You must have heard a lot about gift tax and capital gains tax. The content is a bit difficult, but it is important to know and use it well to save money these days, when there are many real estate gifts. Let’s take a look at what gift tax is, who must pay the gift tax, who is obliged to pay it, and what the related gift tax rate and exemption limit are.
※ index
⊙ 1. Gift tax
· Gift and gift tax
⊙ 2. Subject to taxation and obligatory payment 증여세 면제 대상
· Gift tax taxpayer
Scope of tax for residents and non-residents 좋은뉴스
⊙ 3. Tax rate and exemption limit
Basic tax rate and special tax rate
· Exemption limit and tax increase
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Learn about gift tax
▶ What is gift tax?
Gift tax is a tax levied on a person who has acquired property for free by gifting from another person. Gift tax is a mandatory part that must be borne, and it is often done in everyday life, so it is important to note that the gift due to death during gifting is a tax subject to inheritance tax.
※ Terminology interpretation
What is a gift? The concept of gift refers to the direct or indirect transfer of tangible or intangible property or profits, or the increase in property value, regardless of the name or purpose of the act, excluding autographs and bequests.
donor: person who donates property
Beneficiary: The person who received the property from the donor
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Gift tax subject and obligatory payment
▶ Person responsible for payment (person responsible for tax payment)
A donor (individual or non-profit corporation) who has received property from another person free of charge must report and pay gift tax on the property. If the donee is a for-profit corporation, the gifted property of the for-profit corporation is included in corporate tax subject to taxation. No gift tax is levied.
Taxpayer: A person who has received property from another person free of charge
▶ Tax scope for residents and non-residents
Gift tax varies depending on whether the recipient is a resident or a non-resident as of the date of gift, and the scope of taxation and the person obligated to pay the gift tax differ. A person who has an address in Korea for 183 days or more is considered a resident, and others are classified as non-residents. In the case of a resident, the donor is obliged to pay for all donated property in Korea and overseas. In the case of a non-resident, the donor pays all donated property in Korea or the donor pays all donated property in a foreign country donated by a resident. .
Beneficiary tax scope Person obligated to pay gift tax
Residents Donees of all donated property at home and abroad
Non-resident All donors of donated property in Korea
All donors of gifted property outside the country that were gifted from the place of residence
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Gift tax rate and exemption limit
▶ tax rate
Basic tax rate Donated property
Tax base 100 million won or less 500 million won or less 1 billion won or less 3 billion won or less More than 3 billion won
Tax rate 10% 20% 30% 40% 50%
Progressive deduction None 10 million won 60 million won 160 million won 460 million won
The gift tax rate in Korea is divided into 5 sections, from 10% to 50%. Due to the tax rate of 50% if the amount exceeds 3 billion won, there are actually many cases where the company is closed without succession to the family business while running the company. For less than 100 million won, the tax rate is 10%, and there is no progressive deduction.
Special tax rate gift property
Fund use tax rate
Startup Fund 10%
10% of family business succession stocks, etc., 20% for family business succession tax bases exceeding KRW 3 billion
If the recipient is a resident and the donated property is subject to a special tax rate, the value of the donated property is usually the equivalent of the family business assets out of the value of start-up funds or stocks inherited from the family business. In the case of start-up funds, 10% is applied, and for family business succession stocks, 10%, but the tax standard is 3 billion won, and if it exceeds this, it is 20%. Basically, the gift deduction will enter 500 million won.
▶ Exemption limit
Gift tax exemption limit
donor deduction amount
Spouse 600 million won
Lineal ascendant 50 million won
Direct descendant 50 million won
(20 million won if the beneficiary is a minor)
Other relatives 10 million won
When a gift is made between relatives, tax is not incurred if it occurs within the specified amount. It is calculated as the sum of 10 years, and if the standard amount is exceeded, taxation proceeds, and after 10 years, the same amount can be exempted again. Excluding spouses, the gift tax exemption limit is small.
※ Tax increase
The tax increase is the amount that is increased by 30% if the recipient is a direct descendant who is not the child of the donor. In the case of death or death as a direct descendant, it is not applicable if it falls under the recent direct descendant.