[Enforcement Decree of Tax Law] Major Shareholder Criteria for Stock Transfer Tax to Remain 1 Billion KRW Until 2022

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] The major shareholder requirement for stock transfer tax, which had been repeatedly controversial due to backlash from stock investors, will be maintained at the current holding amount of 1 billion KRW. From 2023, capital gains tax on stock transfers will be fully imposed regardless of whether the shareholder is a minor or major shareholder.

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

The government originally planned to lower the major shareholder requirement for stock transfer tax from the combined 1 billion KRW of spouse and direct lineal ascendants and descendants to a combined 300 million KRW from April. However, due to investor backlash and concerns about weakening investment sentiment, it was decided to maintain the current standard (1 billion KRW) until the end of 2022.

However, the family aggregation, which the market has consistently demanded, will not be abolished. On the 5th, Lim Jaehyun, Director of the Tax Policy Bureau at the Ministry of Economy and Finance, explained in a briefing, "If family aggregation is abolished while maintaining the 1 billion KRW standard, the scope of income tax collection will be reduced compared to the current situation, resulting in a setback to the goal of enhancing tax fairness."