Facility Investment Tax Credit Raised from 15% to 20% for Large and Medium-Sized Enterprises
Increased from 25% to 30% for Small and Medium-Sized Enterprises
R&D Tax Credit Period for New Growth, Source, and National Strategic Technologies Extended by 5 Years
Semiconductor R&D Tax Credit Extended by 7 Years
The K-Chips Act, which provides tax benefits when semiconductor companies make facility investments, passed the National Assembly's Strategy and Finance Committee on the 18th.
The Strategy and Finance Committee held a plenary meeting that day and reviewed and approved an amendment to the Restriction of Special Taxation Act that includes raising the integrated investment tax credit rate for semiconductor companies by 5 percentage points from the current rate.
If the amendment to the Restriction of Special Taxation Act passes the plenary session of the National Assembly, the tax credit rate for facility investments by semiconductor companies will increase by 5 percentage points, from 15% to 20% for large and medium-sized enterprises, and from 25% to 30% for small and medium-sized enterprises.
The bill to extend the application period of the R&D tax credit for new growth and source technologies and national strategic technologies by five years until the end of 2029, and to extend the semiconductor R&D tax credit by seven years until the end of 2031, also passed the plenary meeting of the Strategy and Finance Committee. The bill to extend the application period of the integrated investment tax credit for national strategic technology commercialization facilities by five years until the end of 2029 was also approved.
On the 17th, Song Eon-seok, the chairman of the Planning and Finance Committee, is striking the gavel at the plenary session held at the National Assembly. Photo by Kim Hyun-min
The bill that includes facility investments for R&D equipment in the integrated investment tax credit targets for national strategic technologies and new growth and source technologies, and adds artificial intelligence (AI) and future transportation means to national strategic technologies to enable tax benefits, also passed the Strategy and Finance Committee.
The bill to extend the application period of the temporary investment tax credit for medium-sized and small enterprises by two years, allowing tax credits for investments made last year and this year, also passed. The amendment to the Restriction of Special Taxation Act includes tax credits for e-sports tournament operating costs and a temporary reduction of individual consumption tax when replacing old vehicles.
Meanwhile, the amendment to the Comprehensive Real Estate Tax Act, which includes joint ownership by married couples with one house as eligible for deferred payment of the comprehensive real estate tax, also passed the Strategy and Finance Committee that day. The amendment to the Value-Added Tax Act, which expands the submission of data on sales and payment mediation of goods and services supplied by domestic businesses from domestic platforms to non-resident platforms, will be submitted to the plenary session of the National Assembly. The amendment to the Framework Act on National Taxes also established grounds for imposing enforcement fines on companies that fail to comply with the obligation to submit tax investigation data.
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