The government on the 9th released a three-part tax benefit package for corporations that invest in safety equipment. If corporations install safety facilities at business sites that incorporate new technologies such as artificial intelligence (AI), drones and robots, up to 12% of the expense will be deducted from corporate tax. Research and development (R&D) expenses will be credited up to 40%. Previously, tax benefits were given only when certain safety facilities, such as fire protection and seismic reinforcement equipment, were installed.
◇ Up to 40% tax credit for AI safety technology research and development expenses
In the "2026 economic growth strategy" released that day, the government said it will introduce a "three-part tax support package for safety equipment." The government decided to expand the scope of safety facilities recognized as eligible for the integrated investment tax credit. The integrated investment tax credit is a system that reduces taxes such as corporate tax by multiplying a set rate (credit rate) by the expense of corporations' business facility investments.
Going forward, when corporations install safety facilities that use new technologies, such as AI control systems and safety-detection drones, at business sites, they will be able to receive integrated investment tax credit benefits. The government will designate these advanced safety technologies as new growth and original technologies and plans to credit 20% to 40% of research and development expenses and 3% to 12% of related facility investment amounts. The government also decided to provide tax benefits when corporations install safety facilities for subcontractor workers, specially employed workers, and delivery workers.
In addition, the government will introduce an "accelerated depreciation" system that shortens the expense treatment period for safety equipment investments by small and mid-sized corporations. Normally, corporations' facility investment amounts are treated as expenses over five to 10 years. If $10 billion was invested in facilities this year, tax authorities depreciate the amount at $1 billion per year over 10 years and subtract it from the taxable revenue of the corporation. Accelerated depreciation shortens this depreciation period so that in the year after the investment, a substantial portion of the investment can be treated as an expense, allowing tax-saving benefits from the investment to be realized sooner. The government decided to cut the depreciation period for small and mid-sized corporations' safety equipment investments by 50%.
◇ Pushing to introduce tax support grants when employing "older adults + youth"
The government will also move to strengthen old-age income security. While pursuing a phased extension of the retirement age, it will provide an integrated incentive for older adults to corporations that employ workers age 60 or older beyond the statutory retirement age, and will push a "generation win-win employment support" system that gives additional support when corporations hire as many young people as the number of older adults they employ.
It also plans to push for phased mandatory adoption of retirement pensions by corporation size. It will consider imposing fines on business sites that have not adopted them. It also plans to invigorate the fund-type retirement pension system. Rather than employees signing individual contracts with financial companies and managing their retirement pension balances as they do now, funds would be pooled like the National Pension and managed by a specialized institution from a medium- to long-term perspective.
The home pension system for older adults who own dwellings but have no income will be overhauled to ease the occupancy requirement and provide stronger support. The basic pension and National Pension reduction system will be partially scaled back.
In addition, regarding the livelihood benefit for low-income households, the government will push to abolish the family support obligation criteria for elderly and disabled households. Under the current system, benefits are restricted if the annual income of the supporting parents or children is 130 million won or if their assets exceed 1.2 billion won. It will also switch welfare benefits such as the parental benefit, first-meeting voucher, and child allowance to automatic payment even without an application.