first invested after the enforcement of this Act.

The amended provisions of Article 146 shall apply, starting with the portion of a disposition taken to additionally collect the reduced and exempted tax amount after the enforcement of this Act.

(1) The amended provisions governing the income tax and the corporation tax in this Act shall apply, starting with the portion of the taxable year that first begins after the enforcement of this Act.(2) The amended provisions governing the value-added tax in this Act shall apply, starting with the portion of goods or services that anyone first supplies or are first supplied or goods on which an import declaration is first filed after the enforcement of this Act.(3) The amended provisions governing the stamp tax in this Act shall apply, starting with the portion of a taxation document that is first prepared after the enforcement of this Act.(4) The amended provisions governing the transfer income tax and the securities transaction tax in this Act shall apply, starting with the portion that is first transferred after the enforcement of this Act.(5) The amended provisions governing the inheritance tax and the gift tax shall apply, starting with the portion that is first inherited or gifted after the enforcement of this Act.(6) The amended provisions governing the registration tax, the acquisition tax, the property tax and the aggregate land tax in this Act shall apply, starting with the portion that is first registered or acquired after the enforcement of this Act.(7) The amended provisions governing the special consumption tax and the traffic tax in this Act shall apply, starting with the portion of taxable goods that are first shipped out of factory, an import declaration is filed on them or the act of accessing such taxable goods is performed after the enforcement of this Act.

(1) The previous provisions of Article 63-2 shall apply to any corporation that relocates its head office from the over-concentration control zone of Seoul Metropolitan area to any other area in order to make it subject to the application of the previous provisions of Article 63-2 prior to the taxable year whereto belongs the date on which this Act is promulgated, notwithstanding the amended provisions of Article 63-2.(2) In case where any corporation transfers, removes or shuts down its head office located in the over-concentration control zone of Seoul Metropolitan area or shifts the purpose of its head office to other purpose or concludes a contract for transferring its head office located in the over-concentration control zone of Seoul Metropolitan area or for purchasing its head office in an area other than the Seoul Metropolitan area prior to the taxable year whereto belongs the date on which this Act is promulgated in order to make it subject to the application of the previous provisions of Article 63-2 and such corporation fails to relocate its head office prior to the taxable year whereto belongs the date on which this Act is promulgated, the previous provisions may apply to such corporation, notwithstanding the amended provisions of Article 63-2.(3) In cases where any corporation relocates, transfers, removes or shuts down its head office located in the over-concentration control zone of Seoul Metropolitan area or shifts the purpose of its head office to other purpose or concludes a contract for transferring its head office located in the over-concentration control zone of Seoul Metropolitan area or for purchasing its head office in an area other than the Seoul Metropolitan area or actually starts relocating its head office to a rural area in the taxable year whereto belongs the date on which this Act is promulgated in order to make it subject to the application of the previous provisions of Article 63-2, the previous provisions may apply to such corporation, notwithstanding the amended provisions of Article 63-2.(4) In cases where any corporation is subject to the application of the tax reduction or exemption provided for in the previous provisions or the amended provisions in accordance with paragraph (2) or (3), either of the chosen provisions shall continue applying to the relevant corporation during the tax reduction or exemption period.

ADDENDA <Act No. 7332, Jan. 5, 2005>

This Act shall enter into force on the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 7428, Mar. 31, 2005>

This Act shall enter into force one year after the date of its promulgation.

ADDENDA <Act No. 7577, Jul. 13, 2005>

This Act shall enter into force on the date of its promulgation.

The amended provisions of Article 7 (1) 1 (zc) shall apply, starting with the incomes accruing in the taxable year whereto the enforcement date of this Act belongs.

The amended provisions of Article 8-2 shall apply, starting with the small or medium enterprise listed in the taxable year whereto the enforcement date of this Act belongs.

(1) The amended provisions of Articles 13 (1) and (2) and 14 (1) and (2) shall apply, starting with the stocks or equities transferred first after the enforcement of this Act.(2) The amended provisions of Article 14 (4) and (5) shall apply, starting with the dividends income or interests income paid first after the enforcement of this Act.

The amended provisions of Articles 16 (1) 1 shall apply, starting with the portion of the contribution or investment made first after the enforcement of this Act.

(1) The amended provisions of Article 91-2 (1) 4 shall apply, starting with the investment company established first after the enforcement of this Act.(2) With regards to the investment company established before the enforcement of this Act, the amended provisions of Articles 91-2 (1) 4 shall apply, starting with the dividend incomes accrued after the settlement day coming first after the enforcement of this Act.

The amended provisions of Article 91-4 shall apply, starting with the dividend incomes accrued first after the enforcement of this Act.

The amended provisions of Article 105 (1) 3-2 shall apply, starting with the social fundamental facilities provided to the State or local governments by the mode under subparagraph 2 of Article 4 of the Act on Private Participation in Infrastructure or the construction services of the same facilities first after the enforcement of this Act.

The amended provisions of Article 106-3 (1) and (2) shall apply, starting with the portions of provisions or receiving such provisions during the taxation period whereto belongs the enforcement date of this Act, or of the import declaration.

The amended provisions of Article 108 (1) shall apply, starting with the portions acquired in the taxation period whereto belongs the enforcement date of this Act.

The previous provisions shall govern the inclusion in the pecuniary loss or profits in calculating the revenue amount of the small or medium enterprise subjected to the provisions of previous Article 8-2 before the enforcement of this Act.

The previous provisions shall govern the investment company established prior to the enforcement of this Act and provided its existence period on the articles of association (excluding the case of extending its existence period) under Article 37 (2) of the Act on Business of Operating Indirect Investment and Assets, and which do not issue the additional stocks, notwithstanding the amended provisions of Article 91-2 (1) 4.

ADDENDA <Act No. 7601, Jul. 13, 2005>

This Act shall enter into force on January 1, 2006. <Proviso Omitted.>

ADDENDA <Act No. 7678, Aug. 4, 2005>

This Act shall enter into force one year after the date of its promulgation.

ADDENDA <Act No. 7775, Dec. 29, 2005>

This Act shall enter into force 4 months after the date of its promulgation: Provided, That …<Omitted.>… the amended provisions of Article 4 of this Addenda shall enter into force on the date of its promulgation.

ADDENDA <Act No. 7839, Dec. 31, 2005>

This Act shall enter into force on January 1, 2006: Provided, That the amended provisions of Articles 15 (3), 118 (1) 1 and 3 and 127 (8) shall enter into force, beginning on the date of its promulgation.

(1) The amended provisions concerning the income tax and the corporation tax in this Act shall apply, starting with the portion of the taxable year that first commences after the enforcement of this Act.(2) The amended provisions concerning the value-added tax in this Act shall apply, starting with the portion of goods and service that are first supplied or purchased or the portion of goods on which an import declaration is filed after the enforcement of this Act.(3) The amended provisions concerning the transfer income tax and the securities transaction tax in this Act shall apply, starting with the portion that is first transferred after the enforcement of this Act.(4) The amended provisions concerning the inheritance tax and the gift tax shall apply, starting with the portion that is first inherited or donated after the enforcement of this Act.

The amended provisions of Article 7 shall apply, starting with the portion of the taxable year that comes to an end after the enforcement of this Act.

The amended provisions of Article 7-2 (1) shall apply, starting with the portion that is first settled, used or utilized after the enforcement of this Act.

The amended provisions of Article 13 (1) through (3) shall apply, starting with the portion of stocks or equities that are first transferred or the dividend income that is first paid after the enforcement of this Act.

The amended provisions of Article 15 (3) shall apply, starting with the portion of the taxable year to which the date on which this Act enters into force belongs.

(1) The amended provisions of Article 23 (1) shall apply, starting with the portion that is first transferred after the enforcement of this Act.(2) The amended provisions of the latter part of Article 23 (3) shall apply, starting with the portion that is first included in the gross income after the enforcement of this Act.

The amended provisions of Article 25-2 shall apply, starting with the portion of an investment which is first made after the enforcement of this Act.

The amended provisions of Article 33 shall apply, starting with the portion of the fixed assets for the business used before the conversion which is first transferred after the enforcement of this Act.

(1) The amended provisions of Article 34 (1) and (4) shall apply, starting with the portion that a small or medium enterprise is first exempted from obligations or which a financial institution first exempts obligations after the enforcement of this Act.(2) The amended provisions of Article 34 (2) shall apply, starting with the portion of the real estate for business that is first transferred after the enforcement of this Act.

The amended provisions of Article 38-2 shall apply, starting with the portion of the holding company that is first incorporated by means of all-inclusive transfer of stocks after the enforcement of this Act.

(1) The amended provisions of Article 41 (1) shall apply, starting with the portion of assets that is gratuitously granted for the first time after the enforcement of this Act.(2) The amended provisions of Article 41 (2) shall apply, stating with the portion of the real estate that is transferred for the first time after the enforcement of this Act.

The amended provisions of Article 47-4 shall apply, starting with the portion that is first merged (including merger after division) after the enforcement of this Act.

The amended provisions of Article 60 (2) shall apply, starting with the portion of the factory that is first relocated after the enforcement of this Act.

The amended provisions of Article 61 (3) shall apply, starting with the portion of the corporation’s head office that is first relocated after the enforcement of this Act.

The amended provisions of Article 63 (1) shall apply, starting with the portion that is first relocated after the enforcement of this Act.

The amended provisions of Article 63-2 shall apply, starting with the portion of the factory or the head office of any corporation, which is first relocated after the enforcement of this Act.

(1) The amended provisions of Article 73 shall apply, starting with the portion that is disbursed in the taxable year that first commences after the enforcement of this Act.(2) In the application of the amended provisions of the former part of Article 73 (1) with the exception of each subparagraph, with respect to the portion that is disbursed on or before December 31, 2006, notwithstanding the amended provisions of the partial former part of Article 73 (1) with the exception of each subparagraph, “50/100” provided for in the partial former part of the same paragraph with the exception of each subparagraph shall be deemed “75/100”.

The amended provisions of Article 84 shall apply, starting with the portion of in-kind investment that is first made after the enforcement of this Act.

The amended provisions of Article 86-2 shall apply, starting with the portion that is first deposited after the enforcement of this Act.

The amended provisions of Article 88-4 (5) shall apply, starting with the portion that is first withdrawn after the enforcement of this Act.

The amended provisions of Article 89 shall apply, starting with the portion that is first subscribed after the enforcement of this Act.

The amended provisions of Article 90-2 (1) shall apply, starting with the portion that is first submitted after the enforcement of this Act.

The amended provisions of Article 91-5 shall apply, starting with the portion of the income that first accrues after the enforcement of this Act.

The amended provisions of Article 104-5 shall apply, starting with the portion of the information return, etc. that are first filed after the enforcement of this Act.

The amended provisions of Article 104-8 shall apply, starting with the portion of the electronic return that is first filed after the enforcement of this Act.

The amended provisions of Article 104-10 (6) shall apply, starting with the portion that first fails to meet the requirements provided for in the provisions of paragraph (1) of the same Article for not less than 2 business years after the enforcement of this Act.

The amended provisions of Article 106 (1) 8 shall also apply to the portion of the implementation agreement (excluding any school facilities that are already in operation after the completion of their construction) which is concluded prior to the enforcement of this Act.

(1) The amended provisions of Article 108-2 shall apply, starting with the portion that is first returned and paid after the enforcement of this Act.(2) In case where it is intended to have the input tax amount deducted pursuant to the amended provisions of Article 108-2, the details of the operational assets and the input tax amount by year shall be returned to the head of tax office having jurisdiction over the business place or the main business place on or before January 25, 2006.

The amended provisions of Article 121-2 (13) shall apply, starting with the portion that is first subject to the decision on the tax reduction or exemption after the enforcement of this Act.

The amended provisions of Article 121-4 (4) shall apply, starting with the portion of capital that is first increased after the enforcement of this Act.

The amended provisions of Article 121-5 shall apply, starting with the portion for which grounds for making the additional collection first occur after the enforcement of this Act.

The amended provisions of Article 121-13 (4) and (5) shall apply, starting with the portion of tax-free goods that are first sold and purchased after the enforcement of this Act.

The amended provisions of Article 126-2 (1) shall apply, starting with the portion of the calculation of the total amount that is spent in use of credit cards, etc. in the year whereto belongs the date on which this Act enters into force.

The amended provisions of Article 127 (8) shall apply, starting with the portion of the taxable year whereto belongs the date on which this Act enters into force.

(1) The composite limited amount of the reduction or exemption of the transfer income tax on the substitute land for the farmland from among the amended provisions of Article 133 shall apply, starting with the portion that is converted into the substitute land by means of transfer after the enforcement of this Act.(2) In the application of the amended provisions of the latter part of Article 133 (2), the tax amount that is reduced or exempted pursuant to the provisions of Article 69 prior to the enforcement of this Act shall not be added up.

The amended provisions of Article 146 shall apply, starting with the portion of the relevant assets that are first disposed of after the enforcement of this Act.

In case where any national who has had his income tax and corporation tax deducted pursuant to the previous provisions of Article 30-4 (2) suspends the employment maintaining system or reverts to the previous system, the previous provisions of Article 30-4 (3) shall apply to the payment of his income tax or corporation tax, notwithstanding the amended provisions of Article 30-4.

The appropriation of the gains from debt exemption by converting them into investment that are not included in the gross income for the amount of deficit pursuant to the previous provisions of the former part of Article 44 (2) and the inclusion of such gains in the gross income at the time of the enforcement of this Act shall be governed by the previous provisions of the latter part of Article 44 (2) and (4).

(1) In case where the head office located in the over-concentration control zone of the Seoul Metropolitan area is transferred, removed, closed or converted into other use than the use of the head office or a contract on the transfer of the head office located in the over-concentration control zone of the Seoul Metropolitan area is concluded or a contract on the purchase of an area other than the Seoul Metropolitan area, in which the head office is to be located in order to make the head office subject to the application of the previous provisions of Article 63-2 prior to the enforcement of this Act and the head office is not relocated prior to the taxable year whereto belongs the date on which this Act enters into force, the previous provisions may be applied thereto, notwithstanding the amended provisions of Article 63-2.(2) In case where the reduction or exemption provided for in the previous provisions or the amended provisions are applied pursuant to the provisions of paragraph (1), one of them shall be chosen and the chosen provision shall be applied thereto without interruption during the reduction or exemption period.

The transfer of any farmland that has been tilled by any agricultural corporation for not less than 5 years after having acquired it pursuant to the previous provisions of Article 69 (1) prior to the enforcement of this Act shall be governed by the previous provisions of Article 69-2, notwithstanding the amended provisions of Article 69 (1).

The inclusion of donations that are included in deductible expenses pursuant to the previous provisions of Article 73 (1) prior to the enforcement of this Act shall be governed by the previous provisions, notwithstanding the amended provisions of Article 73 (4).

The transfer of stocks that are first acquired after making investments in any ship investment company pursuant to the previous provisions of Article 87-5 (1) prior to the enforcement of this Act shall be governed by the previous provisions, notwithstanding the amended provisions of Article 87-5 (1).

The tax-favored comprehensive savings to which subscriptions are made pursuant to the previous provisions of Article 89 (1) prior to the enforcement of this Act shall be governed by the previous provisions, notwithstanding the amended provisions of Article 89 (1).

The inclusion of the reserve in the gross income, which is included in the deductible expenses pursuant to the previous provisions of Article 104-3 at the time of the enforcement of this Act, shall be governed by the previous provisions.

In case where any business operator who converts his business into the business eligible for the exemption from the value-added tax and adds the tax-free business pursuant to the amended provisions of Article 106 (1) 8 uses goods that he has acquired prior to the enforcement of this Act directly for the relevant business that is exempted from the value-added tax, the provisions of Articles 6 (2) and 17 (5) of the Value-Added Tax Act shall not apply thereto.

The time limit for filing the application for the tax reduction or exemption on the capital that is increased prior to the enforcement of this Act shall be governed by the previous provisions, notwithstanding the amended provisions of Article 121-2 (6).

ADDENDA <Act No. 7845, Jan. 2, 2006>

This Act shall enter into force on the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 7849, Feb. 21, 2006>

This Act shall enter into force on July 1, 2006. <Proviso Omitted.>

ADDENDA <Act No. 7949, Apr. 28, 2006>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 8050, Oct. 4, 2006>

This Act shall enter into force on January 1, 2007. <Proviso Omitted.>

ADDENDA <Act No. 8086, Dec. 26, 2006>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 8138, Dec. 30, 2006>

This Act shall enter into force on January 1, 2007. <Proviso Omitted.>

ADDENDA <Act No. 8146, Dec. 30, 2006>

This Act shall enter into force on January 1, 2007: Provided, That the amended provisions of Articles 126-4, 126-5 and 128 (4) 2 and 3 shall take effect on July 1, 2007, and the amended provisions of Articles 100-2 through 100-13 and 128 (4) 1, on January 1, 2008.

(1) The amended provisions of this Act concerning the income tax and corporation tax shall apply starting with the taxable year that first starts after this Act enters into force.(2) The amended provisions of this Act concerning the value-added tax shall apply starting with the portion of goods or services first supplied or purchased, or goods declared for import after this Act enters into force.(3) The amended provisions of this Act concerning the transfer income tax and securities transaction tax shall apply starting with the portion first transferred after this Act enters into force.(4) The amended provisions of this Act concerning the inheritance tax or gift tax shall apply starting with the portion for which an inheritance or gift first commences after this Act enters into force.(5) The amended provisions of this Act concerning the special consumption tax, traffic, environment and energy tax, education tax and driving tax shall apply starting with the portion which is first carried out of the manufacturing place or bonded area, or whose importation is first declared, after this Act enters into force.(6) The amended provisions of this Act concerning the stamp tax shall apply starting with taxable documents first prepared after this Act enters into force.(7) The amended provisions of this Act concerning the customs duties shall apply starting with the portion whose importation is first declared after this Act enters into force.(8) The amended provisions of this Act concerning the acquisition tax or registration tax shall apply starting with the portion which is first acquired or registered after this Act enters into force.

The amended provisions of Article 8 shall apply starting with the portion for which a donation is first given or taken after this Act enters into force.

The amended provisions of Article 10 (1) shall apply starting with the taxable year whereto belongs the date this Act enters into force.

The amended provisions of Article 10-2 shall apply starting with the portion for which a contribution, etc. is first paid after this Act enters into force.

The amended provisions of Article 12-2 shall apply starting with the portion of the income which first accrues after this Act enters into force.

The amended provisions of Article 16 (1) shall apply starting with the portion of the contribution or investment which is first made after this Act enters into force.

The amended provisions of Article 18-2 shall apply starting with the portion of the income which is first paid after this Act enters into force.

The amended provisions of Article 22 (1) shall apply starting with the business year whereto belongs the date this Act enters into force.

The amended provisions of Article 33-2 shall apply starting with the portion of the business which is first converted after this Act enters into force.

The amended provisions of Article 46-2 (1) shall apply starting with the portion of the transfer margin which first accrues from the exchange with the treasury stocks or the in-kind investment in a venture business after this Act enters into force.

The amended provisions of Article 46-4 shall apply starting with the portion which is first transferred after this Act enters into force.

The amended provisions of Article 46-5 shall apply starting with the portion which is first divided after this Act enters into force.

The amended provisions of Article 46-6 shall apply starting with the portion which is first merged after this Act enters into force.

The amended provisions of Article 55-2 (4) shall apply starting with the portion of purchasing a national housing unit which is first newly built, or which has never been occupied at the time of acquisition, after this Act enters into force.

The amended provisions of Article 66 (1) shall apply starting with the business year whereto belongs the date this Act enters into force.

The amended provisions of Article 67 (1) shall apply starting with the business year whereto belongs the date this Act enters into force.

(1) The amended provisions of Article 68 (1) shall apply starting with the business year whereto belongs the date this Act enters into force.(2) The amended provisions of Article 68 (4) and (5) shall apply starting with the portion of the dividend which is first paid after this Act enters into force.

(1) The amended provisions of Article 72 (1) shall apply starting with the business year whereto belongs the date this Act enters into force.(2) The amended provisions of Article 72 (4) shall apply starting with the portion of the interest on funds provided for the improvement of financial structure, which is first paid after this Act enters into force.

The amended provisions of Article 73 shall apply starting with the portion which is first disbursed after this Act enters into force.

The amended provisions of Article 74 (1) shall apply starting with the portion of the income which accrues in the business year whereto belongs the date this Act enters into force.

The amended provisions of Article 76 shall apply starting with the portion which is first donated after this Act enters into force.

The amended provisions of Article 85-2 shall apply starting with the portion which is first relocated after this Act enters into force.

The amended provisions of Article 85-3 shall apply starting with the portion which is first invested in kind after this Act enters into force.

The amended provisions of Article 85-4 shall apply starting with the portion which is first invested in kind after this Act enters into force.

The amended provisions of Article 85-5 shall apply starting with the portion which is first transferred after this Act enters into force.

The amended provisions of Article 87 (1) shall apply starting with the portion which is first opened after this Act enters into force.

The amended provisions of Article 88-2 (1) 1 shall apply starting with the portion which is first subscribed to after this Act enters into force.

(1) The amended provisions of Article 88-4 (4) and (6) shall apply starting with the portion which is first alloted after this Act enters into force.(2) The amended provisions of Article 88-4 (9) and (10) shall apply starting with the portion of the dividend income the base date of whose dividend first comes after this Act enters into force.

The amended provisions of Article 89 (1) shall apply starting with the portion which is first opened, or whose contract period is first extended, after this Act enters into force.

The amended provisions of Article 89-3 shall apply starting with the portion which is first opened, or whose contract period is first extended, after this Act enters into force.

The amended provisions of Article 91 (1), (3) and (5) shall apply starting with the portion of the dividend income which is paid after this Act enters into force.

The amended provisions of Article 91-6 shall apply starting with the portion of the dividend income which is paid after this Act enters into force.

The amended provisions of Article 91-7 shall apply starting with the portion of the high-income high-risk investment trust, etc. which is first created or established after this Act enters into force.

The amended provisions of Article 92 shall apply starting with the portion of the income which first accrues after this Act enters into force.

(1) The amended provisions of Article 106-2 (6) shall apply starting with the portion of additional collection due to the transfer of the purchase coupon of tax-free petroleums, etc. which is first issued or the petroleum products supplied by the purchase coupon of tax-free petroleums, etc., or the use of the petroleum products, for other purposes than farming, forestry or fishing industry, which are first supplied by the purchase coupon of tax-free petroleums, etc., after this Act enters into force.(2) The amended provisions of Article 106-2 (8) shall apply starting with the portion of the purchase coupon of tax-free petroleums, etc. which is first issued, or the purchase coupon of tax-free petroleums, etc. or the petroleum products supplied by the purchase coupon of tax-free petroleums, etc. which are first taken over, after this Act enters into force.

(1) The amended provisions of Article 108 (1) shall apply starting with the portion which is first acquired after this Act enters into force.(2) The amended provisions of Article 108 (2) shall apply starting with the taxable period which first commences after this Act enters into force.

The amended provisions of Article 122 (2) and (3) shall apply starting with the portion of the amount of revenues which is derived after this Act enters into force.

(1) The amended provisions of Article 122-2 (1) (excluding the amended provisions concerning the value-added tax), (2), (4), (8) (excluding the amended provisions concerning the value-added tax) and (9) shall apply starting with the portion of the income which first accrues after this Act enters into force.(2) The amended provisions of Article 122-2 (1) and (8) concerning the value-added tax and of paragraphs (3) and (5) of the said Article shall apply starting with the portion which is reported on or after July 1, 2007.(3) The amended provisions of Article 122-2 (9) 1 (c) shall apply starting with the portion which is first settled after this Act enters into force.

The amended provisions of Article 126-2 (1) shall apply starting with the portion of the annual aggregate of amounts drawn on credit cards, etc. which is calculated in the year whereto belongs the date this Act enters into force.

The amended provisions of Article 126-3 (1) shall apply starting with the portion of the payment records which are submitted after this Act enters into force.

In the application of the amended provisions of Article 133 (3), the amount of the gift tax exempted pursuant to Articles 15 and 16 of the Addenda of the amended Regulation of Tax Reduction and Exemption Act, Act No. 5584, before this Act enters into force shall not be added up.

With respect to the inclusion of the reserves, which are added to the deductible expenses in each taxable year, in the gross income or the payment of an additional amount equivalent to the interest pursuant to the previous provisions of Articles 8-2, 9, 28, 55-2 (1) and (2) and 104-9, at the time of the entry into force of this Act, the previous provisions shall apply, respectively.

With respect to the profits derived by exercising a stock option which is granted prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 15.

(1) With respect to the reduction and exemption of a tax amount for a national who incorporates a start-up enterprise pursuant to the previous provisions of Article 30-2 (1) prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 30-2.(2) With respect to the reduction and exemption of a tax amount for a national who incorporates a start-up enterprise pursuant to the previous provisions of Article 30-2 (1) prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 121.

With respect to the deduction carried forward of a loss incurred pursuant to the previous provisions of Article 30-3 prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 30-3.

With respect to the transfer of the stocks or equities acquired through a direct investment in a corporate restructuring securities investment company pursuant to the previous provisions of Article 54 (3) prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 54 (3).

(1) With respect to the non-taxation of the corporation tax on the dividend income received from an enterprise subject to corporate restructuring prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 55 (1).(2) With respect to the transfer of the stocks that are first acquired by investing in a special company for corporate restructuring or a corporate restructuring investment company pursuant to the previous provisions of Article 55 (4) prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 55 (4).

(1) With respect to the person who commenced a lease business but had no income from the lease business prior to the entry into force of this Act, he shall be deemed to have commenced the lease business on the enforcement date of this Act, and thereby shall be subject to the amended provisions of Article 55-2 (4).(2) With respect to the transfer of the stocks that are first acquired by investing in a real estate investment company pursuant to the previous provisions of Article 55-2 (5) prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 55-2 (5).

With respect to the inclusion of a subsidy, which is not added to the gross income, in the gross income pursuant to the previous provisions of Article 72-2 prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 72-2.

With respect to the inclusion of a donation, which is not added to the deductible expenses, in the deductible expenses pursuant to the previous provisions of Article 73 (1) and (2) prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 73 (4).

With respect to the reduction or exemption of a transfer income tax pursuant to the previous provisions of Article 83, or the transfer of land, etc. for the application of the said provisions, prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 83.

With respect to the inclusion of the transfer margin, which is added to the deductible expenses, in the deductible expenses pursuant to the previous provisions of Article 84 prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 84.

With respect to the transfer (including the case of expropriation) of real estate used for the public project for the application of the previous provisions of Article 85 prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 85.

(1) With respect to the interest or dividend income accruing from the tax-favored comprehensive savings, the expiry date of whose contract period is fixed, subscribed to pursuant to the previous provisions of Article 89 (1) prior to the entry into force of this Act, the previous provisions shall apply until the contract period of the savings expires, notwithstanding the amended provisions of Article 89 (1).(2) With respect to the interest or dividend income accruing from the tax-favored comprehensive savings, the expiry date of whose contract period is not fixed, subscribed to pursuant to the previous provisions of Article 89 (1) prior to the entry into force of this Act, the previous provisions shall apply until December 31, 2009, notwithstanding the amended provisions of Article 89 (1).

With respect to the urban railway construction services that are furnished according to a contract concluded prior to the entry into force of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 105 (1) 3 (b).

With respect to the enterprise located in the Jeju high-tech science and technology complex, which has commenced the business subject to reduction or exemption as of the enforcement date of this Act, but in which the first income has not been generated prior to the entry into force of this Act, it shall be deemed to have commenced the business subject to reduction or exemption on the enforcement date of this Act, and thereby shall be subject to the amended provisions of Article 121-8 (1).

With respect to the enterprise located in the Jeju investment promotion zone or the Jeju free trade zone, which has commenced the business subject to reduction or exemption as of the enforcement date of this Act, but in which the first income has not been generated prior to the enforcement of this Act, it shall be deemed to have commenced the business subject to reduction or exemption on the enforcement date of this Act, and thereby shall be subject to the amended provisions of Article 121-9 (2).

(1) With respect to the special taxation on the income tax or the corporation tax for a business operator who has filed a faithful return for the taxable period prior to the enforcement of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 122-2 (1), (2), (4) and (5).(2) With respect to the relief rate by taxable period for a business operator who was subject to the previous provisions of Article 122-2 (3) prior to the enforcement of this Act, the previous provisions shall apply, notwithstanding the amended provisions of Article 122-2 (3).

ADDENDA <Act No. 8347, Apr. 11, 2007>

This Act shall enter into force on the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 8362, Apr. 11, 2007>

This Act shall enter into force on the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 8367, Apr. 11, 2007>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 8371, Apr. 11, 2007>

This Act shall enter into force on the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 8387, Apr. 27, 2007>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 8466, May 17, 2007>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 8493, Jun. 1, 2007>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 86-3 and 136 (3) shall enter into force on September 1, 2007.

The amended provisions of Article 7-2 (2) 1 shall apply with respect to the portion of the settlement or use which is made on or after the enforcement date of this Act.

The amended provisions of Article 86-3 shall apply starting with the portion of the payment which is made after joining the mutual aid during the taxable period to which the date on which this Act enters into force belongs.

The amended provisions of Article 91-2 shall apply with respect to the dividend income (including interest income in the case of the investment trust created not later than December 31, 2006) that accrues and is paid on or after the enforcement date of this Act.

The amended provisions of Article 104-11 (1) shall apply with respect to the portion of dividend paid by a personnel company which is subject to the application of special taxation on or after the enforcement date of this Act.

The amended provisions of Article 136 (3) shall apply with respect to the portion disbursed during the taxable year to which the date on which this Act enters into force belongs.

ADDENDA <Act No. 8572, Aug. 3, 2007>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 8827, Dec. 31, 2007>

This Act shall enter into force on January 1, 2008: Provided, That the amended provisions of Articles 106-4 through 106-6, and 126-3 shall enter into force on July 1, 2008, while the amended provisions of Articles 100-14 through 100-26, and 122 (5) shall enter into force on January 1, 2009.

(1) The amended provisions of this Act concerning the income tax and corporation tax shall apply to the taxable years that begin on or after the enforcement date of this Act.(2) The amended provisions of this Act concerning the value-added tax shall apply to the goods or services supplying or supplied or the goods for which an import declaration is filed on or after the enforcement date of this Act.(3) The amended provisions of this Act concerning the transfer income tax and the securities transaction tax shall apply to the assets transferred on or after the enforcement date of this Act.(4) The amended provisions of this Act concerning the inheritance tax and the gift tax shall apply to the inheritance commenced or the gift conveyed on or after the enforcement date of this Act.(5) The amended provisions of this Act concerning the individual consumption tax, the transportation energy environment tax, the education tax, and the driving tax shall apply to the goods released for a manufacturing place or a bonded area or those for which an import declaration is filed on or after the enforcement date of this Act.(6) The amended provisions of this Act concerning the acquisition tax and the registration tax shall apply to the property acquired or registered on or after the enforcement date of this Act.(7) The amended provisions of this Act concerning the customs duty shall apply to the goods for which an import declaration is filed on or after the enforcement date of this Act.(8) The amended provisions of this Act concerning the property tax and the comprehensive real estate holding tax shall apply to the property for which the duty to pay the taxes arises on or before the enforcement date of this Act.

The amended provisions of Article 6 (2) shall apply to the enterprises designated to venture businesses on or after the enforcement date of this Act.

The amended provisions of Article 7-2 (3) shall apply to the transactions made under the system on or after the enforcement date of this Act.

The amended provisions of Article 8 shall apply to the facilities transferred or donated on or after the enforcement date of this Act.

The amended provisions of Article 14 (2) shall apply to the investments made on or after the enforcement date of this Act.

The amended provisions of Article 24 shall apply to the investments made on or after the enforcement date of this Act.

The amended provisions of Article 25-3 shall apply to the investments made on or after the enforcement date of this Act.

The amended provisions of Article 25-4 shall apply to the investments made on or after the enforcement date of this Act.

The amended provisions of Article 33 shall apply to the enterprises that convert their business on or after the enforcement date of this Act.

The amended provisions of Article 33-2 shall apply to the enterprises that convert their business on or after the enforcement date of this Act.

The amended provisions of Article 47-4 (1) shall apply to the enterprises merged (including those merged after split-off) on or after the enforcement date of this Act.

The amended provision of Article 52-2 (1) shall apply to financial holding companies’ stocks exchanged or the stocks transferred to financial holding companies on or after the enforcement date of this Act.

The amended provisions of Article 55 (1) shall apply to the investments made on or after the enforcement date of this Act.

The amended provisions of Article 60 (2) shall apply to the sites and buildings of factories transferred on or after the enforcement date of this Act.

The amended provisions of Article 61 (3) shall apply to the site and buildings of headquarters or principal places of business transferred on or after the enforcement date of this Act.

The amended provisions of Article 63-2 shall apply to the head offices or factories relocated on or before the enforcement date of this Act: Provided, That if it has not passed five years since a corporation relocated all of its factories before the enforcement of this Act, the amended provisions of Article 63-2 (6) and (9) shall apply from the enforcement date of this Act to the fifth anniversary of the day on which the facilities of such factories are completely relocated.

The amended provisions of Article 63-3 (1) shall apply to the expenses paid on or after the enforcement date of this Act, and the amended provisions of paragraph (2) of the same Article shall apply to the donations made on or after the enforcement date of this Act.

The amended provisions of Article 73 (1) shall apply to the donations given on or after the enforcement date of this Act.

The amended provisions of Article 77 shall apply to the land, etc. transferred on or after July 6, 2007.

The amended provisions of Article 77-2 shall apply to the land, etc. transferred on or after October 17, 2007.

The amended provisions of Article 85-2 shall apply to the factories relocated or transferred on or after the enforcement date of this Act.

The amended provisions of Article 85-6 shall apply to the income generated on or after the enforcement date of this Act.

The amended provisions of Article 85-7 shall apply to the factories relocated or transferred on or after the enforcement date of this Act.

The amended provisions of Article 86-2 (4) shall apply to the income generated on or after the enforcement date of this Act.

The amended provisions of Article 87 (1), (2) 2, (3), and (8) shall apply to the accounts newly opened or those for which the maturity is extended on or after the enforcement date of this Act.

The amended provisions of Article 90-2 (1) shall apply to the data that shall be submitted or notified of on or after the enforcement date of this Act.

The amended provisions of Article 91-2 (2) shall apply to the dividend income (including the interest income, in cases where the investment trust involved was created on or before December 31, 2006) generated and paid on or after the enforcement date of the Partial Amendment (Act No. 8493) to the Special Tax Treatment Control Act.

The amended provisions of Article 91-7 shall apply to the income generated on or after the enforcement date of this Act.

The amended provisions of Article 91-8 shall apply to the investment trusts for public donation created or established on or after the enforcement date of this Act.

The amended provisions of Article 99-4 (limited to the amended provisions concerning the standard value at the time of acquiring a rural or fishing village house) shall apply to the houses acquired on or after the enforcement date of this Act.

The amended provisions of Article 104-6 (1) shall apply to the dividends received on or after the enforcement date of this Act.

The amended provisions of Article 104-14 shall apply to the payments made on or after the enforcement date of this Act.

(1) The amended provisions of Article 104-15 (1) shall apply to the investments or contributions made on or after the enforcement date of this Act.(2) The amended provisions of Article 104-15 (4) shall apply to the subsidies granted on or after the enforcement date of this Act.

(1) The amended provisions of Article 104-16 (1) shall apply to the transfer made on or after the enforcement date of this Act.(2) The amended provisions of Article 104-16 (4) shall apply to the contributions made on or after the enforcement date of this Act.

The amended provisions of Article 106 (1) 8 shall apply to the right to manage and operate facilities granted or the services provided on or after the enforcement date of this Act.

(1) The amended provisions of Article 106-2 (2) shall apply to the applications filed for refund, etc. on or after the enforcement date of this Act.(2) The amended provisions of Article 106-2 (3) concerning the reporting on changes shall apply to the changes that occur on or after the enforcement date of this Act.(3) The amended provisions of Article 106-2 (9) and (11) through (13) shall apply to the cases where a cause for levying the additional tax occurs on or after the enforcement date of this Act.(4) The amended provisions of Article 106-2 (10) 1 shall apply to the reports filed on or after the enforcement date of this Act and the amended provisions of subparagraph 2 of the said paragraph shall apply to the transfer made on or after the enforcement date of this Act, while the amended provisions of subparagraph 3 of the said paragraph shall apply to the cases in which a cause for imposing an additional amount occurs on or after the enforcement date of this Act.(5) The amended provisions of Article 106-2 (14) shall apply to the acquisition, inheritance, and merger made on or after the enforcement date of this Act.

The amended provisions of Article 106-3 (1) and (2) shall apply to the gold bullions supplying or supplied or those for which an import declaration is filed on or after the enforcement date of this Act.

The amended provisions of Article 106-4 shall apply to the gold-related products supplying or supplied on or after July 1, 2008 with a gold trading account opened and reported on or after June 1, 2008.

The amended provisions of Article 106-5 shall apply to the gold scraps acquired on or after the enforcement date of this Act.

The amended provisions of Article 106-6 shall apply to the gold bullions, etc. produced and released or those for which an import declaration is filed on or after the enforcement date of this Act.

The amended provisions of Article 119 (3) and (7) shall apply to the registration completed on or after the enforcement date of this Act.

The amended provisions of Article 120 (3) shall apply to the property acquired for business purpose on or after the enforcement date of this Act.

The amended provisions of Article 121-13 (5) shall apply to the duty-free goods sold or purchased on or after the enforcement date of this Act.

The amended provisions of Article 122 (5), (9), and (10) shall apply to the tax returns filed on or after January 1, 2009.

The amended provisions of Article 122-3 shall apply to the income generated on or after the enforcement date of this Act.

The amended provisions of Article 126-2 (1), (3), and (7) shall apply to annual aggregates of amounts drawn on credit cards, etc. for the year to which the enforcement date of this Act belongs.

The amended provisions of Article 126-3 (2) shall apply to the cash receipts issued on or after July 1, 2008.

The inclusion in gross income of reserves included in deductible expenses for each taxable year or the payment for an additional amount equivalent to interest under the previous provisions of Articles 4, 17, and 75 at the time when this Act enters into force shall be governed by the previous provisions.

(1) The transfer of stocks or equity shares acquired by an enterprise restructuring association as a result of investment in an enterprise subject to restructuring pursuant to the previous provisions of Article 14 (1) 5 before this Act enters into force shall be governed by the previous provisions, notwithstanding the amended provisions of Article 14 (1) 5.(2) The transfer of stocks or equity shares acquired as a result of investment under the previous provisions of Article 14 (2) before this Act enters into force shall be governed by the previous provisions, notwithstanding the amended provisions of Article 14 (2).

In cases where a business-purpose real estate was transferred in accordance with the previous provisions of Article 34 (2) before the enforcement of this Act and obligations owed to the relevant creditor financial institution is repaid after the enforcement of this Act with the price for such transfer, the abatement or exemption of the transfer income tax shall be governed by the previous provision, notwithstanding the amended provisions of Article 34 (2).

The transfer of stocks or equity shares acquired by a special company for corporate restructuring as a result of its direct investment or indirect investment through an enterprise restructuring association before the enforcement of this Act in accordance with the previous provisions of Article 55 shall be governed by the previous provisions, notwithstanding the amended provisions of Article 55.

The accounts of long-term savings for housing purchase which are opened before the enforcement date of this Act shall be deemed to be opened on January 1, 2008, and thus shall be governed by the amended provisions of Article 87 (8) (limited to subparagraph 2).

The stocks acquired before the enforcement of this Act in accordance with the previous provisions of Article 93 shall be governed by the previous provisions, notwithstanding the amended provisions of Article 93.

In applying the amended provisions of Article 106-2 (2), the products supplied by petroleum distributors to farmers, foresters, and fishers before the enforcement of this Act shall be governed by the previous provisions of Article 113 (2) and (3).

As regards the taxable period to which the enforcement date of this Act belongs, the applicable amount shall be the aggregate of the amounts drawn on credit cards, etc. for the period of time beginning on December 1, 2007 and ending on December 31, 2008, notwithstanding the amended provisions of Article 126-2 (7).

ADDENDA <Act No. 8852, Feb. 29, 2008>

This Act shall enter into force on the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 8966, Mar. 21, 2008>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 8986, Mar. 28, 2008>(1) (Enforcement Date) This Act shall enter into force on May 1, 2008: Provided, That the amended provisions of Articles 111-2 (3) and 111-3 (2) shall enter into force on the date of its promulgation.(2) (Applicability of Refund of Transportation Energy Environment Tax and Individual Consumption Tax Imposed on Fuel of Compact Car) The provisions concerning the refund of the transportation energy environment tax and the individual consumption tax imposed on fuel of a compact car in the amended provisions of Article 111-2 shall apply to the portion first purchased by an eligible person with an oil purchase card for refund on or after the date when this Act enters into force.(3) (Applicability of Exemption from Individual Consumption Tax Imposed on LPG Supplied to Taxicab) The provisions concerning the exemption from an individual consumption tax imposed on LPG supplied to a taxicab in the amended provisions of Article 111-3 shall apply to the portion first purchased by a taxicab businessman with a tax-free oil purchase card for a taxi on or after the date when this Act enters into force.ADDENDA <Act No. 9088, Jun. 5, 2008>(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.(2) and (3) Omitted.ADDENDA <Act No. 9131, Sep. 26, 2008>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 111-2 (2) and 112 shall enter into force on October 1, 2008.

The amended provisions of Article 7-2 (2) 1 shall apply beginning from the first bill settled, used or utilized after this Act enters into force.

The amended provisions of Article 8-2 shall apply beginning from the first income dividend received from investment after this Act enters into force.

The amended provisions of Article 11 (1) shall apply beginning from the first investment in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 25-2 (1) shall apply beginning from the first investment commenced after this Act enters into force.

The amended provisions of Article 30-2 shall apply beginning from the workers converted into regular workers in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 104-12 (2) 3 shall apply beginning from the comprehensive real estate holding tax the liability for payment of which is constituted in the year to which the enforcement date of this Act belongs.

The amended provisions of Article 104-17 shall apply beginning from the dormant deposit contributed in the business year to which the enforcement date of this Act belongs.

A part concerning refund of the transportation energy environment tax and the individual consumption tax from among the amended provisions of Article 111-2 shall apply beginning from the first fuel purchased with an oil purchase card for refund by an eligible person after this Act enters into force.

The amended provisions of Article 112 shall apply beginning from an act of admission to a golf course after October 1, 2008.

An amount of money equivalent to 10/100 of the amount of money invested by December 31, 2009 for the part invested after this Act enters into force as the investment which is in progress at the time when this Act enters into force, notwithstanding the amended provisions of Article 25-2 (1), shall be deducted from the income tax or the corporation tax.Article 12 Omitted.

ADDENDA <Act No. 9272, Dec. 26, 2008>

This Act shall enter into force on January 1, 2009: Provided, That the amended provisions of Articles 85-3, 89-2, 91-9, 91-10, 100-3, 100-5, 100-6, 100-11, 132, 133 shall enter into force on the date of its promulgation, the amended provisions of Articles 74 (3), 87-5 (3) and (4), 88-4 (3) and (6), 89 (1) 1, part other than the subparagraphs of Article 91 (1) (excluding the amended part concerning the period for possession of stocks), paragraphs (3) and (5) through (7) of the same Article, Articles 91-2, 91-4 (2) and (3), 91-6, 91-8, 100-15, 106-3 (1) 3, (4) 2, (7), 117 (1) 3 through 6, 10 and 18, 119 (6) and (7), 120 (4) 2 and 121-5 (5) 3 shall enter into force on February 4, 2009.

From among the amended provisions of Article 91-9 (1) 1, “the securities market under the Financial Investment Services and Capital Markets Act” shall be deemed “the securities market or KOSDAQ market under the Securities and Exchange Act” until February 3, 2009, from among the amended provisions of Articles 91-9 (1) 1 and 91-10 (1) 1, “an investment company or an investment trust under the Financial Investment Services and Capital Markets Act (excluding special accounts of an insurance company under Article 251 of the same Act)” shall be deemed “an investment company or an investment trust under the Indirect Investment Assets Management Act (excluding special accounts of an insurance company under Article 135 of the same Act)” respectively until February 3, 2009, from among the amended provisions of Article 91-10 (1) 1, “acquisition of stocks or profit-making securities (limited to acquisition of stocks or profit-making securities issued by a method of subscription or sale under Article 9 (7) and (9) of the same Act)” shall be deemed “acquisition of stocks or profit-making securities (limited to acquisition of stocks or profit-making securities issued by a method of subscription or sale under Article 2 (3) and (4) of the Securities and Exchange Act)” until February 3, 2009.

(1) The amended provisions of this Act concerning income tax and corporation tax shall apply beginning from the first commencing taxable year after this Act enters into force.(2) The amended provisions of this Act concerning value-added tax shall apply beginning from the first supply of goods or services or the first receipt of goods or services supplied, or first declaration of import of goods after this Act enters into force.(3) The amended provisions of this Act concerning transfer income tax and securities transaction tax shall apply beginning from the first transfer after this Act enters into force.(4) The amended provisions of this Act concerning inheritance tax and donation tax shall apply beginning from the first commencing inheritance or first donation after this Act enters into force.(5) The amended provisions of this Act concerning individual consumption tax, traffic tax, environment tax, energy tax, education tax and traveling tax shall apply beginning from the first transportation out of a place of manufacturing or a bonded area or first declaration of import after this Act enters into force.(6) The amended provisons of this Act concerning stamp tax shall apply beginning from the first preparation of taxation documents after this Act enters into force.(7) The amended provisions of this Act concerning acquisition tax and registration tax shall apply from the first acquisition or registration after this Act enters into force.(8) The amended provisions of this Act concerning customs duties shall apply beginning from the first declaration of import after this Act enters into force.(9) The amended provisions of this Act concerning the special provisions on taxation on partnership firms in Section 10-3 shall apply beginning from the first part governed by the special provisions on taxation on partnership firms after this Act enters into force.

The amended provisons of Article 6 (3) shall apply beginning from the first small and medium enterprise newly established after this Act enters into force.

The amended provisions of Article 13 shall apply beginning from the first investment after this Act enters into force.

For stocks or stakes of investment acquired by investment in enterprises subject to restructuring under Article 14 (4) of the Industrial Development Act through an association for restructuring of enterprises under Article 15 of the same Act by an institutional investor under the previous Article 14 (2) on or before May 7, 2009, a tax amount equivalent to 50/100 of the corporation tax on transfer marginal profit accruing from transfer of the relevant stocks or stakes of investment shall be reduced or exempted.

The amended provisions of Article 16 shall apply beginning from investment or contribution after this Act enters into force.

The amended provisions of Article 25-3 (1) shall apply beginning from the first investment after this Act enters into force.

The amended provisions of Article 38-2 shall apply beginning from the first investment in kind, etc. after this Act enters into force.

Notwithstanding the amended provisions of Article 55 (1), in cases where a specialized enterprise restructuring company acquires stocks or stakes of investment by investment in an enterprise subject to restructuring on or before May 7, 2009 directly or through an association for restructuring of enterprises, a tax amount equivalent to 50/100 of the corporation tax on transfer marginal profit accruing from transfer of the relevant stocks or stakes of investment shall be reduced or exempted. In such cases, the previous Article 55 (2) shall apply mutatis mutandis.

The amended provisions of Article 85-3 shall apply beginning from the investment in the business year to which the date of promulgation of this Act belongs.

The amended provisions of Article 87-5 shall apply beginning from the first dividend income received after this Act enters into force.

The amended provisions of Article 88-2 shall apply beginning from the first savings the account of which is opened or the term of contract of which is extended after this Act enters into force.

The amended provisions of Article 89 shall apply beginning from the first savings the account of which is opened or the term of contract of which is extended after this Act enters into force: Provided, That notwithstanding the amended provisions of Article 89 (1), the previous provisions shall apply to the interest income and dividend income of savings which has no expiration date of the term of contract until December 31, 2011 as favorable tax composite savings the account of which has been opened pursuant to Article 89 (1).

The amended provisions of Article 89-2 shall apply beginning from the first savings the account of which was opened after October 20, 2008.

The amended provisions of Article 89-3 shall apply beginning from the first income accrued after this Act enters into force.

The amended provisions of Article 91 shall apply beginning from the first dividend income received after this Act enters into force.

The amended provisions of Article 91-4 shall apply beginning from the dividend income received after this Act enters into force.

The amended provisions of Article 91-9 shall apply beginning from the first savings the account of which was opened after October 20, 2008.

The amended provisions of Article 91-10 shall apply beginning from the first savings the account of which was opened after October 20, 2008.

The amended provisions of Article 98-2 shall apply beginning from the first house transferred after this Act enters into force.

The amended provisions of Article 99-4 shall apply beginning from the first acquisition of a house in agricultural and fishing villages or a house in a native place after this Act enters into force.

The amended provisions of Articles 100-3, 100-5, 100-6 and 100-11 shall apply beginning from the income belonging to the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 104-19 shall apply beginning from the first acquistion of land for which liability of tax payment is constituted after this Act enters into force.

The amended provisions of Article 106-2 (12) 3 shall apply beginning from the first application for repayment of a tax amount reduced or exempted after this Act enters into force.

The amended provisions of Article 121-2 shall apply beginning from the first application for tax reduction or exemption after this Act enters into force.

The amended provisions of Article 130 shall apply beginning from the first investment after this Act enters into force.

(1) Notwithstanding the amended provisions of Article 132 (1), “13/100 (10/100 for the part under the tax base of 100 billion won, 7/100 in case of small and medium enterprises)” of the same provisions shall be “15/100 (13/100 for the part under the tax base of 100 billion won, 8/100 in case of small and medium enterprises)” in the business year to which the enforcement date of this Act belongs.(2) Notwithstanding the amended provisions of Article 132 (1), “13/100 (10/100 for the part under the tax base of 100 billion won, 7/100 in case of small and medium enterprises)” of the same provisions shall be “14/100 (11/100 for the part under the tax base of 100 billion won, 8/100 in case of small and medium enterprises)” in the business year to which the date when one year has passed after this Act enters into force belongs.(3) When calculating a tax amount of interim prepayment under Article 63 (1) of the Corporation Tax Act of the business year beginning after January 1, 2009, the minimum tax of the preceding business year of the relevant business year shall be calculated by application of rates under paragraph (2), and when calculating a tax amount of interim prepayment under Article 63 (1) of the Corporation Tax Act of the business year beginning after January 1, 2010, the minimum tax of the preceding business year of the relevant business year shall be calculated by application of the amended provisions of Article 132 (1).

The amended provisions of Article 133 shall apply beginning from the first transfer in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 141-2 shall apply beginning from the first income paid after this Act enters into force.

Notwithstanding the amended provisions of Article 14 (2), the previous provisions shall apply to transfer of stocks or stakes of investment acquired by investment pursuant to the previous Article 14 (2) before this Act enters into force.

Notwithstanding the amended provisions of Article 23, the previous provisions shall apply to deferred taxation on transfer marginal profits accrued from transfer of a ship pursuant to the previous Article 23 (1) before this Act enters into force.

In cases where small and medium enterprises having converted their businesses have transferred inventory assets for business use before conversion pursuant to the previous Article 33 before this Act enters into force, the previous provisions shall apply to reduction and exemption, deferred taxation and additional collection or such for transfer income tax.

Notwithstanding the amended provisions of Article 38, the previous provisions shall apply to deferred taxation on transfer marginal profits accrued from investment of assets in kind pursuant to the previous Article 38 (1) before this Act enters into force.

Notwithstanding the amended provisions of Article 43-2, the previous provisions shall apply to inclusion in gross income of transfer marginal profits accrued from transfer of land, etc. pursuant to the previous Article 43-2 (1) before this Act enters into force.

Notwithstanding the amended provisions of Article 46, the previous provisions shall apply to deferred taxation on transfer marginal profits accrued from transfer of stocks pursuant to the previous Article 46 (1) before this Act enters into force.

In case of exchange of stocks pursuant to the previous Article 47 before this Act enters into force, notwithstanding the amended provisions of Article 47, the previous provisions shall apply to deferred taxation on an amount equivalent to transfer marginal profits of assets at the time of investment in kind or division in kind.

Notwithstanding the amended provisions of Article 52-2, the previous provisions shall apply to deferred taxation on transfer marginal profits accrued from exchange or transfer of stocks pursuant to the previous Article 52-2 before this Act enters into force.

When a securities investment company for restructuring enterprises under the previous Article 54 (4) calculates the corporation tax on the income of the business year beginning before this Act enters into force, notwithstanding the amended provisions of Article 54, the previous provisions shall apply to the dividend of the relevant business year.

Notwithstanding the amended provisions of Article 55, the previous provisions shall apply to transfer of stocks or stakes of investment acquired by investment in an enterprise subject to restructuring pursuant to the previous Article 55 (1) before this Act enters into force.

In cases where a business operator who is converted into a value added tax-free business operator or to whom a tax-free business is added pursuant to the amended provisions of Article 106 (1) 11 directly uses money and property acquired before this Act enters into force for a business exempt from value-added tax, Articles 6 (2) and 17 (5) of the Value-Added Tax Act shall not apply.

ADDENDA <Act No. 9276, Dec. 29, 2008>

This Act shall enter into force six months after the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 9353, Jan. 30, 2009>(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.(2) (Applicability concerning Reduction of and Exemption from Corporation Tax of Enterprises Moving into Investment Promotion Zone in Asian Cultural Hub City) The amended provisions of Article 121-20 shall apply beginning from the first enterprise (in cases where an enterprise located in the Investment Promotion Zone in an Asian Cultural Hub City before this Act enters into force increases the capital or makes an investment in the period from the enforcement date of this Act to December 31, 2012, such capital increase or investment shall be included.) moving into the Investment Promotion Zone after the enforcement date of this Act.ADDENDA <Act No. 9366, Jan. 30, 2009>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 9370, Jan. 30, 2009>

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 9347, Jan. 30, 2009>

This Act shall enter into force six months after the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 9432, Feb. 6, 2009>

This Act shall enter into force six months after the date of its promulgation. <Proviso Omitted.>

ADDENDA <Act No. 9512, Mar. 25, 2009>

This Act shall enter into force on the date of its promulgation.

The amended provisions of Article 30-3 shall apply beginning from the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 77-3 shall apply beginning from the first transfer in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 91-11 shall apply beginning from the first payment after this Act enters into force.

The amended provisions of Article 96 shall apply beginning from the income derived in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 98-2 (4) shall apply beginning from the first transfer in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 98-3 shall apply beginning from the first transfer in the taxable year to which the enforcement date of this Act belongs.

The amended provisions of Article 104-11 shall apply beginning from the first report after this Act enters into force.

In cases where the retirement tax amount in the year 2009 is withheld by applying the former provisions because a resident retires before this Act enters into force and the tax amount withheld exceeds an amount to be paid based on the amended provisions of this Act, the resident may receives back the exceeding amount in accordance with the final return on retirement income tax base under Article 71 of the Income Tax Act.

ADDENDA <Act No. 9584, Apr. 1, 2009>

This Act shall enter into force on May 8, 2009.