Issue Focus

Representative Kim Yun-deok, a member of the National Assembly's Culture, Sports, and Tourism Committee, has put forward a bill aimed at amending the Restriction of Special Taxation Act. This amendment seeks to provide tax incentives for eSports tournaments hosted outside the Seoul metropolitan area. The main goal is to boost the eSports industry in South Korea, which, while a significant part of the country's content export market, struggles with issues like a limited pool of locally developed eSports games and financial strains on companies managing eSports teams.
Currently, companies in South Korea that operate eSports teams benefit from a 10% corporate tax reduction on expenses such as wages, attendance fees, and training equipment. However, this level of support is considered inadequate when compared to countries like the U.S., China, and Saudi Arabia, where there is more substantial governmental financial and tax backing for the eSports sector.
The proposed amendment suggests that Korean companies organizing eSports events would qualify for a 30% tax deduction on operating costs, provided that over half of their tournaments occur outside Seoul's metropolitan region. A 20% deduction would apply to events held exclusively within the area. Representative Kim believes this initiative will encourage the dispersal of eSports events nationwide, further boosting Korea's global standing in gaming and eSports.