How Small-Scale Sole Proprietors Can Apply for the 2026 Special Tax Arrears Collection Provision ================================================================================================ Small-scale sole proprietors whose combined comprehensive income tax and value-added tax arrears are at most KRW 80 million may apply for exemption from late-payment penalties and installment payments over up to 5 years if they meet the business closure, revenue, and restart requirements. For applications filed on or after April 1, 2026, workers in special forms of employment who have provided labor for at least 3 months may also qualify under the restart requirement. - In Hometax, calculate the combined comprehensive income tax and value-added tax arrears and identify the tax office administering each arrear. - Check whether the closure date, average revenue for the 3 tax years before closure, and the period of restarting a business, employment, or labor provision meet the application requirements. - Prepare identification and business registration, employment, or labor provision documents proving the business closure and restart. - If 2 or more tax offices have jurisdiction over the arrears, separate the arrears by jurisdiction and submit an application to each tax office. - Apply through Hometax, Sontax, Government24, or the competent tax office, and pay the principal according to the approved installment schedule. If you restarted a business after closing one, or resumed economic activity through employment or providing labor, first check whether the combined amount of delinquent comprehensive income tax and value-added tax is at most KRW 80 million. If you meet the requirements and the special collection provision for delinquent taxes is approved, the additional tax for late payment incurred after the delinquency will be waived, and the principal amount of the eligible tax may be paid in installments over up to five years. This program is not a subsidy that pays or eliminates the principal tax amount. It is a national tax program that helps former business owners get back on their feet by adjusting how the principal is paid and the burden of additional tax for late payment, and approval is not automatic upon application. Step 1: Check Your Delinquent Taxes and Jurisdictional Tax Office Look up your delinquency details on Hometax or Sontax and organize the following information. Delinquent comprehensive income tax Delinquent value-added tax Principal tax and additional tax for late payment by tax category The jurisdictional tax office managing the delinquent taxes Whether delinquency enforcement measures, such as seizure, are underway KRW 80 Million Is the Total Amount, Not an Amount per Tax Office As of the application date, determine whether the combined amount of delinquent comprehensive income tax and value-added tax eligible for the special provision is at most KRW 80 million. Even if multiple tax offices have jurisdiction, the KRW 80 million threshold does not apply separately to each tax office. Do not assume that withholding tax, capital gains tax, corporate tax, local taxes, and other taxes are automatically included in this total or covered by the special provision. The primary targets of this program are comprehensive income tax and value-added tax owed by small-scale individual business owners, so confirm other tax categories separately with the relevant authority. Step 2: Check the Business Closure, Revenue, and Restart Requirements Based on the 2026 guidance, you must check all of the following requirements. Because the applicable periods for the closure date and restart date may vary under transitional provisions following tax law amendments, it is safest to check the National Tax Service guidance and confirm with the jurisdictional tax office immediately before applying. Category What to Check Business owner status Confirm that you were a small-scale individual business owner, not a corporation. Business closure Confirm the requirements for the timing of the business closure in the National Tax Service guidance and with the jurisdictional tax office immediately before applying. Average revenue Confirm in the National Tax Service guidance and with the jurisdictional tax office whether the average gross business income for the three taxable years immediately preceding the closure meets the threshold. If the business operated for less than three taxable years, ask the tax office how the calculation applies. Delinquent taxes Confirm that the combined amount of eligible delinquent comprehensive income tax and value-added tax is at most KRW 80 million as of the application date. Business restart Confirm in the National Tax Service guidance and with the jurisdictional tax office whether you newly registered a business within the recognized period and continued operating it for the required period. Employment Confirm in the National Tax Service guidance and with the jurisdictional tax office whether you became employed within the recognized period and worked for the required period. Provision of labor For applications filed on or after April 1, 2026, continuously providing labor for at least three months as a labor provider may also qualify as meeting the restart requirement. Grounds for restriction Confirm that there are no statutory grounds for restriction, such as a record of punishment for tax offenses or an ongoing related trial or investigation. Confirm the period recognized for restarting economic activity in the National Tax Service guidance and with the jurisdictional tax office immediately before applying. However, separate transitional provisions may apply if you already restarted under previous rules. Do not disqualify yourself based only on the dates; instead, provide the tax office with your closure date and restart date for confirmation. Minimum Continuous Period by Type of Restart Business restart: You must actually continue operating the business for the required period, rather than merely registering it, and you must confirm the specific period in the National Tax Service guidance and with the jurisdictional tax office. Employment: You must prove that you continuously worked under the same employment relationship for the required period, and you must confirm the specific period in the National Tax Service guidance and with the jurisdictional tax office. Provision of labor: The scope was expanded for applications filed on or after April 1, 2026, and you must prove that you provided labor for at least three months through contracts, payment records, and other documentation. The application deadline may vary depending on the business closure date, restart date, and transitional provisions. In particular, do not mistake the last day of the recognized restart period for a common deadline applicable to all applicants. Check the filing period in the official civil service guidance in effect when you apply. Step 3: Prepare Application Documents Documents that the National Tax Service can verify electronically may not need to be submitted, but it is advisable to prepare documents proving the type of restart in advance. Common Documents Application for the Special Collection Provision for Delinquent Taxes Identification document for identity verification Trade name, business registration number, and closure date of the closed business List of delinquent tax categories, amounts, and jurisdictional tax offices If applying through a representative, documents proving authority to act, such as a power of attorney and the representative’s identification If You Restarted a Business New business registration number and opening date Business registration certificate or documentation verifying business registration Supplementary documents requested by the tax office, such as sales, lease, or transaction records showing that you continuously operated the business for at least one month If You Became Employed Certificate of employment or employment contract Salary payment records or earned-income withholding documentation Documents verifying the employment period under the official requirements, such as health insurance or employment insurance eligibility records If You Are a Labor Provider, Including a Special-Type Worker Labor provision contract Documentation verifying the period of service or labor provision Evidence of activity for at least three months, such as income payment statements, settlement statements, or deposit records Whether you qualify as a labor provider may not be determined solely by the title of the contract. Because the jurisdictional tax office may review the actual contractual relationship together with income records, prepare documents that connect the period of activity with payments received. Step 4: Submit a Separate Application to Each Jurisdictional Tax Office If two or more tax offices have jurisdiction over the delinquent taxes, you must submit an application to each tax office. This is because each jurisdictional tax office manages the assessment and collection data and delinquency enforcement records for the delinquent taxes, and each office reviews whether the special provision applies to the delinquent taxes under its management. For example, if Tax Office A manages delinquent comprehensive income tax and Tax Office B manages delinquent value-added tax from a former business, proceed as follows. Add together all eligible delinquent taxes and confirm that the total is at most KRW 80 million. List the delinquent taxes managed by Tax Office A and apply to Tax Office A. List the delinquent taxes managed by Tax Office B and submit a separate application to Tax Office B. Check each tax office’s requests for supplementary documents and review results separately. If you apply to only one office, the special provision may not apply to delinquent taxes managed by another tax office. Step 5: Apply Through an Official Channel Choose an available method from the following official channels. Hometax In Hometax’s general tax document application menu, search for Special Collection Provision for Delinquent Taxes by the name of the civil service request and apply. If the screen layout has changed, look under Certificates, Registration, and Applications for the tax-related application or general tax document application menu. The main information to enter is as follows. Applicant’s personal information Closed business information and closure date Business registration number and opening date of the restarted business Employment date or start date of labor provision Tax office with jurisdiction over the delinquent taxes Tax categories and delinquent amounts for which the special provision is requested Information related to installment payments Supporting document attachments Sontax You may also submit the application through the relevant tax application menu in Sontax. If you cannot find the request on the mobile screen or have difficulty uploading attachments, use Hometax or apply in person at the tax office. Government24 The Government24 guidance for applying for the Special Collection Provision for Delinquent Taxes provides information about application methods, processing agencies, and required documents. After logging in, check whether an online application button is available and where the application must actually be submitted. Visit a Tax Office You may submit the application to the department responsible for delinquent tax collection at the jurisdictional tax office managing the delinquent taxes. If you must apply to multiple tax offices, ask each office about the required documents and submission method before visiting to reduce repeat visits. What Changes If You Are Approved Item Details of the Special Provision Principal tax It is not waived and must be paid according to the approved schedule. Additional tax for late payment The additional tax for late payment incurred after delinquency may be waived for delinquent taxes covered by the special provision. If there was a period during which the previous surcharge system applied, that amount will also be handled within the scope of the program. Installment payments The eligible principal may be paid in installments over up to five years. The actual number of installments and schedule must be confirmed in the approval details. Other tax categories and local taxes They are not adjusted through this approval. Check separate programs for each tax category and local taxes. The approval notice will show the covered tax amount and payment schedule. Before making the first payment, cross-check the principal tax, the amount subject to waiver, the number of payments, and the payment dates. An Easily Overlooked Point: Review Your Payment Plan Before Applying Rather than only checking your eligibility and automatically choosing the maximum five-year installment period, it is important to establish a payment plan that fits your actual cash flow. Calculate the amount you can pay from monthly business income or salary after fixed expenses. Separately organize existing seizures, other national and local taxes, and financial debt. Check the approval notice and ask the jurisdictional tax office how a missed payment date will be handled after approval. If your address changed after closing the business, check that your contact information and service address in Hometax are current. If two or more tax offices are involved, manage all payment schedules in a single calendar. This program is not a procedure for deleting the fact of delinquency itself. Therefore, separately from applying for the special provision, you must ask the relevant authorities about the release of seizures, eligibility for issuance of a tax payment certificate, and local tax delinquency issues. What to Check After Applying Check the civil service request results in Hometax or Sontax, or the notice from the tax office. If supplementary documents are requested, submit the business restart, employment, or labor provision documents within the specified period. Confirm that the approved tax amount does not omit other tax categories or delinquent taxes managed by another tax office. Check the waived additional tax for late payment separately from the remaining principal. Add the approved installment payment schedule to a calendar or automatic reminder. If the application is denied or only some delinquent taxes are approved, obtain written confirmation of the reason for denial and the tax amounts covered. If the issue concerns the closure date, continuous business operation or employment period, delinquent tax category, or insufficient evidence, you may prepare additional documents and ask the responsible tax office about available procedures. FAQ Q. Is the 80 million won threshold for tax arrears applied separately by tax office? A. No. As of the application date, the tax arrears eligible for the special provision, including comprehensive income tax and value-added tax, are aggregated regardless of the tax office with jurisdiction to determine eligibility. However, applications must be submitted separately to each tax office that manages the respective tax arrears. Q. Is the principal amount of the delinquent taxes also waived? A. The principal is not waived. If approved, the late payment penalty tax accrued after the eligible taxes became delinquent may be waived, and the principal may be paid in installments over a period of up to five years. Q. Does simply registering a business again satisfy the business restart requirement? A. Business registration alone may not be sufficient. Check the qualifying period and the required continuous business operation period in the National Tax Service guidance and with the tax office with jurisdiction, and prepare documentation demonstrating continuous business operations, such as sales, transactions, and lease records. Q. If I have found employment, how long must I work? A. You must check the required period of continuous employment in the National Tax Service guidance and with the tax office with jurisdiction. You can prove your employment period with a certificate of employment, employment contract, payroll records, or social insurance eligibility records. Q. Can workers in special types of employment also apply? A. For applications submitted on or after April 1, 2026, continuously providing labor for at least three months as a labor service provider may also qualify as meeting the fresh-start requirement. Prepare documents such as contracts and income payment records, and confirm your specific eligibility with the tax office with jurisdiction. Q. Where should I apply if multiple tax offices have jurisdiction over my tax arrears? A. You must apply separately to each tax office. Although all eligible tax arrears are aggregated to determine whether they meet the 80 million won threshold, each tax office with jurisdiction reviews and approves the tax arrears it manages. Q. Can local tax arrears also be paid in installments? A. This special provision primarily applies to national taxes, specifically comprehensive income tax and value-added tax, and therefore does not automatically apply to local taxes. For local tax arrears, you must consult separately with the collection department of the local government with jurisdiction. Q. What should I do if I cannot find the application menu on Hometax? A. Search for the special provision for the collection of tax arrears in Hometax's general tax document application menu. If the menu does not appear due to a screen redesign or application requirements, check the civil service guidance on Government24 or visit the tax office with jurisdiction over the tax arrears to apply. Q. Will the seizure be lifted immediately upon application? A. Submitting an application does not necessarily mean that all seizures will be lifted automatically. You must separately check with the tax office with jurisdiction over the tax arrears regarding the status of the tax delinquency disposition process and whether the seizure can be lifted, apart from the review and approval of the special provision. Q. What is the application deadline? A. The qualifying fresh-start period and the actual application period may vary depending on the business closure date, fresh-start date, and transitional provisions of tax law. Check the basic qualifying fresh-start period in the current guidance, and confirm the final submission deadline that applies to you on the application screen and with the tax office with jurisdiction. Sources - Seoul Regional Tax Office Guide to Special Provisions for Collecting Tax Arrears from Small-Scale Sole Proprietors: https://d.nts.go.kr/seoulnts/na/ntt/selectNttInfo.do?mi=4020&nttSn=1354302 - National Tax Service Special Provisions for Collecting Tax Arrears from Small-Scale Sole Proprietors: https://sc.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=239088&mi=41133 - Sontax Service for Applying for Special Provisions for Collection of Tax Arrears: https://mob.tbht.hometax.go.kr/jsonAction.do?actionId=UTBATECA01F001 - Government24 Guide to Applying for Special Provisions for Collection of Tax Arrears: https://www.gov.kr/mw/AA020InfoCappView.do?CappBizCD=12100000362&HighCtgCD=A09002&tp_seq= Images - Woman in blue workwear reviewing paperwork with an office employee at a service counter: https://onbinder.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTQ5NzQsInB1ciI6ImJsb2JfaWQifX0=--fea601f644d6ba3a339e725e8924382417ace970/ai-eac40b03.webp - Person applying online for tax arrears relief, surrounded by shops, documents, government offices, and coins: https://onbinder.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTQ5ODAsInB1ciI6ImJsb2JfaWQifX0=--f5c915bc1c9b8dcf2effb2968bb3dae7fe8d18a5/ai-fa9120c8.webp --- Category: Policy Guide Source: https://onbinder.com/en/articles/2026-small-business-tax-arrears-special-collection-application License: cc_by Translation-Status: reviewed