Ahn Dogeol: "10% Tax Credit for Advanced Technology Product Production Costs"

Proposed Amendment to the Restriction of Special Taxation Act
Promoting Domestic Production, Sales, and Consumption of Strategic Industries
Expanding Attraction of High-Tech Industries and Job Creation in Local Regions

Ando Geol, Member of the National Assembly.

Democratic Party lawmaker Ahn Dogeol (Gwangju Dongnam-eul) announced on the 26th that he has submitted a bill to amend the Restriction of Special Taxation Act, aimed at promoting domestic production and consumption of national strategic industries and supporting the attraction of strategic industries to non-capital regions.

The current law grants a certain amount of tax credits only for facility investments aimed at commercializing national strategic technologies. However, as major countries such as the United States and Europe are significantly strengthening tax incentives to attract advanced manufacturing facilities to their own countries, there have been criticisms that tax support for domestic production activities themselves is insufficient.

The main point of the amendment is to allow tax credits of up to 10% of production costs for products produced and sold domestically using advanced technologies. This reflects a policy shift from simply supporting facility investment to providing incentives for actual production activities, thereby encouraging the reshoring of advanced manufacturing companies and the upgrading of the industrial structure.

Notably, the amendment allows refunds for the amount of tax credits not received for advanced technology products produced outside the overpopulated capital region. This is evaluated as a structural incentive to alleviate the concentration of industries in the capital area and enhance the effectiveness of local strategic industrial complexes.

If the amendment passes, it is expected to accelerate the reshoring and regional relocation of domestic high-tech industries. In particular, it is anticipated to provide substantial support for stabilizing domestic supply chains in national strategic technology sectors such as batteries, semiconductors, and bio industries.

Lawmaker Ahn emphasized, "Major countries are competitively strengthening tax support for domestic production, as seen in the United States' Inflation Reduction Act (IRA) and the EU's Chips Act," and added, "We also need a transformative approach that goes beyond investment tax credits to provide incentives directly at production sites where actual manufacturing takes place."

Ahn also stated, "Strengthening the domestic production base for advanced technologies is not just about fostering industries, but is a key pillar for supply chain stability directly linked to security and the overall economy," and added, "We will strategically utilize tax policy to actively support the reshoring of companies and investment in local regions."

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