현행 상속세 및 증여세법상 가업상속공제의 문제점 및 개선방향

The legislative intent of Article 18, Paragraph 2, Subparagraph 1 of the current Inheritance and Gift Tax Law is to protect management power by preventing the reduction of assets. Paying inheritance tax with certain taxable assets may threat the sustainability of business. Tax deductions for family business succession allow taxation benefit in order to protect the continuity of family business. There are arguments for and against the matter. Pros argument focuses on protection of management rights. On the contrary, cons argument claims that share assets related to management rights to be deducted under family business succession deduction are still taxable assets, and accordingly, inheritance and gift tax law is not required to protect management rights of the tax payer. Both arguments have their own rationales. However, it would not be reasonable to neglect the threats posed to management rights in inheritance process considering the impact of problems such as employment issues on national economy. The current legal system is insufficient to achieve its purpose of protecting management rights. In this paper, the problems and improvements are discussed in short-term and long term. In the short term, five issues will be discussed. First, it is not reasonable to differentiate the size of the companies considering the purpose of the tax deductions for family business succession is to protect management rights. In addition to the medium or small sized family business and midsize business, management rights of the large sized companies should be also protected using tax deductions for family business succession. Second, if the assets of a sole proprietorship or share assets of enterprise does not reduce in determining the predecessor and an inheritor, management rights can be protected. Therefore, if inheritance can be deferred until the disposal of such assets, the purpose of family business succession will be able to be achieved. Thus, it would be reasonable to replace representative director requirement for predecessor and inheritor with largest shareholder requirement assuming he is also the director. Thirdly, the current regulation stipulates that reasonable cause of not engaging in the family business as military service, diseases, or education. If such regulation is interpreted narrowly, insolvency under normal condition would be excluded. However, study on the definition should be adopted in order to exclude insolvency under normal condition from the reasons for additional collection. Fourth, change of industry is an inherent business decision of the company for its own continuity of business. Therefore, any regulation related to change of industry should be alleviated in order to respect the intent of tax reduction for family business succession. For the reason, it would be proper to change the wording in the title of the regulation to ‘entity business succession’ from ‘family business succession’. Fifth, it is not reasonable to stipulate the employment maintenance requirement by limiting the number of employees since it hinders the elasticity of each company’s employment policy. The total amount of employment costs should be applied rather than the number of employees. Moreover, such requirements should be tested on accumulative basis instead of annual basis. Long-term improvement would be to abolish tax deductions for family business succession and to introduce deferred tax system. Deferred tax system is more reasonable than the current tax deductions for family business succession because it does not exempt a partial tax, but defers the taxation until the disposal of assets related to management rights, and accordingly the tax amount paid by taxpayer who are subject to deferred tax system and who are not subject to deferred tax system are identical.