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South Korea Plans New Tax Incentives To Address Pandemic

By Eli Flesch · January 7, 2021, 6:12 PM EST

South Korea is planning to expand tax deductions and offer new tax incentives in 2021 as part of an effort to boost an economy damaged by the COVID-19 pandemic, the country's Ministry of Economy and Finance announced.

Taxpayers can deduct an extra 10% on their credit card spending, up to 1 million won ($914), under the new proposal, an increase from the 15% deduction currently allowed, the ministry said in a statement Wednesday. Corporate investment deductions will be expanded to cover all businesses except those engaged in renting property and clubs.

Commercial property owners that cut rental prices would be eligible for a 70% reduction in their tax bills, up from the existing 50% reduction. Land transactions used for public housing projects would be entitled to a temporary 10% capital gains tax reduction.

The government said it also planned to expand research and development tax credits to cover more health and green technologies, and to raise the simplified value-added tax ceiling to cover revenue up to 80 million won, up from 48 million won.

The proposals will be sent to the National Assembly for consideration.

--Editing by Joyce Laskowski.

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