The South Korean Ministry of Strategy and Finance has added 16 areas to its research and development tax credit initiative – including blockchain technologies.
According to TheNews.Asia, the proposed amendments to the enforcement decree of the 2018 tax law are scheduled to become effective in February. The country offers R&D tax break through a hybrid R&D tax credit and volume-based investment credit.
The official document highlights 16 fields, which include fine dust reduction technology, blockchain, and wearable robots that will be added to the existing tax credit for R&D in new growth industries. This gives a 30-40% tax waiver to small enterprises in R&D expenses and 20-30% tax relaxation to large and medium-sized enterprises. Presently, the R&D tax deduction rate of large corporations is 0-2%, 8-15%, for medium enterprises, 25% for SMEs.
It was in September 2018 that the South Korean government had announced its support for domestic blockchain companies to boost the thriving blockchain industry in the country. Recent reports suggest that the South Korean authorities were considering imposing cryptocurrency tax.
The South Korean government had also announced that it would invest one trillion won (£693m) into innovative technologies including blockchain and AI by 2019. This initiative is a part of the country’s five-trillion-won (£3.46bn) ‘Growth Innovation Plan’ that covers a strategy to fund eight pilot projects, the development of a “platform economy” and a hydrogen fuel supply chain. Experimenting further, South Korea has also carried out a blockchain technology pilot to track the entire beef supply chain in the country.
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