A view of the Ministry of Economy and Finance at Government Complex Sejong (The Korea Herald)
SEJONG -- The Yoon Suk-yeol administration is considering easing the burden of gift tax by raising the upper limit of tax-free capital transfers from the current 50 million won ($38,900), documents from relevant ministries showed Monday.
Currently, the authority does not levy gift taxes as long as parents or grandparents conduct capital transfer to their children or grandchildren within the limit of 50 million won per child.
If the transfer exceeds 50 million won, the parents and grandparents are obliged to pay the gift tax of 10-50 percent for the surpassing money after seeing deduction for the 50 million won.
Further, the deduction limit stays at 20 million won if their children or grandchildren are under 19.
Deputy Prime Minister and Finance Minister Choo Kyung-ho has also raised the necessity of relieving the burden of both gift and inheritance taxes. In his written reply to the National Assembly ahead of his recent confirmation hearing, Choo said he “would push for an extension of (tax) deduction range.”
His reply reportedly involves a plan for the Ministry of Economy and Finance to submit a motion to revise the gift and inheritance law during the second half of the year.
In late April, Rep. Yoo Gyeong-joon of the ruling People Power Party proposed a revised bill on the gift and inheritance tax, under which the upper limit for deduction would be raised to 100 million won for capital transfer to adult children and 50 million won to children aged under 19.
These are the first moves toward revising the regulation since the upper limit for tax deduction was raised from 30 million won in capital transfer to adult children and 15 million won to those aged under 19 in 2014.
Meanwhile, the taxation on capital transfers between spouses has been left untouched since the limit was raised to 600 million won in 2008, from the previous 300 million won.
By Kim Yon-se (firstname.lastname@example.org)