(1) Where a business entity acquires assets of the same kind as a replacement for destroyed tangible assets with insurance money received due to the destruction of or damage to the tangible assets, or improves the tangible assets acquired as a replacement or damaged assets, the amount equivalent to gains on insurance settlement used for the acquisition or improvement of such assets, of the value of the relevant assets, may be included in necessary expenses when calculating the amount of income generated in the taxable period to which the date he/she receives insurance money belongs, as prescribed by Presidential Decree. <Amended on Dec. 31, 2019>
(2) Where he/she is unable to acquire or improve the relevant assets pursuant to paragraph (1) in the taxable period to which the date he/she receives insurance money belongs, paragraph (1) shall apply mutatis mutandis to only such assets acquired or imported within two years from the date of commencement of the taxable period following such taxable period.
(3) Any person who intends to include the amount equivalent to gains on insurance settlement in necessary expenses pursuant to paragraph (2) shall submit a plan for use of such insurance money received to the head of a tax office having jurisdiction over the place for tax payment, as prescribed by Presidential Decree. <Amended on Dec. 31, 2019>
(4) If any person who counts the amount equivalent to gains on insurance settlement in necessary expenses pursuant to paragraph (2) falls under any of the following subparagraphs, such amount shall be included in the total amount of income in the taxable period when the relevant cause thereof has taken place: <Amended on Dec. 31, 2019>
1. Where he/she fails to use the amount equivalent to gains on insurance settlement within the deadline to acquire or improve assets under paragraph (1);
2. Where he/she discontinues the relevant business in the period under paragraph (2).[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009][Title Amended on Dec. 31, 2019]