March has been quite the hectic season for us corporate and tax accountants. Amidst the busy days, I've noticed that many companies are missing out on some fantastic benefits or risking hefty penalties. So, I wanted to share this post with you all and urge you to take a look at your CIT return if you're a business owner.
1.Hiring Employees? Get Tax Credits!
Did you hire more employees this year compared to last year? If so, you could be eligible for some generous tax credits. We're talking big bucks here - up to $10,000 USD (or 11,000,000 KRW) per person! Plus, you can also claim tax credits for the social insurance amounts you paid for your new hires. Social insurance rates in Korea are usually around 10% of the salary.
2.Don't Forget to Submit Documents for Foreign Transactions!
If you're importing goods or services from a foreign HQ (whether it's a sister company or another related entity), make sure to submit the necessary documents that show the relationship and transaction figures between you and the the company. The penalties for not submitting these documents can be mind-boggling, reaching up to a whopping 70,000,000KRW
But, no need to panic just yet. The due date for submission is the end of June, so you've still got some time to get it done.
| Name of document | Fine for Violations |
| Integrated Company Report | 30,000,000 KRW(30,000USD) per report |
| Individual Company Report | 30,000,000 KRW(30,000USD) per report |
| National Report | 30,000,000 KRW(30,000USD) per report |
| International Trade Statement | 5,000,000 won per foreign special relationship |
| Summary Profit and Loss Statement for Foreign Special Relationships | |
| Declaration of Normal Price Calculation Method | |
| Data requested by the tax authority | Depending on the itemized classification, the fine ranges from 30,000,000 KRW to 70,000,000 KRW |
3.Check Your Advance Tax Payments!
Did you know that there's an interim tax filing in August? If you've already paid taxes in August, you can actually deduct those amounts from your tax liabilities.
And here's a little nugget of information - when you earn interest from your bank, you're actually paying taxes on it. Yep, it's true! About 15.4% of your interest income is automatically deducted as taxes. But fear not! You can claim a refund for the taxes you paid on interest through your CIT filing.
And it doesn't stop there. If you've had overseas transactions and received money from overseas clients after deducting taxes, you may also be eligible for a refund. Just make sure to submit the required documents and claim the taxes you paid abroad.
Make sure to take advantage of these tax benefits and avoid any potential penalties. As a tax accountant, I've seen how these little things can make a big difference for businesses.
Thank you for read my article! I hope it helps.
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