Sharp Increase in Improper Donation Tax Credit Cases, Over 23,000 Caught in the Last 5 Years

 

 

 

According to a recent investigation by the National Tax Service (NTS), the number of cases of inappropriate donation tax credits has significantly increased over the past five years.

According to data received from the NTS by Representative Jung Tae-ho of the Democratic Party of Korea, a member of the National Assembly’s Planning and Finance Committee, a total of 23,237 people were caught for inappropriate donation tax credits between 2017 and 2021. This accounts for 34.5% of the 67,301 people investigated.

Under the current tax law, employees can receive tax credit benefits for a portion of their donations, and corporations, etc., can deduct donations from their taxable income by treating them as expenses.

However, cases where individuals receive tax credits through the issuance of fake donation receipts or incorrect donation reporting are being caught in the NTS's sample surveys.

In particular, the detection rate surged to 63.1% in 2021, indicating that improper tax credit cases have reached a serious level.

One contributing factor to the increase in the number of detected cases is the rise in the sample selection rate from 0.5% to 1% since 2019.

Over the five years, the NTS has collected 16.5 billion KRW in taxes through sample surveys of donations. Among the 253 organizations detected as insincere donation groups, the most common case, accounting for 71.5% of the total, was the issuance of fake donation receipts.

Representative Jung Tae-ho stated, "In a situation where cases of inappropriate donation tax credits account for 30% of the total, thorough management is necessary to establish a proper donation culture."

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Sharp Increase in Improper Donation Tax Credit Cases, Over 23,000 Caught in the Last 5 Years