Tax credits from research anddevelopment expenditure

1.Outline : local resident spent cost for research and development.

  This is tax credit system for the corporationtax from constant ratio of research and development expenditure.

2. Applyingscope : tax credit applying cost for the research and development expenditureaccording to the Restriction of Special Tax Act.

3.Deduction ratio

 (1) Medium and small firm: Tax credit max(1),(2)

  ① Total amount standard: relevant yearoccurred amount x 25%

  ② Increased amount standard: Increasedoccurrence standard : (relevant year-previous year amount) x 50%

*3 years from the relevant taxation year starting date : 15%,2 years after it:10%

(2) Mid-sizefirm : tax credit max (1) (2)

  ① Total amount standard : relevantyear total amount x 8%

  ② Increased amount standard : relevantyear amount – previous year amount) x 40%

(3) Majorcompany : choose 1 among below 2

 ① Total amount standard : relevantyear amount x (2~3%)

 ② Increased amount standard : (relevantyear amount – previous year amount ) x 40%

4. Calculationmethod of annual average amount

 (1) annual average amount for 4 years

(2)Application procedure

Submitting taxcredit application, breakdown of research and development cost,

plan for theresearch and development to the head of competent tax office.