Tax Credit for Good Landlords Increased to 70%... Extended Until December This Year

National Assembly Finance Committee to Approve 'Amendments to the Restriction of Special Taxation Act, Income Tax Act, and Corporate Tax Act' on the 19th

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[Asia Economy Reporter Jang Sehee] 'Good landlords' who reduce rent for commercial buildings will receive a 70% tax credit on the reduced rent amount against income and corporate taxes until December of this year. Considering the COVID-19 situation, the post-management of the employment increase tax credit related to employment reduction will also be deferred for one year.

On the 19th, the Ministry of Economy and Finance announced that the Tax Incentives Limitation Act, Income Tax Act, and Corporate Tax Act amendments containing these details were approved by the National Assembly's Planning and Finance Committee. The tax law amendment passed by the committee is scheduled to be submitted to the plenary session of the National Assembly at the end of this month.

The government initially planned to apply the tax credit for good landlords until the end of June this year, but during the National Assembly discussions, it was extended until the end of December. The tax credit rate was expanded to 70% of the reduced amount, as originally proposed by the government.

The post-management of the employment increase tax credit, which provides a tax credit benefit of 4 million to 12 million KRW per increased employee, will be deferred for one year. If employment is not maintained or increased at the 2019 level this year, the tax benefits must be returned.

The original government proposal considered employment maintained if the employment increase in 2019 decreased last year but was still sustained, allowing the tax benefits to continue.

The Ministry of Economy and Finance also approved the expansion plan for credit card income deductions as is in the Planning and Finance Committee. If credit card spending increases by more than 5% compared to the previous year, an additional 10% income deduction on the excess amount will be provided.

Additionally, to introduce a nationwide employment insurance system, amendments to the Income Tax Act and Corporate Tax Act were processed to shorten the submission cycle of income payment data by employers to monthly. Statements of daily labor income payments must be submitted monthly instead of quarterly, and simplified statements of business income payments must be submitted monthly instead of semiannually.

However, the penalty for non-submission of daily labor income (from 1% to 0.25%) and the penalty for late submission (from 0.5% to 0.125%) will both be lowered compared to the current rates.

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