South Korea's National Tax Service introduces tax audit exemptions for SMEs

The National Tax Service (NTS) of South Korea has announced a new initiative to exempt small and medium-sized enterprises (SMEs) from regular corporate and income tax audits for the 2025 fiscal year. To qualify, businesses must submit either a job creation plan or an investment expansion plan.

Under the job creation plan, companies with annual revenue under 50 billion KRW must increase their full-time workforce by at least 2%, while those with revenue between 50 billion and 180 billion KRW must increase it by 3%. Incentives are provided for hiring youth (ages 15–34), seniors (60+), or persons with disabilities, as each such hire counts as two employees for calculation purposes.

The investment expansion plan requires revenue-based growth targets: 10% to 20% for businesses in the Seoul metropolitan area, and 5% to 15% for regional businesses. Companies that fail to fulfill their submitted plans may be selected for audits in 2028.

Separately, the NTS reported progress in tax audit innovation, noting that the average duration of on-site investigations has been reduced from 52 days to 33 days. The agency is also implementing a system that allows taxpayers to select their preferred audit timing, a feature utilized by 88% of applicable cases.