The government of South Korea has recently announced that it is trying to attract television and film investments from around the world by offering exclusive tax breaks to production companies. These particular tax breaks had only been previously given out to major world manufacturers.
The South Korean Ministry of Culture announced at the end of last week that special revisions will be made to the country’s Special Taxation Act. Previous to now, South Korea had a solid export program in place dealing with South Korean music, television shows and films. However, China’s recent change of heart regarding its import quotas, as well as considerable political differences and tensions between the two countries, has caused a large downturn in the South Korean entertainment industry.
According to the new scheme, production costs can now be included in a company’s overall corporate tax liability. The smaller companies will be able to reduce their overall costs by at least ten percent while the giant corporations can lower their burdens by at least three percent.
For feature film production to receive the new tax breaks, the film has to be shown in a theater for at least seven consecutive days or at least for one day in the case of certain indie titles. For television productions, it can include feature series’, animation and documentaries. Over the next five years, the Ministry of Culture estimates that the tax breaks will create 6,400 new jobs in the South Korean entertainment industry and bring in well over a half billion dollars in new revenue for the country.
In a statement to the media, the Ministry of Culture said that, “The new law is to help grow the film and TV industry that has a great ripple effect on tourism and exports, and aid the companies in the industry that are suffering due to the Chinese ban on imports of Korean cultural products. We hope this would be a chance to vitalize the production of and investment into homegrown media content, so another smash-hit TV series like ‘Descendants of the Sun’ and blockbuster films like ‘Avatar’ and ‘Star Wars’ can be made on home soil.”
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