The major changes to the enforcement rules of the Basic National Tax Law,
the Individual Income Tax Law and the Special Tax Treatment Control Law are as
l Change in the rate
used to calculate interest on tax refunds, deemed rental income for rental
security deposits, amounts due on collection of over-refunded customs duty,
Increased to 1.8%, considering the interest rate of time
deposits recently offered by banks.
The new rate
shall be effective for the period on or after March 21, 2018. As for the deemed rental income, the new rate shall be
effective from the fiscal year beginning on or after
January 1, 2018.
l Addition to the
scope of non-taxable income
tax shall be levied on allowances received by workers listed in below table for
overtime work, night-shift work, or holiday work.
standard classification of occupations
and Guard Related Elementary Occupations
and Guard Related Elementary Occupations (94)
Cooking and Food Service Occupations
and Beverage Service Workers (442)
Store Sales Occupations
Sales Workers (521)
Telecommunication Device and Service Salespersons (5311)
Preparation Related Elementary Workers (952)
Related Elementary Workers (953)
Forestry and Fishery Related Elementary Workers (991)
Reading, Money Collecting and Parking Control Related Workers (992)
Service Related Elementary Workers (999)
The new rule shall be effective
from the fiscal year beginning on or after January 1, 2018.
l Addition to the
scope of new growth engine service businesses
Under the Special Tax Treatment Control Law, certain small or medium start-up enterprises engaging in new growth
engine service businesses can claim tax exemption at 50% ~ 75% of corporate income
taxes for 3 years. In this regard, the following businesses have been added to
the scope of new growth engine service businesses.
growth engine service businesses
Advertising agency, outdoor and exhibition advertising
research and public opinion polling
Exhibition organization under the Exhibition Industry Development Act
and technical activities
Technical testing and analysis
and geological survey, cartographic activities
This amended rule shall be
implemented from the fiscal year beginning on or after January 1, 2018.
l Increase in the
threshold rate for the tax credit for earned income increase of SMEs
Special Tax Treatment Control Law, small and mid-sized enterprises (“SMEs”) are
entitled to tax credit until the taxable year in which December 31, 2020 falls if
its rate of increase in average wages of its full-time employees is greater
than the average increase rate of all SMEs. The tax credit allowed is 20% of
the portion of wage increased. Under the revised Enforcement Rules, the current
average increase rate of all SMEs (“threshold”) of 3.3% is increased to 3.6% as
The rate of increase in the average wages of full-time employees should
be greater than 3.3% (the increase rate of the average wages of all small or
The threshold rate increased to 3.6%, considering the recent
3-year average increase rate of wages of all SMEs.