Finance Ministry finalizes corporate, property tax hikes

The Ministry of Strategy and Finance said Sunday that it had finalized details on a tax code overhaul with the main features including an additional tax on owners of multiple homes, a move intended to curb rising home prices, and the highest increase on the corporate tax rate.

Late last year, the National Assembly approved a bill that starting in April would impose an additional tax of up to 30 percentage points on owners of multiple homes.

The legislature also passed a bill under which corporations with taxable income exceeding 300 billion won ($277 million) will face a maximum tax rate of 25 percent.

As part of efforts to rein in rising housing prices, the government is also juggling an option to reintroduce tougher real estate tax laws that can be used to control rising home prices and curb speculation.

Related to this move, a special committee under a presidential fiscal reform panel is expected to soon start talks on ways to control real estate prices, government sources said.

The tax code revision also centers on offering more incentives to smaller firms and start-ups as well as job-creating industries.

Tax deductions of up to 11 million won will be offered to companies that hire so-called regular workers with more job security, and a special tax cut will be extended to small start-ups over a three-year period, the ministry said.

Separately, the tax code revision allows the Korea Customs Service to have real-time information on Koreans who buy goods worth more than $600, the maximum duty-free allowance for a traveler, using credit cards.

YONHAP