People Power Party Lawmaker Proposes Tax Benefits to Attract Overseas Tech Talent
SEOUL, October 26, 2023 – People Power Party lawmaker Ahn Cheol-soo, representing Bundang-gu, Seongnam-si, Gyeonggi-do, has proposed an amendment to the ‘Restriction of Special Taxation Act’ aimed at incentivizing science and technology professionals currently working abroad to return to Korea. The proposal, submitted on October 25th, seeks to strengthen income tax reduction benefits for returning researchers, bolstering the nation’s competitiveness in critical fields like Artificial Intelligence.
The move comes amid growing concern over the outflow of highly skilled talent. Recent data reveals Korea ranks fourth among 38 OECD countries in net outflow of AI experts,with a rate of 0.36 per 10,000 people. A Bank of Korea survey further indicates that 40% of Korean science and engineering experts holding master’s or doctoral degrees are considering opportunities overseas, with financial incentives cited as the primary driver by 66.7% of respondents.
Currently, the law provides a 50% earned income tax exemption for 10 years for Korean nationals who earn degrees abroad, conduct research and development for over five years, and are later employed by a domestic research institute. However, this provision is set to expire at the end of 2023.
Rep. ahn’s amendment extends the submission deadline to december 31, 2028, and introduces a tiered reduction rate. The proposed benefits include a 100% tax reduction for the first three years after returning to Korea, 75% for the subsequent three years, and 50% for the final four years.
“We live in an era where a country’s scientific and technological capabilities determine its national power,” stated Rep. Ahn Cheol-soo. “By actively supporting the return of overseas researchers to the country, we will promote a U-turn in science and engineering talent, and thru this, we expect to speed up scientific and technological innovation and the improvement of national competitiveness.”
The amendment is expected to significantly enhance the appeal of returning to Korea for researchers, addressing a critical need to secure talent in a rapidly evolving technological landscape.
