Tax breaks for agricultural corporations made permanent, fuel tax exemption extended to 2029

Tax benefits for agricultural corporations, including corporate tax reductions, will be made permanent with no expiration date, and the tax-exempt fuel support program for agricultural use will be extended three years through the end of 2029.

The Ministry of Agriculture, Food and Rural Affairs announced Sunday that the government's 2026 tax reform plan includes making special tax treatment for agricultural corporations permanent and extending the agricultural fuel tax exemption by three years.

Corporate tax reductions for agricultural corporations and dividend income tax cuts for their investors and cooperative members — both set to expire at the end of this year — will be converted into permanent special tax provisions. Growers of staple food crops will continue to receive full tax benefits, while those cultivating non-staple crops will remain eligible within set limits.

The ministry said it expects the measures to support stable growth and job creation in the agricultural corporate sector and to encourage more young people to enter farming.

A special rollover provision on capital gains tax — applied when farmers contribute farmland to an agricultural corporation as an in-kind investment — will also be made permanent. Under the arrangement, farmers do not pay capital gains tax at the time of contribution; instead, the tax is paid as corporate tax when the corporation later disposes of the land, reducing the financial burden of joining cooperative farming operations.

The tax-exempt fuel support program will also continue. Exemptions from indirect taxes on petroleum products used in agriculture — including value-added tax, individual consumption tax, transportation and energy and environment tax, education tax, and automobile tax — were set to expire at the end of this year but will now run through Dec. 31, 2029.

The ministry said the extension will help reduce operating costs for farm households at a time when global oil prices have grown increasingly volatile amid ongoing instability in the Middle East.

The tax reform plan will be open for public comment through Aug. 20 before being submitted to the National Assembly in September, with a final vote by the full Assembly expected in December.

adastra@heraldcorp.com