ANNOUNCEMENT 01 Dec 2009In December 2009, the government of Republic of Korea announced a targeted tax change.
NUMBER OF INTERVENTIONS
Goverment of Korea. "2010 Key Economic Policies: Moving beyond the crisis," December 2009. "Issued by related ministries."
In December 2009 the Government of Korea issued a wide-ranging policy statement of its "Key Economic Policies" for 2010. Much of this document is given over to describing matters unlikely to differentially impact commercial interests on the basis of nationality. However, the following excerpts refer to policy initiatives that, if implemented, could affect foreign commercial interests:
From the section titled "Policy objectives"
1. "Twenty components and materials which may need to replace imports or those which expect demand surge(s) (sic) in the coming years will be selected to benefit from government support. The government will provide financial assistance of 40 billion won in 2010 to joint research on technology development" (page 14).
2. "Much support will be available for exporting SMEs, shipping companies, and plant exporters, as well as the green growth industry and overseas resources development businesses. Export finance support from the Korea Export-Import Bank (KEIB) will be increased to 60 trillion won in 2010 from 53 trillion on 2009. Export insurance support from the Korea Export Insurance Corporation (KEIC) will be expanded to 190 trillion won in 2010 from 170 trillion won in 2009" (page 15).
In the sub-section on the "Development of green industries" the document notes:
3. "On the industrial side, existing manufacturers will be strongly recommended to produce products with low-energy-consumption technologies, and 200 companies specializing in promising green technologies will be nurtured and supported. R&D investment in green technologies will be increased from 2 trillion won to 2.2 trillion won in 2010 to develop core technologies such as offshore wind power generators and secondary batteries" (page 28).
4. "To encourage exports of green technologies, the government will increase the proportion of green ODA from 13 percent to 2010 to 20 percent in 2013 to 30 percent in 2020. Also it will support domestic enterprises' participation in the overseas Clean Development Mechanism (CDM) with the carobn fund (approximately 100 billion won) set up by the Korea Ex-Im Bank" (page 29)
5. "Tax incentives will be increased for R&D investment in new growth engines and core technologies from the current tax deduction of 3-6 percent to 20 percent for new growth engines, and 25 percent for core technologies. Financial support for new growth engines will include creating funds of 200 billion won in 2010 and attracting existing funds into early investment. Government's special support will be provided for the development of technologies in IT convergence and nano-convergence, which will become one of the country's major export industries" (page 29).