On the 30th, the Tax Special Cases Act Amendment Bill for Fostering the Domestic Semiconductor Industry Passed at the Plenary Session
Tax Benefits for Large and Mid-sized Companies Increased from 8% to 15%
The National Assembly passed the 'K-Chips Act' (Partial Amendment to the Restriction of Special Taxation Act) to foster the semiconductor industry. The purpose is to encourage companies to make prompt investment decisions and boost investment sentiment. Tax benefits for large and medium-sized enterprises will increase from the current 8% to 15%, and for small and medium-sized enterprises from 16% to 25%.
On the 30th, the partial amendment to the Restriction of Special Taxation Act was passed at the plenary session of the National Assembly. The amendment includes expanding tax credits for national strategic technologies, including semiconductors, and providing additional support for investments made by companies this year.
Following the passage of the amendment, companies will receive up to a 35% tax credit benefit by applying a basic investment credit of 25% on the amount invested this year and a temporary investment tax credit of 10% on the increased investment amount (compared to the average of the previous three years).
The temporary investment tax credit, reintroduced after 12 years, will be applied temporarily in 2023. It is significant in that it raises the tax credit rate for investments in general new growth and original technologies that are not national strategic technologies (for small and medium-sized enterprises in new growth and original technologies, the basic credit increases from 12% to 18%) and grants an additional 10% tax credit on the increased amount compared to the average of the past three years, which is 2-3 times higher than the current rates (3%, 4%).
In addition to the temporary investment tax credit, the amendment includes a substantial increase in the tax credit rate for national strategic technologies such as semiconductors, and adds hydrogen and future mobility to the display sector newly included this year in the national strategic technology field. Amid the global competition for dominance in the semiconductor industry, where governments worldwide are announcing support measures one after another, our government has also enabled tax support by granting a 25% tax credit benefit for semiconductor investments.
On the 30th, at the 2nd plenary session of the 404th National Assembly (extraordinary session) held at the National Assembly in Yeouido, Seoul, the motion for arrest consent for National Assembly member Ha Young-je was passed. Photo by Kim Hyun-min kimhyun81@
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
