[Edaily Kang Gyeong-rok Travel Reporter] As the government pushes for a tax law amendment to exclude the tourist hotel industry from the family business inheritance tax deduction, the tourism industry has launched a collective response. They argue that treating hotels as mere real estate leasing businesses and excluding them from the deduction ignores the essence of the tourism industry—which involves continuous investment in facilities and job creation. As the government decided to increase the deduction limit to a maximum of 100 billion won while simultaneously narrowing the scope of eligible industries, the issue of business succession for long-standing tourism companies has emerged as the central point of contention.
According to the tourism industry on the 3rd, 12 tourism organizations—including the Korea Tourism Association, the Korea Hotel Association, the Korea Travel Agents Association, and the Korea MICE Association—recently submitted a joint petition to lawmakers on the National Assembly’s Planning and Finance Committee’s Tax Subcommittee, requesting that “the tourism hotel industry be maintained as an eligible sector for the family business inheritance tax deduction.” The Korea Hotel Association, which had previously submitted a separate petition to the National Assembly on the 23rd of last month, has now escalated its response through a comprehensive, industry-wide solidarity campaign.

◇Reorganization of727 eligible industries… Tourist hotel industry “left out”
The family business inheritance tax exemption is a system that excludes a portion of the inherited assets from taxation when small, medium, and mid-sized enterprises that have operated a family business for at least 10 years transfer ownership to a successor. Under current legislation (linked to the Tourism Promotion Act), sectors such as tourist accommodation, international conference services, and theme parks are included in the exemption.
However, the amendment to the Inheritance and Gift Tax Act submitted by the government to the National Assembly completely reorganizes the eligible industries based on the Korean Standard Industrial Classification (detailed classification), specifying in the law only the 727 industries that require the succession of specialized technical skills and management know-how. In this process, the tourism hotel industry, which had previously been eligible, was abruptly excluded. Conversely, some related industries, such as exhibition, convention, and event planning services, remain eligible, raising concerns about fairness.
The government maintains that it aims to block circumvention of inheritance laws and tax evasion through asset holdings and to concentrate benefits on companies that genuinely succeed technical expertise and know-how. The amendment raises the deduction limit from the current maximum of 60 billion won to 100 billion won, but in exchange, it significantly tightens the minimum management period requirement from 10 years to 20 years (30 years in principle) and extends the basic post-approval monitoring period from 5 years to 10 years.
◇ Hotel Industry: “It’s Unfair to Be Treated as a Real Estate Leasing Business”
The hotel industry is strongly opposing the approach of blocking tax deductions for the sector as a whole. Hotels operate 24 hours a day and are “labor-intensive, comprehensive tourism service industries” that require skilled personnel and large-scale, sustained investment in areas such as guest rooms, food and beverage, banquets, and conventions. The industry argues that equating them with simple real estate leasing businesses merely because they own buildings and land fails to reflect the true nature of the industry.
According to the office of People Power Party Representative Kim Sang-hoon, as of August of this year, there were 109 tourist hotels nationwide (8.6% of the total) that have been in operation for 30 years or more. In the case of the Daegu Grand Tourist Hotel, which has been in operation since 1992, it is estimated that if the hotel industry is excluded from the deduction as proposed in the amendment, it would face an inheritance tax burden of approximately 24.3 billion won.
The industry is concerned that if the inheritance tax burden leads to a decline in regular facility maintenance and renovations or forces businesses to sell, it will deal a blow to the local tourism ecosystem and jobs.
An official from the Korea Hotel Association emphasized, “We are not asking for blanket benefits for all hotels; rather, we are asking that companies operating solely for real estate rental purposes be weeded out, while strict reviews be conducted based on substantive criteria such as the number of permanent employees, operating performance of guest rooms and ancillary facilities, the proportion of hotel operating revenue in total sales, and records of facility investment and maintenance.”
There are also ongoing efforts in the National Assembly to curb the reduction of industries eligible for tax deductions. Rep. Ahn Sang-hoon of the People Power Party and others have proposed an amendment to prevent arbitrary reductions in eligible industries, maintain the current list of eligible sectors, and require any changes to undergo National Assembly review.
The government’s amendment is currently pending before the Subcommittee on Bill Review of the National Assembly’s Planning and Finance Committee. Since the amendment is scheduled to take effect for inheritances commencing on or after July 1, 2027, the legislative battle between the National Assembly, the government, and the industry over whether to include the tourism hotel industry in the tax deduction scope is expected to intensify.