As of 1st, income deductions for the use of sports facilities such as swimming pools and gyms will be implemented. In addition, if small business owners who have subscribed to the 'yellow umbrella' scheme for more than 10 years terminate their insurance contract due to management deterioration, the refund of the cancellation will be taxed as retirement income. Profits obtained from fractional investment products will be newly classified as dividends.
The Ministry of Economy and Finance announced this information through the publication of the booklet titled 'This is how it will change from the second half of 2025' on this day.
First, workers with an annual income of 70 million won or less can apply 30% of the sports facility usage fees as a credit card income deduction. The deductible amount is included in the existing additional deduction limit of 3 million won, and costs that are not directly related to actual facility use, such as membership fees, are excluded from the deduction.
If the usage fees and other expenses cannot be distinguished, 50% of the total amount will be considered as related to the use of sports facilities and the deduction will be applied.
The government also changed the taxation method for the refund of the yellow umbrella scheme. The yellow umbrella scheme is a system that supports small and medium-sized enterprises and small business owners in preparing retirement funds and establishing a foundation for recovery in case of business closure or threats to livelihood due to aging.
Previously, if the yellow umbrella scheme contract was terminated, the refund was taxed as other income, but in the future, it will be classified as retirement income if certain conditions are met.
The applicable group includes those who have been subscribed to the yellow umbrella scheme for more than 10 years and who terminate the contract due to management deterioration. Specifically, it is recognized as management deterioration if the business income amount reported for comprehensive income tax or corporate tax has decreased by more than 50% compared to the average of the previous three years. This measure will be applied from the date of contract termination.
The government has also established taxation criteria for fractional investment products. A fractional investment product refers to a new type of product that issues artworks or copyrights in the form of investment contract securities or trust income securities, allowing multiple investors to jointly invest and transact.
Since it has a structure similar to that of funds in that a third party performs the investment, operation, and management of assets, targeting multiple investors, the government has decided to tax the resulting profits as dividends.
A Ministry of Economy and Finance official explained, "This measure aims to strengthen the social safety net for small businesses and clarify the tax classification for profits from fractional investment products."