K-Chips Act Passes

The semiconductor industry and business community welcome the so-called K-Chips Act, which was passed by the National Assembly plenary session on March 30.

According to the amendment to the Act on Restriction of Special Taxation, the tax deduction rate for capital investment in national strategic industries such as semiconductors, secondary batteries, vaccines, and displays has been raised from the current 8 percent to 15 percent for large and medium-sized companies and from 16 percent to 25 percent for those smaller.

In addition, an additional 10 percent deduction will be provided this year for increases in investment from the preceding three-year average. This will increase the credit to 25 percent for large companies and 35 percent for smaller companies.

The amendment will be promulgated in early April. The government is planning to select additional national strategic technologies and commercialization facilities eligible for the tax credit and prepare subsequent rules and regulations.