If Married Within 1 Year of Retirement and Have Children in Elementary to High School, Considered 'Gyeongdannyeo'... Tax Credit Benefits for Employment

[Asia Economy Reporter Kim Min-young] From this year, women who marry within one year of retirement or have children attending elementary, middle, or high school will be recognized as career-interrupted women, and companies employing them will receive tax credit benefits. For small and medium-sized enterprises (SMEs) and mid-sized companies, overseas expatriate personnel expenses will also be recognized as necessary expenses.

The Ministry of Strategy and Finance announced the "2019 Tax Law Amendment Follow-up Enforcement Decree Amendment" including these details on the 5th.

According to the amendment, the conditions for tax support for reemployment of career-interrupted women previously recognized only pregnancy, childbirth, and childcare as career interruption, but from January 1 this year, marriage and children's education are also recognized as career interruption.

In particular, marriage within one year from the date of retirement is recognized as career interruption, and it is specified as having children attending elementary, middle, or high school according to the Elementary and Secondary Education Act.

The preferential deduction rate for deemed input tax credit on tax-exempt agricultural products for simplified taxpayers will be extended from the end of this year to the end of 2021, but the deduction rate for taxable entertainment venues will be lowered from 8/108 to 9/109. The preferential deduction rate for simplified taxpayers in the restaurant industry will be raised from 8/108 to 9/109.

Also, the non-taxable range of fishing and fishery income has been expanded. For fishing and fishery income prescribed by Presidential Decree, fishing income up to 50 million KRW and coastal and inland fishery income are non-taxable. However, fishing and fishery income will be excluded from non-taxable agricultural and fishery side business income for income amounts under 30 million KRW.

This amendment also includes taxing the tax base for traditional liquor sold via telecommunication sales at the usual price (wholesale price). Previously, the tax base for traditional liquor sold via telecommunication sales was the selling price (retail price). This reflects the industry's request to change the tax base from the consumer payment price to the shipment price for traditional liquor telecommunication sales.

The bad debt recognition requirements for accounts receivable of SMEs will also be relaxed. Currently, the period to recognize accounts receivable as bad debt is after three years, the statute of limitations under civil law. Accounts receivable refer to payments difficult to collect due to customer bankruptcy, rehabilitation, or closure. To alleviate the difficulties SMEs face in financing due to accounts receivable, the government will recognize accounts receivable and notes receivable (excluding transactions with related parties) as bad debt if two years have passed since the collection due date for SMEs.

The scope of cost recognition ('deductible expenses') for SMEs and mid-sized companies has been expanded to include overseas expatriate personnel expenses of overseas corporations. Labor costs paid to expatriates dispatched to overseas corporations 100% invested by SMEs and mid-sized companies will be recognized as necessary expenses. However, this is limited to cases where less than 50% of the expatriate's total annual salary is paid.

This content was produced with the assistance of AI translation services.