S. Korea's latest tax rule revision to provide US$ 1.3 bil. of tax relief
Updated: 2021-07-26 17:03:08 KST
Some 1.3 billion U.S. dollars of tax relief for businesses, ordinary consumers and investors.
That's the crux of South Korea's latest round of tax revisions announced on Monday, aimed at reviving the pandemic-hit economy and helping the country prepare for the post-pandemic era.
"This year's revision to the tax rules focuses on overcoming the risks posed by the COVID-19 pandemic, supporting the transition into a leading economy, as well as making society more financially inclusive."
Some 9-hundred-50 million dollars of tax credits will go toward R&D and facility investment.
That is to strengthen competitiveness in next generation technology and stabilize supply chains.
There were two tracks of tax credits for these categories: the general track and the new growth and original technology track.
The revision adds one more track called national strategic technologies, to boost the development of semiconductors, secondary batteries and vaccines.
Firms in this new category can get tax credits of up to 50% on R&D spending, and up to 16% on facility investment.
Small and medium-sized businesses who lost money this year can get money back on some of their income and corporation taxes for this year, based on the amount of tax they have paid over the past two years.
To boost consumption and help small businesses, tax relief for credit card spending has been expanded.
People who exceed their previous year's credit card spending by more than 5% can get tax relief worth 10% of that additional spending.
There are more incentives for firms that hire female employees with disrupted careers.
The length of the disrupted period has been reduced from three years to two years, and companies that hire them can get a tax deduction of up to 30 percent of the payroll cost for two years.
Helping the lowest income brackets is also part of the plan.
The annual income threshold for financial support has been raised by 2 million Korean won or around 1,700 U.S. dollars adding some 300-thousand more households to the list of beneficiaries.
The government said it's going to send the bill to the Assembly by September 3rd.
Kim Sung-min, Arirang News