379 taxed for sales made via secondhand goods trading

A mascot of e-commerce mobile application Karrot (Danggeun), a platform for trading of secondhand items. (Danggeun)

Nearly 400 users of second-hand trading platforms that logged "substantial" revenue were taxed by the government this year, tax agency data showed Monday.

A total of 379 people that were taxed by the National Tax Service reported an accumulated 17.7 billion won ($13.2 million) in sales this year, equivalent to about 46.7 million won per person, according to the National Tax Service data revealed by Rep. Park Seong-hoon of the ruling People Power Party.

The report showed that the 10 most profitable users of secondhand goods trading platforms logged combined sales of 2.25 billion won.

The state-run tax agency recently notified that people who made a certain level of profit via secondhand goods trading platforms will be required to pay global income tax, referring to tax on a person's economic activity in a year. Trading secondhand goods is conventionally not considered a profit-seeking behavior and are not subject to taxation, but the NTS said repeatedly using such platforms to make substantial sales can be considered a form of business.

Since July of 2023, operators of secondhand goods trading platforms are mandated to submit the data related to sales and payment to the NTS, based on which the agency determines which users are pursuing business via the platforms. The NTS does not reveal the exact criteria for taxation, but it is widely thought in the industry that those repeatedly accumulating sales of over 40 million won a year are likely to be taxed.

Kang Min-su, the head of the NTS, said last month that he would consider adjusting the taxation standards for secondhand goods platforms, to ensure that regular users are not taxed by the government.

By Yoon Min-sik(minsikyoon@heraldcorp.com)