l Limit established for employment income deduction
2019 |
2020 |
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Employment income deduction:
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Established the maximum limit for employment income deduction:
o Maximum limit for employment income deduction: KRW 20 Million |
l Temporary increase in income deduction limits for credit card usage
2019 |
2020 |
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Deductions for credit card usage:
o Applicable to amount spent exceeding 25% of gross earned income o Deduction rate of 15 ~ 40% applied depending on payment method
o The cap on income deduction: KRW 2 ~ 3 million depending on earned income level
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Increase in the limit on income:
o Same as left o Different deduction rates applicable by months
o Increase in the cap on deduction by KRW 0.3 Million for 2020
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l Adjustment to scope of tax credit for children
2019 |
2020 |
Children eligible for tax credit claim: o Children aged 7 or more o including children aged younger than 7 enrolled in elementary school |
Children eligible for tax credit claim: o Same as left o Deleted |
l Revised method of deducting donation carryover
2019 |
2020 |
Order of donation deduction: o Donation incurred in relevant tax year is deducted first o Donation carried over from previous tax year is deducted second |
Order of donation deduction changed: o Donation carried over is deducted first
o Donation incurred in relevant tax year is deducted second |
l Expansion of tax credit for monthly housing rent
2019 |
2020 |
Tax credit for monthly housing rent:
o Eligible taxpayer: taxpayers having annual gross salary of less than KRW 70 Million (having global income of less than KRW 60 Million) o Deduction rate: 10% for employees having annual gross salary of 70 Million or less (for taxpayers having global income of 60 Million or less) o Deduction rate: 12% for employees having annual gross salary of 55 Million or less (for taxpayers having global income of 40 Million or less) o Max deduction: KRW 7.5 Million |
Adjustment in threshold for taxpayers having global income: o Same as left
o Same as left
o Deduction rate: 12% for employees having annual gross salary of 55 Million or less (for taxpayers having global income of 45 Million or less) o Same as left |
l Extended foreign tax credit carryforward period and allowed deduction for unused foreign tax credits
2019 |
2020 |
Application of foreign tax credit:
o Foreign tax credit limitation
o Carryforward period for tax credits in excess of limitation: 5 years
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Extended foreign tax credit carryforward period and allowed deduction for unused foreign tax credits: o Same as left
o Carryforward period: 5 years à 10 years o Foreign tax credits unused during the carryforward period will be deductible in the year following the expiration |
l Increased tax exempt limit of gains from exercising stock options in venture companies
2019 |
2020 |
Tax exemption of certain gains from exercise of stock options by directors and employees of venture companies:
o Gains from exercising stock options granted by a venture company (market price – exercise price) o Tax exemption limit: KRW 20 Million per year o Application period: until December 31, 2020
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Increased the scope and the limit for tax exemption:
o Gains from exercising stock options granted by an unlisted venture company and venture company listed on KONEX o Tax exemption limit: KRW 30 Million per year o Application period: until December 31, 2021
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