Article 106-2 (Reduction and Exemption of Value-Added Tax, etc. on Petroleum for Agricultural, Forestry, Fishery Purposes and Coastal Passenger Ships)

Where a petroleum retailer, such as a gas station, prescribed by Presidential Decree (hereinafter referred to as "petroleum retailer" in this Article) has supplied petroleum subject to value-added tax, excise tax, traffic, energy, and environment tax, education tax, and automobile tax, and the petroleum supplied to farmers, etc. falls under any of the subparagraphs of paragraph (1), the petroleum retailer may apply for a refund of the exempted tax amount or deduct it from the tax to be paid or collected, as prescribed by Presidential Decree. <Amended by Act No. 10718, May 19, 2011; Act No. 11136, Dec. 31, 2011>

In order to receive tax-exempt petroleum, farmers, etc. shall obtain a tax-exempt petroleum purchase card or a release order (hereinafter referred to as "tax-exempt petroleum purchase card, etc." in this Article) from the cooperatives managing tax-exempt petroleum, as prescribed by Presidential Decree.

Cooperatives managing tax-exempt petroleum shall issue tax-exempt petroleum purchase cards, etc. considering the possession status of agricultural machinery, etc., and the scale of farming, forestry, or fishery management by farmers, etc.

The central cooperatives managing tax-exempt petroleum and the cooperatives managing tax-exempt petroleum (hereinafter referred to as "tax-exempt petroleum management institutions" in this Article) may disclose the supply details of tax-exempt petroleum to farmers, etc. on the homepage of the tax-exempt petroleum management institutions.

Where farmers, etc. fall under any of the following subparagraphs, those farmers, etc. (including their spouses and lineal ascendants and descendants who live with them and are jointly engaged in production activities) shall be prohibited from using tax-exempt petroleum for two years from the date the tax-exempt petroleum management institution becomes aware of the fact (one year in the case of subparagraph 3; and until the date of payment of the retrospective collection amount under paragraph (9) in the case of subparagraph 4, if the retrospective collection amount under paragraph (9) is not paid by the date two years have passed). However, if farmers, etc. are unable to file a change report under paragraph (3) or fail to submit the documents under paragraph (5), subparagraph 1 (b) and paragraph (5), subparagraph 2 by the final submission deadline due to natural disasters or other reasons prescribed by Presidential Decree, they may use tax-exempt petroleum as prescribed by Presidential Decree. <Amended by Act No. 10623, Dec. 27, 2010; Act No. 12843, Dec. 23, 2014; Act No. 17872, Dec. 31, 2019; Act No. 17343, Jun. 9, 2020> 1. Where a report under paragraph (3) is made falsely or by other fraudulent means, or a change report is not filed. 2. Where a tax-exempt petroleum purchase card, etc. issued under paragraph (4) or petroleum supplied with such card is transferred to another person. 3. Where the documents under paragraph (5), subparagraph 1 (b) and paragraph (5), subparagraph 2 are not submitted by the final submission deadline or are submitted falsely. 4. Where a reason for retrospective collection of the tax reduction and exemption amount under paragraph (9) arises.

Where a person who is not a farmer, etc. obtains a tax-exempt petroleum purchase card, etc. under paragraph (4), or a farmer, etc. or a person who is not a farmer, etc. acquires a tax-exempt petroleum purchase card, etc. or petroleum supplied with such card from a farmer, etc., or where the refunded or deducted tax amount applied for by a petroleum retailer under paragraph (2) exceeds the amount that should have been applied for, the aggregate amount calculated according to the following subparagraphs shall be collected as 추징 (retrospective collection), as prescribed by Presidential Decree. <Amended by Act No. 10623, Dec. 27, 2010; Act No. 11136, Dec. 31, 2011; Act No. 17872, Dec. 31, 2019> 1. Where a tax-exempt petroleum purchase card, etc. is issued by the cooperatives managing tax-exempt petroleum or acquired from farmers, etc.: The aggregate amount of the following items a. The amount equivalent to the tax reduction and exemption for value-added tax, excise tax, traffic, energy, and environment tax, education tax, and automobile tax when petroleum is supplied with a tax-exempt petroleum purchase card, etc. at the time of issuance or acquisition. b. An additional tax equivalent to 40/100 of the amount of tax reduction and exemption under item (a). 2. Where petroleum supplied with a tax-exempt petroleum purchase card, etc. from farmers, etc. is acquired: The aggregate amount of the following items a. The amount of tax reduction and exemption for the relevant petroleum, including value-added tax, excise tax, traffic, energy, and environment tax, education tax, and automobile tax. b. An additional tax equivalent to 40/100 of the amount of tax reduction and exemption under item (a). 3. Where the refunded or deducted tax amount applied for by a petroleum retailer under paragraph (2) exceeds the amount that should have been applied for: The aggregate amount of the following items. However, item (b) shall apply only in cases of fraudulent application. a. The amount of tax reduction and exemption for the relevant petroleum, including value-added tax, excise tax, traffic, energy, and environment tax, education tax, and automobile tax. b. An additional tax equivalent to 40/100 of the amount of tax reduction and exemption under item (a).

Paragraph (13) shall apply to persons related to a petroleum retailer for whom a reason for retrospective collection of the tax reduction and exemption amount has arisen, as prescribed in the following subparagraphs. However, this shall not apply if the acquirer (excluding persons with a special relationship with the petroleum retailer as prescribed by Presidential Decree) or the corporation proves that they were unaware that the reason for retrospective collection of the tax reduction and exemption amount for the former petroleum retailer had arisen. <Amended by Act No. 12843, Dec. 23, 2014> 1. In the case of death of a petroleum retailer, the heir. 2. In the case of transfer of all of the petroleum retailing business by a petroleum retailer, the acquirer. 3. In the case of merger of a corporate petroleum retailer with another petroleum retailer, the surviving corporation or the corporation established by the merger.

The central cooperatives managing tax-exempt petroleum shall manage the issuance and use of tax-exempt petroleum purchase cards, etc. within the scope of the annual limit of petroleum under paragraph (15) (hereinafter referred to as "tax-exempt petroleum limit" in this paragraph). If tax-exempt petroleum purchase cards, etc. are issued and petroleum under subparagraph 1 of paragraph (1) is supplied exceeding the tax-exempt petroleum limit, the tax reduction and exemption amount, including value-added tax, excise tax, traffic, energy, and environment tax, and automobile tax, shall be collected from the central cooperatives managing tax-exempt petroleum, as prescribed by Presidential Decree, as if the central cooperatives managing tax-exempt petroleum received the supply of the excess petroleum. <Amended by Act No. 11136, Dec. 31, 2011; Act No. 17872, Dec. 31, 2019>

Where cooperatives managing tax-exempt petroleum become aware of the occurrence of reasons for retrospective collection of tax reduction and exemption amounts or additional taxes under paragraphs (9), (11), and (12), or where farmers, etc. are imposed a monetary penalty in lieu of a restriction or suspension of their business, etc. under the 「Fisheries Act」, etc., they shall immediately suspend the issuance and use of tax-exempt petroleum purchase cards, etc. and promptly notify the competent tax office of such fact. <Amended by Act No. 13721, Dec. 15, 2015>

For the efficient performance of tax-exempt petroleum management work, tax-exempt petroleum management institutions may request the following data from administrative agencies, etc., and administrative agencies, etc. that have received such requests shall submit the requested data to the tax-exempt petroleum management institutions unless there is a justifiable reason. <Amended by Act No. 12843, Dec. 23, 2014; Act No. 17872, Dec. 31, 2019> 1. Data concerning the death of farmers, etc. under Article 9 of the 「Act on the Registration and Management of Family Relations」. 2. Data concerning the change of address report by farmers, etc. under Article 16 of the 「Resident Registration Act」. 3. Data related to vessel positions from vessel position transmitting devices under Article 5-2 of the 「Fishing Vessel Act」. 4. Data concerning the payment status of retrospective collection amounts under paragraph (9). 5. Computerized data of cargo vehicles owned by farmers, etc. under Article 69 of the 「Automotive Management Act」 (data related to new registration, transfer registration, change registration, and cancellation registration of automobiles, including automobile registration number, owner's name, and resident registration number).

Matters necessary for the procedures for supplying and managing tax-exempt petroleum, methods for issuing and using tax-exempt petroleum purchase cards, etc., and procedures for retrospective collection of tax reduction and exemption amounts and amounts equivalent to tax reduction and exemption and additional taxes, pursuant to paragraphs (1) through (20), shall be prescribed by Presidential Decree. <Amended by Act No. 16094, Dec. 24, 2018; Act No. 18601, Dec. 28, 2021>