Korean New Deal
The Korean Government announced in June the Korean New Deal focusing on the digital economy, the green economy and social inclusion. Over 1.9 bn jobs is planned to be created and 160 trillion KRW will be invested until 2025 as follows:
- 58 tn for the Digital economy
- 73 tn for the Green economy
- 28 tn to strengthen social safety net
Full Plan
5th supplementary budget
South Korea's Ministry of Economy and Finance unveiled its fifth budget extension of nearly 9.3 trillion won (8.5 bn dollars) on December 29, 2020, to help SMEs and the unemployed active population.
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Summary of Economic Measures against Covid-19
The Korean Government released a comprehensive document on its economic measures against Covid-19, including tax relief, fiscal, financial and administrative support detailed by size of companies and sectors. Specific measures are implemented for:
- SMEs and small businesses
- Export industries
- Local economy
- Airline and shipping industries
- Tourism, restaurants and service industries
- Workers and consumers
FULL DOCUMENT
Support for Employers and Employees
The Korean Ministry of Labor and Employment (MOEL) also announced its guidelines for organizations and businesses to control and prevent the spread of COVID-19, as well as support measures such as financial assistance to quarantined employees, or the implementation of flexible hours and home office systems.
- Employers' support for paid leave if an employee is hospitalized and quarantined by the health authority: daily salary per individual, max. of 130,000 KRW per day, application to National Pension Service branch
- Employees' support for living expenses if hospitalized and quarantined employee does not benefit from paid leave: emergency welfare assistance of KRW 1.23 mn per 4-member household
- In case of shutdown decided by a business owner, the employer shall pay 70% of the average wage
- Assistance to priority companies that use a flexible working system (commuting based on time lags, home office, telecommuting): 2.6 MW per person per year if the system is used once or twice a week, and 5.2 MW per person per year if the system is used 3 times a week
FULL DOCUMENT
Special Fiscal Measures
The National Tax Service announced an extend of the deadline to report and pay corporate tax for companies suffering from new coronavirus infection and a early VAT refunds. Such companies have to submit a request to their local NTS Office. The government has also revised the Restriction of Special Taxation Act twice this year to give tax support. By revising the taxation act, it can provide such tax support as:
- 50 percent tax reduction for commercial property rent cuts
- VAT cuts given to small businesses of which the revenues do not exceed 80 million won a year
- 30 percent to 60 percent corporate tax reduction for SMEs located in the disease hit areas
- One percent tax reduction for the payment made three months in advance
- Up to 80 percent tax deduction for credit card use and 70 percent individual consumption tax cuts for car purchases
The government has drawn up the 2020 tax revision bill to help recover from damages incurred by the pandemic, and to encourage individuals and businesses to continue going forward.
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Our webinars and ressource on business support
How to access the government's support package?
The Korean Strategy for business continuity
Q&A on business support for foreign-invested companies