[Global Income Tax Rate] Comprehensive summary of tax rate reporting period, tax rate, type, and target recipients!
May every year is really busy due to the new logo of the comprehensive income tax. Business owners, freelancers, and people with income outside of work must all file a comprehensive income tax return in May. If you don’t, you will have to pay taxes someday along with the penalty tax.
I think the most curious thing for new business owners is the comprehensive income tax report. Today, let’s learn about the comprehensive income tax report that beginners and freelancers must know. 종합소득세 대상자
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1. What is global income tax?
2. What kind of income is subject to global income tax?
3. Who is subject to global income tax?
4. What is the deadline for filing the global income tax?
5. What is the global income tax rate?
6. What are the types of global income tax reports?
7. How to report global income tax?
[What is Global Income Tax?]
The tax period for global income tax is from January 1st to December 31st (approximately 1 year)
(Income tax means that the income earned by an individual who has a domicile in Korea or a residence for more than 183 days (about 6 months) is taxed)
Global income tax is a tax that is paid if an individual has generated income while engaging in economic activities in the past year. You must file a report in May, and you must report and pay to the tax office of your address.
Applicable income includes interest income/dividend income received from banks, rental income through real estate rental, business income through business, workplace income through work life, or other income.
If the above income occurred as of last year, you must file a comprehensive income tax report in May of this year.
Based on financial income (more than 20 million won) and other income standards (other income – necessary expenses / more than 3 million won), you must file a comprehensive income tax report.
Just because you closed your business this year doesn’t mean you won’t file a comprehensive income tax return in May next year. You must do it!
[What is the income subject to global income tax?]
– Business Income: Income earned from the business that an individual continuously conducts
– Earned Income: Income generated in return for providing labor in general
– Pension Income: Income generated when a pension income earner receives a pension
– Interest Income: Income generated in the name of interest from public bonds, government bonds, deposits, etc.
– Dividend Income: Income generated from the distribution of profits for stocks and investments
– Other income: temporary income such as lottery winnings and prize money
[Who is subject to global income tax?]
Global income tax applies to individuals such as sole proprietors and freelancers. Regardless of your age or gender, you pay tax when you earn income.
It is not to pay based on the generation of the register. It is aimed at individuals. For example, if you earned income on the basis of your husband or spouse, you must report your comprehensive income on the basis of one individual.
Let’s talk about whether or not to report comprehensive income tax for office workers who are usually asked a lot. Office workers usually do year-end tax settlement in January and February of each year. Those who only need to report year-end tax settlement at the company are those whose income earned in a year is limited to earned income.
If you have income other than earned income (salary) from running a business, real estate rental income, or part-time job, you need to file a comprehensive income tax return once more in May. In addition, when reporting, all wages and earned income are added together to report.
Don’t forget that those who leave the company before the year-end tax settlement or workers who could not make it within the year-end tax settlement must report their income during the global income tax return period!
[When is the global income tax return deadline?]
It is usually held during the month of May every year (from May 1st to May 31st).
However, if you fall under the subject of confirmation of sincere reporting, you can report and pay until June 30th.
Recently, it was different that the comprehensive income tax reporting period was extended for about 3 months for small business owners who have suffered damage due to corona.
[What is the global income tax rate?]
tax base rate
Less than KRW 12 million 6%
More than 12 million won and less than 46 million won 15%
More than 46 million won and less than 88 million won 24%
More than 88 million won and less than 150 million won 35%
More than 150 million won and less than 300 million won 38%
More than 300 million won and less than 500 million won 40%
Over KRW 500 million and below KRW 1 billion 42%
Over KRW 1 billion 45%
The global income tax rate structure is such that the higher the income, the higher the tax rate. Until 2020, the highest tax rate was imposed up to 42%, but from 2021, tax rates of up to 45% have been imposed when the tax base exceeds KRW 1 billion.
People whose income exceeds 1 billion won for one year are called ultra-high earners.
I really envy super high earners. If you are a business with a large income, please check in advance to prepare.
[What are the types of global income tax reports?]
Expenditure rate at the time of report by type of target ledger estimate
G Simplified ledger expenses for those who have only business income and no taxes to pay
F Those who have only business income and have taxes to pay
E Those eligible for simplified bookkeeping with small income
D Standard expense ratio for those eligible for simplified bookkeeping with large income
A Person responsible for double-entry bookkeeping, which must be prepared by a tax agent Double-entry bookkeeping
B Double-entry bookkeepers capable of creating direct ledgers
C Entrepreneurs who are obliged to do double-entry bookkeeping or have filed an estimate report
S Simple/Duplicate standard/Simple
I Entrepreneurs who have been warned by the National Tax Service to report faithfully
V Rental business operator who selected separate taxation of housing rental income Simple/Double Not applicable
★ What is an autumn report?
– This is a system in which business owners report their income on their own due to lack of ledgers and documentary evidence.
Types G, F, and E are very simple reporting types in which simple expense ratio is applied to the amount of income and multiplied by the tax rate.
Type D is applied at the standard cervical rate. More taxes than applied as a simple expense ratio. If you do not have data such as labor cost, rent, purchase cost, etc.
Types A, B, C, and S receive expert help. For type A, which requires a tax agent to fill out, and type S, which requires a tax agent’s faithfulness report confirmation, it is recommended to appoint a tax agent that is most suitable for you.
Type I is a type determined by the IRS to be a conscientious taxpayer. Compared to the same industry, the report is too small to raise suspicion, so the National Tax Service conducts post-verification directly.
[How to report global income tax?]
You can report the global income tax in person at the local tax office or through an agent.
It is also available through the National Tax Service Home Tax and can be conveniently used through the mobile Son Tax.
If you apply online directly from the Hometex site, you can file a regular income tax return in person from the Global Income Tax Report and Payment menu. Don’t forget that you need a public certificate when logging in!