Small-scale Individual Business Owner's Delinquent Tax Collection Exception

The head of a tax office may apply the delinquent tax collection exception under paragraph (2) to a resident who meets all of the following requirements, upon their application, for delinquent taxes that are difficult to collect, including the sum of comprehensive income tax (including the rural special tax additionally imposed thereon) and value-added tax (hereinafter referred to as "delinquent taxes difficult to collect" in this Article), provided that the statute of limitations for the right to collect national taxes has not expired. <Amended by Dec. 29, 2020, Dec. 28, 2021, Dec. 31, 2022, Dec. 31, 2023, Dec. 31, 2024, Dec. 23, 2025> 1. A person whose average total revenue from business income for the three taxable years prior to and including the taxable year in which the final date of business closure falls is less than 1.5 billion won. 2. A person who has closed all businesses by December 31, 2025, and meets any of the following requirements: a. Having applied for business registration and commenced business within the period from January 1, 2020, to December 31, 2028, and continuing the business for at least one month as of the application date under paragraph (3) (hereinafter referred to as "application date" in this Article). b. Having been employed within the period from January 1, 2020, to December 31, 2028, and having worked for at least three months as of the application date, meeting the requirements prescribed by the Presidential Decree. c. Having commenced providing labor services within the period from January 1, 2026, to December 31, 2028, and having provided labor services for at least three months as of the application date, as an artist under Article 77-2 (1) of the Employment Insurance Act or a labor service provider under Article 77-6 (1) of the same Act, meeting the requirements prescribed by the Presidential Decree. 3. A person who has not been punished or sanctioned under the Act on the Punishment of Tax Crimes, or who has no ongoing trial related thereto, within five years prior to the application date. 4. A person who has no ongoing investigation into a tax crime under the Act on the Punishment of Tax Crimes as of the application date. 5. A person whose sum of comprehensive income tax (including the rural special tax additionally imposed thereon) and value-added tax among their delinquent taxes is 80 million won or less as of the application date. 6. A person who has not received the exception on the extinguishment of obligation to pay delinquent taxes for small-scale individual business owners under Article 99-5 or the exception on the extinguishment of obligation to pay delinquent taxes for livelihood-dependent delinquents under Article 99-15.

A resident who wishes to receive the delinquent tax collection exception under paragraph (1) shall apply for the delinquent tax collection exception to the head of the tax office having jurisdiction over the delinquent taxes difficult to collect, in accordance with the Presidential Decree, within the period from January 1, 2020, to December 31, 2029 (the installment payment period shall be set within 5 years). <Amended by Dec. 29, 2020, Dec. 28, 2021, Dec. 31, 2022, Dec. 31, 2023, Dec. 31, 2024, Dec. 23, 2025>

The head of the tax office having jurisdiction over the delinquent taxes shall not enforce collection of the delinquent taxes difficult to collect for which the delinquent tax collection exception has been applied under paragraph (1) from the application date until the final installment payment deadline under Article 2 (2) 2. <Amended by Dec. 29, 2020>

If a resident who has received the delinquent tax collection exception fails to make installment payments a total of 5 times or 3 consecutive times, the head of the tax office having jurisdiction over the delinquent taxes shall, notwithstanding paragraph (5), cancel the delinquent tax collection exception and enforce collection. <Amended by Dec. 29, 2020>

In paragraph (1), "delinquent taxes difficult to collect" refers to delinquent taxes falling under any of the following categories. In this case, the value of property acquired by the resident after the reference date and discovered by the head of the tax office having jurisdiction over the delinquent taxes before the application date, and the amount paid by the resident from the reference date to the application date shall be deducted from the delinquent taxes difficult to collect. <Amended by Dec. 29, 2020> 1. Delinquent taxes that cannot be collected from the resident because they have no property as of the reference date. 2. Delinquent taxes remaining after the distribution amount, when compulsory collection has been concluded as of the reference date and the distributed amount is less than the resident's delinquent taxes. 3. Delinquent taxes that cannot be collected from the resident because the total value of property as of the reference date is insufficient to cover compulsory collection costs. 4. Delinquent taxes that are deemed difficult to collect for other reasons and are prescribed by the Presidential Decree.