South Korea introduces tax breaks for showbiz

SEOUL: South Korea’s film and television industries are to be allowed access to a government tax break previously reserved for manufacturers.

The Ministry of Culture, Sports and Tourism said that the Restriction of Special Taxation Act had been amended. Changes will take effect this Friday.

Cultural goods such as film, TV and K-pop music have become major exports for Korea. But the sector is currently suffering from an import ban in China.

Under the new tax-break scheme, production costs from January 2016 can be set against corporate tax bills, with small companies able to reduce their costs by 10 per cent. Mid- sized companies can claim seven per cent and conglomerates three per cent.

Qualifying TV content can include drama series, animation and documentaries featuring cultural and natural heritage of the country. Feature films need to be screened in cinemas for at least seven consecutive days, or a single day in the case of KOFIC-acknowledged arthouse and indie titles.

The culture ministry expects that the new law will drive a US$ 417-million increase in investment, and create about 6,400 jobs in film and TV over the next five years.

“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,” the ministry said.

“We hope this would be a chance to vitalise 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,” a ministry official told the Yonhap news agency.