Business · Companies · 16 hrs ago
Samsung affiliate challenges tax on employee health check costs
South Korea’s tax agency says health-check payments from a Samsung financial affiliate count as employee income.
The agency sought about 660 million won in income tax for 2022 to 2025 after examining payments of about 600,000 won per worker.
The company argues the checks are a business cost tied to its duty to protect workers’ health, not pay employees can use freely.
The dispute also concerns legally required basic checks, which the agency says workers can get through a free national health screening programme.
There is no clear detailed rule on whether employer-paid health checks should be taxed, despite many companies offering them.
If the tax agency’s view stands, workers could owe more tax and companies could face higher social insurance costs, possibly leading to cuts in benefits.
The company has appealed to the Tax Tribunal and asked the finance ministry for an interpretation of the rules.
South Korea’s National Tax Service says a Samsung financial affiliate’s employee health-check payments count as employment income and has proposed about 660 million won in back taxes.
The affiliate says the payments cover health checks required by law and has appealed to the Tax Tribunal.
The dispute concerns about 600,000 won in comprehensive health-check costs provided per employee.
The tax authority’s position could increase employees’ income taxes and the company’s social insurance contributions, with concern that employers may reduce welfare benefits.
- Who
- South Korea’s National Tax Service and a Samsung financial affiliate.
- What
- The tax authority treated the company’s health-check payments as employment income; the affiliate disputes the tax assessment.
- When
- The tax audit took place late last year. The assessment covers income years 2022 to 2025.
- Where
- South Korea.
- Why
- The sides disagree over whether the payments are taxable income or business expenses for required employee health checks.
National Tax Service
Samsung financial affiliate
Tax treatment
National Tax Service
The company’s health-check payments count as employment income because employees can use free national health checks to meet the legal requirement.
Samsung financial affiliate
The payments are business expenses for health checks required by law, not employees’ income.
Reasoning
National Tax Service
The tax authority cited the availability of free national checks, higher-cost tests such as CT scans and the benefit’s description in recruitment notices.
Samsung financial affiliate
The company says the payments go directly to hospitals and cannot be used by employees for personal purposes.
The National Tax Service audited a Samsung financial affiliate and treated its health-check payments as employment income.
The tax authority notified the company that it would seek about 660 million won in employment income tax.
The company appealed to the Tax Tribunal.
- Tax under dispute
- About 660 million won in employment income tax
- Employee support
- About 600,000 won per employee for comprehensive health checks
- Tax years
- 2022–2025
- Company
- A Samsung financial affiliate
3 sources
What people are saying
If there is no certain control over benefits provided by companies, there is a risk that salaries will be split under the guise of welfare benefits.
Health-check support is linked to employees’ right to health, so the tax authorities have not treated it as income within certain limits; this Samsung case is somewhat unusual.