Gyeongnam Province Grants 100% Acquisition Tax Exemption for Foreign-Invested Companies for 15 Years

Research and Development Special Zone Resident Companies, Tax Relief Extended Until December 31, 2025

Gyeongnam Provincial Government. / Photo by Se-ryeong Lee ryeong@

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Seryeong] Gyeongsangnam-do Province plans to significantly increase tax benefits for companies to promote investment attraction.

On the 27th, Gyeongnam Province announced that it will strengthen tax support to revitalize corporate investment attraction, a key task of the 8th term provincial administration.

First, the acquisition tax on real estate acquired for direct use in businesses reported by foreign-invested companies will be exempted from 85% to 100% for 15 years.

The province explained that until now, in cases where acquisition tax was 100% exempted, a minimum payment tax system applying an 85% exemption was applied, granting an 85% exemption for 15 years from the business commencement date.

It was explained that once the revised ordinance is implemented, the acquisition tax exemption rate, which had been applied differently by Gyeongnam Province and Busan City to foreign-invested companies within the Busan-Jinhae Free Economic Zone, will be uniformly applied as a 100% exemption.

A provincial official anticipated that this will resolve unreasonable issues among investment companies and create a better investment environment.

The province also plans to extend the acquisition tax exemption period by 3 years for companies residing within the Research and Development Special Zone.

The acquisition tax exemption period for real estate acquired by advanced technology companies in the province for direct use in their core business within the Small and Medium Research and Development Special Zone, which was set to end on December 31, 2022, will be extended until December 31, 2025.

According to the province, the Small and Medium Research and Development Special Zone is a system designated to foster advanced technology companies and research institute companies by supporting research capabilities and technology commercialization, and it is designated within three cities/counties in Gyeongnam Province: Changwon City, Jinju City, and Gimhae City.

Since being designated as a Small and Medium Research and Development Special Zone in 2019, 74 technology startups and 56 research institute companies have been established within the zone, promoting the commercialization of public technologies from regional innovation institutions and fostering technology startups.

Gyeongnam Province announced the partial amendment of the Gyeongnam Province Tax Reduction Ordinance, focusing on these contents, on September 22, and plans to submit the partial amendment ordinance to the provincial council in November after review by the Local Tax Deliberation Committee and the Ordinance and Rules Deliberation Committee in October.

Additionally, in Gyeongnam, companies residing within industrial complexes receive an additional 25% exemption by ordinance, operating the maximum 75% exemption allowed by law.

Companies within tourism complexes receive a 50% exemption, and companies relocating within agricultural and industrial complexes receive a 75% exemption, respectively.

Shim Sangcheol, head of the Taxation Division, said, “We will reduce the burden on investment companies through proactive and differentiated tax support to promote corporate investment attraction and strengthen our province’s competitiveness in attracting investment.”