Shown in the photo taken Jan. 16, 2023, is a thermometer installed in central Seoul representing the amount of donations raised by the Community Chest of Korea. (Yonhap)
SEOUL, July 11 (Korea Bizwire) — The government is considering expanding tax benefits by increasing the tax credit rate for charitable donations, aiming to encourage larger contributions.
According to government sources, the tax credits for substantial donations will be expanded as part of the official economic policy direction later this year.
Currently, the government is contemplating raising the tax credit rate for donations exceeding 10 million won (US$7,730).
The tax credit for donations involves excluding a portion of the donation from the total taxable income.
Presently, the tax credit rate is 15 percent for donations up to 10 million won and 30 percent for donations over 10 million won.
By implementing a 35-percent tax credit for donations surpassing 10 million won, the total tax exemption will increase from 4.5 million won to 5 million won.
The government is evaluating the possibility of introducing a new tax credit policy specifically for donations exceeding 10 million won.
Ashley Song (ashley@koreabizwire.com)
