NTS Cuts Credit Card Payment Fee for Small Business Owners' VAT and Income Tax from 0.8% to 0.4%

Credit Card Payment Fee for Small Business Owners to Be Halved
NTS Announces Reduction from 0.8% to 0.4% for VAT and Income Tax Payments
Commissioner Lim Pledges Swift Implementation and Additional Support Measures

The National Tax Service (NTS) has announced that, in a move to actively support the recovery of the real economy, it will significantly reduce the credit card payment fee rate for small business owners paying value-added tax (VAT) and comprehensive income tax, lowering it from the current 0.8% to 0.4%.

On August 18, the NTS stated that it held a "Tax Support Roundtable" at the Small Business Association’s main conference room in Yeouido, attended by the NTS Commissioner, the Association President, and key executives.

This roundtable was organized to inform small business owners about the tax support measures currently in place and new initiatives being implemented in the second half of the year, as well as to directly hear about the tax-related difficulties faced by small business owners and their expectations for national tax administration amid the prolonged economic downturn.

At the meeting, representatives from the Association suggested lowering the national tax credit card payment fee and raising the threshold for providing credit information on delinquent taxpayers, among other opinions. Song Chiyoung, President of the Small Business Association, stated, "Last year, 1,008,282 businesses closed their doors, and as of the first quarter of this year, the outstanding loans to self-employed individuals stood at 1,067 trillion won, with a delinquency rate of 1.88%. These figures reflect an unprecedented crisis for small business owners. In order to survive, it is crucial to alleviate cost burdens. We hope that the voices of small business owners conveyed to the Commissioner will be realized as tangible support measures that can be felt on the ground."

In response, NTS Commissioner Lim Gwanghyun said regarding the national tax credit card payment fee, "To reduce the payment fee burden, which has recently become a significant issue for taxpayers, we have actively consulted with related institutions such as credit card companies and decided to lower the overall fee rate by 0.1 percentage points (from 0.8% to 0.7%). In particular, we have completed consultations to reduce the fee rate for small business owners paying VAT and comprehensive income tax from 0.8% to 0.4%, and we will promptly implement this by upgrading our IT systems."

Taxpayers who pay national taxes with credit cards or similar methods are required to pay a payment agency fee, which is approved by the NTS Commissioner after comprehensively considering the operating expenses of the national tax payment agency. The current national tax credit card payment fee rate is 0.8% for both small business owners and general taxpayers. This will be reduced to 0.7% overall, with an additional reduction to 0.4% for small business owners’ VAT and comprehensive income tax payments. Large taxpayers with annual sales of 100 billion won or more are excluded from this reduction, in line with the policy objective of supporting small taxpayers.

Commissioner Lim added, "Regarding the suggestion to raise the threshold for providing credit information on national tax delinquencies, I deeply agree with the necessity for the recovery of the real economy and will actively propose the relevant legal amendments to the Ministry of Economy and Finance. We will swiftly pursue tax administration efforts to boost economic vitality and actively recommend necessary legislative changes to ensure they are reflected in national tax administration. We are committed to sincerely addressing the difficulties faced by small business owners."