[Contribution] Tax agency to help find unclaimed income tax refunds

Kim Tae-ho (National Tax Service)

Kim Young-chul, a food delivery man in Seong-dong, Seoul, recently received a text message from the National Tax Service informing him of unclaimed income tax refunds over the past five years. The message was suspicious, Kim said, but he quickly recalled a colleague telling him how convenient the tax refund system was on the ‘Hometax’ website and how he received a quick refund. income tax in May. Kim then immediately logged onto the Hometax website and quickly learned that he had 150,000 won in unclaimed tax refunds.

According to a Korean Employment Information Services report on the number of platform workers and their working conditions released a year ago, the number of platform workers providing food delivery, shipping and transportation amounted to about 2.2 million, accounting for about 8.5% of the total in Korea. As demand for contactless services grew rapidly under the social distancing measures that continued during the COVID-19 pandemic, the number of individual service providers also shifted to platform-based industries.

Individual service providers are those who generate income from their personal efforts or skills. Food delivery people, teachers at private educational institutions, replacement drivers, private duty nurses, event staff, etc., all come under the category of personal service providers. These personal service providers are subject to a withholding tax of 3.3% (a national tax of 3% plus a local tax of 0.3%) on the remuneration they receive for their services.

When deductions such as the personal deduction, spousal deduction, and pension contribution deduction are applied, the actual amount of tax that individual service providers with low annual incomes must pay may be less than the 3.3% that they have already paid. In this case, these taxpayers are eligible for a tax refund. However, with regard to income tax refunds, the tax administration can only authorize the refund when the filing of the tax return is complete. Taxpayers who are unaware of the tax filing rules often get no refund, or they only get a refund after hiring a tax accountant.

As part of a “proactive governance” approach, the NTS has worked to facilitate a simpler and more convenient tax refund system for individual service providers to obtain reimbursement without costly accounting services. tax. Using the collected data, the NTS informed about 3.03 million taxpayers for 630 billion won in tax refunds, while making a major structural reform of the tax filing system to facilitate access to filing. income for each taxpayer.

In addition, from the end of September, through the “Tax Refund After Due Date” notification, the NTS helps taxpayers claim refunds that have not been claimed for five years. The NTS notified about 2.25 million individual service providers of 274.4 billion won in tax refunds. Taxpayers can receive 10,000 to 3.12 million won, depending on their individual taxable income.

The NTS has also streamlined the tax refund reporting system so that individual service providers can apply for tax refunds easily and conveniently. Individual service providers who are notified of tax refund eligibility by SMS can check the refundable tax amount on the front page of the “Hometax” website or its mobile version “Hand Tax” and can use the “Filling Service with one click”. which only asks for the account number for refunds to complete the filing process. In addition, the NTS provides a short, easy-to-follow video guide to inform taxpayers of the easiest way to file a refund request. tax without any problem.

Through the “post-due date tax refund”, the NTS anticipates that real benefits will be given to the households of individual service providers. In the future, the NTS hopes to fulfill its national revenue collection functions and that more people living in Korea will know about its support services.

By Kim Tae-ho

Kim Tae-ho is Deputy Commissioner of the National Tax Agency. The opinions expressed in this article are his own. — Ed.

By Korea Herald ([email protected])

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