South Korea to Offer Better Tax Reliefs for Blockchain Startups
July 23, 2018
South Korean authorities have declared their plans to review the existing tax legislation for companies. The primary purpose for the decision is supposed to be providing more advantages to startups that enable far-reaching technologies with blockchain among them for their products.
On Wednesday, July 18, a meeting of the heads of eight economy ministries was held. As a result, the officials resolved to lower tax rate for startups that apply any of the 157 “new-growth technologies” including blockchain to develop 11 economic fields.
The ministers also came forth with a proposal to cut threshold for tax benefits for corresponding companies. Note that now to get such perks the latter ones have to pay over 5% of gross annual income to finance research and development (R&D) with 10% of this amount being invested in the new growth technologies.
Along with that the ministers decided that R&D investment rate for gross revenue must be 5% this year given possible problems caused by low sales within the first year of startup operation.
As the government members say, the issue will be described in more detail on July 26. As local media report, the upcoming changes are expected to enter into force in the first quarter of 2019.