With the exception of business entities to whom Article 6 herein applies, for business entities whose business tax is computed based on the assessed sales amount, the competent tax authority should compute their monthly sales amount by dividing the operating expenses specified below by the expense ratio. But for business entities with special circumstances, the competent tax authority may determine their sales amount based on the information actually obtained.
1.Proprietor’s salary: Calculated by the salary (meal expenses included) per person per month, excluding proprietors who do not actually run the business.
2.Employee salary: Calculated by the salary (meal expenses included) per person per month, including families and relatives of the proprietors who take care of the business on a regular basis.
3.Rent: Calculated per ping per month; business premises owned by the business proprietor or used free of charge are considered leased.
The standards for the operating expenses specified in the preceding paragraph will be prescribed separately.
The competent tax authority should, in consideration of the economic development in the area of its jurisdiction, draft the Expenses Grade Table by lot section or administrative district and file the table with the Ministry of Finance.
The expense ratios referred to in Paragraph 1 hereof are as follows:
1.17% for businesses in the trade of antiques, paintings and calligraphy, and businesses in the trade of watches, clocks and eyeglasses.
2.22% for other trades, and businesses in manufacturing, agriculture and forestry, animal husbandry, aquaculture, mining, contracting, printing, building furnishing, handicraft, repair, and processing.
3.35% for businesses in publishing, photo service, copying service, advertising, warehousing, leasing, technical and design service, labor service, trading of used articles, and trading of paper boxes.
4.45% for businesses in notary public, agency service and brokerage service.
In cases where assessing the sales amount for business entities partially selling tax-exempt goods as specified in Article 8 of the Act by dividing operating expenses by the expense ratio, the assessed sales amount shall be deducted by 20% for business entities located in municipalities and 30% for business entities located in counties or cities after dividing operating expenses by the expense ratio. For business entities whose part-time business is of special nature, the competent tax authority may carry out deduction based on the actual situation, subject to the approval of the agency head.