(1) Where a domestic corporation is dissolved in the course of a division (excluding a split-off: hereafter in this Article and Articles 46-2 through 46-4, the same shall apply), the assets of the domestic corporation shall be deemed transferred to a corporation established through division or a counterpart corporation to a division and merger (hereinafter referred to as "corporation established through division, etc."). In such cases, capital gains or losses on a transfer (referring to the amount calculated by subtracting the value referred to in subparagraph 2 from the value referred to in subparagraph 1; hereafter in this Article and Article 46-3, the same shall apply) shall be included in the gross income or deductible expenses when a divided corporation or a disappearing counterpart corporation to the merger and division (hereinafter referred to as "divided corporation, etc.") calculates the amount of income for the business year in which the registration date of the division falls: <Amended on Dec. 31, 2011>
1. Transfer value received by the divided corporation, etc., from a corporation established through division, etc.;
2. Net book value of assets as on the registration date of the division of a divided corporation, etc.
(2) In applying paragraph (1), with respect to a division which meets each of the following requirements (hereinafter referred to as "qualified division), capital gains or losses on a transfer may be deemed nil, deeming the value referred to in paragraph (1) 1 to be the net book value of assets as of the registration date of the division of a divided corporation, etc.; provided, capital gains or losses on a transfer may be deemed nil, as prescribed by Presidential Decree, although the requirements prescribed in subparagraph 2, 3 or 4 are not met, deeming it as a qualified division, in inevitable circumstances prescribed by Presidential Decree: <Amended on Dec. 31, 2011; Dec. 20, 2016; Dec. 19, 2017; Dec. 24, 2018; Dec. 31, 2024>
1. Where a domestic corporation which has continuously operated business for at least five years as on the registration date of the division is divided upon meeting the following requirements (in cases of a division and merger, a disappearing counterpart corporation to a division and merger or a counterpart corporation to a division and merger shall be a domestic corporation which has continuously operated business for at least one year as on the registration date of the division):(a) That it divides an independent business division which can be operated after division;(b) That the assets and liabilities of a divided business division shall be comprehensively succeeded; provided, those prescribed by Presidential Decree, such as assets and liabilities that are indivisible, including the assets jointly used and the liabilities, the debtor of which cannot be changed, shall be excluded;(c) That it shall be divided upon investment only by a divided corporation, etc.;
2. Where the total costs of a division received from a corporation established through division, etc., by the stockholders of a divided corporation, etc. (in cases of a division and merger, referring to where at least 80/100 of the costs of the division is in stocks of the corporation established through division, etc. or where at least 80/100 of the costs of the division is in stocks of the domestic corporation that holds the total number of outstanding stocks or the total amount of investment of the counterpart corporation to the division and merger) are in stocks, and such stocks are allocated in consideration of the ratio of stocks, etc. held by each stockholder of the divided corporation, etc. and the stockholders of the divided corporation, etc., prescribed by Presidential Decree hold such stocks until the last day of the business year in which the division is registered;
3. Where a corporation established through division, etc., continues to operate the business succeeded to from the divided corporation, etc., until the last day of the business year in which the registration date of the division falls;
4. Where the ratio of the employees transferred to the corporation established through division, etc. to the employees specified by Presidential Decree as employees of the divided business division as at one month before the date of registration of the division is at least 80/100 and the ratio remains unchanged until the last day of the business year in which the division is registered.
(3) Notwithstanding paragraph (2), where a business division prescribed by Presidential Decree, such as a business division mainly engaged in the real estate rental business, is divided, it shall not be deemed a qualified division. <Added on Dec. 22, 2020>
(4) Matters necessary for the calculation of the transfer value and the net book value of assets, the criteria for determining whether a business division is independent and able to operate its business separately, the calculation of the cost of a division, and the criteria for determining whether the business acquired by succession continues under paragraphs (1) or (2), and other matters, shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2014; Dec. 22, 2020>[This Article Wholly Amended on Dec. 30, 2010]