Promotion of Potential Sectors
The South Korean government is planning to provide the best tax incentives for those investing in such fields as intelligent robot, artificial intelligence, smart car and convergence material. This policy is expected to be the focus of its budget plan and deregulation policy for next year, too.
According to the Ministry of Strategy & Finance and the Ministry of Trade, Industry & Energy, the government is currently working on tax incentive packages to this end and is planning to make it public at the economic ministers’ meeting scheduled for April 28. Then, the packages are to be incorporated into its economic policy for the second half of this year and tax law amendment in June and July, respectively.
According to the current Restriction of Special Taxation Act, tax credits for R&D costs, capital expenditures and the like depend on factors like corporate size and the type of investment. The new tax incentives, however, are to maximize the tax credits to 30% for R&D and 10% for capital expenditure regardless of such factors.
The government is going to maximize the tax credits, although this inevitably leads to a decrease in tax revenue, in order to attract more investment in the fields. It is planning to reduce the decrement by concentrating on selected beneficiaries.