South Korea will allow up to 30% of R&D expenses on disruptive tech to be tax deductible next year, the government announced on Thursday.
The Ministry of Strategy and Finance will implement the new tax benefits for firms in 11 sectors, in research areas like AI, 3D printing, and flexible displays, according to Reuters.
“Regardless of company size, we’re trying to give benefits to those taking risks”, said South Korea’s Vice Finance Minister Choi Sang-mok.
“In a difficult economic situation with a lack of growth drivers, this could become a breakthrough in terms of taxation”, he added.
Currently, large tech companies like Samsung Electronics and LG Electronics spend billions of funds on R&D ventures, but smaller firms have refrained from large spending due to limited resources and economic uncertainty, the report writes.