Small and Medium Enterprises that invest in the fourth industrial revolution of intelligence information technology such as AI and IoT will be able to deduct corporate tax.

Besides, the Democratic Party lawmaker has proposed amendments to the "Tax Exemption Restriction Act" that include a portion of investment costs for small businesses listed on KOSDAQ or KOSDAQ investing in intelligence information technology, from corporation tax or income tax (income tax on business income) On February 7.

The amendment contains information which deducts corporation tax or income tax in the range of 45% and 35% of the cost of research and manpower development expenses in the field of intelligent information technology. In addition, 12% of SMEs invested in facilities for commercialization of intelligent information technology, 9% of medium-sized enterprises, and 7% of other companies. However, certain conditions must be met, such as not reducing the number of regular workers. Smart automation is a measure to prevent job losses caused by the fourth industrial revolution. Intelligent Information Technology in the Amendment refers to the information and information technology sector defined by the Presidential Decree including the Internet of Things (IoT), cloud computing, and artificial intelligence.

Meanwhile, the current Tax Exemption Restriction Law also has provisions for research and human resources development and facilities investment deduction. The R & D expenses for new growth engines defined by the Presidential Decree are 30% for SMEs and 20% for medium enterprises. Facilities investment costs are 6% for SMEs and 3% for medium enterprises.

Once the amendment is passed, the research and development cost of the intelligent information technology field can receive a maximum of 15% extra deduction from the existing one, and the ratio of facility investment deduction will increase to two to three times. It will be an incentive for SMEs or midsize companies to actively consider the fourth industrial revolution field, such as intelligent information technology, when investing in research or facilities in the future.

The amendment also includes support for job creation. If a research and development institute is established or a full-time worker is hired in a dedicated department, SMEs receive a 10% salary and a social insurance premium of 100% for 2 years and a 5% salary and a 50% social insurance for 2 years.

Regular workers employed by research institutes or dedicated departments of SMEs in the field can also receive 80% of their income tax at the annual limit of KRW 2 million for 5 years.

It has been pointed out that major foreign countries and leading companies are carrying out large-scale research and investment on infrastructure technologies related to the Fourth Industrial Revolution and that domestic policy support is insufficient. The tax support division, which directly helps corporations, alleviated some of the income tax or corporation tax on research and development and commercialization of new growth technologies including intelligent information technology, but criticized that the benefits are limited.

Mr. Park stated, "We expect to be able to promote the development of intelligent information technology by providing a comprehensive tax support system such as R & D, commercialization, and human resource support in the field of technology based on the fourth industrial revolution."

By Kim Mi Gyung the13ook@


[ copyright ⓒ The Digitaltimes ]