(1) The total amount of domestic source income of a foreign corporation under Article 91 (1) for each business year shall be the amount calculated by subtracting the total amount of deductible expenses during the relevant business year from the total amount of gross income during the relevant business year, and with regards to the calculation of the amount of income for each business year shall apply mutatis mutandisArticles 14 through 18, 18-2, 19, 19-2, 20 through 31, 33 through 38, 40 through 42, 42-2, 43, 44, 44-2, 44-3, 45, 46, 46-2 through 46-5, 47, 47-2, 50, 51, 52, 53, 53-2, and 54 of this Act and Article 138 of the Act on Restriction on Special Cases concerning Taxation, as prescribed by Presidential Decree; provided, it shall be deemed that a merging corporation or a corporation newly incorporated upon division does not succeed to losses of the merged corporation or divided corporation for the purpose of applying mutatis mutandisArticle 44-3, 45, 46-3, or 46-4. <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 24, 2018; Dec. 31, 2019>
(2) The amount of domestic source income (excluding domestic source income accrued from transfer of real estate, etc. in subparagraph 7 of Article 93) of a foreign corporation falling under Article 91 (2) and (3) for each business year shall be the amount under the following subparagraphs: <Amended on Dec. 31, 2011; Dec. 24, 2018; Dec. 22, 2020>
1. Domestic source income provided in subparagraphs 1 through 6 and 8 through 10 of Article 93 shall be the revenue amount by income provided in each subparagraph (excluding subparagraph 7) of the same Article; provided, the domestic source income according to the following classification may be calculated pursuant to the following:(a) Income from transfer of domestic source securities prescribed in subparagraph 9 of Article 93: An amount computed by deducting the acquisition value and transfer expenses of the relevant securities verified, as prescribed by Presidential Decree, from the revenue;(b) Virtual asset income referred to in subparagraph 10 (k) of Article 93: An amount calculated by deducting the acquisition price, etc. prescribed by Presidential Decree from the amount of income (where a foreign corporation withdraws virtual assets defined in subparagraph 3 of Article 2 of the Act on Reporting and Using Specified Financial Transaction Information (hereinafter referred to as "virtual assets") kept and managed by a virtual asset service provider or similar service provider prescribed in subparagraph 1 of Article 2 of the same Act (hereinafter referred to as "virtual asset service provider, etc."), referring to the amount prescribed by Presidential Decree as the market price of the virtual assets at the time of withdrawal);
2. Where the domestic source income accrued from transfer of securities referred to in subparagraph 9 of Article 93 of a foreign corporation with no domestic place of business meets each of the following conditions, the arm's length price prescribed by Presidential Decree (hereafter in this subparagraph, referred to as "arm's length price") shall be the revenue of the foreign corporation, notwithstanding subparagraph 1 (a):(a) Income accruing from transactions between a foreign corporation with no domestic place of business and a foreign corporation (including non-residents) having a special relationship prescribed by Presidential Decree with the former foreign corporation;(b) Prices of transactions provided in item (a) fall short of the arm's length price in circumstances prescribed by Presidential Decree.
(3) The amount of domestic source income accrued from transfer of real estate, etc. referred to in subparagraph 7 of Article 93 that are the domestic source income of a foreign corporation falling under Article 91 (2) for each business year shall be the amount calculated by subtracting the following amounts from the transfer value of income-generating assets (hereafter in this Article, referred to as "land, etc."): <Amended on Dec. 24, 2018>
1. The acquisition value; provided, where a foreign corporation, to which assets not included in the taxable value of the inheritance tax or gift tax under the Inheritance Tax and Gift Tax Act are contributed, transfers the land, etc. prescribed by Presidential Decree, the acquisition value of such land, etc. by the donator shall be deemed the acquisition value of the foreign corporation;
2. Expenses directly expended to transfer the land, etc.
(4) In applying paragraph (3), the acquisition value and the transfer value shall be based on the actual transaction value, and where the actual transaction value is unclear, such value shall be computed by applying mutatis mutandisArticles 99, 100, and 114 (7) of the Income Tax Act. <Amended on Dec. 24, 2018>
(5) In applying paragraph (3), Article 98 of the Income Tax Act shall apply mutatis mutandis to the timing for transfer or acquisition of the relevant assets.
(6) Article 101 of the Income Tax Act shall apply mutatis mutandis to any unfair calculation of domestic source income accrued from transfer of real estate, etc. specified in paragraph (3). In such cases, "a related party" shall be construed as "a related party provided in subparagraph 12 of Article 2 of the Corporate Tax Act." <Amended on Dec. 31, 2011; Dec. 24, 2018>
(7) In calculating the income of amount related to the domestic place of business of a foreign corporation for each business year, matter necessary for distributing deductible expenses to the headquarters or other branch offices in foreign countries shall be prescribed by Presidential Decree. <Added on Dec. 24, 2018>[This Article Wholly Amended on Dec. 30, 2010]