(1) The amount calculated by subtracting the amount in subparagraph 2 from the amount in subparagraph 1, among profit dividends or surplus distributions or constructive dividends or distributions provided in Article 16 (hereafter in this Article and Article 76-14, referred to as "dividend income") that a domestic corporation (excluding a non-profit domestic corporation that appropriates reserve funds for proper purpose business as deductible expenses pursuant to Article 29) receives from other corporation invested by the relevant domestic corporation (hereafter in this Article, referred to as "invested corporation") shall not be included in gross income for the purpose of calculating the amount of income for each business year. In such cases, where the amount is less than zero, it shall be deemed nil: <Amended on Dec. 31, 2019; Dec. 31, 2022>
1. The sum of the amount calculated by multiplying the dividend income of each invested corporation by the ratio of non-inclusion in gross income by the classification in the following table┌──────────────┬──────┐│The ratio of investment in invested corporation│The ratio of non-inclusion in gross income│├──────────────┼──────┤│At least 50 percent│100 percent│├──────────────┼──────┤│At least 20 percent but less than 50 percent│80 percent │├──────────────┼──────┤│Less than 20 percent│30 percent│└──────────────┴──────┘2. The amount calculated as prescribed by Presidential Decree, considering the ratio of non-inclusion in gross income and the amount of investment in invested corporation referred to in subparagraph 1 among the interest on borrowings to the total assets of a domestic corporation, where interest on borrowings has been paid by the domestic corporation in each business year.
(2) Paragraph (1) shall not apply to any of the following dividend incomes: <Amended on Dec. 22, 2020; Dec. 31, 2023>
1. The dividend income accruing upon holding stocks, etc. acquired within three months prior to the base date of dividend distribution;
2. Deleted. <Dec. 31, 2022>
3. The dividend income paid by any corporation which is entitled to income deductions on the dividend payable under Article 51-2 or Article 104-31 of the Act on Restriction on Special Cases concerning Taxation;
4. The dividend income paid by any corporation (limited to corporation prescribed by Presidential Decree), which is entitled to the non-taxation, exemption, or reduction of corporate tax under this Act and the Act on Restriction on Special Cases concerning Taxation;
5. The amount of dividend income received from corporate taxable trust property entitled to income deduction with respect to the dividends paid pursuant to Article 75-14.
6. The dividend income paid by reducing the revaluation reserve under of Article 16 (1) 2 of this Act, in violation of Article 28 (2) of the Assets Revaluation Act.
7. The dividend income received by reducing the capital reserve falling under subparagraph 8 (b) and (c) of Article 18;
8. The dividend income prescribed by Presidential Decree, for which corporate tax is not imposed on the income of the invested corporation, such as the amount of property acquired by a domestic corporation who is a stockholder, etc. that exceeds the original acquisition value of stocks, etc. due to a decrease in capital.
(3) In applying paragraphs (1) and (2), matters necessary for the method for computing the ratio of equity investment by a domestic corporation in an invested corporation, amounts excluded from gross income, the scope of borrowings and interest on borrowings, submission of a detailed dividend income statement, etc. shall be prescribed by Presidential Decree.[This Article Wholly Amended on Dec. 24, 2018][Moved from Article 18-3; previous Article 18-2 moved to Article 18-3 <Dec. 24, 2018>]