A Korean gift tax return is due even when the tax is zero. File on time and 3% comes off; fail to file and 20% goes on — 23 percentage points on the same tax. And there is separate interest accruing by the day.
The deadline is three months from the end of the month in which the gift was received (article 68(1)). Not three months from the gift — the month is completed first. Receive on 3 August and the return is due 30 November.
On time — 3% off (article 69(2)). No return — 20% on (Framework Act on National Taxes article 47-2). By improper means — 40%.
On top of that, late-payment interest of 22 per 100,000 a day, or 8.03% a year.
KRW 300m received, no return filed
An adult child receives KRW 300m from a parent. The tax before credits is KRW 40m.
| Late interest | Total | |
|---|---|---|
| Filed on time | — | KRW 38.8m |
| Unfiled, 1 year | 3,212,000 | 51,212,000 |
| Unfiled, 2 years | 6,424,000 | 54,424,000 |
| Unfiled, 5 years | 16,060,000 | 64,060,000 |
All three unfiled rows also carry the KRW 8m non-filing penalty (20% of the KRW 40m computed tax). Against the KRW 38.8m paid on time, the gaps are 12,412,000 · 15,624,000 · 25,260,000 won.
The KRW 8m non-filing penalty lands once and stops growing. What grows is the late-payment interest — 22 per 100,000 a day is 8.03% a year. That interest takes about two and a half years to overtake the non-filing penalty (calculated directly).
Late, but filing anyway, costs less
Missing the deadline is not the end of it. Article 48 of the Framework Act reduces the penalty on a late return — and the sooner, the more.
| After the deadline | Penalty reduced by | Penalty in the example |
|---|---|---|
| Within 1 month | 50% | KRW 4m |
| 1 to 3 months | 30% | KRW 5.6m |
| 3 to 6 months | 20% | KRW 6.4m |
| Over 6 months | none | KRW 8m |
The first month after realising is worth KRW 4m. “It is already late, so later is fine” is the expensive choice here.
And there is a far more generous table for anyone who did file — if the return went in but understated the tax, that is a corrected return, and its relief starts at 90% (article 48(2)1).
The starting points differ too — 20% if you never filed, 10% if you understated. The relief rates then widen the gap again. The full table is below, under “What if I under-reported by mistake?”
This reduction applies where you file before the tax office finds it. After notice of an audit, it does not.
The 3% credit is not 3% of the whole tax
This one shows up only when you do the arithmetic. Article 69(2) applies the 3% to the tax after the other credits have been subtracted.
Take an adult child who received KRW 200m and then another KRW 200m inside ten years.
| Amount | |
|---|---|
| Tax on a base of KRW 350m | KRW 60m |
| Credit for tax already paid | − KRW 20m |
| What the 3% is applied to | KRW 40m |
| Filing credit | KRW 1.2m |
| Taking 3% of the full KRW 60m instead | KRW 1.8m |
| Difference | KRW 0.6m |
The gap only opens when there is an earlier gift — on a first gift there is nothing to subtract and the two agree. The calculator applies the 3% after the subtraction.
Why file when the tax is zero
Even inside the deduction, filing is worth doing. Three reasons.
① It records how much deduction has been used. A second gift inside ten years has to add the first back, and this return is the evidence. Without it, the burden falls on you.
② It answers questions about the source of funds. When a property purchase or a large transfer draws a query, “a gift from my parents, filed at the time” is the shortest possible answer.
③ Filing closes the window. Article 26-2(4) of the Framework Act on National Taxes sets the assessment period for inheritance and gift tax at ten years — and fifteen where no return was filed (the same applies to evasion by improper means, and to the false or omitted part of a return). One filing closes five years.
Worse, where the evasion was by improper means and the property exceeds KRW 5bn, paragraph (5) replaces the clock with “one year from the day the gift became known” — effectively no limit at all. “Old enough to be safe” is the most expensive assumption on this page.
If you cannot pay — instalments and deferral
Two schemes, with different thresholds.
Instalments (article 70(2)) — where the amount payable exceeds KRW 10m, part of it may be paid within two months after the due date. No security, no permission.
Long-term deferral (article 71) — where the tax exceeds KRW 20m, you apply, provide security, and the district office grants it. For gift tax the ceiling is five years from the date of permission (fifteen for property under the family-business succession relief). But each instalment must exceed KRW 10m, so a smaller amount cannot use the full five years.
This article long carried the line “deferral carries an interest-style charge whose rate sits in the Enforcement Decree, which we did not check.” That gap is now filled — and it takes three provisions to reach the number.
The chain runs like this. Article 72 says the charge is the outstanding balance times the number of days times “a rate prescribed by Presidential Decree”. Decree article 69(1) makes that rate “the rate under the main text of article 43-3(2) of the Framework Act Decree”, which in turn defers to “a rate set by Ministry rule, having regard to the average one-year deposit rate at commercial banks.” That rule is article 19-3 of the Framework Act Enforcement Rules, and the figure there is 31 per 1,000 — 3.1% a year.
So deferral interest runs at the same rate as the interest the state pays on a refund. That is less than half the late-payment charge of 8.03% — a factor of 2.59, precisely.
On KRW 50m deferred for a year: simply being late costs 4,015,000 won, approval costs 1,550,000 — a gap of 2,465,000.
The figure is not fixed. It moves whenever the Ministry rule is amended, which has happened almost every year. And if it changes mid-term, the earlier stretch keeps the old rate (Decree article 69(2)). Check the rule in force when you apply.
The instalment route runs short enough (two months) that its cost is small. But it does not get this low rate — instalments split the deadline rather than being granted as a deferral, so the structure differs.
Questions that remain
Received on 3 August — when is it due?
30 November. The article says three months from the end of the month in which the gift was received (68(1)), so the count starts on 31 August. Not 3 November — you get 27 extra days. Receive near the end of a month and that cushion shrinks.
If I cannot pay, should I delay filing too?
The opposite. Filing and paying are separate. File and the 20% non-filing penalty does not arise; what remains is the late-payment interest at 8.03% a year. In the example above that is the difference between KRW 8m landing and not landing — and filing also earns the 3% credit. File even with no money to pay.
What if I under-reported by mistake?
The under-reporting penalty is 10% (Framework Act article 47-3(1)2) — half the non-filing rate. By improper means it is 40%, or 60% on an offshore transaction.
Filing a corrected return yourself reduces it, and far more generously than the late-return route (article 48(2)1).
| After the deadline | Corrected return | Late return |
|---|---|---|
| Within 1 month | 90% | 50% |
| 1 to 3 months | 75% | 30% |
| 3 to 6 months | 50% | 20% |
| 6 months to 1 year | 30% | none |
| 1 to 1.5 years | 20% | none |
| 1.5 to 2 years | 10% | none |
Having filed at all makes fixing it much cheaper later — 90% against 50% inside the same first month — and the corrected-return relief runs to two years where the late-return relief stops at six months. Both are unavailable once you already know an assessment is coming.
What if my parents pay the tax for me?
Gift tax is paid by the recipient (article 4-2(1)). So when the giver pays it, that payment is itself a further gift.
There is a joint liability provision (article 4-2(6)) under which the giver pays as their own obligation, and that is not a second gift. But it opens in three cases only — the recipient’s address or residence is unclear and the tax claim is hard to secure, the recipient is found unable to pay and enforcement would not secure it, or the recipient is a non-resident. The district office must also state the reason (paragraph 7).
So “my parents have the money and will just pay it” does not fall inside this door. Two articles chain the computation (checked 23 September 2026). Article 47(2) adds back gifts from the same person (including a parent’s spouse) within ten years once they total ₩10 million or more, so the tax paid on your behalf is added to the first gift and run through the rate table again. Article 58 then credits the tax computed on the earlier gift, capped at that gift’s share of the combined base. Stacked on progressive rates, the result is a little more than simply adding the payment. How many rounds to compute when the tax on the tax is paid again is not in the statute, so we produce no figure — ask the tax office first where amounts are large.
A gift with assumed debt, such as a jeonse deposit or loan, is computed differently — see gift with assumed debt.
Sources and where to check
Inheritance and Gift Tax Act article 68(1) (three months from the end of the month of the gift) · 69(2) (the 3% filing credit, applied after other credits).
Framework Act on National Taxes article 47-2 (non-filing penalty 20%, 40% by improper means) · 47-3 (under-reporting 10%) · 47-4 (late payment, 22 per 100,000 a day) · 48 (relief for a late return and for a corrected return).
Inheritance and Gift Tax Act articles 70(2) (instalments), 71 (deferral) and 72 (deferral interest) — the rate runs Decree article 69(1) → Framework Act Decree article 43-3(2) → Framework Act Enforcement Rules article 19-3, where the figure is 31 per 1,000 a year.
The articles were opened and read on the national statute portal on 26 August 2026. The 20% non-filing rate, the 10% under-reporting rate and the 50/30/20 late-return relief all matched the text, and the 22-per-100,000 daily rate sits not in the Act but in article 27-4(1) of its Enforcement Decree. Every figure in the tables was rebuilt from the rate table, and the 8.03% annual equivalent comes from multiplying 22/100,000 by 365.
This check filled four gaps — the assessment period (26-2(4) and (5)), instalments and deferral (70(2), 71), the corrected-return relief bands (48(2)1), and the giver’s joint liability (4-2(6) and (7)).
Note that the Decree effective 27 February 2026 added article 27-4(2): once a designated payment date has passed, the charge becomes 67 per 10,000 a month — the table above covers only the daily-accrual stretch, before any assessment notice.
On 11 September 2026 the deferral side was reopened and the last gap closed. This is where the article said the rate “sits in the Enforcement Decree, which we did not check” — in fact it sits in a Ministry rule, not the Decree (art. 72 → Decree 69(1) → Framework Decree 43-3(2) → Framework Rules 19-3), and the figure is 31 per 1,000 a year. Both interest comparisons here (8.03% against 3.1%, a factor of 2.59) and the one-year figures on KRW 50m were rebuilt from those two rates.
Where to check further
The date the gift was received. The deadline runs from it. Where the transfer date and the registration date differ, establish which applies.
The gift tax screen on Hometax. A zero return is filed there too.
If the deadline has passed, how many days ago. One month, three, six — those thresholds decide the reduction.
For deferral, article 19-3 of the Framework Act Enforcement Rules as it then stands. This rate changes almost every year.
For the tax itself, put the amounts into the gift tax calculator. If there was an earlier gift inside ten years, read how the ten-year rule actually works first.
