The view of the Sejong Office of the National Tax Service. [국세청]
– In the future, the’convenient method’ of receiving medical expenses tax deductions for indemnity medical insurance subscribers and receiving insurance payments the following year will not work in the future. The government announced on the 20th that it is pursuing an amendment to the Enforcement Decree of the Special Tax Restriction Act, which subtracts the amount of medical expenses incurred after receiving the medical expense tax credit.
From the year-end settlement of the amount attributable to last year, the government had to subtract the actual loss insurance when calculating medical expenses subject to tax credits. If you spent 1 million won in medical expenses and received 500,000 won in real-life insurance, you should only receive tax credit for 500,000 won, minus the insurance money from medical expenses. As a result, some insurance subscribers claim their insurance money over the years. At the end of the year, they receive a tax credit for medical expenses and insurance money to receive double benefits. There is no problem even after the year is passed, because the actual loss insurance can be claimed within 3 years from the date of payment of medical expenses.
Until now, the National Tax Service has guided us to subtract the insurance amount from the calculation of medical expenses for that year, if we received the actual loss insurance after receiving the tax credit. However, this was just a’guide’. There was no grounds for sanctions, such as deduction for medical expenses and imposition of additional taxes on persons receiving double insurance benefits. For this reason, the National Tax Service proposed an improvement plan to the Ministry of Strategy and Finance.
The National Tax Service proposed a plan to amend the tax return by subtracting the insurance premium from the medical expenses in the year of receipt of the insurance benefits, and deducting the excess from the medical expenses in the previous year if this insurance amount exceeds the medical expenses. Suppose that a worker who received treatment last year received a tax deduction for medical expenses at the year-end settlement and received 5 million won in insurance in March this year. If you spent 4 million won for medical expenses this year, 1 million won for the excess of the insurance premium is deducted from last year’s medical expenses to report a correction, and some of the money received from the tax credit is returned to the government. If the taxpayer did not correct this and received a tax credit unfairly, the National Tax Service also suggested a plan to pay 10% of the credit as an additional tax to the Ministry of Information and Transportation.
An official from the cleaning authority said, “We plan to discuss and prepare supplementary measures by the end of this year.”
Sejong = Reporter Kim Do-yeon [email protected]
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