"SMEs Request National Tax Service Commissioner to Extend 20-Year Installment Period for Family Business Inheritance Assets"

[Asia Economy Sejong=Reporter Kim Hyewon] A proposal has been made to extend the installment payment period for gift tax special cases, allowing up to 20 years of installment payments for gifted business assets, similar to inherited business assets. Additionally, there was a suggestion to abolish the sunset clause on research and human resource development tax credits and make them permanent, as is the case in the United States and Japan.

This was discussed at a meeting with Kim Chang-gi, Commissioner of the National Tax Service, organized by the Korea Federation of Small and Medium Business (KOSME) on the 3rd. The meeting was attended by Kim Ki-moon, Chairman of KOSME, heads of SME organizations by industry, Commissioner Kim, and 21 National Tax Service officials.

The SME sector proposed 21 tasks to support SME tax administration, including ▲smooth business succession support ▲relief of tax audit burdens on SMEs.

Han Byung-jun, Director of the Korea Information Industry Cooperative, who spoke on-site, said, "This year's government tax reform plan includes expanding both the business succession deduction and the gift tax special case limit to 100 billion KRW, but the extension of the gift tax installment payment period was excluded," adding, "The gift tax installment payment period should also be extended to 20 years, the same as inheritance tax."

Kim Byung-jin, Director of the Korea Wood Industry Cooperative, emphasized, "The National Tax Service conducts tax audits without prior notice when there is suspicion of evasion, but suspicions can be sufficiently clarified with limited investigations focused on the suspected parts," and added, "Full audits involving ledgers, various supporting documents, and on-site inspections of clients should not be conducted without prior notice to reduce the burden of tax audits on SMEs."

Other proposals included ▲expanding exemption criteria for tax audits of small corporate businesses ▲extending the carryback period for SME losses ▲exemption of penalties on overdue taxes for restarting SME entrepreneurs, among 7 on-site proposals and 14 written proposals.

Chairman Kim said, "SMEs are going through difficult times due to high exchange rates, high interest rates, high inflation, and soaring raw material prices," and added, "We hope that the National Tax Service, which is in close contact with SMEs, will communicate more frequently with the field and create a pro-business environment where SME taxpayers can focus on their business activities through active improvements in national tax administration systems."

Commissioner Kim responded, "To support the stable growth and re-leap of SMEs struggling with complex crises, we will provide comprehensive tax administration support such as corporate tax credits and exemptions, customized tax consulting for business succession to resolve tax uncertainties, extension of payment deadlines, early refund payments, and exemption from verification of filing contents."

He continued, "To support innovative growth and job creation in SMEs, we will expand pre-review of R&D tax credits and exclude SMEs with increased employment from regular audit selection."

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