Types of Business for Tax Reduction or Exemption

from Corporate Tax etc. for Foreign Investment

July 20, 2015

Restriction of Special Taxation Act

Article 121-2 [Reduction of or Exemption from Corporate Tax, etc. for Foreigner's Investment]

①A foreigner's investment to carry on a business falling under any of the following subparagraphs(referring to the foreigner's investment under Article 2 (1) 4 of the Foreign Investment Promotion Act; hereafter in this Chapter, the same shall apply), which meets the standards as prescribed by the Presidential Decree, shall be eligible for the reduction of or exemption from each of corporate tax, income tax, acquisition tax, registration tax and property tax under the provision of paragraphs (2) through (5) and (12)(Amended effective Jan. 1, 2010)

1. Business of industrial support service that is vital to the strengthening of the international competitiveness of domestic industries and business accompanying a high-level technology;

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Enforcement Decree of the Restriction of Special Taxation Act

Article 116-2, [Standards, etc. for Tax Reduction and Exemption]

(1) The foreigners' investment eligible for the reduction or exemption of the corporate tax, income tax, acquisition tax and property tax pursuant to Article 121-2 (1) 1 of the Act shall be the cases in which factory facilities (in the case of other businesses than the manufacturing on the Korea Standard Industrial Classification, referring to the business places; hereafter in this Chapter, the same shall apply) are established or operated in order to carry on an industry-supporting service business or business accompanying high technology that is determined at least once a year by the Minister of Strategy and Finance after deliberation of the Foreign Investment Committee prescribed in Article 27 of the Foreign Investment Promotion Act. (amended Feb. 2, 2012)

(2) The business (excluding the industry-supporting service business that falls under the research and development business listed on the Korea Standard Industrial Classification) under Article 121-2 (1) 1 of the Act shall be the business accompanying technologies falling under any of the following subparagraphs: (amended Feb. 2, 2012) 

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Regulation of Tax Reduction or Exemption for Foreign Investment

Article 4 [Type of Business for Tax Reduction or Exemption]

Tax Reduction of Foreign Investment for High Technology Business and Industrial Support Services

Part 1. High Technology Business

1. Electronics, Information and Electricity

2. Precision Machinery and New Process

3. Material

4. New Chemical, Fine Chemistry and Biotechnology Industry

5. Optical and Medical Device

6. Aviation and Transport

7. Environment, Energy and Resources

8. Construction and Social Infrastructure

9. Food Sector

Part 2. Industry Support Services

1. Electronics, Information and Electricity

2. Engineering Services

3. Fishing

4. New Materials, Fine Chemicals and Biotechnology

5. Optical and Medical Equipment

6. Transport

7. Environment, Energy and Natural Resources

8.  Construction and Social Infrastructure

9. Digital Contents Industry

10. Other Industrial Support Services

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Please refer the enclosed for more information.

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