[Tax Law Amendment] Improvement of Earned Income Tax Credit Recovery Method... Enhancing Transparency and Fairness of Tax Appeals

[Asia Economy Reporter Kwangho Lee] The method of recovering the Earned Income Tax Credit (EITC) will be improved to enhance taxpayer convenience. Additionally, the reduction rate for in-kind contributions of land compensation rights will be increased.

The "2019 Tax Law Amendment Follow-up Enforcement Decree Amendment," announced by the Ministry of Strategy and Finance on the 5th, includes these and various other provisions related to the Income Tax Act enforcement decree.

Currently, when there is a recovery amount during the semi-annual settlement of the EITC, the amount is recovered annually through income tax payment adjustments. Going forward, the recovery will be made by deducting the amount from the Earned Income and Child Tax Credits paid over the next five years.

Furthermore, when land compensation rights are contributed in-kind to a Real Estate Investment Company, the reduction rate applied was at the cash compensation level (10%). This will be increased to the bond compensation level (15%).

In addition, transparency and fairness related to tax appeals will be enhanced.

Taxpayers filing appeals and the disposition authorities will be notified of the date and location of the Tax Appeal Committee meeting at least 14 days in advance, and prior inspection of case investigation documents will be allowed.

Moreover, the submission of summary statements organizing the appellant's claims and reasons will be permitted and their use as reference materials during the Tax Appeal Committee hearings will be mandatory.

Additionally, electronic commerce retail businesses, goshiwon (low-cost dormitory) operations, study room operations, and hairdressing businesses will be included among the industries required to issue cash receipts.

The amendment to the enforcement decree will be promulgated and enforced in February after going through procedures such as public notice (from the 6th to the 28th), vice-ministerial meetings, and Cabinet meetings.

This content was produced with the assistance of AI translation services.