Public Interest Corporation Contribution Property Report Must Be Submitted by the End of This Month... Strengthened Verification of Tax Law Violations

[Sejong=Asia Economy Reporter Kim Hyunjung] Public interest corporations must submit reports on contributed assets by the end of this month (31st). From this year, small-scale public interest corporations must also disclose their financial statements by April 30, and tax law violation verification will be strengthened.

On the 9th, the National Tax Service announced that public interest corporations with a December 2020 fiscal year-end must submit the "Report on Contributed Assets of Public Interest Corporations," "External Expert Tax Confirmation," and financial statements submitted to the competent authority to the local tax office either in writing or via Hometax by March 31.

All public interest corporations with a December fiscal year-end, excluding religious organizations, must disclose financial statements on Hometax by April 30. From this year, small-scale public interest corporations with total assets under 500 million KRW and combined income and contributed assets under 300 million KRW can disclose using a "simplified form." Others must disclose using the "standard form."

Nonprofit corporations seeking designation as donation-target public interest corporations must apply to the local tax office, not the competent authority, starting this year. Although previously recognized as donation organizations without a designation application procedure under the law, organizations newly required to be designated by the Ministry of Strategy and Finance must now apply for designation. Failure to report compliance with corporate tax law obligations to the competent authority by April 30 may result in cancellation of public interest corporation designation or public disclosure as a non-compliant public interest corporation.

The National Tax Service plans to thoroughly verify non-compliant public interest corporations by conducting compliance checks on all large conglomerate-affiliated public interest corporations through local tax office "Public Interest Corporation Task Forces." This aims to prevent cases where public interest corporations enjoy tax benefits but violate tax obligations by excessively holding stocks of specific companies. The National Tax Service will expand individual audits of public interest corporations with large assets or income and suspected non-compliance, and if there is significant suspicion of tax evasion, tax investigations will also be conducted.

To facilitate taxpayer convenience, the National Tax Service has also revamped the Hometax disclosure system. Previously, after public interest corporations completed disclosure of financial statements, the National Tax Service analyzed the disclosed data and guided corrections and re-disclosure. This year, errors detected during data entry will be displayed as "notification windows" for immediate correction. Once financial statements are entered first, related items in other disclosure forms will be automatically populated.