Documentary Laws and Regulations-491 (Law No. 26, 2013)
Where an asset management company entrusted with the business of asset management, operation and disposal re-entrusted the relevant business to another corporation, the income deduction for the special purpose company, etc. shall not apply.
Although a project financing investment company entrusts an asset management company under Article 86-2 (5) and (2) of the Enforcement Decree of the Corporate Tax Act with the business of managing, operating, and disposing of assets for a specific business, it is not required to apply the income deduction under Article 51-2 (1) of the Corporate Tax Act if it re-entrusted the business entrusted by the relevant asset management company
Article 51-2 of the Corporate Tax Act (Income Deduction for Special Purpose Companies)
1. Factual basis
○A project financial investment company (PFV) will be established by investing in kind insolvent PPF bonds in order to dispose of insolvent PPF bonds held by the corporation.
-the operations of the PFV with respect to the management, operation, disposal, etc. of the assets will be carried out by the Corporation as the direct asset management company (AMC);
- The Corporation is a corporation invested in the appropriate PFV, and the requirements of the AMF are satisfied under the law;
-the Corporation will re-consign part of its AMF services to a corporation which has no investment relationship with the PFV.
2. Details of application;
Whether income deduction requirements are satisfied in the event that part of the business is re-entrusted to a corporation with no investment relationship with the PFV by AMFFV.
3. Related Acts and subordinate statutes.
【Income Deduction for Special Purpose Companies, etc.】
(1) Where any of the following domestic corporations distributes not less than 90/100 of distributable profits prescribed by Presidential Decree, such amount shall be deducted from the amount of income for the relevant business year:
9. An investment company similar to those provided for in subparagraphs 1 through 8 which satisfies the following requirements:
(a) operate its assets for an investment in plants and infrastructure, the development of resources, or a specific business requiring a reasonable period of time and money, and distribute its profits to its stockholders;
(b) No employee and full-time executive shall be established without the establishment of any business office other than the head office;
(c) It shall exist for a limited period of not less than 2 years;
(d) It shall be a stock company under the Commercial Act or any other Act which is established in the form of incorporation by promoters;
(e) Its promoters shall not fall under any subparagraph of Article 4 (2) of the Corporate Restructuring Investment Companies Act and shall meet the requirements prescribed by Presidential Decree;
(f) Its directors shall not fall under any subparagraph of Article 12 of the Corporate Restructuring Investment Companies Act;
(g) Its auditor shall meet Article 17 of the Corporate Restructuring Investment Companies Act. In such cases, "corporate restructuring investment company" shall be construed as "company";
(h) He/she shall meet the requirements prescribed by Presidential Decree with respect to the scale of capital, asset management, entrustment of and report on the establishment, etc.;
【Income Deduction for Special Purpose Companies, etc.】
(4) "Requirements prescribed by Presidential Decree" in Article 51-2 (1) 9 (e) of the Act means the following requirements:
1. At least one of the promoters shall fall under any of the following items:
(a) A financial company, etc. falling under any of Article 61 (2) 1 through 13 and 24;
(b) The National Pension Corporation under the National Pension Act (limited to the investment companies which conduct the private investment project by the mode under subparagraph 2 of Article 4 of the Act on Private Participation in Infrastructure);
2. The promoters falling under subparagraph 1 (a) or (b) shall invest 5/100 or more (where many promoters falling under subparagraph 1 (a) or (b) are involved, it shall be added up) in capital
(5) "Requirements prescribed by Presidential Decree" in Article 51-2 (1) 9 (h) of the Act means any of the following requirements:
1. The capital shall be not less than five billion won: Provided, That in the case of an investment company that conducts a private investment project in a manner under subparagraph 2 of Article 4 of the Act on Private Participation in Infrastructure, it shall be not less than one billion
2. The business of managing, operating and disposing of assets shall be entrusted to any of the following persons (hereafter in this Article referred to as "asset management company"):
(a)any juridical person invested in that company;
(b) A corporation established solely or jointly by an investor in the company concerned;
3. Fund management affairs shall be entrusted to a financial company, etc. that operates trust business under the Financial Investment Services and Capital Markets Act (hereafter referred to as "trustee company of fund management" in this Article);
4. The shareholder shall meet the requirements of each subparagraph of paragraph (4). In such cases, "incorporator" shall be construed as "shareholders".
5. To report the following matters to the head of tax office having jurisdiction over the place of tax payment within two months from the date of registration of incorporation, attaching the documents prescribed by Ordinance of the Ministry
(a) Purposes of articles of association;
(b) Names and resident registration numbers of directors and auditors;
(c) Name of the assets management company;
(d) The name of the trustee company of fund management;
6. An asset management company and a trustee company of fund management shall not be the same person.