National incentives

摘要

In line with the OECD's Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (which South Korea signed in 2017), the tax reform for 2019 abolished most incentives available to foreign direct investment. These include a 100 exemption from income tax for the first five years and a 50 reduction in such taxes for the following two years for foreign-invested companies engaged in qualified high-tech businesses, as well as foreign investors in specially designated areas (foreign-investment zones, free economic zones, free-trade zones and strategic industrial complexes exclusively developed for foreign-invested companies). However, under the Foreign Investment Promotion Act (FIPA) of 1998, qualifying foreign investors (those investing in technologies for new "growth engine" industries, and in the specially designated areas) continue to enjoy the following: 1. Local taxes (property acquisition and registration tax). The FIPA waives these for the first five years that a company is in operation and reduces them by 50 for the next two years. Local governments offer more generous packages, including longer tax exemptions and discounts. Many municipalities and provinces waive local taxes for 10-15 years if recipient companies meet FIPA requirements.