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Gov`t to offer 30% tax credits to R&D in new growth industries

Collected: 2016.04.29

Distributed: 2016.05.02

Source: Go Direct

[Minister of Strategy and Finance Yoo Il-ho]

South Korea will provide a full package of measures to grow new selected industries, including more tax credits for research and development (R&D) investment as well as fund-raising, the government announced during an economy-related ministers` meeting held in Seoul, Wednesday.

The Ministry of Strategy and Finance (MOSF) and other related ministries endorsed the plan that underscores ongoing restructuring efforts in four major sectors (public, labor, finance and education) combined with efforts to sophisticate the country’s industrial structure to a high value-added one, creating more jobs and a new growth momentum going forward.

The latest stimulus package includes the offer of a 30-percent tax credit, the highest rate that the local tax code allows, for R&D investors in new future industries such as Internet of Things, renewable energy, smart car and biotech.

The government will also prompt commercial development in these areas by offering tax credits of up to 10 percent for facility investment.

The plan also includes a measure to create a 1 trillion won ($870.8 million) fund to help attract investments from the private sector into high-risk industry sectors such as drug development and artificial intelligence.

Policy lenders will set up a total of 80 trillion won fund to extend guaranteed loans to firms engaging in information and communication technology convergence and culture content areas.

The ministry said that more details and the scope of beneficiary industries will be determined by the end of June.

By Kim Gyu-sik

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