The Korean National Tax Service has announced the implementation of a system that will absolve economic hardship debtors, specifically those who owe less than 50 million won in tax delinquency. This initiative is targeted at small business owners who have declared bankruptcy and are struggling to financially recover. Initially piloted from 2018 to 2019, the program was reintroduced due to the significant challenges faced by individuals who have been unable to rebuild their credit standing after extended periods of delinquency, leading to complications in daily economic activities such as credit card issuance.

To qualify for the waiver of payment obligations, applicants must satisfy five specific criteria, including having ceased all business operations and demonstrating financial hardship. Additionally, their total delinquent tax amount must not exceed 50 million won as of January 1, 2025, and their average business income for the three years prior to cessation must be below 1.5 billion won. Furthermore, applicants must not have faced criminal penalties related to tax offenses within the last five years or have previously applied for the debt relief program.

Taxpayers interested in this program can apply either in person at their local tax office or online through the HomeTax system. Tax authorities will conduct a thorough examination of the applicant's income and asset status to confirm eligibility. Decisions regarding the cancellation of the payment obligation will be made within six months of the application, following an assessment by the National Tax Delinquency Management Committee. The National Tax Service plans to prioritize outreach to approximately 285,000 individuals who owe less than 50 million won in total delinquency, anticipating that many of these individuals will meet the legal criteria for this new relief initiative.