On July 26, 2021, the Korean Ministry of Economy and Finance (MOEF) released the government’s tax reform proposals for 2021 (the ‘proposals’). The proposals intend to: i) help drive recovery from the COVID-19 pandemic crisis; ii) increase fiscal support to drive growth of designated strategic technologies and emerging industries to shape the future of growth; iii) increase tax incentives to reduce the economic bipolarization that has deepened during the COVID-19 pandemic; and iv) reinforce anti-tax avoidance measures. To support economic recovery, the proposals extend the existing tax credits to promote job creation by three more years and expand the tax incentives for small and midsize enterprises (SMEs). To help lead a major economic transition for future growth, the proposals include further tax incentives for investment in research and development (R&D) and facilities to develop the government-designated strategic industrial technologies and new growth and core technologies. The proposals also include changes that should affect foreign corporations with liaison offices in Korea and nonresidents supplying electronic services to consumers in the Korean market.
International Tax and Treasury