Value-added Tax Act — Article 40 (Pro Rata of Common Input Tax Amounts)

Where an entrepreneur runs both a taxable business and a tax-free business, etc., an input tax amount related to the taxable business, tax-free business, etc. shall be calculated based on the actual attribution; and an input tax amount for which the actual attribution is not clear (hereinafter referred to as "common input tax amount") shall be calculated on a pro rata basis, as prescribed by Presidential Decree, by applying the criteria prescribed by Presidential Decree (hereinafter referred to as "pro rata criteria for common input tax amount") including the ratio of the value of tax-free supplies to the total value of supplies.