The Korean National Assembly passed a proposal by the Ministry of Economy and Finance (“MOEF Korea”) and the the Ministry of Interior and Safety related to Taxation of Businesses and Individuals at the end of 2020. The Amendments shall take effect in 2021. The following is a summary of the major amendments to Korea’s Tax Code and regulations related to businesses for 2021.
- Amendment of Article 88(4), Article 89 and the Presidential Decree of the Corporate Income Tax Act
This Amendment to Korea’s Tax Code clarifies the Fair Market Value and defines the Fair Market Value as the “final price” of the day for all listed shares traded over the counter or via blocks.
Before the amendment to Korea’s Tax Law, in the case when the Fair Market Value is not the transferred price, the Denial of Unfair Transaction Rule would apply, only, if the purchase price and the Fair Market value was either KRW 300,000,000 or more; or 5% of the Fair Market Value.
This exception to the Denial of Unfair Transactions Rule was abolished by this amendment.
All transactions after February 16, 2012 are covered under the amendment.
2. Amendment of Reporting Requirements of Crypto Assets under Korean Tax Law
Amendments to Korean Tax Law, as of 2021, specifically, mandates that all crypto and crypto-like assets held by residents of Korea must be reported on tax returns. The amendment applies to individuals and companies.
With the increased oversight of Crypto Exchanges and the impending regulation of Crypto Exchanges and Crypto Transactions, we suspect to see strict enforcement of this reporting requirement. For more articles on the taxation of crypto currency in Korea, please see: Taxation of Crypto Currencies in Korea.
Please check back often, IPG Legal shall be updating readers on Amendments to Korean Tax Law for Individuals within the next couple of weeks.
To schedule a consultation with a lawyer in Korea, please: Schedule a Call with a Korean Attorney.
- Korean Corporate Tax Law Amendments for FY 2021
- Korean Tax Law Amendments for Individuals for 2021
- Tax Breaks for Korean Landlords: Real Estate Taxation Basics
- Korea’s Fairness in Subcontracting Transactions Act Amendments of July 2021
- New Provisions regarding the Korean Act on Reporting and Using Specified Financial Transaction Information
- Last week’s Recap of the Top Legal Headlines in South Korea for the week of July 26, 2021:
- Korean National Tax Service Tax Law News Release to Foreign Corporate Taxpayers: Korean Tax Law Updates
- English-Speaking Business Lawyers in Seoul, Korea: Corporate Law & Compliance Team at IPG Legal
- Korean Prosecutors & Police Powers under Amended Criminal Procedure Law
- Alternative Legal Fee Arrangements at Korean-based Law Firms: Limited Scope Representation Explained