South Korea's Ministry of Economy and Finance published a draft follow-up amendment to the tax enforcement decree package underpinning the 2025 tax system revision. The draft sets detailed rules for expanded research and development (R&D) incentives for designated strategic technologies, tighter parameters for the integrated employment tax credit, and a new separate taxation regime for dividend income from qualifying high-dividend companies, alongside measures on household tax relief, taxpayer rights, and compliance enforcement. On R&D, national strategic technologies would increase from 78 to 81 detailed technologies across eight fields and new growth and original technologies from 273 to 284 across 14 fields, with additions including next-generation multi-chip module materials and packaging-related semiconductor technologies, eco-friendly advanced vessel transport and digital design, and turquoise hydrogen. Eligible R&D expenses would be broadened to include purchase costs for artificial intelligence training data, and higher investment credit treatment for R&D facilities would continue even if facilities are temporarily used for commercialisation, subject to recapture of the credited tax and interest if R&D use falls below 50% from the investment completion date through the end of the next three taxable years. For the integrated employment tax credit, mid-sized enterprises would need employment increases above 5 employees and large enterprises above 10 employees, and workers aged 34 or under at contract signing would be treated as youth for four years from the contract date, or three years for large companies, for purposes of the preferential credit amount of KRW 2 million to KRW 7 million. The high-dividend company regime would exclude qualifying cash dividends from the comprehensive income tax base and apply separate tax rates of 14% up to KRW 20 million, 20% for KRW 20 million to KRW 300 million, 25% for KRW 300 million to KRW 5 billion, and 30% above KRW 5 billion, with eligibility based on a dividend payout ratio of at least 40%, or at least 25% plus a dividend increase of at least 10%, and payout ratios calculated on consolidated financial statements where available. Securitisation special-purpose companies such as funds and real estate investment trusts would be excluded, while loss-making companies could qualify in limited cases if dividends rise by at least 10% and the debt-to-equity ratio is 200% or less. Additional provisions covered in the draft include rules for a four-year tax deferral on capital gains from in-kind contributions of shares of foreign subsidiaries by domestic corporations, expanded deductibility of bad-debt losses on indemnity claims tied to overseas core-resource-related guarantees, detailed criteria for tax-exempt interest on the Youth Future Savings Account and other household and small business reliefs, updates to electronic filing and withholding credits, adjustments to the education tax base for the finance and insurance sector and deemed capital taxation for domestic branches of foreign banks, and new or clarified administrative fines and cash receipt issuance obligations.

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