(1) Reasons for Proposal

The State Property Act was amended (Act no. 15425; promulgated on March 13, 2018; to be enforced on March 14, 2019) to increase the scope of persons who shall not purchase securities paid in kind at a price lower than the receiving price, thereby aiming to prevent tax evasion by taxpayers who have paid their national taxes in the form of stocks. Accordingly, this Amendment specifically prescribes the scope of persons prohibited from purchasing securities paid in kind at a price lower than the receiving price as delegated by the Act. It also supports micro enterprises and social economic enterprises using state property by allowing them to make payments in installments, and otherwise addresses and improves upon a number of weaknesses that have emerged from the operation of the current system.

(2) Major Provisions

A. Lower usage fees for key social economic enterprises (Article 29, paragraph 1, subparagraph 7 newly inserted)

Support the use of state property by social economic enterprises by reducing the usage fee from at least 50/1000 (standard rate) to at least 25/1000 of the current value of the property when state property is permitted for use by or loaned to key social economic enterprises (cooperative associations, village enterprises, self-sufficient enterprises, social enterprises)

B. Specify the scope of persons prohibited from purchasing securities paid in kind at a price lower than the in-kind price (Article 47-2 newly inserted)

Specify that in the main text of Article 44-2, paragraph 1 of the Act, “persons designated by Presidential Decree” shall refer to any family member under Article 779, paragraph 1 of the Civil Act, and any corporation where the total number of stocks owned by the payer himself or herself and family members under Article 779, paragraph 1 of the Civil Act is greater than the number of stocks owned by any other stockholder based on the number of stocks issued by the corporation at the time of the payment of taxes in-kind

C. Allow key social economic enterprises and micro enterprises to make payments in installments (Article 55, paragraph 1, subparagraph 10; paragraph 3, subparagraph 6 newly inserted)

Help social economic enterprises and micro enterprises to secure business space by prescribing that where state property has been sold, the payment may be made in installments over a period of up to five years for key social economic enterprises (cooperative associations, village enterprises, self-sufficient enterprises, social enterprises) or up to ten years for micro enterprises