Major Changes in 2019 Year-End Settlement of Payroll Withholding Taxes
■ Major Changes in 2019 Year-End Settlement of Payroll Withholding Taxes
l Addition of postnatal care center expenses to the tax credit for medical expenses
Employees having annual gross salary of less than KRW 70 Million are eligible for medical expenses tax credit up to KRW 2 Million per birth for the expenses paid to a postnatal care center.
l Expansion of tax credit for donation
|
2018 |
2019 |
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Donation amount |
Tax Credit Rate |
Donation amount |
Tax Credit Rate |
|
KRW 20 Million or less |
15% |
KRW 10 Million or less |
15% |
|
Over KRW 20 Million |
30% |
Over KRW 10 Million |
30% |
l Expansion of carry-over period for tax credit for donation
|
2018 |
2019 |
|
Carry-over period for donation tax credit
o Carry-over period: 5 years o Effective for: donation made on or after January 1, 2008
|
Expansion of carry-over period for donation tax credit
o Carry-over period: 10 years o Effective for: donation made on or after January 1, 2013 |
l Expansion of tax credit for monthly housing rent
Previously, the tax credit for monthly housing rent was applicable only when the rented house was in the size of national housing unit defined in the Housing Act.
Under the amended Special Tax Treatment Control Law (STTCL), tax credit for monthly housing rent can also be applied for the house which is larger than the size of national housing unit (net 85㎡ or below) as long as the government published standard market price of the rented house is KRW 300 Million or less.
|
2018 |
2019 |
|
Tax credit for monthly housing rent
o Eligible taxpayer: employees having annual gross salary of less than KRW 70 Million o Eligible house: in the size of national housing unit
o Deduction rates: 10% (12% for employees having annual gross salary of 55 Million or less) o Max deduction: KRW 7.5 Million
|
Expansion of tax credit for monthly housing rent
o Same
o Eligible house: in the size of national housing unit or the standard market price of the rented house is KRW 300 Million or less o Same
o Same
|
l Expansion of income deduction for interest payments on long-term mortgage loans
|
2018 |
2019 |
|
Income deduction for interest paid on the long-term mortgage loans
o Deductible amount: KRW 3 Million ~ 18 Million o Eligible taxpayer: The head of household with no house or one house owned by the household o Eligible house: the standard market price does not exceed KRW 400 Million at the time of acquisition
|
Income deduction for interest paid on the long-term mortgage loans
o Same
o Same
o Eligible house: the standard market price does not exceed KRW 500 Million at the time of acquisition
|
l Adjustment to scope of tax credit for children
|
2018 |
2019 |
|
Children eligible for tax credit claim
o Children aged 6 or more
|
Children eligible for tax credit claim
o Children aged 7 or more (including children aged younger than 7 enrolled in elementary school) |
l Exclusion of amount spent in duty free shops from income deduction for amount spent on credit card
|
2018 |
2019 |
|
The amounts excluded from income deduction for amount spent on credit card
o National health insurance premium, college tuitions, costs for merchandise coupons, monthly rental fees, etc.
|
The amounts excluded from income deduction for amount spent on credit card
o Same
o Amounts spent in duty free shops (added) |