Deductions Available For May Income Tax Filers

Park Su-jin, who lives in Dongjak-Gu, Seoul, and works for a company, recently found a receipt for a donation he made. He regretted that he didn’t get a yearly income tax deduction from his taxable income for his donation, two million won, last year.

Starting this year, in cases like Park’s, people didn’t receive an earned income deduction because of insufficient documentary evidence will largely decrease. The Ministry of Finance and Economy has amended the tax code to benefit those who didn’t get an earned income deduction on their yearly income tax return. These people can request an additional deduction within two years of the original tax return period.

They can ask for it from the National Tax Service and get income tax returns. If a person didn’t get an earned income deduction because of insufficient documentary evidence, that person can get a deduction by submitting documentary evidence within two years. A person who paid retirement income taxes also can be rescued.

Until now, people can get additional income deductions when they summit documentary evidences about omitted income deductions for the consolidated income tax period (May 1 to May 31 every year).

Lee Jong-gyu, a chief of the tax system section in the Ministry of Finance and Economy explained, “Last year, we amended the national tax law. Now people can exercise a right of rectification about their income taxes and retirement income taxes as well as the composite income tax and the corporation tax. However it is more convenient to conduct their omitted deductions for the consolidated income tax period.

According to the amended law, if a person leases a costly house, which is more than 600 million won by current tax standard values, he should pay an income tax. Originally, a person having two houses would not have to pay an income tax when he leased the other house. However, if he has a costly house, he should pay an income tax.

In this case, the taxable income rule was “more than 600 million won by tax standard value, and more than 50 pyong of exclusive area,” up until 2002. But from 2003 onwards, instead of using the area standard, the law was changed to read: “more than 600 million won by tax standard value.”

People can also get tax deductions when they file a composite income tax return over the internet. All they need to do is visit the National Tax Service homepage (www.nts.go.kr), input their data into an electronic document, and file their income tax return.

People who volunteered their labor in special disaster areas such as Typhoon Maemi and the Daegu subway accident are eligible for a special income deduction, 50,000 won per day, when they submit a document confirmed by a self-governing body to the National Tax Service. If they use heavy equipment like an excavator, they can get another income deduction covering operational expenses such as fuel and material costs.

Jin-Hup Song jinhup@donga.com