Gyeonggi Province has decided to reduce acquisition tax by up to the legal maximum of 75% for companies that start a business or newly expand factories within Opportunity Development Zones in the province to attract the government-led ‘Opportunity Development Zones’.
On the 29th, Gyeonggi Province announced that the ‘Partial Amendment Ordinance on Gyeonggi Province Tax Reduction Ordinance,’ which includes this content, was approved at the 374th extraordinary session of the Gyeonggi Provincial Council on the 26th.
The Local Tax Special Cases Restriction Act stipulates that acquisition tax of 75% (including 25% by ordinance) shall be reduced for business real estate acquired by companies when starting a business or newly expanding within Opportunity Development Zones.
Opportunity Development Zones are areas designated as a major national agenda of the current government to attract large-scale investment and population movement through tax reductions, regulatory exceptions, and other measures. They are designated by the Minister of Trade, Industry and Energy after review and resolution by the Local Era Committee upon application by city or provincial governors.
Areas eligible to be designated as Opportunity Development Zones within the metropolitan area are population-decreasing areas or border areas under the ‘Special Act on Support for Border Areas.’ Designatable areas within the province include Gimpo, Goyang, Paju, Yangju, Pocheon, Dongducheon, Yeoncheon, and Gapyeong.
Once designated as an Opportunity Development Zone, there are tax benefits such as reductions in gift tax, capital gains tax, acquisition tax, property tax, and income tax for entrepreneurs, as well as relaxed requirements for business succession. In addition, except for the safety of the public, labor and environmental protection, and safe handling of personal information, there are regulatory exception benefits necessary for corporate investment attraction and business activities, providing a groundbreaking opportunity for regional development through corporate attraction.
The Ministry of Trade, Industry and Energy has been accepting applications for Opportunity Development Zones targeting non-metropolitan areas since last month. For the metropolitan area, applications are to be submitted after the Local Era Committee sets limits on regions and area sizes.
Accordingly, Gyeonggi Province plans to apply according to the Ministry’s guidelines through research projects for applications and practical meetings with city and county officials. Since November last year, Gyeonggi Province has started a basic plan research project for Opportunity Development Zones and is collecting opinions from eight cities and counties wishing to be designated as Opportunity Development Zones.
Yoon Sung-jin, Director of the Balanced Development Planning Office of Gyeonggi Province, said, "We will do our best to ensure that some northern parts of Gyeonggi, which have been designated as Opportunity Development Zones due to their underdeveloped realities such as financial independence and infrastructure, are designated practically and without discrimination from non-metropolitan areas, in line with the original intent."
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