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Biz News Korea(Eng)
S.Korean gov’t to reduce tax benefits for high earners and large firms
- Collected
- 2016.12.01
- Distributed
- 2016.12.02
- Source
- Go Direct
According to the tax revisions approved by the National Assembly’s Strategy and Finance Committee on Wednesday, the maximum tax returns on credit card spending for high-income earners whose annual salary falls between 70 million won ($59,453) and 120 million won will be scaled down to 2.5 million won from 3 million won starting 2018, one year earlier than scheduled. The refundable amount in credit card spending and pensions for those earning more than 120 million won a year will be reduced by 1 million won each to 2 million won and 3 million won, respectively.
Tax breaks for family businesses will also be eased so that they are not abused as tax-saving means for the rich. Deduction for expenditures for business dining and other entertainment would be halved to 60 million won from 12 million won. Credit for voluntary reporting on inheritance would be scaled down to 7 percent from 10 percent.
Inheritance tax on large companies that are mostly family-run also would be upped.
Large companies that are subject to cross-shareholding ban would be taxed up to 50 percent for any investment exceeding 5 percent stake in a certain entity.
The weighted value of dividend payouts would be shaved from 100 percent to 50 percent to encourage companies to use their extra cash reserves more on raising salaries for employees and investment than returning them to shareholders.
By Na Hyun-joon
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]