The government of South Korea has taken an initiative to boost the development of blockchain industry in the country by adding the sector to the fields of research and development eligible for tax credit, as reported earlier this week by the Ministry of Strategy and Finance.

The Ministry of Strategy and Finance had announced the proposed amendments to the enforcement decree of the 2018 tax law and that it will be in effect this February.

Accordingly, the R&D tax incentive will allow blockchain companies to benefit from a tax deductions subsidy of 30-40% and 20-30% of research and development expenses for both small enterprises, and large and medium-sized enterprises respectively. This is subject to the research and development tax relief program adopted by the country through a tax hybrid R&D credit and volume-based investment credit.

The current tax deduction rates for large corporations stands at 0-2% while that of medium scale enterprise stands at 8-15% and for small scale enterprises 25%.

South Korea continues to show a favorable inclination towards building the blockchain space and encouraging a robust and foolproof cryptocurrency business in the nation.

Recently, the government released the results of an assessment on 35 cryptocurrency exchanges based on an 85-point checklist to ensure that these exchanges have what it takes to serve the investors and traders of the Asian community. 7 out of them were given the ‘green tick’ on all 85 pointers, while those with shortcomings were asked to update their systems to the standards acceptable by the regulator.

Last September, the Korean government made efforts to support blockchain development by engaging with startups. “The meeting was part of the government’s efforts to engage with businesses in the 10 key ICT sectors of the Fourth Industrial Revolution,” reports Business Korea.

As for cryptocurrency and ICO tax laws, reports have it that the country is still in the processing of formulating one that promotes growth of the whole industry.

 

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Image Courtesy: Pixabay

 

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