(1) “Donation” in this Article means the amount of money a business entity disburse gratuitously without direct relation to its business (including the amount of money recognized as actual gift through trade prescribed by presidential Decree) <Newly Inserted by Act No. 16104, Dec. 31, 2018>
(2) Special donations as described in subparagraph 1, out of the donations contributed by a business entity in the taxable period and the donations carried over under paragraph (5), shall be included in necessary expenses when calculating the amount of business income for the relevant taxable period within the permissible limit for necessary expenses calculated under subparagraph 2, and the amount exceeding such limit shall not be included in necessary expenses: <Amended Dec. 29, 2020; Dec. 31, 2022>
1. Special donations: any of the following donations:(a) Donations under Article 24 (2) of the Corporate Tax Act;(b) If the business entity volunteers to restore a special disaster area as defined in the Framework Act on the Management of Disasters and Safety, the value of such service. In such cases, the necessary matters concerning the method of calculating the value of the service shall be prescribed by Presidential Decree;
2. The permissible limit for necessary expenses: The amount calculated by the following formula:Permissible limit for necessary expenses = A - BA: The amount of income for the taxable period before the donations are included in necessary expenses (hereafter referred to as "base income amount" in this Article);B: Losses carried forward under Article 45 (hereafter referred to as "losses carried forward" in this Article)(3) General donations as described in subparagraph 1, out of the donations contributed by the business entity in the taxable period and the donations carried over under paragraph (5), shall be included in necessary expenses when calculating the amount of business income for the relevant taxable period within the permissible limit for necessary expenses calculated under subparagraph 2, and the amount exceeding such limit shall not be included in necessary expenses: <Amended on Dec. 29, 2020; Dec. 31, 2022>
1. General donations: Donations as prescribed by Presidential Decree in consideration of public interests, such as social welfare, culture, art, education, religion, charity, and academia (excluding donations described in paragraph (2) 1);
2. The permissible limit for necessary expenses: The amount calculated by the following classification:(a) If donations are contributed to a religious organization:Permissible limit for necessary expenses = [{A ? (B + C)} × 10/100] + [{A ? (B + C)} × the lesser of 20/100 or the total amount of donations contributed to an entity other than religious organizations]A: Base income amount;B: Amount of donations included in necessary expenses under paragraph (2);C: Losses carried forward.(b) If donations are not contributed to a religious organization:Permissible limit for necessary expenses = [A ? (B + C)} × 30/100]A: Base income amount;B: Amount of donations included in necessary expenses under paragraph (2);C: Losses carried forward.
(4) The amount of donations, other than those mentioned in paragraphs (2) 1 and (3) 1, shall not be included in necessary expenses when calculating the amount of business income for the relevant taxable period. <Amended on Dec. 29, 2020>
(5) The amount of special donations and general donations (excluding the amount of donations to which tax deductions were made on the filing of global income tax under Article 59-4 (4)) not included in necessary expenses because it exceeds the permissible limit for necessary expenses as specified in paragraphs (2) 2 and (3) 2, out of the donations contributed by a business entity in the relevant taxable period, may be carried forward and included in necessary expenses in each taxable period ending within ten years from the starting date of the next taxable period of the relevant taxable period, as Prescribed by Presidential Decree. <Newly Inserted on Dec. 31, 2019; Dec. 29, 2020; Dec. 31, 2022>
(6) For the purpose of applying paragraphs (2) and (3), the donations made by a person who falls under?Article 50?(1) 2 or 3 (not being subject to age restrictions, and excluding a person whose donations are subject to the basic deduction of any other resident) shall be included in donations of the relevant business entity.?<Amended by Act No. 10408, Dec. 27, 2010; Act No. 14389, Dec. 20, 2016; Act No. 16104, Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020>
(7) Except as provided in paragraphs (1) through (6), matters necessary for non-inclusion of donations in necessary expenses, such as the calculation of donations, and the management of entities that receive donations, shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 16104, Dec. 31, 2018; Dec. 31, 2019; Dec. 29, 2020>[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]