Gangdong-gu Office Provides Tax Benefits through New Local Tax Policies

- Implementation of various tax relief measures for individuals and small businesses impacted by economic recession and inflation

   - Two-year extension on reduction in acquisition tax for hybrid cars and first-time homebuyers

On the 12^th, Gangdong-gu Office (Head: Lee Soo-hee) announced that local residents and businesses experiencing difficulties due to economic recession and inflation will benefit from tax relief measures following the enforcement of local tax laws, including the Framework Act on Local Taxes, on the 14^th of last month.

The tax bases for the lower two tiers of personal local income tax and national income tax have been adjusted from KRW 12 million to KRW 14 million, and from KRW 46 million to KRW 50 million, respectively. This is expected to reduce the income tax burden of the middle class who mainly fall within these tax bases. In addition, the tax burden on individual business owners will be alleviated since the previous year's value-added tax base for the place of business portion of the resident tax, which was previously set at a minimum of KRW 48 million, will be increased to a minimum of KRW 80 million.

The tax rates for each corporate and local income tax bracket have been reduced by 0.1%p each, thereby easing the tax burden on businesses. In addition, Gangdong-gu Office introduced a disaster loss deduction system where a portion of corporate and local income taxes can be deducted if a business suffers property losses due to natural disasters. The district also provides support measures for companies experiencing difficulties in their operations due to unexpected accidents.

To promote the proliferation of eco-friendly cars and encourage technological development, the office extended the acquisition tax exemption for hybrid car buyers for another two years at the current level of KRW 400,000. Individuals can request a refund for any acquisition tax paid before January 1, 2023.

Individuals purchasing a home that is priced at KRW 1.2 billion or less based on actual transaction prices for the first time in their lifetime will be exempted from the entire amount of the home acquisition tax within a limit of KRW 2 million. The new tax policy will apply retroactively to acquisitions made after June 21, 2022, and those who have already paid the acquisition tax can apply for a refund.

The introduction of the property tax on housing deferral system for senior citizens allows eligible homeowners to defer property tax payments until the time of property disposal (e.g. transfer, gift, inheritance).

* (1) Over 60 years of age or held for over 5 years; (2) 1 unit, 1 house (3) Gross salary of KRW 70 million or less in the previous taxable period (comprehensive income less than KRW 60 million), (4) Exceeding KRW 1 million in property tax for the relevant year; (5) No local tax or national tax arrears

In addition, Gangdong-gu Office has introduced or extended several tax reduction systems for price stability and social welfare. More details are available by contacting the Gangdong-gu Local Income Tax Division or checking the Ministry of the Interior and Safety's website.

Gangdong-gu Office