Donations to Internal Church Groups Are Subject to Taxation, Court Rules

Court: "Cannot Be Considered Designated Donations"

Church members who donated to an internal church group requested tax deductions, but the court did not grant their request.

According to the legal community on August 11, the Seoul Administrative Court's Division 8 (Presiding Judge Yang Soonjoo) recently ruled against six church members, including individual A, who had donated to the Church Reform Council (Gyogaehyeop), an organization advocating church reform. The plaintiffs had filed a lawsuit against the head of the Nowon Tax Office and other tax authorities, seeking the cancellation of a comprehensive income tax assessment.

The church members made donations to Gyogaehyeop between 2018 and 2020 and claimed tax deductions by treating these donations as "designated donations." However, the tax authorities imposed taxes, determining that Gyogaehyeop was not a designated donation organization.

The court did not accept the church members' arguments, stating, "These donations cannot be regarded as designated donations." The court also considered the fact that the church was not affiliated with a foundation, and that Gyogaehyeop had issued false donation receipts in the church's name and had received a final conviction for private document forgery.

The court further stated, "Gyogaehyeop is merely an internal group and cannot be regarded as an organization affiliated with a foundation," adding, "Since the donations appear to have been used as necessary expenses for Gyogaehyeop, they also cannot be considered donations spent for the original business purposes of a foundation or church."

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