Choo Kyung-ho "Proactive Review of Additional Improvements for SME Business Succession"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho announced on the 19th that he would listen to the voices from the field regarding business succession and consider additional improvements.

Deputy Prime Minister Choo made these remarks at a meeting with small and medium-sized business owners held at the Korea Federation of SMEs on the same day. Previously, through the tax law revision at the end of last year, the scope of businesses eligible for the business succession deduction, which provides tax benefits when business owners pass on their businesses, was expanded from companies with sales under 400 billion won to those under 500 billion won.

The limit for the business succession deduction was also increased from a maximum of 50 billion won to 60 billion won, and measures such as easing post-management requirements and establishing a system to defer inheritance tax payment upon business succession were implemented.

Deputy Prime Minister Choo said, "Last year, we created a system that allows children who inherit and continue the business to defer inheritance tax payments so they can continue to actively operate the business," adding, "We will listen to voices from the field and experts and proactively review improvements to related systems within the government."

Deputy Prime Minister for Economy Choo Kyung-ho is delivering opening remarks at the Public Institution Management Committee held at the Government Seoul Office in Jongno-gu, Seoul on the 16th. Photo by Dongju Yoon doso7@

Kim Ki-moon, Chairman of the Korea Federation of SMEs, stated that while revolutionary changes have been made regarding business succession, he proposed extending the installment payment period for gift tax to 20 years, the same as the inheritance tax deduction, and changing the special tax rate for gift tax from a progressive tax structure to a flat 10% rate.

He also suggested increasing the maximum limit for the business succession deduction and special gift tax taxation to 100 billion won, expanding the budget for performance-sharing type research and development (R&D) support, and extending the temporary special application period of the Enforcement Decree of the National Contract Act.

Deputy Prime Minister Choo said, "Overall, exports are difficult and the economic situation is not easy, but as I mentioned, I believe we are now laying the groundwork," adding, "to support the growth of small and medium-sized enterprises, we will expand policy fund supply in the second half of the year and promote measures such as 'Startup Korea.'"