The government decided to raise the tax reduction rate for research and development (R&D) in the field of artificial intelligence (AI), including generative AI, to a maximum of 50%. By designating AI sub-technologies as "national strategic technologies" deemed important for national economic security, the government aims to enhance tax benefits. Technologies related to autonomous navigation of ships and autonomous driving of vehicles will also be added to national strategic technologies.
Additionally, tax support for the K-culture industry will be strengthened. Tax credits for webtoon content production costs will become available, and the basic deduction rate for domestic video production corporations will be adjusted from the existing 5% to 10%.
The Ministry of Economy and Finance confirmed and announced the "2025 tax reform plan" at the tax development committee meeting on the 31st. This content is included in the reform plan with the purpose of "strengthening support for future strategic industries."
◇ Specifying AI sub-technologies designated as 'national strategic technologies'… Support for data centers
Following the designation of AI as a national strategic technology earlier this year, the latest tax reform plan specifies five newly strategic technologies: ▲generative AI ▲agent AI ▲advanced learning and reasoning ▲low-power and high-efficiency computing ▲human-centered AI. Data centers for AI services have also been included as "national strategic technology commercialization facilities."
Accordingly, the tax credit rate for AI R&D will be adjusted upward from the existing 20-40% to 30-50%, and the investment tax credit rate will be changed from 3-12% to 15-30%. Corporations investing in AI data centers will be able to receive a tax credit of up to 25%. Under the existing system, the credit rate was limited to 1-10% depending on the size of the corporation.
The government also implemented measures to encourage the return of outstanding overseas talent. The system, which provides a 50% tax exemption on income tax for AI professionals who return home after working at foreign research institutions for more than five years, is scheduled to be extended for three more years from the end of this year.
◇ Supporting technologies for autonomous navigation and autonomous driving as 'national strategic technologies'… Strengthening support for excellent shipowners and shippers
This tax reform plan also includes support measures for the shipping and defense industries. The government will add AI intelligent autonomous navigation technology and sub-technologies related to autonomous driving to national strategic technologies, aiming to enhance competitiveness in shipping and expand research support for future vehicles.
The sub-technologies related to autonomous driving include ▲passenger recognition and interface (newly established) ▲driving situation recognition sensor technology (expanded from existing technology scope) ▲integrated system technology for driving intelligent information processing (expanded from existing technology scope). Facilities for the manufacturing and testing of autonomous navigation-related equipment and facilities related to integrated system technology for driving intelligent information processing have also been newly designated as national strategic technology commercialization facilities.
Tax credits for excellent shipowners and shippers will also be revised. The government has provided tax credit benefits for 1% of the transportation costs spent on national shipping companies and 3% of the increased amount compared to the previous year for shippers that predominantly use domestic shipping companies. However, under the current system, only those whose share of spending on national shipping companies accounts for more than 40% of the total shipping costs are eligible for the credit. It has been pointed out that the volatility of transportation costs has made it difficult to meet this requirement. The government has decided to change the criteria to "when the cargo volume using national shipping companies accounts for more than 40% of the total shipping volume."
Instead, the deduction benefit will be modified to "0.5% of the transportation costs spent on national shipping companies" and an additional deduction of "1% of the transportation costs spent on foreign shipping under certain conditions" will be introduced. Those meeting the requirement of having a cargo volume using national shipping companies accounting for more than 25% of the total foreign shipping volume will be eligible for the additional deduction.
◇ Establishing tax credit for webtoon production costs… Raising deduction rate for large video production companies by 5%p
The support measures for the K-culture and content industry, which was a pledge of President Lee Jae-myung, have also been specified. In particular, the government plans to introduce tax credits for income and corporate taxes on production costs for webtoon companies.
Webtoons and digital comics published and sold under the "Act on the Promotion of Comics" will be eligible for tax credits, allowing for tax credits on expenses such as planning, production labor costs, and novel copyright fees. However, promotional expenses, government subsidies, and indirect costs will be excluded from the deductions. A credit rate of 10% will be applied to large and medium-sized enterprises, while a rate of 15% will apply to small enterprises. A government official noted, "Platforms like Naver that distribute webtoons are not included as beneficiaries of this support."
The government also decided to extend the application period for tax credits on video content for three more years, to enhance the global competitiveness of domestic video production companies. For large production companies, the basic deduction rate will be increased from the current 5% to 10%. The government plans to expand the application target for tax credits (3%) on investments in cultural industry specialist companies from small and medium-sized enterprises to large corporations, and to also extend the application period for three more years.