Gyeonggi Province Uncovers and Recovers 8.5 Billion Won in Unreported Inheritance Acquisition Tax Sources

Gyeonggi Provincial Government has uncovered approximately 8.5 billion won in previously unreported inheritance tax sources related to real estate, following a focused special audit targeting properties for which acquisition tax was not reported after inheritance over the past five years.

From May 11 to July 10, Gyeonggi Provincial Government conducted a special two-month audit on the acquisition tax of inherited real estate. Utilizing a cross-check method that compared information on the death of decedents with acquisition tax filings within the province, the government closely examined 25,482 unreported decedents (a total of 52,090 cases) and identified missed filings.

As a result of the investigation, a total of 3,228 cases involving 2,156 decedents were detected, leading to the imposition of additional acquisition tax and other related taxes totaling 8,474 million won.

The main reasons for missed filings were a lack of awareness regarding the legal obligation to pay acquisition tax based on the official date of inheritance commencement (the date of death) and the mistaken belief that the reporting deadline coincides with the time of real estate registration.

Gyeonggi Provincial Government

Under the Local Tax Act, in cases where real estate is inherited, the inheritor must report and pay the acquisition tax within six months from the end of the month in which the decedent passes away (the legally designated commencement date of inheritance). However, due to insufficient familiarity with the tax law among taxpayers, omissions in tax filing occur frequently.

For example, Ms. A, who inherited an apartment after her spouse's death, was not sufficiently aware of the legal requirements regarding inheritance acquisition tax and failed to report within the statutory deadline. As a result, the investigation imposed an additional tax of 58 million won.

No Seungho, Director of the Tax Justice Division of Gyeonggi Provincial Government, stated, "The commencement date of inheritance (date of death) is the key standard for inheritance acquisition tax. Please take care not to confuse this with the real estate registration date to avoid disadvantages." He also added, "We will continue to ensure fair taxation and tax justice through thorough tax source investigations and proactive public information campaigns."

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