South Korea Expands Tax Benefits for Cultural Content

October 27, 2025

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On October 15, 2025, the South Korean National Assembly accepted for consideration a Law proposing a partial amendment to the Special Tax Measures Act. The proposed amendments aim to broaden the scope of tax incentives and adjust credit rates related to content production. The proposed text is currently under review by the Planning and Finance Committee, and once approved, it will take effect 6 months after publication in the Official Gazette.

The Impact on the Cultural Content

The main reason for proposing these amendments is to expand existing tax benefits that currently apply only to video content, such as dramas, movies, and animations, to include the broader category of cultural content. As noted by members of the National Assembly proposing changes to the Special Tax Measures Act, under current rules, only producers and investors in video content receive tax deductions, leaving out major cultural industries such as games and music.

The National Assembly members underscored that these two sectors, particularly K-pop and gaming, play an essential role in cultural exports and global influence, where gaming accounts for 50% of domestic cultural content exports. Therefore, they proposed extending tax incentives to them to stimulate growth further.

As part of the measures to boost these sectors, the amendments revise the credit rates by increasing the rate for large companies from 5% to 10%, removing the 10% rate previously available to medium-sized companies, while maintaining the 15% rate for small and medium-sized enterprises (SMEs). After the Planning and Finance Committee completes its review, the proposed Law must go through several phases before being formally adopted, including a systematic structure review, plenary session deliberation, and government transfer.

Conclusion

In essence, the proposed amendments to the Special Tax Measures Act aim to transition from a narrow focus on video content to a broader cultural content category and to introduce tax deductions for production and investment in the games and music sectors to encourage growth and investment across South Korea’s diverse cultural industries. From another perspective, this approach formally recognizes that games and music now sit alongside films and dramas as pillars of the country’s soft-power and export economy.

Source: National Assembly

What is the main purpose of the proposed amendment to South Korea’s Special Tax Measures Act?

The main goal is to expand tax incentives beyond video content like films and dramas to include other cultural industries such as gaming and music, supporting broader growth and investment.

Which industries will benefit from the new tax incentives?

The proposed law will extend tax benefits to the gaming and music sectors, recognizing their growing importance in South Korea’s cultural exports and global influence.

How will the tax credit rates change under the proposed amendment?

The amendment increases the tax credit rate for large companies from 5% to 10%, removes the 10% rate for medium-sized companies, and maintains the 15% rate for SMEs.

What is the legislative process for the proposed amendment?

After review by the Planning and Finance Committee, the amendment must undergo a structured review, plenary session deliberation, and government approval before becoming law.

Why are gaming and music included in the new tax incentives?

Gaming and music are major cultural export sectors, with gaming alone accounting for about 50% of South Korea’s cultural content exports, making them key drivers of the nation’s soft power.

When will the new tax incentives take effect if approved?

The law will come into force six months after its publication in the Official Gazette, following completion of all legislative procedures.

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