Local Tax Card Payments Benefiting Only Legal Scriveners... Excessive Profits Through Rebates

Rebate to Legal Scriveners for Local Tax Payments with Jasacard
Monthly Payment Scale Reaches 1 Trillion Won... Thousands Benefit
Some Legal Scriveners Receive Cashback from Card Companies Equivalent to Large Corporation Salaries

[Asia Economy Reporter Ki Ha-young] As house prices soar to unprecedented levels, local tax collections exceeded 100 trillion won for the first time last year. Meanwhile, it has been revealed that some legal scriveners are profiting excessively by paying their clients' local taxes with their own credit cards.

While it is not illegal for legal scriveners to pay clients' local taxes using their cards, concerns have been raised that credit card companies are fueling cutthroat competition by offering rebates of around 0.5% of the payment amount, thereby enriching the legal scriveners.

According to industry sources on the 10th, some credit card companies provide rebates of approximately 0.5% (ranging from 0.2% to 0.7%) of the payment amount to legal scriveners when they pay local taxes using the companies' cards. The scale of these local tax payments made by legal scriveners on behalf of clients is estimated to exceed 1 trillion won per month. As of April, Card Company A, which is aggressively conducting this business, recorded over 600 billion won per month, and Card Company B handled over 300 billion won monthly. It is also known that thousands of legal scriveners have benefited from these incentives.

The structure through which legal scriveners earn additional income beyond the fees charged to clients for local tax payments is straightforward. They collect local taxes such as real estate acquisition and registration taxes in cash from clients and then pay these taxes using their own credit cards. The credit card companies then return a cashback of around 0.5% (0.2% to 0.7%) based on the payment amount. After the payment, legal scriveners use the card companies' instant withdrawal services to settle the payment and restore the used credit limit, enabling them to make further payments on behalf of clients.

Cashback Equivalent to Large Corporation Salaries... "Financial Authorities Must Address Credit Card Companies' Sales Practices"

In the case of legal scrivener offices handling payments for multiple high-end home buyers, it is reported that they earn side income by receiving cashback from credit card companies equivalent to large corporation salary levels every month. According to the Monthly Housing Price Trend released by KB Real Estate Live On, the average apartment sale price in Seoul reached 1.17734 billion won in August this year. The average acquisition and registration tax for a single apartment transaction in Seoul is 38.85 million won. Simply calculated, the cashback legal scriveners receive from credit card companies approaches 200,000 won per transaction (applying the 0.5% rate).

An official from the real estate industry said, "Legal scriveners affiliated with major real estate agencies receive rebates amounting to several million won per month from credit card companies," adding, "These legal scriveners sometimes provide rebates to real estate agencies to attract acquisition and registration tax payment orders."

Criticism has been raised that the sales practices of credit card companies, which benefit only legal scriveners, need to be improved. Since local taxes are government-administered, the merchant fee is 0%. Nevertheless, some credit card companies are absorbing losses and offering cashback to increase transaction volumes and market share. In particular, most local tax payment benefits offered to general customers are limited to interest-free installment services, so the benefits intended for home-buying customers are instead concentrated with legal scriveners. If legal scriveners use the monthly rebates worth millions of won from credit card companies as personal income without reporting it, it could lead to tax evasion controversies.

A financial industry official said, "Local tax payments by credit card on behalf of clients are being exploited as a means for legal scriveners to fatten their wallets," and added, "Strong and swift action by supervisory authorities is necessary before the side effects worsen."

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