Government Revises Enforcement Decrees of Six Tax Laws Including the Restriction of Special Taxation Act

Scheduled to Take Effect in May After Legislative Notice and Deliberation

On the 21st, the Ministry of Economy and Finance announced that it has prepared a revision of the Enforcement Decree of the Tax Law to regulate matters delegated in the amended tax laws, including the Restriction of Special Taxation Act passed by the National Assembly last month, reflect new policy demands, and supplement other execution deficiencies.

This revision of the Enforcement Decree includes the ▲Enforcement Decree of the Framework Act on National Taxes ▲Enforcement Decree of the Income Tax Act ▲Enforcement Decree of the Restriction of Special Taxation Act ▲Enforcement Decree of the Inheritance and Gift Tax Act ▲Enforcement Decree of the Act on Special Cases Concerning Customs Duties for the Implementation of Free Trade Agreements ▲Jeju Duty-Free Shop Regulations, among others. The Ministry of Economy and Finance explained, "After procedures such as public notice, vice ministerial meetings, and Cabinet meetings, it is scheduled to be promulgated and enforced in May."

The amendment to the Enforcement Decree of the Restriction of Special Taxation Act includes provisions to set the special tax reduction rate for small and medium enterprises engaged in publishing in the metropolitan area at 10% and to define the scope of the publishing industry in the Enforcement Decree. It also establishes the basis for the review of research and development facilities eligible for investment tax credits and applies the same credit rate for investment in commercialization facilities to investments in research and development facilities related to national strategic technologies and new growth and original technologies.

Additionally, it includes raising the tax credit rate for semiconductor investments, a national strategic technology, to 20% for large and medium-sized enterprises and 30% for small and medium enterprises, as well as post-management details related to tax credits for research and development facilities in national strategic technologies and new growth and original technologies. It also covers the scope of operating expenses related to corporate tax credits for e-sports tournament operation costs and the application methods for tax special cases.

The amendment to the Enforcement Decree of the Inheritance and Gift Tax Act stipulates detailed provisions expanding the scope of deemed gifts of profits through transactions with specific persons and details on the submission of securities holdings and transaction records of investment associations. The revision of the Enforcement Decree of the Income Tax Act includes rationalizing the non-taxation requirements for insurance gains arising from the securitization of death benefits.