South Korea proposes ending esports tax credits

South Korea’s Ministry of Finance and Economy has proposed ending two key tax credits for the esports industry on December 31, as part of a 2026 tax reform plan. The proposal aims to improve tax expenditure efficiency by converting certain tax reliefs into direct budget spending.

The targeted measures include Article 104-35, which allows corporations to deduct 10% of costs for staging esports tournaments outside the Seoul capital region, and Article 104-22, which permits a 10% deduction of operating costs for three years for companies establishing corporate sports teams, including esports teams.

In response, five industry bodies—including the Korea Association of Game Industry and the Korea e-Sports Association (KeSPA)—issued a joint statement on August 14. They are calling for the ministry to withdraw the termination, extend the tournament credit through 2030, expand its application nationwide, and increase the deduction rate to 20%. The plan faces a tight legislative schedule, with submission to the National Assembly expected before September 3.