R&D tax credit list grows from 157 to 284 technologies, but removals remain rare

The number of technologies qualifying for enhanced R&D tax credits continues to grow, but removals from the list remain rare, a new report shows. Lawmakers have been urged to scrutinize at the upcoming national audit whether adequate mechanisms exist to revisit tax benefits when technologies become commonplace or policy priorities shift.

According to the National Assembly Research Service's "2026 National Audit Issue Analysis" released Thursday, the number of technologies eligible for new-growth and source technology tax credits has grown from 157 across 11 sectors in 2017 to 284 across 14 sectors this year. National strategic technologies expanded from 36 across three sectors in 2022 to 87 across eight sectors this year.

The R&D tax credit system allows companies to deduct a portion of research and workforce development costs from corporate or income taxes. New-growth and source technologies, as well as national strategic technologies, receive higher deduction rates than general R&D spending, with a maximum rate of 50 percent.

The scale of tax expenditure from these credits has also grown. The total tax credit for research and workforce development costs stood at 2.63 trillion won ($1.94 billion) in 2021 and is projected to reach 4.15 trillion won in 2025. The 2025 figure is a projection, not a finalized amount, and the report does not break out the 2025 credit total for preferred technologies alone.

The National Assembly Research Service said that while the list of preferred technologies has steadily expanded, removals have been extremely limited. Many technologies dropped from the new-growth and source technology category were simply moved to the national strategic technology category, which carries even higher support. The research service warned that if the list only ever grows, the original purpose of concentrating tax benefits on technologies that genuinely need targeted development could be undermined.

The government has decided to introduce a "total advanced technology management system" this year. Under the new approach, when a ministry requests the addition of a new technology, it must submit an assessment of how widely adopted or outdated existing technologies in that area have become, and the government will use that assessment to consider removing some from the list.

However, sectors where no new addition requests are made would have little impetus to review their existing technologies.

Because the ministries responsible for each technology write their own assessments, how to verify the evaluation criteria and results remains an open question. The National Assembly Research Service said the government needs to spell out not only the criteria for adding preferred technologies but also those for removing them, along with the review cycle and procedures.

The sectors covered by national strategic technologies — including semiconductors, secondary batteries and AI — are enumerated in statute, with specific technologies defined by presidential decree. Revising the sectors listed in the law therefore requires legislative action. Several bills pending in the National Assembly would add defense industries, robotics and aerospace to the list.