(1) Where an entrepreneur directly uses or consumes any of the following goods that are produced or acquired in connection with his or her own taxable business (hereafter in this Article referred to as "self-produced or acquired goods") for his or her own tax-free business and business of supplying goods or services that are not subject to VAT (hereinafter referred to as "tax-free business, etc."), it shall be deemed a supply of goods: <Amended on Dec. 31, 2018; Dec. 31, 2023>
1. Goods for which the input tax amount under Article 38 and the input tax amounts under this Act and other statutes are deductible;
2. Goods acquired through a business transfer under paragraph (9) 2, for which the business transferor is entitled to deduct the input tax amount under Article 38 and the input tax amounts under this Act and other statutes;
3. Goods to which the tax rate of zero percent applies because the supply thereof constitutes exportation under Article 21 (2) 3.
(2) Any use or consumption of self-produced or acquired goods, which falls under any of the following, shall be deemed a supply of goods: <Amended on Jan. 1, 2014>
1. Where an entrepreneur uses or consumes self-produced or acquired goods for automobiles under Article 1 (2) 3 of the Individual Consumption Tax Act or for the maintenance of such automobiles, for which the input tax amount is not deductible from the output tax amount under Article 39 (1) 5;
2. Where an entrepreneur running a transportation business, an automobile sales business, or any other type of business prescribed by Presidential Decree uses any goods, among self-produced or acquired goods, that are used for automobiles under Article 1 (2) 3 of the Individual Consumption Tax Act and for the maintenance of such automobiles, for any other purpose without using them directly for business within the relevant type of business.
(3) Where an entrepreneur having at least two places of business releases any goods produced or acquired in connection with his or her own business from one of his or her places of business to another for the purpose of sale, it shall be deemed a supply of goods: Provided, That none of the following cases shall be deemed a supply of goods:
1. Where the entrepreneur releases such goods from one of his or her places of business to another during the taxable period for which he or she is treated as a per-business unit taxable entrepreneur under the latter part of Article 8 (3);
2. Where the entrepreneur releases such goods from one of his or her places of business to another during the taxable period for which he or she is allowed to pay the value-added tax in a lump sum at his or her principal place of business under Article 51: Provided, That this shall not apply where he or she has issued a tax invoice under Article 32 and filed a return with the head of the competent tax office under Article 48 or 49.
(4) Where an entrepreneur uses or consumes self-produced or acquired goods for his or her own personal purposes or other purposes not directly related to his or her business, or where he or she allows his or her employees or other persons to use or consume such goods without any compensation or at less than the market price thereof, it shall be deemed a supply of goods. In such cases, in cases prescribed by Presidential Decree where an entrepreneur supplies goods to his or her employees without any compensation or at less than the market price thereof to reimburse actual expenses or to provide welfare, such supply shall not be deemed a supply of goods. <Amended on Dec. 31, 2018>
(5) Where an entrepreneur donates self-produced or acquired goods to his or her customers or to many unspecified persons (excluding where the price of donated goods is included in the price of the supply of goods which is the main transaction), it shall be deemed a supply of goods: Provided, That the donation made by an entrepreneur for his or her own business, as prescribed by Presidential Decree, shall not be deemed a supply of goods.
(6) Any self-produced or acquired goods left in stock at the time an entrepreneur closes his or her business shall be deemed those supplied to himself or herself. The same shall also apply where an entrepreneur filed an application for business registration prior to the commencement date of the business under the proviso of Article 8 (1), but, it turns out, in fact, did not start the business.
(7) In selling or buying goods on consignment or through an agent, the consignor or the principal shall be deemed to have supplied or received those goods directly: Provided, That when the consignor or the principal is unidentifiable, as prescribed by Presidential Decree, such goods shall be deemed to have been supplied to, or to have been received from, the consignee or agent.
(8) If the status of a trustor is transferred under Article 10 of the Trust Act, the existing trustor shall be deemed to have supplied the trust property to a new trustor: Provided, That in cases prescribed by Presidential Decree in which it is impracticable to deem that a substantial change in the ownership of trust property has occurred, such transfer shall not be deemed a supply of trust property. <Newly Inserted on Dec. 8, 2021>
(9) None of the following cases shall be deemed a supply of goods: <Amended on Jan. 1, 2014; Dec. 19, 2017>
1. Offering any goods as security, which is prescribed by Presidential Decree;
2. Transferring any business, which is prescribed by Presidential Decree: Provided, That this shall exclude where the transferee of the business pays a value-added tax after collecting it from the recipient of the transfer price at the time of payment thereof pursuant to Article 52 (4);
3. Paying any tax in kind pursuant to statutes, which is prescribed by Presidential Decree;
4. Transferring ownership of trust property, which falls under any of the following:(a) Transferring trust property from the trustor to the trustee;(b) Transferring trust property from the trustee to the trustor due to the termination of trust;(c) Transferring trust property to a new trustee due to the change of the trustee.
(10) Except as provided in paragraphs (1) through (9), matters necessary for special cases concerning a supply of goods shall be prescribed by Presidential Decree. <Amended on Dec. 19, 2017>