It has been announced that blockchain research is among the research fields that have been declared eligible for tax credit in South Korea.
The news was made public by the Ministry of Strategy and Finance who also revealed that the new tax code is to list wearable robots and fine dust reduction technology among fields eligible for tax credit. These changes are due to be effected in February.
What This Means
As a result of these new changes, a certain percentage of the expenses of businesses who are involved in Blockchain research will be tax deductible.
For small businesses, it is 30 to 40 percent and for medium businesses, it is 20 to 30 percent. The current rate tax-deductible is 0 to 2 percent for large companies, 8 to 15 percent for medium companies and 25 percent for small companies.
A Booming Business
This new development can be seen as the South Korean Government recognizing the potential in blockchain technology and supporting it.
In recent times, the scope of application of blockchain has gone beyond just cryptocurrency and includes other areas like logistics, finance and so on. According to the World Trade Organization, blockchain will add billions to the global trade industry over the next few years.
Considering how much money most countries make from global trade, the support of the research behind Blockchain is a good idea. This same narrative can be seen in the opening of blockchain research centers in places like Australia and the United States as well.
An Expensive Endeavour
As much as governments are benefiting from blockchain products, developments like this also help the blockchain industry.
Blockchain is a notorious tech and energy-heavy endeavor and thus, businesses exploring its use need all the help they can get. A prime example of this is the mining of Cryptocurrency which is infamous for the amount of energy it requires. Its large energy requirement has even led to people stealing energy in order to mine their currencies.
Companies that mine cryptocurrency have also been moving operations to places that offer cheaper electricity. However, this is getting more difficult as places like Norway have started ending their energy subsidies and last year, the cost of crypto mining increased more than 40 times in the country.
By offering tax breaks to blockchain research firms, their work can be done with more ease and efficiency and more beneficial blockchain products can be brought into the world.