(1) "Business promotion expense" in this Article means entertainment expense, social expense, honorarium, or other expenses of a similar nature, however named, spent by a domestic corporation for smoothly conducting business with those directly or indirectly related to its business. <Amended on Dec. 24, 2018; Dec. 31, 2022>
(2) Business promotion expenses paid by a domestic corporation in excess of the amount prescribed by Presidential Decree on one occasion, which do not fall under any of the following, shall not be included in deductible expenses for the purpose of calculating the amount of income for each business year; provided, the same shall not apply to any business promotion expenses prescribed by Presidential Decree, such as those paid in any foreign country for farmers or fishermen, which make it impractical to obtain documents evidencing that such business promotion expenses fall under any of the followings, but the expenditure of such business promotion expenses is objectively unquestionable: <Amended on Dec. 30, 2010; Dec. 31, 2011; Jun. 7, 2013; Dec. 24, 2018; Dec. 31, 2022>
1. Business promotion expenses paid upon using any of the following (hereinafter referred to as "credit card, etc."):(a) Credit cards defined in the Specialized Credit Finance Business Act (including items prescribed by Presidential Decree and similar to credit cards; hereafter in Article 117, the same shall apply);(b) Cash Receipts prescribed in Article 126-2 (1) 2 of the Act on Restriction on Special Cases concerning Taxation (hereinafter referred to as "Cash Receipts");
2. Business promotion expenses paid upon receiving an invoice referred to in Article 121 of this Act or Article 163 of the Income Tax Act or a tax invoice referred to in Articles 32 and 35 of the Value-Added Tax Act;
3. Business promotion expenses paid upon issuing a purchaser-issued invoice referred to in Article 121-2 or purchaser-issued tax invoice referred to in Article 34-2 (2) of the Value-Added Tax Act;
4. Business promotion expenses paid upon issuing cash receipts prescribed by Presidential Decree.
(3) Where a sales slip, etc., is issued in the name of other credit card merchant, etc., which is not the one that actually supplies the relevant goods or services, the relevant amount of spending shall not be deemed the business promotion expenses referred to in paragraph (2) 1 for the purposes of paragraph (2) 1. <Amended on Dec. 30, 2010; Dec. 24, 2018; Dec. 31, 2022>
(4) Business promotion expenses (excluding the amount which is not included in deductible expenses pursuant to paragraph (2)) paid by a domestic corporation for each business year in excess of the sum of the following amounts shall not be included in deductible expenses in calculating the amount of income for the relevant business year: <Amended on Dec. 24, 2018; Dec. 31, 2019; Dec. 31, 2022>
1. Standard ceiling: The amount calculated by the following formula: The amount of standard ceiling: A x B x 1/12A: 12 million won (36 million won for a small and medium enterprises)B: The number of months for the relevant business year (the number of months shall be calculated by calendar, and the number of days less than one month shall be deemed one month.)2. The ceiling by the amount of income: The amount computed by multiplying the amount of income for the relevant business year (limited to the amount of income prescribed by Presidential Decree) by the rates specified in the following table; provided, with respect to the amount of income accrued from transactions with a related party, it means an amount equivalent to 10/100 of the amount computed by multiplying such amount of income by the rates specified in the following table: Amount of IncomeRate(a) Not exceeding 10,000,000,000 won0.3 percent(b) Between 10 billion won and 50 billion won30 million won＋(amount of income ? 10 billion won) x 0.2 percent(c) At least 50 billion won1.1 billion won＋(amount of income ? 50 billion won) x 0.03 percent(5) In applying paragraph (4), where the domestic corporation mainly engages in real estate leasing business or meets the criteria prescribed by Presidential Decree, the amount in excess of 50/100 of the sum of the amounts in all subparagraphs of the same paragraph shall not be included in deductible expenses in calculating the amount of income for the relevant business year. <Added on Dec. 24, 2018>
(6) Matter necessary for the scope and calculation of business promotion expenses, keeping documents evidencing disbursement, etc. shall be prescribed by Presidential Decree. <Amended on Dec. 30, 2010; Dec. 24, 2018; Dec. 31, 2022>[Title of This Article Amended on Dec. 31, 2022]