(1) Where a domestic corporation receives subsidies, etc. under the Subsidy Management Act, the Local Finance Act and other statutes prescribed by Presidential Decree (hereafter in this Article, referred to as "National subsidies, etc.") and uses them to acquire or improve business assets prescribed by Presidential Decree (hereafter in this Article, referred to as "business assets"), by no later than the end date of the business year which includes the date of the receipt of the subsidies, or first acquires or improves business assets and receives the National subsidies, etc. afterwards, the amount, including the value of the National subsidies, etc. used for the acquisition or improvement of the business assets among the value of such business assets, may be included in deductible expenses for the purpose of calculating the amount of income for the relevant business year, as prescribed by Presidential Decree. <Amended on Jul. 25, 2011; Dec. 24, 2018>
(2) Where a domestic corporation which has failed to acquire or improve the business assets by the end date of the business year, during which it receives the National subsidies, etc., intends to acquire or improve any business assets within one year from the start date of the following business year, the amount of the National subsidies, etc. to be used for acquisition or improvement may be included in deductible expenses by applying mutatis mutandis paragraph (1). In such cases, where the domestic corporation fails to use National subsidies, etc. by the deadline due to grounds prescribed by Presidential Decree, such as delay of permission or authorization, the end date of the business year during which the relevant grounds cease shall be deemed the deadline.
(3) Where a domestic corporation which has included an amount equivalent to the National subsidies, etc. in the deductible expenses under paragraph (2) fails to use such amount for the acquisition or improvement of business assets by the deadline, or discontinues its business or is dissolved before using it, the amount unused shall be included in gross income for the purpose of calculating the amount of income for the business year during which such grounds arise; provided, the same shall not apply where such domestic corporation is merged or divided and the surviving corporation, etc. succeeds to the amount. In such cases, the amount shall be deemed to have been included in deductible expenses by such surviving corporation, etc. under paragraph (2).
(4) In applying paragraph (1), where any domestic corporation receives the National subsidies, etc. in any form of assets, other than money, and uses them for its business, they shall be deemed to have been used for the acquisition or improvement of business assets.
(5) A domestic corporation which intends to apply paragraphs (1) and (2) shall submit a detailed statement on the National subsidies, etc., and on the business assets acquired by the National subsidies, etc. (a plan to use the National subsidies, etc. in cases falling under paragraph (2)) to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended on Dec. 24, 2018>
(6) For purposes of paragraphs (1) through (3), matters necessary for calculating the amount included in deductible expenses and the amount included in the gross income, the method of calculation, and other matters shall be prescribed by Presidential Decree.[This Article Wholly Amended on Dec. 30, 2010]