The Ministry of Strategy & Finance will increase the inheritance tax deduction limit to 100 billion won from the current level of 50 billion won for those companies certified by the Small and Medium Business Administration.(image: Kobiz Media / Korea Bizwire)
SEOUL, Sep. 16 (Korea Bizwire) – The government will give a tax break to those long-running corporations deemed to have fulfilled their social responsibilities, especially in inheritance taxes when the firms’ owners succeed the business to their children.
The Ministry of Strategy & Finance will increase the inheritance tax deduction limit to 100 billion won from the current level of 50 billion won for those companies certified by the Small and Medium Business Administration. In addition, the government will give a gift tax break to those large shareholders when they give shares to their children up to 20 billion won in tax bill.
The proposal was made by Finance Minister Choi Kyoung-hwan who held a forum with small business owners asking for tax breaks to retain management control after their retirement. But the public opinion on the issue was not so kind as the announcement to raise the cigarette price by 80 percent only a few days ago was considered so regressive to low-income earners. Critics on the tax cut plan pointed out the inconsistency in tax policy that the government is benefiting the rich at the expense of the poor.
On September 15, Chaebol.com, the website tracking performance of the nation’s conglomerates, published a list of companies whose corporate age is over and above 30 years. Of the 30,827 listed and unlisted firms with assets over 10 billion won as of the end of 2013, the average age of business was 16.9 years.
The number of firms whose age is over 50 was 658, accounting for 2.13 percent in total. The number of those companies over 40 years and 30 years was 1,203 and 2,141, respectively. In all, the ratio of companies whose corporate age is over 30 years and thus eligible for the inheritance tax break was 13.0 percent.
By Sean Chung (schung10@koreabizwire.com)
