▲ Chairman Kwon Hyuk of Seabin Shipping attends a trial.
The government is lifting the reward cap for reporting tax evasion or hidden assets of tax delinquents to tax authorities.
In addition, high-value and habitual national tax delinquents who demonstrate a sincere commitment to paying their overdue taxes will be eligible for exemption from confinement.
The Ministry of Economy and Finance announced the 2026 tax code revision plan containing these measures.
The government is abolishing the previous reward cap of 4 billion won, which applied regardless of the scale of tax evasion or hidden assets reported, and is raising the maximum payout rate from 20% to 30%.
For example, a person reporting 100 billion won in tax evasion, who was previously limited to a maximum reward of 4 billion won under the current system, will now be able to receive up to 10.25 billion won.
While rewards are currently withheld if the additional tax collection is less than 50 million won (20 million won for customs duties), rewards will now be granted for amounts of 30 million won (10 million won for customs duties) or more.
An informant who submits crucial data for uncovering 30 million won in tax evasion, currently ineligible for a reward, will now receive 9 million won.
The government is also designating overseas trusts, pointed to as a channel for siphoning assets abroad, as eligible for rewards.
Informants reporting the failure to submit overseas trust statements will receive a reward equivalent to 10% to 15% of the fines and penalties imposed.
Furthermore, the maximum penalty for failing to submit overseas trust statements within the deadline or submitting false statements will be raised from 100 million won to 1 billion won.
The maximum reward for reporting credit card payment refusals will also be increased from 1 million won to 10 million won per year.
Requirements for lifting asset seizures targeting national tax evasion avoiders will be tightened.
Under current rules, if the estimated value of a delinquent's seized assets is less than the compulsory collection costs, public auctions lack practical benefit, qualifying the assets for seizure release.
However, if senior claims are established or maintained for the purpose of evading national taxes, the seizure will be maintained through a resolution by the National Tax Delinquency Adjustment Committee.
For instance, if delinquent national taxes amount to 3 billion won, seized assets total 3.5 billion won, and senior claims stand at 5 billion won, it currently qualifies for a seizure release.
Moving forward, if it is determined that the delinquent maintained senior claims to avoid paying taxes, the seizure can be maintained.
To induce the payment of overdue amounts, high-value and habitual delinquents who have paid 50% or more of their arrears over the past two years will be excluded from confinement applications.
Individuals who are delinquent three or more times, have been delinquent for over a year, or have total tax arrears of 100 million won or more can face up to 30 days of confinement in prisons or holding cells, but those who pay a portion and show willingness to settle will be exempt.
Considering inflation, the government is raising the per-item limit on corporate business promotion expenses that can be recognized as expenses even without proper documentation such as tax invoices or credit card sales slips.
Congratulatory and condolence expenses will change from 200,000 won to 300,000 won, while other expenses will increase from 30,000 won to 50,000 won.
The reduction rate for the non-filing penalty will be raised from 50% to 75% for individuals who file their taxes within one week after the statutory reporting deadline.
This measure aims to encourage individuals to file as quickly as possible even if they are late.
The penalty reduction rate will also be increased from 50% to 75% for taxpayers who apply for pre-assessment reviews in objection to a tax notice, but whose payment deadline passes due to delayed decisions.
The government is introducing a compliant reporting verification system for customs duties as well.
Companies with import values of less than $30 million in the previous year that apply will receive special privileges, such as a reduced rate of imported goods inspections.
Additionally, to prevent errors in tax invoice details, the designation date of preparation will be changed to supply date, and the supply date will be changed to issuance date.
(Photo: Yonhap News)
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