Futures and options taxableMini Kospi 200 futures and options will be included in taxable financial derivatives starting next month, the Ministry of Strategy and Finance said on Monday.
The ministry announced some small amendments in its previous tax code revisions that passed the National Assembly in December and will take effect from March 4.
One of most notable changes is that the government will add mini futures and options that are based on the Kospi 200, to derivatives that will be subject to taxation.
The government started imposing a 5 percent capital gains tax on returns from financial derivatives last year.
The Mini Kospi 200 futures and options are products that are the same as Kospi 200 futures and options, but they can be traded in smaller volume, starting from 100,000 won ($82.57). They were first listed on the market in July.
Kospi 200 futures and options can be traded at a minimum of 500,000 won.
Although the change in the tax law will be implemented next month, it will be applied to the market from July 1.
“Futures and options transactions are mostly affected by market volatility,” said Han Myeong-jin, an official at the ministry. “We see little possibility of the taxation contracting the trading.”
The official added the inclusion has been determined for the sake of fairness in terms of taxation among different financial products.
On the reduced tax benefit for using corporate cars, the ministry decided to exclude funeral cars.
Last year, the government and lawmakers decided to downsize the maximum amount of corporate car costs that can be deducted from taxes to a standardized 8 million won per vehicle per year. Before, a company could report 20 percent of the price of a vehicle as a business expense for the first five years. The 20 percent was considered a business expense and not subject to taxes.
The ministry also came up with more specific definitions for using corporate cars for the purpose of business. Costs that are incurred by visiting business partners, promotion events, meetings and commuting can be subject to the deduction.
In addition, the ministry will offer tax exemptions to foreign businesses and individuals who are working in Pyeongchang to prepare for the Winter Olympics in 2018. Their incomes will be exempted from the income tax and corporate income tax, it said.
BY SONG SU-HYUN [firstname.lastname@example.org]