South Korea Plans Bigger Tax Breaks to Boost Its Chip Sector
- Ministry plans tax breaks up to 25% on big chip firms’ capex
- US, China, Japan vying to build up chip manufacturing at home
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South Korea’s government plans to hike tax breaks for big chip companies’ capex to as much as 25%, after President Yoon Suk Yeol called for bigger incentives to fuel the critical sector.
Big companies will get a tax credit of 15% on investments on manufacturing facilities, up from the planned 8% under legislation passed last month, according to a finance ministry statement. Smaller companies’ capex spending will get a tax break of 25%, up from 16%. Any additional investment in chipmaking in 2023 will get another 10% tax break, the ministry said. The broadened plan, which will be proposed this month, could reduce the tax burden on companies by more than 3.6 trillion won ($2.8 billion).