Abstract

The purpose of this paper is to analyze the current regulations of the family business inheritance deduction and suggest future improvement measures. Specifically, the current laws and regulations were analyzed by dividing them into family business requirements, ancestor requirements, heir requirements, and follow－up management requirements, and improvement measures were suggested for each requirement. As a result of the study, measures to improve the family business inheritance deduction system were suggested in the following three ways. First, various industries excluded from the current regulations were added among the proviso that the business subject to the family business inheritance deduction under the Enforcement Decree of the Inheritance Tax and Gift Tax Act would be the main business. Second, in relation to the inauguration of the heir as the CEO, it was revised to enable the introduction of professional managers to promote management efficiency through a professional management system. Finally, among the requirements for maintaining the heir's share, the regulation related to the real right of the paid－in capital increase, which is not directly related to the heir's maintenance of the share, was deleted, and only direct and active stock disposal was considered a decrease in the share and regulations related to real rights were deleted. The contribution of this study is that it proposed specific improvement measures to strengthen the effectiveness of the family business inheritance deduction, and presented specific tax law amendments in the form of legal texts. Since such a specific tax law amendment in the form of legal texts can be practically applied immediately, it can be an important factor to inspire practical application of the family business inheritance deduction in the direction of enhancing understanding of the family business inheritance deduction in the tax field and grasping specific revision elements directly required in the field in advance. In the future, it can be expected that policy makers who promote the revision of the law on the family business inheritance deduction will be able to provide useful implications to tax authorities to facilitate the application of the family business inheritance deduction and confirm follow－up management requirements.

Keywords

• Family Business Inheritance Deduction
• Businesses Subject To Family Business Inheritance Deduction
• Family Business Inheritance Tax
• Follow－Up Management

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