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연구개발과 조세정책(R&D and tax policy)

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  • 연구개발과 조세정책(R&D and tax policy)
  • 손원익
  • 한국조세연구원


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Title 연구개발과 조세정책(R&D and tax policy)
Similar Titles
Material Type Reports
Author(Korean)

손원익

Publisher

서울:한국조세연구원

Date 1999-05
Pages 144
Subject Country South Korea(Asia and Pacific)
Language Korean
File Type Link
Holding 한국조세연구원

Abstract

This study evaluates the current tax incentives related R&D investment by analyzing the tax-reduction effects of those incentives and by comparing them with tax incentives of other countries. The theoretical analysis finds that the current tax incentives generate roughly the same magnitude of the tax-reduction effect to both current expenditures and capital expenditures. The international comparison of tax incentives through B-index shows that Korea ranks fifth out of 27 countries including OECD member countries, Taiwan, and Singapore. Although the fifth out of 27 is relatively high rank, when we recognize that levels of B-index of other advanced countries are close to that of Korea, we can reach the conclusion that more efficient and effective use of the current tax incentives is necessary to compete with those countries. To make the current tax incentives for R&D investment more efficient and effective, the following proposals can be considered: (1) The policy of tax free reserve for R&D investment should be abolished due to the low incentive effects and the complexity of the policy. Instead, the tax credit rate for R&D investment and/or the depreciation rate for R&D capital investment can be adjusted to compensate the tax-reduction effects generated by the policy of tax free reserve for R&D investment. (2) The tax incentives should be designed to incorporate the needs of the current economic environment. For example, the communication industry requires more systematic approach for tax incentives. (3) The tax incentives should be designed to cover companies in the various stages of development. (4) More attention should be paid to the small and medium sized companies in Korea so that they can easily adjust to the rapid change of economic environment. (5) Any provisons of tax incentives favoring domestic products should be abolished under the rule of WTO. Those provisions may be amended by raising the rates of tax credit for both domestic and foreign products.