Leveraging R&D Tax Incentives to Foster Innovation and Save Corporate Income Taxes
Most companies in Korea align their financial year with the calendar year, which means they must submit their corporate income tax return by the end of March. But here's a valuable tip for businesses looking to foster innovation and save on corporate taxes in Korea.
Since 1960, the Korean government has been actively promoting research and development (R&D) across the nation. One of the key ways they encourage this is by offering tax deductions to companies that actively pursue new technologies by establishing and operating their R&D Centers.
This incentive is particularly beneficial for small and medium enterprises (SMEs) that can take advantage of substantial tax breaks, ranging from 20% to 25%, for both the construction and staffing of their R&D Centers. These tax incentives allow companies to allocate dedicated resources to innovation.
Here's how your business can establish its certified R&D Center in South Korea:
Become a certified “Venture Company.” For more information, visit www.eng.kibo.or.kr.
Set up an R&D Center with a team of one or more researchers. For additional details, refer to www.koita.or.kr.
Obtain R&D Center certification.
Once your company holds a certified R&D Center status, you become eligible for significant tax breaks of 20-25% on the salaries paid to the researchers in your center.
It's important to note that almost any corporation can establish its R&D center in Korea, and many local businesses are already capitalizing on this government incentive to drive innovation.
To explore further details, seek assistance, or receive expert money-saving advice, you can contact JZ at jz@taxjz.com or If you would like a free consultation with an English-speaking Business Consultant/Accountant(ex-CFO) in Korea, please schedule a call at: Schedule a Call with Jz
Don't miss out on this opportunity to innovate and optimize your corporate tax strategy.
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