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The Korea Herald
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THE INVESTOR
March 28, 2024

Economy

Gov’t unveils tax code revision plan

  • PUBLISHED :December 27, 2016 - 15:06
  • UPDATED :December 27, 2016 - 15:06
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[THE INVESTOR] South Korea on Dec. 27 unveiled the follow-up to the tax code revision plan announced in July, focusing on bolstering corporate investments in new future industries and promoting fair taxation.

The Finance Ministry said tax credits of up to 30 percent will be given to companies that make research and development investments in 11 selected new industries, such as smart cars, biomedical technologies and renewable energy.

The government will also offer a 10 percent tax credit for facility investment into those areas, while movie and TV drama producers will get a 10 percent tax credit on production costs.

Taxation on financial income will be tightened as those who have a stake of 1 percent or worth 1.5 billion won in a listed firm will be subject to a transfer gain tax, down from the current 2.5 billion won. The ceiling will be lowered to 1 billion won in 2020.

Starting from 2017, the transfer income tax will be also imposed on gains from the equity linked warrant, a derivative that gives holders the right to buy or sell at an earlier-set price and date.

Added-value taxes imposed on purchases by mileage points will be removed, while foreigners will get a refund of up to 5 million won, up from the current 2 million won, when they buy goods at tax refund shops.

The tax authorities will also reduce a tax write-off on company cars and business-related entertainment expenses given to family-run real estate agencies as they have been under fire for abusing the rule and using the company assets for personal purposes.

In order to promote fair competition, the government will put duty-free shop operators, which enjoy a market-dominating position, at a disadvantage when the authorities review their licenses every five years.

(theinvestor@heraldcorp.com)

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