Potential Gift Tax on Former President Yoon's Inmate Funds Raises Questions

As Hankyoreh, we delve into a significant financial matter concerning former President Yoon Suk Yeol's time in detention: the substantial '영치금' (funds deposited for inmates) he received, and the potential gift tax implications. Our investigation, based on data obtained by Park Eun-jeong of the Progressive Justice Party, reveals that Yoon received over 1.2 billion won in these funds. Crucially, 209 separate deposits exceeded the 500,000 won threshold, which is the minimum amount for gift tax assessment under South Korea's Inheritance and Gift Tax Act.

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Former President Yoon Suk Yeol's 209 instances of receiving deposits of 500,000 won or more, which are subject to gift tax, amount to at least 100 million won.

This raises a critical question: will these substantial deposits be subject to gift tax? Based on the minimum threshold, these 209 instances alone amount to at least 104.5 million won. While the National Tax Service (NTS) acknowledges that deposits exceeding 500,000 won could theoretically be subject to taxation, the situation is complex. Traditionally, funds like these, intended to support inmates during their incarceration, have often been treated as non-taxable, similar to donations for the underprivileged or customary monetary gifts for events like weddings or funerals.

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The National Tax Service has stated that it can theoretically review deposits exceeding 500,000 won for taxation.

Furthermore, practical and legal challenges exist in taxing these funds. The NTS would need specific legal grounds to obtain detailed records from correctional facilities, which are not explicitly provided for under current tax laws concerning inmate deposits. Moreover, there is no known precedent for the tax authorities imposing gift tax on such inmate funds in South Korea. This lack of established practice and legal framework complicates any move towards taxation.

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Funds deposited for inmates have been considered non-taxable based on social norms, such as donations for the needy or congratulatory/condolence money.

If no gift tax is levied, Yoon would be able to receive the entire 1.2 billion won upon his release. However, a bill is currently pending in the National Assembly that seeks to establish a legal basis for the NTS to acquire such data, potentially paving the way for future taxation. Hankyoreh will continue to monitor the legislative process and the NTS's stance on this matter, as it touches upon issues of fairness, taxation, and the treatment of funds received by individuals during periods of incarceration.

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There is no legal basis for the National Tax Service to obtain related data on inmate deposits for taxation purposes.