Innovate and Save!

April 1 is the day after Easter for Christians and April Fool’s Day for Koreans. For corporations, however, it’s the day after the due date for corporate income tax filing.

Most companies’ financial years end with the calendar year.

As such, they need to get their taxes in by the end of March.

Here is a tip on how to grow innovation in your company as well as save on your corporate taxes.

Since 1960, the Korean government has been working to promote research and development (R&D) throughout the nation.

One way that the government does this is by providing tax deductions to companies that actively pursue new technologies by constructing and operating their own R&D Centers.

Many small and medium enterprises (SMEs) take advantage of 20-25% tax breaks on the construction and staffing of their R&D Centers – allowing them to have staff dedicated primarily to innovation.

To get your own certified R&D Center for your business, take the following steps:

1. Become a certified “Venture Company.” (See www.eng.kibo.or.kr for more information).

2. Set up a R&D Center with 2 or more researchers (See www.koita.or.kr for more information).

3. Get R&D Center certification.

Once you have a certified R&D Center, you will receive a tax break for 20-25% on salary paid to the Center’s researchers.

Almost any corporation can open its own R&D center.

Many Korean corporations are aware of this government incentive strategy and are putting it to good use.

Your corporation can join them with a few simple steps.

For details, assistance, or other money-saving advice, contact JZ and Associates at jz@taxjz.com.