Gov't to extend tax breaks for corporate investment

SEOUL, Dec. 9 (Yonhap) -- The government said Tuesday that it will extend tax deductions on corporate investments in new plants and equipment for an additional year until the end of 2009 in a bid to stimulate capital spending.

Under a revised tax rule, the Ministry of Strategy and Finance said that it will
exempt taxation on 7 percent of total investments to be made outside of Seoul and
in its surrounding area, while giving a 3-percent deduction on investments made
inside the populated capital area.
Currently, the tax deduction rate stands at 7 percent with little tax benefits
for investments in Seoul. The tax credit will be effective until the end of next
year, extending its expiration date by one year, the ministry said.
The move comes as South Korea steps up efforts to stimulate slumping corporate
investment at a time when job creation and domestic consumption are cooling at a
fast pace.