Tax Payment Extension Up to 2 Years for Daegu-Gyeongbuk SMEs... What Are the Effects?

Daegu·Gyeongbuk Declared Special Disaster Areas... Corporate Tax Filing Deadline Extended

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[Asia Economy Reporter Jang Sehee] The government has announced various tax support measures to stabilize the livelihoods of Daegu and Gyeongbuk, the regions most severely affected by the novel coronavirus disease (COVID-19) crisis. However, there are concerns that the perceived effects of the tax benefits may be limited.

According to the government on the 21st, tax payment deadlines for small and medium-sized enterprises (SMEs) in the Daegu and Gyeongbuk areas, which have been declared special disaster zones, will be extended for up to two years.

Under Article 60, Paragraph 2 of the Framework Act on the Management of Disasters and Safety, when an area is declared a special disaster zone, the payment deadlines for income tax, corporate tax, value-added tax, and related taxes can be extended by up to two years.

An official from the National Tax Service stated, "According to the Framework Act on the Management of Disasters and Safety, the tax payment deadline for SMEs can be extended from the existing 9 months to up to 2 years."

Additionally, according to the Daegu Regional Tax Office, the corporate tax filing deadline and the payment deadline for the second term 2019 confirmed value-added tax non-payers in the special disaster zones have been extended by one month ex officio. However, this extension applies only to head offices located in the special disaster zones; subsidiaries require additional applications if the parent company is located in other regions.

Furthermore, tax support has been prepared for import-export companies located in Daegu and Gyeongsan City, Bonghwa County, and Cheongdo County in Gyeongbuk. Under the newly established special tax support, eligible companies can receive benefits such as payment deadline extensions or installment payment options for up to 12 months without collateral upon submitting a payment plan.

Moreover, customs investigations on companies located in the special disaster zones have been deferred, and companies currently under investigation can request a postponement of the customs investigation. Also, refund applications can be made without documents, and refunds can be received on the day of application.

Professor Kim Sangbong of Hansung University’s Department of Economics said, "The economic stimulus effect from tax payment deferrals will be very limited," adding, "Drastic measures such as tax exemptions and corporate tax reductions need to be prepared."

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