"Income of Corporate Special Lecture Instructors Classified as 'Business Income'... National Tax Service Provides Customized Pre-Guidance for Comprehensive Income Tax"

On the 16th, the National Tax Service (NTS) announced that it will provide "customized pre-guidance for accurate reporting" on items that taxpayers filing comprehensive income tax in May may easily overlook.

Earlier, on the 9th, the NTS sent a mobile notification titled "Helpful Information for Filing" to 1.15 million pre-guidance recipients. The pre-guidance details can also be checked through the "Filing Assistance Service" by accessing Hometax or Sontax.

The NTS plans to conduct a "filing content verification" by analyzing whether taxpayers reflected the individually pre-notified points of caution in their filings after submission.

Last year, when the NTS reviewed filing contents, there were cases where taxpayers who reported business income (income from business activities) as other income were subject to additional comprehensive income tax assessments despite the pre-guidance for accurate reporting.

According to the NTS, professional instructor A provided lectures to several companies and received lecture fees. The companies withheld taxes on the lecture fees as other income, and A reported the income type as other income when filing comprehensive income tax the following year. However, since A provided continuous and repetitive services independently without an employment relationship, the compensation should have been classified as business income, but it was arbitrarily classified as other income.

Accordingly, the NTS selected Mr. A as an analysis target and, after reviewing the payment statements, judged the income to be business-related and sent a comprehensive income tax explanation notice. Professional instructor A acknowledged the business nature and amended the filing by changing other income to business income, paying additional tax and penalties.

There was also a case where earned income was reported as other income and the NTS imposed additional tax. According to the NTS, executive B of a corporation retired from the company in 2022 and was re-employed as an advisor, receiving monthly advisory fees. The company withheld taxes on the advisory fees as other income, and B reported the income type as other income when filing comprehensive income tax the following year. However, the NTS determined that executive B continued to receive income monthly from the same company after retirement and was considered to have an employment relationship with the company. Ultimately, executive B admitted that the payments were wages under an employment contract and amended the filing by changing other income to earned income, paying additional tax and penalties.

An NTS official stated, "The Filing Assistance Service provides not only pre-guidance materials but also information helpful for accurate reporting to all taxpayers, and tax agents can also view the filing assistance materials provided to their clients," adding, "We ask taxpayers to recognize that accurate reporting is the best tax saving and to refer to the provided filing assistance materials to file sincerely."

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