Tax Rules Put Overseas Religious Work at Risk

New South Korean tax rules raise questions over overseas religious projects and funding that could affect organizations with international structure

A recent change to South Korea’s tax regulations is creating serious uncertainty for religious organizations that support missionary, educational, medical and humanitarian work abroad. The issue was highlighted by religion reporter Jeong Seong-su (정성수) in an opinion column published by Segye Ilbo (세계일보) on 23^rd September. At the heart of his criticism is a seemingly simple question: Should the public-interest character of religious work depend primarily on whether it takes place inside or outside South Korea?

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The concern follows amendments to the enforcement decrees of the Inheritance Tax and Gift Tax Act and the Corporate Tax Act, which took effect on 27^th February 2026. The amendments exclude foreign religious organizations and non-residents from the category of public-interest corporations in relevant circumstances.

Seven months after the changes came into force, uncertainty remains over exactly how overseas missionary funding will be treated for tax purposes. Large protestant organizations like the United Christian Churches of Korea (한국교회총연합) and the Korea World Missions Association (한국세계선교협의회) have therefore been calling for the rules to be revised and clarified.

The potential consequences are significant. Korean religious organizations may hesitate to continue funding overseas projects if future tax liabilities are unclear. Yet stopping or reducing transfers could disrupt missionaries, schools, hospitals and relief programs that depend on such funding. Long-term projects – such as building churches, schools and medical facilities – are particularly vulnerable because they involve contracts and financial commitments made over several years.

The government has a legitimate reason to be concerned about financial transparency. Religious organizations should not be able to use overseas entities as a means of making disguised gifts, avoiding taxation or transferring money without proper accountability. Donations from members and the wider public also create a responsibility to demonstrate clearly how funds are being used.

But, according to Jeong, the problem is the way the new rules determine whether an activity is in the public interest.

Under the amended framework, the location and legal status of the organization carrying out the work can become more important than the actual purpose of the project or what happens to the money. A project operated domestically may qualify for public-interest treatment, while a similar project operated through a foreign corporation or by a non-resident may be excluded.

This can produce an unintended and counterproductive result. Imagine a Korean church supporting a school in another country. Rather than sending money directly to an individual missionary, the church establishes a properly registered local corporation, opens a dedicated bank account and operates the school through that legal entity. From an accounting and transparency perspective, this may be preferable to using a missionary’s personal account.

Yet under the new approach, the fact that the organization is a foreign corporation could itself create a tax disadvantage. In other words, a system intended to promote financial accountability could potentially discourage precisely the kind of formalized and transparent financial management that regulators should want to encourage.

There is also a broader issue concerning the nature of overseas religious activity. Missionary work is not necessarily limited to preaching. Korean religious organizations operate or support schools, hospitals, orphanages and vocational-training programs in different parts of the world. They may also provide food, medicine and disaster relief through local religious organizations and nonprofit entities. Such activities can have a humanitarian dimension regardless of where they take place.

In his opinion piece, Jeong therefore argues that public interest should not disappear at a national border. If an educational, medical or humanitarian project is considered beneficial when carried out in Korea, its location abroad should not by itself be sufficient reason to question its public-interest character.

Nor is the issue limited to Protestantism. The new rules could affect overseas activities supported by Catholic dioceses and religious orders, Buddhist temples and missionary centers, Won Buddhism and the Family Federation, among others. Protestant organizations may simply be encountering the problem earlier because of the scale and decentralized nature of their overseas missionary funding.

Jeong’s proposed alternative is to shift the focus from where an organization is located to what it actually does with the money. A foreign organization that is legally registered, has an approved project plan and budget, maintains dedicated accounts and provides proper documentation could still qualify for public-interest treatment. Detailed accounting and performance reports could then be required after the project is completed.

At the same time, religious organizations would need to accept greater responsibility for transparency. Missionary living expenses should be separated from project costs, while construction, education, medical and relief expenditures should be separately documented. Personal accounts should not be used for broad, unexplained transfers, and receipts and records of asset ownership should be maintained.

Finally, Jeong calls for transitional measures for projects that were already underway when the rules changed. Organizations that entered into contracts and funding agreements under the previous system could otherwise face unexpected liabilities. A two- or three-year grace period, he suggests, would allow existing projects to adapt to new accounting and management requirements.

The central issue, therefore, is not whether overseas religious funding should be subject to oversight. It is how that oversight should be designed. A system aimed at preventing abuse should distinguish between opaque or improper transfers and legitimate, transparently administered religious and humanitarian projects.

As Jeong puts it, the decisive questions should be the purpose of the money, its flow, and the results of its use – not simply the address of the organization receiving it.

What we can say with confidence is that the legal framework has changed in a way that potentially affects a Korean religious headquarters financing foreign affiliated entities, and that the uncertainty identified by Jeong is directly relevant to an organization with an international structure like the Family Federation.

The February 2026 tax changes could indeed have implications well beyond Protestant missionary organizations. For the Family Federation, whose World Mission Headquarters is based in South Korea, the issue is particularly significant. Much of the organization‘s international work necessarily involves transferring funds from Korea to affiliated organizations and projects abroad.

The amended rules appear to make the legal status and location of the overseas recipient more important in determining whether such transfers receive public-interest tax treatment. The potential consequences could therefore extend from routine missionary support to the financing of overseas properties, construction projects, education, humanitarian work and other activities.

See also No Charges Over Family Federation Probe Delay

See also Longer Medical Leave Before 1st Appeal Hearing

See also States Weaponizing the Law in War on Faiths

See also Voltaire’s Warning for Japan and South Korea

See also Mother Han’s Case Echoing a 1955 Religious Trial

Text: Knut Holdhus, editor

Featured image above: South Korea’s left-leaning Lee Jae-myung administration making it harder for religious bodies by introducing tax changes from 2026 with serious implication for religious organization supporting international activities and projects. Illustration: ChatGPT, 26^th September 2026.

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