(1) Where a domestic corporation has its tax base or tax amount corrected upon filing an application pursuant to Article 45-2 of the Framework Act on National Taxes on the ground that the tax base and tax amount were overstated because of its wrongful accounting, which meet each of the following criteria, the overpaid tax shall not be refunded but shall be deducted from the corporate tax for the business year in which the tax amount is corrected and subsequent business years. In such cases, the deductible amount for each business year shall not exceed 20/100 of the overpaid tax, and the overpaid tax that remains after deduction shall be carried over to subsequent business years for deduction: <Amended on Dec. 20, 2016; Oct. 31, 2017>
1. Profits or assets were overstated or deductible expenses or liabilities were understated on a business report submitted pursuant to Article 159 of the Financial Investment Services and Capital Markets Act or an audit report submitted pursuant to Article 23 of the Act on External Audit of Stock Companies;
2. The domestic corporation, its auditor or certified public accountant has been subject to any of the sanctions prescribed by Presidential Decree, such as a warning or caution.
(2) In applying paragraph (1), where a domestic corporation has any tax payable according to a revised return filed pursuant to Article 45 of the Framework Act on National Taxes during any business year before the business year in which a correction is made, in connection with wrongful accounting, the overpaid tax under paragraph (1) shall be first deducted from the tax payable by up to 20/100 of the overpaid tax. <Amended on Dec. 20, 2016>
(3) Where a domestic corporation that has an overpaid tax deducted under paragraphs (1) and (2) has any remainder of the overpaid tax, such remainder shall be disposed of as follows: <Added on Dec. 20, 2016>
1. Where the domestic corporation is dissolved after a merger or division: The surviving corporation or the corporation established through the division (including the counterpart corporation to a division and merger) shall succeed to the remainder of the overpaid tax and shall have the tax deducted in accordance with paragraph (1);
2. Where the domestic corporation is dissolved by any method other than those referred to in subparagraph 1: The head of the tax office having jurisdiction over its place of tax payment or the commissioner of the competent regional tax office shall immediately refund the remainder after deducting the corporate tax payable on liquidation income under Article 77 from the overpaid tax to such domestic corporation.
(4) Detailed methods and procedures relating to tax credits under paragraphs (1) and (3), methods for carryover and deduction of any remainder of an overpaid tax after deduction, and other related matters, shall be prescribed by Presidential Decree. <Amended on Dec. 20, 2016>[This Article Wholly Amended on Dec. 30, 2010]