A Study on the Financial Features of Nanotechnology based Companies and Tax Reform Proposals
Asian Tax Journal Vol. 12 No. 3 (2011), pp. 407-428
Abstract
Many countries that recognized nanotechnology as a head technology for the future are competing to come by superiority in this field. In spite of the late start Korea has got remarkable status in nanotechnology. This study is an empirical analysis of the Korean nanotechnology based companies(NCs) in financial features. The empirical results showed that NCs showed high growth but have financial distress because of much borrowings comparing with the other traditional companies (TCs). The low profitability could be an barrier to a sustainable growth of nanotechnology. It is necessary for Korean government and companies to make efforts for the improvement of the capital structure of NCs. Korean Government have proposed some special tax rules such as tax credit or tax exemption for NCs. But we thought these have not been effective because most NCs have little tax liabilities. So we propose another tax reform on partnership taxation. It is needed that the loss of partnership can be allocated to passive partners and then deducted to their income. We expect that profitability of NCs can be improved by this support.
Keywords
- Nanotechnology
- R&D Partnership
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