Tax Incentives to be Increased in Semiconductor, EV Battery and Vaccine Industries

The South Korean government has decided to increase tax incentives for large corporations investing in the semiconductor, EV battery and vaccine industries. It decided not to do so in the display industry, although it was said that the technology should be classified as a national strategic technology.

According to the government, the tax deduction rate applied to large corporations investing in facilities related to the three national strategic technologies will be raised by two percentage points. At present, the maximum deduction rates applied to large, medium and small companies are 10 percent, 12 percent and 20 percent, respectively.

At the same time, the government is planning to considerably increase the number of national strategic semiconductor technologies from 20. Financial support in the industry will be increased from two trillion won so that more investment can be made.

The new tax incentives are not applied to display technology investment. Instead, the government decided to classify OLED as a key source technology for new growth so that a maximum tax deduction rate of 6 percent is applied in the case of large corporations.