25% tax credit for Netflix and Disney+… Broadcasting industry “Korea should also raise the deduction rate”

Deduction rate for ‘video content production cost tax deduction’

Need to increase 10% for large companies and 20% for small and medium-sized enterprises

Netflix original series ‘Suriname’. photo courtesy of netflix

Five organizations, including the Korea Drama Producers Association, the Korea Broadcasting Channel Promotion Association, the Korea Broadcasting Association, the Korea Animation Industry Association, and the Korea Film Producers Association, urged the government to raise the tax deduction rate for production costs so that they can compete in the global market.

The five organizations issued a statement calling for an increase in the production cost tax credit rate in line with competitors in the video content industry in crisis, and the current content production cost tax credit rate, which is 3% for large companies, 7% for medium-sized companies, and 10% for small and medium-sized companies, is reduced to 10% for large companies and 15% for medium-sized companies. , announced on the 21st to raise it to 20% for small and medium-sized enterprises.

They said, “Even today, 20 years ago when K-content began to attract attention from the world, the content industry is still struggling to escape the smallness of 90% of companies with less than 10 employees and less than 1 billion in sales.” “Netflix, Apple TV+, Disney While production costs are skyrocketing day by day amid competition with global content providers such as +, the financial structure of legacy broadcast media is deteriorating, and the film industry is in danger of withering away as the number of audiences has decreased by 75% compared to 2019 due to COVID-19. there is,” he said.

“In this situation, the new government’s promise to designate the content industry as a future strategic industry that will feed the next 20 years of Korea and promise massive support has become a ray of hope in the dark,” he said. The contents of the government’s tax law amendment bill for the ‘video content production cost tax credit’ announced in March were decided at the level of extending the current system for three years while maintaining the existing deduction rates of 3% for large companies, 7% for medium-sized companies, and 10% for small and medium-sized enterprises. There is no way to hide the deep skepticism and disappointment.”

In addition, “The various tax support benefits given to other future strategic industries such as the Big 3 industries and the high tax deduction rate of more than 30% are why only the content industry should be bypassed. “I urge the National Assembly, the last bastion of public will, to face the crisis of the video content industry and faithfully fulfill the government’s promise of support as a future strategic industry,” he said. , We request that the deduction rate of the ‘video content production cost tax credit’ system, which is awaiting deliberation by the National Assembly, be raised to 10% for large enterprises, 15% for medium-sized enterprises, and 20% for small and medium-sized enterprises as follows.”

They said, “Currently, the domestic video content market has become a battleground for direct competition with global operators rather than a fight between domestic operators. We are targeting the Korean content market by investing huge production costs.” At the same time, he urged, “Even for the protection of the domestic video content industry, government support equivalent to this is desperately needed compared to global content providers, not comparison support with other domestic industries.”

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