Chapter 7 Value Added Tax Act

Section 1 Basic Theory of Value Added Tax
Section 2 General Provisions of the Value Added Tax Act
Section 3 Taxable Transactions
Section 4. Tax rates and exemptions
Section 5 Tax Base
Section 6 Transaction Collection and Tax Invoices
Section 7 Calculation of tax payable
Section 8 Value-added tax payment procedures
Section 9 Simplified Taxation

Chapter 8 Income Tax Act

Section 1 General Provisions
Section 2 Interest and Dividend Income
Section 3 Business Income
Section 4: Earned income, pension income, and other income
Section 5 Special Cases for Calculating Income Amount
Section 6 Calculation of Comprehensive Income Tax Base
Section 7 Calculation of Comprehensive Income Tax
Section 8 Retirement Income Tax
Section 9 Comprehensive and Retirement Income Tax Payment Procedures
Section 10 Capital Gains Tax
Section 11 Tax obligations of non-residents and foreign corporations

Chapter 9 Inheritance Tax and Gift Tax Act

Section 1 Inheritance Tax
Section 2 Gift Tax
Section 3 Valuation of Property

Chapter 10 Local Tax Law

Section 1 General Provisions on Local Taxes
Section 2 Local Tax Act

Chapter 11 Comprehensive Real Estate Tax Act

Appendix 'List of Tax Law Amendments for 2025 [Introduction to Tax Law]'

preface

Last year and early this year, several revisions were made to 'Introduction to Tax Law ②', the main contents of which are as follows.

The Value Added Tax Act provides a basis for the head of the competent tax office to impose value added tax on an ad hoc basis in order to prevent tax evasion, and increases the surcharge rate for general taxpayers who are undercover business operators from '1%' to '2%', and the surcharge rate for simplified taxpayers who are undercover business operators from '0.5%' to '1%'.
In addition, there were revisions such as adding animal blood supplies prepared for treatment, prevention, and diagnosis purposes to the value-added tax exemption target and extending the special tax deduction period for issuing and transmitting electronic tax invoices.

In the income tax system, the financial investment income tax was abolished to develop the capital market and protect domestic investors, and the capital gains tax system for stocks, etc. was maintained.
In addition, the full amount of salary paid by a company to an employee or his/her spouse in up to two installments within two years after the child's birth is not subject to taxation, and the profits earned by executives or employees by providing goods or services produced or supplied by the company or its affiliates to executives or employees at a discount are defined as earned income, while profits that are not permitted to be resold and are intended for consumption by the executives or employees are not subject to taxation.
Lastly, amendments were made to apply a 20% withholding tax rate to income received by a resident foreign professional athlete who provides services under a contract with a professional sports team, regardless of the contract period.

In the inheritance tax system, when applying the business inheritance deduction to individual business owners, non-business land among the land used for the business is excluded from the business inheritance deduction.
Meanwhile, in the past, only for the deceased or the heir, if there was a jointly inherited house as a minority shareholder due to inheritance from a third party that occurred before the death of the deceased, the requirement of one house per household for the inheritance tax deduction for cohabitation housing was considered to be satisfied. However, if the spouse of the heir also has a jointly inherited house as a minority shareholder due to inheritance from a third party that occurred before the death of the deceased, the requirement of one house per household is considered to be satisfied.

Among other tax laws, the Local Tax Act stipulates that if a taxpayer or the head of a local government purchases real estate, etc., which is recognized as having the same or similar area, location, type, and use as the standard market price, but acquired during a period other than the period from one year prior to the acquisition date to the expiration date of the reporting and payment deadline, out of the period from two years prior to the acquisition date to the expiration date of the reporting and payment deadline, the taxpayer or the head of a local government may, after deliberation and resolution by the Local Tax Deliberation Committee, recognize the value of the purchase, etc. as the transaction price, etc. of the acquired real estate, etc.

In this edition, we have carefully analyzed the contents of the revised tax law and provided easy-to-understand explanations using diagrams.
And, by reinforcing example problems and multiple-choice questions, we have improved the understanding of tax law, and have changed words and phrases to simpler expressions and streamlined sentences to make them easier to read.
In particular, key concepts and terms for understanding tax laws are highlighted in blue, and related content is linked to pages for integrated learning across tax laws. In addition, a list of revised tax laws is provided as an appendix to the book to help readers quickly grasp the revised contents.

Finally, I would like to express my deepest gratitude to President Kim Hee-cheol of Sanggyeongsa, who has always given me unstinting consideration so that I can write a good book, and to Managers Seong Jin-woo, Kim Byeong-hun, and Bae Jeong-yeong, who have worked hard to polish the editing of this book from its first edition to its 31st edition this year.
I would also like to express my gratitude to tax accountants Ha Young-seong and Lim Jae-hyeon for their advice on writing, and to tax accountants Son Jae-ho and Ko Gyeong-tae for their help in organizing and proofreading the manuscript.

We promise to continue to meet you with better books in the future, and we wish you all the best.


2025.
3. 1.
Lim Sang-yeop and Jeong Jeong-un