Compare final cash before choosing a business closure date
This calculator compares two realistic closure dates for a business in South Korea, using Korean rules verified on 2026-09-05.
All monetary inputs and results are in KRW, including on this English page.
It combines operating cash, demolition support, remaining-goods VAT, tax reserves, deposit repayment and benefit receipts so that the timing decision can be reviewed as a whole.
A larger grant does not necessarily make a later closure worthwhile.
Additional rent, payroll and utilities can exceed the tax saving or support you expect to receive.
The main outputs are final settlement cash, cash excluding all support and the largest funding shortfall before money comes back.
These are conditional planning results for the two dates you enter; actual cessation of business and the administrative filing date must be established from the facts.
Who this comparison helps
It is designed for restaurant, retail and other small-business owners deciding whether to close soon, at lease expiry or after a year boundary.
Use it to prepare a conversation with your tax adviser, landlord and the support agency.
A higher final balance does not establish eligibility or permit changing the recorded closure date independently of actual business activity.
The 2026 demolition grant and free closure consulting
The policy reference is the Small Enterprise and Market Service (SEMAS) second amended Hope Return Package one-stop closure support notice dated 2026-08-03.
Demolition and restoration support is limited to KRW 200,000 per 3.3 m² of accepted exclusive floor area, the accepted cost excluding VAT, and the applicable overall cap.
VAT on the contractor invoice is excluded from grant support, so the amount you must pay upfront can be higher than the amount reimbursed.
Caps by actual closure date
- 2023-01-01 through 2025-07-10: up to KRW 4,000,000
- From 2025-07-11: up to KRW 6,000,000 under the verified notice
- Estimated grant = min(accepted cost excluding VAT, area cap, closure-date cap)
Availability is a separate check
The notice accepts applications until the budget is exhausted.
This tool does not query remaining funds, reserve a place or determine approval.
Checking availability today does not guarantee availability on a future application date.
Unchecked requirements or an unconfirmed or closed application status exclude demolition support from the cash total.
The demolition application opening checked by the model is 2026-01-28.
The model expires the automatic policy calculation after 2026, rather than carrying unverified amounts into 2027.
Its 2026-12-31 boundary is a model validity boundary, not an official application deadline.
A payment date in the following year can be entered for a 2026 case, but the agency must confirm the permitted evidence-submission and settlement dates.
Consulting is a service, not cash income
The notice also covers business closure consulting in areas such as tax, property, transition strategy, employment skills and psychological support.
The calculator checks basic small-business, industry and operating-period conditions, without inventing a cash value for that service.
Closure-related tax-filing assistance is available within the notice scope for businesses already closed.
Ask the agency which services can be requested and whether applications remain open.
Legal advice and debt-adjustment assistance have separate procedures and are not added to the cash balance.
Check eligibility and collect evidence before demolition
The verified operating-period requirement is at least 60 days.
For an already closed business, the period ends on closure; for a business planning closure, it ends on the application date.
The pre-check counts both endpoints, subject to the dates on official certificates and the agency decision.
Moving a future closure date later does not solve a short operating period on an earlier application date.
- Confirm small-business status using the relevant revenue and employee criteria, as well as the principal industry.
- Check that the premises are held under a paid lease with acceptable documentation; owned or free premises are excluded.
- Confirm accepted building use, lawful status and exclusive area. Residential, temporary and unlicensed buildings are generally excluded; exceptions require agency review.
- Check prior demolition support for the representative and overlapping government or local support for the same cost.
- Review exclusions for relocation and reopening at the same site within three years after receiving support.
- Use a registered contractor and retain work, payment and before/after photographic evidence. Self-performed demolition is excluded.
Use the confirmed exclusive area of the leased unit, not the total building floor area or common space.
Compare the lease with the building register and other accepted evidence.
The planning formula divides area by 3.3 and multiplies by KRW 200,000, rounding to the nearest won at the end.
This proportional decimal treatment is a modeling assumption; the agency decides the accepted area and any truncation convention.
Costs outside the grant claim belong in other settlement costs.
Keep an evidence file
Prepare the lease, building register, business registration or closure certificate and evidence of small-business status.
Keep the work breakdown, electronic tax invoice or card slip, bank transfer confirmation or card payment completion evidence, and photographs before and after work.
Photographs taken from the same position help show what changed.
Cash-only arrangements may fail the payment-evidence requirements; check the official submission guide before agreeing how to pay the contractor.
Remaining-goods VAT and income-tax timing
General-taxpayer VAT formulas
For qualifying remaining goods with deductible input VAT, buildings and structures use acquisition value × (1 − 5% × elapsed tax periods), capped at 20 periods.
Other depreciable assets use acquisition value × (1 − 25% × elapsed tax periods), capped at 4 periods.
VAT is 10% of the residual taxable value.
Inventory uses its market value at closure multiplied by 10%.
Use tax periods, not exact anniversaries
A general taxpayer uses half-year periods: January–June and July–December.
The acquisition period starts at zero elapsed periods; a half-year boundary can change the result even when six full months have not passed.
Use acquisition value eligible for input VAT deduction, excluding VAT, rather than the current book balance.
Do not include goods already disposed of as goods remaining at closure.
The automatic comparison assumes the same assets and inventory market value at both dates.
If inventory will be sold or assets disposed of differently, use checked VAT mode and enter the amount for each scenario.
Simplified taxpayers, exempt operations, comprehensive business transfers, mixed-use assets and other special cases must not be treated as ordinary general-taxpayer cases without review.
The calculator reuses the Korean remaining-goods VAT function for both languages.
The base VAT filing date is the 25th of the month after the closure month under Value-Added Tax Act Article 49.
The displayed date is not adjusted for holidays or individual extensions; verify the operative filing deadline with Hometax.
Your cash-planning tax date is entered separately.
Enter other VAT payable and confirmed refunds without counting remaining-goods VAT twice if it is already included in a complete return estimate.
A later closure does not move earlier income into a new year
For an individual, the normal income-tax year runs from January through December under Income Tax Act Article 5.
Article 70 generally places the final filing in May of the following year.
Closing in January 2027 does not move income earned in 2026 into 2027.
The output lists income years from the comparison start through closure and their usual following-May filing months.
Include unpaid tax from earlier periods and other relevant income in the reserve; special filing rules and corporate-tax schedules need separate advice.
Reemployment allowance and Yellow Umbrella proceeds
Reemployment allowance is not automatic upon filing a business closure.
The official guidance requires closure of all businesses in the applicant name, the applicable 2025 or 2026 basic and advanced employment training, and other payment requirements.
Stage 1 is KRW 600,000 and stage 2 is KRW 400,000, totaling at most KRW 1,000,000.
Stage 2 requires employment after advanced training, at least 60 days of insured employment and completed stage 1 payment.
Select only an outstanding amount whose individual requirements and application deadline have been checked with the agency.
Self-employed employment insurance and the insured employment period after taking a job are different checks.
Training participation allowances, linked employment-service payments and self-employed unemployment benefits are not included in this selector.
Include amounts already received in starting cash, not again in support receipts.
If receipts occur on different dates, the single support receipt date can use the later date for a conservative funding comparison.
Enter a confirmed net Yellow Umbrella benefit
A closure-related benefit and a voluntary cancellation can have different tax treatment.
Enrollment date, contribution history, previous deductions and the payment reason matter.
The tool does not infer a tax amount from the total contributions or apply an invented flat rate.
Enter the after-tax benefit checked with the mutual-aid provider, and avoid adding already withheld tax again to the reserve.
If the amount is unknown, compare with zero first and update it once confirmed.
How to enter the two scenarios and read the cash formula
- Choose one comparison start and the cash held then. Include transactions completed before that date in starting cash.
- Enter monthly operating cash receipts and monthly costs separately. Future wages after closure or investment returns are not forecast automatically.
- Check support requirements against documents and enter asset type, acquisition date and value. Choose two dates on which closure is actually possible.
- Enter demolition cost, net deposit repayment, after-tax benefit and the full tax reserve for each scenario. Add remaining lease obligations and penalties to other costs.
- Check payment and receipt dates, compare final cash and peak shortfall together, then export the CSV with input assumptions for review.
Final settlement cash
Final cash = starting cash + operating receipts + deposit returned + net benefit + support + VAT refund − carrying cost − demolition cost excluding VAT − demolition VAT − other costs − remaining-goods VAT − other VAT payable − income and other tax reserve.
Deposit principal returned is part of cash recovery, not business profit.
The separate cash-without-support figure removes both demolition support and the selected reemployment allowance.
Monthly operating amounts are divided by 30 and prorated from the day after the comparison start through the closure date.
This does not reproduce each lease billing cycle.
If a full extra month of rent or a termination penalty remains due after closure, account for it separately without repeating costs already included.
The tool applies daily cash flows and conservatively processes payments before receipts on the same day.
With zero starting cash, paying KRW 1,000,000 and receiving KRW 1,000,000 on the same date leaves zero closing cash but requires KRW 1,000,000 of temporary funding under that convention.
The demolition date includes demolition and other settlement payments; the recovery date combines deposits, net benefits and VAT refunds.
The tax date pays the full entered reserve, and the support date combines eligible support receipts.
These simplifications make the assumptions reviewable but are not a substitute for a transaction-by-transaction treasury schedule.
Processing times are not official guarantees.
Worked example: close this year or continue into 2027
Start on 2026-09-01 with KRW 5,000,000 in cash, monthly costs of KRW 900,000 and no operating receipts.
Assume 66 m² of exclusive area, demolition cost excluding VAT of KRW 5,000,000, demolition VAT of KRW 500,000 and a KRW 10,000,000 deposit repayment.
Only equipment acquired on 2025-08-01 for KRW 20,000,000 excluding VAT remains.
Other costs and taxes are set to zero purely to isolate the comparison; a real user must replace these with checked amounts.
A: close on 2026-09-30
The additional operating period is 29 days, costing KRW 870,000.
Two elapsed half-year periods produce KRW 1,000,000 of remaining-goods VAT.
If all demolition checks and availability are confirmed, the area-limited conditional grant is KRW 4,000,000.
Final cash is KRW 11,630,000; without any support it is KRW 7,630,000.
B: close on 2027-01-01
The additional operating period is 122 days, costing KRW 3,660,000.
Three elapsed periods reduce remaining-goods VAT to KRW 500,000.
The 2027 support policy is unverified, so automatic support is zero.
Final cash is KRW 5,340,000, which is KRW 6,290,000 below A.
If A also receives no support, the difference falls to KRW 2,290,000.
Looking only at the KRW 500,000 VAT saving would miss the additional carrying cost and the unsupported future-policy assumption.
Conversely, continuing to trade could change the ranking if cash receipts are sufficient or waiting until lease expiry removes a substantial penalty.
Use contract terms and conservative operating estimates rather than changing inputs simply to produce a preferred result.
Frequently asked questions
Does support arrive before demolition?
For planned demolition, the notice describes application and eligibility review, demolition and closure, settlement evidence review, and then payment.
Already-demolished cases submit application and settlement evidence together.
The tool cannot guarantee a payment date; prepare upfront funding.
Does closing at year-end remove income tax?
No.
Income already earned remains attributable to its original tax year.
Continuing into a new year can create an additional filing year.
Enter a tax reserve covering the entire comparison and any unpaid earlier liabilities.
How should deductions from the deposit be entered?
Enter the deposit actually expected back after deductions.
Do not enter the same deducted restoration cost again as an additional payment.
Separate payments you make directly to the contractor from amounts retained by the landlord.
What if I do not have a demolition quote?
The default example is not a market price.
Grant amounts are limited by accepted cost and area.
Obtain an itemized quote, use the linked restoration calculator if helpful, and then update both closure scenarios.
Why is funding needed when final cash is positive?
Demolition and tax can be paid before the deposit or support arrives.
The largest shortfall measures that timing gap.
Delaying a receipt can increase the funding need even when the final cash total does not change.
Can I assume a larger grant next year?
Unverified future caps are not applied automatically.
Compare cash excluding support and additional carrying cost first, then recheck eligibility, caps, application dates and settlement deadlines when the new notice is published.
A notice alone does not guarantee selection or payment.
Official sources and update boundaries
The official notice and current National Law Information OPEN API articles were checked on 2026-09-05.
The Value-Added Tax Act version takes effect on 2026-01-02; the decree search lists 2026-04-01, while Article 66 has a 2026-02-27 article effective date.
The Income Tax Act search lists 2026-07-01, while Articles 5 and 70 have a 2026-01-01 article effective date.
Article 12 of the Act on the Protection of and Support for Micro Enterprises was checked in the version effective 2026-07-01.
Recheck notice revisions, availability, evidence deadlines, allowance requirements and individual after-tax benefits before relying on the plan.
Save the comparison and confirm the actual schedule
Export final cash, the no-support outcome and peak funding need together with the assumptions.
Ask your tax adviser to check asset evidence and annual tax reserves, your landlord to confirm the deposit return date and restoration scope, and SEMAS to confirm support conditions and settlement documents.
These checks turn a numerical comparison into an actionable closure plan.