National Tax Service Extends Corporate Tax Payment by 3 Months for SMEs Affected by COVID-19

[Sejong=Asia Economy Reporter Kim Hyunjung] The National Tax Service will unilaterally extend the corporate tax interim payment deadline by three months for small and medium-sized corporations facing business difficulties due to COVID-19 and other reasons.

On the 1st, the National Tax Service announced that corporations with a December fiscal year-end must file and pay the corporate tax interim payment for the first half of this year by the 31st of this month. The number of corporations subject to this interim payment has increased by 23,000 from last year’s 448,000 to 471,000.

The National Tax Service will unilaterally extend the payment deadline by three months for small and medium-sized enterprises located in quarantine-enhanced areas due to COVID-19 prevention measures and for those in industries subject to gathering bans or business restrictions. This also includes regions where social distancing level 2 or higher is additionally applied until the corporate tax interim payment deadline (August 31).

Additionally, for corporations suffering business difficulties due to COVID-19 in sectors such as tourism, travel, performance-related businesses, and passenger transportation, payment deadline extensions will be granted upon application. The extension period is up to three months, but if the relevant reasons persist, an additional extension of up to nine months is possible.

Corporations newly established in 2021, non-profit corporations with only interest income, and corporations with no revenue in the first half of this year due to reasons such as business suspension are exempt from the obligation to pay interim tax. Domestic corporations classified as small and medium-sized enterprises (based on the previous fiscal year) are also exempt if the calculated interim payment amount based on the previous fiscal year is less than 300,000 KRW.

Corporations required to file can electronically file from this month through the National Tax Service’s Hometax website or the Sontax (mobile Hometax app). The interim payment amount can be chosen either by paying half of the corporate tax from the previous fiscal year or by making a mid-term settlement based on business performance from January to June of this year.

Corporations with tax amounts exceeding 10 million KRW can pay part of the tax in installments for up to one month from the day after the payment deadline, and small and medium-sized enterprises can do so for up to two months. Based on the date, the deadlines are September 30 for corporations and November 1 for small and medium-sized enterprises.