Mid-sized Companies Must Proactively Respond to Tax Law Changes

Junggyeonryeon Holds '6th Keypoint Seminar of 2024'

The Korea Federation of Medium-Sized Enterprises, together with Samjong KPMG, presented customized response strategies for major amendments related to medium-sized enterprises in the '2024 Tax Law Amendment Bill.'

Byung-guk Kim, Managing Director at Samjong KPMG, stated at the '6th Keypoint Seminar of 2024' hosted by the Federation on the 30th of last month, "The 2024 Tax Law Amendment Bill includes numerous revisions affecting the tax obligations of medium-sized enterprises, such as adjustments to the scope of medium-sized enterprises under the Restriction of Special Taxation Act, the introduction of a decrement structure for R&D, human resource development expenses, and integrated investment tax credits for medium-sized enterprises, and the abolition of post-management for integrated employment tax credits." He emphasized the need to closely monitor future legislative trends and establish and implement proactive sector-specific response strategies.

Kim added, "In particular, as various institutional changes are being pursued?including the abolition of the maximum shareholder surcharge tax system, reduction of the highest inheritance and gift tax rates, and the increase of deduction limits in the business succession deduction system granted to value-up and scale-up excellent companies as well as companies relocating to opportunity development zones or startups?companies must reflect these changes in their business succession strategies. It is also essential to do our utmost to spread consensus on the necessity of bold innovation and challenges to enhance corporate sustainability and corporate value in line with the changed systems."

The seminar, themed '2024 Tax Law Amendment Bill, Medium-Sized Enterprise Response Strategies,' was attended by over 40 executives and employees from medium-sized companies such as Dongin Giyun, YC, Pungjeon Nonferrous, and Highland Food.

Medium-sized businesspeople attending the seminar unanimously agreed that discriminatory amendments, such as the differentiated adjustment of the scope criteria for medium-sized enterprises eligible for tax support under the Restriction of Special Taxation Act by industry, must be corrected. They also called for a bold further reduction of the still excessive highest inheritance tax rate compared to the OECD average to maintain and strengthen the global competitiveness of Korean companies.

A representative from the Federation stated, "In August, we submitted to the Ministry of Economy and Finance the 'Opinions of the Medium-Sized Enterprise Sector on the 2024 Tax Law Amendment Bill,' which includes twelve improvement tasks such as the reduction of inheritance and gift tax rates, reconsideration of the scope adjustment for medium-sized enterprises, and the establishment of an income tax reduction system for employees of medium-sized enterprises." The representative added, "We hope that progressive institutional improvements will continue without hesitation, taking the strengthening of corporate competitiveness?the core of overcoming crises and economic re-leap?as the sole criterion."