National Tax Overdue Interest Rate at 9.125%, Annual Interest Approaches 2 Trillion Won

[Asia Economy Reporter Kwangho Lee] The amount of interest charged on national taxes not paid by the deadline has been found to approach an annual average of 2 trillion won.

According to data disclosed on the 7th by Jeong Seong-ho, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, received from the National Tax Service, 1.7783 trillion won in late payment penalties was imposed in 2018.

The total late payment penalties imposed over five years from 2014 amount to approximately 9.3 trillion won.

Sanctions for failure to fulfill tax reporting and payment obligations under tax law are divided into underreporting penalties (tax rates 10?40%) and late payment penalties.

Late payment penalties are imposed when the tax amount is correctly reported by the deadline but not paid on time. The interest rate is 9.125% per annum.

When the National Tax Service refunds overpaid taxes to taxpayers, it adds a national tax refund premium to the principal amount, but the interest rate paid at this time is only 1.8%.

Although the national tax refund premium rate has continuously declined reflecting regular deposit interest rates, the late payment penalty rate maintained 10.95% for a long period before slightly decreasing to 9.125% in 2019.

Assemblyman Jeong pointed out, "Considering that underreporting penalties and late payment penalties are generally imposed simultaneously, even if it is regarded as a sanction for non-payment of national taxes, the late payment penalty rate is excessive."

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