[Exclusive] "Easing Succession Burden for Strategic Technology Firms"... Opposition Pushes 20% Increase in Inheritance Deduction Limit

Kim Mi-ae of the People Power Party to Propose Amendment
Maximum Inheritance Tax Rate to Be Lowered from 50% to 40%

The People Power Party is pushing to raise the deduction limit for inheritance tax to ease the burden of business succession for companies in national strategic technologies such as semiconductors.

On November 20, Kim Mi-ae, a member of the People Power Party, is set to sponsor a partial amendment to the Inheritance and Gift Tax Act, which would increase the deduction limit for business succession of companies in national strategic technologies by 20%.

The business succession deduction is a system that alleviates the inheritance tax burden when a small or medium-sized enterprise that has been operated by the decedent for more than 10 years is succeeded by an heir. Depending on the period of management by the decedent, the deduction limits are: ▲ 30 billion won for over 10 years, ▲ 40 billion won for over 20 years, and ▲ 60 billion won for over 30 years.

On the 29th, at the 4th meeting of the Task Force to Resolve the Pediatric and Adolescent Medical Crisis held at the National Assembly, Kim Miae, Task Force Chairwoman, is speaking. Photo by Hyunmin Kim kimhyun81@

The amendment expands these limits to ▲ 36 billion won, ▲ 48 billion won, and ▲ 72 billion won, respectively. According to the Restriction of Special Taxation Act, this applies to 71 technologies across seven fields designated as national strategic technologies, including semiconductors, secondary batteries, displays, and biotechnology. The amendment also includes a plan to lower the maximum inheritance tax rate from the current 50% to 40%. Although the People Power Party (including lawmakers Choi Eunseok and Yoo Sangbeom) has previously proposed a bill to cut the maximum inheritance tax rate in this session of the National Assembly, this is the first time they are seeking to raise the business succession deduction limit.

There have been ongoing concerns, especially among technology companies, that the inheritance tax burden restricts long-term technology accumulation and business expansion. It has been pointed out that if succession of national strategic technology companies is blocked, it could lead to a weakening of industrial competitiveness. According to the "2025 SME Business Succession Survey" released by the Korea Federation of SMEs, 53.8% of respondents said that the requirements restricting changes of business type in the business succession deduction system need to be improved.

Kim stated, "Adjusting the tax burden to a reasonable level can promote corporate reinvestment and innovation, thereby contributing to overall economic growth and expansion of the tax base," adding, "This amendment is a normalization measure to establish a sustainable growth structure."

This content was produced with the assistance of AI translation services.