Increase of Simplified Taxpayer Threshold to 100 Million Won?… Ministry of Economy and Finance "No Decision Made"

The Ministry of Economy and Finance has drawn a line by stating "nothing has been decided" in response to reports that the government is considering raising the simplified VAT taxpayer threshold from an annual sales of 80 million won to around 100 million won to reduce the tax burden on self-employed and small business owners.

According to the government on the 7th, the existing simplified taxpayer threshold of 80 million won can be adjusted up to 104 million won, which is 130% of 80 million won, through enforcement ordinances. Accordingly, it is being reviewed to raise the simplified taxpayer threshold to around 100 million won through enforcement ordinances before the tax law revision scheduled for around July next year.

We have truly entered the endemic era. Our daily lives, overturned by the COVID-19 virus, are rapidly recovering. Insadong, which once only had banners expressing the pain of self-employed workers on its gloomy streets, is now bustling with the energy of foreign tourists as if nothing had happened. Even the sight of people wearing masks has become an unfamiliar scene. COVID-19 is quietly fading into a distant memory for us. Photo by Jinhyung Kang aymsdream@

In the 2024 Economic Policy Direction announced on the 4th, the government stated that as one of the support measures for small business owners, it would raise the current simplified VAT taxpayer threshold of 80 million won. However, no specific criteria were set.

Simplified VAT taxpayers are small-scale self-employed individuals with annual sales between 48 million and 80 million won, who are subject to a lower tax rate of 1.5% to 4.0%, unlike general taxpayers who pay a 10% tax rate. The previous administration raised this threshold from 48 million won to 80 million won in 2020 in response to COVID-19, and now plans to raise it further after four years.

The government explained that this reflects the inflation over time, but emphasized that specific criteria have not yet been decided. The Ministry of Economy and Finance distributed a press release on the day stating, "The government announced through the 2024 Economic Policy Direction that it will promote raising the simplified taxpayer threshold to reduce the VAT burden on self-employed and small business owners. However, the specific criteria for the increase have not yet been decided."

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