Court: "Pastor's Retirement Missionary Fund is a 'Gratuity'... Not Subject to Taxation"

[Asia Economy Reporter Seongpil Cho] A court ruling has determined that retirement payments received by pastors and others at religious facilities should be regarded as 'honoraria' rather than compensation for services rendered.

According to the legal community on the 22nd, the Seoul Administrative Court, Administrative Division 6 (Presiding Judge Seongyong Lee) ruled in favor of Pastor Kim in a lawsuit he filed against the Gwanak Tax Office head, requesting the cancellation of a tax assessment.

The court stated, "The money Kim was to receive under the name of retirement missionary funds was paid as compensation for his contribution to the maintenance and development of the church," and added, "It should be considered an honorarium, not compensation for personal services."

Furthermore, the court said, "Taxation on the payment cannot be deemed properly calculated based solely on the submitted documents," and added, "The entire tax assessment must be canceled."

Kim served as a senior pastor at a church in Gwanak-gu, Seoul, for over 30 years and received a total of 1.2 billion won in 2011 and 2012 under the name of 'retirement missionary funds.'

The competent tax office notified Kim that the 1.2 billion won paid to him constituted other income under the former Income Tax Act, defined as "compensation received for temporarily providing personal services," and demanded payment of approximately 110 million won in comprehensive income tax for 2012.

Kim filed a review request with the National Tax Service against the income tax imposition but, after receiving a response to pay a reduced amount of 97 million won, he filed an administrative lawsuit.

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