Ruling Party and Government: "Income Tax and Corporate Tax Relief for Overseas Companies Returning to Korea"

2023 Tax Law Amendment Practical Meeting Held
Ruling Party Proposes Measures to Boost Economic Vitality
Childbirth and Childcare Allowance Income Tax Exemption Limit Raised from 100,000 to 200,000 Won

The People Power Party and the government have agreed to strengthen tax support such as income tax and corporate tax reductions for companies returning to Korea through the '2023 Tax Reform Bill.' Along with this, the ruling party and the government have agreed to produce a tax reform bill to ease household burdens such as housing and living expenses for the middle and lower classes and to reduce the tax burden on small business owners and small and medium-sized enterprises to stabilize the livelihood economy.

According to the People Power Party on the 21st, the ruling party and the government held a working-level consultation on the 2023 Tax Reform Bill on the 19th. Through the consultation, the basic directions of this reform bill were set as ▲Enhancing economic vitality ▲Stabilizing the livelihood economy ▲Preparing for the future.

People Power Party's Park Dae-chul, Chairman of the Policy Committee (right), is talking with Ryu Seong-geol, the secretary of the National Assembly's Strategy and Finance Committee, at the party-government consultation meeting on electricity and gas rates held at the National Assembly in Yeouido, Seoul, on the morning of March 31, 2023. Photo by Yonhap News.

First, the ruling party and the government agreed to expand the income tax and corporate tax reduction benefits for companies returning to Korea from the current '100% for 5 years + 50% for 2 years' to '100% for 7 years + 50% for 3 years.' Park Dae-chul, the chairman of the Policy Committee, explained, "To enable the manufacturing industry, the backbone of our economy, to make a leap forward and create many quality jobs, tax support for companies returning from overseas must be strengthened."

The ruling party also requested the government to drastically strengthen tax support for investment in video content to secure competitiveness in the K-content industry, apply tax benefits from this year to enable the establishment of the first private venture fund, and expand the income tax exemption limit on wages for crew members of distant-water fishing vessels, foreign-going vessels, and overseas construction workers.

To stabilize the livelihood economy, which has become difficult due to high inflation and high interest rates, the ruling party requested the government to include in the tax reform bill measures such as ▲income tax reduction for young workers employed by small and medium-sized enterprises ▲special deduction for agricultural product input tax credit for small individual restaurants ▲special deduction for value-added tax on credit card and other payment amounts for small business owners.

The ruling party also requested the government to reform the tax system in preparation for future social changes such as low birthrate, aging population, and regional extinction. After consultation, the ruling party and the government decided to reflect in the tax reform bill measures such as expanding the income tax exemption limit on workers' childbirth and childcare allowances from the current 100,000 KRW per month to 200,000 KRW per month. Ryu Seong-geol, the ruling party's secretary of the Planning and Finance Committee, stated, "We urged to reduce the tax burden on marriage, childbirth, and childcare costs for young and middle-aged people related to low birthrate and to ease the tax burden on the receipt amount of retirement pensions subscribed for stable old-age preparation related to aging."

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