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Local Compliance InformationIncome Tax (Individual) The Scope and Judgment for the Certificate of Faithful Report
1. Overview
In line with Korean Income Tax Act revision in 2011, the individual business who are over the certain range of their annual revenue for fiscal year 2012 are introduced to submit “the certificate of faithful report” in addition. The reporting deadline is extended to file and return one (1) more month till the end of June each year.
2. The revenue range reduction for the submission of certificate of faithful report and the application timing
As the Korean Income Tax Act is revised during FY 2013 vs last year, the revenue scope of individual business which have to submit certificate of faithful report is downscaled and will be effective from FY 2014's income.
Therefore the individual income for FY 2014 have to apply the filing of the general income tax on the end of May 2015.
3. The certificate of faithful report and reporting deadline
The individual businessman who must confirm the faithful report have to submit the certificate of faithful report to the head of a district tax office in the place of tax payment when he/she file the final return of the General Income Tax. In this case, the final return period of the General Income Tax is from 1st May to 30th June each year.
² Final return period for the General Income Tax: 1st ~ 31st May each year.
² Individual businessman who confirm the faithful report: 1st May ~ 30th June each year.
4. The status of Change(the reduction of revenue criteria)
|
Business type |
Basic Revenue(Billion Won) | |
|
before |
After | |
|
Type 1: business for AgricultureㆍForestry, Mining, business for Wholesales & Retails (Except the Merchandise broker business and real estate broker business) |
3 |
2 |
|
Type 2: business for manufacturingㆍlodgingㆍrestaurant, business for electricityㆍgasㆍsteam and water, business for sewageㆍwaste treatmentㆍmaterial recycling and environmental recovery, construction business(except the non-resident building construction, included the resident building development and supply business), transportation business, business for publicationㆍimageㆍbroadcast communication and information services, business for financeㆍ insurance and merchandise broker |
1.5 |
1 |
|
Type 3: Business for real estate rental, real estate related service, rental service(except the real estate rental), Business for professional science and technology service, business for the facility management and business support service, business for public health service and social welfare service, business for artsㆍsports and leisure related service, Association and organization, repair and other personal service business, Hiring service within the house, business service (the business needed to issue the cash receipt) |
0.75 |
0.5 |
5. Review of faithful report for the revenue
The revenue criteria for the faithful report is included all of the revenue of individual businessman and if the business type is different or have more than two (2) business, it'll be judged the aggregate revenue amount which is translated by each type criteria.
5.1. How to apply if the company has more than two (2) business type or more than two (2) business places
- If the company has more than two (2) places but the same type of business, just aggregate it.
- If the company has more than two (2) places but the different type of business, it'll be applied the following calculation method.
|
Major Business Revenue + Other business revenue x |
Basic Revenue of major business |
|
Basic revenue of other business |
* Major Business: it'll be the highest revenue business among various type of business.
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