(1) Losses referred to in Article 13 (1) 1 as on the registration date of the division of a counterpart corporation in a division and merger, excluding the amount of losses that a corporation established through division, etc. succeeds to pursuant to Article 46-3 (2), shall not be deducted to the extent of income (referring to an amount calculated by proportionally dividing the amount of income by the rate of value of asset prescribed by Presidential Decree where no separate accounting has not been kept as the corporation fell under the proviso to Article 113 (4); hereafter in this Article, the same shall apply) accruing from the business that has been succeeded to from a divided corporation when calculating the tax base for each business year of the counterpart corporation in the division and merger. <Amended on Dec. 24, 2018; Dec. 22, 2020>
(2) Losses of a divided corporation, etc., succeeded to by a corporation established through division, etc., under Article 46-3 (2), shall be deducted to the extent of income accruing from the business succeeded to from a divided corporation, etc., when calculating the tax base of the corporation established through division, etc., for each business year.
(3) A corporation established through division, etc., that merges and divides with no capital gain on the transfer deemed under Article 46 (2) (hereinafter referred to as "qualified merger and division") shall include, in deductible expenses, losses on disposition of the assets (limited to the difference only where the market value of the relevant assets under Article 52 (2) as on the registration date of the merger is lower than book value and to the losses incurred during the business years ending within five years after the registration date of the merger) held by the divided corporation and the counterpart corporation to a merger and division prior to the merger and division to the extent of income (referring to the amount of income before the relevant losses on disposition are deducted) accruing from the business of the relevant corporation prior to the division and merger in calculating the amount of income of the relevant business year. In such cases, paragraphs (1) and (2) shall apply accordingly, deeming that losses on disposition excluded in deductible expenses were incurred from the business of the relevant corporation prior to the division and merger. <Amended on Dec. 31, 2011; Dec. 20, 2016>
(4) Reductions or tax credits of the divided corporation, etc., that a corporation established through division, etc., has succeeded to under Article 46-3 (2) shall apply to the extent of income accruing from the business that has been succeeded to from the divided corporation, etc., or the amount of corporate tax equivalent to such income, as prescribed by Presidential Decree.
(5) Notwithstanding the proviso to Article 13 (1), as of the registration date of division of the other corporation of the divisional merger pursuant to paragraphs (1) and (2), deductions for deficits of divisional corporations, etc. succeeded by divisional corporations, etc., shall be 80/100 of the income amount under each of the following subparagraphs (100/100 in the case of a corporation prescribed by Presidential Decree, such as a small and medium enterprise and a company implementing a rehabilitation plan): <Added on Dec. 31, 2019; Dec. 31, 2022>
1. In cases of losses as of the registration date of the division of the counterpart corporation to a division and merger: An amount calculated by subtracting the amount of income accruing from the business succeeded to from the divided corporation from the amount of income of the counterpart corporation to a division and merger;
2. In cases of losses of a divided corporation, etc., succeeded to by a corporation established through division, etc.: The amount of income accruing from the business succeeded to from a divided corporation, etc.
(6) As of the division registration date of a counterpart corporation in a division and merger, out of an amount not included in deductible expenses when calculating the amount of income for each subsequent business year (hereafter in this Article referred to as "amount exceeding the ceiling on donations") as an amount carried forward under Article 24 (5) out of the donations referred to in paragraphs (2) 1 and (3) 1 of the same Article, the amount excluding an amount excluding the ceiling on donations that a corporation established through division, etc. succeeds to under Article 46-3 (2) be included in deductible expenses to the extent of the respective ceilings on donations includible in deductible expenses prescribed in Article 24 (2) 2 and (3) 2 on the basis of the amount of income accruing from the business of a counterpart corporation in a division and merger before the division and merger for the purpose of calculating the income amount for each business year of the a corporation established through division, etc. <Added on Dec. 22, 2020>
(7) An amount that a corporation established through division, etc. succeeds to under Article 46-3 (2), as an amount exceeding a ceiling on donations as of the division registration date of a divided corporation, etc., shall be included in deductible expenses to the extent of the respective ceilings on donations includible in deductible expenses referred to in Article 24 (2) 2 and (3) 2 on the basis of the amount of income accruing from the business succeeded from the divided corporation, etc. for the purpose of calculating the amount of income for each business year of the corporation established through division, etc. <Added on Dec. 22, 2020>
(8) Matters necessary for the calculation of losses to be deducted when calculating the tax base for each fiscal year, the inclusion of the losses on disposition of the succeeded assets in deductible expenses, the inclusion of the amount exceeding a ceiling on donations succeeded, the calculation of the amount of corporate tax constituting the amount of income accruing from the business that has been succeeded under paragraphs (1) through (7), and other matters, shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2019; Dec. 22, 2020>[This Article Wholly Amended on Dec. 30, 2010]