2024-07-26 05:39:36
The tax law will be revised so that all small and medium-sized enterprises located in the ‘Opportunity Development Special Zones’ in eight cities and provinces across the country can receive tax deduction benefits when inheriting a family business. The inheritance property deduction limit of up to 60 billion won will also be abolished. The government announced a tax law revision bill containing these contents on the 25th.
Prime Minister Han Duck-soo emphasized on the day that “this is a measure that will help attract companies,” and that “this is something that local governments have consistently hoped for.” He also said, “I hope that the relevant ministries and local governments will work closely together to achieve good results,” the Prime Minister’s Office reported. Prime Minister Han also instructed that briefing sessions be held for the eight local governments with special zones.
According to the current law, not all companies located in ‘opportunity development special zones’ can receive tax benefits when inheriting a family business. Only owners who have managed small and medium-sized businesses (in the case of medium-sized businesses, annual sales of less than 500 billion won) for more than 10 years can deduct up to 60 billion won in inheritance assets when passing on the company. Opportunity development special zones are a system that strengthens government support to attract and support companies belonging to industries selected by each local government, such as defense, bio, and secondary batteries. Last month, 8 cities and provinces and 23 regions nationwide were designated as opportunity development special zones.
The government recently announced a revision bill so that all small and medium-sized companies that start or relocate to the opportunity development special zones will be able to receive inheritance tax deduction benefits. However, companies belonging to the ‘mutual investment restriction corporate group’ with total assets of 10.4 trillion won or more will be excluded from the tax benefits. To receive the tax benefits, the company’s headquarters must be located in the opportunity development special zone, and the number of regular workers at the business site within the special zone must exceed half of the total regular workers. If the heir sells financial assets such as stocks that have been deducted after 5 years of inheritance, a capital gains tax of 10-25% will be imposed.
Reporter Kodo Yea [email protected]
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2024-07-26 05:39:36