(1) Interest on the following loans shall not be included in deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year: <Amended on Dec. 30, 2010; Dec. 31, 2011; Dec. 24, 2018>
1. Interest on debentures for which the creditor prescribed by Presidential Decree is unknown;
2. Interest on, a discount of, or gains from bonds and securities referred to in Article 16 (1) 1, 2, 5, and 8 of the Income Tax Act, which are prescribed by Presidential Decree and for which the recipient is unknown;
3. Interest on loans appropriated for construction capital prescribed by Presidential Decree;
4. Among interest on loans paid during each business year by a domestic corporation which acquires or owns any of the following assets, the amount calculated, as prescribed by Presidential Decree (the ceiling thereon shall be the interest on loans equivalent to the value of the relevant assets):(a) Assets referred to in subparagraph 1 of Article 27;(b) Provisional payments, etc. prescribed by Presidential Decree to a related party with no connection to the business of the relevant corporation.
(2) An amount prescribed by Presidential Decree and calculated by subtracting the interest referred to in paragraph (1) 3 from the interest on loans appropriated for construction capital, need not be included in the deductible expenses for the purpose of calculating the amount of income of a domestic corporation for each business year. <Added on Dec. 30, 2010; Dec. 24, 2018>
(3) Where the provisions governing the non-inclusion of interest expenses in deductible expenses stipulated in each subparagraph of paragraph (1) apply concurrently, such provisions shall apply in the order prescribed by Presidential Decree. <Amended on Dec. 30, 2010; Dec. 24, 2018>
(4) Matters necessary for the scope and calculation of loans and interest expenses under paragraph (1) and other matters shall be prescribed by Presidential Decree. <Amended on Dec. 30, 2010; Dec. 24, 2018>[Title Amended on Dec. 30, 2010]