A good environment for small and medium-sized businesses!, first implementation of family business succession tax consulting – e-briefing | Briefing Room | news

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hello? He is the head of the property tax department.

From now on, we will start a briefing on the first implementation plan of ‘Environmental Environment for Small Businesses, Family Business Succession Tax Consulting’.

Please see page 2 of the document.

We conduct family business succession tax consulting for the first time. So far, SMEs have been responsible for 99.9% of all businesses and 82.7% of the employment market, and have been driving the growth of the national economy.

Recently, family business succession has emerged as an important concern for managers due to the aging of the startup generation.

Accordingly, the National Tax Service has been conducting family business succession tax consulting for the first time since September…

Family business succession tax consulting refers to the establishment of a family business succession tax support team at each local tax office and informs companies preparing for family business succession of preparations for receiving tax benefits in advance. It is a customized cleaning support system that guides you.

Next, page 3 of the document.

According to the tax law, the family business succession system includes a family business inheritance deduction and a special gift tax taxation system for family business succession. The Family Business Inheritance Deduction is a system that reduces the burden of inheritance tax by deducting up to KRW 50 billion in cases where the decedent inherits a small and medium-sized business operated by the decedent for more than 10 years.

The special gift tax taxation for family business succession is a system that applies a lower tax rate of 10% or 20% up to a limit of KRW 10 billion if the owner donates family business stocks in advance for family business succession.

We will help SMEs to utilize the family business succession support system through tax consulting.

Next, page 4 of the document.

This is the content of family business succession tax consulting support.

If selected as a consulting target company, consulting is provided for one year by default, and can be extended for another year if desired.

Regular consulting is conducted at least once a year, and if there is a request from a company, it is possible to consult at any time.

As for the consulting support, we provide customized consulting according to each company’s situation, such as diagnosing the requirements for tax benefits through face-to-face consultations with local government offices or company site visits, and guiding matters to be supplemented for deficiencies.

In addition, if there is a request for advice on an individual issue, we will provide advice at all times, such as providing an opinion within 4 weeks, and we will deal with written inquiries related to family business succession with the highest priority to resolve uncertainty early.

Next, page 5 of Resources.

We will provide prompt interpretation of laws and regulations related to family business succession. In case a specific interpretation of laws and regulations is required during the family business succession tax consulting process, a new tax law interpretation is provided. We will actively review so that the necessary legal interpretation can be provided promptly by considering the legislative purpose of the family business succession system and the convenience of taxpayers as much as possible, such as reviewing interpretation changes through proposals or consultations with the Ministry of Strategy and Finance.

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Please refer to the press release for the case of change.

Next, page 6 of Resources.

We will tell you about the subject and method of applying for consulting.

Small and medium-sized enterprises (SMEs) whose CEO has been in office for more than 5 years or whose follow-up management is in progress after the succession of the family business can apply.

The application period is for one month from July 1 to August 1 of this year, and you can apply at Hometax or the local tax office having jurisdiction over the address of the company representative.

The consulting target will be notified of the selection result by the end of August after a written review.

Next, page 7 of Resources.

Future plans.

The National Tax Service will continue to promote through small and medium-sized enterprises and related organizations so that the first family business succession tax consulting can be established early, and the related information will also be posted on the National Tax Service website to help business people understand the system.

In addition, during the consulting process, we will listen to difficulties and suggestions from the field regarding family business succession to improve them, and actively make recommendations to relevant ministries where laws and regulations need to be revised.

Meanwhile, we will continue to carry out publicity activities for potential family business succession targets who are expected to succeed in the future, so that more promising SMEs can utilize the family business succession system to strengthen taxation support.

That is all.

[질문·답변]
※Please understand that the contents that cannot be confirmed due to not using the microphone are marked with an asterisk (***).

(Moderator) First, this is a preliminary question from the Busan Ilbo reporter. I wonder what size small and medium-sized enterprises (SMEs) that wish to succeed or are preparing for family business succession are currently being identified, or whether there is any related survey data.

In addition, through consulting, it is thought that it is necessary to inevitably provide information about the actual equity structure of the largest shareholders, such as the CEO, or some of the business activities within the company that you do not want to be disclosed to the tax authorities. Please tell us what you think.

First of all, thanks for the question. First, you asked about the size of the companies that want or are preparing to succeed in the family business, or whether there are related survey data.

Regarding this, according to a survey on the status of family business succession announced by the Federation of Small and Medium Enterprises last year, a survey of 502 of 6.8 million SMEs that have been in business for more than 10 years showed that 64.9% of SMEs responded that they were or plan to succeed their family business. It is being confirmed.

The second question is, through the consulting process, the actual share structure of the largest shareholder or information that you do not want to be disclosed to the tax authorities during business activities within the company may inevitably have to be provided. It could be, but in this case, the question was, what does the National Tax Service think of these concerns?

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At the time of our consulting, you only need to submit the minimum amount of data that can confirm the appropriateness of the family business succession requirements and the facts of the issue. Most importantly, we plan to use the materials submitted during consulting only for this purpose, reviewing whether the requirements for family business succession are met, and not for any other purpose. Let me make that point clear. That is all.

(Moderator) This is a preliminary question from the Chosun Ilbo reporter. How many small and medium-sized enterprises are expected to receive family business succession consulting and what is the target audience before applying for this taxation support?

In the past 3 to 5 years, how many companies have been deducted for failing to comply with follow-up management requirements for the same period as the number of inquiries regarding tax law interpretation related to family business succession deduction?

Our statistics, the most recent statistics are from 2000. As of 2000, there were 106 cases of family business inheritance deduction, and in 2020. As of 2020, the number of people who decided to deduct family business inheritance was 106, and the number of people who decided on special gift tax for family business succession was 220.

Our current plan is to provide guidance to as many companies as possible considering the length of business operation period and the share of representatives so that a lot more companies than this number now can achieve a stable family business succession through the use of this tax system related to family business succession. no see.

And the second question was about the number of tax law interpretation inquiries related to family business succession, and how many companies were fined for not meeting certain follow-up management requirements.

First of all, based on the answers we answered, there were about 100 inquiries about tax law interpretation related to family business succession deductions over 3 years. And, over the past five years, 97 companies have been subject to additional deductions for failing to comply with follow-up management requirements.

First of all, I’m curious about how many companies you’re going to select as a whole.

First of all, the number of people who decided to inherit the family business that we mentioned earlier was 106 cases, and there were 220 cases that made special gift decisions for succession and family business succession. I plan to do a lot of publicity, considering the period of business and the share of the CEO.

If you ask an additional question, there is a Q&A page behind it, and I read that the idea is to prioritize small and medium-sized enterprises over medium-sized ones.

Yes, that’s right.

On the other hand, if you look at the detailed criteria, if you look at the selection criteria, it is said that companies with a lot of tax points accumulated through tax payment or companies with a large number of employees are given priority. In the end, it is also read that this system will be implemented for large companies among small and medium-sized enterprises.

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First of all, we also have limited manpower, and since this is the first time we are conducting such separate tax consulting, the first thing we calculated is that mid-sized companies are slightly larger than small and medium-sized enterprises, so maybe they have the ability to respond on their own.

And we have been steadily promoting the succession of the family business, and we have conveyed the opinions of the industry to the Ministry of Finance and related organizations, so the requirements have been relaxed a lot now, so I think there is a lot of knowledge, but still use it I put a little more emphasis on small and medium-sized enterprises than on medium-sized enterprises, thinking that what they cannot do is small and medium-sized enterprises (SMEs).

Also, among those companies, we were looking for a company that could give us a little bit more benefits in order to provide services with a limited number of people. no see.

Regarding the mid-sized companies you just mentioned, there is a discussion about expansion in the future in the latter part, so I’m curious how you plan to review it.

And recently, in the direction of economic policy, the government announced improvement measures such as the establishment of a deferred payment system or the expansion of the limit of special taxation. please tell me

I think you can interpret it in a line similar to what I said above, but for those who can be the target of family business succession, we guide you on all the things we can do, and 1:1 customization, this suddenly happens at the beginning of the inheritance. It is not something that can be done just because I succeeded in the family business, because I also worked.

If you look at the requirements for this, you have to prepare 10 years in advance, and there are various details that need to be prepared, so this is not something that can be prepared in a short period of time, so we will inform you in advance and remind you and meet the requirements… In order to be able to fulfill the requirements well, and if you do not comply with this again, you will be subject to fines later. So, it is a little labor intensive and takes a lot of time.

So we want to target many companies, but realistically, I think it will not be easy to cover all of them. And, as you said now, since various other payment deferrals and various systems are being redesigned, as soon as the specific details are confirmed, we will redesign the shape of any new consulting, such as this succession consulting, and including such content. Offer and plan to do this, it.

(Moderator) Do you have any additional questions? If not, I’ll sort it out. Reporters with any questions after the briefing, please contact the Inheritance and Gift Tax Division or the Spokesperson’s Office.

This concludes the briefing.

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