[Changes in the New Year] Reduced Income Tax and Corporate Tax Burden... Up to 4 Million Won Income Deduction for Jeonwolse Loans

[Asia Economy Sejong=Reporter Kim Hyewon] From next year, the income tax burden for workers and the corporate tax burden for companies will be slightly reduced.

According to related ministries on the 30th, starting next year, the income tax bracket with a 6% tax rate will change from up to 12 million KRW to up to 14 million KRW, and the bracket with a 15% tax rate will change from 12 million to 46 million KRW to 14 million to 50 million KRW.

In this case, the tax rate on income in the 12 million to 14 million KRW bracket will decrease from 15% to 6%, reducing income tax by 180,000 KRW (2 million KRW × 9%).

The non-taxable limit for workers' meal allowances will also be expanded from 100,000 KRW to 200,000 KRW per month. Additionally, if credit card usage this year increases by more than 5% compared to last year, 20% of the increase will be refunded as an income deduction.

If total salary is 55 million KRW or less, a tax credit benefit will be given to reduce taxes by 17% of monthly rent expenses, up to an annual limit of 7.5 million KRW. For total salary between 55 million and 70 million KRW, a 15% tax credit applies. The income deduction limit for jeonse (key money) loans or monthly rent deposit loans will also increase from 3 million KRW to 4 million KRW annually.

The non-taxable limit for lottery winnings will increase from the current 50,000 KRW per case to 2 million KRW per case. This means that lottery prizes up to the average 1.5 million KRW third prize in Lotto generally will not be taxed.

Families with three or more children will be exempt from individual consumption tax up to 3 million KRW when purchasing a car. The exemption benefit applies to sales from January 1 of next year onward.

The corporate tax rate will decrease by 1 percentage point for each taxable income bracket. Accordingly, the highest corporate tax rate for companies with taxable income exceeding 300 billion KRW will decrease from the current 25% to 24%.

Additionally, a deferral system for inheritance tax payment upon business succession will be newly established, and the business succession deduction limit applied to small and medium enterprises and mid-sized companies with sales under 500 billion KRW will be adjusted to 60 billion KRW. From the inheritance portion commencing after January 1 next year, fetuses will also be included in the personal deduction targets for inheritance tax.