Ministry of SMEs and Startups, National Tax Service Partner to Ease Tax Audit Burden for 2,559 Promising AI SMEs and Startups

The Ministry of SMEs and Startups fosters growth; the National Tax Service provides tax supportAI startups established within the past five years excluded from regular tax auditsOther AI SMEs: 2-year deferral; regional companies: 3-year deferral

The Ministry of SMEs and Startups and the National Tax Service will coordinate policy and tax administration support for 2,559 promising AI small and medium-sized enterprises (SMEs) and startups, including excluding them from selection for regular tax audits or deferring their audits.

The Ministry of SMEs and Startups said on October 11 that it had agreed with the National Tax Service to coordinate support from both agencies for 2,559 promising AI SMEs and startups, helping them grow and lead the future AI industry.

This support follows up on a business agreement signed by the two agencies in December last year to support the growth of AI SMEs and startups. Under this interagency collaboration model, the Ministry of SMEs and Startups identifies SMEs and startups with strong growth potential in the AI sector and supports their technology development (R&D), commercialization, financing, business formation, and global expansion, while the National Tax Service provides them with tax administration support.

This year, the Ministry of SMEs and Startups supported AI SMEs and startups through 20 programs aimed at developing AI models and services and applying AI technologies in industrial settings, and shared the list of eligible companies with the National Tax Service. The programs included not only AI R&D but also the commercialization of AI products, preferential guarantees for AI and AI transformation (AX), AI-powered smart factories, deep-tech startup support, and global acceleration.

The National Tax Service will provide eligible companies with reduced tax audits and verification; priority processing of advance reviews for tax credits on research and human resources development expenses, as well as consulting on corporate tax credits and reductions; liquidity support, including extensions of tax payment deadlines and early refunds; and tax consultations specifically for AI companies.

In particular, AI startups established within the past five years will be excluded from selection for regular tax audits. At the request of the taxpayer, regular tax audits of other AI SMEs will be deferred for two years, or up to three years for companies located outside the Seoul metropolitan area. Companies will also be excluded from reviews of their filed tax returns, provided there is no clear suspicion of tax evasion, easing the burden of tax verification.

The two agencies decided to coordinate their support because AI startups need to make large investments from the early stages of technology development to recruit talent and build data and computing infrastructure, while it can take considerable time to secure stable sales and profits. The Ministry of SMEs and Startups said the collaboration establishes a foundation for companies to receive both policy and tax administration support as they grow.

Minister of SMEs and Startups Lee Soyoung said, "Through this collaboration, we will closely coordinate the Ministry of SMEs and Startups' support for R&D, commercialization, financing, and global expansion with the National Tax Service's tax administration support, creating a foundation that will enable promising AI SMEs and startups to focus more on technology development and growth."

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