Corporate Tax

When running a business as a sole proprietor, at what point does converting to a corporation become advantageous?

Is it possible to get a tax deduction on insurance for a leased vehicle?

• 1. Automobile insurance is a type of coverage insurance that is generally subject to tax deductions.
• 2. The insurance premium paid by the leasing company should be considered as part of the lease fee, as the leasing company first pays the automobile insurance premium and receives it in installments along with the lease fee.
• 3. Therefore, it is not subject to tax deduction.

What are the pros and cons of converting a sole proprietorship to a corporation?

• 1. Advantages
• The corporate tax rate is lower than the comprehensive income tax rate of individual business owners, allowing for tax savings.
• Possible rational tax reductions through the representative's salary and dividends.
• Operating the business in the name of the corporation increases credit rating and financial benefits such as loans.
• 2. Disadvantages
• When corporate shareholders and representatives need funds and take them as salaries or dividends, accounting treatment and tax reporting are necessary.
• Bookkeeping and tax reporting are more complicated.

I bought a company car with company funds; is it possible to expense it?

• 1. Business vehicles are only recognized as expenses for depreciation or leasing costs up to 8 million won per year.
• 2. Fuel costs, insurance premiums, auto taxes, and other expenses are limited to a total of 15 million won.
• Amounts exceeding this limit can be carried over and recognized as expenses sequentially.

Do I really need to write a log book?

• 1. If the cost related to the business vehicle exceeds 15 million won per year, a driving record book is mandatory.
• 2. If it is 15 million won or less, expenses can be processed within a certain range without a driving log.

I want to dispose of a company car, how should I handle it?

• 1. Taxable businesses must issue and report tax invoices.
• 2. If there is a tax-related profit or loss, if a profit occurs, it should be added to income, and if a loss occurs, it should be recognized as an expense up to a limit of 8 million won per year.
• 3. Excess disposal losses are carried forward and handled as expenses of 800 won each year in sequence.

What are the disadvantages of not submitting the corporate sincerity report?

• 1. Inaccurate Reporting Penalty
• MAX(5% of the calculated tax amount, 0.02% of the revenue)
• 2. Reasons for Random Selection for Tax Audit
• 3. Penalties for Certifiers (in case of false statements)
• 4. Corporate Tax Late Filing Processing