Proposal to Amend Local Tax Act for Intelligent Buildings
Full-Scale Launch of Tax Administration to Support Corporate Growth
Seoul's Gangnam District is set to actively pursue innovative tax administration to support corporate growth, alongside proposing an amendment to the Local Tax Act that would abolish the additional property tax rate imposed on intelligent buildings. This move positions Gangnam at the forefront of efforts to improve existing unreasonable tax systems.
The district recently proposed abolishing the 5?10% additional property tax rate currently levied on intelligent buildings equipped with automated facilities for heating and cooling, water supply and drainage, fire prevention, and security. It also suggested establishing a new tax reduction system to encourage eco-friendly construction. In Seoul, notable intelligent buildings include Gangnam Finance Center, Samsung Town, and COEX.
From November last year to March this year, the district conducted a five-month on-site investigation to check for omissions in the application of the additional tax rate and to uncover new tax sources. However, it recognized the need to improve the current tax structure, which does not align with the ongoing emphasis on sustainable, eco-friendly, and low-carbon policies, and therefore proposed a legislative amendment.
At the end of last month, Gangnam District won the top prize for its proposal to amend the Local Tax Act regarding intelligent buildings at the “2025 Seoul City and Autonomous Districts Joint Workshop on Local Tax System Improvement,” held at the Sokcho Training Center. The event was co-hosted by the Seoul Metropolitan Government and the Korea Local Tax Institute. Final awardees were selected through a first-round document review and a second-round presentation evaluation. Gangnam District received the highest score in the on-site vote and was also chosen as Seoul’s representative district for the Ministry of the Interior and Safety’s Local Tax Development Forum.
Gangnam District is also accelerating tax administration to support business growth. As a rule, tax audits for small business owners and micro-enterprises are refrained from, except in cases where there is clear evidence of tax evasion. The advance notice period has been extended to 20 days, and taxpayers can now choose the timing of their audits. After an audit, tailored consulting is provided to minimize repeated mistakes and tax risks.
In particular, considering the frequent cases of retroactive taxation following acquisition tax reductions, the district has designated 649 corporations that received such reductions as key consulting targets. For the 75 corporations that benefited from property tax reductions, advance notifications are sent to encourage the timely submission of change reports and proper tax payment.
The district also plans to expand on-site, face-to-face tax consultations. Starting with the “Early Summer Picnic” in Dogok on June 14, free one-on-one consultation booths will be set up at the Gaepo Market Beer Festival in August, the Youngdong Market Beer Festival in October, and more. Customized consultations will also be offered at the “Entrepreneurs’ Street” festival in September. These services will be provided through public-private partnerships and volunteer efforts by Gangnam Tax Office, the Korea Association of Certified Public Tax Accountants, and Shinhan Bank, among others.
Gangnam District Mayor Cho Sungmyung said, “In these challenging economic times, we aim to break away from conventional tax administration and proactively present a new paradigm. We will continue to pursue innovative tax administration to protect taxpayers and foster mutual growth between businesses and the local community.”
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