National Tax Service Sends Notification Letters to 2,501 Expected Filers and 2,202 Beneficiary Corporations
Filing Tax Credit Available for Voluntary Filing
Penalty and Late Payment Penalty Imposed for Non-Filing
Those subject to the 2025 'Gift Tax on Internal Transactions and Business Opportunity Allocation' must file and pay by June 30.
The National Tax Service announced on June 9 that it is sending notification letters regarding the gift tax on internal transactions and business opportunity allocation to 2,501 expected filers and 2,202 beneficiary corporations.
The filing requirement applies to controlling shareholders and their relatives (donees) of beneficiary corporations that, during the 2024 business year, received internal transactions or business opportunities from related-party corporations and obtained profits as a result.
The National Tax Service is sending mobile notifications to 2,501 donees who are subject to filing. To ensure accurate filing, the agency has also been mailing notification letters and booklets to beneficiary corporations sequentially since the beginning of this month.
The gift tax on internal transactions is imposed by treating as a deemed gift the indirect benefits obtained by controlling shareholders, their children, or relatives when a related-party corporation allocates business to a corporation controlled by the individual or their family. In this case, the donees are the controlling shareholders and their relatives who are shareholders of the beneficiary corporation, while the donors are corporations related to the controlling shareholder of the beneficiary corporation that provided the business.
The gift tax on business opportunity allocation is imposed by treating as a deemed gift the indirect benefits obtained by controlling shareholders, their children, or relatives when a related-party corporation provides business opportunities to a corporation controlled by the individual or their family. Here, the donees are the controlling shareholders and their relatives who are shareholders of the beneficiary corporation, and the donors are corporations related to the controlling shareholder of the beneficiary corporation that provided the business opportunity.
If those subject to filing voluntarily file by the deadline of June 30, they may apply a filing tax credit of 3% of the calculated tax amount. However, if they fail to file and pay by the deadline, a penalty for non-filing of 20% and a late payment penalty of 0.022% per day will be imposed.
An official from the National Tax Service stated, "After the filing period ends, the National Tax Service will conduct a thorough analysis and strict verification of non-filers and those suspected of inaccurate filing," adding, "We urge all taxpayers to recognize that 'faithful filing is the best way to minimize taxes' and to file honestly."
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