On 16 June 2022, South Korea’s Government proposed to lower the corporate income tax (CIT) rate from 25% to 22% to stimulate corporate investment through the new economic policy direction. The carry forward loss system is also revised. In order to reduce the burden of losses on companies due to the Covid-19 pandemic, the limit on the deduction of losses carried forward is raised from 60% to 80% of the taxable income of companies.
Tax incentives are added for investment in national strategic technology. Government proposes to increase incentives for high-tech investment and job creation such as national strategic technology. The proposed national strategic technology tax credit rate is 8%-12% for large/medium-size enterprises and 16%-20% for small-size enterprises. The Government also proposes to expand tax support for national strategic technology and new growth and source technology for semiconductor and OLED technology as well.
