Korea provides tax breaks for investment in new military tech

A KF-16 fighter jet Wing takes off from an undisclosed location. May 10. Courtesy of ROK Air Force

Korea will provide tax breaks for investment in technologies related to aircraft engines, military satellites and drone integration systems to boost the development of advanced weapons systems, the arms procurement agency said.

The Defense Acquisition Program Administration (DAPA) said defense contractors that invest in research and development (R&D), as well as equipment for advanced weapons systems, will qualify for tax incentives of 6-18 percent under an ordinance that took effect Thursday.

Under the ordinance, investment related to developing technologies needed to design, build, assemble, certify and test aircraft turbo engines, military satellites and integration of manned and unmanned systems will be eligible for the tax credit.

DAPA said the tax incentive program for innovative technologies newly included the defense industry to boost R&D and investment in the sector.

"The tax incentives are expected to facilitate investment in the defense industry and reduce risks related to arms exports," DAPA commissioner Seok Jong-gun said in a release.

The government has vowed to provide tax breaks and cut regulations on weapons development and production with the goal of becoming the world's fourth-largest arms exporter by 2027 to capitalize on robust demand for Korean artillery, tanks and fighter jets. (Yonhap)