Industry "Welcomes" Expansion of Tax Credit for Video Content Production Costs

The industry has expressed a warm welcome following the government's announcement to significantly increase the tax credit rate for video content production costs in the second half of the year.

On the 4th, the Korea Drama Production Association, Korea Broadcasting Video Production Association, Korea Broadcasting Channel Promotion Association, Korea Broadcasting Association, Korea Animation Industry Association, and Korea Film Producers Association stated, "We sincerely welcome the decision to significantly expand the tax credit level for video content production costs to the level of tax credits for investment in national strategic technologies, as announced jointly by the relevant ministries in the ‘2023 Second Half Economic Policy Direction.’"

[Image source=Pixabay]

The government plans to increase tax credit benefits for the content production sector to the same extent as for national strategic technologies. When investing in national strategic technologies, small and medium-sized enterprises receive up to a 25% tax benefit, while large and medium-sized enterprises receive 15%. Currently, the tax credit rates for video content production costs are 10% for small and medium-sized enterprises, 7% for medium-sized enterprises, and 3% for large enterprises. This change will significantly raise the tax credit rate to levels comparable to those in California, USA, or France, where rates range from 20% to 30%.

The industry commented, "With the changing media environment intensifying competition with global content providers and the advertising market growth stagnating, the domestic video content industry is facing challenges. This decision to raise the tax credit level is expected to greatly contribute to strengthening the global competitiveness of Korea's content industry." They added, "Starting with this decision, we hope the tax credit for video content production costs will be significantly expanded to 25%, the level of tax credits for investment in national strategic technologies, thereby establishing a foundation for the content industry, a core of the service sector, to become a national strategic industry."

They also requested, "We ask for the National Assembly's active cooperation until the passage of the amendment to the Restriction of Special Taxation Act to significantly expand the tax credit rate for video content production costs." They concluded, "Major organizations producing and presenting content loved by people worldwide, along with members of the content industry, will take this decision as an opportunity for further development of Korea's content industry and will strive for the growth of the content industry."

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