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BUSAN METROPOLITAN GOVERNMENT ORDINANCE ON TAX EXEMPTIONS OR REDUCTIONS

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BUSAN METROPOLITAN GOVERNMENT ORDINANCE ON TAX EXEMPTIONS OR REDUCTIONS

Responsible Division: Director of Administration and Policy for Planning & Coordination Office

Partially Amended by Ordinance No. 6688, Apr. 13, 2022

• Article 1 (Purpose)
• The purpose of this Ordinance is to contribute to the fiscal soundness of local governance and development of the local community by prescribing matters regarding reductions of and exemptions from taxes imposed by Busan Metropolitan City and any restrictions thereto, under the Restriction of Special Local Taxation Act and other statutes or regulations.

• Article 2 (Tax Reductions or Exemptions for Motor Vehicles Owned by Visually Impaired Persons)
• ① Where a person whose level of disability falls under any of the following subparagraphs [excluding a person of distinguished service to the State under Article 29 ④ of the Restriction of Special Local Taxation Act (hereinafter referred to as the "Act") and including a person who was registered as having Grade-IV visual impairment before Jun. 30, 2019 and has so remained; hereinafter referred to as a "person with a disability"], from among visually impaired persons deemed and registered as persons with minor disabilities under Article 32 of the Act on Welfare of Persons with Disabilities, Article 2 ① of the Enforcement Decree of the same Act, and Articles 3 through 7 of the Enforcement Rule of the same Act has registered, under his or her own name; or a person who is listed on the same resident registration record card by household under the Resident Registration Act (hereinafter referred to as "resident registration record card by household") and confirmed as the spouse of the person with a disability or as a lineal blood relative or sibling of the person with a disability, or confirmed as the spouse of a lineal blood relative of the person with a disability or as a lineal blood relative or sibling of the spouse of the person with a disability according to a family relations register under Article 9 of the Act on Registration of Family Relations (hereinafter referred to as "family relations register") has registered, under the joint names with the person with a disability, a motor vehicle falling under any subparagraph of Article 17 ① of the Act which is acquired for use as an assistive vehicle or for business purposes; and either of the persons files an application for reduction of or exemption from the motor vehicle tax under Article 125 ① of the Local Tax Act (hereinafter referred to as "motor vehicle tax") or an acquisition tax, the person shall be granted reduction of or exemption from both the motor vehicle tax and acquisition tax on one motor vehicle for which he or she has first been filed the application until Dec 31, 2022: <Amended by May 29, 2019; May 27, 2020; Apr. 13, 2022>
  • 1. Where the better eye has visual acuity of higher than 0.06, and up to 0.1;
  • 2. Where the respective field of vision of both eyes spans more than 5 degrees, and up to 10 degrees.
• ② In applying paragraph ①, where a person registered as an alien under Article 31 of the Immigration Act and granted the status of permanent residency under Article 10-3 of the same Act applies for reduction or exemption, such person may submit a registered alien record and alien registration card under Article 34 ① of the same Act in lieu of a family relations register and resident registration record card by household. <newly established May 27, 2020>
• ③ An acquisition tax or the motor vehicle tax shall not be levied under paragraph ① on a motor vehicle acquired and registered by a person with a disability to replace the old vehicle [referring to the registration of cancellation or transfer of a motor vehicle exempt from the acquisition tax or the motor vehicle tax under this Article (referring to the transfer of the motor vehicle in question to a person who does not share ownership therein with the person with a disability; hereafter in this paragraph the same shall apply) and the acquisition of another motor vehicle that falls under any subparagraph of Article 17 ① of the Act; including the registration of cancellation or transfer of a motor vehicle exempt from the acquisition tax or the motor vehicle tax under this Article within 60 days from the date such motor vehicle is acquired and registered]. <Amended by May 29, 2019; May 27, 2020>
• ④ Any acquisition tax so exempted shall be collected, where a person with a disability or a person who has a motor vehicle registered jointly with the person with a disability under paragraphs ① and ③ transfers ownership in the motor vehicle to any third person by any reason other than death, marriage, emigration abroad, cancellation of his or her driver's license, or a similar cause or event beyond control or where the household to which the person with a disability and the joint owner belong is separated, within one year from the registration of the motor vehicle: Provided, That this shall not apply to cases where the person entitled to joint ownership registration with a person with a disability transfers his or her ownership to the person with a disability, where the person entitled to joint ownership registration with a person with a disability takes over part of such ownership from the person with a disability, or where registration conversion is made between those entitled to joint ownership registration. <Amended by May 27, 2020>
• ⑤ Where the motor vehicle exempted from the acquisition tax or the motor vehicle tax under paragraph ① or ③ falls under any subparagraph of Article 8 ⑥ of the Enforcement Decree of the Restriction of Special Local Taxation Act (hereinafter referred to as the "Decree"), it shall be deemed that the motor vehicle is not owned, regardless of whether it is registered or not. <Amended by May 27, 2020>

• Article 3 Deleted <Dec. 30, 2020>

• Article 4 (Tax Reductions or Exemptions for Complexes for Production of Special Local Products)
• ① No acquisition tax shall be imposed, until Dec. 31, 2023, on real estate purchased by any of the following persons for direct use in a project where that real estate is located in a complex for production of special local products under Article 50 ① of the Framework Act on Agriculture, Rural Community and Food Industry or under Article 39 ① of the Framework Act on Fisheries and Fishing Villages Development: <Amended by Dec. 27, 2017; Dec. 30, 2020>
  • 1. An entity designated as a complex for the production of special local products under Article 50 ① of the Framework Act on Agriculture, Rural Community and Food Industry or Article 39 ① of the Framework Act on Fisheries and Fishing Villages Development;/li>
  • 2. A person who runs or intends to run a business that produces processed agricultural products under Article 19-3 ① of the Food Industry Promotion Act;
  • 3. A person who intends to engage in the production, development, and import promotion of processed fishery products and the establishment and operation of specialized stores for processed fishery products under Article 19-4 ① 1 of the Food Industry Promotion Act.
• ② In any of the following cases, any acquisition tax exempted per paragraph
  • 1. Where the real estate has not been used directly for the intended purpose for more than one year from the date of acquisition, without a justifiable basis;
  • 2. Where the real estate is sold, gifted, or used for other purposes after having been used directly for the intended purpose for less than two years.

• Article 5 (Tax Reductions or Exemptions for Supporting Attraction of Foreign Investment)
• The period and rate of acquisition tax reductions or exemptions under Article 78-3 ① of the Act and the provision of paragraph ③, with the exception of its subparagraphs, of that Article shall be as follows: Provided, That the amount of an acquisition tax reduced or exempted shall be collected where it falls under Article 78-3 (12) of the Act: <Amended by May 27, 2020>
  • 1. Cases falling under Article 78-3 ① 1 of the Act: The full amount of tax subject to reduction or exemption for 15 years from the commencement of the business;
  • 2. Cases falling under Article 78-3 ③ 1 (a) of the Act: 50/100 of the amount of tax subject to reduction or exemption for five years from the commencement of the business.

• Article 6 (Tax Reductions or Exemptions for Industrial Complexes, etc.)
• "The rate prescribed by municipal ordinance" in Article 78 ⑧ of the Act shall be as follows: <Amended by May 31, 2017>
  • 1. The rate of reduction to be added to the rate under Article 78 ④ 2 (a) of the Act shall be 25/100; <Amended by May 31, 2017>
  • 2. The rate of reduction to be added to the rate under Article 78 ④ 2 (b) of the Act shall be 15/100.

• Article 7 (Tax Reductions or Exemptions for Implementers of Tourism Complex Development Projects, etc.) <Amended by May 31, 2017>
• ① "Rate ... prescribed by municipal ordinance" in Article 54 ① of the Act shall be 25/100.
• ② Where a person acquires business-purposed real estate in a tourism complex designated under the Tourism Promotion Act from the implementer of a tourism complex development project to newly build or expand any of the facilities referred to in subparagraph 1 (a) through (f) of attached Table 18 of the Enforcement Rule of the same Act (excluding cases where logistics or distribution-related facilities classified under support facilities in (f) of said subparagraph are installed in a commercial facilities zone in attached Table 19 of the Enforcement Rule of the same Act), the person shall have a reduction of 50/100 of the acquisition tax on the real estate until Dec. 31, 2023. Provided, That in any of the following cases, the acquisition tax reduced shall be collected: <Amended by Dec. 27, 2017, Dec. 30, 2020>
  • 1. Where the real estate has not been used for the intended purpose for more than one year from the date of acquisition, without a justifiable basis;
  • 2. Where the real estate is sold, gifted, or used for other purposes after having been used directly for the intended purpose for less than two years.

• Article 8 (Tax Reductions or Exemptions for Market Place Modernization Projects)
• (1) No acquisition tax shall be imposed, until December 31, 2020, on a building acquired for a project for modernizing commercial infrastructure promoted by the merchants' organizations of a market or market managers based on any support or subsidy from the State or from the relavant local government under Article 20 (1) of the Special Act on the Development of the Traditional Markets and Shopping Districts.
• (2) In any of the following cases, the acquisition tax exempted per paragraph (1) shall be collected:
  • ① No acquisition tax shall be imposed, until Dec. 31, 2023, on a building acquired for a project for modernizing commercial infrastructure promoted by the merchants' organizations of a market or market managers based on any support or subsidy from the State or from the relevant local government under Article 20 ① of the Special Act on the Development of the Traditional Markets and Shopping Districts. <Amended by Dec. 27, 2017; Dec. 30, 2020>
  • ② In any of the following cases, the acquisition tax exempted per paragraph ① shall be collected:
    • 1. The building has not been used for the purpose specified in any subparagraph of Article 20 ① of the Special Act on the Development of Traditional Markets and Shopping Districts, without a justifiable basis, for more than three years from the date it was acquired;
    • 2. The building is sold, gifted, or used for other purposes after having been used for the intended purpose for less than two years.

• Article 9 (Tax Reductions or Exemptions on Motor Vehicles Participating in No-Drive Day Campaign)
• ① A motor vehicle tax reduction of 10/100 shall apply, until Dec. 31, 2023, to a motor vehicle participating in the No-Drive Day Campaign under Article 6 of the Busan Metropolitan City Ordinance on Support for the Operation of No-Drive Days. <Amended by Dec. 27, 2017; Dec. 30, 2020>
• ② A motor vehicle tax reduction under paragraph ① shall apply on or after the date it is verified that the relevant motor vehicle participates in the No-Drive Day Campaign.
• ③ Notwithstanding paragraphs ① and ②, in cases falling under any subparagraph of Article 6
• ③ of the Busan Metropolitan City Ordinance on Support for the Operation of No-Drive Days, the motor vehicle tax for the relevant year shall not be reduced, and the reduced motor vehicle tax shall be collected.

• Article 10 (Tax Credits for Payment by Automatic Transfer, etc.)
• ① "Amount prescribed by municipal ordinance" in each subparagraph of Article 92-2 ① of the Act shall be as follows: <Amended by May 16, 2018; April 13, 2022>
  • 1. Where a taxpayer applies for payment only by electronic service: 500 won per written notice;
  • 2. Where a taxpayer applies for payment only by automatic transfer: 500 won per written notice;
  • 3. Where a taxpayer applies for payment by both electronic service and automatic transfer: 1000 won per written notice.
• ② Priority as to the order of tax credits applied under paragraph ① shall be as follows:
  • 1. First apply the tax credit to the ordinary tax, if both an ordinary tax and a specific-purpose tax are stated in a tax notice;
  • 2. The local education tax imposed on the basis of the amount of the main tax shall be last priority for tax credits.

• Article 11 (Tax Reductions or Exemptions for Exemplary Enterprises in Terms of Employment)
• No acquisition tax shall be imposed on any real estate acquired by any enterprise certified as an exemplary enterprise in terms of employment according to the Busan Metropolitan Government's system of certifying exemplary enterprises in terms of employment where such enterprise acquires the real estate (excluding real estate for rental) for direct use in its business, until Dec. 31, 2023: Provided, That any acquisition tax so exempted shall be collected in any of the following cases: <Amended by Dec. 27, 2017; Dec. 30, 2020>
  • 1. Where the real estate has not been used directly for the intended purpose for more than two years from the date of acquisition, without a justifiable basis;
  • 2. Where the real estate is sold, gifted, or used for other purposes after having been used directly for the intended purpose for less than two years;
  • 3. Where the enterprise's certification as an exemplary enterprise in terms of employment is revoked or where the enterprise fails to maintain the number of increased employees continuously for at least one year from the date of certification as an exemplary enterprise in terms of employment.

• Article 12 Deleted <Dec. 30, 2020>

• Article 13 (Tax Reductions and Exemptions for Advanced-Technology Corporations, etc. Taking Occupancy in Busan Special Research and Development Zone)
• ① No acquisition tax shall be imposed on real estate acquired by any advanced-technology corporation, a research company, a foreign-capital invested company, or a foreign research institute defined under Article 2 of the Special Act on Promotion of Special Research and Development Zones where such real estate is located in the Busan Special Research and Development Zone designated pursuant to Article 4 of aforementioned Act is used directly for such business, until Dec. 31, 2023. <Amended by Dec. 27, 2017; Dec. 30, 2020>
• ② In any of the following cases, any acquisition tax so exempted under paragraph ① shall be collected:
  • 1. Where the real estate has not been used directly for the intended purpose for more than three years from the date of acquisition, without a justifiable basis;
  • 2. Where the real estate is sold, gifted, or used for other purposes after having been used directly for the intended purpose for less than two years (including cases where designation, registration, or approval for moving-in is revoked under Article 9-2, 9-4, or 40 of the Special Act on Promotion of Special Research and Development Zones).

• Article 14 (Tax Exemptions for Startup Businesses in Financial Hubs)
• ① No acquisition tax shall be imposed, until Dec. 31, 2023, on property acquired through the start-up of a business or the establishment of a new place of business (excluding relocation of an existing place of business) in a financial hub designated under Article 5 ⑤ of the Act on the Creation and Development of Financial Hubs and where such business is engaging in a financial or insurance business that meets the standards under Article 116-26 ① of the Enforcement Decree of the Restriction of Special Taxation Act. <Amended by Dec. 27, 2017; Dec. 30, 2020>
• ② In any of the following cases, any acquisition tax so exempted under paragraph ① shall be collected:
  • 1. Where the real estate has not been used directly for the intended purpose for more than two years from the date of acquisition, without a justifiable basis;
  • 2. Where the real estate is sold, gifted, or used for other purposes after having been used directly for the intended purpose for less than two years;
  • 3. Where the business located on such property fails to meet the standards for reduction or exemption under Article 116-26 ① of the Enforcement Decree of the Restriction of Special Taxation Act within two years from the date of start-up or establishment.

• Article 15 Deleted. <Dec. 27, 2017>

• Article 16 (Delegation of Authority over Administrative Affairs)
• ① The authority to perform administrative affairs relating to reductions of and exemptions from the Busan Metropolitan City tax (hereinafter referred to as "city tax") and additional collection thereof shall be delegated to the head of a Gu or Gun having jurisdiction over the place for tax payment for the taxable subject matter (hereinafter referred to as "the head of a Gu").
• ② Notwithstanding paragraph ①, the authority to perform administrative affairs relating to reductions of and exemptions from acquisition taxes under Article 2 shall be delegated to the head of the Busan Metropolitan Motor Vehicle Registration Office (hereinafter referred to as "Motor Vehicle Registration Office").

• Article 17 (Exclusion from Subject Matters Eligible for Reductions or Exemptions)
• For the purposes of this Ordinance, the real estate, etc. specified in Article 13 ⑤ of the Local Tax Act shall be excluded from subject matter eligible for tax reductions or exemptions.

• Article 18 (Voluntary Tax Returns on, and Payment of, Tax Amount Reduced or Exempted)
• ① If a taxable subject matter becomes subject to imposition and collection of an acquisition tax after granted an acquisition tax reduction or exemption under this Ordinance, the relevant taxpayer shall voluntarily file a tax return thereon and pay the acquisition tax in accordance with Article 20 ③ of the Local Tax Act.
• ② Where a taxpayer fails to fulfill the duty to file a tax return and pay the tax under paragraph ① Article 21 ① of the Local Tax Act shall apply to the imposition of a surcharge or collection of an additional tax.

• Article 19 (Avoidance of Double Reductions or Exemptions)
• Article 180 of the Act shall apply where at least two provisions concerning reductions or exemptions are applicable to the same taxable subject matter in granting any city tax reduction or exemption.

• Article 20 (Restriction on Special Cases regarding Local Tax Reductions or Exemptions) <Amended by May 16, 2018>
• Whether to apply Article 177-2 ① of the Act and the timing of such application under Article 177-2 ③ of the Act shall be as follows:
  • 1. Whether to apply the Article in question: Where exemption from an acquisition tax is granted under this Ordinance (including exemptions made as a result of summing up any reduction under the Act and any reduction per this Ordinance), the provisions of Article 177-2 ① of the Act shall apply; but this does not apply to Articles 2, 5, and 8; <Amended by May 16, 2018>
  • 2. Timing of application: Jan. 1, 2018.
  • [This Article Newly Inserted by May 31, 2017]

• Article 21 (Collection of Acquisition Tax Exempted)
• ① In granting any reduction or exemption under this Ordinance, the acquisition tax so reduced or so exempted shall be collected in any of the following cases, except as otherwise provided in this Ordinance: <Amended by May 27, 2020>
  • 1. The real estate has not been used directly for the intended purpose for more than one year from the date of acquisition, without a justifiable basis;
  • 2. The real estate is sold, gifted, or used for other purposes after having been used directly for the intended purpose for less than two years.
• ② A person granted reduction of or exemption from an acquisition tax for real estate under this Ordinance is required to pay the reduced or exempted amount on any of the grounds for additional collection specified in paragraph ① or other provisions of this Ordinance as well as the amount corresponding to any interests accrued thereon as calculated under Article 123-2 ① of the Decree, and the amount of tax in question shall be deemed to be that required to be paid under Article 20 of the Local Tax Act: Provided, That the amount corresponding to interests shall not be added in cases falling under any subparagraph of Article 123-2 ② of the Decree. <Newly Inserted May. 27, 2020>

• Article 22 (Filing Applications, etc. for Tax Reduction or Exemption)
• ① Each person who wishes to obtain a city tax reduction or exemption under this Ordinance shall file an application for local tax exemption or reduction in attached Form 1 of the Enforcement Rule of the Restriction of Special Local Taxation Act (hereinafter referred to as the "Rule") with the head of the Motor Vehicle Registration Office and the head of the Gu (hereinafter referred to as "head of the Gu or relevant authority"): Provided, That the head of the Gu or relevant authority may ex officio grant a tax exemption or reduction to a taxpayer, if he or she can verify that the taxpayer is eligible for exemption or reduction.
• ② Upon receipt of an application for local tax exemption or reduction filed under paragraph ①, the head of the Gu or relevant authority shall decide whether to grant a tax exemption or reduction to the applicant and shall notify the applicant of the decision using attached Form 2 of the Rule.
• ③ Where granting a city tax reduction or exemption under Article 2, the head of a local government who has no jurisdiction over the place in which the motor vehicle is primarily used, may also handle the administrative affairs referred to in paragraphs ① and ②, he or she In this case, such administrative affairs shall be deemed handled by the head of the Motor Vehicle Registration Office.
• ④ When the head of the local government having no jurisdiction over the place in which the motor vehicle in question is primarily used has handled the administrative affairs under paragraphs ① and ② as provided for inparagraph ③, he or she shall immediately transfer all relevant documents to the head of the Motor Vehicle Registration Office.

• Article 23 (Submission of Documents on Tax Reduction or Exemption)
• A person granted a city tax reduction or exemption under this Ordinance shall submit documents on such tax reduction or exemption to the head of the Gu or relevant authority pursuant to Article 184 of the Act.

• Article 24 (Special Cases regarding Period of Tax Reductions or Exemptions)
• Except as provided in this Ordinance, the period of tax reductions or exemptions.

• Addendum <Ordinance No. 6125, May 27, 2020>
• This Ordinance shall enter into force on the date of its promulgation.
• Addenda <Dec. 30, 2020>

• Article 1 (Effective Date)
• The ordinance will take effect on Jan. 1, 2021.

• Article 2 (General Application Examples)
• This Ordinance shall apply from the time the tax liability is established after the entry into force of this Ordinance.

• Article 3 (General Interim Measures)
• At the time of enforcement of this Ordinance, the market tax levied or reduced in accordance with the previous provisions or to be imposed or reduced shall be in accordance with the previous provisions.

• Addendum <Apr. 13, 2022>

• Article 1 (Effective Date)
• This ordinance shall take effect on the date of its promulgation.

• Article 2 (General Interim Measures)
• At the time of enforcement of this Ordinance, the market tax levied or reduced in accordance with the previous provisions or to be imposed or reduced shall be in accordance with the previous provisions.