Korea: Direct and indirect tax incentives to promote foreign investment announced

Include extension of tax relief period for importation of capital goods for foreign investments by one year

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January 8, 2025

The Korean government announced the "2025 economic policy direction" on January 2, 2025, which includes financial (including cash grants) and the following tax incentives to promote foreign investment:

  • The tax relief period for the importation of capital goods for foreign investments (including exemptions for customs duties, individual consumption tax, and value added tax (VAT)) will be extended from the current maximum of six years to seven years.
  • Foreign investment companies that establish corporations or additional business sites in non-metropolitan areas designated as “opportunity development zones” by local governments will be eligible for corporate tax, acquisition tax, and property tax exemptions.

Read a January 2025 report prepared by the KPMG member firm in Korea

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