2/29/2012

Korea's Temporary Investment Tax Credit Expired at End of 2011: R&D, Investment & FDI Credits Still Available

The Temporary Investment Tax Credit has expired and other tax liberalization plans have been scrapped  because of a reduction in tax receipts by the government and political issues that have arisen because of the the upcoming elections in Korea.  Please see the list of article below.

We suspect, if the conservative Saenari Party controls the National Assembly and the Presidency, after the upcoming elections, the previously promised tax reduction measures will be re-passed by the Korean National Assembly within the next couple of years.

Korea has decided to main the Tax Credit for Investment in Facilities and Industrial Equipment.  The credit equals between 3% to 4% of the amount of the investment in industrial equipment and facilities.  An additional 2% to 3% credit is available based on the number of new jobs created by the investment.

Additionally, Korea expanded the industries available for investment in free trade zones (only available for foreign capital-investment companies) and the scope of activities available for research and development credits.

Recent posts on Korean Tax Law:
IPG will be updating the readers of The Korean Law Blog, The Asian Law Blog and The China Law & Business Blog on updates to China, Bangladesh, Cambodia, Korea the Philippines, Vietnam tax law over the next couple of weeks on IPG's blogs.
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SeanHayes@ipglegal.com