U turn law`s a tiny support on tax, benefits and subsidy…"Shocking support law is needed"
Park Byung Rib | riby@ | 2017-11-06 10:53:57
It is pointed out that the effect of the Law on Assistance for Returning Domestic Companies to Return Domestic Companies (U-Turn Enterprise Support Act), which was implemented in 2013 to return the Korean companies that went abroad to Korea, is insignificant.
On October 30, Kim Dong-yeon, the finance minister and finance minister, announced that they would release additional U-turn support policies in December, but they are expected to be limited to extension of tax benefits.
According to the government on November 5, the government is comparing and analyzing policies to support foreign-invested companies and companies that support non-metropolitan areas in order to provide additional support for U-turn companies.
This is to examine what benchmarking is possible among policies to support foreign-funded enterprises and non-metropolitan areas.
However, it is highly pointed out that the contents of the three types of enterprise support are necessary to provide an extraordinary support for restoring a company that has gone overseas.
In the case of tax benefits such as current corporate tax, U-turn companies will pay 100% for five years and 50% for two years after the overseas business is liquidated. If a non-metropolitan area transfer company transfers all the factories out of the overcrowding area in an overcrowded area, it will deduct 100% tax for 7 years and 50% for 3 additional years. Tax benefits of foreign-invested enterprises are the same as those of U-turn companies.
In case of land purchase cost, up to 42% of U-turn companies, up to 40% of non-capital region transfer companies, capital investment cost up to 31% for U-tern companies and up to 24% for non-capital regions. Land Purchase CostㆍIt is expected that there will be no significant change in the level of facility investment cost support due to the high number of U-turn companies. It is observed that the support period for non-metropolitan area taxation is three years longer than that of U-turn company, and the additional policy for U-turn enterprise support will be extended only to the extent of extension.
Currently, the U-business support policy is that it is difficult to experience corporate tax benefits because the initial turnover of the U-turn company is not large, and the employment subsidy subsidy period is also one year, which is less effective. The current U-turn enterprise support program is one of the weaknesses for reverting a U-turn company or a company that is about to leave. In fact, there were only three U-last companies last year, only 41 in the last four years. The number of U-turn companies by year is decreasing to 27 in 2014, 4 in 2015, 12 in 2015 and 3 in 2017.
Meanwhile, it is also a matter of failing to get U-turn support if the industry is switched. You can get government support only if you turn in the same industry type as the products produced overseas. This is contrasted with the `Special Act for Enhancing Corporate Vigor` (Basic Act), which is being implemented to support the transformation of domestic businesses into the industry. For this reason, it is also necessary to apply some of the government subsidies to U-turn enterprises.
However, the government is supporting the construction of smart factories for companies that have gone abroad, reducing the burden on labor costs and providing a strategy to turn them into U-Turn. The government plans to supply 20,000 smart factories by 2022 and has built 4485 smart factories (as of September) since 2014. The budget for the smart factory expansion next year is KRW 80 billion, which is more than the budget of KRW 61 billion this year, but it is not much more than the budget for this year (21.5 billion won). It is not clear how much will be secured next year.
A government representative said, "The companies are going to China and Vietnam because of low labor costs. We are planning a policy to help U-turn companies build smart factories, reduce labor costs, and actually make U-turns. "
By Park Byung Rib riby@
[ copyright ⓒ The Digitaltimes ]
On October 30, Kim Dong-yeon, the finance minister and finance minister, announced that they would release additional U-turn support policies in December, but they are expected to be limited to extension of tax benefits.
According to the government on November 5, the government is comparing and analyzing policies to support foreign-invested companies and companies that support non-metropolitan areas in order to provide additional support for U-turn companies.
This is to examine what benchmarking is possible among policies to support foreign-funded enterprises and non-metropolitan areas.
However, it is highly pointed out that the contents of the three types of enterprise support are necessary to provide an extraordinary support for restoring a company that has gone overseas.
In the case of tax benefits such as current corporate tax, U-turn companies will pay 100% for five years and 50% for two years after the overseas business is liquidated. If a non-metropolitan area transfer company transfers all the factories out of the overcrowding area in an overcrowded area, it will deduct 100% tax for 7 years and 50% for 3 additional years. Tax benefits of foreign-invested enterprises are the same as those of U-turn companies.
In case of land purchase cost, up to 42% of U-turn companies, up to 40% of non-capital region transfer companies, capital investment cost up to 31% for U-tern companies and up to 24% for non-capital regions. Land Purchase CostㆍIt is expected that there will be no significant change in the level of facility investment cost support due to the high number of U-turn companies. It is observed that the support period for non-metropolitan area taxation is three years longer than that of U-turn company, and the additional policy for U-turn enterprise support will be extended only to the extent of extension.
Currently, the U-business support policy is that it is difficult to experience corporate tax benefits because the initial turnover of the U-turn company is not large, and the employment subsidy subsidy period is also one year, which is less effective. The current U-turn enterprise support program is one of the weaknesses for reverting a U-turn company or a company that is about to leave. In fact, there were only three U-last companies last year, only 41 in the last four years. The number of U-turn companies by year is decreasing to 27 in 2014, 4 in 2015, 12 in 2015 and 3 in 2017.
Meanwhile, it is also a matter of failing to get U-turn support if the industry is switched. You can get government support only if you turn in the same industry type as the products produced overseas. This is contrasted with the `Special Act for Enhancing Corporate Vigor` (Basic Act), which is being implemented to support the transformation of domestic businesses into the industry. For this reason, it is also necessary to apply some of the government subsidies to U-turn enterprises.
However, the government is supporting the construction of smart factories for companies that have gone abroad, reducing the burden on labor costs and providing a strategy to turn them into U-Turn. The government plans to supply 20,000 smart factories by 2022 and has built 4485 smart factories (as of September) since 2014. The budget for the smart factory expansion next year is KRW 80 billion, which is more than the budget of KRW 61 billion this year, but it is not much more than the budget for this year (21.5 billion won). It is not clear how much will be secured next year.
A government representative said, "The companies are going to China and Vietnam because of low labor costs. We are planning a policy to help U-turn companies build smart factories, reduce labor costs, and actually make U-turns. "
By Park Byung Rib riby@