Tax authorities will exempt small and medium-sized enterprises (SMEs) that increase employment and investment from regular tax audits.

The National Tax Service announced today (October 28) that SMEs that submit job creation plans or investment expansion plans will be excluded from the selection process for regular corporate tax audits for the 2025 business year and comprehensive income tax audits attributable to 2025.

The job creation support targets SMEs that submit job creation plans committing to increase their number of full-time employees next year by 2% to 3% (at least one person) or more compared to this year.

If the business revenue for the 2025 business year is less than 50 billion won, the number of full-time employees must increase by 2% or more; if it is between 50 billion won and 180 billion won, the increase must be 3% or more.

When an ordinary SME hires a full-time employee who is a youth (aged 15 to 34), it is counted as hiring two employees to calculate the job creation rate. Similarly, youth-startup SMEs and youth job powerhouse SMEs are given preferential treatment for youth employment and youth-led businesses by having the hiring of one general full-time employee counted as two.

Preferential treatment for vulnerable groups is also applied by giving a double weighting—just like youth employment—when ordinary SMEs hire older adults (aged 60 or older) and individuals with disabilities.

The investment expansion support targets SMEs that submit investment expansion plans to increase their investment amount next year by 5% to 20% or more compared to this year.

To support regional economic revitalization and balanced national development, different standard investment ratio thresholds are applied by distinguishing between business sites in the capital area (Seoul, Incheon, Gyeonggi) and regional areas.

For business sites in the capital area, if the business revenue for the 2025 business year is less than 50 billion won, investment must expand by 10% or more, and if it is between 50 billion won and 180 billion won, by 20% or more. For regional business sites, the required investment increase ratios are 5 percentage points (p) lower—at 5% or more (revenue under 50 billion won) and 15% or more (revenue between 50 billion won and 180 billion won).

For SMEs investing simultaneously in both the capital area and regional areas, if the investment ratio in regional business sites is 80% or more, the regional business site investment criteria will be applied.

Plans can be submitted online via Hometax from November 2 to 30, or submitted by mail or in person to the local tax office.

When filling out the plan on Hometax, the system automatically calculates the employment increase ratio, investment increase ratio, and other metrics.

If a company that was initially selected for regular audits—such as those with low compliance ratings—is excluded from regular audit selection by submitting a job creation plan or investment expansion plan, but fails to increase employment and investment as originally planned, it will be selected for regular tax audits for the 2025 business year in 2028.

In addition, businesses with disclosed lists of unpaid wages, unfaithful businesses such as those with tax arrears, tax crimes, or window dressing (fraudulent accounting), and those who fail to submit faithful reporting verification statements will be barred from receiving tax support.

(Photo: Yonhap News)