S.Korea Offers Extensive Tax Exemptions for R&D

July 29, 2016 Taxation in South Korea

SEOUL – Companies involved in robotics, artificial intelligence, 3D printing, and other high-tech areas will be eligible for extra tax breaks in South Korea.

On July 28th the government of Korea announced that it would implement several new tax measures in an aim to create several new “economic growth engines”.

The new tax regulations to be enacted by the government will allow small- and medium-sized businesses to claim up to 30 percent of their research and development expenses for tax purposes, if the expenses fall within the scope of 11 selected development sectors.

The chosen areas are all high-tech and potentially high-growth, such as artificial intelligence, 3D printing, hyper-plastics, robotics, and aerospace.

The 30 percent deductions are not open to large conglomerate organizations, which will be granted a tax deduction of only 20 percent of their spending.

The government also stated that new tax measures will be enacted to grant tax relief to businesses which investment in new facilities, raise employee wages, or pay dividends to shareholders.

In unison the tax measures are aimed at helping increase growth among smaller businesses and among high-tech businesses, while also benefiting investors, researchers, employees, and, ultimately, the national economy.

Photo By: Ministerio TIC Colombia