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National Assembly Legislation

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  • Corporate Tax Act
    • Competent Ministry : Ministry of Economy and Finance
    • Advance Publication of Legislation : 2021-08-24
    • Opinion Submission Deadline : 2021-09-07
Reasons for Proposal

Reason for proposal & Main content

Current Act prescribes that, if a domestic corporation bought or leased company cars and registered them as company cars, the amount which belongs to business expense designated by the Presidential Decree in the costs incurred for the corresponding fiscal year is deemed as a loss when calculating income for the fiscal year and the amount is deducted from corporate tax.

However, recently owner families purchase or lease high-price cars, etc. which can be hardly deemed as company cars, use them for personal use, and register them as company cars, but in fact, such cost is deemed as a loss for corporate tax evasion.

Therefore, if the value or market standard price of a company car exceeds KRW 100 million or the rental cost designated by the Presidential Decree is exceeded, the cost is not deemed as a loss and operation status of company cars may be controlled and supervised by the head of the corresponding tax office in accordance with the provisions of the Presidential Decree if there is a need for the control and supervision of company cars in order to enforce special regulations on company cars to reflect public opinion on the pertaining law (Article 27-2(1) and 27-2(6) of draft)

Major Provisions

Article 27-2 of draft

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