Dear Madam,

 

I am Moon Jung-ho, a tax accountant at Serim Tax Firm.

 

Kindly find my opinion on your inquiry below: 

[Whether a Deposit Is Included in Deductible Funeral Expenses]

(1) Conclusion
Deposits cannot be deducted as funeral expenses.

(2) Relevant Laws
1) Inheritance Tax Law defines funeral expenses as the amount directly spent on the funeral from the deceased's death to the funeral day and the amount spent on using burial facilities or natural burial sites.
2) In strict interpretation, the principle is to interpret according to the literal meaning of the law, and inference or extension interpretation should not be done.

 

(3) Basis for Judgment
1) The Inheritance Tax Law clearly specifies that the amount directly spent on the funeral from the deceased's death to the funeral day is considered funeral expenses (excluding burial facility costs, etc.).
2) Even though the law explicitly excludes the amount spent on burial facilities, funeral expenses and burial facility costs are usually incurred simultaneously in societal norms. Therefore, it is reasonable to apply the period stated in 1), which is 'spent from the death to the funeral day.'
3) Furthermore, if the deposit has already been deducted as funeral expenses at the time of the death of your father, additional deduction could lead to a potential issue of double deduction.
4) If, at the time of your father's death, the entire amount has not been deducted, there may be room for inclusion in funeral expense deductions for this particular inheritance, which could be a subject of debate.