Special Disaster Area for Infectious Diseases: SME Tax Relief... Car Acquisition Tax ↓, Corporate Entertainment Expenses ↑

[Asia Economy Reporter Lee Kwang-ho] This year, small and medium-sized enterprises (SMEs) located in the special infectious disease disaster areas of Daegu and Gyeongsan, Bonghwa, and Cheongdo in Gyeongbuk will receive a temporary 30-60% reduction in income tax and corporate tax. Additionally, the individual consumption tax on new car purchases will be reduced by 70%. The limit on corporate entertainment expenses will also be temporarily expanded.

The Ministry of Economy and Finance announced on the 23rd that the amendment to the 'Restriction of Special Taxation Act' aimed at minimizing the impact of the novel coronavirus infection (COVID-19) and achieving early recovery, which was approved by the National Assembly on the 17th, has been promulgated and implemented.

The main contents of this enforcement ordinance amendment are ▲ 30-60% reduction in income and corporate taxes for SMEs located in special infectious disease disaster areas ▲ temporary increase in the exemption threshold for value-added tax payment for simplified taxpayers (from 30 million KRW to 48 million KRW) ▲ 50% tax credit on the amount reduced for lessors who lower commercial rent ▲ temporary 70% reduction in individual consumption tax on passenger car purchases until June 30 ▲ temporary doubling of income deduction rates for credit card and other usage amounts until June ▲ temporary expansion of the limit on corporate entertainment expenses.

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