The National Tax Service said on the 15th that businesses that have opened in Starfield Hanam, Costco Pyeongtaek and Busan International Market will also be able to receive simplified taxation benefits. Simplified taxation is a system in which the National Tax Service applies a lower value-added tax rate (1.5%–4%) than general taxpayers (10%) to small and medium-sized businesses with sales under 104 million won.
The National Tax Service has excluded certain regions, industries and commercial districts from simplified taxation even if they met the sales threshold. To prevent underreporting of sales to pay less tax, it specifically blocked bustling commercial districts or regions from receiving simplified taxation benefits. However, considering the recent economic downturn, it said it will revise the "notice on criteria for excluding regions from simplified taxation" to significantly expand those eligible.
On the day, the National Tax Service said, "We will exclude 46.3% (544) of the 1,176 traditional markets, shopping centers, marts, hotels and department stores currently included in regions excluded from simplified taxation." This means nearly half of the businesses will newly be able to receive simplified taxation benefits. An NTS official said, "We decided which businesses to newly include under simplified taxation after comprehensively analyzing foot traffic, commercial district size and industry conditions, and fairness with neighboring areas."
Among traditional markets, 98 locations were newly included, such as ▲ Geumcheon Dae-myeong Yeoulbitgeori Market in Seoul ▲ Samik Fashion Town in Jung-gu, Seoul ▲ Busan International Market ▲ Gangwon Jayu Market ▲ Ulsan Jungang Traditional Market. For shopping centers and discount stores, 317 were newly added, including ▲ Songpa Garden Five ▲ Eunpyeong 2001 Outlet ▲ Busan Jeonpo-dong Hardware Store Complex ▲ Yuseong-gu MODA Outlet in Daejeon ▲ Gwangju U-Square ▲ Costco Pyeongtaek.
For hotels and department stores, 129 locations were included, such as ▲ Lotte Hotel Busan ▲ Hotel Onoma Daejeon ▲ Utop Marina Hotel Yeosu in South Jeolla ▲ New Songtan Hotel Pyeongtaek ▲ Grace Hotel Gwacheon ▲ Shinsegae Department Store Uijeongbu, Changwon, Daejeon and Seo-gu, Gwangju ▲ Lotte Department Store Bundang; Busanjin, Busan; Seo-gu, Daejeon; Dong-gu, Gwangju; Jeonju, North Jeolla; and Daegu Station ▲ Hyundai Department Store Busanjin, Busan; Nam-gu, Ulsan; and Daegu ▲ Hanwha Galleria Jinju, South Gyeongsang; and Cheonan, South Chungcheong.
The National Tax Service plans to finalize the detailed adjustments within this month after an administrative notice. New eligible businesses are expected to be subject to simplified taxation starting in July. An NTS official said, "With this measure, up to 40,000 small business owners will be covered by simplified taxation, easing their tax burden."