Results and Highlights of the 2024 Tax Law Amendment Deliberation

Published on December 27, 2024
Published by Tax Policy Analysis 1, Estimates & Tax Analysis Department

   The purpose of this report is to introduce and help the public understand the tax law amendments scheduled for implementation beginning in 2025 by providing a summary of the National Assembly's tax law deliberation process and the results of such deliberation. To this end, the report reviews the National Assembly's tax law deliberation history and the key provisions of the amendments and estimates theireffects on revenue. In addition, the report summarizes the major issues discussed during the deliberation process that were not reflected in the final amended tax laws.
   In the individual income tax category, the financial investment income tax wasscrapped and virtual asset taxation postponed to invigorate the asset market; a marriage tax credit was newly introduced to support marriage, childbirth, and child-rearing, and childbirth support payments received from a workplace were made fully tax-exempt; and stocks, etc. were added to eligible assets subject to the carryforward of capital gains tax. In the corporate income tax category, the tax credit rate for the increased integrated investment tax credit was raised, and the application period for R&D tax credits for new growth/fundamental technologies and national strategic technologies was extended to promote corporate investment and R&D support; and the tax rates for small corporations subject to the confirmed compliant tax reporting system were raised to enhance tax equity. In the consumption tax category, the individual consumption tax exemption on eco-friendly vehicles was extended, while the exemption limit for hybrid vehicles was reduced; and the application period for traffic, energy, and environment taxes was extended. In the local tax category, families raising multiple children have been made eligible for increased vehicle acquisition tax exemptions, and a house acquisition tax exemption was newly introduced for properties acquired in areas with decreasing populations. The National Assembly Budget Office estimates that these tax amendments will result in a KRW 309 billion (2025-2029, cumulatively) decrease in tax revenue over five years.