South Korea to offer tax help, loans to companies hit by China trade measures

The South Korean government plans to allow duty-free operators and other retailers operating in China to defer all or part of their corporate income and value-added taxes for up to nine months.
The South Korean government plans to allow duty-free operators and other retailers operating in China to defer all or part of their corporate income and value-added taxes for up to nine months. PHOTO: AFP

SEOUL (REUTERS) - The South Korean government will offer tax concessions and loans to companies affected by trade measures China imposed on South Korea businesses in retaliation against Seoul's deployment of a powerful defence system, the finance ministry said on Thursday (Sept 28).

The government plans to allow duty-free operators and other retailers operating in China to defer all or part of their corporate income and value-added taxes for up to nine months.

The ministry added it will offer cheap loans to car-component makers hit by declining sales in China of vehicles made by Korean companies such as Hyundai Motor.

The loans would be made through policy financing using funds at state-supported institutions including the Export-Import Bank of Korea and Korea Trade Insurance Corp.

The measures announced on Thursday also include plans to boost domestic tourism, as the number of inbound Chinese tourists has been falling since Seoul decided to station a US missile shield known as the Terminal High Altitude Area Defence (Thaad).

The decision to deploy the Thaad system has drawn objections from China, which believes the radar could be used to look deeply into its territory.