Photo : YONHAP News

A parliamentary subcommittee has approved bills to raise the tax credit rate for the semiconductor industry and extend the sunset expiry date on tax credits for research and development(R&D) and facilities investment.

The subcommittee under the Strategy and Finance Committee on Tuesday approved one of the bills, also known as the “K-Chips Act,” which stipulates increasing the integrated investment tax credit rate for chipmakers by five percentage points.

Should the bill pass the committee, and then the National Assembly, the tax credit rates for facilities investment are expected to rise from the current 15 percent for conglomerates and 25 percent for small and midsize enterprises(SMEs) to 20 percent for conglomerates and 30 percent for SMEs.

Another bill that passed the subcommittee would extend existing tax credits for R&D in new growth, source technology and national strategic technologies by five years through the end of 2029, and for semiconductors by seven years through the end of 2031.