What Changed in Korea's 2026 Business Succession Tax Rules
Tax laws governing family business inheritance deductions and gift tax special provisions for business succession have been amended repeatedly through 2026.
1. Change to Carryover Basis (February 2026)
The basis for calculating the carryover acquisition value on gifted assets changed to the "valuation at the time of inheritance" standard — a more favorable revision for succeeding businesses.
2. Phased Shortening of the Post-Succession Management Period
The period during which successors must maintain the business type, employment, and ownership stake after succession has been trending toward a phased reduction: 10 years → 7 years → 5 years.
3. Discussion of a Shift to Inheritance-Acquisition Tax (Unconfirmed)
A shift to an "inheritance-acquisition tax" model — where tax burden decreases as the number of heirs increases — is under discussion but has not yet been finalized.
Overview of the Current Family Business Inheritance Deduction
Under the current system, the deduction limit varies based on the decedent's years of business operation, with a maximum deduction of KRW 60 billion.
Expected Reflection in the 2026 Tax Reform Bill
The government plans to incorporate its business succession reform direction into the 2026 tax reform bill (announced in July) following inter-agency consultation and public comment. Detailed provisions will be finalized once the bill is announced.
SME Succession Strategy
Contact KITIM
KITIM supports SMEs with business succession strategy, monitoring tax reform trends, and succession preparation consulting. Contact us through [KITIM Contact](/contact) if you're considering business succession planning.