“Depositing KRW 9.9 Million at a Time?” YouTube Misinformation... Believe It and Face a “Tax Bomb”

[Financial News] As misinformation about gifts has recently spread rapidly, particularly on YouTube, a tax expert has advised people to first check the precise tax-law criteria and proceed cautiously.
Moon Jaewan, a tax accountant who recently appeared on the YouTube channel “Pyo Young-ho TV,” addressed common misconceptions about gifts one by one.
One common misconception is that people can avoid gift tax by writing “living expenses” or “education expenses” in the memo field when sending money to a child’s account, or by allowing the child to use a credit card in the parent’s name.
“Gift tax looks at the substance, not the form,” Moon said. He added, “Under tax law, living expenses and education expenses within amounts recognized by social norms are tax-exempt, but the key criterion for determining this is the recipient’s ability to pay taxes—their economic ability to bear the tax burden.”
This means that if parents send money as living expenses to a child who has a job or earns enough income to cover their own living expenses, the payment may be presumed to be an actual transfer of wealth—a cash gift—and could become subject to taxation.
Rumors about cash gifts were also found to be inaccurate. Moon explained that the claim that “the National Tax Service will never know if you give your child less than KRW 10 million” at Chuseok or at other times has no basis.
He explained, “If KRW 10 million or more in cash is withdrawn or transacted in a single day, a large cash transaction report is automatically sent to the Financial Intelligence Unit (FIU).” He added, “Repeatedly withdrawing or transferring KRW 9.9 million or KRW 5 million to avoid the KRW 10 million threshold can also be flagged by banks’ suspicious transaction reporting (STR) systems and reported to the FIU.”
According to Moon, people cannot necessarily rest easy even if the National Tax Service does not launch an immediate investigation. If accounts are traced during an investigation into the source of funds used by a child to acquire real estate or during an inheritance tax investigation after a parent’s death, all past withdrawals and transfers may be presumed to be gifts and taxed.
Moon advised that filing a report is the safer option even when no tax is due. The same applies when the KRW 500 million lump-sum inheritance deduction and the spousal deduction of KRW 500 million to KRW 3 billion have been applied, or when no tax is due because the gift falls within the child gift-property deduction of KRW 50 million over 10 years.
“Even if the amount is within the deduction limit, filing a report ensures that the funds can later be recognized as the child’s legitimate source of funds. In the case of real estate, it also provides a basis for clearly determining the acquisition price when calculating capital gains tax,” he said. He emphasized, “Rather than skipping the filing because the transaction is tax-exempt, the proper way to reduce taxes is to file proactively and leave supporting documentation.”
[email protected] Han Seung-gon Reporter