On the 1st, the Defense Acquisition Program Administration (DAPA) announced that it would expand tax support for research and development and facilities expense by adding technologies for entering and stabilizing the global supply chain to new growth and source technologies.
According to DAPA, technologies for entering and stabilizing the global supply chain refer to the technologies used for designing, manufacturing, assembling, and modifying weapons systems designated as defense materials for the purpose of enhancing international competitiveness.
DAPA, in consultation with the Ministry of Economy and Finance, initially designated three technologies in the defense industry on a tax preference basis in February of last year: ▲ propulsion system technology ▲ military satellite system technology ▲ manned and unmanned complex system technology, and began tax support for research and development and facility investments.
However, at that time, tax support was not applied to investments for exports. Reflecting the defense industry's request for tax support on export-oriented investments, the government has added technologies for entering and stabilizing the global supply chain to the tax support eligible technologies.
Accordingly, defense companies and their partners will be able to receive tax deductions amounting to 20-30% for research and development related to technologies for entering and stabilizing the global supply chain, and 3-12% for facilities.
This expansion of tax support was promoted as part of President Lee Jae-myung's commitment to reduce research and development taxes for corporations involved in defense exports.
DAPA Commissioner Seok Jong-geun noted, "I expect that domestic defense companies will establish a foundation for stable entry into the global supply chain and secure continuous export competitiveness."