South Korea Proposes Tax Credit Expansion to Boost Game and Music Production

South Korea’s National Assembly has introduced a bill that would broaden the scope of production‑cost tax credits to include the country’s growing game and music sectors. Democratic Party lawmaker Cho Seung‑rae presented amendments to the Restriction of Special Taxation Act on Monday, proposing that the tax‑credit provision be revised from “video content” to “cultural content.” The change would allow credits for games, records, music files and music videos, a move that industry observers say could strengthen South Korea’s export‑driven creative economy.

Under the current framework, the government offers a set‑rate deduction from income and corporate tax for costs incurred in producing content, but the benefit has historically focused on broadcasting, film and, more recently, webtoons. The game and music industries, which together account for a significant share of South Korea’s cultural exports, have been excluded from the scheme. Cho’s amendment would therefore extend the tax‑credit eligibility to these sectors, aligning the incentive structure with the country’s broader K‑content strategy. The proposal also seeks to replace the term “video content” with the broader “cultural content” in the relevant statutory language.

Cho first introduced a similar bill last year, urging the Ministry of Economy and Finance to address the gap during a parliamentary audit. The clause was removed at that time, and the bill was abandoned when an alternative policy was adopted. The current draft therefore represents a renewed effort to close the legislative gap that has drawn criticism from game developers and music producers who argue that the existing tax system does not reflect the realities of their industries. The amendment would provide a fiscal tool that could help sustain growth in two of South Korea’s most export‑oriented creative sectors.

Industry stakeholders see the proposal as a step toward aligning South Korea’s tax incentives with global best practices. The government’s support for broadcasting and film has long been a pillar of the country’s cultural diplomacy, but the rapid rise of the gaming and music industries—particularly K‑pop and mobile gaming—has outpaced the existing incentive framework. By expanding the definition of eligible content, the bill could create a more inclusive tax support system that reflects the diversified nature of contemporary content production. The change would also signal to international partners that South Korea is committed to maintaining its competitive edge in the global creative economy.

Proponents argue that the expanded credits could increase investment in game development studios and music production houses, potentially boosting export revenue. The Korean music industry, for example, has seen record sales and streaming figures rise sharply in recent years, while the gaming sector continues to dominate global mobile and esports markets. A tax incentive that mirrors the scale of these industries could help sustain their growth trajectory and reinforce South Korea’s position as a cultural exporter.

At present, the bill is in the early stages of parliamentary consideration and has not yet been debated or voted on. The National Assembly will need to approve the amendments to the Restriction of Special Taxation Act before the changes can take effect. If passed, the expanded tax‑credit provision would become part of the statutory framework governing production costs for cultural content, potentially providing immediate relief to game studios and music labels. The next steps will involve committee reviews, stakeholder consultations, and a final vote in the Assembly. Until then, the proposal remains a legislative proposal awaiting further deliberation.