[Enforcement Decree of the Tax Act] Taxation on Employee Income for Public Official Awards Exceeding 2.4 Million Won

Im Jae-hyun, Director of the Tax Policy Bureau at the Ministry of Economy and Finance (second from the left), is presenting the key points at the background briefing on the "2020 Tax Law Amendment Follow-up Enforcement Decree Revision" held on the 5th at the Government Sejong Complex in Sejong City.

[Asia Economy Reporter Kwangho Lee] From now on, public officials will be taxed on labor income for amounts exceeding 2.4 million KRW per year received as prize money and awards from the state or local governments in relation to their official duties.

The '2020 Tax Law Amendment Follow-up Enforcement Decree Amendment' announced by the Ministry of Economy and Finance on the 6th includes this provision.

Additionally, to rationalize the tax system, if a business place is established or a business registration is made for the purpose of trading calligraphy and antiques, capital gains from calligraphy and antiques will be taxed as business income.

Furthermore, considering that real estate rental income has a low correlation with labor similar to interest and dividend income, it will be excluded when calculating the Earned Income Tax Credit payment amount.

Moreover, to strengthen the investment inducement effect, the income repatriation standard for the investment-included taxation method will be raised from the existing 65% to 70%.

Taking into account the recent wage increase rates, the range of workers eligible for wage increases will be expanded from total annual salary under 70 million KRW to under 80 million KRW.

This enforcement decree amendment will be announced for public comment until the 21st of this month, and after procedures such as the vice-ministerial meeting and the Cabinet meeting, it is scheduled to be promulgated and enforced next month.