File transfer income tax return by May for multiple transfers

Transfer income tax is a tax imposed on the difference in transfer value that occurs when transferring ownership of a building or land, ownership of fixed assets such as operating rights, usage rights, membership rights, transfer of real estate rights, and when transferring corporate stocks (listed and unlisted). Transfer income tax is a self-declared tax paid in the same manner as value-added tax, comprehensive income tax, corporate tax, etc. When there is an abnormality in the declaration, the National Tax Service may conduct a tax investigation.

 

When you transfer property, you must report and pay the transfer income tax to the local tax office within two months. This report is called a scheduled declaration. If you fail to make this scheduled declaration, a non-reporting surtax will be imposed. If you transfer only one property per year, a single scheduled declaration will suffice to fulfill all obligations.

 

However, if you have multiple transfers in one year, you must file a definitive return with the local tax office by May of the following year. If you fail to report within the reporting deadline, you may be subject to a tax investigation. In addition, a simple non-reporting surtax of 20% or an unreasonable non-reporting surtax of 40% will be imposed. If you fail to pay the transfer income tax, you must pay a late payment surtax of 0.022% per day.

 

If you make multiple transfers in one year, the transfer income tax imposed will inevitably increase. Since the transfer income tax is a progressive tax, the tax rate increases as income increases. Therefore, it may be advantageous to transfer one property at a time by changing the year if it is expected that the transfer income amount will increase. In addition, when disposing of several properties at once, it may be helpful to transfer properties that are deemed to have no transfer income together. Since transfer income tax is taxed by summing up, the tax rate can be reduced by the amount of loss deducted from the profit.

 

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