South Korean AI data center industry seeks tax credit reform

Industry experts and academics are calling for revisions to South Korea’s tax credit system for AI Data Centers (AIDC), arguing that current regulations fail to reflect the industry's actual business models. During a policy forum held at the National Assembly, representatives from SK Telecom and Kakao highlighted a critical loophole: the 15% tax credit for national strategic technology is currently restricted to companies that build and use facilities for their own internal consumption.

Because building a 1GW AIDC requires massive capital—estimated at approximately 70 trillion won—the industry relies heavily on colocation (leasing) models where providers supply computing power and intelligence to external clients. Under current tax laws, these colocation-based investments are largely excluded from benefits. SK Telecom Vice President Lee Young-tak noted that because AIDC is designed to provide intelligence to others rather than for self-consumption, no companies are currently benefiting from the credit.

Academic experts suggested increasing the credit rate to 20%, matching semiconductor incentives, and expanding coverage to include cloud facilities and essential cooling equipment. While the Ministry of Economy and Finance maintains the principle of limiting credits to self-use R&D and investment, officials acknowledged the need to review whether supporting AIDC infrastructure is vital for the broader domestic AI ecosystem.