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Huge Tax Credit For Research And Development Of Blockchain In South Korea

January 14, 2019

The government of South Korea has announced that it shall give a significant tax credit to organizations engaged in the development or research of blockchain technologies in the country with effect from February.

The Ministry of Strategy and Finance which is in charge of the new virtualized currency space announced the list of times which are not be taxed in the country going forward. The list included other modern technologies such as wearable robots and from fine dust reduction technology.

Impact

Businesses which post expenses involved in blockchain research can post deductions. This deduction is typically 30-40% for small businesses, while that of the large and medium business will enjoy as much as 20-30% tax reduction. This is a huge jump from the previous large corporations 0 to 2 percent and about 8 to 15 percent for medium companies.

The announcement is perhaps the first of its kind in any part of the world which has adopted or is already engaged in the use of these cryptocurrencies. At the same time, this can be seen as the positive thrust of the country’s administration in hand holding companies engaged in these virtual currencies so as to give them the opportunity to further innovate and add nuances to make cryptocurrencies more useful and beneficial.

Inference can also be drawn from this announcement that it expects cryptocurrencies to encourage and further nurture the development of the blockchain technologies locally among the small and big businesses alike.

Cryptocurrency is only one aspect of blockchain. It uses and hyper-application is nearly unlimited as it will provide unlimited solutions for things that have taken too much time traditionally, like in elections, finance, logistics and more. This new technology has multiplicative computational power on its side and it will always use the many node systems to process any type of transactions that time faster. Hence, it will also validate things faster. A combination of these two factors along with allowing each node to function independently means there is transparency in the system, and every transaction is very well documented for the explicit reason to create a decentralized structure.

The government has therefore recognized that the blockchain can only attract more funds and investment for purposes of building solution as well as for the purpose of investigating, researching and developing a range of solutions in this regard.

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