Gov’t gives out tax breaks to drone developers

The government will give tax breaks to drone developers as part of efforts to boost industries that could become the country’s new growth drivers.

The Ministry of Strategy and Finance said on Tuesday it will exempt the costs of research and development (R&D) associated with drones from taxable corporate incomes.

The move comes in response to the financial difficulties being faced by small drone developers in Korea.

The tax exemption for drone makers was part of several government revisions to the tax code for this year.

Only six industries - Internet of Things (IoT), wearable smart devices, flexible displays, smart healthcare, hyperplastic materials, smart cars - were previously subject to the tax exemptions. The latest revision added three more: drones, smart farms and “cutting-edge materials,” which include various advanced textiles.

The government also revised the tax laws to encourage Korean companies of all sizes to hire more young people.

For small or mid-sized companies that hire a young Korean as a salaried staffer, the government will offer an annual tax break work 5 million won ($4,100) per new employee for three years.

Conglomerates will receive a tax break of 2.5 million won per new hire over the same period.

BY SONG SU-HYUN [song.suhyun@joongang.co.kr]