Democratic Party's Kim Tae-nyeon: "100 Trillion Won Support for Semiconductors... R&D Tax Credit Up to 50% Increase"

Kim Proposes 'Semiconductor Special Act'
Tax Credit Application Period Extended by 10 Years
Investment and R&D Credit Rates Each Increased by 10%

The Democratic Party of Korea is proposing the 'Semiconductor Special Act,' which provides policy financing worth 100 trillion won to support the semiconductor industry. The act aims to extend the semiconductor industry's tax credit period, which is set to expire this year, by 10 years and increase the credit rate by 10% compared to the current rate.

On the 25th, Representative Kim Tae-nyeon of the Democratic Party plans to lead the proposal of this Semiconductor Special Act. Representative Kim stated, "Since a national-level semiconductor vision blueprint is urgently needed, we will push for the enactment of a special law to foster and support the semiconductor ecosystem and amend the Restriction of Special Taxation Act."

Extending the semiconductor tax credit application period by 10 years, which is set to expire this year, is 4 years longer than the 6-year extension plan recently proposed by the People Power Party. The tax credit rates for investment and R&D (research and development) will also be increased by 10% each. The existing semiconductor tax credit rates provide 15% for large and medium-sized enterprises and 25% for small and medium-sized enterprises. The Democratic Party plans to raise these rates to 25% for large and medium-sized enterprises and 35% for small and medium-sized enterprises. Additionally, the semiconductor R&D tax credit will be increased to 40% for large and medium-sized enterprises and 50% for small and medium-sized enterprises.

Kim Tae-nyeon, Member of the Democratic Party of Korea./Photo by Yoon Dong-ju doso7@

Furthermore, policy financing worth 100 trillion won will be supported through the establishment of a semiconductor fund and a special account. To this end, a 'National Semiconductor Committee' will be established, including ministers from all semiconductor-related ministries, semiconductor companies such as Samsung Electronics and SK Hynix, material, parts, and equipment (SoBuJang) companies, and academia.

Additionally, the plan includes making semiconductor support by the government and local governments mandatory. Special measures similar to those applied to economic free zones will be implemented in semiconductor special zones, including the establishment of basic and execution plans every five years, exemption from preliminary feasibility studies, or priority selection. To ensure stable power supply, the government and local governments will be required to support the installation of renewable energy sources such as solar power. Representative Kim said, "I hope that the ruling party's plan will be put on the table and that serious discussions will take place."