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Unsuccessful management of new tax reduction and exemption limits for similar companies in excess of withholding income tax and local transferred businesses
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(Seoul = Yonhap News) Reporter Park Yong-joo, Kim Dong-ho, Hong Gyu-bin = The owner of a single house with the common name of a couple will also be able to reduce the burden of the global property tax choosing long-term benefits for seniors and businesses.
The amendment to the tax law to raise the highest income tax rate to 45% exceeded the National Assembly Planning and Finance Committee threshold.
The National Assembly’s Planning and Finance Committee voted on an amendment to the tax law at a plenary meeting on 30.
The ruling and opposition parties have agreed on a commission-level alternative to complement the amendment to the tax law, initiated by Congressman Hee-sook Yoon, the people’s power.
The revised bill provided for allowing a family of a married couple to declare themselves as a family with a home.
This is to allow couples to choose one of the methods of receiving a seniors and long-term business deduction instead of applying the basic deduction totaling 1.2 billion won each at the rate of 600 million won each, or apply the basic deduction of 900 million won, as for a family and homeowner.
When the revised and enforced tax law is enforced, the tax burden will be reduced by up to 80% starting next year for couples who have jointly owned a home for a long time.
Starting next year, the deduction rate applied to seniors aged 60 and over is 20-40% and the long-term deduction given to holders over the age of 5 is 20-50%. If both deductions are received, the deduction limit is 80%.
A bill was also passed to change the tax law, including raising taxes for high-income people.
Among them, the amendment to the Income Tax Act contains a new section that exceeds the total income tax base by 1 billion won and increases the income tax rate in this section from 42% to 45%.
Regarding these bills, which have been referred to as “ Rise of the Rich, ” the government and opposition parties had a heated debate in the tax subcommittee of the Ministry of Strategy and Finance, but ultimately approved the government plan.
The process of amending the Special Tax Restriction Act, which includes taxing the excess retained income of a similar sole proprietorship with a high stake in the major shareholder, was missed.
The government had previously announced an amendment to the tax law that imposes income tax (taxation on undistributed income) considering the excess withheld income of similar individuals as dividends starting next year.
The essence of the system is that companies with an interest equal to or greater than 80% owned by related parties, such as the largest shareholder and relatives, will consider it a dividend and pay income tax if they accumulate more than 50% of the net income or 10% of equity.
As the backlash of SMEs with a large percentage of family businesses increased, the government reached a compromise, how to reduce the scope of the target, but was ultimately suspended without exceeding the National Assembly threshold.
The plan to establish a new limit for the reduction and tax exemption for relocated local companies was also suspended.
Currently, if the factory or headquarters are moved to a local area, the income tax and corporation tax are reduced by 100% for 7 years and by 50% for an additional 3 years.
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Deputy Prime Minister Hong Nam-ki and the Minister of Strategy and Finance said: “We tried to introduce a dividend-based system for the undistributed income of privately identified companies”, shortly before the end of the National Assembly Committee . I am very sorry for the excluded points, “he said.
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2020/12/01 00:26 sent
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