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 those supplied by December 31, 2026, subparagraphs 4-2, 5, and 9-2 shall apply only to those supplied by December 31, 2028, subparagraphs 8 and 8-2 shall apply only to those for which an implementation agreement was concluded by December 31, 2014, subparagraph 8-3 shall apply only to those for which an implementation agreement was concluded from January 1, 2015, to December 31, 2028, subparagraph 9 shall apply only to those supplied by December 31, 2023, and subparagraph 9-3 shall apply only to those supplied by December 31, 2024. 1. Petroleum products directly supplied to the National Federation of Fisheries Cooperatives established under the 「Sae-maul Undong Law」 for the purpose of self-generation of electricity in island regions certified by the Minister of Climate, Energy, and Environment (including agencies delegated pursuant to Article 98 of the 「Electricity Business 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. Food services falling under any of the following sub-items (limited to meals). In this case, matters necessary for the exemption of value-added tax on entrusted meal services, such as proof of the supply price of entrusted meal services, shall be determined by Presidential Decree. a. Food services supplied within the premises of a factory, mine, construction site, or business place of a passenger motor vehicle transport business operator under the 「Passenger Motor Vehicle Transport Business Act」, which is directly operated by the management for the welfare of its employees. b. Food services received through an entrusted contract prescribed by Presidential Decree for supply to the employees of business operators, provided by a federation composed of passenger motor vehicle transport business operators who have concluded a joint transport agreement under Article 11 of the 「Passenger Motor Vehicle Transport Business Act」. c. Food services supplied within the premises of a school, directly operated by the management for the welfare of students, of a school under Article 2 of the 「Elementary and Secondary Education Act」 and Article 2 of the 「Higher Education Act」. d. Food services directly supplied to a school by a school meal supplier commissioned by the head of a school falling under any subparagraph of Article 4 of the 「School Meal Act」, in accordance with the method of entrusted meal service under Article 15 of the same Act. 3. Services for the agency of agricultural and fishery management and agricultural and fishery operations, as prescribed by Presidential Decree. 4. National housing and housing construction services prescribed by Presidential Decree (including remodeling services prescribed by Presidential Decree). 4-2. General management services, security services, and cleaning services prescribed by Presidential Decree, supplied by a management entity under Article 2 (1) 10 of the 「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 (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 (1) of the 「Public Health Management Act」 (hereinafter referred to as "cleaning business operator" in this Article) to housing, excluding national housing, among apartment housing under Article 2 (3) of the 「Housing Act`, which falls under any of the following categories: a. Housing in towns or villages not classified as urban areas under Article 6 (1) 1 of the 「National Land Planning and Utilization Act」, excluding the Seoul Metropolitan Area. b. Housing, other than that referred to in item a, with a private residential area of not more than 135 square meters per household or per household. 4-3. General management services, security services, and cleaning services prescribed by Presidential Decree, supplied to national housing among apartment housing under Article 2 (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 prescribed by Presidential Decree, supplied to national housing for the elderly of a size less than the national housing size under the 「Housing Act`, by the manager/operator of housing for the elderly under Article 32 (1) 3 of the 「Act on Welfare for the Aged」, 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 (1) of the 「Special Act on Public Housing」. 5. Emission allowances under Article 2 (3) of the 「Framework Act on Greenhouse Gas Emission Trading」, greenhouse gas reduction amounts from external projects under Article 29 (1) of the same Act, and emission reduction credits under Article 29 (3) of the same Act. 6. Goods or services supplied by an organization acting as an agent for government affairs, as prescribed by Presidential Decree. 7. Railway facilities (hereinafter referred to as "railway facilities" in this subparagraph) supplied to the State by the Korea National Railway Corporation, which are transferred to the State and for which the right to manage railway facilities is established under Article 26 of the 「Railway Industry Development Basic Act」. 7-2. Social infrastructure or construction services for social infrastructure under Article 2 (1) of the 「Private Investment Act for Social Infrastructure」, supplied to the State or local governments by a project implementer under Article 2 (8) of the same Act for the purpose of conducting a business exempt from value-added tax, in accordance with the methods under Article 4 (1) through (3) of the same Act. 8. Facility management and operation rights provided to schools for school facilities (limited to facilities of schools under Article 2 of the 「Higher Education Act」 as prescribed by Presidential Decree) constructed by a person recommended by the Minister of Education or a person designated by the Minister of Education, in accordance with the method in Article 4 (1) of the 「Private Investment Act for Social Infrastructure」, and services provided by the recommended person using such school facilities. 8-2. Facility management and operation rights provided to the State and local governments for dormitories constructed by a special purpose corporation established by the Korea Educational Foundation under the 「Korea Educational Foundation Act」 in accordance with the method in Article 4 (1) of the 「Private Investment Act for Social Infrastructure」, and services provided by the corporation using such dormitories. 8-3. Facility management and operation rights provided to the State, local governments, or schools under Article 2 of the 「Higher Education Act」 (hereinafter referred to as "schools" in this subparagraph) for dormitories constructed by the corporations in the following subparagraphs in accordance with the method in Article 4 (1) of the 「Private Investment Act for Social Infrastructure」, and services provided by the corporations using such dormitories. a. Special purpose corporations established by the Korea Educational Foundation under the 「Korea Educational Foundation Act」. b. Special purpose corporations jointly established by the Korea Educational Foundation under the 「Korea Educational Foundation Act」 and schools. 9. Buses used for city bus and village bus transport services under the 「Passenger Motor Vehicle Transport Business 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 (3) or hydrogen electric vehicles under Article 2 (6) of the 「Act on Promotion of Development and Distribution of Environment-Friendly Motor Vehicles」, which meet the requirements of items of Article 2 (2) of the same Act. b. Buses supplied for city bus, rural bus, and village bus transport services under the 「Passenger Motor Vehicle Transport Business Act」 and its Enforcement Decree. 9-3. Automobiles supplied to simplified taxpayers under Article 61 (1) of the 「Value-Added Tax Act」 for personal taxi transport services under the 「Passenger Motor Vehicle Transport Business Act」 and its Enforcement Decree. 10. Goods prescribed by Presidential Decree for the treatment of rare diseases, etc., among goods under Article 91 (4) and (5) of the 「Customs Act」, and medicines under Article 91 (4-2) of the same Act. 11. Disposable diapers and infant formula (including liquid infant formula, but excluding infant formula for which value-added tax is exempted 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 (1) 5, as prescribed by Presidential Decree. 13. Mortgage retirement pension bonds that the Korea Housing Finance Corporation under the 「Korea Housing Finance Corporation Act」 disposes of to exercise its rights under Article 43-4 of the same Act or its recourse rights due to the fulfillment of mortgage retirement pension guarantee obligations.

Deleted <2008.12.26>.

The proviso to Article 61 (1) of the 「Value-Added Tax Act」 shall not apply to personal taxi transport services, road freight transport services, barbershop services, beauty salon services, and other similar businesses prescribed by Presidential Decree to which simplified value-added tax applies.