1.36 Million Individual Business Owners, Comprehensive Income Tax Interim Payment Extended by 3 Months

[Sejong=Asia Economy Reporter Kim Hyunjung] The deadline for the interim payment of comprehensive income tax for 1.36 million individual business owners, including small business owners and small-scale self-employed persons who suffered difficulties due to COVID-19 restrictions such as gathering bans and business operation limits, has been extended by three months.

The National Tax Service announced on the 8th that among 1.53 million individual business owners subject to this year's interim comprehensive income tax payment, the payment deadline for 1.36 million (88.9%) small-scale self-employed persons and others will be extended by three months ex officio. The interim payment of comprehensive income tax is a system where 50% of last year's comprehensive income tax amount (interim payment standard amount) is assumed as the first half of this year's payment and paid in advance, with the remainder paid during next year's final tax return.

Originally, those subject to interim payment had to pay the interim tax amount by the 30th of this month, but those eligible for ex officio extension can pay by February 28 of next year. The ex officio extension targets include small business owners subject to gathering bans and business operation restrictions, benevolent landlords, and small-scale self-employed persons.

Small business owners subject to the government's Hope Recovery Fund, or commercial landlords who reduced rent for small business tenants and received benevolent landlord tax credits, can all receive the extension benefit regardless of their income scale.

Small-scale self-employed persons are included in the support target if their income last year was below the diligent reporting confirmation criteria: ▲ 1.5 billion KRW for wholesale and retail, ▲ 750 million KRW for accommodation, food service, and manufacturing, ▲ 500 million KRW for service industries. Business owners not eligible for ex officio extension but facing management difficulties due to sales decline can apply for an extension of up to nine months. Extension applications can be made by the 26th via the National Tax Service's Hometax or mobile Sontax.

The remaining 170,000 persons excluding those eligible for ex officio extension must pay the interim tax amount by the 30th. Individual business owners with comprehensive income this year must make the interim payment, but newly started businesses or small-scale businesses with an interim tax amount below 300,000 KRW are exempt from the interim payment obligation.

Taxpayers with only income subject to withholding tax such as interest, dividends, or earned income, or those with only separately taxed rental income from housing, are also not subject to interim payment.

The interim tax amount can be paid through Hometax, Sontax, national tax accounts, or virtual accounts, and can also be paid directly at financial institutions. If the interim tax amount exceeds 10 million KRW, it can be paid in installments without a separate application. Those wishing to pay in installments should pay the amount excluding the installment tax by the end of this month and pay the remainder by February 3 of next year. For those eligible for ex officio extension, the installment payment deadline is automatically extended to May 2 of next year.

Business owners with poor performance in the first half of this year can report and pay the estimated interim tax amount calculated directly by the 30th instead of paying the notified interim tax amount. Those whose estimated interim tax amount is less than 30% of last year's comprehensive income tax amount (interim payment standard amount) are subject to estimated amount reporting. However, those eligible for ex officio extension must apply separately for an extension if they report the estimated amount.

Those with double-entry bookkeeping obligations who had a deficit last year resulting in a zero interim payment standard amount but had comprehensive income in the first half of this year must also report the estimated interim tax amount after semi-annual settlement.

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