Ahn Dogeol: "Expansion of Investment Tax Credits for Crisis Areas"

Proposed Amendment to Expand Tax Credits
for Investments in Crisis Regions

Ando Geol, Member of the National Assembly.

Democratic Party lawmaker Ahn Dogeol (Gwangju Dongnam-eul) announced on the 17th that he has proposed a revision to the Restriction of Special Taxation Act to expand the 'Tax Credit for Investment in Crisis Regions.'

The proposed amendment includes industrial crisis response regions as crisis regions and significantly increases the tax credit rates for companies investing in these areas.

The main points are, first, the inclusion of industrial crisis response regions as crisis regions, thereby expanding the scope of support. In addition, the tax credit rates for corporate investments in crisis regions have been greatly increased.

For investments in facilities for commercialization of new growth and original technologies, the tax credit rate for small and medium-sized enterprises (SMEs) is raised from the current 12% to 18%, and for medium-sized enterprises from 6% to 10%. For other asset investments, the rate for SMEs is increased from 10% to 12%, and for medium-sized enterprises from 5% to 7%.

Large enterprises in crisis regions will also see their tax credit rate for investments in facilities for commercialization of new growth and original technologies increased from 3% to 6%, and for other asset investments from 1% to 3%.

Ahn stated, "The Korean economy is facing a structural crisis, and traditional key industries such as the petrochemical sector are facing serious challenges," adding, "Policy support to promote corporate investment and strengthen competitiveness is urgently needed at this time," explaining the purpose of the proposed amendment.

Ahn also emphasized, "The current system has limitations in responding to the structural crisis of key industries that require large-scale investment and in promoting corporate facility investment," and added, "Through this amendment, we aim to promote corporate investment, revitalize the economy, respond to the structural crisis of key industries, and provide an opportunity for Korea to take a leap forward as an industrial powerhouse."

Meanwhile, the proposed amendment will take effect three months after its promulgation and will be applied from the tax year that includes the effective date.

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