There are calls to reform the income tax system for compensation for job-related inventions.
The National Intellectual Property Commission held the '2025 4th IP Policy Forum' at a restaurant in Jung-gu, Seoul, on the morning of the 9th. During the forum, discussions were held on ways to introduce a Korean-style evidence collection system and improve the taxation system for job-related invention compensation.
Job-related inventions refer to inventions made by researchers or employees working at public research institutions or corporations that are related to their work. In the case of job-related inventions, the institution or corporation holds the rights to the patent, while the inventor, who is an employee, is entitled to fair compensation. Compensation for job-related inventions is a typical form of compensation, and since it became subject to earned income taxation in 2017, it has been included in the tax base. The tax exemption limit is only 7 million won, causing many science and technology personnel to pay income tax on compensation for job-related inventions.
Dr. Kim Hak-hyo of the Science and Technology Policy Institute (STEPI) stated that a bold reform of compensation systems for researchers is necessary to inspire motivation for technological development and promote the influx of talented individuals into the STEM fields. Dr. Kim noted that the current tax system aggregates the invention compensation with annual salaries, applying the highest tax rate based on the total income, which has a greater negative effect on the research motivation of science and technology personnel.
He emphasized that as high-value compensation for job-related inventions contributes significantly to the nation's economic development through the creation of high-value new industries, quality jobs, and significant foreign currency earnings, there is a need to improve this in the direction of other income or separate taxation.
Chairperson Lee Kwang-hyung of the National Intellectual Property Commission, which hosted the forum, said, "When our country's tax system establishes a clear compensation system that enhances the motivation for invention and produces star researchers, the number of talented individuals choosing STEM fields instead of medical schools will increase," and added, "We will strive to ensure that necessary discussions can take place through cooperation among ministries."
Meanwhile, the forum pointed out the need for a Korean-style evidence collection system to prevent patent infringement damage to domestic small and medium-sized corporations.