Overview of SME Tax Benefits
SMEs can reduce their tax burden and secure growth capital through a variety of tax incentives. Support spans the full range of business activities, including corporate tax reductions, R&D tax credits, investment tax credits, and employment incentives.
In 2026, the SME special corporate tax rate has been maintained, and the R&D tax credit rate has been slightly increased. New tax incentives for digital transformation and carbon neutrality investments have also been introduced to encourage future-oriented investment by SMEs.
Key Tax Benefits
R&D Tax Credit Strategy
The R&D tax credit is the tax benefit SMEs should most actively leverage. By accurately understanding the scope of costs that qualify as R&D expenditures and managing them systematically, companies can achieve significant tax savings.
To qualify for the R&D tax credit, a company must maintain an in-house research institute or R&D department, and must systematically manage documentation of its research activities. Thorough retention of research notebooks, personnel cost records, and materials receipts is essential.
Eligible R&D Costs
Types of Policy Funds
Policy funds are loans provided by the government or public institutions to SMEs at interest rates lower than commercial rates. Various policy funds are available through the Small and Medium Business Corporation (SBC), Korea Credit Guarantee Fund (KODIT), Korea Technology Finance Corporation (KOTEC), and others.
Policy funds are categorized by purpose into working capital, facility investment, and startup capital. Available products differ based on the company's age, revenue, and credit rating. Strategically combining multiple policy funds can significantly reduce financing costs.
Policy Fund Application Strategy
When applying for policy funds, you must clearly present the company's financial status, business plan, and intended use of funds. It is particularly important to convincingly demonstrate that the funds will be used for investments that directly contribute to company growth.
Comparing products across multiple policy fund institutions and selecting the most favorable terms is strategic. Combining multiple policy funds when necessary can also maximize benefits. Additionally, linking policy funds with government support programs can amplify synergy effects.
KITIM's Support
The Korea Institute of Technology Innovation Management (KITIM) provides comprehensive support for SME tax benefit strategies and policy fund applications. From in-house research institute establishment consulting and R&D tax credit pre-review to policy fund matching and application writing, KITIM helps companies leverage government support from a financial perspective.