Article 104-31 (Income Deduction for Project Finance Investment Company)

Where a company, which is an investment company similar to those referred to in Subparagraph 1 through 9 of Article 51-2(1) of the Corporate Tax Act and meets all the following requirements, distributes 90 percent or more of its distributable profits (hereinafter referred to as "distributable profits" in this Article) as prescribed by Presidential Decree for a business year ending on or before December 31, 2028, the amount of such distribution (hereinafter referred to as "distributed amount" in this Article) shall be deducted from the income amount for the business year subject to the appropriation of surplus that resolved such distribution. <Amended by Dec. 31, 2022, Dec. 23, 2025> 1. The company shall be one that operates its assets for facility investments, social overhead capital facility investments, resource development, or other specific projects requiring a considerable period and funds, and distributes the profits to its shareholders. 2. The company shall not establish a business office other than its head office and shall not have employees or full-time executives. 3. The company shall be a temporary entity with a period of existence of two years or more. 4. The company shall be a stock company established by the method of promoter's incorporation pursuant to the Commercial Act or other laws. 5. Promoters shall not fall under any of the subparagraphs of Article 4(2) of the Corporate Restructuring Investment Company Act and shall meet the requirements prescribed by Presidential Decree. 6. Directors shall not fall under any of the subparagraphs of Article 12 of the Corporate Restructuring Investment Company Act. 7. Auditors shall be compliant with Article 17 of the Corporate Restructuring Investment Company Act. In this case, "Corporate Restructuring Investment Company" shall be deemed "company." 8. The company shall meet the requirements prescribed by Presidential Decree concerning the scale of capital, entrustment of asset management and fund management services, and establishment notification.

When applying Paragraph ①, if the distributed amount for a business year first exceeds the amount remaining after deducting the carryover losses (hereinafter referred to as "carryover losses" in this Article) under Subparagraph 1 of Article 13(1) of the Corporate Tax Act from the income amount for that business year, the excess amount may be carried over to subsequent business years ending within five years from the commencement of the business year following the business year to which it was carried over, and deducted from the income amount of those carried-over business years. However, if a domestic corporation does not distribute 90 percent or more of its distributable profits in a business year to which it was carried over, the carried-over amount shall not be deducted. <Newly added by Dec. 31, 2022, Dec. 31, 2024>

When deducting the amount carried over pursuant to the main sentence of Paragraph ③ and the main sentence of Paragraph ④ (hereinafter referred to as "carried-over deduction distributed amount" in this Article) from the income amount for a business year, the deduction shall be made according to the following methods. <Newly added by Dec. 31, 2022, Dec. 31, 2024> 1. The carried-over deduction distributed amount shall be deducted before the distributed amount for the business year. 2. If there are two or more carried-over deduction distributed amounts, the one that occurred first shall be deducted first.