Professor must pay W70 mln in taxes if bribe is confirmed

Professor Park Myoung-gee at Seoul National University of Education must pay around 100 million won (93,400 U.S. dollars) in back taxes if he is proven to have taken 200 million won (187,000 dollars) from Seoul Metropolitan Office of Education Superintendent Kwak No-hyun.

Park has been indicted for receiving a bribe from Kwak in return for dropping out of the superintendent election last year, when the progressive bloc decided to field a unified candidate.

The dispute continues over whether the money was in return for Park`s withdrawal of his candidacy, but tax authorities say Park must pay back taxes regardless of the nature of the money. If the bribe is confirmed, Park must pay income tax and if it was a gift, he should pay gift tax.

The National Tax Service said Wednesday that those who receive bribes should pay income tax because bribes are considered miscellaneous income. Under a revision to income tax law in 2005, money and valuables received as kickbacks and bribes are also subject to income tax.

The tax rate varies from 6 to 35 percent according to income, and those who earn more than 88 million won (82,200 dollars) has the highest tax rate of 35 percent.

If the 200 million won is considered a bribe, Park must pay 70 million won (65,000 dollars) in income tax.

People must file their income taxes by May the following year. If they fail to do so, they face a surtax of 10-40 percent of their income tax plus additional tax on the deficient amount.

If a lawsuit involving Park is prolonged and he fails to report the money to tax authorities by May next year, he could face taxes of more than 100 million won.

If the 200 million won was not a bribe, however, a gift tax will be imposed. The gift tax rate for under 100 million won is 10 percent. If a gift is valued at more than 100 million and less than 500 billion won (467,000 dollars) an additional 20 percent of the amount minus 100 million won will be imposed.

In addition, if those receiving gifts do not report them to tax authorities within three months from receipt, surtax is added.

The deadline for Park has passed since he got the money between February and April this year. Therefore, he must pay 30 million won (28,000 dollars) in gift tax and a surtax of 20-40 percent of the tax plus additional tax on the deficient amount, which grows 0.03 percent per day.

If the lawsuit ends at the end of next year, the surtax can snowball to around 20 million won (18,700 dollars), meaning Park might face a tax bill of more than 50 million won (46,700 dollars).

imsoo@donga.com