"Companies to Receive Tax Reductions When Operating eSports Teams" Proposed by Assemblyman Sangheon Lee

Lee Sang-heon, Democratic Party of Korea lawmaker [Photo by Yonhap News]

[Asia Economy Reporter Buaeri] A bill has been introduced to provide tax benefits such as tax reductions for supporting domestic e-sports disciplines.

On the 4th, Lee Sang-heon, a member of the National Assembly's Culture, Sports and Tourism Committee from the Democratic Party of Korea, jointly proposed a total of nine amendment bills, including the Basic Act on the Promotion of Cultural Industries, the Corporate Tax Act, the E-sports Promotion Act, and the Restriction of Special Taxation Act, aimed at promoting the overall content industry such as e-sports and games.

The nine amendment bills include provisions to reflect the characteristics of the content industry in the current manufacturing-centered regulations and to expand overall support.

The amendment to the E-sports Promotion Act allows the state and local governments to take necessary measures such as tax reductions to diversify domestic e-sports disciplines.

The amendment to the Restriction of Special Taxation Act provides that when a company establishes and operates an e-sports team, 10% of the costs can be deducted from corporate tax.

Rep. Lee said, "Currently, most domestic teams are struggling with management due to low profits," adding, "This is directly related to player treatment issues and needs to be urgently resolved."

The amendment to the Basic Act on the Promotion of Cultural Industries removes facility standards for corporate-affiliated research institutes to be recognized as creative research institutes eligible for various tax benefits, and relaxes criteria to allow external creative personnel to be registered as research personnel of creative research institutes.

Another amendment to the Restriction of Special Taxation Act expands the scope of research and development to all activities prior to commercialization and introduces the concept of ‘cultural content’ encompassing games, dramas, movies, and other content, granting tax credit benefits for related production planning investments. It expands the production cost tax credit benefits previously applied only to video content to cultural content and includes provisions to exempt value-added tax on cultural content.

Rep. Lee also proposed an amendment to the Restriction of Special Taxation Act that provides income tax deduction benefits when individual investors invest in cultural industry specialized companies. General individuals investing in cultural industry specialized companies of content firms through crowdfunding, etc., will receive income tax deduction benefits.

Rep. Lee emphasized, "The content industry, regardless of the field, has aspects of high risk and high return," and added, "To ensure excellent content continues to emerge steadily, the overall content industry must be able to reduce these burdens."

This content was produced with the assistance of AI translation services.