1.24 Million Small Business Owners with Declining Sales to Get Relief... VAT Payment Deadline Extended by 2 Months

National Tax Service Announces Comprehensive Support Measures for Small Business Owners
Simplified Taxation Benefits Extended to Urban Traditional Market Merchants
Early Payment of Refunds and Incentives to Be Implemented

The government has decided to extend the value-added tax (VAT) payment deadline by two months to help small business owners secure liquidity, as they face funding difficulties due to the delayed economic recovery and worsening domestic and international conditions, including changes in tariffs and trade environments. In addition, some merchants in traditional markets located in urban areas, who were previously ineligible for simplified taxation, will now be able to benefit from this system.

On the afternoon of the 6th, the National Tax Service held a tax administration support meeting with the National Merchants Federation at Motgol Market in Suwon and announced the "Comprehensive Support Measures for Small Business Owners."

On the 6th, Im Kwanghyun, Commissioner of the National Tax Service (left), and Lee Choonghwan, President of the National Merchants Federation, are taking a commemorative photo. National Tax Service

Im Kwanghyun, Commissioner of the National Tax Service, who presided over the meeting, stated, "We have prepared these comprehensive support measures for people's livelihoods in order to directly listen to the difficulties and suggestions of small business owners who are struggling due to reduced consumption and rising prices, and to reflect them in tax administration to help ease their burdens, even if only slightly." He emphasized, "The National Tax Service will continue to provide every possible support from a tax administration perspective so that small business owners can focus solely on their livelihoods."

First, the National Tax Service will extend the VAT payment deadline for small business owners whose sales have declined by two months ex officio for their 2026 VAT filings. The eligible recipients are small business owners whose annual sales in 2024 are 1 billion won or less and who operate in one of eight sectors closely related to daily life-manufacturing, construction, wholesale, retail, food service, accommodation, transportation, and services. Approximately 1.24 million business owners whose sales in the first half of 2025 (January to June) have decreased by 30% or more compared to the same period of the previous year will be eligible. The National Tax Service also plans to pursue an ex officio extension of the comprehensive income tax payment deadline in the future.

The scope of simplified taxation for small businesses will also be expanded. An official from the National Tax Service explained, "Some traditional markets located in urban areas have been designated as areas excluded from simplified taxation, so even if the actual sales volume of businesses in these markets is small, they have not been able to benefit from simplified taxation." The official added, "By comprehensively revising the criteria for exclusion areas to reflect changes in business size and market conditions, we expect that traditional market merchants will now be able to benefit more widely from simplified taxation."

In addition, the National Tax Service plans to expedite the payment of VAT refunds and incentives. Furthermore, when small business owners, SMEs, and export companies apply for extensions of payment deadlines or for deferment of seizure or sale, up to 100 million won in tax collateral will be exempted for applications submitted by December 31 of this year. To reduce the burden of tax audits, regular tax audits will be deferred until the first half of this year for small business owners (individuals and corporations) with annual sales of less than 1 billion won.

After announcing the comprehensive support measures, Commissioner Im listened to the difficulties and suggestions of traditional market merchants and discussed them. Merchants attending the meeting requested: ▲expansion of tax consultations for traditional market merchants ▲distribution of customized tax guides for traditional market merchants ▲raising the threshold for advance tax notices (currently at 500,000 won in tax).

In response, the National Tax Service stated that it would expand tax consultations and distribute customized tax guides in line with the VAT and comprehensive income tax filing periods. The agency also said it would actively recommend to the Ministry of Economy and Finance the need to raise the advance notice threshold, which requires a revision of the tax law.

Commissioner Im said, "We will carefully review the valuable opinions of market merchants and, if necessary, improve the system and reflect them in tax administration to the best of our ability." He added, "The National Tax Service will continue to actively work to resolve tax-related issues that small business owners and self-employed individuals are experiencing due to the delayed economic recovery, thereby supporting the recovery of livelihoods and realizing a warm and supportive tax administration."