A court told the Korean government the law did not let it tax charitable money sent abroad. Nine months later, regardless of that ruling, the government wrote the limit into two decrees itself. Churches were the first to object.
In three lines
What exactly changed
Two enforcement decrees were revised.
Inheritance and Gift Tax Act, Article 12
Corporate Tax Act, Article 39
Money sent to overseas missionaries or overseas religious organizations no longer easily qualifies for exemption.
Why this happened now
1. The government reversed a court ruling
In May 2025, the Supreme Court of Korea held that the law itself contains no domestic limit, that a religious project does not lose its public value by taking place overseas, and that non-residents and nonprofits headquartered abroad can therefore qualify as public-interest corporations. It declared the gift-tax assessments on overseas church transfers illegal.
Rather than amend the law, the government wrote the restriction the court had rejected into the decrees.
2. Overseas funds are hard to monitor
The National Assembly heard that gift-type overseas transfers from 2020 to mid-2024 totaled roughly $16.3 billion, with weak follow-up by the National Tax Service. Because money that leaves the country cannot be verified against its stated purpose, the government excluded overseas religious activity from the preferential category entirely.
Who is affected
At the end of 2024, Korea had 21,621 long-term missionaries in 171 countries, most living on funds sent from home. Two kinds of spending are now exposed:
Two procedural problems
No vote in the National Assembly. The court said the law contains no geographic limit. The executive created that limit by decree, with no bill, no debate, and no floor vote.
Possible retroactive effect. The revision applies from the tax period containing the effective date. For calendar-year filers that means everything from January 1, 2026, including money sent in January and February, before the decree was published. Observers say this may conflict with the ban on retroactive taxation and the protection of legitimate expectations.
On August 5, 2026, the Korea Church Media Association argued that overseas mission is religious work, not tax evasion, and that judging it only as avoidance is short-sighted. It noted that foreign missionaries who built schools and hospitals in Korea contributed to the country's own modernization.
"Just separate the heretics from the orthodox"
Some argue the problem began with the overseas spending of certain groups, and that mainstream denominations are being hit unfairly. They want the rules to distinguish heretical groups from orthodox ones.
That demand creates a larger problem. Someone has to draw the line:
The state cannot settle questions of religious truth. Give tax authorities that power and the next government decides where the line falls. The current decree already shows the pattern: it does not read labels, only money trails, which is why mainstream Protestant churches are caught by it too.
Tools built to target one disliked faith are rarely discarded. They are passed to the next user.
What comes next
The September assemblies are the next test. Denominations are already revising internal mission rules to operate under the decree. That solves administrative problems. It does not change the structure underneath: the government can still decide by decree alone whether overseas religious activity counts as a public good.