Could South Korea's film industry truly recover if tax credits for investment were added on top of existing credits for production costs? A range of ideas is emerging to grow K-content, including film, under the goal of becoming a cultural powerhouse — but execution will ultimately decide the outcome.
Culture, Sports and Tourism Minister Choi Hwi-young officially confirmed on the 17th that the ministry is reviewing the introduction of SOFICA, one of France's signature film support programs. He spoke at a meeting with figures from the arts and culture sector held in a conference room at the Seoul branch of the National Museum of Modern and Contemporary Art in Jongno District, Seoul.
Responding to a request for measures to increase corporate investment in culture, Choi said, "We are studying how to activate the French (film investment) deduction system that was mentioned at a recent meeting with President Lee Jae-myung and director Lee Chang-dong, among others." He added that the president had also instructed officials to review it. "Even if others are not doing it, we should do it if we need it. If other countries do something well, of course we should do it," he said.
SOFICA is a tax support system in France under which individuals or private companies that invest in first-time directors, independent films or low- to mid-budget films receive tax reductions of up to about 40% of the invested amount. At a "Dialogue with Filmmakers" event held in France on the 7th, during President Lee Jae-myung's visit for events including the Lumière Summit, director Lee Chang-dong argued, "Through this system, France maintains a solid ecosystem in which diverse films are made."
The remarks also relate to Lee Chang-dong's own difficulties. The director had been pursuing production of the film "Possible Love" for several years, but failed to raise investment amid a film market slump caused by COVID-19 and ultimately had to rely on the U.S. streaming service Netflix. Intellectual property rights must be shared with such streaming platforms. If even a director of Lee's stature faced that, other directors have an even harder time securing film investment.
At the event, President Lee listened to the director's explanation, wrote notes down himself and then ordered an immediate policy review, saying, "When I go back, I will tell the Ministry of Economy and Finance and other relevant agencies to check on this right away. I will let you know the results later."
The government currently operates a tax credit system for film production costs. The cultural content production cost tax credit applies to two fields: film and video, and webtoons. In effect, the request is to single out film and apply tax credits to investment as well as production costs. Where the production cost credit reduces the burden on "the people who make it," SOFICA lowers the risk for "the people who put in the money."
The result would be an aggressive step toward invigorating the cultural industry by attracting private capital. It will not be easy, of course. It could function as a double benefit and, in particular, could trigger a broad overhaul of the arts and culture support system.
The dispute stems from the reality that even the cultural content production cost tax credit still applies only to some fields. Major sectors such as games, music and publishing remain excluded from the production cost tax credit. That is because the production cost tax credit was originally introduced for manufacturing. The culture sector demanded the same level of tax benefits as an "industry," and film and video have received production cost tax credits since 2017, with webtoons following from 2026. The current credit rates are up to 30% for film and video and up to 15% for webtoons.
The cultural content industry has also been moving closely in recent weeks. Eleven associations and organizations across content fields, including the Korea Association of Game Industry, the Korea Music Content Association and the Korean Film Producers Association, held an inaugural ceremony for the K-Content Industry Council on the 15th in the main conference room of the National Assembly Members' Office Building, sponsored by Rep. Lee Jae-jung, chair of the National Assembly's Culture, Sports and Tourism Committee. On the same day, they also held a ceremony declaring a vision of 400 trillion won for K-culture and 220 trillion won for K-content.
The aim is for the industry to take the lead in achieving 220 trillion won in sales from the content industry, the core of the government's previously announced 400 trillion won K-culture target. The goal is set for 2030, the final year of the Lee Jae-myung administration. On a preliminary 2025 basis, the K-culture market stands at 274 trillion won and K-content at 162 trillion won. To reach the 220 trillion won target by 2030, sales must grow 6.4% each year. Growth was only 2.1% in 2024 and 2.6% in 2025.
The council called on the government to remove regulations and provide promotion measures. Its six official tasks are: expanding the production cost tax credit to all cultural content fields; strengthening financial policy, including upgrading the fund of funds; improving flexible working hours to reflect the characteristics of the content industry; supporting the artificial intelligence transition and building a copyright framework; strengthening policies to stimulate content demand; and establishing integrated governance, including a presidential K-Content Committee and an export strategy center, along with a strategic export support system. The tasks can be seen as a compilation of what the content industry has been demanding.
As noted, expanding the content production cost tax credit was singled out as the top priority among these. The council said, "More than 12 countries, including the U.K., France and Canada, provide tax credits of 25% to 40% for digital content production such as games, but ours is limited to film and video and webtoons." It added, "Games, which account for 57.7% of content exports, and music, which ranks first in export growth, both receive no tax credit benefits." The groups face obstacles in the form of opposition or lukewarm attitudes from many ministries and organizations, including the Ministry of Economy and Finance.
Rep. Lee Jae-jung, representing the National Assembly culture committee, attended along with First Vice Culture Minister Kim Young-soo, who voiced support for the cultural industry. In a congratulatory address, Kim said, "The government will create an industrial environment where creators can take on challenges freely and companies can operate freely, and will actively support overseas expansion and responses to new technologies."
[From Choi Soo-moon's Cultural Capital] This column examines cultural phenomena unfolding in South Korea, a global cultural capital, and explores the path toward becoming a true cultural capital.
