[Year-End Tax Settlement Preview] "Know Tax Saving Methods in Advance and Prepare"... Spouse's Maternity Leave Pay Tax Exempt

[Asia Economy Reporter Kwangho Lee] On the 30th, the National Tax Service announced the launch of the 'Year-end Tax Settlement Preview' service to help workers establish year-end tax settlement saving plans.

First, the preview service can be accessed only by logging into the National Tax Service Hometax website using a certified digital certificate.

The preview service allows users to modify deduction items pre-filled with last year's amounts to the expected usage amounts for this year, and it calculates the year-end tax settlement amount in advance.

Along with tax-saving tips for each item, users can receive data on filing history and burden increase/decrease trends over the past three years, as well as actual tax burden rates.

Below are the revised tax law details that help in establishing tax-saving plans.

* Establishment of Tax Exclusion (Benefits related to housing purchase/rental for employees of small and medium enterprises)

- To support housing stability for employees of small and medium enterprises (SMEs), benefits obtained by SME employees under Article 2 of the Enforcement Decree of the Restriction of Special Taxation Act, through receiving low-interest or interest-free loans for housing purchase or rental funds, are excluded from annual earned income.

* Establishment of Tax Exemption (Spouse's paternity leave pay)

- To promote maternal protection and male participation in childcare, spouse's paternity leave pay received under the Employment Insurance Act is classified as non-taxable earned income and is not included in total salary.

* Expansion of Tax Exemption (Exercise gains from stock options of venture companies)

- To support the attraction of talented personnel to venture companies, the annual tax-exempt limit on stock option exercise gains for executives and employees of venture companies has been expanded from 20 million KRW to 30 million KRW.

* Expansion of Tax Exemption (Relaxation of total salary criteria for production workers)

- The total salary criteria for non-taxable conditions on overtime pay, etc., for production workers have been relaxed. The monthly fixed salary requirement for tax exemption has been raised from 25 million KRW to 30 million KRW starting from the 2019 tax year.

* Establishment of Tax Reduction (Income tax reduction for domestic return of outstanding domestic personnel)

- To support the return of outstanding domestic personnel stationed overseas, those meeting certain career requirements can receive a 50% income tax reduction for five years.

* Expansion of Tax Reduction (Eligible industries and career interruption conditions for SME employee tax reduction)

- Workers in service industries with low wage levels and high labor shortages can also apply for SME employee income tax reductions. Marriage and child education have been added as recognized reasons for career interruption, and the career interruption period and reemployment company requirements have been relaxed.

* Expansion of Tax Credit (Increase in contribution limit for pension accounts eligible for tax credit)

- For those aged 50 and above who need retirement preparation, the contribution limit for pension accounts eligible for tax credit has been temporarily increased for three years.