Article 106 (Exemption from Value-Added Tax, etc.)

Value-added tax shall be exempted for the supply of goods or services falling under any of the following subparagraphs. In this case, subparagraphs 1 through 3, 4.5, and 12 shall apply only to supplies made by December 31, 2026, subparagraphs 4.2, 5, and 9.2 shall apply only to supplies made by December 31, 2028, subparagraphs 8 and 8.2 shall apply only to those for which an agreement for implementation was concluded by December 31, 2014, subparagraph 8.3 shall apply only to those for which an agreement for implementation was concluded between January 1, 2015 and December 31, 2028, subparagraph 9 shall apply only to supplies made by December 31, 2023, and subparagraph 9.3 shall apply only to supplies made by December 31, 2024. <Amended by 1999.4.30, 1999.8.31, 1999.12.28, 2000.12.29, 2001.5.24, 2002.8.26, 2003.5.29, 2003.12.30, 2004.7.26, 2004.12.31, 2005.12.31, 2006.12.30, 2007.12.31, 2008.2.29, 2008.12.26, 2010.1.1, 2010.12.27, 2011.12.31, 2013.1.1, 2013.3.23, 2013.6.7, 2014.1.1, 2014.12.23, 2015.8.11, 2015.8.28, 2015.12.15, 2016.1.19, 2016.2.3, 2016.12.20, 2017.12.19, 2018.12.24, 2019.12.31, 2020.6.9, 2020.12.29, 2021.12.28, 2022.12.31, 2023.12.31, 2025.10.1, 2025.12.23> 1. Petroleum products supplied directly to the National Federation of Fisheries Cooperatives established under the 「Fisheries Cooperatives Act」 for the purpose of self-generation of electricity in island regions certified by the Minister of Climate, Energy and Environment (including agencies delegated under Article 98 of the same Act) where an electricity business operator under Article 2 of the 「Electricity Business Act」 cannot supply electricity or where electricity supply is difficult for a considerable period. 2. Meal services falling under any of the following items (limited to meals). In this case, matters necessary for the exemption of value-added tax on commissioned meals, such as proof of the supply price of commissioned meals, shall be determined by Presidential Decree. a. Meal services supplied within the premises of a factory, mine, construction site, or business establishment of a carrier by road for passengers under the 「Passenger Transport Service Act」, by the management of such establishment for the welfare of its employees. b. Meal services supplied through a commissioned contract, as determined by Presidential Decree, for the purpose of providing services to the employees of its business operators, by a union composed of carriers by road for passengers under a joint transport agreement concluded under Article 11 of the 「Passenger Transport Service Act」. c. Meal services supplied within the premises of a school by the management of a school under Article 2 of the 「Elementary and Secondary Education Act」 and Article 2 of the 「Higher Education Act」, for the purpose of the welfare of students. d. Meal services directly supplied to a school by a school meal supplier commissioned by the head of a school falling under any of the subparagraphs of Article 4 of the 「School Meal Act」, in the method of commissioned meals under Article 15 of the same Act. 3. Services for the management of farming and fishing businesses and farming and fishing operations, as determined by Presidential Decree. 4. National housing and housing construction services (including remodeling services as determined by Presidential Decree), as determined by Presidential Decree. 4.2. General management services, security services, and cleaning services as determined by Presidential Decree, supplied by a management entity under Article 2, Paragraph 1, Subparagraph 10 of the 「Joint Housing Management Act」 (excluding item (a) of the same subparagraph; hereinafter referred to as "management entity" in this Article), a corporation licensed for security business under Article 4, Paragraph 1 of the 「Security Business Act」 (hereinafter referred to as "security business operator" in this Article), or a person who has reported building sanitation management business under Article 3, Paragraph 1 of the 「Public Health Management Act」 (hereinafter referred to as "cleaning business operator" in this Article), to housing other than national housing among housing defined in Article 2, Subparagraph 3 of the 「Housing Act」, which falls under the following items: a. Housing in an eup or myeon area that is not an urban area under Article 6, Subparagraph 1 of the 「Act on Planning and Utilization of National Land」, excluding the Seoul Metropolitan Area. b. Housing, other than that in item (a), with a residential exclusive use area of not more than 135 square meters per household or per household. 4.3. General management services, security services, and cleaning services as determined by Presidential Decree, supplied to national housing among housing defined in Article 2, Subparagraph 3 of the 「Housing Act」, by a management entity, security business operator, or cleaning business operator. 4.4. General management services, security services, and cleaning services as determined by Presidential Decree, supplied to housing for the elderly for the elderly, which is of a size not exceeding the national housing size under the 「Housing Act」, by the manager or operator of housing for the elderly under Article 32, Paragraph 1, Subparagraph 3 of the 「Welfare of the Aged Act」 (hereinafter referred to as "housing for the elderly" in this subparagraph), a security business operator, and a cleaning business operator. 4.5. Heating services supplied to rental housing constructed for permanent rental purposes under Article 50-2, Paragraph 1 of the 「Act on Public Rental Housing」. 5. Emission allowances under Article 2, Subparagraph 3 of the 「Act on Allocation and Trading of Greenhouse Gas Emissions」, greenhouse gas reduction amounts from external projects under Article 29, Paragraph 1 of the same Act, and emission reduction credits under Paragraph 3 of the same Article. 6. Goods or services supplied by an organization that acts as an agent for government business, as determined by Presidential Decree, which are determined by Presidential Decree. 7. Railway facilities supplied by the Korea National Railway under the 「Korea National Railway Corporation Act」 to the State, in a manner where the railway facilities under Article 3, Subparagraph 2 of the 「Railroad Industry Development Basic Act」 (hereinafter referred to as "railway facilities" in this subparagraph) are reverted to the State and the right to manage railway facilities is established under Article 26 of the same Act. 7.2. Social infrastructure or social infrastructure construction services under Article 2, Subparagraph 1 of the 「Act on Private Investment in Social Infrastructure」, supplied by a project implementer under Article 2, Subparagraph 8 of the same Act to the State or a local government, in a manner specified in Article 4, Subparagraphs 1 through 3 of the same Act, for the purpose of conducting business exempt from value-added tax. 8. Facility management and operation rights provided by a school to school facilities (limited to facilities of schools under Article 2 of the 「Higher Education Act」, as determined by Presidential Decree) constructed by a person recommended by the Minister of Education or by a person designated by the Minister of Education, in a manner that applies Article 4, Subparagraph 1 of the 「Act on Private Investment in Social Infrastructure」, and services provided by the recommended person utilizing those school facilities. 8.2. Facility management and operation rights provided by the State and local governments to dormitories constructed by a special purpose corporation established by the Korea Foundation for the Advancement of Science and Technology under the 「Korea Foundation for the Advancement of Science and Technology Act」, in a manner that applies Article 4, Subparagraph 1 of the 「Act on Private Investment in Social Infrastructure」, and services provided by the corporation utilizing those dormitories. 8.3. Facility management and operation rights provided by the State, local governments, or schools under Article 2 of the 「Higher Education Act」 (hereinafter referred to as "schools" in this subparagraph) to dormitories constructed by the following corporations, in a manner that applies Article 4, Subparagraph 1 of the 「Act on Private Investment in Social Infrastructure」, and services provided by the corporations utilizing those dormitories. a. A special purpose corporation established by the Korea Foundation for the Advancement of Science and Technology under the 「Korea Foundation for the Advancement of Science and Technology Act」. b. A special purpose corporation jointly established by the Korea Foundation for the Advancement of Science and Technology under the 「Korea Foundation for the Advancement of Science and Technology Act」 and a school. 9. Buses used for city bus and village bus transportation services under the 「Passenger Transport Service Act」 and its Enforcement Decree, which use natural gas as fuel. 9.2. Buses that meet all of the following requirements: a. Electric vehicles under Article 2, Subparagraph 3 of the 「Act on Promotion of Development and Distribution of Environment-Friendly Motor Vehicles」 or fuel cell vehicles under Article 2, Subparagraph 6 of the same Act, that meet the requirements of the items of Article 2, Subparagraph 2 of the same Act. b. Buses supplied for city bus, rural bus, and village bus transportation services under the 「Passenger Transport Service Act」 and its Enforcement Decree. 9.3. Automobiles supplied to simplified taxpayers under Article 61, Paragraph 1 of the 「Value-Added Tax Act」 for private taxi transportation services under the 「Passenger Transport Service Act」 and its Enforcement Decree. 10. Goods under Article 91, Subparagraphs 4 and 5 of the 「Customs Act」, as determined by Presidential Decree, for the treatment of rare diseases, etc., and medicines under Article 91, Subparagraph 4.2 of the same Act. 11. Disposable diapers and powdered milk for infants and toddlers (including powdered milk in liquid form, but excluding powdered milk exempt from value-added tax under Article 26 of the 「Value-Added Tax Act」). 12. Wood pellets supplied for heating or for agricultural and forestry purposes to farmers or forestry workers under Article 105, Paragraph 1, Subparagraph 5, as determined by Presidential Decree. 13. Residential mortgage annuity bonds collateral housing to be disposed of by the Korea Housing Finance Corporation under the 「Korea Housing Finance Corporation Act」 for the purpose of exercising claims related to housing mortgage annuity bonds under Article 43-4 of the same Act or exercising recourse claims due to the fulfillment of guarantees on housing mortgage annuity bonds.

Deleted <2008.12.26>.

With respect to private taxi transportation business, road freight transportation business as determined by Presidential Decree, barber services, beauty services, and other similar businesses as determined by Presidential Decree, to which simplified value-added tax applies, the proviso to Article 61, Paragraph 1 of the 「Value-Added Tax Act」 shall not apply. <Amended by 2010.1.1, 2013.6.7, 2016.12.20, 2024.12.31>