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The K-Chips Act, a bill aimed at expanding tax benefits for semiconductor companies, has passed the Standing Committee… Ongoing disputes over the bill’s provision exempting semiconductor researchers from the 52-hour weekly work limits
The K-Chips Act, which grants tax benefits to semiconductor companies investing in building additional factories, etc., has passed the threshold of the National Assembly’s standing committee. On February 17, the Economy and Finance Committee of the National Assembly held a plenary session to review and resolve on an amendment to the Act on Restriction on Special Cases Concerning Taxation, which expands tax incentives for investment funds used by semiconductor companies to expand their factory facilities.
If the bill passes the plenary session of the Nation Assembly, tax credit rates for semiconductor companies’ facility investments will increase from 15% to 20% for large and middle-standing companies and from 25% to 30% for SMEs. The bill also expands the scope of semiconductor facility investment tax exemptions to include R&D facility investments, such as equipment purchases.
However, as the ruling and the opposition parties have differing views on the bill’s provision to exempt semiconductor researchers from the 52-hour workweek limit (also called, “white-collar exemption”), there has been no significant legislative movement regarding the Special Act on Semiconductors. Expectations are that, due to the unresolved debate over the 52-hour exemption, the bill’s passage within this month may be uncertain.
Meanwhile, on February 20, Acting President Choi Sang-mok, National Assembly Speaker Woo Won-shik, Chairperson of the People Power Party Emergency Response Committee Kwon Young-se, and Democratic Party leader Lee Jae-myung gathered for a state council meeting.
Acting President Choi stated, “If the labor hour exemption provision is not included in the bill, it would not be a Special Act on Semiconductors, but ‘an ordinary act on semiconductors,’” emphasizing the importance of including the 52-hour exception provision in the bill. Meanwhile, opposition party leader Lee responded that he could not agree with such a stance, saying, “People will not support the idea of adding conditions that are difficult to agree on and acting as if ‘we won’t do this if it’s not accepted.’” Acting President Choi and the People Power Party proposed a temporary implementation of the provision, stressing that the 52-hour exemption provision is central to the bill, while the Democratic Party opposed this proposal, citing opposition from the labor groups.
The participants agreed to address the ‘52-hour exception’ in further working-level negotiations due to significant differences in opinions.
As the first-ever Korean law firm to issue specialized legislative journals, DR & AJU Public Sector Relations Group has been publishing the monthly Policy & Business Report since August 2019. The February 2025 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from the opening of the 22nd National Assembly on January 15, 2025, to February 14, 2025, and selected and analyzed legislation with significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.
*DR & AJU Public Sector Relations Group provides P&B Report subscription services. Please contact us at Ic@draju.com for further inquiries.
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