Ministry of Economy and Finance Announces and Enforces Follow-up Enforcement Decrees for 2021 Revised Tax Laws
[Asia Economy Sejong=Reporter Kwon Haeyoung] The comprehensive real estate tax burden on inherited houses will be eased in the future. Workers with an average monthly salary of 5 million won or more are excluded from the Earned Income Tax Credit payment target, and the adjustment rates by industry have also been changed.
The Ministry of Economy and Finance announced that it will promulgate and enforce the follow-up enforcement decree of the 2021 revised tax law containing these details on the 15th.
First, in the case of inherited houses, they will be excluded from the number of houses when applying the comprehensive real estate tax rate for 2 to 3 years from the date of inheritance commencement. In the metropolitan area and special self-governing cities (excluding eup and myeon areas) and metropolitan cities (excluding gun areas), they will not be counted in the number of houses for 2 years, and in other areas for 3 years. Accordingly, it is expected that cases of becoming multi-homeowners and facing a comprehensive real estate tax bomb due to suddenly inherited houses will decrease.
For corporations subject to general progressive tax rates, social enterprises, social cooperatives, and Jongjung (ancestral associations) have been added to ease the tax burden. Accordingly, a basic deduction of 600 million won, progressive tax rates (0.6~3.0%, 1.2~6.0%), and tax burden limits (150%, 300%) will be applied.
For houses scheduled for demolition by housing construction businesses, registered cultural assets in cities and provinces, and houses used for daycare centers, non-taxation can be received through exclusion from aggregation.
The Earned Income Tax Credit system has also been improved. High-income workers with an average monthly salary of 5 million won or more are excluded from the payment target, and adjustment rates by industry have been changed. For example, in the restaurant industry, the adjustment rate has been lowered from the previous 45% to 40%, so a single-person household running a general restaurant with an annual business income of 50 million won can receive the Earned Income Tax Credit starting this year.
To ease the fuel cost burden on the middle and low-income classes and self-employed workers, the individual consumption tax refund limit for fuel for compact cars has also been raised from 200,000 won to 300,000 won per year.
In addition, to reduce the taxpayer burden, considering the trend of market interest rates, the late payment surcharge rate has been lowered from 0.025% per day to 0.022%. Accordingly, a taxpayer who has not paid 10 million won will see a reduction of about 110,000 won in late payment surcharge burden over one year.
Furthermore, the tax credit rate for national strategic technology research and development (R&D) investment has been expanded to 40~50% for small and medium enterprises and 30~40% for medium-sized and large enterprises, and the scope of new growth and original technology R&D has also been expanded focusing on carbon-neutral technologies such as green hydrogen and blue hydrogen.
The 16 follow-up enforcement rule amendment bills to stipulate delegated matters in this enforcement decree will be announced for legislative notice until the 24th, and after consultation with ministries and review by the Ministry of Government Legislation, they are scheduled to be promulgated and enforced next month.
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