The prize money of about 1 billion KRW that novelist Han Kang, who won the Nobel Prize in Literature, will receive is not subject to tax, while prize money received from various competitions has been confirmed to be taxable.
According to the Ministry of Economy and Finance on the 12th, the 11 million krona (approximately 1.34 billion KRW) that writer Han Kang will receive along with the Nobel Prize certificate and medal is tax-exempt. According to Article 18, Paragraph 1 of the Enforcement Decree of the Income Tax Act, prize money and awards received by recipients of the Nobel Prize or awards from foreign governments, international organizations, international bodies, or other foreign organizations or funds, prize money and awards received by recipients of the Academy Award, and prize money and awards granted by the Arts Council Korea from the Culture and Arts Promotion Fund are classified as other income and are fully tax-exempt.
However, most prize money is subject to taxation. Prize money received from competitions and contests conducted by companies targeting the general public, such as the nationwide singing contest National Singing Contest, is subject to tax on 20% of the amount remaining after deducting 80% of necessary expenses. The tax rate is a total of 22%, including 20% other income tax and 2% local income tax.
Since lottery winnings have no deductible necessary expenses, tax is calculated on the entire prize amount. For amounts exceeding 2 million KRW and up to 300 million KRW, a total tax rate of 22% is applied, combining 20% income tax and 2% local income tax. For winnings exceeding 300 million KRW, a higher tax rate applies: 30% income tax plus 3% local income tax, totaling 33%.
The winner of the recently popular Netflix cooking survival variety show Heukbaek Yori-sa (Black and White Chef) is also subject to tax on the prize money. The winning prize of Heukbaek Yori-sa is 300 million KRW and is classified as other income. If 80% of necessary expenses are recognized, 240 million KRW is deducted from the 300 million KRW, and 22% tax is applied to the remaining 60 million KRW, resulting in 13.2 million KRW in taxes.
However, since Heukbaek Yori-sa is not a competition targeting the general public, there is also a possibility that it will be classified as business income rather than other income. Business income is subject to a tax rate of 3.3%. Napoli Mafia would have to pay 9.9 million KRW to the National Tax Service.
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