2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposing corporate tax on the Plaintiff on November 2, 2015 exceeds KRW 119,912,596 of the disposition of imposition of KRW 173,758,891 of the year 2013 and the disposition of imposing KRW 221,580,280 of the disposition of imposition of KRW 221,580 of the year 2014 is revoked, respectively.

A. On May 8, 2013, the Plaintiff was recognized as a profit-making domestic corporation that operates the clothing manufacturing business, etc. as a "research and development department" by the Minister of Science, ICT and Future Planning pursuant to Article 14-2 of the former Basic Research Promotion and Technology Development Support Act (amended by Act No. 13211, Mar. 11, 2015; hereinafter referred to as the "Basic Research Promotion Act").

B. A sample, Mayer’s work conducted in the instant development room is to produce a sample sample sample and a final sample sample (hereinafter referred to as a “dych sample sample, etc.”) in accordance with the design original design and work order of a brand company (hereinafter referred to as a “ brand company”) that mainly sells Maych owner, etc. (see attached Table 1; hereinafter referred to as “the sample work in this case”).

C. From May 8, 2013 to December 31, 2013, the Plaintiff: (a) applied Article 10(1)3 (b) of the former Restriction of Special Taxation Act (amended by Act No. 12173, Jan. 1, 2014; hereinafter the same shall apply) and Article 10(1)3 (b) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 2514, Dec. 1, 2014; hereinafter the same shall apply) to the personnel expenses for ten employees of the instant development room from January 1, 2014 to December 31, 2014; (b) the amount equivalent to 25% of the total amount of the material expenses; and (c) the sample expenses used for the instant work; and (d) the amount equivalent to 112,96,244 won (hereinafter referred to as “instant amount”).

D. Upon conducting a tax investigation with the Plaintiff on September 2015, the Defendant: (a) determined that the issue amount of the instant case is not “expenses for the development of high-class designs, such as Article 8 and [Attachment Table 6] Paragraph (1) (g) of the former Enforcement Decree of the Restriction of Special Taxation Act; and (b) determined the tax base and tax amount without recognizing the tax credit; and (c) imposed corporate tax on the Plaintiff on November 2, 2015, KRW 207,236,020 for corporate tax year 2013, and KRW 266,848,570 for year 2014.

E. On February 3, 2016, the Plaintiff filed an appeal with the Tax Tribunal. On August 31, 2016, the Tax Tribunal reviewed whether the issue amount in the instant case constitutes “self-research and development expenses” under Article 8 and [Attachment Table 6](1)(a) of the former Enforcement Decree of the Restriction of Special Taxation Act, and also rendered an adjudication to partially approve the Plaintiff to include relevant interest paid to overseas corporations in deductible expenses, excluding credit sales from the provisional payment, and to rectify the relevant tax base and tax amount.

F. On September 13, 2016, the Defendant corrected corporate tax against the Plaintiff at KRW 173,758,891, and KRW 221,580,289, each of the dispositions issued on November 2, 2014 (hereinafter “each of the dispositions issued on November 2, 2015”) with respect to the foregoing credit sales (hereinafter “each of the dispositions issued on each of the instant dispositions”). However, upon re-audit, the Defendant determined that the issue amount in the instant case does not fall under the self-research costs under Article 8 and Article 1(a) of the Enforcement Decree of the former Enforcement Decree of the Restriction of Special Taxation Act, and received the results of re-audit from the Plaintiff on October 20, 2016, by notifying the Plaintiff and receiving it on October 25, 2016.

[Reasons for Recognition] Facts without dispute, Gap 1-16 (including branch numbers if there are serial numbers; hereinafter the same shall apply) 1-4, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. Summary of the Plaintiff’s assertion

(1) A requirement for tax credit

㈎ 원고는 다운점퍼와 관련하여 다수의 특허를 보유한 법인으로, 이 사건 개발실의 직원들은 브랜드 회사가 외형디자인을 제공하면 직접 패턴을 연구하여 기능디자인이 포함된 시제품을 개발하고 있다. 따라서 이 사건 쟁점금액은 구 조세특례제한법 시행령 제8조, [별표 6] 제1항 사목이 정한 '고유디자인의 개발을 위한 비용'에 해당하여 연구・인력개발비 세액공제의 대상이 되어야 한다.

㈏ 원고는 미래창조과학부장관으로부터 인정받은 연구개발 전담부서를 운영하면서이 사건 쟁점금액을 지출하였는바, 피고가 이 사건 쟁점금액을 임의로 부인하는 것은 미래창조과학부장관의 권한을 침해하는 것이다. 나아가 이 사건 개발실의 직원들은 브랜드 회사의 외형디자인을 토대로 원고가 특허를 받은 다운을 주입하는 등 신제품을 연구‧개발하였으므로, 이 사건 쟁점금액은 구 조세특례제한법 시행령 제8조, [별표 6]제1항 가목이 정한 '자체연구개발' 비용에 해당하여 연구・인력개발비 세액공제의 대상이 되어야 한다.

(2) Violation of the principle of trust protection.

The Plaintiff, upon the Defendant’s request, filed an application for tax credit of the key amount of the instant case through sufficient discussions with the Defendant, such as adjustment of development costs in 2014, excluding part of personnel expenses for the year 2013, but each of the instant dispositions that the Defendant did not recognize the tax credit unilaterally thereafter is illegal.

B. Relevant statutes

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

(1) Whether the key issue amount in this case is subject to tax credit for research and human resources development expenses

㈎ 관련 법리

Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring any special circumstance, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it accords with the principle of fair taxation with the principle of fair taxation (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 2009). The fact that personnel expenses subject to tax are non-taxable or tax-exempt is subject to tax exemption (see, e.g., Supreme Court Decision 94Nu12708, Apr. 26, 1996).

㈏ 이 사건 작업이 고유디자인의 개발에 해당하는지

1) According to Article 2 subparagraph 1 of the Design Protection Act, a design refers to the shape, pattern, or color of a product, or a combination thereof, which causes aesthetic sense through time. According to Article 2 of the Industrial Design Promotion Act, an industrial design refers to creation and improvement activities (including technological development activities for creation and improvement) to satisfy physical and psychological needs of producers and consumers by minimizing the aesthetic, functional, and economic value of a product, service, etc. and the result thereof, including product design, packaging design, environmental design, visual design, service design, etc.

According to Article 9(5) of the Restriction of Special Taxation Act and Article 8(1) of the Enforcement Decree of the same Act, research and development refers to activities to achieve scientific or technical development and to develop a new service and service delivery system. According to Article 8(1)(g) of the attached Table 6 of the Enforcement Decree of the Restriction of Special Taxation Act, the development of proper design is included in the above research and development. However, research activities entrusted under Article 8(2)(7) of the Enforcement Decree of the same Act

Although there is no provision directly and specifically defining "development of a listed design" under Article 8 and Article 8 [Attachment 6] Paragraph (1) (g) of the former Enforcement Decree of the Restriction of Special Taxation Act, the purpose and system of the former Restriction of Special Taxation Act and the Design Protection Act, it is reasonable to interpret that "development of a listed design" is the only case where the shape, pattern, color, or combination of the goods is not publicly known or performed domestically or abroad, and it can be evaluated that the taxpayer has developed the design directly.

2) In full view of the above evidence and the following circumstances that can be recognized by the purport of the entire pleadings, it is insufficient to readily conclude that the instant work was sufficiently proven that the instant work constituted a requirement for tax credit as a “development of high-class design” by only the evidence submitted by the Plaintiff, and there is no other obvious evidence to acknowledge it otherwise.

① The instant work basically results in creating sampling, etc. with the Plaintiff’s design, original design, work order, etc. provided from brand companies. Employees of the instant development room are in exclusive charge of producing sampling, etc. by each brand company, and it appears that the Plaintiff did not produce sampling, etc. independently without a brand designer’s instructions (the Plaintiff did not assert or prove it). Therefore, it is difficult to view the design of sampling, etc. based on the original design prepared by the brand company designer as “the Plaintiff’s own design.”

② In the production of the above sampling, etc., there is room to regard the Plaintiff as using the patented technology prior to 2013, and as using the technology developed by the Plaintiff in the process of foundation and processing. However, brand companies are likely to instruct and examine not only the external design of sampling pattern, etc., but also the detailed work details such as the original, scam, injecting volume, work methods, etc., as well as the Plaintiff’s instruction and examination, and determine whether to use the sample pattern, etc., which is ultimately made by the Plaintiff. It is difficult to readily conclude that the Plaintiff engaged in the act of developing the sample pattern, etc., different from that entrusted by the brand company ( there is no specific and objective material to recognize that the Plaintiff, in the process of producing the sample pattern, etc., was developing the new sample pattern production method beyond the instructions of the brand company). Accordingly, from a functional point of view, it is insufficient to recognize that the instant work is the Plaintiff’s inherent development act of the Plaintiff, and there is no other obvious evidence to acknowledge it.

③ According to the reinvestigation report according to the review decision of the Tax Tribunal, the Plaintiff is unable to exercise exclusive rights to completed sampling, etc. (right to claim ownership and usage fees) and all rights related to the design are deemed to have been held by brand companies. In this respect, it is difficult to view sampling, etc. produced by the Plaintiff as “the Plaintiff’s own design.”

㈏ 이 사건 작업이 '자체연구개발'에 해당하는지

1) “Research and development activities” under Article 2 subparag. 5 of the former Enforcement Decree of the Basic Research Act (amended by Presidential Decree No. 26356, Jun. 30, 2015; hereinafter the same) refers to systematic and creative activities that utilize accumulated creative knowledge in order to accumulate knowledge in science and technology or knowledge services or to find a new application method, and refers to all processes prior to commercialization, such as design, production and testing of prototypes to develop new products and processes, development of new service and service delivery system, etc.

According to Article 9(5) of the Restriction of Special Taxation Act and Article 8(1) of the Enforcement Decree of the same Act, research and development refers to activities to achieve scientific or technical development and to develop new service and service delivery system, human resources development refers to activities to educate and train executives or employees employed by a national. Research and human resources development refers to expenses specified in attached Table 6, which are expenses for research and development and human resources development. [Attachment Table 6] paragraph(1) of the attached Table 6, self-research and development expenses refer to personnel expenses for employees of research institutes or departments prescribed by Ordinance of the Ministry of Strategy and Finance for research and development or cultural industry promotion, etc. prescribed by Ordinance of the Ministry of Strategy and Finance, expenses for purchasing samples, raw materials and reagents, and facilities directly used for research and experimental purposes in a dedicated department, etc. In addition, according to Article 7(1)1 of the Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Strategy and Finance No. 406, Mar. 14, 2014).

On the other hand, according to Article 8 (2) of the former Enforcement Decree of the Restriction of Special Taxation Act, general management and support activities (title 1), daily quality tests (title 2), research activities (title 7), etc. are not included in research and development activities under paragraph (1).

In full view of the circumstances such as the granting of a certain amount of money to the corporate tax in the pertinent taxable year for the purpose of encouraging corporate development (see, e.g., Supreme Court Decision 9Du8718, Jan. 19, 2001) to deduct a certain amount of money from corporate tax for the pertinent taxable year (see, e.g., Supreme Court Decision 9Du8718, Jan. 19, 2001) and the granting of preferential provision under Article 8(1) of the former Restriction of Special Taxation Act, the cost under [Attachment 6] Article 9(5) shall be first required to be "expenses for research and development and human resources development" under Article 9(5), it shall be interpreted that the provision on tax credit shall apply to the personnel expenses, etc., even if a researcher working in a department exclusively in charge of research and development, and further, it

Therefore, even though a dedicated department for research and development recognized by the former Basic Research Act is a dedicated department for research and development, it is reasonable to view that the expenses related to the research and development can be deducted from corporate tax only in cases where it actually takes exclusive charge of research and development affairs, and that it does not recognize tax credits on the ground that it does not have exclusive responsibility

2) Furthermore, although there is no provision directly and specifically defining “self-research and development” under Article 8 and [Attachment 6](1)(a) of the former Enforcement Decree of the Restriction of Special Taxation Act, it is reasonable to interpret that “self-research and development” as a systematic and creative activity for the development of new products and manufacturing process without being entrusted by taxpayers.

However, in full view of the following circumstances that can be recognized by the aforementioned evidence and the purport of the entire pleadings, the evidence alone presented by the Plaintiff cannot be deemed as sufficiently proven that the instant work constitutes the Plaintiff’s self-research and development requirement, and there is no other obvious evidence to acknowledge otherwise.

① As seen earlier, the instant work is deemed to have produced sampling, etc. by receiving design design, work instructions, etc. from brand companies, and brand companies may direct and examine not only the external design of sampling, etc., but also the detailed work details such as the original body, gyms, injecting volume, work methods, etc., and finally determine whether to use sampling, etc., and it is difficult to evaluate that the Plaintiff directly developed new products or processes.

② Although the Plaintiff may recognize the fact that five patents were granted in relation to the production, etc. of the Danpoferer prior to 2013, even if the Plaintiff produced a sample sample pattern, etc. using the patented technology for the production of the Danpoferer, it can be evaluated as “use of the existing Danpoper Production Technology”, and there is no specific and objective data that the Plaintiff may recognize that the Plaintiff was performing research and development of new Danpoferer Production Technology by itself.

③ According to the “Survey on Research and Development Activities” submitted by the Plaintiff, the Plaintiff performed the research task called “20% reduction in the rate of No. 20%” in 2013, “5% reduction in the rate of material cost due to the optimal straw,” “3D multi-level internship development” in 2014, and according to the “research activity status”, the Plaintiff conducted various research and development projects and application for the enhancement of productivity and functionality in the production of No. 100, and there is room to regard such activities to achieve technical progress. However, the employees of the Development Center of this case appear not to have been in exclusive charge of the above research and development activities, but to have been in charge of the production of No. 100, each brand company’s sampling, etc. as seen earlier, it is difficult to view that the production of No. 2019 was included in the research and development task of the Plaintiff itself (including the production of No. 3D multi-level pattern, etc. as above). Therefore, it is difficult to recognize that the instant amount of research was used “research’s.”

(2) Whether the principle of trust protection is violated

㈎ 관련 법리

In general, in order to apply the principle of trust protection to the tax authority's acts in tax law relations, the tax authority should name the public opinion list that is the subject of taxpayer's trust, and the taxpayer's trust in the name of the tax authority should not be attributable to the taxpayer. The taxpayer must trust the name of the opinion list and engage in the act in which the taxpayer trusts the name of the opinion list, and make a disposition contrary to the opinion list by the tax authority against the opinion list, thereby infringing the taxpayer's interest (see, e.g., Supreme Court Decision 2003Du7620, Apr. 27, 2006).

The principle of trust and good faith, the principle of protection of trust, or the principle of respect for non-taxable practices, is exceptional legal principles applicable only in exceptional cases where there are special circumstances deemed that the protection of taxpayer's trust is consistent with the justice even if they sacrifice the principle of legality. Therefore, in order to apply the principle of trust and good faith or the principle of protection of trust to a tax authority's act, the average taxpayer's trust given by the tax authority through the public opinion list, etc. should have a reasonable and justifiable expectation. Even if the tax authority expressed a certain opinion through inquiry, if it is followed by questioning without revealing the important facts and legal issues properly, it cannot be deemed that there is a trust given to the legitimate expectation by the public opinion list (see Supreme Court Decision 2011Du5940, Dec. 26, 2013).

㈏ 검토

In light of the above facts and legal issues as to whether the issue amount of this case constitutes research and development expenses subject to the tax credit, the evidence presented by the Plaintiff alone presented a public opinion as to the fact that the Defendant’s act subject to the tax credit constitutes research and development expenses subject to the tax credit, or that it is difficult to view that the Plaintiff had a legitimate trust based on the above facts and there is no other obvious evidence to acknowledge otherwise.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

director of the former Restriction of Special Taxation Act (amended by Act No. 12173, Jan. 1, 2014)

Article 10 (Tax Credit for Research and Human Resources Development Expenses)

(1) Where a national has a research and human resources development expenses for each taxable year, the total of the following amounts shall be deducted from income tax (limited to income tax on business income) or corporate tax for the relevant taxable year. In such cases, subparagraphs 1 and 2 shall apply only to the relevant research and human resources development expenses incurred until December 31, 2015: < Amended by Act No. 10406, Dec. 27, 2010; Act No. 11133, Dec. 31, 20

1. An amount calculated by multiplying the research and development expenses for new growth engine industries prescribed by Presidential Decree (hereafter in this Article, referred to as the "research and development expenses for new growth engine industries") by 20/100 (30/100 in the case of a small or medium enterprise) of the research and development expenses for new growth engine industries incurred in the relevant taxable year;

2. With respect to research and development expenses incurred in obtaining source technology prescribed by Presidential Decree (hereafter in this Article, referred to as "research and development expenses for source technology"), an amount calculated by multiplying the research and development expenses for source technology incurred for the relevant taxable year by 20/100 (30/100 in the case of a small or medium enterprise).

3. In cases of research and human resources development expenses (hereafter referred to as "general research and human resources development expenses" in this Article) of a national who does not fall under subparagraphs 1 and 2 or who does not select subparagraphs 1 and 2: Provided, That where no general research and human resources development expenses have been incurred for four years retroactively from the commencing date of the relevant taxable year, or the general research and human resources development expenses incurred for the immediately preceding taxable year are less than the annual average amount of the general research and human resources development expenses incurred for four years retroactively from the commencing date of the relevant taxable year, an amount equivalent to item

(a) Where the general research and human resources development expenses incurred for the relevant taxable year exceed the general research and human resources development expenses incurred for the immediately preceding taxable year, an amount equivalent to 40/100 (50/100 in cases of a small or medium enterprise) of such excessive amount;

(b) An amount calculated by multiplying the general research and human resources development expenses incurred for the relevant taxable year by the ratio classified as follows:

(a) In cases of small and medium enterprises: 25/100;

2. Where a small or medium enterprise ceases to be a small or medium enterprise for the first time, as prescribed by Presidential Decree: The following rates:

(a) Until the taxable year ending within three years after the beginning of the taxable year in which he/she ceases to be a small or medium enterprise for the first time: 15/100;

(b) Within two years after the end of the period referred to in (a): 10/100;

(iii) Where a middle-standing enterprise prescribed by Presidential Decree does not fall under (ii): 8/100;

(d) Where a person does not fall under any of subparagraphs (i) through (iii): The ratio (which shall not exceed 6/100) calculated by the following formula:

3/100 + Ratio of general research and human resources development expenses to the revenue amount for the relevant taxable year ¡¿ 1/2

(2) The classification and calculation of annual average of research and human resources development expenses for four years under paragraph (1) 3 and other necessary matters shall be prescribed by Presidential Decree.

(3) A national who intends to have paragraph (1) applied shall apply for tax credit, as prescribed by Presidential Decree.

(4) A national who intends to be governed by paragraph (1) 1 and 2 shall keep separate accounts of general research and human resources development expenses, research and development expenses for new growth engines, and research and development expenses for original technology, as prescribed by Presidential Decree.

[Specialized Amendment, January 1, 2010]

director of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015)

Article 9 (Inclusion of Research and Human Resources Development Reserve in Expenses)

(1) Where a national has accumulated reserves for research and human resources development to appropriate them for expenses necessary for research and human resources development (hereinafter referred to as "research and human resources development") until the taxable year which is completed on or before December 31, 2013, the relevant amount shall be included in deductible expenses when calculating the amount of income for the relevant taxable year within the scope of the amount calculated by multiplying the amount of income for the relevant taxable year (referring to turnover calculated pursuant to corporate accounting standards under Article 43 of the Corporate Tax Act; hereafter the same shall apply in Article 10) by 3/10. < Amended by Act No. 1

(2) The reserves for research and human resources development included in deductible expenses pursuant to paragraph (1) shall be included in gross income according to the following subparagraphs:

1. Where reserves equivalent to the amount used for expenses prescribed by Presidential Decree (hereinafter referred to as "research and human resources development expenses") among the expenses incurred in research and human resources development (in cases of research and development for the development of a new service and service delivery system, limited to expenses necessary for research and human resources development) until the end of the taxable year to which the date on which three years have passed after the completion date of the taxable year to which the relevant reserves have been included in the deductible expenses belongs, an amount calculated by dividing the reserves by 36, by the number of months in the relevant taxable year shall be included in the gross income when the amount of income in each

2. Where the reserve included in the calculation of losses exceeds the amount to be included in the calculation of gross income pursuant to subparagraph 1, the reserve equivalent to the exceeding portion shall be included in the calculation of gross income in the calculation of the amount of income in the taxable year including the day on which three years elapse after the end of the taxable year where the reserve is included in the calculation of losses: Provided, That the amount which is no longer used for research and human resources development due to the change in the business plan, etc. after the reserve

(3) If a national who has been included in deductible expenses pursuant to paragraph (1) falls under any of the following cases, the full amount of reserves for research and human resources development not included in gross income shall be included in gross income when calculating his/her income for the taxable year in which such cause occurs

1. When the relevant business is discontinued;

2. When a corporation is dissolved: Provided, That the same shall not apply when a merged corporation, a corporation newly established due to a merger or division (including a division and merger), or a counterpart corporation to a division and merger succeeds to the relevant reserves for research and human resources development;

(4) Where reserves for research and human resources development are included in gross income pursuant to paragraph (2) 2 or (3), an additional amount equivalent to the reserves not used for research and human resources development among the relevant reserves shall be paid as income tax or corporate tax when a tax base return for the relevant taxable year is filed, as prescribed by Presidential Decree, and the relevant amount of tax shall be deemed the amount of tax payable pursuant to Article 76 of the Income Tax Act

(5) The term "research and development" under paragraph (1) means activities for achieving scientific or technical development and for developing a new service and service delivery system, "human resources development" means activities for educating and training executives or employees employed by a national, and the detailed scope thereof shall be prescribed by Presidential Decree. < Amended by Act No. 11121, Dec. 31, 201

(6) A national who intends to be governed by paragraph (1) shall submit a detailed statement of research and human resources development plans, as prescribed by Presidential Decree.

[Specialized Amendment, January 1, 2010]

Article 10 (Tax Credit for Research and Human Resources Development Expenses)

(1) Where a national has a research and human resources development expenses for each taxable year, the total of the following amounts shall be deducted from the income tax (limited to the income tax on business income) or corporate tax for the relevant taxable year. In such cases, subparagraphs 1 and 2 shall apply only to the relevant research and human resources development expenses incurred until December 31, 2015: < Amended by Act No. 10406, Dec. 27, 2010; Act No. 11133, Dec. 31, 201; Act No. 11614, Jan. 1, 2013; Act No

1. With respect to research and development expenses for new growth engine industries prescribed by Presidential Decree (hereafter in this Article, referred to as "research and development expenses for new growth engine industries"), an amount calculated by multiplying the research and development expenses for new growth engine industries incurred in the relevant taxable year by 20/100 (30/100 in the case of a small or medium enterprise);

2. With respect to research and development expenses for acquiring source technology prescribed by Presidential Decree (hereafter in this Article, referred to as "research and development expenses for source technology"), an amount calculated by multiplying the research and development expenses for source technology incurred for the relevant taxable year by 20/100 (30/100 in the case of a small or medium enterprise).

3. In cases of research and human resources development expenses (hereafter referred to as "general research and human resources development expenses" in this Article) of a national who does not fall under subparagraphs 1 and 2 or does not select subparagraphs 1 and 2: Provided, That where no general research and human resources development expenses have been incurred for four years retroactively from the commencing date of the relevant taxable year, or the general research and human resources development expenses incurred for the immediately preceding taxable year are less than the annual average amount of the general research and human resources development expenses incurred for four years retroactively from the commencing date of the relevant taxable year, an amount falling under item

(a) Where the general research and human resources development expenses incurred in the relevant taxable year exceed the general research and human resources development expenses incurred in the immediately preceding taxable year, an amount equivalent to 40/100 (50/100 in cases of a small or medium enterprise) of the excess amount;

(b) An amount calculated by multiplying the general research and human resources development expenses incurred for the relevant taxable year by the ratio classified as follows:

(a) In cases of small and medium enterprises: 25/100;

Expenses subject to tax credit for research and human resources development expenses (related to Article 8 (1))

1. Research and development (a) self-research and development;

1. Personnel expenses for employees of a research institute or a dedicated department (hereinafter referred to as "dedicated department, etc.") prescribed by Ordinance of the Ministry of Strategy and Finance to promote research and development, cultural industries, etc.: Provided, That the following personnel expenses shall be excluded herefrom:

(a) An amount equivalent to the retirement income under Article 22 of the Income Tax Act;

(b) Reserves for severance and retirement benefits under Article 29 of the Income Tax Act or Article 33 of the Corporate Tax Act;

C) Bonuses, etc. under each subparagraph of Article 20 (1) of the Enforcement Decree of the Corporate Tax Act;

2) Costs for purchasing samples, parts, raw materials, and reagents used for research at a dedicated department, etc. (including cost for external processing required for pilot production)

3) Expenses incurred in the lease of facilities for research and test (referring to facilities under Article 10 (1); hereinafter the same shall apply) to be used directly by a dedicated department, etc. or in the use of facilities for research and test by an institution specified in item (b) (i

(g) Expenses for the development of proper designs;

2. Where a small or medium enterprise ceases to be a small or medium enterprise for the first time, as prescribed by Presidential Decree: The following rates:

(a) Until the taxable year ending within three years after the beginning of the taxable year in which he/she ceases to be a small or medium enterprise for the first time: 15/100;

(b) Within two years after the end of the period referred to in (a): 10/100;

(iii) Where a middle-standing enterprise prescribed by Presidential Decree does not fall under (ii): 8/100;

(d) Where a person does not fall under any of subparagraphs (i) through (iii): The ratio (which shall not exceed 3/100) calculated by the following formula:

2/100 + Ratio of general research and human resources development expenses to the revenue amount for the relevant taxable year ¡¿ 1/2

(2) The classification and calculation of annual average of research and human resources development expenses for four years under paragraph (1) 3 and other necessary matters shall be prescribed by Presidential Decree.

(3) A national who intends to have paragraph (1) applied shall apply for tax credit, as prescribed by Presidential Decree.

(4) A national who intends to be governed by paragraph (1) 1 and 2 shall keep separate accounts of general research and human resources development expenses, research and development expenses for new growth engines, and research and development expenses for original technology, as prescribed by Presidential Decree.

[Specialized Amendment, January 1, 2010]

director of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 25211, Feb. 21, 2014)

[Attachment 6]

(1) Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26070, Feb. 3, 2015)

Article 8 (Scope, etc. of Reserves for Research and Human Resources Development)

(1) "Expenses prescribed by Presidential Decree" in Article 9 (2) 1 of the Act means expenses for research and development and human resources development under Article 9 (5) of the Act, as provided for in attached Table 6: Provided, That the following expenses shall be excluded: < Amended by Presidential Decree No. 23592, Feb. 2, 2012; Presidential Decree No.

1. The amount disbursed as research and development expenses after receiving contributions, etc. for research and development under Article 10-2 of the Act;

2. Amount disbursed as research and development expenses after receiving contributions, etc. from the State, local governments, public institutions under the Act on the Management of Public Institutions, and local public enterprises under the Local Public Enterprises Act for the purpose of research and development, etc.

(2) Research and development under paragraph (1) shall not include the following: < Amended by Act No. 11362, Feb. 2, 2012>

1. General management and support activities;

2. Market surveys, promotional activities and daily quality tests;

3. Cumulative collection of information.

4. Survey and analysis of management or efficiency of business;

5. Application for and protection of patent rights and other legal and administrative services;

6. Surveying and exploring the quantity, location, etc. of resources, such as minerals;

7. Research activities conducted under entrustment;

(3) "Additional amount equivalent to interest calculated, as prescribed by Presidential Decree" in Article 9 (4) of the Act means an amount calculated by multiplying the amount under subparagraph 1 by the period under subparagraph 2 and the ratio under subparagraph 3:

1. The amount calculated by subtracting the amount of income tax or corporate tax calculated by including the reserves in the deductible expenses from the amount of income tax or corporate tax calculated without including the reserves in the deductible expenses for the taxable year where reserves for research and human resources development are included;

2. The period from the commencing day of the taxable year following that wherein it has been included in deductible expenses to the ending day of the taxable year included in gross income

3. 3/10,000 per day.

(4) A national who intends to be governed by Article 9 (1) of the Act shall submit a detailed statement of research and human resources development reserve prescribed by Ordinance of the Ministry of Strategy and Finance, along with a tax base return.

Article 9 (Tax Credit for Research and Manpower Development Expenses)

(1) Research and development expenses in the field of new growth engine industries prescribed by Presidential Decree under Article 10 (1) 1 of the Act means any of the following expenses (hereafter in this Article, referred to as "research and development expenses for new growth engine"): Provided, That the expenses falling under any subparagraph of Article 8 (1) shall be excluded: < Amended by Presidential Decree No. 23592, Feb. 2, 2012; Presidential Decree

1. Personnel expenses for researchers engaged in the research and development of technology subject to the research and development by the field of new growth engine industry (hereafter in this Article, referred to as "research and development works for new growth engine industry") and other persons directly supporting such research and development affairs at the research institutes or dedicated departments prescribed by Ordinance of the Ministry of Strategy and Finance: Provided, That personnel expenses for persons

2. Costs for purchasing samples, parts, raw materials, and reagents used for the research and development of new growth engine industries;

(2) Research and development expenses for acquiring source technology prescribed by Presidential Decree under Article 10 (1) 2 of the Act means any of the following expenses (hereafter referred to as "research and development expenses for source technology" in this Article): Provided, That expenses falling under any subparagraph of Article 8 (1) shall be excluded: < Amended by Presidential Decree No. 23592, Feb. 2, 2012; Presidential Decree No. 24368, Feb

1. Personnel expenses for researchers engaged in the research and development of technology subject to original technology by field (hereafter referred to as "research and development of technology at source" in this Article) and other persons directly supporting such research and development affairs at research institutes or dedicated departments prescribed by Ordinance of the Ministry of Strategy and Finance: Provided, That personnel expenses for persons prescribed by Ordinance of the Ministry of Strategy

2. Where a small or medium enterprise becomes no longer a small or medium enterprise for the first time, as prescribed by Presidential Decree, as prescribed in Article 10 (1) 3 (b) of the Act, the term "in cases of samples, parts, raw materials, and reagents used for research and development of original technology" means cases where the taxable year to which the date on which the cause for which the small or medium enterprise ceases to be a small or medium enterprise arises and three taxable years following the lapse of the taxable year,

Newly Inserted by Act No. 1042, Dec. 30, 2010>

(4) "Large-standing enterprises prescribed by Presidential Decree" in Article 10 (1) 3 (b) of the Act means enterprises that meet all of the following requirements:

1. It shall not be a small or medium enterprise;

2. He/she shall engage in a type of business referred to in Article 2 (1) as its main business;

3. It shall not belong to an enterprise group subject to limitations on mutual investment under Article 14 (1) of the Monopoly Regulation and Fair Trade Act.

4. It shall be an enterprise whose average turnover for the immediately preceding three taxable years (the method of calculating the turnover shall be the same as the method of calculating the turnover under the proviso to the part other than the subparagraphs of Article 2 (1) and paragraph (4) of the same Article, and in cases of turnover for a taxable year less than one year, the turnover converted into turnover for a year shall be 500

(5) The annual average of the expenses incurred for general research and human resources development for four years pursuant to Article 10 (2) of the Act shall be the amount calculated according to the following formula: < Amended by Presidential Decree No. 23602, Feb. 2, 2012; Presidential Decree No. 24378, Feb. 15, 2013>

(6) In calculating the total amount of general research and human resources development expenses incurred for four years retroactively from the commencing date of the relevant taxable year in the calculation formula under paragraph (5), where a merged corporation, a corporation established through division, a counterpart corporation to a merger through division, a corporation acquiring a business, or a corporation invested in kind as determined by Ordinance of the Ministry of Strategy and Finance (hereafter in this paragraph, referred to as a "merged corporation, etc.") is a merged corporation, divided, divided, divided, business transfer, or an investment in kind as determined by Ordinance of the Ministry of Strategy and Finance (hereafter in this paragraph, referred to as a "merger, etc."): Provided, That where part of the business operated by a merged corporation, etc. is succeeded, the general research and human resources development expenses incurred from the merged corporation, etc., a divided corporation, a transferor of business, or an investor in kind (hereafter in this paragraph, referred to as an

Division cost of the Gu

1. Research and development (a) self-research and development;

1. Personnel expenses of employees working for a research institute or a dedicated department (hereinafter referred to as "dedicated department, etc.") prescribed by Ordinance of the Ministry of Strategy and Finance for the promotion, etc. of research and development, or of persons prescribed by Ordinance of the Ministry of Strategy and Finance who engage in research and development service business:

(a) An amount equivalent to the retirement income under Article 22 of the Income Tax Act;

(b) Reserves for severance and retirement benefits under Article 29 of the Income Tax Act or Article 33 of the Corporate Tax Act;

C) Bonuses, etc. under each subparagraph of Article 20 (1) of the Enforcement Decree of the Corporate Tax Act;

2) Samples, parts, and raw materials used by dedicated departments, etc. and research and development service business operators for research purposes.

Fees and expenses for purchasing reagents (including expenses for external processing required for pilot production)

3) An amount calculated by multiplying the ratio of the sales revenue of the business succeeded to each business year to the total sales revenue and the ratio of the asset value of the business succeeded to each business year to the total asset value, whichever is larger, shall be deemed general research and human resources development expenses incurred in the extinguished corporation, etc. < Amended by Presidential Decree No. 22580, Dec. 30, 2010; Presidential Decree No. 24375, Feb.

(7) In applying the formula for calculation under paragraph (5), the number of months shall be calculated based on the calendar, and where the month in which the commencing date of a taxable year falls short of one month, it shall be deemed one month, and where the month in which the closing date of a taxable year falls short of one month, it shall not be included. < Amended by Presidential Decree No. 22580, Dec. 30, 2010>

(8) A national who intends to be subject to Article 10 (1) 1 and 2 of the Act shall keep separate accounts of research and development expenses for new growth engines, research and development expenses for original technology, and general research and human resources development expenses. In such cases, where research and development expenses for new growth engines or research and development expenses for original technology are common with general research and human resources development expenses, the total amount of the relevant expenses shall be general research and human resources development expenses. < Amended by Presidential Decree No. 22580, Dec. 30,

(9) Where a national intends to be governed by Article 10 (1) of the Act, he/she shall submit evidentiary documents, such as stocks, etc., specifications of research and human resources development expenses, and research and development plan, to the head of the tax office having jurisdiction over the place of tax payment.

(10) A deliberative committee on the research and development of new growth engines and original technology may be established under the control of the Minister of Strategy and Finance to deliberate on whether research and development expenses paid by a national correspond to the research and development expenses for new growth engines and original technology.

(11) Matters necessary for the composition, operation, etc. of the Deliberation Committee on Research and Development of New Growth Power Industry and Raw Technology under paragraph (10) shall be determined by the Minister of Strategy and Finance.

[Specialized Amendment : February 18, 2010]

[Attachment 6]

(g) Expenses incurred in the lease of facilities for research and test by an institution prescribed in Article 10 (1); hereinafter the same shall apply) or for the use of facilities for research and test by an institution prescribed in item (b) (i);

(1) Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Strategy and Finance No. 406 on March 14, 2014)

Article 7 (Scope of Research and Human Resources Development Expenses)

(1) The term "research institutes or dedicated departments prescribed by Ordinance of the Ministry of Strategy and Finance" in subparagraph 1 (a) (i) of attached Table 6 of the Decree means any of the following research institutes or exclusive departments (hereinafter referred to as "exclusive department, etc."): < Amended by Presidential Decree No. 20720, Apr. 29, 2008; Presidential Decree No. 21302, Apr. 7, 2009; Presidential Decree No. 22161, Aug. 28, 2009; Presidential Decree No. 22131, Apr. 20,

1. Corporate research institutes or research and development divisions recognized by the Minister of Science, ICT and Future Planning pursuant to Article 16 (1) and (2) of the Enforcement Decree of the Basic Research Promotion and Technology Development Support

2. Corporate-affiliated creative research institutes or corporate creation departments recognized under Article 17-3 of the Framework Act on the Promotion of Cultural Industries, which are publicly announced by the Minister of Strategy and Finance in consideration of research and development activities of cultural industries upon the recommendation of the Minister

(2) The term "research institutes and exclusive department prescribed by Ordinance of the Ministry of Strategy and Finance" in Article 9 (1) 1 and (2) 1 of the Decree means the exclusive department, etc. (hereafter in this Article, referred to as the "exclusive department, etc. in charge of the research and development of new growth engine industries and original technology") that exclusively performs the research and development of new growth engine industries and the research and development of original technology under Article 9 (1) 1 and (2) 1 of the Decree (hereafter in this paragraph, referred to as the "research and development of new growth engine industries and original technology"): Provided, That where a dedicated department, etc. exclusively in charge of the research and development of general research and development has separately operated the relevant affairs within the exclusive department, etc., it shall be deemed the exclusive department, etc. exclusively in charge of the research and development of new growth engine industries and original technology.

(3) "Persons prescribed by Ordinance of the Ministry of Strategy and Finance" in subparagraph 1 (a) (i) of attached Table 6 of the Decree means researchers engaged in research and persons directly supporting research affairs and their research affairs (excluding any of the following executives who are stockholders) at a dedicated department, etc. < Amended by Presidential Decree No. 20720, Apr. 29, 2008; Presidential Decree No. 22130, Apr. 7, 2009; Presidential Decree No. 22816, Apr. 20, 20

1. A person who comes to own more than 10 percent of the total issued stocks of the relevant corporation, when he exercises all the stock options granted to him;

2. A shareholder of the relevant corporation, who holds in excess of 10/100 of the total number of outstanding stocks of the relevant corporation under Article 43 (7) of the Enforcement Decree of the Corporate Tax Act;

3. Persons falling under subparagraph 2 (including corporations) and specially related persons under Article 98 (1) of the Enforcement Decree of the Income Tax Act or Article 87 (1) of the Enforcement Decree of the Corporate Tax Act. In such cases, where persons falling under Article 87 (1) 7 of the Enforcement Decree of the Corporate Tax Act are officers of the relevant corporation

(1) Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Strategy and Finance No. 478 on March 13, 2015)

Article 7 (Scope of Research and Human Resources Development Expenses)

(1) The term "research institutes or dedicated departments referred to in subparagraph 1 (a) (i) of attached Table 6 of the Decree means any of the following research institutes and dedicated departments (hereinafter referred to as "dedicated department, etc."), and the term "research and development service business referred to in subparagraph 1 (a) (i) of attached Table 6 of the Decree means research and development business referred to in subparagraph 4 (a) of Article 2 of the Special Act on Support of Scientists and Engineers for Strengthening National Science and Technology Competitiveness (hereafter referred to as "research and development service business" in this Article), among research and development service businesses reported to the Minister of Science, ICT and Future Planning pursuant to Article 18 (2) of the same Act: < Amended by Presidential Decree No. 20680, Apr. 29, 2008; Presidential Decree No. 21748, Aug. 28, 2009; Presidential Decree No. 22318, Apr. 2

1. Corporate research institutes or research and development divisions recognized by the Minister of Science, ICT and Future Planning pursuant to Article 16 (1) and (2) of the Enforcement Decree of the Basic Research Promotion and Technology Development Support

2. Corporate-affiliated creative research institutes or corporate creation departments recognized under Article 17-3 of the Framework Act on the Promotion of Cultural Industries, which are publicly announced by the Minister of Strategy and Finance in consideration of research and development activities of cultural industries upon the recommendation of the Minister

(2) The term "research institutes and exclusive departments prescribed by Ordinance of the Ministry of Strategy and Finance" in Article 9 (1) 1 and (2) 1 of the Decree means companies engaged in research and development business, such as exclusive departments, etc. and departments exclusively in charge of research and development of new growth engine industries, and research and development business (hereafter in this Article, referred to as "exclusive department, etc.") and companies engaged in research and development business (hereafter in this paragraph, referred to as "exclusive department, etc.") under Article 9 (1) 1 and (2) 1 of the Decree: Provided, That where companies engaged in research and development in general research and development and engage in research and development business and operated separate organizations of the relevant business, the internal organization shall be deemed a specialized department, etc. for research and development of new growth engine industries and original technology.

(3) "Persons prescribed by Ordinance of the Ministry of Strategy and Finance" in subparagraph 1 (a) (i) of attached Table 6 of the Decree means researchers engaged in research and persons who directly support research affairs and other persons engaged in research and development service business: Provided, That as stockholders, any of the following persons shall be excluded herefrom: < Amended by Presidential Decree No. 20720, Apr. 29, 2008; Presidential Decree No. 22130, Apr. 7, 2009; Presidential Decree No. 22135, Apr. 20, 2010; Presidential Decree No. 22843, Feb.

1. A person who comes to own more than 10 percent of the total issued stocks of the relevant corporation, when he exercises all the stock options granted to him;

2. A shareholder of the relevant corporation, who holds in excess of 10/100 of the total number of outstanding stocks of the relevant corporation under Article 43 (7) of the Enforcement Decree of the Corporate Tax Act;

3. Persons falling under subparagraph 2 (including corporations) and related persons under Article 98 (1) of the Enforcement Decree of the Income Tax Act or Article 87 (1) of the Enforcement Decree of the Corporate Tax Act. In such cases, where a person falling under Article 87 (1) 7 of the Enforcement Decree of the Corporate Tax Act is an executive of the relevant

(1) The former Basic Research Promotion and Technology Development Support Act (Amended by Act No. 13211, Mar. 11, 2015)

Article 14 (Implementation of Specific Research and Development Projects)

(1) The Minister of Science, ICT and Future Planning may formulate a plan for research and development projects focused on developing promising future technologies and convergence technologies based on the outcomes of basic research (hereinafter referred to as "specific research and development projects"), select research tasks annually and conclude agreements thereon with the following institutions or organizations. In such cases, an institution referred to in subparagraph 2 which has no power of representation may enter into an agreement with the representative of the corporation to which such institution belongs: < Amended by Act No. 11690, Mar. 23, 2013>

1. An institution falling under any subparagraph of Article 6 (1);

2. Research institutes annexed to enterprises and research and development divisions of enterprises which meet the standards prescribed by Presidential Decree, such as researchers and facilities.

3. Industrial technology research cooperatives under the Industrial Technology Research Cooperatives Support Act;

4. A nanotechnology research council under Article 7 of the Act on the Promotion of Nanotechnology;

5. Non-profit corporations that meet the standards prescribed by Presidential Decree, such as research personnel and facilities, among non-profit corporations in the fields of science and technology established under the Civil Act or

6. A medical corporation that meets the standards prescribed by Presidential Decree, such as human resources and facilities for research, among medical corporations established pursuant to the Medical Service Act;

7. Other domestic or foreign research institutions or organizations and profit-making corporations which meet the standards prescribed by Presidential Decree, such as human resources and facilities for research.

(2) Expenses incurred in research under paragraph (1) shall be covered by contributions from the Government or any person other than the Government, and other funds for research and development of enterprises.

(3) Matters necessary for the methods of concluding agreements under paragraph (1) and the payment, use and management of contributions under paragraph (2) shall be prescribed by Presidential Decree.

Article 14-2 (Recognition, etc. of Research Institutes Attached to Enterprises or Research and Development Departments)

(1) In order to efficiently support and manage research and development activities of enterprises, the Minister of Science, ICT and Future Planning may recognize research and development departments of enterprises-affiliated research institutes or companies meeting the standards prescribed by Presidential Decree, such as research human resources and facilities

(2) An enterprise that intends to obtain recognition under paragraph (1) from a research institute or research and development department affiliated with an enterprise shall file an application for recognition with the Minister of Science, ICT and Future Planning.

(3) Enterprises to which any business-affiliated research institute or research and development division recognized pursuant to paragraph (1) (hereinafter referred to as "business-affiliated research institute, etc.") belongs shall report to the Minister of Science, ICT

(4) Except as otherwise expressly provided for in paragraphs (1) through (3), matters necessary for procedures for recognition of business-affiliated research institutes, etc. and reporting changes shall be prescribed by Ordinance

(1) Enforcement Decree of the former Basic Research Promotion and Technology Development Support Act (Amended by Presidential Decree No. 26356, Jun. 30, 2015)

Article 2 (Definitions)

The terms used in this Decree shall be defined as follows: < Amended by Presidential Decree No. 23720, Feb. 29, 2012>

5. The term “research and development activities” means systematic and creative activities for which accumulated creative knowledge is utilized to accumulate knowledge in science and technology or in knowledge-based services specified in attached Table 1 or to find a new application method thereof, and refers to all the processes before commercialization, including designing, producing and testing prototypes to develop a new product or process, and the development of a new service and service delivery system;

Article 16 (Standards for Institutions Participating in Specific Research and Development Projects)

(2) The department exclusively dedicated to research and development, which meets the standards prescribed by Presidential Decree, such as research human resources and facilities, refers to a research and development department equipped with research facilities meeting the detailed standards prescribed by Ordinance of the Ministry of Science, ICT and Future Planning, and a department exclusively dedicated to research and development recognized by the Minister of Science, ICT and Future Planning (hereinafter referred to as "dedicated department") by reporting the matters prescribed by Ordinance of the Ministry of Science, ICT and Future Planning.

Article 27 (Entrustment of Authority)

(1) The Minister of Science, ICT and Future Planning shall entrust his/her authority over the following matters to the Korea Industrial Technology Association established with permission from the Minister of Science, ICT and Future Planning pursuant to Article 32 of the Civil Act and the Act on the Establishment and Operation of Public Interest Corporations: < Amended by Presidential Decree No. 24442, Mar

1. Affairs relating to the acceptance and approval of reports on business-affiliated research institutes under Article 16 (1);

2. Affairs relating to the acceptance and approval of reports on exclusively dedicated departments under Article 16 (2).

(2) The Minister of Science, ICT and Future Planning may entrust specialized institutions with the following authority for specific research and development projects: < Amended by Presidential Decree No. 24442, Mar. 23, 2013>

1. Survey and analysis of technology trends and prediction of demand for technologies in the formulation of a plan for specific research and development projects;

2. Examination, operation, and management of research tasks in connection with the selection of annual research tasks and technical support therefor;

3. Evaluation and utilization of research tasks.

(3) Where the Minister of Science, ICT and Future Planning entrusts pursuant to paragraph (2), he/she shall publicly notify such fact in the Official Gazette.

(4) Matters necessary for handling affairs, reporting, etc. entrusted pursuant to paragraph (1) or (2) shall be prescribed by Ordinance of the Ministry of Science, ICT and Future Planning.

(1) The former Design Protection Act (wholly amended by Act No. 11848, May 28, 2013, and enforced July 1, 2014)

Article 5 (Requirements for Design Registration (Amendment)

(1) A design usable for an industrial purpose may be registered, except for those falling under any of the following subparagraphs: < Amended by Act No. 6413, Feb. 3, 2001; Act No. 7289, Dec. 31, 2004>

1. A design publicly known or worked inside or outside the Republic of Korea before the application for design registration is filed;

2. A design described in a publication distributed in the Republic of Korea or in a foreign country or made available to the public via telecommunication lines prior to an application for design registration;

3. Any design similar to a design falling under subparagraph 1 or 2.

(2) Notwithstanding the provisions of paragraph (1), a design registration shall not be granted to a design (excluding a design falling under any subparagraph of paragraph (1)) which a person with ordinary knowledge in the field to which the design pertains, by combining the designs falling under paragraph (1) 1 or 2, or which is easily created by combining the shapes, shapes, colors or a combination thereof widely known in the Republic of Korea, prior to the filing of an application for design registration. < Amended by Act No. 5354, Aug. 22, 1997; Act No. 6413, Feb. 3, 200

(3) Notwithstanding the provisions of paragraph (1), a design registration shall not be granted where a design claimed in an application for design registration is identical or similar to a part of a design indicated in a drawing, photograph or sample attached to another application for design registration that was filed before and laid open, published or inserted in the Design Gazette pursuant to Article 23-6 after the filing date of the application for design registration before and after the filing date of the application for design registration. (Newly Inserted by Act No. 6413, Feb. 3, 2001; Act No. 7289, Dec. 31, 2004; Act

【Design Protection Act

Article 2 (Definitions)

The terms used in this Act shall be defined as follows:

1. The term "design" means the shape, pattern, or color, or any combination thereof, of an article (including parts of an article (excluding parts of an article) and fonts; hereinafter the same shall apply) which produces an aesthetic impression in the sense of sight;

Article 33 (Requirements for Design Registration)

(1) A design usable for an industrial purpose is eligible for design registration, except:

1. A design publicly known or worked in the Republic of Korea or a foreign country before an application for design registration is filed;

2. A design described in a publication distributed in the Republic of Korea or in a foreign country or made available for public use via telecommunications lines before an application for design registration is filed;

3. A design similar to any of the designs specified in subparagraph 1 or 2.

(2) Notwithstanding the provisions of paragraph (1), no design (excluding a design specified in paragraph (1)) that could be easily created by a person with ordinary skill in the art to which the design pertains by applying either of the following methods before an application for design registration is filed, shall be eligible for design registration:

1. A design falling under paragraph (1) 1 or 2 or a combination thereof;

2. The shapes, shapes, colors or the combination thereof widely known inside or outside the Republic of Korea.

(3) Notwithstanding paragraph (1), where a design for which an application for design registration was filed is identical or similar to a part of a design indicated in a drawing, photograph, or sample attached to another application for design registration (limited to a design applied before the filing date of the application for design registration) published in the Design Gazette pursuant to Article 52, 56, or 90 (3) after filing the application, the design shall not be registered: Provided, That the foregoing shall not apply where the applicant for the design registration and the applicant for another application for design registration are identical.

director Industrial Design Promotion Act (amended by Act No. 12928, Dec. 30, 2014)

Article 2 (Definitions)

The term "industrial design" in this Act means creation and improvement activities to satisfy physical and psychological needs of producers and consumers by rationalizing the aesthetic, functional, and economic values of products, etc., and includes product design, packaging design, environmental design, and visual design.

[Specialized Amendment 209 May 21, 2009]

【Industrial Design Promotion Act

Article 2 (Definitions)

For the purpose of this Act, the term "industrial design" means any act of creation and improvement (including any act of technological development for creation and improvement) to satisfy physical and psychological needs of producers and consumers by minimizing the aesthetic, functional, and economic values of products, services, etc. and the outcomes thereof, and includes product design, packaging design, environmental design, visual design, service design, etc. < Amended by Act No. 12839, Dec. 30, 2014>