
Legal Q&A
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Looking at the Income Tax Act, in income tax assessment, money or valuables acquired through embezzlement are not classified as other income. Why are money or valuables acquired through embezzlement not included? Also, I understand that money or valuables from bribery or brokerage of bribes are subject to comprehensive taxation. I am curious why comprehensive taxation applies, and I do not understand why receiving a bribe is captured as subject to income tax assessment.
filing a tax objection
income tax assessment
Answer
Published:
Author : ChanWoo JEONG
The Income Tax Act does not specify money or valuables acquired through embezzlement as other income.
The reason money or valuables acquired through embezzlement are not specified as other income is that the state does not condone the unlawful acquisition of improper gains from the proceeds of crime.
This is in order to correctly identify the proceeds of crime.
In addition, under Article 21 of the Income Tax Act, other income is defined as income other than interest income, dividend income, business income, earned income, pension income, retirement income, and capital gains.
Among the items listed under other income, money or valuables received through bribery, brokerage of bribes, and taking bribes in breach of trust are specified.
Although it would be correct to subject a bribe to confiscation, under our country's Income Tax Act (Article 21 (1) 23) a bribe is clearly defined as other income under the Income Tax Act, so income tax assessment must be carried out.
The reason amounts obtained through bribery or breach of trust are included in other income is that, although such amounts are unlawfully obtained income, they are still subject to taxation.
Legally, unlawful income is also subject to taxation, and through this the fact that income arose is recognized and income tax assessment is carried out.
In addition, other income such as money or valuables received through bribery, brokerage of bribes, and taking bribes in breach of trust is not subject to withholding, so it is added together when calculating the tax base for global income.
If, during the income tax assessment period, a bribe was received and then returned, it is no longer subject to taxation, so you must first ascertain the exact dates.

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ChanWoo JEONG
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Extensive corporate legal litigation and advisory experience · Attorney specializing in inheritance/tax/administrative law

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Career as Judge, Seoul Administrative Court, Seoul Central District Court · Attorney Specializing in Family Law/Labor Law/Administrative Law
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