The small and midsize business community welcomed the government's 2026 tax reform plan, which includes expanding R&D and investment tax credits for small and midsize businesses outside the greater Seoul area.
Korea Federation of Small and Medium Enterprises said on the 6th in a statement that it agrees with the basic direction of the 2026 tax reform plan released by the government, including expanding future growth engines.
KBIZ said the measure to apply higher R&D and investment tax credit rates for small and midsize businesses outside the greater Seoul area, and to make permanent the capital gains tax exemption on stock transfers by venture investment companies, will contribute to innovative growth for small and midsize businesses.
The tax reform plan raises the tax credit rate from 5% to 7% for direct investments in venture companies located in areas with population decline. It also removes the sunset clause for the capital gains tax exemption applied when venture investment companies and others transfer shares acquired through investments in venture companies.
KBIZ also noted that introducing a tapering structure for special tax reductions for small and midsize businesses to encourage their growth, and adopting accelerated depreciation for safety facility investments to ease corporations' investment burdens and support competitiveness, is meaningful.
It added, We hope this tax reform will become a more effective policy by fully reflecting on-the-ground voices from small and midsize businesses during the legislative process and making improvements, and the small and midsize business community will work to expand investment, create jobs, and revitalize local economies.