After Receiving Tax Reductions for Company-Affiliated Research Institutes, Violations Detected... Gyeonggi Province Recovers 2.2 Billion Won

From May to July 2025, the Gyeonggi Provincial Government, in cooperation with city and county governments, conducted a special investigation into the tax reduction status of company-affiliated research institutes. As a result, the province collected an additional 2.2 billion won in acquisition and other taxes from 65 institutes that failed to meet the reduction requirements.

Under current law, a company-affiliated research institute must be officially recognized under the Act on the Promotion of Basic Research and Support for Technology Development within one year after acquiring land or buildings to qualify for tax reduction benefits. Furthermore, the institute must not be closed or used for other purposes for four years after recognition. However, the investigation uncovered numerous cases of non-recognition within the deadline, reduction of actual research space, and cancellation of recognition within the four-year period.

For example, Corporation A acquired land in Yongin for the purpose of operating a company-affiliated research institute and received tax reduction benefits, but failed to obtain official recognition within one year. As a result, an additional 83 million won in acquisition tax was collected.

Gyeonggi Provincial Government

Corporation B purchased a building in Seongnam and received a tax reduction, but on-site inspection revealed that the research institute's area was smaller than the recognized standard. Gyeonggi Provincial Government applied a higher tax rate to the reduced area and collected an additional 677 million won. In another case, Corporation C, located in Anyang, had its recognition as a company-affiliated research institute revoked before the four-year period expired, resulting in an additional tax collection of 71 million won.

No Seungho, Director of the Tax Justice Division of Gyeonggi Provincial Government, stated, "We will continue to conduct joint special investigations with city and county governments into areas suspected of local tax omission or evasion in order to establish a fair tax law order."

As of the end of last year, there were 26,985 company-affiliated research institutes in the province, among which 963 institutes received a total of 29.8 billion won in acquisition tax reductions over the past five years.