The National Tax Service (NTS) of South Korea has initiated a targeted outreach program aimed at enhancing compliance among taxpayers as the deadline for income tax filings approaches this May. On May 7, 2025, the NTS dispatched personalized pre-filing guidance messages to 1.19 million individuals, encouraging them to accurately report their income and avoid potential penalties.
This initiative, termed the '성실신고 사전안내' or "Honest Reporting Pre-Notification," is designed to assist taxpayers in navigating complex reporting requirements, particularly in relation to various income categories. Key items highlighted in the NTS's guidance include the reporting of capital gains from intangible assets, income from the disposal of business assets, and foreign currency income received from overseas platforms such as Google, Facebook, and Apple.
The NTS has emphasized that accurate reporting is essential not only for compliance but also for minimizing tax liabilities. In a statement, the NTS reminded taxpayers that "honest 신고 is the top priority for 절세," urging them to refer to the provided materials to ensure proper reporting.
As part of this effort, the NTS has made available a comprehensive set of resources through its online platforms, including 홈택스 (Hometax) and 손택스 (Santax). Taxpayers can access the '신고도움 서비스' or "Filing Assistance Service," which includes essential information such as filing obligations, industry-specific considerations, and historical filing records. This service aims to facilitate a smoother filing process and reduce errors that could lead to penalties.
Despite the proactive measures taken by the NTS, the agency has warned that failure to incorporate the guidance into tax filings could result in thorough verification processes post-filing. The NTS plans to analyze whether taxpayers have reflected the guidance in their submissions, and any discrepancies could lead to audits and potential penalties.
Last year, the NTS identified several cases of incorrect reporting, including instances where taxpayers misclassified business income as other income, leading to significant penalties. For example, a tax accountant who reported lecture fees as 기타소득 (other income) was found to have misclassified these earnings, which should have been reported as 사업소득 (business income) due to the nature of their work. As a result, the accountant had to amend their tax return and pay additional penalties.
Similarly, individual taxpayers have faced repercussions for failing to report income accurately. One case involved a taxpayer who received a penalty due to the cancellation of a real estate transaction, where the penalty payment was not included in their income reporting. Another taxpayer, operating a business without employees, was penalized for excessively claiming expenses that were not justified.
In light of these examples, the NTS is encouraging taxpayers to take the initiative to review their income sources and ensure that they are reporting all relevant information accurately. The agency's outreach aims to minimize errors and promote compliance, reinforcing the message that diligent reporting is the best strategy for reducing tax liabilities.
The NTS's outreach is part of a broader strategy to enhance tax compliance in South Korea, which has seen an increase in tax audits and enforcement actions in recent years. By providing tailored guidance and resources, the NTS hopes to foster a culture of transparency and accountability among taxpayers.
As the May income tax filing deadline approaches, the NTS continues to remind taxpayers of their responsibilities. The agency's proactive communication efforts are designed not only to inform but also to empower individuals to take charge of their tax obligations.
In conclusion, the NTS's efforts to facilitate accurate income tax reporting through personalized guidance reflect a commitment to improving compliance and reducing errors. Taxpayers are encouraged to utilize the resources available and to approach their filings with diligence and honesty to avoid penalties and ensure a smoother tax experience.
