Article 59-4 (Special Tax Credit)

Where a resident with earned income (excluding daily workers; hereinafter the same in this Article) pays insurance premiums under an insurance contract for insurance where the refunded amount upon maturity does not exceed the premiums paid, the amount equivalent to 12 percent (15 percent in the case of subparagraph 1) of the premiums paid in the following subparagraphs shall be deducted from the comprehensive income tax calculated for the relevant taxable period. However, if the aggregate amount of insurance premiums by each of the following subparagraphs exceeds 1 million won annually, the exceeding amount shall be deemed non-existent, respectively. <Amended on May 13, 2015> 1. Insurance premiums for the disabled-specific insurance that use persons with disabilities among basic deduction 대상자 as the insured or beneficiary, as prescribed by a Presidential Decree 2. Insurance premiums prescribed by a Presidential Decree that use basic deduction 대상자 as the insured (excluding insurance premiums for the disabled-specific insurance under subparagraph 1)

Where a resident with earned income pays educational expenses prescribed by a Presidential Decree for the resident and basic deduction 대상자 (who are not subject to age or income limitations, but for institutions under subparagraph 3 (b), only persons under 18 years of age as of the end of the taxable period are applicable) during the relevant taxable period, the amount equivalent to 15 percent of the amounts in the following subparagraphs shall be deducted from the comprehensive income tax calculated for the relevant taxable period. However, educational expenses prescribed by a Presidential Decree for which income tax or gift tax is exempt shall not be deducted. <Amended on Dec. 23, 2014, Dec. 20, 2016, Aug. 17, 2021, Dec. 31, 2022, Dec. 23, 2025> 1. The aggregate amount of educational expenses under the following items paid for spouses, lineal descendants, siblings, adopted children, and foster children who are basic deduction 대상자 (hereinafter referred to as "lineal descendants, etc." in this subparagraph). However, educational expenses paid to graduate schools or paid by lineal descendants, etc. using student loans under subparagraph 2 (a) shall be excluded, and the limit shall be 9 million won per person annually for university students, and 3 million won per person annually for children before elementary school enrollment and elementary, middle, and high school students. a. Educational expenses paid to schools under 「the Early Childhood Education Act」, 「the Elementary and Secondary Education Act」, 「the Higher Education Act」, and special laws, or paid to take examinations under 「the Higher Education Act」, Article 34, Paragraph 3. b. Educational expenses paid for lifelong education facilities or courses listed below. 1) Lifelong education facilities of school type that recognize academic background of high school graduate or below under 「the Lifelong Education Act」, Article 31, Paragraph 2, lifelong education facilities that can use the name of a vocational college under Paragraph 4 of the same Article (hereinafter referred to as "vocational colleges"), and lifelong education facilities of distance learning type under Article 33 of the same Act (hereinafter referred to as "distance learning colleges"). 2) Courses under Article 3 and Article 5, Paragraph 1 of 「the Act on Recognition of Credits, etc.」 and 「the Act on Obtaining a Degree through Self-Study」, as prescribed by a Presidential Decree (hereinafter referred to as "degree-seeking courses" in this paragraph). c. Educational expenses paid to foreign educational institutions prescribed by a Presidential Decree (for residents working in Korea who pay educational expenses for students of foreign educational institutions, only students prescribed by a Presidential Decree shall apply). d. Educational expenses paid to childcare centers under 「the Infant Care Act」, academies under 「the Act on the Establishment and Operation of Academies and Tutoring Business」, or sports facilities prescribed by a Presidential Decree, for children before elementary school enrollment (in the case of expenses paid to academies and sports facilities, only the amount prescribed by a Presidential Decree shall apply). e. Educational expenses paid to academies teaching arts among academies under 「the Act on the Establishment and Operation of Academies and Tutoring Business」, Article 2, Item 1, or sports facilities prescribed by a Presidential Decree, for elementary school students under 9 years of age or in the second grade or below as of the end of the taxable period, within the amount prescribed by a Presidential Decree. 2. The aggregate amount of educational expenses under the following items paid for the resident. a. Educational expenses falling under subparagraph 1 (a) through (c). b. Educational expenses paid for courses equivalent to at least one semester of university (including vocational colleges, distance learning colleges, and degree-seeking courses) or graduate school, and part-time courses under 「the Higher Education Act」, Article 36. c. Tuition fees paid for vocational ability development training conducted at vocational ability development training facilities under 「the National Lifelong Vocational Training Act」, Article 2. However, the amount obtained by deducting subsidies, etc. prescribed by a Presidential Decree shall be used. d. Educational expenses paid for the repayment of principal and interest of student loans prescribed by a Presidential Decree. However, amounts paid additionally due to overdue loan repayment, etc. as prescribed by a Presidential Decree shall be excluded. 3. Special educational expenses prescribed by a Presidential Decree paid to any of the following persons for basic deduction 대상자 who are persons with disabilities. a. Social welfare facilities and non-profit corporations prescribed by a Presidential Decree. b. Institutions prescribed by a Presidential Decree that provide developmental rehabilitation services for the improvement of function and behavioral development of persons with disabilities. c. Facilities or corporations located abroad similar to those in (a) or (b).

When applying the provisions of Paragraphs 1 through 3, if there are amounts already paid for a former spouse, dependent, person with a disability, or a person aged 65 or older as of the end of the taxable period, who ceases to be a basic deduction recipient due to marriage, divorce, separation, employment, etc. before the end of the taxable period, the amount calculated by applying the rates under Paragraphs 1 through 3 to the amounts paid until the date such reason occurred shall be deducted from the comprehensive income tax calculated for the relevant taxable period.

The Commissioner of the National Tax Service may request the provision of data prescribed by a Presidential Decree, such as student loan and principal and interest repayment details, from institutions that perform student loan and repayment operations, including the Korea Student Aid Foundation established under 「the Act on the Establishment, etc. of the Korea Student Aid Foundation」 (hereinafter referred to as "Korea Student Aid Foundation, etc." in this paragraph) in order to verify whether educational expenses under Paragraph 3, Subparagraph 2 (d) are eligible for tax credit. In this case, the Korea Student Aid Foundation, etc. that receives the request shall comply with the request unless there is a special reason. <Newly added on Dec. 20, 2016>

Where a resident falls under any of the following subparagraphs, the amount determined by the classification of the following subparagraphs shall be deducted from the comprehensive income tax calculated (hereinafter referred to as "standard tax credit"). <Amended on Dec. 29, 2020> 1. For a resident with earned income who has not applied for income deduction or tax credit under Paragraph 6, Article 52, Paragraph 8, and Article 95-2, Paragraph 2 of 「the Restriction of Special Taxation Act」: 130,000 won annually. 2. For a resident with comprehensive income (excluding those with earned income) who has not applied for tax credit under Article 122-3 of 「the Restriction of Special Taxation Act」: The amount determined by the classification of the following items. a. For businesses that meet the requirements prescribed by a Presidential Decree, such as reporting business accounts under Article 160-5, Paragraph 3 (hereinafter referred to as "diligent business operators"): 120,000 won annually. b. In cases other than (a): 70,000 won annually.

Other necessary matters concerning special tax credit shall be prescribed by a Presidential Decree.