How to use tax points and installment payment of capital gains tax
I. Extension of tax payment deadline using tax points
II. Application for deferment of tax collection due to unavoidable reasons of the taxpayer 세금포인트 사용법
III. Capital gains tax installments
Did you know that you can extend the tax payment deadline by using tax points? 좋은뉴스
Today, when a large amount of tax is imposed and it is difficult to pay at once, we would like to learn how to use tax points to extend the tax payment deadline or apply for tax deferment. In addition, I would like to further explain the capital gains tax installment system.
I. Extension of tax payment deadline using tax points
First, let’s look at the tax point system. The tax point system is a system in which ‘tax points’ are granted according to the amount of tax paid, and when applying for ‘deferment of collection’ or ‘extension of payment deadline’ using the accumulated points, exemption from providing tax security is available.
How to use tax points and application for capital gains tax division
Tax point use cases
※ ‘Suspension of collection’ is a system that extends the deadline for paying tax notified, and ‘extension of payment deadline’ is voluntary reporting.
It is a system that extends the payment deadline, and the meaning is somewhat different
Tax payment qualifications for the use of tax points are tax points only when all of the following 4 conditions are met, and individuals or taxpayers are subject to extension of deadline (Article 6 of the Framework Act on National Taxes) and deferment of collection (Articles 15 and 17 of the National Tax Collection Act). It can be used as a substitute for providing tax security.
※ Taxpayer qualification requirements for use as tax points (=provision of tax payment security)
① There is no arrears as of the date of application;
② In the case of an individual, the fact of delinquency for the last two years is considered,
In the case of a corporation, there must be no history of arrears in the past two years.
③ In cases where it is recognized that there is no fear of tax loss,
④ Satisfy the approval requirements for extension of delivery date and deferment of collection
In other words, using tax points means meeting all four requirements above and providing tax security as tax points instead.
When applying for tax collection deferment or extension of tax payment deadline by providing tax payment security for tax points, download the following file, fill out the tax point application form, and submit it to the tax office.
In addition, you can use the tax payment deadline extension application form to request an extension of the tax payment deadline.
Tax point application form.hwp
Tax Payment Deadline Extension Approval Application Form.hwp
◆ Standards for granting tax points and using them
(Grant criteria)
① 1 point for every KRW 100,000 reported or self-taxed
② 0.3 points per KRW 100,000 for notice payment (excluding corporations)
(standard of use)
Mortgage exemption of ‘tax points × 100,000 won’, tax payment security replaced with tax points
◆ How to check tax points
(National Tax Service Home Tax) Inquiry / Issuance – Other Inquiry – Tax Point Inquiry
(Civil Service Office of Tax Office) Bring your ID to check at the Civil Service Office of the nearest tax office.
Ⅱ. Taxpayer’s application for deferment of tax collection due to unavoidable reasons
Deferral of tax collection is an extension of the deadline for tax payment notified as described above. Only in cases where it is recognized that the taxpayer is unable to pay national tax within the deadline or prompt deadline for certain reasons, the tax payment notice is postponed or the tax amount is notified in installments. This is a system that gives taxpayers the benefits of a deadline by deferring tax collection by re-determining the payment deadline. (Articles 15-17 of the National Tax Collection Act)
Then, let’s take a look at what are the reasons for the ‘Jisu-Yu’ to extend the payment period of the notified tax.
◆ Reasons for deferment of collection
– In case of severe damage to property due to disaster or theft
– When the business suffers significant losses
– When the business is in serious trouble
– When long-term treatment is required due to illness or serious injury of a taxpayer or a family member living with him/her
– When a mutual agreement procedure is in progress with a foreign tax authority pursuant to a tax treaty
– In case of any of the following
When the taxpayer has to bear the expenses due to illness of a relative of the taxpayer or a person who has a special relationship with the taxpayer, other than a family member living with the same person
When the income of a taxpayer who does not operate a business significantly decreases or does not exist at all
When it is difficult to collect trade receivables, etc. due to causes such as bankruptcy declaration to the taxpayer’s customer, decision to initiate company reorganization procedure, disposition to suspend bill trading, business closure due to business sluggishness, etc.
In other words, tax payment notice can be postponed or installment payment (installment notice) can be requested through application for deferment of tax collection only in the case of serious reasons such as a taxpayer’s business crisis or significant loss.
To apply for deferral of collection, you must apply to the competent tax office by [Application for Deferment of Collection] by 3 days before the due date for payment of the national tax notified or the due date for prompting for the national tax in arrears.
If there is an application for deferment of tax collection by the taxpayer, the competent tax office investigates the fact, decides whether to approve it, and notifies the approved content with 【Notice of Suspension of Collection】.
When deferring collection, tax payment security equivalent to the amount related to the deferment must be provided. In the case of providing tax security, if you meet the qualifications for using tax points as discussed above, you can provide the applicable tax points as tax security.
The deferment of collection shall be up to 9 months, but if the original reason for deferment of collection is not resolved, an extension of the deferred period may be requested within the range of 9 months in total.
Small-scale conscientious businesses can apply for or extend the collection grace period within 18 months, and the requirements for small-scale conscientious businesses are as follows.
◆ Requirements for small-scale conscientious businesses
1. The amount of income in the immediately preceding taxable year is not more than 600 million won;
2. Not be punished as a tax offender within 5 years
3. There must be no delinquent payments more than 3 times in the last 1 year
4. National tax arrears less than 5 million won
5. Loss disposition amount less than 5 million won for the last 3 years
6. Person responsible for double-entry bookkeeping: keeping books and keeping records according to double-entry bookkeeping
7. Person responsible for business account: Opening and using business account
8. Entrepreneurs subject to membership in credit card merchants: Sign up as credit card merchants
9. Person obligated to join a cash receipt affiliate: Sign up as a cash receipt affiliate
III. (In case capital gains tax exceeds KRW 10 million) Transfer tax is paid in installments
Apart from applying for tax payment extension and tax deferment using the tax points discussed above, you can also apply for installment payment of capital gains tax.
However, if the transfer tax exceeds KRW 10 million as follows (the amount of tax to be voluntarily paid on the preliminary return and the amount of the tax to be paid on the final return), you can apply for capital gains tax in installments, and the transfer tax can be paid in installments within two months after the due date. At this time, the tax amount paid in installments is not subject to penalty tax for non-payment, even if the payment deadline has passed.
If the tax to be paid is 20 million won or less, you can apply for installment payment for the amount exceeding 10 million won. .
For example, if the calculated amount of transfer tax is KRW 30 million and the transfer tax payment deadline is March 2019, then KRW 15 million is due by March 2019, and the remaining KRW 15 million is due by the end of May 2019. If the transfer tax is 15 million won, you can pay 10 million won by the end of March and the remaining 5 million won by the end of May, two months later.
However, it should be noted that local income tax, which is levied at 10% of the transfer tax when reporting transfer tax, is not paid in installments and must be paid in one lump sum.