[2023 Tax Reform] Driving Regional Balanced Development... Tax Support Backing Opportunity Development Zones

Tax Benefits for Companies Relocating, Operating, and Investing in Opportunity Development Zones

Domestic Population Declining Areas

Tax benefits to promote balanced regional development will also be strengthened. Tax incentives will be provided for companies relocating to local areas under the ‘Opportunity Development Zones,’ and the tax reduction period for regional special zones will be extended.

According to the government’s ‘Tax Law Amendment Bill’ on the 27th, a tax support plan for Opportunity Development Zones will be newly established under the Restriction of Special Taxation Act (RSTA). First, tax benefits will be granted to relocating companies to alleviate their tax burden when moving into Opportunity Development Zones. It is expected that reductions in real estate acquisition tax and capital gains tax will be provided.

For companies operating workplaces within the special zones, income tax or corporate tax reductions will be implemented to support business operations within the zones. To promote private investment in the zones, the Opportunity Development Zone Fund to be established will have tax support measures for interest and dividend income. The Opportunity Development Zone Fund is a fund that invests a certain percentage of its assets in companies located in the zones and infrastructure. However, specific support measures will be announced separately.

The tax reduction period for regional special zones will also be extended by two years. Companies starting businesses within regional special zones such as research and development zones and advanced medical complex districts currently receive income and corporate tax reductions, and this will be extended until the end of 2025.

To respond to the risk of disappearance in farming and fishing villages, the validity period of the special rural tax will be extended by 10 years. The special rural tax is revenue that can only be used for the specific purpose of enhancing the competitiveness of farming and fishing villages. The government has decided to extend the validity period of the special tax until June 30, 2034, to secure funding for projects to strengthen agricultural and fishery competitiveness.

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