Perk Loss

The 2015 Rolls Royce Phantom.
The 2015 Rolls Royce Phantom.

 

It has been found that 87.4 percent of the imported cars sold last year in Korea, each at a price of more than 200 million won (US$170,278) were registered for business use. Deputy Prime Minister Choi Kyung-hwan said at a parliamentary inspection of the administration on Sept. 15 that he would seek appropriate measures so that the vehicles registered for business use but actually used for personal purposes are deprived of tax benefits, in the interest of the tax equality.

According to main opposition New Politics Alliance for Democracy (NPAD) lawmaker Yoon Ho-joong and the Citizens’ Coalition for Economic Justice, five Rolls Royce Phantoms were sold last year in this manner, along with six Bentley Mulsannes, and 28 Rolls Royce Ghosts.

In this context, the Ministry of Strategy and Finance announced last month that the law will be amended so that only 50 percent of the purchase and maintenance costs regarding the cars covered by automobile insurance plans for companies are considered as business expenses, while the other 50 percent are partially considered depending on driving logs. Nevertheless, the revised tax act recently made public by the government specified nothing with regard to highly-expensive vehicles. Besides, the uniform tax deduction within a range of 50 to 100 percent is applied to cars in all price ranges according to the revised bill, which could affect equality. Under the circumstances, both ruling and opposition party lawmakers are coming up with bills for limiting the portion deemed as expenses to 30 to 40 million won, or US$25,527 to $34,055. 

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