Category Taxation in South Korea

South Korea Eyes Robot Tax

August 9, 2017 Taxation in South Korea

Robot taxSEOUL – The government of South Korea could be the first one in the world to implement a “robot tax”.

The government of South Korea is mulling extending a tax break available for businesses investing in automation technology, but reducing the rate of the deduction.

Currently, any business in South Korea which invests in industrial automation technology is eligible to receive a corporate tax deduction of 3 percent to 7 percent, with the exact rate varying based on the scope and size of the business in question.

The policy is currently scheduled to end this year.

However, the government is now mulling the potential implications of extending the program out until the end of 2019, but reducing the rate of the deduction by 2 percent
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Some experts have dubbed the potential move as a “robot t...

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Family Tax Breaks Cause Disparity in S.Korea

November 24, 2016 Taxation in South Korea

Tax breaks for Korean families with childrenSEOUL – Efforts by the government of South Korea to boost the national birthrate through tax breaks have led to a growing divide between the taxes paid by families and single people.

Tax benefits available to couples with children in South Korea have effectively increased the disparity between taxes paid by families and single taxpayers in the country, according to the results of new research released in the journal of the Korea Academic Society of Taxation.

South Korea has several tax breaks available for families with children, with the breaks being cumulative for more than one child.

The tax measures were enacted in order to counter the country’s dwindling birth rate, which currently sits at approximately 1...

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S.Korea trying to Spur Growth of Fintech

October 26, 2016 Taxation in South Korea

Blockchain legislation on South KoreaSEOUL – New legislation in Korea may help the rise of new technology for use in the finance industry.

On October 24th the Chairman of the Financial Services Commission (FSC) of Korea Yim Jong-yong presided over the opening of a new integrated financial technology portal, and announced that the government would soon take greater efforts to develop the national fintech industry.

A significant part of the developments which will be carried out by the government will revolve around new legislative efforts to define the term “digital currency” and to encourage greater implementation of black-chain technology in the innovative fintech industry.

The government hopes that a proper legal definition of “digital currency” will help alleviate the risks that the technology carries in regards to th...

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Tax Evasion Estimated at KRW 55 Trillion Per Year in South Korea

September 20, 2016 Taxation in South Korea

SEOUL – The size of Korea’s underground economy outweighs that similarly sized countries, leading to significant levels of tax evasion.

The results of new research released on September 19th Professor Kim Jong-hee of Chonbuk National University of Korea has shown that the size of the underground economy in South Korea exceeds that of other OECD countries.

It was estimated that on average between 1995 and 2014 the underground economy in South Korea made up 10.89 percent of the national GDP.

In comparison the average size of the underground economy in the other OECD countries was 8.06 percent, while among G7 countries the level was only 6.65 percent.

The prominent underground economy has also resulted in comparatively high levels of tax evasion, with the ratio of tax evasion-to-GDP in South...

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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 organi...

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