Joseon Dynasty tax-sharing traditions meet modern interim income tax rules

While Joseon Dynasty villagers used Gunpogye and Hopogye to collectively manage tax burdens, modern business owners must check their eligibility for the November interim global income tax prepayment, as those with amounts under 500,000 won may be exempt under small-amount non-collection regulations.

During the Joseon Dynasty, village communities utilized unique forms of mutual aid groups to pool resources and share the tax burden. According to the National Tax Magazine reported by the National Tax Service, organized movements emerged centered around "donggye," which were operated at the village level to solve collective problems. In particular, the "Gunpogye" and "Hopogye" organizations, established specifically for tax payments, serve as examples of the practical wisdom of the common people of that era.

The wisdom of the Joseon Dynasty in sharing tax burdens: Gunpogye and Hopogye

In the Joseon Dynasty, there was a system called "gunpo" where people paid cloth instead of performing military service directly. However, providing gunpo was a significant burden on the livelihoods of ordinary citizens. To address this, villagers organized "Gunpogye" to collectively raise funds and share the tax burden. By pooling their strength to manage communal resources, villagers mitigated individual economic shocks.

In the late Joseon period, the "Hopoje" system was implemented, imposing military service obligations on all households, including the nobility. This led to the emergence of "Hopogye." As the tax burden increased due to the implementation of Hopoje, villagers once again organized Hopogye to raise funds collectively. This demonstrated the wisdom of ancestors who sought survival through community solidarity amidst harsh taxation realities, moving beyond simple social networking.

November interim global income tax prepayment: Checkpoints if a notice is not received

While past tax payment methods demonstrate community wisdom, modern taxpayers should pay attention to whether they receive their notices ahead of the November interim global income tax prepayment. This is because business owners waiting for interim prepayment notices sometimes fail to receive them, leading to concerns regarding missed payments or additional taxes. The National Tax Service explained that even if a notice does not arrive, the individual may fall under the categories for exclusion or the small-amount non-collection regulation.

First, those who newly started a business this year may be excluded from the interim prepayment. Those who were not business owners as of the end of last year but started a business this year, or those who suspended or closed their business before June 30 of this year, are also excluded. However, caution is required as those who resumed business after a suspension but before the interim prepayment determination date may not be eligible for exclusion.

Additionally, those with only interest, dividend, earned, or pension income, or those subject to separate taxation, may also be excluded from interim prepayment. In particular, if the interim prepayment amount is less than 500,000 won, the "small-amount non-collection" regulation applies. This is a legal standard designed to reduce administrative costs for collecting small amounts of tax and to alleviate inconvenience for taxpayers.

Exemption from interim prepayment does not waive the duty for next May's final return

Being excluded from interim prepayment or failing to receive a notice due to small-amount non-collection does not mean all tax obligations disappear. The National Tax Service emphasized that regardless of interim prepayment exclusion, taxpayers must verify their obligation to file a final global income tax return. Even if interim prepayment is not made, taxes must be reported and paid through the final global income tax return in May of next year based on this year's income.

However, the situation differs for those obligated to keep double-entry books. Those obligated to keep double-entry books, for whom there is no interim prepayment standard amount, have an obligation to report and pay directly based on their business performance in the first half of the year. Therefore, it is important to first determine whether one is an excluded subject or a subject required to report directly when a notice is not received.

Meanwhile, considering difficult economic conditions such as high inflation, the National Tax Service has decided to extend the suspension of regular tax audits for small business owners until the end of this year. Taxpayers should manage tax risks by checking the exclusion regulations for this interim prepayment period and the upcoming final return schedule in advance.

Source: original video (YouTube)