Income Tax Act Article 24-1

Revenues received by a profit-seeking enterprise from interest on government bonds, corporate bonds, and financial bonds shall be calculated in accordance with the bonds’ holding periods, face values and interest rates.The tax on interest revenues, as mentioned in the preceding paragraph and calculated in accordance with the prescribed withholding rates, shall be deducted from the amount of income tax payable on the annual income tax return of a profit-seeking enterprise.The gains or losses derived from securities transactions whereby a profit-seeking enterprise purchases bonds as described in the first paragraph between two interest payment days and then sells them before the next interest payment day shall be the net amount of the sale price minus the purchase price and interest revenues.Beginning January 1, 2010, the interest derived from a repo (RP/RS) trade whereby a profit-seeking enterprise purchases securities or short-term commercial papers as described in the first paragraph and Paragraphs 2 and 3 in the preceding Article shall be the net amount of the sale price at their maturity in excess of the original purchase price. The interest shall be withheld in accordance with Article 88 and added to the amount of income of the profit-seeking enterprise, and the amount of such withholding tax shall be deducted from the amount of income tax payable for the annual income tax return of the profit-seeking enterprise.