ARTICLE 85-2 (Refund Due to Carryback of Net Operating Losses of Small and Medium-sized Enterprises)

If a resident who operates a small or medium-sized enterprise, as defined in Article 6(1) of the Restriction of Special Taxation Act, incurs a net operating loss (excluding a net operating loss incurred from real estate leasing business; hereinafter the same in this Article) calculated in the business income amount of that small or medium-sized enterprise for the relevant tax period, as prescribed in Article 45(3), the resident may apply for a refund of the amount calculated as prescribed by Presidential Decree (hereinafter referred to as "loss carryback tax amount"), limited to the comprehensive income tax amount imposed on the business income of that small or medium-sized enterprise for the immediately preceding tax period. In this case, when applying Article 45(3) to the net operating loss carried back, it shall be deemed to have been deducted by the amount of the deduction. <Amended by Dec. 31, 2019, Dec. 29, 2020>

When the head of the competent tax office receives an application for a refund of income tax under paragraph ②, he/she shall determine the refund amount without delay and refund it in accordance with Articles 51 and 52 of the Framework Act on National Taxes.

If a person who has received a refund of income tax under paragraph ③ falls under any of the following subparagraphs, the head of the competent tax office shall collect the refunded tax amount (in cases of subparagraphs 1 and 2, the amount of the excessively refunded tax) and the amount equivalent to interest thereon as income tax for the tax period in which the net operating loss was incurred, as prescribed by Presidential Decree. <Amended by Jan. 1, 2012, Jan. 1, 2013, Dec. 31, 2019> 1. When the net operating loss has been reduced due to the revision of the taxable income and tax amount for income tax for the tax period in which the net operating loss was incurred. 2. When the refunded tax amount has been reduced due to the revision of the comprehensive income taxable income and tax amount for the tax period immediately preceding the tax period in which the net operating loss was incurred. 3. When a refund has been received without meeting the requirements for small and medium-sized enterprises under paragraph ①.