Potential Tax Breaks for Blockchain Startups in S.Korea

By A. Choi, Marketing Manager for KStarCoin.

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South Korean government officials had a meeting on July 13th regarding “Growth through Innovation” planning for national investment projects. The government official representative announced a plan to revise and potentially amend the current tax codes so that there would be more opportunities for companies to focus on technological improvements, i.e. blockchain to push for growth in South Korea.

The government’s decision to lower the taxes was announced to the public by the South Korean Ministry of Strategy and Finance after meetings of ministers from eight different regulatory agencies working on economic, financial policies. The government did not only decide on simply lowering taxes for companies to encourage technological development like blockchain, but they also decided to lower the tax reduction threshold for Blockchain startups and other companies. The current situation for companies to get tax reductions is not that easy. Companies must allocate more than five percent of the previous year’s gross sales to R&D and ten percent of its R&D investments should focus on new growth technologies like blockchain. The government decided that many of the young companies were not profitable enough to reach the current ten percent of the R&D incentive. It is expected that companies will now be charged only five percent starting from 2020.

We are starting to see positive results from the governmental meetings regarding topics like blockchain, cryptocurrency, and ICOs.

The government is having more meetings in the next few weeks to further discuss the future of blockchain and its related fields.

Let us hope that there will be further great news like the one we heard in recent days. It is great to see that South Korea is making a turn from the strict stance that they had on blockchains and ICOs. We are seeing an unprecedented change from hard stances against blockchains to a stance that is pro-crypto from South Korea as a whole. These changes can push South Korea to become the leading crypto hub in the world. Let’s just wait and see what happens in the next few weeks.

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