Wage earners eligible for tax deductions for credit card payments may submit to NTS, via their employers, the credit card tax deduction application form and a credit card transaction report issued by their credit card companies. These materials must accompany the wage earners’ labor income tax settlements filed at the end of the tax year. Credit card companies must issue credit card transaction reports to their customers upon request, or they may voluntarily issue the reports to their customers even without the request.<sup>44</sup> After TIETP was introduced, credit card companies began voluntarily sending their customers annual transaction reports at the end of the tax year as a customer service. In 2000, when TIETP was fully implemented, the Act on the Submission and Management of Taxation Data (ASMTD) became law. According to the act, credit card companies must regularly submit member stores’ credit card or debit card transaction data to NTS. As of 2012, wage earners can claim TIETP tax deductions by confirming prefilled credit card transactions data forms provided by NTS through its Home Tax Service, the NTS tax service internet portal. This service was enabled under ASMTD, which requires credit card companies to submit credit card transaction data to NTS.

If the credit card tax deduction application is valid, employers, acting as the withholding tax agents as to wage earners’ income, subtract the taxes saved by TIETP together with other tax deductions and credits from the tax due in the month following the year‐end tax settlement.<sup>45</sup> If the withholding tax agents should refund overpaid taxes, they can subtract the refund amount from the taxes due in subsequent months or request a refund from the regional NTS office.<sup>46</sup> The TIETP process differs completely from the receipt compensation process adopted in 1977. People who wanted to receive receipt compensation had to submit to a cumbersome application process. They had to collect their receipts and take them to a regional NTS office or commercial bank commissioned to deal with receipt compensation, where they submitted the receipts to get compensation. Since compensations was confined to an allotted budget, consumers often could not get compensation due to delayed budget allocations or budget shortfalls. The TIETP application and refund process, in contrast, is easy and simple. The tax deduction is credited to wage earners’ income taxes along with other tax deductions and credits, so refunds due from eligible refund applications are not delayed or declined. In addition, applicants do not need to collect all the credit card receipts, as credit companies issue aggregate annual transaction reports, and now prefilled credit card transaction information is presented to taxpayers by the NTS Home Tax Service. TIETP’s convenience and secure credits distinguish the approach from the failed attempts using receipt compensation.

> 44. Article 121‐2, Presidential Decree of Preferential Tax Control Law, effective as of Oct 30, 1999.

> 45. Article 201, Presidential Decree of Income Tax Law; Article 93, Order of Ministry of Strategy and Finance for Income Tax Law.

> 46 _._ Ibid.

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