Reasons for Proposal and Major Provisions

To promote regionally balanced development, the Special Act on Decentralization and Balanced Regional Development designates areas requiring intensive investment in non-metropolitan regions as “opportunity and development zones” and prescribes that administrative and financial support may be provided to such areas.

However, in order to promote regionally balanced development by encouraging the influx of private enterprises into non-metropolitan regions, it is necessary to prescribe special taxation such as reduced corporate taxes for businesses that are occupants of opportunity and development zones.

Accordingly, the Amendment reduces corporate taxes for 10 years for businesses that are occupants of opportunity and development zones (100% for 5 years from the taxable year in which income is generated for the first time, 50% for the subsequent 5 years), and reduces income tax by 70% (100% for youth) up to a limit of 3 million won per year for 5 years for employees of businesses that are occupants of opportunity and development zones (Article 121-33 and Article 121-34 newly inserted).