Temporary Tax Exemption for Business Income of Dog Farming Operations Scheduled to Close by 2027

Promulgation and Implementation of the Revised Enforcement Decrees of Tax Laws in the Agricultural Sector

Until 2027, business income from dog farming operations classified as auxiliary farming businesses at or below a certain scale, which are scheduled to close down by then, will be temporarily exempt from taxation.

The Ministry of Agriculture, Food and Rural Affairs announced on March 2, 2026, that amendments to the Enforcement Decree of national tax laws in the agricultural sector, including the VAT exemption regulations for agricultural supplies, were passed at the Cabinet meeting on February 24 and promulgated on February 27. These changes are aimed at easing the financial burden of farming costs for agricultural workers and improving taxpayer convenience.

First, as a result of this revision, farmers purchasing agricultural forklifts, bean sprout trimmers, or containers for bean sprout cultivation will now be eligible for value-added tax refunds. In addition, when applying for a VAT refund post-purchase, farmers will have the option to submit either a certificate of agricultural or fishery business registration or a certificate of management entity registration, making the refund process more convenient.

Furthermore, with the amendment to the Enforcement Decree of the Inheritance and Gift Tax Act, the calculation methods for both the farming period and the value of assets for agricultural inheritance deductions have been rationalized. Specifically, for taxpayers required to use double-entry bookkeeping under the Income Tax Act, any taxable period in which income exceeds the standard threshold will be excluded from the eight-year farming period required for agricultural inheritance deductions (with up to one year of absence for medical treatment recognized). When calculating the value of assets eligible for agricultural deductions, any secured debt will be excluded from the asset value.

In addition, as a result of revisions to the Enforcement Decree of the Income Tax Act, a temporary exemption has been established for dog farming operations with up to 500 dogs, classified as auxiliary farming businesses in the livestock sector, until the end of 2027. Under the Special Act on the Ending of Dog Meat Farming, Slaughter, and Distribution for Food Purposes, business income from such dog farming operations that are scheduled to close by 2027 will be temporarily exempt from taxation.

Yoon Wonseup, Director General for Agricultural Policy at the Ministry of Agriculture, Food and Rural Affairs, stated, "With these amendments to the tax law enforcement decrees, we expect to reduce the financial burden on farmers and improve the convenience of post-purchase tax refund applications. In addition, by introducing a new category for auxiliary dog farming businesses scheduled for closure under the Dog Meat Ban Act, we anticipate a reduction in tax burdens for those affected."

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