Tax Incentives for Newly Designated Daedeok R&D Special Zone

Incentives including tax relief will be available at the Daedeok Science Town as early as November this year. The percentage of the tax incentives will be similar to those of free economic zones.

The government and the ruling Uri Party agreed to lay out a comprehensive plan in May on the designation of the Daedeok R&D special zone and to pass a so-called “Act on Development of the Daedeok R&D Special Zone” at the regular session of the National Assembly in September.

Chung Se-kyun, Uri Party’s chief policymaker, and Oh Myung, minister of Science and Technology, met on May 7 at the National Assembly and agreed on issues related to the designation of the Daedeok R&D special zone.

“Income and corporate tax incentives will be given at the Daedeok R&D special zone, and the government will provide help in building residential areas for foreigners as well as hospitals and schools,” said the chief policymaker.

The government and the ruling party plan to draw up the bill by late June, coordinate related departments and hold public hearings in July and August, and declare the designation in November as soon as the National Assembly passes the act.

They also decided to set up a commission on space and a project team to work on space development so that the project is implemented systematically. An act to promote the development of space will be enacted in the National Assembly in September. The act will include ways to create an organization to effectively develop space and details on compensation for the victims of damage incurred by the launch of satellites.

The government and the Uri Party also agreed to allow exceptions in restricting the total amount of shareholding in other companies in order to encourage the participation of conglomerates in developing next generation growth engines such as mobile telecommunications and semiconductors.

Young-Hae Choi yhchoi65@donga.com