Business · Companies · 17 hrs ago
Proposed tax changes raise the bar for family business inheritance relief
South Korea’s 2026 tax plan proposes changes to family business inheritance relief for companies preparing to pass ownership to the next generation.
Under current rules, some small and medium-sized businesses can qualify if the owner has run the business for at least 10 years.
The proposal would define a qualifying business as one with specialized technology and management know-how, with a review committee deciding whether firms meet that test.
It would also raise the deduction limit to as much as 100 billion won, but eligibility would depend on a company’s expertise and know-how.
Business owners are advised to review succession requirements early and plan tax funding, including by considering whole-life insurance.
The proposal makes it important for companies to prepare both to qualify and to pay the tax when ownership is transferred.
South Korea’s 2026 tax reform proposal would tighten the requirements for family business inheritance deductions.
The proposal defines a qualifying family business as one with specialized technology and management know-how.
A review committee would decide whether a company meets that definition.
Companies are advised to reassess succession eligibility and prepare ways to fund inheritance tax payments.
The proposal would raise the deduction ceiling to as much as 100 billion won.
- Who
- South Korean family business owners and companies preparing for succession.
- What
- A proposed tax reform would tighten eligibility for family business inheritance deductions while increasing the maximum deduction.
- When
- The proposal was recently announced; the article was published on November 1, 2026.
- Where
- South Korea.
- Why
- The proposal would focus eligibility on companies with specialized technology and management know-how.
This story does not have two clearly opposing sides.
The government’s proposed tax changes included revisions to the family business inheritance deduction.
Hankyung reported that companies should review succession plans in response to the proposed changes.
- Current operating requirement
- The article says the current system requires the deceased owner to have operated the business for at least 10 years.
- Proposed definition
- A qualifying business would have specialized technology and management know-how.
- Eligibility decision
- A review committee would determine whether a company qualifies as a family business.
- Maximum deduction
- Up to 100 billion won under the proposal.
1 source
What people are saying
Companies preparing for business succession must first consider whether their business qualifies for the deduction, rather than how much tax they can save.