Comprehensive Income Tax Filing Made Easier... 'Full Pre-Fill Service' for Tax Calculation Expanded to 6.4 Million People

The National Tax Service (NTS) will expand the target of the 'Moduchaeum Service,' which pre-calculates and provides the comprehensive income tax amount to be paid (refunded), to 6.4 million people. This expansion means that the service will cover more than half of all comprehensive income tax notification recipients (about 12 million). The purpose is to enhance convenience for taxpayers with limited tax experience, such as delivery riders, substitute drivers, and caregivers.

The NTS announced on the 27th that comprehensive income tax filing notices will be sent via mobile and paper by the 8th of next month.

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This year, the NTS will expand the Moduchaeum Service, which pre-calculates and provides the payable (refundable) tax amount, not only to small-scale self-employed individuals but also to employees who have other income besides earned income (such as pension or other income). As a result, the service target will increase by 1.43 million from the previous 4.97 million to 6.4 million. This means that more than 53% of the 11.81 million comprehensive income tax notification recipients will receive the Moduchaeum Service.

The Moduchaeum Service targets include small-scale business operators subject to a simple expense ratio (retail and wholesale businesses with less than 60 million KRW, manufacturing and food service businesses with less than 360 million KRW, rental and service businesses with less than 240 million KRW) and taxpayers who have income other than business income (earned, pension, or other income).

Taxpayers who receive the Moduchaeum notice can complete their filing via ARS (Automated Response System). After filing by ARS phone, a text message confirming that the income tax filing has been 'successfully received' will be sent.

Additionally, the NTS will send 'Moduchaeum (Refund)' notices to 4 million personal service income earners, including delivery riders, substitute drivers, event helpers, academy instructors, and caregivers (with a refund amount of 823 billion KRW). Personal service income earners pay 3.3% tax withheld at source when receiving income from companies, and if this amount exceeds the actual tax burden, a refund occurs.

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Individuals with comprehensive income in 2022 must file and pay comprehensive income tax and individual local income tax by May 31 this year. Those subject to the diligent reporting confirmation must attach a diligent reporting confirmation form prepared by a tax agent and file and pay by June 30 this year. These targets are businesses with a certain scale of income for 2022. For retail and wholesale businesses, the threshold is 1.5 billion KRW; for manufacturing and food service businesses, 750 million KRW; and for rental and service businesses, 500 million KRW.

Taxpayers who receive the notice can electronically file without visiting the tax office by using Hometax (PC), Sontax (mobile app), or ARS phone.

During May, when comprehensive income tax filings peak, Hometax and Sontax operating hours will be extended until 1 a.m. Taxpayers can transfer payments to the account number provided during filing or pay via credit card or simple payment methods on Hometax or Sontax.

Taxpayers filing and paying comprehensive income tax (national tax) in May must also file and pay individual local income tax (local tax) to local governments. The filing and payment period for individual local income tax is the same as for comprehensive income tax, from May 1 to 31. Refund recipients can receive individual local income tax refunds within four weeks after the comprehensive income tax refund.

Taxpayers who receive the Moduchaeum notice only need to pay to the individual local income tax virtual account number stated in the notice for it to be recognized as a filing. Additionally, 228 local governments nationwide have established filing counters where comprehensive income tax and individual local income tax can be filed simultaneously.

Electronic filing allows electronic payment via Wetax (PC) or Smart Wetax (mobile app). Bank transfer without a passbook through virtual accounts is also possible. Using bank ATMs, payments can be made without a payment slip. If the tax amount exceeds 1 million KRW, installment payment applications are also available.

The NTS provides a 'shortcut screen' that allows taxpayers unfamiliar with taxes to move directly to their Hometax filing screen, and the filing screen has been simplified.

After logging into Hometax, taxpayers can check the filing type notified by the NTS and move directly to the filing screen that requires completion. Also, for Moduchaeum Service recipients, the filing screen has been improved to allow simultaneous confirmation of income amounts and detailed deduction and exemption information on Hometax and Sontax.

To prevent delays such as refunds caused by filing errors, functions that verify account validity in real-time and automatically delete duplicate filings are provided.

In addition, reflecting the high demand for mobile services, the NTS has reorganized the comprehensive income tax notice sending method to focus on mobile. Mobile notices will be sent to taxpayers under 65 years old, while paper notices will be sent to seniors aged 65 and over and those for whom mobile delivery fails.

The NTS will also provide tax support for taxpayers facing difficulties due to export downturns and wildfire damage.

For export companies, those whose 2022 export amount accounts for 50% or more of sales and have a sales tax base of 500 million KRW or more, or individual businesses related to exports selected by the Korea Customs Service or the Korea Trade-Investment Promotion Agency (KOTRA), the comprehensive income tax payment deadline is extended by three months to the end of August. However, those with financial income exceeding 20 million KRW are excluded.

Also, taxpayers residing in areas declared special disaster zones due to nationwide wildfires, such as Seo-gu in Daejeon and Gangneung-si in Gangwon, may pay comprehensive income tax by the end of August.

Those subject to automatic extension of the payment deadline do not need to provide tax collateral and may pay comprehensive income tax anytime between June 1 and August 31 if they wish. However, since the payment deadline is automatically extended, export companies and wildfire-affected taxpayers must still file comprehensive income tax by the filing deadline (May 31).

The NTS plans to actively support taxpayers who are not subject to automatic extension but apply for deadline extensions (filing and payment) due to business difficulties. Small self-employed individuals applying for payment deadline extensions are exempted from providing tax collateral up to 150 million KRW.

For those subject to automatic extension of the comprehensive income tax payment deadline and those approved for deadline extension applications, the individual local income tax payment (filing) deadline will also be extended accordingly without a separate application.

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