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NTS Warns Against Tax Evasion via Property Gifting to Children
🇰🇷 South Korea /Economy & Trade

NTS Warns Against Tax Evasion via Property Gifting to Children

From Chosun Ilbo · (13m ago) Korean Critical tone

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • South Korea's National Tax Service Commissioner, Lim Kwang-hyun, warned against tax evasion through property gifting.
  • He stated that individuals transferring property to children instead of selling it to avoid capital gains tax could face a penalty surcharge of up to 40%.
  • This warning comes ahead of the implementation of stricter capital gains tax rules for multiple homeowners next month.

The National Tax Service (NTS) has issued a stern warning against attempts to circumvent new property tax regulations through unconventional means. Commissioner Lim Kwang-hyun explicitly cautioned that individuals seeking to avoid the upcoming capital gains tax hikes for multiple homeowners by gifting properties to their children could face severe penalties.

If multiple homeowners illegally gift their homes to their children, they could face a penalty surcharge of up to 40%.

— Lim Kwang-hyunNational Tax Service Commissioner, warning against tax evasion through property gifting.

Effective next month, the NTS will implement increased capital gains tax rates for those owning multiple homes. In anticipation of this change, the NTS has observed a potential rise in property transfers via gifting. Commissioner Lim clarified that such maneuvers, if deemed a method of tax evasion, could result in a penalty surcharge of up to 40%, effectively negating any perceived tax benefit.

We are anticipating an increase in cases of property gifting among multiple homeowners as the deadline for the surcharge postponement approaches.

— Lim Kwang-hyunNational Tax Service Commissioner, explaining the context for the warning.

This proactive stance by the NTS aims to ensure the integrity of the tax system and prevent loopholes from being exploited. The message is clear: any attempt to circumvent the new regulations through methods like disguised gifting will be met with significant financial repercussions. The NTS is committed to fair taxation and will closely monitor property transactions to uphold these principles.

Don't even think about it.

— Lim Kwang-hyunNational Tax Service Commissioner, strongly advising against attempting to evade taxes through property gifting.
DistantNews Editorial

Originally published by Chosun Ilbo in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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