It is reported that the South Korean government has decided to raise the tax reduction rate for research and development (R&D) in AI, including generative AI, to a maximum of 50%. Following the designation of AI as a “national strategic technology” earlier this year, the latest tax reform plan specifies five newly strategic technologies: generative AI, agent AI, advanced learning and reasoning, low-power and high-efficiency computing, and human-centered AI. Data centers for AI services have also been included as “national strategic technology commercialization facilities.” The tax credit rate for AI R&D will be adjusted upward from the existing 20-40% to 30-50%. Corporations investing in AI data centers will be able to receive a tax credit of up to 25%. The government has also implemented measures to encourage the return of outstanding overseas talent. The system, which provides a 50% tax exemption on income tax for AI professionals who return home after working at foreign research institutions for more than five years, is scheduled to be extended for three more years from the end of 2025.
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