Article 38 (Scope of Earned Income)

Earned income under Article 20 of the Act shall include the following income. <Amended by Act No. 13058, Dec. 30, 1995, Act No. 13483, Dec. 31, 1996, Act No. 13722, Dec. 31, 1997, Act No. 13942, Apr. 1, 1998, Act No. 14305, Dec. 31, 1998, Act No. 14671, Dec. 31, 1999, Act No. 15234, Dec. 29, 2000, Act No. 15271, Jan. 29, 2001, Act No. 15507, Dec. 31, 2001, Act No. 15753, Dec. 30, 2002, Act No. 16172, Dec. 30, 2003, Act No. 17526, Feb. 19, 2005, Act No. 17689, Aug. 19, 2005, Act No. 17726, Feb. 9, 2006, Act No. 18314, Feb. 28, 2007, Act No. 18664, Feb. 22, 2008, Act No. 18671, Feb. 29, 2008, Act No. 19145, Feb. 4, 2009, Act No. 19874, Feb. 18, 2010, Act No. 20890, Jul. 24, 2012, Act No. 21363, Feb. 15, 2013, Act No. 21994, Feb. 21, 2014, Act No. 24357, Feb. 3, 2017, Act No. 25275, Feb. 12, 2019, Act No. 25640, Feb. 11, 2020, Act No. 26281, Feb. 17, 2021, Act No. 27002, Feb. 28, 2025> 1. Remuneration received under the title of confidential expense (including official expenses; hereinafter the same shall apply), entertainment expenses, or other similar titles, which cannot be clearly identified as having been used for business purposes. 2. Allowances received by employees such as merit pay, condolence money, congratulatory money for opening a business, tuition fees, scholarships (including tuition fees and scholarships received by the employee's children while studying from the employer), or other allowances of a similar nature. 3. Allowances such as labor allowance, family allowance, wartime allowance, cost-of-living allowance, transaction allowance, duty allowance, or other allowances of a similar nature. 4. Collection allowances received by employees of insurance companies, dealers or brokers in securities under the 「Capital Markets and Financial Investment Business Act」, etc., and remuneration received for soliciting insurance policies, securities transactions, or savings, or other remuneration of a similar nature. 5. Allowances such as meal allowance, housing allowance, clothing allowance, or other allowances of a similar nature. 6. Benefits derived from receiving housing. 7. Benefits derived by an employee from receiving funds for purchasing or leasing a house (including land appurtenant to the house) at a low interest rate or free of charge. 8. Allowances such as technical allowance, health allowance, and research allowance, or other allowances of a similar nature. 9. Allowances such as overtime allowance, commuting allowance, perfect attendance allowance, special merit pay, or other allowances of a similar nature. 10. Annual or monthly remuneration received under the title of travel expenses. 11. Allowances such as remote area allowance, overseas duty allowance, or other allowances of a similar nature. 12. Premiums, trust contributions, or mutual aid contributions borne by the employer in relation to insurance, trusts, or mutual aid contracts where the employee is the contractor or the insured, or the beneficiary is the employee, their spouse, or other family members. a. Deleted <Dec. 29, 2000> b. Deleted <Feb. 17, 2021> c. Deleted <Feb. 15, 2013> d. Deleted <Feb. 15, 2013> e. Deleted <Feb. 17, 2021> f. Deleted <Feb. 4, 2009> 13. Severance pay received without being included in expenses according to Article 44(4) of the Enforcement Decree of the 「Corporate Tax Act」. 14. Vacation pay or other remuneration of a similar nature. 15. Deleted <Feb. 15, 2013> 16. Refund from a group refund guaranteed insurance policy attributable to the employee upon expiration or maturity of the contract period. 17. Income derived by an executive, etc. of a corporation from exercising a stock option granted by the corporation or a corporation specially related to the corporation under Article 2(8) of the Enforcement Decree of the 「Corporate Tax Act」 (hereinafter referred to as 'the relevant corporation, etc.') during the period of employment with the relevant corporation, etc. (meaning the difference between the market price at the time of exercising the stock option and the actual purchase price; stocks include the right to subscribe to new shares). 18. Deleted <Feb. 22, 2008> 19. Position allowance paid to public officials according to the 「Regulations on Public Officials' Allowances, etc.」, the 「Regulations on Local Public Officials' Allowances, etc.」, the Enforcement Decree of the 「Act on the Remuneration of Prosecutors」, Supreme Court Rules, Constitutional Court Rules, etc. 20. Bonuses and prizes received by public officials from the state or local governments in connection with the performance of their duties.

The method of supporting executives, etc. to provide or purchase at a price lower than the market price, pursuant to Article 20(1)6 of the Act, shall be as follows. <Newly enacted by Act No. 27002, Feb. 28, 2025> 1. A method of selling or providing goods or services produced or supplied by a business operator or corporation (hereinafter referred to as 'its own products, etc.' in this Article) to executives, etc. at a price lower than the market price. 2. A method of providing financial support to executives, etc. by a business operator or corporation to purchase or receive its own products, etc. 3. A method of providing financial support to executives, etc. by a business operator or corporation to purchase or receive goods or services produced or supplied by an affiliated company of the business operator or corporation (meaning an affiliated company under the 「Fair Trade Act」; hereinafter the same shall apply in this Paragraph) (hereinafter referred to as 'affiliated company products, etc.' in this Article). 4. A method where an affiliated company of a business operator or corporation sells or provides affiliated company products, etc. to executives, etc. of the business operator or corporation at a price lower than the market price, and the business operator or corporation pays the difference between the sales or provision price and the market price to the affiliated company.