(1) “Business promotion expenses” in this Article (including the amount of money, prescribed by Presidential Decree, paid by a business entity for welfare facilities to an association or body organized by employees) means the amount of money disbursed by a business entity for treat, good relationship, or compensation, or for other purpose similar thereto, regardless of causes, to proceed smoothly its affairs with a person directly or indirectly related to the entity. <Amended by Act No. 16104, Dec. 31, 2018; Dec. 31, 2022>
(2) Business promotion expenses which exceed the amount prescribed by Presidential Decree and do not fall under any of the following cases, out of the business promotion expenses disbursed by a business entity for one occasion of entertainment, shall not be included in necessary expenses when calculating the amount of income generated in each taxable period: Provided, That this shall not apply to the expenses prescribed by Presidential Decree disbursed in a foreign region and those disbursed to farmers and fishermen where it is difficult to secure evidentiary materials which can prove any of the following business promotion expenses and disbursement of which is objectively self-evident: <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11873, Jun. 7, 2013; Act No. 15225, Dec. 19, 2017; Act No. 16104, Dec. 31, 2018; Dec. 31, 2019; Dec. 31, 2022>
1. Business promotion expenses disbursed by using any of the following means (hereafter referred to as "credit card, etc." in this Article):(a) A credit card prescribed in the Specialized Credit Finance Business Act (including those prescribed by Presidential Decree, as those similar to a credit card; hereinafter the same shall apply);(b) Cash receipts prescribed in Article 160-2 (2) 4;
2. Business promotion expenses disbursed after receiving an invoice under Article 163 of this Act or Article 121 of the Corporate Tax Act or a tax invoice under Articles 32 and 35 of the Value-Added Tax Act;
3. Business promotion expenses paid by issuing a purchaser-issued invoice under Article 163-3 or a purchaser-issued tax invoice under Article 34-2 (2) of the Value-Added Tax Act;
4. Business promotion expenses paid by being issued a withholding tax receipt prescribed by Presidential Decree.
(3) Such amount exceeding the total of the sums referred to in the following subparagraphs which as belongs to business promotion expenses (excluding the amount not included in necessary expenses pursuant to paragraph (2)) paid by a business entity for the relevant taxable period, shall not be included in necessary expenses when calculating the amount of income for such taxable period: <Amended by Act No. <Amended by Act No. 11146, Jan. 1, 2012; Act No. 11611, Jan. 1, 2013; Act No. 12852, Dec. 23, 2014; Act No. 16104, Dec. 31, 2018; Dec. 31, 2019; Dec 29, 2020; Dec. 31, 2022>
1. The basic limit: The amount calculated by the following formula:The basic limit amount = A × B × 1/12A: 12 million won (36 million won, in the case of a small or medium enterprise as defined in Article 6 (1) of the Act on Restriction on Special Cases concerning Taxation);B: The number of months in the taxable period (the number of months shall be determined by the calendar, with days less than one month counting as one month)2. The limit by amount of income: The amount calculated by applying the applicable rate set forth in the following table to the total amount of income (only referring to the amount of income prescribed by Presidential Decree) generated from the relevant business for the relevant taxable period: Provided, That in case of the amount of income generated in transactions with a specially related person prescribed by Presidential Decree, the aforesaid amount shall be replaced by the amount equivalent to 10/100 of the amount calculated by applying the applicable rate set forth in the following table:(4) In applying paragraph (2) 1, where a sales slip, etc. is issued in the name of any member store other than the member store of credit cards, etc. that provides goods or services, the amount of such disbursement shall not be deemed business promotion expenses under paragraph (2) 1. <Amended by Act No. 16104, Dec. 31, 2018; Dec. 31, 2022>
(5) Matter necessary for the extent and calculation of business promotion expenses, and the keeping of certificates of disbursement thereof shall be prescribed by Presidential Decree. <Amended by Act No. 16104, Dec. 31, 2018; Dec. 31, 2022>[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009][Title Amended on Dec. 31, 2022]