Tax Credit Raised from 15% to 20% for Large and Medium-Sized Enterprises
From 25% to 30% for Small and Medium-Sized Enterprises
The so-called K-Chips Act (Amendment to the Restriction of Taxation Act), which aims to increase the tax credit for facility investments by semiconductor companies by 5 percentage points, passed the National Assembly plenary session on the 27th.
On the afternoon of the same day, the National Assembly held a plenary session and approved the K-Chips Act with 239 votes in favor, 14 against, and 4 abstentions out of 257 members present.
Once the K-Chips Act is implemented, the tax credit rate for R&D and facility investments by semiconductor companies will increase from 15% to 20% for large and medium-sized enterprises, and from 25% to 30% for small and medium-sized enterprises.
The application period for R&D tax credits for new growth, source technologies, and national strategic technologies will also be extended by 5 years until the end of 2029, and the semiconductor R&D tax credit will be extended by 7 years until the end of 2031.
On the 27th, at the plenary session held in the National Assembly, the bill concerning the appointment of a special prosecutor to investigate illegal election interference and state affairs manipulation related to Myung Tae-gyun was passed. 2025.2.27 Photo by Kim Hyun-min
In addition, the application period for the integrated investment tax credit for national strategic technology commercialization facilities will be extended by 5 years until the end of 2029.
Facility investments such as R&D equipment are included in the integrated investment tax credit targets for national strategic technologies and new growth/source technologies. Artificial intelligence (AI) and future transportation means have also been added to national strategic technologies, making them eligible for tax benefits.
This bill will take effect from the date of its promulgation.
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