Gift Tax on 'Ilgam Molajugi and Tteojugi' Must Be Reported and Paid by July 31

National Tax Service Sends Mobile Notices to 2,141 Expected Filers

Those subject to gift tax reporting for 2024's business favoring and business splitting must file and pay by the 31st.

The National Tax Service (NTS) announced on the 1st that it has sent mobile notifications to 2,141 expected filers.

The reporting subjects are controlling shareholders and their relatives (recipients) of corporations (recipient corporations) that gained profits by receiving business or business opportunities from special-related corporations during the 2023 fiscal year.

The NTS used big data to select recipients and recipient corporations expected to be subject to gift tax on business favoring and business splitting as reporting guidance targets. Mobile notifications were sent to the 2,141 recipients who are reporting subjects, and guidance letters and booklets were mailed to 1,871 business favoring recipient corporations and 70 business splitting recipient corporations to help recipients file accurately.

An NTS official said, "There may be cases where reporting subjects did not receive the guidance letter," and added, "If you are a reporting subject, please refer to the reporting guidance booklet posted on the tax office and NTS website to file your report."

The NTS provides various taxpayer services to prevent cases where taxpayers, unfamiliar with complex tax laws, omit reporting by mistake and later bear additional penalties. Dedicated staff for business favoring and business splitting reporting are assigned at each tax office to provide guidance and consultation, and the NTS website posts reporting forms along with instructions and examples.

After the business favoring and business splitting reporting period ends, the NTS plans to strictly verify the appropriateness of reports for non-filers and those suspected of filing insincerely.

An NTS official stated, "If gift tax reporting subjects fail to file and pay by the deadline, a 20% non-filing penalty and a daily 0.022% late payment penalty will be imposed," and urged, "Please recognize that sincere reporting is the best tax-saving method and file diligently."