Change of Business Year

Date: May 27, 2020

I. Introduction

This post will investigate procedures for changing a business year of a corporation and subsequent business year calculation.

II. Procedures for changing a business year

(1) A corporation which intends to change its business year shall report there on to the head of the tax office having jurisdiction over the place of tax payment within three months from the end date of the immediately preceding business year, as prescribed by Presidential Decree.

(2) Where a corporation fails to file a report by the deadline specified in paragraph (1), the corporation's business year shall be deemed unchanged: Provided, That for a corporation, the business year of which is determined by statutes, its business year shall be deemed changed atthe time the amended provisions concerning the change of the business year insuch statutes have effected, although no report is filed under paragraph (1).

(3) Where a business year is changed pursuant to paragraph (1) or the proviso to paragraph (2), the period from the start date of the previous business year to the date preceding the start date of the changed business year shall be deemed one business year: Provided, That where such period does not exceed one month, it shall be included in the changed business year.

III. Preparation of Articles of Incorporation

(1) Incorporators shall prepare the articles of incorporation and enter the following matters inthe articles of incorporation, and each of them shall write his/her name andaffix his/her seal, or affix his/her signature:

1. objectives;

2. Trade name;

3. The total number of shares authorized to be issued;

4. Par value per share where par value shares are issued;

5. The total number of shares to be issued at the time of incorporation;

6. The location of a principal office;

7. Methodof giving a public notice by the company;

8. The name, resident registration number and address of each incorporator;

IV. Related Laws and Regulations

Article 7 (Change of Business Year)

(1)  A corporation which intends to change its business year shall report there on to the head of the tax office having jurisdiction over the place of tax payment within three months from the end date of the immediately preceding business year, as prescribed by Presidential Decree.

(2)  Where a corporation fails to file a report by the deadline specified in paragraph (1), the corporation's business year shall be deemed unchanged: Provided, That for a corporation, the business year of which is determined by statutes, its business year shall be deemed changed at the time the amended provisions concerning the change of the business year insuch statutes have effected, although no report is filed under paragraph (1).

(3)  Where a business year is changed pursuant to paragraph (1) or the proviso to paragraph (2), the period from the start date of the previous business year to the date preceding the start date of the changed business year shall be deemed one business year: Provided, That where such period does not exceed one month, it shall be included in the changed business year.

Article 4 (Reports on Change of Business Year)

A corporation which intends to report a change in its business year under Article 7 (1) of the Act shall file a report on change of business year (including submission through the national tax information and communications network) to the head of the tax office having jurisdiction over the place of tax payment by the filing deadline, in the form stipulated by Ordinance of the Ministry of Economy and Finance.

Article 63 (Interim Prepayment)

(1)  Where each business year of a domestic corporation (excluding an educational foundation that operates a private school defined by Article 3 of the Higher Education Act, an industry-academia cooperation group under the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act, the Seoul NationalUniversity established under the Act on Establishing and Administrating Seoul National University, and the Incheon National University established under the Act on Establishing and Administering Incheon National University) exceeds six months (excluding the first business year after the incorporation of acorporation, if newly incorporated without a merger or division), the domestic corporation shall determine the period of six months from the beginning of the relevant business year as an interim prepayment period and shall pay the amountcomputed by multiplying six by the amount computed by dividing the amount of tax (including penalty tax, but excluding corporate tax on capital gains on thetransfer of land, etc. under Article 55-2, corporate tax on unappropriate dearnings under Article 56, and corporate tax computed by applying special taxprovisions for promoting investment and collaborative cooperation under Article100-32 of the Restriction of Special Taxation Act) determined as corporate tax for the business year immediately preceding the relevant business year, less the following amounts, by the number of months in the immediately preceding business year (hereinafter referred to as "interim tax") within two months after the expiration of the interim prepayment period to the tax office having jurisdiction over the place of tax payment, the Bank of Korea (includingany of its agents), or a post office (hereinafter referred to as "taxoffice, etc., having jurisdiction over the place of tax payment"), as prescribed by Presidential Decree: Provided, That, if a domestic corporation (excluding corporations referred to in Article 51-2 (1)) liable to pay interimtax has no calculated amount of tax finally assessed as corporate tax for theimmediately preceding business year, if the amount of corporate tax for the immediately preceding business year has not been finally assessed by the end ofthe relevant interim prepayment period, or if the relevant business year is the first business year after the relevant corporation is newly incorporated through a division or its counter-party corporation to a division is merged through a division, such corporation shall compute interim tax and pay itpursuant to paragraph (5):

 

 

Learn more about Korean tax system by visiting our website

​

​

                            

 

게시글 SNS 공유