{"id":2200580,"date":"2023-03-31T08:00:31","date_gmt":"2023-03-30T23:00:31","guid":{"rendered":"https:\/\/koreapro.org\/?p=2200580"},"modified":"2023-04-05T16:07:47","modified_gmt":"2023-04-05T07:07:47","slug":"south-korean-legislature-passes-bill-to-expand-tax-incentives-for-chipmakers","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/03\/south-korean-legislature-passes-bill-to-expand-tax-incentives-for-chipmakers\/","title":{"rendered":"South Korean legislature passes bill to expand tax incentives for chipmakers"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The National Assembly passed an amendment to the Act on Restriction of Special Taxation on March 30 to expand tax deduction rates for businesses that invest in \u201cnational strategic\u201d industries. Industries that the law covers include semiconductors, batteries, vaccines, displays, electric vehicles and self-driving cars. Large businesses will see their tax credits increase from 8% to 15%, while small and medium enterprises will see credits increase from 16% to 25%. The law also provides an additional 10% tax deduction for this year only so that those businesses can receive tax benefits ranging from 25 to 35% this year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Popularly called the K-Chips Act, a 25% to 35% tax credit rate for semiconductor manufacturers makes it the world&#8217;s highest. The law will likely come into effect in early April.<\/span><\/p>\n<p><b>Why It Matters<\/b><\/p>\n<p><span style=\"font-weight: 400;\">South Korea depends heavily on chip exports, but exports have been falling for months due to reduced demand in major countries stemming from the global economic slowdown. China\u2019s slower-than-expected economic growth and Russia\u2019s invasion of Ukraine have caused South Korea\u2019s chip exports to slump. The tax credits should be a boon for many semiconductor manufacturers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Classifying chips as one of its \u201cnational strategic\u201d industries speaks to South Korea viewing chips as security assets rather than industrial commodities. Main opposition Democratic Party (DP) lawmakers initially resisted raising tax credits as they feared stoking negative public sentiment by offering benefits to corporations. However, the U.S. Chips Act and the EU\u2019s Critical Raw Materials Act compelled South Korean lawmakers to pass the K-Chips Act to prevent an exodus of high-tech companies and skilled workers.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><a href=\"https:\/\/koreapro.org\/tag\/domestic-politics\/\"><span class=\"tag\">Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>The National Assembly passed an amendment to the Act on Restriction of Special Taxation on March 30 to expand tax deduction rates for businesses that invest in \u201cnational strategic\u201d industries. Industries that the law covers include semiconductors, batteries, vaccines, displays, electric vehicles and self-driving cars. Large businesses will see their tax credits increase from 8% [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2200581,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24,27],"class_list":["post-2200580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy","tag-domestic-politics"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>South Korean legislature passes bill to expand tax incentives for chipmakers - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2023\/03\/south-korean-legislature-passes-bill-to-expand-tax-incentives-for-chipmakers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korean legislature passes bill to expand tax incentives for chipmakers - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"The National Assembly passed an amendment to the Act on Restriction of Special Taxation on March 30 to expand tax deduction rates for businesses that invest in \u201cnational strategic\u201d industries. 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