"Yellow Umbrella Delivers Notable Income Tax Deduction Benefits"

Income Tax Deductions of Up to 6 Million Won Per Year
Small Business Love Gift Certificate Awarded for Joining by Year-End

The Korea Federation of SMEs announced on December 16 that small enterprises and self-employed business owners seeking tax-saving strategies this year can receive income tax deduction benefits if they join the Yellow Umbrella mutual aid program in December.

With the Yellow Umbrella program, participants can pay monthly contributions ranging from 50,000 won to 1 million won, and receive income tax deductions of up to 6 million won per year on those contributions. Depending on business income, the tax-saving effect ranges from 390,000 won to 1.54 million won.

It is possible to make a lump-sum quarterly payment equivalent to three months’ worth of contributions, so by joining with a quarterly payment in December, participants can pay up to 3 million won at once. After the quarterly payment, the monthly contribution amount can be adjusted from the next quarter onward.

The Yellow Umbrella program is a fund accumulation system designed to help small business owners prepare for business closure or retirement, with a cumulative membership of approximately 3.21 million people.

The full amount of the contributions to the Yellow Umbrella program accrues compound interest (at an annual rate of 3.3%), and can be used as business restart funds or retirement funds in the event of closure or old age. In difficult times, loans against the contributions are also available.

Since July, the Korea Federation of SMEs has been running a promotion, providing a 50,000-won mobile coupon for the “Small Business Love Gift Certificate” to all customers who newly join online between July and December. The Small Business Love Gift Certificate can be used at ZeroPay-affiliated small business merchants nationwide.

Lee Changho, Head of the Mutual Aid Business Division at the Korea Federation of SMEs, said, “With awareness of the year-end gift certificate event and income tax deduction benefits spreading, the number of new Yellow Umbrella members this year increased by 9% compared to last year,” adding, “In particular, online sign-ups grew by 14%, and enrollment through non-face-to-face channels is rapidly expanding.”