Income tax rate of 45% applies for annual income above 1 billion Passed income tax law for ‘tax on the rich’

Entry 2020.11.30 23:06 | Review 2020.11.30 23:30

Deduction for residents of a single dwelling in the joint name of the couple and the elderly and long-term holders

The 45% income tax rate is applied as a section of the income tax table that applies to very high-income people with annual income exceeding 1 billion won. The highest income tax rate will increase by 3 percentage points (P) from 42% to 45%.

According to the Ministry of Strategy and Finance, on the 30th, the Planning and Finance Committee of the National Assembly approved a bill to amend the tax law that included the above. According to the amendment to the income tax law, the range of the income tax base will increase from 7 to 8.

Currently ▲ 12 million won or less 6% ▲ 12 million to 46 million won 15% ▲ 46 million to 800,000 won 24% ▲ 88 million to 150 million won 35% ▲ 150 million to 300 million won 38% ▲ 300 to 500 million won 40% ▲ 42% higher than 500 million won applies. However, through the revision, 42% from 500 million to 1 billion won will be applied, and 45%, the highest tax rate, will be applied to those over 1 billion won.

The maximum tax rate is about 16,000 people, and the tax burden is expected to increase by 60 million won for taxpayers with a tax base of 3 billion won. The government plans to apply this higher tax rate from the income generated as of January 1 of next year.

At the committee meeting that same day, a partial amendment to the Term Tax Law was also resolved so that as of next year a single-family home with a joint name will be included in the comprehensive tax credit for property tax (variety tax ) for the elderly and long-term owners. Under current law, single-household households with a common name were excluded from single-household households, thus receiving no tax deductions. For this reason, it was pointed out that the tax equality for a homeowner under the common name of the couple was not correct.

Regarding the tax standard for single-family homeowners, the current single-generation owner of a single person keeps 900 million won, and the owner of a single-family home under the joint name of a couple can choose a method of taxation. advantageous. Representative Yoon Hee-sook proposed an amendment to the law to increase the tax base from 900 million won to 1.2 billion won, as the tax deduction applies to first generation and single-family homes under the couple’s joint name. . done.

However, the introduction of a reserved income tax, which includes taxes on the reserves accumulated by small and medium-sized enterprises, has failed. Initially, the Ministry of Information and Communication tried to implement the reserved income tax starting next year through a partially amended law of the Special Taxation Restriction Law, but due to opposition from SMEs, it could not be submitted to the general meeting.

Previously, the Ministry of Information and Communication announced the reserved income tax in July. An amendment to the Special Tax Restriction Act was made to impose income tax on dividends when a family business (a corporation with an 80% or more stake by the largest shareholder and related parties) accumulates excess income retained. However, it is known that the company has changed its position considering that the burden is increasing due to the income tax reserved amid business difficulties due to the new coronavirus infection (Corona 19).