2020 Volume 17 Pages 1-19
In 2009, the tax system for the business succession of small-and medium-sized busibesses was introduced under the Special Taxation Measures Law, putting in place the preferential tax treatments (deferment of taxation and reduction of taxable amount for inheritance or gift of business assets). Although the provisions on conditions for accessing the system were partially amended in 2013, 2015 and 2017, the system was used in less than 3,000 cases in the 10 years since its establishment. In order to promote uptake of the system, the provisions of the Special Taxation Measures Law were drastically revised in 2018. As “special measures” for 10 years from 1 January 2018 to 31 December 2027, the conditions related to tax-deferred treatment of a company’s own shares were eased. This revision is expected to increase uptake of the preferential tax treatment. In this article, the implementation of these key uptake conditions of the tax system for business succession will be viewed alongside the “general measures” implemented before 2018. The challenges of the business succession tax system are rigorously highlighted.
