Gift Tax Reporting and Payment for Concentrated Work and Transfer Due by the 30th of This Month

by Lee Kwangho

Published 16 Jun.2020 12:00(KST)

"Support Voluntary Honest Taxpayers to the Fullest, but Strictly Respond to Unfair Tax Evasion"

Gift Tax Reporting and Payment for Concentrated Work and Transfer Due by the 30th of This Month

[Asia Economy Reporter Kwangho Lee] As corporations with a fiscal year ending in December last year, those subject to gift tax reporting for internal transactions and outsourcing must file and pay by the 30th of this month.

On the 16th, the National Tax Service announced that it sent guidance letters to recipients and beneficiary corporations expected to meet the gift tax criteria for internal transactions and outsourcing, based on analysis of corporate tax filings.

For gift tax on internal transactions, notification was sent to 2,615 shareholders and 1,456 beneficiary corporations that can assist with their filings. For gift tax on outsourcing, guidance letters were sent to 143 beneficiary corporations estimated to have received business opportunities during the 2019 fiscal year to help controlling shareholders and others with their filings. Individual guidance was provided to those who filed in 2018, who are subject to this year's outsourcing settlement filing.

Those required to file should complete the tax return and submit it by mail to the tax office with jurisdiction over their address or submit it in person. If the gift tax is reported by the deadline, a filing tax credit equivalent to 3% of the calculated tax amount can be received.

If the corporation’s corporate tax filing deadline was extended due to the novel coronavirus disease (COVID-19), the filing deadline for gift tax on internal transactions and outsourcing will also be extended accordingly, so it should be confirmed and filed.

The National Tax Service plans to designate dedicated staff for internal transactions and outsourcing at each tax office during this filing period to support tax filing and consultations, making it easier for taxpayers to file.

Guidance booklets, instructions for completing the tax return, and major cases are also posted on the website.

A National Tax Service official emphasized, "We will provide maximum support to ensure sincere tax filing and payment, but will strictly respond to unfair tax evasion and continue to track and tax evaded taxes to the end. In particular, we will continuously strengthen verification of cases where wealth is transferred through unfair transactions such as internal transactions."