(1) Depreciation costs of the passenger vehicles provided for in Article 1 (2) 3 of the Individual Consumption Tax Act (excluding passenger vehicles specified by Presidential Decree and directly used for such business as transportation business or motor vehicle sales business and passenger cars used for the purpose of research and development, as prescribed by Presidential Decree; hereafter in this Article and Article 74-2, referred to as "passenger vehicles for business use") shall be included in deductible expenses for the purpose of computing the amount of income for each business year, as prescribed by Presidential Decree. <Amended on Dec. 24, 2018; Dec. 31, 2019; Dec. 21, 2021>
(2) The amount that does not fall in the scope of expenses prescribed by Presidential Decree incurred for business use (hereafter in this Article, referred to as "expenses incurred for business use"), among expenses specified by Presidential Decree, such as depreciation costs, rental charges, and fuel expenses generated during the relevant business year for passenger vehicles that a domestic corporation has acquired or rented for business use (hereafter in this Article and Article 74-2, referred to as "expenses incurred in relation to passenger vehicles for business use") shall not be included in deductible expenses for the purpose of computing the amount of income for the relevant business year. <Amended on Dec. 24, 2018; Dec. 31, 2019; Dec. 21, 2021>
(3) In applying paragraph (2), where either of the following cost or amount, out of expenses incurred for business use, exceeds eight million won during a business year (referring to the amount calculated by multiplying eight million won by the number of months during the relevant business year and then dividing the amount therefrom by 12, where the relevant business year is less than one year, or the amount calculated by multiplying eight million won by the number of months during the period of owning or renting the relevant vehicle and then dividing the amount therefrom by the number of months during the relevant business year, where the vehicle was owned or rented for a certain period during the business year), the excess amount (hereafter in this Article, referred to as "excess of the ceiling on depreciation costs") shall not be included in deductible expenses for the relevant business year but shall be carried over to the following term and shall be included in deductible expenses by the method prescribed by Presidential Decree: <Amended on Dec. 19, 2017>
1. The depreciation cost of each passenger vehicle for business use;
2. The amount specified by Presidential Decree as equivalent to depreciation costs, among rental charges for each passenger vehicle for business use.
(4) Where the loss incurred in disposing of passenger vehicles for business use exceeds eight million won for each passenger vehicle for business use (referring to the amount calculated by multiplying eight million won by the number of months during the relevant business year and then dividing the amount therefrom by 12, where the relevant business year is less than one year), the excess amount shall be included in deductible expenses by the method prescribed by Presidential Decree, which is carrying over the amount to the following term. <Amended on Dec. 24, 2018>
(5) For the purpose of applying paragraphs (3) and (4) to a domestic corporation, "eight million won" shall be construed as "four million won" respectively, where the domestic corporation engages mainly in real estate leasing business or meets the criteria prescribed by Presidential Decree. <Added on Dec. 20, 2016>
(6) Each corporation that includes expenses incurred in relation to passenger vehicles for business use pursuant to paragraphs (1) through (5) shall submit a statement on the expenses incurred in relation to passenger vehicles for business use to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended on Dec. 20, 2016>
(7) The method for calculating expenses incurred for business use, the methods for calculating and carrying over the excess of the ceiling on depreciation costs, and other necessary matters, shall be prescribed by Presidential Decree. <Amended on Dec. 20, 2016>[This Article Added on Dec. 15, 2015]